HC Deb 29 June 1948 vol 452 cc2139-67

Amendment made: In page 13, line 24, after "goods," insert "of any description."—[Mr. Belcher.]

Consequential Amendments made.

Mr. Belcher

I beg to move, in page 13, line 34, at the end, to insert: (4) The criteria to be adopted for determining when goods can be treated, for the purpose of a reference to the Commission under this Act, as goods of a separate description shall be such as the Board of Trade may think most suitable in all the circumstances of the particular reference, and references in this Act to descriptions of goods shall be construed accordingly. This is consequential on a large number of Amendments made during the course of this evening. It is designed to enable the Board of Trade to determine when goods can be treated as goods of a separate description; and to adopt such criteria as they think most suitable in all the circumstances of a particular reference.

Amendment agreed to.

Mr. Belcher

I beg to move, "That the Bill be now read the Third time."

Having reached this stage in the passage of the Bill, I think that we may all be considering the use to be made in due course of the Monopoly Commission. There has been a tendency in Standing Committee to think about the Commission as a body which deals primarily with complaints from outside, perhaps even with individual grievances. I think that is to some extent a misconception. No doubt, some dubious practices will be unearthed by private communications to the Board of Trade or other Government Departments, about which nothing has been known beforehand. We believe that a good deal of information is already in the hands of Government Departments, and several alternative programmes for the first year's work of the Commission could be drawn up from that prima facie information.

Obviously, of course, I am not in a position to say what the first year's programme of references will or should be; but clearly there are certain principles which we should take into account. References should, I believe, be made to the Commission successively. We do not want to overload this body at the start with all the references to be made during the first year. References should be so chosen, if possible, as to enable different types of restrictive practices to be illustrated; they should, if possible, be in respect of matters which may be of practical effect on our present economic position; and they should be well spread over the field of industry. It is fairly clear that the Commission will have a reasonable year's work with even, say, half-a-dozen references. If the work is to be done properly it will have to be carried out in very considerable detail, and it is, if anything, understating the case to suggest that in the first year the Commission will have a reasonable year's work with only half-a-dozen references.

The membership of the Commission is not yet settled; but I can assure the House that we have no intention of having a Commission with an indifferent membership, and, therefore, a poor Commission. We expect the membership of the Commission to come, in the main, from the professional classes; but we hope to leaven it with somebody with industrial and practical commercial experience—for instance possibly a banker—but I should not like to say at this moment who would be the exact representatives on the Commission.

Immediately, the Commission's work is likely to derive almost entirely from specific and formal references, but in the long run Clause 2 (2), which enables the Board of Trade to seek informal advice from the Commission, should be increasingly used and of growing importance. At first its usefulness will be limited, because the Commission will not be expert in this field of restrictive practices. That point has been made earlier this evening. Equally, the ability to ask for a general report on a particular practice—the subject of a new Clause which has been accepted by the House this evening—ought to be of great importance after the Commission has been working for, say, four or five years, and has acquired that experience which the hon. Member for Bucklow (Mr. Shepherd) was so anxious it should have, before being asked to give a general report on a particular practice of this nature.

Mr. E. Fletcher

I hope one is not to infer from that remark that no use will be made of that Subsection within four or five years.

Mr. Belcher

I was using the expression "four or five years" only as an example of what we have in mind. Undoubtedly, a general report on a particular practice secured from the Commission in its earliest days could not have the same value as a report secured from the Commission after it has had time to acquaint itself with restrictive practices generally, and has become more or less expert in the field. I should not like to say it will be four or five years, but obviously there must be time to enable the Commission to acquire the experience to make its report on such a matter valuable. The Commission's reports ought to be regarded as carrying great significance, at least as much for the general lessons to be gained by industry from them as for their immediate impact on a particular industry.

We assume—as the right hon. Member for Aldershot (Mr. Lyttelton) said in the Standing Committee—that industrialists themselves will be glad of impartial light on the intricate problems involved. It is sometimes said that many sections of British industry and trade are too prone to stick to the old methods without even questioning the assumptions upon which those methods were based, often it seems without even making sure that what they are doing is in their best interests, let alone the best interests of the country. I think there will be general agreement that the time is ripe for an impartial and clearheaded examination of some of these assumptions. The right hon. Member for Aldershot said during the Committee stage that businessmen would be glad of that on the intricacies involved.

In the last resort the Commission will become what industry makes it. If businessmen are prepared to co-operate with the Commission in working this Bill when it becomes an Act in a positive spirit and not look upon it as an annoying interference, the Commission's reports may become in the nature of textbooks on many matters of industrial organisation and commercial policy, and may recreate a progressive and forward-looking atmosphere throughout British industry. I am not suggesting that there is not already over a considerable field of British industry that progressive and forward-looking atmosphere, but I feel sure that all will join with me when I say that there is need at this time for the re-creation of a progressive and forward-looking atmosphere throughout the whole of British industry.

If businessmen are not prepared to co-operate in this sense, then the Government must use their powers, for the corollary of a refusal to condemn the restraints of trade without first subjecting them to an impartial examination is action against arrangements which are used to shelter the unenterprising and inefficient, to impede the expansion of British production and international trade, or otherwise to injure the public interest. I believe that this Bill has the germs of something which can be of immense value to British industry. I believe that that fact has been recognised in all parts of the House. We have made considerable efforts to meet the wishes of Members opposite, and I am grateful for the co-operation which has been shown by Members on both sides. I look forward to the future of this Bill with some degree of confidence.

10.13 p.m.

Mr. Lyttelton

We do not propose to divide against the Third Reading of this Bill. The Bill has been criticised in many quarters for being tentative in its approach. The subjects which it attempts to cover are very difficult and intricate, and I think it is wise to approach them cautiously and not plunge at once into the mass of anti-trust legislation in which the United States have become involved. My right hon. and learned Friend the Member for West Derby (Sir D. Maxwell Fyfe) has both said and written, and I agree most heartily with him, that this is not the right vehicle for dealing with restrictions in so far as they relate to the labour side of industry.

