§ Order for Second Reading read.
§ 2.50 p.m.
§ Lieut.-Colonel MOORE-BRABAZON
I beg to move, "That the Bill be now read a Second time."
1564 I should like, first of all, to apologise to my hon. Friend the Member for the West Derby Division of Liverpool (Sir J. Sandeman Allen) for the fact that his name is included on the Bill instead of that of his son, the hon. and gallant Member for West Birkenhead (Lieut.-Colonel Sandeman Allen).
I have always been told, I believe rightly, that a Member of Parliament should never turn up on a Friday, and that, if he turns up, he should always vote against every Measure that is brought forward. I have adopted that practice with singular success for many years, and, consequently, I find myself in a. somewhat curious position in being responsible for a Bill introduced upon a Friday afternoon, especially as it is a Bill which in a way curtails the freedom of the subject—a thing which is always aimed at, as hon. Members know, on Friday afternoons. That, indeed, is the purpose of a Friday afternoon.
This Bill affects a very big interest, and I think that, in regard to a Bill of this kind, it is just as well that we should be perfectly clear as to where we stand. I am a director of the Kodak Company. The Kodak Company make cameras which they distribute for free gifts, and the Board of the Kodak Company are very much upset with me that I should be interesting myself in the suppression of coupons. Apart, however from that, which, after all, is a negative incentive, I have nothing to do with the distributing trade at all. But I must say that I was impressed with the hardship that seems to be oppressing small and big retail traders up and down the country, and, quite by accident, I became involved in this particular form of Measure, and have stuck to it ever since.
I would like to say a word about my opponents. I want it to be perfectly clear from the very beginning that, from the point of view of the operation of their scheme, they have done it with scrupulous fairness and absolute honesty. Even in the case of such a device as the giving away of cards, where the suppression of one or two cards would stop you from getting the complete pack, that sort of thing does not occur. The cards are perfectly honestly distributed, including the "Joker," and, although a certain amount of changing takes place in the trade every morning, it is perfectly honest and above 1565 board. I would like also to pay a tribute to their propaganda, because, if there were many more Bills of this character, we should all have to provide another waste-paper basket, and we should soon be on the way to make that fortune which is promised us on the streets by saving our waste paper.
It is easy to get support in large quantities for a Measure which prima faciâ gives something for nothing. In New Zealand, where this particular subject has been ventilated, I believe that no less than 60,000 signatures protesting against the contemplated doing away with coupons were obtained, but, after an investigation, it was found that the coupon system was bad, and it was done away with. Therefore, hon. Members must not be too impressed by the number of protests that come to them by every post with regard to this Measure. We are trying to stop the giving of coupons, not coupons which are redeemable in cash, but coupons which are redeemable by goods in other walks of life to the trade in which you are buying. It is not that anyone objects to a gift in reward for purchasing something of the same character, but the coupon system has gone wrong in that it disturbs another trade to that in which you are buying. It is the giving of commodities in other departments of trade for coupons that we are trying to stop. The objection comes from the retailer. The shopkeeper, small and big, is having his business undermined.
