§ 10.1 p.m.
§ Mr. Keeling (Twickenham)
I beg to move,That an humble Address be presented to His Majesty, praying that the Order, dated 16th May, 1949, entitled the Domestic Pottery (Maximum Prices) (Amendment No. 2) Order, 1949 (S.I., 1949, No. 928), a copy of which was laid before this House on 17th May, be annulled.I think that this is the queerest Statutory Instrument which has ever been laid before the House. No wonder that the usual explanatory memorandum is not found attached to the order. Once again, discretion has proved the better part of valour.
Orders of 1947 and 1948 fixed maximum prices for domestic pottery, and the order which we are discussing tonight grants a certain exemption from this price control. What is this exemption? One might have expected to have found that certain classes of pottery were exempted, or, alternatively, that the order raised or reduced the maximum prices for some or all pottery. But it does none of these things. Instead, it removes all control from domestic pottery bought by a particular buyer, namely, a Government Department. The Government, on the one hand, and their suppliers, on the other, are free under this order to disregard the maximum prices for all pottery completely.
Well, my first submission is that this order is ultra vires. I say that no power is given by the governing Act, the Goods and Services (Price Control) Act, 1941, to grant exemption from price control to a particular buyer. Section 1 of that Act gives the Board of Trade the power to fix the maximum prices to be charged—and these are the important words—… in the course of a business of any class specified in the Order …Now, it is perfectly true that Section 17 (4) of the Act says:The definition … of a class of business may be framed by reference to any circumstances whatsoever.2471 But I submit that that very wide provision cannot give authority to define as a class of business what is not, in fact, a class of business at all. Let me give the House a simple example. Suppose a regional officer of the Ministry of Works wants to buy a few pieces of earthenware to complete the equipment of a Government hostel. He walks into a china shop and buys them. Can that purchase, just because the purchaser is a Government official, be called a class of business? It is just an ordinary transaction such as happens ten thousand times a day. It is not a class of business at all. Yet, under this order, a shopkeeper can charge, and a Government official can pay, any price he likes.
I contend that the phrase "class of business" refers to a business carried on either by the manufacturer or by the seller, and it cannot possibly mean a business carried on by the buyer. If the Act had meant that one price could be charged to a particular buyer and a higher price to another, surely it would have said so. If I am right in claiming that this order is ultra vires, it follows that any seller of domestic pottery to a Government Department at a higher price than the controlled price fixed by previous orders is committing an offence for which he can be sent to seven years' penal servitude.
Even if I am wrong about that, and even if the order is valid, I still say that it is open to very grave objection. It seems to me to be a flagrant breach of the principles laid down in the White Paper on Personal Incomes, Costs and Prices, which urged that prices should be reduced, or, at any rate, not increased. In introducing his Budget on 6th April of this year, the Chancellor of the Exchequer congratulated those who had responded to his appeal for restraint made in the White Paper, or rather, I think, it was his predecessor's appeal. Could he have known on 6th April that at that very moment one of his colleagues—the Minister of Works, whom I am glad to see here, or whatever other Department is involved and is going to benefit by this order—was contemplating an assault on the principles of the White Paper?
It is true that these higher prices can only be charged to one buyer—the Government; but I suggest that to allow 2472 that to one buyer strengthens the case for higher prices for all buyers. In other words, a rise in price to be paid by the Government is a spur to a general rise in the price of that commodity, and that is contrary to the general policy of the Government. Only yesterday we were told by the Chancellor of the Exchequer that the existing policy to hold prices must be vigorously pursued, yet here is a Government Department which is deaf to that appeal.
What is the motive of this departure from the White Paper? I think it is clear that the motive is to get priority for the Government in buying pottery. That is precisely the motive of the buyer in the ordinary black market, and it is not too much to say that the Government by this order are legalising the black market, into which they themselves propose to enter, or rather did enter on 18th May, when this order came into force.
Surely, if the prices for domestic pottery fixed by the previous orders are not high enough to make production reasonably possible, they ought to be increased; but if the controlled prices give sufficient margin to a manufacturer for production to go on, then these three questions arise. The first is: Why should the manufacturer's profit be increased in respect of supplies to the Government? The second is: Why should the taxpayer who pays for the supplies ordered by the Government be mulcted? The third is: Why should the Government get an advantage over the ordinary buyer such as the housewife or the hotel?
My conclusion is that an order to legalise a "black market" for the benefit of the Government and to the prejudice of the public is a very bad order indeed. There may be a case for removing pottery from price control altogether. I express no opinion on that, because I do not think it would be in order to do so; but I do say that there is no justification for keeping a price control for one buyer and not for all.
