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Miss Melanie Johnson: Our amendments Nos. 156 and 157 deal with the need to exclude any information relating to the affairs of a particular person or business
- "the publication of which would or might seriously and prejudicially affect the interests of that person"
As originally drafted, part 9 did not cover information obtained by the OFT under part 1. Clause 235 in its original form listed considerations to which public authorities must have regard before disclosing competition information, as defined. I shall not go into all the details, but following discussions on part 1, the Government reviewed the application of provisions in part 9, including clause 235. The upshot was the tabling of amendments that effectively render clauses 4, 5 and 6(3) redundant. Protection from unwarranted disclosure will now be provided in part 9. That will achieve the consistency throughout the Bill that Opposition Members—particularly the hon. Member for Eastbourne—wanted and which we agreed would be beneficial.
Amendment No. 223 seeks to tighten the definition of a consumer code of practice, and to ensure that the widest possible range of organisations can act as code sponsors. The hon. Member for South-West Hertfordshire (Mr. Page), sadly, could not be with us in Committee—not everyone had that honour—but we all agreed then that the amendment would be helpful in giving the OFT clear powers to implement its new codes of practice regime, whose purpose was to help consumers to find reliable businesses. It was, I think, the hon. Member for Cities of London and Westminster (Mr. Field) who described this as an "enterprise regulation Bill". I trust that "regulation" in this context would include an element of
self-regulation, for here we see an element that is not entirely to do with regulation in the classic sense, but which is much more akin to self-regulation.The hon. Member for Southport (Dr. Pugh) noted that as drafted the clause would allow guidance-only codes to be approved. That was not our intention. The clause has been redrafted to make it clear that only codes regulating the behaviour of those signed up to them will be approved. To be approved, a code will have to comply with the OFT's criteria, which do indeed regulate the behaviour of members. Consumers will have the reassurance of knowing that if there is a problem, it can be put right: to obtain OFT approval, a code must contain mechanisms for both redress and compliance. Problems will be resolved, and failure to comply with the code will be dealt with.
We removed the words "relevant association" in case that was construed as limiting sponsors to trade associations. I know that the hon. Member for South–West Hertfordshire is a great fan of trade associations, but we wanted to ensure that the widest possible range of organisations would be able to act as sponsors. They might include local authority trading standards departments with good-trader schemes, or owners of shopping centres who had signed up their tenants to a code of practice.
Trade associations' redress systems will have to be transparent and compliant to meet the OFT's criteria. The whole system is voluntary. The OFT will publish criteria with which sponsors must comply to seek approval. It will all be spelled out. There has already been some consultation, in which I think the CBI has been involved.
As I said, we are not dealing with just lead trade associations. We wanted the arrangement to be as open as possible, to ensure that there were plenty of methods of entry for small businesses, which might not be members of the smaller associations. The most important thing is for organisations to meet the criteria, so that consumers have the protection that they expect from compliance with the code. Businesses will not have to belong to a trade association and pay for a full range of services to gain the right to use the logo.
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Mr. Page: I did not mean my remarks to apply exclusively to trade associations as such, but is there not a danger that if every small organisation—I will not say "whipstitch organisation"—qualifies, the logo will be devalued? Moreover, such organisations will not have the back-up and the managerial strength to provide the various required protections for consumer complaints. Organisations will have to be of a certain size to have any credibility in this regard.
Miss Johnson: Whoever fulfils the role will have to meet the same criteria. Obviously, that will be an issue if an organisation is too small to do so effectively, but there are a range of code sponsors that may not be small, but are not necessarily trade associations. I have mentioned local authorities, chambers of commerce and shopping centres, but registered charities could also be involved. It is not necessarily a question of scale.
What is important at the end of the day is that consumers get what they expect from the logo and the code. We believe that clause 8 will give the OFT the
power that it needs to run the codes regime in the way that it envisaged in its original consultation document, issued in February 2001.New clause 3, as we know, concerns fines. I will not go into detail, but, like Opposition Members, I am keen to encourage projects or activities that benefit consumers, and clause 267 already allows the Secretary of State to do that. The consumer grants fund that it will establish could be used to give financial assistance to projects in areas where a general class of consumers has suffered harm— I gave examples in Committee—but where it is not possible for all the individual consumers concerned to be identified or to seek redress.
In that sense, clause 267 surely has a wider application than the new clause, which I think is sensible. Although one of our priorities will be to fund projects relating to the markets in which the OFT has established a breach of competition rule, the clause will ensure consideration of financial assistance for a wide range of products or other work that would benefit consumers. That will not be confined to consumers who have suffered from anti- competitive practices for which fines have been imposed under the Competition Act 1998; it will benefit consumers more widely, and will ensure that a more strategic view is taken, both of consumer issues that need to be addressed and of the funding available.
As was said in Committee, fines are by their nature unpredictable in terms of both timing and amount. Consumer benefits linked to them would also be erratic and unpredictable. Furthermore, fines can be imposed under the Competition Act only when the undertaking concerned has acted intentionally or negligently. Although such cases will frequently be those in which most damage is done to consumers, harm might also be done in other cases.
