Takeover rules must change says Nick Clegg

8.37.00am BST (GMT +0100) Tue 6th Apr 2010

Takeovers must change following Kraft's takeover of Cadbury to ensure that they serve the UK economy, Liberal Democrat Leader Nick Clegg has announced.

The rules governing corporate takeovers must change following Kraft's takeover of Cadbury to ensure that they serve the UK economy, Liberal Democrat Leader Nick Clegg has announced.

Launching 'Enterprise in a Fair Society', Nick Clegg set out details of the Liberal Democrats' manifesto pledges for business. The proposals include:

• Restoring a public interest test for regulatory authorities to consider when takeovers are proposed and changing the rules on which shareholders can vote on takeover proposals

• Ensuring affordable access to credit for businesses by creating new mechanisms to provide equity finance to smaller businesses

• Incorporating a 'sunset' clause into every new business regulation so that it is time limited unless renewed by Parliament

The document also sets out how the Liberal Democrats would create an education system that provides skilled workers, a stable economy that reduces the public deficit and a fair and stable tax platform on which businesses can operate.

Liberal Democrat Leader Nick Clegg launched the document while visiting start-up businesses in Warrington and said:

"For too long, Labour and Conservative governments have focused solely on the firms in one square mile in the City of London, while failing to support businesses across the country."

"The Government has failed to force the banks to lend to viable British businesses and won't face up to the need to break up the big banks to protect the economy. Who would have thought that when the taxpayer stepped in to rescue the banks, we would now be funding takeovers like that of Cadbury by Kraft?"

"The Liberal Democrats will stand up for strong British businesses by changing the takeover rules to protect them from the short-term speculation of hedge funds and restoring a public interest test."

Dave Radcliffe, Lib Dem Parliamentary Spokesman for Birmingham Selly Oak, said:

"It has been an absolute scandal that the banks that we helped bail out, have helped the take-over of Cadbury, a much-loved Birmingham company."

"More needs to be done to make sure our British firms are protected and that decisions are made for the benefit of local people. The Liberal Democrats have set out ways we will not pander to short-term shareholders trying to make a quick buck, but protect what's important."

Liberal Democrat Shadow Business Secretary John Thurso said:

"Following the banking collapse and the worst recession since the 1930s, the Liberal Democrats want to rebuild the economy very differently. "We will create the conditions for a thriving, balanced and environmentally sustainable economy with jobs that last."

"Britain depends on successful profitable businesses to create the nation's wealth. Only the Liberal Democrats will give businesses the tools to get on with the job."