Excluded Agreements

Orders of the Day — Competition Bill [Lords] – in the House of Commons at 5:10 pm on 8th July 1998.

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Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry 5:10 pm, 8th July 1998

I beg to move amendment No. 2, in page 2, line 42, at end insert 'or—(e) resale price maintenance for over-the-counter medicines'.

Photo of Michael Lord Michael Lord Deputy Speaker (Second Deputy Chairman of Ways and Means)

With this, it will be convenient to discuss new clause 4—Exempted goods—'() The Chapter I prohibition does not apply to an agreement relating to the resale price of goods of a class which are the subject of an order made under section 14 of the Resale Prices Act 1976 (exemption of goods by the court).'.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

I am grateful for this opportunity to speak on amendment No. 2 and comment on the rather good new clause tabled by my hon. Friend the Member for South Cambridgeshire (Mr. Lansley), which directly bears on the same problem.

In many of the debates on the Bill, the Opposition have pointed out that one of its unfortunate consequences—which I trust was unforeseen by those who drafted it—will be the closure of many smaller pharmacies. We have continually argued that the Bill makes it more likely that resale price maintenance will have to go. We have had confirmation of that view and various explanations from Ministers in Committee. Ministers would like the nation to believe that the threat comes from Brussels rather than from their actions and legislation. However, we will seek to show that pharmacies are threatened by the Bill and the Government, as well as by the possible threat from Brussels to which Ministers like to refer.

There are some agreed matters in this debate. It is agreed that, if resale price maintenance is abolished, some pharmacies will close. Indeed, Ministers have suggested that hundreds will close. It is common ground for about 170 Labour Members and for Opposition Members that that would be extremely damaging.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

My hon. Friend asks where all those Labour Members are. It would be good to have them here expressing concern about their local pharmacies. However, the Whip on duty, who is now going through contortions trying to show that he has a sense of humour, has done a good job of ensuring that there will be no dissent and no expression of opinion or strong views by Labour Members in defence of the pharmacies that they know will close.

Photo of Nigel Griffiths Nigel Griffiths Parliamentary Under-Secretary (Competition and Consumer Affairs), Department of Trade and Industry

Perhaps the right hon. Gentleman can tell us why the Community Pharmacy Action Group does not support the amendments.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

I trust that the Minister will restrain his impatience a little, because it will give me great pleasure later in my analysis to take the House through the position of the Community Pharmacy Action Group and its advisers, Lawson Lucas Mendelsohn.

It is agreed that there is a substantial threat of closure, and that it comes from the abolition of resale price maintenance. It is also agreed, I think, that we can go this far in asserting agreement—that some combination of possible Brussels investigation and this legislation will cause the end of resale price maintenance.

The Minister will doubtless say, as he did in Committee, that there is an investigation under the existing system, but he should remember that there have been investigations before. The most recent concluded that the arrangements were in the public interest. If the Bill did not change the law, it would be possible for the retail pharmacies to win their case under existing law and arrangements as they did before, and continue thereafter to benefit from the advantages that resale price maintenance brings them.

It may help the House to remember why RPM is important to pharmacies, and why there are sensible alternatives for customers who rate price above service. This is important, because the typical local or rural pharmacy provides service and advice. That is often expensive. The number of customers may be limited, but they appreciate the whole service—not just the ability to purchase the goods once the right one has been identified. To sustain the considerable costs of this service, there is a system of recommended and maintained prices which enable pharmacies to recoup the costs of providing the full service and advice through a slightly higher margin than would otherwise be the case.

Photo of Mr David Chidgey Mr David Chidgey Shadow Spokesperson (Business, Innovation and Skills), Shadow Spokesperson (Trade and Industry)

Does the right hon. Gentleman agree that retail price maintenance would become insignificant if the professional services provided by pharmacists were properly rewarded? Should not the President of the Board of Trade talk to her Cabinet colleagues about getting the Department of Health to pay properly on time, rather than keeping chemists waiting 90 days to pay bills?

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

The hon. Gentleman makes an excellent suggestion. It is a pity that the President of the Board of Trade is not present to hear that advice. I trust that her Minister of State or the Minister for Competition and Consumer Affairs will pass it on. I do not wish to repeat the allegation made outside this House that she is insignificant. She holds an important office of state, and I hope that she will consider that kind suggestion from her allies in government, the Liberals. I associate the official Opposition with the idea that the NHS should pay its bills on time. That would help the cash flow of many small and larger pharmacies.

Pharmacies need something more than the NHS paying its bills on time. They have traditionally enjoyed the protection of slightly higher prices, which provide them with extra money. That has been found to be in the public interest under the law that the Government are trying to replace.

Photo of Stephen Ladyman Stephen Ladyman Labour, South Thanet

Given the right hon. Gentleman's comments about the presence of my right hon. and Friends and the powerful case that he is making for community pharmacies, has he wondered where the hon. Member for Tunbridge Wells (Mr. Norman) is this afternoon? As the chairman of the Asda supermarket chain, he launched the complaint against resale price maintenance with the restrictive trade practices court. Why is he not here to debate these important matters?

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

It shows my hon. Friend's strong sense of conflict of interest that he does not wish to be here to make the business case that is firmly held by Asda. He knows that the official Opposition strongly disagree on this occasion with Asda, fine company though it is. We will vote in favour of support for retail pharmacies. I am not a spokesman for my hon. Friend the Member for Tunbridge Wells (Mr. Norman). He is wisely not here tonight because he has other important business.

Although the case is now being taken forward by the executive management of Asda and not by my hon. Friend, his absence shows how sensitive he is on this important point. I should have thought that Labour Members would want to give him credit for that, rather than trying to coax him into making a statement that they would doubtless misconstrue against him.

Photo of Stephen Ladyman Stephen Ladyman Labour, South Thanet

I am grateful to the right hon. Gentleman for his continued patience. I understand the conflict of interest that has been created. Does he have any information about which Lobby the hon. Member for Tunbridge Wells will join this evening?

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

I have already made it clear that I do not speak on this occasion for my hon. Friend the Member for Tunbridge Wells. I speak for the Opposition, and I am making our position clear. I suggest that we move on to more weighty matters that relate to the future of many of retail pharmacies. [Laughter.]

Many Labour Members think it is amusing and that the only interesting thing is the position of my my hon. Friend the Member for Tunbridge Wells, who is a fine Member of this House. They should concentrate on what worries their constituents, who are not asking about my hon. Friend's position. They are asking what, if anything, the Government will do to help community pharmacies. Will they tonight, by their inaction and vague statements, sign the death warrant of hundreds of small pharmacies, as I think they will; or will they listen to the urging of the Opposition, and, for a change, do something that might help those businesses?

Photo of Nigel Griffiths Nigel Griffiths Parliamentary Under-Secretary (Competition and Consumer Affairs), Department of Trade and Industry

The right hon. Gentleman promised the House that he would answer the question I put to him: why is the Community Pharmacy Action Group not supporting the amendment? It is because it supports us.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

Life is not that simple. I must again ask the Minister to contain his impatience. His hon. Friend the Member for South Thanet (Dr. Ladyman) has been interrupting on less important matters, and I have been extending to him the courtesy of answering his point. The Minister makes a more important point that is worthy of a longer reply, which I shall give at the right point in my argument; but it is right that I first explain the general position: the threat of closures, the sort of services that the pharmacies offer, and why they are important in local communities.

If someone, even in one of those local communities, thinks that price is far more important than service and the branded medicine, that person can travel to the nearest large supermarket and take advantage of the excellent goods sold in, for example, the supermarket that used to be run by my hon. Friend the Member for Tunbridge Wells. There, and in other, rival and equally competitive, supermarkets—I do not wish to recommend any particular supermarket—can be found cheaper medicines, equivalent to the branded goods, sold on price.

We are not trying to stifle choice in the marketplace, or to prevent people from buying cheap medicines if price is important to them, but we think that, in this unique situation—we do not recommend similar measures for other industries—it is worth preserving the system of RPM that has served local communities so well in the past and could do so in future.

The House will want to know how we propose to achieve that. There are two mechanisms on offer, in amendment No. 2 and in new clause 4. The amendment tabled in my name on behalf of the official Opposition does the job in a straightforward way, providing that, if the competition authorities wished to change their minds on the issue, Ministers would have to come back to the House to amend the legislation.

It is an old technique and a democratic one. I know that such things are going out of fashion with the Government, but I recommend it to the House, as it would ensure that the matter would be under democratic control and properly debated. The amendment provides a lock on the door, unless and until a majority party in future wished to change the arrangements. It works simply, by adding resale price maintenance for over-the-counter medicines to the list of exemptions in clause 3, which sets out the main prohibition regime and exemptions to it.

If the House finds the amendment a little too dramatic, because it would clearly do the job, there is an alternative in the form of new clause 4, standing in the name of my hon. Friend the Member for South Cambridgeshire. If the Government chose to accept that instead of the really strong version, it would enable the Government to continue to exempt those goods which are the subject of an order made under section 14 of the Resale Prices Act 1976". The new clause would preserve the exemption all the time that the court exemption is in existence; and the court would still have to satisfy itself about the particular case. That, too, would receive the blessing of the official Opposition, if that is the best that the Government are prepared to accept in order to get themselves out of the hole of their own making.

Ministers argued in Committee—as doubtless the Minister will argue tonight—that there is no point in taking such action in British law, because Brussels is determined to end the system of RPM, and that we must allow Brussels to have its way. However, instead of leaving it to Brussels to do that, Ministers say that the issue must be examined by the courts here: if the courts find in favour of the current practice, it will go, albeit over some longer period; and if the courts find against it, the courts will impose their own timetable for its removal. It is not much fun for the retail pharmacies fighting the case before the court to know that, either way, they will lose, but there may be some debate about how quickly the system is phased out.

I find it quite extraordinary that the Government take such a view of Brussels as they have done on this subject. In the fine soundbites to which we are often treated, we are told that the Government intend to be influential in Brussels. We are told that, by having made so many concessions to Brussels—on the social chapter and the treaty of Amsterdam, to name but two occasions—they are now in an extremely good position to get all sorts of free gifts back from Brussels.

Therefore, we ask the Minister to put up on this matter, and take a trip to Brussels. So generous am I in this respect that I should be happy to see public expenditure rise by the price of a return air fare to Brussels, if only the Minister could promise me that he would use that trip to insist on a better answer for the British retail pharmacy sector from Brussels.

The Minister must by now have had enough dealings with Brussels to know that, in Brussels, matters are often more in the nature of a negotiation than of a legal construct. Although they have legal form under treaties and court procedures, in practice many matters are settled, not in the normal judicial way as we would understand it, but behind closed doors by bargains between politicians and/or senior officials.

The matter before us is clearly a case in which the Government could use their influence—if they have any—to try to get Brussels to agree that RPM for retail pharmacies in this country is in the public interest, as was found under the previous Government, and that Brussels should recognise that, and not be too crass in its application of competition law.

