Competition Bill [H.L.]

HL Deb 25 November 1997 vol 583 cc897-932

5.3 p.m.

House again in Committee.

Clause 50 [Advice and information]:

Viscount Astor moved Amendment No. 200A: Page 25, line 16, after("practicable") insert ("and in any case not later than three months").

The noble Viscount said: In moving Amendment No. 200A, I shall speak also to Amendments Nos. 201 and 274. When one looks at Clause 50(1) the wording is: As soon as is reasonably practicable after the passing of this Act". Whenever one reads the words "reasonably practicable" in a Bill, it invariably raises one's hackles. One knows that they often mean "unreasonably" and "impracticable"—the very opposite of what they are supposed to mean. We know that, as always with these matters, the words are put in the Bill with the best of intentions but that, when a director is put in place and looks at these things, he will face problems of priorities—staffing, funding and having to agree with the Department of Trade and Industry on various matters. That seems to be rather unsatisfactory.

I tabled a probing amendment with a time limit of three months. That period is not important; it was included to obtain a reply from the Minister. My noble friends on the Front Bench, being marginally more clever than I am at tabling amendments, tabled a much better amendment in Amendment No. 201, which says, before applying the provisions of this Act". That is preferable because it means that the provisions do not come into force until the advice and information have been published. That is what we need. On a number of recent Bills before your Lordships we have had the problem of being faced with a Bill without any of the guidance or information necessary to make it work.

On an earlier amendment this afternoon the noble Lord, Lord Simon, said, if I heard him correctly, that the director would publish draft rules in the late spring or soon after a period of Royal Assent and, if that was not possible, he would look at the timetable again. If I am right, the rules must be published first and advice and information can be published afterwards.

Can the Minister say when he replies how the timetable will work and when we can see it? There is anxiety in industry that it is to be faced with a Bill which has an important effect on trade and industry but that the information to make the whole thing work may not be available. I beg to move.

Lord Kingsland

I want to speak on Amendment No. 274. I would have said something in relation to Amendment No. 201 were it not for the fact that my noble friend Lord Astor expressed himself so well in introducing the amendment that it would be superfluous for me to add anything. Amendment No. 274 is extremely important because it refers to the transitional provisions that ought or ought not to be allowed to industry and commerce before the Act bites.

The transitional period ought to be generous. If it is not, we shall not only be faced with a period of confusion and uncertainty, but it will also have a potentially costly impact on both industry and the OFT. Industry will have to protect itself by making a series of unnecessary notifications and the OFT will have to cover many eventualities which will ultimately turn out to be imaginary.

The scheme of my amendment is as follows. First, the rules of procedure should be in place; then the guidance should be in place; then any exemptions on a block basis should be in place; and then a period of a year—it may be longer or shorter—should elapse before the provisions bite. That will give everyone a chance to get themselves ready.

In addition to that—here I anticipate an amendment that will not be taken until the end of the day but that is germane to Amendment No. 274 certain classes of agreement as set out in Amendment No. 273 ought to be allowed to survive the remaining term of the agreement before the director general turns his attention to them. I listed them in Amendment No. 273 and we will come to them when we deal with that amendment. They fit in with the concept that underlies this amendment.

Baroness Nicol

I support what the noble Lord, Lord Kingsland, has just said about the need for generosity in the time allowed. What is being proposed will impose a severe burden, particularly on small businesses. Larger businesses, which may have had to meet this kind of exercise before, particularly in relation to European legislation, will be familiar with the exercise. However, it will be quite different for smaller businesses which have not had to do it before. They quite often have complicated agreements which they need to examine in detail. I hope that the Minister will look kindly on this amendment and will try to be as generous as possible with the time allowed for businesses to prepare.

Lord Simon of Highbury

I am in sympathy with what I believe to be the intention behind Amendment No. 200A and also with the general intention of Amendment No. 274. It is important that the main elements of the regime should be in place in good time before the prohibitions start to apply.

Clause 50 and these amendments deal with the preparation and publication of advice and information. I hope that Members of the Committee will forgive me if I refer to such advice and information as guidelines. That seems to be the more generally accepted term. Indeed, it is the one used in the letter from the Director General of Fair Trading that I referred to in the discussion on Clause 49. It may be helpful if I repeat my remarks made in relation to Clause 49, since we have had the break and the Statement, on the Government's proposals in this area.

First, if the Bill is granted Royal Assent, there will be a period between Royal Assent and the coming into force of the prohibitions. I would expect this period to be about one year. I would also expect rules under Clause 49 and guidelines under Clause 50 to be issued early in that period. The OFT has already begun this task and is focusing on drawing up the guidelines which will be of most interest to business. That is stated in the letter placed in the Library. The director general has committed himself to full consultation both with the other regulators and with business and practitioners on guidelines and procedural rules. The director general says that it is his firm intention to issue consultation drafts before Royal Assent where practicable. He goes on to say that he would want to concentrate on those guidelines which would be of most immediate use to business. It is essential to recognise that the guidelines will not be a single publication. They will be a developing series. The director general is focusing on getting the more important guidelines out first and getting them out in good time.

The issuing of the guidelines must necessarily allow proper time for consultation and consideration of the points raised in consultation. If, for any reason, adequate guidelines could not be issued early in the period after Royal Assent, I would expect the Government to consider very carefully the case for delaying the commencement date for prohibitions. I should perhaps add that, as a general rule, the transitional period from the Chapter I prohibition will not begin until the prohibition itself has been brought into effect. The transitional period itself will be one year for agreements generally, subject to the points in Paragraphs 9 and 10 of Schedule 13.

Accordingly, the transitional period will not in any case start until a date after the rules, advice and information are issued. On the basis of those commitments, I believe the amendment is unnecessary and I invite the noble Viscount to consider withdrawing it.

Viscount Astor

I am extremely grateful to the Minister for his constructive and helpful reply. However, there is one point I do not quite understand. I wonder whether he can enlighten me. He said, very reasonably, that if the consultation period were delayed, the Government would consider delaying commencement. What powers does the noble Lord have to do that? How will that happen under the Act? What is the mechanical process and how will it work? Perhaps the Minister will briefly explain that.

Lord Simon of Highbury

I cannot explain it now, but I shall write to the noble Viscount and explain it very carefully.

Viscount Astor

I am grateful to the noble Lord. I cannot speak for my noble friend Lord Kingsland and his amendment but I have no intention of pushing mine. We have cast some light on a rather foggy situation but more answers are certainly required from the Government. If the noble Lord is right in what he says about the process happening and the timetable he laid out, it begs the question of why my noble friend's amendment is not acceptable. However, I shall leave it for my noble friend to make that point. In the meantime, unless my noble friend wishes to intervene, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 201 not moved.]

5.15 p.m.

Lord Ezra moved Amendment No. 202:

Page 25, line 28, at end insert— ("( ) In preparing the advice and information required by this section the Director should consult interested parties including those representing industry, consumers and enforcement bodies.").

The noble Lord said: The purpose of this amendment is to ensure that, in preparing the advice and information required by this clause, the director should consult interested parties, including those representing industry, consumers and enforcement bodies. I may well get the answer that, "Of course he will do that: he would be out of his mind if he did not". Nevertheless, I would feel happier if it were on the face of the Bill.

I am particularly concerned with enforcement. One of the things that the director will have to do in this general advice and information is to include the details on the enforcement of these prohibitions. The enforcement of anti-competitive measures has tended to be very much not only in the hands of the OFT but also in the hands of the trading standards officers. Both the noble Lord, Lord Borne, and I have been closely involved in the work of the Institute of Trading Standards Administration. There is also a body called LACOTS, the local authorities' co-ordinating body on trading standards, which was set up in 1978 to try to get some co-ordination in the way in which enforcement in this area is carried out.

The problem that the Bill raises in the matter of enforcement is that there are so many enforcement authorities. There is the OFT itself, there are the regulators in the utilities and there are the various layers of local government which have their own trading standards officers. Therefore, it seems to be highly desirable that there should be some attempt at co-ordination in this area of enforcement. In my opinion, that could best be achieved if the director had, as a matter of course, to be in regular consultation, particularly for the purposes of this clause, with the enforcement organisations.

I very much hope that the Government will see fit to accept this modest amendment. I beg to move.

Lord Kingsland

Two other amendments have been joined to this amendment—Amendments Nos. 204 and 205. I have nothing to add to what the noble Lord, Lord Ezra, said.

Lord Borrie

Perhaps I may associate myself with the remarks of the noble Lord, Lord Ezra, as he mentioned my name. I had the honour to succeed him as president of the Institute of Trading Standards Administration, a post which I gave up last year, to be succeeded in turn by the noble Baroness, Lady Wilcox. So three political parties have represented it and all of us highly value its work.

As a result of this Bill the Office of Fair Trading does not have, and will not have, any local or regional resources of any kind. Therefore, when it comes to enforcement it may be no more than information or quite a lot more in terms of identifying what has taken place in respect of local cartels or anti-competitive practices. It will be reliant on local officials who are trading standards officers. I specially mention that point although I anticipate, like the noble Lord, Lord Ezra, that since the director general will do all sensible things in the way of consultation, there is a degree to which this amendment is not absolutely essential.

Lord Simon of Highbury

I feel a certain force in the directions from which the amendments are being supported. This is perhaps the first time that I have felt a 360 degree force on a matter. However, at this stage the director general's letter, to which I have already referred, helpfully addresses a number of the issues raised by these amendments. I recognise the points made by the noble Lord, Lord Ezra, and by my noble friend Lord Borne in terms of the real value that representative organisations have and place into the arena of consultation.

