CLAUSE 1.—(Power to fix maximum prices for goods.) (Hansard, 26 June 1941)

§ Mr. Doland (Balham and Tooting)
I beg to move, in page I, line 7, after "may, "to insert: after consultation with the appropriate trade organisation. I move this Amendment in the absence of the hon. Member for Frome (Mrs. Tate). Not only do I consider this a most necessary safeguard for traders, particularly before the fixing of maximum prices under this Measure, but I attach special importance to the phrase "appropriate trade organisation." As the President of the Board of Trade is aware, there are trade organisations which cover not only a multitude of sins, but a multitude of trades. While it may be presumed that the trade organisation mentioned in the Amendment might mean, for instance, the National Chamber of Trade or the London and Suburban Traders' 1134 Federation, I hope that it will be interpreted as meaning the actual organisation representing the trade to which a specified Order may refer. For instance, in the case of Orders relating to men's tailoring, there is the Merchant Tailors' Association just as, in the case of women's wear, there would be a particular trade organisation concerned with those goods.
In many instances where it is a case of officials of a trade organisation being brought into consultation with the Board of Trade, it is usual to consult the chair man or president or secretary of the main organisation or, shall I call it, the parent organisation. I am asking the President of the Board of Trade to particularise in this respect. Sub-section (2) of this Clause emphasises the necessity for this Amendment. It is an elaboration of the proposal which I am now advocating referring as it does to the fact that a parent organisation could not have the technical knowledge which would enable it to differentiate between different classes of the same description of goods. On the other hand, individual associations representing the particular industries referred to and the particular goods specified, can assist those persons who will have to come to decisions, in regard to different classes of the same description of goods. While I am on this Clause may I ask whether Sub-section (3) means that the retailer must notify every sale—

The Deputy-Chairman
The hon. Member is now going beyond the point covered by his Amendment.

§ Mr. Doland
I bow to your Ruling, Colonel Clifton Brown and I hope to have an opportunity of referring to the point at a later stage. I hope the President of the Board of Trade will instruct those persons who are to be given power to fix these maximum prices, to consult, before doing so, with the particular trade the goods of which are specified.

§ The President of the Board of Trade (Mr. Lyttelton)
I can assure my hon. and gallant Friend that it is the intention of the Board of Trade and of the Central Price Regulation Committee to keep in close touch with the trade organisations and to give the fullest weight to their experience and advice. We could not, however, accept this Amendment which would make it obligatory, in all cases, to consult the traders' organisation. It is 1135 sometimes difficult to know what is the appropriate trade organisation in a particular case and there are cases—which will be exceptional—in which we should have to take specially rapid action. I can assure my hon. and gallant Friend, however, that it has been the practice in the working of the Prices of Goods Act for the Central Price Regulation Committee to take counsel with the appropriate trade association, where there is such, in every possible case, and in the administration of this Measure the fullest weight will, as I have said, be given to the advice of the organisations concerned where consultation is possible.

§ Mr. Doland
On that assurance, that consultation will take place with the appropriate association, in cases where it is possible, I beg to ask leave to withdraw the Amendment.

§ Mr. Silkin (Peckham)
I beg to move, in page 1, line 11, after the second "sell," to insert "expose for sale."
The purpose of this Amendment is to make it plain that where a seller exposes goods and places on them a ticket bearing a price, and where that price is in excess of the maximum, he shall, thereby, be committing an offence It may seem obvious that in such circumstances he would be committing an offence, but a number of decisions have been given in the courts to the effect that the mere placing of a price-ticket on goods is not to be regarded as an offer of the goods for sale. There is a well-known case in which a coat was displayed in a window bearing a ticket with the price £20. A person went into the shop, put down £20, and said, "I will have that coat." The shopkeeper said, "No, the price of that coat is £100." The prospective purchaser brought an action against the shopkeeper and it was held that the mere affixing of a price-ticket to the coat did not constitute an offer for sale. In the course of present-day dealings, many cases may arise in which shopkeepers will put tickets on coats bearing prices which may be in excess of the maximum price. If the Clause stands as it is now drafted, they cannot be held to be committing an offence. I know many cases in which shopkeepers have been prosecuted but have evaded their responsi- 1136 bility by alleging that they were not offering the goods for sale. I would like to see these words inserted to make it clear that a person offering goods for sale and attaching to them a price in excess of the maximum will be committing an offence. If the Amendment is accepted, as I hope it will be—because we are all agreed as to the purpose of the Clause—certain consequential Amendments will be necessary in other parts of the Bill to which the same considerations apply.

