HC Deb 25 October 1939 vol 352 cc1471-84

5.31 p.m.

The Solicitor-General

I beg to move, in page 5, line 22, at the beginning, to insert "Subject to the provisions of Sub-section (3) of this Section."

With the permission of the Committee perhaps I might deal with this Amendment and with another which is on the same page of the Order Paper and which is consequential. It was represented to us from several quarters that great unfairness might be caused unless some protection were afforded against prosecution to servants who had acted in good faith on behalf of their employers, and, without any knowledge, had passed on goods with more than the permitted increase. The Amendment which I now move, and the other Amendment to which I have referred, are designed to achieve that result. Briefly, the effect is that a person makes a defence to a charge under the Bill if he proves that he acted under the orders of his employer in the ordinary course of his business, or of some other person, whom he designates. It is of the essence of the matter that he must specify, and by that method you can go up the chain of responsibility until you arrive at the real culprit, the person upon whom you wish to impose the penalty. I move these Amendments in the interests of the servants of employers.

5.33 p.m.

Mr. Rhys Davies

I have to thank the Solicitor-General for bringing forward this Amendment. The Committee will remember that at the commencement of our proceedings to-day I called attention to the matter by my Amendment which I withdrew to insert the word "vendor" instead of "person." These Amendments, however, meet our case in part, although we should like to take the matter a little further by fixing responsibility on the employer for the acts of his servants. I believe this is done in some other Acts of Parliament. An employé might break this law without any motive, except to make profit for his employer and to enhance his position in the firm by so doing. It is possible for him to do so, not because he has received definite instructions that he shall break the law, but because he may have received a nod or a wink to that effect. At any rate, we ought to safeguard the position of the employé and I think it is safeguarded in some degree by what the Government have now done. If the Board of Trade initiate prosecutions at any time in this connection, I trust they will bear in mind that, if an offence is committed by a shop assistant, he may not only be fined and sent to prison but may suffer the additional penalty of being dismissed his job, despite the fact that what he did may have been for the benefit of his employer and not of himself. I thought that the Solicitor-General, who is connected with the law, would be willing that I should put that point to him at this stage.

Mr. Mander

I would like to make sure whether a particular kind of case is covered, as I imagine it is. Suppose a servant in a shop, knowing the proper price is instructed by his employer to charge something higher. He may not wish to do so, but as a loyal servant he has carried out the orders and charged the higher price; would he be relieved in those circumstances from responsibility?

The Solicitor-General

I think that is the effect of the Amendments that we have on the Paper. Of course, technically, in the ordinary view of the law, he commits a criminal offence, because he has no business to commit a crime even upon the orders of his employer. We have drafted the Amendments in a form to cover the case of a person who, in doing what he has done, has merely carried out instructions.

Amendment agreed to.

5.35 p.m.

Mr. Shinwell

I beg to move, in page 5, line 32, at the end, to insert: and (c) where the contravention occurs in connection with a wholesale transaction, be ordered by the court to refund to any purchaser the difference between the price paid and the permitted price. I hope that the President of the Board of Trade or the Solicitor-General will accept this Amendment, the purpose of which is to provide a deterrent, and I believe an effective deterrent, against the charging of excessive prices. It provides that where contravention occurs in connection with a wholesale transaction—it should be noted that the Amendment refers only to wholesale transactions—the offender may be ordered by the court to refund the difference between the price paid and the permitted price. We have excluded the retailer because there appears to be a practical difficulty in making any necessary refund. That difficulty does not arise in the case of the wholesaler, who has to deal with a smaller number of persons in the transactions that come under review. There are penalising provisions embodied in the Measure, and they seem to be quite satisfactory. An offender may, I think, be brought before a court of summary jurisdiction and be fined a sum not exceeding £100 for the first offence. It is clear that the court may decide, within its discretion, to impose a lighter penalty, for example, £2. In that event, it would seem that the profiteer would be able to meet the imposition with ease and complacency, because he would have gained more by the transaction than he was likely to lose by the fine.

