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Baroness Oppenheim-Barnes: I speak briefly but with the credentials of someone who was created in
effigy by architects so that they could stick pins into me as a result of the dealings which I had with them--as the noble Lord, Lord Borrie, will recall--in trying to dragoon them into at least adopting a posture where their restrictive practices were not pursued. I do not think I was as successful as I would have liked. I believe the noble Lord, Lord Borrie, will also recall that at one time he wanted me to attack veterinarians. I told him that I could not possibly do that as they were folk heroes and under no circumstances was I about to incur their wrath. On a serious note, it seems that in an age when everyone, including the party opposite, has now accepted the value of competition with the bottom line being the consumer and what he or she obtains in terms of value, or safety in many cases, there should not be the kind of exemptions from this Bill which have existed in the past which have not benefited consumers.
Lord Howie of Troon: As older Members of the Committee will know, I have a long-standing connection with the construction industry and with consulting engineers and architects. I would never dream of putting a pin in the noble Baroness who has just spoken--although I may in a moment!
I oppose these amendments on the ground that professions are not the same as businesses. I shall not discuss estate agents and people of that kind; I shall stick to those I know; namely, consulting engineers and architects. The noble Baroness, Lady Wilcox, quoted a well known maxim of Bernard Shaw, a man whom I greatly admire. However, she quoted one of his more foolish remarks. If she wishes to understand the difference between professions and businesses she should read the debates that took place in the previous Parliament on compulsory competitive tendering for local authority professional services. That whole matter was discussed at great length by myself and others. I shall not speak of that at great length tonight. The noble Baroness should also turn her mind to a well known philosophical work on the acquisitive society by R.H. Tawney. In that work the difference between professional services and businesses is clearly explained. I admit that the situation now is not as clear as it was in Tawney's day. My noble friend Lord Berkeley has referred to Welsh Water in this connection.
We opposed competition at the design stage-- I emphasise I am talking about design here--because a cheap design is not necessarily the design that you want. This is the weakness of CCT. A good design, whether of architecture or structural engineering, is a design in which the life cost of the commodity, be it a building or a structure, is the cheapest. We all know that a cheap initial cost leads to increased maintenance costs later, making the long life cost of the structure dearer than it might otherwise have been. That is the difference between buying and selling things across a counter--that is, business--and the buying and selling of what is essentially intellectual property. That is a different matter entirely. To confuse the two is merely to become a fanatic of competition. I have no doubt that competition has some merits here and there, but they should be closely examined.
I noted that the noble Baroness, Lady Oppenheim-Barnes, indicated earlier in the debate on pharmaceuticals how a distinction could be made in competition terms. I draw her attention and the attention of my noble friend the Minister to a distinction which should be made here. I now have to do something extremely uncivil in that I must apologise to the Minister because I must leave the Chamber almost immediately for what we normally describe as a pressing engagement. I apologise as I know that is rude. If I miss my noble friend's reply, I shall certainly read what he has said.
Lord Skelmersdale: Before the Minister replies and the noble Lord, Lord Berkeley, rises to speak, I have two questions which have been prompted by this short debate. I understand that we are also discussing Schedule 4 in this grouping of amendments. Given that my noble friend Lady Wilcox said that the legal restrictions on multi-disciplinary practices were removed for solicitors by the Courts and Legal Services Act 1990, one wonders why solicitors are mentioned in line 8 of page 50 of the Bill in Schedule 4. Is it not legal tautology to refer to solicitors in both places?
The other question which sprang to my mind while I was listening to this short debate was that under Clause 3 the excluded agreements mentioned in Schedules 1, 2 and 3 are grouped together in that the Secretary of State can add to or subtract from them, by order, at any point--I believe those are the words used in the Bill--whereas in Schedule 4 he has no such permission. Again, one is bound to wonder why. For example, chiropracting is gradually being accepted in this country. Indeed there is a register these days of chiropractors and another one of osteopaths. As many of the professional services listed in Schedule 4 are medical services, one wonders whether at some stage the Secretary of State might well want to include either of those professions in such a list, or at another point remove something else so that, for example, nurses and midwives come together. That may well happen in the fairly near future. Surely there should be a way to add to or subtract from Schedule 4 not using primary legislation.
Lord Lucas: I, too, wish to support my noble friend Lady Wilcox. I am delighted to see that the noble Lord, Lord Howie of Troon, is present. I remember the debates we had in the course of the housing and construction Bill on a particularly daft definition clause. The noble Lord, Lord Howie, demolished that at great length and in the end managed to make considerable changes to it. I think we have a similar situation here. I am a chartered accountant and speaking of my own profession I can understand why auditing might have some special part in the Bill. Auditing is governed by statute and the Government may wish to exercise greater control than normal over the way in which the rules that are applied to associations of auditors are established. The way in which this Bill allows changes to be made by the Minister rather than by the Director General of Fair Trading seems to me to be reasonable. But why govern accounting? Anyone can do accounts. There is
absolutely no reason why rules governing accounting should be subject to special pleading. It is a perfectly ordinary activity.Anyone can do any number of the things that are mentioned in this list. I myself have been a midwife, although I have not offered professional services in that regard. There are some services in the list that seem to have a special place; but there are any number of others which are just ordinary trades, trading in information rather than goods, and should be in the Bill along with everything else. I hope that the Government will very seriously reconsider this part of the Bill, especially Part II of Schedule 4.
The Earl of Balfour: Will the Minister dealing with the Bill consider the pilotage functions of pilots taking ships in and out of ports and around this coast? Recently their circumstances were changed quite dramatically. If this list is to be part of the Bill, pilots working around the coast should be considered.
