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Lord Dearing: Having sat peacefully for four hours and heard the noble Baroness, with great charm, again and again move amendments which have not been received kindly, I now stand up to support this amendment, which I believe has substance. This is a low

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margin business and a 10 per cent penalty could easily equal three years' profits. Unless this provision is moderated I believe that it may kill a entrant to the marketplace. Therefore, in the interests of competition I believe that there should be moderation in this matter. As the Government are a shareholder a 10 per cent fine on the Post Office may amount to £500 million. Perhaps that is a worthy limit.

Lord Sainsbury of Turville: The power to impose penalties is there to ensure compliance with licence conditions and other obligations. The amount of penalty must be reasonable in all the circumstances of the case. The Bill does not specify a limit on the penalty that can be imposed under these provisions. Perhaps I should attempt to damp down some of the wilder speculation about the scale of penalty that is likely to be imposed. The clause is quite clear that the penalty must be reasonable in all the circumstances of the case. The penalty could be very large but only if the breach in question had been sufficiently serious, and had done enough harm, to warrant a heavy penalty. In other cases where the breach was less serious the amount involved would be smaller.

To ensure transparency, the commission is required to publish its policies with regard to calculating the amount of a penalty and to have regard to them when imposing a penalty. Such policies may include, for example, having regard to the need to secure compliance, the consequences of the breach and deterrence of future breaches. In addition, there are detailed procedural requirements for the imposition of a penalty, including requirements on the commission to publicise its intentions, provide notices with prescribed information and receive and consider comments from interested parties. There are also procedures for modifying the penalty and notifying the company concerned and interested parties of the final decision on the imposition of a penalty. The licence holder may apply to the commission to pay a penalty in instalments.

The licence holder may also make an application to the court to question the validity of a penalty order on prescribed grounds; that any of the relevant procedural requirements have not been complied with and that has substantially prejudiced the licence holder's interests; that the imposition of the penalty is not within the commission's powers; or that it is unreasonable to require the penalty, or any portion of it, to be paid by the date by which it is required to be paid. The requirement to pay a penalty is suspended until the case is determined. The court may quash or reduce the penalty or extend the timescale to pay. It may also require interest to be paid on the penalty or on any reduced penalty that it may substitute.

It is important to stress that under these procedures a licence holder will be able to challenge the amount of any penalty, because the commission has power under Clause 30 only to impose a penalty that is of such amount as is reasonable. If the amount is unreasonable the imposition of the penalty will not be within the power of the commission under that clause. Accordingly, if a licence holder challenges the amount

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of a penalty on the grounds that its imposition is not within the commission's power under Clause 30 the court will have to consider whether it is reasonable. If it does not consider that it is reasonable it may quash or lower the penalty as it thinks appropriate.

The Government believe that the interests of consumers should be at the heart of regulation. That objective cannot be fulfilled unless the commission has the necessary powers to enforce the obligations that companies have taken on in respect of consumers. At the same time, the powers that they propose are appropriately framed by due process, the requirements of transparency and the right of companies to challenge the imposition of a penalty in the courts. On that basis, I commend these provisions to the Committee.

Baroness Miller of Hendon: I thank the noble Lord, Lord Dearing, who has spoken in support of this small amendment. It is extraordinary that under the Bill,

    "the Commission may impose on the licence holder a penalty of such amount as is reasonable".

Given the number of times that we have tried to insert "reasonable" into clauses only to be told that it has no meaning because it is a purely subjective matter, it is extraordinary that in this case that term is regarded as appropriate. A breach of a contract--which is what this would be, a breach of a licence--is a breach of a contract. It is not a criminal offence in the sense of harming someone. Practically every criminal offence one knows of has an upward and outward limit as to what the penalty can be. One would have thought that the penalty suggested in this amendment is more than sufficient. I am amazed that the Government feel that it is appropriate to leave this in the hands of the regulator.

I understand what the Minister said--that we are trying to do this for the benefit of the consumer. It is not as though we are talking of danger to health, to life or to limb; we are talking of postal services. A breach would probably mean immediate loss of the licence, loss of the business and the penalty. As to the idea that it can be an unlimited penalty so long as it is reasonable, I ask reasonable to whom? For an individual to have to go to the courts is somewhat unfortunate. However, it seems that the Government have made up their mind. I beg leave to withdraw that amendment.

Amendment, by leave, withdrawn.

Clause 30 agreed to.

Clauses 31 to 34 agreed to.

Clause 35 [Interest and payments by instalment]:

Lord Sainsbury of Turville moved Amendment No. 27:

    Page 23, line 35, leave out ("by the Commission").

The noble Lord said: This is a minor technical amendment designed to correct a small error in the drafting of the Bill, namely that the date required

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under Clause 36(1)(c) may be specified either by the commission or may have been specified by the courts following appeal under Clause 36.

