Control of Concentrations (Hansard, 17 May 1989)

§ The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Francis Maude)
I beg to move, That this House takes note of European Community Document Nos. 5936/88 and 9822/88 and the Supplementary Explanatory Memorandum submitted by the Department of Trade and Industry on 12th May 1989 on the control of concentrations between undertakings; notes the United Kingdom's general reserve; but supports the Government's intention to continue to contribute constructively to discussions with the Commission and other Member States in order to see whether the outstanding issues can be resolved.

§ Mr. Nigel Spearing (Newham, South)
On a point of order, Madam Deputy Speaker. I wish to raise two brief points of order. The first relates to documentation. The explanatory memoranda which were submitted to the Vote Office and the Scrutiny Committee on 10 June 1988 and 31 January 1989 were supplanted by a more recent memorandum dated 12 May 1989.
The Scrutiny Committee was not able to consider that last explanatory memorandum until its meeting today, and it subsequently placed in the Vote Office at about 6 o'clock this evening a summary and response to that explanatory memoranda together with a summary of the evidence given by the Secretary of State for Trade and Industry before the Committee last February. I think it important that I put those documentary points to you, Madam Deputy Speaker.
May I also obtain your confirmation that Standing Order 14(1)(b) gives some option to the Chair in that if the time for such a debate relative to the importance of the matter appears to be insufficient the debate could be held over at the discretion of the Chair?

§ Madam Deputy Speaker (Miss Betty Boothroyd)
I thank the hon. Member for the first point he raised, which is a helpful point of information. He is correct in what he said in making his second point: there is discretion on the part of the Chair.

§ Mr. Maude
The whole House will be grateful to the hon. Member for Newham, South (Mr. Spearing) for drawing attention to the further scrutiny which his Committee has been able to give to this document in the course of today.
We now debate a proposal for a regulation for the control of mergers with a European dimension. Certain mergers may already be controlled at the European level under articles 85 and 86 of the treaty of Rome. The question raised by these documents is, therefore, not whether there should be control of mergers at the Community level but, rather, the nature and extent of that control.
The questions essentially are these: could a regulation provide a more efficient and effective mechanism for such control, and what should be the balance between Community and national controls?
The Commission's proposals for a Community merger control regulation require unanimous agreement in the Council of Ministers. We continue to maintain a general reservation on the principle of a regulation. It is important to look at the totality of the proposals. Many important issues remain unresolved, and we shall maintain such a reservation until the proposals as a whole go a good deal further towards meeting our concerns.
426 Several major issues are still to be resolved on the regulation, and much detailed technical work remains to be done. One major issue outstanding is the level of turnover thresholds which would determine which mergers would fall within the scope of the regulation. There has been much discussion about the most appropriate level for these thresholds. In common with France and Germany, we believe that the regulation should cover only the really big cross-border mergers in the Community. That means that higher thresholds than the Commission has proposed should be enforced.
It also means that if, as Commissioner Brittan has proposed, the thresholds should be reviewed after a transitional period, there should be no automatic, pre-arranged change in the threshold levels. Any review of the threshold levels should have the aim of establishing whether, on the basis of experience, there was a real need to alter the levels, either down or, indeed, up.

§ Mr. Tam Dalyell (Linlithgow)
As a member of the former indirectly elected European Parliament, I am far from clear about who takes these decisions on major mergers. Is it one commissioner, or one directorate, or the whole Commission?

§ Mr. Maude
All proposals that come from the Commission are made by the whole Commission, but they are generally brought to the Commission by a single commissioner. Proposals are usually drawn up by officials in certain directorate generals within the Commission. In the ordinary course of events, a major proposal would not come before the Council of Ministers unless it were approved by the Commission as a whole—not necessarily unanimously.
There is also the question of the criteria by which mergers should be assessed to determine whether, in the words of the draft regulation, they are compatible with the Common Market. We and Germany firmly believe that the criterion must be the effect on competition. Others believe that considerations of industrial policy should be brought into the assessment. We believe that there would be a risk to competition if the criteria were defined as the Commission has proposed. The prime concern must be competition. We are strongly opposed to the Commission using a regulation such as this as a means of promoting an industrial policy of its own. That is not what a regulation for the control of mergers should be about.
Another major concern is the complicated legal question regarding the relationship of the proposed regulation to articles 85 and 86 of the treaty of Rome. We are naturally concerned to clarify the relationship between a regulation and the treaty's competition provisions, because we believe that there should be one community regime, not two. Any solution to the problem of articles 85 and 86 is related to the questions of criteria and procedures.

§ Mr. Tony Marlow (Northampton, North)
I am grateful to my hon. Friend. We know in this House, to our cost, or perhaps not to our cost, that some of the larger mergers have political implications. If there is a merger with a potential political implication that is taking place, what political organisation or institution is going to be able to take account of those political implications? In other words, how is democracy going to have any impact on these merger discussions once the Commission itself is involved?

§ Mr. Maude
I hear what my hon. Friend says.

§ Mr. Alex Carlile (Montgomery)
It does not now.

§ Mr. Maude
In a way, the hon. and learned Member for Montgomery (Mr. Carlile) is right in what he says from a sedentary position. We seek to insulate the decision on whether a merger should be prevented from taking place, which is essentially a decision about whether shareholders should be allowed to sell their shares to a willing buyer, from the political process. The Secretary of State for Trade and Industry takes a decision only after having advice from the Director General of Fair Trading. He does not have the power to block a merger, unless the Monopolies and Mergers Commission, which is independent, has made an adverse public interest finding. To a considerable extent, even in domestic law the process is insulated, and properly so, from political pressure.

§ Mr. Marlow
I agree with my hon. Friend and think that that is right and proper. But, despite that, the Government can make a statement on a merger or merger policy or, despite that, a private notice question can be tabled by the Opposition and there will be democratic discussion of it, although I agree with the thrust of what my hon. Friend said. Is there not another danger—that the Commission, when looking at these issues, might for its own political purposes and political reasons decide on a particular outcome for a particular proposal?

§ Mr. Maude
That is right, which is why it is important that if a regulation is to come into force, which is by no means settled yet, it should set out clearly the criteria that the Commission must apply. It is not a question of whether there should be a merger-control regime within the Community because the Commission has asserted, and the court has upheld, its power to control mergers under articles 85 and 86 of the treaty, which have remained in place since it was signed. If we set up the right merger-control regime, there will be more scrutiny of its decisions and its decision-making will be more transparent than the current method by which it investigates mergers.

