HC Deb 11 June 1982 vol 25 cc533-7

'.—(1) No account shall be taken of any restriction to which this section applies for the purposes of the Restrictive Trade Practices Act 1976, and no agreement shall so far as it relates to any such restriction be unenforceable by virtue of any rule of law about unreasonable restraint of trade.

(2) This section applies to restrictions of any of the following descriptions which relate to the trade between states which are Contracting Parties to the Code and are accepted within the framework of a conference, that is to say—

  1. (a) restrictions in respect of the provision of international liner services accepted by the operators of such services under an agreement to which two or more such operators are parties;
  2. (b) restrictions in respect of international liner services accepted by operators of such services or persons for whom such services are provided under an agreement to which one or more such operators and one or more such persons are parties;
  3. (c) restrictions in respect of the supply or acquisition of any service in connection with the operation of international liner services accepted by operators of such services or persons in the business of supplying such a service under an agreement to which one or more such operators and one such supplier are parties.

(3) Where a restriction relates only in part to the matters mentioned in subsection (2), this section applies to the restriction so far as it relates to those matters.

(4) For the purposes of paragraph (a), (b) or (c) of subsection (2) it is immaterial that there are other parties to an agreement in addition to those mentioned in that paragraph, except that paragraph (c) does not apply where the parties to an agreement include more than one such supplier as is mentioned in that paragraph.

(5) If provision with respect to any such service as is mentioned in subsection (2) is made by order under section 11 or 12 of the Restrictive Trade Practices Act 1976 (under which provision may be made as respects the application of the Act to restrictive agreements or information agreements as to services), provision may also be made by order under that section for such consequential modifications of this section as appear to the Secretary of State to be appropriate.

(6) Without prejudice to subsection (5), this section shall, so far as it relates to the Restrictive Trade Practices Act 1976, be construed as one with that Act.'.—[Mr. Sproat.]

Brought up, and read the First time.

Mr. Sproat

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

Hon. Members will remember that reference was made at earlier stages in the Bill to the interaction of the code's provisions and other domestic competition laws. The new clause is intended to make certain that there will be no conflict between the Bill and such law, in particular the Restrictive Trade Practices Act 1976 and the common law doctrine of restraint of trade. At present an exclusion for certain types of agreement relating to international sea transport services from the Restrictive Trade Practices Act 1976 is contained in paragraph 2 of the schedule to the Restrictive Trade Practices (Services) Order 1976. The paragraph deals with three types of agreement: first, agreements between shipowners, secondly, agreements between shipowners and shippers and thirdly agreements between shipowners and a supplier of ancillary services.

The limits of such excluded agreements are tightly drawn. Agreements are required to be between only certain parties and to contain only certain restrictions. If those limits are exceeded, the whole agreement becomes registrable under the 1976 Act, including restrictions relating to international sea transport services.

Building on the foundation of the present exclusion for agreements relating to international sea transport services, the new clause enables restrictions relating to codist trade, accepted within the framework of a conference, to be separated from the rest of the agreement and to be disregarded for the purposes of the 1976 Act. If the agreement exceeds the limits of the exclusion in paragraph 2 of the 1976 services order to which I referred, it would still be registrable under the 1976 Act, but the codist aspects would not be subject to the sanctions of the Act in that way. Any breach of our international obligations in relation to the code that could be caused by the automatic operation of the 1976 Act is avoided. With the same objective the amendment also excludes the corresponding common law of restraint of trade.

Mr. K. J. Woolmer (Batley and Morley)

I echo what has been said already this morning—that, while we can understand the position in which the Minister found himself, it is unfortunate that matters of such complexity and, in the case of this clause, of considerable substance, should be brought forward at this late stage with such little notice and such little time for the House to consider them.

The new clause was published only on Tuesday. Given its significance, surely we should have had longer to consider this important matter. However, I do not complain that important and necessary changes are made to ensure that the legislation reflects the wishes of the House, but rather that this is part of a procedure which, over the past three years, has started to form a pattern.

The Brussels package was agreed on 15 May 1979 It enabled both this Administration and the previous Administration to agree, however reluctantly, to go along with this proposed legislation. However, to conclude only three or four days before Report that it is important that the relationship to the restrictive practices law should be got right, is unfortunate.

Committee Members will know that the whole question of the relationship between the formalisation and important heightening of the profile of the restrictive practices in international shipping to competition and to the proper interests of the shippers and consumers of shipping services, was very much to the forefront of the Committee's mind. I am sure that the Minister will agree that this is a matter of mutual concern to all hon. Members. With your permission, Mr. Deputy Speaker, I shall reserve my comments on those important matters for new clause 3 so that I do not repeat myself.

Although I enter that strong reservation about the way in which we have been considering the adequacy or otherwise of the restrictive practices law in Britain in relation to this important Bill, I shall not oppose the clause. If, after careful scrutiny, amendments are found necessary in another place it will give us the opportunity to reconsider the matter.

Mr. Higgins

We are entitled to an explanation as to why the new clause appeared suddenly at this stage. We understand the point that the Minister made about the previous clause in relation to proceedings in Committee, but the relationship of the Bill to the Restrictive Trade Practices Act 1976 and generally to monopolies legislation must have been considered in the greatest detail over many years. We really should have had the clause earlier.

None the less, will the Minister clarify two points? I understood him to say that some of the practices would be registrable with the Registrar of Restrictive Trade Practices despite the clause, though not enforceable. Will he say whether that is so and what practices he has in mind?

