§ Question again proposed, "That the Bill be now read a Second time."
§ 7.0 p.m.
§ Mr. Kingsley Griffith
I should like to begin by congratulating the President of the Board of Trade on the comparative clarity of this Bill. As far as I know, there is in the Bill only one reference to another Act of Parliament, and that is quite an easy one; and the Bill as a whole can, I think, be apprehended quite easily by anybody who reads it carefully once. One can see what it means and what it is getting at, which is, comparatively speaking, an exceptional thing in any Bill that is brought before the House. But it does not follow that because the Bill is intelligible it will be easy to administer. I do not think any Bill dealing with prices can be easy to administer. Price-fixing in any form is one of the most difficult tasks anybody can undertake, for it seeks to impose a certain measure of rigidity in what is in itself a necessarily fluid matter. There are so many hundreds of different factors which contribute to the proper price of an article that State action in trying to arrive at any kind of regulation is a matter fraught with a great deal of difficulty and danger, and it is very difficult to arrive at the results which are desired. Whatever arrangements may be made with regard to prices, there are always ways in which evasions may take place. Let me mention one matter with which I do not think the President of the Board of Trade dealt in his speech, clear though that speech was. When the price of an article has been fixed, there is always the question of quality and the possibility that there may be some subtle evasion of the regulation of prices by an alteration in the quality of the article produced. That is a matter which it will be very difficult to deal with by legislation.
Perhaps the most important of all the parts of the Bill is the First Schedule, for it is in the First Schedule that there are 1131 set out the considerations which the various committees and the Board of Trade are to take into account in deciding what is to be the permitted increase, and the permitted increase, of course, is the important matter. The basic price is a comparatively artificial thing; that is to say, it is arrived at by an arbitrary standard, taking an arbitrary date, although I admit there are certain flexibilities allowed where the date is not a suitable one; but it is arriving at the permitted increase, whether it be done correctly or not, which will determine whether the Bill protects the public on the one hand and abstains from interfering unnecessarily with trade on the other hand. Looking at the First Schedule, I am bound to say that I am very considerably impressed by it. It appears to me to show very considerable forethought and consideration of a very large number of matters, but I hope it will not be regarded as a matter of finality. I observe that at the end of the first Schedule there is a power reserved by the Board of Trade to make an order which takes into considerationAny other matter specified in an order made by the Board of Trade under this Schedule.…I have very little doubt that that power will have to be used. It is almost impossible, in framing a Bill of this kind, before it has actually started working, to exhaust all the considerations which will have to be taken into account in deciding what should be the permitted increase. To mention only one matter— and I am not saying for a moment that I have considered it enough to know whether it is a matter that ought to be added in the First Schedule—the question of bad debts is at the present time making a very considerable difference to a great many traders. It is not a question of ordinary bad debts, but bad debts which, in a sense, are forced upon them by Government action and the policy of the country. There has been a great movement of population, and shopkeepers are finding that the very debtors upon whom they were depending for payment have disappeared into the reception areas, where they may be very difficult to trace. I do not for a moment say that I have formed any conclusion as to whether this consideration should be 1132 added to the Schedule, but I indicate it to show that there are many matters on the margin of the Schedule, as it were, which may hereafter have to be considered.
It is clear that a great deal will depend upon the central and local price regulation committees, of the constitution of which by the way we know very little at the present time. We do not know how many there are to be—it may be that there will be one in an area—or exactly the kind of people who will sit on them, or their method of procedure, and how they will set about their task. Doubtless this will be worked out in time. I must confess that I am rather relieved to find that the estimate of the cost of these committees is put at only £45,000 per annum It is a sight for sore eyes in these times to find any kind of estimate dealing with thousands of pounds instead of millions of pounds; and apart from that, the estimate seems to set some kind of limit upon the scale of the machinery that is to be set up under the Bill. I have been seriously perturbed at the hosts and hordes of boards and committees and officials that are being set up with regard to every conceivable kind of subject. It appears to me that there is some danger that half the country will be working and actually doing something; and the other half will be employed in watching them do it and telling them not to. I am relieved to find that the machinery necessary for operating this Bill is, in the opinion of the Board of Trade, on such a comparatively modest scale. I should like now to ask one or two questions which relate to matters of detail and which are, perhaps, in a sense, committee points, but if I indicate them now, it may enable them to be dealt with when we come to the Committee stage. They have reference particularly to Clause 10 of the Bill, with regard to which the President of the Board of Trade did not say very much. I have referred to the clarity of the Bill, but in this Clause I detect a certain amount of ambiguity which I should be obliged if the Parliamentary Secretary would clear up, if he can. In Clause 10, Sub-section (1), there is the following provision:It shall be unlawful for any person to whom an offer to buy price-regulated goods is made to impose, as a condition of the acceptance of the offer, a condition to the effect that the buyer shall buy any other goods, whether being price-regulated goods or not.1133 What exactly does the term "other goods" mean? It has two possible meanings. Does it mean other goods than those contained in the offer, or goods of an entirely different character and description from those contained in the offer? I can imagine this situation. I might go to the President of the Board of Trade and offer to buy from him, let us say, three dozen socks at is a pair. He might say, "I cannot let you have them at that price if you buy only three dozen, but if you buy a gross, that will be my price for a gross." Thereby, it is possible that, under the provisions of this Clause, one would be doing an illegal thing in that one would be consenting to accept an offer that had been made on condition that other goods than those which had been contained in the offer would be ordered. If the President of the Board of Trade can assure me that it does not mean that, but that it means something like attaching a condition about buying butter to an offer to buy sugar, then it is an entirely different thing; but if my first interpretation is the correct one, the provision might possibly put a limitation upon the very ordinary commercial process, which is, I think, entirely unobjectionable, of offering a lower price where a larger quantity of goods is taken. Another ambiguity appears to me to arise in the last sentence of the same Sub-section, where it is stated:or a condition to the effect that the buyer shall pay for any services in respect of the goods to which the offer relates other than transport or insurance.Is the right hon. Gentleman sure that transport and insurance are the only services for which a charge may be made? I am thinking particularly of credit. Is not the giving of credit to the purchaser, in itself, a service? If I offer to buy from the right hon. Gentleman 100 gross of pairs of socks at 10d. and if he says," That is my cash price but if you want your usual terms of credit, three months or whatever it may be, I may have to charge you 11d.,"that might be considered an additional charge, in respect of a service, that service consisting of helping the buyer to finance his transaction by allowing him a stated period of credit. It has been indicated from certain sources that there is some doubt as to the meaning of the Clause in that respect. If credit is, indeed, to be considered a service for which an additional charge may not be made, once again 1134 there will be considerable interference with ordinary commercial practices which are in themselves unobjectionable.
I may mention in that connection Clause II which is a prohibition of the holding up of stocks. It deals only with offers made "with a tender of immediate payment there for." It is clear that there you are dealing with cash transactions. In Clause 10, it is not equally clear whether what is contemplated deals with cash transactions solely, or whether any provision is made for making any different price in cases where credit is allowed. I am very glad that Clause 11 has been worded in such a careful and circumspect fashion. If it were just a plain prohibition on the holding up of stocks and an insistence that orders must be accepted, it would lead to commercial chaos. In businesses of which I have some knowledge I am aware that, both in the September crisis of 1938 and in the crisis at the beginning of this war, there was an enormous amount of rather ill-considered and sudden buying. People who were entire strangers to the business came in and made very large offers of cash which, if accepted, would have denuded the business in question of its normal stocks and prevented it supplying goods to its more regular, and if I may put it that way, its more reasonable customers. That would be a disastrous thing, and I think the careful wording of this Clause has avoided that grave danger.