I think it is necessary to say, and with some sympathy, that these restrictive practices on both sides of industry have grown up during difficult times on the labour side in order to try to mitigate the evils of unemployment and to prevent skilled trades being subjected to what is eloquently called in modern terminology "dilutees" or "trainees." These are the causes which have led to restrictive practices on the labour side of industry. It would be exhilarating if we found some sympathy on the other side for the restrictive practices that have been more or less imposed on employers at certain times in order to protect their enterprises going bankrupt, their workpeople being dispersed and general disaster falling on their industry.

Obviously, this Bill deals only with the business side, but we do expect—and I announce this very clearly—one of two things. We expect either very far-reaching administrative action by voluntary agreement which will reduce or abolish the restrictivist practices on the labour side of industry— "feather-bedding," as it is called, and so on—or if they do not succeed in getting this administrative action carried out on a voluntary basis, we expect a Bill to outlaw practices which result in the artificial restriction of a man's labour. That is what we expect. I have a suspicion that we shall not get it but, nevertheless, we shall press for it. It would be far better if the restrictions on a man's labour could be abolished by agreement. If they are not, we expect to see legislation parallel to this Bill.

We think that the Bill, it well administered, may be useful, but it has some serious blots. First, the Commission has no powers to inquire into even the facts of practices pursued by a statutory monopoly. No argument of any substance whatever has been produced from the Treasury Bench against this idea. We believe that the Commission should be entrusted to inquire into the practices of statutory monopolies. Second, the Bill had another serious blot which the Government did something to remove, namely, that "the public interest" remained indefinite. My right hon. and learned Friend the Member for West Derby moved an Amendment which the Government accepted in principle when they confessed that the original draft left the definition of "the public interest" too wide and too vague.

The Bill has been improved in this respect, but there are several other blots. I do not like the Clause which permits the Board of Trade to require the Commission to make reports on the general effect on the public interest of practices of a specified class. Nor do I think it fair that imputations which are levelled against certain sections of industry should have to be put in a report to the Board of Trade when those industries have no opportunity of meeting the accusations perhaps for a long time. That is not my idea of fair play, and I am very disappointed that the Government have given us no assurance on this point.

Mr. Belcher

So far as this Government is concerned and, I imagine, any subsequent Government, I think it would be possible to overcome that difficulty by not disclosing the name of the firm in the report to the Board of Trade. Reference could be made to a particular commodity, and not necessarily to a particular firm.

Mr. Lyttelton

I do not think tint meets the point. If we talk about the rayon industry certain firms immediately come to mind; if we talk about E.L.M.A. other firms immediately come to mind. I do not think it is fair that imputations, which are frequently without foundation, should be allowed to be made without an opportunity being given to inquire, until a long time has passed, into what is taking place.

The worst blot of all is that the Government have taken powers to overrule the Commission's findings. No substantial reasons have been produced to justify this action. The Commission is to be an independent body with power to take evidence on oath, and so forth, and inquire into these very intricate matters. The Government, by a sort of side door, reserve to themselves the power to reverse the Commission's findings relating to the public interest. We say from these benches—and I hope hon. Members will not misunderstand the point of view—that if it should become necessary to say that the public interest is damaged by a certain method, this is not the way to do so. There must be legislation. It is quite wrong that by a side wind this power should be retained by the Government.

Many hon. Members opposite sincerely hoped, or perhaps I should say sincerely held the view, that the nationalisation of an industry would solve all its problems. They may have learnt otherwise now, but they honestly held that view. It is possible for the Commission, after inquiring into certain practices, to say that those practices were not against the public interest and indeed that the monopolistic practices were for the benefit of the public in particular circumstances. Hon. Members opposite might argue, "We do not think that any company should have such a share of the market. We do not think it is right that any company should make a profit by the sale of foodstuffs and for that reason we propose to set aside the findings of the Commission and nationalise the industry as a consequence of our own view of the situation." There is still time for the Government to erase some of the blots on the Bill, and I hope they may even at this late hour re-read some of the suggestions which came from this side of the House, and that they will be able to accept more of them than they did this afternoon.

As I have said, we do not intend to vote against the Bill, because, in the main, we think it is a sensible approach to an extremely intricate situation. Industrialists have the fortunes of large industries in their responsibility as well as the working conditions and the employment of very large numbers of men and women, who are dependent upon their judgment. They cannot feel, with the facile certainty often displayed by hon. Members opposite on this subject, that this or that practice is exactly a balance as between the public interest and the interests of the people in the industry, not only the shareholders, but, much more important, the workpeople of the particular industry, whose employment has got to be protected in exactly the same way as the interests of the consumers has to be protected.

Those who call for quick answers on these matters seldom know what they are talking about. As a matter of fact, the problem is one of extreme difficulty and a fine line has to be drawn between protecting in a legitimate way the interests of the workers, shareholders and consumers in an industry and the public interest. However carefully these things are drawn, there will always be an element of doubt, and it will reinforce the industrialists to have their actions endorsed or, if hon. Members prefer, condemned by an independent commission. In the majority of cases where action is condemned, alterations will be made in the practices.

The other reason which I, personally, welcome this Bill is because I think it will put to rest once and for all some of the slogans and catchwords which we have heard from time to time, some of which were voiced this afternoon by the hon. Member for Acton (Mr. Sparks), who, I am sorry to say, is not at the moment in his place. These slogans and catchwords, which are without foundation in fact, are sometimes the favourite sport of hon. Gentlemen opposite.

