Take-over Bids

HC Deb 02 June 1959 vol 606 cc21-4

34. Mr. Sydney Irving

asked the President of the Board of Trade, in view of growing public concern, whether he will set up a Departmental committee to investigate the operation of take-over bids, with a view to recommending such appropriate amendments to the Companies Act as may be necessary in the public interest.

35. Mr. Swingler

asked the President of the Board of Trade if he will establish a commission of inquiry on the activities of small groups of financiers who take over, or attempt to take over, large concerns without regard to the interests of the workers involved or the public generally, with power to recommend ways and means of amending the Companies Act so that the directors of industry may be made responsible to the community for actions affecting employment, wages, profits, and prices.

Mr. J. Rodgers

My right hon. Friend does not think it necessary to seek any powers to discourage or restrain the making of take-over bids. Some takeover bids involve practices which are disliked but that is not sufficient reason for amending the Companies Act in the manner suggested.

Mr. Irving

Is the hon. Gentleman aware that most intelligent people in the country will not regard this economic gang warfare as in the interests of the nation, of the consumers or of the workers involved, as it extends private monopoly control, which is undesirable? Is he aware also that these take-over bids confirm the view expressed on this side of the House about the ineffectiveness of control by shareholders? Will he not look into the matter to see whether some code of business ethics, or some other means, could be devised to protect the public interest?

Mr. Rodgers

The great majority of take-over bids are of great benefit both economically and socially to the country. The possibility of such bids keeps directors on their toes and ensures that assets are fully utilised. On the whole, the take-over bids operate in the interest of the workers, the industry and the country as a whole.

Mr. Swingler

Does the hon. Gentleman really think that that will go down well with the old-age pensioners? Is he aware that activities like those of Mr. Clore have revealed the disreputable nature of a lot of high finance, which, of course, is inevitable under the capitalist system? Has not the time obviously come to put an end to the making of huge untaxed fortunes? Should we not take action to put a stop to that? Is it not time that the directors of industry showed more responsibility for the community's interest?

Mr. Rodgers

Questions referring to tax-free gains would be better addressed to the Chancellor of the Exchequer than to me.

Mr. H. Wilson

Can the hon. Gentleman say whether his very eloquent approval of these take-over bids has been checked in advance with the Institute of Directors? Did it approve of these takeover bids, or does it only resist them when it is a question of the British people having a share in equities?

Mr. Rodgers

I can assure the right hon. Member that I have not been in any contact with the Institute of Directors and that the Answer given is that of the Government.

Mr. Shinwell

Why should the Government not emulate the example of some of these financiers and industrialists? Why should the Government not take over some of these private concerns? Would it not be desirable for the State to extract some profit from these concerns instead of leaving it to these private financiers?

Mr. Rodgers

I think the greatest example of take-over bids in recent years has been the nationalisation of such things as the railways, and that has not been to the interest of the workers.

Mr. H. Morrison

As the hon. Gentleman has referred to the railways, is he aware that that was done after full Parliamentary debate and by the ordinary legislative process? Is he aware that in some cases these take-over bid operations are done in secret and that the first thing the directors of the taken-over company know is when someone walks in and says, "You are taken over"? Is it right that there should be nominee shareholders whereby there can be secret acquisitions without anybody knowing what is going on? In short, does the hon. Gentleman think that anything that capitalism does is right and anything the State does is wrong?

Mr. Rodgers

I recognise that there are a number of practices which are disliked, some arising from the activities of the bidders and some from those of the directors, but if there were an attempt at a hidden take-over the Board of Trade has powers to investigate the matter.

Mr. H. Wilson

Since the hon. Gentleman's knowledge of take-over history is a little limited, would he study the Answer given by one of his right hon. Friends to a Question about the successful State take-over bid in respect of British Petroleum, which showed that the value of the shares had increased ninety-fold, all to the benefit of British people since that took place?

Mr. Rodgers

I am well aware of the facts, but I wonder whether the right hon. Member would like to give an assurance that before any further nationalisation he will secure the views of the workers, for example, in the iron and steel industry and of the shareholders, including trade unions?

Mr. Wilson

Would the hon. Gentleman say whether Mr. Clore consulted the workers or the directors in this industry before making the bid?

Mr. Rodgers

As far as I am aware, no, but it was a perfectly open bid.

Mr. Lipton

On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the Answer, I beg to give notice that I hope to raise the matter on Friday, when I have a Motion down about Capitalism and Socialism.