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Lord Hunt of Wirral: The Minister's example is interesting. Surely it would be possible for such modification of the interests of national security to be contained under the existing provisions in Clause 57(3) and (4) which enable the Secretary of State to modify the section by adding any consideration which is as important as he described, such as new technology—and he should know as Minister for Science and Technology.

Lord Sainsbury of Turville: Is the noble Lord saying that the only issue could be national security? I suggest

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that other considerations might be important. One cannot say that a situation where we do not know the specific circumstance will definitely come under national security.

I agree that it is cautious to say that circumstances may arise where we need to be able to take this action. The provision also has to be passed by affirmative resolution in the Houses. The Secretary of State cannot suddenly say, "In this merger case I shall take into account these purely political considerations", without that being clearly agreed to by both Houses of Parliament.

The newspaper issue is quite different. We shall deal with newspapers in a moment. I believe that they are covered by the Fair Trading Act which will be updated by the communication Bill. In relation to Richard Desmond's acquisition of the Express, the acquisition of the Express newspaper business by Northern & Shell group fell under the general merger provisions of the Fair Trading Act. Therefore, it was treated in exactly the same way as any other merger considered under that Act and the OFT saw no reason to refer it to the Competition Commission on competition grounds.

Later we shall come to the matter of newspapers which raises a different issue. On the central issue, I shall argue strongly that we need a residual power that will be allowed to the Secretary of State only by affirmative resolution of the two Houses. We need that because one cannot be certain whether there will be circumstances in which that may be necessary.

Lord Hunt of Wirral: I am grateful that the Minister has been much more explicit than his ministerial colleagues in the other place, but I cannot immediately find the affirmative resolution procedure to which he refers as it applies to Clause 41(3) which states:


    "For the purposes of this Part a public interest consideration is a consideration . . . specified in section 57",

and it continues:


    "or is not so specified but, in the opinion of the Secretary of State, ought to be so specified".

There is certainly an affirmative resolution procedure if he were to follow the procedure in subsections (3) and (4) of Clause 57, but I cannot see that the opinion of the Secretary of State has to be affirmed by a resolution of both Houses under Clause 41(3).

Lord Borrie: It seems to me that if something is not specified, and in the opinion of the Secretary of State it ought to be specified, he or she then has to use the procedure in Clause 57 under which there has to be an order and an affirmative resolution.

Lord Sainsbury of Turville: That is also my reading of the Bill.

Lord Hunt of Wirral: How many times when I was a Minister did I affirm the opinion of the noble Lord, Lord Borrie, as we constantly re-appointed him as Director-General of Fair Trading?

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I shall respond to the Minister as positively as I can by saying that my concern remains. Companies would not know when they agreed to merge whether or not the Secretary of State would intervene on public interest grounds that were added to the list, hitherto unspecified, after the merger was agreed. I believe that new technology has been specified before in legislation to cover situations such as product liability in which there is a specific reason why, in development terms, legislation should not apply. Therefore, if he is right that there should be some way of protecting new technology—that sounds like a global view with research being carried on in all parts of the world, usually led by this country and its great scientific brains—I am not sure that that would be a good consideration.

Moving away from the specific example that he has given, I believe that it should be possible to specify matters in a way that enabled at least the terminology to be narrowed. At the moment it is completely wide open and there is no restriction at all, other than the affirmative resolution procedure—if the noble Lord, Lord Borrie, is right—which cannot be amended. Therefore, the Secretary of State could lay a resolution before both Houses that added a list of various considerations, which in the opinion of the Secretary of State should be added, and it would be possible for both Houses only to agree or to disagree and not to change the list. That is why I believe that it is necessary to be more specific. Public interest considerations should be specified and identified in primary legislation.

We shall come on to the plurality of the media and prudential rules, that are specifically mentioned in the ECMR. I believe that to leave in the discretion raises the risk of political involvement in a process that the Government say they want to leave to the competition authorities. I believe that this is a helpful opportunity for the Minister to introduce some further clarification. I want to ponder on the points that he has raised. In those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 41 agreed to.

Clauses 42 to 47 agreed to.

Clause 48 [Variation of references under section 44]:

Lord Sainsbury of Turville moved Amendment No. 126:


    Page 34, line 29, at end insert—


"(1A) Where, by virtue of subsection (1), the Commission treats a reference made under subsection (2) or (3) of section 44 as if it had been made under subsection (4) or (as the case may be) (5) of that section, paragraphs 1, 2, 7 and 8 of Schedule 7 shall, in particular, apply as if the reference had been made under subsection (4) or (as the case may be) (5) of that section instead of under subsection (2) or (3) of that section.
(1B) Where, by virtue of subsection (1), the Commission treats a reference made under subsection (4) or (5) of section 44 as if it had been made under subsection (2) or (as the case may be) (3) of that section, paragraphs 1, 2, 7 and 8 of Schedule 7 shall, in particular, apply as if the reference had been made under subsection (2) or (as the case may be) (3) of that section instead of under subsection (4) or (5) of that section.

