My speech during the debate on the National Security and Investment Bill, 17 November 2020

I support the idea of Ministers having powers to prevent foreign acquisitions where security matters are of concern. I trust that Ministers will want to ensure that all the other transactions that do not pose those security issues will go through smoothly, easily and quickly for obvious economic reasons.

There is a wider concern. As Ministers have rightly said, this is not the debate to deal with all the other worries we might have about unsuitable foreign investors, but there is concern out there in the public that we do not want asset-strippers, we do not want large companies that come here in order to gradually close down the UK capacity to take out a competitor, and we do not want them to come in under cover of sustaining jobs in Britain only to take away the intellectual property and then later to discover that they are not so keen on the British business after all.

We do need those protections, but where Ministers are checking their defences on competition grounds as well as on security grounds, they need to ask themselves this fundamental question: why are so many of our assets sold to foreigners? There is, of course, one very simple reason: throughout this century, under all three types of Government we have had so far, we have run a massive balance of trade deficit with the EU on trade account, so we need to raise the foreign currency to pay the bills so we can afford to buy the tomatoes, the vegetables and the German cars and all the other things that we have been importing, not matched by an equal volume of exports to pay those foreign currency bills.

We see that it is having a bigger impact now on our long-term balance of payments situation. Before we ran this long series of huge deficits, we had net assets abroad, which meant that there was a big positive line in our balance of payments, which said that as a country we earned a lot more in interest and dividends from our investments overseas than foreigners earned on the investments they had in the UK. That has now been reversed, and every year now we have a very big deficit on the interest and dividends, because there are so many more foreign claims on us than we have claims on foreign assets.

This is a matter of concern. Ministers need to work on a series of economic revival policies that put much more emphasis on British people investing in Britain, so that we recreate more of that wealth in our own national hands and do not have the vulnerability, that need for foreign currency, which has been brought about by the current twin deficits—the trade deficit and now the deficit on investment income account.

I was very pleased to hear Ministers saying, rightly, that there are many great investment opportunities in the United Kingdom, so we need to deal with this paradox: why is it that foreigners can see them and are piling in with all their money to buy our best ideas, our best companies and our best properties, and why are more British people and British companies not able to do just that? The Government need to work with the British investors, British companies and British entrepreneurs to make it an even better climate for them to do the investing, as well as taking advantage of the foreign investors coming in and giving employment opportunities.

We need that entrepreneurial Britain, which grasps this opportunity and understands that we have a huge opportunity here to take out imports—to grow more of our own food, and to produce more of our own cars and more of our own products generally—so that we chip away at the very big balance of trade deficit, and in turn then generate cash that can be reinvested in the United Kingdom.

This Second Reading debate presents an opportunity to make the wider plea to Ministers that, as we recover from covid and the damage, we remember that £100 billion deficit that we were running in 2019 before covid-19 disrupted world trade and say that that is unacceptable: that means too big an increase in claims by foreigners on our country year after year. That is why we need policies to get the investment in, chipping away at the £20 billion deficit in food with the EU and at the fishing deficit and the car deficit, so that we are generating those jobs on British capital, and starting to reverse that net liability position that now disfigures our accounts.

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44 Comments

  1. ukretired123
    Posted November 18, 2020 at 2:17 pm | Permalink

    Excellent and especially the hint about the fishing deficit too. Much of what we buy from Europe is economic dumping by the historically subsidised Euro which is why the so-called level playing field is tilted in its favour estimated to be between 15% and 20% by a recent think tank.

    • Martin in Cardiff
      Posted November 18, 2020 at 5:31 pm | Permalink

      We – of course – have a healthy surplus in the sale of services to the European Union.

      The ERG are determined to wreck that trade.

      Brexit only worsens any economic problem that the UK might have, and in turn that exacerbates social woes.

      The whole thing is an utter disgrace.

      • Edward2
        Posted November 19, 2020 at 8:57 am | Permalink

        A quick internet search reveals the total trade value of the City of London in 2018 was approx £500 billion.

        City of London trade with the EU in 2018 was £26 billion.

    • Harkin
      Posted November 18, 2020 at 5:31 pm | Permalink

      Yeah way forward- keep putting your store in think tanks? Will we ever learn?

      • dixie
        Posted November 19, 2020 at 7:29 am | Permalink

        @Harkin – Are you seriously claiming that the EU does not support heavy subsidies, protectionism and economic dumping for the benefit of it’s favoured members?

