Mr. Bruce Milan (Glasgow, Craigton)
I beg to move,That this House condemns the decision of the Minister for Trade to overturn the recommendation of the Monopolies and Mergers Commission that the takeover bid by Charter Consolidated for Anderson Strathclyde should not be permitted as being against the public interest and likely to have an adverse effect on employment, management effectiveness and labour relations; deplores the failure of the Secretary of State for Trade to declare his interest when the reference to the Commission was made; and expresses its support to the management, trade unions and workforce of Anderson Strathclyde in their unanimous opposition to the takeover and their determination to preserve Anderson Strathclyde as an independent, highly efficient and profitable engineering company.The debate deals with the Government's decision to overturn the recommendation of the Monopolies and Mergers Commission that the takeover of Anderson Strathclyde by Charter Consolidated should be prevented from going ahead. If that bid succeeds, the net result is that a good, independent and well-managed Scottish company, with an excellent record in every category of its activities, will be taken over by a multinational controlled from overseas that is unwanted in Scotland and will remain unwanted in Scotland. The Government's decision has led to widespread hostility from the date of the announcement to the present, and that hostility has not abated one little bit in the past two or three months. The hostility has come from the management of Anderson Strathclyde, the chairman, the directors, the rest of the management, the work force and the trade unions who represent them.
The Government's decision has been widely criticised in the press, especially in Scotland, but not exclusively, because it is not exclusively a Scottish issue. The Government's decision goes against the express wishes and views of the Scottish Development Agency, the Scottish Council and virtually every strand of Scottish opinion. The decision has met with resistance from local authorities, which have continued their opposition to this day. Indeed, they met Ministers this afternoon. They had an interesting meeting with the Secretary of State for Scotland. As I understand the account of that meeting, when the local authorities expressed their bitter opposition to the takeover, the Secretary of State for Scotland agreed with them. He said that he stood by the evidence that was given to the Monopolies and Mergers Commission by the Scottish economic planning department. Hon. Members can read what that evidence was. It is contained in pages 43 to 45 of the report.
If the Secretary of State stands by that evidence, he is against the Government's decision. As the Secretary of State is in the Chamber, I put that point to him. Unfortunately, he is not going to take part in the debate. Hon. Members will wonder why. He is hiding behind the Minister for Trade, who will open the debate, and then he will hide behind one of his Under-Secretaries, who will reply. Is the Secretary of State in favour of the Government's decision? Does he support the decision that the Minister for Trade has taken on this matter?
§ Mr. Millan
Typically, the Secretary of State is dodging the issue. He gave bland assurances to the local authorities as recently as this afternoon, but when he is 774 asked publicly to state his views he dodges the question. Hon Members can assume only that the Secretary of State's presence means that he approves of the Government's decision on the takeover of this thriving Scottish engineering company.
§ Mr. Millan
The hon. Gentleman is not the Secretary of State and is not likely to be—not that he would not be an improvement on the present one. The Secretary of State is sheltering behind the Minister for Trade and the Under-Secretary of State for Scotland.
When this bid was originally made, Conservative Members were anxious to express their support for Anderson Strathclyde. The secretary of the Conservative group in the House, with Labour Members and those from the Scottish National party, saw the Director General of Fair Trading to ask that the merger should be referred. What has happened to the Scottish Tories since the announcement was made on 21 December? They have reneged on the commitments that they made at that time to defend the interests of Anderson Strathclyde. If they have any guts at all, some of them will defend Anderson Strathclyde in this debate.
§ Mr. Henderson
I thank the right hon. Gentleman for giving way as he has referred to Conservative Back Benchers. Does he accept that there can be support for Anderson Strathclyde without necessarily agreeing to Government intervention?
§ Mr. Millan
That is an example of Scottish Conservative Members defending Scotland's interests. That is typical of the way they behave.
The report and the decision raise many major issues about mergers policy, which I do not have time to speak about tonight. The Labour party will want to return to that subject on some future occasion. The Government's mergers policy is in a muddle. Britain has one of the most concentrated industrial patterns in any part of the industrialised world and much good it has done us in terms of industrial production and prosperity over the years. Most mergers, as is known from experience, do not have the advantages claimed for them at the time that they take place. This country must tighten up its merger laws and those wishing a merger to proceed must prove positive advantages, rather than those who oppose a merger having to demonstrate that there will be positive disadvantages. Those are issues that can be returned to on a future occasion. The Government's mergers policy is in an absolute mess.
Another major issue is the behaviour of the Secretary of State for Trade, Lord Cockfield. Unfortunately, because he is in the other place, he is not present to defend himself. The Government have pretended to act with candour in this affair. However, the last thing that Lord Cockfield has acted with is candour. His lack of candour has been supported by other Ministers. Lord Cockfield was appointed to his office on 6 April 1982. 30 April is the first relevant date when the bid was mooted. It was not until 25 May that he took some action about freezing his shares in Charter Consolidated. That occurred three weeks after the bid had been announced. The reference was made on 3 June by Lord Cockfield himself. I have the press notice with me. There is no mention in that notice or in any other document at that time that Lord Cockfield had an interest in Charter Consolidated.
775 The House was not told of that fact, and it should have been at the time of the reference on 3 June. That was bad enough. When the statement was made by the Minister for Trade on 21 December, saying that he was rejecting the recommendation of the Monopolies and Mergers Commission, there was no mention in that statement that Lord Cockfield did not take that decision because he had an interest in Charter Consolidated. Nor was there any mention that his junior Minister—the Minister for Consumer Affairs—who normally deals with these matters, was not taking the decision because he had been lobbied on behalf of Charter Consolidated. It was because my hon. Friend the Member for Motherwell and Wishaw (Dr. Bray) asked why the Minister was making the statement that the House learnt quite by chance that Lord Cockfield had an interest in Charter Consolidated. That fact was not willingly disclosed to the House and neither was it disclosed to anyone else.
That raises the problem of ministerial rules about shareholdings. No doubt some of my hon. Friends will wish to pursue that matter later on in the debate. Whether Lord Cockfield's integrity is in question or not, his lack of candour as a Minister is absolutely deplorable. The Government's lack of candour on this matter has also been absolutely deplorable.
The evidence given to the Monopolies and Mergers Commission on this takeover was overwhelmingly against it going ahead. If the record of Anderson Strathclyde is compared with the comparatively poor industrial record of Charter Consolidated, it is possible to see why the evidence was overwhelmingly in favour of Anderson Strathclyde.
Whether one looks at Anderson Strathclyde's sales, which have expanded rapidly in recent years; its export record; its new technology, using some of the most sophisticated technology in the United Kingdom under the flexible manufacturing system; its profitability; the quality of its management and labour relations; the efforts that the company makes in training its work force, or its efforts to sub-contract work to other firms in the west of Scotland, it stands out as an absolutely first-class independent Scottish engineering company. By comparison, Charter Consolidated's record is poor. That company does not have a record for dealing with its industrial subsidiaries in a way that leads to profitability.
When the Monopolies and Mergers Commission had heard the evidence given to it, its majority view was that the merger should not be allowed to go ahead. One might have expected that to be the end of the story. Never before has such a recommendation from the Monopolies and Mergers Commission been turned down by the Minister of the day. What has happened is unprecedented. This is the first time that the Government, have turned down a recommendation. Having heard the evidence, the commission found that if the merger went ahead, the adverse affects cited on page 68 of its report would be felt. There would be an adverse effect on the management effectiveness of the company and on its labour relations. The merger would diminish effective competition in the supply of goods and would havean adverse affect upon employment in a relatively depressed part of the United Kingdom.Given the level of unemployment in the Strathclyde region under this Government, I like the phrase 776relatively depressed part of the United Kingdom".However, those were the findings of the Monopolies and Mergers Commission.
The commission also said that there were no compensating advantages to set against those adverse effects. It said that there was nothing that Charter Consolidated could do that Anderson Strathclyde was not perfectly capable of doing itself, and has been doing without the help of Charter Consolidated. Indeed, Charter Consolidated has had a director on the board for the past couple of years, because of that company's holding in Anderson Strathclyde, but he has not contributed anything to that company's success. For all those reasons, the Monopolies and Mergers Commission reached its decision.
I should make it clear that that decision did not mean that the commission was asking for the so-called ring fence to be put round Scotland. None of the evidence from the company, the Scottish Development Agency, the Scottish Council or the Scottish Office argued for a ring fence round Scotland. Indeed, I am not arguing for such a fence tonight. However, it is perfectly proper to take account of regional considerations, because they are rightly specifically provided for in the Fair Trading Act. Those of us who have experience of good Scottish companies being taken over by foreign companies or by companies in other parts of the United Kingdom have very bitter recollections of what has so often happened to those thriving Scottish companies, despite all the assurances given at the time.
However, we did not use the ring fence argument in relation to the report, and I do not use that argument tonight.
§ Mr. Michael Ancram (Edinburgh, South)
As the right hon. Gentleman is not arguing for the ring fence round Scotland, will he tell us in what circumstances he would support the takeover of a Scottish company by an outside company?
I would support a takeover if there were advantages in it for the company being taken over or if there were any advantages for Scotland, but in this case it is all disadvantage and there is nothing by way of advantage. If the hon. Member for Edinburgh, South (Mr. Ancram), who is chairman of the Tory party in Scotland, has the interests of Scotland at heart, he will be in the Lobby with us tonight.
The minority report, which rejected the views of the majority, was so poor that one of the commission's members, Professor Bain—a well-respected figure in Scotland and a distinguished economist—resigned. The minority report said that there was a lot of speculation and that it did not believe that there would be any damage to management morale. Can the Minister honestly say that damage has not been done to management morale in the past two and a half months? Anderson Strathclyde should be doing the job in production, sales, exports and so on that it was set up to do, yet it has to spend its time fighting off an unwanted predator. That is damaging to management. The merger has also damaged industrial relations. Today, the trade unions have said that the unique agreements that they have with Anderson Strathclyde will not be persisted with if the company is taken over by Charter Consolidated.
The chairman of the commission said that there was nothing to worry about as far as industrial relations were concerned, but he was not even at the meeting of 777 commission when evidence was taken from the trade unions. He just did not attend that meeting. He was in no position to make a judgment, but he did so nevertheless. His judgment has proved completely wrong, just as the minority report's judgment that Charter Consolidated would not interfere with management decisions has been proved wrong. Charter Consolidated has tried to stop or to modify the acquisition of the National Mine Service Company of America by the management of Anderson Strathclyde. To say that after the takeover—if it goes ahead—everything will continue as before, and that the new owners will never interfere in any way, is rubbish. What is the point of the takeover unless in certain circumstances the new owners intend to intervene? Ultimate decision-making will be removed from Scotland to Charter Consolidated and ultimate control will rest not with the directors in London but with interests in South Africa.
The Government have given their reasons for turning down the recommendations. In addition to accepting the minority report, they said that the merger would give Anderson Strathclyde more access to capital. However, that was not even the reason given by the minority report. There was no suggestion in the minority report that that was a good reason for allowing the takeover. It is a bogus argument, and that is demonstrated by the large sums of capital involved in the acquisition of the National Mine Service Company of America, which is being undertaken without any difficulty by Anderson Strathclyde and without any financial assistance from Charter Consolidated.
Of course, the real reason for the Government's decision has not been given by the Minister for Trade. Indeed, I do not suppose that he will give us the reason tonight. The real reason—as I said on an earlier occasion—is that the Government have caved in to City interests. Those interests were dismayed and angered by what happened over the Royal Bank of Scotland attempted takeover. Allowing this takeover is an act of revenge and Anderson Strathclyde is being made the sacrificial victim because there are interests in the City that are supported by the Government that do not like interference in the operation of free market forces and, in particular, did not like the suggestion that an independent company in Scotland should be allowed to escape the rapacious attention of the City interests that Charter Consolidated and the other banks involved in the Royal Bank of Scotland takeover, represent. That is why the Government took the decision that they did.
The Government obtained the assurance that the registered company would stay in Scotland, but it is not even possible to move the registered company from Scotland. From his experience of business and company law, the Minister for Trade must know that his assurances are meaningless, because the whole of the company's operations could still be removed from Scotland. The fact that the registered office is in Scotland means nothing in itself. Of course, the Minister for Trade did not ask for any other assurances. I have had that confirmed again by a little meeting that he had with the local authorities earlier today. Indeed, it is not a question of not getting the assurances, because the Minister has never even asked for them. There is nothing in his statement and there is nothing in what has been said to the House by him or by the Prime Minister to suggest that he has asked for any assurances 778 about the continuation of Anderson Strathclyde as a genuine Scottish company, located in Scotland with its interests basically identified with those of Scotland.
The present position is that a bid from Charter Consolidated is outstanding. That bid will be decided on Thursday of this week. I hope very much that the shareholders of Anderson Strathclyde, who until now have supported what has been a very good management from their point of view, will continue to give that support and will turn down this bid so that it will not be accepted by the deadline date of 24 March.
There are still actions that the Government can take. The Government have been saying "We made the announcement when we took the decision but there is nothing that can be done now because it is all in the lap of the shareholders. What can we do? The debate has come too late." That comes from a Government who have steadfastly refused to have this debate, which is taking place in Opposition time. What humbug and hypocrisy it is for them to say "It is coming too late; what can we do?" But, so far as I can see—I hope that the Minister for Trade or the Under-Secretary will answer the point at the end of the debate—there is nothing in the Fair Trading Act 1973 to prevent the Minister for Trade from revoking the decision that he made on 21 December and deciding now, as I hope the House will press him to decide, to prevent this takeover going ahead. If, by Thursday of this week, this bid fails, it would be absolutely monstrous if the Government were to allow a further, higher bid to be made by Charter Consolidated.
The Government can step in now under the Fair Trading Act or under the Industry Act 1975, which has specific provisions to allow the Government to intervene where a major manufacturing facility in the United Kingdom is being taken over by a company controlled from abroad. Charter Consolidated is controlled from abroad—35.8 per cent. of its shares are held by a company, Minorco, which is located not in the United Kingdom but in that other thriving industrial country, Bermuda, a tax haven. Minorco itself is controlled ultimately by Anglo-American and De Beers, which are South African companies. Therefore, under the 1975 Act, the Government could intervene if they so desired. What is missing in this sorry affair is not the legal ability to intervene but the will on the part of Government to intervene. If they had the will they could act even now, despite the history of the past few months.