I have a rather unpleasant task with which to conclude. The President of the Board of Trade has himself been guilty in this respect, and I am afraid I must refer to it. In the Second Reading Debate, I think in order to draw me, he said that the price of lamps in this country was the highest of any country in Europe. I was able to show him that it happened to be the lowest in Europe. Then he went on to refer in these terms to something else: Evidence has been brought to my attention only recently of an ex-R.A.F. pilot who wanted to develop a new technique for making fluorescent lamps, but was frozen out by the withholding of supplies of glass tubing from factories controlled by ring firms. This was the evidence which was brought before me but I have not been able to test its accuracy."—[OFFICIAL REPORT, 22nd April; Vol. 449, c. 2027–8.] Unfortunately for the President of the Board of Trade the R.A.F. officer concerned, whom I do not know and to whom I did not write, has taken it upon himself to write to me. I think I ought to read his letter to the House. He says this: The facts are as follows: During the war I was engaged on research work for Bomber Command. My brother was a Flight Lieutenant with the Eighth Air Force. At war end we put all our capital into Barlite Lamps Limited and commenced the production of a range of patented instant-start fluorescent lamps. Immediately prior to the fuel crisis our supplies of glass tubing from G.E.C. Wembley and Webbs Crystal Glass Co. dried up; for six weeks we had no production, no capital reserves and being Americans no useful financial contacts in England.

Dr. Barnett Stross (Hanley)

Will the right hon. Gentleman forgive me a moment? He has mentioned a firm in my constituency and a man whom I know. Will he accept it from me that anything he reads from him is probably without any foundation in truth? I regret to have to say this, but it has been proved so in the town in which he lives.

Mr. Lyttelton

I do not accept for one moment the statements of the hon. Member. I am simply reading the man's letter. Let us suppose that what the hon. Gentleman says is true, that the man is worthy of no credence whatever. Why did the President of the Board of Trade think fit to refer to him in the Debate?

Mr. Belcher

May I ask the right hon. Gentleman how he can be sure that the ex-R.A.F. officer from whom he has received a letter and the unnamed ex-R.A.F. officer mentioned by my right hon. Friend in his speech are one and the same person?

Mr. Speaker

It is really a question of what is in the Bill. We seem to be getting a little wide of that.

Mr. Lyttelton

This is an instance of the practices which the Government say will be inquired into by the Bill. I will not read all the letter but I will, if I may, read the next paragraph. Referring to the President of the Board of Trade, the writer says: The interesting part which he suppressed is this—for four months prior to the fuel crisis we wrote, interviewed, pleaded and finally begged the Board of Trade to allow us to import tubing from France. The Board of Trade in numerous communications claimed that no importation could be permitted, yet during this same period the same department of the Board of Trade was granting import licences to Duralite Limited, a company partly owned by the C.W.S. I only bring in this instance to show the sort of irresponsible statements which are made even by Ministers of the Crown.

Mr. Cobb (Elland)

rose—

Mr. Lyttelton

I am not going to give way. I want to finish what I am saying. The two instances produced by the Board of Trade were, first, lamps, which they said were the highest price in Europe but happened to be the lowest; secondly, that this ex-R.A.F. officer was stopped by the lamp ring, as the President of the Board of Trade called it, from making fluorescent lamps.

Mr. Cobb

If the right hon. Gentleman will not accept that testimony, will he accept mine that it was very difficult for people not in the lamp ring to get lamp bulbs and other glass of that description from his own corporation who were in competition?

Mr. Lyttelton

The hon. Member is on quite another point. I challenge him to disclose his interest.

Mr. Cobb

Certainly, that my firm is in competition with that of the right hon. Gentleman.

Mr. Lyttelton

That does not disclose the interest. I challenge the hon. Member to say of which lamp firm he is a member.

Mr. Cobb

I am a director of a valve firm in competition with the right hon. Gentleman's firm.

Mr. Lyttelton

The hon. Member looks very prosperous I must say. I am only too anxious to see my competitors in a prosperous and argumentative condition.

The last point which I was making was that I hope that the findings of the Commission will put a stop to irresponsible tittle-tattle which is put about on these subjects and bring them into a much more judicial atmosphere. I am reinforced in that view because Ministers of the Crown during this Debate have made entirely irresponsible statements in certain instances without any foundation whatever.

10.30 p.m.

Mr. Sparks

I want to say a word or two on the passing of this Bill to another place and to express my conviction that the time has arrived when a Bill of this nature should be implemented. It is important that we should realise that there are enterprises which exist at the present time whose activities ought to be inquired into. I think that the bases of these enterprises have been adequately laid down by the right hon. and learned Member for West Derby (Sir D. Maxwell Fyfe) in that admirable book which he wrote on the question of monopolies. He described some of the organisations in regard to which the Commission would function in these words: The board or boards of directors who control a monopoly are constitutionally responsible to their shareholders, whose control in very large undertakings is very remote. Neither directors nor shareholders are formally responsible to anyone for the social consequences of their actions. The economic power resting in a monopoly may have a very great influence upon the social structure, especially if some measure of rationalisation is being undertaken. I believe that in cases of this description there is ground for the establishment of a Commission of this character.

I would say, in passing, that there are many monopolies which control vital sources of supplies. For instance, in the realm of food alone, two units control go per cent. of the production of margarine and three large units control 94 per cent. of our condensed milk supply. Three of the largest units control 84 per cent. of our rayon manufactures and three of the largest units in the country control 84 per cent. of cast iron pipes and fittings. In the realm of mechanical engineering, two units control 91 per cent. of the production of sewing, hoot and shoe-making machinery, three units of enterprise control 72 per cent. of weighing machine production, and three units control 80 per cent. of our telegraph and telephone apparatus production. In the realm of wireless valves and electric lamps, three enterprises control 66 per cent. of our production, and in the case of primary batteries and accumulators, three units control 82 per cent. In the supply of nonferrous metals, one unit controls 97 per cent. of the production of nickel and nickel alloys. So far as chemicals and allied trades are concerned, three units control 84 per cent. of the production of dyes and dyestuffs. Two units control 94 per cent. of the production of matches. One unit controls 98 per cent. of the output of wallpapers.

