Enterprise Bill

Public Bill Committee, 18 April 2002.

Standing Committee B

Enterprise Bill

Nigel Beard (Labour, Bexleyheath and Crayford)

Before we begin, I should point out that amendment No. 135 was wrongly printed at the beginning of the selection list. We have passed that point in our consideration of the Bill.Clause 11 Super-complaints to the OFT

Clause 11 - Super-complaints to the OFT

Nigel Waterson (Conservative, Eastbourne)

I beg to move amendment No. 19, in page 5, line 6, leave out '90' and insert '60'.

Nigel Beard (Labour, Bexleyheath and Crayford)

With this it will be convenient to take amendment No. 25, in page 5, line 13, leave out subsection (4).

Nigel Waterson (Conservative, Eastbourne)

Clause 11 is crucial, as it deals with super complaints. The amendments have slightly different functions: one would reduce the period for responding to a complaint from 90 days to 60 days; the other would remove subsection (4), which allows the Secretary of State to substitute any period for the period set out in the Bill.

We discussed the need to ensure that super complaints, stop now orders and Office of Fair Trading investigations do not impose unnecessary burdens and costs on business, even if they are unobjectionable or a good thing. During our lively debate, it was clear that a deep, philosophical difference split the Committee, and the Liberal Democrat party, down the middle. [Interruption.] The hon. Member for Orkney and Shetland (Mr. Carmichael) did not attend that sitting, so it would be fascinating to know whether he can break the tie among his colleagues, who seem to have different views. Naturally, it is a pleasure to have him with us.

Those with old and new Labour tendencies are happy to heap ever more burdens on business—probably because they believe that business deserves it—and have no concern for the results. The first instinct of others—the official Opposition—is to check whether the cost-benefit ratio is out of kilter, resulting in the burdens on business being excessive. I leave aside another great theme that runs through this Bill and much of the Government's legislation; the law of unintended consequences.

In a sense, that is rendered irrelevant by yesterday's events. As Mr. Digby Jones of the CBI said in response to the Budget:

''there will be deep dismay at the net increase of some £2.5 billion in the cost of doing business in Britain''.

All our deliberations on the so-called Enterprise Bill must be seen against that background.

The Bill rightly sets out a period within which a

response to a super complaint must be received. The OFT must indicate what, if any, action it intends to take in response to that complaint. We deal with all these issues on the hopeful assumption that the resources, including staff, will be available to ensure that the OFT can deal with them. I suspect that there will be a rush of super complaints from the designated bodies. I will discuss who may be a designated body in a moment. The consumer organisations, the most likely candidates, are keen, to put it mildly, on the new provision. The OFT will therefore suddenly find its in-tray filling up. Let us hope that it is in a position to respond rapidly to the complaints.

Having said that, we believe that once things have settled down, the OFT should be able to respond more quickly. If a case is serious enough to form the basis of a super complaint, it must mean one or both of two things: first, it is serious matter affecting many consumers up and down the land, and secondly, because it will have taken a while to come to the attention of trading standards officers, Members of Parliament, consumers associations or whomsoever, the problem will have been in train for some time and will need addressing.

We have plumped for a period of 60 days, so that the response is fairly rapid. It does not have to be the final word on the matter, but it should be possible within that period for the OFT to take at least a prima facie view—I assume that is what is envisaged—on whether the matter should be pursued. The complainant organisation and the consumers that it represents can then be assured that the issue will be taken further.

We agree with having a limit on the period of response for another reason. Companies should not have to contend with a sword of Damocles hanging over them; an open-ended risk of being in jeopardy of investigation. Companies should be told quickly either that the matter will or will not be pursued, and 60 days is not an unreasonable period. I look forward to hearing the Under-Secretary's response. If she were to argue for an even shorter period, we might be prepared to accept it.

Amendment No. 25 deals with the Secretary of State's powers to change this period. Clause 11(4) refers to

''substituting any period for the period for the time being specified''—

90 days—but should mean substituting only a shorter period. The clause does not say that. Despite the scramble to table amendments on other subjects as a result of the Government's own actions, we should have tabled an amendment to that effect.

I hope to receive the Under-Secretary's assurance that the Government envisage reducing the period only when the OFT has bedded down with its new functions, the staff is in place and everything is running efficiently. It would be disappointing to consumer bodies—particularly the designated ones—as well as to us, if the OFT used the excuse of pressure of work or inadequate resources to extend the period. By definition, if dealing with super complaints is to

have the dramatic effect that the Government promise, the process must surely move swiftly. The OFT may have the best intentions in the world, but we should be cautious about this provision.

Jonathan Djanogly (Conservative, Huntingdon)

In that context, it is interesting to note that with respect to the preliminary investigation—before the statute comes into force—of dentistry, the OFT answered the complaint exactly within the 90-day period. Will the Under-Secretary confirm that that is how it will be done in future? If so, 90 days, as opposed to a shorter period, becomes a highly pertinent issue.

Nigel Waterson (Conservative, Eastbourne)

My hon. Friend has examined the dentistry complaint in greater detail than most of us, for which we are all deeply grateful to him. If the dentistry complaint is punted as the sort of matter that will be handled under clause 11, it is a tad disappointing, as my hon. Friend suggested, that it took right up to the wire—the full 90 days—for the OFT to respond. Clearly, it was driven not to take beyond 90 days, which would have been poor salesmanship in the context of this Bill. However, it is unfortunate that the OFT took that long when it does not yet have the panoply of powers and functions that we are proposing to heap on it and when, by definition, it is considering only one or two prototype investigations. There is a concern. I do not want to overstate it, but I will be interested to hear what other Members and the Under-Secretary have to say.

Tony McWalter (Labour/Co-operative, Hemel Hempstead)

I have not yet had a chance to say this, but I am pleased to serve under your chairmanship, Mr. Beard.

Clause 11 is obviously important, but a series of amendments have been tabled, including amendment No. 19, which would have the effect of, to use a dentistry analogy, drawing the teeth of the provision. I hope that my hon. Friend the Under-Secretary will resist many of the amendments, even though they are backed by, for example, the Finance and Leasing Association, an estimable body. However, it would not be in the interests of the consumer for such tooth-drawing to be allowed.

The general character of much of the Opposition's response to the Bill has been to consider the effects of an investigation on legitimate businesses. That is extraordinarily back-to-front thinking, because the provisions are designed to deal with businesses that are operating illegitimately or which prompt a prima facie case for thinking that. If no business ever worked illegitimately, there would be no need for the Bill. It is because uncompetitive or, as I have said before, nefarious practices occur that we need the Bill, and I find it absurd that the Opposition consistently harp on about the Bill's burden on business. If the bodies that are involved with the Competition Commission and the OFT carry out their duties reasonably respectably, the Bill's provisions will bear harshly on illegitimate businesses and lightly on those that are carrying out their competitive functions honestly and genuinely.

Nigel Waterson (Conservative, Eastbourne)

The hon. Gentleman must accept that his point could apply to almost any piece of

legislation. If we were considering a Bill that dealt with burglary, it would be only reasonable to examine the rights and protection of innocent people as much as ensuring that burglars were convicted. Other parts of the Bill include criminal sanctions, and his point could apply to any legislation that carries sanctions.

Tony McWalter (Labour/Co-operative, Hemel Hempstead)

I agree, but all of the Opposition contributions have, to use the hon. Gentleman's example, factored burglars out of the picture almost entirely. He even said that his first response was to examine the effect on business without differentiating between legitimate businesses, which the Bill is designed to protect, and illegitimate businesses, which the Bill is designed to nail. He also spoke about the idea that an extensive series of victims of practice would be needed before a super complaint was put forward. That should not be the case.

Two months ago, an investigation by The Guardian found that a mobile phone company had decided that anyone who cancelled a contract would be slammed with a bill that was almost unintelligible, which would be followed a few days later by a threat to take the person to county court. Furthermore, the company decided to contact all the credit agencies to try to scupper the credit ratings of those who had had the misfortune to have a contract with it. As a Member of Parliament, I have received several complaints from constituents who have been victims of that company.

The Bill is designed to address that sort of practice. This country is fortunate in that we have tremendously strong and honourable consumer protection bodies. I am not sure whether I should declare an interest, in that I subscribe to Which? magazine and the Consumers Association. I suspect not, but the quality of their investigations and work is such that we should be grateful to have the opportunity to avail ourselves of their expertise, and that of similar bodies, in considering the Bill.

Amendment No. 19 would reduce the time within which a response must be published from 90 to 60 days, but when there is a novel practice such as I have described, it takes a significant time to work out the company's modus operandi. I did not have the full resources of the OFT, but I spent a considerable time trying to find out how extensive the practice was—and whether it was a one-off or there was some peculiarity in a particular office of the company—before I decided to raise the matter in Parliament. I did so because the practice seemed to be widespread and not related to a particular functionary of the company.

Nigel Waterson (Conservative, Eastbourne)

As always, I am following the hon. Gentleman's reasoning closely, but I cannot understand why it would not be a good thing for the consumers as well as perhaps the businesses involved in that scam, which sounds quite serious, to have a more rapid response. Is the hon. Gentleman not looking a gift horse in the mouth?

Tony McWalter (Labour/Co-operative, Hemel Hempstead)

As hon. Members will know, the problem is that when MPs raise these issues with companies, some do not reply at all and some say that a particular employee has been exceeding their duties. Indeed, that was the standard response of the

company concerned. It was only the full investigation by The Guardian, which must have taken longer than 60 days, that made me and my constituents realise that there had been a systematic use of powers against the interests of those who were seeking to disentangle themselves from the contracts into which the mobile phone company had ensnared them.

We are talking about businesses that act in such a way. Indeed, the hon. Member for Eastbourne (Mr. Waterson) used the word ''scam''. When I hear about that sort of practice, my first instinct is not to rush for protection, but to try to find out if there have been dubious practices and then to see what the law says can be done about them. As it stands, however, the law is inconsequent in respect of many such practices. Indeed, the hon. Gentleman has tabled an amendment that lists such offences. I welcome that list, as I hope my hon. Friend the Under-Secretary will when we reach that debate.

It is important to act where there are recognised holes in the law and a company is trying not only to profit from them itself, but, as a result, to drive into the ground those other companies that are not willing to use heavy-handed business practices. That needs to be said consistently, because it has not yet been said by the Opposition. It is vital to protect those other companies.

I hope that my hon. Friend the Under-Secretary will address the tenor of the Opposition contributions, which are rather unhelpful, and ensure that super complaints still have teeth after she has tackled the matters to be raised in the debate.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

I echo much of what the hon. Member for Hemel Hempstead (Mr. McWalter) said. I go along with the hon. Member for Eastbourne inasmuch as he seemed to be saying that the amendments seek to strike a balance. I want to ensure that in striking such a balance, super complaints and their operation will be effective. Amendment No. 19 would emasculate the effective operation of the super complaints procedure.

Like all hon. Members I bring some baggage to the proceedings: I worked as a prosecutor in Scotland as part of the procurator fiscal service. In Scotland, when a person is remanded in custody prior to trial, proceedings must be commenced within 110 days, which means that an indictment must be served within 80 days. My remarks are in that context, in that I know from personal experience that even the preparation of a not especially complex fraud case within 80 days is exceptionally taxing and sometimes well nigh impossible. Super complaints are more complex than the average fraud. The OFT will do well to achieve a measured and considered response within 90 days, so I am not minded to support the first of the two amendments in the group.

Amendment No. 25 is a different matter. The hon. Member for Eastbourne said that he hoped that the clause would operate only in reducing the period. However, in the Bill as drafted, that is not the case. I am slightly concerned that under the clause as drafted the super complaints procedure may take off in a way that we do not envisage now. It is not unknown for

there to be questions about the resourcing of Government bodies such as the OFT and I am concerned that the operation of the clause would increase the period simply to alleviate the burden on the OFT. That would be regrettable for the reasons that the hon. Member for Eastbourne outlined; having to fund the OFT so that it could operate efficiently within 90 days would be a good compulsitor on the Government. Therefore, I could not easily allow them the flexibility proposed by subsection (4).

Jonathan Djanogly (Conservative, Huntingdon)

We have discussed the need to minimise uncertainty for businesses generally. The hon. Member for Hemel Hempstead gave an instance of what could be called a shifty practice, which needs to be looked into. However, there are issues relating to the clause that cause concern. For example, there is no restriction on the number of times that a consumer body can make a complaint, and the OFT has no discretion as to whether or not it makes a preliminary investigation under the 90-day period. It is mandated to do so under the Bill. It must investigate, so companies will necessarily be put at risk of expenses and costs. Those issues are pertinent.

We are talking about a pre-investigation investigation. The hon. Member for Orkney and Shetland touched on that but his comments raised further questions about the criteria that will be used in the context of the pre-investigation. The explanatory notes do not touch on that point. I have not seen it discussed in briefing notes or anywhere else. It would be helpful if the Under-Secretary could tell us what sorts of issues will be considered at the pre-investigation investigation stage. Would the OFT approach the company or other market competitors at this stage?

Nigel Waterson (Conservative, Eastbourne)

My hon. Friend is developing an interesting argument. Will the OFT be expected to decide that it has an arguable case, a prima facie case, or possibly a lesser case in which there is something further that it wants to investigate? Taking the points made from experience by the hon. Member for Orkney and Shetland, there will otherwise be a temptation to give an answer on the 90th day, which might simply refer people to another answer further down the road such as, ''We are looking at it, we are taking it seriously and we will continue to investigate.''

Jonathan Djanogly (Conservative, Huntingdon)

That is a very important point. The criteria will be important. We should bear in mind that after the failure of the amendments at our last sitting, we will be dealing with issues that are not held within the current law. This will not simply be a question of competition; it could relate to further issues. The criteria become even more important and will not necessarily be based on existing procedures. I should be grateful for the Under-Secretary's comments on that.

Companies rightly fear that one type of investigation will lead to another. We should consider how the criteria would change if the OFT proceeded to a full investigation. Would there be a change in emphasis or in the way in which it went about things? We should look at the 90-day or 60-day period in the context of the investigation that it leads to.

Mr. McWalter: Does the hon. Gentleman accept that as we are dealing with a super complaint, in a sense it would not bear necessarily on any particular company? The question would be whether a whole sector of companies—for argument's sake, let us say mobile phone companies—had a set of practices that conduced to that sector licensing uncompetitive practice on the part of companies within it. It would not necessarily strike an individual company immediately.

Jonathan Djanogly (Conservative, Huntingdon)

That may well be so, but the example that the hon. Gentleman gave related to one company; what he says would not necessarily be the case. We should look at how those concerns affect companies. Putting it in the context of the fuller investigation, will anything in the Bill restrict the period in which the OFT can mount its full investigation? I have not seen anything but there may be something. Could the Under-Secretary tell us whether the full investigation is in any way restricted? It is all very well arguing whether 60 days or 90 days is more appropriate but if an investigation ends up lasting one year, such as the proposed dentistry case, the argument becomes irrelevant. Such a case could be delayed; what if it extends to two or three years?

It all comes down to the fact that Governments have deep pockets and can afford to keep investigations going for pretty much as long as they want. Companies may not be able to afford endless investigations; or, if they could, they would probably experience a significant dent in their costs. I would appreciate the Under-Secretary's comments on those issues.

Mark Field (Conservative, Cities of London and Westminster)

I share the serious concerns that have been expressed. I shall address the amendment, although we also wish to discuss other amendments to clause 11. A stand part debate will be at your discretion, Mr. Beard.

There is increasing concern about the negative publicity created by a super complaint into an industry. It may apply to a raft of companies or to one or two in industries that are perceived as monopolistic. The 90-day moratorium may, as my hon. Friend the Member for Huntingdon (Mr. Djanogly) said, lead to a much longer-lasting inquiry; it may also create increasing uncertainty and allow interested consumer groups and Ministers to play to the gallery in a way similar to the ''rip-off Britain'' campaign on supermarkets in the late 1990s.

Could the Under-Secretary give guidance on what action will be taken within the 90 or 60-day time limit? There is the opportunity to begin a fishing expedition. I would like guidance on how limited the action of the OFT will be in the 90 or 60-day period.

