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Lord McIntosh of Haringey moved Amendments Nos. 4 to 7:
- Page 11, leave out lines 9 and 10 and insert—
On Question, amendments agreed to.
Clause 22 [Relevant merger situations]:
Lord Hunt of Wirral moved Amendment No. 8:
The noble Lord said: My Lords, I want to press the Government on this amendment. When we discussed the matter on Report, the noble Lord, Lord Sainsbury of Turville, supplied a number of figures for consideration. At the time, I said that I wanted to reflect on the information that he had put forward and consult more widely outside this House. Those with whom I have consulted, especially the CBI—and many others involved in industry and commerce in the wider sense—have urged me further to press the Government.
In the amendment I seek to delete the sum of £45 million and insert a reference to £100 million. When we debated the matter previously the Government admitted that they were dealing essentially with an informed estimate and that their method of calculation was not fool-proof. The CBI has reflected on the information put forward by the Government and has asked me to assert on its behalf the fact that it has carried out a considerable amount of research. The confederation sampled 522 companies, covering a wide range of industries, both high-tech and traditional, and produced a ratio of UK turnover to world-wide gross assets of 1.2:1. That ratio is supported by the rule-of-thumb test that turnover should be expected to exceed gross assets. Therefore, the new turnover figure should exceed the old £70 million gross assets figure. The Government's figure of £45 million fails the rule-of-thumb test.
I must also point out to the Minister that the Government have never responded to the proposal that allowance should be made for inflation, as the threshold was last set in 1994. They have used the old figure of £70 million in calculating an equivalent number of companies that would be caught by the new turnover threshold. Surely they should at least use the indexed figure of £85 million to calculate the number of affected companies.
On the Government's figures, about 7,500 companies would be caught by the £45 million threshold. If the Government were to accept the amendment and the £100 million threshold proposed by the CBI, that number would be cut in half and the regulatory burden on business would be reduced. That would also go some way towards making this a true enterprise Bill. I beg to move.
Lord Razzall: My Lords, I should like to make two general points while expressing my support for the noble Lord, Lord Hunt, and his amendment. I intended to make such observations when the previous
Secondly, as the Minister will know, my noble friend and I have not intervened in debates on this issue as the Bill has passed through both the Committee and Report stages, although we have listened to the arguments. Having done so, it may come as a disappointment to the Minister to know that we believe that the noble Lord, Lord Hunt, is correct. We shall, therefore, be supporting him in the Division Lobby is he chooses to press the amendment to a vote.
Lord McIntosh of Haringey: My Lords, I am grateful to both noble Lords for the way in which they have approached the amendment. I respect the fact that the CBI has conducted research since we last debated the matter. The Government have undertaken a few inquiries in this respect. I acknowledge that the relationship between assets and turnover is not a straightforward one. If you are moving from an asset measure to a turnover measure—we are all agreed that that is the right approach—you must engage in a certain amount of approximation.
Our goal in selecting the level of the new turnover test is to bring within the scope of the merger regime broadly the same numbers of companies that currently qualify under the assets test. Our further research indicates that that is the case. It is not based on any rule-of-thumb relationship between assets and turnover; it is just a matter of looking at the turnover of British companies. You have to consider the situation sector by sector. Clearly, when considering property companies, assets will be very large and turnover need not be large according to whether they are disposing or acquiring. In the case of dotcom companies, the assets will probably be relatively small in relation to turnover. Indeed, for any company that is trading in high-value goods, the turnover will be high.
Whatever equivalence you make between assets and turnover, you will be excluding some companies in some sectors and including companies in other sectors that would not otherwise have been included. However, as one of the Bill's primary aims is the putting into place of an enhanced competitive regime, it would be very strange if we did what this amendment seeks to achieve and relaxed the regime for merger control from the outset by a significant reduction in the number of companies covered by the legislation. Anti-competitive mergers can result in significant harm to consumers and to the economy at large. That is the fundamental point. The OFT should be able to look at mergers that could give rise to such concerns.
