Dubai-backed institute Legatum setting the tone for Brexit
The Mayfair think tank is helping the British government to establish a new relationship not only with the EU but within the whole international trading system
When Britain voted to leave the European Union, Shanker Signham was presented with an opportunity that few in London were better prepared to master: how to influence an independent trade policy that revived the global free trade agenda.
A lawyer by training, Mr Singham works for the Legatum Institute, a Mayfair think tank, that has made all the running as the British government has sought to establish a new relationship not only with the European Union but within the whole international trading system.
Allegations have since flown thick and fast that Mr Singham is effectively pulling the strings of the British government’s policy.
While rejecting that charge, he does not deny that Legatum Institute, which is substantially funded by the Dubai-based investor Christopher Chandler, has acted swiftly to lead British thinking on the path to Brexit.
The 48-year old told The National that his strong belief in freeing up global trade had been twenty years in the making. Having returned to London just six months before the 2016 vote, he used his experience in the US to assemble a Special Trade Commission in just a few weeks. It has since advised officials, politicians, businesses and the media on how the United Kingdom could be a deacon for free trade.
While living in America, Mr Singham worked for a leading law firm, as an advisor to the Office of the United States Trade Representative and the Republican presidential candidates Mitt Romney and Marco Rubio.
“Once the referendum result was known, Legatum took the decision to set up a special trade commission of international trade experts and former negotiators for all stakeholders in business, media and politics” he says. “ Our starting point was that the people have voted for this outcome. There will either be a good Brexit or a bad one -- terms like hard and soft Brexit are meaningless and unhelpful.
“We believe that a good one maximises the opportunities and minimises the disruptions caused by EU exit. This requires the UK to be able to execute an independent trade policy and an independent regulatory policy.”
In fact the result caught Mr Singham as much by surprise as the country at large – he had written an article supporting the remain argument just a few days before the vote.
“I joined Legatum in January, six months before the referendum, to work on a programme investigating how open trade, competition on the merits and property rights can best be employed to benefit countries and lift people out of poverty and into prosperity, and how they can be improved to create a more equitable future for all, particularly the poor,” he said.
Legatum boasts close links to several leading members of the “Brexiteers,” the politicians that have been put in charge of securing a good deal for Britain when it leaves the EU. It was reported at the weekend that Mr Singham was present as Boris Johnson, the foreign secretary, and Michael Gove, the environment secretary, wrote a notorious memo to Theresa May demanding a stiffer negotiating stance with Brussels.
“The letter allegedly sent by Boris Johnson and Michael Gove to the Prime Minister was not co-ordinated by Shanker Singham,” a spokesman for Legatum said. “Upon request, Shanker Singham provides advice to parliamentarians (including members of the Government), members of the civil service and the business community because of his unparalleled level of knowledge and expertise in the areas of economics and trade policy
“For senior Ministers to write to the Prime Minister is not in any way unusual. To describe such correspondence as a ‘coup’ illustrates the divisions that still exist many months after the referendum.”
Leading allies of the institute have also hit out at press suggestions Legatum is in any way linked to Vladimir Putin’s Russia and Moscow’s attempts to influence Brexit. The claims arise from business investments almost two decades ago by Mr Chandler in Gazprom, the Russian energy producer. “We refute in the strongest possible terms the allegation that The Legatum Institute Foundation is aligned with, influenced by, or somehow connected to Vladimir Putin or the Russian state, or has ever been,” a statement said. “The suggestion is completely incongruous with our work, carried out over an extended period, which has openly challenged communication practices in Russia. The Legatum Institute Foundation has been a vocal public critic of Russia over many years and has employed on its staff some of the world’s most renowned critics of Russia’s leadership.”
A Legatum report by Edward Lucas, a prominent writer on the Economist magazine and Anne Applebaum, a Washington Post columnist, was one of the first comprehensive attempts to analyse influence-peddling in the West by Russia.
Mr Lucas said the criticism of Legatum’s role amounted to hypocrisy. “Brexit has almost no support in the world of people paid to study public policy. All the main think tanks that influence politicians are against leaving the European Union,” he wrote. “As it happens I agree with them. I think Brexit is an extraordinary act of self-harm.
“The scandal is not that we have a think tank with some Brexiteers onboard but that the rest of academic and intellectual landscape is in the hands of the Remainers.”
The former Labour cabinet ministers Liam Byrne and Ben Bradshaw have called for inquiries into Legatum’s Russian links.
But its case for a clean Brexit from Europe after 45 years has dropped Legatum into the political crosshairs. Its arguments for a so-called hard Brexit are rooted in both the history of free trade and a critique of Brussels recent record of ever more detailed regulation of commerce. To Mr Singham the once promising European Commission approach to dismantling monopolies and barring state subsidies for failing businesses has fallen into the rear-view mirror.
“You are seeing a part of the world that is very focused on outcome and principles based regulation and another part of the world that has a very high level of prescription,” he said. “While over the last twenty five years or so, we have seen a reduction in [EU] border barriers, and improved property rights protection, we have seen little progress on building actual pro-competitive markets behind borders. The result has been the increase in anti-competitive market distortions in the world.”
While advocating a comprehensive free trade deal with Europe – one that would include services and finance in a world first – Mr Singham also wants London to seek its own deals with countries that share its legal traditions and a bias toward deregulation, such as the US and former British colonies.
He cites recent European rules on the regulation of data as harmful to the fast growth of the digital economy. Brussels is too wedded to placing regulation before opportunity.
“It is possible that the prescriptive approach will end up with pro-competitive regulation, but it is much more likely through the application of market forces,” he said.
Legatum has undoubtedly become a revolving door for the new British trade department. Crawford Falconer, a former member of the commission was appointed the UK’s chief trade negotiator in August. Mr Singham has been spotted both at Chevening, the foreign secretary’s country house, and in the House of Commons after meeting with ministers.
Concerns that British trade with Europe could fall off a cliff-edge as London leaves a customs union with the EU are overblown, according to Legatum reports. What is needed is a transition period in which Brussels recognises that British trading standards are aligned with those of Europe. Divergence over time would be dealt with by putting in place strong mechanisms that would examine rule changes and making licensing decisions based on transparent shared rules.
The Legatum position received powerful backing from Roberto Azevedo, the head of the World Trade Organisation, who dismissed warnings that trade would grind to a halt. “If you don’t have a fully functioning free-trade agreement with the EU there could be rigidities and costs introduced to the relationship,” he said. “But it’s not like that trade is going to stop.”
In fact the prospect of post-Brexit Britain joining the Transpacific Partnership (after President Donald Trump withdrew American backing) and sealing a separate trans-Atlantic trade deal with the US is just the sort of high-impact shot in the arm that the world trade body needs, according to Mr Singham. Drawing together countries that want to tackle regulation on trade with new pacts, including a deal with the Gulf, could even influence President Donald Trump’s American First agenda in a surprising way.
“There is a window of opportunity on trade policy to take advantage of these trends, which include the Trump concerns about market distortions and its desire to do a deal with the UK,” he said.
Updated: November 27, 2017 08:01 PM