Enterprise Bill

[back to previous text]

The Chairman: Order. The hon. Gentleman is moving away from the purpose of the amendment.

Mr. Barnes: That was a little detour.

Adrian White will not tell anyone about his plans for the site. The 700 jobs, which were of great importance to the area, have gone. The great bulk of them—approximately 75 per cent.—were done by people living within a five-mile radius of the plant. I am by no means alone in pressing for public interest considerations. The amendments are not just the revenge of the ex-Biwater workers for the failure to consider their proposals properly. It is a genuine concern that applies over a wide area.

Mr. Purchase: I understand and empathise with the idea of revenge and I realise that my hon. Friend speaks to the amendments in the spirit of incorporating into the Bill both the public interest, however it is defined, and the interests of employees in an enterprise that may be taken over or merged without a reference. However, does my hon. Friend share my concern that if such a public interest power were given to the OFT, no control whatever over its exercise would be possible? Does he not agree that a strengthening of trade unions is ultimately a better way of protecting the interests of workers such as those at Biwater than we could ever expect from the OFT or any other institution concerned primarily with the accumulation of capital and preoccupied only with shareholder interests?

Mr. Barnes: I am all for developing the influence of trade unionism so that people can fight their corner. One way for trade unions to achieve their ends is to secure procedural agreements that are favourable to their position and allow them to secure better substantive agreements in the future. The various procedures and arrangements are relevant to our consideration of the Bill. Will there be some feed-in to the trade union movement either through the producer super-committee that I have suggested, or by providing an avenue of access to present views to the OFT or, as appears in a later amendment, to the Secretary of State? The Biwater case was dealt with badly by the OFT, but the Secretary of State and the Government office for the east midlands had enough material to justify using their power to reject the OFT recommendation and make a reference possible.

Column Number: 272

Mr. Purchase: Does my hon. Friend accept that that is exactly my point?

Mr. Barnes: Perhaps it takes me a while to achieve complete understanding, but now that I understand it, I appreciate my hon. Friend's point.

Mr. McWalter: My hon. Friend has presented a powerful case about what should have happened at Biwater, but does he accept that Ministers of a certain political disposition, or OFT officers who share it, might decide that it is in the public interest to shut down an old pipeline firm and introduce spanking new pipes manufactured in Brazil? Simply because the public interest is incorporated in the provisions, it does not follow that it will necessarily redound to the benefit of trade unionists and others.

Mr. Barnes: I entirely accept that. Indeed, that is precisely what occurred in the Biwater case. It is not just that a Conservative Government interpreted the case in a restrictive way and failed to listen to representations. This was a new Labour response, which I was quite annoyed about. The type of arguments that I would have used with a Conservative Government were certainly used with my own, to the extent that calls were made for the resignation of the then Secretary of State for Trade and Industry, who is now the Secretary of State for Transport, Local Government and the Regions. I made the same claims in relation to the Biwater issue, but I would not make them in connection with the position that he has adopted on the railways, which is a much more sensible response.

10.45 am

I was saying that I am not alone in this matter. The amendments are not connected only with the workers who mobilised, organised, marched and demonstrated in Clay Cross. The community, including women's organisations and trade union organisations, went with them, and there was also a commitment by councils and others in the area. The provision needs to be in place so that it can be used in the right circumstances and when a particular response needs to be made. Other Biwater-type cases might emerge.

As a result of my feelings on this issue, I contacted the General Secretary of the TUC, John Monks, and a number of other union leaders. In return, I received correspondence from the TUC, which I am permitted to use here. It relates to an exchange of views between John Monks and the Secretary of State for Trade and Industry.

In a letter of 20 March, John Monks wrote to the Secretary of State:

    ''As you will be aware, the TUC has consistently argued that mergers and takeovers should be regulated to operate in the public interest, and that employment effects should be taken into account alongside the impact on competition when judging a bid . . . we believe that as it stands the legislation risks producing some perverse and politically damaging decisions.''

