Enterprise Bill

HL Deb 16 July 2002 vol 637 cc1119-66

4.28 p.m.

House again in Committee.

Schedule 1 [The Office of Fair Trading]:

Lord Graham of Edmonton

moved Amendment No. 2: Page 191, line 5, leave out "a" and insert "an independent The noble Lord said: In moving Amendment No. 5 I shall start by making a brief declaration of tangential interest. Until last week I was secretary of the All-Party Group on Retail Industry. I had served in that post for 20 years and someone else has now taken my place. Furthermore, I have a lifelong association with the Co-operative movement. I have consulted with and been consulted by the British Retail Consortium which, as the Committee will be aware, represents 90 per cent of retail sales in this country. Therefore, I know that the Committee will understand that it takes a keen interest in these matters.

The Minister will not need reminding that in its submission at an earlier time the BRC welcomed the proposal to establish the OFT as the statutory authority; called for guidelines to distinguish between day-to-day and strategic matters; and supported a degree of flexibility in the structure and size of the board with a minimum and maximum number of voting members to be specified in the legislation to avoid expanding the board as a way of changing the general tenor of its decisions. It is envisaged that co-opted, non-voting members will provide additional expertise and a majority of outsiders.

As the Minister and Members of the Committee are aware, at present the Bill provides for a chairman and at least four other members. The members may be removed only for incapacity or misbehaviour, which, to some extent, covers the concerns over the nature of the board being changed. During the consultation period, the BRC certainly advised the Minister in no uncertain terms that it was strongly opposed to the idea that the Director-General of Fair Trading should automatically chair the board, and called for an independent chairman. It also called for board members with experience and a reasonable balance of experience and interests to be represented on the board.

Having given the Committee that outline explanation, I simply want to point out that the intention behind these amendments is to try to tackle what one might call the "governance" of the new arrangements. The idea of an independent chairman has been proposed as an alternative to leaving this as an option and appointing the Director-General of Fair Trading as chairman which, I understand, is the current intention. It would remove officials from the OFT board, leaving them the option of being co-opted and thereby retaining the possibility of sitting on working groups and sub-committees.

The amendments tabled in my name seek to limit the maximum number of board members to avoid the possibility of the board being expanded if its decisions are not acceptable to the Secretary of State. We are really talking about four, five, or six members, though the intended number under the Bill is four. Amendment No. 4 seeks to insert reference to a number "no greater than six", and there is a further amendment in this group tabled in the name of the noble Lord, Lord Hodgson, which proposes that instead of four members there should be six. These are matters of judgment and of experience.

The amendments tabled in my name are what I call "benign". Others would call them "probing" amendments; in other words, they are not intended to damage the Bill. The intention is to seek from the Minister some assurance that the fears and concerns that I have expressed may very well be unfounded. I beg to move.

4.30 p.m.

Lord Hodgson of Astley Abbotts

Amendment No. 3A, which is tabled in my name, has been included in this grouping. I must say that I find myself in agreement with much of what the noble Lord, Lord Graham of Edmonton, has just said. In particular, I believe that it is most important to emphasise the independence of the chairman because the heart of this Bill is the creation of a body that is free from political interference.

My amendment seeks to expand the board from four to six members, simply because I believe that four is too small a number. There is a danger that this provision could be too narrowly drawn and, possibly, too introverted. When the matter was raised in debate in another place, the Minister said, "We've put down four, but we always expect to have more than four". I never like that kind of response; indeed, I never feel very happy about it. If we want to have more than four members, it seems to me that we should have more than four and that the Bill should specify that number.

We are talking about a body with a strategic function that is very important to British industry. When we deal later with Amendment No. 14, tabled in the name of the noble Lord, Lord Borrie, we shall no doubt discuss its function and its approach. However, it definitely needs to command public respect and confidence. In my view, a board of four members is insufficiently widely drawn to be able to achieve that aim.

Lord Sharman

I support the general principle behind these amendments. When he spoke earlier, the Minister dismissed the parallels between this Bill and the Financial Services and Markets Act 2000 when it was being considered in this House—the legislation that created the Financial Services Authority. Essentially, we are dealing with the whole issue of corporate governance and accountability. It is the division of responsibility as between an executive authority and those who will govern or supervise it.

When creating bodies that are quangos with enormous power, it seems to me to be eminently sensible for the Government to follow the best principles of corporate governance, which is what these amendments seek to do. The position of chairman and that of chief executive should be separate; there is no rationale for combining them. There should be a sensible division of those responsibilities. I support the amendments.

Lord Hunt of Wirral

The noble Lord, Lord Graham, should be congratulated on tabling some very relevant amendments. I thank my noble friend Lord Hodgson for adding some important points as regards the number of board members involved. As the noble Lord, Lord Sharman, has just pointed out, there is something of an anomaly in the Minister's refusal to acknowledge that there is any precedent in the Financial Services and Markets Act. Indeed, in a rather challenging statement the noble Lord virtually accused my noble friend Lord Kingsland of being a Little Englander—"a throwback to the world of national champions" and Japanese industrialists. In fact, all my noble friend was doing was quoting from the Minister's own Act; namely, the Financial Services and Markets Act 2000.

We are moving to yet another important area that I suppose in many ways lies behind a large part of this Bill. There is a paradox here. At present, everyone refers to the OFT, the Office of Fair Trading; but, in fact, there is no such organisation. There is only a Director-General of Fair Trading. The Government now seek to establish the OFT, which everyone thought was already established—but was not—and to abolish the post of Director-General of Fair Trading. We shall deal shortly with amendments in respect of which I shall be asking the Minister to justify that move.

As regards the setting up of the OFT, the noble Lord, Lord Graham, is quite right to advise us to perhaps draw back and review exactly what we are seeking to establish under the Bill. This is an excellent opportunity to do so. There is a confusion in the mind of the Government regarding the chairman, the chief executive and the director-general. That confusion came to light during the debate in Standing Committee B in another place on 16th April. No doubt Members of the Committee have spent some time reading carefully the Official Report of such debates. When discussing the Office of Fair Trading, Miss Melanie Johnson said that the Director-General of Fair Trading, currently has a wide range of functions in the areas of competition and consumer protection, many of which are being reformed in the Bill. The Government believe that in the light of the reforms, it is no longer appropriate for all those powers to be vested in one individual".— [Official Report, Commons, Standing Committee B, 16/4/02; col. 12.] I return to the confusion. The noble Lord, Lord Borrie, did me a great favour: he referred me to The Sunday Times advertisement, which seeks to preview what the Government are expecting us to do; namely, to rubber-stamp their Bill. In seeking non-executive directors for this strategic board, there is a bland statement in that advertisement that the present Director-General of Fair Trading will be the chairman and chief executive of the board. I repeat what the Minister said in another place; namely, that it is no longer appropriate for such powers to be vested in one individual.

The noble Lord, Lord Sharman, is quite right. No doubt we shall return to the issue a little later in our debates—the issue of vesting all the powers in the chairman and the chief executive and of both those positions being taken by one individual. This emphasises the importance of the points being made by my noble friend Lord Hodgson and by the noble Lord, Lord Graham of Edmonton. We should examine what kind of people will be serving on the board.

Some later amendments seek to ensure that. there will be on the board people who are active in industry and commerce, but the amendments now before the Committee give us an opportunity to consider 'whether members of the board should be employees of the OFT. Presumably, the chief executive would be an employee of the OFT. Some confusion arises, which I hope the Minister will put right.

Then we turn to numbers. With all the powers vested in one person—the chairman and chief executive—it is essential that there be some strong directors. But we are told that if we wish to apply for the position, we will need to commit only a minimum of 30 days out of a total of 365. So that is not 30 days a month, as I suspect the present director-general would say he works; it is a minimum of 30 days a year.

What do applicants need to qualify? They need a strong record at senior level in their own field. There is nothing in the advertisement about independence; nothing about being employees. I am happy to join with the noble Lord, Lord Graham, in requesting an explanation of those matters.

How many board members are there to be? The initial view was that there would be four or five. That was contained in the original press release. But then Melanie Johnson—helpful, as she always is—said in Standing Committee B, We are looking at five to seven members".— [Officiai Report. Commons, Standing Committee B, col. 19] Can the Minister clarify how many will serve on the board? Presumably the department is receiving lots of applications as a result of the advertisement last month, no doubt anticipating a speedy Royal Assent—not, of course, something they can predict. However, when all the applications are in, the department must have in mind exactly how many members there are to be.

We shall discuss in a moment what parts of the economy the board members are to be drawn from. But the only response to the suggestion that the powers must not be vested in one individual is, "We will have five to seven and they need only sit 30 days a year". That is not adequate. I look forward to the Minister's response.

Lord Borrie

I am glad I was able to assist the noble Lord, Lord Hunt of Wirral, by pointing to the advertisement in the Sunday Times. That revealed a number of things, including the fact that the present Director-General of Fair Trading—not myself; I have not held that role for 10 years—Mr John Vickers, is expected to be the chairman and chief executive.

I want to make two points in relation to my noble friend's amendment. First, unlike some Members of the Committee—for example, the noble Lord, Lord Sharman—I do not see any necessary play across from corporate governance and how a specific governmental authority should be run. Therefore I do not automatically see that, in relation to the Office of Fair Trading, the chairman and chief executive should be two separate persons. I remind those Members of the Committee on the Opposition Front Bench who are so fond of the Financial Services Authority that Sir Howard Davies is both chairman and chief executive of that body, although the noble Lord, Lord Kingsland, will remember, as I do, how much disputed that was at the time the Bill went through.

Lord Kingsland

The noble Lord will recall that these Benches fought extremely hard to try to ensure that the position of chairman and director-general of the Financial Services Authority were separately held. It was a battle which, in the end, we lost.

Lord Borrie

That is absolutely correct.

Lord Sharman

I draw the noble Lord's attention to the annual report of the Financial Services Authority in which it justifies the combining of the titles of chairman and chief executive by reference to the fact that executive responsibility is divided among other members of the board, including members who are "managing directors". It concludes, as verified by the independent auditors of that body, that they are in compliance with the Cadbury code which recommends the division of those separate responsibilities.

Lord Borrie

I am grateful to the noble Lord, Lord Sharman. I persist with my original point that I do not necessarily see any write-across from corporate governance in the private field of companies to how a governmental authority should be run.

My other point on Amendment No. 2 is that, as I see it, it is not intended that Mr Vickers should be an employee of the OFT or that the members of the new body will be employees. As the schedule indicates at various points, they will be appointed on a certain salary for a certain period of time and will clearly be different from and unlike the employees of the OFT who would normally be full-time members of the Civil Service. That has been the case since the Office of Fair Trading was set up in 1973. All members of staff were civil servants except the Director-General of Fair Trading whose special provisions, closely followed in Schedule 1, meant that dismissal could only occur on grounds of incapacity or misbehaviour and that the occupant of the post had a five-year contract which, indeed, is being continued.

Therefore the intention is already established that the chairman should be independent and should not be an employee. As for the numbers, I do not have a view. I shall be just as interested as other Members of the Committee in what the Minister has to say.

Lord Sainsbury of Turville

Before it becomes part of the mythology of this debate perhaps I can say that in no way did I dismiss the Financial Services Authority. I felt I was being rather precise in saying that there was not an automatic read-across from the objectives of a Financial Services Authority to the OFT, which is a rather more modest statement of my position.

Amendment No. 2 aims to make the chairman independent. We are doing much in this Bill to increase the independence of the OFT from Ministers and the chairman's role will be consistent with that.

Taken with Amendment No. 3, this amendment would prevent an employee of the OFT being appointed chairman. That is not necessarily the right way forward. As drafted the Bill does not limit who may be appointed chairman. Employees could apply for the post when advertised and be considered alongside other candidates. As Members of the Committee will be aware, we are intending to appoint John Vickers as the first chairman for the remainder of his existing Director-General of Fair Trading term.

In terms of independence we are already taking a significant step in depersonalising regulation by abolishing the post of DGFT and replacing it with a statutory authority—a board. Because of his particular skills and to provide for some continuity through this period of change at OFT. we intend to appoint John Vickers as chairman with no separate appointment of chief executive. I do not accept that there is a parallel here between having a chairman and chief executive and having a board; it is having a board which goes a long way to depersonalise the role. We have said that that is what we are doing. There is no parallel between doing that on the one hand and having the same person as chairman and chief executive, on the other.