Photo of Stephen Ladyman Stephen Ladyman Labour, South Thanet

Will the right hon. Gentleman clarify his remarks? Is he telling the House that he would prefer, and that we and our community pharmacies should put our trust in a deal struck behind closed doors with civil servants in Brussels, rather than in a British court, the restrictive practices court, and the current arrangements?

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

No—the hon. Gentleman is being uncharacteristically slow-witted. I have made it clear that I want British parliamentary democracy to settle the issue. As proof that the Government have influence in Brussels—I do not believe they do, but I am always willing to be proved wrong—I want them to go there and tell Brussels to get its tanks off the lawns of our retail pharmacies.

That is a simple proposition, and I am explaining, for the benefit of the Minister, how Brussels works. I am not saying that I approve of that system; I am saying that that is the system, that it is the one within which the Government must work, and that, on this occasion, they should do so in the interests of British democracy—so that we can settle the matter here—and the interests of our constituents, who would clearly like the RPM system to be maintained.

I believe that the Government's influence in Brussels would be greatly strengthened if they accepted either amendment No. 2 or new clause 4—the position would be clearest if the official Opposition's amendment were accepted. They could go to Brussels and say, "That is the will of the whole House of Commons," because not only would they carry with them tonight all the Opposition Members, as far as I know, but they would have all the Government Members' votes, if the Minister asked the Whip to get people to stand on their heads again and vote more in line with their conscience.

The whole House of Commons could be united for once, in defence of a good public service and a good British interest. Surely that would have some sway with those in Brussels when trying to judge both the political mood in this country and how much rope they would have to change our minds for us. Making the amendment would give a strong signal, and I recommend it strongly to the Government.

We know that the United Kingdom authorities are investigating, and I dare say the Minister will say that that cannot be stopped, but there is more chance of that investigation coming to the right conclusion from the pharmacies' point of view if the House clearly expresses its views.

Photo of Nigel Griffiths Nigel Griffiths Parliamentary Under-Secretary (Competition and Consumer Affairs), Department of Trade and Industry

I am not going to argue that that investigation cannot be stopped. I suspect that it could be stopped if the vice-chairman of the Conservative party were persuaded to withdraw the complaint that he lodged on behalf of his company. Will the right hon. Gentleman support me in making such a request?

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

I am suggesting that the complaint could be stopped by changing the law, which is what is on offer this evening. I have no doubt that I would not be able to persuade the Asda company, which has moved on from the days when my hon. Friend the Member for Tunbridge Wells was in sole charge and has new executive management, to drop its complaint. The executive board members would meet and say, no, they want to pursue the complaint, because it is in their business interests so to do.

I do not object to that, because I believe in a free society in which people can pursue their legitimate interests. All I ask is that we know where people are coming from, just as the House asks hon. Members to reveal whether they are coming from a particular position in cases where people should be aware of their interest.

I am saying that, on this occasion, we can change the process if we wish by primary legislation. We could do so tonight and that would send a clear signal to the investigating authorities or it could even overturn the investigation itself. The Government have the power to do something if they wish. That is all I am trying to establish at this stage in my argument.

5.30 pm

I shall now deal with the issue that has been the passion of the Under-Secretary—the attitude of the Community Pharmacy Action Group. As he has asked about it, perhaps the House will give me leave to go into some detail about the different positions that it has adopted during the passage of the legislation.

When the Community Pharmacy Action Group first alighted on the issue, it considered it carefully and drafted a comprehensive paper on the changes it thought were needed to the Bill in order to protect the interests of its members. It wrote to Mr. Mark Hickson of the Competition Bill team at the Department of Trade and Industry—I believe that that letter has been circulated to all interested Members.

The action group stated that it was campaigning for the continuance of resale price maintenance on over-the-counter medicines. It said that its response seeks to make the case for the retention of RPM on OTC medicines and proposes amendments to the draft Bill that we believe will be necessary if the present agreement is to have any chance of surviving…we have made it clear in the submission that our preferred option would be the inclusion in the new Competition Bill of a specific exemption for the present agreement based on contemporary public interest grounds. We have sought to be constructive and hope that you will incorporate this in the final version of the Bill. I agree with that advice.

I think that the action group was sensible, and I told it so when I was in touch. The group did not tell me or my staff at the time that it was working in conjunction with LLM, the lobby firm. I dealt directly with the action group, and the telephone number that I had was the telephone number of the Royal Pharmaceutical Society of Great Britain. The letterhead made it clear that the Community Pharmacy Action Group was extremely well supported, and that it consisted of the Royal Pharmaceutical Society, the National Pharmaceutical Association, the Pharmaceutical Services Negotiating Committee, the Scottish Pharmaceutical General Council, the Company Chemists Association, the Proprietary Articles Trade Association, the British Association of Pharmaceutical Wholesalers, the Proprietary Association of Great Britain, and the Co-operative Pharmacy Technical Panel. The action group led me to believe that it spoke for all those bodies, which in turn spoke for all their members. I believed that it was an extremely wide-ranging and broadly based alliance. I and my office continued to be in touch with the action group through the Royal Pharmaceutical Society.

Today, I received a letter dated 6 July which changed the line that the action group was recommending in some respects, although not as much as the Under-Secretary is suggesting. For example, it says that it is continuing to oppose the action of the European Community on all this. The letter says: I have seen the letter from the Commission, and the Community Pharmacy Action Group is appalled at this threat of legal action"— that is, from the Commission. The EU appears to be seeking, whether of its own motion or at the request of the OFT is unknown, to interfere in the UK's internal market. The effect of the threat from the Commission is that we have been presented with a choice: fight in the UK courts or in Europe. The letter goes on to say that it firmly believes that resale price maintenance serves the British public well, particularly those who depend on the local chemist. The action group does not believe that Europe has a role in deciding its future, and would prefer UK to European jurisdiction. At the end of the letter, it says, rather surprisingly, that the action group no longer supports or seeks further amendments to the Bill.

I decided to telephone the action group today to seek clarification on that amazing change of heart from the strong and sensible position that was adopted as long ago as September, and which had continued throughout the Committee stage of the Bill. I was surprised to find that the telephone number under the letterhead of the Community Pharmacy Action Group was that of LLM.

When I asked to speak to the chairman of the action group, I was told that he was not there, but that I could talk to the account executive who was handling the case. I was happy to do so. However, the account executive became rather shy, and said that, since it was me, perhaps it would be better if I continued talking to the chairman with whom I had dealt in the past. As soon as I put down the telephone from the account executive at LLM, I received a telephone call from the chairman, Mr. David Sharpe, trying to explain the change of heart.

I have serious questions for the Under-Secretary in the light of these extraordinary exchanges. I should like to know whether the meetings with the President of the Board of Trade and the Under-Secretary were arranged by LLM. Was LLM present at the meetings.

Photo of Mr Ian Bruce Mr Ian Bruce Conservative, South Dorset

The Under-Secretary is not listening.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

I do not mind whether or not he is listening. He has some questions to answer and, one way or another, he will have to answer them, for the House and for the benefit of the nation.

Was LLM present at the meetings? Did the Under-Secretary have private meetings or telephone calls with LLM, and did he tell LLM that it would be helpful to get that group of small pharmacies to back off from pursuing what is obviously an embarrassing amendment for the Government? I do not know whether that happened, but we have a right to know whether there were any such conversations or private meetings or telephone calls between the Under-Secretary and LLM on this issue without the client, the Community Pharmacy Action Group, being present.

We should like to know whether there was any sort of deal. We see in the newspapers that lobbyists believe that one can do deals with the Government. Was there a deal? If so, can we please know its terms, so that we can judge whether it was a good deal?

Photo of Stephen Ladyman Stephen Ladyman Labour, South Thanet

I wonder what point the right hon. Gentleman is making. Is there not a fraction of possibility that the action group, which has been represented all along by people supporting its interests and helping it to present its case, has considered the facts and concluded that the Government are right and have been right all along? Could it be that the group believes that the Government have been advising it correctly throughout, and has now decided to support the Government's position?

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

That is a theoretical possibility, but there are many other more interesting ones that are considerably more likely, and I shall explain why.

There is an inaccuracy in the comments of the hon. Member for South Thanet. Mrs. Sharpe, the wife of the chairman of the group, confirmed on the telephone to me this afternoon that she and Mr. Sharp had never informed me or my staff that LLM was involved in the case. I was not aware that that was the position. I prefer to see people directly. I do not like the intermediary of a lobbyist.

I take the view that we are all paid to represent good causes in the House, and that we are the natural channels for a good case. A good case should go directly to the Minister and persuade him, or it should come through me and my hon. Friends or through the constituency Member, so that we can make our judgments about whether it is a good case, which we wish to back without remuneration, or whether it is not a good case, which should be politely referred to someone else, or that those involved should be told that we are not in agreement. That is the purpose of the House. We must make sure that people can get redress for legitimate grievances. I do not like to feel that I have been in any way misled about who is acting for different people, and what sort of game is being played.

I want to get back to the Government's involvement. We need to know how much the Government knew and how they were able to persuade either the advisers or the Community Pharmacy Action Group, or both, that this was not the appropriate way to proceed.

The letter from the action group, and my subsequent discussions with it, have made it clear that something changed, and that it came to believe that Brussels would pursue this case even if the United Kingdom protected the position in legislation. That is not a new fact. I have known that that was a possibility for months, ever since I began handling this Bill. I believe that the Under-Secretary made that clear in his defence of the Government's position in Committee.

The Under-Secretary has not suddenly come to the view that Brussels might take this up independently. It has been a well-known threat for a long time. All my planning to help the community pharmacies, which I wish to do, has been predicated on the fact that Brussels could interfere. I have constantly urged the Government to take Brussels seriously, and to go there to try to sort it out.

Photo of Nigel Griffiths Nigel Griffiths Parliamentary Under-Secretary (Competition and Consumer Affairs), Department of Trade and Industry

The letter to which the right hon. Gentleman refers specifically says that the author, David Sharp, has seen the letter from the Commission. That is the letter of 8 May, which I believe changed things. Has the right hon. Gentleman seen the letter because it has been available?

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

That letter certainly did not change my view, because, since last year, when I first examined the Bill, I have of course been aware that Brussels might well pursue the case separately, or that there could be separate complaints to Brussels.

I thought that the aim of the Bill was to sort out double jeopardy. We have been telling Ministers that it will be very difficult to do so, and, as the Under-Secretary will remember, I have been urging the Government to go to Brussels expressly to sort out that point. It is clear from his attitude tonight that he has not done so. He is not about to say, "The right hon. Gentleman is wasting his breath, because I have solved the problem. I have been to Brussels, and there is agreement that Britain should be able to settle this issue in the interests of retail pharmacists by maintaining resale price maintenance."

The Government have given us fine words, saying that they support small pharmacists, as do the rest of us, that RPM would help, and that some pharmacists will close if it is not maintained. However, they say to the pharmacists, "Pity us, because wicked Brussels will sort out the problem in a way that we do not want, so you should back off and not embarrass us in the House by backing amendments that would solve your problem."

