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

With this it will be convenient to discuss clauses 192 to 199 stand part.

Clauses 191 to 194 cover appeal rights and other requirements for the CMA that will ensure that it exercises its direct enforcement powers proportionately and transparently. I will also discuss clauses 195 to 199, which make supplementary provision for the monetary penalties imposable by the CMA and the civil courts under part 3 of the Bill.

Clause 191 requires the CMA to produce and publish a statement of policy relating to its exercise of powers to impose monetary penalties. The statement of policy must cover the considerations relevant to whether to impose a penalty and the nature and amount of the penalty. When preparing or revising that statement, the CMA must consult the Secretary of State and other relevant stakeholders. The statement, or its revised form, cannot be published without the Secretary of State’s approval. Finally, the CMA will be required to have regard to the most recent published statement approved by the Secretary of State when deciding whether to impose penalties under this chapter, as well as deciding the penalty’s nature and amount.

Clause 192 gives the CMA a discretionary power to make some or all the requirements of a final notice binding on other members of the same interconnected corporate group as the infringer. That prevents complex corporate structures frustrating the ability of enforcement interventions to protect consumers and law-abiding traders.

The exercise of that power is subject to two important conditions. First, the infringing company must meet the definition of being a member of an interconnected corporate group at the time the final notice is given or at any time when the requirements under the notice are in force. Secondly, the CMA may only make the requirements of a final notice binding on other members of the same corporate group if it considers it just, reasonable and proportionate.

Clause 193 requires the CMA to do two things to assist with the monitoring and evaluation of the direct enforcement regime. First, the CMA must keep a record of undertakings it has accepted and directions it has given under the direct enforcement regime set out in this chapter. It must also keep a record of the reviews done of their effectiveness. Secondly, if requested by the Secretary of State, the CMA is required to prepare a report on the effectiveness of the undertakings and directions given, and the number and outcome of appeals. Such reports will support the Secretary of State to keep abreast of the outcomes of te CMA’s exercise of its direct enforcement functions.

Clause 194 provides for appeals to the court against certain direct enforcement decisions taken by the CMA. These appeals will be heard on the merits, meaning the appeal courts will have a broad jurisdiction to review and uphold or change the CMA’s decisions. The clause allows for appeals on the grounds that the CMA’s decision was wrong or unreasonable and also provides protections so that appellants only incur the financial impacts of the CMA’s first instance decisions if and when an appeal court upholds them.

Clause 195 requires that a court order or a CMA final notice imposing a monetary penalty states certain critical information, such as key details about the recipient’s right of appeal.

Clause 196 provides that for the purposes of part 3, a person’s turnover includes the person’s worldwide turnover, as well as that of any persons who control or are controlled by the recipient of the penalty. The provision will enable the imposition of penalties large enough to be an effective disincentive. Those who direct wrongdoing, or benefit from the profits of wrongdoing, will be considered when deciding the level of penalties. The clause also gives the Secretary of State power to make regulations setting out methodologies for determining an entity’s turnover. That power allows the Secretary of State to set out the technical details that will facilitate the predictable and consistent functioning of the new regime. It will also make the regime more responsive to changes in corporate and accounting practices, ensuring that any changes to the reporting of turnover can be accommodated within updated regulations.

Clause 197 gives the Secretary of State the power to make regulations amending the maximum amounts for fixed and daily penalties imposable under this part of the Bill. Such regulations may not be made before the Secretary of State consults with relevant parties and will be subject to the affirmative procedure.

Clause 198 empowers the CMA to recover unpaid penalties, with interest, as a civil debt through the courts. The CMA will only be empowered to recover unpaid penalties once the period for bringing an appeal has expired and any appeal has been decided. The clause supports the functioning of the monetary penalties provisions, while also requiring the CMA to consider the effect of the recovery of a penalty on the enforcement subject’s ability to pay compensation.

Clause 199 provides for ancillary matters relating to the monetary penalty powers, such as interest, the effect of related court applications and appeals, payment by firms other than bodies corporate and where sums received from penalties must be paid. Essentially, the purpose of this clause is to provide important clarity on operational matters, to allow the new monetary penalty powers to function smoothly.

