Hi to everybody...here's a subject that I would like somebody with more knowledge than I have in the business world to explain to me why I should not be concerned over this. I'm not nationalistic, but rather anxious that, if the world situation deteriorated for one reason or another, how would Britain be affected with so many of its businesses in foreign hands? And have any other countries got this high a percentage of foreign ownership?
Half of British companies foreign-owned
By Vanessa Houlder in London
Published: June 24 2007 17:01 | Last updated: June 24 2007 17:01
Foreign ownership of British companies has risen from 30 per cent to 50 per cent over the last 10 years, according to new analysis from the UK’s Treasury.
The surge in foreign ownership reflects the recent wave of takeovers by overseas companies and the increasingly international outlook of institutional investors, which partly stems from the controversial tax changes affecting pension funds introduced by Gordon Brown, the chancellor, in 1997.
Interactive graphic: Tackling inflation - Jul-31
The statistics, which exclude domestic unquoted companies, were described as “striking” in a Treasury discussion document on the taxation of foreign profits issued last week. It said the rise in foreign ownership made it harder to justify taxing foreign dividends paid to British companies.
Michael Devereux of the Oxford University Centre for Business Taxation said the new statistics appeared to underline the impact of Mr Brown’s 2007 tax changes, which removed a £5bn ($10bn, €7.4bn) yearly tax incentive for pension funds to invest in British companies. The removal of the tax break prompted pension funds to diversify out of British equities, selling their holdings to foreign buyers.
The analysis of foreign ownership drew on data collected by the Office for National Statistics on the ownership of UK quoted shares and foreign direct investment into the UK.
The Treasury also acknowledged that the distribution of companies’ business interests was changing. With a third of all global trade conducted between arms of multinationals and profits growth increasingly coming from new markets, the competitive pressures facing global businesses were growing, it said.
Many big companies have been lobbying the government to stop taxing the dividends paid to their foreign subsidiaries, which causes administrative problems but raises little revenue. The companies argue the Treasury has no moral authority to tax their worldwide income, given that an ever-diminishing proportion of their profits is earned in the UK and the proportion of foreign ownership is growing. The Treasury appears to have accepted their arguments.
These are the banks not owned by us...
* Abbey and its online subsidiary Cahoot: owned by Banco Santander of Spain. It was Britain's sixth largest bank by assets when it was taken over in 2004.
* Allied Irish Bank (G
: owned by AIB Group of the Republic of Ireland.
* Bank of Ireland: based in the Republic of Ireland. One of the leading banks in Northern Ireland, and present in Great Britain to a lesser extent.
* Clydesdale Bank: owned by National Australia Bank.
* First Trust Bank: owned by AIB Group of the Republic of Ireland.
* Northern Bank: owned by Danske Bank of Denmark.
* Yorkshire Bank: owned by National Australia Bank.
All points of view welcomed...