§ 10.11 p.m.
§ Colonel J. R. H. Hutchison (Glasgow. Central)
I beg to second the Motion.
I wish to support what has been said by my hon. Friend so clearly and succinctly in a speech covering so many objections, against what I think is the most objectionable order I have ever set eyes 2473 on. If it were customary to give titles to orders, this one might have been described—because there is no explanatory memorandum to tell us anything about it—as "Government entitlement to break own pottery price lists", and it might have added "and to enter the black market".
How far is this principle to spread? To begin with, under the order there appears to be no limit to the amount that any Government Department may so purchase; and there appears to be nothing to prevent other articles from being bought by Government Departments in the same way. If we once accept this principle, the Minister of Civil Aviation for the corporations and the Minister of Transport for the railways can buy the pottery they need, and by an extension of the principle the other things they need, at any price they like to pay. Indeed, they could offer a price more attractive than the public can offer and sweep the market bare of these goods. They could make it impossible, if this principle were extended, for other people to get certain articles at controlled prices.
If prices are too low, this is not the way to enable the manufacturer to get a living out of manufacturing this pottery. The proper way to do it is to raise the whole range of prices and let the Government stand four-square with any other purchaser of goods. I had thought—and I understood it was an accepted principle in this House—that no nationalised industry was to get any benefits or advantages compared with private enterprise placed in the same situation. That has run as a constant current through the proceedings on every nationalisation Bill in which I have had the privilege of taking part. But here, by the back door, that principle is abolished.
Another objection, as it seems to me, is that this excess price is coming out of the taxpayers' pockets; true, only in a small degree, but it is a degree that might be multiplied, and we have not had such a successful history in nationalisation as to entitle us to spend extra and excessive money, even on small items of this kind, in nationalised industries. Notice what else has happened. It really means that if any of these goods are left for the ordinary purchaser in the outside market, the nationalised industries and the Government are subsidising that outside purchaser 2474 to get goods cheaper than he would otherwise be able to do. From whatever angle we look at this order it is full of vice. I understand that my hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) will deal with the legality of the order, but I must say that it seems also to be of doubtful legality. With such a mixed and unsatisfactory parentage, I suggest that it be taken away and torn up.
§ 10.15 p.m.
§ Mr. A. Edward Davies (Burslem)
From what the hon. Gentlemen opposite have said, there apears to be some misapprehension about the function of this order. Although I represent a pottery constituency, I have no special interest in the matter beyond that, and I can say at the outset of my remarks that this order is supported by both the manufacturers and the employees. It might well be argued that that is no substantial reason why this House should accept the order. I can see that there may be something in that point, but as I develop my argument I hope I shall be able to dismiss the fears of hon. Gentlemen opposite. It is not the corporate State that we are discussing tonight.
§ Mr. Davies
The hon. and gallant Member for Central Glasgow (Colonel Hutchison), whom I do not see in his place, said that this was a matter of giving nationalised industries some special advantage over the ordinary purchaser. The hon. Member for Twickenham (Mr. Keeling) said that it gave the Government some priority and was closely akin to black-market practice. The first thing we have to bear in mind is that the prices order which was made was not intended to cover the kind of crockery with which this order is dealing. I believe it arose out of a request from the Ministry of Works for a certain type of pottery for Departmental establishments which would have no proper place in the ordinary civilian market; in fact, the Ministry of Works were the buying agent for the Admiralty and the War Office and for other well-established Government Departments, and not for any of the nationalised industries to which the hon. Gentleman referred.
The production of the pottery which those Departments use requires special 2475 preparation and involves extra work, and the matter has been discussed between the employers and the operatives engaged in the production of this type of pottery, which has all the insignia and special requirements necessary to Departmental ware. Therefore, it is not difficult to see that it is not within the ordinary range of cups and saucers, such as the ordinary consumer is free to buy, the undecorated ware of this country. One does not go into Lawley's in Regent Street, for example, and buy cups which were made for the Admiralty or designed for other special purposes.
§ Mr. Keeling
But does not the hon. Member realise that this order exempts the Government from price control for all domestic crockery without exception? If the hon. Member is correct in saying that it is intended to apply only to these peculiar kinds of pottery, I hope he will join me in opposing the order, because it does not say so.
§ Mr. Davies
—and the practice of the Departments; that is to say, the Departments are not satisfied to buy the ordinary products made available to the civilian market, but require special products. If it were the fact that the ordinary products would meet their case, certainly I would agree with the hon. Gentleman that they ought to come within the ambit of price control, but it is well established—for all I know there may have been an omission in the compilation of the original price schedule—that account should be taken of the requirements of such people as the Ministry of Works, who put out special jobs to be done which require the laying out of all kinds of preparatory work and special skill in their execution.