This has been a shabby affair ever since the Government made their decision on the Monopolies and Mergers Commission report. There is still time for the Government to redeem themselves, and if they had any vestige of decency they would do so tonight. In particular, there is still time for Tory Scottish Members of Parliament who, if they had any honesty and real concern for the interests of Scotland, would do something practical for Scotland by their votes in the Lobby this evening. I challenge them to join the Opposition in the Lobby to condemn the Government's behaviour and their miserable and squalid action in this affair. It can still be redeemed, and I ask my right hon. and hon. Friends to join me in the Lobby tonight.
§ The Minister for Trade (Mr. Peter Rees)
We have heard a highly charged speech from the right hon. Member for Glasgow, Craigton (Mr. Millan). [Interruption.] We 779 shall see how devastated Conservative Members are before we arrive at a premature conclusion of the outcome of the debate. The right hon. Gentleman gave us a slightly inaccurate account of company law. He also overlaid it with highly charged statements. He said that the Government had caved in to City interests and that they had given way to an act of revenge.
I hope that I can make a rather less highly charged intervention. I hope that the House will forgive me if I approach the debate in a lower key. Indeed, I hope that I may be allowed to remind the House how the Fair Trading Act 1973 operates in relation to mergers—a matter which the right hon. Gentleman, with all his knowledge of accountancy and company law, shirked. In a sense, the Act dictates how a Minister should approach a decision of this type.
I say at once that I could foresee that this was likely to be a sensitive decision. I could foresee sensitivities north of the border. Although the right hon. Gentleman has disclaimed that this is a particularly Scottish debate, one has only to look at the Opposition Benches to note the limited representation of other parts of the United Kingdom. For all his disclaimers, the right hon. Gentleman is attempting to make this a Scottish debate and, as a Member representing an English constituency, I tip-toe in with a certain diffidence. However, I must master this diffidence and perhaps try to develop my main theme.
§ Mr. Rees
I remind right hon. and hon. Members on the Opposition Benches that mergers, other than newspaper mergers, can be referred to the Monopolies and Mergers Commission if there is a monopoly situation. It is agreed—I did not hear anything to the contrary from the right hon. Gentleman—that no such situation is likely to be created here. Mergers can be referred to the Monopolies and Mergers Commission where the value of the assets taken over exceeds £15 million. That is the case here. The commission is required to consider whether a merger situation following an investigation has been created—again, it is common ground that such a situation was created—and, if so, whether the creation of that situation operates or may be expected to operate against the public interest. That is the issue that I must consider. That is the issue, I diffidently suggest, on which the House should focus tonight.
I should like also to emphasise that there is no obligation on any Minister in my Department to make such a reference and, if no reference is made, the merger goes through. As the right hon. Gentleman seems to be so exercised on this question, perhaps he will recognise that there was a reference to the Monopolies and Mergers Commission. I shall examine the outcome in a moment.
If the commission finds that the merger is not likely to operate against the public interest, the merger goes through without any further intervention by a Minister. If the commission reports that a proposed merger is likely to operate against the public interest, it falls to a Minister in my Department to consider the recommendation, to take account of any advice given to him by the Director General of Fair Trading and to consider whether the prejudicial effects of the merger can be remedied or cured in any way. The right hon. Gentleman obviously had close, not to say 780 instant, communication with the very distinguished group that came to see me at 6 pm and elicited from it that I said that I saw no way in which further assurances by Charter Consolidated could have assisted the situation. I think that I was in good company in reaching that conclusion, because that was the conclusion of the majority of the Monopolies and Mergers Commission. If the House doubts that, I refer it to paragraph 9.24 of the conclusions. That was the majority conclusion, but one assumes that the whole of the panel on that occasion devoted some thought to the possibility and concluded that no assurances could reasonably be asked which would cure the difficulties to which the majority drew attention and which the right hon. Gentleman has properly highlighted.
That was the position in which I found myself. I am bound to observe that, when I made my statement about the report on 22 December, many bad legal points were made about the Act.
§ Mr. Peter Archer (Warley, West)
The Minister referred the House to paragraph 9.24, where the commission said that no assurances could prevent adverse effects arising. It did not say that if, nevertheless, the Minister intended the merger to go through there were no assurances that might at least mitigate the effects.
§ Mr. Rees
I had no intentions either way, as I shall develop shortly. If the right hon. and learned Member for Warley, West (Mr. Archer), who has an acute and well-framed legal mind—[Interruption.] I did not realise that hon. Gentlemen grudged my paying a tribute to a member of my profession who has occupied a distinguished place in Government as a Law Officer. I shall leave him to argue that out. [Interruption.] Right hon. and hon. Gentlemen are in a singularly churlish mood.
§ The Secretary of State for Scotland (Mr. George Younger)
That is nothing new.
§ Mr. Rees
I am not privileged to take part in Scottish debates. This is a bit of an eye-opener to me. I am bound to extend my sympathy to my right hon. and hon. Friends who have to put up with this behaviour on all too many occasions. I only wonder at their continuing good humour.
We cannot devise any action which could have taken place for the purpose of remedying or preventing adverse effects. That would be a disadvantage if the merger took place.
If the Monopolies and Mergers Commission, after considerable thought and having looked at the matter dispassionately, could not find any assurances that could be asked for or any countervailing measures of that kind, it would have been idle for me to extract such assurances. I shall leave the right hon. and learned Gentleman, who I believe will seek to catch your eye, Mr. Deputy Speaker, to ponder a little more closely paragraph 9.24. He will then perhaps see the validity of my point.
Many bad legal points were made in December. It was suggested that I was bound to accept the decision of the majority of the Monopolies and Mergers Commission and that the only person who could decide on the report was my right hon. Friend the Secretary of State. I need only remind the House that these and many other points were put to the Divisional Court of the Queen's bench division by Anderson Strathclyde's counsel and were found to be utterly baseless. It is plainly for that reason that the Opposition have changed their ground to a singular degree.
781 I know that some hon. Gentlemen have scant regard for the courts, but the Government propose to operate by this country's laws, even if right hon. and hon. Gentlemen propose to operate outside the law.
§ Mr. Deputy Speaker (Mr. Bernard Weatherill)
Order. The right hon. Member for Glasgow, Craigton (Mr. Millan) had a fair hearing. The House must give the Minister a fair hearing.
§ Mr. Maxton
On a point of order, Mr. Deputy Speaker. Is it in order for the Minister to imply that Opposition Members break the law? It is an implication that the Minister should withdraw now.
§ Mr. Deputy Speaker
Order. Many hon. Members wish to take part in this important debate. Points of order will take up a great deal of time unnecessarily.
§ Mr. Rees
I shall move on from the legal issues that so exercise hon. Gentlemen below the Gangway. I suggest rather diffidently that the issues for debate are rather different.
I remind the House again of the facts. During the course of 1980 Charter Consolidated bought 10,775,000 shares in Anderson Strathclyde—28 per cent. of the equity. I should correct one fundamental error that has vitiated the analysis of the right hon. Member for Craigton. Charter Consolidated is not controlled, as far as we have been able to determine, from outside the United Kingdom. The right hon. Gentleman, as a trained accountant, should know that it would need a majority of the voting shares to pass control outside—
Under the 1975 Act, which I quoted, 30 per cent. allows intervention by the Government. In this case, Minorco has 35.8 per cent.
§ Mr. Rees
That was not the point that I was making. The right hon. Gentleman was trying to convey that Charter Consolidated was an alien company controlled from outside the United Kingdom. There may be a special definition in the Act to which the right hon. Gentleman refers. As "control" is generally understood, Charter Consolidated is controlled from within the United Kingdom.
As a consequence of the acquisition of shares, Charter Consolidated's finance director was appointed a non-executive director of Anderson Strathclyde in September 1980. In April 1982 Charter Consolidated made a bid for Anderson Strathclyde's remaining shares, which was rejected by Anderson Strathclyde's board. On that occasion Charter Consolidated's director had absented himself from the board's deliberations. On 2 June 1982 the proposed merger was referred to the Monopolies and Mergers Commission. At the end of November the commission reported to me.
The majority—four out of six—recommended that the merger should not be permitted on the ground that it might be expected to operate against the public interest. A minority of two, which included the chairman of the commission, dissented strongly from that conclusion. It was in those circumstances that I had to consider the appropriate decision.
§ Mr. Foulkes
Does the Minister think it significant that the chairman of the commission comes from the tax haven of Jersey; that Lord Cockfield has a home on the Isle of Man, where he has this so-called privileged anonymity; and that Charter Consolidated has a large number of shares in a company in Bermuda? Is that not an interesting reflection on the kind of people and interests on the Conservative Benches?
§ Mr. Rees
It does not fall to me, nor, I suggest, to the right hon. Member for Craigton, to commend one company rather than another, or to comment on the track records, profitability, labour relations or the quality of management of either company except and in so far as any of those factors might be said to tell against the public interest.
The onus was and is on those who assert that this merger might prejudice public interest to establish their case, as, in effect, they are suggesting that I should take away the right of Anderson Strathclyde's shareholders to decide whether they will accept Charter Consolidated's bid. Strong evidence would be needed before I should take away that right. If the action that I took is approved by the House, it would still be open to Anderson Strathclyde's board to persuade its shareholders that the bid should be rejected. [Interruption.] For all the sound and fury and synthetic indignation from the Opposition Benches, the bid is not yet concluded. One of the ironies of the case is that at the moment the stock market price of Anderson Strathclyde's shares is a couple of points only below the latest offer price by Charter Consolidated. It is not for me to comment upon the implications of that.
I shall deal with the points on which the majority of the commission rested its conclusion. The first point was the adverse effect upon the management effectiveness of the company. The right hon. Member for Craigton said that the management was utterly distracted by the bid. Regrettably, that is a facet of a number of contested takeover bids. I did not, however, find that this was a point that oppressed previous Socialist Administrations. I note that the majority of the commission pointed out that this would result only in a short-run diminution in the management's effectiveness. The majority suggested that in the long run there might be conflicts of personality or policy, but that can happen in the best run companies, with or without a takeover. It is certainly the case in many contested bids. I do not attach overwhelming importance to that point.
The second point was the adverse effect upon labour relations. I am genuinely delighted that the existing management should have established such close ties with its work force. However, even the majority of the commission emphasised that any threat to this must depend upon whether there would be a change in management personnel or style. I am not prepared to assume that those changes would necessarily take place in the short term. I do not see why I should make that assumption.
The third point was that the merger would tend to diminish effective competition in the supply of goods, be contrary to the interests of purchasers of goods in the 783 United Kingdom and not promote competitive activity by Anderson Strathclyde in markets outside the United Kingdom. I notice that the right hon. Gentleman did not comment on this important point. Perhaps his right hon. and learned Friend will do so. In paragraph 9.5 the majority reported thatthe proposed merger would not in itself have a direct effect on competition between persons supplying goods in the United Kingdom.I can find no compelling evidence about the effect in markets outside the United Kingdom. The suggestion that the merger might have an effect on competition is not sustained, even by the conclusions of the majority.
The fourth point was that, even if Anderson Strathclyde's efficiency and commercial success were not adversely affected by the merger, it would have detrimental effects on the Scottish economy. I well understand the sensitivity of right hon. and hon. Members on both sides of the House about that point, but those matters have to be judged in the round. Many factors must be taken into account.
In passing, I draw attention to the fact that three of Anderson Strathclyde's works, admittedly forming the smaller part of its business, are not situated in Scotland. More fundamentally, there seems to be an unusual lack of confidence in Scottish entrepreneurial skills and dynamism. Are we to take it that there will be only a guarded welcome from Opposition Benches to overseas corporations that wish to set up subsidiaries in Scotland? Are we to take it that the right hon. Gentleman is not pleased by the proposal of Mitsubishi to set up in Livingston or Haddington?
§ Mr. Rees
I shall not give way. I want to finish this point.
Are we to take it that if the Labour party, contrary to every hope and expectation, returns to power, it will reverse its policies of nationalisation and, for example, break up the British Steel Corporation or the National Coal Board into autonomous regional companies? For the right hon. Gentleman to advance the general proposition that the Labour party is against mergers is to fly in the face of the Labour party's history in that regard. While I am grateful to the members of the commission and while I am reluctant to criticise the conclusions of any members of the panel that considered the case, I am bound to say that I was not persuaded by the conclusions of the majority—
§ Mr. Rees
The hon. Gentleman obviously lived in Sicily, not Scotland, for most of his formative years.
784 I am also fortified in the view that I have reached by the advice that I have received from the Director General of Fair Trading. I have a discretion in this matter, as the courts have found. I could hardly found a confident decision on the divers conclusions of the Monopolies and Mergers Commission in this case.
I approached the case in the spirit of another report of the commission on the case of S and W Beriesford and the British Sugar Corporation merger. It said:The question we have to consider is not merely whether there is a possibility that the merger will operate against the public interest. If only a possibility were required, hardly any merger could ever be allowed to proceed for it is very rarely that such a possibility can be quite excluded. The question is whether the evidence creates an expectation that the merger will operate against the public interest.That has been my approach to this case.
§ Mr. Craigen
Why, given that catalogue of indifference on the part of the Minister, was the matter referred to the Monopolies and Mergers Commission in the first instance?
§ Mr. Rees
I should have thought that the point was self-evident. It was clearly going to be a point of sensitivity. It was clearly right that all the circumstances and facts should be carefully considered. To conclude that it would be wrong to have referred it to the commission is to fly in the face of the case that has just been advanced by the right hon. Member for Craigton.
§ Mr. Canavan
I would rather make this point to Lord Cockfield, but we cannot get hold of him. Who was responsible for overturning the recommendation of the Monopolies and Mergers Commission? Did the Minister take the decision off his own back, did Lord Cockfield tell him what decision to make, or was it a collective decision by the Cabinet? If it was a collective decision by the Cabinet, did the Secretary of State for Scotland agree with the Minister of State?
§ Mr. Rees
Mine alone. It was my decision alone. The hon. Gentleman seems to find it difficult to comprehend this simple proposition. I stand by it.
I turn with some distaste to the scurrilous attack by the right hon. Gentleman on my right hon. and noble Friend and the attack, which only reproduces that, in the motion. It is noticeable that the Opposition have now shifted their ground and do not attempt to assert—I do not know how they could have sustained it—that there was any impropriety on behalf of the Secretary of State as regards the decision that I took. If that is not so, I shall willingly give way to the right hon. Gentleman. If he is saying that there was impropriety, perhaps he will intervene now.
§ Mr. Millan
I was saying that there was impropriety, because the decision was never disclosed to the House or anywhere else. We dragged it out of the Government.
§ Mr. Rees
The right hon. Gentleman is now not asserting that the decision that was taken was influenced in any way. I am glad that that is on the record. I hope that the right hon. Gentleman's example will be followed by his hon. Friends when they speak in the debate. He is not 785 asserting that there was any impropriety about the decision. I shall come to the so-called lack of candour in a moment.
