HL Deb 23 February 1998 vol 586 cc453-77

6.15 p.m.

The Minister of State, Department of Trade and Industry (Lord Simon of Highbury)

My Lords, I beg to move that the Bill be now further considered on Report.

Moved, That the Bill be further considered on Report.—(Lord Simon of Highbury.)

On Question, Motion agreed to.

Clause 48 [Appeals on point of law etc.]:

[Amendments Nos. 153 to 154E not moved.]

Schedule 8 [Appeals]:

[Amendments Nos. 155 to 158 not moved.]

Lord Fraser of Carmyllie moved Amendment No. 159: Before Clause 49, insert the following new clause—

("Advisory body for the Director


.—(1) The Secretary of State shall, prior to the coming into force of Chapters I to IV of this Part, establish an advisory body for functions exercised by the Director under this Part, and the body so established shall consist of such members as the Secretary of State may from time to time appoint.

(2) It shall be the duty of the advisory body established under this section to advise the Director on any matter—

  1. (a) in respect of which the Director exercises functions under this Part; and
  2. (b) which is referred to it by the Director or is a matter on which it considers it should offer its advice.

(3) The advisory body established under subsection (I) shall, as soon as practicable after the end of 1998, and in each subsequent calendar year, make a report to the Secretary of State on its activities during that year.").

The noble and learned Lord said: My Lords, important as this amendment is, it is more important that at long last we should reach our deliberations on this Bill. It does not seem to me that the conduct of the business in your Lordships' House this afternoon has been at its most edifying, particularly as this Competition Bill is extremely important. To reach it only at quarter past six does not indicate to the world outside, which is keen to see how we are to deal with competition, that we are taking the matter as seriously as it warrants.

Amendment No. 165 is grouped with this amendment. That seems to me to be extremely appropriate because, although both amendments are in my name and relate to advisory bodies, it would be a superfluity of advisory bodies to have them both established. The amendments are essentially alternatives.

Amendment No. 159 would require the Secretary of State to create an advisory body to provide advice on the exercise of functions under the Bill to the Director General of Fair Trading or to any regulator exercising those functions concurrently. Advice would be provided at the request of the director general or any regulator or on the advisory body's own initiative where it considered that it was appropriate to do so.

As I am sure that many noble Lords will appreciate, the sectoral statutes already provide for the Secretary of State to establish such bodies to advise regulators in respect of certain functions and enable regulators to establish advisory bodies in respect of other matters. I understand that the Director General of Telecommunications has already established such a body in relation to the application of licence conditions which are based upon Articles 85 and 86 of the treaty.

The proposal in Amendment No. 165 is that the Secretary of State would create an advisory body to provide advice to the sectoral regulators alone without going back to the director general, and to advise them on the exercise of their functions under the Bill. The advice would be provided on the request of the regulator or on the advisory body's own initiative where it considered it was appropriate to do so.

An example of the type of arrangement which is already in place is under Section 54 of the Telecommunications Act 1984 which authorises the establishment of an advisory body on matters affecting small business. I understand that such a body has already been established.

Once those amendments appeared in my name, I received a letter from the Director General of Telecommunications who said: While I believe it is important that regulators have access to independent advice on issues, I do not believe that formal provisions for such arrangements needs to he written into the Bill". At the same time, I received a communication not just from the regulator but from those who are to be regulated.

A document from the Cable Communications Association states, While the CCA believes it is important that regulators have access to independent advice of the highest quality, we do not believe that provision for formal arrangements needs to be written into the Bill … Oftel already makes extensive use of advisors on legal and economic issues … Introducing a formal advisory body would risk introducing unnecessary bureaucracy and delay into the decision making process of regulators. The association further states: In our own experience Oftel already makes extensive use of advisors on legal and economic issues and we believe that the Director General of Telecommunications and other sectoral regulators should have the freedom to seek specialist advice as required on a case by case basis". On one view it might seem a happy coincidence that the regulator and the regulated should agree, but such is the coincidence of language that if I were an examiner for an examinations board I might think that someone had seen someone else's paper.

The more important point is that if there is that coincidence of view it would appear to be unnecessary to explore the matter further if the approach that was proposed met with everyone's approval. I think it is clear that we should not believe that that is the only view that has been expressed by those who have an interest in these matters. I take a little time to explain this because the same point will arise in relation to a number of the groupings we are discussing this evening.

As I am sure the Minister will have seen, there is an article in today's Times by Mr. Thomas Sharpe QC, who is a specialist in United Kingdom and EU competition law and utility regulation. The Minister may not have read the article but I am sure he has seen his own beaming face smiling out from the pages of The Times today. It is worth recording that Mr. Sharpe, a distinguished Silk, states that this is a major Bill and it is a major achievement for the Government. He compliments the Government on introducing it into the Lords rather than the Commons, which reflects its technical nature and cross-party support.

However, what begins to emerge clearly from the article is that there are a number of risks as regards the way the Government are approaching this matter, particularly in relation to concurrency. The clear proposal is that the director general should have a continuing and important competition law function but that all the regulators should be similarly involved. While from time to time in the course of our deliberations we have dealt with one regulator or another, the fact of the matter is—as the article points out—that there will be no fewer than eight other regulators who from time to time may have to exercise competition law policy approaches. In our view there is a real risk, as Mr. Sharpe states, that, As it stands, the Bill will lead to duplication of scarce resources among regulators; the certainty of inconsistency of treatment between regulators and difficulties over which regulator should have jurisdiction in any situation".

It is in that set of circumstances that we believe it to be desirable that there should be one advisory board that offers advice both to the director general and the sectoral regulators, or to the sectoral regulators alone. As I indicated, it is my understanding—I am open to correction—that Oftel has already established such an advisory board to give specific advice on the issue of conditions in licences where there is an Article 85 or 86 point. There would be a real risk of inconsistency. Each and every one of those regulators who sought to impose conditions within licences—all those which had an Article 85 or 86 point—and each different advisory committee could potentially come up with a different variation. That seems to me to be undesirable. It would lead to a great deal of uncertainty and duplication. The simplest and best way forward to eliminate the inconsistency I have mentioned would be through the establishment of an advisory body.

As I say, this proposal is not wildly out of line with the scheme of things as they are at the present time. It is my understanding that in most, if not all, of the sectoral statutes such a power already exists. But if there is to be this more distinctive, clearer, concurrent competition law responsibility in those circumstances, particularly where multi-utilities will operate—if we do not have them already—it is desirable that there should be some arrangement for a single body. We have proposed alternatives. I hope that the Government will consider that one of them is a desirable way to proceed. I beg to move.

Lord Desai

My Lords, I take it that the noble and learned Lord prefers either Amendment No. 159 or No. 165. I think that Amendment No. 159 is better because Amendment No. 165 would add too many advisory boards.

