Two familiar commentators on this blog, Mike Parr and the person known as Colonel Smithers, spent some of the weekend discussing a Substack by someone called Brian McDonald this weekend. As he noted:
There was a time when London didn't just walk tall — it strutted with the unapologetic arrogance of a city that knew it didn't need to explain itself. A generation ago, it carried the air of a capital of consequence. The money moved like floodwater, the energy was all swagger and edge, and the mood suggested history was always unfolding just out of sight — in a club basement off Soho, or in the whiskey fumes of a Commons bar.
As he then added:
Now the show's still on, but the theatre's crumbling. I was back recently, and what startled me wasn't the decline — decline is rarely news in modern Britain — but how everyone seemed to wear it like an old coat. London today feels like The Rolling Stones: still charging premium prices, still belting out the old hits, but slower on its feet and haunted in the eyes. It used to be a low-rise Manhattan. Now it's mid-tier America with delusions of grandeur.
And then he added:
This isn't just the muttering of the disenchanted. The National Institute of Economic and Social Research, not exactly a den of dramatisers, has put it plain: by the cold arithmetic of living standards and salaries, Britain can no longer count itself a rich country. Productivity has flatlined like a punch-drunk boxer hanging on the ropes. Since 2007, real wages have scraped a meagre 2.2% gain. In the preceding seventeen years, they rose by 42%. Now the average British worker earns £4,000 a year less than if the country had merely kept pace with the Americans. That's not a hiccup — it's a quiet collapse.
From this, he concluded (with a lot of narrative discussion in between):
What stings most is the knowledge that none of this was inevitable. Britain had the tools: the language of commerce, institutions that once inspired envy, cities steeped in the grandeur of empire and the energy of reinvention. But inheritance, like reputation, decays without care. Cultural capital must be spent wisely or not at all. And pride, if it is not matched by upkeep, turns quickly into nostalgia — the last refuge of countries that used to matter.
Reversal will take more than slogans and borrowed optimism. It will demand something rare in Britain now — candour about what's broken, and the courage to face who broke it. Without that, decline won't just be a chapter. It will be the whole story.
So, we asked, "What happened?" Mike did most of the work to provide an answer: we wanted to keep the. money flowing, so we sold the family silver to make it happen. The analysis he created, he admits, with the assistance of an hour refining his AI request, is as follows:
Decade-by-decade snapshot of some of the most economically or culturally significant UK-headquartered firms that have passed into foreign ownership since 1980. The table is not exhaustive, but it pulls together the landmark deals most frequently cited by academics, policymakers and the financial press when discussing the UK's open-door, neoliberal stance on corporate takeovers.
| Decade | UK company (sector) | Foreign acquirer (country) | Deal year | Deal value / strategic note |
| 1980s | Rowntree-Mackintosh (confectionery) | Nestlé (CH) | 1988 | £2.5 bn — then the biggest hostile bid in UK history Wikipedia |
| Plessey (electronics/defence) | GEC-Siemens JV (UK/DE) | 1989 | £1.7 bn split-up; first test of post-Big-Bang takeover rules | |
| 1990s | Asda (retail) | Walmart (US) | 1999 | £6.7 bn — marked US big-box entry into UK grocery Wikipedia |
| Blue Circle Industries (cement) | Lafarge (FR) | 2001* | £3.1 bn; EU's largest cement maker created | |
| British Airports Authority (BAA) | Ferrovial consortium (ES) | 2006* | £10 bn incl. debt; London airports governance flash-point | |
| Scottish Power | Iberdrola (Spain) | 1997 | ? | |
| 2000s | Pilkington (glass) | Nippon Sheet Glass (JP) | 2006 | £2.2 bn; FTSE stalwart leaves LSE Wikipedia |
| Hanson (building materials) | HeidelbergCement (DE) | 2007 | £8 bn; removed final FTSE-100 “aggregates” major | |
| Gallaher Group (tobacco) | Japan Tobacco (JP) | 2007 | £9 bn; UK's last big independent tobacco firm | |
| Jaguar & Land Rover (automotive) | Tata Motors (IN) | 2008 | $2.3 bn; icon brands shift to emerging-market owner Wikipedia | |
| Cadbury (confectionery) | Kraft (US) → Mondelez | 2010 | £11.5 bn; sparked “Cadbury law” debate on takeovers Wikipedia | |
| 2010s | ARM Holdings (semiconductors) | SoftBank (JP) | 2016 | $32 bn — biggest European tech deal to date Wikipedia |
| NEX Group (inter-dealer broker) | CME Group (US) | 2018 | $5.5 bn; City trading infrastructure ceded | |
| Cobham (defence) | Advent Int'l (US PE) | 2020 | £4 bn; MoD “national security” scrutiny but approved | |
| BOC (industrial gases) | Linde (DE) | 2006* | £8.2 bn; UK chemicals champion absorbed | |
| 2020s | British Steel (metals) | Jingye (CN) | 2020 | Nominal £50 m + capex; insolvency rescue with geo-political undertones |
| Ultra Electronics (defence) | Advent / Cobham (US/UK) | 2022 | £2.6 bn; sensitive sonar and cryptography assets | |
| Meggitt (aerospace) | Parker-Hannifin (US) | 2023 | £6.3 bn; approved after jobs undertakings | |
| Alphawave IP (chips) | Qualcomm (US) | 2025 | £1.8 bn; LSE-listed fab-less designer exits The Guardian | |
| DS Smith (packaging) | International Paper (US) | 2025 | £5.8 bn; completed after EU divestiture remedies Reuters | |
| Britvic (soft drinks) | Carlsberg (DK) | 2025 | £3.1 bn agreed; still in UK regulatory review |
Patterns that emerge from 45 years of “open-door” policy
- Sector spread widens over time
- 1980s–90s: iconic consumer brands (Rowntree, Asda) and former state assets (BAA, Blue Circle).
