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Labour business manifesto vows to ease mergers By Brian Groom, Political Editor Published: May 28 2001 20:24GMT | Last Updated: May 28 2001 21:52GMT
The impact of global markets would be taken into account by regulators in future merger decisions under plans published by Labour on Tuesday in its manifesto for business.
The manifesto, to be launched by Tony Blair in the City, also promises a speedier planning process for big infrastructure projects and proposes to bring Ofcom, the communications regulator, into operation by 2003.
It says companies would be required to give more information on directors' pay, but does not propose to force them to put pay packages to an annual shareholders' vote. Whitehall would have to regulate with a "light touch", and competition would be extended in the water industry.
Mr Blair, in his introduction to the manifesto for business, holds out the prospect of "a virtuous circle of stability, with higher investment that, combined with technological innovation, will bring lasting improvements in our competitiveness and productivity".
Labour's bid for business's loyalty concentrates on competition and confirms plans for an enterprise bill - expected in its first Queen's Speech - that would take ministers fully out of merger decisions.
It adds: "Mergers will be judged by . . . whether competition and the consumer are harmed, taking account of globalisation's impact."
This could mean a merger that would have fallen foul of UK market share rules could be approved if it strengthened a company's international competitiveness and did not abuse its domestic dominance.
The test is likely to include whether there is enough global competition to prevent it from raising prices at home - such as whether the market is open to new entrants or consumers can shop around abroad.
Stephen Byers, trade and industry secretary, said the move, which builds on changes in the Competition Act that came into force last year, would have a real impact. "It will give the competition authorities a far greater degree of flexibility to look at how the global market is operating. They won't be as constrained as they are at the moment."
The manifesto proposes to "strengthen the independence and pro-activeness of our competition authorities, giving a clear remit to champion competition - including scrutinising government regulations".
Mr Byers said changes in personnel and procedures would be needed at the Competition Commission, especially in view of last week's court ruling that Interbrew, the Belgian brewer, was not given a fair chance to suggest alternatives to selling Bass Brewers.
He said he expected the commission, in its own review, to take account of suggestions that the European Commission's competition procedures were fairer than UK ones.
The manifesto vows to speed up planning inquiries for big infrastructure projects, such as Heathrow Terminal Five.
"We will introduce new parliamentary procedures to approve projects in principle, allowing detailed issues to be considered by inquiries," it says. There would be stricter timetabling and clearer terms of reference.
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