It, therefore, seems necessary to provide a more wholesome deterrent, and I suggest that if a wholesaler is convicted of an offence he should be compelled, in addition to any fine which may be imposed upon him, to refund to the trader with whom he has dealt and whom he has charged the excessive price, the difference between the price that was charged and the price which should have been charged. If a refund of that kind is provided for, it will deter wholesale traders from engaging in what, I think, I am entitled by virtue of this Measure to describe as nefarious activities. If some such deterrent is not provided, I imagine it to be a safe assumption that, in spite of the penalties embodied in the Measure, it will be impossible to exercise an effective restraint upon the operations of profiteers. I had an opportunity of discussing the matter with the President of the Board of Trade before the Bill was drafted. I am bound to say that I was under the impression that he conceived this to be an excellent proposal. I was, therefore, all the more surprised not to find it in the Bill itself, and I hope that, now that I have stated the argument afresh, the Solicitor-General will find it possible to accept the Amendment.

5.41 p.m.

Mr. Watkins

I desire to support the Amendment which has been proposed by my hon. Friend, for the reasons that he has given and also for this reason. An Amendment of this nature, in my judgment, seems to be essential in order fully to carry out the main purpose of the Bill. The Bill is really intended to prevent overcharging. Whatever penalty there may be imposed upon someone who has been guilty of an offence under this Bill, unless the purchaser who has been overcharged can recover the amount which he has been overcharged, he will still remain in the position of being overcharged. Whatever penalties may be imposed on a trader who is guilty of contravening Section 1 of the Act, unless the man who has paid too much can get the difference back, the overcharge will actually have taken place and there will be no restitution whatever. For that reason I hope that the Government are prepared to accept this Amendment and to see that the man who is overcharged has a reasonable chance of recoving the amount which he has been charged in excess of the right and proper price.

5.43 p.m.

The Solicitor-General

This Amendment is a most admirable one, and I will let the hon. Gentleman the Member for Seaham (Mr. Shinwell) into a secret, when I say that in the first draft of this Bill we tried to get some machinery of this kind. However, it is not as simple as it might appear, and it would involve a good many consequential Clauses. I will point out one or two reasons why, at any rate, in the form in which it appears at present it is not a practicable proposition. This Clause is dealing with proceedings before a court of summary jurisdiction, and the proposal is that that court should be entitled to award to a person who, in the words of the hon. Member for Central Hackney (Mr. Watkins), had been overcharged, the amount that he is overcharged. The first thing to note is that that court will not necessarily know what the overcharge is. If you were to make it necessary for a court of summary jurisdiction to go into the whole element of basic cost and permitted increase, and to take into consideration all the accountancy questions in the First Schedule, it would be a formidable task to impose upon that court. By a later Clause the burden is thrown upon the accused person of showing that he, in fact, did not sell at more than the permitted amount. All the prosecution has to establish is that an excess has been charged over the basic price. It will not at all follow that the court of summary jurisdiction will necessarily have the material upon which to assess the amount which is the true overcharge. That is the first difficulty. So some machinery other than the court of summary jurisdiction would be required to arrive at the figure which ought to be refunded.

Then I come to the second difficulty, and the hon. Gentleman's Amendment recognises this difficulty by implication, because it excludes the vast majority of transactions which will be retail transactions. His Amendment recognises that it is quite impracticable to do it in the case of retail sales for a variety of reasons. It is the retail sale upon which the evil bites, because the retail sale is usually to a consumer who goes away carrying on his back the whole of the overcharge.? When, for practical reasons, you eliminate the possibility of assisting the retail trader and go back to the wholesaler you may very easily arrive at the position in which the person who is entitled to make a claim is the person who has already reimbursed himself from the person next lower down on the scale of supply. The middleman buys from the wholesaler at an overcharge as it has been called. He passes the whole of the overcharge on to the next on the scale. If the hon. Member's Amendment stands he can then in the court of summary jurisdiction in the proceedings against the wholesaler recover the price against the wholesaler. At the moment we have not found any means of resolving difficulties of that kind. For these reasons, I am afraid, this Amendment is not acceptable to the Government. What I will promise the hon. Gentleman is that in the light of his representations and those of his hon. Friends, we will look at it again from another angle, namely, to see whether we cannot somewhere in the Bill give to a person who has bought from a wholesaler at an overcharge a right of action against him in respect of any damage that he has suffered on account of paying the overcharge. That would eliminate the difficulty of paying twice over and it would give him a right which he could enforce—

Mr. Shinwell

That is a very interesting point, but I was under the impression that a trader had that right within the law.

The Solicitor-General

I would very much doubt, as a matter of general application, if he has not suffered any damage at all, so that in fact he has not been damnified by the charge which has been passed on to him, whether he could claim in an action between subjects because the other subject has committed the offence. I very much doubt that as a general proposition.

Mr. Shinwell

Surely, if a trader who is purchasing from a wholesaler finds as a result of himself charging what may be regarded as excessive prices that his trade is injured, he would have a right within the law of taking action against the wholesaler on that ground.