§ Mr. Lyttelton
With the objects of the hon. Member's Amendment I entirely agree, but I am advised that Clause 20 (4) meets the case which he has in mind. There, an "offer to sell" is defined as including the notification by a person of the price proposed by him for a sale of goods by exposing goods for sale in association with a mark indicating price. That, I am advised, will achieve the objects which the hon. Member has in view, without the necessity for any such Amendment as that now proposed.

§ Mr. Silkin
I am obliged to my right hon. Friend for pointing out that provision, and if that covers the point I would beg to ask leave to withdraw the Amendment.

§ Mr. Leslie (Sedgefield)
I beg to move, in page 1, line 13, at the end, to insert: (2) The Board of Trade shall take into consideration any application for the making of any such order received from any body of persons appearing to the Board to be representative of traders in goods of any description, or, with respect to goods of any description, from the central price-regulation committee. This Amendment ought to appeal to the Board of Trade. It in no way affects the power of the Board to issue Orders or fix prices. It does not infringe on the Board's authority. The Amendment is calculated to assist the Board, while, at the same time, giving the trading community a sense of responsibility. Honest traders—and they are in the majority—desire to assist the Government and the consuming public in this national crisis. Their advice should be welcome, because it is based on practical experience. The men behind the counter have a knowledge of the intricacies of trade and the needs of the consuming public which should be 1137 of immense value to the Board of Trade, and I hope the Amendment will be accepted.

§ Mrs. Hardie (Glasgow, Springburn)
The point I wish to make in connection with this Amendment is, that the price regulation committees will also be consulted before these Orders are made. We are exceedingly anxious that there should be consultation with these committees which have done good work in the past. It may be that the point will be covered in one of the succeeding Clauses of the Bill, but I would like to take this opportunity to emphasise the desirability of taking into consideration in the framing of these Orders the experience of the price regulation committees.

§ Mr. Moelwyn Hughes (Carmarthen)
I support this Amendment and wish to remind my right hon. Friend of the provisions of the Act which this Bill seeks to improve under which there was power not to fix prices but to set up a permitted price. That power to-day is in the hands of the Board of Trade, but the initiative in that connection under the Act can come from three different parties. I am referring to Section 5 of that Act, in which it can come from the Board of Trade, the Central Price Regulation Committee, or on the application of a body representative of the traders. In the Bill that we have before us—and I have regard to the assurance of my right hon. Friend as to matters of consultation—in terms at any rate, the initiative is reserved entirely to the Board of Trade. I urge my right hon. Friend to accept either this Amendment or something to the same effect, which would allow the initiative to representative bodies and to the Central Price Regulation Committee. I am not suggesting that the Board of Trade under the direction of my right hon. Friend lack initiative, but I am sure that he would agree that on occasion it can be of considerable assistance to him to see that the wheels are set in motion by representative bodies and by the Central Price Regulation Committee.

§ Mr. Lyttelton
I think that this Amendment is unnecessary, because I cannot imagine any instance in which the Board of Trade would not take into consideration an application made by a representative body. It would be a grave dereliction of duty if they did not. I believe that the hon. Member for Carmarthen 1138 (Mr. Hughes) is basing his case on Section 5 (1) of the Prices of Goods Act, which provision had a different purpose. Section 5 was intended to enable the Board of Trade, if asked to do so by traders concerned, to fix the permitted price mainly for the convenience of the particular section of the trade, in order that they could be sure that, if they sold at that permitted price, they would be outside the possibility of prosecution. This is rather a different matter. In so far as the Board of Trade are going to fix maximum prices, it would, in the ordinary course of events, be their duty to take into consideration any representations which were made. I can assure the hon. Member that that will be done. I do not think that the proposed words really help us at all. They really impose no obligation which would not be accepted by almost any prudent Department.

§ Mr. Hughes
I still do not understand why it was thought necessary to insert specific provisions in that Act enabling the Central Price Regulation Committee and traders to make representations and why they are omitted from the Bill we are now considering.

§ Mr. Lyttelton
That is just the point that I was trying to explain. Under the original Act this right was given in order that the trader should be able to ask for the permitted price and, the permitted price having been laid down, should be sure, if selling at that price, that he would be free from the danger of prosecution. It is quite a different procedure under this Clause because the maximum price is the only permitted price. In the permitted price there is a number of other factors which come under consideration.

§ Mr. Ness Edwards (Caerphilly)
What is the position in cases where there are existing maximum prices and traders are held up in carrying on their trade through having no permitted price? Have they the right to apply, and, if they have, why not express it in terms of the Amendment?

