HC Deb 08 July 1998 vol 315 cc1207-12

Amendments made: No. 33, in page 118, line 37, at end insert— 'In section 50(4), paragraph (c) and the "and" immediately before it.'.

No. 34, in page 119, line 16, at end insert— 'In section 36A(5), paragraph (d) and the "and" immediately before it.'.

No. 35, in page 119, line 49, at end insert— 'In section 43(4), paragraph (c) and the "and" immediately after it.'.

No. 36, in page 120, line 22, at end insert— 'In section 31(5), "or in subsection (3) above".

In section 31(6), "or in subsection (3) above".'.

No. 37, in page 120, line 49 at end insert— 'In section 67(4), paragraph (c) and the "and" immediately after it.'.

No. 38, in page 120, line 52, at end insert— 'Section 131.'.

No. 39, in page 122, line 4, at end insert— '() in paragraph (4), sub-paragraph (c) and the "and" immediately after it.'.

No. 40, in page 122, line 40, at end insert— '() in paragraph (4), sub-paragraph (d) and the "and" immediately before it.'.

—[Mr. Nigel Griffiths.]

Order for Third Reading read.

11.56 pm
Mr. Ian McCartney

I beg to move, That the Bill be now read the Third time.

First, I thank the hon. Member for South Cambridgeshire (Mr. Lansley) for his assistance. If he keeps it up, he may be in for a job on this side of the House. [Laughter.] This is new new Labour.

The Competition Bill is a major step forward for British consumers, business and competitiveness. It will radically reform and strengthen the laws to deal with anti-competitive behaviour, such as cartels and abuses of a dominant market position.

Both consumers and business deserve a better deal, which the Bill will deliver. The Government have acted swiftly, whereas the Conservative Government dithered for years and did nothing. Anti-competitive behaviour hits ordinary people; it means lower quality, at higher prices. Competition is vital to ensure choice and value. The vast majority of businesses that work so hard to compete also deserve better protection from the few that seek to cheat and bully.

The current competition regime is often bureaucratic, slow and ineffective. The powers for rooting out and dealing with serious anti-competitive behaviour are notoriously weak. In the meantime, customers and competitors suffer. Smaller companies have been driven out of business while complaints were investigated. Even the most blatant cartels can get away with little more than a slap on the wrist. As a result, there is very little deterrence to anti-competitive behaviour, and no recompense for firms and consumers that are on the receiving end of it.

The Bill will put those failings right. The Director General of Fair Trading will be able to act swiftly to stamp out anti-competitive practices. Those on the receiving end of such practices will have new rights to seek damages. Moreover, the Bill will sweep away the existing bureaucratic restrictive practice laws, which require many thousands of harmless commercial agreements to be registered.

The Bill modernises our competition law to bring it more in line with the prohibition regimes that already operate in the European Union and in many of the Organisation for Economic Co-operation and Development countries. Many UK firms already have to deal with EU competition laws. The Bill will greatly simplify matters for such firms by introducing prohibitions that are modelled on those in the EU rules.

Reform of the current regime is long overdue. The Bill will give us a really modern and effective competition regime at last. The result will be stronger markets, a better deal for consumers and more opportunities for good British businesses to thrive. I commend the Bill to the House.

11.58 pm
Mr. Boswell

We have all enjoyed listening to the Minister's press release. The Government have been ambitious, even courageous, in introducing a complex Bill which attempts to merge the European philosophy on competition with British domestic legislation. The attempt is massive in scale, but it has by no means wholly succeeded.

In preparation for tonight, I read my Second Reading speech, and I have never before found that so many queries that I raised on Second Reading remained on Third Reading. Many additional issues of concern arose in Committee. My old philosophy tutor used to say, "Always start your essay with a query, try to answer it, and end with another." The Minister must have been one of his pupils, too.

There are some concepts in the Bill about which industry may be happy, but the CBI and other representative and responsible organisations retain considerable y areas reservations on various aspects. In our haste to consider the Bill, one or two issues were not fully rehearsed. For example, the CBI brought to our attention in its latest letter the interaction of the continuing powers on scale monopoly with the new prohibitions. Much will depend on how the Government and the director general interpret the law.

There is a need for clarity in explanation for businesses, and especially small businesses, at all stages of implementation. As has been clearly revealed tonight, there is a huge, and in my view unhealthy, reliance on the order-making process—for example, in relation to the director general's rules and issues such as fees, of which we know nothing yet. The House will need to give those subjects further detailed scrutiny.

Real concerns remain about the compliance costs, even conceptually. We have not explored tonight, as we did in Committee, the imperfections, inconsistencies and incoherence in the Government's analysis of compliance costs, which does not do nearly enough to acknowledge the problems that businesses will face in seeking legal advice.

Most businesses are legitimate and want to trade fairly, so it is incumbent on the Secretary of State and the director general to proceed whenever possible by exception, and with sensitivity. We move now from press release to implementation, which affects business, whose costs need to be kept to a minimum.

