Enterprise Bill

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Clause 93 ordered to stand part of the Bill.

Clauses 94 to 96 ordered to stand part of the Bill.

Clause 97

Merger notices: regulations

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

Mr. Waterson: This is another clause under which significant regulations will be made covering clauses 92 to 96. On more than one occasion I have asked the Minister's colleague, the Under-Secretary, whether we are likely to have sight of the draft regulations before the Bill leaves the House.

Mr. Alexander: Given the newness of my position in the Committee, I would be treading on my ministerial colleagues' toes if I did not take the opportunity to speak to them in advance of answering that question. However, I hope that during the course of the day we can provide some clarity on the point raised. My intention is certainly to provide the information requested in advance of commencement, but if anything further can be added following my conversations with ministerial colleagues, I shall endeavour to ensure that the hon. Gentleman is made aware of that during the day.

Question put and agreed to.

Clause 97 ordered to stand part of the Bill.

Clause 98

Power to modify sections 93 to 97

Mr. Waterson: This is a short clause, but it contains some significant powers for the Secretary of State. In three lines, the clause makes it clear that the Secretary of State can modify by order any of the provisions relating to merger notices and that seems a rather wide power. In theory, Secretaries of State can amend anything if they can find the parliamentary time and muster the votes. In the previous few clauses, what does the Minister believe might need to be changed in a hurry? Is it really necessary for the Secretary of State to take those major powers to herself and subsequent Secretaries of State? That is a current trend, which I cannot, as an individual, do anything to stop. It seems that when in doubt, the temptation is to give the Secretary of State endless powers to modify and change by order or otherwise. When the occasion demands, we should make the argument for not having such power in legislation.

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Dr. Cable: I want to make a brief point in support of that contribution, particularly following the Minister's reply to our brief discussion on clause 97 when he courteously but not very informatively said that he would have to consult other Ministers on what the orders would consist of. The clause gives the Secretary of State power to change the rules under which notices will be issued. Following the Minister's strong reaffirmation this morning of his belief in parliamentary sovereignty, would not the affirmative resolution procedure be more appropriate than an arbitrary power to issue orders? The point has occurred not just to hon. Members in the Committee, but to those in industry and legal groups who are concerned that the clause represents a considerable accumulation of ministerial power and that greater parliamentary scrutiny should be afforded.

Mr. Alexander: I feel, with respect, that we are making a mountain out of a molehill.

On the first point, I did not undertake to go away and find out what the provisions were; I undertook to establish the basis on which information would be made available to the Committee. I am grateful to the hon. Member for Twickenham for giving me the opportunity to clarify his thinking on that.

On the more substantive point, if there is a trend, as the hon. Member for Eastbourne suggested, it predates my arrival in the House. The provision identically replicates the terms of the Fair Trading Act. The idea that the Secretary of State is grabbing powers fails to recognise the reality. The provision simply replicates something that has been in place for nigh on 30 years.

The provision is prudent and allows Parliament to approve adjustments to the merger notice regime—one example might be timings. It is a sensible means by which we can provide future-proof assurance to the Bill. If reasonable changes that would be subject to parliamentary scrutiny were not anticipated, we would be obliged to return to the House and introduce further legislation when a minor reaffirmation of the position in the Fair Trading Act can ensure that that is unnecessary.

Mr. Ken Purchase (Wolverhampton, North-East): As a fully paid-up member of the awkward squad, I have to ask the Minister a question in this context: the political tide goes out and it comes in. I look to the future, when he will still be here long after I have left. Although I accept that the clause may not be the most serious matter that we ever deal with, if there is a trend, it is incumbent on me to secure, on the record, complete assurances from my hon. Friend that the nature of the provision is one that should not cause us difficulty in the future.

12.15 pm

Mr. Alexander: I hope that I can give assurances to my hon. Friend. Why look in the crystal ball when we can read the history books? The clause replicates the FTA directly. To that extent, comfort can be

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provided on the basis of how Secretaries of State in turn have applied the FTA in the years since it came into effect. On that basis there is appropriate and legitimate concern about ensuring parliamentary scrutiny, and the avoidance of a situation whereby there could be wholesale changes to the terms on which the Bill is being discussed. I am certainly not convinced that the clause raised that spectre. I think that it is merely a sensible means of ensuring that the legislation is future-proof and entirely consistent with some of the sensible provisions that exist under the FTA.

Question put and agreed to.

Clause 98 ordered to stand part of the Bill.

Clause 99 ordered to stand part of the Bill.

Clause 100

Certain duties of relevant authorities to consult

Dr. Cable: I beg to move amendment No. 200, in page 70, line 20, leave out `so far as practicable'.

The Chairman: With this it will be convenient to take amendment No. 170, in page 70, line 23, leave out subsection (4).

Dr. Cable: The amendments address a clause that places an obligation on the OFT, the Competition Commission or the Secretary of State in public interest cases to consult and give reasons for any adverse decision. The origins of the clause as I understand it, and I am not a lawyer, arose from a rather famous recent case in which the Competition Commission was effectively overruled on a judicial review in the case of Interbrew, a major brewery. That decision was interpreted as a major blow to the credibility and authority of the Competition Commission. It was one of its worst maulings in the court. The clause is intended to prevent that from happening again by requiring the competition authorities to consult and give reasons for their decisions.

