GKN: Proposed Takeover by Melrose
I beg to move,
That this House has considered the proposed takeover of GKN by Melrose.
I start by saying what a pleasure it is to serve under your chairship, Mr Stringer. I think it appropriate to mention as a matter of interest that, as a trustee of the Industry and Parliament Trust, a few years ago I undertook a secondment at GKN and witnessed some of its activities throughout the world at first hand. It is also appropriate that I mention Professor David Bailey of Aston University for the work he has done on this issue, which in part informs my comments today. I know there are other speakers with specific constituency interests who want to participate in the debate, so I will try to leave plenty of time following my introduction for them to make appropriate and relevant contributions.
I sought this debate because of the strategic interest of the issue for British manufacturing, but also because of its wider implications for long-termism, investment and responsible capitalism. In a former incarnation, when I was Chair of the former Business, Innovation and Skills Committee, we held inquiries into the Kraft-Cadbury takeover and the proposed Pfizer-AstraZeneca takeover. They flushed out many of the relevant issues. They are now even more relevant and are highlighted by this proposed takeover. Although GKN may be a rather different sort of manufacturer from Kraft and Cadbury, or Pfizer and AstraZeneca, the issues are very similar.
Following the deliberations of the Select Committee on those issues and its recommendations, there was an enhancement of the takeover code, particularly in the context of post-offer undertakings, which arose from Kraft reneging on the commitments it had made to Cadbury during the course of negotiations. I am pleased to say that that issue was highlighted in the inquiry by my hon. Friend the Member for Leeds West (Rachel Reeves) on this particular takeover. I note that my hon. Friend commented this morning that Melrose, in the context of this takeover, has refused to commit itself to the sort of post-offer undertakings that would be legally binding and potentially give reassurance to GKN shareholders.
Does the hon. Gentleman agree that in many cases Melrose aims to own businesses for only between three and five years, and during that time seeks to maximise shareholder value, selling on the parts of those businesses that it sees as underperforming, sometimes without regard to the long-term benefit of the business and its individual plants? Therefore, a takeover by Melrose may mean a break-up of GKN. Does he share my concerns and those of others like me, who are fearful for the GKN plants in their constituencies? There is one in the Isle of Wight.
Order. I would remind Members that interventions should be brief.
The hon. Gentleman has put his finger on an issue that I will develop at some length during my speech. He is absolutely correct.
Perhaps I should state that, from a philosophical or ideological point of view, I am not anti-private sector. I am not anti-City. I recognise that globalisation is a potential force for good, even though it does throw up some considerable challenges and needs to be managed. I feel, however, that the role of Government must be to ensure that where vital national interests are at stake, the private sector is regulated in such a way that those interests prevail over what are often the short-term or illusory interests of the shareholders involved or the myriad City professionals and advisers that tend to make a lot of money from takeover bids. Some of the issues that arise from this proposed takeover bid are specific to GKN and Melrose, but others throw up broader, national issues.
GKN is a company of enormous strategic importance to the British economy. In 2015, it made sales of more than £16 billion worldwide and contributed £1.36 billion to our economy. It is one of the major—perhaps the major—tier 1 providers within the automotive and aerospace industries.
My hon. Friend has brought a timely debate. I have worked in defence industries. The Secretary of State has got to look at this in the context of the national interest, because the real danger is that the Americans will hive it off piece by piece. The hon. Member for Isle of Wight (Mr Seely) is right when he says that Melrose only keeps businesses for about five years, makes a profit for shareholders and is gone. This is probably one of the last bastions of Britain’s independent defence industries. More importantly, there are 6,000 jobs at stake. No doubt Melrose has its eye on the pension scheme as well—most of them do.
My hon. Friend anticipates some of the points in my speech. I agree with him completely.
GKN holds the position as one of the world’s greatest tier 1 providers in part because of the number of portfolios it holds worldwide with other joint venture companies, as well as with British companies, but also because of its research, development and technological advances, particularly in the automotive and aerospace industries. The UK aerospace sector is the largest in Europe, second globally to the USA. It supports more than 210,000 well-paid jobs in this country and delivers £29 billion in exports, generating £32 billion in turnover each year. GKN, as the only large tier 1 supplier, has a strategic role in the growth of the sector and, as I said earlier, it makes a total contribution to the UK economy of more than £1.3 billion.
GKN’s identity as a sector leader is largely based on the large amount it invests into research, development and technological advances. The distinctive focus on research has for decades been the cornerstone of the company. By its very nature, research and development involves long-term investment projects. The benefits of such programmes are often enjoyed only decades or even longer after the investment has started.
Typically, the motor industry has a product cycle of seven to 10 years, but at the moment major car manufacturers are looking for long-term partners to invest in future generations of electric vehicles. Because of its long-standing association with those companies, GKN is currently well placed to be a partner in such ventures. The aerospace sector has a product cycle of 20 to 40 years, again highlighting the importance of a company investing long term with the companies it serves. Since 2000 GKN has invested more than £561 million. That has created long-term, well-paid, highly skilled jobs that are of particular benefit to our regional as well as our national economies.
I agree with the speech the hon. Gentleman is making and his excellent points. Will he touch on the issue of the productivity gap between the south-east and the midlands? We are midlands MPs, so is he concerned about that in relation to the takeover?
Absolutely. The hon. Lady puts her finger on a very important point. Productivity in the motor and aerospace industries is way ahead in manufacturing overall, and in other types of business as well. Anything that damages such industries will damage the level of productivity in our economy, which we all know is a matter of considerable concern.
GKN not only invests in research and development in its own companies, but partners universities up and down the country—Leeds, Manchester, Warwick, Nottingham and Sheffield, for instance—again helping to underpin regional economies, driving research excellence and giving students the level of skills that they need and an involvement in manufacturing that is absolutely crucial for developing our future skills base. As the hon. Member for Isle of Wight (Mr Seely) mentioned, the Melrose business model appears to be fundamentally incompatible with that approach.
I was chided by the Melrose chief executive for calling Melrose a hedge fund company. It says it is not; it says it is a turnaround company. In the Business, Innovation and Skills Committee it was called an asset-stripping company. Whatever we call it, it has a short-term strategy reminiscent of the way in which hedge funds work. It aims to buy and sell companies within a window of between three and five years. Despite protestations that it does keep companies for the longer term, one example that must be considered is that of Brush of Loughborough, a UK company that makes gas turbines. It was taken over by Melrose 10 years ago and is failing. Melrose has been unable to sell it on in its desired turnaround window because of the huge structural change in the sector owing to the move away from fossil fuels. Melrose has failed to invest in development to mitigate the changes and save employment within the company. It has already halved its workforce and has recently announced another 270 job cuts.
