§ 4.16 p.m.
§ Mr. Hugh Dalton (Bishop Auckland)
We should like, next in the series of events today, to have a few words about monopolies. I should like to ask the President of the Board of Trade for his observations on the working of the 1948 Act dealing with this matter and the working of the Monopolies Commission, both of which are his responsibility, although many of his right hon. Friends have a collateral responsibility for making orders and so forth under the Act. We should like to know what is going on, what lessons it is thought are to be drawn from experience after four years' working of the Act, what the Government are doing about it all—if anything—what they are thinking of doing about it all, and why they have not carried out the promise in the Gracious Speech thata measure will be laid before you for strengthening and widening the activities of the Monopolies Commission.I appreciate that it is out of order in Committee of Supply to discuss legislation, but I believe I am in order in 552 observing that we meet this afternoon in a situation in which we are still awaiting the legislation promised in the Gracious Speech. Therefore, I wish to ask the right hon. Gentleman whether, within the bounds of order, he can tell us why we have not had anything yet and whether—here I think I am firmly in order—the failure of the Government to carry out their promise to legislate means that the right hon. Gentleman is completely satisfied with the present state of affairs. When he is giving an account of his administrative stewardship, I hope he will say whether he is completely satisfied with the working of the Act, with the rate of progress which has been made by the Monopolies Commission in the past four years, and with the manner of progression which the Commission has adopted.
These are important questions, and as a Member of the Government which had collective responsibility for bringing in the 1948 Act I wish to say, quite frankly, that I regard it as a very great disappointment indeed in its practical operation. My right hon. Friends and I hoped that the Measure would lead to much quicker results and much more effective action against monopolistic and restrictive practices than has been the case. I frankly confess that we are deeply disappointed with the way things have worked out and we are therefore very anxious that, by one means or another, these difficulties should be smoothed away.
§ Mr. Ellis Smith (Stoke-on-Trent, South)
If my right hon. Friend will permit me, and without making any personal reflection on him whatsoever, may I say that those of us who tried to make it stronger are even more disappointed than he is
§ Mr. Dalton
My direct responsibility for the affairs of the Board of Trade ended, of course, in the latter days of the Coalition Government, so that I am not very directly touched by this. My right hon. Friend the Member for Huyton was responsible as President, and I only tried to give helpful assistance as a colleague. I was not the prime mover.
What has happened? Hardly anything is moving at all. The whole thing is desperately slow. As I watch all these operations, I am reminded of a fleet of tortoises going to a funeral. It is really no faster than that. Since 553 March, 1949, when the Monopolies Commission began work, they have made four Reports—only four. I do not intend to go into much detail about them, because many of my hon. Friends will no doubt wish to elaborate on the details.
They made a Report in December, 1950, on the supply of dental goods; in April, 1951, on the supply of rain-water goods; in November, 1951, on the supply of electric lamps, and in July, 1952, on the supply of insulated electrical wires and cables. That is all they have reported on so far, so there would not be very much in the picture if they were at Helsinki just now.
Let us briefly consider what has happened following those four Reports. On the dental goods Report, my right hon. Friend the Member for Middlesbrough, East (Mr. Marquand), who was then the Minister of Health, made a very good Statutory Order in July, 1951, and I recall with satisfaction my collective part in that. In that Order he forbade a number of most objectionable practices which had been clearly revealed in the very remarkable Report of the Commission on the dental goods supply system. In that Order my right hon. Friend forbade the objectionable practices of exclusive dealing, collective boycott, arrangements which restrict entry into the trade and the nefarious practice of collective resale price maintenance. My only regret is that it is not yet clear whether effect has been given to that Order by the traders and monopolists concerned.
My right hon. Friend has in fact been putting Questions to the Minister of Health in the present Administration about this matter. We had, I repeat, an Order made by my right hon. Friend a year ago this month. Yet on 12th June of this year, in reply to a Question by my right hon. Friend, the present Minister of Health was only able to say that he had received a copy of the revised rules of the Association of Dental Manufacturers and Traders, which was now under consideration. Why? It was under consideration to see whether these monopolists, against whom the Order had been issued, had, in regard to a whole series of gross and anti-social practices, yet mended their ways, even on paper. That is all we have.
554 I should like to know why there has been this tenderness towards a group of people who had been convicted by the Monopolies Commission of nearly all the offences of which we suspected they might conceivably be guilty. I am not asking the right hon. Gentleman necessarily to reply himself. That is for the convenience of himself and whoever else may speak from the other side of the House. But at some stage in this debate we should like to know why there has been this delay and tenderness towards these people.
The next two Reports are on rain water goods and electric lamps. No Order has yet been issued in either case. Indeed, since the present Government came into office, no Orders under this Act have been issued at all. I do not know how many of these people—as is sometimes said—have contributed towards party funds on one side of the House or the other. I do not know whether there is a lurking explanation of that here. No Order has been made against these groups of monopolists in the case of rain-water goods. It is the Minister of Works who is responsible. He said on 27th November—a Report having been made in April, 1951—My Department has received an assurance that new trading arrangements to carry out the recommendations of the Monopolies and Restrictive Practices Commission will replace the present agreements. I should like to place on record my appreciation of their co-operation."—[OFFICIAL REPORT, 27th November, 1951; Vol. 494, c. 129.]But it is still in the future. They are going to consider whether perhaps they will take notice of what has been said about them. But no Order has been made, nothing has been published, and we have not yet had a copy laid before the House of their new code of conduct. I think that is very unsatisfactory.
To come to electric lamps, about the malpractice in the supply of which a good deal was known before—it is a notorious case of price rigging and the exclusion of new entrants—although the Report was made in November, 1951, it was not until 19th May of this year that the Minister of Supply, who is responsible for this branch of our industry, said that both the Government and the Electric Lamp Manufacturers' Association had accepted the Commission's recommenda- 555 tions. It is very good of the manufacturers to accept them, and I think that we must be very grateful for their kindly approach. They have accepted the recommendations, except for abolition of rebates. I will not develop that. We were told that a new scheme promoted by the E.L.M.A. would come into force on 1st July, 1952. I should like to know if that has been published. Are we to see this new scheme and be able to exercise our own judgment as to whether, on the face of this new scheme, the recommendations of the Monopolies Commission have been carried out?
Finally, there is the question of insulated cables. I will not spend much time on that, because the Report has only just been received and it is not reasonable at present to expect action. I would hope that in all these three cases we shall get an Order. Assurances are all very well, but the whole purpose of the Act was to give new power to the relevant Minister to make an Order and to ensure that objectionable practices should become illegal as from the date of the Order. So much for what has happened so far, and it is really not a very good story.
There were discussions in this House in the last Parliament and in this Parliament. I have looked up some of the past debates. There was an extraordinarily good debate on 15th June, 1951, when we were able to go wider than we can today because there was no such bar as exists today about discussing legislation. In that debate there were two very able and interesting speeches made at the beginning, and others later, by two of my hon. Friends who moved and seconded the Motion, the hon. Member for Gloucestershire, South (Mr. Crosland) and the hon. Member for East Ham, North (Mr. Daines). Those speeches will well repay re-reading.
I will select one interesting statistic from one of those speeches. I think it was my hon. Friend the Member for Bristol, South-East (Mr. Benn), who made the calculation quoted in that debate by my hon. Friend the Member for Gloucestershire, South, that at the rate of progress at that time prevailing, it would take 2,400 years for the whole of industry to be surveyed by the Monopolies Commission. That struck me very much at the time, and I am inclined to think that, even 556 if we take into account what has happened since then, that figure is about right within a margin of error of a few hundred years on either side I hope that that will have impressed the right hon. Gentleman the President of the Board of Trade and encouraged him to see whether he can do something to foreshorten future history. Enough has come out, even in these few Reports that we have had, greatly to strengthen the belief that many of us already held, based on other studies which had been made, that British trade and industry today are literally honeycombed with monopolistic and restrictive practices of all sorts.
This leads to a number of consequences, which I hope the right hon. Gentleman and the Government will agree are very undesirable. It leads not only to the more obvious objection that prices are higher than they ought to be and profits are larger than they ought to be, but to a general atmosphere of inefficiency in industry, resistance to change and to new ideas, and it leads also to gross tyranny by trade associations over traders or other persons who may be within the ambit of their interests. These are the two main counts which I put against these monopolistic activities.
There are two or three principal monopolistic practices—I shall not discuss them in detail—which are emerging from practically all these reports. They are the use of the collective boycott, exclusive dealing, the black list and restrictions on new entry into the trade. These occur with monotonous regularity, and there is evidence to show that they occur in other places which have not yet been probed by the Monopolies Commission.
I have already referred to the interesting speech of my hon. Friend the Member for East Ham, North in the debate last June. He used a vivid phrase. He said:I do not want to cover the ground again of trade associations…He had already made some reference to that subject.It is remarkable how, in modern businesses, practices are conducted, which are very similar to the practices for which people in other walks of life are today sent to prison. There are the Star Chamber, locked doors, fines and penalties. A man can be economically murdered for carrying out the very principles in commerce that hon. Members advocate both in this House and on the public platform."—[OFFICIAL REPORT, 15th June, 1951; Vol. 488; c. 2702–3.]557 That is a very serious state of affairs, and I had hoped that before now the Government would have done something to deal with it.
I should like to quote one more passage from the White Paper issued by the late Government dealing with resale price maintenance. In that White Paper it was stated:If a trader fails to observe any of these rules and regulations by which the associations seek to close any loopholes in the operation of resale price maintenance, he may suffer penalties ranging in severity from fine (in some cases involving substantial sums) up to the boycott. (It is worth noting, too, that a trader who by charging too little for his goods incurs these penalties at the hands of a trade association has no recourse to any higher authority.It is final. It is economic murder.By contrast, a trader, who charges too much and is proceeded against by the State under price-control laws, can always appeal to, a higher court.) These penal proceedings, which may have the effect of driving a shopkeeper out of his trade and which are directed not to the maintenance of a recognised standard or code of behaviour, generally accepted as necessary in the public interest, but solely to the enforcement of a particular trade policy of questionable merit, take place behind closed doors and without any supervision by the courts or by Parliament.That is a very grave condition of affairs, or so it seemed to the late Administration. Without wishing to put myself out of order, I would say this. Had the late Administration remained in power, few things are more certain than that we should have legislated on this subject this Session not merely in terms of the White Paper on resale price maintenance but in wider terms than that. I am dissatisfied that nothing has been done to deal with these matters yet.
What can be done under the present Act? No doubt the right hon. Gentleman has been considering this. Has he any idea of any measures to speed up the work of the Commission itself? A number of suggestions have been made. I should like him to tell us in his own words. Further, has he considered the use that might be made of procedure laid down under Section 6 (2) of the Act or under Section 15 of the Act, both of which, when we were considering the form of the Bill when it was going through Parliament, seemed to hold out special hope of speedy and effective action, but neither of which has yet been used.
558 Section 6 (2) of the Act permits the Monopolies Commission, if they have established that monopoly conditions prevail in an industry, thereafter to confine their study to the actual effect of specified restrictive practices. At present they write a treatise about the industry. They go into everything, which is no doubt interesting to the student, but does not get us quickly to the point. It is possible under Section 6 (2) for the Monopolies Commission to concentrate their brainpower, which is considerable if they can concentrate it, upon studying the effect of some particular restrictive practice in an industry, provided a prima facie case for the existence of that practice has been made out.
Section 15 of the Act is even potentially more valuable, because it empowers the Board of Trade to refer to the Commission the effects in industry generally, and not simply in one industry, of some particular restrictive practice, such as collective boycott, restrictions on new entry and so forth. Such references can be made within the terms of the Statute, provided the Commission has already satisfied the President of the Board of Trade that such a practice widely exists now.
My submission would be that, even in the small number of Reports which we have so far had, there is plenty of evidence that some of these practices are at least as widespread as the total field of the Commission's inquiries up to date, and probably a great deal more widespread than that. Perhaps, therefore, the right hon. Gentleman will tell us whether he has given thought to action under these two Sections, and if so, when it will begin
What do Ministers propose to do about this matter? Grave words are rightly spoken about the economic difficulties of this country, and all of us on both sides of the Committee would wish to do all we can to make it easier, or at least less difficult, for us to pay our way in external trade, for exports to be expanded and productivity to resume the increase which at the moment seems to have been checked.
In the battle of the balance of payments in which we are engaged, and the verb hard battle for exports which is part of it, we cannot afford as a nation to carry on our backs into battle the dead weight of these monopolistic and restrictive 559 practices of private industry. We cannot afford the organised discouragement by powerful private vested interests of new enterprises, new ideas, new men and new methods. We cannot afford all that. It should be done away with and thrust off the backs of our more enterprising private traders and industrialists.
If Britain is to win through now, she must be able to shake off this incubus of highly organised private unenterprise. She must be free enough in this fight to make the most of all she is and all she has. I wish to know on which side in this battle for freedom Ministers stand.
§ 4.40 p.m.
§ The President of the Board of Trade (Mr. Peter Thorneycroft)
I welcome this debate and the speech with which the right hon. Member for Bishop Auckland (Mr. Dalton) has initiated our discussion. It covers the field and asks a number of perfectly proper and pertinent questions to which I shall seek to reply. Other matters will be dealt with in more detail later.
We are at a stage in the Session when, it is well known, the pressure of business reaches almost its maximum point, and there are considerable problems of long-term and short-term economic policy confronting us. In a way it is all the more fitting and appropriate, and rather typical, that the House of Commons should turn aside for a moment from the general consideration of these problems to discuss in the comparative calm of a Supply Day one particular aspect of things, namely, the work of the Monopolies Commission and the action which Her Majesty's Government take upon the Reports which are placed before us.
It is important, not because that work and those Reports can make some immediate impact upon our economic position. They cannot really tilt the balance of payments one way or the other; but I think the right hon. Gentleman is right when he says that in the long term they are important, because sound judgment and sound knowledge of these problems of monopoly are essential to our interests and will affect in the long run the whole pattern of our economic life.
I should like to say at once—and I am sure that I shall carry the whole Committee with me—that all of us owe a debt 560 of gratitude to the work of the Commission. That work has been of a high judicial quality. Some people have said, and I think the right hon. Gentleman is inclined to say, that the output has been slow. I will say something more about that in a moment, but I say now that it is much better to take a long time to produce a good thing than a short time to produce a bad thing. The worst service which this Commission could have done to the interests which all of us have at heart would have been a series of quick, perfunctory decisions. No one would have believed that matters had been properly inquired into, and certainly the Reports would not have carried with them the authority which they do carry.
At any rate, whatever view one takes, no one would suggest that it is a simple task to unravel the tangled skein of somebody else's business. It is quite a big job to take out of a mass of irrelevancies, which, however one organises a business, are bound to be there, and to which attention need not be very much directed, the real, essential matters on which attention must be focused. The results are not academic. The results, the decisions and the actions which are taken on the decisions, affect not only the employers and the people who have risked their capital, but affect intimately as well the livelihood of everybody, every worker, who happens to be dependent upon the prosperity of the particular concern or trade.
§ Mr. M. Turner-Samuels (Gloucester)
Would the right hon. Gentleman refer to the question of the cost of living, which so far he has not adumbrated at all? There has been no inquiry of any sort or kind on that matter, but it is the function of the Board of Trade to refer any such matter for inquiry. That has not been referred to the Commission. Why has this question of the cost of living not been dealt with in any way by the Commission?
§ Mr. Thorneycroft
The cost of living is a subject of great importance, but not one which is suitable for reference to the Monopolies Commission.
I was saying that the Commission have not only done a good job but have done it in a manner which I believe has impressed the public with the Commission's calibre and willingness to study 561 these matters with care before they give authoritative judgments.
I should like to make one or two general observations about the general philosophy which lies behind the work of this Commission and the policy of Her Majesty's Government. The basis of the monopoly legislation is, as the right hon. Gentleman has said, the Coalition Government's White Paper of 1944. This is an all-party policy to that extent. There was agreement about the main road which should be travelled. Each party has seen attractive byeways as it has gone along the road, but the main theme of monopoly legislation has been agreed. I should like to remind the Committee of the precise terms in which that was laid down, because they will bear repetition. The White Paper said:There has in recent years been a growing tendency towards combines and towards agreements both national and international by which manufacturers have sought to control prices and output, to divide markets and fix conditions of sale. Such agreements or combines do not necessarily operate against the public interest, but the power to do so is there. The Government will therefore seek power to inform themselves of the extent and effect of restrictive arrangements and of the activities of the combines; and to take appropriate action to check practices which may bring advantages to sectional producing interests but work to the detriment of the country as a whole.That represented then, as I believe it represents now, the area of agreement between all parties on this matter. What is to be noted is not how much we differ but how much we all agree in the general way in which we approach the subject.
It is worth noting that the way we approach these matters happens to be almost the exact opposite to that which is followed in the United States of America. That does not mean that the United States are necessarily wrong. They started their monopoly legislation a good deal before we did, and it may be that if we had started at the same time we might have approached the matter in the same way. We have approached it from different ends. The Sherman Anti-Trust Act is quite definite and precise on the matter. It says:Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among several States or with foreign nations, is hereby declared to be illegal.562 In that simple phrase is the whole nub of monopoly legislation in the United States.
In this matter, as in many other matters which we have tackled, we have preferred an objective and an empirical approach. We do not assume that a trade combination is necessarily evil. What we say is that we want to have a very good look at it. We want to see what it is doing, how it is doing it and what are the practices that have been carried on, and to examine whether they are in fact against the public interest or not. We recognise that the effect of a restrictive practice on the public interest may be different in different industries and that what may be harmful in one case may not be harmful, or might even be helpful, in another. In our method the so-called restrictive practices are judged in the context of particular industries.
I would go rather further. A restrictive practice may be good at one moment and bad at another. Judgment on that must vary in time as well as in circumstances. That is true of all countries. We all assume that the Sherman Act, with its rigid prohibition of monopoly, is the clearest possible case of anti-monopoly legislation, but if one looks over the history of the United States in the great depression, it will be found that the main principles underlying the Sherman Act were virtually abandoned during that time. The National Industrial Recovery Act of that time actually encouraged industry to form combines and keep up the prices.
It was the same here. In the recession of the 'thirties restrictive practices grew up, and they were not confined to one side of industry or the other. Both sides did it, employers and trade unions and the purpose of both sides was the same, to spin out the limited amount of work available because, if one finished one's job, one might not find another job to go to. That is why those practices grew up.
If those restrictions were understandable or excusable or even inevitable in the 'thirties, many of them are quite intolerable in the 'fifties. Circumstances have changed and the needs of the age are different. May I here confess my prejudice in this matter, because I think politicians are entitled to have prejudices? I have a prejudice against monopoly. I 563 always have had it. I have never made any secret about it. In speeches and in writing I have attacked monopoly. I attacked the privately-owned monopoly which was at one time suggested. I attacked the agreement between road and rail which preceded the nationalisation Act. I have always been quite clear about it.
With some exceptions I believe, in general, that competition is good for us. I believe that there is no comparable device for safeguarding the consumer—at least none that has so far been invented. Competition is good for industry. I know of no other set-up which will really extract from it the last ounce of extra effort which is required. I think it is perhaps good for government. No Government would work to its fullest extent if it had no opposition, though I admit one can have too much even of a good thing.
In the main this country suffers, not from too much competition, but from too little, and that too little has been increased often by the actions of government itself. Certainly I have a prejudice against those who seek to agglomerate power into a few hands and then possibly abuse it. I do not know whether I shall carry the right hon. Gentleman with me in saying, in passing, that my prejudice does not distinguish too carefully between public and private monopoly. Both have well been described asthose proud corporations beyond the fear of a rival and below the confession of an error.I think both want watching carefully.
Having confessed my prejudices, with which I hope the Committee have some sympathy, may I say that I accede to the generally accepted view that the right approach to this matter is by the agreed and accepted machinery of the Monopolies Commission, that our energies ought to be bent towards improving and perfecting it and using it to the full, and perhaps—though it is outside the range of this debate—at some time extending it. But I must add that, looking at these Reports as a whole, apart from the specific practices—to which the right hon. Gentleman has drawn attention and about which I shall speak in a moment—the Commission has on balance spoken well of the industries which it has examined. It has brought out points 564 which it thinks could be altered or done better or which are against the public interest but, on balance, it has spoken well of the industries submitted to it.
The machinery which exists today falls into two parts. The first is the getting of information about the operation of these practices and their effect. The second is the taking of suitable action. The getting of the information is the job of the Commission and the subsequent action is the job of the Government of the day. The right hon. Gentleman asked me what had been done and how fast was the progress. Let me briefly review what has been done.
Eleven references have been made so far. The first batch, shortly after the Commission was appointed, concerned lamps, cables, rain-water goods, dental goods, and matches and match-making machinery. Then, at later dates, nonferrous metals, insulin, printed fabrics, the supply of imported timber and electrical machinery. Those apparently unconnected industries were chosen deliberately, some by me and some by my predecessor, to cover a wide range of industry and as many different types of practice as possible. I think it was right to cover a wide range of industry. It was right to go from engineering products to medical supplies, printed fabrics and the like because, by covering so wide a range, we got earlier a more general picture of the kind of problems we were up against.
The right hon. Gentleman referred to the type of references. All of these have been done under what I might call the normal reference method; that is to say, the whole industry is referred and the Commission looks at the problem to see whether the conditions of monopoly are fulfilled, whether the practices are against the public interest, and so on.
There is another way, as the right hon. Gentleman said. There is the Section 6 (2) procedure. I was rather attracted by that procedure under which, instead of referring the whole industry, we would say, "Do not look at the whole, just look at this one thing which we think it is doing wrong." I do not say for a moment that I rule that out. On close examination, however, I have been impressed with some of the difficulties of that procedure. It is all very well to say there is a particular practice—there probably is—but, on looking at it, one finds that it is almost inextricably interwoven with 565 many other practices and it is not at all easy to separate the one from the other when making this examination. However, as I say, I do not rule it out.
§ Mr. Dalton
Would it not be interesting to make an experiment and have a Section 6 (2) operation in one case without committing oneself beyond that, to see how it works?
§ Mr. Thorneycroft
In a moment I shall describe what my future plans are touching on that matter and I shall deal with Section 15 then, if I may.
So far as the Reports themselves are concerned, I admit that they were slow in starting. After all, it takes time to get this information. It is quite a large undertaking to make an inquiry into a whole industry.
In 1950, only one Report was produced, that on dental goods. In 1951, two Reports were produced—rain-water goods and the Report on the electric lamp industry. In 1952, so far the Report on cables has been produced and is now under consideration and we hope, before the end of this year, to have one on matches and match-making machinery—which I count as one for the moment for this purpose—and another on insulin. I do not say it is rapid, but the rate of reporting has certainly increased considerably and it is probably now running at two or two and a half reports a year.
I have been looking at the question to see whether any procedural arrangements would enable a speed-up. When I say that I have, I should say that the Commission have, because they are as anxious as anybody to see that the work is as expeditious as is consistent with efficiency. They have adopted a modified panel procedure whereby some of the inquiring on the factual side need not necessarily be done by the whole Commission, though the report is that of the whole Commission and all the really important examination has to be done by the Commission as a whole. However, that is a useful contribution. As to the action which is being taken, and about which I was asked—
§ Mr. Anthony Crosland (Gloucestershire, South)
Before the right hon. Gentleman leaves that point, can he say whether that is to be carried out merely with the existing staff of the Commission? I 566 should have thought that a modified panel system would not have produced any acceleration in the Reports unless there was an enormous increase in the staff of the Commission.
§ Mr. Thorneycroft
I am not quite clear whether the hon. Member has in mind the numbers of the members of the Commission or the secretarial staff.
§ Mr. Thorneycroft
It is being carried out with the existing secretarial staff. If there were need for more, no obstacle would be put in the way. So far, however, the limit is not the number of the secretarial staff, but is more the number of the commissioners, because it is on them that the main burden of responsibility rests.
So far as the actions taken are concerned, the dental goods Report recommended, as the right hon. Gentleman said, that an Order should be issued; and an Order to prohibit exclusive dealing and collective boycott was issued. I should not say that nothing happened, because from that moment collective boycott and exclusive dealing became an illegal practice.
There were other matters which the Report dealt with, and it recommended certain amendments of the rules. Those rules have been amended so that no overt, as it were, exclusive dealing should take place. This situation is being watched. It is particularly important, after these Reports have been made and action has been taken, that a watch should be kept to see that the real intention of the Commission should be kept to, and that is being done in this case.
§ Mr. George Chetwynd (Stockton-on-Tees)
Did the Report make any recommendation about prices of dental goods?
§ Mr. Thorneycroft
If the hon. Member speaks later and asks a question about prices, I will see that it is answered.
