As individuals, corporations and finance have detached themselves from their home countries and gone offshore and global, progressive nations must now play the trump card of their own sovereignty and disengage themselves from the offshore world that drives on global capitalism so perilously.

Governments of progressive nations should leave offshore tax havens and their clients to their own devices, and instead boldly declare that they will refuse to have on their soil any corporation, individual, financial entity or transaction that has an offshore connection through which profits (as well as toxic, hidden losses) are funnelled away to third party jurisdictions.

Onshore you're in, offshore you're out, simple as that.

And let us subject every company and individual to the onshore test: a rigorous due diligence investigation to make sure that there is absolutely no offshore tax haven link to any company or person that wishes to use the onshore nation as place to do business in.

Those that pass the onshore test will then be welcomed to join in and establish the new order ...

Guardian  28 Dec 2010    Barriers Log    Coalition Log

Coalition seems to be in dreamland with its plans for pension funds

First, a bit of perspective.

These are the same pension funds that have routinely sold Britain's existing infrastructure to the highest – usually foreign – bidder.

Our power stations? Gone to France's EDF and Germany's RWE.

Our ports? To Dubai and a bidder led by Goldman Sachs' infrastructure fund.

Heathrow airport? Sold to a Spanish construction company.

When the Channel Tunnel Rail Link, costing £5.7bn to build, was sold a year ago for a knockdown £2.1bn, did UK pension funds stump up?

No, they were outbid by their Canadian cousins.

So, ask yourself this: if pension funds don't want to own infrastructure that's right in front of them, with an existing revenue stream, why would they want to invest in a green field? ...

Tel  28 Nov 2011    Autumn Statement    Coalition Log

George Osborne pledges £6bn for infrastructure projects

Rail is Japan's newest export foothold in the UK

In 1925 Seiji Miita, then general manager of the Hitachi rail factory in Kudamatsu City, travelled to Britain to study "advanced train technology" to take back to Japan ...

Nine decades on, Miita's fact-finding mission has helped create one of Japan's newest export footholds in the UK.

A consortium led by Hitachi has been selected by the government to build the sequel to the Intercity 125 fleet – bullet-trains for Betjeman fans – ahead of European rivals including Derby-based Bombardier in a project worth £4.5bn ...

Gdn  19 Oct 2011    A free market train wreck    Full Employment?

A Faustian Pact 4

China eyes shale gas and uranium firms

China's growing attempts to seize global natural resources has reached Britain with a link to the recent shale discoveries near Blackpool and a bid for a London-listed uranium company.

Close ties have emerged between China National Offshore Oil Corporation (CNOOC) and a backer of Cuadrilla Resources, the exploration group that claimed last month there were trillions of cubic metres of shale gas under Lancashire.

The Beijing-to-Blackpool link was revealed after the Hong Kong-based Kerogen Capital came to the rescue of one of the largest shareholders in Cuadrilla.

Kerogen and CNOOC are behind a new $1.5bn (£1bn) fund, which is looking at investing in new resource projects.

Kerogen, set up by former JP Morgan bankers Ivor Orchard and Jason Cheng, has taken a 15% stake in AJ Lucas – an Australian engineering business that holds about 40% of Cuadrilla.

Lucas has been struggling to raise new cash and needed to inject $10m in Cuadrilla to maintain its stake in a business that is also 40% owned by Riverstone – a private equity firm in which former BP boss, Lord Browne, is a key player.

Chinese companies have already bought into shale gas companies in the US, where a welter of discoveries has sent the price of natural gas plummeting.

Cuadrilla made headlines when it claimed that two exploratory wells in the Bowland shale of Lancashire indicated huge reserves of 5.6tn cubic metres of shale gas ...

Gdn  09 Oct 2011    China    Energy Policy    Shale Gas

Bombardier announces 1,400 job losses in Derby

Train maker Bombardier, which recently missed out on the £1.4bn Thameslink contract, has said it plans to cut more than 1,400 jobs at its Derby plant.

Last month, the company lost out to German group Siemens as the preferred bidder to build 1,200 carriages for the route between Bedford and Brighton ...

The UK subsidiary of Canada's Bombardier said that there was not enough future work to keep its Derby facility, which employs 3,000 people, operating at current levels.

It plans to cut 446 permanent jobs and 983 temporary contract staff, and has launched a 90-day consultation process.

The company said that by the end of September, it would have completed work on two major contracts and would only have work remaining on one more.

"The culmination and successful delivery of these projects and the loss of the Thameslink contract, which would have secured workload at this site, means that it is inevitable that we must adjust capacity in line with economic reality," said Francis Paonessa, president of the passengers division for Bombardier in the UK.

BBC NEWS  05 July 2011    Barriers ... Economy Log    IDS & the Third Face of Power

Derby’s demise another step in U.K.’s fall from industrialized ranks

Job Losses at Bombardier

Graduate gloom as 83 apply for every vacancy

'About Wall Street jobs, wealth, and the cultural distortion of America'

Bombardier train factory at risk after £3bn Thameslink deal goes overseas

Are welfare costs taken into account in making a decision such as this, Dave?

The future of Britain's last remaining train factory was thrown into doubt on Thursday after the government named an overseas consortium as the preferred bidder for a £3bn contract to make carriages for the upgraded Thameslink route.

The decision to sideline Bombardier Transportation's factory in Derby in favour of a group led by Siemens means one of Britain's largest train orders is likely to be made in Germany at a time when Britain desperately needs to boost its own manufacturing ...

Transport minister Theresa Villiers acknowledged that "there will be disappointment in Derby" but insisted that the Siemens bid represented "the best value for money for taxpayers" ...