The noble and learned Lord referred to concurrency. While that is an important issue, I am not clear that the amendment will deal with it. I shall clarify the problem. I believe that the concurrency problem will arise. At Second Reading I said that we should have an over-arching regulatory body rather than Snow White and the Seven Dwarfs, as it were. I do not see that the advisory board that the noble and learned Lord proposes will have any binding power to say, "This is our judgement and therefore this particular problem falls in the path of a sectoral regulator". If it is not to have that kind of power, I do not know that the advisory body will add much more to what the director general and various other regulators already seek by way of informal advice on a retail basis from time to time. That is my only comment.

Lord Simon of Highbury

My Lords, I am grateful to the noble and learned Lord, Lord Fraser, for pointing out that there is an article in The Times today on this subject. I shall hasten to read it. Perhaps in view of recent debates I have not been reading the paper as closely as I should have done. In any case, the thinking is not that with which I would be totally at one.

I believe that the thinking behind Amendments Nos. 159 and 165 although clear is flawed. The noble and learned Lord has, in my view, underestimated the mechanisms in the Bill for ensuring that the director takes account of the views of those affected when he exercises his powers, and for ensuring that his decisions may be appealed. The advisory bodies proposed in the amendments would also, if I may say so, add an unnecessary layer to the decision-making process, particularly that suggested at Amendment No. 159. I shall return to Amendment No. 165.

The Bill already makes provision to make the director accountable for his actions and to oblige him to take into account the views of affected persons. He must publish applications for decisions, consult those likely to be affected and take into account their views—I refer to paragraph 5, Schedules 5 and 6. In investigation cases he must give written notice to those most likely to be affected and provide them with an opportunity to present their case—I refer to Clause 31. Most importantly, his decisions may be appealed by the parties concerned, affected third parties and their representative bodies. The appeals tribunal may conduct a full rehearing of the merits of the case. Thereafter, appeal lies on a point of law to the Court of Appeal and your Lordships' House, as noble Lords are aware.

It is worth pointing out that the accountability mechanisms are much more extensive than those which exist at EC level. In contrast to the full rehearing of the case by the appeals tribunal, the European Court of Justice is in certain respects more akin to judicial review. Similarly, the class of third parties which can appeal a director's decision is highly likely to be wider than the class which may appeal Commission decisions.

The noble and learned Lord mentioned the advisory body for Oftel. It is true that it was established to advise on the application of the fair trading conditions in licences granted under the Telecommunications Act, which are similar to the prohibitions in the Bill. But under the Telecommunications Act there is no comparable appeal body to that established under the Bill. The situation is therefore quite different.

I find it difficult to see what benefit can be gained by adding an additional layer to the decision-making process as suggested by these amendments. That is not to discuss the issue of concurrency formally; I quite understand that there are separate arguments that will run this evening in relation to concurrency. My submission is that the noble and learned Lord's submission will only add a layer to the consultative process, which has already benefited from the way in which we have shaped and structured the Bill. I have tried to explain why I believe the position of Oftel is different; namely, that there is no recourse to appeal in its circumstance as there is in the circumstances of the Bill. I hope therefore that on reflection the noble and learned Lord will recognise that and not press his amendments.

6.30 p.m.

Lord Fraser of Carmyllie

My Lords, first, perhaps I may say to the noble Lord, Lord Desai, that I entirely agree with him. The establishment of an advisory body, whether under the proposal in Amendment No. 159 or my alternative proposal in Amendment No. 165, does not eliminate the problem of concurrency. However, if the policy is to be that concurrency should exist, it would seem to us desirable to avoid the duplication and inconsistencies which we would predict, unhappily, are almost inevitable, and that there should be a single advisory body to do what it could to avoid that. I return to the particular example I used. If Oftel already has an advisory body, advising specifically on where Articles 85 and 86 might impact on conditions in licences, it is to be presumed that the other regulators will wish to address much the same problem. If they are going to do that, there would seem to be a powerful case for there being a single body providing that advice rather than up to eight separate bodies on this technical matter.

The noble Lord, Lord Simon, has a good point in this respect. I would certainly not wish there to be an additional layer. I appreciate that it would be something of an absurdity if Oftel had its own advisory committee on Articles 85 and 86 and there was also a broad regulator's one also offering advice on those articles. If that is the noble Lord's only objection, I believe that I can go away and table amendments before Third Reading to eliminate the right of Oftel and others to have their own separate independent advisory bodies. I shall withdraw the amendment. I wish to reflect on the noble Lord's remarks. I did not quite understand his point about there being rights of appeal under the Bill. No doubt it is my fault, but I shall want to read those remarks carefully in order to determine whether or not we wish to return to the matter at Third Reading. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 49 [Rules]:

Lord Kingsland moved Amendment No. 159A:

Page 24, line 40, at end insert— ("() The Director shall, prior to the coming into force of section 52, make rules under this section which specify (by means of objective criteria set out in those rules) the circumstances in which the Director rather than a regulator shall exercise the powers conferred by or under Part I.").

The noble Lord said: My Lords, Amendments Nos. 159A, 170, 171, 171B and 225 all refer to the problem of overlapping jurisdiction between the Director General of Fair Trading on the one hand and the individual regulators on the other when enforcing their competition responsibilities. Amendment No. 164E refers to a much wider matter which reflects an amendment made by the noble Lord, Lord Ezra, in Committee.

As the Minister is only too well aware, the problem of concurrency has a number of manifestations. Much of this evening's debate will be about those. This particular one relates to which regulator—or, if not a regulator, the director—is responsible for a particular alleged anti-competitive activity.

Of course it is simple if a matter is within the gas sphere, once a satisfactory definition of "gas" has been decided on, or within the electricity sphere, once a satisfactory definition of "electricity" has been decided, and so on. But, as the Minister knows, the real world is not like that at all—especially when we are seeing the growth of utility conglomerates and we know that many of these agreements will cross the lines of responsibility of the regulators. Which regulator should be responsible?

That is not merely an academic question. Since it is proposed to give individual regulators concurrent jurisdiction enabling them to exercise both regulatory and competition power at the same time, which regulator might determine the degree of severity with which he enforces his powers? If it becomes known that the gas regulator is "softer" on competitive matters than the electricity regulator, or that both are softer than another regulator, it is almost certain to lead to forum shopping by the regulatees. In order to prevent that, these amendments seek to establish ab initio and a priori a means of dividing up responsibilities. It is the belief of Her Majesty's Opposition that the rules for that dividing up should be clear and determined, and known to this House before the Bill becomes law.

In the course of the Committee stage, I recall the Minister referring to the undesirability of a hierarchy of powers. However, I should like him to reflect for a moment on any other solution but a hierarchy. The great danger that the Minister faces is that this Bill will be applied in seven or eight different ways by seven or eight different people, which will, quite apart from the discomfort of the regulatees, cause enormous confusion to the appeal courts which can apply only one set of rules; namely, the rules in the Bill.

I therefore say to the Minister that what is required is some careful thought about where the boundaries ought to lie, and some clear, at least draft, rules before the Bill becomes law setting out those boundaries beyond peradventure. I beg to move.