Photo of Oliver Letwin Oliver Letwin Opposition Spokesperson (Constitutional Affairs, Scotland and Wales)

Does my right hon. Friend agree that it would be interesting to know also what conversations between the Minister, his colleagues and the Commission preceded the emission of the letter from the Commission? It would be interesting to know precisely what requests were or were not made to the Commission, formally or informally, for assistance to get the Government off the hook by issuing such a letter, which was, as my right hon. Friend has pointed out, always a possibility. Should not the Minister give us a travelogue to make it clear exactly what contact he had?

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

As always, my hon. Friend has put his finger on an extremely important point. It is possible that the Under-Secretary went to Brussels and implied that it would be very helpful to Britain if such a letter were written, because it would get him off the hook and avoid a potential large Government Back-Bench rebellion. He clearly has a vested interest in trying to explain to his hon. Friends and the nation that he has no power to do anything, that he is only the Minister and cannot be expected to sort out the problem, and that it is all the fault of Brussels. Now that he has a letter, he is able, directly or with the help of friends—perhaps another part of the magic crony circle is at work—to get decent people to back off because the Government are misinforming them about the true state of play of the relative powers of the House and Brussels.

Photo of Mr Ian Bruce Mr Ian Bruce Conservative, South Dorset

I want the Minister to have the full question put to him. Although my hon. Friend the Member for West Dorset (Mr. Letwin) was very forensic, he did not mention that, when deals are done for the Department of Trade and Industry in Brussels or anywhere else, they are normally conducted by people from the Treasury or No. 10, or possibly by "Tony's cronies". We ought to know exactly who, if anybody, has been to the Commission to ask about these matters.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

My hon. Friend is absolutely right, and he has enlarged the question in a way that will further embarrass the Government.

We should like to know more about the web of influence and lobbyism that seems to have been working. Perhaps we have here the first case of cash for no influence. This might be the first case of a group being asked to pay money to a lobby group only to be told that it should obey the Government and not influence them for the better. I feel rather sorry for those who thought that their interests were being looked after, who now find that that is not being done properly in the way that they would expect. We need to know rather more about their change of heart.

Suffice it to say that Her Majesty's Opposition—and, I trust, other Opposition Members—wish to give proper support to community pharmacists. This is a problem which the Government could solve by using British law if they wanted to. Ministers should go to Brussels and argue the case for our businesses and the services in our communities, instead of using Brussels in an attempt to stifle a Back-Bench rebellion that would be very embarrassing for them.

The Government should understand that community pharmacies in this country, as Health Ministers recognise, provide an extremely important service, which is now at risk, not just because of Brussels, but because of the Government's actions and inactions. There are many questions that the Under-Secretary should answer before we finish the debate.

Photo of Mr Nigel Beard Mr Nigel Beard Labour, Bexleyheath and Crayford

This argument is not new. There is no division in the House about the wish to help retail pharmacies and maintain them in their role, which is invaluable to the communities they serve. At issue are the two approaches to safeguarding their position.

The approach outlined by the Government is to let the appeal to the Office of Fair Trading continue because, if it is successful, the Bill will allow the agreement to be maintained for five years. The appeal is highly likely to be successful, given that the Office of Fair Trading has previously adjudicated on the agreement and found it to be in the public interest. The proposed line would protect retail pharmacies' position for about five years, during which they could adjust to the new climate imposed by Brussels and the Bill.

5.45 pm

The right hon. Member for Wokingham (Mr. Redwood), however, proposes to hard-wire into the Bill perpetual protection for resale price maintenance for retail pharmacies. He tabled the amendment knowing that it is in breach of, or counter to, the principles of the legislation—articles 85 and 86—with which the Bill harmonises UK law. It is known also that the only outcome of pursuing the right hon. Gentleman's approach is that, if it were successful, Brussels would take over, investigate and, very likely, decide that resale price maintenance should be stopped. The pharmaceutical industry would then be in far greater jeopardy than if the Government's course were followed.

We came to the nub of the issue in the right hon. Gentleman's winding up. He is challenging the Government to go to Brussels and demand that the law is changed, knowing very well what the answer would be. What marks out the true obsessive is that, whatever the issue, he returns to the point of obsession, which in the right hon. Gentleman's case is Europe. We realise the true nature of the Opposition: the amendment has nothing to do with helping retail pharmacies; it is an attempt, yet again, to stage a confrontation with Europe to demonstrate the likely infringement of the sovereignty of British law. We have heard that case before and it is being rehearsed in exactly the same form tonight.

At issue is an attempt to dupe the retail pharmacies.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

Will the hon. Gentleman explain what is wrong with the idea of Ministers going to Brussels to try to achieve a sensible exemption for a British industry that will otherwise be damaged?

Photo of Mr Nigel Beard Mr Nigel Beard Labour, Bexleyheath and Crayford

What is wrong is that the right hon. Gentleman knows that that is inconsistent with the Brussels legislation under which the Bill falls. The Bill tries to harmonise British legislation with that of Brussels so that—this is the precise point that the right hon. Gentleman made earlier—companies will not face double jeopardy and the uncertainties and expense of two legislative regimes. The right hon. Gentleman knows that, and all the legal advice that he has been given must have told him that, yet he persists with his amendment, knowing that it could lead only to a confrontation that cannot be won.

Retail pharmacies would be damaged by the amendment, and if they adopted the right hon. Gentleman as a friend they would have a false friend. However, they are more sensible, which is why they sent the right hon. Gentleman the letter he read out earlier. They will not be duped by this attempt to use them to stage a stunt that goes against Brussels and highlights the issue of European legislation and British sovereignty. I am thankful that the pharmaceutical industry has more sense than to listen to Opposition Members.

Photo of Andrew Lansley Andrew Lansley Vice-Chair, Conservative Party

I am grateful for the opportunity to support amendment No. 2 and to speak to new clause 4, which stands in my name.

My right hon. Friend the Member for Wokingham (Mr. Redwood) was right to emphasise the desirability of basing one's arguments, in the first instance, on what may be learned by talking to community pharmacists. As members of the Committee know, I was at pains to talk to staff of community pharmacies in my constituency and I instanced one in particular, in the village of Gamlingay.

The pharmacy in Gamlingay fully illustrates the predicament of community pharmacies. They often have a limited catchment area that does not give them a very high rate of return, but instrumental in that rate of return is the mark-up they are able to achieve on over-the-counter medicines, given their difficulty—to which the hon. Member for Eastleigh (Mr. Chidgey) rightly drew attention—in securing an adequate rate of return on the provision of prescription medicines and the valuable advice service that pharmacists provide.

In the example I offered, the pharmacist gave 15 consultations a day. Each of those 15 consultations would have resulted in a general practice consultation but for the presence of a pharmacist. It is the only opportunity many people in the village have to access to a local pharmacy. The suggested alternative of a visit to a large, multiple superstore is not available within seven or eight miles.

There is every reason, therefore, to support community pharmacies. I understand from our debate in Committee that support for community pharmacies is not confined to the Opposition; Labour Members' support is evident. I shall not detain the House by quoting them, but Second Reading speeches by the hon. Member for South Thanet (Dr. Ladyman) and others gave particular support to community pharmacies.

The question is whether, in Committee, and especially in relation to the schedule introduced by the Under-Secretary to provide for new transitional provisions, the Government have provided the protection the House seeks for community pharmacies and for resale price maintenance on over-the-counter medicines in the long run. I say "in the long run" because it seems to me that when the other place made amendments and they were, initially, considered by the Committee, what was proposed presented a problem.

At that stage, the case before the restrictive trade practices court would have been stayed and there would have been an accusation to be made to the Commission. This is at the heart of the problem. There would have been an accusation to be made to the Commission that the case had not been considered on its merits, including the public interest and general public health interests additional to the competition considerations; that the legislation had simply obviated—circumvented—proper consideration of those issues; and that, therefore, the Commission should take it upon itself to consider the issues.

For that reason, it was probably right for the amendments made in another place to be overturned in Committee and to be substituted by measures designed to give direct effect in the Bill to the House's intention to support resale price maintenance on over-the-counter medicines. However, the Government have gone about it in a way that has limitations, which were clear in Committee. Although the Government rest upon the question of the court considering the issue, if the court considers the issue and concludes that resale price maintenance does not act against the public interest, a protection is built into the Bill—a protection, through transitional provisions, for five years. However, there is no provision in the schedule to extend the transitional period further.

That brings us back to the letter that the Under-Secretary was at pains to speak about, and on which my right hon. Friend the Member for Wokingham rightly responded. The letter from the Community Pharmacy Action Group illustrates the point. The CPAG has been presented with two unpalatable options. The more unpalatable of the two is that the court goes ahead and comes to a conclusion without Government support for community pharmacies before the court—or, indeed, without the Government going to the Commission and saying, "You should rest on the court's decision". On the other hand, the action group is told, "Do not press the amendments; do not look for anything else; do not embarrass the Government on Report. Say that the Government have done what is required, and you will get Government support"—presumably by way of evidence, or whatever, before the restrictive trade practices court—"and you will subsequently benefit from the five-year transitional provision."

I say that with the evidence that, in the letter referred to, Mr. David Sharpe, chairman of the CPAG, says: On the understanding that the Government will continue to support retaining the network of community pharmacies, we will not seek further amendments to the Bill". When the Under-Secretary replies to the debate, will he tell us the meaning of the phrase, On the understanding that the Government will continue to support retaining the network of community pharmacies"? That is the key question.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

My hon. Friend is right. Does he agree that the Under-Secretary would be more convincing if he published the letter or evidence that he sent to Brussels in defence of our pharmacists before he received the letter giving him a rather dusty answer, and if he published the evidence that he intends to give the court, also defending our pharmacies?

Photo of Andrew Lansley Andrew Lansley Vice-Chair, Conservative Party

I am grateful to my right hon. Friend. I hope that the Under-Secretary takes up that challenge; it would be very enlightening if he did.

However, the response from the Commission—the Under-Secretary may interrupt me if I am wrong—referred to on 8 May, is essentially about whether the Commission would intervene if the legislation were amended, as happened in another place, to stay proceedings before the restrictive trade practices court. That is not the question before us now, which is: will the Commission seek to intervene if the House legislates on the basis of resting on the decision of the restrictive trade practices court?

The view that the Under-Secretary expressed in Committee was pretty clear on that point. He said: I reached the conclusion…that the Commission is looking to the restrictive practices court to examine the evidence and to make a ruling."—[Official Report, Standing Committee G, 23 June 1998; c. 608.] That is in the context of a conclusion reached by Richard Whish, an eminent competition lawyer, that the Commission is capable of taking into account general public health interests in its examination of a case under article 85 of the treaty on European Union. The proposition seems to be, therefore, that the Commission would be able to rest upon the public interest test applied by the restrictive trade practices court and, on that basis, not pursue an article 85 investigation if that court concluded that RPM was not acting against the public interest.

