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Sir Nicholas Lyell: The Minister said that she disagrees with what I have said. Will she examine the record, write me a letter explaining why she disagrees, and place a copy in the Library?

Miss Johnson: I shall consider the right hon. and learned Gentleman's request, although I am not sure that any useful purpose would be served by my complying with it.

As I explained, if there were a better formulation of "must have regard to", it is certainly not "seek to", as that would weaken the provision's force.

We have considered how best to address the competition issue in the formulation of the Bill's wording. As clause 2(3) states, in conducting its business, the authority must have regard to various specified principles. We believe that the strength of the injunction and the duty

27 Jan 2000 : Column 665

imposed on the authority by the subsection will ensure that, in seeking to achieve its objectives, the authority will give full consideration to all aspects of its duty, including the particularly contentious issue of competition and competitiveness.

Sir Michael Spicer: I am grateful to the Minister for giving way, not only because of the lateness of the hour, but because, earlier she said that she was on my side--which seemed to worry the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) a bit. However, if there are various bodies with different objectives, how will we decide who should win?

Miss Johnson: We drafted the clause with that in mind.

Many hon. Members expressed an interest in the United Kingdom's international competitiveness. Clause 2(3)(e) provides that, in performing its duties, the authority must have regard not only to competition, but to

That requirement has now been encapsulated and included in the principles governing how the FSA does its business. It also addresses the issue of whether it is appropriate to impose such an obligation on the FSA. Some aspects of competitiveness are the Government's responsibility. There are aspects of competitiveness that are the industry's responsibility. The Bill encapsulates the responsibilities of the FSA in that regard.

The hon. Member for Arundel and South Downs (Mr. Flight) called the Competition Commission the piggy-in-the-middle in this matter. That is most unfair. The Competition Commission will take the place occupied by Ministers in the competition scrutiny regime. It, rather than Ministers, will take the final decision on whether a rule or practice is anti-competitive, or whether it is justified. The commission's decision will stand and will be put into effect, unless exceptional circumstances--some of which I set out earlier--lead Ministers to a different conclusion. Far from being the piggy-in-the-middle, the Competition Commission will be the final arbiter of competition matters.

Finally, several hon. Members have said how important it is to get the right balance between competition and competitiveness, and regulation. All have their proper role to play, but it is misleading to suggest that good regulation is anything other than an asset. The circumstances governing the competitiveness of the City of London are important, but so is the very good regulation in the UK, which continues to assure the City's position in the global market.

Sir Nicholas Lyell: The Minister is disagreeing with Don Cruickshank, the whole point of whose report was to tell the Government that the "have regard to" formula in clause 2(3), on which she is relying, is too weak. The report called on her to extend the regulatory functions in clause 2(2) to cover the requirements set out in clause 2(3).

Miss Johnson: As I said earlier, in his comments on his interim report and the Bill, Don Cruickshank said that

27 Jan 2000 : Column 666

he was not wedded to any particular means of achieving the balance between competition and competitiveness. We do not believe that the Opposition amendments would be useful in that regard, whereas we consider that the Government amendments will achieve the balance that we seek. They give full force to the role of competition when the FSA considers how it should perform its business.

I commend the measures to the House.

Mr. Heathcoat-Amory: The debate has been about a fundamental aspect of the Bill that goes to the core of what the FSA is set up to do. The Minister's responses have not measured up to the importance of the subject, and there has been no real attempt to answer the many questions of Opposition Members.

The Liberal Democrats tabled one sad little amendment that was not selected. That lack of enthusiasm is not surprising: almost no Liberal Democrat Members turned up to the sittings of the Standing Committee, which ran from last July to just before Christmas. Given that they could find no one to man the Benches then, it is hardly surprising that none has intervened in the debate. But given that that party is inclined to lecture the rest of us about the need for parliamentary scrutiny and all the changes it wants to improve it, it is treating the House with some contempt when it does not bother to put in the hours and the work to hold the Government to account on a Bill of this importance.

The Minister started her last speech rather unfortunately by saying that she was not clear whether we supported competitiveness or competition, when it is perfectly clear in our amendments, particularly amendment No. 192, that it is both. All my right hon. and hon. Friends who have spoken have made perfectly clear their concerns about both. If the hon. Lady has not understood our position on that, she cannot have been listening to us.

It is really quite simple: we want to elevate the importance of competition at home and the maintenance of international competitiveness to being an objective of the FSA. At present they are referred to as principles to which it must have regard. We are trying to do so on behalf of consumers at home, who will be better protected by a fully competitive market, and the million or so people who work in the industries concerned, whose jobs depend on maintaining international competitiveness.

