HL Deb 27 July 1953 vol 183 cc899-907

3.39 p.m.

Debate on Second Reading resumed.

VISCOUNT SAMUEL

My Lords, resuming the Business of the House, I would in the first place express the satisfaction that we feel that the noble Viscount, Lord Woolton, has come to the House today, somewhat unexpectedly, to move the Second Reading of the Bill dealing with monopolies and restrictive practices. He was able to take a very just satisfaction in the fact that, as Minister of Reconstruction, he was able to announce that the Government of that day would introduce the original Bill. Possibly I may be permitted a not less just satisfaction in the fact that the Liberal Party was for many years the only Party that took any interest whatsoever in this subject. It was as long ago as 1928, when the Liberal Yellow Book was published as the outcome of the Liberal industrial inquiry, that this question of monopolies and restrictive practices was put upon the carpet of our political life, and I remember very well that for some years before the incident mentioned by the noble Viscount we on these Benches were the only ones who ever raised this question of monopolies, to which both the Conservative and the Labour Parties were indifferent. However, that is by the way, and perhaps your Lordships will forgive a paternal, or perhaps a grand-paternal, interest in this subject.

We welcome this Bill as a further step towards the solution of what is a serious economic and industrial problem, and we here cordially support its Second Reading, and we will support the Bill if it is challenged at any other stage. The setting up of the Commission on monopolies has been fully justified by its work, and I am glad that tributes have been paid to its membership. Its Reports have always been unanimous on all matters of importance; its recommendations have all been accepted by the Minister, and have been put into operation and have been approved by public opinion. If it has been unduly slow in its operation, that is not the fault of the members of the Commission; it was because the machinery has been inadequate for its purpose. As was mentioned by the noble Lord, Lord Shepherd, very few inquiries have been carried to fruition over the period of four and a half years during which the Commission has been sitting—in fact only six, while one of the Reports shows that about forty requests have been made from industry for inquiries to be held. Not all of those have been accepted, not all may be justified; but at all events, there is that list of forty. Although that list may be thinned down, on the other hand others may be added; and if six inquiries have been completed in four and a half years, at that pace, as Lord Shepherd has said, the completion would cover a long time—in fact the 1980's would have arrived before the Commission had reached the end of its queue.

The Chairman himself has described his Commission as a "bottleneck," and it is a very good thing that the Government propose to provide the Commission with a new neck, one having a larger aperture. That is the main purpose of this Bill. The Commission has also been inadequate because it has no power to take any general action affecting a number of industries. There are such questions as exclusive dealing, collective boycott, re-sale price maintenance, and other matters which raise general principles, which extend throughout a large part of industry. This Commission may find, as it has found in particular cases, that a practice that has been customary in a particular trade is definitely wrong. The Commission reports that the practice is wrong, and steps are taken to put an end to it; but precisely the same practice, or very similar circumstances, may be operative in a great many other industries, and the Commission can do nothing. Therefore it is a. matter for consideration and inquiry whether there should not be a change in the legislation—or, if such would suffice, in the regulations—to enable a case which is a general one to be dealt with generally. It may be that opportunity should be given for appeal in the event of special circumstances justifying a case in one instance whilst it might not do as a general rule. But details of that kind can well be left to the future.

Furthermore, there has grown up nowadays, particularly since the two wars, a practice of limiting entry into industries or trades. Some of them have been made almost into a closed circle, and no one can get in without finding his way through some of the regulations made to keep him out. It is rather like the medieval system whereby people were not allowed to carry on business unless they were admitted as freemen of a certain corporation. I suggest that that is a matter which urgently needs inquiry. The noble Lord, Lord Shepherd, spoke about the nationalised industries, and said that they ought not to be treated like the general run of monopolies. I agree there, in principle. I do not think that the coal industry or the road transport industry, or any of these great industries such as electricity, can properly be subjected to an inquiry by a body like this Commission, with a deputy chairman and five members. It is far too great a matter for that. This question, and the right method of proceeding to supply the need for inquiries is now under consideration by a. Select Committee of the House of Commons.

For the rest, this matter derives its great importance from the fact that it is one element in the great problem of the rise in prices. Only slowly and dimly is the country realising, and the political Parties beginning to realise, that the very essence of our whole economic problem is the question of the rise in prices and the high cost of living: everything depends upon that. The demands for increased wages and salaries, the question of the rising costs of production, the hindrance to our exports, the balance of trade, the stability of the pound, are all tied up with the steady rise, year by year, in the cost of living; and anything that can be done—and this is only one measure among a number—to stop and reverse the trend must be beneficial. At present, the trade unions are occupying a very self-contradictory position in this matter. I have noticed reports of trade union conferences in which two resolutions have been passed, the first vehemently protesting against the rise in the cost of living, and the second demanding an immediate advance in pay of 10 or 15 per cent., whatever it may be. At this moment, some of the trade unions are actively engaged in taking measures to raise the cost of living. That is not their intention or their desire, but it is what must inevitably follow, if the costs of labour and other costs of production go up without a corresponding increase in productivity.

