Enterprise Bill

– in a Public Bill Committee am ar 16 Ebrill 2002.

Danfonwch hysbysiad imi am ddadleuon fel hyn

[Mr. Derek Conway in the Chair]

Photo of Derek Conway Derek Conway Ceidwadwyr, Old Bexley and Sidcup 10:30, 16 Ebrill 2002

Before I call the Minister, I remind hon. Members and anyone else of interest that the mobile phone is not yet part of our proceedings, even if it has a Verdi ring tone. I ask everyone to check so that we are not interrupted by technology.

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

I beg to move


(1) during proceedings on the Enterprise Bill the Standing Committee do meet on Tuesdays at 10.30 am and at 4.30 pm, on Thursdays at 9.30 am and between 2.30 pm and 5 pm and on Wednesday 1st May at 10.30 am and between 4.30 pm and 7 pm, except that on Tuesday 30th April the Committee shall not meet at 10.30 am and on Thursday 2nd May the Committee shall not meet;

(2) the proceedings shall be taken in the following order, namely Clause 1, Schedule 1, Clauses 2 to 11, Clause 196, Clauses 16 to 18, Clauses 179 to 195, Clause 198, Clauses 200 and 201, Schedule 13, Clauses 202 to 226, Clauses 20 to 66, Schedule 5, Clauses 67 to 81, Schedule 6, Clause 82, Schedule 7, Clauses 83 to 86, Schedule 9, Clauses 87 to 160, Schedule 8, Clauses 161 to 174, Clause 197, Clause 199, Clause 175, Schedule 10, Clauses 176 to 177, Schedule 11, Clause 178, Schedule 12, Clause 12, Schedule 2, Clauses 13 and 14, Schedule 3, Clause 15, Clause 19, Schedule 4, Clauses 227 and 228, Schedule 14, Clauses 229 to 231, Schedule 15, Clauses 232 to 239, Schedules 16 and 17, Clauses 240 and 241, Schedule 18, Clauses 242 to 245, Schedule 19, Clause 246, Schedules 20 and 21, Clauses 247 to 252, Schedule 22, Clauses 253 to 257, Schedule 23, Clauses 258 to 264, Schedule 24, Clauses 265 and 266, Schedules 25 and 26, Clauses 267 to 269, New Clauses and New Schedules;

(3) the proceedings on Clause 1, Schedule 1, Clauses 2 to 11, Clause 196, Clauses 16 to 18, Clauses 179 to 195, Clause 198, Clauses 200 and 201, Schedule 13 and Clauses 202 to 226 shall (so far as not previously concluded) be brought to a conclusion at 9.55 pm on Tuesday 23rd April.

(4) the proceedings on Clauses 20 to 66, Schedule 5, Clauses 67 to 81, Schedule 6, Clause 82, Schedule 7, Clauses 83 to 86, Schedule 9, Clauses 87 to 160, Schedule 8, Clauses 161 to 174, Clause 197, Clause 199, Clause 175, Schedule 10, Clauses 176 and 177, Schedule 11, Clause 178, Schedule 12, Clause 12, Schedule 2, Clauses 13 and 14, Schedule 3, Clause 15, Clause 19 and Schedule 4 shall (so far as not previously concluded) be brought to a conclusion at 1 pm on Wednesday 1st May;

(5) the proceedings on Clauses 227 and 228, Schedule 14, Clauses 229 to 231, Schedule 15 and Clauses 232 to 238 shall (so far as not previously concluded) be brought to a conclusion at 7 pm on Wednesday 1st May;

(6) the proceedings on Clause 239, Schedules 16 and 17, Clauses 240 and 241, Schedule 18, Clauses 242 to 245, Schedule 19, Clause 246, Schedules 20 and 21, Clauses 247 to 252, Schedule 22, Clauses 253 to 257, Schedule 23 and Clauses 258 to 260 shall (so far as not previously concluded) be brought to a conclusion at 5 pm on Thursday 9th May;

(7) the remaining proceedings on the Bill shall (so far as not previously concluded) be brought to a conclusion at 7 pm on Tuesday 14th May.