Effectively, Amendments Nos. 202, 204 and the new subsection (9) of Amendment No. 205 would require the director, in preparing guidelines, to consult interested parties. In his letter the director general says that it is vital to get the guidelines right and that this can only be achieved by thorough and timely consultation with industry representatives and practitioners. He also says that he intends to place the consultation drafts in the Libraries of both Houses as soon as they are ready. The director general has committed himself to full consultation. So I do not believe that there is no need for a provision in the Bill to require it.

The first part of Amendment No. 205 would require regulators to consult the director general and to ensure that their guidelines do not conflict with his. The DGFT in his letter refers to the joint working arrangements with regulators for the production of guidelines. A joint working party of the Office of Fair Trading and regulators, chaired by OFT, is being set up and will establish a programme. Clause 50(7) of the Bill already requires a regulator to consult the director general as well as other regulators in the preparation of guidelines. I believe that the joint working arrangements are a better way to proceed than any further formal requirements in the Bill.

The last part of Amendment No. 205 would enable the Secretary of State to make an order requiring guidelines to be treated as if they were rules made under Clause 49. I do not agree with that. What is appropriate for procedural rules will not be appropriate for what the director general describes as, interpretation by the sector regulators and myself of the legislation and associated jurisprudence". He also rightly says that guidelines do not have legal effect or determine the scope of what is prohibited. They need to evolve and change over time, to reflect case law and developments in EC jurisprudence. This sort of evolution is not consistent with an order-making process. Indeed, any attempt to give legal force to guidelines might risk the UK prohibitions getting out of step with EC case law, with a consequent increase in burdens on business.

Despite the 360 degree pressure that I felt coming across the Chamber, I hope that with these explanations and particularly with the director general's helpful assurances, the noble Lord will be willing to withdraw the amendments.

Lord Ezra

I am most grateful to the noble Lord, Lord Simon, for that answer and also for drawing our attention to the director general's letter. However, as regards his quotation from the letter, although there was reference to the intention of the director general to consult with industry and practitioners—I believe that those were the words used—there was no reference to enforcement agencies. I hope that that omission will be repaired and that the director general will feel a special responsibility for being in touch with the two bodies that I mentioned; namely, ITSA and LACOTS. They are the co-ordinating bodies for local enforcement agencies upon which, as the noble Lord, Lord Borne, pointed out, the director general will be dependent for local enforcement as he will be unable to carry it out himself. Can I have an assurance that that will be so? If I can have that assurance, I shall be very happy to withdraw the amendment.

Lord Simon of Highbury

I shall take the noble Lord's suggestions back to the working party and the director general for their consideration.

Lord Ezra

I thank the noble Lord. With that assurance I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness O'Cathain moved Amendment No. 203:

Page 25, line 28, at end insert— ("( ) In preparing general advice and information in accordance with this section, the Director shall, notwithstanding the exclusion of any cases pursuant to sections 4 and 20, take into account the effect of vertical restraints on competition on the relevant market, in particular where suppliers independently or collectively have significant market power.").

The noble Baroness said: I need to declare an interest in that I am a director of Tesco. The amendment applies not only to that company because it is very wide-ranging. In fact, it is supported by the National Consumer Council.

In moving the amendment, I greatly welcome the provisions of Clause 50 which require the director to prepare and publish general advice and information about the prohibitions. It is imperative that business is provided with certainty and this can only be enhanced by clear, authoritative and early guidance from the director on the interpretation of the prohibitions.

It is worth noting that the widely recognised Dobson and Waterson Report on vertical restraints and competition policy, which was commissioned by the OFT, contained detailed economic analysis of effects on the market. I would commend this report to the director when he in turn is giving guidance.

While recognising the generality of the provisions of Clause 50, I believe that the director should be specifically required to have direct regard to the economic effect on the market of these agreements. That would be particularly valuable to the director when considering the effect of selective distribution arrangements and in exercising his right to vary, remove or cancel parallel exemptions under the provisions of Clause 10(5).

Is the Minister satisfied that the prohibitions within the Bill enable the director to deal effectively with selective distribution arrangements that act contrary to the consumer interest? I suppose that he will say yes. If that is so, does the Minister accept that the time and cost of pursuing such a claim, without clear guidance, could be extremely damaging to business, particularly to small and medium-sized enterprises? I fear that this is a replay of my old record about costly burdens.

While acknowledging that certain selective distribution arrangements may result in a consumer benefit in those product sectors where technical or specialist sales advice or after service are required—that has been referred to already in discussions in Committee on this Bill—does the Minister agree that where those agreements are concerned only with the preservation of "image", or "allure" as I referred to it on the first day of Committee on 13th November, they are, in reality, acting contrary to the consumer interest? I beg to move.

Lord Haskel

We have already had many discussions on the subject of selective distribution agreements and on vertical agreements generally. We had such discussions on the first day of Committee stage. I believe that the noble Baroness is trying to ask how advice and information from the director might bear on the issue of vertical agreements. I think that that is the point of the amendment.

Baroness O'Cathain

I thank the noble Lord for giving way. The amendment seeks to ensure that we take account of the economic effect. That is very important.

5.30 p.m.

Lord Haskel

I thank the noble Baroness for that elucidation. We have said that we hope to exclude vertical agreements from the scope of the Chapter I prohibitions. We will only be doing this, however, on the basis that any harmful competition problems associated with them can be considered under the Chapter II prohibition or the Fair Trading Act. As my noble friend Lord Simon explained on the first day of Committee: A refusal by a dominant supplier to supply certain outlets, a problem sometimes associated with selective distribution agreements, would, if found to be abusive, remain subject to the Chapter II prohibition. Equally, I am advised that there is EC jurisprudence that differential pricing by dominant firms which is abusive may be tackled under Article 86 … such jurisprudence will apply in the interpretation of the Chapter II prohibition as a result of Clause58".—[Official Report, 13/11/97; col. 284.] We are confident, therefore, that the problems the noble Baroness has described would be dealt with under the Chapter II prohibition. In framing his advice and information in respect of the Chapter II prohibition, I have no doubt that the director will be covering the definition of relevant markets and how market power may effectively be exercised, whether independently or collectively, both issues having been raised by the noble Baroness. In view of these assurances and our earlier discussions, I hope that the noble Baroness feels that we have her concerns very much in mind and that she will feel able to withdraw her amendment.

Baroness O'Cathain

I am glad that the Minister has these concerns very much in mind, but quoting the continental European experience has not benefited us in terms of this problem. The European Commission has allowed special exemptions to the competition rules for both Yves St. Laurent and Givenchy in respect of fine fragrances despite the fact that those agreements can impact on price competition between retailers. That happens to be a fact. The Commission has not come down strongly enough. I suppose that I am trying to make our competition legislation stronger than the European legislation because, although the European legislation looks strong, it is not being supported.

There are issues at stake which militate against consumers. I shall not run through again all the arguments that I have put previously, but this is a question of the economic effect. I can see no evidence to date that competition authorities are having serious regard to the economic effect and I honestly feel that there would be advantages in the director being specifically directed to have regard to the economic effect, hence this amendment. Does the noble Lord wish to reply? As he does not, I shall read in Hansard what has been said, but I must alert the noble Lord to the fact that I shall return to this matter at a later stage if I feel that the point has not been properly covered. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 204 and 205 not moved.]

Clause 50 agreed to.

Lord Fraser of Carmyllie moved Amendment No. 205A:

After Clause 50, insert the following new clause—

RELEVANT TRIBUNAL TO HAVE REGARD TO RULES OR GUIDANCE BY DIRECTOR

(" .—(1) In determining any matter under this Act a relevant tribunal shall take account of any—

1. (a) rule made by the Director under section 49; or
2. (b) advice or information prepared and published by the Director in accordance with section 50.

(2) For the purposes of this section "relevant tribunal" means any court or the Competition Commission Appeals Tribunal.").

The noble and learned Lord said: This is essentially a probing amendment. It may be that the noble Lord, Lord Simon, in answering the Committee on Amendments Nos. 202, 204 and 205 has at least partially answered my concerns, but it would nevertheless be helpful to know from the Government just what status there would be in legal proceedings attaching to rules made by the director under Clause 49. I doubt whether there is much difficulty about the rules. In Clause 50 I would prefer to use the language of the Bill, which is "advice and information" rather than "guidelines". We are keen to discover also what legal status, if any, such published advice and information might have in any subsequent legal proceedings either before the appeal tribunal of the competition commission or any other court.

The purpose of the amendment is to introduce an express requirement on the relevant tribunal to take into account such rules or advice and information when determining matters before it. Accordingly, I should be grateful if the Government could spell out exactly what they intend if such legal proceedings should occur and if such rules, advice and information are before the court. I beg to move.

Lord Haskel

As the noble and learned Lord said, Amendment No. 205A returns to the issue of the status of the rules made by the director under Clause 49, and of the information and advice issued by the director under Clause 50. Perhaps I may deal first with the question of the director's information and advice and then with the tribunal. We have already discussed the reasons for not giving legal force to his general advice, and I will not restate them here. However, if I am correct, the purpose of this amendment appears to be only that the tribunal and the courts should "take account of" this information and advice, and not that they should be bound by it.

I entirely agree that the appeal tribunal and the courts should have to take account of the general information and advice issued by the director, when assessing cases. However, I am advised that this is the position under the Bill as it already stands. The director's views, as expressed in his general advice, would have considerable persuasive effect in the tribunal and the courts. This being the case, it would be unhelpful to make express provision in the Bill. Such a provision would only beg the question as to the intention behind the provision, over and above what the Bill would do anyway.