Under the clause as amended, the date that applies can be the commission's or the court's if a successful appeal had been made by the licence holder. I beg to move.

On Question, amendment agreed to.

Clause 35, as amended, agreed to.

Clause 36 agreed to.

Clause 37 [Recovery of penalties]:

Lord McIntosh of Haringey moved Amendments Nos. 28 and 29:

    Page 25, line 8, leave out from ("holder") to end of line.

    Page 25, line 9, at end insert ("and in England and Wales and Northern Ireland such penalty and interest may be recovered as a civil debt due to the Commission").

On Question, amendments agreed to.

Clause 37 agreed to.

Clause 38 [Register]:

7.15 p.m.

Baroness Miller of Hendon moved Amendment No. 30:

    Page 25, line 30, at end insert ("including that person's commercial interests").

The noble Baroness said: In moving the amendment, I speak also to Amendments Nos. 31 and 32.

Clause 38 relates to the creation and maintenance of a public register of licences. The first three amendments relate to subsection (5). Amendment No. 30 slightly modifies subsection (5) which authorises the commission to exclude from the register material which,

    "would or might seriously and prejudicially affect the person's interests".

I believe that I may have made a mistake. Amendment No 32 that does not relate to subsection (5); it relates to subsection (8). The amendment was drafted in the Public Bill Office; it was simply a paving amendment. I did not correct my note accordingly.

Amendment No. 30 slightly modifies subsection (5) which authorises the commission to exclude from the register material which,

    "would or might seriously and prejudicially affect the person's interests".

The need to protect commercial interests was also recognised elsewhere in the White Paper, referring to the Post Office's five-year plan. It states:

    "The aim will be to report [to Parliament] once the Strategic Plan has been approved (though commercially confidential details of the Plan will not be revealed)".

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This concept of commercial confidentiality was also reinforced by the 12th Report of the Select Committee on Trade and Industry when it was considering major acquisitions by the Post Office. It states:

    "We recommend the greatest possible degree of transparency compatible with the genuine requirements of commercial confidentiality when considering this and future purchases by the Post Office".

The subsection we are considering does not say what is meant by "interests". It could perhaps be argued that it merely refers to personal interests or social interests. The amendment that I have down makes it abundantly clear that commercial interests are included.

In the White Paper the Government stated:

    "The Regulator will have the power ... to publish information for the benefit of consumers and in the interests of good regulation, subject to tests relating to substantial harm, including ... commercial confidentiality and public interest".

This amendment has the objective of clarifying the clause, not detracting from it in any way.

Indeed, in subsection (7) it recognises the need to protect a person's commercial interests, although I think it would work only if the Secretary of State was to get advanced notice of the intended contents of the register, because it would be too late after the publication.

The amendment secures the protection of confidential commercial information that licensees may have disclosed to the regulator as part of the application process. It is entirely consistent with the objective stated in the White Paper which the draftsman has not fully covered in the present wording of the section.

When a similar amendment was put to the committee in the other place the Minister for Competition argued against it on the grounds that he thought that the rights of individuals are protected sufficiently by the clause as drafted. Dotting the "i"s and crossing the "t"s will do no harm whatsoever and it will put the matter beyond doubt. I should ask the Minister to let me know when he replies as to where would be the harm if this were to be absolutely clarified.

The Minister had a more cogent argument against the amendment in the other place, where other amendments to this clause put down by my honourable friends would have deleted certain provisions and would have limited the commission's discretion. I will not trouble the Committee with the details, but it is sufficient to say that I would be nowhere near as ambitious as my honourable friends in the other place. I have focused my amendment on the very narrow issue of commercial interests.

With that concession from us in mind, I hope the Government will now find it possible to accept that the mild, clarifying Amendment No. 31 provides a right of appeal to the Secretary of State by anyone who objects to an entry in the register. This follows my remarks about subsection (7). The Secretary of State has the power to order the commission not to enter material that he considers is against the public interest or an individual's commercial interests. However, there is

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nothing in the Bill to encourage the Secretary of State to make a decision on any problem or even to consider it. The object of Amendment No. 31 is simply to provide the machinery to start the Secretary of State's thought processes or to bring a problem to his attention.

The whole machinery of objection and the removal of material from the register seems to be accompanied by the sound of slamming of stable doors. Once the material has entered the public domain through publication the damage would already have been done. The Government should provide machinery for consultation and objections to be dealt with in confidence before publication, perhaps introducing amendments at the next stage of the Bill. The Minister will understand that I seek only to make a helpful suggestion. It is not for me to do the Government's drafting. Perhaps the Minister will wish to consider the amendment.

Finally, Amendment No. 32 provides another means of enabling public access to the register by electronic means. Public registers such as the Companies Register are already accessible via the Internet. There is no reason why the new commission should not begin by providing data instantly by what will be a common means of publication. I am sure that the omission from the Bill of a similar provision is merely an oversight. I beg to move.

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