Mr. Alex C'arlile
Does the Minister agree that one of the problems with current domestic scrutiny of mergers and monopolies is that there are no clearly understood criteria by which they are judged when references are made? Sometimes one does not know why a reference was made. Does he agree that the Community's proposal sets out economic or financial standards that make it clear to all those involved in potential mergers and acquisitions whether they will be referred for Commission consideration? Is that not an advantage?

§ Mr. Maude
It is simply not the case that the regulation provides the certainty that the hon. Gentleman seeks. A company will not know for certain whether a merger will be investigated. Such certainty would not be possible under any merger-control regime. Only when a proposed merger is subject to scrutiny do its full implications begin to emerge and are decisions made. It is not possible—this is a fairly consistent criticism—for there to be an absolute test against which any prospective merger can be measured to know whether it offends against the criteria. I do not accept the hon. and learned Gentleman's criticism that the criteria are uncertain under our system. The factor that most motivates us when deciding whether to refer a merger to the Monopolies and Mergers Commission is its effect on 428 competition. That is not so on all occasions, but in the two years that I have had my responsibilities we have referred only one merger to the MMC on grounds other then competition.
Even the Commission acknowledges that its proposal to resolve problems with articles 85 and 86, which it is linking directly to its proposals for thresholds and criteria, would not be completely immune to challenge in the courts. Everyone agrees that the legal position must be explored further.

§ Mr. Teddy Taylor (Southend, East)
If the Commission is misled by evidence given to it which leads to it making an incorrect decision—this is not a hypothetical example because it appears to have occurred in important mergers —what will happen under the regulation? My hon. Friend the Minister mentioned a court, but I understand that a court would not be relevant to this possibility. If the Commission discovered that information given to it, by which it took its decision, was fraudulent or incorrect, or if those in Brussels had misled it, what will happen? I am sure that this matter will have been considered carefully by people such as myself who have examined the proposed regulation.

§ Mr. Maude
I suspect that my hon. Friend has in mind something more specific than might have appeared at first sight. I do not know the answer, but I shall endeavour to supply it before the debate concludes.
Also to be resolved is the relationship between any European regulation and the activities of national merger administrations. We are concerned that as far as possible businesses should not be exposed to what has become known as double jeopardy—the need to seek national and Community approval for a merger. In practice, it would probably be impossible to avoid at least some overlap between the Commission and national merger administrations, but it should be kept to a minimum and, broadly speaking, the Commission should have exclusive jurisdiction over those mergers that would fall within the scope of the regulation.

§ Mr. Cash
Articles 85 and 86 prescribe an abuse of dominant position as the main criterion. Whether or not one chooses a threshold, above or below that line one can still find that the matter can be challenged under those articles anyway. Does my hon. Friend agree that there is a problem irrespective of whether one seeks to avoid double jeopardy?

§ Mr. Maude
It is precisely that extremely difficult legal angle that needs to be further explored. The Commission has accepted that its proposals do not put the matter entirely beyond scrutiny by the courts. My hon. Friend is a considerable expert and will know the difficulties. Further work must be done.
I am now able to reassure my hon. Friend the Member for Southend, East (Mr. Taylor) that the regulation as framed would provide for fines to be imposed on a party that either failed to notify or supplied incorrect information.

§ Mr. Teddy Taylor
I am sorry to be difficult. Who decides on the fine? Is it similar to the anti-dumping regulations—the Commission simply comes to a decision? What happens if there is a complaint and it is not clear whether the Commission has been misled? How does he Commission decide the figure? On what basis is it 429 calculated? What can the aggrieved party do about it? We have seen a few recent examples when the Commission fixed a figure and did not explain. My right hon. Friend the Minister for Trade and Industry will be well aware of the position on the fixing of levies with respect to anti-dumping. Does the Commission reveal why it fixed a certain fine? Does it have the power to say that company X is fined a certain amount? That seems to be astonishing for a democratic organisation.

§ Mr. Maude
My hon. Friend has a considerable thirst for knowledge on this subject and I am able to satisfy it. The Commission would be able to decide on these matters. I cannot set out the exact criterion on which it would decide and the tariff of fines that it would apply. I do not think that that needs to be set out in detail at this stage. It would be open to the Commission by ordinary decision to impose a fine.
We are concerned also to achieve timescales and procedures in the regulation that would be as—

§ Mr Marlow
Will my hon. Friend give way? Mr. Maude: I should like to make progress.

§ Mr. Marlow
I should be grateful if my hon. Friend would give way on this point. He has said in answer to my hon. Friend the Member for Southend, East (Mr. Taylor) that individual citizens are in jeopardy because they may receive a fine, perhaps a large one. Will my hon. Friend explain what rights they will have to plead against that levy being imposed on them, how they will be able to appeal and what the legal rights of the citizen will be? We know that in the present circumstances in the United Kingdom there are various procedures which can ensure that justice is available to the citizen who has been arraigned. How would that carry through under the proposals? Was that long enough?

§ Mr. Maude
It was long enough for me to be able to supply an answer to the previous question. My hon. Friend the Member for Derbyshire, West (Mr. McLoughlin) will be grateful to my hon. Friend the Member for Northampton, North (Mr. Marlow) for supplying him with an opportunity to get a great deal more exercise than he would ordinarily have. I can say to my hon. Friend the Member for Southend, East that the fines applicable would be up to 50,000 ecu for failing to notify or for supplying incorrect or misleading information. Those decisions would not be of a criminal law nature. I will endeavour to satisfy the proper curiosity of my hon. Friend the Member for Northampton, North on the matter of possible appeals against those fines.
We are concerned to achieve time scales and procedures under this regulation that will be as short and as little cumbersome as is practical, to provide clarity for companies and to achieve a balance between speed and fairness for all the parties involved. In practice, there might be informal approaches to the Commission in advance of notification which might develop, in time, along the lines of the confidential guidance system that operates in the United Kingdom, although there are, as yet, no specific proposals to that end.
One area that the proposals do not address is the barriers—which are more extensive in some member states than in others—to mounting successful contested 430 takeovers. We have made it clear that the proposed merger control regulation should be considered within the wider framework of barriers to takeovers. Such barriers are simply not compatible with the completion of the single market. We are not alone in our concern. That is why the Commission and other member states supported our initiative at the end of last year on the need for action on this front.
In response to our initiative, the Commission has agreed to undertake a study on this subject. We look forward to seeing the results of the study which, I understand, is due to be completed by the summer recess. There will be major implications for some British businesses, but the likely overall benefits for business in the United Kingdom and in the Community as a whole make it important to tackle the barriers. We intend to keep up the pressure on that. I urge the House to support the motion.