I welcome you, Mr. Conway, and your co-Chairman, Mr. Beard, to the Chair of the Committee. I have spent many happy hours in Committee Room 10, not Committee Room 11, so this venue is a change of scene for us all. I am grateful

for the opportunity to debate the Bill with Committee Members. I hope that it will be useful, and I am sure that Members will make constructive progress. However, if they do not, I know from previous experience that it is the Chairman's role to ensure that the proceedings are conducted in a businesslike way. I know your qualities, Mr. Conway, and I am sure that you will carry out that role.

I recall a Chairman in one Committee, who shall remain relatively anonymous. At the first sitting, he removed his jacket and advised other Members that they could do the same if they so wished because of the temperature. He revealed what looked remarkably like a gun holster arrangement, although there was no weapon in it. He later informed us that the holster was for his mobile phone. However, there was a strong resonance, as we suspected that it might have something to do with his other activities and be a new approach to enforcement.

The usual good will of Committee Chairmen will be sufficient to conduct business in this Committee. As you say, Mr. Conway, carrying around mobile phones can be dangerous in its own right.

I have a background in business, local authorities and many other aspects of life outside the House, and I am delighted to share the Committee with Opposition Members with their own backgrounds. It is an honour to face an Opposition Bench of former special advisers and civil servants that is laden with such talents. The hon. Member for South Cambridgeshire (Mr. Lansley) protested on Second Reading that he was definitely a civil servant and not a special adviser. We must acknowledge those distinctions in this Committee.

It usually falls to the senior Minister to provide a strategic overview of the Bill in Committee. In my experience, he or she then disappears for the rest of the proceedings. I will provide the strategic overview, but I will not disappear. It is important that we consider the Bill in as timely a way as possible.

The proposed programme resolution was discussed at the Programming Sub-Committee yesterday, and I am pleased that there was a general agreement on it at that meeting. The end date of 14 May will allow us 17 sittings to consider the Bill and any new clauses or schedules that may be proposed by amendment. The Government will table several amendments, but aim to give the Committee good notice of them. We will provide a written explanation of the nature and effect of each amendment when it is tabled.

The 17 sittings should provide enough time for proper scrutiny of the Bill. I say that in full recognition of the size of the Bill and the concerns that Opposition Members have expressed. However, as we heard on Second Reading, there is a good measure of support on both sides for many, if not most, of our proposals. We will, of course, work hard in the Committee to examine the Bill thoroughly and carefully. I hope that we will be focused and consensual in our work, and I am sure that we will be extremely constructive and make your job easy, Mr. Conway.

The resolution proposes that the provisions of the Bill be considered in order, with two main exceptions. We propose to give Committee members additional

time to prepare for debating the lengthy competition provisions in parts 3, 4 and 5, which together amount to more than 150 clauses. We propose to consider those parts after the consumer provisions of part 8 but before the information disclosure provisions of part 9, which are closely related and highly relevant to them. Consideration of part 2 most sensibly belongs after the competition provisions, because it relates to appeals against the various decisions that will be discussed in those proceeding parts. The Programming Sub-Committee also agreed that we could bring forward consideration of clauses 16, 17 and 18, which will be examined immediately before part 6.

I hope that Committee members will agree that the proposals constitute a sensible and reasonable way in which to proceed, and I ask them to support the resolution.

Photo of Derek Conway Derek Conway Ceidwadwyr, Old Bexley and Sidcup

Before we develop the debate further, it might help Members to know that the programme resolution is at the back of the amendment paper, which is unusual. It is perhaps the system's way of ensuring that the Chairman is awake for at least this part of the sitting.

Photo of Nigel Waterson Nigel Waterson Ceidwadwyr, Eastbourne

I begin by saying what an enormous pleasure it is to serve under your chairmanship, Mr. Conway, and that of your co-Chairman Mr. Beard, on what I am sure will be an enjoyable Committee stage. I echo the Under-Secretary's remarks, particularly her kind comments about my colleagues and me. Flattery will get her nowhere, but it was nice given our slightly rocky start.