All that is, of course, in addition to our continuing ability to fund bodies such as the National Consumer Council which promote the interests of consumers.
For the reasons that I have given, I believe that clause 267 as drafted is better for consumers than the new clause and, indeed, makes it unnecessary.
Mr. Waterson: I take the Under-Secretary's point about the income stream from the source. However, is it not part of the point that the use of the money should be linked to the reasons for the fines? Will she confirm that if we do not act, the fines will simply disappear into the public purse?
Miss Johnson: There is no question of the fines disappearing into the public purse. They will be used for the projects and activities that I described.
Amendment No. 3 would require the OFT to produce a regulatory impact assessment every year. I do not have sympathy with the amendment because we could end up with regulatory impact assessments of every Act. That is a heavy bureaucratic burden. The OFT already has to consider the effects of its actions on business and it is therefore inappropriate and unnecessary to require it to quantify those effects in its annual report. We have a regulatory impact assessment of the Bill; we could argue about the detail if hon. Members wish. However, the OFT is not a legislative body and it will exercise only the
powers that Parliament grants it. All the legislation that it enforces has been approved here and accompanied by an initial regulatory impact assessment. Now is the appropriate time to consider the additional costs that the new measure will impose.There are statutory checks on the use of all the OFT's powers. For example, it cannot make a market reference unless it has reasonable grounds for suspecting that the reference criteria are satisfied. I expect that the OFT will not use its powers without good reason. The Bill increases its accountability in the system at all levels.
As I said when we considered Government amendments Nos. 156 and 157, amendments Nos. 6 and 8 have been overtaken by the deletion of clauses 4(5) and 6(3). We have therefore already dealt with those matters.
Amendments Nos. 10 and 11 cover the time allowed for the OFT to respond to super-complaints. The issue is whether 60 or 90 days are sufficient. The Opposition support the former and the Government the latter. There is not much meat in the argument, but I stick to my belief that a period of 90 days is right. We want to ensure that the OFT has sufficient time to consider super-complaints. If there is a case to answer, business will need to formulate a response and the OFT will need time to complete its analysis.
We believe that 90 days is the right period. However, if experience shows that super-complaints can be tackled properly in less than 90 days, the Secretary of State can curtail the statutory time scale by using the powers in clause 11(4). We should start with a time scale of 90 days and ascertain what happens. Amendment No. 11 would delete clause 11(4). As I said earlier, the flexibility should remain, so we cannot support the amendment.
Let us consider the points that my hon. Friend the Member for North-East Derbyshire (Mr. Barnes) made. He tabled amendments about producers and producer interests, which we recall from discussions in Committee. Amendment No. 210 seeks to ensure that the OFT makes the public aware of the ways in which competition may benefit producers as well as consumers and the economy, by providing advice and information.
Clause 6 gives the OFT the function of promoting to the public the benefits of competition for consumers and the economy. That reference to the economy already covers any relevant, if not all, producer interests. Indeed, producers are also consumers and both sets of interests need to be balanced, as my hon. Friend acknowledged. I therefore do not believe that it is necessary or desirable to specify producer interests in the clause.
The emphasis on consumers is surely right. Consumers are often unaware of the importance of competition for lower prices, higher quality and greater choice. Strengthening consumer knowledge of the benefits of competition, which strengthens the consumer voice, has a key role in improving economic performance.
Amendments Nos. 211 to 216 seek to widen the definition of a code of practice to include bodies that safeguard or promote the interests of producers, such as trade unions or business groups. That would allow such codes to be submitted to the OFT for approval under the new codes of practice regime. If the definition were widened, it would be outside of the scope of the scheme as set out by the OFT in its consultation paper. Its focus is solely on business-to-consumer codes of practice.
I do not suggest that there is no room for codes that protect producers, and there are almost certainly several perfectly good business-to-business and business-to- producer codes that benefit those involved. There is no reason for the codes not to follow best practice by making use of the OFT's criteria, if appropriate. However, the codes would not be eligible for OFT approval under the Bill.
Again, that is because we intend to help consumers find reliable businesses. Consumers do not always have access to sufficient data about businesses to make an informed choice. Often, they do not have the knowledge and experience to help them choose, for example, a reliable garage for car repairs. Producers such as trade unions or business groups are clearly more able to find good traders and better deals. That is why the scheme is limited to consumer codes.
Amendments Nos. 218, 220 and 221 would permit producer bodies such as trade unions, as well as designated consumer bodies, to submit super-complaints. Amendments Nos. 219 and 222 would enable super-complaints to be made about market features that harm, or appear to be harming, the interests of producers, who are defined in the measure.
We have made it clear that we view the Bill as a measure for consumers, and the focus on their interests benefits everybody. After all, we are all consumers, and companies that respond to consumers' needs are successful. That is to the advantage of the people who work in those businesses and the long-term viability of the businesses. To that extent, the Bill articulates the same values as my hon. Friend's amendments.
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