I have behind me the support of all the national chambers of trade in this matter, and I have the support of many manufacturers. Five hundred manufacturers are in favour of giving coupons, but the rest are not. We say it is intolerable that, if I buy cigarettes, I can eventually, by the saving of coupons, get a watch or some other commodity and deprive the jeweller of the opportunity of selling me that watch, and, if I buy soap, I disturb, by the buying of soap and the collecting of coupons, a man who wants to sell wireless sets. No retailer to-day knows where he is as to his stock at all, because at any moment a commodity which he normally stocks may become a gift for coupons. The "Times" the other day published an article headed "Dona ferentes," which I thought rather gave the case away. A certain number of 1566 people think they are geting something for nothing with gift coupons. Even if they do not think they are getting something for nothing, if they are to get value for what they buy, it means that they must collect and save their coupons. Because a man has bought several packets. of one brand of cigarettes, he becomes a. sort of tied house in that line of goods. He has to continue in order to get his. money's worth. It has been shown that. 35 per cent. of the buyers are not collecting their coupons. This has been condemned in certain directions. The Food Council condemned it. They said in their Report dealing only, of course, with tea—that is all they were asked to deal with—The true and honest value of coupon tea is 50 per cent. less than the actual price charged to the consumer.The Ministry of Health from the point of view of the National Health Insurance Clause 4 say:and chemist shall not give, promise or offer to any person any gift or reward as an inducement to or in consideration of his presenting an insurance prescription.That is the National Health decision. I only wish it was spread rather further. There is an interesting remark by Lord Dulverton, the head of the Imperial Tobacco Company, who said at the annual meeting:The coupon craze has reached, in my view, distinctly unhealthy proportions, and a general disturbance of the ordinary channels of distribution has occurred which is regrettable and ultimately one would imagine against the best interests of the public themselves.".It is interesting to see how this system is having a snowball effect, because, instead of that view being held, he was compelled himself to adopt the system. Let me read some of the things that are now being offered: 150,000 shirts, 500,000, striped ties, 250,000 shirts, 2,000,000 British-made caps, 250,000 boots and' shoes, 250,000 Oxford hats—I do not know what an Oxford hat is—500,000 pairs of British made boots and shoes, and again 500,000 boots and shoes. It will be obvious that the supply of these commodities mast necessarily disturb the retail dealer. The, people who are supporting coupons and who are against the Bill are interested in grocery, and the reason for that is that at present the couponeers do not give grocery commodities. As soon as grocers' products are given away in return for coupons— 1567 and it may occur at any moment—the opinion of the grocers may change very violently. It is a fact that representatives of the grocers are on our side in England and in Scotland.
I should like to draw attention to another very sinister and cynical aspect of this development in our trade, and that is the trade that is taking place in coupons. I do not suppose, Sir, that you take in a. paper called the "Exchange and Mart," nor is it to be found in the Library, but there are two pages in it devoted entirely to the sale of coupons. This sort of thing is growing. Say there is a wireless set retailed at £5. The wholesale price will be £3 10s. 0d. But that is not the way to buy a wireless set. The cunning man looks at the catalogue supplied by the couponeers. He is not interested in the price. He sees how many coupons he has to get in order to get a wireless set. He buys his coupons, sends them to the maker and gets his wireless set. It has been said that this is a method of advertising, but in that particular transaction the man who has got a wireless set by coupons has never in a single instance got the commodity that it is intended to advertise. The thing has gone rather further. We now get protests from people of this type. Here is a man who is interested in selling machine tools. He also sells razors. This is a letter that he writes to the Gillette industry.We notice in the Kensitas gift book that your products of Gillette and Auto-strop are available for coupons, the 21s. outfit being available for 400 certificates. We understand that these coupons can be purchased at 2s. 6d. per hundred, so that for 10s. any person can obtain a new 21s. Valet razor. This seems to us an infringement of your price maintained terms:— Not to be retailed or offered for sale at a less price than that shown on the price seal. Kensitas are selling them for 400 coupons.He ends up with this very significant remark:It is cheaper for us to purchase coupons rather than to buy direct from you.If that is not undermining the whole distributive trade of the country, I know of no worse example. I would like to tell the world that far from considering a change of currency from gold to silver, we are rapidly becoming a country with a coupon currency. I do not think that we have had from all the literature cir- 1568 culated to us very much defence of the trading which is taking place in coupons. We hear a good deal about the unemployment which would he caused if the coupon system was stopped, and I have no doubt that there are many useless things made to-day by manufacturers which could only be got rid of by being gifts for coupons. What is not seen is the fact that up and down the country the retailer is feeling the draught, because he cannot sell many of the things that he would do because they are now obtained by the coupon system. Slowly, up and down the country, assistants are being discharged from shops. That is not perhaps a very noticeable thing, but we have to remember that out of 2,000,000 people engaged in the distributing trades the percentage of unemployed is exceedingly high indeed. I do not believe that this particular system is good either for the manufacturer, the distributor or the consumer.
