May risks return to "picking winners" former BoE deputy governor warns, days before MPs grill Arm Holdings

 
Mark Sands
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BRITAIN-EU-POLITICS
Parliament's BEIS committee will hear from ARM Holdings on 22 November (Source: Getty)

Bank of England deputy governor Sir Charlie Bean has raised concerns over Theresa May's desire to intervene in the UK's economy, just days before MPs grill the British firm at the heart of a £24bn foreign takeover backed by the Prime Minister.

Bean, who served as deputy governor from 2008 to 2014, told City A.M. that he held concerns about the return of the government picking winners in the aftermath of the creation of a new Business, Energy and Industrial Strategy department.

BEIS minister Greg Clark has previously suggested that May had merely made her support for growth more explicit than her predecessors, but Bean has warned the Prime Minister will face demands to support struggling sectors, citing the Port Talbot steelworks as one example.

Read More: It's time to flesh out May's industrial strategy, manufacturers warn

"Until we actually see what is envisaged, we can't take a view on how effective it might turn out to be. The government has made the right noises about it not being a return to 70's style industrial policy that was about 'picking winners' but turned out to be more like supporting losers!" Bean said.

"However, there will be plenty of pressures to support industries or firms suffering from foreign competition and in marginal constituencies. I guess we just have to wait for more information on the strategy."

Read More: The inside story: How SoftBank persuaded Theresa May to ok its Arm takeover

Meanwhile, MPs are set to grill the firm at the heart of one of the UK's biggest targeted deals of 2016 as part of a probe into May's industrial strategy.

Institute of Directors director general Simon Walker, Arm Holdings public affairs vice president Stephen Pattison and Airbus UK president Paul Khan will be among those facing questions on Tuesday morning.

The attendance of Cambridge-based Arm, in particular, is noteworthy because of its recent £24.3bn takeover by Japanese Softbank.

The deal was welcomed by May in the aftermath of the Brexit vote as a declaration of support for the UK, but the Prime Minister also suggested at the time that all foreign takeovers must be assessed to see whether they are in the national interest.

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