I turn now to the question of the procedural rules issued by the director. It is already the case under the Bill that the tribunal or the courts would be able to overturn a decision of the director on the grounds that he had failed to follow the rules, if that failure was material to the decision.

Turning to the question of the tribunal, the tribunal and the courts would be expected to take account of the information and advice issued by the director under Clause 50. Moreover, the tribunal or the courts must have regard to the guidance issued by the director under Clause 37 on the appropriate level of penalty. We would expect such guidance to say that if a firm had been acting in accordance with the general advice issued by the director under Clause 50, little or no penalty should be imposed on it, even if it is eventually found to have infringed one of the prohibitions. I hope that that explanation satisfies the noble and learned Lord and that he will be prepared to withdraw his amendment.

Lord Fraser of Carmyllie

I shall certainly seek to withdraw my amendment. However, the answer just provided by the noble Lord invites a further amendment when the matter gets to Report stage. I had not appreciated before that guidance was used in some parts of the Bill and advice and information was used in others. Perhaps at a later date one might usefully probe the fine distinction to be drawn between the activities of the director in providing guidance on the one hand and advice and information on the other. I am grateful to the noble Lord. He will appreciate that this is a matter to be taken into account. Some concerns have been expressed to us on this matter and it is as well to understand and have on the record what the Government propose to do in the Bill. With those remarks, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 51 [Fees]:

On Question, Whether Clause 51 shall stand part of the Bill?

Lord Borrie

I should like to ask a question on Clause 51 which is not subject to any amendments. My question is concerned with fees. Can the Minister say how fees will affect firms of different sizes and whether the size of the fees will reflect ability to pay?

Lord Haskel

The question of any fees under Clause 51 relating to a person's ability to pay has been put to us by the Competition Law Association. We are considering whether the power in the clause might be broadened, in particular to allow different charges to be set for different persons, for example relating to their turnover. This matter is under consideration.

Clause 51 agreed to.

5.45 p.m.

Clause 52 [Regulators]:

Lord Ezra moved Amendment No. 206: Page 26, line 6, leave out from ("10") to end of line 7 and insert ("makes consequential provision in relation to the functions of regulators.").

The noble Lord said: We come to the important question of the concurrent exercise of functions under the Bill by the utility regulators. The essential amendment is Amendment No. 206. A rather impressive array of amendments is grouped with it but all of them are consequential amendments in Schedule 10. The key amendment is Amendment No. 206. The purpose of this amendment is to ensure that the functions of the director general under the Bill are not exercised concurrently by the seven sectoral regulators referred to in Paragraph 1 of Schedule 10. The effect of these amendments is to separate the statutory regimes for the regulation of water, electricity, gas, rail and telecommunications from the new competition law introduced by the Bill. The amendments would not affect the substantive provisions in the Bill.

There are three main reasons for these amendments. First, there is a need to promote consistency and avoid overlapping jurisdictions. With eight different UK authorities exercising jurisdiction under the Bill there would undoubtedly be a risk of inconsistent interpretations and applications of the Chapters I and II prohibitions. The likelihood of overlapping jurisdictions would cause not only inconsistency but also uncertainty and possible conflict.

Secondly, the Government are now conducting a review of legislation. Their conclusions are unlikely to be published before the early part of next year. A consultation period will follow and important changes in the regulatory system may ensue. It would surely not be desirable to give regulators within the existing regime additional powers under the Competition Bill until the regulatory system had been clarified by this review.

Thirdly, there is the question of conglomerates. With the opening up of the utilities market a number of companies cover more than one sector. For example, there are companies that now cover electricity, gas and water. It is quite possible that they will also cover telecommunications and railways. The emergence of these conglomerates can well raise questions about which particular regulator should act in connection with the Competition Bill. It may well be that the competitive problem will stray over the boundaries of one sector into the areas of one or more other sectors. How do they set about deciding who should deal with it? Do they just have an informal lunch and decide that A, B or C should take it on? Do they deal with it jointly or promptly hand it back to where I believe it should belong anyway—the Director General of Fair Trading? Clearly, this uncertainty, which I believe will grow as time goes on with the evolution of the market, would be avoided if the amendment proposed were agreed to.

If the director general were given this authority—which I believe properly belongs to him—he would necessarily consult the regulators when it was appropriate. If a conglomerate was being dealt with he would consult more than one regulator. I suggest that this is an amendment that will improve the effectiveness of the Bill and take account of the realities of the evolving market place. I beg to move.

Lord Desai

Although my name does not appear on the face of this amendment I rise to support it. During Second Reading I said that sooner or later in the competition field we would need an overarching structure. I drew an analogy with the FSA. For a while we messed about with SROs in different parts of the City. We finally found that overlapping jurisdiction and other matters required us to go for an overarching structure. I know that that analogy is not exact, but I believe that we are entering the same kind of phase in the Competition Bill.

The amendment in the name of the noble Lords, Lord Ezra, Lord Kingsland and Lord St. John of Bletso, is not a positive accumulation of power. It is being said that we should sort it out nicely at the initial stage of the Competition Bill so that we do not have a problem in the future. I believe that from that point of view it is very desirable because it introduces an element of co-ordination and avoids overlap. But, given the pace of technological innovation in this field. sectoral boundaries are bound to become very peculiar indeed. One will have conglomerates, changing technologies and many more overlaps. If the Government are minded to accept this amendment it will make life in future much easier; otherwise, they will have to introduce more primary legislation at a later stage in this Parliament, which would not be a good thing.

Lord Mottistone

I am very concerned about another aspect—the telecommunications field. Together with other noble Lords, I was very much involved in the passing of the Telecommunications Act 1984. My concern then was that it did not go far enough in ensuring that British Telecom was properly competitive. I found it strange that 3 per cent. of the market which was specifically provided for Mercury had such a far-reaching effect. Indeed, it changed British Telecom from one of the doziest public affairs into a quite competent—but not yet competent enough—telecommunications business.

I am concerned about all of the amendments linked with Amendment No. 206, those linked with Amendment No. 207 and many others in this part of the Bill. I understand the arguments put by the noble Lord, Lord Ezra. Perhaps this is something to which the Government should give very careful thought. I suspect that they have done so already in that they have endeavoured to draft the Bill so that it goes as far as it can at this stage in this particular area. It will take time for this new legislation to take full effect. It is important to realise that it would be exceptionally dangerous if the regulators' powers were diminished, particularly as a result of the amendment of the noble Lord, Lord Ezra, Amendment No. 210, which strikes at the very powers of Oftel.

We should not arrive at a situation where British Telecom could happily say: "We are the experts in this field; we do not have a regulator with any powers left; we know our subject, and the Office of Fair Trading will listen to us because we are the only experts". I detect that that kind of feeling will arise if these groups of amendments are accepted by the Government. Therefore I hope that the noble Lords will withdraw their amendments and think again about how important the regulators are at this moment. That is the point.

There may come a time when they will not be necessary. Amendment No. 211 talks about powers existing until 2001. That is four years away. In 2001 we shall see whether the regulators have too much power, and that will be the time for further legislation to restrain them, if necessary. Now is not the time and I hope that the amendments will not see their way onto the statute book.

Lord St. John of Bletso

A recurring theme in several amendments, and one which was emphasised by the noble Lord, Lord Ezra, is that legal certainty is essential and that those applying the law must do so in a consistent fashion. The prohibitions in the Bill contain wide discretions and it is vital that those discretions are applied consistently. That is why Clause 58, the general principles clause importing European jurisprudence, is very important.

That, however, does not solve the problem. In our deliberations on Clause 50, on guidelines, we heard it suggested that neither will remove the problem. For those reasons, I am concerned that Schedule 10 gives powers of adjudication to sectoral regulators in addition to the courts and the DGFT.

The problem is compounded by the fact that Schedule 10 makes the objectives of the sectoral regulators matters to which they may have regard when they apply the regulations. That statement departs from the European approach, where competition policy is centralised in DGIV.

Those features of the Bill will mean more uncertainty and inconsistency rather than less. Even if the Minister demonstrates a case for complexity and duplication in the utility sectors, I do not believe that such a case should be brought in the information technology field. I and several other noble Lords at Second Reading stressed that the communications, computing and broadcasting industries are of vital importance to the economy and to international transactions. The right body to apply competition law in this field is the United Kingdom's national competition authority and not a regulator of a particular sector. For those reasons, I support the amendment.

Lord Borrie

The noble Lord, Lord Ezra, made a powerful case, particularly on consistency, for there being one regulator, the Director General of Fair Trading, instead of eight regulators, to exercise significant powers with important penalties attached to the prohibitions.

At Second Reading I drew attention to one important area of competition policy which is not covered by the Bill, namely mergers and takeovers, where consistency is achieved by the Director General of Fair Trading being the sole channel through which advice is given to the Secretary of State for Trade and Industry for making references to the Monopolies and Mergers Commission. If a problem arises relating to a merger or takeover in the field of water, telecommunications or mixed utilities, then the different regulators express their points of view. Those views are encouraged and welcomed by the Director General of Fair Trading, they are fed in to the process of advice and, if the Secretary of State agrees, there is a reference to the Monopolies and Mergers Commission. That is a very strong case.

We want to achieve consistency not only with actions but also with advice and guidelines. I have had a few more days than your Lordships to think about the letter that was quoted by the Minister today because it was referred to at a conference that I attended last week on the subject of the Competition Bill. I was impressed by the fact that the Office of Fair Trading is already engaged, through a working party, in consultation and discussions with the other regulators to try to achieve consistency now in terms of advice and information. There will therefore be no lack of consistency.

