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Session 2000-01
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Standing Committee Debates
Criminal Justice and Police Bill

Criminal Justice and Police Bill

Standing Committee F

Tuesday 6 March 2001


[Mrs. Irene Adams in the Chair]

Criminal Justice and Police Bill

10.30 am

Clause 45

Extension of existing disclosure Powers

Amendment made: No. 136, in clause 45, page 35, line 24, at end insert—

    `( ) In this section and section 46, ''information'', in relation to a power of disclosure conferred by a provision to which this section applies, includes—

    (a) documents; and

    (b) anything that falls to be treated as information for the purposes of the provision.'.—[Mr. Charles Clarke.]

Mr. Oliver Heald (North-East Hertfordshire): I beg to move amendment No. 204, in page 35, line 28, at end add—

    `(7) Nothing in this section shall permit disclosure of information under this Act in relation to the provisions listed in Schedule (Provisions excluded from Section 45).

    (8) Disclosure of information under this section for overseas criminal proceedings or investigations shall only be permitted where the conduct in question to which the proposed disclosure of the information relates amounts to a criminal offence in both the United Kingdom and in the country or countries to which the information is to be disclosed.

    (9) Disclosure of information shall not be permitted where the information in question relates to an agreement or decision by an association of undertakings or concerted practice which may affect trade between Member States of the EU.

The Chairman: With this we may take the following: Amendment No. 140, in schedule 1, page 101, leave out lines 22 and 23.

Amendment No. 141, in page 102, leave out lines 9 and 10.

Amendment No. 142, in page 102, leave out lines 24 and 25.

Amendment No. 143, in page 102, leave out lines 26 and 27.

Amendment No. 144, in page 103, leave out lines 1 and 2.

Amendment No. 145, in page 103, leave out lines 3 and 4.

Amendment No. 146, in page 103, leave out lines 5 and 6.

Amendment No. 147, in page 103, leave out lines 7 and 8.

Amendment No. 148, in page 103, leave out lines 9 and 10.

Amendment No. 149, in page 103, leave out lines 11 and 12.

Amendment No. 150, in page 103, leave out lines 15 and 16.

Amendment No. 151, in page 103, leave out lines 17 and 18.

Amendment No. 152, in page 103, leave out lines 21and 22.

Amendment No. 153, in page 103, leave out lines 23 and 24.

Amendment No. 154, in page 103, leave out lines 25 and 26.

Amendment No. 155, in page 103, leave out lines 27 to 29.

Amendment No. 156, in page 104, leave out line 15.

Amendment No. 157, in page 105, leave out lines 1 and 2.

Amendment No. 158, in page 105, leave out lines 3 and 4.

New schedule 1 —`Provisions Excluded from Section 45—

    1. Fair Trading Act 1973, s.133(3).

    2. Competition Act 1980, s.19(2).

    3. Telecommunications Act 1984, s.101(2).

    4. Companies Act 1985, s.449(1).

    5. Financial Services Act 1986, s.180(1).

    6. Banking Act 1987, s.85(1).

    7. Water Industry Act 1991, s.206(3).

    8. Railways Act 1993, s.145(2).

    9. Coal Industry Act 1994, s.59(2).

    10. Competition Act 1998, s.55(3).

    11. Electronic Communications Act 2000, s.4(2).

    12. Postal Services Act 2000, paragraph 3(1) of Schedule 7.

    13. Utilities Act 2000, s.105(4).'.

Mr. Heald: I welcome you to the Chair, Mrs. Adams. I am sure that you will look after us well, and be firm but courteous and kindly, as ever.

Amendment No. 204 would mean that disclosure of information provided to the authorities under the Acts set out in new schedule 1 was not permitted. It would permit disclosure only when the subject matter of a foreign investigation amounted to a crime in this country, and when it would exclude information that was subject to a European Union agreement.

The background to the amendments is the concern of business that the Government are changing policy in a way that may damage United Kingdom business. It is thought that the purpose of the clause is to allow important, confidential commercial information to be given to the United States anti-trust authorities in order to put UK businesses at peril of criminal action being taken against them for actions that are considered legal and proper in the UK and the EU.

