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The Viscount of Falkland: I thank the noble Lord for his complete and helpful response to the amendment which I moved. I am sure that his remarks will be scrutinised with great care by my noble friend Lord Ezra and he and other interested parties will no doubt consider the noble Lord's remarks and we shall return to the matter at a later stage as appropriate. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 275A not moved.]

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Lord Graham of Edmonton moved Amendment No. 276:

Page 91, line 44, at end insert ("; or
(c) any of the parties concerned have appealed to the Competition Commission within the 28 day period.").

The noble Lord said: Paragraph 10(3) of Schedule 13 gives the director general power to issue a notice terminating the transitional arrangements in respect of an agreement which the director general believes would, but for the transitional period, infringe the Chapter I prohibition. The transitional period will end in respect of that agreement on the date proposed in that notice unless the director general withdraws the notice or the Secretary of State cancels it. The date specified in the notice will be a date not earlier than 28 days after the service of the notice.

The amendment I move would suspend the operation of the director general's notice if a party to the agreement appeals to the commission, thus keeping the agreement in force and valid during the period of the appeal. I beg to move.

Lord Simon of Highbury: Schedule 13 provides for transitional periods to ensure a fair and orderly transition to the new prohibition based regime. For example, most agreements made before the Chapter I prohibition comes into effect would have a transitional exclusion from that prohibition for one year.

The purpose of paragraph 10 of the schedule is to ensure that the transitional period is not abused. As I argued in speaking to the amendments of my noble friend Lord Graham a few minutes ago, if a seriously anti-competitive agreement came to light it is not right that it should be allowed to continue unchecked. I note, incidentally, that the investigation powers in paragraph 10 do not include those of Section 27; nor do the offences provided for in Clauses 41 to 43 apply to them either. We shall need to correct those omissions at Report.

As I have said, the power to end the transitional period early is a reserve power for the director which we expect him to use only in limited, serious cases; and, as I also said, the Secretary of State has a power to veto the director's proposal to terminate the transitional period early. Amendment No. 276 would prevent the director from ending the transitional period early if any of the parties had appealed to the competition commission. I believe it is right that the Secretary of State rather than the competition commission should determine whether to over-ride the director's proposal to terminate the transitional period early. I have explained how I expect the power to be used.

However, any decision--which one might expect to follow the termination of transitional period--that the particular agreement infringed the prohibition or as to whether it merited an exemption would be appealable to the commission. This decision would be an assessment against the terms of the Chapter I prohibition. It is therefore appropriate that it should be appealable to the tribunal. The Bill provides that the rules that may be made under paragraph 13 of Schedule 8 may provide for a tribunal to suspend the effect of a decision of the

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director on an interim basis. Similarly, any interim measures under Clause 34 or directions under Clause 31 made by the director would be appealable to the competition commission.

I am satisfied that the combination of these measures provides the proper route for protecting the rights of undertakings alleged to have infringed the prohibition during the transitional period. I believe, however, that the amendment prompts a wider question relating to the expiry of the transitional period in normal circumstances, rather than in serious cases where early termination of the transitional period is at issue. I can see that there could be a case for the transitional period to be extended in cases where appeal has been made against a decision by the director--for example, an appeal against a decision to refuse an exemption. I shall review the provisions on the extension of transitional periods with a view to returning to the matter on Report. I therefore invite my noble friend to withdraw the amendment.

Lord Graham of Edmonton: I am grateful to the Minister for what he said. He is understanding and I believe that he has taken the point. In those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 13 agreed to.

Schedule 14 [Repeals and Revocations]:

Lord Simon of Highbury moved Amendment No. 276A:

Page 94, line 13, column 3, at end insert--
("Section 45")

On Question, amendment agreed to.

Schedule 14, as amended, agreed to.

Clause 71 agreed to.

Clause 72 [Short title, commencement and extent]:

Lord Fraser of Carmyllie moved Amendment No. 277:

Page 38, line 16, at end insert ("but does not extend to Scotland").

