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Lord Haskel: At the risk of disappointing my noble friend Lord Peston, who is not in his place, instead of quoting Adam Smith perhaps I may quote my right honourable friend the President of the Board of Trade,
Margaret Beckett. In her foreword to the consultation document published with the draft Bill in August she said:
- "Effective and fair competition is essential to ensure value and choice for customers".
The whole purpose of this legislation is to protect competition more effectively than we do at the moment. This will benefit UK competitiveness and, as Margaret Beckett has emphasised, it will benefit the consumer.
I say to the noble Baroness, Lady Oppenheim-Barnes, that this is a Bill concerned with competition. The consumer's interests are at the heart of this legislation. As my noble friend Lord Borrie has said, the Director General of Fair Trading must take full account of the impact on consumers in assessing whether behaviour is anti-competitive. I hope that that reassures the noble Baroness, Lady O'Cathain. The same applies under the new Bill when the director is considering whether to grant an exemption from the Chapter I prohibition. Indeed, the exemption criteria set out in Clause 9 expressly require that consumers should enjoy a fair share of the benefits. The ultimate objective of the Director General of Fair Trading's work as a competition authority is to benefit consumers. In his annual report the director describes the aim of the OFT as to protect the economic interests of consumers in the UK by safeguarding effective competition. I am therefore sure that the interests of consumers will be constantly at the forefront of the director's mind.
My fundamental objection to Amendment No. 198 is that it appears to undermine these principles. A discrete consumer representative within the OFT would be a permanent question mark over the director's willingness and ability to take proper account of all the relevant factors, particularly the consumer's interests. I have no wish to undermine the director's role in this way. Moreover, if consumer interests were to be given special representation in the OFT, would not other interest groups such as trade union interests also have a case for separate representation? More prosaically, a discrete office would require additional resources within the OFT, and it would add another layer to the decision-making process. In short, I do not think that it would be right for a body charged with the enforcement of the prohibitions to incorporate specialist interest groups. But we believe that it is absolutely crucial that the consumer has a clear voice under the new regime. The Bill ensures that this will be the case. We believe it is an essential part of a fair and transparent system that there is recourse to effective appeal. We have extended this right under the Bill to consumers.
We have therefore ensured that third parties with a sufficient interest will be able to appeal to the tribunal against decisions by the director. We have gone further to ensure that organisations representing affected consumers will be able to appeal on their behalf. There is nothing in the Bill to prevent people being appointed to the appeal tribunal panel and sitting on tribunals to hear appeals on the basis that they have a particular expertise in consumer matters. We are also including provision in Clause 56 of the Bill to facilitate private actions in the courts by those harmed by breaches of the prohibition. All of this is in the new Bill. The interests
of the consumer are at the heart of the new prohibitions and the enforcement and appeal arrangements under the Bill will ensure that the consumer has a clear voice in their application.I hope that what I have said will satisfy the noble Lord, Lord Ezra. Knowing that he is indeed a champion of the consumer, I hope that he will feel able to withdraw his amendment.
Lord Ezra: I thank the noble Lord for his considered reply. I am however a little concerned about its main drift, which emphasised the possibilities of an appeal. The whole point of the amendment is to get in before one has to appeal against a decision which appears to be unsatisfactory. I find it difficult to understand why the Government resist the idea of a consumer advisory body. It may be that it should not be placed within the OFT as proposed; it may be that such a body can be placed elsewhere, perhaps with the competition commission. As the noble Lord, Lord Borrie, suggested, perhaps it can be set up independently, for it to be consistent with other proposals that have been made, to be consulted during the formulation of decisions reached by the director general.
I am a little worried that the emphasis should be put on appeal being available to the consumer interests rather than on consumer interests being brought into the decision-making process. Can the noble Lord, Lord Haskel, comment on that matter?
Lord Haskel: The appeal is a failsafe mechanism to which consumers can resort if everything else goes wrong. Prior to that there are all the safeguards which I explained in my response. The Director General of Fair Trading has a special department within his office for looking after consumer interests and the appeal is a failsafe process at the very end of the line.
Lord Ezra: I would like to think very carefully about this matter. In the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 9 [Director's Rules]:
Lord Kingsland moved Amendment No. 199:
The noble Lord said: This amendment refers to a matter which the Opposition raised on the second day of the Committee stage. We tabled amendments to Schedules 5 and 6 which proposed removing the power of the director general to convert unilaterally an application for guidance into an application for a decision. To be consistent with that, we have to do the same thing in relation to this schedule. That is the reason for wishing to excise paragraph (c) at the bottom of page 67.
The Minister will note that in paragraph (b) the director, having issued the guidance, can thereafter relieve a company from either the impact of Chapter I or Chapter II prohibition. However, paragraph (c) is much more onerous because it concerns a company which, having requested guidance, suddenly finds half-way through consideration of that request that the
Lord Haskel: I speak to Amendment No. 199 together with Amendment No. 200. Amendment No. 199 relates to the director's ability to convert an application for guidance into an application for a decision. The noble Lord referred to the Opposition's sense of sportsmanship. I refer the noble Lord to my earlier response when I gave a solemn and binding undertaking to reflect upon the issue.
Lord Kingsland: I thank the noble Lord for reminding me that he agreed to reflect upon the matter. I wonder whether his reflections have yet matured.
Lord Haskel: I am afraid that my reflections have not matured. We have been reflecting on the further amendments. The result of our reflections will be put forward at the next stage of the Bill.
Lord Kingsland: In thanking the Minister for that reflective reply, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Kingsland moved Amendment No. 200:
The noble Lord said: The amendment corresponds to a previous amendment to Clause 10 which sought to delete subsections (5) to (8) which gave the director power to cancel an EC exemption. This power, which is reflected in our further amendment to a different part of the Bill, contradicts what we understood to be the fundamental principle behind the Bill, namely, that our domestic provisions should dovetail with the European provisions in such a way that the minimum burdens are imposed upon British industry in order to enhance competitiveness. If these provisions dovetail and if they reflect the same kinds of obligations, we do not understand why, if the EC has granted an exemption, we should second guess them. I beg to move.
Lord Haskel: The issue of dovetailing with EC regulations will arise later in the debate. Can we leave that question until we debate the whole matter on later amendments? Amendment No. 200 relates to a discussion we had on the first day of Committee in relation to Clause 10 concerning the director's ability to impose conditions with respect to parallel exemptions or to cancel them. I made it clear then that the director should be able to take action against an agreement which was exempt.
If the noble Lord withdraws the amendment we can perhaps deal with the issue of dovetailing when we discuss the later amendments.
Lord Kingsland: I understand entirely what the Minister says. I am sure he will understand that we have
Amendment, by leave, withdrawn.
Schedule 9 agreed to.
Page 67, leave out lines 44 and 45.
Page 68, leave out lines 34 to 47.
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