Although Melrose has invested £230 million in research and development in various companies over the past five years, the significant thing is that that is less than it paid its top 20 executives in the past year alone. That does not seem to be indicative of a company that is committed and wedded to long-term investment in research and development.
Many Members will have seen the announcement from Tom Williams of Airbus. The Financial Times has today published an interview with Tom Williams, the chief executive of Airbus, which is one of GKN’s biggest customers. He said it would be “practically impossible” to give new work to the engineering group if Melrose succeeded in its hostile bid. He cited the lack of “strategic vision” and the lack of long-term investment owing to the short-term ownership model. We could not detect a more telling intervention and substantiation of the point being made. We must remember that Airbus is only one customer of GKN, but Airbus’s public statement sends a signal to many other strategic customers of GKN.
Another cause for concern is the relative size of the companies. Last year alone GKN had revenue in excess of £10 billion, compared with just over £1 billion at Melrose, which proposes to finance its bid by borrowing £3.5 billion.
In addition, GKN employs 60,000 people across 30 countries, a level of personnel management that Melrose has no comparable experience of. As part of its takeover bid, Melrose has revealed plans to sack the entire board of GKN. Melrose as a company would double in size, but with no commitments to further capacity and an absence of the management expertise that has historically been part of GKN. Furthermore, Melrose has never taken over a company that specialises in aerospace manufacturing, which is perhaps one of the most concerning issues of all.
GKN’s prominence in the aerospace sector means it has a unique stake in the maintenance of our national security. As a leading world tier 1 supplier, it operates on a lot of UK defence platforms. As its order book with the Ministry of Defence is relatively small, Melrose has claimed that that issue is not significant. It ignores the fact that many of GKN’s customers are foreign companies that provide defence equipment that is subsequently procured by this country, so there is a much greater strategic involvement than the figures quoted by Melrose suggest.
GKN’s military aerospace involvement includes Lockheed Martin, Lightning, Raptor, Boeing, Eagle, Hornet, Harrier II, Eurofighter, Typhoon, Panavia, Tornado, Saab, Gripen and the new B-21 engine—a huge range of engines and vital components in a vast range of our defence components and needs for the future. Significantly, our own Defence Secretary felt the need to raise this issue with the Department as he no doubt responds to concerns that lie within the industry. I hope the Minister will refer to that when he sums up.
The US Government are highly likely to review any takeover via their Committee on Foreign Investment. The UK has a clear interest and should do the same. The public interest test applies under the national security element of section 58 of the Enterprise Act 2002, and the UK Government have the power to consider whether the takeover is in the public interest.
Earlier, I mentioned the fact that GKN is one of the few companies that now gives Britain its independence in defence terms. It has been known for years—and if we think about it, it is a matter of the national interest—that, for example, Pratt & Whitney has always been after Rolls-Royce. That gives an indication of what is likely to happen at GKN if Melrose takes it over and asset-strips it. American companies will come in, and we will no longer have an independent role to play in manufacturing our own defence equipment.
My hon. Friend anticipates, with great foresight, some of the potential developments if the takeover were allowed to happen.
I believe that there are broader issues, however. The GKN takeover is a case that goes well beyond defence. It is relevant to our productivity, as the hon. Member for Redditch (Rachel Maclean) said, to our economy and research capabilities, and to the jobs and pensions of about 6,000 people in the UK. I am not here to argue that GKN is a perfect company and perfectly managed—that issue is widely acknowledged; but in view of the contribution that it makes to our industry as a whole, the highly paid and highly skilled jobs that it provides, its innovative research-led developments in key sectors of the economy and its commitment to maintaining a strong manufacturing industry in the UK, its future development needs to be carefully thought through, balancing the interests of shareholders with the vast number of other stakeholders involved.
Neither the takeover, nor a hastily contrived reorganisation in response to it, is the best way to deal with the problems. A solution centred on preserving shareholder value at the expense of all else would be disastrous for regions, such as the West Midlands, that depend on manufacturing, and for productivity and the economy. The far-reaching implications of the proposed bid should prompt the Secretary of State to look at widening his powers of intervention on takeovers to include broader considerations of public interest. I appreciate that it was a Labour Government who withdrew that consideration, in the Enterprise Act 2002, but since then the global nature of the world economy has changed rapidly. Welcome adjustments were made to the takeover code relating to post-offer undertakings following the Kraft-Cadbury takeover. However, it is time to re-examine the situation, and to seek a more robust set of criteria that acknowledge the integrated investment and research-led nature of the 21st-century global economy, to ensure that the globalisation that benefits many areas does not decimate others. That could be done by broadening the criteria for defining the public interest, from the existing four, by increasing the percentage of shareholders who have to vote in favour of a takeover, or in other ways. It is time that the question was re-examined, to get a more robust set of criteria, which would preserve vital national interests.
In answer to a question on 7 February, the Prime Minister said at column 1494 that she would act in the “national interest”; and in August 2016 she launched her Cabinet Committee focusing on delivering one of her Government’s top three priorities—an economy that works for everyone, with a strong industrial strategy at its heart. The case of the GKN takeover provides the Prime Minister with a chance to prove the strength of her commitment to her self-defined mission to make Britain a country that works for all.
Order. Five Back-Bench Members want to speak, and the arithmetic is straightforward. I intend to call the Scottish National party spokesperson at 4 o’clock, so I hope that people will respect that time.
It is a pleasure to speak under your chairmanship, Mr Stringer. I will of course stick to the timing, but if I stray over, please do not hesitate to call me to order. It is a great pleasure to follow the hon. Member for West Bromwich West (Mr Bailey). I heartily congratulate him on securing this extremely important debate. I agree with virtually everything he said, and it is a pleasure to have that experience about a speech made from across the Chamber. I see other midlands MPs in their places; we have many common interests in this important matter.
GKN has a 250-year history and has played a significant part in the manufacturing heritage of the midlands for many years, since it was established as an ironworks in 1759. In Redditch we are proud to host the global headquarters of that multinational business. As the local MP, I have engaged with it through visits and through discussions of how it will continue to work proactively in the local community, of which it is a great supporter. That is a responsible approach and GKN is leading by example.