The Bill provides for flexibility in the future in this area. John Vickers will lead the OFT through the upcoming period of change, working together with the board. He will be independent of Ministers and accountable for the OFT's actions. Similarly, Amendment No. 5 would prevent OFT employees taking up any OFT board appointment. I am sympathetic to the idea that the board should have strong non-executive representation; that is, people who have not been employed by the OFT. Indeed, we expect the final board to have more non-executive members. But I am not convinced that the board should be entirely non-executive. The Bill does not preclude OFT employees being appointed to the board. It is vital as OFT moves forward that its senior managers, through executive members of the board, are fully engaged in the board process. The board will play an important role in steering OFT through a period of change as it takes forward its new powers and responsibilities and its increased independence from Ministers. It is crucial that the executive team is part of that process. But both executive and non-executive members of the board will be independent of Ministers and bound by the rules on conflict of interest.

Amendment No. 4 would set a maximum number of six members of the OFT board. Amendment No. 3A would change the minimum number of members from four to six.

We have not set a maximum size for the board in the Bill because we believe that some flexibility is important if the Bill is to stand the test of time. We believe that the board will need to have at least five members if it is to hold a sufficient balance and range of skills and experience. I am happy to confirm that, as my honourable colleague said in another place, we expect the final board to be between five and seven members, including the chairman, and with more non-executives than executives. That seems to be about the right size to ensure a good range of expert views and expertise without becoming too unwieldy. But, by building some flexibility into the board size, we can ensure that the practice of board appointment reflects the realities of the time.

I accept that the amendments of my noble friend Lord Graham are benign but I think that they are taken account of in the way that we are setting up the board. In view of these arguments I invite him to withdraw his amendment.

Lord Graham of Edmonton

I am grateful to the Minister. The past 23 minutes has been well spent. I plead in aid the advice I have received from the British Retail Consortium. Its members have expressed their fears, concerns or alarms that what is on the face of the Bill appears to be detrimental to their interests. When I discuss today's proceedings with them, I suspect they will point out how the Minister has explained how he envisages the board developing. With the flexibility that will be given to the new board, I imagine that my colleagues outside the House will be reasonably reassured. I shall consult with them. If necessary, I shall return with another amendment at a later stage. At this point, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 3 to 5 not moved.]

Lord Hunt of Wirral

moved Amendment No. 6: Page 191, line 6, at end insert "of whom at least 50% will be currently active in industry or commerce at the time of their appointment The noble Lord said: Amendment No. 6 seeks to provide that at least 50 per cent of board appointees will be currently active in industry or commerce. My concern relates to the advertisement in the The Sunday Times on 30th June. The extract from the advertisement stated that candidates for the non-executive posts on the strategic board will need to demonstrate a strong track record at senior level in their own field, which could include business". Those are hardly comforting words when I look at the importance of this body and the need for hands-on industrial or commercial activity.

Obviously, I would not want to proscribe too tightly the importance of having a wide range of interests on the board. Equally, we would not want it to be a parking place for former civil servants, although I have considerable respect, as a former Civil Service Minister, for former members of that great service. But, with the OFT having such a key part to play in the economy, we need to ensure that at least half the members, if not more, will have that activity in industry or commerce at the time of their appointment.

I recall a much greater reassurance being given at the time that the Bill was previewed by Mr Byers, the then Secretary of State. In May 2000, in a Department of Trade and Industry press release, he stated that, board members will give a wider range of expertise to the organisation, rather than executive power resting with one person. This will give businesses a stronger voice at the heart of the OFT". Obviously consumers need to have a stronger voice, and I am sure that they will. But why is the advertisement so quiet on that clear commitment that businesses would have a stronger voice by just saying that, candidates could come from business". My concern is reinforced by knowledge of the action by the Director-General of Fair Trading since he took over from Mr Bridgeman. I know John Vickers and I have enormous respect for his experience and expertise. On the Financial Services and Markets Bill we had equal respect for Howard Davies. But it should not in any way influence our overall altitude to legislation which has to last for generations to come.

Mr Vickers has set up a four-member advisory panel that meets monthly to discuss policy., strategy, research and communication. It includes a former editor of the Financial Times and a leading competition academic and author. It may be made clear to me by the Minister that this body is purely advisory. No doubt it was in no way intended to be a shadow board or a pre-cursor to the statutory hoard. But it gives us a feel for the kind of relationship that may exist in the future between the chairman and the chief executive and his strategic board.

I suppose that we could guess from the reaction of the OFT and the director-general that the composition of the new board would be different from that of the advisory panel. It would be helpful if the Minister could give us his more detailed thinking on that point.

When one analyses the powers that will be within this new body, one recognises immediately the 'vital need for people from the heart of industry and commerce to be well represented. That is why I very much hope the Minister will carefully consider the amendment. I beg to move.

Lord Hodgson of Astley Abbotts

I support what my noble friend has just said. His amendment is rather more elegant than mine which refers to the, directors of public limited companies". A great deal of the burden of this legislation will fall on the public limited companies. Therefore, people with practical experience of working on a board of a plc will know what it is like at the sharp end; to be on the receiving end of the decisions of this body. That applies widely, but its sharpest application will be on that body of companies. As my noble friend has said, if this body is to be effective and garner respect for what it is doing it will need real experience. I look forward to hearing what the Minister has to say in order to reassure us on those points.

5 p.m.

Lord Brooke of Sutton Mandeville

I shall be extremely brief, but I also rise to support my noble friend on the Front Bench—in particular, his reference to the advertisement and its reference to business. I have previously cited in this House an advertisement in the Church Times in the 1930s: "Rural curate required (slow left-arm bowler preferred)". On many occasions, the words inside parentheses are more revealing than those outside them. The whole Committee should be grateful to my noble friend and, I gather, indirectly to the noble Lord, Lord Borrie, for having drawn that matter to our attention.

Lord Borrie

It was helpful of the noble Lord, Lord Hunt, to supply that quotation, but it would have been more helpful if he had cited the whole sentence, not just a part of it. Perhaps I may do so. It states: Candidates will need to demonstrate expertise in competition or consumer protection issues, with a strong track record at senior level in their own field, which could include business, regulated industries, or public bodies including NGOs". In other words, the word "include" applies to those other bodies, it is in no way diminishing to the word "business". Such an interpretation would be wrong.

I am pretty sure—this will appear in Hansard, so I hope that this is so—that, among the five to seven members, there will be two people from the world of business, who may well be directors of public limited companies. But, having been a distinguished Minister for many years, the noble Lord, Lord Hunt, knows only too well that it is not appropriate for Ministers to suggest a close limiting of the formula set out in legislation for appointments to such boards.

Lord Sainsbury of Turville

The amendments would write into the Bill that a proportion of the Office of Fair Trading board must be active businessmen at the time of their appointment. I share the Committee's desire for strong candidates from business to apply to be members of the OFT board. Clearly, their experience and insight would be extremely valuable. But we will run a fair and open competition to appoint those members. We want to appoint people with a range of skills, expertise and abilities, as the advertisement demonstrates.

We will be looking for at least some candidates to have a wide ranging and in-depth experience of competition and consumer issues. I see no reason why a former editor of the Financial Times, or a former academic expert on competition policy should not be able to play a part on the board. I draw the Committee's attention to the long and distinguished career of my noble friend Lord Borrie as Director-General of Fair Trading. I may be mistaken, but I do not think that he had long business experience. We want those who are the best people to do the job and who have experience from a wide variety of backgrounds.

I do not think that it would right or fair to say now that any proportion or number of those appointed will come from one background or another—to impose a quota. If we stipulate that a certain number should come from industry, should we then also stipulate that a number should represent consumers? We will appoint the best candidates from the recruitment process. Because of their experience, I hope that a number of those will come from the business community. That would add great value to the board.

In view of those arguments, I invite the noble Lord to withdraw the amendment.

Lord Peyton of Yeovil

I thought that the case for the amendment had been so eloquently and convincingly made by my noble friend that there would be no point in my intervening. Knowing and respecting the Minister as I do, I was reasonably confident that he would say that he could not accept the amendment because he did not like its drafting or because the point was made sufficiently elsewhere in the Bill. The latter is a powerful argument when dealing with a Bill of this length. I should be the first to admit that there are many things in the Bill that may still surprise me. I am not aware of what every line in this compendium says.

What caught my ear and my attention was the Minister saying, "We will choose the best people". I should be happy to think that all Ministers had the same acumen, intelligence and experience as has the noble Lord. But unfortunately and unhappily, that is not so. Were another Government to be in power, I can well hear myself saying exactly the same. I do not always feel total confidence in Ministers when they say that they intend to appoint the best possible people.

Personally, like my noble friends, I look for some assurance that people with adequate current experience of business—people who know what can be the impact of such laws—will be on the board as a certainty. That is not much to ask. I am astonished by my moderation, but the very least that the noble Lord should say is that he has been much impressed by the weight of argument, that he will take the matter away to consider it and may return to it later.

Lord Hunt of Wirral

What a wonderful performance by my noble friend Lord Peyton. When I hear him make speeches in this wonderful Chamber, I am always impressed by the cogency of his argument. When his argument is in support of an amendment that I have moved, I find it overwhelming. He is absolutely right. Although the noble Lord, Lord Borrie, may like to read the whole of the advertisement, there is a huge difference between an advertisement that says that a strong track record, that could include business, regulated industries, or public bodies including NGOs", and what Mr Byers said of the setting up of this new body. He said: This will give businesses a stronger voice at the heart of the OFT". My noble friend Lord Hodgson made a good point: we are discussing a new body—I almost said, "a new body, not an old Borrie"; but that would not be courteous. I am sure that the noble Lord, Lord Borrie will agree that the Director-General of Fair Trading is now—and in particular, will be in the new body—a different person with a different range of functions from those which the noble Lord assumed when he was first appointed.

We shall have to go away to think carefully about what the Minister has said, because he has not given us the reassurance that we sought. But for the moment, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 6A not moved.]

Lord Kingsland

moved Amendment No. 7: Page 191, line 7, after "chairman", insert "and shall secure his consent The noble Lord said: I can be extremely telegraphic in moving this amendment. Schedule 1(1)(2) states: The Secretary of State shall consult the chairman before appointing any other member". The amendment would add, after the word "chairman", the words "and shall secure his consent".

The purpose of the amendment will be patently clear to the Minister: there is not much point consulting the chairman if he is then ignored. The chairman is entitled to a board with which he is confident that he can work. Consequently, the drafting of Schedule 1(1)(2) is inadequate. I have suggested the expression "and shall secure his consent". I should be perfectly content with another form of words that had the same effect. I beg to move.

Lord Sainsbury of Turville

The amendment would give the chairman of the Office of Fair Trading a veto over appointments to the OFT board. It is certainly our intention that the chairman should play a full and active role in the selection of board members. The schedule already provides for him to be consulted by the Secretary of State on such matters. It is important that the chairman has board members with whom he can work, but it would be wrong for the chairman to have the final say. OFT board members will, ultimately, carry out their responsibilities on behalf of the Crown. It is imperative that the Secretary of State has confidence in board members, and, for that reason, she should have the final say in appointments.

Appointments to the OFT board will be made following Nolan procedures, with an open competition. For the first appointments, John Vickers will be a member of the selection panel that will make recommendations to the Secretary of State on the final appointments. He will therefore be fully involved. Future appointments will also be made in an open and accountable way, following the Nolan rules.

I hope that that reassures the noble Lord, and I invite him to withdraw the amendment.

Lord Kingsland

I am grateful to the Minister for his response, but it did not surprise me. I shall reflect on what he said. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Graham of Edmonton

moved Amendment No. 8:

Page 191, line 8, at end insert— (3) The Board shall be broadly representative of interests in the area of responsibility of the OF. The noble Lord said: In moving Amendment No. 8, I shall speak also to Amendment No. 9.

I am one of those people who, sometimes, get irritated when people insist that they want words in the Bill, rather than accept ministerial assurances. I am in the happy position of being able to say that, if the Minister can assure me that the purport of the amendments is in his mind and the mind of his advisers, I shall be content. He has already gone some way towards that in the debates in the past hour. I want the Minister to say that the thrust and intention of the amendments is well understood, even if it is not necessary to make them.

So far, the Minister has eased the situation somewhat. He told us that the size of the board could go up to seven members, rather than sticking rigidly to a membership of four. That strengthens the board. In his responses to other amendments, the Minister has clearly indicated that the scope of the Bill is important. It will have a huge impact on business and economic affairs in this country. A great deal of expertise is available, and I hope that, when we hear of the appointments, we can be satisfied that all sectors of the economy and of life in this country will feel that there is somebody there with experience of their position. I have some little knowledge of retail, and it will be good if there is someone on the board—not necessarily a retailer—who can be seen by the retail world as knowing what he or she is talking about.

I put forward the amendments in the confident hope that the Minister will tell us that they are unnecessary and that the Bill will, as intended by his ministerial colleagues, give effect to the provisions in the amendments in some other way. I beg to move.

5.15 p.m.

