Vaux Brewery

Part of Opposition Day – in the House of Commons at 7:44 pm on 29th April 1999.

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Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry 7:44 pm, 29th April 1999

I shall deal specifically with the relationship between shareholders and the company in a few minutes, and I should be grateful if my right hon. Friend could wait until I reach that part of my contribution. I think that that will be a more helpful way in which to tackle his very genuine concern.

Although we accept that it may be difficult in the days and weeks ahead to find a new buyer for one or both of the breweries, we have not given up hope. Someone who sees the excellent facilities at the both the Vaux and the Ward breweries may well decide that buying and maintaining the breweries would represent a viable commercial opportunity.

The Government's position is very clear. If new options emerge for preserving employment at the breweries, we stand ready to provide assistance. I confirm to my hon. Friend the Member for Sunderland, South that the £6 million that we offered a few weeks ago in an attempt to secure the future of the Vaux brewery in Sunderland remains on the table. I hope that someone will come forward, in the days and weeks ahead, and use the £6 million that the Government are prepared to offer to secure the employment of the 600 or more people who presently work at the Vaux brewery.

My hon. Friend the Member for Sunderland, South raised a number of specific issues that I shall address head on this evening. First, he mentioned the possibility of anti-competitive behaviour in the beer market, and suggested that the four big brewers may be acting and exerting influence in a way that would distort that market. My hon. Friend would be absolutely right to draw that possibility to the attention of the Director General of Fair Trading. It is exactly the sort of conduct that would be appropriate for him to investigate.

My right hon. Friend the Member for Bishop Auckland and my hon. Friend the Member for Sunderland, South will be aware that it is for the director general to consider the comments that have been made, and to decide whether an investigation should be carried out. However, I am confident that the director general will look carefully at what has been said in this debate, and at any further information that may be passed to him.

My hon. Friend the Member for Sunderland, South also raised the issue of action by certain large City institutions. The Government are very much aware of how such institutions can operate, and of those institutions' powerful position in relation to matters such as this.

We are considering ways in which to make the market for investment work more effectively as part of our wider agenda of increasing growth and jobs in the UK by improving productivity. We want City institutions to recognise that a short-term approach is often neither in the interests of individual companies that might be affected at the time nor in the long-term interests of City institutions themselves or the wider UK economy.

My right hon. Friend the Member for Bishop Auckland mentioned the position of small shareholders and the possibility that the views of a minority of shareholders may be ignored by those who command block votes. The 1998 pre-Budget report introduced by my right hon. Friend the Chancellor of the Exchequer discussed ways in which to bring greater transparency, responsibility and accountability to the relationship between institutional investors and the fund managers they employ. That work is being progressed right now. There are real issues about the interests and rights of small shareholders.

There are no easy or quick answers in this area. However, I can assure the House that I will talk personally to investors and fund managers about the points raised in the pre-Budget report and in the debate tonight about productivity and corporate governance.