Kill this deal or risk our national security
THIS has been a terrible week for Labour. The toxic anti-Semitism row has exposed a seam of bigotry in the party, while Jeremy Corbyn’s reluctance to stamp it out has brought an unprecedented wave of protest from the Jewish community and his own moderate MPs.
But instead of exploiting Mr Corbyn’s weakness, the Government has handed him a huge boost with its incompetent handling of the GKN takeover – a sorry episode which reveals the unacceptable face of modern capitalism in this country.
The facts make grim reading. One of Britain’s great engineering companies, GKN, which employs 58,000 people worldwide and is vital to national security, was taken over by four asset strippers – the directors of Melrose – who now stand to make up to £285million after narrowly winning a shareholder ballot.
GKN fell to the predators after 25 per cent of the votes were cast by speculators who bought their stock in the last few weeks and will now make a killing. This frankly stinks. And what of our hapless Business Secretary Greg Clark – who Theresa May tried to sack some months ago? He claims he’s secured some assurances from Melrose to protect GKN, but they aren’t worth the paper they’re printed on.
His hand-wringing performance on the BBC yesterday was testimony to the ineptitude with which he’s handled this whole affair.
Even apart from the huge sums going to Melrose directors, the figures involved are squalid and offensive – £172million for hedge funds, £119million for the banks that financed the deal, £9million for lawyers and a ludicrous £ 5million for public relations firms.
And of course, that money will have to be extracted from the company – by shedding jobs, selling assets and loading it with debts. As a result, the firm will almost certainly be finished as a major global player. Yet disaster can still be averted.
Defence Secretary Gavin Williamson – a man clearly committed to this country’s security – has been bravely fighting for a veto because of GKN’s strategic importance. Other ministers who care about our industrial future must now get behind him.
There are precedents. The Government has intervened in seven other takeovers of defence and aerospace firms on national security grounds since 2004. None was more vital to our interests than GKN.
There’s hardly an aircraft in the sky that doesn’t contain components made by the firm – from the Eurofighter Typhoon to America’s F-35 stealth fighter.
One thing is certain. This saga is about more than the betrayal of a 259-year-old British company. It’s about amoral practices in the City, which bring the free market into disrepute and play directly into Labour’s hands.
To stop the scandal of last- minute speculators voting to break up companies so they can make huge profits, rules must be brought in stipulating that only shareholders who have held stock for at least six months can take part in takeover ballots.
But even more urgently, this shabby GKN deal must be blocked. Mr Clark and his civil servants clearly don’t have the courage or wherewithal to do this. They should be replaced by people who do.
As for Mrs May, she needs to show some strength in an affair which threatens to shame her party – and revive Mr Corbyn’s faltering fortunes. THE response of our magnificent readers to the Mail’s petition demanding that Britain’s post-Brexit passports be made in this country has been truly inspiring. More than 220,000 have signed up – sending an unequivocal message that awarding the contract to a foreign firm was simply wrong.