Lord Hunt of Wirral

I support the amendment proposed by the noble Lord, Lord Graham of Edmonton, but I must start by saying how surprised I was that the Minister—I looked in his direction—did not respond to the telling intervention of my noble friend Lord Peyton of Yeovil. The amendments proposed by the noble Lord, Lord Graham of Edmonton, make the same telling point. I hope that the Minister will do my noble friend the courtesy of responding to him.

It is vitally necessary for the board to be broadly representative of interests in the OFT's area of responsibility. I did not intend, in any way, to disparage the editor of the Financial Times; there can be a wide range of interests represented on a board. However, if the board is to be composed of retired civil servants, authors and journalists, it will lack the substance that we seek. It was not necessary for the Minister to defend the editor of the Financial Times. The director-general had already said, as had the OFT, that the advisory committee was, in no way, intended to mirror the board that might be set up or its character.

The Committee wants reassurance from the Minister about the sort of people that he and his colleagues intend to appoint. Normally, as my noble friend Lord Peyton of Yeovil would remind me, when a Minister places an advertisement in a newspaper, not only does he approve the wording but he will probably have in mind already the range of people that he would like to see responding to it. The Minister does not just sit in his office and hope that someone somewhere will apply. He should already have some view of the ideal board.

Why does not the Minister throw away the brief, just for a moment? He should certainly not listen to the whispered comments of the noble Lord, Lord McIntosh of Haringey. The Minister should tell us about the ideal board and tell us what he would he like to see. If he did, influential people such as my noble friend Lord Peyton of Yeovil and the noble Lord, Lord Borrie, will leave the Chamber and go out as emissaries for that ideal board, so that we can ensure that the necessary people apply—if only we had some idea of what the Minister intends. Will he tell us?

Lord Sainsbury of Turville

I am happy to reply to the noble Lord, Lord Peyton of Yeovil. I did not think that it was necessary because the main burden of his speech was that the noble Lord, Lord Hunt of Wirral, had spoken brilliantly in support of the amendment and that it had his full support. Then, there were some charming comments aimed at blandishing the Minister into changing his views. I did not think that it was for me to intervene as the noble Lord paid those compliments to the noble Lord, Lord Hunt of Wirral. I thought that the compliments were entirely justified, just as I do not agree with the argument put forward.

Lord Peyton of Yeovil

I was making a simple point. Without being too confident, I had a slight hope that the Minister might be moved to say that he would consider the point—nothing more. It greases the wheels and makes everyone feel better when such remarks are made. They do not always lead to a useful result, but they help. I am much obliged to my noble friend Lord Hunt of Wirral for his support. If, every now and again, Ministers could rub out the word "reject", which appears at the bottom of the brief, it would make a nice change. We might feel that summer was here at last.

Lord Sainsbury of Turville

I have rubbed out a few, but they come later in the proceedings.

The amendments seek to ensure that the OFT board is made up of people who are representative of the key areas of OFT responsibility and that such people would not be disqualified from taking up board appointments on grounds of conflict of interest. The noble Lord, Lord Hunt of Wirral, suggested that I state clearly what sort of people we want to see on the board. Above all, we want to see a range of people who can represent different interests; they may be businessmen, academics, lawyers or representatives of consumers' interests. They should be united by the fact that they represent a range of interests, and they should be extremely able people who can bring different kinds of experience to the board.

However, I do not think that we should lay down quotas of what is needed. As I have said, we are holding a fair and open competition for board posts in accordance with Nolan procedures. We want to appoint the best people in order to give the OFT a strong and strategic board with a balance of skills, expertise and abilities. We shall be looking for at least some candidates with a wide-ranging and in-depth experience of competition and consumer issues, but we are also looking for other forms of experience which will be of value to the board.

The range of skills and qualities that we seek may indeed mean that some members of the board are drawn, for example, from competition, consumer or business backgrounds. But our aim is to appoint the best candidates, not to fulfil quotas or make de facto appointments representing certain interests. Although board members are likely to have other outside interests, they will be appointed to the board in their own right, not as representatives of any particular interest. Their role on the board will be to see that the OFT takes the right strategic decisions effectively to fulfil its functions and achieve its goal of making markets work for consumers.

I agree with my noble friend that candidates with backgrounds relevant to the OFT's responsibilities should not automatically be disqualified from taking up board appointments on the ground of conflict of interest. There is no need for them to be disqualified provided that they comply with the OFT's procedures on conflicts of interest.

The OFT will be extending those procedures and it will consult the Secretary of State on them. The office expects the revised procedures to follow the same general principles as currently apply for OFT staff. That would mean that, at the outset, board members would have to declare all actual and potential conflicts of interest involving themselves, their families and significant others. They would be expected to discuss with the chairman or board secretary any actual or potential conflict of interest raised by an agenda item in advance of the meeting itself, or immediately if an item is raised under any other business in which potentially there could be a conflict. And, of course, board members would be expected to withdraw from discussion of any items which could present a perceived conflict of interest.

The OFT must consult the Secretary of State on its procedures for dealing with conflicts of interest or any revision to those procedures. Furthermore, under her power to remove the chairman or any board member for misbehaviour, the Secretary of State could remove any board member breaching those procedures.

Therefore, while I agree with my noble friend that the kind of candidate about which he is concerned should not automatically be disqualified from being appointed to the OFT board on grounds of conflict of interest, it is unnecessary to set that out on the face of the Bill. The legislation already makes it clear that the OFT will have procedures for dealing with conflicts of interest and board members will have to act in accordance with them or face removal by the Secretary of State. I do not think that we need to add anything more to the Bill.

In view of those arguments and my assurances, I invite my noble friend to withdraw his amendment.

Lord Graham of Edmonton

Once more I am grateful to my noble friend on the Front Bench. His explanations have gone a considerable way towards satisfying me that some of the fears or concerns may be ill founded. When we see the list, I hope that my noble friend and his colleagues will have ensured that no significant sector of commerce, industry or social life would perceive that there is not at least one person on the board having at least the appearance of knowing about their particular problems.

The Minister has given me the assurance I seek. Although he has five to seven members already, common sense would indicate that, because he wants the board to get off to a good start and there are some very good people about, even seven may be insufficient. I do not wish to comment on which fields I would include, although if I had to take on the difficult job of making the selection, no doubt I would be able to do so.

I started off by saying that I am not one of those who insists, in the face of a ministerial assurance, that the words of the amendment should appear on the face of the Bill. I am quite certain that, after I have consulted with colleagues outside the Committee, I shall not have to return to the matter. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 9 not moved.]

Lord Hunt of Wirral

moved Amendment No. 10: Page 191, line 25, at end insert "and approved by affirmative resolution of the House of Commons The noble Lord said: With this amendment we move on to considering the financial provisions for the terms of appointment, specifically remuneration and pensions. Amendment No. 10 seeks to ensure that any payment made under paragraph 4(1) of Schedule 1 should be approved by an affirmative resolution of the other place. If there were to be a "golden goodbye" or a "golden handshake" agreed by the Secretary of State, such compensation should be subject to approval by the other place. Furthermore, the general terms and conditions of service and appointments of staff should also be subject to such scrutiny. Many precedents have been set whereby such resolutions are necessary for payments of this nature.

The Minister has not yet indicated clearly the level of payments, the number of people involved and the arrangements for travel allowances and so forth. The amendment provides an excellent opportunity for the Minister to give us some idea of what he proposes should be the remuneration of the individuals on the board. I realise that he could refer me to the pack now being sent to all the candidates, for which I could apply by e-mail or telephone. However, I thought that he might do the Committee the courtesy of explaining exactly what I would be told with regard to remuneration.

In giving those details, can the Minister also indicate the size of the organisation he envisages under the legislation and the number of people to be employed? Would he further agree that, in particular where the levels of remuneration are not yet specified—certainly not on the face of the Bill—facilities should be put in place for compensation to be paid for loss of office? However, such compensation should be subject first to scrutiny by the other place. I beg to move.

Lord Sainsbury of Turville

These amendments would require House of Commons approval by affirmative resolution for matters relating to the operational framework of the OFT. They would mean that approval would be needed for setting levels of remuneration, travelling and other allowances for OFT board members, for determining the amount of compensation that should be awarded to someone who ceases to hold office as OFT chairman or an OFT board member, and for setting the numbers, terms and conditions of service for OFT staff; that is, the civil servants.

All that would impose a significant new procedural burden on the operation of the OFT. It is a burden that I am not convinced is either appropriate or necessary. At present, my department sets the framework for the OFT's remuneration and for compensation issues for board members. That is entirely appropriate since the appointments are made by the Secretary of State. The numbers, terms and conditions of OFT staff—the civil servants—are determined by the OFT itself, with the approval of the Minister for the Civil Service. Again that is entirely right, mirroring the arrangements in other government departments, leaving as it does day-to-day management decisions in the hands of the OFT board within an overall framework set by Ministers.

I am not convinced that it would be a good use of parliamentary time to become involved in matters of this detail at the OFT. The office's annual plan and report will be laid before Parliament. If Members of the Committee are concerned about anything relating to the OFT, they can of course request a debate at any time, but I do not think that it is necessary for discussions on these matters of detail to take place as a matter of course.

I do not think that agreed levels of remuneration and so forth have been set for board members. In view of the arguments that I have put to the Committee, I invite the noble Lord to withdraw his amendment.

5.30 p.m.

Lord Hunt of Wirral

Perhaps I may press the Minister further because I am not sure that he has given the Committee any information at all. It is quite important in matters of this nature that there should be some visibility as to the level of remuneration. That is what the amendment seeks to ensure. I invited the Minister to share with us what Members of the Committee would be told if they said that they were interested in becoming non-executive directors committing a minimum of 30 days. I understand that the Minister's department is already giving some indication to applicants as to the level of remuneration. I said that the Minister could refer me to e-mail [e-mail]. but, instead of referring the Committee to the information pack, perhaps he will share a little information with us.

Lord Sainsbury of Turville

I can only repeat that, as far as I know, no agreed levels have been set for board members. I shall check on that point. If I am wrong and information has been given out or agreed, I shall write to the noble Lord.

Lord Hunt of Wirral

I am grateful to the Minister. I hope that he will accept that my point covered allowances, travel expenses and all kinds of remuneration in addition to direct pay. The Minister is nodding in answer to my question. In those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 11 and 12 not moved.]

Lord Kingsland

moved Amendment No. 13: Page 192, line 12, at end insert "and shall publish in full the procedures and criteria in dealing with conflicts of interest The noble Lord said: Again I can be brief. Paragraph 7(2) of Schedule 1 states: The OFT shall consult the Secretary of State before making or revising its procedures for dealing with conflicts of interest". My amendment seeks to require the OFT to publish in full the procedures and criteria which deal with conflicts of interest.

As the Minister is aware, conflicts of interest is a very sensitive topic and has a crucial bearing on the legitimacy of decisions which can sometimes cost entrepreneurs and consumers many millions of pounds. It is in the interests of everyone concerned with the operation of the Bill that the public should know exactly what the rules are. I should be grateful if the Minister could let us know what his intentions are in that respect. I beg to move.

Lord Hodgson of Astley Abbotts

I support my noble friend's amendment. We have already discussed the fact that this will be a small body, the actions of which will be carefully scrutinised. It therefore needs to be absolutely above reproach. There have been debates in the House recently about the decline in public confidence in the probity of our corporate governance. This body, which will be at the heart of British industry and making, as my noble friend said, decisions which will affect millions of pounds and thousands of people, should be prepared to make its corporate governance in regard to conflicts of interest absolutely clear and beyond peradventure. There would then be no room for any misapprehension or misunderstanding, or for any subsequent recrimination and regret.

Lord Sainsbury of Turville

The amendment would require the OFT to publish its procedures for dealing with conflicts of interest. This is an excellent point. The Bill already requires the OFT to consult the Secretary of State on these procedures but, in principle, I can see no reason why they should not be published. I am quite happy to take the matter away and to consider further how it may be set out in the Bill.

Lord Kingsland

I am grateful to the Minister for his extremely constructive response. On that basis, I am happy to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Borrie

moved Amendment No. 14:

Page 192, line 12, at end insert— () Otherwise than in exceptional circumstances, all operational decisions shall be made by the chairman of the OFT following such consultation with the other members of the OFT as he thinks appropriate. The noble Lord said: At Second Reading I expressed the view that in the field of mergers and take-overs, more than in any other aspect of competition policy, swift and firm decision making was particularly important for all concerned—that is, the shareholders and employees of companies—because if there are no particular public interest reasons why a merger should be prevented it should be allowed to go ahead as soon as possible. If there are serious concerns that the merger might adversely affect competition, then the public interest is surely that those concerns are speedily addressed and a decision as to whether the merger should be either stopped or allowed arrived at after due process but without undue delay.