I could mention quite a number more, but I think sufficient has been said to indicate that there is a wide range of monopoly undertakings in a wide range of commodity production whose activities need some inquiring into by a Commission of this character. As a matter of fact, 118 commodities are produced wholly by one or two firms. The concentration of production into larger units is due, to some extent, to technical progress and development, and to the urge for stability and security. It is important to realise that when this concentration of production into larger units takes place, obviously the free and unrestricted force of private enterprise, for which hon. Gentlemen opposite stand, ceases to exist. I think they are in something of a dilemma, because they say that they stand for free and unrestricted private enterprise, and they dislike this Bill to some extent because it is a negation of their political theories. Free and unrestricted private enterprise is rapidly giving way to the amalgamation and trustification of industry. That tends to eliminate the competitive factor from enterprise. It leads to a monopoly position—

Mr. Speaker

The Third Reading is supposed to deal with what is in the Bill. A general discussion of private enterprise and what it leads to seems to be a little wide on the Third Reading of this Bill.

Mr. Sparks

I will endeavour to keep within the terms of the Bill, Mr. Speaker. I was endeavouring to point out some of the factors concerned in the operation of this Bill. I feel that much of what has been said by the right hon. Member for Aldershot (Mr. Lyttelton) was not very magnanimous, because there are cases where inquiry is necessary, not only into the industrial functioning of many of these enterprises, but also into the extent to which they are making use of scientific knowledge and technical processes in developing efficiency, which is an important factor with which the Commission will be concerned.

I think the right hon. Gentleman rather doubted some of the things that I said. He was good enough to make reference to them. I ask him to read in HANSARD what his hon. Friend the Member for Edgbaston (Sir P. Bennett) said. The hon. Member's words confirm what I said. He said that some of the enterprises concerned were financially unable to adopt certain inventions and scientific information which became available from time to time. I would only say, that there is one important invention which was not adopted by three of the late railway companies. It was adopted by the other. It is the automatic train control invention, which considerably improved the efficiency of the enterprise of transport with which it was concerned.

So I hope that this Bill will become law, and that my right hon. Friend will take the maximum advantage of the power which lies within its Clauses and that in the case of monopoly undertakings which are privately-owned in this country, and where there is a case for inquiry into their processes and practices, he will not hesitate to use the powers in the Bill to improve industrial production and enterprise in the best interests of the nation.

10.40 p.m.

Mr. N. Macpherson

This is a late hour, and I hope the hon. Member who has just spoken will forgive me if I do not follow his remarks. This is nearly quite a good Bill. The extraordinary thing to me is the relatively small amount of interest which it excites in the House, considering the immense hue and cry there has been for many years about this subject. I am making no comparison, but it is, nevertheless, an extraordinary thing. I drew attention to one or two of the faults in this Bill when it was discussed at an earlier stage; faults which, I hope, can still be corrected. The first point to which I would draw attention is that the Commission may be asked to report on practices and on remedies and preventive action, and to make recommendations. In the event of the Commission doing this, the House of Commons may disagree and pass a resolution. In my view, that amounts to an appeal from an acquittal by the Commission because, whatever may have been said about the desire not to have strictly legalistic procedure, the fact remains that, in that section of industry which has been left to private enterprise—that section graciously left to commercial effort—there is still a prejudice against those who, in the words of the Bill— so conduct their respective affairs as in any way to prevent or restrict competition … That is an appeal from an acquittal. It is an error, and I hope that it may be possible for the hon. Gentleman to tell us that it may be corected in another place.

The second point is that the Board of Trade may make an order which need not necessarily follow the recommendations of the Commission if the Commission finds that the practices are contrary to the public interest. It need not follow either the recommendations of the Commission, or indeed, so far as I can see, the House of Commons' Resolution. That is an extraordinary thing. The order must be confirmed by an affirmative Resolution of this House, but the Board of Trade need not make any order at all. This is an extraordinary thing to which I would like to draw the attention of the House. Under Clause 12, although the Board of Trade has made no order, it appears that the industries concerned are expected nevertheless to comply with the recommendations of the Commission. What is extraordinary to me is how industry is to know whether the Board of Trade agrees with these recommendations, or whether it does not; whether it intends to allow them to drop because it does not agree with them, or whether it expects industry to comply with the recommendations all the same. I hope that the hon. Gentleman will look at that point, because it seems to me to be a curious anomaly. I am not certain that the Government have decided what the functions of the Commission are to be. This "see how we get along" theory of legislation, this "government by exhortation" idea, seems to have reached a new low level.

The last point to which I wish to draw attention has already been mentioned by the Parliamentary Secretary. In Clause 2 (2) there is reference to the fact that the Board of Trade may ask for the advice of the Commission. In actual fact, what the Clause says is that it is to ask for information and assistance … It seems to me that this masks what may probably prove to be a great disadvantage. I can conceive—and I hope that the House can see—that this Commission will primarily be a commission of inquiry, but if it is allowed to become a repository of statistics, then I think the Government are really going to create a new Francken-stein monster, which will grow and grow. I hope that the Government will look into that point, because I think that it is a very serious one. If the Commission is to be effective, it must be kept small, and must not be allowed to grow and have an enormous mass of statistics and information at the beck and call of the Board of Trade. By the same token, the Commission should, in my view, consist not only of professional men but should have on it men who have had business experience. One thing which has to be avoided is that it should become representative of sectional interests.