There is only one other point of detail which I wish to mention. Clause 13 provides that the Measure shall not apply to a sale or an agreement or offer to sell for an amount fixed by auction. That, I agree, would be impossible. It also provides that the Measure shall not apply to a sale or an agreement or offer to sell goods intended for export. I realise that it might be difficult to apply the machinery of this Bill to goods intended for export. At the same time, I do not think it will be denied that a good deal of damage can be done, and has been done in the past, by the charging of excessive prices for goods intended for export. Towards the end of the last war, and, in particular, immediately after the last war, I believe much harm was done to certain important British trades by the charge of preposterous prices for exports which had at that time to be accepted by nations which needed the goods. Those nations had never forgotten it. Not only 1135 have they gone to alternative sources of supply, but I know that in the case of one nation with whom we are friendly to-day and with whom I hope we may remain friendly—I refer to Italy—an enormous amount of ill-feeling was stirred up immediately after the war owing to the prices that were charged for things needed by Italy and supplied by this country. I hope that there will be some kind of supervision, and that if provision cannot be made in this Measure, some kind of watch will be kept to ensure that mistakes of that kind do not happen again.
I am not altogether in agreement with the right hon. Gentleman who spoke last that this Bill depends entirely upon the amount of operation which actually takes place under it. I hope that, if need be, it will be worked to the full and applied with the utmost rigour of the law when it is passed. But I think that its mere existence is of considerable value. Once it has been passed it will have a considerable effect, in terrorem, on greedy and grasping traders who are, I believe, in a very small minority among all the traders in the country. They will know that they can be called to account and punished if they offend against these provisions. At the same time, it will give a certain amount of ease to the minds of the purchasing public. It is extraordinarily hard for the ordinary customer to know whether he has been swindled or not. If he goes to a shop and sees that an article has gone up in price by 30 per cent., his tendency is to say, "What thieves they are." That may or may not be true. The 30 per cent. increase may, in certain circumstances, barely cover its share of the overheads of the business. If it is known that there are expert committees dealing with prices—and I hope the committees will make themselves generally known and trusted by the public —there will be less likelihood of panic movements and rumours of robbery which may be without foundation.
In any war which lasts for any considerable period, there are bound to be agitations of at least three kinds. There will be an agitation against spies, an agitation against prices, and an agitation against the Cabinet. There will be cries of "So-and-so must go" and "Sack the lot" and all that. All those agitations will probably have some considerable 1136 basis in fact. What we have to see is that the innocent do not suffer with the guilty, and, by the innocent, in the last instance, of course I mean the Board of Trade. I should hate to see a slaughter of the innocents in that respect. Although we may find in Committee that this Bill needs alteration, I think in its broad outline, if properly administered, it will genuinely protect the public, and at the same time cause no real hindrance to legitimate trade.
§ 7.20 p.m.
§ Sir George Schuster
I wish, at the outset to express my agreement with the hon. Member for West Middlesbrough (Mr. K. Griffiths). I welcome the Bill wholeheartedly. I regard it as a well-designed and sensible Measure, and speaking as one who has been representing a large trade organisation, I would like to express appreciation of the way in which the Board of Trade has taken us into consultation in dealing with it. As gratitude is always a very lively sense of favours to come, I was very glad to hear from my right hon. Friend that he proposes to continue that process of consultation, particularly when it comes to considering the composition of the committees and the instructions which might be issued to such committees by the Board. I do not want to go into the details of the Bill this evening, because there will be other occasions for that. I should only like to express the view that there are two very important practical points—one, the instructions that will be issued to the committees for their guidance, and, secondly, the question of the composition and membership of those committees. I feel that it is perhaps worth making one point as regards the committees. I believe that one of the dangers to be guarded against is that they might develop into a sort of party organisation, with consumers' representatives on the one side and trading representatives on the other. I believe it is very important to get, as much as possible, completely impartial people on these committees—chartered accountants for example—who have a real knowledge of business and who understand costings and that kind of thing.
There is one other point of detail that I should like to put to my right hon. Friend. If one looks at the first Clause, about the kind of goods to come under 1137 this Bill, and if one reads that together with the explanation which we have had, I understand that the goods which will be specified as price-regulated goods will be goods of common use, the price of which goes to make up the cost-of-living index. I suppose that, normally speaking, my right hon. Friend is thinking in terms of finished goods, such as overcoats, or boots, or articles of that kind, but I want to ask whether the question of price regulation will follow the process of manufacture backwards to half-finished goods and raw materials, because it will be very difficult to control the price of standard completed articles unless the control goes right back to the first stages.
"Having expressed that general commendation of this Measure, to which I would add, on behalf of all those to whom I have spoken about it, an expression of our desire to help in its operation, I want to turn to a wider issue, I must go on to say that the best friend of this Measure could not claim that, as it stands, it has more than a very limited scope. If we regard it as part of a general plan to control prices and to prevent an unnecessary rise in the cost of living, then I think we should consider how that purpose ought to be fulfilled and what steps are necessary to supplement a Measure of this kind. We had yesterday a very interesting Debate on economic co-ordination, and I think one may say that agreement was expressed in all quarters of the House that, having regard to the task which is before us, we new need what one could describe as a co-ordinated national effort to mobilise the whole resources of the nation. The plea was vigorously put from the benches opposite that that co-ordination must be complete and effective, that there must be complete control, and that, particularly as regards prices and profits, there must be no repetition of what happened in the war of 1914–18.
Those are purposes with which we all agree, but the point that I want to make is this: We can see in the world to-day practical examples of that sort of control put into operation. Things that many people said in the past were impossible have in fact been done in a practical way in both Russia and Germany. But I think we want to appreciate what that means. I happened to be turning over the other day a very interesting article 1138 which appeared in "The Banker" early in 1937, written by a number of German business men, as to how control was working in Germany, and among the points that were brought out in that article were some points which I think it will be valuable for the House to appreciate. It was estimated early in 1937 that no fewer than 500,000 whole-time employés were engaged in operating the system of control in Germany. There were six different authorities controlling the machine, controlling supplies of raw materials essential to each industry, what each should make, and so on. They referred to an inquiry which had been carried out by a South German chamber of commerce, which had gone into the position of a number of small businesses employing from 100 to 200 people, and they found there that 75 per cent. of the cost of the clerical work in those firms went in filling in Government forms. It was calculated that each single transaction, taking normal transactions and quite apart from export transactions, involved the filling-in of 140 forms, and when it came to transactions for export, or transactions which involved the purchase of imported raw materials, the number of forms to be filled in went up to something like 700. A particular example was quoted where 10,000 lbs. of wool were imported in exchange for some German toys, and in that particular case 780 forms "had to be filled in, and it was 18 months after the transaction was completed that the official regulations were complied with. I want to put it to the House that that is the sort of thing which has been necessary in order to work a complete system of control, and I do not believe that a system of that kind will be tolerated in this country. Granted that we must produce this co-ordinated national effort, we have to produce a different technique, and I believe that that technique will consist in co-operation between the Government and the organisations of private industry.
Arising out of that, I want to put this point to my right hon. Friend: I have already mentioned that I happen to have been dealing with this matter as chairman of a special War Problems Committee set up by the Multiple Shops Federation, which is a federation to which all the important multiple shop companies belong. I suppose it represents one of the largest organisations in the country. 1139 We have been considering this whole problem for some time, and we passed a resolution early in May of this year to this effect:In the event of the country being involved in war, there must be a plan which will ensure that material resources no less than man-power are to be at the country's service, that national interests are not to be subordinated to profit-making, and, further, that as such a plan must be prepared in advance of the national emergency, this Federation desires forthwith to enter into discussions with the Government in this matter so far as concerns the business of its own members.That was a seriously intended resolution, and I think that hon. Members opposite will agree that its sentiments were worthy sentiments. It was communicated to the Prime Minister and the Chancellor, and the Prime Minister replied that we had quite rightly put it before the Chancellor as it fell within his sphere. We got no response, however, until the end of July, when one of us was invited to see an official at the Board of Trade. I want to put it to my right hon. Friend that that sort of approach from private industry merits a better response. I am not suggesting that we had anything very wonderful to contribute. I am not blaming my right hon. Friend about this, nor am I claiming that private industry is free from blame. I believe indeed that private industry ought to have done more in getting together an organisation to consider these war problems and in working out practical suggestions, but it is very difficult to do that unless there is some response and lead from the Government.
