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House of Lords

Wednesday, 22nd October 1997.

The House met at a quarter past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers--Read by the Lord Bishop of Chichester.

Lord Davies of Coity

David Garfield Davies, Esquire, CBE, having been created Baron Davies of Coity, of Penybont in the County of Mid Glamorgan, for life--Was, in his robes, introduced between the Lord Graham of Edmonton and the Baroness Dean of Thornton-le-Fylde.

Lord Roberts of Conwy

The Right Honourable Sir Iuean Wyn Pritchard Roberts, Knight, having been created Baron Roberts of Conwy, of Talyfan in the County of Gwynedd, for life--Was, in his robes, introduced between the Lord Gibson-Watt and the Lord Thomas of Gwydir.

Lord Cope of Berkeley

The Right Honourable Sir John Ambrose Cope, Knight, having been created Baron Cope of Berkeley, of Berkeley in the County of Gloucestershire, for life--Was, in his robes, introduced between the Lord Marlesford and the Lord Wakeham.

Competition Bill

2.48 p.m.

Lord Borrie asked Her Majesty's Government:

    How many responses they have received to the draft Competition Bill.

The Minister of State, Department of Trade and Industry (Lord Simon of Highbury): My Lords, the Bill has attracted much interest in the commercial world and we are still receiving responses. So far we have received more than 150 replies to the consultation, mainly from business but also from legal practitioners, consumer groups and academics.

Lord Borrie: My Lords, I thank the Minister for that reply. Will he confirm that some of the responses from business have objected to the powers of investigation and the deterrent penalties provided in the Bill, although those featured also in the last government's proposals for a competition Bill? Will the Minister assure the House that the Government will stand firm in maintaining those provisions, which are so essential for combating cartels and other anti-competitive practices?

Lord Simon of Highbury: My Lords, in general terms, I would say that there has been business support for the

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Bill, largely because a prohibition-based system and closer alignment with the European approach is supported. But it is true that there have been discussions about the level of penalties and that aspect of the enforcement of the regime. However, I confirm that we believe that the powers need to be tough. That is meant to be a deterrent. The Office of Fair Trading needs a big stick on occasions to uncover and deal with the damaging nature of anti-competitive cartels. Therefore, we shall try very hard to make the level of penalties relate to the seriousness of the behaviour, but 10 per cent. of UK turnover is the level that we think appropriate, although that is the maximum. Therefore, I confirm that we are serious about making the regime more competitive.

Lord Clark of Kempston: My Lords, will the Minister not agree that our competitive position, particularly in international trade, is dependent upon the strength of sterling? Therefore, will he agree that any increase in the bank rate will have a detrimental effect on our exports?

Lord Simon of Highbury: My Lords, I am sure that the noble Lord knows that the Question is not about the strength of sterling but about competition. However, I should point out that there are many more bases for the competitiveness of a firm than the exchange rate; namely, the quality of its products, the capacity of its service and the skills of its employees. I could go on but I feel that the noble Lord has had a very good answer to his question.

Lord Burnham: My Lords, I note that the Bill contains conditions which will prevent unwarranted use or disclosure of information obtained under this Bill. Will the same apply to other aspects of government policy?

Lord Simon of Highbury: My Lords, that is a very difficult question to answer in relation to the Bill until we have had a debate. However, I am sure that we shall all come out in agreement.

Overseas Aid and Trade

2.53 p.m.

Lord Judd asked Her Majesty's Government:

    What changes they propose to introduce in the relationship between overseas aid and development programmes and the promotion of overseas trade.

Lord Whitty: My Lords, all our programmes are being reviewed. That includes the relationship between overseas aid and the promotion of overseas trade. As your Lordships will be aware, the Government's plans will be set out in the White Paper which is due to be published in early November. The Government will encourage and assist developing countries to become more fully integrated into the multilateral trading system and to participate in the World Trade Organisation. In that process, we shall also work closely with the UK private sector to develop a new agenda designed to increase both investment into and trade with developing countries.

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Lord Judd: My Lords, will my noble friend accept that we are all looking forward with great eagerness to the publication of the White Paper? Will he assure the House that, in view of the lamentable episodes under the previous administration, while it is to be welcomed if British economic interests coincide with genuine development priorities, in so far as the relationship between aid and trade is concerned, where aid funds are being deployed they must always be deployed without qualification--by criteria for development, and sound development, alone?

Lord Whitty: My Lords, those issues are being reviewed and the full answer to that question will be in the White Paper. However, it is quite clear from measures taken by the previous administration and ourselves that the provisions which led, for example, to the disastrous episode of the Pergau Dam could not be repeated even under the present arrangements and, as I say, they are being further reviewed.

Lord Steel of Aikwood: My Lords, I support what the noble Lord, Lord Judd, said. Under the previous government the Overseas Development Administration was too often overruled by what were perceived to be the wider issues of government. Will the Minister ensure that when the promised White Paper comes forward, there is a clear delineation of expenditure on trade promotion, which should properly come out of the DTI budget and not out of the already constrained funds for overseas development?

Lord Whitty: My Lords, we certainly agree that there needs to be a clear distinction between the two objectives. Again, that will be in the White Paper. Certainly in relation to aid projects, the developmental criteria will be the paramount criteria.

Viscount Waverley: My Lords, is not a difficulty that, while there is justification for political and economic tied aid, it should be referred to as something different in order to distinguish it from aid in its true sense?

Lord Whitty: My Lords, there may be some change in definition which we shall need to introduce through the White Paper. There are obviously gradations in that area but the objectives need to be clear. The objectives in the view of the Department for International Development will clearly be developmental objectives.

Lord Taylor of Gryfe: My Lords, is the Minister aware that it is a common practice in bidding for overseas contracts by our competitors to ensure that there is an element of aid in the bid contract? Will he keep in mind, in reviewing that matter, that the interests of British exporters have also to be protected?

Lord Whitty: My Lords, that is precisely why we are saying that it is extremely important that there is a partnership between the private sector and the British Government's aid programme in those areas. That is very much part of the strategy which will be demonstrated in the White Paper.

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The Lord Bishop of Durham: My Lords, will the Minister assure the House that direct overseas aid, in terms of the percentage of the gross national product, will be at least maintained by present standards and perhaps even increased?

Lord Whitty: My Lords, as the House is well aware, we are constrained in relation to the commitment for the first two years of this Government. However, it would be the intention that a higher percentage of public expenditure would go to the aid programme in subsequent years.

Baroness Young: My Lords, will the Minister recognise that in giving overseas aid he might consider the particular needs of the dependent territories which have not been that well treated in the recent past?

Lord Whitty: My Lords, the House will be aware that a review of the dependent territories is currently being carried out and that will be one aspect of the review.

Lord Judd: My Lords, will my noble friend accept that his answers are reassuring? However, can he reassure the House also that the news which he is circulating today about the future of the Commonwealth Development Corporation is news which we shall have an opportunity to debate in this House before final decisions are made?

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