Commons Sitting of 13 June 2002

Preamble
The House met at half-past Eleven o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRAYERS

  PRIVATE BUSINESS
  LONDON DEVELOPMENT AGENCY BILL (BY ORDER)
  Order for Second Reading Read.
  To be read a Second time on Thursday 20 June.

Oral Answers to Questions
  TRADE AND INDUSTRY
  The Secretary of State was asked—
  TRADE AND INDUSTRY

    EU Enlargement
    David Cairns: What assessment she has made of the impact on British business of EU enlargement. [58215]
    The Parliamentary Under-Secretary of State for Trade and Industry (Miss Melanie Johnson): European Union enlargement will benefit British business by creating the largest single market in the world, with nearly 500 million consumers, and a level playing field for business across Europe.
    Yesterday, I urged British business to seize the opportunities created by EU enlargement at a joint Foreign and Commonwealth Office/Department of Trade and Industry business press briefing.
    David Cairns: I am grateful to my hon. Friend for that answer. She will be aware that tremendous goodwill towards the United Kingdom exists throughout the applicant countries. In fact, they would rather do business with the UK than with any of our competitors. She also knows, however, that those new jobs will not fall into our laps but have to be earned. In addition to the advice that she gave yesterday, will she outline what further advice and support the UK Government are able to give to British businesses to ensure that they can fully exploit the undoubted potential that will arise post-enlargement?
    Miss Johnson: We have given a wide range of advice and much help to British business. Indeed, as a result of British Trade International's opportunity central Europe campaign, an extra 1,000 companies registered an interest in being involved in central Europe—that is in addition to the 15,000 companies that Trade Partners UK estimates are already exporting to or investing in the region.
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    The website that I launched yesterday provides a number of links to key support and help for firms interested in that development.
    Michael Fabricant: I am sure that the hon. Lady is right when she says that we can only benefit by enlargement of the European Union, but the question concerned what assessment she has made. Is she aware that the Minister for Europe told me in a parliamentary written answer that the Government have made no assessment, nor have they any intention of ever making one, on the costs or the benefits of our membership of the European Union, whether it be enlarged or not? Will she please go to her colleague, the Minister for Europe, who is responsible for these matters, and ask that the Foreign Office for the first time conduct such an assessment without any further delay?
    Miss Johnson: The hon. Gentleman is talking about membership of the European Union, not about EU enlargement. The point is that that enlargement will create 2 million new jobs in the candidate countries, and we estimate that it will create an extra 300,000 new jobs in existing EU member states. Indeed, the estimated gain to the United Kingdom's gross domestic product is £1.75 billion.
    Michael Fabricant: Where does that figure come from?
    Miss Johnson: It is from independent research conducted in 1997.
    Mr. Mark Lazarowicz: Does my hon. Friend agree that our country's many creative industries, for example film and broadcasting, are one of the areas of British business that would greatly benefit from EU enlargement into central Europe? I am sure that she is aware of the excellent proposals that the British Council is putting forward to allow our creative industries to expand their contacts and networks in central and eastern Europe. Will she join me in welcoming those proposals and could she give her Department's support for them?
    Miss Johnson: Indeed I can join my hon. Friend in welcoming that initiative. It is another example of the many benefits that will accrue to us and the industries concerned through enlargement. The Department will give its full support for just that sort of enlargement activity.
    Mr. Derek Foster: I have been a pro-European for 40 years, enthusiastic about enlargement as it will underpin the emerging democracies of eastern Europe, but will the Minister take into account the problem that the one-size-fits-all single currency implies a huge transfer of funds from the more successful economic regions of Europe to the less successful, such as my region in the north-east? Would not enlargement make that problem that much more difficult to solve?
    Miss Johnson: As I said, there will be real gains both to the candidate countries and to existing EU member states because of the economic benefits of enlargement for all parties. Obviously, it is a matter for individual

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    countries that accede to the EU under enlargement when and how they join the euro, just as that is a matter for debate and consideration in this country.

    Coal Industry
    Paddy Tipping: What estimate she has made of the amount of coal produced in the UK during the last financial year. [58216]
    The Secretary of State for Trade and Industry (Ms Patricia Hewitt): The UK coal industry produced a total of 32.8 million tonnes, including slurry, in the last financial year. Deep mines produced 18.1 million tonnes and opencast sites produced 14.2 million tonnes.
    Paddy Tipping: Does the Secretary of State agree that the current coal aid operating scheme has helped to sustain that level of production? She will know that the scheme finishes on 23 July. Will she outline the very welcome new framework agreed only last week by the EU, and does she propose any measures to link the two schemes—the one that finishes on 23 July and the new one that will come into effect in 2003?
    Ms Hewitt: I entirely agree with my hon. Friend about the enormous help that the existing coal aid scheme has given to enable pits to survive the difficult price and trading conditions that existed between 1999 and last year. I am also delighted that last week at the Energy Council we agreed a new framework for support for the coal industry, including a new framework for investment aid—something that my hon. Friend has been pushing for and for which we argued strongly. We are urgently considering how to take advantage of that new framework in order to ensure the future survival and success of our coal industry.
    Adam Price: The Secretary of State may be aware that the management of Betws colliery in my constituency are meeting her officials this afternoon to inform them of imminent mass redundancies at Betws colliery in the absence of continued support after 23 July. Can she confirm that the option of extending the existing scheme until the end of the year is still under consideration, and that Ministers will meet the management at Betws before any final decision is taken?
    Ms Hewitt: My hon. Friend the Minister for Energy and Construction is himself meeting the management and work force at Betws colliery shortly. That is in addition to the meetings with officials that are already taking place. I must stress to the hon. Gentleman that Betws colliery has already received nearly £3 million in coal operating aid which, under the terms of the operating aid scheme, was granted on the understanding and condition that the mine, like other mines, was viable beyond July 2002. Of course we are looking at all the options and we will discuss the issue with management before final decisions are made.
    Mr. Dennis Skinner: Is my right hon. Friend aware that there will be a continuing problem with the coal industry in providing money that, in some ways, finishes up in the back pocket of the owners? We decided
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    in respect of Railtrack, some time ago, that we should not continue to pour public money into the pockets of the shareholders who were making a fortune out of it. Would it not make a lot more sense when we save the coal industry—or the remnants of the Tory operations of the past 18 years—to take it back into public ownership? We could buy the shares for a song; we would not be putting money into the pockets of the shareholders; and the chances of survival would be much greater than if we leave the industry to people who are concerned only about themselves.
    Ms Hewitt: I am sorry to disappoint my hon. Friend by saying that renationalisation of the remaining pits is not actually on the Government's agenda, but he makes a very important point about the danger, with some forms of aid, of subsidising companies rather than ensuring the future of the work force. There are difficult decisions to be made, especially in the case of those pits where geology makes it impossible for the pit to have a viable economic future. We are working closely with the industry and its work force to deal with those situations.
    Richard Ottaway: Does the Secretary of State agree that the net effect of the EU Council meeting and the new framework announced recently is that the Germans can subsidise their coal industry, in effect, by billions until 2010, which will result in subsidised coal and electricity coming into this country, affecting our own producers and suppliers?
    Ms Hewitt: No. The Germans certainly pour a great deal of public money into their coal industry but none of that subsidised coal is exported, and we have worked closely with the Commission to ensure that there is no distortion that would undercut our own coal industry.
    Mr. Michael Clapham: I heard my right hon. Friend's reply to my hon. Friend the Member for Bolsover (Mr. Skinner), but may I point out that Tower colliery, which is owned by the men, is more successful? Within the framework for new aid, will my right hon. Friend consider the involvement of the Coal Authority so that proper direction can be given to the investment that will follow the new aid scheme?
    Ms Hewitt: My hon. Friend makes a very important point about the success of Tower colliery. Of course we will consider the point he raises in deciding what kind of investment aid support we may be able to put in place under the new framework that we have successfully negotiated.

    Company Directors
    Mr. Michael Jack: What measures can be taken against company directors who persistently default in their financial and legal responsibilities. [58218]
    The Parliamentary Under-Secretary of State for Trade and Industry (Miss Melanie Johnson): A number of measures can be taken, including investigating the company and disqualifying and/or prosecuting the company's directors.
    Mr. Jack: I am grateful to the Minister for her answer. A constituent of mine has been the victim of a serial liquidator, as has Customs and Excise. During the past few years, the individual concerned has put five companies into liquidation, leaving my constituent out of pocket by some £20,000 and Customs by £38,000, yet nothing seems to have been done so far to stop that individual continually walking away from his obligations.
    Michael Fabricant: Name him.
    Mr. Jack: I am advised that, if I do as my hon. Friend suggests, the individual could well go to ground, thus making it more difficult for the authorities to get hold of him. May I ask the Minister, first, what powers can be deployed to deal with such people and, secondly, whether, if I furnish her with a file of the cases that I have in mind, she will give me an undertaking to investigate them with all speed?
    Miss Johnson: I take the right hon. Gentleman's comments very seriously. Such cases need to be looked at, and I will, of course, ask the appropriate authorities to look into any details that he can furnish me with so that the matter can be dealt with appropriately.
    In relation to the further issue that the right hon. Gentleman raises about the forms of redress and penalty that can be used, there are a number of different ways to tackle such issues. Obviously, directors can be disqualified as being unfit—indeed, 12,000 have been since the Insolvency Act 1986 was put in place, and in the year to March 2002, 1,750 directors have been disqualified. Companies can also be wound up and other measures can be taken, as I said earlier.
    Mr. Martin O'Neill: I hear what my hon. Friend says, but will she also bear it in mind that one of the problems that small businesses have faced in recent years has been the culture of blame attached to insolvency? The Government have been trying to change that culture so that businesses and those who finance them are prepared to take a chance on people, so that we get a better balance. Always focusing on the defaulters when businesses go wrong is to get the balance wrong. The focus should be on trying to help people back into business. Those who deserve punishment should get it, but the emphasis must be on supporting those businesses that get into difficulty.
    Miss Johnson: I completely agree with my hon. Friend on this issue; it is a matter of striking the right balance. Indeed, that is what we shall do through the current Enterprise Bill, which will be considered on Report later today. In fact, we are considering making a distinction between bankruptcy for those who are not reckless and those subject to bankruptcy restriction orders, which can last for between two and 15 years and will recognise the reckless nature of bankruptcy where that occurs. In that way, a distinction can be made between those who have unwittingly become bankrupt and should be given a fair chance to start again without stigmatisation and those who rightly should be stigmatised and kept from running companies because of their previous track records.
    Mr. Nigel Waterson: Does not the Minister agree that the Government's proposals in the
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    Enterprise Bill to make bankruptcy easier, to remove the stigma from it and dramatically to reduce the scope for investigating bankruptcies will make it easier for rogues or well-intentioned incompetents to leave a trail of financial wreckage in their wake?
    Miss Johnson: That is absolute nonsense, for the reasons that I have given in answering my hon. Friend the Member for Ochil (Mr. O'Neill). The hon. Gentleman misses the point: there are penalties of between two and 15 years under bankruptcy restriction orders. Indeed, in relation to the remarks made by the right hon. Member for Fylde (Mr. Jack), the previous record of bankrupts will be taken into consideration by the courts in looking at bankruptcy restriction orders, so serial bankrupts will be very much an issue for those in the courts who consider imposing bankruptcy restriction orders and the very serious penalties that they involve.

    Social Enterprises
    Mr. Colin Challen: What plans she has to support social enterprises in the UK. [58219]
    The Minister for E-Commerce and Competitiveness (Mr. Stephen Timms): We are preparing a Government strategy for social enterprise at the moment. We want an environment in which social enterprises flourish, because of their benefits in boosting productivity and competitiveness, in contributing to the regeneration of communities and in developing new ways of delivering public services.
    Mr. Challen: I thank my hon. Friend for that reply. I congratulate the Government on setting up the national social enterprise unit, which is a great initiative. I want to tackle the issue at a local level and have us focus on what happens on, say, council estates, many of which were designed in the 1960s and 1970s with no provision for the possibility of enterprise. They consist of just housing and perhaps one pub, one chippy and one shop.
    We need to consider how we can build the capacity of local populations. I want the Government to consider how joined-up thinking might help local people create accredited community safety schemes in the social enterprise arena. In considering capacity-building structures, we ought to look at places such as west Yorkshire where, for example, there is no co-operative development agency for local people to consult.
    Mr. Timms: My hon. Friend makes some important points. Our aim is for enterprise to be centre stage in community regeneration in every part of the country, particularly in some of the areas with the characteristics that he describes. We want in every area a sustainable base for business and jobs in order to provide income and services for people locally. We see social enterprises alongside conventional enterprises as key to bringing communities out of decline. That will be at the heart of our social enterprise strategy, which will be published in the summer. A wide cross-section of the social enterprise sector has been involved in working on that.

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    I agree with my hon. Friend about increasing capacity through community development finance intermediaries, and of course the community investment tax credit in the Budget will be helpful in achieving that.
    Judy Mallaber: Does my hon. Friend agree that post offices are a very good example of social enterprises benefiting the local community? Will he assure me that the announcement this morning by Allan Leighton—now, I am pleased to say, of Royal Mail—will not lead to further closures of post offices in rural areas and market towns?
    Mr. Timms: I agree with my hon. Friend about the importance of post offices in rural areas. We have made it clear that we are absolutely committed to the postal network. Post offices provide a lifeline in many of the communities to which she refers. That is why we placed a formal requirement on the Post Office to maintain the rural network and to prevent avoidable closures. That is not affected in any way by the announcement this morning. Of course, my right hon. Friend the Secretary of State will have more to say about the Post Office in a few minutes.
    Miss Anne Begg: I recently visited three businesses in Aberdeen—Printability, Turning Point and Square One—which have adopted the social enterprise model to deliver work placements for people with mental health problems. I was very impressed by what I saw. It should be a model for the future as it not only provides a supportive work environment but keeps people out of hospital, gives them an important role in society and eases them back into work. What help can the Government give to such enterprises to ensure the provision of that valuable work and that the schemes fit the model of welfare to work for disabled people put forward by the Department for Work and Pensions?
    Mr. Timms: My hon. Friend describes an excellent example of exactly what we want to encourage with the social enterprise strategy, which will be published in the summer. We are taking a range of measures to encourage such enterprise. As she says, the benefits are in providing employment opportunities and in delivering services to local communities, often where those services are not available otherwise. That will be the aim at the heart of the strategy. I draw her attention to the community investment tax credit, which will be a big help in that regard, although there will be a number of other measures in the strategy. I would be interested to know more about the example in her area.

    Cefn Croes Wind Farm
    Mr. Roger Williams: If she will make a statement on the Cefn Croes wind farm application. [58220]
    The Minister for Energy and Construction (Mr. Brian Wilson): Consent was granted on 23 May. Copies of the decision letter are available in the Library of the House.
    Mr. Williams: I thank the Minister for that reply, but I am sure he will accept that there is considerable disquiet
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    in Wales about the way in which the application was handled. Groups of people still wish to contest the decision. However, I wish to move on.
    There is cross-party support in the National Assembly for Wales for decisions on all power stations to be devolved to the National Assembly. I believe that there is considerable cross-party support for that in this House as well. Is the Minister willing to enter into discussions with the Secretary of State for Wales and appropriate Ministers in the National Assembly to see how devolution of decision making could be achieved? Will he report back on the outcome of those discussions?
    Mr. Wilson: The short answer to the main part of the hon. Gentleman's question is yes. The discussions are going on.
    This issue remained a reserved matter at the time of devolution because the transmission system for England and Wales operates as one. Therefore, it was more appropriate to deal with it on an England and Wales-wide basis. Scotland has a separate grid system, so responsibility for it was devolved to Scotland.
    Discussions are going on to get the balance right, and I have no strong feelings about the issue. The current system depends on the way in which devolution was arranged. If it is suitable to change it at some future time, let us look at that. However, at the moment, we operate within the rules as they are laid down.
    Mr. Simon Thomas: The Minister will know that I supported this application which is in my constituency. However, the way the application was decided left a sour taste in the mouths of many people in my area and it left many people in Wales feeling that they had been treated as infant children who were not able to take planning decisions for themselves.
    I welcome what the Minister has just said about looking at the issue again. He can do that at the stroke of a pen. In the previous Session, I introduced a Bill to change the electricity legislation and to allow changes to happen, so I hope he will consider that to see how he might easily change the system. Notwithstanding the applications that will come to him from my constituency and elsewhere in south Wales, will he give an undertaking that this is the last time he will take such a decision and that in future he will leave it to the people of Wales to decide?
    Mr. Wilson: The hon. Gentleman is having his wind farm and eating it. He agrees with the decision, but he is moaning about the way in which it was taken. I am a strong believer in local democracy and an important point is the fact that the local authority voted 18:3 in favour of the wind farm. That fact is totally ignored in most of the coverage of the issue—all that is talked about is the vociferous minority who have better access to the media and, indeed, to the House of Lords. I make no apology for the decision or the democratic input into it.
    I am not suggesting that the present system is wrong. I have given the rational basis for it, but other, wider factors are coming into play to create a UK-wide transmission system and they might make it appropriate to consider the issue in a different context.

    Gender Pay Gap
    Julie Morgan: What plans she has to address the pay gap between men and women. [58221]
    The Secretary of State for Trade and Industry (Ms Patricia Hewitt): As well as the Equal Pay Act 1970 and the provisions in the Employment Bill to strengthen the Act, we have the national minimum wage and we are spreading good practice on equal pay through the fair pay champions and castle awards. On top of that, all Departments will carry out an equality audit by April 2003 and we taking forward recommendations from the Kingsmill report.
    Julie Morgan: I thank my right hon. Friend for that reply. I am sure she is aware that in Wales women's hourly earnings are 87 per cent. of men's. As the pay reviews are voluntary, can she tell me what the Government are doing to encourage employers in the public and private sectors to undertake them so that we have a detailed picture of the gap?
    Ms Hewitt: I welcome the progress that has been made in Wales where the pay gap is somewhat narrower than it is in other parts of the country. As I said, we are taking a lead in the public sector by ensuring that equality audits take place in all Departments and agencies. We have also given the Equal Opportunities Commission an extra £100,000 to do work with employers to ensure that effective tools are available to them to carry out the pay reviews which are a fairly new idea. I welcome the fact that many private sector employers have already started to carry out those pay reviews to uncover the real underlying problems that give rise to the persistent pay gap.
    Miss Anne McIntosh: Will the right hon. Lady confirm that the equal opportunities policy extends to the highest levels of Government? In that regard, will she say whether there are any unpaid lady Ministers? If there are not, would not it give rise to a claim to the Equal Opportunities Commission from unpaid male Ministers?
    Ms Hewitt: There is rightly a statutory limit on the number of ministerial salaries at the Prime Minister's disposal. I understand that there is an unpaid Minister who is a man and, in the past, at least one unpaid Minister was a woman. I do not think that that situation will give rise to a claim for unequal pay.
    Caroline Flint: A new report shows that more than a third of female workers are earning more than their boyfriends or husbands. However, nine out of 10 women say that they are worn out with the demands of work and home. That suggests two things: first, that men are still not pulling their weight in the home even though their wives and girlfriends may work the same hours and have the same responsibilities; and, secondly, that not enough attention is given to the work-life balance and child care. One of the disincentives for women to go for higher-paid jobs and longer hours is the belief that the support is not available for them to balance their family life with their work life. Can I urge my right hon. Friend
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    to ensure that that part of the picture is attended to within the Department of Trade and Industry and the economic agencies?
    Ms Hewitt: I entirely agree with my hon. Friend, who raises an extremely important issue. Women who do very low-paid jobs often work at night. Their partner is at home looking after the children and they get no sleep because they have to look after the children and the home during the day. Those women face the biggest problem of juggling work and family.
    Of course we are looking at how we can help women and men to balance work and family more effectively. That includes an enormous investment in child care. It also includes pressing employers to make part-time and flexible work available in the full range of jobs so that women in particular no longer face the choice of either trading down from their skills and qualifications to get the hours they want, or continuing in a job that uses their skills and qualifications properly but which does not allow them the time they need to get on with the rest of their lives.
    Mr. John Whittingdale: Can the Secretary of State say whether measures to address the pay gap between men and women will be included in the wholesale review of workers' rights, which we understand her Department is intending to undertake later this year? Can she confirm reports that that will also include consideration of full employment rights from day one and a further lowering of the threshold for trade union recognition? Is that the way in which the Secretary of State intends to meet the objective that we are told she set out to her third way colleagues at the weekend, that there should be absolutely no danger of the Labour party being seen to have too close a relationship with business?
    Ms Hewitt: The hon. Gentleman is a bit behind the curve. We made it plain when we introduced the Employment Relations Act 1999 that there would be a review of its provisions after it had been in force for a couple of years. We said in our manifesto last year that we would conduct that review as promised. I anticipate that we will publish a discussion document in the summer to take that review forward in full consultation, as the hon. Gentleman would expect, with employers, employees and their unions.
    Mr. Whittingdale: The Secretary of State may claim that that has been forecast for a long time, but she does not seem to understand the despair in the business community that the announcement of the review has caused. The Confederation of British Industry called it "totally inappropriate" and the Forum of Private Business said that it is "completely unworkable" and "unnecessary". Is it not proof that the Government have finally given up trying even to pretend that they are seeking to relieve the burden on British business and that, instead, they have swallowed the trade union agenda hook, line and sinker?
    Ms Hewitt: The hon. Gentleman is talking complete rubbish. I remind him of the recent report by the Economist Intelligence Unit which found, once again, that thanks to our outstanding management of the economy and to the pro-business and pro-enterprise climate that we

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    have created, the United Kingdom remains one of the best places in the world for entrepreneurs, ahead even of the United States of America.

    End of Life Vehicles Directive
    Chris Grayling: If she will make a further statement on the implications of the end of life vehicles directive. [58222]
    The Minister for Energy and Construction (Mr. Brian Wilson): We continue to analyse carefully all the implications of the directive in order to ensure that we get the implementation of this complex measure right.
    Chris Grayling: I thank the Minister for that response. Does he not realise that the continuing delay in establishing the premise on which vehicle manufacturers may or may not have to meet some of the costs of recycling vehicles in future is creating instability in the motor industry and uncertainty about future investment and will do the manufacturing sector in this country no favours whatever?
    Mr. Wilson: No, I do not agree with any of that. I recognise the hon. Gentleman's constituency interest in this issue. I think that the company in his constituency, like every other manufacturer, will be much happier if we get this right than if we get something introduced quickly that proves to disadvantage the British motor manufacturing industry. We are in the same boat as everyone else in the European Union, where there has been delay in implementing the measure because it is complex and because it is important to get it right.
    Mr. Tam Dalyell: Are we to understand that under the directive it is the last owner of any vehicle who has to pay the costs of putting things right—of the destruction of the vehicle? In that case, is it not the poorest among our constituents who will have to bear those costs? Can it possibly be right that someone with an old banger should have to carry costs that should rightly be carried by the first owner, who got the vehicle new? In those circumstances, can the Department look again at a ten-minute Bill that I tried to introduce to make manufacturers responsible for the death of a vehicle at the design stage? Is not that the right way to do it?
    Mr. Wilson: We are talking about two separate phases. From 2007, exactly the kind of producer liability that my hon. Friend refers to will operate. The question is how that is implemented. I think that that is a matter of particular interest to the hon. Member for Epsom and Ewell (Chris Grayling). We are therefore talking about an interim period until 2007. We have not made an announcement yet on how that is to be conducted, but we are anxious that during that period we do not put British manufacturers at a disadvantage relative to manufacturers in other EU states. Things may well go in the direction that my hon. Friend suggests, but the major problem of the last owner paying and the problem that already exists of cars being dumped are primarily registration problems.
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    That must be addressed at the same time. It would have to be addressed anyway, whether the directive were coming into force or not.
    Dr. Vincent Cable: In view of that response, can the Minister explain the public claim this week by the British Motor Manufacturers Association that he has accepted its proposal for 2007 to do precisely what the hon. Member for Linlithgow (Mr. Dalyell) fears, effectively imposing a poll tax on low-income final owners of the car? Do the Government accept the judgment of the all-party Select Committee, which concluded in clear terms that such a proposal would not work "in practice" and that
    "there would be strong incentives on owners of old cars simply to abandon them"?
    Does the Minister accept the reasoning, based on Home Office figures, that the current cost of abandoned cars to councils and emergency services of about £400 million would double or treble if the manufacturers' proposals were accepted?
    Mr. Wilson: I think the hon. Gentleman is talking about the situation before 2007, not post-2007 when producer liability will apply, but the question implies recognition that there is already a problem with dumped cars—a very big problem in some areas. As I say, that would have to be addressed whether the directive were coming into operation or not, through action on the registration system and traceability, which is at the root of the issue. We will announce very soon what we will do in the interim period, but I stress again that the key motivator will be to ensure that British car manufacturers are not disadvantaged vis-à-vis manufacturers in other EU countries.
    Ms Meg Munn: My constituency, like many others, suffers from a lot of abandoned vehicles. I am told by the local fire service that some 55 vehicles a month are set on fire there. A number of small businesses are looking to help the local authority with the recycling of abandoned vehicles. Will the Minister ensure that appropriate advice is made available to such companies, so that they can carry out their duties properly under the directive?
    Mr. Wilson: Absolutely, and my hon. Friend makes a couple of important points. One is that good schemes are already being operated between local authorities and the private sector in some areas. The introduction of the directive will give a further stimulus. It points to the fact that there is an existing problem that must be addressed before the directive comes into operation. We must ensure that the industry has time to adapt and that there are places where vehicles can be taken. Above all, we must ensure that there is a strong disincentive to dumping. That approach will be effective only if it is possible to trace owners. Measures must go hand in hand. We must make sure that there is a penalty that can be applied if people dump vehicles.
    Mr. Philip Hammond: It has been reported that the Government are to delay imposing the burden of the end of life vehicles directive on the motor industry until at least 2007. Is it not inevitably the conclusion that in saving the motor industry

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    £450 million a year by leaving responsibility with last owners of vehicles, the Government are effectively imposing a £450 million highly regressive tax on motorists who are least able to pay it—those who are driving end-of-life vehicles? Can the Minister honestly tell the House that he thinks that that is the best way to tackle the problem of abandoned vehicles?
    Mr. Wilson: The best way to tackle the problem is what will happen from 2007, when there is producer liability. It is an interesting view from the Tory party if the hon. Gentleman is saying that we should be immediately penalising British motor manufacturers vis-à-vis their competitors on the continent.
    The basic point is that the directive is a good thing. It will lead to a large increase in recycling in this country. If properly implemented, alongside the measures on traceability, it will get rid of the growing social and environmental problem of dumped burnt-out cars in our community.

    Small Businesses
    Mr. Wayne David: What further measures she is taking to tackle the problems caused to small businesses by late payment of invoices. [58224]
    The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths): The Government take the issue of late payment very seriously. That is why from 7 August we are giving all businesses a new right to claim interest on late payments, a new right to claim a fixed sum of compensation for debt recovery costs, and a new right to have a trade federation or other appropriate organisation to challenge any attempt contractually to reduce the right to statutory interest.
    Mr. David: I thank my hon. Friend for his reply. I am pleased that the third phase of the 1998 legislation is being introduced. Will my hon. Friend say how effective current legislation has been in reducing late payments?
    Nigel Griffiths: The latest information that we have from the European business survey by Grant Thornton confirms that the average time taken to pay invoices is down from 50 days before legislation came into effect to 41 days. That is a cut of almost 20 per cent.
    Mr. Nicholas Winterton: I warmly welcome the Minister's response to the main question, but does he not agree that smaller businesses are squeezed at both ends? Often, a large business will squeeze them because it uses them as what I would call a cash-flow till. At the other end of the scale, the banks levy substantial charges against smaller businesses. Is it not important that we ensure that the acorns that we hope will produce the big businesses of the future are allowed to use their money to expand, rather than allowing bigger companies to use them as a cash-flow mechanism?
    Nigel Griffiths: The hon. Member puts the point well. I think that the whole House greatly welcomed the action taken by the Secretary of State in ensuring that there was a proper inquiry into bank practices. The banks have been instructed to modify those practices to the benefit of small businesses.
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    The hon. Member is also right about the issue of a minority of irresponsible large businesses who regrettably seem to follow the advice of a former Secretary of State for Trade and Industry, then President of the Board of Trade, in his previous business career of delaying payment to the last possible moment. That is deplorable advice, and it is not the advice being given by the Government.
    John Mann: The small business community will undoubtedly welcome that further improvement. Some of the worst culprits are Government Departments and agencies. Will the Minister monitor them and name and shame those that cost the Exchequer money because of interest levied as a result of their failure to pay up on time?
    Nigel Griffiths: Yes, and my hon. Friend makes a particularly good point, as we now publish information on the time that Government Departments and agencies take to pay. The target is 100 per cent. prompt payment. Government Departments and agencies achieving that now exceed 95 per cent, so there is room for improvement, but they are setting quite a good standard. However, we want them to achieve the full target.
    Mr. Mark Prisk: Does the Minister accept that beyond the changes that will take place then, the overwhelming priority for most small business organisations is the promotion of best practice in credit management rather than the imposition of new regulatory controls?
    Nigel Griffiths: Of course, but small businesses and small business organisations tell me that they need tough action to back that up, perhaps contradicting the messages from one or two people, and regulations are necessary to achieve that. If we are going to introduce measures on 7 August, which the hon. Member welcomed, we need regulations. To my mind, those regulations do not impose any burdens but, I hope, help to liberate small businesses and allow them to play the vital part in the economy which the House knows they need to play.

    Clean-Coal Technology
    Mr. Eric Illsley: If she will make a statement on her Department's support for clean-coal technology. [58225]
    The Minister for Energy and Construction (Mr. Brian Wilson): The Department is supporting cleaner-coal technology by providing some £17 million over the period 1999 to 2005 for research and development and technology transfer, as well as assisting with the promotion of United Kingdom exports of clean coal.
    Mr. Illsley: I am grateful to my hon. Friend for his reply. At a time when our whole energy policy is under review, it is essential that we maintain our coal industry, especially with increasing gas prices and certain nuclear power stations coming to the end of their life. Will my hon. Friend press for more investment and the application of research and development of clean-coal technologies to provide extra markets for our coal industry?
    Mr. Wilson: The short answer is yes to all of that. Clean-coal technology is important domestically—if we are to continue to have a coal industry, it must be based on cleaner coal—but it also has tremendous export potential. Probably the best thing that we could do globally for the environment is to make sure that clean coal is used in countries that are heavily dependent on coal and in most cases on old and dirty technology.
    David Burnside: The Minister should be aware that the cleanest coal is not the black stuff but the brown stuff; it is called lignite and is used extensively by a number of our colleagues in continental Europe, especially Germany and Spain, for power production. Near my home in Ballymoney we have extensive lignite resources close to the surface; there are extensive resources in the west of my constituency at Crumlin and Lough Neagh, and there is lignite throughout the United Kingdom. Will the Minister give a commitment in any review of energy priorities that may be in production that lignite will be given precedence? Will he liaise with his colleagues in the devolved Assemblies and Parliaments to see that lignite, the clean coal, is used for power production in the UK in future?
    Mr. Wilson: I am interested in what the hon. Gentleman said. In the context of the consultation on the White Paper and the emphasis on cleaner-coal technology, I am pleased to give the undertaking for which he asked.
    Mr. Kevin Hughes: Does my hon. Friend agree that if the Government supported the new IGCC—integrated gasification combined cycle—for clean-coal technology in particular, that would result in a long-term future for our coal industry? It would reduce greenhouse gas emissions, the need to transport coal—because plants can be sited on colliery premises—and the need to quarry limestone. It would also provide new opportunities for our engineering industry.
    Mr. Wilson: I have no quarrel with any of that. As my hon. Friend knows, I have been having discussions with interests that are particularly relevant to his constituency.
    Mr. John Smith: Will my hon. Friend remain mindful of the special needs of coal-fired power stations such as Aberthaw in my constituency, which was designed exclusively to burn coal from south Wales, in particular from Tower colliery, with a high sulphur content? In future, the pressure will be on those power stations to increase limitations on their emissions.
    Mr. Wilson: I realise that. One option that we are considering in the clean-coal programme is retrofitting to reduce emissions from existing power stations.

  MINISTER FOR WOMEN
  The Minister was asked—
  MINISTER FOR WOMEN

    Private Clubs (Discrimination)
    Mr. Robert Walter: What plans the Government have to deal with discrimination against women members of private clubs. [58250]
    The Minister for Women (Ms Patricia Hewitt): I understand that the hon. Gentleman intends to introduce a private Member's Bill on this subject later in the month. I have already welcomed a Bill on the same issue that has been introduced in another place. I can of course make no commitment in regard to parliamentary time, but we will certainly keep the matter under review, because there can be no justification for treating women who are members of mixed-sex private clubs as second-class citizens.
    Mr. Walter: I am somewhat disappointed by that reply. When the Sex Discrimination (Amendment) (No. 2) Bill was proceeding through the House of Lords—it is due to have its Third Reading on Monday evening—it was supported by the Government, Conservative and Liberal Democrat Front Benches. I hoped that the Minister would be able to give us a clearer indication that Government time would be made available when that Bill came to the House of Commons and took its place alongside my virtually identical Bill. It seems to me that the Government are more interested in the welfare of foxes than in the welfare of women.
    Ms Hewitt: Until that point, I was full of sympathy for the hon. Gentleman. As I think he knows, there are technical problems relating to Lord Faulkner's Bill and the Bill that the hon. Gentleman intends to introduce, connected with, for instance, amendments to the Licensing Act 1988 and aspects of the drafting. If the hon. Gentleman wishes, I shall be happy to ensure that my officials discuss the drafting of his Bill with him; I shall certainly continue to discuss the issue with the business managers.

    Construction Industry
    Mr. Russell Brown: What she is doing to encourage more women to enter the construction industries. [58253]
    The Minister for Women (Ms Patricia Hewitt): We are continuing to work with the construction industry, particularly through the rethinking construction initiative—using demonstration projects, case studies and best-practice dissemination to help companies improve their productivity and competitiveness—especially by making better use of the people available to them. One strand of that initiative aims to demonstrate the business benefits of diversity in the workplace, including of course the employment of women.
    Mr. Brown: Like my right hon. Friend, I am well aware of the number of women who are becoming involved in civil engineering in particular. There is, however, a major skills gap in the construction industry: there is a desperate need for electricians, plumbers and bricklayers. May I urge my right hon. Friend to have discussions with the trade unions, particularly the Union of Construction Allied Trades and Technicians, to establish exactly where the gaps are and what the unions can do—in conjunction with her own good work—to achieve the aim of bringing more women into the construction industry?
    Ms Hewitt: I entirely share my hon. Friend's desire to see more women moving into the construction and civil

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    engineering sectors. We will never overcome those skills shortages if companies continue to recruit and promote only half the talent that is potentially available.
    I will ensure that my hon. Friend the Minister for Industry and Construction picks up on the discussions with the union, as well as those with the companies concerned. I remind my hon. Friend that my right hon. Friend the Secretary of State for Education and Skills is ensuring that, through the training and new deal programmes, we reach out to bring more women who are currently not in work into the very jobs to which he refers.
    Mrs. Caroline Spelman: Given the importance of the role of women in industry, does the Minister realise that the number of women directors in the top 100 FTSE companies has fallen for the second year running? According to the Cranfield school of management, 64 per cent. of Britain's leading companies had women directors in 1979; that figure has fallen to 57 per cent. today. What do the Government propose to do to arrest that decline in the role of women in British business?
    Ms Hewitt: It is disappointing that at a time when more women are taking up senior positions in business and in government the number of women in the boardroom in so many leading companies has fallen. I recently asked Derek Higgs to undertake a review of the role of non-executive directors. He and I are most concerned about the failure of companies to appoint a wide range of people to the boardroom. Getting more women there is high on our agenda.

    Gender Pay Gap
    Hugh Bayley: What progress the Government have made in narrowing the pay gap between women and men. [58255]
    Mrs. Betty Williams: What initiatives she is promoting to reduce the gender pay gap. [58258]
    The Minister for Women (Ms Patricia Hewitt): As I said earlier, we are taking steps to tackle the pay gap between men and women, which currently stands at 18 per cent.—slightly down from 20 per cent. in 1997. The national minimum wage has made a genuine difference to the pay of more than 1 million low-paid women. We are also strengthening the Equal Pay Act 1970 through the Employment Bill, working with the private sector to promote equal pay audits and ensuring that that happens throughout the public sector.
    Hugh Bayley: Does my right hon. Friend realise that the pay gap between men and women is even greater for older women? That is not simply because older women tend to have fewer qualifications than younger women; the pay gap between male and female graduates of a
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    similar age is even greater than that among non-graduates. What are the Government doing to investigate the reasons for the problem and to tackle it?
    Ms Hewitt: We have already published useful research on the underlying causes of the pay gap. My hon. Friend's point about the difference in the pay gap for younger and older women is correct. The gap between younger women and men is narrowing significantly. The big challenge is ensuring that as the younger generation of women start to have families the pay gap that has afflicted older generations does not reopen.
    Mrs. Betty Williams: If the Equality Opportunities Commission is combined with the Disability Rights Commission and the Commission for Racial Equality in a single body, can my right hon. Friend assure us that women's pay will not be sidelined?
    Ms Hewitt: I readily give my hon. Friend that assurance. As she would expect, my hon. Friend the Deputy Minister for Women and I will ensure that, as we consult on the proposal for a single equalities commission and if we subsequently decide to accept it, we have a structure that enables women's pay and the broader issues of work-family balance that lie behind it to remain high on the agenda.
    Miss Julie Kirkbride: The Minister said that the pay gap had narrowed from 20 per cent. to 18 per cent. in the past few years. Instead of warm words, will she give us a target to reduce the gap even further in the next few years?
    Ms Hewitt: As I have said, we are continuing to act on the causes of the problem. As an employer, the Government ensure that every Department and public agency conduct a proper equal pay audit to tackle the pay gap in the public sector. We are also working with the private sector to ensure that it takes the same steps and, beyond that, to provide the child care provision in which the Conservative Government never invested, to ensure that women can make choices about balancing work and family.
    Sandra Gidley: The hon. Member for City of York (Hugh Bayley) has already highlighted the problem of the graduate pay gap. Will the right hon. Lady ensure that our own House is in order? Figures that I have recently obtained show that 21 per cent. of senior officials in the House of Commons are female. That figure has remained static for the last four years. Will the Minister ensure that this is not, in effect, exacerbating the pay gap by stealth and that the House of Commons is an equal opportunities employer beyond reproach?
    Ms Hewitt: That is a very important point. It is a matter for the whole House, and one that I hope all parties will take seriously and take appropriate action on. I am glad to say that, in my own Department, the number of women in the senior civil service is increasing significantly. The arrangements for pay, recruitment and promotion within the House of Commons are, however, a matter for Parliament and not for the Government.