Clause 191 requires the CMA to produce and publish a statement of policy regarding its powers to impose monetary penalties under this part. When the CMA decides on a penalty, it must take into account the statement. The Opposition strongly welcome the clause because it greatly increases the transparency of the monetary penalty system. It should ensure that there is clarity around the regime, thereby increasing its legitimacy. I would be grateful if the Minister will comment on the timeframe to which he expects the statement of policy to be published, whether it will follow a period of consultation, and where it will be published. Will it be publicly available, and will it be laid before this House?

Clause 192 introduces provisions giving the CMA a discretionary power to make the requirements of a final enforcement notice binding upon one or more members of the same interconnected corporate group, where the CMA considers it just, reasonable and proportionate to do so. We welcome that common-sense addition to the Bill. Clause 193 on record-keeping and reporting requirements introduces important transparency into the enforcement process. As such, we welcome its inclusion. It requires the CMA to keep a record of the undertakings that it has accepted, the enforcement directions that it has given, and reviews that it has carried out in relation to the effectiveness of such undertakings and directions.

Subsection (2) introduces provisions requiring the CMA to prepare a report for the Secretary of State on the effectiveness of undertakings and enforcement directions, and the number and outcome of appeals under clause 194. That again is important because it will enable the Government to continue to monitor the effectiveness of the new regime after Royal Assent. The question is whether it goes far enough. We have not tabled amendments to the clause. It is important to begin a discussion, which we will continue as we consider further parts of the Bill, about the reporting, and the transparency of how the measures are used in the CMA’s operations in practice.

Subsection (2) states:

“If requested to do so by the Secretary of State, the CMA must prepare a report on…the effectiveness of undertakings and…the number and outcome of appeals brought under section 194”,

yet we do not know what the Secretary of State might intend in relation to that. The wording implies that the report is not a duty on the CMA, but that the CMA has a duty to keep the information. If somebody deems that information to be in the public interest, or parliamentarians want to know what is happening under the regime, would they be required to undertake freedom of information requests? That does not seem appropriate. If the CMA collects that information, it ought to prepare a report to which Parliament has access.

It would be helpful for the Minister to inform the Committee what the Government intend in terms of report requests by the Secretary of State, and what information he would expect the CMA to share in relation to the regime, and the operation of some of the powers in the Bill. Does he agree that it would be in Parliament’s interest to have sight of that information? I would be grateful for his response on whether clause 193(2) should go further.

Clause 194 introduces provisions that would ensure that all appeals of CMA first-instance direct enforcement decisions are heard by the court. Under the clause, a person may appeal against a decision to impose a monetary penalty, the nature or amount of any such penalty and the giving of directions. We welcome the principle of the clause in allowing for a right of appeal. Again, we have questions on a timeframe for that and whether it will be part of the CMA’s consultations, as the Minister has alluded to, in relation to some of the operations of the regime.

Clause 195 sets out the information that must be included in an order made by the court, or a final notice given by the CMA, that includes a requirement to pay a monetary penalty. The information includes the amount of the penalty, the grounds of the penalty, details such as when it is to be paid and so on. Subsections (3) and (4) additionally set a time limit of 14 days from when the order is imposed for enforcement subjects to apply to change the date or dates by which the penalty must be paid. We welcome the inclusion of the clause in the Bill.

Clause 196 introduces a definition of turnover into the bill for the purpose of calculating a penalty based on turnover. This appears to be a technical clause, specifically in the inclusion of turnover both in and outside the United Kingdom in applying the definition. Subsections (3) and (4) grant the Secretary of State delegated powers to make further regulations on how a person is to be treated as controlled by another person, and to make provision for determining the turnover of a person for the purposes of this part. I must ask the Minister: why is it that these further regulations have been left to secondary legislation and are not on the face of the Bill? I would be grateful if he could confirm and explain that, and also clarify why these powers are subject to the negative procedure rather than the affirmative. We have not sought to amend the clause, but we want to understand the reasons behind it so that we are confident that it should go forward unamended.

Clause 197 introduces a delegated power to the Secretary of State to make regulations to amend the maximum fixed penalties and daily penalties in this part. The regulations will be laid subject to the affirmative procedure, which we welcome. The explanatory notes state:

“The effect would be that any updated amounts specified by the Secretary of State will offset the erosion of the real value of the fixed maxima through inflation.”

