With 80 Midland jobs hanging in the balance, we naturally hope that carpet maker Brintons will choose to invest in the UK rather than Portugal.
It will certainly find the skilled and experienced staff it needs at its Kidderminster base, and the backing of the local community and politicians. Kidderminster is where the modern carpet industry began, and Brintons has been an innovator in the industry for more than 200 years.
But while these are points worth making, one must assume they are already familiar to Brintons’ American owners, even on the other side of the Atlantic.
It’s tempting to ask whether things might be different if Brintons was still family-owned rather than owned by American investors Carlyle, but any business exists to make a profit. The fact that it was sold to Carlyle in the first place is perhaps evidence that shareholders in family-owned firms ultimately have to make decisions for financial rather than sentimental reasons.
We would see it as a blow to the region if Carlyle fails to invest in the West Midlands, and everyone wants those 80 jobs to be saved.
But it’s also true that when foreign firms invest in the region, that is money that they could potentially have spent at home. In those cases, it is the West Midlands that benefits from investment crossing international borders.
So globalisation, if that is what you choose to call it, works both ways. Sometimes we are the losers but in many cases it results in money coming into the West Midlands and creating jobs here.
What is problematic is the suggestion that investment could go to Portugal because the Portugese government is willing to offer a bigger subsidy.
Governments do offer incentives to investors, even though the EU competition rules are supposed to limit this type of thing.
In that sense, countries as a whole, led by their governments, are in competition for investment.
They might compete by offering the right environment for businesses to succeed, such as reasonable taxes, limited regulation, high quality infrastructure including the transport network and a good education system.
And to some extent it seems they also compete, bluntly, by trying to offer the biggest bribe.
It would be remiss not to note that Brintons’ British managers have an incentive to talk publicly about the threat to jobs at this time, and that is to encourage the UK government to match or beat Portugal’s promised subsidy.
A little foghorn diplomacy may be taking place here. That’s not to say there’s anything wrong with that.
There may be limits to what the Government could or should do to convince Carlyle to invest their money here. But in that context, and accepting that some investment will always go to other countries, Business Minister Mark Prisk must be ready to demonstrate he has done whatever he can to ensure this investment comes to the West Midlands.