Huw Irranca-Davies (Labour, Ogmore)

Subsection (4) gives discretion to amend the 90-day period. However, I am sure that the hon. Gentleman would welcome a thorough, detailed investigation of a super complaint rather than a cursory, rushed one. The period of 90 days is wholly appropriate now, to ensure depth and meaning of investigation, but if that changes, it would

be appropriate to change the period. The Local Government Association, for example, has made representations on the issue; it considers 60 days to be appropriate. The hon. Gentleman said in an earlier sitting that one consumer group believed that the approach in the proposed dentistry case to super complaints was indicative of the general approach that would be taken, but that is not necessarily true—

Nigel Beard (Labour, Bexleyheath and Crayford)

Would the hon. Gentleman limit his intervention? It is becoming a speech.

Huw Irranca-Davies (Labour, Ogmore)

I apologise, Mr. Beard. The Consumer Association said that super complaints

''will concern situations where markets rather than the activities of particular companies fail to work for consumers''.

Subsection (7) gives protection in such situations.

Mark Field (Conservative, Cities of London and Westminster)

I hope that future super interventions will be limited to 90 minutes. In fairness to the hon. Member for Ogmore (Mr. Irranca-Davies), I acknowledge his concern. I am trying to discover what type of information will be brought into play during the first period. There is concern that some industries may find themselves under great media fire for high pricing or the way in which they market their products, and the longer the preliminary period, the more we will allow damaging allegations to be made in the public domain.

It is important to ensure that the OFT can investigate only a limited list of infractions within that period. There should be no risk of it examining a considerable amount of documentary evidence and, in effect, taking part in a fishing expedition that will allow it to clamp down even harder. I hope that the Minister will give us some guidance about the operation of the OFT.

Melanie Johnson (Labour, Welwyn Hatfield)

I am grateful to hon. Members for their thoughtful consideration of the clause and amendments, and for raising such useful issues.

I am glad that there is general support for a deadline. I emphasise that it is a deadline by which the OFT should investigate initial super complaints, not a target. The amendment would shorten that period to 60 days. It is also important to stress that the OFT will be required to give a full and reasoned response to super complaints. As Government Members and the hon. Member for Orkney and Shetland said, it is likely that the quality of that response would be undermined if the OFT did not have enough time to analyse the evidence submitted by the super complainant. I am grateful for the hon. Gentleman's comparison with the timetables for prosecutions in Scotland, which was based on his experience.

The complexity of the issues may slow the process down, but it is important that sufficient time is taken to give a substantive answer. As the hon. Member for Huntingdon said—he is not here at the moment—super complaints are a route into the system for the consumer. They are not part of the system that will still operate. If the OFT accepts a super complaint, it will go through the usual processes. I will discuss later the basis on which the OFT will accept a complaint.

The deadline of 90 days is the right one to give the OFT in such cases. It would not be wise to make cases subject to a tighter time limit at this stage. There are good reasons for that, as my hon. Friend the Member for Ogmore said. However, if it proves to be the case in the light of subsequent experience that super complaints can be investigated properly in a shorter time scale, subsection (4) allows the Secretary of State to vary the statutory deadline, as hon. Members pointed out.

Nigel Waterson (Conservative, Eastbourne)

Surely the Under-Secretary is not saying that under subsection (4) the Secretary of State's powers can be used to change the time in individual cases. I understand the subsection to mean that the Secretary of State's powers can be used to change only the general time limit.

Melanie Johnson (Labour, Welwyn Hatfield)

Absolutely. I am sorry if I gave rise to any confusion in the hon. Gentleman's mind. I was not implying that the powers related to any specific inquiry, but that they would be based on the experience of how things might work across the board.

There will be a process for designating bodies, the criteria for which will be developed, discussed and consulted on. Designated bodies will be expected to submit a reasoned case in support of their complaint in accordance with the OFT's guidance, which I will come on to later. The consumer body would have to submit considerable resources to produce such a case, so they are unlikely to make frivolous complaints. I urge all Committee members not to assume bad faith on the part of too many people who go through these processes. We expect people to do their best and to want to be seen to be doing their best. In return, they expect their complaints to be treated with the utmost seriousness.

In some cases, rushing to complete a response within 60 days would be detrimental to all parties concerned. A shorter time scale will mean that more cases are likely to require further investigation to ensure that the OFT can make a fully informed decision about what action, if any, may be necessary in response. If the intention of the amendment is to make life easier for firms whose activities might be the subject of a super complaint, which several hon. Members have suggested, it is unlikely to succeed. If there is a case to answer, businesses will need time to respond just as the OFT will need time to complete its analysis. This is a fair time limit for both parties. It is not overgenerous, but I do not believe that we should shorten it now.

Amendment No. 25 seeks to prevent the Secretary of State from altering the time period within which the OFT must respond. As I have said, we intend to enable the Secretary of State to change that time period if experience shows that 90 days is either too lax or too limiting. It could go either way. I hope that we will not find that it is insufficient. But if it were insufficient and perhaps business argued that it was, we might want to alter it. There is always an assumption that it is in someone else's interests. I remind the hon. Member for Eastbourne of his remarks on Tuesday when he said that fair trading was good business, which I believe was a quotation from some of his earlier handiwork on

the subject. Fair trading is good for business and it is good for consumers. The two go hand in hand.

It is important to retain flexibility within the super complaint procedure. After the OFT has looked at several complaints we will be able to see how the procedure is working. We want to keep the whole procedure as flexible as possible so that it can be adapted in light of experience to ensure that super complaints are dealt with in the most effective way. I am sure that we will come on to resourcing more specifically, and it has been mentioned on a number of occasions, but I can assure the Committee that the resourcing will be there to enable the OFT to do a good job. I therefore do not support the amendments.

Turning to the nature of the process, as I have said, there will have to be a reasoned case for the complaint. The OFT will not take further action as a consequence of super complaints that are not well reasoned. The OFT must issue guidance about how those bodies present a reasoned case for complaint.

Jonathan Djanogly (Conservative, Huntingdon)

I am pleased to hear that, but the Bill does not seem to give the OFT any choice. It states:

''The OFT must, within 90 days after the day on which it receives the complaint''.

Will the Government propose an amendment to that?

Melanie Johnson (Labour, Welwyn Hatfield)

I regret that I do not entirely follow the hon. Gentleman's question.

Jonathan Djanogly (Conservative, Huntingdon)

I shall explain. The Minister said that the OFT would not have to consider frivolous complaints made to it.

Melanie Johnson (Labour, Welwyn Hatfield)

Further consider.

Jonathan Djanogly (Conservative, Huntingdon)

So it will have to consider everything.

Melanie Johnson (Labour, Welwyn Hatfield)

I assume, for the sake of argument, that if an utterly frivolous super complaint were submitted, the OFT could rapidly decide that it did not meet the criteria and dismiss it well within the 90-day time limit. Obviously we do not anticipate that such an event will occur because the reputation of organisations designated to bring forward super complaints will itself be on the line in the way in which they deal with those matters. That will be under the public gaze.

Nigel Waterson (Conservative, Eastbourne)

The Under-Secretary made the point that the OFT will produce guidance on how the system will work. I do not know whether there is any draft guidance floating around that we could get our teeth into. Can she deal with the issue that I raised in an intervention? What hurdle do these complaints have to get over to be pursued? Is it just a good, arguable case? Is it a prima facie case? It is lower or higher than either of those? Those are established tests within the existing legal framework, so surely the OFT must give some guidance to complainants about what level of proof they must produce.

Melanie Johnson (Labour, Welwyn Hatfield)

The requirement is that the OFT will issue guidance about how bodies must present a reasoned case for the complaint. The hon. Gentleman referred to criteria used for legal cases, but this is not a legal case as such. The OFT will publish guidance on what it expects a super complaint

to include; for example, how the presentation of a reasoned case should be made.

Jonathan Djanogly (Conservative, Huntingdon)

On that specific point, will the OFT be able to have a relationship with the relevant consumer body, outside the course of the investigation? A complaint is likely to arise following a campaign, for example by Which? magazine. It is highly unlikely that a consumer body will wake up one day and decide that it will make a complaint about dentists. It is more likely that, after complaints have been made, a newspaper will run a campaign to tell people to which dentist they should go. Will the consumer body be able to approach the OFT before the complaint is made to discuss whether a complaint would be acceptable, or will the relationship be at arm's length, with the body unable to talk to the OFT until the complaint is made?

Melanie Johnson (Labour, Welwyn Hatfield)

We do not want to set out the criteria for informal discussions, but need to keep them flexible. Obviously the OFT is used to having discussions with consumer bodies because it operates in a related field, so we do not envisage either fixed contact or no contact at all. At the end of the day, the OFT will consider whether there are reasoned cases, and any unsubstantiated or ill-thought-out complaints will not be followed up after initial consideration.

Mark Field (Conservative, Cities of London and Westminster)

On a further point, will there be, in a sense, a period of purdah, in that after the trigger mechanism and the 60 or 90-day investigation has begun, super complainants will not have the opportunity to make further representations during that period that might influence the OFT in determining whether there should be a fully fledged investigation? A highly organised consumer campaign could put great political pressure on the OFT during its investigative period, and surely it would be wrong for any party to make further representations after the initial investigation has begun.

Melanie Johnson (Labour, Welwyn Hatfield)

We do not envisage ongoing involvement. There will be discussion beforehand about what a reasoned case looks like, and published criteria will be discussed beforehand and put out for consultation. Once the complaint is made, there will not be further discussion. The OFT will look at those matters. There is nothing to stop anyone mounting campaigns. Indeed, all Committee members are experts at mounting campaigns and understand those pressures.

One aspect of the changes, which the hon. Member for Cities of London and Westminster (Mr. Field) should bear in mind, is that the removal of politicians from aspects of the process will ensure that the OFT will be as watertight as possible in examining cases and forming judgments, despite any surrounding political campaigning. The grounds for examining a case are whether there is a market problem.

Mark Field (Conservative, Cities of London and Westminster)

The Under-Secretary seems to have a low regard for us politicians and our open-mindedness on such matters, but I would like to explore this further. She will understand the concern that if it were made

public that the OFT was investigating a particular industry, as it inevitably will, a large-scale newspaper campaign could follow which might greatly tempt the super complainant body into ensuring that it was seen in the public arena to have teeth. That body might then put forward a petition or make further representations during the 90-day period in a way that was potentially highly prejudicial to the industry being investigated. I wanted the Under-Secretary's assurance that the OFT would not be subject to media pressure and to a second bite of the cherry by the complainant who made the initial application that was subject to the 90-day investigation.

Melanie Johnson (Labour, Welwyn Hatfield)

The reasoned case would be submitted. It is not possible to stop items dropping through the OFT's letterbox but things will not be done on the basis of the super complainant being invited to make further representations. It will be for the OFT to consider the case that has been presented—initially, it must meet the criteria about what the case should look like and how it should be presented—and then to form a view about whether it should go into the normal complaints process which, as the hon. Member for Huntingdon said, is a pre-investigation investigation. If it were accepted that the case was valid, it would be put into the investigation process and go through the normal channels.

Tony McWalter (Labour/Co-operative, Hemel Hempstead)

I invite my hon. Friend not to pursue too closely the precise mechanisms by which super complaints are generated, as there are so many. Many of the Opposition's contributions assume that the investigations will be directed only at legitimate businesses, causing them harassment, and they appear not to trust consumer associations and others.

Melanie Johnson (Labour, Welwyn Hatfield)

I am grateful for my hon. Friend's encouragement not to go into too much detail, although I understand to some extent why Opposition Members are so concerned about it. However, there will be a public process in which the super complainants will be subject to public scrutiny of how they conduct their role, and guidance will be published about how they will do so. Those bodies will need to have, and to maintain, their credibility by exercising good judgment in how they operate in a public arena. The press and other organisations will have views about these matters and, as my hon. Friend the Member for Hemel Hempstead said in respect of the telephone scams, hon. Members, too, might express their views.

We are in a public environment and public debate is at the core of the matter; the OFT will need to publish its views and plans for any action that it proposes to take. We want to ensure that both sides benefit from the demand for high-quality input and responses that are well judged, well reasoned and in line with publicly published guidance.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

I am greatly reassured by what the Minister said. I add my weight to the call to resist the siren voices in the Committee. I am struck by Conservative Members' antagonism to consumer groups, which is entirely unhelpful. To listen to the hon. Members for Cities of London and Westminster and for Huntingdon, one would think that businesses were never involved in lobbying or publicity. If there is

a damaging press campaign, there are already delictual or tortious remedies to companies that are well able to afford them.

Melanie Johnson (Labour, Welwyn Hatfield)

I am grateful for the hon. Gentleman's support. I shall ask the Committee to reject the amendments. Unfortunately, the hon. Gentleman could not attend the Committee's previous sitting. If he had been present, he would know that Conservative members of the Committee were split on these issues; there was strong advocacy for the consumer voice on the Bill and what the consumer organisations wanted from it. The National Consumer Council strongly supports the super-complaints process, and the hon. Member for Eastbourne earlier extolled the virtues of listening to the consumer's voice on the Bill.

I have dealt with most points raised by hon. Members in their contributions to our interesting debate and I urge the Committee to resist the amendments.

Nigel Waterson (Conservative, Eastbourne)

At least one of my earlier questions has been answered. Clearly the anti-business wing of the Liberal Democrat party is with us this morning; no doubt the pro-business wing will make an appearance later in our deliberations. With all due respect, the hon. Member for Hemel Hempstead was a bit grumpy this morning about an amendment that would shorten the period within which a super complaint would be responded to, but there we are.

Tony McWalter (Labour/Co-operative, Hemel Hempstead)

The hon. Gentleman should know that I am never grumpy.

Nigel Waterson (Conservative, Eastbourne)

Perhaps I should have said dozy. I withdraw the remark unreservedly, though Committee proceedings are subject to qualified privilege when it comes to the law of defamation. There was a little of the same from the Under-Secretary, and rather more of it from the hon. Member for Orkney and Shetland, who complained that it was monstrous that the Opposition were worrying about the effect on business. Yes, we do worry. Business needs its interests looked after—Miss Johnson: Will the hon. Gentleman give way?

Nigel Waterson (Conservative, Eastbourne)

Let me finish the sentence, or, at least, the clause of the sentence. Given the slap in the face that the Government gave business and industry yesterday, plus all the other accumulated slaps in the face, it is important that somebody here sticks up for business.

Melanie Johnson (Labour, Welwyn Hatfield)

The hon. Gentleman is being deliberately contentious. Other hon. Members may wish to defend their views on business, but I have certainly not said anything in relation to the hon. Gentleman's belief about our attitude to business that he could attribute to me. Earlier I quoted the hon. Gentleman's words back to him; that fair trading is good business. We strongly believe in supporting good business and all members of the Committee want to give their fullest support to good business. Indeed, good business is often disadvantaged when cheats, scams and frauds in the system prevent the operation of a level playing field. We must ensure that good business does not face such competitive disadvantages.

Mr. Waterson: I promised myself that I would try to avoid using the phrase ''level playing field'' during these debates, but—

Melanie Johnson (Labour, Welwyn Hatfield)

Ditto.

Nigel Waterson (Conservative, Eastbourne)

The Under-Secretary has beaten me to it.

If there was an attempt to misrepresent our views on these matters, it was wrong. It is a question of balance and, for the record—so no one can be in any doubt—we are pro-consumer and pro-business. The Under-Secretary kindly cited a phrase that I had quoted from the then Sir Geoffrey Howe on this very subject.

The Under-Secretary's remarks were helpful, but she has not provided an assurance that the period in question will not be extended. We would greatly welcome a power to reduce the period, but we have had no confirmation from the Under-Secretary—sadly, we have had quite the opposite—that an increase will not take place. We do not oppose the power in itself—we are in favour of it—but we want it to work properly and to ensure that the period for responding does not creep up over the years in response to pressure of work.

An element of confusion remains about the test to be applied. I appreciate that we are not talking about a court of law, but people need to know what level of evidence will be necessary to secure a full inquiry. I hope that the guidance will sort that out in due course. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Nigel Waterson (Conservative, Eastbourne)

I beg to move amendment No. 20, in page 5, line 12, at end insert—

'(3A) In the event that the OFT decides to take no action, and an undertaking has incurred costs as a result of the complaint, the consumer body which made the complaint shall bear the reasonable costs of that undertaking'.

With the help of the hon. Member for Hemel Hempstead and others, I shall try to be brief. Strong views exist on the issue and it is important to reflect both sides of the argument. The CBI believes that under the current system investigations by competition authorities often involve huge costs and other burdens on business. We developed that argument in a different context on Tuesday, so I need not labour the point.

