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8.31 pm

Ross Cranston (Dudley, North): I was unable to be present for the opening speeches. I apologise to the House, to Ministers, and specifically to the shadow Secretary of State, who is in his place. I was unavoidably detained elsewhere.

I support the Bill. I shall concentrate on three aspects of it: the provisions on competition, consumer matters and insolvency. The competition aspects are very much a continuation of the Competition Act 1998, enhancing the provisions of that Act. The background in this country was one of an administrative system to deal with competition problems. Under that system, Governments sometimes actually promoted cartels, and we were not tough about promoting competition, so the 1998 Act represented a step change by, in essence, introducing to UK law articles 85 and 86 of the treaty of Rome.

The Bill will take that step change further. It will enhance the role of the OFT and take politics out of decision making to a large extent, except in certain cases, for example, those involving national security. Unfortunately, in recent decades the public perception has increasingly become that politicians cannot make disinterested decisions. I do not accept that that is true of politicians on either side of the House, but that is the perception, so taking politics out of the matter, as was done in respect of the Bank of England, should boost public confidence in the operation of competition policy.

I can deal briefly with the first specific aspect of the competition provisions, which is the criminalisation of hard cartels. I welcome that provision, which has been in operation in the United States for a century, but I doubt that it will have a great effect in practice. More important will be the second specific aspect—the damages provisions. The damages provisions of the Competition Act, whereby private persons could seek damages for losses they had suffered as a result of anti-competitive behaviour, were not especially clear cut. The hon. Member for South Cambridgeshire (Mr. Lansley) asked for empirical evidence in that respect, so here is some: to my knowledge, there have been no successful private damages claims under the 1998 Act.

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The Bill is designed to make it clear that damages can be claimed; that they can be coupled with action by, for example, the OFT; and that they can be brought before the appeals tribunal. That will have an important effect on behaviour in the market. That has certainly been the American experience. The United States has a system of treble damages—we are not adopting that specific approach—and experience there is that the threat of private action by other businesses that have been damaged by anti-competitive behaviour is a stronger incentive for businesses to behave properly than criminal penalties.

I should like my hon. Friend the Under-Secretary of State for Trade and Industry to give further consideration to the possibilities offered by representative actions, as set out in clause 17. I see that provision as an advance, but leopards, especially old ones, cannot change their spots. Although I have argued for many years for such a provision, I have gone further, saying that consumers on behalf of whom the action is to be taken should not have to be identified, Many consumers who are adversely affected by anti-competitive behaviour have no incentive to take action because the losses they suffer are extremely small. So there is an argument for someone, such as the OFT, to act as their surrogate and take action on their behalf.

As drafted, clause 17 requires that such consumers be identified, but in many cases it will not be possible to identify the whole range of consumers who are adversely affected by anti-competitive behaviour. Therefore, I want the Minister to consider the provision. Perhaps in the fulness of time, an amendment can be made to allow for the aggregation of non-identified consumers who have suffered loss as a result of anti-competitive behaviour.

One important consumer provision of the Bill appears in the competition part, in clause 8, which deals with codes of practice. That provision is an enhancement of one that has existed since 1973—in section 124 of the Fair Trading Act 1973, which was introduced by the Conservatives. Under that excellent provision, during the 1970s and early 1980s, many trade associations introduced codes of practice, which enhanced consumer protection.

The example of the Association of British Travel Agents is illustrative of what can be done in this regard. Clause 8 seeks to take the process further because it provides for approval by the OFT of the codes. It provides also for the OFT to promote the codes. Many of the codes that were drafted in the past are now little known about. For example, there are codes that apply to funeral directors and shoes. There is always a debate about self-regulation. In this context, however, when it is backed up by public monitoring by the OFT, it is to be welcomed.

As for stop now orders, the Bill seeks to go beyond the regulations that were introduced on the back of European Community directives. In the brief produced by the National Association of Citizens Advice Bureaux, it is suggested that the stop-now provision should be extended to behaviour that is not in breach of the criminal or civil law. I am not sure that the association argued in its briefing that persistent breaches of the codes might not constitute breaches of the criminal or civil law. However, they would be objectionable.

The National Consumer Council, with which I have been associated back to the mid-1970s, is arguing for a duty to trade fairly. Again, I cannot change my spots.

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I have been arguing for that duty in writing for many years. Perhaps it is not for the Bill, but it is certainly something to be taken into account. If it is taken forward, it is important that it applies only to anti-consumer behaviour. In other jurisdictions, such as that in Australia, which have a general unconscionability provision, there is a lawyers' charter. That is good for lawyers but not necessarily good for others.

I support the changes in the personal insolvency provisions. It was suggested by the hon. Member for Bury St. Edmunds (Mr. Ruffley) that these will lead to a rogues charter, with consumers racking up debt and declaring themselves bankrupt. That is not the reality. People do not consciously incur huge amounts of debt that they cannot pay. They know that if they do so they will not get credit in future. They will have a black mark against them and creditors will take that into account and not lend. A stigma attaches to bankruptcy in this country that does not operate elsewhere, and the proposed change is to be welcomed.

With the abolition of Crown preference, we are following other jurisdictions. For example, Germany has abolished it, and it is altruistic of the Government to abolish it. It is often the poor old tax collector who is paid last by a business in trouble. It will pay other traders so that it continues to receive supplies. It might even be able to pay its bank loan so that the overdraft will be continued. However, it will not pay its taxes. The abolition is magnanimous behaviour on the Government's part. As I have said, it follows a trend in other jurisdictions, and I welcome it.

Corporate insolvency is a difficult area. The Insolvency Service produced a good paper in 2000, which considered the empirical evidence. A survey was produced by the London business school. There was wide consultation and it was concluded that there was a problem in some instances of banks pulling the rug too quickly. It was found that there was precipitate action by banks when dealing with companies that could be rescued. On the whole, however, it was felt that that was a problem of the early 1990s.

The Bill tries to address the problem and it will abolish administrative receivership. The hon. Member for Bury St. Edmunds said that there would always be a court procedure, but anyone who reads the Bill will find that that is not the case. It will be possible for banks to appoint administrators out of court. Officials, Ministers and the Bill team have excelled themselves in coming up with a solution to the problem. A certain amount of tweaking still needs to be done, but they have carved out from the abolition of administrative receivership certain capital market transactions and project financings. Furthermore, as I said, there is the possibility of the banks appointing administrators out of court. The rationale is correct: we must promote the rescue culture. That issue was addressed by the hon. Member for Tiverton and Honiton (Mrs. Browning), whose point about the behaviour of administrators was right. The Bill introduces an explicit duty for them to act in the interests of creditors, but there may be room for further work in Committee in that regard.

I accept that the promotion of an enterprise culture will not be achieved by the Bill alone, as it requires a range of measures. I agree that, as has been suggested from the Opposition Benches, there is a very good case for tax simplification. Indeed, I have been working with the

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Institute for Fiscal Studies, as have hon. Members from the two main opposition parties, on how it might be better effected. Support is required for a range of other measures, such as those that my right hon. Friend the Secretary of State for Education and Skills is introducing to try to promote skills in schools and lifelong learning. Measures such as those introduced in recent years by my right hon. Friend the Chancellor of the Exchequer to promote research and development and science are also required, and we also need to promote a welfare state in which work is the primary avenue for getting people out of poverty. All those things are needed. The law can do only a certain amount, but inasmuch as the Bill makes a contribution, I welcome it.

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