Stop Germans taking over Stock Exchange, urges Tory grandee

THE Business Secretary was last night urged to use little-known powers to block a German takeover of the London Stock Exchange.

The £21billion deal has come under increasing pressure from critics who warn it would be against the national interest and could destroy a 215-year-old British institution.

The LSE and Frankfurt-based partner Deutsche Boerse have defended the deal as a ‘merger of equals’.

The Government has so far refused to get involved, saying it is a matter for the Stock Exchange. But yesterday it emerged that Sajid Javid could use rarely exercised powers under the 2002 Enterprise Act to block a deal if it is not in the public interest.

One specific reason he can give for refusal is the need to protect ‘ the stability of the financial system’.

Tory backbencher Sir Bill Cash said it was essential Mr Javid acted without delay. He said: ‘This is an attempt to manoeuvre German interests to further control the financial sector across the EU. I don’t see how it can be seen to be in British national interests.

‘ The Business Secretary should look into the deal and take whatever steps are necessary in order to prevent British national interests from being subverted by German ones.’ The Treasury Select Committee is preparing to quiz Chancellor George Osborne about it on April 19. It can also hold formal hearings and order company bosses to attend.

City grandees have warned there is huge uncertainty about what would happen if the new company collapsed. Lord Myners, a former Treasury minister who has served on the board of several major companies, said he feared British taxpayers could be left to foot the bill. ‘I don’t think regulators have fully thought through how they would handle a failing central clearing house,’ he said.

Deutsche head Carsten Kengeter would take charge of the new company which would be headquartered in London. It would report profits in euros, and the Germans would have a 54.4 per cent controlling stake. Both the Bank of England and City watchdog the Financial Conduct Authority will have to give their backing before it goes ahead.

Conservative peer Lord Tebbit said Margaret Thatcher would never have allowed the London Stock Exchange to be sold. The peer, who served during her premiership as Conservative chairman, said the move was ‘against our national interest’ and designed to tie us in to the European project.

Despite assurances from the London Stock Exchange and Deutsche, there are fears that business and jobs could eventually move from London to Frankfurt – particularly if the British public votes to leave the EU.