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Lord Stanley of Alderley moved Amendment No. 272:


Page 84, line 17, at end insert--
("(6) In Schedule 7, Part II (which lists goods and services partly excluded from monopoly references), omit paragraph 12 (potatoes to which no process of manufacturer (other than dressing or dyeing) has been applied.").

The noble Lord said: This is a technical amendment, or at least I believe it is. The intention behind it is to ensure that the potato industry, as mentioned in Schedule 7 to Part II of the Fair Trading Act 1973, is open to the same level of competition as other parts of the agriculture industry.

As I understand it, the Director General of Fair Trading does not have the power to intervene with any non-competitive action under the 1973 Act in the case of the potato industry whereas he does, for instance, in the milk industry. It may be that most cases of possible non-competitive action would be subject to this Bill. However, it seems to me to be inconsistent to exempt the potato industry from the 1973 Act by itself and it could lead to misunderstanding and possible litigation.

I have a sneaking feeling that that inconsistency may have been aided and abetted by an amendment which the Minister's present Chief Whip and I moved during the passage of the Agriculture Act, for which I apologise profusely and also, I hope, on behalf of the noble Lord, Lord Carter. I beg to move.

Lord Simon of Highbury: I have been waiting for some help from my Chief Whip but I see that he is nobly on his Bench. I thank the noble Lord, Lord Stanley, for highlighting the treatment of certain forms of supply of potatoes under the Fair Trading Act. I agree that this treatment should be reviewed in the light of the fact that the potato marketing scheme has now been revoked. I will therefore reflect further on the position in conjunction with relevant ministerial colleagues.

There are already powers in the Fair Trading Act itself to remove the limitation on the director making monopoly references by secondary legislation. If it is to be removed, use of such power would be more appropriate than an express removal on the face of the Bill.

Of course, the Bill will introduce new powers to tackle anti-competitive practices; for example, if a potato seed grower were dominant and was abusing such a position it could be dealt with under the Chapter II prohibition. In addition, the Chapter I prohibition could apply to anti-competitive agreements in the potato sector. However, in applying the Chapter I prohibition, account would have to be taken of any exclusion which the Government might bring forward following the discussion of the amendment tabled by the noble Lord, Lord Stanley, on the first Committee day. As I said on 13th November, there is a good case for providing an exclusion based on EC Regulation 26/62. I also said that I would consider the matter between Committee and Report. That consideration will need to include whether or not to allow the exclusion to be brought to an end in individual cases if there were good reason to do so. Finally, of course the current special treatment of potatoes under the Fair Trading Act does not prevent a monopoly

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reference being made by relevant Ministers. I therefore invite the noble Lord, Lord Stanley, to withdraw his amendment.

Lord Stanley of Alderley: Yes, but not quite, in so far as I still think that paragraph 12 should be omitted in common with other provisions in the 1973 Act: otherwise we shall have confusion. If the noble Lord, Lord Renton, were here, I know that he would quote what I call his "rule" which is that if one matter is removed--I refer to the 1981 Act when we removed certain birds from the provisions--it is assumed that the others stay in.

Therefore, I very much hope that the Minister will recognise that the position with regard to the 1973 Act should be regularised. I hope that he will do that by statutory instrument. Indeed, I gathered from his remarks that that is what he will do. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Simon of Highbury moved Amendments Nos. 272A to 272E:


Page 84, line 34, leave out ("19(2)(a)") and insert ("20(2)(a)").
Page 85, line 38, leave out ("paragraph (d)") and insert ("paragraphs (d) and (e)").
Page 85, line 40, leave out ("(p)") and insert ("(q)").
Page 85, line 41, leave out ("(q)") and insert ("(r)").
Page 86, line 46, at end insert--

("The Financial Services Act 1986 (c.60)

. In Schedule 11 to the Financial Services Act 1986, in paragraph 12--
(a) in sub-paragraph (1), omit "126";
(b) omit sub-paragraph (2).").

On Question, amendments agreed to.

[Amendment No. 272F not moved.]

Lord Simon of Highbury moved Amendment No. 272G:


Page 88, line 20, leave out ("(6)") and insert ("(7)").

On Question, amendment agreed to.

Schedule 12, as amended, agreed to.

