HC Deb 22 January 1980 vol 977 cc328-32


The Secretary of State shall in each calendar year lay before Parliament a report on the working of sections 3 to 13 of this Act and describing the resources of manpower and money devoted by his department to the cause of encouraging competition and restraining inflation.".—[Mr. Campbell-Savours.]

Brought up, and read the First time.

Mr. Campbell-Savours

I beg to move, That the clause be read a Second time.

The clause should commend itself to anyone who wants to see the Bill work. It is about the accountability of the Director General to Parliament—the machinery of prices and competition control. I am seeking to ensure that adequate resources are made available to the Department. It is by bringing the issue to Parliament and initiating a debate that we shall ensure that resources are made available. The clause will enable hon. Members to monitor the development of competition policy.

We all want the competition policy to work. It would be good if the policy on which the Government set such great store could be made to work in conditions of real genuine competition. I am sure that my hon. Friends would support the Government tonight if that were possible. We do not believe that it is possible, and that is why we ask that an annual report be placed before the House to allow us to monitor the development of the Department.

We should, perhaps, question the extent of reduction in resources that would be made available to the Director General of Fair Trading. In Committee we were told that there would be a reduction of between 40 and 45 persons in the Office of Fair Trading and 50 in the Monopolies and Mergers Commission, and that about 450 would be displaced and otherwise deployed somewhere in the Civil Service as a result of the phasing out of the Price Commission. All that is to be done at a saving of £5½ million to the Exchequer.

What I am unable to understand is why the Chancellor, in his cuts, has demanded reductions of expenditure in such a vitally important Department. If the Government's intention were to make competition policy work, surely they would have ensured that there would be no cuts in an office vital to the successful conclusion of that policy.

In Committee the Minister for Consumer Affairs assured us that adequate resources were being made available. However, during the eighth sitting she let slip the following statement: Of course, the Director General should and will consider any complaints—and on that I can assure the Committee—which seem to him to indicate an anti-competitive practice as far as it is practicable to do so within the resources that he has available in the Office of Fair Trading. I replied by saying: Finally, we have a suggestion that resources will determine whether an investigation will take place. I think this is a fairly major development because it implies that the law is applicable to some and not to others and that the law will be implemented on the basis of whether resources are available. The Minister replied with a statement about the suggestion for 10 Director Generals, which totally misrepresented my case. She continued by saying that the Director General will give due consideration to all the complaints that come to him, to which it is reasonable to expect him to give consideration".—[Official Report, Standing Committee B, 22 November 1979; c. 417–18.] In other words, it would not be so much the need for real and genuine competition policy that would determine whether an investigation took place; it would be determined in part by the amount of resources available to the Department. That undermines the whole principle embodied in the Bill—to promote the principles of competition policy.

My hon. Friends will be thinking of the parallels that exist. I am thinking of the police. When the Government allocate money to enable authorities to hire more policemen to pursue the application of law and order, that is a measure of the Government's intention on the application of law and order policies. Similarly, on competition policy—inasmuch as the Director General becomes what could be called a competition policeman—surely we can assess the commitment of any Government to competition policy on the basis of the amount of resources that they are willing to allocate to the Department responsible for policing law and order in that area.

Some may say that making the number of appointments that I wish to see available in the Office of Fair Trading could be termed an invasion of commercial freedom. It is no more an invasion of commercial freedom than the hiring of policemen in pursuit of a policy of general law and order is an invasion of individual freedom.

It is my belief that as time goes by the resources of the Department will be seen to be deficient. Indeed, the Office of Fair Trading will find that with the number of references that are made to it—certainly the Monopolies and Mergers Commission will find with the number of competition references made to it—that there will not be the level of resources necessary to carry out the kind of work that must be carried out if competition policy is to succeed.

9.30 pm

During the Committee proceedings, I for my own small part drew attention to a number of areas including the extension of credit, the abuse of hi-fi distributors, the question of leases—which I hope to raise later—the distortion of trade in the legal services, the question of profiteering and the operation of multinational companies, which was so effectively commented upon by my hon. Friend the Member for Vauxhall (Mr. Holland), who, unfortunately, is not here this evening. These are all areas that demand resources in the Department. They are all areas that demand investiga- tion by the Director General of Fair Trading. They are only a very small number of incidents and activities by various bodies which I and my hon. Friends strongly feel should be brought to the attention of the Director General, and ultimately to the attention of the Monopolies and Mergers Commission, if competition policy in this country is to work.

In many ways the Bill seems to discount the need for effective resources. By introducing the Bill, the right hon. Lady and her hon. Friends have omitted a very important factor, which is that without resources the Bill simply will not work.

I return to the new clause itself. It would ensure that each calendar year the Secretary of State would lay before Parliament a report on the working of sections 3 to 13 of the Act, describing the resources of manpower and money devoted to that Department. The effect is simple. It will ensure that an annual debate takes place in this House on the effectiveness of the Government's competition policy. It will ensure that in future, if an insufficient effect stems from the application of the Government's competition policy, changes can be introduced.

Mr. Tebbit

I am afraid that I cannot persuade myself that the new clause is necessary. The Director General is already required to present an annual report on his own activities and those of the MMC. Obviously he will include the new activities under the Bill in those reports. To some extent we have discussed that already this evening.

The new clause would merely duplicate that existing provision by requiring the Secretary of State to produce a similar report. The Secretary of State is already fully answerable to Parliament for the Government's policies in these areas. Of course, as the hon. Gentleman will know, financial and manpower matters are described in the annual Estimates and other papers that are presented to Parliament. There are opportunities for parliamentary scrutiny both on the Floor of the House and in various Committees, and perhaps not least in the new Select Committees.

The new clause is misleading in implying that the promotion of competition and the control of inflation could be the responsibility of any one Department. The Government as a whole must keep these objectives constantly in mind, and it is for every Minister in every Department to do so. To some extent, it may help the House and the hon. Gentleman if I say that there will be an increase of about 45 to 50 people working on competition matters in the staff of the OFT and an increase of the same order in the MMC. A reduction of about 530staff overall will occur in the Price Commission. We believe that the numbers we are deploying to the Office of Fair Trading and the Monopolies and Mergers Commission will be adequate to deal with the work which goes to those organisations. Naturally, like the police, they will not be able to make a full investigation of every complaint. We all know that the police cannot fully investigate every complaint; nor, indeed, can any other agency, however trivial it may be.

There may well be occasions when the Director General decides that he does not have the resources to deal with what he thinks are peripheral matters. But the resources that the Director will have at his command will be adequate to secure a great stiffening of competition policy, which is, as the hon. Member for Workington (Mr. Campbell-Savours) rightly said, the whole object of the Bill.

Mr. John Fraser

The new clause relates to resources inside the Department. Can the Under-Secretary tell us how many officials in his Department at the level of principal and above are employed to deal exclusively with competition policy?

Mr. Tebbit

I do not think that it will surprise the hon. Member for Norwood (Mr. Fraser) when I say that I cannot do that without notice. If I am able to, I will give the hon. Gentleman some indication later on, but I could not do it just off the cuff.

Question put and negatived.

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