The other arguments put forward by the noble Lord, Lord Ezra, were also strong. There are now multi-utility conglomerates. We already have a problem when there are several different utility regulators, let alone the Office of Fair Trading, concerned with companies like United Utilities and HYDER.

I do not think that I can support the amendment because, like the noble Lord, Lord Mottistone, I feel that the noble Lord, Lord Ezra, is before his time. We do not yet have the report, let alone the outcome, of the Government's review of the utilities.

Since Second Reading I have thought about whether we should wipe out all other regulators in terms of their having any powers under the Bill or allow them to have concurrent powers which are subject to the review, and, in the light of that, for reasons of conglomeracy and other reasons that have been argued, whether some of those regulators should be merged. It might be desirable to reduce the number of different regulators. All the Bill does is to preserve the status quo until the review of the utilities is completed. If the Minister can say that the Government reserve the right to revise and amend what will be in the Competition Act 1998 in the light of the utilities review, I would be satisfied if the specific regulators were to retain concurrent jurisdiction in these matters. They have concurrent jurisdiction under the existing law on competition policy matters apart from mergers. I would prefer that course rather than to go along with the view of the noble Lord, Lord Ezra, that the Bill should bring all of these powers into the hands of the Director General of Fair Trading.

6 p.m.

Lord Fraser of Carmyllie

Although my name is not attached to the amendment, I associate myself with the remarks of the noble Lord, Lord Ezra. As he said, this is an important group of amendments. It relates to one of the central themes within the Bill which, I have no doubt, for the public good we must resolve as best we can. Having said that. I am hound to say that I agree in large measure with the noble Lord, Lord Borrie. It is difficult to reach a settled view about overlap or concurrence when we do not know what will be the outcome of the utility review. In such circumstances, I would not be inviting the noble Lord to take the mood of the Committee on the amendment, but that does not make it any the less important.

As the noble Lord rightly pointed out, we are seeing almost on a daily basis a greater and greater involvement of a number of conglomerate companies across a wide range of utility activity. If that is the case, there may be problems in trying to determine who should or should not undertake the necessary investigations and do the necessary work. If these matters are to be settled over lunch, I have no doubt that it would have to be a table for more than two if we look at the way that things are now developing.

At the same time, I am conscious that there are powerful, effective and formidable regulators who are confident that, as things are proposed in the Bill, there is such a scheme that there would not be problems. From time to time I regard myself as courageous, but I do not cross swords with Clare Spottiswoode in any foolhardy fashion. She has indicated that she is satisfied with the powers that she has and is confident that in the way the scheme is settled there will be no risk of double jeopardy or duplication.

There is a question I should like to ask the Minister which stems from my correspondence with Clare Spottiswoode. She states: Concurrent powers will not lead to the Director General of Fair Trading and the DGGS both taking action under the new legislation in relation to the same conduct because the Gas Act will specifically require them not to do so and to consult before exercising their concurrent powers". I shall take her word for it that such powers exist under the Gas Act, but what I do not know—I should he grateful for an answer—is whether in all the other statutes establishing such regulators in particular sectoral utilities there is the same power.

There is not just that problem. Even were I to be wholly satisfied that between the director general and the regulators there was no such problem, part of the scheme of the Bill is again to give powerful rights to third parties. That still troubles me. We started on this debate on Second Reading. Even if a satisfactory agreement is arrived at between the regulator and the director general as to who should take the matter forward, that would seem not to be an end to the matter because third parties could intervene. I should again be grateful if the Minister could give some explanation and contradict me on that or, if I have understood it correctly, acknowledge that that is indeed a complication in the scheme of things.

I do not follow my noble friend Lord Mottistone into the world of telecommunications because, as he correctly identified, there are subsequent amendments which deal with telecommunications. For the reasons others have given, I believe that telecommunications should be dealt with separately. With the way telecommunications have expanded, it is difficult to see how having just one regulator attempting to deal with all that might be described as telecommunications remains as valid as it was when Oftel was first set up. I should be grateful to the Minister if he would reply on that point. I should like to return to this matter at some later stage, and acknowledge that because of the expected utility review, the publication of which I hope we shall still see in January before we reach Report stage, this is not something that we could hope to settle this evening.

Lord Desai

I should like to ask a question on what the noble and learned Lord, Lord Fraser, and my noble friend Lord Borne have said. They know much more about practical things than I do. It seems to me that we are being told that the time is not right. But that we should not worry because it soon will be because the utility review will be published. Given all that we have said about the pace of technological change and the overlap, the balance of probabilities suggests to me that the review will more or less come to the conclusion to which we are now coming. For once a little foresight will not hurt in the area of legislation, because with the previous government every year we had either an education Bill or a crime Bill to obviate the mistakes of an earlier Bill.

I want to ask my noble friend the Minister, my noble friend Lord Borrie and the noble and learned Lord whether it is not now time to anticipate future developments a little, give the amendment a fair wind and save ourselves a great deal of time.

Lord Fraser of Carmyllie

Perhaps I may say to the noble Lord, Lord Desai, that if I anticipated that the utility review was going to drift away from a January publication date and disappear into the middle of the year, or later, I should have greater sympathy with him. It is a constructive approach to say at the end of November that we are at least prepared to see what comes out of such a review, although I agree with him, especially in the area of telecommunications, that I have grave doubts whether it is possible to so define the activity that we can see Oftel continuing to regulate indefinitely. Indeed that is why we have what might be described as the "sunset" clause in Amendment No. 211.

Lord Skelmersdale

I rather feel today as though the scales have been lifted from my eyes, not so much as a result of this debate but because I am no longer an adviser to BG plc. That means that I can contribute on these subjects in a fuller and less inhibited way than I have been doing in recent months, if not years. It occurs to me that there is another reason to wait for the review; that is, there is another mischief which has not been mentioned in the debate so far today, although I believe that it was mentioned in my absence on Second Reading. It is that where under the current legislation a reference is made as a result of a disagreement between the regulator and the utility to the MMC, and it makes its decision, writes its report and we all see it, on occasion the regulator can virtually ignore that report, as happened in the cases of Transco and Northern Ireland Electricity. I accept that that has nothing to do with the Bill, but it is a good reason for delaying the subject until after the review when all these matters can be wrapped up together.

Lord Simon of Highbury

We have certainly had a wide enough debate for this to be considered to be a most important part of the Bill. I agree with that. For that reason, I really do not wish to leave doubts in people's mind at this stage.

This group of amendments would remove from the Bill the provisions for the sectoral regulators—telecoms, water, electricity, rail and gas—to apply and enforce the prohibitions concurrently with the Director General of Fair Trading. Let us be quite clear on the purpose.

Let us be clear also that that would represent a major change from the established policy, adopted under the previous Administration, that sectoral regulators should be able to exercise functions concurrently with the Director General of Fair Trading under general competition law. In the Government's considered view, it would be quite inappropriate to use the present Bill—dealing with the general competition framework—to make such a major change to the arrangements for sectoral regulation, least of all while the Government are engaged in a general review of utility regulation, as many Members of the Committee have commented.

I should like to confirm to the noble and learned Lord, Lord, Lord Fraser, as I did in a previous reply to him, that we expect the review to be available early in the new year. Perhaps that is a slightly wider definition of "winter scope" than he would wish at this stage, but that is consistent with my earlier advice.

This subject is sufficiently important for me to set out a little more background about the issue of general competition. Whatever the merits of the original privatisations and their structures, strong sector regulation has played a major part in securing consumer benefits in the regulated sectors. That has been possible only because the sectoral regulators have had the powers they need to do the job: to regulate in order to protect the consumer now; and, where feasible, to promote competition in order to protect the consumer in the future. It is implicitly recognised in the privatisation statutes through a duty on the sectoral regulators to promote or facilitate competition. That is the general issue.

Consequently, there is no clear distinction between sectoral regulation and the promotion of competition in those sectors. The one merges seamlessly into the other and the sectoral regulators are drawn inevitably into competition issues. That is reflected in the regulators' responsibilities to enforce certain licence conditions which are aimed at market power issues. For example, there are licence conditions concerning price caps and prohibiting undue discrimination.

It is reflected also in the concurrent functions conferred on the sectoral regulators under certain aspects of general competition law; namely, the monopoly provisions of the Fair Trading Act 1973 and the provisions of the Competition Act 1980 which relate to the control of anti-competitive practices which this Bill repeals. Clarity about the responsibility for applying the legislation in the sectors—ensuring no regulatory gap or overlap—has been achieved through bilateral "concordats" or understandings between most of the sectoral regulators and the Director General of Fair Trading, by which the sectoral regulators are responsible for the application of the relevant provisions of general competition law within their own sectors.

In the Government's view, and that of the regulators, the availability of those powers has been an important fall-back which has added to the credibility and therefore to the effectiveness of the regulators. One remembers the example of President Teddy Roosevelt who extolled the virtues of speaking softly while carrying a big stick. Indeed, that may have been the impression which the noble and learned Lord, Lord Fraser, had of Clare Spottiswoode. He did not use those words but she does indeed speak softly. The sectoral regulators' general competition functions are indeed a stick without which they would be severely hampered.

Let us now deal with the question of consistency. I would echo many of the statements made by Members of the Committee that consistency is important in the issue. It is part of the debate when it is asked why we cannot achieve more consistency by lumping everything together and having one person involved. That may indeed be—I hate to say it—the nirvana of the noble Lord, Lord Desai. We may reach the position of having an over-arching great power which is all-seeing and all-powerful; but we are not there yet. These are dynamic and changing markets. I never hesitate to remind the Committee that I have come lately from a field in which I was able to observe those markets developing in extraordinary ways. In my view, to try to have an overarching capacity to master all those specialties in one fell swoop is not credible yet. One day I may stand at this Dispatch Box, if I am a lucky and privileged man, and be able to say that an overarching structure is desirable, but I do not see it yet.

