Mr. Field: Like the hon. Member for Southport (Dr. Pugh), I have concerns about the controversy that is likely to arise, and I should like to have a general assurance from the Under-Secretary. The Government have made a big song and dance about the Bill and the idea that it is somehow out of the realms of party politics. My concern is that, although that is the aim, there is a real risk that by appointing figures who are controversial or who have had links with particular political parties, businesses or interest groups, there will be even more controversy, even though there will not be as strong a direct link. In fact, issues may come into play that show that there are strong links.
It has been said that the current system works fairly well. I should like to have some guidance as to why the Government believe it so important to move away from that system—which places more direct accountability on the shoulders of particular DTI Ministers—and why it is desirable to move away from the political input that the DTI has had in this area.
Miss Johnson: I welcome the contributions that hon. Members have made to the debate, and the support that has been expressed for various aspects of the provision, including the establishment on new terms of the Office of Fair Trading and the institution of a board. It was suggested that the OFT board should have four or five members. It might be helpful if I specify that we are looking at five to seven members.
Several hon. Members raised the issue of accountability; we agree that it is probably the most important issue. Accountability is necessary, not least from the point of view of the House. The OFT will be accountable to the Secretary of State, Parliament and the public. The chairman of the OFT could be summoned by Select Committees. Indeed, I am delighted that the Trade and Industry Committee already takes an active role in scrutinising the work of the OFT and the Competition Commission. Its report on the OFT's consumer work in 2000 influenced the OFT's consequent work on consumer credit, for example. I understand that the Trade and Industry Committee will talk to the OFT and the Competition Commission on 23 April.
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On the wider points about accountability, we believe that the OFT should follow the general principles of good governance of all bodies corporate. The working arrangements are for the OFT board to agree but we expect them to fit into the general thrust of transparency, openness and accountability set out in the Bill. We will talk a lot about transparency, openness and accountability because those qualities are vital. Indeed, we believe that making the changes will enhance rather than detract from them.
Clauses 3 and 4 require the publication of an annual plan for the year ahead, as well as an annual report. The OFT must consult when preparing its annual plan which, with the annual report, are to be laid in Parliament. The OFT's performance will be monitored against objectives, both by Parliament and the public. The OFT needs to keep the public informed of its work and, under clause 4, to publish other reports of its work.
Dr. Cable: Will the Minister clarify her definition of accountability? She has acknowledged the role of the Trade and Industry Committee. Why should not the Committee have the same scrutiny role on appointments that the Treasury Committee and the Monetary Policy Committee have, as requested by the Chancellor?
Miss Johnson: Unlike the Monetary Policy Committee, the OFT is and will remain a Department; indeed, it is part of the Executive. It is not normal practice for members of the Executive branch to be appointed or approved by Parliament. I cannot think of precedents for that and it would be an unusual step for us to take. However, as I said, we welcome the interest taken by the Trade and Industry Committee. The chairman of the OFT will be called to give an account of its work and to discuss regularly such matters as the annual plan and the annual report with the Trade and Industry Committee. Those are vital elements in the process. I understand the point of the hon. Member for Twickenham on possible parallels with the Monetary Policy Committee, but I hope that he appreciates that there are also significant differences with that Committee.
Mr. Djanogly: On the OFT being part of the Executive, surely the Minister appreciates that we are talking about individuals who are pulled out of business and various walks of life. We are talking about calling to account not Ministers, but a very different kettle of fish.
Miss Johnson: The hon. Gentleman is right; we hope to draw board members from business and to bring with them a range of valuable outside experience and perspective. The board will be an important part of the function of the OFT. However, there are not parallels between members of an organisation or board acting in that capacity in relation, in an executive function, to other parallel parts of Government, effectively Government Departments; there is no read-across where Select Committees vet, have hearings on or appoint members of other parallel board arrangements—
Dr. Pugh: Will the Minister give way?
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The Chairman: Before I call the hon. Gentleman, I remind the Committee that schedule 1 deals in considerable detail with the waters we are now getting into. It would be helpful if hon. Members did not stray into the next matter for consideration.
Dr. Pugh: Is not there a paradox, in that the Bill sets up a board that is intended to be independent of the Secretary of State, but cannot be scrutinised because it is part of the Executive? Surely it cannot be both a truly substantial body, by itself independent of the Secretary of State, and not subject to scrutiny because it is under the Secretary of State.
Miss Johnson: I am grateful to the hon. Gentleman for making that point. The board's independence is very important so that the OFT can regulate its own procedures—quorum, voting, committees and so on—and have flexible arrangements enabling it to take quick decisions when necessary. It is important, too, that there is no question of political interference. I am grateful for the remarks made by the hon. Member for Twickenham about the standing of the OFT and the fact that there is no question of it being interfered with. As the hon. Gentleman said, it is an honest system that has been sparingly used. None the less, there are risks in having a political dimension.
Taking the step of distancing politicians from the decisions that need to be made about competition on competition grounds is important; we would lose a lot were we to argue our way out of it. I appreciate that there is a desire in the House, and the Committee, to maintain accountability, which is why I stressed that the measures that deliver enhance accountability over the existing arrangements. I hope that what I have said will reassure my hon. Friend the Member for North-East Derbyshire (Mr. Barnes) about the avenues of access, many of which will remain. There will be discussions with the Department on such issues and greater scope for parliamentary engagement. As in the past, there will be the usual scope for Members of Parliament to contact the Office of Fair Trading to raise issues and take matters forward on behalf of their constituents.
On the body corporate and the statutory board, it is a matter of terminology; there will be a board and it will be a legal entity. The OFT and the board are one and the same entity, so the reference to a board is unnecessary in the Bill.
I welcome the focus of the hon. Member for Eastbourne on important issues such as effectiveness, the burdens on business and the resources available. I look forward to further opportunities to debate those matters in the Bill.
Question put and agreed to.
Clause 1 ordered to stand part of the Bill.
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