§ Mr. Lyttelton
If there is delay in fixing maximum prices, goods will fall to be dealt with under the existing Act.

§ Mr. Leslie
Am I to understand that we have to accept from the right hon. Gentleman the assurance that what is contained here will be carried out?

§ Mr. Lyttelton
Yes.

§ Mr. Leslie
I beg to ask leave to withdraw the Amendment

§ Mr. Moelwyn Hughes
I beg to move, in page 1, line 19, to leave out "by retail."
This does not mean that I am in any sense trying to exempt retail traders from the obligation imposed upon them by the Board of Trade to display their prices. The obvious intention of this Sub-section is to protect the public by methods of ticketing or printing upon the articles in order to protect the ultimate buyer. I wholeheartedly agree that the Board of Trade should have power to impose the obligation of ticketing articles or informing in some way or another the ultimate buyer of the price fixed by the Board of Trade under the Act. But my right hon. Friend is well aware—he is far better informed than I am in this matter—that many catalogues and price lists are not for the public to read but are issued for the benefit of wholesalers, factors and retailers. I cannot understand why the Board of Trade do not seek to take powers in the appropriate cases to compel manufacturers, wholesalers, or distributors to set out in their catalogues, or in proper places, the prices which they would be authorised to charge by the Order of the Board of Trade made under this Bill. I think that in this instance I can call in aid the support of the hon. Member for Balham and Tooting(Mr. Doland). As the Clause now stands, it assumes that the only person who needs to be kept in check from abusing or defying the Order of the Board is the retailer. It is not fair to assume that it is only the retailer. There may also be manufacturers, wholesalers and distributors who may need to be kept in check, and in order that the Board might have sufficient power to impose conditions upon them in appropriate cases similar to the conditions imposed upon retailers, I ask my right hon. Friend to accept this Amendment.

§ Mr. Lyttelton
I am prepared to accept this Amendment. I think that as a rule this provision is necessary for the protection of the ultimate consumer, but, owing to the knowledge of the trade, it might be unnecessary for the Order to prescribe similar requirements at other stages. 1140 Nevertheless, we accept the Amendment, because it gives me power to include such provisions in Orders if required.

§ Mr. Ness Edwards
Do I understand from the reply of the right hon. Gentleman that he will have power to fix a price from the producer to the wholesaler and another price for the retailer, or is it proposed that one maximum price shall be fixed so that the man who sells the goods in the first place may sell at maximum prices to the wholesaler, who will say to the retailer, "You shall have the goods at the same price," or will some arrangement be made whereby they will be scaled prices?

§ Mr. Lyttelton
Maximum prices are fixed for different classes of businesses and goods.

§ Mr. Moelwyn Hughes
I beg to move, in page 2, line 28, at the end, to insert: Provided that it shall not be a defence where the employer or other specified person alleged to have given such instructions is a body corporate. My Amendment seeks to provide protection for the man or woman who sells goods behind the counter against whom, in law, if he or she had been engaged in one of these transactions, an action would normally lie. It does not in any way seek to limit the protection which has been given. It will be observed that the defence which is open to the shop assistant in the ordinary case depends upon two conditions. First, is the condition that the assistant should have acted in the course of his employment, and that condition, of course, is satisfied where the assistant is employed by an individual employer, corporation or limited company. The second condition is that in so acting the assistant has acted upon the instructions of his employer or some other specified person. Now in law that word "person" is wide enough to cover limited companies, and I do not desire that this defence should be extended to cases where the defence put up was (a) "I acted in the course of my employment" or (b) "The instructions I received were the instructions from X company."
As the Clause now stands, that defence would be a valid defence. Then the shop 1141 assistant, quite properly, is exonerated, and the prosecutor will proceed to move against the company. A limited company, a body corporate, has been described as something which has no soul to be saved and no body to be kicked, and I cannot see that impositions upon limited companies will provide the proper sort of sanction that is required to see that these provisions are duly carried out. Further, in the defence as it stands now there exists the possibility of abusing the company law, as it has been on many occasions, by the old device of the one-man company. The man who serves behind the counter may in fact be the company; he may own the shares and control all its affairs. He has only to whisper, and the orders of the company will be carried out. He is, in fact, the person who can lie back and say, "I acted as an employé of the company, which is a different legal entity altogether. "He can say," I acted on the instructions of the company," which are really his own instructions, and that would satisfy the defence as it is now laid out. I say that if you want to avail yourself of this defence, you have to say "Not only was it in the course of my employment, but my instructions were given to me, not by Company A, but by Mr. A or Mr. B or some other individual who can be pursued."

