Britain runs a big trade deficit. The last time there was a surplus was in 1984, when it was modest 0.3% of GDP. The current rate is 6%. Leaving the effect of Brexit aside, the government is temporarily averting a balance of payments crisis by selling the country’s gold and silver – the basic infrastructure.
Yes, Britain is for sale. Its infrastructure has gradually been sold off since the days of Thatcher. One third of all energy, water, transport and travel infrastructure has already been sold. The water Brits drink is supplied by a French company, the National Grid gas pipelines are being sold to a consortium of foreign Chinese and Qatari investors led by the Australian investment bank, Macquarie. Macqaurie owns the biggest car parking company, National Car Park, along with Glasgow, Southampton and Aberdeen airports The state-owned green investment bank will soon be owned by them as well. A French firm, using Chinese funding, is building a new nuclear power station. Three quarters of the rail franchises in the UK are foreign-owned, the companies concerned using the profits earned to keep down the travel costs of people in Holland, Germany etc. Power distribution is dominated by French, German and Spanish companies. Add to all this the fact that the car, steel, cement and most of food processing is owned by foreigners, and even aerospace industry is succumbing.
The City of London makes huge commissions out of the sales, making profits now and hoping for the best for the future. When the government organise trade delegations overseas they are not encouraging inward investment; they are flogging off assets paid for over decades by the British taxpayer. Every time a big piece of infrastructure is sold it has, until Brexit at least, increased the value of the pound sterling, and thus made exporting products that much more difficult. The situation now is that the UK-owned assets, lumped together, are worth less than UK assets owned from overseas. And as a result, there is now a net out flow of interest, dividends and profits from the UK that cannot go on much longer without having serious economic effects.
Britain is unique in being totally open to foreign ownership, in contrast to almost every other country. Others can block takeovers deemed not to be in the interest of their countries (for the record the Committee on Foreign Investment in the US makes decisions on what is and is not in the nation’s interest). Only carelessness or a short-sighted ideology on the part of conservative government could explain the utter stupidity of the policy. One has to wonder who, apart from the bankers might be profiting?
Britain is starting to resemble the homeless man, living on the street. It will barely own the clothes it stands up in. It is walking out on on its natural family, wanting nothing more to do with it. – few friends, few possesions, just the Queen to remind the world that Britain was the inventor of many of the things the world now takes for granted.
I understand the argument that certain industries of vital national importance- railways, roads, energy supply- ought to be nationalised. But in other areas such as car parks, steel, food processing or cement, where the benefits of private competition outweigh the investments and democratised control of public ownership, I don’t see why foreign companies can’t compete with local ones. Of course, the state shouldn’t encourage foreign ownership by default, but if a foreign company can provide a service better than a British one, people will use the services of that foreign company, forcing the British company to be more competitive. We’re seeing this in the supermarket price wars, where German giants Lidl and Aldi are driving down prices, because Tesco, Sainsbury’s and the other British supermarkets are facing stiffer competition.
I also wouldn’t be too concerned with the trade deficit, which mostly concerns goods. 70% of UK GDP is services, and that proportion is likely to rise. Britain can’t outcompete Asia on costs, nor Germany and Switzerland on quality, so we aren’t naturally suited to manufacturing anymore. But the UK does do services well, which is why it attracts a lot of foreign direct investment. This means that the trade deficit is likely to remain high, even with a weaker pound.