On the question of rain-water goods, which falls within the province of my right hon. Friend the Minister of Works, the Report was produced. There was no recommendation that an Order should be made. The previous Government urged the industry concerned to amend its rules 567 to take account of the recommendations of the Commission. That action was followed up by this one. The rules have, in fact, been amended to supersede the rain-water goods agreements of which complaint was made, and these new rules were introduced on 1st January, 1952. The effect of them will, of course, be kept under close watch by my right hon. Friend.
§ Mr. Thorneycroft
The rules of these associations remain the rules of the associations, and they are issued to their members, although the Government have a copy of them. They are not, I understand, published. This, of course, raises a much wider issue as to whether more knowledge should not be had generally of rules of this character.
§ Mr. Thorneycroft
The answer to the right hon. Gentleman's question is, I think, "No."
As regards the electric lamp Report which is the responsibility of my right hon. Friend the Minister of Supply, the Commission, when they reported, did not insist on the end of the common manufacturers' price, which was the notable feature of the E.L.M.A., but they did call for the abolition of certain collective arrangements of a restrictive character; and my right hon. Friend the Minister of Supply announced the Government's agreement with the Commission's findings. The industry has amended its rules, with one technical exception—the question of aggregated rebates—which I am perfectly prepared to deal with if the matter is raised in debate. In broad principle, however, the industry has amended its rules to take account of the Report of the Commission and the decision of the Government.
Now, a word about the future. I do not propose to refer to individual industries which might possibly be referred. It has never been our practice to do that, and it is much better not to do so. Looking at the various Reports which have been produced, one is bound to examine them, not only with regard to the industry concerned, but to see what lessons can be drawn from them; to see whether there 568 is any common theme which runs through them, and whether, within the framework of the existing law, we could make a more comprehensive use of the Commission.
Given the empirical approach, I think it was clearly right and necessary that the Commission should begin their work by studies of particular trades. But it has always been recognised that the accumulation of case studies of that kind might suggest that certain practices were widely prevalent and were likely to have similar effects in other industries, and that some authoritative general judgments ought to be formed and made known for the guidance of industry as a whole on the effect of these practices on the public interest.
The Commission's first four Reports raise, I think, a very strong presumption that such practices exist. In each case, the Commission have found a complex system of restrictive arrangements affecting distribution, and they all had a strong family resemblance. The Commission have found that in many respects they are contrary to the public interest. Instances where similar features are known to exist in many other trades have not as yet been examined in detail, and in my view the time has come when we can, and should, seek more general advice about the desirability of some of these practices.
Although the four Reports certainly point the way to certain useful generalisations, one cannot found a judgment on those four Reports alone. We need to know within what limits the generalisations hold good, whether there are any exceptional cases in which normally undesirable practices may become innocuous or even desirable, and by what criteria such cases, if they exist, should be judged. All this points to some further general consideration about these practices.
Section 15 provides, as the right hon. Gentleman said, a basis for a consideration of that kind. I admit that in the form in which it has been bequeathed to us it is not wholly satisfactory for the purpose; there are difficulties about it, but I do not believe that those difficulties are insuperable, and I propose to ask the Commission at an early date to undertake a general study of some practices based on their original Reports.
Whilst matters are at that stage, the Committee would not expect me to 569 announce the precise scope of the prospective inquiry in the sense of detailing the terms of reference. Hon. Members will, however, recall that in each of their Reports, the Commission have criticised certain aspects of what I might group together as exclusive dealing and collective boycott. That has been the centre of their problem, and I should say that this practice is, clearly, a very strong candidate for early examination.
I thank the Opposition for raising this subject today. We can congratulate the Monopolies Commission on their painstaking and useful work. They have produced some Reports of high quality. Action has been taken upon those Reports, and already a certain pattern of the problem seems to be emerging. I think the time has now come to take a further step forward. We propose to take it by making one of these references under Section 15 for consideration on the general practice. I ask the Committee, therefore, to say that on balance we are satisfied with the progress that the Commission have made, and to approve our programme for the immediate future.
§ 5.10 p.m.
§ Mr. Frank Tomney (Hammersmith, North)
This problem of monopolies, this economic crusade, seems to unite 19th century Liberals, modern Socialists and modern Tories and I believe that in various parts of the Committee there is a general feeling about the operation and the manifestations of monopoly practices.
Before I proceed I should like to put myself right with the Committee. In a previous debate, in July last year, I made an observation which I now find is not correct. This House confers upon us the privilege of speech without fetters and I think it is incumbent upon all hon. Members to honour that privilege.
I made a statement about the British Employers' Federation, in which I implied that the Federation had been responsible, in the electric lamp industry, for arriving at agreed rates between factory and factory in the industry. I made that statement in all good faith arising directly out of my negotiations as a trade union official with a company when I had substantially made my case for increasing wage rates due to the efficiency of that company. I was told after the meeting, in a confidential manner by one of the managers who were negotiating, that I 570 had substantially made my case but, as I was a loyal member of my trade union, they were also loyal members of their trade union and, whilst they agreed that something should be done, they were unable to do it on that account.
Representations which have been made to me have strongly denied this. The Employers' Federation, with whom I have been in contact, say that this was not so. I therefore wish, unreservedly, to withdraw that statement, because I do not want it to be said that a trade union official should be any party to upsetting the good relations between management and men.
This problem in general was dealt with by the President of the Board of Trade. He has been concerned with the speed at which Reports have been reaching this House from the Monopolies Commission. I gave evidence before the Monopolies Commission on the electric lamp industry. I believe the Attorney-General gave evidence for the industry. I can assure the Committee that the method of examination and the procedure followed is exercised with extreme care. So far as I could see, in the short examination I underwent nothing was left to chance. Even the statements I made were not accepted at their face value because I was a union representative, but were submitted to other people within the trade union representation for confirmation or rejection.
The whole position has now become somewhat difficult in regard to the Commission and its activities. There is wide scope over some industries and if the time taken to submit Reports so far represents an average for the whole range of industry it may be 15 years before reports on each industry are completed. It may be advisable to look for ways whereby the speed at which the Commission works may be made more apparent. A panel has been suggested, but I think that a better way would be to re-cast the Commission into divisions under separate chairmen to investigate each separate industry, so arriving at a balanced position covering the whole of monopoly practices in, say, three years from now.
Against that, there is the American method which declares monopolies as such against the public interest and they are outlawed. We could decide to do 571 that, but it would give rise to numerous discussions, disagreements and breaches of contract which would be taken to the law courts, as is apparent to anyone who has studied the American method.
The Report of the Commission on the electric lamp industry is an excellent Report. The Commission can be complemented on its style and comprehensiveness. It has taken two and a half years to produce the Report, but I think that those of us who have taken the trouble to read it have come to the conclusion that if it may be taken as a pattern on which other reports will operate we may be able to see the situation more clearly. The electric lamp industry has, in the past, combined all the bad and good features of monopoly practices. They have been putting their house in order since the establishment of the Commission. The Report covers the whole industry since its inception more than 70 years ago.
Manufacture of electric lamps began in this country in 1879 with one firm having a monopoly based on patent rights. I believe that these expired in about 1893, when new firms entered the industry. Even before the 1914–18 war manufacturers were seeking ways of eliminating competition. The outcome of their discussions was that a trade association was formed in 1919 which was responsible for 90 per cent. of the production of the industry's total output.
During the years 1920 to about 1933 there was a revival of competition and in 1933 the Electric Lamp Manufacturers' Association was formed. That Association was the subject of the Report. The old agreement was replaced by this very comprehensive body. Since that time the industry has become more centralised and has given rise to some of the worst practices of monopoly. The result was that by 1950 six large companies controlled the financial interests of the electric light manufacturing business of this country. Only one lamp manufacturing company was outside the scope of E.L.M.A. contracts.
The companies which form E.L.M.A. are: Associated Electrical Industries, Limited—which includes British Thomson-Houston, Limited, Edison Swan Electric Company, Limited, and Metropolitan-Vickers Electrical Company, Limited—General Electric Company, 572 Limited, Philips (Holland)—which includes Philips Electric, Limited, and Stella Lamp Company, Ltd.—Cryselco, Limited—which is jointly owned by G.E.C. and Philips—Siemens Electric Lamps and Supplies, Limited, and Crompton-Parkinson, Limited.
There we have a formidable combination for manufacturing and regulating the whole of the output of the electric lamp industry. Of these five major groups, two—the General Electric and A.E.I.—dominated the Association, accounting for more than 50 per cent. of the total production of E.L.M.A. manufacturers.
Membership of E.L.M.A. offers to manufacturers very important and very conservative advantages. For instance, it offers the abandonment of price competition and allocates to individual firms a fixed quota of the industry's total sales. It pools most patents and research facilities. The Association maintains fixed selling prices agreeable to all its members and foreign competition is brought under control by an agreement which is known as the Phoebus agreement. It has divided world markets by allocating quotas based on existing sales. That agreement operated until 1939 and has not been renewed, but the 1948 agreement signed by Philips of Holland with E.L.M.A. established for Great Britain and the Empire the same type of trading conditions which have operated under the world agreement.
It is interesting to look at what the Commission have said about this agreement. They have, in effect, said that, in addition to restrictions on marketing, members of E.L.M.A. are subject to price-fixing by the Council of the Association; the net price to be charged to any given purchaser for a given type of lamp is laid down and is the same regardless of which member made the lamp or who is the immediate seller, with an obligation on the seller at each stage to observe the price fixed.
The buying terms vary according to E.L.M.A.'s classification of the purchaser as wholesaler, retailer or user, with a defined range of discounts and rebates. Wholesalers of E.L.M.A. lamps must bind themselves to confine their sales to E.L.M.A. brands; but retailers need not so bind themselves, although they can gain an additional 5 per cent. discount if 573 they do. There are special arrangements with the British Electricity Authority.
The Commission recommend that, while they note that the prices fixed by the Association are now on the average moderate in relation to costs, the arrangements for exclusive dealing, the enforcement of resale price maintenance by means of collective sanctuary and the stop list, and ancillary arrangements should be brought to an end. I shall be dealing with that a little later when I have gone through the history of the companies a little more, because, tied up in this whole question, is the technical excellence of the companies now operating.
The methods of standardisation, pooled patents and research practically forbid, by virtue of that technical excellence, new entries into the industry. While that, in some instances, may be a good thing it is necessary that Parliament should, from the point of consumer control, exercise over the industry a periodic investigation to make sure that the consumer interest is not being jeopardised. The attempt by E.L.M.A. to control competition from independent companies has been very successful. Control of patents has put E.L.M.A. in a strong position. For instance, the independent Crompton Lamp Company which, at one time, seriously threatened the position of some of the E.L.M.A. companies in the 1930s was subdued and subsequently made to join E.L.M.A.
Britannia Lamps, of London, who were making a successful lamp for the cheap market—Woolworth's and Marks and Spencer's—was bought up entirely after it was so successful that the products of Britannia Lamps were challenging the lamps made by members of E.L.M.A. Over the whole range of their trade, E.L.M.A., in regard to the patents, research, marketing, technical advance, costings and distribution, made themselves secure against any competition which could benefit the general public.
Before they grant wholesale terms to wholesalers they insist, for example, upon exclusive dealing. Retailers are offered a 5 per cent. discount for undertaking to sell only E.L.M.A. lamps. That has placed them in a strong bargaining position. There was some years ago a well-known store in Oxford Street, the name of which is nationally known, which inadvertently offered for sale in its windows 574 some fluorescent tubes which had been manufactured by an independent company. Those tubes were not in that shop window for more than five hours before positive action had been taken by E.L.M.A.
That is the kind of thing that has been operating throughout the E.L.M.A. range of products. The Commission recommend the ending of price discrimination against non-members of E.L.M.A. who manufacture components and the abolition of sales under a sales quota system. It would perhaps be interesting to the Committee to consider the fact that in recommending the cessation of exclusive dealing the Commission do so after full consideration of all the facts affecting the industry. Although they do not publish the findings I think they have gone deeply into the possible effects which such restrictions may have upon the employees in those industries.
Since the institution of the Monopolies Commission E.L.M.A. have been making efforts to put their own house in order. As a matter of fact, they have been showing good behaviour. I can tell the Committee that the price for 100-watt electric lamp, which was the highest in the world in 1939, is now possibly one of the cheapest in the world.
Possible solutions have been suggested by the Commission. Miss Joan Robinson, a member of the Commission, suggests that the five E.L.M.A.-controlled companies could possibly be bought up by the Government and operated as an agency which would provide competition. That seems attractive, but, I do not think it tells the whole story because, with the exception of Britannia Lamps, most of these other lamp manufacturers are small concerns. For instance, Evenlite Tube Lamp Developments, Gnome Lamp Works, Ismay Lamps and Splendor Lamps, the whole of the controlled companies were responsible in 1950 for only 13 per cent. of the total output of the lamp industry. While that is a suggestion which has to be considered, I do not think it is really worth the Government's while to adopt it.
It is possible that the Government would be able to offer more serious competition if they were to embark upon a process whereby they manufactured their own lamps for the services which they directly operate. I refer, for example, to 575 a whole range of products manufactured by E.L.M.A. and sold to the Government for exclusive Government use. One particular instance is that of telephone lamps in telephone exchanges. There is no apparent reason why the General Post Office should not control the manufacture of their own telephone lamps.
The British Electricity Authority uses thousands of lamps, fluorescent and otherwise. Why should they not embark on the manufacture of their own products? There is no reason why the Forces, who, in face of ever-increasing technical complexity, are more or less relying on the electronic industry for new devices, should not begin to manufacture these themselves? We have only one division for electronic devices; it is that at Portsmouth, controlled by the Navy, and is concerned with silica valves for destroyers and submarines. There is no reason why we should not do these things as a means of offering more competition because these orders contain within themselves a large element of the price value. It would be an incentive to the companies to increase competition among themselves and thus bring prices down.
I throw that out as a suggestion. I do not want to get out of order on this subject, but one of the difficulties in this highly developed industry is that it is dependent entirely upon the excellence of its technical staff, its standardisation and its research. Though that position would face the Government and they would have to start from scratch and recruit the necessary technical staff, in my opinion that difficulty is not insurmountable, and the plan is one which should be considered.
I cannot see that the suggestion of this member of the Commission is one which should be adopted although she is a very able person. The fact is that the whole of the research in this industry is vested practically in the General Electric and B.T.H. Companies, and unless the Government are to go into this thing in a big way it would not be much use just to play about with it.
§ Mr. Cecil Poole (Birmingham, Perry Barr)
But does my hon. Friend not realise that the largest laboratories for research are now in the process of construction by an independent lamp manu- 576 facturer in this country? As for his suggestion about the Government engaging in lamp manufacture, is he not also aware of the very heavy capital expenditure involved before the Government can embark on the making of a single lamp?
§ Mr. Tomney
I know all those things, but I also added to my remarks the fact of the ever-increasing complexity of electronic devices which the Forces are now using. This will go on increasing and, in my opinion, although we vested in the Atomic Commission certain manufacturing rights on behalf of the people, there is no reason why we should not carry on a comparable system on the same basis for supplying the Army with electronic devices, complementary to the electric lamp manufacturing interests.
In conclusion, I would ask the President of the Board of Trade to consider my suggestion and see if he could not arrive at a like conclusion. The capital outlay for electric lamps of all types is not as heavy as my hon. Friend inferred by his interruption. It is research in the past which has cost most of the money, and the Government are now embarking on a project for atomic development and technique which, in some ways, is complementary to what is required for electronic and lamp industry. I consider the project well worthy of consideration in preference to the submission to the Commission by one of its members. This research by a company started by the Government would, I am sure, be most successful.
§ 5.33 p.m.
§ Mr. William Shepherd (Cheadle)
I do not wish to follow the hon. Member for Hammersmith, North (Mr. Tomney) into his careful resumé of the Report on E.L.M.A. lamps, because a lot of hon. Members can do so better than I and some will want to. I do not want either to follow him into the realm of possible Government activities in the lamp and electronic field. I feel that it would be disastrous for Government Departments to add to their present burdens by starting manufacture in a highly technical industry. If it is any consolation to the hon. Member, the Post Office Research Station at Dollis Hill is doing a highly specialised work on certain specialised valves and aspects of electronics, which ought to satisfy him at the present time.
577 The hon. Member submitted one or two points to the Committee which are of interest. He said—and this is a rather remarkable feature of which the Committee would want to take note—that the E.L.M.A. lamp industry was a most efficient one and—I direct the attention of the Committee to this—that most of the industries which have been subject to an inquiry by the Monopolies Commission have, in fact, proved to be highly efficient. This supports what we have always said, and while not denying the right to do certain things with monopoly, it is worth noting that those industries which have been examined have proved to be the most efficient.
The right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) rather sneered at the co-operation of those in trade, and I hope that that will not be the keynote of hon. Members opposite, because I am well satisfied that the best way in which we can deal with this very complex problem is on the basis of cooperation between industry and Government. In the United States, after a long and varied history, they are coming round to that point of view, and I hope it will be widely accepted here in the United Kingdom.
Before I come to some points of substance, there are one or two small points about which I should like to put questions to my hon. and learned Friend the Parliamentary Secretary. First, judging from the report of the Board of Trade, the staff of the Commission has, in fact, been reduced. It stood in December, 1950, at 61 and by December, 1951, it bad gone down to 55. There has been, as there has been in all the main industries, a tremendous increase in the cost of salaries during this period, but there has been a reduction in the number on the staff, and in view of the general desire to see more speed perhaps my hon. and learned Friend would say a word as to how the reduction came about.
The second minor point I wish to make is that I am not at all happy about the reference to industries which have been complained about. Complaints about particular industries, without a guarantee that they have any solid basis, are, on the whole, against our general sense of justice, and these should not be published. The Section of the Act which 578 deals with this matter was put in the Act when it was in Standing Committee—I was a Member of that Committee upstairs—as a sop to some of the wilder elements in the party opposite. It was not put in as a part of the original Bill. I direct the attention of my hon. and learned Friend to this practice, which I do not feel to be wise or in conformity with our conception of justice.
Another small aspect concerns the examination of evidence before the Commission. It often happens that people, in giving evidence, make an allegation against an industry which is under review, and the people engaged in that industry are not always shown the allegations. It is a fact that the Commission discount many of these allegations or take steps to ascertain how far they are true.
§ Mr. Tomney
I do not think that is true, because when I was examined by the Commission I was asked whether I would mind if they submitted my evidence to the electric lamp manufacturing industry, and I said no. In fact, they were supplied with my observations.
§ Mr. Shepherd
It may well have been that the Commission thought it right to submit the memorandum of the hon. Member to the lamp manufacturers. I do not know, but I know there is a general complaint that that is not always done, and if justice is to appear to be done it should follow that if complaints are made before the Commission against an industry, that industry should have the opportunity of seeing what are the complaints and of giving an answer to them.
I do not complain, as some hon. Members have done today, about the inordinately slow progress of the Commission. I do not want this Commission to be a groundnut venture. I am quite happy that we should make a relatively sombre and steady start, because we want to establish a reliable body of case law, and we certainly could not establish it on the basis of a few sketchy observations which were put together in a hurry. I am quite satisfied what we have done here in proceeding slowly is wise, and that these Reports, although they have been slow in coming forward, have indeed been worth waiting for. They provide the basis upon which we can 579 move to something of a much more general nature.
I have listened carefully to hon. Gentlemen opposite and I have not yet heard any complaints about any monopoly which is a State monopoly. I wish later to make some comments about State monopoly. There is nothing more sacred about State monopoly than there is about private monopoly. If we were not satisfied about the speed with which this Commission have worked, we could extend the number of officers. This has been done in the United States of America, where there is an anti-trust division of the Department of Justice with 600 lawyers and a Federal State Corn-mission with 600 lawyers, each competing to bust the trusts and between them providing most remunerative occupations for 1,200 lawyers.
Attempts could be made to introduce legislation to deal with specific practices, but I am not very happy about the introduction of specific legislation. The American example of such legislation is, on the whole, rather discouraging. Mr. Mason, who is the Federal Trade Commissioner, told us when he came over here a couple of years ago that, in 1933, they put a pants presser in gaol for not fixing prices. After the National Industry Recovery Act had been held by the Schechter decision to be illegal they would have put him in gaol if he had fixed prices.
If we rush into legislation I am satisfied that we shall get ourselves into bad shape. I should like to remind the Committee about what has happened in the United States. They have been through all the gamut of legal activity; and where have they got to now? The Federal Trade Commission have decided that the introduction of legislation is not the way to go about this matter. They do something which I commend to my right hon. Friend the President of the Board of Trade as a practical approach.
It is this. After a certain amount of investigation they call together the members of any industry and get agreement upon what are fair trade practices in that industry. In the United States they can then give legal sanction to those practices. That is a much better approach than that of introducing general legislation. There is no doubt that the conditions which 580 prevail in one industry may be against the public interest, whereas similar practices in another industry are not against the public interest. That is why I am against general legislation.
We ought to be careful when we approach the question of the power of the Monopolies Commission, to bear in mind where we want to go. I suggest to the Committee that we are not aiming, in 1952, to abolish all forms of collective action in industry. I am convinced that we must strike a balance between competition and stability. It is true—and one is not a defender of monopoly if one says this—that there are some industries where the value of stability is greater than the value of all-out competition. We have to decide where the public interest lies in all these spheres.
There is another matter to which I specially direct the attention of hon. Gentlemen opposite. After all, they are the arch-monopolists. They have set up more monopolies in five years than have ever been established anywhere in the world, except in Russia, in a similar time. I direct their attention to what is a disadvantage of monopoly. It is not, I submit, a question merely of a lot of people getting together and wanting to extract something from the community. The danger of monopoly does not lie in the attempts of a group of people to exploit the community.
The danger of monopoly lies in its unconscious effect, the effect of removing the stimulus and saying that perhaps anything will do and that the reaction of the customer is not important. All these considerations exist as forcibly—indeed, more forcibly—in State monopolies than they do in private monopolies.
§ Mr. Shepherd
As I have said before, it is impossible to deal with the massive tranquillity of a State industry with the damp squib of a consumers' council. I should have thought that the hon. Gentleman, who is a sensible person, with some knowledge of these matters, would have 581 risen to express his entire dissatisfaction with the effect of consumers' councils in their efforts to get what the consumer wants.
When we talk about monopolies we must get out of our minds the concept, which hon. Gentlemen opposite have had up to now, that there is an essential difference between a State monopoly and a private monopoly. There is no real difference at all. Although I cannot suggest legislation, I hope that at some time or other some organisation will be set up to deal with the State monopolies.
I conclude by saying that we on the back benches on this side of the Committee are most anxious to see the Monopolies Commission succeed. We are very glad that hon. Gentlemen opposite are becoming more realistic. I thought at one time that they were going entirely hay-wire. They used to tell us in the days of yesterday about armament manufacturers who went out stirring up wars in order to sell their ammunition. They dropped that and got on to monopolies and talked about the man who ground the faces of the poor by imposing exorbitant prices.
§ Mr. Shepherd
The gist of what the hon. Gentleman said escapes me.
It is true that in the last few years hon. Gentlemen opposite have taken a more realistic view. We must bear in mind that we are not aiming in our monopoly legislation to drive out all competition. We appreciate that different industries require different practices and that even the stage of development of an industry may affect the decision whether a certain practice is in the public interest or against it. Even the state of the general economic development of a country will determine whether a certain practice is or is not against the public interest.
If we approach these problems from that point of view, the Monopolies Commission can do a great deal of good. British industry can be made much more healthy than it is today if we approach the matter realistically and put aside all the party prejudice which has been injected into this problem. The Monopolies Commission can then do a great deal to provide us with a much more healthy economy than we have had in the past.
§ 5.48 p.m.
§ Mr. Anthony Crosland (Gloucestershire, South)
One of the few agreeable results of the change of Government last November has been the complete change in the temper and nature of the speeches which we hear from the right hon. Gentleman the President of the Board of Trade. We used to have from him, and became very familiar with, excitable and rather deafening bursts of controversial rhetoric.
We had nothing of that today. We had a quiet, moderate and almost nonparty speech from him. It is very hard to recognise him as the same person who used to speak from the Opposition benches a year or two ago. We were grateful to the right hon. Gentleman for some of the statements in his speech today, and especially for the very decent concession which he made when he said that he had a slight prejudice against monopolies. I suppose that that is something for which we on this side of the Committee ought to be thankful. After all, one can think of a number of his colleagues in the Cabinet who would certainly not be able to put their hands on their hearts and say that they had a prejudice against monopolies.