She said that the Thameslink contract would create up to 2,000 jobs in Britain – about 600 to make train components, about 650 to build two new maintenance depots and about 750 to maintain the trains and operate the depots.

However, it is estimated about 1,500 staff will be needed to build the trains and they will be based in Germany.

Bombardier, which employs about 3,000 people in Derby, is understood to be reviewing its entire UK strategy in the wake of its failure to become preferred bidder, which sources said could potentially lead the Canadian company to significantly slim down its UK operation ...

Gdn  16 June 2011    Coalition Log    A free market train wreck

Kraft refuses to rule out further UK job losses

... the committee again questioned why Kraft had announced in February 2010 the closure of Cadbury's Somerdale factory in south-west England, with the loss of 400 jobs.

This was despite making overtures during the four-month takeover battle that it believed it could keep the facility open instead of moving production to Poland, a process that Cadbury had initially set in motion.

At the previous business select committee hearing, Cadbury had given assurances it would not make any more manufacturing cuts in the UK for two years, but yesterday declined to extend the promise beyond May 2012 ...

Independent  16 Mar 2011

Foreign state railways line up to bid for UK west coast franchise

Germany's Deutsche Bahn, Spain's Renfe, Abellio of the Netherlands and Trenitalia are among the companies weighing up bids for the franchise, which will start in 2012 and run until 2026, when the government hopes to open the first phase of its proposed £17bn north-south high speed rail line.

DB, Renfe and Abellio attended a recent Department for Transport seminar on the west coast franchise while Trenitalia has already expressed an interest in bidding as part of a joint venture with France's Veolia.

A government source said: "This shows that Britain is open for business. It is no surprise that high-quality bidders are interested in such a prestigious franchise."

The franchise's recent financial performance is also expected to lure bidders from the private sector. Virgin Trains, a joint venture between Sir Richard Branson's Virgin empire and Stagecoach, posted a pre-tax profit of £76.4m in 2009 and gave its shareholders a dividend of £67.3m last year.

The line now carries 28 million passengers per year, having shaken off its reputation for constant delays during the £9bn overhaul of the route. Virgin is likely to fight vigorously to win the new franchise ...

Observer  06 Feb 2011

Pfizer to close factory with loss of 2,400 jobs

The government's plans to rebuild the economy around key hi-tech industries suffered a blow after the drugs maker Pfizer closed its only research and development facility in the UK .

The factory in Sandwich, which developed the impotence drug Viagra, will close with the loss of 2,400 jobs, leaving an area of deprivation on the Kent coast with few remaining private sector jobs ...

Cameron named the pharmaceutical industry in his speech as a cornerstone of the government's growth strategy along with tourism, green energy, advanced manufacturing and aerospace ...

Guardian  01 Feb 2011

A 'new model of sustainable growth'

Cameron promises budget for growth

Why we should nationalise our airports

The failure of BAA to deal with recent snowfalls has exposed the price we pay for having our infrastructure in private ownership ...

Even before this week's events, our privatised airports, with their shortage of public seating, their lack of reasonably priced food and drink outlets, and their depressing, unfriendly atmosphere, were an international disgrace.

But their spectacular failure to adequately deal with recent snowfalls has surely exposed to all but the most fanatical free marketeers, the enormous price we pay for having our infrastructure in private ownership.

Writing in the Guardian in 2007, the designer Sir Terence Conran told a story that illustrates perfectly the difference between the ethos of a publicly owned infrastructure company and a privately owned one.

Conran revealed that when he was working on the design of the state-owned Heathrow Terminal 1 and the North Terminal of Gatwick airport in the 1960s, he was pressed to make sure that he provided "lots of seating" for the public.

Conran contrasted the concern the state-owned airports authority in the 1960s showed for the comfort of the travelling public, to the much more commercial attitude of BAA today, where "every square inch must be turned over to retail space".

Unlike its state-owned predecessor, the privately owned BAA is seemingly guided by just one concern: maximising profits for its Spanish-owned parent company, Ferrovial ...

Guardian  21 Dec 2010    Corporate Public 'Services'    Corporate Sociopathy

Airport chaos shows what happens when you privatise monopolies

Foreign money bids for Britain's banknote printer De La Rue

There are two sides to this story.

In the Square Mile, investors are angry that De La Rue dismissed the French approach so lightly, denying them the possibility of making a profit on a poorly performing investment.

But politicians and trade unionists fear Britain is committing corporate hara-kiri by selling so many of its companies to foreign rivals.

Remember Cadbury, BAA, P&O, Abbey National, Corus and Scottish & Newcastle, all of which have fallen to overseas competitors in recent years?

Critics say such a liberal takeover regime makes UK firms sitting ducks for overseas predators, many based in countries that would not allow British companies the same right of entry ...

Observer  12 Dec 2010    

Moving Cadbury HQ to Switzerland could save Kraft millions in UK tax

The Kraft restructuring plan involves inserting a Swiss holding company above Cadbury's UK operations.

The UK offshoots will then effectively become sales and manufacturing service businesses paid commissions by the parent.

The British subsidiaries will almost certainly employ roughly the same number of people as under the old structure.

However, as key staff are being relocated to Switzerland, and the UK companies will technically no longer own the raw materials or products they make and sell, much of the tax liability will be transferred to Zurich ...

Richard Murphy, a director at Tax Research UK, said:

"We have seen this kind of structure before with [crisp company] Walkers where, after being acquired, the UK operation is moved to a Swiss holding company.

"The advantages are twofold. First, if you actually locate the management in Switzerland, you'll have an argument with the Revenue but you can move profit from the UK and save tax.

"Second, as the brand is vital to profits, you can also transfer that value out of the UK to Switzerland. The UK company will then pay royalties to use the brand, which is also tax deductible." ...