- 2000s: heavy industry and basic materials (Pilkington, Hanson) as global consolidation accelerates.
- 2010s–20s: high-tech (ARM, Alphawave), critical infrastructure (NEX, Ultra) and climate-linked sectors (DS Smith).
- Shift from trade buyers to global PE & sovereign capital
The early period is dominated by strategic corporates (Nestlé, Lafarge). Post-2000, cash-rich private-equity and sovereign-backed vehicles (SoftBank Vision Fund, Advent) play a far larger role, reflecting abundant global liquidity and UK rules that rarely substitute industrial for shareholder interest tests. - Sterling depreciation amplifies vulnerability
Step-changes after 1992 ERM exit, 2008 GFC, and 2016 Brexit vote each coincided with spikes in inbound bids as UK assets appeared “on sale” in FX-adjusted terms. - Regulatory posture: light-touch but reactive
Only defence and some telecom assets triggered national-security interventions (e.g., GKN-Melrose 2018, NVIDIA–ARM 2020-22 aborted). Otherwise, the UK's Competition & Markets Authority focuses narrowly on consumer-price effects, not long-term industrial capacity.
Econometric angle
Econometric studies of UK M&A flows (e.g., ONS M&A bulletins and UNCTAD FDI data) typically show:
- Stock of inward FDI rising from <15 % of GDP in 1980 to ≈70 % by 2024, far above G7 peers.
- Foreign ownership share of FTSE-100 market cap climbing from ~7 % (1981) to >55 % (2025).
- Event-study evidence: announcement-day abnormal returns are positive for target shareholders but long-run performance of the combined entity is mixed, especially where HQ functions and R&D migrate abroad (Cadbury, Cobham cases).
These patterns are broadly consistent with the thesis that the UK's neoliberal regime treated market for corporate control as a disciplining device—favouring allocative efficiency and shareholder value—over strategic industrial policy.
Point 1: Sectoral Shift — From Iconic Brands to Strategic Infrastructure and Tech
1980s–1990s: Consumer-facing & post-privatisation targets
- Dominated by household-name brands and former state or quasi-public firms.
- Typical targets:
- Rowntree, Cadbury, Asda – recognisable, stable cash-flow consumer goods and retail.
- Plessey, BAA, Blue Circle, BOC – high fixed-asset base, often originating from UK industrial or defence legacy.
- Drivers:
- Big Bang (1986) liberalisation made UK firms easier to acquire.
- Deregulation and Thatcherite privatisations created a pool of exposed, under-defended firms.
2000s–2010s: Global consolidation in materials, finance, and defence
- Shift to basic materials and heavy industrials:
- Hanson, Pilkington, Gallaher absorbed into larger global supply chains.
- Financial market infrastructure also becomes vulnerable:
- NEX Group, key to City trading platforms, sold to CME (US).
- Defence sector starts to splinter:
- Cobham, Ultra, Meggitt sold piecemeal, sometimes with light national-security review but rarely blocked.
2020s: Strategic tech, climate-aligned sectors, and AI-adjacent infrastructure
- Growing number of deals in:
- Semiconductors and IP (ARM, Alphawave).
- Green packaging (DS Smith).
- AI hardware (Oxford Ionics).
- These deals raise strategic and technological sovereignty concerns, not just market-structure ones.
Implication: UK's open takeover regime has made it a testbed for sectoral transition—from tangible consumer and industrial assets to high-IP, high-skill, and critical-infrastructure firms. But each wave has occurred without strong industrial-policy filters.