I feel, having been in the House of Commons for a long time, that to ask the House of Commons on a Friday afternoon, even if the debate had started at eleven o'clock this morning to come to a decision from the point of view of a Second Reading of the Bill would be asking them to do a very big thing on what is a very big matter. There have been inquiries throughout the world on this particular matter; in New Zealand they have passed a law against gift coupons, in Western Australia they have done the same, and in Queensland, South Australia, Canada, and some of the States of the United States of America, Denmark, Norway and Sweden, Switzerland and other countries they have investigated the matter. I shall be happy to-day if, when the Minister replies, he will tell us that there is, anyhow, a prima facie case to he looked into to see whether this particular form of trading is good or is bad for us, because certainly it is on the increase. If he can tell us that, from the point of view of the Board of Trade, they believe that an inquiry should be set up, I shall be happy to wait for the result of the inquiry and to withdraw my Bill.
§ 3.8 p.m.
§ Mr. MABANE
I beg to second the Motion.
Like my hon. and gallant Friend the Member for Wallasey (Lieut.- 1569 Colonel Moore-Brabazon), I feel that at the outset I ought to make clear my Own position. My business interests are to a very considerable degree linked up with the business of retail distribution. I want to make plain at the start that, as far as I am concerned as a retail distributor, I think that the case against gift coupons, on the ground that it interferes with the business of retail distribution, has been rather exaggerated. While it is true that if the gift coupon spreads widely the retail distributors must be adversely affected, I should like to say that I do not think it has affected me, or those whose businesses I know well, seriously at all.
I should like to approach the matter from a different point of view, and perhaps it is better that one interested in retail distribution should. It does not seem to me that this House would have any reason to pass the Bill merely to defend the retail distributors, but it would have reason to consider the merits or demerits of the Bill on the ground, that gift coupon trading represents the intrusion of manufacturers into a sphere of business activity not properly their own—into the sphere of distribution—by means of the gift coupon. Is this a good method or a bad method If it is a good method, then by all means let it be developed. Let us do away with the ordinary methods of retail distribution. Let us close clown shops and conduct our retail distributing by means of gift coupons. The only difficulty I can see is that you would not be able to buy the goods on which the gift coupons were given. Therefore, there is a certain logical difficulty in pursuing that course. On the other hand, if it is a bad method of distribution, let the House agree with the hon. and gallant Member for Wallasey that there is a prima facie case for examination, and if this is not a good method of distributon, if it is wasteful, uneconomical, deceitful false method of distribution, let us try to discover means of dealing with it.
Those who oppose the Bill are apt to say that there is an analogy between this method of trading and the method employed by the co-operative societies, that it is unfair that ordinary traders should not be able to give seine form of gift, while co-operative societies are able to give a dividend. Surely, the positions are quite different. The co-operative 1570 societies give a dividend in money, while those who use the coupon trading method give a bonus in the form of goods other than those of their own manufacture. This Bill provides, quite plainly, that there shall be no objection to the giving of a bonus by way of cash. That would enable the gift coupon traders to be on exactly the same footing as the co-operative societies.
There is another aspect of the question. to consider. We are told by the opponents of the Bill that gift coupon trading is the most efficient and most economical form of advertising, and because that is so we should not endeavour to interfere with it. That is not the point. The point is whether it is an honest method of advertising. We are not concerned with the efficiency or inefficiency of various forms of advertising but with various forms of advertising that may have an injurious effect on the public mind. Only recently we have heard from one of the manufacturers particularly occupied in this business of gift coupon trading, in reply to a question, that these gifts were not free gifts at all. He explained that they represent no more than deferred payment. If that is so, surely it is better that they should be represented to the public as in the form of deferred payment. One of the principal objections to this method of trading is that it induces manufacturers to insert in their advertisements statements which are definitely untrue. One reads for example, thatIt is easy to be well dressed if you smoke Black Cat.I recommend that statement to hon. Members of the House who are not satisfied with their own style of dressing at the present time.
I might refer also to a statement made publicly by those who indulge in gift coupon advertising. One notices the open letters which have been addressed to the Prime Minister and other Members of the Cabinet. An appeal is made this morning to the right hon. Gentleman the Leader of the Opposition, who is informed by a certain gift coupon trader that he has always given consideration to developments that will improve the social life of the people, and he is then informedWe, along with other cigarette manufacturers, hare given cards and inserts in cigarette packets which were of little or 1571 no value, but to-day we give instead five certificates in every packet of real, definite worth.That sort of advertisement, surely, is beneath the contempt of the decent trading community. There is no argument for this sort of advertising, because it is dishonest. An argument for coupon trading is put forward on the ground of employment. We are told that if coupon trading is stopped many people will be thrown out of employment. Surely, that is a most fantastic argument. The amount of employment depends on the total amount of money available for spending, and the total amount of money available for spending will not be altered in the slightest degree by the abolition of gift coupon form of trading.
