By Alex Brummer
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George Osborne and the Treasury now have the first opportunity to draw a line in the sand over overseas ownership of the nation’s infrastructure.
After the debacle of Ferrovial’s ownership of BAA and foreign control over four of our big six infrastructure companies, the Government looks ready to use its veto power.
The asset in question is Britain’s air traffic control authority that is currently owned 49 per cent by the Government, 4 per cent by BAA, and the rest by a consortium of carriers including BA and Virgin.
Veto: George Osborne has the opportunity to draw a line in the sand over overseas ownership of the nation's infrastructure
NATS, which employs 5,000 people, provides air traffic control services for planes flying in British airspace and a large part of the North Atlantic. As such it is clearly of both strategic and commercial interest to the UK.
Whoever owns the control towers can also play a big role in prioritising flight patterns to suit their own interests.
The Government indicated in the March Budget that it was looking to raise money from selling NATS, which has been valued at around £1bn. NM Rothschild, that did many of the privatisations in the Thatcher era, is handling the sale.
Once again, most of the inter est in buying the asset is coming from overseas with the German state owned traffic controller DFS thought to be among the lead contenders. It would not be the first time that privatised assets have fallen back into state hands.
The electricity giant EDF â€" that is developing our nuclear future â€" is majority owned by the French government and state controlled Deutsche Bahn is running trains and some London buses.
It is not surprising that DFS is interested. Control would give it enormous power over the Northern European and Atlantic skies distorting competition among flag carriers.
The Government is right to be cool and must now gird its loins and be similarly robust when it comes to rejecting overseas interest in the Royal Mail.
Spring back
As the Shareholder Spring has erupted, a new trend has developed: the pre-emptive pay cut. This device is being used to keep potentially hostile institutional investors at bay. The latest recruit to the trend is Ian Livingston of BT.
After collecting a whopping £7.75m remuneration package for the last financial year, when admittedly BT put in a stellar performance, Livingston is making a supreme sacrif ice and will forgo a pay increase next year. How precisely that is defined is not clear.
Andrew Moss of Aviva clearly thought that waiving his modest pay rise would be enough to save his job. But it didn’t, largely because Aviva, unlike BT, has not been doing an especially good job.
Barclays’ efforts to redraw Bob Diamond’s bonus at Barclays did nothing to quell the anger over the company’s decision to settle his £5.7m American tax bill.
As a result of the uprising, pay committee chairman Alison Carnwath was cast as the villain of the piece and there is a City view, not entirely quelled, that chairman Marcus Agius â€" the person ultimately responsible for signing off the chief executive’s pay â€" may end up taking the blame.
At Royal Bank of Scotland, Stephen Hester came within a whisker of resigning when it became obvious that the taxpayers would not go along with his bonus.
He swallowed it but not witho ut a great deal of heart searching. And Antonio Horta-Osorio of Lloyds Banking Group was sensible enough to recognise that after a longish absence through sleep deprivation was not necessarily the right background for a bonus.
Tesco plainly saw trouble coming and Phil Clarke waived his potential £372,000 bonus. All of these gestures may seem laudable and show that investor pressure is working. But no one should be lulled into thinking the problem of fat-cat pay is solved.
The sums foregone are generally tiny as a proportion of total remuneration. Still to be addressed are the weakness of cosy pay committees, the destructive role of pay consultants and the ghastly inequality that has arisen between pay at the top and those further down the food chain. Sacrificial gestures might buy time, but they are not the answer to rapacious behaviour.
Searching questions
Despite its denials, the way in which Google has been allowed to trample ov er intellectual property rights and personal privacy without intervention from supine Anglo-Saxon governments is appalling.
So Europe’s competition commissioner Joaquin Almunia deserves praise for at least trying to put the search engine back in its box. He rightly objects to the way Google’s algorithm favours its own business partners â€" such as hotel bookers â€" over competitors, borrows travel reviews from rivals and has exclusive agreements with content providers.
Stay firm! Stay firm!
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