Point 2: From Trade Buyers to Global Capital Pools (PE, Sovereign, Pension)
Pre-2000s: Trade buyers dominate
- Most acquirers were foreign multinationals with operational synergies:
- Nestlé (Rowntree)
- Kraft (Cadbury)
- Lafarge (Blue Circle)
- The logic: expand market share or vertical integration.
Post-2000s: Rise of financial capital as buyer-of-last-resort
- Private equity becomes a main actor:
- Advent: Cobham, Ultra, Meggitt (via Cobham)
- CVC, Blackstone, KKR often seen circling UK assets.
- Sovereign wealth funds and large pension investors increasingly fund these deals:
- Canada's PSP Investments (AGS Airports)
- UAE's Mubadala, Singapore's GIC active in healthcare, data centres, infrastructure.
- Many acquisitions structured via tax-efficient offshore vehicles, obscuring ultimate control and national benefit.
ARM case is paradigmatic: acquired by SoftBank (Japan) using its Vision Fund, capitalised by Saudi PIF, Abu Dhabi Mubadala, Apple, and Qualcomm.
Key trend: Even where trade buyers are nominally involved, ownership is increasingly financialised. Control is in the hands of capital allocators, not industrial planners.
Where this fits econometrically
The shift from trade to financial buyers allows for interesting regressions:
| Hypothesis | Proxy variable |
| Financialised buyers reduce domestic R&D spend | Increase in R&D as % of revenue post-deal |
| PE-backed acquisitions increase leverage and asset stripping | Change in debt/equity ratio, increase capex |
| Sovereign-led deals lead to offshore IP migration | Post-deal intangible asset growth vs onshore tax reporting |
Conclusion
Let me offer my conclusions, which, I stress, are my opinion alone.
As Brian McDonald suggested, this outcome was not inevitable, so there are a number of conclusions to be drawn from this.
Firstly, and most obviously, the arrival of global capital markets resulted, in the case of the UK, in a for sale sign being put up over British companies in a way that never really happened to the same extent anywhere else. The UK‘s industrial strategy changed from one of building and sustaining British industry, even if not always terribly effectively, to one of flogging whatever we had to the highest possible bidder, wherever they came from and whatever their long-term plans might be. The antipathy of the Tories in the 1980s towards anything to do with industry, tainted as it was by the hatred for anything that had at one time been nationalised, fuelled this whole policy of sale at any price, which found its obvious mirror in privatisation policy.
Simultaneously, there was a shift from a policy of industrial engineering to one of financial engineering. Again, the blame can be fairly laid at Thatcher's door. She heralded the Big Bang in the City of London in 1986, and the idea that this was where money was really to be made. It is now very hard to recall just how insignificant financial corporations once were in the UK economic environment. Certainly, there were banks in the FTSE 100, but the dominance of such entities in the way we have become accustomed to during the present century was simply unknown at that time. Wheeling and dealing in financial markets became the financial norm, and this is all too apparent in the deals noted above. If there was a short-term buck to be made, the market took it.
Thirdly, and perhaps most importantly, nothing has changed. Rachel Reeves described the City of London as the jewel in the UK economic crown quite recently, and with her newly announced concierge service for foreign investors in the UK, it's still clear that she believes that selling off whatever it is that we can find to put a price tag on is what UK industrial policy is really all about.
Fourthly, we should not forget the role of so-called professional services firms during the course of this period. These firms began to appear in tax havens in significant numbers from the 1960s onwards, but the scale of operations there was decidedly limited at that time compared to that which was seen after Thatcher liberated financial flows to these places from 1980 onwards. The UK would like to claim that it has the most sophisticated firms able to assist with international financial deals. However, the reality is that these firms operate in a way that shows absolutely no loyalty whatsoever to the UK. Their persistent willingness to structure offshore deals has always made that clear. There is no other financial market where anything remotely similar takes place. There is good reason to ask whether these firms have really added value to the UK economy as a consequence.
Lastly, and this issue cannot be avoided, consideration has to be given to the UK's class-ridden society. Whilst many people, including those who aspire to be, and even are, wealthy, might now be considered to be “in trade", the truth is that there is "trade", and then there are what some might like to think of as “gentle people's professions". These are things like investment banking, banking itself, city trading, accountancy, law, and so on. It is to these occupations that the most talented, or at least most expensively educated, in the UK have been drawn, because they have offered the greatest short-term rewards. That denial of talent to UK industry has left it desperately short of vision, strategy, and direction, and so ultimately has left it wide open to take over, which is what happened. Again, there is no other society where something so obviously disadvantageous to value creation has taken place.