Business of the House
12.30 pm
Mr. Eric Forth: May I ask the Leader of the House to let us have the business for next week, please?
The President of the Council and Leader of the House of Commons (Mr. Robin Cook): The business for next week will be as follows:
MONDAY 17 JUNE—Conclusion of remaining stages of the Enterprise Bill.
TUESDAY 18 JUNE—There will be a debate on European Affairs on a motion for the Adjournment of the House.
WEDNESDAY 19 JUNE—Opposition Day [3rd Allotted Day-2nd Part]. Until 7 o'clock, there will be a debate on the reduction of world poverty through trade, on an Opposition motion. Followed by a motion to concur with their Lordships on the establishment of a Joint Committee on the House of Lords.
THURSDAY 20 JUNE—There will be a debate on Energy: Towards 2050 on a motion for the Adjournment of the House.
FRIDAY 21 JUNE—Private Members' Bills.
The provisional business for the following week will be:
MONDAY 24 JUNE—Consideration of Lords amendments to the Export Control Bill.
TUESDAY 25 JUNE—Opposition Day [15th Allotted Day]. There will be a debate on an Opposition motion. Subject to be announced.
WEDNESDAY 26 JUNE—Consideration Of Lords amendments that may be received to the Tax Credits Bill.
THURSDAY 27 JUNE—Estimates [3rd Allotted Day].
There will be a debate on public-private partnership for London underground followed by a debate on individual learning accounts.
At 7 o'clock the House will be asked to agree all outstanding estimates in accordance with Standing Order No. 54(5). The list of estimates to be agreed will be advised in due course.
FRIDAY 28 JUNE—The House will not be sitting.
The House will also wish to know that on Monday 17 June 2002, there will be a debate relating to reception of asylum applicants in European Standing Committee B.
On Tuesday 18 June, there will be a debate relating to broad economic policy guidelines in European Standing Committee B.
The House will wish to know that I hope to make an announcement regarding the summer recess dates next week.
[Monday 17 June 2002:
European Standing Committee B—Relevant European Union document: 8351/02; Reception of asylum applicants. Relevant European Scrutiny Committee Report: HC 152-xxxi (2000–01);
[Tuesday 18 June 2002:
European Standing Committee B—Relevant European Union Documents: 8389/02; Broad Economic Policy Guidelines. Stability and Convergence Programmes: SN 1107/02; SN 1108/02; SN 1109/02; SN 1111/02;
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SN 1112/02; SN 1113/02; SN 1319/1/02 REV1; SN 1320/1/02 REV1; SN 1321/02; SN 1322/02; SN 1323/02; SN 1324/1/02 REV1; SN 1325/1/02 REV1; 2002/C 51/06; SN 1361/02; SN 1382/1/02 REV1; SN 1383/1/02 REV1. Relevant European Scrutiny Committee Reports: HC 152-xxiii and HC 152-xxxi (2001–02)].
Mr. Forth: I am grateful to the Leader of the House for letting us have the business. May I ask him when the Government intend to bring forward proposals, or a resolution, to enable the Select Committee structure to reflect the recent changes in the structure of Government Departments? Given the right hon. Gentleman's respect for the Select Committee system and the known desire of the House to maintain and strengthen it, we are all keen that those proposals should be introduced as soon as possible.
Given the excellent ten-minute Bill introduced by my hon. Friend the Member for Rayleigh (Mr. Francois) yesterday, may I ask the Leader of the House when the Government intend to do something about the Data Protection Act 1998? My hon. Friend should be praised for bringing this matter to the attention of the House in such a positive way. I know that it is in the mind of the Leader of the House to do something about this, but a lot of time has now passed and hon. Members are getting anxious about it. We would be grateful if the right hon. Gentleman could tell us when the Government are going to seize the issue and deal with it.
On the debate on energy next Thursday that the Leader of the House has just announced, does it not seem a little odd that the Select Committee on Trade and Industry will be on a fact-finding visit to China next week? The oddity is that the Government should select next week to debate energy, because one of the documents relevant to that debate is the Trade and Industry Committee's report on energy. I would not dream of accusing the Government—or, indeed, the Leader of the House—of sinister motives or any sort of dodgy conduct in this regard, but, given that we now know that the Select Committee will be away, I would ask the right hon. Gentleman to look again, even at this late stage, at the timing of that debate, to give the relevant Committee members an opportunity to participate in this long-awaited debate on a subject for which that Committee has responsibility. I hope that he will agree that that is not an unreasonable request.
On 20 October 1998—I refer to column 1071 of Hansard—the hon. Member for Carshalton and Wallington (Tom Brake) asked the Deputy Prime Minister to confirm that, in June 1997, he had said:
"I will have failed if in five years time there are not…far fewer journeys by car. It's a tall order but I urge you to hold me to it:"
In reply—this is set out in Hansard—the Deputy Prime Minister said:
"The hon. Gentleman quoted both the question and the answer and I agree to keep to that commitment: judge my performance in five years."—[Official Report, 20 October 1998; Vol. 317, c. 1071.]
All that I ask the Leader of the House is this: when will he give the Deputy Prime Minister an opportunity to come to the House and be judged, as he invited us to do? That is a very straightforward question. It is straight out of Hansard—there can be no question about it.

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In that context, I am sure that the House will welcome the widely quoted words of the Leader of the House yesterday. Among many other excellent statements, he said:
"we have failed if we allow presentation to become more important than substance."
He went on to say that he was always a close admirer of John Smith, whose strength was
"the blunt honesty of his political style."
I am sure that everybody in the House will welcome the right hon. Gentleman's words and that he speaks for all of us in this respect. The trouble is that that seems slightly at odds with what seems to be going on even now inside the Government and in several Departments.
For example, following on from the comments that I have just quoted from the Deputy Prime Minister, why were many newspapers quoting Whitehall sources as having denied what he had said? How does blunt truth and honesty come into that? Or to take a different example, when will we get to the bottom of the case of Mr. Hood, that special adviser from the Ministry of Defence who now has a highly paid and cushy job on the back of having been a special adviser? Apparently, on Monday, the Cabinet Office was saying that it had not been part of the process and that there was no need for it to be so, but that is directly at odds with what the Prime Minister said yesterday in column 858 of Hansard. He said that the process of dealing with Mr. Hood
"was done in consultation with the Cabinet Office in the normal way."
Despite the words of the Leader of the House yesterday, we have examples of how a Department is saying one thing on the one hand, and the Prime Minister is saying something completely different on the other.
To give yet another example, what about the bizarre episode involving the Press Complaints Commission" Without going into the details—I am sure that the House would not want me to do so at this stage—all that I ask is this: who should we believe? Perhaps the Leader of the House can tell us. Should we believe No. 10 Downing street or Black Rod'? It is a pretty simple choice. I do not know which one the right hon. Gentleman believes; perhaps he will tell us. Perhaps we should have an opportunity to debate the matter in some detail, because it touches on some very important issues.
There was another bizarre episode just yesterday. In column 862 of Hansard, the Prime Minister said:
"I can tell the House that as a result of the new deal, the number of young people who are on the dole today is 4,500."
Almost immediately, in column 867—you will recall what was said, Mr. Speaker, as you were in the Chair—my hon. Friend the Member for Havant (Mr. Willetts) said:
"the correct figure is 244,000."—[Official Report, 12 June 2002; Vol. 386. c. 858, 862–867.1
Someone is wrong and someone is right, so all I ask is that the Leader of the House give the Prime Minister the chance to come to the House as a matter of urgency and tell us whether he was right in saying that the figure was 4,500 or whether my hon. Friend the Member for Havant was right in saying that it was 244,000. There is a discrepancy and I think that we are owed the truth.
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Leading directly from what the Leader of the House said yesterday—and we want to support him in what he said—all that we are asking is that he give his colleagues opportunities to come to the House to correct the record, tell the truth and put an end to all this spin and deception.
Mr. Dennis Skinner: What a load of crap.
Mr. Cook: I am not quite sure how that will he reported in Hansard tomorrow. I was about to begin by welcoming the support of the right hon. Member for Bromley and Chislehurst (Mr. Forth) for what I am trying to do.
Obviously the right hon. Gentleman has missed our weekly exchanges over the past two weeks, because he has given me a real multiple choice question this afternoon. I shall try to address all his points as briskly as I can.
On the changes to Select Committees, it is a cardinal principle of our departmental Select Committee system that the Select Committees should track the Whitehall Departments. It is therefore necessary that we should put the Transport, Local Government and the Regions Committee on the same footing as those Departments that now exist in Whitehall. I am keen to make sure that when we do, we do so in a way that ensures continuity of scrutiny of those Departments. For instance, the DTLR Select Committee has just commenced the study of the draft local government Bill that was published yesterday, and I would not want to see that work disrupted.
Before we rise for the summer, I intend to bring before the House a motion that will establish new Committees, but I will do so in way that ensures that there can be continuity of scrutiny and no break between one set of Committees ending and new Committees starting.
Mr. Forth: And the Chairmen?
Mr. Cook: It is not for me to decide on the Chairmen. I am very grateful to say that it is for the House to decide on the members of those Committees and for the Committees to decide on their Chairmen, thank heavens.
Moving swiftly on to safer territory, on data protection, I can say to the House that I anticipate that before the summer recess we will bring before the House a statutory instrument, and it would be my intention to address the two big problems affecting Members in their constituency work. The first is the rather bizarre argument that we should not be empowered to pass on to any third party what a constituent says to us in our surgeries. That seems topsy-turvy to me; constituents come to our surgeries in order that we then tell someone about their problem. Secondly, we want to remove from those to whom we write on behalf of the constituent any impediment to their replying frankly and openly about what they may know about that constituent's case. That would be of great assistance to Members on both sides of the House and I hope that we can take that step.
On the debate on energy, the right hon. Gentleman has been here as often as me when I have been lobbied from both sides of the House, but particularly from my right hon. and hon. Friends, on the importance of having such a debate. When I announced that debate three weeks ago,

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there was a broad welcome from Members in the Chamber that we were to have an opportunity to explore energy-related matters.
Mr. Forth: The Select Committee will he away.
Mr. Skinner: There's always somebody away on a junket.
Mr. Cook: I was going to express it with more dignity and respect for the Select Committee than my hon. Friend, but it is open to members of the Select Committee to be here for the debate rather than elsewhere if they choose to do so, and there will be plenty of Members who will wish to take part.
I looked at the possibility of delaying the debate but, as the House will see, the subsequent week is crowded. If I were to delay the debate, I would need to delay it for some time. That would not be welcomed by the majority of my right hon. and hon. Friends who want to proceed with this important debate.
On the question of the Deputy Prime Minister, the right hon. Gentleman will have seen the terms of the reshuffle and he will know that the Deputy Prime Minister has assumed a responsibility which will, I am sure, involve him in more exchanges in the House. If hon. Members wish to question him on any matter, they will have the opportunity to do so. However, I have to say that the key reason why we have seen increased mobility within Britain and the increase in the number of journeys is because of the remarkable success of the Government in running a sound economy with fast growth, for which we make no apology.
I appreciate the right hon. Gentleman's support for the speech that I made yesterday to the Press Gallery. I shall try to make sure that, on future occasions, he is in the audience in order that he may vocally support and applaud me in the course of what I say. I remind him that one of the passages that he might have found more difficult to applaud had he been there was that in which I expressed pride in the record of the Government, particularly in the way in which we have secured a sharp drop in poverty among children and, at the other end of the age spectrum, produced a sharp rise in the income of the poorest pensioners.
It is perfectly true that I offered the Press Gallery a deal, and the right hon. Gentleman accurately quoted part of it; it was that the Government should cut out the spin and cut down the packaging and that the media should concentrate more on reporting content and substance, rather than the Westminster village gossip. I very much hope that since the right hon. Gentleman is persuaded by one half of the deal, he might buy the package as a whole. Our people out there want to hear about how politics are affecting their lives, not about the lives of spin doctors and press officers.
On Andrew Hood, I should declare an interest—Andrew Hood worked for me for some eight years as a special adviser, in opposition and at the Foreign Office. I would not wish any Member to be mistaken about the interest that I have in his welfare, his future and the success of his career. The approval of his appointment to
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a private sector firm was indeed handled in the normal way. The Cabinet Office was consulted about the procedure—
Mr. Forth indicated dissent.
Mr. Cook: It was consulted. I am not saying that it approved the outcome, but it was consulted about, and approved, the procedure. The decision was taken not by Ministers but by officials, in full agreement with the permanent secretary. It should be stated that Mr. Hood had no dealings of a commercial character with commercial firms, and he was not closely involved with suppliers to the Ministry of Defence. Nor does his appointment at Brunswick involve his working with clients. Having said that, as somebody who wishes Mr. Hood well and who has a very high regard for him, I am not at all surprised at his securing a position of high status in the private sector. However, I am always mildly ambivalent about seeing a good man go into public relations. [Laughter.]
On the numbers involved in the new deal, what the Prime Minister said yesterday reflects entirely accurately the number of long-term young unemployed who have been unemployed for more than 12 months. Whatever definition the right hon. Gentleman chooses to apply—6 months or 12 months, new deal or otherwise—any figures that my right hon. Friend the Prime Minister produces for long-term young unemployed people will be lower than those recorded when the right hon. Gentleman's party were in office. That improvement is another thing of which I am proud.
Mr. Paul Tyler: May I suggest to the Leader of the House that we could all have been in his audience if the speech that he made to the Press Gallery had been made in the House? Why did he choose to talk to the media about their role in sleaze, spin and funding of democracy? Surely such a speech should be made only here. Why has he denied on several occasions on Thursday afternoons that the Government have any new proposals on the state funding of democracy? As recently as 23 May, he told me at business questions that there was no such proposal, but he seems now to be saying that there is a new proposal. Can we have an urgent statement and a debate in the House on the funding of democracy?
I also remind the Leader of the House that, on 23 May, he promised me that he would examine the outcome of the war pensions appeal tribunal's decision in the case of Shaun Rusling. The right hon. Gentleman will recall that, according to a tribunal report, the Ministry of Defence changed the terms of the submission to avoid any responsibility for Gulf war syndrome. May I ask him to expedite a statement from the Secretary of State?
The Leader of the House will be aware that, next Tuesday and Wednesday, the US congressional sub-committee on national security, veteran affairs and international relations will hold unprecedented hearings in Parliament—in Portcullis House—on Gulf war veterans and Gulf war syndrome. I ask that we have the Secretary of State's statement on the Rusling case before those hearings take place, given that they are material to it.
In view of the squalid little conspiracy between Conservative and Labour Whips on 16 May, which defeated the right hon. Gentleman's own proposals for

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more transparent and open appointments to Select Committees, has he received appropriate assurances that appointments to the new Transport Select Committee will not be interfered with in that way, and that the appointment of the Chairman will not be subject to such interference?
Mr. Cook: The simple and straightforward answer to the question of why I spoke to members of the Press Gallery is that they invited me to do so. Indeed, I should tell the House that there may well be future occasions when I accept invitations to speak outside this House. I stand entirely by what I said to the hon. Gentleman in our previous exchanges: there are no Government proposals for state funding of political parties, nor did I pretend yesterday that there were. However, as I have said, there is a debate as to whether there should be such funding.
As I observed to the Press Gallery yesterday, its members have put beyond all doubt the fact that business donations are open to innocent misconstruction, and that has certainly been the role of the press in this matter in the past six months. Donations by, and funding from, the electorate as a whole are not open to such misconstruction. It is my personal view—I do not claim to speak for the Government collectively—that the credibility of Parliament is being undermined by the current argument over funding of political parties. We cannot have parliamentary democracy without political parties, and we cannot have political parties unless they are funded. I believe that the best, most secure and most transparent way to fund political parties that is least open to misconstruction is from the public purse. I have no doubt that, in future, we will return to the issue on several occasions in the Chamber.
As I recall, when the hon. Gentleman asked me about the tribunal ruling and Gulf war syndrome before the recess, I said that the Ministry of Defence will want to consider carefully the judgment and respond in due course. I shall certainly draw Ministers' attention to the hon. Gentleman's view that due course has now arrived and that it is time that the MOD expressed its view on the tribunal ruling and gave its response.
Little new can be said about the vote in May. I am pleased that a majority of Labour MPs voted for reform, and I regret that I did not have a majority of the Labour Whips voting with me for reform. [Interruption.] My hon. Friend the Deputy Chief Whip was a paragon of virtue on that occasion. As for any future appointment to a Select Committee that will arise from the orders that I shall put before the House, I remind the House that the Labour party has already changed its procedures and the decisions will be made by the party, not by just the Whips.
Mr. Derek Foster: Within the context of five years of outstanding management of the economy, when will the Government tackle the problem of the two-speed economy, which discriminates against areas such as the north-east that are strong in manufacturing, to the extent that despite continuous growth we have fallen further behind the nation as a whole? May we have a debate on that issue?
Mr. Cook: I would stress to my right hon. Friend that the Government have placed strong emphasis on regional policy. That is why we have introduced the regional
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development agencies and recently published a White Paper on the potential for regional government for those regions that wish it. On economic policy, it is a remarkable and substantial achievement of this Government that unemployment in every region of the UK is now lower than the EU average. I share my right hon. Friend's concern about manufacturing and he will be aware that the Secretary of State for Trade and Industry has made a specific statement on her strategy for manufacturing. The issue is at the front of her concerns and we will continue to do all that we can to ensure that manufacturing shares in the remarkable growth and success of the British economy.
Sir George Young: Can the Leader of the House tell us how the Chancellor is getting on with his comprehensive spending review? Can he give a date when the Chancellor will make a statement to the House? Against the background of what the Leader of the House has just said, can he assure us, first, that the outcome of the CSR will not be trailed, leaked or spun to the press and that the House will hear it first and, secondly, that we will have an adequate opportunity to debate it?
Mr. Cook: I am happy to assure the right hon. Gentleman that the spending review will be of great importance to Government, Parliament and the nation and, therefore, must be adequately considered in the House. I have no doubt that that will take place. However, I would be in grave difficulty with my right hon. Friend the Chancellor and many other members of the Cabinet if I were to reveal now what will happen in the spending review. I am grateful to the right hon. Gentleman for his invitation, but I will resist temptation. As for the date, I anticipate that it will be before we rise for the summer recess, but I cannot go further than that now.
Mr. Gordon Prentice: On Wednesday night, we will be presented with a list of names for the new Joint Committee that will consider the reform of the House of Lords, but no one has asked me if I want to join the Committee. I feel that I have something to contribute, and I think that my hon. Friends would agree with me—[HON. MEMBERS: "Hear, hear."] I would like this to be taken as a formal application to join the Committee and I look forward to hearing the response from the Leader of the House.
Mr. Cook: I am delighted to respond by saying that I take note of my hon. Friend's application, although I hope that it will not be a precedent for the remainder of the business statement to be turned into applications for membership of the Joint Committee. I anticipate that the names will be tabled on Monday night and will appear on the Order Paper on Tuesday, so that we may have a full debate on Wednesday.
Mr. Forth: It has all been decided. It is long done.
Mr. Cook: I assure the right hon. Gentleman that nothing has been decided and will not be decided until Monday when we table the motion. However, I draw the House's attention to the fact that we have provided—by agreement with the Opposition, for which I am grateful—for a three-hour debate on the motion on Wednesday.

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That is right, given the importance of that Committee and the Government's innovation in proposing a Joint Committee and asking Parliament to decide that important policy question. The House should welcome the opportunity to express a view.
Mr. Mark Francois: I thank the shadow Leader of the House for his kind remarks and I welcome the announcement by the Leader of the House that he will introduce a statutory instrument to solve some of the problems with data protection by the summer recess. As the Member who moved a ten-minute Bill on the subject yesterday, I am grateful to hear that. In the right hon. Gentleman's negotiations—presumably with the Lord Chancellor's Department and the Information Commissioner—will he concentrate on the question of so-called sensitive personal data, as defined in the Data Protection Act 1998, as that appears to be the principal sticking point, in particular in correspondence with social services departments and national health service trusts?
Mr. Cook: I am well aware of the matter to which the hon. Gentleman refers and I thank him for having ventilated it in the Chamber in a way that received support from both sides. The sensitive information is the nub of the problem. In truth, we cannot serve our constituents when they come to see us about matters to do with the health service, for example, if we cannot have a free and frank exchange with the relevant authorities about such sensitive data. That is why we will be introducing a statutory instrument that will enable us to carry out a representational function that none of us thought would be impeded when we passed the 1998 Act.
Mr. Malcolm Savidge: Following last Monday's welcome statement, may we have further opportunities to consider India and Pakistan? May I draw my right hon. Friend's attention to early-day motion 633?
[That this House urges the Governments of India and Pakistan to seek to resolve their differences peacefully and to reduce the risks of nuclear conflict.]
That motion has already attracted the support of 417 Members of Parliament from across the political spectrum, including prominent supporters of each of those countries. It reflects the extent to which Parliament shares the Government's grave concern that, notwithstanding recent progress, there remains a high risk that confrontation could turn into war, which could go nuclear, bringing terrible suffering and death to many millions of people in southern and even central Asia.
Mr. Cook: My hon. Friend is right to draw attention to the fact that that remains a matter of concern and that too much tension remains within the subcontinent. I very much welcome the steps that have been taken recently on both sides to reduce that tension. I hope that we can accelerate those steps so that it is clear that both sides have backed away from any attempt at a military solution to a problem that can be resolved only through diplomatic progress and a greater rapprochement between the two countries, both of which we regard as our friends. Obviously, my right hon. Friend the Foreign Secretary
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will be considering developments carefully. Should there he a requirement for a further statement, I am sure that he will wish to make one to the House.
Mr. Henry Bellingham: The Leader of the House will be aware that on Tuesday, Mr. Speaker kindly allowed me to raise, under Standing Order No. 24, the redundancies at Fisher Foods, where 400 people have already been made redundant and there may be another 1,000 job losses in the community. He has also kindly allowed me an Adjournment debate on the subject next Thursday. Is the right hon. Gentleman aware that Government Departments are involved, namely, the Department of Trade and Industry, the Department for Work and Pensions and the Department for Environment, Food and Rural Affairs? What mechanism exists to try to co-ordinate the approach of those Departments and what advice would the right hon. Gentleman give me?
Mr. Cook: If I remember correctly, the company to which the hon. Gentleman refers is the same company that was involved in the closures at Peterhead, with which we dealt in a business statement just before the recess. As I said then, Government Departments are very willing to assist in any way that is valuable or relevant to find alternative buyers and an alternative future for the employees. I fully understand his concern and that of the hon. Member for Banff and Buchan (Mr. Salmond) that the plants that are at risk—and the work force who face redundancy—are highly profitable, successful and have made a large amount of investment. It is important that we do all that we can to ensure that they can continue in production if at all possible. In the first instance, that is a matter for the private sector, but we stand ready to help in any way we can to find alternative management so that production can continue and to assist the work force should they face redundancy and loss of employment. There is a well worn and well trod path of co-operation through which those Departments will put in a joint task force to assist the work force and the local economy. Since the hon. Gentleman invited my advice, I suggest that he discusses that with the DTI and the DWP.
Mrs. Alice Mahon: I am sure that the Leader of the House is aware that today the United States formally withdraws from the anti-ballistic missile treaty so that it can develop its national missile defence system. I draw his attention to early-day motion 1279, in which hon. Members express their concern about the matter.
[That this House notes the death of the ABM treaty in mid-June owing to USA withdrawal and recognises that the United States Government is now free to request use of Menwith Hill and Fylingdales as part of its proposed missile defence system; further notes that any use of these bases for a missile defence system will directly affect the people of the United Kingdom and that as yet their representatives have had no chance to express their views on the proposals in parliament; and urges the United Kingdom Government to call an urgent debate in the House before any such system is considered.]
Given the awful effects that the development of that system could have on world peace and the threat to this country in particular if the facilities at Fylingdales and Menwith Hill are used, will he assure the House that those

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facilities will not be made available and that time is allowed for an urgent debate on the matter, which surely affects all of us?
Mr. Cook: We have had no request for the use of those facilities for any such new purpose. Should such a request be made and should the Government reach a view on it, I am sure that the matter will be debated and explored in the House. In the meantime, surely we must all welcome the recent historic agreement between the United States and Russia to achieve historic cuts in their nuclear arsenals, taking us to levels that we had never hoped to secure. I very much welcome the agreement that has been reached between those two countries, which are of course the only signatories to the anti-ballistic missile treaty.
Mr. Roy Beggs: As we Ulster Scots would say, "There's mair than yin moose loose aboot this Hoose". I have seen a mouse in the Terrace cafeteria, in the Members' Tea Room and, indeed, in the House of Lords. Is the Leader of the House taking seriously early-day motion 1393?
[That this House is concerned at the large number of mice which currently reside in the Palace of Westminster including the dining rooms; believes that it would be fiscally prudent for the Sergeant at Arm's Department to invest in a House of Commons cat to try to tackle this problem; and calls upon the House of Commons Administration Committee to investigate this matter.]
Will the right hon. Gentleman address the problem? As a cat lover and with some experience, I know that, as the mice do not discriminate between the Lords and the Commons, the problem will have to be addressed in similar ways. Will the right hon. Gentleman accept my advice that the females of the species are much better hunters than tom cats?
Mr. Cook: I understand the concern that prompts the hon. Gentleman's question. The Chairman of the Catering Committee, with his characteristic vision and foresight, suggested some years ago that we might employ a cat in the House. I have some sympathy with the view expressed by the right hon. Member for Maidstone and The Weald (Miss Widdecombe) that if there was a House of Commons cat it would rapidly become spoilt and overfed and would compete with us for the use of the sofas in the Library. As the proud owner of two Scottish terriers, I might move the modest amendment that we should try a Scottish terrier.
Llew Smith: The Leader of the House will be aware of concerns that terrorist groups can obtain materials to produce nuclear weapons. He will also be aware that Governments of different political philosophies already have such weapons and that if they are used they would be just as catastrophic as if they had been deployed by terrorist groups. Because of the consequences of the use of nuclear weapons, can time be set aside for a debate on weapons of mass destruction?
Mr. Cook: I am not sure that I can promise the House the opportunity for a specific debate on weapons of mass destruction, although the issue frequently arises when we debate other matters—notably, for instance, in relation to our anxiety to ensure that Saddam Hussein does not
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succeed in his ambition to acquire such weapons. I am sure that my hon. Friend would back the Government fully in our efforts to ensure that that does not happen.
I wholly share my hon. Friend's view as to the importance of ensuring that we guarantee that the non-proliferation regimes are as healthy and strong as possible. I also share the view that, as we have managed to secure an end to the cold war and a reduction of tension in the northern hemisphere, we may be becoming complacent about the degree of risk from nuclear weapons elsewhere. It is in the interest of us all to ensure that nuclear weapons are not used in any circumstances, whether by Governments or non-governmental bodies.
Dr. Julian Lewis: May we have a statement from the Prime Minister or, even better, a debate on early-day motion 1412?
[That this House is concerned to see the name of the honourable Member for Swindon North still listed on the official 10 Downing Street website as one of eight former Government ministers who had resigned; notes that the honourable Member was reported by the media as long ago as 2nd June to have been appointed Minister for Information Technology and Criminal Justice at the Home Office, but that this appointment had still not been listed on the Home Office Ministerial Team page of the official Home Office website by 10th June; and calls upon the Prime Minister to consult with other relevant Cabinet ministers to clarify the position.]
The early-day motion concerns the status of the hon. Member for North Swindon (Mr. Wills). The Leader of the House may be aware that on 29 May the Government reshuffle announced that the Queen had accepted the resignations of eight Ministers, including the hon. Gentleman. On 2 June, however, the press reported that the hon. Gentleman had been appointed a junior Home Office Minister, yet for a full fortnight after the first announcement the official No. 10 website recorded that the hon. Gentleman had indeed resigned and that the Queen had accepted that resignation. Only yesterday, after the tabling of the early-day motion by my hon. Friend the Member for Tatton (Mr. Osborne), was the official website altered. It now states that the hon. Member for North Swindon has indeed been appointed an Under-Secretary of State for the Home Department and that he is
"driving forward the reform to business processes and working practices … to deliver a modern and joined up Criminal Justice System".
It does not sound very joined up to me. Even today, when one enters the words "Michael" and "Wills" on the search engine of the Home Office website, why can one find no trace of him?
Mr. Cook: I have to confess to the hon. Gentleman that I have not had the leisure to peruse the websites as frequently and with such diligence as he has, and I am sure that the House is grateful to him for his explanation of his experience of surfing the Home Office website. My hon. Friend the Member for North Swindon (Mr. Wills) is indeed now at the Home Office, and I understand that he will be in action next week when he presents a Home Office statutory instrument.
If I may allude to an earlier exchange in the House, I have found my hon. Friend the Member for North Swindon extremely helpful in the matter of data

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protection. If we are successful in carrying that statutory instrument, I would want my hon. Friend's role to be properly recognised.
Dr. Stephen Ladyman: Greenpeace has responded to the Prime Minister's speech on science by suggesting that the application of science in the future should become some sort of popularity contest, ignoring completely the fact that, unless scientists are allowed to get on with their research, we will not have any technology to apply in the first place. When will we debate science? When will we debate the Prime Minister's speech? When will we get an opportunity also to put ideas such as creationism firmly in the file marked "crackpot"?
Mr. Cook: I am very firmly of the view that those who teach science in our schools should stick very closely to established and agreed scientific fact and that we should not confuse that process by offering our school children an alternative perspective that has no sound scientific basis. I am not sure that one can readily argue that it is good teaching if children are offered as equally valid a scientific and a non-scientific explanation, and my hon. Friends at the Department for Education and Skills have to reflect on that matter with great care.
On the central point that my hon. Friend makes, I totally agree with him on the importance of our pursuing and providing every opportunity for scientific research. None of us, sometimes including those who are involved in the research, knows what may come of it at the end of the day, and we should not prejudge it before we start.
I entirely share my hon. Friend's wish for science to be debated properly. I particularly welcome the bid for the House to debate the Prime Minister's speech; I am always happy to consider such bids favourably. Given the crowded schedule of legislation that we have to clear before the summer recess, I cannot promise that that will be possible on that timetable, but we shall certainly consider my hon. Friend's wish, which the Prime Minister will share, to consider carefully his very good speech on science policy and its importance to our nation.
Angus Robertson: I am not certain whether the Leader of the House has been able to read the excellent report, published this week by the European Scrutiny Committee, entitled "European Scrutiny in the Commons", among the conclusions of which was the concern of members of that Committee, including myself, that
"not all information about EU discussions relevant to the devolved administrations and legislatures has been forwarded to them by UK Departments."
The Committee has received some documentation from various Departments in which they confirmed that they had not been forwarding key documents about Council of Ministers' meetings. That contradicts parliamentary answers, stating that information is shared, to written questions that I have tabled, as well as assurances by the United Kingdom Government and Ministries that agendas would be distributed, and it breaches the spirit of the concordats signed with the devolved Administrations.
Since the publication of that report, the European Scrutiny Committee has received information from the Department for Environment, Food and Rural Affairs
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about who will receive the agendas for this week's Council of Ministers' meeting on fisheries, but it does not mention the Scottish Executive, nor the Administrations of Wales or Northern Ireland. That is of great concern to members of the European Scrutiny Committee and hon. Members from Wales, Scotland and Northern Ireland. Will the Leader of the House find the time for us to debate that matter?
Mr. Cook: I have read the Committee's recommendations. I regret to say that I have not yet had time this week to read the full argument leading up to those recommendations, but I thought that that would be a satisfying way in which to pass part of this weekend.
On the specific point that the hon. Gentleman raises, as Foreign Secretary I oversaw the agreement of the concordats between ourselves and the devolved bodies. I am very keen that we ensure that we honour not only the letter but the spirit of those agreements. By and large, relations between central Government and the devolved bodies over presentation in Brussels have worked well, and it has been a good partnership, but we shall certainly look carefully at whether there is any way of improving the distribution of documents as part of that process.
Mark Tami: Will my right hon. Friend allocate time for an early debate on the actions of e-SURE, the internet insurer, which has announced that it will be considering withdrawing the option of cover for up to 10 per cent. of its customers because of where they live? Does he agree that that breaks the moratorium that has been agreed with the rest of the industry? Will he consider how the industry designates a flood area? Sealand in my constituency has not flooded to any serious extent for more than 200 years, yet it is considered at high risk.
Mr. Cook: I am not an expert on the areas to which my hon. Friend refers, but 200 years seems to be a fairly solid basis on which to make an insurance judgment for the future.
The matter came up yesterday during Prime Minister's questions, and I remind the House that the Government are investing several hundred million pounds in trying to ensure that we improve flood defences in order that no substantive population should have to experience the difficulty to which my hon. Friend refers.
As we work hard to try to ensure that we secure the future of properties and communities, and that no household is disadvantaged by its location and the flooding that we have come to expect over recent years, I hope that the private sector will consider how it can assist, and that the insurance industry in particular will reflect on whether it is wise to act at the very time that we are trying to ensure less flooding rather than more.
Mr. Mark Simmonds: Will the Leader of the House please find time for a full and urgent debate on the crisis in national health service dentistry? In my constituency, particularly in Boston, 2,000 people have recently been deregistered from an NHS dental practice, others are having to wait more than three years to be allocated an NHS dentist, and both adults and

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children are not able to access dental care—either routine or urgent. In a low-wage area such as my constituency, the crisis is causing great hurt to those who are hardest hit.
Mr. Cook: We are seeking to put more money into NHS dentistry, as we are into all parts of the NHS, and we are trying to ensure that members of the public have access to NHS services. The hon. Gentleman is sadly mistaken if he imagines that the problem has arisen only recently. I do not know what he was saying to his own Government when they were in power for 18 years, but during that period, particularly latterly, they dramatically increased charges for NHS dentistry. It was perfectly clear to those of us in opposition at the time that there was a clear strategy to make NHS dentistry so expensive that more and more dentists and patients would be driven into the private sector. We saw the problem coming for the public; it is a pity that the hon. Gentleman did not acknowledge it until it was happening.
Mrs. Ann Cryer: Could time be found for a debate on the appalling behaviour of some loan sharks—in fact, all loan sharks? I refer to that because one has had a particularly terrible impact on one of my constituents, Doris Armstrong, who has successfully seen him off through the courts. He was an appalling example of the sleazy end of the financial services industry. If it were not for the courage of Doris in taking him through the courts, she would now be homeless due to a loan for £2,000 that she took out 10 years ago and has repaid—I think—three times over.
Mr. Cook: I congratulate my hon. Friend's constituent on her courage and determination and her success in the courts. At the bottom end of the financial services market, unscrupulous people are charging wholly intolerable interest rates that would never be contemplated by those who had sufficient income to pick and choose from whom they were taking money and the borrowing undertaken. It is right that those unscrupulous people should be exposed, and I congratulate my hon. Friend on having raised a very important issue in the Chamber.
We have just reorganised financial services regulation and I hope that will result in proper and proportionate attention being paid to those at the bottom of the market who exploit the poverty of the most desperate.
Mr. Peter Viggers: Will the Leader the House find time soon for a discussion on the availability of advanced drugs in the national health service? To give two examples, visudyne can prevent blindness in cases of macular degeneration and glivec halts the progress of myeloid leukaemia in seven out of 10 cases. Both drugs are readily available in most European countries but are not readily available in the United Kingdom. That must be wrong. As one consultant has said:
"When we have one of the hest drugs that was ever invented nobody will let us use it. It is bonkers. This policy is costing lives "
Could be therefore have a debate on the terms of reference of the National Institute for Clinical Excellence?
Mr. Cook: It was a decision of the Government that we should make sure that decisions as to whether drugs can be prescribed on the NHS should be taken not by politicians, but by medical and scientific experts. That is why we set up NICE. Not all NICE's recommendations
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have met with universal political and public approval and some have resulted in controversy. However, I still believe that the principle is sound and right. As a member of the Cabinet, I have not the least scientific qualification by which I can judge a prescription or a drug. It is right that we should have an independent body to advise us, and we should be very careful before we depart from the advice that it offers us after careful consideration.
Alan Simpson: May I repeat the request of my hon. Friend the Member for Halifax (Mrs. Mahon) for a debate on the implications for the United Kingdom of today's American withdrawal from the anti-ballistic missile treaty? My right hon. Friend the Leader of the House legitimately says that we have currently received no requests from the American Administration for the use of Menwith Hill or Fylingdales for their national missile defence programme. However, when asked the same question, my right hon. Friend the Secretary of State for Defence points out that, although there are existing budget lines in the American budget for upgrading work at both establishments for the new star wars programme, the Ministry of Defence says that it is a matter for the United States Administration and not for the United Kingdom. Surely, it is important that the House debates the wisdom or folly of any UK involvement in the nuclearisation of space and the consequences—catastrophic as they may be—for our involvement in that process.
Mr. Cook: I do not deny the importance of us having a debate on an important issue for our country that has wider repercussions for the state of arms control on the globe. However, when we have that debate, it must be founded not on something that may be proposed by the United States in its budget but on a request that it makes to the Government. When we receive a request, I know that my right hon. Friend the Secretary of State for Defence will respond and I am sure that any response will be a matter for debate and exchanges in the House.
Dr. Evan Harris: I should like to ask the Leader of the House a question about the use of the Parliament Act, a tool that is used to ensure that the will of the elected House is not in the end blocked by the House of Lords. Is it his and the Government's view that the procedure should be used to ensure that votes on large majorities in this House can find their way into legislation even when they are delivered in a free vote? Or is the tool to be used only to defend Government-backed policy and Government Bills? In other words, can the Government be trusted to use the Parliament Act to defend the will of the House as expressed in a free vote or is it used to defend just Government Bills and Government policy?
Mr. Cook: I will need to do some research in my weekend reading. However, as I recall it, the Parliament Act does not make any distinction between a vote in the House on a party basis and a free vote. It would therefore apply equally to both.
The hon. Gentleman's question is slightly elliptic, but the Government are seeking a consensus on a way forward on—if I can use a word he avoided—hunting.

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Whether we shall be able to secure that consensus remains to be seen, but we have promised a free vote in the House. Thereafter, the legislation will take its course.
Dr. Brian Iddon: May I also welcome the Prime Minister's speech to the Royal Society on 23 May in support of science and the remarks by the Chancellor echoing that speech at the Amicus conference in Blackpool? However, not everything is rosy in the arena of science. The Roberts report brought some of the problems to the notice of the House. There are also problems with science teaching in schools, and science departments in universities continue to close. Salford university had the largest chemistry department, in which I used to work, in Britain in the 1970s. Last week, it announced its closure with a terrible loss of resources, including staff and library facilities. May I underline the request made by my hon. Friend the Member for South Thanet (Dr. Ladyman) that we have a debate on science? I hope that my right hon. Friend the Leader of the House will allow that to happen as soon as possible in the autumn.
Mr. Cook: I shall certainly put down the interest in a debate on science as something for us to consider when the opportunity arises. I welcome what my hon. Friend says in praise of the speeches by my right hon. Friends the Prime Minister and the Chancellor of the Exchequer. I always welcome the opportunity to support and agree with as many speeches as possible by my Cabinet colleagues.
As my hon. Friend underlines, there is a commitment to science at a high level in the Government. We certainly want to ensure that we maintain the strong, excellent and necessary infrastructure that we have in science teaching and research in this country.

Consignia
1.21 pm
The Secretary of State for Trade and Industry (Ms Patricia Hewitt): I should like to draw the attention of the House to my declaration of interests contained in the register.
With permission, Mr. Speaker, I shall make a statement to the House on postal services in Britain. This morning, Allan Leighton, the chairman of Consignia, announced the second phase of the company's restructuring plans. He announced that the Royal Mail would save £350 million a year by moving to a single delivery at a consistent time, six days a week, and that those plans would result in a further 17,000 redundancies over the next three years. He said:
"The underlying loss from operations … graphically shows why we need to restructure the company and embark on a three-year renewal programme to restore profitability".
Thousands of postmen and women now face an anxious and difficult time. These are very painful decisions for the work force, who have shown their commitment to serving the public and who have often been frustrated and angered by poor management and failure to invest in better ways of working. Allan Leighton has made it clear that the company aims to achieve the reduction in jobs on the basis of voluntary redundancy and by offering alternative jobs within the company. Early indications from the Parcelforce restructuring, which I reported to the House on 25 March, suggest that that can be achieved. We will, of course, do everything that we can through Jobcentre Plus and other agencies to help people who leave the Royal Mail to get new jobs as quickly as possible.
The need for radical action is underlined by the company's financial results for the last financial year, published today, in which it announces a £1.1 billion pre-tax loss. Much of that loss comprises exceptional costs from restructuring, but the company made an underlying loss of £318 million on its day-to-day operations.
Central to the programme to restore the Royal Mail's business to profit, and to improve customer service and efficiency, is the reorganisation of mail deliveries that Allan Leighton announced today. The Communication Workers Union has said that it, too, supports the ending of the second delivery.
Twenty years ago, 15 per cent. of all mail arrived by the second delivery; today it is just 4 per cent. But that 4 per cent. of mail accounts for 20 per cent. of delivery costs and 30 per cent. of delivery time. Most other European countries, with far higher postal prices, make only a single delivery each day and none of them has a target of delivering before 9.30 am.
In future, customers who regularly receive 20 or more items of mail a day will get their delivery between 7 am and 9 am. That will include people working from home as well as businesses. All other customers will receive their mail by lunchtime. These changes will mean that 1 million more first-class letters every week should arrive on time. The changes will also mean that within a six-day delivery system, postmen and women will be able to work a five-day, instead of a six-day, week.