§ Ms. Joyce Quin (Gateshead, East)
I welcome the fact that this debate is taking place. As we all know, there have been recent important negotiations within the European Community Council of Ministers on this subject, so it is right that the House should be having a debate. However, it is a matter of regret that the debate is taking place at a late hour and is also short, because we are discussing an important topic.
Useful background work to the debate has been undertaken by the Select Committee on European Legislation; also, a report on EC merger control has been prepared in another place. It is true that a regulation on EC merger control has been doing the rounds for a long time—since 1973—but it is equally true that the spate of mergers in recent years and the approach of 1992 have given a fresh impetus to those discussions.
The Opposition have been concerned about the merger mania that we have witnessed and also about the Government's seeming complacency when faced with those events. We are concerned about the criteria that the Government apply to evaluating mergers and our worry about the Government's national merger policy makes us worried about their attitude in the negotiations currently taking place in the EC.
I am also far from convinced that the Government are treating the matter with the seriousness that it deserves. I have been informed—I hope that the Minister will be able to contradict me—that at the last Council meeting two weeks ago, when this matter was discussed, the United Kingdom was represented by the No. 2 official in the United Kingdom permanent representation in Brussels, whereas other countries—France and Germany in particular—were represented at ministerial level. If that is true, why was it allowed to happen? Surely, with the number of Ministers at the Department of Trade and Industry, one of them should have been there.

§ Mr. Maude
Perhaps I can explain that. We have a much better record of attending Councils at ministerial level than most other countries. I was unable to attend the Council meeting, as I ordinarily would to represent the United Kingdom, because I had to be in the House to take part in the Second Reading debate on the Companies Bill.

§ Ms. Quin
I accept the Minister's explanation, but there are several Ministers within the Department. It appears 431 that the Government were isolated in the discussions. At least that is the story that appeared in several newspapers the next day, and I have some cuttings with me.

§ Mr. Maude
The hon. Lady should know by now that she should not believe everything that she reads in the newspapers. It is nonsense—it has been nonsense from the outset—to say that the United Kingdom has been isolated on the issue. We are closely aligned with the German Government's attitude, and we are close to the French Government on most of the outstanding issues. The hon. Lady should take the trouble to find out a bit more about what is going on.

§ Ms. Quin
Again, it was my understanding that various Commission officials had said that the threshold that the Government favour was much higher than that favoured by any other country. [Interruption.] If the Minister says that that is incorrect, I am happy to accept it.

§ Mr. Ian Taylor (Esher)
The hon. Lady's point belies the efforts made by this Government to get some sense from competition policy. The previous Commissioner had an initial limit of 1 billion ecu. We are now at least talking sensible terms for this policy, and I wish that the hon. Lady would give the Government credit for their efforts to get it to that level.

§ Ms. Quin
The rumours from Brussels suggest that the competition Commissioner, who is after all this Government's appointee, favours a lower threshold than that favoured by the Government.
The Prime Minister, who was at great pains to dismiss the previous Conservative Commissioner because he had gone native in Brussels, now seems to be faced with a similar difficulty, even though this Conservative Commissioner has held his office for only three or four months. Perhaps the Minister would like to deny the rumours that there are differences of view within the Government about the regulation. Obviously, I have no other information than what I have read in the press because I am not party to Cabinet discussions.

§ Mr. Marlow
On a point of order, Madam Deputy Speaker. Is it usual for speeches in this House to be based upon facts or upon rumours?

§ Madam Deputy Speaker
It is usual in this House for any hon. Member to express himself or herself as they wish and for other hon. Members to have the tolerance to listen.

§ Ms. Quin
We hope that there are no disagreements between one Government Department and another. However, no hon. Member can deny that there have been clear divisions on European policy on the Conservative Benches recently. I am not simply relying on rumours when I make that point.
The rather vague form of words of the motion has been supplemented by an amendment tabled by Conservative Members, which takes a different view about this policy. Perhaps it would be unwise for the Opposition to intrude on private grief. However, we will obviously watch developments to see whether the Government can reach an agreement with Tory Back Benchers on this issue.
As I said earlier, the Labour party has been concerned about the spate of mergers that have occurred in recent years. Our view of what finally emerges as a regulation 432 from Brussels will be coloured by what we judge the practical effects of such a regulation would be on our economy and our future industrial prospects.
Obviously, even if a regulation is not adopted in the near future, the Commission has powers under existing competition articles of the treaty of Rome. We are worried that those competition rules do not seem to have improved the situation and we face a very uneven playing field which seems particularly to disadvantage the United Kingdom.

§ Mr. Spearing
Does my hon. Friend agree that the Minister skated over the fact that the criteria in Brussels will clearly be different from those currently used by the Government? The Minister may shake his head, but public interest—however that may be defined by this House—is a criterion used in this place. In Brussels the EEC would have to determine that with regard to EEC interests. In that regard, does my hon. Friend the Member for Gateshead, East (Ms. Quin) recall the takeover bid by Feruzzi for Hillsdown, which put at risk the whole of the Commonwealth import of sugar? If that had been conducted in Brussels, that bid might have gone through and had an enormous effect on our Third-world connections.

§ Ms. Quin
My hon. Friend has made a valid point. I want later to discuss the criteria governing this regulation and the Government's view of those criteria.
When we consider whether mergers should be allowed, we must bear in mind that the Government have said that their main criterion is competition policy. That point was repeated in the minutes of evidence given by the Under-Secretary of State for Corporate Affairs and by the Secretary of State for Trade and Industry to the Select Committee on European Legislation. Competition was mentioned as the main or possibly even the only criterion, but the Secretary of State mentioned other national interests, such as defence. The Minister said that the media were another area in which there might be a special national interest and where special criteria may apply. I was amazed to read that in the evidence to the Select Committee. The Government have sat by complacently watching large sections of our media fall into very few pairs of private hands.
The need to consider other criteria has been stated by others who gave evidence to the European Communities Committee which dealt with this matter in another place. In that Committee, the Law Society of Scotland stated strongly that competition should not be the sole criterion, that other factors should be considered. It referred in particular to the regional dimension: We consider the Commission should be empowered to look at the impact of a merger not only on the economy of the EEC as a whole, but also on a national or even regional economy, such as that of Scotland … It has been the experience of Scotland within the United Kingdom that larger enterprises will tend to be controlled from the South East of England with detrimental effects, for example, on professional support services in Scotland. It is possible that this experience will be repeated on a larger scale within the EC single market, depending on the effectiveness or otherwise of the provision for the reduction of regional disparities. That reference to Scotland could apply equally to the north-west, Wales and other areas. The Government should give greater importance to that.
I also believe that the long-term industrial and economic interests must be taken into account. We are very concerned that at the moment too many managers 433 seem to be looking out for potential predators or planning mergers themselves instead of trying to ensure adequate investment for the future well-being and long-term prosperity of their companies.
Finally, I believe that the interest of employees, whose livelihoods may be dramatically affected by mergers, should be considered. Of course, that idea is anathema to a Government who have consistently blocked any such moves within the European Community. None the less, I know that there are pressures from the European Parliament and from elsewhere to take such matters into account.
I remember, for example, that when this proposed regulation was debated in the European Parliament in October, an amendment was passed that has been incorporated into the amended version of the directive under article 17, and which reads: Applications to be heard on the part of members of the administrative or management organs and the acknowledged employees' representatives from the undertakings concerned, shall in all cases be granted". I can imagine the Government's reaction to that article. However, we feel strongly that those who are employed in firms that are the subject of takeovers should be consulted and that their interests should be taken into account.
Many other issues are raised in the proposed regulation which, unfortunately, time does not allow me to discuss in detail. Those include the problems of how well equipped and structured the Commission is to cope with the tasks that it is proposing to carry out and what institutional changes, if any, might be desirable, such as improving the role of the hearing officer. Much time could have been spent—perhaps other hon. Members will do this—analysing the possible conflicts between national and European action on mergers, which is very much a grey area in the proposed regulation, and also the possible legal difficulties over the conflicts between the implementation of articles 85 and 86 of the treaty and whatever is agreed in the new regulation.
The Government's approach to the subject is highly unsatisfactory. Their tactics in the negotiations appear to be in danger, at least, of leading to their isolation, but their approach to the substance appears to fail to address the real problems created by the merger situation that we have seen happening too frequently during the past few years.

