Enterprise Bill

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Mr. Alistair Carmichael (Orkney and Shetland): I echo the closing words of the hon. Member for Wolverhampton, North-East (Mr. Purchase) about the thoughtfulness of the presentation from the hon. Member for North-East Derbyshire and, indeed, the thought-provoking nature of his amendment. I do not share much of the horror felt by the hon. Member for Eastbourne. In tabling the amendment the hon. Gentleman has raised important issues that I hope the Under-Secretary will consider at a later stage. There are interests, such as those represented by trade unions. Perhaps other bodies, such as professional bodies—one thinks of the role of the Law Society in the financial services sector—would have a legitimate interest and could be a designated producer body as well. The role of such bodies is important and deserves careful consideration.

The amendment may not be accepted today, as I see differing expressions on the faces of Labour Members. Following the chasm between the hon. Members for Eastbourne and for Cities of London and Westminster this morning, I think that, with splits, the Liberal Democrats lead where other parties will eventually follow. However, there are serious points. The hon. Member for North-East Derbyshire should be commended for introducing them, but I would not go quite as far as he would. If push came to shove, I would not support the amendment, but I hope that the important issues that he raised will be considered.

Dr. John Pugh (Southport): I share the sentiments of my hon. Friend the Member for Orkney and Shetland (Mr. Carmichael). It was a lovely and educational excursion from the hon. Member for North-East Derbyshire, and I enjoyed every minute of it, especially the references to uncle Arthur. However, I then read clause 11(1), which the amendment would modify. It says that the proposal applies when a designated consumer body complains because something

''appears to be significantly the interests of the consumers.''

The hon. Gentleman can correct me if I am wrong, but that seems to suggest that the producers should interfere on behalf of consumers. It seems formally inappropriate.

Mr. Barnes: I tried to explain that there was a problem, which arises because we had already discussed clause 11(1) before I tabled my amendment. Ideally, I should have moved earlier so that I could have had a different form of wording. Unfortunately the amendment suffers from the difficulty of producers making references on behalf of consumers.

Dr. Pugh: That point is accepted, and it creates a difficulty in supporting the amendment. However, the hon. Gentleman has alerted us to a missing dimension in the Bill. We will be receptive to arguments about it later in our consideration, but as it stands, the amendment is formally inappropriate and cannot be supported.

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Miss Johnson: May I also say how much I have enjoyed this debate and how refreshing it is to have an injection of history and thinking into our consideration? I share the regret of my hon. Friend the Member for Wolverhampton, North-East that we did not reach this point at clause 4. It would have been a nice touch.

It is important to remember that the policy's focus is to alert the OFT to market failures that significantly harm the interests of consumers, which relates to the point that was made during the exchange between my hon. Friend the Member for North-East Derbyshire and the hon. Member for Southport (Dr. Pugh). Individual consumers do not necessarily have access to the information, skills, resources and expertise required to put together cogent complaints about the failure of particular markets. That is why we want to enable consumer bodies to do that on their behalf and formalise the process so that consumer interests are protected. That is why the Bill does not envisage that the procedure will be available other than to those who are designated as consumer bodies.

One point that was raised in many contributions, but particularly by my hon. Friend the Member for Wolverhampton, North-East, was the identification that the interests of consumers and producers are one and the same. I support that point, and one of the thrusts that underlies the Bill is that these things must be brought together for consumers and business to get a fair deal. There are differences in this matter, and consumer bodies will be best equipped to represent the interests of consumers.

My hon. Friend the Member for North-East Derbyshire commented on producer interests throughout his speech. On trade union involvement, I reassure him that the TUC was fully involved in all the discussions leading to the drafting of the Bill, through the White Paper consultations and the ongoing discussions with officials in the Department of Trade and Industry. Similarly, discussions have taken place with business groups and other interest groups.

As I am sure my hon. Friend would agree, producer interests cover not only trade unions but business groups. Neither trade unions nor business interests have as their raison d'etre the protection of consumer interests. They may consider consumer interests but those are not their primary concern, which is why we do not propose to designate those groups under the super complaints procedure. However, I reassure my hon. Friend, and all hon. Members who have contributed, that producer bodies can already put complaints about market failure and other issues to the office of OFT and they will still be able to do so. Although they will not have super complaints status, they will be able to make the sort of representations that I know my hon. Friend would want.

