Enterprise Bill

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Mr. Waterson: Does my hon. Friend agree that all the problems that we are discussing would fall away if the Bill did not include criminal sanctions for the cartel offence in clause 179? None of these problems would arise were that simply a civil matter.

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Mr. Field: That is of course entirely true, but sadly the votes on clause 179 have been lost so we must move ahead on the basis that there will be criminal sanctions, which have such commensurate and contingent problems.

It seems sensible to include certain safeguards in the Bill. Even if the Under-Secretary assures us that the powers currently in clause 184 will not be exercised in the draconian way that several Opposition Members have painted, I have great concerns about those powers. It would make sense to have safeguards, and those suggested in the amendments are only right and sensible, given the increasing importance of human rights legislation in the UK and from Europe.

Dr. John Pugh (Southport): I should like to comment generally and then on the specific amendments, Nos. 96 and 97. There is a general concern that liability in the Bill as drafted is fairly vague but that penalties are highly specific. There is the possibility of serious criminal offences, but not the availability of the normal defences for people charged with them. Although the amendments might swing too far in the other direction in some respects, which was the point made by the hon. Member for Hemel Hempstead, there is real concern and a necessity for the Minister to respond to that in some way.

I slightly disagree with my hon. Friend the Member for Orkney and Shetland on amendments Nos. 96 and 97. He found fault in the revision, but I think that there is scope for revision. My concern is that the phrase ''or any other person'' is far too vague. That ''any other person'' may well be a supplier. According to clause 192, if people do not co-operate they run the risk of six months in jail.

Rather more disturbingly, if that ''any other person'' recklessly makes a false statement, they run the risk of two years in jail. There probably is not a person in the Room who has not at some time recklessly made a false statement. The clause says not ''knowingly'' but ''recklessly''. I wonder whether all those people investigated, who may not be the people directly in the frame, would be aware of that. We are reaching a point where it may not be simply a case of warning people being charged that anything may be taken down in evidence and used against them, but also anyone who appears as a witness in that context.

My second concern regarding amendment No. 97 takes issue with the vagueness of the demands for documentation. The clause says:

    ''to produce, at a specified place and either at a specified time or forthwith, specified documents, or documents of a specified description, which appear to the OFT to relate to any matter relevant to the investigation.''

I am not concerned about the OFT asking for details and information that would be kept normally and demanded by company law, VAT inspectors and so on. However, if it is left completely open, there might be someone—perhaps through non-culpable carelessness—who loses a document that the OFT has demanded. People under investigation may not have a document, or may have disposed of it quite

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innocently because they might not be very sophisticated.

If a document is not available for whatever reason, subsection (4) states that the person who does not have the document must explain where it is. Of course, the implication would be that they had lost, or worse still, destroyed the document. Later elements of the legislation state that they must prove that they have not destroyed the document. Those concerns make the case for tightening the clause so that the people in the frame are those who deliberately and malevolently form cartels on an anti-competitive basis. People who have simply been less than adequate book-keepers should not get caught in the net.

Mr. Djanogly: The hon. Gentleman suggested that he did not know anyone who had not made a reckless statement. Was he referring to hon. Members' election addresses?

Dr. Pugh: Certainly not.

Mr. Djanogly: I wonder whether breaches of party manifestos will come within the scope of the new consumer law.

It is easy to assume that the legislation will just get the bad guys, but the reality is that when the OFT mounts an investigation, for every person from whom it obtains information, it will see a dozen who have had nothing to do with the cartel. Even if they did, they were probably involved in a company operating a cartel without their knowledge. The vast majority of people will be innocent of any crime.

Mr. Ken Purchase (Wolverhampton, North-East): Has the hon. Gentleman heard the phrase, ''We are trying to eliminate people from our inquiry''? That is a time-honoured way of going about such matters. We sometimes need to see people in all sorts of circumstances, simply to eliminate them from the inquiry. He speaks as if there is no body of experience or law that already covers much of the investigative process that we are debating. It is essentially about protecting those who may not be involved.

It is reasonable that we should get on with it. The clause is a very important part of the Bill, we need it, and I think that we are getting some obfuscation from Opposition Members.

5.45 pm

Mr. Djanogly: I resent that last remark. It was an outrageous thing to say in the context of a debate on the rights of people who are subject to investigation. I have not heard anything in the debate so far that one could call obfuscation.