The result is obvious. As Brian McDonald suggests, the decline of England was not inevitable, but the willingness of those with the greatest influence within it to sell it both short and to literally sell it out has made it so. That is what the English ruling class did for it. We are all paying the consequences of them having sold England by the pound, as Genesis once described it.
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Off the top of my head, please forgive me if I’m wrong, since WW1 didn’t the UK invent:
– the jet engine
– the hovercraft
– VTOL
– split the atom
– make their own nuclear program
And no doubt a heck of a lot more. What happened!
We sold out
That’s it
That’s the whole point
We have always sold out
I don’t disagree with you, but it has just come to mind from when I worked in science how well thought of our researchers were. I was amazed when dealing with top level US and European academics how revered our scientists were and how much they wanted to work with us. This was sadly pre Cameron and I remember our Friday post election morning coffee discussion was gloomy as we knew a Tory government was not good for science funding. And at the time we had no idea how bad given I mainly worked on EU funded projects.
much of this was funded by the state
and the world wide web was developed at CERN
I have heard that the City don’t give enough backing to these sort of projects preferring ‘safer’ projects.
This is important as it is an untold story of Britain’s decline.
All this did start though BEFORE Thatcher – Adam Curtis’ ‘The Mayfair Set’ goes into a lot of detail about this. Harold Wilson’s stewardship was no better really as the carpet baggers from U.S and Australia came on the scene using the market to snaffle up old firms and asset strip them (my father’s workplace suffered this fate in 1974).
What I would say though is that Thatcher accelerated it – her government for example did not understand bridging loans in the business cycle and instead of encouraging modernisation, they left business to go down the toilet as their monetarist obsession with interest rates destroyed home grown firms.
As you point out, industry was destroyed by union jack waving dogma – the Tories always hated the country in my view. The Monopolies & Mergers Commission did not do its job, and the more recent CMA is set up to fail as well.
What a waste. Sure, there will be an immediate boost to GDP as assets are sold off – but it is a one way street, and you have to keep asset stripping to keep feeding the appearance that it is working until nothing is left. Not even Harold Wilson – an Oxford Don – seemed to be able to grasp this.
It is still shocking that this has happened.
Thank you, PSR.
You are right to highlight The Mayfair Set. One of the set, Sir James Goldsmith, or to give him his full name at birth, James Goldsmith-Rothschild is a cousin of the eponymous banking family. His children still own a small stake in the firm by way of an investment vehicle called Cavenham, named after their former estate in Suffolk. In the 1980s, NM Rothschild was a key adviser on the privatisations, an experience it marketed overseas later, including France once the family got their banking licence back.
If I may add.
The harbinger of what happened (1980s – now) was the asset-strippers of the 1960s and 1970s. John “pretty thing” Bentley & his ilk. Identifying companies whose asset value was much greater than its share price. There was also a total failure to invest in manufacturing equipment – motorcycles being an classic case – Brits stuck in vertically split crankcase territory vs Japanese precision die casting (faster/cheaper & multi-cylinder). Stamping/die-casting was a Japanese speciality – hence their dominance of VCRs (mechadeck was precision stamped).
Not listed, for example, Lancer-Boss, UK fork-lift truck manufacturer headed by two former horse guards officers. They took a pop @ the German company Jugenheinrich – failed and then got taken over by the same. Shortly afterwards, the head of the German company went around the Lancer-Boss manufacturing site & talked with the workers. Comment by worker “first time that has ever happened”. Thus UK companies were structurally weak both in terms of investment and management. The tech was not lacking: UK – Optical communications systems – Uk a leader in 1981 e.g. STL & STC – all gone (BT was ready to convert the entirety of the Uk telephone network to fibre in 1989 – Thatcher said no).
Point: UK industrial and commercial weaknesses go very deep, the various takeovers were based on neoliberal ideology:
“UK’s neoliberal regime treated market for corporate control as a disciplining device—favouring allocative efficiency and shareholder value—over strategic industrial policy.”
There has never been a UK industrial strategy i.e. a e.g. 16 page doc. LINO claim to have produced one, it is 160 pages long. That is a shopping list, not a strategy. the funny thing is – the evidence of failure is all around us, public, easily accessible, easily understandable and as the blog notes, fixable. This begs the question: why has it not been fixed?
Because it has not suited the wealthy to change anything. They still think there is silver to sell. Reeves is encouraging them to do so.
Thank you, Mike.
Further to the fibre network, readers may be interested in: https://www.techradar.com/news/world-of-tech/how-the-uk-lost-the-broadband-race-in-1990-1224784. Please add how the MSM, led by the BBC, mocked Corbyn’s plan for free broadband as communism: https://www.opendemocracy.net/en/oureconomy/broadband-communism-outside-the-uk-public-broadband-is-a-raving-success/.
