Clause 11 - Super-complaints to the OFT

Enterprise Bill – in a Public Bill Committee at 9:30 am on 18th April 2002.

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Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne 9:30 am, 18th April 2002

I beg to move amendment No. 19, in page 5, line 6, leave out '90' and insert '60'.

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

With this it will be convenient to take amendment No. 25, in page 5, line 13, leave out subsection (4).

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

Clause 11 is crucial, as it deals with super complaints. The amendments have slightly different functions: one would reduce the period for responding to a complaint from 90 days to 60 days; the other would remove subsection (4), which allows the Secretary of State to substitute any period for the period set out in the Bill.

We discussed the need to ensure that super complaints, stop now orders and Office of Fair Trading investigations do not impose unnecessary burdens and costs on business, even if they are unobjectionable or a good thing. During our lively debate, it was clear that a deep, philosophical difference split the Committee, and the Liberal Democrat party, down the middle. [Interruption.] The hon. Member for Orkney and Shetland (Mr. Carmichael) did not attend that sitting, so it would be fascinating to know whether he can break the tie among his colleagues, who seem to have different views. Naturally, it is a pleasure to have him with us.

Those with old and new Labour tendencies are happy to heap ever more burdens on business—probably because they believe that business deserves it—and have no concern for the results. The first instinct of others—the official Opposition—is to check whether the cost-benefit ratio is out of kilter, resulting in the burdens on business being excessive. I leave aside another great theme that runs through this Bill and much of the Government's legislation; the law of unintended consequences.

In a sense, that is rendered irrelevant by yesterday's events. As Mr. Digby Jones of the CBI said in response to the Budget:

''there will be deep dismay at the net increase of some £2.5 billion in the cost of doing business in Britain''.

All our deliberations on the so-called Enterprise Bill must be seen against that background.

The Bill rightly sets out a period within which a

response to a super complaint must be received. The OFT must indicate what, if any, action it intends to take in response to that complaint. We deal with all these issues on the hopeful assumption that the resources, including staff, will be available to ensure that the OFT can deal with them. I suspect that there will be a rush of super complaints from the designated bodies. I will discuss who may be a designated body in a moment. The consumer organisations, the most likely candidates, are keen, to put it mildly, on the new provision. The OFT will therefore suddenly find its in-tray filling up. Let us hope that it is in a position to respond rapidly to the complaints.

Having said that, we believe that once things have settled down, the OFT should be able to respond more quickly. If a case is serious enough to form the basis of a super complaint, it must mean one or both of two things: first, it is serious matter affecting many consumers up and down the land, and secondly, because it will have taken a while to come to the attention of trading standards officers, Members of Parliament, consumers associations or whomsoever, the problem will have been in train for some time and will need addressing.

We have plumped for a period of 60 days, so that the response is fairly rapid. It does not have to be the final word on the matter, but it should be possible within that period for the OFT to take at least a prima facie view—I assume that is what is envisaged—on whether the matter should be pursued. The complainant organisation and the consumers that it represents can then be assured that the issue will be taken further.

We agree with having a limit on the period of response for another reason. Companies should not have to contend with a sword of Damocles hanging over them; an open-ended risk of being in jeopardy of investigation. Companies should be told quickly either that the matter will or will not be pursued, and 60 days is not an unreasonable period. I look forward to hearing the Under-Secretary's response. If she were to argue for an even shorter period, we might be prepared to accept it.

Amendment No. 25 deals with the Secretary of State's powers to change this period. Clause 11(4) refers to

''substituting any period for the period for the time being specified''—

90 days—but should mean substituting only a shorter period. The clause does not say that. Despite the scramble to table amendments on other subjects as a result of the Government's own actions, we should have tabled an amendment to that effect.

I hope to receive the Under-Secretary's assurance that the Government envisage reducing the period only when the OFT has bedded down with its new functions, the staff is in place and everything is running efficiently. It would be disappointing to consumer bodies—particularly the designated ones—as well as to us, if the OFT used the excuse of pressure of work or inadequate resources to extend the period. By definition, if dealing with super complaints is to

have the dramatic effect that the Government promise, the process must surely move swiftly. The OFT may have the best intentions in the world, but we should be cautious about this provision.

Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon

In that context, it is interesting to note that with respect to the preliminary investigation—before the statute comes into force—of dentistry, the OFT answered the complaint exactly within the 90-day period. Will the Under-Secretary confirm that that is how it will be done in future? If so, 90 days, as opposed to a shorter period, becomes a highly pertinent issue.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

My hon. Friend has examined the dentistry complaint in greater detail than most of us, for which we are all deeply grateful to him. If the dentistry complaint is punted as the sort of matter that will be handled under clause 11, it is a tad disappointing, as my hon. Friend suggested, that it took right up to the wire—the full 90 days—for the OFT to respond. Clearly, it was driven not to take beyond 90 days, which would have been poor salesmanship in the context of this Bill. However, it is unfortunate that the OFT took that long when it does not yet have the panoply of powers and functions that we are proposing to heap on it and when, by definition, it is considering only one or two prototype investigations. There is a concern. I do not want to overstate it, but I will be interested to hear what other Members and the Under-Secretary have to say.

Photo of Mr Tony McWalter Mr Tony McWalter Labour/Co-operative, Hemel Hempstead

I have not yet had a chance to say this, but I am pleased to serve under your chairmanship, Mr. Beard.

Clause 11 is obviously important, but a series of amendments have been tabled, including amendment No. 19, which would have the effect of, to use a dentistry analogy, drawing the teeth of the provision. I hope that my hon. Friend the Under-Secretary will resist many of the amendments, even though they are backed by, for example, the Finance and Leasing Association, an estimable body. However, it would not be in the interests of the consumer for such tooth-drawing to be allowed.

The general character of much of the Opposition's response to the Bill has been to consider the effects of an investigation on legitimate businesses. That is extraordinarily back-to-front thinking, because the provisions are designed to deal with businesses that are operating illegitimately or which prompt a prima facie case for thinking that. If no business ever worked illegitimately, there would be no need for the Bill. It is because uncompetitive or, as I have said before, nefarious practices occur that we need the Bill, and I find it absurd that the Opposition consistently harp on about the Bill's burden on business. If the bodies that are involved with the Competition Commission and the OFT carry out their duties reasonably respectably, the Bill's provisions will bear harshly on illegitimate businesses and lightly on those that are carrying out their competitive functions honestly and genuinely.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

The hon. Gentleman must accept that his point could apply to almost any piece of

legislation. If we were considering a Bill that dealt with burglary, it would be only reasonable to examine the rights and protection of innocent people as much as ensuring that burglars were convicted. Other parts of the Bill include criminal sanctions, and his point could apply to any legislation that carries sanctions.

Photo of Mr Tony McWalter Mr Tony McWalter Labour/Co-operative, Hemel Hempstead

I agree, but all of the Opposition contributions have, to use the hon. Gentleman's example, factored burglars out of the picture almost entirely. He even said that his first response was to examine the effect on business without differentiating between legitimate businesses, which the Bill is designed to protect, and illegitimate businesses, which the Bill is designed to nail. He also spoke about the idea that an extensive series of victims of practice would be needed before a super complaint was put forward. That should not be the case.

Two months ago, an investigation by The Guardian found that a mobile phone company had decided that anyone who cancelled a contract would be slammed with a bill that was almost unintelligible, which would be followed a few days later by a threat to take the person to county court. Furthermore, the company decided to contact all the credit agencies to try to scupper the credit ratings of those who had had the misfortune to have a contract with it. As a Member of Parliament, I have received several complaints from constituents who have been victims of that company.