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Let me put Consignia's announcement into context. This morning, Allan Leighton said:
"These losses did not happen overnight. Unresolved issues and problems stretching back for up to a decade are reflected in these results".
When this Government came to office in 1997, we immediately took steps to fulfil our manifesto commitment to give the Post Office what management and unions had long been arguing for—greater commercial freedom. The Postal Services Act 2000 completed that process, creating a public limited company and giving it the freedom to borrow for growth investment. We cut the dividend to normal commercial levels and announced the appointment of a new finance director in October 2000.
In April 2001, Lord Sawyer was appointed to look at deep-rooted industrial relations problems in Royal Mail. This year, we strengthened management further by appointing a new chairman, Allan Leighton, and securing a new chief executive for the Post Office network.
Greater commercial freedom is the right policy, but in exercising those new freedoms, decisions were made that, with the benefit of hindsight, we can now see were wrong. In his announcement, Allan Leighton said:
"management mistakes have been made over a number of years".
The company decided, for example, to expand internationally, a strategy that was supported by many distinguished observers, including the Select Committee on Trade and Industry. But other European postal operators were already ahead of the game, and in the meantime, disastrously, Consignia lost control of its costs at home. Costs went on rising at a time when revenue growth was slowing. In 2001, the growth of mail volume, at 3 per cent., was half that of 1999.
The financial results published today show that, over the past year, overall turnover grew by 3.6 per cent., but that was outstripped by a 4.8 per cent. rise in costs. The result is that the company is now running at an underlying loss of £1.2 million a day. Those losses cannot continue, and over the next three years, under the renewal plan, the losses will be eliminated and the company returned to profit.
I can also inform the House that the company announced this morning that the group chief executive, John Roberts, will retire later this year once his successor has been appointed. The search for his successor will begin immediately.
Let me stress that today's announcement, like the Parcelforce restructuring, is not the result of any decision by the regulator. Both announcements are about stemming the losses and creating an efficient company. Today's announcement would have been made whatever the decision by Postcomm. However, I would like to put on record the fact that I welcome the announcement by Postcomm a few weeks ago about the adjustments to the timing of its proposals for market opening, the change in the definition of bulk mail and the decision to monitor the market closely to ensure that the universal service, its first statutory objective, is not put at risk. In reaching its decision, it is clear that Postcomm has listened to the many representations made by hon. Members as well as by other stakeholders, including the CWU. The challenge now for Consignia is to improve the quality and reliability of its services, so that it can keep its customers rather than losing market share.
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Let me deal next with the financial issues associated with today's announcement. I have agreed a package of measures to put the company on the right financial footing to enable it to deliver this renewal programme.
Consignia plc has reserves on its balance sheet of £1.8 billion, which represents accumulated past dividends and cash generated by the business. These are more commonly referred to as the gilts. We now propose that the £1.8 billion of gilts will be held by the group holding company as reserves while the business is being turned around. Those reserves will be available to back the investment required in the mails business to implement the renewal programme and to support the nationwide network of post offices, subject, where necessary, to the relevant state aid clearances.
As I explained to the House on 25 March, the Government have agreed to forgo the projected dividend for 2001–02, releasing an additional £64 million for the company. I told the House then:
"A decision on dividends for other years … will be taken in the context of the strategic plan."—[Official Report, 25 March 2002; Vol. 382, c. 571.]
I can tell the House today that the company will be allowed to retain the notional dividends for the previous year, as part of the overall £1.8 billion of reserves.
In addition, in case there is any doubt, I can confirm that the Government do not expect to take cash out of the business by way of future dividends during the three years of the renewal plan.
As part of the decision on the gilts, we have agreed to fund the Post Office network's historic losses. David Mills, the new chief executive of the Post Office, is working up a strategic plan for the network that will look at new ways of increasing revenues from commercial activities. As we informed the House on 26 April, we have also committed up to £210 million for compensation for sub-postmasters in the urban networks who are planning to leave the business, and for investment to improve urban post offices. The House will have a further opportunity to debate this when state aid clearance is granted.
I welcome today's announcement by the company that it intends to change its corporate name to Royal Mail Group by the end of this year. I can inform the House that Her Majesty the Queen has agreed in principle to this name change. I do not think that any of us will mourn the disappearance of the name Consignia.
Allan Leighton and his colleagues have shown that they are willing to make the very tough decisions that are needed to turn the company round. But the company is now set on a course for renewal and recovery. It will not be easy, as today's announcement shows, but it is essential if we are to have a Royal Mail that the work force can be proud of and that delivers the service that customers deserve.
Mr. John Whittingdale: I thank the Secretary of State for giving me good notice of the statement that she has just delivered. However, does she agree that the figures that have been announced by the Post Office today are truly shocking?
Three years ago, the Post Office was making annual profits of about £500 million. The then Secretary of State was boasting that it had a golden future in the public

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sector and that it was set to become a major global player. Instead, its performance has steadily deteriorated, morale and industrial relations have plummeted and it is now losing, by its own admission, £1.2 million every trading day. Yet this disastrous collapse has occurred during a period when the Post Office still has a monopoly in its core business, and when the volume of mail has gone on rising every year. It is an extraordinary achievement to have turned a highly successful business into a financial disaster, when turnover has gone on rising and it is protected from any competition.
As the right hon. Lady says, part of the blame lies with weak management. It lies also with militant trade unions. Ultimately, however, responsibility must rest with the Government, who remain the sole shareholder in the Post Office and who have been interfering in its management on a daily basis. Yet in her statement there was no acceptance of any blame on the part of the Government. Instead, as usual, she tried to suggest that somehow the fault all lay with the last Conservative Government. Will she at least accept that her Government must take some responsibility for this disaster and express some regret?
The measures that have been announced by the Post Office today are undoubtedly necessary. They will not have come as a surprise to the work force, who learned before Christmas that up to 30,000 redundancies were in prospect. At the time, we were told that that was speculative arithmetic. We now know that that forecast was entirely accurate, although we welcome the fact that it has been stated that it is intended to achieve the redundancies by voluntary means.
The Secretary of State said that the cost is to be met by utilising the money invested in gilts by the Post Office over many years. However, until now, that money was regarded as a payment to the Treasury under the requirements of the negative external finance limit. Will the right hon. Lady confirm that in essence the Government are giving the money back to the Post Office? Will she confirm also that that will require clearance by the European Commission under the provision for state aid?
I turn to the other elements of the restructuring proposals. The Secretary of State did not even mention that the Post Office has applied for a price increase in the cost of first and second-class mail. Will she give an indication of the Government's attitude towards that application? Is she satisfied that the Post Office will not simply try to increase its prices in the area in which it still has a monopoly to subsidise its heavily loss-making operations in areas where it is subject to competition?
The Secretary of State said that the changes would mean that in future up to 1 million more first-class letters should now arrive on time. I have to say that that is not much of an accomplishment if the target time for delivery is to be moved from 9 am to lunchtime.
The Post Office has sought to justify its decision to drop the second delivery on the ground that it accounts for just 4 per cent. of the mail, but 20 per cent. of its costs. Will the Secretary of State acknowledge the fears of some small firms, many of which operate from home, that rely on the post for their cash flow and orders and are worried that the decision may lead to a significant drop in the standard of service that they receive and add
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a significant extra cost? Will she ensure that people who are concerned that they may not qualify for the protection and additional priority given to those who receive 20 items of mail a day have some capacity to apply to the Post Office for priority treatment?
The Secretary of State made brief reference to the regulator's proposals to open the postal market to competition, which is clearly a crucial factor in the Post Office's long-term prospects. I welcome the fact that the Government have resisted pressure from Labour Back Benchers to abandon the commitment to introduce competition and that the revised timetable issued by Postcomm involves only a slightly longer delay before full liberalisation takes place.
Does the Secretary of State agree that liberalisation offers considerable additional opportunities to the Post Office, including new sources of revenue, by allowing other operators access to its delivery network? However, if that is to be achieved, it is vital that sensible network access charges are agreed, so does she share my regret that the Post Office has so far been unwilling to negotiate realistically with those who wish to set up competing services? Does she agree that if there is to be true competition, it should be on an equal basis, which requires the issue of VAT to be addressed? Does she accept that, under the present arrangement, the Post Office has a 17.5 per cent. cost advantage over its competitors for about half its business, which acts as a barrier to the development of fair competition?
What are the Government's long-term intentions for the Post Office? When the Postal Services Act 2000 was passed, we were assured that it would remain a fully state-owned corporation, yet we now know that just a short time afterwards, negotiations were opened to sell it to the Dutch post office, TPG, and that that would have happened had negotiations not broken down. Are any negotiations currently under way and are the Government still willing for the Post Office to be sold to a foreign operator such as Deutsche Post? What do the Government intend to do to maintain and sustain the post office network, particularly in rural areas? The Secretary of State barely mentioned that in her statement, yet it is now just nine months until payment of benefits across post office counters ceases, which will deprive sub-post offices of up to 40 per cent. of their revenue. Even now, the Department for Work and Pensions is preparing letters to benefit recipients informing them that in future they should get their benefits via bank accounts.
The recommendations of the performance and innovation unit report have not been implemented. The "Your Guide" project was successfully trialled in Leicestershire, but has now disappeared completely. The Postcomm report on supporting the rural network has been sitting on Ministers' desks since December, yet nothing has been done. The Government must make clear what they intend to do to maintain the rural network and prevent the closure of thousands of sub-post offices that are under threat.
Finally, I welcome the one piece of good news that has been announced today—the decision to drop the name Consignia and revert to Royal Mail. Will the Secretary of State admit that the decision to drop a name trusted and respected across the country and replace it with an utterly meaningless name that has become the object of mockery and derision was one of crass stupidity? Is it not typical of the Government that, rather than tackle the underlying

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problems, they preferred to waste money on a re-branding that has cost millions and persuaded no one? Is it not the case that when the history of the Government is written, the name Consignia will always be remembered, along with the Jo Moore e-mail, Tony's cronies and the millennium dome, as a symbol of all that is rotten about them?
Ms Hewitt: Until that last comment, I felt that the hon. Gentleman was treating this matter with exactly the seriousness that it requires.
The hon. Gentleman asked about the £1.8 billion of gilts. As I have said, we made it clear to the company that we had pledged that money to back the investment in Royal Mail's business to turn it round and to support the nationwide network of post offices. I can add that we have said that we will work with the company to help it to ensure that its borrowing requirements for working capital will be met from the national loans fund on appropriate commercial terms.
The point about the gilts is that, particularly under Conservative Governments, the company was forced to exchange the dividends—at a rate of 90 per cent. of the profits—for gilts. That reserve was never available to the company so that it could invest in the modernisation that was required. We are now making it available, to support the necessary investment and restructuring.
Royal Mail is discussing the application that it intends to make for a 1p rise in the prices of first-class and second-class stamps with both the regulator and Postwatch, the consumer body. It hopes to make the application before the end of the month.
It would have been quite wrong to agree price rises in the past simply to mask and compensate for the company's inefficiency. Some years ago, Lord Heseltine, the former President of the Board of Trade, confessed to the Select Committee on Trade and Industry that in the case of a publicly owned monopoly there was always the temptation—indeed, it was a reality—to go on raising prices rather than dealing with underlying losses and inefficiencies. I hope that, now that the company has grasped the seriousness of the problem and established the necessary restructuring, the regulator will look favourably on this modest application.
The hon. Gentleman raised important questions about the need to ensure that small businesses and people working from home, who do not necessarily qualify for the 20 items per day, will nevertheless have their requirements met by the tailored delivery service. That is exactly the kind of issue that the company will bear in mind when the pilot schemes start next month.
The hon. Gentleman raised a number of serious points about market opening and the role of regulator. As we made clear in the Postal Services Act 2000, we believe that the regulator's first duty must be to preserve the universal service obligation. Subject to that, however, both Royal Mail and customers can gain real benefits from market opening and the competition, innovation and greater choice that will result from it.
In Germany, where the bulk mail sector has been open to competition for some time, there has been a substantial increase in the amount of bulk mail. That has benefited Germany's former monopoly company, not only because it is securing its own share of that growing market but because it can sell network access to its competitors.
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That is precisely what will happen in Britain as the bulk mail sector is opened up. The company must of course negotiate fair and non-discriminatory pricing for network access with new entrants to the market. I believe that it will do so, but if it does not, Postcomm will be able to adjudicate.
The hon. Gentleman clearly forgot that his question about VAT was dealt with in the sixth VAT directive, which I am sure he knows well. It requires VAT not to be levied on public postal services.
The hon. Gentleman asked about long-term intentions. As the then Minister for E-Commerce and Competitiveness, my hon. Friend the Member for Paisley, South (Mr. Alexander), made clear to the Select Committee some weeks ago, the company was reviewing all its strategic options last year, including partnerships with other companies. As part of that, it entered into discussions with the Dutch mail, TPG, about the possibility of a merger. It was not possible to reach an agreement or common ground and no decision was made by Ministers because no proposal for a merger was put to us. The vision and the intention is simple: we want a successful, publicly owned postal service.
I stress that imposing on the company a duty not to close rural post offices, except when unavoidable because no one can be found to do the job, has slowed down—indeed halved—the rate of sub-post office closures in rural areas. Contrary to what the hon. Gentleman said, we are implementing the important recommendations of the performance and innovation unit report. The universal banking service is on track for next year. It is important to remember that when people cash their benefits at the sub-post office, whether through the new post office card account, a basic bank account or an ordinary bank account using one of the automatic teller machines, the sub-postmaster or mistress will receive a transaction fee and benefit from the fact that customers are coming to the post office.
As the hon. Gentleman said, there was a useful pilot of "Your Guide" in Leicestershire and Rutland. It is currently being evaluated, and I expect to receive the report in a few weeks. We shall shortly announce our decisions on payment, which cannot be met commercially, for the social services that rural sub-post offices provide.
The hon. Gentleman acknowledged that we are considering major decisions by a company that is determined to turn itself around. I hope that he will recognise that the source of the problems that have caused today's great losses goes back a long way. It is important not to indulge in finger-pointing, name-calling or trying to allocate blame but to support the company in its difficult decisions, and support the management and, above all, the work force in taking the company forward. The Government and Labour Members are doing that; I hope that the hon. Gentleman and Conservative Members will give the company the support that it deserves.
Mr. Martin O'Neill: I welcome my right hon. Friend's announcement, and emphasise that some of us who argued for according greater commercial freedom to the Post Office underestimated its management's lack of commercial awareness at the time. That is a major consideration in Allan Leighton's new approach, which most of us welcome.
Does my right hon. Friend appreciate that the redundancy targets are ambitious? In London or Edinburgh, which have a high staff turnover, it may be possible to

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secure the figures through voluntary redundancy or even early retirement. However, in places such as the town of Alloa in my constituency, where working for the Post Office continues to be regarded as a good job, albeit not an especially well-paid one, people will hold on to the jobs desperately. The package must contain far greater flexibility to ensure that the trust and commitment of people in areas of high unemployment, who look to the postal services for secure employment, will not be betrayed at the stroke of a pen.
Ms Hewitt: My hon. Friend makes an important point. This morning, Allan Leighton again underlined that he is determined to achieve the job losses through offering people other jobs in the company or through voluntary redundancies. We all know that the problems are not the workers' fault.
I understand the specific problem of securing the redundancies in more remote areas, where fewer alternative jobs are available, and I shall discuss it with Allan Leighton. However, he is confident that all the necessary job losses, though painful, will be achieved through redeployment and voluntary redundancies.
Indeed, because the union and management have quite rightly negotiated a generous redundancy package, he rather fears that, if anything, he will he oversubscribed in relation to the number of redundancies actually required.
Dr. Vincent Cable: I echo the earlier comment that our first concern should be for the families of the people who are to be made redundant. As it would appear that these redundancies will be funded from public funds, will the Minister give the House an estimate of the total cost of the redundancy package? Is it, as I believe, something of the order of £1 billion?
Is not the real scandal of today's statement the fact that the money that has been taken out of the Post Office in the form of dividends over a long period should have been invested to accumulate financial assets that are now going to be liquidated, not for investment purposes but to make people redundant? That is a terrible comment on the way in which the Post Office has been managed over many years through the Government.
I want to ask several specific questions. On the second delivery, why have the pilot studies not yet been conducted, in response to the petitions from small business? Can I have a reassurance that, when they are conducted, the concerns of many small businesses about the second delivery will be fully taken into account?
On the price increase, does the Minister acknowledge that one of the relevant factors is that the real price has actually been falling for some years? That now needs to be addressed. The price of stamps in British post offices is now significantly lower than the price in comparable European countries, including those with privatised postal services.
Does the Minister not now believe that the regulator's discussions about competition need something more radical than adjustment, and that they should probably be shelved? With the Post Office in its current dire position, it would be totally inappropriate for private sector companies to come into the industry, without paying an entry fee, and to cream off the few remaining profitable
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bits of the business. Does the right hon. Lady agree that it would be much more appropriate to allow the European Union liberalisation rules to apply?
Does the Minister acknowledge that the biggest losses—£160 million last year—occurred in the Post Office Counters network, and that, on top of that, there will be a further loss of £450 million next year because of automated credit transfer? Can she explain why the Consignia statement contains no estimate for banking income, and no mention of "Your Guide"? When do the Government intend to produce a clear business plan explaining where these additional sources of income are to come from, so that the counters network does not collapse in the same way as the rest of the Royal Mail system?
Ms Hewitt: First, on the issue of the use of the gilts and the cost of restructuring and redundancy, provision is made in the accounts that have just been published for £682 million in redundancy and restructuring costs. Further provision will be made in the current financial year's accounts, when they are published next year, for the additional redundancy and restructuring costs of the Royal Mail. The provisions in last year's accounts, just published, relate to the Parcelforce restructuring.
The hon. Gentleman's central point that the profits accumulated over many years of operation should have been used for investment and modernisation is absolutely right. On that we are completely at one. If the modernisation and restructuring had been done much earlier, the process might well have been less painful. We must recognise, however, that whenever the restructuring was done, it would have involved a certain number of job losses and redundancies in any case, because the process would have involved making the company more efficient. The important thing, however, is not to worry about the past but to determine how to get out of this situation and to ensure that the company now has access to those reserves—that £1.8 billion of gilts—to take forward its restructuring and to support the post office network.
So far as the price of stamps is concerned, we do, indeed, have almost the lowest postage costs in the European Union. As I suggested earlier, however, I do not think that there has been any justification for a price rise at a time when the company has shown itself unable or unwilling to deal with its underlying inefficiencies and with what were, frankly, appalling industrial relations. We have to remember that almost I million days were lost in strike action in 1996 and that there were very deep-seated problems, which I am glad to say that the company is now sorting out in partnership with its trade union. It is only now, in the context of the renewal plan, that the company can quite properly go to the regulator and seek a price rise.
On the broader issue of competition and market opening, I do not agree with the hon. Gentleman that the proposals and decision that Postcomm has made should now be shelved. I am surprised to hear him blowing hot and cold on competition. One might have thought that the Liberal Democrats were in favour of competition and of encouraging new entrants to the market in the interests of consumers. [HON. MEMBERS: "That was yesterday."' However, as I hear Opposition Members saying, that was yesterday; today is today, and opportunism is never far away when the Liberal Democrats are present.
If the opening of the market, which is already taking place in many other European Union countries, is done sensibly and at a sensible pace, it will benefit consumers

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and also the Royal Mail, by ensuring that it does not fall back into the bad old ways of a protected monopoly that relied on price rises to cover up its inefficiencies. The hon. Gentleman has got the situation the wrong way around. One of the paradoxes of Royal Mail's current situation is that, in many cases, it is making a profit in the parts of its business that are open to competition, but has, extraordinarily, none the less succeeded in making a loss on its monopoly business. Of course, that will have to change.
On Post Office Counters, as I have indicated, we are on track to create and deliver the universal banking services. The Royal Mail and the Post Office are in discussion and reaching a conclusion to their negotiations with the banks and the Department for Work and Pensions. Those negotiations are commercially confidential, which is one reason why figures have not been published. On "Your Guide", as I have said, we will get the evaluation report very soon. We will then make a decision about whether rolling out "Your Guide" across the country as a whole would provide the value for money and new income for sub-postmasters, new customers and service to citizens that it has the potential to deliver.
As I said, the new chief executive, David Mills, is conducting a strategic review of the post office network and looking not only for opportunities to provide services for government, but for new commercial opportunities. It is quite extraordinary that the household insurance that sub-postmasters and sub-postmistresses are now selling very successfully is the first new product that the Post Office has rolled out since it invented postal orders decades ago. We will be looking to David Mills and Allan Leighton to come forward with a strategy for the network that includes a significant expansion of its commercial opportunities, as well as, quite properly, a role for government in supporting its social function.
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The House has important business to transact this afternoon, so I appeal to hon. Members to put very brief questions. I hope that they may get brief answers.
Caroline Flint: The matter with which we are dealing goes back many years, and it is to this Government's credit that we have seized the issue since 1997 and tried year on year to tackle serious problems. May I ask my right hon. Friend about the provision of local post offices and, in the decisions that are being made, her views about how consultation with local communities should take place, bearing in mind low-income communities in which people do not have cars in which they can travel to the nearest urban centre? Also, can I ask her about the viability of post offices—
Mr. Deputy Speaker: Order. The hon. Lady is not getting us off to a very good start, first with a prefatory statement and then two questions. I think that that is quite enough.
Ms Hewitt: The question is extremely important. In the reorganisation of urban post offices that has just begun, we have told the company that as the restructuring is taken forward, it must ensure that at least 95 per cent. of people living in urban areas are still within one mile of a sub-post office after the reorganisation. Of course, the majority should be within half a mile of a sub-post office. But no
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sub-post office in an urban area will close until there has been consultation not only with sub-postmasters, but with Postwatch and, above all, the local community.
Mr. John Redwood: Will the Secretary of State promise that there will be no further redundancies and no further reduction in service quality after this statement? When will the Post Office be back in profit? Does she agree that the third way idea of a not-for-profit corporation has been taken to extremes by Consignia?
Ms Hewitt: Allan Leighton made it clear this morning that there should be no further redundancies in the front line work force. He was not willing to make the same promise to management. The renewal plan that he announced this morning includes £100 million worth of savings in management and administrative overheads. I hope, and he expects, to be able to find further savings in that direction. Far from representing a reduction of service quality, the renewal plan will enable the Royal Mail to improve its service standards.
Many hon. Members know from their constituents' experience that, in parts of the country, the mail is not arriving on time and it is pretty haphazard as to whether people receive it within a few days or a few weeks. That has to change and the renewal plan will enable the company to increase its service standards, I hope dramatically, over some years. We expect the company to be back in profit by the end of this three-year renewal plan.
John Cryer: Does my right hon. Friend accept that it is very difficult to see how the universal delivery service can be maintained on the back of thousands and thousands of swingeing redundancies of this type? Does she also accept that the difference between profit and loss in the Post Office is between 2p and 3p on a first-class stamp? She says that the director of Postcomm has been listening to the comments of hon. Members; you could have fooled me. Would it not be better to clear out the director of Postcomm and his loony plans and to bring in a regulator who cares about public service?
Ms Hewitt: There is no threat whatever to the universal service from the changes to the delivery specification and, in particular, the ending of the second delivery. The second delivery has never been part of the universal service. The union itself has been arguing for the ending of the second delivery, and quite right, too. As I have said, 4 per cent. of mail is costing 20 per cent. of the total cost and 30 per cent. of the hours walked by postmen and women. That is not sensible.
I do not agree with my hon. Friend's comments about the Postal Services Commission. I welcome the fact that, as it spelled out in its decision, Postcomm has clearly listened to the representations made to it. Although, as it says in its decision, Postcomm was reluctant to reward, as it saw it, an incompetent management by slowing down the introduction of liberalisation, it none the less appreciated the real risks of introducing competition too quickly and has therefore scaled back and delayed the introduction of that competition.
Mr. Peter Atkinson: May I be certain that I understood the Secretary of State? Will she confirm that

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a business that receives an average of more than 20 items of mail per working day will receive early delivery? Will she confirm that that would apply to a sole trader and to businesses in rural areas as well as urban?
Ms Hewitt: I can certainly confirm that the early delivery-7 o'clock to 9 o'clock—will apply to a sole trader as well as a larger business. The size of the business is not the issue here. There are obviously greater difficulties, particularly in very remote rural areas, in making the delivery by 9 o'clock. That is one of the issues that the pilots in rural areas will be specifically designed to address to ensure that businesses and sole traders in our rural areas get the service that they need to succeed in their business.
Geraldine Smith: Will the Secretary of State explain why the Post Office has been allowed to slip from being a very profitable business for many years? Despite poor management, bad industrial relations and lack of investment, it constantly made a profit until quite recently, when it became a loss-making industry. Does she share my view that perhaps it is easier for a loss-making industry to make huge redundancies and to sack 30,000 people than it would be for an industry that was seen to be in profit?
Ms Hewitt: As I explained a few moments ago, a number of different factors have contributed to those very large losses, and my hon. Friend has referred to some of them. In addition to a lack of investment over the years and bad industrial relations, there was also a failure to appreciate the effect of the growth in e-mail, faxes and courier services. The company did not anticipate the slow-down in the substantial annual growth in mail volumes on which it had relied for years. Above all, since being given commercial freedom it has simply lost control of its costs. At a time when revenue growth was slowing, costs were rising massively, and it has now to deal with that situation. The job losses, which will be achieved through re-deployments and voluntary redundancy, are the means of eliminating a large part of the company's underlying inefficiencies, and ensuring that it is once again the profitable business that it ought to be.
Mr. Elfyn Llwyd: The statement is rather disappointing, inasmuch as it appears to water down the idea of universal service obligation. [Interruption.] The right hon. Lady shakes her head, but in many areas in my constituency deliveries are not made before lunch as it is. With fewer postmen delivering, one wonders when—if ever—people will receive their post.
The right hon. Lady mentions redundancies. Echoing the comments of the hon. Member for Ochil (Mr. O'Neill), in areas in my constituency such as Bala and Llanrwst, the sorting offices are small, so there is no possibility of job transfers. What will happen when those employees refuse voluntary redundancy?
Ms Hewitt: As I said, today's announcement contains no threat whatsoever to the universal service obligation. As the hon. Gentleman has suggested, in his constituency the second delivery probably does not operate at all, and in any case it does not form part of the universal service.
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There is a very real problem with thoroughly unreliable deliveries in some parts of the country. In certain areas, the Royal Mail is perfectly capable of delivering not just 92.5 per cent. of first-class mail on the day after it is posted—the target figure—but 100 per cent. However, in many other parts of the country—sometimes because of industrial relations problems or logistical problems—nowhere near even 90 per cent. of such mail is being delivered. Reorganisation and the tailored delivery programme will ensure that customers get a much more reliable service, and that the universal service is delivered in every part of the country to the same high standards, which is what we all want.
The hon. Gentleman and my hon. Friend the Member for Ochil (Mr. O'Neill) mentioned the position of postmen and women in parts of the country where few other jobs are available. Management and unions are discussing that issue, and will take it forward as part of the consultations on the redundancy programme.
Mr. Dennis Skinner: Will this high-flying management of the Post Office, who have been running the show for the past few years and brought it to this sorry state, be awarded fat cat payments? My right hon. Friend referred to a fella called Roberts, who is packing it in. How much money will he get? Is this not the appropriate moment to say that, at a time when the taxpayer is having to foot the bill, the people who have managed the affairs in this way should not get fat handouts?
Ms Hewitt: There is no question of awarding fat cat payments or rewarding failure. Of course, John Roberts will receive an appropriate payment, in line with his contract. [HON. MEMBERS: "Ah!"] We are putting in place for the new chairman and the new executive and non-executive directors salary packages with a very significant element of performance-related pay. Allan Leighton has set an example in this regard by taking no additional payment as new chairman, over and above the £20,000 a year that he received as a non-executive director. The whole of his pay as chairman will depend on his turning around the company and delivering on the targets that he himself has committed to. We will expect an equivalent emphasis on performance-related pay in the appointment of other non-executive directors. Of course, with the appointment of the new chief executive, we will need a package that can attract an outstanding manager to lead the organisation through the renewal programme, but it will also have a large element of performance-related pay.
Mr. Richard Page: Will the Secretary of State tell the House why it has taken the Government five years to realise that the previous management was not up to scratch?
Ms Hewitt: As I indicated in my statement, we have taken a series of actions since 1997 to strengthen the performance of the company. We started by giving it much greater commercial freedom and then we brought in a new finance director, because one of the highest priorities was to ensure that the company regained control over its costs.
The hon. Gentleman may not be aware of the untimely death of the finance director early in 2000. Because of that, and the time inevitably taken to appoint his successor, the board was without a finance director for

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many months, and that contributed to the problems on which the new finance director, who arrived at the beginning of last year, has had to get a grip. We have made significant changes in the management of the company and we are continuing to do so to ensure that we get the first-rate management that we need. I hope that Opposition Members will give the management and the work force the support that they deserve to turn the company around.
Diana Organ: What reassurances can my right hon. Friend give to my constituents about the future viability of rural post offices? When will the universal bank be fully implemented and when will other commercial products, such as house insurance, be introduced into rural post offices, to increase footfall and keep the businesses viable?
Ms Hewitt: That is one of the issues that we have asked the new chief executive, David Mills, to take forward. With a background in retail banking, he is ideally placed to ensure that the Post Office develops those new commercial products, especially in financial services, to serve communities that are often financially excluded. Sub-post offices have an important role to play in that and the success so far of the household insurance product illustrates the potential. The universal banking service is on target for introduction next year, as I have previously confirmed.
Mr. Nicholas Winterton: A sizeable part of my constituency is rural and some of it is very remote. In those remote areas, some businesses will receive more than 20 packages or letters a day. If they are to get priority service, will the other people who live in that area also get it, because it would be a nonsense to duplicate the service in those rural areas to which the reliable universal service is essential?
Ms Hewitt: The hon. Gentleman makes a sensible point and that is exactly the sort of practical issue that will be considered in the new pilots for the tailored delivery scheme. Where businesses—perhaps only one or two—are located in a remote rural area and receive 20 or 30 items of mail a day that they need to have delivered early in the morning, it may make more sense to have a single delivery for everybody in that village, instead of going out again later in the morning. That is an operational and practical issue and the company will draw conclusions on that point from the pilots that it intends to run in rural areas.
Mr. Michael Jabez Foster: My right hon. Friend gives cause for optimism when she tells us of the acceptance by the management of the error of their ways, including the daft change of name. Have they learned the lesson that not beating up staff is one way to create enterprise among them? Can she do anything to instil a sense of respect for the staff that has been so sadly missing in the past two or three years?
Ms Hewitt: My hon. Friend will be aware that I have previously expressed criticisms of the management in part of the business. One has only to read the Sawyer report to see just how bad the management and industrial relations had got, not everywhere, but in some of the
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sorting offices in particular. I pay tribute to the union, in particular, and to the new management for the way in which they have worked together since the publication of the Sawyer report. We have seen an enormous reduction in the number of days lost to strike action, from hundreds of thousands five years ago to a few hundred in the past few months.
We are going in the right direction and Allan Leighton, who has made a point since becoming interim chairman of going to the sorting offices at 5 am, visiting delivery centres late in the evening and talking to the front-line staff, has been welcomed by the work force as the breath of fresh air that the company so badly needs.
Dr. John Pugh: Given the £1.2 million a day loss that Consignia is enjoying at present, what operating loss does the Secretary of State anticipate next year?
Ms Hewitt: The company is anticipating that its total losses next year, including exceptional items, will be about the same as this year. It is rightly making cautious assumptions in order not to disappoint on its targets as it has so often done in the past. As I said, further redundancy costs will arise from this morning's announcement and those will, of course, be included in next year's accounts for the current financial year.
Mrs. Louise Ellman: Could the Secretary of State clarify her role in ensuring that the reborn Royal Mail will provide good public services in poor urban areas, such as Liverpool?
Ms Hewitt: I am already working with the new management of the company to ensure the first-rate management that we need and to ensure that the board and the management understand the importance of delivering the universal service obligation and higher standards of customer service throughout the country but, in particular, in vulnerable areas, whether those are poor urban areas such as my hon. Friend's constituency or rural areas where the post office and the Royal Mail play a uniquely important role. Equally, I have made it clear to Allan Leighton and David Mills that we must sustain an effective and modernised network of sub-post offices so that those can continue to play their vital social role, in particular in the most disadvantaged neighbourhoods.
Mr. Michael Jack: The Secretary of State has just shared with the House the fact that next year the Post Office will make a further £1.1 billion loss, thus leaving only two years to return to profitability. As the owner of the company, will she tell the House what profitability targets will have to be achieved in years two and three to return to the profitability that she set, what rate of return on the company's capital she has agreed in future and, if those targets are not agreed, what sanction she will apply to the management?
Ms Hewitt: As I said, the company—rightly, in my view—is making very cautious assumptions and is allowing for the fact that in the current financial year it will have to make further provision for the exceptional costs of redundancies and restructuring that flow from this morning's announcement. The path that it has set, however, is—as Allan Leighton made clear and as the

1031
right hon. Gentleman will see from the accounts, which are being published today—for a return to profitability by the end of the third year. We will be monitoring the company's progress extremely closely on those profitability targets. If they are not met, we have made it clear to management that they will not only not receive their performance-related pay but that we will, if necessary, make further changes to the management.
Mr. Colin Challen: It is always a pleasure to be behind a Front-Bench spokesman who is willing to listen and then to act. In that spirit, will my right hon. Friend listen to customers in the forthcoming years of liberalisation, revisit the universal service obligation and strengthen it?
Ms Hewitt: I have already said that the universal service obligation is at the heart of our policy. That is why we gave it statutory backing in the Postal Services Act 2000, but the biggest threat to that obligation comes not from liberalisation and market opening—provided that that is done sensibly and at a sensible pace—but from the company's own inefficiency and losses. If it had continued like that, there would have been a very serious threat to the universal service. That is why it is so important that the company, under its new leadership, has now put forward and agreed this renewal plan and is taking it forward in partnership with the union to ensure that that obligation is strengthened and that quality of service is delivered throughout the country.
Mr. Christopher Chope: What is the Secretary of State going to do about the independent regulator if he says that it is not reasonable to increase the price of a stamp? Furthermore, what is the point of having an independent regulator if the Secretary of State tries to lean on him by prejudging his decision? If the price of a stamp goes up, does she agree that it will mean, in effect, that the customers are paying for this awful incompetence?
Ms Hewitt: I have made it clear several times already that I would not have supported any price rise—nor thought it justified—if it was simply masking the inefficiency of the company's operations. The regulator—the Postal Services Commission—was, rightly, set up as an integral part of the move to commercial freedom for a publicly owned company. The members of that body are reasonable people—as the hon. Gentleman would expect; they have clear statutory objectives and I have no doubt that they will continue to make reasonable decisions, as they did on this occasion. Their independence, as the chairman, Graham Corbett, recently confirmed, is under no threat whatever, but he thought it perfectly proper—as did I—that I should make my views of the risks inherent in the earlier proposals known both to the Consignia chairman and to the commissioners.
Mr. Alistair Carmichael: Ultimately, the success or failure of the Secretary of State will be judged in the communities that I represent in Orkney and Shetland by the continued security of the universal service obligation. Will she, therefore, bring early pressure to bear on Postcomm to publish in detail the targets and performance indicators that it will use to assess any possible threat to the universal service obligation? In all sincerity, I have to point out that nothing in Postcomm's performance in recent months gives me any confidence that it understands either the importance of universal service to communities such as ours or, indeed, what is required to preserve it.
Ms Hewitt: As I have already told the House today, the universal service obligation and its preservation are the No. I and overriding statutory duty of Postcomm, and I have no doubt that, as Postcomm has indicated publicly on several occasions, it takes that duty extremely seriously. Postcomm will shortly publish a further report—a consultation document—on the definition and scope of the universal service, and I shall certainly draw attention to the point made by the hon. Gentleman about the need to understand not only how important that universal service is in a constituency such as his but also the steps that have to be taken to ensure its delivery.

Enterprise Bill (Programme) (No. 3)
Motion made, and Question proposed,
That the Order of 10th April (Enterprise Bill (Programme)) (as amended by the Order of 1st May (Enterprise Bill (Programme) (No. 2)) be amended by substituting for paragraph 4(2) the following—
Proceedings on consideration shall be taken on each of the two days allowed by the Order as shown in the first column in the following Table and shall be taken in the order so shown, and each part of the proceedings shall, so far as not previously concluded, be brought to a conclusion at the time specified in the second column.

TABLE

Proceedings

Time for conclusion of proceedings

First day

New Clauses (other than those relating to Part 10), New Schedules, amendments relating to Clause 1, Schedule 1, Clauses 2 to 12, Schedule 2, Clause 13, Schedule 3, Clauses 14 and 15, Schedule 4, Clauses 16 to 20. Schedule 5, Clauses 21 to 67, Schedule 6, Clauses 68 to 82, Schedule 7, Clause 83, Schedule 8, Clauses 84 to 87, Schedule 10. Clauses 88 to 162, Schedule 9, Clauses 163 to 178, Schedule 11, Clauses 179 and 180, Schedule 12, Clauses 181 to 202.

10.00 p.m. (7.00 p.m. if it is a Thursday)

Second day

Amendments relating to Clause 203, Schedule 13, Clauses 204 to 231, Schedule 14, Clauses 232 to 234, Schedule 15, Clauses 235 to 241, New Clauses relating to Part 10, Clause 242, Schedules 16 and 17, Clauses 243 and 244, Schedule 18, Clauses 245 to 250, Schedule 19, Clause 251, Schedules 20 and 21, Clauses 252 to 257, Schedule 22, Clauses 258 to 262, Schedule 23, Clauses 263 to 269, Schedule 24, Clauses 270 and 271, Schedules 25 and 26, Clauses 272 to 274, remaining proceedings on consideration.