§ Mr. Lyttelton
The effect of this Amendment would be entirely to defeat the object the hon. Member has in mind, because it would differentiate against the employé of a limited company as opposed to the employé of a private firm. The instance of a one-man company which the hon. Member gave did not appear to me to take us very far, because a person acting as a company's agent would be pursued as the principal for having committed a breach of the Act. There is nothing we can do to alter the fact that the majority of business transactions in all branches of trade are carried out by limited companies. If they have no souls, they certainly have purses. I think it is doubtful whether a body corporate can give instructions at all. They have to be given by power of delegation through one of the company's officers.

§ Mr. Doland
I think it can be admitted that this Bill is concerned only with consumers. We heard little during the Second Reading, and we have heard little up to now, about the safeguards which should be given to the trader. This Clause allows the Board of Trade to fix maximum prices for specified goods which will prevent excessive rises in the charges for those goods. Traders have no quarrel with that. The President of the Board of Trade on the Second Reading of this Bill said these very significant words: Some rise in prices must be justifiable and inevitable."—[OFFICIAL REPORT, 19th June, 1941; col. 852, Vol. 372.] But there is nothing in this Clause or in any other Clause, so far as I can see, which will safeguard the trading community from being pushed out of business if maximum prices which are made for specified goods are such as will not give the trader a sufficient margin to cover his overheads, let alone give him a small profit.
When the Bill is passed, traders will have to rely not only on the good will, fairness and honesty of purpose of the Board of Trade, but also on the Central Price Regulation Committee, which will be responsible for making the maximum prices. In the Second Reading Debate, the President of the Board of Trade paid a tribute to the British traders for being patriotic and law-abiding, and for submitting willingly, as a general rule, to restrictions on trade once they are satisfied that those restrictions are being equitably applied. With regard to this Clause, which is the principal Clause of the Bill, we sincerely trust that its provisions will be equitably applied in fixing maximum prices. As there is nothing that I can find in this Clause, or in any other Clause, to give this information to the trader, how does he know that the Central Price Regulation Committee, which I understand is responsible for advising the Board of Trade as to the maximum price for the goods specified, will fix a maximum price within which there will be a sufficient margin, and that that maximum price will be equitably applied? This Clause wholly concerns the consumers. The traders are given no assurance whatever that the maximum prices to be fixed will be such 1143 as to allow them to continue their business. I am most anxious to ascertain whether the small trader will be able to continue in business when this Clause is in operation.
My right hon. Friend said that the costs which are allowed to be taken into the computation at present may require adjustment, and he mentioned overhead expenses in relation to reduced turnover. My right hon. Friend admits that there must be some increase in prices, but in making the maximum prices, surely he does not suggest that, with traders working under the rationing orders, the turnover of retail establishments will be increased and the overheads consequently reduced? That would be an impossibility to-day. The fact is that traders are rapidly going out of business owing to the rationing order and other similar measures. I consider that my right hon. Friend is a very optimistic man if he thinks that the turnover of any retail establishment will be fixed in such a way that the overheads will come down. Does he intend to allow, in the maximum prices, for that to come about? I repeat that there is great alarm in the trading community lest the maximum price of goods specified is fixed without due regard being had to that diminished turnover which will be the inevitable result. not of causes under the control of traders, but of the Acts and orders passed by the House. When, in the Second Reading Debate, my right hon. Friend spoke of the early bird, the two extreme examples which he gave certainly referred to the vultures of that species and not to the poor little sparrows, the small traders. It is not the small trader who makes these excessive profits out of helmets and vacuum flasks. Unless great care is taken in carrying out this Clause, the small sparrows may be devoured by the-big birds, or by the Board of Trade. I hope my right hon. Friend will give an assurance to traders that the equitable treatment to which he has referred will be meted out to them.

§ Mr. Garro Jones (Aberdeen, North)
The hon. Member for Balham and Tooting (Mr. Doland) has put his finger on an extremely interesting point which must exercise the mind of everybody who reads the Bill; but can he be a little more precise, because if he can provide a scheme 1144 under which the difficulty to which he has referred can be met, I am sure the whole Committee will be only too delighted. Let me give one example of the difficulty to which he referred. A shop may have sold over 1,000 overcoats in a year, but owing to the exigencies of the war situation, its sale of overcoats may fall to one. Does the hon. Gentleman suggest that the whole of the overheads previously distributed over 1,000 overcoats should be placed on the one overcoat, and that overcoat be sold, not at a low price, but at an extremely prohibitive price? Has the hon. Gentleman any proposal in mind, because I am sure the Committee would like to know how the problem could be dealt with?