Unfortunately, when GKN announced its results in 2017, although the latest annual sales figures were up, its trading margins had started to fall. It was evidently vulnerable and it set out to launch a new strategy to boost the company. Once it became clear to me that GKN was under threat of a hostile takeover, I spoke without delay to the company bosses and was told in no uncertain terms that all 260 employees in Redditch, many of whom are my constituents, would lose their jobs if Melrose were to be successful in its takeover. It is for those 260 people that I speak today. As the hon. Member for West Bromwich West has said, they are among a small number around the world. I welcome the Government’s recent move to strengthen the takeover rules, following the report from the Takeover Panel. It is welcome, and is in line with the Prime Minister’s manifesto commitments. I ask the Minister to update us on the consultations and proposals. My constituents and GKN employees would welcome further clarity.
The hon. Member for West Bromwich West, who spoke so well, covered most of the points that I wanted to make, and I shall confine my remarks to a few key areas. I agree that the takeover appears to be opportunistic, and there is great concern that the offer would undervalue GKN’s business culture, which it fought hard to build up for many years. GKN has invested heavily in research and development expenditure, skills and engineering jobs, all of which are badly needed in the UK, particularly in the midlands. Its work and portfolio have been built up with years of experience, which are not matched in Melrose. We in the midlands are proud of our record—our heritage—of making things.
GKN may have lost its way, up to a point, in recent years. Perhaps it is not performing to the full extent of its capability, but it has a focus on a long-term business model. That is a welcome contrast to the short-termism of Melrose, which is not seen as a sustainable long-term investor in the best interest of the company. Indeed, GKN’s former CEO, Nigel Stein, resisted splitting up the firm because he felt that the expanding aerospace business provided a degree of security against the typically cyclical nature of its auto side. It made sense to grow, given the increasing overlap of aerospace and automotive, and the fact that a bigger business is better able to resist takeovers—witness what happened to Cadbury after it separated from Schweppes.
I have written to the Secretary of State and have met him to put those concerns to him. I fully understand that, as he has explained to me, he is unable to comment directly on the matter, owing to the quasi-judicial nature of his role. I understand that any comments that he made could be construed as affecting the course of the takeover and could undermine and invalidate it. However, I am calling on the Minister who is responding to this debate to provide any further clarity he can. The Business, Energy and Industrial Strategy Committee, led by its excellent Chair, the hon. Member for Leeds West (Rachel Reeves), is looking at the matter and would, I am sure, welcome clarity. I see that a fellow Committee member, the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), is present for the debate. It was interesting today when GKN’s biggest customer announced its view. I believe it is quite rare for not only a customer, but the board of pension trustees and the entire board of directors to reject a bid in that way.
I want to touch on one matter that I believe is in the takeover code, which is that a company that is going to take over a company must provide assurances as to what it will do. Melrose has tried to provide assurances to our Select Committee and in the public arena, and it has sent letters to me—I do not know whether the other members have received them. It has pledged to keep GKN’s headquarters in the UK and maintain the same levels of research and development funding, but we do not know what those pledges are based on and what is behind them. How can we be certain that they will be adhered to and delivered? That is a matter of great concern to GKN and people in Redditch. Since GKN’s sale of its Driveline business to Dana, there has been a lot of turbulence inside the company. A number of issues are affecting GKN employees in Redditch and are causing them to worry.
In Melrose’s defence, it has said that it is a people-focused company with an outstanding track record on pension schemes, and it has indicated that GKN’s current schemes will be safe. It has said that it invests more in R&D than GKN does, and that its actions are in line with the Government’s industrial strategy. It has said all those things—I am putting them on the record to be fair to it—but I want to see more evidence of that because the weight of evidence is not currently in its favour. We must find a balance between a short-term cash injection and a long-term strategic overhaul, and it must be managed by those with knowledge of and expertise in this industry.
I believe, as the hon. Member for West Bromwich West said, that the Government are responsible for supporting the growth and productivity of this sector and for creating the right business environment. That would have so many benefits for our economy in the midlands, for our productivity and for the whole skills piece. We are encouraging young people in our communities to set out a path for themselves in the fantastic science, technology, engineering and maths subjects. We have skills gaps in those sectors in our country, including in the midlands. GKN is a great example of a company that has brought on young people and promoted such careers, but I fear for the future of that.
The evidence in front of me does not convince me that this takeover bid is in the best interests of the company, the country’s long-term industrial strategy and the shareholders. There are important questions to be answered about how we define our national interest and defence.
I thank my hon. Friend the Member for West Bromwich West (Mr Bailey) for securing this important debate. I echo the serious concerns that he and the hon. Member for Redditch (Rachel Maclean) raised about the bid for the proposed takeover by Melrose of GKN. GKN employees raised similar concerns when I recently met them at a lobby organised by Unite the union just a couple of weeks ago, and they are echoed in my constituency, where GKN Aerospace employs 220 people and is a world leader in commercial and military flight-deck transparencies. It provides toughened glass for flight-deck windows, and specialist safety glass to more than 50 programmes. There is no better illustration of why this takeover bid has national security implications than GKN Aerospace’s military involvement at Kings Norton.
I do not need to remind the Minister of the importance of the UK’s aerospace industry. That is why we need to take the concerns raised by the industry seriously. ADS, the leading organisation representing the aerospace sector, warned that what happens to GKN is of critical importance to the wider sector. My hon. Friend the Member for West Bromwich West rightly mentioned the unprecedented intervention of the chief operating operator of Airbus, who said yesterday:
“It would be practically impossible for us to give any new work to GKN under such an ownership model when we don’t know who will be the long-term investor.”
GKN is also a key strategic player in the automotive sector. Driveline does pioneering work on components for the ultra-low emission vehicles of the future. I am aware that GKN’s management is proposing to split off that part of the company through the merger of Driveline and the United States firm Dana. On the positive side, there is the prospect that that will create an engineering powerhouse in the automotive sector on a global scale. I very much hope it achieves that prospect, but I do not want to be starry-eyed about it. Ministers should seek assurances from GKN and Dana about the long-term commitment of the new merged company to the UK, including on jobs and our research and development base.
Also, if GKN Aerospace is left as a stand-alone company, I endorse west midlands industry analyst Professor David Bailey’s call—my hon. Friend is right to pay tribute to his work on this issue—for the Government to consider taking a golden share to protect the public interest in the company for the long term.