The right hon. Gentleman referred to the non-party approach which stemmed from the 1944 White Paper. I think that it is true—I was not myself a Member of the House of Commons at the time, but I understand from reading the debates—that when the Act of 1948 was passed there was a somewhat non-party approach, or an inter-party approach, with some exceptions, in favour of this piecemeal and gradualist approach, with individual investigation of each case, as against the American method of sweeping blanket prohibition.
But this piecemeal approach was only accepted, so far as the then Government were concerned, or, at any rate, as far as most of the supporters were concerned, on two conditions; one of them that it would not be too gradualist and too slow, and the second, which follows from the first, that general legislation would follow at a not too distant date. My view, which I have held even more strongly as the months have gone by, is that these two assumptions are both now being falsified by events, and that the whole approach of the 1948 Act was probably a mistaken one. I think there is a very strong case for saying that we were 583 wrong and that the former Government were wrong, even with the best motives, and that we want something more effective than we are getting, even after the concessions made by the right hon. Gentleman.
The whole position in this field is very disturbing indeed. It is a little over a year since we had a debate on monopolies; it was on 15th June last year, when a great deal of dissatisfaction was expressed, even from the then Opposition side of the Committee, and even more strongly from the then Government side, with the slow progress that had been made. The position now is much more unsatisfactory than it was then. The Act was originally passed in 1948, and, since then, we have had only four Reports from the Commission and one Order made by the late Government following one of those Reports, and the prospect for the future is that of only two or three Reports a year for the indefinite future.
§ Mr. Crosland
Precisely; the whole process was started in 1946, and, in consideration of that fact, the rate of progress has been intolerably slow.
My right hon. Friend the Member for Bishop Auckland (Mr. Dalton) mentioned a calculation which I had made that, on this rate of progress, it would take 2,400 years to cover the whole of British industry in this process. Another calculation which I made last year was that, if one started walking round the world from Westminster at this speed, one would then have reached Uxbridge. After one more year, I suppose that we are now in the suburbs of Uxbridge.
It really is the case that, four years after the Act was passed, practically every single restrictive practice that was operating in 1948 is still operating today—almost without exception. This is particularly disturbing, in view of the fact that there has been for a long time past a great deal of agreement on what ought to be done.
The former President of the Board of Trade, my right hon. Friend the Member for Huyton (Mr. H. Wilson)—and I agree with my hon. Friend who interrupted to suggest that my own Government had not by any means a blameless record in this respect—as long ago as December, 1950, 584 when he was in office, said there was a case for a serious change in our approach; this was repeated by him in April, 1951, and repeated by his successor in June, 1951. We also have the promise in the Conservative Party election manifesto, and only now, 18 months after all this agreement on methods of dealing with some of the restrictions, has a small step been finally taken.
What makes the present inaction particularly disturbing is the fact that the present Government have completely dropped the former Government's proposal for the abolition of resale price maintenance. It was possible for us to be to some extent reassured under the late Government, even despite the general inactivity as far as monopolies are concerned, because we had hopes on this particular point of resale price maintenance, and we had been promised action, but even that has been dropped, and we have not got the prospect of such legislation to comfort us for the complete inaction and passivity on the general question of restrictive practices.
What makes it much more disturbing even than when the matter was discussed a year ago is that it has now become clear that the provisions in the Act for enforcement were extremely weak and need serious amendment.
The Deputy-Chairman (Mr. Hopkin Morris)
Is the hon. Gentleman's argument directed to new legislation, because if so, it is not in order?
§ Mr. Crosland
I entirely understand that, and most of what I am proposing can be dealt with in the framework of the existing Act. I believe that there is enormous scope for the intensification of the activities of the Monopolies Commission within the framework of the Act.
It has been generally agreed for some time past that some additional action was necessary. First, it was agreed that the working of the Commission must be speeded up, and to say that, if I may refer to what was said by the hon. Member for Cheadle (Mr. Shepherd), implies no criticism of the Commission or of the personnel of the Commission whatever. I agree with what the hon. Gentleman said about the efficiency and very creditable judicial quality of the work which they have done, but they were given an impossible task, and I think that some 585 fairly drastic re-organisation of the Commission and its work is necessary.
This was promised us some time ago by the President of the Board of Trade in the former Government. The right hon. Gentleman who opened for the Government today mentioned what he called a modified panel system, which does not sound a very impressive advance, because if there is to be no increase in the membership of the Commission, and no increase in the secretariat, it is rather hard to see how the work can be speeded up and made more effective with the same number of members and the same secretariat, even by dividing itself up into panels, as the President said.
I think it is quite clear that, if the Commission is to make more rapid progress, it needs a very large increase in its membership and particularly in the secretariat. The hon. Gentleman opposite mentioned the absurd contrast between the staff of the Commission in this country and the staff of the Federal State Commission and the Department of Justice in the United States, and we are really toying with the problem if we think that 50 people in the secretariat of the Commission can deal with matters of this size. We shall clearly not get anywhere until we have a very large increase in the staff, so that simultaneous inquiries can be pursued. There was general agreement on that, but we have not had any statement on this point from the President of the Board of Trade today.
The second point on which there was wide agreement, even as long as a year ago, was that we should ask for inquiry into certain practices in different industries, so that the Commission, instead of taking one industry at a time, could report on certain practices that are followed in a number of industries. The practices which most people would agree we wanted them to investigate all come under the head of exclusive dealing and collective boycott, which have been referred to in every one of the four Reports and have been described in great detail.
They are known to exist very widely, and references have been made to them also in other reports, such as the Simon Report on building materials and the Lloyd Jacob Report on resale price maintenance. There is nothing new about it, and these are the practices which most people are agreed are the most damaging 586 both to industrial efficiency and to civil liberty.
These are the practices which can make it so difficult for a new firm to enter an industry, and for the more efficient firms to expand at the expense of others, and which obviously militate against new techniques, innovations and the like, and they are, as the Commission have pointed out, very serious restrictions on the individual. I think there is pretty general agreement—
§ Mr. Crosland
There is fairly general agreement that these are the sort of practices on which we now have sufficient information to take further action. The President half agreed with this line of argument, and said that he accepted that a general reference to the Commission on this point should be made under Section 15. So far as that goes, we on this side of the Committee are grateful to the right hon. Gentleman; it is better than nothing, and it may produce something effective.
But I do not feel too optimistic about it. He was very vague about it all; he had not decided exactly what practices were going to be referred—they had not yet apparently been referred—to the Commission. It was a little tentative and hypothetical. In addition, the Commission are to have no extra staff or members. They already have seven reports on other monopolies on their hands, and it is hard to see how they can make a satisfactory report under Section 15 in the foreseeable future and at the same time consider the seven industries now before them.
I should have thought that this reference to a report under Section 15 would be a dead letter unless the membership and secretariat of the Commission were largely increased. I do not think that this proposal under Section 15—although we certainly welcome it as far as it goes—is by any means a complete solution to the problem. I believe that a good deal more needs to be done.
I now turn to the question of enforcement as opposed to future action. When the original Bill was being discussed in Committee it was agreed on both sides, to judge by reading the debates, that as and when the separate reports of the 587 Commission were made it would be perfectly proper and desirable for the Minister concerned to make an order so as to ensure that practices reported against by the Commission were discontinued.
We have now had some time to see whether this follow-up action is, in fact, effective. I suggest to the Committee that it is turning out to be quite ineffective. The first Report that the Commission made, as hon. Members know, was one on dental goods. An Order was finally made on dental goods by the late Government which, in effect, told the industry that the practices of exclusive dealing and collective boycott were to cease. This Order was laid before the House last summer.
I should like to hear a good deal more about what has happened in this industry, preferably from a representative of the Ministry of Health, none of whom, I am sorry to see, is present, because the information I have is that this Order has been very largely ineffective. The point of the order, as hon. Members know, was to make sure that independent firms outside the ring in this industry should be able to get supplies. That was the whole point of the Order. The information which I have had, and which I think a number of other hon. Members on this side have had, is that, despite the Order, it is still not possible for a number of small independent dealers in the industry to get supplies. It is most important that we should be given some reassurance on this point.
What appears to be happening is that although the Dental Association have scrubbed their rules and have said to the Government, "We have torn up all these elaborate regulations about collective boycott and exclusive dealing," nevertheless those things go on. I think the Committee ought to have a fairly clear answer from the Government spokesman who is to wind up this debate as to whether or not it is true that independent dealers in dental goods still cannot get supplies from the four largest manufacturers in the industry, who control 68 per cent. of the entire output of dental goods in this country.
If it is true, it means that the Order laid before the House last summer is already a dead letter. As some of us said about the Commission's Report at the time, it was naive of them to suppose 588 that all they had to do was to abolish collective boycott and exclusive dealing. It would also be interesting to take up the point mentioned by my hon. Friend in a Question as to whether or not the recommendation of the Commission in respect of dental goods, so fat as prices are concerned, has been carried out.
The hon. Gentleman will remember that specific recommendations were made about prices. I am glad to see that the hon. Lady the Parliamentary Secretary to the Ministry of Health has now arrived.
§ Mr. Robson Brown (Esher)
On this question of the dental Report and the Commission's recommendations which the hon. Gentleman says were very simple, will he tell us what should have been done?
§ Mr. Crosland
I freely admit that I have not a perfectly clear answer to this. It was obviously worth trying this simple approach to see whether it worked or not. If my information is right, that it is not working because there is gentlemanly collusion, or whatever one may call it, going on even though the rules have nominally been torn up, then I cannot pretend to be absolutely clear in my own mind as to what action is really needed—except in regard to one point, that one cannot possibly enforce this type of regulation without a very much larger enforcement body than we have in the country at the moment. This seems to be the crucial contrast, as the hon. Member for Cheadle (Mr. Shepherd) said, between ourselves and the United States.
§ Mr. Reader Harris (Heston and Isleworth)
Why is the hon. Gentleman so worried about the dental industry in view of the fact that the Commission said, after listening to all the various clauses in the rules:These undesirable results are possible. How far they have occurred or have been avoided we have endeavoured to establishThey then said:We have not found any very great abuse of the powers.…If the Order is a dead letter, what great harm has been done?
§ Mr. Crosland
The hon. Gentleman obviously does not think it worth while doing anything about monopoly. I have read the Report on dental goods, and it is quite true that in it the sentence which he has quoted appears. But it is also 589 true that in the last few pages of the Report the Commission say over and over again that certain practices operate against the public interest. I am not saying that if we abolish these practices we shall settle the dollar balance overnight. But the Commission say quite clearly in regard to dental and rain-water goods and electric lamps that, even though some of the practices have not been badly abused, they nevertheless have operated against the public interest. So much for dental goods, the question of which is much the most serious.
§ Mr. Robson Brown
I just want to say that I entirely agree with what the hon. Gentleman is saying on the question of dental goods. I am not taking part in the debate, but I hope that some reply will be available to us from the Ministry of Health on this particular matter.
§ Mr. Crosland
I am very grateful to the hon. Gentleman, because I know he has some knowledge of this particular industry about which I had a discussion with him some time ago.
I now pass to rain-water goods. In their case a number of recommendations were made by the Commission. The only Government statement we have had on rain-water goods was from the Minister of Works, who said that he had received assurances from the industry that certain changes in their regulations were going to be made. But it really is intolerable that the Committee should be left with the vague statement that the industry have given certain assurances. We must surely be told what the assurances are, and what new arrangement is to be made, as otherwise we cannot possibly judge how effective the action has been.
I very much hope that whoever replies to this debate will give us some exact information about what assurances have been given and in what way the activities of the trade association in that case are going to he altered.
§ The Parliamentary Secretary to the Ministry of Works (Mr. Hugh Molson)
May I answer that point? Some new rules have been made by that trade association which have been submitted to my right hon. Friend. They are acceptable to the Ministry of Works at the present time, and the working of them is being watched.
§ Mr. Crosland
I am grateful for that so far as it goes, but I still think that the Committee ought to know what they are at some future date. It may be that we shall hear from the Parliamentary Secretary whose bona fides obviously we do not doubt in the slightest, or from the Minister of Works, who I hope is not so busy with the Coronation arrangements that he has forgotten his previous enthusiasm for competition. We cannot judge how effective all this is unless the Committee are told. I hope that when the negotiations are completed we shall be given rather more detailed information of what is going on.
I also hope to hear from the Government spokesman why, in the case of electric lamp manufacturers, one of the recommendations—on accumulated quantity rebates—was not accepted. We have not been informed so far why this recommendation, on a matter which has nothing to do with economies on bulk ordering but is a method of enforcing a certain type of exclusive dealing, was not accepted. On the basis of our experience during the last year, it seems to me beyond doubt that the enforcement provisions of the Act have failed in practice.
Obviously in the case of dental goods, and probably so far as the other two cases are concerned, nothing very much has changed or is going to change; and we must have some new action so far as enforcement is concerned. One obvious change which I think the President, or any President, ought to be sympathetic about is that the responsibility for enforcing the recommendations of the Commission should be concentrated in the hands of one Department. It seems to me absurd that one Report is enforced by the Minister of Health, the next by the Minister of Works and the third by the Minister of Supply and the fourth by I forget who, and that none is enforced by the President of the Board of Trade.
I do not see that there is the slightest chance of securing an efficient body of enforcement officers to see that the recommendations are carried out when the responsibility for enforcement is diffused among, I believe, nine different Ministers. I should have thought that that was a nonsensical situation. I agree that we were responsible for it when we were in power, but in the light of experience 591 I believe that it is a thing which should be ended now.
Taking up the point mentioned by the hon. Member for Cheadle, we cannot pretend to treat this matter seriously as long as we have as small an enforcement body as we have now. It lacks teeth. The Department lacks a large body of people who have this one responsibility to see that these recommendations are carried out. This is the main reason why American anti-monopoly action has been more successful than ours ever looks like being. It is not that their Acts are much more successful—they look to me sometimes more foolish. It is that their enforcement department is far more efficient than ours is in present circumstances.
Another point which I should like to put to the Minister is that one of the difficulties in this whole matter is that our information about where monopoly exists is surprisingly small. The Board of Trade naturally must have this information, because without it they do not know what industries to refer to the Commission in the first place. In any event, the public and this Committee ought to have as much information as possible about how widespread monopoly is in Britain, because we do not know at the moment. The only official study ever carried out in this country of the distribution of financial ownership and control of industry was that carried out in 1944 by Leak and Maizels under the auspices of the Board of Trade. But conditions in industry must have changed since then, and there is no reason to believe that the picture today is the same as it was in 1944.
I should like to ask the Parliamentary Secretary to the Board of Trade—and I suggest that it is a very important point indeed—whether he would consider giving the authority of his Department for a further investigation on the Leak and Maizels lines to be carried out now. He knows that this detailed information about the financial ownership and control of industry which is required cannot be obtained from the Census of Production. Unless, therefore, he is willing to initiate a further investigation on those lines in view of all that is changing in the postwar world, we shall go on in our present condition of ignorance.
§ Mr. Crosland
And among them as well.
The 1948 Act, despite all the high hopes set on it, has proved in practice something of a failure. I believe that we must start now with a new approach. I do not believe now—I tended to believe it a year ago but experience of the last year has convinced me otherwise—that merely to make reference under Section 15, although that is better than nothing, can possibly speed up all this work to a sufficient and satisfactory point. I am certain that a new approach is now needed, though I cannot go into detail without putting myself out of order.
We are grateful to the President for the small concession he has made this afternoon, but it is clear from his speech that, despite all the fine words of the party opposite in their manifesto and the magnificent speeches of the Home Secretary in the House about his determination to protect the consumer, no effective action whatever will come from the present Government. It is clear that the promises in their manifesto and in the King's Speech are going on the bonfire with many others of a similar kind. Speaking for myself—and I imagine that most of my hon. Friends would agree—it is clear that if this is all the Government have to announce after having eight months to think about it, then nothing very effective will be done about monopoly as long as they are in power
§ 6.17 p.m.
§ Mr. Basil Nield (City of Chester)
The hon. Member for Hammersmith, North (Mr. Tomney) thought it right to inform the Committee that he had appeared as a witness before the Commission, and I think it right to inform the Committee that I have appeared professionally before the Commission and have drawn some experience of the work of the Commission from that point of view. I hope that it is possible that that direct experience may enable me to make some useful comments to the Committee.
I agree with the hon. Member for Gloucestershire, South (Mr. Crosland) that really no blame can be attached to the Commission for any suggested delay. Indeed, I would go very much further than that and say, with respect, that the 593 Members of the Commission, under the chairmanship of Sir Archibald Carter, and the permanent staff have been most conscientious and painstaking in carrying out their tasks, and they have been considerate to the industries under review and to those who have appeared before them.
I know that this question of delay is one which concerns very many people. Most of the speeches made in this Committee so far have regretted that so much time has passed between the reference of a particular industry by the Board of Trade and the publication of the Report. Here again, in my view there is not much cause to be surprised at that delay under the existing arrangements. The example of the electric lamp industry has been referred to at length, and when one has seen something of the volume of work involved in that case it is not really surprising that the task took over two years.
For the proper understanding of the problem, the Commission thought it right to look at the history of the last 70 years. They examined and scrutinised what I suppose were many thousands of documents, agreements, memoranda and minutes and, as they have said in their Report, they consulted a great number of bodies—35 are named and others are not—including local authorities and organisations of all kinds. I need not refer to them; they appear in the Report upon this subject. When it emerged, the Report covered over 200 pages, and I think that everyone who has read it must take the view that it is a most useful and thorough Report and it is not surprising, in the circumstances, that it took so long to produce.
As has been said, a new method of dividing the Commission into panels has been adopted.
§ Mr. John Edwards (Brighouse and Spenborough)
When he talks about a new method, will the hon. and learned Gentleman tell me whether he means something recent or the arrangements that go back to the middle of 1951?
§ Mr. Nield
I meant the 1951 arrangements. I think that the idea emanated from the hon. Member for Gloucestershire, South in his speech in June, 1951, which I have re-read. A suggestion was put out that the Commission should be divided into panels. The hon. Member 594 for Gloucestershire, South nods his assent, but the hon. Member for Brighouse and Spenborough seems to disagree.
§ Mr. Edwards
I think it is important to get this matter settled because I shall want to return to it later on, in view of what the President of the Board of Trade has said. My impression was that in the debate in June, 1951, the then President of the Board of Trade announced this arrangement as something that was either going to be put into operation or had already been put into operation. That is why I think it is important to clear up this matter.
§ Mr. Turner-Samuels
I should like to be clear about this question of panels. Does the hon. and learned Gentleman mean that it is proposed that the Commission should sit in divisions, just as the Industrial Court does? The term "panel" is quite a neutral one. There may be a panel of one or two people merely to look at and examine a question. That is quite a different thing from a Commission sitting in several divisions simultaneously.
§ Mr. Nield
I have been asked two questions which I shall try to deal with in order. The first one related to the date when the panel system was adopted and also to the authorship of the idea. I have been very kindly handed an extract from the speech which the then President of the Board of Trade made on 15th June, 1951. It is possible that I am wrong about the authorship. The President said:There are various methods of improvement which we shall have to examine and discuss. One possibility, towards which, without in any way committing myself, I am at present inclined to lean, would be to increase both the whole-time and part-time membership of the Commission, so that the Commission could sit in several divisions; each one under a whole-time chairman."—[OFFICIAL REPORT, 15th June, 1951; Vol. 488, c. 2752.]In answer to the hon. and learned Gentleman I would say that I do not think that has been the position. As I understand it, what has happened—and I must be forgiven if I do not know the date—is that the members of the Commission divided themselves into small committees of three or four members to undertake the initial inquiries and investigations into particular industries. 595 There would be several industries being investigated simultaneously, but eventually the whole Commission would have to sit upon the final consideration of the matter and make their report. Therefore, the suggestion that was then made was a new one—about which we may be told—that there might perhaps be adopted a division system whereby only some members of the Commission would deal with each industry.
§ Mr. George Darling (Sheffield, Hillsborough)
Would not the hon. and learned Member agree that it might be a good thing for the facts that are deduced by the Commission's staff to be published before the final report appears, so that we might get hold of them without having to wait so long?
§ Mr. Nield
I should be against that proposal, largely for the reason that in the later stages of each inquiry there is what is usually regarded as the full hearing by the Commission, when the final case for the industry is presented, and it very often happens, judging from my own experience, that further questions are asked, and those who seek to answer them may take a little time and there may have to be another hearing: so the thing must build up until the final situation presents itself. I say that particularly in seeking to answer the point made by the hon. Gentleman. Presenting a case before the Commission is not the same as it is in the courts. One is almost in the position of being a mouthpiece in giving evidence about the affairs of the industry. That evidence is constantly being produced until the very last moment.
I come now to a point which I hope will be regarded as one of substance. Though it has not so far been mentioned today, it has been touched upon in other debates upon this important subject. My chief criticism of the Commission is that it bears the wrong title. It is called the Monopolies and Restrictive Practices Commission. My submission, made as forcibly as I can, is that the use of the word "Monopolies" is a misuse of language in this connection and is harmful to our industry, particularly in the eyes of persons and bodies abroad.
The hon. Member for Gloucestershire, South asked, by way of a rhetorical question, if we could be told the extent of 596 monopoly in this country. I should say that if one uses the word correctly, the answer is, none, apart from the State monopolies. The hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith), who is making noises of disagreement, must listen to my argument before he does so.
§ Mr. Ellis Smith
I have too great a respect for the hon. and learned Gentleman, having heard his contributions on many occasions, not to listen to him carefully.
§ Mr. Nield
I did not mean that the hon. Member was not listening. What I wanted to be allowed to do was to develop my argument so that he could then tell me if I were wrong. When I say that this is a misuse of language, I think that is really correct. I took the trouble to look up the word "monopoly" in Webster's Dictionary.
§ Mr. Turner-Samuels
On a point of order. I want to be quite clear about this point, because I may want to follow it myself. Would not the changing of the name "monopoly" require legislation? I should like to know because I may want to pursue the point afterwards.
§ Mr. Nield
I was about to read the definition which I had taken from Webster. Monopoly means this:The sole power of vending any species of goods obtained either by engrossing the articles in market by purchase, or by a licence from the Government confirming this privilege.An early example of what is called State monopoly was the Charter to the East India Company giving the exclusive right to trade with the East Indies. A modern example of State monopoly is the Post Office.
But again, there is this definition. According to Murray, a monopoly is theexclusive possession of the trade in some article of merchandise; the condition of having no competition in the sale of some commodity or in the exercise of some trade or business.This is a perfectly valid point. In the light of the provisions of the statute, I submit that none of these industries can properly be called monopolies and the Commission ought not to be called the Monopolies Commission.
I must not weary the Committee, and I am sure that all hon. Members present 597 will be aware of the particular provisions of the statute which I have in mind. The position is that, before an industry can be referred to the Commission, it must be shown that at least a third of the goods in the United Kingdom are supplied by one, or two or more acting together. In each of those cases there is still a substantial body of competition. They are not the sole vendors and they have not the exclusive right, and they do not even have to be required to have a majority of the particular business.
§ Mr. Crosland
The hon. and learned Gentleman has been extremely courteous in giving way to interruptions; I wonder if I might ask him this question. He is developing a very interesting point. Would he not agree that the industries with which we are normally concerned fall neither into the category of monopoly as he has correctly defined it, as one single seller, nor into the category of free competition, but into a third category where we have a number of sellers who are not competing against one another?
§ Mr. Nield
That may very well be the situation, that it does not fall exactly into either category. That raises yet another important question as to the right of traders to associate when they deal possibly with buyers or suppliers who themselves have an exclusive right. I am thinking of the British Electricity Authority.
May I pass to the second of my reasons for objecting to this word in the title? I have suggested that it is harmful to our industry, especially abroad. The Committee will remember that under the Havana Charter, and, indeed, other international arrangements, the signatories agreed that each country concerned should take steps to discourage monopolistic tendencies and to put down harmful restrictive practices. I have no doubt at all that eyes abroad watch with care for signs of any monopolistic tendencies or harmful restrictive practices.
I was shown the other day a cutting from a newspaper published in South Africa which had a bold heading: "Such and such organisation declared a monopoly"—I obviously should not identify it—in truth and in fact, what had happened was that the affairs of that organisation had been investigated by a 598 body calling itself the Monopolies Commission. The organisation was not declared a monopoly. It was merely recommended that certain of its practices should be altered. That is, or may be, very harmful to our industry.
I am speaking a little longer than I intended, although some of my time has been spent answering questions by others, which I am glad to have tried to do. It may be easy to say that this is a small point of nomenclature: that Parliament decided this only four years ago and it is rather difficult to alter things now, but I would ask my right hon. Friend to give consideration to what I have been saying. My final words on this part of my remarks are these: I wonder why we should by implication brand British industry as being riddled with monopolies when in fact, as I have sought to point out, there are probably none, except the State monopolies.
