June 2009
Dear C Harris
Thank you for your 8 April e mail to the Department's Freedom of Information Unit. You refer to recent Parliamentary reply Gareth Thomas gave to a question about the 31 October 2008 decision to clear the merger between HBOS and Lloyds TSB. You ask for additional details about what information relevant to that decision has been withheld from publication. I have been asked to reply. I apologise for the delay in responding.
As Mr Thomas's Parliamentary reply sought to make clear, the Enterprise Act 2002 includes a number of specific provisions requiring that information relevant to decisions taken under the Act should be published. The Act also provides that information may be withheld from publication where this is demonstrably necessary to protect legitimate interests. This is necessary since investigations under the Enterprise Act necessarily involve the competition authorities obtaining detailed information from relevant parties in order to enable them to make properly informed decisions. To enable such information to be shared freely with the competition authorities, there must be appropriate safeguards in place that enable sensitive information to be protected from disclosure where necessary. Whenever a competition authority (or the Secretary of State) publishes a decision under the Enterprise Act, it must, therefore, consider whether any relevant information should be protected from disclosure. At all times, the presumption is strongly in favour of disclosure with only the very minimum amount of information being withheld.
You ask for an assessment of the proportion of information relevant to the decision on the Lloyds/HBOS merger that has been published relative to that which has not. You also ask if any information might be filtered from the unreleased body of information. These requests appear based on an assumption that an entire batch of documents has been withheld from publication. In fact, in most cases, what will happen is that a relevant document will be published but specific items of information will be removed or blacked out. Where such redactions are made, the fact that there is missing text will be identified clearly on the face of the document. In this case, two of the documents that contain information relevant to the decision were withheld in their entirety. These were (i) a letter from the Financial Services Authority to the Bank of England providing views on the then financial situation of HBOS and (ii) a note produced by HM Treasury setting out their views on the case for intervening in the a public interest intervention in respect of the merger. We did not consider it sensible to publish redacted versions of these particular two documents since 100% of the substantive text needed to be redacted. This would have rendered them of no practical use to the reader. All the other documents relevant to the decision have been published - albeit some with certain information redacted as necessary. Having reviewed the matter, we remain satisfied that the redactions we made were the minimum necessary and that we have published the fullest possible information about the reasons for the decision.
You asked where the published information can be found. The Department's website contains 4 separate documents at the following link: http://www.berr.gov.uk/whatwedo/businesslaw/competition/mergers/public-interest/financial-stability/index.html These include the Office of Fair Trading' report into the merger and the Secretary of State's final decisions; the OFT's report also attaches the vast majority of the responses it received to its consultation. The Competition Appeals Tribunal website has also published significant information relating to the Secretary of State's defence of his decisions against the appeal brought about by the Merger Action Group in December 2008 at the following link: http://www.catribunal.org.uk/238-3402/1107-4-10-08-Merger-Action-Group.html This includes a summary of the parties applications to the Tribunal, transcripts of the proceedings and the final judgement.
You also ask about the specific reasons for not releasing information. I can confirm that the reasons for withholding information were a combination of the need to protect (i) the public interest as it relates to ensuring the stability of the UK financial system and (ii) legitimate business interests. Most of the information that was withheld could be considered capable of causing harm to both of those interests. It would not appear feasible or helpful to try to identify the relative extent to which those two interests applied to each item of relevant information.
I hope that you find the above useful.
Regards
Paul Bannister
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C Harris
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