Lord Borrie

My Lords, I have great sympathy with some of the points made. Certainly it is extremely valuable to have had a debate initiated on the whole question of concurrency and consistency. If there is one point on which everyone in the Chamber agrees, it is the desirability of consistency in decision-making whichever regulator is involved, so that competition law develops, with the aid of the competition commission's appeal tribunal. I think that that is everyone's intention.

But the amendments immediately under discussion seem to proceed from gentle to harsh rigidity. They start with the notion of the director making rules, and proceed to amendments such as Amendment No. 170, which would lay down at some length and with great rigidity in the Act itself the intention as to precisely where the demarcation lines should be. If noble Lords believe that consistency is desirable, there is another technological matter on which we may agree and that is the current convergence in the field of broadcasting, telecommunications, information technology, and so on. I challenge noble Lords to say where we will be in five or 10 years' time. It therefore follows that it would be wholly undesirable to lay down, in either modest or rigid form, the demarcation lines. The noble Lord, Lord Kingsland, is concerned with the regulatee. I am not sure about that word but I think I understand what he means. Business and industry want to know where they stand. At this stage of a developing convergence in technologies and at this stage of regulation, before the Government's utilities regulation review, which will almost certainly change some of the regulatory arrangements, it would be unwise to lay down demarcations which may be suitable in February 1998 but which will almost certainly be unsuitable in February 1999 or in five years' time.

The arrangement whereby the Director General of Fair Trading chairs informal meetings to discuss rules and procedures is the kind of concordat which has existed for many years in the more limited concurrent jurisdiction of other regulators. The concordat is made public and can be altered from time to time. It would be much more helpful than laying down the precise rules proposed by the noble Lord, which may or may not be right.

Lord Desai

My Lords, I support the comments of my noble friend Lord Borrie. I have been worried about concurrency for some time. It is untypical of the noble Lord, Lord Kingsland, and the philosophy of his party to impose a vast number of rules on a changing scene. The present arrangement will not last and we will need new arrangements in three or four years' time. We need, not a hierarchy of rules, but a hierarchy of authority so that one knows who is the top dog who can be consulted by those who are lower in the hierarchy. The current arrangement may not be perfect but the Director General of Fair Trading can talk to other regulators and resolve matters. However, I still believe that this is a transitional arrangement and that we will have to decide the matter after the utilities review and then introduce binding rules. Inventing vast numbers of rules now is not the way forward.

Baroness O'Cathain

My Lords, just because something is going to change does not mean that it should not be controlled now. New customer practice can develop over a very short period of six to 18 months, after which time it is very difficult to get it back on track. Although we are dealing with a new technological area, telecommunications, it is a bit of a cop-out to say that we should not lay down precise rules because everything changes so rapidly.

During the debate on the Broadcasting Bill many noble Lords stated that the Broadcasting Act would be superseded by another Broadcasting Act because everything changes so rapidly. The same could apply here, but that did not stop us from acting in relation to the Broadcasting Act. I have a great deal of sympathy with the idea that in order to stop excesses this area should be regulated now and not retrospectively.

Lord Fraser of Carmyllie

My Lords, in putting forward an amendment containing a set of rigid rules we thought that we would be appealing to the philosophy of the noble Lord, Lord Desai, not to our own. The proposals we have put forward are not entirely consistent. We are seeking to improve the Bill, to find the best way forward which will meet with broad support and avoid issues of concurrency in relation to issues that we do not as yet fully grasp.

It is difficult to define what will be the jurisdiction of Oftel. I do not know what the area of telecommunications will encompass in five or 10 years' time. Without being particularly skilled in gazing into the crystal ball of technology, there is every prospect that Oftel might seek to regulate everyone from Microsoft to Asda and Sainsbury. The amendment is a better way forward and avoids the risk of returning in three or four years to make further changes in primary legislation. It would be better to take the extremely complicated area of telecommunications competition away from Oftel and put it under the direct and exclusive authority of the director general.

I rose to speak to the further amendment in this group, Amendment No. 225, which the noble Lord did not directly address. It proposes that the Secretary of State should be prevented from making an order to bring Clause 52 into force until the review of the function of regulators has been completed and a report made to Parliament. One could probably accurately predict parts of the review particularly in the energy field but elsewhere it might be more complicated. Before that clause is brought into force Parliament should know what has happened. I appreciate that there are great difficulties and no doubt a very extensive review has been undertaken. The Minister has been open enough at each stage of the Bill to make clear that, however desirable, it would not be possible to complete that review before the Bill leaves this House. We accept that situation but suggest that there should be a provision, as proposed, which would delay commencement.

Lord Simon of Highbury

My Lords, it is worth making one or two general points about concurrency. In my last response I managed to put it off and talk to why I believe that another advisory committee would not be advisable at this stage. The noble and learned Lord, Lord Fraser, has probably addressed the factors of concurrency that he really wanted to talk about so I can put it off no longer; but I am glad that he is going to reflect on my previous answer.

The principle of concurrency is right. This is a Bill about competition. Regulators need to have powers in order to encourage and maintain competition in their sectors and to co-ordinate their use of sector-specific regulation with these powers. We have said that we do not believe that a "bright line" of jurisdiction is practical. We do not want gaps or litigation about who has jurisdiction. Hence, powers have to be exercisable concurrently by the regulator and the Director General of Fair Trading to ensure the competitive marketplace which I know all noble Lords are seeking via the powers of this Bill.

The marketplace is dynamic, as we have repeated many times. We have already talked about the scope of Oftel, though we shall return to that in further amendments. It is true that the legal scope of Oftel's remit needs to be kept under review. It must he clear, but it must be wide enough and it must be up to date. As many noble Lords and the noble Baroness, Lady O'Cathain, have stated, this is probably the most dynamic marketplace that we are currently trying to regulate. We are prepared to respond to the concerns expressed in Committee to propose a clarification and widening of the powers of Oftel, but within the current framework of Oftel's existing powers and concurrency. We do not believe that a more radical review of Oftel's powers would be appropriate for the Bill. It needs to be dealt with in the context of telecommunications and broadcasting generally, which the Government are reviewing. We expect to launch a consultation on these matters in the spring. We shall talk about the scope of Oftel; we shall talk about the telecommunications sector and broadcasting generally; but we must have a starting point in a very dynamic market, and this is about the starting point.

To help define the starting point we have said clearly that flexible rules need to be drawn up to make clear within the prescribed legal scope who does what. Rules need to change and adapt as necessary. I am slightly fearful that my noble friend Lord Desai has already defined only five years as the lifetime of the rules; that worries me. But, who knows, in five years' time I may be elsewhere. Let us define the rules that we need today and make clear as part of the rules to whom notification should be made. This is a matter for the Director General of Fair Trading, consulting regulators, to decide in the first instance, under Clause 49 of the Bill. Rules are, however, to be subject to consultation, approval by the Secretary of State and the parliamentary process, so there will be further opportunity to make sure that they are clear and adequate. They will not drop like pennies from heaven; they will be consulted on. There is further scope for clarification of the role of individual regulators in the advice and information to be prepared under Clause 50.

