GKN

Bim Afolami Excerpts

Tuesday 24th April 2018 Commons Chamber

[Greg Clark]

I am grateful to the right hon. Gentleman for his question, because I wrote and said that deliberately. I regard this company, operating in the sector that it does, as having an important long-term role. One of the reasons that there was a vigorous contest for this business was the recognition that there are immense opportunities involved. It is my purpose as Business Secretary to ensure that we reap those opportunities. That is why I requested what was in effect a change to the previous commitments that this company or any other had made, and I was able to do that on the aerospace side. As I said in response to the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), it was clearly not possible to extract another commitment on the automotive business, given that the incumbent management had committed to selling it forthwith. In the spirit of what the right hon. Gentleman has said, I think that he will reflect on what has been obtained for the first time in the UK takeover—namely, a commitment to a much longer-term perspective than had been the case, including the right for the British Government to approve any subsequent purchaser of defence assets—and agree that that is a significant step forward.

[Bim Afolami (Hitchin and Harpenden) (Con)]

I draw the House’s attention to the fact that, in the dark days before I came to this House, I spent several years in the City advising on mergers and acquisitions, and Melrose was one of the companies that I advised several times. Bearing that in mind, while there is of course a narrow range of scenarios in which the Government can intervene on a quasi-judicial basis, as the Secretary of State has already set out, will he confirm whether the Government will always ensure that we have an open globalised economy based on competition, not one in which politicians will capriciously intervene, which would be the approach of the Labour party?

[Greg Clark]

That is the right approach. The UK’s reputation for being a dependable place to invest and do business is based on clear rules and principles, and we have benefited from that. We make significant investments in the UK economy, we make significant investments in overseas companies, and we hold big assets. That is important to us, and we should be a trading nation, which means that we should be open to investment as we invest in other countries. That is the heart of our approach. However, it is important to keep the regime under review, and where there are long-term interests, such as in research and development, it is right that we have introduced an ability during a takeover bid to extract indications of how a bidder would approach things. That is what we have done in this case.