Deregulation and Contracting Out Bill

HL Deb 27 June 1994 vol 556 cc560-95

4.53 p.m.

House again in Committee.

Clause 5 [Undertakings as alternative to monopoly reference by Director General of Fair Trading]:

Lord Williams of Elvel moved Amendment No. 63:

Page 5, line 28, at end insert:

(""Onus of proof in case of undertakings.

56ZA. The Director shall not make a proposal under section 56A below, or accept any undertaking proposed to be made under section 75G below, unless he is satisfied that the particular persons, the parties to the transactions or the relevant enterprises, as the case may be, have demonstrated that their activities or proposals for merger, as the case may be, are not against the public interest and will not result in a diminution of competition.").

The noble Lord said: I beg to move Amendment No. 63 standing in my name on the Order Paper.

The amendment that I have tabled is designed to bring some rationality to competition policy. Competition policy in legislation is, I admit, extremely complex.

I recognise that there is a mistake in my amendment. Under Section 75G, which is an amendment to the Fair Trading Act introduced by the Companies Act 1989, it is the Secretary of State who has to accept undertakings rather than the director. I recognise that error in the amendment. Nevertheless, I believe that that is an error which could be rectified at a later stage if the Committee accepts the amendment today.

In my view competition policy is in a state of some confusion. It was set out initially in the Fair Trading Act 1973. I remind the Committee that that was quite a long time ago. Since then, the Fair Trading Act has been amended by the Companies Act 1989, in particular Section 147 which allowed undertakings as an alternative to merger references. Furthermore, arrange-ments were agreed under which large mergers would be treated under European jurisdiction under Article 86 of the Treaty of Rome. That led to a different tier of jurisdiction. It is now proposed under Clause 5 of the Bill to extend the principle of undertakings to monopoly references.

There are several difficulties with that. First, monopoly references to the Monopolies and Mergers Commission are made by the director—or, as we shall debate subsequently, perhaps by other people or by the Secretary of State acting on the director's advice. In cases other than newspapers, the Monopolies and Mergers Commission is governed by the criteria of Section 84 of the Fair Trading Act, which define the public interest in what I accept is, and has been accepted for a number of years, a rather loose manner. Secondly, merger references to the Monopolies and Mergers Commission, when they arrive at the commission, are governed by the definition of public interest in Section 84 of the Fair Trading Act. Thirdly, large mergers— "Euro-mergers", to use that rather unpleasant expres-sion—are dealt with by the European Commission. The only criterion under Article 86 of the Treaty is reduction in competition.

Therefore, Section 84 of the Fair Trading Act applies only to domestic situations; namely, mergers which do not come up to the level that falls under European jurisdiction. There is no specific reference to what motivates the Secretary of State or the director in making a reference under any of this legislation to the Monopolies and Mergers Commission. And there is nothing in any legislation that determines on what basis such a reference should be made. Furthermore, the matter is taken out of its hands by the European Commission should the threshold be passed. The whole area at the moment is very messy and unsatisfactory. The criteria which may be used by the director or the Secretary of State may be quite different from the criteria to be used by the Monopolies and Mergers Commission in judging them. That is the case both in monopoly references and merger references. Furthermore, if there is a large merger a wholly different series of criteria apply in the case of Europe.

We have for long argued that there should be a complete review of competition policy and that that review should translate itself into a consolidated piece of legislation which takes account of what has happened since the Fair Trading Act 1973 was passed and amended by the legislation which I have mentioned. My amendments are a modest attempt to achieve a certain rationality. The Companies Act 1989 introduced the question of undertakings. Undertakings were allowed under Section 56A, as amended, of the Fair Trading Act when it was decided that the merger in question was not to be referred to the Monopolies and Mergers Commission. As I understand it, under Clause 5 that process is now to be extended to monopoly references. Again we have the problem regarding domestic mergers or monopolies where different criteria apply to different pieces of the legislation.

Our general belief is that in all cases of mergers or monopolies it is up to the parties to the transaction, the companies involved, to prove beyond any reasonable doubt that what they propose is in the public interest. It is not for the Government, the Monopolies and Mergers Commission, or anyone else, to make that assertion unless the companies are challenged on their proof.

I do not wish to go into the process of short termism and how we have arrived at those views. Over a period of years, starting as I remember with the 1978 White Paper and subsequently confirmed, the DTI has shown that in the case of mergers only 50 per cent. are successful by any reasonable criterion. In the case of monopolies references, we have recently had the report of the Monopolies and Mergers Commission on compact discs which has caused a certain amount of controversy. If Parliament will allow companies to give undertakings instead of being referred to the Monopolies and Mergers Commission on either a monopoly or a merger situation, surely the onus of proof that what is proposed in such undertakings is not against the public interest must rest with the companies involved. I should like to extend that onus to all merger references. However, in the context of the Bill, we are only dealing with undertakings. We believe that if companies are able to demonstrate that their proposals with regard to a monopoly or a merger is in the public interest, they are entitled to have such an undertaking accepted. If they are unable to do that, then the matter should be referred to the Monopolies and Mergers Commission.

Secondly, I believe that we should start to bring our criteria for public interest into line with the criteria of Article 86. We recognise, quite properly, that the total result regarding competition in the overall sense may not be entirely in the public interest of the United Kingdom. Nevertheless, that is the criterion of Article 86. My amendment provides that such a measure will not result in a diminution of competition.

However, we recognise that there may be merit in the Government arguing in the forum of Europe that the public interest factor might be moved a little away from total insistence on competition. Nevertheless, those are the criteria before us. That is why my amendment is couched in the terms that it is.

I accept that my amendment is only a small and modest start. It is designed to ensure that those companies which enjoy the benefit of deregulation in the form of undertakings have an onus on them to prove that what they are doing is in the public interest. I have sought to define a little more clearly what I mean by that.

However, there are two principles which my amendment embodies. First, there must be a consistency of approach across the range of monopolies and mergers between our own and the European jurisdiction. Secondly, if there will be any undertaking, the onus of proof must be with the companies which are either in a monopoly situation or which propose a merger. It is a modest amendment. I hope that the Government will accept it. I beg to move.

Lord Strathclyde

I am grateful to the noble Lord, Lord Williams, for proposing his amendment in such a way. I am sure that deep in his heart he realises that there is nothing modest about the amendment. It is an important amendment which goes back to debates that he started in this House during the passage of the Companies Act 1989. He said that he would like to see such a clause provided for all monopoly and merger cases. At least the noble Lord is consistent.

The Committee will know that in 1984 the Government stated that mergers should be referred to the MMC primarily but not exclusively on competition grounds. That statement is still the bedrock of the way in which we deal with MMC policy.

Lord Williams of Elvel

I am sorry to interrupt the Minister at an early stage. Does he accept that while that may be the bedrock of the Government's views on references, it is not the bedrock of the duty on the MMC to report on those references?

Lord Strathclyde

The MMC is an independent body which looks at a range of criteria. Furthermore, we do not feel that a review of competition policy is necessary. We have had several reviews over the years covering all aspects of competition policy. In 1988 there was a review of mergers policies leading to the 1989 Act. There was, too, a review of restrictive trade practices. In 1992 there was consultation on abuse of market power. We are responding to the reviews already carried out. There is a great deal going on in the field of competition. Under these clauses, we are looking at how we can deregulate to make easier the policy on mergers and monopolies.

We are proposing Clause 5 because we believe that it is not always necessary to deploy the whole of the competition machinery, with the expense that entails for everyone, to solve the problems that may arise from the operation of monopolies. It may be helpful if I briefly explain the existing position.

Under the Fair Trading Act 1973, the Director General of Fair Trading has a duty to keep under review the carrying on of commercial activities in the United Kingdom and may, where he thinks fit, at any time make a monopoly reference to the MMC. It is for the MMC then to investigate whether there is a monopoly situation and if so whether it operates or may operate against the public interest. If the MMC reports adversely, undertakings may be accepted or an order made by the Secretary of State to remedy the adverse effects identified.

To solve competition problems arising from monopolies, all we have at the moment, therefore, is a full-scale reference to the MMC. Clause 5 provides a more flexible option to solve such problems, where appropriate, more quickly and at an earlier stage. We are also proposing Clause 7 because it seems appropriate for companies and the authorities to have the same flexibility to solve competition problems that may arise from a merger, again without necessarily going through a full reference to the MMC. In each case, the objective is to provide a short cut to the right solution in straightforward cases where the answer is clear.

The noble Lord, Lord Williams, said that it was a modest amendment but it would in fact defeat the whole object of Clauses 5 and 7. It would also eliminate the degree of flexibility which Section 75G of the Fair Trading Act already provides for companies to offer divestment undertakings as an alternative to a merger reference. Instead of clauses designed to resolve simple problems, we would have clauses which could only come into operation once it had been shown that no problem existed. We have designed the system to be fair so that it balances the ability of the authorities to take effective action, where that is necessary, with the interests of companies in lightening the competition machinery.

There will be no shady deals. Consumers, competitors and others interested will have the chance to comment and their views will be taken into account. We are therefore not weakening competition policy. If companies do not keep to the undertakings, they risk being taken to court. We are not supplanting the MMC's valuable role and will continue to look to it to investigate the more complicated cases.

We believe that Clauses 5 and 7 offer a common-sense approach. The existing Section 75G of the Act has already been used to provide quick, simple and effective solutions for mergers in a narrower range of circumstances. Now we are proposing to widen that range.

We believe that that should be in everyone's interest. The companies under investigation can get on more quickly with their business without incurring the considerable expense of an MMC investigation. The consumer benefits from earlier resolution of a competition problem and the market can start to work properly again.

I know that it may have been the wish of the noble Lord, Lord Williams, that we should have a debate about competition policy in general. However, his views on the subject are well known and we have a fundamental disagreement. I accept that he was trying to introduce the concept of the public interest into these measures but I believe, for the reasons that I have outlined, the clauses should remain the way they are and provide that light touch, deregulatory system as regards undertakings.