§ Mr. Rees
I shall not give way. I know of the hon. Gentleman's keen interest in this matter. Later, if the hon. Gentleman feels it necessary to intervene, I shall give way to him, but I think that it would be helpful to him and to the House if I was allowed to develop my point.
Earlier there were all sorts of metaphysical points made that in some way my right hon. and noble Friend was vicariously responsible for my decision and that he should therefore have declared an interest, but in what way I am at a loss to know. The charge now is that apparently he should have declared an interest when the decision to refer the case to the commission was made in June last year. I have to tell the House that the decision was taken not by my right hon. and noble Friend but by my hon. Friend the Minister for Consumer Affairs.
§ Mr. Millan
The press notice of 3 June 1982 from the Department of Trade states:Lord Cockfield, Secretary of State for Trade, has "decided," in accordance with the recommendation of the Director General of Fair Trading, to refer the proposed acquisition by Charter Consolidated plc of Anderson Strathclyde plc to the Monopolies and Mergers Commission".Lord Cockfield had "decided", according to the press notice. There was no disclaimer there.
§ Mr. Rees
If the right hon. Gentleman were to consult his right hon. and hon. Friends who have served in the Department of Trade and had to take such decisions, he would know that it is perfectly proper for such a decision, which is not of enormous significance, to be delegated to other Ministers in the Department. That is a decision to refer. It can be easily shown. My right hon. and noble Friend was in Canada at the time. In any event, the root principle in such cases is surely that the Minister should not be involved in such a decision if the consequences of the decision are likely to be of pecuniary advantage in a direct sense to him. The decision that might have advantaged my right hon. and noble Friend was not to accept the majority decision of the commission's conclusions, but to allow Charter Consolidated to renew its bid if it so wished. As I have already said, I took that decision and I did not at any time discuss it with my right hon. and noble Friend. The decision to refer the bid to the commission was made in June last year. In any event, it could not have given any advantage to my right hon. and noble Friend. It did not open the way to the bid. Indeed, it raised the possibility of the bid being blocked. That is why I am startled to hear disagreement from the Opposition about the proposition that the bid should be referred to the commission.
§ Mr. Rees
No, I must press on.
The House might be interested to know the movement of share prices of Charter Consolidated at various relevant points. That will set the rather cheap sneers in their true context. [Interruption.] The hon. Member for Glasgow, Maryhill (Mr. Craigen) can give the House a lecture on public morality when he gets the chance. This is not the appropriate moment. The hon. Gentleman, who seems to have scant knowledge of the way in which markets work, might be interested to know that the pre-bid price of Charter Consolidated was about 250p. When Charter Consolidated's offer to Anderson Strathclyde was announced, its share price fell to 212p. When the reference to the Monopolies and Mergers Commission was made in June, the price fell further to 200p. It has just closed at 218p. So much for the cheap and unworthy sneers from the Opposition that my right hon. Friend and noble Friend either wanted to or could have profited.
The Opposition are bolstering a remarkably weak case on the main issue by a sustained, malevolent and entirely spurious attack on my right hon. and noble Friend, which any fair-minded person who has taken the trouble to study the facts would see through at once.
§ Dr. Bray
Will the Minister explain why, on 22 December, he told me:It was made clear at the time of the press statement that announced the decision why my right hon. and noble Friend had distanced himself from the report on the decision."—[Official Report, 22 December 1982; Vol. 34, c. 963.]Is he aware that it was not until I asked the Prime Minister about Lord Cockfield's interest during Prime Minister's Question Time on the afternoon of 21 December that it became public knowledge, and the Prime Minister confirmed it? I became aware of it less than one hour beforehand, and I told the Prime Minister's office at once that I would raise the subject during Question Time. That is why she had the facts at Question Time. Even at 4.50 pm, the Department of Trade press office did not know or have any statement available from the Secretary of State as to whether he had an interest or in which company he had an interest. Will the Minister acknowledge that he misled the House in his statement of 22 December that it was clear at the time of the press statement that his right hon. and noble Friend had distanced himself from the report?
§ Mr. Rees
It is perfectly true that my right hon. and noble Friend had distanced himself from the report. The memory of the hon. Member for Motherwell and Wishaw (Dr. Bray) may be a little fallible. I understand that he rang my private office the day before and a full explanation of my right hon. and noble Friend's shareholding was given to him. Moreover, my right hon. Friend the Prime Minister, in her answer to the hon. Gentleman, gave the 787 full facts the day before I made my statement. Any suggestion that there was lack of candour is absolute nonsense.
§ Mr. Deputy Speaker
Order. I repeat that there is great interest in the debate and that many hon. Members wish to take part. Interventions and points of order take up time.
§ Mr. Rees
I should like to return to the real issue. I was not required to arbitrate between the past reputation and the present or future charms of either Anderson Strathclyde or Charter Consolidated. I was not concerned with the adequacy of the bid made by Charter Consolidated. I was solely concerned with whether a case had been made out that there was a real expectation of damage to the public interest should the merger go ahead. I think that the appropriate verdict, on all the evidence that was given, must be the peculiarly Scottish verdict of "not proven". On that basis, the decision as to whether the merger should go ahead should appropriately be left to the shareholders of Anderson Strathclyde.
§ 8.5 pm
§ Mr. William Hamilton (Fife, Central)
The House and the entire population of Scotland will be appalled by the Minister's performance. It was a sneering show of peppery incompetence and humbug. The Minister has not told the whole truth, and he knows it.
§ Mr. Hamilton
It is a squalid story of duplicity from beginning to end and from the top of the Department to the bottom. It demonstrates how little the Government care about Scottish opinion of whatever political shade.
My right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) recalled that when we went to the Office of Fair Trading every political party was determined to do what it could to stop the merger. When the local authorities, trade unions and management saw us this afternoon and told us what had transpired between them and Scottish Ministers, they said that the Secretary of State for Scotland was on the side of Anderson Strathclyde and against the merger. My right hon. Friend the Member for Craigton challenged the Secretary of State to repeat it. What will he do? He ought to resign—this is a resigning matter if the merger goes through. Every Scottish Minister and every Back Bencher is committed to preventing the merger.
§ Mr. Bill Walker (Perth and East Perthshire)
The hon. Gentleman is making sweeping assertions without ascertaining the facts. It is just not true to say that every 788 Scottish Member of Parliament wanted the case to be referred to the Monopolies and Mergers Commission to prevent the takeover. The normal practice is to buy time to give the company concerned the opportunity to fend off the predator. We have done that before. It works.
§ Mr. Hamilton
I exclude from my proposition the party hack of party hacks. If the Government murdered his grandmother, the hon. Member for Perth and East Perthshire (Mr. Walker) would say they were quite right. The fact remains that, whoever one talks to in Scotland, whether it be the trade unions, the churches, the CBI, other organisations or individuals, no one who supports the proposed merger can be found. The only dishonourable exception is the hon. Member for Perth and East Perthshire.
§ Mr. Norman Hogg (Dunbartonshire, East)
Does my hon. Friend remember that, on the day that we went to the Office of Fair Trading, the spokesman for the Conservative party was the hon. Member for Aberdeenshire, East (Mr. McQuarrie), who is not here today? He was at great pains to point out that he and his colleagues were with us 100 per cent.
§ Mr. Hamilton
We all recall those exchanges in the City.
The Minister tried this evening to obscure the basic fact, which is as my right hon. Friend outlined in his statement, that massive public support in Scotland will be at risk if the merger goes through. There is an excellent Anderson Strathclyde factory in my constituency. It performs exactly as the Government say that it should: it is highly efficient, has increasing productivity, a wonderful export record and impressive industrial relations. If the merger goes through, what will be the state of industrial relations? There will be a reluctant work force, a reluctant management and a reluctant Scotland.
The Minister is wrong to say that it is a narrow Scottish national case, as the document makes perfectly clear. The document was produced by the management of Anderson Strathclyde for its shareholders, asking them to protect their investment. That is not a nationalist approach. It may be materialistic, but it is a sound approach for shareholders and management. The workers share that view. In an appeal to the shareholders, they stated:Professor Andrew Bain resigned from the Monopolies and Mergers Commission in protest against the Government decision to overrule the Commission's recommendation that the proposed take-over should not be permitted.The workers concluded:It is the earnest request of the employees that shareholders retain their shares in Anderson Strathclyde and that we continue as a team to provide a continuing profit to yourselves and security of employment to employees.It is of mutual concern and interest to employers, management, the economy of Scotland and of the United Kingdom that Anderson Strathclyde should continue to exist as an independent Scottish company, and Charter Consolidated has nothing to contribute to that effect. It has not proved that it can in any way improve the performance of Anderson Strathclyde, and the majority of members of the Monopolies and Mergers Commission came to that 789 conclusion. We still do not know why the Government, for the first time in the history of the commission, rejected the majority recommendation.
We suspect—it is no higher than that, and the Minister should not get shirty about it—the behaviour of the Secretary of State for Trade. It might well be a case for the Privileges Committee of the House of Commons to investigate the behaviour of the senior Minister concerned. Why did the senior Minister say, "I shall not take the decision"? He obviously thought that he might be under suspicion that his decision would not be objective. He handed the matter to the hon. and learned Gentleman. Why did he do that if he did not believe that his objectivity might be suspect? The Opposition believe that it is suspect. Such a senior Minister should be in this House. Had he been here, he would not have got away as lightly as he has.
I hope that the Minister does not underestimate the feeling on the matter throughout Scotland. It is not just a local issue but one of fundamental principle. The Government are the tool of big business and of the City. If the Scottish people believe that the Government will destroy another part of the Scottish economy for the sake of City interests, the Government had better look out. I believe that they made the decision they did because they have written off Scotland completely. They realise that they cannot gain a single seat in Scotland at the next election, and they might well lose some. They deserve to do so.
§ Mr. Michael Ancram (Edinburgh, South)
The hon. Member for Fife, Central (Mr. Hamilton) should wait until the next election to see whether his prediction comes true. I assure him that the Conservative party intends to win more than a single seat.
We have listened tonight to some of the most extraordinary remarks that I have ever heard from the Opposition Benches. If the debate is to serve the purpose for which it was intended when the Opposition proposed it, it is time to cut through the cant that we have heard from the Opposition. They hold the extraordinary view that the reports and findings of the Monopolies and Mergers Commission are sacrosanct, that there is no precedent for overturning them and that Ministers and Parliament should not question them. I challenge the right hon. Member for Glasgow, Craigton (Mr. Millan) to say whether, if the commission had decided the other way on this matter or on the Royal Bank of Scotland issue, he would have thrown up his hands in surrender and said, "That is an end to it." From what he has said, I doubt that very much. He knows full well that the commission is not a binding arbitration, but is there to advise the Government, and the Government have the right to make their decision later.
§ Mr. Millan
The hon. Gentleman is ignorant of the Fair Trading Act 1973. If the commission finds that a bid is not against the public interest, the Government have no power to intervene.
§ Mr. Ancram
The right hon. Gentleman knows that when the Royal Bank of Scotland was discussed several options were before the commission, and during that time he made it clear that he had only one view, which was to pursue that view as far as he could. To suggest tonight that 790 the commission's reports must be accepted at all costs is a strange statement from someone who once held the honourable position of Secretary of State for Scotland.
Another demonstration of the purpose of tonight's debate is the savage pursuit of the Secretary of State. Opposition Members love to pursue individuals, especially when they are not here to answer—[HON. MEMBERS: "He should be here."] Perhaps in some of the venom we see the secret of why the debate was proposed. I shall not mention some of the inferences made by the right hon. Gentleman about South Africa, but that, too, may have caused Opposition Members to call for this debate.
The most extraordinary matter of all is contained in the motion to which the right hon. Gentleman is a signatory, which refers tosupport to the management, trade unions and workforce of Anderson Strathclyde in their unanimous opposition to the takeover and their determination to preserve Anderson Strathclyde as an independent, highly efficient and profitable engineering company.What sudden conversion has come over Opposition Members that they now support profit? They never have in the past. What conversion has come over them that they are suddenly supporting independence? I did not know that that was part of the ideology of the Labour party. The Opposition are attempting to turn a serious question into a political football, and the vote that they will call tonight is a shabby political manoeuvre in that direction, and Conservative Members should treat it accordingly.
§ Mr. Donald Stewart (Western Isles)
Does not the hon. Gentleman, as chairman of the Conservative party in Scotland, think it odd that on such an issue—which his hon. and learned Friend freely acknowledged was sensitive—there was no consultation with the Secretary of State for Scotland?
§ Mr. Ancram
If the right hon. Gentleman will wait, I shall make my speech in my own way, and he may well hear my view on that.
The first thing that must be established—my hon. and learned Friend the Minister for Trade has established it already—is that he had a right to make the decision as he did. Whatever may be the views on the decision, there can be no question but that he had the right to make it. The right hon. Member for Craigton, as Secretary of State for Scotland—
§ Mr. Ancram
If the hon. Member for Dunfermline (Mr. Douglas) will stop interrupting from a sedentary position and wait, he will hear what my view is. I have heard the question.
It is important that we establish, not only in the minds of hon. Members but outside the House, that the Minister had the right to make this decision just as much as the right hon. Member for Craigton, as Secretary of State for Scotland, had the right to make quasi-judicial decisions in planning matters.
However, I should like to ask my hon. and learned Friend the Minister for Trade one important question. My understanding is that some considerable time before the announcement was made about the decision Anderson Strathclyde requested in writing, in a letter that was delivered by hand to his Department, a meeting with him 791 to discuss the new developments. I am informed that at that time Anderson Strathclyde did not receive an acknowledgement or reply to the letter until some time after the announcement had been made. It would have been proper and courteous to see the management of Anderson Strathclyde in view of the fact that it was asking to discuss the new developments. I am sure that my hon. and learned Friend will agree that it is acceptable in judicial proceedings to allow for fresh and new evidence to be looked at. I wonder whether he or my hon. Friend the Under-Secretary of State for Scotland, who is to reply, could explain what happened on that occasion.
As to the merits of the case, the public interest is a difficult matter to define and depends in every case on the circumstances. Often, as is the case in this instance, it depends on the intentions of the company that is seeking to take over another company. This test of public interest can best be looked at in this way. There is a major distinction between the purchase of a garden to cultivate and of a field to harvest a crop. That is a question to which, in any takeover, it is essential we receive an answer. In essence, it is a problem of credibility. I have followed this debate and I have read the arguments of both sides. As a result, I have a large and personal doubt about whether, in this instance, Anderson Strathclyde is a garden to be cultivated or a crop to be harvested.
