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Pro-business policymakers like to close their eyes and think of Singapore. The tiny city state, with its low taxes and ease of doing business, was held up as a role model by the Brexit camp ahead of the 2016 referendum. A decade later a House of Lords committee is taking up the chorus, recommending last week that UK financial regulators follow its example.
Many businesses have heeded the siren call. Dyson decamped there from Wiltshire in 2019, insisting the move was about “future-proofing” the vacuum maker given its increasing focus on Asia. Today the British Chambers of Commerce in Singapore boasts 300 member organisations, and its US cousin has twice as many.
The main appeal is a lack of red tape. Only New Zealand, a country with an even smaller population, beat Singapore in the World Bank’s now defunct ‘ease of doing business’ rankings. Businesses can get hooked up with water and electricity within a week, versus more than a month in the UK according to the World Bank’s Enterprise Surveys. Wait times for permits, visas and licences are modest; polls reveal few gripes about bureaucracy.
Singapore is a role model in other ways: it outranks Britain in innovation, for example. But, for the UK, turning London into Singapore-on-Thames is as impossible as transporting the city state’s balmy climes. Low taxes and warp-speed approvals don’t jibe with a fiscally-stretched country of 10 times as many people.
Even so, Britain should do better than it does on the basics. And, rather than try to emulate the Singaporean model wholesale, it should — and does — select from its impressive tool kit.
Take regulatory sandboxes, which provide a more flexible environment for new technologies and products. Singapore was an early proponent of sandboxes in fintech, setting out guidelines in 2016 and relaxing rules within a constrained environment to foster innovation. British officials subsequently followed suit.
Or look at Pisces, the platform for trading stakes in private companies which the UK financial regulator is launching this year and which bears more than a passing resemblance to similar platforms operating in Singapore.
Adopting innovation from overseas is itself a Singaporean practice. The Asian city state followed the UK’s regime for Insurance Linked Securities, such as catastrophe bonds, and ran with it. It approved many more ILS vehicles in the time it took the UK to greenlight a handful.
Chastened UK regulators have long been working to concertina down the 4-6 weeks it takes to authorise these vehicles to just 10 days — a change that will take effect later this year. The fact that these plans have taken so long to hammer out, however, suggests Britain has missed one of Singapore’s most imitable qualities: moving promptly.