Kill this deal or risk our na­tional se­cu­rity

Daily Mail - - News -

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.

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