§ Mr. Doland
The hon. Member for North Aberdeen (Mr. Garro Jones) has followed the method of my right hon. Friend the President of the Board of Trade and given us a very extreme example of one overcoat being sold instead of 1,000 overcoats. I would not dare to suggest any Amendment or new Clause for the Bill. I have asked for one thing only, and that is that there should be consultation with the traders' organisations in the particular trade concerned with the specified goods—not with the parent organisation, but with the actual organisation to which the order refers. If that is done—and my right hon. Friend has assured us that it will be done in most instances, if not in all instances—I shall be quite satisfied that fair and equitable treatment will be given by the Board of Trade.

§ Lieut.-Colonel Sir William Allen (Armagh)
There is one thing that ought to be made clear before we part with this Clause, and that is that when goods are offered for sale in a shop, and a price-ticket is placed on them, the shop should be compelled to sell those goods to a customer.

The Deputy-Chairman
That point has already been raised in one Amendment, which was dealt with and accepted.

§ Sir W. Allen
I want my right hon. Friend to make the matter clear, as it is not clear to me from this Clause or from any other Clause in the Bill. The question of exposing for sale and offering for sale are two different things.

The Deputy-Chairman
What the hon. and gallant Member has in mind is dealt with quite clearly in Clause 20 of the Bill.

§ Mr. Ness Edwards
I should like to say a few words concerning Sub-section (3) of the Clause, which states: Any such order fixing the maximum price to be charged for goods of any description in the course of a business which includes the selling of the goods by retail may require such steps as may be specified in the order to be taken to bring the said price to the notice of persons to whom the goods are offered for sale by retail in the course of the business. With regard to bringing the correct price to the notice of the potential buyer, a great deal of trouble has been experienced, particularly by smaller shops, in understanding the provisions of the various orders that have been issued I wonder whether the President of the Board of Trade can provide, in another place, that this notice shall be brought in a special from In the case of packet goods, would it be impossible to provide that the permitted price, or the maximum price, should be stamped on the packet? There are many inspectors going round the country to see whether some poor widow who owns a shop is charging a farthing too much, but it seems to me that the greatest guilt does not lie with the small shopkeeper, but farther back in the production and general distribution. I wonder whether the President of the Board of Trade can give a more concrete and effective form to this provision. It would be of considerable importance, especially to the smaller retailer.

§ Mrs. Hardie
I should like to amplify that point, particularly in regard to drapery goods. In that connection I know something of the methods employed, and I have never dealt with stores which do not give fixed figures. It is well known that there is a varying price, and that the assistants can charge according to what they think the customer is likely to pay. Perhaps the President of the Board of Trade can give us an assurance, when a price is fixed for goods, that the regulated price must be plainly marked. I do not necessarily mean that tickets should be displayed in the windows, because that is generally done; I suggest that prices should be shown in plain figures for the customer to see.

§ Mr. Lyttelton
The remarks of the hon. Member for North Aberdeen (Mr. Garro 1146 Jones) are extremely pertinent to this matter. You have to have discretion in the matter, or we should be immediately driven off the whole objects of the Bill. For instance, when we talk about fixing a maximum price which will allow profits to all traders, what does that mean on examination? Suppose a trader has a large mortgage on his premises and has to meet interest charges on those premises before he can make a profit. It would be a very different maximum price for that trader compared with another trader who has no mortgage on his premises. There is no way of administering or achieving the objects we wish, unless there are wide powers. We recognise that, and we try to introduce reasonable safeguards, such as those provided by the Central Price Regulation Committee and the local committees who can be relied on to give sensible advice regarding maximum prices. I cannot see that we can have any more assurances than are already contained in the Bill. It is, I think, generally recognised that the Central Price Regulation Committee has, under the present Act, worked effectively. To begin to give any undertaking that so-and-so's overhead charges and so-and-so's interest on a mortgage will be included in the maximum price, is obviously impossible.
With regard to the suggestion that packets should have the price stamped on, I would point out that if there were any alteration in the maximum price, the confusion would be worse than if the price were marked separately. The suggestion presupposes that the maximum price will be fixed for a long period and will not be altered; but where a price is altered there will be more confusion among the smaller traders than if they had to put up another label. With regard to the other question, goods displayed at a given price must be sold at that price.