In a case where there is doubt, and doubt to the extent that there is in this case, the benefit of the doubt should be given to the status quo. My hon. and learned Friend the Minister raised the "not proven" point, but the effect of the not proven verdict in Scotland is to maintain the status quo, because a person is innocent until he is proved guilty. The doubts on this occasion should have resulted in that answer. It is not for the House or myself to make a judgment on that. [HON. MEMBERS: "Oh".] If hon. Members will contain themselves, I shall continue. It is now for the shareholders to decide. The shareholders also have it within their power to say that they have doubts, and perhaps it is for us, as elected representatives, to suggest to them that those doubts are worthy of them giving the benefit of the doubt to Anderson Strathclyde.
The financial prospects have already been mentioned. There can be no doubt that Anderson Strathclyde is a successful and profitable company—nobody questions that. The shareholders must ask themselves—this is not a question for the House—whether the claims made by Anderson Strathclyde or Charter Consolidated are more likely to benefit the company of which they are shareholders. This is a matter for them, and it is one on which our silence is preferable to our arguments.
§ Mr. Ancram
If the hon. Member for Dunfermline contains himself, he will find out.
There is also the Scottish economic financial dimension. My hon. and learned Friend the Minister said that this was not a Scottish debate, but to a large extent it must be a debate about Scotland and the Scottish economy. This, unlike the financial prospect of the companies, is rightly a matter of interest to hon. Members. I trust that it is also a matter of interest to shareholders, particularly Scottish shareholders, and I hope that they will take the Scottish interests into account.
792 First, there is what might be called the Anglo-American factor. Certain allegations have been made that, were this merger to go through, business in America might be less keen to deal with Anderson Strathclyde and its subsidiaries there than if it were not to go through. This is a matter of significance for the company and the Scottish economy. I hope that the shareholders will weigh that carefully in their minds in coming to their judgment later this week.
Secondly, there are the general economic arguments. I can do no better than to quote the vital evidence in paragraph 7.12 in the Monopolies and Mergers Commission report given by the Scottish Economic Planning Department, where it says:Even if Charter's intentions were good, the SEPD feared that Charter's interference and intervention would be incompatible with the management stability which Anderson Strathclyde required to consolidate and improve its position at home and abroad.That is my view. It is the view of a Government Department, and I hope that when my hon. Friend replies tonight he will endorse it. The shareholders should not be in for a quick buck. Their job also is to view the wider issues. If the Minister endorses the evidence given by his Department, his influence will be much stronger than mine.
§ Mr. Deputy Speaker
It might be helpful to the House if I say that the Front Benches will seek to wind up the debate at half-past nine. There is a very large number of right hon. and hon. Gentlemen who wish to take part. I ask them please to bear the time in mind.
§ Dr. J. Dickson Mabon (Greenock and Port Glasgow)
I shall certainly heed your observation, Mr. Deputy Speaker.
I was confused by the remarks of the hon. Member for Edinburgh, South (Mr. Ancram). I do not know what he will do in the vote because the vote is clear. It is clear for my party because we have been demanding a debate on this subject for some time, in fact, since before Christmas. It is because of the division of time in the House of Commons that at the eleventh hour, unless we amend it, or at five minutes to the twelth hour, we are asked to vote on a subject which the House of Commons cannot determine. Such is the impotence of the House of Commons because of the inadequacies of the Opposition in relation to this matter. We should have been debating this months ago, and not tonight. [Interruption.] We do not determine these matters. [HON. MEMBERS: "Withdraw."] These matters are determined by the 44 Labour Members from Scotland rather than the 12 Members of my party. [HON. MEMBERS: "Withdraw."] We have not been—
§ Dr. Mabon
We have not been allowed to discuss this for three months because of the incompetence of the Opposition, who have never been able to find the time to discuss it. These matters are too serious to be left to frivolous Oppositions who are incompetent in the way that they deal with the time at their disposal.
§ Mr. Arthur Lewis
On a point of order. Could you tell me, Mr. Deputy Speaker, whether there is any way that 793 I can, within the rules of order, point out that there has not been a Liberal or an SDP Member here during the whole of the debate?
§ Dr. Mabon
That is not true because at least four of us have been here. That is a larger number, proportionately, than the 12 of the 44 Labour Members who are present. [Interruption.] If they do not mind, I am supposed to be on the side of the Opposition. May I get on with the argument? I am sorry that the Minister of State has gone; I do not blame him in the light of the nonsense that we have just heard and all the interruptions.
Back in December, as the hon. Member for Motherwell and Wishaw (Dr. Bray) discovered, we found out that the Secretary of State was abdicating his responsibilities in favour of the Minister of State. I have been a Minister on several occasions and I know what happens about one's private interests.
In the case we are discussing there was no declaration of interest. It is extraordinary that the Secretary of State for Trade should suddenly come upon an instance where he has to say "I am sorry, I cannot do this." In that circumstance the Secretary of State should have made a statement to the other place. That perfectly legitimate statement would have been reflected here, but that did not happen. Perhaps he forgot or perhaps his private office did not remind him. Who knows?
The fact is that it did not happen. Therefore, we had the extraordinary situation whereby the Secretary of State prided himself on having made the decision without recourse to any other Minister in the Government, including the Secretary of State for Scotland. I think the charge against him was of not willingly disclosing what he had said.
We know that these matters were never taken into account. The Minister should perhaps say to the Government that the Macmillan rules of 1959 are not adequate, and that when a Secretary of State has interests which he will not dispose of, there should be a mechanism for making a declaration. A person might be innocent or guilty but, if the Front Bench do not mind my saying this and will stop their muttering, Ministers should make a declaration at an early stage of their interests in various companies.
Even if they do not make a declaration on taking office, they should certainly do so when relevant papers come before them. A Secretary of State might say to a Minister of State, his deputy in the House of Commons, "I wish you would take the decision; I cannot because I have these interests on behalf of myself or my family." That seems reasonable. I do not expect the Minister to reply in detail but I hope he will accept that as a fair point.
Secondly, it is not unreasonable that Parliament, having seen the Minister's inability to make clear his position, should suspect the decision that he takes. Moreover, it is compounded by the fact that for the very first time a Secretary of State for Trade said, "No." I see that the right hon. Member for Battersea, North (Mr. Jay) is present. The President of the Board of Trade would say, "I am only supposed to say 'Yes.' I am never supposed to say 'No' to these recommendations." I may be wrong about that, but, even if I am, it was highly exceptional to turn down 794 the Monopolies and Mergers Commission recommendations. A Minister who is in a very dubious, doubtful, Caesar's wife position does not make the matter clear and gets the matter muddled. Of course he is totally innocent, but nevertheless he is very confused. Then, for the first time in British political history, he turns down the recommendation of a commission that has been established for nearly 50 years, with no explanation. It is quite extraordinary.
It is no wonder that the Government are in confusion tonight. It is no wonder that the hon. Member for Edinburgh, South made the confused speech that he did. He is the masochist of the Tory party in Scotland. He is beaten to death, and he almost rejoices in it. Here he is tonight trying to apologise for the Government. Let us be fair to him. He did not say that. He very seriously doubted the essence of the Government's decision and the way that it was arrived at.
The Under-Secretary must be alarmed that the chairman of the Tory party in Scotland is beginning to wonder what is going on. Undoubtedly, the matter has been mishandled by the Government—by the Secretary for Trade in the first instance, and now in what the Minister for Trade said tonight. The case that he put tonight was bad. He trembled, fumbled and lost his way. Normally he is a competent man. Clearly he was nervous about the case that he was presenting, and I am only sorry that he is not here to hear the criticism.
We shall support the Opposition motion tonight deploring all that has happened, but we are much more concerned about what will happen in the future. The House of Commons is not voting tonight. The shareholders are making up their minds. They will decide the future and how the company acts. All of us, whatever our partisan views, will want Anderson Srathclyde, without Charter, to do what it has promised to do in the submissions that were made to the shareholders. Incidentally, we demand that. If it wants to remain Anderson Strathclyde without Charter, we expect it to live up to every item in the submissions that it made to us.
§ Mr. David Marshall (Glasgow, Shettleston)
The right hon. Gentleman complained earlier in his speech about the Opposition. Will he tell the House why and when an all-party approach originally went to the Director General of Fair Trading only the Conservative party, the Labour party and the SNP attended. Why did no Liberal or SDP Members come along on 25 May last?
§ Mr. Norman Hogg
The right hon. Gentleman has made a serious statement. With whom did he insist that he should have a presence in this debate? I thought that all Members were equal, and that it was a matter for the Chair to call speakers.
§ Mr. Deputy Speaker (Mr. Ernest Armstrong)
Order. The right hon. Gentleman certainly did not insist with the Chair.
§ Dr. Mabon
The presence was not in the House of Commons. Thank God, the Labour party does not govern the House of Commons. The presence is to deal with the representations of those outside the House who wish to see Members of Parliament. I utterly deplore this. I think it 795 quite wrong. If Scotland wants to make a case, it should make it to every elected Member, whoever he may be. Whatever the party prejudice of the moment, it is scandalous that any Members should be excluded from that process. As for the House of Commons, I am delighted that we are not suppressed and that we are allowed to speak in this debate as I am speaking now.
I hope that the motion will be carried. I do not know under what statutory obligation Ministers are obliged to reconsider their decision but I would like to think there was one, in which case I would also like to think the Under-Secretary, in reply, would say, "In our defeat we oblige the Minister for Trade to change his mind, to agree to reconsider it," and in that way affect the view of the shareholders. I doubt whether that will happen. The shareholders might be influenced by a vote tonight. It would be an extraordinary situation and one that I have never known in the House if a vote on Tuesday night were to affect the way people voted on Wednesday or Thursday on a company's takeover bid, but it might happen. It might affect Darlington; one never can tell.
Seriously, it is an extraordinary situation and an illustration of my point about its being far too late. This debate should have been held three months ago in order to persuade those concerned to change their votes in favour of the advantage to Anderson Strathclyde as such. We on the Opposition Benches have no doubt that Anderson Strathclyde should be supported and that this motion should be carried. What we are questioning, even if this motion is lost and if the Minister persists, is whether we will back up the efforts of those who will no doubt succeed in trying to promote the interests of Anderson Strathclyde, which are the interests of Scotland.
§ Mr. Deputy Speaker
I am sure that the Government Front Bench heard that, but it is not a matter for me.
§ Sir Russell Fairgrieve (Aberdeenshire, West)
I trust that the right hon. Member for Greenock and Port Glasgow (Dr. Mabon) will not object if, for the sake of others who wish to speak in this debate, I do not follow his arguments too closely. I hope that the same will apply to interventions. Before proceeding with my remarks, I should like to declare that I could well have interests in some of the companies that I shall mention.
I am concerned with the general nature of some of these recent decisions over Scottish companies rather than with particular cases. For example, the bid that we are discussing tonight is similar in many ways to two recent bids in Scotland—the attempt by Lonrho to take over the House of Fraser and, more recently, that of Standard Chartered of Hong Kong and Shanghai to take over the Royal Bank of Scotland. Now we have an attempt by Charter Consolidated to take over Anderson Strathclyde.
Whatever the merits or otherwise of those attempted takeovers, they were in no way creating monopolies or restrictive practices. It might well be said that they included instances of greater competition being introduced 796 into the market. The difficulty is the Fair Trading Act 1973, which is the successor to previous legislation on this subject and which covers the work of the Monopolies and Mergers Commission. The United States has anti-trust laws which are designed to prevent monopolies and restrictive practices, but our Act goes a good deal wider and enters other areas. I have it with me here. It runs to some 134 pages.
§ Sir Russell Fairgrieve
The three bids to which I have referred all ended up by being dealt with in a few short sentences on page 61, which state that bids can be looked at if they are "against the public interest". This is a very subjective judgment to ask members of any commission to make.
I have just been before a committee of the commission which is looking at a bid of a completely different nature from the three that I have mentioned. I must pay tribute to its industry, integrity and hard work, and the detailed knowledge that it has acquired about the trade, the facts and the firms into which it was looking. We give the commission a more difficult task when we include the subjective issue "against the public interest".
As the takeover that we are considering is somewhat sub judice and is going on currently, I should like to look at its immediate predecessor, which gives some indication of the problems. It was not long ago that the directors of the Royal Bank of Scotland decided that it was in the interests of the bank, its customers, its employees and its future that it should merge with a larger organisation. Talks took place and an agreed merger with Standard Chartered was announced. Everyone was happy, including what might be termed the Establishment, the City and the Bank of England. Suddenly, there appeared on the scene another active entrepreneurial and go-ahead bidder by way of the Hong Kong and Shanghai Bank which offered a price about double—
§ Mr. Deputy Speaker
Order. The hon. Gentleman must relate his remarks to the narrow motion that is under discussion.
§ Sir Russell Fairgrieve
I think I can show you, Mr. Deputy Speaker, how close my remarks are related to the motion. The matter is similar to the present bid.
It was stated, as in the case of Charter Consolidated, that the headquarters of all its desired and ambitious operations into the European Common Market and elsewhere were to be situated in Edinburgh, not London. The Royal Bank's subsidiary, Williams and Glyn's, was to be expanded to become a real competitor of the English clearing banks. There was to be great potential for more jobs for Scots at home and abroad. It is interesting to recall that the Hong Kong and Shanghai bank was virtually founded and run by many Scots.
Like the present bid, this appeared to be far too much for the Bank of England, the City and the Establishment. Something had to be done. The poor old Monopolies and Mergers Commission was wheeled in, and, in due course, it declared the bid to be against the public interest. When one examines the Anderson Strathclyde—Charter consolidated situation in the light of other recent bids, I wonder seriously whether this Scotish ring fence mentality is not doing us harm. After all, we Scots have taken over 797 and run business all over the world. I cannot understand why we should become so much less confident and introspective in these matters.
I have been closely involved over the years with two large Scottish-based textile companies—William Baird, registered in Glasgow, and Dawson International, registered in Edinburgh. Both have substantial interests south of the border—one a recent acquisition. I should hate the thought of either being referred to the Monopolies and Mergers Commission for removing the firm's headquarters from England to Scotland, as seems to be the worry in reverse. We have always left the headquarters of the firm on its current site, and I gather that that is also the intention of Charter Consolidated with Anderson Strathclyde.
As regards the bid, I believe that, at the end of the day, it should be left to the shareholders to decide. They will take a mature decision in the interests of the company with all factors taken into account. It has to be remembered that Anderson Strathclyde's current operations are financed by a 30 per cent. shareholding capital stake from Charter Consolidated. I hope that the Minister, when giving his views and intentions, will mention also that if Standard Chartered, Hong Kong and Shanghai or any other suitor comes back to look at the Royal Bank of Scotland, or any other bank, the Government will consider the matter differently next time.