If we had started conversations in May we might have done a good deal to help my right hon. Friend in considering these problems, and the result might have been that a great many of the very hectic discussions which have been going on since the beginning of the war as to profit margins might have been avoided. The right hon. Gentleman the Member for Hillsborough will bear me out, for he is only too familiar with the discussions that have been going on with regard to proper profit margins on articles like tea and so on, that these discussions could all have been started long ago, and that it is embarrassing to have to settle these matters after a war has begun. I want to put it to my right hon. Friend that there is a very genuine desire to co-operate and 1140 that, if we are to evolve that new technique by which we shall be able to produce a co-ordinated national effort to avert the sort of control which has been imposed in Germany we must expect from the Government—
§ Mr. Stanley
I hope that my hon. Friend will not leave the impression in the House that I have refused to co-operate. When the Ministry of Food was under my Department last winter—not last spring—I remember my hon. Friend coming on several occasions, and I had a number of talks with him with regard to these war-time problems.
§ Sir G. Schuster
I agree, and I accept that. My right hon. Friend was very good in giving us his time, but there is the particular fact to which I have referred, which carried the whole suggestion on to a much wider basis. I am afraid I cannot withdraw my point that an approach of that kind from an important business association did merit a better response, and that, if the Government were ready to respond to approaches of that kind we should be in a better way to finding a satisfactory solution of these problems. I want to insist upon that point because I believe that as the war goes on, if we want to get through it with the cooperative effort which is needed, and with the right spirit, there must be close cooperation between Government and representative organisations of private business. That is aheady working very well in certain directions where you have well organised industries like the iron and steel trade. It was possible to impose Government control as the Chairman of the United Steel Company said at his general meeting last week, without a ripple on the surface of business. That was the case of a well organised business; but a large part of the business of this country is not so well organised and it will be necessary to find ways and means of getting all that vast field of private enterprise somehow or other into gear with Government purpose and Government policy.
Before I conclude I should like to take up the point that was made by the right hon. Gentleman the Member for Hillsborough (Mr. Alexander) when he referred to the vast profits which have been made. It is important to point out to the House—for nothing is more important than that we should understand each 1141 other—that merely to make profits is not a sign of operating against the public interest. I would put it to my right hon. Friend that the man who can give good value and still make a profit is rendering a great service to the community. I would say, for example, that a man like Lord Nuffield has been a great public benefactor, and, in opposition to that, I would say that "public enemy No. 1"is the inefficient business man who, without giving good value, manages to carry on his business without a profit. It is also worth while to put before the House the view that the vast majority of private business people now are only too anxious to work for the public purpose. They find themselves a great deal hampered by all the regulations which are now imposed and find it difficult to see what may happen in future. In these circumstances, sometimes perhaps in self-protection, they do things which, if they knew what the public purpose was, they might avoid doing. We hear a great deal about instances of undue profits.
There is an important point in connection with profits, and it has perhaps a bearing upon this Bill. There is a general feeling in the public mind that if a tradesman happens to be in possession of stock which he has bought at a cheap price, and the price then goes up, and if he puts the prices up, he is profiteering. I would like to put this point to hon. Members opposite. It is one of the most difficult points in connection with the whole business of retail trade or of any kind of trade. There is a simple story which illustrates my point. It is told of a German ironmonger at the time when prices were rising rapidly and the value of the mark was falling. This fellow purchased one cwt. of nails for 100 marks. The price of nails went up, and he was glad to sell his nails for 200 marks. He found, however, that when he came to reinvest his 200 marks in nails he could buy only half a cwt. He sold his half cwt. for 400 marks, but again prices rose and he could buy only 28 lbs. of nails. And so it went on until finally he was left with only one nail as his stock-in-trade, and on this he hanged himself. That is an exaggerated example, but there is a great deal of truth in it for it means that the tradesman must protect the value of his stock in trade. If when prices are rising he sells his goods at something below their replacement cost and con- 1142 tinues doing so, he is bound sooner or later to share the fate of that German ironmonger.
That fear of what is going to happen to prices, and where a man will be left at the end of the war if, as is expected, there is an inevitable fall in prices, is one of the considerations which operate most acutely on the policy of many of those engaged in business to-day. I think it is important that their difficulties should be appreciated and that there should not be any undeserved criticism of them. We all join in expressing the greatest detestation of the real profiteer, but I ask my hon. Friends opposite not to be too hasty in condemning every small tradesman who they may think is making an undue profit. What we need is a clear Government policy. What we need also is some measure of co-ordination between small businesses and the purpose for which we should work is what I have already described as the purpose of somehow or other getting the whole of the private industry in this country into gear with the Government machine.
§ 7.41 p.m.
§ Mr. Silkin
No Member of the House will complain of the speech of the President of the Board of Trade in introducing this Bill. He denounced profiteering in terms which no one on this side could improve upon. Early in the war he promised that he would introduce a Measure which would deal effectively and comprehensively with the evil of profiteering, and that was the reason he gave for not being ready with a Measure straight away. Looking at the Bill in the light of the sentiments expressed by him, I cannot help feeling a sense of disappointment at the limited scope of it. I believe that he is as anxious as anybody else to deal with the evil of profiteering, but if he examines his Bill he will find that it really does not deal with it either effectively or comprehensively. As the hon. Member for Walsall (Sir G. Schuster) said it is very limited in its scope. In the first place, it does not deal with goods generally but only with such goods as the Board of Trade decide to regulate. We have had from the right hon. Gentleman a general statement of the kind of goods it is his intention to regulate, but the House is giving him a blank cheque, and as my right hon. Friend the Member for Hillsborough (Mr. Alexander) said, it is a 1143 matter of opinion whether goods are necessities or luxuries.
It is going to be very difficult to deal with goods on the basis of a particular quality. The right hon. Gentleman will have to deal with goods by way of description, and it will be very difficult to establish that the goods which are being sold by a particular dealer are similar in quality to the goods which are regulated under the Bill. It seems to me that will limit the goods which can be regulated, and that the right hon. Gentleman will be able to deal only with goods of a standard, well-recognised quality and that others will be excepted. Moreover, he says that it is not his intention to deal with luxury articles, and it will be possible for large chain stores like Woolworth's or Marks and Spencers if some articles are limited in price to recoup themselves out of the many other articles they sell which will not be regulated.
Further, it does not seem to be the intention to deal at once with all the articles which it is proposed to regulate. It looks as though the President of the Board of Trade proposed to wait until there was some evidence of profiteering. My suspicions about that are confirmed by the terms of the Bill, because it is indicated that when he decides to regulate the price it may be so long after 1st August that it will be difficult to ascertain what was the price on 1st August. I see the right hon. Gentleman dissents from that, but if that is not so I do not understand the terms of the Clause which assumes that there will be some articles about which there will be difficulty, by reason of the lapse of time, in ascertaining their price on 1st August.
§ Mr. Stanley
That refers to a prosecution, and that may be months or years after the goods have been brought under the terms of this Bill.
§ Mr. Silkin
The right hon. Gentleman will be fixing the basic prices, and that should be done in the near future. Many household goods in everyday use will be excluded from the operations of the Bill simply because of the difficulty of describing them in a standard form, the difficulty of laying down a description which will incorporate all goods of that class. It is our experience that the poor generally 1144 buy goods of an unascertainable description. It will be very difficult to fix a basic price for such goods, and that will leave many gaps in the Bill. The President of the Board of Trade should consider seriously how he can broaden the basis of the Bill so as to incorporate most of the goods which the ordinary person will have to buy and in such a way that he will not merely have to rely upon the description of those goods.
My second criticism of the Bill concerns the machinery. The right hon. Gentleman wishes the local price regulation committees to have as great powers as possible, and one of their duties will be to enforce the provisions of this Measure in their locality. As I understand the procedure, any member of the public who has a complaint will have to go first to the local committee—if he can discover where it meets, and in the multiplicity of committees that may be a matter of some difficulty. Then he may discover that his complaint relates to an article which is not regulated and in that case nothing can be done, and the seller of the goods is at liberty to profiteer. If the complaint relates to a regulated article, then it must be investigated by the committee, who will doubtless hear evidence and possibly inspect the books of the seller, and they may even interview the tradesman against whom the complaint is made.