The hon. Gentleman said that business men must be prepared to co-operate. Of course, they must, but that will depend very largely on the Government's attitude because it is the Government which is ultimately behind the Commission. If the Government show a desire to co-operate with business men and place the emphasis on co-operation and not on control, then only shall we get the best results from the Bill. If the emphasis is to be on control, we shall not get the results we all hope will be obtained from this Bill.

10.46 p.m.

Mr. Ungoed-Thomas (Llandaff and Barry)

I want to make one short observation on the legal machinery which this Bill provides, an observation which I hope will be completely untendentious. On this subject I had hoped to hear the right hon. and learned Member for West Derby (Sir D. Maxwell Fyfe), and I should have been very much more interested to have heard him than to make these observations myself.

The right hon. Member for Aldershot (Mr. Lyttelton) referred to the complexity of the circumstances with which this Commission will have to deal. Everyone appreciates that, and appreciates it very fully. The interest of this Bill, from my point of view, is that it attempts to deal with that very problem of the complexity with which we are faced. It would be a matter of extreme difficulty, if not an impossibility, to lay down in any Bill a general prohibition, and even if that could be done, it would be clearly undesirable to have the courts of this land trying to administer that particular prohibition in the intricacies and complexities of industry with which this Bill attempts to cope.

Therefore, we have this very interesting organisation which the Bill sets up. It does it, first of all, by laying down the conditions from which the danger may arise. Then it provides for an investigation of those conditions, and it then provides that, after investigating the conditions, if they are in fact undesirable, they shall be prohibited in a particular case. As far as I know, that is a new departure in the legal machinery which this country has. It is a fascinatingly interesting one, because it attempts to reconcile a general principle to particular facts, and by the process of investigation to distinguish between what is desirable and undesirable in a particular case, which is entirely different, of course, from any form of general prohibition. From a legal point of view I am sure that the workings of this machinery and Commission will be watched very closely, and I personally am convinced that it is one which will have very considerable effect upon the development of the legal machinery of this country. I wish it every possible success. I am sure it will be followed with the very greatest interest.

10.50 p.m.

Sir P. Bennett

I should not have spoken again but for the fact that the hon. Member for Acton (Mr. Sparks) quite unintentionally misquoted me. He referred to my remarks on the Report stage and suggested that I had indicated that the reason development did not take place was due to the shortage of capital. My reference was not that at all. I did not indicate that inventions were not taken up because of the shortage of capital, but because of the fact that it did not pay people to do it—which is a different thing entirely. While I am speaking, I would remind the hon. Member for Acton that the conditions which he has been laying down as reasons for this Bill—that many industries in this country are in the hands of a few people—may have nothing whatever to do with the purposes that he was suggesting, for, as manufacturing develops, the tendency is for the units to get larger and to be in fewer hands. The reason for that is the development of industry in our time.

The United States, at any rate, has plenty of laws to watch this side of the matter, and in the United States exactly the same conditions prevail as those to which the hon. Member referred—largescale production in a few hands. I might remind him that the motorcar industry in America, of which I know something, is largely in the hands of three big corporations and they are watched most carefully by the Sherman Anti-Trust Laws. There is no collusion; it is a natural development. I ask hon. Members not to be prejudiced. Let this Measure be what it is intended to be, not a witch-hunting, heresy-hunting body, but a body largely endeavouring to get to the truth. Do not let us prejudice it by suggesting a lot of malpractices in this country until they are proved. I do not believe they will be proved to exist.

10.52 p.m.

Mr. E. Fletcher

The House has been good enough to suspend the Rule and the Opposition have intimated that they are not going to oppose the Third Reading. Therefore, I do not think that any apology is needed for my saying a few words, despite the late hour. I regard this Bill as a matter of great importance to the general prosperity of the country and, in view of the speech to which we have just listened and the remarks of the right hon. Member for Aldershot (Mr. Lyttelton), I think it is incumbent on me to make a few observations which might not have been appropriate on the Report stage.

I was a little alarmed by the speech of the Parliamentary Secretary to the Board of Trade, at the relatively slow progress he envisaged the Commission would make. I was less surprised at the lack of real enthusiasm which the Opposition have displayed for this Measure. They have paid a great deal of lip service to the objective of restricting monopolistic practices, but it is noteworthy that we have had five or six Divisions today on the Report stage of this Bill. I do not think it is right to regard this as heresy-hunting or witch-hunting Measure.

Mr. Lyttelton

Have no fear. I think the Commission will get to the cinema industry very quickly.

Mr. Fletcher

That is one industry in which we have been assured of a close personal investigation—which I cordially welcome—by the President of the Board of Trade himself under an entirely different Act. To come back to this Bill, I think it is important to realise what is at stake in this Measure before the House. I regard it as of the greatest moment to the economy of the country. I think that it goes right to the root of the "malaise" which is affecting industrial Britain and which has led to the decline of our competitive position in the world. The hon. Gentleman who spoke last spoke as if everything was well with British industry, but it is not. I do not know whether his attention has been drawn to two articles in today's and yesterday's "Financial Times" under the heading "Neglect of Science," where the position of British industry today is analysed. I will quote two sentences because they are so relevant to the objects of this Bill. This article in the "Financial Times," after describing the relative failure of British industry, particularly as regards the really important industrial developments of the century, says this— The trouble was that there appeared to be no urgent need for new developments, or at least industry believed that there was no such need. The spirit of enterprise vanished and reappeared in other countries like Germany, America and Switzerland who had to conquer their markets. Thus, accelerated by a tendency to cartelisation, we slid slowly but surely into our present state which can only be described as one of technological backwardness. We now have to compete seriously with people who have been accustomed to free competition and who have built up their industries accordingly. I believe the biggest cause of our decline has been the widespread stifling of the urge to greater efficiency The object of this Measure is to assist private enterprise, not to frustrate it—to stimulate it and to remove from it those restrictive practices which have hindered its full development and have thwarted the natural genius of our scientists and inventors in the full contribution which they can and must make to the success of our nation.

