HC Deb 28 January 1987 vol 109 cc328-9
8. Mr. Teddy Taylor

asked the Secretary of State for Trade and Industry if he has yet completed his consideration of the new information supplied to him by Lonrho plc in December 1986 about the circumstances in which House of Fraser's purchase by the Al Fayed family was approved; and if he will make a statement.

Mr. Channon

No. The material submitted on behalf of Lonrho plc concerning the purchase of House of Fraser by the Fayed family is voluminous and is still receiving careful consideration.

Mr. Teddy Taylor

While I understand that it will take some time for my right hon. Friend to consider the startling new information provided by Lonrho, will he say in general whether he or the Monopolies and Mergers Commission has any power whatsoever to direct the unscrambling or the alteration of a takeover or merger if information that was provided at the time of approval proves to be inaccurate or misleading?

Mr. Channon

If it appears to me that material facts are brought to my notice or made public that were not disclosed at the time, I have a discretion whether to make a reference to the Monopolies and Mergers Commission. If the commission makes an adverse finding, I have discretion to remedy or prevent the adverse effects identified by the commission through the normal powers available to me, including, in appropriate cases, the power of divestment. I make it clear that I make no comment about this particular case.

Mr. Campbell-Savours

Is the Secretary of State aware that Harrods, under the former management, paid roughly £20 million per year in corporation tax to the Treasury? Is he further aware that, since the takeover by the Al Fayeds and the registration of the company in Liechtenstein, they no longer pay taxes to the British Government because they choose to offset their liability against borrowings to borrow for the purchase of Harrods? Is that not a disgrace? Did the Secretary of State not know, when the original decision was taken, that that was likely to happen, and in taking that decision did he not, in effect, write of £20 million worth of revenue to the Exchequer annually—inflation proofed?

Mr. Channon

I think that I would be far wiser not to comment on what the hon. Gentleman says today. I am considering all the information supplied to me by Lonrho in December 1986. I shall consider carefully everything that is said in the House and that is supplied by Lonrho.

Sir Alex Fletcher

Does my right hon. Friend agree that the Al Fayed family was greatly assisted in acquiring the House of Fraser and Harrods because Lonrho sold it a 30 per cent. stake in the House of Fraser?

Mr. Channon

My hon. Friend makes another important point, but, again, I would prefer not to comment on the details of the case until I am in a position to consider the whole problem carefully.