After what may turn out to be a long procedure, if they are satisfied that there is a case for prosecution, they cannot themselves institute it. They have to report it to the Central Price Regulation Committee. This committee may go through exactly the same investigation. Unless they do so, they are merely accepting the decision of the local committee. At the end of it, if they are satisfied that there is a case for prosecution, even that committee cannot order a prosecution; they have to refer it to the Board of Trade. The Board of Trade then investigate the case for themselves; they carry out a third investigation. If they are satisfied, even then they are not required to institute a prosecution. If the hon. and gallant Gentleman who is to reply will look at Clause 8 (4) he will see that it merely says that a prosecutionshall not be instituted except by the Board of Trade upon request.It does not say that if the Board of Trade are satisfied, after the three investigations, they shall prosecute. They 1145 may be quite satisfied that the case merits prosecution but, under the terms of the Clause, they are not obliged to prosecute.
This machinery does not look to me to be the sort for dealing effectively, expeditiously and with certainty with profiteering. There are two many loop-holes and too many opportunities for the profiteer to escape among the intricacies of the various investigations. If the Government are really serious in dealing with this problem, why do they not give the local committees power to order a prosecution if they are satisfied that the profiteering has taken place? Local committees would not be in a position to impose a penalty; they could only order the prosecution and the case then would go to the magistrates, who would decide, upon the evidence before them, whether the person complained against was really guilty. It seems to me that this complexity of machinery will seriously stand in the way of any effective prosecution of profiteering.
Moreover, if in fact, as is the case, the local committee are merely clearing houses, only have the power to decide whether or not to recommend prosecution, I submit that they will not fulfil the function which the President of the Board of Trade desires for them, namely, that they should carry out important and serious duties. Their only function under the Bill be to decide whether or not to submit to the central committee a case which has been put to them. I doubt very much whether you will get serious responsible, well-informed and busy people to serve on a committee of this sort where they will have no really executive power. I should have thought that a local committee such as the right hon. Gentleman desires to set up of responsible local people would be given power to make representations to the Board of Trade as to the kind of goods which it was necessary to put under price control, but they have no such power. Of course, anybody can make a representation; it does not need a local price regulation committee to do that, but I should have thought they would have had specific powers to do something of the sort in order to look after the interests of the consumers in their localities. They should be able to make such representations as they think necessary to the Board of Trade. In view of the very limited 1146 powers that are given to the committees I very much doubt whether you will get —I speak with some knowledge of local government, apart from anything else— responsible and suitable people to give their time to this work when they know very well that at the end of the day, after their recommendations have passed through the sieves of the central committee and the Board of Trade, nothing may come of their complaints.
My last criticism is that the ordinary consumer who is, after all, most affected by the Bill, and for whose benefit it is being introduced, is given very little status in the Bill. For instance, he cannot apply under Clause 5 to the Board of Trade that they should specify a basic price. Only persons who are tradesmen can do that. The same applies to a permitted increase or a permitted price; these things are not open to the ordinary consumer. Under the Clause by which the Board of Trade may fix a price, there can be an appeal against an Order made by the Board of Trade. All sorts of persons have the right of appeal to the referee but not the general public and the consumer, who is the person most concerned. Moreover, if a complaint is made to the local price regulation committee and the committee declines to act, there is no effective remedy.
I do not know what is to be the constitution of these price regulation committees. The Bill is silent about their constitution, which is left entirely to the Minister. I make no complaint about that, but I submit that unless very great care is taken there is a possibility in some localities of interested persons finding their way on to these committees. It may well be that, being local people, they will have some reluctance to order a prosecution in cases where the evidence is clear that they ought to do so. In such a case, and where a person has a legitimate grievance, there is no machinery in the Bill for allowing such a complainant to appeal. I should have thought there would be some machinery for him to go to the Central Price Regulation Committee if he felt dissatisfied with the way in which the local committee had dealt with the matter. I am aware that the Director of Public Prosecutions may step in is certain cases, but I am not satisfied that this provision gives 1147 adequate protection to the ordinary members of the public.
While there is no intention to divide the House against this Measure, and while one welcomes anything which may have the effect of deterring the profiteer, I hope that the right hon. Gentleman will, on the Committee stage, be prepared substantially and radically so to amend his Bill as to render it a more useful Measure, capable of dealing expeditiously, effectively and comprehensively with the anti-social evil which all Members in this House are anxious mercilessly to eradicate.
§ 7.59 p.m.
§ Mr. Higgs
A Bill with such drastic provisions must have the will of the people behind it if it is to be worked as it should be worked. I believe that we shall have that support. This Measure will affect us all, and the longer the war goes on the more the Bill will affect the whole community. The Government are taking the profiteering question in hand at the beginning of the war, and not at the end of the war as they did on the last occasion. We must differentiate between profits which are made from efficient production and those which are obtained by charging excessive prices. With regard to the first class, as long as two years ago taxation was first imposed upon excessive profits. We now have a 60 per cent. Excess Profits Tax and increased Income Tax and Sur-tax, and these are not directed against profiteering. Therefore, the necessity for this Measure. During the last war the Government fixed the price of certain commodities but, as soon as they were fixed, those commodities practically went off the market. There is a provision in this Bill that it will be an offence to refuse to sell stocks which are in hand when the price is fixed.
I am glad to see that there is a provision which admits the necessity of profits. Without profits business would not exist. Exports are exempt, but we must remember that there is still competition overseas. Profiteering overseas during the last war primarily occurred with coal. In regard to manufactures, there are now many more manufacturing nations than there were during the last war. Nations all over the world are capable of manufacturing secondary commodities, and it is that competition that 1148 we have to watch. I should like to know why the Bill is to be confined to commodities specified by the Board of Trade. I consider that it would be desirable to apply it to all commodities. The Bill is a very elaborate one. The complicated routine through which complaints have to go before a prosecution can be instituted is going to cause considerable difficulty in administration, and it is to be hoped that that Clause will be modified. It is a very slow and inefficient procedure. I consider that investigation must be considerably simplified.
The profiteer is still with us and I am convinced that he is not doomed even under this Bill. Fines up to £500 and imprisonment can be inflicted, but the difficulty of enforcing those fines has been pointed out. We have had a spate of legislation recently before the House. A Bill of this description has a much wider scope than the Factory Act, which took practically a session to pass through the House, and it took an army of inspectors to enforce it. We have no opportunity of that kind to enforce this Measure. It has been drawn by the same official mind which drew the Factory Act, and they anticipate its being administered in the same manner, and that in my opinion is where the Bill is going to fail. We have very elaborate legislation with regard to motor cars. I am opposed generally to trade combines because their ultimate object is to maintain selling prices but when it comes to fixing a maximum price, as this Bill is intended to, I think it is possible that combines may be of great service to the community. In fact, I think that with their use there would be less confusion than there may be by administering the Bill without their assistance.
Clause 5 enables representative bodies of traders to ask for prices to be fixed, but it. does not provide that they can submit prices to the Minister for his approval. I suggest that they should be permitted to submit prices to the Minister and, unless he disapproves, they should be considered to be permitted prices. I know that in making that statement we include vested interests, but to work a Measure of this kind we have to have vested interests. We have to include those who know something about the particular industry, and it will be the Minister's duty to be satisfied that the organisations entrusted with fixing those 1149 prices fully represent the industry concerned. We have to have specialised knowledge if the Bill is to be a success. I consider that trade combines are generally out for their own benefit, but I think they are as patriotic as any other organisation when they find the country in the condition it is in. To show the difficulty of administering the Bill if it becomes an Act, we all know that we can buy a motor car at a fixed price, and we know what a strong organisation there is controlling the price of motor cars. Yet you can always buy a car and get accessories thrown in. Now the reverse state of affairs will exist when the Bill becomes law. We have to rely on the will of the people to enforce it and those people who are specialists in the trade.
§ Mr. A. Edwards
What does the hon. Member mean by the "reverse state of affairs?" He spoke of throwing in accessories.