There is one further point which I think is an additional reason for urging the House to agree that this matter should be investigated. I refer to the effect of gift coupon trading on rateable values. By the derating Act of 1929 manufacturing concerns were exempt from three-quarters of their rates. Retail distributors have still to pay the full rate. If the retailer occupies a floor of his building with a manufacturing process he none the less has to pay the full rate on the whole of his building. If, on the other hand, a manufacturer occupies one floor of his building with a process of distribution he escapes three-quarters of the rates for that portion of his premises. I suggest that it is not fair that the retail distributor should have to pay the full rate for the whole of his building while the manufacturer engaged on a retail distribution is exempt from three-quarters of the rates for the whole of his building, notwithstanding the fact that he is occupying a great deal of the building with the business of retail distribution. That is a reason why the matter should be considered, in order to discover whether it is not proper to include those manufacturers who indulge in retail distribution within the sphere of the Act and pay the full rates levied by a local authority.
I regard the phenomenon of gift coupon trading, which has developed so much during the last year or two, as a phenomenon caused principally by falling prices. I believe that it is to the benefit of this country if goods are sold to the greatest extent with a brand on them 1572 which guarantees quality and fixes prices. In conditions of falling prices we have seen the disadvantage which may occur-from that desirable development in modern distribution if we do not stop the gift coupon trade. Take an instance, take cigarettes costing 1s. per 20. At one time that was a fair price, but conditions. of falling prices have made that an unfair price; it has exaggerated the amount of profit. A manufacturer finding that he can reduce the price of cigarettes to 11½. or 11d, finds also that he does not materially increase the sale of cigarettes. If he continues to sell cigarettes at Is. and an undue profit remains there is the danger of an intrusion into the field of his activities of new and, as he thinks, undesirable competitors. The only thing he can do is to attempt to absorb some of this new undue profit by means of gift coupons, and it is my belief that the development of this system has been principally caused by the condition of failing prices which has created new and unusual and too great a profit in the case of branded articles sold at fixed prices.
It is better that we should not allow, at this stage in the. development of our distributive processes, when the process of branding goods and selling them at fixed prices is developing so well, the system to be defeated by a form of trading which cannot be defended on any reasonable grounds, and which can only be defended on the ground that the public are, on the whole, stupid in the opinion of manufacturers and that by means of gift coupons their stupidity can be made a matter of advantage to the manufacturers. On these grounds I support with great heartiness what has been said by the hon. and gallant Member for Wallasey, and I suggest that this House would be well advised to support him in urging on the Government that, even if we cannot have a Second Reading of this Bill, there is at any rate a good case for the Government to suggest that further inquiry be made into this matter of gift coupon trading.
§ 3.20 p.m.
§ Mr. T. WILLIAMS
I beg to move, to leave out the word "now," and at the end of the Question to add the words "upon this day six months."
I think I express the feelings of the whole House when I compliment both the 1573 Mover and Seconder of the Motion on the very fair way in which they have introduced this Bill. I would ask at the outset why it was that the Bill was only made available to Members yesterday.
In some cases Members were able to obtain a copy yesterday, and I was one of them. In view of the irritation which has been caused by this question for such a long period, and having regard to the fact that the Mover of the Second Reading knew so long ago that he would introduce a Bill, he might have given right hon. and hon. Members the privilege of looking at the Bill long before the date of the Second Reading.
§ Lieut.-Colonel MOORE-BRABAZON
As a matter of fact the Bill only varies in two words a Bill that was before the House last Session. I regret that it has not been available earlier. It certainly should have been.
§ Mr. WILLIAMS
Of course, I accept the explanation, but I am sure that the hon. and gallant Gentleman appreciates that there are 6i million co-operators in this country, and that the Bill may or may not affect them adversely. At all events we were not assured until noon yesterday whether the Bill included cooperators or not, and even now, after the speech of the Seconder of the Motion I am not sure that Clause 4 excludes cooperative societies. From that point of view I feel justified in moving the rejection of the Bill.