Dr. Pugh: Will the Under-Secretary give way?

Miss Johnson: I would rather finish my speech.

I hope that my hon. Friend can recognise that his interests are sufficiently embodied in the Bill and withdraw his amendment.

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Mr. Barnes: The amendment has flaws, to which I have already pointed—although it was a useful trailer for other matters—and I am not the variety of hard left politician who would push it beyond a position that it can carry.

Dr. Pugh: I thank the hon. Gentleman for giving way; he allows me to make the point that I wished to make to the Under-Secretary. She has not adequately clarified why super complaints status is not given to producer interests. These would make a different type of complaint from those made by consumer interests, but one no less lacking in status.

Mr. Barnes: Yes, the amendment contains serious points. The concern about producers could be included in legislation. However, I was saying why I will withdraw the amendment. I am not of the hard left position that cracks by wanting to stand pure all the time, nor am I soft left. In this malleable position, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 196 ordered to stand part of the Bill.

Clause 16

Damages

Mr. Jonathan Djanogly (Huntingdon): I beg to move amendment No. 31, in page 8, line 3, at end insert—

'(3A) The Tribunal shall also have the power to grant injunctive relief.'.

I would be interested to know why we are not dealing with clause 15 first, because in some ways it draws into clause 16. I appreciate that the Government want to open up the enforcement of competition law and encourage private actions—we will come to those issues when we discuss clause 15—but the order in which we are considering matters still seems unusual.

The Competition Act 1988 already provides for the right to seek damages in the courts, and clause 16 will provide the extra teeth to competition appeals tribunals, which will also be able to hear damages claims.

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Different types of relief—damages and injunctive relief—are available to claimants. The claimant will often be concerned not only to receive compensation in the form of damages for what has happened, but to apply to the court for injunctive relief to prevent it happening again. Insofar as that is relevant to the court process, it is also relevant to the CAT process. If not, the claimant could not achieve both objects through the same legal process. A claimant pursuing damages through the CAT would need a simultaneous court action in process to obtain injunctive relief. That would lead to a costlier and lazier process being heard by two courts that could take different tacks on the same issue.

To the extent that the amendment would simplify the process, I fully support it. However, wider issues are relevant. The Government have changed their mind. The issue was debated during the passage of the 1998 Act and it was decided then that damages should

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not fall within the CAT process. Will the Minister explain the Government's changing thought processes? I note that a Library research paper refers to consultations prior to the 1998 Act and sets out the Government's view then:

''We have considered carefully the option of making the Competition Commission, as opposed to the Courts, the forum to hear private law actions for breach of the prohibition such as claims by third parties for damages or interim relief. We have concluded that there are significant drawbacks to such private actions being heard in the tribunal. In practice the application of the prohibition would often be one of many areas of the commercial dispute to resolve which, in turn, could lead to an unnecessary duplication of fact finding as the tribunal heard competition law points and the courts heard other aspects of the same case. Moreover, if the tribunal were to hear such private law actions, this could prejudice its primary objective of providing a quick and efficient review of DGFT decisions. We have therefore decided that such private actions should be heard in the courts.''

We are now dealing with the damages side, so we are diverging from that position only a few years later by placing it into a CAT process, while it has been decided that the injunctive relief element will not be moved into that process. That will complicate rather than simplify matters. Will the Government explain their view?

The concept of injunctive relief is part of the wider debate on the role of the CAT. Competition issues should generally be dealt with by the CAT rather than by a mix of the CAT and the courts. The Government have been lobbied generally and several judges have argued that the CAT should have a wider role than under the Bill. It is in the interests of business that a specialised tribunal, which will act more quickly than the courts, deals with competition. Increasing the ability of the courts to take speedy decisions, making the process more uniform and avoiding duplication should lead the Government to review the amendment carefully.

 

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Prepared 18 April 2002