HC Deb 22 January 1997 vol 288 cc939-40
2. Mr. Hanson

To ask the President of the Board of Trade what representations he has received regarding takeovers and mergers in the electricity industry. [10588]

The President of the Board of Trade and Secretary of State for Trade and Industry (Mr. Ian Lang)

In the past six months, I have received some 80 representations regarding takeovers and mergers in the electricity industry. In addition, the Director General of Fair Trading has noted some 100 representations when advising me.

Mr. Hanson

Given that 50 per cent. of UK electricity companies are owned by foreign-based companies, does the Secretary of State feel that the Government have helped to defend the interests of British consumers by allowing the companies to be purchased? Is he aware that it is illegal for non-US citizens to buy shares in such companies in the United States?

Mr. Lang

First, I have had assurances from the American Secretary of Commerce, Mr. Mickey Kantor, that British companies can invest in electricity companies in the United States; and, secondly, the question of ownership does not affect the interests of the consumers. What matters to consumers is that the company is efficiently and competitively run. When the Labour party was last in power, electricity prices rose repeatedly by substantial amounts, but since privatisation, prices for both domestic and industrial consumers have fallen.

Mr. Couchman

Are there lessons to be learnt about hostile and predatory bids as referred to by my hon. Friend and neighbour the Member for Medway (Dame P. Fenner)? Does my right hon. Friend feel that those lessons might suggest that such actions, which are so detrimental to both companies and their customers, should be examined as a matter of urgency?

Mr. Lang

Of course I will take careful note of what my hon. Friend says and consider it, but what delivers the best results to consumers is a free and open marketplace in which competition is the yardstick by which the Government decide whether it is necessary to intervene in a merger or takeover bid. I have measured my responsibilities against that criterion of competition, and it is notable that, in almost all the decisions that have been taken, the Director General of Fair Trading, the Director General of Electricity Supply and I have been of one mind.