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8.19 pm

Mr. Carmichael: It is an unexpected pleasure for me to address the House on Third Reading and from this position in the Chamber. Hon. Members will be aware that my hon. Friend the Member for Twickenham (Dr. Cable) usually leads for the Liberal Democrat party on such occasions. Unfortunately, he has been on unavoidable business elsewhere today, and I suspect that he has been caught out by our alacrity and great progress in finishing our debates on Report as early as we did.

If my short speech in this debate is punctuated by a series of dull thuds, I can probably account for that by saying that it is the sound of senior members of the leader's office and the Whips Office throwing themselves out of high windows when they see my name on the monitor at this stage in the proceedings. What I am about to say may or may not be party policy; I merely ask Members not to assume that I say it simply because of where I am standing. The absence of my hon. Friend the Member for Twickenham has given me my big chance, however, which I shall take with all the skill and precision of an Irish footballer taking a penalty—[Laughter.] As a Scotsman, I feel that I am one of the few people in the Chamber in a position to make fun of anybody else's soccer skills.

On Second Reading, the Liberal Democrats' position was that we agreed with much of the philosophy behind the Bill, and we recognised the contribution that the principles of competition could make to the development of a culture of entrepreneurship. That was our approach throughout the Committee stage and on Report. As is the case with all parties, we will not be forcing a Division on the Bill. We wish it good progress in another place.

This is the second Bill on which I have served in Standing Committee since I came to the House last year. Again, I was impressed at the manner in which the issues raised were dealt with. I pay particular tribute to the Under-Secretary and her colleague, the then Minister for E-Commerce and Competitiveness, who has been made Minister of State, Cabinet Office in the meantime. I also pay tribute, despite our occasional differences, to the

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contribution made to the debate by the hon. Member for Eastbourne (Mr. Waterson), who was always well briefed and put his points with force and eloquence, and to my absent hon. Friend the Member for Twickenham.

My view of this Enterprise Bill—I wonder whether it might please the hon. Member for Eastbourne were a small amendment made to its title at a later stage, as I suspect that it would save us all a lot of grief—is that it is all right as far as it goes. The Government's approach to competition as presented in the Bill, however, lacks a little imagination. It seems to be driven by a conventional and—dare I say it?—conservative view of competition and what it can achieve. As we have tried to suggest in Committee and on the Floor of the House, it seems that it will not allow sufficiently for concerns to be addressed in relation to local monopolies, for example.

It also seems that the Labour party has a remarkable ideological commitment to competition as a tool of economic management, about which I am surprised and disappointed, as it is a one-size-fits-all approach. There are parts of the country, one of which I represent, where competition alone will not be enough. There is still a role for the Government in economic management. Clearly, they will not have the primary role, but were Governments simply to say, "That is a matter for the market to take care of, and we are not going to deal with it", that would be an abdication of part of the responsibility that voters feel that they entrust to us. The more we abdicate our responsibilities, the more disengaged we will become from our electorate.

I was disappointed that the amendments tabled by the hon. Member for North-East Derbyshire (Mr. Barnes)—who, I am pleased to see, is now in his place—were not given a fairer wind. I was pleased that Liberal Democrats were able to support them. On Thursday last week, my hon. Friend the Member for Southport (Dr. Pugh) suggested that the hon. Member for North-East Derbyshire was trying to smuggle in social revolution by the back door. It is difficult to see the hon. Member for North-East Derbyshire, who is one of the most thoughtful and, at least in his delivery, gentle Members of the House, cast in the role of the foot-in-the-door salesmen whom we were so deprecating earlier today. If he was seeking to use the Bill as a tool for social change however, more power to his elbow. My hon. Friend the Member for Twickenham made the point that the need for accountability underpinned his amendments; it is all very well for Government to use competition as they do but, at the end of the day, there must still be political input. The amendment seeking to introduce the public interest to the considerations underpinning the Bill would have been a useful reinstatement of that accountability. The Bill is the poorer for not having it.

The right hon. Member for Wokingham (Mr. Redwood) offered earlier the example of Consignia and the Post Office. Why, he asked, if the Government are in favour of competition, are they delaying its introduction in the Post Office? I would hope that the answer to that is obvious to all Members of the House. It would be an absolute disaster if unlimited competition were introduced to the Post Office. The universal service obligation would disappear like snow off a dike. That ideologically driven approach to competition, which accepts no role for the state, is very dangerous.

Mr. Redwood: Does the hon. Gentleman not know that the introduction of competition to postal services is a

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requirement under European law, and a very good European policy? Is he saying that he is not a good European? What will he do about the fact that he is at variance with a decision already taken by the European Union?

