Orders of the Day — Commission for Industry and Manpower Bill

Part of the debate – in the House of Commons at 12:00 am on 8th April 1970.

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Photo of Mr Edmund Dell Mr Edmund Dell , Birkenhead 12:00 am, 8th April 1970

No doubt the hon. Gentleman will be on the Committee; we shall be glad to see him, as he knows a little about this subject, and we can then discuss whether it is a non sequitur.

We need this power for a further reason which was given by the Monopolies Commission in a recent report. The one thing which is important if we are to have an efficient, competitive economy is the preservation of the well managed smaller firm which is often taken over by a larger firm without any increase in efficiency.

My question whether there would be a standstill on a merger pending the inquiry was not answered. We are left in the ludicrous position in which the Opposition left themselves on the 1964 White Paper, that there would be inquiries into mergers, but, meanwhile, mergers would be allowed to go ahead. No doubt if the Commission found that a merger had been against the public interest, the parties would divest. There would obviously be no real power to deal adequately with that situation. In other words, this idea simply has not been thought through.

The right hon. Member for Leeds, North-East—I regret his absence, since he knows about these subjects—said in the House on 10th November, 1969: The Government have rightly in our view rejected legal guidelines for mergers."—[OFFICIAL REPORT, 10th November, 1970; Vol. 191, c. 99.] If there is to be a registrar of monopolies referring mergers he will have to have guidelines.

That is why I asked the right hon. Member for Mitcham what were the criteria. Either this registrar will have enormous discretion, or none. If there is to be enormous discretion, then the Government should exercise it, not a registrar. To have a registrar exercising this discretion would in no way reduce uncertainty. Indeed, he would rapidly lose public confidence. If he had no discretion it would be difficult, or virtually impossible, to draw up appropriate guidelines because it is impossible to define in advance the weight to be attributed to different factors in a merger situation.

Therefore, there is need for discretion and that discretion must be the Government's—except, possibly, on one condition. Far more mergers would be referred under the Registrar of Monopolies than are referred at the moment, and this is inconsistent with a great deal of what has been said in this House about the advantages which would accrue from mergers.

I have devoted a good deal more of my speech to this subject than did the right hon. Gentleman, because I happen to have thought about this subject. By all means let us discuss this matter in Committee. The main point is that if this suggestion is intended to increase competition and strengthen the situation, the Opposition should vote for the Bill and seek to move Amendments in Committee. But if they are to vote against the Bill, their Amendments will be regarded as probably signifying an intention not to strengthen the Commission and increase competition but to weaken it.