Public Bodies Bill [HL]

Debate between Lord Borrie and Baroness Kingsmill

Monday 28th March 2011 Lords Chamber

[Lord Borrie]

It would be churlish of me not to welcome the 172-page document that has been issued. I have been one of those who has suggested that one common feature of the Public Bodies Bill is that whole lists of organisations covering every conceivable subject were inserted into schedules, in nearly all cases without any explanation as to why or how their functions would be replaced or where we were to go from here. It was a rushed job. Among the bodies listed when Schedule 7 existed—and I am glad that the Government have got rid of it—were the Office of Fair Trading and the Competition Commission.

The Minister said several months ago when we first touched on this, at Second Reading and in Committee, that the intention was to merge those two bodies. Then it became clear that they were not being abolished but somehow brought together. I say “somehow” because it is only now, or 10 days ago, that we have had the 172 pages of explanation. Delighted though I am to see that document, it still raises the issue of how the Government still want by this amendment to insert the Competition Commission and the Office of Fair Trading into the schedule when they have not yet had the outcome of the consultation. In other words, the Government still want to determine the future and merger of these two bodies before they have received the answers to the question that the consultation paper very fairly raises of what the advantages or disadvantages would be of a merger.

It is not appropriate in this debate to raise large numbers of issues about that very lengthy document, and I hope there will be other occasions on which to do so. However, in relation to the Office of Fair Trading, which is to become part of the Competition and Markets Authority, a number of provisions in the first eight or 10 sections of the Enterprise Act 2002 list a whole lot of functions for the Office of Fair Trading—to promote consumer interest, to educate and inform consumers and to have various other functions. The Minister might say that some of those functions will go to Citizens Advice and some will go to trading standards offices. That might be so. However, as a debate on this Bill and the loss of the National Consumer Council indicated, the Minister explained that Citizens Advice would be adequately resourced to be able to substitute for what the NCC now does. The suggestion in the consultation paper to which the Minister now refers indicates that the consumer functions of the OFT are to disappear, as are the consumer functions of the National Consumer Council. Am I right in thinking that that is the result of bringing together the competition functions of the OFT and the Competition Commission?

Furthermore, how are the new bodies to function? I am interested to find that the consultation document seems to further the idea that has been working well for 40 or 60 years of a two-stage investigation. The main first investigation, the prosecutorial investigation, was done by the first government department, and then the OFT when it came into existence. The second stage investigation was of a more quasi-judicial type, with experts from different parts of business and the professions brought together in panels to determine individual cases. That range of expertise to be drawn upon by the Competition Commission has generally been thought of, internationally, as a very helpful procedure. As far as I read it—I hope that this is broadly correct—it is intended that the panel system should continue but it is suggested that more people should be full-time rather than part-time. I have generally thought that the very part-time nature of the Competition Commission’s panel members is their plus point, because on every day of the week except for one, or perhaps two, they are in their own business, profession or work and bring that in to inform their work as members of the Competition Commission when investigating cases.

I then noticed that it is intended that the actual employees—the economists, lawyers and civil servants within the Competition Commission—are to operate as teams not just at one stage or at the second stage but right the way through. That might be because there is a conflict in the mind of the Government. It might be to do with wanting to save money, which you do if only one team operates on the same case throughout instead of moving from one to another. Yet it also makes it more difficult, surely, for the second stage to be truly independent of the investigation. To make a rather crude analogy, you have the work of the court getting mixed up with the work of the investigators and the police.

I have those various doubts and questions, but then I, like everyone else who has it, has only just received the consultation paper. I think the noble Lord said that we have two or three months to go through it and give our answers but why, here and now in March when the consultation paper has only just gone out, are we as the House of Lords being asked to determine in this Bill that there shall be a merger of these two bodies?

[Baroness Kingsmill]

My Lords, I support much of what my noble friend Lord Borrie has just said. I have always been in favour of a merger of these two bodies and am pleased to see that the Government are thinking of bringing that about. I have received the consultation paper and I have not yet come to terms with all the points therein. This is a merger that, on the face of it, has a lot to commend it—as I said, I have always supported it—but I feel that the devil is in the detail and that there is much detail to be determined.

From what I have seen in the consultation paper, the one aspect that I regret is the separation of consumer protection from competition issues. When I was at the Competition Commission, our primary and overriding rule was the public interest. We felt constantly that we were protecting the interests of consumers. It is regrettable to separate out those consumer interests and consumer protection from the competition regime. While it is very good that it is proposed that the panel system should be retained, the balance between that panel of, if you like, independents and the professionals who are fully employed must be carefully regulated. I also agree that the part-time nature of the role is one thing that enables its independence and expertise to be maintained.

We also ought to be looking at the separation of the two roles or stages within the competition regime. The first stage is a sort of triage: how serious, how big and how important is this, and what are the main issues? It is important to have that first stage, and it is fundamental to the fairness of the whole procedure that, once that triage stage has happened, it should move on to another panel that looks at it afresh, having had the triage diagnosis to enable it to do so. From my point of view as an ex-regulator and as one who is now on the boards of many companies that have undergone and are undergoing competition investigations, business needs certainty and speedy results. We must ensure that the merged body produces both. If it does, as a result of the consultation document that emerges, that could be a very good thing.

I continue to have a number of questions about this and I think it is a shame that this merger should be regarded and looked at in the context of the Public Bodies Bill. It deserves a piece of legislation of its own and should not just be shovelled in with the consultation document, with such a short time to consider it. Having said that, it is, on the face of it, an appropriate merger.