9.00 p.m. (6.00 p.m. if it is a Thursday)'

—[Miss Melanie Johnson.]
2.23 pm
Mr. Nigel Waterson: Here we are again—yet another programme motion for the Enterprise Bill.
I do not expect to speak for more than a few minutes and I certainly do not want to divide the House on the motion, but it would be wrong to let it pass—[Interruption]—despite the obvious hilarity it causes the Government Whip, for reasons that may or may not become apparent—without saying something about the time that has been, and will be, allotted to such an important measure. I say that far more in sorrow than in anger. I have made the point previously—it is still valid—that there is little, if any, party politics in the Bill, but it is an extremely large measure. Like other Bills, it has gathered moss as it rolled down the legislative hill—bits have been added over time—and we have ended up with a substantial document. Despite our best efforts, it did hot shrink during Committee but grew to 274 clauses and 26 schedules.
We have never been able to understand why the Government have been so enthusiastic about pushing the Bill through at such a gallop. The Bill is not only large
1034
but extremely complex; it affects a range of areas of the law, practice and business that are themselves massively complex—from competition and merger regimes to the new cartel arrangements, and from criminalisation to insolvency. All those matters need and deserve detailed scrutiny. We have done our best, with the Liberal Democrats taking the occasional walk-on part, to improve the Bill and to ensure that it was scrutinised, but we simply have not had enough time.
As I have pointed out previously, if ever a Bill cried out for pre-legislative scrutiny, it was a measure of this huge size and complexity. It remains a complete mystery to me why other Bills are afforded that treatment while this one was not.
The original programme motion—for the Bill's consideration in Committee—was tabled by the Government some time ago with no consultation at all. Relations then fell to an all-time low because the Government took a further unilateral decision to change the order of consideration just before the Bill went into Committee.
All that was made worse by the Easter recess; the Bill was published on the day the House adjourned and Second Reading was on the day we returned from the recess. I do not blame the Government for the Easter recess, but I certainly blame them for giving so little real, working time—not only to the Opposition parties but, perhaps more importantly, to outside bodies ranging from the Consumers Association to the CBI, to the insolvency practitioners, and to the whole range of outside bodies on whom nowadays the Opposition depend for briefings, for draft amendments, for indications of where the Government may have got something wrong and for proposals to improve legislation.
The net result was that chunks of the Bill were not debated in Committee. Sadly, that state of affairs is not unusual in our present system. It was especially unfortunate that one of the undebated chunks related to consumer protection measures. I hope that we shall have a chance to come back to those issues on Monday—or rather, to come to them.
In fairness to the Government, they eventually realised that they could not sustain the speed that they wanted so we got some extra time in Committee. However, it was not much more time and we completed the Committee stage in 18 sittings. As I have pointed out, for a Bill of this size—274 clauses—that is quite an achievement. I challenge anyone who reads the Hansard reports of the Committee to find any padding or time wasting on the part of Opposition Members. Things moved briskly. Many matters could not be considered but we worked hard to improve the Bill. Indeed, on a good day, the Minister accepted one or two of our proposals.
Things got worse after that, however. During the past couple of days alone, the Government have tabled about 223 amendments. There is obviously a panic to try to perfect the Bill—although that is probably beyond the wit of man—before it goes to the other place, but it simply is not on to introduce so many amendments at this stage of its consideration. Of course, a great number of them are minor and consequential, but one has to go through them, and the Bill, to come to that conclusion.
Some of the amendments are substantial, however. Today, we were due to debate one of the central issues although, by agreement, we shall now more sensibly

1035
debate it on Monday; it relates to whether, in insolvency, a bankrupt's home—their sole residence—should be taken into account as one of their assets. We touched on that huge issue in Committee and the Government said that they would reconsider it. Only a few days ago, however, they tabled a long new clause, which will require substantial debate, to deal with it.
The Parliamentary Under-Secretary of State for Trade and Industry (Miss Melanie Johnson): The House should be aware of a simple fact. The hon. Gentleman is trying to make something of the number of Government amendments. As he said, many of them are tidying, consequential and minor drafting amendments. Indeed. I wrote to him and all other members of Standing Committee B, which considered the Bill, to explain exactly which amendments are minor and consequential and what the remaining few amendments involved in each case were. So he has not had to go through all the amendments to find out which are minor and consequential. The vast majority of them are just that, and they have been drawn directly to his attention by a letter from me.
Mr. Waterson: I do not want to get into a spat with the Minister this early in the day, but with the greatest respect to her, it is not right that the Opposition should simply take it at face value when we are told that amendments are minor or consequential. It is important that we go through them to check for ourselves.
I am trying to make the point—I do so finally, so that we can get on to the substance of the Bill—that this large and complex piece of legislation will have all sorts of effects on business, the legal professions, accountancy and so on. It is very important that we get it right; otherwise we shall have to revisit it shortly, and the law of unintended consequences, of which this Government are masters, will kick in with a vengeance.
We have not had enough time to consider the Bill; I do not know why, because other business seems very light at the moment, but there it is. As I say, there is no party politics in it, so I have never been able to fathom the Government's motives. However, I am happy not to divide the House on the programme motion, in the hope that we can get on to the substance of the Bill.
2.31 pm
Mr. Harry Barnes: I am keen to move on, so that we can debate the major items, but I wish to make a brief point. I could not possibly claim that there has been insufficient time to debate the Bill, having served on the Standing Committee and felt rather as though we were ploughing through the desert on certain occasions. We now have two days in which to deal with the remaining stages, so all that seems perfectly adequate. However, have we not made an error in the division of time between the two days? Is the balance right?
Time has been taken up with two very important statements today, so the time that we have left compares very differently with the second day. We have to deal with 270 amendments today, but only 86 on the second day. Such things are not decided by mathematics, since some amendments and clauses will be more significant
1036
than others, but 202 clauses have to be covered today and only 72 on the second day. We have to deal with 11 different batches of amendments, but only eight on the second day.
Many of the amendments deal with the earlier clauses. That is perhaps natural because they tend to help to define what comes later and the major principles involved. So if the division between the days were to come at about clause 40 or 41, it might represent a much more serious attempt to spread out the different matters that need dealing with.
Something similar worked in Committee. As the hon. Member for Eastbourne (Mr. Waterson) said, there was an occasion on which the timetable bar came down and certain things were lost, after which changes took place. On the second occasion the bar was due to drop, it was removed altogether. During the 16th sitting, we were ploughing into the desert with a host of amendments that seemed to come from the CBI and the debate looked as though it would go on and on so that we would not make the 7 o'clock cut off.
Suddenly, when the bar was lifted, everything miraculously progressed and we finished at four minutes to 7, and we did everything that needed to be done up to that point. Indeed, our final sitting—the 18th—lasted just over an hour, and the arrangement was similar to the one that exists now: we are likely to finish more quickly on the second day than on the first.
It would be convenient for the House—it would certainly be convenient for me, given the amendments that I have tabled—if the arrangements were adjusted more sensibly. If that cannot be done, I hope that the Opposition are listening, as they may have a curious interest in the amendments that I have tabled, even though they could not possibly support them, and they may wish to find out where those amendments lead us.
2.35 pm
Mr. Alistair Carmichael: May I apologise to the hon. Member for Eastbourne (Mr. Waterson) for not having been present throughout the entirety of his speech? I think that I picked up the gist of it—certainly towards the end.
May I tell the hon. Member for North-East Derbyshire (Mr. Barnes) that I dearly wish we lived in a world where the business was ordered for the convenience of such a gentle and thoughtful hon. Member, but unfortunately, my experience of the past year leads me to think otherwise?
I wish briefly to place on record the fact that Liberal Democrat Members share the concerns expressed by the hon. Member for Eastbourne. Good progress was made in Committee, but sufficient time has not been allocated to debate the Bill on Report. A substantial number of Government amendments have been tabled, not necessarily exclusively because of undertakings given as a result of debates in Committee.
I accept—I may as well place this on record now because we shall never be able to debate the issue later—that the Minister has tabled very welcome amendments in relation to the cartel offence and, in particular, to obtaining warrants in Scotland, for which I take this opportunity to thank her publicly. However, one inevitably has to wonder about the efficacy of a system that involves our sitting in Committee, week after week,

1037
getting assurances from Ministers that the parliamentary draftsmen have got it right, only to find that such a large number of amendments need to be tabled on Report.
2.37 pm
Dr. John Pugh: In rising to speak, I am mindful of something that the Minister said in Committee. During one particularly dreadful moment in a long sitting, she said that brevity was a mark of intelligence.
I accept all that the hon. Member for Eastbourne (Mr. Waterson) has said about the undue haste that the Government have shown at times, about the fact that important issues need to be debated, and about how the law of unintended consequences can easily kick in. However, in relation to his comments in Committee, there was almost a failure of prioritisation.
It is true that we may not have had enough time, but I looked through Hansard and found that we had discussed the Oxford philosopher, G. D. H. Cole, and the uncle of the hon. Member for North-East Derbyshire (Mr. Barnes). A lot of that was very amusing, and I certainly enjoyed listening to the hon. Member for Eastbourne—I think that he enjoyed listening to himself, too. However, not only did I feel that we were losing the wood for the trees, but that we were sometimes losing the trees for the leaves. The Hansard record will show that an inordinate amount of time was consumed in saying very little, so I shall not take up any more of the House's time.
2.38 pm
Miss Melanie Johnson: I shall be brief. I can assure the House that I will be extremely brief in speaking to groups of Government amendments that are entirely trivial and consequential, about which the hon. Member for Eastbourne (Mr. Waterson) need not concern himself.
On the question of time wasting, I hope that the hon. Gentleman will not pursue that path too vigorously, because I am sure that scrutiny of the record will show that time was not entirely well spent during debates in Committee, as the hon. Member for Southport (Dr. Pugh) has just suggested. I could add some other instances to those that he gave.
1038
I am sorry that my hon. Friend the Member for North-East Derbyshire (Mr. Barnes) is not directly included in the processes of the usual channels in discussing programme motions. However, I understand that this programme motion has been introduced on the basis that it has been agreed through the usual channels. That was certainly the case with the programme motion in Committee—it, too, was agreed.
I appreciate that the hon. Member for Eastbourne may not have got to grips with the contents of the Bill when it was published before Easter, but by the time we discussed the programme motion for the Committee, he must have been able to get to grips with the Bill and therefore to raise any concerns that he had about that programme motion. He did not raise such concerns about the division of time for those sittings.
Mr. Waterson: I would not want the Under-Secretary to be in danger of misleading the House. First, I made a different point, which was about all the outside bodies and organisations that were totally taken by surprise, first by the Bill's publication just before the Easter break, and then by the change in the order of consideration.
Secondly, I can only place it firmly on record—I do not think that anyone can contest it—that we were never consulted on the length of time allotted in the original programme motion for proceedings in Committee. Indeed, partly over the Easter break, I prepared a draft of how I thought we could allocate time. That, although proffered to the usual channels, was not thought to be helpful to the discussion. Let us be clear on those points.
Miss Johnson: A large number of outside bodies were very well aware of the Enterprise Bill and its general contents—and, indeed, some of its specific contents—well ahead of its publication.
I reiterate that the vast majority of the Government amendments are technical and consequential. They are attempts by parliamentary draftsmen to get the Bill exactly right. There is nothing wrong with that; it is part of the normal passage of a Bill. We have two days for Report, and I hope that the House will rapidly agree the programme motion and make progress on the substance of proceedings.
Question put and agreed to.

Orders of the Day

  Enterprise Bill
  [1ST ALLOTTED DAY]
  As amended in the Standing Committee, considered.

  Enterprise Bill
    New Clause 4

      EXCISIONS FROM REPORTS: PART 3
      (1) Subsection (2) applies where the Secretary of State is under a duty to publish—

      (a) a report of the OFT under section 43 or 60; or

      (b) a report of the Commission under section 49 or 64.

      (2) The Secretary of State may exclude a matter from the report concerned if he considers that publication of the matter would be inappropriate.
      (3) In deciding what is inappropriate for the purposes of subsection (2) the Secretary of State shall have regard to the considerations mentioned in section 238.
      (4) The body which has prepared the report shall advise the Secretary of State as to the matters (if any) which it considers should be excluded by him under subsection (2).
      (5) References in sections 37(4) and 104(11) to the giving or laying of a report of the Commission shall be construed as references to the giving or laying of the report as published.'.—[Miss Melanie Johnson.]
      Brought up, and read the First time.
      2.42 pm
      The Parliamentary Under-Secretary of State for Trade and Industry (Miss Melanie Johnson): I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker (Sir Alan Haselhurst): With this it will be convenient to discuss the following: Government new clause 5—Excisions from reports: Part 4.
      Government amendments Nos. 235, 236, 240 to 242, 258 and 298 to 300.
      Miss Johnson: All the amendments relate to reports by the Office of Fair Trading and the Competition Commission. New clauses 4 and 5 and amendments Nos. 258 and 298 relate to excisions from reports. New clauses 4 and 5 make provision for the Secretary of State to have regard to the need to exclude certain information when publishing a report that she has received from the Office of Fair Trading or the Competition Commission. I shall be happy to give Members further details if they require them.
      Mr. Nigel Waterson: The Under-Secretary is right; we need not detain the House long on this group of amendments, but I have a few questions with which I should like to probe a little further.
      The background to this matter is the formalisation of the status of the Office of Fair Trading. That harks back to Conservative legislation in the 1970s, which set up the original structures. It was common ground in Committee that it was right to revisit the matter, and we broadly support the basic proposals and the new powers and functions of the OFT.
      1040
      There were various debates in Committee, which I do not intend to rehearse, about the contents of the differing reports that will be produced under the Bill when enacted. We as a party have been keen to emphasise the concern of business—whether it be the CBI, the mention of which seems to raise the hackles of the hon. Member for North-East Derbyshire (Mr. Barnes), or any other business organisation—that, no matter how laudable the aims of the legislation, and particularly this part of the Bill, in protecting consumers and people generally against malpractice, it must be borne in mind that unless such matters are dealt with properly, there can be enormous costs to businesses, partly because confidential or commercially sensitive information may find its way into the public domain.
      We already know about the extra £15 billion worth of costs that have been heaped on business under this Government, and about the worries about red tape to which organisations such as the Institute of Directors have drawn attention. Indeed, we know about the CBI's figure of £5.8 billion a year extra in taxes on business under this Government. Against that disastrous background, it is important that we do not heap further burdens on business.
      New clauses 4 and 5 are similarly worded. In both new clauses, subsection (2) refers to the publication of matter that would be inappropriate, and new clause 4 goes on to say that the body that has prepared the report—whether it is the OFT or the Competition Commission—will advise the Secretary of State on matters to be excluded by him or her when the report is published. Is it considered that the Secretary of State will feel able to make further excisions from such reports? I am asking, perhaps over-laboriously, whether the Secretary of State will be able simply to accept or refuse the proposals of the body preparing the report, or whether it is envisaged that she or he will have, as it were, a final censor's job and make his or her own excisions on top of those proposed by the body.
      The other issue is what is defined as inappropriate. The new clauses helpfully refer to section 238, which sets out three or four different considerations: first, matters that are contrary to the public interest; secondly, commercial information where disclosure might significantly harm legitimate business interests; thirdly, information related to the private affairs of the individual, the disclosure of which might significantly harm the individual's interests; and fourthly, whether the disclosure of any such information is necessary for the particular purpose. Does the Under-Secretary regard that list as exhaustive? Could the term "inappropriate" be used to cover all matters which are of perfectly understandable concern to those who are the subject of the report, or, indeed, to Ministers and those who advise them?
      Under clause 43, where the Secretary of State issues an intervention notice, the OFT will produce a report on the public interest issues, including representations that it has received. Again, I assume that all that applies equally not just to the conclusions in the report, but to all the, as it were, second-hand information given by way of evidence to the OFT. Otherwise, of course, there might be a disincentive for people to be wholly open and honest in making such representations.
      Where the Secretary of State refers matters to the Competition Commission, the reports under clause 44 will be based on an initial investigation under clause 60 and

      1041
      where the Secretary of State refers a matter under clause 61. As I understand it, those are all instances in which the proposed provision would bite.
      The principal issue that we want to raise is whether the lists that I have gone through are exhaustive, or whether there is an element of flexibility, which we would welcome, in excising what is inappropriate. We on the Opposition Benches might take some modest credit for persuading Ministers that the issue should be taken even more seriously in the Bill than it was originally. Subject to those explanations, we would welcome a tightening of the provisions.
      Mr. Andrew Lansley: I confess that I am slightly confused by the Under-Secretary's suggesting that this group of amendments is entirely confined to matters of excision of information from reports. As I understand it, some of the Government amendments do something substantively different. I want to explore why amendments Nos. 235, 236, 240 and 242 are necessary and what is intended by them.
      The Under-Secretary has written to us to clarify the purpose of the amendments. Under the first two amendments in respect of mergers, and the second two amendments in respect of market investigation references, where a public interest intervention notice has been served, the OFT or the Competition Commission will report to the Secretary of State.
      Under the Bill as previously drafted, the OFT or the commission would have had the opportunity to make recommendations to the Secretary of State as to the actions that she could take under the legislation. As far as I am aware, the provisions for mergers appeared in clause 41 and those for market investigations appeared in a later clause. It would have allowed the Secretary of State to receive undertakings under clause 151 and to make orders under clause 155.
      The Government amendments will mean that the commission can recommend to the Secretary of State that she should take other action, but that action is not specified. So I have a very simple question: what is the other action? If the action falls within the confines of the remedies set out in the respective provisions available to the Secretary of State, why is it not already sufficient for the OFT or the commission to be able to specify such remedies? If the action is beyond the confines of the Bill and what is available from the relative undertakings that can be derived from it, why are the additional remedies not specified in the Bill? I confess that nothing in the correspondence that the Under-Secretary has provided to us specifies what the other action might be, and under what legislative form it sits.
      Miss Johnson: The hon. Member for Eastbourne (Mr. Waterson) asked whether the Secretary of State would be able to make her own excisions as well as those suggested. The answer is yes. The list of inappropriate coverage takes account of all the issues that the hon. Gentleman highlighted. It is not exhaustive, but we are not aware of any considerations other than those currently in the text. I hope that I have reassured him on that point.
      The hon. Member for South Cambridgeshire (Mr. Lansley) raised several points and he is right to suggest that other issues are involved. He referred to Government amendment No. 242, but that relates to the
      1042
      voting rules for the decisions taken by the Competition Commission's reporting panels. Perhaps he meant to refer to amendment No. 241, but that was not absolutely clear.
      Amendments Nos. 235, 236, 240 and 241 correct drafting oversights in clauses 46(7)(b) and 62(4)(b). These two paragraphs deal with the Competition Commission's ability, in its reports in public interest and special public interest cases, to recommend the taking of remedial action by other persons, and other than in the form of undertakings accepted or orders made under part 3.
      Such action might include, in the case of Ministers, the amendment of existing legislation—whether by introducing new primary legislation or by using delegated powers to amend existing legislation—so as to remove a regulatory barrier to entry and to prevent a merged firm from exploiting a position of market power. Recommendations for the taking of such action are provided for in non-public interest merger eases by clauses 34(3)(b) and 35(2)(b).
      As currently drafted, the reference to
      "the taking of action by other persons"
      in clauses 46(7)(b) and 62(4)(b) appears immediately after a reference to the taking of remedial action under the Secretary of State's part 3 powers, thus apparently excluding the possibility of the commission's recommending in public interest or special public interest cases that the Secretary of State should take remedial action other than under her part 3 powers.
      Although such action is likely to emerge only very rarely as part of a reasonable and practicable remedial strategy in a merger case, it was not our intention to prevent the commission from being able to recommend that the Secretary of State should take remedial action of this kind in public interest or special public interest cases. The amendments ensure that this possibility is preserved.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 5

      EXCISIONS FROM REPORTS: PART 4
      '(1) Subsection (2) applies where the Secretary of State is under a duty to publish a report of the Commission under section 136.
      (2) The Secretary of State may exclude a matter from the report if he considers that publication of the matter would be inappropriate.
      (3) In deciding what is inappropriate for the purposes of subsection (2) the Secretary of State shall have regard to the considerations mentioned in section 238.
      (4) The Commission shall advise the Secretary of State as to the matters (if any) which it considers should be excluded by him under subsection (2).
      (5) References in sections 130(4) to (6), 137(2) and (5) to (7), 142(3) to (5) and 166(10) to the giving or laying of a report of the Commission shall be construed as references to the giving or laying of the report as published.'.—[Miss Melanie Johnson.]
      Brought up, read the First and Second time, and added to the Bill.

    New Clause 3

      USE OF FINES BY OFT
      '.—(1) The OFT will consider whether any fines which it imposes under Chapter I or Chapter II of the 1998 Act might be

      1043
      applied for any purpose or purposes which would contribute towards remedying harm suffered by consumers generally as a result of the infringement of those provisions.
      (2) The OFT may in pursuance of subsection (1), make such direction as it considers appropriate.'.—[Mr. Waterson.]
      Brought up, and read the First time.
      Mr. Waterson: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With this it will be convenient to discuss the following: Amendment No. 3, in clause 4, page 2, line 24, at end insert—
      'and
      (d) an assessment of the additional costs to business of the exercise of its functions.'.
      Government amendment No. 156.
      Amendment No. 6, in page 2, line 34, leave out—
      'seriously and prejudicially affect the'
      and insert—
      'significantly harm the legitimate business'.
      Amendment No. 210, in clause 6, page 3, line 9, after "consumers", insert "and producers".
      Government amendment No. 157.
      Amendment No. 8, in page 3, line 20, leave out—
      'seriously and prejudicially affect the'
      and insert—
      'significantly harm the legitimate business'.
      Amendment No. 211, in clause 8, page 3, line 35, after "consumers", insert "and producers".
      Government amendment No. 223.
      Amendment No. 212, in page 3, line 39, after "consumer", insert "and producer".
      Amendment No. 213, in page 3, line 41, after "consumer", insert "and producer".
      Amendment No. 214, in page 4, line 1, after "consumer", insert "or producer".
      Amendment No. 215, in page 4, line 3, after "consumer", insert "or producer".
      Amendment No. 216, in page 4, line 9, after "consumers", insert "and producers".
      Amendment No. 217, in clause 9, page 4, line 18, leave out from beginning to "section" in line 19.
      Amendment No. 218, in clause 11, page 5, line 2, after "consumer", insert "or producer".
      Amendment No. 219, in page 5, line 5, after "consumers", insert "or producers".
      Amendment No. 10, in page 5, line 6, leave out "90" and insert "60".
      Amendment No. 11, in page 5, line 13, leave out subsection (4).
      Amendment No. 220, in page 5, line 15, after "consumer", insert "or producer".
      Amendment No. 221, in page 5, line 18, after "consumers", insert "or producers".
      Amendment No. 222, in page 5, line 34, at end insert—
      'and—
      (c) "producer" means an individual involved in the manufacture, production or sale of goods or services.'.
      Mr. Waterson: Our new clause and amendments again deal with the general functions of the OFT. The hon. Member for North-East Derbyshire (Mr. Barnes) has also tabled amendments, and I look forward to our usual fascinating debate.
      We debated the provisions of new clause 3 in Committee, and it is part of the Opposition's responsibility to make choices about the issues to which we wish to return on Report. We thought that this issue was worth debating again, because it is important and because we did not think that the Under-Secretary's response in Committee was adequate. As she has had more time to reflect on the matter, we might now make more progress. A glance at the new clause shows that it would determine the fate of fines determined under chapters I and II of the Competition Act 1998 and use them for the benefit of consumers.
      Substantial income might be derived from such fines in any given year, and that money could be applied for the remedial benefit of consumers in general. The Consumers Association has publicised the case in which a car manufacturer—I forget which one—agreed to donate substantial funds to the association as part of the settlement of potential proceedings. The association undertook to use that money to inform consumers about the purchase of cars, including purchase from suppliers based on the continent. When the offence alleged is predatory pricing, the consumer will have benefited from lower prices, albeit at the longer-term loss of competition. In such cases, under current legislation consumers would be unlikely to recover damages. However, if the funds obtained were applied for the benefit of consumers in general, that would sensibly reflect the fact that there is no individual remedy.
      If the Under-Secretary's reply is based on the one that she gave in Committee, I know that she will say that there are separate provisions in the Bill for funds to be applied for consumer information and education. We welcome that. However, the new clause would ensure the use of a separate stream of funding to consumers in general.
      I have already given a couple of examples, and another one would arise when consumers had clearly been disadvantaged but it was impossible to identify or trace those harmed. Something may have gone on for many years across an entire market without records being kept of the people involved. In another example, many people might have lost a tiny amount as the result of a harmful practice. However, recognition should be made of the fact that there has been misdoing by the companies involved.
      3 pm
      The Minister was less than convincing when she addressed the problem in Committee. One of her defences was that we might encourage the OFT to operate a slash and burn policy, and go out of its way to find people so that it could produce the stream of funding. That is far-fetched. In fact our suggestion would make sensible use of the funds, unlike the alternative, which allows them to disappear into the black hole of the Treasury.

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      We discussed an amendment similar to amendment No. 3 in Committee, and I accused the Minister of intransigence. I had hoped that she might reconsider her case, because we need to assess the additional costs to business that will arise when the OFT exercises its functions. The Conservative party is keen to stick up for businesses, large and small, when it comes to the extra burdens and costs that are heaped on them. There is a cumulative process of placing more burdens on business, and those have a particular impact on smaller firms.
      It is important to make a regular assessment of the additional cost to business of the OFT's exercise of its functions. That is eminently sensible. We debated how to assess that burden in Committee, and it is worth trying to work out whether the burdens on business are substantial, as we fear they might be, and how they stack up against the benefits to consumers. Unbelievably, the regulatory impact assessment of the Bill concluded that its provisions would impose no extra cost burden on business. We do not accept that, and it requires explanation.
      In Committee, my hon. Friend the Member for Huntingdon (Mr. Djanogly) gave the example of a company that started to trade in a new market. It received a letter from the Department of Trade and Industry saying that the trade was against the public interest. In effect, the Department threatened to wind up the company and prosecute the directors. The company took legal advice and was very worried. It would have cost a great deal to clear the company's name, and the matter never went to court. The director involved settled with the Department, the company was wound up and various other measures had to be taken. The company simply did not have the resources—or, perhaps, the courage—to sit out the argument with the powers that be.
      We all accept that the OFT needs to be beefed up and provided with more staff and resources. I often see job advertisements for the OFT in the papers—not that I make a habit of looking through the appointments sections; I merely have a wistful curiosity about all those positions that allow people to earn more than I do. The OFT is obviously building up its staff in anticipation of the changes. When the Bill receives Royal Assent, they will be like coiled springs, waiting to leap into action. The OFT will have massive resources and deep pockets, which may not be true of the companies with which it deals.
      Amendments Nos. 6 and 8 replace similar amendments tabled in Committee. The phrase
      "significantly harm the legitimate business"
      is important. We must carefully tie up the requirements of the investigating authorities. We want to harmonise the words used in part 1 and part 9. Our amendments would tighten the obligation for the OFT to ensure that it chooses to use its powers in a judicious way.
      We debated recent dawn raids involving the Serious Fraud Office and other prosecuting authorities. Although such action might be relevant and necessary in certain cases, we want to ensure that restraints and constraints on the new authorities are included in the Bill. We do not want the new authorities, flush with new resources, responsibilities and powers, aggressively and vigorously to pursue companies that may be innocent and blameless. The disruption of a company's business and the undue publicity could have a serious effect on it.
      I expect the OFT to take a more rigorous view of company raids than other authorities. Only a few weeks ago, several pharmaceutical companies were subject to a
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      dawn raid, and it is staggering how the details of raids are often firmly in the public domain and the media before they take place. That is of great concern, especially as we still operate under the premise that people are innocent until proved guilty. Such cases are usually complex and take many months, or even years, to resolve. Although prosecutions are often not pursued or are unsuccessful, incalculable damage is inflicted in the meantime on the interests of the companies under investigation.
      Amendment No. 10 deals with super-complaints. Those are an important and useful innovation, strongly supported by all the main consumer bodies. They ensure that something that is happening across the country does not have to be pursued by individual trading standards departments, but by a super-complaint brought, typically, by a consumer body. The Bill specifies, however, that the OFT should publish a response to a super-complaint within 90 days. We agree that there should be a limit on the time taken to respond, but our amendment suggests 60 days. There can be no practical objection to that. Extensions of time could always be applied for and given.
      It is almost inevitable that substantial publicity will be generated, especially by the first super-complaints. They will be a novelty and probably come on the back of a substantial consumer campaign on a particular malpractice or piece of sharp trading. If such publicity is generated and it blights the activity of a company or group of companies, it is important that the period should be as short as possible. On the other side of the coin, it must surely be in the interests of consumers that such matters be resolved as speedily as possible.
      The sister amendment, amendment No. 11, would remove subsection (4) from clause 11, which allows the Secretary of State to take the power to amend the time limit, presumably up or down. In Committee we debated the best intentions of this particular Secretary of State and those who advise her, but we still think that the clause should be changed.
      Mr. Harry Barnes: Some 13 amendments are in my name and in those of my hon. Friends. They fall into three categories. In some, the words "and producers" is inserted after the word "consumers". There is one category where that operates in connection with the super-complaints procedure. A separate amendment seeks to keep alive section 12 of the Fair Trading Act 1973, as compared with certain aspects of this legislation where it affects producers and the public interest. I have much more sympathy with the Fair Trading Act than with some items in this Bill, even though there is much more in the Bill which deals with consumers, which is a distinct improvement.
      As I said, I want to insert "and producers" after "consumers". While all of us cannot exist without being consumers, we depend on producers, and I hope that the great majority of us are producers for considerable sections of our lives. We are producing legislation on this occasion, so we are part of that procedure. Everyone is just about covered by the categories of "producer" and "consumer", but that does not mean that the way in which they operate is the same, or that they have identical interests.
      Sometimes, the consumer interest may rub up against the producer interest. The cheap production of goods and services may be a consumer interest, but the people who

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      are directly producing goods—working people by hand or by brain—may not wish to have their goods sold at the cheapest possible price all the time. They may want to raise some resources for themselves, so that they themselves can begin to become effective consumers. If we put all our eggs in one basket—with the consumer—we do not seem to serve our constituents in as full and as good a way as possible. That is the reasoning behind the amendments that insert the words "and producers".
      I attempted in Committee—it has already been dismissed to some extent by the Opposition Member who talked about G.D.H. Cole—to draw that distinction. I was a bit late in doing that. This is complex legislation, and the day after I found out that I had been placed on the Bill, I had to turn up at one of the meetings to try to fathom what we were dealing with.
      By the time I had tabled an amendment to introduce the word "producers", it was in a rather odd position—it meant producers being involved merely in matters that were of consumer interest. That will be the case to some extent with some of these amendments, but the main intention is to say that producers will have specific producer concerns themselves. In particular, the producer provisions in connection with the super-complaints procedure in amendments Nos. 218 to 222 are meant to produce a situation in which producers, as defined in amendment No. 222, will be able to have a say and an influence, and to make representations to the OFT about their concerns and their interests, in the same way as consumers do.
      It is not entirely a G.D.H. Cole measure, as the producers are not defined just as being workers by hand or by brain. They are defined as people who are involved in the productive selling and manufacturing system, so it cuts across class barriers to some extent. The Minister may have some problem in determining the weight that should be given to different sections. I want to refer to the concerns and interests of the TUC and particular trade unions in such matters.
      3.15 pm
      Various trade unions have pressed us on the matter. Members of the Committee received a letter from the Transport and General Workers Union's agriculture food section, in which it suggested that producers' interests should be considered as well and that we should have something about that in the Bill, presumably in line with the type of measures I am putting forward.
      I saw one representation relating directly to the Bill in the Financial Times on the day of Second Reading. It was from Ed Sweeney, general secretary of Unifi, the financial sector trade union, who said:
      "Consideration should also be given as to whether the new super-complainant' procedure (that will enable certain consumer organisations to have the right to compel initial investigations by the Office of Fair Trading into specific markets) should be extended to other third parties."
      That is what I am attempting to do with the amendments.
      I am keen that we should progress because I am interested in the public interest provisions. I would not want to talk myself out on those, but I have an amendment that seeks to preserve section 12 of the Fair Trading Act 1973. It allows the Secretary of State to give directions to
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      the Director General of Fair Trading on a number of issues, including prioritising in order to identify practices that may adversely affect consumers; determining priority markets requiring assessment as to whether a monopoly exists; and deciding whether to refer monopoly cases to the Competition Commission, or trade practices to the consumer protection advisory committee under part II of the Fair Trading Act.
      The right to refer monopoly cases to the Competition Commission is part of the argument that I will seek to advance later when we deal more particularly with mergers and the public interest provisions, but Unifi and the wider labour movement are clearly concerned that mergers and monopoly development situations will seriously affect the well-being of people and the future of their firms, which may close. In those circumstances, producer interests in terms of earning one's livelihood are to the fore. The Secretary of State needs to be able to continue to take that into account as an interest.
      If we have producer bodies and a producer's super-complaints procedure, that will provide an avenue for bringing concerns to the attention of the Director of Fair Trading. In addition, later amendments will enable such matters to be brought to the attention of the Secretary of State so that he or she can act. Amendment No. 217 is necessary to facilitate matters that appear later in the Bill. I hope that the Minister will respond favourably to the notion that producer interest can be squeezed by this sort of legislation, admirable though it is in dealing with consumer interests. There might be a need for balance if other viewpoints are to be put forward.
      G.D.H. Cole suggested in his early days that Parliament should be reformed and there should not be a House of Lords and a House of Commons. He advocated that instead there should be a House of Producers and a House of Consumers. The consumers would be rather like the House of Commons because we are all consumers. The producers would be organised through guild trade unions—presumably there would be a form of indirect election—and would operate the other House. He thought that within a socialist society these bodies would not conflict with each other. However, he felt that if they were in conflict, over-riding provision should be given not to the House of Consumers but instead to the House of Producers, that being the nobler ideal.
      Without going as far as G.D.H. Cole would have wanted, perhaps we can learn something from some of the things that he said.
      Dr. John Pugh: First, I shall respond to the hon. Member for North-East Derbyshire (Mr. Barnes). One suspects him of trying to introduce social revolution on the back of the Bill, that is by smuggling in Marxism through the back door. I am sure that that is not far away from the plot. In this instance, however, he seems to seek only an innocuous change of wording. Clause 6(1) states:
      "The OFT has the function of…making the public aware of the ways in which competition may benefit consumers".
      If the amendment were agreed to, the subsection would provide that
      "competition may benefit consumers and producers."
      In that event, the OFT would have a more difficult job. Some producers will not significantly enjoy any benefit of competition. In some instances, they would like no competition.

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      I move on to the issues raised by the hon. Member for Eastbourne (Mr. Waterson), and on some I do not want to trespass. There is a sophisticated legal debate on the appropriate term for legal proceedings. That is whether it should be 90 days or 60 days. I can leave that to others.
      The spirit behind the idea of using fine income to reprocess for the benefit of the consumer seems to be entirely correct. It has an element of earmarking, which is attractive. There is also the element of restitution. Presumably those who are offended will have an opportunity to contribute to the common good. It even brings in modern concepts such as hypothecation. It seems that the idea will do good.
      The Minister's argument appears not to be that the idea will not do good, but that it may lead to further harm. It is suggested that the OFT will take an aggressive attitude towards charging producers that it thinks errant or wrong and accumulate money to use for other purposes that it has in mind. That is an objection in principle to many fines in many places. The same objection could be made in respect of traffic-calming measures and speed cameras, for example. It could be made also in terms of traffic wardens. There seems not to he a fundamental objection.
      The wording suggested by the hon. Member for Eastbourne is surprisingly mild. It is that the OFT will consider whether any fines that are imposed under chapters 1 and 2 of the Act might be applied for any purpose. The wording does not command the OFT to do that. It merely gives a power to the office should it consider that to be an appropriate and good thing to do. The Minister might well wish to revisit this idea. Ministers are not loth to throw away powers unnecessarily offered to them. In this instance, the hon. Gentleman is offering a new power to the Government, in a sense. The OFT is not exactly the same thing as the Government, but it may find the process of administration useful in future circumstances.
      I disagree with the hon. Gentleman on one issue, and it is an issue on which we disagreed in Committee. It relates to illustrating the additional costs that are incurred by business as a result of the various procedures in which the OFT will engage when investigating mergers, cartels and the like.
      I share the hon. Gentleman's scepticism in that the Government are often thoroughly wrong when they talk about the effects of a piece of legislation, the red tape that will be involved and the cost to business. We have the shocking example of the Government declaring not too long ago that the effects of the increased burden on care homes would be cost neutral. I think that that is what the Government's investigation showed. Everybody accepts that the costs amount to about £300 million. If the effects of that legislation are cost neutral, care homes are behaving in an add way: they are going out of business.
      There is a problem, and it was aired in Committee. An easy assessment to make is that of the costs involved in complying with a piece of legislation. The Government should get that right, and conventionally they get it wrong. However, businesses can do all sorts of things in responding to an investigation into their affairs. For example, they can hire the most expensive lawyers in the land. They can engage their top management night and day. They can inflate costs as and when they wish. In this context, they are not merely complying; they are reacting. Although I am sympathetic to the remarks of the hon.
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      Member for Eastbourne, I see no realistic way in which business costs can be quantified in this instance. Therefore, there is no purpose in producing statistics that have little meaning, although the Government do it quite frequently.
      Mr. Richard Page: I shall speak specifically to amendment No. 223. I wish to reinforce the remarks of my hon. Friend the Member for Eastbourne (Mr. Waterson) about the timetabling of consideration. It is ridiculous that we shall try to get through about 200 new clauses and amendments in about four and a half hours, and especially an item as important as amendment No. 223, which deals with the codes of conduct and behaviour of trade associations.
      In making my short contribution, I shall worry the Minister by saying that I am broadly in favour of amendment No. 223. I welcome it, but I feel that it should go a little further. The provisions set out in the Bill needed to be amended in any event to take it into account that trade associations should properly be representative of the area of commerce or industry in which they operate, and that their finance, organisation, policies and procedures for redressing consumers' complaints should be as transparent as possible. These considerations are not taken into account in the Bill.
      When the Secretary of State addressed the issue of consumer codes of practice on Second Reading, she told the House that provided they would be effective in protecting consumer interests and would meet core criteria yet to be defined, the Bill would include
      "measures to enable the OFT to give formal approval to voluntary industry codes of practice…and to promote the benefits of those codes to consumers and businesses."—[Official Report, 10 April 2002: Vol. 382, c. 49.].
      We all say amen to that. I do not think that anyone would quarrel with such an outcome if it could be achieved. However, there is an issue that was not made clear on Second Reading, nor was it made clear in Committee, and the issue still remains obscure. The amendment does not make clear where the boundary will lie between the criteria that the OFT will be specifying and where the voluntary codes of practice will take effect. They will be drawn up by trade associations and others, to be submitted to the OFT for its approval.
      The House, as well as consumer groups and trade associations throughout the country, will want to know where they stand before the Bill comes into effect. They will not want to await an interpretation by the OFT in the fullness of time.
      I know, Mr. Deputy Speaker, that you were in the House, as I was, when it passed legislation that led to the establishment of the Child Support Agency. We passed that legislation because it was absolutely right that parents who were not looking after their children should be called to account and made to contribute to looking after them. Everybody was agreed and the Bill went through Parliament in record time. However, none of us suspected that the rules and regulations that would follow, introduced by the civil service, would create a nightmare in years to come and clog our surgeries with problems for month after month. We are finally getting on top of things, but if we had known what was to come, we would have been rather more circumspect in deciding what to put into legislation.

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      I hope that we shall hear something helpful from the Minister. Organisations outside the House have already picked up the issue and have started to run with it. The CBI has made it clear that it wants further discussions on the framework and the principles that the OFT will be using to ensure that codes of practice will be
      "fair and workable for both businesses and consumers."
      Citizens advice bureaux have already commented on the likelihood that the OFT will start to receive complaints that it should not have approved some codes in some instances and should have approved codes in others, or that the codes are not working properly. Those reactions will be the inevitable result of not spelling out the core criteria to be met and failing to explain how much room trade associations have in formulating proposals for the code of practice. An outline of the thinking behind the scenes would therefore be appreciated. I am anxious that Ministers are more concerned about putting in place a framework of regulation—indeed, the Bill should have been called the enterprise regulation Bill—than about achieving a proper balance between consumers' interests and ensuring that business is free to serve customers and consumers to the best of its ability. Government amendment No. 223 is worrying because it seems to show where the Government's priorities lie.
      3.30 pm
      On Second Reading, in the spirit of helpfulness and co-operation that I obviously like to adopt, I made clear my concerns about the need for proper recognition of trade associations and the role that they should play in arrangements for protecting consumer interests. I have since had several discussions with trade associations and Mr. Mark Boleat, who is not only a professional consultant but has been the director general of two of the largest trade associations in the country. He served in one for quite a few years, then moved to an even bigger organisation and has now set up his own consultancy practice. He has another tremendous merit as he is a constituent of mine, which obviously gives him every possible advantage. I listened to him with great interest and am grateful to him and a number of trade associations for their advice and assistance. They emphasised the fact that it is essential that trade associations, which will effectively draft consumer codes of conduct under the Bill, should be as representative of the industry as possible. If Ministers are aware of that point, they have not given any sign of it.
      I do not want to be too prescriptive, but codes of conduct should be given only to leading trade associations, which enjoy at least 50 per cent. representation of the industry; I shall not object if that representation is 60 or 70 per cent. Some years ago, I went to Japan, where I expected to see a Minister but, instead, I was ushered into the presence of the Japanese shipbuilding trade association, the most powerful body in the area, with only one company not being a member. I rapidly came to the conclusion that the association was highly instrumental in Government business and in driving forward a number of activities, including exports and Government financial measures to help the industry. I commend that example to the Minister. My constituent, Mark Boleat, wrote a book some time ago—I do not
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      recommend it unless people suffer from insomnia and want to go to sleep—on the history of trade associations. When I read it five years ago, it covered 1,400 trade associations.
      The DTI cannot possibly have enough officers to deal with so many associations. Different associations need to be brought together so that the DTI can give a focus to a sector rather than trying to deal with hundreds of warring trade associations; that can only be beneficial for the economy. I make that point in the spirit of co-operation and helpfulness which is in my nature, as everybody in the House knows.
      Trade associations seeking approval from the OFT for consumer codes of practice should make available to the public their membership, finances and strategic plans both on the internet and in hard copy. Trade associations should make the public as consumers aware of the composition of their governing bodies, policies and procedures for dealing with complaints. I do not doubt that the OFT will consider that when it looks at the codes submitted to it. I do not advocate a wholesale return to the guild system of the middle ages, but it had some good points; if anyone was not up to scratch in the production of a particular service or product, they either had to get up to speed or were put out of business. Codes of conduct should have some insurance backing; trade associations should ensure that every single member of the sector has insurance cover so that if it goes bust or produces faulty work, the consumer is protected. That will make a trade association's logo meaningful; every consumer will know that if they go to a company belonging to the association they will have redress if something goes wrong. If a company goes bust, consumers will not be left with faulty products or services.
      The Government amendment, which alters the regulatory mechanism, does not advance that proposal. I hope that I am pushing at an open door; nothing in my suggestion should come as a surprise to Ministers. The Department published a guide on best practice models for trade associations as long ago as 1996; since then the subject has been thoroughly investigated by the Trade Associations Forum. The criteria that trade associations and others must meet when submitting consumer codes to the OFT for approval are sufficiently important to merit much more discussion than we can give them today. The Government amendment characteristically leaves the matter to the OFT, presumably in consultation with the Department, to determine. That is not good enough; it is in no one's interest for the OFT to set out guidelines on consumer codes that are likely to raise business costs substantially or prove too bureaucratic. On the other hand, consumers need reassurance about the procedures for complaint and redress offered by trade associations, and must have confidence in the OFT's regulatory role. Those issues have been passed over, so I would be grateful if the Minister could offer me some reassurance in her reply.
      Mr. Mark Field: You may be relieved to have begun chairing the proceedings now, Mr. Deputy Speaker, and not to have played any part in Committee, where debate was wide-ranging. Similarly, the last three contributions have brought forth thoughts on the socialist philosopher Mr. Cole, the care home crisis and the Child Support Agency; there are no immediate comparisons among those three subjects.