As I understand the position, complaint was made that the Board of Trade or the Ministry of Works could not get the pottery which they had been used to having. It is not a new development and it is not intended that there should be a wide extension of the previous buying. It is only so that they may renew their supplies in respect of Admiralty and War Office requirements and, when the manufacturers 2476 were approached, the prices laid down in the schedule were considered not to be economic and remunerative in view of the special work called for. That is a very simple matter, and I hope——
§ Sir J. Mellor
Would the hon. Member agree, therefore, that the order goes far wider than is necessary?
§ Mr. Davies
I concede that to anyone who reads the order without having some knowledge of the background, it may be a little misleading. I am giving hon. Gentlemen opposite the full information as it has been supplied to me upon request. I have not been lobbied in any way. As a matter of general interest, I asked what had led up to this position. It was that a request was made to the industry for certain pottery, that the pottery manufacturers did not agree with the price suggested, and that it was shown that although they were not being paid at the ceiling price for ordinary pottery they had a reasonable case to be paid a moderate price. I hope that my hon. Friend the Parliamentary Secretary to the Board of Trade will indicate what is involved in terms of extra cost, for the position is not one which could be called a "free for all," as the hon. Member for Twickenham would seem to indicate and as, I agree, the order would seem to convey.
I understand that in the course of arrangements a very modest and firm price has been arranged which will provide merely for the contingency I have outlined. Knowing something of the industry, I am satisfied from an examination of the price schedules that the price which has been arranged does not give any special advantage either to the manufacturers on the one hand, or to the employees, on the other hand. Nor does it give anybody such as Government Departments, any special advantage in competing for the limited amount of pottery ware which is available to the general public. I am satisfied that this is a genuine attempt to rectify what seems to me to have been an omission, and that it is nothing more. I hope that my explanation will at least help to make the position a little clearer.
§ 10.22 p.m.
§ Dr. Barnett Stross (Hanley)
It might help the House if I put forward one very short point. In doing so I, too, disclaim 2477 any interest whatever in the industry, although I am Member for part of the Stoke district, which is a pottery area. The industry has a term "the run of the kiln," and the greater part of pottery ware sold today is run-of-the-kiln ware; that is to say, virtually all of it, unless it has been badly faulted, goes on to the market. At a time like this, when there is a very great demand, one can well imagine that unless pottery is very badly faulted it will be sold. The Government Departments—this is what I think; I have no authority for saying it—ask for a very careful selection and faulting of the ware before they will buy it. They demand a standard which is higher than the civilian population usually gets.
§ Dr. Stross
They usually get better standards with things such as uniforms and armaments and, therefore, with pottery. It would be reasonable to say that manufacturers and workers are right in contending that, with the number of rejects that are inevitable when such a high standard is required from them, they cannot produce this pottery as cheaply as they would produce similar ware which goes to the rest of the population. That is the only point I want to put forward, except to say that I agree heartily with my hon. Friend the Member for Burslem (Mr. Edward Davies) in all that he has said.
§ 10.25 p.m.
§ Sir John Mellor (Sutton Coldfield)
I think the two hon. Members opposite have at least made it clear that this order goes far wider than is necessary, because it is only required to affect a limited range of goods, whereas in the terms of the order it covers a very much wider range. Apart from supporting the general case put forward by my hon. Friend the Member for Twickenham (Mr. Keeling), I wish to emphasise the point about the order being ultra vires. I can only assume that the Government would rely on Section 1 (2) of the Act of 1941, which provides that:Any such order may fix different maximum prices to be charged in the course of businesses of different classes for the same description goods.I can only assume that the Government intend to argue that the reference to "businesses of different classes" covers the different classes of purchasers and I 2478 join my hon. Friend in saying that that could never have been intended by Parliament and could not be a correct interpretation of the Statute. I submit that different classes of business could have nothing to do with the purchasers of the article in the sense that one purchaser should be treated differently from another. Different classes of business would have to do perhaps with the nature of the relationship between vendors and purchasers in the sense of the transaction being of a retail character, or of a wholesale character. Whether the transaction was on the cash or credit basis might be a relevant matter in considering the question of different classes of business. Again, whether the sale was of a single article or of a small quantity or a very large quantity might be a distinction which would be involved in a consideration of different classes of business.
In my submission, the words of the Act are quite clear that, whatever may be intended by the expression, it could not possibly justify treating the Government as a purchaser differently from a private individual. There is nothing in the Act to warrant a differential price when the Government is the purchaser.