Guardian  03 Dec 2010    Tax Dodgers    

British dairy industry becoming unsustainable, warns farmers' union

• UK could become reliant on expensive dairy imports, says NFU
• Disquiet over direct deals between retailers and a few farmers ...

About 3,000 out of the UK's 13,500 dairy farmers have special deals with the likes of Sainsbury's and Tesco.

The relationships are judged to have been good news for farmers, but the cost of production, at 27.5p per litre, remains 3p higher than the average retail price of 24.5p.

"This means the majority of dairy farmers are losing money on every litre of milk they produce," said Kendall.

In England and Wales, 470 farmers quit the agricultural industry in the last year and the NFU calculates that if current production trends are married with expectations of rising demand, the UK could be importing 53% of its dairy products by 2030.

"Greater reliance on imports could mean higher food prices," said Kendall, adding that such a situation would make guarantees on food traceability much more difficult to offer.

The UK already imports about 33% of the butter, 50% of the cheese and 40% of the yoghurt it consumes ...

Observer  21 Nov 2010    Food Crunch    Rebalancing the Economy

Mission Milk

Farming

Northern Foods and Greencore to merge

Merged entity, to be known as Essenta, will supply about a third of all ready meals and sandwiches in UK supermarkets ...

The new company, to be called Essenta Foods, will generate sales of £1.7bn, be valued on the London stock market at about £500m, and employ 16,000 staff.

Essenta's headquarters will be in Dublin, providing a boost for debt-laden Ireland, which is close to agreeing an emergency bailout following a loss of confidence by international investors.

Eoin Tonge, Greencore's group capital markets director, said the deal showed Ireland was still a good place for business with a corporation tax rate of 12% against Britain's 28%.

Northern Foods' manufacturing operations in Ireland will be able to pay corporation tax at the lower rate, although most of its business is based in the UK, where British tax rates will continue to apply.

But Tonge said that, as the new group expanded, new Irish factories could come on stream, attracting lower tax and providing additional employment:

"Far from fleeing Ireland, this transaction shows companies are more than happy to do business here." ...

Guardian  17 Nov 2010    'Standortkonkurrenz'

Channel Tunnel rail link sale begins UK's big sell off

The great austerity auction of state-owned assets has commenced after a pair of Canadian pension funds splashed out £2.1bn to acquire High Speed One ...

High Speed One was put on the block in June and was seen as one of the most attractive assets likely to be sold by the Coalition as it seeks to reduce Britain's national debt of £952bn.

Other assets earmarked for potential privatisation are the Dartford Crossing, the Tote, the state's 49pc holding in National Air Traffic Services – to which the Government has appointed Bank of America Merrill Lynch to advise on its strategic options – and Royal Mail ...

Telegraph  05 Nov 2010    

Bank of America

Building societies: American private equity group plans UK 'supermutual'

JC Flowers focuses on four mutuals – with more than 1.7 million members – for consolidation in 'fragmented industry' ...

West Bromwich, Skipton, Norwich & Peterborough and Principality are in his sights; together, they have more than 1.7 million members.

Former Goldman Sachs banker Christopher Flowers, who founded the US private equity firm, is already acquiring a 40% stake in Kent Reliant, which has a membership of 180,000.

Kent would be a platform for further UK expansion ...

Observer  24 Oct 2010    

United Biscuits in talks over £2bn offer from Chinese firm

For bloggers like JohnBloom it's okay strip the UK of its jobs in search of Pareto efficiencies.

United Biscuits, the company behind KP Nuts, Twiglets and Jaffa Cakes, faces a £2bn Chinese takeover in a move that could spark a political storm.

China's leading consumer group, Bright Food, has emerged as one of the frontrunners to acquire UB, which is being sold by its private equity owners Blackstone and PAI.

A takeover would attract attention from politicians worried about the increasing number of British companies falling under foreign control ...

Based in Hayes, west London, UB employs 7,000 people in Britain at 11 factories.

Gerry Murphy, former boss of Kingfisher, owner of B&Q, has recently been appointed to the UB board.

If Bright Food clinches a deal, it would mark the first time a Chinese company has taken outright control of a major European food company.

UB's brands also include Jacob's Cream Crackers, McVitie's biscuits, Penguin and Hula Hoops.

Chinese companies are eager to acquire products for the country's burgeoning middle class, as well as gain exposure to western marketing techniques and technological know-how ...

JohnBloom
27 September 2010 3:44AM

I wonder if people will eventually make the connection. If we buy most of our electronic goods and equipment from China, then sooner or later the surplus has to be reinvested. For a long time it was reinvested in Western consumer debt.

Who do you think were "the investors" buying securitised UK mortgages and consumer debt from 2001 to 2007? It makes more sense for the Chinese to buy productive businesses rather than unproductive credit card debt.

My view is we need to accept that China is now an economic power just as we did with the US last century. Did anyone refuse to buy cars made by Vauxhall just because General Motors owned it from 1925?

And quite frankly, a Chinese food producer is probably a better long term investor than the US private equity funds who currently own UB.

The latter sell on after 3 years to provide a return to their investor base.

Guardian  26 Sept 2010    

Mergers and acquisitions

Santander set to win battle for high-street domination

• RBS's sell-off of 318 branches to take place within 24 hours
• Acquisition will see Santander overtake HSBC
• Spanish bank expected to drop Williams & Glyn's brand ...

Guardian  02 Aug 2010    Banking Commission    Fractional Reserve Banking

Takeover code tweaks won't affect corporate behaviour

Mergers and Acquisitions

Hong Kong tycoon buys up UK electricity networks

Hong Kong's business “Superman” Li Ka-Shing is paying £5.8bn for energy giant EDF’s 100,000 miles of the UK’s electricity network.