The Bill is designed to address that sort of practice. This country is fortunate in that we have tremendously strong and honourable consumer protection bodies. I am not sure whether I should declare an interest, in that I subscribe to Which? magazine and the Consumers Association. I suspect not, but the quality of their investigations and work is such that we should be grateful to have the opportunity to avail ourselves of their expertise, and that of similar bodies, in considering the Bill.

Amendment No. 19 would reduce the time within which a response must be published from 90 to 60 days, but when there is a novel practice such as I have described, it takes a significant time to work out the company's modus operandi. I did not have the full resources of the OFT, but I spent a considerable time trying to find out how extensive the practice was—and whether it was a one-off or there was some peculiarity in a particular office of the company—before I decided to raise the matter in Parliament. I did so because the practice seemed to be widespread and not related to a particular functionary of the company.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne 9:45 am, 18th April 2002

As always, I am following the hon. Gentleman's reasoning closely, but I cannot understand why it would not be a good thing for the consumers as well as perhaps the businesses involved in that scam, which sounds quite serious, to have a more rapid response. Is the hon. Gentleman not looking a gift horse in the mouth?

Photo of Mr Tony McWalter Mr Tony McWalter Labour/Co-operative, Hemel Hempstead

As hon. Members will know, the problem is that when MPs raise these issues with companies, some do not reply at all and some say that a particular employee has been exceeding their duties. Indeed, that was the standard response of the

company concerned. It was only the full investigation by The Guardian, which must have taken longer than 60 days, that made me and my constituents realise that there had been a systematic use of powers against the interests of those who were seeking to disentangle themselves from the contracts into which the mobile phone company had ensnared them.

We are talking about businesses that act in such a way. Indeed, the hon. Member for Eastbourne (Mr. Waterson) used the word ''scam''. When I hear about that sort of practice, my first instinct is not to rush for protection, but to try to find out if there have been dubious practices and then to see what the law says can be done about them. As it stands, however, the law is inconsequent in respect of many such practices. Indeed, the hon. Gentleman has tabled an amendment that lists such offences. I welcome that list, as I hope my hon. Friend the Under-Secretary will when we reach that debate.

It is important to act where there are recognised holes in the law and a company is trying not only to profit from them itself, but, as a result, to drive into the ground those other companies that are not willing to use heavy-handed business practices. That needs to be said consistently, because it has not yet been said by the Opposition. It is vital to protect those other companies.

I hope that my hon. Friend the Under-Secretary will address the tenor of the Opposition contributions, which are rather unhelpful, and ensure that super complaints still have teeth after she has tackled the matters to be raised in the debate.

Photo of Alistair Carmichael Alistair Carmichael Shadow Spokesperson (Energy and Climate Change), Liberal Democrat Spokesperson (Energy and Climate Change)

I echo much of what the hon. Member for Hemel Hempstead (Mr. McWalter) said. I go along with the hon. Member for Eastbourne inasmuch as he seemed to be saying that the amendments seek to strike a balance. I want to ensure that in striking such a balance, super complaints and their operation will be effective. Amendment No. 19 would emasculate the effective operation of the super complaints procedure.

Like all hon. Members I bring some baggage to the proceedings: I worked as a prosecutor in Scotland as part of the procurator fiscal service. In Scotland, when a person is remanded in custody prior to trial, proceedings must be commenced within 110 days, which means that an indictment must be served within 80 days. My remarks are in that context, in that I know from personal experience that even the preparation of a not especially complex fraud case within 80 days is exceptionally taxing and sometimes well nigh impossible. Super complaints are more complex than the average fraud. The OFT will do well to achieve a measured and considered response within 90 days, so I am not minded to support the first of the two amendments in the group.

Amendment No. 25 is a different matter. The hon. Member for Eastbourne said that he hoped that the clause would operate only in reducing the period. However, in the Bill as drafted, that is not the case. I am slightly concerned that under the clause as drafted the super complaints procedure may take off in a way that we do not envisage now. It is not unknown for

there to be questions about the resourcing of Government bodies such as the OFT and I am concerned that the operation of the clause would increase the period simply to alleviate the burden on the OFT. That would be regrettable for the reasons that the hon. Member for Eastbourne outlined; having to fund the OFT so that it could operate efficiently within 90 days would be a good compulsitor on the Government. Therefore, I could not easily allow them the flexibility proposed by subsection (4).

Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon

We have discussed the need to minimise uncertainty for businesses generally. The hon. Member for Hemel Hempstead gave an instance of what could be called a shifty practice, which needs to be looked into. However, there are issues relating to the clause that cause concern. For example, there is no restriction on the number of times that a consumer body can make a complaint, and the OFT has no discretion as to whether or not it makes a preliminary investigation under the 90-day period. It is mandated to do so under the Bill. It must investigate, so companies will necessarily be put at risk of expenses and costs. Those issues are pertinent.

We are talking about a pre-investigation investigation. The hon. Member for Orkney and Shetland touched on that but his comments raised further questions about the criteria that will be used in the context of the pre-investigation. The explanatory notes do not touch on that point. I have not seen it discussed in briefing notes or anywhere else. It would be helpful if the Under-Secretary could tell us what sorts of issues will be considered at the pre-investigation investigation stage. Would the OFT approach the company or other market competitors at this stage?

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

My hon. Friend is developing an interesting argument. Will the OFT be expected to decide that it has an arguable case, a prima facie case, or possibly a lesser case in which there is something further that it wants to investigate? Taking the points made from experience by the hon. Member for Orkney and Shetland, there will otherwise be a temptation to give an answer on the 90th day, which might simply refer people to another answer further down the road such as, ''We are looking at it, we are taking it seriously and we will continue to investigate.''

Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon

That is a very important point. The criteria will be important. We should bear in mind that after the failure of the amendments at our last sitting, we will be dealing with issues that are not held within the current law. This will not simply be a question of competition; it could relate to further issues. The criteria become even more important and will not necessarily be based on existing procedures. I should be grateful for the Under-Secretary's comments on that.

Companies rightly fear that one type of investigation will lead to another. We should consider how the criteria would change if the OFT proceeded to a full investigation. Would there be a change in emphasis or in the way in which it went about things? We should look at the 90-day or 60-day period in the context of the investigation that it leads to.

Mr. McWalter: Does the hon. Gentleman accept that as we are dealing with a super complaint, in a sense it would not bear necessarily on any particular company? The question would be whether a whole sector of companies—for argument's sake, let us say mobile phone companies—had a set of practices that conduced to that sector licensing uncompetitive practice on the part of companies within it. It would not necessarily strike an individual company immediately.

Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon 10:00 am, 18th April 2002

That may well be so, but the example that the hon. Gentleman gave related to one company; what he says would not necessarily be the case. We should look at how those concerns affect companies. Putting it in the context of the fuller investigation, will anything in the Bill restrict the period in which the OFT can mount its full investigation? I have not seen anything but there may be something. Could the Under-Secretary tell us whether the full investigation is in any way restricted? It is all very well arguing whether 60 days or 90 days is more appropriate but if an investigation ends up lasting one year, such as the proposed dentistry case, the argument becomes irrelevant. Such a case could be delayed; what if it extends to two or three years?

It all comes down to the fact that Governments have deep pockets and can afford to keep investigations going for pretty much as long as they want. Companies may not be able to afford endless investigations; or, if they could, they would probably experience a significant dent in their costs. I would appreciate the Under-Secretary's comments on those issues.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

I share the serious concerns that have been expressed. I shall address the amendment, although we also wish to discuss other amendments to clause 11. A stand part debate will be at your discretion, Mr. Beard.

There is increasing concern about the negative publicity created by a super complaint into an industry. It may apply to a raft of companies or to one or two in industries that are perceived as monopolistic. The 90-day moratorium may, as my hon. Friend the Member for Huntingdon (Mr. Djanogly) said, lead to a much longer-lasting inquiry; it may also create increasing uncertainty and allow interested consumer groups and Ministers to play to the gallery in a way similar to the ''rip-off Britain'' campaign on supermarkets in the late 1990s.

