Vassal State Book Review and The Impacts Of Foreign PE Ownership

Vassal State: How America Runs Britain by Angus Hanton

I first read Vassal State in 2024 after seeing Angus in an interview discussing the book on Novara Media with Aaron Bastani, and while Highstreett is still against platforming national chains and British-owned multinationals, I think it's important to discuss the impacts of ownership in the UK.

Angus has had three meetings with Bastani on Novara Media: two Downstream appearances (their Sunday podcast) and then a live session a few months ago at the time of writing. In this blog I'm going to be discussing the book, but also his general thesis.

The general theme of Vassal State is that American private equity firms and multinationals have gone on a buying spree within the UK. More so than any other comparable nation, we have been bought out by American companies. In table 1 in his book (page 28 of the hardback) he highlights the % share of US multinationals against GDP for us and a few comparable nations.

Sales as % of GDP: UK 25%, Italy 5%, Spain 6%, France 7%, Germany 9% Percentage of workforce employed by US multinationals: UK 4%, Italy 0.8%, Spain 0.9%, France 1.2%, Germany 1.2%

On page 37 he cites the Washington-based Bureau of Economic Analysis (BEA), which states the US owns $1,100 billion worth of UK assets vs the UK owning $660bn of US assets, with the Americans potentially holding a further $800bn in UK assets via European tax havens.

Then in his first meeting with Bastani he mentioned a story where someone told him they wouldn't order a book on Amazon because they wanted to support a British company. They would go to Waterstones instead. Hanton had to tell them that Waterstones is owned by American private equity. So the reader said fine, they would go to their local bookshop, and he told them that was a better plan.

Nobody in that exchange did anything wrong. The reader had the right instinct, acted on it, and got it wrong anyway, because the information required to get it right is not available at the point where the decision gets made. The shopfront says Waterstones. It has said Waterstones since 1982. Nothing about standing in one tells you that Elliott Investment Management of West Palm Beach bought it in 2018.

What can we do about it?

Hanton's answer is policy. A buy British procurement stance, proper taxation of multinationals, a competition authority with teeth, protections modelled on the French law that kept Danone out of PepsiCo's hands. Asked directly by Bastani whether the answer is to stop using Amazon and Starbucks, he says no. He calls it a hair shirt, and says it is not a formula that works.

I think he is right about policy and wrong to stop there, and I want to be plain that I am disagreeing with the author of the book I have just recommended.

Policy requires a constituency, and a constituency requires people who can see the thing they are supposed to be angry about. You cannot build political support for restricting takeovers of British assets while most people cannot tell which shops on their own high street have already been taken over. The reader in the Waterstones story was not apathetic. They were willing to act and unable to find out. Legibility comes before politics, and legibility is a tooling problem, which is a problem we can actually work on.

So that is what we are doing. Highstreett verifies ownership against Companies House and the register of persons with significant control before a business is listed as independent, and we are starting a series of pages answering the ownership question directly for the brands people ask about most. Who owns Costa. Who owns Greene King. Who owns Boots. Sourced, dated, and corrected when they change hands, which they do.

Hanton ends on something that has nothing to do with America at all. He observes that British business advice always asks about your exit strategy, and wonders what it would look like to have a stay in the room strategy instead. Every independent shop on your high street is somebody running one.

Would I recommend the book?

Yes. I've recommended this book to a couple of friends who I thought would be interested, and regardless of where you sit on the political spectrum or your hostility towards private equity/America, it's an informative and at times concerning look at a foreign country's ability to influence the UK economy. I would also recommend listening to his interviews on Novara Media below. Personally I listen to everything on 2x speed (some Zoomer nonsense) and Hanton isn't the fastest speaker in the world.

Novara Media appearance one: Here's How America Really Runs Britain | Aaron Bastani meets Angus Hanton - https://youtu.be/uK7DINiVuPA?t=1

Novara Media appearance two: We Have To Break Up With The USA | Aaron Bastani meets Angus Hanton - https://www.youtube.com/watch?v=L_UNBh9AFXw&t=77s

Novara Media appearance three: Dependence on America has Made Britain WEAK. Expert Speaks out - https://www.youtube.com/watch?v=0apH8xkS6PE&t=53s

Vassal State: How America Runs Britain by Angus Hanton is published by Swift Press.