None of that makes me any warmer about the Melrose alternative. Melrose claims—the hon. Member for Redditch mentioned this—that it will
“return GKN to be an engineering and manufacturing powerhouse”,
but its track record of taking over and selling on companies does not give me confidence that its takeover bid is in the interests of the long-term future of GKN or British industry, whether in the aerospace or automotive sectors. That is why there is such cross-party opposition to the takeover bid in this House. I am pleased that Birmingham City Council’s leader, Councillor Ian Ward, and its cabinet member for jobs and skills, Councillor Brett O’Reilly, have warned about the consequences of the Melrose bid for the industrial base of Birmingham and the wider west midlands. I am pleased that they have been joined by the West Midlands Mayor, who has added his voice on the subject.
Industry analysts have observed that such a takeover bid would not be allowed to go ahead in France or Germany. That is yet another reminder, if we needed one, of why the UK’s takeover laws need urgent reform, including the public interest test, against which takeovers are assessed, and the majorities needed to approve takeovers. Why cannot we require a majority of 75% in this country, as Germany does? We must ensure that institutions whose interests are intrinsically short-term, such as hedge funds, are not able to decide on issues that affect the long-term future of key, strategic companies in our economy.
That is for the future, but GKN’s extensive role in the UK defence industry indicates, as my hon. Friend the Member for West Bromwich West said, that this takeover bid raises national security issues, which means that the Government already have the grounds and the responsibility to intervene under section 58 of the Enterprise Act 2002. No doubt the Minister will say that, because the Secretary of State has a quasi-judicial role on these matters, he is prevented from saying much today, but I put this to him: it is not what Ministers say about this takeover bid that is important; it is what they do. They should intervene and block it.
I congratulate the hon. Member for West Bromwich West (Mr Bailey) on securing this debate. I echo many of the comments that have been made. It is clear that there is a consensus that GKN is at the cutting edge of the UK Government’s industrial strategy and plays a key part in that. We have heard that it is involved in sensitive programmes, and that it provides technology for a US defence company. I say that because the Royal Air Force has ordered 138 of the F-35B fighter jets made by that company. That is worth noting. The lifespan of some of those products could be up to 50 years from initial development, and that requires continuous maintenance. We already know that the London-based company Melrose has a record of buying companies, holding on to them for a few years and then stripping them. Given the nature of the technologies we are talking about, it makes no national sense to allow a hostile takeover to happen.
GKN operates in more than 30 countries and has 58,000 employees, including 6,000 in the UK. Even the workers are expressing concerns that a takeover by Melrose could leave the Government’s industrial strategy in tatters and see GKN sold off piecemeal, bit by bit, with jobs cut or shipped abroad. The warnings could not be clearer. Even the Secretary of State for Defence recently said before the Select Committee that he felt it would have been remiss of him to fail to express concerns. The merger could see parts of the business that provide components for military equipment falling below standards. The Committee on Foreign Investment in the United States, a US regulator relevant to military implications, must give approval, but GKN has warned that it does not believe that Melrose will be able to obtain that approval within the required time. As the hon. Member for Birmingham, Northfield (Richard Burden) said, we are talking about a potential and unnecessary risk to national security.
Under the Enterprise Act 2002, a number of authorities have the statutory power to intervene in takeovers. The power can, rightly, be exercised only on certain specified grounds. There are three main grounds on which certain authorities can stop takeovers. The Secretary of State for Business, Energy and Industrial Strategy may intervene on the grounds of national security and of financial stability. We have already established that national security is an issue, or at least an argument, but there is also a clear argument for financial stability.
As if the scale of what is at stake were not argument enough to act, flinging in the political chaos and uncertainty surrounding our political future due to Brexit ensures that the stable continuation of a major employer is more important than ever. We only need to look at the pensions aspect. The chief executive of the Pensions Regulator wrote to the Work and Pensions Committee to express grave concerns about the GKN pension scheme. We are trying to promote pensions and to convince people to ensure that they are secure in later life, because we recognise there is ticking time bomb, which could be disastrous, but at the end of December the GKN pensions deficit officially stood at £700 million. GKN warned that Melrose’s intention to ramp up the debt would lower its ability to support the pension scheme. That seems to be totally counterproductive, given the language continually used about pensions in particular.
Surely, before any progress can be allowed, Melrose must submit its takeover plans to the Pensions Regulator to show that the security of the retirement scheme will remain intact, and that is even without all the other arguments I have given. The reality is that the Government have the power, the reasons and the support to act. The question is, do they have the will?
It is a pleasure to serve under your chairmanship, Mr Stringer.
Guest, Keen and Nettlefolds has a ring to it, and GKN is an iconic engineering company, a British success story with a history stretching back over 259 years, founded in south Wales. Three years ago, I remember a man who had worked 44 years for GKN calling it “as British as the royal family”.
Here in Britain, GKN employs 6,000 people across major sites in Filton near Bristol, Birmingham and, in particular, the Isle of Wight. It now employs 58,000 people worldwide, with companies and joint ventures in more than 30 countries. Crucially, GKN undertakes the largest portion of its research and development work in the UK, with the majority of aerospace R&D taking place in Filton and automotive R&D in Abingdon.
I welcome the all-party approach to this issue, and the hon. Member for Redditch (Rachel Maclean) is right to say that we talk with pride about GKN, its workers and what it does—so do I. The Driveline factory is in my constituency—800 excellent men and women who serve the industry and the nation well.
The takeover puts a great British engineering icon into jeopardy, because of not only the history of Melrose but what is happening with some of GKN’s major customers. Reference has already been made to the revelations made only yesterday in the Financial Times about what Airbus has made abundantly clear. In the words of its chief operating officer:
“The nature of our industry is one that requires a commitment to long-term investment and strategic vision...The industry does not lend itself to shorter-term financial investment which naturally reduces R&D budgets and limits vital innovation.”
As my hon. Friend the Member for West Bromwich West (Mr Bailey) rightly said, typically we are talking about development lines and R&D strategies that stretch over 20 or 30 years, and the Airbus chief operating officer went on:
“It would be practically impossible for us to give any new work to GKN under such an ownership model when we don’t know who will be the long-term investor.”
He is right and—I can say this with confidence—others will follow in the days to come.
As the hon. Member for Isle of Wight (Mr Seely) said earlier, Melrose has a chequered past with regards to the companies it has owned. For example, Melrose owned Dynacast from 2005 to 2011, during which time it moved much production overseas to—in its words—“cheaper countries”. Melrose closed its Alcester site the same year that it took over the company and had no UK presence between 2005 and 2008. In July 2008 it acquired the FKI group, of which manufacturing firm Brush is part. Melrose began selling off parts of the group in 2009 and sold off about 15 businesses between 2009 and 2014. It implemented severe job cuts at the Brush plant in Loughborough, taking the number of employees down from 1,200 to 600, with a further 270 redundancies announced this year, again moving production overseas and hollowing out a once great company.
