HC Deb 13 August 1919 vol 119 cc1525-37

The Board of Trade may, if they think fit, authorise local authorities, subject to such conditions as the Board may impose, to purchase and sell any article, or articles of any class, to which this Act applies, and any local authority so authorised shall have all necessary powers for the purpose

4.0 A.M.

Sir A. S. BENN

I beg to move, to leave out the words "if they think fit," and to insert instead thereof, the words "if they find it necessary."

We are quite willing to be guided by the Board of Trade if the President thinks it should be done away with.


I am afraid I do not appreciate a great difference between the two sets of words. If there is any difference I should like to know.

Amendment negatived.

Lieut.-Colonel GUINNESS

I beg to move, at the end of the Clause, to add the words, "Provided that trading by local authorities under this Section shall be self-supporting and involve no charge upon the rates."

The object of my Amendment is to prevent a trader being burdened by the subsidising of municipal trading under this Bill. I do not think it is a power which at this hour needs elaboration, but there is this additional reason for some such provision. It is quite possible that in certan districts a great deal of public inconvenience might be caused by the fact that in the local authority's shop uneconomical prices might be charged, prices with which the shopkeeper could not possibly compete, and which might arouse a great deal of unfounded suspicion of profiteering against those who had to carry on the business on economic lines. I think the object of the Government is rather a moral object, the object of improving the morale of the country in regard to trade and conduct, and any disturbing factor of this kind, the competition of subsidised goods with legtimate traders, will defeat the end of the Bill, and steps will be taken to prevent that. I hope, therefore, that in the form I have it down—or in some other form which might be preferred by the Attorney-General—the Government may accept it


I think it will be quite obvious that an Amendment of this sort would sterilise all action. Substantially, this same thing is provided for in the Amendment which stands in the name of the hon. Member for Edgbaston (Sir F. Lowe), and we shall be prepared to accept that.

Lieut.-Colonel GUINNESS

Then I would move my Amendment in that form—to add the words "but such conditions shall, as far as possible, ensure that any local authority so purchasing and selling shall proceed on a commercial basis and not by way of subsidy at the expense of the ratepayers."


Of the last five Amendments we have had three accepted by the Government, and it has removed what would otherwise have been a very serious danger of a system of extended municipal trading not for the purposes intended under the Bill but municipal trading for the love of municipal trading.


I cannot possibly understand my hon. Friend below the Gangway. I think municipal trading has been fully condemned except in the case of tramways, and things of that kind, that if the House is in favour of the municipality being allowed to compete with the private trade I could not submit to allowing it to compete with the trades people.

Brigadier-General COCKERILL

I only ask whether the words preceding "a commercial basis" will make it necessary for a municipal authority in trading to make allowance for rates to itself, otherwise it will be in a position of favour as against other traders.

Lieut.-Commander KENWORTHY

I rise to ask what is meant here. If volunteers in the municipality are going to work for nothing in the shops—retired colonels and so on—and do not draw any money or remuneration, and their daughters give their assistance for nothing at all as during the War, is that a commercial basis. If not it is very unfair-competition to the traders in the town. I think we should have some words if possible to say that there will be some accountancy to say what steps will be taken. We do not want to drive out the struggling tradesman, the young man discharged from the Army. We want some better distinction. I can foresee all sorts of happenings otherwise.


I do not know whether the advisers of the Government have looked up the Private Bills in which this matter has, to my knowledge, been frequently dealt with. I think there are model Clauses framed to prevent the rates being used to subsidise municipal trading against private trading. I do not know whether the Government have looked up these precedents, though, from the recklessness with which this Bill appears to have been put together, I should think that probably they have not. Now it is ten minutes past four, and we are asked by the Government to enter upon this discussion, involving a principle of the greatest importance, setting a precedent which—whether rightly or wrongly I do not inquire—will be put to us in all the discussions on this subject for many years to come; and the House is absolutely and obviously not physically fit to enter upon such a question. At any rate, I myself am obviously physically unfit to enter upon a discussion of this magnitude. I trust those who are the guardians of the public here—I can no longer describe the House of Commons as such—will note the conditions under which legislation of this kind is being carried through, and will call the attention of the public to the way in which legislation under the present Government is done.


