PRINCIPLES TO BE APPLIED IN DETERMINING QUESTIONS

HC Deb 08 July 1998 vol 315 cc1201-4

Mr. Lansley

I beg to move amendment No. 61, in page 31, line 40, leave out from 'concerned)' to end of line 43 and insert 'the provisions of this Part are applied in a manner which is consistent with the application of the corresponding provisions of Community law.'.

Mr. Deputy Speaker

With this, it will be convenient to discuss the following amendments: No. 62, in page 31, line 44, at beginning insert 'Subject to the other provisions of this Part,'. No. 63, in page 31, line 44, leave out 'determines a question' and insert 'deals with a matter'.

No. 64, in page 31, line 45, leave out from 'act' to `whether' in line 1 on page 32.

No. 65, in page 32, line 4, leave out 'determining that question' and insert 'dealing with that matter'.

No. 66, in page 32, line 6, leave out from 'time' to 'Community' in line 7 and insert 'dealing with a similar matter under'. No. 67, in page 32, line 13, at end insert— '(4A) Subject to subsection (4B), where any question arises concerning the interpretation of this Part and, in particular, whether for the purposes of this section—

1. (a) a provision of Community law is a corresponding provision,
2. (b) a relevant difference exists between a provision of this Part and a corresponding provision of Community law,
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3. (c) a matter arising under Community law is a similar matter, or
4. (d) a decision or statement of the Commission is a relevant decision or statement,

any person with sufficient interest in the matter to which the question relates may apply to the relevant court for the determination of that question and the court may determine that question and make such declaration as it considers appropriate. (4B) Where any question concerning the interpretation of this Part arises in proceedings before an appeal tribunal, an application for the determination of that question by a relevant court in accordance with subsection (4A) may only be made with the leave of that tribunal. (4C) In subsections (4A) and (4B) "relevant court" means—

1. (a) in England and Wales, the High Court;
2. (b) in Scotland, the Court of Session;
3. (c) in Northern Ireland, the High Court.'.

No. 68, in page 32, line 18, at end insert— '(7) In this section "a provision of Community law" includes the general principles of Community law and decisions of the European Court.'. New clause 3—Decisions on matters subject to a Commission investigation— '.—(1) Subject to subsection (3) below, the Director shall not make a decision that—

1. (a) an agreement infringes the Chapter I prohibition; or
2. (b) conduct infringes the Chapter II prohibition, if that agreement or conduct is the subject of an investigation by the European Commission under a provision of Community law relating to Article 85 or 86.

(2) Nothing in this section shall prevent the Director from conducting in respect of that agreement or conduct—

1. (a) an investigation in accordance with section 25; or
2. (b) a Director's investigation or Director's special investigation within the meaning of Part II.

(3) If the Director has grounds to believe that the European Commission will conclude that agreement or conduct to which subsection (1) applies will not be found to be within the Commission's competition law jurisdiction, he may proceed to make a decision under sections 14 and 22.'.

Mr. Lansley

At this late hour, the House will forgive me if I do not explain the arguments in their full form—the 18-page version. Earlier in the debate, the Minister was at pains to say that the Government believe that it is important to respond to representations—not least from the Confederation of British Industry, for example. He will be aware that, like my hon. Friends and members of the public, the CBI is very concerned that the provisions in clause 60 will have to be better defined in the legislation if the Government's intentions are to be realised accurately. We essentially believe that the issues should be better defined in legislation rather than waiting for the courts to do the job.

The matters of "corresponding question" and "relevant difference", for example, have not yet been defined in the Bill. If the Government's intention is to align UK and Community law as closely as possible, they should be able to tell us what constitutes the relevant differences. Otherwise, over time, the principles may begin to diverge again. For example, clause 60 deals with incompatibilities. Will the Government list them? Where do the Government expect the Bill to depart from European Community law?

In respect of the purpose of amendment No. 61 and the others grouped with it, I am attempting to do the Government's job for them. If we cannot have the legislation that we want, we may as well amend the Bill to achieve the secondary objective of which industry is seized—clarity and certainty. We will end up with lack of clarity and uncertainty if we proceed with clause 60 without knowing what the corresponding questions are and how they are to be determined. The clause should be amended so that all the provisions in the Bill are treated as corresponding in effect. We should not have relevant differences—those that exist should be specified. Instead of including phrases or provisions from Community law, we should replace corresponding provisions or inconsistency with a much clearer definition.

