Proposed Merger of Three UK and Vodafone

Mick Whitley Excerpts

Tuesday 19th September 2023 Westminster Hall

[Mick Whitley (Birkenhead) (Lab)]

It is a pleasure, Sir George, to serve under your chairmanship. I congratulate my hon. Friend the Member for Stockport (Navendu Mishra) on securing this important debate. I also draw attention to my entry in the Register of Members’ Financial Interests regarding my membership of Unite the union.

Speaking more than a century ago, Theodore Roosevelt called for congressional action to curb the power and influence of trusts, remarking that

“the state not only has the right to control the great corporations, but is duty bound to control them whenever the need of such control is shown”.

The world has changed beyond recognition since Roosevelt launched his crusade to bust the trusts, but his message—that Governments have a democratic duty to protect their citizens from the aspirations of big businesses to become all-powerful monopolies—is as true now as it was then.

Around the globe, we are witnessing huge corporations’ increasingly aggressive merger and acquisition strategies. It is incumbent upon us to ensure that the interests of our constituents are not trampled over by corporate greed. Should the Three-Vodafone merger succeed, it would create the largest operator in the telecommunications market, with 27 million customers and a 35% market share. It would also reduce the number of mobile network operators in the UK market from four to three.

According to one study, which drew on data from 33 countries over 13 years, 43 telecoms mergers of this kind increased prices by an average of 16.3% per customer. For the average UK customer, that could mean a price hike of between £180 and £300 a year, which is an unaffordable sum for many of the 2.2 million households across the UK that already struggle to meet the costs of mobile services. With more than one in five people in the UK able to access the internet only through their smartphone, this merger also threatens to plunge even more people in Britain into digital poverty, at a time when we need to do more to narrow the digital divide.

As we have heard, this merger raises a number of issues for our national security, for our consumer rights and for the futures of thousands of workers who are currently employed by Three and Vodafone. As elected representatives, it is our responsibility to ensure that the proposed deal is subject to robust democratic scrutiny. However, that has become a near-impossible task, because Parliament has been almost totally excised from the scrutiny process. In fact, today’s debate is one of the few opportunities for Members to have a meaningful discussion about the proposed merger. Instead, the responsibility for ruling on whether the merger should proceed has been delegated to the investment security unit, under the direct oversight of the Cabinet Office, and ultimately the Prime Minister himself.

The Intelligence Security Committee has been scathing in its assessment of the process, stating that

“the Government does not want there to be any meaningful scrutiny of sensitive investment deals. Effective Parliamentary oversight is not some kind of ‘optional extra’—it is a vital safeguard in any functioning Parliamentary democracy.”

I hope the Minister will be able to say on what grounds the Government can justify excluding Members from being involved in scrutinising a proposal that has such enormous ramifications for the telecommunications sector.

This merger is a naked attempt to monopolise the telecommunications sector and strangle the opposition, leaving customers with no recourse when prices are inevitably hiked. There is only one right response. The Government should take the lead of the Competition and Markets Authority—which in August confirmed its original decision to block Microsoft’s acquisition of Activision—and kill this deal.