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      I agree with much of what my hon. Friend the Member for South-West Hertfordshire (Mr. Page) said. At Conservative party conferences, we are used to hearing the calls of many activists to bring back various things, but I have not yet heard of anyone going back as far as the middle ages. Perhaps we will hear other singular proposals in our debate.
      I took on board my hon. Friend's claim that it would have been better to call the Bill the enterprise regulation Bill; that point is central to the concerns of my hon. Friend the Member for Eastbourne (Mr. Waterson). I acknowledge the fear that the OFT will flex its muscles too often. We must ensure that that temptation is kept to a minimum.
      The key consideration is the cost to business. I am probably less sanguine than many of the professional bodies that wrote to members of the Standing Committee about the power of super-complaints. I am concerned that the self-appointed consumer champions will have far too much authority in relation to certain aspects of the Bill. There is a risk that legitimate business interests will be significantly harmed, so I hope that the Minister will give fair consideration, as she did in Committee, to the time limit for responses. A 60-day limit is sufficient. How will the Minister exercise her discretion to vary or override the current 90-day limit, a subject tackled in one of the Conservative amendments?
      Miss Melanie Johnson: Our amendments Nos. 156 and 157 deal with the need to exclude any information relating to the affairs of a particular person or business
      "the publication of which would or might seriously and prejudicially affect the interests of that person"
      or business. In Committee the hon. Member for Eastbourne (Mr. Waterson) rightly said that it would make enormous sense to replicate the wording in clause 235 for purposes of clarity and consistency. I agreed to consider the suggestion, and to be as helpful as I could.
      As originally drafted, part 9 did not cover information obtained by the OFT under part 1. Clause 235 in its original form listed considerations to which public authorities must have regard before disclosing competition information, as defined. I shall not go into all the details, but following discussions on part 1, the Government reviewed the application of provisions in part 9, including clause 235. The upshot was the tabling of amendments that effectively render clauses 4, 5 and 6(3) redundant. Protection from unwarranted disclosure will now be provided in part 9. That will achieve the consistency throughout the Bill that Opposition Members—particularly the hon. Member for Eastbourne—wanted and which we agreed would be beneficial.
      Amendment No. 223 seeks to tighten the definition of a consumer code of practice, and to ensure that the widest possible range of organisations can act as code sponsors. The hon. Member for South-West Hertfordshire (Mr. Page), sadly, could not be with us in Committee—not everyone had that honour—but we all agreed then that the amendment would be helpful in giving the OFT clear powers to implement its new codes of practice regime, whose purpose was to help consumers to find reliable businesses. It was, I think, the hon. Member for Cities of London and Westminster (Mr. Field) who described this as an "enterprise regulation Bill". I trust that "regulation" in this context would include an element of
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      self-regulation, for here we see an element that is not entirely to do with regulation in the classic sense, but which is much more akin to self-regulation.
      The hon. Member for Southport (Dr. Pugh) noted that as drafted the clause would allow guidance-only codes to be approved. That was not our intention. The clause has been redrafted to make it clear that only codes regulating the behaviour of those signed up to them will be approved. To be approved, a code will have to comply with the OFT's criteria, which do indeed regulate the behaviour of members. Consumers will have the reassurance of knowing that if there is a problem, it can be put right: to obtain OFT approval, a code must contain mechanisms for both redress and compliance. Problems will be resolved, and failure to comply with the code will be dealt with.
      We removed the words "relevant association" in case that was construed as limiting sponsors to trade associations. I know that the hon. Member for South-West Hertfordshire is a great fan of trade associations, but we wanted to ensure that the widest possible range of organisations would be able to act as sponsors. They might include local authority trading standards departments with good-trader schemes, or owners of shopping centres who had signed up their tenants to a code of practice.
      Trade associations' redress systems will have to be transparent and compliant to meet the OFT's criteria. The whole system is voluntary. The OFT will publish criteria with which sponsors must comply to seek approval. It will all be spelled out. There has already been some consultation, in which I think the CBI has been involved.
      As I said, we are not dealing with just lead trade associations. We wanted the arrangement to be as open as possible, to ensure that there were plenty of methods of entry for small businesses, which might not be members of the smaller associations. The most important thing is for organisations to meet the criteria, so that consumers have the protection that they expect from compliance with the code. Businesses will not have to belong to a trade association and pay for a full range of services to gain the right to use the logo.
      3.45 pm
      Mr. Page: I did not mean my remarks to apply exclusively to trade associations as such, but is there not a danger that if every small organisation—I will not say "whipstitch organisation"—qualifies, the logo will be devalued? Moreover, such organisations will not have the back-up and the managerial strength to provide the various required protections for consumer complaints. Organisations will have to be of a certain size to have any credibility in this regard.
      Miss Johnson: Whoever fulfils the role will have to meet the same criteria. Obviously, that will be an issue if an organisation is too small to do so effectively, but there are a range of code sponsors that may not be small, but are not necessarily trade associations. I have mentioned local authorities, chambers of commerce and shopping centres, but registered charities could also be involved. It is not necessarily a question of scale.
      What is important at the end of the day is that consumers get what they expect from the logo and the code. We believe that clause 8 will give the OFT the

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      power that it needs to run the codes regime in the way that it envisaged in its original consultation document, issued in February 2001.
      New clause 3, as we know, concerns fines. I will not go into detail, but, like Opposition Members, I am keen to encourage projects or activities that benefit consumers, and clause 267 already allows the Secretary of State to do that. The consumer grants fund that it will establish could be used to give financial assistance to projects in areas where a general class of consumers has suffered harm—I gave examples in Committee—but where it is not possible for all the individual consumers concerned to be identified or to seek redress.
      In that sense, clause 267 surely has a wider application than the new clause, which I think is sensible. Although one of our priorities will be to fund projects relating to the markets in which the OFT has established a breach of competition rule, the clause will ensure consideration of financial assistance for a wide range of products or other work that would benefit consumers. That will not be confined to consumers who have suffered from anticompetitive practices for which fines have been imposed under the Competition Act 1998; it will benefit consumers more widely, and will ensure that a more strategic view is taken, both of consumer issues that need to be addressed and of the funding available.
      As was said in Committee, fines are by their nature unpredictable in terms of both timing and amount. Consumer benefits linked to them would also be erratic and unpredictable. Furthermore, fines can be imposed under the Competition Act only when the undertaking concerned has acted intentionally or negligently. Although such cases will frequently be those in which most damage is done to consumers, harm might also be done in other cases.
      All that is, of course, in addition to our continuing ability to fund bodies such as the National Consumer Council which promote the interests of consumers.
      For the reasons that I have given, I believe that clause 267 as drafted is better for consumers than the new clause and, indeed, makes it unnecessary.
      Mr. Waterson: I take the Under-Secretary's point about the income stream from the source. However, is it not part of the point that the use of the money should be linked to the reasons for the fines? Will she confirm that if we do not act, the fines will simply disappear into the public purse?
      Miss Johnson: There is no question of the fines disappearing into the public purse. They will be used for the projects and activities that I described.
      Amendment No. 3 would require the OFT to produce a regulatory impact assessment every year. I do not have sympathy with the amendment because we could end up with regulatory impact assessments of every Act. That is a heavy bureaucratic burden. The OFT already has to consider the effects of its actions on business and it is therefore inappropriate and unnecessary to require it to quantify those effects in its annual report. We have a regulatory impact assessment of the Bill; we could argue about the detail if hon. Members wish. However, the OFT is not a legislative body and it will exercise only the
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      powers that Parliament grants it. All the legislation that it enforces has been approved here and accompanied by an initial regulatory impact assessment. Now is the appropriate time to consider the additional costs that the new measure will impose.
      There are statutory checks on the use of all the OFT's powers. For example, it cannot make a market reference unless it has reasonable grounds for suspecting that the reference criteria are satisfied. I expect that the OFT will not use its powers without good reason. The Bill increases its accountability in the system at all levels.
      As I said when we considered Government amendments Nos. 156 and 157, amendments Nos. 6 and 8 have been overtaken by the deletion of clauses 4(5) and 6(3). We have therefore already dealt with those matters.
      Amendments Nos. 10 and 11 cover the time allowed for the OFT to respond to super-complaints. The issue is whether 60 or 90 days are sufficient. The Opposition support the former and the Government the latter. There is not much meat in the argument, but I stick to my belief that a period of 90 days is right. We want to ensure that the OFT has sufficient time to consider super-complaints. If there is a case to answer, business will need to formulate a response and the OFT will need time to complete its analysis.
      We believe that 90 days is the right period. However, if experience shows that super-complaints can be tackled properly in less than 90 days, the Secretary of State can curtail the statutory time scale by using the powers in clause 11(4). We should start with a time scale of 90 days and ascertain what happens. Amendment No. 11 would delete clause 11(4). As I said earlier, the flexibility should remain, so we cannot support the amendment.
      Let us consider the points that my hon. Friend the Member for North-East Derbyshire (Mr. Barnes) made. He tabled amendments about producers and producer interests, which we recall from discussions in Committee. Amendment No. 210 seeks to ensure that the OFT makes the public aware of the ways in which competition may benefit producers as well as consumers and the economy, by providing advice and information.
      Clause 6 gives the OFT the function of promoting to the public the benefits of competition for consumers and the economy. That reference to the economy already covers any relevant, if not all, producer interests. Indeed, producers are also consumers and both sets of interests need to be balanced, as my hon. Friend acknowledged. I therefore do not believe that it is necessary or desirable to specify producer interests in the clause.
      The emphasis on consumers is surely right. Consumers are often unaware of the importance of competition for lower prices, higher quality and greater choice. Strengthening consumer knowledge of the benefits of competition, which strengthens the consumer voice, has a key role in improving economic performance.
      Amendments Nos. 211 to 216 seek to widen the definition of a code of practice to include bodies that safeguard or promote the interests of producers, such as trade unions or business groups. That would allow such codes to be submitted to the OFT for approval under the new codes of practice regime. If the definition were widened, it would be outside of the scope of the scheme as set out by the OFT in its consultation paper. Its focus is solely on business-to-consumer codes of practice.

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      I do not suggest that there is no room for codes that protect producers, and there are almost certainly several perfectly good business-to-business and business-to-producer codes that benefit those involved. There is no reason for the codes not to follow best practice by making use of the OFT's criteria, if appropriate. However, the codes would not be eligible for OFT approval under the Bill.
      Again, that is because we intend to help consumers find reliable businesses. Consumers do not always have access to sufficient data about businesses to make an informed choice. Often, they do not have the knowledge and experience to help them choose, for example, a reliable garage for car repairs. Producers such as trade unions or business groups are clearly more able to find good traders and better deals. That is why the scheme is limited to consumer codes.
      Amendments Nos. 218, 220 and 221 would permit producer bodies such as trade unions, as well as designated consumer bodies, to submit super-complaints. Amendments Nos. 219 and 222 would enable super-complaints to be made about market features that harm, or appear to be harming, the interests of producers, who are defined in the measure.
      We have made it clear that we view the Bill as a measure for consumers, and the focus on their interests benefits everybody. After all, we are all consumers, and companies that respond to consumers' needs are successful. That is to the advantage of the people who work in those businesses and the long-term viability of the businesses. To that extent, the Bill articulates the same values as my hon. Friend's amendments.
      Mr. Mark Field: The Under-Secretary rightly points out that we are all consumers. However, we must remember that that is so because we have successful businesses. We want them to thrive, which is why we tabled our amendments. Clearly, we must get the balance right, but we all rely on a thriving and successful business sector.
      Miss Johnson: The Government recognise the importance of a thriving business sector, which is the basis for our economic prosperity. Indeed, everything flows from that. Money for public services ultimately derives from that prosperity.
      The intention of the super-complaints provision is to alert the OFF to market failures that significantly harm the interests of consumers. Individual consumers are unlikely to have access to that information, or the relevant resources or skills to formulate complaints. The aim is to enable consumer bodies to do that on their behalf. The procedure is designed to benefit consumers, and will therefore be available only to designated consumer bodies. Producer bodies do not have as their principal raison d'etre the protection of consumer interests. Producer bodies can already put complaints about market failure or other issues to the OFT, and nothing in the Bill prevents them from continuing to do so.
      I want to speak about section 12 of the Fair Trading Act 1973. Amendment No. 217 would preserve that provision. The provisions relating to the consumer protection advisory committee will become superfluous because clause 10 abolishes it. As an independent body, the OFT should be free to set its own priorities in the new regime. The existence of the powers of direction under the Fair Trading Act could inhibit that freedom.
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      The amendment would change the intended functions of the OFT and would, in some cases, impose unnecessary burdens and constraints on it. I do not think that there would be a benefit to consumers, businesses or producers, and I therefore hope that my hon. Friend the Member for North-East Derbyshire will not press his amendment to a vote.
      4 pm
      Regarding my earlier answer to the hon. Member for Eastbourne on fines, I want to clarify the fact that the fines will go into the Consolidated Fund, so they will be in the public purse, but the money from the new consumer grants fund will be used for the projects that I described. That concludes my remarks on the amendments in this group.
      Mr. Waterson: I am grateful to the hon. Lady for the trouble that she has taken to provide that explanation. I am pleased, not least because one of our concerns is being dealt with in a different part of the Bill; that seems to make sense. I do not want to prolong the debate about 60 days versus 90 days. We have probably beaten that argument to death, one way or another.
      I was pleased that the Minister corrected what she had said earlier about fines. It is clear from the Bill that there is no mechanism for those fines to be diverted towards something useful for consumers, and that they will just go the way of all fines—that is, they will, as she has just confirmed, disappear into the Consolidated Fund.
      I made it clear that we welcome the separate provision for funding for consumer information and so on, but it seems to us—alarmingly, perhaps, the Liberal Democrats seem to take a similar view—that it would be rough justice if the money could be directed towards consumers when fines were imposed. Diverting fines in that way would be particularly appropriate in cases of fines being imposed because of a particular practice or set of practices in which it was impossible to identify those who had been harmed. We therefore remain disappointed by the Minister's approach to the matter. We seem to have gone round in an enormous circle, having debated it more than once.
      On business costs, I simply do not understand the problem. It would be a modest but necessary discipline on the new system if, once a year, or whatever, the Government were required to make an assessment of the costs to business of what they were doing. Otherwise, there would be no mechanism by which they could make a cost-benefit analysis of their activities. This is a modest proposal. It is all very well for the Minister to say that we would end up with regulatory impact assessments of every piece of legislation every year. If the legislation impacts directly on business, what would be wrong with that? We cannot keep on churning out pages and pages of legislation that affect business and add to its costs, without giving some thought to what it is costing the business community.
      We are disappointed by the Minister's response on both those issues, but I shall not press the new clause to a Division. The matters should be further debated in another place, and I am sure that they will be. I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    Schedule 1

      THE OFFICE OF FAIR TRADING
      Miss Melanie Johnson: I beg to move amendment No. 89, in page 186, line 19, at end insert—
      '(2) Sub-paragraph (1) does not apply in relation to any document which is, or is to be, signed in accordance with the law of Scotland.'.
      Mr. Deputy Speaker (Sir Michael Lord): With this it will be convenient to discuss Government amendments Nos. 90, 246, 247, 162 to 164, 284, 287 to 295, 185 to 187, 321, 322, 356 to 370, 98, 323, 188 to 190, 301, 135, 136, 192, 193, 302, 194, 137, 191, 303, 138 and 139.
      Miss Johnson: This is a big group of Government amendments, and I do not propose to speak to all of them. They are minor or consequential, and cover several different areas. I shall speak briefly to amendments Nos. 321, 322, 356, 357, 359, 360 to 369 and 370.
      I place on record our thanks to the City of London Law Society for its help and support in developing these exemption provisions. This is a very technical and specialised area, and, on behalf of the Department and the Government, I thank members of the society for giving so generously of their time and expertise in meeting officials and commenting on the drafting of the clauses. The amendments clarify and bring greater certainty to the exemption provisions. I shall be happy to answer any questions that hon. Members may have on the other amendments. I commend the amendment to the House.
      Amendment agreed to.

    Clause 4
      ANNUAL AND OTHER REPORTS
      Amendment made: No. 156, in page 2, line 31, leave out subsection (5).—[Miss Melanie Johnson.]
    Clause 6
      PROVISION OF INFORMATION ETC. TO THE PUBLIC
      Amendment made: No. 157, in page 3, line 17, leave out subsection (3).—[Miss Melanie Johnson.]
    Clause 8

      PROMOTING GOOD CONSUMER PRACTICE
      Amendment made: No. 223, in page 3, line 37, leave out subsections (2) to (5) and insert—
      '(2) In carrying out that function the OFT may (without prejudice to the generality of subsection (1)) make arrangements for approving consumer codes and may, in accordance with the arrangements, give its approval to or withdraw its approval from any consumer code.
      (3) Any such arrangements must specify the criteria to be applied by the OFT in determining whether to give approval to or withdraw approval from a consumer code.
      (4) Any such arrangements may in particular—

      (a) specify descriptions of consumer code which may be the subject of an application to the OFT for approval (and any such description may be framed by reference to any feature of a consumer code, including the persons who are, or are to be, subject to the code, the manner in which it is, or is to be, operated and the persons responsible for its operation); and

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      (b) provide for the use in accordance with the arrangements of an official symbol intended to signify that a consumer code is approved by the OFT.

      (5) The OFT shall publish any arrangements under subsection (2) in such manner it considers appropriate.
      (6) In this section "consumer code" means a code of practice or other document (however described) intended, with a view to safeguarding or promoting the interests of consumers, to regulate by any means the conduct of persons engaged in the supply of goods or services to consumers (or the conduct of their employees or representatives).'.—[Miss Melanie Johnson.]

    Clause 12

      THE COMPETITION APPEAL TRIBUNAL
      Mr. Lansley: I beg to move amendment No. 147, in page 6, line 5, leave out "Secretary' of State" and insert "Lord Chancellor".
      Mr. Deputy Speaker: With this it will be convenient to discuss the following: Government amendment No. 158.
      Amendment No. 148, in schedule 2, page 188, line 12, at end insert—
      '(1A) A person is not eligible for appointment as an ordinary member unless he appears to the Lord Chancellor to have appropriate experience and knowledge (whether of competition law and practice, other relevant law and practice, economic and business practice, or experience in relation to any sector of industry to which the Competition Appeal Tribunal exercises an appellate function'.
      Government amendments Nos. 169 to 181.
      Amendment No. 311, in clause 17, page 7, line 39, leave out "that" and insert "as to whether".
      Amendment No. 312, in page 8, line 1, leave out "that" and insert "as to whether".
      Amendment No. 313, in page 8, line 3, leave out "that" and insert "as to whether".
      Amendment No. 314, in page 8, line 4, leave out "that" and insert "as to whether".
      Government amendments Nos. 372, 159, 182 to 184, 252 to 255, 160 and 161.
      Amendment No. 315, in clause 116, page 82 leave out lines 25 to 34 and insert—
      '(5A) The Competition Appeal Tribunal may confirm or set aside the decision which is the subject of the appeal and may—

      (a) remit the matter to the OFT, the Secretary of State or the Competition Commission as the case might be ("the original decision maker");

      (b) cancel or vary any conditions or obligations imposed by the original decision maker;

      (c) give such directions or take such steps as the original decision maker could have made;

      (d) make any other decision which the original decision maker could have made.'.

      Government amendments Nos. 256, 257, 296 and 297.
      Mr. Lansley: This group of amendments relates to the Competition Appeal Tribunal. There are 29 Government amendments, which I am sure the Minister will tell us about in due course. I want to speak to amendments Nos. 147 and 148, tabled in my name, and I shall also refer to our amendments Nos. 311 to 314 and 315.

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      The purpose of amendment No. 147 is to change the responsibility for the appointment of ordinary members of the Competition Appeal Tribunal's panel. Hon. Members will recall that the tribunal was established under the Competition Act 1998, and consists of a president, a panel of chairmen and ordinary members. The ordinary members are appointed by the Secretary of State, as distinct from the Lord Chancellor, who is responsible for the appointment of the president and the panel of chairmen; that is carried forward into this Bill. The president and the panel of chairmen have responsibility not only for having competition law expertise but for ensuring that the tribunal behaves in a way that is consistent with the way in which a court would consider similar decisions.
      As the Government have constructed the legislation, the Competition Appeal Tribunal indeed has to behave like a court in some respects, in that it applies the principles of judicial review to appeals that are made to it. It is, therefore, necessary for it to have legal expertise. For that reason, if for no other, appointment by the Lord Chancellor is to be sought after.
      There is, however, a particular reason why I propose that the Lord Chancellor should also be responsible for appointing the ordinary members. Under the Competition Act, it was correctly felt that the ordinary members could be appointed by the Secretary of State because they would bring the additional expertise necessary to examine appeals on their merits, on issues relating to anti-competitive agreements or abuses of a dominant position. The cases brought before the tribunal demonstrate that experience not only of competition law but of economic analysis of competition is necessary to reach decisions on those issues. I shall come to appropriate expertise when I speak to amendment No. 148.
      Other things being equal, the Secretary of State could continue to appoint the ordinary members of the tribunal, in relation to decisions on the Competition Act, without arty problems. That is because the decisions that are appealable to the Competition Appeal Tribunal under the Competition Act come from decisions made by the Office of Fair Trading. Under the Bill, however, the decisions will not necessarily be made by the Office of Fair Trading or the Competition Commission. In certain circumstances, they will be made by the Secretary of State. Of course, under the Fair Trading Act 1973, such decisions used to be appealable to the High Court, so a judge would be responsible for assessing judicial review decisions made by the Secretary of State. However, the Government propose in the Bill that decisions made on judicial review grounds be appealed to a body whose members are appointed by the Secretary of State.
      My primary contention in speaking to amendment No. 147 is that that is an unacceptable infringement of the proper independence of the tribunal in exercising its function. Indeed, such an independent and impartial tribunal is required by article 6 of the European convention on human rights. However, we could arrive at circumstances in which a decision made by the Secretary of State is appealed on judicial review grounds, but in which one of the members of the body to which it is referred is about to be reappointed—or not—by the Secretary of State. By the simple expedient of making the Lord Chancellor rather than the Secretary of State
      1062
      responsible for such appointments, we can escape that problem, so I commend the amendment to the Minister's consideration.
      Amendment No. 148 is designed to extend the description of the experience that ordinary members of the Competition Appeal Tribunal should have. My reason for tabling the amendment is that it is clear that the tribunal will not only be asked to consider judicial review decisions, but be used as a body under sector-specific legislation. For those who care to look, schedule 9 gives a range of examples in which that arrangement will apply. The decisions that will be made by sector regulators, especially in respect of licence conditions, are not simply legal decisions, but relevant to economic analysis and require business experience.
      That point was further brought home to me when it became clear that in the draft Communications Bill that is being scrutinised elsewhere—I am a member of its scrutiny committee—the Government intend that the Competition Appeal Tribunal be the body to which decisions made by the Secretary of State or the Office of Communications will be appealed. Those decisions will be substantive and not made simply on a judicial review basis, so general legal expertise and competition law expertise will not be sufficient for the panel in dealing with them.
      To make the Bill more effective in terms of the availability of opportunities for appeals to be heard in respect of sector regulators' decisions on licence conditions, my second submission on amendment No. 148 is that the Minister should think seriously about extending the sort of business and economic analysis experience that panel members of the Competition Appeal Tribunal can bring to bear.
      I want briefly to refer to amendments Nos. 311 to 314. The amendments deal with clause 17, which amends the Competition Act, and are intended to ensure that the question whether a claim for damages might be brought to the tribunal is determined not by whether the OFT has decided
      "that … the prohibition has been infringed",
      but by whether it has made a decision "as to whether" it has been infringed. The amendments do not stem only from the fertile imaginations of Opposition Members, but derive from the recommendations of the Joint Working Party on Competition Law of the Bars and Law Societies of the United Kingdom.
      4.15 pm
      As I understand it—I apologise if I have misunderstood the joint working party—the purpose of the provisions as things stand is that a court can entertain an application for damages by a private party in respect of infringements or argued infringements of the anti-competitive agreements or in relation to prohibitions on abuse of a dominant position. The current structure of the Bill would mean that where the OFT has decided that such an infringement existed, an application for an award of damages would go to the Competition Appeal Tribunal. However, the concern is that those who wish to argue that there is an infringement by which harm has arisen and for which damages may be claimed could still go to the court to make a private claim.
      For my purposes, I will be made comfortable if the Minister can assure me that it would not be possible for a further claim to be made when the OFT decides that such

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      an infringement has not been made. If it is possible for the matter to be taken to the court when the OFT has decided that there is no infringement and has not proceeded, that will be an additional jeopardy. It is that jeopardy that the amendments are designed to remove, so that the issue rests with the competition authorities and the Competition Appeal Tribunal, as I think the Government would have intended.
      Amendment No. 315 is intended to test the issue. Its purpose, which is to make decisions on merger references appealable to the Competition Appeal Tribunal on their merits, seems on the face of it to be a step too far. However, it is important to test the Minister out, especially as I do not think that that happened in quite the same terms in Committee. The question is whether the decision by the OFT on making a merger reference is sufficient for the subsequent investigation by the Competition Commission, which is usually the determining body in this regard, to be regarded as a full appeal by an independent and impartial tribunal. I think that the answer to that question is yes in terms of mergers, but for reasons that I shall come to in speaking to a later group of amendments, I think the answer is no in so far as market investigations are concerned.
      If the Minister can further assure us that the Competition Commission is the appeal body for such purposes—the independent and impartial tribunal that is needed for appeal against a substantive decision on a merger reference by the OFT—we will be sure that we have the two-stage process that is necessary to give proper reassurance to those who are affected by competition decisions.
      Dr. Vincent Cable: I should like to say a few words in support of proposals that seem sensible and constructive. I am not a lawyer either and I take my cue from the Law Society, but it seems to me that some perfectly justifiable points are being raised. In particular, I refer to amendment No. 315. I think that the question that is being asked—it has been put slightly differently from the way in which the hon. Member for South Cambridgeshire (Mr. Lansley) has put it—is about why there is a difference between the ways in which the Competition Act and the Bill work. As I understand it, the Competition Act allows a full and substantive appeal to be made on the basis of the merits involved, but the judicial review process for which the Bill provides is much more truncated. It is not obvious why the two matters should be dealt with somewhat differently, and the amendment is designed to provide not only a stronger process of appeal, but some consistency between the two measures. It would be useful to hear from the Minister the reasons why that difference is being maintained.
      Miss Melanie Johnson: The hon. Member for South Cambridgeshire (Mr. Lansley) has already covered the aims of amendments Nos. 147 and 148. On the first point, which is that the amendments would ensure that the Lord Chancellor would make all the appointments, as I explained in Committee, we are happy with the division of responsibilities that we envisage for the Lord Chancellor and the Secretary of State. I thought that the hon. Gentleman shot his own foot somewhat by pointing out that there would be a difference between the role of
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      the chairman and president and that of the other appointees to the tribunal, as those on the panel of chairmen would have to understand what was consistent and behave as if the tribunal were a court. The tribunal is indeed a court, and it therefore makes sense that the people who are appointed have explicit qualifications. The Lord Chancellor obviously has an expertise that is at a premium in considering such questions. We believe that his involvement in those cases should ensure that we attract candidates of the highest calibre to be chairmen.
      However, we believe that the Secretary of State for Trade and Industry is best placed to identify and select candidates with the necessary blend and breadth of experience and background to constitute ordinary members. They will not have to carry out legal roles, nor will they require legal qualifications. Such members will not necessarily be bringing specific legal expertise, but they will be expected to have expertise relevant to competition. They could be drawn from a wide range of backgrounds. The background could be legal but it could also be in economics, business, accountancy or other areas. For that reason, we believe that the right balance has been struck.
      There are already measures in place to ensure that the ordinary members, chairmen and president can carry out their duties without any external influence being brought to bear. We have strengthened these measures. The only grounds for removing any member from office will he incapacity or misbehaviour. The scenario that the hon. Member for South Cambridgeshire entertained briefly of a member being removed is not an issue. Also, members and chairmen will be appointed for one eight-year term with no reappointment. Previously, members were appointed for shorter terms and then reappointed, so the break that the hon. Gentleman referred to did exist.
      These safeguards, and others, will ensure the integrity of the tribunal's decisions. The division of responsibilities offers the best prospect of securing the required level of legal and other expertise on the tribunal.
      On the second issue, we share the desire of the hon. Gentleman—if we have understood the intention of his amendment correctly; there appears to be a negative too many—to attract ordinary members with relevant expertise. We made a commitment in the White Paper that all members should have expertise relevant to competition. However, we have deliberately not included a specific requirement in the Bill because of the difficulties in formulating such a requirement. That is a very different situation from that for the legally qualified chairmen and president, whom we require to have experience of competition law and practice. That concept is relatively easy to define.
      "Expertise relevant to competition" is much broader, and could come from working in business or from having an accountancy background, for example. We need to keep our options open if we are to attract members of the calibre required, and particularly if we want to attract candidates from diverse backgrounds and from all areas of the UK. The problems of definition do not arise here, as they did in the case of those who needed experience of competition law and practice. It is for that reason that we have made the change. I am entirely sympathetic to the points made by the hon. Gentleman.
      The amendment represents the sentiment of what we are trying to achieve, but it is not necessary to require it in the Bill. We could risk excluding potentially very good

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      candidates if we were to do so. I ask the hon. Gentleman to withdraw the amendment, recognising that the needs are being met.
      Amendment No. 315 seeks to give parties a right to review the substance of any decision that is taken. The subject of what could constitute the appropriate grounds for review of a decision following a merger or market investigation was discussed in Committee. As I explained then, the Bill provides for parties who are aggrieved by decisions to have them reviewed by the CAT on the same grounds as would be applied by the courts on the application for judicial review. That is the situation under the Fair Trading Act at present, where decisions of the Secretary of State are open to challenge on judicial review grounds.
      We continue to believe that judicial review is the right jurisdiction for appeals against decisions taken in merger investigations. That type of review by the CAT will ensure that the procedures followed by the authorities are fair and that the parties are given the opportunity to put their case. It will allow the CAT to re-examine any decision taken by the authorities to assess whether it is reasonable.
      No merger is prohibited by law from the outset. It is for the authorities to decide case by case whether any merger will lead to a substantial lessening of competition and what steps should be taken to remedy that in each case. That could mean outright prohibition, or imposing conditions as the price of clearance.
      Decisions will be based on an analysis of individual cases on their specific facts and an economic analysis of those facts by the authorities, acting in accordance with their statutory duties. They will not be evaluated against a defined prohibition by reference to an existing body of substantive competition law and jurisprudence, as would be the case with decisions under the Competition Act 1998.
      A considerable amount of discretion needs to be exercised. It would be difficult for the CAT to assess whether the decision that has been made is right or wrong in objective terms. In this context, we clearly need to ensure that the process followed by the authorities was fair and that the parties were given the opportunity to put their case. A judicial review type of appeal is therefore appropriate.
      Such a review by the CAT will also allow decisions to be assessed more quickly than would a full appeal on its merits. We consider that resolving these disputes quickly is particularly important in a merger situation where the market environment may be changing rapidly. The mechanism for challenging decisions made in relation to merger investigation references needs to ensure that the process followed by the authorities in a merger investigation is fair and that the parties are given the opportunity to put their case.
      If, applying the principles of judicial review, the CAT considers the challenge to the decision is justified, the original decision maker can be asked to look at the decision again. We think that this is the most appropriate way to deal with the type of decision that will be made under these parts of the Bill.
      The hon. Member for South Cambridgeshire asked about the Competition Commission, which is not an appeal body in the way that he envisages. The two bodies separately consider the issues involved in a case, but they
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      do not formally consider an appeal. For both markets and mergers, we are happy that we have an overall structure that offers sufficient right of appeal. The combination of the Competition Commission and the CAT offers an opportunity for consideration of all the issues.
      In relation to damages, one could in principle go to court in a case where there was no infringement found, but the court would have to have regard to the result of the OFT's decision.
      Amendments Nos. 311 to 314 widen the basis on which claims for damages can be brought to the CAT by enabling claims to be brought where the OFT has found that there has not been an infringement of competition law. It is hard to envisage what basis there could possibly be for bringing a damages claim with respect to anti-competitive activity where it has been established that no infringement has occurred. As it stands, amendment No. 311 will not help those who have been harmed by anti-competitive activity to bring claims for damages, which is what I think the hon. Gentleman had in mind.
      With that. I hope that I can persuade the hon. Gentleman to withdraw the amendment.
      Mr. Lansley: I am comforted by what the Minister said about the measures for trying to secure the independence of the CAT, and about amendment No. 147. On amendment No. 148, I agree that we are looking for the same kind of objective. Looking back at the Competition Act 1998, which is amended here, I should be interested in whether there was some way of reflecting more substantively the range of experience that is required by the CAT as it accumulates these additional responsibilities. I understand that one would not want to do so in a way that frustrated the ability to appoint people who appear to have different but highly desirable experience, but it seems to me not to be beyond the wit of Government to achieve that. I must confess that, previously, it seemed to me that the reference to experience of competition law and practice seemed rather narrow and that it would be better to try to widen it, if that could be done.
      4.30 pm
      I entirely understand the Minister's point about amendments Nos. 311 to 314. They could allow individuals to come to the tribunal in circumstances where the OFT decided that no infringement had occurred, but as she says, I doubt whether they would get very far. The question is, does that also mean that they would not get very far if they went to a court in such circumstances? She said that it is open to people to go to a court for a private action, but that the court would have to have regard to the OFT's decisions. Would it not be better to construct matters in such a way that people could not go to a separate court, but had instead to go to the tribunal? Given that the Government have created the tribunal as the appropriate body for hearing awards for damages, should it not also hear cases that could conceivably be brought in circumstances where an infringement had not been proved?
      If I may, I shall leave the issue of appeals to be judged on its merits. I intimated my view that the two-stage merger process—involving the OFT, the Competition Commission and judicial review through the Competition Appeal Tribunal—is sufficient. However, for reasons that

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      I shall explain later, that is not necessarily true in respect of market investigations. With those points in mind, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Clause 14

      CONSTITUTION OF TRIBUNAL FOR PARTICULAR PROCEEDINGS AND ITS DECISIONS
      Amendment made: No. 158, in page 6, line 31, at end insert—
      '( ) This section has effect subject to paragraph 17 of Schedule 4 (consequences of a member of the Tribunal being unable to continue after the proceedings have begun to be heard).'.—[Miss Melanie Johnson.]

    Schedule 3

      THE COMPETITION SERVICE
      Amendment made: No. 90, in page 190, line 36, at end insert—
      '(2) Sub-paragraph (1) does not apply in relation to any document which is, or is to be, signed in accordance with the law of Scotland.'.—[Miss Melanie Johnson.]

    Schedule 4

      TRIBUNAL: PROCEDURE
      Amendments made: No. 169, in page 193, line 23, at end insert—
      '(4) The President shall make such arrangements for the publication of the decisions of the Tribunal as he considers appropriate.'.
      No. 170, in page 193, line 25, leave out from "Tribunal" to second "in" and insert—
      'is registered in England and Wales'.
      No. 171, in page 193, line 33, leave out "in Scotland awards damages" and insert "awards damages, costs or".
      No. 172, in page 193, line 38, leave out—
      'in England and Wales or Scotland'.
      No. 173, in page 194, line 3, leave out from "Tribunal" to "with" and insert—
      'may be enforced in Northern Ireland'.
      No. 174, in page 194, line 10, leave out from "enforcing" to end of line 11 and insert—
      'in Northern Ireland a decision to award damages, costs or expenses—'.
      No. 175, in page 194, line 12, leave out "or costs" and insert ", costs or expenses".
      No. 176, in page 194, line 15, leave out "or costs" and insert ", costs or expenses".
      No. 177, in page 194, line 20, leave out from "enforcing" to first "the" in line 21 and insert—
      'in Northern Ireland a direction given as a result of a decision of the Tribunal'.
      No. 178, in page 196, leave out lines 18 and 19.
      No. 179, in page 196, line 28, at end insert—
      '(1A) Tribunal rules may make provision enabling the Tribunal to refer any matter arising in any proceedings (other than a claim for damages under section 47A of the 1998 Act) back to the authority that made the decision to which the proceedings relate, if it appears that the matter has not been adequately investigated.'.
      No. 180, in page 196, leave out lines 37 to 39 and insert—
      '( ) Tribunal rules may make provision as to the consequences of a member of the Tribunal being unable to continue after part of any proceedings have been heard.
      ( ) The rules may allow the Tribunal to consist of the remaining members for the rest of the proceedings.
      ( ) The rules may enable the President, if it is the chairman of the Tribunal who is unable to continue—'.
      No. 181, in page 198, line 5, at end insert—
      '21A (1) Tribunal rules may make provision enabling the Tribunal to decide where to sit for the purposes of, or of any part of, any proceedings before it.
      (2) Tribunal rules may make provision enabling the Tribunal to decide that any proceedings before it are to be treated, for purposes connected with—

      (a) any appeal from a decision of the Tribunal made in those proceedings; and

      (b) any other matter connected with those proceedings,

      as proceedings in England and Wales, Scotland or Northern Ireland (regardless of the decision made for the purposes of sub-paragraph (1)).

      >(3) For the purposes of sub-paragraph (2), Tribunal rules may provide for each claim for damages made or continued on behalf of an individual in proceedings under section 47B of the 1998 Act to he treated as separate proceedings.'.—[Miss Melanie Johnson.]

    Clause 17

      DAMAGES
      Amendment made: No. 372, in page 8, line 32, at beginning insert—
      'Otherwise than with the permission of the Tribunal,'.—[Miss Melanie Johnson.]

    Clause 18
      CLAIMS ON BEHALF OF CONSUMERS
      Amendment made: No. 159, in page 9, leave out lines 35 to 37.—[Miss Melanie Johnson.]
    Schedule 5

      PROCEEDINGS UNDER PART 1 OF THE 1998 ACT
      Amendments made: No. 182, in page 198, line 34, leave out—
      'Court of Appeal or the Court of Session'
      and insert "appropriate court".
      No. 183, in page 199, line 7, leave out from "or" to end of line 8 and insert "the appropriate court.
      (3) In this section "the appropriate court" means the Court of Appeal or, in the case of an appeal from Tribunal proceedings in Scotland, the Court of Session.".'.
      No. 184, in page 199, leave out lines 28 to 30 and insert—
      '(b) sub-paragraph (3)(a) shall cease to have effect; and'.—[Miss Melanie Johnson.]