Could the Under-Secretary give guidance on what action will be taken within the 90 or 60-day time limit? There is the opportunity to begin a fishing expedition. I would like guidance on how limited the action of the OFT will be in the 90 or 60-day period.

Photo of Huw Irranca-Davies Huw Irranca-Davies Labour, Ogmore

Subsection (4) gives discretion to amend the 90-day period. However, I am sure that the hon. Gentleman would welcome a thorough, detailed investigation of a super complaint rather than a cursory, rushed one. The period of 90 days is wholly appropriate now, to ensure depth and meaning of investigation, but if that changes, it would

be appropriate to change the period. The Local Government Association, for example, has made representations on the issue; it considers 60 days to be appropriate. The hon. Gentleman said in an earlier sitting that one consumer group believed that the approach in the proposed dentistry case to super complaints was indicative of the general approach that would be taken, but that is not necessarily true—

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

Would the hon. Gentleman limit his intervention? It is becoming a speech.

Photo of Huw Irranca-Davies Huw Irranca-Davies Labour, Ogmore

I apologise, Mr. Beard. The Consumer Association said that super complaints

''will concern situations where markets rather than the activities of particular companies fail to work for consumers''.

Subsection (7) gives protection in such situations.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

I hope that future super interventions will be limited to 90 minutes. In fairness to the hon. Member for Ogmore (Mr. Irranca-Davies), I acknowledge his concern. I am trying to discover what type of information will be brought into play during the first period. There is concern that some industries may find themselves under great media fire for high pricing or the way in which they market their products, and the longer the preliminary period, the more we will allow damaging allegations to be made in the public domain.

It is important to ensure that the OFT can investigate only a limited list of infractions within that period. There should be no risk of it examining a considerable amount of documentary evidence and, in effect, taking part in a fishing expedition that will allow it to clamp down even harder. I hope that the Minister will give us some guidance about the operation of the OFT.

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

I am grateful to hon. Members for their thoughtful consideration of the clause and amendments, and for raising such useful issues.

I am glad that there is general support for a deadline. I emphasise that it is a deadline by which the OFT should investigate initial super complaints, not a target. The amendment would shorten that period to 60 days. It is also important to stress that the OFT will be required to give a full and reasoned response to super complaints. As Government Members and the hon. Member for Orkney and Shetland said, it is likely that the quality of that response would be undermined if the OFT did not have enough time to analyse the evidence submitted by the super complainant. I am grateful for the hon. Gentleman's comparison with the timetables for prosecutions in Scotland, which was based on his experience.

The complexity of the issues may slow the process down, but it is important that sufficient time is taken to give a substantive answer. As the hon. Member for Huntingdon said—he is not here at the moment—super complaints are a route into the system for the consumer. They are not part of the system that will still operate. If the OFT accepts a super complaint, it will go through the usual processes. I will discuss later the basis on which the OFT will accept a complaint.

The deadline of 90 days is the right one to give the OFT in such cases. It would not be wise to make cases subject to a tighter time limit at this stage. There are good reasons for that, as my hon. Friend the Member for Ogmore said. However, if it proves to be the case in the light of subsequent experience that super complaints can be investigated properly in a shorter time scale, subsection (4) allows the Secretary of State to vary the statutory deadline, as hon. Members pointed out.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

Surely the Under-Secretary is not saying that under subsection (4) the Secretary of State's powers can be used to change the time in individual cases. I understand the subsection to mean that the Secretary of State's powers can be used to change only the general time limit.

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

Absolutely. I am sorry if I gave rise to any confusion in the hon. Gentleman's mind. I was not implying that the powers related to any specific inquiry, but that they would be based on the experience of how things might work across the board.

There will be a process for designating bodies, the criteria for which will be developed, discussed and consulted on. Designated bodies will be expected to submit a reasoned case in support of their complaint in accordance with the OFT's guidance, which I will come on to later. The consumer body would have to submit considerable resources to produce such a case, so they are unlikely to make frivolous complaints. I urge all Committee members not to assume bad faith on the part of too many people who go through these processes. We expect people to do their best and to want to be seen to be doing their best. In return, they expect their complaints to be treated with the utmost seriousness.

In some cases, rushing to complete a response within 60 days would be detrimental to all parties concerned. A shorter time scale will mean that more cases are likely to require further investigation to ensure that the OFT can make a fully informed decision about what action, if any, may be necessary in response. If the intention of the amendment is to make life easier for firms whose activities might be the subject of a super complaint, which several hon. Members have suggested, it is unlikely to succeed. If there is a case to answer, businesses will need time to respond just as the OFT will need time to complete its analysis. This is a fair time limit for both parties. It is not overgenerous, but I do not believe that we should shorten it now.

Amendment No. 25 seeks to prevent the Secretary of State from altering the time period within which the OFT must respond. As I have said, we intend to enable the Secretary of State to change that time period if experience shows that 90 days is either too lax or too limiting. It could go either way. I hope that we will not find that it is insufficient. But if it were insufficient and perhaps business argued that it was, we might want to alter it. There is always an assumption that it is in someone else's interests. I remind the hon. Member for Eastbourne of his remarks on Tuesday when he said that fair trading was good business, which I believe was a quotation from some of his earlier handiwork on

the subject. Fair trading is good for business and it is good for consumers. The two go hand in hand.

It is important to retain flexibility within the super complaint procedure. After the OFT has looked at several complaints we will be able to see how the procedure is working. We want to keep the whole procedure as flexible as possible so that it can be adapted in light of experience to ensure that super complaints are dealt with in the most effective way. I am sure that we will come on to resourcing more specifically, and it has been mentioned on a number of occasions, but I can assure the Committee that the resourcing will be there to enable the OFT to do a good job. I therefore do not support the amendments.

Turning to the nature of the process, as I have said, there will have to be a reasoned case for the complaint. The OFT will not take further action as a consequence of super complaints that are not well reasoned. The OFT must issue guidance about how those bodies present a reasoned case for complaint.

Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon

I am pleased to hear that, but the Bill does not seem to give the OFT any choice. It states:

''The OFT must, within 90 days after the day on which it receives the complaint''.

Will the Government propose an amendment to that?

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

I regret that I do not entirely follow the hon. Gentleman's question.

Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon

I shall explain. The Minister said that the OFT would not have to consider frivolous complaints made to it.

Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon

So it will have to consider everything.

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

I assume, for the sake of argument, that if an utterly frivolous super complaint were submitted, the OFT could rapidly decide that it did not meet the criteria and dismiss it well within the 90-day time limit. Obviously we do not anticipate that such an event will occur because the reputation of organisations designated to bring forward super complaints will itself be on the line in the way in which they deal with those matters. That will be under the public gaze.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

The Under-Secretary made the point that the OFT will produce guidance on how the system will work. I do not know whether there is any draft guidance floating around that we could get our teeth into. Can she deal with the issue that I raised in an intervention? What hurdle do these complaints have to get over to be pursued? Is it just a good, arguable case? Is it a prima facie case? It is lower or higher than either of those? Those are established tests within the existing legal framework, so surely the OFT must give some guidance to complainants about what level of proof they must produce.

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

The requirement is that the OFT will issue guidance about how bodies must present a reasoned case for the complaint. The hon. Gentleman referred to criteria used for legal cases, but this is not a legal case as such. The OFT will publish guidance on what it expects a super complaint

to include; for example, how the presentation of a reasoned case should be made.

Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon 10:15 am, 18th April 2002

On that specific point, will the OFT be able to have a relationship with the relevant consumer body, outside the course of the investigation? A complaint is likely to arise following a campaign, for example by Which? magazine. It is highly unlikely that a consumer body will wake up one day and decide that it will make a complaint about dentists. It is more likely that, after complaints have been made, a newspaper will run a campaign to tell people to which dentist they should go. Will the consumer body be able to approach the OFT before the complaint is made to discuss whether a complaint would be acceptable, or will the relationship be at arm's length, with the body unable to talk to the OFT until the complaint is made?

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

We do not want to set out the criteria for informal discussions, but need to keep them flexible. Obviously the OFT is used to having discussions with consumer bodies because it operates in a related field, so we do not envisage either fixed contact or no contact at all. At the end of the day, the OFT will consider whether there are reasoned cases, and any unsubstantiated or ill-thought-out complaints will not be followed up after initial consideration.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

On a further point, will there be, in a sense, a period of purdah, in that after the trigger mechanism and the 60 or 90-day investigation has begun, super complainants will not have the opportunity to make further representations during that period that might influence the OFT in determining whether there should be a fully fledged investigation? A highly organised consumer campaign could put great political pressure on the OFT during its investigative period, and surely it would be wrong for any party to make further representations after the initial investigation has begun.

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

We do not envisage ongoing involvement. There will be discussion beforehand about what a reasoned case looks like, and published criteria will be discussed beforehand and put out for consultation. Once the complaint is made, there will not be further discussion. The OFT will look at those matters. There is nothing to stop anyone mounting campaigns. Indeed, all Committee members are experts at mounting campaigns and understand those pressures.

One aspect of the changes, which the hon. Member for Cities of London and Westminster (Mr. Field) should bear in mind, is that the removal of politicians from aspects of the process will ensure that the OFT will be as watertight as possible in examining cases and forming judgments, despite any surrounding political campaigning. The grounds for examining a case are whether there is a market problem.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

The Under-Secretary seems to have a low regard for us politicians and our open-mindedness on such matters, but I would like to explore this further. She will understand the concern that if it were made

public that the OFT was investigating a particular industry, as it inevitably will, a large-scale newspaper campaign could follow which might greatly tempt the super complainant body into ensuring that it was seen in the public arena to have teeth. That body might then put forward a petition or make further representations during the 90-day period in a way that was potentially highly prejudicial to the industry being investigated. I wanted the Under-Secretary's assurance that the OFT would not be subject to media pressure and to a second bite of the cherry by the complainant who made the initial application that was subject to the 90-day investigation.

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

The reasoned case would be submitted. It is not possible to stop items dropping through the OFT's letterbox but things will not be done on the basis of the super complainant being invited to make further representations. It will be for the OFT to consider the case that has been presented—initially, it must meet the criteria about what the case should look like and how it should be presented—and then to form a view about whether it should go into the normal complaints process which, as the hon. Member for Huntingdon said, is a pre-investigation investigation. If it were accepted that the case was valid, it would be put into the investigation process and go through the normal channels.

Photo of Mr Tony McWalter Mr Tony McWalter Labour/Co-operative, Hemel Hempstead

I invite my hon. Friend not to pursue too closely the precise mechanisms by which super complaints are generated, as there are so many. Many of the Opposition's contributions assume that the investigations will be directed only at legitimate businesses, causing them harassment, and they appear not to trust consumer associations and others.

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

I am grateful for my hon. Friend's encouragement not to go into too much detail, although I understand to some extent why Opposition Members are so concerned about it. However, there will be a public process in which the super complainants will be subject to public scrutiny of how they conduct their role, and guidance will be published about how they will do so. Those bodies will need to have, and to maintain, their credibility by exercising good judgment in how they operate in a public arena. The press and other organisations will have views about these matters and, as my hon. Friend the Member for Hemel Hempstead said in respect of the telephone scams, hon. Members, too, might express their views.

We are in a public environment and public debate is at the core of the matter; the OFT will need to publish its views and plans for any action that it proposes to take. We want to ensure that both sides benefit from the demand for high-quality input and responses that are well judged, well reasoned and in line with publicly published guidance.

Photo of Alistair Carmichael Alistair Carmichael Shadow Spokesperson (Energy and Climate Change), Liberal Democrat Spokesperson (Energy and Climate Change)

I am greatly reassured by what the Minister said. I add my weight to the call to resist the siren voices in the Committee. I am struck by Conservative Members' antagonism to consumer groups, which is entirely unhelpful. To listen to the hon. Members for Cities of London and Westminster and for Huntingdon, one would think that businesses were never involved in lobbying or publicity. If there is

a damaging press campaign, there are already delictual or tortious remedies to companies that are well able to afford them.

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

I am grateful for the hon. Gentleman's support. I shall ask the Committee to reject the amendments. Unfortunately, the hon. Gentleman could not attend the Committee's previous sitting. If he had been present, he would know that Conservative members of the Committee were split on these issues; there was strong advocacy for the consumer voice on the Bill and what the consumer organisations wanted from it. The National Consumer Council strongly supports the super-complaints process, and the hon. Member for Eastbourne earlier extolled the virtues of listening to the consumer's voice on the Bill.

I have dealt with most points raised by hon. Members in their contributions to our interesting debate and I urge the Committee to resist the amendments.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

At least one of my earlier questions has been answered. Clearly the anti-business wing of the Liberal Democrat party is with us this morning; no doubt the pro-business wing will make an appearance later in our deliberations. With all due respect, the hon. Member for Hemel Hempstead was a bit grumpy this morning about an amendment that would shorten the period within which a super complaint would be responded to, but there we are.

Photo of Mr Tony McWalter Mr Tony McWalter Labour/Co-operative, Hemel Hempstead

The hon. Gentleman should know that I am never grumpy.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

Perhaps I should have said dozy. I withdraw the remark unreservedly, though Committee proceedings are subject to qualified privilege when it comes to the law of defamation. There was a little of the same from the Under-Secretary, and rather more of it from the hon. Member for Orkney and Shetland, who complained that it was monstrous that the Opposition were worrying about the effect on business. Yes, we do worry. Business needs its interests looked after—Miss Johnson: Will the hon. Gentleman give way?

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

Let me finish the sentence, or, at least, the clause of the sentence. Given the slap in the face that the Government gave business and industry yesterday, plus all the other accumulated slaps in the face, it is important that somebody here sticks up for business.

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

The hon. Gentleman is being deliberately contentious. Other hon. Members may wish to defend their views on business, but I have certainly not said anything in relation to the hon. Gentleman's belief about our attitude to business that he could attribute to me. Earlier I quoted the hon. Gentleman's words back to him; that fair trading is good business. We strongly believe in supporting good business and all members of the Committee want to give their fullest support to good business. Indeed, good business is often disadvantaged when cheats, scams and frauds in the system prevent the operation of a level playing field. We must ensure that good business does not face such competitive disadvantages.

Mr. Waterson: I promised myself that I would try to avoid using the phrase ''level playing field'' during these debates, but—

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

The Under-Secretary has beaten me to it.

If there was an attempt to misrepresent our views on these matters, it was wrong. It is a question of balance and, for the record—so no one can be in any doubt—we are pro-consumer and pro-business. The Under-Secretary kindly cited a phrase that I had quoted from the then Sir Geoffrey Howe on this very subject.

The Under-Secretary's remarks were helpful, but she has not provided an assurance that the period in question will not be extended. We would greatly welcome a power to reduce the period, but we have had no confirmation from the Under-Secretary—sadly, we have had quite the opposite—that an increase will not take place. We do not oppose the power in itself—we are in favour of it—but we want it to work properly and to ensure that the period for responding does not creep up over the years in response to pressure of work.