§ Mr. Alex Carlile
I have been listening to the hon. Member with great care. Is the Labour party in favour of or against a European Community concentrations policy?

§ Ms. Quin
We recognise that, under the existing treaty, there is scope for the European Commission to act in relation to competitions and mergers. We would like to see those existing powers used more sensibly, along the lines that I have suggested.
We want decisions to be made in Europe that will promote the long-term industrial and economic health of our large companies.

§ Mr. Marlow
By who?

§ Ms. Quin
By all concerned. We want to see decisions that will help to reduce regional imbalances and that will help employment. Relying simply on competition and on the operation of market forces is not the answer.

§ Mr. Teddy Taylor (Southend, East)
This is is a very important regulation, because, basically, the regulation, as amended, would in many cases override the provisions that we now have in law, since it would remove the ability of the Secretary of State to allow a merger prohibited by the Commission and it is intended that Member States should not be entitled to prohibit a merger specifically authorised by the Commission on the grounds that it contributed to the achievement of one of the basic objectives of the Treaty. It is a massive transfer of sovereignty. Instead of elected Ministers, who are answerable to the House, deciding whether mergers should go ahead, non-elected Commissioners will do the job.
We are, therefore, taking a huge decision. Those Commissioners will not be answerable to the House in the same way as Government Ministers. They will not have to give the reasons for decisions. As with all such matters, we are deciding this matter late at night, so that the public will have no idea what is going on. Three big decisions will be made this week. It is crazy but there will be nothing in the papers about this tomorrow and nothing on "Today in Parliament". Instead of our elected Ministers doing the job, we are transferring it to the Commission. The Commission, of course, has the power to tell Ministers that they are wrong and to overturn their decision.
There is no point in talking about this because our views on such matters are wholly irrelevant. They do not matter one bit and I am sure that they will not affect the decisions reached in any way, because all the decisions have been made, except for a couple of minor points.
I have a simple question: will the Government send out some kind of pamphlet to British firms so that they know about the new situation?

§ Mr. Bowen Wells (Hertford and Stortford)
My hon. Friend has just said that what he and the House say makes no difference to the decisions that will be made in Europe. The Minister has been battling away and arguing strongly from a reasonable, sensible and reasoned basis with his European colleagues. He has consulted the House on two occasions and addressed the European Legislation Committee. He has managed to make major changes to proposals from the Commission. I suggest that my hon. Friend is insulting the Minister by suggesting that there is no point in him going to Europe and doing the hard work that he performs on our behalf.

§ Mr. Taylor
I am sorry if I gave any impression that I was insulting the Minister. I was insulting the constitutional arrangements whereby, in the majority of cases, admittedly, not in this one, we think—although it is up to the Commission; it can change its mind—matters are decided by majority vote. Therefore, the views of the House are not relevant. The case before us tonight is different, because, we hope, it must be subject to a unanimous decision. In this case we can say no, but the Minister is well aware that most things are decided by majority vote. In that case the views of individual Ministers are not terribly important. However, I am sure that the Minister is working terribly hard and doing all in his power to ensure that the proposals put to us are the right ones.

§ Mr. Maude
It is important to stress to my hon. Friend that the regulation does not involve a transfer of 435 sovereignty—that was done when the treaty of Rome was signed. The Commission has competence in competition matters and over mergers and that has been asserted and upheld by the European Court of Justice. My hon. Friend is right to say that the regulation must be agreed unanimously. Therefore, we have considerable influence over its form. If we can negotiate on it and it emerges in a satisfactory form, it will give Ministers more control than at present.

§ Mr. Taylor
The Minister is well aware that I never quote any figures unless they are Government ones. The quote I read was not written by me, but it was a direct quote, word for word, from the explanatory memorandum from the Government. I am sorry if that quote was incorrect or misleading, but the Minister will be well aware that I was quoting the words in the document before us. I am sorry if that has given the wrong impression, but we are given a lot of papers and, to avoid any misunderstanding, I just wanted to read out what the Government said in that explanatory paper rather than give my impression.
That issue is not important—all I want is an answer to the simple question: will companies be told? Under article 12 in the original paper—I believe that it is unchanged in the revised document—the officials of the Community, the so-called "Community policemen" or whoever, have the power to enter any undertakings to examine the books and other business records; to take or demand copies of or extracts from the books and business records; to ask for oral explanations on the spot; to enter any premises, land and means of transport of undertakings. The Minister may say that that is all part of being European and may be it is, but I believe that many people who run businesses will be unaware that, once the regulations goes through, people appointed by the Commission will be able to walk in, ask for any documents and ask for answers "on the spot"—those are words used in article 12.

§ Mr. Win Griffiths (Bridgend)
The hon. Gentleman may be giving the impression that there is a new power. The Commission already has similar powers under articles 85 and 86 to walk into companies which it suspects of entering price fixing arrangements, for example, and it has used them.