It was in that context that I was concerned about the proposal in the Bill to replace the Director-General of Fair Trading with a board of which, as we heard earlier, he will be the chairman and chief executive. If decisions on whether or not to refer mergers to the Competition Commission have to go routinely to this new board, consisting in the main of part-timers, I foresee the risks of serious delays and a serious reduction in efficient decision making.

I drew attention to the advertisement in the Sunday Times, which was referred to by the noble Lord, Lord Hunt of Wirral, and others, for non-executive directors of the board. I was struck by the fact that, according to the advertisement, the non-executive directors are to put in only 21/2, days a month. They are, in other words, to be very much part-timers. I wanted a reassurance from Her Majesty's Government that the board of the Office of Fair Trading would not be involved in case-by-case, day-to-day, routine decision making in regard to, for example, prohibitions of cartels, abuses of monopoly position under Chapters I and II of the Competition Act 1988, merger references to the Competition Commission or market investigation references to the Competition Commission, but would concern itself only with strategy, broad principles and priorities.

My noble friend Lord McIntosh of Haringey, who replied for the Government, gave me a degree of reassurance. He said that the new board would focus on the Office of Fair Trading's strategic vision and direction, prioritisation and monitoring progress against targets. He then added: We expect the board to delegate most operational decisions to the Chairman and OFT officials".—[Official Report, 2/7/02; col. 184.] My amendment—which I shall not read out because it is in front of the Committee—seeks to put the Minister's assurance on the face of the Bill. I do so, in part, because the advertisement for members of the board to which I have referred is somewhat ambiguous. It refers to the board being responsible for, overall strategic direction, priorities, plans and performance", but it adds that, it will also be directly involved in decisions on individual market studies". It then goes on to state that the board may exceptionally be involved in matters of strategic importance, to which I have no objection.

If the board is to be directly involved in individual market studies, that suggests to me that it could veto a proposal from the chairman to engage in a market study into a particular market or a proposal to refer a particular market to the Competition Commission. I ask the Minister, is that so?

The 21/2 days a month that the part-timers on the board will work could be accounted for by a day for a meeting and a day or so for reading the papers. If it is more than that, the advertisement may be misleading to those splendid members of the community who offer themselves to the Minister as willing to become part-time non-executive directors of the board.

I am, of course, aware of the trend in recent years away from individual regulators to regulatory boards. I believe that it was desirable for the director-general of Ofgas to be replaced by a board under the Utilities Act 2000 because where a single industry was dominated by one firm, for example, British Gas, and the regulator was a single individual, there was undue personalisation of regulatory powers. It is a matter of record that relations between the gas regulator and the chairman of British Gas were at times so confrontational that they were barely on speaking terms. Undue personality clash and confrontation could not be good either for the industry or for the public interest.

I suggest that the work of the Office of Fair Trading is markedly different from that of a single industry regulator because its consumer and competition remits stretch across the whole of industry and commerce. The chance of daily confrontations between individuals is too remote to be thought at all likely.

My case, therefore, to the Government in bringing forward this amendment is to let John Vickers who will be chairman and chief executive of the board—at present he is the Director-General of Fair Trading—continue as now to take all operational decisions otherwise than in exceptional circumstances. The board will be a valuable sounding board for consultation and will deal with strategy. As the noble Lord, Lord Hunt of Wirral, pointed out earlier, there is at present an advisory board. In future there will be the board provided for under Clause 1. But if the board's statutory remit is left uncertain under the Bill, it may at some stage be tempted to interfere in day-to-day decisions at the cost of the efficiency of the organisation and at the cost of the public interest. Diffusion of responsibility could be a recipe for feebleness or delay or both in decision-making. I beg to move.

Lord Peyton of Yeovil

I had a dim feeling while the noble Lord, Lord Borrie, was speaking that he had in mind his own past experience and was speaking perhaps from a somewhat subjective point of view. I do not believe that it would be in any way desirable to underline the power of the chairman by giving him this added provision. He already has a good pair of braces with which to keep up his trousers; he does not need a belt as well. For once I am rather hopeful that the Minister and I will be on the same side and that he will see strength in rejecting his noble friend's amendment.

Lord Sharman

I register our opposition in regard to the amendment. We are getting into a terrible tangle over the governance and management of the new body. The Bill states that it is a body corporate with a board. It is proposed that the chairman and chief executive should have unbridled power in all matters operational. I completely lack understanding as to how one can justify such a system or how it meets any kind of sensible approach to corporate governance. Surely what we must seek here is a sensible balance in a board adequately representative of the interests which it oversees and composed of executive and non-executive members who can provide the necessary checks and balances. To imbue the chairman and chief executive with the authority to make all operational decisions after having made such consultations as he thinks fit leaves me breathless with disbelief.

5.45 p.m.

Lord Kingsland

I believe that I can help the Minister to some extent. Under paragraph 11 of Schedule I there is a section entitled Performance of functions. There it seems to me clear that, Anything authorised or required to be done by the OFT … may be done by—

1. (a) any member or employee of the OFT … or …
2. (b) any committee of the OFT".

Therefore, it is clear that the board has statutory powers of delegation to any authorised section of the directorate.

What I think is more worrying is the fact that the board itself seems to have a structural power imbalance in that there is a full-time chief executive and chairman who is an acknowledged expert in the field flanked by non-executive directors who, however distinguished, will be there only for 30 days a year. In my submission the issue is not so much whether or not the Bill contains powers to provide effective operational decision-making—I believe that it does—but rather that superficially the OFT is a board but in fact one member of that board is so strong that it is almost a misrepresentation to call it board management.

There is a further concern. The noble Lord, Lord Sharman, is one of the great experts in the United Kingdom on non-executive directorships, not, I hasten to add, because he has a large number of them but because it is a function that he has studied in some depth. It is well known that although non-executive directors do not have intimate involvement with day-to-day management of companies, they have in law equivalent responsibility to other directors who have full executive responsibility.

I endorse the approach of the Government to having a board for the OFT. I think that that is the right route down which to go, but I wonder whether the board in terms of the powers of its members other than the director-general is sufficiently well balanced in terms of its power structure. To say that I should be wary is perhaps putting it too strongly. However, if I were considering applying to be a member of the board, I should want more guarantees about my capacity to influence its strategy than appear to be on the face of the Bill.

This is not meant to be a cynical observation but the section of Schedule 1 entitled, Terms of appointment, remuneration, pensions amounts to 31 lines whereas the section entitled Performance of functions—a crucial part of the schedule—amounts to seven lines. I do not suggest for a moment that that disproportionality is necessarily unjustified, but I think that the noble Lord, Lord Borrie, has put his finger on a very important issue which in my submission merits further consideration by the Government in everyone's interest. I hope that the Minister will accept that I am not making in any way a party political point. I make the point because I believe that we all want the system that the Government seek to devise to work properly. It merits some further reflection.

Lord Sainsbury of Turville

The amendment seeks to ensure that the OFT board will not automatically have a role in operational decisions. It would specify that, unless the circumstances were exceptional, these decisions would be taken by the chairman of the OFT following such consultation with the other members of the OFT as he thought appropriate.

At Second Reading, my noble friend Lord Borrie explained his concern that the board could intervene in routine decision making with regard to mergers, cartels or market investigations and that by doing so it could slow down the decision-making process. He has sought reassurance that the board will be concerned only with strategy and broad principles.

I can offer my noble friend this reassurance. It has always been the intention that the board should focus on strategic issues, not on day-to-day decisions. However, at the same time it is important that the possibility of the board taking a role in case decisions of strategic significance is maintained. That will be the case with most corporate bodies. Most boards are concerned with strategic decisions, but there will be operational decisions of strategic importance with which the board will want to be involved.

The board is being introduced in order to widen the input into consumer and competition decisions—to depersonalise this important area of regulatory activity. To say that the board should not as a matter of principle play a role in these decisions would undermine this move. For that reason, I do not believe that it is wise to set out on the face of the Bill the detailed role of the board. However, I offer my noble friend my reassurance that it is not the intention that the board should slow down routine decisions.

I turn to my noble friend's particular concerns about the potential for the OFT board to slow down decisions leading to feebleness and delay. On some mergers, where decision making is time critical, the timetables are very tight. This would severely limit the ability of the board to become involved. On markets, the speed of decision making is less critical and the decision to investigate a market can be a strategic decision—and one which would benefit from board involvement. On cartels, the board could be involved in decisions relating to cases of strategic significance. However, one would always want those to be of strategic significance for the board. It would not be involved in decisions relating to the issue of intrusive surveillance powers as such decisions are reserved for the chairman and may involve timing considerations. But, as with markets, there is no reason to prevent board involvement in the strategic decision of whether to begin an investigation in the first place.

I hope that that clarifies the way in which we see the role of the board, which is clearly a strategic one. I am happy to be able to offer that reassurance to my noble friend and I in view of those arguments I invite him to withdraw his amendment.

Lord Borrie

I am most grateful to Members of the Committee who have spoken in the debate, even including the noble Lord, Lord Peyton of Yeovil. He was undoubtedly right in noticing a subjective element from my past in tabling the amendment. I would call it an element of nostalgia, which I hope he will accept.

I am grateful to the noble Lords, Lord Sharman and Lord Kingsland, because this is an important matter. I do not share their collective view that there is a great read-across between corporate governance in the private world and that of public authorities. Directors of boards of companies do not have statutory powers which need to be exercised in the public interest with reasonable promptitude. They do not have statutory functions of any kind and one has to look at each public authority separately—not even collectively—to see how best they ought to be run.

My noble friend the Minister described the board of the Office of Fair Trading working on a day-to-day, week-by-week, month-by-month basis and he gave me reassurance on that matter. However, a great deal needs to be done in terms of the different types of decisions which the public authority will have to make. He has given me reassurances and I am happy to beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Schedule 1 agreed to.

Clause 2 [The Director General of Fair Trading]:

Lord Hunt of Wirral

moved Amendment No. 15: Page 2, line 2, after first "The" insert "position, power and the The noble Lord said: In rising to move the amendment, I want to stress that one of the questions which the Government have not yet fully explained is why there is a need to abolish the office of Director-General of Fair Trading. Implicit in some of our debates, is the confusion in the two roles of chairman and chief executive. I therefore should have thought—perhaps the Minister will tell us whether it was considered—that one of the options should have been the transfer of the functions, position and power of the Director-General of Fair Trading into the new statutory body with the creation of a board and a chairman. In that way, the question of corporate governance, which has been the subject of considerable debate today, would have been more easily tackled.

The second area I want to probe with the Minister is the difficulty—I found it virtually impossible—of finding a document in which all the functions, property rights, liabilities and powers of the Director-General of Fair Trading are to be found. There is the opportunity of ploughing through the 46 pages of Schedule 25 which, although described as minor and transitional provisions, contain a number of the powers.

I wonder whether the Minister could make available to us a document setting out the functions which are now being transferred. Clause 2(1) states that they are being transferred but it does not detail exactly what is being transferred. It seeks to do so generically. I do not know whether it is possible to express it more clearly, but it would be easier for us to make progress in the Committee if they were set out more clearly in a separate document.

Thirdly, I return to the words of Miss Melanie Johnson about it being no longer appropriate for all the powers to be vested in one individual; namely, the Director-General of Fair Trading. If it is no longer appropriate for all those powers to be vested in one individual, why do we need to abolish the office? Why cannot those powers be made subject to the board, and the statutory board be put in charge of those powers? The director-general would carry on exercising his powers, which it is proposed should be transferred from a person to a body. That gives rise to the confusion about who will exercise the powers. We have had an interesting discussion about that.

I hope that the amendment will give the Minister an opportunity to justify why the position of director-general is being abolished. Whether or not he and his colleagues considered the matter prior to their announcement, might it not be possible to continue with the post? That would enable us to do away with a substantial part of the schedules to the Bill and would enable a board to be set up in the new body which will oversee the work of the director-general and his staff. I am probing the Minister to share with us a little more of the background to the decision and I beg to move.

6 p.m.

Lord Sainsbury of Turville

The second of these amendments, Amendment No. 16, would retain the post of Director-General of Fair Trading. The first amendment would transfer the position, powers and functions of that post to the OFT board.

The Government are quite clear that we should abolish the post of Director-General of Fair Trading and transfer his property, rights, liabilities and functions—which include his powers—to a new statutory authority, the OFT. The OFT will consist of a board headed by a chairman. This will broaden the decision-making base and de-personalise this important area of regulatory enforcement.

