The Economist - UK (2022-03-19)

The Economist March 19th 2022 Britain 23

Ukrainianrefugees

Put-up job

I

n 1939 millionsofBritishchildrenwere

evacuated from cities and towns that

mightbebombedandsenttolivewithru­

ralfamilies.It wasa wrenchingexperience.

Notonlyweretheyseparatedfromtheir

parents;theirhostswereoftenreluctant

and unfeeling. One evacuee, John

McGuirk,rememberedbeingdumpedwith

otherchildren ina churchyard: “People

camearoundandpickedyouliketheywere

pickingdogsoutofpetshops.”

Sotheresponsetoa newgovernment

schemethatwillallowBritonstoaccom­

modateUkrainianrefugeesisa delightful

surprise.OnMarch14ththegovernment

askedhouseholdstoregisteraspotential

hosts;bytheendofthefollowingdaymore

than100,000hadsignedup.It isnotasim­

mediatelyhelpfulassimplydroppingvisa

requirements,asotherEuropeancountries

havedone.Butpastexperience suggests

thatinvitingordinarypeopletohelpsettle

refugeesworkswell.

Atfirst,Britain’sschemewillrelyon

personalconnections.Peoplewishingto

offershelter mustname specific Ukrai­

niansandentertheirdetailsonanapplica­

tionform.Afterbasicsecuritycheckson

bothparties,therefugeeswillbeallowed

toenterBritainforthreeyears.Theywillbe

abletoworkandreceivewelfare,andtheir

hostswillbepaid£350($455)a month,tax­

free.Intimethegovernmentexpectschar­

itiestomatchUkrainianswithhostswho

donotknowthem.

Canada has allowed communitiesto

sponsorrefugees since 1978. More than

300,000 people have arrived under the

programme, which seems to help them

findtheirfeetquickly.A studybythreeaca­

demicsatCanadianuniversities,LisaKai­

da,FengHouandMaxStick,estimatedthat

90%ofmaleand71%offemaleprivately

sponsoredrefugees foundjobs withina

year—17and 24 percentagepointshigher

thanthesharesamongrefugeessettledby

thegovernment.Theprivatelysponsored

refugeeswerebettereducated,whichex­

plainssomeofthedifference,butnotall.

In 2016 BritainstartedtosendSyrian

refugeestocommunitieswillingtohost

them.Thatschemeissmall,withalmost

700 peoplesettledsofar,andismuchmore

ponderous and finicky than the new

HomesforUkrainescheme.Communities

cannot request particular refugees. The

thinkingisthattheSyrianswhomostneed

helparenottheoneswithcontactsinBrit­

ain,  says  Monika  Kruesmann  of  Reset,  a

charity  that  assists  hosts  and  refugees.

Hosts must provide separate accommoda­

tion,  not  just  spare  rooms,  and  are  rigor­

ously inspected. 

Jenny  Phillimore  of  Birmingham  Uni­

versity assessed the scheme  and  found

someproblems.SomeSyrians became iso­

latedafterbeingsettled  in  rural  areas  far

fromotherArabicspeakers.  Despite  good

intentions, the British  volunteers  could

nothelpwitheverything: “They’re all quite

middle­class;theydidn’t  understand  the

benefitssystem,”saysMs  Phillimore.  But

theyprovedexpertathassling head teach­

ers,doctorsandofficials, and the refugees

wereenormouslygrateful.  She  thinks  the

schemeworkswelloverall. 

Some fear the Homes  for  Ukraine

schemewillendangervulnerable, trauma­

tisedpeopleandundermine  the  existing

asylum system, in part  by  convincing

Britonsthathelpingrefugees  is  their  job

rather than the government’s.  The  first

worryisvalid.Thegovernment  has  so  far

beenvagueabouthowcarefully hosts will

bechecked.UnlikeSyrian  refugees,  most

oftheUkrainiansareexpected to be single

womenormotherswith children. The men

havebeenconscripted. 

Strangerthings

Thesecondworryismisplaced. Britain cer­

tainlyhasa dysfunctional asylum system:

lastJune70,000people  were  still  waiting

fortheircasestobeheard. Asylum­seekers

areusuallybannedfrom working, causing

theirskillstoatrophy,and are often stuck

inpoorhousing.Thegovernment has been

trying to legislate to make  the  system

harsherstill.Butallthat was unfortunately

true beforeRussiainvaded  Ukraine.  The

HomesforUkrainescheme  is  a  point  of

lightthatilluminatestheawfulness of the

mainstreamasylumsystem.  It  seems  odd

tocomplainaboutthat.n

After weeks of dither, the government

comes up with a decent plan

No place like home

Equitymarkets

Order Floww

G

iven itshistory, the London Stock Ex­

change (lse) was predestined for rein­

vention.  It  started  life  in  1698  as  a  list  of

prices stuck to the wall of a back­alley cof­

fee  house;  a  hundred  years  later,  it  was

hosting  three­quarters  of  the  world’s

stockmarket. By the turn of the 21st century

the  roar  of  open­outcry  trading  had  been

replaced  by  the  hum  of  mainframes.  On

March  15th  the  lse announced  its  next

transformation: into an exchange for priv­

ate companies as well as listed ones.

The  new  bourse  will  be  a  partnership

with  Floww,  a  database  for  private  firms

and  venture­capital  (vc)  funds  in  which

the lse’s parent company has bought a mi­

nority  stake.  Floww  was  designed  to  con­

nect startups to potential investors by en­

abling them to share commercial data in a

standard,  easily  verifiable  form.  The  lse

intends  to  take  that  model  two  steps  fur­

ther.  First  it  will  turn  the  database  into  a

platform  on  which  companies  can  raise

capital by selling equity stakes to vcfunds.

Then  it  will  add  a  secondary  marketplace

where  investors  can  trade  the  resulting

shares—thus  helping  startups  attract  in­

vestors in the first place.

Similarities  with  how  public­equity

markets  work  are  no  coincidence.  Murray

Roos,  the  head  of  capital  markets  at  the

lse’s parent company, wants it to be a step

towards creating exchanges that are “genu­

inely indifferent as to whether a company

is  public  or  private”.  Then  private  firms

would be able to raise capital on a standar­

dised  exchange  rather  than  in  vc invest­

ment rounds, which happen behind closed

doors.  He  envisages  a  “funding  continu­

um” that would ease private firms’ eventu­

al transition to public markets.

An  exchange  for  private  equity  would

be  good  for  investors,  too,  because  the

market for unlisted firms has grown more

important in recent years. In 2021 private­

equity  investors  struck  deals  worth  a  re­

cord­breaking $1.1trn globally. vcfunds ac­

counted  for  a  further  $621bn.  Onerous  re­

porting  obligations  for  listed  firms  have

led  to  companies  staying  private  for  lon­

ger, growing all the while. That delays the

moment when most investors can buy in,

denying them a larger share of the wealth

successful companies generate. At first the

new exchange will target institutional buy­

ers,  but  the  end  goal  is  to  redress  the  bal­

ance by allowing retail investors in too.

Another, unspoken, aim of the partner­

The London Stock Exchange plans a

new bourse for private companies