But in terms of the ability to promote an answer to questions on consistency, I say to the Committee that there is already a systematic body of law with which the regulators must ensure that they do not act inconsistently. Consistency in the applications of the prohibitions by regulators is thus built in from the outset. It will be supported by a single set of procedural rules to be drawn up by the director general and by a process for the director general and the sectoral regulators to work together. As my noble friend Lord Borrie has already emphasised, they are already setting up the working group. In developing advice and information about the application and enforcement of the prohibitions, we shall gain more insight into the developing capacity to achieve consistency. The tribunal will also have an important role as all appeals from directors and regulators' decisions will end up there.

In saying that there will be consultation between the regulators and the director general on cases where concurrency is an issue, I do not believe that I am minimising the importance of the informal debate. It may not be a lunch or dinner table; indeed, it may be something as boring as a meeting room. But there must be an informal capacity for concurrency to be dealt with. As has already been intimated by the noble and learned Lord, Lord Fraser of Carmyllie, there is already a requirement under each of the utility statutes that there must be only one way to apply and follow-up a dispute. There cannot be overlap and two cases running at the same time. The noble and learned Lord pointed out that that was the case in the gas regime. It is true of all regimes. That is a protection.

Furthermore, I have already indicated (on 17th November at col. 415 of the Official Report) that I would reflect on whether an amendment to the Bill may be needed to provide flexibility for a regulator and the director general to work together on investigations where both agree that that would be helpful. I very much take the point made by the noble Lord, Lord Ezra, about the widening of the scope of companies where two or three utility sectors may be in the ownership, in some form, of one company structure—a conglomerate of utilities. I do not believe that the Bill would rule out action by the director general, no doubt in the light of agreement between the director general and the regulator or regulators concerned that action would be taken at the level of the director general rather than of one of the utility regulators or three of the utility regulators. There is nothing in the Bill which would prevent the process of informal consultation.

Therefore, in the developing process of consistency, by way of advice, procedures and rules, I believe that we will understand better how there is a development of the ability of the director general and the sectoral regulators both to co-ordinate their capacities to understand and, at the same time, their individual ability to act. As I said, there is already a great deal in the body of the law to ensure that they do not act inconsistently.

I move on now to the point made by the noble Lord, Lord Mottistone. I very much agree that in some sectors—the telecommunications sector in particular—it is absolutely vital, given the structure of the market, that we do not hamper the capacity of the director general and of the telecommunications regulators to ensure that competition is still in place and developing. It needs a great deal of care.

In general, when talking about the role of the regulators in relation to the concurrency debate, there has been wide acceptance of the fact that there should be a continuation of the expertise and no blurring of the lines which currently exist. However, if I may say so, it has not been an issue in many of the sectors where we have had a response, but it has certainly been an issue in the telecommunications sector. That is why I wish to underline the remarks made by the noble Lord, Lord Mottistone. I believe that it is instructive to quote the words of a respondent that we have had from within the telecommunications industry: The principle of concurrency should he supported. It is likely to he opposed only by those who have a strong interest in weakening rather than strengthening competition law". That is specifically in the telecommunications sector, which is probably less balanced in competitive terms than some of the other markets given the dynamic of the general market place.

Against a very clear background, I have tried to reflect on what I believe is the rather too accelerated view of how we can develop the capacity to protect competition and, at the same time, develop a different structure of regulatory powers to protect consumers in the market place. There are many interesting ideas of where we may go in the future. However, my basic response to the noble Lord, Lord Ezra, is that the ideas are premature bearing in mind the state of the developing markets.

There are two central points that I commend to Members of the Committee. First, not conferring concurrent functions in relation to the prohibitions would be a major policy change which would inevitably weaken the roles of the sectoral regulators at this time. Secondly, conferring concurrent functions would enable the sectoral regulators' specialist expertise and knowledge of their sectors to be directly tapped as the key asset in applying the prohibitions leading at this stage to a better quality of sectoral regulation all round.

I therefore submit that this is not the time or indeed, if I may say so, the Bill to make a major reduction to the sectoral regulators' functions, least of all while the Government are reviewing the whole area. Irrespective of the timing of the utility review, I do not believe that it would be wise to prejudge the issues that that review will bring forward. There will be a time when we will debate the matter further. However, on the basis of my two submissions and for the reasons I have given, I invite the noble Lord to withdraw his amendment.

Lord Ezra

I should like to thank all noble Lords who have participated in the discussion. I believe that each contribution has been most important. We have covered different angles of the issue and it is clearly an essential part of the Bill. While I am most grateful to the noble Lord, Lord Desai, for his very firm support, which I welcome—indeed, I only wish that the Government were swayed by it—I gain the impression that the feeling is that, while this could come, this might not be the right time. The question that then arises is: when will the right time be? Will it be when the Government's eagerly waited review of the regulatory system is completed and has been discussed? Am I to take it that we shall then return to the issue? Is it the Government's intention to reconsider the whole question of concurrent jurisdiction in the light of the conclusions which will be reached in that review? If that is so. I am happy to wait until then, assuming that it will be sometime next year. That means that we will return to the matter.

Regrettably, the weakest part of the Minister's response was where he dealt with the conglomerate situation. He said that no doubt they would all get together and that, possibly, they could leave it to the director general to deal with. That immediately injects an area of uncertainty. If I were the chairman of one of those conglomerates—and I rush to point out that I am not—I would be in a state of grave uncertainty as to whom I should be dealing with in such matters.

Let us assume that I am covering all the utility sectors—indeed, that is perfectly conceivable—the lines and the operations are being merged, gas and electricity are indistinguishable in my operations, and railways are coming into it, with telecommunications overarching the whole lot. I would be in difficulty as regards knowing to whom I should turn for advice, let alone knowing who would finally decide whether or not I was contravening the legislation. I find that a rather unsatisfactory situation.

When this particular section of the Bill was drawn up, it does not seem to me that sufficient attention was paid to the way in which the market is developing. I have but two thoughts in my mind. The first is that I gain the impression that we shall return to the matter when the review is complete; and, secondly, I feel grave concern as to how the developing number of conglomerate companies will be dealt with. However, this is not the time to be pressing Members of the Committee for a decision on the matter. We have had an extremely useful debate. I shall reflect carefully on everything that has been said, while leaving those two thoughts in the mind of the noble Lord, Lord Simon. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Ezra moved Amendment No. 207:

Page 26, line 7, at end insert— ("(1A) When exercising the functions under this Part which a regulator has concurrently with the Director, the regulator shall consult and follow the advice of the Director in order to ensure consistency in the application of this Part.").

The noble Lord said: The amendment brings us back to the question in a different way. Whereas the amendment that we have just debated proposed that there should not be concurrent jurisdiction, Amendment No. 207 assumes that there will be such jurisdiction but suggests that the risk of overlap could be overcome by requiring the regulators on the face of the Bill to consult and follow the advice of the director general when exercising their functions under the legislation. The director general would thereby take a leading role which would ensure consistency in the application of the legislation. The obligation to consult and to follow the advice of the director general would also apply when the regulators exercise their functions under monopoly provisions of the Fair Trading Act 1973.

I hope that even though the Government were not prepared to accept a more far-reaching proposal in Amendment No. 206, they will, in the interests of trying to avoid overlap—which they say they want to avoid—accept the less far-reaching proposal in Amendment No. 207. I beg to move.

6.30 p.m.

Lord Mottistone

I trust that the Government will resist this amendment with the same strength as they did the previous amendment because it seems to me that it just says the same thing all over again and weakens the power of the regulators at the wrong time.

Lord Simon of Highbury

I find it difficult to resist the urge to be brief that was revealed in the statement of the noble Lord, Lord Mottistone. I shall not resist it. I feel that I have made the arguments before. We think that overlap is inevitable. Indeed it may be helpful under certain circumstances. Therefore we do not believe that the amendments are necessary in the light of the arguments that I made with regard to the previous amendments.

Lord Ezra

This is all part of the same debate. I shall take on board what the noble Lord. Lord Simon, has just said. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Simon of Highbury moved Amendment No. 207A: Page 26, line 8, after second ("in") insert ("paragraphs (a) to (g) of").

The noble Lord said: In moving Amendment No. 207A I wish to speak also to later amendments standing in my name, Amendments Nos. 236A. 240A, 242A and 252A. These amendments do no more than rectify minor drafting deficiencies in the Bill. Amendments Nos. 207A and 252A clarify the definition of "regulator". Amendments Nos. 236A, 240A and 242A correct cross-referencing errors.

In moving these amendments I should like to add that we may also wish to make minor amendments to those provisions in Schedule 10 which make consequential amendments flowing from the establishment of the new competition commission. There are further matters on which we may wish to bring forward amendments to Schedule 10 at Report stage. The first of these concerns the way that the disclosure provisions of this Bill and the utility statutes interact in governing information obtained by regulators exercising concurrent functions. Some clarification may be needed on this.

The Bill provides for regulators to be able to exercise concurrent functions in relation to Part I of the Bill. However, it does not at present provide for them to exercise concurrent functions in relation to the transitional arrangements in Schedule 13, even though some of these are related to functions under Part I. I believe that the Bill needs to be amended in this regard and accordingly I would expect to come forward with amendments. I beg to move.

On Question, amendment agreed to.

Lord Ezra moved Amendment No. 208: Page 26, line 9, at end insert ("other than the Director General of Telecommunications").