I congratulate the Government Members, who were lucky enough to have their name picked out of a hat to serve on the Committee. I know that they are looking forward to it immensely. The only downside about serving on a long Committee—not as long as it should be, of course—at this time of year is that Government Back Benchers will not have the option of doing their Christmas cards, unless they are particularly well organised.

I pay a particular welcome to the hon. Member for South Ribble (Mr. Borrow), who spoke on Second Reading. At that stage, he seemed to be labouring under the misapprehension that this was a 120-clause Bill, when of course it has 269 clauses. That may reveal one of two things; either a deficiency in his research in not getting beyond the first page of the Bill's contents, or perhaps that the Government Whips told him that there were only 120 clauses in order to get him to agree to serve on the Committee. I know that you are a former Whip, Mr. Conway, and I am sure that that would never have happened in your day, but it is possibly why the hon. Gentleman was arithmetically challenged about the Bill.

As the official Opposition, our job is to scrutinise the Bill carefully. As the Under-Secretary said, there are broad areas of welcome and agreement. They were apparent on Second Reading—we did not vote against the Bill or table a reasoned amendment—and we agree with much in the Bill. As I will describe later, much of it will build on the landmark consumer legislation of the Conservative Government of the early 1970s, which we agree that it is time to revisit. We will be

trying to improve the Bill and make it more effective and relevant to the people who will have to enforce it and those who will be governed by it. I hope that we can disagree on issues without being disagreeable.

However, we have got off to a rocky start. It is difficult to divine the Government's motives because, as I said on Second Reading, many clauses in the Bill are free from any party-political content. They are simply highly complex and technical measures that require careful scrutiny. Although we understand the pressures, we were a little surprised that the Bill was continually delayed. We were even more surprised when the Bill was published on the day the House rose for the Easter recess with Second Reading planned for the day after that recess. The Government made a concession to move it by one day, which was rendered of nil effect because of the sad death of the Queen Mother, so we actually debated Second Reading when we came back after Easter.

All that presented problems, which we have wrestled with in a spirit of good will—we appreciate the pressure on parliamentary draftsmen and hope that we shall have to wrestle with it again in the not too distant future—but we did our best. If we are to produce a good Bill, we need the right people to comment and brief us on it. That means organisations, bodies, companies and individuals, ranging from the CBI, the Law Society, the Trading Standards Institute and consumer bodies; the list is almost endless. Such organisations were caught on the hop, as we were. The Easter holiday is not the best time to expect people to produce their suggestions for amendments or their briefings on a complex Bill. As I said, we wrestled with that; if I still owe Mrs. Waterson a large bunch of flowers for the disruption to the Easter holiday, so be it.

At the end of last week, however, without any hint to us or to the Liberal Democrats, the Government tabled a motion that significantly changed the order of consideration. We had expected that the Committee would consider the Bill in the printed order. Unlike in some other Bills, this one had an element of logic in its arrangement; we could have started at clause 1 and worked our way through—for the benefit of the hon. Member for South Ribble—to clause 269. But that was not to be and the result has been a scramble over the past 24 hours to procure briefings and suggested amendments from the various organisations.

If I seem to be labouring the point, or if the Minister thinks that I am being churlish, it is because these matters were debated last night in the Programming Sub-Committee under your chairmanship, Mr. Conway. It is a feature of the procedures introduced by the Government that no record is kept of that debate; it is an entirely closed meeting with no access provided to the public or anyone else. It is important to place these matters on the record.

One result is that we shall be dealing much earlier with the part of the Bill dealing with cartels, yet not a single amendment on that subject had been tabled by the Conservatives when the change was announced. Not unreasonably, we had focused on the earlier parts of the Bill, as had our advisers and others with whom

we were in contact for briefings and potential amendments.

