HC Deb 25 May 1988 vol 134 cc327-38 3.31 pm
Mr. Bryan Gould (Dagenham)

(by private notice): To ask the Chancellor of the Duchy of Lancaster if he will make a statement on the decision not to refer the Nestlé bid for Rowntree to the Monopolies and Mergers Commission.

The Chancellor of the Duchy of Lancaster and Minister of Trade and Industry (Mr. Kenneth Clarke)

This morning my right hon. and noble Friend announced his decision not to refer to the Monopolies and Mergers Commission Nestlé's bid for Rowntree, or Suchard's 29.9 per cent. holding. This decision was in accordance with the advice of the Director General of Fair Trading. It is now for Rowntree's shareholders to decide whether to accept Nestlé's bid.

Our policy is that, in deciding whether to refer a merger to the MMC, the main consideration is the effect of the merger on competition. Neither of these proposals raise competition issues which justify a referencé. Nestlé and Suchard have only 3 per cent. and 2 per cent. respectively of the United Kingdom chocolate market.

My right hon. and noble Friend also concluded, after considering the Director General's advice, that there were no employment, reciprocity or other public interest issues which justified a reference.

The United Kingdom has benefited greatly from both inward and outward investment. We believe that open markets are the best means of encouraging efficiency and generating wealth and jobs. This applies to capital markets as well as to markets for goods and services.

The success of the United Kingdom economy is the best evidence of the effectiveness of our policies on competition and investment. My right hon. and noble Friend's decision is consistent with those policies, and is in the best interests of our continued economic prosperity.

Mr. Gould

Is not this decision a betrayal of British industry? Is it not a grave blow to the work force at Rowntree, to the local communities affected and to all those hon. Members, on both sides of the House, who understand the importance of Rowntree to their local economies? Is it not unfortunate that by this decision the opportunity has been missed to take those views and also the national interest properly into account? Is it not unfortunate that the decision will, instead, be taken exclusively by institutional shareholders according to their own narrow interests?

Why was the regional dimension not fully taken into account? Is it not clear that Rowntree, as one of the few major British companies with a headquarters outside the south-east, will lose that regional character if it is absorbed into a Swiss multinational? Should not the lack of reciprocity, in practical terms at least, between ourselves and the Swiss have been taken fully into account? What consideration was given to making a prohibition order under section 13 of the Industry (Amendment) Act 1975?

Given the similar threats that now emerge to similar British companies, the confused state of the Government's competition policy, and the added complications of 1992 and the internal market, may we have a debate on these important issues as soon as possible?

Mr. Clarke

I do not believe that there is any uncertainty about our policy. We have clear competition laws that govern such matters. We recently issued a Blue Paper which clearly set out our policy on monopolies arid mergers. At the time it was not seriously challenged by anybody. We have a clear view of what is required to prepare this country for 1992 and to continue to keep it competitive in markets that are becoming ever more global for large numbers of products. In response, we are faced with extremely uncertain populism, which is not properly thought out and is based largely on short-term lobbies and fear of foreigners coming in.

We realise the importance of Rowntree to all those towns in which it has a manufacturing base. It is not for me to anticipate what the rival management will say about their intentions. However, I do not believe that anybody is seeking to acquire that company with a view to running down or abandoning its manufacturing capacity in this country. It is essentially up to the management—whoever owns it—to ensure that the company is kept cost-competitive and to decide how it manufactures and where it employs in future.

Nestlé has been well-established in this country for over 100 years. The bulk of its work forceé10,000 people, which is more than the company employs in Switzerland—is based in the regions of this country.

We considered the question of reciprocity, because it can be an element in such cases. However, the fact is that a Swiss Minister would not have the legal powers that my right hon. and noble Friend has to intervene to refer or block a merger, using the powers to which the hon. Member for Dagenham (Mr. Gould) referred. Many Swiss companies have a share structure which makes it difficult for them to be taken over, as have many well-known British companies, such as Trusthouse Forte plc and Great Universal Stores plc. In the opinion of the Director General of Fair Trading, with which I wholly agree, reciprocity was not an adequate issue in this case.