The noble Lord said: This amendment again forms part of the various amendments relating to a concurrent jurisdiction. We have already debated that matter and I shall speak briefly. This measure deals specifically with the concurrent powers of Oftel. It is considered by many that the massive expansion of telecommunications in its various forms is such that it will be difficult to draw the line where the concurrent authority of the Director General of Telecommunications ends and the functions of the Director General of Fair Trading begin.

Almost every large concern, and indeed the majority of small ones, are involved in one way or another in telecommunications. Therefore it is felt that this matter requires a different treatment. I can guess the kind of answers I will receive on this matter because I am sure that, if nothing else, the noble Lord, Lord Simon, is consistent today, although what we are aiming for is to obtain consistency in the application of this legislation. He seems to be consistent in rejecting that desirable objective. When he replies after other Members of the Committee have spoken, as I hope they will, I hope he will tell us how this issue is treated in other countries of the European Union. How do they treat the telecommunications industry in relation to competition law? Is it handled by the government organisation set up to deal with competition law, or is handled by a separate directorate? It would be interesting to know what others do in this matter before we come to a conclusion. I beg to move.

Lord St. John of Bletso

I also wish to support this amendment. We have already debated the position of regulators generally. Amendments Nos. 210 and 213 are particularly relevant to Amendment No. 208. As I said on Second Reading, I am interested in a simple and workable competition law. I support the centralisation of the application of the new law in the DGFT, who has wide experience of competition matters in all sectors, including his dealings with mergers and acquisitions. That point has already been made by the noble Lord, Lord Borrie.

As I mentioned when we discussed Amendment No. 206, I am not convinced, however, that the information technology field should be the subject of sectoral rather than national scrutiny as regards competition. The IT field is a dynamic and evolving field with strong international features. The DGFT's expertise and experience in this field are already strong and should be built upon. However, this Bill seems to envisage that the de facto competition authority for this field would be Oftel. It appears to me that that is not the best way forward, despite the concerns of the noble Lord, Lord Mottistone. The arrangement would possibly undermine the effectiveness of the DGFT's position. I support the comments of the noble Lords, Lord Ezra and Lord Desai, on Amendment No. 206 that these important decisions should not be taken before the results of the Government's review of the utilities are known. As the Minister has mentioned, it is hoped that we shall have those results by the end of January next year. Oftel's submission on the review of utility regulation states on page 3: The changes in competition law will have the most profound impact on the work of the DGT". One reason for this might be that under Clause 10, the Bill proposes to change fundamentally the current position under the 1984 Telecommunications Act.

Under that Act competition powers—that is, the powers to exercise the Fair Trading and Competition Acts—are kept separate from the Telecommunications Act powers. Under Section 3 of the Telecommunications Act, Oftel is not allowed to take into account its telecommunications objectives when exercising its competition law functions. Despite the anxieties of the noble Lord, Lord Mottistone, and the strong words of rejection by the Minister, I have received information about a number of concerns, and support, from a number of organisations. The Federation of Electronics Industries has expressed its concern and broad support, along with a number of its members. They include—I mention a few—Erikson, ICL, Digital, IBM, Intel, Norton, Phillips, BT, Racal, Fujitsu and Xerox. I hope that these concerns are taken into consideration and that we shall receive a more encouraging reply from the Minister.

Lord Mottistone

I need hardly say that I hope the Government do not accept the amendment. I understand that Amendment No. 211 was also spoken to. As I said, Amendment No. 211 is premature. We do not know what the situation will be in January 2001. No doubt it will be a suitable time to have another look at this Competition Bill. I hope therefore that Amendment No. 211 will be rejected.

I am somewhat surprised at the large companies which are ganging up against the very skilful management by Oftel of the telecommunications position. I suspect that those companies are not giving attention to the basic point: that we have to make certain that the large telecommunications companies are made properly competitive. I think that they would agree with that, as will the noble Lord, Lord St. John. I find the noble Lord's great effort to take Oftel out of the picture very strange.

Lord Fraser of Carmyllie

I entirely agree with my noble friend Lord Mottistone, as I think we all do, that without the powerful presence of regulators—in the case of telecommunication it is Oftel—the competition in that industry which we now see would not have been established as quickly and effectively as it has been. There is no dispute about that. We recognise the value of those who have held the office.

However, the real issue was neatly encapsulated in a remark of the noble Lord, Lord Ezra. Do we know where the line of concurrency will be drawn? If we know now, will we know it in a year's time; or, if we know now, do we believe that it falls at a worthwhile point? Such has been the speed of change that clearly telecommunications is no longer a discrete sector, as the noble Lord, Lord Ezra, said. It is for that reason that we believe that it is right to explore this issue now; and I have no doubt we shall explore it again at a later date.

We must be clear that the issue will be properly covered for all the anti-competitive purposes of the Bill. There is a powerful argument for saying that, as regards competition provisions, so broad is the activity of telecommunications now that authority is better invested in the Director General of Fair Trading.

Amendment No. 211 is grouped with Amendment No. 208. It is the "sunset" provision. It restricts the functions of the Director General of Telecommunications until 1st January 2001. I accept that there is no magic about the year 2001 in terms of telecommunications. However, as I see it, the amendment signals the realisation that even at the time of the passage of the Bill there may yet be arguments about the continuing value of having Oftel in place over competition. It must be obvious to anyone with even half an appreciation of the change that has been undertaken, that sooner or later we would wish to see the industry subject to broader competition and not restricted in this sectoral way.

Even if the noble Lord, Lord Simon, cannot give us comfort tonight—I should be surprised if he were to do so—I hope that, nevertheless, he will be in a position to recognise that the concerns on this issue are more keenly felt than they might be on the broader issue of concurrency which we dealt with in the earlier, larger group.

6.45 p.m.

Lord Simon of Highbury

I can start with a positive statement. It is not on any of the amendments, in case anyone becomes overexcited. It is on the question of regulators in Europe. I answer in general to the noble Lord, Lord Ezra.

It is my experience in general that, in particular in the telecommunications field, we are way ahead. I find that an extremely good position for our industry. The capacity of our regulators and the effective communication in the market place have put us in a strong position. If the noble Lord wants more detail, perhaps he will apply to me separately. But we are effectively leading the world in the regulatory process in creating competition in the market place. I would not defer even to our American friends in a number of sectors on the way that we have increased the dynamic of the market.

Perhaps I may respond to the noble and learned Lord, Lord Fraser, as to where the guidelines are drawn. Where is an industry regulator relevant in his field? As I said earlier in talking about the development of guidelines from the director general and the sector regulators, it has to be a moving series. The guidelines have to reflect the dynamics of the market place. They will not be cast in stone. Therefore we shall have to adjust to an understanding that the process of advice and guidance can change over time as the market place changes over time. Those are general points that are worth making.

I can offer a less warm response on the specific amendments. The amendments concern Oftel's concurrent powers. Amendment No. 208 in the name of the noble Lord, Lord Ezra, excludes the Director General of Telecommunications from the list of regulators mentioned in Schedule 10 who are able to exercise concurrent functions under Part I of the Bill. The purpose would seem to be to remove the ability of the Director General of Telecommunications to exercise concurrent functions under the prohibitions, under Part I of the Bill. The effect of Amendment No. 211 would be to limit Oftel's concurrent functions under the Fair Trading Act and the Competition Bill to the period until January 2001.

The reason for this choice of regulator, and the terminal date of 2001, in relation to Amendment No. 211 is not entirely clear. It may be related to the development of competition in the telecoms retail market, and to the fact that the Director General of Telecommunications has said that, in view of this, he expects BT's current retail price cap to be the last one. It will expire in August 2001.

Implicit in the amendments seems to be the assumption that the central competition function of the regulators is imposing price caps, and that when the need for price caps falls away so will the case for the sectoral regulators to be involved in wider competition issues. Amendment No. 208 in fact implies that the sectoral regulators can retreat from wider competition issues even while price caps still apply.

With respect, this is not the Government's view. As I have explained in the earlier discussion on concurrency, it is appropriate that the regulators, including the Director General of Telecommunications, should have concurrent functions under general competition law because there is no clear distinction between sectoral regulation and the promotion of competition in those sectors. The regulators have competition-related duties so that sectoral regulation merges seamlessly into competition issues and the regulators are inevitably drawn into competition issues.

One of the purposes of price caps is to prevent one kind of abuse of a dominant position—namely, excessive, exploitative pricing. The policy of the Director General of Telecommunications is to remove retail price caps as quickly as possible as competition develops. In fact BT's current retail price cap already applies to only about 40 per cent. of BT's services in terms of the revenue generated. But abuse of the dominant position can also take other forms which could be relevant, even after retail price caps no longer apply. Predatory pricing could easily be used to squeeze people out in this sector. The telecommunications system is a mosaic of interconnecting networks, and access to networks is an area where it will be market power that can be exercised. There is no doubt a whole variety of other ways, subtler than network access or the retail pricing or predatory pricing strategies, and therefore more difficult to foresee in advance. The range of potential strategies, particularly in this sector, is limited only by human ingenuity, which is not currently a great limiting factor.

The broad position remains that sectoral regulators have certain duties under the utility statutes to promote competition where that is feasible. This issue goes wider than the price cap. It is an issue which—

7 p.m.

Lord Fraser of Carmyllie

I understand the Minister's point that, under the existing scheme of arrangement, the sectoral regulator has a duty imposed upon him to examine competition issues. As the scheme of the Bill is presently laid out, that is a concurrent jurisdiction.

