Enterprise Bill

[back to previous text]

Mr. Lansley: The Under-Secretary is now trying to set on its head the whole basis upon which she is bringing this section of the Bill before us. Ministers have determined in the past that the MMC can make decisions based on public interest criteria—not only competition matters, but public interest grounds have been presented to the MMC. Ministers said, consistently over time, that they felt that the MMC took decisions that were objective and more predictable in the marketplace, and that they wanted to go down the path of increasing such independence. It follows logically from that that if unforeseen circumstances give rise to public interest grounds for a reference, the Competition Commission, like the MMC, is a perfectly acceptable vehicle for determining them.

Miss Johnson: The hon. Gentleman and I will have to agree to differ on that point. I am listening to him carefully, but I do not believe that he is making a case for doing anything other than what we are doing. He is failing to tackle the question of how exactly, under the arrangements, he would deal with things that might be akin to national security but not be national security. He cannot say whether something that crops up that neither he nor I can foresee will be more akin to that and therefore ought to be dealt with by the route set out here rather than the route that he is advocating of simply going through the Competition Commission.

Question put and agreed to.

Clause 56 ordered to stand part of the Bill.

Clause 57

Intervention by Secretary of State

in special public interest cases

Mr. Waterson: I beg to move amendment No. 260, in page 40, line 10, leave out ''special''.

This probing amendment raises a narrow point. The clause is a discrete little regime for dealing with mergers that basically involve defence contractors who may, in the course of business, have access to secret information. We accept that there are grounds for vetting those companies, perhaps more carefully than

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other companies. However, we are slightly puzzled that what is called a ''special merger situation'' is defined by reference to the normal definition but omitting the thresholds—25 per cent. UK market share or £45 million turnover—set out in clause 20 that we debated earlier.

The problem that we are trying to deal with under this clause is entirely divorced from competition, or any other issue that might legitimately be called enterprise. I am trying to probe the Under-Secretary on exactly how the clause is engineered, to confirm that it is simply a matter of being able to prohibit a merger on the grounds of secrecy of information. Can she confirm that there is no intention to have issues of competition and enterprise involved in what I accept is a discrete regime to deal with that particular group of contractors?

Miss Johnson: I take it that the amendment is probing, which the hon. Gentleman has confirmed. To date, we have had no representations. The purpose of the special public interest provision is to ensure that mergers of certain enterprises with special defence-related Government contracts can be investigated, even though they fall short of the competition thresholds. That provision applies to a small, narrowly defined subsection of merger cases, which have been developed to work under ministerial discretion, as with other public interest cases. However, unlike other national security cases, they will not be scrutinised on competition grounds as they do not meet competition thresholds. The amendment would remove the Government's ability to consider those special cases. That ability should exist, so I trust that in light of my explanation the hon. Gentleman will feel able to withdraw the amendment.

Mr. Waterson: I am happy with that explanation. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 57 ordered to stand part of the Bill.

Clauses 58 to 64 ordered to stand part of the Bill.

Clause 65

Newspaper mergers

Miss Johnson: I beg to move amendment No. 264, in page 46, line 16, after 'assets' insert—

    'to which section 58(1) of the Fair Trading Act 1973 (c.41) applies'.

The Chairman: With this it will be convenient to take Government amendment No. 265.

Miss Johnson: Amendment No. 264 introduces more targeted wording to define the scope of the Enterprise Bill regime. The intention is to ensure that the regime applies to mergers that involve the transfer of newspapers or newspaper assets, which meet the general merger thresholds, and which the Secretary of State does not refer under the newspaper merger provisions of the Fair Trading Act 1973. Amendment No. 265 is textual and consequential on the lead amendment.

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Mr. Djanogly: We have a rather strange little clause here and the Government amendments, which refer to the 1973 legislation, make it even stranger. In such comprehensive legislation on competition law, one wonders why the opportunity has not been taken to move the relevant clauses from the 1973 Act into the Bill for the purposes of completeness and simplicity.

Miss Johnson: During the consultation on merger reform, we said that the newspaper regime would be considered separately. The Government believe that the newspaper regime should be retained to address plurality concerns, but that it should be better targeted. The regime targets public interest concerns additional to competition, which justify the continued involvement of Ministers. We believe that the proposals in the draft communications Bill will be seen as significantly deregulatory, but we cannot give details before publication. Our approach in making provisions is appropriate.

7 pm

Mr. Lansley: I have reached the point of pedantry. The purpose of Government amendment No. 265 seems to be to bring the reference to the Fair Trading Act 1973 Act in clause 65(2) into line with the same reference in subsection (3), so that they both refer to the ''Act of 1973''. However, clause 261, which covers interpretation, defines not the ''Act of 1973'' but ''the 1973 Act''. We should be consistent and have either ''the 1973 Act'' or the ''Act of 1973''. I fail to see why we should have both.

Miss Johnson: Is it for me to comment on the hon. Gentleman's self-confessed pedantry?

Mr. Djanogly: Given that the Government propose to review the merger legislation relating to newspapers, will the Under-Secretary give us further information on when that is likely to happen? Why do we have to make changes to the legislation now? Why can we not consider it in one go, as the Under-Secretary suggested?

Miss Johnson: As I said, we believe that the proposals in the draft communications Bill will be seen as significantly deregulatory, but I cannot provide any more details prior to publication to help hon. Members in their wider interest in the subject. The competition focus of the Bill is important and an announcement on newspapers will be made in the near future.

Amendment agreed to.

Amendment made: No. 265, in page 46, line 17, leave out

    'Fair Trading Act 1973 (c.41)'

and insert

    'Act of 1973'. [Miss Melanie Johnson.]

Clause 65, as amended, ordered to stand part of the Bill.

Further consideration adjourned. [Mr. Pearson.]

Adjourned accordingly at two minutes past Seven o'clock till Wednesday 1 May at half-past Ten o'clock.

Column Number: 361

The following Members attended the Committee:
Conway, Mr. Derek (Chairman)
Atkins, Charlotte
Barnes, Mr.
Borrow, Mr.
Brown, Mr. Russell
Burnham, Andy
Cable, Dr.
Campbell, Mrs. Anne
Carmichael, Mr.
Djanogly, Mr.

Column Number: 362

Field, Mr. Mark
Hendry, Mr.
Irranca-Davies, Huw
Johnson, Miss Melanie
Lansley, Mr.
McWalter, Mr.
Pearson, Mr. Ian
Purchase, Mr.
Thomas, Mr. Gareth R.
Waterson, Mr.

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