May I support the point made by my hon. Friend the Member for Cheadle (Mr. Shepherd) as to the actual procedure of the Commission and the disclosure of evidence? It is a matter which I think should be looked at for this reason. When an industry appears before the Commission, allegations are often made against it. People write to the Commission, and it is only just that an industry which is under review should know the charges brought against it and should be able to refute them if 'possible. That does not always happen. The hon. Member for Hammersmith, North (Mr. Tomney) said that when he gave evidence he was asked if he minded his evidence being passed on. If he had said, "Yes, I do," it would not have been passed on. I think that an example of this sort is important.
The things which people write in about most, as I understand it, according to the last Annual Report, are that they are not allowed to be on an approved list, or that a concern has been unjustly refused membership of an association. The industry that is called before the Commission cannot deal with those allegations unless it knows what they are.
Under Section 8 of the Act, the Commission makes its own rules of procedure. I think that is right. There are on the Commission a number of eminent, distinguished and public-spirited people, and 599 it is right that they should make their own rules of procedure. Under Section 8, the President has a right to issue directions about the procedure. I am told on inquiry that none have been issued. I do not suggest that they should be, but I would ask that this matter of disclosing what may be serious charges against an industry should be further considered.
As to the work of the Commission on the initial issue of deciding whether the conditions to which the Act applies prevail, I do not say that it is easy, but it is mechanical, arithmetical, statistical. It is the second issue which is crucial, namely, whether any particular practice operates or is expected to operate against the public interest. All hon. Members will recall our discussions, when we inserted Section 14 into the Act, making some attempt to define "public interest." It is in that field that the decisions or recommendations of the Commission are tremendously important and far-reaching, because what we all want is a recovery of our prosperity.
After all, "public interest" means the interest of the public—not a section of the public. Consumers, users, persons employed, distributors, manufacturers—all are the public, and that is the interest which has to be considered. It is in these circumstances that I very much hope the Committee's attitude today will indicate support and encouragement for the Commission in the exercise of their functions.
§ 6.40 p.m.
§ Mr. Donald Wade (Huddersfield, West)
We have had a very interesting dissertation—and I hope that word will not be taken as disrespectful—on the subject of the word "monopoly." The actual words in the Title, I notice, are:any conditions of monopoly or restriction or other analogous conditions.think it would be splitting hairs to suggest that the use of the word "monopoly" was inappropriate when we really mean monopolistic tendencies or conditions of monopoly. As regards the effect on persons overseas, I am somewhat impressed by the remarks of the hon. and learned Member for the City of Chester (Mr. Nield), and it may be that that requires serious consideration. However, perhaps he will forgive me if I do not pursue that further.
600 In listening to the opening remarks of the right hon. Member for Bishop Auckland (Mr. Dalton), I gathered that the burden of his complaint was that the present Government, in the eight months in which they have been in office, had failed to carry out what the last Administration failed to carry out in a period of six years. While I am not here to defend Her Majesty's Government, that particular form of criticism does seem to me rather illogical.
On the other hand, perhaps I am being a little ungrateful, because when the last debate took place on this subject the right hon. and learned Member for St. Helens (Sir H. Shawcross)—and I am sorry we do not see him in the Chamber now as often as we did in the last Parliament—paid an unexpected tribute to the Liberal Party when he referred to ourconsistent and progressive traditionand the efforts we had madeto promote intelligent and progressive views."—[OFFICIAL REPORT, 15th June, 1951; Vol. 488, c. 2747]I should have been happier if that tribute and the expression of good intentions which accompanied it had been made earlier in that period of six years of Socialist administration. I should have been more impressed if during that period of six years something more effective had been placed on the Statute Book than the Monopolies and Restrictive Practices (Inquiry and Control) Act, 1948.
The experience we have gained during the three years since the Commission was set up has justified many of the criticisms which were put forward at the time that Act was passed. I realise that I should be out of order in suggesting legislation, but perhaps I might say, in passing, that I and my colleagues have always held the view—we held this view before the war as well as since—that a Commission of this nature could not perform its functions satisfactorily unless there was also a body of law of a comprehensive nature laying down certain general principles and defining what is or is not permissible. At present we have not got that body of law, and the Commission works at a disadvantage. It is expected to decide what is against the public interest, which it is very difficult for any Commission to decide.
Furthermore, there would seem to be three main flaws in the existing procedure. 601 In the first place, it is capricious. I do not suggest for one moment that the members of the Commission act in a way that is capricious. What I mean is that there is an element of chance as to what particular industry will be investigated. The Board of Trade may decide upon an investigation into a particular industry, or a particular trade association.
As a result of the investigation an Order may or may not be made. If such an Order is made, it will, no doubt, forbid certain forms of restriction in that particular industry. But in other industries precisely the same form of restrictive practices may continue unaltered and undisturbed. What is illegal in one industry is legal in another. Or again, it may be that the Minister will be content with mere assurances, as in the case that has already been mentioned during this debate.
On the subject of the Electric Lamp Manufacturers' Association, the "Manchester Guardian" had an interesting comment to make in a leading article on 20th May, 1952. The article began with these words:The Conservative manifesto of the last election promised us a greatly strengthened Monopolies Commission to seek, and enable Parliament to correct, any operations in restraint of trade. Mr. Duncan Sandys appears to think that assurances of good behaviour are sufficient to redeem this pledge. The rest of the world may be a little sceptical.The article concludes:Both this and the last Government seem to have accepted the conclusions of the Lloyd Jacob Committee that collective or group sanctions to maintain retail prices are to be condemned. If they are bad when practised by dental manufacturers and disapproved of in the sale of electric lamps, why are they not made generally illegal? Surely this would be one useful step towards 'setting the people free'.I believe that this hit-and-miss method is hound to be unsatisfactory. Furthermore, it is unfair to industry, since manufacturers, distributors and retailers are in a state of uncertainty as to what is or will be permitted, and as to whether an Order which is made in the case of a particular trade association will or will not be applied to another trade association.
The second flaw, as I see it, is the problem of the time factor, to which other hon. Members have already referred. It would appear to me 602 impossible to cover all the ground within a reasonable space of time. Personally, I calculate that it would take 50 years to do all that is required, assuming that we followed the existing procedure at the present rate of progress. The hon. Member for Gloucestershire, South (Mr. Crosland) referred to that very well-known investigation by Mr. Leak. Mr. Leak read a paper to the Royal Statistical Society on 20th February, 1945, and he listed 118 representative commodities, sufficient toreveal the widespread nature of monopoly production,each of which was in 1935either wholly or in effect the monopoly of one or two firms.Now, there is no evidence to suggest that in the intervening years there has been any marked change towards greater freedom. Probably, the tendency has been in the other direction. Therefore, I do not think I am exaggerating when I say that it would take a period of 50 years. It would certainly take a very long time to cover all the ground by the existing methods.
Thirdly, there is today no clear distinction between legislation, investigation and the enforcement of the law by the judiciary. I think that I should probably be out of order in pursuing that point, but at the present time the three functions are all mixed up.
I agree that within certain limits the Commission has performed and is performing a very useful purpose, and I welcome the decision of the Minister to extend its work. But I believe that its success is not so much due to the effectiveness of the few Orders that have been made—and I have not the same enthusiasm as the hon. Member for Gloucestershire, South for the procedure of making Orders against this, that and the other trade association. I believe that the value of the work of the Commission is to be found not so much in that procedure as in the publicity which results from an investigation taking place.
§ Mr. Wade
On this subject there was a very interesting comment in the "Financial Times" on 14th November, 1951. If hon. Members will bear with me I will read part of the leading article. 603 It referred to the subject of electric lamps. It said:General service electric lamps provide one of the few examples of goods whose price has been substantially reduced since before the war. The index of retail prices for lamps, which stood at 100 in 1924 had receded to 58 by 1938. Reductions of price brought it to 42 in 1945 and 36 in 1949. Those reductions at a time of rising costs naturally resulted in sharp falls in profit margins. What is significant, however, is that both these reductions in prices were made as the consequence of publicity. In the first instance there had been an investigation by the Board of Trade into the costs of four members of E.L.M.A.; in the second instance the reduction was made for 'political' reasons—political 'in the sense that it [the reduction] was intended to meet public opinion which was hostile at the time because of criticism—in E.L.M.A.'s opinion unfair criticism—publicly directed against the E.L.M.A. and its methods'.The writer of the article goes on to point out that it was publicity which encouraged the Association to liberalise its rules.This single fact surely points to one of the ways along which the Government should now act.That was a further interesting observation, which, I think, is very true.The fundamental difficulty that many observers have felt about Associations of Manufacturers, however beneficial their operations may be, is that they are in the end responsible to no one but their members. They have power, not exactly without responsibility—indeed successive reports by the Monopolies Commission show them to be acting with considerable sense of responsibility—but without the automatic responsibility which is enforced by publicity. The existence of the Monopolies Commission itself is a first attempt to remedy this state of affairs. The next logical step is to require certain associations to lodge annual reports with the Commission, giving the kind of statistics about regulations, prices, and profits, which the present inquiry has elicited from the E.L.M.A.I cannot go into the remedies which I should like to suggest without embarking on a realm which is out of order.
§ Mr. Ellis Smith
Would the hon. Gentleman go this far? When we have a Labour Government in future, and take action, will he support it?
§ Mr. Gerald Nabarro (Kidderminster)
Before the hon. Gentleman leaves 604 E.L.M.A., I would point out that he has given an erroneous impression of the causes of price reduction since 1935. The principal cause, of course, is the enormous increase of production, which is the logical concomitant of a wide increase of electrification. That is the principal cause of the reduction.
§ Mr. Wade
Perhaps the hon. Gentleman will take up the matter with the editor of the "Financial Times." The filing of certain essential information, thus making available facts which at present are not generally known, would be of value both to Parliament and to the general public.
In the speech of the right hon. and learned Gentleman the Member for St. Helens, to which I have already referred, the right hon. and learned Gentleman said:I rejoice to think that it falls to our lot"—he was a little premature in this—to carry out a policy which the Liberals have long supported and on which they have helped to create an increasingly informed public opinion."—[OFFICIAL REPORT, 15th June; 1951; Vol. 488, c. 2747.]I hope we have helped to create an informed public opinion, but I am not sure that the public is yet well informed. There are plenty of generalisations, and there is a general feeling that all is not as it should be, but the general public do not know the essential facts, and the Monopolies Commission can help considerably in making the facts known.
I think it would also be a step in the right direction, so far as trade associations are concerned, if they were required to be registered; and if they were all called upon, as I have suggested, to lodge annual reports to provide certain vital information as to the restrictions imposed on their members, which, directly or indirectly, must affect the general public. It would still remain the duty of Parliament to lay down the law. I think that that proposal is particularly important in the case of such practices as the collective 605 boycott and exclusive dealing, which have been referred to by many hon. Members during this debate.
Then, again, I think the procedure may be altered in another respect. There is a way which would help to get over the problem of the time factor and the vast amount of work which the Commission would have to perform if it were to cover all the ground. Assuming that Parliament considers certain practices not necessarily bad in all cases, then, instead of the Commission's making an inquiry at the request of the President of the Board of Trade and then issuing a report followed by an order, it would be better if the procedure were the other way round—if certain practices were regarded as illegal unless the trade association obtained the consent of the President of the Board of Trade.
I think that that would simplify matters, and make it possible for the Commission to perform its duties. I support the view that the scope of the Commission's work might be extended. I cannot see any logical reason for excluding State monopolies—
§ Mr. Wade
—but I do not propose to pursue that, as I believe other hon. Members will be dealing with it in this debate.
Let me make two general observations in conclusion. This is a matter of grave importance in the first place because it inevitably affects the cost of living, and there was no time when the subject of the cost of living was of greater urgency and importance than it is today. But there is another reason why it is important—perhaps, even more fundamental, particularly to those of us who believe that there is value in private enterprise and private ownership of property. In fact, it is we who should be more concerned about the problem of monopoly than those who take the Socialist view.
I do not believe that those who adopt these practices do so out of evil, antisocial motives. I think that in most cases it is the desire for security—some form of security against too keen competition. I think that to be the underlying reason. But there is very grave danger in going too far along that path towards security, and fair, assured profits, and so forth. After all, the ownership of property 606 carries with it certain risks and responsibilities, and the case for private enterprise and private ownership in industry is that there are those risks and responsibilities. If we travel too far along the road to-words security we shall eventually be told that we have removed all the attributes of private ownership, and we shall be told that there is no point any more in permitting private ownership in industry.
Therefore, it is we who favour private ownership who ought to be most concerned. I might put it in another way. There are two dangers. One is the danger arising from the zeal of the collectivists, and the other is the danger created by restrictionists and monopoly capitalists appearing in the guise of the defenders of free enterprise.
§ 7.0 p.m.
§ Mr. W. F. Deedes (Ashford)
I do not think that any of us would take exception to the sentiments with which the hon. Member for Huddersfield, West (Mr. Wade) ended his speech. He made one important observation at that point which is profoundly true. In spite of what has been said in this debate, very few of the trade practices which we have been discussing stem from evil intentions. I think it was a mistake for the right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton), who, at the beginning of his speech, referred to people convicted of a whole series of gross and anti-social malpractices. He exaggerated the evils of what we have under review today.
Most hon. Members have paid tribute to the work of the Monopolies Commission, and I should like to do that, too, because, whatever criticism we may have to make, and however disappointing our expectations may be as to what has been produced, this is no reflection upon the conscientious and assiduous way in which the members of the Commission have performed their duties. As the President of the Board of Trade said, their work is of a high judicial character. I consider that they were given a difficult brief. I had no responsibility for it at the time, and I think that it was no less difficult because there was a broad measure of agreement on both sides of the Committee as to what they should do and how they should set about it.
607 No one who has read the four published Reports which the Commission have produced can suggest any lack of zeal or diligence in their investigations. Some people suggest that four large Reports in 40 months is not all it might be. But if they were added together and were the accumulated work of a Royal Commission we should all consider that the Royal Commission had done a good job in the time. Nor, contrary to some suggestions in this debate, do I think that there is very much in the published Reports for party recrimination. This Measure was agreed. If the Commission have lacked effectiveness, they have lacked it over a period for three-quarters of which the other side were responsible.
We had a debate initiated a year ago by the hon. Member for Gloucestershire, South (Mr. Crosland). I heard his speech on that occasion, and I heard it again today. There was some contrast between the attitude he adopted when his party were responsible for the adoption of this Act and the attitude he adopted today. The tone set last year by the hon. Member for Gloucestershire, South was well laid down by the right hon. Gentleman who was then President of the Board of Trade. The right hon. Member for Huyton (Mr. H. Wilson) said, apropos of the speed at which the Commission has worked,… each of these inquiries demands the most scrupulous examination and consideration of a very large mass of evidence … in view of the importance of the matters to be dealt with it would be wrong if thoroughness were to be sacrificed to speed."—[OFFICIAL REPORT, 14th December. 1950; Vol. 482, c. 1322.]That was an agreed sentiment about the work of the Commission up to tonight, and I do not think that we ought to go back on it today.
I, personally, have always had some doubt whether the Commission, as then constituted—and they have not been increased appreciably in numbers; I think from seven to the statutory maximum of 10—would achieve the whole purpose which they were originally intended to fulfil. They have been set to deal on a very narrow front with a most difficult and complex problem—probably more complex than was ever conceived when the 1948 Act was under discussion. I think that the most solid conclusion that their labours have produced is that we 608 did not originally set the Commission along entirely correct lines.
Before we are asked to consider any fresh machinery within the scope of the present Act—I am not discussing fresh legislation—I think that there ought to be some hard-thinking about exactly what we now intend the Commission to achieve in the light of the experience of the last 40 months. I am not sure that there has been enough hard-thinking on those lines, not only in the Board of Trade but outside the Board of Trade, where these things should be freely and openly discussed, as there might be.
It was widely felt when this Commission was set up that they would have to deal with substantial, fundamental evils in our industrial set-up. I want at this point to quote a remark from the speech of the hon. Member for Gloucestershire, South, who has considerable knowledge of this matter. He ended by asking the President of the Board of Trade if we could be told a little more about how widespread the practices under review were. He added, "We simply do not know." I think that is true. I think that the excellent work done in connection with the four industries on which we have had Reports has still not enlarged our knowledge as to how widespread these practices are.
I think that a little more study and fewer sweeping generalisations with which people are apt to approach this subject would be a good thing. I am not saying that evils have not already been found; of course they have. Specific or potential malpractices have been uncovered. I would add that very few trades or institutions or professions would survive the scrutiny given by this Commission and come out of it without something slightly "fishy" being discovered about them.
§ Mr. G. Darling
Would the hon. Gentleman, who is associated with the industry, agree that the distribution of newspapers would come under the category which he has just described?
§ Mr. Deedes
We had a Royal Commission of our own, and it would be outside the scope of this discussion to comment on their findings.
§ Mr. Charles Fletcher-Cooke (Darwen)
Is it not a fact that this Act deals only with manufacture and not with the distribution services?
§ Mr. Deedes
I am not going to embark on the wider field opened up by the hon. Member opposite. I do not condone such practices as have been uncovered. All I suggest is that hon. Members should be careful in making sweeping generalisations about how widespread they are, particularly in view of upholding the good name of our industries, not only in this country but in the world at large.
A question which we should be asking is: How far has this inquiry touched a fundamental problem in trade and industry? My answer would be: To a much less significant extent than was thought at the time. It is appropriate here to scrutinise the criteria which the former President of the Board of Trade applied, when introducing the Bill, on the subject of public interest. No one was able to define public interest. The Government of the day apologised for not being able to produce a definition. What the right hon. Member for Huyton said was:… the over-riding test of the effect of a restriction on the public interest is this: does it make the job of selling British goods in world markets easier or more difficult? The second test is, in my view: Does it result, in the long run, in the consumer getting more of the goods he wants more cheaply.…"—[OFFICIAL REPORT, 22nd April, 1948; Vol. 449, c. 2036.]We might ask, now: How far has the Commission smoothed the path towards achieving these two objectives? If one asks that question and looks at the result, one finds the answer disappointing. Along the lines we are proceeding now, I doubt whether it will be ever anything else but slightly disappointing. We have long been led to believe that monopoly is a major factor in our post-war industrial decline. That is a sentiment which lends itself to resounding political observations, and they have been made. There is a fine, crusading spirit about the suggestion that this is at the root of our industrial difficulties. There is a tendency, however, grossly to over-simplify the problem. I think it is possible, although much less attractive politically, to make out quite a strong case in the opposite direction.
Sir Henry Clay, an authority on the subject, has pointed out that between the wars our principal competitors, Germany, Poland, Belgium and France, were more cartel-minded than we were and that some industries known to be guilty of 610 monopolistic practices have sometimes been among the most successful and progressive, and some pursuing more independence and less co-operation than others have been less successful and much less stable. The cotton industry has at times shown that trend. As the President of the Board of Trade said, there is about this an atmosphere of "different times, different customs"; fashions tend to change and what at one moment appears to be a good thing seems some years later to be very bad. I am not now arguing the rights or wrongs of the practices, but am saying that the subject is probably more complex than we thought when we set the Commission their job. The subject does not lend itself to a simple formula of detection, judgment and punishment.
My right hon. Friend will find difficulty in presenting legislation to meet any special condition or atmosphere of economic circumstances. The legislation that we pass has to meet economic circumstances at all times, good or bad, and we must devise legislation which stands the test at all times. Although it is attempted, it is wrong to try to apply special measures to special circumstances. There is no case for pretending that this subject of monopoly represents a black spot in an otherwise immaculate economy. I do not propose to deal with the nationalised industries, but I would say, in passing, that the right hon. Gentleman the Member for Lewisham, South (Mr. H. Morrison) and the right hon. Member for Huyton wanted to include the nationalised industries in the Act.
There are two things which we must now do. We must consider the field of monopoly for which the Commission are responsible against the background of the climate of industrial and economic policy in a general sense more generously than we have done in the past and we must also make sure that the machinery devised to check abuses does not in turn, and in a different sense, render us guilty of serious constitutional abuses. I see trends in that direction in some of the proposed solutions. To take the first point, against that background we find extraordinary paradoxes when we try to make out that industrial monopolists are a different breed from anyone else.
Although exclusive dealing backed by boycott is condemned, the "closed shop" 611 still has some support in some places. We find differential prices being chased by the Commission, but they are the basis of many railway and electricity charges. Quotas evoke adverse criticism, but they have been, and still are in part, a basis of our horticultural import policy and have a considerable amount to do with the Marketing Acts. The artificial economy contrived by some industries is condemned because it conceals economic realities, but such conditions have applied, and still apply, widely to much of the agricultural economy. It is wrong to try to make out that it is improper for business to do what Governments consider they have a right to do.
As Sir Henry Clay said some time ago, a manufacturer buys his labour from an organised monopolist—a trade union—his coal or other power from Government monopolies, his railway transport from another Government monopoly, his raw materials at world prices, which are often sheltered from the full force of competition by Government support. That is the background against which we should now try to consider the problem more broadly than in the past.
I repeat that I do not condone the practices uncovered, but the Commission have found them most effectively camouflaged because the background of much of the Government controlled economy is precisely the same colour. That is one of the Commission's difficulties in rooting out some practices alleged against industry. It has also been made clear that some practices have arisen from the equal evil of excessive taxation and difficulties about capital re-equipment. We have a certain responsibility in this. Many of the evils arise from a greater evil. I am suggesting not that the hunt should be called off, but that we should keep a sense of perspective when joining in the hunt.
With regard to abuses in the constitutional sense which might arise in the operation of the Commission, I have never been happy that the House or the Commission were absolutely certain what they were pursuing or what they would do with the quarry when they had caught it, and I am even less happy about the methods of the pursuit. The Commission have been required to be counsel for the prosecution, jury and 612 judge. In each specific case their powers have been extremely wide, and yet the orbit of the inquiry has been incredibly narrow. The results have been unfortunate.
The Commission are required to examine matters reported to the Board of Trade. Reported by whom? We have never been told. In what order are they reported and taken up by the Board of Trade or by the Commission? As it is reported on and dealt with, each case is subject to an Order in this House. We have had one already. I believe this to be unfortunate example of delegated legislation. The Board of Trade's Report gives the future programme of events and takes two pages to cover the list of industries which may be considered. Who decides the order in which those industries are to be taken? Up to now it seemed a matter of chance. Whose head goes on the block next is really a fortuitous circumstance. It is a matter of "this year, next year or in 1975 it may be our turn." That is a most unfortunate background. Even if the Commission is to turn from specific industries to specific practices, the order of batting needs to be more clearly defined.
The procedure was defended by the right hon. Member for Huyton, on Second Reading, when he said that cases which might appear to be quite small in their initial effect would serve as test cases on which the Commission might be able to build up a useful case law. What sort of case law? Surely not case law which any lawyer would accept. The Commission have spent three years building up case law, but I doubt if any judge or jury would look at it. There is some confusion about what the Commission are building up in the way of legal precedents and what we shall do with the precedents when we have them. I should like further reassurances on that from my right hon. Friend.
Broadly, I warmly welcome the prospect of a slight turn in the course pursued by the Commission from particular industries to particular practices. We must all admit that the 1948 Act was imperfect and that its errors are now perceived, and we are now prepared to seek on broader, wiser and more realistic lines other solutions which bear a closer relation to the industrial problems which today beset us.
§ 7.30 p.m.
§ Mr. George Darling (Sheffield, Hillsborough)
There is much with which I agree in the speech of the hon. Member for Ashford (Mr. Deedes), particularly when he suggested that the order of priority of investigation of the industries alleged to have malpractices should be considered in the light of recent experience. I hope we shall have some information about that from the Parliamentary Secretary when he replies.
I agree with the last statement made by the hon. Member that the Monopolies Act is obviously not perfect, and there seems to be general agreement in the Committee about that. Not only that but, if I may just get out of order for one second, in all three parties represented in this Committee there is agreement that there should be legislation to strengthen the Monopolies Act. I know that it is out of order to discuss legislation now, but the prospect of strengthening legislation should be at the back of our minds in this debate, because if we fail to get what we want from the present Act, then if we are to carry out the promises made by all three parties, new legislation will have to come along.
I think I may say—not with hindsight, because I said so at the time—that the Monopolies Bill had serious weaknesses. I was not in the House at the time when the Bill was passing through, so I did not express my views here; I was not under any party discipline and I was able to express my views outside perhaps more forcibly. It seems to me that when the Bill was introduced the Government did not pay sufficient attention to legislation in other countries on the same subject. The monopoly legislation and the restrictive practices legislation in the United States, Canada, Sweden and elsewhere revealed the weaknesses now apparent in the present Act, and had been dealt with in legislation in these other countries.
