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Lord Kingsland: My Lords, I disagree profoundly with the noble Lord, Lord Borrie. I understand from the Minister that one of the main objectives of the regime is to have as light a touch as possible to enable British industry to be competitive and as free as possible from bureaucratic constraints. It is conceivable that former public utilities will now face not two, but three, disciplinary regimes: the regime of the regulator; the regime of the Director General of Fair Trading; and the regime of the former Monopolies and Mergers Commission which will now become the competition commission. I submit that this is highly undesirable. I hope that the Minister will look again at his apparent determination to continue with complex and scale monopolies.

Lord Campbell of Alloway: My Lords, the noble Lord, Lord Borrie, opposes the amendment on the ground that the law is not clear and therefore should be allowed to continue to be unclear, whereas my noble and learned friend's amendment clarifies the law so that we know where we are. I should have thought that there was something to be said for a clear law that would let us all know where we were. The subject is complicated enough without encouraging want of clarity.

Lord Simon of Highbury: My Lords, I am grateful to the noble and learned Lord, Lord Fraser, for prompting another interesting debate on the subject. I am grateful for the contributions we have had.

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It is important that we review why the scale monopoly provisions are there in the first place. These provisions enable impartial investigation of markets in which a single company has a significant market power, and enable, if matters are found to be contrary to the public interest, wide ranging remedies to be imposed. There is a case--my noble friend Lord Borrie put it eloquently to us--for retaining the powers to investigate situations where it is fundamentally the structure of the market, and not any specific abuse, which is the problem. In these circumstances the scale monopoly provisions enable the more flexible imposition of structural remedies, including, as the noble Lord, Lord Borrie, said, the divestment of part of a business.

The new prohibition on abuse of market dominance will replace these provisions in large part. This is what we said in our consultation document in August. The provisions will be very much a reserve power. Nevertheless, we should not discount the possibility that they may prove of value as the only real means of remedying a market in which structural factors inhibit free competition.

In the utility sectors, for example--they were mentioned by the noble Lord, Lord Kingsland--full competition is developing, but it is not yet fully established. It is not inconceivable that there will be cases in which the more flexible powers available under the scale monopoly provisions to enable structural remedies to be imposed could prove necessary in order to protect or promote competition. I recall the noble and learned Lord, Lord Fraser, himself saying in the debate in Committee, at col. 301 of the Official Report of 13th November, that if there are gaps to be filled then they should be filled.

We cannot rule out the possibility of important gaps appearing in the future. I hope that the noble and learned Lord, Lord Fraser, will consider what I have said, in particular about the reserve nature of those powers considering the specific gaps to which I have alluded, and which he recognised as important. I hope that he will withdraw his amendment.

Lord Fraser of Carmyllie: My Lords, I have heard the Minister advance arguments with a greater degree of conviction than he did in answering this brief debate. If I noted his remarks correctly, he said that we must not discount the possibility that it might prove useful at some point in the future.

The provision is not necessary. I do not withdraw from the word "excessive". I believe that there is excessive duplication. The noble Lord might have read on from what said at col. 301 of the Official Report. I said:

"For the sake of UK business",

and we should regard it from that standpoint and not only from the standpoint of those who have the duty to administer the law,

"we should not have unnecessarily heavy regulations and any duplication must be kept to the bare minimum. In our view, it is probably highly unnecessary to retain this set of complicated legislative provisions at the same time as introducing the two prohibitions".

That remains our view. I am bound to say that I am not persuaded that it is a necessary part of the armoury that is required. I shall not press the matter at present; however,

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I indicate to the noble Lord that we are not much persuaded by the argument. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6 p.m.

Clause 18 [Abuse of dominant position]:

Lord Kingsland moved Amendment No. 19:

Page 10, line 14, after ("undertakings") insert ("which carry on business in the United Kingdom").

The noble Lord said: My Lords, I shall also speak to Amendments Nos. 21 and 23.

I believe that this is one of those rare areas where the Minister and the Opposition Front Bench are in agreement--though I suspect that the Minister will disabuse me of that belief when he rises to reply.

The issue is one of drafting. Our concern is to make sure that the true nature and scope of the geographical market is taken into account in relation to a particular practice of a particular industry. As Clause 18 is drafted, it looks as though a market which is genuinely, say, European or genuinely, say, global, is to be artificially limited to the United Kingdom alone. We believe that the recasting of Clause 18 by the Minister, while helpful, does not make that point clear. The purpose of the amendments is to make it crystal clear. I beg to move.

Lord Simon of Highbury: My Lords, I am grateful to the noble Lord, Lord Kingsland, for raising this issue again. He may be surprised to hear that I do not think there is anything between us in terms of substance.

I explained in Committee how we intend Clause 18 to operate in relation to the relevant geographic market for assessing dominance. Indeed, your Lordships' Committee accepted two amendments on that same point. In moving those amendments I explained that it was our intention that Clause 18 is not read as limiting the geographic market to the United Kingdom. There may well be circumstances in which the relevant market includes--but is wider than--the United Kingdom.

This House decided in the case of Pepper v. Hart that reference can be made to statements in Hansard in certain circumstances to clarify the meaning of legislation. We believe that the amendments we made to this clause in Committee met the point about which the noble Lord is concerned. However, should the courts consider that the meaning of Clause 18 is ambiguous in this respect, they will be entitled to look at the statement I made. I believe that the noble Lord and I are at one as to what the effect of the clause should be on this point. I hope that my remarks will satisfy the noble Lord on the wording of the clause, and I ask him to withdraw the amendment.

Lord Kingsland: My Lords, I am most grateful to the noble Lord for that statement. In those circumstances I am very pleased to withdraw the amendment. I beg leave to do so.

Amendment, by leave, withdrawn.

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The Deputy Speaker (Lord Murton of Lindisfarne): My Lords, if Amendment No. 20 is agreed to, I shall not be able to call Amendment No. 21 because of pre-emption.

Lord Kingsland moved Amendment No. 20:

Page 10, line 14, leave out from ("undertakings") to end of line 26 and insert ("in a dominant position which is carried out with the intention of eliminating a competitor or of substantially lessening competition within a relevant market including the United Kingdom shall be prohibited.").

The noble Lord said: My Lords, this amendment is not an area where the Minister and ourselves are in agreement. It relates to the definition of "the prohibition". In our submission it is important to include the intent of the competitor in making a decision as to whether or not a particular prohibition has been breached.

I understand that the Minister does not accept this approach, and that one of the reasons is that the jurisprudence of the European Community does not incorporate "intent" into the definition of the prohibition. However, the Minister will be aware that it is his intention to give the Director General of Fair Trading considerably greater investigatory powers than the European Commission has in examining the activities of a particular company. In those circumstances, does he not think that it would be perfectly within the capacity of the Director General of Fair Trading to determine whether or not there was a particular anti-competitive intent in the minds of those who directed the company that was being investigated? I beg to move.

Lord Desai: My Lords, it was not clear whether the noble Lord was also speaking to Amendment No. 22, or whether he intends to speak to that amendment separately.

Lord Kingsland: My Lords, Amendment No. 22 raises a different point. I should prefer to wait.

Lord Desai: My Lords, Amendment No. 20 is a good stab at defining the problem more clearly than is currently the case under Clause 18. It is the effect that such behaviour is likely to have on competition about which we are worried, not merely the problem of dominant position in general.

When I look at the way in which the amendment is framed, I wonder how intentions can be proved. Perhaps the noble Lord means, "which could have the effect of" eliminating competition, or "which is likely to have the effect of" eliminating competition. Some such phrasing might have been better. However, I entirely agree with the motivation behind the amendment, and I support it.

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