My Lords, I have tabled my intention to oppose Clause 29. It is not that the clause does not bring in some useful stuff, but I find myself in some bemusement over quite what the Government ultimately intend in relation to the public interest and the kind of interventions in that regard. I am hoping for some clarification of the strategy here. I do not yet know whether or not I agree with the Government because it is not clear in the clause, or in anything that anyone has so far said, what lies behind Clause 29. I hope that I will be a bit wiser at the end of this debate.
At present, as I understand it, the criteria under which the OFT and the CMA operate are clearly related to market structures or competition, and only the Secretary of State can intervene to require them to look at wider issues of public interest or himself deal with issues of public interest. A narrow definition of what the public interest is operates at present, principally, as I understand it, relating to national security. We all know, though, that when high-profile mergers come up, the public, by which I mean both interested parties, consumers, suppliers, workers, the financial press and so on, are often concerned about much wider issues than competition as such—the issues of employment or the potential loss of employment, the loss of UK control, technology, intellectual property or international competitiveness as well as the long-term effect on consumers, workers, communities, the environment, and so on.
Almost all these issues get raised when we are faced with a big merger. For example, in the Kraft takeover of that old and respected English company, Cadbury, all these things were gone over with a fine-toothed comb, but none of them was particularly relevant to the final agreement to the merger. Perhaps I can make one little gripe: despite assurances, the Bristol factory in fact closed. There was no issue of national security and no other issue on which the Secretary of State felt able directly to intervene, although there was a requirement frequently to explain the position to Parliament and to committees of another place.
There are two arguments. One is what constitutes the public interest beyond the stipulations of the competition regime. The other is who invokes the public interest and how. As I read Clause 29, it seems to attempt to transfer some of the responsibility of the Secretary of State on to the CMA; it does not at all attempt to define the public interest. One could take different positions on this. Some would say that the Secretary of State should retain some responsibility, as is largely the case now. Some would say that he or she should retain that control but have a wider range of criteria on which to define the public interest.
You could also say that the CMA should be able to invoke the wider public interest, such as competitiveness or employment issues, but that the Secretary of State should still retain powers to intervene as an alternative. Others say that the Secretary of State should be the judge of national security issues but that the CMA should have other aspects of the public interest in mind in its investigations and decisions. At the other extreme, some say that the CMA should have the sole role and that politicians should keep out of it. I think that the Government are veering towards that position but are not quite getting there. The cleanest position, which some of my colleagues have taken, is that the Secretary of State should have the sole initiative in issues of wider public interest and that the public interest definition should be narrow.
I take a wider view; I tend to think that the CMA should be able to initiate consideration of what the wider issues are if it considers that those could outweigh the competition issues. I do not think that, on this front, the Government’s position was clearly spelt out in the House of Commons or elsewhere. This clause stand part debate gives the Minister the ability to spell out clearly and precisely where the Government are going with this. Once we are clear on that, we can decide whether we take it any further at a later stage, but at the moment I am essentially unclear, so I hope that it can be clarified now.