Clause 1 — Office of Fair Trading

Part of Orders of the Day — Enterprise Bill – in the House of Commons at 5:45 pm on 30th October 2002.

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Photo of John Redwood John Redwood Conservative, Wokingham 5:45 pm, 30th October 2002

I have declared my interest in the register. I was a fellow of an Oxford college that received an application from Mr. John Vickers for a fellowship by examination. As one of those who voted when he became a fellow of that college, I have the greatest regard for his intellectual ability and the high standard of his written work. I have since got to know him rather better and I also have a high regard for his fairness of mind and his independence, so my remarks are in no way an aspersion upon the present personality in the role. When legislating on such a powerful position, however, it is incumbent on the House to think about what might be needed were a less suitable candidate to be in the position at some future date, or were some unexpected events to transpire that, by definition, we cannot—and would not—forecast today given the personalities involved. To have good and fair law, it is important to think about what would happen should there be problems with the personality and decisions of the director general. I do not think that that has been adequately covered so far by the legislation or by ministerial statements.

The most obvious way in which power is sensibly limited in a pluralistic democracy is through competition. The irony of this post is that we are creating a monopoly to enforce competition on the commercial world. It is a paradox rather than a contradiction. Much as I admire competition, I would not want to advocate two or three offices of fair trading. That might be taking a good thing a little too far. However, that means that the most obvious way to control power, which we are rightly recommending to the private sector, cannot apply in this case.

The Minister may say that legal action could be taken if individual companies or industries do not like the way in which verdicts and judgments are going. There are legal remedies, but often it is not good practice, even for a powerful company, to take a regulator to court— it prejudices the relationship considerably. Many businesses and industries understand that they have to live with these regulators for the foreseeable future and are naturally reluctant to go to court.

There are appeals procedures against the judgments of the competition authorities, which are welcome and very necessary, but which are not sufficient for all the circumstances that might arise if a director general has gone wrong and the concentration of power is being abused. That is the situation that my hon. Friends the Members for Blaby (Mr. Robathan), for Cities of London and Westminster (Mr. Field) and for Huntingdon (Mr. Djanogly) rightly said requires special attention.

Splitting the roles could be of some assistance. There would be another senior figure to whom Ministers, the public and others could turn if it were felt that a director general had become unreasonable or unfair and was pushing the power too far. That provision would provide a balance or check in addition to the court and appeal system, which applies in some cases but not others. I want the Minister to reconsider all those factors because the Government have removed one of the most obvious ways in which this used to be done. They have decided that Ministers and politicians are particularly dangerous beings—I can understand why, given some of the Ministers that we have, although I am not commenting particularly on the present Minister. As a democrat before anything else, I believe that the correct way to control the power of powerful regulators is through democratic accountability to Ministers and this House, but the Government have made a series of legislative manoeuvres that will limit the power of politicians to intervene and, therefore, the power of the House to hold the regulator to account. That is a pity. In that context, I urge the Minister to think again about the Opposition's reasonable suggestion that a countervailing power should perhaps be introduced by having another senior person in the regulatory system who could be a court of appeal—a second place where one could go for informal redress and someone who could ultimately take action if the director general went over the top, became systematically unreasonable or became too powerful a figure.

I can understand why the Minister might not want to retrace steps by increasing the accountability of the regulator to this House and to Ministers, although that is a pity, so the second best answer is the one that my colleagues recommended so strongly and I urge the hon. Lady to think again.