Before proceeding to answer the general arguments of the Mover and Seconder of the Motion I want to deal with the Food Council Report, which has formed the basis of all the activities, for a considerable time, of those responsible for the production of this Bill. Unless right hon. and hon. Gentlemen are made aware of the facts the chances are that they will still believe that the Food Council, acting on behalf of the Board of Trade and the Ministry of Health, conducted a very meticulous inquiry into the quality of tea sold under the coupon system. What are the facts? As a result of a Parliamentary question in March, 1931, the Food Council sent out a letter to the English and Scottish Joint Co-operative Society asking for certain figures relating to tea sales, with a question in the following form: 1574If it is the practice to issue coupons with tea sold by your Company, the Council would be glad to know how long the practice has been in operation, with which blends or brands of tea the coupons are issued, and the approximate relation between the cost of the articles given in exchange for returned coupons and the retail price of the tea.They went on to say:Any information so obtained would be summarised and consolidated in a single statement.There is the further statement:Any information given them in regard to any individual business would be treated as strictly confidential.The Scottish Federation of Grocers and Provision Merchants Association set up an inquiry of their own. They were known previously to be hostile to coupon trading. They therefore did not call in independent tea testers, nor did they invite the Ministry of Health to conduct a test upon certain qualities of tea. They just applied a test that they themselves designed. They sent a report to the Food Council and the Food Council without comment, without inviting those selling tea to rebut any of the evidence of the Scottish Federation of Grocers, just sent the report of this body of Scottish people direct to the Board of Trade. I submit that that was not an investigation at all, and I think it would not be unfair to suggest to the Mover of the Motion, that, to bring forward this so-called Food Council report as evidence in favour of the anti-coupon Bill is not playing the game, either with the Food Council, the Board of Trade or hon. and right hon. Members of this House.
I want to deal with some of the supporters of the Bill. The hon. and gallant Gentleman has referred to the statement of Lord Dulverton representing the Imperial Tobacco Company. I can also bring forward as a witness Lord Bradbury and that I intend to do. Lord Bradbury is hostile to the use of coupons by tobacconists and cigarette firms and the reason is obvious. The Imperial Tobacco Company disposes of approximately 80 per cent. of the total tobacco sold in this country and if smaller firms, making use of coupons instead of spending the whole of their money on advertising through newspapers and posters, can give back to the consumers, in the form of useful gifts, seven-eighths of the sums which otherwise would have been spent on those other forms of adver- 1575 tising, they may be encroaching slightly upon the 80 per cent. control of the Imperial Tobacco Company. We may recall that this company spent in 1931 about £650,000 on advertising. Obviously in the last analysis the consumers pay that £650,000, and, not only that, but they contribute towards the £8,000,000 profit made by the company.
I can understand those concerned in this very lucrative business of selling cigarettes and tobacco—which has been almost a monopoly of one huge combine for so long—being disturbed in their peaceful equilibrium, if other retailers or manufacturers of cigarettes can find, not only a more effective means of advertising their goods, but a means of disposing of an article of similar quality in a way which meets with the approval of the customer and incidentally does not affect adversely the consumer of cigarettes or pipe tobacco. I notice that the anti-coupon manufacturers group convened a meeting in November, 1932, at which Lord Bradbury-, representing the Imperial Tobacco Company, and many other notable men were present. The report of that meeting shows that an effort was made to secure Lord Bradbury as Chairman of the anti-coupon manufacturers committee and, apparently, to judge from the statement made by the organiser of the meeting, there was justifiable reason why Lord Bradbury should be made Chairman of that committee. The then Chairman of the Imperial Tobacco Co. said the company had "nobly carried the flag" and made it clear to all concerned that they were dead against coupon trading. "Nobly carried the flag, "I interpret—and I hope I do riot do the Imperial Tobacco Company an injustice—as implying at all events that they have been financing the anti-coupon trading group.
§ Mr. WILLIAMS
If the hon. Member suggests that the Imperial Tobacco Company have not used coupons, I must advise him not to repeat that statement, because the Imperial Tobacco Company have tried gift coupon trading and failed, and it is because they have tried and failed where others have succeeded that the Imperial Tobacco Company are now nobly and bravely carrying the flag.
