GKN/Melrose Takeover: Update

Lord Higgins Excerpts

Tuesday 27th March 2018 Lords Chamber

[Lord Henley]

My Lords, I note exactly what my noble friend has said. As he said, my right honourable friend has up to four months to consider these matters, depending on the advice he receives from colleagues in the Ministry of Defence. I am also grateful to my noble friend for referring to the response from Melrose. It is not for me to say whether that is a good or bad response; I just note that, ultimately, it has to be a matter for shareholders and others. But parts of that, as I made clear—the letter is now in the public domain—will be enforceable commitments, albeit some of them for only five years, and another part will be undertakings of a less enforceable nature. It is not for me to defend or attack that letter. I have simply set it out as the response that my right honourable friend the Secretary of State received from Melrose following his letter, in which he set out, first, his legal obligations under the 2002 Act—which gave him a relatively limited power to intervene, which is quite appropriate. Secondly, however, he stressed—I am grateful to my noble friend for underlining this—the wider interests he has as Business Secretary and the wider interests that the directors have under Section 172 of the Companies Act as regards what they must look at. In the end, the shareholders will have to take a view on that matter. As I said, it is possible that my right honourable friend will have to make a decision in a quasi-judicial manner. He must await advice on that, and at that stage, if appropriate, he will intervene.

[Lord Higgins (Con)]

My Lords, I share the view that this takeover proposal is important for the UK economy. My noble friend the Minister refers to legally binding contracts. There have been cases in the past where contracts have not been fulfilled by those taking companies over. What will be the consequences if these legally binding contracts are broken? In particular, since it seems unlikely that the takeover company in this case will retain indefinitely the company it has taken over—the expectation is quite the contrary—how will the legally binding commitment be carried forward as regards any future owner of the company?

[Lord Henley]

My Lords, I would need to take advice on that. I was quoting the letter from Melrose back to my right honourable friend the Secretary of State. In that letter—in the paragraph headed, “Takeover Panel enforceable undertakings”—Melrose states:

“We have been able to agree with the Takeover Panel”—


I imagine this is a matter for it—

“the form of the following legally enforceable undertakings”.

I am not aware of how and in what way those would be legally enforceable, but that is the assertion it made.

Taylor Review of Modern Working Practices

Lord Higgins Excerpts

Tuesday 11th July 2017 Lords Chamber

[Lord Prior of Brampton]

My Lords, on the noble Lord’s general point about the underlying theme of the report, I shall quote to him from the beginning of it—these are Matthew Taylor’s words and not mine—where he says of our flexible labour market that,

“the British way is rightly seen internationally as largely successful”.

Everything that comes through this report tells us that while the system is not perfect it is actually working quite well.

The noble Lord is right that even where people are working quite a few hours under a zero-hours contract they still find it very difficult to get a mortgage because the mortgage company sees it as zero hours. That is why one recommendation of the report, and it is an eminently sensible one, is that where an individual consistently works a number of hours on a zero-hours contract, after a year they can request that it be converted to a fixed-hours contract. That is one of the report’s recommendations that we will take extremely seriously.

[Lord Higgins (Con)]

My Lords, it seems that both the noble Baroness on the Opposition Front Bench and my noble friend are under some misapprehension regarding the relationship between Uber and black taxis. It is now perfectly easy, on a free app, to summon a black taxi on one’s iPhone and there is no competitive advantage, as far as Uber is concerned, in that respect. It also emerged from the debate the other night that it is very necessary for there to be some control over the number of minicabs. At the moment, neither Transport for London nor this House nor anyone else has any control over the number of minicabs given licences.

[Lord Prior of Brampton]

My noble friend makes an interesting point which is slightly outside the remit of the report but is something that I am sure will be drawn to the attention of the mayor—I think it is the mayor’s responsibility.