Competition Act 1998 (Land Agreements Exclusion Revocation) Order 2010

Lord Borrie Excerpts

Wednesday 23rd June 2010 Lords Chamber

[Lord Young of Norwood Green]

My Lords, on this occasion I find myself concurring with that superb analysis from the noble Baroness. I suppose that it is not surprising, given my previous association with my honourable friend in the other place, who was responsible for introducing this instrument.

[Lord Borrie]

My Lords, I commend the Minister and my noble friend Lord Young for their support for this proposal. It was pointed up by one reference to which the Minister referred, the Competition Commission report in 2008 that dealt with grocery retailing. We all know that there has been quite a lot of scandal and abuse in that field, with some supermarkets leaning on small farmers and other people in a way that has damaged competition and the interests of consumers. Exclusivity arrangements in a particular area can prevent the entry of competitors, and it is fortunate that this ruling today—if we approve the new order—will be dealt with effectively.

I draw attention to paragraph 9.1 of the Explanatory Note, which says:

“Following the Order’s revocation, there may be increased demand for OFT advice to parties about the compatibility of land agreements with competition law”.

The Minister has explained that the OFT is going to produce revised guidelines and that time is to be given so that the order does not become immediately effective and those who have not done their homework will still have time to do it. I am all in favour of that, but I would like an assurance from the Minister that the OFT has got and will be allowed to have adequate resources, which will not be cut, to deal with what may be quite a lot of requests for advice. After all, one should remember that many parties to agreements that will now be unlawful because they are anti-competitive may be small parties. They will not have their own legal departments that they can lean upon and from which they can immediately get a response. They will have to go elsewhere, to a trade association or a private lawyer. I suggest that very often the obvious place to go to will be the OFT. Can the Minister assure me that they can do that particular job?

[Baroness Wilcox]

My Lords, I thank noble Lords for their contributions to this debate. I thank the noble Lord, Lord Young, who I hoped would give his support, as this is after all his work. The knowledge that the noble Lord, Lord Borrie—the previous director-general at the Office of Fair Trading—will be here always sends a shiver through me, because I always know that he is going to ask me a question that I cannot answer. In this case, his points are valid. Yes, we are allowing more time and, yes, the OFT will be helping and guiding. I assume that it will be able to do that within the range of funds available to it, and I am sure that the noble Lord will be the first to complain if objections arise because it has not been able to respond. I hope that that is not the case.

The noble Lord makes the case that many of these parties will be small ones that will need help and advice, and will have to turn to outside advice since they will not have in-house lawyers. I hope that I can reassure him on this point. If there is anything more that I should have said to him, I shall receive advice from the Box and write to him to confirm.

I hope that we are happy to continue with this order, which will remove the doubt that land agreements in line with other agreements must be properly assessed to ensure that they do not restrict competition. The Government’s purpose is to provide for consistent application of the law and to promote effective competition in markets, helping to deliver value and quality for consumers while boosting productivity and efficiency for business. By delaying the effect of the revocation until next April, we are giving parties sufficient time to review their existing and future agreements in line with the OFT’s latest guidance. They will also have the breathing space to make any necessary adjustments to comply with the law. I commend the order to the House.