Business is concerned, not unreasonably, that it may become enmeshed in a large Office of Fair Trading investigation into a company or a sector. The hon. Gentleman was probably right in hinting that it is more likely to be into a sector, but it is perfectly possible that an individual company will be responsible for a widespread abuse.

These matters can be long, drawn-out and expensive. Just because the OFT has to respond to the original super complaint within 90 or 60 days does not mean that it will not take a long time to reach a resolution, certainly if the activities of the Serious Fraud Office and others when dealing with competition are anything to go by.

The CBI believes that, where there is a lengthy and expensive investigation but a company is exonerated, there should be compensation. I know that it is stretching the hon. Gentleman's imagination a little to suggest that there are innocent companies out there and that companies will be exonerated on occasion.

Tony McWalter (Labour/Co-operative, Hemel Hempstead)

No.

Nigel Waterson (Conservative, Eastbourne)

The hon. Gentleman is becoming grumpy again, although not without provocation.

Melanie Johnson (Labour, Welwyn Hatfield)

My hon. Friend has considerable imagination.

Nigel Waterson (Conservative, Eastbourne)

I hope that the Under-Secretary is not going to start now. It is Thursday and we are all meant to be running down gently towards the weekend. Indeed, the way the Government run their business these days, it is hardly worth the train fare from Eastbourne to come to this place.

We think, as does the CBI, that business should be entitled to some form of compensation. That would also deter frivolous or vexatious complaints. I hope, indeed I have some confidence, that the OFT will be pretty brisk in dealing with the obviously frivolous complaint. One can imagine that some attention-seeking Back Benchers—I will not name names—might run a wholly spurious and unjustified campaign against a particular company. The peg in their press release would be that they were writing an official super complaint to the OFT, when in fact it had no basis.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

If the hon. Gentleman's intention were to eliminate vexatious and frivolous complaints, he would certainly have my support. However, the amendment would do much more than that; it relates to any complaint from which no proceeding results. There could be good grounds for the reference being made in the first place. As the Under-Secretary said, the complaint must be well reasoned, but even if it is found after the preliminary investigation not to merit further investigation, is it not right for these concerns to be aired in the first place?

Nigel Waterson (Conservative, Eastbourne)

I do not think that anyone is saying that concerns should not be aired. The nature of the system is such that there will probably be three categories of complaint. The wholly frivolous and vexatious complaint can be dismissed out of hand and at minimum cost. The very serious complaint, which the legislation is designed to address, will rightly be pursued. Under our amendments, there is no question of compensation in those cases. However, there will be cases in the middle in which there may be grounds for it. This is a matter for much more detailed guidance.

I used the word ''reasonable'' in the amendment. In civil litigation, even if one wins a case hands down—I do not know what the system is in Scotland—one almost never recovers all one's costs. In a sense, that deters both sides from litigation, which must be a good thing. In America, there is usually the opposite situation, in which no recovery of costs is usually permissible. That can encourage people with deep pockets to oppress people with fewer resources.

Mr. Djanogly: The reference that my hon. Friend makes to civil proceedings is relevant. The hon. Member for Orkney and Shetland said that if one had a good case but lost, one should be awarded costs. However, if one goes down the court route and loses, it will not matter if one has a good case—costs will be awarded against the loser. If the case is dropped, for whatever reason, it will not be the company's fault that it was brought in the first place and the company should get costs.

Nigel Waterson (Conservative, Eastbourne)

As the phrase goes in litigation, costs follow the event. If one wins, one gets most of the costs; if one loses, one pays not only one's own but the other side's costs.

Andy Burnham (Labour/Co-operative, Leigh)

Following the logic of the hon. Gentleman's argument, if a complaint against a company were upheld, would he support the company refunding the costs of the consumer body that brought the complaint?

Nigel Waterson (Conservative, Eastbourne)

I do not have a philosophical problem with that. I do not expect the Under-Secretary to accept the amendment with open arms but I hope that, as part of the guidance, members and potential members of the OFT—such as Mr. Ecclestone—are listening carefully to our debate and considering such issues. If I had to produce the draft guidance, starting with a blank sheet of paper, I would allow a broad area of discretion to award costs or a contribution to costs. Cases that are not frivolous or vexatious but that ultimately prove to have little merit may be investigated at inordinate length. There should be some compensation in such cases.

We will deal with consumer complainant bodies fairly soon—not soon enough for some hon. Members, no doubt. Fortunately, many such organisations are well resourced, with substantial membership and access to other funds. They conduct their business in a professional—to use the word in a complimentary sense—and organised way and they expect to be and are taken seriously by business and industry. It is only right that they bear any contribution to costs that is justified.

Ken Purchase (Labour/Co-operative, Wolverhampton North East)

The hon. Gentleman has expressed admiration for consumer groups that are professional, well-organised and understand the law, but there is a contradiction in extolling the professionalism and good organisation of a consumer group on the one hand and associating it with a frivolous or unnecessary claim against a company on the other. That contradiction gives the hon. Gentleman's game away.

Nigel Waterson (Conservative, Eastbourne)

Uncharacteristically, the hon. Gentleman has not followed my argument. I said that if a claim is clearly frivolous and vexatious, I would expect the OFT to dismiss it out of hand, well within the 90-day period. However, I hope that there will be fewer such claims because of the potential sanction of costs. The amendment would bite in regard to the complaint that was not frivolous or vexatious—although it was rather thin and ultimately did not get anywhere—but was the subject of an investigation. Like the CBI, I believe that there should be a possibility of compensation.

I do not say that my amendment is the be-all and end-all. Indeed, I recognise that consumer organisations do not support it. The National Consumer Council has been extremely helpful—just the sort of professional organisation to which I was referring

—in the run-up to the debate. It is a keen supporter of the super complaint and wants to be a super complainant. It accepts that there are concerns about what lawyers call fishing expeditions—which are not unknown to the legal world—by which legal or investigatory proceedings are started and used as a way of finding the evidence to justify the complaint. It states:

''We also oppose amendment 20 to this Clause which would hinder the ability of consumer bodies to take such action, particularly as they would now know what the 'reasonable costs' might be before taking such an action.''

That is a fair point and it is important to register that concern. Equally, however, the CBI is entitled to register its concern through us and to set out one mechanism for dealing with it. I therefore commend the amendment to the Committee.

Tony McWalter (Labour/Co-operative, Hemel Hempstead)

I shall speak briefly to the amendment. The David of the Consumer Association is taking on the Goliath of business. The amendment effectively says that David has a bigger stone than he used to have, but it should be taken away entirely. It threatens consumer organisations with bankruptcy. The Under-Secretary has already explained the significant constraints on taking decisions to launch super complaints and they are more than enough.

A complaint could be made on reasonable evidence and an investigation of a group of companies, perhaps all employing expensive lawyers, might follow. At the end of the process, a massive bill would have to be faced, perhaps as a result of OFT incompetence. In other words, the complaint might be perfectly reasonable, but not followed through effectively, leaving the consumer organisation saddled with the bill.

My concern is precisely the opposite of the one expressed in the amendment. I should like David to have not just one, but several, stones. What resources will be made available to consumer organisations to help them in their investigation of dubious practices? My amendment would be completely the other way round: David would have two or three stones and Goliath would be rather less well armed.

Mark Field (Conservative, Cities of London and Westminster)

On a couple of relatively minor points, first, we must appreciate that the biggest losses are often economic and whether reasonable costs can be quantified is an important issue. I refer to the loss of management time, which is difficult to apply directly to the work undertaken. The opportunity cost in executive time—the executive will have to examine the various papers produced by the case—is a significant factor. Does the Under-Secretary agree—she can make it clear in her reply—that one problem is that potential costs are never-ending? The economic costs under the law of tort or of contract would not be readily obtainable by the party suing in a similar context. The costs would not be caught. We are talking about reasonable costs here, presumably of legal and other

professional advice that is directly contingent on the investigation.

Secondly, I made a comparison on Tuesday with the Monopolies and Mergers Commission, as it was called during my brief legal career, although I think that it is now called something different. I recall that several companies in industry sectors were regularly called before that commission. A raft of different industry sectors were investigated three or four times during a period of 15 or 20 years. For example, the beer industry and the British ice cream industry have had high-profile investigations over the years.

Within this process of super complaints, we may be letting ourselves in for the investigation of particular industries several times in a relatively short period of time. There may be a number of different ongoing inquiries into a particular industry, which may be high profile and have a relatively small number of players. The inquiries could involve prima facie doubt about monopolistic practices. It seems unacceptable that those industries should bear costs on a regular basis, particularly if the OFT kicks the super complainants' concerns into touch every time. Bearing in mind past monopolies and mergers procedures, I would like some guidance as to whether there will be an opportunity for the Government to give thought to ensuring that the costs of repeated investigations are not overly burdensome.

Ken Purchase (Labour/Co-operative, Wolverhampton North East)

I came in this morning with a sunny disposition, but I am becoming grumpy. With great respect, I think that the amendment is frivolous. If we were talking about the civil action of some showbiz personality who was upset because his last pop record had been criticised and felt that that had damaged his reputation, he could get on with it and take whatever action he chose. At the end of that litigation, the costs would rightly be awarded as the hon. Member for Eastbourne described.

In this instance, the word reasonable should be used in its fullest sense. It is not reasonable to believe that a responsible, well-organised professional consumer group would take either a frivolous or, in the words already used, a ''thin'' complaint to the OFT. The period of time in which they are to respond would be considerably shortened if there were a frivolous or thin complaint. In the best tradition of these Committees, the amendment is designed to probe. I urge my hon. Friend the Under-Secretary to reject it and Government Members to vote against it. Will the Opposition please withdraw it as quickly as possible?

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

I, too, oppose the amendment. My concern is that it would seriously emasculate the operation of super complaints. It would act as a significant disincentive to designated consumer bodies in bringing complaints. I have a great deal of sympathy with what the hon. Member for Eastbourne says about vexatious and frivolous complaints, but there ought to be some protection in the process of designation and the requirement for a reasoned complaint.

I envisage the procedure working in this way: a complaint will be made and representations will be

made by the business, industry, or firm concerned. At the stage at which the complaint is made, certain information will be available to the consumer body—probably whatever is publicly available. The business concerned will almost certainly hold information that it will not disclose prior to the starting of the super complaint procedure. When that information is made available to the OFT, it may result in no further action being taken. In that instance, given the information available to the consumer body when it brings the complaint, it is acting in good faith. If, when the OFT performs its role, it is found that no further action is necessary, there is no reason why the consumer body should be liable for costs when it is acting in good faith in that way. It would be a massive disincentive to bringing complaints.

The parallel that has been drawn with the courts in civil proceedings is a bogus analogy; we are dealing with a procedure that the hon. Member for Huntingdon quite rightly called a preliminary investigation. Such a situation will not occur. There is certainly no parallel in Scottish civil procedure and I am not aware of anything south of the border.

The wording of the amendment is very different from what one would have expected, listening to the hon. Member for Eastbourne. All that is required is that the OFT should take no action. For example, action might not be taken if the business concerned admitted what it had done and said that it would not do it again. Even in those circumstances, however, the consumer body that made the complaint

''shall bear the reasonable costs''

under the amendment.

If the hon. Gentleman had restricted the amendment to frivolous or vexatious complaints, I would have had a great deal of sympathy for it. Indeed, with that in mind, I urge the Minister to consider some sort of protection against such complaints. However, the amendment certainly does not have that effect and I cannot support it for that reason.

Jonathan Djanogly (Conservative, Huntingdon)

The hon. Gentleman discussed the possibility that consumer associations might be made bankrupt because of the amendment. Although they do a marvellous job overall, they will all at any given time have several litigation suits pending against them. In many instances, they settle the complaints and publish apologies in their magazines. It is simply not realistic to think that they never make mistakes. Indeed, companies can be threatened with bankruptcy because of the proceedings. It comes down to where the costs should lie. Should they invariably lie with the companies, with the consumer bodies or, in certain circumstances—I appreciate that the amendment does not say it—with the OFT and the Government? We must consider that question.

I want to discuss whether such investigations are conceptually different from normal OFT investigations. I would say that they certainly are. In the context of how consumer bodies work, the investigations are unlikely to be conducted through the normal OFT course of events, in which it

announces that it is investigating, gets on with it quietly for several months—unless the Serious Fraud Office gets involved—and comes up with its finding. Instead, there is likely to have been correspondence with consumers and possibly campaigns in the newspapers, surveys in consumer magazines and features on programmes such as ''That's Life.''

Andy Burnham (Labour/Co-operative, Leigh)

That was years ago.

Jonathan Djanogly (Conservative, Huntingdon)

Now it is ''Watchdog.''

The environment is very different from that of a standard OFT investigation. The company should have the right to compensation if, after all that, the finding is that the claim was wrong.

Andy Burnham (Labour/Co-operative, Leigh)

Does the hon. Gentleman agree that, even if a complaint is not upheld, the organisation that brought it has served the wider public interest by focusing public debate and attention on business practices and encouraging greater understanding of a particular business?

Jonathan Djanogly (Conservative, Huntingdon)

There may well be reasons why it is interesting to consider an issue for the reasons that the hon. Gentleman gave. However, if the OFT loses or decides that there is no course of action to be taken, why should the company have paid for the state to investigate? Why should that cost fall to the shareholders of the company or, indeed, consumers? The company must pass on the cost of that investigation to shareholders or consumers through its prices, or go bankrupt. The money has to come from somewhere. The hon. Gentleman made a valid point, but why should the company have to pay if it has not been in the wrong?

Ken Purchase (Labour/Co-operative, Wolverhampton North East)

The hon. Gentleman should think about quantification. Let us take the two cases that have been mentioned. In the frivolous case, I suspect that there would be no inquiries to the companies whatsoever. In the very thin case, there might be a very short correspondence between the OFT and the company complained about, but that would be end of story. Quantify for me, please.

Jonathan Djanogly (Conservative, Huntingdon)

The hon. Gentleman's argument about the period of time is a good one. I was going to finish with that. If a frivolous pre-investigation were launched within the 90-day period, the cost would be relatively light by the time that the complaint was, in effect, knocked out by the OFT. The Consumers Association would be open to lower costs than it would have been had that investigation run for a long time.

Having listened to the debate, I think that it would be better to pursue the matter by looking at the different periods, as the hon. Gentleman suggests. During the 90-day period, perhaps the consumer body should be liable for costs if the action fails. If the OFT then decides to pursue the matter, perhaps the costs should go to the Government.

Ken Purchase (Labour/Co-operative, Wolverhampton North East)

The amendment deals with cases in which

''the OFT decides to take no action''.

There is no question of proceeding.

Mr. Djanogly: No, as I said. More to the point, the amendment says that the consumer body alone shall bear the cost. I am saying that perhaps that should not be for the consumer body alone. If the OFT decides to continue with the action after the 90-day period, perhaps the OFT—the Government—should pay.

Melanie Johnson (Labour, Welwyn Hatfield)

First, I re-emphasise the fact that checks are in place, which several of my hon. Friends and the hon. Member for Orkney and Shetland have also emphasised, to ensure that frivolous complaints are not submitted. I believe, along with several of my hon. Friends, in particular my hon. Friend the Member for Wolverhampton, North-East (Mr. Purchase), who has been pursuing the matter, that there should not be any genuinely frivolous complaints, given the guidance and the designation process. I take the word ''frivolous'' as meaning what it does, not as some sort of cover for something that does not progress later. There is a difference and several hon. Members have made a distinction between three possible categories of complaint. If genuinely frivolous complaints are submitted, something has gone wrong with the process. It is likely to be a serious matter for any organisation to proceed with a complaint in the first place.

As I said, consumer bodies will have to meet certain criteria, on which we shall consult fully. They will have to demonstrate their capacity to put together a reasoned case and devote considerable resources to producing that case in accordance with the OFT's guidance. Opposition Members may be forgetting that any process of examining how well something is working—the investigation and making of cases about what is going wrong and what, if anything, might be done about it—makes demands on all sides.

As I said, there will also be an informal consultation before the OFT accepts the complaint and it is therefore unlikely that the making of a super complaint would be entered into lightly.

Parties do not get their costs back when other complaints are submitted to the OFT and investigations are carried out that result in no action being taken, which is the middle category. I take it that Conservative Members have no problem with situations in which further action is taken because a problem has been identified.