It is right that the matter should now be decided by the shareholders. Our approach to inward and outward investment is in the best interests of the continued growth of the British economy.

Mr. Conal Gregory (York)

Is my right hon. and learned Friend not opening a Pandora's box by his statement today? Having heard his statement, I feel that he is bringing about a regional assassination of a major manufacturing base in the north of England.

After today's decision, what protection does any United Kingdom company have against cash-rich Swiss companies which have protection against rival takeovers in Switzerland? Can my right hon. and learned Friend name one United Kingdom company that has succeeded in a hostile bid in Switzerland; nay, can he name any EEC company that has succeeded in a hostile bid in Switzerland?

Finally, did he take into account the employment aspects of this matter as Rowntree plc is one of only six remaining companies that have their international headquarters in the north of England? The House demands answers.

Mr. Clarke

I understand the concern in my hon. Friend's constituency. However, he is wrong to look upon this, as he puts it, as a threat to the manufacturing base. We are talking about the ownership of a major manufacturer of chocolates, especially for the British market. I cannot understand how anybody would make a bid for that company and then propose to close it down as a manufacturer of chocolates in this country. That would be a pointless acquisition.

Investment goes two ways. I take a great interest in the northern economy. I do not think that the northern economy would benefit any more than the midlands or the southern economies would if we suddenly tried to close off our companies from overseas capital investment, or if we tried to inhibit the ability of British companies to buy overseas. The proportion of our manufacturing base owned by foreign enterprises has been falling during the Government's period of office. In 1985, 14 per cent. of manufacturing employment was accounted for by foreign enterprises compared with 15 per cent. in 1979.

There have been takeovers in Switzerland. Piaget, the famous maker of Swiss watches, was recently acquired by Cartier. Opposition Members will say "Oh, Cartier is a foreign name—the company must be foreign," but it is a British-owned company. United Kingdom investors are the main overseas predators and make bids for overseas companies which far exceed the bids made by the Germans, the French or others. That is a good thing. That practice will increase as we run up to 1992. I welcome the fact that United Kingdom companies make bids in western Europe, such as Rowntree when it acquired Candice Martial last year, and Cadbury Schweppes when it acquired Chocolat Poulain in France. These companies have been overseas investors and they benefit from the free market system.

Mr. Malcolm Bruce (Gordon)

Does the Minister agree that it is unacceptable that the Swiss should be able to sit behind the barricade of the Alps and pick off our ripe cherries? Does he accept that his statement means that the Government have no credible competition policy, no credible anti-monopoly policy and no effective or robust regional policy? Is it reasonable that the shareholders of the company should be expected to protect the interests of jobs and a corporate headquarters in the north? Is it not likely that the shareholders, as shareholders generally always do, will take the money and run? How will the Government respond if Rowntree goes for a merger with Cadbury as a logical defence of the company?

Mr. Clarke

I express amazement that someone who represents the Liberal party in this place, or what was the Liberal party, which always claimed to be the great European party, should retreat into arguments about the Swiss sitting behind the Alps. That is rather reminiscent of the talk in the past about Swiss gnomes. I am astonished also that someone representing what was the Liberal party should attack the idea of shareholders exercising any judgment on the best use of capital and the ownership of companies. If the newly emerged party, whose initials I can still never remember, is to try to reach agreements on policy, it will have to reconsider its approach to international market economies, competition-merger policy and the private sector economy.

If any other company starts bidding for another chocolate company, whether the bids come from home or abroad, we shall take the advice of the Director General of Fair Trading, who will apply the sensible legal rules that the House has laid down, along with the sensible monopolies and mergers policy that we set up recently in our Blue Paper.