We have tried to describe a framework in which, as I believe I observed at Committee stage, in a dynamic marketplace sensible men will speak and work together under a format of rules which will be flexible and capable of taking into account the dynamism of the marketplace, which we all wish to encourage and make more competitive.

I believe that that is wholly consistent with everything we have said to date on the subject of concurrency, but I believe it will be helpful for the record if I now turn to Amendments Nos. 170 and 171. Those amendments would very substantially limit the ability of the Director General of Telecommunications to use his concurrent functions under the Bill. If this kind of restriction were right for the Director General of Telecommunications, by implication it would be right for the other regulators. The Government do not accept that it would be right to have any such restriction.

Each of the utility statutes provides that before either the regulator or the director general exercises concurrent functions in a particular case he shall consult the other; and once one of them has taken action the other is barred from doing so. When they consult, I would expect the regulator and the Director General of Fair Trading to be able to reach agreement on which of them is best placed to take action. This will be in a context where procedural issues on concurrency will be dealt with in rules under Clause 49 and advice and information under Clause 50. The letter of 6th February from the Director General of Fair Trading, to which I referred on the second day of Report, described the progress which has been made by the working party of the Office of Fair Trading and regulators which is already considerable. For example, they have agreed on a central public register of notified agreements and a single notification point.

These amendments would put an override on the consultation between regulator and the Director General of Fair Trading. Effectively it would mean that wherever it appeared to the director general that a matter fell, even partly, within a set of criteria, he would have exclusive jurisdiction, to the exclusion of the regulator. There would be no consideration as to which of them was more appropriate; only the director general would be able to act. Freely adapting the words of my noble friend Lord Desai, I think we would have defined the chief honcho. And, in each of these amendments, some of the criteria seem wide enough to suggest that the director general could end up dealing with a large proportion of the matters which would otherwise fall within the scope of a regulator's concurrent powers. I do not believe that such a mechanistic approach is appropriate; and I certainly do not believe it would be right to provide concurrent functions for regulators and then allow a large part of those concurrent functions to be clawed back.

Similarly, I do not believe it would be right for rules to prescribe whether it is the director general or the regulator who should act on a matter which falls within the scope of the regulator's concurrent jurisdiction. It is the Bill which prescribes the scope of concurrent jurisdiction. I am advised that it would not be possible for rules to prevent the director general or the regulator from acting on a particular matter which falls within the scope of the regulator's concurrent jurisdiction.

I do not believe it would be right to provide for the scope of concurrent jurisdiction of the Director General of Electricity Supply to be limited in the way that Amendment No. 171B would seem to do. The amendment would limit the scope of concurrent jurisdiction of the director general in a way which would undermine his powers to act under the Bill. If he acted on a matter which related mainly but not exclusively to commercial activities connected with the generation, transmission or supply of electricity, he would be exposed to the risk of legal challenge. This would he unacceptable.

However, I should like to refer back to a commitment I made during Committee on the issue of sensible men talking to sensible men and finding a sensible way to work together, to reflect on whether an amendment to the Bill may he needed to provide flexibility for a regulator and the director general to work together on investigations where both agree that this would be helpful (Official Report, 25/11/97: col. 915). We have therefore been considering the particular provisions in utility statutes that require the regulator and the director general to consult before either takes action; and for one to he barred from taking action once the other has done so. These seem to raise concerns about preventing the director general and regulators from working together, even where that would clearly he helpful, and about preventing a case being switched between a regulator and the director general even where a change of circumstances makes that appropriate. We are continuing to reflect on these provisions but, if we decide that changes are needed, they will have to be brought forward in another place. We are reflecting seriously on this issue which was raised in Committee.

Amendment No. 164E would not have the effect of removing concurrent functions. In any event, I have made clear that the Government believe it is right for regulators to be able to exercise functions concurrently with the director general.

Amendment No. 225 seems to be looking for yet another bite at the issue of concurrency right at the point where provisions of the Bill are being brought into effect. I could not accept that. The issue is being fully debated during the passage of the Bill. There will be wide-ranging consultation following publication of the utilities review Green Paper. I do not accept that there is any need for further debate at Report stage.

I have tried to recapture again—I hope just one more time—the reason why we believe concurrency to be fundamental to achieving true competition. I set out as per the letter of 6th February how the director general and the regulators are going about setting up a process of flexible rules that make clear that we are attending carefully to the issues on the table. Also, we are reflecting on an amendment to make the working together of the director general and a specific regulator under certain circumstances more flexible and supported. In those circumstances, I urge the noble and learned Lord, Lord Fraser, and the noble Lord, Lord Kingsland, to withdraw the amendment.

7 p.m.

Lord Kingsland

My Lords, I thank the Minister for that comprehensive reply in which he not only dealt with the amendments, but also with the wider aspect of concurrency.

In dealing with that wider aspect, the Minister made an observation to which I feel compelled to respond. He talked of the desirability of concurrency in the context of competition. In so saying, he made an assumption that the responsibilities for competition under the Bill are the same as the responsibilities for competition under whatever specific regulatory regime is under review.

The truth of the matter is that those responsibilities—for example, in the telecommunications sector—could not be more different. Under the Bill the responsibilities of the regulator will be reactive and adjudicatory, almost quasi-judicial, and very clear procedures will be set out to enable the regulator to fulfil that function. On the other hand, the competition responsibilities that the regulator has under his specific regulatory statute are quite different. They are not reactive; they are not adjudicatory; they are what I understand economists term "structural". He is there under his Telecommunications Act to promote competition; to change the structure of the industry if necessary; to make it more competitive. This is competition in an entirely different context. It would be extremely dangerous for the telecommunications regulator to confuse the two. That is just one example of why putting a bridge into the Telecommunications Act which was not there before is so dangerous. I have not heard the Minister address that specific matter. I hope that at some time in the course of the evening—these amendments are perhaps not the most appropriate—he will give your Lordships' House the benefit of some further reflections on the matter.

A second related but distinct point is that if the telecommunications regulator, the electricity regulator, the gas regulator or whichever regulator we are discussing, seeks to enforce against a regulatee, once the Bill is on the statute book, he now has not only one set of legally enforceable rules, but two. He has complete discretion as to which one he chooses, to enforce whatever he chooses to enforce. He is entitled to address himself not just to his responsibilities under the Bill, but also to his responsibilities under the regulation Act at the same time. That is a recipe for uncertainty among the enterprises subject to his jurisdiction. Inconsistency and uncertainty are enemies of enterprise and competition. If the Minister tells your Lordships' House that concurrency is a good thing, he must rebut those two allegations.