Furthermore, there is the question of restrictive practices which have to be fought within the trade unions. We must get the willing co-operation of the trade unionist to abolish restrictive practices. I noticed the other day that one of the leaders said, "We must not be Luddites," but I am afraid that they sometimes have been—and perhaps sometimes still are. The reports of the joint committees established by the leaders of American and British industry which have been investigating the cause of the far higher productivity in the United States, man per man, have always, or at all events usually, pointed out that in the United States the whole aim of the trade anions is not to prevent up-to-date machinery from coming into the factories, or to prevent changes in methods that will secure much greater productivity, but that, on the contrary, they attack their employers and protest if they fail to employ the most up-to-date plant and adopt the greatest measure of enterprise. That is by the way. I am led to these remarks by the fact that this Bill will have very little importance indeed unless it is a means to prevent the rise in prices, directly or indirectly, and to speed the trend in the opposite direction. Having made those observations, I would again express my cordial support for the principle and for the provisions of the Bill.

LORD SHEPHERD

My Lords, before the noble Viscount, Lord Samuel, concludes, may I ask him a question? He has indicated to your Lordships that he supports the principle of the Bill, and he has said that he would support the Bill at other stages of its life, if his support should be wanted. Should I be right in assuming, from that, that on the Committee stage, if Amendments to the Bill were moved, he would give them favourable consideration?

VISCOUNT SAMUEL

Certainly, if they tended to strengthen the Bill. But having read the Report of the debate in another place, I have not so far come across any Amendment which has greatly raised my enthusiasm.

3.51 p.m.

LORD SALTOUN

My Lords, I should not like this Bill to go through without a few words of support from the Back Benches. Like the noble Viscount, Lord Samuel, I was struck, when I read the Reports of the Commission, with the number of cases that had been referred to them. Another feature of the Reports which struck me, and struck me very favourably, was the mixture of firmness and sympathy with which the cases they had decided were handled. I regard that as a good augury for the future. I think that the action of the Commission really extends much further than noble Lords opposite seem to think, because every case that is properly dealt with by the Commission acts as a warning, and will be taken as a warning by a great many other industries with the same sort of organisation.

Moreover, the experience thus gained by the Commission is the best possible source of knowledge as to whether general legislation on a specific point is required (as suggested by the noble Viscount) or not. An American friend of mine told me many years ago that when the Anti-Trust Act was passed in the United States, the Standard Oil Company, whose ramifications and associated companies spread all over the North American Continent, was doing very badly. But immediately the Act was passed—and it was strictly enforced—the subsidiary companies that broke off began making profits and doing very well. The lesson to be learned from that, it seems to me, is that the monopolist is often his own enemy: he does not realise what is best in the business. Of course, if I may use a vulgarism, he sleeps soundly because he knows that he is in a position to "soak the public." In spite of Lord Shepherd's observations on the point, I do not see that the nationalised industries are any less monopolists than any other, because I cannot imagine any industries in a better position to "soak the public" than they are. With those few words, I beg to intimate my support for the Bill, and the hope that it will have a rapid passage.

3.54 p.m.

LORD MANCROFT

My Lords, the noble Viscount, Lord Woolton, and I are grateful to your Lordships for the kindly and friendly, if not wholly unqualified, support which you have been good enough to give to the Bill. It is, of course, a small measure, and it sets out to achieve narrow and restricted objects; but it is an important Bill, nevertheless. Both the noble Lord, Lord Shepherd, and the noble Viscount, Lord Samuel, were critical, in their remarks, of the speed with which the Commission have been working in the past. I think that that criticism is not entirely unjustified. But I would remind your Lordships that this Commission were doing pioneer work. I think they would have been justly blamed had they tried to go too fast and produced reports which were hurried or had not discussed details such as ought to have been discussed, and which thereby had produced some injustices. It must also be remembered that the Commission have been labouring for some time under the handicap of shortage of staff. To remedy this is, after all, one of the purposes of the Bill. The Bill is designed to give the Commission a stronger right arm and thus to enable them to work a little more quickly and to keep what one might term a head of work constantly before them. The noble Viscount, Lord Samuel, mentioned a bottleneck. It would be impertinent of me to comment in any way upon the noble Viscount's experience of bottles, but I hope he will agree with me that in a great many bottles the neck is at the top. It is for that reason that two deputy chairmen are to be appointed: to make things easier for the Commission to achieve the objects which Lord Samuel has enumerated, and to remove the necessity for him in the 1980's to come down and once again criticise the Commission for their lack of speed.

