Peter Mandelson vows to fight for jobs at risk following Dubai's financial problems

6:38pm Monday 30th November 2009

By Andy Tate

BUSINESS Secretary Peter Mandelson today said he would fight for British workers whose jobs are put at risk by foreign firms, amid uncertainty around the Dubai company that owns half of Southampton's container terminal.

Lord Mandelson expressed concerns about the consequences of foreign ownership after the Dubai Government's investment company, Dubai World, asked for a suspension on its debt repayments on Wednesday, sending world stock markets tumbling.

The cabinet minister admitted he was powerless to stop overseas buyouts, like the acquisition of the former P&O ports operation by Dubai World subsidiary DP World.

But he vowed to speak out when foreign ownership was used to "strip out British assets and jobs, or distort management and investment decisions".

Lord Mandelson made the commitment today after he was challenged by Daily Echo editor Ian Murray at a Newspaper Conference meeting of regional newspaper executives in Westminster.

Mr Murray, pointing to fears that the port might be sold off on the cheap to help pay down Dubai's debt, asked: "Is there nothing we can do to protect some of the interests of our vital industries?"

The peer responded: "We face a dilemma, always. We welcome foreign investment, and our country's economy has hugely benefited from tremendous inflows of foreign direct investment - more flows into the UK economy than any other single economy in Europe, probably more than many countries in Europe put together.

"I'm not against foreign ownership per se. The question concerns the commitment of that ownership to what's done in the UK - to production, output, quality of goods, new technology that is introduced, innovation that takes place, and of course to people's jobs that depend on all of the above.

"What I don't want to see, what I will speak out against even if I don't have powers to stop it, is when foreign ownership is used to strip out British assets and jobs, or distort management and investment decisions to align the future of our companies with the interests of those who rest in other countries, and where there is little concern given for the principles of good governance and social responsibility that we expect, rightly, from British-owned companies."

He added: "Don't read what I'm saying to mean we are against foreign investment or ownership. I am however concerned about its terms, some of the practices and some of the consequences that might flow from it. I am entitled on behalf of the public to demand that the quality and legacy of that company's activity, and the people who work in the company, should be respected."

On Friday, the Daily Echo reported that DP World would not be included in a restructuring of Dubai World to settle some of its billions of pounds of debt.

But fears remained today after the Dubai government said it would not guarantee the debt of Dubai World, after stock markets in Dubai and Abu Dhabi saw sharp falls.