The ... Asian billionaire first approached EDF in March, beating off a range of competitors including the National Grid, the Abu Dhabi Investment Authority and several Canadian pension funds for the UK network group, which includes cables and substations supplying around eight million households and employing nearly 5,000 people.

The "irrevocable offer" from Mr Li's consortium ... remains open until 24 October.

According to EDF, the offer constitutes a 27 per cent premium to the regulated asset value for the regulated electricity networks, and a multiple of 8.1 times 2010 earnings estimates for the total business.

The French group aims to present the plans for commercial cooperation with the Cheung Kong consortium in the UK to its European Works Council in early September, before going to the board for a final decision.

If the deal goes ahead, the consortium will take control of three regional electricity networks covering London, the South-east and the East of England, providing nearly a quarter of all electrical power in the UK.

Alongside the regulated assets, the deal also covers EDF's non-regulated business, which has commercial contracts to deliver electricity to private sites ...

Independent  31 July 2010

Vince Cable bids to overhaul City takeover regime

Sold: a decade of UK infastructure assets changing hands

OFT launches stock-take into UK economic assets

International Power talks to test coalition stance on foreign takeovers

It's called 'giving away the family silver', Mrs T.

• Shares jump 10% on news of talks with France's GDF Suez
• International Power has six plants in UK
• Possible foreign takeover follows outcry over Kraft-Cadbury

A takeover by the French group would test the new coalition government's attitude to the takeover of British companies by foreign rivals following the public outcry over Kraft's swoop on Cadbury this year.

It also poses questions about the security of the UK's energy supplies as GDF is 35% owned by the French government.

International Power's plants would be the latest in a string of British infrastructure assets to enter foreign hands.

The Office of Fair Trading announced in May that it was launching a comprehensive stock-take of the country's economic infrastructure, to investigate whether consumers are being ripped off as many of these businesses have changed owner in the past decade.

Many utility companies are now owned by foreign groups. Few of the UK's household energy suppliers – Centrica and Scottish and Southern Energy – remain in British ownership, just over a decade after the market was opened up to full competition.

Almost half of all UK-listed companies targeted in takeover bids in the past two years have been bought by overseas buyers, reigniting the debate over foreign ownership of British firms.

Two years ago, for instance, French energy giant EDF agreed to buy nuclear power station operator British Energy in a £12.4bn deal ...

Guardian  19 July 2010

Hong Kong tycoon buys up UK electricity networks

Jewels of British industry at risk of falling into American hands

When do we join NAFTA?

American companies are preparing to launch daring takeover bids for a host of Britain's biggest corporate names – including BAE Systems and AstraZeneca – thanks to the weakness of the pound against the dollar.

Sterling has lost about a quarter of its value against the dollar in the last two-and-a-half years, and combined with the feeble recovery in the UK economy, British firms have become much cheaper for American suitors looking for a good deal.

Following the controversial takeover of Cadbury earlier this year by the US food giant Kraft, and the buyout of Gatwick Airport by an American private equity firm, analysts at Standard & Poor's predicted last week that a number of well-known UK companies, including AstraZeneca, BAE Systems and the contractor Balfour Beatty, could soon fall into American hands ...

Highly priced deals are undoubtedly good news for UK shareholders, often pension funds, and for the executives of targeted companies, who can rely on a big bonus from their new bosses for oiling the takeover process.

But while the City, and the coalition and Labour governments have largely cheered on the deals, unions have warned that the impact on jobs is likely to be severe ...

Independent  03 July 2010

Tate & Lyle to sell sugar business for £211m

Tate & Lyle's historic sugars business was set to fall into US hands today after the firm agreed a £211 million sale.

The group is selling its European sugar refining business, which includes its Golden Syrup factory in London, to American Sugar Refining - and has given the US firm a perpetual worldwide licence to use the famous brand name.

Chief executive Javed Ahmed said: "Sugar refining has enjoyed a long and proud history within Tate & Lyle, but we believe the interests of this business and its employees are now best served by being part of a company for whom sugar refining is core."

Independent  01 July 2010    

FTSE 100: how London's leading share index lost touch with the rest of Britain

The disasters befalling BP, BA, Cadbury and the Pru might give the impression that British business had lost its way.

In reality, they, like so many in the FTSE 100, are now detached multinationals playing by their own rules ...

The FTSE 100 and many of the companies listed on it have evolved in line with a belief in the benefits of globalisation, a mania for ultra-liberal markets and an infatuation with mergers and acquisitions – a philosophy that has come in for sustained questioning in the financial crisis.

There can be no harking back to a mythical past: as a small island with an empire-building spirit and a powerful navy, the UK has always had what might politely be termed an international trading outlook. Only an extremist would argue for a John Bull index, if such a thing could be compiled.

Nonetheless, some commentators argue it is undesirable that our collective prosperity depends so heavily on investments that are so imperfectly understood.

Tony Manwaring, chief executive of thinktank Tomorrow's Company, says:

"There is a huge disconnect between business and society in the UK. British politics has failed to recognise the changing nature of business in the context of globalisation. We need to be asking on what basis pension funds invest our money in companies such as the Prudential and BP, and what are they doing to advance a stewardship agenda to deliver long-term value. We cannot go back to some mythical British past, but there is a huge deficit of understanding and discussion." ...

Britain's best-known share index now reflects the fact that this country acts as an offshore financial centre for brass-plate corporations. Whether that is desirable is open to debate. But when the Footsie flounders, it is pension fund members who thought their money was prudently placed who pay the price ...