  2. David_Kent
    Posted November 18, 2020 at 2:46 pm | Permalink

    I applaud you for raising this issue in terms that you have. It does mean however that those City people who make a lot of money advising on Mergers and Acquisitions will kick up a huge fuss every time a deal is questioned by ministers. We’d better have a good broad definition of ‘security’ laid down in the bill and ministers had better be ready to issue rulings fast, preferably as soon as a company comes up for sale and before bids are put in.

    • forthurst
      Posted November 18, 2020 at 9:38 pm | Permalink

      If the only way the City of London can pay its way is by killing off the wider economy, then it would be in the nation’s interest to close it down. However, there are many activities of mutual benefit performed by the City and these should be the focus; are activities performed by so-called investment banks or hedge funds or private equity either necessary or desirable?

      The cost of an engineering degree course at a first class university is far higher than the amount English students pay, so why should banks be able to recruit them to engage in spivery because of their superior brains thereby depriving the country of able people who could make a difference? Is it time that students who go on expensive STEM courses actually work for relevant British companies for a minimum period after they graduate? We are awash with Arts graduates and from other flakey disciplines but have to import many of those with the useful skills we actually need.

      By degrees we are sinking into third world status because of the extremely poor quality of the governance of our country. Let’s stop being beholden to those who fund the Tory party and make sure we make the best use of our limited talents and ensure that those people who offer their lives and loyalty to such companies as Cadbury do not find themselves on the street because of other people’s greed so that the Tories can then start grandstanding about Northern Powerhouse etc to fill the gap caused by their own negligence.

  3. Alan Jutson
    Posted November 18, 2020 at 3:20 pm | Permalink

    All great stuff JR but afraid it’s all far too complicated for most of our Politicians to understand, otherwise they would have already taken action.

    I fear you are wasting your breath, but do keep on trying, at some stage perhaps it may eventually start to sink in, and perhaps you will eventually get enough support for some common-sense policies.

  4. Everhopeful
    Posted November 18, 2020 at 3:45 pm | Permalink

    JR does a lovely speech! Great delivery too. Why aren’t they all like him?
    But how does all this good sense fit in with The Great Reset?
    Are there two agendas running concurrently?

  5. glen cullen
    Posted November 18, 2020 at 4:09 pm | Permalink

    Well said Sir John

    But it shouldn’t have needed to be said with a Tory Government in power with a 80 seat majority

    I feel that we are in oppostion with our own party

    It time to make a choice

    • Lynn Atkinson
      Posted November 18, 2020 at 10:21 pm | Permalink

      He is!

    • steve
      Posted November 19, 2020 at 12:51 am | Permalink

      glen cullen

      “It’s time to make a choice”

      ============

      Most of us have, if there were a general election tomorrow Borris Johnson would lose it for the conservatives.

      That said, whether or not the electorate annihilate the party or simply vote them out would depend on two factors; a deal with the EU which most of us don’t want, and Boris continuing with his attacks on our motoring freedoms with his crap electric car policies.

      We don’t want to be trading with the EU, we’ve experienced the price of doing so for decades. The ungrateful EU can go to hell in a hand cart as far as most leave voters are concerned.

      And we object angrily to Johnson’s green crap revolution being pushed through without our permission.

      • Narrow Shoulders
        Posted November 19, 2020 at 7:27 am | Permalink

        Green is like the EU used to be from an electoral perspective. All parties will impose more and more draconian measures on us, there is no one to vote for who doesn’t toe the line.

        Where is our “peoples’ vote” on green.

        Lower pollution, yes – carbon neutral? follow the money

      • dixie
        Posted November 19, 2020 at 7:32 am | Permalink

        If you voted for Conservatives in the 2019 GE then you did give your permission and support – look at their manifesto

      • Fred H
        Posted November 19, 2020 at 10:01 am | Permalink

        all in all a great Government, isn’t it!

      • Lynn Atkinson
        Posted November 19, 2020 at 4:08 pm | Permalink

        Correct. I met a lifelong Tory voter today who actually went puce in the face at the mention of Boris.
        He’s toxic. So are his policies.

  6. Everhopeful
    Posted November 18, 2020 at 4:15 pm | Permalink

    But will we have health security and investment?
    I suppose everyone is aware that the NHS, despite the present emergency is holding a conference?
    Online natch…”NHS Reset”
    Strikes me trying to read the pc Common Purpose-speak that it is all about PHYSICAL care in the community!
    No hospitals.

