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Mr. Tony McWalter (Hemel Hempstead): My hon. Friend has not focused in his quite lengthy speech on what the consequences of incorporating the wording in the Bill might be. Although, with regard to the football analogy
that he mentioned, I might accept that it is very boring that in Scottish football Celtic or Rangers always win, and that they have a virtual monopoly on all the trophies, I am not clear what the Government could do to arrange matters so that Scottish football became more interesting, or how other forms of dominance of various markets would be resisted in detail by my hon. Friend's amendment.
Mr. Barnes: My amendment would not do what my hon. Friend seeks. We would need other amendments and legislation to do that. However, the BSkyB case was considered because of the implications of putting Manchester United at the centre of the market. That would have had an impact on other teams and their ability to survive. However, my amendment would not lead to the transfer of resources to assist people. We would need alternative measures to do that.
5.15 pm
My amendment relates to references to the Competition Commission by appropriate bodies, particularly by the OFT. It should be able to argue its case and Ministers should be able to consider cases such as the one that occurred in Clay Cross. They should be able to assess the masses of evidence coming to them and the alternative viewpoint that might be provided by the OFT. They should grasp the nettle and be prepared to say that certain cases would have an adverse impact on an area. They should allow the Competition Commission to consider such cases. It might not necessarily produce the answers that I want, but such avenues should be open.
I know that the Government are worried about excessive intervention in the economy and about the dangers of knocking back competitive elements within it. However, surely, in an age of massive technological change in which we are moving forward to new types of industry, it is possible to approach the issue in as organised and as regulated a way as possible so that people's interests are protected as they develop new skills and are given new opportunities. We do not do that.
My attention was drawn to the Bill by an anonymous letter that I received from the British Bankers Association. [Interruption.] I meant not an anonymous letter, but an internal memo that was sent to me anonymously. Someone said that I might be interested in what the Bill will do. Although the British Bankers Association later claimed that the memo was an elaborate hoax, it is so detailed that it does not appear to be one. It points out that the association's members should keep quiet about the issues until the Bill slips through the House. It suggested that the Bill would not cause much bother.
When I came into the Chamber after receiving the letter, I discovered that a cosy teach-in was taking place between those on the two Opposition Front Benches and those on the Government Front Bench. No Divisions were taking place and there was not much hassle. Conservative Members obviously want much more from the Bill but they probably feel that they have done very well. The memo told the association's members to be non-committal if an MP approached them and to wait until the Bill becomes law. They would then be able to use it. The memo then described exactly what was in the Bill in terms of the hobgoblins that I have mentioned.
I hope that we can remove some of the hobgoblins and that we, at last, will have the opportunity to say that the public interest is back on the agenda. It is worth holding on to and some of us should think about promoting it in a different set of circumstances. Perhaps we could introduce legislation, as my hon. Friend the Member for Hemel Hempstead (Mr. McWalter) suggested. I feel strongly about that and I am minded to divide the House if the Government cannot demonstrate that they will at least pick up on the comments made by John Golding.
Dr. Cable: The arguments are well trodden. They were made in Committee, but as important principles are at stake we need to continue to debate them at least until the Bill reaches the other place.
I have several points to make. The first relates to clause 21, which deals with the facility with which merger references can be made. Like the hon. Member for Eastbourne (Mr. Waterson), I am struck by an apparent contradiction. The Minister said on Second Reading that she did not expect more merger references to be made. I found that difficult to square with the terms of the Bill, which clearly imply that merger references will occur almost as a matter of routine. However, that meant that I, unlike the hon. Gentleman, was pleased with the Bill, because more merger references are desirable.
There is a long history of mergers in the United Kingdom, the United States and elsewhere; the practice has been fashionable. They have been driven by management, which has a vested interest in size, and by the fee incentive for the merchant banking institutions. Invariably, as much of the economic and management literature shows, not only do mergers reduce competition to the detriment of consumers, but they do not benefit shareholders much either. An altogether more sceptical view is necessary, and that does not square with how the Minister sees the Bill rolling out. It is useful that the amendments allow us to continue to tease out what will happen.
I do not share either the geographical or the ideological stance of the hon. Member for North-East Derbyshire (Mr. Barnes), but an important point was buried in his contribution, and we need to keep it alive. I would approach the problem in terms of accountability. I agree in general with the idea of political independence, and that there should not be routine political interference in merger references. In that sense, the Bill takes us a step forward.
