International Investment — House of Commons, 2017-10-17
Topic: Mixed Topics
Rebecca Long-Bailey (Labour, Centre-left): The news that Bombardier and Airbus will be forming a partnership will be welcome to the thousands of Airbus and Bombardier staff who are employed in the United Kingdom, but can the Secretary of State confirm that he has received unequivocal assurances from Airbus and Bombardier about the security of UK jobs in the long term? The pairing of two cutting-edge product lines is very exciting for the future of aerospace manufacturing, but it should not be an excuse for the Government to diminish their efforts to ensure that the unfair tariffs imposed in the United States are dropped. Will the Secretary of State give more details about the further action that he proposes to take? For example, has he written to the European Commission Britain clearly wants to be open to investment, despite reports that the Office for National Statistics is revising its investment position downwards. However, it would be naive to allow key businesses to be at risk from people who have no interest in the long-term success of a business, its workers and its pensioners, or in the long-term interests of the British economy Today’s proposals are welcome, but I have some concerns. First, I am concerned about the delay in the presenting of the proposals. In the last year or so, we have seen mergers that have called into question the adequacy of our merger regime to defend vital economic interests: jobs, research and development, and the significance of the company involved to the supply chain, to name but a few. For instance, our biggest chip manufacturer, ARM, was sold to Japan’s SoftBank. ARM is one of the jewels in our crown, developing cutting-edge chip design and generating thousands of jobs, yet there was no guarantee that R and D—or investment, or jobs—would be protected in the long run. The best that our takeover regime could generate was post-offer undertakings by SoftBank for five years on some of those issues That is not an isolated example in the high-tech world. The UK firm Imagination Technologies was sold to Canyon Bridge just a few weeks ago, and our automobile sector has also witnessed the shortcomings of the takeover regime. PSA’s purchase of Opel and Vauxhall raised concerns about jobs and investment. Yet again, our takeover regime was unable to guarantee that those things would be protected, and this week we have heard about the risk of voluntary redundancies. My first question to the Secretary of State is this: why did it take so long, given the manifest deficiencies in the regime to which we drew his attention earlier this year My second concern relates to the inadequacy of the proposals. They seem to lower the threshold tests that must take place before the competition authorities and the Government can scrutinise a merger. However, those lower tests apply only to the dual-use and military sector, and to companies that are involved in the design of computer chips and quantum technology. But there are other high-technology sectors that are also in need of the same protections, including life sciences, and food, chemical and automobile manufacturing, to name but a few on a very long list of sectors and business areas that are systemically important to UK plc. These powers would have given no assurances to companies like Unilever, for example, who might try to resist a takeover and have been calling for better safeguards in the takeover regime overall Similarly, it is not clear how these powers would have helped in many of the cases I have mentioned where they potentially do apply. Indeed, this morning when the Secretary of State was asked whether these powers would have altered the takeover of ARM, he stated that the turnover of that firm already qualified for scrutiny so this would have made no difference So, finally, does the Secretary of State agree that his proposals, while welcome, on the thresholds in particular, fail to protect companies that still fall within them, and will he confirm what further action he proposes to take, because action is desperately needed?