Amendment No.67 is additional and stands alone. It seeks to provide a better mechanism for determining the issues that arise on clause 60 by permitting a person with sufficient interest in the matter to apply for a determination by the relevant courts so that a declaratory ruling may be obtained.

I have provided an unsatisfactory explanation of a matter on which I could have spent considerable time. I am concerned that so far—even in Standing Committee—Ministers have not examined clause 60 sufficiently. The phraseology used in the clause opens up precisely the differences between UK and EC law to which they objected in other respects. It should have been replaced by a provision that aligned the two systems of jurisprudence instead of one that served the Government's purposes without telling us in what respect they envisaged that the relevant differences and incompatibilities would emerge over time.

Mr. Ian McCartney

First, I thank the hon. Member for South Cambridgeshire (Mr. Lansley) for his constructive approach to the matter. I accept that, because of an agreement to complete proceedings on the Bill within an appropriate time, neither he nor I will be able to set out in detail why he feels the amendments should be accepted and why I would resist them. Therefore, I shall write to him setting out the points that I do not have time to make tonight so that he can consider them before the Bill returns to the House. That is inviting opportunities, but it is only fair to the hon. Gentleman and to myself.

Clause 60 is important. It exists to ensure that, as far as possible, UK and EC prohibitions are interpreted and develop consistently with the EC competition law system. That is critical in minimising burdens on business.

Although I welcome the spirit of the amendments, I cannot accept that they would improve the wording of the clause or the operation of the regime and I am happy to explain briefly why that is the case.

Amendment No.67 is significant as it introduces a new and separate step into the operation of the Bill—the right to apply to the High Court, or the equivalent in Scotland and Northern Ireland, to determine questions. The questions include whether a provision of Community law is a corresponding provision; whether a relevant difference exists between UK and European law; whether a matter arising under European law is similar and whether a decision or statement of the Commission is relevant.

The amendment is wrong in principle. It appears to be based on the mistaken view that there is a choice of law between UK and European systems and that the choice should be made even before the substance of a case is addressed. There is no such choice of law. There are not two rival sets of principles. There is but one set of principles. Accordingly, interpretation of the Bill is not a two-stage process. One cannot construe the prohibitions and then compare them. They must be construed from the outset on the basis of clause 60.

The Government have made it clear on a number of occasions that it would be wrong to allow appeals on interim stages of the decision-making process. If we allowed appeal at every step of way, we would end up in an interminable process. The appropriate course is to allow the director to make a decision and to confine appeals to substantive decisions. Those arguments apply in this context.

The hon. Member for South Cambridgeshire also tabled amendments Nos. 62 to 66. We believe that we have followed the right formulation and approach in clause 60. I shall give the hon. Gentleman a more substantive reply on the amendments in writing, and hope that he will feel able, even given this stilted debate, to fight another day.

New clause 3 covers similar ground to the subject of the discussion in Committee of various amendments to clause 42, especially the then proposed new clause 12. The amendments were broadly concerned with avoidance of forms of possible double jeopardy, where agreements or conduct may fall both within the scope of domestic prohibitions under the Bill and European prohibitions under articles 85 and 86 of the treaty. It will probably come as no surprise to the House that we do not see any need to alter the Bill's provisions for dealing with parallel jurisdiction, particularly in investigations.

More particularly, I reiterate that, when the Commission is actively investigating an agreement or conduct, there will be no practical point in the director's starting a separate investigation. The practical assurance of unnecessary duplication of investigation between the Commission and the director is achieved by the alignment of the UK prohibitions with those of articles 85 and 86 and the practical co-operation that will exist between the Commission and the United Kingdom. For those and a number of other reasons, we find the new clause unacceptable. I ask the hon. Gentleman to withdraw the amendment.

Mr. Lansley

I was quite fond of new clause 3, and quite sad to forgo the opportunity to explain it in detail. In fond expectation of further communication from the Minister, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.