I cannot see that this is a very difficult exercise. We are transferring those functions and powers to the new organisation, and it is clear that they should be set out on the basis of what the new organisation will do. To transfer to the OFT the functions of a post that we are clearly changing seems to me to be a recipe for confusion. The way to do this is to abolish one post, to transfer all the functions to the new body, and then to set out, as we hope we have done, how that new body will operate and what its powers and responsibilities will be.

Lord Hunt of Wirral

I am merely asking the Minister: where are the functions of the Director-General of Fair Trading set out?

Lord Sainsbury of Turville

They are set out in a number of pieces of legislation. I am happy to provide the noble Lord with a list. Then, I think it will be quite clear that this is a sensible move. Many of the functions of the DGFT are being reformed in this Bill In the light of this, we believe that it is no longer appropriate for all of these powers to be vested in one individual. We consulted on this move in September 2000, and it has received wide support. I am happy to let the noble Lord have a list of the pieces of legislation; and in view of my response I hope that the noble Lord will withdraw the amendment.

Lord Phillips of Sudbury

Following the point made by the noble Lord, Lord Hunt of Wirral, would it make sense to have a definition of "functions" in this Bill—as, for example, in the Education Act 1996? The word is used throughout the long clauses that the Bill contains. It would be a clarification that the Government might consider.

Lord Sainsbury of Turville

I am not quite sure of the noble Lord's point. If it relates to the functions of the whole board, we covered it when we considered the first amendment. Here, we are talking about what will happen as regards the duties of the Director-General of Fair Trading. It is clear that they will move across and are redefined in the schedule on the Office of Fair Trading.

Lord Phillips of Sudbury

I did not make myself as clear as I should have done. I was referring to the definition of the word "functions" as such. I do not think that the Bill contains such a definition. It occurs in the Education Act 1996, where the concept is much used. Quite apart from the issue of what the functions are, I suggest that it would be useful for those who have to implement the Bill's provisions if it contained a definition of that word itself, given its prominence. If the Bill does contain such a definition, I apologise. I could not find one—and I made a long search.

Lord Sainsbury of Turville

I shall look into the matter and write to the noble Lord.

Lord Hunt of Wirral

I am grateful to the Minister for agreeing to supply the list of functions. Rather than merely providing a list of sections, it would be very helpful if he could list the powers of the Director-General of Fair Trading—then, if necessary, giving the sections containing them. I think that Members of the Committee would find this matter much easier to follow if the powers were set out, without having to run to 160 different Acts of Parliament. As the Minister is so readily agreeing to that, so do I readily beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 16 not moved.]

Clause 2 agreed to.

Clause 3 [Annual plan]:

Lord Hunt of Wirral

moved Amendment No. 17: Page 2, line 13, leave out "consult such persons as it considers appropriate" and insert "lay the draft plan before Parliament and shall consult as widely as is reasonably practicable The noble Lord said: I join with my noble friend in challenging Clause 3. With reference to the annual plan which the OFT will publish under the terms of Clause 3(1) containing a statement of its main objectives and priorities for the year, subsection (2) provides that, Before publishing the annual plan … the OFT shall consult such persons as it considers appropriate". That is a little rich. In setting up this body with these wide-ranging powers, I hope that the Minister might carefully consider, first, my amendment which would leave out the words enabling the OFT to decide whom it would consult and would insert a provision for the draft plan to be laid before Parliament. The OFT would then consult, as widely as is reasonably practicable". My noble friend Lord Hodgson of Astley Abbotts has rightly put a further suggestion; namely, that the consultation should include recognised bodies representing business opinion and consumer bodies designated under Clause 11(5).

When the Bill was in the other place, Miss Melanie Johnson stressed time and again that the OFT would be fully accountable to Parliament and to the public. In terms of that accountability, the procedure as regards the annual plan is very important. I noted that Miss Melanie Johnson said: there may be an interest in who the OFT plans to consult, but it is part of its accountability that it will have to explain who it is consulting and why".—[Official Report, Commons Standing Committee B, 16/4/02; col. 32.] I am not sure that that is the right way round. I do not think that the OFT should decide whom it is going to consult and then tell us. I believe that Parliament has a role to play here and I hope that the Minister will accept that. In that context, I beg to move.

Lord Hodgson of Astley Abbotts

As my noble friend has said, I have an amendment in this group. I felt that this provision was not merely "a little rich"; it was very rich—that the OFT can decide whom it should consult "as it considers appropriate". The OFT is a standalone body. Its independence is the keystone of much that we have been discussing: it will affect many groups of people, and in particular businesses and consumers. I do not suggest that the wording of my amendment is the right wording, but there ought to be some provision to force the OFT to have regard to, to listen to, and to consult with business opinion and consumer opinion.

The wording that I have used is merely to make the OFT focus on consulting the two groups that will be particularly affected by its plans and actions. That is important. Consultation with academics and economists is no doubt very worthwhile and very worthy, but we need consultation with people who are at the real life cutting edge.

Lord Sainsbury of Turville

These amendments seek to set out further provisions in regard to whom the OFT must consult on its annual plan. The Bill already provides for consultation by the OFT on its annual plan; and the OFT certainly intends to consult widely. It would intend such consultation to include leading business groups, consumer organisations and other interested parties. By publishing the consultation on its website, the OFT would ensure that the wider public could put their views forward. Members of both Houses of Parliament are, of course, always able to participate in such consultation.

However, I agree with Members of the Committee that the ultimate weasel world of politics is appropriate, as so few people are prepared to come forward to say that things that may seem inappropriate should be done. In view of the concerns expressed, I am happy to take this matter away and to consider further what might be put on the face of the Bill, including how Parliament can be engaged in the consultation process.

Lord Hunt of Wirral

I am very grateful to the Minister for those assurances and for the way in which he has so swiftly met my concerns and those of my noble friend. It is therefore with pleasure that I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 18 not moved.]

Clause 3 agreed to.

Clause 4 [Annual and other reports]:

Lord Graham of Edmonton

moved Amendment No. 19:

Page 2, line 24, at end insert "; and

1. (c) an assessment of the extent to which the OFT has—
2. (i) advanced the objectives of promoting competition and competitiveness;
3. (ii) maintained a fair balance of rights and duties for consumers and business;
4. (iii) assessed the costs for business of its decisions; and
5. (iv) observed the Enforcement Concordat."

The noble Lord said: I shall speak also to the other amendments in the group. Clause 4 deals with annual and other reports. It states: The OFT shall, as soon as practicable after the end of each financial year, make to the Secretary of State a report (the 'annual report') on its activities". The clause goes on to spell out some of the things that the Minister and his colleagues feel should be in the report. The Marshalled List shows that, as well as my amendment, others have further ideas. We do not disagree with the idea of an annual report, but we would like an understanding that there will be more in it. The amendments tabled by the noble Lords, Lord Razzall and Lord Sharman, would pointedly bring the report to the attention not of the general public—although they are important—but of Parliament, which should be able to look at it through the Select Committee procedure.

As well as providing information, the OFT should give an account of how and why it has done what it has done. Paragraph (c)(iii) of the amendment would require an assessment of how the OFT has, assessed the costs for business of its decisions". I focus on that in passing because we are very concerned about all kinds of costs on business. We are all law-abiding people in this House and we all generally want the Bill, but if there is agitation that it will be more costly than expected to put into effect, we need to pause and hear the Minister talk about that.

Sub-paragraph (ii) refers to the way in which the OFT has, maintained a fair balance of rights and duties for consumers and business". That may not be so easy to codify or quantify, but at least the Minister and his colleagues ought to be in a position to have a stab at giving us their assessment of what has happened. There is no doubt that there are two sides—the rights of consumers and those of business. One may be looked on as the beneficiary and the other may be looked on as the cause of concern.

As with other amendments, the aim is to give the Minister a chance to tell us how he sees this playing once the provisions are put into operation. I beg to move.

6.15 p.m.

Lord Kingsland

I have two amendments in this group—Amendments Nos. 20 and 21. Amendment No. 21 is almost identical to paragraph (c)(iii) of Amendment No. 19, tabled by the noble Lord, Lord Graham of Edmonton. I was delighted to hear that the noble Lord was concerned about the costs to business of the legislation. I share that view. I would rather rely on the silken tongue of the noble Lord, Lord Graham, than on my pedestrian meanderings in justifying the logic behind the amendment. I shall leave it at that.

In Amendment No. 20, I am looking for a detailed summary of OFT decisions and investigations over the preceding year. My text for that is the practice pursued by the European Commission in Brussels, which every year produces an excellent account of its decisions and of the decisions of the court of first instance and the European Court of Justice in so far as they have a bearing on competition matters.

That account is particularly import ant because, by setting out those decisions, it provides a framework of precedents that helps to provide some certainty for the business community in dealing with competition and merger officials. I can see no plausible reason why the Government should shy away from adopting a similar practice. I look forward to hearing the Minister's reaction to that.

Lord Sharman

I have two amendments in the group—Amendments Nos. 21A and 177A. Both deal with accountability to Parliament. I strongly support what the noble Lords, Lord Graham of Edmonton and Lord Kingsland, have said. We are creating yet another hugely powerful and influential quango. In addition to covering what we need to see in an annual report from that immensely powerful body, it is essential that we place on the face of the Bill provisions that ensure that those who are charged with the stewardship and operation of the body are fully accountable to Parliament.

Other parts of the Bill make a significant difference to the influence of Ministers in decisions on competition and investigations and the like. We [LORD SHARMAN] wholly support the removal of that to an independent body, but it is vital that that independent body is not only accountable to Parliament, but seen to be so properly and in the best possible manner.

Lord Brooke of Sutton Mandeville

My remarks will be brief. I support my noble friends on the Front Bench. When we discussed the 1998 Competition Bill in Committee in another place there was a considerable discrepancy between the views expressed by the Opposition on the costs to business arising from the Bill and the Government's forecast in their assessments. I have read Miss Johnson's response in Committee in the Commons on this occasion to amendments similar to those that we are talking about. I am surprised that there is no reference to the comparative outcome between 1998 and 2001. That suggests at first blush that perhaps the Government are not anxious to revisit the subject.

Lord Sainsbury of Turville

Amendments Nos. 19, 20 and 21 would set out on the face of the Bill certain material that the OFT must include in its annual report. The Bill was drafted on the basis that such specific detail was not appropriate for primary legislation. We have included in the Bill only the minor broad minimum criteria that the annual report must fulfil. That allows flexibility in the light of experience and ensures that the Bill can stand the test of time.

The annual report will have to include a general survey of developments on matters relating to the OFT's functions and an assessment of the extent to which the OFT's main objectives and priorities for the year, as set out in the annual plan, are met. In doing so, the OFT will need and wish to include the sort of information covered by Amendment No. 20. The Director-General of Fair Trading already includes such information in his current annual reports. I expect the new OFT to continue to do so.

I turn to the specific issues raised by Amendment No. 19. Under Clause 6, the OFT has a very general function to promote the benefit of competition to the public. This function is, by its nature, not capable of quantification in terms of success. All the OFT can do is to outline in its annual report any initiatives that it has taken during the course of the year, and any feedback it has received on the results. We have considered that it would be inappropriate to require in the legislation that it must provide such details.

The OFT's present statement of purpose, published on its website, is, to make markets work well for consumers. Markets work well when there is vigorous competition between fair-dealing businesses. When markets work well, good businesses flourish". This recognition that good businesses, as well as consumers, benefit from markets that work well is important. OFT activity is not, and will not be, about pitching businesses against consumers, but about seeing both benefit from competition in markets. This is one reason why I do not agree with the idea that the OFT's annual report should include an assessment of the costs to business of its decisions, which is also the focus of Amendment No. 21.

A more fundamental reason is that the OFT will only be exercising the powers granted to it by Parliament. There are appropriate checks on the OFT. For example, the OFT is not able to make a market reference unless it has reasonable grounds for suspecting that the reference criteria are satisfied. The OFT will not use its powers without good reason, and the Bill includes measures to build the OFT's accountability into the system at all levels.

Finally, on the content of the annual report, as Amendment No. 19 recognises, enforcement of competition and consumer protection rules is a key area of OFT activity. The OFT has publicly accepted the principles of good enforcement set out in the Cabinet Office's Enforcement Concordat. The OFT and all who subscribe to the concordat are committed to good enforcement policies and procedures, and the principles of the concordat form the basis of the OFT's enforcement procedures. This includes helping businesses to meet their obligations through giving advice and assistance with compliance, as well as more formal enforcement action when proportionate to the risks to consumers.