Madam Deputy Speaker: Order. I remind all hon. Members that, on Third Reading, we should be discussing the content of this Bill.

Mr. Carmichael: Indeed, Madam Deputy Speaker. It is for others to decide whether I am a good European. I merely point out to the right hon. Member for Wokingham that he poses a different question, because the European proposals for postal services liberalisation operate to a different time scale, and he was asking why the Government were delaying it. It is therefore not the same point.

Unfortunately, we did not discuss the operation of cartels on Report. I am comfortable in principle with the criminalisation of cartels. I have severe reservations, however, about the practical aspects of their prosecution. Were I still in practice as a solicitor, I would much prefer to defend a client on a charge under the cartel offence provisions than to try to gain a prosecution.

I regret that we were not able to make more progress today in relation to the protection of consumers. I welcome, as far as it goes, the Under-Secretary's commitment to a seminar on this issue. I hope that it will produce some inspiration for her, as I feel that that has been slightly lacking.

The amendments tabled by the hon. Member for Eastbourne, although he slightly undersold them, sought to introduce a system based on certain principles. I suggested to him that the great attraction of such a system was that principles are there for application by the court, and that they can be interpreted to defeat new forms of the old evil or mischief. His response was that, as long as that was consistent with current law, that was fine. In Scotland, of course, which has a principle-based system, that is entirely consistent with our current law. Had we never departed from the true principles of Roman law that underpin Scots law, I suspect that we might not be in the mess that we are in today.

In Committee and on Report, the Government made several concessions which I welcome. One of my constant refrains in Committee was that not sufficient account had been taken of what is, in many respects, a distinctly Scottish position. It remains my impression that the Scottish position has simply fallen off the radar screen for a number of Whitehall Departments since devolution. In many respects, the Bill forcefully illustrates the need for that to change.

A great many reserve powers remain at Westminster and they will have a direct impact on Scots law. To that extent, I am grateful for the help that I have had in the deliberations on the Bill from members of the Law Society of Scotland and the Institute of Chartered Accountants in Scotland. I place my gratitude to them on the record. However, if future Bills of this sort do not take on board the Scottish position at an earlier stage, that will be very dangerous for the Union.

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Although good progress has been made, a lot more could be done. I shall watch the Bill's further progress in the other place with interest, but I am more than pleased to give it the good wishes of the Liberal Democrats as it leaves the House tonight.

8.31 pm

Mr. Redwood: I have declared my interests in the register.

I welcome the Government's conversion to the idea that competition is a good thing, but my worry is that the Bill is exceedingly schizophrenic. Provisions in it rightly say that competition is the way to produce lower prices, more choice, better innovation and better standards of service; the Bill also says that, wherever possible, we need to find better ways of enforcing that competition message. I entirely agree. However, when we look at the Government's practice in the sectors that they regulate, control and own, we see that they practise the opposite of what they preach. If the Bill becomes an Act, it will allow them to carry on merrily in their bad old ways. It will be a question of "do as I tell you, not as I do".

The Bill will tell the competitive private sector that it needs to be even more virtuous in believing in the benefits of competition, and it will impose even stronger penalties on any director or business person who does not behave and does not understand the need to avoid price rigging, monopoly practice and damaging activities vis-à-vis the market. Yet the Government, in their policies towards regulated businesses, will often move in exactly the opposite direction. The Bill, if passed in its current shape, will allow them to carry on doing just that.

As a former Minister with responsibility for competition, I very well remember attempting to enforce the Tebbit doctrine on the private sector on behalf of the then Secretary of State. I attempted to liberalise and open up those parts of the public and regulated monopoly sectors that needed liberalising, to start to spread some of the benefits of competition to those sectors. For example, we liberalised telecommunications and the results were astonishingly good. I am pleased that the Government do not wish to reverse that. We have much more service, innovation, capacity and choice, and much lower prices, as a result of the liberalisation of telecommunications. Why are the Government therefore unwilling to learn those lessons when it comes to sectors such as the railways, the provision of road space or postal services? If anything, it seems that they are trying to move in the opposite direction.

When I was the Minister responsible for competition, I accepted fully that it was my duty and that of the Secretary of State to come to the House when necessary to explain our activities. I saw nothing wrong with that. However, I have worries about the Bill if the Government are to use the creation of an independent Competition Commission as an excuse to avoid coming to the House to talk about the most sensitive and important business issues that might come up.

I hope that Ministers will recognise that, even if they have delegated more of their authority and power through the Bill to more independent bodies, they will still feel that they have to explain to the House of Commons if things go wrong or are contentious, or if people on either side of the House feel that the decisions taken by that independent body are not right, just, fair or in the wider

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national interest. It is most important in a democratic society that still pays salaries to many people in the Department of Trade and Industry that we should have the right of access to Ministers even if, under the Bill, some of their activities will be delegated.