The Solicitor-General

I have not made my point clear. What I meant was this. Suppose you have the case of a person buying from a wholesaler who, because of paying a non-permitted increase, has himself suffered an injury and has himself borne the burden, he would have the right of redress against injury. What I want to guard against is the case where he has suffered no injury at all because he has simply taken the goods and passed the charge on. The tribunal to which the hon. Gentleman proposed to go would not have the material to ascertain the price; proceedings would have to be much more protracted. However, between now and the Report stage I will look into the matter from the angle of giving a title to some action for damage on the part of the person who has suffered.

5.49 p.m.

Sir S. Cripps

I would like to make a suggestion to the right hon. Gentleman, who, I believe, is familiar with the procedure under the Truck Acts, by which a contract is made null and void and, as a result, there is a legal right to recover moneys which ought to have been paid. Would it not be possible here to make a contract null and void in so far as the price which is permitted and thereby give a right to anybody to proceed to recover that portion of the price? That seems to me to be the simplest way; and I do not see that there would be any difficulty in doing that.

5.50 p.m.

Mr. Bevan

If the Solicitor-General's argument is sound, it seems to me that my hon. and learned Friend's suggestion cannot conceivably meet the case. One of the arguments of the Solicitor-General was the impossibility of arriving at the amount of the overcharge.

The Solicitor-General

Of the court of summary jurisdiction arriving at the amount. [Interruption.] It is not impossible for that tribunal, but it would protract the procedure quite unnecessarily. All that that tribunal has to do is to find out that there has been a breach of the law. It does not have to go into the further question of what the amount of the overcharge is.

Mr. Bevan

We are now in a difficulty —it might be my own individual difficulty, but I suggest that it might be shared by some of my hon. Friends. The prosecution is instituted because a price has been charged over and above the basic price. The trader is prosecuted because that leads to the assumption, by somebody who institutes the prosecution, that the amount of the increase is excessive. The question that the court has to decide is whether such an increase is, in fact, excessive. If the court is to decide that, it must take into account the evidence given by the trader, who says, "I have increased the price over and above the basic price, because of A, B, C, D and E." A, B, C, D and E have to be proved to the satisfaction of the court before a conviction can lie against the trader. [HON. MEMBERS: "No."] I beg your pardon, but the onus of proof is on the trader. He has to show that, over and above the basic price, he had added certain increases in respect of increased costs to him. Those increases plus the basic price constitute the permitted price. The question is whether that permitted price includes an item of profiteering. How is the sum to be arrived at?

5.53 p.m.

The Solicitor-General

May I try to illustrate the situation by giving an instance which occurred to me while I was listening to the hon. Gentleman? Take the case of goods which are sold, let us say an overcoat, for which no permitted increase has been fixed, so that nobody knows the exact price at which you can sell an overcoat. The price on 1st August was £5, and the price at which the retailer sells is £6. There is a charge of profiteering. Under Clause 9 all that the prosecution has to do is to establish that there has been a sale at a price greater than that of 1st August. The moment that that is done the case is established, and the trader pleads guilty. What amount is the court to award the purchaser? Nobody is going to suggest that the trader would not be entitled to put up the price by something over the price for 1st August, but to what extent he may increase the price nobody knows. All that is known is that he is a self-confessed offender against the Act.

For that reason, I say that the machinery of the court of summary jurisdiction would not be appropriate for what the hon. Member for Seaham (Mr. Shin well) wants. What he wants is to repay to the consumer the amount paid in excess of what would be a proper sale price within the law. That cannot be ascertained by this method. It could be, perhaps, by some method, and I am much obliged to the hon. and learned Member for East Bristol (Sir S. Cripps) for his suggestion, which will be looked into between now and the Report stage. If we can do anything to meet this point we are most anxious to do it. We are at one with the hon. Member for Seaham in thinking that one of the best ways of dealing with profiteering would be to take back some of the ill-gotten gains, as well as inflicting the penalty laid down by the Act.

5.57 p.m.

Mr. Shinwell

I am under the impression that before proceedings can be instituted, first, the local price-regulation committee will have the matter before them, and will presumably devote themselves to a consideration of all the factors in the transaction, and that, secondly, when that committee have reported to the Central Price-Regulation Committee, the latter body will have applied their minds to the same factors. Before proceedings are taken, the two bodies will have had all the relevant factors under review. When the matter finally comes before the court, all the evidence will be submitted. There is another point which I am afraid the Solicitor-General has overlooked—he will correct me if I am wrong. It is the Director of Public Prosecutions who takes proceedings—

The Solicitor-General

The Board of Trade.

