COMPETITION BILL (Hansard, 22 January 1980)

§ Mr. Tebbit
Although it is a pity that we have not been able to introduce our amendment in this House, I am sure that it will be thoroughly considered in another place. I hope, therefore, that the House will be satisfied on those points, although I may not have satisfied the hon. Member for Workington on the problems that he raised. I believe that they are not as great as he expects, but there is no reason why we should not continue to encourage competition wherever we can, although we must beware of removing all restraints on leases, for example, on business leases, many of which are welcome to all parties, including the consumers.

§ Mr. Campbell-Savours
On what basis?

§ Mr. Tebbit
For example, in a new town it could well be held to be a restraint to insist that a particular site was not available for any company other than one of the major chains to come in and help promote the entire shopping centre. I believe that the same is probably true of some of the precincts in neighbourhood shopping centres in new towns. I do not believe that we should assume that everything is quite as black and sinister as the hon. Gentleman supposes.

§ Mr. John Fraser
The hon. Gentleman's remarks about an amendment concerning caravans are welcome. He will know that for a long time I have tried to bring about an improvement in that area. The licensing of caravan sites and certain other uses of land are highly restrictive and anti-competitive. It is clearly anticompetitive and anti-social to tie the use of a site to the purchase of a caravan from the site owner. It operates against those, incidentally, who spend their holidays in this country, and that is also a bad thing.
My hon. Friend the Member for Workington (Mr. Campbell-Savours) made the point about the user clause in leases, and that is a serious problem, which I realise is not easy of solution. Such occupations as a fell monger, a tallow dealer or a slaughterer would not be welcome in Marylebone High Street or next door to any of us. However, there remains a problem. There is not even a right to change the user to another reasonable user or incidental user.
It might be possible for the Department of Trade to examine the problem with whichever other Government Department is responsible and consider revising the Landlord and Tenant Act 1927. If a lease has a provision that it cannot be assigned, that Act reads into the clause that consent to an assignment shall not be unreasonably withheld. There could be a change in the law so that where there is an absolute prohibition on a change of user it shall be implied in a business lease that a request for change of user will not be unreasonably refused. That might be the solution. It would leave the landlord with his discretion, and it would introduce a degree of flexibility that operated in favour of the kind of user that my hon. Friend the Member for Workington mentioned—the business man who wants to change his trade because of a change in trading patterns.
I have come across leases which provide that premises can be used only as a dairy and which were drawn up at a time when butter was ladled out and people bought their milk from cans. That is a user clause that is wholly obsolete and the continuation of which would be a totally unreasonable restriction on ability to trade.
342 The solution may lie in amending the Landlord and Tenant Act in that respect. Can the Minister undertake to consider that? I do not ask him to take action, because he needs the consent of other Departments. It is a problem that has so far defied solution, but a solution might lie in that direction.

§ Mr. Tebbit
I am grateful to the hon. Member. I assure him that my respect for his knowledge in this area is considerable and, therefore, when he makes a suggestion such as he has just made, springing from his experience as a Minister and his interest in housing matters and the relationship between landlord and tenant, I am bound to take it seriously.
I am willing to undertake to ask my officials to think about what he has said and consider the possibilities of proceeding in that direction. But one encounters a veritable thicket when one proceeds along the lines that have been discussed this evening.

§ Mr. Tebbit
I beg to move amendment No. 5, in page 3, line 2, leave out 'particular persons or' and insert 'a particular class of persons or to'. I can be much more positive about this amendment and move i1 formally. I believe that the House will accept it because it is very sound.

§ Mr. John Fraser
I beg to move amendment No. 9, in page 3, line 32, at end add— '(9) In subsection (1) of this section the words "in the course of business" shall be taken to include the acquisition of goods or the securing of services by a local authority, health authority or other person notwithstanding that the person so acquiring or securing does not otherwise act in the course of business.'. This amendment, which was moved in Committee, deals with the problems of local authorities with restricted tender lists. I give one example which came to me in my capacity as a solicitor. A local authority has a limited list of tenderers 343 for demolition contracts. A man, who represents himself as being a highly competitive demolition contractor, finds that he is on the lists of many local authorities but not on the list of a particular authority. He complains that he could introduce an element of competition to that particular trade which, he alleges, is absent. I am no judge of whether he is right or wrong, but that is not the point. From that example I began to realise that there are many occasions on which local authorities—perhaps as a result not of malice but of lack of thought—restrict their lists of tenderers. Perhaps they have historic lists and do not wish to add to them or vary them. That can be an inhibition on competition and can operate against the interests of the ratepayers in the borough.
I have tabled this amendment to ensure that tender lists and like trading arrangements are open and competitive. The amendment is necessary because the Bill talks about a person acting in the course of business. A hospital authority or a local authority may discharge many of its functions not in the course of business—they are purely social or welfare functions. However, the purchasing power of such authorities is highly relevant to the commercial atmosphere, and that is why the amendment is necessary. If the amendment cannot be accepted in the terms in which it is drafted, perhaps the Minister can say something helpful about what might happen elsewhere.

§ Mr. Tebbit
I think I can make some helpful noises. In Committee, when we discussed amendment No. 13, which was identical to this, my right hon. Friend said that she was ready to look at its principle. Although we are not yet ready to come forward with a Government amendment, I can tell the House our general policy in this area and I can assure the hon. Member that we intend to bring forward an amendment to give effect to it in due course.
We accept that the acquisition of goods and services by local authorities should be brought within the scope of this part of the Bill. However, there is one important point that has delayed the drafting of our amendment to which we shall wish to give further careful thought. This relates to the use of selective tender procedures. We do not wish to extend the scope of 344 the Bill in such a way that the principle of selective tenders is in any way undermined.
In theory and in practice, they can be useful in the interests of economy and of securing reliability and quality, and as such the practice has been encouraged by successive Governments. However, selective tender procedures are capable of being abused. They may be unnecessarily restrictive or they may in certain cases be operated very cosily to limit competition, or worse—that is the point which the hon Gentleman makes. We want such abuses to be capable of being examined. The distinction is not one that is easy to incorporate in legislation, so we still wish to consider precisely how to proceed.
I hope that in the light of what I have been able to say—because once again I think that hon. Members on both sides of the House are pointing generally in the same direction—the hon. Gentleman will be able to agree to ask leave to withdraw his amendment.

§ Mr. John Fraser
I beg to ask leave to withdraw the amendment.