This is a vulnerable, fragile market in a ferociously competitive global environment. Nothing that the regulator does must needlessly undermine that competitiveness. Therefore, it is essential that it be elevated from being simply a principle to which the authority must have regard to an objective that must be pursued. That is why Mr. Cruickshank in his report emphasised the importance of making competition an objective in the Bill.

Instead of that comparatively simple approach, the Government now wish to erect a fantastically complicated bureaucratic system, whereby supposed inadequacies in the Bill and in the way in which the FSA exercises its authority on this subject are referred to the Director- General of Fair Trading, then to the Competition Commission and then to the Treasury, which will have the final say, and then back to the authority to make the changes. How much better it would be to put in the Bill the duty, the obligation, the requirement, the objective of competition so that the FSA can do it right at the start.

Sir Nicholas Lyell: Does my right hon. Friend agree that this is all pointless on the key question

27 Jan 2000 : Column 667

of international competitiveness, because under the Competition Act 1998 none of these important bodies has any role in that repect whatsoever?

Mr. Heathcoat-Amory: My right hon. and learned Friend reminds me of that essential point. International competitiveness is nothing to do with the authority's duty, so that would go entirely by the board.

Mr. Cousins rose--

Mr. Heathcoat-Amory: I hope that the hon. Gentleman will forgive me if I do not give way. I am concluding.

To express our dismay over the way in which the whole issue of competition has been handled, we shall divide the House on new clause 27, as a mark of our suspicions and doubts not only about the new competition authority, but, more important, about the Government's wholesale rejection of our alternative approach, which would be simple and which has the support of outside commentators and experts, including Mr. Don Cruickshank. We believe that a Division is essential to demonstrate those points.

Question put, That the clause be read a Second time:--

The House divided: Ayes 282, Noes 124.