The first weakness we ought to consider is that of what I might call time—the appalling amount of time it takes to start an inquiry, to publish the facts, to publish the report and to get some consideration of the facts. We have the prospect of getting six reports in four years, and at that rate of progress it will take a long time to cover all the malpractices in industry. There is another serious weak- 614 ness in this question of time. When the Bill was being discussed in Committee, it was stated by a number of hon. Members that the publicity which was being given would tend to scare those people in industry who were indulging in objectionable practices; the fact that there might be investigations would lead them to stop the practices.
Having seen the Commission at work, 99 per cent. of the trades and industries in the country that are resorting to objectionable practices have got nothing to fear, because it is a hundred-to-one chance against any single one of them being investigated during the next 10 years. It is largely because of that that the Act has become the very weak instrument that it is, instead of being the scarifying influence that it ought to be. It ought by now to have scared quite a number of trade associations, industries and firms into better behaviour, but it has failed to do that. Industry realises that because of the time factor it has very little to fear in the way of an investigation.
We have to consider how we can strengthen the Commission within the present Act without going outside it, because the topic of new legislation is out of order in this debate. It seems to me—and this is where I differ from the President of the Board of Trade when he spoke about the working of the Commission—that the job of the Commission has got to be very clearly divided into two parts. One is purely fact-finding. I think that when the facts have been ascertained they ought to be published quickly without any comment or suggestion of what action should be taken. That is one way of dealing with this question of time.
It is true that when the trade association or firm, which has been referred to the Commission and about whom the facts are being published, read the facts, they will make statements in print and in public alleging that many of them are not quite as the Commission has, in fact, reported. That does not matter. We shall be beginning a public discussion of the facts. There is not sufficient public discussion of monopolies and restrictive practices in this country. But the Board of Trade is making a profound mistake if it thinks it can carry out the spirit of this legislation by not giving us the full 615 facts about any action that it is proposed to take, because this is where the scarifying influence comes in. I think we ought to be told what action is going to be taken, and the more information that can be given about restrictive practices, objectionable practices and monopoly practices of all kinds, and the more publicity that there is, the better it will be.
Before we begin to consider what ought to be done with the facts when we get them, we ought to consider—and this is where I come to a point made by the hon. Member for Ashford—the question of how the trades are themselves selected for investigation under the present system. I understand that the President of the Board of Trade considers the complaints and decides the order in which they should go to the Commission. If I am wrong about that, no doubt I shall be corrected, but I think that is right.
§ Mr. P. Thorneycroft indicated assent.
§ Mr. Darling
I am not criticising the right hon. Gentleman for doing it in that way, but I think the job would be far better done if we could start the other way round and compel firms and trade associations in this country who have restrictive practices of one kind or another to register those practices. Those restrictive practices are bound to be known unless they are in a hidden agreement which never comes to the surface. There are conditions of sale and agreements between manufacturers, wholesalers and retailers, and there are firms which operate behind patents which give them a monopoly of the processes that they operate.
We know that there are patent arrangements which give a legal sanction to a firm or trade association that act together for the purpose of price fixing, quota fixing and so on. We want all those agreements reduced, and this is how we should begin. Whether it could be done under the present Act I do not know, but if you, Mr. Colegate, would agree that we can assume it can be done under this Act, then I can continue. I think it could be done. This registration of what are called cartel agreements has worked very well in Sweden, and I think we should look at the Swedish experiment—because it is only an experiment.
§ Mr. Nabarro
The hon. Gentleman is quoting the case of Sweden copiously. Is it not a fact that these arrangements in Sweden apply primarily to manufacturing organisations? They do not apply to the equivalent of our trade associations, which are primarly concerned with fixing prices and wholesale and retail margins in the process of distribution—and it is always distribution which is the core of the complexity.
§ Mr. Darling
The hon. Gentleman anticipates what I was about to say. What I was saying was that this registration of agreements has worked very well in Sweden but that there are two weaknesses. One is that the arrangement refers only to manufacturers, as the hon. Gentleman said, and the distributive arrangements, which, I agree, are where we find the worse malpractices, are not registered. That is the first weakness. The second weakness—and this is something which we should note—is that the mere fact of registration does not mean that all the information is available about the effects of a cartel agreement and there is, therefore, need for further investigation.
What I suggest is that the field of investigation would be more clearly seen and we should be far better able to separate the sheep from the goats if we had such a registration of all restrictive agreements and practices. If I am not out of order in saying so, that should also apply to international agreements. I will not pursue that point any further.
What are we to do with the facts when we get hold of them? I have said that, first of all, there should be a fact-finding body which publishes the facts—and, as I have said, let there be public discussion and argument about the facts. But where, after further examination, the facts are proved to refer to practices which are harmful to trade and industry generally, in the terms of the Act, we must certainly quicken the procedure for action. I shall not pursue that point further, for it has been covered by previous speakers.
Quite obviously, when we get information and when we know that there are some restrictive practices which ought to be stopped, unless there is a proper enforcement system those practices will continue even though they are offences 617 against the law. After all, it is very difficult to get over to the various trades and industries of the country information about the legal position. Unless we are quite certain about all the firms which are concerned in those operations, and unless we have a proper enforcement system, a number of these people will continue to get away with the practices which we and the Commission condemn.
Here I want to say a few words about the question of taking action against practices which are common to quite a number of trades and industries, a point with which the President himself dealt. Collective boycotts and exclusive dealings have been mentioned, and the right hon. Gentleman has said that he will get the Commission to consider these collective common practices a little further and to see whether any common action can be taken, presumably to stop them.
These common actions have been investigated very thoroughly over a long period, starting in our own generation with the Greene Committee of 1930, which investigated the restraint of trade. Every body, official Government body or unofficial body, which has considered collective boycotts and exclusive dealings has urged that action should be taken against them. I am not suggesting that all these agreements for such collective action are necessarily harmful. Some may be working in the public interest; some may have started to prevent the public from being exploited. But we want to examine all of them, to separate the sheep from the goats and to take action against those which are obviously not in the public interest.
I will give a few examples, and to begin with I will declare my interest, for I am speaking for the Co-operative societies of this country. I hope the Parliamentary Secretary will reply to the two points which I now wish to put to him. I shall not go over the whole ground, because hon. Members have heard the Cooperative societies' case before, but the fact is that many manufacturers get together to prevent Co-operative societies from having supplies of their goods because the Co-operative societies choose to distribute their profits as a rebate to their customers and not as share interest to the shareholders.
That is all it is, and it is a very simple matter. Is there anything socially, 618 economically or morally wrong with that method of distributing profits, in the opinion of the Government? Have the Government any complaint against that method of distributing profits—that is, distributing them as rebates to the customer, as dividends on purchases? Do the Government believe there is anything wrong in that? If they do not believe there is anything wrong in it, then, because of the existence of this Monopolies Commission, we want the Government to take specific action to prevent Cooperative societies, in particular, from being hampered and, in some cases, as I could explain, from having their trade crippled by the fact that they cannot obtain supplies from manufacturers when the reason they cannot get those supplies is that manufacturers have one complaint only—that the societies distribute their profits as rebates on purchases. One of my hon. Friends says the word should be "surpluses": I prefer to call them "profits."
If the Government have no complaint against that method of distributing profits, what action do they propose to take to stop the series of boycotts aimed specifically at Co-operative societies? Now that the Monopolies Commission exists, the only way in which such boycotts can continue is through the Government taking the view that this method of distributing profits is wrong. I put that challenge to the Government. After all the discussions we have had in the House on the subject of Co-operative trading, it is time the Government told us what they think about this method of distributing Co-operative society profits. It was not necessary for the last Government to tell us their view, because we knew it.
I shall not go over the whole series of boycotts against the Co-operative movement, because hon. Members are aware Of them, but I should like to give one story of the Scottish Co-operative Wholesale Society which has been taking its mobile trading vans in a very good social way to the scattered villages and hamlets and the crofters' homes in the Highlands and on the Islands of Scotland—taking the services of the big cities to the scattered areas.
In order to do this effectively, they have quite honestly bought up, in the open market, one or two private traders' businesses, including newspaper agencies: 619 but, of course, they are not allowed to distribute newspapers. That is an effective boycott which is imposed or acquiesced in by all the newspapers in this country, that oppose monopoly and get up, so to speak, in the public prints, and stand for free competition and none of these practices that we are now concerned with. The only way the newspapers can get to those places in the Highlands—the newspapers that the Scottish Co-operative Wholesale Society are not allowed to sell—is by Scottish Co-operative Wholesale Society transport. That is one example of the idiotic situations that can arise.
§ Mr. Deedes
As the hon. Gentleman has addressed that story to me, perhaps I ought to point out that one of the tasks of the Royal Commission that investigated this industry was to discover whether such monopolistic practices existed, and that the answer was "No."
§ Mr. Darling
I shall not pursue that matter, because I should be out of order. We know how the matter was put to the Royal Commission. Frankly, there is not a single Co-operative society in this country that is allowed by the Retail Newsagents' Federation to sell newspapers. That is an effective and 100 per cent. boycott. The facts speak for themselves.
Another point arose in the speech of the hon. and learned Member for Chester (Mr. Nield) when he mentioned the arithmetical measurement that gives the clue to the industries and trades that should be investigated. They are well worth reconsidering. I may be getting out of order again here, because I do not know whether amending legislation would be needed to do what I am suggesting ought to be done.
One aspect of this arithmetical measurement, the one-third of the trade or of the physical assets of the industry, needs serious reconsideration. It is the question that arises when local authorities are asking for tenders for the supply of parts of houses, equipment, office furniture, or whatever it may be. In some cases, particularly on the building side of their activities, tenders naturally and usually come from local firms. There may be a ring of local firms tendering and agreeing among themselves to direct the tenders where they want them to go and at the 620 price that they suggest. That may be a 100 per cent. offence in that area, but the firms concerned may have less than one per cent. of the whole trade of the country. The position of local authorities in this particular ought to be looked at, to make sure that a local boycott is not measured by national figures in the particular industry.
§ Mr. Fletcher-Cooke
I think the hon. Gentleman will find there is provision for taking the proportions locally as well as nationally, and that the point is covered in the Act as it stands.
§ Mr. Darling
I have seen that Section of the Act. I have probably been exaggerating when talking about the comparison between local and national figures. Firms that want to influence contracts and to arrange prices among themselves probably ensure—by widening the area of their operations—that they come within the terms of the Act, and are not investigated. I suggest that the special position of local authorities ought to be looked at. I suggest first of all that all firms should be compelled to register; whether that requires new legislation or not ought to be considered.
§ Mr. Darling
The Government ought to take steps immediately, not to ask the Commission to give further consideration in a long-winded kind of way to the common objectionable practices that we want to get rid of, but to bring proposals before the House to get rid of these practices so that we can discuss here the action that ought to be taken, particularly the action in regard to Co-operative societies, which calls for special consideration.
In any case, in the construction of the Commission itself, the fact-finding side ought to be greatly strengthened. Publication of the facts ought to precede publication of the considerations of the action that ought to be taken, of the reports, 621 and so on. The more public discussion we have over the widest possible field the better for British industry and the healthier British industry will become.
§ 7.46 p.m.
§ Mr. Charles Fletcher-Cooke (Darwen)
I am sure that we have all listened with the greatest interest to the hon. Member for Hillsborough (Mr. G. Darling). With much that he said I entirely agree. I would just advance as a matter for consideration the suggestion that we should not go too fast. More is on trial in the work of this Commission than merely monopolies and restrictive practices.
In its structure the Commission is open to various serious ethical objections, in that the victim does not know what offence he has committed until after he has been tried. This is an old objection to this form of procedure, although I do not think that it is fatal, but it means that we must all be very careful when we break, as we are breaking, a fundamental rule of natural justice.
In the words of the right hon. Member for Bishop Auckland (Mr. Dalton) it means that somebody has been "called up and convicted by the Monopolies Commission"—these were his words—and we should remember that such persons have not been infringing any law which they can read or understand and that the law in this matter is, as it were, ex post facto. This position is totally new in English legal history and might be said to be reactionary, but I do not think that it necessarily need be, provided that we are very careful.
§ Mr. Turner-Samuels
Is that quite correct? Is it not the fact that the particular firms are being investigated, and not tried?
§ Mr. Fletcher-Cooke
That is how I should like to see it work out, but the word used by the hon. and learned Gentleman's right hon. Friend was that many of these industries had already been "convicted" of malpractices by the Monopolies Commission.
§ Mr. Fletcher-Cooke
No doubt, but the attitude of the right hon. Gentleman was also clear, and the attitude in this matter is very important because that is what gets publicity rather than the Act.
622 That being so, it is difficult to support the suggestion that the Commission should operate in panels or divisions. If there is to be a gradual deduction of the law from individual cases, it is essential that the matter should be in one hand, and particularly in the hand of a chairman, or in the hands of the Commission as a whole. It is all very well in courts of law to sit in divisions, because the divisions know what the law is that they are to enforce.
The Commission is not only a fact-finding body, but is judge and also legislator in this case. It is difficult for it to sit in various divisions simultaneously because it may be legislating in contrary senses simultaneously. Already the work of the Commission has shown surprising results. One cannot assume that all these malpractices are necessarily against the public interest. That may sound an Irishism, but I think hon. Members know what I mean.
I was impressed by the finding in the Report on the cable industry that the individual and independent producers outside the Cablemakers' Association were in favour of that association fixing the price instead of being up in arms about it. It reminds me of a story I was once told by the head of a firm of multiple grocers. He said that the last thing they wanted to do was to buy up the small grocers. If they left one small grocer in every area of the country it meant that they could fix their prices at the same level as those of the small grocer and make a higher profit because their costs were less and their efficiency greater, and then they could not be accused of being monopolists. That illustrates the extreme difficulty of assuming that practices are necessarily bad. It is essential to wait for more experience from this Commission before we can decide whether things that may seem bad in a sellers' market are necessarily bad in a buyers' market.
In his opening speech the right hon. Member for Bishop Auckland made great play with the sinister things that go on behind locked doors. Locked doors and the Star Chamber sound very bad, but I appeared professionally before one of those locked door tribunals enforcing Motor Traders Association covenants for the sale of new cars under covenant. Certain motor traders tried to break the 623 one-year or two-year covenant and the trade has its own tribunal in the West End by which they may be put on trial.
There are great theoretical objections to that, but neither the late Government nor this Government has objected to the motor trade doing that; in fact, they have welcomed it. It has taken a great load off their shoulders in regard to enforcing those covenants which are greatly in the public interest in a sellers' market. Therefore, it is not right to talk about locked doors as if they were always bad. We have not had enough experience of the operation of this Commission in a buyers' market and, until we have had that, it would be unwise to separate the operation of a body which in its short history has proved valuable.
My hon. Friend the Member for Ashford (Mr. Deedes) spoke of the importance of acquiring a body of rules good for both a sellers' market and a buyers' market which would not have to be changed each succeeding year. I agree with that because, if we are constantly changing the rules and the definition of the public interest, we shall get industry into such a muddle that it will have no confidence in the essential purpose of this Measure, with which we all agree.
That brings me to the question of enforcement. One of the reasons why things seem to be slow is because the Commission, consciously or unconsciously, has confirmed the view that it is necessary to take the confidence of industry along with it. If it goes in for a tearing campaign of investigation, it will lose the confidence of industry and, as at present constituted, it cannot hope to enforce its findings unless it carries the confidence of industry to a large extent. It is only by agreement that this can be done.
It may be the fact that it cannot be done even that way. I think the hon. Member for Gloucestershire, South (Mr. Crosland) implied that, sooner or later, we shall have to adopt the American system by which vast bodies of enforcement officers, highly skilled accountants, all in the Government service, all highly paid—because accountants can demand high wages—enforce the findings of this or some other Monopolies Commission in the way that the Sherman and Clayton Acts in America have to be enforced.
624 I do not think that such a possibility could be faced by anyone in this Committee with equanimity. The consequent charge upon the public exchequer would be enormous and, even if it were adopted, I am not sure how effective the creation of a large new system of economic crimes would be. It is assumed too readily by the hon. Member that the enforcement procedure in America is effective.
§ Mr. Fletcher-Cooke
I know that impressive court orders are made splitting up Standard Oil, dividing the share of markets in the Aluminum case, and so on. However, I doubt if, in spite of that elaborate network and vast expense, the old boy network has been effectively broken up in America. In fact, I propose to spend the long vacation in America studying this point.
§ Mr. Crosland
This is interesting and important. I agree that it does not work with 100 per cent. efficiency in America and that there is still collusion, but I think there is much less in the United States than in this country. [HON. MEMBERS: "No."] May I put my question? If the hon. Gentleman dislikes the proposal I made for a more efficient enforcement body, does he propose to leave the matter completely as it stands at the moment?
§ Mr. Fletcher-Cooke
No. The hon. Member is probably right when he says that the old boy network in America may be less effective than here, because they are not such old boys in the sense that they do not work in the same way as we do, and because the old boy network is not quite so strong there quite apart from any question of monopolies or restrictive practices. Here, it is extremely strong, and that reinforces my point, because it is only if we can get the old boys on our side in this country that we shall ever achieve anything unless or until there is some sort of police state to break up the old boys' association altogether. In other words, we either have to go the whole hog or else carry the confidence of industry with us.
I believe that this Commission can carry the confidence of industry with it, though it may be slow in doing so. If, however, it can, it can save an immense amount of public expenditure and ill-feeling and a great increase in lawyers' fees and in the police—and a particularly 625 nasty form of police at that—then it is worth saving, but it cannot be done unless industry has confidence in its work.
§ Mr. Percy Daines (East Ham, North)
The hon. Gentleman refers repeatedly to the confidence of industry. It has already been established that there are certain practices condemned by the Commission that are common in quite a number of industries. We hope that when the legislation has been passed industry will accept it and change accordingly. What does the hon. Gentleman mean by industry having confidence in the work of the Commission when so far we have no evidence that some industries are prepared to put their house in order in the light of what is generally condemned?
§ Mr. Fletcher-Cooke
No industry, until it has been actually examined, would admit that it was not in order. It is only after a decision by an impartial body, such as this one, that an industry will admit to itself, let alone to anyone else, that what it is doing is not perfectly proper, right and honourable. In 90 per cent. of the cases investigated industry has agreed to reverse certain practices hitherto adopted. It will take time to see whether industry honours that agreement.
§ Mr. Maurice Orbach (Willesden, East)
In the meantime, if the industries could get away with their malpractices, presumably they should do so.
§ Mr. Fletcher-Cooke
Until somebody has proved it to be so, it is not a malpractice. It is quite wrong to prejudge the issue and to say that something is a malpractice until an independent body has said so; it cannot be assumed to be anything but a good practice.
For example, I referred at the beginning of my speech to a "closed door." That is something that everybody regards automatically as a malpractice, and yet a closed door tribunal to enforce the motor car covenant was supported and encouraged both by the last Government and by the present Government. It cannot be assumed that because there is a slogan about closed doors, they are always wrong.
It is interesting that the pressure against the Commission, the pressure to divide itself so as to increase its work, 626 to increase its powers and to increase the enforcement of these things, comes from two quarters. It comes from two strange bedfellows. It comes, first, from the Americans, who have folklore considerations about this matter and to whom it is an act of faith that any arrangement for the protection of industry is almost automatically wrong. It comes also from the far Left. This must be one of the few occasions on which the far Left and the Americans agree.
I suggest that both are wrong. Until we have discovered from more experience exactly how fast and how far it is proper to go, it would be quite wrong to tamper with an Act that is working well, which has entirely new and rather dangerous machinery, and which has already produced results.
§ 8.2 p.m.
§ Mr. M. Turner-Samuels (Gloucester)
I have listened to most of the debate, and my impression is that it has been carried on very successfully on academic lines and that the usefulness that the Commission can and ought to serve has under present conditions not been stressed to any extent whatever.
The hon. Member for Darwen (Mr. Fletcher-Cooke) for instance, used some of his time to deal with the elements of enforcement and the "old boy" network. I am not sure that that is not a step far too much in advance of any practical consideration that we need to have this afternoon. But even so, is it really suggested that under the provisions of the Act, and by the powers that are conferred upon the President of the Board of Trade, enforcement could not be made absolutely effective? I question very much indeed that there is anything whatever in the issue of enforcement. If there is the will to do it, the way is there, clearly indicated by the Act and by the powers possessed by the President of the Board of Trade.
I have said that the debate has followed academic lines. In this respect, we have heard of the various Reports that have already been issued by the Commission. I do not belittle those Reports, but in my opinion—I say this emphatically, and I am sure the public will agree—not a single topic in any of those Reports touches immediately or essentially the urgent demands which might well come within the purview of the Commission.
627 In my opinion, the Commission are being used as a sort of legal textbook-publishing institution. We have had an echo of this from other speakers, including the hon. Member for Darwen, who referred to the Commission having a body of law; and someone talked about the high judicial quality of the work of the Commission. That may well be true. I should be very sorry to blame the Commission for any work they have done or for any activity of theirs that is on record to date. If any blame is to he ascribed, it must be attributed to the President of the Board of Trade and to no one else.
It is perfectly clear, even from the speeches from both sides of the Committee today, that no one is satisfied either with the progress or with the nature of the work already done by the Commission. The reason for this dissatisfaction is not far to seek. It has not been emphatically expressed today but, quite obviously, it has been in the background all the time. It is because the immediate needs of public interest are not being served. The whole object of the Act and the whole purpose of its introduction was that it should serve the purposes of public interest.
Therefore, I say, as an introduction to my observations, that the real work of the Commission has not begun, and that the sooner it is started the better. It is the President of the Board of Trade who has the responsibility for setting it in action, and he ought to honour this responsibility promptly.
If I wanted to use this point for political purposes, I could justify that observation by reminding the right hon. Gentleman that the Conservative booklet "The Right Road" said distinctly, as part of the promises and the policy put before the electorate by the Tory Party at the last election, that a Tory Government would "use the Monopolies Commission to the full." The Government, however, are taking a long time to think about it.
§ Mr. Fletcher-Cooke rose—
§ Mr. Turner-Samuels
No, I cannot give way. I cannot in any way understand the suggestion that for practical purposes the scope of the Commission is limited. Not even the academic arguments that we have heard could prove that to be 628 true. Let us, therefore, consider the purview of the function of the Commission, the source from which they derive their powers, and what they cover.
The scope of the Commission covers all inquiries which relate to any goods supplied by anyone. I have heard references this afternoon to a particular industry being referred to the Commission by the President of the Board of Trade. That is altogether incorrect. The case of any person or persons, firms or associations, can be referred by the President of the Board of Trade to the Commission regarding their practices in relation to the supply of goods, the processing of goods, or agreements and arrangements in connection with goods. The fact that the Commission themselves have no power to initiate any inquiry throws the responsibility much more heavily upon the President of the Board of Trade, and wherever the public interest comes in issue in respect of something which the Commission ought to be concerned, it is his duty to see that the matter is submitted to them.
Is there anyone who has not long since realised, or who does not know of, the existence of agreements and arrangements of restrictive practices in connection with the production, sale and supply of goods, and particularly the distribution of goods? As a further development of the observation I made that the purview of reference is not limited, Section 15 of the Act actually provides—as it was designedly intended to provide—for general questions to be submitted to the Commission so that no one could escape from practices of a restrictive nature for some narrow, technical reason. That point arises not in its relation to any particular trade, not in any narrow compass at all, but on an issue of what effect it has in practice on the public interest. That is the broad fact and purpose of the Act.
Anyone who reads Section 14 of the Act will see that it is the keystone of this legislation. That was its purpose and it was that which inspired the Act, that the public interest should be safeguarded. It has been said rather sarcastically from the other side of the Committee that public interest was not defined and that Labour Ministers said they could not define it. That is only half the truth.
What was said was that it is true that the term public interest is not defined, and 629 it is right that it should not be defined, because once we circumscribe it there is a danger that something which really ought to be looked at by the Commission cannot be looked at because of some technical exclusion. Anyone with any common sense knows at once that if a commission, or anyone else, looks at a question and a set of circumstances and says it is inimical to the interests of the public there is no reason why we should have any technical, academic or restrictive definition to cover it.
Any of these questions can be submitted by the President of the Board of Trade. He makes a preliminary examination of the matter. It is not as though anyone capriciously or frivolously were to hand over a question to the Commission for examination. That is not the process at all. No one but the President of the Board of Trade can refer any question to the Commission. Obviously, he will not act merely as a conduit pipe, but will consider the position and determine whether it is appropriate to refer the matter.
Once the Commission have a matter referred to them they have the fullest powers to deal with it. They have the fullest powers of procedure, can make their own rules and procedure and can take evidence. They can take evidence on oath and call for and enforce the discovery of documents. If any of these things is not attended to, or if the orders of the Commission are disobeyed, the Commission can apply sanctions. The provision of the 1948 Act is more than ample to cover anything immediately requisite to the public interest in these inquiries.