§ Mr. Taylor
I am well aware of the powers that are contained in article 85. As the hon. Gentleman has said, if there is a danger of price fixing, the Commission has the powers to which he has referred.
I am suggesting that many people who run companies or businesses and do not follow politics will not be aware of the matters that we are discussing. If they are aware of them, my suggestion is obviously nonsense. I am not talking about those who run ICI, Shell or Unilever. My understanding of article 12 is that it relates to any premises which the Commission considers relevant and not solely to the businesses that are directly concerned.
The Minister must inform businesses of the fines that can be imposed. As he rightly said, a fine of 50,000 ecu —a small sum—can be levied by the Commission upon those who in its opinion supply misleading information, but there are many other penalties. Under the old regulation—I wonder whether it is the new one— The Commission may by decision impose on natural or legal persons fines of up to 2 million ecu 436 where, either intentionally or negligently, they commit a breach of the obligation to notify". There are those who say, in effect, fair enough, but if the Commission considers that there has been a breach there can be a huge fine.
What about delays in supplying information? The Government are well aware that businesses are being asked constantly for more and more information. The Department of Trade and Industry is always asking them to attend wonderful 1992 conferences, and at the same time they are being asked to complete numerous forms. Running a business is not the same as being a Member of Parliament. Business men have to do things in a hurry if customers want things quickly. However, under article 14, if information is not supplied when it is wanted, there can be a fine of up to 25,000 ecu. That is rather significant. There are fines for not providing information, fines for not providing information on time, and fines for being negligent.
When problems of this sort arise, the normal course for someone in this country is to go to a British court. Some of our courts are funny but basically they are places where we get justice.

§ Mr. Win Griffiths
Under article 15 there is provision for review by the European Court of Justice. We are told: The Court of Justice shall have unlimited jurisdiction within the meaning of Article 172 of the Treaty to review decisions whereby the Commission has fixed a fine". There is a judical process whereby those who are fined can appeal to the European Court of Justice.

§ Mr. Taylor
I can assure the hon. Gentleman that I have read the papers and that I am well aware of the provisions within article 13. Given his expert knowledge, I ask him to tell us how much it costs to go to the Court of Justice, what it would cost if something went wrong and the case was lost, and how long the process takes. I am sure that the hon. Gentleman, with his expert knowledge of Euro-matters, will be able to respond. Let us suppose that I am fined for not providing information. I could go to the Court of Justice, but that would cost quite a lot of money and the process would take a long time to complete.

§ Mr. Kenneth Hind (Lancashire, West)
My hon. Friend will be aware that efforts are being made by the European Court of Justice to create a first tier, where three judges will sit on their own. This will enable matters of law which require quick decisions to be dealt with expeditiously at short notice. All the evidence will be given by affidavit. This will provide us with a quick, cheap and simple operation of Community law.

§ Mr. Taylor
That is a splendid idea. I, too, have heard about that. I am saying that if someone goes to the European Court of Justice, the process will not be quick, easy and cheap, even if he uses the new tribunal set-up.
We are not talking about small fines. The Commission may by decision impose fines not exceeding 10 per cent. of the value of the reorganized assets where the undertakings concerned either intentionally or negligently put into effect a concentration in breach of — article 7. I know that some hon. Members may feel that this is silly stuff, but let them understand that the Commission can enter a business man's premises. It can enter premises that it thinks are related to an organisation. For example, it could enter a public relations company, if it considered that it were a related organisation, and demand answers on 437 the spot. It would have the ability to impose considerable fines up to 1 million ecu. That is the sort of thing that people will worry about.
My hon. Friend the Member for Lancashire, West (Mr. Hind), who is a great Europhile, says that business men in such circumstances can go to the new Euro-court and that that will be quick and easy, but I doubt whether that will happen.
I also want to know what will happen when the Commission has the power, once a merger is taking place, to call for it to stop: I think that it is called instructing disinvestment or divestment. That does not happen in this country unless a merger is referred to the Monopolies and Mergers Commission, and the Government do not do that in many cases. There is no question of the exciting implications of the House of Fraser affair being unwound, for instance.
I think that many firms considering mergers would like to know about all this stuff, but they cannot, because we debate it at such ludicrous hours. The Institute of Directors, for example, is very worried about these developments. I hope that the Government will give one pledge: that once the measure has been passed they will publish a little booklet explaining the new arrangements that business men must face. It is frightening for people trying to run a business to be faced with so many new powers and restrictions.
I do not like the suggestion that Commissioners rather than courts will fix fines. The Commissioners are not men of God; they do not possess unlimited powers and unlimited wisdom. We know who they are, how they get where they are and how they act on advice, and it has nasty implications for democracy.

§ Mr. Dalyell
The hon. Gentleman has just said that we know how Commissioners get where they are. How did Sir Leon Brittan get there?

§ Mr. Taylor
I would not like to give any advice on that. I have never been asked to be a Commissioner: that may provide some guidance on how to be appointed.
In the old days, people accused of dumping had to say that they were selling at a price lower than that at which they had bought. Nowadays, however, the Commission can fix what it calls "a normal price". Hon. Members may ask, "What is a normal price?". The Commission told a firm in my constituency that it was selling below the normal price, but when the firm asked what was meant by a normal price no explanation was given. Firms are entitled to no information whatever.
This is the kind of thing that used to happen in the old days before there was a Parliament or a democracy: officials would decide fines and would tell people what they could and could not do. They would announce that they were entering the premises. Some of my hon. Friends will say that I am covering old ground, but this is new ground. What we are deciding is within a new framework, a new kind of democracy.
I am sorry about the direction in which the Labour party is going. I used to think that, although we disagreed politically, the Labour party fought for the individual, for liberty and for democracy; that it fought for the people and against the big battalions. Now our democracy is experiencing a dramatic change: the Commission is 438 making decisions, imposing fines and defining normal prices, without having to give a reason. I think that that is wrong, but whether it is right, wrong or—as I am sure my hon. Friend the Minister would argue—does not matter, I think that firms are entitled to know what is going on. I hope, therefore, that when he winds up my hon. Friend will say that he will publish a little booklet explaining how the new European arrangements will affect mergers. I know that most people do not worry about it, but I think that the majority of business men will be shocked, horrified and worried, and that all who care about democracy and freedom would feel sick at what is happening tonight

