Enterprise Act 2002 (Specification of Additional Section 58 Consideration) Order 2008

rose to move, That the order laid before the House on 7 October be approved (SI 2008/2645). The noble Lord said: My Lords, it is a great honour to speak for the first time in this House. I want to begin by thanking your Lordships for the wonderfully warm welcome I have received from all sides of the House over the past few days and also from the staff who work here and add so much to the character of the House. It means a lot to me; it is nice to be back. Being greeted by such a succession of noble Lords these past few days—many old friends and former colleagues—has been like replaying the last 30-odd years of my life, starting in the Wilson years and moving through the eras of Callaghan, Foot, Kinnock, Smith and then Blair. I know that a lot of people think of me as being quintessentially new Labour—indeed, who could doubt that?—but my roots go deeper. One of the privileges of being a Member of your Lordships’ House is the richness of the political experience drawn from past decades that I have benefited from over the years, and which is available to our debates today. Of course, my greatest wish is that my parents were alive today. My gregarious father loved mixing with politicians. When I was a boy, he was not above driving his car into the precincts of Parliament, although not a Member, relying on a cheery wave and a copy of Hansard left casually on the back shelf of his car to reassure the policeman on the gate—in those days it was a single policeman on the gate. My mother had more mixed feelings about politicians. The daughter of one, and then the mother of another, she had no appetite for more. The House is very different from the one my that my grandfather attended. Its breadth is wider. It is more representative. It is also a House that takes its scrutiny role very seriously, as I know from my European experience. There is not only a breadth but a depth in this House—something that might be more generally acknowledged. More than 50 years ago, my grandfather, making his maiden speech in this House, spoke of the Marshall plan and its importance in rebuilding the shattered economies of the allied countries of Europe after the Second World War. Now, as then, the world must come together to secure the future of its financial systems and the international architecture supporting them, at a time of deep uncertainty and turbulence in global markets. A strong, stable banking system is essential to support and protect the investments, savings and loans that help us grow our economy and succeed as individuals. Further to the recent measures announced by the Prime Minister and Chancellor to put the British banking system on a sounder, more secure long-term footing, private sector mergers can play an important role in helping a financial institution in difficulty. It is critical that in cases where a proposed merger could bolster financial stability in the UK’s economy, the overall public interest is served by a proper consideration of the need for stability, alongside the implications for competition. I beg to move, therefore, that your Lordships consider the Enterprise Act 2002 (Specification of Additional Section 58 Consideration) Order 2008, Statutory Instrument No. 2645. The order was considered by the Lords Merits of Statutory Instruments Committee at its meeting on Tuesday. Merger control in this country is regulated under the Enterprise Act and the European Community merger regulations, with the Office of Fair Trading and Competition Commission responsible for investigating UK mergers on the basis of their impact on competition in UK markets. The Enterprise Act provides limited powers for the Secretary of State for Business, Enterprise and Regulatory Reform to intervene in mergers to protect legitimate public interests. Public interest considerations are currently defined under Section 58 of the Act as ensuring national security and plurality of media ownership. Section 58 also provides the Secretary of State with the power to specify additional considerations, when necessary, to protect the public interest. As noble Lords will be aware, my right honourable friend John Hutton—my predecessor at the Department for Business, Enterprise and Regulatory Reform—announced on 18 September that he had issued an intervention notice in respect of the proposed Lloyds TSB group merger with HBOS plc. He also announced that he would place an order seeking the necessary power to enable him to take into account the vital public interest issues surrounding this merger. Let me be clear. It is not that the merged bank would be sheltered, if the merger goes ahead, from competition law. Were there to be any evidence of market abuse at some future time—not that I expect any such behaviour—the normal powers will be available to the competition authorities to protect consumers. The order specifies the maintenance of stability in the UK financial system as a public interest consideration under Section 58 of the Enterprise Act 2002—a new public interest consideration. This will enable the Secretary of State to intervene in those mergers in order to be able to make the final decisions based on the vital public interest of financial stability, alongside the competition issues. As Secretary of State, I am unable to take decisions on this merger until parliamentary approval is received for the order. Subject to approval of the order by your Lordships, I will ensure that I receive all available advice and views before I make any decisions. This will include advice from the Treasury, the Bank of England and the FSA, which make up the tripartite authorities. I am sure that your Lordships would agree that swift, decisive action is needed to give investors the regulatory certainty that they need and to send a clear signal to the market about the proposed merger between Lloyds TSB group and HBOS. The order will allow us to make careful and urgent consideration of financial stability an additional part of our assessment process, and as a result, support our work to help millions of UK businesses and families get through these very difficult times. It is a critical addition to the public interest considerations specified in the Act and I commend it to your Lordships. Moved, That the order laid before the House on 7 October be approved (SI 2008/2645).—(Lord Mandelson.)