During his opening remarks, I put a question to the President of the Board of Trade. When I put it to him he put on that cherubic expression of innocence with which the Committee is very familiar. Usually it masks on his part nescience of the point put to him I asked: What about the cost of living? How comes it that the President of the Board of Trade has not referred to the Commission, pertinent, pressing, relevant, essential, urgent matters of restrictive practices—price rings, and controls, and things of that kind, the result of which is leading to a rise in the cost of living? With that cherubic blank on his innocent face he looked as if he had never heard of the 630 cost of living, as though this legislation had nothing to do with the cost of living and as though it would be an outrage even to mention such a thing to the Commission.
Anyone who knows anything about the present situation—if we asked the housewives they would tell us—about restrictive practices with which the Commission would be very much concerned if they were asked to look at them and how distribution is cramped and impeded, knows that prices are high partly because we cannot get the benefit of reductions from improvements in distribution. We all know about re-sale price maintenance and particularly about trade associations, of which I shall have a word to say in a moment. We know about boycott and price rings. Are not all these where they raise the cost of living operating against the public interest?
§ Mr. Turner-Samuels
I say to the President of the Board of Trade that he is not doing his duty, that he is failing in his, duty in not referring these matters to the Commission in the interests of doing something to reduce the rising cost of living.
I agree, of course, that the machinery of the Commission is quite inadequate. I do not blame the Commission for that; I sympathise with them. It is perfectly clear that we can get nowhere with this work any more than we could in the industrial court, which rapidly found that they had to sit in divisions. It would not be possible to run one division only and get through all the work. It is most essential in matters of this kind that these questions should be dealt with rapidly and effectively. If the Commission are to be able to do their work their machinery must be adequate to the task, and so must the number of members of the Commission employed. They must be able to sit in divisions and the number of divisions must be adequate to the amount of current work.
What precisely the number of divisions should be it is not for me to say. It is clear that the President of the Board of Trade and the Committee will have to 631 consider the number sitting in those divisions with knowledge, experience and expertness sufficient to give a decision which would command the confidence of the country and of trade. It is equally clear that these divisions must lead to speedier action. This idea of putting out four Reports in four years does not meet the needs of the situation at all. We want something much more practical than anything the Commission have yet done.
Look at prices today—prices are affected by all these things. Prices today are absolutely fantastic. Take furniture, clothes, or food. What do we find? I do not want to go into the Lloyd Jacob Report, but can anyone deny that there are combines covering all these items The result of those combinations is that prices—
§ Mr. Turner-Samuels
No, let me finish my point first. Combinations are springing up, and does anyone deny—I have no doubt that the hon. Member is deeply touched by this—that prices are either going up or remaining static instead of coming down.
§ Mr. Turner-Samuels
Let me finish my point, and I will give way. I ask why, following upon that, there has been no reference of any of these matters to the Commission by the Board of Trade. I think we have a right to ask.
§ Mr. Nabarro
I am obliged to the hon. and learned Member for giving way. He has been quoting the Lloyd Jacob Report. Is he indicating a split in the Labour Party, because all his hon. Friends do not agree with him? I have here a quotation of something said by the hon. Member for Ogmore (Mr. Padley), President of the Union of Shop, Distributive and Allied Workers, who said, of a statement by the former President of the Board of Trade, that there was profound disquiet in his union at the proposal to make price maintenance schemes illegal; thus expressing precisely the opposite view to that expressed by the hon. and learned Member.
§ Mr. Turner-Samuels
I am not concerned with any sectional interest; I am concerned with what the Act is concerned with—the public interest. I understand, of course, that hon. Members opposite are there to protect sectional interests, but I am here to protect the public interest.
I have already said that the Tory Party, in their manifesto—their booklet, "The Right Road" says distinctly and invitingly to the electorate that they will use to the full the Monopolies Commission. What have they done?
§ Mr. Fletcher-Cooke rose—
§ Mr. Turner-Samuels
Let me finish my sentence. Instead of that what have they done? They have come to this House in order to hand over steel and transport to private interests and to throw new town public houses into the laps of the brewers.
§ Mr. Fletcher-Cooke rose—
§ Mr. Turner-Samuels
Just a moment.
Apart from that, when one looks at the work of the Commission—electric lamps, dental goods, rainwater goods, insulated electric wires and cables—what impact has that on the struggle of the working class and the housewife to meet the cost of living? None at all. The President of the Board of Trade must know that, and I hope the Parliamentary Secretary will deal with the point. That work does not touch the surface of the problems we have in relation to restrictive practices, and it does not relax the stranglehold of vested interests on the home or on the larder. Does the hon. Member for Darwen (Mr. Fletcher-Cooke) now wish to intervene?
§ Mr. Fletcher-Cooke
I have been trying to do so because the hon. and learned Member has twice repeated our pledge that we would use the Monopolies Commission to the full. Is he suggesting that the Monopolies Commission have not been working hard during the last six months, that they have not been working night and day? I can assure him that if he is suggesting that his suggestion is false.
§ Mr. Turner-Samuels
I leave the hon. Member with his comforting thought. The facts are on record.
Let me briefly go into the question which I mentioned—the distribution of 633 goods. Everyone knows that the public are being deprived of the benefits of improved distribution and are losing the benefits of the low costs of distribution, and that the surplus profits are merely going into the pockets of restrictive traders. That is not merely my view; it is that of the Lloyd Jacob Report.
That Report showed that the distributive trades are being stifled by collective price maintenance schemes and methods of trade which prevent the reduction of costs and prices. Surely that is a matter, especially as it is the subject of a Report, that the Commission should investigate, and along with it, this question of trade associations. Everyone knows that trade associations exist to enforce price agreements against the public interest.
§ Mr. Turner-Samuels
I do not accept that, but even if it were so it would not make it right.
Reference has been made to the Lloyd Jacob Report. I do not want to occupy time by reading an extract from it but I would refer the Committee to what the then President of the Board of Trade said on 2nd June, 1949. Members will see what is said about the recommendations on the abolition of collective resale price maintenance and the effect it is having upon prices, etc.
I need only mention building costs. Everyone knows that they are going higher and higher, and it is being seriously mooted whether, before long, local authorities will be unable to build because of the price of building. It is perfectly clear that the effect of that rise is leading to most excessive rents which people really cannot afford to pay.
I wish to refer, in conclusion, to contracts in restraint of trade. I do so because it is not very widely known that these contracts are not illegal. What happens is that if one goes to the courts to enforce such a contract the courts refuse to do so because such contracts are against public policy and against the public interest.
Here are three things which an association can do under English law and I should like the Committee to consider their implications. A trade association can sell at a fixed price and can refuse to sell otherwise; in other words, it can be 634 absolutely arbitrary as to what the public must pay for its goods. It can notify, by means of a stop list, members of the association of persons who have infringed prices or dealings and can deal with them accordingly. In many cases people have been put out of business because of that, and they can prevent by lawful means any indirect supply of goods to the public at economic prices.
There has been some talk about an association making rules and submitting them to the President of the Board of Trade. It does not matter at all what rules an association may make or submit to the President today, because tomorrow they can pass a resolution which can cancel out all the rules they have made, and they can enforce that resolution. There is no legal sanction, enforcement or "old boy" network about the rules of a trade association. The President of the Board of Trade is speaking with his tongue in his cheek when he refers to the idea of an association submitting a set of rules to him and suggests that that would meet the case or be in any way satisfactory.
The truth is that the President of the Board of Trade with the party behind him, is hedging on this vital issue. It is an issue which takes no account of some of the academic nonsense which we have heard this afternoon but embraces the very real and serious problems and struggles of hundreds of thousands of people in this country over rising prices and the cost of living. It is that subject which the President should consider. That is the only context in which he should look at the Act and at the work of the Commission. If he does that he can send at once to the Commission questions to be resolved quickly which will help the public and will greatly add to the credit of the Commission themselves.
§ 8.31 p.m.
§ Mr. Reader Harris (Heston and Isleworth)
It is not often that I have the pleasure of rising to say that I disagree with almost everything that the last speaker has said. Usually I am able to say that I agree with part and disagree with a little, but in the two and a half years during which I have been a Member of the House of Commons seldom have I heard such prejudice, bigotry and nonsense as we have just heard from the 635 hon. and learned Member for Gloucester (Mr. Turner-Samuels). I cannot understand how any hon. Members can stand up and calmly say that everyone believes that price maintenance agreements are against the public interest, that collective boycott is against the public interest and that exclusive dealing is against the public interest. Even some of the hon. Friends of the hon. and learned Member for Gloucester have said that there are cases where these things are in the public interest; but he says that there is none.
§ Mr. Turner-Samuels
The hon. Member is trying to make a debating point. He knows very well that I was referring to concrete cases where the cost of living has been raised because of these practices.
§ Mr. Harris
The way in which the hon. and learned Member put it was a little unfortunate. I almost blush as a member of the Bar to hear a silk talking about restrictive practices. [An HON. MEMBER: "No advertising."] The hon. and learned Member for Gloucester is not allowed to appear in court unless he has a junior with him. What sort of restrictive practice is that?
§ Mr. Turner-Samuels
It would not apply in the hon. Member's case because we are against each other.
§ Mr. Harris
I hope we should not be always against each other in court.
It is also a great privilege to take part in this debate. I look forward to it every year, because every year we have a debate on monopolies or restrictive practices. We had one in June, 1950, another in the middle of June, 1951, and here we are having another about 12 months later.
I always look forward to this annual debate because it is the one day of the year when I hear the Labour Party extolling the virtues of private enterprise and fighting hard for the rights of the small man to trade and for manufacturers, big and small. This is the one day out of the 365. On the other 364 days we have to listen to them running down private enterprise and saying what a lot of crooks and criminals private industrialists and traders are and how they soak the public and grind everybody to dust. This day is like a breath of fresh air.
636 Earlier we had the privilege of seeing the hon. Member for Perry Barr (Mr. Poole) float into the Chamber like Prince Charming and stay only long enough to tell his hon. Friend the Member for Hammersmith, North (Mr. Tomney) that he was talking nonsense about the B.E.A. manufacturing lamps. They could manufacture lamps cheaply, of course, for they could make up the price by subsidies from the charges. The Tory Party are not going to stand for that sort of thing. [Interruption.] They are certainly not. They do not want to put up charges to consumers and so raise the cost of living.
§ Mr. Daines
The hon. Member would employ his time much better if he told us how private enterprise works in the tyre industry.
§ Mr. Harris
I have only just started, and I was going to try to keep off tyres. But as I have been invited to say something about them, I shall have much pleasure in doing so. I cannot help pointing out that after the Socialist Party had been in power for two or three years, I heard their Socialist friends saying, "Since Labour has been in power we have had hardly any bankruptcies. Carey Street is almost empty." One of the reasons is that we have had trade associations growing up or, in the phrase of the hon. and learned Member for Gloucester, "combines creeping up upon us." We have been getting a little order into industry by having some re-sale price maintenance agreements, so that the trader knows exactly where he stands.
I have one supporter on the other side—the hon. Member for Ogmore (Mr. Padley)—who has already been quoted by my hon. Friends.
§ Mr. Harris
I will quote another paragraph from his speech. He said:Our union has had 50 years of bitter experience of 'eastern bazaar' conditions in the distributive trades, low wages, and sweated conditions, and we shall fight against any attempt to make the present 'free-for-all" scramble even worse.I am sorry that the hon. Member is not here to fight with his colleagues on that side of the Committee.
I should like to deal with one or two suggestions of hon. Members on the other side which seek to meet the present situation, particularly the one made by the 637 hon. Member for Hillsborough (Mr. G. Darling), who said that things might be speeded up if the Commission published the facts it managed to find as quickly as it could before getting down to conclusions and recommendations. I am not an expert and I can only go by what I see in the Reports. These Reports, which are pretty lengthy, consist practically entirely of facts. If one looks at the Report on cast iron rain-water goods, one finds that it runs to 131 pages, of which about four or five in the middle are conclusions and recommendations. Pages 61 to 66 are conclusions and recommendations; the first 60 pages and the last 60 pages are facts, including the appendices.
I imagine it must take many months to get hold of all these facts. That, surely, is what takes up the time. The recommendations and conclusions are very short. We find the same thing if we look at the Report on the supply of electric lamps. That is a Report which runs to 200 pages, of which 14 pages in the middle consist of conclusions and recommendations and the other 186 pages of facts. What an enormous bundle of facts. It must take them months to get them, and they do so with the assistance of people like the hon. and learned Member for Gloucester who get briefed for these jobs. It must be very paying for them.
I want to refer specifically to the proposal made by the President of the Board of Trade that the Commission should exercise the powers already given to them under Section 15 of the Act.
§ Mr. Daines
My hon. and learned Friend the Member for Gloucester is not here. Surely, in common fairness, the hon. Member should cast his net a bit wider and refer to the briefs which the present Attorney-General used to get before he came here.
§ Mr. Harris
I would remind the hon. Member that it is the usual custom for Members to remain until the persons following them have finished their speeches. If the hon. and learned Member cannot wait, I have no sympathy for him.
§ Mr. Orbach
The hon. Member is talking of the hon. and learned Member for Gloucester. He has been sitting here all day.
§ Mr. Harris
I, too, have been sitting here all day. I should like to deal with another point which was made by the hon. and learned Member for Gloucester, in relation to the public interest. I will do what the hon. Gentleman did not do and quote what was said by the then President of the Board of Trade at the time the Monopoly (Inquiry and Control) Bill was going through the House. The hon. and learned Member for Gloucestershire, South claims that the Government did not fail to define the public interest; but they did fail to do so, and this is what the then President of the Board of Trade said:… some have suggested … that we should set out a definition of the public interest in the Bill. The Government have not thought it necessary or desirable to do this. I think every Member of the House knows what he means by the public interest. … I can sincerely inform the House that we have tried our best to work out such a definition and have failed."—[OFFICIAL REPORT, 22nd April, 1948; Vol. 449, c. 2035–6.]There is an admission of failure by the then President of the Board of Trade, and the hon. and learned Gentleman suggests that we should now ask the Monopolies Commission to do something which Parliament and the Government failed to do—to define the public interest. Nobody can say exactly what it is, which is why we have such extraordinary statements from the hon. and learned Member for Gloucestershire, South that all these things like collective boycotts and exclusive dealing are against the public interest.
Turning next to the proposal by the President of the Board of Trade that the Monopolies Commission should exercise their powers under Section 15 and consider what action can be taken on the Reports which have already been submitted, I can only say that I am profoundly pessimistic. It seems to me that they will only come back to where the Lloyd Jacob Committee were in 1949. The Report of the Lloyd Jacob Committee reads, in paragraph 114:It appears to us to be contrary to the public interest for a manufacturer to use his power to cut off supplies in such a way as to obstruct the growth of particular methods of trading, to impede the distribution by another manufacturer of competitive goods or to deprive the public of the benefits of low cost systems of distribution.When we get that conclusion, what shall we do about it? We shall still 639 have to look at every industry individually, otherwise the thing does not make sense. Even the Lloyd Jacob Committee had to give precise examples from various industries before their Report made sense. It will clearly not be possible to pass any legislation which says these are things which are completely and absolutely wrong, leaving it to the trade associations or various industries to make their cases.
The time factor would preclude such action. Who is to decide whether or not a restrictive agreement is in the public interest or against it? Parliament has not been able to decide; the Government of the day could not decide it. Are Board of Trade officials to make the decision, or some accountants? How long will it take before we get round to examining every single agreement and to deciding whether or not it is in the public interest? I am not against the proposal that trade associations should register their rules. Registering every single agreement might also be possible. But it is not possible to pass legislation to say that all these things like collective boycotts and exclusive dealings are, ab initio, against the public interest. We should throw industry into chaos if we did that.
What about industries where the goods require an after-sales service, such as motor cars and tyres? In the tyre industry we have arrangements which hon. Members might call exclusive dealing. One cannot sell a tyre in this country unless one is on the tyre trade register. But it is not very difficult to get on to the register; almost anyone can get on to it. Indeed, there are 26,000 names on the tyre trade register, and anybody can sell a tyre who can prove that he has a shop, that he knows how to fit a tyre and that he has premises available for doing it.
Clearly, we do not want tyres fitted badly or there may be accidents. It is reasonable that there should be some check before a man is allowed to sell a tyre. Hon. Members might say that this is exclusive dealing and they might make regulations against exclusive dealing which would necessarily include such a practice, but surely it is reasonable exclusive dealing and in the public interest. Nobody argues with me on this.
What about motor cars? There are resale price maintenance arrangements 640 in the motor car industry, and very strict ones—and, my goodness, if they had not been strict how would anybody have got a motor car in the last few years with the tremendous shortage there has been?
§ Mr. Harris
Prices are coming down. If there had not been these very strong resale price maintenance agreements nobody would have been able to get a car except at a fantastic price, whereas throughout all these difficult years, although people have had to go on waiting lists, and have had to wait for cars, at any rate they paid the right prices for them when they got them. [HON. MEMBERS: "Oh!"] Well, the Labour Government in five and a half years of office did not manage to devise a better system than the one in operation at the moment. The former Minister of Supply stood at the Box one night—I heard him—and explained that they had tried to improve the scheme for the allocation of motor cars, and failed. I agree that the system is not perfect, but it is not anybody's fault that there is not a better method.
§ Mr. Pannell
I did not think I was asking the permission of the hon. Gentleman the Member for Kidderminster (Mr. Nabarro). I thought I was asking the hon. Gentleman the Member for Heston and Isleworth, who is speaking. As I understand the hon. Gentleman, he is speaking about some sort of planned economy. We want to hear about free enterprise.
§ Mr. Harris
I am sorry that the hon. Member missed the first part of my speech. I was just commenting on that very thing. This is just the one day in the year when Members of the Labour Party want free enterprise. For the other 364 I have got to listen to them running it down.
I also want to take the President of the Board of Trade to task for not carrying out the Conservative Party's election pledges. One of them was quite definitely that, as soon as we were returned, we would see that the nationalised industries 641 were brought within the purview of the Monopolies Commission. Let us have that. I should be very much happier if they were brought in.
Let us have a Monopolies Commission which is going to probe into every restrictive practice—including the restrictive practices of trade unions as well, because it is conceivable that their practices are helping to keep up the cost of living. [Interruption.] Oh, yes, there are sorts of restrictive practices that go on in industry and in the trade unions. If we are to have a Monopolies Commission to look into restrictive practices for the purpose of keeping down the cost of living, let it have a jolly good look at the whole lot, and let us start with the big monopolies—the real, pukka monopolies—of these nationalised industries.
§ Mr. Orbach
When I look at hon. Members opposite, I think we want more restrictive practices, not fewer.
§ Mr. Harris
I am in a complete muddle now. [HON. MEMBERS: "Hear, hear."] I have been sitting here from 3.30 listening to Socialist Members saying, "We want to do away with restrictive practices," and now one comes along and says he wants more of them. These divisions in the Labour Party are too confusing for words. We must be careful not to have a General Election just yet, or some hon. Members opposite will be in trouble.
§ Mr. Harris
Not at all. It is the Labour Party who have got into such terrible confusion. It is so. Why is it that we have them telling the country, "It is these monopolists, these industrialists"—they call them monopolists—"who are keeping up the cost of living and putting up prices to the public," and generally running down everybody who is engaged in trade or who manufactures anything or even tries to export goods to keep this country going? They do that for 364 days in the year and then—why is it?—on this one day of the year they come along and say, "Leave them alone. We want enterprise. We want less restrictive practices."
I end by urging my right hon. Friend to take this matter very seriously. I do not think the measures he has proposed today are really adequate. Section 15 is not going to get us anywhere at all. 642 because when the Commission has come to its conclusions—which may be a very long time, for, as the hon. Member for Gloucestershire, South has said, it has got certain things to look into now—but when it has produced some recommendations under Section 15 it will still have to look at every individual industry before the recommendations can be applied. That is for the simple reason that in some cases it will be right to apply their recommendations and in others it will not. I therefore ask that at an early stage the Government get on with the job of strengthening this Commission, enlarging its scope and its powers, and bringing the nationalised industries and trade unions under its purview.
§ 8.50 p.m.
§ Mr. George Chetwynd (Stockton-on-Tees)
The hon. Member for Heston and Isleworth (Mr. R. Harris) need not worry about the result of the next Election, because he obviously has a great future on the music-halls when he loses his seat.
Having listened to this debate, I think it is quite clear that we all love the Monopolies Commission, but that some of us happen to love it more than others. Listening to the hon. Member for Darwen (Mr. Fletcher-Cooke), I thought that he was going to strangle it by his solicitude for its welfare; he seemed to be perfectly happy and content with the fact that since it came into operation we have had four Reports, one Order and three recommendations.
If that satisfies him, it certainly does not satisfy me, and I am sure that it does not satisfy my hon. Friends. In fact, if the Reports came out more slowly they would scarcely come out at all. It is right that we should not consider the work of the Monopolies Commission in a vacuum. Until recently it has had the appearance of an academic exercise. We must connect it with the cost of living, because anything which will lead to more efficient production and a cheaper form of distribution, which will enable us to have a better standard of life and do something to lower our cost of living should be encouraged.
There are two tests that I would apply to the work of the Monopolies Commission in order to judge whether or not it 643 has been effective. First, as a result of the work of the Commission has there been any significant change in a downward direction in the price of goods with which it has been dealing? All those who have studied the resale price maintenance agreements and the Lloyd Jacob Report know full well that artificially high prices have been created by restrictive practices, and so on.
I ask the Parliamentary Secretary: What has happened to the price of dental goods? They came in for a very severe handling in the Report of the Monopolies Commission. We made an Order last July; since then there has been considerable delay in implementing that Order, and I think we are entitled to know today whether there has been any significant change in the price of dental goods. That is something which affects the national economy through the National Health Service.
We are also all concerned about the high cost of house building, and I should like to know whether there has been any significant change in the price of rainwater goods arising from the Report of the Monopolies Commission. A third thing, which affects every household in the country, even though only slightly, is electric lamps. Has there been any change, any lowering, in the price of electric lamps as a result of the Commission's Report? I know that no great change is possible with these few small items which have been referred to the Commission, but at least there should be a beginning of a lowering of costs as a result of the implementation of the recommendations of the Monopolies Commission.
The second test I would apply to judge whether the work has been in any effective is this. Has there been any easier form of entry into the different trades inquired into by the Monopolies Commission? Running through the whole of these Reports was the fact that entry into these trades was restricted, and that it was almost impossible for a newcomer to enter them and so compete with the existing firms in the industry. In spite of all the capital development difficulties, I should like to know whether there has been any easement of that position, and whether it has been possible for newcomers to enter the industries. What is 644 more important in respect of dental goods is how far supplies have been increased to the independent dental traders.
One of the great criticisms in the Report was the fact that it was almost impossible for independent people outside the ring, outside the trade association, to get supplies. That was condemned, and we made it an illegal practice. How far have these supplies been increasing to other firms? We have heard from the President of the Board of Trade that firms—E.L.M.A., and so on—have come to an understanding with the President that they are going to reform and do something with their agreements to bring them into line with the Commission's recommendation. He said that he was perfectly satisfied with that. Here is the difference between the approach of the Government and our approach when we were in power.
We thought it right and proper to have all the safeguards of an Order to make sure that these practices were actually illegal. The Government today are resting upon a gentlemen's agreement to see that these matters are honoured. We think that we have a right to see what these changed rules are. I ask the right hon. Gentleman to produce to the House, either by laying them on the Table, putting them in the Library or re-printing them in HANSARD, the changed rules regarding these associations.
In dealing with the abuses of monopoly, which we all recognise exist, it is important to have a climate of opinion which is hostile to monopoly and to restrictive practices. I think that can do as much good as all the regulations we can bring in. If there is a strong feeling in the country and in every organised section of industry that monopolies are evil in themselves and restrictive practices are dangerous, I think that the work of the Monopolies Commission will be easier and more likely to succeed.
I now come to the most important part of today's debate. That is the action proposed under Section 15 of the 1948 Act. I am not satisfied with the statement of the President of the Board of Trade on this matter. I regard this as the most important Section in the Act—the one which contains what teeth there are in the Act. It is not good enough for the President to say that he is thinking about this, and that he will refer, at some time in the future, collective 645 boycott and exclusive dealing to the Commission to make an overall inquiry. The Commission has produced four Reports and there are seven on the stocks, coming forward at the rate of two-and-a-half to three a year. At that rate, it will be over three years before the Commission finishes its work on its existing references.