Observer  06 June 2010

OFT launches stock-take into UK economic assets

The Office of Fair Trading is mounting a massive stock-take of the country's economic infrastructure, from energy and water companies to transport and communications assets, in order to investigate whether consumers are being ripped off as many of these businesses have changed hands in the past decade ...

Over the past decade a slew of British infrastructure assets have changed hands as buyout firms have looked to capitalise on the dependable revenues of many utility companies and many of the country's crucial services are now owned by foreign companies. For instance, only two of the UK's household energy suppliers – Centrica and Scottish and Southern Energy – remain in British ownership, just over a decade after the market was opened up to full competition.

Thames Water is owned by the Australian bank Macquarie, having previously belonged to RWE which owns npower; Powergen is owned by German energy group E.ON; the nuclear power company British Energy is part of the French group EDF; the airports operator BAA is owned by the Spanish infrastructure group Ferrovial; and Scottish Power is part of Spain's Iberdrola ...

Guardian  14 May 2010

Who owns Britain

Deutsche Bahn closes in on Arriva deal

Bus and rail operator Arriva is close to agreeing a 775p-a-share cash offer from Deutsche Bahn, the German state-backed rail operator that is expanding across Europe ahead of a possible flotation ...

Deutsche Bahn already operates the Chiltern rail franchise in the UK and owns freight train group EWS.

A deal would add Arriva's Wales and CrossCountry rail franchises, plus a clutch of bus services.

However, Arriva's chief attraction is its mainland European businesses spread over a dozen countries – providing footholds in Europe's liberalising transport market ...

Telegraph  20 Apr 2010

Arriva

Innocent smoothie denies sell-out after Coca-Cola gets majority stake

The founder of Innocent smoothies denied last night he had sold out to Coca Cola despite allowing the US multinational to swallow a 58% stake in the small and ethically-minded British business.

Richard Reed said the existing directors would continue to control Innocent and their goal of bringing healthy drinks to a global market could only be enhanced by a transaction estimated to be worth £75m.

"I genuinely believe that this is not a selling out but a continuation of our work. There will be no change in the commitment to natural healthy food, to sustainability and to giving 10% of our profits to charity.

"We remain in full operational control of the business and we should be able to proceed towards our goal of taking Innocent to every country in the world," he added.

Innocent, which markets itself as Europe's favourite smoothie company, is the latest in a long line of UK firms falling into the hands of foreign ownership but is also another example of a business set up with high-minded goals that has been taken over by a very large and conservatively-run predator.

Cadbury, which had caused adverse comment by buying up the Green and Black chocolate firm, was itself recently bought up by Kraft of America while Body Shop has been acquired by L'Oreal and Pret a Manger by McDonald's ...

Guardian  19 Apr 2010

'Cadbury's law' to be in Labour election manifesto

10 foreign takeovers of UK companies in the past decade

Small island for sale

I back foreign takeovers - Blair

It's one of the 'caveat emptor' moments, so familiar with 'globalised' politicians from both main parties.

The report reveals that this is a leak, not a firm commitment.

More imortantly, who defines 'strategic' - nuclear power stations did not come under any such category.

Labour's manifesto is understood to contain proposals to ensure that if a company is designated "strategic", or if the national interest is concerned, two-thirds of its shareholders will have to vote yes to a takeover.

Under the current law, a straight majority will suffice.

In addition, there will be rules to stop hedge funds buying up shares.

This is designed to stop speculators making a quick profit on a takeover. Under the proposals, only long-term investors will have a say in whether a company is sold.

The campaign for the so-called Cadbury's law has been led by the Unite union, but has gained popularity among those unhappy at the way in which the confectioner was bought out by Kraft.

Some observers felt Kraft should have paid more for Cadbury, and that short-term investors pushed through the deal.

The Liberal Demcrats have already called for such a law.

BBC NEWS  09 April 2010

MPs open fire on Kraft over plans to shut Cadbury factory

Kraft couldn't give a toss about it's reputation; it's in business to asset-strip Cadbury's, and for the likes of Lord Mandelson and his fellow corporate-grovellers to be complaining now is a classical example of the 'Third Face of Power' in action: pursue market fundamentalism below the radar, appear to be doing the opposite on the radar.

Report on takeover says the US food giant was either incompetent or cynical ...

Cadbury had earmarked the 75-year-old plant for closure in October 2007, which would have prompted production of Curly Wurlies, Fudge and Mini-Egg to move to Poland.

In its takeover proposal documents released in September, Kraft said it "would be in a position to continue to operate" the Keynsham facility.

Just a week after sealing the takeover, Kraft performed a startling U-turn at the cost of 400 jobs. Following meetings with Cadbury management, Irene Rosenfeld, the chairman and chief executive of Kraft Foods, said "it became clear that it is unrealistic to reverse the closure programme".

The move sparked outcry from the public and politicians.

The report said Kraft "has left itself open to the charge that either it was incompetent in its approach to the Somerdale factory or that it used a 'cynical ploy' to improve its public image during its takeover of Cadbury.

"Its actions have undoubtedly damaged its UK reputation and has soured its relationship with Cadbury employees," it added ...

Independent  07 April 2010    'Third Face of Power'

Kraft promises MPs: no job cuts in UK

Mandelson calls for tougher takeover rules

Brown warns Kraft on jobs

The sad lesson of Cadbury is the City still holds the whip

£2m a day cost of Cadbury deal – plus £12m for the boss

Russians prepare £1bn grab for UK fuel supplies

GAZPROM ... is expected to lodge an offer this week for a network of 800 petrol stations and the Lindsey oil refinery at Killingholme, Lincolnshire.

The assets have been put up for sale by Total, the French oil group. It has hired JP Morgan, the investment bank, to sell its UK business, which employs 5,000 people.