Lord Rodgers of Quarry Bank

I am sure that when the noble Lord says that there will be no shady deals, he is telling no less than the full story. However, I feel in my guts—often quite a good way of judging where the contents of a piece of legislation really lie—that this is weakening competition policy. Given that the actions of the Director General of Fair Trading and the whole ambience of his department are influenced by the feelings within the Department of Trade and Industry, there is no doubt at all that both the Monopolies and Mergers Commission and the Office of Fair Trading reflect, to a considerable degree, changes in the Government's policy. The consequence of that— whatever the Minister may say—will be a weakening of competition policy.

Although we have been led to believe that the whole process that the Bill is engaged upon is a matter of cutting red tape, this goes far beyond that. It is a major issue of competition policy, and competition policy is at the heart of industrial policy for the Government, as for others.

It seems to me that what is at fault at the moment —and I do not deny that there is a problem although I am not sure that it is a matter of confusion, as the noble Lord, Lord Williams, described it—is that there are delays which are an impediment to the proper functioning of government as well as of business. But surely the right approach or a simpler approach, which would be totally consistent with maintaining competition policy, would be to simplify the procedures of the Monopolies and Mergers Commission. In other words, references should take place as now, but there ought not to be a long delay and an elaborate inquiry which results in an unsatisfactory outcome.

If the noble Lord were to give me a satisfactory reply to the question that I wish to ask, it would put some of my anxieties at rest. Could he say what are the recent references by the Office of Fair Trading—he is already shaking his head, before I have completed my sentence, but if we are to judge the future we can only do it in relation to the past. When Ministers construct proposals of this kind, they have in mind examples of things which did not happen in the way that they would have liked them to happen. The noble Lord now nods his head, so perhaps he is moving in my direction. Can he give the Committee examples of the kind of references which have occurred and which he does not believe need occur in the future, given the provisions of this clause and subsequent clauses, including the safeguards which he believes are built in? If he would give examples, we could then judge both the importance of the clause and the view that we should take of the amendments before the Committee.

5.15 p.m.

Lord Haskel

I am surprised that the Government do not accept and welcome the amendment of my noble friend Lord Williams. Since 1988 they have said on several occasions that more powers of investigation and enforcement are needed. Successive Directors General of Fair Trading have publicly expressed the urgent need for such action to eliminate practices which they have frequently exposed. Green Papers were published in March 1988 and November 1992, and a White Paper in July 1989. There have been several other statements since.

The DTI and the Office of Fair Trading Deregulation of Competition Law and Procedure Changes in January 1994 stated in paragraph 19 that the Government were conscious of the strong criticism levelled at them and remained committed to replace the legislation with a prohibition-based system. I believe that the amendment of my noble friend Lord Williams makes a contribution towards that and I am surprised that the noble Lord does not accept it.

Lord Strathclyde

Of course, the amendment makes a contribution to the debate. My point earlier was that it is a contribution that we have heard many times. The noble Lord, Lord Williams, and I have a fundamental disagreement about the issue, or his party and my party have a fundamental disagreement about it. I stand by what has been said in the past. We have no desire to weaken the cause of competition and do not believe that anything we propose in the clauses does that. Therefore, I cannot agree with what the noble Lord, Lord Rodgers, said.

What we are not doing is to change the criteria or powers for making references on monopolies or mergers to the MMC. Instead, we are providing flexibility to solve competition problems without employing the whole of the competition machinery. The clauses are, therefore, designed to provide faster solutions to sraightforward competition problems. That will save time, expense and effort for all concerned and, as I said, earlier, quicker solutions are in everyone's interests— consumers, competitors and businesses themselves. I would have hoped that this would be something that the noble Lord, Lord Rodgers, would welcome. It is the kind of short-cut, fast-track method which I would have thought he would welcome.

The noble Lord went on to ask me a question which is much more difficult to answer: if we are to judge the future, we should look at the past. Therefore, what kind of past undertakings do we see being used in the future under the new clauses? The Bill does not limit the type of undertakings that would be acceptable, but we would be looking for undertakings that would solve monopoly problems cleanly and simply where the issues themselves are clear cut. These are the kinds of assurances that would most likely involve future conduct: for example, ending discriminatory pricing or refusal to supply. The undertakings will need to be sufficient to solve the problem, otherwise—and this is important—there is still room to go for a full reference.

Lord Peston

Perhaps I may intervene for a moment. I was intrigued by the Minister's reply to the noble Lord, Lord Rodgers. He should not exaggerate the difference between us; we are strong advocates of competition and I cannot list the number of times that I have heard the Minister say that competition is the essence of the Government's policies and that they favour it. Therefore, that is not the point at issue. The point is how we judge it.

To help the Minister, perhaps I may put specifically two examples which perhaps the noble Lord, Lord Rodgers, had in mind. Perhaps we may take the two most ludicrous reports of the Monopolies and Mergers Commission over the past year. There have been several vying for ludicrousness. The MMC has become so ludicrous that I am even tempted to support the Government on the Bill. I find it hard to see the MMC as the consumers' friend any more. If the Government had their time over again, would they have submitted the problem of resale price maintenance being introduced through the back door on the supply of perfumes? Would they have done it that way rather than through the Monopolies and Mergers Commission which produced a quite astonishing report suggesting that resale price maintenance in that case is acceptable? To take the even dafter report on the supply of compact discs last week, which I am sure the noble Lord read as closely as I, the MMC came up with the statement that there was a monopoly but it was not against the public interest. Are not the Government taken aback by that at all? Does the Minister realise that that totally flies in the face of the Government's own policy statements? Would the Government, if they had the chance, use their own new route (to follow the point that was made by the noble Lord, Lord Rodgers of Quarry Bank) on the compact disc question? As I say, my own temptation —although of course I totally support my noble friend on the general matter—in regard to how the MMC is behaving is to wonder whether what we really need is a new approach to the MMC. I should really like something more practical, as the noble Lord, Lord Rodgers, said, on, for example, those two cases.

Lord Rodgers of Quarry Bank

I wonder whether I might intervene before the noble Lord replies to that very helpful comment by the noble Lord, Lord Peston. He said, in trying to explain without examples—though I hope that he will now deal with the matter that the noble Lord raised—that matters that are suitable for an undertaking might be issues that are clear-cut. If the Minister does not want to go into a great deal of detail in terms of examples, could he tell us over a convenient period such as the past five years how many issues were so clear-cut as in his view to be ones where undertakings could be given? Then—and perhaps the Committee will forgive me if I overlooked this—could the Minister say (or repeat, if he has already said) how many fewer references he expects as a result of the Bill? Again, he holds up his hands as though he does not know. But there must have been some assumptions made within his department; otherwise it would have been extremely irresponsible to bring forward a proposal when he cannot give examples of cases that will not be referred and does not even know now how many fewer there would be. And finally, if this procedure is followed, what does the Minister imagine to be the length of time between the original consideration by the Office of Fair Trading, the request for the undertakings and the consultation? In other words, how much shorter will those occasions be than they are now? These are very simple questions and they must have been discussed within the department; otherwise the Minister would have been very irresponsible—and I know that he is not irresponsible—to bring the matter forward.

Lord Strathclyde

My Lords, the noble Lord makes a number of very nice, very neat debating points. But I am not sure that they deal very much with the substance of the case with which we are dealing: for instance, on the whole question of the length of time involved. We shall come to that subject in later amendments. But the main point here is that time will vary depending on the industry being looked at or on the particular problem or issue in question. Therefore it is not possible to say how much time will be saved. What we do know, however, is that there are substantial costs involved in going forward to a full reference. We believe that there are instances—certainly there will be instances in the future, once we have passed this measure, if it is passed —where it will save a lot of money and time to go through the short-cut procedure—

Lord Tordoff

I can quite understand when the Minister says that there are a variety of cases. But can he set some kind of proportion on the time that is likely to be saved? Clearly it will not be the same in each case. Will the measure cut the time by half? Will it cut the cost by half? We need some kind of guidance on what the effect will be.

Lord Strathclyde

The noble Lord asks the unanswerable. There is not an obvious answer to those questions. We believe that the cost will be substantially reduced; by more than half, about half—

Lord Peston

By half then.

Lord Strathclyde

It may be by half; it may be by more than half. I hope that it will not be less. The whole point is to look at areas which are clear-cut and with which we can deal in a practical way.

I felt when the noble Lord, Lord Peston, was speaking that there was an amount of admiration for the way in which the Government had brought forward these clauses and that the noble Lord was in favour of having this short-cut regime on the basis that, by having it, we might have had a different answer as regards some of the recent reports that have been made—

Lord Peston

I do not mean to interrupt the noble Lord. I was simply being helpful to the Government. I believe that competition is the consumers' friend. I have often heard the Government say that as well. The MMC certainly does not seem to believe that any more. I simply sought guidance as to whether the new procedure might help us in that regard. My concern is that the new procedure—as I shall demonstrate, probably ad nauseam, during the course of the rest of the afternoon—will weaken rather than strengthen. We shall come to that matter in due course. I would like the Government at least to recognise their own commitment to competition.

Lord Strathclyde

Many times I have recognised our commitment to competition. But we do have procedures in this country for looking at monopoly and mergers procedures, through the MMC and through the DGFT. The noble Lord raised two particular cases; namely, on retail price maintenance and on CDs. But he could have raised many others where the MMC has made adverse findings; for instance, on gas; private medical services; contraceptive sheaths; mortgage valuations; and national newspapers. And there have been others about which the noble Lord may not agree. We could have a debate as to whether or not the commission was wrong. I do not believe that this is the right place for such a debate. But as to the question of whether these are the kinds of cases that would have been dealt with under these new procedures, it would be up to the director general to decide whether to make a proposal and for the companies to decide whether to agree undertakings. That is why these questions, which are well put by the noble Lords, Lord Tordoff and Lord Rodgers of Quarry Bank, are impossible to answer. I hope that I have been helpful. I know that the noble Lord, Lord Williams, is no doubt itching to wind up this debate. I hope that I have given him an explanation of what is at the heart of the new clauses.

Lord Monkswell

I am sorry to intervene, but it seems to me that one of the key issues in regard to this amendment is the public interest. The noble Lord, Lord Williams, mentioned, as I did, the concern that exists in regard to the situation not only in this country but in a European dimension. There is a concern that competition is not the only mechanism to judge mergers and developing monopoly situations, but that there is a case for the public interest to be taken into account.