The suggestion has been made that the municipalities shall trade on a commercial basis, but it seems to me that that is no guarantee that the trading generally may not involve a loss. Trading is more difficult to-day than it has been at any time. Nobody knows the value of anything. When things were stabilised we knew their value, but to-day it is very difficult. The municipalities, if they are going to trade, should have expert assistance, and should set up a regular staff to deal with the class of goods which they are supposed to deal in. That being so, the municipality starting to trade will be in exactly the same position as a private individual in the sense that the trading may involve a pri- vate individual in bankruptcy, and a municipality in a serious loss. That being the case, I think that at this hour we should not proceed to sanction the giving of permission to a municipality to trade, with the mere proviso that it shall be on a commercial basis. That in itself does not guarantee, to my satisfaction at any rate, that it will not involve a loss. If a municipality enters upon trade it does so with the danger of involving a loss. I do not think that is a right thing to do, and it has been suggested that it would be subsidising trade. I do not think the ratepayers should be called upon to back an enterprise in which a loss may be made which they may have to make up out of their own pockets. I hope the Committee will seriously pause, and not agree to this apparent promise, which does not make the position any better.


I understand that the Government has accepted this Amendment, but I cannot myself see how the local authority can possibly carry it on on a commercial basis if they are limited to six months. To do it at all properly would require a longer time. They would have to make their preparations and get all the necessary conveniences. With the object of securing time for that, and desiring, as I do, that when it is done it shall be on a commercial basis. I have put down an Amendment at the end of the Paper to the effect that this Clause shall be placed outside the limit of six months.

Lieut.-Commander KENWORTHY

Is the right hon. Gentleman going to give us any explanation of what "a commercial basis" means?

Amendment agreed to.

Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."


I beg to move, to leave out Clause 3.

Here we have a Clause of five lines, containing what would easily occupy an Act of Parliament, and providing, I think, for the first time, without any precedent, for the sale of merchandise by municipalities. I have not heard a word of reason why this Clause is necessary in this Bill. The Clause has been considered and discussed, and its promoters are supposed to have given us some information in regard to it. What is it that we are voting on? Why should this House be asked to pass a Clause which, as I have said, in normal times would require an Act of Parliament to provide for it, and which would never, in normal times, be passed by this House? I should like to hear some explanation from the representatives of the Government of the reason for the insertion of this Clause


This Clause is a reproduction of a Bill which was introduced into this House about two months ago, entitled the Local Authorities (Enabling) Bill. I opposed it strenuously, and it was defeated in this House by 150 votes. It was introduced by hon. Members opposite. It seems to me an extraordinary thing that the Government should, within two months, introduce, in one Clause, this substitute for a Bill which was rejected by this House lees than two months ago. I think the principle involved in this Clause is absolutely wrong, that the municipalities have not the staff to operate under this Clause, and that, before they can get ready to operate, the time would have expired, and the machinery would be in existence just at the time when the powers under the Bill would terminate. Besides, as an hon. Member behind me remarked, it will be a precedent that the Government will hardly be able to resist if hon. Members opposite introduced in another Session a Bill similar to the Local Authorities (Enabling) Bill, because it would be a precedent that the Government themselves instituted.


I feel that some answer from the Government is necessary on this Clause. An obvious misapprehension exists with regard to its provisions. I would ask the Committee to see what the Clause proposes to do. Subject to certain conditions, which are to be imposed by the Board of Trade, local authorities may purchase and sell any article or articles of any class to which the Bill applies, and any local authority so authorised shall have all necessary. powers. It takes a very great stretch of imagination to expand that into what is now being pictured, namely, the establishment of general municipal trading. What we are dealing with here is a safety provision. We have only to look at countries not very far away from us, where we see that powers have been taken in some way to limit profits which, in the opinion of the people of those countries, were exorbitant, and where there was, in effect, a strike of the whole of the retailers. At a time like this, when the Government have such examples abroad before it, I say that, if it did not provide a life-line or way out, it would be guilty of great carelessness. It is to provide something of that kind that this Clause is inserted. It is not, and never has been, intended to be a general provision for unrestricted municipal trading. I suggest that this is really an extension of the principle of the Bill, which makes the whole thing worthless, but the Clause puts us into possession of alternative lines in the event of resistance from retail traders. It is believed that the mere threat of the-exercise of this power will be sufficient to prevent danger arising.