However, the hon. Member for Wolverhampton, North-East (Mr. Purchase) has a point, which he did not specifically express. Amendment No. 96 is different from the others, as hon. Members have said. It deals with who can actually be investigated, whereas the other amendments deal with what happens when someone is investigated. That is an important point, because the issues are very different. To that extent, I believe that the grouping of the amendments was probably slightly confused.

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I have been speaking about innocent people who are caught up in an investigation. I have seen that at first-hand, and it is distressing, even for people have nothing to fear because they are not guilty. Everyone has rights—even those who are guilty—throughout the investigation, and the hon. Gentleman must appreciate that important point. I shall stop there, but I certainly support the amendments.

Miss Johnson: Frankly, the group of amendments is something of a curate's egg. I hope to explain to Opposition Members why I believe that. I hope also to persuade them that perhaps they have been making somewhat heavy weather of some of the issues, although I agree that there are some important considerations.

Amendment No. 96 would restrict the power to past and present employees of the business under investigation. We believe that such a restriction would place far too serious a limit on an investigation. It is not clear why Opposition Members think that it would be such a good idea. As some hon. Members have pointed out, the information that is relevant to the investigation may be held by undertakings or individuals who are not, and never have been, connected to the business of the person under investigation. Such a restriction could also lead to difficult questions as to who constitutes an employee or an ex-employee of a relevant business. For example, are agency staff or contractors to be included in the definition? For those reasons, such a restriction would make effective investigation very difficult.

Dr. Pugh:, I accept the Under-Secretary's point. However, if some of those marginal people are interviewed by the OFT, they are subject to the same severity of punishment as anyone else if they make a false or inadvertently false statement. Is there a procedure whereby they might be warned of the significance of what they are saying? They may have had only a temporary connection with the company concerned.

Miss Johnson: Perhaps I can come back to that point in a moment.

The OFT needs the freedom to pursue any investigation in the most effective way. It should not be restricted from the outset with regard to those whom it may ask to produce relevant information or to answer questions relevant to the investigation. I understand that the hon. Gentleman is interested in the situation of people who are drawn into the investigation to provide information that is or might be relevant.

Mr. McWalter: Does my hon. Friend agree that amendment No. 96 would mean that if a cartel were being set up in a smoke-filled saloon bar between A and B, and somebody overheard the conversation, the OFT would not be allowed to implicate them in the investigation into the cartel?

Miss Johnson: Indeed. That would almost certainly be the case. I urge the Committee to resist the amendment. It is not at all helpful as it would make investigations much more difficult.

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Amendment No. 97 is designed to add a requirement for the OFT, when investigating under a written notice, to indicate with that notice the subject matter and purpose of the investigation. It would add a safeguard providing any person under investigation with certainty of the grounds on which they are being investigated. The OFT is already required to state the purpose and subject matter of a investigation on any notice it issues under its powers to investigate civil offences. We welcome the extra safeguard and agree to consider how most appropriately to add it to the provisions. If, when the time comes, the amendment is withdrawn, I will undertake to consider the matter further and how to proceed in the most appropriate manner.

Amendments Nos. 98, 99, 101, 103, 105 and 106 are designed to provide the right to silence, the right against self-incrimination and the right to legal representation to persons being investigated for the cartel offence. Such safeguards are indeed proper and necessary where evidence given by someone under investigation may later be used as evidence in court against them. OFT officers investigating a criminal offence will have regard to the codes of practice for criminal investigations in England and Wales, as provided in the Police and Criminal Evidence Act 1984. I will talk about the position in Scotland in a moment.

Section 67(9) of PACE states:

    ''Persons other than police officers who are charged with the duty of investigating offences or charging offenders shall in the discharge of that duty have regard to any relevant provision of such a code.''

OFT and SFO investigators are

    ''persons other than police officers''

for the purposes of undertaking criminal investigations. The purpose of PACE is to protect suspects where investigators are trying to obtain evidence that can be used against them.

Where OFT investigators are seeking voluntary statements from those under investigation, they will be subject not only to the safeguards that the amendments are designed to introduce but to all the other requirements of PACE such those governing the granting of breaks, embassy access and the meeting of religious needs.

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