As my hon. Friend the Member for Leigh (Andy Burnham) said, if there appears to be a reason to examine a case to see what issues arise from it, it is not right that an additional burden should be placed on the organisation bringing forward that matter, at which the OFT will have looked and decided that there is at least a reasoned case to be further examined as a result of that process. It is therefore unfair to attach that condition to complaints made by that procedure.

We are learning a lot about the hon. Member for Huntingdon. I am sure that his interest in dentistry is not an enthusiasm shared by most members of the public or, indeed, by most members of the Committee. He talked about proceedings and costs, but it is not a court process. There is always a temptation, which I am sure that his background as a lawyer will make him

want to resist, to assume that all things come down to the law. The process is another avenue by which complaints can be made. I hope that I have reassured hon. Members about the safeguards to ensure that frivolous complaints are not made, and I hope that Opposition Members will have been reassured sufficiently to withdraw the amendment.

By way of reassurance to my hon. Friend the Member for Hemel Hempstead about the resourcing of consumer groups, the Government do not intend to provide them with additional resources. However, the paper that the National Consumer Council has submitted to the Committee makes it clear that it intends to apply for designation and believes that that would be possible.

Tony McWalter (Labour/Co-operative, Hemel Hempstead)

Will my hon. Friend bear in mind that consumer groups may end up with additional responsibilities and potentially significant financial problems as a result of those new responsibilities unless their resource base increases substantially?

Melanie Johnson (Labour, Welwyn Hatfield)

That is conceivable, but it is for consumer groups to prioritise their resourcing of both time and money and to decide what their priorities are. If there were a general area of difficulty in the way in which a market was working and such a consumer group were able to proceed with a super complaint, which one would expect it to pursue successfully in such conditions, that would reduce its work load in a number of other ways and increase public interest in supporting it. The NCC's submission makes it clear that it is keen to be designated.

Nigel Waterson (Conservative, Eastbourne)

If I may say so, Mr. Beard, one or two hon. Members have got a little overheated and perhaps even grumpy about the effect of amendment No. 20, which the hon. Member for Wolverhampton, North-East characteristically put into context.

There are plenty of safeguards before such a provision would kick in. First, there is the designation process about which we are shortly going to talk. I hope that the Secretary of State will designate precisely those consumer bodies to which I referred earlier, namely professional, long-established, well-supported, thoroughly responsible bodies that are already active in the field.

Secondly, the business of frivolous and vexatious complaints is another red herring because we are all confident that the OFT would dismiss those out of hand and the most that would be generated would be a short exchange of correspondence with the company.

Melanie Johnson (Labour, Welwyn Hatfield)

Does the hon. Gentleman accept that such complaints are unlikely to be put before the OFT? I agree that they should be dismissed quickly by the OFT and not pursued, but does he accept that it is highly unlikely that they would ever be brought?

Nigel Waterson (Conservative, Eastbourne)

It is a chicken and egg situation, because we do not know what bodies will be designated. During our forthcoming debate, we shall press the Under-Secretary for a clue as to who will be the lucky winners of the lottery. I hope that there would not be such complaints, but if there were, they could be dealt with quickly and at minimum cost to anyone, which is what they would deserve.

The absolute worst-case scenario would be costs incurred over a 90-day period. We believe that the period should be shorter at 60 days and the CBI would like 30 days, but three months should be the maximum. The amendment is sensible, but in a spirit of amity and with the wish to make progress, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Nigel Waterson (Conservative, Eastbourne)

I beg to move amendment No. 21, in page 5, line 17, leave out from 'body' to 'such' in line 19 and insert

'where he is satisfied that it is fully representative of the legitimate interests of consumers and that it meets'.

Nigel Beard (Labour, Bexleyheath and Crayford)

With this it will be convenient to take amendment No. 22, in page 5, line 18, after 'consumers', insert

'of products or services of any description'.

Nigel Waterson (Conservative, Eastbourne)

I hope to deal with these amendments quickly. They concern the designation process and precisely which bodies are designated. Amendment No. 21 is a probing amendment to draw from the Under-Secretary the sort of bodies that might be designated. It is easy to make a quick list of three or four, but we are interested in how many more there might be. We have already heard from the National Consumer Council, which rightly considers itself a prime candidate, and the Under-Secretary may want to put some of the organisations out of their misery today.

We have heard from the Consumers Association, which is a likely candidate, and it would be surprising, to put it mildly, if it were not on the final list. Other bodies such as the National Association of Citizens Advice Bureaux would like to be on the list and deserve to be, but have not had a nod or a wink so far. The Under-Secretary may wish to tell us more about that. The purpose of amendment No. 21 is to draw that out and the purpose of amendment No. 22 is to narrow the basis of selecting the organisations.

Clarification is needed of the standing and type of groups that we are discussing. The easiest way of doing that is for the hon. Lady to intervene and say that what the Government have in mind is to designate the following six organisations. We could then move on.

Melanie Johnson (Labour, Welwyn Hatfield)

I am afraid that I cannot help the hon. Gentleman in that way.

Nigel Waterson (Conservative, Eastbourne)

That is a shame, because I shall have to speak at inordinate length

Melanie Johnson (Labour, Welwyn Hatfield)

I can help. Our intention is that super-complainant status will be granted only when a body asks to be designated. No body will be designated if it has not applied. The Secretary of State will publish criteria against which possible candidates will be assessed and we shall consult fully on those criteria. To give the hon. Gentleman some guidance, there are criteria for the designation of bodies in relation to the Stop Now Orders (E.C. Directive) Regulations 2001, which were approved last June, and we shall use similar criteria as a starting point.

The Secretary of State will also issue guidance on the application procedure and it will be possible to amend the list of designated super complainants if they meet all the criteria I mentioned.

Nigel Waterson (Conservative, Eastbourne)

I guess that that is helpful, except for the bodies that are waiting with baited breath. There will be lot of guidance flying around in the wake of the Bill. I shall work on the assumption—

Melanie Johnson (Labour, Welwyn Hatfield)

Is the hon. Gentleman complaining about that?

Nigel Waterson (Conservative, Eastbourne)

About what?

Melanie Johnson (Labour, Welwyn Hatfield)

Guidance.

Nigel Waterson (Conservative, Eastbourne)

One can have too much of a good thing in life, as we all know.

The amendments have a narrow ambit. Amendment No. 21 aims to ensure that the consumer organisations will have an effective, balanced and responsible approach. I have mentioned some organisations that would, on any view, fit those criteria. They are my criteria; the Under-Secretary tells us that there will be criteria, but will not hint at this stage who might fit them. It would be very difficult to justify if some of the organisations that I have mentioned were not designated pretty promptly under the procedure.

The National Association of Citizens Advice Bureaux says that it welcomes super complaints in principle and will consider requesting status as a designated consumer body. It goes on to say

''we very much hope that the OFT will have adequate powers to act in response to . . . Super-complaints.''

I have already made that point. Amendment No. 22, which would insert

''of products or services of any description'',

would slightly tighten the context in which the bodies would be designated.

I do not want to press the Under-Secretary unduly and no one will sue her if things turn out differently, but does she have some general notion of the number or size of bodies, or the kind of criteria, that might pop up in guidance? Otherwise, we are in effect talking about the matter in a vacuum. Some very good organisations, including NACAB, are keen to get on and be designated. Why not put them out of their misery?

Melanie Johnson (Labour, Welwyn Hatfield)

I shall make a brief response, because I covered several of the hon. Gentleman's points in my intervention.

I emphasise that we will set out criteria and that there will be consultation. The hon. Gentleman could refer to the stop now orders regulations. He asked what sort of organisations we are talking about. The Secretary of State will need to be satisfied about the quality of consumer bodies to contemplate designating them. We want to ensure maximum flexibility in the designation process by using criteria rather than by including conditions in the legislation. That means that we can update the requirements later if necessary.

Amendment No. 22 is unnecessary. Clause 173 already contains a definition of ''consumer'', which is

reflected in clause 11(9)(b). I therefore hope that the hon. Gentleman will not press the amendment.

On the nature of the bodies that will be involved, I think that it would be entirely wrong to start toying with the idea of which bodies might or might not be designated. I can tell the hon. Gentleman that we are looking for such things as capacity and track record in the appropriate area. We will use as our starting point the criteria set out in last June's stop now orders regulations, which are available to hon. Members.

Jonathan Djanogly (Conservative, Huntingdon)

Does the Under-Secretary countenance having single-issue bodies designated in any way, shape or form? For example, if there were a complaint about a particular product, 1,000 consumers unhappy with it might get together and form an association for the purposes of making a super complaint.

Melanie Johnson (Labour, Welwyn Hatfield)

I have not envisaged such a thing.

Nigel Waterson (Conservative, Eastbourne)

I do not want to detain the Committee, and we might discuss that matter in more detail later, but my hon. Friend raised an interesting point, which might need further examination. I am thinking of an issue over which I appeared on the ''Watchdog'' programme—rather than ''That's Life''—recently, the failure of the company Tempo, which is a retailer of electrical goods. It had taken money from many customers for its extended warranties—one is pressed to buy them when one buys something and does not understand how it works. Many customers were left high and dry because there were no arrangements of the sort found in more reputable and better-run companies, such as Dixons, where money was ring-fenced or backed by insurance. I have seen estimates of up to 100,000 people affected. One would imagine that such a group could come together for a single purpose relating to a practice of one company and then disband.

Andy Burnham (Labour/Co-operative, Leigh)

I am interested in the argument that the hon. Gentleman has developed. Does he agree that single issue campaign groups, such as the Campaign for Real Ale, which campaigned for full pints, or the Football Supporters Association, which campaigned against ticket-pricing and merchandising policy at football clubs, can be extremely effective bodies in raising issues that affect a certain sector of industry?

Nigel Waterson (Conservative, Eastbourne)

The hon. Gentleman is absolutely right. I am a great supporter of CAMRA. It used to own a pub—I do not know if it still does—called the Cruel Sea, which I think they renamed the Nag's Head—

Mark Field (Conservative, Cities of London and Westminster)

The Waterson Arms.

Nigel Waterson (Conservative, Eastbourne)

Yes. CAMRA has done a great service to beer drinkers over the years. Would it qualify? I know that the hon. Gentleman asked me the question, but I am sure that he is really asking the Minister.

Mark Field (Conservative, Cities of London and Westminster)

I wonder if my hon. Friend has given any thought to the prospect of large lobbying organisations, such as Greenpeace, developing some sort of designated consumer arm and using that

mechanism—as it did in its high-profile campaign against Shell a few years ago.

Nigel Waterson (Conservative, Eastbourne)

My hon. Friend makes a very good point.

Jonathan Djanogly (Conservative, Huntingdon)

The issue is very important. The Under-Secretary has often said that super complainants will not make frivolous or vexatious complaints because they will be responsible and will want to maintain their reputation. However, with a single issue, that may well not be the case. If the group is concerned with a single issue, it will not be thinking about other campaigns in which it may get involved. It exists to deal with the specific issue and its reputation will depend only on the success that it has with that. I was happy to hear the Under-Secretary say that single-issue bodies will not be allowed.

Nigel Waterson (Conservative, Eastbourne)

This discussion might be more appropriate on amendment No. 23, with which we will deal in a minute. However, it raises another interesting question about the Government's thinking on the matter. One of the most important changes in modern politics has been the growth of one-issue groups, some of which exist purely to lobby on one issue, whether it is foxhunting, housing, beer or whatever, to the exclusion of everything else. It will be interesting to hear what the Under-Secretary has to say.

Melanie Johnson (Labour, Welwyn Hatfield)

I have already said what I have to say on this. As the hon. Member for Huntingdon said, I do not envisage that type of group being designated.

Nigel Waterson (Conservative, Eastbourne)

I think that I must have been looking forward to the debate on the next amendment. We have grown excited because of all this discussion. We have put down some markers and tried to tease out of the Under-Secretary what bodies we are talking about. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Nigel Waterson (Conservative, Eastbourne)

I beg to move amendment No. 23, in page 5, line 20, at end insert—

'(6A) The status of ''designated consumer body'' for the purposes of this section shall be renewed by the Secretary of State on an annual basis and revoked if he thinks fit.'.

This amendment has a very narrow compass. It would give the Secretary of State power to renew the designations on an annual basis and to revoke them if she thinks fit. That seems to be a sensible safeguard. The sort of bodies that I am talking about would have their licences renewed year after year with no difficulty. It is another safeguard against bodies on the list that do not come up to scratch and behave in the way in which we expect, and it is another way in which to remove them from the list. In response to an earlier amendment, the Under-Secretary suggested that the Secretary of State would have the power to remove the designation from organisations and that should be the case.

Mark Field (Conservative, Cities of London and Westminster)

Although, in principle, I support that sensible administrative suggestion, one potential difficulty is that if a body were designated as a super complainant it would be subject to an annual review.

If during a 12-month period it had not put forward any complaints to the OFT, there would be pressure on it to make sure that it was active in the market. There is a slight danger that the annual review process would lead to more bureaucracy from certain super complainants, which would otherwise be silent.

Nigel Waterson (Conservative, Eastbourne)

My hon. Friend may be worrying unnecessarily.

Mark Field (Conservative, Cities of London and Westminster)

I was probing the probing amendment.

Nigel Waterson (Conservative, Eastbourne)

My hon. Friend is right to probe my probing amendment. We covered some of that matter in a previous discussion in which I mentioned Tempo.

Bodies may come and go. Perfectly legitimate and well-run bodies may be set up and go on to the list, but their purpose in life may disappear either because they are successful or, more probably, because they are unsuccessful. It is important that there is a right to remove them from the list. I suspect that the Under-Secretary is going to tell me that that is dealt with in a different way in a different part of the same forest.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

At the risk of disappointing the hon. Gentleman, I am enamoured of the amendment and I would be minded to support it. When I heard him talk about the growth of single-issue pressure groups in politics, I wondered whether he was talking about the Conservative party and Europe. I realised, however, that that could not be the case because he was talking about growth, which is not something that one readily associates with the Conservative party.

The amendment is useful because that sort of control would be helpful. I do not share the concerns of the hon. Member for Cities of London and Westminster about an increase in bureaucracy. It is important that bodies designated for the purposes of

making super complaints should be subject to regular and routine scrutiny. To that extent, I am interested to hear what the Under-Secretary has to say not only about that sort of regular scrutiny, but the possibility of the removal of designation without there being an annual review in an instance in which a consumer body has acted inappropriately or vexatiously.

Jonathan Djanogly (Conservative, Huntingdon)

I support the amendment. Clearly, management and standards can change in an organisation over the years. An organisation that might have done very well over a period of time may suddenly start to get an awful lot wrong. There should be a method by which it can be reviewed on an annual basis.

What if a consumer body, a member of a consumer body or someone lobbying a consumer body had a commercial interest in a super complaint proceeding? In those circumstances there should be a means of redress against the body making the complaint. We assume that the current high standards in the Consumer Association and other such bodies will continue, but what safeguards will the Government put in place carefully to check that there are no commercial interests behind designation?

Melanie Johnson (Labour, Welwyn Hatfield)

I am delighted to do some more probing on the probing of the probing of the amendment. There has been a great deal of discussion this morning.

I shall bear in mind the last point made by the hon. Member for Huntingdon. When we look at the criteria, we will need to consider such issues and decide how to deal with them.

It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Standing Committee B

Clause 11 - Super-complaints to the OFT

Melanie Johnson (Labour, Welwyn Hatfield)

The amendment would make the Secretary of State renew the status of designated consumer bodies on an annual basis. We intend that it should be done only as necessary when we and/or the Office of Fair Trading are worried about a designated body.

I appreciate the points made earlier by hon. Members but to make an annual review a legal requirement would place an unnecessary administrative burden on the Government and consumer bodies and be a bureaucratic addition to the Bill. As the hon. Member for Cities of London and Westminster (Mr. Field) remarked, it could lead to more complaints than necessary as bodies attempt to justify their status. The amendment is unnecessary; we have the powers to withdraw the designation when and if necessary. I hope that hon. Members, having debated the subject and thought about it further may wish to withdraw the amendment. If they do not do so, I shall ask the Committee to oppose it.

Nigel Waterson (Conservative, Eastbourne)

I welcome you back to the Chair, Mr. Conway.

If the Minister says that my amendment is unnecessary, who am I to argue? I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 11 ordered to stand part of the Bill.