§ 10.27 p.m.
§ The Parliamentary Secretary to the Board of Trade (Mr. John Edwards)
I am sorry that the hon. Member who moved the Prayer should have spoken in such exaggerated terms. Clearly there are matters here which it was proper and appropriate for hon. Members to raise, but to describe this order as "legalising the black market" is, to say the least, precipitate and not justified by the obviously superficial examination which hon. Members have made.
The hon. Member who moved the Prayer appeared to take exception to the fact that there was no explanatory note——
§ Mr. Edwards
The hon. Member says "Hear, hear." Let me point out to him that the Select Committee on Statutory Instruments recommended that the order should be in this form wherever possible. In other words, that we should put into the context of the order all the explanation that was needed, whenever we could, and I do not believe anyone reading the 2479 order can fail to agree that if it is read carefully one can understand what it says.
§ Mr. Lennox-Boyd
While the Select Committee, to the best of my recollection, recommended that the order should be intelligible, as they were dealing with people who might find it difficult to follow complicated phraseology—and that applies to both side of the House—they also recommended that, however intelligible it was, there should also be an explanatory memorandum, which has been the universal practice; an explanatory memorandum which could be understood by the average layman.
§ Mr. Edwards
I do not propose to pursue the point. This order is easily understandable. It does not contain technical terms and we have acted strictly within the recommendation of the Select Committee in this matter.
More substantially, it is argued that this order is ultra vires. I will content myself by saying that I do not believe that to be true. I think if the hon. Gentlemen who made that allegation had pursued their inquiries and researches a little farther, they would have come to the same conclusion. This order is made not only under Section 1, but under Section 18 and, being made under Section 18, it brings into account the Act of 1939 and gives us the powers of Section 19 of the 1939 Act. I am wholly satisfied that if this is considered in terms of the totality of the powers under which it is made, it is intra vires, and wholly and completely valid. However, it is not for me to pose as a legal expert on these matters, for I am a layman like so many other hon. Members, but I have had the benefit of advice on the point and I would give, so far as I am advised, the assurance that this is not ultra vires.
May I explain how all this came about? It is common knowledge that the Ministry of Works buy pottery. They have always done so; and their buying of pottery has extended, during the war and since, to buying for the Service Departments as well as for their own requirements. Their demands are something in the order of 250,000 pieces of pottery a week. A situation arose in which the Ministry of Works were in difficulties in getting pottery because of the price they were able to pay. The difficulty was that under 2480 the order, manufacturers were prohibited from charging for goods wanted by the Ministry more than was charged the Ministry for sales for the two months ending January, 1948. If there was more than one sale during that period, incidentally, then the ruling price was the lowest price. These prices at the time were somewhat lower than the manufacturers could get on an average for the supply of similar goods to the distributive trade for sale to the public. Therefore, some way had to be found by which the Ministry's contract prices could be brought into line, but, as the order stood before this amendment was made, that was not possible.
May I explain to the House how this arose. By and large, it is true to say that the categories of pottery with which we are concerned, when they are sold in the civilian market, are brought within the schedules to the order and are marked with the appropriate price group letters or symbols. But when the manufacturers make these articles for sale in bulk to a Government department they are not going to the trouble of putting price group letters on the pottery; and merely because of that fact, although the articles were similar in kind for the most part to the articles which are in the scheduled categories, and for no other reason, as I understand it, the articles which the Ministry of Works bought dropped into the "standstill" arrangements which I have already described.
Therefore, some way had to be found by which we could bring the prices which the Ministry of Works could pay into line with the prices that were being paid by bulk purchasers for similar articles. That is all we are concerned to do. We were solely concerned to put the Ministry of Works in the same position as other bulk purchasers. The Ministry of Works are not likely just to waste money on these purchases, but if they were to get the supplies, they had to be prepared to pay approximately the same prices as the other bulk purchasers were paying. There was, of course, consideration of how this should be done. The simplest thing to do was to restore the position as it was before 1947, that is to say, to exclude supplies of pottery to Government departments from price control.
Hon. Members have talked as though this was something new. It is, in fact, 2481 almost standard practice and I will quote only one or two orders, and give the references, where this has happened. There are the Furniture (Maximum Prices and Charges) Order, 1948 (S.I. 1948, No. 2624), Article 1 (2) (v); the Miscellaneous Goods (Maximum Prices) (Amendment) Order, 1948 (S.I. 1948, No. 776), Article 1 (2) (c); the General Apparel, Furnishing and Textiles (Manufacturers' Maximum Prices and Charges) Order, 1949 (S.I. 1949, No. 89), Article 1 (2) (iii); the General Hardware and Ironmongery (Maximum Prices) Order, 1947 (S.R. & 0. 1947, No. 341), Schedule Part II. These are examples to show that, as a matter of fact, it was most exceptional for there to be an order of this kind where Government purchasers were likely to be involved which did not exclude Government buying.