I turn to Amendments Nos. 21A and 177A. The Bill already states that the OFT and the Competition Commission must lay their annual reports before Parliament. If Members of this House or of the other place wish to examine these or other reports published by the OFT in more detail, or propose at any time that a report should be considered in depth, it is open to them to do so. In any event, I should imagine that the Trade and Industry Select Committee would take a good deal of interest in both the OFT's annual report and that of the Competition Commission. In addition, the chairman of the OFT board will be accountable to Parliament for the OFT's performance, and both he and the chairman of the Competition Commission can be summoned to appear before Select Committees at any time. I therefore do not think it necessary to specify in the Bill further possibilities for parliamentary scrutiny of either body's activities. Such possibilities already exist and it is open to Members of both Houses to use them.

I hope that I have helped the Committee to understand the rationale for our drafting this clause in broad terms. However, given the strength of the concerns expressed today about the content of the OFT annual report, I propose to consider further what we might set out in the Bill, paying particular regard to noble Lords' concerns over the impact on business, and to come back with something at Report.

Lord Graham of Edmonton

I think that that is the nearest I am going to get to a concession. I shall certainly not put words into the Minister's mouth, but I am very grateful indeed for his indication that there may be scope to look again at the provisions. I was also interested in his repeated use of the word "inappropriate". If the provision we seek is inappropriate, to whom or for whom is it inappropriate? It is not inappropriate to those who are asking for it, because they genuinely believe that it would he helpful. However, the Minister himself has been very helpful by indicating that he will examine the whole situation and return to it at the next stage or later. In those circumstances, I am very pleased to beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 20 to 21A not moved.]

Clauses 4 agreed to.

Clause 5 [Acquisition of information etc.]:

On Question, Whether Clause 5 shall stand part of the Bill?

Lord Peyton of Yeovil

A clause like this one makes my nerve ends twitch a bit. Before giving very wide powers to a body which has yet to prove its virtue to obtain almost any type of information that it thinks would he helpful, appropriate or relevant, we should consider such a possibility and ask ourselves: just how far is this to go?

I am prompted to make these brief comments by the conduct of the Financial Services Authority in pushing, pressing and cadging every banker, stockbroker and accountant to chivvy and vex their clients, some of whom they have known for many years, to discover whether or not they are money launderers. I do not want to discuss the vices of the Financial Services Authority at great length. However, I hope that the Minister will take on board the fact that people are reluctant to give to such official bodies the power to collect such information as they think fit. Some of those bodies have an overweening and excessive curiosity to poke their noses into things that are none of their business.

Lord Kingsland

I am most grateful to my noble friend Lord Peyton for raising this issue in his inimitable fashion. I should like to develop it, if I may, by reminding the Minister of the remarks I made in support of Amendment No. 1. I drew his attention to Section 2 of the Financial Services and Markets Act 2000 and pointed out how the Government had set out in that legislation with quite considerable rigour—although not quite the amount of rigour that I sought when the Bill was passing through Parliament; nevertheless with some rigour—the regulatory objectives and other matters to which the Financial Services Authority should have regard.

That is in stark contrast to Clause 5, the first in a series of clauses headed "General functions of OFT". If noble Lords care to glance through those clauses, they will see that the general functions amount simply to a set of powers, if the OFT so wishes, to acquire information, to provide information, to obtain information and to promote good consumer practice. What is lacking here is an expression of functions. At an earlier stage, the Minister responded to a question from the noble Lord, Lord Phillips of Sudbury, by saying, "It is true that we have not consolidated the functions under the Bill, but they are in other legislative measures". It seems strange that the Government have given themselves an opportunity to set out and consolidate the functions of the OFT in this series of clauses but have not taken advantage of that opportunity.

I should therefore like to encourage the Minister, in the spirit of what was just said by my noble friend Lord Peyton, to try to tighten up this part of the Bill; to draw together from other bits of legislation the various functions that, as we know, the OFT already has; and to set out those functions in a logical manner. This would have two benefits. First, it would let us all know where we stand. Secondly, it would enable us to see in exactly what circumstances the OFT was acting within the law and in what circumstances it was acting without.

6.30 p.m.

Lord Hodgson of Astley Abbotts

What is lacking in this regard, apart from generality, is a requirement to be cost effective. The body is permitted to do almost anything and not necessarily ensure that there is a real return—a real benefit—to the consumer, a business, the country or whatever. My noble friend Lord Peyton raised the issue of money laundering, about which I know he feels very strongly. That initiative began with very good intentions but now thousands of reports are produced and there are, I believe, 12 people looking after the inquiries in NCIS. Most of us believe that nothing ever happens as a result; all of the information is filed away and never used again. One can foresee something similar happening under subsections (1), (2) and (3) of the clause. Huge amounts of research will be commissioned, no doubt for all sorts of very good reasons at the time and no doubt at very great cost, but it will all be put in a pigeonhole and no one will ever follow it through. That is rather like what most of us believe has been happening with money laundering. The idea was very good but the system is now so thorough that it has overwhelmed those who run it. We need to get down to some cost-effective requirements with regard to the acquisition of information under Clause 5.

Lord Borrie

Later on. I anticipate, we shall hear from the noble Lord, Lord Kingsland, subtle arguments about the basis on which the OFT is entitled to conduct investigations and to make references to the Competition Commission. He will probably argue—I do not wish to put words in his mouth—that the OFT should have a very strong basis or reasonable cause for believing, rather than suspicion, that this or that has happened. I suspect that he will base those arguments on the need for the OFT to have a good sound basis before it spends money and sends a matter to the Competition Commission. However, the noble Lord cannot have it both ways. If the OFT is to have a solid basis for doing its work and for raising individual investigations before sending matters to the Competition Commission—let alone for dealing with and prohibiting cartels and abuses of a monopoly position—it must carry out work and research and keep up to date with what the markets are doing.

[LORD BORRIE] The provisions in the clause are very general provisions. The word "general" in the heading above Clause 5 can be somewhat misinterpreted. The powers are general instead of specific. The noble Lord knows very well that there are specific provisions in the Competition Act and later in the Bill. The provisions in the clause are broad information-seeking matters; they are very broad general functions but they are necessary for the reasons that I have described.

Lord Kingsland

My intervention was not intended to add to the point made by my noble friend Lord Peyton because he had expressed himself so coherently on this point but I may further sharpen what he said. The distinction at which my noble friend was getting was that between targeted information gathering, which he regarded as perfectly legitimate, and the conduct of general fishing expeditions, which he emphatically does not think are legitimate. He concluded, having examined the provisions, that they were a recipe for fishing expeditions rather than targeted investigations.

Lord Peyton of Yeovil

I am very much obliged to my noble friend, who is absolutely right. I was concerned that the new body would fall for the temptation of following the very bad example of the Financial Services Authority in pursuing those who are in no way relevant to its affairs and who are nothing to do with money laundering.

Lord Phillips of Sudbury

I support all those who have spoken, which may appear to be an impossibility. I take the point of the noble Lord, Lord Borrie, and that made on this side of the Committee, which was that the acquisition of information by the state has become a new disease. We are well acquainted with the warehousing of that information in our debates on the Regulation of Investigatory Powers Act and the Antiterrorism, Crime and Security Act.

Clause 5(1) states: The OFT has the function of obtaining … information". Will the Minister confirm—I hope that this question is not unfair—that that is a general statement giving the OFT a general power to engage in the collection of information but that it gives the OFT no specific powers at all? I also seek confirmation—these matters have now become so complex that one cannot really rely on common sense—of the fact that giving that general power will not have any repercussive effects vis-à-vis the dormant powers that lie in RIPA, the Anti-terrorism, Crime and Security Act or any of the other information-gathering Acts. I should hate the House subsequently to learn that this apparent innocence of expression triggers an existing clause in existing legislation.

Lord Sainsbury of Turville

I start by going back to the point made by the noble Lord, Lord Phillips, a short while ago. The term "function" covers both powers and duties and has generally accepted legal meanings. The general function is set out in Part 1 and the specific functions are set out in other parts of the Bill and other legislation. Clause 5 will give the OFT the function of obtaining and reviewing information relating to any of its functions in respect of competition and consumer matters. That information-gathering role, which may involve research, is with a view to the OFT having the information it needs to make decisions and carry out functions. I should have thought that we all agree that the essential nature of the OFT's work means that it should have good information so that it does not refer matters when there is not a strong or good case or a real knowledge of the markets.

I do not know the answer to the noble Lord's specific question about whether the provision triggers powers in existing legislation. I shall take that away and if it does trigger such powers I shall write to the noble Lord explaining the powers that it releases in existing legislation. The power is very clear and relates clearly to the function of the OFT. I cannot see how the OFT could operate effectively without such a power. I urge that the clause should stand part of the Bill.

Lord Peyton of Yeovil

If the Minister will allow me to say so, I am profoundly disappointed that he has not bothered to take much notice of what has been said. We have an example of what concerns me. I do not remember when the debate took place, but presumably the FSA was given powers which were considered reasonable, sensible and necessary for it to achieve its purposes. In fact, in the exercise of those powers, it annoyed and vexed a whole lot of people for no reason whatever. The Government seem to take no notice of that; they simply go on with their huge inquisitive appetite. That is intensely irritating to people who have never thought of money laundering and who have never been involved in the issue with which the body that has the powers is concerned.

Clause 5 agreed to.

Clause 6 [Provision of information etc. to the public]:

Lord Kingsland

moved Amendment No. 22:

Page 3, line 2, at end insert— () promoting awareness of the need to reduce the regulatory burden on UK business and commerce; The noble Lord said: I can, I trust, move this amendment relatively briefly. I once again remind the Minister of my Amendment No. 1. If he glances at it, he will see that in paragraph (c), I suggest that one of the objectives of the OFT should be the minimisation of, the regulatory burdens placed on UK business and commerce". It must follow therefore that in dealing with the matters set out at the top of page 3 of the Bill, one of the duties that the OFT should have would be to promote awareness of the need to reduce the regulatory burden on UK business and commerce.

One of the central functions of the OFT should be to monitor the impact of other ministries' legislation on the effectiveness of competition. In order to achieve that purpose, in my submission it is essential that the OFT uses the powers that have been given to it in Clause 6 to look very carefully each year at what needs to be done to reduce the overall regulatory burden and publicise those requirements as widely as possible. I beg to move.

Lord Phillips of Sudbury

I rise to speak to Amendment No. 23, which stands in my name. The noble Lord, Lord Joffe, also put his name to the amendment, and it is a matter of inadvertence that the name of my noble friend Lord Holme of Cheltenham was omitted from it. I mention that in particular because, together with the noble Lord, Lord Joffe, he has huge business experience. My noble friend Lord Holme is an officer of the All-Party Corporate Social Responsibility Group of both Houses.

Clause 6 would be of only passing interest to me if it had confined itself to Clause 6(1). That states that the OFT's functions are to help public awareness of the ways in which competition may benefit consumers and to give information and advice. But subsection (2) also gives the OFT a discretion—it is expressed as a function which it "may" carry out—to publish educational materials, to carry out other educational activities and to support others who may be doing so or who propose to do so. I declare an interest as president of the Citizenship Foundation, which is a charity devoted to helping young people, in particular, to understand the complex society of which they are part.

Therefore, given that that is obviously a very intentional allowance and given that the OFT will, I hope, use the power given here to publish educational materials, I am anxious that it should do so on a platform consistent with citizenship education. I believe that that is more appropriate than is presently the case by dint of the language of Clause 6(1).

In saying that, I pay tribute to the Government for the fact that citizenship will enter the school secondary curriculum this autumn. It will be the first time in our history that that has happened and, in view of the fact that the subject will be taught on a wide scale, I believe that it represents a first world-wide. Every child in every year of his secondary education will have citizenship education to GCSE level.

I refer the Committee to the debate that we had in this House on these proposals some while ago and also to the debate in the other place. It has been of perfectly reasonable concern that citizenship education should be absolutely unbiased. It should not be prescriptive or, as some would say, propagandist. It should not endeavour to peddle a particular line but should strive to open the minds of young people so that they can decide for themselves what they consider to be right and proper. It is because the language of Clause 6(1)(a) is unnecessarily prescriptive that I propose its replacement by the words before the Committee.

Before I sit down, perhaps I may read from the statutory order that came before this House recently. It embedded citizenship education in the secondary curriculum. I hope that it will illustrate far better than I have been able to do in these few words the tenor and style of citizenship education which is to be provided to all secondary school pupils. It says: During key stage 3"— that is, the 13 to 14 year-old age group— pupils study, reflect upon arid discuss topical political, spiritual, moral, social and cultural issues, problems and events. They learn to identify the role of the legal, political, religious, social and economic institutions and systems that influence their lives and communities. They continue to be actively involved in the life of their school, neighbourhood and wider communities and learn to become more effective in public life. They learn about fairness, social justice, respect for democracy and diversity", and so on. That language is clearly far wider, broader and more culturally rich than it would be if it were to refer simply to telling the public about the benefits of competition. Therefore, hope that, in considering the amendment, the Government will have regard to what the Department for Education and Skills is assiduously trying to do in its citizenship programme. Indeed, I hope that they will have regard to the assurances given in both Houses that that would be the nature of citizenship education.

