Martin Flanagan: Roll up, roll up – UK plc for sale

Lord Myners has said that takeover rules should be made tougher to prevent Britain's biggest companies from falling into foreign hands. Picture: Stefan Rousseau/PA Wire

Lord Myners has said that takeover rules should be made tougher to prevent Britain's biggest companies from falling into foreign hands. Picture: Stefan Rousseau/PA Wire

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Former Treasury minister Lord Myners is articulating an open secret that UK companies for a long time have been far more vulnerable to foreign takeovers than their overseas counterparts.

This was partly due to the UK privatisation phenomenon of the 1980s and early 1990s, when unshackled former state entities like water, electricity, rail and airports were left to fend for themselves amid ­market forces. Nuclear followed.

• READ MORE: UK businesses remain takeover targets

Contributing to this, both literally and in terms of zeitgeist, was the Big Bang in 1986, when the rules of ownership of UK brokers and investment banks were relaxed.

When UK bankers could see their very own firms being snapped up by new ­owners from abroad, why would they not spearhead foreign takeovers in other UK industries in return for fat fees?

Myners says correctly that many ­takeovers are spurred by the drive for gold from our finance industry, and that sometimes it resembles a slightly seedy “garage sale”. Myners wants a tightening up of City takeover rules to help protect UK ­companies; Unilever, which has just ­fended off Kraft Heinz of the US, wants “national champions” protected.

At the very least, some sort of public interest clause in major UK takeovers might be appropriate.

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A new report from the CBI employers’ body calls for a UK government commitment to spend 3 per cent of GDP on R&D by 2025. R&D spend currently stands at 1.7 per cent of GDP, well adrift of many ­international rivals.

However, although the new target is a joint one to be shouldered by both the ­private sector and the government, it looks ambitious against the backdrop of the public deficit, when there is not even a ­pretence any more that it will be paid off by 2020 given post-Brexit uncertainty.

Still, if a worthy target is not set, ­nothing will be achieved anyway.

So let’s hope Chancellor Philip ­Hammond pays it some mind in his autumn Budget this year (that’s if he ­survives any summer ­reshuffle by ­Theresa May after the fiasco over the National Insurance contribution rises for the self-employed in the recent Budget).

Powered-up innovation is a long-term lifeblood for employment and general prosperity throughout the UK – we should not set our sights low.

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