VSEL (Hansard, 23 November 1994)

§ 10. Mr. Mans
To ask the President of the Board of Trade what representations he has received concerning the proposed takeover of VSEL by GEC.

§ The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Jonathan Evans)
It is for the Director General of Fair Trading to consider this proposed merger and to advise my right hon. Friend the President of the Board of Trade under the Fair Trading Act 1973 whether the merger should be referred to the Monopolies and Mergers Commission. All representations received by the Department of Trade and Industry are being forwarded to the Office of Fair Trading.

§ Mr. Mans
I congratulate my hon. Friend on being appointed to his new post. Bearing in mind the near monopoly that would result if this bid were allowed to go 590 ahead, will my hon. Friend give serious consideration to submitting it to the MMC, should the Office of Fair Trading consider that that is the right way to proceed?

§ Mr. Evans
I am grateful to my hon. Friend for the warmth of his welcome. At this stage, it is the job of the Director General of Fair Trading to investigate those cases, but he is willing to receive views from all interested parties and I am sure that my hon. Friend will pass his observations to him.

§ Mr. Davidson
Does the Minister accept that people are anxious about the possible takeover of VSEL not only by GEC but by British Aerospace, particularly about the impact that it might have on Yarrow's on Clydeside? Would not it be far better for the Government to make it clear now that they will refer neither bid or both bids, but will not discriminate in favour of one bid as opposed to another?

§ Mr. Evans
As I have already said, at this stage it is a matter for the Director General of Fair Trading, but I am sure that the competition authorities will pay close attention to all the views expressed. I have no doubt that the hon. Gentleman will join my hon. Friend the Member for Wyre (Mr. Mans) in making representations to that quarter.

§ Mr. Nicholas Winterton
I wish to advise the House that Avro International, the regional jet division of British Aerospace, is located on the periphery of my constituency and is therefore a vital employer in the Macclesfield borough. If GEC succeeds in taking over VSEL, it will create a virtual monopoly in shipbuilding, which cannot be good for the defence pound and its purchasing capacity. Will my hon. Friend take on board the fact that many Conservative Members are strongly opposed to GEC's bid and will do everything possible, in representations to the Government and the Office of Fair Trading, to point out the problems that would result if GEC were successful?

§ Mr. Evans
My hon. Friend is an experienced Member of the House and will therefore appreciate that, at this stage, I cannot discuss specific issues raised by the merger. He will have heard the observations that I made to other hon. Members and I am sure that the strength of opinion that he has expressed will be made clear to the Director General.

§ Dr. Moonie
Surely the Minister is aware that the bid has considerable repercussions for other parts of the defence sector and that there must be a question mark over whether a successful company like VSEL should be taken over by either of the potential bidders. My hon. Friends and I find it incredible that his Department is prepared to make no recommendation whatever to the Office of Fair Trading, nor to say that it will refer both bids to the Monopolies and Mergers Commission if the need arises. Is not there a role for the Government, other than holding their jackets?

§ Mr. Evans
The hon. Gentleman's question shows a remarkable lack of understanding of the process of considering these matters. The Director General of Fair Trading makes a recommendation to the President, rather than the other way round. Once that recommendation has been made, the matter will fall for decision within the purview of my right hon. Friend the President, but not until that time.