Therefore, I think that hon. Members are making rather heavy weather of it when there is, in fact, this generality of exemptions covering a wide field. Even in this particular field it was so until 1947, and considering the care with which Government Departments have to conduct their purchases, it was, we thought, on the whole better to keep to the general practice in this matter than to try to evolve some new system. What has the final outcome been? It has been to put the Ministry of Works in precisely the same competitive position as the bulk purchaser. At present the prices which the Ministry of Works are paying are about 3½ per cent. above what they paid six months ago, and are equal, by and large, to the terms now obtained by bulk purchasers from the pottery manufacturers.
In view of that explanation, which I think covers all the points that have been raised tonight, I hope that we shall hear a little less of the kind of thing which we have heard from the hon. Gentleman on the Front Bench opposite, who interposed the remark, "It is a racket all right." This is the kind of thing which has been going on all the time. It is the simplest way to handle the problem and to see that exorbitant prices are not paid. I hope, therefore, that this Prayer will be withdrawn.
§ 10.39 p.m.
§ Mr. Lennox-Boyd (Mid-Bedford)
The hon. Gentleman says that this has been going on all the time, but the precedents 2482 which he cited began only in 1947. Of those which he gave to the House, the first was the precedent in the hardware industry, the order of 1947; the second, though this did not follow chronologically in his remarks, was the miscellaneous goods order in 1948; the third was the order dealing with furniture in 1948, and the fourth was the order dealing with cloth for furnishings in 1949. The history of England has gone on for a long time. To say that things which started only in 1947 have always gone on is, I think, attributing historical importance to the present temporary Administration which history will not give to His Majesty's Government at the moment.
§ Mr. J. Edwards
I hoped that I had made it clear that I was citing certain examples to illustrate the general point. The hon. Gentleman is not entitled to base his argument merely on a number of examples which I cited.
§ Mr. Lennox-Boyd
If the Parliamentary Secretary can give us any illustration of this extraordinary practice being followed by any previous Government, I shall be very interested to hear what he has to say.
§ Mr. Edwards
In the case of pottery, before we went over to the method in the 1947 order, sales to Government Departments were exempt from the control.
§ Mr. Lennox-Boyd
The hon. Gentleman talks of illustrations, but every illustration is subsequent to the war. One of the charges which we level against his administration is that all sorts of improper practices are being perpetuated to give in peace time control conceived and carried out in war time, and all sorts of arguments are enlisted by the hon. Gentleman to say that these are ordinary practices of our democracy.
§ Mr. Edwards
But there was no price control before the war. It started, if I remember aright, in 1941, and concerning the period ever since then, what I have said is true.
§ Mr. Lennox-Boyd
One of the points which the hon. Gentleman seems to forget is that when our people were asked to put up with controls, and all the difficulties which they entail, during the war, they were told that Government Departments and private individuals would rank equally where it was a question of buying 2483 goods which were in short supply. Here we are dealing, as the hon. Member for Burslem (Mr. Edward Davies) says, with a scarce kind of pottery. Our contention is that, in order to get hold of an unfair amount of this limited type of pottery, the Government are paying more than anybody else pays. We do feel very strongly about this order, an order which is of very deep importance in its implications.
§ Mr. Edwards
It just is not true that the Government are paying any more than the average bulk buyer, and if the hon. Gentleman disputes that statement, I should be very glad if he would produce some evidence.
§ Mr. Lennox-Boyd
One fact which the putting down of this Prayer has established is that all bulk buyers are able to disregard these price orders. If all buyers on a large scale are in a privileged position, then the Government have a moderately strong case; but so far as we know, the Government, by this order, are in a privileged position. If what I have just contended is wrong, then surely there is all the more reason for having an explanatory memorandum. If this memorandum had made it plain that all this order seeks to do is to put the Government in the same position as other bulk buyers, it would have been a very proper thing to have put in. It is not there; but sub-paragraph (2) (b) states:purchased by a Government Department, in respect of which the seller shall have notice in writing, at or before time of supply, that they were being so purchased.We are only led to the conclusion that the Government Departments are being privileged. If the hon. Gentleman says that other bulk buyers on a large scale know of the practice by which the big monopolies—which the Government say they are always out to destroy—or combines are free to buy pottery on these privileged terms, then I will agree that much of our case falls to the ground.