I close by saying that in key stage 4, which covers the 15 to 16 year-old age group, it is specifically stated in the statutory order that pupils should be taught about, how the economy functions, including the role of business and financial services … the rights and responsibilities of consumers, employers and employees … the wider issues and challenges of global interdependence and responsibility, including sustainable development". As I said, I hope that the Committee, and the Government in particular, will consider that, against that background, the amendment is entirely consonant with what the department is trying to achieve.

6.45 p.m.

Lord Hodgson of Astley Abbotts

I find myself in sympathy with much of what the noble Lord, Lord Phillips, has just said. I tabled Amendment No. 24 because of the nature of the wording in Clause 6(1)(a). It seems to me that the use of the word "benefit" is inappropriate, and I seek to replace it with the word "affect". I am afraid that my writing is very had, and the word should be "affect" and not "effect", as it appears in the Marshalled List. I hope that the Minister will forgive me on that point.

The purpose of the amendment is rather along the lines of what the noble Lord, Lord Phillips, has just said. It is to require the OFT to be even-handed in its approach in explaining the pluses and minuses of competition. Important and vital a body though it is, I do not see the OFT as a missionary or propagandist for competition. It is a regulator of competition. It ensures that competition survives—a very important function. But it should not have to trumpet its virtues all the time.

One reason that I am concerned about this matter is that, when one talks about the benefits of competition, very often one comes down to discussing it in terms of quantifiable elements, of which price is often the most easily assessable. Price is vital but it is not everything. There are less quantifiable elements—for example, service and availability—which are equally important.

I give a simple example. The food distribution world is now dominated by supermarkets, as the Minister knows. They offer long hours of opening, a huge range of foods and low prices. They meet the aspirations of the vast majority of people but not everyone. For some people—the elderly, the infirm and those living alone—a local shop is more attractive. It is not only the fact that such shops are physically close to the individuals; they provide an opportunity for a chat and the chance to pass the time of day.

How will that be dealt with when we discuss the benefits of competition? Competition from the supermarkets is driving out small shops, and, for some people, that is not a benefit. It may or may not be a loss, but it certainly affects the consumer. If the OFT is to have an educational role—I am happy for it to have one—then it must talk in a more balanced way about what is happening as a result of competition: who is winning, who is losing and what is coming from it. I do not doubt that the OFT can do that, but it should not have to talk just about the benefits. There are negatives to the way in which services are provided to some sections of society, as in the example I have given and in other similar cases.

I hope that the Minister will carefully consider how we can make the wording of Clause 6(1)(a) more evenhanded and more appropriate to the role of this important independent body.

The Lord Bishop of Derby

I welcome the place given by the Government in Clause 6 to public accountability as distinct from simply parliamentary accountability. At the same time I welcome the timely amendment. I add my support to the qualifications which would be given to the clause as drafted by words such as "free and fair" and "ethical and social responsibility". I believe that that will give a degree of comfort to the public at a time when evidence of matters such as share dealings indicates that public confidence in business and competition has been seriously undermined.

Lord Borrie

The right reverend Prelate underlined points made by other noble Lords and in particular the point made by the noble Lord, Lord Phillips of Sudbury, of the desirability of the public knowing about matters of ethical and social responsibility. The noble Lord, Lord Phillips, also made a number of other important points, including on the subject of the education of children.

One of the difficulties about each of the three amendments in this group is that they come within a clause concerned with the functions of the OFT. It is unfortunate that we are discussing them at the beginning of the Bill rather than at the end. Whatever the desirability of the public having knowledge of those matters and of discussing regulatory burdens and the ethical aspects of business, there is a question mark over whether that is a function for the Office of Fair Trading, which is to pursue and promote competition; to remove difficulties in the way of competition and to promote consumer benefit. I deliberately use the word "promote" in that context because the noble Lord, Lord Hodgson, wanted the function of the OFT to be much more balanced in that regard.

However, it strikes me that the specific functions of the OFT in the Bill and in the Competition Act are partisan in the promotion of competition. More balanced judgments are made by the Competition Commission and others. In future, it will be part of the job of the Office of Fair Trading, as it has been in the past 30 years, to be partisan in those respects. In its role—as distinct from the role of other people—in giving information to the public and in educating children it seems appropriate that it should do so in the terms of Clause 6 in relation to the benefits of competition, consumer protection and so forth.

We have said a few words today about resources. The OFT can carry out its informational and educational work only on the back of its experience, which is in terms of the economic benefits of competition and consumer protection. It does not have those other functions which we should like someone to have in terms of information and education.

Lord Phillips of Sudbury

I am grateful to the noble Lord, Lord Borrie, for giving way. Surely, we are talking of the Office of Fair Trading; not the office of trading. There are public interest considerations in the Bill. In Clause 8, for example, the OFT has a function to promote good practice. The Bill is littered with value judgments. Does the noble Lord seriously suggest that none of those matters is to be considered by the OFT?

Lord Borrie

All I suggest is that if we examine all the specific functions, powers and duties of the Office of Fair Trading, 90 per cent or more of its time is taken up with case law, studying cases and markets, and promoting the economic benefits of competition. It does not concern itself beyond those specific duties. It is principally an enforcement body. In so far as it can be educational and helpful to that extent, it can be so only on the back of its normal day-to-day role; otherwise it would have to import other resources, bring in other people and have a much broader function than it has had for the past 30 years. It is not intended by the Bill that it should have a much broader function.

Lord Sainsbury of Turville

Amendments Nos. 22, 23 and 24 all seek to amend the function of the Office of Fair Trading of making the public aware of the ways in which competition may benefit consumers and the economy.

I begin by reminding noble Lords of the purpose of Clause 6. A key role of the OFT, as its mission statement states, is to make markets work better for consumers. That is reflected in the clause, which gives the OFT the function of promoting to the public the benefits that competition has for consumers and the economy, and of providing the public with information or advice on matters relating to its functions. Competition does indeed benefit consumers. The best form of consumer protection is choice. The clause will help to create knowledgeable consumers who are more aware of the importance of competition, more confident of their rights and more demanding. Such empowered consumers drive quality improvements and innovation.

Amendment No. 24 proposes that the OFT will have the function of making the public aware of the ways in which competition may affect rather than benefit consumers and the economy. The intention of the clause is very much that the public should become aware of the benefits of competition. That is what the Bill is about: believing passionately that competition brings benefits. That is why the clause states "benefit" rather than a more neutral word such as "affect". In my view the amendment would dilute the intention of the clause. I am surprised that noble Lords on the other side of the Chamber do not share our belief that competition brings benefits. The noble Lord, Lord Hodgson—

Lord Kingsland

I thank the Minister for giving way. I am rather puzzled by that remark. Can the Minister explain why he believes that this side of the Chamber does not believe in competition?

Lord Sainsbury of Turville

We are discussing a clause which states that the OFT should put forward the benefits of competition. The amendment suggests that that is too strong a task for the OFT; that essentially it should put forward a neutral view and state that competition has benefits but also some disbenefits. It is a rather strange view that competition involves only price and does not involve innovation, service or quality. That is an extraordinary view of competition. This is about the benefits of competition. We are saying in this clause that the OFT, the job of which is to promote competition, should strongly put forward those views. The amendment seems to suggest that that should not be done.

Lord Hodgson of Astley Abbotts

I am grateful to the Minister for giving way. The clause is headed, Provision of information etc. to the public", which is propagandist. That is not to say that there is not value in competition. Of course competition is good, otherwise one would oppose the principle of the Bill. However, there is a question as to whether a body such as the OFT, which is set up independently, should be missionary or propagandist, or whether one should state, "Your job is to regulate the competitive field and to leave someone else to describe the benefits; both pluses and minuses". However, to state that that body should be propagandist seems to be moving away from being fair to the public.

7 p.m.

Lord Sainsbury of Turville

That might be so if the whole tenor of the debate had been that the OFT should have no information at all. However, we have another amendment that suggests that it should have a propagandist role on the question of regulations, which, of course, is not central to its functions. I am not quite certain whether this constitutes an objection to competition or an objection to the OFT having any informatory role. It seems to me that the proposals are directed at saying that we must have a more qualified view of competition, and not highlight the benefits.

Amendments Nos. 22 and 23 both seek to amend the description of what the OFT should be promoting awareness of. Amendment No. 22 seeks to give the OFT the general function of promoting awareness of the need to reduce the regulatory burden on UK business and commerce. I should emphasise that this Government are committed to ensuring that they regulate only when there is good reason to do so, and when the benefits clearly outweigh the costs. When they regulate, the Government want to do it as simply and as effectively as possible.

The Enterprise Bill makes existing regulations more streamlined, targeted and transparent. It does not impose additional regulations on business. Indeed, businesses will benefit from a more effective and predictable competition regime, the reduction in unfair competition from those traders who do not meet their legal obligations, and a modernised insolvency regime that promotes enterprise.

We agree with the importance of reducing unnecessary regulatory burdens on business, but we do not consider it appropriate that the OFT should be given a general function to promote awareness in this respect. I very much agree with my noble friend Lord Borrie that this approach would not fit in with the intention of the clause; nor, indeed, with the general purpose of the OFT. The question of how to reduce regulatory burdens on business should be addressed in government policy and legislation, rather than by way of an "awareness raising" role for the OFT.

Amendment No. 23 seeks to amend the clause so that the OFT would have the function of making the public aware of the role of free and fair competition in the economy within the context of business commitment to "ethical and social responsibility". I certainly agree with the importance of ethical and social responsibility in business. However, I must disagree with what the noble Lord, Lord Phillips, said at Second Reading; namely, that an excess of competition is anti-social. As I said earlier, strong competition is good news for consumers. The clause is not, to use the noble Lord's word, "propagandist"; it is designed to help empower consumers. It is not in line with the OFT's functions to have a general function to promote ethical and social responsibility in business, and certainly not the focus of this clause.

However, that is not to say that we do not believe that the ethical and social responsibility of business should not be promoted. Indeed, as the noble Lord will know, we do that through a whole series of different routes—for example, through our promotion of social enterprise, through our promotion of corporate social responsibility, and by way of the review of company law. As the noble Lord, rightly pointed out, bringing citizenship into the national curriculum is also a way of encouraging ethical and social responsibility. These are the ways to do it, not through a body, the Office of Fair Trading, which is concerned with promoting competition.

Quite simply, I believe that we should require the OFT to concentrate and focus on its primary task; namely, the promotion of competition. We should have the confidence to let it promote the benefits of competition, because that is its role. If we did not believe in that, we should not have such a competitive authority. On that basis, I invite the noble Lord to withdraw his amendment.

Lord Phillips of Sudbury

For me to say that I am grateful for the Minister's response would, perhaps, be insincere. I am deeply disappointed in the Minister's remarks. I do not understand the impression that I gain from his comments; namely, that, for him—he said it himself—I am "passionately" in favour of competition, as if competition was a clearly defined modus operandi. Under the guise of competition exist many and various forms of business organisation and activity. When I said at Second Reading that I thought that an excess of competition could be anti-social, I meant that passionately. Surely we see evidence of that on all sides, especially at this time.

No one in this Chamber of whom I am aware—indeed, no noble Lord on Benches that hitherto had many doubts about competition—any longer doubts the central role of free market enterprise in our society. The Minister said that we should not worry the head of the OFT with all this, while the noble Lord, Lord Borrie, said that it is all far too complicated for the OFT to start thinking through what constitutes good practice, or fair trade. I believe he then went on to suggest that other people would have to be brought in—and a damn good thing!

Frankly, I simply do not understand the intention to leave the issue of business education—if you want to call it that—within the ambit of the Office of Fair Trading, which is a hugely powerful body with statutory powers to spend state funds in entering into the realm of citizenship education, without putting it into a broader cultural context and one with which the Minister agreed at the end of his speech when he talked about "corporate social responsibility".

I should be most grateful if the Minister would reconsider the matter. In the reality of the delivery of citizenship there will be many competitive influences as to what should be taught. I have in mind the opportunities and the available resources that will deal with issues of business, enterprise, competition, and social responsibility. There will not be many hours or resources devoted to that end. It would be a tragic mistake to extract from that situation the possibility of the OFT, which will be the most important element in all of this, engaging in that part of the citizenship curriculum.

Lord Kingsland

Having been lampooned by the Labour Party throughout most of my political life as a proponent of Manchester School market economics, it is somewhat bizarre to find myself in the position of being accused of not believing in competition. Just for the record, I refute that allegation. In any case, my amendment—

Lord McIntosh of Haringey

I should point out to the noble Lord that "to refute" is to prove the opposite.

