Clause 29 - Information powers in

Enterprise Bill – in a Public Bill Committee am 5:00 pm ar 30 Ebrill 2002.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Question proposed, That the clause stand part of the Bill.

Photo of Jonathan Djanogly Jonathan Djanogly Ceidwadwyr, Huntingdon

This clause deals with the provision of information on a proposed investigation relating to a completed merger. The clause is worded as one would expect. However, in previous debates, such as those on the new cartel and criminalisation provisions, my hon. Friends and I and others commenting on the Bill, in particular the Confederation of British Industry, have consistently raised fears about the fact that the nature of the OFT will change. Instead of being just an investigator, it will now be an investigator and prosecutor. As a result, companies, in general, may be less willing to supply information about themselves and their markets.

Of course, this clause states that companies have to provide information, but the Minister will surely appreciate that in the normal course of the OFT's running, the effective provision of information in investigations to a large extent works on the basis of mutual respect between business and the OFT and on everyone's desire to deal with the situation as swiftly as possible, usually so that the deal in hand can be done. The clause may make that process more formal and legalistic, which might increase costs and slow down the process. What comfort can the Minister give to business that, with all the extra sticks in the Bill, companies will not feel threatened, or be inhibited in the way that I have described, in the provision of information as envisaged by the clause?

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

Our reasoning is that we want mergers to be dealt with as efficiently as possible. There is always a danger that parties may face a reference if the OFT does not have enough information. We want to ensure that there is enough information so that that does not happen unnecessarily. The OFT must be able to make an informed decision, so it needs to get information easily and quickly. If the parties need some time to compile information, they may benefit from an extension of the deadline for reference. That is catered for.

We expect the new power to make the regime operate much more effectively. Pre-reference, we expect that the threat and risk of the delay or reference that people will otherwise face will be adequate to ensure that the companies provide the information. Where companies refuse to co-operate and a merger is referred, obviously, the stage two information powers carry tougher penalties. However, there is no statutory limit for the reference decision on anticipated mergers, and the absence of a statutory time limit means that formal investigative provisions are not required. We believe that that is the right balance. We do not want unnecessary reference, but we want information to be supplied. A tougher provision relates purely to the post-reference situation and we believe that the consequences of not supplying information will meet the needs of the competition authorities as well as business to deal with matters swiftly and efficiently.

Question put and agreed to.

Clause 29 ordered to stand part of the Bill.

Clause 30 ordered to stand part of the Bill.