Mr. Monks suggests an avenue that might accommodate the provision, which might emerge under a later amendment.

The response from the Secretary of State, dated 9 April, states:

Column Number: 273

    ''The system will . . . contain a fallback option to consider other public interest matters before a case is referred, although in reality the Government does not envisage that new public interest gateways will be created except in extremely rare circumstances.''

That comment is a little disingenuous. Clause 56 specifically refers only to national security, although it opens up the possibility of Parliament adding something else on occasion. However, the battle to get the provision to be anything like what I am suggesting would be very difficult to win. The Secretary of State goes on to say:

    ''I understand that mergers do have a wide impact beyond competition concerns, but the focus of our merger regime is to achieve long term economic efficiency.''

I presented the amendments as probing, but I want to stress the seriousness of my point. I do not expect a favourable response from my hon. Friend the Under-Secretary now. I will hold on and hope that suitable measures can be introduced on Report or in the House of Lords. I certainly hope that the serious concern that I have expressed will be fully considered and that the principles in the Bill can accommodate it. If there is a good economic and social argument for a firm to continue operating, people should not have to face the type of situation that we faced locally. It should at least be possible to put in place measures to avoid the dramatic collapse of industries.

Dr. Cable: I welcome this discussion. The selection of amendments has created some problems for us. Two groups of amendments appear to come from exactly opposite points of view. The important public interest debate is couched in terms of a very general clause, whereas the amendments, which explained what public interest meant, have not been selected. Obviously we have to operate within that framework.

I do not want to disappoint the hon. Member for Eastbourne over the eclectic thinking of the Liberal Democrats. I see considerable merits in both sets of amendments. The hon. Gentleman has a somewhat chequered history in terms of his European credentials, but that does not make his arguments invalid. Indeed, they were very strong. The fact that the hon. Member for North-East Derbyshire (Mr. Barnes) felt it necessary to get the signatures of the hon. Members for Glasgow, Kelvin (Mr. Galloway) and for Bolsover (Mr. Skinner) does not invalidate his amendment either. It has a lot of common sense behind it.

Mr. Barnes: My hon. Friend the Member for Bolsover lived in Clay Cross for a long time. He is a prominent figure in the area.

Dr. Cable: I was going to say that if he had asked for my signature I would have happily given it to him.

Miss Johnson: May we clarify whether the hon. Gentleman would have put his name to the Conservative amendments?

Dr. Cable: I would have, because both sets of amendments seem sensible, although they come from different points of view. They are not incompatible. Let me take the dominance point first. The hon. Member for Eastbourne was right.

Mr. Waterson: Having established the Liberal Democrats' position beyond peradventure, has the

Column Number: 274

hon. Gentleman perhaps been reading his own campaign document, leaked to the papers today, which advises Liberal Democrats to ''be wicked'' and to ''act shamelessly''?

Dr. Cable: This has nothing to do with lack of shame. It stems from our ability to try to understand other people's point of view and draw strength from different standpoints. I hope that members of the Committee are equally broad- minded.

Let me take each of the amendments in turn. The hon. Member for Eastbourne's amendment relates to the potential incompatibility between British merger legislation and that of the European Union. He made the argument well and I do not need to develop it in detail. It could be said, and this is probably the Government's view, that we must apply the principles of subsidiarity. There are contexts where the principles of subsidiarity apply, but I am almost certain that this is not one of them. We are talking about fundamentally incompatible approaches in terms of law for companies that in many cases will be on the borderline of European and British competition law. It could create serious problems.

On Tuesday, when we were debating consumer protection, the Under-Secretary intervened to remind us that the European Commission had produced a Green Paper on consumer protection. She reminded us of the dangers of British practice getting too far out of line with the EU, precisely because the European Commission was developing its own set of rules within the single market with which we had to be compatible.

Previous Contents Continue

House of Commons home page Parliament home page House of Lords home page search page enquiries ordering index

©Parliamentary copyright 2002
Prepared 25 April 2002