I listened to the noble Lord, Lord Borrie, with great interest. He has unmatched experience in this area. For 10 years he was Director General of Fair Trading. I shall certainly not accuse him of not keeping up with what has been going on since then. He has been most assiduous in attending all the stages of this Bill before your Lordships' House. But up to now the role of the Director General of Fair Trading has been a preliminary role in the adjudicatory process. He looked at the problem; made an assessment; took a decision and passed it on to somebody else. That is a very different world from the world into which Her Majesty's Government are about to take us. The informal arrangements—the casual chats on the telephone; the ad hoc meetings summoned in order to resolve a particularly knotty problem—may be highly appropriate to the old informalities of competition law, but it will not do where there are eight or nine regulatory directors who have jurisdictional enforcement powers in addition to those possessed by the Director General of Fair Trading.

I apologise to the Minister, but the offering that he served up in summing up the debate was too potent to resist. I had to reply more generally. I do not ask him to come back all at one go now. I thank him for the noble concession that he made on consultation. I hope that he will reflect on Amendment No. 159A and, in those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Haskel moved Amendment No. 159B:

Page 24, line 41, leave out from ("section") to end of line 43 and insert ("he must consult such persons as he considers appropriate.

() If the proposed rules relate to a matter in respect of which a regulator exercises concurrent jurisdiction, those consulted must include that regulator.").

The noble Lord said: My Lords, we spoke to this amendment when it was grouped with Amendment No. 135B and we considered it on day two. I beg to move.

On Question, amendment agreed to.

Schedule 9 [Director's Rules]:

Lord Haskel moved Amendments Nos. 160 to 162:

Page 68, line 2, after first ("the") insert ("documents and").

Page 68, leave out lines 24 and 25.

Page 69, line 30, at end insert—

("Directions withdrawing exclusions

. Rules may make provision as to the factors which the Director may take into account when he is determining the date on which a direction given under paragraph 4(1) of Schedule I or paragraph 1A(3) or 6A(3) of Schedule 3 is to have effect.").

The noble Lord said: My Lords, we spoke to these amendments with other amendments on day two. With the leave of the House I shall move them en bloc. I beg to move.

On Question, amendments agreed to.

Lord Simon of Highbury moved Amendment No. 162A:

Page 69, line 30, at end insert—

("Disclosure of information

.—(1) Rules may make provision as to the circumstances in which the Director is to be required, before disclosing information given to him by a third party in connection with the exercise of any of the Director's functions under Part to give notice, and an opportunity to make representations, to the third party.

(2) In relation to the agreement (or conduct) concerned, "third party" means a person who is not a party to the agreement (or who has not engaged in the conduct).").

The noble Lord said: My Lords, we brought forward this amendment in response to points made in Committee about the need to warn third parties before publishing information which they had disclosed to the director.

The question of the protection of information obtained under the Bill is obviously an important one. We shall debate it further later. It was debated at length in Committee and there are later amendments tabled which relate to the same issue. We have, of course, taken great care in framing the provisions in the Bill which restrict the disclosure of information. However, we felt that there was considerable force in the argument put to us in Committee that third parties should be forewarned before the director published information provided by them. In particular, my noble friend Lord Graham spoke of a, procedure whereby the director who intends to disclose confidential information would advise a third party of his intention before the information was published".—[Official Report, 25/11/97; col. 954.1

My noble friend Lord Haskel undertook to reflect on that point.

We concluded, in the light of the debate in Committee, that it is right that there should be some procedure for third parties along those lines. The amendment therefore makes clear on the face of the Bill that the director's rules may include provisions requiring that he give notice, and an opportunity to make representations, to third parties, before disclosing information which they provided.

The opportunity to make representations is something which was not specifically discussed in Committee, but the Government believe that it would be a useful further safeguard. It would give third parties an opportunity to put to the director any objections they have to particular information being disclosed. The precise details are a matter to be dealt with in preparing the rules, which are of course subject to annulment by either House. There may be some circumstances in which it would not be right for notice and representation procedures to have to apply; for example, where it is necessary for the director to act very quickly. However, it is the Government's clear intention that the director's rules will include rights for third parties of the kind I have explained. I beg to move.

Baroness Nicol

My Lords, I welcome the amendment, which responds to some of the worries we raised at an earlier stage. We shall return to the edges of this subject a little later on. In the meantime, I am grateful for the amendment.

Baroness O'Cathain

My Lords, I welcome the amendment but wish to ask a question. It states: Rules may make provision as to the circumstances in which the Director is to he required Why not say that rules "will" make provision?

Lord Borrie

My Lords, I welcome the amendment, but the issue raises a question in my mind. The third party is usually what one might call the complainant, who is alleging that there is a cartel agreement or some conduct which the director ought to examine. In providing confidential information the amendment is wholly desirable in that he will be consulted before that confidential information which may disclose the identity of the complainant is made known. But one of the other things the complainant may wish to know—indeed, it may be helpful to the director—is the response of the person against whom it is alleged that he has engaged in a prohibited agreement or has engaged in prohibited anti-competitive conduct. I do not see in the amendment any obligation on the director general to disclose back to the complainant the response that has been made so that he may answer it. I wonder whether that is catered for somewhere else. It is surely something in which the complainant will be interested.

Lord Simon of Highbury

My Lords, perhaps I may respond, first, to the issue of "may" and "will". I have stated—I hope clearly—that it is the Government's intention that the rules will include rights for third parties in relation to notice and opportunities to make representations. That is a clear commitment to the House. However, the precise details are best left to rules. We need to be careful not to write into the Bill something which will make the director's job impossible in certain circumstances. The new provisions as drafted retain the flexibility needed to address such points in the detailed rules. However, there will be rules on this matter and those rules will be subject to consultation and parliamentary scrutiny. I hope that that assurance is sufficient to meet the noble Baroness's query.

Perhaps I may turn to whether there is a reconsulting process with the director general. This has not been stipulated, but it is a query to which I pay strong attention and I shall return to the matter with the noble Lord.

On Question, amendment agreed to.

Lord Haskelmoved Amendment No. 163:

Page 69, line 45, at beginning insert ("the documents and").

The noble Lord said: My Lords, we considered this amendment on day one, when it was grouped with Amendment No. 32. I beg to move.

On Question, amendment agreed to.

Clause 50 [Advice and information]:

[Amendment No. 164 not moved.]

Lord Haskel moved Amendments Nos. 164A and 164B:

Page 25, line 36, leave out from ("section") to end of line 37 and insert ("he must consult such persons as he considers appropriate.

() If the proposed advice or information relates to a matter in respect of which a regulator exercises concurrent jurisdiction, those consulted must include that regulator.").

Page 25, line 42, at end insert ("; and

(c) such other persons as he considers appropriate.").

The noble Lord said: My Lords, we considered these amendments when we debated Amendment No. 135B on day two. I beg to move.

On Question, amendments agreed to.

