Clause 56 - Specified considerations
Enterprise Bill
6:30 pm
Mr Andrew Lansley (South Cambridgeshire, Conservative)
Some of the matters that we have discussed are relevant here, but I do not want to go over them again. Having examined the cart in detail, we come to the horse. The question is to which areas the decision-making attributes should be applied. I have established something that I had not previously fully understood—the Secretary of State is proposing a special decision-making procedure, to be applied to national security in the first instance. Under that procedure, if the Secretary of State believes that there is a national security consideration, she can issue an intervention notice, enabling that consideration to be taken into account alongside the competition grounds.
The Office of Fair Trading may declare that there are no competition grounds and may even advise that no reference to the Competition Commission be made on the public interest grounds raised in the intervention notice. However, the Secretary of State can go ahead with the reference and can also, as I understand it, contradict a report from the Competition Commission that states that there are no competition grounds and no adverse effect on the public interest. The Secretary of State can maintain that there is such an effect and that there must therefore be a remedy. As far as I can see from the rest of the Bill, she can seek her own remedy rather than being constrained to follow any remedy set out by the Competition Commission.
We are contemplating a merger regime quite different from the provisions under the Fair Trading Act, which this Bill is designed to replace. Under those provisions, if the Secretary of State thought that there was a public interest, he or she could force a reference to be made even if the OFT advised against it, but was constrained by the decision of the Monopolies and Mergers Commission. If the MMC found that there was no adverse public interest, that was the end of the matter.
The new regime is quite different. Perhaps I am particularly slow, but I had thought that the Secretary of State was simply proposing to leave the public interest criterion in relation to national security in the legislation, so that it would apply in much the same way—that she was merely proposing not to narrow the test to competition.
However, we are dealing with a different approach to the public interest. It may well be appropriate to apply this different test to national security, because the Secretary of State may well take a different view from the Office of Fair Trading and be right to do so. As my hon. Friend the Member for Huntingdon said, the various economically or business-trained members of the Competition Commission may not appreciate considerations of national security to the extent that Ministers have to.
Ministers have ultimate responsibility for national security, so they may well entirely substitute their view for that of the competition authorities, but in terms of any national interest other than that of national security it becomes difficult to justify the Secretary of State's reserve power to intervene and to cause the matter to be investigated by the Competition
Commission. However, the measures go much further. The Bill proposes a power that would allow the Secretary of State not only to cause a reference to be made and an investigation to be undertaken into such a merger, but to substitute his or her view of the public-interest aspects of that investigation for that of the Competition Commission.
We debated an amendment that would have limited the Secretary of State's ability to impose his or her views. In this debate we should recognise that if the Minister is saying that she and her colleagues would not contemplate adding to the power in section 56, it is probably incumbent upon them to contemplate not giving themselves the power to go beyond national security, or, as it is defined in the EC merger regulations, public security. It is an excessive power in relation to any factor other than national security.