One can also add Thatcher’s cancellation of a UKwide water grid, so that the water authorities could be privatised with no debt.
Did that grocer’s daughter know or learn anything? At Oxford, she was renowned for not studying, but chasing after rich men and Tory safe seats.
See also Britoil in the UK, sold for a fast buck in the 1980s (Thatcher again) and Statoil, Norway which retained a controlling interest with an oil fund now worth over £2trillion.
My pleasure old chap. I
Irish guy in the Commission – DG CNECT pursuaded the then Irish commissioner that what Ireland needed was fibre – both in towns/cities and in rural areas & lo it came to pass. Same Irish guy noted that that if BT tore out all its copper and replaced with fibre AND sold the copper for scrap – it would make a profit………..& lo it didn’t.
Meanwhile on the borders of Yorkshire/Cumbria/Lancashire there is … community communistic fibre broadband (to 14,000 coummunistic familes) all at 1GBit/sec bi-directional and no contention (B4RN) – organised by amongst others by a communistic farms wife.
Bloody communists – come the revolution we will burn them all on Pendle hill.
I will leave gentle readers to identify the irony.
For those that have read Tom Sharpe’s “The Throwback” the UK/England reminds me of the Colonel and the cheese grater (took me nearly 30 mins to read past that page – weeping & howling with laughter).
You do know Quakerism is considered to have begun on Pendle Hill, don’t you?
quick +1 for B4RN. It’s not as fast as advertised, but its a lot better than what we used to get down the phone line! And I got to dig the (admittedly not very deep) trench to the front of the house and learnt how they blow the fibre in to get it all working, which was an education.
This is a splendid effort-well done to all concerned.
IMHO a lot of people have sensed this but have not the information to prove it.
Is it possible to get this reported by the media or given to the political parties? Their membership will be more interested than the leadership I suspect.
The media’s view is if it has been seen anywhere else it is not newsworthy
Thank you, Ian.
There’s more to come. Stay tuned.
you have cheered me up, colonel
thank you.
“There was a time when London didn’t just walk tall — it strutted with the unapologetic arrogance of a city that knew it didn’t need to explain itself. A generation ago, it carried the air of a capital of consequence. The money moved like floodwater”
The crumbling would have happened so much quicker – by about 50+ years – for London as England (England as Britain/the UK) without Scotland’s resources. It was on its uppers in the 70s then oil and gas was discovered in Scotland’s North Sea and London lived it up on the wealth Scotland created.
It built all those ugly skyscrapers to house the wide boys moving other people’s money around. Whilst all that skyscraper building was ongoing and Londoners were “strutting with unapologetic arrogance” Scots were living in dire poverty. We had the oil and gas, London got the wealth.
London stole someone else’s resources – Scotland-produced electricity now added to the oil and gas (and no doubt eyeing up our water) – and spaffed it on pomp, ceremony and finery for the privileged few. Looks like the free resources from the wee country over the border isn’t enough to fill England’s voracious appetite any more – a country run by a bunch of incompetent, clueless village idiots.
England – all fur coat and no knickers.
Don’t expect sympathy from Scotland. It couldn’t be happening to better bloodsuckers.
Accepted
Many thanks for this. It will prove very useful for my partner who is presently explaining to hardcore Unionists over on Slugger O’Toole, why Ireland’s reunification will deliver better economic and socially democratic prospects for people living in the north, rather than remaining politically shackled to a financial UK revenant.
Glad to be of use
Thank you for working our exchange into a post and the shout out, Richard, and to Mike for the research.
Not only do I agree with what the blogger wrote, but his way of writing is particular appropriate and resonates.
I will write more later. In the meantime, readers may like to read https://unherd.com/2025/07/rachel-reeves-has-nowhere-to-go/ in conjunction.
It would be helpful if the likes of Steves Keen and Hall, David Edgerton and Prem Sikka, Richard’s friend, were made aware. They have written about the same. It would also be helpful if the new team Corbyn, especially now that John MacDonnell is not involved, was made aware.
I have sent this to Prem.
I am seeing Steve on Monday.
Thank you, Richard.
I have shared with my network, too.
More grist: https://yorkshirebylines.co.uk/politics/the-state-for-sale-how-britain-privatised-itself-into-failure/.
I worked with officials, ministers and their shadows from 2008 – 16 and, again from 2023 – 4. What alarms me is how few, if any, understand what this post is about. I don’t think they are interested, either. Far too many see the civil service and politics as a stepping stone to a far more lucrative gig, something that has gone on a generation, and act accordingly, enabling, often US, Big Finance’s take over of the British state and falling for that nonsense that Big Finance knows everything. Most banksters only know and are interested in rent extraction. They have no idea about running a business or the difference between a state and a household and the national interest.
