Questions in the Commons following Greg Clark’s statement on the proposed takeover by Melrose of GKN

Following Greg Clark’s statement regarding the proposed takeover by Melrose of GKN, Labour’s Rebecca Long Bailey asked why the Secretary of State had waited until the last minute to require commitments and she expressed concerns about the commitments given by Melrose, especially over defence contracts. She said Melrose’s commitments were “weak, late and unenforceable.”

Mr Clark agreed GKN was a very important company. That’s why it was important, over and above his statutory powers, to request commitments regarding their intentions. Melrose had said they were in discussion with the Takeover Panel, which was the correct course.

Rachel Maclean welcomed the commitment to maintain the GKN workforce in Redditch.

Drew Hendry questioned whether Melrose was only interested in asset stripping and wanted a guarantee that jobs would not go abroad. Mr Clark said the model of short-term ownership was of concern. He added that the MoD would advise him if there was a case for intervention on national security grounds.

Chris Skidmore wanted an assurance there would not be a repeat of the Kraft/Cadbury takeover.

Rachel Reeves, chairman of the BEIS committee, asked why this statement was being made so late in the day.

Jack Lopresti said Mr Clark’s statement would give some comfort to GKN workers in his constituency. He added it was vital to maintain our sovereign defence capability.

Jack Dromey said the takeover was wrong. The guarantees did not go far enough and further commitments were needed.

Luke Hall and Stephanie Peacock asked for reassurances over pensions.

Replying to Kevin Foster, Mr Clark understood there had been discussions between Melrose and the MoD about defence contracts.

Layla Moran called for the public interest tests should be looked at again, especially regarding R&D.

Jeremy Leroy said the bid was not in the long-term interests of British industry. Mr Clark agreed long-term commitments were important.

Adrian Bailey asserted the Melrose commitment not to sell the GKN aerospace division before 2023 fell well short of the investment cycles of 20 to 30 years needed in that industry.

Lucy Allan questioned Melrose’s proposed special dividend sweetener to shareholders of over £1 billion while only making small contributions to the pensions deficit.

Mr Clarke agreed with Jim Cunningham who said commitments on defence contracts needed to be long-term.

Richard Burden pointed out that most of Melrose’s commitments expired over five years. Mr Clark said it was not for him to evaluate the bid, given his quasi-judicial role. But it was right for him to ask Melrose to set out their intentions.

Kelvin Hopkins called on the government to stop the merger.

Wayne David said Melrose’s commitment on defence contracts was weak.

Kevin Jones asked about protection of GKN’s intellectual property.

Paul Sweeney called for a redefining of company law in favour of the interests of British industry over the interests of shareholders.

Darren Jones commented that the five year commitment was not long enough.

Vernon Coaker asked about commitments about defence contracts.

Frank Field called on the government to pay attention to the interests of pensioners and block the deal if they are not met. Mr Clark said it was for the Pensions Regulator to express her view.