HC Deb 17 May 1973 vol 856 cc1816-20
Mr. Alan Williams

I beg to move Amendment No. 65, in page 62, line 3, at end insert: '(2A) For the purposes of this Act, failure to keep fully and accurately informed, or failure adequately to consult, or failure to take fully into account and safeguard the interests of, the employees affected by a merger shall be taken by the Commission to be a matter which operates against the public interest'. It is not my intention to follow my usual tactic of asking a great many questions, because, having witnessed the close attentiveness of the hon. Member for Cannock (Mr. Cormack) to the Minister's requirements on the last amendment, I fear that if I were to ask too many questions the Minister might be buried beneath a flood of small pieces of paper.

I also noted with interest that the Liberal presence was heard and was not seen for long. It seems that throughout the Bill the Liberals have treated the House as a convenient means of obtaining a small amount of publicity for the minimum amount of work. We did not see them in the Committee stage and their participation on Second Reading was minimal.

Here we are dealing with an amendment which concerns the need for care for the workers within a firm where a merger is proposed. In spite of all the protestations of concern in this respect, it is beyond the Liberal Party representatives to remain in the Chamber for an extra five minutes, perhaps to make a contribution on a subject which that party will no doubt proclaim as a major part of its manifesto at the next by-election. The fact that it will bear no relationship to any other manifesto in any other by-election they have fought is of little relevance.

The objective of the amendment is clear, although perhaps the wording is not the correct way of achieving it. As I think is recognised on all sides of the House, when a merger takes place not only the shareholder is involved. Whereas the shareholder's risk is a financial one, it is not as absolute a financial risk as that of the worker, because the average shareholder spreads his holding over eight to 12 companies. Even if he faces a risk in any one of them he has hedged his bet by numerous other investments, so that while he may suffer a partial loss he is rarely in danger of suffering an absolute loss.

That contrasts with the position of the worker in industry who, particularly if he is employed in one of the less-favoured areas of the country in employment terms, finds that his loss is absolute, complete and, in far too many cases, permanent. The only capital that a worker has is his skill and his job. The more specific the skills of the firm in which he works and the smaller the locality, the less likely it is that he will find an alternative outlet for his investment in industry—namely, his training and his skill.

This is even more of a problem for the older worker, as we find, tragically, too often in the development areas. Even when other employment is available within a locality, it is highly selective in terms of age and in terms of another group which may be hit by redundancies —the disabled. Both these categories find it singularly difficult to obtain further employment when their original work disappears.

It seems to us reasonable that, since the talk on the Government side is about participation, we should ask whether that participation is to be meaningful. If it is, an indication must be given in the Bill, since it covers major industrial activities of great relevance to the working lives of so many people. There must be an indication that the worker is to be given every bit as much consideration as the shareholder, bearing in mind that the worker has a greater stake in any firm.

9.0 p.m.

Mr. Emery

The purpose and effect of the amendment is largely, as the hon. Member for Swansea, West (Mr. Alan Williams) said, concerned with any failure on the part of a company or companies concerned in a merger to take fully into account and to safeguard the interests of affected employees. Further, it is concerned with failure to consult employees and failure to keep them fully and accurately informed. It seemed that the hon. Gentleman did not deal with that. Such matters shall automatically be taken by the commission to be matters which operate against public interest. In that event the merger would fail automatically.

This is the third time this evening that I have stressed that employers should always take full account of the interests of their employees and see that their interests are safeguarded. They are also to consult them as necessary and to keep them well informed. At all times the principle set out in the Code of Industrial Practice should be followed. The hon. Member for Swansea, West, although he may not admire the code, probably believes in that instance that it is correct.

Section 83 of the code already contains a reference to the need to maintain and promote a balanced distribution of industry and employment in the United Kingdom. In addition, as has been made clear on many occasions, we take employment considerations into account when considering whether to refer to the Monopolies and Mergers Commission. Therefore, it can be taken for granted that, where relevant, the commission will give due consideration to the employees' interests. It is always open to the trade unions concerned to put views to the commission if it is felt that the employees' interests have not been taken fully into account or where there have not been proper consultations with employees.

I can assure the hon. Gentleman that since I have been in office many hon. Members and trade unionists have come to me to raise such matters and to explain their views. Often they are worried about redundancy or, for example, expansion. These are matters which have been made clear to the Government. I have normally been able to surprise such people by being able to indicate how far we have already gone in considering these matters. In fact, they have often been considered long before they were raised by hon. Members or by trade unionists.

At the end of the day the commission must balance the ascertained disadvantages of a merger against the ascertained advantages and consider overall whether the proposed merger is in the public interest. It would be very strange if, as a result of quite a small factor, it should be insisted that the commission's verdict must be against the merger irrespective of the advantages and the general desire of people to see it work.

I shall give an example. It might be said to be an absurd example, but perhaps it is not all that absurd. Let us say that a merger is going through with two companies which have a number of plants. We may find that the merger is likely to produce more employment in Craigton or in Swansea. That, of course, would be generally welcomed by the hon. Members who represent those constituencies. Suddenly it may be found that, because of a plant operating in Honiton, there are to be 20 redundancies, about which the trade union concerned had not been informed. Obviously, the trade union representatives in Honiton would be most concerned.

If the amendment were accepted and those specific factors applied, the merger would have to fail. I do not believe that that is what the hon. Member for Swansea, West wants. Major consideration is given to matters of employment and redundancy when references on mergers are dealt with by the Monopolies and Mergers Commission.

With that assurance, I hope that the hon. Gentleman will not feel it essential to press the amendment.

Mr. Alan Williams

I understand the Minister's remarks about taking into account the local employment situation, but that is not what the amendment is concerned with. We are concerned here more with the personal level, almost regardless of the local situation.

The Minister put forward technical arguments against the amendment. I said at the outset that I recognised that the amendment might not be technically correct and that what I wanted was acceptance of the intention and perhaps an indication of how the Government would try to incorporate the intention of the amendment in the Bill. Unfortunately, the Government seem not to wish to do so.

The Minister referred to the consequences being automatic. The knowledge that these consequences would automatically follow would ensure that the company had the necessary consultations and had regard to the interests of the workers in the way required by the amendment.

Amendment negatived.

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