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Stock Exchange

Volume 167: debated on Wednesday 14 February 1990

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4.

To ask the Secretary of State for Trade and Industry when he next plans to meet the chairman of the stock exchange; and what will be discussed.

Ministers meet the chairman of the stock exchange whenever appropriate to discuss topics of mutual interest.

Will the Secretary of State discuss junk bonds with the chairman? The Parliamentary Under-Secretary of State for Corporate Affairs said last November that junkiness was in the eye of the beholder, but does not the Secretary of State know that the chairman of the Monopolies and Mergers Commission has expressed concern about the matter and hinted in the clearest possible terms that he would like it to be referred to him for investigation? Will the Secretary of State agree to such an investigation? If he does not, the public will begin to think that the Government are prepared to condone, if not encourage, the sort of tacky behaviour that we see on the other side of the Atlantic.

No, Sir. I do not believe that issues of corporate financing are ones for the Monopolies and Mergers Commission. They may be for the stock exchange, or even the Bank of England, to consider, but not the MMC. Only if there were a merger involving a highly leveraged bid, together with other factors that affected the national interest, would my policy be to refer the matter to the MMC. I agree with my hon. Friend the Minister that junkiness is in the eye of the beholder.

When my right hon. Friend meets the chairman of the stock exchange, will he urge him to make faster progress towards the so-called paperless transactions for share dealings as it is clear that the interests of the small investor would be greatly assisted if progress were more rapid?

The stock exchange is making pretty fast progress with the Taurus system. When we see the full details, we shall ensure that it contains no conditions that will interfere with the interests of the smaller investor. I agree with my hon. Friend that the sooner we get the system up and running, the better.