Clause 100 - Certain duties of relevant authorities to consult

Enterprise Bill – in a Public Bill Committee am 12:15 pm ar 1 Mai 2002.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Mr Nigel Beard Mr Nigel Beard Llafur, Bexleyheath and Crayford

With this it will be convenient to take amendment No. 170, in page 70, line 23, leave out subsection (4).

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

The amendments address a clause that places an obligation on the OFT, the Competition Commission or the Secretary of State in public interest cases to consult and give reasons for any adverse decision. The origins of the clause as I understand it, and I am not a lawyer, arose from a rather famous recent case in which the Competition Commission was effectively overruled on a judicial review in the case of Interbrew, a major brewery. That decision was interpreted as a major blow to the credibility and authority of the Competition Commission. It was one of its worst maulings in the court. The clause is intended to prevent that from happening again by requiring the competition authorities to consult and give reasons for their decisions.

The language in which the clause is couched is grudging and foot-dragging. Whether it will ultimately satisfy the courts I do not know, but it hardly echoes the spirit of the court ruling. It states that it will provide reasons for decisions only "so far as practicable". That seems to be weak, and is a concern not just of the business groups that are following the legislation, but of the legal groups also. The purpose of the amendments is to have that qualification written out. The courts have spoken clearly on the matter. There were very good reasons for the court ruling.

It is important to set out grounds for refusal not simply to provide academic curiosity for people in the UK, but because a great deal of practice in the field is established by precedent. It is very important that those involved in merger decisions understand the precedents and the reasons that have been given by the competition authorities. One should not allow such weasel words to prevent the competition

authorities from giving good reason, especially when the courts have spoken so strongly on the subject. I would urge the Minister to delete those words, and to observe the full spirit of the court ruling.

Photo of Douglas Alexander Douglas Alexander Minister of State (e-Commerce & Competitiveness)

Obviously, amendments Nos 200 and 170 deal with consultation of parties. I fear, however, that the hon. Gentleman is labouring under a misapprehension in terms of our motivation. It is a truism that hard cases cause bad law. Rather than seeking to address any particular judgment that has been reached in court, it is the principle of increasing transparency that underpins clause 100, and runs consistently throughout the Bill.

Clause 100 aims to put the principle that relevant parties should have the opportunity to respond on proposed decisions that would adversely affect their interests on a statutory footing. Where possible, authorities should consult with parties by providing reasons for a proposed decision. The presumption is that the parties will be consulted on the reasons for proposed decisions. It is, however, important to recognise that there will be conflicting priorities in some cases. It may therefore not be possible to provide reasons for all proposed decisions, particularly those involving short deadlines or sensitive information.

We are motivated by the desire to achieve not only transparency, but a business-friendly approach, and we have to strike a balance between the two. Companies will, of course, welcome being consulted on proposed decisions, but those self-same companies would object if their commercially sensitive information were not safeguarded. Amendments Nos. 200 and 170 would prevent the authorities from acting sensibly on a case-by-case basis.

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

The amendment was, of course, designed to tease out what lay behind the Government's thinking. Clause 100 seems to be an example of them taking with one hand and giving with the other. In trying to meet the entirely necessary requirement for transparency and explaining the basis for decisions, they have provided an open-ended clause that will ensure that those requirements may never be honoured in practice. I accept the Minister's comment, however, and beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 100 ordered to stand part of the Bill.

Clauses 101 and 102 ordered to stand part of the Bill.