§ Mr. Alex Carlile (Montgomery)
I agree with at least one thing that was said by the hon. Member for Gateshead, East (Ms. Quin): it is very regrettable that this important debate, and indeed the long series of European Community debates that we are having, always seem to take place so late at night. They attract an almost predictable cast list. On the one hand, there are the Euroholics, in whom a surfeit of European matters seems to produce a sort of sickness or paranoia, such as that expressed just now by the hon. Member for Southend, East (Mr. Taylor). On the other hand, there are the Europhiles—among whom I may be counted—who feel that the European Community is a much more democratic and useful organisation than it is considered by the hon. Member for Southend, East, and who are prepared to argue for its constructive aspects in the House.
A debate on mergers and monopolies is extremely important. The Government's attitude to the subject may well be a benchmark of their attitude to Europe. Therefore, it was with great interest that I listened to the Minister. I tried to glean from his speech whether he agreed with the former Prime Minister from his party on Europe, with the present Prime Minister or with the Foreign Secretary who, presumably, would like to be the next Prime Minister. Good lawyer that he is, the Minister chose the role of amicus curiae. However, a little later, when he replied to an intervention from one of his hon. Friends, I thought that I detected a slight tendency towards the views on Europe held by the former Prime Minister from his party.
We are considering redrafted proposals and it was right for the Minister to express reservations about some aspects of the proposals. They are not as clear as they ought to be and some features need redrafting and further consideration. One worrying aspect is the reservation in the proposals about the national interest—the question of what a member state can reserve out of the Commission's regime over concentrations, in the national interest. Does that include regional interests and the interests of Commonwealth countries? It is important that the United Kingdom should be able to ensure that the interests of Commonwealth countries, to which we have obligations, should be properly considered in the European context. Their interests should not just disappear among the market of 322 million and the combined interests of 12 member states.
Having expressed those reservations, I now say that the proposals just about get it right. They aim at certain concerns that we should all share. There is the concern that intervention in proposed mergers should be predictable. At the moment it is somewhat difficult to predict when the 439 Minister will decide that a proposed merger should be referred to the Monopolies and Mergers Commission. There are not clearly set-out financial criteria which enable one to look at the proposal made by the acquisitive company and say that on financial grounds alone the matter will have to be considered by the Commission.
The European Commission's proposals set certain financial and economic standards. Whether they are right is a matter for debate and further consideration, but the principle of setting clear standards is important. It will mean that a company that wishes to make a major acquisition will be able to look at the size of the proposed new company, set its proposal against the standards laid down by the Commission, and know by rule of thumb whether the matter will have to be considered further or whether it can simply go ahead. The company will know whether it has to justify to the Commission what it is doing or whether it can proceed. That will be useful for large companies.
The Commission is also concerned at the increasing concentration of economic power in fewer hands. That is not quite the same as being concerned solely with competition. As the Minister said earlier, the Government's sole ground for referring bids to the Monopolies and Mergers Commission is competition. The Community can consider concentration not only in fewer hands but concentration in the hands of non-Community nationals. That could be of great importance in dealing with the ownership of newspapers and—what worries me particularly at the moment—the ownership of satellite television channels, where there are great possibilities for the dissemination of information.
It is also useful that the regulating authority should, as proposed by the Commission, consider bids on a wider public interest basis than has ever been applied in the United Kingdom. The public interest basis could take full account of the environmental and safety standards to be set by the new company. We see from the way in which nuclear power generation is distributed unevenly around Europe that it is not possible to set proper safety standards on a purely national basis. If say a company from a country less than 100 miles from the shores of the United Kingdom proposed a merger which involved the construction of nuclear power stations not built to a standard acceptable in the United Kingdom, it would be impossible under present provisions to do anything about it; but under the proposed Community regime it would become possible to consider the Community public interest, including standards on the environment and safety.
The Commission could consider the amount of research and development to be conducted and, of course, the degree of competition within the product market, and prices. Those are commendable public interest considerations which should properly be taken into account by an organisation that is considering whether a merger should take place.
There is an analogy with the anti-trust laws of the United States of America. If the Government really mean their commitment to the 1992 single market, there is a need for an effective Community competition policy to examine mergers and takeovers in a strategically European context. It is illogical to have a single economic market and to leave something as important as mergers and competition to a very limited degree of Commission intervention and mainly to national Government intervention.

§ Mr. Dalyell
When the hon. and learned Gentleman talks about the environment, might that not be covered in article 20? In the explanatory memorandum we see that member states may take appropriate measures to protect legitimate interests. The hon. and learned Gentleman is a lawyer. I would have thought that the reference to legitimate interests would cover the matters that he has raised. I should like confirmation when the Minister replies. It is a very important point.

§ Mr. Carlile
I shall leave it to the Minister to answer that question as he is a lawyer more expert in these matters than I. Obtaining the answer will give his hon. Friend the Member for Derbyshire, West (Mr. McLoughlin) a little more exercise; he looks as though he could do with a good deal more.
There is a logical case for a strategically European context in the policy over mergers and takeovers. While one must recognise the necessity for large companies, capable of competing in world markets, that must not occur at the expense of European consumers. If we have a European manufacturing market, a European production market and a European financial market, we must accept that we also have a European consumer market. If there is to be such a market, matters relating to it should surely be considered at European level—particularly bearing in mind the high degree of democratic and national accountability that exists within the Community.
The Community suggests that the burden of proof should be shifted on to the shoulders of those wanting to create mega-corporations. That seems right to me, and I hope that the Government continue to hold that view if they agree, as I think they do, with this part of the proposals.
Of most concern to me is the Government's underlying attitude. Are we really listening to the Government saying, "Yes, we want to make these proposals better. When we come to 1992"—when, on my understanding, we go from unanimity to majority voting—"we want a more acceptable regime"? If so, 1 have little criticism of the Minister's approach, except that he is a little grudging in his acceptance of the draft.
However, one is bound to suspect in the light of recent statements by the Prime Minister that the Government give the appearance of accepting the proposals grudgingly but are really exercising a Gaullist objection to the further Community's development. If so, I regret that very much.

§ Mr. Kenneth Hind (Lancashire, West)
On the final point made by the hon. and learned Member for Montgomery (Mr. Carlile), from listening to my hon. Friend the Member for Southend, East (Mr. Taylor), I do not believe that the Government are making a Gaullist objection to Europe's development.
It is clear that my hon. Friend the Member for Southend, East is not against the principles that the directive lays down but has a number of reservations about them. So do I and many of my right hon. and hon. Friends. We must take more interest in discussing these matters. I identify myself with the remark of the hon. Member for Gateshead, East (Ms. Quin) about how unsatisfactory it is that the House debates them late at night. In years to come, it will be realised that our discussions formed the basis of Council of Ministers' decisions—although fortunately the proposal before the House requires 441 unanimity—and we may live to regret the lack of interest in them shown by some right hon. and hon. Members, the media and the public.
I support the principle behind the Commission's proposals. If, as we approach 1992, there is no open competition and no ruling on monopolies and mergers, there will be chaos. Much of the directive falls on all fours with the Government's traditional guidelines, which are the Tebbit rules. It all boils down to market share, competition, and the overall interests of the consumer. The directive provides for a turnover basis of £700 million, which is not unreasonable when one considers the size of the Community.
Many right hon. and hon. Members have been involved in mergers and takeovers. Two years ago, I was involved in the attempted takeover by BTR of Pilkington. Strong regional feelings exist in that case. The influence of people who work for that company is important for the region and there is clearly a regional interest that must be protected. I am sure that hon. Members who represent Yorkshire constituencies had similar feelings over the takeover by Nestlé of Rowntree.
I agree with my hon. Friend the Member for Northampton, North (Mr. Marlow) that we must consider the national interest—what he described as "the political interest", and there are other ways of describing it—not simply on the basis of individual sovereign state legislation on monopolies and mergers but in terms of the effect of this type of directive.

