#GE2010: Labour manifesto includes "Cadbury's Law"
Labour's manifesto is to include what trade unions have called a "Cadbury's Law" - giving the government powers to block or restrain a hostile takeover of a British company on national interest grounds. The move will involve "significant changes" to the 2006 Companies Act, I can reveal.
The law, I understand, would apply to infrastructure companies and to companies where the government deemed there was a national interest.
Potential takeovers of strategic companies would need to be approved by two-thirds of shareholders, as opposed to half now, and the acquiring company would be required to disclose long term investment plans.
The law would also include measures to prevent hedge funds taking short-term positions in target companies. There will be a "long-term interest test" and the acquiring company will have to specify how any debt would be paid down.
The new law will be seen as a victory for the Unite union, which believes such a measure would have allowed the government to block the acquisition of Cadbury's on at least two counts. Labour refused to confirm or deny that such proposals are in the manifesto but said there was no law proposed that would prevent the takeover of Cadbury's itself.
Industry Secretary Peter Mandelson is understood to have swung behind the new law following fractious interchanges with Kraft executives over the Cadbury's acquisition. In January he had opposed new powers saying:
"It might give rise to capricious decision-making and it can lead to a loss of transparency and a predictability which at the moment makes the current UK regime open to investors from which, I just underline, we benefit a great deal."
Comment number 1.
At 9th Apr 2010, barriesingleton wrote:PLEASE MR, CAN WE HAVE OUR UTILITIES BACK?
All the SANE voices of climate change, say we should be flexible, and prepared for anything. In my considered view, having our utilities (do they count as 'infrastructure'?) in foreign hands, sometimes with complicated chains of ownership, is not the way to await whatever is coming. There are shops that freeze when the air-con goes wrong, because they are contracted to some outfit hundreds of miles away. This is not a wise approach to natural events that might strike hundreds of thousands in this country.
A touch of Armageddon will prove my point, but will we have done anything in preparation?
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Comment number 2.
At 10th Apr 2010, Jericoa wrote:#1
Wise words Mr Singleton but we need a government first whom would know what to do with them if they were brought back to serve the population as a strategic basic need in the national interest.
In that sense Paul, sorry, but it is irrelevent what the labour manifesto says.
I think I will go back to my popcorn movie and bottle of wine now.
g'night.
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Comment number 3.
At 10th Apr 2010, tawse57 wrote:Does this explain why many of the firms now getting contracts to build wind-farms off the UK coast are foreign and how most of the wind turbines are being built by foreign-owned companies in foreign countries?
I simply cannot get my head around this because it is the economics of the madhouse.
If you must give these 'rights' to anyone then at least give them to British firms so that British companies can benefit, grow and profit from this investment in wind-farms - keep the money in the UK. It is not rocket science.
But why give the 'rights' to any firms - why not simply run them as public-owned bodies allowing the profits to remain with the Government and, hopefully, keeping the price of any future generated power to a minimum for the people... and then the Tories will have something to flog off in 10 or 20 years?
I am very suspcious about the eagerness of the Labour Government over the past 10 years to outsource endlessly to firms - and to foreign owned firms at that.
Why?
The "Cadbury's Law" sounds much along the lines of the rise of protectionism that you blogged about a few weeks back Paul, when Governments begin to realise that ultra-low interest rates and hundreds of billions of QE are not enough to protect their economies from low-wage workers elsewhere in the World.
Bit slow these Government folks! Most of us could see where this was going years back.
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Comment number 4.
At 10th Apr 2010, DebtJuggler wrote:Stable-door-locked-after-the-horse-has-bolted...and of course, the horse was called Shergar!
Britain is dead....England slowly dies.
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Comment number 5.
At 10th Apr 2010, stevie wrote:do what the French do....block the ports, country at standstill, govt panics, petrol price lowered...job done..
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Comment number 6.
At 10th Apr 2010, barriesingleton wrote:EULOGY (#3)
Do I remember UK has to put any contract, over £x, out to tender across the whole EU?
Lisbon Blues: "Woke up this morning - damn."
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Comment number 7.
At 10th Apr 2010, stayingcool wrote:What a load of tripe
There is no prioritising of 'national interest' in these pathetic little moves
which are designed to make Mandelson look like a 'man of the people (vomit)
and to make the UNITE/New Labour stitch together stitch up look people friendly too
(Have you seen how many UNITE members are standing as Labour candidates?
I guess the controllers want something back for putting all that rank and file money in to support New Labour. Like a safe seat or fifty)
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Comment number 8.
At 11th Apr 2010, stayingcool wrote:I did not mean to sound anti-union but anti the compromises that UNITE has made, anti its failure to criticise New Labour neoliberal policies, to defend its own members or to face up to the foreign worker issues affecting them, in order to have New Labour sit on its lap
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Comment number 9.
At 12th Apr 2010, JunkkMale wrote:"It might give rise to capricious decision-making and it can lead to a loss of transparency "
Wouldn't what that in the head offices of the land. Or, for that matter, in business either. Oh no.
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Comment number 10.
At 12th Apr 2010, spywednesday wrote:This law is a joke right? Certainly I can understand wanting to protect national interests (and previous comments on energy are especially pertinent here), but making this case for companies like Cadbury makes no sense. As soon as a "British" company is traded on the stock market it has pretty much ceased to be British anyway. And it is at this point that the government/nation has lost all rights to protect it. Companies may look superficially British, but are in fact majority-owned by foreign investors, huge multinational investment groups and assorted hedge funds. Not only is it difficult to decide whether a company is British or not, it can be damn near impossible to ascribe it any nationality whatsoever.
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Comment number 11.
At 12th Apr 2010, Jim wrote:To the PM; "A bit late mate" as I see it.....taxpayer's money went to Northern Rock...Northern Rock loaned Kraft a few bob to buy Cadburys; kraft promised the Cadbury workers job security...and the Business minister stated he supported British businesses and the PM declared: "British Jobs for British Workers". Am I missing something here or are these politicians blind?
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Comment number 12.
At 13th May 2010, Jon wrote:Its the problem of a party thats had 13 years in goverment, whenevere they say were goingto this next , people always cry....
"Why did you do that 13 years ago!"
Is it me or do politicans act and create new based upon what we needed to do 6 months ago?
A classic case of bolting the door after the horses has bolted
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