    Clause 21

      DUTY TO MAKE REFERENCES IN RELATION TO COMPLETED MERGERS
      Mr. Waterson: I beg to move amendment No. 18, in page 11, line 7, leave out "shall" and insert "may at its discretion".
      Mr. Deputy Speaker: With this it will be convenient to discuss the following: Amendment No. 19, in page 11, line 7, after "(3)", insert "have a discretion to".
      Amendment No. 21, in page 11, leave out lines 11 and 12 and insert—
      'in the creation or strengthening of a dominant position, as a result of which competition may have been significantly reduced within any market or markets in the United Kingdom for goods or services'.
      Amendment No. 202, in page 11, line 11, after "competition", insert—
      'or substantial damage to the public interest'.
      Amendment No. 22, in page 11, line 12, at end insert—
      'or
      (c) the creation of that situation has operated, or may be expected to operate against the public interest.'.
      Government amendments Nos. 224 to 226.
      Amendment No. 20, in clause 32, page 19, line 34, leave out "shall" and insert "may at its discretion".
      Amendment No. 23, in page 19, line 38, leave out from "result" to end of line 40 and insert—
      'in the creation or strengthening of a dominant position, as a result of which competition is likely to be significantly reduced within any market or markets in the United Kingdom for goods or services'.
      Amendment No. 203, in page 19, line 39, after "competition", insert—
      'or substantial damage to the public interest'.
      Amendment No. 24, in page 19, line 40, at end insert—
      'or
      (c) the creation of that situation has operated, or may be expected to operate against the public interest.'.
      Amendment No. 56, in page 20, line 7, at end insert—
      'or
      (d) the enterprise which is the subject of the proposed merger will become insolvent within the immediate future; the market shares of the enterprise would in any event go to the acquiring party; and there is no less anticompetitive way of selling the company.'.
      Amendment No. 204, in clause 34, page 20, line 43, after "competition", insert—
      'or substantial damage to the public interest'.
      Amendment No. 25, in page 20, line 45, at end insert—
      'or
      (c) the creation of that situation has operated, or may be expected to operate against the public interest.'.
      Amendment No. 26, in page 21, line 3, leave out from "result" to "or" in line 25 and insert—
      'in the creation or strengthening of a dominant position, as a result of which competition may be significantly reduced within any market or markets in the United Kingdom for goods or services'.
      Amendment No. 27, in page 21, line 8, leave out from "result" to end of line 10 and insert—
      'in the creation or strengthening of a dominant position, as a result of which competition may be significantly reduced within any market or markets in the United Kingdom for goods or services'.
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      Amendment No. 28, in page 21, line 15, leave out from "preventing" to end of line 18 and insert—
      'the creation or strengthening of a dominant position, as a result of which competition may have been significantly reduced within any market or markets in the United Kingdom for goods or services'.
      Amendment No. 29, in page 21, line 20, leave out from "preventing" to "and" in line 23 and insert—
      'the creation or strengthening of a dominant position, as a result of which competition may have been significantly reduced within any market or markets in the United Kingdom for goods or services'.
      Amendment No. 30, in page 21, line 28, leave out from "practicable" to end of line 29 and insert—
      'the creation or strengthening of a dominant position, as a result of which competition may have been significantly reduced within any market or markets in the United Kingdom for goods or services'.
      Amendment No. 31, in clause 35, page 22, leave out lines 5 and 6 and insert—
      'the creation or strengthening of a dominant position, as a result of which competition may have been significantly reduced within any market or markets in the United Kingdom for goods or services'.
      Amendment No. 205, in page 22, line 5, after "competition", insert—
      'or substantial damage to the public interest'.
      Amendment No. 32, in page 22, line 6, at end insert—
      'or
      (c) the creation of that situation has operated, or may be expected to operate against the public interest.'.
      Amendment No. 33, in page 22, line 11, leave out from "preventing" to end of line 13 and insert—
      'the creation or strengthening of a dominant position, as a result of which competition may have been significantly reduced within any market or markets in the United Kingdom for goods or services'.
      Amendment No. 34, in page 22, line 15, leave out from "preventing" to "and" in line 17 and insert—
      'the creation or strengthening of a dominant position, as a result of which competition may have been significantly reduced within any market or markets in the United Kingdom for goods or services'.
      Amendment No. 35, in page 22, line 22, leave out from "practicable" to end of line 23 and insert—
      'the creation or strengthening of a dominant position, as a result of which competition may have been significantly reduced within any market or markets in the United Kingdom for goods or services'.
      Government amendment No. 227.
      Amendment No. 36, in clause 40, page 25, line 37, leave out from "prevent" to "and" in line 38 and insert—
      'the creation or strengthening of a dominant position, as a result of which competition may have been significantly reduced within any market or markets in the United Kingdom for goods or services'.
      Amendment No. 37, in page 25, line 40, leave out from second "from" to end of line 41 and insert—
      'the creation or strengthening of a dominant position, as a result of which competition may have been significantly reduced within any market or markets in the United Kingdom for goods or services'.
      Amendment No. 38, in page 26, line 1, leave out from "to" to end of line 2 and insert—
      'the creation or strengthening of a dominant position, as a result of which competition may have been significantly reduced within any market or markets in the United Kingdom for goods or services'.
      Amendment No. 57, in page 26, line 5, at end insert—
      '(6) In making a decision under subsection (2), the Commission may also have regard to whether the enterprise which is the subject of the proposed merger will become insolvent within the immediate

      1071
      future; the market shares of the enterprise would in any event go to the acquiring party; and there is no less anti-competitive way of selling the company.'.
      Government amendments Nos. 228, 230 and 231.
      Amendment No. 39, in clause 43, page 29, line 14, leave out from "in" to end of line 15 and insert—
      'the creation or strengthening of a dominant position, as a result of which competition may have been significantly reduced within any market or markets in the United Kingdom for goods or services'.
      Amendment No. 58, in page 29, line 28, at end insert—
      'or
      (g) the enterprise which is the subject of the proposed merger will become insolvent within the immediate future; the market shares of the enterprise would in any event go to the acquiring party; and there is no less anticompetitive way of selling the company.'.
      Amendment No. 40, in clause 44, page 30, line 7, leave out from first "of' to "the" in line 8 and insert—
      'the creation or strengthening of a dominant position, as a result of which competition may have been significantly reduced within any market or markets in the United Kingdom for goods or services'.
      Amendment No. 41, in page 30, line 15, leave out from "result" to end of line 16 and insert—
      'the creation or strengthening of a dominant position, as a result of which competition may have been significantly reduced within any market or markets in the United Kingdom for goods or services'.
      Amendment No. 42, in page 30, line 27, leave out from "result" to end of line 29 and insert—
      'the creation or strengthening of a dominant position, as a result of which competition may have been significantly reduced within any market or markets in the United Kingdom for goods or services'.
      Amendment No. 43, in page 30, line 33, leave out from first "of" to end of line 36 and insert—
      'the creation or strengthening of a dominant position, as a result of which competition may have been significantly reduced within any market or markets in the United Kingdom for goods or services'.
      Amendment No. 44, in page 30, line 41, leave out from "in" to end of line 43 and insert—
      'the creation or strengthening of a dominant position, as a result of which competition may have been significantly reduced within any market or markets in the United Kingdom for goods or services'.
      Amendment No. 45, in clause 46, page 32, line 8, leave out from "in" to "and" in line 9 and insert—
      'the creation or strengthening of a dominant position, as a result of which competition may have been significantly reduced within any market or markets in the United Kingdom for goods or services'.
      Amendment No. 46, in page 32, line 10, leave out from "any" to "the" in line 12 and insert—
      'the creation or strengthening of a dominant position, as a result of which competition may have been significantly reduced within any market or markets in the United Kingdom for goods or services'.
      Amendment No. 47, in page 32, line 25, leave out from "in" to "and" in line 27 and insert—
      'the creation or strengthening of a dominant position, as a result of which competition may have been significantly reduced within any market or markets in the United Kingdom for goods or services'.
      Amendment No. 48, in page 32, line 28, leave out from "any" to end of line 31 and insert—
      'the creation or strengthening of a dominant position, as a result of which competition may have been significantly reduced within any market or markets in the United Kingdom for goods or services'.
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      Amendment No. 49, in page 33, line 6, leave out from "be" to "it" in line 7 and insert—
      'the creation or strengthening of a dominant position, as a result of which competition may have been significantly reduced within any market or markets in the United Kingdom for goods or services'.
      Amendment No. 50, in page 33, line 11, leave out from "preventing" to end of line 14 and insert—
      'the creation or strengthening of a dominant position, as a result of which competition may have been significantly reduced within any market or markets in the United Kingdom for goods or services'.
      Amendment No. 51, in page 33, line 17, leave out from beginning to "and" in line 19 and insert—
      'the creation or strengthening of a dominant position, as a result of which competition may have been significantly reduced within any market or markets in the United Kingdom for goods or services'.
      Amendment No. 52, in page 33, line 26, leave out from "be)" to end of line 27 and insert—
      'the creation or strengthening of a dominant position, as a result of which competition may have been significantly reduced within any market or markets in the United Kingdom for goods or services'.
      Amendment No. 59, in page 33, line 32, at end insert—
      '(10A) The Commission may also have regard to whether the enterprise which is the subject of the proposed merger will become insolvent within the immediate future; the market shares of the enterprise would in any event go to the acquiring party; and there is no less anti-competitive way of selling the company.'.
      Government amendment No. 237.
      Amendment No. 53, in clause 54, page 39, line 3, leave out "substantial lessening of competition" and insert—
      'the creation or strengthening of a dominant position, as a result of which competition may have been significantly reduced within any market or markets in the United Kingdom for goods or services'.
      Government amendments Nos. 238 and 239.
      Amendment No. 54, in clause 70, page 51, line 5, leave out "substantial lessening of competition" and insert—
      'creating or strengthening a dominant position, as a result of which competition may have been significantly reduced'.
      Amendment No. 55, in page 51, line 12, leave out—
      'substantial lessening of competition and any adverse effects resulting from it'
      and insert—
      'creating or strengthening a dominant position, as a result of which competition may have been significantly reduced'.
      Government amendments Nos. 248 to 251.
      Amendment No. 69, in clause 99, page 70, line 30, leave out Clause 99.
      Mr. Waterson: I shall set your mind at rest, Mr. Deputy Speaker, by pointing out that this group of amendments is not as fearsome as it might first appear. I shall take the House through at least those amendments for which I claim some responsibility.
      Rather than imposing an obligation, amendments Nos. 18 to 20 would give the OFT the discretion to refer completed and anticipated mergers to the Competition Commission. The idea was debated in Committee on 25 April, but it was rejected by the Government on the basic ground that a broad discretion not to refer was appropriate where there is a two-stage referral process. However, as the Director General of Fair Trading would act alone on the basis of a more focused test, there would be less room for discretion. The Minister said that the new test should not result in a greater number of references. It is important to note that, broadly speaking—it is

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      impossible to be wholly accurate on these matters—the Government's intention is that the number of references should not rise as a result of the provisions.
      However, we are not wholly convinced, which is why we have tabled similar amendments on Report. The Bill introduces a significant change of emphasis. Under the Fair Trading Act 1973, the Secretary of State had the discretion to decide whether or not to refer mergers, acting on the advice of the director general. Since October 2000, the director general's advice has normally been accepted. Taken together, the formulations set out in clauses 21 and 32 require a reference to be made in respect of proposed and completed mergers, except in certain limited circumstances.
      Lest anyone think that I am cleverer than I really am, the amendments were inspired by the joint working party of the Law Society and the Bar. [Interruption.] I am grateful that my comment has found favour with the Government Whip. It is therefore clear that concern exists outside this place that there will be almost routine or obligatory pre-clearance for mergers—a point that we made in Committee. It is fair to say that many parties already undertake such pre-clearance, but entirely at their own discretion. We—and others who are perhaps better placed to know—believe that a dramatic shift will take place. It will make practical sense for those who are contemplating a particular merger to obtain pre-clearance, which will in itself involve a major increase in applications.
      The Law Society and the Bar also pointed out that there was no consultation on this change of policy, which was not included in the White Paper. I think it fair to say—I have not checked the relevant editions of Hansard—that the Minister gave no reason for her assumption that the provisions will not result in an increase in references. We want to press her hard on that issue.
      The other issues—public interest, and the dominant position in terms of the test that should be applied in such cases—fall into two or three categories. You will be relieved to hear, Mr. Deputy Speaker, that many of the amendments in this group make the same point. We had a good debate on these issues in Committee, but some of the arguments bear repetition. Under the 1973 Act, the public interest test was established, and it is generally accepted that that needs revisiting. Some discussion took place in Committee on the merits of the dominance test—which is favoured by the Confederation of British Industry, for example—and what is known as the "substantial lessening of competition" test. One argument in favour of the dominance test is that it is the standard for assessing mergers under the EC regime. There is real concern that businesses operating in this country might face a stiffer test here than they would face under the European regime.
      In Committee, my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) pointed out graphically that, during the Standing Committee that considered the Competition Act 1998, Ministers expressed the strong view that there should be no disparity between regimes operating in Europe and in this country. Although not the most significant example, it shows how our system is in danger of drifting away from the European one.
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      I repeat the CBI's interesting quote concerning the Competition Act 1998:
      "The demarcation line between domestic and EU mergers is sometimes not clear cut, particularly in more complex transactions. As a result it would be fairer and more sensible for companies operating across the European Union to have to comply with one standard as opposed to two differing ones."
      That is an important point in principle, and an important point in practice. Like so many of these issues, having a different test—even a subtly different one—involves extra work and extra burdens for those who are trying to make businesses profitable. We do not resile, therefore, from our support for the amendments relating to the dominant position. I shall be interested to hear the Minister justify establishing a separate test from that operating in the European regime.
      The other issue, dealt with in amendments Nos. 56 to 59, is one that we tried to import into the Bill from the United States and, indeed, Europe. That is the so-called failing firm defence. In the US, for example, four things have to be shown: that the failing firm cannot meet its financial obligations; that it cannot reorganise itself in bankruptcy; that it cannot find another buyer whose purchase would pose lesser anti-competitive risks; and that in the absence of the merger its assets would exit the market.
      In the EU, we have had a fascinating discussion about the case of Kali-Salz/MDK/Treuhand, which is all about potash. In that case, the Commission set out three criteria: that the company would in any event go bankrupt in the immediate future; that the market share of that company would in any case go to the merging party; and that there was a no less anti-competitive way of selling the company. There is a slight difference in approach between the US and the EU tests, but that does not matter for our purposes, because we are trying to persuade the Minister that incorporating the so-called failing firm defence would be sensible.
      In fairness, the Minister has not launched a full frontal assault on our suggestion. To summarise, possibly unfairly, her reply to the discussion in Committee, she said that the prospects for a particular company would be taken into account in any event, so it was not necessary to spell that out. I do not wish to labour the point, but if such a defence is good enough for both the US and the EU regimes—albeit with slightly different tests applying—we should seriously consider including it in the Bill for application to our system.
      Amendment No. 69 would remove clause 99. Our problem with that clause is that it would give the Secretary of State extremely wide powers to modify clauses 94 to 98 on the mergers regime. The power is too broad and any significant change should be a matter for primary legislation. Again, our arguments did not find favour with the Minister in Committee, but I hope that we will have better luck on Report. I commend the amendments to the House.
      Mr. Barnes: I tabled amendments Nos. 202 to 205, which would place the issue of public interest back into the Bill. Amendments Nos. 304 and 305 in the next group also address that issue. The difference between the two sets is that the present ones relate to the director general of the OFT and the later ones relate to the position of the Secretary of State. My remarks about the public interest will relate to both sets of amendments, but I shall try to

      1075
      keep in order. I may not need to repeat my remarks when we come to the next group of amendments on the Secretary of State's role because I will have already addressed the issues in relation to the role of the director general.
      When the hon. Member for Eastbourne (Mr. Waterson) moved the amendments, he said that they were not fearsome. However, I hope that my amendments will be viewed as slightly fearsome, because I am very concerned about the issue. In Committee, I explained the problems in my constituency associated with the takeover and immediate closure of Biwater, and the loss of 700 jobs. The provisions in the Fair Trading Act 1973 would have allowed that takeover to be referred to the Competition Commission on the ground of public interest, and if that had been done by the OFT or the Secretary of State, it is likely that those jobs would still exist today and that a profitable and viable firm, with its export market, would still be in operation.
      4.45 pm
      Since that time, I have been interested in the provision in the 1973 Act that allows such reference and why it was not acted on in the Clay Cross case. I became aware that the DTI sought to remove the provision from the legislation through a consultative document and a later White Paper. I have always pressed for the provision to be retained.
      It is a modest measure. The Fair Trading Act 1973, which contains the provisions about the public interest, was introduced by the Heath Government. In 1973, I was fighting that Government on their housing finance legislation and ended up in court, with several other people, in relation to its abject provisions. It can be seen from that that I did not generally share the Heath Government's attitudes, but it is interesting that I am now seeking to defend a measure from that period against a worse proposal from this Government.
      Mr. Waterson: My first task as researcher to Sally Oppenheim, who was then the Member of Parliament for Gloucester, was to assist her in her work as a member of the Committee dealing with the housing finance legislation. It was a gruelling battle by any standards, but in those days the Opposition were allowed much more licence than they are now.
      Mr. Barnes: Perhaps some licence will be granted to the amendments before us now.
      The Fair Trading Act 1973 provides that the Secretary of State or the director general of the OFT may refer a merger to the Monopolies and Mergers Commission, which later became the Competition Commission, when it is in conflict with the public interest, which is defined to cover job losses, the loss of industry in an area, the loss of export trade and factory closures. The present Bill contains very limited provision on the public interest. Clause 57 contains an element of public interest, in that the Secretary of State may refer a bid on grounds of national security and can seek an order in the House for something that is as yet undefined but appears to be a sort of fall-back position for making a reference on the ground of public interest.
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      The Opposition and their friends in the CBI are running worried about clause 57, because they think that it could release all sorts of hobgoblins and create huge difficulties. The TUC and many others think that the problem is that clause 57 is just dead words. It does not mean anything and we cannot envisage any circumstances in which the provision would be used. We cannot persuade the Minister to give us any theoretical examples of the circumstances in which it would be used, so we cannot tell whether it is possible that it could be used to defend the interests of the trade unions in any way in the future.
      In 1973, when the Fair Trading Act was passed, Labour was in opposition and it adopted the position that the TUC has adopted now on this issue. The Labour party wanted the public interest provisions to be extended; it did not want their virtual removal, which is the position with this Bill.
      Things were somewhat different in those days. Tony Benn was shadow Secretary of State for Industry. An interesting debate took place in Standing Committee, where some interesting people moved amendments to improve and strengthen the public interest provisions. They included Bruce Millan, the then Opposition spokesman on industry and aviation, who later became a Commissioner in Europe, and the late John Golding—the Library tells me that he was then an Opposition Whip, in which case I am not sure why he was tabling amendments, but he was certainly associated with the Labour Front-Bench team. My right hon. Friend the Member for Swansea, West (Mr. Williams) was the industry spokesperson. They all had some interesting things to say about extending the public interest. The logic of their position would be to be aghast that we are now virtually ridding ourselves of any concern about the public interest, apart from matters of national security.
      In Standing Committee B on 3 April 1973, Bruce Millan, opposing the Heath Government, introduced an amendment that would strengthen the resolve of the Fair Trading Bill. He said:
      "If the amendment were accepted, it would slow down mergers to some extent. This is one of the purposes of the amendment, and I want to make that explicit. If people involved in mergers had to prove positive good, the number of mergers going through would be reduced. That would be a good thing. I am not in favour of mergers going through unless it can be demonstrated that there is some public good arising."—[Official Report, Standing Committee B, 3 April 1973; c. 1078.]
      Certainly, the merger that took place in Clay Cross was in every way contrary to the public interest and the public good. It is to the detriment of the former Secretary of State for Trade and Industry that he did not refer that matter to the Competition Commission—nor did the Office of Fair Trading do so.
      In my amendments I am asking the OFT to use these provisions, hopefully in the spirit of the 1973 legislation, and not to ignore them. In the case of Biwater, the report that was issued to the Secretary of State, which said that it was okay for the takeover by Saint Gobain in France to take place, did not reveal that the Director General of Fair Trading knew that the plant would close. In fact, when I raised that matter with the Department of Trade and Industry in the House, I was told that it did not need to know that and that it was not a material consideration. It was certainly a material consideration to the people in Clay Cross and the surrounding area, where 700 people within a five-mile radius lost their jobs. Often, they were

      1077
      mature workers and it was very difficult for them to find any other reasonably paid employment. When Bruce Millan was speaking in 1973, the Labour party was aware of such concerns.
      The late John Golding also tabled amendments to the 1973 legislation. He was not known as a left winger in the Labour party. He would in many ways seek out the left and try to contain its activities. However, we are now past that stage. The Enterprise Bill is the avenue through which we are trying to get the economy moving—to produce the dynamic economy and the free markets that are associated with it—and it follows a somewhat different pattern from the one with which many of us would normally be associated.
      After the Minister had replied to John Golding, the latter replied:
      "The Minister is insensitive to the impact of mergers on the lives of these people. He is insensitive, too, in respect of the damage being done in industry at present."—[Official Report, Standing Committee B, 5 April 1973; c. 1098.]
      Much damage is being done to manufacturing industry now, some 29 years later. I hope that the present Minister is not insensitive to those concerns and will ensure that moves are made to establish means by which the public interest could be re-established in the Bill.
      At the Report stage of the 1973 legislation, my right hon. Friend the Member for Swansea, West introduced a measure similar to the one put forward by John Golding in the Standing Committee. My right hon. Friend pointed out:
      "when a merger takes place not only the shareholder is involved. Whereas the shareholder's risk is a financial one, it is not as absolute a financial risk as that of the worker, because the average shareholder spreads his holding over eight to 12 companies."
      I do not know what the figures are today, but a similar argument could be used. He continued:
      "That contrasts with the position of the worker in industry who, particularly if he is employed in one of the less-favoured areas of the country in employment tenns, finds that his loss is absolute, complete and, in far too many cases, permanent. The only capital that a worker has is his skill and his job. The more specific the skills of the firm in which he works and the smaller the locality, the less likely it is that he will find an alternative outlet for his investment in industry—namely, his training and his skill."—[Official Report, 17 May 1973; Vol.856, c. 1817.]
      As I said, that comment is certainly of great relevance to the case that brought these matters to my attention.
      The TUC and major trade unions feel that there should be provisions to take account of the public interest. I am suggesting, rather moderately, that we should merely return to the position held by Ted Heath in 1973. The left wing is now defending Selsdon man against the further extension of those powers in another direction.
      Mr. Waterson: Before the hon. Gentleman gets too carried away, does he agree that he and the Government are at one on the issue, even though they approach it from completely different directions? As we shall debate in more detail when we come to the next group of amendments, the Government seem to take the view that the public interest will have to be expanded and are trying to take the powers to do so, but they will not tell any of us what they have in mind.
      5 pm
      Mr. Barnes: I offered an answer earlier when I pointed out that the Conservatives and the CBI saw these provisions as hobgoblin arguments and believed that all sorts of evils would spring forth—as regards their interests—owing to the Secretary of State's ability to extend such powers by order, as a fallback position. However, that is not the same as the introduction of a specific enabling commitment, such as the one included in the 1973 legislation, for the Office of Fair Trading and the Secretary of State; it is certainly not as good as what the TUC really wants—a provision whereby action must be taken in the public interest in certain circumstances.
      Although the current proposals would sideline the 1973 legislation, the public interest provision has not been greatly used since the early 1980s. From Thatcher's time, that has been the policy of successive Governments. However, public interest concerns have crept through in some cases. It is difficult to define them because the Secretary of State or the Office of Fair Trading do not refer matters to the Competition Commission on public interest grounds A, B, C or D. They make a submission that argues which matters should be investigated, but it is not always easy to sort out whether those are the acceptable competition grounds to which the Government have referred or the unacceptable public interest considerations.
      Other bodies can take on board the public interest considerations. For example, when the MMC recommended blocking BSkyB's attempted takeover of Manchester United, it used a public interest argument as well as a couple of competition arguments. My research briefing notes:
      "Because it would tend to reinforce the wealth gap between weaker and stronger clubs, and to give BSkyB additional influence on League decision-making, the merger would have the adverse effect of damaging the quality of British football'."
      The last Secretary of State for Trade and Industry to make direct use of the provision was my right hon. Friend the Member for Derby, South (Margaret Beckett), the present Secretary of State for Environment, Food and Rural Affairs. In 1997, she made a reference on public interest grounds in the PacifiCorp Energy Group plc case, where an energy supplier wanted to extend its operations in a particular sector. The MMC cleared the bid and found that it would not operate against the public interest, but the reference was made on those grounds and some interesting recommendations were made in the report in order to contain similar operations.
      A case in 1995 affected my constituency. Stagecoach Holdings plc attempted to take a 20 per cent. stake in Mainline Partnership Ltd. I have regular problems with both companies, especially with Stagecoach whose buses do not turn up, or are late, or miss stops. Public inquiries were held in Mansfield and Chesterfield about aspects of its provision, including, in the Mansfield area, the collapse of certain buses which were towed away on the orders of the traffic inspector.
      In that case, although the commission did not rule against the 20 per cent. stake holding, it said that it should not be extended. My research briefing notes:
      "Arguably, this is an example of a non-competition element influencing the public interest test, albeit through its effect on competition."
      As I pointed out earlier, there are avenues that can be used.

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      Further back, there are other examples. In 1988, a reference was made when the Government of Kuwait attempted to take over British Petroleum Co. plc. There was also a reference in 1982 when the Hong Kong and Shanghai Banking Corporation attempted to take over the Royal Bank of Scotland.
      The measures may not have been used as they should, but that does not mean that they did not exist. They existed so that people could put pressure on their elected representatives and Governments to gain responses for their concerns.
      The current political climate may be against those matters being dealt with, and the attitude that existed in the Biwater case may persist, but the climate can at least change, circumstances can alter and different pressures can be applied if the measure is in place.
      The Government should be concerned with those issues, but they claim that it is very good that they are now at arm's length from them because of the measure; it keeps them out of things. However, the measure keeps the democratic process, argument and pressure away from involvement. Of course the Government should not manoeuvre, fiddle, spin and do the things that people claim they do to get their way; they should act openly and we should be able to see what is taking place.
      The Government should act openly and be subject to representation and pressure from organisations. The democratic process involves not just voting at elections, but people being mobilised and organised and having rights to represent their sets of views and ideas, and the pressure group system is supposed to be part of the democratic process.
      So the public interest argument has been used in various arenas, and we need to try to preserve it in the future. Even though we could ideally do with such a measure now, I would be chancing it even more if I were to move amendments to try to improve things in the way that John Golding, Bruce Millan and my right hon. Friend the Member for Swansea, West did way back in 1973.
      I want to mention some of the support for my proposals in the trade union movement. In Committee and now on Report, the Bill has been dominated by dollops of representation and amendments from the CBI. Other amendments have come from the Consumers Association and other more acceptable avenues, but it seems as though we have just had to sit here, gritting our teeth, while all that has shot forward, normally in the shape of probing amendments, so that the CBI's view could be presented.
      We have heard nothing about the TUC's view. Perhaps the TUC and some of the major trade unions should have made a greater effort to ensure that members of the Standing Committee and other hon. Members, including Labour Members, were informed of such things. Perhaps, to an extent, that shows the way the balance of forces has altered in this country. The TUC felt it needed to make formal representations and to produce documents and reports; it was not going to try to stimulate a rebellion on the Back Benches of the Labour party, so some of us have had to try to do that ourselves on this occasion.
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      In September 2001, the TUC produced a document in response to the White Paper that led to the Bill in which it discussed politicians' roles—the issue that I have been raising. It stated:
      "The TUC has concerns about removing Ministers from the decision-making process on mergers. While advice may usefully be given by those with expert knowledge, Ministers remain publicly accountable for their actions in a way that competition authorities are not. As argued above"—
      in its earlier arguments—
      "if the competition authorities are going to take greater responsibility for decisions on mergers and other aspects of competition policy, it is essential that their accountability is also enhanced.
      The White Paper states that Ministers will retain a role in relation to 'exceptional public interest' issues, but gives no guidance on the circumstances in which this might be appropriate. The TUC believes that it would be useful for the Government to promote a fuller discussion of what might constitute an exceptional public interest."
      We tried to promote such a discussion in Committee, but exceptional public interest is still something we know not—it will not speak its name to us.
      The general secretary of the TUC wrote to the Secretary of State for Trade and Industry on 20 March saying:
      "As you will be aware, the TUC has consistently argued that mergers and takeovers should be regulated to operate in the public interest, and that employment effects should be taken into account alongside the impact on competition when judging a bid."
      He then suggested amending the Bill to provide an avenue for written representations to be made in order that that door should be left open.
      The Secretary of State replied on 9 April, repeating the points about clause 57 to which I have referred, but offering nothing else. The letter indicated that the Government were moving in a different direction. I at least hope that the Under-Secretary will be able to say that there will be a response to the general secretary's suggestion through suitable amendments in the Lords.
      The argument is further pressed by Roger Lyons of the MSF section of Amicus. In its huge document on mergers, it expresses the need for ministerial answerability on these matters and for the ability to take things up. At a meeting in the House on 23 April, John Edmonds discussed these matters, and I have copies of statements of the GMB's position and its submission to the European Commission's Green Paper on merger matters.
      I have letters from Unifi on the subject. I quoted its General Secretary, Ed Sweeney, earlier. In his letter to the Financial Times, he says:
      "Unifi's concern is that no consideration will be given to the social' implications of mergers. Unifi believes that the consequences of mergers do sometimes need to he considered beyond the 'economic' and that the proposed reforms do not allow a mechanism for that consideration."
      I also have letters from Equity, the National Union of Journalists, the Prison Officers Association and the National Association of Educational Inspectors, Advisers and Consultants, which all stress similar points. So there is a strength of feeling in the trade union movement that there should be a response. It is only correct that that view should be expressed in this debate.
      Mr. Tony McWalter: My hon. Friend has not focused in his quite lengthy speech on what the consequences of incorporating the wording in the Bill might be. Although, with regard to the football analogy

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      that he mentioned, I might accept that it is very boring that in Scottish football Celtic or Rangers always win, and that they have a virtual monopoly on all the trophies, I am not clear what the Government could do to arrange matters so that Scottish football became more interesting, or how other forms of dominance of various markets would be resisted in detail by my hon. Friend's amendment.
      Mr. Barnes: My amendment would not do what my hon. Friend seeks. We would need other amendments and legislation to do that. However, the BSkyB case was considered because of the implications of putting Manchester United at the centre of the market. That would have had an impact on other teams and their ability to survive. However, my amendment would not lead to the transfer of resources to assist people. We would need alternative measures to do that.
      5.15 pm
      My amendment relates to references to the Competition Commission by appropriate bodies, particularly by the OFT. It should be able to argue its case and Ministers should be able to consider cases such as the one that occurred in Clay Cross. They should be able to assess the masses of evidence coming to them and the alternative viewpoint that might be provided by the OFT. They should grasp the nettle and be prepared to say that certain cases would have an adverse impact on an area. They should allow the Competition Commission to consider such cases. It might not necessarily produce the answers that I want, but such avenues should be open.
      I know that the Government are worried about excessive intervention in the economy and about the dangers of knocking back competitive elements within it. However, surely, in an age of massive technological change in which we are moving forward to new types of industry, it is possible to approach the issue in as organised and as regulated a way as possible so that people's interests are protected as they develop new skills and are given new opportunities. We do not do that.
      My attention was drawn to the Bill by an anonymous letter that I received from the British Bankers Association. [Interruption.] I meant not an anonymous letter, but an internal memo that was sent to me anonymously. Someone said that I might be interested in what the Bill will do. Although the British Bankers Association later claimed that the memo was an elaborate hoax, it is so detailed that it does not appear to be one. It points out that the association's members should keep quiet about the issues until the Bill slips through the House. It suggested that the Bill would not cause much bother.
      When I came into the Chamber after receiving the letter, I discovered that a cosy teach-in was taking place between those on the two Opposition Front Benches and those on the Government Front Bench. No Divisions were taking place and there was not much hassle. Conservative Members obviously want much more from the Bill but they probably feel that they have done very well. The memo told the association's members to be non-committal if an MP approached them and to wait until the Bill becomes law. They would then be able to use it. The memo then described exactly what was in the Bill in terms of the hobgoblins that I have mentioned.
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      I hope that we can remove some of the hobgoblins and that we, at last, will have the opportunity to say that the public interest is back on the agenda. It is worth holding on to and some of us should think about promoting it in a different set of circumstances. Perhaps we could introduce legislation, as my hon. Friend the Member for Hemel Hempstead (Mr. McWalter) suggested. I feel strongly about that and I am minded to divide the House if the Government cannot demonstrate that they will at least pick up on the comments made by John Golding.
      Dr. Cable: The arguments are well trodden. They were made in Committee, but as important principles are at stake we need to continue to debate them at least until the Bill reaches the other place.
      I have several points to make. The first relates to clause 21, which deals with the facility with which merger references can be made. Like the hon. Member for Eastbourne (Mr. Waterson), I am struck by an apparent contradiction. The Minister said on Second Reading that she did not expect more merger references to be made. I found that difficult to square with the terms of the Bill, which clearly imply that merger references will occur almost as a matter of routine. However, that meant that I, unlike the hon. Gentleman, was pleased with the Bill, because more merger references are desirable.
      There is a long history of mergers in the United Kingdom, the United States and elsewhere; the practice has been fashionable. They have been driven by management, which has a vested interest in size, and by the fee incentive for the merchant banking institutions. Invariably, as much of the economic and management literature shows, not only do mergers reduce competition to the detriment of consumers, but they do not benefit shareholders much either. An altogether more sceptical view is necessary, and that does not square with how the Minister sees the Bill rolling out. It is useful that the amendments allow us to continue to tease out what will happen.
      I do not share either the geographical or the ideological stance of the hon. Member for North-East Derbyshire (Mr. Barnes), but an important point was buried in his contribution, and we need to keep it alive. I would approach the problem in terms of accountability. I agree in general with the idea of political independence, and that there should not be routine political interference in merger references. In that sense, the Bill takes us a step forward.
      However, we have lost what elected politicians bring to bear to policy issues. We are elected to take account of the public interest and there is a fear that we are throwing out the baby of public accountability with the bathwater of political interference. We need to find a way to put it back. I would prefer to do that by having much stronger political accountability.
      Indeed, I argued in Committee that we need a mechanism so that the chairman and other officers of the OFT receive the political scrutiny to which the Monetary Policy Committee is subjected by the Treasury Committee. It comes before Parliament at regular intervals and MPs, through the Select Committee system, have a veto over appointments. That helps to ensure that the officials appointed by Ministers to perform a specific task are kept aware of the public interest. However, the Government are unwilling to go down that road,

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      so another way to tackle the problem is required. In that respect, the approach of the hon. Member for North-East Derbyshire is helpful.
      The hon. Gentleman's approach is helpful for another reason, too. Some of my colleagues and I have a vivid recollection of the Utilities Bill, which was in many ways a good piece of legislation. However, the regulator's terms of reference on competition were narrowly defined. Many problems were generated by the automatic application of the new legislation to the new electricity trading arrangements—NETA—auctioning system, which crippled the combined heat and power sector and the renewables sector. The regulator could only throw up his hands and say, "Look. Parliament hasn't given me the flexibility to take account of the public interest." It is important that we do not repeat that mistake. Some form of words—it does not necessarily have to be the form of words suggested by the hon. Member for North-East Derbyshire—must be found. If it cannot be found this afternoon, I hope that it will be found in another place.
      One of the amendments tabled by the hon. Member for Eastbourne is right. The conflicts, or at least the incompatibilities, between British and European legislation on the competition sector as it relates to merger references, have worried us from the outset. As we have discussed the matter, it has become clear that some of the initial concerns of business were rather exaggerated. The European Commission is clearly reforming its competition practices in ways that will make them somewhat more compatible with our own legislation. None the less, there are areas in which we are proposing something fundamentally different from European practice. It seems unnecessary, particularly in the cases that the hon. Member for Eastbourne has mentioned. That could be remedied by amendment, so I commend the changes.
      John McDonnell: I am following the lead of my hon. Friend the Member for North-East Derbyshire (Mr. Barnes) in seeking some form of assistance and succour from those on the Front Bench on this issue, because I am desperate to vote for the Government at least once this week. Some passing phenomenon described us as "all Thatcherites now". I note that the Prime Minister denied that yesterday, but my hon. Friend has smaller ambitions: he is desperate for us all to be a bit Heathite now, and come back to some concept of the public interest. There is the potential for avoiding a vote on amendment No. 202, although I, like my hon. Friend, will call for a vote on it unless the Minister can convince us otherwise. Obviously, we would like to put that request formally to you, Mr. Deputy Speaker.
      We want some assistance—an explanation of how the public interest is to be maintained as a result of the Bill. Clause 57 refers to the public interest being maintained for national security, but there is also a reference to public security, based on previous legislation that we have debated in the House.
      I would welcome a view on whether public security means a safety regime for the general public, whether it means security of employment for the workers employed in a company, and whether it involves protection of the local environment in which a company is located, the
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      health of the community that lives around that company's premises, and the quality of life of the work force and all those who have any relationship with the company.
      If we can gain some assurances on the record tonight that public security as referred to in clause 57 encompasses all those elements, I do not think that there will be a need for a vote on amendment No. 202. However, if there is not clarity from those on the Front Bench that the public security definition within clause 57 encompasses all those, we will need to press the matter to a vote this evening, if only to ask that the other place consider restoring the public interest definition in some form. I agree with our opposite number on the Liberal Democrat Benches, the hon. Member for Twickenham (Dr. Cable), about that.
      This may not be the exactly correct form of words, but there needs to be a form of words that reiterates that fact clearly. Why? Briefly, because as demonstrated in the post-privatisation world, respect for the public interest is needed more now than ever before. We have seen some horrendous examples of the public interest being ignored, which has had an effect on the community overall. That is why I ask for those assurances.
      There will be a danger if the public interest is not clearly defined in the Bill. The Government may not want to exercise existing powers, or any powers, to protect the public interest, but the hands of future Secretaries of State, future Governments—who may not be Thatcherite, as someone described us, but may want to be more interventionist in the interests of the public overall—are being fettered.
      The problem with the Bill is that there is no sense of the common good. There is no sense of the responsibility of Government to protect the common interest of the community overall. I urge those on the Front Bench at least to define clearly how they see clause 57 operating in relation to the reference to public security. If it encompasses all the elements that I have described, there is no need for the vote. If it does not, we will need to vote this evening, so that we can signal to the other place to make the appropriate amendment.
      5.30 pm
      Adam Price: I had not intended to speak in this debate, but I was inspired by the contribution of the hon. Member for North-East Derbyshire (Mr. Barnes) to add my voice and offer the support of Plaid Cymru and the Scottish National party to the principles that he enunciated, if there is a vote on amendment No. 202.
      As we are discussing collusion, I think that there has been a degree of collusion between the occupants of both Front Benches to give the impression that the shift in competition policy from a basis of the public interest to a purely competition-based approach is somehow completely uncontroversial. It is not. It is a matter of concern. In summarising responses to the White Paper, the Department of Trade and Industry referred to
      "almost unanimous support for replacing the current public interest test with more focused competition."
      Almost unanimous is not, of course, unanimous. As we have heard, there are important stakeholders who have voiced their concern and their opposition to a narrower competition-based approach.

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      I was interested in the Prime Minister's response to the assertion of the right hon. Member for Hartlepool (Mr. Mandelson) that we are all Thatcherites now. One of the Prime Minister's reasons for demurring was that Thatcherism had sought to isolate us in Europe. In this instance, we are seeing a shift to a more United States-based approach, which will hinder moves towards harmonisation of European merger policy.
      I agree with the hon. Member for North-East Derbyshire that clause 57 does not provide us with the assurances that we seek. Indeed, the chairman of the Competition Commission has said that he believes that there will need to be a high burden of proof to add to the exceptions of public or special public interest. I understand that it is envisaged that provisions in the draft communications Bill will be added to the list that at present contains only national security.
      There is an important issue. Some of us believe that the efficient functioning of markets is not the only consideration when it comes to industrial or regional policy. Merger activity can have a distorting effect on regional economic development. We have certainly seen that in Wales, where companies that are successful and reach a certain critical mass are taken over. The headquarters are then located outside the regional economy, and that has long-term implications for the pattern of economic development. There are also wider issues in the context of economic policy.
      We have heard the concerns of the trade union movement, and especially of Unifi, the financial services union, which has led the assault, as it were, from the trade unions. The financial services sector has seen a great deal of merger activity and has suffered for it, in terms both of job losses and of service provision at a very local level. That would not be covered by the terms of the Bill.
      Sometimes the public interest would favour loosening some of the competition rules. We have heard of the problem with producer co-operatives in the dairy sector and the wider agricultural sector. There needs to be a public interest basis so that wider issues can be taken into account.
      It should be clear, certainly to Labour Members, that mergers affect consumers and communities. The hon. Member for North-East Derbyshire is seeking to uphold the principle that applies to those who used to be referred to as stakeholders. When we make decisions on such matters, we need to take account of a wide range of interests, not only consumer interests or competition policy.
      Mr. Dennis Skinner: I congratulate my hon. Friend the Member for North-East Derbyshire (Mr. Barnes) on persevering with this issue, which goes back a few years. A merger took place in Clay Cross in his constituency, which he has raised on the Floor of the House many times; he and I also raised it in Westminster Hall. There was a lot of hand-wringing, as often happens with a lot of mergers when people get sacked; the Department gave the impression that it would love to be able to help, but could not.
      The Government cannot do the things that it would like to do principally because of the climate created by the Single European Act. A few years ago Thatcher introduced it, guillotined debate in the House of Commons and shovelled it through. Now everything is
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      wrapped up with the Common Market; that is part of the problem experienced by Governments here and elsewhere. I hope that minority parties that now say that they are sympathetic to my hon. Friend's position realise that the wonderful Common Market that they have fallen in love with is part of the problem.
      The Biwater merger at Clay Cross prompted my hon. Friend to start the process that we have heard about today. Seven hundred people were told that Biwater was finished and would become part of Saint Gobain, a French firm. They were told that everything would be okay, although a few people might be shifted here and there—but within a few hours they had all lost their jobs, which is why the amendment is ultra-important.
      I got the clear impression that the Government would like to resolve the problem. Next time a merger takes place, there will be a lot of hand-wringing and many people will say, "We'd love to do something, but we can't." The least the Government can do is tell my hon. Friend, "We've listened carefully to your case and we know that you've pursued it for a long time. We'll have a look at the amendment and, if necessary, deal with it in another place." As my hon. Friend the Member for Hayes and Harlington (John McDonnell) has just said, if the problem is to be dealt with elsewhere, we shall be quite happy for it to fall into such an embrace.
      Let us not kid ourselves; if there is a merger in future and several hundred or several thousand jobs are lost, let us not have any more hand-wringing or any more of the business of everyone feeling sorry about the problem. We could remedy the problem today if the Government agreed to the moderate suggestion made by my hon. Friend the Member for North-East Derbyshire.
      Dr. Pugh: Before the hon. Member for North-East Derbyshire (Mr. Barnes) ignited our debate with an unexpected note of controversy, there was widespread agreement about the Bill's objectives. Most parties accept that an active free market that satisfies discriminating consumers is a good thing. The Bill seeks to prevent bad things, such as anti-competitive mergers, cartels, consumer rip-offs and the pitfalls of enterprise, including unnecessary insolvency.
      Paradoxically, there has been cross-party, and probably international, agreement that a classic free market involves state regulation and a structured environment. Usually, free markets and state regulation are regarded as antithetical, but at the moment a third way appears to carry all before it. In Committee there was argument not about the content of the Bill but about its mechanics; Conservative Members examined in immense detail not the Government's intentions but the way in which they will deliver them. A persistent allegation was that some of the Government's methods might defeat some of their objectives. That accusation was not unreasonable, given the Government's track record of unnecessary bureaucracy.
      To be fair, I must add that the CBI has similar fears. In theory, it is not in favour of cartels, consumer rip-offs or mergers that inhibit competition, because they damage trading interests as much as anything else. Nevertheless, all its submissions to the Select Committee have generated a certain image—that of worry about vexatious complaints, bureaucratic bullying, trial by the media as mergers are tested, legal confusion and lobby-group