One of the workforce’s big concerns, which I share, is pensions. As the hon. Member for Redditch said, like many UK companies GKN has a significant pensions deficit that it is working hard to reduce. By agreement with its workforce and their trade unions, in 2017 the GKN group pension scheme was closed to future accruals. A contribution of £250 million was paid into the scheme. Crucially, on assessment of the company’s pensions covenant, the scheme was found to be the “high end of good”. No concern was expressed about GKN’s ability to deal with the pensions problem.
Significantly, however, Melrose has not given the guarantee it was asked for. On the contrary, its whole approach has been to increase debt significantly. The consequences of that will be to weaken the strength of the covenant and to put at risk the pension scheme. In the aftermath of tragedies such as Carillion and British Steel, the last thing we need at an iconic British engineering company is such a problem befalling the workers of GKN.
To turn to the defence issue, GKN Aerospace has 52 manufacturing locations across 14 countries and turnover of £3.5 billion, much of it defence work. Reference has been made to GKN Aerospace and what it does here and abroad. It supports the British armed forces, such as with the Typhoon, the F-35, the P-8, the A400M, the Chinook, the Apache and the MQ-9. Equally, many of the other platforms that GKN Aerospace is a part of support the armed forces of NATO allies. GKN is a strategic supplier of defence platforms, making canopies for the Typhoon, for example, or being a strategic supplier for the F-35. In factories all over Britain, its role in support of our armed forces and that of our NATO allies is critical.
In a former life, I was chairman of the defence unions and worked closely with the Ministry of Defence. Time and again at events and at first hand, I saw GKN on the ground with that intimate relationship with the Ministry of Defence and our allies. That is why I say to the Minister that he has the power to intervene. The Secretary of State has the power to intervene under section 52 of the Enterprise Act 2002.
Another reason I think this issue is important is that one of the last battles I fought in my former life was the battle against Kraft’s takeover of Cadbury. No one in Britain wanted it. Cadbury was a profitable, iconic British company that was taken over by a debt-laden American multinational. Guarantees were given, but the first guarantee about the Bristol plant was broken and it was closed. Sadly and inevitably, that led to a debate about tightening up the rules on corporate takeovers.
The Government have made some faltering progress in the right direction, but they have gone nowhere near far enough. The Prime Minister has committed to look at the rules and to change them so that we do not have such bids ever again succeeding. Having said that, and however important the future debate is on general takeover regimes, the Government have the powers here and now. They have the grounds. If there is a will, there is a way. I earnestly hope that the Government will respond to the very substantial all-party concern that has been expressed in this place.
I feel a particular passion because I used to represent the people concerned. I have been into the GKN Driveline plant and others; I have seen men and women who are the salt of the earth, with 25, 30, 35 or 40 years’ service, following their mums and dads. I have been into their homes; they have GKN awards and certificates up on their walls. They are proud of who they are and what they do. This country is proud of GKN, and the last thing we want to see is for GKN, that great British engineering icon, to become history.
It is a pleasure to serve under your chairmanship, Mr Stringer. I congratulate the hon. Member for West Bromwich West (Mr Bailey) on securing this vital debate. As has already been said, GKN has a long and proud history dating back to 1759, when Guest established the ironworks in Dowlais, in Merthyr, south Wales. I suggest that there is no better pedigree than that. Today, the company has developed and expanded so that it operates in 30 countries and employs 6,000 people in the United Kingdom, many in well-paid jobs.
Let us be clear about the nature and the intent of this takeover bid. Melrose is a hedge fund operator, despite what it might say, and an asset stripper, despite its protestations. As other hon. Members have said, that was clearly laid bare by the statement made by Airbus, which has been widely reported and quoted today. The response of the GKN chairman, Mike Turner is interesting. He said:
“The comments from Airbus that stress the need for long-term investment and strategic vision in our industry emphasise our firmly held belief that Melrose is not an appropriate owner of GKN. Its management lacks the relevant experience and its short-term business model”—
he is being very polite—
“is inappropriate for GKN’s customers and investors.”
That sets out the situation very clearly and succinctly.
I want to focus on the implications for the defence sector in this country. There is a very genuine and real concern about the defence implications of this takeover. GKN is a major defence partner to Boeing and to Airbus, and it supplies and maintains UK defence equipment for the RAF and the Army. Importantly, GKN is very involved with the Typhoon aircraft production; the Chinook and Black Hawk helicopter programmes; the very important F-35 joint fighter aircraft programme, which is coming on-stream now in this country; and the A400M aircraft produced by Airbus. If the GKN takeover comes about, we are likely to see a big question mark over the nature of the successor company’s involvement. Make no mistake: Melrose’s track record shows clearly that it has no interest whatever and no expertise at all in anything related to defence. We are likely to see sell-offs of its defence interests, and that would have major defence implications for this country.
I welcome the Chair of the Defence Committee, the right hon. Member for New Forest East (Dr Lewis), to the debate. He has said that the takeover puts a question mark over the ownership of intellectual property. If that section of GKN is sold to another firm that is located in another country, the intellectual property goes with it. Who knows what country it may end up in? More than theoretically, it is quite possible that some of the intellectual property rights will go to countries that are not friendly to the United Kingdom.
The Secretary of State for Business, Energy and Industrial Strategy has a moral reason to be very concerned about the situation, and he has the practical means to intervene. As has been said, under section 42 of the 2002 Act, he can intervene on the grounds of public interest and in section 58 of the Act, public interest in these circumstances can be defined as placing in jeopardy our national security. If the Secretary of State chooses not to intervene now, it may be too late to ever intervene again. The Secretary of State can intervene only if the turnover of a business that is threated by takeover is greater than £75 million, or the business has more than 25% of market share. It is possible that once the sale of the company takes place, the sale of the company’s assets through downsizing will mean that the Government do not have the legal base to intervene to protect our national interest. That is why I believe that the Government must act.
The Secretary of State for Defence indicated in his evidence to the Defence Committee that he is very concerned about the situation. On 6 March he put his concerns in writing to the shadow Secretary of State for Defence, my hon. Friend the Member for Llanelli (Nia Griffith). He said:
“Both GKN’s existing Board and Melrose have publicly indicated their intentions to restructure, and potentially sell, some elements of the business. I recognise that this will be unsettling for staff who might be affected but the impact of either of these proposals on defence and aerospace jobs is currently unclear.”
