Key UK businesses may be given an option to sell stake to government
The UK government has also announced plans for a £50 billion investment scheme which could see a number of key businesses throughout the UK sell part of their equity to taxpayers in exchange for additional funding. While on the surface this may look like an interesting option and something which could breathe life into a very lacklustre market, there are potentially enormous liabilities at stake.
The government could effectively, or should we say taxpayers, be left with substantial liabilities if a business was to fail with substantial debts, not to mention the loss of the investment capital used to take the stake. More and more it appears that the government is determined to act like a State bank even though in effect there are a number of state run operations are already in the marketplace. Each of these new schemes which have been announced by the UK government appears to have significant flaws and would potentially be open to abuse.
Many business leaders cannot understand how the government has thrown literally hundreds of billions of pounds into the UK economy with very little in return. Everyone knows the answer to the problem is confidence and finance and until these two elements are in place there is very little chance of a significant recovery.
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