Noted
That is a good article in Yorkshire Bylines…
I worked in the City’s financial markets for most of my paid working life then later being called into ministry. From those years working with ‘money’ and subsequent reflection on the theology of money I offer that those working with the myth that they can create money out of nothing begin to believe they are god-like in the sense that God created out of nothing. From those who do (and it was by no means everyone), the rest of their entitled sense of self seemed to flow from that. As one of my tutors at theological college, the late Professor John Hull, would volubly express, ‘Curse the money god!’
Thanks, Peter.
I missed the Parr-Smithers debate. McDonald’s piece is about Britain, with one reference to ‘England’ only, and in reference to London. Curiously, Richard you end by discussing England.
Scotland is not immune. Scotland lost almost all its corporate substance long, long ago; filleted by London financial markets decades ago (some of the corporates you list as British, and now foreign owned, began as major Scottish businesses and were removed – cleaned out – completely from Scotland, for short-term financial benefit to London many years ago). Scotland is probably the only oil rich country that extracted no political or economic benefit from oil, outside Aberdeen (only because London couldn’t move it elsewhere). Westminster did the next best thing; it manipulated the territorial waters to transfer oil from Scotland to a virtual reality, and shifted the UK territorial boundaries, simply to extract as much as they could from Scotland; through the Scottish Adjacent Waters Boundary Order of 1999; and the Territorial Sea Act, 1987 that established “the baselines from which the breadth of that territorial sea is to be measured shall for all purposes be those established by Her Majesty by Order in Council”. Scotland? Cleaned out again.
Then there was Big Bang: the deregulation of financial markets and the LSE in 1986. It demolished the agreements and boundaries that preserved the independence of the Scottish Banks, that over three hundred years had built for Scotland a distinct reputation for banking integrity. To survive after Big Bang, the Scottish banks were faced with a stark, unwinnable choice: predators or prey? In the deregulated mayhem that followed, and the weight of money and strange ‘standards’; London proved only that it could turn absolutely everyone who entered is market place, into the uniform, feral exchange alleycats from which the City had first emerged. The Financial Crash, 2007-8 was inevitable; it had happened so often before, a hallmark of London. Scottish Banking thereafter? It doesn’t exist. Cleaned out, again.
Need I go on? It is a sorry tale, repeated and recycled, over and over again. Oddly the Scots voters keep listening to the very people who profit most in their midst; from selling them out.
John
The references were almost entirely to London, and you pretty much reiterate the relevance of that. Hence my observation.
Richard
Thank you, John.
I was hoping that you would pipe up.
There is a lot of meat in Richard’s synthesis of the Parr-Smithers-McDonald theses. The themes it presents are in many ways a better way of examining the entrails of Britain’s economic predicament (an abrupt, precipitant acceleration of Britain’s long term decline over the last fifteen years); than the microtised-macroeconomic confusion of conventional economics; a dogmatic neoliberal prescription that could only produce the repetitive delivery of the abject failure we have suffered, and keep repeating without end.
Thanks
Here is an insight into how the standard microtised-macroeconomic neoliberal, fiscal rule regime actually works. Faced with the total and obvious failure of the fiscal rules, Rachel Reeves will blithely insist she is keeping to the rigour of the unchanging fiscal rules. But having painted herself into a hopeless corner with the fiscal rules, and nowhere to go; where does she go?
Here you are, you do the opposite and claim you are doing the same thing (Sky News today): “But when the government announced its fiscal rules in October, it actually published a 19-page document – a ‘charter’ – alongside this. And this contains all sorts of notes and caveats. And it’s slightly unclear which are subject to the ‘iron clad’ promise – and which aren’t. There’s one part of that document coming into focus – with sources telling me that it could get changed. And it’s this – a little-known buffer built into the rules. It’s outlined in paragraph 3.6 on page four of the Charter for Budget Responsibility. This says that from spring 2027, if the OBR forecasts that she still actually has a deficit of up to 0.5% of GDP in three years, she will still be judged to be within the rules. In other words, if in spring 2027 she’s judged to have missed her fiscal rules by perhaps as much as £15bn, that’s fine. Now there’s a caveat – this exemption only applies, providing at the following budget the chancellor reduces that deficit back to zero” (Sky News, ‘Is there £15bn of wiggle room in Rachel Reeves’s fiscal rules?’).
Iron clad promises? Labour? And Sky News thinks there is a caveat? Here is how the caveat will actually work in Starmer-Reeves Neoliberal Land. Some months before the 2027 Budget, Reeves will publish a new fiscal rules Charter. The Charter will shunt the caveat out to 2028. Rinse and repeat. It really is that simple. Critics? What critics?