I know that the hon. Member for Twickenham (Dr. Cable) had a similar experience over the last 24 hours. The change has caused considerable irritation and disruption to the people on whom we rely to ensure that we make good law; let us be clear that, in the modern world, Standing Committees largely have to rely on outside bodies with their resources, concerns and knowledge of the issues. Those organisations have had enormous problems and are doing their best to overcome them.

In fairness, as I acknowledged, the Government have made modest concessions, for which we are grateful, in respect of where the so-called knives fall to terminate debate. The order of consideration has also been tweaked. One cheer for the Government on that, but it was a problem of their own making, so neither the Under-Secretary nor anyone else should try to draw much comfort.

We still believe that the Bill should be considered in its right order. I have yet to hear any good reason for changing it. If there were one, it could have been discussed through the usual channels. As I said earlier, I see little scope for party-political wrangling in the Bill, though we may find some as we move along, if only to keep some members of the Committee awake. Therefore, it is all the more surprising that the Government seem unable to consult on these ideas.

I am always a great believer in the slip-up theory—I would not want to use unparliamentary language—rather than the conspiracy theory, so another explanation may be that the Government are taking the Bill at a tremendous gallop. I can perhaps understand why, because it has clearly been a large Bill to draft and lick into shape. We know the pressures on the parliamentary draftsmen. The Government want to ensure that the Bill leaves this House and goes to the Lords quickly, after which it will return here for any further consideration.

I can understand that, but this is a very large Bill by any view; it contains 269 clauses and 26 schedules. A sprinkling of new clauses have already been tabled, and the Under-Secretary has indicated—it would be difficult not to—that there will be Government amendments. I predict that there will be quite a lot of Government amendments as errors or oversights in the drafting become apparent during our debates. Indeed, I think that, according to the programme, a whole day has been set aside at the end of the Committee stage for new clauses and Government amendments, so we shall see.

The reality is that, however one views the resolution, we are looking at 17 sittings to consider a Bill of this magnitude. We shall not vote against the programming motion, because we want to get on to the meat of the Bill and do our best to scrutinise it. However, I want to state firmly on the record, as I did on Second Reading, that with the best will in the world, at least parts of the Bill will not receive proper

scrutiny in Committee, which is a great shame. We would have been happier with a longer Committee stage, and we will be willing to sit later where that is appropriate and will make a difference. To expect the entire Bill to be considered properly and in depth in 17 sittings is wholly unrealistic.

I say that more in sorrow than anger, because from a political point of view it may make little difference. However, it will make a great difference out there in the real world. We are talking about highly complex provisions on competition, mergers and insolvency. Indeed, the insolvency provisions are in the last part of the Bill; the part that often does not receive the close scrutiny that the earlier parts do. The insolvency part is highly complex and detailed, and I am receiving shoals of proposed amendments and briefings from people and organisations that are supposed to have been consulted in depth before the Bill was published.

The consumer provisions are novel, interesting and deserve lengthy debate. In some respects, they do not go far enough, but they certainly require close examination to ensure that they will work and deliver what the Government are promising. There are also other measures to consider, including those that set up the Office of Fair Trading, so this Bill is something of a Christmas tree. Bits of Bills, or even potentially separate Bills, are being dealt with now. Again, I do not complain about the Government taking their opportunity. One sees a slot in the legislative programme and goes for it, trying to cram into it as much as possible. It may be many years before any Government has time to revisit in depth the fair trading legislation, for example, and other complex issues, so I understand the situation. However, for all those reasons, and perhaps others of which we are unaware, the Government are trying to take the Bill at a gallop. That may be a real problem with regard to producing good law on complex matters.

As I said, we shall not vote against the resolution. We accept that the Government would push it through in any event and that they wish the Bill to be out of Committee by 14 May. We cannot argue with that; all we can do is say, ''We told you so'', as and when the new law begins to cause problems in practice.

Photo of Vincent Cable Vincent Cable Shadow Spokesperson (Trade and Industry), Liberal Democrat Spokesperson (Trade and Industry) 10:45, 16 Ebrill 2002

I echo the hon. Member for Eastbourne (Mr. Waterson) in welcoming you, Mr. Conway, other hon. Members and the Minister to the Committee. She cut her ministerial teeth on the Financial Services and Markets Act 2000, which was even longer and more complicated than this Bill, so she is well prepared for what may come.