Clause 196 - Super-complaints to regulators

Harry Barnes (Labour, North East Derbyshire)

I beg to move amendment No. 122, in page 142, line 41, at end insert—

'(1A) The Secretary of State may by order provide that section 11 is to apply to complaints made by a designated producer body in the same way as to complaints by a designated consumer body.

(1B) ''Designated producer body'' means a trade union or other body designated by the Secretary of State by order.'.

The amendment arises from remarks that I made at the end of the second sitting, which were exceptionally

brief because I was not sure that I was in order and wanted to make my point quickly. The hon. Member for Eastbourne (Mr. Waterson) said that he was looking forward to my tabling an amendment on the subject, as that would make an interesting debate. He has encouraged me to table this amendment.

My concern is that we have discussed consumers and business—I solidly support the points made this morning in defence of consumers—but not the position of producers and workers in such circumstances. My question is, ''What about the workers?'' In the Committee's first sitting, the hon. Gentleman said that I was ''irredeemably old Labour''. In speaking to the amendment, I shall try to reveal that Labour, old and modern, has many strands.

At the high watermark of what was called Bennism in the Labour party, there was what we called the hard left and the soft left. I suspect that the hard left's belief in the workers would have made them favour my amendment rather than the provisions on consumer bodies that we agreed in clause 11. The soft left's commitment to the parliamentary, rather than the industrial, struggle would have led it to prefer clause 11 to my amendment, as the electorate are all consumers but are not all paid workers. There is a feeling in Parliament that consumers and the electorate are fully interlinked. My brand of old Labour has always represented a third socialist way; neither too hard nor too left. It should not be confused with any other third way, such as the new Labour one. In fact, my brand of democratic socialism is bang up to date and futuristic, as my support of clause 11 and the amendment reflects.

I recognise that the same person can have different, even conflicting, interests in different circumstances and places. They can be a consumer on the high street, a worker at the coal face—of which there are few left—an academic in an ivory tower or someone on the other side of the counter. Part 1 should reflect those interests in relation to designated bodies that can make complaints to the Office of Fair Trading. The OFT would then have the standard, democratic duty to try to reconcile conflicting interests. That is a valuable characteristic of a democratic society, as long as the process does not disadvantage people; that is what the provisions on consumers seek to correct. My amendment recognises that the workers by hand and by brain are not forgotten. They have not gone away, and we cannot function without them.

I mentioned G.D.H. Cole who produced books on guild socialism early in his career. He came to advocate a Parliament comprising a House of consumers and a House of producers. Everyone held the interests of consumers. The House of producers and the House of consumers would be similar bodies under a universal franchise that was still developing at that time. Consumers are now properly and fully represented in the House of Commons. Clause 11 would not have surprised him, as it is in keeping with his thinking and values.

His House of producers was to be a second Chamber and was based on his idea of guild socialism, an industry-based, democratic trade

unionism that covered all workers by hand or by brain in a sort of institutionalised TUC. He believed that consumers and producers would work in harmony with each other, especially as a socialist society was developed and established. He believed that the House of producers should have the final say in any clash of interests with the House of consumers. The House of producers was the nobler ideal, as producers affected the workers more and, in the end, we were all dependent on them.

Nigel Waterson (Conservative, Eastbourne)

I am following the hon. Gentleman's argument with enormous interest, tinged with horror. Did he ever have a chance to discuss these interesting ideas with his late uncle, whom I once had the great pleasure of meeting in the bar of the British Legion club in my constituency? He was very proud of his young nephew and how well he was doing in politics.

Harry Barnes (Labour, North East Derbyshire)

I did not have a chance to discuss these ideas with my late uncle Arthur, but we certainly discussed the happy occasion when he met the hon. Gentleman.

G.D.H. Cole would probably have wanted to add something to my amendment, because he would want to raise the status of the workers more than this mild measure does. It is a quite peculiar proposal, in fact, because of the time in which I tabled it. Although it would allow producers to have a say with the OFT, that would be on consumer issues. I did not think about that matter earlier; it only came out of our discussions. However, there might be an opportunity later to clarify the proposal further, perhaps in the form of a more appropriate new clause.

After his guild socialist period, G.D.H. Cole's views moved on. As he became more involved in the politics of Labourism, he edged much more towards the position of the electorate and therefore the consumer, even though he still had a great commitment to the trade unions.

That is just about the position in which my amendment would put us. It would not turn the Bill on its head and is not designed to do something contrary to the principles on which it is based. However, the amendment would introduce into the Bill an interest that is not currently considered by it and which is being pushed ever backwards in modern society. Altering legislation so that that interest receives more consideration is important.

I merely wish to improve the balance of the Bill without changing it into something diametrically different. In response to my short speech the other day, my hon. Friend the Under-Secretary said that it was hard to answer my point as she needed to give it more thought. Now that I have tabled an amendment, presumably she and her office have given it more thought.

I am talking about a mechanism whereby trade unions and representatives of people at work in all forms and different grades can be involved in the consideration of market operations. The provision could provide for another set of people who could be consulted on consumer matters, or there could be a

mechanism whereby their more direct interests as producers could function without distorting terribly the operation of the market, while offering some safeguards for their position. The position of the consumer may sometimes be like that of David against Goliath, as was said this morning, but workers are sometimes in exactly the same position.

I may be told that this is the wrong Bill through which to deal with these matters, but we shall come later to the merger provisions, in which the work force has a clear interest; these may be subject to discussion.

Ken Purchase (Labour/Co-operative, Wolverhampton North East)

Lovely territory. Would not it have been an elegant coincidence if, instead of clause 196, we had been debating clause 4? My hon. Friend the Member for North-East Derbyshire (Mr. Barnes) calls upon an excellent tradition to make his case. I understand his point that perhaps later in the Bill, when we look at the question of mergers and monopolies in markets, we should revisit his words. He calls upon a tradition that is embodied in the notion and ethics of co-operation, of the Co-operative movement and of Robert Owen, seeing that the interests of consumers and producers were one and the same in a just and equitable society.

Regrettably, we do not live in just and equitable society. The nature of the competitive ethos with which we struggle is inimical to the idea of co-operation. It is a pity, but we must work with the tools and in the society that we have. We have to begin from where we are, rather than where we would wish to be. I am grateful to my hon. Friend for tabling the amendment. When we look at the organisations such as the Consumers Association—and when we praise the wonderful work that the late Lord Young, who started it all those years ago, did on behalf of consumers—we should remember that their ethos should thread its way through this Bill. In the society that I would like to build, there would be a coming together of the interests of consumers and producers; whether those producers work by hand or brain, as my hon. Friend would define it, or as part of a company as owners and shareholders. They are not opposed.

The idea that we should produce ethically, properly and within rules that are not unfair to any other producers, and that goods and services are produced to the highest standards at the most reasonable costs, threads through the whole of the Labour party. The Labour party that I inhabit has never opposed enterprise. It has always recognised that, to succeed, the economy must be a mixed grill of regulation, competition and organisations that act on behalf of employers and workers. In that sense the strengthening of our trade unions through recent legislation by this Government has been helpful.

Opposition Members will take a contrary view; they are entitled to do so. I stand firm and say that in the society that we inhabit and in terms of the economic ethos with which we work, a strong trade union movement, a strong consumer movement and strong producers and employers suit us best. I am grateful to my hon. Friend the Member for North-East Derbyshire for tabling the amendment to provoke

those thoughts. I sincerely hope that his words will be taken into account again when we come to the part of the Bill that deals with mergers, monopolies and anti-competitive measures.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

I echo the closing words of the hon. Member for Wolverhampton, North-East (Mr. Purchase) about the thoughtfulness of the presentation from the hon. Member for North-East Derbyshire and, indeed, the thought-provoking nature of his amendment. I do not share much of the horror felt by the hon. Member for Eastbourne. In tabling the amendment the hon. Gentleman has raised important issues that I hope the Under-Secretary will consider at a later stage. There are interests, such as those represented by trade unions. Perhaps other bodies, such as professional bodies—one thinks of the role of the Law Society in the financial services sector—would have a legitimate interest and could be a designated producer body as well. The role of such bodies is important and deserves careful consideration.

The amendment may not be accepted today, as I see differing expressions on the faces of Labour Members. Following the chasm between the hon. Members for Eastbourne and for Cities of London and Westminster this morning, I think that, with splits, the Liberal Democrats lead where other parties will eventually follow. However, there are serious points. The hon. Member for North-East Derbyshire should be commended for introducing them, but I would not go quite as far as he would. If push came to shove, I would not support the amendment, but I hope that the important issues that he raised will be considered.

John Pugh (Liberal Democrat, Southport)

I share the sentiments of my hon. Friend the Member for Orkney and Shetland (Mr. Carmichael). It was a lovely and educational excursion from the hon. Member for North-East Derbyshire, and I enjoyed every minute of it, especially the references to uncle Arthur. However, I then read clause 11(1), which the amendment would modify. It says that the proposal applies when a designated consumer body complains because something

''appears to be significantly the interests of the consumers.''

The hon. Gentleman can correct me if I am wrong, but that seems to suggest that the producers should interfere on behalf of consumers. It seems formally inappropriate.

Harry Barnes (Labour, North East Derbyshire)

I tried to explain that there was a problem, which arises because we had already discussed clause 11(1) before I tabled my amendment. Ideally, I should have moved earlier so that I could have had a different form of wording. Unfortunately the amendment suffers from the difficulty of producers making references on behalf of consumers.

John Pugh (Liberal Democrat, Southport)

That point is accepted, and it creates a difficulty in supporting the amendment. However, the hon. Gentleman has alerted us to a missing dimension in the Bill. We will be receptive to arguments about it later in our consideration, but as it stands, the amendment is formally inappropriate and cannot be supported.

Melanie Johnson (Labour, Welwyn Hatfield)

May I also say how much I have enjoyed this debate and how refreshing it is to have an injection of history and thinking into our consideration? I share the regret of my hon. Friend the Member for Wolverhampton, North-East that we did not reach this point at clause 4. It would have been a nice touch.

It is important to remember that the policy's focus is to alert the OFT to market failures that significantly harm the interests of consumers, which relates to the point that was made during the exchange between my hon. Friend the Member for North-East Derbyshire and the hon. Member for Southport (Dr. Pugh). Individual consumers do not necessarily have access to the information, skills, resources and expertise required to put together cogent complaints about the failure of particular markets. That is why we want to enable consumer bodies to do that on their behalf and formalise the process so that consumer interests are protected. That is why the Bill does not envisage that the procedure will be available other than to those who are designated as consumer bodies.

One point that was raised in many contributions, but particularly by my hon. Friend the Member for Wolverhampton, North-East, was the identification that the interests of consumers and producers are one and the same. I support that point, and one of the thrusts that underlies the Bill is that these things must be brought together for consumers and business to get a fair deal. There are differences in this matter, and consumer bodies will be best equipped to represent the interests of consumers.

My hon. Friend the Member for North-East Derbyshire commented on producer interests throughout his speech. On trade union involvement, I reassure him that the TUC was fully involved in all the discussions leading to the drafting of the Bill, through the White Paper consultations and the ongoing discussions with officials in the Department of Trade and Industry. Similarly, discussions have taken place with business groups and other interest groups.

As I am sure my hon. Friend would agree, producer interests cover not only trade unions but business groups. Neither trade unions nor business interests have as their raison d'etre the protection of consumer interests. They may consider consumer interests but those are not their primary concern, which is why we do not propose to designate those groups under the super complaints procedure. However, I reassure my hon. Friend, and all hon. Members who have contributed, that producer bodies can already put complaints about market failure and other issues to the office of OFT and they will still be able to do so. Although they will not have super complaints status, they will be able to make the sort of representations that I know my hon. Friend would want.

John Pugh (Liberal Democrat, Southport)

Will the Under-Secretary give way?

Melanie Johnson (Labour, Welwyn Hatfield)

I would rather finish my speech.

I hope that my hon. Friend can recognise that his interests are sufficiently embodied in the Bill and withdraw his amendment.

Harry Barnes (Labour, North East Derbyshire)

The amendment has flaws, to which I have already pointed—although it was a useful trailer for other matters—and I am not the variety of hard left politician who would push it beyond a position that it can carry.

John Pugh (Liberal Democrat, Southport)

I thank the hon. Gentleman for giving way; he allows me to make the point that I wished to make to the Under-Secretary. She has not adequately clarified why super complaints status is not given to producer interests. These would make a different type of complaint from those made by consumer interests, but one no less lacking in status.

Harry Barnes (Labour, North East Derbyshire)

Yes, the amendment contains serious points. The concern about producers could be included in legislation. However, I was saying why I will withdraw the amendment. I am not of the hard left position that cracks by wanting to stand pure all the time, nor am I soft left. In this malleable position, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 196 ordered to stand part of the Bill.

Clause 16 - Damages

Jonathan Djanogly (Conservative, Huntingdon)

I beg to move amendment No. 31, in page 8, line 3, at end insert—

'(3A) The Tribunal shall also have the power to grant injunctive relief.'.

I would be interested to know why we are not dealing with clause 15 first, because in some ways it draws into clause 16. I appreciate that the Government want to open up the enforcement of competition law and encourage private actions—we will come to those issues when we discuss clause 15—but the order in which we are considering matters still seems unusual.

The Competition Act 1988 already provides for the right to seek damages in the courts, and clause 16 will provide the extra teeth to competition appeals tribunals, which will also be able to hear damages claims.

Different types of relief—damages and injunctive relief—are available to claimants. The claimant will often be concerned not only to receive compensation in the form of damages for what has happened, but to apply to the court for injunctive relief to prevent it happening again. Insofar as that is relevant to the court process, it is also relevant to the CAT process. If not, the claimant could not achieve both objects through the same legal process. A claimant pursuing damages through the CAT would need a simultaneous court action in process to obtain injunctive relief. That would lead to a costlier and lazier process being heard by two courts that could take different tacks on the same issue.

To the extent that the amendment would simplify the process, I fully support it. However, wider issues are relevant. The Government have changed their mind. The issue was debated during the passage of the 1998 Act and it was decided then that damages should

not fall within the CAT process. Will the Minister explain the Government's changing thought processes? I note that a Library research paper refers to consultations prior to the 1998 Act and sets out the Government's view then:

''We have considered carefully the option of making the Competition Commission, as opposed to the Courts, the forum to hear private law actions for breach of the prohibition such as claims by third parties for damages or interim relief. We have concluded that there are significant drawbacks to such private actions being heard in the tribunal. In practice the application of the prohibition would often be one of many areas of the commercial dispute to resolve which, in turn, could lead to an unnecessary duplication of fact finding as the tribunal heard competition law points and the courts heard other aspects of the same case. Moreover, if the tribunal were to hear such private law actions, this could prejudice its primary objective of providing a quick and efficient review of DGFT decisions. We have therefore decided that such private actions should be heard in the courts.''

We are now dealing with the damages side, so we are diverging from that position only a few years later by placing it into a CAT process, while it has been decided that the injunctive relief element will not be moved into that process. That will complicate rather than simplify matters. Will the Government explain their view?

The concept of injunctive relief is part of the wider debate on the role of the CAT. Competition issues should generally be dealt with by the CAT rather than by a mix of the CAT and the courts. The Government have been lobbied generally and several judges have argued that the CAT should have a wider role than under the Bill. It is in the interests of business that a specialised tribunal, which will act more quickly than the courts, deals with competition. Increasing the ability of the courts to take speedy decisions, making the process more uniform and avoiding duplication should lead the Government to review the amendment carefully.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

I rise to endorse the words of the hon. Member for Huntingdon (Mr. Djanogly). The tribunal has a quasi-judicial function, so it is only sensible that the full range of civil avenues should be open for exploration. If an injunction were granted at an early stage but later found to be wrongful diligence, might not the damages be horrific? I presume that an injunction would be used sparingly in England. My only other observation relates to the drafting of the amendment. Subsection (2) refers to

''a claim in tort or, in Scotland, delict'',

so it would be similarly sensitive to acknowledge in the amendment that Scotland does not use the term ''injunction'', but ''interdict''. My amendment to the amendment would make it absolutely correct and more elegant.

Melanie Johnson (Labour, Welwyn Hatfield)

First, clauses 16 and 17 are concerned with damages claims, so they can be grouped coherently together. Clause 15, however, belongs more appropriately with part 2, which we have not yet reached. If the hon. Member for Huntingdon reflected further on that, he would understand that that is the simple reason behind the current focus on clause 16.