That brings us back to amendment No. 2 and new clause 4. They differ from what the Government propose in the following important respect. The Government are proposing that community pharmacies should be protected for five years. I do not understand it to be the intention of the House that community pharmacies should be given a stay of execution. My understanding of the debate, including the contributions made on Second Reading and in Committee by Labour Members, was that we had concluded that, subject to an examination of the evidence by the court, there was a belief in the House that the process of resale price maintenance on over-the-counter medicines acted in the public interest—that it was not necessarily anti-competitive in any case, but that, in addition, it was justified on general public interest grounds. We had concluded that, if we moved to an article 85-style or chapter 1 prohibition-style investigation, the narrower gateway—moving from a public interest examination to a simply competition examination without taking broader public interest criteria into account in this instance—might well lead to a narrower conclusion that was prejudicial to community pharmacies. We concluded that that was undesirable. The House therefore wished to move toward protection for community pharmacies and to vest that in the legislation.

The Government are offering only five years' protection, but the wish of the House is to go further. Devices are available to achieve that: amendment No. 2 and new clause 4 would be perfectly adequate for the purpose. The proposition before the House is that we should not limit the protection of community pharmacies by a stay of execution but should rest on the court's decision that RPM on over-the-counter medicines is not against the public interest. I hope that the Government will respond positively to the amendment and the new clause.

Photo of Phyllis Starkey Phyllis Starkey Labour, Milton Keynes South West

I shall expand on the points that were made by my hon. Friend the Member for Bexleyheath and Crayford (Mr. Beard). The amendment's stated aim, which was outlined by the right hon. Member for Wokingham (Mr. Redwood) is to protect community pharmacies. It is interesting to note that there seems to be a slight split in the Tory party in that there are alternative proposals, but I shall pass over that. As I understand it, the amendment also aims to ensure that resale price maintenance continues for ever. As my hon. Friend said, it has several aims. One is to distract attention from the unfortunate fact that in a former life the hon. Member for Tunbridge Wells (Mr. Norman) initiated the attack on RPM.

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Until the Bill started its passage through Parliament, the Tories took no action to protect pharmacies. An early-day motion has been widely cited, but that is a two-edged sword because I understand that although only three Conservative Members signed it, the Conservative party now says that it is wonderful and does not go far enough.

The reason for the smokescreen was evident in the speech made by the right hon. Member for Wokingham: the amendment is an opportunity for yet further Euro-bashing. The constant talk about Brussels is revealing. It is as if Europe is over there in Brussels and not a community of which we are a part. To speak about Europe as if it were separate is ridiculous and demonstrates a certain mind set. I congratulate the right hon. Gentleman on his ingenuity in dragging the issue of lobbying into the debate.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

Amendment No. 2 does not seek anything in perpetuity. Parliament can change its mind and change legislation at the drop of a hat if there is a will to do that, and that freedom is in my amendment. New clause 4, which my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) has tabled, would allow the court to come to a different judgment at some future time. There is no split between us, and we are aware that we would need Labour votes to pass either. We offer Labour Members a choice and we would be happy with either. The hon. Lady spoke about the early-day motion. My right hon. and hon. Friends and I voted for its wording on Second Reading—and we should have liked Labour Members to join us on that.

Photo of Phyllis Starkey Phyllis Starkey Labour, Milton Keynes South West

I accept the correction: of course Parliament can undo what it has done and, to that extent, nothing need continue for ever. I dissent from the right hon. Gentleman's analysis of the effect of the amendment and the new clause. They would expose RPM to abolition by the Commission within years, whereas the Government proposals give at least five years of protection.

Another point that has arisen in the debate was also made in Committee. The Opposition have made great play about being the protectors of community pharmacies, but they have slightly narrowed the definition of such pharmacies. Judging from how they speak about them, they have been recruited to their rather spurious notion of country life and occur only in the countryside. I appreciate that such pharmacies are incredibly important to rural communities, but they are also important to urban communities, and the dichotomy between supermarkets and independent pharmacies is not quite as strong as the Opposition make out.

In my constituency, some small pharmacies are independent and others are branches of a large national chain. There is also an excellent pharmacy inside a Tesco supermarket. It is extremely active in co-operating with local GPs and has run health education campaigns on asthma, diabetes, antenatal care and emergency contraception services.

There is no argument between us about the need for an extensive network of pharmacies in all communities; I merely ask the Opposition to accept that community pharmacies are not simply small independent ones. Pharmacies serve all sorts of communities and include those in large supermarkets as well as the independents. I look forward to the Government's plans to ensure that all pharmacists, whether they are independent, in community pharmacies or in shops or supermarkets, are used more effectively. However, I do not think that such a debate should form part of the discussion on this part of the Bill.

The Opposition are engaging in a cynical exercise. Under the guise of the protection of community pharmacies, they are addressing an entirely academic point. They know that their amendment would provoke the end of RPM, although they say that they are trying to protect it.

Photo of Colin Breed Colin Breed Liberal Democrat, South East Cornwall

I shall not reiterate what has been said because I agree with much on both sides of the argument. We all support community pharmacists, large or small, urban or rural, and we want them to be able to function with some security. The people who use them should have access to them not just for the next five years, but beyond. The proposals that we are debating will lead to a lack of security. If resale price maintenance fails the public interest test, that could be the end of many community pharmacists. The alternative is a five-year stay of execution.

We would have more sympathy for the Government's proposals if, during the five years, they offered an opportunity to look at ways in which to fund pharmacists and provide them with security. However, after five years, pharmacists will be left to the marketplace, and that would not provide the security that they seek or leave the communities that they serve with the feeling that such pharmacies will remain.

If the five-year transition period were used positively to prepare plans for the funding of pharmacists, that might enable us to support the proposal. Pharmacists in my constituency feel that convenient access to medicines for people who have been to their doctors is a vital part of primary health care. It is an anomaly of the health care system that that one part is not included in health care operations. That is because we regard pharmacists as small chemists and take the view that resale price maintenance is the best and only way to fund them. Many pharmacists feel that their qualifications and experience, and the valued support that they provide to GPs by way of health education and even diagnosis are worth more than just the protection of RPM on over-the-counter medicines. They should be considered as part of primary health care.

Resale price maintenance has served pharmacists and their communities well. We will support the amendment because it would ensure, at least in the short term, the continuance of RPM and, therefore, the protection of pharmacists. RPM will be under constant commercial attack, and those challenges may be the pathfinders for many more. Such insecurity may prompt some pharmacists to give up. Pharmacists who are thinking of retiring in the not-too-distant future may be feeling fearful about their ability to sell their businesses. Pharmacists who have received their qualifications and are looking for new opportunities may feel distinctly uncomfortable about taking on positions in small chemist shops that may be under threat in only a few years.

That insecurity is the reason for this debate. Although the Minister has provided good protection for a short period of years, if it is needed, he has not looked in the long term—at the long-term provision of pharmacists and access to them, which is at the heart of what we are looking for. On this occasion, we support the Opposition amendment.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

I hope that the Liberal Democrat party will make it clear how it wishes to help the pharmacists, if it does not wish to support either the amendment or new clause tonight. We think that they are the best way in which to do it.

Photo of Colin Breed Colin Breed Liberal Democrat, South East Cornwall

I did say that we would support the Opposition's amendment as I was about to sit down.

Photo of Oliver Letwin Oliver Letwin Opposition Spokesperson (Constitutional Affairs, Scotland and Wales)

I want to discuss the substantive issue—community pharmacies—and move to an issue of much wider significance, which arose from the exchange between my right hon. Friend the Member for Wokingham (Mr. Redwood) and the Minister for Competition and Consumer Affairs, where matters have reached a serious pitch.

In common, I suspect, with many hon. Members on both sides of the House and certainly with many of the Liberal Democrat Members who are present, I represent a seat that is perhaps the archetype of the problem. It is inconceivable that there should be available in the smaller towns of West Dorset sufficiently elaborate national health service provision to meet all the needs of the ordinary citizen, who is often unable to move around easily because of necessarily limited rural transport. The Government's persistent attack on rural transport by car through short-sighted actions with environmental aims has limited it even more. It is of the essence that such citizens in West Dorset should have available to them what has been available to them for a long time, and will, if the amendment is passed, continue to be available to them—access to a rural pharmacy. That will not continue to be available for much longer if the amendment is not passed.

Our pharmacies in West Dorset depend on the amendment. I speak not speculatively, but on the basis of intensive discussions with each of the principal rural pharmacies in each of the smaller towns in my constituency, of which there are not very many; it is possible to cover them all because their number is small. The number of villages is, of course, great and, again, that is an archetype. There are some 55 larger villages in West Dorset, each clustered around the towns. They, too, depend on the rural pharmacist. In discussions with rural pharmacists—in many cases, I have gone to the trouble of asking them specific questions about their turnover, margins and current profitability—it has become clear that their existence depends on resale price maintenance or some equivalent.

I thought that the interjection of my right hon. Friend the Member for Wokingham during the remarks of the hon. Member for South-East Cornwall (Mr. Breed), who spoke for the Liberal Democrats, was highly pertinent. It is possible to imagine—it has always been possible to imagine—that the Government would seek to introduce alternative means of supporting rural pharmacies. There may even be, theoretically, preferable alternate means of supporting such pharmacies.

I have a worry, which I suspect is shared by many hon. Members who represent seats such as mine, which is not a theoretical worry; it is substantive, practical and based on a knowledge that I suspect all hon. Members have of how Government and, in particular, the Treasury, under any Administration, work. If grants, subsidies or special arrangements are introduced to support a particular cause when there is a ferment about that cause—this would be one such case, potentially—they are always a soft target for any Chief Secretary to the Treasury when he comes in the spending round to look at what might be eliminated.

For all the dangers that the hon. Member for South-East Cornwall pointed out, resale price maintenance has at least persisted for a long time and is difficult to dislodge, because it requires action in the courts and may take time. At least that system is not as likely to suffer from the vicissitudes of the attentions of a Chief Secretary which, alas, can quickly be brought to bear on any grant system.

6.15 pm

Essentially, if the amendment is not passed, the access of many of my constituents to what is effectively the only source of help and advice available to them other than GPs, many of whom they find it difficult to reach on many occasions, will depend on the hope that the Government will introduce an as yet unknown mechanism—there is no certainty that they will do so—and that no future Chief Secretary will remove the mechanism.

There is a ready remedy, which is to extend the provision of NHS services in rural areas. That takes us way outside the scope of the amendment and anything, I suspect, that the Government are willing to guarantee. The costs of doing that vastly exceed the economic cost of resale price maintenance in this sector.

That point is of great interest. I was, alas, unable to continue as a member of the Committee during the stages when these matters were considered, but I have had the opportunity to read the official record. I find to my intense surprise that the Minister for Competition and Consumer Affairs has not brought forward any analysis of the economic cost of continuing with resale price maintenance for rural pharmacies. There is a good reason why he has not. It is extremely difficult to identify a significant economic cost in that case.

