(Sefton Central)
(Lab):...The Secretary of State is reluctant to intervene,
as we saw with GKN. The Opposition had grave concerns about the
national security implications of the takeover by Melrose
of GKN. The Minister used the phrase “control” of
UK business; that actually describes some of the reasons why we
were so concerned with the way that the Government did not choose
to intervene in the takeover. He also used the phrase “dual use”,
which is one of the elements that the statutory instrument
covers. GKN has military and dual use in its
operations. The statutory instrument highlights those real concerns
about national security and the takeover. Perhaps the Minister can
give a response now or later on that point.
The Minister mentioned the export regime. Will he expand a little
on the implications of this statutory instrument for the
Government’s approach to exports? He did not mention the Green
Paper, but he did mention that a White Paper is coming forward
about primary legislation in the area of national security. My
understanding is that a Green Paper is also due on the wider area
of competition regimes. Perhaps the Minister will indicate when
he expects that to come forward.
There are concerns not just about national security; the public
interest tests around mergers and takeovers cover a number of
areas. The Competition and Markets Authority has a role to play
in deciding how to investigate—we saw that just this week with
the proposed merger of Asda and Sainsbury’s. With the White Paper
coming forward and perhaps the Green Paper that I mentioned, will
the Minister say whether the Government intend to make proposals
on an economic interest test, as well as on national security?
There are real concerns about some of the recent takeovers and
mergers, such as GKN and Asda and Sainsbury’s. These
changes would not have been relevant to Cadbury, BHS or Unilever,
but there are a number of takeovers and mergers where there is
great public interest and concern. Perhaps the Minister might
have some thoughts, in relation to what he has said, about some
of those takeovers, particularly GKN because it is relevant to national
security...
On GKN, it is fair to say that national
security—with or without this turnover threshold—was the ground
upon which this was reviewed. My right hon. Friend the Secretary
of State for Business, Energy and Industrial Strategy had a
quasi-judicial role in taking advice on the national security
aspects. I cannot tell the hon. Member for Sefton Central what
that advice was, because I do not know, as it was given in a
quasi-judicial capacity. However, I know that my right hon.
Friend invoked the clause whereby he got the national security
advice, I assume from the security services and others deeply
involved in this sector, and took the decision based on that
advice. All this statutory instrument does is simply to change
the threshold at which that advice would have kicked in, but I
would imagine that if the deal was very much smaller and caught
within this measure, the advice would have been the same.
The Parliamentary Under-Secretary of State for Business,
Energy and Industrial Strategy (Richard
Harrington): I think that what the hon. Gentleman
is really alluding to with his comments—he is taking a very
legitimate position, although I do not agree with it—is that the
Government should have a direct power, and not just through the
Competition and Markets Authority, which I will come on to in a
minute. He referred to it as an “economic benefit test”, whereby
the Government could get directly involved in investigating or
stopping a merger on grounds other than competition, which is the
power that the CMA has, and in a way that goes beyond the direct
powers that the Government have now. We have discussed one of
those powers today, which is about national security; another is
about control of the media, as in the Sky case, which is
obviously not relevant here.
That really is a political view. The Enterprise Act, which
governs this area, deliberately picks out national security and
media plurality—I think the other factor is financial
stability—and does not include powers other than those for
Government intervention. Much of what the Opposition has said
on GKN, on the urgent question the day before
yesterday and in the House of Lords yesterday has been based on a
whole new power to get involved on the basis of economic
benefit—a power that Governments used to have many years ago, and
which in the end really became political grounds to get
involved...
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