§ 6. Mr. Wareing
To ask the President of the Board of Trade how many successful takeover bids have been notified to him in the last five years; and what information he has on the number of takeovers in Germany during the same period.
§ The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Jonathan Evans)
There is no requirement for takeover bids to be notified and we keep no records of successful bids. Over the last five years, around 1,000 mergers qualified for investigation under the Fair Trading Act 1973, while more than 7,000 mergers were notified to the German competition authorities.
§ Mr. Wareing
I believe that there are more than 40 contested takeover bids per year in Britain, compared with fewer than 40 in a decade in Germany. Is not the 331 ease with which takeovers can take place in this country a basic reason for the short-termism and the lack of investment in British industry? What are the Government's proposals to deal with this? For example, they could restrict the voting rights of shareholders or—more importantly, so far as I am concerned—they could set up supervisory boards on which workers could have a say. What happened to the Dorrell inquiry set up by the Government?
§ Mr. Evans
The hon. Gentleman's perception of the distinction between the German and British systems is incorrect. Under German rules, all takeovers must be notified. In Britain, some 2 per cent. of qualifying mergers which are considered by the competition authorities result either in the bid being blocked or in undertakings being required, compared with only 0.5 per cent. of those examined in Germany.
§ Mr. Duncan Smith
Does my hon. Friend agree that one of the features of a free market is that the Government do their level best to keep out of the natural coming together and breaking apart of businesses unless a monopoly is being created? The Opposition should be exposed: they believe that the Government should be involved in every one of the mechanisms, thus distorting the market.
§ Mr. Evans
My hon. Friend is right that the mere fact that a bid may be hostile is not a reason to refer it. The Government's view is that competition is the primary factor that should be the subject of examination. Of course, where necessary, the public interest also has to be considered by my right hon. Friend the President of the Board of Trade.
§ Dr. Moonie
Is the Minister aware of growing anxiety in the medical research community about the takeover of Wellcome by Glaxo? Has he sought any assurances from Sir Richard Sykes about the level of research in both companies following any proposed merger? What advice will the Department give to the European Union when the bid is submitted to it for reference?
§ Mr. Evans
I shall not pre-empt the outcome of the issue, which may be considered by the appropriate competition authorities. I am sure that in those circumstances the hon. Gentleman will make his representations clearly. The Government have a record that is second to none on support for the medical research community.
§ Mr. Batiste
Will my hon. Friend confirm that many of Britain's most successful companies today are the result of takeovers and bids in the past? Does he agree that that is an integral part of the dynamism of a successful market economy? Does not the original question to my hon. Friend demonstrate how little the Labour party understands about market economics?