There are still gross imperfections and a tendency to excessive intrusion in the Bill, which has been greatly oversold in its effects, but we do not think it appropriate to divide on Third Reading: like the Minister, no doubt in his case with his fingers crossed, we stand back to see how it will work in practice.

12.3 am

Dr. Ladyman

This is the first Bill on which I have served throughout its passage through the House. I apologise to my hon. Friends for irritating them at times, and beg their indulgence. I am grateful to Opposition Members for the challenge that they have offered throughout.

Opposition Members seem on occasions to have minimised the crimes with which the Bill is designed to deal. When people act anti-competitively, they are stealing just as much as someone who burgles or steals from one's house, so it is important that we take the matter seriously. The Government have done so; they have done good work in producing the Bill, and I am proud to have helped with some parts of that process.

12.4 am

Mr. Chidgey

I, too, do not intend to detain the House for long—[Interruption.]—although I am grateful for the support that I seem to be gathering from all corners of the House; the longer it goes on, the longer I will go on.

The Liberal Democrats have made it clear since Second Reading that we support the main principles in the Bill and welcome the strengthening of competition law by the tow major prohibitions: the chapter I prohibition on agreements to prevent, restrict or distort competition, and the prohibition of abuse of a dominant position. We have had many interesting, but not necessarily satisfactory, debates on those. We also agree with the principle of providing for a new regime to be applied and enforced by the Director General of Fair Trading and giving powers to investigate if reasonable grounds for suspecting that either of those two prohibitions have been infringed.

However, it is about the body of the Bill, the substance of the debate and the detail of the arguments that our reservations have remained—reservations which the Government have failed to overcome in spite of extensive debates, attempts to amend the Bill and lengthy probing in Committee.

Hon. Members will recall that the Bill came to the House from the other place with key amendments, which in the main met our fundamental reservations about the Bill. During our debates, the Government have seen fit in every case to overturn those amendments—specifically, measures to clarify the exclusion of vertical agreements, to resolve the issue of retail price maintenance on over-the-counter medicines and the effect that that will have on community pharmacies, and to tackle the dangers of predatory anti-competitive practices in reducing the diversity and independence of our national newspaper press.

The last is the key issue—the Government's refusal to recognise the limitations of the Bill in dealing with predatory anti-competitive practices in the national press. The Government have claimed that the various amendments tabled at different stages were all unnecessary and unworkable, yet they know only too well that independent and highly respected legal advice has argued to the contrary. At the very least, the Government's legal advice is saying one thing and equally eminent, reliable and respected advice is saying the opposite. That means that we may enact a Bill which will be a field day for lawyers and a great benefit to those organisations that intend to pursue predatory practices.

The Government should reflect on that, as this Bill could well be a Pandora's box for the future. I hope that it will not be, and that, through the various processes, we will find some strength in it. If we do not, the Government know where the blame will lie.

12.7 am

Mr. Brooke

I shall be exceptionally brief.

In the first debate of this Parliament, I said that the battle of Isandhlwana was over, and the defence of the mission station at Rorke's Drift was about to begin. The Minister of State, who was good-humoured throughout our proceedings, paid me the, perhaps unconscious, compliment of echoing that thought. In Committee, he picked up a reference of mine to faith and bestowed the soubriquet of "Faith, Hope and Charity" on my right hon. Friend the Member for Wokingham (Mr. Redwood) and my hon. Friends the Members for Daventry (Mr. Boswell) and for Westmorland and Lonsdale (Mr. Collins), the Whip.

Whether consciously or unconsciously, the Minister bestowed upon them the names of the three Fairey Swordfish biplanes that, at the start of the world war two assault on Malta, represented the entire British aerial defence of the island available to the Governor. The Government may mock the resources available to this side of the House, but the three Fairey Swordfish successfully defended Malta, and we went on to win the war.

12.8 am

Mr. Howard Flight (Arundel and South Downs)

As perhaps one of the few Members of the House who have run businesses around the world, I welcome in principle an improvement in competition law. It has been my experience that north America and even Asia have considerably more open and competitive economies than continental Europe or the United Kingdom. However, I am not entirely sure whether the primary objective of the Bill is harmonisation with European competition law or the improvement of competition in Britain.

The Bill has grave weaknesses. We have already heard of the problems of harmonising with European law relating to intrastate versus interstate under article 85. We need to harmonise on whether cases will be heard in one jurisdiction when they could be dealt with in two. Companies will have the problem of requiring clearance both in Europe and in the United Kingdom. There is the problem of whether UK authorities can vary exemptions obtained in Europe, which could add to the muddle.

The Bill will create uncertainty, and it will give too much power to the Director General of Fair Trading, rather than providing democratic accountability through the President of the Board of Trade. It will be a burden on medium and small businesses. I am particularly concerned that those who run oligopolistic companies seem too relaxed. I hope that the Bill will improve competition, but I fear that it tries to do two different things, and that it will fail adequately to achieve either.

Question put and agreed to.

Bill accordingly read the Third time, and passed, with amendments.