I was very interested in the comments of the noble Lord, Lord Peston, about the apparent inadequacy of the deliberations of the Monopolies and Mergers Commission. It reminded me of a question that somebody asked me a number of years ago; namely, why do we have only one Monopolies and Mergers Commission? Is there not a bit of a monopoly there?

I wonder, bearing in mind the developments of technology and financial regimes in terms of the international financial markets and developments in patterns of trade, whether we need to make some changes in this area. I wonder whether the Minister can respond to those points, particularly with reference to the public interest issue which formed such a key part of the amendment of my noble friend Lord Williams.

Lord Strathclyde

I am well aware that that is the key part of the amendment of the noble Lord, Lord Williams. But I do not believe that there is any gap in the ability of the MMC, or indeed of the DGFT to be able to make his deliberations. The MMC is an independent statutory body. It has a role to assess the impact of activities and transactions on the public interest. It is the job of the MMC to weigh up carefully all the evidence from all interested parties, be they consumers, competitors or anybody else. It must then produce independent and objective reports. I for one have every confidence in the MMC's ability to perform that valuable role.

Lord Williams of Elvel

This has been an interesting debate—not least because of the Minister's replies to the various questions that have been put to him. I am surprised that the Minister, who normally treats these matters in an intelligent and sensitive manner, does not seem to understand that what is being asked of us in this Bill is by its nature a weakening of competition policy. We on this side are in favour of a strengthening of competition policy. He did not seem to understand that competition policy needs an overall review and an overall rationalisation in the way that I mentioned. He has not given us any examples of how that might have applied or how it might apply in future. When asked how much it will be, he says that maybe half will be spent and half will be saved. It is all very vague. I am rather surprised that the Minister can come before this place, which after all is a revising Chamber, with such measures and not give us proper answers.

Competition policy remains in confusion. I return to what I said when introducing the amendment. The amendment is designed to introduce an element of rationality into competition policy. I agree that there is a divide between ourselves and the party opposite about the onus of proof. But I believe that by introducing the onus of proof in this very modest manner, and if we allow undertakings instead of references to the Monopolies and Mergers Commission, we simply push the whole matter forward onto what I regard as more sensible ground. In recognising that there is that divide, I have no alternative but to seek the opinion of the Committee.

5.30 p.m.

On Question, Whether the said amendment (No. 63) shall be agreed to?

Their Lordships divided: Contents, 57; Not-Contents, 128.

Division No.1
CONTENTS
Addington, L.	Mackie of Benshie, L.
Airedale, L.	Mar and Kellie, E.
Beaumont of Whitley, L.	Mason of Barnsley, L.
Boston of Faversham, L.	McIntosh of Haringey, L.
Broadbridge, L.	McNair, L.
Bruce of Donington, L.	Merlyn-Rees, L.
Carmichael of Kelvingrove, L.	Molloy, L.
Cocks of Hartcliffe, L.	Monkswell, L.
David, B.	Morris of Castle Morris, L.
Dean of Beswick, L.	Nicol, B.
Donoughue, L.	Peston, L.
Eatwell, L.	Pitt of Hampstead, L.
Ewing of Kirkford, L.	Prys-Davies, L.
Falkland, V.	Redesdale, L. [Teller.]
Gallacher, L.	Richard, L.
Geraint, L.	Rodgers of Quarry Bank, L.
Gladwyn, L.	Sefton of Garston, L.
Graham of Edmonton, L.	Serota, B.
[Teller.]	Shannon, E.
Grey, E.	Shaughnessy, L.
Haskel, L.	Stoddart of Swindon, L.
Hughes, L.	Taylor of Gryfe, L.
Jenkins of Putney, L.	Thomson of Monifieth, L.
Kennel, L.	Tordoff, L.
Kilbracken, L.	Turner of Camden, B.
Listowel, E.	Warnock, B.
Llewelyn-Davies of Hastoe, B.	White, B.
Lockwood, B.	Williams of Elvel, L.
Longford, E.	Young of Dartington, L.

NOT-CONTENTS
Addison, V.	Cadman, L.
Ailesbury, M.	Campbell of Croy, L.
Aldington, L.	Carnock, L.
Annaly, L.	Chalker of Wallasey, B.
Archer of Weston-Super-Mare, L.	Chelmsford, V.
Arran, E.	Chesham, L.
Astor of Hever, L.	Clanwilliam, E.
Astor, V.	Clark of Kempston, L.
Balfour, E.	Cochrane of Cults, L.
Belhaven and Stenton, L.	Cockfield, L.
Blatch, B.	Courtown, E.
Blyth, L.	Craigavon, V.
Boardman, L.	Cranborne, V.
Borthwick, L.	Crickhowell, L.
Boyd-Carpenter, L.	Cumberlege, B.
Bridgeman, V.	Davidson, V.
Brougham and Vaux, L.	Dean of Harptree, L.
Bruntisfield, L.	Denham, L.
Butterworth, L.	Eden of Winton, L.

Ellenborough, L.	Moyne, L.
Elles, B.	Munster, E.
Elliott of Morpeth, L.	Murton of Lindisfame, L.
Elphinstone, L.	Norfolk, D.
Elton, L.	Northboume, L.
Faithfull, B.	Northesk, E.
Fanshawe of Richmond, L.	Onslow, E.
Ferrers, E.	Orkney, E.
Rather, B.	Orr-Ewing, L.
Gainsborough, E.	Palmer, L.
Gardner of Parkes, B.	Pearson of Rannoch, L.
Geddes, L.	Pender, L.
Gibson-Watt, L.	Peyton of Yeovil, L.
Goschen, V.	Pike, B.
Gray of Contin, L.	Reay, L.
Hanworth, V.	Renton, L.
Harding of Petherton, L.	Renwick, L.
Harmar-Nicholls, L.	Richardson, L.
Harrowby, E.	Rodger of Earlsferry, L.
Hayhoe, L.	Sainsbury of Preston Candover, L.
Henley, L.	Seccombe, B.
Hesketh, L.	Sempill, Ly.
Holdemess, L.	Simon of Glaisdale, L.
HolmPatrick, L.	Skelmersdale, L.
Hood, V.	Skidelsky, L.
Howe, E.	St. Davids, V.
Hylton-Foster, B.	Stewartby, L.
Jenkin of Roding, L.	Strange, B.
Johnston of Rockport, L.	Strathclyde, L.
Kimball, L.	Strathcona and Mount Royal, L.
Lauderdale, E.	Strathmore and Kinghorne, E.
Leigh, L.	[Teller.]
Lindsay, E.	Sudeley, L.
Long, V.	Teviot, L.
Lucas of Chilworth, L.	Thomas of Gwydir, L.
Lyell, L.	Trumpington, B.
Mackay of Ardbrecknish, L.	Ullswater, V. [Teller.]
Malmesbury, E.	Vaux of Harrowden, L.
Manton, L.	Vivian, L.
Marlesford, L.	Wade of Chorlton, L.
McAlpine of West Green, L.	Wakeham, L. [Lord Privy Seal.]
Merrivale, L.	Waverley, V.
Mersey, V.	Willoughby de Broke, L.
Mottistone, L.	Wise, L.
Mountevans, L.	Wynford, L.
Mowbray and Stourton, L.

Resolved in the negative, and amendment disagreed to accordingly.

5.38 p.m.

Lord Peston moved Amendment No. 64:

Page 5, line 42, after ("considers") insert ("and is able to demonstrate").

The noble Lord said: This is the first of a great many amendments which essentially are to test the Government's statement, which the Minister has just repeated, that whatever we see under this chapter of miscellaneous deregulatory provisions, the Government's policy is not—and is stated not to be—a weakening of competition policy. In other words, the Government want to do things in a different way but their view is that it does not weaken competition policy.

Almost everyone who has written to me on the subject takes the contrary view. It is perhaps very difficult to make up one's mind because it would not be known whether the provisions weakened competition policy until they were used. Then it would be clear. The noble Lord heard me say earlier that I was not too happy with the present state of competition policy if it could give rise to the kind of reports from the Monopolies and Mergers Commission that we have just seen. My first amendment, which is one of many, is a test of that.

As it stands, Clause 5 of the Bill refers to the director general and new Section 56A (1) (c) contains the provision: if he considers that undertakings offered to be given by particular persons would be sufficient".

We raised this matter in your Lordships' Committee on Thursday last when I was unhappy about similar statements in relation to the Secretary of State. I do not believe that "considers" is sufficient, particularly for those of us who take an interest in the matter—I refer to those of us in your Lordships' Chamber as well as those of us outside. We want more than that. We want the director general to demonstrate that the undertakings are sufficient. In other words, we want to be persuaded and we want to see how the director general was persuaded.

To return to an earlier example, I would have been quite happy if the undermining of resale price maintenance in the perfume case had been dealt with in that way. The scandal that essentially the perfume companies have undermined the work of the noble Lord's right honourable friend Mr. Edward Heath— whose greatest contribution to the welfare of this country was the abolition of resale price maintenance which he introduced when he was President of the Board of Trade in 1963—is being repeated consistently by all sorts of companies, though the perfume case was by far the most disgraceful. Essentially the Monopolies and Mergers Commission validated that case.

I am interested in whether or not the Minister will say that under these rules—this is mutatis mutandis in this case —the DGFT will seek undertakings from people engaged in bad behaviour to desist from it; that he will demonstrate that it will work—that is the point of my amendment—and then we need not bother with a rather eccentric monopolies commission.

Members of the Committee will see that many other amendments tabled in my name are along the same lines as Amendment No. 64. My intention is to obtain a more positive statement from the Government that the provision will strengthen competition policy. If they are able to accept Amendment No. 64, nothing will show more clearly their commitment to this matter.

Lord Strathclyde

My main disagreement with the noble Lord, Lord Peston, lies with the contention that what we are proposing weakens competition policy. We do not believe that it does; it simply changes the procedures whereby the DGFT receives undertakings. The principle of undertakings was conceded some years ago and we are simply looking at ways of finding a regime whereby we can come to decisions neatly and easily. I believe that Amendment No. 64 is unnecessary and would lengthen the process unduly.