It is impossible to say at the end of that time that they will then be able to deal with the collective and general side of this matter. What I think the President ought to do now is to give an immediate instruction to the Commission to make an urgent inquiry into the two evils which we all agree exist, and which have been apparent in all these Reports—exclusive dealing and the collective boycott—drop the other things with which they are dealing, and have an overall inquiry, not into a narrow section of industry but into the whole wide field of industry concerning these two particular things, and make their report on them.
I would urge the Government to make a blanketing order against these two operations throughout the whole of industry. I think that is the only effective way of dealing with this matter. I think that it is a much better way than dealing piecemeal with these comparatively insignificant industries which are now under review.
I say that we ought to know and we would know by this means how deeply ingrained are these practices in British industry. I hope that there will be no delay in this matter. As my hon. Friend the Member for Gloucestershire, South (Mr. Crosland) said, it is essential to have a vigilant follow-up examination of all the industries referred to the Commission. It is no good leaving it to a gentleman's agreement. I hope that the staff will be increased.
I was rather disturbed by the statement of the hon. Member for Cheadle (Mr. Shepherd) that the staff had been reduced. That is an economy that we can ill afford. I hope the staff will be maintained and increased to ensure enforcement, and I hope, above all, that we shall have a broad frontal attack. So far we have only scratched the surface. We have been dealing with the minnows while the large fish have been left unmolested swimming about in their private oceans.
646 We ought to select a large concern with wide ramifications and refer it to the Commission on a general question following the ones dealing with collective boycotts and exclusive dealings. I want to draw the attention of the right hon. Gentleman to a factory in an important industry in my constituency where I believe there is a prima facie case for investigation, which I hope he will undertake. It would be invidious to name the firm, but I will write to the right hon. Gentleman about it.
I ask the right hon. Gentleman to refer to the Commission as a matter of great urgency a general question about which we are poorly informed at present, that of the prevalence, and the effect upon the expansion of our export trade, of international combinations in restraint of trade. It is not enough just to deal with the restraints within our own country. An investigation is being made in America into wide ramifications in the oil industry in which a British concern is implicated.
I should have thought this was a clear case for co-operation between our Monopolies Commission and the American Federal Institution to derive mutual benefit from a world-wide investigation into the division of markets, cartels and so on, particularly affecting the oil industry. That would be one of the most important steps that we could take, and I hope the right hon. Gentleman will give it favourable consideration immediately.
§ 9.2 p.m.
§ Mr. John Edwards (Brighouse and Spenborough)
We have had an extremely interesting debate. Despite the fact that we have been somewhat limited by the rules of order some hon. Members have managed to make first-class suggestions by assuming that there exist powers which at present the Government do not possess. Such an assumption is very convenient in the circumstances, and perhaps I may be allowed to get away with it if I make such an assumption once or twice.
I have been rather disturbed by what seemed to be the complacent note not so much from the Government Front Bench but certainly in almost every other speech by hon. Members opposite. This shocked me a little because it was in such sharp contrast with the hullabaloo made about this by right hon. and hon. Gentlemen opposite at the General Election in their 647 manifesto, Election addresses and speeches. If it is the general view of hon. Gentlemen opposite that there is not very much wrong, that it is very difficult anyhow to say what is against the public interest and that it is just as likely that exclusive dealing and collective boycott are good as bad, Her Majesty's Government will be in very great difficulty in doing anything about the statement in the Gracious Speech or what was contained in their Election manifesto.
Whether we like it or not, we live in an age in which there is constant interference with the forces of competition. Forces are at work, and have been at work in our economic society for a long time, which make it inevitable that that should be so. Quite apart from any rings or combines, we have the natural growth in the size of industry and the technical and marketing advantages of large-scale production, which are very great and, on the whole are nearly always desirable.
What we are concerned with is the danger of monopoly or quasi-monopoly power being used to the harm of consumers, our competitive capacity and our general economic well-being. We have been warned about this long enough ago. If we go back to 1919 the Committee on Trusts was then telling us that monopoliesmight within no distant period exercise a paramount control over all important branches of the British trade.The President of the Board of Trade read us part of the Coalition Government's White Paper on Full Employment. It is quite clear that the war-time Government saw consideration of this problem of monopolies or restrictive practices as essential to any proper planning to maintain a high and stable level of employment.
It is no less important in present circumstances to consider this whole matter not merely in relation to the maintenance of full employment, but as absolutely vital in our fight to maintain our standard of living and to pay our way in the world. If we are to get through the difficult times that lie ahead in my view we must use all the resources of our industry. I am not tonight going to argue the respective merits of private or public enterprise, but only to say that I believe that both have advantages and both have 648 disadvantages. This I know, that if we are to have private enterprise we cannot afford to have it limited and restricted, and being less good than it could be if we really tackled some of the obstacles that acutely exist in our present organisation.
At the risk of a rebuke from the Chair I would say that legislation is essential, but I go quickly on from that to say that, short of legislation, it is our business to get everything we can out of our present powers and from the existing Monopolies Commission. As I listened to the President of the Board of Trade, I found so many of his general sentiments in complete accord with my own and I found so many of the things that he was saying acceptable to me and, judging by the obvious approval which many of his remarks received, acceptable to most other hon. Members, that I was almost lulled into feeling that perhaps this was all right. Then I looked at questions I wanted answered and realised that he had not answered all of them, and it added up to the fact that the Government were not doing everything that they might.
Governments do not often do what they like; at best they do what they can. The question I want the Committee to consider tonight is: Are the Government doing all that they can within their present powers and have they done all that they might do? I shall seek to show that the Government have not, in fact, done all the things that were open to them. At one point in our discussion we had a very interesting account from the hon. and learned Gentleman the Member for City of Chester (Mr. Nield) of the meaning attached to the word "monopoly." It would be wrong and out of order for me to argue for or against a change in the name of the Monopolies Commission. That name is laid down in the Statute and could not be altered without legislation.
I was, however, a little bothered by what he said as to whether he was saying something which was more than merely wanting a change of name; whether he was not saying, "The definition we use is not the right one, and, in effect, only if the majority of an industry were controlled by a firm or group of firms should it be subject to an inquiry." For my part, 649 whatever we may think bout the definition for purposes of our conversation or a definition for economists in technical terms such as would appeal to my hon. Friend the Member for Gloucester, South, the fact remains that the definition in the Act is quite a convenient one for our purpose. On the whole, it makes it possible within the limitations in the Statute to bring in the right references.
There are many forms of monopoly, and it is interesting that the Commission have confined their attention so far to the monopoly form that we call "the ring." They have not so far reported on any industry dominated by a single firm, or where a single firm has an absolute monopoly. We must be concerned with those forms which are not in the public interest, either in the sense that consumers are exploited directly or indirectly, or in the sense that industrial efficiency is impaired or economic progress is limited. In other words, we are concerned with those things in the organisation of industry which damage or prevent progress.
The Commission are by no means concerned with the whole field, but their tasks stretch forward into what, in this apocalyptic age, might almost be described as eternity. No one has criticised the membership of the Commission or alleged that it is not wholly competent. The question is whether it is possible to speed up the work of the Commission. I believe it is. I should have thought it possible to take the organisation of the work a little further than has been suggested hitherto, by way of divisions.
If I understand the President of the Board of Trade aright, the present arrangement is that the Commission work in what we might call sub-committees. Several members do one job and other members do other jobs and the whole Commission are brought together for a final conclusion. I wonder whether the Commission could not go even further. It is when they are exercising their quasi-judicial functions that their collective presence is needed. Would there be anything wrong in putting one member at work with some of the secretariat on the job of getting the facts together, or examining and trying to get all the material, which would make progress a good deal easier?
I turn to the question of staff. I was surprised that the President of the Board 650 of Trade said that no increase of staff would make any difference. If my suggestion were adopted I am sure that more staff could be used and, as long as they are the right kind of people and of the right competence, I should have thought that more staff should be used. I would like the Parliamentary Secretary to tell me the present number of staff employed by the Commission and how it compares with the number employed at this time last year or at such convenient date as he has the figures for.
While I believe that the President is right in recognising genuine difficulties in references under Section 6 (2) of the Act I hope he will agree that it should be easier now to make reference under that subsection because of the inquiries that have been conducted and are in hand. As to his suggestion of contemplating a reference under Section 15, that is wholly admirable, but might I make a further suggestion to him? Is there any reason why he should not refer quite a large number of cases to the Commission in terms of Section 6 (1, a), as to the facts only?
The secretariat, working with a single member, or two members working with the staff, could get over the ground quickly. In a relatively short time the right hon. Gentleman could acquire more information on the basis of which he could make a reference under Section 15. If I understand him, he is not sure that he has enough material yet from the present reports for a proper reference under Section 15. Why not make a lot of references under 6 (1, a) as to fact only which would provide all the material necessary for a general reference under Section 15.
Perhaps the Parliamentary Secretary would tell me if there is any insuperable difficulty in doing that. It would speed up the operation materially, so I ask the right hon. Gentleman to be good enough to consider that suggestion. He may have done so already and there may be good reasons why it cannot be done but I do not see any objection to that course which would certainly make for progress. Can the Parliamentary Secretary tell us how long it takes to get the facts and how long to pass the judgment?
§ The Parliamentary Secretary to the Board of Trade (Mr. Henry Strauss) indicated dissent.651
§ Mr. Edwards
The hon. and learned Gentleman shakes his head. My guess is that it takes longer to pass the judgment and to give a view than it does to get the facts. I may be wrong, but I am quite sure that it is difficult to pass the judgment and that we could save time if references were made as to the facts. Here I agree with my hon. Friend the Member for Hillsborough (Mr. G. Darling) who, in an admirable speech, said that the facts themselves if published and discussed will have an effect. There is too long a delay between getting the material and letting everybody know about it.
The Commission are concerned, first with finding the facts. I do not think any fair-minded person can read these reports without recognising that an excellent job has been done. The second job of the Commission is to pass the judgment and that is not an easy matter and it takes time. To judge the real social and economic consequences of these practices is by no means easy, but when the Commission have done their work the President and this House have the job of putting an end to anything that is found to be wrong and of trying to prevent it happening again.
In the current number of a little journal called "Cartel" there is an interesting article by Mr. Richard Evely, in the course of which he says:Nothing could bring the Act into disrepute more quickly than a belief in industrial circles that the recommendations of the Commission can be circumvented or ignored altogether without further risk to themselves.We have to ask whether the action taken by the President on the Reports already made has been wholly effective.
For example, let us take the Dental Goods Order. In July, 1951, my right hon. Friend the Member for Middlesbrough, East (Mr. Marquand) made an Order and the industry then promised him to revise the rules of their association. As will be recollected, the holidays and the General Election intervened and the work was resumed in October. Reporting on the work of the Commission the Board of Trade published a report in March, 1952, which brought the story up to the end of 1951. This is what the Commission said in that report:It would be premature … to assess the effects of the Commission's Report and it is not yet apparent that the Commission's 652 criticisms of the industry's arrangements have been met at all points. Some complaints from firms outside the Association about their inability to obtain supplies have continued.The report goes on:It will be the concern of the Government—in close consultation with the industry—to ensure that the guidance given in the Commission's Report is reflected in the industry's trading practices.What happened thereafter? On 27th March, my right hon. Friend asked the Minister of Health what he was going to do. The Parliamentary Secretary gave a reply to the effect that no consultations had taken place. Those of us who remember the occasion will recollect that the hon. Lady was taken completely by surprise. I felt very sorry for her, having myself on more than one occasion been caught in much the same kind of way. But the truth was that no consultations had taken place. Again, in June, my right hon. Friend asked the Minister, who said that revised rules had been submitted and were being considered. I hope that the Parliamentary Secretary will give us a firm reply on the situation as it is now.
If the situation is not satisfactory, what are the Government going to do about it? If the Government find that the Order is not being completely kept, will they seek an injunction? It may be that they can give a full answer, but it will not do for the right hon. Gentleman to say, as I think he said, that as from the time the Order was made, the practices were illegal. We want to know whether, in the view of the Government, the law is now being kept. If it is not being kept, what do the Government intend to do about it?
It is quite obvious that between the setting up of the present Government, in October, and the end of March, when my right hon. Friend the Member for Middlesbrough, East asked his question, nothing whatever had been done. One is left with the impression that probably nothing would have been done had not my right hon. Friend begun to follow up the work which he had started when he made the Order.
I have a second question to ask. In respect of the dental goods, or rainwater goods or any of them, if there are revised rules as a result of Government intervention, clearly those rules ought to be available to the House. I go further and 653 say that they ought to be available to the public. If the President takes action and gets what he regards as a satisfactory arrangement, while we would not for a moment doubt his word, we would be failing in our duty if we did not ask to see the document.
I would go so far as to agree with my hon. Friend the Member for Hillsborough that it is high time that we had a system of registration of restrictive agreements. The Swedish experiment, which has been going on for five or six years, demonstrates that that is a good thing. It may be said that the Government do not have the powers, but I suspect that somewhere among their residual powers they probably possess them. If not, at any rate let the Government begin by publishing all the rules which are revised as a result of Reports from the Monopolies Commission.
Those are the considerations which we have to bear in mind. I think that the President of the Board of Trade has all the evidence that he needs to do something about two things, at least. From the four Reports, it is perfectly clear that there are two practices which are bad, at any rate, in general: collective boycott, and exclusive dealing. I am not saying that we cannot find cases of exception but as a general rule this is an undesirable thing and if there are exceptions they can be treated as exceptions. In particular I hope that the Parliamentary Secretary will answer the question put by my hon. Friend the Member for Hillsborough. Is he and are the Government prepared to take steps to put a stop to the collective boycotts which still go on in relation to the Co-operative societies?
Here are two matters on which I think we could carry the President with us. After all, he named them and picked them out as being, if not proven, at any rate proven enough to go to the Commission under Section 15. Since he is so prejudiced, as he was at pains to tell us against monopolistic practices of any kind, let him say that this—which he may call a prejudice, but which some of us would like to elevate into a principle—should be put into practical operation.
The President having agreed, I think we could ask him, in those circumstances, actually to put this into operation. I would go further—and here I may not carry the President with me. I think we 654 have sufficient agreement about re-sale price maintenance to do something about it. It is idle for hon. Members to quote a single speech of an hon. Member on this side of the Committee when there is a White Paper in existence on the matter.
Will the President take his courage in both hands and say, "Here are three things"—if he will not say three, will he at least say two—"about which I am going to take action at once," and authorise his hon. and learned Friend to say so when he replies to the debate?
It does not appear to us that the Government have done everything they could. It does not seem to us that their sense of priority is right when we look back on the disgraceful proceedings on Monday last. We cannot believe that they are putting first things first. We hope that upon reflection they will see how wrong it is to be eager when dealing with the relatively small matter of public houses in new towns and to be both reluctant and very slow when dealing with matters which are fundamental to our economic lives and our fight for what has been described as the balance of payments.
I trust that the Parliamentary Secretary will give an answer to the questions put from this side of the Committee and that we shall see, as a result of this debate, a new resolution and determination to free British industry from anything which handicaps it.
§ 9.28 p.m.
§ The Parliamentary Secretary to the Board of Trade (Mr. Henry Strauss)
With the opening of the speech of the hon. Member for Brighouse and Spenborough (Mr. J. Edwards) I was in a considerable measure of agreement. I enjoyed this debate. My main quarrel with him on his opening was that he thought the Government had given some indication of complacency. I think there is no complacency, but there may be a knowledge of the difficulty of the subject. I believe that the view that the subject is difficult is shared by those who have given it the greatest study.
I shall try in the course of my remarks to answer as many as possible of the questions which have been put by various hon. Members, although perhaps not always in dealing with their speeches, because some of the topics 655 occurred in several speeches. I may perhaps start with some general considerations and remind the Committee of certain facts.
The first fact of which I would remind them is the general scheme of the Act. The general scheme of the Act is, roughly, that the Commission normally consider two questions—do the conditions mentioned in the Act prevail in the particular industry which has been referred to them for consideration, and secondly, do they, or the acts done as a result of them, operate against the public interest?
When the Commission have answered these two questions, it is for the competent authority, that is to say, the Government Department concerned, to make the necessary Order or to secure a result equally satisfactory to that which would be brought about by an Order. But the sanction behind the Order so made is, by the deliberate decision of Parliament, not a criminal sanction at all. No crimes are created under this legislation; certain acts are made unlawful, and there are civil remedies.
The philosophy underlying this scheme, a philosophy common to all the parties represented in the Coalition Government which produced the White Paper on employment, and embodied in the solution put forth in the Statute, is, as has been stated by various hon. Members, that restraint of trade may be harmful but is not inevitably harmful; and what is important in deciding the public interest is its effect in the particular context in which it is found.
I say at once that a wholly different approach to the problem is possible. It would require legislation to bring it about and would therefore be out of order to discuss, but I share the view of the right hon. Member for Bishop Auckland (Mr. Dalton) that it will be unfortunate if we confine ourselves more than is necessary by that consideration. Not only did we choose a quite different approach from that which has been adopted in the United States, but I say that we were right so to do. A great many illusions are held regarding the position in the United States. I know that the hon. Member for Gloucestershire, South (Mr. Crosland) among others no doubt, has studied that legislation.
656 In his speech this afternoon my right hon. Friend the President of the Board of Trade gave a quotation from the Sherman Act of 1890. There have, of course, been subsequent important Acts modifying, and possibly strengthening, that statute in certain particulars and providing the machinery, in particular the Clayton Act of 1914 and the Federal Trade Commission Act of the same year. There are now great enforcement agencies—the Anti-Trust Division of the Department of Justice and the Federal Trade Commission. They can pursue the matter in the criminal courts and can also take civil action.
But let no Member of the Committee think that that has automatically solved the problem or has attained or even quickened the progress to the goal which so many hon. Members contemplate. There is still a very wide area of discretion for the courts. There is a tendency to do a great deal, in order to try to make action more effective, through Consent Decrees and good conduct codes. Nevertheless, the legal delays before one can be certain whether a particular restriction is lawful or unlawful are sometimes quite as bad as, if not worse than, the delays which have been complained of in this debate.
Undoubtedly the system has had certain successes, but the one success it certainly has not had is as a giant-killer. The great concentrations of power have certainly not been attacked by it and it may well be that an attack on collusive agreements has itself fostered the concentration of economic power.
Our approach has been quite different. It has been in accordance with the policy that has commended itself to all parties in this Committee. It was thought that co-operation between Government and industry could bring about better results if reasonable and workable solutions of monopoly problems could be reached, and that it was better to avoid a position in which the Government and industry constantly appeared in the roles of prosecutor and offender, and an effort was made, on the one hand, to trip up the business man and, on the other hand, to evade the law.
There has been another proposal put forward, and something like it was suggested in the speech of the hon. Member for Huddersfield, West (Mr. Wade). I 657 think I first saw the suggestion in the "Economist." It was roughly that there should be a declaratory Act declaring certain defined practices as prima facie contrary to the public interest and leaving industries to come to the Commission for absolution. I think that it is quite clear that that would not enable us to have any speedier machinery, because the mere declaration of a practice as prima facie unlawful when, in the context of the particular case, it might not be to the public disadvantage would cause so many applications that the Commission would be just as much threatened with an excess of work as they are now.
There is another great danger in generalisation. The hon. Member for Brighouse and Spenborough, who wound up so agreeably for the Opposition, invited me to say that we should attack certain practices straight away and without any further reference to anyone. In view of what my right hon. Friend has said about the intention of Her Majesty's Government to refer certain matters to the Commission for investigation under Section 15, it would be a very irresponsible act on the part of any Minister to pre-judge a question about to be referred to the Commission.
§ Mr. J. Edwards
Is it really irresponsible for the President to take action when he admits to a prejudice against monopolies and is prepared to agree that collective boycotts and exclusive dealings are in principle bad things? If he has reached that stage, I should have thought that it was a matter of his responsibility to take action.
§ Mr. Strauss
To take what action? To take action without any further inquiry I suggest would not be responsible, and, if the hon. Member will listen to what I have to say about the dangers of generalisation, perhaps he will think there is something in it.
Let me give an example from a slightly different point of view of the danger of the sort of generalisation which I know has attracted various hon. Members opposite and was a factor which led to a declaration by the late Government of an intention to make illegal all resale price maintenance. I was very much interested, as I am sure many other hon. Members were, to see the sequel to that declaration by right hon. Gentlemen 658 opposite in some of the most important papers dealing with economics. The "Economist" at first gave a general welcome to the proposals of the late Government but added, at a very early stage, that there was, of course, a case for exception in relation to such people as retailers of wireless sets and electrical apparatus, and others, who provided technical services.
Here is, however, a most remarkable example. I seriously invite any hon. Member who is interested in this subject, on whatever side of the Committee he sits, to study the article headed "Booksellers' Price War," which appeared in the "Economist" of 22nd September last year, because it was there pointed out that a tight system of resale price maintenance was operated by the book trade under the Net Book Agreement, and that this agreement was "the sheet anchor of the whole trade." I know that the right hon. Member for Bishop Auckland will be interested to know that the first book to which this excellent system was applied was Marshall's "Principles of Economics."
What is so interesting is that here is a tight system of resale price maintenance about which there is overwhelming evidence that it is extremely desirable and that the greatest harm would be done to any amount of good causes which I am sure hon. and right hon. Gentlemen have at heart, if it were abolished.
§ Mr. Crosland
I think I can save a good deal of the hon. and learned Gentleman's time by pointing out that nobody on this side of the Committee said that there were no exceptions.
§ Mr. Strauss
I am delighted that the hon. Member, who has given some study to this subject, realises the need for exceptions to be made. The fact that there are exceptions of vital importance makes it particularly desirable that some expert body should consider what are those exceptions before Ministers declare that they are going to abolish the thing without mentioning those exceptions.
§ Mr. Dalton
The Government have at their disposal—as we had—the Report of the Lloyd Jacob Committee, which contained a great mass of evidence of the widespread practice of resale price maintenance in cases where no exception could possibly be urged. Is it not sensible, 659 therefore, that we should ban the thing under our existing powers if possible and, if not, by legislative amendment, and make the exceptions come up for judgment?
§ Mr. Strauss
The Lloyd Jacob Report was an important one, but the right hon. Gentleman and his friends rejected it. Their White Paper definitely proposed to make unlawful things which the Lloyd Jacob Report said should remain legal.
§ Mr. Strauss
That is one way of putting it; but the Trades Union Congress put it in another way. They said:resale price maintenance itself—the practice of fixing standard prices for goods in the shops—does not necessarily work against the interests of either the shopper or the shop worker. Indeed, as the Shopworkers union has pointed out, a complete ban as proposed by the Government white paper last year might do more harm than good.I imagine that even hon. Members opposite, if they were on these benches, would pay some attention to what the T.U.C. thought on the subject and would not indulge in the reckless legislation which they now suggest to the Government.
I have been here throughout the debate and I have a lot of bits and pieces of paper, and if I wander a little between them, I apologise. My hon. Friend the Member for Cheadle (Mr. Shepherd) and other hon. Members asked questions about staffing. The Commission's staff at present number 56, of whom 24 are permanent or temporary civil servants seconded to the Commission. The number varies from time to time because junior staff, typists for example, tend to come and go, but the number of senior staff has been increased, and I can assure my hon. Friend and hon. Members opposite who have raised the question that there is no intention whatever that the work of the Commission shall be impeded by any lack of staff. The limiting condition at present is the need for the work to be done by the members of the Commission themselves.
The hon. Member for Gloucestershire, South and others asked certain questions about the dental Order which has been made. He asked if it were now easier for independent firms to get supplies. My information is that it is. He asked me, 660 in particular, whether they could get them from four companies. I think some of those four companies have their own shops and outlets and I cannot tell him how far they are in a position to supply the newcomers. What I can tell him is that we have no evidence at all that they are disobeying the terms of the Order which the late Government made. Should there be any evidence of a breach of that Order, of course, the necessary action would be taken.
§ Mr. H. A. Marquand (Middlesbrough, East)
If those four firms join together and refuse supplies to any trader, that would be a collective boycott and would be illegal, but if each of those firms separately declines to give the supplies to traders, it may well be that it is not possible under the Order to prosecute. Does the Parliamentary Secretary therefore conclude that the Order is unsatisfactory and should be amended so as to give it teeth?
§ Mr. Strauss
I do not wish to give too hasty a reply, but I am in agreement with the right hon. Gentleman and with others that we must not only look at the letter of the Order but must see whether it is being evaded by any subterfuge. I do not differ from hon. Members about that at all, but at the moment I have no reason to think that the Order, as an Order, is unsatisfactory or that it is being broken.