What we are trying to probe is the issue of what is his sector, and whether there is a risk that in the foreseeable future, if Oftel sought to exercise those competition powers to examine the conduct of some player in what the regulator believed to be the telecommunications sector, it might then be met with the complaint, "This goes beyond your statutory powers". Our concern is that it would be no fault of the regulator and no criticism of him, but such is the speed of change that trying to maintain a definition of that sector is becoming an increasingly artificial exercise. Since it is so artificial, it would be safer in the public interest simply to vest investigation of competition law, anti-competitive practice and abuse of dominant market position in the director general himself rather than take the risk of there being any challenge to the Director General of Telecommunications.

Lord Simon of Highbury

I thank the noble and learned Lord for his intervention. But I still see at this time that the special capacities of the Director General of Telecommunications, as specified, must be maintained. If there has to be testing of the limits, it can be handled in other ways. But it is not an appropriate approach now to ask him to give up his special capacity powers on the way to developing the new legislation.

Lord Kingsland

There is nothing to prevent the Minister, in any one of the separate utility regimes, inserting a simple clause stating that where, in the judgment of the utility regulator, one regime is preferable to another he can opt for that regime, and to cast that clause so clearly that, at some given moment in the application of competition law or the licence conditions, the regulator has to take a position. From that moment he goes down whichever one of the two paths he selects. Surely, not only is that not beyond the technical abilities of the parliamentary draftsman, but also it cannot be beyond the Minister's vision for a system which is as certain and clear as possible for the companies concerned.

Lord Simon of Highbury

Again, I thank the noble Lord for his inventiveness. It seems to me that the appropriate locus for addressing this question is precisely the working group for the director general and the existing sector regulators. If during the process of consultation after the guidelines have been published we find that many people say, "This is a new sector of industry developing under the broad aegis of telecommunications which needs to be regulated by a different regulator", or indeed, "We wish to redefine what the telecommunications director general is responsible for", that is the appropriate time for that to be done. I would note the point and put it to the working group that that is a test for the particular sector.

Lord Kingsland

In a few amendments' time, in relation to another sector, this point will arise again. By implication, the amendment proposes a much more clear-cut way of dealing with the situation than that proposed by the Minister. I am sorry to anticipate an amendment, but I have to shoot at my pheasants when they fly over me. I hope that I do it rather more effectively with respect to this legislation than I do in other circumstances. I submit that there are ways of doing this under the Bill that are preferable to simply hiving matters off for discussion under a working party and delaying a decision which, if it is not taken before the Bill comes into effect, will undoubtedly result in a great deal of uncertainty.

Lord Simon of Highbury

The noble Lord leaves me all of a tremble at the thought of yet another discussion around this matter on an amendment that I cannot yet foresee. I was racking my brains. However, perhaps dinner will intervene. I await the argument when it comes.

Currently, the idea that we should specify in the Bill that markets are developing in such a static way (in fact, "static" and "development" are not words that go well together) that we need to re-define already on the face of the Bill how this particular market place—telecommunications—has differed in applying the new prohibitions seems premature. I would let the people who are expert in the sector, who are expert regulators, and the director general, take account of this debate and consider whether, in issuing guidelines and advice, they need to revise the scope of the sector in any way. I certainly do not think that we can do it here on the Floor of the House. Under those circumstances perhaps the noble Lord is prepared to withdraw the amendment at this stage.

Lord Ezra

Once again, I express appreciation for the lively debate we have had on this issue. It is clearly not the last time during consideration of the Bill that we shall debate this subject. What has emerged clearly is the jurisdictional uncertainty which covers these issues. With market places evolving, conglomerates forming up and technology in telecommunications developing rapidly, the situation is far from static. It is difficult to see where the lines will be drawn today, tomorrow and the day after. Undoubtedly, we shall need to return to this issue from time to time.

I wish to study carefully the remarks of all noble Lords, and in particular the contribution of the noble Lord, Lord St. John, who referred to a number of matters stated by Oftel. I got the impression from the noble Lord's clearly devoted reading of the background material that, far from the existing situation continuing, the powers of Oftel could be considerably strengthened under the new arrangements, and that could add to the degree of uncertainty. I should like to study that matter. I do not wish to detain the Committee any longer and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 209 not moved.]

Clause 52, as amended, agreed to.

7 p.m.

Schedule 10 [Regulators]:

Lord Simon of Highbury moved Amendment No. 209A: Page 69, line 25, leave out ("64") and insert ("65").

The noble Lord said: Amendment No. 209A is a consequential amendment to Schedule 10 which flows from the substantive amendments which I have tabled to Clauses 63 and 65. With the leave of the Committee, we shall speak to those substantive amendments when we reach Clause 63. In the meantime, I beg to move.

On Question, amendment agreed to.

Lord Fraser of Carmyllie moved Amendment No. 209B: Page 70, leave out lines 4 to 8.

The noble and learned Lord said: The purpose of the amendment is to increase certainty regarding the scope of Part I functions and their application by the Director General of Telecommunications to clarify the purposes for which the functions under Part I, in particular the prohibitions, may be applied by that sectoral regulator to achieve a better alignment of Part I of the Bill with EC law and principles and a better consistency of decision-making. The amendments would not prevent the director general from exercising functions under Part I but would simply remove the bridge created in Schedule 10 between the objectives of the relevant sectoral statute and the prohibitions in Part I. They would therefore maintain the present position—they would not introduce the change to which the noble Lord, Lord St. John, referred a moment ago—under which the Director General of Telecommunications wears two hats, as regulator and as a competition authority, but those hats would have to be kept separate and would not be worn simultaneously. I beg to move.

Lord Simon of Highbury

The question of regulators' general duties under their utility statutes and their relationship to concurrent functions under the Bill takes us into the territory of conflict. The provisions that these amendments would delete have two purposes. The first is to make clear that in applying the prohibitions a regulator must regard his functions under the Bill as paramount. In other words, in carrying out his functions he must act in accordance with the governing principles set out in Clause 58. That is vital to ensure that the principles upon which the Bill rests are not undermined and that they are to be followed by each of the regulators when applying the prohibitions. That may well be the effect without specific provision in the Bill, but it is such an important issue that we wish to put beyond doubt that that is the prime function.

The second purpose is to enable, but not to require, each regulator to have regard to his general duties in the utility statutes, subject to the crucial point about functions under the Bill being paramount. We consulted the regulators in the development of this provision and received differing views as to whether they should be required to have regard to the general duties in their utility statutes or whether those duties should be disapplied. We decided that the right course was to enable a regulator to have regard to those duties, where appropriate, but not to require him to do so. The effect of the amendments would be to require a regulator to have regard to his utility statute duties without making clear that he is to regard his functions under the Bill as paramount. That would create a risk of conflict and inconsistency.

A particular area that we are reflecting upon is the interaction between the duties in the Channel Tunnel Rail Link Act and those in the Railways Act 1993. I may wish to return with an amendment on that point on Report.

I hope that the noble and learned Lord, Lord Fraser, finds this explanation helpful and is under those circumstances prepared to withdraw the amendment.

Lord Fraser of Carmyllie

I am grateful to the noble Lord for anticipating what I was going to say about the Channel Tunnel Act. I say more seriously to the noble Lord that I shall reflect on what he said. I am not sure that it is quite an answer to the point that concerns us. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 210 and 211 not moved.]

Baroness Dean of Thornton-le-Fylde moved Amendment No. 211A: Page 70, line 17, at end insert ("and activities preparatory or ancillary thereto").

The noble Baroness said: In moving the amendment, I wish to apologise to the Committee for not being present at the Second Reading of this important Bill. It was impossible for me to attend. I shall not kid you that it was business; it was actually a holiday abroad.

My amendment deals with the concurrent powers and the application of those powers by the Director General of Telecommunications. The amendment is specifically in the area of telecoms regulation. I almost hesitate to use the word "telecommunications" because the impact of the amendment is to face the challenges of much of the convergence of which we shall enjoy the benefits now and in the future.

As presently worded, the Bill will limit the regulator's powers to the area of, commercial activities connected with telecommunications". I suggest that those words are almost outdated in their general usage. I am aware too that my noble friend Lord Cocks of Hartcliffe complained at Second Reading of the Bill that those powers were too wide. I approach it from a different direction and think that they are too narrow and too restricting for the director general to ensure access and true competition in this sector.

The words are from the Telecommunications Act 1984. The world has moved on a long way since 1984. We are now seeing convergence as between telecoms and broadcasting; it is with us and is poised to take off in a big way. The advent of digital transmission technology and the developments in information technology software provide us with the opportunity for our television sets to deliver interactive, on-line services, with the use of telecommunications too. Already our PCs in our homes and offices deliver live sound and pictures to users, again on-line services. The two are converging. It is for this reason that I propose my amendment.

Some may argue that these services will not be widely available for a number of years yet at prices which the public can afford. I suggest that that is debatable. The average shelf-life of a competition Act seems to be about 15 years. I am trying to project us not into the immediate future but a little further on. That is necessary when we consider the speed at which technology is developing. On past experience, the words in the Telecommunications Act 1984, which are repeated in the Bill, have been interpreted very narrowly by lawyers. I suggest that in the best interests of competition, of the consumer and of the developing industries we can no longer afford a very narrow interpretation.

I am drawn to the amendment from debates that we had during the passage of the Broadcasting Bill 1996 which clearly brought out the concern that we could face an increasing possibility of dominant market players—they now exist—determining for the consumer future availability of access to the emerging services from the set-top box on the television. Though the Broadcasting Act, as it became, recognised that it would probably have a short shelf-life, developments in the sector made many feel that the problem had been alleviated by the powers which the DTI sensibly granted to the DGT at Oftel.

