Enterprise Bill

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Miss Johnson: I support the intention behind the amendment–to improve the consistency of approach in the use of stop now orders. The amendment is designed, as the hon. Gentleman explained, to achieve two objectives. The first is to give the OFT a duty to issue guidance, but it is unnecessary because it already has a duty to issue guidance on stop now orders under the Stop Now Orders Regulations 2001–I appreciate that they are not before us today–and under clause 220, which places it under a duty to issue guidance on the corresponding provisions in part 8. The OFT issued interim draft guidance on stop now orders last year and, after extensive consultation, the final version was published last week. Copies have been made available to members of the Committee.

Secondly, the amendment is designed to place a duty on the OFT to ensure that stop now orders are used consistently. We want enforcers to use the powers in the regulations and part 8 of the Bill consistently. The OFT guidance has the aim of promoting consistency and, to prevent duplicate proceedings, it can direct that enforcers other than community enforcers may not take a case to court if another enforcer is already doing so.

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The OFT does not, however, have a general power to direct the activities of trading standards departments, which are, as the hon. Gentleman would accept, obviously part of local authorities. We do not believe it appropriate for the OFT to have such a power in that regard. We expect the OFT to do all it can to support and encourage the consistent use of these powers, but it is not right to place it under a duty to ensure that. For the reasons I explained, it does not have the power to do so.

I hope that the hon. Gentleman will accept that we support his intention and that much of what he wants the amendment to achieve will be achieved by the Bill and existing regulations. I am hoping to persuade him to withdraw the amendment. If not, I encourage the Committee to oppose it.

Mr. Waterson: I am grateful for the Under-Secretary's explanation. I am delighted to hear that the Government have broadly the same intention, so I accept that a formal amendment is unnecessary. We have now received the stop now orders guidance, which helpfully came out on the day of Second Reading. We are continuing to get our heads round it, but it seems likely that the OFT will pursue some attempts to achieve consistency, whether by holding seminars, issuing press releases or generally keeping in touch with trading standards departments or the Trading Standards Institute, which would also have a role.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Waterson: I beg to move amendment No. 15, in page 3, line 32, at end insert–

    '(3) Any such proposals, information and/or advice made or given to a Minister of the Crown or other public authority shall be published.'.

The Chairman: With this it will be convenient to consider amendment No. 16, in page 3, line 32, at end insert–

    '(4) A Minister of the Crown who receives any such proposals or advice shall deliver (and publish) a reasoned response to such proposals or advice within 6 weeks of receipt thereof.'.

Mr. Waterson: These amendments have a little more meat to them. Clause 7 contains important provisions that empower the OFT to make proposals and give information or advice to Ministers of the Crown or other public authorities. It is difficult to argue against there being a formal interface between the OFT and other bodies. We have heard already about its potential relationship with the Serious Fraud Office, but I hope that there will be slightly less colourful relationships. In the interests of transparency, about which the Under-Secretary has spoken several times, we believed that there should be an attempt to make the process as open as possible, which is why any such advice or information should be published. The hon. Lady may say that there are subjects that are too confidential to be published, in which case I would be more than happy to withdraw the amendment if the Government come back with a more suitable one of their own.

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Furthermore, it seemed to us that a Minister who receives a proposal or some advice from the OFT should be obliged to respond within a reasonable amount of time. We would not want a one-way street in which, after careful consideration that is possibly based on a lengthy and extensive investigation, the OFT could come out with proposals or advice that were simply filed away and not pursued. It is important that, as far as possible, such matters are in the public domain and amendment No. 16 would ensure that a response was made to such advice or proposals within six weeks.

I am not dogmatic about the time period. It may seem a short time in some reaches of the civil service and we could make it longer, or perhaps shorter. However, a requirement on the Minister to produce a reasoned response is important, and although it may not be clear from the amendments, it is implicit that any such response to a proposal, advice or information should also be published. I imagine that such proposals, advice or information would be few and far between, but for that reason, they would probably be important to matters of more general significance to the OFT in the carrying out of its various functions.

On that basis, I commend both amendments to the Committee. They are eminently practical, but I will be happy if the Under-Secretary can improve on them in the way that I have suggested.

Miss Johnson: The amendments would ensure that all the proposals, information and/or advice to Ministers from the OFT are published and that any Minister of the Crown who receives proposals or advice from the OFT should deliver and publish a reasoned response within, as the hon. Gentleman said, six weeks of receipt. I fear that I am not on the same wavelength as the hon. Gentleman on this, because publication of such material would not always be appropriate and, in fact, could harm individual and business interests in some circumstances. It would also not always be appropriate or necessary for the Government to publish a response to each piece of advice or proposal from the OFT. Our intention is that the OFT should advise where laws and regulations create barriers to entry to markets and competition, or channel markets in a particular direction, thereby holding back innovation and progress.

The Government have made a commitment in the competition White Paper to publish a response within 90 days of receiving a report. However, the amendment goes beyond that. It is inflexible and unnecessary; it might harm individual and business interests if we were committed to such wholesale publication. I therefore urge the hon. Gentleman to withdraw the amendment.

Mr. Waterson: I am sorry that the amendments have not found more favour with the Minister. However, we have bigger fish to fry, so I am happy to beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 7 ordered to stand part of the Bill.

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Clause 8

Promoting good consumer practice

Question proposed, That the clause stand part of the Bill.

Miss Johnson: The clause sets out the OFT's function to encourage and approve codes of practice produced by a variety of bodies. It sets out the OFT's powers to implement the new codes of practice regime to make it easier for consumers to identify reliable traders, give formal approval to good business-to-consumer codes and encourage such codes. The OFT will be able to oversee the operation of approved codes, withdraw approval from codes that are not operating satisfactorily, and signify approval of codes in any manner that it sees fit, including the creation of a logo and authorisation of sponsors and their members to use it. That will help consumers to recognise approved codes.

It is intended that adherence to a code of practice should ensure good practice by business when dealing with consumers. Only codes that regulate the conduct of members will be approved. For example, a code may contain a redress mechanism or a complaints procedure. A code might also include sector-specific criteria. The OFT will be able to encourage the making and use of such codes of practice that it considers will safeguard and promote the interests of consumers.

The clause clarifies the OFT's powers. It was uncertain whether such powers existed under the Fair Trading Act 1973, which is to be repealed by schedule 26, because that legislation was stated in very general terms. The new regime attempts to build on it and will benefit consumers and business alike. It will make it easier for consumers to find reliable businesses. Good codes of practice are sometimes more effective at solving consumers' problems than recourse to law. Businesses will gain a marketing advantage from OFT approval. It will also help good businesses to distinguish themselves from rogues.

Self-regulation can be a viable alternative to statutory regulation. It is sometimes better for protecting consumers, as legislation can be inflexible and difficult to change. Codes, however, can be changed quickly in response to new unfair business practices that are detrimental to consumers. Regulation can impose unnecessary bureaucracy and additional costs upon business, with the knock-on effect for consumers of increased prices.

With an effective marketing campaign on the value of codes, we believe that businesses in most sectors will want to sign up to approved codes, or to set up codes where they do not exist. We want to enable the widest possible range of businesses to join, including small local firms. The provision will, therefore, allow a range of organisations to be code sponsors, such as local authorities, chambers of commerce, registered charities and the promoters or landlords of shopping centres. Businesses will not have to belong to a trade association to gain the right to use a logo. That will make it easier for small businesses to find a suitable point of entry.

It is time for a new, effective codes of practice

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regime that benefits both consumers and business. I therefore commend the clause to the Committee.

 
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