If one looks at the cost of providing alternative NHS services, the economic and, in particular, fiscal gain of having these pharmacies is fairly easy to ascertain. A cost-benefit analysis of the amendment, so to speak, could easily identify the costs of not having the amendment, but trying to identify the benefits of not having the amendment—the economic gain to the country from abolishing RPM—is quite a task.

Alas, we discovered at a much earlier stage in the proceedings of the Committee that the President of the Board of Trade had conducted a compliance cost assessment that was probably wrong by some magnitude. Therefore, it is not surprising that the Minister has been reluctant to conduct any economic analysis in this particular case, but, if he had done, he would probably have found that the figures would have worked against him.

This is a remarkable case. We have a system, which is theoretically imperfect, but nevertheless produces what I think is by universal accord a practically beneficial result, with probably a low economic cost—it has certainly not been ascertained—almost certainly a high fiscal gain and hence an economic gain. There is no certainty about any replacement and there is an extreme danger that, if there were to be a replacement, it would come under attack from a future Chief Secretary.

That chain of argument suggests that there is a strong reason for seeking to retain the ability for this industry to engage in resale price maintenance. That is the substance of the matter. In rising, my main intention was not to address that issue.

Photo of Andrew Lansley Andrew Lansley Vice-Chair, Conservative Party

Before my hon. Friend moves on to a separate argument, does he agree that, in this respect, it is not so much the compliance cost assessment that is the mechanism through which the Government should assess what the costs and benefits of proceeding through legislation are, but the regulatory appraisal? While he was speaking, I have taken the opportunity to look at the regulatory appraisal and it is silent on the issue of the economic costs and benefits that might result from the abolition of a number of pharmacies as a result of the Bill.

Photo of Oliver Letwin Oliver Letwin Opposition Spokesperson (Constitutional Affairs, Scotland and Wales)

It was one of the abiding sadnesses of being removed from the Committee that I was no longer able to benefit from the shafts of wisdom that my hon. Friend so often cast on aspects of the Bill. He is right to remind me that it is not the compliance cost assessment, but the regulatory appraisal that should have contained the information. To say that the regulatory appraisal is silent on this issue is, in the now immortal words of Mr. Draper, the understatement of the century. The regulatory appraisal is silent on almost every issue. It is a document of such extreme gnomic quality that it is rather like the holy Roman empire, which was neither holy nor Roman nor an empire. The regulatory appraisal is to do neither with regulation nor with appraisal; it is a piece of paper. However, it would have been possible for the Under-Secretary to produce a serious analysis in Committee, had he wished to do so. I have no doubt that he did not do so because he would not have liked the results.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

Will my hon. Friend also think about the plight of the retail pharmacist? He will also need reassurance from the Government that the complicated arrangements to remunerate him for his NHS work will not fall foul of the Bill. Presumably, the Government will have to make use of the public policy provision or the general economic service provisions to exempt retail pharmacists. Would not it be helpful to the pharmacists to be reassured at least about one of their strands of income? Otherwise, they might find that all their income was under threat from the Bill.

Photo of Oliver Letwin Oliver Letwin Opposition Spokesperson (Constitutional Affairs, Scotland and Wales)

My right hon. Friend is absolutely right. He will recall, as I do very poignantly, that both the Under-Secretary and the Minister were wholly unable to deliver to the Committee the slightest remnant of a definition of general economic service that would illuminate the question whether that point would actually apply. Manifestly, there are serious issues about whether the Bill will allow provisions to be made to support rural pharmacies. That has wider implications because it is not just rural pharmacies or even pharmacies generally with which we are concerned; it is the general principle of whether a Competition Bill ought simply to take into account the narrow focus of industrial economics, or whether some kind of social cost or social benefit—especially when there are fiscal consequences—should be taken into account.

I come now to the major topic that I want to discuss. I am afraid that I shall make a very grave accusation. I hope that it can be rebutted; I hope that the Under-Secretary will produce evidence to show that I am wrong. No one would be happier than I to withdraw my accusation, in an open and fulsome way, if it turns out that it is false. My accusation has to do with the character of government. It is raised, in particular, by the response to this amendment and by the interchange between my right hon. Friend the Member for Wokingham and the Under-Secretary earlier.

I begin with a question. What was the treaty base upon which the Commission was operating when it produced the letter to which the Under-Secretary referred? I stand open to correction. The hon. Gentleman has vast legal resources at his command, while mine are negligible. It may be that I am, therefore, wholly misled, but I imagine that the treaty base was article 85—subject to the Under-Secretary's correction. I should be grateful if he would save me and himself from further embarrassment, and intervene at any stage of my argument if he feels that something that I am saying is incorrect.

Article 85 is very clear, unlike its transposition into English law in the Bill, which is very unclear. It states in its first clause: The following shall be prohibited as incompatible with the common market: all agreements between undertakings, decisions by associations of undertakings and concerted practices"— I have not the slightest doubt that resale price maintenance falls into those categories— which may affect trade between Member States. Alas, Mr. Deputy Speaker, you were not the Chairman of our Committee. Those who were present during our sittings will remember that on many occasions during the deliberations of the Committee—and I find on reading the Official Report that this persisted beyond the time when I ceased to be a member—points were made about the contrast between the specific clause which may affect trade between Member States and its transposition into UK law in the Bill. We frequently pointed out the clarity of the statement in article 85 and the fact that it made it clear that the Commission, in applying the article, was to restrict itself to those sorts of action that affected interstate trade. We drew attention to the difference between that and the lack of clarity about the Commission's scope for action within the United Kingdom.

The Under-Secretary and the Minister had ample opportunity to challenge us on that point in Committee. They had ample opportunity to say that they or their legal advisers thought that we were misinterpreting article 85. In short, they had ample opportunity to tell us that article 85 was not restricted to interstate trade. However, I would have found it odd if they had said that because if we look back through the legislative history of article 85 to the early writings of Monnet and Schuman on the origins of the competition sections of the treaty of Rome, it is clear that in the minds of those who formed the treaty, it should restrict itself—admirably to my mind, and, I suspect, that of my right hon. Friend the Member for Wokingham—to interstate trade.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

The two Ministers, both by their silence throughout my hon. Friend's remarks and by what they said in Committee, have to accept that the treaty is about interstate trade. That is why we are debating a law for Britain to deal with intrastate trade. The treaty does not directly act on intrastate trade—if it did, we would not need all this rigmarole tonight and we could just let Brussels get on with it.

Photo of Oliver Letwin Oliver Letwin Opposition Spokesperson (Constitutional Affairs, Scotland and Wales)

One of the annoyances of dealing with a Bill on which my right hon. Friend leads is that he is inevitably one and a half steps ahead of me. He precisely anticipates the next leg of my argument. It is not simply that we would have been surprised if the Under-Secretary or the Minister had told us that article 85 applied more widely than to interstate trade—had they done so, we would have told them that the Bill was not required as it would not be necessary to have the prohibition if it already existed and applied to intrastate trade. Therefore, it must be the case that Ministers accept that article 85 does not provide a treaty base for intervention by the Commission in matters such as resale price maintenance, unless the Commission can satisfy itself that the practice concerned may affect trade between Member States. This is where I have to make a grave accusation. If the Commission were to satisfy itself that resale price maintenance in pharmacies—and I think in particular of rural pharmacies—in this country might affect "trade between Member States", the Commission would have to be on some sort of elaborate hallucinogenic drug. I cannot think of a single reason why RPM, desirable or undesirable as hon. Members may think it to be, between the suppliers and a pharmacy in, for example, Beaminster in my constituency, may affect trade between Member States. I cannot imagine that the pharmacist in Beaminster spends much time shopping around for arbitrage possibilities in buying his supplies from a wide range of European suppliers. I cannot suppose that he much affects the balance of trade between member states. It would require the most extraordinarily tenuous logic for the Commission to have argued to itself convincingly—or to be able to argue to anyone else convincingly—that RMP, in this particular case, may affect trade between Member States. The Under-Secretary has already had, and will again have in his reply, the opportunity to challenge each leg of my argument. I hope that he will tell me that I am wrong about article 85 being the supposed treaty base. I hope that if he cannot tell us that, he will tell me that I am wrong to suppose that there is no good argument for supposing that such resale price maintenance may affect trade between Member States". However, if he cannot say either of those things, we have to ask why the Commission wrote that letter.

I genuinely believe—again I make it abundantly clear that, if I am wrong, I should be happy to be disproved by evidence to the contrary—that the Commission wrote the letter because someone in the United Kingdom Government, acting via the agencies of the UK Government in Brussels—presumably the UK permanent representative in Brussels—made it known by formal or informal means to the Commission that it would be helpful to the UK Government if the Commission wrote that letter and told, or suggested or halt-hinted to, the Commission that it did not too much matter whether there was a treaty base for the letter and that, in the meanwhile, a letter might solve a parliamentary problem. Moreover, it may have been suggested that if the letter did solve that problem, there would, regardless, be UK legislation preventing such resale price maintenance. Therefore, the Commission, having written the letter, would never be subject to legal challenge, as the letter would never become an effective one. I repeat that I should be happy to have those assertions disproved. However, if proved, they are very grave.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry 6:30 pm, 8th July 1998

I fear that my hon. Friend may be on to something, that there is a pattern and that the Government may be hoping to avoid embarrassment—and not only in this case. Has he thought about the recent allegations on the "Panorama" programme—that Mercedes and Volkswagen are arranging their prices in the United Kingdom in an anti-competitive manner? Is he aware that the Government have said that they want nothing to do with that, but would rather that Brussels investigated the whole matter on their behalf? Is it not another case in which Ministers seem to wish not to take responsibility for anything in United Kingdom competition competence?

Photo of Oliver Letwin Oliver Letwin Opposition Spokesperson (Constitutional Affairs, Scotland and Wales)

I agree with my right hon. Friend that it may be part of a pattern. It is a bad pattern if it is an overt one. It is bad because the United Kingdom Government should not rely on the Commission to take action on matters in which—for UK policy reasons, especially when the Government agree with the action—the Government not only have the capacity to act, but should be acting. My right hon. Friend's example of the automobile industry is pertinent.

I regret to say that, in this debate, we may be dealing with something that is far worse and far more insidious—a covert attempt to have the Commission do the Government's work. Moreover, it would be a covert attempt by the Government to have the Commission do a piece of political work for them. If that is what has happened, it would be an attempt by the Government to have the Commission spare the Government a political embarrassment because of a division within the Labour party's own ranks. That is not a way in which it would be reasonable or decent for the Government to use the Commission.

Photo of Mr Nigel Beard Mr Nigel Beard Labour, Bexleyheath and Crayford

Does the hon. Gentleman have a shred of evidence for that conspiracy theory?

Photo of Oliver Letwin Oliver Letwin Opposition Spokesperson (Constitutional Affairs, Scotland and Wales)

I have been at pains—I do not want to be irresponsible—to point out that every leg of my argument is something that I believe may be the case, but is open to rebuttal. I have suggested to the Minister that, by intervention or in reply, he can rebut any part of the argument. If he does so, I shall fulsomely withdraw. I am making an allegation for which I realise I currently have no proof. However, the Minister has so far been notably silent. I hope that, in his reply, he will challenge one or another part of the argument. I make the accusation not recklessly, but because I cannot myself find another explanation for a letter that seems to be based on so thin a treaty basis.

