Enterprise and Regulatory Reform Bill

Debate between Viscount Ullswater and Viscount Eccles

Tuesday 18th December 2012 Grand Committee

[The Deputy Chairman of Committees (Viscount Ullswater)]

My Lords, if there is a Division in the House, the Committee will adjourn for 10 minutes.

[Viscount Eccles]

I would like to detain the Committee briefly on a point of clarification that arose out of last week’s proceedings. Grand Committee Hansard for last week states:

“The creation of the CMA has also been welcomed by business groups and practitioners, including the CBI, the Federation of Small Businesses, the Institute of Directors, the Forum of Private Business and the City of London Law Society”.—[Official Report, 12/12/12; col. GC 335.]

The Committee will remember that we were debating the creation of the CMA under Clause 20. In col. 338, my noble friend Lord Razzall said that,

“all the major business organisations and the Law Society are in favour of this recommendation”.—[Official Report, 12/12/12; col. GC 338.]

That did not tally with my memory of the Government's response to the consultation on this matter.

Paragraph 317 of the consultation, which was admittedly published some time ago, states:

“A number of respondents expressed stronger concerns about the creation of the CMA and did not support it. Notably, the City of London Law Society and the Joint Working Party of the Bars and Law Societies of the UK on Competition Law (‘Joint Working Party’), echoed by many individual law firms in their responses, considered the proposed CMA to involve some real disadvantages that outweigh the potential efficiency benefits”.

So the government document published in March said in terms that neither the City of London Law Society nor the Law Society, which are two completely different organisations, supported the creation of the CMA.

Now I recognise that they may have changed their minds. When three Front Benches agree something it seems to become inevitable and in true British style they decided to make the best of it. But at that time it is quite clear that they did not agree.

I have gone over the ground with the Law Society. I confess that my impression is that it has not changed its mind. It repeats that,

“the merger is not expected to achieve any material cost savings; and, although there is potential for a single CMA to deliver efficiencies of the kind mentioned in the Consultation Paper, the [Joint Working Party] is very doubtful about the scale of such benefits. More importantly, the [Joint Working Party] sees a real risk that the benefits of the merger will in practice be more than outweighed by the loss of the benefits of independent decision-making by separate organisations”.

The Law Society ends by saying:

“The scale of these risks is such that the [Joint Working Party] is not persuaded of the case for a single CMA”.

As the whole burden of my own argument was that we were running into trouble with the legal profession if we created the CMA on a single-institution basis, it was quite important to clarify where these two important organisations now stand.

[Viscount Eccles]

I thank my noble friend for that clarification.

[The Deputy Chairman]

My Lords, there is no question before the Committee so we cannot have a debate. I call Amendment 24C.

Schedule 5 : Amendments related to Part 3

Amendment 24C