My approach, and that of my colleagues, will, I hope, be constructive and businesslike as well as critical. There is quite a lot to criticise, not in a doctrinaire or party-political way, but simply in order to get the legislation right. I am struck by the fact that this is a big Bill. The financial services legislation went through a great deal of pre-legislative scrutiny. Indeed, a Standing Committee of both Houses looked at it in detail, providing a platform for the legislation. This Bill is coming into the House in a much less digested state, despite being very big and complicated. It is likely that it will contain all kinds of flaws that will

need to be corrected through the scrutiny process. I hope that the Government will approach the Bill in a humble spirit, recognising that there is probably quite a lot of scope for legislative improvement.

I echo what the hon. Member for Eastbourne said about the programming meeting yesterday. All parties have agreed to the process, and we shall not try to claw that back. However, considerable unhappiness was expressed. The basic problem is that by inverting the order of the Bill, the Government have left themselves, their Members and us relatively unprepared to deal with some quite tricky pieces of legislative work.

I shall give two examples, although I do not want to prejudge the discussion on them. One item that now comes quite early in the proceedings is the criminalisation of cartels. We recognise that that is not necessarily a very intricate piece of legislation, but it is important. Business lobbies, whose members may go to jail as a result of the Bill, will understandably want to ensure that it is right. They need time to reflect on it and to talk to their lawyers. They will now be bounced into the debate rather early. We share their concern that that is not the right way to proceed.

Equally, the consumer part of the Bill, which was to have come at the end, now comes much earlier in the proceedings. That worries me particularly. I have been in this post on the Liberal Democrat side for over two years, so I probably have a rather greater institutional memory than the Under-Secretary. A couple of years ago, when the Bill was first mooted, it was seen as a consumer Bill. That was its genesis. The Government view at that time was that if re-elected, they would ''do'' consumer protection, as they had ''done'' competition policy and insolvency. There were ambitious ideas for consumer protection, which I fully shared. In practice, the consumer protection aspects have been put in the lower part of the Bill, but they are none the less very important and raise important issues of principle and implementation, such as how the stop now laws will be applied.

It was clear on Second Reading that we have got into a new situation. Many of the consumer groups, such as the National Consumer Council, the Consumers Association, the National Association of Citizens Advice Bureaux and others, expected that that part of the Bill would offer wide-ranging powers to enable them to tackle abuses that are not currently illegal, yet present serious problems. It became clear from the Ministerial response that this would not now happen.

Within a week—probably less under the new timetable—those groups will have to consult with each other, with us and with their lawyers to provide a completely new approach to the problem. That is very unsatisfactory. The Committee may not get it right because of the pace with which the matter is being dealt. That particular inversion of order is very unhelpful to proper legislative scrutiny.

Photo of Nigel Waterson Nigel Waterson Ceidwadwyr, Eastbourne

On that point, we have tabled several amendments on clause 202, which have been prepared at quite short notice for us by consumer organisations. I hope that when we come to debate them, the Under-Secretary will not read from a brief to

say that they are poorly drafted or do not have the required effect, because there simply has not been the time to sit down and consider them.

Photo of Vincent Cable Vincent Cable Shadow Spokesperson (Trade and Industry), Liberal Democrat Spokesperson (Trade and Industry)

The hon. Gentleman is right. Indeed, a set of clauses deals with that point. Over the last few days it has occurred to me that if the Government cannot create an all-purpose clause to deal with the consumer protection problem, it may be necessary to introduce into the Bill separate clauses—probably separate chapters—for some of the worst abuses, which continue. That will be a tricky exercise. I am not sure how we or the Government will handle it. Our key point—and that of the hon. Member for Eastbourne—is that we all, including the Government, need time to talk to the groups concerned with the issues to get the legislation right.

