Politicians are often tempted to rush through big deals to get attention. The Chancellor's push for growth may make this more likely

 Sharp-eyed buyers from outside the UK are swarming the UK stock market like bargain hunters in TK Maxx.

During the summer, there was a target on the back of a number of top tech companies, such as cybersecurity company Darktrace and IT company Micro Focus.

They are not the only ones. Jacob Rees-Mogg is in charge of making sure that Britain doesn't lose all of its corporate jewels. The National Security and Investment Act, which went into effect this year, lets the new Business Secretary stop bad takeovers.

Will he use them? That's the question.

Kwasi Kwarteng, who came before him, was a dove. It's not fair to judge Rees-Mogg yet, since he just got his well-shod feet under the desk. One of his first things to do, though, was to let a US rival buy Inmarsat for £5.6 billion. OneWeb, a satellite company that is partly owned by the government, is likely to be sold to Eutelsat, which is backed by the French government.

Even though satellite technology is a very important UK asset, these deals are already in the works. In the case of Inmarsat, Rees-Mogg insisted on "remedies" like promises of more spending on research and development and skilled jobs here. But sometimes these promises don't mean anything.

US private equity tycoons at Advent International bought British defence company Cobham by making a lot of promises like these. In 18 months, it didn't stop them from cutting up their prey. Still, it doesn't look like the government has learned anything. Advent has been given the go-ahead to pay £2.6 billion to buy Ultra Electronics, which makes equipment to find submarines. It is now thinking about making a move on GB Group, a company that makes tech to stop fraud.

Most of the UK defence industry is owned by US investors because the government shrugs its shoulders. Even though we have been friends for a long time, this is an unusual way to give up our independence and control.

Since the 1980s, when Big Bang happened, the UK stock market has probably been the most open to foreign capital. In some cases, this has worked out great. European companies like Akzo-Nobel, which bought the old ICI paints business, and some German and Japanese companies in the car business have been great owners.

But not much has been done to tell the difference between responsible long-term buyers and pirates who just want to make money. People in the City often say that people who own shares don't value engineering and technology or even understand what they are. And ministers tend to look at foreign takeovers through the narrow lens of their own job.

Don't forget British Steel. In 2019, it was on the verge of collapse, which would have cost thousands of jobs. Even though there were obvious risks, the government welcomed a Chinese takeover with open arms.

The purchase of the semiconductor company Newport Wafer Fab by Nexperia, which is backed by the Chinese government, is the next big deal that will come before Rees-Mogg. He should see that giving China control is a bad idea and tell the sale to be cancelled.

Politicians are often tempted to rush through big deals just to get credit. This lets them say that their policies have made the UK a good place for business because of them.

This may be helped by Kwarteng's Big Bang 2.0 in the City and his push for growth. But for real growth to happen, British tech, innovation, research, and jobs need to be supported. Fire sales to foreign thieves are not a good way to get rich.

Content Source: https://www.thisismoney.co.uk/money/comment/article-11248371/RUTH-SUNDERLAND-Weak-pound-spurs-raids-British-companies.html