Photo of Mr Nigel Beard Mr Nigel Beard Labour, Bexleyheath and Crayford

Is not the nature of reckless allegation such that it has absolutely no evidence behind it?

Photo of Oliver Letwin Oliver Letwin Opposition Spokesperson (Constitutional Affairs, Scotland and Wales)

No, it is not. It is the purpose of Parliament to expose arguments and to have answers. I think that it is a reasonable proceeding for an hon. Member conscientiously to make an argument that would have a devastating effect if it were true, to pose it for the Minister and to allow the Minister there and then to refute it. It would, of course, not be reasonable for me to repeat the allegation if the Minister had disproved it. However, the allegation has to be answered.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

My hon. Friend is generous in giving way again. If he was wrong, should not Ministers have leapt to their feet and produced evidence that they have been trying to lobby Brussels in the right direction rather than the wrong one?

Photo of Oliver Letwin Oliver Letwin Opposition Spokesperson (Constitutional Affairs, Scotland and Wales)

Again, my right hon. Friend takes me to the next leg of my argument. It will not be enough for the Government to establish that they did not engage in the piece of shady dealing that I am alleging that they might have engaged in and that I am asking the Minister to disprove. They will have to show that they tried to avoid production of the letter, because it is ill-based on treaty—unless they can show that the Commission is not basing it on article 85. If the letter is ill-based, and if many hon. Members agree that it would have a bad effect on an important part of our social fabric, which they do, it behoves the United Kingdom Government to argue the case against the letter, and then to take their own domestic action.

Photo of Andrew Lansley Andrew Lansley Vice-Chair, Conservative Party

I am following my hon. Friend's comments with interest, and realise that he is arguing from circumstantial evidence. Will he add to that circumstantial evidence the fact that the Minister parades a letter—which he says is dated 8 May—that was, presumably fortuitously or coincidentally, received by Ministers before Second Reading, on 11 May? Therefore, the proposition that the letter was related to the Government's pursuit of the legislation's passage is not an idle point, but is backed by circumstantial evidence.

Photo of Oliver Letwin Oliver Letwin Opposition Spokesperson (Constitutional Affairs, Scotland and Wales)

I agree entirely with my hon. Friend that the circumstantial evidence is, if not compelling, quite considerable. His point about the timing makes it all the greater.

The problem goes one stage deeper. We are dealing not merely with the possibility—I admit it to be a possibility rather than a certainty—that the Government covertly prayed in aid the Commission to issue a letter on a frail treaty basis that, if it were true, would have undermined the whole of the Government's logic in their Bill. The Government have also brought pressure to bear through a lobbyist, who is intimately—as we now fortuitously discover—connected with the Government, upon a group of people who should, at least in my view, be representing those whom they purport to represent and who should be making that argument.

We have reached the point at which there is a connection between the first and second legs of my remarks. If the case for maintenance of RPM were not so very strong substantively, one could well understand that representatives of rural pharmacies might have been in two minds on the subject and might have been wavering between results. One could also understand those representatives taking their own view on the matter. One might also understand that they might have been influenced by a letter, however frail, from the Commission.

However, when a substantive case for retention of RPM for rural pharmacies is not only in itself so strong but—as so many hon. Members on both sides of the House know—is also felt to be so strong by very many or, I speculate, almost all, of those whom that body is meant to be representing; when the letter in question is based on a treaty basis that is so frail; and when the Government must have known how frail the basis was—or they would not have introduced the Bill in its current form, as they would have had to take the view that article 85 had a scope wider than merely interstate trade—one is driven to the conclusion that it must have been by heavy-armed tactics that the Government used the offices of that lobbyist to persuade that group of representatives to change their minds in the light of the letter.

Mr. Deputy Speaker, at the beginning of my rather—I regret to say—over-lengthy speech, I said to your predecessor in the Chair that I had a grave accusation to make. I have made it in good faith—[Interruption.] I have made it in utterly good faith. I believe that it probably is true. It may not be true—I have admitted that, and I admit it now. It now falls to the Minister, in replying to this debate, to go through the logic—as I did not see him do in most of the Committee stage—of the allegation, to take it seriously, and to show that I have got wrong one of my propositions. Have I got it wrong that the treaty basis of the letter from the Commission is article 85?

Photo of Michael Martin Michael Martin Deputy Speaker (First Deputy Chairman of Ways and Means)

Order. As the hon. Gentleman said, I have just taken the Chair. However, I should draw it to his attention that we are considering narrow amendments. The hon. Gentleman appears to be referring to a treaty. Can he explain what that treaty has to do with the two amendments before us?

Photo of Oliver Letwin Oliver Letwin Opposition Spokesperson (Constitutional Affairs, Scotland and Wales)

I was not interrupted by your predecessor, Mr. Deputy Speaker, because I explained the relevance of the treaty at the beginning of my speech. So as not to try your patience, let me briefly repeat the logic of my argument; it is very straightforward. The amendment seeks to protect resale price maintenance, which was being advocated by a particular group. That group has withdrawn part of its advocacy of that on the basis of a letter from the Commission to which the Minister has referred. The letter is meant to have some treaty basis, which I believe is article 85. I have been asserting that the Minister concocted the letter from the Commission in order to change the attitude of that group to resale price maintenance—and hence the necessity of the amendment. That is the structure of my argument.

In conclusion, I repeat that if any leg of my argument is false, it falls to the Minister to show it. It is for him to show that article 85 is not the treaty base, that I have misinterpreted its scope or effect, or that the Commission genuinely acted on its own initiative and is at fault because he can show that he tried to get the letter withdrawn.

Photo of Nigel Griffiths Nigel Griffiths Parliamentary Under-Secretary (Competition and Consumer Affairs), Department of Trade and Industry

It is, indeed, unusual to hear the Opposition filibustering on their own amendment, but the amendment relates to a subject that is particularly embarrassing to them. It is a subject that they ignored for years—the plight of community pharmacists. Indeed, when the right hon. Member for Wokingham (Mr. Redwood) was in the Cabinet, 178 pharmacists ceased trading.

The Opposition have had no long-standing dialogue with community pharmacists, and, in speaking to the amendment and the new clause, cannot command their support. They asked us about representations and I shall be happy to deal with that, along with the treaty basis for what is happening. The right hon. Member for Wokingham made no representations to the Director General of Fair Trading about the complaint. In 1996, when the Commission was liaising with the Office of Fair Trading in respect of the Asda complaint, the right hon. Gentleman was too busy with the downfall of his own Government to make any representations to Brussels. I understand that he has made no representations on the matter, either to the Office of Fair Trading or to the Commission, during the passage of the Bill or previously. We will take no lessons from the Opposition about commitments to community pharmacists.

As my right hon. Friend the President of the Board of Trade told the House: My right hon. Friend the Secretary of State for Health has made it clear how important community pharmacies are to his vision of health in the next century."—[Official Report, 11 May 1998; Vol. 312, c. 34.] The amendment and the new clause put at risk all the representations made to the OFT and the Commission.

The right hon. Member for Wokingham does not care whether amendment No. 2, which is, after all, a political stunt, puts at risk all that community pharmacists have been fighting for. It would disapply the prohibition and effectively pre-empt the findings of the restrictive practices court. It is carelessly drafted in that it does not distinguish between retail price maintenance agreements in the over-the-counter medicine sector which are exempt under section 14 of the Resale Prices Act 1976 and all other retail price maintenance agreements. New clause 4 refers to agreements that have been exempted from section 14. Both proposals would have the effect of stopping proceedings in the United Kingdom and handing them over to Brussels—coming from the right hon. Member for Wokingham, that is a paradox.

The Commission has made it perfectly clear that article 85 is directly applicable in the United Kingdom, irrespective of the Bill. On several occasions in Committee, Opposition Members highlighted the fact that an agreement of conduct must have an appreciable effect on trade between member states if articles 85 and 86 are to apply. They went on to argue—as they have this evening—that that requirement somehow makes the competition test for the application of the domestic prohibition different from that for the application of article 85. The right hon. Member for Wokingham nods in agreement, but that view is mistaken.

The hon. Member for West Dorset (Mr. Letwin) asked whether he was wrong and I can confirm that he is wrong on that and most of the other matters that he raised.

Photo of Nigel Griffiths Nigel Griffiths Parliamentary Under-Secretary (Competition and Consumer Affairs), Department of Trade and Industry

I shall give way in a moment, with great pleasure.

The requirement that the application of article 85 would affect interstate trade is a jurisdictional hurdle. It does not affect the meaning of the prohibition itself in the sense of determining whether or not an agreement is anti-competitive. Nor does it affect the meaning of the prohibition in determining whether conduct is abusive of a dominant position.

Photo of Oliver Letwin Oliver Letwin Opposition Spokesperson (Constitutional Affairs, Scotland and Wales)

The Minister has made some quite remarkable statements. First, he has admitted that article 85 is the treaty base. Secondly, does he agree that if article 85 has the scope that he claims for it, the reason for the clause that creates a prohibition under English law is nullified? He has undermined the whole purpose of his own legislation.

Photo of Nigel Griffiths Nigel Griffiths Parliamentary Under-Secretary (Competition and Consumer Affairs), Department of Trade and Industry

The hon. Gentleman had left the Standing Committee at that stage, as he put his career before chemists. He also sought to spare the Opposition the embarrassment of the publication in the 1980s that he and the right hon. Member for Wokingham produced on financing the health service. Their report is germane to today's debate on community pharmacists, as it advocated a pill tax. They wanted to ensure that the prescriptions that are the life-blood of so many chemists were operated, if not for profit, at least by charging enough to ensure that demand matched supply. So the hon. Gentleman's history is certainly not in support of community pharmacists—which is why Opposition Members have shown absolutely no interest in the issue for so long.

Photo of Nigel Griffiths Nigel Griffiths Parliamentary Under-Secretary (Competition and Consumer Affairs), Department of Trade and Industry

I shall make some progress, but I shall give way to the hon. Gentleman before I sit down.

It is important to be aware that the proposals would stop proceedings in the United Kingdom. The Commission has made it clear—not just to the Government but to the Director General of Fair Trading, with whom it has been liaising for more than two years on the matter—that if that happened, it would have to take action. It did so under the previous Administration, without a finger being lifted by Ministers or Conservative Back Benchers at the time to support community pharmacists. I can confirm, as I have it here, that a letter from the Commission was sent to the Director General of Fair Trading. I am sure that it is part of one of a number of dialogues over the past two years since Asda lodged its complaint in 1995.

Amendment No.2 would have dire consequences. The Commission has made it clear that if the restrictive practices court were not looking at the issue, it would take lock, stock and barrel the evidence that the Office of Fair Trading has collected over a long time. Let us look at just how long it can take for the Commission to act. A recent investigation into the Italian tobacco sector took around two years. The decision on Volkswagen took around three years. That means that the present arrangements could unravel alarmingly quickly for community pharmacists.