An element of confusion remains about the test to be applied. I appreciate that we are not talking about a court of law, but people need to know what level of evidence will be necessary to secure a full inquiry. I hope that the guidance will sort that out in due course. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

I beg to move amendment No. 20, in page 5, line 12, at end insert—

'(3A) In the event that the OFT decides to take no action, and an undertaking has incurred costs as a result of the complaint, the consumer body which made the complaint shall bear the reasonable costs of that undertaking'.

With the help of the hon. Member for Hemel Hempstead and others, I shall try to be brief. Strong views exist on the issue and it is important to reflect both sides of the argument. The CBI believes that under the current system investigations by competition authorities often involve huge costs and other burdens on business. We developed that argument in a different context on Tuesday, so I need not labour the point.

Business is concerned, not unreasonably, that it may become enmeshed in a large Office of Fair Trading investigation into a company or a sector. The hon. Gentleman was probably right in hinting that it is more likely to be into a sector, but it is perfectly possible that an individual company will be responsible for a widespread abuse.

These matters can be long, drawn-out and expensive. Just because the OFT has to respond to the original super complaint within 90 or 60 days does not mean that it will not take a long time to reach a resolution, certainly if the activities of the Serious Fraud Office and others when dealing with competition are anything to go by.

The CBI believes that, where there is a lengthy and expensive investigation but a company is exonerated, there should be compensation. I know that it is stretching the hon. Gentleman's imagination a little to suggest that there are innocent companies out there and that companies will be exonerated on occasion.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

The hon. Gentleman is becoming grumpy again, although not without provocation.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

I hope that the Under-Secretary is not going to start now. It is Thursday and we are all meant to be running down gently towards the weekend. Indeed, the way the Government run their business these days, it is hardly worth the train fare from Eastbourne to come to this place.

We think, as does the CBI, that business should be entitled to some form of compensation. That would also deter frivolous or vexatious complaints. I hope, indeed I have some confidence, that the OFT will be pretty brisk in dealing with the obviously frivolous complaint. One can imagine that some attention-seeking Back Benchers—I will not name names—might run a wholly spurious and unjustified campaign against a particular company. The peg in their press release would be that they were writing an official super complaint to the OFT, when in fact it had no basis.

Photo of Alistair Carmichael Alistair Carmichael Shadow Spokesperson (Energy and Climate Change), Liberal Democrat Spokesperson (Energy and Climate Change)

If the hon. Gentleman's intention were to eliminate vexatious and frivolous complaints, he would certainly have my support. However, the amendment would do much more than that; it relates to any complaint from which no proceeding results. There could be good grounds for the reference being made in the first place. As the Under-Secretary said, the complaint must be well reasoned, but even if it is found after the preliminary investigation not to merit further investigation, is it not right for these concerns to be aired in the first place?

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

I do not think that anyone is saying that concerns should not be aired. The nature of the system is such that there will probably be three categories of complaint. The wholly frivolous and vexatious complaint can be dismissed out of hand and at minimum cost. The very serious complaint, which the legislation is designed to address, will rightly be pursued. Under our amendments, there is no question of compensation in those cases. However, there will be cases in the middle in which there may be grounds for it. This is a matter for much more detailed guidance.

I used the word ''reasonable'' in the amendment. In civil litigation, even if one wins a case hands down—I do not know what the system is in Scotland—one almost never recovers all one's costs. In a sense, that deters both sides from litigation, which must be a good thing. In America, there is usually the opposite situation, in which no recovery of costs is usually permissible. That can encourage people with deep pockets to oppress people with fewer resources.

Mr. Djanogly: The reference that my hon. Friend makes to civil proceedings is relevant. The hon. Member for Orkney and Shetland said that if one had a good case but lost, one should be awarded costs. However, if one goes down the court route and loses, it will not matter if one has a good case—costs will be awarded against the loser. If the case is dropped, for whatever reason, it will not be the company's fault that it was brought in the first place and the company should get costs.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

As the phrase goes in litigation, costs follow the event. If one wins, one gets most of the costs; if one loses, one pays not only one's own but the other side's costs.

Photo of Andy Burnham Andy Burnham Labour, Leigh

Following the logic of the hon. Gentleman's argument, if a complaint against a company were upheld, would he support the company refunding the costs of the consumer body that brought the complaint?

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

I do not have a philosophical problem with that. I do not expect the Under-Secretary to accept the amendment with open arms but I hope that, as part of the guidance, members and potential members of the OFT—such as Mr. Ecclestone—are listening carefully to our debate and considering such issues. If I had to produce the draft guidance, starting with a blank sheet of paper, I would allow a broad area of discretion to award costs or a contribution to costs. Cases that are not frivolous or vexatious but that ultimately prove to have little merit may be investigated at inordinate length. There should be some compensation in such cases.

We will deal with consumer complainant bodies fairly soon—not soon enough for some hon. Members, no doubt. Fortunately, many such organisations are well resourced, with substantial membership and access to other funds. They conduct their business in a professional—to use the word in a complimentary sense—and organised way and they expect to be and are taken seriously by business and industry. It is only right that they bear any contribution to costs that is justified.

Photo of Ken Purchase Ken Purchase Labour/Co-operative, Wolverhampton North East

The hon. Gentleman has expressed admiration for consumer groups that are professional, well-organised and understand the law, but there is a contradiction in extolling the professionalism and good organisation of a consumer group on the one hand and associating it with a frivolous or unnecessary claim against a company on the other. That contradiction gives the hon. Gentleman's game away.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

Uncharacteristically, the hon. Gentleman has not followed my argument. I said that if a claim is clearly frivolous and vexatious, I would expect the OFT to dismiss it out of hand, well within the 90-day period. However, I hope that there will be fewer such claims because of the potential sanction of costs. The amendment would bite in regard to the complaint that was not frivolous or vexatious—although it was rather thin and ultimately did not get anywhere—but was the subject of an investigation. Like the CBI, I believe that there should be a possibility of compensation.

I do not say that my amendment is the be-all and end-all. Indeed, I recognise that consumer organisations do not support it. The National Consumer Council has been extremely helpful—just the sort of professional organisation to which I was referring

—in the run-up to the debate. It is a keen supporter of the super complaint and wants to be a super complainant. It accepts that there are concerns about what lawyers call fishing expeditions—which are not unknown to the legal world—by which legal or investigatory proceedings are started and used as a way of finding the evidence to justify the complaint. It states:

''We also oppose amendment 20 to this Clause which would hinder the ability of consumer bodies to take such action, particularly as they would now know what the 'reasonable costs' might be before taking such an action.''

That is a fair point and it is important to register that concern. Equally, however, the CBI is entitled to register its concern through us and to set out one mechanism for dealing with it. I therefore commend the amendment to the Committee.

Photo of Mr Tony McWalter Mr Tony McWalter Labour/Co-operative, Hemel Hempstead

I shall speak briefly to the amendment. The David of the Consumer Association is taking on the Goliath of business. The amendment effectively says that David has a bigger stone than he used to have, but it should be taken away entirely. It threatens consumer organisations with bankruptcy. The Under-Secretary has already explained the significant constraints on taking decisions to launch super complaints and they are more than enough.

A complaint could be made on reasonable evidence and an investigation of a group of companies, perhaps all employing expensive lawyers, might follow. At the end of the process, a massive bill would have to be faced, perhaps as a result of OFT incompetence. In other words, the complaint might be perfectly reasonable, but not followed through effectively, leaving the consumer organisation saddled with the bill.