It will also expose businesses that might, under United Kingdom law, have a civil liability for their actions to United States criminal laws. That is a huge departure from the previous consensus that we should protect British business, especially when its actions are entirely proper and legal under United Kingdom law, but also against a criminal liability when only a civil one exists in this country.

The change of policy has not been announced to Parliament; the provision is tacked on to a Bill that is about other matters, without proper consultation with the Confederation of British Industry, and at a damaging time in respect of EU efforts to tackle anti-competitive behaviour in Europe.

The United States approach to anti-trust is thought by many, including the CBI, to be determined by grounds that are beyond competition issues and subject to political pressures. The Assistant Attorney-General Ann Bingaman in the United States, who freely admitted that the US Government use their anti-trust law to benefit American companies by breaking open trade barriers extra-territorially, said:

    ``The primary goal of the anti-trust division of the Department of Justice has been to open markets and ensure that they are competitive, for the benefit of American businesses and consumers . . . the Division cannot limit its enforcement efforts to American firms or to conduct within the United States. Restraints imposed by foreign firms can harm American consumers and the American economy just as surely as those imposed by domestic firms. Our antitrust laws serve to protect American exporters from anti-competitive restraints imposed by foreign firms in foreign markets''.

The concern can be expressed a little more fully. The UK has severe penalties—up to three times 10 per cent. of UK turnover—for the breach of its anti-trust laws, but those are civil, not criminal, laws. That is different from the situation in countries such as the USA. As a result, although information could be disclosed to the US authorities for criminal anti-trust investigations or proceedings in the USA, the UK would not on the face of it be able to benefit to the same extent from any reciprocal arrangement here, as our law is not criminal.

The UK has a very different competition regime from that of the USA, so activities that are permitted by UK competition law could, in the USA, amount to a criminal act leading to fines and even imprisonment. UK anti-trust law largely mirrors its EU equivalent. Although both the UK and the USA outlaw similar types of market behaviour, UK and EU law allow some scope to exempt from being prohibited agreements or conduct that, on an initial view, restrict competition but have beneficial effects, based on the application of policy considerations beyond mere competition issues. It is not clear what legitimate interest the UK can have in helping to enforce US anti-trust rules that relate only to actions affecting the US market.

The European Commission plans to decentralise enforcement of EU anti-trust law to the national courts and competition authorities. In an attempt to ensure consistent application of the law in the reformed system, the Commission proposes to set up a network between it and the national competition authorities for the passing of information received in relation to complaints or investigations. Any information that is received in the network will have to be kept confidential. If not, injured parties would have rights of action. As a result, to disclose confidential information to the USA could be lawful as a matter of British constitutional law only if the activities on which the information was to be exchanged between the UK and USA related solely to activities confined to the UK, with no EU cross-border effect. Therefore, exchanging confidential information with the USA could put the UK in breach of its EU treaty obligations.

Inherent in extending the passing of information is the increased risk of disclosure of that information, inadvertently or otherwise. The tendency towards wide disclosure of information that exists in the USA exacerbates that risk, as does the litigious nature of US society generally. In US law, in a criminal anti-trust action, the Department of Justice is obliged to produce to the defendant any and all exonerating information. A criminal defendant has a constitutional right to receive all exculpatory and impeachment evidence in the prosecution's possession. In other words, if information falls into the hands of the Department of Justice, it is under a constitutional obligation to disclose it. British companies that give information as they should in respect of mergers and a range of other activities set out in new schedule 1 run the risk that, if a court action is pursued in the USA, the defendant will be able to see a range of confidential information that may be damaging to British business and give an advantage to a competitor.

At present, the UK operates a notification system for competition law, whereby companies that are not sure whether their agreements fall within the prohibitions in the Competition Act 1998 can approach the Office of Fair Trading for a decision or informal advice. The United States does not have such a system, because of its freedom of information laws and because it is a criminal process. Our view is that it is in the public interest for companies to be able to have the benefit of such advice from the OFT. It would be a great pity if the provisions meant that that no longer happened.

There is also a question about the way in which the Government are going about this. I have set out the CBI's concerns clearly and it is particularly upset that there has not been any real consultation with business. The fact is that the provisions have been tacked on to a Bill that deals with other matters, no doubt to curry favour with the Americans.


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