Will it only last six months?


Yes, only six months.


The speech of the Minister which has just been made is the most alarming speech that I have heard from him. He thinks it is quite possible that there will be a general strike of retailers as the result of this Bill; that they will be so unfairly treated that they cannot go on, and, as a remedy for this, he will allow the local authorities to go into trade. I am sorry to use strong language, but I have never heard a more insane speech. Really, does the right hon. Gentleman contemplate such a thing? You cannot improvise trade in clothing or food in that way. As a method of strikebreaking against traders it seems fantastic. It is a power that should only be in the hands of the central Government. If the occasion arose, no legislation would really be necessary, and there should be no legislation of the kind in this Bill.


I do not think that there is any reason to fear the results which it is suggested will ensue if this provision is inserted. In the Committee I put a question to the Food Controller as to whether he would approve a power for local authorities to act in this way? and he replied that he thought such a power desirable. I do not think for a moment that an enormous number of strikes will follow from the temporary power of municipal trading. We have seen at Ilford and other places what can be done in the way of street markets. I submit that that is exactly the kind of thing that will happen elsewhere. The municipality will work directly or indirectly. It is by far the most convenient way of combating excessive prices, and. so far as I have seen, it has been particularly successful.


I think the Committee is quite safe in taking the Noble Lord who has just spoken quite seriously, and in forming its own. opinion of this proposal. The proposal is to give the Board of Trade themselves very wide powers of dealing with the prevailing prices. I have every sympathy with this object, but these markets should be conducted on a commercial basis; otherwise, it would be perfectly unworkable. The proposal is a sop as the result of the discussion, and the effect would be to break down local conditions so far as people connected with local authorities will be content to act on a commercial basis. Otherwise it means absolutely nothing. The local authority is there, and it would spend the retailers money, but it would have to provide capital. How on earth can anyone ensure that these articles shall be sold more cheaply and that all working expenses shall be met without loss falling upon the community. As we have seen in other cases, the idea is quite illusory. This proposal shows that the Government have no great evidence, and are relying upon other people's judgment. The Government describe this as a life-line. If that was correct, I should have thought the Government would have taken powers in more definite terms. If the Government want it, let them have it, but, for my part, I think it should be rejected, because if the powers are ever used they will be found to be illusory.


I think that what has happened in another place is worthy of consideration. I do not know what country the Minister referred to, but when there was great trouble in France it was said, "The Tiger is going to settle all this by municipal depots." I think the Government should give their attention to that and find out what has taken place. I see by the papers that it has proved to be a complete failure. Far from stopping profiteering, the telegrams in the papers show that quite serious difficulties arose, and the retailers themselves organised in a strike or something of that kind in order to prevent the consumers from carrying out the Regulations. The result of all this is that the Government attempt to deal with the difficulty by means of municipal and Government trading appears to have broken down.

Therefore I do not think this is a matter which can be lightly entered upon. My hon. Friend has not answered the point which was put by the Noble Lord the Member for Hitch in (Lord R. Cecil). How can any local authority possibly deal adequately with the situation? How can a local authority start to deal in drapery, in boots, in cabbages, or any other articles, without a trained staff and without some form of organisation? But, as usual, we have in this Clause the words, "The Board of Trade may, if they think fit, authorise the local authorities."