Division No. 53
[6.28 pm


Adams, Mrs Irene (Paisley N)
Ainger, Nick
Ainsworth, Robert (Cov'try NE)
Alexander, Douglas
Allan, Richard
Allen, Graham
Anderson, Donald (Swansea E)
Anderson, Janet (Rossendale)
Armstrong, Rt Hon Ms Hilary
Ashton, Joe
Atkins, Charlotte
Austin, John
Ballard, Jackie
Banks, Tony
Barnes, Harry
Barron, Kevin
Battle, John
Bayley, Hugh
Beard, Nigel
Beckett, Rt Hon Mrs Margaret
Beith, Rt Hon A J
Bell, Martin (Tatton)
Bell, Stuart (Middlesbrough)
Benn, Hilary (Leeds C)
Benn, Rt Hon Tony (Chesterfield)
Bennett, Andrew F
Benton, Joe
Berry, Roger
Best, Harold
Betts, Clive
Blackman, Liz
Blears, Ms Hazel
Blizzard, Bob
Bradley, Keith (Withington)
Bradley, Peter (The Wrekin)
Brand, Dr Peter
Breed, Colin
Brinton, Mrs Helen
Brown, Rt Hon Nick (Newcastle E)
Browne, Desmond
Burden, Richard
Burnett, John
Campbell, Alan (Tynemouth)
Campbell, Rt Hon Menzies
(NE Fife)
Campbell, Ronnie (Blyth V)
Cann, Jamie
Caplin, Ivor
Casale, Roger
Cawsey, Ian
Chapman, Ben (Wirral S)
Chaytor, David
Clark, Dr Lynda
(Edinburgh Pentlands)
Clarke, Eric (Midlothian)
Clarke, Rt Hon Tom (Coatbridge)
Clarke, Tony (Northampton S)
Clelland, David
Clwyd, Ann
Cohen, Harry
Coleman, Iain
Colman, Tony
Cook, Frank (Stockton N)
Corbett, Robin
Corbyn, Jeremy
Cotter, Brian
Cousins, Jim
Cranston, Ross
Cryer, John (Hornchurch)
Curtis-Thomas, Mrs Claire
Darvill, Keith
Davey, Valerie (Bristol W)
Davidson, Ian
Davies, Rt Hon Denzil (Llanelli)
Dawson, Hilton
Dean, Mrs Janet
Denham, John
Dismore, Andrew
Dobbin, Jim
Donohoe, Brian H
Dowd, Jim
Drew, David
Eagle, Angela (Wallasey)
Eagle, Maria (L'pool Garston)
Edwards, Huw
Efford, Clive
Ellman, Mrs Louise
Ennis, Jeff
Fearn, Ronnie
Field, Rt Hon Frank
Fisher, Mark
Fitzpatrick, Jim
Flint, Caroline
Follett, Barbara
Foster, Rt Hon Derek
Foster, Don (Bath)
Foster, Michael Jabez (Hastings)
Foster, Michael J (Worcester)
Gapes, Mike
Gardiner, Barry
Gerrard, Neil
Gibson, Dr Ian
Godsiff, Roger
Goggins, Paul
Gordon, Mrs Eileen
Griffiths, Jane (Reading E)
Griffiths, Win (Bridgend)
Grocott, Bruce
Grogan, John
Hain, Peter
Hall, Mike (Weaver Vale)
Hall, Patrick (Bedford)
Harris, Dr Evan
Heal, Mrs Sylvia
Healey, John
Heath, David (Somerton & Frome)
Henderson, Ivan (Harwich)
Hepburn, Stephen
Heppell, John
Hesford, Stephen
Hewitt, Ms Patricia
Hill, Keith
Hoey, Kate
Hood, Jimmy
Hope, Phil
Hopkins, Kelvin
Hoyle, Lindsay
Hughes, Kevin (Doncaster N)
Humble, Mrs Joan
Hurst, Alan
Hutton, John
Iddon, Dr Brian
Illsley, Eric
Ingram, Rt Hon Adam
Jackson, Helen (Hillsborough)
Jenkins, Brian
Johnson, Alan (Hull W & Hessle)
Johnson, Miss Melanie
(Welwyn Hatfield)
Jones, Helen (Warrington N)
Jones, Ms Jenny
(Wolverh'ton SW)
Jones, Jon Owen (Cardiff C)
Jones, Dr Lynne (Selly Oak)
Jones, Martyn (Clwyd S)
Jowell, Rt Hon Ms Tessa
Keen, Alan (Feltham & Heston)
Kelly, Ms Ruth
Kemp, Fraser
Kennedy, Jane (Wavertree)
Khabra, Piara S
Kilfoyle, Peter
King, Andy (Rugby & Kenilworth)
King, Ms Oona (Bethnal Green)
Kirkwood, Archy
Kumar, Dr Ashok
Ladyman, Dr Stephen
Laxton, Bob
Leslie, Christopher
Lewis, Ivan (Bury S)
Liddell, Rt Hon Mrs Helen
Lloyd, Tony (Manchester C)
Llwyd, Elfyn
Lock, David
Love, Andrew
McAvoy, Thomas
McCabe, Steve
McCartney, Rt Hon Ian
McDonagh, Siobhain
Macdonald, Calum
McDonnell, John
McGuire, Mrs Anne
McIsaac, Shona
McKenna, Mrs Rosemary
Mackinlay, Andrew
Maclennan, Rt Hon Robert
McNulty, Tony
MacShane, Denis
Mactaggart, Fiona
McWalter, Tony
McWilliam, John
Mahon, Mrs Alice
Marsden, Gordon (Blackpool S)
Marshall, David (Shettleston)
Marshall-Andrews, Robert
Maxton, John
Meale, Alan
Merron, Gillian
Michie, Bill (Shef'ld Heeley)
Milburn, Rt Hon Alan
Miller, Andrew
Mitchell, Austin
Moore, Michael
Moran, Ms Margaret
Morris, Rt Hon Ms Estelle
(B'ham Yardley)
Mountford, Kali
Mudie, George
Mullin, Chris
Murphy, Denis (Wansbeck)
Murphy, Jim (Eastwood)
Murphy, Rt Hon Paul (Torfaen)
Naysmith, Dr Doug
O'Brien, Mike (N Warks)
Olner, Bill
O'Neill, Martin
Organ, Mrs Diana
Pearson, Ian
Pendry, Tom
Perham, Ms Linda
Pickthall, Colin
Pike, Peter L
Plaskitt, James
Pollard, Kerry
Pond, Chris
Pope, Greg
Pound, Stephen
Prentice, Ms Bridget (Lewisham E)
Prentice, Gordon (Pendle)
Prosser, Gwyn
Purchase, Ken
Quinn, Lawrie
Radice, Rt Hon Giles
Reed, Andrew (Loughborough)
Roche, Mrs Barbara
Rooker, Rt Hon Jeff
Roy, Frank
Ruddock, Joan
Russell, Bob (Colchester)
Russell, Ms Christine (Chester)
Ryan, Ms Joan
Salter, Martin
Sarwar, Mohammad
Savidge, Malcolm
Sedgemore, Brian
Sheerman, Barry
Sheldon, Rt Hon Robert
Shipley, Ms Debra
Short, Rt Hon Clare
Simpson, Alan (Nottingham S)
Singh, Marsha
Skinner, Dennis
Smith, Rt Hon Andrew (Oxford E)
Smith, Angela (Basildon)
Smith, John (Glamorgan)
Smith, Llew (Blaenau Gwent)
Snape, Peter
Soley, Clive
Southworth, Ms Helen
Starkey, Dr Phyllis
Steinberg, Gerry
Stinchcombe, Paul
Stoate, Dr Howard
Stunell, Andrew
Taylor, Ms Dari (Stockton S)
Temple-Morris, Peter
Thomas, Gareth R (Harrow W)
Timms, Stephen
Tipping, Paddy
Todd, Mark
Touhig, Don
Trickett, Jon
Truswell, Paul
Turner, Dennis (Wolverh'ton SE)
Turner, Dr Desmond (Kemptown)
Turner, Neil (Wigan)
Twigg, Derek (Halton)
Tynan, Bill
Vaz, Keith
Walley, Ms Joan
Ward, Ms Claire
Watts, David
White, Brian
Whitehead, Dr Alan
Wicks, Malcolm
Williams, Rt Hon Alan
(Swansea W)
Williams, Mrs Betty (Conwy)
Willis, Phil
Wilson, Brian
Winnick, David
Winterton, Ms Rosie (Doncaster C)
Wise, Audrey
Wood, Mike
Woolas, Phil
Worthington, Tony
Wray, James
Wright, Dr Tony (Cannock)

