§ 11.23 a.m.
§ Lord Dean of Beswick asked Her Majesty's Government:
§ Under what powers, and in what circumstances, officials of the competition directorate of the European Commission are permitted to search the London office of the chairman of British Airways and to inspect his personal bank account.
§ Lord TrefgarneMy Lords, Commission officials visited British Airways on 23rd and 24th February, by prior arrangement with the company. The visit was part of the investigation of an agreement between BA, KLM and Sabena which had been notified by the airlines to the Commission under the Community's competition rules. We have no reason to believe that the Commission exceeded its powers. If the airline wishes to make a complaint about the conduct of the visit, we will follow this up.
§ Lord Dean of BeswickMy Lords, is the Minister aware that the company received less than 24 hours' notice that such a search was to be made and that even though the chairman offered total co-operation and to make available any documents that the Commission wished to specify, it did not specify any documents, but made the search an open one which included the perusal of some of the chairman's private belongings? Is the Minister aware that such a search is not what we expect in this country and is totally unacceptable?
§ Lord TrefgarneMy Lords, as I said, I do not believe that the Commission officials exceeded their powers in the matter; but I think that the visit was conducted in a somewhat heavy-handed way. We hope that they will be more restrained in the future.
§ Lord JayMy Lords, if the Commission officials exceeded their powers, would the British authorities have corresponding powers to inspect the personal bank account of members of the Commission?
§ Lord TrefgarneMy Lords, as I said, I do not believe that the Commission exceeded its powers in this matter, but I doubt that we have the powers that the noble Lord mentions.
§ Lord MonsonMy Lords, if the Commission did not exceed its powers, is that not an argument for restricting its powers?
§ Lord TrefgarneMy Lords, the Commission's powers in this matter are set out in a regulation made under the Treaty of Rome, which came into force in 1987 and was approved by the Council of Ministers at the time.
§ Lord Williams of ElvelMy Lords, as a matter of information, when Euromerger control comes into operation, as I believe it will later this year, will the powers that the Commission already has under the regulations that the Minister has specified be extended to the new regulations for all Euromergers?
§ Lord TrefgarneMy Lords, those powers were granted to the Commission under the competition articles of the Treaty of Rome. Any new powers will have to be granted under whatever is the appropriate 1120 article of the treaty, and will, as I understand it, require the further approval of the Council of Ministers.
§ Lord Williams of ElvelMy Lords, I am sorry to press the Minister but I am not entirely clear. Is not the Euromerger control a regulation under the same articles (Articles 85 and 86) as the previous regulation, and therefore presumably the same powers will apply?
§ Lord TrefgarneMy Lords, I need to take further advice on that question. It sounds to me as though the noble Lord has it right.
§ Lord MonsonMy Lords, I am sorry to be obtuse, but will the Minister explain what on earth the private bank account of the noble Lord, Lord King, has to do with a possible merger of BA with KLM and Sabena?
§ Lord TrefgarneMy Lords, I am not certain what papers were examined by the Commission during the two visits which it made on consecutive days; but I understand that one of BA's legal representatives was on hand throughout the visit. I presume that he satisfied himself that only the appropriate papers were examined.
§ Lord Clinton-DavisMy Lords, without commenting on that case, is it not clear that those powers were invested in the Commission to deal with situations where serious abuses of monopoly power could take place, or had taken place; and that it is necessary in such circumstances for the Commission to avail itself of such powers at relatively short notice, because somehow vital documents frequently have a habit of disappearing if a longer period of notice is given by the Commission of its requirement to carry out those searches?
§ Lord TrefgarneMy Lords, the Council of Ministers has agreed, as I said earlier, that the Commission should have certain powers in that area. I do not believe that it exceeded its powers on that occasion, but I agree that appropriate powers are correct and proper, which of course is what the Council agreed a couple of years ago.
§ Lord AiredaleMy Lords, the allegation in the Question is that a private bank account was investigated. Has there been an investigation as to whether that allegation is true of false?
§ Lord TrefgarneMy Lords, the precise list of papers which the Commission studied is not available to me because I understand that such a list is not kept. British Airways has made no complaint that incorrect papers were studied. So far as I know, the Commission studied only those papers that it was entitled to see.
§ Lord Dean of BeswickMy Lords, are the examiners' powers restricted to the private sector or do they also have power to investigate government documents on demand? If they have that power, would it not have saved us all a great deal of trouble if they had investigated the DTI papers when the British Aerospace deal involving Rover Group was going through?
§ Lord TrefgarneMy Lords, the Department of Trade and Industry is not a party to this particular matter. Therefore the question asked by the noble Lord does not arise.
The Earl of HalsburyMy Lords, will the noble Lord tell the House whether it is the case that a European bureaucrat can enter private premises in this country without an order of the court?
§ Lord TrefgarneMy Lords, it is not quite as simple as that. As I understand it, the position is that the Commission can ask to visit premises, and if the party refuses to allow admission to the premises it is the duty of the government concerned, in this case the British Government, to make the necessary arrangements which would mean going to the court to get a writ.
Lord Bruce of DoningtonMy Lords, I apologise for pressing the noble Lord a little further on this. As regards the documents that were inspected—his department has notice of the question I am asking—is he aware that it is invariably the practice when an investigation takes place, at least if it is carried out professionally, that a list is always kept of the precise documents that are inspected?
§ Lord TrefgarneMy Lords, I believe the noble Lord is referring to some other kind of investigation. I understand that a list of the documents that were inspected was not kept on this occasion, although I understand that some of the personal documents of the noble Lord, Lord King of Wartnaby, were in the office which the Commission visited.
§ Lord John-MackieMy Lords, notwithstanding the point that my noble friend Lord Clinton-Davis made, surely the first thing the Commission should have done was to ask for the documents it wanted to inspect and not to carry out a search.
§ Lord TrefgarneMy Lords, I agree with the noble Lord. I understand that British Airways would have been perfectly willing to provide whatever documents the Commission had requested. However, the Commission chose, nonetheless, to make the visits that are the subject of this Question. That is why I said I thought the Commission had acted in a rather heavy-handed way on this occasion. However, I do not think the Commission exceeded its powers.
§ Lord Boston of FavershamMy Lords—
§ Lord DenhamMy Lords, I know that the noble Lord, Lord Boston of Faversham, wishes to ask a question. However, I hope he will forgive me if I point out that we have spent nine minutes on this Question and 25 minutes on the Questions as a whole. I think the House might feel that after the noble Lord, Lord Boston, has asked his question and my noble friend has replied, it might be time to move on.
§ Lord Boston of FavershamMy Lords, I am obliged to the Government Chief Whip. Is it not extraordinary that a list is not kept in these circumstances? How is the owner of the documents to be sure that he will receive any of them back? He is entitled to get them back.
§ Lord TrefgarneMy Lords, I do not believe that any documents were removed. They were inspected, and in certain cases I believe they were copied. However, they were not removed.