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Question put and agreed to.
Clause 130 ordered to stand part of the Bill.
Clauses 131 and 132 ordered to stand part of the Bill.
Clause 133
Questions to be decided by Commission
Question proposed, That the clause stand part of the Bill.
Mr. Waterson: I tabled amendments Nos. 308 and 309 to clause 133 because it seemed to us as though a draftsman's error had been made in two respects. I hope that they are reasonably clear. Amendment No. 308 would have inserted a reference to the definition in clause 126(2) after the words "adverse effect on competition", while amendment No. 309 would have inserted a reference to a different subsection of clause 126 after the phrase "customer benefits". The clause appears to contain no definition of "adverse effect on competition" or "customer benefits".
My initial instinct was that there had been a draftsman's error or oversight, but it is conceivable that there is a more sinister reason. This part of the Bill deals with public interest cases, and the draftsman may have thought that, if the definitions were left up in the air, then so be it. The Under-Secretary is shaking her head, so clearly the interpretation of something more sinister is not
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right. In that case, she is welcome to leap to her feet and accept my amendments with alacrity and joy.
Miss Johnson: Perhaps I should intervene on the hon. Gentleman if he intends to continue at length, because the conspiracy view of history is seldom right. I hope that I can delight him by saying that the amendments make similar points to that made in amendment No. 304, which was accepted last week by my hon. Friend the Minister. I am grateful to hon. Members for raising the issue. We want to ensure that the Bill is improved where necessary, and I will give further consideration to their suggestions with a view to tabling drafting amendments on Report. I support the reasons given by the hon. Gentleman for proposing the amendments but, none the less, I ask him to withdraw them.
Mr. Waterson: I am almost overwhelmed. The Under-Secretary has been good enough to confirm that the conspiracy theory is wrong, so the reason must be the alternative, which I would not dream of mentioning in mixed company. I am delighted that we have found some gaps in drafting, and equally delighted that she is prepared to take them on board. It would be utterly churlish of me not to withdraw the amendments immediately.
The Chairman: Order, as the lead amendment has not been moved, it is not necessary to withdraw it.
Mr. Andrew Lansley (South Cambridgeshire): In order to understand clause 133 better , I want ask some questions of the Under-Secretary. I confess that I am non-plussed. One does one's best to follow the drafting, but on this occasion I have lost it.
The explanatory notes make it clear that clause 133 is intended to enable the commission to decide the issues in a market investigation case. We are dealing with such a case, where a public interest intervention notice has been served. The explanatory notes suggest that the Competition Commission should have to consider not only the same questions as it would have considered under clause 126, where there was no public interest element, but—in addition to issues about a competition-only market investigation—what course of action would be appropriate in the light of any relevant public interest considerations. That is fine. I understand that we are dealing with a public interest element, but the structure of the clause suggests that the question to be decided by the commission is simply whether there is an adverse effect on competition. There is no other reference.
Clause 141 deals with when the Secretary of State has had the matter referred with an adverse effect on competition, but has not taken a decision and it reverts to the commission. However, no particular considerations that should be decided by the commission are specified. It seems to me, on the face of it, that the only issue is whether there is an adverse effect on competition—in which case, under this group of clauses, the matter is referred to the Secretary of State for a decision.
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It is also unclear to me whether the Competition Commission is required to decide whether there is an adverse effect on competition, bearing in mind the public interest considerations, and if there is such an adverse effect, which questions have to be decided by the Competition Commission on referral to the Secretary of State. That seems to be entirely a matter, subsequently, for the Secretary of State.
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I conclude with a question, on which the matter rests. If the Competition Commission decides that there is no adverse effect on competition but—for the sake of argument—the Secretary of State has issued an intervention notice on a national security consideration, where is it reflected in the clause that the Competition Commission must look to that national security consideration, and if it believes that there is a relevant public interest that should be subject to a decision by the Secretary of State, will so refer the matter rather than simply saying, "There is no adverse effect on competition," and publish a report? No question in relation to public interest is specified in the clause.
Miss Johnson: The hon. Gentleman raises a question about how the clause works, and how it relates to other clauses. The clause states that the Competition Commission must consider the case, in the light of the issue, in the intervention notice. The clause simply refers to the action by the Secretary of State under clause 139, thereby taking account of the public interest issue. Those are the terms in which the Bill is drafted.
I am unsure which bits of the clause the hon. Gentleman is especially confused about, but I draw his attention to the fact that subsection (4) requires the Competition Commission to decide the same questions with regard to action to be taken where a report delivered to the Secretary of State under the public interest provisions reverts to the Competition Commission—that is, where the Secretary of State has failed to take a decision within 90 days of the receipt of a report from the commission—or where the Secretary of State decides that there is no public interest consideration that should be weighed against the competition issues identified by the commission.
I hope that that explains the nature of the clause, and what it does.
