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Lord Kingsland: My Lords, I thank the Minister for his not very surprising reply--at least, not very surprising to me. I make one point of clarification. It was not my intention to suggest that the former powers of the Monopolies and Mergers Commission should be transferred to the High Court. It was my intention that

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such residual powers as may reside in the Monopolies and Mergers Commission should be transferred to the Director General of Fair Trading. I entirely take the point, which I think the Minister picked up from the eloquent intervention of the noble Lord, Lord Borrie, that it would not be right for a High Court judge to deal with matters connected with policy on mergers, and so forth. I hope there is no confusion about that. I shall reflect carefully on the Minister's reply and consider whether I should return to the matter at Third Reading. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

7.15 p.m.

Lord Fraser of Carmyllie moved Amendment No. 139:

Page 22, line 7, at end insert ("and the Commission and each member of that Commission shall, in the performance of those functions, apply their own skill and judgement independently on the evidence before them").

The noble and learned Lord said: My Lords, if we cannot have our first option of a competition court, we should like to ensure that the competition commission is, in the exercise of its functions, as judicial as it possibly can be. For that reason Amendment No. 139 provides that:

    "the Commission and each member of that Commission shall, in the performance of those functions, apply their own skill and judgement independently on the evidence before them".

Grouped with that amendment are Amendments Nos. 143 and 144. Amendment No. 143 suggests that a member of the commission appointed in accordance with the sub-paragraph referred to shall not continue to exercise any functions of the commission other than in relation to appeals. In short, we are trying to separate out the individuals, given the fact that the competition commission will have a mix of both executive and judicial functions. It will both exercise the investigative and enforcement powers of the MMC, which it will replace, and act as the body to which appeals from decisions of the director general will be made. It is relatively rare for executive powers of the kind exercised by the MMC to be combined in one body with judicial or quasi-judicial powers. In relation to EC competition matters, it is the European Court, the court of first instance, which has a purely judicial role. This amendment provides for a proper separation of the two.

Amendment No. 144 requires the Secretary of State to provide funding for the competition commission at a level which will enable it to perform its functions in an efficient and effective manner. At present the Bill provides for funding to be determined on a discretionary basis by the Secretary of State, who must pay such sum as he considers appropriate for the performance of these functions. I doubt whether the Chancellor of the Exchequer would be happy to live with this amendment. But, if the competition commission is to be taken seriously, some expression of an appropriate degree of

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funding to enable the commission to perform its functions effectively and efficiently is desirable. I beg to move.

Lord Borrie: My Lords, I have some sympathy with the last of the three matters raised by the noble and learned Lord. I am always concerned if public officials or bodies are inadequately resourced.

I thought that Amendment No. 139 was mildly insulting, unless the noble and learned Lord, Lord Fraser, has some evidence that members of the Monopolies and Mergers Commission, who have been performing functions of this kind for the past 40 years, have in any way not applied their skill and judgment independently on the evidence before them. I am not sure why one needs such a provision.

As to Amendment No. 143, which is in a way more important, I believe the proposal is a bad idea. One of the benefits of the way in which the competition commission is to be structured, according to the present wording of the Bill, with the reporting function and the appeal function, is the cross-fertilisation which will result. It would be an unfortunate waste of talent if members were appointed only to the one function and could not be transferred by the chairman or president from one function to the other when suitable cases arose. With the benefits of the considerable experience which the members will have, it would seem a pity if the structure were so rigid that members were appointed to one slot and could not move to the other.

Lord Haskel: My Lords, I presume the comments of my noble friend Lord Borrie--that he finds Amendment No. 139 vaguely insulting--arise from the fact that we expect members of the commission to exercise their functions independently and effectively. As the noble and learned Lord will be aware, anyone exercising a judicial function, as members of the tribunal undoubtedly will be, is required to act precisely in the way described in the amendment and not on the basis of external considerations. That is an established principle.

As is appropriate where public interest tests are concerned, the members' role is advisory. But the ultimate control lies with Parliament because Ministers are accountable for the decisions that are made on the basis of the MMC's advice.

In relation to Amendment No. 143, I agree with my noble friend Lord Borrie that there will be considerable benefits from cross-fertilisation. It will facilitate the transference of expertise. It should also promote a consistent approach to competition questions across the piece, notwithstanding the fact that the nature and procedures of the appeal and reporting arms of the commission will, as I explained, be different. Those are important, practical objectives.

A further practical point is that there is inevitably a finite pool of people who are able and willing to become panel members and who have the necessary skills, expertise and experience. Clearly before an individual could be appointed as a member of both the appeal panel and the reporting or specialist panel, he or she would have to demonstrate that they have the different

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attributes required. We may or may not get candidates with the necessary breadth of attributes. But if we do, I think it would be wrong to rule out using them both on the appeals and reporting sides of the commission.

Turning to Amendment No. 144, I can well imagine that my right honourable friend the Chancellor would say that there must be some form of budgetary control, which is essential in terms of good administration. The amendment would remove any such controls. The independence of the tribunal is ensured in other ways. Under these provisions dismissal is only possible on grounds of incapacity or misbehaviour.

I am grateful to the noble and learned Lord for giving me the opportunity to explain our position on these matters, and I hope that with those explanations he will be prepared to withdraw the amendment.

Lord Fraser of Carmyllie: My Lords, before the noble Lord, Lord Borrie, or any of those with whom he has worked in the past is upset, let me make it clear that there was no intention on my part to be insulting to anyone who has undertaken work on the Monopolies & Mergers Commission. I am satisfied, in relation to Amendment No. 139, by the declaration of the noble Lord, Lord Haskel, that that is exactly how any member of the commission should act in the future. For my purposes, his statement on behalf of the Government is sufficient.

In relation to Amendment No. 143, a fundamental difference of philosophy occurs. I believe that there is a strong argument for separating out that investigative and judicial or appellate role. Rather curiously, it seems to me that the Government acknowledge that. If we go to Schedule 7, paragraph 2, we do not simply have, "a commission shall be established with a certain number of members to perform these functions". We find that,

    "The Commission is to consist of...members appointed by the Secretary of State to form a panel for the purposes of the Commission's functions in relation to appeals".

Then, in an almost separate category of members, we find,

    "members appointed by the Secretary of State to form a panel for the purposes of the Commission's general functions".

The third section is,

    "maintained under paragraph 22 for the purposes of a newspaper merger reference...members appointed by the Secretary of State under"--

and there follow a number of utility statutes.

If that is the way in which the Secretary of State must direct his mind and people must be appointed with those qualities, that experience and that knowledge, when it comes to the exercise of an appellate jurisdiction, it would be appropriate for those who are going to exercise the appellate jurisdiction to be drawn only from those in paragraph 2(1)(a).

The noble Lord, Lord Borrie, says that cross-fertilisation is desirable. I am bound to say that where there is a confusion of those functions, I would be concerned that those who come before the panel would feel, not that there was a useful cross-fertilisation, but that to some extent people may be somewhat tainted

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if they performed both responsibilities at the same time. I am sure the Government will acknowledge that it is unusual in our system to have a single body carrying out both an investigative and a judicial function. While we may return to that at a later stage, at the present time I beg leave to withdraw Amendment No. 139.

Amendment, by leave, withdrawn.

[Amendments Nos. 139A to 139C not moved.]

Schedule 7 [The Competition Commission]:

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