The chairman of Saint-Gobain, the French glassmaker, yesterday rejected Gordon Brown’s opinion that the best economies are those that are most market-led, with the most flexible labour force.
Jean-Louis Beffa, responding to the Chancellor at the CBI’s annual conference in London, gave warning that Britain was losing long-term investment and stability because it was driven by short-term takeover pressures triggered by the pre-eminence of the City.
He said that there was not just one view of capitalism: “There is not a modern system, as I might have heard in the Chancellor’s [speech], and a backward stupid system.”
Mr Beffa said that Britain was losing influence in key sectors, highlighting the overseas ownership of the UK-based car industry and the recent sale of Pilkington.
Saint-Gobain boosted its presence in the UK last year with its £3.9 billion deal to buy BPB, the former FTSE 100 plasterboard maker. It also owns Jewson, the building materials supplier.
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Mr Beffa said: “Short-term ownership brings volatility . . . but that is where the City is making a lot of money.” He told delegates in a debate over foreign ownership of British companies: “In some sectors you have lost ground and you may have disappeared.” He said that the culture of short-term ownership led to reduced investment and innovation.
He questioned the Chancellor’s keenness for flexible labour markets, saying that asking for less flexibility from a workforce often made employees more dedicated.
Richard Lambert, Director-General of the CBI, did not share Mr Beffa’s view. “I don’t think there is any evidence at all to show that the UK has been damaged by our openness,” he said. However, he said that ideology was dead in British politics as he summed up the CBI’s conference and the contribution made by the politicians, whose appearances had been overshadowed by David Cameron’s decision to fly to Iraq rather than attend.
The CBI boss said: “Nobody talks any more about nationalism or social contracts. Close your eyes these days, and you’d sometimes be hard-pressed to guess which of the three main parties was doing the talking.”