In the first of a new series of debates on competing in the global economy, The Royal Academy of Engineering this week discussed the motion that: ‘This House believes that the advantages of foreign ownership of the UK corporate sector outweigh the disadvantages’.
The UK’s economic policy has long been predicated on the view that openness is critical for attracting international companies, investment and talent. But some argue that this has gone too far and that the UK’s competitiveness has been compromised by this ‘laissez-faire’ approach.
This debate tackled questions such as: Is it a cause for celebration or concern that more than 40% of the UK stock market is controlled by overseas investors? What does foreign ownership mean in the context of globalised markets and what is the evidence that it matters? Can foreign ownership be disentangled from foreign politics? Is there a case for bringing back a public interest test for takeovers? And does it matter if the UK loses capability in some sectors through the export of work to other locations by global companies?
Chaired by Professor Sir William Wakeham KB FREng, the panel consisted of:
For: Professor Colin Mayer, Peter Moores Dean, Saïd Business School, University of Oxford
Professor Richard Parry-Jones CBE FREng, formerly Group Vice President, Ford Motor Company
Against: Sir Alan Rudge CBE FREng FRS, Chairman, ERA Foundation Ltd
Dr David Clark, Principal Fellow, Warwick Manufacturing Group
Proposing the motion, Professor Colin Mayer, Peter Moores Dean of the Saïd Business School in Oxford, said: “Foreign direct investment in the UK is critical to its prosperity. It has provided management, long-term finance and stability of control of companies that are otherwise deficient in the UK. Erecting barriers to their inflow will jeopardize the future of UK industry.”
In response Sir Alan Rudge, Chairman of the ERA Foundation, said: “One does not have to exaggerate the current trend to see that the UK is well on the way to owning virtually none of its key assets and being dominated by absentee landlords with their own national agendas. If that is acceptable then we need take no action.It will happen.
“If not, then we need to face up to an issue which is more than economics… it is a threat to our national identity. While indulging ourselves in reminiscing the Battle of Britain and World War 2, perhaps we should consider what they fought and died for, and what is at stake in the economic trade wars of the present day.”
Two Academy Fellows appeared on Radio 4’s Today programme on Thursday 7 October at 6.52am. To listen again go to www.bbc.co.uk/iplayer/b006qj9z/console and scroll to 0.52.00
Notes for editors
The debate took place on 6 October 2010 at the Royal Academy of Engineering.
In this new series of debates, The Royal Academy of Engineering will explore some of the fundamental challenges facing the UK as it strives to compete in a turbulent global economy. The series will bring together engineers, industry leaders, economists and policy makers to test through debate the validity of a range of policies at the heart of UK competitiveness.
The second debate in the series will take place on 18 November and will address the motion: This House believes that a manufacturing sector accounting for at least 20% of GDP will provide the only basis for more balanced growth of the UK economy.
Founded in 1976, The Royal Academy of Engineering promotes the engineering and technological welfare of the country. Our fellowship – comprising the UK’s most eminent engineers – provides the leadership and expertise for our activities, which focus on the relationships between engineering, technology, and the quality of life. As a national academy, we provide independent and impartial advice to Government; work to secure the next generation of engineers; and provide a voice for Britain’s engineering community.
For more information please contact
Jane Sutton at The Royal Academy of Engineering
Tel. 020 7766 0636; email: Jane Sutton