Under subsection (2) in new Section 56A, the director already has to set out, in his proposal to the Secretary of State, a whole range of information: the terms of the undertakings; the companies offering them; the facts of the monopoly situation which he believes may operate against the public interest; and the relevant adverse effects which he identifies. In short, he must present both the problem and its possible solution.

The Secretary of State, who has the final decision on acceptance, can therefore form his own view of the likely effectiveness of the undertakings. Moreover, before making his proposal the director will have published a notice, under new Section 56B, setting out the adverse effects and the terms of the proposed undertakings. So everyone interested will have had the opportunity to comment on the adequacy of the proposed solution.

I believe those arrangements, which are designed to promote a balanced and transparent assessment, are sufficient as they stand in providing the degree of certainty required to show that an adequate solution has been reached. I believe that we can also rely on the director to fulfil his independent role and come forward with well thought-out proposals. It would be wrong to require the director to prove indisputably that the proposed solution is right. I believe that the amendment could lead to a situation similar to that which my noble and learned friend Lord Hailsham warned against in our debate last week on Amendment No. 2. The onus of proof on the director to demonstrate the effectiveness of proposed undertakings would, in effect, mean that the courts could decide whether or not the proposal should go forward.

I do not believe that we need to increase the possibility of judicial scrutiny in that way. The director's consideration must in any case be based on reasonable grounds, or else there would be a risk of judicial review. The whole purpose of the clause is to provide the possibility of a short-cut solution, without a full-scale MMC investigation. The amendment would require the director to conduct a much fuller investigation. That would risk lengthening the whole process and supplanting the role of the MMC.

I hope that I have demonstrated that the clause already provides an appropriate level of certainty and transparency, and that the noble Lord, Lord Peston, can therefore withdraw the amendment.

5.45 p.m.

Lord Peston

I thank the noble Lord. We are certainly on the same wavelength in that we are talking about the same subject. He used exactly the word that is at the centre of my concerns—transparency. He is aware that I was mystified by his noble and learned friend Lord Hailsham last week in that merely making the common sense point that when one says, "I am going to do this", one ought to be able to show that it works—that is all I am asking—suddenly gets us into the deep water of judicial review and the heavy-handedness of the law.

I felt it was common sense that if the DGFT said, "These undertakings do this job", I should be able to put up my hand and ask him why. I am not asking him to go through the whole of the MMC report again, but I should like to be persuaded. To be told that merely asking the question "Why?" brings down galaxies of silks and goodness knows what else rather shatters me. I like to believe that the world is not quite like that; that one can ask a reasonable question and receive a reasonable answer.

Again, the noble Lord and I are on the same wavelength in that we agree on the objective. If we can make competition policy work as well or perhaps better than it works at the moment, and do it more efficiently, then the Government will get no trouble from me. That is not where we disagree. I want a better case put forward that that will be so. The noble Lord cannot blame me if I am a teeny bit suspicious. He knows the disdain with which I view the deregulation committees —I am not sure whether that is their correct name— simply because of the monolithic way in which they have been set up. If those committees had contained a broader range of opinion, then the opinion of all the people concerned would have carried a good deal more weight than simply including the rather narrow range of opinion that was included. I would have been much more impressed in that case.

My concern is that if this kind of amendment comes from that kind of person then I become extremely suspicious, and the noble Lord cannot blame me for that. I was interested in his answer. What matters is that he is on record as saying that he and the Government are convinced that the provision will not weaken policy. Several other amendments will allow me to repeat my speech and him to repeat his. Indeed, if we had a Committee upstairs consisting purely of the noble Lord and me, we would proceed much more quickly and the Government Chief Whip would be a good deal happier. However, we are not doing it that way at the present time. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Peston moved Amendment No. 65:

Page 6, line 7, at end insert ("and an explanation of why he believes that to be the case").

The noble Lord said: In moving this amendment I shall speak also to Amendment No. 67.

Again, as the noble Lord points out, a statement is required to be made about the facts relating to the monopoly situation, which the director considers may now or in future operate against the public interest. This somewhat follows from the earlier ammendment of my noble friend Lord Williams of Elvel. I simply ask—and my heart sinks at what the answer might be, because I would not be surprised if it is identical to the one that I have just had—that he should add an explanation of why he believes that to be the case; why he believes it to be against the public interest. That applies also to Amendment No. 67.

It seems perfectly reasonable that one can ask the DGFT not merely to say "I think this is against the public interest", but to tell us why. I hope that the answer is not going to be "judicial review" again, but I fear it may be.

Lord Strathclyde

I do not wish to bore the Committee and so I shall not use an identical answer. But I have similar reservations with this amendment as with the last one: I believe that it would be unnecessary and over-prescriptive to make the requirement. We are trying to provide this new mechanism and there is a danger that, in placing too many requirements on the director, a mechanism intended for resolving problems quickly and effectively will become too bureaucratic ever to be used. The director already has to specify what are the identified adverse effects on the public interest that might be caused by the monopoly situation.

The nature of the problem which he has identified, the facts causing it, together with the proposed solution, will all be presented in the director's proposals to the Secretary of State. They will also previously have been specified in the director's notice published for consultation. This should be sufficient for anyone to evaluate the director's proposal. I am sorry if the noble Lord, Lord Williams, does not think that that is a full enough answer.

The real question on this amendment and the ones that we will come to is that we have spent a great deal of time in working out how the proposals should work in practice, and we have eschewed putting other powers or duties on the director which may well hold them up. Our intention is for these things to be used where there is a relatively clear-cut case and we can reduce time and expenditure by avoiding a full reference.

Lord Peston

I thank the noble Lord for his reply. I understand his argument about wanting to be efficient and effective, but, in the end, effectiveness depends on the outcome as well as just on saving time. It is a question of what you achieve. I do not see why demanding that the director supplements his statement of the facts with an explanation should be so burdensome to him. The important point is that if I stand away from it—either outside or inside your Lordships' Committee—and I want to argue with it, and if I have not had any statement as to why he believes that the matter is against the public interest, I will find it difficult to know how to have an argument. All he will do is say, "I point to this; I have got an undertaking on that, and I think that what is going on may now or in the future operate against the public interest." Even the noble Lord himself, if confronted with this, would immediately say to the director, "Why?" He would demand an explanation. If there was a Secretary of State or President of the Board of Trade side to this, I imagine that he would do that. All I am saying, speaking up and sticking up for the rest of us, is that I would also like to be able to ask the question why—and the easiest way that I could ask that question is for it to be incorporated into the legislation. He would then give me the answer without my having to ask him.

As to the judicial review point, I do not see that his giving reasons need have the consequences that the noble and learned Lord, Lord Hailsham, said. What it does do is raise the level of public debate on matters of this kind in a helpful way.

I hope that the noble Lord will appreciate, as I said before, that there is not a lot of difference in our attitude to competition, or to the need to speed things up. I am sorry that he did not say he would like to think more about some of this redrafting. So far as I know, the parliamentary draftsmen are salaried employees, so my asking him to look again at some of these matters will not raise the cost of government; it is not piecework, as I understand it. So, at the very least, the noble Lord might reflect on one or two of these matters. I think the Bill would be somewhat improved if it was drafted slightly more towards my philosophy of things than it is towards the Government's.

The noble Lord has listened to what I have said—and replied—and I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Lord Peston moved Amendment No. 66:

Page 6, line 11, at end insert ("including an estimate of their quantitative significance").

The noble Lord said: Amendment No. 66 is grouped with Amendments Nos. 68 and 86 and I hurriedly look to see that the word "quantitative" is not misprinted on the Marshalled List as "qualitative", as it was last week. I hope that not too much official time was wasted in trying to work out what I had in mind—but I would be interested in the answers, if any were written—on the amendments containing the word "qualitative". "Quantitative" is what I wanted. This again I can deal with very briefly because I dealt with similar matters on Thursday.

When we are considering all matters of this kind, it is vital that we have a sense of scale as well as merely reorganising that the problem is there. I am certain that in practice—and the noble Lord need take no time to persuade me—that with this procedure, if it were in operation, someone would be looking at it in terms of scale and saying "How important is this?"; "How big are the detriments?"; "How much do we save?", and so on. So scale is of the essence. From what little knowledge I still have of economics, there are many problems with the economy on which very high powered articles are written but when you look at their quantitative significance they are fairly trivial. Their only significance is to provide a means whereby academics can get themselves promoted by writing esoteric articles. That is not something that I would criticise because many of us have got where we are that way in the first place.

But the fact is that, when it comes to policy, quantitative matters are important. I do not need persuading, as I have said, that the director would look at such matters in the normal way of working, but I should certainly like that on the face of the Bill so that I, as an interested person, could say of any proposals here, "What scale of a problem are we talking about; how do we measure the detriments?"—in rough terms, not necessarily to the last decimal point.

So I commend this to the Committee and look forward to hearing what the noble Viscount has to say.

Lord Peyton of Yeovil

I have been looking forward to hearing what the noble Lord, Lord Peston, said in introducing this particular amendment because so confident am I in his abilities that I knew that I would have a very clear understanding afterwards of what the effect of the amendment would be. As it is, I am still a little bit lost; I am not quite sure how useful it would be.

As I understand it, the purpose of the whole Bill is to get rid of restrictions which are unnecessary, silly and outdated. Some of them may have been silly from the very start. They are oppressive in their effects and therefore they should go. How my noble friend would possibly be able to give a useful estimate of the quantitative significance of getting rid of a silly regulation, I do not really know. I have said repeatedly during the passage of the Bill that I have a high regard for my noble friend's abilities and capacities; what does slightly surprise me is that a number of noble Lords on the Opposition Benches should have an even higher opinion of my noble friend's capacities than I have. They recognise that he is able to see the future very clearly and to assess without undue difficulty the answers to the noble Lord's questions. My noble friend may have them but I think it would not be a very useful exercise even if he does.

6 p.m.