§ Mr. Higgs
You can always buy a motor-car cheaper than trade price, not by a reduction in the price but by the addition of accessories. When the Bill becomes an Act, unless it is watched closely we shall always be able to get a commodity at a higher price than the price specified. That is what I meant by reversing the process. I consider that it would be cheaper to administer the Bill in the manner I have suggested than as set out in the Measure itself. The first Schedule sets out the matters to be regarded in fixing permitted increases. It includes expense of manufacturing and processing operations. To show the difficulty in checking over, as suggested by the Minister, take a little instrument containing six or eight component parts, each of which probably has six or eight operations. It is practically impossible to check over those prices as set out in the Schedule. The Bill must give general authority for investigation and not necessarily set out so much detail. Looking down these items, you are not permitted to include the extra cost of gas, fuel or electricity; neither are you permitted to include extra expenditure occasioned by A.R.P., and so forth. I appreciate that it is impossible to cover all these details, but I think that having covered some of them they should all be covered.
§ Mr. K. Griffith
The First Schedule does include "cost of premises and plant, expense of maintenance and im- 1150 provement thereof," and I should imagine that that would include a good deal of what the hon. Gentleman has mentioned.
§ Mr. Higgs
The general statement rather than the individual statements would probably be more acceptable, then. One hon. Member has already referred to quality, and I am surprised that the Minister did not refer to that in his opening remarks in view of their great importance. You can buy machine tools at the same price, and one may work five years and the other may work 15 years. It is practically impossible to define quality without having some great specialist on the committee who really knows what he is talking about, and even then it is an exceedingly difficult problem.
This anti-profiteering Bill is undoubtedly wanted and it will be very acceptable to the public in general, but it must have several modifications before it becomes an Act. In conclusion, I would remind the House that the price once fixed will not be permanent, because it may be necessary to revise prices annually, monthly, and in some cases every week. Therefore, I emphasise the magnitude of this Bill and the difficulty in administering it without co-operation of trading organisations to which I have already referred.
§ 8.13 p.m.
§ Mr. Leslie
The public in general will undoubtedly welcome any Measure to reduce profiteering, because the people are very concerned that there shall be no profit made out of war. I want to deal especially with Clause 7. I know perfectly well that stores like those represented by the Right Hon. Member for Hillsborough (Mr. A. V. Alexander) and the hon. Member for Walsall (Sir G. Schuster) will endeavour to carry out the Act in the spirit and intention of that Act, but there are other firms to be considered. Clause 7 states:If any person contravenes any of the provisions of Section one of this Act he shall be guilty of an offence.…I suppose "he" includes "she." Just imagine a girl shop assistant charged with an offence under this Act, as they often 1151 are under the Shops Act and the Weights and Measures Act. Sometimes under these two Acts the employer and the assistant are charged—frequently only the assistant. The assistant is convicted and that is usually followed by her dismissal, because, although it is true that the assistant was simply carrying out the wish of the firm, the firm wish to persuade the public that they do not condone the offence. Surely, in cases of this kind outlined in the Bill the obligation should be on the employer and not on the assistant. Therefore, why not hold the employer responsible and compel the employer to issue definite instructions to the staff working under him as to the proper prices to be charged and to exhibit a printed price list so that the public in general may know exactly what they should pay? Only by taking these precautions and giving salutary warnings to the staffs can this Act be carried out, and I hope the Minister will take that into consideration.
§ 8.15 p.m.
§ Mr. Barnes
I observed that when the Minister was introducing and explaining this Bill he admitted that the Bill was an effort to tackle a very difficult problem. He said previous efforts at legislation in this direction have not been too successful, and finally the Minister frankly admitted that the success of this Measure would largely depend upon its administration. We have had too little legislation in this direction, and I would emphasise that while the Government would obtain this Measure with general consent and good will, the real opinion of the House and of the country would not be obtained on the Second Reading of this Bill. The real judgment of the country and of the House will be given later when we observe how effectively or otherwise the Department administers this Bill.
I have seldom seen a Bill introduced into this House where the purpose is so clearly and explicitly stated as in the Explanatory Memorandum to this Bill, and I would like to draw the attention of the Parliamentary Secretary to the language, because I think it is important:The purpose of this Bill is to prevent the price of goods to which it is applied by order of the Board of Trade from being raised above the pre-war price by more than the increase in the costs of producing and selling them.1152 I wish to put a very direct question to the Parliamentary Secretary. Do the Government really mean that language, and are they prepared to give an assurance to the House that this Measure will, in fact, be administered to ensure that the cost of goods covered by this Act will not be permitted to be increased above the actual cost of producing and selling them? I would welcome that becoming the central feature of Government policy during this war. I believe it would represent a fundamental change in the policy that we have so far adopted, and if would be in complete contrast to Government policy during the last war. It would prevent the considerable and widespread disorganisation that arises in the community with rising prices during the war, and it would avoid the immense dislocation and suffering that we have experienced in this country because of the reactions that followed in the post-war period when we had to bring prices down. I regret that in the Debate there has not been a persistent emphasis on the need for the observance of that principle, not only in this Bill but more or less in the whole policy of the Government on these matters.
The second very direct point that I should like to put is this. The President of the Board of Trade gave the House no indication of the extent, or range, of goods that he contemplated the Bill would cover. It is indicated in the general provisions of the Bill that food supplies administered by the Food Defence Plans Department will be outside the scope of the Bill. Does it follow that every commodity that has already come under a measure of Government control, like petrol, paper and so on, is not to be included? A general indication on that point would enable traders to know the type of goods likely to be covered. I rather regret that goods coming within the scope of the Food Defence Plans Department are excluded, because it appears to me that the operations of that Department could very well be covered by the Bill. In the case of butter and one or two other commodities, Government Departments themselves have not set a good example to private traders in the matter of profiteering.
Here is another aspect of Government control on which I should like the Parliamentary Secretary to indicate what is intended. Industry generally has found during these recent weeks that 1153 where Government control is being introduced there is a tendency to produce a standard article, and, more often than not, an inferior article. This is leading to the destruction of the system of branding and proprietary goods, upon which many firms and industries have built up reputations for quality. This is another aspect of the "quality" argument all ready touched upon. These standard or pool commodities, like pool tea, pool petrol and things of that kind, are destroying the very valuable practice in industry of applying a name to an article, which is a guarantee of a certain measure if quality. Can the Parliamentary Secretary give an assurance that, in dealing with this problem, this process of uniformity, which can play havoc with the industrial life of this country, and take us very rapidly, in fact, to the corporate State, is not proposed? Can we take it that the provisions of the Bill relating to the consumer will also cover the user of articles and commodities? As far as I can see, it is only in Sub-section (2) of Clause 8 that any provision is made for the consumer—and I am including, in this case, the user of an article or commodity—to have an opportunity of instituting any form of complaint, process or action under the Bill—and in this case it is limited to a complaint lodged with the local prices committee.
Not all Members of the House will agree with the hon. Member for Walsall (Sir G. Schuster) in urging that these local committees should consist of accountants or professional people of that character. It appears to me that the expert and the accountant should very properly be called in is assessing the price or make up of the price structure of any commodities, but the local committees and the central committee should be composed not only of persons who have experience of industry, but also of a very wide range of consumers, including representatives of consumer organisations like the co-operative movement—not as traders, but as bodies representing consumers—and also of trade unions representing the workers in the industries concerned. If we are to have traders, employers, chartered accountants and persons of that kind represented, we should have an assurance that there will be not only one consumer's representative and one trade union representative, but a proper balance of interests.
1154 I observe that in the Schedule provision is made for the payment of referees and persons of that description. I should like to know whether it is contemplated that members of the central committee and the local committees are to receive any payment, or whether their work will be voluntary. With regard to the functions of the referees, I observe that they can direct the Board of Trade to alter or revoke orders. That appears to be a power not generally vested in people performing such functions. I do not know that, at this stage, I would disagree with that, but it would be useful to know what makes the referees' task in this case authoritative, or of an executive character. While we give general consent to this Bill, I sincerely trust that when we come to the Committee stage the Department will cooperate with the House in endeavouring to see that the rights of the public to institute complaints and to have their complaints properly investigated by machinery, which will carry out a rapid examination and come to a decision, are thoroughly safeguarded.
