HC Deb 19 April 1989 vol 151 cc331-2
13. Mrs. Fyfe

To ask the Chancellor of the Duchy of Lancaster what information he has on the percentage increase in expenditure on mergers and acquisitions since 1979.

Mr. Maude

Expenditure on acquisitions and mergers by industrial and commercial companies within the United Kingdom in 1988 is estimated to be about £22 billion. In current prices, that is about 13 times greater than the 1979 total of about £1.75 billion.

Mrs. Fyfe

Does the Minister agree that, if Scottish industry did not have to spend so much effort in fighting off mergers and takeovers, it could create new work, which might help a constituency such as mine where the official unemployment rate is 22 per cent.?

Mr. Maude

The idea that merger and acquisition activity reduces employment is manifestly absurd. Over the period when merger and acquisition activity has been at its height, unemployment has come down and employment has risen to record levels. The premise on which the hon. Lady bases her question is utterly absurd.

Mr. John Marshall

Does my hon. Friend agree that the Government should be congratulated on not allowing the bid for Scottish and Newcastle Breweries? Scottish Members should congratulate my hon. Friend rather than indulge in negative comments.

Mr. Maude

My hon. Friend is right to draw attention to the careful scrutiny of that bid by the Monopolies and Mergers Commission. As a result of the commission making an adverse public interest finding, the bid was not allowed to proceed. I did not hear all that many cheers from the Opposition when that happened.

Mr. Foulkes

Does the Minister think that it is wise for former holders of his ministerial post subsequently to take up paid appointments as advisers on mergers and acquisitions? Is that not a misuse of the information and knowledge gained in that post?

Mr. Maude

No, Sir.

Mr. Charles Wardle

Precisely because merger activity has increased so much would it not make sense, particularly because of the conflict of interest that exists between investment management and corporate finance, to bring the role of merchant bank advisers under the aegis of the Financial Services Act 1986, as some of us recommended in the debate on the financial services White Paper four years ago?

Mr. Maude

My hon. Friend was lucky enough to be privy to discussions on that Bill at which I was unable to be present. I suspect that his proposal to extend the scope of the Financial Services Act into an area which, at the moment, it does not cover would not be at all welcome. There are proper mechanisms for making sure that conflicts of interest do not arise and that proper interests are preserved. It would not be right to extend the system in the way that my hon. Friend suggests.