Enterprise Bill

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Huw Irranca-Davies: By way of a straightforward observation, I doubt whether the hon. Gentleman would want to extend his amendment to cover aspects of local authority provision or, by logical extension, charitable provision that tackles social need where the market would usually not step in. Much regulation already defines commercial and trading activities and where the local authority or charity should keep away from filling a gap that the market could easily step in on. The worry with the amendment, and the logic of it, is that there should be an extension to the voluntary sector and that all aspects of its concern and business would then be covered. That might have the effect of deterring such bodies.

5.45 pm

Mr. Waterson: The hon. Gentleman makes a fair point, but I have two comments in response. First, the ground is shifting under us with regard to what local authorities are or are not allowed to do now or in future, and the basis on which they will be able to do things and charge for them. Secondly, all that we are setting out is the possibility of people being involved in the provisions.

At the end of the day, there still has to be evidence of anti-competitive activity and a prima facie case for a full investigation. As I said initially, it seems extremely unlikely that any of the bodies that we are talking about would get involved in such a situation. However, it would be wrong for the definition, or certainly the Under-Secretary's interpretation of it, to exclude them from an investigation if they were engaged in prima facie anti-competitive activity. As I said, her introduction of the expression ''on a commercial basis'', which is not reflected in the clause, has muddied the waters, but we have debated the issue long enough.

Dr. Cable: I am still a little baffled as to what precisely ''on a commercial basis'' means. We know that some public entities, such as the Export Credits Guarantee Department, operate on a commercial

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basis, which means covering their costs. Others, such as London Transport, also operate on a commercial basis, but have to earn a 6 per cent. return on capital. The phrase is used in a varied way in the public sector, and the precision that the Under-Secretary seeks in the clause is still not there. However, I shall not press my amendment to a vote.

Mr. Waterson: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 173 ordered to stand part of the Bill.

Clause 174 ordered to stand part of the Bill.

Clause 197

Power to modify schedule 7

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

Mr. Waterson: Again, there is an echo of something that we have debated before. We object in principle to the Secretary of State's having the power to modify by statutory instrument schedule 7. It contains some important provisions, even if they are tucked away in a schedule. We make no complaint about that, but if there are significant changes to what is set out in the schedule, due consideration should be given to them at all stages by the House. We have made a similar point before, and I do not wish to labour it, but I should like the Under-Secretary to justify why the Secretary of State should have that power.

Miss Johnson: Through the work of the Committee, we are trying to ensure that the Bill will stand the test of time. It is therefore important that the list of remedies can be amended over time to reflect market developments. One example is that we have changed the list to allow authorities to specify how information should be published. They could specify that it should be published on the internet, which is obviously a new development since 1973. There may be similar developments in future.

To reassure the hon. Gentleman, I point out that a modification requires an affirmative resolution of both Houses of Parliament. The provision is necessary, however, to provide the right degree of flexibility in the legislation to reflect changes and market developments that might take place over a considerable time.

Question put and agreed to.

Clause 197 ordered to stand part of the Bill.

Mr. Waterson: The hon. Gentleman makes a fair point, but I have two comments in response. First, the ground is shifting under us with regard to what local authorities are or are not allowed to do now or in future, and the basis on which they will be able to do things and charge for them. Secondly, all that we are setting out is the possibility of people being involved in the provisions.

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At the end of the day, there still has to be evidence of anti-competitive activity and a prima facie case for a full investigation. As I said initially, it seems extremely unlikely that any of the bodies that we are talking about would get involved in such a situation. However, it would be wrong for the definition, or certainly the Under-Secretary's interpretation of it, to exclude them from an investigation if they were engaged in prima facie anti-competitive activity. As I said, her introduction of the expression ''on a commercial basis'', which is not reflected in the clause, has muddied the waters, but we have debated the issue long enough.

Dr. Cable: I am still a little baffled as to what precisely ''on a commercial basis'' means. We know that some public entities, such as the Export Credits Guarantee Department, operate on a commercial basis, which means covering their costs. Others, such as London Transport, also operate on a commercial basis, but have to earn a 6 per cent. return on capital. The phrase is used in a varied way in the public sector, and the precision that the Under-Secretary seeks in the clause is still not there. However, I would be happy for the amendment to be withdrawn.

Mr. Waterson: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 173 ordered to stand part of the Bill.

Clause 174 ordered to stand part of the Bill.

Clause 197

Power to modify schedule 7

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

Mr. Waterson: Again, there is an echo of something that we have debated before. We object in principle to the Secretary of State having the power to modify by statutory instrument schedule 7. It contains some important provisions, even if they are tucked away in a schedule. We make no complaint about that, but if there are significant changes to what is set out in the schedule, due consideration should be given to them at all stages by the House. We have made a similar point before, and I do not wish to labour it, but I should like the Under-Secretary to justify why the Secretary of State should have that power.

Miss Johnson: Through the work of the Committee, we are trying to ensure that the Bill will stand the test of time. It is important that the list of remedies can be amended over time to reflect market developments. One example is that we have changed the list to allow authorities to specify how information should be published. They could specify that it should be published on the internet, which is obviously a new development since 1973. There may be similar developments in future.

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To reassure the hon. Gentleman, I point out that a modification requires an affirmative resolution of both Houses of Parliament. The provision is necessary, however, to provide the right degree of flexibility in the legislation to reflect changes and market developments that might take place over a considerable time.

Question put and agreed to.

Clause 197 ordered to stand part of the Bill.

Clause 199 ordered to stand part of the Bill.

Clause 175

The Competition Service

Miss Johnson: I beg to move Government amendment No. 341, in page 128, line 9, leave out 'the Competition Commission and'.

The Chairman: With this it will be convenient to take the following: Government amendments Nos. 342 and 343.

Motion to transfer clause 175.

Government amendments Nos. 345 to 352.

Motion to transfer Schedule 10.

Government amendments Nos. 355 to 369.

Government new clause 8—Annual report of Commission.

Miss Johnson: It will be helpful if I set out briefly the reasons behind the changes proposed in this group of amendments.

We have tabled the amendments with a view to guaranteeing the complete independence of the Competition Appeal Tribunal from the Competition Commission. The Government have always intended for the two to be fully independent of one another. Indeed, the Competition Commission appeals tribunal—the CAT's precursor—is part of the Competition Commission. That raises no conflict of interest at present, because the CCAT hears appeals only against the decisions of the OFT in cases under the Competition Act 1998.

We wanted the CAT to review the work of the reporting side of the Competition Commission in mergers and market cases, so we decided to separate the membership of the existing Competition Commission so that appeal panel members would be members of the separate body; the Competition Appeal Tribunal. That was why we initially proposed to create the Competition Service to act as a support body to the Competition Commission and the CAT, providing staff and services to both. However, we examined the structure further, saw that it was a little cumbersome and concluded that we should take this opportunity to amend the arrangements to separate entirely the Competition Commission from the CAT.

The Competition Service will now provide support services only to the Competition Appeal Tribunal, while staff employed directly by the Competition Commission will provide support services for it. It is for those reasons that I have tabled the amendments.

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Mr. Andrew Lansley (South Cambridgeshire): When the Under-Secretary wrote to Committee members, she said that it was impossible for the CAT directly to employ its own staff. Why is that the case? If they could, we would not need the slightly excessive process of having a Competition Service in order to have a Competition Appeal Tribunal.

 
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