How they are going to do it is not explained in the Clause. How they are going to form an organisation is not explained in the Clause either. This is a Bill for six months, but it will take a year at least to organise, if you are going to do this trading on a proper basis and avoid loss to the ratepayers. I think the Labour party have a legitimate grievance against the Government in this matter, and I am surprised that none of them has risen to call attention to it. They brought in a Bill some time ago in which they showed that their solution for the many serious difficulties was to be found in the local authorities becoming what I may call purveyors of necessities to the country. It was fiercely attacked by the Government, and we heard most excellent arguments—quite different from the arguments we have heard to-night—most admirable arguments from one or other of the two noble relatives who between them control the business of the country. I forget which right hon. relative it was, but it was one of them, got up and castigated the Labour party, and attacked them in every way for the policy of their Bill. What is the difference between their Bill and the policy which is in this Clause? The President of the Board of Trade when he spoke on this Clause a short time ago, said it was to prevent undue profits. That was exactly the intention of the Bill brought in by the Labour party.

I say to all those who support the Government, those who belong to the Coalition party, that they should be very cautious before they give their assent to any Clause of any Bill which is the exact copy of a Bill brought in by the Labour party, or what I prefer to call the Trade Union party. But it is characteristic of the small part which the Labour party play in the proceedings of this House, either by speech or otherwise, that not a single Member has got up to speak on this Amendment. It would be interesting to hear from the right hon. Gentleman opposite, who represents the Labour party on the Front Bench, whether he is enthusiastically in favour of this Clause. I have no doubt he would like to see "shall" in the Clause. That would really be carrying out the policy of the Labour party. But I say in all seriousness and earnestness to the Committee that in supporting this Clause as it stands they are supporting one of the most dangerous principles ever brought in by the Government. I do not consider it is a principle which carries out any principle of social reform, but simply the policy of communism. I do not think it is right to suggest, as an hon. Member did just now, that this is a small matter, that the Select Committee were in favour of it, and that it could be lightly entered upon. I venture to hope the Committee will vote against the Clause with the Amendments in it as it stands, and I refuse to believe that it is an integral part of the Bill. I did not vote against Clause 1, especially as now amended, as on the whole I think it was needed in view of the necessities of the time; but that various local authorities should set up this trading on a vast scale, as I consider they will do, is a costly, dangerous and pernicious proposal. Those who have been making Amendments to this. Bill have had very little support in. the Lobby to-night, but on this Amendment, at any rate, I cannot think that a great many hon. Gentlemen whom I see in the House—including the hon. Member for one of the Divisions of Essex—with their past professions and beliefs, can possibly support the Clause as it stands, and I appeal to them to follow the lead of the Noble Lord the Member for Hitchin and vote against the Clause.


I have been more or less opposed to this Bill, but I think, the Bill having gone so far, it is finally necessary that the Government should receive the powers under Clause 3 to meet a temporary emergency, and I am only sorry the Government have modified the Clause by accepting the modifications imposed upon it. The Bill is to continue for six months only, and it is impossible for any municipality to engage in an extensive course of trading during six months. But the value of the Clause is this: If any attempt is to be made in an emergency to protect the community against dire want it may be absolutely necessary for the local authorities to engage in trade, and I extremely regret that the Government have watered down the effect of the Clause by accepting modifications, because I think the Clause itself is a most valuable one and one that the local authorities should possess in order to meet the needs of the times.

Lieut.-Commander KENWORTHY

I cannot refrain from just drawing attention to the attitude taken up by the Noble Lord the Member for Horsham on this Clause, which is really, if carried out and if we had a President of the Board of Trade who was a Communist, Communism. But let us face the facts. We lay down in this extraordinary Bill that it is wrong for a man to make profits if they are large profits.


I do not wonder my hon. Friend supports it.

Lieut.-Commander KENWORTHY

That being the case, you cut away the whole moral basis of profit and trade enterprise straight away. We are all faced with grave difficulties in the country; we do not know what is going to happen this next winter. If you say it is wrong for a man to make large profits, everyone who has an income of over £10,000 a year is an immoral ruffian apparently. Therefore, we had better go the whole hog and at once assume control, with eventual nationalisation, of all the means of production and distribution. That would be much more logical. But to acquiesce tamely in this Bill, holding the views that hon. Members opposite do, and not support the hon. Member for Horsham and myself when we do divide, now, when the communal principle is markedly and honestly brought in, is altogether illogical and un-English.