Sir Giles Shaw (Pudsey)

Will my right hon. and learned Friend accept that I deplore the decision that has been made today? Will he accept also that I am astounded that it is not considered by the Secretary of State for Trade and Industry that there are any public issues involved in it that require examination? Will he confirm, for example, that the Minister of Agriculture, Fisheries and Food is concerned about how much of the confectionery industry is taken into foreign ownership? What percentage would cause a national issue to arise? What do my right hon. Friends the Secretaries of State for the Environment and for Education and Science have to say about the commitment to the Community in the light of an operation of the Rowntree type? What does the Department of Industry have to say about the further reduction in the six corporate headquarters that exist in the north of England? What does the Department of Trade have to say when about the only gain that the Government have achieved is a reputation for offering the maximum amount of encouragement to foreign capital to come here unfettered so that it is a matter of all manufacturing assets to be sold and gazumpers welcomed by 1992?

Mr. Clarke

My right hon. and noble Friend the Secretary of State had many serious issues to consider, including, overridingly, the national interest. That is one of the issues that we are rightly covering in these exchanges—whether it is in the national interest to have a reasonably free exchange of investment and capital movement across the world, given that the British are now the major overseas investors. We considered the reciprocity arguments and found, both in Britain and Switzerland, that some companies are so structured that it is difficult to make a reverse takeover bid. There are many who argue that it would not be to the advantage of an economy to have too many companies that are protected in that way. We considered the effects on market share, competition and the consumer, for example. All these issues have been considered in a reasoned way. There is no public interest and no established policy reason for the Government to intervene and say that the issue should not be decided by the shareholders.

I appreciate the experience and the close local concern of my hon. Friend the Member for Pudsey (Sir G. Shaw) in these matters, but we should not abandon the Government's legal, policy, economic and industrial bases and start acting in a short-term populist way in response to lobbies, managements which fear takeovers, or probably unfounded fears about the impact on particular firms.

Mr. George Foulkes (Carrick, Cumnock and Doon Valley)

Does the Minister realise that those of my constituents who are employed at the Girvan factory of Rowntree will be deeply disappointed that he is adopting a Pontius Pilate role, which suggests that he is acting under the influence of his unelected boss?

Is he aware that the Girvan travel-to-work area has the third highest level of unemployment in the country? What guarantee can he offer the people in the Rowntree factory in Girvan that their jobs will be protected?

Mr. Clarke

If anyone is taking any Roman attitudes in all this it is the British investor who, with the encouragement of the British Government, is building up an empire of overseas holdings throughout the world, as British investors move into America and Europe. The average American business man wears a Brooke's Brothers suit, but is not usually worried that that company is British-owned. If one wishes to stay in a Hilton hotel outside America, one finds that one is staying in a British-owned hotel. If, on the other hand, one buys a bottle of good British Ashbourne mineral water, one finds that it is produced by Nestlé in its factory in Derbyshire.

It is absurd to adopt this nationalist approach to policy, and it will become ever more so by 1992. Even the nationality of companies is a matter of argument. We talk about these companies being national companies because their headquarters are in a given place, but the nationality of the shareholders is becoming more international all the time. In our competition policy we have to consider consumers' interests and the impact on the economy as a whole, and that is what we shall do.

I am sure that both competing bidders will make their statements about what the future holds for jobs, manufacturing, cost-effectiveness and any rationalisations that they may undertake. Those are matters for management. They never would be matters for the Government, whether the company remains wholly Rowntree-owned or whether it is taken over by Nestlé, Suchard or anyone else.

Mr. Michael Grylls (Surrey, North-West)

Does my right hon. and learned Friend agree that as there are only six firms in the EEC controlling 70 per cent. of the EEC confectionery market there is a prima facie case, on European competition grounds, for blocking this bid, which would reduce their numbers from six to five? Does that not show that there is an urgent need to accept and adopt the EEC merger directive?

Are we not sending a dangerous signal to British industry? If, in preparation for 1992, British firms invest in improving their R and D, their marketing and their general organisation, and their profits drop in the short-term, and if the British Government will not stand by them if they are attacked by predatory bids just at that moment, is that not dangerous?

