COMPETITION BILL [HL]
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
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
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
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