In a supposedly good news article entitled ‘European investment bucks Brexit’, The Telegraph revealed today that all is well with our long-term economic prospects because European investment in Britain has doubled over the past three years. In the past year alone, EU buyers ‘snapped up 533 UK assets through mergers and acquisitions’ including ‘companies, property and stakes in fast-growing firms’ totalling £23 billion. The weaker pound and the relatively poor performance of UK stocks, because of Brexit, have contributed to making UK assets cheaper to foreign buyers. Apparently, the sale of The Gherkin is only one of, ‘some very large assets acquired by overseas investors taking the long view’.
When you sell off your assets, aren’t you storing up trouble for the future? Foreign investment can benefit the host country when it takes the form of new plant, capacity and skills, as when Nissan invested in Sunderland – although we should bear in mind that the cost of the financial sweeteners is born by the rest of the economy. But when existing assets are bought up, we are simply trading a short-term capital gain for all the profits, rents and dividends that will henceforth flow out of the country. In the case of our fastest growing firms, particularly those in high-tech sectors, the situation is even worse, because we are handing to our competitors the know-how on which our future prosperity depends. The casualty list grows ever-larger. No wonder that our balance of payments is continuing to deteriorate, with the run-down of our net assets and consequent outflow of profits, rents and dividends proving a major factor.
Too many Brexiteers of the ‘Global Britain’ variety associate economic prosperity with the capacity of their friends and associates in the City of London to make a fast buck. What is the point in regaining our sovereignty if are to become a giant overseas asset? For most advanced industrial countries, the bedrock of their prosperity has been, not the success of foreign-owned multinationals and financial traders, but the growth of their domestic industries, suitably protected and cossetted, and a consequent virtuous circle of high domestic investment and high productivity.
So, what happens once we have flogged off all our assets – once we have flogged off every business, airport, football club, power station and housing estate? The Chinese are busy buying up new property developments before they are even built. What do we sell then? The National Gallery? The royal palaces? Our armed forces? The National Trust? The Houses of Parliament? The BBC? Now we are talking