Mr. Shinwell

Very well, I am corrected. The Board of Trade institute proceedings. They have all the facts in their possession upon which the case is founded against the alleged offender. Surely, all these matters come before the court, and it is upon the evidence submitted that the court decides whether to impose a penalty or not. It seems to me that there is no need for any other tribunal to interfere, and that the court itself, being in possession of all the facts, can say that, in addition to the ordinary penalty, the trader should make repayment. However, I do not want to be unreasonable, and if the Solicitor-General and his right hon. Friend are prepared to reconsider the matter, so that on the Report stage we can get something which will act as a deterrent against profiteering, I think my hon. Friends will be satisfied.

Amendment, by leave, withdrawn.

6.0 p.m.

Mr. Rhys Davies

I beg to move, in page 5, line 39, to leave out "third," and to insert "second."

I move this Amendment in the absence of my two hon. Friends whose names appear on the Paper. I hope the right hon. Gentleman and the other legal luminaries across the way will not think me a very vicious person, but I was wondering why a trader should commit three offences before any effective measure is taken against him to clear him out of the business altogether. May I tell the Committee what has been happening in some sections of the retail distributive trades. I do not know whether it is happening now, but for years it has paid people in some retail establishments to break the law and to be brought before a court week by week and to be fined 5s. or 10s. a time and commit the same offence over and over again. Traders in the mass are honourable people, but there are a few who, if I may use the term used by my hon. Friend the Member for Seaham (Mr. Shinwell), are guilty of nefarious practices. The words are a little beyond my comprehension on occasions but I will use them for this purpose. This proposal is the most effective means of dealing with such people.

Hon. Members will say, "Look at the fines and imprisonment which may be inflicted on them." I reply look at the fines and imprisonment which can be imposed under other laws and are never inflicted at all. I have some little experience of factory laws. You may fine an employer up to any sum but, when he is brought before his friends on the bench, he is fined half a crown. You may put £100 maximum in this Bill and probably the fine will be 1s., 5s. or 10s. and there will be no imprisonment at all. Where a trader infringes the provisions of this Bill twice he ought to be cleared out of the business for good. If this war continues on the scale that some people apprehend, I am not so sure that the consumers themselves will not do so if he rides roughshod over the provisions of the Measure. I do not want to appear vicious, but the Government ought very seriously to consider this Amendment, and they will notice that it is not mine. It was put down by two hon. Friends and, in their absence, I am taking on the task myself of moving it. I am not without hope that the Government will accept it.

6.5 p.m.

Mr. Kingsley Griffith

I am not sure whether the Amendment is a sound one, but I cannot help thinking that whether it is or is not, the reason for it is thoroughly unsound, because the hon. Gentleman has such an utter distrust of the court which will impose the penalty that he suggests that the offender's pals on the bench are going to ignore the glorious possibilities of sending a felon to prison for three months, but assumes that they will, none the less, make an order which will put him out of the business altogether. I should imagine that, if they really are so nefarious in their conception of justice that they are likely to let him off with a very small fine, it is no good giving them powers to hang, draw and quarter when ex-hypothesi they are such pals of his that they will let him off altogether. I leave it to the hon. and learned Gentleman to say whether for some other reason this may not be a sound Amendment.

6.6 p.m.

The Solicitor-General

The hon. and learned Gentleman's very effective answer almost disarms me in dealing with the Amendment. No one in the world would ever imagine that any Amendment emanating from the hon. Member for Westhoughton (Mr. Rhys Davies) comes from a vicious person. We are quite satisfied about that. But what is it that he is proposing to do? By the previous Subsection a profiteer can go to gaol not for three months but for two years on indictment. If the offence is sufficiently serious he will not be brought to trial before his friends on the local bench. He will be sent for trial, and there will be no chance of escaping just retribution. That is the real sanction behind the Bill. What is being held in reserve is that, if the drastic power to punish him proves insufficient on two occasions, on the third there should be a sanction, which is almost unknown to the law, that, with the approval and under the direction of the Attorney-General, he may be driven out of business altogether.— [Interruption.] Indications appear to suggest that I am flogging a dead horse. I will, therefore, wind up my observations by saying that we are satisfied that the penalties here are ample for dealing with the case, and that it is only in very exceptional cases, which we hope and believe will never occur, where after two convictions you find a person such a persistent offender that he goes on, that this drastic step of driving him out of business will be resorted to.

