This week saw Pfizer launch a new bid for AstraZeneca, and along with it a scramble of politicians from all sides airing their protestations over the ignominy of having a cheeky foreigner interested in our assets.
Here are 8 reasons why the protectionism of our senior politicians is wrong:
- Both AstraZeneca and Pfizer are privately owned, by you, me and our pension funds. Why should a politician decide whether or not we can sell our company to another, any more than they can stop you selling your car and buying a new one.
- Government intervention in business transactions is often disastrous. Politicians are interested in being re-elected above all else. Is that a sensible basis for a fair and independent assessment of the merits of a takeover.
- Governments, quangos and the press all may have their views on a takeover, but they don’t own the company, and nor should they. I may not like the house you are buying but it doesn’t give me the right to stop it.
- Capitalism is about creative destruction. The market and the performance of companies dictates who wins, and therefore grows, and who loses, and therefore fails. Companies often make mistakes, but the government makes far more. When a company makes a mistake it suffers the consequences and shrinks, exactly as it should be.
- Britain has many great, world-beating companies, from oil and gas, to financial services, to consumer goods. Whether those companies are foreign owned or British owned matters not a jot. They employ people here, pay taxes here and create intellectual capital here. Would you rather a British owned British Leyland or a Indian owned Jaguar Land-Rover.
- Companies exist to make a profit. In doing so they create jobs and improve the lives of their employees and customers. Politicians exist to get re-elected. Never mind the long-term consequences.
- There is no consistent evidence that foreign owned companies reduce employment in the UK. In fact many studies have shown that the most aggressive offshorers of jobs are British owned companies
- Protectionism doesn’t work. Do we really want to go the way of France, or maybe Zimbabwe or Cuba.
The Conservative party have tried again to out-labour the Labour party. When Milliband cried foul over Pfizer it was the perfect chance for Cameron and Osborne to highlight Labour’s hypocracy and to stand up for free trade.
Instead George Osborne engages in talk of “public interest” and Cameron discusses “getting assurances”, and even of setting up a new quango to evaluate takeovers. Why should a quango be any better at deciding which takeovers have merit – and more importantly what gives them the right to interfere between a seller and a buyer.
Osborne remains as disconnected from traditional conservative values as ever. His socialist roots spread deep, and for the sake of Great Britain he must go.
What do you think of the Conservative’s stance? Should government play any role in determining who owns companies? Leave your comments below.