Tellers for the Ayes:

Mr. David Jamieson and
Mr. Gerry Sutcliffe.


Ainsworth, Peter (E Surrey)
Amess, David
Arbuthnot, Rt Hon James
Baldry, Tony
Beggs, Roy
Bercow, John
Beresford, Sir Paul
Blunt, Crispin
Boswell, Tim
Brady, Graham
Brazier, Julian
Brooke, Rt Hon Peter
Browning, Mrs Angela
Bruce, Ian (S Dorset)
Burns, Simon
Butterfill, John
Cash, William
Chope, Christopher
Clark, Dr Michael (Rayleigh)
Collins, Tim
Cran, James
Curry, Rt Hon David
Davies, Quentin (Grantham)
Davis, Rt Hon David (Haltemprice)
Day, Stephen
Donaldson, Jeffrey
Dorrell, Rt Hon Stephen
Duncan Smith, Iain
Evans, Nigel
Faber, David
Fabricant, Michael
Fallon, Michael
Flight, Howard
Forth, Rt Hon Eric
Fox, Dr Liam
Fraser, Christopher
Gale, Roger
Gibb, Nick
Gill, Christopher
Gillan, Mrs Cheryl
Gorman, Mrs Teresa
Gray, James
Green, Damian
Greenway, John
Grieve, Dominic
Hague, Rt Hon William
Hamilton, Rt Hon Sir Archie
Hammond, Philip
Hawkins, Nick
Hayes, John
Heald, Oliver
Heathcoat-Amory, Rt Hon David
Hogg, Rt Hon Douglas
Horam, John
Howard, Rt Hon Michael
Howarth, Gerald (Aldershot)
Hunter, Andrew
Jack, Rt Hon Michael
Jenkin, Bernard
Key, Robert
King, Rt Hon Tom (Bridgwater)
Kirkbride, Miss Julie
Lait, Mrs Jacqui
Leigh, Edward
Letwin, Oliver
Lewis, Dr Julian (New Forest E)
Lidington, David
Lloyd, Rt Hon Sir Peter (Fareham)
Loughton, Tim
Luff, Peter
Lyell, Rt Hon Sir Nicholas
McIntosh, Miss Anne
MacKay, Rt Hon Andrew
Maclean, Rt Hon David
McLoughlin, Patrick
Madel, Sir David
Major, Rt Hon John
May, Mrs Theresa
Moss, Malcolm
Nicholls, Patrick
Norman, Archie
O'Brien, Stephen (Eddisbury)
Paice, James
Paterson, Owen
Pickles, Eric
Portillo, Rt Hon Michael
Prior, David
Redwood, Rt Hon John
Robathan, Andrew
Robertson, Laurence
Roe, Mrs Marion (Broxbourne)
Rowe, Andrew (Faversham)
St Aubyn, Nick
Sayeed, Jonathan
Shephard, Rt Hon Mrs Gillian
Shepherd, Richard
Smyth, Rev Martin (Belfast S)
Soames, Nicholas
Spelman, Mrs Caroline
Spicer, Sir Michael
Spring, Richard
Stanley, Rt Hon Sir John
Steen, Anthony
Streeter, Gary
Swayne, Desmond
Syms, Robert
Tapsell, Sir Peter
Taylor, Ian (Esher & Walton)
Taylor, John M (Solihull)
Taylor, Sir Teddy
Trend, Michael
Tyrie, Andrew
Viggers, Peter
Walter, Robert
Waterson, Nigel
Wells, Bowen
Whitney, Sir Raymond
Whittingdale, John
Widdecombe, Rt Hon Miss Ann
Willetts, David
Winterton, Mrs Ann (Congleton)
Winterton, Nicholas (Macclesfield)
Yeo, Tim
Young, Rt Hon Sir George

Tellers for the Noes:

Mr. Keith Simpson and
Mr. John Randall.

Question accordingly agreed to.

27 Jan 2000 : Column 670

Clause read a Second time, and added to Bill.

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