Enterprise Bill

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Amendment, by leave, withdrawn.

Mr. Alexander:I beg to move amendment No. 270, in page 74, leave out lines 13 to 16.

The Chairman: With this it will be convenient to take Government amendment No. 272.

Mr. Alexander: The amendments ensure that the duty to give reasons applies to enforcement action taken under the merger and markets regime. We have provided for authorities to give reasons for decisions to ensure that there is greater transparency throughout the regime.

Amendment agreed to.

Clause 103, as amended, ordered to stand part of the Bill.

Clause 104


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

Mr. Waterson: This is a short clause, but it raises an important principle that I should like to explore. I have not tabled an amendment because my thinking was not sufficiently developed on the issue at the time. My question relates to the distinction between absolute and qualified privilege. It may take me a little time to explain.

Can the Minister explain the thinking behind the clause? I assume that we need the clause because, unlike hearings before the commission and certainly before the Competition Appeal Tribunal, we must specify that advice, guidance, notices, directions, decisions and reports should all attract absolute privilege. I assume that because it is part of general law that all court hearings and proceedings are subject to absolute privilege, so hearings that are related to the Bill will be as well. However, that is not necessarily the case, so we must specify that the matters set out in the clause attract absolute privilege. Otherwise, that would not be built into the Bill.

The question of privilege is important, but I do not want to go up the highways and byways of the matter. There are interesting issues that relate to parliamentary privilege, but I shall not deal with them here. I am sure that you would not allow me to, Mr. Beard, even if I wanted to.

Let me repeat the point: judicial and parliamentary matters, for example, are subject to absolute privilege on the basis of law that is long settled—I think by the Parliamentary Papers Act 1840, as well as by case law. There is no way in which, under any circumstances, actions for slander or libel can ever be taken against judges, council witnesses, parties and

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so on. I am assuming that that position applies to actual hearings before the commission or the Competition Appeal Tribunal. In the same way, all accurate reports of everything that we discuss here are subject to the same absolute privilege.

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My concern relates to the constant thread that has run through our debates, and no doubt will continue to do so, about the vital importance of having clear rules on the use of confidential information about companies and the individuals who work for them. Much highly sensitive commercial information moves through the processes that the Bill sets up, and quite rightly. That is the nature of the beast. The deepest secrets of companies involved in highly competitive, cut-throat competition in a particular area are likely to be involved.

I tentatively ask whether it is worth considering making that subject to absolute privilege because absolute privilege is, as the name suggests, absolute. I can say absolutely anything that I want in the course of a speech to this Committee, within the bounds of your patience, Mr. Beard, about any member of the Committee or, more importantly, anyone in the outside world. No matter how scurrilous, untrue and unfair my remarks, I could get away with them. Qualified privilege is a different animal altogether. I do not want to take too long with this, but we must set it in context. As I understand it, broadly put, with qualified privilege, the occasion itself does not necessarily grant the privilege in the same way that happens with absolute privilege in our debates.

Qualified privilege can be overturned if the plaintiff in an action proves actual malice on the part of the defendant. It says in a textbook that there are three elements to the defence of qualified privilege:

    "(1) the occasion must be fit, (2) the matter must have reference to the occasion, and (3) it must be published from right and honest motives."

Particular issues arise when matters are discussed in the forums that the Bill develops, and then are subject to extraneous statements or publicity based on what is said on a particular reference.

I think that we have already covered unfortunate publicity. I forget under which clause, but several hon. Members, in particular my hon. Friends the Members for Cities of London and Westminster (Mr. Field) and for Huntingdon, have touched on it. Unfortunate publicity often seems to attach to decisions to make references or to have dawn raids. Many of the details find their way into the media, in that mysterious way to which we have all become accustomed.

Let me say straightaway that, when it comes to qualified privilege, there is a form of public interest defence. A leading House of Lords case, Reynolds v.Times Newspapers, covers that. I need not detain the Committee with the details. If I may draw my remarks to some sort of conclusion, I am trying to suggest that if one were to stipulate qualified privilege

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for these matters and for the proceedings themselves, it would help to concentrate the minds of all involved on ensuring that things are not said or written down that are not absolutely true and germane to the issue.

Giving people absolute privilege is quite a big step to take. I am not necessarily talking about irresponsibility or even malice, which is the way to remove oneself from the protection of qualified privilege. I am talking about people being more negligent than they should be about letting things slip in a particular investigation and in the various written documents of the sort referred to in the clause. I am not entirely convinced that this is something that we need to do. That is one of the reasons why I have not tabled an amendment. However, the Committee needs to hear the Minister's thinking behind the clause. First, why is it framed in the way that it is? I think that I know the answer to that. Secondly, are we perhaps being too generous to all those involved by giving them absolute privilege behind the curtain of which things can be said that could well damage people's reputations and commercially sensitive situations?

