Putting things into perspective

Surely long term, a high level of overseas ownership cannot be beneficial to the UK economy

To put the comments of D G Nicholas (letters PE December 2010) regarding the sell-off of British assets further into perspective; the total value of such assets sold to overseas buyers in the last 10 years amounts to £700 billion. In large measure these sales have offset the enormous balance of trade deficit and created the illusion of a prosperous economy. The process has been cheered along by the bankers, lawyers and accountants that have derived huge fees as a consequence.

Many of the companies have been sold at below their true value as the financial community fails to appreciate the value of the intellectual property and of the international market positions that have been developed over very many years. Such value is readily recognised by the overseas acquirers.  The short-termism exhibited by the City, where most decisions are driven by the anticipated next quarter’s earnings has been enormously damaging.

It has to be recognised that on the microeconomic level many of the acquisitions have proved highly successful with a much higher propensity to invest both in training and in modern production plant and machinery than that shown by the previous UK owners. This trend is well illustrated by the finalists this year in the UK Manufacturing Excellence Awards where around 50% were foreign owned in comparison with about 10% some five years ago.

It is on the macroeconomic level that concern has justifiably to be expressed. There are estimates that of all manufacturing operations in the UK employing over 250 people, around 70% are now in foreign ownership. Surely long term, such a high level of overseas ownership cannot be beneficial to the UK economy.

Christopher Simpson, St Albans