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Baroness Wilcox: My noble friend Lord Skelmersdale, who regrets that he is unable to be here at this time, requested the noble Lord, Lord Carter, and the Government to take the report of the committee regarding the Bill on the chin. We are

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delighted with the amendments proposed today by the noble Lord, Lord Carter, which, I understand, give effect to the committee's findings.

Lord Newby: We on these Benches are pleased that an unexpected glitch at an earlier stage has now been resolved. We fully support the Bill and are pleased that the amendments deal with the earlier problem.

Lord McIntosh of Haringey: The Government support the amendments.

Lord Carter: There is nothing else to say except that I do not exactly remember the phrase "on the chin".

On Question, amendment agreed to.

Lord Carter moved Amendments Nos. 2 and 3:

    Page 2, line 29, leave out paragraph (d) and insert—

"( ) authorise a prescribed person to make rules, binding on persons of a prescribed description, for the purpose of enabling or assisting him to perform any of his functions under the regulations;
( ) make provision as to the making, publication and enforcement of such rules;"

    Page 2, line 33, leave out "carrying out" and insert "performing"

On Question, amendments agreed to.

Lord Carter moved Amendment No. 4:

    Page 2, line 38, at end insert—

"( ) Regulations under this section may not create any new criminal offence punishable with imprisonment for more than seven years."

The noble Lord said: The amendment deals with the second matter raised by the Delegated Powers Committee. On the fact that no maximum penalty for criminal liability was expressed in the Bill, the report said:

    "In view of the range of provision which may be made under clause 1, the Committee considers that the delegation in clause 1(5)(a) would be appropriate only if such a limit were included in the bill".

That is exactly what the amendment does, although it is important to point out that it is not strictly necessary because there are precedents for a power to create criminal offences in secondary legislation that do not specify a limit. One precedent is the Industrial and Provident Societies Act 2002, passed only last year. However, in order to make clear beyond any doubt what should happen, I have tabled this amendment, which limits the maximum criminal penalty that can be prescribed in the regulations to seven years imprisonment. That might sound on the high side, but it is one of the most serious offences that can be created if an officer of a society were fraudulently to use the assets of a society,

    "for purposes not permitted by its asset lock (whether for personal gain or otherwise). Such an offence could potentially be as serious as theft of a charity's assets, or of money which has been collected for a charity and is to be regarded as belonging to the beneficiaries of the charity . . . The maximum sentence upon conviction for theft on indictment is seven years imprisonment",

under the Theft Act 1968.

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The offences are comparable in seriousness to the potential offence that may be created in regulations made under Clause 1 if an officer of a society were fraudulently to use the assets of a society for purposes not permitted by the asset lock. If the offence were less serious, that would obviously be reflected in a lower penalty. The amendment represents an appropriate restraint on the delegated power to make regulations. I beg to move.

On Question, amendment agreed to.

Clause 1, as amended, agreed to.

Remaining clauses and schedule agreed to.

House resumed: Bill reported with amendments.

Enterprise Act 2002 (Part 8 Domestic Infringements) Order 2003

12.50 p.m.

Lord McIntosh of Haringey rose to move, That the draft order laid before the House on 12th May be approved [20th report from the Joint Committee].

The noble Lord said: My Lords, in moving the order I should also like, if I may, to speak to the supply of services order, the anticipated mergers order and the protection of legitimate interests order.

The consumer and competition provisions of the Enterprise Act enter into force on 20th June. The Act implements the Government's pledge to give more independence to the competition authorities. It takes the politics out of competition decisions with decisions on mergers and markets being taken by expert and independent competition bodies. The consumer provisions create a new super-complaints regime to encourage consumer bodies to bring complaints to the attention of the Office of Fair Trading. Part 8 of the Act also strengthens the enforcement of consumer law, extending the successful stop now orders regime—which is known by the terrible name of SNORs.

I start with the domestic infringement orders. This order sets out the list of domestic legislation that will be covered by the new Part 8 regime. Part 8 is intended to strengthen consumer protection by giving enforcement bodies wider powers to obtain court orders—similar to injunctions—against traders who cheat consumers and who provide unfair competition to honest businesses.

