Enterprise Bill – in a Public Bill Committee am 6:00 pm ar 30 Ebrill 2002.
I do not wish to detain the Committee, but I want to be sure that I understand the purpose of the clause accurately. I would be grateful for the Under-Secretary's confirmation, as the clause seems to be designed to allow the Secretary of State to refer a merger situation to the Competition Commission after having made an intervention notice, whether or not the OFT has determined that there is a substantial lessening of competition. Further, under clause 42, the OFT will have provided advice and recommendations in relation to a public interest consideration raised by the Secretary of State under the intervention notice. The implication in clause 43—although it is not set out in detail—is that the Secretary of State will be able to make a reference to the Competition Commission whether or not the OFT has decided that that public interest consideration is well founded and should give rise to a reference.
In effect, if I understand the provision accurately, the Secretary of State is proposing to be able to ignore the OFT. The Competition Commission will be able to make a determination and the Secretary of State cannot sustain an intervention notice unless it is approved by Parliament. That further heightens the fact that, having issued an intervention notice, the Secretary of State can cause the Competition Commission to undertake a reference—with all that that entails—even though the intervention notice has not been discussed by Parliament and even though the public interest raised by the intervention notice may have led the OFT to say both that there may be no case for a reference to the Competition Commission, and that there is no substantial lessening of competition. So, the Under-Secretary wants an all-embracing power. I should be happy to see that confirmed in terms.
We have proposed that the Secretary of State should have the power to refer a case that qualifies for investigation if he or she believes that the merger may operate against the public interest. The result will be that the Secretary of State will refer cases requiring more in-depth consideration to the Competition Commission. The public interest test that the Secretary of State will apply under the new regime will be more limited than that in the Fair Trading Act. The Secretary of State will be limited to taking account of the relevant public interest considerations and any substantial lessening of competition.
The purpose of the clause is to provide discretion for the Secretary of State to refer mergers that might operate against the public interest. The Secretary of State will assess the public interest with regard to the competition issues and the relevant public interest considerations, and will view a substantial lessening of competition as operating against the public interest unless it is outweighed by the benefits of the public interest consideration. The Secretary of State has discretion to refer because that is appropriate. However, he or she must give the reasons for the decision on reference. The OFT has a duty to refer, as it is important to define the role of the relevant body.
To answer the hon. Gentleman's question, the Secretary of State can refer on public interest grounds
where the OFT has said that there are no competition concerns. However, wider issues such as national security must be considered.
The Under-Secretary has helpfully answered limb No. 1 of my question. However, I was essentially putting to her a hypothetical situation: the OFT has said that there are no competition grounds for reference and, given advice under clause 42(6), public interest grounds do not merit a reference. Is she saying that she wants the Secretary of State to have the discretion to make a reference where there are no competition grounds and the OFT advises that there are no public interest grounds either?
I believe that the answer to that is yes. The OFT has competition expertise and it is right that the Secretary of State, whose view on a public interest test is important, should be determinative in such cases. I hope that I have clarified the point for the hon. Gentleman.
Question put and agreed to.
Clause 43 ordered to stand part of the Bill.