My concern is precisely the opposite of the one expressed in the amendment. I should like David to have not just one, but several, stones. What resources will be made available to consumer organisations to help them in their investigation of dubious practices? My amendment would be completely the other way round: David would have two or three stones and Goliath would be rather less well armed.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

On a couple of relatively minor points, first, we must appreciate that the biggest losses are often economic and whether reasonable costs can be quantified is an important issue. I refer to the loss of management time, which is difficult to apply directly to the work undertaken. The opportunity cost in executive time—the executive will have to examine the various papers produced by the case—is a significant factor. Does the Under-Secretary agree—she can make it clear in her reply—that one problem is that potential costs are never-ending? The economic costs under the law of tort or of contract would not be readily obtainable by the party suing in a similar context. The costs would not be caught. We are talking about reasonable costs here, presumably of legal and other

professional advice that is directly contingent on the investigation.

Secondly, I made a comparison on Tuesday with the Monopolies and Mergers Commission, as it was called during my brief legal career, although I think that it is now called something different. I recall that several companies in industry sectors were regularly called before that commission. A raft of different industry sectors were investigated three or four times during a period of 15 or 20 years. For example, the beer industry and the British ice cream industry have had high-profile investigations over the years.

Within this process of super complaints, we may be letting ourselves in for the investigation of particular industries several times in a relatively short period of time. There may be a number of different ongoing inquiries into a particular industry, which may be high profile and have a relatively small number of players. The inquiries could involve prima facie doubt about monopolistic practices. It seems unacceptable that those industries should bear costs on a regular basis, particularly if the OFT kicks the super complainants' concerns into touch every time. Bearing in mind past monopolies and mergers procedures, I would like some guidance as to whether there will be an opportunity for the Government to give thought to ensuring that the costs of repeated investigations are not overly burdensome.

Photo of Ken Purchase Ken Purchase Labour/Co-operative, Wolverhampton North East 10:45 am, 18th April 2002

I came in this morning with a sunny disposition, but I am becoming grumpy. With great respect, I think that the amendment is frivolous. If we were talking about the civil action of some showbiz personality who was upset because his last pop record had been criticised and felt that that had damaged his reputation, he could get on with it and take whatever action he chose. At the end of that litigation, the costs would rightly be awarded as the hon. Member for Eastbourne described.

In this instance, the word reasonable should be used in its fullest sense. It is not reasonable to believe that a responsible, well-organised professional consumer group would take either a frivolous or, in the words already used, a ''thin'' complaint to the OFT. The period of time in which they are to respond would be considerably shortened if there were a frivolous or thin complaint. In the best tradition of these Committees, the amendment is designed to probe. I urge my hon. Friend the Under-Secretary to reject it and Government Members to vote against it. Will the Opposition please withdraw it as quickly as possible?

Photo of Alistair Carmichael Alistair Carmichael Shadow Spokesperson (Energy and Climate Change), Liberal Democrat Spokesperson (Energy and Climate Change)

I, too, oppose the amendment. My concern is that it would seriously emasculate the operation of super complaints. It would act as a significant disincentive to designated consumer bodies in bringing complaints. I have a great deal of sympathy with what the hon. Member for Eastbourne says about vexatious and frivolous complaints, but there ought to be some protection in the process of designation and the requirement for a reasoned complaint.

I envisage the procedure working in this way: a complaint will be made and representations will be

made by the business, industry, or firm concerned. At the stage at which the complaint is made, certain information will be available to the consumer body—probably whatever is publicly available. The business concerned will almost certainly hold information that it will not disclose prior to the starting of the super complaint procedure. When that information is made available to the OFT, it may result in no further action being taken. In that instance, given the information available to the consumer body when it brings the complaint, it is acting in good faith. If, when the OFT performs its role, it is found that no further action is necessary, there is no reason why the consumer body should be liable for costs when it is acting in good faith in that way. It would be a massive disincentive to bringing complaints.

The parallel that has been drawn with the courts in civil proceedings is a bogus analogy; we are dealing with a procedure that the hon. Member for Huntingdon quite rightly called a preliminary investigation. Such a situation will not occur. There is certainly no parallel in Scottish civil procedure and I am not aware of anything south of the border.

The wording of the amendment is very different from what one would have expected, listening to the hon. Member for Eastbourne. All that is required is that the OFT should take no action. For example, action might not be taken if the business concerned admitted what it had done and said that it would not do it again. Even in those circumstances, however, the consumer body that made the complaint

''shall bear the reasonable costs''

under the amendment.

If the hon. Gentleman had restricted the amendment to frivolous or vexatious complaints, I would have had a great deal of sympathy for it. Indeed, with that in mind, I urge the Minister to consider some sort of protection against such complaints. However, the amendment certainly does not have that effect and I cannot support it for that reason.

Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon

The hon. Gentleman discussed the possibility that consumer associations might be made bankrupt because of the amendment. Although they do a marvellous job overall, they will all at any given time have several litigation suits pending against them. In many instances, they settle the complaints and publish apologies in their magazines. It is simply not realistic to think that they never make mistakes. Indeed, companies can be threatened with bankruptcy because of the proceedings. It comes down to where the costs should lie. Should they invariably lie with the companies, with the consumer bodies or, in certain circumstances—I appreciate that the amendment does not say it—with the OFT and the Government? We must consider that question.

I want to discuss whether such investigations are conceptually different from normal OFT investigations. I would say that they certainly are. In the context of how consumer bodies work, the investigations are unlikely to be conducted through the normal OFT course of events, in which it

announces that it is investigating, gets on with it quietly for several months—unless the Serious Fraud Office gets involved—and comes up with its finding. Instead, there is likely to have been correspondence with consumers and possibly campaigns in the newspapers, surveys in consumer magazines and features on programmes such as ''That's Life.''

Photo of Andy Burnham Andy Burnham Labour, Leigh

That was years ago.

Hon. Members:

''Watchdog.''

Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon

Now it is ''Watchdog.''

The environment is very different from that of a standard OFT investigation. The company should have the right to compensation if, after all that, the finding is that the claim was wrong.

Photo of Andy Burnham Andy Burnham Labour, Leigh

Does the hon. Gentleman agree that, even if a complaint is not upheld, the organisation that brought it has served the wider public interest by focusing public debate and attention on business practices and encouraging greater understanding of a particular business?

Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon

There may well be reasons why it is interesting to consider an issue for the reasons that the hon. Gentleman gave. However, if the OFT loses or decides that there is no course of action to be taken, why should the company have paid for the state to investigate? Why should that cost fall to the shareholders of the company or, indeed, consumers? The company must pass on the cost of that investigation to shareholders or consumers through its prices, or go bankrupt. The money has to come from somewhere. The hon. Gentleman made a valid point, but why should the company have to pay if it has not been in the wrong?

Photo of Ken Purchase Ken Purchase Labour/Co-operative, Wolverhampton North East

The hon. Gentleman should think about quantification. Let us take the two cases that have been mentioned. In the frivolous case, I suspect that there would be no inquiries to the companies whatsoever. In the very thin case, there might be a very short correspondence between the OFT and the company complained about, but that would be end of story. Quantify for me, please.

Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon

The hon. Gentleman's argument about the period of time is a good one. I was going to finish with that. If a frivolous pre-investigation were launched within the 90-day period, the cost would be relatively light by the time that the complaint was, in effect, knocked out by the OFT. The Consumers Association would be open to lower costs than it would have been had that investigation run for a long time.

Having listened to the debate, I think that it would be better to pursue the matter by looking at the different periods, as the hon. Gentleman suggests. During the 90-day period, perhaps the consumer body should be liable for costs if the action fails. If the OFT then decides to pursue the matter, perhaps the costs should go to the Government.

Photo of Ken Purchase Ken Purchase Labour/Co-operative, Wolverhampton North East

The amendment deals with cases in which

''the OFT decides to take no action''.

There is no question of proceeding.

Mr. Djanogly: No, as I said. More to the point, the amendment says that the consumer body alone shall bear the cost. I am saying that perhaps that should not be for the consumer body alone. If the OFT decides to continue with the action after the 90-day period, perhaps the OFT—the Government—should pay.

