My Lords, in moving the Motion on the Enterprise Act 2002 (Protection of Legitimate Interests) (Amendment) Order 2014, I shall also speak on the Enterprise and Regulatory Reform Act 2013 (Competition) (Consequential, Transitional and Saving Provisions) Order 2014. I am afraid that these are rather dry subjects for debate, as your Lordships may have ascertained from my introduction. They are highly technical pieces of legislation, characterised by various consequential and transitional provisions. However, debate them we must and my challenge is to make this an interesting and rewarding experience for us all.
That gives me the chance to place these orders in the context of our much wider and far more interesting reforms to competition law, because the real significance of these orders is to serve as the two final pieces in the legal jigsaw that creates the Competition and Markets Authority, or CMA, within a reformed competition regime from 1 April.
Noble Lords will recall—how could any of us forget?—the Enterprise and Regulatory Reform Act, which I had the pleasure of taking through this House last year. I hope that the Committee will permit me to refer to it as the 2013 Act for the purposes of this order. In its competition elements, the 2013 Act laid the foundations for the establishment of the CMA and a major reform of the UK’s competition regime. The CMA will be responsible for promoting effective competition in markets across the UK economy and for delivering major benefits for consumers. It will have strengthened responsibilities and powers, taking on the work of the Competition Commission and a number of the responsibilities of the Office of Fair Trading. This afternoon’s brief debate gives me the opportunity to provide noble Lords with an update of what has been achieved since the 2013 Act received Royal Assent.
The CMA was launched in shadow form in October last year. The Government have appointed a well respected board for the new organisation. We have also published our strategic steer for the CMA, setting out the key benefits that it should bring for consumers, and a performance framework that explains how we will measure its impact. We are on course for the full launch of the CMA next week, on 1 April.
Both the orders that we are debating today are, as their titles suggest, largely concerned with consequential and technical amendments to other legislation. These amendments are required to give full effect to the range of administrative and legal changes to the competition regime that Parliament enacted in the 2013 Act, so it is important to stress that there is nothing novel or unexpected in what we are asking your Lordships’ approval for today.
To be clear, the changes that these orders make were both foreseen and intended by the 2013 Act. By way of a very brief recap, Part 3 of the 2013 Act abolishes both the Office of Fair Trading and the Competition Commission and creates the new CMA to assume their competition functions from 1 April. Part 4 of the 2013 Act makes various changes to those competition functions. It amends the provisions on mergers in Part 3, on market studies and market investigations in Part 4, and the definition of the cartel offence in Part 6 of the Enterprise Act 2002. It also amends the anti-trust provisions in Part 1 of the Competition Act 1998. I hope that noble Lords are all still with me, because this is where it gets slightly more complicated.
First, the Enterprise and Regulatory Reform Act 2013 (Competition) (Consequential, Transitional and Saving Provisions) Order, as its name suggests, makes consequential amendments to a wide range of primary legislation. Many of these amendments are simply replacing references to the OFT and the Competition Commission with references to the CMA. Others ensure that changes in the 2013 Act to the regime for market investigations apply across the regulated sectors, such as gas, water and rail. Where the sector regulators share powers to refer markets for investigation with the national authorities, they ensure that the streamlining and modernisation in the 2013 Act apply as appropriate to the regulators.
I should add that the order also amends the Enterprise Act 2002 to reflect the CMA’s role in the enforcement of consumer legislation. The CMA will have primary expertise on unfair contract terms. This will enable it to take enforcement action where there are structural market failures. The CMA will also have access to other enforcement powers to ensure that consumer choice is not restricted. That being said, the great majority of consumer law enforcement will continue to be done by trading standards services, with the National Trading Standards Board responsible for co-ordination and prioritisation under the chairmanship of the noble Lord, Lord Harris. As competition is a reserved matter, the order also makes similar amendments to Scottish, Welsh and Northern Irish legislation. Article 3 and Schedule 2 make transitional and saving provision in connection with the transfer of functions from the OFT and the commission to the CMA.
All of that is pretty straightforward when compared with what I am about to cover—namely, the Enterprise Act 2002 (Protection of Legitimate Interests) (Amendment) Order. This amends a previous order of the same name from 2003. Again, many of its changes reflect the abolition of the OFT and the Competition Commission and the transfer of their competition functions to the CMA. The order relates to one of the
three situations under the Enterprise Act 2002 in which the Secretary of State may intervene in a merger case that raises potential public interest concerns. Specifically, it sets out when the Secretary of State may issue a European intervention notice—or EIN, for short—to repatriate elements of merger cases that otherwise fall under EU jurisdiction. This may arise in merger cases where competition jurisdiction falls exclusively to the EU but where the case raises potential public interest concerns in the UK.
The changes in the order to this EIN process replicate those already made in the 2013 Act to the other two public interest regimes. These are the public interest intervention notice, or PIN, regime, which enables the Secretary of State to intervene in merger cases where the CMA has jurisdiction, and the special public interest intervention notice, or SPIN, regime—noble Lords should perhaps insert their own punchlines here—which enables the Secretary of State to intervene in a merger case on particular public interest grounds where the threshold for CMA jurisdiction is not met. Changes have been made to the powers available to deal with pre-emptive action. Powers to accept undertakings have been repealed and powers to make orders have been strengthened.
Allow me to leave your Lordships with a closing thought. It is true that these orders are unremarkable in themselves but, by approving them today, we are reflecting Parliament’s will to establish the Competition and Markets Authority and the new competition landscape that it will oversee from 1 April. I am confident that these reforms will enhance the competition regime and deliver greater benefits for consumers. I therefore commend these orders to the Committee.