Select Committee on Delegated Powers and Deregulation Thirty-Second Report



Memorandum by the Department of Trade and Industry

1.  The purpose of this note for information is to supplement the Department's memorandum of 22 October 1997 (on which the Committee reported in its Sixth Report on 5 November 1997) by describing the delegated powers which have been added to the Bill by amendment during the Bill's passage through the House of Commons. Ministers will, of course, be explaining the Commons' amendments in the course of Lords' Consideration.

2.  Nine new delegated powers were added in the Commons, seven of which are in the new transitionals schedule which replaces Schedule 13 (amendment 104). The powers are:

Amendment 34: New Clause after Clause 50: Vertical agreements and land agreements

3.  This new clause allows the Secretary of State by order to provide for any provision of Part I of the Bill to apply in relation to vertical agreements and land agreements with such modifications as may be prescribed. "Land agreements" and "vertical agreements" are to have such meaning as may be prescribed. An order may empower the Director to give directions to the effect that in prescribed circumstances an exclusion, exemption or modification is not to apply (or is to apply in a particular way) in relation to an individual agreement.

4.  Because the power would enable the Secretary of State to remove whole categories of agreements from the Chapter I prohibition, and more generally amend how the Bill is to apply in relation to them, orders are subject to the affirmative resolution procedure.

Amendment 36: Clause 54: Regulators' concurrent functions

5.  This amendment allows the Secretary of State to make regulations for the purpose of coordinating the performance of functions under Part I of the Bill which are exercisable concurrently by two or more competent persons (ie the Director General of Fair Trading or any of the regulators).

6.  The utility sector statutes contain inflexible provisions on the exercise of existing concurrent functions under those statutes. These provisions have been disapplied from the exercise of Bill functions by a number of other amendments made at the same time as amendment 36 (and to be considered along with it at Lords' Consideration), and the more flexible regulation-making power in amendment 36 provided instead.

7.  Orders are subject to the negative resolution procedure.

Amendment 104: New Schedule after Schedule 12: Transitional provisions and savings

8.  Paragraph 10(5) of the new transitionals schedule enables the Secretary of State to prescribe modifications to the sections 23 and 27 of the RTPA, which are to continue to apply in respect of the Register after the Chapter I prohibition comes into force (the "starting date"). After the RTPA is repealed, it is likely that demand to access information on the Register will reduce. The power in paragraph 10(5) provides flexibility to modify arrangements in respect of the maintenance of the Register and other requirements relating to the Register.

9.  Paragraph 11 of the new schedule enables interim orders under section 3 of the RTPA to be granted by the RPC, after the starting date, in respect of applications for interim orders and continuing proceedings under section 1(3). Some modification of section 3 is likely to be needed to fit the circumstances after the starting date, and paragraph 11 confers a power for the Secretary of State to prescribe such modification.

10.  Similarly, Paragraph 12 includes a power for the Secretary of State to prescribe modifications to section 26 of the RTPA (which gives the court power to rectify the Register) as it applies to proceedings that were started before the starting date.

11.  Paragraph 19(3) of the new schedule gives the Secretary of State a power to modify the notification provisions in the Bill in relation to agreements that are subject to a transitional period. The power is similar to that contained in clause 12(3) of the Bill (which relates to cases of excluded agreements where the Director has given, or is considering whether to give, a direction withdrawing the exclusion). Without such modifications, the notification clauses would not allow parties to seek guidance or decisions for agreements which are at the time excluded from the prohibition.

12.  Paragraph 29 of the new schedule gives the Secretary of State a power, similar to that contained in section 100 of the Electricity Act, to make new orders during the period of five years from the starting date, with the effect of transitionally excluding agreements from the Chapter I prohibition until the end of that period. This power is needed to give full effect to the policy that existing special arrangements to deal with agreements in the electricity sector should, for a transitional period of five years, continue essentially in their present form, but with the Chapter I prohibition being disapplied rather than the RTPA.

13.  Paragraph 31 of the new schedule gives the Secretary of State a similar power in relation to gas agreements in Great Britain.

14.  Paragraph 33 of the new schedule gives the Department of Economic Development a similar power in relation to gas agreements in Northern Ireland.

15.  Orders under all of the new powers in amendment 104 are subject to the negative resolution procedure.

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