However, we have lost what elected politicians bring to bear to policy issues. We are elected to take account of the public interest and there is a fear that we are throwing out the baby of public accountability with the bathwater of political interference. We need to find a way to put it back. I would prefer to do that by having much stronger political accountability.
Indeed, I argued in Committee that we need a mechanism so that the chairman and other officers of the OFT receive the political scrutiny to which the Monetary Policy Committee is subjected by the Treasury Committee. It comes before Parliament at regular intervals and MPs, through the Select Committee system, have a veto over appointments. That helps to ensure that the officials appointed by Ministers to perform a specific task are kept aware of the public interest. However, the Government are unwilling to go down that road,
so another way to tackle the problem is required. In that respect, the approach of the hon. Member for North-East Derbyshire is helpful.The hon. Gentleman's approach is helpful for another reason, too. Some of my colleagues and I have a vivid recollection of the Utilities Bill, which was in many ways a good piece of legislation. However, the regulator's terms of reference on competition were narrowly defined. Many problems were generated by the automatic application of the new legislation to the new electricity trading arrangements—NETA—auctioning system, which crippled the combined heat and power sector and the renewables sector. The regulator could only throw up his hands and say, "Look. Parliament hasn't given me the flexibility to take account of the public interest." It is important that we do not repeat that mistake. Some form of words—it does not necessarily have to be the form of words suggested by the hon. Member for North–East Derbyshire—must be found. If it cannot be found this afternoon, I hope that it will be found in another place.
One of the amendments tabled by the hon. Member for Eastbourne is right. The conflicts, or at least the incompatibilities, between British and European legislation on the competition sector as it relates to merger references, have worried us from the outset. As we have discussed the matter, it has become clear that some of the initial concerns of business were rather exaggerated. The European Commission is clearly reforming its competition practices in ways that will make them somewhat more compatible with our own legislation. None the less, there are areas in which we are proposing something fundamentally different from European practice. It seems unnecessary, particularly in the cases that the hon. Member for Eastbourne has mentioned. That could be remedied by amendment, so I commend the changes.
John McDonnell (Hayes and Harlington): I am following the lead of my hon. Friend the Member for North-East Derbyshire (Mr. Barnes) in seeking some form of assistance and succour from those on the Front Bench on this issue, because I am desperate to vote for the Government at least once this week. Some passing phenomenon described us as "all Thatcherites now". I note that the Prime Minister denied that yesterday, but my hon. Friend has smaller ambitions: he is desperate for us all to be a bit Heathite now, and come back to some concept of the public interest. There is the potential for avoiding a vote on amendment No. 202, although I, like my hon. Friend, will call for a vote on it unless the Minister can convince us otherwise. Obviously, we would like to put that request formally to you, Mr. Deputy Speaker.
We want some assistance—an explanation of how the public interest is to be maintained as a result of the Bill. Clause 57 refers to the public interest being maintained for national security, but there is also a reference to public security, based on previous legislation that we have debated in the House.
I would welcome a view on whether public security means a safety regime for the general public, whether it means security of employment for the workers employed in a company, and whether it involves protection of the local environment in which a company is located, the
health of the community that lives around that company's premises, and the quality of life of the work force and all those who have any relationship with the company.If we can gain some assurances on the record tonight that public security as referred to in clause 57 encompasses all those elements, I do not think that there will be a need for a vote on amendment No. 202. However, if there is not clarity from those on the Front Bench that the public security definition within clause 57 encompasses all those, we will need to press the matter to a vote this evening, if only to ask that the other place consider restoring the public interest definition in some form. I agree with our opposite number on the Liberal Democrat Benches, the hon. Member for Twickenham (Dr. Cable), about that.
This may not be the exactly correct form of words, but there needs to be a form of words that reiterates that fact clearly. Why? Briefly, because as demonstrated in the post-privatisation world, respect for the public interest is needed more now than ever before. We have seen some horrendous examples of the public interest being ignored, which has had an effect on the community overall. That is why I ask for those assurances.
There will be a danger if the public interest is not clearly defined in the Bill. The Government may not want to exercise existing powers, or any powers, to protect the public interest, but the hands of future Secretaries of State, future Governments—who may not be Thatcherite, as someone described us, but may want to be more interventionist in the interests of the public overall—are being fettered.
The problem with the Bill is that there is no sense of the common good. There is no sense of the responsibility of Government to protect the common interest of the community overall. I urge those on the Front Bench at least to define clearly how they see clause 57 operating in relation to the reference to public security. If it encompasses all the elements that I have described, there is no need for the vote. If it does not, we will need to vote this evening, so that we can signal to the other place to make the appropriate amendment.
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