Viscount Bledisloe: I must declare an interest as a practising barrister--which I believe is still a profession! Without going into the detail of the professions listed or seeking to interfere with the desires of those who abandon unprofessional accountancy and take up equally unprofessional midwifery, surely the whole concept of a profession is that it restricts competition. The concept of a profession is that certain activities shall be limited to those who have acquired certain qualifications and who behave in the ways laid down by their professions. That is the distinction between a profession and a business. A profession which has no rules and is wholly open to competition is not a profession. If anybody could appear in court and address an argument to the court on behalf of a client whether or not he has passed an exam, behaved appallingly or whatever it may be, it would no longer be a profession. To talk about professions without restrictive rules regulating the degree of competition and degrees of behaviour is to abolish professions.
6 p.m.
Lord Simon of Highbury: In responding to the noble Baroness, I find myself in a certain confusion. I am never quite clear as to whether it is a problem or a benefit if one is on the list. That is my quandary at the start-point. I shall return to the question of who might be on the list at the end of a statement I wish to make as to why there is a list and to what extent it offers differential treatment from a list that might start with candlestick-makers or whatever that wonderful rhyme might be.
In looking at what special treatment, if any, should be afforded to the professions under the Bill, it is helpful to begin by recalling what their present treatment is under competition law. In the past it has been accepted that competition law should not be applied to them willy-nilly, and we need to consider the arguments.
At present, agreements in respect of the provision of many professional services are excluded from the Restrictive Trade Practices Act by virtue of Schedule 1 to the Act. That means that not only are professional
rules excluded, but also other agreements that members of professions might enter into, including agreements they may reach to fix prices or share markets. So those agreements do exist. No doubt that was of some comfort to members of the professions concerned, including some Members of this House.The Government do not consider that replicating an exclusion as wide as that contained in the Restrictive Trade Practices Act would be justified. We see no reason why the normal run of agreements between members of a profession in the carrying out of their professional services should not be subject to competition law just like those of any other business. Despite what I said earlier about members of the professions, I am sure that that view is widely supported.
I do not, however, accept that professional rules are necessarily the same as the normal run of agreements into which businesses may enter, as my noble friend pointed out. Their purpose is to protect the public. They have attached to them disciplinary arrangements which often involve some judicial process and under which penalties can be severe. Enforcement of them may be reviewed judicially. They are often subject to approval by Ministers or members of the judiciary. In those ways they are a form of quasi-public law. Indeed, many professional rules have the force of statute and would not, anyway, be covered by the Chapter 1 provision. So there seems no good reason to have markedly different arrangements for members of different, even if related, professions--for example, solicitors and barristers--depending on the arrangements by which their rules are made. For those reasons, we believe it would be sensible if the Chapter 1 prohibition did not cut across the existing arrangements for making and enforcing professional rules.
Noble Lords have commented that it is all well and good but have not professional rules in the past served the purpose of protecting members of the profession and not the public? That is the point of the amendment tabled by my noble friend Lord Berkeley. I wholly accept that professional rules can give rise to competition concerns. The question then is whether we can enable professional bodies to draw up rules and regulate the professions as they do now, while at the same time enabling competition considerations to be brought to bear where necessary in a focused and targeted way.
I submit that that is what the Bill does, for it requires the Director General of Fair Trading to keep the list of designated professional rules under review and to report to the Secretary of State if he considers that any of them should no longer be designated and hence be excluded from the list. The Committee will note that I said "requires". The Bill places duties upon the director to do those things.
The Secretary of State will then wish to consult--and indeed under the Bill must consult--any other Minister who has functions in relation to the profession. It is to be hoped that a professional body will have regard to any criticisms that the director may make and consider whether its rules should be amended. But it is clear that,
as well as being targeted on professional rules which may give rise to competition concerns, the Bill must provide a way of enforcing proper competition scrutiny. The Bill therefore enables, subject to affirmative resolution by your Lordships and in another place, the designation of a professional rule to be revoked and subjected to the Chapter 1 prohibition.I stated at the start the need to bear in mind the present position of the professions under competition law and to consider the arguments for any special treatment. The Government do not accept that there should be a blanket exclusion from the Chapter 1 prohibition for the professions. The Government believe that, viewed as a whole, it would be unwarranted to apply prohibitions designed primarily for the private sector business to the quasi-public law processes of drawing up and enforcing professional rules. The Government accept that there needs to be appropriate competition scrutiny to prevent consumers being damaged by any anti-competitive professional rules, and believe that that needs to be done in a targeted way.
I said that in responding to the questions raised by the noble Baroness, Lady Wilcox, I would come back to the list. I am not sure whether this is the answer she wants. Non-mention of licensed conveyancers, osteopaths and other people on the list means that they are subject to the ordinary rules of competition. The prohibition therefore applies to all anti-competitive agreements, and the director general is free to look at them. Members have asked about the nature of the list. It is a fixed list and reflects the position under the Restrictive Trade Practices Act, though adjustment to the list would be a function for those carrying out the tasks allotted to them in drawing up the new framework and applying the prohibitions.
I hope that on reflection Members of the Committee will agree that the Bill now strikes an appropriate balance between protecting the consumer by appropriate frameworks for people working in professions in order to guarantee standards and allowing the prohibitions to take their effect in those areas where we wish to see competition apply. I hope that in the light of that explanation the noble Baroness, Lady Wilcox, will withdraw her amendment and not press her opposition to Schedule 4 and that my noble friend Lord Berkeley will not move his amendment.
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