Clause 51[Fees]:

Lord Simon of Highbury moved Amendment No. 164C:

Page 26, line I, leave out subsections (2) and (3) and insert—

("(2) Rules may, in particular, provide—
  1. (a) for the amount of any fee to be calculated by reference to matters which may include—
    1. (i) the turnover of any party to an agreement (determined in such manner as may be specified);
    2. (ii) the turnover of a person whose conduct the Director is to consider (determined in that way);
  2. (b) for different amounts to be specified in connection with different functions;
  3. (c) for the repayment by the Director of the whole or part of a fee in specified circumstances;
  4. (d) that an application or notice is not to be regarded as duly made or given unless the appropriate fee is paid.
(3) In this section—
  1. (a)"rules" means rules made by the Director under section 49; and
  2. (b)"specified" means specified in rules.").

The noble Lord said: My Lords, as my noble friend Lord Haskel explained in Committee (at col. 907 of the Official Report on 25th November) it was put to us when we consulted on the draft Bill that it might be useful if fees could be set in relation to a person's ability to pay. This amendment would enable that to be done. I should say that Ministers have not decided that the power to charge fees on any basis should be exercised, but we agree it would be useful were the director to have this additional option of setting fees by reference to a person's turnover. Any rules to set fees would be made by the director under Clause 49. They would therefore require to be approved by order by the Secretary of State before coming into operation and could be modified, varied or revoked by the Secretary of State as provided for in that clause. The order would be subject to annulment by resolution of either House of Parliament.

The amendment amends Clause 51 in two further ways. First, it provides that the rules may make provision for the repayment of the fee in whole or in part by the director in specified circumstances. This might be appropriate, for example, where a fee was set for the giving of guidance on an agreement and the application was withdrawn shortly after it was made. Secondly, the amendment provides that the rules may provide that an application or notice is not to be regarded as duly made or given unless the appropriate fee is paid. I beg to move.

Baroness O'Cathain

My Lords, perhaps I may ask a question for clarification. I am really arguing against myself now, having listened carefully to the Minister on the previous amendment about "may" and "will". The amendment states, for the amount of any fee to be calculated by reference to matters which may include … the turnover. I take it that that means that the Government are allowing flexibility. I am sure that the Minister is as aware as I am that turnover does not necessarily indicate a person's ability to pay.

Lord Simon of Highbury

My Lords, I quite agree. That is why we have used the word "may".

On Question, amendment agreed to.

Clause 51, as amended, agreed to.

Clause 52 [Regulators]:

The Deputy Speaker (Lord Skelmersdale)

My Lords, before calling Amendment No. 164D, I should say that if it is agreed to, I cannot call Amendment No. 164E.

Lord Simon of Highburymoved Amendment No. 164D:

Page 26, line 6, leave out subsection (1).

The noble Lord said: My Lords, with the leave of the House, I should like to speak also to Amendments Nos. 164F, 168A, 171E, 171F, 174B, 174D, 174F, 174H and 174J.

Amendments Nos. 174D and 164F are drafting changes. They provide a reference in Clause 52 to the separate parts of Schedule 10 on concurrency. Amendments Nos. 171E, 171F, 174B, 174D, 174F, 174H and 174J relate to disclosure provisions in utility statutes and are for clarification. Because the concurrent powers of utility regulators are provided within their utility statutes, it might be argued that where they obtain information in exercising functions under this Bill it is nevertheless the disclosure provisions of the utility statutes that apply rather than Clauses 53 and 54 of the Bill. These amendments make it clear that it is the disclosure provisions of the Bill that are to apply, not those in the utility statutes. We shall be discussing disclosure more fully a little later. Meanwhile, I hope that noble Lords will be content to accept these amendments for clarification.

I now turn to Amendment No. 168A. At Committee stage I said, in response to an amendment from the noble Baroness, Lady Dean, to the scope of the Director General of Telecommunications' concurrent powers, that while I was not convinced that any change was needed, I would reflect further. I have now done so and I have come to the view that, in response to the concerns raised, a small technical change would be a necessary and useful addition to the scope. This change represents both a clarification and a widening of the scope of concurrent powers, but it is within the current framework of Oftel's existing powers and concurrency.

The proposed amendment replaces the phrase, which relate to commercial activities connected with telecommunications with which relate to the production, supply or acquisition of telecommunication apparatus or the supply or securing of telecommunication services. The term, commercial activities connected with telecommunications is a defined term in the Telecommunications Act 1984 and the proposed amendment essentially takes the elements of the defined term and adds the words "or securing" before "telecommunication services".

This is a modest amendment that would extend concurrent powers under the Bill but not beyond those conferred by the Telecommunications Act 1984 and would reflect the 1984 Act wording used in respect of concurrent powers under the Competition Act 1980. I beg to move.

Lord Fraser of Carmyllie

My Lords, we have no difficulty as regards the large number of amendments proposed by the Government. As the noble Lord will have anticipated, we have a difficulty with Amendment No. 168A. The noble Lord was full enough in his explanation to admit that the change of definition would have the effect of extending concurrency within the Bill itself. It would be to run against the grain of all that we have been arguing for, not only at this stage of the Bill but earlier, if we were to say that we approved of this amendment. I would prefer that the noble Lord did not move Amendment No. 168A when we reach it. I am not entirely convinced from the argument that he advanced that it is necessary even to meet his own needs. It would certainly be objectionable to us.

I appreciate that the noble Lord intends to move it only as a clarifying amendment, but to some extent it is somewhat inflammatory as we begin to get into the debate about concurrency. Any proposal, far from being any attempt to meet us on the points of concern that we have about concurrency and in fact extending what is going on, makes us extremely uncomfortable.

Lord Simon of Highbury

My Lords, I quite understand the position that the noble and learned Lord puts to me. I shall reflect very strongly on the issues. It is an amendment for clarification relating to sets of competences together. If it is thought that we have not achieved the right clarification, I am certainly willing to take the matter away and reflect again.

On Question, amendment agreed to.

Lord Haskel moved Amendment No. 164F:

Page 26, line 9, at end insert: ("(2A) Parts II and III of Schedule 10 provide for functions of the Director under this Part to be exercised concurrently by regulators. (2B) Parts IV and V of Schedule 10 make minor and consequential amendments in connection with the regulators' competition functions.").

My Lords, we have already spoken to this amendment. I beg to move.

On Question, amendment agreed to.

[Amendment No. 165 not moved.]

Schedule 10 [Regulators]:

Lord St. John of Bletso moved Amendment No. 166:

Page 70, leave out lines 24 and 25.

The noble Lord said: My Lords, in moving this amendment I shall speak to Amendment No. 167. I understand that the noble and learned Lord. Lord Fraser, and the noble Lord, Lord Kingsland, will be speaking to Amendments Nos. 168, 171H. 171J and 171K. I also understand that they may be speaking to Amendments Nos. 172. 173, 174 and 174A.

While I recognise that the Government are committed to introducing concurrent powers to the regulators in this Bill, these amendments would ensure that the functions under the Bill, when exercised by the Director General of Telecommunications, are exercised on the same basis as they would be exercised by the Director General of Fair Trading.

