Osborne to face MPs over LSE takeover

GEORGE Osborne is to be quizzed by MPs about the planned takeover of the London Stock Exchange by the Germans.

The Treasury Select Committee is combing through proposals to hand the 215-year-old British institution t o European r i val Deutsche Boerse.

MPs want to know if there is any risk that the new organisation could collapse – and if it does who would be responsible for rescuing the company.

It is feared that British taxpayers could be asked to pick up the bill in the event of a bailout.

The Treasury Select Committee will ask the Chancellor what threat the deal poses to the UK economy when he appears for questioning on April 19.

Conservative select committee member Mark Garnier said: ‘We want to know how he views this.

‘People are suggesting this is a takeover by the Germans and how does he see it? Does he see this as part of the EU debate?

‘Does it strengthen the City of London, weaken London or make no difference?’

Bosses at the LSE also face a grilling from MPs over the planned takeover amid speculation that business and jobs could eventually move from London to Frankfurt.

It is understood that Tory MP Andrew Tyrie, chairman of the committee, wants to look at future regulation of the exchanges.

The LSE and Deutsche insist their £21bn deal is a ‘merger of equals’ – but the new business would report profits in euros and the Germans would have a 54.4pc controlling stake. Deutsche head Carsten Kengeter would take charge of the new company, which would be headquartered in London.

The LSE’s French boss Xavier Rolet would step aside and could be in line for a £14.5m windfall from share schemes built up during his seven years at the helm.

The Mail understands the Financial Conduct Authority and Bank of England will both have to give the takeover their approval, and European regulators will also have to rubber-stamp it

There has been growing criticism of the takeover. City grandee Lord Myners has claimed British taxpayers might be left to pick up the bill if the new institution collapsed.

Conservative peer Lord Tebbit, who was party chairman under Margaret Thatcher, said the move was ‘against our national interest’. He added: ‘As a country we rely quite heavily on the financial services industry and to hand over control to a significant part of that to a foreign power is not a sensible idea.

‘I think Margaret Thatcher would have intervened at a very early stage and offered confidential guidance to the people in control of the stock exchange that this was not acceptable.’

Lord Davies, a prominent banker and former Labour trade minister, said a Government ‘public interest test’ should be applied.

‘This is a key part of our infrastructure,’ he said. ‘And whilst shareholders must have their say, as must the board, it is also necessary for the UK to ensure its infrastructure is protected.’