§ Mr. Denzil Davies (Llanelli)
The draft regulation gives all the power to the Commission, which becomes the investigator, prose—cutor, judge and policeman. There is no room for national sovereignty in this set-up.

§ Mr. Hind
The right hon. Gentleman raises the point that I was about to discuss. As a lawyer, it worries me that the Commission is judge and jury in its own court. That is bad, and I hope that the Minister will press for more use of the European Court within the framework of this directive. It is wrong that, when the Commission says, for example, that notice has not been given of a takeover or that the information required has not been given, it can act as policeman and give on-the-spot fines. Such a matter should go before the court, be it passed down, as it were, to individual state courts—the British courts in our case —or to the European Court. Each company—whether it is taken over or it is the predator company—should have to appear before that court and put its case.
I regret this extension of power that we are giving to the Commission, remembering that traditionally we have separated the Executive and judicial functions within our jurisdiction. As a result of this directive, they could be merged. It is a dangerous step which we should avoid at all costs.
I appreciate what the Minister said about articles 85 and 86; those issues will have to be sorted out. If we are to have a policy for the future on monopolies and mergers within the EEC, a directive of this nature is essential. Hon. Members who, like myself, represent north of England constituencies and who share the concern that is felt about Rowntree and Pilkington may agree that perhaps it is a 442 thought that the takeover by Nestlé of Rowntree under this directive would have been referred to the EEC. Surely that represents a step in the right direction.

§ Mr. Tam Dalyell (Linlithgow)
The message that the Government should be getting from this debate is the genuine concern that is felt in all parts of the House about regional interest. From Pilkington, York or, as in my case, Bathgate and what happened to the old Telegraph Condenser Company, it gets to Plessey, then Plessey gets involved and this week we have Towcester. I do not speak for Northamptonshire, but it is a general pattern of worry and there must be an overall view.
Because other hon. Members wish to take part in the debate, I will put the remainder of my speech in the form of questions. First, what is the legal interpretation of article 20 and what do "legitimate interests" cover? Do they cover regional problems, which were well outlined by my hon. Friend the Member for Gateshead, East (Ms. Quin)?
Secondly, on the important question of the threshold levels, do the Government agree with the view that is attributed to Sir Leon Brittan that there should be lower threshold levels? Are they to be lower or not?
Thirdly, a question about double jeopardy. I do not understand what the legal difficulty is. The Government have available to them expert advice. I have had this problem explained to me by David Edward, who was recently appointed by the Foreign Secretary—rightly—to the court of first instance. The Government can go to such expert lawyers and get some kind of ruling. There is an overlap between national aspects and the EEC aspect. We are not playing blind man's buff.

§ Mr. Spearing
I draw my hon. Friend's attention to the definition of a single market under article 8A, which is an area without internal frontiers. While I sympathise with what my hon. Friend and the hon. Member for Southend, East (Mr. Taylor) said, if that is the definition of the free movement of capital, how can regional or national interests be taken into account?

§ Mr. Dalyell
That may be a question for the Court of Justice. The hon. Member for Southend, East (Mr. Taylor) may remember from his Cathcart days Lord Mackenzie Stuart, and other distinguished Scottish jurists who have gone to Europe. I do not think that there is much evidence that they are slower than the United Kingdom courts. He may have such evidence.
Is there a ripple of disatisfaction in governmental circles about the speed with which European Court decisions have been made? I understand that it has acted rather expeditiously, and has been effective. It certainly has a number of distinguished English and Scottish jurists on it.
Fourthly, what about the successfully contended takeover bids? My hon. Friend the Member for Gateshead, East raised the real concern of the Law Society of Scotland. I know something of the background to this, and it has genuine concerns. If it is concerned about Scotland, the north-west and the north-east of England have equal cause to be concerned. This is linked with the problem of additionality. Again, if there were time, we should have an explanation from the Government of what their policy on additionality is. When the other Commissioner, Bruce Millan, came to my constituency a couple of weeks ago, he 443 expressed public concern that the British Government were using additionality to help their domestic finances, and using the European fund in a way that was not intended.
I do not want to be dragged into a debate about something that the hon. Member for Southend, East said, but he asked how Commissioners get there. It takes the can to have Sir Leon Brittan, after all the years in the background—

§ The Parliamentary Under-Secretary of State for Industry and Consumer Affairs (Mr. Eric Forth)
Careful!

§ Mr. Dalyell
I am being careful. I do not need lectures in care from that Minister, particularly after his performance at the Dispatch Box. I will put it tactfully. Sir Leon Brittan rendered the supreme service to his leader of silence—silence about skulduggery. I have checked it, and that is a good parliamentary word. That had a great deal to do with the person in charge. It takes the can for that man, after his performance in front of a Select Committee, to be in charge of such sensitive issues.