§ Dr. Jeremy Bray (Motherwell and Wishaw)
The main issue is the future of Anderson Strathclyde and the employment of the people within it. But a relevant factor has become the judgment, competence and integrity of the Secretary of State and the Minister of State. It was on the morning of 21 December that the Department of Trade issued a press notice accompanying the publication of the report of the Monopolies and Mergers Commission, saying that the report was being overruled.
I was telephoned by Mr. Little, chief executive of Anderson Strathclyde, that morning and at once told that the Monopolies and Mergers Commission had recommended against the bid but was being overruled, as the press statement declared. I at once telephoned the Minister of State's office to seek confirmation, which was given to me. I inquired why he was handling it and I was told. This was after the press release and the press conference. The hon. and learned Gentleman's private secretary plainly thought that the Secretary of State's interest in Charter Consolidated or in one of the parties was known. I said that it certainly was not known to me. It was certainly not in the press statement. I subsequently checked with all the journalists I could find and all the news rooms and it was not known to any of them.
I therefore telephoned the Prime Minister's office and gave notice that I would seek to raise the matter in Prime Minister's Question Time, if I was called, and I was called. The right hon. Lady was well briefed and at once confirmed my statement that the Secretary of State had an interest.
The following day the Minister of State said in the House:It was made clear at the time of the press statement that announced the decision why my right hon. and noble Friend had distanced himself from the report on the decision."—[Official Report, 22 December 1982; Vol. 34, c. 963.]It was not made clear. The Minister of State misled the House and he has still sought to mislead the House this 798 evening despite the fact that I telephoned his office again today to refer the Minister of State to a letter from myself in the Financial Times giving the facts I have just set out. So there was ample opportunity for him to check the facts.
If the Minister of State's private office thought that this statement of declaration of interest had been made when it had not been made, somewhere between the drafting of the press release in the Minister of State's office and what was actually said to the press somebody intervened. I do not know who, but the only office with the authority to intervene presumably would have been the Secretary of State's office. Perhaps the Minister of State will say what intervention took place.
§ Dr. Bray
In that case there was nothing in the statement as it went from the Minister of State's office to the press office with any reference to the Secretary of State's interest. Will the Minister of State now acknowledge that it was not made clear why his right hon. and noble Friend distanced himself from the decision? [HON. MEMBERS: "Answer."]
§ Mr. James Hamilton (Bothwell)
I wonder, Mr. Deputy Speaker, whether you would allow the Minister to make a statement to the House on whether he misled the House on that occasion. It is very important that we should know that tonight.
§ Dr. Bray
I should be happy to give way to the Minister of State. He is still not prepared to correct a misstatement that he made in the House on 22 December, and the House and his colleagues in the Government will judge his action. He has totally discredited himself by his performance in the House today and has further discredited himself by failing to correct the way in which he has misled the House. I do not think that the Minister of State, who has not been a Member of the House for as long as some hon. Members, is aware of the gravity of the position he is now taking.
The Minister of State, in his speech, ridiculed us on this side of the House for being unwilling to encourage overseas investment in Scotland. I first heard of the Charter Consolidated bid in a letter from the chief executive of Charter Consolidated. I wrote to him welcoming an interest in diversifying into mining machinery and suggesting that he set up a new company in Scotland to strengthen the Scottish engineering industry. But I said that Anderson Strathclyde was wholly capable of looking after itself and did not need any assistance from Charter Consolidated. The chief executive of Charter Consolidated did not have the courtesy to reply to that letter. There was a direct invitation to come to Scotland and he did not bother to reply to it.
The majority of Anderson Strathclyde employees work in my constituency and they are completely opposed to the bid by Charter Consolidated. The influence of Anderson Strathclyde stretches far beyond Motherwell, not only to the seven other factories in the United Kingdom but to the engineering industry as a whole. The very strong line taken by the Amalgamated Union of Engineering Workers, the Association of Scientific, Technical and Managerial Staffs and other unions is significant. The proposed takeover 799 threatens the independence and vigour of British engineering. It means that any successful British company will not be safe. Any marauding shareholder can threaten such a company's future and the security of it employees.
It is no accident that there has been such a strong reaction to the case of Anderson Strathclyde. The company's strength is shown by its superb performance at a time of recession, contrary to the statements made by Charter Consolidated, also a time of recession in the mining machinery industry. Through the co-operation of its employees the work of many years has borne fruit in the creditable increase in profits in 1982 and 1983.
With such a record Anderson Strathclyde does not need any help from Charter Consolidated in raising capital. As for the undertaking by Charter Consolidated not to interfere in the management of Anderson Strathclyde, it has done so already. On its own judgment, Anderson Strathclyde made a takeover bid for the National Mine Service Company,. Charter Consolidated used its power as a shareholder to try to block Anderson Strathclyde's freedom of manoeuvre. When it failed to do so and the management obtained the support of its shareholders for its tactics, Charter Consolidated at once told its competing subsidiary in America to cry off. There we have double evidence that Charter Consolidated interferes in the policies and practices of its subsidiary companies. It sought to block Anderson Strathclyde's move in Britain and when it failed it blocked the move of its subsidiary in the United States.
The opposition of Anderson Strathclyde's customers to a Charter Consolidated interest, both in Anderson Strathclyde and in National Mine Service Company is because Anglo American is a direct competitor of the main customers of those engineering companies. For a mining company to try to dominate the engineering suppliers of its competitors is plainly damaging to their interest. Commercial and industrial damage would undoubtedly be caused to Anderson Strathclyde were the Charter Consolidated bid to go through and that would have its effect on employment.
The bid upsets the delicate balance necessary for good industrial relations which are nowhere more necessary than in Scotland. Anderson Strathclyde has a good record which will be undermined if the shop stewards were to ask why they should put themselves out for such a marauding bunch of bidders from abroad. They will see that their management has been pushed around and they will ask why they should take into consideration the interests of Charter Consolidated which claims to have infinite financial resources.
The Minister relied on the case of S and W Berisford and the British Sugar Corporation. He did not say that he was quoting from the minority report, which appears to be the limit of his knowledge on the affairs of Anderson Strathclyde. He quoted the case of S and W Berisford and the British Sugar Corporation. It referred to the "mere possibility of damage". Professor Andrew Bain, in his letter of resignation to the Secretary of State for Trade, said:The charge that the majority recommendation is based on general possibilities and risks is unwarranted. The views of the majority must be judged from the language they used in their report, rather than from unsubstantiated assertions in a note of 800 dissent. On the three most important issues the majority stated, not that there was a mere possibility of damage, but that damage was probable and would or could be expected".The report states:it is probable that there will be a loss of morale and motivation amongst the present executive directors and senior management sufficient to have an adverse effect on the company's performance … it seems to us that the merger would create conditions in which the present degree of co-operation of the labour force would not be forthcoming.I share that judgment. The chairman of the Monopolies and Mergers Commission was totally wrong in his minority report. The Minister of State misled the House yet again by failing fully to inform the House of the fact that in the statement he was merely quoting a misunderstanding on the part of the chairman of the Monopolies and Mergers Commission which was refuted by Professor Andrew Bain in his letter to the Secretary of State.
This miserable bid does not deserve to go through. The Minister of State was wrong when he referred to the share price. It was 2p below the bid price. The present price is ex-dividend and is equivalent to a price of 204p on the terms of the Charter Consolidated bid. Little trading has taken place in the shares of Anderson Strathclyde. I trust that the bid will be as firmly rejected by the shareholders in Anderson Strathclyde as it is by all the employees in Anderson Strathclyde and by all hon. Members on this side of the House.
§ Mr. Deputy Speaker
Order. I ask for brevity in speeches as so many hon. Members have an interest in making a contribution to the debate.
§ 9.3 pm
§ Mr. Barry Henderson (Fife, East)
I agree with the final words of the hon. Member for Motherwell and Wishaw (Dr. Bray). I have great and considerable respect for him, and I think that he sincerely believes all he has said in the debate. But in voicing his suspicions about my hon. and learned Friend the Minister for Trade, he moved into fairyland. Valuable social and economic benefits for a community, a region and a country flow from the mere existence of well-managed independent companies.
For that reason, I agree with the final part of the motion, and especially the part that refers toan independent, highly efficient and profitable engineering company.That comes ill from Socialists whose policies have destroyed thousands of such companies and whose nationalisations have destroyed any sense of independence. They have imposed highly centralised bureaucracies, usually in London, through protection of the state monopolies against the possibility of competition from independent companies, which would expose their inefficiencies and improve customer services, and through taxation, which has driven so many private companies into the arms of the multiples and the multinationals.
Much of today's unemployment stems from Lib-Lab policies which destroy the profitability of companies and reduce their capacity to invest. There are substantial benefits to be gained from the independent private enterprise companies, but the Monopolies and Mergers Commission group which produced the report does not appear to have obtained evidence to support that view. That is extremely disappointing. Perhaps they could have 801 acquired it from a distinguished Glasgow university graduate, Mr. John McEnery, who retired from the Department of Industry a couple of years ago and wrote a pamphlet for the Institute of Economic Affairs in September 1981 called "Manufacturing: Two Nations". Under the heading "The Autonomous company headquarters—`the new generator of wealth'" in that extremely interesting pamphlet, John McEnery refers to theoverriding importance of the successful independent British-located company headquarters and its associated design, research and development, marketing and financial functions, as an entity separate from the manufacturing processes which it controls and as a long-term generator of wealth and high-quality ancillary service employment. The nature of manufacturing processes in the modern world … are transitory and internationally mobile compared with headquarters functions.The following bit is important. It states that the manufacturing processesare in no way able to compensate, in wealth and jobs, any country or region that has an inadequate share of the headquarters functions involved in guiding or controlling them.That is why I agree with the final part of the motion.
I should have liked the supporting evidence to have been brought out more clearly in the report of the Monopolies and Mergers Commission. That evidence came from the submission of Fife regional council and Kirkcaldy district council. They have a subsidiary of Anderson Strathclyde operating in Glenrothes in the constituency of the hon. Member for Fife, Central (Mr. Hamilton). Indeed, some of my constituents work there. In that submission the councils pointed out that two thirds of the redundancies in Fife in the past three or four years have been in branch factories, while the more locally based companies, such as Anderson Strathclyde in Glenrothes, have had a much more stable employment pattern—[Interruption.] I part from Opposition Members, however, because I believe that any objective reader of the Monopolies and Mergers Commission report must be driven, with the present state of the law, to the same conclusion as the Minister. I was not an objective reader. I do not want Anderson Strathclyde to be taken over by Charter Consolidated.
§ Mr. Henderson
I want that splendid independent company to continue in existence. However, that is not the same as saying that there is a case for ministerial intervention. The minority report's final words are:If the intention of Parliament is judged, as it must be, from the language of the Fair Trading Act, we do not consider that the general possibilities and risks upon which the recommendation in this case is based amount to such material as Parliament intended should lead to ministerial intervention.In that conclusion one reads the somewhat shaky foundations on which the majority group came to its conclusion. I regret that. As a supporter of Anderson Strathclyde, I wholly reject the first part of the motion, criticising an essentially quasi judicial judgment that the Minister had to make and that he was extremely well equipped, and more equipped than many, to make.
Given the desire for brevity, I shall conclude by saying that there is a case for strengthening the legislation on mergers and for positively encouraging "de-mergers". Some recent management buy-outs may give us a hint of the way in which things will go. In his pamphlet "Manufacturing: Two Nations", John McEnery said: 802De-merging by conglomerates should be facilitated by removing taxation disincentives, and should if necessary be financially encouraged … if it leads to new headquarters in regions with relatively low levels of service employment.I would go further and say that in future legislation should go in the direction of saying, as McEnery does, thatin all significant industrial mergers, the onus should be placed on those proposing the merger to make the case that it would benefit the country's manufacturing capability and also not reduce autonomous service employment in regions lacking their due share of service employment.I should like to see things going in that direction but that is not the state of the legislation and of the burden of proof in the report. As things stand, there is no justification for further ministerial intervention in this affair. I also hope, as seems increasingly likely, that Anderson Strathclyde will be successful not in fighting off the takeover bid but in proving by its continuing independent success that it was right to do so.
§ Mr. Douglas Jay (Battersea, North)
I do not think that I have ever heard a more unconvincing speech from the Government Front Bench than that of the Minister for Trade this evening. If that is the Government case, I am not surprised that the Secretary of State for Scotland did not have the courage to get to his feet.
My right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) rightly pointed out the industrial damage which is naturally feared and is likely to be done to Scotland if the merger goes through. As the author of the legislation which first brought mergers within the sphere of the Monopolies and Mergers Commission, I would say that if I were a member of the commission I would have voted with the majority against allowing the merger to go through.
The motive behind many mergers is, in the end, to suppress competition. If there were more time, I could give a recent example from my constituency. In the case of Anderson Strathclyde—the case is not yet resolved by the shareholders—as a former investment adviser I would recommend shareholders, in their own interests, to refuse the offer from Charter Consolidated. Shares in a firm which has rapidly expanded its business and its profits in the past two years are not to be lightly thrown aside.
However, this debate raises the subsidiary issue of Ministers' holdings of industrial or commercial shares. I make no accusation of impropriety against the Secretary of State in making the decision, although I think that he acted foolishly and, on the evidence we have heard tonight, did not show an excess of candour, but I take issue with the Minister for Trade and I am sorry that he has left the Chamber.
In the debate on 22 December 1982 the Minister for Trade, when asked on the general principle whether economic Ministers would be wise to divest themselves altogether of shares in industrial or commercial companies when taking office, replied:Carried to its logical conclusion, it would mean that Ministers in most Departments, because most Departments come in contact with quoted companies, would, before taking office, have to divest themselves of all quoted shares in case at any time in the future their Department might affect the conduct of that company. That is an absurd proposition that I am perfectly confident has never characterised the actions of Labour Ministers or of Conservative Ministers."—[Official Report, 22 December 1982; Vol. 34, c. 961]I am afraid that the Minister broke the golden rule that politicians should not use the word "never". The Minister 803 may have been perfectly confident, but in this case he was wrong. That was precisely what I did when taking office at the Board of Trade. I divested myself of all such shares. So the Minister of State was also wrong in that case. That seems to be plain common sense and simple prudence. I would assume that all economic Ministers would do and have done the same because in this situation one must be above suspicion. One must be not merely impartial in that sense; one must appear to be impartial.
