TAKEOVER BIDS (Hansard, 2 November 1972)

§ The Minister for Trade (Mr. Michael Noble)
Both these bids are clearly within the scope of the Monopolies and Mergers Act, 1965, on account of the amount of gross assets involved. They have only just been announced. My officials are already in touch with certain of the parties concerned and will be seeing the others very shortly. Once all the relevant facts have been established, we shall consider in the usual way whether either or both of them should be referred to the Monopolies Commission.

§ Mr. Benn
I am grateful to the right hon. Gentleman for that answer, but does not he think that there is now a very wide general feeling that it is time for a halt in some of these mergers, which have no industrial logic and which appear to be based, in part at any rate, on tax advantages that accrue as a result of recent legislation? Is not there now, in view of the impending legislation on this subject, an opportunity to look at the experience of mergers that have taken place under both Governments, and are not major issues of public policy now raised by mergers of this kind, particularly legitimate trade union interests, in terms of employment and regional policy, industrial relations and other practices? Is there not now an opportunity to pause or to call a halt until all these matters can be considered in the context of Government legislation?

§ Mr. Noble
All the points which the right hon. Gentleman raises are very much wider than this particular question. My task is to consider whether or not the public interest requires closer investigation and, if it does, to refer these mergers to the Monopolies Commission. On the broad aspects of policy, I do not believe that this is the time when the House should discuss them.

§ Mr. Fell
My right hon. Friend could help the House perhaps a little more. I raised this question last night in the general sense and not on the particular case that has been raised today, but my right hon. Friend who replied to the debate did not have time to reply to my question. But my right hon. Friend the Minister for Trade is in a position to give some assurance to the country that the Government will tackle this very serious situation of the harmful mergers that are taking place every day of the week in this country. I am sure that the House would be grateful if he would at least say that he will take a very careful look to see what can be done.

§ Mr. Noble
My right hon. Friend keeps a constant and careful eye on this, but he certainly would not accept what my hon. Friend says—that a large number of harmful mergers are taking place every day.

§ Mr. Grimond
May I follow up a question asked by other hon. Members and press the Government to consider whether this is not a very appropriate moment to consider this matter and to give some leadership, because they are attempting to get other people to show restraint and to forgo profits, and there is a strong suspicion at least that most of these mergers are primarily designed to make very large profits, not out of any extra productivity but simply out of financial manipulations?

§ Mr. Noble
I am in no way attempting to say that there should not be considerable discussions on policy in this matter. All I am saying to the House is that a Private Notice Question on one particular matter is not the opportunity to do it.

§ Sir D. Walker-Smith
While I will not make any observations on the current proposals for merger, which would be inappropriate having regard to the fact that they are to be referred in the way 329 my right hon. Friend indicated, may I ask my right hon. Friend to say whether the procedures of the Monopolies Commission are coming under review and whether it is intended to vary the present pattern whereby restrictive practices are the subject of judicial procedures and monopolies of scale and mergers are the subject of the non-judicial Monopolies Commission procedure?

§ Mr. Noble
Certainly there will be some changes, as forecast by my right hon. Friend in his speeches from time to time on the whole of competition policy. This is not the moment to divulge the full details to the House. As my right hon. and learned Friend knows, a Bill is in course of preparation on this subject.

§ Mr. Atkinson
Would the right hon. Gentleman accept that now is the time when the Government should be discussing possible mergers—before they take place and not afterwards? Surely that is the crucial question at present. Will the Minister now say that the Government are prepared to discuss the possibility of prior discussions rather than post discussion about a merger?

§ Mr. Noble
I am sure that the hon. Gentleman realises the extreme difficulty of the position he suggests. Both of these bids were made yesterday. It is obviously right—and both sides of the House, when in government, have taken this view —

§ Mr. Atkinson
Discussion first, and not afterwards.

§ Mr. Noble
That may well be. But the bids were made in public yesterday. The duty of my Department is to look very carefully at all the aspects that have been raised, many of which are policy aspects, and come to the quickest practicable solution that it can.

§ Mr. Benn
Is the right hon. Gentleman not aware that his answer is too narrow? In the context of European development on the one hand and in the context of impending legislation on the other, it will be proper for the right hon. 330 Gentleman to take this opportunity of calling a halt to the present process until these wider factors have been taken into account.
Is the right hon. Gentleman also aware that what is now happening lends great support to the view that my right hon. and hon. Friends on this side of the House take that there should be a greater degree of public ownership and control in these City manipulations?

§ Mr. Noble
If my answers have been too narrow it is simply in accord with the tradition of the House that one attempts to answer the question that is put to one.

§ Mr. Harold Wilson
Is the right hon. Gentleman not aware of the many pronouncements of the Prime Minister that in matters affecting prices and incomes the consumer interest and the national interest should be taken into account? Is the right hon. Gentleman not also aware of what is now becoming an almost obscene list of conglomerate takeover bids which have never been considered by this House, and of the City becoming, in the words of Harold Macmillan, a casino, day by day? Is he not aware that in the case of many of these mergers the consumer is never consulted at all, and that in the case of those mergers and takeovers, which are intended not for productive efficiency but for asset stripping or the sale of valuable properties, it means the closure of factories and redundancies without the workers being considered either? Is this in harmony with what the Prime Minister says he is trying to achieve in the Downing Street talks?

§ Mr. Noble
The right hon. Gentleman is perfectly right in saying that in many of these cases the consumer interest ought to he considered. It is certainly one of the things which we shall take into consideration when looking at any mergers of this type. I am well aware, as I know is the right hon. Gentleman, of the particular point made, on two recent mergers, by the Monopolies Commission on the question of conglomerates, and we shall certainly take the Commission's advice into consideration when considering this matter, too.