Clause 4 - Annual and other reports
Enterprise Bill
12:30 pm
Mr Nigel Waterson (Eastbourne, Conservative)
In the real world, the fact that a company or section of industry was being investigated would come out anyway. It is difficult to keep such matters quiet. I promise the hon. Gentleman that we will come to that matter later, and the potential effect that it would have on share prices will also have to be examined.
There may be scope for movement and we are not in the business of prescribing every last detail. We hope that the people involved will be serious, well qualified and able to sort out their own procedures to a large extent. It may not be necessary to name individual companies, but it is important that people who have dealings or fear that they may have dealings with the OFT can look at how it has approached matters. As the OFT goes on, a growing body of precedent will grow up. The report should also show how the OFT is approaching the slightly dry tasks that we are assigning to them in this legislation. Perhaps above all, the report should show, I hope, a thread of consistency throughout its approach to different situations.
Those are all concerns that have been raised, in particular by the Confederation of British Industry in a briefing. The briefing starts by saying that it warmly welcomes clause 4 but thinks that the Government should go a step further in requiring a detailed summary of the decisions and investigations, as I have suggested. It makes the point that the European Commission's annual competition reports provide useful summaries of recent cases and that that model should be adopted here. It thinks that there is potential for the OFT's reports to be too broad and general in form and therefore not much help to businesses and their advisers. I would rely on the example of the European Commission's competition reports for that purpose. I have never practised in that area of law, but the issue is clearly one that people will study in advising companies about the situations already covered by the Director General of Fair Trading or by the European arrangements.
I envisage the reports being of similar benefit. They should not be the dry, glossy reports that Members of Parliament often receive, which are immediately consigned to the wastepaper bin or to a corner of the
office, never to be seen again. They should be real, living documents that companies, individuals and their legal and other advisers thumb through regularly. The CBI takes the view in its briefing document that a calculation of the costs should be imposed on business by OFT investigations over the preceding year. It states that such investigations
''often impose huge costs and other burdens on business, both in terms of professional fees and also distraction of senior management from their core activities.''
It goes on to point out that that is why the Government are now obliged to produce regulatory impact assessments to look into the likely extra burdens of proposed legislation on business. I fail to see why the OFT should be treated any differently.
In a nutshell, we are saying that the OFT should do its own annual regulatory impact assessment because in the long run that is healthy for its relationship with business and commerce. If the OFT starts out with an antagonistic attitude towards companies or some of the consumer situations in which it will be involved, that will not benefit the consumer, business or the OFT itself.