Schedule 13 [Transitional Provisions and Savings]:

Lord Graham of Edmonton moved Amendment No. 272H:


Page 90, line 13, at end insert--
("( ) On the commencement date continuing proceedings under the RPA shall automatically be discontinued").

The noble Lord said: In moving this amendment, I should like to speak also to the other amendments grouped with it. As colleagues will see, these relate to the interests of community pharmacists. At an earlier

25 Nov 1997 : Column 979

stage I spoke about the problems presented by the Bill. Although the matters that I raise now are not directly related to those problems, they still affect their interests.

I deal now with paragraphs 5, 8 and 9 of Schedule 13 relating to continuing proceedings. The purpose of this group of amendments is to ensure that the Bill minimises the risk of a community pharmacy facing the double jeopardy of both court proceedings under the Resale Prices Act 1976 (RPA) and proceedings soon after under the new competition regime to be established by this Bill. I cannot believe that that is the intention if the department and Minister on reflection see that that point has validity.

The provisions in paragraphs 5, 8 and 9 of Schedule 13 allow for court proceedings initiated by the Director General of Fair Trading under the 1976 Act begun prior to the commencement date of the new Bill to be continued after it comes into force. This provision made better sense when the initial Competition Bill was drafted by the previous administration, as it was then anticipated that proceedings in the Restrictive Practices Court would be well under way by the time this House considered proposals for a new competition regime.

However, the Director General of Fair Trading has not yet commenced proceedings. It now seems somewhat onerous and oppressive to require a community pharmacy to face two sets of proceedings in quick succession, one under the old regime and another at the end of the transition period under the new regime. Supporters of RPM on over-the-counter medicines would prefer, if no specific exemption for the arrangement were included in the Bill, to move straight to consideration of the matter under the new regime at the end of the five-year transition period. This would avoid the unnecessary expense of fighting two sets of proceedings, the first under the 1976 Act, which all sides in this debate recognise is out of date, and the second under the new competition regime.

The Community Pharmacy Action Group, of which Co-op Pharmacy, with 400 branches scattered throughout the country, is an integral member, will fight both cases if necessary. However, it believes that it would make better sense to concentrate its efforts on fighting to protect a viable network of community pharmacies under the new competition regime rather than under a regime which the Government have signalled they no longer support. There are also resource implications for the Government in allowing lengthy and expensive court proceedings to be carried on by the Office of Fair Trading under an Act which is said to expire the moment those proceedings end.

I hope that the Minister will look closely at these amendments. They can easily be incorporated in the Bill and will go some way to reassure community pharmacies that the Government are alive to their concerns. They also recognise the change in circumstances since the initial draft of the Bill was published; that is, the fact that court proceedings have not yet commenced.

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Within the second group are amendments directly related to the issues raised in the first group of amendments. In the preamble to the draft Competition Bill published in August 1997, the Department of Trade and Industry stated:


    "We believe the following arrangements should benefit from a transitional period of five years. These are ... agreements to the extent they relate to goods which at the time the prohibition comes into force are exempted under Section 14 of the Resale Prices Act 1976";

that is, RPM on OTC medicines.

The inclusion of an extended transition period for RPM on OTC medicines was in recognition of the fact that the arrangement had been explicitly sanctioned by the Restrictive Practices Court and had,


    "already been investigated and favourably assessed against public interest criteria".

A guaranteed five-year transition period under the new regime is essential if the community pharmacy is to adjust to changes in the current arrangements of RPM on OTC medicines. It is clear from the above statement that Ministers intend the five-year transition to be secure. However, the Bill provides the Director General of Fair Trading with the power to investigate the five-year transition period and bring it to an end prematurely. Putting this power in the hands of the director general, who has already indicated that he is not personally committed to RPM on REC medicines, only achieves the opposite of the reassurance that Ministers were clearly seeking to give.

The amendment would guarantee that the five-year transition period for RPM on OCT medicines could not be terminated early by a premature challenge from the director general.

I hope Ministers will consider the amendment favourably. The reassurance that is intended by the granting of a five-year transition will only be achieved if it is made clear that the transition period cannot be threatened. I am advised that, given the reassurance of a fixed five-year period, community pharmacies can work hand-in-hand with the Government to prepare for the challenges that lie ahead as the revolution in primary health care services continues. I beg to move.


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