Viscount Goschen

The Government do not believe that there is a need for these amendments even in their corrected form as they would appear to over-complicate the process under discussion. The whole purpose of Clauses 5 and 10 is to provide flexibility for solutions to competition problems to be reached far more swiftly. For example, there may be cases where a company or a limited number of companies are suspected of unfair pricing or of refusing to supply products to potential competitors. In such cases the solution to the problem may be fairly straightforward if the companies concerned agree to change their ways. These clauses provide the flexibility to accept undertakings, as has been mentioned earlier, to solve relatively simple problems instead of going through a complete MMC investigation. The effect of the amendments would be to delay that process unnecessarily.

I agree with my noble friend Lord Peyton not only on the question of the far-sightedness of my noble friend Lord Strathclyde but also that it is not clear what would be gained by requiring in all cases a statement of the quantitative significance of adverse effects in the director's proposal to the Secretary of State or in his notice published for consultation under Clause 5 or Clause 10. The director general is already required to specify numerous facts and other information both in the proposal and in the notice; for example, in a notice under Clause 5 the fact that a particular monopoly exists in a particular form or that the monopolists behave in a certain way. He is also required by Clause 10 to specify similar details in a notice of intention to accept undertakings instead of making a Competition Act reference. In each case he must indicate the possible adverse effects which the undertakings will be designed to alleviate.

We believe it to be unnecessary to require the director in all cases to give a quantitative estimate of the severity of the potential adverse effects either to the Secretary of State in his proposal, as suggested by the noble Lord's Amendment No. 66, or to those reading his published notice, as suggested by Amendments Nos. 68 and 86.

As far as concerns Amendment No. 66, the Secretary of State should generally be able to form his own view of the problem and the proposed solution from the information already provided in that proposal by the director. Similarly, readers of the published notice who are being consulted on undertakings as an alternative either to a monopoly reference or a competition reference should be able to form their own view of the adequacy of the proposed solution without requiring a detailed economic analysis in every case. Moreover, requiring the director in all cases to produce a detailed assessment right at the start of the consultation process would risk dragging out the whole exercise. It would also appear to pre-empt that consultation exercise, which itself may throw up further facts and figures.

It is important to note that the director could always provide such an analysis where he thinks fit but the amendments would require him to do so in all cases. That would complicate and prolong the process precisely for those more straightforward cases where we are seeking a quicker solution to any problems identified. Holding up that solution would not benefit the company or its customers. For those reasons we do not believe that we should be over-prescriptive in these matters. I therefore invite the noble Lord to withdraw the amendment.

Lord Peston

I thank the noble Viscount for his reply. I fear for once —perhaps for more than once— that I have not made myself sufficiently clear. If the director general had to do it my way—I should emphasise that my amendments are all of a piece although we are taking them separately-—far from complicating matters or prolonging them it would in many cases shorten and simplify them. The moment the director realised that he was going to come up with some numbers to show that the numbers were big enough to make it worth while he would soon see as a matter of common sense that a particular restrictive practice or a monopoly problem, although it was there qualitatively, had very little weight quantitatively and he would not do it. That is my whole point. Far from adding to his work, a very quick examination would show that it did not amount to a row of beans. Therefore, if someone had written to him about the matter he- would be able to say, "I have looked at this problem. I agree in purely formal terms that there is a problem of monopoly. But if you look at the adverse consequences they are so tiny that it is not worth while". That is why —I speak as someone who has spent a lot of his life doing quantitative work—quantitative work is so useful. It gives one a perspective and stops people fussing.

On the vital question of the merits of the noble Lord, Lord Strathclyde, I have to tell my good friend, the noble Lord, Lord Peyton, that for once I disagree with him. No one holds the noble Lord, Lord Strathclyde, in higher esteem than I do. I am most shocked that he thinks that there are others who think more: highly of the Minister than I do. I say that in the hope of persuading the Minister to accept another amendment in due course.

Lord Peyton of Yeovil

The noble Lord has completely misunderstood me. I was warmly welcoming the evidence that the noble Lord, Lord Peston, has an even higher opinion of my noble friend than I do.

Lord Peston

Forgive me. In that case we are more or less in agreement. All I hope is that someone says something nice about me before the day is over.

Noble Lords

Hear, hear!

Lord Peston

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 67 and 68 not moved.]

Lord Peston moved Amendment No. 69:

Page 7, line 21, after ("Director") insert ("in public").

The noble Lord said: It is useful when we are in Committee to go over every matter. The purpose of my amendment is to do that. The amendment takes us back to transparency. What I am saying is perfectly clear. It is vitally important that the invitations referred to should be in public so that we can know what is going on. I am not sure whether the noble Lord, Lord Strathclyde, or the noble Viscount, Lord Goschen, is to read out the standard lilac or turquoise coloured brief this time. However, I simply do not see that this requirement need in any way prolong the matter. It is simply a way of proceeding. The correct way of doing things of this kind is for those of us who are interested—the public and your Lordships—to be able to know what is going on. Adding the words "in public" is a useful amendment to insert in order to get that transparent outcome.

Lord Peyton of Yeovil

For a moment I was very nervous that the noble Lord, Lord Peston, would not move his amendment. I would not then have had the opportunity of asking him what he intends by it. If the amendment were accepted the clause would read: the Director in public may only make a proposal under section 56A — if. Does that mean that he is free to make any proposal he likes in private and that the restrictions are on him only in public? That is the only way I can read the amendment. I think it is rather surprising.

Lord Peston

I am not certain that the noble Lord is placing my amendment at the right spot in the Bill. The Bill refers to representations and not to proposals. I refer to line 21 on page 7. That is where I mean it to be.

Lord Strathclyde

I like the way in which my noble friend Lord Peyton put it. I was hoping that the noble Lord, Lord Peston, had made a mistake which would have given us some cause for amusement. I would not have had to explain my opposition to this amendment because it would have been a nonsense. However, that was not the case. The noble Lord, Lord Peston, has put his amendment in the correct place, as I understand it.

This amendment takes us back to the debate which we had last Thursday about public consultation. We disagreed then and I believe that we shall disagree now. By making it necessary for representations to the director-general about draft monopoly undertakings to be made in public, this amendment deprives interested parties of the opportunity to make their views known in confidence if they wished.

It is a very strong principle as regards the kinds of consultations which governments carry out from time to time with individuals, that confidence is maintained at their request, particularly when commercial confidence is involved. Unlike the MMC, the director-general does not have the power to summon witnesses. If the consultation process had to be held in public and there was no opportunity for representations to be made in confidence, some competitors or customers of monopolies might be deterred from making their views known for fear of retribution.

We have already gone to some lengths to ensure that the whole process of identifying, consulting, advising and deciding on undertakings is as transparent as possible. I do not see how this amendment would significantly add to the overall level of transparency. Very possibly, it could detract from the purpose of consultation which would involve consumers as well as companies. It could lead to a lessening of the ability of the director-general to decide on these kinds of cases. Therefore, I hope that the noble Lord, Lord Peston, will feel able to withdraw the amendment.

Lord Peston

The noble Lord is quite right to refer to the last occasion when this matter was discussed. I am very sorry that we disagree on it. The Minister will recall what I said last time. If you want to make representations and you do not have the courage to make them in public, then I do not see why policy should be based on what you say. I would have thought that Members of the Committee opposite in other modes and when not trying to support the Government on this Bill, would always wish to favour transparency as opposed to covert ways of doing things.

We all know that in the real world people press things on the Minister saying, "I want to tell you this, but please don't quote me". The noble Lord will be horrified to discover that often people whom he believes to be his friends, come to me and say, "I would like to say the following to you, but I beg you not to let anyone know". I take the view that if people tell me things which I cannot repeat in public, then I do not want to know. Public policy should be based on transparent debate and not of the kind where someone says, "This is a problem, but I am not willing to let my name be made public". I am genuinely surprised that the Minister wishes to continue along that line. I understand that governments love that sort of thing. This is not a political point.

Lord Strathclyde

The noble Lord is slightly misrepresenting what I have said. I am entirely in favour of transparency and in an ideal world all these things would be made public. The problem is that very often when governments consult they are asked to keep matters confidential. We give that commitment. If we were not to do so, then it may well be that we would not get the information we need in order to make decisions and to make things more competitive and so on, which the noble Lord, Lord Peston, professes that he favours. That is the issue. It is not a question of the Government wishing for things to be more transparent. We believe in open government, as the noble Lord well knows. The point is that we are trying to get the best solution out of the consultation and that is why we keep certain issues private.

Lord Peston

May I return to this theme? We should not confuse consultation with representation. This is not a criticism of the Minister or the present Government. When I advised governments they always operated in this way. In my experience Ministers are very content to keep things "in house" so to speak. Increasingly I have come to the conclusion that that is not the right way to do things not so much as regards consultation, but concerning representation.

If you come to me and wish to represent a point of view as a Minister, in my opinion you must be willing to make your view known in public. If you want to influence me, but do not want anything to be known, then I simply look askance at that. That is the point that I made last week. I accept the noble Lord's point that sometimes as regards information —and I mentioned this a few moments ago—people will only tell you if you keep the source secret. That happens to me and it has happened more than once in connection with this Bill. People have come to me and told me about the sins of the Government as regards some matter of regulation and then they have said, "We do not want you to quote the exact case". Presumably, they tell the noble Lord that as well.

When people come to me and say that, I simply reply, "I am not willing to work on that basis. If you tell me something which I cannot use in public then it is no use to me". I am sorry that we are in disagreement on this issue. However, I do not feel that we are in quite so much disagreement on this matter as we are as regards other matters. I believe that I have used the Committee's time sufficiently to air the problem and that is what we are trying to do concerning this section of the Bill. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6.15 p.m.

Lord Peston moved Amendment No. 70:

Page 7, line 21, leave out from ("within") to ("about") in line 22 and insert ("28 working days").

The noble Lord said: I am sorry for the delay. When you are doing everything on your own it is a slightly slower process than would otherwise be the case. This amendment was debated in the other place and I introduce it here to see whether the Government have any view on this question.

The Bill as it stands simply states, within such time as he may specify".

