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Lord Haskel moved Amendment No. 73:


Page 52, leave out lines 40 to 43.

The noble Lord said: My Lords, I shall also speak to Amendments Nos. 74 to 78, and Amendment No. 161. These amendments respond to amendments tabled in Committee by the noble Lord, Lord Lucas, the noble and learned Lord, Lord Fraser, and the noble Lord, Lord Kingsland, on which we gave a solemn and binding undertaking to reflect.

The noble and learned Lord, Lord Fraser, argued that the ability of the director to convert an application for guidance into a formal decision might discourage businesses from seeking guidance because of concerns about confidentiality.

It is our intention that the provisions on applying for guidance should provide a relatively informal procedure whereby businesses can obtain confidential guidance which, because third parties have not been consulted, cannot be as certain as applying for a decision that is made with the benefit of the views of third parties.

We accept the noble and learned Lord's point that the ability of the director to convert an application for guidance into an application for a decision might undermine confidence and procedure. These amendments put the noble Lords' proposals into practice. I beg to move.

Lord Fraser of Carmyllie: My Lords, I am extremely grateful to the Government for listening to what we had to say in Committee. We warmly applaud the introduction of these amendments.

On Question, amendment agreed to.

Lord Haskel moved Amendments Nos. 74 and 75:


Page 53, leave out lines 7 to 29.
Page 53, line 41, leave out from ("decision") to end of line 43.

On Question, amendments agreed to.

Schedule 6 [Notification under Chapter II: Procedure]:

Lord Haskel moved Amendments Nos. 76 to 78:


Page 54, leave out lines 41 to 44.
Page 55, leave out lines 4 to 22.
Page 55, line 34, leave out from ("decision") to end of line 36.

On Question, amendments agreed to.

Clause 25 [Director's power to investigate]:

Lord Kingsland moved Amendment No. 79:


Page 13, line 4, at beginning insert ("Subject to subsection (3),").

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The noble Lord said: My Lords, these amendments are intended simply to ensure that there is no overlapping jurisdiction in relation to competition matters by excluding an express sub judice call from the face of the Bill. I beg to move.

Lord Simon of Highbury: My Lords, this amendment would prevent the director from conducting an investigation or exercising any other functions in respect of matter which is the subject of proceedings before any court.

I do not think this is a desirable restriction. The prohibitions are a matter of public law. If there is an agreement or conduct to which they apply then the director should be free to act nowithstanding the existence of civil proceedings as his concern is with the effect of the agreement or conduct on competition generally and not just between the parties. There will obviously be cases in which he will leave the matter to the civil proceedings to determine. However, equally there may be cases where he considers he should investigate because of the effects on those who are not party to the proceedings. It would be wrong for him to be prevented for so long as the proceedings may continue.

If a third party were to pursue a case that a particular agreement was void on the grounds that it infringed the prohibition, the parties to that agreement might wish the director to make a decision on whether or not to grant an exemption. The court cannot grant an exemption; the director can and should be able to do so in these circumstances. It would be wrong to prevent him from doing so.

In general terms, I would advise that we should require the freedom for the director to be able to operate at two levels. On that basis, I urge the noble Lord, Lord Kingsland, to reconsider the case for the amendment.

Lord Kingsland: My Lords, I thank the Minister for his reply. I shall reflect on what he said but may well wish to return to this issue at Third Reading. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Haskel moved Amendment No. 80:


Page 13, line 4, leave out ("he has a reasonable suspicion") and insert ("there are reasonable grounds for suspecting").

The noble Lord said: My Lords, Clause 25 is the first clause in the important section of the Bill dealing with the director's powers of investigation. We discussed these clauses extensively during Committee. I shall bring forward later significant amendments to strengthen the various safeguards that were discussed in Committee.

But at this stage I must begin by reporting to the House that in one respect Clause 25 is defective and needs to be corrected. That is the purpose of Amendment No. 80. As a point of principle, we believe that it is essential for the director general to be able to delegate his functions to his officers.

9 Feb 1998 : Column 987

This provision applies to the Competition Bill, because of the reference to "any other enactment". Accordingly, the many other functions of the director set out in the Bill can be delegated by him to a properly authorised member of staff. We consider that the same position should apply to the initiation of an investigation as applies to these other functions. The power to delegate should apply.

The fact that Clause 25(2) makes explicit provision for delegation casts doubt on the applicability of Schedule 1 of the Fair Trading Act in this area of the Bill. Specifically, the unintended effect of Clause 25(2) was that the director general would personally have to be satisfied each and every time information was sought under Clause 26 that the threshold of suspicion that the prohibitions had been infringed was crossed.

This is not practicable nor desirable, as the noble Lord, Lord Kingsland, realises. The Office of Fair Trading is anticipating in the region of 1,200 complaints per year. Many, indeed a large majority, may well be disposed of easily without the need for the use of any formal powers. But a substantial number, perhaps up to 300, may require at least initial investigation by the seeking of information under Clause 26. Accordingly, it is important that his ability to delegate to an officer, properly authorised in writing, should be put beyond doubt. Amendment No. 80 rephrases subsection (1). It is intended to put beyond doubt that the director does not require personally to "suspect". I beg to move.

11 p.m.

Lord Kingsland: My Lords, I am grateful to the noble Lord, Lord Haskel, for his response to Amendment No. 80. If I remember rightly, during Committee stage I was pressing for a "reasonable suspicion" to be replaced by "reasonable grounds for belief". I have been met at least half-way. In light of the number of times that I have been met at least half-way on the previous amendments that I tabled, I regard that as an excellent result.

On Question, amendment agreed to.

Lord Haskel moved Amendment No. 81:


Page 13, line 8, leave out subsection (2).

On Question, amendment agreed to.

[Amendment No. 82 not moved.]

Clause 26 [Powers when conducting investigations]:

Lord Fraser of Carmyllie moved Amendment No. 83:


Page 13, line 11, leave out ("person") and insert ("officer or senior employee of an undertaking").

The noble and learned Lord said: My Lords, looking to the hour, I reflect on the time that we agreed for Report stage, particularly seeing the Chief Whip in his place for which I am grateful, and I feel sorely done by. Neither my noble friend Lord Kingsland nor myself have taken up anything like a quarter of today's proceedings and there have been some exchanges latterly which hardly enhance the reputation of your

9 Feb 1998 : Column 988

Lordships' House as a revising Chamber. I wonder whether we will achieve much more at this time of the night.

We still have some important small amendments. I can move them briefly now, but I anticipate and have to give warning that we may need more time for Report stage or shall certainly return to these at Third Reading. It has been thoroughly unsatisfactory, as the Minister will appreciate. We have sought to be as constructive and positive as we have been throughout the passage of the Bill.

I turn to Amendment No. 83, which is coupled with a significant number of other amendments on the same theme. To describe it in shorthand, it is the "tea lady" problem. We are concerned that if requests are made and people are going to be interviewed, it should not be just any person; it should be any officer or a senior employee of an undertaking.

This is not merely a matter of being difficult. What follows from a number of these requests is that ultimately there is a risk of criminal sanctions being imposed on people. Although this is a brief set of amendments, they contain some important points. If people do not comply it may be because they are too junior. We do not want to see them subjected to the risk of any criminal sanction following from a failure on their part.

I appreciate that the context of the Bill sets a high standard if there are to be prosecutions at a later stage; it is not just a question of someone shrugging their shoulders and saying, "I do not understand". But in our view it is unreasonable to include present or past junior employees and that is what lies behind this set of amendments. I beg to move.


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