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Written Answers to Questions

Thursday 26 October 2000


Business Relations

Mr. Bercow: To ask the Secretary of State for Trade and Industry how many new regulations on business were introduced by his Department in the financial year 1999-2000. [134771]

Ms Hewitt: My Department was responsible for 172 regulations affecting business in this period. Of these, 135 had no cost impact on business and 18 reduced businesses' costs. Sixty-three of them were Orders licensing businesses as public telecommunications providers.

Virgin Group

Mr. Gale: To ask the Secretary of State for Trade and Industry if he will establish an inquiry into the privatisation in 1988 of the Virgin Group and the subsequent re-sale in 1989 of a 25 per cent. stake in that company to the Pony Canyon Company. [134618]

Dr. Howells: If the hon. Member sends me any evidence in support of this request I will consider it.

Merger Regime

Mr. Goggins: To ask the Secretary of State for Trade and Industry if he will make a statement on the Government's plans for reforming the merger regime. [135684]

Mr. Byers: In August last year the Government published proposals for reforming the UK's system of merger regulation and invited interested parties to comment on them.

When I launched the consultation I set out key principles which a reformed regime should reflect. In particular, it needed to provide effective and proportionate control of mergers which had harmful effects; be clear, transparent, consistent and fair; and impose minimum burdens on those using it. I proposed two fundamental reforms to the current regime. First, the framework for decisions should be clarified, focusing it more clearly on competition; and secondly, ministerial involvement in merger decisions should be minimised. In addition, I put forward a number of more detailed proposals for reform covering issues such as the status of the independent competition authorities, exceptional interest cases and timetables.

We received 60 representations from a broad range of companies, competition lawyers, trade unions, business and consumer organisations, regulatory bodies and a number of individuals. There was a broad support for minimising ministerial involvement and moving towards a competition-based test. Respondents also provided useful views on other aspects of the regime.

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I am publishing today the Government's response to this consultation, which summarises the views received and sets out proposals for the future.

In summary:

We intend to define national security in the legislation from the outset as an area raising issues of exceptional public interest. In addition, we intend to give the Secretary of State a reserve power to define further specific exceptional public interest criteria where ministerial involvement in the mergers process may be necessary, although there are no current plans to make any such orders. This power will be subject to the approval of Parliament.

There are a number of more detailed issues set out in the document, including the specific form of the competition test and of the qualifying thresholds, and alternative approaches to develop the Competition Commission's procedures for identifying remedies. The Government would welcome further views on aspects of these. While the principles underlying the reforms are clear, today's announcement represents a further stage in consultation, not the end of the process. We will continue to develop the detail of the proposals, consulting with interested parties where appropriate.

The Government intend to introduce legislation designed to implement the measures set out in the document as soon as parliamentary time permits.

However, in light of the broad support among consultation responses for the thrust of the reforms, I have been examining ways of making progress towards operating the current regime consistently with the principles underlying the reforms, so far as is possible within the existing framework. I am now, therefore, adopting a new policy in relation to the advice I receive from the Director General of Fair Trading.

First, I confirm I will continue to refer cases to the Competition Commission primarily on competition grounds.

But I wish to go further, in advance of legislation.

My policy from today will be to accept the advice I receive from the Director General of Fair Trading on whether or not to refer merger cases to the Competition Commission, save in exceptional circumstances.

I do not expect exceptional circumstances to arise often. It may be appropriate for me to intervene, for example, where a merger raises national security issues or where

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there are other unusual circumstances, such as where there is a material change after the submission of the DGFT's advice, or where the advice of the DGFT conflicts with the views of sectoral regulators.

I think that it is right that the role of the Director General of Fair Trading should be emphasised in this way. This policy currently covers only my decisions following the advice of the DGFT on reference decisions (including undertakings in lieu). I intend to review in 12 months time the position in relation to my decisions following advice from the Competition Commission after a full inquiry into a referred merger.

Today's announcement reflects my view that the Director General is best placed to assess competition issues in individual cases. As previously, it will be for the Director General to decide on the process he thinks best serves him in the formulation of his advice. Departmental officials will continue to assist in this process where the Director General of Fair Trading considers this appropriate.

Lastly, I want to take what action I can to reduce the burdens of the current system on business. To this end I propose to exempt small firms from paying merger fees. I am publishing draft proposals for doing this today and seeking interested parties' views on them.

Coal Industry

Mr. Redwood: To ask the Secretary of State for Trade and Industry what grant money has been paid to the coal industry since his announcements offering £100 million to the industry. [134977]

Mrs. Liddell: On 27 July, I announced that the UK Government had formally applied to the European Commission for its approval to pay operating aid to United Kingdom coal producers over the period to July 2002. The European Commission is still considering our application, so no grant money has yet been paid to the coal industry under this scheme.


Mr. Redwood: To ask the Secretary of State for Trade and Industry if he has obtained EU approval for Government funding to Nissan. [134979]

Mr. Alan Johnson: Notification of an RSA grant to Nissan to secure the Micra project has been made to the European Commission and a response is awaited.

Mr. Redwood: To ask the Secretary of State for Trade and Industry on what terms he offered Nissan £40 million of Government aid; and when he plans to pay Nissan such grant. [134976]

Mr. Alan Johnson: An offer of RSA has been made to Nissan in an effort to ensure the Micra project for its Sunderland plant. The offer was made subject to European Commission approval under the Motor Vehicle State Aid Framework.

If the Commission approves the offer and Nissan decide to locate the Micra project in Sunderland, payments will be made when agreed capital expenditure and job targets are met.

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New Millennium Experience Company

Mr. Baker: To ask the Secretary of State for Trade and Industry, if his Department will launch an inquiry to establish whether the New Millennium Experience Company has fulfilled its duties under section 221 of the Companies Act 1985 to maintain certain specific accounting records, with particular reference to maintaining a record of assets and liabilities. [134429]

Dr. Howells: As is known already, the National Audit Office are inquiring into the New Millennium Experience Company Limited. The findings of the inquiry are expected to be published in early November and will be considered by the Public Accounts Committee. Accordingly, it would be both premature and a wasteful duplication of resources for my right hon. Friend the Secretary of State for Trade and Industry to appoint inspectors at this stage.

Robert Maxwell

Mr. Baker: To ask the Secretary of State for Trade and Industry, pursuant to the answer to the hon. Member for Great Grimsby (Mr. Mitchell) of 20 June 2000, Official Report, column 142W, regarding Robert Maxwell, when he expects to receive a report from the inspectors appointed on 8 June 1992 under the Companies Acts to investigate the affairs and membership of Mirror Group Newspapers plc; and what has been the cost to date of the inspection. [134879]

Dr. Howells: The inspectors have not completed their inquiries and so have not yet submitted their report to my right hon. Friend the Secretary of State for Trade and Industry. Although I am hopeful that these inquiries will be completed shortly, the inspectors are independent and I am unable to say when this is likely to be. The cost of the inspection to date (excluding Value Added Tax) is £7,946,344.

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