Newspaper article The Evening Standard (London, England)

Roll Up, Roll Up -- Everything in Britain Is for Sale

Newspaper article The Evening Standard (London, England)

Roll Up, Roll Up -- Everything in Britain Is for Sale

Article excerpt

Byline: Hamish McRae

[bar] HE Treasury is thinking of selling part of its 82 per cent stake in Royal Bank of Scotland to Abu Dhabi investors. It does not want to sell it back to British investors because the price at which it would have to do so would leave taxpayers with a loss. It bought its interest at 50p a share, paying [pounds sterling]45 billion for it. Since the current price is just under 30p, that leaves it with a book loss of close to [pounds sterling]20 billion.

But there is something much bigger here than taxpayers getting their bailout money back. It also highlights the way in which we have been content to sell our assets to foreign investors -- and hence to become the most open society for inward investment on earth.

On the face of it, selling to a foreign sovereign wealth fund such as Abu Dhabi's seems fine. True, there is still the loss on the stake but it would show there is an interest outside Britain for what is becoming a decent quality bank. It would bring in cash now, always welcome, and since the sale will be for perhaps 15 per cent of the bank, there would still be another and much larger chunk to be sold at some later date.

Indeed, the deal might well enable the rest of the bank to be sold eventually at a higher price than would otherwise be the case. The paper loss is not quite as bad as it seems because taxpayers have made an additional income from guaranteeing part of the RBS debt portfolio and because the Abu Dhabi sovereign wealth funds have a good record for picking sound investments. Certainly the rumour that they might be buying pushed up the share price by 4p, which is a start. In the narrow circumstances of British politics and finance, the deal sort of makes sense.

But if you stand back, it is extraordinary what we now regard as normal. It is normal to accept that the government of a small Middle East country with a population of 1.6 million has more resources than our own government.

Sure, Abu Dhabi has oil but so do we: indeed a decade ago we pumped more than they did, so what have we done with the money? It is accepted as normal that if we want to build a new airport in the Thames estuary, there will be sovereign wealth funds that will stump up to help pay for it. It is accepted as normal that if we want to build nuclear power plants, we go to the French to do it for us.

And for all the debate about rebuilding Britain's manufacturing base, do you know which our largest manufacturing company is, measured by employment? The answer is the Tata group of India.

We have become a land where everything is for sale -- but as a German industrialist who has lived here for many years said to me last week: "The trouble is, you haven't got much left to sell."

That is too cruel. Actually this latest twist of the RBS saga neatly illustrates two different aspects of Britain's place in this ever-more-globalised world, one positive, the other less so. …

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