That is the essence of what I wish to say. I do not wish to prolong the debate on the resolution; we are keen to get on with the substance of the Bill. Our discussion has been amicable but has sown worries in our minds that the Government are not being as sensitive as they should be to some of the concerns about the Bill.

Photo of Jonathan Djanogly Jonathan Djanogly Ceidwadwyr, Huntingdon

Although I do not have a direct interest to declare, I am a partner in a firm of solicitors and therefore have an indirect interest.

I add my concerns to those expressed by my hon. Friend the Member for Eastbourne. The Government spent some time in consultation on the Bill; the two years of consultation is highly disproportionate to the four or five weeks, and 17 sittings, that we have been given. I have been a member of the Committee—which has just finished—discussing the Adoption and Children Bill. It was much shorter and less complex than the Enterprise Bill, but at the end of our allocated 24 sittings, and after bipartisan and non-contentious discussions, we had not covered a third. I do not know what will remain of the Enterprise Bill at the end of the allocated sittings. The programming has serious implications.

Photo of Mark Field Mark Field Ceidwadwyr, Cities of London and Westminster

Like my hon. Friend the member for Huntingdon (Mr. Djanogly), I shall speak briefly as the more time we spend discussing the programming motion, the less time we have to look at the substantive issues. I entirely endorse what my hon. Friend the Member for Eastbourne said. My main concern is that the Bill is a mish-mash—perhaps to be in keeping with the Government's proposed joined-up thinking—that introduces important but separate issues. As I know from my limited experience, the Bill is unlike many other Bills, which have a theme running through them. As my hon. Friend the Member for Eastbourne said, the insolvency provisions themselves will lead to many representations from professional and other bodies in the City of London, which is part of my constituency. There is great concern that the issues will be rushed through. The risk is that by the end of the 17th sitting in mid-May, very many clauses will not have been touched and others will have been looked at only discursively. The die is cast for the Committee stage but the Opposition will want increased scrutiny on

Report if we have not had the opportunity of expressing our concerns.

As several hon. Members have said, the Bill has much to commend it. The concerns about it will contribute to ensuring that it works, which is a vitally important part of any Standing Committee. There will also be issues of principle, perhaps with a party-political element; I hope not in a knockabout spirit, but a constructive one.

As we are approaching the 11 am guillotine, I will give the Under-Secretary the last word on the subject and then battle can commence.

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

I will have a brief last word, in the spirit of the contribution of the hon. Member for Cities of London and Westminster (Mr. Field). First, I am glad that he and other hon. Members said that there is much to commend in the Bill. We all agree about that, although there is a little disagreement among the Opposition about whether the Bill hangs together well; the hon. Member for Eastbourne said that it did and other Opposition Members said that it did not. I obviously agree with the hon. Member for Eastbourne that the Bill comprises a coherent package of measures that belong naturally together.

On the matter of the longer Committee stage, there was extensive consultation on the White Paper last summer and earlier consultations on the mergers element, which, as I said, is an extensive part of the Bill. As the hon. Member for Twickenham remarked, we had previously published papers on the consumer side of things and on some insolvency matters. Much of the Bill has been discussed before. In relation to the remarks of the hon. Member for Huntingdon, there is a balance to be struck, but, as he acknowledged, there were two years of consultation on the Bill and that is why we do not need to spend so much time on it in Committee. We have had extensive consultations recently with many of the interested parties; as the hon. Member for Twickenham said, it is worth remembering that the Government and, I am sure, all members of the Committee, want to get the Bill right—

It being half an hour after the commencement of proceedings on the motion, The Chairman put the Question, pursuant to paragraph (9) of the Order of the House of 28 June 2001 relating to Programming Sub-Committees.

Question put and agreed to.

Photo of Derek Conway Derek Conway Ceidwadwyr, Old Bexley and Sidcup 11:00, 16 Ebrill 2002

I remind the Committee that copies of the financial resolutions connected with the Bill are on the Table. I remind hon. Members, too, that adequate notice should be given of amendments; as a general rule, my co-Chairman and I do not intend to call starred amendments, including any that may be reached during an afternoon sitting of the Committee.