§ Mr. Edwards
I admit that if one takes a Government Department out of price control, then it is placed in a privileged position; but what I contest is the claim that that privilege is abused in any way, and that the price paid by the Ministry of Works is about the average paid by bulk buyers.
§ Mr. Lennox-Boyd
It is all very well for the hon. Gentleman to say that all these new privileges which the Government attract to themselves will not be abused. That may well be, but we have heard such statements in other connections, and it is one of the functions of government to see that privileges are not given to an Administration the personnel of which changes as the years go by. It is up to us to see that power is not given to the Executive which may later, in other hands, be abused. It seems to us to be of the greatest importance that this sort of principle should be established in the House.
I think it would not be a bad thing if I briefly reminded the House of the genesis of this order. Price control orders were made in 1947 and 1948 which fixed the maximum prices for domestic pottery. These orders, I take it, applied to everyone. These scarce supply commodities, therefore, could not be unfairly purchased by anyone, whether a Government Department, a local authority or a private individual. We have heard much from the Government of the need to see that the wealthier people in the community should not get an unfair advantage at the expense of their fellow citizens. That, we take it, was the intention behind these maximum prices orders.
We then have the present order which removes all control from pottery bought by a Government Department. The hon. Member for Burslem said that this was special stuff. If it is special stuff, no doubt it is equally desired by many other sections of the community who should be entitled to buy it whether they are Government Departments, local authorities or private individuals.
§ Mr. A. Edward Davies
The point I was making was that it was made to a special design and as such would not necessarily meet the requirements of the general public.
§ Mr. Lennox-Boyd
If this order dealt with some particular contract put out by the Government for some particular parcel of goods they wanted, which they could not obtain unless they paid more than the ordinary citizen, then the hon. Member's interruption would be valid, but it does not. It does not even deal with a special commodity. It deals with all domestic pottery, and the Government, 2485 who may want to apply this in only one limited field, are taking power to apply it in every other field. This appears to us to be grossly unfair, and apart from that, it raises much graver considerations. The speech made yesterday by the Minister of Fuel and Power was followed by the statement in this House by the Chancellor of the Exchequer. If it is true that it is now more than ever necessary to keep personal incomes, costs and prices under control, how can the Government defend coming to the House and asking for authority to pay more for commodities which they want than they allow any other citizen to pay? I think that I shall be in Order in reminding the Government of the statement they made on personal incomes, costs and prices:Experience has shown that when it comes to a race between prices and personal incomes, prices will always win in the long run, so that conditions become progressively worse for the holders of all personal incomes and particularly for wage earners.One of the reasons why there is no explanatory memorandum appears to us to be that an explanatory memorandum put in understandable language would drive home the fact to anyone who paid 1d. to buy this order that the Government were being allowed by their own order to disregard their own warnings to the nation on personal incomes and prices, and would show the hypocrisy of the Government in this matter. Yesterday we heard that, at a time when we are faced with what may be our gravest financial crisis in recent years, we are about to pay £750,000 for a fun fair at Battersea. That makes it very difficult to tell people the extent of our economic danger. Tonight we are asked to give authority to the Government to pay more than anyone else for a commodity which is in short supply, and therefore is more than ever necessary to the ordinary household.
All this comes at a time when our people are being asked to restrain personal incomes, costs and prices. The truth, surely, is that we are moving once more into what Disraeli called the two nations—the one the people and the other the Government. The Government are asking for a privilege that they are not prepared to give to other people. The fact that tonight we have the presence of four Ministers of Cabinet rank honouring 2486 the House by their attention and listening to the discussion of this order does suggest to some of us that they are in no doubt of the implication of what they are now trying to do.
§ 10.51 p.m.
§ Mr. Boyd-Carpenter (Kingston-upon-Thames)
I do not want to say anything about the merits of this order, which have been fully and satisfactorily dealt with by my hon. Friends. I will take advantage of the presence of the Lord Advocate and put to him two points on the order with which he may find it convenient to deal. As I understand it, the view of the Parliamentary Secretary was that the authority to make such an order as this was to be found in Section 19 of the 1939 Act.