The business is expected to fetch more than £1 billion ...

The auction is part of a remarkable shake-up of Britain’s oil refining and distribution industry. Half of the refining capacity, built up in the 1960s and 1970s to take production from a booming North Sea, is up for sale as energy giants look to sever ties with the low-margin, low-growth British market ...

Times  28 March 2010

Kraft promises MPs: no job cuts in UK

Kraft made a humiliating public apology and vowed not to axe any UK manufacturing jobs for at least two years after it was accused by MPs of fighting dirty for control of Cadbury.

The pledge, which only covers 40% of the UK workforce of the enlarged business, was made by Kraft's executive vice-president, Marc Firestone, during a bruising two-hour appearance before the business select committee that left the American visibly shaken.

Not only verbal insults were levelled at Firestone during the hearing.

Lindsay Hoyle, Labour MP for Chorley, shook a Terry's Chocolate Orange at him as an example of Kraft's poor track record as a custodian of British companies.

He said the once was famous chocolate was now "made in the EU" and the York factory long gone.

Kraft made similar promises to Terry's of York only to move production to Poland, said Hoyle who added they did "exactly the same" to York as the Vikings: "They pillaged and asset-stripped that company."

Firestone said Terry's and Cadbury were two very different companies, adding the former "did not have the scale" to continue operating from its York base ...

Guardian  16 Mar 2010

Mergers and acquisitions

Mandelson calls for tougher takeover rules

•Raising the voting threshold needed to secure new ownership to two-thirds

•Lowering the requirement to disclose share ownership during a takeover bid from 1% to 0.5%

•Giving the bidding company less time to tie up a deal

•Forcing bidders to reveal how they intend to finance a takeover

•Requiring greater transparency on advisers' fees and incentives ...

BBC NEWS  01 Mar 2010

Kraft inquiry hits Takeover Panel succession

Takeover frenzy is leaving Branch Office Britain with an identity crisis

If there is one good thing to come out of Kraft's takeover of Cadbury, it is that the Takeover Panel is finally taking a look at a system that tilts the odds too far in favour of foreign predators.

UK companies are among the least equipped in the world to defend themselves against hostile takeovers, because our markets are so open, even in comparison with the US where companies often use poison pills and other bid-repellents.

Businesses here are also vulnerable because the process is easily manipulated by the bidder. The takeover timetable allows predators to place targets under siege for extended periods: Kraft went public with its interest in August, but the 60-day clock only started ticking in December.

Roger Carr, the former chairman of Cadbury, raised this and other issues including increasing the shareholder voting threshold from a simple majority to 60%, and the possibility of disenfranchising hedge funds and other short-term investors. The panel will look at this and publish a consultation paper.

It will take its time, and it is unlikely to come up with wholly satisfactory reforms: it is not within its remit, for instance, to delve into whether a bid is in the public interest, though I'm with Vince Cable in thinking that this important test should be restored ...

The UK has seen more foreign takeovers in the past six years than Japan or Germany, both of which are larger economies ...

Ownership matters, especially in a recession. Inflows dry up – new foreign direct investment in the UK fell by 90% last year – and existing spending can be savagely cut. Companies are likely to prioritise their home markets, leaving jobs and pensions in the UK at risk: Tata, for instance, is increasing steel production in India while mothballing its Redcar plant ...

The risk is that this country could dwindle into Branch Office Britain, and that the owners of assets will be remote and unaccountable ...

Guardian  28 Feb 2010

Russians prepare £1bn grab for UK fuel supplies

UK still good investment opportunity - Brown

As Cadbury and Corus Steel can confirm

Around 250 chief executives, entrepreneurs and academics are due to attend the Global Investment Conference, which will be addressed by Gordon Brown today.

The government will also launch a new "investors' charter' at the event, which is expected to include a pledge to consult large companies before making further changes to the tax or regulatory system ...

Lord Davies, the trade minister, argued that the UK had a good track record at attracting foreign investment.

"The UK has been hugely successful at attracting foreign direct investment ... There are over 75,000 foreign-owned companies in the UK and they account for around 40% of GDP," he said.

Guardian  22 Feb 2010

The blight of foreign owners

There was no more fervent forelock-doffer to the Thatcher 'transformation' of Britain to 'free' market goals than The Dacre.

Now that the downsides are emerging, The Dacre whinges constantly but to no effect. It's all 'sound and fury, signifying nothing'.

Like Brown and Mandelson - faced with the unpopularity of their neoliberal policies - they fret and fume and spin, but to no avail.

It's an exerecise in the third face of power: voters must get the impression that it's someone else' fault.

When the industrialist Ratan Tata won control of Corus, the Anglo-Dutch steelmaker in 2006, the deal was hailed by Labour as marking 'a new era of British-Indian relations based on equality of common interest'.

At a subsequent meeting of Gordon Brown's business council at the Treasury, Tata - then the proud owner of Corus and Jaguar Land Rover - was hailed as a business hero who extolled the virtues of open markets.

There was a basic flaw in his speech.

Whereas Britain, since the age of Thatcher, has allowed foreign enterprise to snap up UK assets, many British companies have found it extraordinarily difficult to break into the Indian market, particularly in finance, and have to operate with Indian partners and through joint ventures Britain's open-door policy has proved a very mixed blessing.

In the case of Jaguar Land Rover it was to the UK Government that Tata turned for help at the height of the 2008-09 recession. Now we find that while Tata is still expanding steel production in India it is abandoning the iconic Redcar plant.

No one wants a return to the 1970s, when Britain propped up ailing industries, but in an era when £1trillion has been lavished on keeping the banking industry afloat - some of it leaking into the bonus pot - there must be a case for short-term subventions.

