FEES (Hansard, 8 July 1998)

§ Mr. Boswell
I beg to move amendment No. 5, in page 27, line 39, at end insert— '(1A) a fee charged to a business for the discharge of functions by the Director shall not exceed the costs of fulfilling that particular function in that case.'. I am conscious of a rather unsatisfactory discussion in Committee about the charging of fees, during which the Under-Secretary of State made it quite clear that the Government had not yet decided whether to charge fees or what they would be. As my hon. Friends said, that made it difficult to see whether the fees that might be charged had been taken into the compliance cost assessment, about which we have considerable reservations.
The amendment cannot be contested in principle. It seeks to ensure that in charging fees—we do not at this stage reopen the question whether fees would be charged—the director should not exceed the cost of fulfilling the function for which the fee is charged. That is basic natural justice and proportionality, and I have two points to support it, the first of which is at the macro level. It is important that the competition legislation and the suite of advice and fees to be charged by the director should not be used, to use the phrase in schedule 3, as a revenue-producing monopoly. The idea is not to charge greater amounts than the costs would require.
The second point is at the micro level and, in a sense, it is embodied in the amendment. It would be possible for the regulator to produce a schedule with a discriminatory 1196 function. For example, if the director or the Government prompting him were to take against the press or pharmaceutical companies or public utilities, the fees schedule might be arranged in a way that would discriminate between those businesses, or one of them, and other businesses that requested services from the director. Those services could be of more or less the same character and involve approximately the same cost.
As I have said, the amendment seeks to establish the principle that fees should not exceed the costs of the case, although it leaves open the principle that the fees could be lower—they could be rebated—or might not be charged at all. I hope that Ministers will consider those matters and give some assurances on them.

§ Mr. Ian McCartney
When we discussed the issue of the director's fees in Committee, it was recognised that it can be appropriate to charge fees when a genuine service is provided by the public sector. It was also recognised that fees for the giving of guidance and decisions might be a way of managing the director's work load in concentrating resources on where they are most needed and discouraging frivolous applications. However, the Government have not decided whether fees should be charged, still less the basis on which they might be set. I cannot accept the amendment because, if we decide the director should charge fees, it would narrow the range of options for calculating them. In particular, it would contradict subsection(2)(a), which provides that the rules may in particular provide for the amount of any fee to be calculated by reference to matters that may include (i) the turnover of any party to an agreement and (ii) the turnover of a person whose conduct the Director is to consider". That provision was inserted by an amendment in another place because some respondents to the consultation exercise had argued that it might be appropriate to set differential fees for applicants to the director, based on their ability to pay.
I do not suggest that that is the basis on which any fees will be charged. As I have said, we have not taken any decision on whether fees will be charged, or how any fees would be calculated, but I do believe that it is an option which the Bill should make available. I recall that, in Committee on 11 June, the hon. Members for Eastleigh (Mr. Chidgey) and for Daventry (Mr. Boswell) raised co ncerns about the burden of fees on small companies, and the hon. Member for Daventry recognised the value of being able to consider the possibility of relating the fees to the size of the undertaking. However, I can give some assurances about the exercise of the power to charge fees.
First, the Bill will enable fees to be set only at a level intended to cover the costs of the director in providing the particular services to which they relate; the fees could not be set at a level designed to generate a profit. Secondly, as any fees would be set by the director's rules, they would have to be consulted on, by virtue of clause 51(3). Business will therefore have an opportunity to consider and comment on the amount of any fees and the basis on 1197 which it is proposed to calculate them. I hope that that helps the hon. Member for Daventry in his consideration of whether to withdraw the amendment.

§ Mr. Boswell
Although I am not entirely satisfied by that response, in the light of the assurances that the Minister has been able to give at this stage, I beg to ask leave to withdraw the amendment.