Mr. Clarke

We do not know whether the bid will be successful. That is not a matter for me or my right hon. and noble Friend. It depends on what happens and on the decision of the shareholders. If it is right that the emergence of 1992 will lead to a concentration of ownership, we have to make sure that the European consumer and the European economy are protected against the problems of monopoly and merger. We are in discussion with the Commission about the future role of European competition policy, on which we have an open mind. We are, however, anxious to ensure that any European-wide agreement should be based broadly on our principles of free investment, not taking nationalist decisions, and acting in the best economic interests of the economy and consumers. We would not want Europe to adopt anything that stopped British investors maintaining the substantial level of acquisitions in western Europe upon which they are now embarked.

Mr. John Garrett (Norwich, South)

Is the Minister aware that his answer will cause some concern among the thousand Rowntree workers in my constituency, who happen to work on a prime city centre site? Would not a reference to the MMC be the only way of obtaining an objective study of the national interest in these matters? Has not the right hon. and learned Gentleman given the green light to protected European predators to take over any British company that they happen to fancy?

Mr. Clarke

Anyone who wants to acquire a company has to persuade the shareholders that he is making the right price offer for it or has the prospect of developing that company and improving its performance. We must judge bids, from wherever they come, thus: if the Government decide to intervene and stop the shareholders deciding, they must do that on the basis of the national interest, the consumers' interest and the various other things that we have been discussing. The Director General of Fair Trading and my right hon. and noble Friend have carefully considered those aspects and have decided that they are not affected in this case.

At the moment, British investors go overseas much more than others. It is to the advantage of other countries if they open up their markets o overseas investment—they get capital inflows as a result. British predators are more feared than any others across most of western Europe, and long may that remain so.

Mr. Anthony Beaumont-Dark (Birmingham. Selly Oak)

Does my right hon. and learned Friend accept that all of us realise that British companies are taking over overseas companies, just as British companies are being taken over, and that that is a good thing? Is not the problem that the Government's monopolies and mergers policy has become a shambles and needs to be re-thought? Cadbury and Rowntree would fit ideally together, not just because of their enterprise, but because of their backgrounds, and make an excellent merger. However, because of the monopolies and mergers policy such a suggestion would be flung into the arms of the MMC, so they are hamstrung. If we are to have free competition, let us have free competition, and not stop British firms from doing what is good for Britain.

Mr. Clarke

Our monopolies and mergers policy is crystal clear and has been applied wholly logically in this case. I take my hat off to the management, which, faced with a bidder that happens to be an overseas company, has run an extremely good campaign, implying that this is some sort of overseas threat to British sovereignty, and has tried to get the Government to intervene to decide the matter in its favour.

I bear no to the Rowntree management or to anybody else. I am wholly neutral on the merits of the issue. It is up to Rowntree to persuade its shareholders that their best interests and those of the company lie with the present management. The overall effect of continuing to apply the rules that I have described to any major bid proposal will be that we look after the interests of the United Kingdom economy and the consumer. We shall continue to apply those rules consistently.

We shall cross the bridge of a merger between Cadbury and Rowntree when we reach it. We shall consider that on the basis of the likely effects on the market and the consumer. One must consider the market in these products and the effect of any merger by two manufacturers.

Mr. Doug Henderson (Newcastle upon Tyne, North)

Will the Minister own up to the fact that in reality he is handing over the future of 13,000 jobs in the north-east of England to 30 banks and insurance companies in the City of London? Does that not demonstrate the need to change merger legislation and to give workers and managers, the people who make the companies succeed, a direct say?

Mr. Clarke

If I were being fair to the Opposition, I would at least credit them with consistency. With the greatest respect to my hon. Friends, the Opposition are more consistent in these matters. Most Labour Members dislike the idea of British capital being invested overseas and, like the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), try to devise a complicated arrangement for most of the capital. Most Labour Members are against any merger, and I am sure that the hon. Gentleman would oppose any takeover, whether the bidder was British or foreign. This Fortress England mentality to the economy is an extremely unsuccessful approach to modern trading conditions. The success of the British economy in the past eight years shows that the Labour party's approach is fundamentally wrong and not even in the interests of those employed in our major companies.

