Clause 20 - Duty to make references in relation to completed mergers
Enterprise Bill
2:30 pm
Mr Andrew Lansley (South Cambridgeshire, Conservative)
I had been speaking for too long and had only a limited amount left to say, but I want to complete my remarks because I was approaching my denouement.
I had disagreed with the hon. Member for North-East Derbyshire, although I understood why he tabled the amendment. The Minister could give us further explanations about why the Government do not think that there will be continuing difficulties in relation to merger cases that do not easily fall into the jurisdiction of either the United Kingdom or the European Community. Likewise, there are issues concerning the interpretation of competition law under the EC merger regime, which will not necessarily apply to the UK because we apply a different test. That may lead to difficulties, for example if a merger is approved in the United Kingdom but is then felt to be in some way anti-competitive or to abuse a dominant position as a result of the application of EC regime through the Competition Act 1998.
All those questions give rise to a perfectly reasonable presumption, which motivated the Government, not least in the Competition Act 1998, to seek complementarity between the UK competition regime and that which applies in the European Community. I recall that, in section 60, that Act even went to the point of ensuring that any issue that was not otherwise expressly provided for in statute would be interpreted in line with the EC competition regime. I presume that courts in this country continue to believe that that is the case, even in relation to
merger cases, unless there are specific statutory differences.
Therefore, there are good reasons to wonder about the desirability of a dominance test rather than a substantial lessening of competition test. The essence of my argument is to question whether we have the opportunity to employ a different regime in this country from that which necessarily applies under the Community mergers regime. We do; we are not required to have the same regime. If we have that opportunity, and if the Government think that we can get away with it, or perhaps draw the European Commission, under its review of the mergers control regime, further in the direction of a tough regime for a substantial lessening of the competition tests, we should do so. Relative competitiveness–competitive intensity–in the United Kingdom is the essential test.
I was interested to listen to listen to Professor Nicholas Crafts last week talking about Britain's relative economic performance. He said that in previous decades–he referred particularly to the 1960s and 1970s, the tendency in the United Kingdom was to believe that the application of industrial policy would lead to relative gains in productivity. That was found not to be the case. One of the principal reasons for that was that where businesses were not profit-maximising, there was a degree of excessive management control and a lack of accountability to shareholders, making it difficult to achieve competitive intensity through that route, competition policy was far more likely to have an impact upon productivity performance than industrial policy.