We hoped that those powers would ensure that access to information about proprietary technology was readily available to the people who wished to enter the market. I suggest that experience over the past year fell short of our expectations. For instance, I gather that the information on what is called the "applications programme interface" only recently became available, despite new players in the sector wishing to have that information to plan their involvement in the medium and longer term. That demonstrates clearly that, where gateways are controlled by organisations which are content providers, there are significant commercial incentives for anti-competitive behaviour. The Director General of Telecommunications had no power to force the release of that information in the face of protected anti-competitive behaviour.

I put forward a simple analogy. When privatisation of telecoms took place, no one imagined that the privatisation would permit or prevent any of us using a handset to make a telephone call to any number in the land irrespective of who the service provider or network operator was. Legislation ensured that the public, and indeed business, had that access. This is not a dissimilar situation. It is the principle of access in a way that ensures that the regulator has the authority to take steps which will enable a competitive situation to exist.

The powerful position of the controllers of gateway technology was recognised by the DTI when it established the system of class licences for the running of telecommunications services for the provision of conditional access services. Those licences, which are issued and regulated by the DGT, place on the holders a "duty to co-operate with" content service providers wishing or entitled to use their network to reach audiences in order to prevent the abuse of a dominant position of network controllers who are also content service providers.

That narrow definition of conditional access services includes encryption services and subscriber manager services. Those were two issues debated in this Chamber during the passage of the Broadcasting Bill. The wider definition that the regulator has rightly chosen to interpret includes software and middleware which support the navigation and selection of services for the public. Amendment No. 211A will put on a statutory basis the broad interpretation of those powers to ensure that we have competition in this sector. It is a competition amendment.

The amendment is consistent with EC jurisprudence in this area. It reflects the approach of the advanced television services regulations in the UK, jointly sponsored by the DTI and the Director General of Oftel. And it echoes the sentiments of the Minister, my noble friend Lord Simon, in our considerations on this Bill on 13th November when he pointed out that it is wrong to make the assumption that a utilities company licence conditions deal with all competition concerns which can arise, particularly in a dynamic market place".—[Official Report, 13/11/97; col. 334.]

In that same contribution my noble friend went on to say that if anti-competitive conduct takes place which is not covered by explicit licence conditions, the prohibitions contained in the Bill should be applied as rigorously and effectively as elsewhere. My amendment is designed to achieve just that in what is probably the most dynamic market place in our country today. It ensures that effective action can be taken in relation to activities which are preparatory or ancillary to licensed telecommunications activities in their widest sense.

I appreciate that in not being here for the Second Reading the Minister has not had prior indication of my general anxieties in this matter. It may be that he will wish to consider the points that I put forward. If so, I fully accept that. And if that is the case, might I suggest that when he considers the amendment he might also consider that Section 50(3) of the Telecommunications Act grants the Director General of Telecommunications concurrent powers under the Competition Act 1980—the Act which will be superseded by this Act—and it would be worth including more words from that Act into this Bill. That would give us legislation which truly provides competition both for the consumer and for the emerging players in this sector. It will also prevent dominant market players from taking full advantage, as I am sure they would wish. I beg to move.

7.15 p.m.

Lord Mottistone

I support in principle the amendment of the noble Baroness, Lady Dean. I am told that the Director General of Telecommunications has a certain anxiety about the definition of his powers under the Competition Bill and believes that the amendment raises an important point. However, he is not sure that the wording is quite right and suggests that the Government may like to study the point to see whether better wording can be achieved.

In the same connection, the director general believes that the scope of his powers as currently defined in the Bill probably also need amending to match Oftel's scope under the Telecommunications Act, to which the noble Baroness referred. I am not sure whether the noble Baroness was on the same point as myself, but the Government may wish to consider it so as to ensure consistency between this Bill and the Telecommunications Act regimes. I hope that the Minister will feel that that is something he can willingly take up.

Lord Simon of Highbury

I certainly recognise the general points made by my noble friend Lady Dean in relation to the pace of redevelopment in this marketplace and the fact that, not only we in this Chamber, but also the regulators will probably always be just behind the game rather than ahead of it.

I particularly recognise the anxieties that prompted the amendment. However, I can assure my noble friend that proposals are already in hand to extend the regulatory regime for conditional access services—a key point in the specific issue raised by my noble friend. The DTI and Oftel issued a joint consultation document in July of this year on this issue, and a new version of a draft standard telecommunications class licence has just been circulated for comment. That includes licence conditions to provide a similar regulatory framework for access control gateways to non-broadcast and non-television broadcast digital services, as already applies to broadcast digital television services. The process of consultation is already under way on that point.

The amendment as drafted could be a significant widening of the scope of the concurrent functions of the director general in respect of prohibitions. That was a point made by my noble friend Lady Dean and was also perhaps behind the intervention the noble Lord, Lord Mottistone. I believe I have already argued that it would be wrong to pre-empt the outcome of the utilities review or indeed any sector specific consideration of the future of regulation by provisions in this Bill that would undermine the Director General of Telecommunications' functions as they now stand. By the same token it would be wrong to pre-empt the outcome of the review by provisions that could significantly widen the scope of his concurrent functions.

We took a great deal of advice from the director general in the consultation process. I note from that consultation process that the Director General of Telecommunications has, as the noble Lord, Lord Mottistone, pointed out, argued that the scope of his concurrent functions under the Bill is narrower than the scope of his existing concurrent functions in relation to the Competition Act 1980. I am not convinced that any change is needed to the provisions of the Bill, but I would certainly be willing to reflect further on this matter as part of the consultation process.

In the light of my specific response on the conditional access position and the general wish not to prejudge at this stage the sector review, and in the light of the fact that we are in consultation with the director general, I hope that my noble friend will be willing to withdraw the amendment.

Baroness Dean of Thornton-le-Fylde

I thank my noble friend for that response. I am aware of the consultation document which came out some months ago from Oftel. I am heartened by the Minister's assurance that he will reflect on the debate. This is a key part of what is a dynamic market. There are tremendous opportunities in this sector. It would be sad if the Competition Bill did not ensure competition in the sector. I shall willingly withdraw the amendment. However, I would ask the Minister to consider some of the points that have been put forward in the debate. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Chairman of Committees (Lord Skelmersdale)

I understand that Amendments Nos. 212 to 218 are not to be moved. Therefore, unless any noble Lord objects, I declare them not moved.

[Amendments Nos. 212 to 218 not moved.]

[Amendments Nos. 219 to 236 not moved.]

Lord Simon of Highbury moved Amendment No. 236A: Page 76, line 6, leave out ("6") and insert ("1").

The noble Lord said: I have already spoken to this amendment. I beg to move.

On Question. amendment agreed to.

[Amendments Nos. 237 to 239 not moved.]

Lord Kingsland moved Amendment No. 239A:

Page 77, line 45, at end insert— ("( ) In section 25 (orders for securing compliance), in subsection (5)—

1. (a)after paragraph (b), omit "or";
2. (b)after paragraph (c), insert "or
• (d)that the steps which he is taking, or proposes to take, under the Competition Act 1998 will be more, or equally, effective to secure compliance with the relevant licence obligation.".").

The noble Lord said: This is another episode in the saga of concurrent powers, this time, the Committee will be relieved to know, not in the field of telecommunications but in the field of electricity. The point can be fairly simply put. Under Section 25 of the Electricity Act the DGES has an obligation to take enforcement action against a relevant company that is in breach of its licence conditions. The matter which is enforced against might also breach Part I or Part II of the Competition Bill, no doubt soon to become the Competition Act. The director general may take the view that the better way of dealing with the situation is to pursue the procedure under Part II of the Competition Bill rather than the procedure under Section 25 of the Electricity Act. However, except in very limited circumstances, he cannot do that because he is obliged to act under Section 25. That is the background against which my amendment must be assessed.

It is true that under Section 25 of the Electricity Act there are certain limited circumstances in which the director general can forgo his obligation to enforce. However, in my submission, those are too limited. Therefore, the amendment seeks to add a further heading (d). This is the formula that provides the option for the director general to choose which course he thinks is better pursued in the public interest. It states, that the steps which he is taking, or proposes to take, under the Competition Act 1998 will be more, or equally, effective to secure compliance". In fact, in the amendment I use the words "with the relevant licence obligation". However, if the Minister were prepared to accept the amendment, it might be better concluded with the expression "with the relevant condition or requirement".

This is a concrete example of the general proposition to which I alluded about half an hour ago when I intervened in the general debate on telecommunications. It is an extremely attractive way of dealing with the problem of concurrent powers because one can see it extended not just to telecommunications but to the operations of all the other regulators as well. To have to face both the procedures together is confusing not only for the regulator but for the regulated party. I beg to move.

Lord Simon of Highbury

The noble Lord has now arrived at what he announced a little earlier. I waited with great pleasure because I am now able to say that I am truly grateful to him for elucidating the earlier point and for putting down an amendment which seems to make an extremely valid point about the interaction between Section 25 of the Electricity Act and the enforcement of prohibitions. However, as he will be aware, the amendment was put down only yesterday. I should therefore like to reflect on the issue it raises and come back to the matter at Report. It is a valid point but we want to consider it more widely, as the noble Lord intimated. With that consideration in mind, perhaps he will be willing to withdraw the amendment.

Lord Kingsland

I am most grateful to the Minister for that response. In the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 240 not moved.]

Lord Simon of Highbury moved Amendment No. 240A: Page 78, line 6, leave out ("6") and insert ("1").

On Question, amendment agreed to.

[Amendment No. 241 not moved.]

Baroness Farrington of Ribbleton

I beg to move that the House do now resume. I suggest that the Committee stage of this Bill be resumed not before half past eight.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.