ALEX BRUMMER: After years of allowing public infrastructure to fall into foreign hands, Tory manifesto promising robust approach to deals

You don’t have to look very far to recognise how untrammelled free markets can undermine the broader public interest.

Overseas ownership of four out of Britain’s big six power companies has put control over the nation’s energy future in Paris, Madrid and Essen in Germany.

Thames Water has proved more adept at pumping money out of Britain than keeping our greatest river clean, and so on.

Refreshing: Theresa May is following the example of other Anglo-Saxon democracies, including the US and Canada, which carefully scrutinise foreign bidders

How refreshing then, after years of allowing public infrastructure to fall into foreign hands, that the Tory manifesto is promising a robust approach to deals in the defence, telecoms and energy sectors.

It is never too late to bolt the stable door, and in doing so Theresa May is following the example of other Anglo-Saxon democracies, including the US and Canada, which carefully scrutinise foreign bidders.

It would have been nice if the Tories had also included technology on its list of sectors to protect. In recent times we have seen far too many high-tech firms bought by overseas giants mainly interested in stripping them of intellectual property.

The Tories also are fed up with seeing capitalism betrayed by louche behaviour in the boardroom. It is just as well that Tata Steel this week reached an outline agreement with pension funds trustees at British Steel (which it owns) because, in future, restructurings aimed at escaping obligations to retirees will no longer be tolerated.

We already have seen this year that moral suasion can have a significant impact on reining in fat cat pay in the boardroom, as also demonstrated this week by the 40pc pay cut for Bob Dudley at BP.

May is going one step further by requiring annual votes on executive pay and better, simpler bonus schemes layered on top of each other like a club sandwich. Companies will have to publish the ratio of boardroom pay to that of the broader workforce.

In 1998 the ratio was 47 to one, and by 2015 reached 128 to one, adding to the huge divisions in society. The embarrassing pay of the fat cats, notably WPP’s Sir Martin Sorrell, will be even more obvious.

Just as the UK is heading for the exit from the EU, Mrs May is ready to adopt Continental practices in the boardrooms with the addition of workforce representation.

Such input is essential as we move towards a smarter, more digital and robot-friendly economy requiring great changes in the skills of the traditional workforce.

Companies such as John Lewis and Unipart have led the way and shown it can contribute to productivity and returns.

One expects screams of anguish from free market advocates about a betrayal of Thatcherism. Such values have delivered prosperity, but it is now time to have a rebalancing which curtails avarice and unscrupulous behaviours.

Never, never

Much analysis of manifestos is focused on costing the pledges and fake anger about the expense.

Buried in the Tory manifesto is the unexpected promise to balance the budget by midway through the next decade. With each successive Tory budget there has been slippage on when the great day would arrive.

In the March Budget, ‘Spreadsheet Phil’ Hammond forecast borrowing would fall to 0.7pc of total output in 2021-22. The latest target will represent the longest period of deficit financing for the UK since the Napoleonic wars in the early 19th century.

The UK will have been living beyond its means for a quarter of a century.

After the post-financial crisis monetary splurge the International Monetary Fund has become an advocate of fiscal policy taking the strain.

So much for austerity.

Dirty washing

Berendsen is not the kind of company that captures the imagination. Laundry services are not that exciting.

But it has become a kind of cleaner Britain champion with its expansion across Europe. Unfortunately, the company’s antiquated British operations let it down despite a £450m capital injection designed to scrub brighter.

A French predator, Elis, has swooped in with an opportunistic, second time around, low-ball bid worth £2bn. This is not the kind of strategic bid which will have ministers reaching for new powers.

But the board, headed by former Tate & Lyle boss Iain Ferguson, and long-term investors including M&G are putting up a rugged defence.

Who needs the PM?

Comments are closed.