Jeremy Corbyn has accused the government of putting the profits of speculators before the interests of staff at one of Britain’s oldest engineering firms, which is the object of a hostile takeover deal that has been labelled an “abuse of capitalism”.
On Thursday, shareholders in GKN, which made cannonballs for Waterloo and Spitfires for the second world war, voted to accept an £8.1bn offer from Melrose, a firm that specialises in turning round failing companies and selling them on at a profit, and which has been labelled an “asset stripper”.
Some of GKN’s shareholders had only bought into the company a few days before backing the takeover, provoking the Labour leader to call them speculators looking to make fast cash out of the deal.
“The Tories have put the interests of city speculators over people’s jobs. Labour would have stopped the takeover of GKN and, in government, we’ll make our economy work for the many, not the few,” Corbyn said.
Referring to the front page of Friday’s Daily Mail, which called the deal an “abuse of capitalism”, he added: “You know things are bad when the Daily Mail calls out a rigged economic system.”
Jeremy Corbyn (@jeremycorbyn)
You know things are bad when the Daily Mail calls out a rigged economic system.
The Tories have put the interests of city speculators over people’s jobs.
Labour would have stopped the takeover of GKN and in government we’ll make our economy work for the many, not the few. pic.twitter.com/J8U7rmK9BI
March 29, 2018
There were calls for the government to block the deal on national security grounds because of GKN’s status as a defence contractor, including from Labour’s shadow business secretary, Rebecca Long-Bailey, who wrote to the minister Greg Clark on Friday.
“This deal from its inception in January of this year has raised issues of national security. These have been recognised across political parties, by trade unions and other commentators,” she wrote, in a letter seen by the Guardian.
“Amongst the concerns are the fact that defence contracts are long-term and are undermined by the short-term business model pursued by Melrose, the potential break-up of the business and the loss of jobs and skills.”
On Friday morning, Clark acknowledged he had a statutory duty under the Enterprise Act 2002 to consider the national security implications of the deal, but refused to preempt the deliberations. He told BBC Radio 4’s Today’s programme the assessment needed to be carried out “properly and thoroughly”.
Addressing concerns that the takeover had been waved through by speculators, Clark said: “Those shareholders that bought their shares very recently of course bought them from other shareholders that chose not in effect to back the continuing management.”
He said the government’s approach, as set out in its industrial strategy, was non-protectionist.