Mr. Michael Alison (Selby)

Does my right hon. and learned Friend recall that in his statement today the Secretary of State expressed doubts about whether the Swiss system of restrictive shareholding barriers suited their system well and said that they appear to be on the point of liberalising it? As that liberalisation would be very much in the interests of British firms seeking to invest in Switzerland, was it not an error of judgment not to penalise the Swiss in this instance and encourage liberalisation by imposing the necessary restrictions on reciprocal grounds on the investments which Nestlé is trying to make in Rowntree?

Mr. Clarke

When we last had an exchange on this subject I said that I was not a Swiss legislator, so I could not give views on Swiss law. So far as I can discover, the law does not arise, and no Minister in Switzerland is given the powers of my right hon. and noble Friend the Secretary of State to intervene. If I were a member of the Swiss stock exchange, it is likely that I would disapprove of the capital structure of many Swiss companies, but I am not. Moreover, I understand that there are pressures to change that.

I have already cited companies in the United Kingdom, one of which is the National Freight Corporation, in whose creation I was in a minor way involved, which have a structure which protects them from takeover bids. The British stock exchange does not approve of that so much, but no one has yet suggested that the Government should intervene to stop companies setting up that particular share structure, and I do not think that we can.

Given that background, I do not believe that any substantial issue arises in this case to suggest that we should suddenly impose a total ban on all Swiss bids for British companies until the Swiss change their corporate structure. We would be depriving ourselves of a valuable influx of overseas capital; as valuable as the influx of capital from the Americans, the Japanese and elsewhere.

Mr. Bruce Millan (Glasgow, Govan)

The Minister keeps talking about shareholders, but is it not against all experience to expect shareholders to protect the national interest, as against protecting their own interests? In this case the management and work force of Rowntree and the local communities are all utterly opposed to the takeover. Does that count for absolutely nothing with the Government?

Mr. Clarke

It is contrary to all experience to believe that an industrial strategy, as managed by Labour Ministers, is in the interests of employees, compared with the decisions of shareholders in the free market economy that we are now operating. The strong growth of the British economy over the past eight years is the best illustration of that. We are now the fastest expanding economy in Europe, which is why we are aggressive investors overseas and why we are attracting so much inward investment. Recent experience shows that that is in our economic interests.

The proportion of manufacturing in this country owned by foreign companies has been dropping, if considered in employment terms, in recent years because, although there has been a great deal of inward investment, the amount of domestic investment has also been rising very rapidly. There is therefore no risk of our losing our sovereignty and of all companies becoming foreign owned. As our recent economic experience proves, the climate is at present much more favourable to growth, enterprise, new employment and continued expansion of the British economy.

Mr. Quentin Davies (Stamford and Spalding)

Notwithstanding my right hon. and learned Friend's remarks about the application of the principle of reciprocity to Nestlé, will he take time to consider the range of alternative shareholding structures in Europe and the different mechanisms for issuing non-voting shares and restricting voting rights on ordinary shares in particular circumstances, which exist to a certain extent here but are particularly prevalent in Holland and Germany? Will he consider carefully whether he believes that those systems are necessarily in the public interest or, indeed, in the European interest after 1992?

Mr. Clarke

I shall take the time to consider those points, and I shall probably take the time to consider my hon. Friend's advice as he has considerable expertise in these matters. There is a great variety of shareholding structures in western Europe, and it is more difficult to acquire companies in some countries than in others. I have already said to my right hon. Friend the Member for Selby (Mr. Alison) that I am not sure whether it is in the interests of the countries that have restrictive shareholding structures to keep them as they are. When we consider these issues on a European-wide level, as no doubt we eventually will when we have a common statute for corporate organisation covering the European Community, I am not sure that we should imitate the more closed systems. The more open system in Britain is undoubtedly preferable.