I remember that there were occasions when Conservative Members, let alone the then Opposition, rightly wanted to expose to scrutiny and debate the decisions that I and the then Secretary of State had taken in rather tricky merger cases. We had deliberately applied the Tebbit doctrine and tried to provide a fair and sensible regime. However, on occasion, the results seemed perverse to people with constituency interests, with worries about jobs or with other public considerations. It was therefore our duty to come to the House to explain why we had come to the view that we had taken. I hope that we shall still have access to Ministers when difficult decisions are taken under the new regime.

When I was able to work through and with the then Government to liberalise things, it was my experience that liberalisation always yielded much better results. That is why I find the present Government's schizophrenia as regards competition surprising and worrying. For example, transport is covered by the regulation provisions of the Bill, but the Government take a divergent approach to different parts of that sector.

The Government are proud of following a strongly pro-competitive approach to air travel services. They promote more competitive airlines, they welcome ever cheaper fares and the additional services offered by low-cost airlines, and they are vigilant about ensuring that the major players do not have an unreasonable advantage. If they do, the Government may even intervene to move against those who they think have an unreasonable advantage, so as to open up the market to a wider number of players. I fully welcome that. It has brought visible benefits and means that many people can go to exotic destinations to which they could not have afforded to travel 10 or 15 years ago. An explosion in jobs, success and prosperity has followed on the back of that obviously competitive market working well, with the encouragement of Her Majesty's Government.

Why then is the railway industry treated so differently that the Government want to take away the rather modest elements of competition that the previous Government introduced? The Government do not appear to want to strengthen them and take them further in the way they wish to in other sectors. Why do they want only one train operating company to go into each London terminus? Given the strong statements in the Bill about the advantages of competition, it will be a great pity if and when the Government decide to use the obvious windows in the regulated provisions to allow a restriction of the competition and choice going into each major London terminus. For reasons that we do not understand, they think that that is better for this industry, even though it demonstrably does not work in any other industry where monopoly or cartel has been allowed. Their approach is clearly against the spirit of the general thrust of the Bill.

Why are there no worries about the monopoly over the railway network—Railtrack itself—when the Government support the opening of other networks and encourage competitive challenges to them in much more interesting ways? Why do the Government seem not even to be keen to encourage proper competition for proposals to replace Railtrack in administration with something rather better?

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They have come up with the monopoly solution that Railtrack should become a company limited by guarantee, a vehicle not before attempted on such a scale for anything so heroic without first encouraging proper debate and proper canvassing of the marketplace to determine what alternative options might produce a better result under a more competitive challenge. Why do the Government fully support a monopoly canal system entirely under their control? Have they not noticed that that system has continued to decline, with its high prices and inability to attract any commercial use of the assets? Things might be different under a competitive challenge in the private sector.

In the case of road transport, why are the Government keen on promoting ever more competition for the provision of road vehicles? Although I welcome that—it is producing phenomenal choice and lower prices—when it comes to the provision of road capacity, we have to face a solemn public monopoly that never builds any roads. Indeed, it seems to be proud of the fact that there are not enough roads and then blames the people who want to use them for the fact that the roads are so awful. The Government go even further by encouraging a reduction in road space from the limited amount that is available by a stunning array of road works, impediments, chicanes, blocks, humps and traffic lights that ensure people cannot use the network properly.

When I challenged the Minister on postal competition, she said she could not understand what it had to do with either the fundamental purpose of her Department, as she called it, of improving British productivity, or the Bill, but it is central to both issues. Postal competition is clearly governed by the Bill because it has to exempt restricted competition areas, such as post or road supply, thus showing that the Government clearly want to exempt themselves from the competition that they urge on everyone else.

The Minister should also understand that getting more competitive postal services or, for that matter, a much better road and rail system, is fundamental to raising British output and productivity. Does she not understand that some of the main problems holding Britain back from achieving even higher levels of prosperity, productivity and commercial success are the services that are delivered as monopolies by the state in the public sector? What are we worst at? Roads and railway lines, and they were provided by the state for most of the last century. Railway lines are even going to be provided badly again by the state through the administration and then the back-door renationalisation of the company limited by guarantee—technically a private sector company, but I am sure a pensioner of the state in all but name.

The Government are finding it difficult to provide health services as a centralised planned monopoly, however much money they tip in. There is a shortage of supply and people are not happy with the service. We notice that the Government have considerable difficulties in supplying a high-quality education service to the standards everyone would like, because once again they wish to frustrate choice. They do not want parents to have a real choice of school and are not prepared to expand the more popular schools so that they can give places to the children of parents who seek them.

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