§ 8.31 p.m.
§ Mr. Pickthorn
It is a comparatively long time since I heard anybody in this House begin a speech by saying that all history teaches us something or other, and, not having yet used the phrase myself, I say now that all history teaches us that Government attempts to control prices are very seldom successful. I have, none the less, no doubt that the Government should now make another such attempt, and from the best advice that I have been able to get I do not doubt that this Bill is likely to be as good an attempt as can at this time be tried. I agree with the hon. Gentleman the Member for East Ham, South (Mr. Barnes) that this Bill, even more than almost any of the other Bills that we have passed in the last six weeks, will depend on the administration.
I wish, very shortly, to draw attention to two points of administration. The first is a negative point in connection with Clause 13, which is a purely negative Clause. It says that it is not to apply to auctions, with which I am not concerned at the moment, and also that it is not to apply to goods for export. It is right that export prices should not be controlled inside this Bill. I feel equally certain that something more ought to be done than 1155 has yet been done to endeavour to control export prices. In some sense export prices are more important even than prices inside the country. As long as prices inside the country do not reduce us to actual starvation or to riot and revolution, they do not very much matter, but if we do not export sufficiently, then the whole of the rest of our enterprises cannot be carried on. The argument that export prices can be left to themselves because there is no possible monopoly there, does not seem to me to be a sufficient argument. It was not, as the hon. Member who spoke for the Opposition Liberals said, only at the end of the last war that export prices were sometimes put up with disastrous effect. They have already been put up with disastrous effect at the beginning of this war in more than one case. That is the negative point to which I wish to draw the attention of the House, that export prices are not here dealt with, and one ought to be sure that they will somewhere be dealt with, although, I agree, not in this Bill.
The other point to which I invite attention, I am afraid, is even more obvious than the first, but the obviousness of these points is perhaps a tribute, such as has already been paid by earlier speakers, to the clarity with which this Bill has been drawn. The obvious point is that the usefulness of the Bill must depend upon the success with which the administration makes two distinctions; in the first place, the distinction between trades where the public interest requires extension, and trades where that is not a considerable public motive. Different trades must be dealt with differently. The other distinction which the administration of this Bill must turn upon, is the distinction between industries, which, in the recent past, have certainly had a high rate of profit, and industries which, in the recent past, have only just perhaps been hanging on. It is certain that in a good many cases it is important that the industries which have just been hanging on in the recent past should not now be allowed to die. It is clear that these industries have to be distinguished from industries in which reasonable profits have in the last ten years been habitual. I wish to be as short as I can, and merely to put upon record, in case in the future any of us have cause to criticise the administration of this Bill, what seems to me to be the main point 1156 upon which the administration of it must be judged in the future.
§ 8.35 p.m.
§ Mr. Tomlinson
There are one or two questions I would like to ask. I have been interested in the Debate. The value of the Bill will rather be the speed with which we can get it to work than its effectiveness in actually determining prices from a legislative point of view. The benefit of this scheme will lie rather in keeping prices down now than in seeking to bring them down after the machinery has been put into operation and it has been proved that too much has been put upon the price. The difficulty at the present time is that when people are called upon to pay a price for an article in excess of what they paid three months ago they immediately jump to the conclusion that somebody is profiteering because of the fact that the article they bought three months ago has gone up in price out of all proportion, as they think, considering the time that the war has been going on.
While I agree with most of the speech that was made by the hon. Member for Walsall (Sir G. Schuster) I thought that in two or three of his observations he came dangerously near to making suggestions which would have deprived this Bill of the very value we are seeking to obtain from it. I am not criticising the illustration he gave us, in which the companies with which he is directly associated as chairman made overtures and representations to the Government in different ways, or suggesting that they were not made with the best of intentions in the world. I believe they were, but the very fact of vested interests seeking representation might have created the very state of mind against which this Bill is seeking to direct the attention of the people. If it had been felt that the Government had been in collusion with large multiple stores it would be assumed by a lot of people, and it would be very difficult to get it out of their minds, that there had actually been collusion with regard to price fixing.
Another suggestion that was made was that the committee to be set up should be constituted of impartial people like chartered accountants. I have no doubt that in the main chartered accountants are pretty impartial, but while there are duties which chartered accountants are 1157 called upon to fulfil, this committee will have to be conceived in a much wider spirit than that of the mind of the chartered accountant if it is going to function. The hon. Member who spoke for the Opposition Liberal party, and spoke very well, suggested that the Schedule was pretty large, but wondered whether it was large enough. I wonder whether it is possible to justify any expenditure under the heads in the Schedule. He wanted to include bad debts. I have in mind the manufacture of articles out of cotton goods, and if all debts were to be included in the manufacturing price of cotton goods, I do not think it would be much use fixing either a basic price or a maximum price, as you could not reach it any way.
The point I have in mind was partly made by the hon. Gentleman the Member for Cambridge University (Mr. Pickthorn). What is to be the position in regard to the determining factor in fixing prices of these partly manufactured articles, which, during the last 10 years, have been dealt in by manufacturers, and by part manufacturers, at a loss? Is it to be assumed that the price relating to August this year, including the 10 years when they had been making losses, is to be the basis by which any fixation of prices is to be governed?
That brings me to the constitution of the committees. It will be absolutely essential, for instance, in regard to manufactured articles that someone on the committee should be in a position to speak with authority on what is taking place in the various processes of manufacture. That will determine under these schedules whether the expenses are reasonable or not. You may get varying standards of, if I may so put it, trade union employment. In the manufacture of the same article you may get a firm prepared to pay double time, where overtime is worked, and there is another firm where overtime is worked on the basis of time and a quarter. Are the labour charges of that particular firm to be taken as reasonable? That is one of the conditions which will fix the basic price. Take another case where you are dealing with cotton goods of some particular kind in which a firm specialises, and its machinery is right up to date. Is it the price at which the up-to-date firm can manufacture the material out of which the article is produced that is to form the basis, 1158 or is it the most antiquated cotton firm in Lancashire whose labour costs are to be regarded as the basis? These are difficult problems.
The value of the Act of Parliament more than anything else will be in its restraining influence rather than its actual administration. I do not want to compete in getting places for, say, trade union secretaries or anybody else, and I have no wish to deprecate the plea made on behalf of chartered accountants, but in the administration, in addition to chartered accountants all sides of industry, the consumer as well as the employer, will have an interest in seeing that these matters are wisely dealt with.
§ 8.43 p.m.
§ Mr. Rhys Davies
The right hon. Gentleman must feel pleased that the Bill as not met with any hostile criticism. As far as I can see there is no need for any such hostility, at any rate to the main provisions of the Bill. I was intrigued by the statement of the hon. Member opposite when he spoke of imports and exports, because I find that when the Profiteering Bill of 1919 was introduced, underlying the Debate on the main purposes of that Bill was the attempt to narrow the gulf between imports and exports. Traders in this country were then introducing a great deal of imports because they made much more profit on those than on similar goods manufactured in our own country. The right hon. Gentleman did not however say anything on that score to-day.
As far as I understand it, this Measure is by its Title not an anti-profiteering Bill but a Measure to control the prices of goods. Let it be understood that the consumers are not to have a say in the determination of the prices of any commodities. It is the traders, manufacturers, merchants, wholesalers and the retailers who will determine prices. The right hon. Gentleman will therefore have to depend very largely upon the standard of honour among those people who are assisting him in fixing prices. That is the foundation of the Bill. Frankly, knowing the multiplicity of items and transactions in the wholesale and retail trades it must be difficult for any Government Department to handle this complex business. Let any hon. Member think how many articles he himself has in his own household. I should like to see a householder taking 1159 an inventory of the number of articles in his own household however small it may be. He would find several hundreds of little things of all sorts and he would then have a fair idea of what it means to control prices under this or any other Measure.
The Government are to be commended on bringing in the Bill at the outset of the war. We all remember at the end of the last war that what we called the new section of society came into existence, the new rich. People have somehow a very nasty habit of being able to make huge profits during a war. The intention of this Measure, I presume, is to prevent that happening on this occasion.