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      grandstanding, along with a constant commercial angst about exactly where the law is leading everyone. I am sure that that is not the Government's intention, but as Conservative Members have argued, it may be the result. It is important that that does not happen, especially if we are to bring criminal law into commercial practice.
      So far the Government have not succeeded in allaying the CBI's fears, and arguably they cannot do so at this stage. Law has not become practice yet, and we have not yet seen the natural history of the Bill. Supplementary guidance has not yet arrived. It was evident in Committee, however, that significant issues already exist in relation to the clarity of the legislation—I am thinking of simple matters such as the distinction between hard-core and soft-core cartels—and coherence between this and existing English law, European law and Scots law.
      The reference to mergers is crucial. My angle is different from that of the hon. Member for North-East Derbyshire. There are two tests for merger references. First there is the turnover test: is a company's turnover £45 million? It must be, for the company to be of real interest. Then there is the market-share test.
      The turnover test has been debated by the CBI, which suggests that the figure should be £75 million. I have a worry, which we voiced in Committee, about the market-share test. It does not seem in any way to inhibit local monopolies. My hon. Friend the Member for Orkney and Shetland (Mr. Carmichael) pointed out that if two airlines fly to Orkney and one takes over the other, there are plenty of other airlines in a national context, but there is no other airline flying to Orkney.
      I know that newspapers are a special case, but nearly every newspaper in my constituency is owned by one company. Not long ago, the one independent company was taken over. It set itself up independently and survived somehow, but what had happened was a definite merger.
      It could be argued that all my constituents who wanted to place advertisements in newspapers could advertise in the Burnley Bugle or the Middlesbrough Mercury. There were plenty of newspapers around—but there were no more newspapers in that area; one newspaper had an overall monopoly. Something that is theoretically not an issue is a very big issue in practical terms. A flaw in the Bill is the fact that we fret over big national mergers, although in those cases some choice is preserved at the end of the day, while there is no facility for dealing with local mergers by which choice is abolished.
      The examples I give can be replicated. Members can cite cases in their constituencies. Taxi drivers, for instance, can form a consortium; there can be just one company in a whole area. Theoretically, someone in Leicester could get a taxi in Wolverhampton or London, say—but they cannot actually do that. Effectively, people faced with a complete local monopoly have no choice.
      I genuinely understand the Government's reluctance to go further than they have. If a village contains two shops and one takes over the other, it is not desirable for the villagers to suggest that the OFT should investigate. I suggest, however, that there are simple ways in which local monopolies can be dealt with as national monopolies are. The number of consumers affected might be relevant, or perhaps the support of local trading standards authorities could be required.
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      This is wholly in line with the spirit of the Bill. We want to enact legislation that will stop large companies snuffing out small companies locally. Small companies do not start as national companies with national shares in the product they are producing, or as international companies; they start as local companies.
      I realise that there are drafting problems and problems of work overload, but it is not possible to create a national climate of enterprise without encouraging a local climate of enterprise. National considerations also apply locally. The public interest defence or the failing firms defence could be used, and compensating consumer gains could be cited. However, if anti-competitive mergers can sustain themselves locally and prevail, local citizens suffer the same ill as when that happens nationally.
      Let us consider the cartel analogy. We do not specify the size or turnover of the cartel; we simply define it by its effect. That should also apply to mergers. References to the OFT should be based on a merger's effect on consumers, not some artificial decision about size or market share.
      5.45 pm
      Mr. McWalter: I am sad not to share the view of my hon. Friend the Member for North-East Derbyshire (Mr. Barnes). However, I believe that it is important to present a counter-argument. The Bill deals with fair trading and makes a substantial contribution to its development. Loading it with goals and burdens that such Bills cannot tolerate goes further than is reasonable.
      My hon. Friend mentioned the boring position in Scottish football because of the domination of Celtic and Rangers. That is an interesting example because the reason for it is the wealth of both clubs compared with that of all the others in the league. They have the dominance that comes with wealth. I was keen for Manchester United not to be taken over by BSkyB because we would otherwise end up with one football club so rich that it was worth all the others put together. Absolute dominance in the market means that the consumer gets cheated and has less of the commodity to purchase and less of a service to enjoy.
      The Bill tries to make it easier for small businesses to start up and consolidate so that, over time, the position of even the wealthiest and most dominant suppliers is challenged. I am a member of the all-party small business group, and the Bill's aim is laudable and important to achieve.
      Sometimes the methods that large and wealthy companies use to dominate the market mean cheating workers and consumers. In Committee, I said that I was introduced to such matters when my father tendered for a small-scale contract to paint some houses in Hemel Hempstead and found that others were tendering at an extraordinarily low price. After he had lost the contract, he was told that others had stolen the paint and could therefore put in an unfair bid. That meant that those who made fair bids were put out of business and out of work.
      Dominant companies and suppliers can consolidate their position through cheating their workers, not recognising trade unions, paying low wages, adulterating the environment and a host of practices that are vital components of unfair trading. The Government are not Thatcherite because they have tried to introduce measures apart from the Bill to counteract the effects of such

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      practices through, for example, environmental protection and trade union recognition. It is not the job of this Bill to incorporate those measures, because they can be dealt with elsewhere. This Bill is about trying to provide an environment in which, if there is a dominant supplier in a particular trade, there is strong potential for the activities of that supplier to be called into question—notably, the activity of forming cartels or mergers, which are often a way of cheating workers and customers alike.
      Mr. Barnes: I hope that my hon. Friend does not misunderstand my position. I have been supportive of all the measures in the Bill concerned with insolvency, establishing consumer rights, and helping small businesses. I am not opposed to the Bill in general, but there are matters relating to public interest and producer concerns that I would like to see incorporated in it. From what my hon. Friend has said, there might also have been a misunderstanding about my attitude to BSkyB. I supported the decision of the Competition Commission on that issue, because it took it partly on the ground of public interest.
      Mr. McWalter: I understand where my hon. Friend is trying to get to; I am just not convinced that his amendment will get him there. That is partly because he wants there to be powers that it is difficult to imagine being operated. To return to the Scottish football example, one way of ensuring that other Scottish teams had much more say than they do now would be to impose a maximum wage on footballers, so that the benefit of certain organisations being massively rich compared with others would be counteracted by very strong regulations that made it more difficult for wealth to dominate.
      Another way of achieving that aim would be to have a fantastically powerful wealth tax to appropriate huge resources from the very wealthy football clubs and redistribute them among the others. There is a variety of ways of achieving that, and perhaps this is the time to ask why those clubs have such a dominant place in the market. I also agree with the hon. Member for Southport (Dr. Pugh) when he said that local monopolies and local dominance lead to consumer and employee impoverishment. The fact remains, however, that these matters can be returned to.
      My hon. Friend the Member for North-East Derbyshire should accept that the Bill makes a contribution to addressing the problems that we face in trying to ensure that consumers have a genuine choice, and that workers have a genuine opportunity to work for companies that do not violate the environment or systematically violate workers' rights. I hope that he will not divide the House on this issue, and I look forward to working with him on this agenda on other Bills, because there is important work to be done.
      Miss Melanie Johnson: In responding to what has been a lengthy and wide-ranging debate, I should like to thank hon. Members for their contributions.
      I shall deal first with amendments Nos. 18, 19 and 20, which are uncontentious. They would provide the opportunity for discretion on the part of the OFT, rather than a duty to refer. The Bill already gives the OFT discretion in certain circumstances, when that is appropriate. A variety of such circumstances is listed in subsection (3) of clauses 21 and 32. Amendments Nos. 18
      1090
      and 19 would extend the OFT's discretion in completed merger cases, and amendment No. 20 would do so in proposed mergers, beyond the particular circumstances set out. The Government believe that the exceptions set out in the two clauses cover all the circumstances in which discretion is appropriate, and do not anticipate any other circumstances in which such discretion will be needed. We do not believe, therefore, that the amendments have any value.
      We do not believe that the number of references will increase as a result of the duty to refer. I reiterate what I said in response to the hon. Member for Eastbourne (Mr. Waterson) and other hon. Members: we do not think that that duty will lead to a situation in which pre-clearance is almost obligatory. Those who have raised such concerns seem to be ignoring the fact that the OFT will apply a competition test to determine whether it has a duty to refer. Only cases that could lead to a substantial lessening of competition will be referred. That is the basis on which the OFT currently advises Secretaries of State, so we do not anticipate or accept that the incidence of references will increase because of the new arrangements. I hope, therefore, that I can persuade hon. Members not to press the relevant three amendments.
      I turn now to amendment No. 21 and associated amendments that deal with the question of the substantial lessening of competition test versus the dominance test. First, the Opposition have tabled a large group of amendments on this matter, as the hon. Member for Eastbourne commented. The amendments would replace our substantial lessening of competition test with a European-style dominance test. That is a slight turn up for the books, because the Opposition are not frequently taking the European route these days.
      I should like to stress at the outset that the Government have consulted carefully and extensively on the choice of competition tests for the new mergers regime. The question was first raised in our consultation document on reform of the merger regime in August 1999, and a further consultation occurred subsequently. In addition, officials have met lawyers, economists and other experts to discuss the new regime and the most appropriate competition tests to apply.
      A very large majority of those who responded to the consultation favoured a substantial lessening of competition test. They believe that that represents a better economic test than the dominance test that is currently used in the European Community merger regulation. One of the responses that we received came from the City of London Law Society, whose members are obviously experts on competition. It stated:
      "The Group does not favour the adoption of a dominance test due to its inflexibility in dealing with a range of situations including oligopolistic dominance and highly leveraged acquisitions. It does not see any benefits from having the same substantive test at a national level as in the ECMR. Additionally, it should be noted that other established merger control regimes within the EC have not found it necessary to adopt the ECMR test."
      Indeed, the substantial lessening of competition test comes closest to the competition analysis that is currently applied by the UK authorities. It has the key advantage of allowing the authorities to concentrate on the overall effect of a merger on competition rather than on the structures, and will allow them to act wherever there is an increase of sole, joint or collective market power resulting from a merger.

      1091
      The key concern about the dominance test is the uncertainty about allowing the authorities to take action where a merger will not lead to one firm having a substantial market share of 40 per cent. or more, but will nevertheless increase the likelihood of firms remaining in the market and acting in an anti-competitive way. To use economic terms, there is considerable uncertainty about whether a dominance test is effective in dealing with the creation of non-collusive oligopolistic markets. European law has developed the concept of collective dominance to try to bridge the gap, but its application is uncertain and the concept strains the normal meaning of dominance.
      The substantial lessening of competition test is superior in alluding to the impact of a merger on the whole market, rather than concentrating on the position of a particular market participant. It was because of concerns that the dominance test did not satisfactorily cover collective dominance cases that both Australia and New Zealand recently switched from a dominance test to a substantial lessening of competition test. That happened in Australia in 1993 and in New Zealand last year. Among our European Community colleagues, the Irish Government have recently adopted a similar test, and Spain also has such a test. It is also noteworthy that the Green Paper on reforms to the ECMR raises a substantial lessening of competition test as a possible option to replace dominance. The issue is also well understood in a number of other jurisdictions: the United States, Japan, Canada, Australia and New Zealand.
      I could speak at considerable length on this subject, but I will not do so, as time is of the essence. I believe for all the reasons that I have given that we have got the right test.
      6 pm
      I should like briefly to quote the hon. Member for South Cambridgeshire (Mr. Lansley), who put the position well in Committee when we debated the test of choice. He said that if we had a chance of ensuring a merger control regime that was likely to provide pressures and incentives conducive to competition in general and to a greater intensity of competition in the UK than in other parts of the EU, we should take it. For all the reasons that I have given, we believe that we have the right test, and I urge that those amendments be withdrawn.
      I should like now to turn to the amendments dealing with the restoration of the public interest test, which have been the subject of much debate this afternoon. The replacement of the current public interest test in the Fair Trading Act with a competition test is, of course, one of the cornerstones of the proposed new merger regime. Focusing the Bill on competition will provide better merger regulation. It will improve the clarity of the framework for decisions and the predictability of the decisions made under it. The wider the range of factors that can be taken into account, the less certain and the less predictable the outcome.
      The change will also bring our statute into line with other major international jurisdictions; the US, the European Commission, France, Germany, Canada and Australia. Switching away from a public interest test to a competition test for assessing mergers has involved hard thinking and tough choices, but it is a focused policy.
      1092
      It means that certain factors that could previously have been taken into account—I emphasise the word "could" as opposed to "were" or "would be"—will no longer be capable of being taken into account. We think, as a matter of policy, that that is right. The reform is not just about improving the predictability of decisions or aligning the regime with others. It is necessary because we believe that, in the vast majority of cases, the economy is best served if mergers are assessed solely on the basis of their effect on competition.
      Merger regulation is best aimed at safeguarding the competitive intensity in the economy. Competition provides the spur for businesses to be more productive, innovative and efficient, and better able to provide long-term sustainable employment and better products and services for consumers—my hon. Friend the Member for North-East Derbyshire and I share those aspirations.
      Adding additional factors to the test for mergers would create barriers to market re-structuring. We think it is wrong to create such barriers unless there are significant anti-competitive effects. Restructuring must be possible if companies and markets are to remain dynamic and competitive.
      I recognise, of course, that mergers can have adverse regional and employment impacts in the short term. There are hard cases; my hon. Friends have referred to cases in their constituencies, including the Biwater case. However, I do not think the answer is to step in to block mergers.
      The task for the Government—one that we are pursuing—is to make sure that the economy as a whole is strong and to help people to adapt and get new jobs. We must make sure that for every job and every business that disappears, there are new companies springing up and small companies growing. We have a vibrant, dynamic economy. We have the lowest unemployment rate since the 1970s and the lowest inflation and interest rates since the 1960s. We have record numbers of people in work, because private sector employment increased by 1.25 million over the last five years. We are, of course, the No. 1 destination for foreign direct investment into Europe.
      I would like to make a further important point to set the merger regime in the context of how the existing Fair Trading Act regime has operated. In practice, competition has been the principal factor in UK merger policy for years. In 1984, the then Secretary of State for Trade and Industry, now Lord Tebbit, announced that references would be made primarily on competition grounds. That doctrine has been pursued by every subsequent Secretary of State.
      We must look at why independence from political interference and involvement is important in this regard. I remind my hon. Friends that there is a direct parallel between what we are doing here and what my right hon. Friend the Chancellor of the Exchequer did in the legislation relating to the Bank of England in 1997. Before then, there was clearly political involvement in decisions about interest rates, decisions that were made, at the end of the day, by Ministers. As hon. Members know, such decisions are now taken by the Monetary Policy Committee, and are therefore taken at arm's length from political interference. That has not had an adverse effect; indeed, it has brought remarkable benefits. We took the right decision in that regard, and we are taking the right one here.

      1093
      On the question of the Bill's providing for the Secretary of State to make an order defining public interest issues that might be taken into account in considering a merger, when such issues arise it is Ministers themselves who will take decisions about a merger. The Bill will define as public interest considerations only national and public security concerns. However, we have built in appropriate checks on Ministers intervening easily in other areas. We have stipulated that additional criteria will be defined by order, subject to affirmative resolution of both Houses of Parliament. I am aware that some Opposition Members dislike that for one reason, and some Government Members dislike it for another. However, that power provides an important safety valve for the new regime, and ensures that very exceptional cases can be dealt with appropriately. In that sense, we have got the matter entirely right.
      As I said, public interest considerations must be specified in the new legislation as relating to national security. Having consulted on whether new powers are necessary, we concluded that they are not. As my hon. Friend the Member for North-East Derbyshire knows, the existing power enables us to add further considerations. The process will be transparent and subject to parliamentary approval, and the Secretary of State must give reasons under the terms of clause 104(7). Safeguarding competition is just one aspect of our duty to protect the public interest. As I said, matters such as employment are dealt with through other targeted measures. My hon. Friend will acknowledge the tremendous progress that the Government have made in terms of economic growth, employment, prosperity and the provision of public services.
      In the light of these changes, my hon. Friend also expressed his concern about the important issue of accountability. We have built in additional accountability elements, a long list of which I could run through. Although accountability will not be achieved through ministerial decision making, there will be additional transparency and checks and balances. For example, the OFT and the commission will have to publish their reasons for taking key decisions such as reference decisions, and for not referring.
      The commission's chairman has also made a commitment to publishing during an inquiry provisional conclusions on the competition aspects of a merger or market. Decisions will not come, therefore, like a bolt from the blue. There will be open discussion of provisional findings, and of the remedies for dealing with them. The tests themselves will be focused. They will be conducted within a tighter procedural framework, and a number of institutional checks and balances will be established. For example, the OFT board will replace the Director General of Fair Trading as the pinnacle of the OFT's operation. Taken together, the measures show that we have got things right. I appreciate my hon. Friend's concerns, but I believe that adopting these measures will bring real benefits.
      On failing firms, if an authority believes that a firm will in any case exit the market because it is failing, that judgment will influence the assessment of whether the merger may be expected to result in substantial lessening of competition. Another relevant consideration is whether the failing firm's market share is likely to fall to the acquiring firm in any event. It is not a question of weighing the position of a failing firm against the
      1094
      problems created by a substantial lessening of competition. If Opposition Members are suggesting that saving a failing firm should take priority over guarding against anti-competitive markets, I must disagree. It would not be appropriate to allow mergers to proceed that would result in a substantial lessening of competition, simply because one of the firms involved was failing.
      I hope, therefore, that hon. Members will not wish to press amendment No. 69 to a vote and I urge the House to resist it. I commend, however, the technical Government amendments that are part of this group.
      Mr. Waterson: When I moved amendment No. 18—it seems like half a lifetime ago—I had no idea of the great fissures that were about to open up in the modern and the not-so-modern Labour party. I hope that we will hear no more from Ministers about having plenty of time to debate the Bill, because the harsh reality that is staring us in the face—especially if we now have a Division—is that we will not even begin to debate the issues of cartels and market investigations. On any view, that is wrong. I do not wish to waste quarter of an hour by pressing our amendments to a vote. We are not happy with much of what the Minister had to say, but we have rehearsed the arguments before and I am happy to say that I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Amendment proposed: No. 202, in page 11, line 11, after "competition", insert—
      'or substantial damage to the public interest'.—[Mr. Barnes.]
      Question put, That the amendment be made:—
      The House divided: Ayes 39, Noes 245.

      Division No. 273]

      [6.11 pm

      AYES

      Austin, John

      Llwyd, Elfyn

      Barnes, Harry

      McDonnell, John

      Barrett, John

      Mackinlay, Andrew

      Bennett, Andrew

      Mahon, Mrs Alice

      Cable, Dr Vincent

      Marshall-Andrews, Robert

      Campbell, Ronnie (Blyth V)

      Meale, Alan

      Carmichael, Alistair

      Murphy, Denis (Wansbeck)

      Cohen, Harry

      öpik, Lembit

      Connarty, Michael

      Price, Adam

      Cook, Frank (Stockton N)

      Pugh, Dr John

      Cummings, John

      Russell, Bob (Colchester)

      Davey, Edward (Kingston)

      Sedgemore, Brian

      Dunwoody, Mrs Gwyneth

      Skinner, Dennis

      Ewing, Annabelle

      Smith, Llew (Blaenau Gwent)

      Foster, Don (Bath)

      Vis, Dr Rudi

      Galloway, George

      Wareing, Robert N

      Gidley, Sandra

      Willis, Phil

      Hamilton, David (Midlothian)

      Winnick, David

      Kennedy, Rt Hon Charles

      (Ross Skye & Inverness W)

      Tellers for the Ayes:

      Lamb, Norman

      John Thurso and

      Laws, David

      John Cryer.

      NOES

      Adams, Mrs Irene (Paisley N)

      Banks, Tony

      Ainger, Nick

      Barron, Kevin

      Ainsworth, Bob (Cov'try NE)

      Bayley, Hugh

      Allen, Graham

      Beckett, Rt Hon Margaret

      Anderson, Rt Hon Donald (Swansea E)

      Benton, Joe

      Berry, Roger

      Anderson, Janet (Rossendale)

      Blackman, Liz

      Armstrong, Rt Hon Ms Hilary

      Blizzard, Bob

      Atkins, Charlotte

      Brennan, Kevin

      1095

      Brown, Rt Hon Nicholas

      Hinchliffe, David

      (Newcastle E & Wallsend)

      Hodge, Margaret

      Browne, Desmond

      Hood, Jimmy

      Buck, Ms Karen

      Hoon, Rt Hon Geoffrey

      Burden, Richard

      Hope, Phil

      Burgon, Colin

      Howarth, George (Knowsley N)

      Burnham, Andy

      Hughes, Beverley (Stretford)

      Burnside, David

      Hurst, Alan

      Cairns, David

      Hutton, Rt Hon John

      Campbell, Alan (Tynemouth)

      Iddon, Dr Brian

      Campbell, Mrs Anne (C'bridge)

      Illsley, Eric

      Casale, Roger

      Irranca-Davies, Huw

      Caton, Martin

      Jackson, Glenda (Hampstead)

      Cawsey, Ian

      Jamieson, David

      Challen, Colin

      Jenkins, Brian

      Chapman, Ben (Wirral S)

      Johnson, Alan (Hull W & Hessle)

      Chaytor, David

      Johnson, Miss Melanie

      Clark, Dr Lynda

      (Welwyn Hatfield)

      (Edinburgh Pentlands)

      Jones, Helen (Warrington N)

      Clark, Paul (Gillingham)

      Jones, Kevan (N Durham)

      Clarke, Rt Hon Tom (Coatbridge)

      Jones, Martyn (Clwyd S)

      Clwyd, Ann

      Joyce, Eric

      Coaker, Vernon

      Keen, Alan (Feltham & Heston)

      Coffey, Ms Ann

      Keen, Ann (Brentford & Isleworth)

      Coleman, Iain

      Kelly, Ruth

      Colman, Tony

      Kemp, Fraser

      Cooper, Yvette

      Kennedy, Jane (Wavertree)

      Cox, Tom

      Khabra, Piara S

      Cranston, Ross

      Kilfoyle, Peter

      Crausby, David

      King, Ms Oona (Bethnal Green)

      Cruddas, Jon

      Knight, Jim (S Dorset)

      Cunningham, Jim (Cov'try S)

      Ladyman, Dr Stephen

      Dalyell, Tam

      Lammy, David

      Davey, Valerie (Bristol W)

      Lazarowicz, Mark

      David, Wayne

      Lepper, David

      Davidson, Ian

      Leslie, Christopher

      Davies, Geraint (Croydon C)

      Levitt, Tom

      Davis, Rt Hon Terry

      Lewis, Terry (Worsley)

      (B'ham Hodge H)

      Liddell, Rt Hon Mrs Helen

      Dawson, Hilton

      Linton, Martin

      Dean, Mrs Janet

      Lloyd, Tony

      Dhanda, Parmjit

      Love, Andrew

      Dismore, Andrew

      Lucas, Ian

      Dobbin, Jim

      Luke, Iain

      Donohoe, Brian H

      McCafferty, Chris

      Dowd, Jim

      McCartney, Rt Hon Ian

      Drew, David

      McDonagh, Siobhain

      Drown, Ms Julia

      MacDonald, Calum

      Eagle, Angela (Wallasey)

      McFall, John

      Eagle, Maria (L'pool Garston)

      McGuire, Mrs Anne

      Ellman, Mrs Louise

      McIsaac, Shona

      Ennis, Jeff

      McKechin, Ann

      Field, Rt Hon Frank (Birkenhead)

      McKenna, Rosemary

      Flint, Caroline

      McNulty, Tony

      Foster, Rt Hon Derek

      MacShane, Denis

      Foster, Michael (Worcester)

      Mactaggart, Fiona

      Foulkes, George

      McWalter, Tony

      Gapes, Mike

      McWilliam, John

      George, Rt Hon Bruce (Walsall S)

      Mahmood, Khalid

      Gibson, Dr Ian

      Mallaber, Judy

      Gilroy, Linda

      Mann, John

      Godsiff, Roger

      Marris, Rob

      Griffiths, Jane (Reading E)

      Marsden, Gordon (Blackpool S)

      Griffiths, Nigel (Edinburgh S)

      Martlew, Eric

      Grogan, John

      Meacher, Rt Hon Michael

      Hall, Mike (Weaver Vale)

      Merron, Gillian

      Hall, Patrick (Bedford)

      Michael, Rt Hon Alun

      Hanson, David

      Milburn, Rt Hon Alan

      Healey, John

      Miller, Andrew

      Henderson, Doug (Newcastle N)

      Moffatt, Laura

      Hendrick, Mark

      Morgan, Julie

      Hepburn, Stephen

      Morley, Elliot

      Heppell, John

      Mudie, George

      Hesford, Stephen

      Munn, Ms Meg

      Hewitt, Rt Hon Ms Patricia

      Murphy, Jim (Eastwood)

      Heyes, David

      Naysmith, Dr Doug

      1096

      O'Brien, Bill (Normanton)

      Smith, Geraldine (Morecambe)

      O'Brien, Mike (N Warks)

      Smith, Jacqui (Redditch)

      O'Hara, Edward

      Smith, John (Glamorgan)

      Olner, Bill

      Southworth, Helen

      O'Neill, Martin

      Starkey, Dr Phyllis

      Osborne, Sandra (Ayr)

      Steinberg, Gerry

      Owen, Albert

      Stevenson, George

      Palmer, Dr Nick

      Stinchcombe, Paul

      Pearson, Ian

      Stoate, Dr Howard

      Perham, Linda

      Strang, Rt Hon Dr Gavin

      Picking, Anne

      Sutcliffe, Gerry

      Pike, Peter

      Tami, Mark

      Plaskitt, James

      Taylor, Ms Dari (Stockton S)

      Pollard, Kerry

      Timms, Stephen

      Pond, Chris

      Tipping, Paddy

      Pound, Stephen

      Todd, Mark

      Prentice, Ms Bridget (Lewisham E)

      Touhig, Don

      Prentice, Gordon (Pendle)

      Trickett, Jon

      Primarolo, Dawn

      Truswell, Paul

      Prosser, Gwyn

      Turner, Dennis (Wolverh'ton SE)

      Purchase, Ken

      Turner, Dr Desmond (Kemptown)

      Purnell, James

      Turner, Neil (Wigan)

      Quin, Rt Hon Joyce

      Twigg, Stephen (Enfield)

      Rammell, Bill

      Tynan, Bill

      Rapson, Syd

      Ward, Ms Claire

      Reed, Andy (Loughborough)

      Watts, David

      Robertson, John

      White, Brian

      (Glasgow Anniesland)

      Whitehead, Dr Alan

      Roche, Mrs Barbara

      Wicks, Malcolm

      Ross, Ernie

      Williams, Rt Hon Alan

      Roy, Fran

      (Swansea W)

      Ruane, Chris

      Winterton, Ms Rosie (Doncaster C)

      Ruddock, Joan

      Wood, Mike

      Russell, Ms Christine (Chester)

      Woodward, Shaun

      Ryan, Joan

      Woolas, Phil

      Salter, Martin

      Worthington, Tony

      Sawford, Phil

      Wright, Anthony D (Gt Yarmouth)

      Shaw, Jonathan

      Wright, David (Telford)

      Sheridan, Jim

      Wyatt, Derek

      Shipley, Ms Debra

      Simon, Siôn

      Tellers for the Noes:

      Smith, Rt Hon Andrew (Oxford E)

      Jim Fitzpatrick and

      Smith, Angela (Basildon)

      Derek Twigg

      Question accordingly negatived.

    Clause 24

      EXTENSTION OF TIME-LIMITS
      Amendments made: No. 224, in page 14, line 37, after "with" insert—
      "the receipt of a notice under subsection (7A).
      (7A) The OFT shall, in connection with nay notice given by it under subsection (6), by notice inform the persons carrying on the enterprises which have or may have ceased to be distinct enterprises of".
      No. 225, in page 14, line 41, leave out subsection (8) and insert—
      "(8) Subject to subsections (9) and (10), where the four month period mentioned in section 23 (1)(a) or (2)(b) is extended or further extended by virtue of this section in relation to a particular case, any reference to that period in section 23 or the preceding provisions of this section shall have effect in relation to that case as if it were a reference to a period equivalent to the aggregate of the period being extended and the period of the extension (whether or not those periods overlap in time).
      (9) Subsection (10) applies where—

      (a) the four month period mentioned in section 23(1)(a) or (2)(b) is further extended;

      1097

      (b) the further extension and at least one previous extension is made under one or more of subsections (2), (4) and (6); and

      (c) the same days or fractions of days are included in or comprise the further extension and are included in or comprise at least one such previous extension.

      (10) In calculating the period of the further extension, any days or fractions of days of the kind mentioned in subsection (9)(c) shall be disregarded.
      (11) No more than one extension is possible under subsection (1).'.—[Miss Melanie Johnson.]

    Clause 31
      SUPPLEMENTARY PROVISION FOR PURPOSES OF SECTIONS 24 AND 30
      Amendment made: No. 226, in page 19, line 13, leave out "or (6)" and insert ", (6) or (7A)".—[Miss Melanie Johnson.]
    Clause 39

      SECTION 38: SUPPLEMENTARY
      Amendment made: No. 227, in page 24, line 29, at end insert—
      '(4A) Where a period within which a report under section 37 is to be prepared and published is extended or further extended under section 38(3) or (4), the period as extended or (as the case may be) further extended shall, subject to subsections (4B) and (4C), be calculated by taking the period being extended and adding to it the period of the extension (whether or not those periods overlap in time).
      (4B) Subsection (4C) applies where—

      (a) the period within which the report under section 37 is to be prepared and published is further extended;

      (b) the further extension and at least one previous extension is made under section 38(4); and

      (c) the same days or fractions of days are included in or comprise the further extension and are included in or comprise at least one such previous extension.

      (4C) In calculating the period of the further extension, any days or fractions of days of the kind mentioned in subsection (4B)(c) shall be disregarded.'.—[Miss Melanie Johnson.]

    Clause 41

      INTERVENTION BY SECRETARY OF STATE IN CERTAIN PUBLIC INTEREST CASES
      Mr. Waterson: I beg to move amendment No. 63, in page 26, line 28, leave out from "57" to end of line 29.
      Madam Deputy Speaker (Sylvia Heal): With this it will be convenient to discuss the following: Government amendment No. 229.
      Amendment No. 142. in clause 45, page 31, line 36, at end insert—
      '(5A) The Secretary of State shall not make a reference under section 44(3) or (5) when a relevant public interest consideration which is mentioned in the intervention notice has not been finalised.'.
      Government amendment No. 234.
      Amendment No. 304, in clause 57, page 40, line 15, after "of' insert "(a)'
      1098
      Amendment No. 305, in page 40, line 15, after "security" insert—

      '(b) maintaining and promoting the balanced distribution of industry and employment in the United Kingdom;

      (c) maintaining and promoting competitive activity in markets outside the United Kingdom on the part of producers of goods, and of suppliers of goods and services, in the United Kingdom.'.

      Amendment No. 197, in page 40, line 15, at end insert—
      '(1A) The interests of plurality in newspaper ownership are specified in this section.'.
      Amendment No. 198, in page 40, line 18, at end insert—
      '(2A) In subsection (1A) "newspaper" shall have the same meaning as in section 57(1)(a) of the 1973 Act; and in this subsection "plurality" means a diversity of ownership that is sufficient to ensure that the public have access to the accurate presentation of news and free expression of opinion.
      (2B) In applying the interests specified in subsection (IA) no account should be taken of plurality in newspaper ownership if the relevant merger situation concerns the transfer of a newspaper or newspaper assets to a newspaper proprietor whose newspapers have an average circulation per day of publication amounting, together with that of the newspaper concerned in the transfer, of fewer than 500,000 copies.
      (2C) In subsection (2B), "newspaper proprietor" shall have the same meaning as section 57(1)(b) of the 1973 Act; and the calculation of circulation per day shall be by such means as the OFT or (as the case may be) the Commission shall determine.'.
      Amendment No. 143, in page 40, line 19, leave out subsections (3) and (4).
      Government amendments Nos. 243 to 245.
      Mr. Waterson: As this may be the last group of amendments that we can deal with before 7 pm under the guillotine procedure, it may be helpful if I point out that we intend to press amendment No. 63 to a Division, as we feel strongly about it. The group deals with public interest and mergers, but there will be some echoes from topics that we discussed in the debate on the previous group.
      At present, the only definition of public interest appears in clause 57. The clause defines public security in the terms set out in the European merger regulations. We had a significant number of debates on these matters in Committee. Our starting point is that the provision is crucial, so it is right that it should be firmly stated in the Bill. Our approach is rather different from that of the hon. Member for North-East Derbyshire (Mr. Barnes), and our concern is that it should not be open to the Government to add a new ground of public interest when they feel like it.
      When we pressed the issue in Committee, the Minister was wedded to the power to extend the definition, but she was wholly unable to say—in fairness, she said the same this afternoon—what possible category she might have in mind to add to the definition in the Bill. Nevertheless, the Government's position seems to be that it is imperative to include the power.
      The effect of amendment No. 63 would be to remove the Secretary of State's ability to consider public interest considerations not listed in the legislation. We debated a similar amendment in Committee. As the Bill stands, the Secretary of State could simply add a new public interest

      1099
      consideration, or more than one such consideration, in response to a specific merger or proposed merger, as it arose.
      Apart from anything else, that could involve enormous uncertainty for those in the business sector. When embarking on a merger, they would not know whether the goalposts would be moved in due course by the addition of a new public interest ground because the Secretary of State had decided to change the rules. That is another good reason why any other public interest consideration—whether media plurality, which we shall come to in a moment, prudential rules or anything of that sort—should be identified in the primary legislation.
      If it is not possible to identify those considerations now and they arise later, it should be possible to add them to the Act, as it will then be, by primary legislation. If something arose that was so important and so unforeseeable that no one can even imagine what it would be, any Government ought to be able, possibly with cross-party agreement and—who knows?—possibly even with the agreement of their Back Benchers, to put through the House the necessary primary legislation, and quite quickly, if needs must.
      There is also a side issue. If we leave open this great loophole, it merely returns us to what I am sure the Minister would regard as the bad old days of political involvement in such matters.
      I shall touch briefly on amendments Nos. 142, 197 and 198 tabled by my hon. Friend the Member for South Cambridgeshire (Mr. Lansley), who will develop the arguments in detail. Amendment No. 142 relates to the Secretary of State's power to make merger references arising from a public interest intervention notice. My hon. Friend will develop the reasons for the amendment. Amendments Nos. 197 and 198 deal with the plurality of newspaper ownership. The effect of amendment No. 143 echoes that of amendment No. 63.
      It is impossible to consider what the Government have in mind in changing the law on mergers and takeovers without considering how those matters have been dealt with up till now.
      We argued in Committee—with some justification, I think—that all we are doing in the Bill is regularising what has been practice for a considerable time. Under the so-called Tebbit guidelines, there has been a kind of self-denying ordinance among successive Secretaries of State of both parties that they would look narrowly at competition issues when reaching their decisions. It is fair to say that there is an element of cross-party consensus that seeming political involvement brings the system into disrepute. The average member of the public finds it difficult to distinguish between a politician making a decision on non-political grounds and one making a decision on political grounds.
      6.30 pm
      Fast-forwarding from the Tebbit doctrine, we come to 26 October 2000, when the then Secretary of State, the right hon. Member for Tyneside, North (Mr. Byers)—a familiar name in the House—announced that Ministers would accept the advice of the Director General of Fair Trading on takeover matters, save in exceptional circumstances.
      1100
      Enter stage left the figure of Mr. Richard Desmond, whose Northern and Shell media group on 22 November of that year paid £125 million for Express Newspapers Group. Mr. Desmond had a busy week, because only four days later, on 26 November, he had a half-hour chat at No. 10 with the Prime Minister.
      Mr. Desmond has forced himself into the consciousness of many of us recently through the titles of some of the magazines that he publishes, as well as through his newspaper activities. The list of publications is very long; I was going to say that it is impressive, but it is long. There are titles such as Weird Sex Special—[Interruption.] That is obviously familiar to the hon. Member for Wolverhampton, North-East (Mr. Purchase).
      Titles include Horny Housewives, Mega Boobs, and for the real enthusiast, The Very Best of Mega Boobs. There is also a magazine called Mothers-in-Law. I could go on; I probably will. Asian Babes is another title that is not unfamiliar. In fairness, Mr. Desmond also publishes magazines such as Worldwide Golf, which as far as I can tell has nothing to it other than an interest in the game of golf.
      In any event, the issue arose whether the then Secretary of State would refer the takeover of Express Newspapers. Events had moved on by that stage. During the new year celebrations of 2001, Mr. Desmond had told senior Labour figures that he was willing to offer them free advertising in the run-up to the election.
      January was a busy month; Mr. Desmond's editor at The Express resigned, and on 7 February, the then Secretary of State announced that he would not refer the takeover of The Express to the Competition Commission. Only eight days later, on 15 February, it is understood that the Labour party banked Mr. Desmond's cheque for £100,000. To show that relations were particularly cordial and fraternal, Mr. Alastair Campbell attended Mr. Desmond's 50th birthday party in December.
      Mr. McWalter: Does the hon. Gentleman accept that his remarks seem to be rather tenuously linked to any arguments that might encourage us to support amendment No. 63?
      Mr. Waterson: That is more a matter for the Chair, although I do not accept the proposition for a moment. We are discussing public interest in mergers. The hon. Member for North-East Derbyshire, who has strong views about almost everything, although he puts his arguments with a certain charm, has strong views about whether Ministers of the Crown should be able to intervene in employment matters. He made a powerful case on that in the previous debate. However, some people and certainly some members of the Labour party have similar views about the activities of the party's donors, such as Mr. Desmond.
      Mr. Ken Purchase: Does the hon. Gentleman accept that many Labour Members believe that Mr. Desmond's activities, so long as they are legal, are a matter for him and his shareholders? However, many of us would not take a penny-piece from a man who is nothing but a pornographer.
      Mr. Waterson: I am not sure what the hon. Gentleman's point is. That is his description of the gentleman involved, not mine. However, the Labour party has taken £100,000 in penny-pieces.

      1101
      It is interesting that when the Prime Minister was interviewed by Jeremy Paxman, who also reeled off a list of names of magazines, the Prime Minister seemed to invert the issue—
      Madam Deputy Speaker: Order. I hope that the hon. Gentleman will be a little more concise and address his remarks to the amendment.
      Mr. Waterson: Let me bring events forward to the present day and to the revelations that appeared in The Sunday Telegraph last Sunday. It reported:
      "The Department of Trade and Industry conceded yesterday that there had been no scrutiny of Mr. Desmond's on-line services which allowed paying customers to ask models to perform live sex acts."
      I shall not go into any more detail than that, Madam Deputy Speaker, because I am sure that you would not wish me to. However, the criteria to be applied in the case of a major takeover—for example, of a newspaper—are extremely interesting and are relevant to the competition provisions in the Bill.
      We are told that the Bill will put into legislation what has become the practice and that, under the Tebbit doctrine and the position as stated most recently by the then Secretary of State in 2000, the broader issues will not be taken into account. It is important to consider what has been happening and whether the provision is necessary.
      When these issues came into the public domain, the attitude of the former Secretary of State was that he had merely followed the advice of officials. I assume that that is what will happen by law if we pass these provisions in the Bill. However, when the report of the Director General of Fair Trading saw the light of day, a different picture emerged. The director general had advised the Secretary of State that, on the competition issues, he could see no reason to refer the bid, but he pointed out that what he described as the non-competition issues were a matter for the Secretary of State. That is a subtle and rather important difference from what the former Secretary of State had told us earlier.
      It emerges that the Home Office had been asked to advise, as had the Department for Culture, Media and Sport, about Mr. Desmond and his activities. The Home Office tetchily concluded that, as he was not breaking the law, it had no further comment to make. However, as The Sunday Telegraph has now revealed, neither it nor anyone else was asked to consider the websites operated by the companies controlled by Mr. Desmond.
      It is important to quote the hon. Member for Calder Valley (Chris McCafferty), who is reported as saying:
      "I am astonished. It takes my breath away that the Government failed to examine the very worst side of Desmond's empire. There should have been a thorough investigation at the time. The Government should make amends by launching a thorough investigation now."
      Other Labour Members expressed similar concerns.
      We must examine how the matter was dealt with, as there are major questions about how the DTI chose to conduct its investigation into the takeover of Express Newspapers. It would be, at the very least, surprising if Mr. Desmond's colourful websites were not taken into account. We need to be told the precise criteria on which the former Secretary of State based his ultimate decision
      1102
      not to refer the bid, especially as the decision was followed only a few days later by a large donation to the Labour party.
      Miss Melanie Johnson: The hon. Gentleman is inviting me to comment on what happened. It is hard to understand the relevance of his case to amendments Nos. 197 and 198—[Interruption.] I am seeking Madam Deputy Speaker's guidance. In light of the hon. Gentleman's concerns about pressures on time, it is hard to understand how his argument relates to the amendments.
      Madam Deputy Speaker: I have drawn the hon. Gentleman's attention to the fact that he must speak more directly to the amendments, and I do so once again.
      Mr. Waterson: I have made my points on that issue. I was not aware when I gave way to the hon. Lady that she wanted to make a point of order.
      It is necessary to give the provisions careful consideration. Some of the amendments are new, in particular those that relate to newspapers, on which my hon. Friend the Member for South Cambridgeshire may wish to comment. Others are familiar from our deliberations in Committee.
      We are worried that the Secretary of State will reserve not only powers to act in the public interest, but the power to add to the criteria as they relate to the public interest. We do not know what the Government have in mind, which is understandable because they do not know what they have in mind. We feel strongly about the matter and intend to press the amendment to a Division. If the Government have nothing in mind, and I am sure that they are being open and honest with the House, they should leave the public interest definition as it is, without the power to add to it by regulation.
      Mr. Lansley: Before I comment on the amendments, I want to explain why Mr. Desmond and the handling of his case by the then Secretary of State is relevant.
      As Mr. Desmond was not a newspaper proprietor, his acquisition was not considered under the special newspaper transfer regime, as set up by the Fair Trading Act 1973. Instead, he was considered under the normal merger regime. As my hon. Friend the Member for Eastbourne (Mr. Waterson) made clear, the possible threat to the public interest by the acquisition of Express Newspapers by Northern and Shell could have been considered by the OFT. However, because it put competition as a primary duty, it chose to have no view and referred the problem to the Secretary of State who, although recognising that he had a responsibility, chose not to exercise it. My hon. Friend took us through the conjecture and speculation on why he chose not to consider the wider issues of public interest. We should not count out the fact that they exist, however.
      The hon. Member for Wolverhampton, North-East (Mr. Purchase) and others, including the Prime Minister, seem to suggest that what is legal is by definition okay, and what is done legally must therefore be in the public interest. There is no mention of a subset of activities in relation to the ownership of newspapers under existing legislation that are legal but could adversely affect the public interest. I am afraid that the evidence points to the opposite.