One must also ask whether an independent Corus, without the debt burden of its Indian parent, would have been quite so susceptible to global winds of change or have been exploited in quite the same way for 'carbon' allowances.

The announced closure earlier this month of Cadbury's Somerdale plant near Bristol, just days after Kraft seized control, was a further example of how foreign owners simply do not care, whatever promises they may have made to government and the unions.

One has to trust the Pensions Regulator is keeping a close eye on how Cadbury's new owner intends to deal with the deficit in the confectioner's pension fund. As we reported yesterday the trustees have called in advisers to assess the deficit.

Having recently abandoned a defined-salary scheme in the US it is hard to believe Kraft will be that keen to honour pensions promises to Cadbury workers.

Daily Mail  20 Feb 2010

Sick trade in NHS medicines

Public interest test for takeovers should be reintroduced, says Vince Cable

The Liberal Democrat Treasury spokesman said the goverment had blundered earlier this decade when it brought in a new regime under which mergers and acquisitions were assessed purely on competition grounds.

The failings of this approach became obvious, Cable told the Radio 4's Today Programme this morning, when Kraft launched its hostile attack on Cadbury.

"What Peter Mandelson promised was huge government opposition and in reality there was no opposition – it just melted away," said Cable. "We ought to have a public interest test again, and we ought to look at the role of the hedge funds who take over large holdings for small periods during a takeover battle." ...

Guardian  10 Feb 2010

Kraft’s jobs pledge was always risky

Kraft deserves public anger

Mandelson attacks Kraft

Defend UK firms from foreign takeovers

Mandelson's 'disappointment' after Kraft meeting

As a supporter of global free markets, Mandelson is pretending to interfere with the Invisible Hand in pursuit of the third face of power.

Business Secretary Lord Mandelson has said he is "disappointed" that food giant Kraft would not commit to managing Cadbury's brands in the UK.

Lord Mandelson spoke after a meeting with Kraft boss Irene Rosenfeld.

He said he was glad of the personal meeting, but would now be looking for "much harder, more specific commitments in the next three to six months" ...

BBC NEWS  02 Feb 2010

The sad lesson of Cadbury is the City still holds the whip

For all Labour's puff about an economy built on industry, the takeover shows the dominance of finance is unchecked ...

Whatever guarantees the government thinks it can extract from Kraft are worthless. Peter Mandelson made it abundantly clear to Cadbury's institutional shareholders that he did not want the Kraft bid to succeed. It made no difference once the price was right.

For the business secretary, the capitulation of the Cadbury board is a profound embarrassment. It was Mandelson who said that the lesson from the most savage recession since the second world war is that Britain needed less financial engineering, more real engineering.

It was an excellent soundbite, because the slump brutally exposed the UK's over-dependence on funny money and wheeler-dealing in the City. But that's all it was: a soundbite ...

The hedge funds, which have been piling into Cadbury shares for the past few months, have made a killing.

Less financial engineering? Don't make me laugh. This was the return of business as usual with a vengeance.

As Joe Lampel, professor of strategy at Cass Business School, noted yesterday: "It is clear that the big winners from the forthcoming Cadbury/Kraft merger are the hedge funds who had plenty of time to accumulate holdings in Cadbury, and can now realise substantial profits." ...

Guardian  19 Jan 2010

£2m a day cost of Cadbury deal – plus £12m for the boss

Mergers and acquisitions

Private Equity

Brown warns Kraft on jobs

Brown's bluster in regard to the Kraft takeover of Cadbury is a cynical attempt
to pretend that the government can influence Kraft's jobs and investment policies.

Agreement by Cadbury to a £11.9bn takeover bid from its US rival Kraft Foods prompted Gordon Brown today to warn the American conglomerate to protect jobs in the West Midlands.

Cadbury accepted defeat in its battle to stay independent by recommending a £11.9bn takeover from Kraft, ending one of the most fiercely contested takeovers in the City for some time.

Cadbury employs 6,000 people in the UK and the Unite union expressed fears that the deal would lead to job losses as the US company puts a priority on paying back its debt. "Whatever good intentions Kraft may have towards Cadbury's workforce, the sad truth is there will be an irresistible imperative to pay down their debt, and this raises real fears for jobs and investment in this country," said Jennie Formby at the union.

But the prime minister said today: "The one thing I want to say is this: we are determined that the levels of investment that take place in Cadbury's in the United Kingdom are maintained. And we are determined, of course, that at a time when people are worried about their jobs, that jobs in Cadbury can be secure" ...

Guardian  19 Jan 2010

The sad lesson of Cadbury is the City still holds the whip

£2m a day cost of Cadbury deal – plus £12m for the boss

Mergers and acquisitions

Private Equity

Cadbury can look after itself. But, at last, Mandelson has seen the light

The business secretary's belated intervention in Kraft's takeover bid for Cadbury is a welcome change of course. We clearly can't rely on investors to defend national interests ...

(Mandelson's) ... move resonates beyond the Cadbury situation, which is symptomatic of the casual way we have allowed household-name companies to be flogged off to foreign buyers.

It marks a belated break with the laissez-faire policy that prevailed throughout New Labour's reign, which saw the UK stock market stripped of ICI, Hanson, P&O's ports, BAA, Abbey National, gas company BOC, glassmaker Pilkington and a long list of others, including energy and utility businesses ...

As Mandelson has suddenly noticed, mainstream investment institutions appear to behave perversely in take­overs.

Mergers are concocted by investment bankers, for the benefit of investment bankers.

Executives go along with them for the chance to boost their empires, egos and bank balances.

Most deals destroy value in the long term, so you would expect shareholders to put their feet on the brakes.

They don't, partly because their minds are on their quarterly performance figures ...

