UK firms perform better under foreign ownership, says the trade minister Gerald Grimstone.
“All our research shows that overseas invested companies in the UK are more productive … they generate more jobs than UK companies, they generate more intellectual property and they export more," he told the BBC.
It is why, Aggiunge, Britons should not fear foreigners snapping up even more of our largest companies.
It has become an issue after a flurry of deals involving some big UK names, the supermarket chain Morrisons among them. Recent figures show that overseas buyers have spent more acquiring UK-listed businesses in the last eight months than they have in the last five years combined.
Sadly, Lord Grimstone is right about foreign-owned businesses. Research does indeed show that our most productive companies are Japanese, American and German-owned, especially in the sector that lends itself most to measurements of productivity – manufacturing.
And Grimstone knows all about selling off Britain’s family silver. As a senior civil servant in the early 1980s, before he began his journey to the City and seats on the boards of banks and insurers, he was an architect of Margaret Thatcher’s privatisation programme and the sale of 22 state-owned companies.
Grimstone is promoting an international trade conference that will take place on 19 ottobre. As a showcase for Liz Truss’s plans to make the best of Brexit and kickstart “global Britain”, it will rank as an important moment.
Yet the success of foreign-owned firms prompts the question, why has the British management culture remained second class?
Forty years of privatisations and an open door to foreign competition was supposed to improve the situation, forcing managers to adopt new processes and systems to achieve better outcomes, yet investors tend to back the foreign bidder over the domestic management team.
And why, when the UK is no longer part of the EU single market and customs union, will foreign firms want to invest other than to sell UK consumers stuff that could and should be developed and made by UK businesses.
Rather than take the easy route and simply invite foreign businesses to take over UK plc, enticing them with tax breaks and subsidies, the government should make the effort to support and encourage homegrown firms.
Not so long ago the business minister, Kwasi Kwarteng, scrapped the Industrial Strategy Council. As yet there is no replacement.
It cannot make sense for ministers to devote time and effort to attracting foreign investment and put support for UK firms on the back burner.
Sub-prime lender Amigo Loans won’t give up. Buried under a skip load of complaints and mounting debts, there was every expectation it would file for bankruptcy. When the financial regulator declared its previous rescue plan unacceptable e il courts agreed, there seemed no way back.
Yet the chief executive, Gary Jennison, remains confident a fresh scheme to settle tens of thousands of mis-selling claims is possible even after Amigo reported pre-tax losses of £284m in the year to March – up from £38.8m in the previous year.
Certainly the last scheme was a dud. It offered as little as 5% per 10% of any successful claim, limited the compensation pot to just £35m and 15% of any profits over the next four years. If the turnaround saved the firm, directors were in line for seven-figure payouts.
It’s not clear the regulator, the Financial Conduct Authority, will block Jennison next time. In July it said a similar rescue package by the doorstep lender Provident Financial was unacceptable but would not be opposed in court for fear the business as a whole would go under.
Maybe it was influenced by Provident saying it would close down its 141-year-old doorstep operation and concentrate on other businesses whereas Amigo wants to get back to charging 49.9% interest to those desperate enough to pay such high charges.
There are many campaigners who believe the FCA should simply regulate the sub-prime sector out of existence.
But the regulator’s staff have a difficult task when society abdicates responsibility for those who fall on hard times, often through divorce, illness or unemployment. People facing short-term financial difficulties need access to funds. Without it they cannot afford to keep up rent payments or charges on other loans and their lives can fall apart.
Più di 1 million people took out loans with Amigo and it wasn’t for the fun of it. The question of Amigo’s survival is of concern to its directors and shareholders, but also society at large.