Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Sewel: I thank the noble Lord for a measured and constructive contribution to the debate. I associate myself and these Benches with his remarks about the late chief executive of Shetland Islands Council, Mr. Malcolm Green.

17 Nov 1997 : Column 432

I believe we both recognise that it is perplexing that the spill triggered the investigation, only for the results of the investigation to indicate that the contamination was not caused by the oil that was spilt but by some other factor. Clearly, the most careful examination is required, if at all possible to identify the source of that contamination. I understand that because it lacks the North Sea markers, and particularly the Captain crude markers, it is likely to have been of Middle East origin; however, that is only a likelihood at present. Whether it is the result of some earlier flushing of tanks, I am not in a position to say. The noble Lord is right to draw our attention specifically to that issue and to the fact that we need to resolve it.

I can rise to the noble Lord's challenge. The figure is 440 square miles.

The noble Lord also mentioned compensation. As he well knows, our approach is based on the principle that the polluter pays and it is traced back to the polluter. Until recently, Texaco was standing in that position. There will now have to be an attempt to identify the source of the oil that is causing the contamination. I suspect that it will be a difficult job. Nevertheless, our scientists will attempt to identify the source and make the information available.

The noble Lord asked what had been found in the nephrops population and the status of the contamination there. I can assure him that full results will be published, following tests from the three samples. It is a perplexing case, as I recognise. The Government have had to act on the basis of the precautionary principle to ensure that public health is safeguarded. I hope that that is recognised. I commend the order.

On Question, Motion agreed to.

Baroness Farrington of Ribbleton: My Lords, I beg to move that the House do now adjourn during pleasure until 8.30.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 7.51 to 8.30 p.m.]

Competition Bill [H.L.]

House again in Committee.

Clause 37 [The appropriate level of a penalty]:

Lord Haskel moved Amendment No. 160:

Page 19, line 1, leave out ("a tribunal or the court") and insert ("an appeal tribunal or the appropriate court").

The noble Lord said: In moving Amendment No. 160, I shall speak also to Amendments Nos. 161 and 162.

Amendments Nos. 160 to 162 are required following a change made in response to the consultation process that appeals on points of law and level of penalty should go directly from the appeal tribunal of the competition commission to the Court of Appeal.

Under the general definition of the term "court" in Clause 57, the court referred to in Clause 37 is the High Court which will not have any role in appeals on the level of penalty. The amendments also make clear that it

17 Nov 1997 : Column 433

is only appeal tribunals of the competition commission, rather than tribunals in general, which will be involved in appeals on the level of penalty. I beg to move.

On Question, amendment agreed to.

Lord Haskel moved Amendment No. 161:

Page 19, line 6, leave out ("a tribunal or court") and insert ("an appeal tribunal or the appropriate court").

On Question, amendment agreed to.

Lord Haskel moved Amendment No. 162:

Page 19, line 8, at end insert--
("(9) In subsections (7) and (8) "the appropriate court" means--
(a) in relation to England and Wales, the Court of Appeal;
(b) in relation to Scotland, the Court of Session;
(c) in relation to Northern Ireland, the Court of Appeal in Northern Ireland.").

On Question, amendment agreed to.

Clause 37, as amended, agreed to.

Clause 38 [Limited immunity for small agreements]:

Lord Lucas moved Amendment No. 163:

Page 19, line 16, at end insert ("but not less than £50 million in respect of Part I and not less that £100 million in respect of Part II").

The noble Lord said: In moving Amendment No. 163, I shall speak also to Amendment No. 166. Both amendments deal with the same point; that is, the level of turnover at which these clauses kick in. It is particularly important that it should be set at a substantial and significant level.

The Bill is drawn, quite rightly, in a way which allows it to operate flexibly against all sorts of possible breaches of the intention of the legislation. But that generates, in the minds of people who may be subject to it--particularly companies--a degree of uncertainty as to whether or not they are caught by it.

It is unreasonable that small companies which do not have the administrative structure to deal with this sort of problem should be caught by this legislation. After all, the likelihood of their being involved in serious ill to their fellow man along the lines of competition misbehaviour is extremely unlikely.

The figures in the amendment are of no particular significance. They were inserted because I did not know what definition of "turnover" the Government had in mind. If they are thinking of turnover within the UK, possibly the figures may be too high; if they are thinking of global turnover, then they are not. I beg to move.

Lord Haskel: The noble Lord, Lord Lucas, raises an important point.

Before dealing specifically with the amendments, the Committee may find it helpful for me to point out that both Clause 38 and Clause 39 provide that the criteria for defining "small agreements" and "conduct of minor significance"--and hence of determining to which small and medium enterprises the limited immunity from penalties is to apply--may, in particular, include turnover and market share. A market share limit might be more appropriate for targeting regulatory resources to where there is most competition concern.

17 Nov 1997 : Column 434

Such an approach is not without merit, but it does not deal effectively with the concern voiced by the noble Lord, Lord Lucas, about the burden on small and medium enterprises. Moreover, the definition of a market, and hence calculation of market share, may give rise to uncertainty and therefore may provide less comfort to business than a straight turnover test.

The Committee will be interested to know that the Government's preliminary conclusion, subject to consultation at the time on the detail of the secondary legislation, is that it would be appropriate to set the limits in both Clauses 38 and 39 by reference to turnover. I can also confirm, as has already been made clear, that our intention is that the turnover should relate to the UK only. However, we thought it wise to draft the Bill to allow a market share limit as an alternative or in addition to a turnover limit or indeed any other criteria, and to enable turnover to be defined by secondary legislation.

Amendments Nos. 163 and 166 raise two issues. First, whether the Bill should itself specify minimum figures for defining turnover, or whether the figures should be left entirely to secondary legislation; secondly, what figures should be set. On the first issue there is of course the point that whatever monetary figure we might prescribe on the face of the Bill would be overtaken by events in the real world. But I would not wish to rest my case solely on pointing out the possibility of price inflation.

More fundamentally, we will need to see how this new competition regime works in practice. It may be that whatever figures are prescribed in secondary legislation will need to be adjusted as lessons are learnt and as the new regime beds down. What the Bill needs to provide is a flexible system for enabling the Government to deal with developments, rather than imposing limits on the face of the Bill. Nevertheless--to come on to the second issue raised by the noble Lord-- I recognise that the Committee is entitled to know what the Government's present thinking is on those figures.

When Members opposite were in government they suggested in their 1989 White Paper, which proposed a prohibition based on Article 85, a de minimis level of a mere £5 million. Later they issued a consultation document which sought views on a figure of £20 million. The Government's compliance cost assessment for this Bill was based on the assumption that the figure in respect of both agreements and conduct would be £20 million.

We are of course sensitive to the concerns expressed both inside and outside your Lordships' Chamber. The Government have listened and our present view is that the figure for small agreements and conduct of minor significance should be turnover between £20 million and £50 million. In the case of agreements, the turnover is of course the combined turnover of the parties.

I am not able to give Members of the Committee a more precise figure now, not least because we will need to take a judgment nearer the time and will of course wish to consult on the detailed provisions with interested parties. I recognise that even the upper limit I announced is significantly lower than the figures the noble Lord

17 Nov 1997 : Column 435

proposed, especially as regards conduct, though he indicated that we should not attach too much significance to his figures. Nevertheless, the Government have listened to the concerns that have been raised. In the light of that explanation, I hope that the noble Lord will be prepared to consider my words and not press his amendment.

Next Section Back to Table of Contents Lords Hansard Home Page