  7. The Prangwizard
    Posted November 18, 2020 at 5:20 pm | Permalink

    Many times and over a long period I have said there must be a sovereign wealth fund, created from money we will no longer send to the EU particularly if we ever get free, but in any event. Without it the money will be frittered away and so it has proved. If the fund’s capital balance were to be published each year people could see the benefits and see where any spending had gone.

    Sadly money has lost its value under mad Boris. He spends what we haven’t got with no limits.

    • Lynn Atkinson
      Posted November 19, 2020 at 4:09 pm | Permalink

      We have a Sovereign Debt Fund. Politicians are like children, money burns a hole in their pockets. Therefore there will never be a Sovereign wealth fund.

  8. Len Smith
    Posted November 18, 2020 at 6:08 pm | Permalink

    Global Britain, it turns out, means blocking inward investment and growing more of our own food instead of importing it from countries that can do it better and cheaper. You really don’t get trade economics do you

    • steve
      Posted November 19, 2020 at 12:35 am | Permalink

      Len Smith

      Have you read about our host’s business experience and qualifications ? It is displayed on this site, top right hand corner.

    • dixie
      Posted November 19, 2020 at 7:40 am | Permalink

      Asset stripping is not inward investment.
      Acquisition and relocation outside the UK is not inward investment.

      Apparently cheaper food isn’t cheaper when you take account of the EU subsidies that we pay for, and we can import food from outside the EU cheaper than inside, food we would not or cannot grow here.

      There is nothing superior about the EU, morally or economically. You only have to look at their behaviour over PPE during the pandemic, their turning a blind eye to piracy and smuggling in the channel, pillaging the Mediterranean and West African seas. They are nothing more than playground bullies who hold sway only if you submit to their rule

    • Fred H
      Posted November 19, 2020 at 9:59 am | Permalink

      If we continue to import everything from ‘those who do it better’ what will we have left to pay for all these ‘better goods’? We either pay for cheaper goods at lower labour unskilled workforce, or covert higher technical ( but mostly adding nothing but pleasure) – cars for example. So where does our future lie – useless unskilled labour force watching former third rate labour markets leave us adrift.
      Globalisation, eh?

      • Fred H
        Posted November 19, 2020 at 9:29 pm | Permalink

        oops covet not covert.

  9. Lynn Atkinson
    Posted November 18, 2020 at 6:30 pm | Permalink

    The tax ‘paying-field’ should not simply be levelled but tilted in favour of native people, (People who do not send ‘remittances home’) and foreign nationals.
    Many British Nationals, highly qualified, would return home with their assets and ability at the drop of a hat were they able to avoid the discrimination against natives. Their productivity would therefore be home-grown rather than bought in.
    But a brilliant contribution, thank you JR.

  10. Roy Grainger
    Posted November 18, 2020 at 6:38 pm | Permalink

    Off topic.

    “But while PHE boss Dr Susan Hopkins said Christmas “is possible”, she warned it could come at a price. She said harder measures could be needed before and after Christmas to make up for the five days of festive freedom.”

    Since when did PHE bureaucrats announce policy ? How come she doesn’t mention it has to be agreed by the Government and passed by the Commons ?

    No-one has come out of the Covid crisis well: the government, the Civil Service, SAGE, the NHS, the media, the public and PHE – but of all of these the latter has done by far the worst job. That they still are allowed to make announcements direct to the media is a disgrace.

    • glen cullen
      Posted November 18, 2020 at 10:35 pm | Permalink

      Maybe she is dealing directly with the real boss – Lady Carrie

    • Lynn Atkinson
      Posted November 19, 2020 at 4:12 pm | Permalink

      Common Purpose teaches you Joe’s to ‘take authority beyond your right to do so’ Whitty et al brilliant graduates obviously. They have seized The Office of The Frirst Lord of the Treasury.

  11. steve
    Posted November 18, 2020 at 6:46 pm | Permalink

    JR

    “We need that entrepreneurial Britain”

    ==============

    Thing is, Sir Redwood, ‘entrepreneurs’ don’t give a fig about national assets, strategically important industry, and especially not sovereignty.

    These are the people who readily set up manufacturing in China at the expense of British jobs. The very same people who have no qualms about selling other people’s asses down the river at the blink of an eye. It’s been going on for decades, now we are expected to be penalised for the environmental stink they caused with their cheap labour playgrounds in Asia.