One sees why one does not want to be too prescriptive about this kind of thing. In so far as we all accept the Minister's view that we want a quick process and to get a move on, to specify a particular time—and "28 working days" is approximately one real month— would be worth doing. The matter was raised in the other place and I have tabled the amendment simply to discover whether the Government have had any further thoughts on the matter.

Lord Strathclyde

I am sorry that the noble Lord, Lord Peston, seems to be slightly overworked this afternoon. That is entirely his own fault, particularly when he moves an amendment which has already been dealt with extremely well in another place. Unfortunately, I suspect that he will get the same answer, although I have not consulted Hansard of the other place.

The noble Lord makes a perfectly reasonable point that if we want this matter to be dealt with quickly then a time limit should be specified. However, that would remove the director general's discretion to vary the consultation period according to the circumstances.

The purpose of new Section 56B is to build transparency and consultation into the system. We have taken care to ensure that everything is clear and above aboard and that everyone who wishes to comment will have the chance to do so. That means, besides the monopolists themselves, their competitors, customers and anyone else with an interest.

We have left it open to the director general to specify the consultation period. He has an independent role and we think it best for him to judge this for himself. He is charged with the duty of keeping markets under review so that he can take appropriate action. I find it difficult to imagine that he would allow consultation to be dragged out by companies, simply to avoid a resolution.

But this is the point: every monopoly case is different. The interests and number of those who may be affected are also different—customers, competitors and consumers generally. There might be cases where concerns were clear and all those affected agreed quickly on the solution and sometimes not. It would be difficult to tie all this down to a fixed period which might deprive some parties of the opportunity to comment in time. I know that that is not the intention of the amendment. It is better to leave it to the director general to make up his own mind. After all, he is already charged with a very responsible job.

Lord Monkswell

I am sorry to intervene, but if I heard the Minister correctly, he said that the director general would consult over not too long a period and would not allow the consultation to be dragged out by interested parties who wanted to delay. That goes with the grain of the thinking that things need to be sorted out promptly and in a timely fashion, but let us consider the Government's own consultation record.

I specifically have in mind responses to education White Papers or to proposals for legislation in relation to education when the consultation period has been over the summer holidays when everybody in the educational establishment is away. That has meant that the consultation has not been very adequate, at all—to put the best interpretation on it. Could we have some indication from the Minister of what the Government's advice to the director general will be in terms of ensuring that enough time is allowed for representations to be made by interested parties? Particular times in the year or in the business cycle should be taken into account to allow interested parties to make adequate representation.

Lord Strathclyde

It is entirely fair to attack the Government but it is not fair to attack the director general. The whole point is that, ultimately, the director general has three choices: do nothing; go for a full reference; or go for the new fast-track procedure. If he decides on the fast-track procedure in consultation with the companies involved it must be in their interests for the consultation to be as quick as possible. If the consultation is dragged out on purpose by the companies involved the director general is still free to go for a full reference. The problem with a full reference is that it will be expensive, it will take a long time, and the decision may be even more uncertain. Therefore, it will be in the interests of the companies to ensure that the consultation is completed as quickly as possible. It must also be in the interests of the director to ensure that he consults as many interested groups as possible. I sought to emphasise that that would include not just the company involved but its customers and, indeed, consumers generally.

Lord Peston

The Minister referred to "the director". I do not know whether by that he meant a whole class of directors that may or may not exist from now into infinity or the present Director General of Fair Trading. If the noble Lord meant the latter, I must advise him that the present DGFT is a very old friend of mine and that I do not regard it as remotely unfair of me to criticise him at any time. I know that he would not be in the least upset by it. He happens to be an extremely good person for the job.

I do not want to go over the ground trodden earlier by the noble Lord, Lord Rodgers of Quarry Bank. However, presumably by saying that they believe in flexibility and do not want to be too prescriptive towards the director general, the Government must have given some thought to what a reasonable period of time is. The Minister says that 28 days is too short or does not give enough flexibility, but presumably a year would be too long. It would be absurd. Can the Minister enlighten me about his department's thinking on the period of time? I am not pressing for 28 days, but I am interested in what the department has in mind.

Lord Strathclyde

That is exactly the difficulty. I am not saying that 28 days is too short a period. In fact, in some small cases involving monopoly considerations, the director general could have the whole thing wrapped up in a couple of weeks. In the generality of it, I should not have thought that 28 days was wholly unreasonable and a year would be too long. However, for us to specify in legislation what the period of time should be would be unnecessarily to constrain the director general. That is the issue. That is why we believe that he should have that discretion.

The noble Lord, Lord Peston, says that the current director general is a friend of his and he naturally respects his judgment. I am sure that future director generals will earn the same respect that the current director general enjoys.

Lord Peston

I am interested in the Minister's remarks. I cannot commit myself, however, because I never know what mood I shall be in in the future. I hope that the Minister understands that amendments such as this are in the spirit of what the Government are trying to achieve. We want to get a move on. I am glad to hear that if those who want to make representations to the director general say, "It will take us about a year to put a case before you", at least the Minister's department (although it would not be involved at that point) could take the view that that would sabotage the whole procedure. I take it that the Minister's interpretation of the provisions is that, within such time as he may specify", means precisely that and that if the director general were to say, "I want your view within 28 days", then 28 days it will be. Can the Minister confirm that?

Lord Strathclyde

Of course. The director general comes to his view and sets a time scale. The companies or those with whom he is consulting must stick to that.

Lord Peston

I thank the Minister for clarifying the position a little. Although I cannot remember which amendment we are on—I suppose that it is Amendment No. 70—I beg leave to withdraw it.

Amendment, by leave, withdrawn.

Lord Peston moved Amendment No. 71:

Page 7, line 31, leave out ("in his opinion").

The noble Lord said: This is a drafting amendment, unless my suspicions are correct and there is more here than meets the eye. Having read the clause, I cannot see that there would be any difference if the words "in his opinion" were removed. I am wondering whether those words drifted in from other pieces of typing in which they appear or whether the phrase has any meaning. That is why I tabled the amendment. I beg to move.

Lord Strathclyde

This is again the dangerous territory that we dealt with on our first day in Committee when we considered Amendment No. 2 and my noble and learned friend Lord Hailsham talked about making matters more challengeable in the courts.

In publishing the notice, clearly someone has to decide how to identify the persons who ought to see the notice when it is published. It is a question of the director general's opinion. The director general is best placed to take that decision. He has been in contact with the companies. His staff will have gained familiarity with the markets. He has an independent statutory role.

If the director general's decision on the manner of publication is such that no reasonable director could have made it, then he could be successfully challenged. But the amendment could deprive the director general of any discretion and might even increase the risk of legal challenge. I would not wish to suggest that the courts would come to the wrong judgment, but the director general is in a better position to make that judgment than the courts.

The noble Lord, Lord Peston, said that he was suspicious about the words "in his opinion". My understanding is that we need those words so that it is seen that it is "in his opinion". If those words were omitted, the director general could be open to his view being tackled in the courts.

Lord Peston

I hear what the Minister says and I certainly heard what his noble and learned friend said last week. However, I am unhappy about it. I simply do not see why the legal profession should make us write bad English or include superfluous phrases (as far as logic is concerned) in our legislation simply because of its great fear and worry. Perhaps I should put it the other way round. Perhaps the Minister can explain this to me. Why would the director general do something other than that which is "in his opinion"? We should try to read the sentence as if it could have any other meaning. Is there any suggestion that the director general would do something that was not "in his opinion"?

As I said last week, I dislike clashing with lawyers on their playing fields; I would rather play on mine. But if I may say so, things have come to a pretty pass when we are prevented from writing our legislation in a way that ordinary people can understand—I am sure that that is how the Minister and I regard ourselves—simply because of this sudden peculiar fear about judicial review. The sentence makes perfectly good sense to any reasonable person without the expression "in his opinion". If we were to set a general school certificate exam question, "Look at that sentence and, in your opinion, take out any phrase which you feel adds nothing", I am sure that any child would take out the words "in his opinion". I am sure that that is undoubtedly right.

Lord Peyton of Yeovil

I do not wish to try my noble friend's patience but I too wonder whether these words are necessary. I was very much influenced by what was said the other day by the noble and learned Lord, Lord Simon of Glaisdale: that the Minister's opinion was necessary in order to trigger the whole process. This case is slightly different. The use of the words "are likely" would indicate that an opinion is called for and that it would be no opinion other than the Minister's. I wonder whether in this case my noble friend can give way. The matter is of no great importance but it is different from the case that was mentioned the other day.

6.30 p.m.

Lord Strathclyde

I do not have a huge problem with the issue either way. Unfortunately, in this matter I am the creature of the draftsman but I do not believe that a great issue of policy is involved. I am advised simply that, in order to create some certainty, this is the way it needs to be done. If the director's decision on publication were challenged, the court would have greater freedom to interpret the clause so as to allow it to substitute its own view. I understand that the words "in his opinion" put the matter beyond doubt. We may believe that they are relatively redundant words; but I am in the hands of the draftsman and I believe that they are the correct form of words.

Lord Monkswell

I believe that if the words were omitted, as proposed in my noble friend's amendment, the courts would be given the opportunity to intervene in a situation in which, in their opinion, the director has not done the job satisfactorily. If the phrase is left in, the courts will not have the ability to say to the director, "We are sorry but we think that you have got it wrong. Can you try again?". Effectively, the courts will have no discretion and injured parties, or those who believe that they have been discriminated against, will have no opportunity of putting the matter right.

Lord Strathclyde

I agree with part of what the noble Lord says. If the words, "in his opinion" are left out, the case is more challengeable. In any case, if the director is unreasonable in the way in which he makes his decisions, he is open to judicial review and therefore there is no great problem.

Lord Peston

I am an implicit member of the "Campaign for Clearer and Simple Legislation", of which I see the noble Lord, Lord Peyton, as the leading figure in this Chamber. I often table amendments of this kind in the hope that one day someone will accept one; and by that minuscule amount, legislation will be easier to understand. As a result, the income of lawyers will go down, which is another of my ambitions.

I do not disguise the fact that I become irritated when I receive answers of this kind. However, I am certain that the advice that the Minister has received is the best available to him. That irritates me even more. I shake my head sadly, but I have tried and I shall try again. For the moment, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Peston moved Amendment No. 72:

Page 7, line 32, at end insert:

("Proposals under section 56A: publication of response to representations.