On 20 March 1980, in answer to my written question, the Prime Minister said:The rules are based on the principle that Ministers must so order their affairs that no conflict arises, or appears to arise between their private interests and public duties.After saying something about directorships she continued:'There may also be exceptional cases where, even though no controlling interest is involved, the actual holding of particular shares in concerns closely associated with a Minister's own Department may create the danger of a conflict of interest: where a Minister considers this to be the case, he should divest himself of the holding —[0fficial Report, 20 March 1980; Vol. 981, c. 292.]That is the established principle as laid down by the Prime Minister.
Unfortunately, in this case a conflict appeared to arise and therefore Ministers at least acted unwisely. It would have been far better if Ministers in this case, as in others, had stuck to the practice of divesting themselves of any such shares. Nowadays there are plenty of vehicles for savings other than industrial shares.
The statement by the Minister of State on 22 December leaves also the unfortunate impression that other Ministers, including economic Ministers, have continued to hold industrial and commercial shares after taking office. We were not told that in December. The Minister should tell us whether that is the case when he replies. If Ministers still retain such shares, they are acting unwisely and it would be far better were they to revert to the practice and standards laid down in the Prime Minister's statement and followed, at any rate by Labour Ministers, in the past.
I hope that the Minister will tell us not merely what practice other Ministers are now following, but that in the future they will adopt the more prudent and defensible practice followed in the past. I hope also that the Minister will tell us that the Government have done the wisest thing and reconsidered their position on this matter.
§ Mr. Gordon Wilson (Dundee, East)
My first impression of the debate is that those Scottish Conservatives who have spoken have proved themselves to be false friends of Anderson Strathclyde and Scotland. Where their interests lie will be tested tonight. They will have to choose between party and country. If they choose party, they will know that they are jeopardising the jobs of thousands of workers in Scotland. It will be their decision. They will also be jeopardising the future, such as it is, of their party in Scotland.
I was impressed by the presentation of the case for Anderson Strathclyde and by the Minister's failure to respond credibly. It was deeply unfortunate that when given the opportunity to respond to the hon. Member for Motherwell and Wishaw (Dr. Bray) about whether he had misled the House the Minister refused to say anything. He has proved his guilt by that silence.
804 The Government's actions have left an unpleasant taste in the mouth. If the Government thought that during the debate they would be able to launder their position, I tell the Minister and his colleagues that they have singularly failed to do so. A fishy smell is arising from this case. The Government have failed to get rid of it this evening.
Much more important than that is the future of industry in Scotland and the fact that a Monopolies and Mergers Commission report was for the first time in the history of that organisation overruled by a Minister. It is particularly unfortunate as the report on Anderson Strathclyde was the third in a row in which the commission was carving out fresh territory, showing how Scottish interests might be protected from predators from the south and beyond. It is no secret that in the Highland Distillers case, the Royal Bank of Scotland case and now in the Anderson Strathclyde case, Scottish companies were under attack and had no defence except through being protected by the Government. The commission has to decide the matter according to public interest. In the public interest there is no doubt that this company should be committed to remaining independent, autonomous and prosperous. It has succeeded on all the main fronts urged on private industry by the Government, yet it is being treated in a scabby way by them.
English Ministers do not take on board problems about external control. It is interesting that in each of the reports that I have mentioned the commission addresses itself to the problem of an economy that was becoming precariously based because bit by bit industry was being taken over and the leadership was passing from Scotland to other parts of the United Kingdom or beyond. A great deal of damage has been done by the Government overruling the commission.
I was extremely surprised when the Minister of State said that he did not regard this matter as one of the greatest importance and that he did not even consult the Secretary of State for Scotland or the Scottish Office. All he had to do was read the commission's report, which laid out the views of the Scottish Economic Planning Department. If the SEPD, representing the Scottish Office, had taken a strong stance in opposing the takeover, that Government viewpoint from Scotland should have taken precedence over the abstract, academic and City interests of the Minister of State operating from London.
There is an important question of Scottish control. I hope that the shareholders of Anderson Strathclyde will repudiate and refuse the offer made by Charter Consolidated because it is not in their interests that that company should pass into the hands of Charter Consolidated.
Nevertheless, we come back to the duty of the House and of the Government to decide those matters in the public interest. The Minister of State referred to the verdict of not proven, although by his own words and silence tonight he passed a verdict of guilty on himself and his Department. When there is a recommendation, albeit a majority one, by a body such as the commission, that should weigh with the Government. The burden of proof should have lain on Charter Consolidated to prove that its action would be beneficial to Scotland, Anderson Strathclyde and the workers. Charter Consolidated has failed to do that. The commission came out against the takeover. By that token, the Government should have done that.
805 The danger that we face in Scotland is that the branch office syndrome that we have had to face up to many times before will be increased if the company is taken over. Until tonight I hoped that the Conservative party in Scotland would be included with the management, the work force, the Scottish parties and the Scottish public in saying "No" to the takeover. The least that we can demand of the Government is that they revoke their decision and accede to the view that the Scottish view is paramount and that the takeover should be killed off in the Scottish interest.
The Government have been insensitive to the Scottish interest. We shall watch closely which way Members of Parliament vote and the actions of those who regard the matter as of so little importance that they have not bothered to turn up to vote on this extremely important issue in Scotland.
§ Mr. David Marshall (Glasgow, Shettleston)
The Monopolies and Mergers Commission concluded that this takeover would have an adverse effect on employment in a depressed part of the United Kingdom and would operate against the public interest. In the few minutes that I have at my disposal, I hope to illustrate exactly why that should be the case, especially in the east end of Glasgow and my constituency.
The registered head office of Anderson Strathclyde is at 47 Broad street, Glasgow in the Shettleston constituency. It employs about 665 people, thus making it one of the largest employers in the east end of the city. Economically and industrially, it is extremely important to the east end of Glasgow and the rest of the country, as is the whole company to the economy of Scotland and the rest of the United Kingdom.
As many hon. Members have said, Anderson Strathclyde is a good employer, with a highly skilled and competent work force, excellent training facilities and industrial relations. It is a well-run and successful company, even in the recession that the Government have created. Unfortunately, its factory is surrounded by the empty sites of what were formerly thriving companies before they were taken over by or merged with other companies that were run from outside Scotland. Davy United and Dorada Croft were just two. Perhaps the classic example of takeovers was that of William Beardmore Ltd., which once employed 35,000 people worldwide, more than 15,000 of whom were at its headquarters at Parkhead, which is just down the road from the Anderson Strathclyde factory. Beardmore was taken over by Johnson Firth Brown of Sheffield a few years ago and, in December last year, it closed down its remaining operations at Parkhead, thus making many hundreds of people redundant and leaving a 64-acre eyesore in the east end of Glasgow.
That is what people fear will be the result of a takeover by Charter Consolidated, which has a record of asset-stripping. People fear that the merger will lead to an early closure of the Bridgeton factory. Charter Consolidated's record shows that its guarantees are not worth the paper that they are printed on.
Why do local people fear the loss of what some people may say is only 665 jobs? According to research note No. 98 from the House of Commons Library, male unemployment in my constituency in April 1981—the figures are already two years out of date—was the fifth highest in the United Kingdom at 30.9 per cent. Across the 806 road from the Anderson Strathclyde factory the neighbouring constituency of Glasgow, Central was second highest with 37.7 per cent. unemployment.
In a written reply on 4 March the Under-Secretary of State for Scotland produced unemployment figures for Wester Carntyne and Barrowfield which are in the immediate vicinity of the Anderson Strathclyde factory, and for the GEAR project area of severe deprivation that surrounds Anderson Strathclyde. The figures are worth quoting. Adult male unemployment was 54 per cent. in Wester Carntyne, 43 per cent. in Barrowfield and 30 per cent. in the GEAR area. Young male unemployment was 56 per cent. in Wester Carntyne, 63 per cent. in Barrowfield and 40 per cent. in the GEAR area. Young female unemployment was 60 per cent. in Western Carntyne, 46 per cent. in Barrowfield and 33 per cent. in the GEAR area.
Those shocking and disgraceful figures show exactly why people in Glasgow fear the takeover. All that it means to them is even more unemployment. What will those figures become if the merger goes ahead? That is why Glasgow district council, Strathclyde regional council, other local authorities, the Scottish Trades Union Congress and Scottish public opinion are all bitterly opposed to it.
I shall deal with the role of the lobbyist in this sorry affair. Charter Consolidated engaged the services of GJW, a firm of high-powered lobbyists, which I understand, is run by the former personal assistants of three prominent Members of Parliament. I am sorry that the Minister is not present. He keeps bobbing in and out of the debate. Perhaps he will not return as a Minister. Will ne tell us something about that anonomyous empire or the secret world of the lobbyist? Did they meet him or the Secretary of State for Trade? Who did they meet? What role did they play? What effect did they have on his decision? Will he also tell us whether Scotland is being paid back for successfully defeating the proposed takeover of the Royal Bank? Is it that South African interests are more important than Hong Kong interests? What about the interests of the workers of Anderson Strathclyde and the working people of Scotland?
If Charter Consolidated succeeds in taking over Anderson Strathclyde, I hope that the next Labour Government will speedily take the company into public ownership. The whole affair has been rather unsavoury—in fact, it stinks—and the sooner the Prime Minister appoints a new Secretary of State for Trade who will be answerable to the House, the better it will be for everyone.
§ Mr. Peter Archer (Warley, West)
I shall not embellish what my hon. Friend the Member for Glasgow, Shettleston (Mr. Marshall) has just said so movingly from his own local experience. The effects of a takeover bid for a flourishing, capable, locally based engineering company by a finance-orientated company with no Scottish connections were fully ventilated by my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) and by my other hon. Friends. I shall not rehearse their arguments, except to say that I was amazed that the Minister of State apparently believes that a company is not controlled from abroad when a foreign-based company holds 35 per cent. of its shares. If he believes that a 35 per cent. holding is insufficient for control when the other shares are fragmented, he has a naive idea of how 807 companies operate. Of course Charter Consolidated is a foreign-based company. I was also startled to discover that he fails to recognise the difference between a Japanese company establishing new business and new jobs in Scotland and the takeover of an existing company, but I shall leave the matter there.
I wish to consider the wider implications of the matter—first, the role of the Secretary of State for Trade. His financial integrity is not at issue in this debate. We have not suggested that his actions were motivated by his financial interests—I make no such allegation—but his actions are open to criticism on two grounds. First, he failed fully and at once to divest himself of his shares in Charter Consolidated. We criticise him for the reasons given by my right hon. Friend the Member for Battersea, North (Mr. Jay). It could have influenced his judgment in matters with which he was called upon to deal as Secretary of State.
§ Mr. Archer
That is not just my view; it is not just the Opposition's view. As my hon. Friend the Member for Fife, Central (Mr. Hamilton) said, it is the view of the Secretary of State himself. The reason why the Secretary of State delegated to the Minister of State his powers in this case was that he believed that it would be wrong for him to take the decision. By retaining the shares, he was precluded from carrying out a duty which he would otherwise have carried out. He would have been better advised totally to divest himself of the shares. The matter reflects not on his integrity but on his judgment, and the Minister of State would have been better advised to admit that. It is a pity that the Secretary of State is in another place and cannot speak for himself here. In my experience, the House usually forgives errors of judgment by a Minister, especially when he does not have great political experience. The House finds it harder to forgive the persistent assertion that he was entitled to behave like that, that the Government are beyond reproach and that he and his colleagues would do the same again.
My second criticism is that the right hon. Gentleman failed to disclose all the facts when he delegated his powers to his junior Ministers. The better course would have been to announce publicly that he was delegating the powers, and the reason for it. Nothing was said in June 1982, and it now transpires that he had then already delegated his powers to the Minister for Consumer Affairs. That information was not contained in the press handout. Indeed, it was mentioned only after the commission had reported. Even then, no mention was made in that press handout in December of the reasons for the delegation. Those emerged only by the rather tortuous process outlined by my hon. Friend the Member for Motherwell and Wishaw (Dr. Bray).
We must conclude that the Secretary of State was less than candid, and that the Minister was less than candid. The Government do not emerge from that with any credit.
§ Sir Russell Fairgrieve
What does all this mean to the industrial and commercial case for the takeover of Anderson Strathclyde?
§ Mr. Archer
If the hon. Gentleman will do me the favour of listening for a few moments, he will find that his 808 question will be answered. I am concerned principally about what emerges for some aspects of merger policy. The Fair Trading Act 1973, passed by a Conservative Administration, provides that, on a merger reference, the commission may be required to consider two things—first, whether a merger is being created, and secondly whether that has operated, or can be expected to operate, against the public interest. Section 84 says that in determining whether an operation isagainst the public interest, the Commission shall take into account all matters which appear to them … to be relevant.It then lists five matters which the commission should have particularly in mind.
It was considered by the Government who introduced that Act that a merger might affect the public interest in a number of ways which are not directly concerned with competition. The issue is not about competition but about public interest. A merger may affect the public interest. It may inhibit the discretion of the local management, and remove it to a board further away from the locality where the activities are carried on and so affect the capacity of the company to respond to the needs of its customers. A merger may lead to the transfer of some of the processes to a different area, so affecting jobs in the region. The company's technical expertise may be removed elsewhere, out of the region and possibly out of the country. A merger may destroy the good relations between a management and its work force by imposing different ways to deal with industrial relations, and by undermining the confidence which the work force has in a management that now has to refer every decision elsewhere, and it may give rise to a complicated chain of consequences. A merger may even have adverse effects on the interests of the shareholders who do not go along with the takeover. They too are at risk.
Those responsible for the 1973 Act believed that those were consequences which should be taken into account. The right of investors to sell or to buy should not be absolute, but should be subject to the right of someone to consider those other consequences to the economy and to the general public. That was the view of the Conservative Government in 1973, and the Labour party agrees with that. I suspect that this whole episode arises from the feeling of the Minister for Trade that he prefers to leave these matters to the mercy of the market. Indeed, the Under-Secretary, the hon. Member for Aberdeen, South (Mr. Sproat), has said as much. He has articulated the position, and the matter is in the open.
My right hon. Friend the Member for Craigton said that the Minister had caved in to the interests of those who stood to benefit from non-intervention. That is true, but it was not difficult to persuade him to go along with that. I suspect that the Government take the view, not only about mergers but about trade in general, that normally these things are better left to the market and those who buy and those who sell should be left free to make their bargains, and all those others who may be affected by the bargains must bear their misfortunes with fortitude. If the effect is to damage the economy, that is the sacrifice which we must make on the altar of freedom of contract. I suspect that the Under-Secretary did not intervene in the takeover because he was constitutionally reluctant to intervene in the affairs of the market.
The Labour party believes that the work force has a legitimate interest in the matter, as does the present 809 management of Anderson Strathclyde, the customers of Anderson Strathclyde, and the people of Scotland. That is the fundamental difference between us.