The noble Lord, Lord Hunt, raised the question of indexing. I am not persuaded that this is a key point. When thresholds are revised, they are obviously intended to last for a period of time. They are not
Lord Hunt of Wirral: My Lords, I have no wish to compare the Minister to Don Quixote, but I believe that he is being rather quixotically chivalrous in asserting the importance of inflexible approximation. That is, indeed, what he tried to put forward. Surely, it is important to start off with the right figure. However much one commits to review the figure, the important principle is to ensure that the figure that appears initially in the Bill is correct. That is why I want to press the amendment and test the opinion of the House.
On Question, Whether the said amendment (No. 8) shall be agreed to?
"(1A) In such proceedings, the court is bound by a decision mentioned in subsection (2) once any period specified in subsection (3) which relates to the decision has elapsed."
Page 11, line 16, after "Tribunal" insert "(on an appeal from a decision of the OFT)""
Page 11, line 20, leave out subsection (3) and insert—
"(3) The periods mentioned in subsection (1A) are—
(a) in the case of a decision of the OFT, the period during which an appeal may be made to the Tribunal under section 46 or 47 or the EC Competition Law (Articles 84 and 85) Enforcement Regulations 2001 (S.I. 2001/2916);
(b) in the case of a decision of the Tribunal mentioned in subsection (2)(c), the period during which a further appeal may be made under section 49 or under those Regulations;
(c) in the case of any decision which is the subject of a further appeal, the period during which an appeal may be made to the House of Lords from a decision on the further appeal;
and, where any appeal mentioned in paragraph (a), (b) or (c) is made, the period specified in that paragraph includes the period before the appeal is determined."
Page 11, line 33, at end insert—
"(1A) Section 58A does not apply in relation to decisions made before the commencement of this section."
Page 13, line 21, leave out "£45 million" and insert "£100 million"
5 p.m.
Aberdare, L.
Addington, L.
Ampthill, L.
Anelay of St Johns, B.
Astor of Hever, L.
Attlee, E.
Avebury, L.
Barker, B.
Beaumont of Whitley, L.
Biffen, L.
Blake, L.
Blaker, L.
Blatch, B.
Brabazon of Tara, L.
Bradshaw, L.
Brougham and Vaux, L.
Buscombe, B.
Butterworth, L.
Byford, B.
Campbell of Alloway, L.
Carlisle of Bucklow, L.
Carnegy of Lour, B.
Cavendish of Furness, L.
Clement-Jones, L.
Cope of Berkeley, L. [Teller]
Craig of Radley, L.
Craigavon, V.
Croham, L.
Cumberlege, B.
Dahrendorf, L.
Dean of Harptree, L.
Dholakia, L.
Dixon-Smith, L.
Eccles of Moulton, B.
Elles, B.
Elliott of Morpeth, L.
Elton, L.
Falkland, V.
Fearn, L.
Fowler, L.
Fraser of Carmyllie, L.
Freeman, L.
Garel-Jones, L.
Geraint, L.
Glenarthur, L.
Glentoran, L.
Goodhart, L.
Gray of Contin, L.
Griffiths of Fforestfach, L.
Hayhoe, L.
Henley, L.
Holme of Cheltenham, L.
Hooper, B.
Howe, E.
Howe of Aberavon, L.
Howell of Guildford, L.
Hunt of Wirral, L.
Jellicoe, E.
Jenkin of Roding, L.
Jenkins of Hillhead, L.
Jopling, L.
Kingsland, L.
Laird, L.
Lamont of Lerwick, L.
Lane of Horsell, L.
Lester of Herne Hill, L.
Livsey of Talgarth, L.
Lucas, L.
Luke, L.
Lyell, L.
McColl of Dulwich, L.
McNally, L.
Marlesford, L.
Marsh, L.
Mayhew of Twysden, L.
Monro of Langholm, L.
Monson, L.
Mowbray and Stourton, L.
Moynihan, L.
Murton of Lindisfarne, L.
Naseby, L.
Noakes, B.
Northesk, E.
Northover, B.
O'Cathain, B.
Oppenheim-Barnes, B.
Park of Monmouth, B.