These amendments are specific to the information technology field. Amendments Nos. 166 and 167 would reverse changes which Schedule 10 to the Bill proposes should be made to the Telecommunications Act 1984 to merge the job of the DGT as a regulator with his new job under the Bill. The amendments, therefore, would concern the important issue, which we debated at Second Reading as well as in Committee, of the relationship between the new jurisdiction of regulators under the Bill and their continuing jurisdiction under the various statutes that created their offices and set out their statutory remits.

As I see it, the current situation is that Section 3 of the Telecommunications Act 1984 sets out the DGT's regulatory—if I can call it—"job description". The Act sets out how the DGT can achieve those objectives. Essentially, he has the powers to enforce licences granted under the 1984 Act. The DGT is vested with the same competition functions as the DGFT. Under the 1984 Act there is a distinct separation of powers. The regulatory job was kept separate from the competition law job. Therefore, when the DGT acts as a competition authority he acts as if he had no other job in the same way as the DGFT would.

In essence my amendments would preserve the existing legal arrangements under the 1984 Act whereby the two jobs are kept separate and would ensure that the powers to be vested in the DGT under this Bill could not be used to achieve his regulatory objectives or job description. This would in no way prejudice the efficacy of his concurrent functions under the Bill but would ensure consistency when the DGT exercises his powers under the Bill (including enforcing the prohibitions) since he would do so on the same basis as the courts, the DGFT and the tribunal within the competition commission would do. This argument was eloquently rehearsed by the noble Lord, Lord Kingsland, in speaking to the group of amendments with Amendment No. 159A.

Following my recent meeting with the Minister, I believe that he shares my concerns that the Bill should provide a simple, workable and effective arrangement for the new competition laws. My amendments would further these objectives. They would ensure that concurrent jurisdiction exercised by the DGT with the DGFT under the Bill would be exercised on a consistent basis. I do not believe that Section 3(3) of the 1984 Act should be narrowed as paragraph 2(3) of Schedule 10 proposes. Amendment No. 166 would achieve exactly that.

I recognise the Minister's concern that when a regulator discharges his functions under the Bill he must treat those functions as paramount. In other words, when he acts as a competition authority, pursuing the objectives of the Bill, any conflict with his objectives as a regulator should be resolved in favour of the Bill. I am not convinced that the current drafting of paragraph 2(4) of Schedule 10 achieves that objective.

It seems to me that the purpose of regulation and the purpose of competition law are different. Competition law protects the competitive process. Regulation is concerned with many other and varied objectives. There should not be confusion between the creation of competition and the protection of competition.

The noble and learned Lord, Lord Fraser, referred to a letter which was sent to various noble Lords by Oftel. In that letter, dated 17th February, the director general stated of Amendments Nos. 166 and 167: These amendments identify a distinction to be drawn between a regulator's sectoral statutory duties and those under the Bill. They are correct to do so. Under the existing framework I am unable to have regard to my Telecommunications Act duties when acting under general competition law. I believe that I would, as a matter of practice, be hound to maintain that approach to cases under the Bill. Therefore, although the Bill, as drafted, would not prevent me from doing so, there is a case for putting the matter beyond doubt".

If the DGT exercises powers under the Bill and leaves his sectoral objectives to one side, it seems to me that the functions that he is exercising—that is, those under the Bill—will then be "paramount".

If the amendments are not accepted, Schedule 10 would enable the DGT to have regard to matters even if they would not otherwise be relevant when exercising Bill powers, and would appear to allow the DGT to base his decisions upon matters which the courts, the DGFT and the tribunal would not be able to base their decisions upon. There would, therefore, seem to be an incompatibility between the provisions of Schedule 10 and the governing principles set out in Clause 58. Rather than Clause 58 prevailing, which I believe is the Minister's intention, it seems that Schedule 10 would prevail. I beg to move.

7.30 p.m.

The Deputy Speaker

My Lords, as Amendment No. 167 is grouped with Amendment No. 166, I should advise the House that if Amendment No. 167 is agreed to, I shall not be able to call Amendment No. 168.

Viscount Trenchard

My Lords, I should like to speak in support of Amendments Nos. 166 and 167. We have come a long way since we debated the Bill at Second Reading. I welcome the co-operative approach which the Government have in general adopted in seeking to improve the Bill and to remove the imperfections in it which compromise the paramount need for consistency and clarity in the application of competition law. Unfortunately, however, the concurrent powers which the sectoral regulators and the DGFT will exercise under the Bill remain a potential cause of confusion and muddle. I wholly agree with what my noble friend Lord Kingsland said a little earlier on the subject.

As noble Lords are no doubt aware, investment decisions in a competitive environment require a clear and unambiguous regulatory framework with as little room as possible for uncertainty and inconsistency in the application of laws and regulations. The Bill as presently drafted vests new and comprehensive competition law powers in the sectoral regulators, but does not clearly separate those powers from those which sectoral regulators already possess, and will continue to possess, for a variety of purposes, some of which overlap and others of which may conflict with the objectives enshrined in the Bill.

I suggest that that is a recipe for confusion and uncertainty which may well tend to delay or prevent investment decisions, thus weakening the competitive position of British businesses with a consequent negative effect on both employment prospects and customer services. It is surely undesirable that the Bill does not specify clearly the respective circumstances in which powers will be exercised by the DGFT and the sectoral regulators.

I recognise, however, that the Government are committed to granting concurrent powers. The more serious problem, as the noble Lord, Lord St. John of Bletso, clearly pointed out, is that sectoral regulators may, or are possibly required to, have regard to their various other functions when they exercise their powers under the Bill. This clearly means that their conclusions may not always be the same as would be those of the DGFT who does not have other, possibly conflicting, responsibilities deriving from powers granted otherwise than in the Bill in considering the same matters.

The sectoral regulators have responsibilities to seek to achieve objectives which have no connection with the principal purpose of this Bill, which is to protect competition. These responsibilities should be clearly isolated from their responsibilities under the Bill. The new powers granted to the sectoral regulators under the Bill are considerably greater than those which it has been felt that they should exercise hitherto. It is, therefore, all the more important to define clearly the circumstances and contexts within which they may be used.

In order to thrive in today's competitive market, business undertakings need certainty and consistency in the application of the law. These laws include unclear terms such as "abuse". The provisions for the issue of procedural rules contained in Clause 49 will not explain what abuse of dominance is. Any advice or information provided by the director under Clause 50 will be only non-binding and cannot be comprehensive. Certainty cannot be obtained through the alignment provisions of Clause 58 because EU case law remains under-developed, patchy and in part conflicting. Much will, therefore, be left to the discretion of those applying the new laws on a case-by-case basis.

Amendments Nos. 166 and 167 are necessary to ensure that when the Director General of Telecommunications acts under his Bill powers he does so consistently with the way in which the Director General of Fair Trading would act.

Amendment No. 168, which has been tabled by my noble and learned friend Lord Fraser of Carmyllie and my noble friend Lord Kingsland, and which I also support, establishes consistent treatment with what would be the case in the European Court.