§ Mr. MABANE
The hon. Member was speaking of the interpretation of a phrase. My interpretation of it was correct, and his was wrong.
§ Mr. WILLIAMS
The hon. Member will not deny that the Imperial Tobacco Company produced a cigarette that they called "Four Aces," with which they gave coupons?
§ Mr. WILLIAMS
I should withdraw any statement which was not in accordance with the facts, whether it applied to Lord Bradbury, the Imperial Tobacco Company, or anybody else, and I invite hon. Members to reach their own conclusions. I want to deal with other opponents of coupon trading, because on the back of the Bill there is the name of the hon. Member for Harrow (Sir I. Salmon), and it is very interesting to notice how those, people who have tried and failed immediately turn round and attempt to attack those who have been much more successful. Here is a poster which I think I ought to read, because I am too far away for all hon. Members to read, which was produced by Lyons and Company, Limited, a sort of proclamation to all consumers of tea throughout Great Britain. I do not read it for the purpose of advertising Lyons, but if they derive any benefit, I hope their thanks will be forthcoming later. They say:Whereas twenty-eight years ago Lyons' Tea was first introduced to the British Public in Packet Form—Its introduction was based upon giving the utmost possible Quality and Value obtainable anywhere in the world.Whereas it became popular from the start"—And so on and forth, andWhereas it has never bolstered up its sale by Artificial Methods such as Coupon, Prize, or Trading Stamp Schemes—vainly promising something for nothing—it has steadfastly maintained its first principle"—and so forth. That is what Lyons say on this proclamation to Great Britain, but hon. Members will observe that that is not the end of the story, for here is another bill issued by Lyons, on which it says:Children, you can get a pop-gun free For two front labels of Lyons tea.I think, Mr. Speaker, that you ought to have the privilege of noting these pop- 1577 guns. They not only offer pop-guns, but they proceed to offer to girls and boys pencil boxes filled with toffee-scotch for a few labels from Lyons' tea. I observe that they not only attempt to entice us by giving us toffee-scotch and pop-guns, but they make use of certain other things such as magnificent money-boxes. Here is one of these choice gifts for children whose parents are wise enough to buy the best of all possible teas. For eight front labels of Lyons' tea a money-box can be obtained, and here is a sample. All one has to do is to touch a trigger, put a penny there, and it drops into the box. This is one of the kind of articles to which the hon. and gallant Gentleman referred as articles of little use or substance. I observe that the box bears the official trade mark of "Germany" upon it.
I notice that some of the gift posters are very artistic, but to some they will be regarded as positively indecent, such as the poster which I hold in my hand. I think it is correct, Mr. Speaker, that you ought to see the money-boxes and the pop-guns, but I am not sure whether I ought to turn this poster in your direction. It is issued by Hornimans who, for 40 labels from their quarter-lb. packets of tea, offer stockings in flesh colour, beige, tan and other shades. The hon. Member for Harrow, presumably representing Lyons, will not object to me intimating to the House that this firm of Hornimans have approximately 30,000 shares, of which Lyons own 29,900. There is a tea called Black and Green, and they are not to be left behind so far as gifts are concerned. The purchaser of Black and Green tea can, for 40 labels, have a beautiful Christmas stocking for the children. It is interesting to observe that Black and Green Company, Limited, have 25,000 shares, of which 24,996 are owned by Lyons.