Mr. Lansley: I confess that it does not. Let me try to be a bit clearer: I understand that if the commission finds that there is an adverse effect on competition, it refers the matter to the Secretary of State. However, if it finds that there is no adverse effect on competition, but an intervention notice with a national security consideration may be relevant, does that mean that the Competition Commission simply says that there is no adverse effect on competition—that the national security consideration is not a competition effect—and then publishes its report? Subsequent clauses would suggest that, under those circumstances, no remedy is available to the Secretary of State.
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Miss Johnson: The hon. Gentleman is getting quite technical. I have listened carefully to the points and questions that he has raised, and I think that it would be most helpful for me to offer to write to him with regard to them.
Question put and agreed to.
Clause 133 ordered to stand part of the Bill.
Clauses 134 and 135 ordered to stand part of the Bill.
Clause 136
Time-limits for investigations and reports: part 4
Question proposed, That the clause stand part of the Bill.
Mr. Waterson: I rise briefly to probe the Under-Secretary on a couple of matters with regard to this clause. The first echoes the previous debate about the two-year limit. My hon. Friends the Members for Huntingdon and for Cities of London and Westminster have made all the important points about that, and about the real problem that is caused to businesses by such uncertainty hanging over them for up to two years. It appears that that issue does not cut any ice with the Under-Secretary or her hon. Friends, but it remains a concern. At least there is a suggestion of movement in the clause.
Under subsection (2), the Secretary of State has the power to
"alter the period of two years".
Subsection (3) makes it clear that the period can only be altered downwards; it cannot be altered to exceed two years. That is welcome recognition of the fact that the two-year time scale is not only an upper limit, but could in the right circumstances be reduced. I wonder whether the Under-Secretary would care to explain the thinking behind subsection (3) to the Committee. I wonder whether such a provision could be imported into clauses that we discussed earlier. That would make it clear—both to business and to officials involved in investigations—that two years is a long time for such matters, and that they should be dealt with much more quickly.
Miss Johnson: The hon. Gentleman's points chime well with those I made in debate on clause 129 when we discussed amendment No. 35, which would have reduced the period to 12 months. I have said that we do not normally expect the process to take anything like two years; that is a long stop. I also said that there is a provision to vary the period downwards, as the hon. Gentleman says. Those points, which I made in relation to amendment No. 35, obviously hold true in our discussion on clause 136. I do not have a great deal to add, but I reassure the hon. Gentleman that he is right in what he says, and that our intentions are no different to his own on the subject.
Mr. Waterson: Again, we have an assurance that the Under-Secretary's intentions are entirely honourable. Who am I to argue with that?
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Question put and agreed to.
Clause 136 ordered to stand part of the Bill.
Clauses 137 and 138 ordered to stand part of the Bill.
Clause 139
Remedial action by Secretary of State
Question proposed, That the clause stand part of the Bill.
Mr. Lansley: At the risk of being technical, I should like to be clear on a point that bears on the clause. My reading is that if the Competition Commission decides that there is no adverse effect on competition, we do not reach the provisions under this clause, and the Competition Commission simply publishes a report. However, if the commission concludes that there is an adverse effect, the report is put in the hands of the Secretary of State, who may take such decisions as flow from it.
It is interesting that the power provided on market investigations in which a public interest intervention notice is served is not simply the power to vary the remedies proposed by the Competition Commission in the relevant public interest. It is a wider power to decide which remedies should be taken, and the Secretary of State need only "have regard to" the commission's report. The only constraint on the Secretary of State is that, if the Competition Commission decides that there is an adverse effect on competition, the Secretary of State cannot decide that there is not. So far as I understand, the Secretary of State is otherwise free to vary any or all the remedies proposed for dealing with the "adverse effect on competition" or the "detrimental effect on customers".
I make that point in a stand part debate because I think that it would be far better if the whole clause were rewritten to make it clear that the Secretary of State should follow the advice of the Competition Commission on the effect on competition and how it is to be remedied. I would make changes to the clause as are required in relation to the public interest raised by the Secretary of State.
There are two dangers, perhaps the most obvious being that the Secretary of State will find it tempting to substitute his or her judgment for that of the Competition Commission on how competition effects should be dealt with. Secondly, I refer to the Secretary of State's temptation to find a relevant public interest consideration at any stage up to four months after a market investigation has been initiated. Having served an intervention notice on any public interest consideration that can be specified, the Secretary of State brings the whole of the subsequent process of determining all the remedies into his or her own hands. That is inherently undesirable because consistency and predictability of independent competition authorities require that the process be conducted
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independently. The more that public interest intervention notices are served—especially if they are specified for consideration other than for national security—the more that remedies will be put back into the hands of the Secretary of State and not the competition authorities.
The Chairman: Before I call the Under-Secretary to reply, I emphasise that we are discussing clause 139.
Miss Johnson: Indeed, Mr. Conway, I am happy for the hon. Member for South Cambridgeshire to become technical, and delighted that he is getting stuck into the detail of the Bill. If there were no adverse competition finding, the Secretary of State could only mitigate or eliminate the competition remedy on the relevant public interest grounds. If there were no adverse competition finding, the Competition Commission would simply publish its report. It would not send it to the Secretary of State for a decision. In other words, a report will not reach the Secretary of State if there has been no adverse finding by the Competition Commission.
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