HC Deb 07 February 1972 vol 830 cc955-7
8. Mr. Jay

asked the Secretary of State for Trade and Industry whether he will now refer to the Monopolies Commission the proposed mergers between Beecham's and Glaxo, and Boots and Glaxo, in view of the latest bids made.

11. Mr. Milne

asked the Secretary of State for Trade and Industry what discussions have taken place with his Department following recent develop- ments in regard to the proposed merger between Glaxo Group Limited and Boots Limited and the take-over bid by Beecham's for Glaxo Group Limited.

Mr. John Davies

After consideration of all the circumstances, I have decided to refer to the Monopolies Commission the proposed mergers between Beecham Group Ltd. and Glaxo Group Ltd. and between the Boots Company Ltd. and Glaxo Group Ltd.

Mr. Jay

Is the Secretary of State aware that in this case he has shown great good sense in adopting the suggestion I made to him three weeks ago?

Mr. Davies

I am always grateful to the right hon. Gentleman for any suggestion he makes. I do not guarantee to follow it always.

Mr. Milne

Is the Secretary of State aware that his indecision in regard to this matter has created great uncertainty in the pharmaceutical industry? Is it not a matter for concern to his Department that when there was a blatant takeover bid by Beecham's he refused to refer this matter to the Monopolies Commission? Does he not understand that people consider that he is more concerned about his City interests than he is about those employed in this industry?

Mr. Davies

I should have thought that that was entirely inconsistent with the decision I have reached.

Mr. Tom Boardman

In my right hon. Friend's current review of monopoly policy will he consider whether it is necessary to retain the present powers over mergers? Might it not be better in the case of a proposed merger to say that if it would result in too great a monopoly situation he will exercise his powers to prevent it, in the public interest?

Mr. Davies

I will take that into consideration. There will continue to be cases where perhaps the anticipatory effect of a merger reference will have an advantage.

Mr. Molloy

Is the Secretary of State aware that his lamentable failure to refer to the Monopolies Commission the blatant takeover bid by Beecham's was a dereliction of duty? Is he further aware that all members of Glaxo's staff and workers regard this as an insult to their endeavours on behalf of the nation? Will he give an assurance that he will not treat the Glaxo firm in such a cavalier manner in future?

Mr. Davies

No, I do not think I am aware of any of these points.

Mr. Hall-Davis

Is my right hon. Friend aware that many people, including the shareholders, are very anxious about the consequences for employment and the prosperity of communities in a merger situation like this? Will he encourage companies making a bid to publish in their offer documents full details of the likely consequences for employment and plant location?

Mr. Davies

I will certainly bear that in mind. It is of interest in one of these cases that the Chairman of Beecham's gave such an assurance in making his proposals.

Mr. Molloy

Is he your pal?

Mr. Pardoe

Would the right hon. Gentleman bear in mind that there is deep public disquiet about the criteria by which he refers these matters to the Monopolies Commission and that in many people's minds the only major difference—although the decision that he has taken now is the right one—between these two companies wishing to take over Glaxo is that, in the first case, Beecham's had contributed very heavily to the Conservative Party's funds and that Boots had not contributed at all? Was the earlier decision a case of payment for services rendered?

Mr. Davies

I consider that to be an impudent suggestion.

Mr. Molloy

But is it true?