Enterprise Bill

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In conclusion, I pose a question; is the threat that I have raised real? It is common knowledge in sporting circles that the European Commission is about to launch a formal investigation into the latest premier league broadcasting contract, and that the Commission favours the selling of rights by individual sports clubs, rather than collective deals. However, I believe that once the genie is out of the bottle, and individual selling becomes the norm, the fabric and structures of sport will unravel.

This is a probing amendment. I have tabled it to find out where the Government's thinking has reached on the vexed and controversial issue of competition policy and sport. However, it is non-controversial, as it leaves the discretion entirely in the hands of the Secretary of State, although it also enshrines in British law an expectation that the application of competition law to sport will be carefully handled.

12 noon

Mr. Field: Tempting though it is to lead this matter to a Division, and thereby to end a highly respected young political career, I am unsure whether we would support the idea that sport should be included in the list. Although I—like the hon. Member for Leigh (Andy Burnham)—am a keen sports fan, I do not think that sport should be seen as closely associated with national security unless the list is made much more exhaustive. However, I do not know whether the Under-Secretary has any thoughts on other areas that might be included.

Miss Johnson: It is nice of the hon. Gentleman to give my hon. Friend the Member for Leigh a sporting chance, but I am sure that he does not need that.

It might be helpful to my hon. Friend if I set out the role of the Secretary of State in public interest issues. Markets will be referred only on competition grounds. They have not previously been referred only on competition grounds, as he is aware. There is no scope in the new regime for a market to be referred for any other reason. The purpose of the public interest provisions in relation to market investigations is to ensure that the Secretary of State can review the remedies that the Competition Commission might impose.

We believe that, in general, the Competition Commission should address the competition problems that it identifies in the course of a market investigation. Addressing competition problems will drive improvements in the market; it will benefit businesses and consumers. When considering remedies to any adverse effects on competition, the Competition Commission will be able to have regard to the relevant customer benefits, which include increased quality and choice—I reassure my hon. Friend about that.

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Therefore, we do not believe that anything further is required to safeguard the particular interests of sport, and I do not think that it would be appropriate to specify that topic in the legislation as a public interest consideration—or to go down the path suggested by the hon. Member for Cities of London and Westminster, who is tempting me to add other things to the list. The Competition Commission can and already does take into account the special characteristics of sporting markets, but they are as much about the big-business broadcasting and entertainment markets as they are about sport. It would not be desirable to set a precedent by treating those sectors differently under competition policy. Other sectors would also make claims to be treated as special cases—as the hon. Gentleman's suggestion indicates—and that might go on for some time.

This legislation and the Competition Act 1998 replace the provisions on restrictive practices. In market investigations, there is no duty to refer. Where the reference is made, the Competition Commission can take account of customer benefits, including quality.

I hope that that reassures my hon. Friend, and that he will not press his amendment to a vote.

Andy Burnham: I thank the Under-Secretary for that reply. I am reassured by her explanation that the Secretary of State retains the discretion to intervene if important public interest issues are at stake. I agree with her that such cases are often brought against sports leagues primarily because the regulators are trying to influence and shape the broadcasting industry. However, sport is often the vehicle for that, and it is sport structures that may suffer when regulators try to achieve that goal.

The unravelling and breakdown of a broadcasting deal can have a disastrous impact on sport, as we have seen with the collapse of ITV Digital, which will undoubtedly have an effect on football league clubs. I have had some assurance from the Under-Secretary that if sport is ever the subject of investigation by the competition authorities, it will be given a sympathetic hearing. I therefore beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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

Mr. Waterson: I congratulate the hon. Member for Leigh on developing his arguments so carefully, as befits a former special advisor at the Department for Culture, Media and Sport. He has done us all a service because he has reminded us of the dangers lurking in subsection (3). However, we have already debated that subject, so I shall cut to the chase.

At the moment, when we consider the so-called public interest, we are concerned only with "national security" and we are reminded that we must fall back on the European definition of "public security", which is referred to in subsection (2).

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In subsection (3), the Secretary of State retains the power to

    "modify this section for the purpose of adding to, removing or amending any consideration which is for the time being specified in this section."

There is hope for the hon. Gentleman's aspirations, as it is possible under that provision for the Secretary of State to add sport. However, I suspect that there may be matters ahead of sport in the queue. If the Secretary of State is to retain the power to add to that list—a list of one—it is important that we hear more about it. If, since we last debated the matter, the Under-Secretary has come up with any ideas about what might be added to the list, we should be told, although it seems that sport has not found favour today.

My thinking is entirely in line with that of the hon. Gentleman. If other factors are going to be added to the important concept of public interest, they should appear in the Bill. We think that it is wrong that the Secretary of State should arrogate to herself the power to add to the list in future, and we tabled an amendment on the subject to an earlier clause. Let us hear what the Under-Secretary might be keen to add to the list, as she is not keen to add sport, and let us hear why she thinks that her Secretary of State should have that power to add to the list instead of having to come back to primary legislation.