These amendments, if adopted by your Lordships, will help to remove confusions and to procure a greater degree of clarity and consistency in application of the extensive powers granted by the Bill. They would promote alignments with the European law principles referred to in Clause 58. They would avoid the perhaps unintended situation where regulators and regulatory goals depart from the Bill's objectives and processes.

Schedule 10 should be amended to avoid misalignment with European law principles and to ensure that Clause 58 is not overridden. These amendments will not have any adverse or inhibiting effect on the effectiveness or the working of the Bill. I hope that the Minister will support their introduction.

Lord Kingsland

My Lords, Amendment No. 168 is a second-best amendment. It refers also to the telecommunications sector. The noble Viscount, Lord Trenchard, has already alluded to it. Essentially, where there is a conflict between the objectives of the Bill and the objectives of the Telecommunications Act, it seeks to require the Bill's objectives to be paramount except in circumstances where the regulatory objectives are "relevant". "Relevant" is defined as what would be relevant to the European Court of Justice if it were directing its mind to the matter. That is not an ideal solution but it offers the Minister an alternative should he have any reservations whatsoever about the previous two amendments.

The telecommunications sector is not the only one with worries about the bridge. In the Telecommunications Act there is no bridge; that is what distinguishes it from all the other utility sectors. But the bridge that exists in the other utility sectors is very different from that which the Minister proposes. There are two reasons for this. First, the competition component that forms part of the bridge in the other sectors is much weaker than the one proposed in the Bill. It is an alloy of the Fair Trading Act 1973 and the Competition Act 1980. Secondly, the present powers of the regulator under the existing bridge in those two Acts are very light indeed; in particular, they are not enforcement powers. What is proposed by maintaining the bridge in all these other sectors, therefore, is much more dramatic than it seems superficially. In effect it is as dramatic a change as that proposed by the Minister for the telecommunications sector.

It is absolutely clear that many of the regulatory objectives, desirable though they are in their own context, are in flagrant contradiction to the objectives of the Bill. One example of that, which I believe has been described to your Lordships in the course of the Committee and Report stages, is the provision of universal service in the world of telecommunications. That is a laudable objective which clearly conflicts with the competition objective.

I say to the Minister when looking at these amendments that it is not too late to think again about the wisdom of what is proposed with respect to the bridge. With the greatest respect, it certainly deserves deeper reflection than it appears to have received so far.

7.45 p.m.

Lord Simon of Highbury

My Lords, I am very grateful to the noble Lord, Lord St. John, the noble and learned Lord, Lord Fraser in a previous debate, the noble Lord, Lord Kingsland, and the noble Viscount, Lord Trenchard, for again raising the issue of the relationship between duties under the utilities statute and exercise by the Director General of Telecommunications and other regulators of concurrent functions under the Bill. I certainly do not accept the comment of the noble Viscount, Lord Trenchard, that this is a muddle. It is not. We seek to explain, as we have been challenged to do yet again by the noble Lord, Lord Kingsland, how we can have a framework Bill for competition and at the same time a regulatory process running in parallel.

To date, clearly I have failed to explain my reasoning to the noble Lord, Lord Kingsland. He says that on the one hand an adjudicatory and reactive system, which is what the prohibition is, and on the other hand an interventionist and active system are two separate bodies of thought that can never meet. I do not agree. I believe that we should strive to make them meet. It is most appropriate in dynamic market places to have a framework for a Competition Bill that encourages businesses to run their affairs in the most competitive manner, but with a very large stick to beat them if they do not do that in markets which for years have had none of these opportunities due to the very strange systems that have been adopted in the past for running the utilities. I should not go into that. However, because of that they have had none of these opportunities. We are giving them the opportunities, and I am pleased that we are doing so. The issue is how to bring the dynamic new markets within the framework of the Bill. I do not perceive here polemics that cannot be resolved but opportunities that challenge us.

I do not feel at all muddled. I have listened with very great care to what noble Lords on the Opposition, Liberal Democrat and Cross Benches have put to us as to how best to shape the Bill, particularly in regard to the position of the Director General of Telecommunications who has focused this argument, and other regulators who have a bridge whereas he does not. I have pondered, reflected and listened. In the light of all that I have thought about the provisions of Schedule 10. The result that we wish to achieve is that each regulator must regard his functions under the Bill as paramount and act in accordance with the governing principles set out in Clause 58. That was the point so clearly made by the noble Lord, Lord St. John. At present we have provided that he may have regard to his statutory utility duties although he is not required to do so.

Our policy is that in exercising the functions under the Bill a regulator and the director must each apply the same considerations as to what he may or may not take into account. The reference to "having regard to the statutory duties" was intended to show that the regulator could look at them but was to be circumscribed by the paramount duties under the Bill in doing so. I understand that the Divisional Court in a case involving British Telecom held that the effect of the existing disapplication of the duties of the Director General of Telecommunications under the Telecommunications Act was that he was not entitled to look at them. However, that interpretation was obiter and the court in some future case might come to a different conclusion. We do not believe it is right that a regulator exercising concurrent powers should be prevented from looking at matters covered by his duties; nor that the relationship between the duties and the functions under the Bill should be left subject to uncertainty.

Noble Lords opposite and the noble Lord, Lord St. John, have not accepted that "have regard to" achieves our mutual desire for the regulators and the director to apply the prohibition in the same way as to minimise inconsistency. I have listened carefully to the points that have been made that the ability of a regulator to have regard to statutory duties raises the possibility, however small, of inconsistency in the basis on which the prohibitions are to be applied by the director and each regulator.

The position that we wish to achieve is that a regulator applying the prohibitions is to do so on precisely the same legal basis as the director general. We wish to make that clear on the face of the Bill. I accept the argument that the Government need to table amendments to the Bill in order to achieve that. I hope that with that assurance the noble Lord will be content to withdraw his amendment at this stage.

Lord St. John of Bletso

My Lords, I am grateful to the Minister for his detailed response. Obviously, I found it a little disappointing. He appears to have given me a bit of a stonewall response. I am encouraged to hear that the Minister will consider tabling amendments at a later stage. However, the Minister does not appear to have taken on board my key themes, which are: the separation of powers; the need for certainty in the parameters of those powers; and the need for consistency in the operation of those powers. I believe that there is no such thing as sector specific competition law. It is vital that there is only one uniform national competition law that must be adjudicated on the same basis by all. The Minister recognised the importance of that principle in debate on the first day of Report stage. There remains widespread concern that the mixing of regulatory objectives and those of the Bill is fundamentally flawed. I give notice that I intend to revert to this matter on Third Reading. I am grateful to the Minister for the assurances that he has given. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 167 and 168 not moved.]

Baroness Farrington of Ribbleton

My Lords, I beg to move that further consideration on Report be now adjourned. In moving this Motion, I suggest that we do not return to Report stage before 8.50 p.m.

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