A few days ago, one of my friends, a now retired professor in the sciences, was telling me of his concern at the very large degree of overseas ownership of utilities and other assets, with consequent questions over security and the export of profits. He wondered whether the government should have stepped in to prevent this happening, and whether such things should ever be allowed to fall into private hands at all so that such onward sales couldn't occur in the future. Anxieties of this kind are very common in people of his age, if they aren't economists. It seems that the pre- and just post-war generation are thoroughly habituated to the concepts of if and only if national ownership therefore national benefit, introduced or at least institutionalised by the Attlee governments. For others, my teenage son for example, it is a spontaneous prejudice, part of what David Henderson referred to in his Reith Lectures as Do-It-Yourself Economics; but for those in their seventies it is a felt and a genuine experience, and almost unquestionable, though in my view almost certainly false.

Of course, it is not difficult to understand (yet disagree) with the anxiety at ownership by overseas nationals. That said, the remedy proposed is obviously more dangerous than the matter it seeks to address, and ought to worry any reflective person. State owned assets are usually run to an extreme of inefficiency, with terrible consequences for consumers of their product and the taxpayers who support them; and undue cost in the utilities is to be avoided if at all possible, since these are unavoidable expenditures for all or nearly all citizens and businesses, and such excesses could be very damaging to economic growth. In the case of energy they undoubtedly would be so (see my piece on Thermo-Economics).

However, rather than open up this tender subject with my friend (a lifelong civil servant), I defended overseas ownership with the observation that since 'we' couldn't ourselves afford to repair the capital in these sectors, non-British investors were unavoidable. My friend agreed, but repeated his view that perhaps these assets should never have been in private hands in the first place, at which point we started to go round in circles and broke off to talk of other things.

We should have persisted and asked ourselves why UK citizens did not actually retain or appear to retain ownership. Two answers suggest themselves:

a) In a highly taxed society the broader citizenry will simply be unable to save sufficiently to invest in assets within their own geography, other than the houses in which they live, and

b) The ownership of such sitting-duck assets, such as utilities and larger companies, will tend to become classified as foreign in order to reduce if not completely avoid taxation.

In other words, the exceptional weakening of indigenous ownership, if real, is the unintended consequence of other government interventions. The state had already stepped in, and muddied the waters.