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Lord McIntosh of Haringey: My Lords, of course all of us agree with the sentiments expressed by the noble Baroness. I do not know whether it is of any consolation to her to know that at the Paris Club meeting this week, to which I have referred, it was agreed that Senegal can be added to the countries which will get enough debt relief to reduce them to the debt sustainability level of the Naples Agreement, which is 67 per cent. We hope that other countries in Africa and elsewhere will be added to that list.
Baroness Rawlings: My Lords, would the noble Lord inform the House how plans for a proposed millennium bond are progressing?
Lord McIntosh of Haringey: My Lords, I am afraid that the noble Baroness has caught me out. I shall have to write to her.
The Lord Bishop of Winchester: My Lords, does the Minister agree that it is precisely his language and that of others about getting the economies of the countries concerned under control which lies at the root of the difficulty? For a country such as Rwanda the decisions that it would have to take in order to get its economy under control would be deeply damaging. Is he aware that it is for that reason that that country and others find themselves quite unable to qualify for the HIPC and other initiatives?
Lord McIntosh of Haringey: My Lords, that is quite correct and why I put the issues of aid and debt relief side by side rather than falling for the temptation of
mixing them up. It is quite clear that Rwanda is in particular need of huge levels of aid--and not in the form of loans, which would create debt.
Viscount Brentford: My Lords, I appreciate the steps that the Government have already taken this week, but is the Minister aware that the media have talked about differences among the heads of G8, with Germany being particularly unco-operative? Can the noble Lord inform us of the extent of the support which he is getting for debt relief from other countries in G8?
Lord McIntosh of Haringey: My Lords, I believe the noble Viscount will understand if I prefer not to criticise foreign governments at this Dispatch Box. I have made it clear that this country has been taking a lead. The Prime Minister and the Chancellor of the Exchequer have personally sought to press matters forward faster than they have been progressing. Logically, that implies that there are those who are less enthusiastic, but I would prefer not to name them.
Takeovers: EU Proposals
3.15 p.m.
Lord Pearson of Rannoch asked Her Majesty's Government:
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What progress they are making in their negotiations with the European Commission over the latter's proposals for a directive on takeovers.
Lord Pearson of Rannoch: My Lords, I thank the noble Lord for that reply which, I suppose, is as optimistic as he can make it. Since the directive, as drafted, would, among other things, introduce tactical litigation into our excellent system of mergers and acquisitions, does the noble Lord agree that this is yet another example where introspective legislation from Brussels is potentially very damaging to our wider commercial interests? Furthermore, is it not very misguided, even by the standards of the European Commission, to plan a directive of this kind when the various European regimes are so different from our own and from each other and where, for example, bearer shares are common and hostile bids are a rarity?
Lord Simon of Highbury: My Lords, as I implied in my Answer, it is very clear that many of the member
states still have objections to the way in which the Commission has put forward this directive, very much taking the point made by the noble Lord that very different circumstances apply to takeover regimes in each country. The objective of protecting shareholders under any takeover regime is important, and that is at the heart of the directive. It is too soon to speculate as to whether all member states are happy with the way in which the directive is currently couched. We should wait for the next stage.
Lord Borrie: My Lords, does my noble friend agree that the UK takeover code system in the City of London has been operating well and, indeed, progressively better over the past 30 years? Does he further agree that it has served the shareholders of this country extremely well? It has avoided litigation which can lead to delays in what may be desirable in terms of changes in company structure. Does my noble friend agree with me that it is not necessary for there to be a legalised system operating in each country of the European Union just because such may be desirable in some member countries and not in others?
Lord Simon of Highbury: My Lords, I agree with everything that my noble friend has said. I believe that our non-statutory basis has been extremely successful for both shareholders and companies. If we wish to progress to a situation where it would be as easy for our companies to take over European-based companies we shall need to find some common causes. Currently, I believe that it is fair to say that our national system is the envy of all other member states. We are trying to arrive at a system whereby our own companies wishing to make takeovers in Europe will benefit from the same kind of regime. I agree that it would be best if it were non-statutory, but let us see what we can achieve.
Lord Geddes: My Lords, is the Minister aware of any proposal to bring forward this matter under the Austrian presidency?
Lord Simon of Highbury: My Lords, yes I am. Plans are in hand.
Lord Jenkins of Putney: My Lords, does my noble friend agree that our system, such as it is, takes insufficient account of the interests of employees and that it should be improved in that direction before it can become an example to anyone else?
Lord Simon of Highbury: My Lords, there has probably always been some misunderstanding about how the interests of employees can be taken into account. Two current directives take account of employees' interests in change of ownership situations and run parallel to the proposed statute. It has always been clear, but misunderstood, that consultation with employees is possible under the existing takeover code. Issues that arise relate to secrecy and the protection of existing shareholders' rights in the run-up to a bid. Our own system does not in any way prevent consultation with employees.
Lord Stoddart of Swindon: My Lords, does my noble friend recall that Sub-Committee E of the Select
Committee on the European Communities considered the matter deeply and that its recommendations were accepted by the previous government? Has there been any substantial change in policy since 1st May last year? If so, perhaps my noble friend could tell us about it.
Lord Simon of Highbury: My Lords, I am not fully aware that the previous government developed a policy on this matter. However, to the extent that we are studying the existing legislation, we are still to be convinced that any directive will improve this country's non-statutory basis for dealing with takeovers. Until we are convinced that that could be improved, we see no reason to move away from our current highly effective and successful system.
Lord Pearson of Rannoch: My Lords, would the noble Lord the Minister confirm to the House that the Commission intends to bring in any directive under single market legislation, which will therefore be subject to the dreaded qualified majority vote in Brussels? Would he further agree that this might be one of several cases which might provide a good test as to whether the Government's charm offensive is working in Brussels?
Lord Simon of Highbury: My Lords, I do not think that this is exactly a matter of charm, although charm is always helpful. Indeed, I find that in most negotiations the aggressive stance is usually not appropriate when I am with my European colleagues. I have no doubt that a little charm would not be unhelpful, but the debate is really about the substance of the matter. We are still far from getting to the substance of the matter because we do not know what other member states will put on the table when, as the noble Lord, Lord Geddes, predicted, the Austrians raise this question at the next Council, as I am sure that they will. We must wait and see the positions of all other member states. However, I am sure that we shall adopt our usual charming stance.
Lord Henley: My Lords, when the noble Lord exercises his undoubted charm, can he tell us whether or not this matter can be dealt with by qualified majority voting?
Lord Simon of Highbury: Yes, my Lords, this matter will be dealt with by qualified majority voting.
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