The amendment would give the Competition Appeal Tribunal the power to grant injunctive

relief—the power to make directions in the context of damages claims made before it. Such a power is unnecessary. When a damages claim is made before the tribunal, the issue of whether an infringement of competition law has taken place will already have been decided either by the OFT or the tribunal itself on appeal from the OFT. In taking decisions on infringements of competition law, the OFT or the tribunal will have full powers to grant injunctive relief in the form of directions. Additionally, the OFT will have the power to grant interim relief while it is still investigating a possible infringement and the tribunal to grant interim relief while it is still hearing an appeal.

If an appeal were made against a decision of the OFT that an agreement does not infringe the chapter 1 prohibition, the tribunal could make an interim order preventing the parties to the agreement from implementing it. If it is upheld, the CAT could make a final direction requiring the parties to modify or terminate the agreement. All such issues will have been decided before a damages claim is made, so any appropriate injunctions will already be in place. The power is not needed at the stage when the tribunal is hearing or deciding on a claim for damages. In a damages case, the only powers that the CAT needs are the power to award the damages and the power to award costs. On no occasion would an extension of the injunctive powers of the CAT to cover damages cases be required. Therefore, I invite the hon. Gentleman to withdraw the amendment and ask the Committee to support me in opposing it.

Jonathan Djanogly (Conservative, Huntingdon)

I thank the Under-Secretary for her comprehensive response. Ultimately, the concept of damages is acceptable—certainly more than that of super complaints—if only because here we are talking about a defined set of circumstances rather than heading off into the unknown. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Nigel Waterson (Conservative, Eastbourne)

I beg to move amendment No. 55, in page 8, line 25, at end insert—

'(5A) The limitation period for bringing claims pursuant to this section shall be six months from the date on which the cause of action arose.'.

The amendment is another attempt to limit the effect of the clause, by including a new subsection, (5A), which proposes a limitation period. Clause 16 amends the Competition Act 1998 to allow the tribunal to hear damages claims, but cases can be brought to the tribunal only after a finding by the United Kingdom or European authorities of an infringement of either the UK prohibitions or those in the European treaty. As I shall outline in more detail in our debate on clause 17, if there is a claim for damages in tort—in delict in Scotland—the tribunal will not be able to hear damages claims until any possible appeal has been heard.

The clause also makes it clear that findings of an infringement by the OFT and the tribunal are to be binding on all courts. I hope that the Minister will clarify matters in her reply, which will obviate the need for a stand part debate. I want to know what the position is likely to be. Can the Minister confirm that

these are quasi-judicial hearings? Will people be permitted, or have the right to, legal representation?

It would be reasonable to introduce the six-month period in the amendment to avoid companies being put in excessive jeopardy. It is not an excessively short time. The limitation period for industrial tribunals, for example, is only three months. In any event, as a backstop, as clause 16(6) shows, general civil claims are not affected by the proposal, so if the proposed limitation period expires, civil proceedings may still be brought by injured parties. I stress that the six months would start to run only from the time that the cause of action arises, which will be clearly definable in terms of the infringements to which I referred. I urge the Committee to support the amendment.

Jonathan Djanogly (Conservative, Huntingdon)

The possible consequences for a company of a claim being made under clause 16 could be severe, so I support the concept of a time period. The CAT will be a new organisation. I am not sure how it would work without amendment and I should be grateful if the Minister would advise the Committee whether existing general laws of limitation will apply to claims. I should have thought not, as there will be a tribunal rather than a court process, therefore it is particularly important that there should be a cap on the time period. Clause 17, which we shall discuss later, will empower consumers to make claims. I have visions of an American-type situation in which law firms advertise for claimants and trail around the country trying to get as many people as they can to join the action, which will go on for months or even years as a result. That would be damaging to the company and to the legal process. For that reason, it is important to get the measure right.

By tradition, time scales in tribunal processes are generally shorter than in court cases. We do not want to detract from what is in the best interests of the taxpayer. I therefore suggest that the six-month period is appropriate.

Melanie Johnson (Labour, Welwyn Hatfield)

The Bill enables the period within which claims can be brought to be stipulated in the tribunal rules that are made by the Secretary of State. We are considering what we should align to that period. Under section 2 of the Limitation Act 1980, the period for the courts is six years. There seems to be no reason why the option of pursuing a claim through the tribunal should be available for a shorter time than is available for making an equivalent claim through the courts. Our aim is to facilitate, rather than to discourage, the bringing of claims before the tribunal. Claims can be brought only when the full process has been gone through and when an appeal, if relevant, has been heard.

Jonathan Djanogly (Conservative, Huntingdon)

I disagree. There is a tradition in this country of differing periods between court and tribunal processes, which is one reason for tribunals. Employment comes to mind. An employee may have a contractual right to sue for six years, but may have to go to a tribunal within three months.

Melanie Johnson (Labour, Welwyn Hatfield)

The tribunal is a fully judicial body and legal representation is as available in a tribunal as it is in a court.

Nigel Waterson (Conservative, Eastbourne)

Before the Under-Secretary finishes discussing that matter, would it not be unusual for any tribunal to have the power to specify its own limitation period? She, or even the Secretary of State, is right that under the Limitation Act 1980 there is a limit of six years on ordinary and other contractual claims. However, there is a panoply of different time limits in English law. My hon. Friend the Member for Huntingdon mentioned personal injury in employment tribunals, for which the limit is three years. For some bizarre reason, it is two years for collision cases in Admiralty law and there is a range of other cases. Is it right for the period to be established by regulation rather than mainstream law?

Melanie Johnson (Labour, Welwyn Hatfield)

The hon. Gentleman is making a point not only about whether the time limit should be in the Bill, but about it being six months. Six months is a short amount of time for many cases. Issues relating to damages, for example, can be complex.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

I remind the Under-Secretary of the restricted scope of subsection (5), which relates to cases where paragraphs (d) and (e) apply. Almost everything that is to be discovered about such cases will have been discovered long before any such period starts. There is a need for time limits, or prescription periods, in the Bill. That was always agreed and it is an undesirable departure to prescribe time limits by rules of court.

Melanie Johnson (Labour, Welwyn Hatfield)

I have listened carefully to the arguments of Opposition Members, but six months is too short a timeframe. It would be unfortunate if the Bill specified a time limit of six months and I urge the hon. Gentlemen to withdraw the amendment. We are considering the time limit and I will return to it later in the debate.

Nigel Waterson (Conservative, Eastbourne)

The Under-Secretary kindly said that she does not have a closed mind on the subject and will reconsider it. That is entirely appropriate, as she has divined that there is a strong groundswell of belief that the issue should be reconsidered. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 16 ordered to stand part of the Bill.

Clause 17 - Claims on behalf of consumers

Nigel Waterson (Conservative, Eastbourne)

I beg to move amendment No. 70, page 8, line 33, after 'specified', insert 'consumer'.

We have been pretty good so far at avoiding unnecessary stand part debates and I am sure that we will continue to do so, as they can be repetitive and tedious, in stark contrast to the debates on the amendments. With your leave, Mr. Conway, I intend to deal narrowly with the amendments in the hope that fortune might shine on me and you might allow a stand part debate on clause 17. I thought that I should say that now.

The amendment is straightforward. It would simply insert the word ''consumer'', so that the provision would relate to a ''specified consumer body''. It is in the spirit of both the clause and legislation to make that clear and I cannot see why it would be

objectionable. I will be surprised if the Under-Secretary does not accept it with enthusiasm.

Melanie Johnson (Labour, Welwyn Hatfield)

As the hon. Gentleman said, the amendment would ensure that only consumer bodies could bring consumer group claims. He invited me to accept it, but it would add little to the clause. Organisations that wanted to bring consumer group claims would have to apply to be designated by the Secretary of State specifically for the purpose, as we have discussed. Applicants would then have to meet the published criteria if they were to be included in the list of specified bodies. As we discussed, the criteria will be subject to consultation, but they will include a requirement for organisations to demonstrate that they represent the interests of consumers. As the amendment would not add anything, I do not feel sufficiently moved to accept it. I hope that the hon. Gentleman will take that in the spirit in which it is said.

Nigel Waterson (Conservative, Eastbourne)

It is thoroughly demoralising to hear that one of my amendments is unsatisfactory or unnecessary, but I understand the Under-Secretary's comments. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Nigel Waterson (Conservative, Eastbourne)

I beg to move amendment No. 57, in page 8, line 34, leave out 'two' and insert 'fifty'.

Derek Conway (Conservative, Old Bexley and Sidcup)

With this it will be convenient to consider amendment No. 58, in page 8, line 41, after 'may', insert 'only'.

Nigel Waterson (Conservative, Eastbourne)

I am sure that hon. Members will characterise the amendments as another attempt to emasculate the legislation, but they are nothing of the sort. They represent a desire to be clear about how it will work in the real world, which includes business and industry as well as consumer bodies and politicians, whether some hon. Members like it or not.

Melanie Johnson (Labour, Welwyn Hatfield)

Can we be clear that we do like the world like that?

Nigel Waterson (Conservative, Eastbourne)

I am sure that we can be clear. I am clear about that, as I am sure that you are, Mr. Conway, but as someone once said, ''By their deeds shall they be known''.

For some puzzling reason—one can imagine the poor draftsman late at night stretching his legs and coming up with this whimsical piece of drafting—new section 47B(1) says that a claim may be made

''on behalf of two or more individuals''.

I am puzzled why one would want to specify ''two or more'' on the basis that one complaint should be enough. If a consumer stumbled across a massive abuse or infringement, surely that would be enough on the general whistleblower principle. However, the Government believe that it should be two or more. I do not know whether there is a danger that the one person might simply be bonkers.

I intend to discuss this at as much length as you will permit me on the stand part debate, Mr. Conway, as we are into brand new territory in English and, I dare say, Scots law. It needs careful attention, otherwise a law with unintended consequences will really kick in

with a vengeance. The CBI, among others, was concerned about the phrase and came up with a proposed amendment, which I was happy to adopt. Given that for some reason the Government want to specify a number of individuals, it proposed that we should make it 50 or more. The basis for that proposal is the far-reaching nature and complete novelty of the power, as well as an attempt to be sure that whatever body brings an action represents a significant section of consumers.

In a sense, we are back to the danger of frivolous and vexatious claims and we could re-run that whole debate, but I suspect that we would have the same result. I should be fascinated to hear a ministerial justification for the provision referring to ''two or more'' individuals. I believe that there is merit in the suggestion that if we are to specify a number, it should be a significant number.

The Under-Secretary may reply that that would be the position anyway and that only pretty big league matters would be taken forward under the procedure, which almost by definition would mean large numbers of consumers were affected. I simply do not know, but if we are to specify a number, we could easily incorporate another safeguard by specifying a minimum of 50. I am not dogmatic about the number, but there should be some recognition that a not insignificant number of consumers must be affected. That is the basis of amendment No. 57.

Amendment No. 58 would provide an important safeguard in relation to this far-reaching power. Without it, there is a risk that the consumer body would retain the damages. Before anyone accuses me of facing both ways, I should point out that we shall come later to amendments that consider the possibility of a consumer body using funds obtained in that way for other purposes. If we are to go down that route, let us go down it with our eyes open. It is important to have this modest safeguard and I should be grateful to hear the Under-Secretary's comments.

Vincent Cable (Liberal Democrat, Twickenham)

As the hon. Gentleman has suggested, the clause raises some big issues. I imagine that the substance of them will be discussed when we reach the stand part debate. I am talking about the philosophy of whether consumer associations should be allowed to have real advocacy powers, followed up by possible legal action. However, we are dealing first with the safeguards, rather than the principle.

When we dealt with many earlier clauses, I sympathised with the way in which the Conservative spokesman was approaching the Bill, but we rather part company in this area. As we shall reach the bigger issues in the stand part debate, I will now deal with the two points that he made.

The first issue is cost recovery and damages. The hon. Gentleman envisages the possible emergence of an American-style, ambulance-chasing culture. Theoretically, that could happen, but surely it depends substantially on which organisations are authorised under the legislation to use the powers. Consumer organisations in this country are not into that sort of game at present; it is not their business.

A few years ago, the Consumers Association took an important action, which I think was essentially a class action, to establish an issue of principle in relation to orphan assets in the insurance industry. It was a big case, involving big costs, and not unreasonably the association would have expected to recover its costs, although not to profit from the process. Again, I am not sure whether the hon. Gentleman is concerned about consumer organisations ensuring that they have full cost recovery or whether they seek to make a profit.

The front-line consumer organisations of which I am thinking—the Consumers Association, the National Association of Citizens Advice Bureaux, and local citizens advice bureaux—are not ambulance chasers. That is not their mission and it is not why they would be authorised to take on the function that we are discussing. They do not operate in that way. We need to face the issue of how, presumably under secondary legislation, those organisations would be defined to prevent the opportunism that the hon. Gentleman described. I am not sure whether it is necessary to enshrine it in quite that way.

The second issue that the hon. Gentleman raised was multiple cases. I listened to his argument and he made the right point early on. Even one well-developed argument by one consumer should be enough to trigger an action. However, he then proceeded to argue that 50 cases should be needed. Even apart from the logic of that, I can foresee all kinds of difficulties with insisting on 50 cases, particularly in regard to a relatively local and minor issue that may be taken up by local CAB.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

I bring to my hon. Friend's attention the example of the residents of Papa Stour in my constituency. As there are only 17 of them, if they were disadvantaged in some way—although they are of course blessed in every imaginable way and I commend the island to the hon. Member for Twickenham—and sought to bring a class action, as the Conservatives call it, they would not be able to do so.

Vincent Cable (Liberal Democrat, Twickenham)

As the hon. Member knows, I shall visit the residents of Papa Stour in a few weeks' time, so I shall be able to test that proposition at first hand. He makes the point precisely. Most actions that consumer bodies might take up involve fairly localised uses. We should consider the matter in common-sense terms.

As Members of Parliament, we often act as consumer advocates. We do not have legal powers but we have powers to name and shame and to go to the local newspaper. That is often quite effective. When I hear of abuses, I ask myself whether it is an odd case or an example of systematic abuse. At what point does one pass that threshold? It happens when one has two or three identical cases.

An example is a case involving energy liberalisation that was brought to my attention at my surgery last Friday. I have to deal with many cases involving companies taking over electricity and gas supply on a questionable basis. A lady came to see me because a competitor company had taken over her supply. She

had been asked whether she wanted it and had said no, but the company had given her the gas none the less. When she got the bill and protested, saying that she did not want the gas and had not ordered it, the company apologised profusely but said that the deadline for cancelling the order had been passed. She said that she had spent the previous two months trying to ring its offices but the phone was always off the hook and no one answered; the company said that the law was the law and that she had to pay because she had not cancelled within the two-month period. I thought that that was perhaps just bad luck—such things happen—but I then had two identical cases involving the same company in the same area. One does not need to be a statistical genius to see statistical significance in that trend and perhaps the basis for a case.

Nigel Waterson (Conservative, Eastbourne)

Maybe we should form our own little interest group on that issue. I have had similar cases in my constituency. I have finally got to the root of the problem: people who are going around trying to peddle the change are working on an incentive basis. There have been cases of requests being falsified.

Vincent Cable (Liberal Democrat, Twickenham)

The hon. Gentleman provides a common-sense explanation. The abuse that I am describing may not qualify for action under the powers, but I am pointing out that a small sample can provide the consumer associations with the evidence that they need to establish that abuse is taking place.

Ken Purchase (Labour/Co-operative, Wolverhampton North East)

One of the big scandals is what the City likes to call insurance mis-selling; I thought that it was fraud. The surgery case that the hon. Gentleman described—I, and probably all hon. Members, have had to deal with similar cases in my surgery—is not mis-selling, but fraud. The law can and should deal with fraud, including insurance scams.

Vincent Cable (Liberal Democrat, Twickenham)

Indeed, I think the same way, but there have been massive mis-selling scandals—

Ken Purchase (Labour/Co-operative, Wolverhampton North East)

Fraud, it is called.

Vincent Cable (Liberal Democrat, Twickenham)

Whether fraudulent or not, there have been many cases of sales of pensions and endowments where people were operating on such a scale that the Government could intervene on behalf of the consumer. Many of the cases with which we are dealing are small-scale, involving a local or regional company, and can be taken up by a specialised advocacy consumer group. The legislation should provide sufficient flexibility to allow that.