§ Mr. Denzil Davies (Llanelli)
I shall be brief because time is pressing.
I want to return to the arguments on articles 85 and 86, whether it is better to have a directive and take court action on the basis of those articles. I shall make two points regarding the power of the Commission. Once the Single European Act and all the other measures for which some hon. Members voted come into force, we shall be unable to avoid some form of regulation. I am concerned about the power that the regulation gives the Commission. It will determine whether a merger is within the regulation. It will ask for all the papers on the merger and will be the judge, jury and policeman who polices the arrangements. Our system, which is not perfect and about which I do not want to be too romantic, is different. The Office of Fair Trading acts as a preliminary sieve, court of first instance or magistrates court. If there is a case it is considered by the Monopolies and Mergers Commission, which makes recommendations and passes it to the Secretary of State for Trade and Industry, who makes a decision for which, in theory at least, he is accountable to Parliament. It is not a perfect system, but at least there are some checks and balances and consideration of the powers involved.
If the regulation is passed, two bodies must be established. The Commission should be the prosecutor, but an independent body—it will not like this proposal —outside the Commission, similar to the Monopolies and Mergers Commission, should act as judge and determine whether a merger is within the regulation. Some people might say, "We can do that within the Commission. We can have Chinese walls, with someone at one end of the Berlaymont building acting as prose—cutor and someone at the other end being the judge." I do not believe that quasi-governmental institutions operate in such a way. Commissioners and civil servants within the Commission may be honourable people, but I do not believe that that can be done. An independent body must act as judge, and an appeal could be made to the court of first instance.
I think that I heard the Minister correctly when he said that he was not too happy with the second limb of the regulation, whereby, even if damage to competition could result from a merger, the Commission could determine 444 whether it is in Europe's interests that it should be allowed. The Commission would be exercising a kind of public interest function. It would determine European industrial strategy, and although there could be a reduction in competition because the merged organisation involves, say, electronics, it could decide that the overriding priority is to allow the merger.
I do not believe that the Commission should take such a decision. It is a decision not about competition but about policy and economics, which should be taken by politicians, taking into account the regional and other considerations. If the second limb of the regulation is passed, the Council of Ministers could determine that a merged organisation that inhibits competition should be allowed because of European regional policy. One can imagine the public relations men, lobbying groups in Brussels and vast amounts of money that could be involved. Such pressure should not be placed on the Commission.
I do not believe that the Commission should be judge and jury or that it should determine the political issue of European industrial strategy. Such decisions should be taken by the Council of Ministers, and the judge in the first instance should be not the Commission but an independent body.

§ Mr. Win Griffiths (Bridgend)
We have had an interesting debate, although it has taken place rather late this evening.
The Commission's proposal is a logical extension of articles 85 and 86 and the onset of the single market There has been some disagreement about the exact criteria that would make the proposal acceptable to the British and other Community Governments. We have been given a sketchy outline of a tenfold increase in the worldwide turnover of a company compared with what would happen under the Commission's proposals and a fivefold increase in the Community turnover of at least two of the companies involved, which is the Government's position. It would be interesting to know the position of the other Governments and whether a feasible compromise which is acceptable to the House of Commons can be reached.
The Minister attacked my hon. Friend the Member for Gateshead, East (Ms. Quin) for referring to press statements and rumours. Unfortunately, because the Council of Ministers meets in secret—the only legislative body outside the Soviet Union to do so—we have to rely on press reports, rumours and leaks, which sometimes come from the Government, to find out the exact position. Perhaps the Minister would like to inform us of the feeling in other countries on the possibility of a reasonable compromise being reached.
I ask the Minister to examine the possibilities of using article 235 in constructing a regional interest. Article 20 of the regulation states that there can be Legitimate interests other than those pursued by this Regulation, provided that such interests are sufficiently defined and protected in domestic law". There is a possibility of domestic or national interests being defined for the purpose of the regulation. Article 235 could be used to develop the concept of a regional interest, if the Government were so minded. Is that what they would like to achieve?
It is one thing for us to be worried about the lateness of the debate and for us often to be worried about the late 445 stage at which we are consulted on European matters, but a more radical solution is available if we are prepared to review the Community's procedures and give the European Parliament greater power, particularly now that some Conservative Members have left it—it is now a much better place.
I wholeheartedly endorse the point made by my right hon. Friend the Member for Llanelli (Mr. Davies) about a separate body. We have in the Community a Court of Auditors which does a good independent job examining spending and fraud issues. This is an opportunity to do something similar in respect of monopolies and mergers and control of concentrations.

§ Mr. Maude
This has been a useful debate. The hon. Member for Bridgend (Mr. Griffiths), who referred to the lateness of the debate, said that it was late in the negotiation process.

§ Mr. Win Griffiths
I did not say that it was late this time.

§ Mr. Maude
I am grateful for that correction. We sought to bring this matter forward for debate and scrutiny at a proper time. There is still a great deal to be discussed. I think that the hon. Member for Newham, South (Mr. Spearing) would concede that we have done everything that we can to submit the proposal to proper parliamentary scrutiny. I warmly welcome the close attention that right hon. and hon. Members have paid. It has helped the Government as we take the discussions forward.
A number of my hon. Friends and other hon. Members talked about sovereignty, as though there were to be a transfer of sovereignty to the Commission under this measure. That is not the case, because the European Commission, under articles 85 and 86 of the treaty, already has such competence. It exercises it and is legally unimpeachable. If we manage to resolve the outstanding problems in this regulation, there will be an improved procedure.
Under article 18, the Commission would have to be in close and constant liaison with the competent authorities of the Member States". There is no such requirement on the Commission under articles 85 and 86. In addition, there would be an advisory committee of member states which would have to be consulted on matters including fines and decisions made by the Commission. The Commission would take the utmost account of the opinion of the decision given by the committee and would inform it of the manner in which its opinion had been taken into account. I hope that that gives some reassurance that, far from giving more power to the Commission, the measure would define the power to be exercised by the Commission and would stress that it had to be exercised in consultation with national authorities, both the competent authorities and the advisory committee.

§ Ms. Quin
rose—

§ Mr. Maude
I will not give way, if the hon. Lady will forgive me, because I have only two minutes left and it has been a lengthy debate. I would like to answer the points that have been raised.
My hon. Friend the Member for Southend, East (Mr. Taylor) urged us to publish a pamphlet if we managed to reach a satisfactory agreement. I can undertake that at such a juncture we would certainly propose to issue an explanatory leaflet. He is right that it is important that businesses should be told how these matters operate so that they can make their dispositions accordingly.
My hon. Friend also raised the matter of fines. The European Court of Justice would have the power to review fines upwards, as well as downwards, and would be given unlimited jurisdiction to enforce compliance with the regulation in the ways that I have described. It would, of course, be necessary for the Commission to be properly staffed before taking on these wider responsibilities.
The hon. and learned Member for Montgomery (Mr. Carlile) raised a number of issues. I am delighted to see that he has returned to the Chamber in time to hear the response to them. He mentioned the possibility that under the regulation it would be possible for wider matters to be taken into account than is possible under the national regulations. He referred to matters such as research and development, safety standards and environmental considerations. It is not the case that there is no scope for those matters to be considered under United Kingdom legislation. If a merger is referred to the Monopolies and Mergers Commission, it has a duty to take all the relevant matters into consideration in deciding whether the merger is in the public interest.
The hon. and learned Gentleman also mentioned article 20 and the issue of national interest. The wording of that article is still under discussion and the draft wording includes a consideration of the local markets of a member state and national interests are generally understood to include defence, media and prudential controls in insurance and banking. However, we accept that further consideration and negotiation is needed on that—