Lord German
Main Page: Lord German (Liberal Democrat - Life peer)
Lord German (LD)
My Lords, with the leave of the Committee I will speak in the gap about two specific issues related to private sector pensions, both of which are fairly current and have raised their heads in the last few days. The first relates of course to the GKN/Melrose acquisition battle. I call it a battle because it looks, sounds and feels like one. The issue of those who work for, or have retired from, GKN is a live one. Just two days ago the chair of the Business, Energy and Industrial Strategy Committee in the other place wrote to the chief executive at Melrose Industries following the committee’s meeting with them, in which she set out a requirement to inform the committee of Melrose’s plans for applying for clearance from the regulator prior to acquiring the company. That was a result of the company itself having come under scrutiny from the Pensions Regulator, which asked whether it would apply for the voluntary clearance that is all that happens under the current powers of the regulator. The question that arises—given that this is about a principle, not just that specific matter—is, when will the Government be bringing forward the promises they made in their manifesto? To quote the Financial Times, the,
“party pledged to boost the Pension Regulator’s powers so it could veto deals which could harm pension scheme members”.
That is the question that arises in principle about mergers and acquisitions for the future.
The second point is very much about mergers and acquisitions in the Brexit context. Your Lordships may know that the European Union Committee produced a report last month, Brexit: Competition and State Aid. I am a member of the internal market sub-committee. In evidence we heard about the importance of European Commission Regulation 1/2003—that means that it was the first regulation undertaken in 2003—in which the UK is able to co-operate with competition authorities, other member states and the Commission when mergers and acquisitions are being contemplated. The regulation allows co-operation on detecting anticompetitive conduct; sharing confidential information; facilitating cross-border access to evidence; avoiding dual notification of mergers; alignment of national leniency programmes; and mutual recognition of enforcement remedies and court rulings. The committee was further told in evidence that,
“without these information flows, ‘the quality of UK enforcement would very likely deteriorate’, and that information-gathering and monitoring activities would place a significant additional burden on … sector regulators”.
As we know, many acquisitions and mergers do not wholly relate just to companies inside the UK, but also within the European Union. The issue is whether the Government are minded—and how they are minded—to put the free flow of information for regulators very much on the agenda in the negotiations that are taking place, so that whenever there is a potential threat to pension scheme members there is protection and information available in the way that it is now.