Mr. Harry Barnes (North-East Derbyshire): The hon. Member for Eastbourne is correct that some of what he has said has been debated before. However, the subject has not yet been clarified. No examples or definitions have been given of what could be referred to under subsection (3). The Opposition are worried that a camel will be pushed through the eye of a needle, and that the situation will be different to that indicated.

In response to amendment No. 376, which my hon. Friend the Member for Leigh tabled, it was suggested that there might be an opening for sport to be included in the clause, but will it be included? I hope that I have correctly understood the philosopher John Locke—my hon. Friend the Member for Hemel Hempstead (Mr. McWalter) will correct me otherwise—who when speaking about secondary and primary qualities of objects said that even if all those qualities were removed, there would still be something there to which colours and other things would adhere. That was the "something I know not what". We have such a something; we do not know how it should be described. Is it to be—as feared by Opposition Members, which would be hawked by myself—something that can be used on wider grounds, or is it an exception that the Committee cannot describe or even think about? We need some understanding between the two sides. I believe that the Government intend it to be a fallback option which might be required for unknown circumstances and which needs to be in the Bill. It will not be anything of the nature suggested by the Opposition or that others would place their hopes in.

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I quoted earlier from a letter from the Secretary of State to the secretary general of the Trades Union Congress, which confirms that point. It states:

    "The system will however contain a fallback option to consider other public interest matters before a case is referred".

    That seems to satisfy the interests of the TUC, which is keen to have public interest provisions in the Bill. The letter continues:

    "although in reality the Government does not envisage that new public interest gateways will be created except in extremely rare circumstances. Our policy is for the vast majority of cases to be considered without ministerial involvement.

    I understand that mergers do have a wide impact beyond competition concerns, but the focus of our merger regime is to achieve long term economic efficiency."

The argument consistently relates to competition provisions. I have previously spoken in defence of including public interest provisions in the Bill, and we have the opportunity to do so. I have argued extensively for those provisions, and the Under-Secretary knows my position. It is a position that is strongly felt in the trade union movement and has been adopted by the TUC, as was commented on in the merger documents. Many trade unions, such as the GMB, are keen for the matter to be included in the Bill.

The Under-Secretary should be aware that I am not alone in my thinking on the issue. There is genuine concern that issues such as employment, the distribution of industry and exports should be defined in the Bill. There is an opportunity under the clause to do that, and other avenues in the Bill will allow it. Perhaps we should have a comprehensive list of sets of amendments on Report that would ensure public interest—unless Opposition Members can cite examples of some interpretation or definition that they are worried about. People like myself can be content that there are other avenues and back doors that we can use. It would be nice if it were clarified in the legislation beyond peradventure that we have in mind public interest concerns.

Mr. McWalter: I shall resist the temptation to engage in a discussion about Locke's contradictory concept of substance, but the focus on subsection (3) is useful. I agree with my hon. Friend the Member for North-East Derbyshire (Mr. Barnes), about the need for examples in this debate. In an earlier discussion, I mentioned an example of a national security issue—that of accepting products that could lead to gross degradation of the biosphere. It may be helpful for the Under-Secretary to focus her thoughts on that. In discussions about genetically modified crops and organisms, those who are of the doomsday school may be quite wrong. However, they may be right, and if they are, admitting materials that might lead to degradation of the biosphere could be regarded as quite strongly against the national interest. Those wishing to import such materials would, in a sense, be prima facie involved in breaching national security. Although we have debated this issue before, it is worth considering whether the framework of law outside the Bill can provide the type of assurances that we need about accepting something as a product.

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Other considerations are taken into account by the framework of law outside the enterprise system and culture. That applies to degradation of the biosphere.

12.15 pm

Hon. Members will be aware of ways in which competition policy is used by the American Government, who sometimes provide ways of producing products that threaten competitors in a market—banana or sugar producers, for example. Other players in the market may be threatened, not simply with having to liquidate their businesses, but with paying for the competition culture with their lives or with the prospect of curtailing forever their chance of earning a livelihood.

There are all sorts of agreements—the Lome´ convention, for example—about how we should operate with other countries and treat their work forces. However, it is incumbent on us to pay attention to the wider framework and ensure that we do not end up with a competition policy that is antithetical to our ideas about what constitutes fair competition in the world of commerce.

Miss Johnson: I have been tempted by my hon. Friends and the Opposition into debating an issue about which there has already been considerable discussion, although I appreciate hon. Members' interest and concern. Subsections (3) and (4) provide a mechanism for amending the list of public interest considerations, but at the risk of upsetting hon. Members on both sides of the political divide—perish the thought—I emphasise that the Government have no current plans to use the power to broaden the scope of the Secretary of State's role in market cases.

My hon. Friend the Member for North-East Derbyshire, in his Lockean reference, most accurately represented this issue as a thing "we know not what". Like my hon. Friend the Member for Hemel Hempstead, I have a background in philosophy, but I shall not follow up the reference any further. However, the provision is certainly necessary. We have no plans to use the power to broaden the role of the Secretary of State. The reserve power to specify new public interest considerations is a necessary safeguard to ensure that the legislation can be adjusted. That is why it appears in the Bill as it does. I cannot give hon. Members on either side of the Committee any comfort about what the thing in question might be.

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