    No, Sir, I believe we need an entirely new industry and business strategy in this country…focussed on national security and self sufficiency.

    • Lynn Atkinson
      Posted November 18, 2020 at 10:23 pm | Permalink

      Oh yes we do! We give more than a fig.

      • a-tracy
        Posted November 19, 2020 at 9:43 am | Permalink

        +1

        Really Steve that is very insulting to entrepreneurs that do invest, build, employ and grow in the UK. We do give a fig!

        Our children have been taught for three decades that business and entrepreneurialism is selfish, individualist and greedy and not a good thing, our chancellors have sought more and more ways to punish local UK based wealth creators. I’m glad I’m nearing the last stage of my entrepreneurial life and not at the start listening to Sunaks plans.

    • dixie
      Posted November 19, 2020 at 7:42 am | Permalink

      “some” entrepreneurs maybe, certainly not all or even the majority.

  12. Lindsay McDougall
    Posted November 18, 2020 at 6:58 pm | Permalink

    I like your big idea. In implementing it, are there any restraints that we need to impose on the City of London? Or does the fault lie elsewhere?

  13. steve
    Posted November 18, 2020 at 7:42 pm | Permalink

    JR

    “….so we can afford to buy the tomatoes, the vegetables and the German cars”

    ======

    Tomatoes & veg – grow your own, thus not trading with the EU, which is a good thing.

    German cars? – Ban them, they’re mostly driven by narcissists and idiots anyway. Not always, but mostly.

  14. XY
    Posted November 18, 2020 at 8:03 pm | Permalink

    Does the Bill deal properly with the situation where companies offer assurances to the UK government, which they break not long afterwards?

    We saw that with BMW, assurances… then scarpered, with government funding and help and as you say, taking the intellectual property of the British firm with them.

    The we saw the attempted Astra Zeneca takeover which was ultimately prevented. However, we have seen power generation fall into French and Chinese hands.

    We have also seen a government that has consistently tried to milk any remotely entrepreneurial activity with nonsense such as IR35, which is of benefit to consultancy companies such as the one founded by Mr Sunak’s father in law.

    After the covid thing is over, if it ever is, rather than fall back on conservative principles of reducing tax and regulation to promote economic activity I expect to see the pretend-Conservatives do the opposite.

    We have already seen that the Office for Tax Simplification has recommended changing CGT to align with income tax, resulting in a massive hit to anyone who’s had the nerve to actually try to make some money.

    We have also read newspapaer reports that they are considering scrapping higher rate tax relief on pension contributions – this with millions of people under-funded, now desperately trying to be self-sufficient and provide for themselves in retirement.

    I hear a lot of sense from this blog, what I do not see is much of it being translated into action by the Conservative government as a whole. They are constantly taking away any incentive for anyone to try to do anything worthwhile in this country. Perhaps those “daft” school kids are right – the only way to become anything but another brick in the wall is to be a footballer or a singer/celebrity.

    Anyone else will be shafted by successive governments taking their money and giving it to other people – or institutions such as the EU, or massively subsidising flighty multinationals via schemes such as the JRS while UK workers who have the temerity to be self-employed are left with nothing.

  15. Will in Hampshire
    Posted November 18, 2020 at 8:24 pm | Permalink

    Presumably one of the reasons why the founders of successful start-ups and scale-ups sell early is fear of future taxes. Foreign bidders of course fear the same thing, but they may feel that they have ways to get the intellectual property and (if necessary) workforce out of the UK if they have to.

  16. Narrow Shoulders
    Posted November 18, 2020 at 8:36 pm | Permalink

    why is it that foreigners can see them and are piling in with all their money to buy our best ideas, our best companies and our best properties, and why are more British people and British companies not able to do just that?

    Tax advantages Sir John.

    Tax us less and we will be able to invest.

  17. Mike Durrans
    Posted November 18, 2020 at 9:59 pm | Permalink

    Sir

    Whats your opinion of the procurement methods used by our government at the start of the cover emergency. As a retired civil servant I remember the tendering rules. these were not observed by the NHS

  18. George Brooks.
    Posted November 18, 2020 at 10:28 pm | Permalink

    We have a huge amount of talent in this country and as you rightly state Sir John we need to grow it here for our benefit and not sell it abroad. We need to regenerate our wealth and expertise and facilitate it’s growth in this country and not sell it overseas. We have had 40 plus years of it being taken away by the EU and that has to end on December 31st 2020.