I would suggest that those who oppose coupon trading ought to cleanse their own doorstep and proceed to the bar of public confession and intimate that, having tried and having failed—there may be certain reasons for their failure—they will not now prevent those who are much more capable and successful at organising the business from proceeding 1578 on the lines that they themselves desire. The objective of every manufacturer should be the creation and maintenance of the consumers' demand for his products. Good quality and fair price, so traders tell me, do not necessarily secure consumers' demands. Therefore, five main methods of advertising are adopted —press advertising, poster outdoor signs, solicitation by mail, house to house solicitation and gift coupons. Each method must, in the nature of things, have its own place in the commercial scheme, but I would suggest that, all things being equal, no body of people should have the right to determine how one firm or another are to advertise their particular goods. If it can be proved either by the Board of Trade, the Ministry of Health or any of the Government Departments that any body of people are acting with fraudulent intent or are unfair or insidious in their methods, then, of course, I would not object to a Bill of this kind being pressed through, but if, as the hon. Gentleman below the Gangway suggested, the only honest and true method of advertising is by newspapers, posters and that sort of thing, I would ask him what he thinks of such advertisement as "A Guinness a day keeps the doctor away", "Beechams pills, worth a guinea a box", and "Lightning Cough cure", which has never cured my cough, and I have tried it many times. Does the hon. Gentleman think that form of advertising more truthful and more honest than the form which reduces the normal expenditure on newspapers and posters—
§ Mr. WILLIAMS
It seems to me that as long as we must have advertising and only honest advertising is to be permitted, we ought to know exactly what is honest advertising. We are dealing with, things as they are, and not as we would like them to be. I suggest that that sort of advertising may be much more reprehensible than coupon advertising. Coupons have been in existence for 40 years. It is not a new thing. I can remember when quite a boy we bought Mother Shipton's soap. I do not know whether we bought it for the soap or the coupons. This 1579 system can only be justified as long as it posts no more but produces equal or better results than the other forms of advertising; and, further, as long as some small measure of benefit is handed on to the consumer. For the other form of advertising the consumer must pay and there is no return. I call attention to Clause 4, which would allow a discount to be paid. If my reading of the Measure is correct, any one who is wealthy enough to buy 100 articles may receive a discount, but the miserable wretch who, on account of his poverty, can buy only a unit at a time cannot have a reduction in price because it is in very small margins and has to be left to accumulate over hundreds of coupons.
§ Lieut.-Colonel MOORE-BRABAZON
I said at the beginning of my remarks that there was no objection to anybody redeeming coupons for cash.
§ Mr. WILLIAMS
I know that the hon. and gallant Member always wishes to do that which he conceives to be right, but the fact is that the person who can buy in large quantities will get his discount in the future as he has done in the past, while the poor, miserable wretch who can buy only one packet of cigarettes, or one pound of soap or a quarter of cheese will get no benefit whatever because his discount is so infinitesimal that it cannot be expressed in terms of coppers, but must be in terms of coupons. A reference has been made to unemployment, and in that connection I want to recall the argument about the watch.. A company adopting the coupon method of advertising can give a manufacturer a very large order and secure each watch at a reduced price. Because the manufacturer is then producing in bulk he can turn out the same article at a less price, and sells it cheaper to the ordinary retailer. To that extent, instead of adversely affecting the retailer it is going to prove ultimately a very distinct advantage to him.
The hon. and gallant Member said "Fancy a man with a coupon securing a watch. The jeweller is going to lose all his trade." The truth of the matter is if the hon. and gallant Member secures a watch for his coupons And I secure an armchair for my coupons, with the money I save through not having to buy an armchair I may buy a watch And the hon. and gallant Member, not having 1580 to buy a watch, will be able to buy an armchair. As to the other point about the redemption of certificates, we have proof positive that 80 per cent. in some cases, and 90 or 92 per cent. in other cases, of the coupons are 'actually redeemed. If they are not redeemed, it is proof that the scheme is failing from the manufacturer's point of view, because the greater the redemption of coupons the more certain the manufacturer must be that his customers 'are being preserved and are satisfied with the goods. Because some firms have been offering small, miserable gifts imported from abroad, though 92 per cent. of the goods given in coupon trading are produced in this country, it is grossly unfair to suggest that this system of trading is dishonest, inconsistent with fair play, or is an indirect attack upon either retailer or manufacturer. This has been an irritant for long enough and there ought to be no further delay. There ought not to be 'any suggestion of a committee, because a committee means uncertainty. A decision ought to he taken in this House to-day. I hope that after this Amendment for rejection has been seconded, e shall proceed to a decision so as to settle the question once for all.
§ 3.51 p.m.
§ Sir FRANCIS FREMANTLE
I wish to support the Amendment. I come to this subject with a more detached view than is the case, perhaps, with those hon. Members who have spoken hitherto. I will confess that, when the matter was first coming into the public eye, I was asked by my constituents for my opinion on the subject, and that my general opinion was in favour of suppressing in any way possible the coupon system. We all know through our post-bag the annoyance of the coupon system, and it occurs to us not that is is an exceptional annoyance but that it is on a par with various other forms of advertising to which reference has been made. The natural common sense of the business has always struck one strongly in this way: why should so much money be wasted upon objects which for the most part we should not want to have? Obviously, the cost must come out of the pockets either of the producer or of the consumer. My general tendency was to say that I would be in favour of a measure for restricting the coupons.