We have a highly diverse and indirect ownership model, where the members of pension funds have little say over, or even knowledge of, the investments made on their behalf.

Many might be horrified if their savings went to back a takeover involving significant job losses, but the institutions managing their money show no inclination to act, possibly because they see themselves as part of the City eco-system rather than as agents of the pension-holding public.

Nagging shareholders won't bring the desired results. Pension funds and trades unions need to be much more active and engaged in what happens to their members' money.

If the government really is concerned with the impact of takeovers on jobs, research and pensions, it should have the guts to take a position on the industries and companies it sees as vital to the national interest, as the French and Germans, and even the Americans, do. It's not enough to leave the job to investors.

Observer  17 Jan 2010   

Economic Democracy

Reinventing the Firm

Thousands of jobs that were to have been created in Britain to build the next generation of nuclear power plants could be heading overseas instead, after Westinghouse, the nuclear company sold by the government three years ago to Toshiba, chose one of its largest shareholders as the lead contractor to build reactors.

Westinghouse is expected to confirm this week that it has appointed US-based Shaw Group to head up its £10bn nuclear programme, passing over the favourite for the contract, rival engineering group Fluor.

Industry sources said that Shaw is likely to source far more reactor components from overseas than Fluor, which has close relationships with British manufacturers. The Unite union claimed that 10,000 new jobs in the UK would not be created as a result of Shaw being selected ...

Guardian 22 November 2009

... there is evidence to prove that free trade has not served well the richest economy in the world.

The US showed remarkable growth together with a rise in real wages for a majority of its population up until the late 1960s.

This was a period when the US manufacturing industries were in good health and were still protected from foreign competition by tariffs (taxes on foreign imports). Since 1973, however, when it turned to quasi free trade, the country has seen declining levels of real wage for around 80 percent of its workforceas high wage manufacturing sector jobs have been replaced by low wage service sector jobs.

The benefits of free trade have only accrued to the owners and CEOs of large multinational corporations which have been able to outsource production to low wage countries. Of course there has been overall GDP growth but that says nothing about how the benefits of this growth were distributed. Besides, the current financial crisis bares for all to see how consumer demand during the recent years was built upon the foundations of unsustainable debt.

Many free trade economists argue that the consumers benefit the most from free trade since it lowers the costs of goods and services. These economists forget that the same consumers are also workers and wage earners. If they lose jobs due to decline in manufacturing and increased outsourcing or are forced into low wage sectors of the economy due to free trade, their purchasing power is reduced. For one who suffers wage loss in tandem with falling prices there are hardly any benefits from free trade to brag about ...

openDemocracy 13 April 2009

This recession will hasten the shift to a new economic world order

Goldman Sachs predicts Indian incomes to become world-class by 2030

Free trade – or fair trade?

There has been anger over the government's decision to award a £7.5bn contract to build a fleet of inter-city trains to Japanese firm Hitachi.

The government said the contract for the "super express" trains would "create and safeguard" 12,500 UK jobs.

But the Conservatives said the transport secretary had not provided details to back up the jobs claim.

Unions have called for urgent talks with the government over how much of the work will be done in the UK.

The stock will replace ageing high-speed trains on the Great Western and East Coast main lines.

The consortium awarded the contract, called Agility Trains, is made up of John Laing, Hitachi and Barclays Bank.

The rival consortium which missed out included Bombardier, the only company making trains in the UK, which employs more than 2,000 workers at its Derby factory.

Transport Secretary Geoff Hoon described the plans as the single biggest investment in inter-city trains for a generation.

He said: "This announcement demonstrates that this government is prepared to invest, even in difficult economic times, by improving our national infrastructure.

"It is good news for the British economy that over 12,500 jobs will be created and safeguarded, good news for the regions that the government is supporting significant inward investment, and good news for passengers that we are taking the steps necessary to improve their rail journeys."

But Shadow Transport Secretary Theresa Villiers said the announcement was "typical spin" from the government.

"Only around 500, at most of the 12,500 jobs, announced today will be created in the UK by the train builder Hitachi and Labour have produced no convincing evidence to back up the rest of their claims on jobs.

"This announcement raises further questions about Gordon Brown's claims about British jobs for British workers. Geoff Hoon needs to stop the spin and tell the UK's hard pressed train manufacturing industry the real truth about his decision on replacing intercity trains."

Derby North Labour MP Bob Laxton said the decision was bad news for the area.

"This is a crass decision which gives the Japanese an opportunity of getting into the UK market. I don't believe for one moment the figure of 12,500 jobs because work will be brought into the UK from overseas," he said.

Agility Trains said it was committed to spending 70% of the contract value in the UK, adding that Hitachi and John Laing expected to create 2,500 skilled engineering jobs in the UK, in train manufacturing, construction and maintenance. ...

BBC NEWS 12 February 2009

Fast train to futility

Spin claims over £7.5bn train contract

Foreigners will power UK's next nuclear age

If Britain is to build more nuclear power stations it will have to look abroad for expertise because it no longer has the skills to build reactors, writes Russell Hotten

...

Yesterday, Areva, the French state-controlled group and the world's largest builder of nuclear power stations, effectively threw its hat into the ring, saying that it could have a new series of reactors up and running by 2017.

...

So, as well as the political and regulatory hurdles of embarking on a nuclear-build programme, this lack of indigenous experience could also be a problem. British experts in the nuclear field are a dwindling breed.

According to Prof Ian Fells, a leading expert on the industry: "The teams of engineers that built Sizewell B in 1995 are all retired or dead. We do not have the skills to build nuclear power stations any more." ...

Business, The Daily Telegraph, 18 May 2006

French energy boss in nuclear warning