If it is legitimate to ask whether Charter Consolidated understands the engineering business and is interested in the economy, whether it is in the interests of the company that it should be introduced to another layer of managerial control, whether the two managements are likely to mix effectively, whether a merger would have an adverse effect on the career structure within the company, whether Charter Consolidated has a concern and feel for the region and the people of Scotland, whether it might have adverse effects on the views of customers abroad, whether the company is concerned with a conglomerate which has interests in South Africa, and whether all this is conducive to good relations within the work force—the issue then arises of who should direct his mind to answering them.
Who is in the best position to consider the implications of a possible merger for all these people? One view is that it should be the investors and that they should be relied upon to set aside their own interests and consider objectively the interests of all the other people who may be affected. I intend no disrespect to investors if I say that until this evening I had not heard anyone express that opinion, but the hon. Member for Edinburgh, South (Mr. Ancram) admitted to taking precisely that simplistic view.
Even those who believe that the affairs of the universe and the movements of the spheres are best left to market forces consider that those who are involved in the market are motivated by their own interest. It would be naive to ask them to consider the interests of others. That is what we mean by market forces; people are motivated by considerations of their own profit. To leave it to them would be a total abdication of any concern for the interests of all the other people. That is why legislation about mergers was passed by successive Governments.
The inquiry might be made by Ministers. It is arguable that balancing the interests of those involved entails political judgment. Some sections of the press are suggesting that the commission may not be an appropriate body to examine considerations of public interest. But if the matter is discussed by Ministers, it is discussed behind closed doors. We do not know who has spoken to a Minister or what he has said. That is true of many ministerial decisions, but here we are dealing with a decision which affects a specific company in a specific place and the issue relates to balancing the interests of particular groups.
Those who drafted the Act took the view that it was better that the inquiry should be conducted by people who are structured to hear evidence and the representations of those concerned, so that what is said may be known and that they do not discuss the matter in private with people who do not have to take responsibility for what they say. They have to behave in a judicial manner. That is the case for these matters being decided by a commission.
In particular, a commission is not susceptible to lobbyists. There are some matters on which Ministers may properly be lobbied, but where the interests of two groups of individuals have to be balanced it is not right that something should be said to a Minister over a brandy and soda in a golf club. Everyone should know what has been said. It should be possible for it to be tested and, if necessary, refuted.
§ Mr. Archer
Yes, as my hon. Friend says, here they were prepared to be lobbied by one side but not by the other.
As I understand it, the reason why the Secretary of State did not delegate the decision ultimately to the Minister for Consumer Affairs was that he had been lobbied. I am not implying that he is to blame for that, but the purpose of lobbying him must have been to try to get him to bring his influence to bear. It is better that these matters should be decided by a commission.
If that is the best method of resolving the question, that entails a great many busy people giving a great deal of time to it. If, after they have read a great deal of evidence and after much deliberation, they reach a conclusion, surely that is not something to be lightly cast aside by a Minister after perusing a file. Of course, he may take a different view; the Act presupposes that. He must bring his own mind to bear, but surely he would set aside the conclusion of those who had devoted much care and attention to it only in the most exceptional cases. The hon. Member for Edinburgh, South said that that was an extraordinary view. It is the view taken by a succession of Secretaries of State of all political complexions, not just since the passing of the 1973 Act but in the 18 years since merger control has operated.
Surely the purpose of this method of merger control is to remove these decisions from the heat of political discussion. In this case, for the first time, the Minister of State dismissed six months of concentrated work by the commission. If that begins to happen, it will be difficult to find able, public people who are prepared to devote themselves to work such as this, simply to have it swept aside.
It is hardly surprising that Professor Bain thought it right to resign. It is hardly surprising that Mr. Eric Hammond saw fit to make the statement that he did. He said:Why put the question to the Commission at all if a few hours consideration by a junior minister can reverse six months work of Commission members and staff—including numerous visits, interviews, hearings and masses of evidence from those concerned?The Minister of State is a distinguished lawyer, but that is not the only experience and expertise which can contribute to a solution of these problems.
Mr. Hammond went on:My opposition to the Merger was based on my industrial experience from shop floor to national level … The present wellbeing and future progress of Anderson Strathclyde is based on their investment programme and the co-operation of the workforce.Again, we wonder why the Minister of State should see fit not only to brush aside all that work, but in doing so, in the statement that, he issued, to devote only two paragraphs to explaining why.
There is one final problem. In the note of dissent, the chairman and Mr. Lyons said that, in their view, the evidence did not justify concluding that the effects adverse to the public interest had been established. They said:At no stage is the argument cast in terms of definitely foreseen results. It is all in terms of possibility, likelihood and risk.So they argued that the case was not proved. It had not been shown conclusively that it would have those adverse effects.
811 However, it must often happen—more often than not—that the case against a merger is the risk that it creates that these things will happen. Of course we cannot be sure what will transpire. Indeed, that is precisely what damages confidence and morale. So what should happen if they are left in a state of doubt? There are two views about that. One is a view that we heard tonight from the Conservative Benches, the view that the right hon. and learned Gentleman has reiterated more than once: if at the end of the investigation one is not sure, if one is left with a feeling that things may work out badly for the public, the suppliers, the customers, the work force, but one cannot be certain, one should stand aside and let matters take their course. That is one view of what should happen if we are left in doubt.
The other view is that the merger may make an enormous difference to the company and the region, that the fate of many people may be decided in the privacy of a boardroom where they are not represented. It is a possible view that the onus should be on those who wish to bring about such traumatic changes to show positively that they are in the public interest, or at least to show positively that the public would not be any worse off.
I invite the Minister of State again to look at the matter. All that he has done so far has been to announce that he does not propose to make an order. As my right hon. Friend the Member for Craigton said, there is nothing in the Act to preclude him from looking at it again. We believe that there are many people whose futures will be closely affected by the merger. They have real anxieties, which we share. We believe that the Government's attitude on this matter typifies their attitude not only to merger policy generally but to the whole of economic policy. It typifies their approval of the rights of those who have property and their indifference to the effect upon others. It typifies their belief that matters should be left to take their course, and that Governments abdicate responsibility for what transpires. It typifies the fortitude with which they bear other people's problems. That is why we propose to divide the House tonight.
§ Mr. Canavan
On a point of order, Mr. Deputy Speaker. I do not think that you were in the Chair at the time, but earlier in the debate the Minister for Trade told me that it was his decision and his alone that overturned the recommendation of the Monopolies and Mergers Commission. Is it not, therefore, a gross contempt of the House for the last few minutes of this debate to be taken up with the irrelevant contribution of a junior Minister?
§ The Under-Secretary of State for Scotland (Mr. Alexander Fletcher)
The point just raised by the hon. Member for West Stirlingshire (Mr. Canavan) again emphasises the fact that, while hon. Members on the Opposition Benches have been demanding a debate on this subject for some time, they have spent so much time searching for a witch hunt that just is not there that they have largely ignored the considerations of the proposed merger, which is what interests their constituents as well as the work force and the company.
812 Before turning to the more significant questions, perhaps I can respond briefly to the right hon. Member for Battersea, North (Mr. Jay) who referred to an important matter. I must tell him that guidance to the generality of Government Ministers is clearly a matter, not for me, but for the Prime Minister. I cannot add to the answer that the Prime Minister gave to the right hon. Gentleman.
This debate has taken place at a time when the shareholders in Anderson Strathclyde are faced with a decision about the future control of their company. The timing of the debate is, therefore, appropriate because it reminds us that the legislation governing takeovers and mergers is based firmly on the principle that the prime responsibility for the activities undertaken by companies rests with the shareholders. This has always been so. Hon Members on the Opposition Benches who seem slightly surprised by that statement should remember that no Government, Labour or Conservative, have at any time sought to overturn the right of shareholders in this respect, and that although current legislation was introduced in 1973 it was not significantly altered by the Labour Government who came to office in 1974.
It is essential, if any market is to operate properly, that there should be a free flow of information to potential buyers and sellers, and in the present case both Charter Consolidated and Anderson Strathclyde are rightly taking every opportunity to put their assessment of the company's prospects before the shareholders. I welcome the robust way in which the Scottish company is putting its case and the extensive debate that this case has prompted in Scotland. It has helped to clarify the issues and will assist shareholders in reaching their decision on Thursday of this week.
The Fair Trading Act 1973 provides for Government intervention where a merger may be expected to operate against the public interest. It is frequently suggested, however, that Scottish opinion would like to see Scottish companies remain immune from any form of merger or takeover and that the takeover of any Scottish company is by definition against the public interest. That is not so. The long-standing reputation and extensive overseas activities of the financial community in Scotland belie such a narrow and parochial attitude. Our thriving financial services sector would never have developed in the way that it has if it had confined its attention to Scotland and ignored the opportunities overseas.
§ Mr. Fletcher
No, I will not. I am already short of time.
In addition, some of our most successful and technologically advanced companies have in the past few years been the subject of takeovers that have been welcomed in Scotland.
§ Mr. Fletcher
One example is that of Barr and Stroud, whose electronic and optical business is flourishing under the control of the Pilkington group.
§ Mr. Fletcher
No, I will not give way. The right hon. Gentleman had the full time to make his case, I have not.
Another example is that of MESL whose security systems business is thriving under Racal.
813 My hon. Friend the Member for Aberdeenshire, West (Sir R. Fairgrieve) mentioned the public interest. The attitude that my right hon. Friend the Secretary of State for Scotland and I take towards such merger proposals is closely linked to our attitude to regional policy. One of the reasons why successive Governments have been spending hundreds of millions of pounds a year on various forms of financial assistance to industry in the assisted areas of the United Kingdom, including Scotland, is the relative weakness of the companies sector in these areas. This has led to a lack of opportunities and a tendency for talented people to emigrate to London and the south-east. We regard the expenditure that we incur on regional policy in attracting overseas companies and strengthening indigenous companies as being clearly in the public interest.
Similarly, we regard selective intervention in merger cases, to achieve the same regional policy objectives, as being clearly in the public interest. I emphasise that such intervention must be selective. Otherwise, the fundamental working of the market would be unduly infringed.
§ Mr. Fletcher
My hon. Friend the Member for Edinburgh, South (Mr. Ancram) asked about the evidence presented by the Scottish Office. In this case the Scottish economic planning department gave evidence to the Monopolies and Mergers Commission. That evidence did not favour the merger. My right hon. Friend—
§ Mr. Fletcher
The hon. Member for South Ayrshire (Mr. Foulkes) should not get so excited. He should calm himself. My right hon. Friend and I stand by that evidence. We were speaking, of course, as we have spoken in many previous cases, from the view of the Scottish industrial interest. The commission is required to consider all of the interests involved. The Government, including my hon. and learned Friend the Minister for Trade, are also obliged to take a wider view. My hon. and learned Friend is bound to take particular account of the report of the commission as a whole. He is obliged by statute to have regard to the advice of the Director General of Fair Trading. As he has said, the report of the Monopolies and Mergers Commission was far from conclusive. In particular, it established that on straightforward competition grounds, there is no reason to intervene in the proposed merger. My hon. and learned Friend was bound to attach importance to the interests of the shareholders. Any Ministers in any Government should think carefully and have compelling reasons before intervening in the workings of the market, a point made by my hon. Friend the Member for Fife, East (Mr. Henderson).
It has been suggested that the Government's stance is inconsistent with that which we took in the case of the Royal Bank of Scotland a year ago. I do not accept that. First, the majority report on the Royal Bank mergers made clear that its recommendation against the mergers was tied to the particular circumstances of the case. It did not constitute opposition in principle to the takeover of Scottish financial institutions. It was on that basis that the Government accepted the commission's recommendations. Secondly—
§ Mr. Deputy Speaker
Order. If the Minister is not giving way, the right hon. Gentleman knows that he has to resume his seat.
§ Mr. Fletcher
It is obvious that Opposition Members do no want to hear a comparison with previous cases. That case was more conclusive, with four members including the chairman opposed to either merger and one of the other two—
§ Mr. Millan
On a point of order, Mr. Deputy Speaker. Is it not extraordinary that hon. Members have heard a statement from the Minister that bears only one reasonable interpretation—that he and the Secretary of State for Scotland disagree with the Government's decision?
§ Mr. Fletcher
The simple truth is that each case is considered fully on its own merits. That is what could be expected. The hon. Member for Glasgow, Shettleston (Mr. Marshall) suggested, as did one or two other hon. Members, that the Charter merger would be bad news for Anderson Strathclyde. He suggested a much worse remedy—nationalisation. That alone should encourage my hon. Friends to vote against the motion on the Order Paper.
