Is 'Boom Britannia' A Hollow Myth?
Foreign money is piling into Britain and the good times are rolling. Will we live to regret selling our trophy assets?
In the ten years since Labour came to power, Britain has had an image change. No longer "Cool Britannia", she has evolved into "Boom Britannia" and the evidence is everywhere. London art auctions are breaking new records, the City is outstripping Wall Street as a financial centre, and the world's most expensive flat has just been put up for sale in central London for £84m.
Huge wealth is pouring into "Trophy London" from abroad. For anyone who remembers the dreary Seventies when rubbish piled up on the streets and columnists wrote of Britain going into absolute decline... this is thrilling.
Yet, meanwhile, our economic lifeblood is draining away. Bit by bit, Britain's crown jewels are being snapped up and no one questions the damage being done. The boom in sales of Britain's key industries to foreign and private equity buyers is hailed as proof that enterprise is flourishing.
The sale of every asset – be it Liverpool FC or the remains of British Steel – is hailed by Gordon Brown as a brilliant coup. Last year foreign firms spent £75.5bn buying British companies; mostly using borrowed cash. Giant loans financed the takeovers of BAA, O2 and Abbey National by Spanish companies while numerous other firms in crucially important industries slipped silently into foreign hands.
The combined effect of this transfer of power cannot improve Britain's well-being. Japanese, French and American bosses care little for the fate of British schools, workers, skills and civic institutions. Mr Brown's skewed understanding of capitalism and open borders has wilfully doomed us to become colonial servants of foreign masters seeking crude profits.
Nostalgics might lament the passing British icons, but this kind of change is good and necessary. As economist Joseph Schumpeter said, healthy economies rely on creative destruction. Only when the old goliaths die or are taken can smaller, nimbler companies emerge. It is significant that Vodafone, created as a tiny division of Racal Electronic in 1984, is now a £78bn global powerhouse while Racal is largely forgotten.
Yet disquiet is growing even among those who profess to be relaxed about foreign ownership. Rolls-Royce chief Sir John Rose has warned Britain is in danger of becoming an aircraft carrier for foreign companies. That in itself is not a problem, if we want Britannia's economy to continue booming in this laissez-faire climate, it is not the sale of our assets we should be worried about, but our mediocre education system.
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