I hope, therefore, that this Commission will get to work speedily and on a large scale—not in the spirit of a witch-hunt but in order to investigate the facts, make them public and bring them out into the light of day. I have no intention of pre-judging this question in any political or partisan sense. The right hon. Member for Aldershot has dealt with allegations about certain industries with which he is associated. I am not going to refer again to the electric lamp industry, but I think I may say that the publicity on that subject which marked the second Reading Debate has already produced beneficial results, and as other similar industries are investigated, equally beneficial results will be produced.

I think the House should not let this occasion pass without appreciating the kind of problem we are dealing with. May I give one specific instance the facts of which cannot be challenged because they are taken from a judicial document I was reading the other day. It happens to involve one of the most prominent industries in the country—Imperial Chemical Industries, who cannot be immune from investigation merely because of their size and reputation. This is the kind of thing which needs investigation. The facts that I am now disclosing are recorded in a judgment of the Court of Appeal.

These are the facts. A company known as Magnesium Electron, Ltd., desired to manufacture magnesium in this country instead of importing it from Germany. The company were proposing to extract magnesium from magnesite by an electrical process in which it was necessary to use chlorine. The company had, therefore, to be assured of a supply of chlorine. The only large manufacturers were I.C.I. and they quoted a quite prohibitive price. Fortunately, however, as the report indicates, the company found a Mr. Dennis who made chlorine by an electrolytic process and they proceeded to negotiate appropriate arrangements with him.

One of the by-products of the manufacture of chlorine is caustic soda—and by the sale of caustic soda the cost of the manufacture of chlorine can be considerably reduced. But I.C.I. are vitally interested in caustic soda. They took alarm and according to the report Lord McGowan himself intervened to stop the proposed arrangements with Mr. Dennis. They told Magnesium Elektron his scheme would not work, because I.C.I. were determined that no new company should, to quote the official report, go into the caustic soda market." I.C.I. therefore agreed to supply all the chlorine required. They quoted the prohibitive price of £10 a ton, but at the same time they entered into a subsidiary arrangement whereby Magnesium Elektron were granted a rebate of £7 10s. 0d. a ton provided they refrained from making chlorine or caustic soda. They received in that way a payment of £57,000 and the question in dispute was whether on that they were liable to pay tax on that amount. They contended that it was not a trading profit, and that they ought not to have to pay tax on it. The Commissioners decided that they were right, and that it was not a profit earned in trading. The matter went to the Court of Appeal, which decided otherwise.

As emerges from this report, the action of a monopolistic concern had the effect of thwarting and frustrating what would probably have been a profitable source of new enterprise and new endeavour in this country. That is the kind of thing that wants investigating on a large scale. It is essential to the healthy, progressive development of British industry that restrictions of this kind on new enterprises should be investigated. I urge the President of the Board of Trade to say, not in any carping or partisan spirit, or to hamper private enterprise, but to assist it and save it from itself and its own worst abuses and excesses, that the powers given to the Board of Trade by this Measure and the powers of the Commission will be used as fully, and as speedily as possible.

11.2 p.m.

Mr. W. Shepherd

The hon. Member for East Islington (Mr. E. Fletcher) has shifted the attack from the lamps of the Second Reading to the caustic soda of the Third Reading. I thought he was a little peevish in the complaint he made that a number of Divisions had been lost by hon. Members on this side. Had those Divisions been more successful, this Bill would have been improved. I still regret that this Bill is going through with a name which is misleading, and to have had that Amendment accepted would have been to the general benefit. I regret that the Government have not had the confidence in their own judgment to accept other Amendments which would have materially improved the Bill. The over-riding of the Commission by the House of Commons will not improve the Commission's status, and it would have been a reasonable gesture to have given the Commission independence. The Government also protested when we moved an Amendment to include State monopolies under this Bill. They preferred the narrow, party point of view to what I consider are the wider interests of the nation. This could have been a much better Bill than it is, if some of the Amendments moved from this side had been accepted.

I want to ask the President of the Board of Trade if he will define the position in regard to patents under this Bill. In Committee we were unable to get a complete definition of the position because, one must confess, few of us had any real knowledge of patent law. I want to ask the right hon. Gentleman whether he is satisfied that the words in the Bill make it clear that no action against a patentee will be taken under this Bill, but that all such action will be taken under the Patents Act, or the new Act that is to be brought in. It is an important matter of principle that a man who is granted a monopoly under a patent should not be attacked in his rights under some other statute. If one is going to limit his activities, one should do so under the statute which grants his patent. I hope the right hon. Gentleman will assure us that that is the case under the wording of this Bill.

This Bill is a useful measure, and the fact that we hope to avoid the legal tangles that apply under the Sherman Laws in the United States is wholly desirable. The way we have chosen is the British way, which will bring results much more easily and satisfactorily than the complicated legal method which has been tried elsewhere. I do hope that it will bring an end to the continuous talk about the evils of monopolies. Whether we like it or whether we do not like it, the fact is that the whole tendency of modern industry is to have units joining in large-scale aggregations. It is no good quoting, as the hon. Member for Acton (Mr. Sparks) did, a long sequence of industries of which percentages of 10, 20, 30, or whatever it may be, are held in the hands of a few people. That is really of little or no significance. What really matters is whether the actions of those individuals in controlling those industries are in the public interest or against the public interest.

We can have one of three things. We can have unbridled competition, we can have complete control by the State, or we can aim at some midway course in which we forsake unbridled competition. Obviously, unbridled competition has gone by the board in a wide area in industry. We can aim at a state of affairs in which there is a delicate balance, in which we have as much competition as is possible with stability. It is this question of the balance between competition and stability which the Commission will have to decide. That is a very great problem indeed. It is the problem of the twentieth century—how to combine progress and efficiency with stability. Therefore, I hope that hon. Members opposite will do some service to the aims of this Bill by refraining from wild accusations, and that they will realise that the public interest does not necessarily lie in smashing large-scale units.