§ Question put:
§ The House divided: Ayes 209, Noes 282.817
|Division No. 97]||[10 pm|
|Abse, Leo||Dalyell, Tam|
|Allaun, Frank||Davidson, Arthur|
|Anderson, Donald||Davies, Rt Hon Denzil (L'lli)|
|Archer, Rt Hon Peter||Davis, Clinton (Hackney C)|
|Ashley, Rt Hon Jack||Davis, Terry (B'ham, Stachf'd)|
|Ashton, Joe||Deakins, Eric|
|Atkinson, N.(H'gey)||Dean, Joseph (Leeds West)|
|Barnett, Guy (Greenwich)||Dixon, Donald|
|Barnett, Rt Hon Joel (H'wd)||Dobson, Frank|
|Benn, Rt Hon Tony||Dormand, Jack|
|Bennett, Andrew(St'kp't N)||Douglas, Dick|
|Bidwell, Sydney||Dubs, Alfred|
|Booth, Rt Hon Albert||Duffy, A. E. P.|
|Boothroyd, Miss Betty||Dunnett, Jack|
|Bottomley, Rt Hon A.(M'b'ro)||Dunwoody, Hon Mrs G.|
|Bray, Dr Jeremy||Eadie, Alex|
|Brocklebank-Fowler, C.||Eastham, Ken|
|Brown, Hugh D. (Provan)||Ellis, R, (NE D'bysh're)|
|Brown, Ronald W. (H'ckn'y S)||Ellis, Tom (Wrexham)|
|Brown, Ron (E'burgh, Leith)||English, Michael|
|Buchan, Norman||Ennals, Rt Hon David|
|Callaghan, Rt Hon J.||Evans, John (Newton)|
|Campbell, Ian||Ewing, Harry|
|Campbell-Savours, Dale||Faulds, Andrew|
|Canavan, Dennis||Field, Frank|
|Cant, R. B.||Flannery, Martin|
|Carmichael, Neil||Ford, Ben|
|Carter-Jones, Lewis||Forrester, John|
|Cartwright, John||Foulkes, George|
|Clark, Dr David (S Shields)||Fraser, J. (Lamb'th, N'w'd)|
|Clarke.Thomas(C'b'atsre, A'rie)||Freeson, Rt Hon Reginald|
|Cocks, Rt Hon M. (B'stol S)||Freud, Clement|
|Cohen, Stanley||Garrett, John (Norwich S)|
|Coleman, Donald||Gilbert, Rt Hon Dr John|
|Concannon, Rt Hon J. D.||Golding, John|
|Cook, Robin F.||Grant, John (Islington C)|
|Craigen, J. M. (G'gow, M'hill)||Hamilton, James (Bothwell)|
|Crawshaw, Richard||Hamilton, W. W. (C'tral Fife)|
|Crowther, Stan||Harrison, Rt Hon Walter|
|Cryer, Bob||Hattersley, Rt Hon Roy|
|Cunliffe, Lawrence||Haynes, Frank|
|Cunningham, G. (Islington S)||Hogg, N. (E Dunb't'nshire)|
|Holland, S. (L'b'th, Vauxh'll)||Prescott, John|
|Home Robertson, John||Price, C. (Lewisham W)|
|Hooley, Frank||Race, Reg|
|Howell, Rt Hon D.||Rees, Rt Hon M (Leeds S)|
|Howells, Geraint||Richardson, Jo|
|Hoyle, Douglas||Roberts, Albert (Normanton)|
|Huckfield, Les||Roberts, Allan (Bootle)|
|Hudson Davies, Gwilym E.||Roberts, Ernest (Hackney N)|
|Hughes, Robert (Aberdeen N)||Roberts, Gwilym (Cannock)|
|Hughes, Roy (Newport)||Robertson, George|
|Hughes, Simon (Bermondsey)||Robinson, G. (Coventry NW)|
|Janner, Hon Greville||Rooker, J. W.|
|Jay, Rt Hon Douglas||Roper, John|
|John, Brynmor||Ross, Ernest (Dundee West)|
|Johnson, James (Hull West)||Ross, Stephen (Isle of Wight)|
|Johnson, Walter (Derby S)||Rowlands, Ted|
|Jones, Barry (East Flint)||Ryman, John|
|Jones, Dan (Burnley)||Sandelson, Neville|
|Kaufman, Rt Hon Gerald||Sever, John|
|Kerr, Russell||Sheldon, Rt Hon R.|
|Kilroy-Silk, Robert||Shore, Rt Hon Peter|
|Lambie, David||Short, Mrs Renée|
|Lamond, James||Silkin, Rt Hon J. (Deptford)|
|Leadbitter, Ted||Silkin, Rt Hon S. C. (Dulwich)|
|Lewis, Arthur (N'ham NW)||Skinner, Dennis|
|Lewis, Ron (Carlisle)||Snape, Peter|
|Litherland, Robert||Soley, Clive|
|Lofthouse, Geoffrey||Spearing, Nigel|
|Lyon, Alexander (York)||Spellar, John Francis (B'ham)|
|Lyons, Edward (Bradf'd W)||Spriggs, Leslie|
|Mabon, Rt Hon Dr J. Dickson||Stallard, A. W.|
|McDonald, Dr Oonagh||Stewart, Rt Hon D. (W Isles)|
|McElhone, Mrs Helen||Stoddart, David|
|McKelvey, William||Stott, Roger|
|MacKenzie, Rt Hon Gregor||Strang, Gavin|
|Maclennan, Robert||Straw, Jack|
|McTaggart, Robert||Summerskill, Hon Dr Shirley|
|Magee, Bryan||Taylor, Mrs Ann (Bolton W)|
|Marshall, D(G'gow S'ton)||Thomas, Dr R.(Carmarthen)|
|Marshall, Dr Edmund (Goole)||Tilley, John|
|Marshall, Jim (Leicester S)||Torney, Tom|
|Martin, M(G'gow S'burn)||Varley, Rt Hon Eric G.|
|Mason, Rt Hon Roy||Wainwright, E.(Dearne V)|
|Maxton, John||Wainwright, R.(Colne V)|
|Maynard, Miss Joan||Walker, Rt Hon H.(D'caster)|
|Mikardo, Ian||Watkins, David|
|Millan, Rt Hon Bruce||Welsh, Michael|
|Mitchell, R. C. (Soton Itchen)||White, Frank R.|
|Morris, Rt Hon A. (W'shawe)||White, J. (G'gow Pollok)|
|Morris, Rt Hon C. (O'shaw)||Whitehead, Phillip|
|Morton, George||Whitlock, William|
|Moyle, Rt Hon Roland||Wigley, Dafydd|
|Newens, Stanley||Willey, Rt Hon Frederick|
|Oakes, Rt Hon Gordon||Williams, Rt Hon A.(S'sea W)|
|O'Halloran, Michael||Wilson, Gordon (Dundee E)|
|O'Neill, Martin||Wilson, William (C'try SE)|
|Orme, Rt Hon Stanley||Winnick, David|
|Palmer, Arthur||Woodall, Alec|
|Park, George||Wright, Sheila|
|Parker, John||Young, David (Bolton E)|
|Pavitt, Laurie||Tellers for the Ayes:|
|Pendry, Tom||Mr. Ron Leighton and|
|Penhaligon, David||Mr. Allen McKay.|
|Powell, Raymond (Ogmore)|
|Aitken, Jonathan||Bendall, Vivian|
|Alexander, Richard||Benyon, Thomas (A'don)|
|Alison, Rt Hon Michael||Benyon, W. (Buckingham)|
|Amery, Rt Hon Julian||Berry, Hon Anthony|
|Ancram, Michael||Best, Keith|
|Arnold, Tom||Bevan, David Gilroy|
|Aspinwall, Jack||Biggs-Davison, Sir John|
|Atkins, Rt Hon H.(S'thorne)||Blackburn, John|
|Atkins, Robert (Preston N)||Body, Richard|
|Baker, Kenneth(St.M'bone)||Bonsor, Sir Nicholas|
|Baker, Nicholas (N Dorset)||Bottomley, Peter (W'wich W)|
|Banks, Robert||Bowden, Andrew|
|Beaumont-Dark, Anthony||Boyson, Dr Rhodes|
|Braine, Sir Bernard||Hannam, John|
|Bright, Graham||Haselhurst, Alan|
|Brinton, Tim||Hastings, Stephen|
|Brittan, Rt. Hon. Leon||Havers, Rt Hon Sir Michael|
|Brooke, Hon Peter||Hawkins, Sir Paul|
|Brotherton, Michael||Hawksley, Warren|
|Brown, Michael(Brigg & Sc'n)||Hayhoe, Barney|
|Bruce-Gardyne, John||Heddle, John|
|Bryan, Sir Paul||Henderson, Barry|
|Buchanan-Smith, Rt. Hon. A.||Higgins, Rt Hon Terence L.|
|Buck, Antony||Hogg, Hon Douglas (Gr'th'm)|
|Budgen, Nick||Holland, Philip (Carlton)|
|Burden, Sir Frederick||Hooson, Tom|
|Butcher, John||Hordern, Peter|
|Carlisle, John (Luton West)||Howell, Rt Hon D. (G'ldfd)|
|Carlisle, Kenneth (Lincoln)||Howell, Ralph (N Norfolk)|
|Carlisle, Rt Hon M. (R'c'n)||Hunt, David (Wirral)|
|Chalker, Mrs. Lynda||Hunt, John (Ravensbourne)|
|Channon, Rt. Hon. Paul||Hurd, Rt Hon Douglas|
|Chapman, Sydney||Irvine, RtHon Bryant Godman|
|Churchill, W. S.||Irving, Charles (Cheltenham)|
|Clark, Hon A. (Plym'th, S'n)||Jenkin, Rt Hon Patrick|
|Clark, Sir W. (Croydon S)||Jopling, Rt Hon Michael|
|Clarke, Kenneth (Rushcliffe)||Joseph, Rt Hon Sir Keith|
|Clegg, Sir Walter||Kaberry, Sir Donald|
|Cockeram, Eric||Kellett-Bowman, Mrs Elaine|
|Colvin, Michael||Kershaw, Sir Anthony|
|Cope, John||Kimball, Sir Marcus|
|Cormack, Patrick||King, Rt Hon Tom|
|Corrie, John||Kitson, Sir Timothy|
|Costain, Sir Albert||Knight, Mrs Jill|
|Cranborne, Viscount||Knox, David|
|Critchley, Julian||Langford-Holt, Sir John|
|Crouch, David||Latham, Michael|
|Dickens, Geoffrey||Lawrence, Ivan|
|Dorrell, Stephen||Lawson, Rt Hon Nigel|
|Douglas-Hamilton, Lord J.||Lee, John|
|Dover, Denshore||Le Marchant, Spencer|
|Dunn, Robert (Dartford)||Lennox-Boyd, Hon Mark|
|Durant, Tony||Lester, Jim (Beeston)|
|Dykes, Hugh||Lewis, Sir Kenneth (Rutland)|
|Eden, Rt Hon Sir John||Lloyd, Ian (Havant & W'loo)|
|Edwards, Rt Hon N. (P'broke)||Lloyd, Peter (Fareham)|
|Eggar, Tim||Loveridge, John|
|Emery, Sir Peter||Luce, Richard|
|Eyre, Reginald||Lyell, Nicholas|
|Fairbairn, Nicholas||McCrindle, Robert|
|Fairgrieve, Sir Russell||Macfarlane, Neil|
|Faith, Mrs Sheila||MacGregor, John|
|Farr, John||MacKay, John (Argyll)|
|Finsberg, Geoffrey||Macmillan, Rt Hon M.|
|Fisher, Sir Nigel||McNair-Wilson, M. (N'bury)|
|Fletcher, A. (Ed'nb'gh N)||McNair-Wilson, P. (New F'st)|
|Fletcher-Cooke, Sir Charles||McQuarrie, Albert|
|Fookes, Miss Janet||Major, John|
|Forman, Nigel||Marland, Paul|
|Fowler, Rt Hon Norman||Marten, Rt Hon Neil|
|Fraser, Rt Hon Sir Hugh||Mates, Michael|
|Fraser, Peter (South Angus)||Mather, Carol|
|Fry, Peter||Maude, Rt Hon Sir Angus|
|Gardiner, George (Reigate)||Mawby, Ray|
|Gardner, Sir Edward||Maxwell-Hyslop, Robin|
|Garel-Jones, Tristan||Mayhew, Patrick|
|Gilmour, Rt Hon Sir Ian||Mel lor, David|
|Glyn, Dr Alan||Meyer, Sir Anthony|
|Goodhart, Sir Philip||Miller, Hal (B'grove)|
|Goodlad, Alastair||Mills, Iain (Meriden)|
|Gorst, John||Mills, Sir Peter (West Devon)|
|Gow, Ian||Miscampbell, Norman|
|Gower, Sir Raymond||Moate, Roger|
|Gray, Rt Hon Hamish||Monro, Sir Hector|
|Greenway, Harry||Montgomery, Fergus|
|Griffiths, E.(B'y St. Edm'ds)||Moore, John|
|Griffiths, Peter (Portsm'th N)||Morgan, Geraint|
|Grist, Ian||Morris, M. (N'hampton S)|
|Grylls, Michael||Morrison, Hon C. (Devizes)|
|Gummer, John Selwyn||Morrison, Hon P. (Chester)|
|Hamilton, Hon A.||Mudd, David|
|Hamilton, Michael (Salisbury)||Murphy, Christopher|
|Hampson, Dr Keith||Myles, David|
|Neale, Gerrard||Speller, Tony|
|Needham, Richard||Spence, John|
|Nelson, Anthony||Spicer, Jim (West Dorset)|
|Neubert, Michael||Sproat, Iain|
|Newton, Tony||Squire, Robin|
|Normanton, Tom||Stainton, Keith|
|Nott, Rt Hon Sir John||Stanbrook, Ivor|
|Onslow, Cranley||Stanley, John|
|Oppenheim, Rt Hon Mrs S.||Steen, Anthony|
|Page, John (Harrow, West)||Stevens, Martin|
|Page, Richard (SW Herts)||Stewart, A.(E Renfrewshire)|
|Parris, Matthew||Stewart, Ian (Hitchin)|
|Patten, Christopher (Bath)||Stradling Thomas, J.|
|Pattie, Geoffrey||Tapsell, Peter|
|Pawsey, James||Taylor, Teddy (S'end E)|
|Percival, Sir Ian||Tebbit, Rt Hon Norman|
|Pink, R. Bonner||Temple-Morris, Peter|
|Pollock, Alexander||Thomas, Rt Hon Peter|
|Porter, Barry||Thompson, Donald|
|Prentice, Rt Hon Reg||Thorne, Neil (Ilford South)|
|Price, Sir David (Eastleigh)||Thornton, Malcolm|
|Proctor, K. Harvey||Townend, John (Bridlington)|
|Raison, Rt Hon Timothy||Townsend, Cyril D, (B'heath)|
|Rathbone, Tim||Viggers, Peter|
|Rees, Peter (Dover and Deal)||Waddington, David|
|Rees-Davies, W. R.||Waldegrave, Hon William|
|Renton, Tim||Walker, Rt Hon P.(Wcester)|
|Rhodes James, Robert||Walker, B. (Perth)|
|Rhys Williams, Sir Brandon||Walker-Smith, Rt Hon Sir D.|
|Ridley, Hon Nicholas||Wall, Sir Patrick|
|Ridsdale, Sir Julian||Waller, Gary|
|Rifkind, Malcolm||Walters, Dennis|
|Rippon, Rt Hon Geoffrey||Ward, John|
|Roberts, Wyn (Conway)||Warren, Kenneth|
|Rossi, Hugh||Watson, John|
|Rost, Peter||Wells, Bowen|
|Royle, Sir Anthony||Wells, John (Maidstone)|
|Rumbold, Mrs A, C. R.||Wheeler, John|
|Sainsbury, Hon Timothy||Whitney, Raymond|
|St. John-Stevas, Rt Hon N.||Wickenden, Keith|
|Scott, Nicholas||Wiggin, Jerry|
|Shaw, Giles (Pudsey)||Williams, D.(Montgomery)|
|Shaw, Sir Michael (Scarf)||Winterton, Nicholas|
|Shelton, William (Streatham)||Wolfson, Mark|
|Shepherd, Colin (Hereford)||Young, Sir George (Acton)|
|Shepherd, Richard||Younger, Rt Hon George|
|Sims, Roger||Tellers for the Noes:|
|Skeet, T. H. H.||Mr. Robert Boscawen and|
|Smith, Tim (Beaconsfield)||Mr. Ian Lang.|
§ Question accordingly negatived.