§ Mr. Boyd-Carpenter
I fully appreciate that, but the original authority to make the order to exempt a Government Department from the operation of a price control order was based ultimately on Section 19 of the 1939 Act. I have that Act before me and I find some difficulty in following the argument of the Parliamentary Secretary. The only subsection of Section 19 which could possibly be relevant, I think the Lord Advocate would agree, would be subsection (3), which says:The definition in an order for any of the purposes of this Act of a description of goods may be framed by reference to any circumstances whatsoever.I ask the House to note that the reference to the:definition in an order … of a description of goods.It does not seem to me that a description of the goods fits into the present case. No goods are described here, because in fact this order applies to all goods. The only thing described is the purchaser of the goods, a Government Department. Therefore it would seem that there is no foundation for the argument of the Parliamentary Secretary if it is based, as I understand he agrees it is, upon that subsection which relates solely to the description of goods and not to the definition of the purchaser. If that is so, it seems to me that no express authority has been given to the Government to make an order of this kind.
I am certain that the House will agree that such authority would have to be 2487 extremely clearly given. It is a very substantial and serious thing to exempt a Government Department from the operation of a Statutory Instrument which affects everybody else. Unless Parliament has expressly given such a power, I think it is clear on all the authorities that such a power simply cannot be implied. It is the duty of the Government to be quite clear that they have such express authority. I do not put it any higher, but it seems to be that it is very doubtful whether any such authority is to be found in the subsection on which the Parliamentary Secretary relies.
The other point relates more to the form of the order. It provides that the order:shall cease to apply to pottery and other shaped and fired clay products purchased by or on behalf of a Government Department in respect of which the seller shall have notice in writing, at or before the time of supply, that they were being so purchased …That seems to put the seller in something of a difficulty. If he sells, apart from this provision, above the controlled price he commits a serious criminal offence under Section 16 of the 1941 Act, and therefore he has to be careful not to do it. He is given cover from committing such an offence if he has received a notice in writing by or on behalf of a Government Department. He is given no indication of what is an adequate notice in writing. If a seller of pottery may need to rely upon such authority in writing as a defence to a prosecution under Section 16 of the 1941 Act, he surely is entitled to have clearly defined what that notice in writing should be. I suggest that he is entitled to have some definite indication that it comes from a senior official of a recognised Government Department, and not merely that it can be given by any servant of any Department or by anyone who is an agent of that Department and who purports to be acting on behalf of that Department.
It seems to me to be vague, and I ask the Lord Advocate or the advisers of the Department to consider that aspect. It is important, if we are making orders of this kind, which protect what would otherwise be the commission of a criminal offence, that the precise terms in which that protection is given should be clearly stated and obvious to all, so that 2488 people will not have to consider whether a particular piece of paper is adequate protection or not. I have purposely said nothing about the merits of the question, because apart from the merits there are those points which I have mentioned. There is the grave fundamental matter which may have to be decided in the courts, whether the Government have the authority to make such an order—and on that the Lord Advocate will agree there should be no doubt whatever—and secondly, assuming the Government have the authority to make the order, have they made it in a satisfactory form? If the Lord Advocate could deal with these matters, the House would be grateful.
§ 10.57 p.m.
§ The Lord Advocate (Mr. John Wheatley)
The hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) has not fallen into the errors of his hon. Friends in making the preliminary attack on the vires of the order. They made the preliminary point that the order was ultra vires, probably due to a misreading of Section 1 (I) of the 1941 Act; but the hon. Member for Kingston-upon-Thames realised they had proceeded on the wrong lines and changed the line of attack. May I deal first with the point put forward by the hon. Member for Twickenham (Mr. Keeling), who, in reading Section 1 (I) of the 1941 Act, failed to appreciate that there are two conditions attached to that section, and pro-ceded on the basis that the criterion in this case was whether or not it was competent under the Statutory provisions to make this order in relation to the business of a prescribed class.
If the hon. Member for Kingston-upon-Thames, who has a copy of the Act before him, will look at it, he will see that there are two conditions to be satisfied: one is that it arises in the course of a business of a class specified, and secondly that it relates to a class of goods specified. The order with which we are dealing relates to the second class—namely, to a class of goods—and accordingly subsection (2) has no bearing whatever on the argument. Nor has Section 17 (4): that, again, is a counterpoint of Section 19 (3) of the 1939 Act, and dealt with the nature of the business and not the nature of the goods. The terms of Section 1 (1) are rather wide and state that the Board of Trade may by order 2489 fix the maximum price to be charged in the course of a business of any class specified in the order for goods of any description so specified. If we turn to Section 18 of the 1941 Act, there is a cross-reference to Section 19 (3) of the 1939 Act, with which it has to be read as one. Section 19 (3) of the 1939 Act gives wide powers in relation to the making of the orders, and, as the hon. Member for Kingston-upon-Thames quoted, states categorically that thedefinition in an Order for any of the purposes in this Act"—and that meant the 1941 Act,—of a description of goods"—and that is what we are dealing with—may be framed by reference to any given circumstances whatsoever.That gives the widest of powers in defining the description of goods. I am sure the hon. Gentleman would not challenge the granting of such wide powers, because the 1939 Act was passed by a Tory Government.