§ Mr. Davies
At any rate, that is what the Government say, and what they say is sometimes taken for gospel in this House. Frankly, I have never adopted that attitude towards this Government. Perhaps they will forgive me for saying that. However, since a fellow countryman of mine will be replying for the Government this evening, my attitude towards them may be modified a little.
It is astonishing what tricks can be played in connection with commodities for sale. If a merchant adds 10 per cent. to the price of a given commodity when he sells it to the wholesaler, the wholesaler adds another 10 per cent., and then the retailer adds still another 10 per cent. When the retail shopkeeper sells that very same article he must also do a little to enhance the price, and so it goes on. I notice that the President of the Board of Trade is pointing to my right hon. Friend the Member for Hillsborough (Mr. Alexander). My right hon. Friend represents a co-operative community of traders who never make any profit at all. Their conditions of employment too are, so we are told, Utopian in every respect.
With regard to the effect of the Bill on percentages, I would point out that on 16th September this year a very reputable journal gave a list of the following articles which have increased in wholesale price since the war—hosiery, 24 per cent.; furniture, 20 to 25 per cent.; furnishing fabrics, 20 per cent., cane chairs and baskets, 15 per cent.; cheap electric fires, 35 per cent.; and handkerchiefs, 18 1160 per cent.[An HON. MEMBER: "Cotton?"] I cannot say, but most handkerchiefs are cotton. My hon. Friend the Member for Farnworth (Mr. Tomlinson) knows more than I do about that, although I represent a Lancashire seat, and ought to know. One thing that I fear about this Bill and its administration is that unless the right hon. Gentleman is careful when he fixes prices, from the basis upwards, he may, in spite of that control still find as much profiteering as if the Bill had never been in operation. It is the starting point in fixing prices that will determine whether profiteering will prevail in the ultimate sale of commodities. I want it to be quite clear that I have never believed that high prices automatically mean profiteering. We have to get out of our minds and make the public understand that. Prices have gone up recently because of war risks insurance, A.R.P. costs, reductions in sales and sometimes owing to scarcity. A reputable shopkeeper told me the other day that he could not without loss to himself sell butter at the controlled price of 1s. 7d. per lb.; he had to throw the loss on something else.
It seems to me that the main benefit of the Bill will be that several capitalists themselves will be able to check one another much more effectively than hitherto. The manufacturer, the merchant, the wholesaler and the retailer, will be able to check as to the correct price they should charge for a commodity. That is all to the good, unless, of course, they join together behind the scenes in a trust and destroy all that the right hon. Gentleman is trying to do. I imagine that if the Bill is effective at all it will benefit especially local authorities who purchase commodities on a large scale for hospitals and other institutions, and I should not be surprised if it did not benefit Government Departments also, who are heavy buyers of commodities. When I was a member of a local authority it was quite a common thing in estimates for pipes and such things for the price to be the same in every case, because there was a ring. If the Bill has any result at all I imagine that it will assist in breaking rings, and I trust that the right hon. Gentleman has that in mind already.
I want to emphasise one point made by the hon. Member for Sedgefield (Mr. 1161 Leslie). The Parliamentary Secretary has been good enough to say that he will look into it. The Bill fastens the offence upon the person who sells the article. I am thinking of the shop assistant. To fasten upon him every violation of this Measure is to destroy what we call the power of agency. If an employé violates this Measure by selling an article for a higher price than he should, the motive behind his act is simply to benefit his employer. I should not therefore like the Bill to swoop down upon an employé who has had probably a nod without specific instruction to make a profit for his employer by breaking the law. The employé under this Bill is not only penalised by being brought before the court but will be dismissed his job into the bargain. I trust the right hon. Gentleman will look into that point, because to some of us it is rather an important one. The right hon. Gentleman touched upon luxuries and I was rather intrigued by what he said. In my constituency, as in a good many others, butter has become a luxury to those on the means test. What is a luxury to one family is common to another. In the main I agree that it is no use, for instance, regulating the price of gold watches and bracelets.
The Bill, in my view, will benefit the community more by its salutary effect than by administration. It is the fear of the seller being prosecuted that will assist the public. I have had a little experience of this recently. I bought 40 bags of sand and opened two of them to see what was inside. One half was stones and clay, exactly the things of which I want to rid my own garden. I could have supplied most of the stuff myself. The point there is, that the production and manufacture of new commodities are so rapid that before the right hon. Gentleman can issue an order, he will have a set of new articles on the market that have never been seen before; and I am wondering how he will deal with the speed at which these things are being turned out. I think that the right hon. Gentleman will find that a rather serious difficulty.
There is in the Bill a provision to prevent that very doubtful practice which consists in the shopkeeper telling a woman customer that she can get 2 lbs. of sugar provided she buys 10 lbs. of flour, a bar of soap, and so on. But I thought that a provision dealing with that existed already, because last week, in the town 1162 of Hyde, a person was fined £5, and ordered to pay costs, for doing that very thing. [Interruption.]That was a matter which presumably came under the Minister of Food. We have to understand, therefore, that this Bill is not mainly concerned with food as such. With regard to articles of clothing, boots, and so on, I want to say something to the President of the Board of Trade which may perhaps not be new to him. You can have exactly the same article, of the same quality, produced by the same firm under the same conditions, merchanted in the same way, and yet sold at different prices in different towns in retail shops.
It seems to me that the right hon. Gentleman will find a difficulty on that score in issuing orders. I will tell him why. The prices of commodities must of necessity tend to meet the purchasing power of the people in a given locality. In London, if the average income is, say, £3 per head per week, people can purchase the same articles at a higher price than people can in Lancashire, where the average income is, let us say for the purpose of illustration, only £2 10s. per head per week. I have seen that sort of thing happening. I was bred and born in South Wales, and I now live in Manchester. I have seen exactly the same kind of article, quality for quality, sold in the Rhondda Valley at about 10 or 15 per cent. lower than the price in Manchester, where the article was manufactured and merchanted. That is simply because prices have a tendency to come down to the level of the consumer's purchasing power; and in issuing his orders the right hon. Gentleman will have to bear all that in mind too.
We are at war and we have to face all these things. I will give the right hon. Gentleman and the House a little illustration of how the average housewife looks at this problem. Here is something that was brought to my attention the other day as a consequence of the announcement that this Bill was to be introduced. The right hon. Gentleman has indicated that the Bill will probably not deal with this sort of problem, but here is one that was put to me. In Manchester, codfish was 7d. a lb. before the war, and last week it was 1s. 6d. a lb. Strangely enough, halibut was 1s. 2d. a lb. before the war, and 2s. a lb. last week. Thus, one comes to the simple fact that the poorer a person is, for some unknown 1163 reason, the more he has to spend to buy commodities.
§ Mr. Davies
The hon. Member misunderstands me. The poor people have to buy in smaller quantities than the rich, and the smaller quantity one buys, the more we have to pay for it. The poorer people are, the more often they go to the shop too; they almost make the shop their pantry. They buy in quarter-pounds, whereas people who can afford to do so buy a pound, two or even five pounds at a time.
I conclude by saying that we support the main provisions of the Bill, though we shall have some observations to make upon it later when we come to consider amendments. I trust the House will forgive me for repeating here what I have often said before. During the 18 years I have been here I have seen no benefit whatever to the people from any Act of Parliament unless it was put into operation and administered effectively; and I know of more than one Act of Parliament which was hailed with great glee, but was never put into effective operation. I think that is the sum and substance of the observations which have been made from all parts of the House to-day. With others who have spoken, I trust that when this Bill becomes law we shall all do our best to see that it is administered in such a way that we shall never have the spectacle in this country during this war, of what my right hon. Friend described as wages chasing prices and prices chasing wages in turn, and wages never, at any point, catching up with prices.
§ 9.2 p.m.
