I presume that this is a reference to the bid by Pembridge Investments, a Bermuda-registered company, for DRG. I and the Director General of Fair Trading have received various representations from hon. Members and others about it. The director general is still considering the bid before giving his advice.
My hon. Friend's assumption is quite correct. Does he not agree that there is room for concern when the only basis for a bid is the subsequent break-up of a group, with the resulting sale forming virtually the creation of a monopoly of several parts of the group? If that is the case, will my hon. Friend reassure me that the potential monopoly is taken into account while the bid is continuing rather than waiting until he is presented with a fait accompli?
I am grateful to my hon. Friend for his point because I know that he has a constituency interest in the matter and he is right to make representations in any way possible. Were there to be a subsequent sale of an asset after a bid had been successful, that itself would be subject to investigation by the competition authorities and to any advice that the director general might see fit to give my right hon. Friend. I cannot give any further information about the current bid. My right hon. Friend will make his judgment on the basis of all the representations and submissions in the light of the director general's advice.
Will the Minister declare his opposition to this type of junk bond funding of the destruction of British companies, of which DRG is the latest victim? He is quite right to say that in Bristol the takeover of that company will result in the loss of thousands of jobs in the engineering industry—not just in DRG but in associated companies. Is it not time for the Government to step in and say once and for all that junk bonds and high leverage bids against thriving British companies are not to be permitted?
Junkiness is in the eye of the beholder. The Government believe that these decisions are best made by shareholders and bankers, who have to make important judgments on behalf of the companies in which they are investors or which they are financing. The Government's competition and monopoly policy is clear and consistent. It was last stated in the blue paper on mergers, and was restated subsequently by my right hon. Friend the Secretary of State in a speech and by myself in a speech to the House on the BAT-Hoylake bid. I recommend that the hon. Lady reads the statement of Government policy, which is clear and gives shareholders and bankers the powers and opportunities that they need to make the right decisions on behalf of the companies in which they invest.
My hon. Friend will be aware that Sea Containers is a Bermuda-registered company. It announced today that it will be selling its Isle of Wight ferries. My hon. Friend will be further aware that in May I wrote to the then Chancellor of the Duchy of Lancaster my right hon. Friend the Member for Braintree (Mr. Newton) about a possible bid for the Isle of Wight ferries. I regard it as a considerable injustice, as do my constituents, that British Rail's board of management sold those ferries in the only privatisation in which employees were not allowed to purchase shares in their own company —an incredible reward for many years of loyal strike-free service to the Isle of Wight. Will my hon. Friend keep a weather eye on the sale of the Isle of Wight ferry routes, which are so essential to us, to ensure that this time a United Kingdom-registered company can purchase them and that the employees will have the opportunity of sharing in the wealth that they create?
Like my hon. Friend the Member for Bristol, North-West (Mr. Stern), my hon. Friend the Member for the Isle of Wight (Mr. Field) is a good constituency Member of Parliament. I know that he has taken a strong interest in the Isle of Wight ferry service because he rightly wants a first-class service for his constituents. I understand that officials at the Office of Fair Trading are making preliminary inquiries into ferry services for the Isle of Wight under the competition legislation. Anyone who has views on the subject should write to the director general, as I believe that my hon. Friend has done. Any possible buyer of the ferry services, which according to press reports today are on the market, will be considered in the usual way by the competition authorities, who will make their advice available to my right hon. Friend the Secretary of State.
Is the Minister saying that the Government do not have a view about high leverage junk bond bids against succesful British companies? He will be aware of the problem that this method has caused BAT Industries recently. The leveraged bid for DRG is causing the problems referred to by my hon. Friend the Member for Bristol, South (Ms. Primarolo). Is he saying that the Government do not have a view, when successful British companies are being attacked by companies formed offshore in Bermuda with the sole purpose of breaking up British companies and making money for individuals rather than shareholders?
The hon. Gentleman cannot have listened to my previous reply. The Government have an extremely clear mergers policy, which has been stated on several occasions, and I recommend that the hon. Gentleman reads it. The aim of merger policy is to ensure that the public interest is not damaged. Public and private interests most usually diverge, but not uniquely, where competition is adversely affected by the proposed merger. All considerations can be taken into account by the director general, who gives his advice on any particular bid in the usual way. The question whether people should borrow to buy things is largely a matter for them, for shareholders and for bankers. Where will the hon. Gentleman stop in his investigations into people borrowing to buy things? Does he believe, for instance, that borrowing to buy certain kinds of houses is wrong, which seemed to be what the hon. Member for Dagenham (Mr. Gould) was saying in the Walden interview?
Is my hon. Friend saying that there is no national interest in this? How does he define national or public interest? Is it correct for people based overseas, who can remit profits overseas, to take over and break up British companies which are of great value to the economy merely to make money for a few people and not for the general public, bearing in mind that most such companies are owned by institutions rather than the public in general? We must have a national industrial strategy.
My hon. Friend should take note that the central point of Government policy is to allow shareholders to decide in most cases. They are the proper people to make those decisions and there is no overwhelming evidence to suggest that they are bad at making them. Shareholders should be allowed to make up their own minds. By all means if there are major matters of importance, draw them to the attention of shareholders, the company and the institutions concerned, perhaps through the press and in the normal way. In most cases it is right that people should be free to buy or to sell their assets as they see fit. The public interest is defined in various ways, depending upon the situation, and the director general will give the necessary advice to my right hon. Friend.