56BB.—the Director shall publish his response to any representations made to him by bodies representative of the interests of consumers or injured parties or their representatives in connection with proposals under section 56A." ").

The noble Lord said: At last we come to a matter of great substance, and I am certain that the "judicial review" card is not the one to play. As regards those who make representations, the interests of consumers are overwhelmingly important but other injured parties may be involved too. The director will receive such representations. To my deep regret, as the noble Lord has rejected my view of the matter, the director will be willing to receive such representations not made in public; in other words, he will consider matters covertly as well as overtly.

The next question is whether having received representations the director should respond to them. He will of course respond to them in the broad sense that eventually he will reach a determination. I believe that those who make the representations—whether they are the NCC or the Consumers' Association on the one hand or others who regard themselves as interested and injured parties—deserve more than a note or a printed card from the director stating, "Thank you for your representations. They have been noted by the Director General of Fair Trading". I imagine that: that is what happens most of the time. I believe that bodies which have gone to that trouble are entitled to know more positively the director's response.

I would enunciate this as a much more general issue in government but as we are discussing the more specific part of the Bill, I shall concentrate on that. It is a matter of some significance. I do not make this as a political point because I remember that as regards the Government whom I had the great honour to serve, one received representations and those outside wondered whatever happened to them. Did anybody receive them, read them or take any notice of them? Were they simply sidelined? Did they end up on a huge pile of papers so that the Minister could say, "I certainly received representations"?

The noble Lord referred to his commitment to open government. I agree with him. My commitment not merely to open government but to sensitive government suggests that something along these lines would be worth including on the face of the Bill. I beg to move.

Lord Peyton of Yeovil

The noble Lord, Lord Peston, asked who reads all the information. I wonder who will read the reply. I believe that there is enough information and data in orbit without adding to the huge volume of the illegible. The task will take up a lot of time, too, because once people have to make public statements, they must be very careful. Surely in many cases these matters can be dealt with briefly. I would be most reluctant to ask the Minister to put this provision in the Bill because it would prolong the proceedings and add to the floodtide of useless information which is in constant circulation.

Lord Renfrew of Kaimsthorn

I wish to second my noble friend's remarks. The noble Lord, Lord Peston, appeared to indicate that the director should respond to representations. No one could object to that view; but the publishing of all responses to any representations will generate an enormous amount of paper work. Who will receive it? Where will it be published and what will it cost? It is a piece of bureaucracy which I cannot believe the noble Lord, Lord Peston, with his sense of economy in the English language and so forth, can possibly desire.

Lord Strathclyde

We continue the debate on consultation. The amendment is similar to Amendment No. 85 and I do not know why they were not grouped together. Perhaps Amendment No. 85 will not be moved. There is nothing between the noble Lord and I in our desire for greater transparency, open government, and so forth. However, I do not see what useful purpose the amendment will serve. Like my noble friends Lord Renfrew and Lord Peyton, I believe that it could be counter-productive. Underlying the amendment, there appears to be an idea that the director would not be doing his job properly were he not forced to publish his response to representations. I believe that we can rely on him to come to a balanced view on the basis of all representations received and on any other information available to him. In his independent role, he must keep watch over markets and activities. He has shown in the past that he is willing to take action where he thinks fit.

I would not wish to tie the director to a particular course, but I assume that where representations are received he will normally respond direct. If the recipients consider that their comments and the director's response should be made available to a wider audience, there is nothing to prevent them seeking publication in a suitable journal. I do not see why the director himself should be forced to publish.

Moreover, the director's response will be likely to have to refer to the particular comments received from the person consulted. As I mentioned earlier, some companies as injured parties might be deterred from making comments to the director if they knew that his response was to be published. That is one difficulty with the amendment.

Another difficulty is that the amendment would risk simply keeping the debate open and prolonging the whole process. I believe that the opportunities for consultation and comment are fair and extensive. But at some point in the process a decision has to be made. It would be wrong to leave the companies concerned, and the market generally—including customers and con-sumers—in a perpetual state of uncertainty.

Perhaps the noble Lord, Lord Peston, will reflect further on the amendment. I know that he holds this matter dear to his heart, but I believe that the provisions as they stand provide the right balance between consultation and shortening the investigation process. I hope that the noble Lord will think again.

Lord Peston

I thank the Minister for his reply. I shall certainly think about it further. I was rather horrified by his reply, as I was by the remarks of other Members of the Committee who intervened. In our society today large numbers of people say that democracy is a sham. They say that no one ever listens; and that when governments say that they wish to consult, they mean that they ask for opinions and then take no notice. This is an extremely serious matter, and that is why I prefaced my remarks by saying that this is an amendment of some substance.

Perhaps I may ask the noble Lord, Lord Renfrew, this. If no one is going to read the answers, why are the Government and the director asking for the representa-tions in the first place? That is the central point. The noble Lord's view is extremely cynical. Let us assume that there is a restrictive practice about which I am concerned. Although the noble Lord, Lord Peyton, is not wrong to be cynical, I should like to believe that someone had actually read what I wrote. And then I should like to believe that someone would feel that it would be useful and democratic to reply to me by saying, "I do not agree with you but this is my argument. This is why I disagree with you". That is what the Minister has been doing all afternoon. I agree that no one else may be interested but I am interested and at least it can be said that, although the Government or the director did not do what I wanted, I have some evidence that at least they thought about the matter.

Lord Renfrew of Kaimsthorn

I thank the noble Lord for giving way. I believe that it is common ground among us all that when representations are made they should receive a reply. Nobody disagrees with that. The question is upon whom it should be incumbent to publish the reply. If the noble Lord made a representation, one would hope that he would receive a reply from the director. If he wished to make that reply public, no doubt he is entitled to do so. But it seems rather tedious for the director to have to publish every representation that he may receive. I believe that that is the difference between us.

Lord Peston

One of the problems with democracy is that it is extremely tedious. Noble Lords are probably finding extremely tedious the interchanges between the noble Lord, Lord Strathclyde, and myself because I insist on asking the questions and, quite rightly, the noble Lord insists on answering them. The amendment deals with a matter which is merely a counterpart to what happens in this Chamber every day of the week.

I am concerned about the view which people have of our processes today. I was not able to persuade the Committee on Thursday in regard to my worries about the nature of the Bill, which I dislike. I regard the Bill as a threat to democracy. I know that the amendment deals with matters at a much lower level and there is no threat to democracy at that level. However, if representations are asked for, one should believe that one's time is not wasted by responding. I do not seek a reply which says, "Dear Sir, thank you very much for you representations. I am taking note". Your Lordships will see that the amendment refers to: bodies representative of the interests of consumers or injured parties". I should like the director to reply by saying, "I have considered your argument and I believe that it is flawed in the following way". That is exactly how the noble Lord, Lord Strathclyde, has been arguing with me this afternoon. Whether or not I agree with him, I feel that someone has considered what I have said and that I have done my job. This amendment is a counterpart to that.

I am worried that nowadays everybody is concerned only that industry should be efficient and so on and no one is concerned about the processes in our society. I know that I am being tedious, but I believe that this is a matter of some seriousness. I believe that the director should publish his response.

This is not a technocratic matter. I am a technocrat but I believe that technocrats should no longer be able to get away with saying, "This is something which will increase efficiency; end of argument". However, I have put forward my argument and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Peston moved Amendment No. 73:

Page 7, line 46, at end insert ("unless in his opinion the inclusion of that matter relating specifically to that individual is necessary for the purposes of that statement or notice, as the case may be").

The noble Lord said: I agree with the noble Lord that if I am not willing to plod through the detail of the amendments, I should have stayed on the Back-Benches and then I could have sat in the park all afternoon listening to the band. I assure the Minister that I should have been infinitely happier doing that. But someone has to do this work and on this occasion it seems to be me.

In moving this amendment, I shall speak also to Amendments Nos. 82 and 83. They deal with what should and should not be in the public domain. I accept that I have had this argument twice before: once today and once last week. Therefore, I merely wish to go on record by repeating the point.

First, I should like clarification with regard to what is in the public interest in terms of disclosure. The general point is that if people wish to make statements, they should be willing to make them in public. It is as simple as that. I beg to move.

Lord Renfrew of Kaimsthorn

Perhaps I may ask the noble Lord, Lord Peston, for one element of clarification. A few moments ago he spoke with great effect and at considerable length to Amendment No. 71 on which he urged several times with great clarity that the words "in his opinion" should be omitted. And yet Amendment No. 73 includes the phrase, unless in his opinion the inclusion", and so on. Perhaps the noble Lord will tell me why the words "in his opinion" in Amendment No. 73 are so pertinent whereas they were superfluous in Amendment No. 71.

Lord Strathclyde

At the end of this short debate, the noble Lord, Lord Peston, will have an opportunity to answer that extremely pertinent question asked by my noble friend Lord Renfrew. I was struck by exactly the same thought when I studied the amendments over the weekend, I am sorry to say. The amount of work which I have to do on the amendments knows no bounds but I am always delighted to do it.

Before I turn to the amendments, it may be helpful to explain the general background to the provisions on excision which are under discussion. In each case they closely follow the wording of existing sections in the Fair Trading Act which deal with the excision of information from MMC monopoly and merger reports. Therefore, we have direct experience of how such provisions apply in practice.

Careful consideration is given to the need for excision, whether to protect the public interest or the interests of third parties. Nearly all requests are made on grounds of commercial confidentiality. But Ministers do not by any means accept them all; at a rough estimate they probably agree to around 50 per cent.

In each case a balance needs to be struck between the harm to the public interest, individual or company that might be caused by publication and the harm that might be caused to the public interest by not publishing the information. I believe that the existing provisions have been applied carefully and properly, and I am sure that the same approach will be taken under the very similar provisions we are now proposing.

I turn first to Amendment No. 73. I would wish to remind the noble Lord, Lord Peston, that we are talking here about the private affairs^✶ of individuals, not their business affairs. The amendment would mean that the director need not have regard to the need for excluding information harmful to an individual, by taking it out of his published notice or proposal to the Secretary of State, where in his view that was necessary to understand the notice or proposal.