It may be unclear to him, but it is not unclear to many others.
I urgently ask that the concerns are delved into in some detail and depth as then they will be apparent for all to see. I hope the Government will bite the bullet and necessarily intervene, to stop this hugely damaging takeover.
It is a pleasure to serve under your chairmanship, Mr Stringer. I congratulate the hon. Member for West Bromwich West (Mr Bailey) on securing this important debate on a strategic issue. He raised the long-term aspects of GKN ownership, and gave a warning about the short-term or illusory interest that might be shown towards shareholder gain. He also gave a warning about the relative sizes of the companies and reflected on GKN’s sheer breadth of manufacturing interest in aerospace and automotive.
The hon. Member for Redditch (Rachel Maclean) rightly raised concerns about possible local jobs losses due to the takeover; she indicated that it is very important that pensions protections should be put forward, and I will come back to that subject later in my speech.
It is certainly worth underlining the need to invest in young people and in the future by investing in science, technology, engineering and maths skills. It would be remiss of me not to say that that should very much include girls and young women. It should be noted that GKN has committed to young people and STEM subjects. The hon. Lady clearly is not convinced by the proposed takeover by Melrose.
The hon. Member for Birmingham, Northfield (Richard Burden) mentioned the range of assurances that are required about jobs and research and development, which I will come back to. He certainly seems to have no confidence in Melrose. He rightly raised the concern of other local politicians who are involved, including the council leaders and the Mayor. Importantly, he touched on the need for urgent reform of the takeover rules. Perhaps that needs to be looked at a bit more urgently. He also touched on the German model. We know that German manufacturing has been extraordinarily successful because it has been able to take a more long-term view and make long-term investments.
My hon. Friend the Member for Paisley and Renfrewshire South (Mhairi Black) got straight to the nub of the issue with what she said about the UK Government’s strategic positioning and industrial strategy. She rightly warned that without the proper resources and investment in manufacturing, the industrial strategy is very much at risk.
On that point, let me reassure the hon. Gentleman that the Government are committed to supporting the sectors that he talks about. We are investing £1.95 billion in aerospace and £1 billion in automotive research.
I am grateful for the Minister’s intervention. It is good to know that that is the intention, but as hon. Members around the Chamber mentioned, that investment could be lost with GKN. Members will be interested to know what assurances he can give that that money will actually stay in the UK’s economy.
My hon. Friend the Member for Paisley and Renfrewshire South clearly pointed out the grounds on which the Minister could intervene—I understand that he has difficulties in terms of what he can say about national security and financial stability—and mentioned the uncertainties of Brexit as context for the need to ensure that investment and stability are maintained. Importantly, she also mentioned that the chief executive of the Pensions Regulator wrote to raise his concerns about the long-term prospects for GKN’s pension scheme.
The hon. Member for Birmingham, Erdington (Jack Dromey) rightly talked about workers in his constituency, Airbus’s warning about taking a short-term approach and the need for a long-term strategic vision. He gave dire warnings from history about the severe jobs cuts at Dynacast and the FKI group. He, too, mentioned the GKN pension deficit. I must say that I am not as assured as he is about the pension fund. Whichever company is in control—GKN or Melrose—must ensure that it is properly funded so that people do not lose out. He underlined the fact that the Government have the powers, should they choose to use them in this case, and rightly talked about his pride in GKN.
The hon. Member for Caerphilly (Wayne David) concentrated heavily on the fact that Melrose is trying to buy a major player in an industry in which it has no experience. He warned about the potential loss of defence and intellectual property, which the Minister should consider very carefully. His point that this may be the last chance to look at that was poignant, and it should be considered. Several hon. Members mentioned that the benefits of automotive and aerospace are realised over decades. A long-term approach is not only required but demanded by the people who will depend on the jobs, by the companies that will need the skills and by the public purse, and therefore the public services, which will be funded by the tax that is paid. Again, the Government should concentrate heavily on that.
I share the concerns expressed by Members around the Chamber about the rights of workers in these companies and their jobs, and about the fact that we should seek to maintain industrial and engineering capabilities, jobs and skills. I underline again the concerns that were raised about the pension scheme: any diminution of the company’s ability to pay pensions would be deeply troubling. I will not go over the points that other hon. Members made, but that is critical: people who have given their lifetimes to working in the industry should not be abandoned when the time comes for them to draw their pensions. GKN has pointed out that its pension fund has been driven down by Brexit and currency fluctuations. Hon. Members’ national security concerns must also be taken seriously, especially given the intervention on that subject by the Minister’s colleague, the Secretary of State for Defence. The Government must carefully consider all the contributions we have heard in deciding whether they will intervene.
It is a pleasure to serve under your chairmanship, Mr Stringer. I thank my hon. Friend the Member for West Bromwich West (Mr Bailey) for calling this important debate and acknowledge the many impressive contributions by Members on both sides of the Chamber. We heard that GKN is one of the world’s oldest and most prestigious engineering firms. As an engineer myself, I can imagine people’s pride at knowing they are following in such an illustrious tradition. I appreciate the pride of the hon. Member for Redditch (Rachel Maclean) and my hon. Friend the Member for Caerphilly (Wayne David) at having GKN in their constituencies, and that of other Members, too.
GKN is at the centre of the fourth industrial revolution, boasting of strengths in defence, aerospace, automotive, batteries and the internet of things. My hon. Friend the Member for West Bromwich West set out the significance of its economic contribution, and my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) emphasised the significance of its investment in R&D in the United Kingdom. As the shadow Minister for industrial strategy and a chartered engineer, I believe that all those factors make GKN an important part of our future innovation economy. As my hon. Friends the Members for Birmingham, Northfield (Richard Burden) and for Caerphilly emphasised, it plays an important part in our national security, too.
Members on both sides of the Chamber critiqued the Melrose bid. Unite, which represents most GKN workers, has called the bid “predatory” and Melrose an “asset-stripper”. It calls for the Government to halt the bid, as does the Chair of the Business, Energy and Industrial Strategy Committee, my hon. Friend the Member for Leeds West (Rachel Reeves). Melrose contests that, but admits that it would cut GKN’s management, deliver a “fundamental” culture change, sell sections of the company and boost the firm’s profitability through what its CEO calls
“the catharsis of a change of control.”