The new enforcement regime is modelled closely on the stop now orders which came into force in June 2001. Enforcers have been using the stop now regime successfully to stop a wide range of illegal trading practices. Part 8 of the Enterprise Act will implement the requirements of the injunctions directive in place of the SNORs, but will also enable court orders to be made to prohibit breaches of domestic law requirements not covered by the SNORs. Those are termed domestic infringements. The domestic infringements order specifies the legislation and rules of law in respect of which acts or omissions may give rise to domestic infringements. As we promised during

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the passage of the Bill, we have consulted extensively on the laws to be included in the domestic infringements order, and we have taken account of the responses in drawing up the order we are discussing today.

A range of mainstream consumer protection legislation is included in the order and is intended to protect the economic interests of consumers. This legislation includes, among other Acts, the Trade Descriptions Act, Section 4 of the Prices Act and certain offences under the Weights and Measures Act intended to protect consumers against short measures. That will enable quick and effective action to be taken against, for example, car traders who purchase high-mileage cars and lower the mileage prior to offering the cars for sale. It will also enable action to be taken against businesses which deliberately cheat consumers by giving them a quantity which is less than they paid for. It will also cover a wide range of other practices which harm consumers, such as counterfeiting and piracy, lottery-like scams and harassment of the elderly or vulnerable into making purchases. The new regime will enable better enforcement where these offences are committed. It also covers legislation on underage sales to children of such things as tobacco and fireworks.

Most importantly, by including breaches of the implied terms contained in the Supply of Goods and Services Act, the order will enable enforcement action to be taken against traders who fail to carry out a service with reasonable care and skill—such as cowboy builders and dodgy car repairers. That gives noble Lords a flavour of the provisions the order will bring in and the impact it will have. I hope that it will be agreed that this strengthening of enforcement will bring considerable benefits to consumers and also to the vast majority of honest businesses.

I turn now to the supply of services order. This specifies the circumstances in which permitting or making arrangements to permit the use of land is to be classified as the supply of a "service" for the purpose of merger and market investigations and the enforcement of certain consumer legislation. With the exception of car parks, these types of arrangements were already listed in Section 137 of the Fair Trading Act. We have added car parking primarily for consumer protection purposes. It will enable an enforcement order to be made under Part 8 to prohibit the use of notices in car parks which purport to exclude all liability due to negligence and whose only purpose seems to be to deceive consumers into thinking that they have no rights.

I turn to the anticipated mergers order, which relates to the merger provisions of the Enterprise Act. This order amends Sections 27 and 29 of the Act, which allow for the reference of completed mergers to the Competition Commission where the events constituting the merger took place over a period of up to two years. The purpose of the order is to apply these anti-avoidance measures to anticipated mergers; that is where all or part of the transaction has not yet been agreed but matters are in progress or contemplation.

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This replaces similar provision for anticipated mergers that was formerly made in Section 75(4) of the Fair Trading Act 1973.

Finally, I turn to the protection of legitimate interests order. There are a very limited number of merger cases in which the Government may wish to protect the public interest on non-competition grounds. In those cases the Enterprise Act provides a mechanism whereby the Secretary of State can intervene and decide on particular mergers that raise specified public interest considerations by serving an intervention notice. Apparently, national security is the only public interest specified in the Act. This instrument deals with mergers that fall to the European Community merger regulation—the ECMR. It ensures that the UK can act in ECMR cases to protect important non-competition interests. That is specifically foreseen by the European Community merger regulation itself.

The Enterprise Act preserves the current position. The UK can use the domestic merger control regime, where necessary, to take action on matters other than competition, such as defence, in relation to cases that fall to the ECMR.

The order follows the procedures set out in the public interest and special public interest schemes of the Enterprise Act with appropriate modifications. Most of the other provisions of Part 3 of the Enterprise Act are applied with modifications where relevant.

Those are the four orders for discussion today. They are all required to implement the consumer and competition provisions of the Act which will come into force next Friday. They are important but technical measures, developed in consultation with all interested parties. I commend the first order to the House.

Moved, That the draft order laid before the House on 12th May be approved [20th report from the Joint Committee].—(Lord McIntosh of Haringey.)

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