Mr. Rhys Davies

I will convey my feeling to my two hon. Friends who are absent that, if they had heard the hon. and learned Gentleman's argument, they would wish that I should withdraw the Amendment.

Amendment, by leave, withdrawn.

Amendment made: In page 6, line 15, at the end, add: (3) It shall be a defence for a person charged with a contravention of any of the provisions of Section one of this Act to prove that in relation to the matter in respect of which he is charged he acted in the course of his employment as a servant or agent of another person on the instructions of his employer or of some other specified person."—[The Solicitor-General.]

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

6.8 p.m.

Mr. K. Griffith

I merely rise in consequence of some words that fell from the Solicitor-General in dealing with the previous Amendment. I was very much perturbed when I heard him give a rough sketch of proceedings before a court of summary jurisdiction in the matter of an overcoat, the basic price of which was £5 and, on proof of sale at £6, which was not disputed by the prisoner, forthwith the court proceeds to sentence, with no further information whatever. He has pleaded guilty, but there are gradations of guilt in this as in everything else. I should have thought it was extraordinarily difficult for the court to arrive at a correct decision as to whether it should impose a small fine, or possibly send him to prison for three months, if that was all they knew. I should have thought, therefore, that in the great majority of cases it would be necessary, in order that justice should be done, that the court should take into consideration many of those factors which the Solicitor-General appeared to take it for granted would not be present to the mind of the court at all. If the court is not to have those matters before them, I should have thought it would be very difficult for them to arrive at a correct conclusion. It is necessary, as the learned Solicitor-General said, to consider the operation of Clause 7 in conjunction with Clause 9; the two must be read together. I can see the reason for putting the burden of proof in Clause 9 upon the man who is charged, but until the Solicitor-General had spoken I did not realise that the combined functions of these Clauses would leave the court operating with such extraordinarily little information. I must say that that prospect rather horrifies me.

6.11 p.m.

The Solicitor-General

The court really will not be as barren of information as the hon. Gentleman the Member for West Middlesbrough (Mr. Griffith) seems to think. If the accused person is reasonably apprehensive of his fate, he will presumably give the court what help he can, and try to minimise the effect of the evidence given by the prosecution. The prosecution will have available to it the information that has been collected by the Board of Trade from the local committee, and perhaps from the Central Committee, and will put before the court the basic price, the actual price, and, no doubt in 999 cases out of 1,000, an estimate of what would be a reasonable increase. That, taken side by side with the actual price charged, would be ample to enable the court to perform its duty, but in the exceptional case where the man accused is recalcitrant and has refused to give any evidence either to the court or to the Board of Trade or to the local authorities, or to the regional committee, the full rigour of the provisions of Clause 9 would be operative. If an overcharge is proved, and if the man persists and will not even say anything to defend himself, I confess that I have not a great deal of sympathy with him.

Mr. K. Griffith

I hope that the course to be followed will be, in the great majority of cases, that which the hon. and learned Gentleman suggests, but if that be true he seems to have swept away a great part of the validity of the reasons he gave for rejecting the earlier Amendment.

6.14 p.m.

Mr. Bevan

It may be that the value of this consists in the vagueness of the offences committed, and it is in fear of not knowing what the law really means that the trader will behave himself in the conduct of his business. It is a strange situation in which penalties are to be assessed for offences which are to be kept vague. The trader himself or the public court will not know the extent to which the trader has offended, because all that the court will want to be satisfied about is that an offence has been committed, and that whatever increase the trader is permitted over and above the basic price the two ought not to come to the price he charges, but what that price is the court refrains from saying, so that the extent of the offence is entirely vague. I was glad that the original Amendment was withdrawn, because I could see that we might have had three very heinous offences committed, and the ultimate penalty exacted, and two very trivial offences committed which might result in imprisonment or the stopping of the whole business. In view of the ambiguity of offences, I am glad that the penalties are not to be onerous. But I still think and agree with the hon. Member for West Middlesbrough (Mr. K. Griffith) that the two speeches which have been made by the Solicitor-General do not quite jump together. In 999 cases out of 1,000 the court would have to satisfy itself what the ultimate price should be before it could convict at all. It would have to have all the evidence before it, assess the increase and satisfy itself what would be a reasonable price before any action could be taken.

Question, "That the Clause, as amended, stand part of the Bill," put, and agreed to.