To turn to the further question about rules, a new set of rules is being studied by the Ministry concerned. These rules are being studied because we have in mind many of the matters which many hon. Members have in mind and also the dangers which have been pointed out. I know the suggestion has been made that all such rules should be registered or compulsorily published. That proposal was made when the Act was a Bill before the House, and it was rejected by our predecessors.
The hon. Member for Gloucestershire, South also said there should be only one enforcing authority. I think he is wrong. Let me tell him why. He was frank enough to say that his criticism applied not only to the Government, but to the Government he had previously supported. I think that both our predecessors and ourselves are right, because, as I think he knows, each industry has a Government Department, known as the sponsoring 661 Department for that industry, which knows about it; and I think that there is not only administrative convenience but actually greater effectiveness from the point of view of enforcement in leaving the Government Department concerned as the one responsible for making an Order and for seeing that it is obeyed.
My hon. and learned Friend the Member for the City of Chester (Mr. Nield) criticised the inaccurate use of the word "monopoly." As some of the Committee know, I am not myself indifferent to the accurate use of words, and I agree—and everybody must agree—that "monopoly" is inaccurately used. Nevertheless, I think there is some force in the point put by the hon. Gentleman the Member for Brighouse and Spenborough, who immediately preceded me, that what we have to consider is not the Title but what appears in the Measure; and though I agree with my hon. and learned Friend on the inaccuracy, and although I think that the point that he made deserves very earnest consideration in any amendment, because of the dangers that the inaccurate use of words may have, I agree that it is a question of Title and not a question of the substance of the Act.
It was also said that an industry should know the charges brought against it. Let me say at once that I wholly agree that the industry, while it still has a chance of arguing its case, should know all the facts and allegations which the Commission may find in its Report, but I doubt if my hon. and learned Friend will go so far as to say that it should necessarily know the origin of the complaint. I think that that might be going too far. Nevertheless, the matter of procedure is one for the decision—subject to direction—of the Commission itself, and I have no doubt that any proposals for greater fairness will be carefully considered. The Commission was good enough at the beginning of its first Report to give at some length a description of the procedure adopted.
The hon. Gentleman the Member for Hillsborough (Mr. G. Darling), I think it was—and I apologise for missing part of his speech—and others, including the hon. Member for Brighouse and Spenborough, raised the question whether it would be possible to use a Section of the Act for finding facts only. I think it would be possible, but I think also that 662 it would be a wasteful procedure, because it would not enable remedial action to be taken in that particular case, nor do I think it would much shorten the procedure. Nevertheless the question whether some use could be made of the Section he mentioned for ancillary purposes is, of course, borne in mind.
The hon. and learned Member for Gloucester (Mr. Turner-Samuels) used "academic" about 20 times as a term of abuse. After listening to his speech, I thought I understood the reason, but I did not agree with him.
The hon. Member for Brighouse and Spenborough was, I think, the first to mention the Committee on Trusts which met shortly after the First World War. It is not uninteresting to remember that their general approach to the question was that of an inquiry, which has subsequently been the general idea behind the agreed legislation.
§ Mr. Strauss
I do not know why the right hon. Gentleman is always under the impression that he cannot be heard. The hon. Member for Hillsborough asked whether we were against the Co-ops distributing their dividends. He was so rash as to call them profits, for which I am afraid he may get into trouble with the Co-operative movement, but his right hon. Friend did his best to save him from that. Of course, the result of the inquiries made by this Commission may be embodied in an Order, or may be embodied in an equally satisfactory undertaking by the industry concerned—that is every bit as satisfactory—and the Co-ops will benefit just as anyone else. Let me give as an example the first term in the proposed agreement in the electric lamp case:E.L.M.A should undertake that members who sell lamp components (other than patented components and ready-coiled filaments) will make them equally available to members and non-members at prices which shall not be higher to non-members than to members.Such an agreement would completely cover the Co-ops. If any agreement of that sort is made, the Co-ops can benefit just as much as anyone else.
663 There are a good many other points which were raised with which I should like to deal, but the Opposition, who I understand wish to move a Motion, have requested me to sit down at this point.
§ Question put.
§ The Committee divided: Ayes, 266; Noes, 288.667
|Division No. 225.]||AYES||[9.58 p.m.|
|Acland, Sir Richard||Evans, Stanley (Wednesbury)||McKay, John (Wallsend)|
|Adams, Richard||Ewart, R.||McLeavy, F.|
|Albu, A. H.||Fernyhough, E.||MacPherson, Malcolm (Stirling)|
|Allen, Arthur (Bosworth)||Field, W. J.||Mainwaring, W. H.|
|Allen, Scholefield (Crewe)||Fienburgh, W.||Mallalieu, J. P. W. (Huddersfield, E.)|
|Anderson, Alexander (Motherwell)||Finch, H. J.||Mann, Mrs. Jean|
|Anderson, Frank (Whitehaven)||Fletcher, Eric (Islington, E.)||Manuel, A. C.|
|Attlee, Rt. Hon. C. R.||Follick, M.||Marquand, Rt. Hon. H. A.|
|Awbery, S. S.||Foot, M. M.||Mayhew, C. P.|
|Bacon. Miss Alice||Forman, J. C.||Mellish, R. J.|
|Baird, J.||Fraser, Thomas (Hamilton)||Mikardo, Ian|
|Balfour, A.||Freeman, John (Watford)||Mitchison, G. R.|
|Barnes, Rt. Hon. A. J.||Freeman, Peter (Newport)||Monslow, W.|
|Bellenger, Rt. Hon. F. J.||Gaitskell, Rt. Hon. H. T. N.||Moody, A. S.|
|Bence, C. R.||Gibson, C. W.||Morgan, Dr. H. B. W.|
|Benn, Wedgwood||Gooch, E. G.||Morley, R.|
|Benson, G.||Gordon Walker, Rt. Hon. P. C.||Morrison, Rt. Hon H. (Lewisham, S.)|
|Beswick, F.||Greenwood, Anthony (Rossendale)||Mort, D. L.|
|Bevan, Rt. Hon A (Ebbw Vale)||Greenwood, Rt. Hn. Arthur (Wakefield)||Moyle, A.|
|Bing, G. H. C.||Grenfell, Rt. Hon. D. R.||Murray, J. D.|
|Blackburn, F.||Grey, C. F.||Nally, W.|
|Blenkinsop, A.||Griffiths, David (Rother Valley)||Neal, Harold (Bolsover)|
|Blyton, W. R.||Griffiths, Rt. Hon. James (Llanelly)||O'Brien, T.|
|Boardman, H||Hale, Leslie (Oldham, W.)||Oldfield, W. H.|
|Bottomley, Rt. Hon. A. G.||Hall, Rt. Hon. Glenvil (Colne Valley)||Oliver, G. H.|
|Bowden, H. W.||Hall, John (Gateshead, W.)||Orbach, M.|
|Bowles, F. G.||Hamilton, W. W.||Oswald, T.|
|Braddock, Mrs. Elizabeth||Hannan, W.||Padley, W. E.|
|Brockway, A. F.||Hargreaves, A.||Paling, Rt. Hon. W. (Dearne Valley)|
|Brook, Dryden (Halifax)||Harrison, J. (Nottingham, E.)||Paling, Will T. (Dewsbury)|
|Broughton, Dr. A. D. D.||Hastings, S.||Pannell, Charles|
|Brown, Rt. Hon. George (Belper)||Hayman, F. H.||Pargiter, G. A.|
|Burke, W. A.||Healey, Denis (Leeds, S. E.)||Parker, J.|
|Burton, Miss F. E.||Henderson, Rt. Hon. A (Rowley Regis)||Paton, J.|
|Butler, Herbert (Hackney, S.)||Harbison, Miss M.||Peart, T. F.|
|Callaghan, L. J.||Hewitson, Capt. M.||Plummer, Sir Leslie|
|Carmichael, J.||Hobson, C. R.||Poole, C. C.|
|Castle, Mrs. B. A.||Holman, P.||Popplewell, E.|
|Champion, A. J.||Houghton, Douglas||Porter, G.|
|Chapman, W. D.||Hoy, J. H.||Price, Joseph T. (Westhoughton)|
|Chetwynd, G. R.||Hudson, James (Ealing, N.)||Price, Philips (Gloucestershire, W.)|
|Clunie, J.||Hughes, Cledwyn (Anglesey)||Proctor, W. T.|
|Cocks, F. S.||Hughes, Emrys (S. Ayrshire)||Pryde, D. J.|
|Coldrick, W.||Hughes, Hector (Aberdeen, N.)||Pursey, Cmdr. H.|
|Collick, P. H.||Hynd, H. (Accrington)||Rankin, John|
|Corbet, Mrs. Freda||Hynd, J. B. (Attercliffe)||Reeves, J.|
|Cove, W. G.||Irvine, A. J. (Edge Hill)||Reid, Thomas (Swindon)|
|Craddock, George (Bradford, S.)||Irving, W. J. (Wood Green)||Reid, William (Camlachie)|
|Crosland, C. A. R.||Isaacs, Rt. Hon. G. A.||Rhodes, H.|
|Crossman, R. H. S.||Janner, B.||Richards, R.|
|Cullen, Mrs. A.||Jeger, George (Goole)||Roberts, Albert (Normanton)|
|Daines, P.||Jeger, Dr. Santo (St. Pancras, S.)||Roberts, Goronwy (Caernarvonshire)|
|Dalton, Rt. Hon. H.||Jenkins, R. H. (Stechford)||Robinson, Kenneth (St. Pancras, N.)|
|Darling, George (Hillsborough)||Johnson, James (Rugby)||Rogers, George (Kensington, N.)|
|Davies, A. Edward (Stoke, N.)||Johnston, Douglas (Paisley)||Ross, William|
|Davies, Ernest, (Enfield, E.)||Jones, David (Hartlepool)||Royle, C.|
|Davies, Harold (Leek)||Jones, Jack (Rotherham)||Schofield, S. (Barnsley)|
|Davies, Stephen (Merthyr)||Jones, T. W. (Merioneth)||Shackleton, E. A. A.|
|de Freitas, Geoffrey||Keenan, W.||Shawcross, Rt. Hon. Sir Hartley|
|Deer, G.||Kenyon, C.||Shinwell, Rt. Hon. E.|
|Delargy, H. J.||Key, Rt. Hon. C. W.||Short, E. W.|
|Dodds, N. N.||King, Dr. H. M.||Shurmer, P. L. E.|
|Donnelly, D. L.||Kinley, J.||Silverman, Julius (Erdington)|
|Driberg, T. E. N.||Lee, Frederick (Newton)||Silverman, Sydney (Nelson)|
|Dugdale, Rt. Hon. John (W. Bromwich)||Lee, Miss Jennie (Cannock)||Simmons, C. J. (Brierley Hill)|
|Ede, Rt. Hon. J. C.||Lever, Leslie (Ardwick)||Slater, J.|
|Edelman, M.||Lewis, Arthur||Smith, Ellis (Stoke, S.)|
|Edwards, John (Brighouse)||Lindgren, G. S.||Snow, J. W.|
|Edwards, Rt. Hon Ness (Caerphilly)||Lipton, Lt.-Col. M.||Sorensen, R. W.|
|Edwards, W. J. (Stepney)||Logan, D. G.||Soskice, Rt. Hon Sir Frank|
|Evans, Albert (Islington, S. W.)||MacColl, J. E.||Sparks, J. A.|
|Evan, Edward (Lowestoft)||McGhee, H. G.||Steele, T.|
|Stewart, Michael (Fulham, E.)||Tomney, F.||Willey, Frederick (Sunderland, N.)|
|Stokes, Rt. Hon. R. R.||Turner-Samuels, M.||Williams, David (Neath)|
|Strachey, Rt. Hon. J.||Ungoed-Thomas, Sir Lynn||Williams, Rev. Llywelyn (Abertillery)|
|Strauss, Rt. Hon. George (Vauxhall)||Usborne, H. G.||Williams, Ronald (Wigan)|
|Stross, Dr. Barnett||Viant, S. P.||Williams, Rt. Hon. Thomas (Don V'll'y)|
|Summerskill, Rt. Hon. E.||Watkins, T. E.||Williams, W. R. (Droylsden)|
|Swingler, S. T.||Webb, Rt. Hon. M. (Bradford, C.)||Williams, W. T. (Hammersmith, S.)|
|Sylvester, G. O.||Weitzman, D.||Wilson, Rt. Hon. Harold (Huyton)|
|Taylor, Bernard (Mansfield)||Wells, Percy (Faversham)||Winterbottom, Ian (Nottingham, C.)|
|Taylor, John (West Lothian)||Wells, William (Walsall)||Winterbottom, Richard (Brightside)|
|Taylor, Rt. Hon. Robert (Morpeth)||West, D. G.||Woodburn, Rt. Hon. A.|
|Thomas, David (Aberdare)||Wheatley. Rt. Hon. John||Wyatt, W. L.|
|Thomas, George (Cardiff)||White, Mrs. Eirene (E. Flint)||Yates, V. F.|
|Thomas, Iorwerth (Rhondda, W.)||White, Henry (Derbyshire, N. E.)||Younger, Rt. Hon. K.|
|Thomas, Ivor Owen (Wrekin)||Whiteley, Rt. Hon. W.|
|Thomson, George (Dundee, E.)||Wigg, George||TELLERS FOR THE AYES:|
|Thurtle, Ernest||Wilcock, Group Capt. C. A. B.||Mr. Pearson and Mr. Holmes.|
|Timmons, J.||Wilkins, W. A.|
|Aitken, W. T.||De la Bère, Sir Rupert||Hulbert, Wing Cmdr. N. J.|
|Alan, R. A. (Paddington, S.)||Deedes, W. F.||Hurd, A. R.|
|Alport, C. J. M.||Digby, S. Wingfield||Hutchinson, Sir Geoffrey (Ilford, N.)|
|Amery, Julian (Preston, N.)||Dodds-Parker, A. D.||Hutchison, Lt.-Com. Clark (E'b'rgh W.)|
|Amory, Heathcoat (Tiverton)||Donaldson, Cmdr. C. E. McA.||Hutchison, James (Scotstoun)|
|Anstruther-Gray, Major W. J.||Donner, P. W.||Hyde, Lt.-Col. H. M.|
|Arbuthnot, John||Doughty, C. J. A.||Hylton-Foster, H. B. H.|
|Ashton, H. (Chelmsford)||Drayson, G. B.||Jenkins, Robert (Dulwich)|
|Assheton, Rt. Hon R. (Blackburn, W.)||Drewe, C.||Jennings, R.|
|Astor, Hon W. W. (Bucks, Wycombe)||Dugdale, Maj. Rt. Hn. Sir T (Richmond)||Johnson, Eric (Blackley)|
|Baker, P. A. D.||Duncan, Capt. J. A. L.||Johnson Howard (Kemptown)|
|Baldwin, A. E.||Duthie, W. S.||Jones, A. (Hall Green)|
|Banks, Col. C.||Elliot, Rt. Hon. W. E.||Kaberry, D.|
|Barber, A. P. L.||Erroll, F. J.||Keeling, Sir Edward|
|Barlow, Sir John||Finlay, Graeme||Kerr, H. W. (Cambridge)|
|Baxter, A. B.||Fisher, Nigel||Lambert, Hon G.|
|Beach, Maj. Hicks||Fleetwood-Hesketh, R. F.||Lambton, Viscount|
|Beamish, Maj. Tufton||Fletcher-Cooke, C.||Lancaster, Col. C. G.|
|Bell, Philip (Bolton, E.)||Fort, R.||Langford-Holt, J. A.|
|Bell, Ronald (Bucks, S.)||Foster, John||Law, Rt. Hon. R. K.|
|Bennett, F. M. (Reading, N.)||Fraser, Sir Ian (Morecambe & Lonsdale)||Leather, E. H. C.|
|Bennett, Sir Peter (Edgbaston)||Gage, C. H.||Legge-Bourke, Maj. E. A. H.|
|Bennett, Dr. Reginald (Gosport)||Galbraith, Cmdr. T. D. (Pollok)||Legh, P. R. (Petersfield)|
|Bennett, William (Woodside)||Galbraith, T. G. D. (Hillhead)||Lennox-Boyd, Rt. Hon. A. T.|
|Bevins, J. R. (Toxteth)||Gammans, L. D.||Lindsay, Martin|
|Birch, Nigel||Garner-Evans, E. H.||Linstead, H. N.|
|Bishop, F. P.||George, Rt. Hon. Maj. G. Lloyd||Lloyd, Rt. Hon. G. (King's Norton)|
|Black, C. W.||Glyn, Sir Ralph||Lloyd, Maj. Guy (Renfrew, E.)|
|Boothby, R. J. G.||Godber, J. B.||Lloyd, Rt. Hon. Selwyn (Wirral)|
|Bowen, E. R.||Gomme-Duncan, Col. A||Lockwood, Lt.-Col. J. C.|
|Boyd-Carpenler, J. A.||Gough, C. F. H.||Longden, Gilbert (Herts, S. W.)|
|Boyle, Sir Edward||Gower, H. R.||Low, A. R. W.|
|Braine, B. R.||Graham, Sir Fergus||Lucas, Sir Jocelyn (Portsmouth, S.)|
|Braithwaite, Sir Albert (Harrow, W.)||Gridley, Sir Arnold||Lucas, P. B. (Brentford)|
|Braithwaite, Lt.-Cdr. G. (Bristol, N. W.)||Grimston, Hon. John (St. Albans)||Lucas-Tooth, Sir Hugh|
|Bromley-Davenport, Lt.-Col. W. H.||Grimston, Sir Robert (Westbury)||Lyttelton, Rt. Hon. O.|
|Brooke, Henry (Hampstead)||Harden, J. R. E.||McAdden, S. J.|
|Brooman-White, R. C.||Hare, Hon. J. H.||Macdonald, Sir Peter (I. of Wight)|
|Browne, Jack (Govan)||Harris, Frederic (Croydon, N.)||Mackeson, Brig. H. R.|
|Buchan-Hepburn, Rt. Hon. P. G.||Harris, Reader (Heston)||McKibbin, A. J.|
|Bullard, D. G.||Harrison, Col. J. H. (Eye)||McKie, J. H. (Galloway)|
|Bullock, Capt. M.||Harvey, Ian (Harrow, E.)||Maclay, Rt. Hon. John|
|Bullus, Wing Commander E. E.||Harvie-Watt, Sir George||Maclean, Fitzroy|
|Burden, F. F. A.||Hay, John||Macmillan, Rt. Hon. Harold (Bromley)|
|Butcher, H. W.||Head, Rt. Hon. A. H.||Macpherson, Maj. Niall (Dumfries)|
|Butler, Rt. Hon. R. A. (Saffron Walden)||Heald, Sir Lionel||Maitland, Comdr. J. F. W. (Horncastle)|
|Carr, Robert (Mitcham)||Henderson, John (Cathcart)||Maitland, Patrick (Lanark)|
|Cary, Sir Robert||Higgs, J. M. C.||Markham, Major S. F.|
|Churchill, Rt. Hon. W. S.||Hill, Dr. Charles (Luton)||Marlowe, A. A. H.|
|Clarke, Col, Ralph (East Grinstead)||Hill, Mrs. E. (Wythenshawe)||Marples, A. E.|
|Clarke, Brig. Terence (Portsmouth, W.)||Hinchingbrooke, Viscount||Marshall, Douglas (Bodmin)|
|Cole, Norman||Hirst, Geoffrey||Marshall, Sir Sidney (Sutton)|
|Cooper, Sqn. Ldr. Albert||Holland-Martin, C. J.||Maude, Angus|
|Cooper-Key, E. M.||Hollis, M. C.||Maydon, Lt.-Comdr. S. L. C.|
|Craddock, Beresford (Spelthorne)||Holt, A. F.||Medlicott, Brig. F.|
|Cranborne, Viscount||Hope, Lord John||Mellor, Sir John|
|Crookshank, Capt. Rt. Hon. H. F. C.||Hopkinson, Rt. Hon. Henry||Molson, A. H. E.|
|Crosthwaite-Eyre, Col. O. E.||Hornsby-Smith, Miss M. P.||Moore, Lt.-Col. Sir Thomas|
|Crouch, R. F.||Horobin, I. M.||Morrison, John (Salisbury)|
|Crewder, Sir John (Finchley)||Horsbrugh, Rt. Hon. Florence||Mott-Radclyffe, C. E.|
|Cuthbert, W. N.||Howard, Gerald (Cambridgeshire)||Nabarro, G. D. N.|
|Darling, Sir William (Edinburgh, S)||Howard, Greville (St. Ives)||Nicholls, Harmar|
|Davidson, Viscountess||Hudson, Sir Austin (Lewisham, N)||Nicholson, Godfrey (Farnham)|
|Davies, Rt. Hn. Clement (Montgomery)||Hudson, W. R. A. (Hull, N.)||Nicolson, Nigel (Bournemouth, E.)|
|Nield, Basil (Chester)||Ropner, Col. Sir Leonard||Thomas, Rt. Hon. J. P. L. (Hereford)|
|Noble, Cmdr, A. H. P.||Russell, R. S.||Thomas, P. J. M. (Conway)|
|Nugent, G. R. H.||Ryder, Capt. R. E. D.||Thompson, Kenneth (Walton)|
|Nutting, Anthony||Salter, Rt. Hon. Sir Arthur||Thompson, Lt.-Cdr. R. (Croydon, W.)|
|Oakshott, H. D.||Sandys, Rt. Hon. D.||Thorneycroft, Rt. Hn. Peter (Monmouth)|
|Odey, G. W.||Schofield, Lt.-Col. W. (Rochdale)||Thornton-Kemsley, Col. C. N.|
|O'Neill, Rt. Hon. Sir H. (Antrim, N.)||Scott, R. Donald||Tilney, John|
|Ormsby-Gore, Hon. W. D.||Scott-Miller, Cmdr. R.||Touche, Sir Gordon|
|Orr, Capt. L. P. S.||Shepherd, William||Turner, H. F. L.|
|Orr-Ewing, Charles Ian (Hendon, N.)||Simon, J. E. S. (Middlesbrough, W.)||Turton, R. H.|
|Orr-Ewing, Ian L. (Weston-super-Mare)||Smiles, Lt.-Col. Sir Walter||Tweedsmuir, Lady|
|Osborne, C.||Smithers, Peter (Winchester)||Vane, W. M. F.|
|Partridge, E.||Smithers, Sir Waldron (Orpington)||Vaughan-Morgan, J. K.|
|Peake, Rt. Hon. O.||Smyth, Brig. J. G. (Norwood)||Vosper, D. F.|
|Perkins, W. R. D.||Snadden, W. McN.||Wade, D. W.|
|Peto, Brig. C. H. M.||Soames, Capt. C.||Wakefield, Edward (Derbyshire, W.)|
|Peyton, J. W. W.||Spearman, A, C. M||Walker-Smith, D. C.|
|Pickthorn, K. W. M.||Speir, R. M.||Ward, Hon. George (Worcester)|
|Pilkington, Capt. R. A.||Spence, H. R. (Aberdeenshire, W.)||Ward, Miss I. (Tynemouth)|
|Pitman, I. J.||Spens, Sir Patrick (Kensington, S.)||Waterhouse, Capt. Rt. Hon. C.|
|Powell, J. Enoch||Stevens, G. P.||Watkinson, H. A.|
|Price, Henry (Lewisham, W.)||Steward, W. A. (Woolwich, W.)||Webbe, Sir H. (London & Westminster)|
|Prior-Palmer, Brig O. L.||Stewart, Henderson (Fife, E.)||Wellwood, W.|
|Profumo, J. D.||Stoddart-Scott, Col. M.||White, Baker (Canterbury)|
|Raikes, H. V.||Storey, S.||Williams, Rt. hon. Charles (Torquay)|
|Redmayne, E.||Strauss, Henry (Norwich, S.)||Williams, Sir Herbert (Croydon, E.)|
|Remnant, Hon. P.||Stuart, Rt. Hon. James (Moray)||Williams, R. Dudley (Exeter)|
|Renton, D. L. M.||Studholme, H. G.||Wills, G.|
|Roberts, Peter (Heeley)||Summers, G. S.||Wilson, Geoffrey (Truro)|
|Robinson, Roland (Blackpool, S.)||Sutcliffe, H.||Wood, Hon. R.|
|Robson-Brown, W.||Taylor, Charles (Eastbourne)|
|Rodgers, John (Sevenoaks)||Taylor, William (Bradford, N.)||TELLERS FOR THE NOES:|
|Roper, Sir Harold||Teeling, W.||Mr. Heath and Major Conant.|
Question put, and agreed to.
§ Original Question again proposed.
§ It being after Ten o'Clock, and objection being taken to further Proceeding, The CHAIRMAN left the Chair to report Progress, and ask leave to sit again.
§ Committee report Progress: to sit again Tomorrow.