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Lord Jacobs: My Lords, I have listened again to a strong argument in favour of the small pharmacies. I had the opportunity to study the arguments of the pharmacies as to why the Restrictive Practices Court should not examine the situation. I sometimes feel that the emotion of the situation--I recall the description given in this House of an old lady in a village who needed just one prescription but who could not get any transport and whose nearest pharmacy was 30 miles away--rings bells with all of us. We can see that it would be disadvantageous to these communities to lose small pharmacies.

I have read the data regarding how many pharmacies are involved. The figure is 3,000 out of 12,000. However, there are just a few hundred pharmacies situated in the country far away from towns. I did not argue then--and I do not argue now--that those small pharmacies should be protected. It would not be difficult or unaffordable for the large pharmacies to transfer some of their revenue to support the small pharmacies.

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I do not say that they should do it voluntarily; it could be done by means of a graduated scale for prescription charges.

I believe not that we were hoodwinked but that we were emotionally misled on this issue. According to the data sheets to which I referred, the cost to the consumer if resale price maintenance continued would be an extra £900 million over a period of five years. That is an enormous amount of money and I find it difficult to understand why the House feels that that is not of any consequence.

It is not for the House to decide the future of small pharmacies. The matter will be considered by the Restrictive Practices Court. When that court makes its decision, I am sure that we shall all abide by it. In my opinion, the case for helping small pharmacies but abolishing RPM remains very strong.

5 p.m.

Lord Fraser of Carmyllie: My Lords, I thank the Minister for his explanation of this group of amendments. I congratulate him on introducing what I think is the longest amendment I have ever seen and also on his explanation of the various points at which these provisions will come into force. I am not sure that I took in everything that he said, but for those who will have the important task of implementing this legislation it is valuable to have on the record at such an early date exactly when it is anticipated the provisions will come into force. If I understood the Minister correctly, it will be March 2000.

I do not intend to revisit the issue of small pharmacies. I still feel strongly about the matter and I believe there is an essential contradiction between the Government's health policy and their competition policy, one of which will have to come out on top at the end of the day. It is not just rural communities which are affected. If there is one pharmacy that I wish to see retained, rather than pharmacies in some of the pretty villages up the glens in the Grampians, it is a pharmacy on one of the worst estates on the outskirts of Dundee. Pharmacies such as that one are central to government health policy and those are the ones which we wish to see retained. We have been over that ground. Commissioner Van Miert managed to terrify those who might otherwise have wished to continue the debate, and we accept that outcome.

Paragraph 23(1) of the new schedule proposed in Amendment No. 104 provides that, if the court has found an agreement,


    "not to be contrary to the public interest, the transitional period lasts for five years".
I understand that five-year period in subparagraph (1) of paragraph 23 to start from March 2000. In subparagraph (3) there is envisaged a set of circumstances where, at the time these provisions come into force, the legal proceedings have not yet terminated. From the narrative that has been given of the proceedings in relation to community pharmacies, I am bound to say that, though at this time March 2000 may seem fairly distant, it would be surprising if all legal proceedings on that matter were concluded by that date. If at a point after

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March 2000 the court were to determine that agreements in place were not contrary to the public interest, will that five-year period still run from March 2000 or will it run from the time and date of the determination by the court? I may be making the matter unnecessarily complicated, but it would be useful to have clarification of that point.

I am grateful to the noble Lord for what he said about the transitional arrangements. I have no doubt that they will be studied carefully outside your Lordships' House.

Lord Simon of Highbury: My Lords, I am grateful to all noble Lords who have spoken and who have helped in formulating the Government's approach to the question of over-the-counter medicines. I quite understand that strong views are still held in the House. I thank my noble friend Lord Morris for the work he has done. I believe we are now at a stage where the Government must listen to the views of the court and formulate their health policy accordingly.

I thank the noble and learned Lord for his kind words on the expectation that we will have helped the business community by extending the date to give them time to prepare and clarifying how that will work in the transitional schedule, which is tabled in the Library for those who wish to see the detail. In answer to the noble and learned Lord's question, the five-year period starts when the court has reached its conclusion.

On Question, Motion agreed to.

COMMONS AMENDMENT

2

Clause 6, page 4, line 34, leave out ("an agreement does not") and insert ("there is a failure to").

Lord McIntosh of Haringey: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 2. In doing so, I shall speak also to Amendment No. 3.

Amendment No. 2 corrects the drafting of Clause 6(6)(b), which provides for the cancellation of a block exemption where an obligation under the block exemption order is not complied with. Currently the clause refers to the agreement, rather than the parties to that agreement, not complying with the order. The amendment remedies that.

Amendment No. 3 fulfils a commitment made to your Lordships by my noble friend Lord Haskel in response to an amendment tabled on Third Reading by the noble Lord, Lord Kingsland, to consider whether there should be a limitation on the director's power to cancel a block exemption in respect of a particular agreement, along the lines of the limitation on the Commission's corresponding power in European law. Clause 6(6)(c) currently confers a general power for a block exemption order to specify circumstances in which the director may cancel the exemption given by a block exemption order in respect of a particular agreement. The amendment makes it clear on the face of the Bill that this power is to be limited to the ground that the agreement does not fulfil the criteria specified in Clause 9 of the Bill. The Bill will thus generally follow the position under European Community law contained in Article 7 of

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EC Regulation 19/65. It will be for the director to judge whether a particular agreement falls within the terms of Clause 9.

The power for the block exemption order to enable the director to cancel the benefit of a block exemption when there has been a breach of an obligation remains.

Moved, That the House do agree with the Commons in their Amendment No. 2.--(Lord McIntosh of Haringey.)

Lord Kingsland: My Lords, I am much obliged to the Minister for his amendment.

On Question, Motion agreed to.

COMMONS AMENDMENT

3

Page 4, line 37, leave out from ("that") to end of line 38 and insert ("if the Director considers that a particular agreement is not one to which section 9 applies, he may cancel the block exemption in respect of that agreement.").

Lord McIntosh of Haringey: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 3.

Moved, That the House do agree with the Commons in their Amendment No. 3.--(Lord McIntosh of Haringey.)

On Question, Motion agreed to.

COMMONS AMENDMENT

4

Clause 13, page 8, line 22, leave out from ("with") to end of line and insert ("such date as may be specified in a notice in writing given to the applicant by the Director when the application has been determined.


( ) The date specified in a notice under subsection (4)(b) may not be earlier than the date on which the notice is given.").

Lord McIntosh of Haringey: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 4. In doing so, I shall speak also to their Amendment No. 5.

These amendments are a response to amendments moved in Committee by the Liberal Democrats. The point was argued that the Bill might allow a party to an agreement which he has notified to the director to be liable to penalty before the director's decision was made known to him. We do not think that the director would impose a penalty before a person had received notice of his determination. However, the point that the Bill should be clear on this point is not unreasonable.

Moved, That the House do agree with the Commons in their Amendment No. 4.--(Lord McIntosh of Haringey.)

On Question, Motion agreed to.

20 Oct 1998 : Column 1345

COMMONS AMENDMENT


5

Clause 14, page 8, line 40, leave out from ("with") to end of line and insert ("such date as may be specified in a notice in writing given to the applicant by the Director when the application has been determined.


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