Clause 166 - Investigation powers of OFT

Enterprise Bill – in a Public Bill Committee am 4:30 pm ar 7 Mai 2002.

Danfonwch hysbysiad imi am ddadleuon fel hyn

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

Photo of Nigel Waterson Nigel Waterson Ceidwadwyr, Eastbourne

We have concerns that echo those of the CBI about the breadth of the powers in clauses 166 and 167, which give the OFT powers during preliminary investigations. They seem excessive compared with those of other investigative bodies, when no offence has been shown to have been committed, and are more substantial than those in clause 184 to investigate cartels. They also exceed those provided by the Competition Act 1998. The CBI says:

''The powers are disproportionate and these clauses are unnecessary whilst the Competition Act is in place.''

We do not seek to scrap the 1998 Act during consideration of the Bill, but I suppose that the Government's argument is that we are trying to build

on those provisions instead. The powers appear to be extraordinarily wide, especially during preliminary investigations. The CBI continues:

''It is the potential excessive use of these powers in combination with the widened scope to trawl through industry looking for conduct or structures that might be anti-competitive which is of such concern.''

We have already discussed the potential cost of such investigations and their impact on companies' resources. The CBI has a separate concern that such investigations might have an impact on the willingness of companies to do business in this country rather than anywhere else. There is a similar argument about wealthy individuals paying full British tax, which the Treasury is currently reviewing. It is difficult not to see the Treasury's argument in favour of their doing so. Those people, like the companies I mentioned, have enormous choice about where they do business. I would not like the clause and the powers that it provides to be seen as a way of discouraging companies from being set up in this country.

We agree with the CBI that the powers are disproportionate, especially during preliminary investigations, and I urge the Minister to reconsider them.

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

Will the Minister comment on a story this morning on the front page of the Financial Times, which I believe related to the powers under the clause? It may have come from elsewhere, such as the lobbies or her Department. It suggested that the Government intend the powers in the clause to provide for draconian actions such as telephone tapping and other surveillance techniques. The people who reported the story may have got it badly wrong, but the extent to which Government powers could be used alarmed me. I hope that the Minister will take the opportunity to refute the lurid story.

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

On the CBI's claims, we believe that the powers are appropriate. I do not agree that they are tougher than those for cartel investigations. The monopolies regime grants the OFT powers of entry. We have replaced those powers with the power to require persons to attend at a specified time and place to give evidence. That is better tailored to the regime. The powers are similar to those for cartel investigations, but the market's power extends to requiring estimates and forecasts, as they are likely to be relevant to that type of inquiry.

The story mentioned by the hon. Member for Twickenham (Dr. Cable) related to a criminal offence in relation to cartels, not to Competition Commission reports. That may help the hon. Gentleman to get the story straight.

Question put and agreed to.

Clause 166 ordered to stand part of the Bill.

Clause 167 ordered to stand part of the Bill.