VISCOUNT SAMUEL

I did not blame the Commission. I criticised rather the machine that they had to work.

LORD MANCROFT

My Lords, I fully appreciate that point. We hope that when this Bill becomes an Act the Commission's machinery will be better. I repeat that the Bill is a narrow one. I want to make this point because the noble Lord, Lord Shepherd, talked about Amendments. I am not clear, and I do not think Lord Samuel is either, whether Lord Shepherd contemplates putting down different Amendments from those he outlined to us as having been put forward by his friends in another place. We will, of course, consider any Amendment he puts down in as polite a light as we possibly can, but I think even the noble Lord would be surprised if a cordial reception were given to Amendments going wide of the scope of the Bill. I rather thought at one moment that I read into his remarks a suggestion that his Amendments might go wider than the Amendments which his friends in another place put down.

LORD SHEPHERD

My Lords, I think we made it clear that we were of opinion that this Bill was very tightly drawn, and that we might find, if we moved certain Amendments, that those Amendments were out of order. Might I suggest to the noble Lord that when we come to drafting our Amendments we should have a little talk with him and see whether his advice can help us in the direction in which we want to go?

LORD MANCROFT

My Lords, I shall be only too happy to place my mediocre help at the disposal of the noble Lord, Lord Shepherd. But I should warn him that I shall hope that his Amendments are more or less within the admittedly narrow scope of the Bill.

VISCOUNT SAMUEL

When will the Committee stage be taken?

LORD MANCROFT

My Lords, I must consult my noble friend who is in charge of these matters before I can answer that question definitely, but I should have thought that the Committee stage could not possibly be before October, so there is plenty of time to discuss as many Amendments as Lord Shepherd wants.

I am glad, for more reasons than one, that my right honourable friend the President of the Board of Trade did not see fit to deal with nationalised industries in the scope of this Bill. That would have been wrong, for the obvious reasons given by Lord Samuel, and unfortunate also, because, since Lord Shepherd and I clearly differ considerably on what we think the monopolistic rôle, or otherwise, of nationalised industries is, we should clearly have crossed swords and turned what I hope is a non-controversial Bill into a very controversial measure indeed. I was grateful to Lord Saltoun for raising, in his interesting speech, what I believe to be an important point. Some people, when they criticise—as they have criticised—the Commission, have said: "What have they actually done? Let us see in writing what they have achieved. Where is the order for carrying out this recommendation, or the prohibition against that?" That does not seem to me to be the most useful way in which the Commission can work. The Government do not want to see a whole flood of orders directing one industry to take certain action and another industry to take some other action.

To take another point to which the noble Lord, Lord Saltoun, has drawn attention, it seems to me that the most effective way in which the Commission can work is by gently hinting, or suggesting, that other industries should put their houses in order upon the lines suggested in the case of the industry which is then under examination. Even with the industry which itself is under examination, we would prefer that it should be by the industry's own initiative and volition that their house should be put in order rather than by too much governmental interference. We would far rather see the recommendations of the Commission brought into action by persuasion than by force.

May I conclude by saying that there are three separate views held upon monopolies. There are people who hate all monopolies, who think that all are bad and that all restrictive practices and all trade associations should be proscribed. That is not a view for which I hold much enthusiasm. There are people who would treat monopolies in the same way as they treat babies—they are against them until they have one of their own. The Government's view is that not all commercial monopolies are necessarily bad. Their view is that a commercial monopoly is bad only when it has been proved to be so. That task is one of the principal functions of this Commission. This Bill is a very narrow Bill, designed only to improve the means available to the Commission for searching out monopolies that are bad and industries that are not operating to the national good or to the good of industry as a whole.

VISCOUNT SAMUEL

Like the B.B.C.?

LORD MANCROFT

I indicated a little while back that I did not wish to cross swords with the noble Lord, Lord Shepherd, on the nationalised industries. I have already crossed swords with the noble Viscount on the B.B.C. and lost badly. I do not propose to enter that affray again this afternoon. I wish to stick to the terms of the Bill, which, as I said, are narrow and designed solely to enable the Commission to work more efficiently. I think that in the speeches that have been delivered this afternoon your Lordships have made it clear that the House is at one with that ideal; and therefore I am confident that the Bill will be given an unopposed Second Reading.

On Question, Bill read 2ª, and committed to a Committee of the Whole House.