Secondly, the Minister said that if a conference went beyond the strict confines of the exclusions from registration and enforceability that are granted by the clause, the full weight of earlier restrictive trade practices legislation would apply. I am not clear what restrictive trade practices he has in mind. Will he give an example, falling within the circumstances that he has described, of a conference practice going beyond the exclusions granted under the new clause which would bring upon it the impact of the existing restrictive trade practices legislation?

Mr. Ginsburg

I rise only briefly to associate myself with the comments that have been made by the hon. Member for Batley and Morley (Mr. Woolmer). It is difficult for the House to form a considered view of new clause 2. If one were minded to be obstructive—and one is not—it would be easy to ask the Minister what discussions he has had with the Law Officers and why a Law Officer is not here to brief hon. Members on the problem.

I content myself with leaving the Minister with two questions, which, if he does not wish to answer now, he might ensure are dealt with in another place. Apart from the problem of the Restrictive Trade Practices Act may I ask whether monopolies legislation applies in such agreements? I am literally thinking aloud. It could be that the exemption that he has given is not sufficiently widely drawn.

I put my next question in general terms, because it can perhaps be discussed later. Although the clause appears to deal with the problem of the British end of the conference, what is the position of a foreign carrier if he finds himself, unlike his British counterpart, in breach of the Restrictive Trade Practices Act 1976?

With those comments, I am prepared to recommend that we accept the clause.

Mr. Michael Shersby (Uxbridge)

I endorse the remarks of my right hon. Friend the Member for Worthing (Mr. Higgins), and the hon. Members for Batley and Morley (Mr. Woolmer) and Dewsbury (Mr. Ginsburg). This morning we are considering an important new clause of great complexity which hon. Members have had only four days to digest. The House has this week considered not only the Falkland Islands crisis, but many hon. Members, myself included, have spent two nights considering the complexities of the Northern Ireland Bill. Due to our assiduous attention to that measure, it has proved difficult to absorb the mind-boggling complexities of the clause.

As the hon. Member for Batley and Morley pointed out, that is partly due to the procedures of the House. However, I agree with my right hon. Friend the Member for Worthing that it is extraordinary that after years of consideration the House should be given four days' notice to accept a new clause that has such profound implications. It is not good enough to rely simply on our colleagues in the other place to pick up all the problems that may arise. It is not good enough to hope that they will be dealt with in the other place. Once the Bill leaves this House, our control is greatly diminished, no matter what communications we may have with the other place.

10 am

I greatly regret that it has been necessary to deal with such a complex matter in this way. The Bill's ramifications have been considered, and not only in Committee, for many months. During that time, consultations took place between the Department of Trade and interested parties representing a wide spectrum of interests in the City. During that consultative period we did not have any opportunity to consider such extremely important legal matters. Therefore, it is right to register our protest this morning. After all, we may be considering one of the most extraordinary measures for several years. Hon. Members on both sides of the House have expressed considerable reservations about it. Although I pay great tribute to the way in which my hon. Friend the Minister dealt with these matters in Committee and elsewhere, I am sure that he realises that we are concerned that we are being bounced into nodding through a difficult and complex new clause. Therefore, I share the feelings that have been expressed by other hon. Members. We are entitled to a fuller explanation than we have received.

Mr. Sproat

I shall begin by dealing with a point that was raised with the hon. Member for Batley and Morley (Mr. Woolmer), and which has been referred to by other hon. Members, about the procedure in such matters. I am not so long departed from the Back Benches, or so recently arrived on the Front Bench, as to have forgotten the intense irritation felt by Back Benchers about the suddenness with which a new clause can be presented to the House. I agree that it is unsatisfactory to introduce it at such short notice. It is also unsatisfactory that the House should work by suddenly telling hon. Members that a measure must be debated, perhaps two weeks ahead of time, and that everyone should run round saying that a measure must be brought before the House because it is our only chance.

My right hon. Friend the Member for Worthing (Mr. Higgins) mentioned giving a rocket to officials. I do not intend to pursue that advice in great detail, but I shall discover why it proved necessary to introduce this measure at such a late stage, without more warning. However, the general reason is that Committee stages bring out new points. Rightly or wrongly, the Government thought that the consultations had made matters clear. In Committee, it became obvious that they were not clear. In response to my right hon. Friend's first point, I should point out that if there were restrictions that did not relate to codist trade or international sea transport services, they would be registrable under the 1976 Act. He asked for a specific example of the sort of thing that I had in mind. Under the order, matters are tightly drawn to the precise supply of international sea transport services. If two parties were, for example, to go beyond that and to start placing restrictions on the secretarial services that they should use, or on those who should clean the vessels, and so on, they would be in breach, and would fall foul of the restrictive practices. That is the type of thing that might apply and vitiate the whole agreement.

Mr. Higgins

Would a restriction that said that members of a liner conference should only use a particular port be registrable?

Mr. Sproat

I think not, but I shall check. I think that that would apply directly to the provision of international sea transport services. However, I shall check and let my right hon. Friend know the answer.

The hon. Member for Dewsbury (Mr. Ginsburg) asked whether foreign carriers could be included. If they are members of a conference, the answer is "Yes". I accept the point made by my hon. Friend the Member for Uxbridge (Mr. Shersby). Being fairly new to the job, I am not sure whether all Governments find that they cannot get out of such a situation or whether the Department was at fault in not seeing the problems earlier and letting the House know. However, I understand the strength of his feeling.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

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