The existing text of subsection (2) in New Section 56C closely follows the wording in Section 82(1) of the Fair Trading Act, which applies to the publication of MMC reports. The director, like the MMC, must have regard to the need for excluding certain material from the published item. That includes material relating to the private affairs of an individual person, whose publication might be seriously harmful to him or her.

Therefore I do not believe that the amendment is necessary. The director need only have regard to the need to exclude such material. He does not have a duty to exclude it. It is the Secretary of State who has a duty to exclude material meeting the statutory criteria from parts of the proposal that are published, under New Section 56G(4). But the Secretary of State must also ^✶For the clarification of the meaning of "private affairs" of an individual, see Official Report, 20/7/94; col. WA2. weigh the harm that would be caused to the individual by publication, against the harm that would be caused to the public interest by failure to publish. The existing, very similar provisions for publication of MMC reports have operated smoothly. I am not aware of any cases where information vital to understanding a report has been omitted.

Amendment No. 82 proposes that if the Secretary of State excludes material from the published statement of facts and adverse effects of the monopoly situation, on grounds of public interest under Section 56G(3), he must specify the nature of the public interest involved. Again, the provisions on exclusion of material reflect the provisions which already exist on exclusion of material from monopoly and merger reports. I can assure the Committee that it is rare to make exclusions from MMC reports on these grounds.

I do not see what useful purpose would be served by requiring the Secretary of State to specify the nature of any public interest justifying exclusion. Clearly, the kind of issues that spring to mind are those of defence or national security. But in such cases I imagine it would be obvious, from the context and nature of the exclusion, that precisely those aspects of the public interest were at stake. Why oblige the Secretary of State to state the obvious? Alternatively, it is possible that issues of national security or defence may be at stake, without that being obvious from the nature of the exclusion. In those circumstances, the effect of the amendment could negate the purpose of the excision and damage the public interest.

Amendment No. 83 would force the Secretary of State to publish information harmful to private individuals or commercially damaging to companies, even if there was no public interest in publication. There would be a public interest in publication if, for example, such information was necessary in order to understand the published statement of the facts and adverse effects of the monopoly, or the undertakings accepted. Besides doing direct damage to the interests of third parties, the amendment might deter others in future from letting their views be known if damaging information were to be released.

I do not think that any of these amendments would assist. I believe that the provisions which we have laid out provide the right balance between protecting the interests of individuals and companies, and ensuring the proper dissemination of information to the public. I hope, on that basis, that the noble Lord will withdraw his amendments.

Lord Peston

I thank the noble Lord. I must say that I have learnt quite a lot from his reply. I am doubly indebted to him because, first, I did not know that only 50 per cent. of such representations were responded to. It is useful to have that on the record. Secondly, we are discussing fair trading and competition matters. I did not realise that defence and those kind of matters were underlying this kind of provision. As someone who in an earlier existence was involved with drafting such legislation, I cannot recall that I had anything like that in mind at all. Therefore I am quite intrigued that the latest argument is that one cannot reveal something to do with a restrictive practice because some nuclear submarines might suddenly be exposed to a foreign threat, or something like that. However, there are never any limits to the arguments that the most brilliant of our officials can dream up in order to justify something. I am most impressed that standards are kept as high as that.

I am also interested to know that private affairs—I ask the noble Lord to confirm this—are known legally (this is all to do with law) to be a different concept from business affairs. I had assumed under private affairs one included a person's business affairs. I was not worried about what people might be getting up to in private: I was simply worried about open government. But can the noble Lord tell me whether private affairs and business affairs are concepts known in law and known to be different from each other? If he cannot tell me that, perhaps he will ask one of his officials to write to me.

I hope I may now explain the wording to the noble Lord, Lord Renfrew. Subsection (8) on page 7 of the Bill states—and this is the point— In this section, references to an appropriate manner, in relation to the publication of a notice by the Director, are to such manner as he considers most suitable for the purpose of bringing the notice to the attention of persons". The relevant words are as he considers most suitable". There is already reference to the director and what he needs to do. That is why the words "in his opinion" are otiose, apart from in relation to the point made by the noble Lord, Lord Strathclyde, which is that somehow this is the key which turns off judicial review, and who are we laymen to argue, so to speak. But I was simply viewing this as a piece of continuous English. As regards the words "he considers most suitable", is he going to consider most suitable something that is not in his opinion? That is why the words "in his opinion" appear in my amendment, because under that proposal the director has to take a view. That is why I included those words. Therefore I do not believe that there is any inconsistency in my proposal. I hasten to add that my phrase "in his opinion" was not included for the sake of problems of judicial review, which is a subject that, as I have pointed out to the noble and learned Lord, Lord Hailsham, I do not understand.

I have one final point to make as I do not wish to be too critical of the Government. I am fully aware that this kind of stuff goes into legislation all the time. One of the reasons I raise this matter is that I think there is some kind of memory bank in Whitehall and that in the middle of every Bill staff in Whitehall throw in some paragraphs of the kind we are discussing. I imagine the computer has a programme which states "Put in the secrecy/private interest clause at this point". The computer goes "ping" and the draftsmen put it in. No one does any thinking on that matter: it is just taken for granted that one bangs the thing in. Therefore it is increasingly the case that legislation is being written automatically. I do not criticise the Government because this has been happening for some time. I simply think that someone ought to get up occasionally—in this case it is poor old me—and query why we constantly just bang this stuff into legislation in what I regard as a somewhat unthinking manner. However, as always, the Committee has given me more than a fair run for my money and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Peston moved Amendment No. 74:

Page 8, line 31, at end insert:

("(5) Any modifications accepted by the Secretary of State under subsection (4) above shall be subject to the procedures for the consideration of representations set out in section 56B(6) (8).").

The noble Lord said: The noble Lord, Lord Peyton, referred to the tremendous foresight of the noble Lord, Lord Strathclyde. He cannot apply that to me as I thought that we were going to stop at Amendment No. 73 and go to eat. I am slightly taken aback to find that I am dealing with Amendment No. 74.

The point of Amendment No. 74 is simply—I think I can both make the point and do the Minister's reply for him—that if the original procedure makes sense, which involves all the processes of considering the provision, consultation and other such processes, if the Secretary of State then makes some modifications, what is there in the nature of the case that would cause one not to need to go through all the procedures again to discover people's views? I do not understand, and I ask the noble Lord to justify it. If it was okay on the first occasion, should this not be an iterative process? There is a feedback here to the Secretary of State who modifies what has been proposed, but should he not then ask people about it again? I accept that this, unfortunately, prolongs the process, but if it was okay to do it in the first place, why does it cease to be okay in the second place? I am just interested in the logic of the Government's position here. If it were logical to do it once, why is it not logical to do it twice, or, I have to add, several times? I beg to move.

Lord Strathclyde

The noble Lord, Lord Peston, may be surprised to hear that there is more logic in this than initially seems to be the case. The Secretary of State is enabled in this new section to make any final adjustments to the undertakings as he is ultimately responsible for accepting them. He may wish, for example, to modify the detail of reporting arrangements to the authorities or to adjust the timing for compliance with undertakings slightly. I believe that it must be right that he should be able to do so without embarking on the whole process of consultation again, which would actively work against the interests of increasing competition as much as it might work in its favour. It would be clear whether modifications had been made because the draft and final undertakings must be published.

The amendment is also unnecessary because if the changes which are made by the Secretary of State were so substantial as to change the nature of the undertakings they could no longer be termed a modification of the undertaking proposed and the director would have to make a fresh proposal from scratch if he wanted to proceed.

I hope that that is clear to the noble Lord and that he will feel happier than he was a few moments ago.

Lord Peston

Again, the noble Lord has been immensely helpful. It had not occurred to me, and I thank him for placing it on the record, that if the modifications were substantial one would have to go through the process again. My amendment assumed that modifications were of a substantial nature and would therefore go through. I take it that the Minister is saying that, if as a result of going through the first procedures the modifications are significant, the Bill requires that one would have to go through the original consultations and representations again. I shall have to think about that, because I cannot see anywhere in the Bill a distinction between large and small modifications. The amendment assumed that the modifications concerned would be major modifications. Minor modifications would not concern me at all.

If the Minister will bear with me, I shall go away and scrutinise the Bill to see where it makes a distinction between large and small modifications and where within the Bill large modifications require repetition of the representation and consultation procedure. At present I cannot see it anywhere.

I thank the noble Lord for his reply, which was particularly helpful. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

7.p.m.

Viscount Goschen

I beg to move that the House do now resume. In moving the Motion I suggest that the Committee stage begin again at eight o'clock.

Moved, That the House do now resume.—(Viscount Goschen. )

Lord Simon of Glaisdale

I intervene only to point out that 50 minutes were spent on the Statement and to ask the noble Lord the Whip what rearrangement has been made of the business on this Bill in consequence.

I did not intervene earlier because I could not relate that point to any amendment that was being moved. Also, during the debate on the Child Support Bill of notorious memory, the Government put in two Statements on a Thursday during the Third Reading of the Bill. As a result the second of many government amendments was not reached until after six o'clock. When we complained about that we were promptly deprived of our supper adjournment. I wanted the noble Lord the Whip to commit himself to supper before I made this protest, if it can be called such. It is purely platonic, because the noble Lord, Lord Williams, genially said that he would not think ill of me if I left before the end in any event.

Viscount Goschen

I note the noble and learned Lord's enthusiasm for the dinner break, which I am sure is shared by noble Lords around the Chamber. It is my understanding that we still intend to complete the business which has been scheduled for today.

Lord Peston

Perhaps I may intervene to say that I am very sympathetic to what the noble and learned Lord, Lord Simon of Glaisdale, said. We often plan the business in order to ensure that important matters are dealt with at certain times. When I tried to work out what we would debate today I was unaware that we would also have a Statement. This is not the time to raise the matter and I do not want to ruin the dinner hour, but I am delighted that the noble and learned Lord, Lord Simon of Glaisdale, has placed this query before us. I believe that at some point we may wish to consider it further.

On Question, Motion agreed to.

House resumed.