I believe that this Bill will produce great benefits, if only from the point of view of the publicity that attaches to it. The vast majority of the industries of this country are conducted by men of great responsibility who want to serve a wider social purpose, and they will not be slow to respond to any lead that is given. For those reasons, I am glad to be able to say on Third Reading that we on this side have done something to improve the Bill, and we hope the Bill will prove successful in operation.

11.7 p.m.

Sir D. Maxwell Fyfe

I should like, first, in the very short time I shall occupy on Third Reading, to deal with the points of agreement that all quarters of the House have found in dealing with this matter. I think that the President will be as surprised as I am that the method of inquiry which we have adopted in this Bill, and which recommended itself independently to both of us—because I had committed the indiscretion of putting my views in black and white before the Bill was brought in—should have gone through these weeks of examination with, I believe, no criticism, as being the best method applicable in this country. That is a really remarkable thing. The second point of agreement we have reached, of which I should like to remind the House, is in the definition of what is the public interest, and, broadly, in the criteria which have been applied in that regard. I should like again to say that I appreciate the flexibility of mind which the right hon. Gentleman has shown in adopting the suggestion that was made to him on Second Reading.

Now I come to the third point on which we are agreed, and on which I should like the House, in leaving this Bill, to express its opinion—if the right hon. Gentleman agrees with what I have to say. We have left great flexibility in procedure to the Commission. Whether that will be a success depends on the calibre of the persons we get to serve on the Commission. I should like it to go out from the House that we believe that service on this Commission will be a very high public service during the next few years. If we get a response to that feeling, there will be a great chance of this Measure achieving its aim.

There are, of course, two points on which our criticism has been centred. I feel that we have not seen the end of these points, although the method of approach may be different because of the provisions of this Bill. I still regret the provision in the Bill which excludes the examination of statutory monopolies, even in the limited form which I suggested this afternoon. I feel, as I said, that we must find, if we are going to do our duty by efficiency and production during the next few years, a method of examining and testing the efficiency of stautory monopolies. If this method is not right, as the House, contrary to my view has decided, then it only leaves us with the duty of finding another method. We cannot leave these great fields where the check of the consumers' choice has passed without finding a quick and effective method of applying an efficient audit to them. That problem remains, although we have said it does not come within this field.

The other matter, into which I am not going at any length, is that it is regrettable, from the point of view of the Commission and the possible imputations of political prejudice, that we have given the House of Commons the right to override the Commission. As I said, this point has been discussed, and I want only to express this as being one of the great difficulties as I see it. The hon. and learned Member for Llandaff and Barry (Mr. Ungoed-Thomas) raised another most interesting point which might well have been worthy of discussion. The remedy ad hunc, if I might use the phrase, is a new departure because it is using subsidiary legislation to deal with a specific individual firm, which is a new experiment in the law. Again, I am not at this stage entering into a discussion on the point, but I should like him to know that I appreciate the thought with which he approached that point.

What is our final view as we bid farewell to the Bill? We can congratulate ourselves that we have tried to make a common approach to a subject which we all think important. I hope hon. Gentlemen opposite appreciate that we have tried to make our contribution. There are bound to be points where differences arise, but these have been differences of method which have not, in my view, blurred the essential unity of our aim. The other thing we have made clear is that in all sides of the House we are determined that interferences with production and expansionist economy will be tackled.

As I have said, we have been ready to agree with and join in the first stage. That is our special responsibility, because we have advocated, and shall continue to advocate with unabated enthusiasm, the principles of private enterprise in this House and in the country. Despite that, we are ready that the first contribution should come from private enterprise. We agree that that is a proper way of making a beginning, but we have still the responsibility of dealing with restrictive practices which, according to the White Paper, still remain on the other side of industry. We have the responsibility of dealing with nationalised industry. I hope and trust that these difficulties will be approached with the same resolution and good feeling as we have tried to deal with the difficulties covered by the field of this Bill.

11.16 p.m.

Mr. Wilson

I do not propose to detain the House for more than a few minutes, but I would like to say one or two words of benediction, if I may use the phrase, as the Bill leaves here for another place. It is a Bill which is of very great importance to the industrial life of the country. It is a Bill on whose principles all parties in this House have been agreed. For a long time now all parties have said that it is essential to take power to deal with the possible abuse of monopoly, or the possible abuse of price-fixing arrangements between otherwise sovereign firms. What was difficult, up to a few months ago, was to decide how we were going to deal with this problem. In deciding how to do this we had, of course, the experience of many other countries on which to draw. We had the benefit of a considerable amount of thought which had been given to this problem by Ministers of all parties in the Coalition Government during the war—the right hon. Member for Aldershot (Mr. Lyttelton) played not a small part in that in the concluding months of the war—and the Measure which we brought before the House for a Second Reading just after Easter was based on our conception of the best way of handling this problem.

It is a procedure which in many cases is new, as the hon. and learned Member for Llandaff and Barry (Mr. Ungoed-Thomas) said. First of all, we had to define the conditions of what, for want of a better phrase so far, we have roughly described as "monopoly," though "monopoly" does not fit the conditions very well, in which the Board of Trade might refer the problem to the Commission for a report. We all recognise that the existence of these conditions, under which one-third of the supply is supplied by one firm or group of firms acting together, does not necessarily involve harm to the consumers, to other producers, or to economic society in general. But it does hold the power to do harm. Therefore, the first thing is to have this inquiry, to "proceed by the method of inquiry," as the right hon. Gentleman said. It is then for the Commission to recommend whether, in fact, the public interest is prejudiced by the particular problem referred to it.

