Clause 55 - Duties of OFT and Commission

Enterprise Bill – in a Public Bill Committee am 6:15 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

Clause 55 provides that the OFT and the commission should inform the Secretary of State if the so-called ''specified'' considerations apply, in which case subsection (2) comes into play and the Secretary of State becomes responsible for making decisions. That being so, it cannot be right, under subsection (1), that the OFT should decide whether any such consideration is immaterial. Surely, the decision should be made by the Secretary of State. If not, the Secretary of State should be able to review the OFT's decision. Under clause 55, the OFT is effectively being given the right to decide whether considerations are material. However, in the circumstances dealt with by the clause, that seems inappropriate.

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

I want to ensure that the hon. Gentleman is aware that we want to be certain that representations are seen by the Secretary of State when relevant. The OFT will alert the Secretary of State to representations that a case that it is considering raises a specified public interest consideration, but will not if the representation appears immaterial. That is important because vexatious representations are possible. The OFT and the Competition Commission will alert the Secretary of State to any calls for new public interest considerations, and they will not be case specific. I hope that I have answered the hon. Gentleman.

Photo of Jonathan Djanogly Jonathan Djanogly Ceidwadwyr, Huntingdon

That does not answer my point. Clause 56 deals with ''specified considerations'' such as national security. In such situations, how can it be right that the OFT should be able to decide whether something is material? Surely, when national security is involved, the Secretary of State should have the right to decide whether something is material. She will not know, because she will not necessarily have been told about it if it is deemed immaterial.

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

The discretion is not to alert the Secretary of State to representations. As I said, that is sensible flexibility for the OFT when it believes that the Secretary of State would not want to consider a matter. It is important that we do not build in features that can be abused by those who simply seek to clog up the regime. That would be in no one's interests.

Photo of Jonathan Djanogly Jonathan Djanogly Ceidwadwyr, Huntingdon

How would the Secretary of State know whether he or she would not be interested in such a matter?

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

It is for the OFT to judge, as is the case for many other issues, when it believes that the Secretary of State should not want to consider a

matter further. Representations on public interest matters can be made to the Department of Trade and Industry, as is likely to take place in practice.

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

Will the hon. Lady give us guidance on where in legislation a similar clause applies—effectively letting a public body such as the OFT take discretion out of the hands of a Minister? It seems a peculiar state of affairs for the OFT to second-guess what a Minister might think is material, yet that Minister can in no way make a decision on the subject because he is unaware of the facts that might give rise to it. I assume that the clause has been taken from some other Act that refers to the interaction of a public body with a Ministry. If that is not the case, I would be intrigued to know how such a clause has come out of the ether.

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

Opposition Members are making rather heavy weather of the provision. The DTI and the Secretary of State are likely to be made aware of significant public interest matters. In those circumstances, if the matters are genuine rather than specious, it is unlikely that the OFT would do anything other than assume that Ministers would be interested in how those matters were pursued. We are not removing the discretion of Ministers, but the representations that they receive will be filtered. As I am sure Opposition Members are aware, some such representations may be made out to be material when they are not. People will argue that something is material when it is not if they think that it will get them through a different loop in the system. That is the only point at issue.

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

Do we not have to take great care, particularly in relation to issues of national security? Perhaps we are dancing on the head of a pin, but the great concern among Opposition Members is that the provision will be used by a Minister to justify events post facto. A Minister or a Government could easily use it as an excuse to suggest that officials decided that no material consideration was needed, so the matter never reached the Minister's desk. Then the Ministry would have ignored something that could, after the events had all come to pass, be justified in the longer term as a glaring issue of national security. The Opposition are concerned that a Government could use the provision as a charter to avoid taking responsibility.

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

The hon. Gentleman assumes that the Ministry of Defence will sleep through such matters, but it will do no such thing. It will be alert to possible issues and will advise on those that could be of concern to national security. That anxiety is likely to be fully met by the role of the MOD in the process.

Photo of Jonathan Djanogly Jonathan Djanogly Ceidwadwyr, Huntingdon

Is the Under-Secretary suggesting that the MOD will review all the OFT's decisions, to consider whether they are in the national interest? I think not, which rather proves the point. The argument has become circular. It has been pointed out that the Secretary of State, rather than the OFT, should decide what is in the national interests. It is worth remembering that the OFT is made up of business men and academics. The Secretary of State should make such decisions.

I shall leave the matter there, as the arguments have been clearly set out, but for one further question. If we accept that we have a circular argument, will the Minister please clarify what she considers to be material or immaterial?

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

The hon. Gentleman's request is very wide ranging. I have already discussed the nature of materiality and given some examples. For example clogging up the system and vexatious behaviour are examples of non-material issues. I cannot give the hon. Gentleman some sort of list that summarises materiality; it will have to be considered case by case, as many issues need to be considered in context.

Photo of Jonathan Djanogly Jonathan Djanogly Ceidwadwyr, Huntingdon

I want to return to the point. What happens if, after the OFT has decided that something is immaterial and, therefore, need not be put to the Secretary of State, it is shown to be material and should have been discussed in a wider context, for example, in the House?

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

I assume that there would be some further discussion about how that had come to pass, but I do not envisage that ever taking place. The hon. Gentleman is trying to tempt me down the path of hypotheticals when the provision is designed to ensure that things work well, that issues are not considered unnecessarily and that we make sure that the right people, including the Ministry of Defence, have an input. I am at a loss to envisage the sort of circumstances to which the hon. Gentleman refers.

Photo of Mr Tony McWalter Mr Tony McWalter Labour/Co-operative, Hemel Hempstead

As a codicil to the debate, there is something in what the hon. Member for Huntingdon says. If, for example, a company that produces titanium were trying to merge with a company that produces aluminium, that might not instantly attract anyone's attention. But let us suppose that some new technology is creating a titanium-aluminium alloy, which happens to be particularly useful for gun casings. In that case, I can imagine that the OFT might lack the technical expertise to see what was happening, which could give rise to problems of national security. However, if wider knowledge were available to the Under-Secretary—I speak as a Member of the Science and Technology Committee—it might alert her to what was happening. The Under-Secretary should bear in mind that that point might equally be expressed from the Labour Benches.

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

My hon. Friend raises a more specific case, which is helpful. The OFT will issue invitations to comment on all the cases that it investigates, so there will be plenty of opportunity for people to comment. I have never found that people were backwards in coming forwards with their views on the importance of various courses of action.

Question put and agreed to.

Clause 55 ordered to stand part of the Bill.