HC Deb 10 April 1962 vol 657 cc1122-3
26. Mr. Tapsell

asked the President of the Board of Trade if the acquisition by Imperial Chemical Industries Limited of 38½ per cent. of Courtaulds Limited Ordinary stock will lead him to require a similar assurance from Imperial Chemical Industries in regard to this investment to that which he obtained from Imperial Tobacco Company Limited in respect of their 37½ per cent. holding in Gallaher Limited.

Mr. N. Macpherson

No, Sir. The two cases are not parallel. My right hon. Friend cannot accept that the mere fact that one firm holds a significant part of the equity of another, whether in the same, in an associated or in a quite different line of business, is in itself against the national interest.

Mr. Tapsell

Is it not a fact that the Chairman of L.C.I. has said that this very large shareholding in Courtaulds could never be regarded merely as an investment? Will my hon. Friend recall that when a not very dissimilar situation in the tobacco industry was referred to the Monopolies Commission, its conclusion was that it was against the public interest, even when regarded merely as an investment? Will not my right hon. Friend have another very close look at this, bearing in mind the fact that Conservative supporters in the country are becoming increasingly concerned about the monopolies position?

Mr. Macpherson

Yes, Sir, but my hon. Friend will recognise that the cases, as I have said, are not parallel. In the case of the Imperial Tobacco Company, that company held a monopoly position in the tobacco manufacturing industry, and in addition held a large shareholding in its principal competitor in that industry. In the case of the I.C.I. and Courtaulds, it was not I.C.I. who were monopolists in the field of man-made fibres, or in the narrower field of rayon.

Mr. Jay

Is not the relevant fact that I.C.I. and Courtaulds together will hold very nearly a monopoly in a number of man-made fibres? What difference is there in substance between the two cases?

Mr. Macpherson

There is a great difference in regard to these two questions. This is a question of one firm holding an equity in another and perhaps exercising some influence in that company through that holding. It matters a great deal whether the firm that holds the equity holds a monopoly position or not.

Mr. Leather

Will my hon. Friend say how it is possible for a company to hold a monopoly position and at the same time to have a large shareholding in its principal competitor? Are not these two terms completely contradictory?

Mr. Macpherson

Not within the meaning of the Act. The Act defines monopoly as the supply of goods amounting to one-third of the total supply.

Mr. Leather

Does not this demonstrate that it is a silly definition?

Mr. Mitchison

Within the meaning of the Act, do not I.C.I. and Courtaulds between them hold a very considerable monopoly in some very vital matters, and what do the Government propose to do about it?

Mr. Ross

Have a look at it.

Mr. Macpherson

With respect, that is another question.