We have chosen to define the classes of goods in these orders, and the attack which has been made on this particular order has been directed, not to the class of goods contained in the order, but to the class of goods exempted from the order, because the two classes which form the subject matter of the Debate and their merits, which the hon. Gentleman and I would not dream of interfering with, relate to the description of goods which are exempted from the order and not to the description of goods which are included in the order. In other words, the description of goods has been given in the previous orders and out of those orders we are extracting certain classes of goods.
§ Mr. Boyd-Carpenter
Surely by this order the Government are not exempting certain classes of goods; they are exempting a particular purchaser in respect of all classes of goods.
§ The Lord Advocate
If the hon. Gentleman will look at the order, he will appreciate that we are exempting certain classes of goods. In the first place, we are exempting that class of goods which is specified in the first schedule to the principal order. Secondly, we are excluding another class of goods, namely, those goods purchased by a Government Department.
§ Mr. Lennox-Boyd
Is it really fair to say that goods purchased by a Government Department are a particular class of goods? After all, in the next 20 years, Government Departments may require at one or other moment every type of goods in the country, which makes this sort of explanation quite ridiculous. What was intended was a particular commodity and not the whole range of domestic pottery.
§ The Lord Advocate
If the hon. Gentleman cares to refer back to the Act of his own Government in 1939, he will find that the very wide and general powers enable us to make an exception of this nature or to make a description of this nature. It is no use the hon. Gentleman saying the argument is nonsensical or ridiculous, because the argument is a logical conclusion from the powers granted both by the 1941 Act and the 1939 Act. In framing this description of the class of goods that is exempted from the order, there can be no doubt whatsoever about the competence or the vires of the order. That deals with the first legal point raised by the hon. Member for Kingston-upon-Thames.
The next point related to the question of the adequacy or otherwise of the notice. Manifestly, as the hon. Gentleman will know, this is inherent in the contract of sale in relation to the purchase, because this will govern the price in relation to the purchase. Accordingly, before any concluded contract could be achieved, it would be necessary for some authoritative person, on behalf of the Government Department, to give notice in writing, prior to the conclusion of the sale which would result in a purchase, that this was the type of commodity which attracted the provisions of this particular order. Therefore, there must be notice before the conclusion of the contract of sale, and accordingly of the purchase, made by someone authorised to act on behalf of the Government Department concerned. That, I think, completely answers the difficulties raised by the hon. Gentleman.
§ Mr. Boyd-Carpenter
Does the right hon. and learned Gentleman contemplate, by what he has just said, that this notice, or the authority to which he has referred, shall always and inevitably be given by a senior official of a Government Department, because on the terms of the order 2491 a person who was not an official at all, and was simply a buying agent, a nonofficial person, could give this notice?
§ The Lord Advocate
As long as it was given by anyone whose action would bind the Government Department in the contract, it would be sufficient. Accordingly, the criterion would be whether or not notice had been given. In those circumstances, I can assure the House that there is no substance in any of the legal objections to this Order, and beyond that, on the merits of the case, I would not pretend to offer any contribution.
§ 11.6 p.m.
§ Mr. Keeling
I exercise my right to reply, but I shall do so briefly. I want to deal with three points. First of all, the legal point. I think that the defence of this order by the Lord Advocate is exceedingly thin. I do not care whether this order purports to exempt a "class of business" under the 1941 Act or "goods of any description specified" under the 1939 Act. I say that a Government purchase is neither "a class of business," nor a purchase of "any description of goods specified." I cannot think the terms of the Acts to be capable of that interpretation, and I hope that the Select Committee on Statutory Instruments will take notice of this Debate and give consideration to the question whether this order is ultra vires or not.
Secondly, it was urged by the Parliamentary Secretary and the hon. Gentleman the Member for Burslem (Mr. Edward Davies) that, whatever the order may say, the practice of the Government is in fact reasonable. To that reply that we are not concerned with the practice, but what the powers of the Government are under the order. It is quite clear that the powers of the Government to buy any description of domestic pottery at any price they choose to pay are entirely unlimited under this order. That seems to me to be exceedingly unsatisfactory. Thirdly, it was urged that this order only really applies to special stuff which should not be governed by the Maximum prices Order. If in fact this order is only intended to apply to special stuff, why is not the special stuff to which it is proposed it should apply not specified in the order?
§ Question put, and negatived.