Mr. Greville Janner (Leicester, West)

The Minister said that no employment issues were involved. Does he know that the workers at the Fox's Glacier Mints factory in my constitutency take a totally different view, that they get on extremely well with the management, and that they have confidence in the company and none whatever in the takeover mechanism, which brings them only anxiety? What guarantee, if any, can the Government give to those employed by Fox's Glacier Mints that they will have any future if the company is taken over?

Mr. Clarke

I understand people's anxiety about employment whenever any major change affects the company for which they work. The only people who can make statements about the future pattern of employment are the management of a company. I do not know what statements Rowntree has been making to the employees of Fox's Glacier Mints in recent years, and I do not know what it will be proposing. However, I know that when Ministers regarded it as their obligation to make statements about employment issues the British economy was performing very badly. As we now acknowledge that management should be given the right to manage its own business, and that the market makes pretty good judgments about the best use of capital, we find that the economy is doing very much better. That means that jobs are being created in Britain at a much faster rate than in the rest of Europe put together.

Mr. John Townend (Bridlington)

Will my right hon. and learned Friend accept that the decision will be met with real regret in my constituency in east Yorkshire? Is he aware that we are worried, not just about the number of jobs in the north, but about the quality of jobs? When firms are taken over and the head office moves to London, or in this case perhaps Geneva, the international market in jobs is affected. Jobs in R and D and in top management will go. Will my right hon. and learned Friend accept that one of the main culprits in this case is the Rowntree Trust, which was given 50 per cent. of the shares of the company by the Rowntree family, but has progressively sold its holding and now owns only 5 per cent.?

Mr. Clarke

I shall not comment on what the Rowntree Trust has been spending some of that money which has not always pleased Conservative Members. I shall leave that on one side.

I am pleased to say that the Yorkshire and Humberside economy is doing very well at the moment, with unemployment falling and the regional economy reviving strongly. We must do everything to encourage that. I understand the sensitivities when one of the great names in a region is involved in a takeover bid. That has occurred before, and it will occur again. I am sure that, on reflection, my hon. Friend will be aware that all that Ministers can, and will, do is to apply the national policies for which we answer to the House. We must apply the law laid clown by the House and stick by the principles that we set out in the Blue Paper on monopolies and mergers. We believe that that is essentially in the interests of the Yorkshire and Humberside economy and the national economy. I do not believe that the northern or Yorkshire economies can be protected by introducing special rules to stop the free movement of capital into that area while such capital is moving strongly into the rest of the country.

Mr. Geoffrey Lofthouse (Pontefract and Castleford)

Before taking the decision not to refer the matter to the Monopolies and Mergers Commission, was the Minister aware of the strong feelings of hon. Members on both sides of the House, Cadbury, the Rowntree work force and the Confederation of British Industry? He has said that the employment consequences are not his concern. They should be his concern. He should be concerned for the 13,000 people in Rowntree, including the 600 in my constituency, who are worried sick. My constituency has just lost 10,000 jobs because of the rapid rundown of the mining industry. Rowntree is a major employer, and there is no guarantee for the work force that they will keep their jobs. Should the Minister not be concerned?

Mr. Clarke

I did not say that I was not concerned. I said that I do not determine the employment patterns of British companies. It is not for Ministers to decide that. We create the economic climate in which companies are best placed to expand, prosper and increase the amount of employment that they offer. If Rowntree had remained untouched by any offer, I would not have answered questions about how many would be employed at a particular factory. I do not approve of an economic system in which Ministers claim that they determine that. At the moment I do not believe that anyone is threatening the continued manufacture of Rowntree or Cadbury chocolates in this country. We are arguing about the ownership of the capital and whether that should be left to the shareholders to determine in the usual way.

Mr. Robert Banks (Harrogate)

Does my right hon and learned Friend recognise that the decision will be met with deep disappointment by many people in Yorkshire, who will be worried that the bare threat of takeover facing this great Yorkshire company will proceed? Does he agree that this is a lost opportunity for bringing pressure to bear on the Swiss Government and Swiss companies to bring their company structures into line with those in the majority of companies in this country? Will he review the criteria for the terms of reference for referral to the Monopolies and Mergers Commission?