The scath of criticisms which have come from various Members is that the unworkableness of the Clause must be largely due to local working of municipalities and local authorities. There have been several instances when the possibility of power like this would have been of valuable use. I will give one instance which occurred quite recently. The public was asked by the Coal Controller to lay in stocks of coal during the summer months. It is quite impossible for people of small means to lay in tons at a time—they may buy in pounds and hundredweights—and it was suggested that the local gasworks should lay in stocks for the poorer inhabitants, accumulate it and then retail it to those who were unable to buy. We were advised that it would be impossible for municipalities to start trading in a national emergency such as the coal shortage. If it did nothing else this Clause would provide a means whereby the municipality could lay in stocks of coal and retail it later on to those who were unable to make provision for themselves. It would have been a safeguard when in times past a coal strike was imminent. Local authorities have been prevented by the absence of such powers as are foreshadowed in this Clause. That is only one small case, but it shows that it would not be unworkable. The Government will insist on this Clause, and I insist it is not so unworkable as it is suggested.


I rise to support my Noble Friend in his opposition to this Clause. I think it is inconsistent of the Government in view of the fact that they opposed the Labour party two months ago tooth and nail, and now they come forward and propose practically the same thing in one of their own Bills. I resent it mainly because that Bill was taken on a Friday afternoon—it was proposed by the hon. Member for Govan and the Member for Leigh—and I was persuaded to come down to the House and vote against it because they told me it was a Bill to establish Bolshevism in this country. I had it on the authority of one of the Whips. [Cries of "Name."] It was the hon. Member for Preston. That was the statement made by the Government about that Bill. and if the Government had thoughts of that kind two months ago, it is inconsistent to alter it now.


An hon. Member opposite was a little concerned about the small number of Members who support us. I am not concerned about that. We want to divide on a principle, and a principle is a great thing after all. It does not matter how many people support it or how many shirk it because they are afraid they will be unable to justify themselves to their constituents. Here we are faced with the question, "Are you going to give municipalities the right to engage in trade to the detriment of the shopkeepers." That is the whole principle here. This Clause gives the Board of Trade a free hand to give municipalities the right to trade, and it is a matter which I suggest we ought to divide upon and take the opinion of the House. It is too big a principle to give away in this underhand fashion to the Board of Trade to exercise it when it thinks fit without imposing any conditions.


Before we divide, I would like to say we have followed this principle in the Land Settlement Act. I think Clause 18 gives all these municipalities power to trade. The House accepted that, and if it is accepted in that important piece of legislation I do not think the House should oppose it when it is proposed to give equal powers here.


The Noble Lord opposite is opposed to this, on the ground of past opinion. I think we might be led to refer to something that has been in operation in the town of Ilford. This principle of the municipal trader has already been used as a means of combating high prices on provisions. I dare say that municipality has been acting legally. I do not know, but I should imagine it would be somewhat difficult to justify what they have done. They have established booths in the market-place for the supply of provisions for the wants of the people locally. That is proved by actual practice to be a proper measure in special circumstances, and it is in a proper measure of succour that people like myself, opposed to Socialism and Communism, would support this Clause. I do not intend to supoprt this Clause on general grounds, but on the ground of immediate necessity in regard to those necessities of life, and also because the provision is for a short period of six months as experimental, and because municipal trading is limited to the articles that arc referred to in the Schedule—[Cries of "What Schedule!"]—at the end of the Bill, and are limited to the immediate necessaries of life.


I am wholly unconvinced by the argument that municipal trading is desirable in this way. I am far from saying that something could not be said for it if we were properly debating it and putting in safeguards. But I did not rise to say anything further on that, but to express my own hope that we shall not divide upon it, and for this reason: My hon. Friend said he liked dividing on principles. I have from time to time divided on principles, on a furious topic, and with no particular object, and a certain pleasure you feel in walking through the Lobby, but it does no particular good. Anyone with Parliamentary experience knows that at this period of the year and this time of the night the Government is all-powerful.


I am hardly likely to be accused of being afraid to back my own opinions, but under the circumstances I will ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause, as amended, ordered to stand part of the Bill.