Former Deputy Prime Minister Michael Heseltine called for a government-led body backed by a state- lending bank to boost economic growth, and said ministers should block unwanted foreign bids for U.K. companies.
Prime Minister David Cameron should lead a National Growth Council to implement the plan and create a business bank that can finance the long-term needs of industry, Heseltine said in a government-commissioned report published today. Ministers should take a “greater interest” in foreign bids for companies that may harm the U.K.’s industrial strategy, it said.
“The government should set out a comprehensive strategy for national wealth creation, defining its view of its own role, and the limits of that role,” said Heseltine, who served in the Conservative governments of Margaret Thatcher and John Major and is now a lawmaker in the House of Lords.
The 89 recommendations urge the government to do more to spur growth as Britain struggles to regain economic output lost in the recession triggered by the 2008 financial crisis.
“Some will say they are criticisms,” Heseltine wrote. “That is exactly the wrong approach. To invite criticism is a sign of strength.”
Cameron has sought to aid the economy by boosting credit to small companies with programs including the Funding for Lending Scheme and a business bank backed by 1 billion pounds ($1.6 billion) of government money, and by easing regulations. Heseltine said government efforts to cut red tape don’t always help companies.
Britain exited a double-dip recession in the third quarter with growth of 1 percent, the strongest in five years, as Olympic ticket sales and a surge in services helped boost the rebound. Heseltine called for the government to replicate the Olympic effort throughout other sectors of the economy.
The government needs to engage with would-be foreign owners of British companies to make sure they spur research and development and build up supply chains, Heseltine said. Ministers should block unwanted bids in “exceptional circumstances.”
The British government faced a backlash over Kraft Foods Inc.’s acquisition of Cadbury Plc in 2010. Northfield, Illinois- based Kraft closed a factory in Keynsham, southwest England after the takeover was completed, having said beforehand it would keep it open.
Heseltine, 79, who backed British adoption of the euro over a decade ago, called on Cameron and his Conservative Party to forge closer links with the European Union to give companies certainty with their investments.
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