      1103
      6.45 pm
      In 1990, the Monopolies and Mergers Commission made a report on Mr. David Sullivan and his acquisition of the Bristol Evening Post. I will not quote at great length, but paragraph 6.13 of the report says:
      "Were someone of Mr. Sullivan's business background and interests"
      it may be recalled that Mr. Sullivan owned the Sunday Sport and other related newspapers
      "seen to have a significant influence in their affairs",
      that is, the affairs of the Bristol Evening Post and Western Daily Press,
      "their reputation could well be seen as compromised, particularly where the reporting of events with sexual aspects was involved. Were he to have acquired effective management control these effects could be expected to be more pronounced."
      Essentially, the Monopolies and Mergers Commission was applying a test in relation to the accurate presentation of news and free expression of opinion.
      The issue, therefore, is this. If at that time the consent to a transfer of a newspaper title was refused under the special newspaper transfer regime by reference to that test of the public interest—interestingly, we understand that the Government intend at some point to introduce a test of the public interest in relation to the plurality of newspaper ownership—surely the two things are related. The question whether the Government believe that there is a public interest in the ownership of newspapers and the consequences that flow from that for the accurate presentation of news or for free expression of opinion must be of the essence in relation to the amendments. I hope that I have demonstrated why the handling of Mr. Desmond's case is relevant to their consideration.
      I shall deal first with amendments Nos. 197 and 198, which relate specifically to newspapers. On a number of occasions—interestingly, she even managed to do it earlier this afternoon—the Minister has asserted to the Committee and to the House that the Government have no intention of adding additional public interest, to be specified under clause 57. However, in paragraph 9.7.4 of the document published as a policy narrative to accompany the draft Communications Bill, the Government express their future intention in relation to that Bill, and, on newspaper ownership, state:
      "the Secretary of State will retain the power to refer transfers for wider investigation by the Competition Commission by an extension of the provisions in the Enterprise Bill dealing with 'exceptional public interest' … cases."
      Therefore, unless the Minister tells me something to the contrary, it is clearly the Government's intention, subject to consultation and scrutiny of the Bill, to bring newspaper ownership under clause 57 by way of an additional specification of national interest, but apparently we are not to debate that at this stage.
      Before the Minister intervenes to say that amendments Nos. 197 and 198 do not do all that is required, I understand that subsequently clause 66 would need to be deleted and schedule 26 concerning repeals of the 1973 Act amended. One would have to remove the existing special newspaper transfer regime, but it is important, if we are legislating for what is to be in the Bill, that we do it now and have a clear indication of the circumstances in which Ministers would wish to specify an additional public interest. Plurality of newspaper ownership is one that has been suggested.
      1104
      Two sets of amendments seek to do slightly different things. That is why they are slightly testing the Minister. Amendment No. 143 would remove from the Secretary of State the ability to specify additional public interest considerations. My personal inclination is that relying on the general merger regime and competition considerations should be sufficient. I accept the argument that national security and what flows from it is an exception, but that should be the only exception. If I were pressed, I would say that amendment No. 143 should be pursued. I would similarly support amendment No. 63. It is likewise designed to remove from the Secretary of State what might otherwise become a politically motivated opportunity to inject additional public interest considerations that are not transparent in advance and not transparent to the marketplace for those who are contemplating or executing mergers.
      If we are to have any additional forms of public interest, we should be told what they will be. My purpose in tabling amendments Nos. 197 and 198 is to ensure that we can know precisely, by way of the Government's response in due course—there might be one—what kind of newspaper ownership regime is contemplated. If, until now, a special newspaper transfer regime has operated on the basis of confining itself particularly to the accurate presentation of news and the protection of free expression of opinion, I believe that that is a sufficient basis upon which to undertake an examination of plurality of newspaper ownership. Those can be the factors for which we look. Is the diversity of newspaper ownership sufficient to deliver that?
      To whom should that test be applied? Clearly, the merger regime has its own test in terms of market share and turnover. However, we have discovered over years past that where newspapers are concerned—I quote from the Government's "Consultation on Media Ownership Rules"
      "This regime has imposed significant costs on the industry and yet, out of 172 cases considered by the Secretary of State since 1980, only three have been refused and five given approval subject to conditions."
      It is important that we structure a regime that is more deregulatory than that which went before it. We should not merely replicate the special newspaper transfer regime in new legislation.
      It is interesting that the Government's consultation goes on to state:
      "In no case has the Competition Commission found that the acquisition of purely local newspaper titles would be against the public interest on freedom of expression grounds."
      Ministers and the Competition Commission have often found that quite high local concentrations of newspaper ownership are consistent with a continuing plurality of voice in the sense of free expression of opinion. To respond to customers in those areas, newspapers often find that they must be responsive in that way. The opportunities for concentration of local newspaper titles throughout the country, although that has happened in recent years, has not necessarily led to centralised editorial opinion imposed on local newspapers from the controlling interest.
      One of the consequences that flow from that is that the newspaper ownership regime could be structured in a way that excluded local newspaper titles. For these purposes, as a proxy, I have adopted the threshold of a circulation of 500,000 newspapers a day. That is a limit above which transfers of newspaper titles could be considered.

      1105
      Whether that approach should apply to existing newspaper proprietors or transfers of ownership in any circumstances is a difficult question. It is difficult to argue that maintaining plurality of newspaper ownership could mean that someone would be barred from the acquisition of a newspaper if he or she was not already a newspaper proprietor and there was no concentration of newspaper ownership.
      The only circumstances in which that could be done would be if one were to reintroduce some test of whether someone acquiring a newspaper was a fit and proper person to do so. As the Minister said in Committee, and in her subsequent letter, it is difficult to envisage circumstances where someone could be excluded, on competition grounds, from owning a newspaper or acquiring an enterprise on the basis of whether he or she was a fit and proper person. That should be considered on the basis of disqualifications under the Companies Acts. However, with newspapers, a further question could arise about whether someone is seeking to limit the free expression of opinion or the accurate presentation of views by acquiring a newspaper. It is therefore important to find out more about what the Government are seeking to achieve by extending clause 57, contrary to their previously stated intention.
      Amendment No. 143 would make competition the sole factor to be considered in the operation of merger policy, with the exception of national security. Amendment No. 142 is more technical; it will not be immediately obvious to people who are not as familiar with the Bill as Committee members that in clause 44, after the Secretary of State has given a public interest intervention notice and a reference back to him or her has been made by the Competition Commission, he or she has four options for subsequent decisions, two of which can be made in circumstances in which there is a finding of a substantial lessening of competition if a merger is completed or is being contemplated. The two remaining circumstances, given in clause 44(3) and (5), are ones in which there is no finding of a substantial lessening of competition, and the Secretary of State can take account only of public interest considerations.
      Ministers have an obligation not to make a reference in or after the period of 24 weeks during which the Secretary of State is allowed to try to resolve the question of public interest by laying an order before Parliament and securing parliamentary approval; they will not make a reference after 24 weeks, and disregard any public interest consideration that has not been finalised. By contrast, the Secretary of State can make a reference before the 24 weeks have elapsed when there is a substantial lessening of competition. A loophole has therefore been created. Curiously, before the expiry of the 24-week period, there is nothing to stop the Secretary of State from making a reference to the Competition Commission on the ground that public interest considerations have not been finalised, and when there is no substantial lessening of competition.
      One of the most undesirable circumstances in which a reference could be made is as follows. The Secretary of State has devised a public interest consideration, published an intervention notice, failed to come to the House to secure its approval to finalise the public interest, yet goes ahead and makes a reference to the Competition Commission. That loophole should be closed.
      1106
      In addition, in clause 45, for reasons that escape me, the Government say that when making a reference during or after the 24-week period the Secretary of State should specify
      "the public consideration or considerations … in the intervention notice concerned which the Secretary of State is not under a duty to disregard".
      Government amendment No. 234 deals with the same issue. However, if a reference is made before the end of the 24-week period and before a consideration is finalised, as outlined in clause 44(2) and (4), the Secretary of State is not required to disregard the public interest consideration; for completeness, clause 44(3) should also be specified. It is astonishing that the Minister has gone down that route.
      It being Seven o'clock, MADAM DEPUTY SPEAKER, pursuant to Order (this day], put forthwith the Question already proposed from the Chair.
      The House divided: Ayes 126, Noes 255.

      Division No. 274]

      [7 pm

      AYES

      Ainsworth, Peter (E Surrey)

      Grayling, Chris

      Allan, Richard

      Green, Damian (Ashford)

      Amess, David

      Grieve, Dominic

      Arbuthnot, Rt Hon James

      Gummer, Rt Hon John

      Atkinson, David (Bour'mth E)

      Hawkins, Nick

      Atkinson, Peter (Hexham)

      Hayes, John

      Bacon, Richard

      Heathcoat-Amory, Rt Hon David

      Baldry, Tony

      Hendry, Charles

      Baron, John

      Hoban, Mark

      Barrett, John

      Horam, John

      Bellingham, Henry

      Jack, Rt Hon Michael

      Bercow, John

      Key, Robert

      Blunt, Crispin

      Kirkbride, Miss Julie

      Boswell, Tim

      Laing, Mrs Eleanor

      Bottomley, Rt Hon Virginia

      Lait, Mrs Jacqui

      Brady, Graham

      Lamb, Norman

      Brazier, Julian

      Lansley, Andrew

      Browning, Mrs Angela

      Laws, David

      Burns, Simon

      Leigh, Edward

      Burnside, David

      Liddell—Grainger, Ian

      Burt, Alistair

      Lidington, David

      Butterfill, John

      Lilley, Rt Hon Peter

      Cable, Dr Vincent

      Loughton, Tim

      Cameron, David

      Luff, Peter

      Carmichael, Alistair

      McIntosh, Miss Anne

      Cash, William

      MacKay, Rt Hon Andrew

      Chapman, Sir Sydney

      Maclean, Rt Hon David

      (Chipping Barnet)

      Mates, Michael

      Chope, Christopher

      Mawhinney, Rt Hon Sir Brian

      Clappison, James

      May, Mrs Theresa

      Clifton-Brown, Geoffrey

      Mercer, Patrick

      Collins, Tim

      Moss, Malcolm

      Cormack, Sir Patrick

      Osborne, George (Tatton)

      Cran, James

      Ottaway, Richard

      Davey, Edward (Kingston)

      Page, Richard

      Duncan, Alan (Rutland & Melton)

      Paice, James

      Duncan Smith, Rt Hon Iain

      Paterson, Owen

      Evans, Nigel

      Pickles, Eric

      Ewing, Annabelle

      Portillo, Rt Hon Michael

      Fabricant, Michael

      Prisk, Mark

      Field, Mark (Cities of London)

      Pugh, Dr John

      Flight, Howard

      Redwood, Rt Hon John

      Flook, Adrian

      Robathan, Andrew

      Forth, Rt Hon Eric

      Robertson, Hugh (Faversham)

      Foster, Don (Bath)

      Roe, Mrs Marion

      Gale, Roger

      Rosindell, Andrew

      Garnier, Edward

      Ruffley, David

      Gibb, Nick

      Russell, Bob (Colchester)

      Gidley, Sandra

      Sayeed, Jonathan

      Gray, James

      Selous, Andrew

      1107

      Simmonds, Mark

      Viggers, Peter

      Simpson, Keith (Mid-Norfolk)

      Walter, Robert

      Spicer, Sir Michael

      Waterson, Nigel

      Stanley, Rt Hon Sir John

      Watkinson, Angela

      Steen, Anthony

      Whittingdale, John

      Swayne, Desmond

      Widdecombe, Rt Hon Miss Ann

      Swire, Hugo

      Wiggin, Bill

      Syms, Robert

      Wilkinson, John

      Tapsell, Sir Peter

      Willis, Phil

      Taylor, Ian (Esher & Walton)

      Wilshire, David

      Taylor, John (Solihull)

      Winterton, Nicholas (Macclesfield)

      Taylor, Sir Teddy

      Yeo, Tim

      Thurso, John

      Tellers for the Ayes:

      Tredinnick, David

      Mrs. Cheryl Gillan and

      Tyrie, Andrew

      Mr. Laurence Robertson.

      NOES

      Adams, Mrs Irene (Paisley N)

      Davey, Valerie (Bristol W)

      Ainsworth, Bob (Cov'try NE)

      David, Wayne

      Allen, Graham

      Davidson, Ian

      Anderson, Rt Hon Donald

      Davies, Geraint (Croydon C)

      (Swansea E)

      Davis, Rt Hon Terry

      Anderson, Janet (Rossendale)

      (B'ham Hodge H)

      Armstrong, Rt Hon Ms Hilary

      Dawson, Hilton

      Atkins, Charlotte

      Dean, Mrs Janet

      Austin, John

      Dhanda, Parmjit

      Banks, Tony

      Dobbin, Jim

      Barnes, Harry

      Donohoe, Brian H

      Barron, Kevin

      Dowd, Jim

      Bayley, Hugh

      Drew, David

      Bennett, Andrew

      Drown, Ms Julia

      Benton, Joe

      Eagle, Angela (Wallasey)

      Berry, Roger

      Eagle, Maria (L'pool Garston)

      Blackman, Liz

      Ellman, Mrs Louise

      Blizzard, Bob

      Ennis, Jeff

      Brennan, Kevin

      Field, Rt Hon Frank (Birkenhead)

      Browne, Desmond

      Fitzpatrick, Jim

      Buck, Ms Karen

      Flint, Caroline

      Burden, Richard

      Foster, Rt Hon Derek

      Burgon, Colin

      Foster, Michael (Worcester)

      Cairns, David

      Foulkes, George

      Campbell, Alan (Tynemouth)

      Gapes, Mike

      Campbell, Mrs Anne (C'bridge)

      George, Rt Hon Bruce (Walsall S)

      Campbell, Ronnie (Blyth V)

      Gerrard, Neil

      Casale, Roger

      Gibson, Dr Ian

      Caton, Martin

      Gilroy, Linda

      Cawsey, Ian

      Godsiff, Roger

      Challen, Colin

      Griffiths, Jane (Reading E)

      Chapman, Ben (Wirral S)

      Griffiths, Nigel (Edinburgh S)

      Chaytor, David

      Clapham, Michael

      Grogan, John

      Clark, Dr Lynda

      Hall, Mike (Weaver Vale)

      (Edinburgh Pentlands)

      Hall, Patrick (Bedford)

      Clark, Paul (Gillingham)

      Hamilton, David (Midlothian)

      Clarke, Rt Hon Tom (Coatbridge)

      Hanson, David

      Clwyd, Ann

      Healey, John

      Coaker, vernon

      Hendrick, Mark

      Coffey, Ms Ann

      Hepburn, Stephen

      Cohen, Harry

      Heppell, John

      Coleman, Iain

      Hesford, Stephen

      Colman, Tony

      Hewitt, Rt Hon Ms Patricia

      Connarty, Michael

      Heyes, David

      Cook, Frank (Stockton N)

      Hinchliffe, David

      Cooper, Yvette

      Hodge, Margaret

      Cox, Tom

      Hood, Jimmy

      Cranston, Ross

      Hoon, Rt Hon Geoffrey

      Crausby, David

      Hope, Phil

      Cruddas, Jon

      Howarth, George (Knowsley N)

      Cryer, John (Hornchurch)

      Hughes, Beverley (Stretford)

      Cummings, John

      Hurst, Alan

      Cunningham, Jim (Cov'try S)

      Hutton, Rt Hon John

      Dalyell, Tam

      Iddon, Dr Brian

      1108

      Illsley, Eric

      Palmer, Dr Nick

      Irranca—Davies, Huw

      Pearson, Ian

      Jackson, Glenda (Hampstead)

      Perham, Linda

      Jamieson, David

      Picking, Anne

      Jenkins, Brian

      Pike, Peter

      Johnson, Alan (Hull W & Hessle)

      Plaskitt, James

      Johnson, Miss Melanie

      Pollard, Kerry

      (Welwyn Hatfield)

      Pond, Chris

      Jones, Helen (Warrington N)

      Pound, Stephen

      Jones, Kevan (N Durham)

      Prentice, Ms Bridget (Lewisham E)

      Jones, Martyn (Clwyd S)

      Prentice, Gordon (Pendle)

      Joyce, Eric

      Price, Adam

      Keen, Alan (Feltham & Heston)

      Primarolo, Dawn

      Kelly, Ruth

      Prosser, Gwyn

      Kemp, Fraser

      Purchase, Ken

      Purnell, James

      Kennedy, Jane (Wavertree)

      Quin, Rt Hon Joyce

      Khabra, Piara S

      Rammell, Bill

      Kilfoyle, Peter

      Rapson, Syd

      King, Ms Oona (Bethnal Green)

      Reed, Andy (Loughborough)

      Knight, Jim (S Dorset)

      Robertson, John

      Ladyman, Dr Stephen

      (Glasgow Anniesland)

      Lammy, David

      Roche, Mrs Barbara

      Lazarowicz, Mark

      Ross, Ernie

      Lepper, David

      Roy, Frank

      Leslie, Christopher

      Ruane, Chris

      Levitt, Tom

      Ruddock, Joan

      Linton, Martin

      Russell, Ms Christine (Chester)

      Lloyd, Tony

      Ryan, Joan

      Llwyd, Elfyn

      Salter, Martin

      Love, Andrew

      Sawford, Phil

      Lucas, Ian

      Sedgemore, Brian

      Luke, Iain

      Shaw, Jonathan

      McCafferty, Chris

      Sheridan, Jim

      McCartney, Rt Hon Ian

      Shipley, Ms Debra

      McDonagh, Siobhain

      Simon, Siôn

      MacDonald, Calum

      Skinner, Dennis

      McFall, John

      Smith, Angela (Basildon)

      McGuire, Mrs Anne

      Smith, Rt Hon Chris (Islington S)

      McIsaac, Shona

      Smith, Jacqui (Redditch)

      McKechin, Ann

      Smith, John (Glamorgan)

      McKenna, Rosemary

      Southworth, Helen

      Mackinlay, Andrew

      Starkey, Dr Phyllis

      McNulty, Tony

      Steinberg, Gerry

      MacShane, Denis

      Stevenson, George

      Mactaggart, Fiona

      Stinchcombe, Paul

      McWalter, Tony

      Stoate, Dr Howard

      McWilliam, John

      Strang, Rt Hon Dr Gavin

      Mahmood, Khalid

      Sutcliffe, Gerry

      Mallaber, Judy

      Tami, Mark

      Mann, John

      Taylor, Ms Dari (Stockton S)

      Marris, Rob

      Timms, Stephen

      Marsden, Gordon (Blackpool S)

      Tipping, Paddy

      Todd, Mark

      Marshall-Andrews, Robert

      Touhig, Don

      Meacher. Rt Hon Michael

      Trickett, Jon

      Meale, Alan

      Truswell, Paul

      Merron, Gillian

      Turner, Dennis (Wolverh'ton SE)

      Michael, Rt Hon Alun

      Turner, Dr Desmond (Kemptown)

      Milburn, Rt Hon Alan

      Turner, Neil (Wigan)

      Miller, Andrew

      Twigg, Stephen (Enfield)

      Moffatt, Laura

      Tynan, Bill

      Morgan, Julie

      Vis, Dr Rudi

      Morley, Elliot

      Ward, Ms Claire

      Mudie, George

      Wareing, Robert N

      Munn, Ms Meg

      Watts, David

      Murphy, Denis (Wansbeck)

      White, Brian

      Murphy, Jim (Eastwood)

      Whitehead, Dr Alan

      Naysmith, Dr Doug

      Williams, Rt Hon Alan

      O'Brien, Mike (N Warks)

      (Swansea W)

      O'Hara, Edward

      Winnick, David

      Olner, Bill

      Winterton, Ms Rosie (Doncaster C)

      O'Neill, Martin

      Wood, Mike

      Osborne, Sandra (Ayr)

      Woodward, Shaun

      1109

      Woolas, Phil

      Wyatt, Derek

      Worthington, Tony

      Wright, Anthony D (Gt Yarmouth)

      Tellers for the Noes:

      Wright, David (Telford)

      Derek Twigg and

      Wright, Tony (Cannock)

      Mr. Nick Ainger.

      Question accordingly negatived.
      Remaining Government amendments agreed to.
      Bill, as amended in the Standing Committee, to be further considered tomorrow.

    EUROPEAN COMMUNITY DOCUMENTS
    Motion made, and Question put forthwith, pursuant to Standing Order No. 119(9) (European Standing Committees),
    EUROPEAN COMMUNITY DOCUMENTS

      STRATEGY FOR A FUTURE CHEMICALS POLICY
      That this House takes note of European Union Document No. 6671/01, Commission White Paper from the European Commission on a Strategy for a future Chemicals Policy; recognises the need to protect human health and the environment from hazardous chemicals including endocrine disrupters; agrees that the weaknesses of the current legislation, including the lack of data and slow progress in assessing hazards and risks from chemicals already on the market, must be addressed; welcomes the proposals to ensure transparency and improved public access to non-confidential information and that responsibility is placed on manufacturers and importers to assess hazard and exposure and perform preliminary risk assessment; endorses the Government view that requirements for animal testing must be minimised and alternatives to animal testing promoted; recognises that the proposals must take account of the implications for the competitiveness of the European Union chemical industry; and recognises that proposals must be ambitious but achievable and provide a system that is workable and cost effective with minimum regulatory burden.—[Mr. Jim Murphy.]
      Question agreed to.

    DELEGATED LEGISLATION
    Madam Deputy Speaker (Sylvia Heal): With permission, I shall put together the motions relating to delegated legislation.
    Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

    DELEGATED LEGISLATION

      ANIMALS
      That the draft Welfare of Farmed Animals (England) (Amendment) Regulations 2002, which were laid before this House on 1st May, be approved.
      That the Code of Recommendations for the Welfare of Livestock: Laying Hens, a copy of which was laid before this House on 1st May, be approved.
      1110
      That the Code of Recommendations for the Welfare of Livestock: Meat Chickens and Breeding Chickens, a copy of which was laid before this House on 1st May, be approved.

      FINANCIAL SERVICES AND MARKETS
      That the draft Financial Services and Markets Act 2000 (Financial Promotion) (Amendment) (Electronic Commerce Directive) Order 2002, which was laid before this House on 16th May, be approved.—[Mr. Jim Murphy.]
      Question agreed to.

    BUSINESS OF THE HOUSE
    Motion made,
    That, at the sitting on Wednesday 19th June, the Speaker shall put the Questions necessary to dispose of proceedings on the Motion in the name of Mr. Robin Cook relating to House of Lords Reform (Joint Committee) not later than three hours after the commencement of proceedings on the Motion; such Questions shall include the Questions on any Amendments selected by the Speaker which may then be moved; the Questions may be decided, though opposed, after the expiration of the time for opposed business and the Order of 28th June 2001 relating to deferred Divisions shall not apply to them.—[Mr. Jim Murphy.]
    Hon. Members: Object.

    PETITION

      City of Bath
      7.15 pm
      Mr. Don Foster: I wish to present a non-party political petition that has more than 12,000 signatures from people in my constituency and the support of the local chamber of commerce and many small businesses that are concerned about what they see as the deteriorating state of the city of Bath. It seeks to ensure that Bath, a world heritage site with a mayoralty dating back to 1230, but with an administrative headquarters now based outside the city in Keynsham, is restored to unitary authority status. For more than 1,000 years, Bath was in charge of its own affairs and the petitioners seek to return to that situation.
      The petition states:
      Wherefore your Petitioners pray that your Honourable House shall urge the Secretary of State … to consider the plight of the citizens living in the Parliamentary constituency of Bath and others devoted to the maintenance and continued well-being of the City of Bath, recognising its unique position as a World Heritage city site, to restore the city to its status as a unitary authority able to take control and govern in its own right as the City of Bath.
      To lie upon the Table.

    Brownfield Sites (London)
    Motion made, and Question proposed, That this House do now adjourn.—[Mr. Jim Murphy.]
    7.16 pm
    Siobhain McDonagh: Thank you, Madam Deputy Speaker, for allowing me to bring to the House this Adjournment debate about the change in the use of planning applications for brownfield sites. I am delighted to have secured it not only because of the importance that this matter holds for my constituents, but because I understand that it is the first Adjournment debate of our new Minister, the Under-Secretary of State, Office of the Deputy Prime Minister, my hon. Friend the Member for Harrow, East (Mr. McNulty), and his first outing as such in the Chamber. I should like to say how good I think he will be in his position and how important it is for those of us in suburban constituencies, especially in London, to have Ministers who understand the problems that exist in such areas. I am pleased that he is responding to the debate.
    The reason why I asked for the debate is that my local authority, the London borough of Merton, has in its unitary development plan a policy suggesting that all employment sites should remain as such. On the face of it, that is not an unreasonable idea. Clearly, it is important in areas where land values are very high to have the opportunity for people to work locally and sustainably. That is the case on the surface, but when we go a bit deeper, we see the problems that the policy creates. I would like the Minister to address the issue of location of the sites and the competing housing needs in these areas.
    I come to the debate not as a planner or as somebody who necessarily understands all planning law, but as a constituency Member of Parliament who has had to deal in the past five years with large numbers of complaints from local residents about industrial and employment sites that have been empty for more than five, six or even 12 years and which become magnets for fly tipping, abandoned cars, arson and illegal travellers' sites, generally making local residents miserable while remaining empty and unused because of the council's planning policies.
    It strikes me that if a site is designated for employment use, some attention must be given to its location. We must ask whether it is of an appropriate size for work and business or in an area where they will go, about its transport links, and about how close it is to other residential development. In my sort of suburban area, housing is built up around employers and employment and in places where businesses no longer want to go.
    Our employment problems are related not necessarily to the number of jobs available, but to the people who are available with the right skills to fill the vacancies that exist. While keeping employment land for this purpose is seen as a sustainable policy—so that one works near where one lives—it has an element of unsustainability. People in south-west London are moving further and further out because there is not enough housing. They push up the price, making it very difficult to pay for housing. We are making people travel further because we are keeping sites empty for the sake of some notion that, in future, they may be used for employment.
    That is how I came to the issue. On looking at it further, I discovered a real housing dilemma in Merton's draft UDP. There is an idea that the land allocated for housing
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    purposes will meet housing need. Clearly that is not the case, and it is self-evident that the housing department is not talking to the planning department. That may he replicated in boroughs right across London.
    The housing department believes that it will need something between 600 and 900 affordable units per year. It is currently developing between 88 and 100, with 60 used by planning gain through the planning process. These figures have not hit the imagination of the planning department, which appears to believe that it is currently meeting all the necessary targets. I am sure that it is meeting current Serplan targets for owner-occupation, but not in terms of the need for social renting or the need for intermediate assistance for key workers. It is alarming that these sites remain empty, yet the draft UDP makes no mention of the need for key worker housing.
    This is not an academic subject, and I wish to give the House some idea of sites on which I have worked that led to my alarm about the general policy. The first of these sites, 120–126 Lavender avenue—a mixed-use site of about 637 sq m in a heavily residential area involving social renting and owner-occupation—became empty in 1996. It was a small factory site. No developer or employer would want to go there because the site is long and narrow and would not meet today's IT requirements. There is not good parking, and the public transport situation makes it fairly inaccessible.
    The site was allowed to rot for over seven years while people put in numerous planning applications for residential uses that were never allowed because the site was being kept for employment purposes. The vandals got in, the windows were broken and the building was continually set on fire—so much so that, in the end, the council required the developer to erect a fence along the front of the site so that no one could gain access.
    Resulting from such antisocial behaviour and destruction are not only the misery of local residents but the hidden costs to the public purse: the costs to the council, the police and the fire service. Who benefits? Now—at last, I am glad to say—the council has finally given in and the Wandle housing association will he developing social housing there. The local residents could have told the planners for rather more than six years that that was the appropriate use for the site, but they would not listen.
    The next site is 2–8 Miles road; it is a bigger site of about 3,400 sq m which was a paint factory until 1991, when it was broken up for small business purposes, such as car repairs and small joiners workshops. That site has been the biggest issue in my postbag for the last five years because, for example, of the abandoned and untaxed cars left in the area. As people made more money and improved their homes, they felt bogged down by the street scene, which was appalling. They felt frustrated that their council was not listening to them or meeting them halfway in trying to improve their environment.
    I have had three or four site meetings there and have met representatives of the Driver and Vehicle Licensing Agency and the police on one occasion when cars had to be towed away. There are hidden costs that come about as a result of the council's not being prepared to consider—for laudable reasons—changing the use of a site that is now redundant but which no longer fits in with the residential area. However, the council does not have to pick up the pieces or live with the consequences of

    1113
    such decisions. Again, it will be a social housing site, together with some business use. Although there will be an employment purpose, it will also be a much better site for local residents.
    It is the final site that I want to mention—the UGI Smith Meters site, of which I know the Minister is aware—that prompted me to ask for this Adjournment debate. It is a six acre site on which UGI Smith Meters used to construct gas meters, until it moved production to India. Over several years, the number of employees slowly declined. The area around the factory consists of 1930s, residential, three-bedroom, family-style accommodation in which people like to live.
    When the site became empty, it seemed unthinkable that it would be replaced by another factory employing the same number of people. It is inaccessible by public transport, and the nearest train station is Streatham Common, some two miles away. Such a factory simply would not fit in with the residential area that it has become. The site is long and narrow, with a very narrow frontage to the high road. Major access is via Long Thornton road, which is also a residential road.
    I have no particular brief in respect of Hanson, the developers; I simply want the best use to be made of what is a very large site for the benefit of local residents. A scheme involving 60 per cent. employment and 40 per cent. residential use was developed, including provision for a nursery—child care facilities are desperately needed in the area—and a shop, which would avoid the need for local residents to travel to buy fresh fruit and vegetables, and so on. The scheme, which seemed to strike a fantastic balance, also provided for 12 B1-use units and nine live-work units.
    It is clear however that local residents must have their say in the impact on their local environment. I sent out a questionnaire, to which I received 232 replies. I held a tea and coffee morning, which well in excess of 100 residents attended to ask questions. Surprisingly, the vast majority supported the application, and the residents association lobbied on its behalf. That is quite an unusual situation. We normally expect local residents to have a "not in my backyard" attitude to such matters, but they said, "No, we realise that we need some development, and we feel that this best suits what we can achieve for the local area."
    In spite of public support and the provision of housing, employment, a nursery and a shop, however, the council turned down the application. Local residents found that very hard to accept, and it continues to surprise me, particularly given that there is another site less than 100 yd away—Marco's, known as 216–218 Rowan road—which comprises 0.75 hectares. That site has been empty for 12 years.
    David Cairns: My hon. Friend makes a very strong case. She will recall that the development not only had the overwhelming support of local residents, but the support of local Labour councillors—of which I was one—the local Labour party, the local residents association, the local Conservative party and local Liberal Democrats. In fact, far more people took part in my hon. Friend's survey than took part in the borough-wide survey for the unitary development plan. Does she agree that it is a sad state of affairs when the council itself entirely misrepresents the nature of the
    1114
    plan so as to justify its actions? Should it not have the confidence of its convictions and tell the truth about the development, instead of spreading misinformation?
    Siobhain McDonagh: I agree entirely with my hon. Friend. He refers to a recent news letter, published after today's Adjournment debate was announced, in which the planning application was portrayed as far less industrial and more residential.
    David Cairns: Overwhelmingly residential.
    Siobhain McDonagh: Indeed. However, that is not the case. A thriving residential area is being dragged down not only by the poor condition of this site, but by the existence of the Marco's site 100 yd up the road, which has been empty for 12 years. Successive planning applications have failed and it remains unused. To the elderly people who live nearby, it is a source of nightmares, with frequent arson and many abandoned cars—but nobody wants to listen.
    When businesses in an area change their employment needs, how can we bring an element of realism to unitary development plans? How can we convince people that it should not be a matter of ideology? Just because a site was used for employment in the past, it does not have to remain designated for that purpose, especially if that will mean that it remains empty or an eyesore, or costs another council department a fortune; while at the same time horrendous housing needs go unmet.
    I sat on the local authority for 16 years and I spent five years as the chair of housing, but the housing need that I see now bears no relationship to what I saw then. In the last year, Merton's housing department has let 48 three-bedroomed properties—less than one a week. We must do something to address housing need. I understand that we must strike a balance between housing and employment, but I am concerned that the present guidance does not force my local authority to consider where that balance should lie.
    7.31 pm
    The Parliamentary Under-Secretary of State, Office of the Deputy Prime Minister (Mr. Tony McNulty): I am delighted to congratulate my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) on her success in securing this crucial debate on the use of brownfield sites in London and I thank her for her characteristically generous words of welcome, for which I am enormously grateful. She spoke eloquently of the concerns and worries about the necessary balance between the need for new housing developments and the preservation of existing communities and future employment potential for local economies. She rightly highlighted the tensions that abound in an outer-London, suburban borough and the importance of a sensitive, responsive and flexible planning-led land use and development control framework.
    The overall debate on housing in London perfectly illustrates the potential conflicts between assorted uses and competing demands that the planning system must seek to resolve, and my hon. Friend clearly outlined many local examples. The importance of brownfield sites in London, and the south-east in general, simply cannot be overstated. I should like to take this opportunity to

    1115
    congratulate all local planning authorities on their work in this regard. In 1998, the Government set a target that sought to ensure that, by 2008, 60 per cent. of additional housing should be provided on previously developed land and through conversions.
    The latest general figures available show that in 2000 the actual figure achieved was 60 per cent. and that in 2001 it was 61 per cent. The target has been met and that shows that local planning authorities and developers are making an immense effort to put brownfield land development ahead of greenfield sites. If we focus on London, the story is even better. Over the last few years, an average of 90 per cent. of additional housing development in London has been on brownfield sites. London leads the country in the recycling of brownfield sites and local planning authorities and developers are to be congratulated on that. However, that success does not mean that we should no longer prioritise the use of brownfield sites in London—the challenge is to maintain the rate of brownfield development, and we also need to promote higher densities with good design to ensure more efficient use of the land.
    My hon. Friend mentioned specific sites in her constituency and previous planning applications, but she will understand that I cannot refer to those specifically, given the Deputy Prime Minister's quasi-judicial role in terms of planning. However, I have listened very carefully to what she has said and it will, I hope, help if I explain the Government's position on the wider issues.
    The draft UDP for the London borough of Merton went on what is known as first deposit—the issuing for consultation—in September 1999, and second deposit in October 2000. A public inquiry was held over the summer of 2001 and we are expecting the full report from the inspector later this summer or early in the autumn.
    Those dates are significant in that the latest draft plan pre-dates the Government's announcement of the key worker strategy, hence there is no mention of it in the plan. The plan also pre-dates much of what we have said since about affordable housing, so the inspector may well pick up on those recent developments—I urge my hon. Friend to take a good note of the inspector's report when it comes out—and the plan may well ultimately reflect those policies.
    The national policy position on brownfield development, mixed-use applications, town centres and housing in general is set out in several key policy guidance documents. Planning policy guidance notes 1, 3, 6 and 13 clearly set out that the Government want to promote more sustainable locations for key land uses, such as housing, employment, retail and transport.
    Through the Government offices for the regions, we ensure that the local planning authorities produce local plans that are rooted in and reflect those policy objectives. The latest regional planning guidance for London RPG3, if we want to descend into acronyms—was published in 1996 and set out that authorities needed both to meet strategic housing needs and encourage the recycling and adaptation of existing buildings to provide more housing. That included encouraging authorities to look sympathetically towards using non-traditional sources for housing land, such as obsolete or surplus office floor space. It also encouraged the development of
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    flats over shops, mixed uses, such as those suggested by my hon. Friend, conversion and the subdivision of existing housing stock. RPG3 also linked such opportunities to overall strategies for the regeneration of neglected parts of London.
    The most recent housing policy guidance from the Government, PPG3, which was issued in 2000, took that policy context much further. Through the regional planning process, authorities are now required to undertake "urban capacity studies". Such studies help authorities to identify actual and potential brownfield land housing opportunities. They also help the regional planning body to reconcile information that it has about housing needs in a given area with the actual potential to accommodate those needs.
    London has led the country in planning matters, as one would anticipate from a capital city, and it developed capacity studies long before it was required to do so by the national policy guidance. The former London planning advisory committee, of which I was a member for my sins back in the mid-1980s, undertook several comprehensive regional capacity studies in the past few decades—the most recent being published in September 2000.
    To digress, my only claim to fame as a member of that committee was that I was the sole vote against the erection of the millennium wheel on the other side of the river, which has been an outstanding success. As I start my time at the Dispatch Box, I hope that my judgment has improved significantly since the mid-1980s. LPAC's work informed authorities' housing allocation in their plans and it is one of the key reasons why London has such high levels of land recycling for new development and is ahead of the curve in terms of other planning authorities.
    Now, the responsibility for regional planning in London has passed to the Mayor of London and the Greater London Authority. Based on reports such as the recent capacity study, the Mayor is drawing up a new regional plan for London—the spatial development strategy—and I look forward to seeing the Mayor's emerging proposals in the forthcoming draft of that document when it is published. I am sure that issues such as affordable housing, land use and the utilisation of brownfield sites on a London-wide basis will also be features of the SDS. That document and local UDPs are all about seeking to reconcile the often conflicting needs for housing, employment, commercial and other needs, as my hon. Friend said.
    Planning policy guidance 3 also sought to address some of those problems. It recognised that some authorities have designations for employment uses in their plans, which cannot realistically he taken up over the life of the plan. Similarly, some of those designations were made years ago, are no longer compatible with the policy set out in the PPGs or RPGs, and should be seriously reviewed when the authority concerned critically assesses and reviews its plan, and redesignated if need be to housing or, as my hon. Friend suggested, mixed use.
    I certainly endorse that approach and exhort local planning authorities to look closely at their land use and site designations through their UDP review processes and to recognise the changing needs of their boroughs, not least the transitional needs occurring in many outer-London boroughs, as my hon. Friend pointed out. The mixed-use solution is often attractive in dealing with

    1117
    the competing needs of employment and housing, as it can reconcile apparent opposites. Flats above shops or offices not only provide housing but can bring vibrancy, life and sustainability back to shopping centres or high streets that have been going through bad times.
    For several years, PPG1 has been promoting the mixed-use route and many such schemes are being introduced throughout London. In February, the Government published a report that showed how we could get an additional 25,000 homes in London by building over commercial property such as supermarkets, car parks, shops, garages and other low-rise developments.
    I agree with my hon. Friend that we must do more to exploit the potential of our high streets, be prepared to consider changes of use and seriously to reflect on using different densities in different areas. We may need to rethink previously designated light-industrial, employment or B1 uses that are close to residential areas, and to think seriously about previously unacceptable densities to assist in our quest for more housing—as long as it is done within a sensitive design context and we do not repeat the past mistakes that blight some areas. I will do all that I can, in my ministerial role, to exhort local planning authorities to be as imaginative, creative and forward-looking as possible in that regard.
    The main reason that the debate is so important is the issue of affordable housing and key worker strategies—I again congratulate my hon. Friend for raising the subject. The issue is of huge significance in London, not least in my hon. Friend's constituency, and the continuing utilisation of brownfield sites will be key to any resolution of the problems faced in London's housing market and to our ability to realise and meet London's potential and needs.
    The figures for housing in London speak for themselves. Need for affordable housing in London is high and will continue to be so. The Mayor's office forecasts that London needs about 20,000 units per year. Shelter suggests a figure of 26,000 per year. In 2000, 21,000 houses were built in London, of which 4,000 were in the affordable sector. Overall, the affordable housing stock is not rising with demand and the provision of affordable stock is way below what is needed.
    Government policy on affordable housing is clear: it can and should be a priority, and developers and local planning authorities are aware of the need. Our recent consultation document on planning obligations has gone further, and floated the idea of requiring commercial and
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    retail applications to contribute towards a tariff that would help resource the provision of affordable housing. The Government are adamant that that need does not go unrecognised or unresolved.
    We can begin to make further progress only if the level of new development on brownfield sites for housing is either increased or, at the very least, maintained at current figures. It does not and should not follow that demand for affordable housing is met by encroaching on London's parkland, metropolitan open space or green belt.
    My hon. Friend has highlighted the need to respond to the recognition of the changing nature of our communities and local economies in London; that brownfield sites are and must remain central to our ability to provide affordable housing in London; and that local planning authorities need to be forward looking and robust in their determination of the future use of each and every precious pocket of brownfield sites in our local communities—not least in the outer-London suburban context that we share. She has emphasised, too, how mixed-use developments can help that process, satisfy affordable housing needs and bring much needed economic vibrancy back to our communities. She has illustrated how the planning system is vital to so many aspects of the redevelopment and regeneration of our communities.
    My hon. Friend is to be commended on raising those extremely important issues, which matter so much to her constituents and the wider community in London. The Government are fully aware of the concerns that she expresses and, as I hope to have shown, the increasing importance of brownfield sites to any solution to London's housing problem. The case for changing some aspects of the planning system, among other things, to help the process is overwhelming. We have outlined many of those plans for change in the Green Paper on planning.
    The point about the overwhelming need for change is well made, and I shall ensure that the comments made by my hon. Friend and her colleague, my hon. Friend the Member for Greenock and Inverclyde (David Cairns), are fed into the process as the Green Paper is, I hope, turned into law. She has certainly done an extremely important service for her constituents by raising this matter. I warmly thank her again for the welcome that she gave me at the start, and I sincerely hope that I can live up to her generous billing and expectation.
    Question put and agreed to.
    Adjourned accordingly at fifteen minutes to Eight o'clock.