EU Merger Control

Debate between Kelvin Hopkins and Nick Boles

Tuesday 3rd November 2015 General Committees

[Nick Boles]

That was a long question, and I am happy to give a short answer: yes, I can give my hon. Friend that assurance.

[Kelvin Hopkins]

I am pleased that the Government seem to be resisting more powers being transferred from our national Parliament to the EU. I think that the Minister made the point that many mergers relate to companies that are not based in the rest of the European Union. It is appropriate that they should be managed at national level, rather than EU level. Does he agree?

[Nick Boles]

Absolutely. Full-blown mergers—acquisitions of the control of other businesses—have to pass clear criteria on turnover both within the EU and within the respective countries to be reviewed at European level rather than the national level. The criteria are reasonably complicated. My hon. Friend will be more familiar with them than probably any of us. I think that they are set at roughly the right level. As a result, the overwhelming majority of mergers and acquisitions that take place are reviewed by our excellent Competition and Markets Authority, which has a very high reputation. It is absolutely appropriate that only a very small number of mergers and acquisitions are reviewed at European level.

[Kelvin Hopkins]

I think that the European Scrutiny Committee, in general and broad terms, would agree with the Government on this. The principle of subsidiarity is much talked about in European Union circles, but the EU seems reluctant actually to indulge in it much. Would the Minister not suggest that the EU should recognise that some things should be dealt with at national level to make subsidiarity more meaningful?

[Nick Boles]

I cannot pretend that everything involved in preparation for the Committee was absolutely gripping, but nevertheless I found myself intrigued by a debate on the vexed question of subsidiarity between, in particular, the noble Lord Boswell and my predecessor and then me—in reality, the officials who drafted my reply. I had the layman’s understanding of subsidiarity, which is shared, I suspect, by most of us and by most of our constituents: “Don’t do it at European level unless you need to; do it at national, regional or local level.” However, I understand from the correspondence that, within a legal framework, the principle of subsidiarity at European level is applied only in certain areas, where it is acknowledged in treaties that the EU does not have sole competence—only then does something become a question of subsidiarity.

To the extent that this power is necessary for the EU to make the internal market function, questions of subsidiarity would apparently not be raised under the legal framework. That is why we have emphasised proportionality. It would be disproportionate for the EU to start interfering in a small number of cases that rarely have a European-wide impact. In a sense, I rest with the layman’s view of subsidiarity as useful—in general, the EU should not interfere unless necessary, and unless doing so will dramatically add value to individual nation states and their citizens—but in this case we are clear that it would not be necessary or proportionate for the EU to do so.

[Kelvin Hopkins]

I have one more question. Is it not right to be extremely wary of any kind of merger? Mergers inevitably lead to more monopolistic powers for companies to exploit markets. If we are serious about competition, we should maintain a sufficient number of competing companies in any industry.

[Nick Boles]

We are probably straying slightly from the subject. In general, I have agreed with everything that the hon. Gentleman has said, but I suspect that there will be a slight note of difference here. There are many fragmented industries in which the merger of two participants would in no way undermine the consumer’s power and might even enable them to become more efficient and productive, thereby lowering costs to the benefit of the consumer. I completely agree with the hon. Gentleman, however, that in cases of relatively concentrated industries—we can all think of many, and they are often where mergers are most frequently proposed—it is important to have a robust regime. I am glad to say that we have such a regime in this country. We should therefore allow most decisions about mergers in the UK to take place under the jurisdiction of the UK authorities.

Oral Answers to Questions

Debate between Kelvin Hopkins and Nick Boles

Monday 26th October 2015 Commons Chamber

[Nick Boles]

I entirely understand those arguments and have some sympathy with them, but I would point out to my hon. Friend that sixth-form colleges, like further education colleges, also have the freedom to borrow, which many of them have taken advantage of. That is not a freedom that is available to other schools, so there are swings and roundabouts.

[Kelvin Hopkins (Luton North) (Lab)]

Sixth-form colleges are arguably the most successful education institutions in our system, in terms of educational achievement and financial efficiency, so would it not be sensible for the Government to encourage the creation of more sixth-form colleges, rather than punishing them for their success?

[Nick Boles]

I certainly agree with the hon. Gentleman that there are remarkable sixth-form colleges achieving extraordinary things, and I want to support them as best we can. As he knows, one option we are keen to explore is whether some sixth-form colleges might want to link up with groups of schools and multi-academy trusts in order to be stronger themselves and to provide more of their great education to more people.

Oral Answers to Questions

Debate between Kelvin Hopkins and Nick Boles

Monday 20th July 2015 Commons Chamber

[Kelvin Hopkins (Luton North) (Lab)]

On every educational and efficiency measure, sixth-form colleges outperform all other sixth-form providers. When will the Government treat sixth-form colleges fairly in taxation terms and take steps to establish many more sixth-form colleges throughout the country?

[The Minister for Skills (Nick Boles)]

rose—