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(1C) Subsection (1D) applies in relation to any undertaking accepted under paragraph 1 of Schedule 7, or any order made under paragraph 2 of that Schedule, which is in force immediately before the Commission, by virtue of subsection (1), treats a reference as mentioned in subsection (1).
(1D) The undertaking or order shall, so far as applicable, continue in force as if—
(a) in the case of an undertaking or order which relates to a reference under subsection (2) or (3) of section 44, accepted or made in relation to a reference made under subsection (4) or (as the case may be) (5) of that section; and
(b) in the case of an undertaking or order which relates to a reference made under subsection (4) or (5) of that section, accepted or made in relation to a reference made under subsection (2) or (as the case may be) (3) of that section;
and the undertaking or order concerned may be varied, superseded, released or revoked accordingly."

On Question, amendment agreed to.

Clause 48, as amended, agreed to.

Clauses 49 to 54 agreed to.

Clause 55 [Competition cases where intervention on public interest grounds ceases]:

Lord Sainsbury of Turville moved Amendments Nos. 127 to 129:


    Page 40, line 5, after "or" insert "(as the case may be)".


    Page 40, line 25, after "or" insert "(as the case may be)".


    Page 40, line 32, at end insert—


"(8) Where the Commission becomes under a duty to proceed as mentioned in subsection (3) or (6), references in this Part to references under sections 21 and 32 shall, so far as may be necessary, be construed accordingly; and, in particular, sections 74 to 78 shall apply as if a reference has been made to the Commission by the OFT under section 21 or (as the case may be) 32."

On Question, amendments agreed to.

Clause 55, as amended, agreed to.

Clause 56 agreed to.

9.15 p.m.

Clause 57 [Specified considerations]:

Lord Hunt of Wirral moved Amendment No. 130:


    Page 40, line 46, at end insert—


"(2A) In subsection (1A) "newspaper" shall have the same meaning as in section 57(1)(a) of the 1973 Act, and in this section "plurality" means a diversity of ownership that is sufficient to ensure that the public have access to the accurate presentation of news and free expression of opinion.
(2B) In applying the interests specified in subsection (1A) no account should be taken of plurality in newspaper ownership if the relevant merger situation concerns the transfer of a newspaper or newspaper assets to a newspaper proprietor whose newspapers have an average circulation per day of publication amounting, together with that of the newspaper concerned in the transfer, of fewer than 500,000 copies.
(2C) In subsection (2B), "newspaper proprietor" shall have the same meaning as section 57(1)(b) of the 1973 Act, and the calculation of circulation per day shall be by such means as the OFT or (as the case may be) the Commission shall determine."

The noble Lord said: The purpose of this amendment is to introduce a new specified consideration. Such considerations are those which under Clause 42(3) of the Bill are the public interest considerations in respect of which a merger reference

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can be made. The additional consideration is that of plurality in newspaper ownership. As defined by this amendment, it would mean protecting accurate presentation of news and free expression of opinion—factors already in the 1973 Act—and exclude local newspapers by virtue of a 500,000 circulation threshold.

In the other place, the Government disclosed no intention to specify further considerations. I draw the Committee's attention to Command Paper 5508, published earlier on 11th May this year. In the policy narrative accompanying the draft Communications Bill, the Government clearly stated their intention at page 60, paragraph 9(7)(4):


    "Newspaper transfers will be treated so far as possible in a manner consistent with other mergers considered by the competition authorities. However, the Enterprise Bill provides for such mergers to be scrutinised by reference to a competition test: will the transfer be expected to lead to a substantial lessening of competition?"

The Government then use the following words,


    "Those newspaper transfers that potentially raise plurality concerns will require wider regulatory scrutiny in order to protect the additional public interest involved in such transfers. In relation to these transfers, therefore, the Secretary of State will retain the power to refer transfers for wider investigation by the Competition Commission by an extension of the provisions in the Enterprise Bill dealing with 'exceptional public interest'(EPI)cases. This will be directed to those cases that involve the public interest in accurate presentation of the news, free expression of opinion and plurality of views in the Press—'plurality' for short."

This amendment seeks to achieve what the Government wish to happen in terms consistent with experience of a special newspaper transfer regime under the 1973 Act while not carrying forward the prior consent or criminal provisions in the 1973 Act.

I hope the Minister will welcome this opportunity to turn the department's words into action and accept the amendment. I beg to move.


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