It sounds like Melrose is an advocate of Schumpeterian creative destruction, but with little regard for what is destroyed or, indeed, created. In practical terms, that could mean the closure of sites and divisions across the UK, the loss of jobs, a threat to pensions, as we heard, and the disappearance of crucial engineering expertise.
As my hon. Friend the Member for Birmingham, Erdington emphasised, Melrose’s record does little to assuage those concerns. It does not make purchases for the long term. The biggest example is its stewardship of Brush Turbogenerators, bought as part of FKI in 2008. Since then, the firm has had five different managing directors, and just last month it announced that it would cut up to 270 jobs in Loughborough and shift production overseas, despite the fact that last year Melrose paid out bonuses worth £160 million to only four people. My hon. Friend the Member for Redcar (Anna Turley) remarked earlier this week that meeting representatives from Melrose was like “meeting neoliberalism in person.”
However troubling we might find Melrose’s practices, this is not about just one company; it is about how our economy works. The Secretary of State for Business, Energy and Industrial Strategy hosted and attended the first meeting of the University College London commission for mission-oriented innovation and industrial strategy, chaired by world-leading economist Mariana Mazzucato. In her new book, she argues that the “two faces of financialisation” are at the heart of capitalism’s fundamental failure. The first is the way in which the financial sector has stopped resourcing the real economy—making stuff. Instead of investing in companies that make stuff, finance is financing finance.
The second aspect is the financialisation of the real economy, with industry driven by short-term returns, which results in less reinvestment of profits and rising burdens of debt in a vicious cycle, which makes industry ever more driven by short-term considerations. Such finance is not neutral but changes the nature of what it finances. As we have seen in Melrose’s approach to managing Brush, its short-termism has led it to neglect the difficult, costly business of maintaining sunk assets such as factories or developing new technologies, such as those we heard about in the automotive sector. Melrose’s expenditure on R&D is proportionally less than a fifth of GKN’s.
Melrose’s track record indicates that it will focus on strategies such as offshoring jobs that neglect people and places but provide an immediate financial return. A Melrose takeover would therefore lead to the financialisation of GKN, placing UK jobs under threat and eroding our industrial base. That was very much the point made by Tom Williams, the chief operating officer of Airbus, when he said it would be practically impossible for his company to give new work to GKN after a Melrose takeover.
The debate is not about Melrose alone but about how our country’s economy works. As the Leader of the Opposition said last month at the EEF conference:
“The next Labour Government will be the first in 40 years to stand up for the real economy. We will take decisive action to make finance the servant of industry, not the masters of all.”
In the immediate term, as Members on both sides have said, there are powers that the Government can use to stop the Melrose takeover. When I mentioned that in the Chamber to the Secretary of State, he said, correctly, that according to the Enterprise Act 2002 he could intervene
“only in mergers that raise public interest concerns on the grounds of national security, financial stability or media plurality.”—[Official Report, 13 March 2018; Vol. 637, c. 711.]
As others, including Unite and the BEIS Committee have made clear, the proposed takeover raises national security concerns, given GKN’s close involvement with sensitive defence projects. While the Minister cannot answer in detail, will he answer in principle whether the Government believe that Melrose’s proposed takeover could raise public interest concerns on the grounds of national security? Will he explain what process the Government will go through in reaching a conclusion?
The Secretary of State also praised his Government’s corporate governance reforms, which
“have ensured that GKN had longer to prepare its defence, preventing the kind of smash and grab raid that Cadbury’s was subjected to under the previous Government”.—[Official Report, 13 March 2018; Vol. 637, c. 711.]
That has been mentioned in the debate. Kraft’s takeover of Cadbury in January 2010 did prompt changes to the takeover code in 2011 and further amendments to the takeover regime with the Enterprise and Regulatory Reform Act 2012, which set up the Competition and Markets Authority. I served on the Bill Committee, when Labour proposed amendments to strengthen the new CMA and broaden the scope of the public interest test. For example, one amendment would have allowed the Secretary of State to consider the effects of the proposed merger on the long-term competitiveness of the UK economy as part of the public interest test.
I sat and watched as the Government voted down amendment after amendment that would have provided them with a framework to act. Will the Government now explore and legislate for the expansion and broadening of the public interest test, which they failed to do six years ago? That would not be without precedent—for example, the financial stability clause, added in 2008 during the financial crisis. Can we tighten the financial stability test to include considerations of long-term financial viability, as suggested by the hon. Member for Paisley and Renfrewshire South (Mhairi Black)?
Only this morning, Unilever announced that it will relocate its headquarters from London to Rotterdam. One key factor in that decision was the greater protection afforded to the company by Dutch takeover law. Will the Government look at improving the protection offered by takeover rules to British companies?
Both Dana and Melrose have questions to answer with regard to the future of pension schemes that GKN is currently responsible for. Will the Minister explain what assessment has been made of the schemes and what assurances the Government have sought?
The Secretary of State talks of building an economy for the long term, just as his predecessor did. This is a litmus test for his industrial strategy. It cannot hold if time and time again our most successful and innovative companies are taken over and then taken apart. Investing in innovation is a long-term bet; Melrose is a short-term player. Do the Government have the will to build a high-skill, high-wage, high-productivity economy, or is casino capitalism what our future holds?
Before I call the Minister, I ask him to leave three minutes at the end to allow Adrian Bailey to sum up.
It is a great pleasure to serve under your chairmanship, Mr Stringer. I think that gives me nine minutes to cover the points and address the issues raised by hon. Members, so, to coin a phrase, I will crack on. I congratulate the hon. Member for West Bromwich West (Mr Bailey) not only on securing the debate but on the thoughtful, clear tone in which he made his contribution. He has no constituency interest but raises this issue because he cares passionately about the UK economy and our manufacturing industry in particular. I applaud him for that.
The context is important. The hon. Member for Newcastle upon Tyne Central (Chi Onwurah) said we want to be a nation of makers, and it is important to recognise that we have just seen the longest consecutive period of growth in manufacturing in the UK for 50 years. I am therefore pleased to report to the House that manufacturing is in rude health. The United Kingdom is a successful open economy and the Government’s industrial strategy, which has been discussed at length today, will build on our strengths and address our weaknesses to create a Britain fit for the future.
A key part of the UK’s dynamic economy is our mergers regime. Mergers and takeovers can bring benefits to both consumers and the UK economy. I can report to hon. Members that the UK has the third-highest foreign direct investment stock in the world, behind only the US and China. That investment means jobs in growing sectors and opportunities to develop skills, and it helps companies deliver products and services at competitive prices. Mergers and takeovers also provide important opportunities for companies to grow and innovate. Many of the UK’s most successful companies have grown through mergers and takeovers, both in the UK and abroad.