Melanie Johnson (Labour, Welwyn Hatfield)

First, it is important for hon. Members to recognise and bear in mind that all these provisions relate to named individuals. Those are the terms in which they are put. Consumer group claims about named individuals are an important part of the strategy to encourage harmed parties to claim redress when damaged by anti-competitive activity. Group claims make it more affordable for the average consumer to gain redress in those cases where a breach of competition laws has already been established. That is another point to bear in mind.

Raising the number required to participate in a group claim merely puts barriers in the way of consumers who are legitimately trying to gain recompense for damage incurred as a result of activities that have already been found to breach the competition law. Some hon. Members have illustrated aspects of that point. Indeed, I am getting a little concerned that I may get a load of additional casework from members of the Committee as we share information around this afternoon.

In addition to the useful points that hon. Members have made about some of the scams and problems that they have identified, there is the point that for various reasons some individuals who will have been affected by something may not want to be part of a named action of this kind. There might be sensitive issues where people felt embarrassed to be named in this way. The numbers will not necessarily relate to the numbers of individuals affected. I guess that the draftsman picked two because it was the minimum needed to establish that it was group rather than an individual. To set a number would be artificially to pick a figure and could hinder actions.

Mark Field (Conservative, Cities of London and Westminster)

I appreciate that any number will be arbitrary, but in various areas of life, be it nomination papers for parliamentary or council elections or petitions to go to local councils, a certain number is often needed. To have simply two for such an important class action seems rather low. I accept that even if one had a dozen or 50 names there would be the risk—although surely a lesser risk—of a vexatious claim by a small group of people who just wished to cause difficulties and managed to get a specified consumer body on side to promote their claim. Two seems far too low a number.

Melanie Johnson (Labour, Welwyn Hatfield)

Again, I remind hon. Members that the issue of damages arises only in cases that have already gone through the process and have come to a conclusion or have gone through an appeal and survived. Groups cannot bring things forward. The CAT will have the power to throw out claims with no reasonable grounds or that appear vexatious, but such claims would be as unlikely as vexatious super complaints. There will be a similar process of designation by criteria, on which we will consult, to designate groups to make damages claims under the clause. Again, organisations will be considered carefully before they are given that status. When they have that status there will be a huge obligation on them to act sensibly. At the end of the day, the tribunal itself has powers to throw out claims. It is superfluous to put a lower limit on the number that is needed for a claim because we could unwittingly rule out a particularly valuable claim that was being brought on behalf of, for example, 45 named individuals. That would seem very unfortunate.

Vincent Cable (Liberal Democrat, Twickenham)

Is it not the case that not only is there protection against vexatious claims by consumer organisations, but they have no incentive to make them? If the citizens advice bureaux were to use their scarce legal and manpower resources to pursue frivolous cases, they would inflict considerable costs on themselves. As CABs are cost-constrained bodies constantly seeking money from local councils, why

would they fritter away their resources on vexatious cases?

Melanie Johnson (Labour, Welwyn Hatfield)

I entirely agree with the hon. Gentleman. It goes to the heart of the matter that such a case will already have been proven on behalf of consumers when there has been a problem with the market; it will have gone through the process. Under the conditions I have stated, an additional claim for damages would be highly unlikely to be other than a serious claim, with a strong chance of succeeding, for the reasons that the hon. Gentleman gave. I therefore urge the Committee to resist the amendment.

Nigel Waterson (Conservative, Eastbourne)

I will not resist the Minister's urging. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Melanie Johnson (Labour, Welwyn Hatfield)

I do not have a great deal to add, but I appreciate that hon. Members want a further debate. I shall therefore outline our view of the clause.

The clause was drafted to give consumer groups the opportunity to bring forward the sort of complaints that they might want to make.

The group representative claims can only be made before the CAT and, as in the case of other damages, claims brought before the CAT will be possible only when a breach of competition law has already been established. When the full appeals process relating to the relevant decision has been exhausted, organisations will be able to bring the claim, provided that the consumers concerned have given their consent.

Organisations will have to apply specifically for designation; there will be criteria, and a list of specified bodies will be contained in a statutory instrument made by the Secretary of State and subject to the negative resolution procedures of the House. Consumer group claims will make it more affordable for the average consumer to gain redress. Those harmed by anti-competitive activity will be often harmed to an extent that, although significant for the individual, would be difficult for people to take on themselves and would not necessarily justify the cost of a damages claim. In future, such consumers will be able to group together to claim the compensation that is rightfully theirs.

Nigel Waterson (Conservative, Eastbourne)

The clause cries out for a stand part debate, for reasons that I have already mentioned. It is a massive departure for the English legal system.

I said on Second Reading that the Bill had the Chancellor's fingerprints all over it and the clause is a good example. He seems to have acquired from his young days a superficial love of many things American, without fully understanding that what makes the American economy work is that people like him do not interfere in it too much. If we are not careful, we will be in ''Erin Brockovich'' territory. It is a very good film.

Ken Purchase (Labour/Co-operative, Wolverhampton North East)

Excellent.

Nigel Waterson (Conservative, Eastbourne)

Yes. However, the systems are quite different. There is a superficial similarity in the

common law system and the legal language but that is where the similarities end. Things are very different in America if one is seeking redress. There is no concept of legal aid as we know it, although the situation is rapidly being harmonised by our Government. In the most unlikely cases, juries take decisions not just on liability, but on the quantum of damages and come up with some astronomical figures. In the United States, there is the highly developed system of the contingency fee, which, I regret, we have begun to import. Lawyers often take a high percentage of the damages ultimately recovered. People have access, whether in consumer or other sectors, to different mechanisms for justice.

The Library brief on the clause is particularly helpful. It recalls the Competition White Paper in which the Government were in favour of representative claims

''in cases where although there might be a large number of affected consumers each would have only a fairly small individual loss.''

The original thinking was that consumers had a right to some sort of claim, but because their individual loss was relatively small, they had no real incentive to pursue it. Hence the idea in the White Paper of banding together and allowing representative organisations such as the NCC or the sectoral consumer panels in the utilities to bring cases on behalf of consumers.

A potential problem in the application of damages was, however, recognised. As the Library brief says:

''The White Paper suggested either holding an award in trust and allowing claimants to make an application to the trust for their share, or using the award to benefit the affected class of claimant indirectly by using it for purposes which benefit consumers in that market (such as consumer information or community facilities).''

It is a benign version of the contingency system whereby the matter is pursued on behalf of consumers and the moneys obtained by way of damages are used on behalf of consumers, but not just the group involved in the particular case. To use a wonderful civil service term in the briefing, ''mixed responses'' were made to these suggestions, and

''the Government decided that representative claims can only be brought on behalf of named (as distinct to identifiable) consumers''.

Hence we have the clause, the references to ''two or more individuals'' and so forth. The idea is that designated bodies bring claims on individuals' behalf, but not through the ordinary court system—that possibility is excluded, though the Under-Secretary will correct me if I am wrong—and only on behalf of consumers against businesses.

Understandably—it is a relatively novel area—the provision has provoked some worries among the business community, particularly the CBI. I quote from its parliamentary brief:

''In our view, allowing consumer groups the right to bring actions for damages is one of the most ill-conceived and potentially damaging proposals in the entire Bill. Overall, the precedent of class actions in the USA is a very disturbing one and should be avoided here at all costs. The task of consumer organisations should be to bring suspected anti-competitive practices to the attention of the OFT, not to bring proceedings themselves, which would effectively turn such bodies into prosecuting authorities.''

That strong language from the prime business organisation in the country deserves the attention of the Committee, even if hon. Members believe that the CBI is overstating the potential problem. I referred to class actions in the USA and I recall a good film called ''Class Action'' in which Gene Hackman starred as the lawyer and an action was brought by many people affected by a dangerously malfunctioning vehicle. Class actions occur in this country, but nothing like on the scale in the USA.

The legal professions should focus more on the massive implications of that change in English law. For all I know, there may be a similar procedure in Scots law. If such a procedure exists in the civil system, we need to know how, and if, it works.

The CBI continues:

''allowing such actions would give consumer bodies huge powers without any countervailing obligations, and could provide a huge incentive on them to pursue disruptive litigation regardless of the merits of their particular case.''

I take the view that has been expressed by other hon. Members including, most recently, the hon. Member for Twickenham (Dr. Cable), that the bodies that the Secretary of State is most likely to designate would not pursue unmeritorious claims, or pursue claims irresponsibly. However, that concern is exercising business and industry.

The CBI also expresses concern about identifying which organisations will be able to perform such an important role, although it is possible that it will become one of the rarely used powers on the statute book. I sometimes think that much of what we discuss in Committee ends up in that limbo. Equally, a whole range of consumer organisations may grasp it with enthusiasm.

The CBI is also concerned about damages, which I will briefly discuss without getting into too complex a legal discussion. Clauses 16 and 17 relate to damages, but it is easier to deal with the matter in one fell swoop. Clause 16 makes it clear that:

''the same principles would be applied by a court in awarding damages in tort'',

or delict in Scotland, which I assume is similar.

How does the Under-Secretary envisage the damages being calculated? Perhaps she can write to me if she does not have all the facts at her fingertips. Damages are a discrete claim, and one can draw analogies from the tort of interfering with business relations, which tends to be based on loss of business profits. There are often difficulties in English law in arriving at what is recoverable and what is not, as the loss is generally consequential. That may be a useful analogy.

As I said, that sort of loss is often inferred in the tort of inducement of mutual contract, according to MacGregor on damages, which is the lawyers' bible on the subject. Cases such as Exchange Telegraph Co. v. Gregory and Co. in 1896, Goldsoll v. Goldman in 1914, and Brents Brewery Co. v. Luke Hogan in 1945 established the broad basis on which damages are arrived at, and which damages are recoverable. My

days as a law student remind me that there are all sorts of issues in tort about foreseeability and remoteness; concepts about which lawyers are apt to argue when they are students or in the House of Lords.

It would be useful to me and, I hope, to the Committee if the Under-Secretary gave us some idea of how the calculation of damages would be approached in such cases. That might also reassure the CBI and those whom they represent, not least because it will be difficult to make the direct link between a large group of consumers, on whose behalf an action is being taken, and the losses to be claimed from and paid by the relevant company or organisation. I do not want to rain on the Under-Secretary's parade, because this is a big step forward from the consumers' point of view. I will quote the Consumers Association briefing for our Second Reading debate, which said:

''We welcome the decision to allow specified bodies to act on behalf of consumers who have suffered harm as a result of anti-competitive behaviour . . . Our only disappointment is that the Government did not take the opportunity to introduce legislation to allow representative actions on behalf of consumers who have been harmed by rogue traders. It appears anomalous that consumers can be assisted with redress against price fixers but not against a trader who has misled them.''

The second part of that quotation is perhaps more a debate for another day, but it points out the pressure that the procedure will bring. Once it is established in this context, how long will it take before there is intense pressure on the Government of the day to extend the measure more widely? We would then be firmly into the world of regular class actions. Some Members might wonder what is wrong with that. The answer in principle is nothing much, as long as we go into it with open eyes and know the effect that it will have on our existing legal remedies and system. We must understand how that will work in practice, and how claims will be approached and damages calculated and allocated. It is useful to have a stand part debate on such an important clause. I hope that other hon. Members agree.

Vincent Cable (Liberal Democrat, Twickenham)

I wholly agree with the hon. Member for Eastbourne that we need to have a wide-ranging discussion about the introduction of an important principle. Like him, I was struck by the strength of language and feeling in the CBI submission. I do not routinely disregard what the CBI says, as much of it is sensible. Indeed, I happen to agree with a lot of what it said this morning about the revenue-raising part of the Budget. However, I find it difficult to understand why it has been so wound up. I want to comment on the hon. Gentleman's contribution, too. He spoke moderately and raised the right questions, but came to conclusions that were, if not necessarily wrong, different from mine.

We must recognise the importance of consumer advocacy as a principle to be enshrined in the law. It is a fact of life that the people who are most likely to be exploited as consumers, because they are old, ill, infirm, poorly educated or lacking in literacy skills—sadly true of many adults—are those who are least able to pursue an action on their own. That is why we need advocates and one of the important reasons why the consumer movement exists.

Mark Field (Conservative, Cities of London and Westminster)

I appreciate where the hon. Gentleman is coming from, but does he not appreciate that while consumer groups exist as advocates, under the terms of the clauses that we have already discussed, the idea is that it is the OFT that should take cases further forward? The great concern, which was espoused by my hon. Friend the Member for Eastbourne, is that we may find ourselves with super consumer groups, undoubtedly with strong media links, that effectively work as judge and jury, rather than by putting their evidence forward to the OFT.

Vincent Cable (Liberal Democrat, Twickenham)

That is a good question. The hon. Gentleman asked why consumer groups should not stop at simply being advocates and leave cases to the OFT, and there are certain reasons why it would be inadequate to leave things as they are. One is the problem of litigation, about which the hon. Member for Eastbourne made some helpful comments. It is extremely difficult—the present Government have a lot to answer for in this regard—for people of modest means in vulnerable circumstances to get legal help. Under the capital rules of the Lord Chancellor, there is probably not one single owner-occupier in my constituency who would be able to achieve legal aid, because of the nature of property prices. The only way that such people could possibly get legal help is by visiting an advocacy group such as the citizens advice bureaux or the Consumers Association, which have in-house lawyers who can take cases up on their behalf.

The work involves going beyond the advocacy stage to working alongside lawyers, so the question is why the Consumers Association should not stop at only preparing a brief and then handing it to the OFT. The answer has probably to do with scale. The OFT is a national body. It will be a kind of quango, presumably sitting in London. I suspect that many issues that consumers and consumer groups want to pursue will be local and of a small scale. There may be an answer to that problem, but I suspect that there is a gap in the scale on which people might wish to pursue actions. Consumer organisations are probably much better at bringing both difficult test cases and small cases.

Jonathan Djanogly (Conservative, Huntingdon)

That is exactly the point. The scale will be different. We are talking not about super complaints or small consumer-related issues, but about article 81 and 82 prohibitions. Is it not the case that individuals will simply be used for other people's purposes?

Vincent Cable (Liberal Democrat, Twickenham)

That may be the case, which is why I shall raise two useful points that I picked up from the hon. Member for Eastbourne. First, there is an anomaly, whereby the powers appear to exist for big complaints, but not for rogue traders. Perhaps we can eliminate that as we go through the Bill.

The second consideration, which lies behind the question from the hon. Member for Huntingdon, is the motivation of the people who bring the action. We have referred to that issue several times in the discussion on the amendments and in this debate. How do we differentiate between disinterested bodies such as the citizens advice bureaux and the Consumers Association, and opportunistic lawyers who pursue

no-win, no-fee cases? I genuinely do not know how that distinction will be made after the Bill is enacted and how there will be a disciplined procedure for identifying those consumer associations that will quite properly bring actions on behalf of our constituents, as compared with those whose motivation is wholly different and less disinterested.

My final and major point is that lying behind the CBI's concern is a view of the world that I do not recognise. The picture is of poor big business cowering in the face of all the consumer pressure groups. However, that does not tie in with reality. In many markets, the balance of power is very different. I shall give one example, which relates to the intervention by the hon. Member for Wolverhampton, North-East. Many hon. Members, probably including some in this Room, and many clever people in the legal profession have been victims of mis-selling by Equitable Life. Indeed, in some cases, the most sophisticated people in the community have been victims of the abuse of mis-selling.

The balance of power in the relationship between consumer and producer is very often in the hands of the producer when it comes to sophisticated products with a lot of small print attached to them. However, the balance of the argument must be shifted in favour of consumer protection, which is why my instinct is to support the clause as it is.

Mark Field (Conservative, Cities of London and Westminster)

Following the earlier comments by my hon. Friend the Member for Eastbourne, I am glad to be joining the all-party group on film. He has made many of the points that Opposition Members wished to make. We are concerned about aspects of the clause and we are interested to hear what the Under-Secretary has to say.

I am sceptical about the power of many large lobby groups. My great concern is that consumer groups will turn from advocate groups and a voice for those with very little voice, as the hon. Member for Twickenham said, into part and parcel of the legislative process and little more than prosecuting authorities. We should not be naïve about the way forward. It is with great regret that one considers many other areas of public life. We need only look across the Atlantic at the trends there 20 years ago to discern how they will develop here. Class actions are a retrograde step. We should look at all the television advertisements for Claims Direct and other organisations telling people that if there is someone to blame, they have a claim. We will see a rapid unwinding of ethics in many ways if class actions come into play.