Perry of Southwark, B.
Peyton of Yeovil, L.
Phillips of Sudbury, L.
Platt of Writtle, B.
Prior, L.
Rawlings, B.
Razzall, L.
Reay, L.
Rennard, L.
Renton, L.
Roberts of Conwy, L.
Roper, L.
Rotherwick, L.
Scott of Needham Market, B.
Seccombe, B. [Teller]
Sharples, B.
Shutt of Greetland, L.
Smith of Clifton, L.
Soulsby of Swaffham Prior, L.
Swinfen, L.
Thomas of Walliswood, B.
Trefgarne, L.
Trumpington, B.
Tugendhat, L.
Waddington, L.
Walker of Worcester, L.
Wallace of Saltaire, L.
Walmsley, B.
Watson of Richmond, L.
Wilcox, B.
Williams of Crosby, B.
Williamson of Horton, L.
Acton, L.
Ahmed, L.
Amos, B.
Andrews, B.
Ashley of Stoke, L.
Ashton of Upholland, B.
Bach, L.
Barnett, L.
Bassam of Brighton, L.
Bernstein of Craigweil, L.
Bhatia, L.
Blackstone, B.
Blease, L.
Borrie, L.
Bragg, L.
Brennan, L.
Brooke of Alverthorpe, L.
Brookman, L.
Campbell-Savours, L.
Carter, L.
Christopher, L.
Clark of Windermere, L.
Clarke of Hampstead, L.
Clinton-Davis, L.
Cohen of Pimlico, B.
Corbett of Castle Vale, L.
Crawley, B.
David, B.
Davies of Oldham, L.
Dean of Thornton-le-Fylde, B.
Desai, L.
Dormand of Easington, L.
Dubs, L.
Elder, L.
Evans of Parkside, L.
Evans of Temple Guiting, L.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Filkin, L.
Fitt, L.
Fyfe of Fairfield, L.
Gale, B.
Gavron, L.
Gibson of Market Rasen, B.
Gladwin of Clee, L.
Goldsmith, L.
Gordon of Strathblane, L.
Goudie, B.
Gould of Potternewton, B.
Graham of Edmonton, L.
Grenfell, L.
Grocott, L. [Teller]
Harrison, L.
Haskel, L.
Hayman, B.
Hilton of Eggardon, B.
Hogg of Cumbernauld, L.
Howells of St. Davids, B.
Howie of Troon, L.
Hoyle, L.
Hughes of Woodside, L.
Irvine of Lairg, L. (Lord Chancellor)
Islwyn, L.
Jay of Paddington, B.
Jordan, L.
Judd, L.
King of West Bromwich, L.
Kirkhill, L.
Layard, L.
Lea of Crondall, L.
Lipsey, L.
Lofthouse of Pontefract, L.
Macdonald of Tradeston, L.
McIntosh of Haringey, L. [Teller]
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.
Mason of Barnsley, L.
Massey of Darwen, B.
Merlyn-Rees, L.
Milner of Leeds, L.
Mishcon, L.
Mitchell, L.
Morgan, L.
Morris of Manchester, L.
Patel of Blackburn, L.
Pendry, L.
Pitkeathley, B.
Plant of Highfield, L.
Ponsonby of Shulbrede, L.
Prys-Davies, L.
Rendell of Babergh, B.
Richard, L.
Roll of Ipsden, L.
Rooker, L.
Sewel, L.
Simon, V.
Smith of Gilmorehill, B.
Stoddart of Swindon, L.
Stone of Blackheath, L.
Strabolgi, L.
Symons of Vernham Dean, B.
Temple-Morris, L.
Thornton, B.
Turnberg, L.
Turner of Camden, B.
Warwick of Undercliffe, B.
Weatherill, L.
Whitaker, B.
Whitty, L.
Williams of Elvel, L.
Williams of Mostyn, L. (Lord Privy Seal)
Woolmer of Leeds, L.
Resolved in the affirmative, and amendment agreed to accordingly.
5.10 p.m.
Clause 33 [Supplementary provision in relation to anticipated mergers]:
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