02 Oct 2019

Minestrone mash. A range of options are on the table as 31 October approaches

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In a hotel in Manchester earlier this week, amidst the clamour and bustle of the Conservative conference, there was a changing of the guard here at the BVCA. After a typically insightful and energetic contribution to our fringe event with the CBI, Tim Hames handed his responsibilities as Director General over to me in a quiet(ish) corner of the Midland Hotel lobby. It might not have had quite the historic significance of the occasion when Charles Rolls and Henry Royce first met there a century ago, but in that moment the BVCA baton was passed across and I was very glad to accept it.

Last week, in rather more ornate surroundings in the Palace of Westminster, Tim was given a special send off by an impressive cross section of the sector’s leading figures and the BVCA team past and present. The warmth and sincerity of the tributes was clear to everyone. And it is quite a legacy that Tim bequeaths, something I appreciate all the more having shadowed him for the past couple of months. It has not quite been a job share, but working together through the transition has provided me with an understanding and knowledge of the organisation it would otherwise have taken a long time to gather. I am very grateful to Tim for that, and so much else, and I happily join everyone else in wishing him all the best for the future.

Over the past few weeks we have been together at the annual party conferences, marvelling at the previously unimaginable state of UK politics. I have to say that up close it is not necessarily any easier to understand than when you filter it through a broadcaster’s lens or a social media feed. Indeed, the sense of politics as virtual reality was hard to shake off at times. The process of re-immersing myself in the conference routine after a five-year absence perhaps heightened the feeling, but I am confident that on any (reasonably) objective measure, the conference season has intensified the near surreal mood of British politics. All of this ahead of what will be a generation-defining set of decisions in Westminster and beyond this autumn.

‘Get Brexit Done’ was the tagline to the Conservative conference. And it is not just members of the governing party who would have sympathy with the slogan’s intent after three and a half years of post-referendum debate. Alas, the ‘how’ remains as divisive as ever: in Bournemouth, the Liberal Democrats committed themselves to revoking the referendum result so as to stay in the EU; in Brighton, Labour pivoted to a second referendum where a re-negotiated exit deal would be pitted, neutrally, against the option to remain in the EU; and in Manchester, the Prime Minister continued to champion a departure at the end of this month ‘come what may’. Each party’s position has been picked over forensically for signs of viability or hints at compromise, but little consensus has been found, thus underscoring the sense of virtual reality.

Meanwhile, back in Westminster, Parliament has been sitting, after the Supreme Court’s historic ruling of a week or so ago. There are 90 recalled Members of Parliament there (discounting Sinn Fein, the Speaker and his two deputies) who have not been at one of these traditional ‘main party’ conferences – perhaps an historic high. Those 90 are divided in many ways, from the 10 Democratic Unionists and solitary Green, to the 35 Scottish Nationalists and 40 ‘independents’ (those who have left the party on whose ticket they were elected, or have been excluded from their old party). This parliamentary cocktail would challenge any Prime Minister, even in less charged political moments. Straining or filtering the ingredients needed for a majority is realistically beyond anyone.

So what will give? Mixing my clichés as freely as my metaphors, the short term is dominated by the upcoming collision between an irresistible force, which the Prime Minister aspires to be, and an immovable object, represented by Parliament and the ‘no deal’ legislation it passed a month ago. My money is on the immoveable object for now, but avoiding no-deal on Halloween would not resolve the issues.

Calculations beyond the end of this month are then clouded by competing, if not mutually exclusive, priorities – delivering or avoiding Brexit on the one hand, and forming, or being part of, the next government on the other. The options are diverse: it could be Brexit then a general election, or a Brexit extension, general election then referendum, or a Brexit extension, referendum then a general election. Other combinations are available, and not all implausible. Any of these recipes could yet deliver a subtle variation on the minestrone mash we currently have in front of us rather than a completely new parliamentary dish.

Standing back from the heat, our priorities within the sector are to keep on top of the practical aspects of what no-deal could mean for firms and their portfolio companies – our current advice can be accessed here. We are also finalising our Budget submission, anticipating that during the period before any election the government will build on September’s Spending Review with the annual update on tax and spending. And, of course, we are studying the parties’ plans for election manifestos, having listened carefully to and engaged with senior figures in each of the parties over the conference season.

Next Thursday we have the BVCA Summit, and the day before it the LP Seminar – our theme is about the next decade and how private equity and venture capital will develop in that period. I am already very excited by the optimism and enterprise in the sector and I look forward to the discussions and insights we will be sharing with one another. I am equally enthusiastic about to using that dynamism as an important backdrop to my own contribution as I set out my own thinking on the opportunities and challenges ahead. I hope to see many of you there.

Michael Moore
Director General, BVCA


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