Mr. Clarke

I understand the deep concern felt by all my hon. Friends who represent Yorkshire constituencies, and most of them have now been called to express those concerns. We all have local loyalties, and my judgment of issues is often quite properly coloured by my perception of local issues. Normally, most of my hon. Friends who have spoken agree with me on economic and industrial policy. I have a feeling that if we were talking about a great Nottinghamshire company several of my hon. Friends who speak for Yorkshire would not have thought there was anything wrong with our refusal to refer a bid to the Monopolies and Mergers Commission.

Mr. Pat Wall (Bradford, North)

Will the Minister reconsider the interests of the Rowntree employees, because their labour has created the wealth over which the predators are now squabbling? Have they not the right to a ballot to defend their jobs., particularly as they cannot go to the courts against this intimidation and the likely secondary picketing by Suchard, General Cinema and Cadbury?

Mr. Clarke

The fact that many people want to own a company is not altogether bad news for those who work in it. I understand that many employees feel unsettled when they discover that someone is competing for the ownership of the company. I believe that the reason why people are trying to buy companies is that they see Britain as an attractive place in which to invest and to use as a manufacturing base for the European market that we are putting together for 1992. I understand all the fears, but I do not believe that there is anything special in this case which justifies referral to the Monopolies and Mergers Commission.

Mr. John Maples (Lewisham, West)

I want to change the tone a little by telling my right hon. and learned Friend just how welcome his decision is, particularly in view of all the chauvinistic whingeing that we have heard from people who until a few weeks ago had no idea that Nestlé was not a British company. Does my right hon. and learned Friend agree that Britain and British companies have benefited enormously from their freedom to invest abroad and that we are the last country that should erect artificial barriers to international investment?

Mr. Clarke

I am not sure whether my hon. Friend is referring to English or Yorkshire nationalism, but I am grateful for his support. I agree that the average consumer and the average employee did not feel so strongly about the nationality of the shareholders until this issue arose. It will be interesting to see in the Tea Room how many people boycott Branston pickle, Ashbourne water and all the goods made by Nestlé, most of which are made in the north of England and Scotland.

Mr. Tom Clarke (Monklands, West)

Is the Minister aware that when I visit the Rowntree company in my constituency tomorrow I shall expect anything but a welcome for this afternoon's statement? He suggests that decisions on jobs in my constituency and elsewhere should be left to the shareholders and the two competitors. Will he accept that that will cut very little ice in an area where we were given precisely the same arguments over the Guinness takeover, when those pledges mattered not at all? How many more jobs does he expect us to lose in the pursuit of the philosophy that he appears to endorse?

Mr. Clarke

I do not know the basis on which so many people are asserting that the change of ownership in itself is likely to lead to a reduction in jobs. The number of jobs involved in the manufacturing of chocolate in this country will presumably be determined by the management—under whatever ownership—deciding how to win a share of the United Kingdom and European chocolate market. When the hon. Gentleman visits his constituency tomorrow no doubt he will put forward alternative propositions about what should happen. The Labour party finance and industry group said that merger policy should give prime attention to the wider economic aims of a Labour Government. I know which I would put most trust in. A merger policy simply based on the economic aims of the previous Labour Government would offer little reassurance for jobs or anything else to the hon. Gentleman's constituents or to those of anyone else.

Sir Hector Monro (Dumfries)

I appreciate the constituency interests of my hon. Friends. Will my right hon. and learned Friend give them some encouragement by accepting from me that Nestlé took over one of the largest factories in my constituency a year or two ago, since when everything has gone from strength to strength for investment and employment? The future might be much brighter than my hon. Friends expect.

Mr. Clarke

I am grateful to my hon. Friend. Had we approached these matters differently we would have blocked hundreds of takeovers by foreign companies during the last two or three years which have led to the same reassuring satisfactory consequences for firms as those described by my hon. Friend.

Several Hon. Members


Mr. Speaker

Order. I hope that I have managed to call all those hon. Members with a direct interest in this matter. There will be other opportunities on the Adjournment motion later.