James Moore: Cable's 'robust' view won't matter if state meddling scuppers BAE mega-merger

Vince Cable's statement makes it look like the merger is a done deal from the UK point of view

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The Independent Online

To listen to BAE Systems' top brass you'd think that the British Government was the least of the problems with their increasingly tortuous attempts to secure a merger with EADS. Oh, the Tory right might bluster a bit, but the company has appeared to be rather confident that when push comes to shove, this country's politicians will do exactly what they've done on every other occasion that an unpopular deal has created a bit of a fuss and wave the thing through.

Now we know the reasons for that confidence. At a fringe meeting during the Liberal Democrat conference, Vince Cable, the Business Secretary, said that while he couldn't comment directly on BAE's planned merger, his "robust" view was that "I don't worry about foreign ownership".

Of course, the reason he couldn't comment directly is that he will be involved in a "quasi-judicial process" which will decide whether or not that merger can go ahead. But what he said is almost like a judge involved in a burglary trial stating at the outset his "robust view" that he "doesn't worry about people invading other people's homes".

Such a statement from Mr Cable isn't even particularly subtle: it looks very much like the merger is effectively a done deal from the British perspective.

That ought to be something for the Defence Select Committee to get its teeth into, having taken the unusual step of announcing an inquiry midway through what is (notionally) a commercial deal.

Mr Cable has form for putting his foot in his mouth. Remember the comments about being "at war" with the Murdochs? They led to his being relieved of the responsibility for taking the "quasi-judicial" decision on whether their proposed takeover of Sky should be allowed to go ahead (before the phone hacking affair hacked into the plan).

A very silly thing to say for a man in his position, but Mr Cable could at least point to the fact that he was duped by an undercover reporter. There is no such excuse this time: Mr Cable was speaking in a semi-public forum.

Luckily for him his comments are likely to be overshadowed by the continuing row over Andrew Mitchell and the exact nature of the four-letter words spat at the policewoman who told him to get off his bike while exiting Downing Street.

Even better, it looks increasingly as if Mr Cable's views and his quasi-judicial process will become an irrelevance.

EADS has made it clear that it will walk away from a deal if the merged group is subject to state meddling (so has BAE). That means France and Germany giving up their overt influence over the company in the form of their seats on the board.

The economics ministry of the latter was revealed in leaked papers yesterday to have expressed "grave doubts" about surrendering its influence over the merged group. It also believes EADS shareholders should get 70 per cent, as opposed to the 60 per cent on the table.

And we've not even got started with the Americans. The chances are still high that BAE will still be BAE long after the Takeover Panel's 10 October deadline for the two sides to spell out their terms. But there may be a few new faces among its top brass.

Freed to help us grow: 100,000 City geniuses

If the figures are true, then London's financial centre employs 100,000 fewer people than it did at its peak before the actions of a number its leaders tipped it off a very steep cliff and took Britain's economy with it.

That has produced quite a bit of hand-wringing in recent days as the City's advocates bemoan the loss of ground to rivals such as New York, Hong Kong and Singapore, and warn of dire consequences for this country's economy as a result.

What those consequences might be aren't so clear, however. Generally, people such as the City of London Corporation like to point to the taxation revenues contributed by the financial sector. If it weren't for us, those schools and hospitals you care so much about wouldn't get built, so the argument goes.

That falls down a bit when you consider the fact that leading bankers and their employers spend millions paying accountants to spend their days identifying and exploiting loopholes to stop them from having to pay very much.

Then there's the potential benefit to the economy of those job losses. Yes, benefits. One of the arguments advanced by the banking sector and its allies for the vast bonuses that are still being paid is that they are necessary to attract the best and the brightest. Hiring uniquely talented super-people costs money, and lots of it.

Hang on, though. Now they're not in banking, shouldn't the economy derive some real benefit from these people and their future ventures?

It's true that there are large numbers of support staff among the 100,000, and some of the jobless bankers will be lesser lights. But with more than a quarter of the financial centre's workforce at its height now no longer employed in it, there ought to be lots of high- fliers with time on their hands.

If these people are even half as talented as banks say they are, imagine the positive impact having them set free, of having all those business-savvy, entrepreneurial high fliers with bulging contacts books and ready access to finance from their old mates setting up exciting new companies.

What a kick-start to growth! Unless, of course, they aren't anything like as talented as the banks would have us believe, and really aren't up to much without the support and succour that a big organisation provides. Unless, instead of setting up new businesses, they end up simply knocking on the same old doors in the Emperor's new clothes.