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Lord Ezra: May I express my appreciation to the noble and learned Lord, Lord Fraser, for his strong support. I am sorry that the noble Lord, Lord Simon, did not go a bit further. I take it that he is going to reflect on this. He having said that, that will lead me in a moment to withdraw the amendment.

We are left, nevertheless, with this issue: that these enterprises are operating under licence. There are two qualifications in the amendment: one is the rebuttable presumption--it is not a firm presumption, it can be rebutted--and, secondly, conduct which is in compliance with the licence.

The noble Lord referred to market evolution and changes of circumstances. Of course these can always occur, and if anything in those changing situations should lead the enterprises to do something which infringes this Bill when it becomes law, then there ought to be intervention.

Within the terms of the licence, and subject to this rebuttable presumption, the Government should attempt some reconciliation between the two pieces of legislation. I would take it very much amiss if I were in charge of one of those enterprises and meticulously stuck to the licence conditions, and then found that

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I was being attacked through this wider legislation, with the adjudicator being the same regulator who had set the regulatory terms. I would find that an intolerable situation to live under.

I hope that within the noble Lord's reflections he will take that into account and, at the next stage, come forward with some proposed wording. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Simon of Highbury moved Amendment No. 46:

Page 47, line 10, after ("Kingdom") insert--
("( ) imposed by or under the Treaty or the EEA Agreement and having legal effect in the United Kingdom without further enactment;").

The noble Lord said: I move Amendments Nos. 46, 71 and 251. Paragraph 3 of Schedule 3 provides an exclusion from the prohibition for things done in compliance with legal requirements, the rationale being that we should not prohibit what the law requires.

The main amendment in this group is No. 46, which extends this exclusion to cover requirements imposed by or under the EC treaty or the European Economic Area Treaty, which have effect within the UK without further enactment.

Amendments Nos. 71 and 251 are drafting amendments and apply the definition of the EEA treaty to Part I as a whole. On this point it will be helpful to know that we are considering for Report a number of other possible exclusions, one of which will be the exclusion from Chapter I prohibition of a regulated market for investment services in a EEA regulated state, just as similar markets in the UK regulated under the Financial Services Act have been excluded under Schedule 2.

On Question, amendment agreed to.

[Amendment No. 47 not moved.]

Lord Lucas moved Amendment No. 48:

Page 48, line 13, at end insert--


.--(1) The Chapter I prohibition applies to an agreement which relates to the production of or trade in an agricultural product only to such extent as the Secretary of State may by order provide.
(2) In this paragraph "agricultural product" means any product of a kind listed in Annex II to the Treaty.").

The noble Lord said: This amendment addresses the problem that agricultural co-operatives may experience under the Bill. The Bill quite rightly extends a general prohibition to horizontal agreements, agreements between people who are competitors in an industry. Agricultural co-operatives have had a long and useful role in the past--and one hopes for a similar future--as well as having a significant role as such in EC legislation. They might hope for exclusion under the de minimis provisions, eliminating small businesses from the scope of the Bill, but it does not take many farmers to band together before their turnover exceeds any likely level of that provision: perhaps just 50 or 100 farmers, given that those co-operatives trade in products and

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trade several times in their turnover, as it were, in physical terms, and may also provide the raw materials that farmers need.

It may need only 100 farmers to make up a £50 million turnover business when one reaches the agricultural co-operative level. They might hope for exemption under Clause 9, but they fail under Clause 9(a) because they are too far from the consumer to show that they are demonstrating a fair share of the resulting benefit to the consumer. They would fail also under Clause 9(b)(ii).

We turn to the question of how we deal with that problem. The amendment is intended to provide a means of doing so. It excludes agriculture, as defined in the treaty, from the scope of Chapter I, but allows the Secretary of State to provide certain subsets of agricultural agreements which would fall within Chapter I. That gives the Secretary of State the necessary ability to curb any abuses that there might be, while allowing agricultural co-operatives, which are not the most sophisticated and worldly of businesses, to proceed in any ordinary way, and to operate on the presumption that their ordinary way of doing business will not land them in trouble under the Bill.

This is a problem which does not apply to agriculture only; it applies to any small producers of primary products who are selling into a market which is dominated by much larger producers. The other obvious candidates would be fishermen and forestry products. I do not know those markets well, and I am not sure that they have organisations like agricultural co-operatives operating; but forestry is one that could do with it, and it would benefit greatly if those structures existed. We would see a great many under-used woodlands coming into use. That is diverging from the main point, but I hope that the Government will take on board the thrust of the amendment, will look rather wider than the amendment goes, and produce on Report an amendment which suits their tastes, and answers the problems which I have raised. I beg to move.

Lord Stanley of Alderley: I should declare an interest in so far as I have been a director of a few agricultural co-operatives. Therefore I must fall into the category of being fairly naive, according to my noble friend. I support my noble friend, and I should, first, like to thank the Minister, the noble Lord, Lord Simon, for having taken so much trouble in contacting me last week to explain the Government's position on this matter.

I want to ask tonight that the Minister consider the matter, tell us what the position is, and if he cannot give a definitive answer tonight, I hope that he will be able to do so on Report. I am sure that he, like me, would like to make a decision fairly quickly rather than procrastinate on the matter.

Lord Graham of Edmonton: I am delighted to have support for co-operatives from the noble Lord, Lord Lucas. It is not a surprise. They are good organisations. They need some assistance and encouragement. The interest I declare is as chairman of the United Kingdom Co-operative Council which has, as one of its members, the Agricultural Co-operative Movement. The case for

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a modest interpretation of what can be done to assist agricultural co-operatives, and others of a similar size and position, has been well stated.

My noble friend the Minister and his colleagues have an opportunity, when one looks at "Competition" and the big boys, to remember that there are many little people struggling. I am not saying that the farmers are starving or in need, but they need to feel loved and wanted. One of the ways in which that can be achieved is by careful consideration of a Bill such as this, which could offer some ease. I hope that the Minister will do so and that he has some helpful comments to make.

Lord Lucas: Perhaps I, too, should have declared an interest in that my great-uncle, who held my title, set up a co-operative bacon factory in Hitchin in 1910.

Lord Graham of Edmonton: Is it still going?

Lord Lucas: I have not been to see.

Lord Graham of Edmonton: You never said a rasher thing!

Lord Simon of Highbury: Perhaps I may take this opportunity to intervene and, unfortunately, take the mood of levity down a peg or two. I hope that I am able to offer solace to the noble Lords, Lord Lucas and Lord Stanley. The exclusion sought by the noble Lords has also been requested by the National Farmers Union and the Federation of Agricultural Co-operatives as part of the consultation process we have been undertaking.

The noble Lords made a good case for providing an exclusion on the Chapter I prohibition. Such an exclusion might well be along the lines of an EC treatment of agricultural agreements set out in EC Regulation 26/62. That would limit so far as possible any inconsistencies with the EC approach.

I believe the case to be strong. The points made merit very careful consideration and I shall do that between the Committee and Report stages. I hope that in the meantime the noble Lord, Lord Lucas, will withdraw his amendment.

Lord Lucas: Yes, I am happy to withdraw the amendment. Clearly, if the Government are unable to produce proposals by Report or Third Reading we may have to insist on something. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

9.30 p.m.

The Earl of Lytton moved Amendment No. 49:

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