If anyone doubted that the Prime Minister was happy in the cloak of economic liberalism handed down by Alderman Roberts, they need only read his interchange with Nick Clegg in the Commons yesterday. When Nick taxed him with the nationalised RBS providing a large proportion of the debt finance enabling Kraft to take over Cadbury, and thus contributing to job losses in the Midlands, he replied:
"If the right hon. Gentleman is really suggesting that the Government can step in and avoid any takeover that is taking place in this country overnight, and then tell a bank that it has got to deprive a particular company of money by Government dictate, his liberal principles seem to have gone to the wall."
The UK's liberality is a one-way street, though, as James Moore, the Independent's deputy business editor, pointed out in a scathing analysis in yesterday's paper. Only in Britain could an already debt-laden foreign corporation get away with buying a profitable native company. He writes:
"Nearly every company in the FTSE 100 effectively has a 'for sale' sign hanging above its headquarters. That's the way the City of London likes it. Almost as soon as a bid is tabled, the debate in the Square Mile focuses not on whether it's any good, but on how much the target can wring out of its suitor"
It's a different story in the US, home of Reaganomics and the Chicago school, where takeovers of transport firms and the Nasdaq exchange have been blocked by Congress, and where there is a law against airlines passing into foreign ownership. Even in the EU, the French "went so far as to declare yogurt a strategic national asset when the predators came a-calling on Danone".
Brown should be consistent. If he really believed that markets should be allowed to work without interference from government, he should have left HBOS and RBS banks to stand or fall in the market, rather than bale them out with (borrowed) government money.
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