British companies can be 'snapped up' by foreign predators

Laws which stop British companies from buying their foreign rivals were slammed yesterday as 'an insidious parasite' by Britain's biggest business lobby.

In a stinging attack, the powerful "voice of business" CBI said it is an "ongoing disgrace" which is stopping UK plc buying abroad.

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President Sir John Sunderland said it is an outrage that British companies could be snapped up by foreign predators, but could not easily do the same overseas because foreign governments block any such move.

Many of the greatest names in British business have fallen to foreign rivals over the last few years, but the tide tends to only flow in one direction.

It is feared that UK Plc is up for sale to the highest overseas bidder.

Over the last three years, an extraordinary £500 billion has been spent by foreign bidders buying British businesses.

At this record level, this is nearly equal to half of the country's entire economic output.

This year alone, 720 UK companies worth a combined £138 billion have been sold to foreign buyers, and a further £26 billion are under offer.

But British companies have spent just £300 billion on overseas acquisitions, according to the figures from the research firm Thomson Financial.

Iconic British business which have been sold range from the banking giant Abbey; the airports owner BAA and the Premiership football club Manchester United.

But Sir John said British businesses are being thwarted in their attempts to go shopping overseas by protectionist policies from foreign governments.

He compared their attitudes to British bidders to Manchester United manager Sir Alex Ferguson's "defensive wall", rather than "Adam Smith's free trade dream."

On the opening day of the CBI's annual conference, he used his speech to attack the currrent situation as unfair and bad for business.

He said: "It seems clear that protectionism is an insidious parasite in the so-called free trade ecosystems of many developed countries.

"Countries that should know better proclaim to believe in free trade...but when the nasty foreign competition knocks on the door...it's a case of...'it's just my shoes', or 'it's just my steel', or 'it's just my ports'.

"It is alway a special case."

He reserved particular criticism for America which has fought off a number of recent bids for its airports and ports as "an ongoing disgrace."

The Spanish government's policy to do "everything in its power to ensure Spain's energy companies remained Spanish" was also attacked.

France was held up as the most "sublime example" after declaring that the yoghurt maker Danone was a "national champion" of strategic importance.

In Britain, for example, huge numbers of our utility firms are owned by companies from foreign countries such as Hong Kong, Malaysia and Australia.

Later, the Shadow Chancellor George Osborne, who replaced David Cameron after he controversially cancelled his appearance to go to Iraq, echoed Sir John's views about the dangers of protectionism.

He said: "We are almost the only advanced western economy where you will not hear the siren calls of protectionism."