Do ‘clever financing arrangements’ benefit UK citizens or the private sector? Two OU academics comment on a new report which looks at pros and cons of foreign investment in the UK.
Dr Michael Pryke and Professor John Allen have contributed to a Smith Institute report, ‘Britain for Sale?’, released on 23rd May, which examines the costs and benefits of foreign ownership in the UK.
Dr Michael Pryke
The report examines whether there is an over reliance on foreign investment, which could make the UK’s cities less resilient and vulnerable to global market fluctuations. In their essay contained in the report, Dr Pryke and Professor Allen discuss water ownership and how different forms of not-for-profit ownership are taking shape.
In some instances regulations forge a strong balance between the attraction of private investment, moderate levels of profit return and the meeting of broader public interests. Dr Pryke and Professor Allen have researched the privatisation of Thames Water in detail. Dr Pryke said: “Our interest is the highly innovative use of global finance, often diverted through offshore financial centres, in the whole process of privatising a previously public owned utility charged with supplying water to London.
“Put simply, we wanted to figure out ‘who gains, who benefits?’ as a result of this finance driven shift from public to private ownership.” – Michael Pryke
“Just who gains from the way Thames Water has been privatised and financed? Do the clever financing arrangements actually benefit the citizens of London? Or is the whole game skewed towards the private finance?
Managing a national asset
“In ‘Britain for Sale’, John and I wanted to avoid offering a simple divide that sees private finance as ‘bad’ and public ownership as ‘good’. After all, private finance can be used to renew and build water infrastructure and can be put to work transparently to meet the needs of households in London and across Britain.
“In a small way we wanted to put on the table a number of issues and practices – the shadowy financial practices and evasive offshore dealings, for example, at heart of the financialisation of Thames Water – help to politicise the effects of private finance; and at the same time to begin discussion about how best to manage such a national asset for the benefit of customers, whether they be public or private bodies, funded by foreign pension funds and insurance companies or otherwise.”
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