I am concerned that these designated consumer bodies will have great power. One recalls the phrase that Baldwin took from Kipling about power without any responsibility. Clearly there will be great media opportunities. Class actions have gone into a high-profile media arena. It is all too easy to see how the media can be whipped up into something of frenzy, particularly over certain campaigns, such as those where a little granny has had some difficulty. The consumer groups will no doubt get their public relations departments to do their best to ensure that their claims are seen in that light. We are being naïve. As my hon. Friend the Member for Eastbourne rightly

said, we must go into this with our eyes open as to what the medium-term consequences may be.

Jonathan Djanogly (Conservative, Huntingdon)

The clause is ill conceived and I do not see the point of it. If the loss is so small that the action is not worthwhile, it is a matter for Government to decide whether, taking the infringements as a whole, it would be in the public interest for a claim to go ahead. Many hon. Members have talked about this matter as though we were talking about consumer-type actions. We are not. We are talking about competition-type actions, where sophistication on the part of consumers cannot be assumed. We are heading to a point where individuals' names will be used for little gain for themselves; they will merely suffer disturbance.

That will not earn the Government a reputation as the godfathers of ambulance chasers in the country; that will come from the super complaints clauses. We will be setting up a platform for consumer bodies to flex their muscles on the basis of what they consider to be the overall harm and the public interest. I am not convinced that they are the right institutions to decide what represents the public interest. That is a matter for the Government.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

The consumer bodies can certainly flex their muscles in that way, but they will succeed only if they have a case that the tribunal says has merits. There are two alternatives to class actions. Which is preferable; that people who have a claim do not pursue it or that we have individual actions pursued singly?

Jonathan Djanogly (Conservative, Huntingdon)

Individuals can join together in a claim in the courts. That is a separate issue.

Nigel Waterson (Conservative, Eastbourne)

Has my hon. Friend considered a third option? Personal injury lawyers in America say that few of their cases ever get to court. They make their money by settling cases out of court and taking their 40 per cent. or 60 per cent. It is in the interest of big business to settle claims, whatever their merits, simply because of the non-recoverability of the costs. But that is another matter. My hon. Friend should consider the possibility of that becoming a practice in this country too.

Jonathan Djanogly (Conservative, Huntingdon)

My hon. Friend is absolutely right. We shall increasingly see consumer lobbies themselves lobbied by lobbying organisations, which will create a whole new industry. Questions will have to be asked about who funds it all. It will come back to businesses; possibly even competitors of the business against which the claims were initially brought. If we are not careful, such circularity might work against competition.

Melanie Johnson (Labour, Welwyn Hatfield)

On a point of information, Mr. Conway. A letter being circulated to you, to Mr. Beard and to all members of the Committee is now available on the Table. It explains an amendment to part 8 and a consequential amendment and it also provides the lists requested earlier about domestic and community infringements under clause 203. The information is available in good time for future debate.

To return to matters in hand, I was asked why we were going down this particular route. I hope that I have already explained it to some extent, but I highlight what the hon. Member for Twickenham said about the importance of advocacy generally and its successful use on behalf of consumers.

The actions in the clause are not exactly the same as US class actions. One of the important differences is that class actions are allowed in the US on behalf of an amorphous and unnamed group of individuals, but consumer claims for damages will be allowed here only on behalf of named, identified consumers—a significant difference—and only with their consent. US class actions are brought in the ordinary courts, but here they will be brought before the CAT only following a decision of the OFT or the European Commission that established a breach of competition law.

These are clearly targeted measures, which exist to help the victims of anti-competitive behaviour. As several hon. Members have explained, it can be difficult for victims to bring effective damages action themselves, so we have every reason to put the new measure in place. It will strengthen the hand of consumers who have been damaged in the ways described.

In response to Conservative Members' other comments, I am as puzzled as the hon. Member for Twickenham about the strength of the CBI's feelings. Its concerns are greatly overstated. Damages will be calculated in line with principles used in the courts. The competition and related expertise of members of the CAT will enable them to assess damage caused by anti-competitive activity much more effectively than other courts. Nine members already have significant legal experience and the chairman has already presided over courts at high level. The Bill allows the appointment of members with competition or any other relevant legal expertise, so we expect the tribunals to be appropriately provided for in expertise terms. However, the basis of decisions about the appropriate level of damages will not fall outside the principles used in other courts.

In the light of what I have said about the designation process and my further reassurance that claims cannot be brought by bodies engaged in ambulance chasing or other vexatious activity, but only at the end of process through which damage to consumers will have been confirmed, I hope that Opposition Members will understand why the clause should stand part of the Bill.

Question put and agreed to.

Clause 17 ordered to stand part of the Bill.

Clause 18 - Findings of infringements

Nigel Waterson (Conservative, Eastbourne)

I beg to move amendment No. 60, in page 9, leave out line 33.

Derek Conway (Conservative, Old Bexley and Sidcup)

With this it will be convenient to take amendment No. 61, in page 9, leave out line 34.

Nigel Waterson (Conservative, Eastbourne)

As a result of the European Commission's plans to decentralise enforcement of the EU competition rules, the OFT will be entitled to apply articles 81(1) and 82 of the treaty. As a matter of law—I am open to correction by the Minister—that is not currently the case. A similar argument follows for amendment No. 61. The OFT is not currently allowed to apply article 82. That may change in future, but it seems previous to change the position in the clause.

Melanie Johnson (Labour, Welwyn Hatfield)

The amendments seek to prevent decisions relating to breaches of articles 81(1) and 82 of the EU treaty from being binding on the courts for the purpose of damages claims. However, decisions relating to breaches of the chapter 1 and chapter 2 prohibitions of the Competition Act 1998 would remain binding for the purposes of such claims. The OFT has powers to apply articles 81 and 82 in some areas—for example, aviation and maritime transport—under the EC Competition Law (Articles 84 and 85) Enforcement Regulations 2001.

The amendments would create an unbalanced system in relation to damages claims, whereby some findings of infringements are binding but others are not. The streamlined court procedure created by the clause would not be available to consumers harmed by anti-competitive behaviour where the decision establishing the breach had been taken under EC competition law. That could increase the costs of such consumers bringing a claim for damages compared with the costs of those bringing a similar claim in respect of a breach of UK competition law. Two sets of consumers harmed by similar illegal activity would therefore be subject to different procedures in the courts—one more lengthy and hence more costly than the other. I am sure that that is not what the hon. Member for Eastbourne wants and it is not the fair and transparent system that we would all want. Whatever the thinking of the hon. Member for Eastbourne on the amendments, I hope that I have persuaded him that they should be withdrawn.

Nigel Waterson (Conservative, Eastbourne)

I am happy to accept what the Minister says. I will have another look at the matter, but at the moment I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Jonathan Djanogly (Conservative, Huntingdon)

I beg to move amendment No. 62, in page 10, line 20, at end insert—

'( ) In section 46(3) of the 1998 Act, there is inserted after (h)—

''(i) to issue a notice under section 26 requiring the production of specified documents or information,

(j) to investigate premises without a warrant under section 27,

(k) to investigate premises with a warrant under section 28,

(l) not to investigate a complaint under Chapter I or II,

(m) not to grant interim measures under section 35.''.'.

Our discussions on the amendments this afternoon have related to the role of the Competition Appeal Tribunal. This amendment also does so, as was suggested by the joint working party of the Bar and the Law Society on competition law. The proposal is that the issues that could involve appeals to the CAT should be increased to include those listed in the

amendment. The items are individually contained in other pieces of legislation and, the Committee will be glad to hear, I do not propose to go through them. However, hon. Members should note that in none of them is currently possible to appeal to what is currently the Competition Commission appeal tribunal—it will become the CAT—and each has a significant impact on the party concerned and can be challenged only by way of judicial review.

The Government seem to be working from the position that competition matters should be dealt with by institutions that are used to dealing with them. Indeed, that is the purpose of the CAT. Therefore, I commend the amendment, with the intention that the listed decisions should go to the CAT rather than the courts.

Melanie Johnson (Labour, Welwyn Hatfield)

As the hon. Gentleman said, the amendment would add to the list of decisions by the OFT that could involve appeal to the Competition Appeal Tribunal under the Competition Act 1998. Section 46 of that Act lists a number of decisions taken by the OFT that can be the subject of a full appeal to the tribunal. Further decisions of the OFT may be added by order under section 46(3) and, in the case of third-party appeals, under section 47(1). With one exception, we do not propose to add any new category of appealable decision, and I shall explain why.

The exception is the category covered by paragraph (m) of the amendment, which the amendment would add to section 46(3). I agree that decisions not to grant interim measures should be appealable. We stated our intention to implement that change in the July White Paper, and I am happy to confirm that we will introduce the relevant secondary legislation as soon as is practicable. However, it is unnecessary to make the addition in the Bill.

I am not minded to take action on the other proposals in the amendment. The list of appealable decisions in section 46(3) consists of substantive decisions by the OFT, requiring an analysis of the merits of the case and, with only one exception, taken at the conclusion of a procedure or investigation. The sole exception is the current right to appeal against interim measures taken under section 35, which as I said we are prepared to extend by order to include decisions not to grant interim measures. It is neither appropriate nor necessary to provide for a full right of appeal on any intermediate, investigatory step in the OFT's proceedings, and the other four categories include issues that are still in mid-process. I remind the Committee that parties are not without an avenue of judicial redress in any of the circumstances stipulated in the amendment. The option of applying for judicial review in the High Court will always be available, and in that case the court will have full powers to impose remedies such as injunctions.

With that explanation of the element that we are picking up in the amendment and the reasons why we do not want to pick up the other listed items, I hope that the hon. Gentleman will feel able to withdraw his amendment.

Jonathan Djanogly (Conservative, Huntingdon)

I thank the Under-Secretary for that explanation, although I am not much wiser about why

the listed examples will not be included at this stage. She mentioned that judicial review is possible, but I thought that the idea was to move towards a speedier and more cost-effective way of appealing decisions. I do not understand why those issues cannot be included for the CAT to review.

Melanie Johnson (Labour, Welwyn Hatfield)

My understanding is that there is a difference in the four items. There is no completed process, so no decision is taken, as such. The point made under proposed paragraph (m) warrants being regarded as in a different category, which is why I make the distinction. Hon. Members may rest assured that we intend to take up that point and we shall add it to the list.

Jonathan Djanogly (Conservative, Huntingdon)

I am still not sure why the Government do not want the CAT to act in relation to interim issues, but I hear what the Minister says. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 18 ordered to stand part of the Bill.

Clause 179 - Cartel offence

Vincent Cable (Liberal Democrat, Twickenham)

I beg to move amendment No. 77, in page 130, line 28, leave out 'dishonestly' and insert 'knowingly or recklessly'.

There is a substantial break in the proceedings, as we jump forward in the Bill to a later clause. This may be one clause on which it would be appropriate to have an extended stand part discussion. The clause introduces, for the first time, the principles of the criminalisation of cartels and prison sentences, which clearly needs extended discussion.

My amendment relates to a technical drafting point. I am not a lawyer, as was painfully apparent from one of my interventions yesterday, but I am advised that the terminology—specifically, the use of the word ''dishonesty''—could be improved on.

There are two points on which the Minister may be able to advise me. First, in comparable offences, the phrase ''knowingly or recklessly'' would normally be employed. It is not clear why the word ''dishonestly'' applies in this case. The second point is a matter of common sense, rather than a legal point. It is possible to envisage circumstances in which a group of people collude to create a criminal cartel whose motives may not be dishonest at all. People might want to subscribe to a cartel arrangement for many reasons: from weakness of character, because they are acting under pressure from a superior in their company, or from personal ambition disconnected from personal dishonesty. Many motives are possible, so the conventional phrase ''knowingly or recklessly'' better captures the spirit of what the Government are trying to achieve.

I hope to be persuaded that there are good reasons for using the word ''dishonesty'' in this context. If the amendment were accepted, consequential changes would need to be made, including to some of the other amendments to which I put my name. This is a

probing amendment related to the use of legal language.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

I associate myself with the words of my hon. Friend the Member for Twickenham. He does himself a disservice by saying that this is a minor and technical amendment, as it is a significant one in the context of a cartel offence.

On reading the clause, it seems to me that politicians won the battle against the lawyers on this occasion. As a lawyer turned politician, I am familiar with that dichotomy. A great deal of political force lies behind the idea of having to show dishonesty, whereas, as my hon. Friend said, the more regular or expected terminology would be something like ''knowingly or recklessly''.

Does the terminology really matter? I suggest that it does. Lawyers will enforce, judge and interpret the provision, and if one looks at it from a lawyer's perspective, one sees that there will be problems with proving dishonesty. Such a charge brings with it the need to establish a much more complex mens rea, or a guilty frame of mind.

If I were defending a client, I would say that it was not enough simply to show that he knew what he was doing and that the prosecution had to prove that he was acting dishonestly. I would say that it was possible to know something without there being dishonest intent. It is therefore possible to argue that the mischief at which we are striking will not be rectified.

As the provision stands, there will be problems with enforcement. As I said on Second Reading, the success or otherwise of the offence will be assessed according to the number of successful prosecutions. However, the Government risk weakening the offence by insisting on dishonesty. The phrase ''knowingly or recklessly'' is much more in line with other offences, and I commend it to the Minister for further consideration.

Mark Field (Conservative, Cities of London and Westminster)

Unless the Minister has other plans, I find myself in the unusual situation of being on the Government's side. I strongly feel that reference should be made to a dishonest frame of mind. I would be very reluctant for the clause and other provisions in effect to criminalise individuals simply on the basis of reckless behaviour. That would be a dangerous step for the criminal law to take.

I shall no doubt speak at length about one or two of the other clauses that relate to this matter, because I have concerns about the idea of prison sentences and criminalisation. We at least need proof of dishonest intent, and recklessness is far too lax a term. I appreciate the comments made by both Liberal Democrat Members about the usual terminology, but such terminology often applies to civil, not fully fledged criminal offences. I therefore sincerely hope that the Minister will resist the amendment.

Ken Purchase (Labour/Co-operative, Wolverhampton North East)

I want to probe the matter a little further. Historically, there is no question but that cartels have acted against the interests of ordinary consumers. It is therefore important that get the law right, and it is right and proper to probe the matter.

I am not sure how to distinguish between dishonesty and the phrase ''knowingly and recklessly'', as applied to the conditions in (a) to (f). Are they the same? If so, there is no point substituting the phrase ''knowingly or recklessly''.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

I fear that we are in danger of counting angels dancing on the head of a pin. However, I suggest that if one can prove (a) to (f), one has something pretty close to dishonesty, although not necessarily. In those circumstances, the phrase ''knowingly or recklessly'' would be preferable.

Ken Purchase (Labour/Co-operative, Wolverhampton North East)

I am happy to seek advice from any quarter on this matter, because I think that we are dancing on the head of a pin. I am entirely unsure about the difference between the terms, and I am anxious that we get the terminology right. Clearly, (a) to (f) provide the grounds on which action will follow, but to make that reality, we must show people's intention. You used the word ''recklessly'', which could mean unintentionally. Do we need to prove that reckless behaviour has contributed to dishonesty? If that is the case, we really need an explanation from the Under-Secretary.

Alistair Carmichael (Liberal Democrat, Orkney and Shetland)

If you are able to prove (a) to (f), why is it necessary to prove that it was done dishonestly? The issue of dishonesty is an extra burden on the prosecutor.

Derek Conway (Conservative, Old Bexley and Sidcup)

Order. Before the hon. Gentleman replies, I should say that this afternoon the Committee seems to be slipping into terminology that is not consistent with procedure in the House. The hon. Gentleman may think that he is inviting Mr. Purchase to respond to something, but by using the word ''you'', he is inviting me to do so. I, of course, do not comment on the merits of the Bill.

Ken Purchase (Labour/Co-operative, Wolverhampton North East)

I do not want to push this much further. I am anxious to hear what my hon. Friend the Under-Secretary has to say. It is important for the Committee to understand whether, if there is a substantial difference between the two terms, we can adopt one or both or leave the measure unamended and be happy that, in terms of paragraphs (a) to (f), proving dishonesty is no more difficult than proving that an act was done knowingly or recklessly.

The rest of the debate is in Hansard.