Public Bodies Bill [HL]

Lord Dubs Excerpts

Wednesday 9th March 2011 Lords Chamber

Moved by

[Lord Dubs]

89: Schedule 5, page 19, line 16, leave out “Competition Commission.”

[Lord Dubs]

My Lords, the amendments in this group are to do with the Competition Commission and the Office of Fair Trading. These are among the most significant bodies covered in this particular Bill. They are fundamental to both competition policy and to consumer protection.

In passing, perhaps I may say that I regret that the BSkyB matter was not referred to the Competition Commission, but I appreciate that the topic is not one covered directly by this Bill.

I understand the Government want to merge most of the functions of the Competition Commission and the OFT, leaving some to go elsewhere. Clearly, these are matters of enormous concern but I am quite sympathetic to the idea of merging the two bodies. I have always felt there was surplus capacity in the two bodies, and they were not as sharply focused as they might have been in that one referred issues to the other.

It would be interesting to know, however, which of the functions of the two bodies will not be part of the new body. In other words, some of them are going elsewhere. I understand Trading Standards will have to take on some of the responsibilities. It would be useful to know what is in the Government’s mind as regards what the new Competition Commission will consist of, and what functions will go elsewhere and why.

This not an occasion on which to go into the details of how the Competition Commission—or, indeed, the OFT—operates, but it is complicated, because the Competition Commission takes references from other bodies, such as the OFT and sectoral regulators. It takes appeals against decisions by sectoral regulators, and matters of public concern may be referred to it by the Minister. So it is a complicated issue and I would like to know what will be the basis for references to the new Competition Commission. Will they be similar to the old ones? They cannot all be the same because the OFT itself refers issues to the Competition Commission. Can the Minister throw more light on that?

Even if we are to go down the path of merging the two bodies, surely significant lessons must have been learnt from how they operate. We can do things better, a bit differently and more economically, and we should take experience to heart. I think that the Government are going to consult on this, and I would very much like to know the nature of the consultation, how full it will be, how long it will take and what opportunity there will be to make full representations to the Government on what they have in mind.

Having said that, the Competition Commission and the OFT were, I understand, both set up by primary legislation and subject to extensive debate in both Houses. They are significant bodies. I wonder what it is about them that makes them susceptible to the rather truncated procedure under the Bill. I know that that argument has been used about other bodies in the various schedules, but surely it applies with enormous force in the case of the Competition Commission and the OFT. Parliament—I am sure, most Members of this House—would like an opportunity to debate that in full and to be able to move amendments on the proposed new body: to consider the implications, for example, of transferring some functions to local authority trading standards authorities, when they are under severe financial pressure because of the cuts. What will be left of trading standards authorities after the cuts have taken place in local authorities? Will there be sufficient to take on the functions that have come from these two bodies into a local area?

This is an unhappy way to proceed. Even if everybody agrees that the two bodies should be merged—and I would guess that a lot of people would—there is still a need to consider how it will work out in detail. I am unhappy that we are doing something so significant on what is, more or less, the back of an envelope. I beg to move.

[Baroness Hayter of Kentish Town]

I will raise a couple of issues on the consumer aspects—although there may be no other issues, as that is the purpose of these two bodies. I have three questions on which I seek information from the Minister. First, in transferring enforcement of consumer law to local trading standards bodies, how can trading standards enforce significant breaches of consumer law at national level, such as bank charges or airline practices? My second question regards supercomplaints. Is the Minister satisfied that taking supercomplaints about competition direct to the new merged body—without, therefore, the two-stage process of checking on a case—has been carefully considered before the merger was proposed?

My third question is in respect of those supercomplaints which deal with consumer detriment which arises from particular features of a market. I have in mind for example, the current supercomplaint by Which? on payment method surcharging. It is not clear to me where those sorts of supercomplaints, which come under general consumer protection regulations rather than breaches of law on competition, would be taken under the new architecture.

--- Later in debate ---

[Lord Dubs]

My Lords, I am grateful to the Minister and I am delighted that he has accepted one of the amendments, although I am not sure that it is because he has accepted the full thrust of the argument. I think that he has done so for a slightly more technical reason, but nevertheless one should take one’s victories where one can get them. I am also grateful to my noble friends for the contributions they have made to this debate.

The Minister said that at a later stage the Government would be coming forward with further amendments. I hope that they will be tabled in this House. It would mean that I could say much less now than I would otherwise say if the amendments were not going to be introduced here. Does he know whether they will be brought forward in this House or in the other place?

[Lord Taylor of Holbeach]

There have been early discussions on this matter and I should like to be able to bring the amendments forward at the Report stage in this House.

[Lord Dubs]

I am most grateful for that helpful response. There is only one issue that I am not clear about. The present process for referrals to the Competition Commission is quite complicated, and as I indicated, referrals can come from a variety of sources. Will the new Competition and Markets Authority be able to investigate issues on its own initiative or will it depend upon referrals? Will those referrals come from the existing arrangements or will they come from elsewhere? I am not totally clear about this.

[Lord Taylor of Holbeach]

I think that I can reassure the noble Lord. The authority will not be entirely dependent on referrals. It will have the capacity, as does the current Competition Commission, to initiate investigations. This will be part and parcel of the consultation, which I hope will make the position clear for the noble Lord.

[Lord Dubs]

In which case, all I would say is that I still think it is too complicated an issue to be dealt with in this way. I understand that it is not of the Minister’s own choosing, but if we had been having a Second Reading debate today on a proposal to merge the two bodies and deal with other consumer protection and competition matters, it would have been much easier for us to handle it. It is not for us to change the Government’s approach, but I do regret it. However, I am grateful to the Minister for his response and I commend Amendment 89 to the Committee.

Amendment 89 agreed.