Why not acknowledge the starkly obvious abject failure of the fiscal rules to achieve anything at all, other than the strangulation of the economy, the impoverishment for millions, and investment-starved disintegration of Britain’s infrastructure? Why continue with proven failure in such a cynical and epically stupid way? Because doing it this way, the Treasury can keep the Household Budget mantra intact; the fiscal rules go on dictating everyone’s life prospects; and means there is no need to invest in infrastructure and growth; and the Treasury can keep saying there is no money; and the decline just goes on and on, and the Treasury will keep saying, there is no other way. And we will continue to sink into nothingness.
Thanks, John.
History suggests that your forecast is highly likely to be accurate.
Thank you, John.
The industrial provinces fared little better and still don’t, as per: https://www.nakedcapitalism.com/2025/07/what-does-birminghams-four-month-bin-strike-say-about-the-state-of-britain-today.html. Please scroll down for a tidbit from me when out of moderation.
Excellent work from Mike and “the Colonel”, Richard. Thanks to them. Also your comments.
Speaking from experience, I’d add another industry to their list – and a very significant one at that: RAILWAYS – and all that goes with them.
I was fortunate enough to work on the railway as a young man – out of Derby Four Shed – which is right next door to the carriage works, and what used to be loco repair sheds and the BR development centre, where the APT (the tilting train) and the Inter City 125 diesels were develop. I had friends who started as apprentices in those places. And at the time – and as had historically been the case – we led the world in railway engineering of all kinds.
But British Rail was hated – especially by Tory governments – and so nothing that was ever done was good enough to warrant supporting any of BR’s activities. And believe me, those who worked on the railway knew it (as I’d later learn was also the case for miners – though for more obvious reasons) – despite the fact that like many people who worked for BR I was so chuffed the first time I saw the APT (after it has been out for a test run, so it had all the testing gear attached), and seeing gleaming, new, 125’s emerge from the huge engine sheds.
But none of it was enough. “Nothing to be proud of here”. Old, dirty, industry, and so after BR was privatised it was all gradually sold off, with the best bits being cherry picked/asset stripped. And over the years what’s a refrain we constantly hear if you live in the Derby, Nottingham, Leicester triangle – ‘the carriage works at Derby are under threat (again)’ – for a small portion of the work their did survive, but always owned by an overseas company (Alstom – French). And we constantly hear that the government can’t make up it’s mind whether to buy new rolling stock from Hitachi or any other company, and that it’s not an easy choice because of the rolling stock leasing companies (ah yes, rentiers).
So that’s one thing to add – but something I think is emblematic of what Mike and “the Colonel” have exposed.
The second thing to mention, which follows on from your mention of “class”, is our almost complete dismissal in our HE system of the importance of vocational qualifications. To illustrate the point, I was fortunate enough in my academic career to work with Dutch, German and Danish colleagues and spend time in their countries (particularly in the Netherlands), and I can tell you that when we discussed how our various education systems worked they were astonished (and that’s not an overstatement) to learn that the country that had given the world the industrial revolution and led with some many engineering marvels had reduced education in related disciplines (of which there are many) to being taught as “further education” – i.e. not up to the level of HE (university), or, if at university, not “sexy” at all.
And so despite years of pushing the importance of STEM (science, technology, engineering and maths) – which I know has made a difference (disclaimer – although a “social scientist” I spent my 18 years at the OU working in a STEM faculty) – the die was set, attitudes had changed, and culturally, too the country had moved on. And getting back what has been lost is never going to be easy, particularly when you have governments constantly moving the higher education goalposts.
So I agree entirely with Brian McDonald’s conclusion about what needs to happen. Indeed your blog – and many of the commentors to it – sing this song constantly.
But do we see a government – not this one or any previous one – do anything about it, bu ACTUALLY ACCEPTING THE DEPTH AND NATURE OF THE PROBLEMS – no. Because the UK has become the rentier capital of the world, the home of neo-feudalism, and so on.
But we do lead the world in one thing, oh yes!. The race to the bottom of the pit that neoliberalism has dug for us. And in that regard we only ever run faster, because, by God, we’re going to win that race.
So much to afree with.
And, thank you.
Thank you, Ivan.
Some years ago, my parents and I travelled from Florence to Venice and back by high speed train, Frecciarosa. The train technology used in Italy was snapped up from British Rail. It’s also the technology used by Russian Railways, who used Italian railway technology, an industrial relationship going back to the 1960s.
Your mention of the railways reminds me of water privatisation. Hundreds of thousands of acres were sold on the cheap when the railways and water authorities were privatised. Not only did that deprive the state of assets, but also make it more difficult to build houses and restore the environment.
There should be a reckoning.
Fascinating analysis, well done Mike and the Colonel.
