City: Slapped down

POOR Sir Bryan Carsberg. With little more than six months under his belt as Director-General of Fair Trading, he has twice had his advice on whether to refer a takeover to the Monopolies and Mergers Commission rejected by Michael Heseltine, the President of the Board of Trade. If that's not a slap in the face, I don't know what is. It used to happen all the time when Lord Cockfield was secretary of state for trade, and a bad thing it was, too. It gave the impression that mergers policy was dictated not by impartial competition criteria but by political whim and favour. Since then, ministers have tended to follow the Office of Fair Trading's recommendations. In the last 20 years, the Government has overridden the director-general's advice on only 11 occasions, and many of these were during Lord Cockfield's eclectic reign. Now the bad old ways seem to be back.

The latest example is Airtours' pounds 225m bid for its package holiday rival, Owners Abroad. By overruling Sir Bryan, Mr Heseltine has almost certainly delivered Owners Abroad into Airtours' hands. The takeover battle is not yet over, but provided Airtours is prepared to raise its offer a bit, it should win comfortably. Admittedly, this was a difficult case for Mr Heseltine. Even Sir Bryan, who recommended that the bid be referred, would no doubt concede the issues were finely balanced. The decision could as easily have gone one way as the other. Though the takeover will give Airtours more than the 25 per cent market share technically regarded as the benchmark for a monopoly, barriers to entry in this business seem to be minimal and there is already, in the shape of Thomson, one operator with more than 30 per cent of the market.

I actually agree with Mr Heseltine's view that the takeover is unlikely to be damaging to competition in the package holiday market, but his decision to go against the OFT's advice is still hard to understand. Why bother? What's in it for him? All it's done is bring about unnecessary controversy. If there were great policy issues of public interest involved it might be easier to comprehend, but there are not. This is only a tinpot little bid in the package holiday sector.

It's hardly surprising that in these circumstances, accusations of improper political influence are beginning to fly. The minister who would normally have taken the decision is Neil Hamilton, who holds the consumer and corporate affairs portfolio at the DTI. It just so happens that one of his constituents is David Crossland, the wealthy Lancastrian who runs Airtours. Mr Crossland assures me he has never met Mr Hamilton in his life. Nor has he ever given money to the Tory Party.

The DTI likewise claims that this is a 'non story' and certainly refuses to countenance any form of independent inquiry into the episode. Owners Abroad could seek a judicial review, I guess, but shareholders are hardly going to thank it for that. And in any case, I dare say that all Owners would discover is that this is just another example of cack-handedness by the DTI and Mr Heseltine; no conspiracy, no corruption. Mr Heseltine might be made to look stupid and politically inept but, unfortunately some might say, there's no law against that.

Start your day with The Independent, sign up for daily news emails
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine