Enterprise Bill

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Miss Johnson: I am sure that everyone agrees that appropriate surveillance powers are a necessary and effective tool for investigating cartels. The clause amends the Regulation of Investigatory Powers Act 2000 to grant the OFT intrusive surveillance powers in the United Kingdom. With those powers, the chairman may authorise the planting of surveillance devices in residential premises, including hotel accommodation, and in private vehicles. In the chairman's absence, and in an urgent case, a senior OFT officer designated for the purpose may also grant an authorisation.

We all know that cartels operate under cover. They are difficult to detect and are often set up at clandestine meetings held in neutral territory such as hotels. Few records are kept—although good records were kept in the Christie's and Sotheby's case, but I should imagine that that was a bit unusual. The use of surveillance powers could provide irrefutable evidence in court of participation in cartel activity. It is in the public interest to gain evidence about a cartel and lead a successful prosecution. For example, in the case of a cartel for lysine, an additive widely used in animal feed, the United States authorities obtained video evidence that showed cartel members in hotel rooms concluding their deals. It was decisive evidence in securing convictions for offences committed over four years.

The powers are necessarily strong. The intrusive surveillance powers will only be used in the most serious cases and when the OFT has specific information about a meeting from an informant. There are important safeguards. All the safeguards in the Regulation of Investigatory Powers Act 2000 will apply. For authorisation of an application for intrusive surveillance under the 2000 Act, its use must be proportionate to what is sought to be achieved, and it must also meet one of three criteria. The one that will apply for the cartel offence is that the intrusive surveillance is necessary

    ''for the purpose of preventing or detecting serious crime''.

It must be the case that the information could not reasonably be obtained by other means. All applications for authorisations are subject to the scrutiny and approval of surveillance commissioners appointed under the 2000 Act. The clause restricts the purpose for which the OFT can use intrusive surveillance to prevent or detect the cartel's criminal offence. The OFT cannot apply the powers for the purposes of any of its civil investigations.

When an authorisation is granted, the OFT intends to outsource the technical deployment of the intrusive surveillance activity to public authorities that already have access to those powers, and practical experience of exercising them. I accept that the powers are strong, but we believe that they are justified, necessary and proportionate. Cartels are secretive arrangements that can be successfully detected and prosecuted only with adequate powers of investigation, so I trust that hon. Members will accept that they are necessary.

We do not believe that we need to amend the Scottish equivalent of the Regulation of Investigatory Powers Act. We are taking section 46 of that Act, and

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the OFT will effectively become a cross-barrier body and will be able to use the powers in the Act in Scotland, too. I hope that that answers all the points made by the hon. Member for Orkney and Shetland. I commend the clause to the Committee.

Question put and agreed to.

Clause 190 ordered to stand part of the Bill.

Clause 191 ordered to stand part of the Bill.

Clause 192


Question proposed, That the clause stand part of the Bill.

Dr. Pugh: We have some concerns about the clause that relate closely to its wording. As I said, anyone can be in the frame or drawn into the net of an investigation. I draw hon. Members' attention to subsection (2)(b), which states that anyone who ''recklessly makes a statement'' that is not necessarily false but simply ''misleading'' is ''guilty of an offence''. The clause goes on to state that the offence attracts a two-year prison sentence. That is a serious matter for anyone. What safeguards are built into the process of investigation to ensure that people who make casual or thoughtless observations in the process of investigation, but are not the central focus of the investigation, are not in serious trouble—or at any rate that they are advised of the danger before they get into serious trouble? I understand that people who are suspected of crimes are warned seriously about their behaviour. I do not believe that witnesses usually are. In this case we are dealing with witnesses, or perhaps suppliers, not agents in the cartel.

My second reservation is that the clause makes it difficult for anyone under investigation to establish negligent loss of a document. Such a thing can happen, and the OFT may deem such a document pertinent to the investigation. If it is thought to have been destroyed or lost, for example, the person who has destroyed or lost it must prove that they had no intention of concealing facts. I understand that it is difficult in law to prove intention. It must be even more difficult to prove that someone did not have an intention when the presumption would be that they did. Are the offences drafted in such a way that we are in danger of catching people who are not really the target of the Bill? Instead of having a robust and effective system of prosecution of cartels, we have something closer to the Spanish inquisition—which, as hon. Members know, no one expects.

Miss Johnson: I crave your indulgence, Mr. Beard, in relation to amendment No. 142, which was not moved. I believe that it has some merit. [Interruption.] Perversely, hon. Members may feel the opposite. I believe not that there is merit in reducing the period to three years, but that there may be merit in considering a seven-year period. Strong arguments could be advanced for aligning sentences under this clause and under clause 179. I had intended to say that I was grateful to hon. Members for having highlighted the issue, and that I should like to return to it on Report.

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Mr. Waterson: I am grateful for that indication, and I shall try to leave more amendments unmoved in future, if that is to be the reaction. I am delighted. If the hon. Lady wants to return to the matter later, we shall be only too pleased.

Miss Johnson: I am glad, and I am grateful to the hon. Gentleman for his suggestions about the future conduct of our business.

The hon. Member for Southport made a point about what the clause seeks to achieve. Again, the clause is modelled on the Criminal Justice Act 1987, and the procedures are in line with that Act.

Question put and agreed to.

Clause 192 ordered to stand part of the Bill.

Clause 193 ordered to stand part of the Bill.

Clause 194

Powers of entry

Question proposed, That the clause stand part of the Bill.

6.45 pm

Mr. Djanogly: We now move on to part 7. I covered many issues relating to the clause in our debate under clause 186 about warrants issued in respect of criminal cartel investigations. I do not want to cover that ground again. However, clause 194 contains the same provisions for warrants issued in civil chapter 1 and chapter 2 investigations, which clearly represents a ratcheting up of the OFT's powers. Why does the Minister feel that that is necessary in the context of civil prohibition investigations?

Miss Johnson: Under the clause, a warrant issued by a High Court judge may authorise a named officer of the OFT and any other officer of the OFT whom the OFT has authorised in writing—and, indeed, officials of the European Commission, under sections 62 and 63 of the 1998 Act—to enter premises using such force as is reasonably necessary. The warrant also authorises those named in it to search the premises, take copies of documents, take possession of documents and preserve them, and to require explanations of the documents or statements regarding their whereabouts. Information may also be extracted from computer systems.

Under the Competition Act 1998, it is possible to send officers of the OFT alone on raids to companies. Since that Act came into force, the OFT has experienced a need to authorise people not employed by it to accompany OFT officials on searches under a warrant. Such people are required to provide expertise in fields such as IT, which is unavailable within the OFT but required for the OFT to make full use of the warrant and obtain the information that it requires.

The clause would enable warrants to be issued that authorise non-employees of the OFT to accompany and assist OFT officers in a search. The external experts will always be required to work under the direction of the OFT; there is no question of their being able to enter premises without OFT officials.

Mr. Djanogly: I would appreciate knowing why, after only four years, the Government feel it necessary

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to ratchet up the investigatory powers in the civil context.

Miss Johnson: Because we believe that it is necessary.

Mr. Purchase: That is a very good answer.

Miss Johnson: I always give very good answers, as my hon. Friend is well aware.

The power to enter premises under a warrant is an important power, and without it the prohibition regime under the Competition Act 1998 would not be effective. It is important that the OFT can use the warrant to search for the required information without being hindered by a lack of specialist expertise, for example. That is the purpose of the clause. The expert would have to be named on the warrant and approved by the High Court judge issuing the warrant, which is an important safeguard as warrants are not lightly issued by the judiciary. All those factors stack up to ensure that investigations are effective.

Question put and agreed to.

Clause 194 ordered to stand part of the Bill.

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