Much of the quoted US gain over the last 17 years will have come from the rise in dominance of the tech companies. Britain has thrown away its presence; the loss of ARM to the Japanese and now the Americans is documented, but it also had a leading position in AI with Deepmind which was snaffled up by Google. I suspect that other innovative companies were taken over earlier in their lifecycle, with similar loss of intellectual property and economic potential to the Americans.
What is the point of the much-vaunted financial sector if it cannot finance these sorts of businesses?
Ref all the complements – thanks. (to you & Mr Warren)
I have done a follow on – sorry to say it gets worse not better.
All is not lost on A.I.
I have an interesting project trundling along that is not dependent on LLMs & could be a step forward in what I would broadly call system forecasting and control.
The events in Spain in April (no elec power) show that there is a need in this area and perhaps the UK could act.
I was extremely amused by a piece in the Daily Telegraph:
“Britain is at risk of losing one of the qualities that once made it great, writes Daniel Hannan. “Social capital” – the glue that built a high-trust society and made Britain the envy of the world – is slipping away. With shoplifting now endemic and litter piling up in city centres, we are watching that quiet strength disappear.”
The Telegraph’s all-time heroine Thatcher stated that ‘there is no such thing as society’ as she laid waste to the country. If there is no such thing as society, how can there be any such thing as social capital? Or are they actually admitting that Thatcherism is behind Britain losing such a quality? Big if true. However highly unlikely they would agree, logic is not a strong point of neoliberalism.
Please consider the wealth generated by the working population who prefer to put money into property,either as landlords or sitting watching house prices rise.
This adds nothing to the “productive”economy other than objecting to new builds so allowing prices to stay high and young people locked out renting.
Noted
This will be touched on in the wealth series of videos.
Is it reversible?
Yes, but it would take direction from the top and Reeves will not be providing that tonight
She will be pandering to the City instead
More of the saame then.
UK pension funds have been absolutely complicit in this process, in the pursuit of their “fiduciary duty”. The legal.basis of pension funds needs a thorough re-think. Share Action’s campaign to redefine fiduciary duty by way of an amendment to the Pension Schemes Bill looks like a step in the right direction although even if it successful it remains to be seen whether it will have any significant impact.
Agreed
Very good piece of work – thanks to all concerned. @BBC and govt. routinely refer to ‘British’ industry when talking about car , steel production etc. thus providing little insight or reminders to the audience.
‘The Vassal State’ by Angus Hanton – presumably also relevant.
[…] Selling England by the pound Richard Murphy (Colonel Smithers) […]
The thread set to music by Show of Hands
https://www.youtube.com/watch?v=8rOKJ3mCJAE
That was a delicious musical message of truth. The mandolin player was pure liquid gold. Thanks for posting it.
Also the under reported Freeports / Special zones https://x.com/EuropeanPowell/status/1945050414468018677
I’d like to make a big shoutout for Brian McDonald’s substack. Hid writing style is a pleasure to read, and he is very good on the US/NATO proxy war in Ukraine.
Noted
Not forgetting road haulage. I worked for BRITISH ROAD SERVICES, the nationalised sector of road transport. Two divisions, haulage and parcels. The haulage sector was eventually privatised and became Exel Logistics (fancy new name in the 1980’s), which was eventually acquired by DHL (owned by Deutchespost). The parcels division merged with National Carriers (old BRITISH RAIL carriers) and eventually was privatised as Lynx Express, later purchased by the giant US carrier UPS. The same has happened to many, I would say most, of our private hauliers too, including Eddie Stobart, all now owned by huge foreign multinationals like XPO (US) and Culina (German).
Thanks
And yes, easy to overlook
[…] Yesterday, I described this as an economy that always sells us out to the highest bidder, because that is exactly what it is. And meanwhile, Reeves is apparently completely closed to the idea that economic policy might serve anything other than the interests of finance. […]
Neoliberalism is a pseudo religion. One of its most deeply held tenets being that the financial marketplace is always right. That a few social blood sacrifices are perpetrated in its righteous name is simply how their ‘real’ world works. You can never persuade an individual of deep religious faith that theirs is a false god.
Thank you Richard for providing the space for this illuminating debate and to the contributors for sharing their invaluable insights. You have created an amazing community here, which you hint is to be augmented by other powerful networks. You give me hope that a change in direction might just be possible. I hope for the sake of all the financially oppressed in this country that is so. And I’m pleased to see that the insidious development of SEZs and Freeports might be brought into the discussion.
I just heard Richard on the radio trashing the BBC and standing up for Scotland.. Had to say well done Richard. We must get a tartan and clan for you! As we say in the east end o’ Glesga..yer braw!
Cathy
For Scotland and her weans! ( an’ Richard Murphy)
Thanks..