The language in which the clause is couched is grudging and foot-dragging. Whether it will ultimately satisfy the courts I do not know, but it hardly echoes the spirit of the court ruling. It states that it will provide reasons for decisions only "so far as practicable". That seems to be weak, and is a concern not just of the business groups that are following the legislation, but of the legal groups also. The purpose of the amendments is to have that qualification written out. The courts have spoken clearly on the matter. There were very good reasons for the court ruling.

It is important to set out grounds for refusal not simply to provide academic curiosity for people in the UK, but because a great deal of practice in the field is established by precedent. It is very important that those involved in merger decisions understand the precedents and the reasons that have been given by the competition authorities. One should not allow such weasel words to prevent the competition

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authorities from giving good reason, especially when the courts have spoken so strongly on the subject. I would urge the Minister to delete those words, and to observe the full spirit of the court ruling.

Mr. Alexander: Obviously, amendments Nos 200 and 170 deal with consultation of parties. I fear, however, that the hon. Gentleman is labouring under a misapprehension in terms of our motivation. It is a truism that hard cases cause bad law. Rather than seeking to address any particular judgment that has been reached in court, it is the principle of increasing transparency that underpins clause 100, and runs consistently throughout the Bill.

Clause 100 aims to put the principle that relevant parties should have the opportunity to respond on proposed decisions that would adversely affect their interests on a statutory footing. Where possible, authorities should consult with parties by providing reasons for a proposed decision. The presumption is that the parties will be consulted on the reasons for proposed decisions. It is, however, important to recognise that there will be conflicting priorities in some cases. It may therefore not be possible to provide reasons for all proposed decisions, particularly those involving short deadlines or sensitive information.

We are motivated by the desire to achieve not only transparency, but a business-friendly approach, and we have to strike a balance between the two. Companies will, of course, welcome being consulted on proposed decisions, but those self-same companies would object if their commercially sensitive information were not safeguarded. Amendments Nos. 200 and 170 would prevent the authorities from acting sensibly on a case-by-case basis.

Dr. Cable: The amendment was, of course, designed to tease out what lay behind the Government's thinking. Clause 100 seems to be an example of them taking with one hand and giving with the other. In trying to meet the entirely necessary requirement for transparency and explaining the basis for decisions, they have provided an open-ended clause that will ensure that those requirements may never be honoured in practice. I accept the Minister's comment, however, and beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 100 ordered to stand part of the Bill.

Clauses 101 and 102 ordered to stand part of the Bill.

Clause 103

Further publicity requirements

Mr. Field: I beg to move amendment No. 288, in page 74, line 7, at end insert—

    `(4A) In performing any function pursuant to subsections (1), (2) or (3) to publish the result of any action taken by that person, the person shall not disclose any information which might significantly harm the legitimate business interests of another.'.

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Clause 103 and the clauses that surround it obviously contain some important safeguards on publicity requirements. Clause 103 contains a list of the matters that need to be published by the Competition Commission, the OFT or the Secretary of State in making a merger reference. We have obviously been in touch with the Confederation of British Industry, which suggested such an amendment. Under clause 103(4), in respect of substantive publications, the authority in question needs to publish its reasons for the action or decision concerned. As a result, on occasion confidential information may be put into play.

We can all appreciate that it is an integral part of the entire process that on occasion there will be confidential information that must remain in confidence under all circumstances. As a result, the amendment simply ties in with clause 231, which effectively states that there should be a specific obligation to ensure that confidential information is protected. We are therefore using wording that is akin to that which appears later in the Bill. We felt that we should replicate that wording by using the phrase

    "significantly harm the legitimate business interests".

I hope that the Minister will give us some guidance on why we cannot compare two similar situations. All of us appreciate that those will be sensitive situations in which those who give confidential information must have full protection.

Mr. Alexander: I fear that I may disappoint the hon. Gentleman, but I shall try to clarify our thinking.

The amendment would alter the test that authorities will consider when publishing information. The Bill includes a provision to ensure that confidential information is adequately protected, which has already been discussed in Committee. The amendment would replace the provision in clause 235 with the more restrictive test, as has been outlined in Committee. It would undermine the ability of the OFT, the Competition Commission and the Secretary of State to take sensible decisions on the publication of merger information.

We have proposed a test for the disclosure of information that will apply to all merger information. Clause 235 sets out a test that ensures that authorities have regard to the need to publish information to fulfil statutory functions, and to the need to exclude information that might cause significant harm. That is an appropriate test and consistent with the thinking behind the Bill. I want to avoid an alternative, higher test that would be set by the amendment.

Mr. Field: I am not entirely satisfied because the nature of the confidential information requires a higher test than the Government have in mind. However, we want to discuss other clauses, so I shall not continue. As my hon. Friend the Member for Huntingdon said, we will not reach clause 235, so it is worth highlighting it at this juncture even though

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the amendment may not be pressed. We may have to return to this sensitive issue on Report. I beg to ask leave to withdraw the amendment.

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