HC Deb 03 July 1991 vol 194 cc309-10
11. Sir Michael Neubert

To ask the Secretary of State for Trade and Industry what attention he pays to the degree of state control when deciding whether to refer mergers to the Monopolies and Mergers Commission.

Mr. Lilley

I restated the Government's policy towards mergers, as I said earlier, on 12 June.

Sir Michael Neubert

Does my right hon. Friend accept my assurance that, in paying close attention to the degree of state ownership or state control of foreign companies or others making takeover bids, he is seen as exercising entirely proper concern for fair competition and the need to avoid nationalisation by the back door? Will he accept that the British people have no more liking for imported socialism than they have for the home-grown variety?

Mr. Lilley

My hon. Friend puts it very well. Our privatisation programme has proved the superiority of competitive private enterprise over state monopoly ownership. That is why we encourage the private sector and are against the extension of the state sector, whether it be from home or abroad.

Mr. Salmond

Given the recent announcement, is the Secretary of State prepared to reconsider the case for the referral of British Steel's activities to the Monopolies and Mergers Commission? Has he discussed such a possibility with the Secretary of State for Scotland? Given that and so many other important questions that need to be asked about the Secretary of State for Scotland's role in the steel industry closures in Scotland, is not it disgraceful that that right hon. Gentleman will not be attending the debate tomorrow because he is too fully occupied having strawberries and cream at Holyrood Palace?

Mr. Lilley

That was a typically pathetic riposte at the end of the hon. Gentleman's question. The hon. Gentleman would debilitate Scottish industry if he got the chance by subjecting it largely to state ownership. The gist of this question is that we should be protected from state ownership where we can. I am sorry that the hon. Gentleman thinks that state ownership is the answer to all his problems.

I make the decision about referrals to the MMC after taking advice from the Director General of Fair Trading. On the general well-being of British industry, when it refers to Scotland, I discuss it with my right hon. Friend the Secretary of State for Scotland and we deal with those matters together.

Mr. Conway

Will my right hon. Friend remind the House at what level such mergers must be referred to the European Community? Does not the low level that has been set show how much sovereignty has passed from the House to the continent?

Mr. Lilley

My hon. Friend is quite correct. We faced a dilemma. Under the treaty of Rome, the Community could intervene after we made monopoly and merger decisions. We therefore faced double jeopardy. We think that it is better for mergers of 5 becu or more to be handled by the Community and for those below that figure to be handled by national Governments. Logically, there is no need for Community interference, as a Europewide monopoly would be a monopoly in at least one member state. As we started from the position written into the treaty of Rome, the present arrangements are very much better than the double jeopardy arrangements and are a satisfactory second best.