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

First, I re-emphasise the fact that checks are in place, which several of my hon. Friends and the hon. Member for Orkney and Shetland have also emphasised, to ensure that frivolous complaints are not submitted. I believe, along with several of my hon. Friends, in particular my hon. Friend the Member for Wolverhampton, North-East (Mr. Purchase), who has been pursuing the matter, that there should not be any genuinely frivolous complaints, given the guidance and the designation process. I take the word ''frivolous'' as meaning what it does, not as some sort of cover for something that does not progress later. There is a difference and several hon. Members have made a distinction between three possible categories of complaint. If genuinely frivolous complaints are submitted, something has gone wrong with the process. It is likely to be a serious matter for any organisation to proceed with a complaint in the first place.

As I said, consumer bodies will have to meet certain criteria, on which we shall consult fully. They will have to demonstrate their capacity to put together a reasoned case and devote considerable resources to producing that case in accordance with the OFT's guidance. Opposition Members may be forgetting that any process of examining how well something is working—the investigation and making of cases about what is going wrong and what, if anything, might be done about it—makes demands on all sides.

As I said, there will also be an informal consultation before the OFT accepts the complaint and it is therefore unlikely that the making of a super complaint would be entered into lightly.

Parties do not get their costs back when other complaints are submitted to the OFT and investigations are carried out that result in no action being taken, which is the middle category. I take it that Conservative Members have no problem with situations in which further action is taken because a problem has been identified.

As my hon. Friend the Member for Leigh (Andy Burnham) said, if there appears to be a reason to examine a case to see what issues arise from it, it is not right that an additional burden should be placed on the organisation bringing forward that matter, at which the OFT will have looked and decided that there is at least a reasoned case to be further examined as a result of that process. It is therefore unfair to attach that condition to complaints made by that procedure.

We are learning a lot about the hon. Member for Huntingdon. I am sure that his interest in dentistry is not an enthusiasm shared by most members of the public or, indeed, by most members of the Committee. He talked about proceedings and costs, but it is not a court process. There is always a temptation, which I am sure that his background as a lawyer will make him

want to resist, to assume that all things come down to the law. The process is another avenue by which complaints can be made. I hope that I have reassured hon. Members about the safeguards to ensure that frivolous complaints are not made, and I hope that Opposition Members will have been reassured sufficiently to withdraw the amendment.

By way of reassurance to my hon. Friend the Member for Hemel Hempstead about the resourcing of consumer groups, the Government do not intend to provide them with additional resources. However, the paper that the National Consumer Council has submitted to the Committee makes it clear that it intends to apply for designation and believes that that would be possible.

Photo of Mr Tony McWalter Mr Tony McWalter Labour/Co-operative, Hemel Hempstead 11:00 am, 18th April 2002

Will my hon. Friend bear in mind that consumer groups may end up with additional responsibilities and potentially significant financial problems as a result of those new responsibilities unless their resource base increases substantially?

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

That is conceivable, but it is for consumer groups to prioritise their resourcing of both time and money and to decide what their priorities are. If there were a general area of difficulty in the way in which a market was working and such a consumer group were able to proceed with a super complaint, which one would expect it to pursue successfully in such conditions, that would reduce its work load in a number of other ways and increase public interest in supporting it. The NCC's submission makes it clear that it is keen to be designated.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

If I may say so, Mr. Beard, one or two hon. Members have got a little overheated and perhaps even grumpy about the effect of amendment No. 20, which the hon. Member for Wolverhampton, North-East characteristically put into context.

There are plenty of safeguards before such a provision would kick in. First, there is the designation process about which we are shortly going to talk. I hope that the Secretary of State will designate precisely those consumer bodies to which I referred earlier, namely professional, long-established, well-supported, thoroughly responsible bodies that are already active in the field.

Secondly, the business of frivolous and vexatious complaints is another red herring because we are all confident that the OFT would dismiss those out of hand and the most that would be generated would be a short exchange of correspondence with the company.

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

Does the hon. Gentleman accept that such complaints are unlikely to be put before the OFT? I agree that they should be dismissed quickly by the OFT and not pursued, but does he accept that it is highly unlikely that they would ever be brought?

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

It is a chicken and egg situation, because we do not know what bodies will be designated. During our forthcoming debate, we shall press the Under-Secretary for a clue as to who will be the lucky winners of the lottery. I hope that there would not be such complaints, but if there were, they could be dealt with quickly and at minimum cost to anyone, which is what they would deserve.

The absolute worst-case scenario would be costs incurred over a 90-day period. We believe that the period should be shorter at 60 days and the CBI would like 30 days, but three months should be the maximum. The amendment is sensible, but in a spirit of amity and with the wish to make progress, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

I beg to move amendment No. 21, in page 5, line 17, leave out from 'body' to 'such' in line 19 and insert

'where he is satisfied that it is fully representative of the legitimate interests of consumers and that it meets'.

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

With this it will be convenient to take amendment No. 22, in page 5, line 18, after 'consumers', insert

'of products or services of any description'.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

I hope to deal with these amendments quickly. They concern the designation process and precisely which bodies are designated. Amendment No. 21 is a probing amendment to draw from the Under-Secretary the sort of bodies that might be designated. It is easy to make a quick list of three or four, but we are interested in how many more there might be. We have already heard from the National Consumer Council, which rightly considers itself a prime candidate, and the Under-Secretary may want to put some of the organisations out of their misery today.

We have heard from the Consumers Association, which is a likely candidate, and it would be surprising, to put it mildly, if it were not on the final list. Other bodies such as the National Association of Citizens Advice Bureaux would like to be on the list and deserve to be, but have not had a nod or a wink so far. The Under-Secretary may wish to tell us more about that. The purpose of amendment No. 21 is to draw that out and the purpose of amendment No. 22 is to narrow the basis of selecting the organisations.

Clarification is needed of the standing and type of groups that we are discussing. The easiest way of doing that is for the hon. Lady to intervene and say that what the Government have in mind is to designate the following six organisations. We could then move on.

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

I am afraid that I cannot help the hon. Gentleman in that way.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

That is a shame, because I shall have to speak at inordinate length

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

I can help. Our intention is that super-complainant status will be granted only when a body asks to be designated. No body will be designated if it has not applied. The Secretary of State will publish criteria against which possible candidates will be assessed and we shall consult fully on those criteria. To give the hon. Gentleman some guidance, there are criteria for the designation of bodies in relation to the Stop Now Orders (E.C. Directive) Regulations 2001, which were approved last June, and we shall use similar criteria as a starting point.

The Secretary of State will also issue guidance on the application procedure and it will be possible to amend the list of designated super complainants if they meet all the criteria I mentioned.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

I guess that that is helpful, except for the bodies that are waiting with baited breath. There will be lot of guidance flying around in the wake of the Bill. I shall work on the assumption—

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

One can have too much of a good thing in life, as we all know.

The amendments have a narrow ambit. Amendment No. 21 aims to ensure that the consumer organisations will have an effective, balanced and responsible approach. I have mentioned some organisations that would, on any view, fit those criteria. They are my criteria; the Under-Secretary tells us that there will be criteria, but will not hint at this stage who might fit them. It would be very difficult to justify if some of the organisations that I have mentioned were not designated pretty promptly under the procedure.

The National Association of Citizens Advice Bureaux says that it welcomes super complaints in principle and will consider requesting status as a designated consumer body. It goes on to say

''we very much hope that the OFT will have adequate powers to act in response to . . . Super-complaints.''

I have already made that point. Amendment No. 22, which would insert

''of products or services of any description'',

would slightly tighten the context in which the bodies would be designated.

