Competition Policy

HC Deb 14 May 1986 vol 97 cc699-701

11. Mr. Yeo

asked the Secretary of State for Trade and Industry what recent representations he has received regarding competition policy.

Mr. Channon

I receive regular representations on competition policy from hon. Members and others.

Mr. Yeo

Is my right hon. Friend aware of the concern about the growing practice of companies which are the subject of competing takeover bids to collaborate, on a rather cosy basis, with the management's preferred suitor to plan a programme of asset disposals, the sole purpose of which is avoidance of a reference to the Monopolies and Mergers Commission?

Mr. Channon

. I am aware of that, and also of the public comment about it. My concern has been to make references primarily on competition grounds. That has been the case since 1984 when my right hon. Friend. now the Chancellor of the Duchy of Lancaster, announced the results of his review. I think that, in general, it is working well, but I shall certainly bear in mind my hon. Friend's point.

Mr. Flannery

Is not British industry's state of collapse because of its failure to compete due to Government policy? British Shipbuilding is in such a dilemma. Is it not true that money on a grand scale is going from this country into the coffers of our competitors? When the Japanese Government see an aspect of their industry in trouble, do not massive subventions of cash go into that industry to corner the market and flood the world with goods? This Government sit still and let our industry reach a state of collapse.

Mr. Channon

The hon. Gentleman is not expressing the facts about British industry. As I said earlier, its prospects are extremely good. That is generally recognised both inside and outside the House.

Mr. Favell

Is my right hon. Friend satisfied with the competitive position of Austin Rover, which during the first four months of this year saw its home market share drop to a disastrous 16 per cent.? Therefore, is it not time to re-open talks with Ford of Great Britain?

Mr. Channon

No, Sir, I have no plans to do that. However, I understand my hon. Friend's understandable concern about the competitive position of Austin Rover. It has good products coming along and it has made great strides, especially in Europe. I hope that hon. Members have noted the increase in percentages there. I am sure that under Mr. Graham Day and his board every effort will be made to improve the company's position still further.

Mr. Ryman

This question is about competition policy. Is the Minister really satisfied with the unsatisfactory state of affairs in a number of recent hostile takeover bids? Does he not appreciate that there is complete uncertainty about the attitude of the Director General of Fair Trading as to what bids are or are not referred? The system seems to follow no logical principle to protect the public interest. Was not the most glaring recent example the Distillers-Argyll-Guiness battle, which has baffled experts on both sides?

Mr. Channon

I make no comment on the last part of the hon. Gentleman's supplementary question. On his general point, I do not think that there is uncertainty in the market. As I have tried to explain to the House—I think that this is well understood outside—references are made primarily on competition grounds. That has been my practice during my short period in office as Secretary of State for Trade and Industry, and that was the practice of my predecessors from 1984.

Mr. Nelson

In the context of competition policy, will my right hon. Friend consider whether it is desirable that we should have a decreasing number of major joint stock banks? Does he consider it to be in the interests of borrowers, depositors and the public at large that the number should be decreasing and that such major takeovers as are currently proposed—for example, Standard Chartered Bank and Lloyds—should be allowed to go ahead in an untrammelled way?

Mr. Channon

I note what my hon. Friend says. I do not think that he will expect me to make a comment on a specific case at present, as it is a matter that I may be called upon to decide. I take note, however, of what he says.

Mr. Wrigglesworth

Does the Secretary of State agree that many of the mergers that have taken place in recent times have been little to the benefit of the work force, customers or the public interest, and have been based largely on the self-aggrandisement of those who own the companies or those making the bids? Does that not illustrate the ineffectiveness of the Government's competition policy? Will he consider changing the basis of it so that those making bids have to prove the benefits that might flow from them?

Mr. Channon

I should be reluctant to make that change. I do not agree with most of what the hon. Gentleman said in his supplementary question, but I believe that there is a need for certainty and consistent policy. This is an area of policy which is difficult and needs study, and I am considering all aspects of it.