    We haven’t had a level ”playing field” since the early 70s so there is no need to waste time discussing the EU’s idea of one in the future as it is full of loop-holes and traps. Let them find out what it is like to trade in a truly competitive market.

    • MikeP
      Posted November 19, 2020 at 12:00 pm | Permalink

      Well done for mentioning the nonsense of the EU’s so-called “Level Playing Field”. Sir John should make more of this as we approach the final stages of the FTA negotiations as we’re starting from such a disadvantageous position, of course EU wish to preserve it.
      So few people (who might otherwise see themselves as eco-friendly) seem to understand the food miles incurred in importing much of what we eat, supermarket shelf-fuls of Dutch tomatoes and Danish bacon for starters, why not grow more here?. Likewise the proportion of goods bought on Amazon and eBay that come from China. We HAVE to start growing and making more stuff here to dramatically reduce the trading deficit.

  19. dixie
    Posted November 19, 2020 at 8:02 am | Permalink

    Certainly the public sector must change it’s attitude to encourage and favour truly indigenous enterprises. So too must the general consumer.

    But what practical options are there that individuals can take regardless of government. My investments are primarily in the UK and outside the EU generating foreign income remitted back to the UK. But, apart from some startups it is not easy to determine what foreign investment there is in a company.

    For decades I have tried to buy UK products and services but this has been very difficult to determine or practice, eg with Utilities.

    Products and services must be clearly labelled to show the domain of manufacture/generation, employment, revenue and control. If these are wholely or predominantly British than they should be clearly marked so the buyer has a simpler way to exercise their preference.

    It would also be interesting to see “true costs” being calculated. Why was Nestle, for example, not required to pay a significant penalty when they broke their word and transferred production.

  20. Colin B
    Posted November 19, 2020 at 10:05 am | Permalink

    Well said Sir John

    I’m surprised at the slightly negative responses by some commentators on this site. It’s so easy to rubbish other people’s ideas and suggest that the UK’s problems cannot be resolved. We need more positivity. Why don’t the detractors offer some of their own ideas ( no doubt these will be excellent )

    1. Businesses have short, medium and long term plans and so should the Govt.
    Sir John has suggested 3 topical subjects – self sufficiency in food ( say, short to medium term ), fisheries ( short term ) and car manufacturing ( medium term plus ) all of which should help towards reducing our balance of payments deficit with the EU, create jobs and pump wealth into the local communities. I’m sure there are many more ideas. I look forward to hearing some.
    2. It’s a cinch by the inch and hard by the yard. It’s as true today as it was 50 years ago. The UK needs a policy and a plan broken down into achievable bite size and deliverable goals.
    3. The civil service is good at producing sound bites and good intentions but then fails on delivery and practicalities. We need fresh faces bringing fresh ideas instead of listening to the same people appointed to numerous committees advocating group policy think. There are too many MPs from the legal profession, we need more business orientated people to provide ideas. Suggest the PM broaden the range of special advisors ( I don’t rate Cummings, the PM needs more than PR spin )
    4. Ensure all UK produce and goods are clearly marked with a Union Jack and UK. These should be prominent and immediately draw the eye. Generally the UK produces quality goods so we should not be afraid to buy British
    5. Better PR from the UK govt to promote UK achievements at home and abroad including plaques on say roads and bridges built in, say, Scotland ( I think this may now be happening ) so that people are aware that our Union is supporting everyone.
    Etc ed We just need a more benevolent PR system. If we are to retain the Union then the devolved nations need to be aware that they have done well out of being in the Union. Do the politicians from the devolved nations take the glory for themselves ? This needs reversing.
    6. Of course we will also have 10+ Free Ports within the next year ( short term part of the plan ). An idea touted back in 2016 and made possible by being out of the EU.

    Really looking forward to your ideas.

  21. Lynn Atkinson
    Posted November 19, 2020 at 4:15 pm | Permalink

    A British friend builds massive warehouses at critical logistical points on the road network. I mean massive, for Amazon etc. Reason he can do it? He lives in Jersey. He would prefer to live on the mainland, but then his business would not have been viable. Nothing to do with genes, all to do with tax.

    • Lifelogic
      Posted November 20, 2020 at 7:24 pm | Permalink

      Indeed he has a competitive tax advantage so he is virtually forced (by the idiotic tax system) to live overseas or just to be out competed by others who do so.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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