Money, now that the tax code permits one to keep it, is back in style. "It was a most amazing change," notes Tom Lloyd, editor of Financial Weekly magazine. "All of a sudden, people were working 16 hours a day."
Signs of industrial recovery abound. The scaled-back steel industry is now among the most efficient in Europe and will likely be privatized soon. Textiles, too, are rebounding. In Scotland's Silicon Glen, a new computer industry is flourishing; electronics products rival Scotch whiskey as the area's top export.
The streets of London teem with luxury cars -- Rolls-Royces, Bentleys, Mercedeses, BMWs. London itself is being refurbished. The derelict dock areas of old South London, once reminiscent of Dickensian squalor, have sprouted shiny new buildings.
Bookstore business sections are crammed with new volumes on management, entrepreneurship, and investment. The percentage of the population owning stock has tripled since 1979, to 21%. Where before there was one television show about financial affairs, there are now several, with more being planned. And there's a new magazine on personal finance, Money & Family Wealth.
"It is unbelievable. Nobody used to talk about money; it was just not done," says Viscount David Linley, the 26-year-old son of Lord Snowdon and Princess Margaret. "It has changed from being a country that didn't feel much like working to a country where you can feel it as you walk down the street."
Time was when a man of Linley's lineage -- a titled aristocrat, a nephew of the queen, a future member of the House of Lords -- might have become a country squire. Instead, he has become an entrepreneur. His company, David Linley Co., manufactures fine furniture. Branching out, Linley recently opened a restaurant in Chelsea Harbor, a trendy new development on the Thames.
The successful entrepreneur has emerged as a cult figure in Britain. Sir Clive Sinclair, no longer seen as a misfit, was knighted by the queen. Richard Branson, the hippieish founder of upstart Virgin Atlantic Airways, calls at 10 Downing Street to deliver advice, and his face peers out from bookstore windows on the cover of Richard Branson: The Inside Story, a hot seller.
Such role models as Branson are inspiring the next generation. A recent survey found that teenage Brits, like their American counterparts, are rejecting rebellion and nonconformity. They want to be sufficiently well heeled to take advantage of the material benefits of Thatcherism. "Free love and communal poverty are out," reported the London Times, "while a strong work ethos, designer clothes and a status motor car are in."
Risk taking, furthermore, is not only acceptable but fashionable. "When you go to parties around Cambridge now, people find you far more interesting if you are an entrepreneur, if you are doing your own thing," observes Charlie Brown, a director of Cambridge Venture Management Ltd., which helps manage many young businesses around the old university town.
What Thatcher has done is to create the tools to stimulate growth. Consider the Unlisted Securities Market, the stock exchange that brought Sophie Mirman's Sock Shop public. The USM was established in November 1980, just 18 months after Thatcher took office. Since then, it has seen an average of two new offerings a week.
One man who keeps a close eye on this action is Ian Restall, editor of USM Magazine. He founded the publication last year to profile new listings, carving out a successful company of his own. Restall, a former stockbroker, operates from a converted butcher shop on the edge of the City, London's financial district. A huge window behind his desk affords a magnificent view of St. Paul's Cathedral, Sir Christopher Wren's masterpiece.
A company going public on the main London exchange has to have been in business for five years, he explains, and it must offer at least 25% of its equity. On the USM, the requirements are reduced -- a three-year history and a sale of as little as 10% of equity.
"This is not a funny market that is tucked away in a corner," Restall says. "These are stock-exchange companies with the full backing and investor protection of the exchange. Before 1980, there was nothing like this. Now, we have some of the sexiest companies you've ever seen."
Sophie Mirman's Sock Shop International, with 1988 profits forecast at $5.7 million, is one of them. Besides raising money, the USM experience helped the company grow in sophistication, since it motivated Mirman to put a solid management team in place. "Richard and I had been running the whole company -- the buying side, the financial side, merchandising," she says. "Now, I have a team of five buyers, all of whom are far more talented than I am. We have a personnel manager, a training manager, and a team of accountants. That has enabled us to take more of an overview and get on with planning."
The USM has done something else for business development. By enabling companies to raise large amounts of capital -- and by enabling early investors to cash out -- it has encouraged the growth of the British venture capital industry, now the strongest in Europe.
Venture Economics Ltd., a private group that tracks the industry, reports that more than $1.7 billion was invested in nearly 1,200 companies last year within the United Kingdom -- up 77% in dollar volume from 1986. And while some of the deals are huge, many are tuned to young companies. Small "seed corn" funds are springing up to finance new companies.
To help fuel the investment boom, the government took another extraordinary step, launching the Business Expansion Scheme (BES) in 1983. Under this plan, a private investor can claim a tax credit up to the top rate of tax, currently 40%, for funds invested in growing businesses. The investor must leave the money there for at least five years, after which capital gains can be taken tax free. Some 2,200 companies have received about $780 million under this arrangement.
In practice, much of the BES money is channeled through venture capitalists, people like Dennis Fredjohn. A Cambridge-educated veteran of the aluminum industry, the 63-year-old Fredjohn founded his company, Capital Ventures Ltd., in 1981. Since then he has gained a reputation as something of a buccaneer, willing to gamble where others won't. One of Fredjohn's many success stories is Sinclair International Ltd. (no relation to Sir Clive).