The Bill provides a five-year transitional period if the court decides that there should be an exemption for over-the-counter medicines. I urge my hon. Friends to reject the amendment and the new clause.

Photo of Andrew Lansley Andrew Lansley Vice-Chair, Conservative Party

The Minister will know that the letter from the Commission on 8 May related to whether proceedings before the court were stayed under the previous amendment tabled in another place. When the court's proceedings continue, will the Commission investigate and intervene on RPM on over-the-counter medicines if the chapter I prohibition in this country is not applied but the court's decision is sustained?

Photo of Nigel Griffiths Nigel Griffiths Parliamentary Under-Secretary (Competition and Consumer Affairs), Department of Trade and Industry

The Commission has made it very clear that, if the court comes to a decision that the community pharmacies deem favourable—the same decision at which it arrived, having weighed up the evidence, the last time that it considered the matter—and if due processes have been followed, it should be satisfied. That is an important point. We went into this matter in some detail in Committee.

Photo of Nigel Griffiths Nigel Griffiths Parliamentary Under-Secretary (Competition and Consumer Affairs), Department of Trade and Industry

I shall not let the hon. Gentleman detain the House further, given that his questions as a member of the Committee that considered the Bill were answered.

The do-nothings when they were in government are lecturing us about doing something. Owing to the inadequacies of Opposition Members' explanations in favour of the amendment and the new clause and the patent lack of support from the Community Pharmacy Action Group, I urge the House to reject the amendments.

Photo of Oliver Letwin Oliver Letwin Opposition Spokesperson (Constitutional Affairs, Scotland and Wales)

I hope that the Minister will answer this question. If he is saying that article 85 extends into activities that do not affect interstate trade, how can the prohibition clause that he is enacting be necessary?

Photo of Nigel Griffiths Nigel Griffiths Parliamentary Under-Secretary (Competition and Consumer Affairs), Department of Trade and Industry

The hon. Gentleman was honest enough to say to the House that he might be wrong. He is completely and utterly wrong in this matter. I wonder whether his lack of a grasp of these issues was the reason why he was moved off the Committee.

There is no support for the amendments. Indeed, I have a card—I suspect that the right hon. Member for Wokingham does not have one—from David Sharpe of the Community Pharmacy Action Group, thanking me for my support for community pharmacies. The number that I rang this morning was that of the group's legal adviser, Sue Sharpe. We have support for our policy; no one supports the Opposition's amendment and new clause.

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

What a dreadful statement from the Minister. He ended with a strange statement that no one supports the amendments. We are shortly to show that quite a few Members support them. Many people outside the House want a solution to the problem, and the Government have left them without one.

I shall deal briefly with the Minister's attempt at a response. He said that I have made no representations to Brussels or to British competition authorities. I have made endless representations through debates on this Bill. As the shadow spokesman responsible for such matters, I believe that the right way in which to make representations is through the House, when parliamentary opportunity presents itself. I know that the Government do not like the House—but we do. This is a proper way in which to proceed.

The Minister said that a certain number of pharmacies closed while I was in the Cabinet, and that that proves that the outgoing Government did not care. It is not possible to prevent some pharmacies closing for commercial reasons. We are debating not whether the Minister can prevent commercial closures—I am sure that he will not be able to do so—but whether he can prevent deliberate closures on top of those that will be forced through as a result of the Bill and his inability to sort things out in Brussels. He has not confirmed the figures that have been bandied about in the trade, suggesting that perhaps 3,000 pharmacies will close as a result of the legislation and of the Brussels decision that he fears.

The Minister asked why I have not made representations to Brussels. There is no need to do so at the moment because, at the moment, the issue can and should be sorted out here, in the United Kingdom—either at the restrictive practices court or in the House by suitable amendment to legislation.

The Minister and I agree on one thing: community pharmacies will be very important to health care and health services in the next century. That makes the Government's attitude even more stunning. As my hon. Friend the Member for West Dorset (Mr. Letwin) said, pharmacies provide a very important service in smaller market towns and the suburbs. If they are removed or destroyed by the Government, Brussels or some combination of the two, considerably more cost will fall directly on the health service as it struggles to replace the services.

Neither my hon. Friend the Member for West Dorset nor I come easily to defending practices which, in all other industries and areas, we are happy to see go—and which, at times, we have helped to go. Normally, we prefer open, competitive markets, where prices and services are determined in the marketplace by people spending their money as they see fit. We make an exception for this issue. I urge the House, knowing, as it does, that both my hon. Friend and I nearly always come down on the side of free markets and complete choice, to think very carefully before rejecting the amendment. I stressed to the House—and shall do so again—that we are satisfied of two things: first, that there is quite enough price choice in the market for those who think that price is the most crucial aspect. Secondly, such community services are important and would be much more expensive to provide at the taxpayer's expense if they are demolished as a result of this ill-considered legislation.

I shall pass over the Minister calling our actions a political stunt; that is not worthy of him or of the Government whom he serves. We are seriously arguing a case for many small businesses in our communities that need some help and are looking to the Government for it—the Government whom they thought might represent them.

I agree with the Minister that the effect of the amendment would be to stop proceedings in the court. That is the point; the idea of the amendment is to settle the matter following democratic debate in the House of Commons. We could always return to it if we had second thoughts, if the commercial and service argument had moved on.

Photo of Andrew Lansley Andrew Lansley Vice-Chair, Conservative Party

Does my right hon. Friend agree that if the Government object to the amendment on the ground that it would stop proceedings in the court and would lead to intervention by the Commission, they could take the route of new clause 4, which would not stop proceedings in the court?

Photo of John Redwood John Redwood Shadow Secretary of State for Trade and Industry

Indeed; I am grateful to my hon. Friend for clarifying that point. That was my understanding of his new clause. The Minister seems to have a different view of it.

I gave the Minister due notice in Committee of the problems with Brussels and how I, on behalf of many people, expected the Government to go to Brussels to try to get a better deal for our pharmacies and to sort the matter out for them. I did not want the House to be left with Hobson's choice—either accepting my amendment then worrying about what Brussels might do as a results of our actions, or not being able to do anything at all to help community pharmacies. The inaction of the Minister and his colleagues places us in such a position.

If the Minister had taken my advice in Committee, he would by now have had productive discussions in Brussels. He would have explained that the practice has not driven a coach and horses through Brussels competition law during our membership of the Community. He would have explained that the practice matters to people in Britain—and that, for once, he could swing the will of the whole Parliament in favour of keeping our community pharmacies. He could surely have pleaded for some special treatment—an exemption, an agreement that the practice was in the public interest, not against it. Evidence from the previous Restrictive Trade Practices Act case in Britain and the previous RTPA finding were already available.

There was a most extraordinary dialogue on the Government Benches on the legal position of article 85 and direct action under the treaty. Of course my hon. Friend the Member for West Dorset is right: the idea of the treaty, as set out by the founding fathers and in the debates when we joined the European Community, was to regulate competition between states and between firms in different member states. There was no presumption at all that the organisation also had to interfere in intrastate trading.

We wish to make clear that we believe that the measure is an extension of jurisdiction from Brussels and that it is about intrastate trade. The Minister needs to propose new legislation because the European Community should not have that power to start with. There is, as has been said, a jurisdictional hurdle, which we are addressing. The Government have got it wrong, and have misinterpreted the matter. They should not allow Brussels to intervene in this case and they should accept our amendment. We urge the House tonight to do something decent for the retail pharmacies and for health care in our country. The only way to do that now is to accept the Opposition amendment.

Question put, That the amendment be made:—

The House divided: Ayes 161, Noes 328.