That is important, particularly in the current context of spiralling inflation after the disastrous economic management of successive Governments over the last 13 years. Can the Minister provide any clarification on how regularly the amendments will be made? Will it be yearly, or more or less frequently? I would be grateful for the Minister’s confirmation of that, so that it is clear for the House and the CMA.

Under clause 198, “Recovery of monetary penalties”, when the deadline for an enforcement subject to make an appeal against a monetary penalty has expired, or when an appeal has been made and rejected, the CMA would be able to commence proceedings to recover the penalty and any unpaid interest as a civil debt. We welcome the clause and its detail as a necessary element of a new, more robust regime.

Clause 199 introduces provisions setting out further details regarding the payment of monetary penalties. It provides for interest at the statutory rate to be incurred on the balance if the penalty imposed is not paid by the deadline. In addition, it sets out how the penalty is not payable while an appeal application is ongoing. We welcome the clause, but I seek some assurance from the Minister that appeal applications will have a timeline, and will not lead to lengthy, protracted processes, and payments going unpaid because of them.

I fear that I may have missed one or two of the hon. Lady’s points, but I think I got most of them. Guidance under clause 191 will be publicly consulted on, giving those potentially affected by it an opportunity to comment directly. That consultation will happen post Royal Assent, and when finalised it will be published on the CMA’s website. On the Secretary of State requesting reports, clearly we do not know what we do not know. The Secretary of State has flexibility on when they might consider that a report is required under clause 193. The CMA already publishes regular impact assessments and other public reports, including its annual report to Parliament, and scrutiny will continue by traditional means, such as through Select Committees.

The Minister will know that so much has gone to the Business and Trade Committee that there will be great concern about how frequently, and in what level of detail, it will be able to scrutinise all the work done under the regime. It will be a pretty tall order to do that job. I have a question for the Minister that I think is important. We have heard in previous debates about the frequency of reporting and what would be in the CMA’s report for all the new regimes and units that it will undertake. We obviously do not want to overload the CMA with unnecessary reporting, but there should be an expectation about what might be in the annual report, and there should be clarity on what the Secretary of State might expect in a report on the new regime.

Surely Ministers will want to have confidence in what is happening under the regime, and to have some data reported to them if the CMA is collecting it. Will the Secretary of State expect a, perhaps annual, report on the new regime, perhaps for a few years, to know whether it is operating effectively? Secondly, will clause 193(2) give the Secretary of State the ability to request additional or more detailed reports if there are concerns about aspects of the regime’s implementation? I understand the power to ask for more reports, but not having any report requested through the course of the implementation of the operations strikes me as a serious gap, particularly—

Order. Shall we get the Minister to reply?

I thought that perhaps I had to intervene on the hon. Lady.

Particularly in relation to the early implementation of the regime—I was on my last sentence.

That was a very comprehensive intervention. I think that we are saying the same thing. Of course the CMA will continue to report annually, and of course we would expect it to report on the new powers that it has been granted through the Bill. In addition to that, the Bill gives the Secretary of State the power to request additional reports as he or she sees fit. We think that that achieves an appropriate balance. We do not think that it is right to get in the way of the CMA doing its job by obliging it to report on a more frequent basis. Of course, as part of my role, or my successor’s role if I move from this position back to the Back Benches or wherever, we regularly have meetings with the CMA to discuss its activities and where it is using its powers. Indeed, we write an annual letter to the CMA, which sets out where we expect its focus to lie.[This section has been corrected on 20 July 2023, column 13MC — read correction]

The hon. Lady asked a fair question about the appeals timelines. They will not be consulted on, but they will be subject to the civil procedure rules, and relevant rules in other UK jurisdictions. The civil procedure rules will be amended as part of the implementation of the provisions through the Civil Procedure Rule Committee in the usual way. Of course, we will want appeals to take place as expeditiously as possible, provided that they are fair.

Question put and agreed to.

Clause 191 accordingly ordered to stand part of the Bill.

Clauses 192 to 199 ordered to stand part of the Bill.