Britain is Owned

To be a foreign asset is to be owned

With acknowledgement to the Financial Times and Banx - Labour’s Summit Aims to Attract International Investors. Donation can for international investment.

I have been working on a chapter about ‘The Asset Economy’ in my new book - a theme already tackled in these columns. As is my habit, I walk out every morning for a breather from the book, some fresh air, and an espresso, preferably at some start-up artisanal coffee maker.

To accompany my coffee I have been reading a chapter a day from a book by Lionel Barber, ex editor of the Financial Times. It is the ‘pacy biography’ of richest billionaire: Gambling Man: the Wild Ride of Japan’s Masayoshi Son.

As my (but not the publisher’s) preferred title for the forthcoming book is ‘Fight the Power of the Global Casino’ (what do you think readers? ) - Barber’s book promised relevance - or at least that was the excuse I gave myself as I turned another page and ordered a second espresso….

I ploughed through endless stories of Masayoshi Son’s bets on various tech companies spread over different continents, always at high levels of risk with reckless decision-making and an inability to concentrate on any one acquisition for very long; with billions of dollars in wins and losses, as Bloomberg reports

His bet on WeWork – another shoot-from-the-hip deal that came from a 12-minute meeting and car ride with founder Adam Neumann – led to a $32 billion loss for the Vision Fund as the startup went bankrupt.

….and with tonnes of waste, bad taste and excessive extravagance - not to mention endless private jet and helicopter flights.

Just as I was getting impatient with the banality of it all I hit the chapter on Son’s 2016 $32 billion acquisition of ARM Holdings, based in Cambridge. ARM was one of Britain’s most valuable technology companies until Son’s Japanese company - or is it an empire? - SoftBank - stripped Britain of that accolade.

Barber’s chapter for that acquisition is titled: Smash and Grab.

The SoftBank acquisition is highly relevant right now because ARM was given away in 2016 by a British establishment desperate to sacrifice British industry, jobs and innovation to attract and genuflect before their new gods - foreign investors in the Global Casino. Only a week or so ago Britain’s new Labour Minister for Technology, The Rt. Hon Peter Kyle MP, popped up on the influential BBC Today programme and speaking in a tone of religious fervour, informed millions of listeners that the owners of “$40 trillion” of foreign capital were keen to invest in Britain. That day he hosted a big conference intended to woo investors in the Global Casino to take a chance on the UK. The outcome must have disappointed because according to the Financial Times, ministers succeeded in winning only “£63bn of UK investment pledges by the private sector, much of which had been previously announced.”

As consolation, the FT tells us, the summit ended in a holy place

……an evening reception in St Paul’s Cathedral attended by King Charles. Sir Elton John came out of retirement for the night to play in the cathedral, while dinner was prepared by three-star Michelin chef Clare Smyth. “Sounds like a religious experience,” said one chief executive. 

The Global Casino aided and abetted by Britain’s public servants

The Softbank acquisiton of ARM was facilitated by the upper echelons of the British establishment. At the very peak stood the civil servant, Sir Jeremy Heywood who at the time was David Cameron’s Cabinet Secretary. The year was 2016, the month July when many were already on holiday, and Cameron was preparing to resign over the failure of the Brexit referendum.

To assist their ‘smash and grab’ of ARM, SoftBank’s bosses hired the financier Simon Robey previously of Morgan Stanley. Robey had just received a knighthood in the Queen’s Birthday Honours List and promptly visited SoftBank executives in California, where as Barber relates

the all-male, casually dressed SoftBank team team had a good laugh at the stuffy Englishman in his white shirt, tie and red braces... Masa took to calling Robey ‘Sir Suspenders’.¹

Robey’s “trump card” writes Barber, was his close relationship with Sir Jeremy Heywood, the most powerful civil servant in the UK government.

In 2004

…he had recruited Heywood to Morgan Stanley’s UK merger and acquisitions team. They spent four years in neighbouring offices before Heywood returned to Whitehall as Downing Street Chief of Staff. Four years later Heywood achieved his lifelong ambition of becoming Cabinet Secretary, the closest adviser to the prime minister..

Heywood enjoyed playing a commercial deal-making role. He had already steered government discussions over plans to merge BAE Systems (advised by Morgan Stanley) with EADS, the French-German aerospace company.

This was the moment in Barber’s book when I realised that my espressos had not been squandered. The book is relevant to the story of Britain and the Global Casino, because, as Barber writes on page 249,

When it came to SoftBank’s bid, Heywood proved a priceless asset.

He met Masayoshi Son at No 10 Downing Street to press for guarantees that ARM’s HQ would remain in Cambridge, and to exact assurances that SoftBank would oversee more investment and more jobs.

At the end of the half-hour (!) meeting, writes Barber, the man in effect running the country had negotiated the surrender terms for selling one of Britain’s elite companies, a world-beater in an industry of the future.

Heywood ’the asset’ was owned - and with him Britain’s prospering tech industry.

Finally, a hearty welcome to new followers. I experience a spark of joy each time I notice the subscriber graph rising…even when I’m spending lonely time away from substack, trying to finish the new book.

1. Lionel Barber, 2024. p. 248. Gambling Man.