This is the worst time to open up British industry to foreign predators

We should be doing more to protect our companies from opportunistic raiders, not inviting them in

‘Britain has fallen into disrepair and foreign ownership makes it much harder to reverse’

‘What’s happened in such a short space of time to prompt such a change of heart?’

The consequences of this country’s naive help-yourself attitude to foreign takeovers are everywhere. The pipes that carry the nation’s water to our homes are leaking millions of litres of water every day. Car manufacturers have repeatedly threatened to pack up and leave unless the state hands over hundreds of millions of pounds in subsidies, and thousands of steelworkers have become pawns in this Government’s yearning for a post-brexit trade deal with India. Meanwhile, strategic assets such as our airports, ports, and even the pipeline that sends gas around the UK are traded like pieces on a Monopoly board without a thought for the wider national interest. Swathes of this country’s vital infrastructure and key industries have ended up in the hands of unaccountable overseas investors, and private equity companies, who have routinely prioritised dividend payments and executive bonuses over basic yet necessary capital investment. As a result, the fabric of Britain has fallen into disrepair and foreign ownership makes it much harder to reverse.

Elsewhere, some of the most promising firms in high-growth sectors such as engineering, software and cyber security have vanished abroad without so much as a whimper. Unforgivably, in some instances such as telecoms and attempts to replace our aging nuclear power stations, we’ve rolled out the red carpet to regimes outwardly hostile to Britain.

What a time, then, for Oliver Dowden to be drawing up plans to relax the Government’s takeover screening powers. Never mind that it is less than two years since the National Security and Investment Act was beefed up to protect our most important companies from opportunistic raiders. Rishi Sunak’s flip-flops are now par for the course. But this suggests they are becoming increasingly nonsensical as he grows desperate in his attempts to avoid annihilation at the ballot box.

What possible justification could there be for less scrutiny to be applied when it comes to international deals? The figures certainly don’t point to some overly anti-foreign investment agenda that is in danger of harming our international standing, as Dowden has suggested. Of 866 inbound acquisitions registered with the Investment Security Unit in the year to the end of March, 65 were called in for further review – less than 8pc.

Of those, the Government intervened in 15 cases, more than 40pc of which involved companies or investors from China. Ten were forced to adopt certain remedies to mitigate national security concern and a mere five were blocked outright. Nearly 90pc – 57 out of the 65 – were ultimately cleared.

Besides, it was only in July when these figures were published that the new regime was deemed to be working well. It represents a “light-touch, proportionate review that offers investors the certainty that they need to do business, while crucially protecting the UK’S national security in an increasingly volatile world”, one minister said. Who exactly? Deputy prime minister Dowden.

Four months later and apparently “we can’t have yesterday’s regulation for tomorrow’s world”, he says. What’s happened in such a short space of time to prompt such a change of heart?

The answer is that he has almost certainly allowed himself to be cowed by a fierce collective lobbying campaign launched by deal-starved investment bankers, corporate lawyers, and assorted City spin doctors desperate to find a way to revive the sort of activity that is their lifeblood.

That there’s a severe drought isn’t in question. According to the London Stock Exchange Group, mergers and acquisitions involving a UK company almost halved in the nine months to September to a near-decade and a half low. The Takeover Panel meanwhile, funded by the fees it charges on transactions, has just posted a £3.8m annual loss, its first deficit for a decade.

But the idea that any of this is because the UK has suddenly embraced a new era of protectionism that has sent foreign buyers running for the hills is plainly nonsense. There are many reasons why mergers and acquisitions have dried up: sharply rising interest rates, high inflation and fears of a recession among them. But I very much doubt that a moderately beefed-up national security regime in one of the most liberal places on the planet is a factor.

Besides, I suspect most people would welcome greater scrutiny of anyone seeking to buy up the military and defence contractors that make this country safe, or companies in important industries such as energy, computing and advanced materials, which is where more than half of the deals subjected to national security conditions were to be found last year.

Dowden is also conflating takeover with genuine investment, which is part of the problem. Selling yet another British company to the highest bidder is not the same as an overseas company opening a factory in the UK or choosing to establish a major overseas offshoot here. It is both naive and disingenuous in the extreme to pretend they are remotely the same.