I do not want to press the Under-Secretary unduly and no one will sue her if things turn out differently, but does she have some general notion of the number or size of bodies, or the kind of criteria, that might pop up in guidance? Otherwise, we are in effect talking about the matter in a vacuum. Some very good organisations, including NACAB, are keen to get on and be designated. Why not put them out of their misery?

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

I shall make a brief response, because I covered several of the hon. Gentleman's points in my intervention.

I emphasise that we will set out criteria and that there will be consultation. The hon. Gentleman could refer to the stop now orders regulations. He asked what sort of organisations we are talking about. The Secretary of State will need to be satisfied about the quality of consumer bodies to contemplate designating them. We want to ensure maximum flexibility in the designation process by using criteria rather than by including conditions in the legislation. That means that we can update the requirements later if necessary.

Amendment No. 22 is unnecessary. Clause 173 already contains a definition of ''consumer'', which is

reflected in clause 11(9)(b). I therefore hope that the hon. Gentleman will not press the amendment.

On the nature of the bodies that will be involved, I think that it would be entirely wrong to start toying with the idea of which bodies might or might not be designated. I can tell the hon. Gentleman that we are looking for such things as capacity and track record in the appropriate area. We will use as our starting point the criteria set out in last June's stop now orders regulations, which are available to hon. Members.

Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon

Does the Under-Secretary countenance having single-issue bodies designated in any way, shape or form? For example, if there were a complaint about a particular product, 1,000 consumers unhappy with it might get together and form an association for the purposes of making a super complaint.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne 11:15 am, 18th April 2002

I do not want to detain the Committee, and we might discuss that matter in more detail later, but my hon. Friend raised an interesting point, which might need further examination. I am thinking of an issue over which I appeared on the ''Watchdog'' programme—rather than ''That's Life''—recently, the failure of the company Tempo, which is a retailer of electrical goods. It had taken money from many customers for its extended warranties—one is pressed to buy them when one buys something and does not understand how it works. Many customers were left high and dry because there were no arrangements of the sort found in more reputable and better-run companies, such as Dixons, where money was ring-fenced or backed by insurance. I have seen estimates of up to 100,000 people affected. One would imagine that such a group could come together for a single purpose relating to a practice of one company and then disband.

Photo of Andy Burnham Andy Burnham Labour, Leigh

I am interested in the argument that the hon. Gentleman has developed. Does he agree that single issue campaign groups, such as the Campaign for Real Ale, which campaigned for full pints, or the Football Supporters Association, which campaigned against ticket-pricing and merchandising policy at football clubs, can be extremely effective bodies in raising issues that affect a certain sector of industry?

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

The hon. Gentleman is absolutely right. I am a great supporter of CAMRA. It used to own a pub—I do not know if it still does—called the Cruel Sea, which I think they renamed the Nag's Head—

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

Yes. CAMRA has done a great service to beer drinkers over the years. Would it qualify? I know that the hon. Gentleman asked me the question, but I am sure that he is really asking the Minister.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

I wonder if my hon. Friend has given any thought to the prospect of large lobbying organisations, such as Greenpeace, developing some sort of designated consumer arm and using that

mechanism—as it did in its high-profile campaign against Shell a few years ago.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

My hon. Friend makes a very good point.

Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon

The issue is very important. The Under-Secretary has often said that super complainants will not make frivolous or vexatious complaints because they will be responsible and will want to maintain their reputation. However, with a single issue, that may well not be the case. If the group is concerned with a single issue, it will not be thinking about other campaigns in which it may get involved. It exists to deal with the specific issue and its reputation will depend only on the success that it has with that. I was happy to hear the Under-Secretary say that single-issue bodies will not be allowed.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

This discussion might be more appropriate on amendment No. 23, with which we will deal in a minute. However, it raises another interesting question about the Government's thinking on the matter. One of the most important changes in modern politics has been the growth of one-issue groups, some of which exist purely to lobby on one issue, whether it is foxhunting, housing, beer or whatever, to the exclusion of everything else. It will be interesting to hear what the Under-Secretary has to say.

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

I have already said what I have to say on this. As the hon. Member for Huntingdon said, I do not envisage that type of group being designated.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

I think that I must have been looking forward to the debate on the next amendment. We have grown excited because of all this discussion. We have put down some markers and tried to tease out of the Under-Secretary what bodies we are talking about. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

I beg to move amendment No. 23, in page 5, line 20, at end insert—

'(6A) The status of ''designated consumer body'' for the purposes of this section shall be renewed by the Secretary of State on an annual basis and revoked if he thinks fit.'.

This amendment has a very narrow compass. It would give the Secretary of State power to renew the designations on an annual basis and to revoke them if she thinks fit. That seems to be a sensible safeguard. The sort of bodies that I am talking about would have their licences renewed year after year with no difficulty. It is another safeguard against bodies on the list that do not come up to scratch and behave in the way in which we expect, and it is another way in which to remove them from the list. In response to an earlier amendment, the Under-Secretary suggested that the Secretary of State would have the power to remove the designation from organisations and that should be the case.

Photo of Mark Field Mark Field Conservative, Cities of London and Westminster

Although, in principle, I support that sensible administrative suggestion, one potential difficulty is that if a body were designated as a super complainant it would be subject to an annual review.

If during a 12-month period it had not put forward any complaints to the OFT, there would be pressure on it to make sure that it was active in the market. There is a slight danger that the annual review process would lead to more bureaucracy from certain super complainants, which would otherwise be silent.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

My hon. Friend may be worrying unnecessarily.

Photo of Nigel Waterson Nigel Waterson Conservative, Eastbourne

My hon. Friend is right to probe my probing amendment. We covered some of that matter in a previous discussion in which I mentioned Tempo.

Bodies may come and go. Perfectly legitimate and well-run bodies may be set up and go on to the list, but their purpose in life may disappear either because they are successful or, more probably, because they are unsuccessful. It is important that there is a right to remove them from the list. I suspect that the Under-Secretary is going to tell me that that is dealt with in a different way in a different part of the same forest.

Photo of Alistair Carmichael Alistair Carmichael Shadow Spokesperson (Energy and Climate Change), Liberal Democrat Spokesperson (Energy and Climate Change)

At the risk of disappointing the hon. Gentleman, I am enamoured of the amendment and I would be minded to support it. When I heard him talk about the growth of single-issue pressure groups in politics, I wondered whether he was talking about the Conservative party and Europe. I realised, however, that that could not be the case because he was talking about growth, which is not something that one readily associates with the Conservative party.

The amendment is useful because that sort of control would be helpful. I do not share the concerns of the hon. Member for Cities of London and Westminster about an increase in bureaucracy. It is important that bodies designated for the purposes of

making super complaints should be subject to regular and routine scrutiny. To that extent, I am interested to hear what the Under-Secretary has to say not only about that sort of regular scrutiny, but the possibility of the removal of designation without there being an annual review in an instance in which a consumer body has acted inappropriately or vexatiously.

Photo of Jonathan Djanogly Jonathan Djanogly Conservative, Huntingdon

I support the amendment. Clearly, management and standards can change in an organisation over the years. An organisation that might have done very well over a period of time may suddenly start to get an awful lot wrong. There should be a method by which it can be reviewed on an annual basis.

What if a consumer body, a member of a consumer body or someone lobbying a consumer body had a commercial interest in a super complaint proceeding? In those circumstances there should be a means of redress against the body making the complaint. We assume that the current high standards in the Consumer Association and other such bodies will continue, but what safeguards will the Government put in place carefully to check that there are no commercial interests behind designation?

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

I am delighted to do some more probing on the probing of the probing of the amendment. There has been a great deal of discussion this morning.

I shall bear in mind the last point made by the hon. Member for Huntingdon. When we look at the criteria, we will need to consider such issues and decide how to deal with them.

It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.