GKN

Geoffrey Robinson Excerpts

Tuesday 24th April 2018 Commons Chamber

[Greg Clark]

I congratulate and applaud my hon. Friend on being active and engaging with the new management to talk about the important headquarters function in her constituency. She has indeed secured good news from the company in that respect. I understand that the divisional heads of the aerospace and automotive businesses have been reappointed by the new management. Let us bear in mind that the incumbent management’s proposal was, latterly, that the automotive business should be sold, and that it would now be in the process of being sold. Airbus is clearly an important company, and there were some comments ascribed to it, although I do not think that they have been repeated. It will be important for the new management to set out its plans, so that all suppliers can have confidence in those relationships.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

Is the Secretary of State aware that short selling has been the decisive factor in this, and that that is a matter of great concern throughout the House? Also, he has rightly been concerned about the reputation of Melrose Industries plc for taking short-term measures. It cuts, closes and sells on at a profit. That is its reputation and, as far as I am aware, that is what it has invariably done. He has therefore sought longer-term undertakings—and five years is a significant period—that will keep the plants going and ensure that the company redoubles its commitments. However, his statement contained no indication as to whom those commitments are to be made, except presumably the Takeover Panel. What powers does the panel have to impose binding sanctions or, if necessary, to take the company through a legal process that he claims in his statement will be legally binding? On these crucial issues, he seems to have made no progress at all.

[Greg Clark]

This is the first time that any such commitment has been given on the ownership of assets for a period of five years. I have been active in establishing this regime, and I think the hon. Gentleman knows that, in my engagement with manufacturing and other industries, I have considered carefully the strategic importance of continued investment and stability. In the final analysis, there was a greater commitment to stability of ownership from the bidder than there was from the incumbent management. On the question of enforceability, I will place in the Library of the House the deeds that have been entered into in favour of the UK Government by the company. Some of them are under the Takeover Panel regime. As I said to his colleague on the Labour Front Bench, the effect of this new regime is that there will be sanctions up to imprisonment for a breach of those undertakings.