The noble and learned Lord said: This appears to be a small, innocuous amendment at the end of a long and complex Bill. However, it is clearly one of some considerable constitutional significance. When I reflect how over the summer months I worked on a referendum campaign, when the rest of the world was away with its bucket and spade, I have some temptation to hold the Committee for as long as it took me to discover some of the details of what was proposed for Scotland! However, even with the Chief Whip in his place, I shall not exercise that right too extensively. But it is our view that as we try to untangle and unravel what is proposed to be reserved, and what is to go to the Scottish parliament, every piece of legislation which comes before this House will be subjected to this separate and new form of scrutiny.

This is a particularly interesting Bill on which to start. I would accede immediately to the view that nothing was clearer in the Government's White Paper on Scotland's government than that competition law was to be reserved for Westminster. It would accordingly

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apparently follow that anyone who was in the least bit interested in where the division of future legislative or executive power lay would be able to set aside this Bill, once it is a statute, with no concern that any part of it would ever be within the powers of the Scottish parliament.

I believe--it is one of the matters with which we shall have to concern ourselves--that that happy hope will never be realised. There are extremely complicated provisions. I understand now that we shall not see the proposed Bill until at least Christmas and probably later. If the Chief Whip wishes to intervene I shall of course, as always, give way to someone of such a high and mighty office in Government. However, even if he cannot give us that information, we shall still wish to scrutinise these matters whenever the Bill arrives.

I can think of a number of matters where there will be political tensions over what is contained within the Bill. I shall not go over again the issues of community pharmacies. But if community pharmacies are an issue of some political sensitivity in England, they are an issue of keen sensitivity in Scotland and, from what was said earlier, in Wales. That is the kind of issue on which we shall have concern as regards the Scottish parliament. In dealing with such matters as small agreements, there will also be some keen interest in knowing whether the Scottish parliament will have powers. I turn at random to Clause 63(7)(a) and find a provision which relates to what is or is not required of an individual appearing before the Court of Session.

I wish briefly to focus on one issue. It is the issue of warrants. As noble Lords know, if there is one aspect of the Bill that has caused us concern, it is the warrants that are allowed for under its provisions.

Under one of the provisions, where warrants are granted in Scotland, they are to be granted by a sheriff. If we have indicated at this time that in the way the warrants have been put together they are far too extensive in their terms, it might be hoped that, even if there is a lack of libertarian zeal in this present Government, at one point a Scottish parliament might assert the right to restrict the powers of those who enter domestic premises or empty premises and so on. If we are dealing with warrants, that would undoubtedly fall within the power of a Scottish parliament--giving the Scottish parliament the right to restrict the circumstances in which a warrant is to be exercised.

If I am wrong in that, and if the circumstances in which warrants are granted and the basis on which they are issued are not to fall in future within the remit of the Scottish parliament, it is incumbent on the Government to make that clear at the earliest possible stage. Otherwise, if their genuine intention in this constitutional change is to strengthen the Union rather than weaken it, they should at least make clear where they believe powers are to lie.

Otherwise, I keenly fear that if the Scottish parliament believes it has a wide range of powers, and then subsequently discovers that it has no right to change or influence what is going on, far from there being a strengthening of our Union, the consequence of it all will be that separation will become a matter of

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inevitability. That seems to be the most obvious example in the Bill, in an area of policy which the White Paper quite specifically spells out as a matter to be reserved for Westminster. Nevertheless, even a brief examination of the Bill's provisions reveals that there is one key area in which there a real prospect of conflict with the proposed Scottish parliament.

I propose to leave the matter there for now. However, there are other aspects of the Bill--what falls within the remit of a Scottish parliament and what falls within the remit of Westminster--which I have no doubt could be explored at great length. I hope that the Government appreciate that we want these matters to be clearly and carefully analysed. However, the Chief Whip may go home to his bed now. I promise him that under no circumstances do I have any intention of dividing the House. I beg to move.

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