The Parliamentary Secretary to the Board of Trade (Major Lloyd George)
A good many of those who have spoken in this Debate have pointed out what is, indeed, an obvious truth, namely, that this is a question which affects every house in the country. The hon. Member for Westhoughton (Mr. Rhys Davies) said that the fact that a rise in prices took place did not, of necessity, mean that there was profiteering, and that is perfectly true. We have had cases in which one could not possibly say that there was profiteering because prices had risen. At the same time, cases have been 1164 brought to our notice, and no doubt also to the notice of hon. Gentlemen opposite, in which prices have risen without any reason at all. Up to date we have only been able to get in touch with people responsible for raising prices unduly, calling their attention to the fact and asking for an explanation. In many cases it has been possible to reduce the amount of the increase, and in other cases I am glad to say it has been possible to have the increase taken off altogether. The fact remains that, despite all efforts, there are still people who charge unduly high prices, and the object of the Bill is to give us power to deal with those cases.
I entirely agree with the last speaker —and I have been very glad to notice it in practically all the speeches to-day— that there is general agreement on the principle of the Bill. There will, obviously, be points of difference about details which can be dealt with at the proper time, but I think it is generally accepted that the Bill is designed to help the consumer and to prevent his exploitation. The right hon. Gentleman the Member for Hillsborough (Mr. Alexander), the hon. Member for West Middlesbrough (Mr. K. Griffith), the hon. Member for East Ham, South (Mr. Barnes) and others stated what is too only obviously true, that a great deal depends on how the machinery of the Bill works and on how the committees function. This is not a very easy question. An attempt was made once before, as my right hon. Friend pointed out, to deal with this question. We feel that the machinery that has been outlined will prove effective, provided we take good care to see that it is properly managed. I can assure the House that we are determined that we shall not have, as the right hon. Member for Hillsborough pointed out just now, the sort of committees which we had in the war, when the central committee had about 150 members and I believe there were 1,800 committees all over the country. I can assure the House that that is not the intention on this occasion, but that it is rather to get a committee consisting of people at the head, people who really do understand business affairs and who are able, when propositions are put up to them, really to analyse them and find out whether they are straightforward or not. That is our intention.
It has been asked also what articles are to be specified. The hon. Member 1165 for Peckham (Mr. Silkin) wanted every article specified. We really want this Bill to work. It would be easy, if we wanted to give an appearance of having done something, to have produced a Bill covering every article in the country, but I do not think it would work, and it is the intention of the Government that this Bill should work. Therefore, we propose, first of all, to take those articles which enter into what I may call the standard of living of the mass of the people of this country, and by that means we shall avoid the disaster of having our machinery completely overwhelmed. I believe it will be possible, and very shortly, presuming this Bill is passed into law, to choose those articles which really do affect the vast mass of the people of this country.
§ Mr. Silkin
The hon. and gallant Member used the expression "first of all" in regard to the articles which are to be chosen. Is it the Government's intention gradually to extend the number of articles?
Major Lloyd George
Certainly, and we have complete power to extend, as the necessity arises, to other articles. [An HON. MEMBER: "To luxuries?"] It may well be that if you have a luxury, it may be to the advantage of the nation to sell it at as high a price as possible. It is a question of what is and what is not a luxury, and that is very difficult to decide, but if you have a real luxury trade the Exchequer benefits from it. I see the difficulty in actually differentiating between what is and what is not a luxury. There can be no difficulty at all, however, in deciding on the things which really matter to the vast majority of the people, and that is what we mean to do to start with.
With regard to another point to which the hon. Member referred, and that was to the fact that the consumer was not consulted in Clause 5 about the fixing of prices, he will observe, if he looks at Subsection (3), that an appeal shall lie against such an order to a referee at the instance of any body of persons appearing to him to be representative of traders in, or buyers of, goods. I think the term "buyers of" would cover a body of consumers.
I do not think we need worry much about the observation of the hon. Mem- 1166 ber about the multiplicity of committees and processes.
§ Mr. Rhys Davies
Will the hon. and gallant Member remember that the word "buyers" has a meaning of its own, and that in all our wholesale houses in the great cities of this country buyers are persons who occupy very important posts?
Major Lloyd George
I know what the hon. Gentleman means, but this is the ordinary sense of the word—the man who goes to the shop to buy.
§ Mr. Silkin
I would draw the hon. and gallant Gentleman's attention to the words "a body of persons claiming to be representative of buyers." Surely that goes beyond the ordinary consumer.
Major Lloyd George
This provision is for the protection of traders. It would be impossible to deal with individual traders, but practically everybody in trade is now represented by some organisation. The consumer will be represented on the local committee and he will be able to make complaints to the committee. I hope the hon. Member will get out of his mind that we are going to have a maze of local and central committees making representations to the Board of Trade, and so on. The whole point is that the central committee is there to guide the local committees. That applies to the point of the hon. Member for Westhoughton with regard to different prices in different places. It will be impossible to have a basic price for every article in the country, but if there are percentage increases it will cover the point the hon. Member made.
Major Lloyd George
I am not suggesting that there should be associations of consumers. The consumer will be able to make his complaint to the local committee.
§ Mr. Edwards
I thought the Parliamentary Secretary was suggesting that there were organisations, but I do not know of any.
Major Lloyd George
The point of this provision is the protection of traders. The individual consumer can make complaints to the committee.
1167 The hon. Member for East Middlesbrough (Mr. A. Edwards) referred to the possible extension of the schedule. I will have that looked into. He also raised a question on Clause 10 with regard to insurance and I will have this point examined also. With regard to foods, so far as they are controlled to-day they will not enter into this Bill.
Major Lloyd George
If the hon. Member likes to make a complaint to the local committee I daresay it will be looked into.
When the Parliamentary Secretary says that controlled foods will not be included in the Bill, does he mean those for which food price Orders have been issued or all the commodities which have been controlled, whether by price or by regulation?
Major Lloyd George
I mean where the price has been fixed. The point was raised about poor quality. It is not the intention of the Government that the result of anything they do shall be that material is of poor quality. It may be necessary in certain cases, for the sake of the consumer, to fix a standard of quality.
§ Sir P. Harris
This is very important. One of the most danegorous forms of profiteering in the last war was done by taking the quality out of the goods, and on the Committee stage the Bill might be strengthened in that respect. It does not matter how a man is swindled —if he is given an inferior article he is being exploited just as much as if the price had been increased.
Major Lloyd George
I do not think that was the particular point which the hon. Member had raised, but I agree that one of the worst forms of profiteering is the selling of a poorer article for the same price as the better article. There are people who say that consumers do not mind that so much, and it is not so easy in some cases to deal with it, but it may be necessary to have penalties where we can trace that goods of an inferior quality have been supplied. In regard to the 1168 payment of the committees, it may well be that the chairmanship of the committees will be almost a full-time occupation and chairmen may therefore be paid. As to the other members, it is certainly not the wish of the Government that persons who would be of great service on those committees should be precluded from serving because they were not able from the financial standpoint to give their time. In any case we are anxious to get the best type of committee, both centrally and locally. Reference has been made by two hon. Members to the export trade. While it is fully agreed that in the last war things were done which were very detrimental to our export trade, I think they will recognise that this is not a Bill in which it would be easy to deal with the problems of the export trade and there would be great difficulties in making it work. As to the point about shop assistants, I will have that looked into, but our intention is to proceed not against the assistant but against the employer, who is primarily responsible.
I have tried to deal as quickly as I can with most of the points which have been raised, and now I should like to stress once again that the main purpose of this Bill is to check the increase of the price of the commodities needed by our people. There is abundant evidence since the war began that the vast majority of our tradesmen have "played the game." Indeed, cases have come to my notice where rises which could have been legitimately passed on have not been passed on. At the same time there have been other cases in which one has seen that people were apparently determined to take advantage of the difficulties of this country for their own ends. If that example were followed by the whole community it could lead only to absolute disaster. When our fellow-countrymen and fellow-countrywomen have been called upon to make very heavy sacrifices for the nation and, as my right hon. Friend has said, are doing it willingly for the sake of the cause, they deserve to be protected against people who do the kind of thing which I have mentioned. I believe that this Bill will give that protection, and I accordingly commend it to the House.
§ Question, "That the Bill be now read a Second time," put, and agreed to.
§ Bill accordingly read a Second time.1169
§ Bill committed to a Committee of the whole House for Tuesday next.-—[Mr. Grimston.]