Mr. Alexander: I will try to address both those substantive points in the order in which the hon. Gentleman raised them. First, on the thinking behind the clause, the Fair Trading Act currently provides similar protection in respect of advice, proposals and reports. The clause seeks to carry forward that protection and to update the provision to ensure that all of the functions of the authorities are appropriately covered. We are keen to allow people to be able to do their job, cognisant of the sensitivity of much of the material that is being dealt with and the commercial consequences of information entering the public domain. In that sense it is important for people to be aware of the constraints under which the authorities act, but the people who make decisions and work with the relevant authorities should be able to get on with their jobs without constantly looking over their shoulders.

On the specific point about the nature of the privilege, obviously the Competition Commission will enjoy absolute privilege in relation to the reports that it lays before Parliament. The hon. Gentleman raises an important point as to what other constraints operate upon the relevant authorities. Clearly the authorities will operate only within their functions, which have been designed to ensure transparency. We believe that the Bill achieves the necessary balance between greater transparency and the need to ensure that the appropriate safeguards are in place. That greater transparency is certainly welcomed by the business community, as is the clear certainty that the Bill will bring to the process. The authorities, therefore, are under duties in relation to their disclosure of information. That will limit their actions. We want to ensure that the information is released in the public domain by the appropriate methods and that the correct balance between the confidentiality and sensitivity of the material and transparency is achieved.

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Mr. Field: Is there not a danger that, by having the fully fledged and absolute privilege in place, there will be no incentive on the public bodies to weed out some of the confidential information that they have received from third parties? When writing reports they might damage a business that may have been subject to a whispering campaign by consumer bodies or other companies that wrote confidential or non-confidential papers that were perhaps cavalier with the truth. Indeed, there would be no reason for the OFT to avoid writing a report that included all such comments that may have been submitted in a cavalier fashion. That lack of incentive to weed out the wheat from the chaff could be extremely damaging to companies.

Mr. Alexander: I will endeavour to answer, but I fear that I will go over some ground again. The clause builds on provisions that exist in the Fair Trading Act. Both sides of the Committee would agree that we need to strike the right balance between the greater transparency that we all seek to achieve through the Bill and the appropriate and necessary degree of confidentiality, given the sensitivity of the material. We believe that privilege is necessary, consistent with what has existed for almost 30 years under the Fair Trading Act 1973—to allow the authorities to do their job, but that job is necessarily constrained by the obligations on them in respect of the work that they undertake.

Given the importance of the issue, I am sensitive to hon. Members' concerns, but I reiterate that we are drawing on the considerable experience of competition authorities in the United Kingdom. They have often proved to be capable of dealing with the sensitive material that necessarily comes into their hands. Again, we are talking not about fundamental shifts, but about updating the existing provision.

Mr. Waterson: The Minister makes a fair point about importing a provision from the 1973 Act, given that we have had almost 30 years to consider its implications. Is he aware of any situations that have arisen in that time in which the point that has been raised would have been an issue had there been qualified as opposed to absolute privilege?

Mr. Alexander: I am grateful for the hon. Gentleman's observation, because it allows me to clarify something. The clause does a number of things, but one key point, which perhaps I should have drawn out earlier, is that the existing Competition Commission reports benefit from absolute privilege, because they are laid before Parliament. That will cease under the new arrangements and so needs to be dealt with. That is part of the thinking behind the clause.

I am not aware of any situations such as the hon. Gentleman has described, although I have not yet had the opportunity to speak to ministerial colleagues who have been receiving correspondence on the matter. I am sure that, if the CBI or a range of British businesses were deeply uncomfortable about

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the operation of the Competition Commission or, indeed, the OFT, they would not hesitate to bring that to our attention.

Question put and agreed to.

Clause 104 ordered to stand part of the Bill.

Clause 105 ordered to stand part of the Bill.

Clause 106

Enforcement of powers under section 105: general

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

Mr. Djanogly: Once again, we are discussing the production of documents, and the enforcement powers latch on to that. The Bill will clearly make the commission much more forceful and powerful. As with many aspects of the Bill, we are dealing with an increase in enforcement powers and greater penalties.

It is important to appreciate that, in most situations, most companies, particularly third-party companies, that are asked to provide background information will do so voluntarily and will help the OFT or the commission with their investigations as much as they can. The fear, which I and others have expressed at various times during the Bill's progress, is that with all the new enforcement powers the process will become more formalistic. Will the powers mean that, rather than providing a better flow of information, the flow of information will dry up? Will the information that is provided be only the minimum that is requested, so that the commission's questions are not fully answered? I should be grateful if the Minister would address that concern and give some comfort to business that, when they provide information, clauses such as this will be not be used against them.

The other issue that I want to raise goes back to the question of confidential information. That has arisen at innumerable points throughout the Bill and applies also to these provisions. If companies knew that they could consent in some way to the information that was released, whether under clause 106 or other provisions, would they not be more likely to be freer with the information that they gave in the first place?

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