But we have gone one stage further, and in this we have departed from all the practice and recommendation of the last 20 or 30 years. We have provided powers in the Bill to deal with the harm that may have resulted from the conditions which the Commission find to exist. We have not provided power to "bust" a trust or "bust" a monopoly, as is done, for instance, in Transatlantic legislation. As the hon. Member for Bucklow (Mr. Shepherd) said, units in many industries are getting larger and larger, because this is necessary for technical purposes. They may be efficient. It may be true that in many industries the existence of a large number of small units would be highly inefficient on technical grounds. Therefore we should not seek to "bust" a trust merely because it is large, merely because it is responsible for one-third, or even for 100 per cent., of the production of certain goods in this country. But we do recognise that a monopoly of that kind has the power to do harm, and therefore we must have the power to have an inquiry and to deal with any evils which an inquiry may show to exist.

It has been in the minds of hon. Members in all parts of the House that whereas that is true of a monopoly—a technical organisation which has the advantages to which there has been reference—it is perhaps more doubtful whether some of the price-fixing organisations may not have all the evils associated with a monopoly, and perhaps none, or very few, of the good qualities which may be associated with a monopoly. That is why I think the House has, in all its discussions, attached more weight to the powers to deal with price-fixing associations than to the powers to deal with monopolies proper. That is the procedure laid down in the Bill.

It is, as the hon. and learned Member for Llandaff and Barry said, a new procedure. It is one which we shall all watch with great interest, not only because of what it may achieve in respect of these monopolies, but because it is another new technique in our political and economic life, and indeed, almost in our judicial life. The Bill which was introduced, based on these principles, a few weeks ago was, I think, on the whole well received by hon. Members in all parts of the House. It was on similar lines to those recommended by the right hon. and learned Gentleman.

I want to thank hon. Members in all parts of the House for the constructive way they treated this Bill on the Committee stage, and, indeed, on the Report stage as well. My hon. Friends who have seen it through the more difficult parts of the Committee stage, particularly the hon. Member for Uxbridge (Mr. Beswick), the hon. Member for Peterborough (Mr. Tiffany), the hon. Member for East Ham, North (Mr. Daines), have had their hearts in this Bill from the very first, and have striven to improve it and to get the best out of it. But equally I would wish to thank the right hon. and learned Member for West Derby (Sir D. Maxwell Fyfe) and the right hon. Member for Aldershot, and their colleagues, for the helpful way in which they have seen this Bill through. The right hon. and learned Gentleman has his heart in this Bill. Although we have strong differences upon the points on which we have voted tonight, the right hon. and learned Gentleman has at every stage tried to make the Measure as effective as possible.

I think the result of the Committee stage and the Report stage is that we have improved the Bill considerably as compared with its state on Second Reading. It certainly would not have been improved if we had accepted all the Opposition Amendments, whether on the Committee stage or the Report stage; but certainly many of the Amendments moved by hon. Members on either side of the House, or of the Committee, have had the effect of greatly improving the Bill. I am particularly glad that the right hon. and learned Gentleman persuaded us to take courage and attempt to define the public interest, as we have done.

I am not pretending that the Bill now is perfect. It is in many respects experimental, and we must see how it goes. We shall watch it with great interest. One of the respects in which it is least perfect—and this is something on which we are all agreed—is the name of the Commission and the name of the Bill. I have been giving further thought to this. My appeals for assistance in this matter have not produced the results which I had hoped they would. Tonight I left the competition open. I was hoping that some benevolent person would perhaps offer a small prize to anyone who could find the answer; but until that answer is found I feel that the best suggestion I have so far come across is one of which I myself thought tonight. With all diffidence, and conscious of its shortcomings, I put it forward. I think it is better than the existing, title, and that it is better than the one put forward from the opposite side of the House. I think it would certainly be more accurate and that it is not very clumsy. I would propose that, in another place, it may be seen fit to christen it the "Monopolies and Restrictive Practices Commission." After all, that is what it is; its object is to deal with monopolies and restrictive practices. "Monopolies" by itself is too short, but also "restrictive practices" is a phrase which, alone, is too short. It may probably come to be known as the "M. and R.P.C." or, perhaps more probably, just the "Monopolies Commission." That is the title which might commend itself to the people who will have to work it after the Bill leaves us tonight.

Whatever the name of the Commission, I shall try to nominate the very best people to serve on it. I most fully agree with the sentiment expressed by the right hon. and learned Gentleman when he said that those who were asked to serve on it should consider it as one of the most important and highest forms of public service. I appreciate what he said. I have no doubt that, when it is appointed, we shall watch its proceedings; we shall see how it goes, and I think that it will be found to be of inestimable value in the work which it will have to do. It will not, as has been suggested, be starved of work; there is plenty that we can find for it to do during the first year. I do not think that this Commission, as the hon. Member for Edgbaston (Sir P. Bennett) claimed, will spend its time witch hunting or heresy hunting. It has a real job of work to do in inquiring into what has held back the progress which this country wants. It may well be that it will discover one or two "rackets." I am not necessarily thinking of the black market, but of cases of excessive prices, and other things.

Whatever it discovers, I think there is one thing on which we are all agreed, and that is the danger to our economic life, not from any racketeering or from any search for excessive profits, but from the inertia and "feather-bedding" which some firms may possibly be guilty of under the protection of price-fixing arrangements. Whether the nation could have afforded this in days gone by is a matter of controversy, but whether the nation can afford it today is no matter of argument at all. We cannot afford this sort of thing on one side of industry or another. The measures we have taken in this Bill will be applied very much towards weeding out lack of enterprise connected with monopolistic conditions and restrictive practices, because that is something demanding attention.

The House has been so eminently fair in its consideration of the Bill that I expect an unopposed Third Reading tonight. We shall watch the progress of the Bill in another place and its working when it passes to industry, and I feel confident that it will prove to be a Measure that is well worth while.