Division No. 330][7 pm
AYES
Ainsworth, Peter (E Surrey)Gale, Roger
Allan, RichardGarnier, Edward
Amess, DavidGeorge, Andrew (St Ives)
Ancram, Rt Hon MichaelGibb, Nick
Arbuthnot, JamesGill, Christopher
Atkinson, David (Bour'mth E)Gillan, Mrs Cheryl
Baker, NormanGorman, Mrs Teresa
Beggs, RoyGorrie, Donald
Beith, Rt Hon A JGreen, Damian
Beresford, Sir PaulGrieve, Dominic
Blunt, CrispinHamilton, Rt Hon Sir Archie
Body, Sir RichardHammond, Philip
Boswell, TimHancock, Mike
Bottomley, Peter (Worthing W)Harris, Dr Evan
Brake, TomHarvey, Nick
Brand, Dr PeterHayes, John
Brazier, JulianHeald, Oliver
Breed, ColinHeathcoat-Amory, Rt Hon David
Brooke, Rt Hon PeterHogg, Rt Hon Douglas
Browning, Mrs AngelaHoward, Rt Hon Michael
Bruce, Ian (S Dorset)Howarth, Gerald (Aldershot)
Bruce, Malcolm (Gordon)Hughes, Simon (Southwark N)
Burnett, JohnHunter, Andrew
Burns, SimonJack, Rt Hon Michael
Burstow, PaulJackson, Robert (Wantage)
Cable, Dr VincentJenkin Bernard
Campbell, Menzies (NE Fife)Jones, Nigel (Cheltenham)
Cash, WilliamKeetch, Paul
Chapman, Sir Sydney (Chipping Barnet)Kennedy, Charles (Ross Skye)
Key, Robert
Chidgey, DavidKing, Rt Hon Tom (Bridgwater)
Chope, ChristopherKirkbride, Miss Julie
Clappison, JamesKirkwood, Archy
Clarke, Rt Hon Kenneth (Rushcliffe)Lait, Mrs Jacqui
Lansley, Andrew
Clifton-Brown, GeoffreyLeigh, Edward
Collins, TimLetwin, Oliver
Colvin, MichaelLewis, Dr Julian (New Forest E)
Cotter, BrianLilley, Rt Hon Peter
Cran, JamesLivsey, Richard
Curry, Rt Hon DavidLloyd, Rt Hon Sir Peter (Fareham)
Davey, Edward (Kingston)Llwyd, Elfyn
Davies, Quentin (Grantham)Loughton, Tim
Davis, Rt Hon David (Haltemprice)Luff, Peter
Donaldson, JeffreyMcIntosh, Miss Anne
Dorrell, Rt Hon StephenMacKay, Andrew
Duncan, AlanMcLoughlin, Patrick
Duncan Smith, IainMadel, Sir David
Evans, NigelMajor, Rt Hon John
Ewing, Mrs MargaretMates, Michael
Fabricant, MichaelMawhinney, Rt Hon Sir Brian
Fallon, MichaelMay, Mrs Theresa
Fearn, RonnieMichie, Mrs Ray (Argyll & Bute)
Fisher, MarkMoore, Michael
Flight, HowardMoss, Malcolm
Forth, Rt Hon EricNicholls, Patrick
Foster, Don (Bath)Oaten, Mark
Fowler, Rt Hon Sir NormanÖpik, Lembit
Fox, Dr LiamOttaway, Richard
Fraser, ChristopherPage, Richard
Prior, DavidTaylor, John M (Solihull)
Randall, JohnTaylor, Matthew (Truro)
Redwood, Rt Hon JohnTownend, John
Rendel, DavidTredinnick, David
Robathan, AndrewTrend, Michael
Robertson, Laurence (Tewk'b'ry)Tyler, Paul
Robinson, Peter (Belfast E)Tyrie, Andrew
Rowe, Andrew (Faversham)Viggers, Peter
Ruffley, DavidWallace, James
Russell, Bob (Colchester)Wardle, Charles
St Aubyn, NickWebb, Steve
Salmond, AlexWells, Bowen
Sanders, AdrianWhittingdale, John
Sayeed, JonathanWiddecombe, Rt Hon Miss Ann
Shephard, Rt Hon Mrs GillianWigley, Rt Hon Dafydd
Simpson, Keith (Mid-Norfolk)Willetts, David
Smith, Sir Robert (W Ab'd'ns)Willis, Phil
Spelman, Mrs CarolineWinterton, Mrs Ann (Congleton)
Spicer, Sir MichaelYeo, Tim
Spring, RichardYoung, Rt Hon Sir George
Steen, Anthony
Streeter, GaryTellers for the Ayes:
Syms, RobertMr. Nigel Waterson and
Mr. Stephen Day.
NOES
Abbott, Ms DianeClarke, Charles (Norwich S)
Ainger, NickClarke, Rt Hon Tom (Coatbridge)
Ainsworth, Robert (Cov'try NE)Clelland, David
Alexander, DouglasClwyd, Ann
Allen, GrahamCoaker, Vernon
Anderson, Janet (Rossendale)Coffey, Ms Ann
Armstrong, Ms HilaryCohen, Harry
Ashton, JoeColeman, Iain
Atherton, Ms CandyColman, Tony
Atkins, CharlotteCooper, Yvette
Austin, JohnCorbett, Robin
Banks, TonyCorbyn, Jeremy
Barron, KevinCorston, Ms Jean
Battle, JohnCousins, Jim
Bayley, HughCranston, Ross
Beard, NigelCrausby, David
Beckett, Rt Hon Mrs MargaretCryer, John (Hornchurch)
Begg, Miss AnneCunliffe, Lawrence
Bell, Stuart (Middlesbrough)Cunningham, Rt Hon Dr John (Copeland)
Benn, Rt Hon Tony
Bennett, Andrew FCunningham, Jim (Cov'try S)
Benton, JoeCurtis-Thomas, Mrs Claire
Bermingham, GeraldDavey, Valerie (Bristol W)
Best, HaroldDavidson, Ian
Betts, CliveDavies, Rt Hon Denzil (Llanelli)
Blackman, LizDavies, Geraint (Croydon C)
Blizzard, BobDavies, Rt Hon Ron (Caerphilly)
Blunkett, Rt Hon DavidDawson, Hilton
Boateng, PaulDean, Mrs Janet
Borrow, DavidDenham, John
Bradley, Keith (Withington)Dismore, Andrew
Brinton, Mrs HelenDobson, Rt Hon Frank
Brown, Rt Hon Nick (Newcastle E)Donohoe, Brian H
Brown, Russell (Dumfries)Doran, Frank
Browne, DesmondDowd, Jim
Burden, RichardDrew, David
Burgon, ColinDunwoody, Mrs Gwyneth
Butler, Mrs ChristineEagle, Angela (Wallasey)
Byers, StephenEagle, Maria (L'pool Garston)
Campbell, Mrs Anne (C'bridge)Edwards, Huw
Campbell-Savours, DaleEfford, Clive
Canavan, DennisEllman, Mrs Louise
Caplin, IvorEnnis, Jeff
Casale, RogerEtherington, Bill
Caton, MartinFatchett, Derek
Chapman, Ben (Wirral S)Field, Rt Hon Frank
Chisholm, MalcolmFisher, Mark
Church, Ms JudithFitzpatrick, Jim
Clark, Rt Hon Dr David (S Shields)Fitzsimons, Lorna
Clark, Paul (Gillingham)Flint, Caroline
Flynn, PaulKumar, Dr Ashok
Follett, BarbaraLadyman, Dr Stephen
Foster, Michael Jabez (Hastings)Lepper, David
Foster, Michael J (Worcester)Leslie, Christopher
Foulkes, GeorgeLevitt, Tom
Fyfe, MariaLewis, Ivan (Bury S)
Galbraith, SamLewis, Terry (Worsley)
Gapes, MikeLinton, Martin
Gerrard, NeilLivingstone, Ken
Gibson, Dr IanLloyd, Tony (Manchester C)
Gilroy, Mrs LindaLock, David
Godman, Dr Norman ALove, Andrew
Goggins, PaulMcAllion, John
Golding, Mrs LlinMcAvoy, Thomas
Gordon, Mrs EileenMcCabe, Steve
Griffiths, Jane (Reading E)McCafferty, Ms Chris
Griffiths, Nigel (Edinburgh S)McCartney, Ian (Makerfield)
Griffiths, Win (Bridgend)McDonagh, Siobhain
Grocott, BruceMacdonald, Calum
Grogan, JohnMcDonnell, John
Gunnell, JohnMcFall, John
Hain, PeterMcGuire, Mrs Anne
Hall, Mike (Weaver Vale)McIsaac, Shona
Hall, Patrick (Bedford)McKenna, Mrs Rosemary
Hamilton, Fabian (Leeds NE)McLeish, Henry
Hanson, DavidMcNulty, Tony
Heal, Mrs SylviaMcWilliam, John
Healey, JohnMahon, Mrs Alice
Henderson, Ivan (Harwich)Mallaber, Judy
Hepburn, StephenMandelson, Peter
Heppell, JohnMarsden, Paul (Shrewsbury)
Hesford, StephenMarshall, David (Shettleston)
Hewitt, Ms PatriciaMarshall, Jim (Leicester S)
Hill, KeithMarshall-Andrews, Robert
Hinchliffe, DavidMartlew, Eric
Hodge, Ms MargaretMeacher, Rt Hon Michael
Hoey, KateMeale, Alan
Home Robertson, JohnMerron, Gillian
Hood, JimmyMichael, Alun
Hoon, GeoffreyMichie, Bill (Shef'ld Heeley)
Hope, PhilMilburn, Alan
Hopkins, KelvinMiller, Andrew
Howarth, Alan (Newport E)Mitchell, Austin
Howarth, George (Knowsley N)Moffatt, Laura
Howells. Dr KimMoran, Ms Margaret
Hughes, Ms Beverley (Stretford)Morgan, Rhodri (Cardiff W)
Hughes, Kevin (Doncaster N)Morley, Elliot
Humble, Mrs JoanMorris, Ms Estelle (B'ham Yardley)
Hurst, AlanMorris, Rt Hon John (Aberavon)
Hutton, JohnMudie, George
Iddon, Dr BrianMullin, Chris
Illsley, EricMurphy, Denis (Wansbeck)
Jackson, Ms Glenda (Hampstead)Murphy, Jim (Eastwood)
Jackson, Helen (Hillsborough)Murphy, Paul (Torfaen)
Jamieson, DavidNaysmith, Dr Doug
Jenkins, BrianNorris, Dan
Johnson, Alan (Hull W & Hessle)O'Brien, Bill (Normanton)
Johnson, Miss Melanie (Welwyn Hatfield)O'Brien, Mike (N Warks)
O'Hara, Eddie
Jones, Barry (Alyn & Deeside)Olner, Bill
Jones, Mrs Fiona (Newark)Organ, Mrs Diana
Jones, Helen (Warrington N)Osborne, Ms Sandra
Jones, Ms Jenny (Wolverh'ton SW)Palmer, Dr Nick
Pearson, Ian
Jones, Jon Owen (Cardiff C)Pendry, Tom
Jones, Dr Lynne (Selly Oak)Pickthall, Colin
Jones, Martyn (Clwyd S)Pike, Peter L
Jowell, Ms TessaPlaskitt, James
Kaufman, Rt Hon GeraldPollard, Kerry
Keeble, Ms SallyPound, Stephen
Kemp, FraserPowell, Sir Raymond
Kennedy, Jane (Wavertree)Prentice, Gordon (Pendle)
Kidney, DavidPrimarolo, Dawn
Kilfoyle, PeterProsser, Gwyn
King, Andy (Rugby & Kenilworth)Purchase, Ken
King, Ms Oona (Bethnal Green)Quin, Ms Joyce
Quinn, LawrieStrang, Rt Hon Dr Gavin
Radice, GilesStraw, Rt Hon Jack
Rapson, SydSutcliffe, Gerry
Raynsford, NickTaylor, Rt Hon Mrs Ann (Dewsbury)
Reed, Andrew (Loughborough)
Roche, Mrs BarbaraTaylor, Ms Dari (Stockton S)
Rogers, AllanTaylor, David (NW Leics)
Rooker, JeffTemple-Morris, Peter
Rooney, TerryThomas, Gareth R (Harrow W)
Ross, Ernie (Dundee W)Timms, Stephen
Rowlands, TedTipping, Paddy
Roy, FrankTodd, Mark
Ruane, ChrisTouhig, Don
Ruddock, Ms JoanTrickett, Jon
Ryan, Ms JoanTurner, Dennis (Wolverh'ton SE)
Salter, MartinTurner, Dr Desmond (Kemptown)
Sarwar, MohammadTurner, Dr George (NW Norfolk)
Savidge, MalcolmTwigg, Derek (Halton)
Sawford, PhilTwigg, Stephen (Enfield)
Sedgemore, BrianVaz, Keith
Shaw, JonathanVis, Dr Rudi
Sheerman, BarryWalley, Ms Joan
Sheldon, Rt Hon RobertWard, Ms Claire
Skinner, DennisWatts, David
Smith, Rt Hon Andrew (Oxford E)White, Brian
Smith, Angela (Basildon)Whitehead, Dr Alan
Smith, Rt Hon Chris (Islington S)Wicks, Malcolm
Smith, Miss Geraldine (Morecambe & Lunesdale)Williams, Rt Hon Alan (Swansea W)
Smith, John (Glamorgan)Williams, Alan W (E Carmarthen)
Smith, Llew (Blaenau Gwent)Wilson, Brian
Snape, PeterWinnick, David
Soley, CliveWinterton, Ms Rosie (Doncaster C)
Southworth, Ms HelenWise, Audrey
Spellar, JohnWood, Mike
Squire, Ms RachelWorthington, Tony
Starkey, Dr PhyllisWright, Anthony D (Gt Yarmouth)
Stevenson, GeorgeWright, Dr Tony (Cannock)
Stewart, David (Inverness E)Wyatt, Derek
Stewart, Ian (Eccles)
Stinchcombe, PaulTellers for the Noes:
Stoate, Dr HowardMr. Greg Pope and
Stott, RogerMs Bridget Prentice.

Question accordingly negatived.