Enterprise and Regulatory Reform Bill

Lord Borrie Excerpts

Wednesday 12th December 2012 Grand Committee

[Lord Borrie]

My Lords, this is a useful amendment for my noble friend Lord Whitty to move at the outset because it is broad and makes important points. I also thought that the noble Lord, Lord Lucas, brought an interesting matter before us. I do not think that it is necessary to make that amendment to the Bill because I have little doubt that the Bill as it stands gives the new amalgamated body, the Competition and Markets Authority, all the powers it needs to investigate the problems of which he has spoken.

With regard to my noble friend Lord Whitty’s amendment, it is useful for monopsonies to be included because it makes it clear that there can be a monopoly on the buyer’s side as well as the supplier’s side. Leaving aside a statute dealing with particular matters of Queen Elizabeth I, in Britain the first statute dealing with monopolies was in 1948. Under that Act, together with the legislation of the European Community, which came in when we joined the then Common Market, it was the abuse of monopoly that was regarded as undesirable and something that should be attacked.

Monopoly as such is not necessarily a bad thing. I do not see that it is any different now, in 2012, from what it was in 1948. You can have monopolies that justify themselves and prove themselves for various reasons; for example, it may be feasible to have only one supplier in a local or national area, and as long as the power is not abused, competition authorities do not need to worry about it. My only query to my noble friend Lord Whitty is that the wording of the amendment suggests that he wants action,

“to reduce cartels, monopolies and monopsonies”.

To investigate or inquire into whether the power is misused is one thing, but I very much doubt whether this should be inserted after the very proper requirement of promoting competition.

--- Later in debate ---

[Baroness Crawley]

My Lords, as president of the Trading Standards Institute—excuse my cold—I agree very much with my noble friend Lord Whitty that there is a need at this point for precision when it comes to the role and functions of the CMA and the transfer of functions from the OFT. I especially agree when it comes to the funding of the transfer of those functions. There is a lot of uncertainty around that at present. There is a good will and hope but we need some answers from the Minister at this point about both national and local authority funding—the latter is under unprecedented pressure—to ensure that this devolution process operates as best it can and strengthens rather than weakens the role of the consumer. We must have some answers as far as funding of the transfer of functions from the OFT is concerned.

As my noble friend Lord Whitty said, some of the roles of the OFT will go to the National Trading Standards Board. However, as he said, that does not have a statutory underpinning. As far as I can see, it is a new animal in the process of being created. The Minister would help us all if he gave us some idea of the accountability within the creation of the National Trading Standards Board. There is a great deal of work being done, as noble Lords can imagine, to ensure that consumers will continue to be protected to the highest standard. I have nothing but admiration for the people trying to make that work, as far as both trading standards offices and the National Trading Standards Board are concerned, the latter made up of senior trading standards officers working across borders. However, we need some answers from the Minister on both funding and accountability within the board, and some idea of the way in which the Government believe that there can be a cohesive landscape at the end of this process.

[Lord Borrie]

My Lords, I very much agree with pretty well everything that has just been said by my noble friend Lady Crawley. She is the current president of the Trading Standards Institute, which has done a great deal of good over many years, not only in the individual local authorities which it represents but in getting together on a number of matters. That has reached a kind of culmination in the creation of the National Trading Standards Board, whereby it can get together and discuss matters, particularly a scam or whatever it is in the way of anti-consumer activity that is being indulged in. It gets together and ensures that the stronger of the trading standards offices takes up the cudgel and takes the enforcement action.

One of the most remarkable things about the provisions we are dealing with in the Bill is that we are on Clause 22. We know that Clauses 20 and 21 create the new authority and refer to the amalgamation of the Office of Fair Trading and the Competition Commission. Yet whereas on competition matters the new authority clearly has the powers to deal with anti-competitive activity, the Bill does not deal with the considerable number of powers which the Office of Fair Trading has built up over the years. They are left in limbo. Therefore, there is a great deal of uncertainty, except on the basis of government statements—it is not in the Bill. Only in government statements have we got some idea of who is to do the advocacy for the consumer and who is to do the other matters that my noble friend Lord Whitty has referred to in Amendment 24ZB—consumer education, consumer advice, consumer advocacy and the enforcement of redress.

--- Later in debate ---

[Lord Borrie]

My Lords, I think that the Committee should accept, as a matter of principle, the point that my noble friend has been enunciating. Indeed, the experience of other regulators, including Ofcom, is that an in-house consumer panel—not strangers to the organisation but working closely with the regulator—is a good idea. Unfortunately, it cannot be called a consumer panel tout court in this Bill because of course there is something called the consumer panel already; that is, the people who make the decisions, the part-timers who are allocated particular jobs and make the final decisions of the CMA. That is all set out in Schedule 4. Perhaps some other means of dealing with my noble friend’s proposition has already been thought of by Her Majesty’s Government.

[Lord Skelmersdale]

My Lords, before the Minister responds, I note that the noble Baroness, Lady Hayter, has tabled Amendment 24BA, which is obviously a second string to her bow in this matter. I am rather surprised that it has not been grouped with this amendment. Be that as it may, it seems to me that rather than having another panel under the CMA, it would be far preferable to have a consumer representative on the panel that already exists under the Bill.