Lord Kingsland

Exactly.

In any event, Amendment No. 22 is the one amendment in this group that does not refer to competition; it refers to regulation and the desirability of engaging the OFT in the battle, to reduce the regulatory burden on UK business and commerce". I take it that the Minister wishes to reduce that burden on business and commerce. I know that the Bill foresees a role for the OFT in that respect. I hope, therefore, that I can reasonably conclude that he supports the spirit of my amendment, if not its proposed position in the Bill.

Perhaps I may reflect on the other part of the debate on the amendment that took place as a result of the amendments tabled by the noble Lords, Lord Phillips and Lord Joffe, and by my noble friend Lord Hodgson. In my view, it is very difficult to divorce ethical judgment from the concept of competition. For example, in some competitive societies it might be wholly acceptable for a powerful firm in a market to cut its price ruthlessly over a period of time to drive out other competition. In the United Kingdom, I hope that we would regard that as unfair competition.

However, there may be other market economies in the world that have not yet reached that stage of maturity. Equally, I suppose, there may be some societies that permit child labour—something that we once did in the 19th century—in order to steal a competitive march over their rivals. Nowadays, we would regard that as unfair competition and wholly unethical. In my judgment, one cannot divorce ethics from a competitive market-place. If one looks back to the competitive market-place in 19th-century Britain, one would see that it was an entirely different ethical sub-structure to competitive activities than the one that we have today. Thank Heavens that we have made such progress.

I entirely understand why the noble Lord, Lord Borrie, suggested that we should not introduce factors that are not germane to the judgments that the OFT has to make. However, underlying the judgments that the OFT is asked to make in this Bill are important ethical propositions. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 23 and 24 not moved.]

Clause 6 agreed to.

Clause 7 [Provision of information and advice to Ministers etc.]:

Lord Hunt of Wirral

moved Amendment No. 25: Page 3, line 13, at beginning insert "Subject to the overriding requirement to keep sensitive business information confidential The noble Lord said: I reinforce the words of my noble friend Lord Kingsland. I sat on the Front Bench from 1977 to 1995 and heard the Labour Party criticise the Conservative policies of full, fair and free competition, so I am not surprised that the noble Lord, Lord Phillips, was a little confused. The Minister has gone charging off in the completely opposite direction to the policy the party pursued for many years and has perhaps gone too far in denying the ethical considerations and social context laid down by the noble Lord, Lord Phillips of Sudbury.

I turn to another area where I had hoped to see more from the Government; namely, the Freedom of Information Act. It may be of assistance if the Minister could tell us where the Act is. There appears to be general confusion, not only in this Chamber but also within the Government, as to when and where it is corning into effect. Perhaps he will daily a moment or two and give us a little background as to the whereabouts of the Freedom of Information Act.

Amendment No. 25 deals with the publication of the information and advice provided to Ministers. I had responsibility for open government and, indeed, also for the code of open government. I recall that the Labour Government came to office on a pledge to implement legislation to ensure that information and advice to Ministers from outside bodies was published. Therefore I make no apology for now giving them the opportunity to deliver on that promise. Amendment No. 25 would insert into Clause 7 the words, Subject to the overriding requirement to keep sensitive business information confidential", and Amendment No. 27 would add, on page 3 line 22, the words, any such proposals, information and/or advice made or given to a Minister of the Crown or other public authority shall be published". There is also a proviso that where the proposals or advice have been published, there should be a reasoned response within six weeks. However, I do not press that amendment as hard as I press Amendments Nos. 25 and 27, which would ensure, subject to confidentiality, that the proposals are published.

Clause 7 would presumably enable the OFT—the Minister can confirm this—to make Ministers aware of areas where, in its view, laws and regulations were creating barriers to entry to markets and competition or where markets were being channelled in a specific direction which was holding back innovation and progress. I mention that because I heard Melanie Johnson say—I cannot remember the context—that that was the purpose of Clause 7.

If the clause deals with general trends, and if the Government believe in transparency, what is the problem in making that advice public? It would greatly assist a wider discussion of those barriers and the problems holding back innovation and progress if there was to be publication of the advice. It would not greatly assist fair trading for such advice to be kept private behind the scenes, known only to Ministers and not even to Parliament. If the problems exist, then Parliament should be made aware of them and general publication would be a good idea. I hope that the Minister agrees. I beg to move.

7.15 p.m.

Lord Sainsbury of Turville

In reply to the comments on competition and ethical and social responsibility, one of the things of which I am most proud is that in both my business life and my political life I have held to the same line throughout; that is, to believe strongly in the value of competition that stimulates innovation and gives value to consumers, believing that alongside that one can put ethical and social responsibility on the shoulders of business.

The issue that we were discussing was whether or not a specific body should have the responsibility for dealing with questions of ethical and social responsibility which were not included in its function. If the noble Lord, Lord Hunt, was saying that we should have competition alongside strong views on the ethical and social responsibility of business. I am totally in agreement.

Amendment No. 25 seeks to make the OFT's provision of information and advice to Ministers or public authorities subject to an overriding requirement to keep sensitive business information confidential. The clause is aimed at the OFT commenting on general trends and specific legislation, not on specific companies. In any case I can reassure Members of the Committee that "specified information" cannot be disclosed by the OFT without having regard to the criteria in Clause 240 in Part 9 of the Bill. That criteria includes considering the need to exclude commercial information which may harm legitimate business interests. I suggest therefore that the amendment is unnecessary. In addition, the amendment as drafted might also hinder the capacity of the OFT to advise government and public authorities.

Amendments Nos. 27 and 28 seek to ensure that all proposals, information and/or advice to a Minister from the OFT is published and that any Minister of the Crown who receives proposals or advice from the OFT shall deliver (and publish) a reasoned response within six weeks of receipt.

Both of those amendments could place significant and unnecessary burdens on the OFT, Ministers and other public authorities. Publication of such material would not always be necessary or appropriate, and there is the possibility that it might harm individual and business interests. And it would not always be appropriate or necessary for the Government to publish their response to each piece of advice or proposal from the OFT. We intend to respond publicly when the OFT advise that laws and regulations create barriers to entry to markets and competition, or channel markets in a particular direction thereby holding back innovation and progress. The Government have committed themselves in the competition White Paper to publishing a response within 90 days of receiving such a report. But requiring a response within six weeks to every piece of advice that Clause 7 covers would be inflexible and unnecessary.

In view of those arguments I invite the noble Lord to withdraw his amendment.

Lord Hunt of Wirral

Can the Minister say where we are with the implementation of the Freedom of Information Act?

Lord Sainsbury of Turville

That comes into effect in January 2005.

Lord Hunt of Wirral

Under that Act, if it is to come into effect in 2005, would it not assist in ensuring that the proposals from the OFT were published if the amendment were to be accepted? As I understand it, under the Act the Minister's responses would have to be published. Against that background, why is the Minister not willing to consider the amendment? It may be that he will want more time to do so.

Lord Sainsbury of Turville

We shall need to look at that detail. We are talking about a reasoned response being given within six weeks of receipt thereof. That is rather a strong requirement. We think it is an inflexible one. Obviously, the Freedom of Information Act—when it comes into force—will take over that issue.

Lord Hunt of Wirral

I am grateful to the Minister. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Hunt of Wirral

moved Amendment No. 26:

Page 3, line 22, at end insert— () it shall also be a function of the OFT to issue guidance to trading standards departments about the use of their powers to obtain "Stop Now" orders and to ensure that such powers are used consistently. The noble Lord said: We now turn to stop now orders. I believe that the Government intend to improve the consistency of approach in the use of stop now orders. The amendment seeks an additional function for the OFT to issue guidance to trading standards departments about the use of their powers to obtain stop now orders and to ensure that such powers are used consistently.

There are considerable concerns as to how the 200 trading standards departments across the country use their powers. They have varying amounts of resources to devote to particular abuses. They have different priorities. There have been failed attempts to ring-fence resources. Some trading standards departments have been hard hit by cuts in expenditure. The Trading Standards Institute and the Local Government Association have strong views about that.

This all produces a rather disparate accumulation of differing standards in different parts of the country. The subject of the amendment is inconsistency between different trading standards departments in different local councils. Surely, the OFT should have some overview of how stop now orders are carried out in practice.

The OFT has a duty to issue guidance on stop now orders under the Stop Now Orders Regulations 2001. I appreciate that we are not debating those at the present time. Under Clause 224 there is a duty to issue guidance on the corresponding provisions in Part 8 of the Bill.

Interim draft guidance was published by the OFT on stop now orders last year. After extensive consultation, the final version was published a few weeks ago. These are complicated documents. I hope that the Minister will agree that it would be helpful to have some reassurance about the emergence of these differing standards, and to find some way—if not with this amendment—for the OFT to have a general overview to ensure that such differing standards do not emerge. I beg to move.

Lord Sainsbury of Turville

The amendment seeks to improve the consistency of approach in the way in which stop now orders are used, and I thoroughly support its intention.

The amendment aims to do two things: first, to give the OFT a duty to issue guidance. As the noble Lord pointed out, this is unnecessary because the OFT is already under a duty to issue guidance on stop now orders under the Stop Now Order Regulations. Clause 224 puts the OFT under a duty to issue guidance on the corresponding provisions in Part 8. Again as the noble Lord said, the OFT issued interim draft guidance on stop now orders last year, and, after extensive consultation, the final version was published on 10th April 2002.

The amendment also seeks to place a duty on the OFT to ensure that stop now order powers are used consistently. We also want the powers in the Stop Now Order Regulations and Part 8 of the Bill to be used consistently by enforcers. The OFT's guidance has the aim of promoting consistency. It can direct that enforcers—other than Community enforcers—may not take a case to court if another enforcer is already doing so, to prevent business facing duplicate proceedings. But the OFT does not have a general power to direct the activities of trading standards departments which are part of local authorities. We do not think that it would be appropriate to give the OFT such a power. We would expect the OFT to do everything it could to support and encourage the consistent use of these powers, but it would not be right to put the OFT under a duty to ensure that when it does not have the power to do so. These powers rest really with the local authorities.

There is nothing between us on wishing to see consistency on the matter. I believe that we are giving the OFT the powers it needs to do the job as far as it should be doing it, but leaving that ultimate responsibility with the local authorities. I hope that with that reassurance the noble Lord will withdraw his amendment.

Lord Hunt of Wirral

I am grateful to the Minister for so clearly acknowledging the problem. I should like further time to consider what he has said about the inappropriateness of a general power for the OFT to direct the activities of trading standards departments. He said that it was a matter for local authorities. Of course there is no overall power that could look across the country at how different local authorities utilise those powers. Under Amendment No. 30 we shall have a further discussion of this subject and I hope that we might return to it at a later stage. Perhaps at that later stage the Minister might think again, given that the OFT is the only body—not a local authority—which could look over the whole country at the differing standards. I am very grateful to him for his words. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 27 and 28 not moved.]

Clause 7 agreed to.

Clause 8 [Promoting good consumer practice]:

Lord Hunt of Wirral

moved Amendment No. 29: Page 3, line 25, leave out "the economic interest of The noble Lord said: I should like to ask the Government why the phrase "the economic interests of" has crept into Clause 8(1). It states: The OFT has the function of promoting good practice in the carrying out of activities which may affect"— not "consumers in the United Kingdom", but— the economic interests of consumers in the United Kingdom". Subsection (6) refers to a "consumer code", safeguarding or promoting the interests of consumers", not the "economic interests of consumers". Can the Minister explain why he has restricted the OFT's function in that way? One of the key issues—certainly when the Bill was considered in another place—was this constant emphasis on looking after the interests of consumers. I could not understand why, in promoting good consumer practice, it was only when the consumers' economic interests were affected that this particular function applied. I beg to move.

Lord Sainsbury of Turville

My answer can be very short. The amendment effectively widens the OFT's function to promote good practice in all areas of interest to consumers. Everyone would agree that that would be impractical as it would include areas such as health and safety where the OFT has no powers or interests.

The principle of the clause is that by approving codes of practice the OFT will help consumers to find reliable traders. It is in order to differentiate their economic interests that we have drafted this part of the Bill in this way. I hope that noble Lords will agree that the responsibilities of the OFT should not include areas such as health and safety, which the clause would if it was widened in this way. I hope that the noble Lord will withdraw the amendment.

Lord Hunt of Wirral

I am grateful to the Minister for his comments. I should like to reflect on what he said and, perhaps, return to the issue on Report. I beg leave to withdraw the amendment.

Lord Davies of Oldham

I beg to move that the House do now resume. In moving that Motion, I suggest that Committee begin again not before half-past eight.

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

House resumed.