Accountancy Firms (Hansard, 31 January 1990)

§ Mr. Austin Mitchell
To ask the Secretary of State for Trade and Industry whether he was consulted by Sir Leon Brittan about the proposal to launch a European Commission inquiry into price fixing, monopoly practices, market shares and fee levels of the quality of audits into the accountancy profession.

§ Mr. Redwood
No. I understand that the Commission is asking outside consultants to conduct a study into the general implications for competition of the increasing concentration of the major accountancy firms. This is not a formal investigation under the competition rules of the EC treaty.

§ Mr. Austin Mitchell
To ask the Secretary of State for Trade and Industry whether he will be providing evidence for or contributing to the inquiry by the European Community Commission into price fixing and monopoly abuse in the accountancy profession; and whether he has any proposals for a similar inquiry in Britain.

§ Mr. Redwood
The United Kingdom authorities will of course give any assistance they can to those conducting the study. Neither I nor the Director General of Fair Trading have proposals for a similar inquiry in Britain.

§ Mr. Austin Mitchell
To ask the Secretary of State for Trade and Industry what new rules he proposes to deal with the concentration of audit business and the attendant inside information about mergers in a few large firms.

§ Mr. Redwood
My right hon. Friend the Secretary of State has available to him the merger control provisions of the Fair Trading Act 1973 to scrutinise mergers of major economic significance between accountancy firms. Auditors have a professional duty of confidence. If the hon. Member has any evidence of a breach of that confidence he should draw it to the attention of the relevant professional body; but if he has reason to believe that there might have been an insider dealing offence he should provide my Department with full details.
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§ Mr. Austin Mitchell
To ask the Secretary of State for Trade and Industry what powers he has to vet or investigate mergers of accountancy firms to prevent the concentration of power in a few firms in this area; and how many mergers or takeovers in this field he has referred to the Monopolies and Mergers Commission.

§ Mr. Redwood
My right hon. Friend the Secretary of State has the normal merger control powers available to him under the provisions of the Fair Trading Act 1973. In accordance with the advice of the Director General of Fair Trading, he has not so far decided to refer any mergers between accountancy firms to the Monopolies and Mergers Commission.