1581 Fortunately, I did not commit myself before thinking further. It is particularly fortunate that I find myself President of the chamber of commerce in my constituency, and I have to preside over their dinner next Tuesday. I understand that some of the members are very strongly in favour of the Bill and that others are very strongly against it, and I have to take up a definite line. Naturally, I have had to think over the matter. I am very much moved by the arguments that have been brought forward to show that this question of coupon trading, which to some of us seems so wasteful, is simply a more modern form of the system of advertising. Before I go any further, I want to deal with one specific point that was raised by the hon. Member for Huddersfield (Mr. Mabane). He brought forward a suggestion that the manufacturer in the ordinary way of manufacturing goods is relieved of three-quarters of the rates on the parts of his buildings that he devotes to retail distribution, whereas the distributor of coupon gifts has to pay in full on that part of his premises. It seems that there is an element of unfairness.
It is not an important point, I am assured. It is clear that when a manufacturer gives orders for these coupon gifts to be distributed, as a general rule the orders are given for them to be distributed by the manufacturers themselves, direct from their place of business, and not from the place of business of the manufacturer of the primary product, who very seldom distribute these coupons themselves. Therefore, they have not a part of their buildings which would compare with the buildings of the coupon distributors, and the point raised by the hon. Member for Huddersfield therefore falls to the ground.
§ Sir F. FREMANTLE
There are a few cases where the manufacturer does distribute direct, but I understand that only a very small part of the building is devoted to that purpose, and, therefore, there is no real incompatibility. The real question is that of the small trader. As far as I can gather from my own constituency the small trader, while he is unable to deal in coupons, has to compete with the larger firms that do so 1582 deal, and who, owing to that fact, withdraw business from the small trader. We have strong sympathy with the fears of the small trader in this respect. The case, apparently, is quite different with the large trader, because he is competing with the still larger trader who does not deal in coupons. But the small trader is really afraid of the competition of these larger firms, with the advantage that they get from coupons. That is, unfortunately, part of the general system under which the larger trader, with a larger sphere of business, is able to compete with and overwhelm the small trader.
I do not think, however, that the coupon system constitutes a sufficient part of the competition that is overwhelming the small trader to be taken seriously by this House. The small trader has either to combine with other traders so as to be able to adopt the larger measures undertaken by his competitors, or he has to go under. That is the law of future development, and we cannot stand in its way. It is suggested that this matter is so disturbing to business generally that the Government have promised a committee of inquiry—[HON. MEMBERS: "No !"] It has only been said. I hope the Government will make no such promise. The issue is straight before us, and requires no inquiry. It is as to whether the State should step in in regard to one minor part of the modern system of advertising. We know beforehand what subjects will come out at such an inquiry—the amount of employment or unemployment, whether there is honesty or not, and so on—and what the answer will be. The question will be the same as that which is before the House to-day, namely: Is this the kind of subject in regard to which the Government ought to interfere with the ordinary process of supply and demand in industry?
There is no need for an inquiry. The one thing that is being urged upon Members of my party is that we should be against D.O.R.A. in any form, but what is suggested here is the setting up of a new form of D.O.R.A. Moreover, a committee of inquiry is not a thing that costs nothing. It costs thousands of pounds, it hangs up the question for months, and probably years, and we have the definite figures of the auditors 1583 who have gone into the matter showing that there are something like 20,000 or 30,000 employés directly concerned who will be thrown out of employment during that time. We must take these facts into account, and we ought not, in order to get over a temporary difficulty, to ask for a committee of inquiry. We must have the courage to decide now.
§ It being Four of the Clock, the Debate stood adjourned.1584
§ Debate to be resumed upon, Monday next.
§ The remaining Orders were read, and postponed.
§ Whereupon Mr. SPEAKER adjourned the House, without Question put, pursuant to Standing Order No. 3.
§ Adjourned at One Minute after Four o'Clock, until Monday next, 13th March.