The UK’s merger regime is highly regarded the world over due to its design. The regime, based on transparent rules administered consistently by expert bodies, recognises that decisions are primarily a matter for the shareholders and restricts the role of Ministers to transactions that raise public interest concerns. As a result, the regime offers clarity for businesses and maintains investor confidence.
For example, the takeover code, administered by the independent Takeover Panel, provides a robust framework to ensure that takeovers of listed companies are conducted in an orderly manner with fair treatment of the shareholders. The Takeover Panel has repeatedly strengthened the code. Its most recent changes, which came into effect on 8 January 2018, require bidders to make earlier and fuller disclosure of takeover plans and to give companies subject to a bid more time to prepare their response—the question that the hon. Member for Newcastle upon Tyne Central raised earlier. Those changes have applied to the bid by Melrose.
I apologise for coming late to the debate. While what the Minister says is absolutely beyond question, does he accept that where the defence of the realm is concerned, certain other considerations must also apply?
I thank my right hon. Friend, who as always makes a salient and sensible contribution to the debate. I agree with him wholeheartedly that the defence of our nation is the most important point in any of these decisions.
As hon. Members have heard, the Enterprise Act 2002 grants Ministers statutory powers to intervene in mergers that give rise to public interest concerns only on the grounds of national security, financial stability or media plurality. The hon. Member for Paisley and Renfrewshire South (Mhairi Black) raised the issue of that financial stability. It is the financial stability of the country’s economy as a whole. This Government take very seriously our responsibility to protect national security in particular, and we are robust in assessing any possible public interest concerns and carefully considering when those powers should be exercised. If necessary, they will be exercised.
I appreciate that there has been much speculation about the potential use of those powers in this case. However, as we heard earlier, public interest interventions are quasi-judicial in nature. It is therefore important that Ministers act, and are seen to act, impartially, on the basis of an open mind and of the evidence available. For that reason, it is not appropriate for me to comment on their use in this individual case. As hon. Members might expect, my right hon. Friend the Secretary of State and I have taken a close interest in events. He has spoken to the chief executive officers of both GKN and Melrose to understand their intentions and to make it clear that he wants an open line with the companies, consistent with his potential statutory role in the process.
The bid, however, is primarily a commercial matter for the parties concerned, and we wait to see how things develop. GKN shareholders now have until 29 March to decide whether to accept the Melrose bid. It has become clear that, regardless of whether the takeover by Melrose is successful, GKN will not be the same company we know today. Beyond the potential sale of the Driveline, both GKN and Melrose have outlined plans to sell the powder metallurgy business and other non-core businesses. There remains the distinct possibility that, irrespective of which party ultimately controls GKN after the resolution of the bid, it will choose to sell all or parts of GKN’s current business to foreign companies.
On 13 March, Melrose wrote to the Business, Energy and Industrial Strategy Committee at its request, setting out the company’s position on pensions and post-offer undertakings. In addition to the conversations held between the Government and the parties involved, the hon. Member for Newcastle upon Tyne Central, who raised the question of Unite, will be pleased to know that the Secretary of State has been in close contact with the union.
I know that some hon. Members have concerns about GKN’s pension schemes. Individual cases are a matter for the independent Pensions Regulator, but the Government are aware that the parties are in discussions with the pension trustees, who have made their expectations clear. The hon. Member for West Bromwich West raised the issue of R&D investment; Melrose has told the Business, Energy and Industrial Strategy Committee that it supports R&D and will maintain the level of investment in R&D that GKN has spent in the past, which I think was 2.2% of sales between 2014 and 2016.
The hon. Gentleman also mentioned the question of how France and Germany could block takeovers. The reality is that they cannot. The UK’s takeover rules are based on EU takeover rules, which apply to all European countries and limit the ability of national Governments to block mergers unless they are based on national security, financial stability or media plurality grounds. France and Germany would also be unable to block a takeover of that kind due to EU takeover rules.
My hon. Friend the Member for Redditch (Rachel Maclean) is a doughty fighter for her constituents, and I know how passionate she is about this issue. She asked whether we are confident about the assurances Melrose has given about the UK headquarters. Under the takeover code, companies can make legally binding post-offer undertakings, and that is an important element. The hon. Member for Paisley and Renfrewshire South raised the question of pensions. Of course, it is a matter for the Pensions Regulator and it would be inappropriate for me to comment; however, the Government understand that the Pensions Regulator is in discussion with all parties.
The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry)—I hope I got that right—asked what assurances we can give that Government R&D investment will stay in the UK. I can tell him that Government grants to support R&D are awarded on the basis of R&D carried out in this country, so the conditions of any contract with Government would mean that those responsibilities would transfer to the new company.
I appreciate the Minister’s giving way in the limited time he has. I want to make it clear that my concern was that the investment, and therefore the resulting intellectual property, might be lost elsewhere.
I understand the point that the hon. Gentleman makes.
Finally, my hon. Friend the Member for Redditch asks what the Government are doing to further strengthen the codes. I will highlight that the Government are exploring proposals to strengthen our powers to scrutinise investment for national security purposes, which would bring our regime in line with those of other developed countries. The national security and infrastructure investment review that my hon. Friend talked about closed in January, and the Government will publish its firm proposals in a White Paper this year.
The Government will continue to monitor the situation very closely over the days and weeks ahead, and I can assure hon. Members that we will always act in the best interests of the country.
My experience of parliamentary scrutiny of takeover bids, from Kraft and Cadbury to Pfizer and AstraZeneca and, I hope, this one, is that, irrespective of the outcome, the fact that Parliament has scrutinised it has benefited the outcome—first, by holding the Government to account, and secondly, by holding the participant companies to account.
I make no apologies for having the debate, because I feel it is performing an essential role of Parliament. Today’s debate has demonstrated that, by demonstrating the unanimous strength of opinion on both sides of this House on the issues arising from this particular takeover bid, and the earnest desire that the Government use all the powers they have to intervene in the best interests of not just GKN but our economy, our productivity, our employment, our pensions and so on.
I understand the quasi-judicial role that the Government have in this matter and how that might inhibit any public pronouncement, but in this debate we have spoken clearly and demanded action. The debate reflects the opinion of Parliament in general, and I ask the Minister to act in the best interests of GKN and our economy.
[Graham Stringer in the Chair]
Motion lapsed, and sitting adjourned without Question put (Standing Order No. 10(14)).