MONOPOLIES AND RESTRICTIVE PRACTICES COMMISSION BILL

HC Deb 10 July 1953 vol 517 cc1590-668

Order for Second Reading read.

11.45 a.m.

The President of the Board of Trade (Mr. Peter Thorneycroft)

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

This Bill is short and, I hope, non-controversial, which are certainly not demerits in any Measure that is introduced into the House. It is non-controversial in the sense that it does what we require, no more and no less. The Bill has been drafted so as to exclude everything which is not essential to the prime purpose which this or any other Government would have in mind in this particular field.

There are, of course, a wide range of provisions which an ingenious man might consider should be included in a monopolies Bill. Not all of those provisions would probably tend in the same direction. If I may, I will mention one which may be in the minds of some hon. Members. It would be possible to include State monopolies in the Bill. It can be argued that a public and a private monopoly should be treated in the same way. What I would add to that is that, if it were ever agreed to bring them into a Bill, it would involve complex provisions.

The issue is not raised in this Measure. There is, indeed, a very good reason for excluding it. The relationship between the nationalised industries and Parliament is a large and important subject, and it is one which is now being considered by a Select Committee of this House. I think it would be altogether inappropriate to assume in advance of any report from the Committee that the Monopolies Commission was necessarily the right body to go into this field.

The purpose of this Bill, therefore, is not a major reform of the whole system of law relating to monopolies. It is not our purpose to advocate or even to debate the merits or demerits of the objective or empirical approach which has so far been characteristic of legislation in the United Kingdom, on the one hand, with the Sherman Act approach, as practised in the United States of America, on the other. A great deal could be said for and against either system, and, no doubt, on an appropriate occasion it will be said. But for my part I think it would be somewhat premature to base final conclusions on our attitude towards monopolies on the basis of what, after all, is half a dozen reports before any single reference of a general practice, such as collective boycott, has been finally reported on by the Commission.

In my view, we would be well advised not to abandon the empirical approach to monopolies which has been common ground between all parties since the passing of the original Act, in 1948. If we ever do abandon it, I think it should only be after very full trial and after considerably more experience gleaned from study over a wide range of industry.

So far, the study which has been done on this matter is limited to 13 specific references and one general reference, and on those six reports have been made during the course of four and a half years. There has been some criticism of the speed of the reports although there has been very little criticism of their quality. I would prefer the Commission to take a sufficient time to study these questions rather than to take a shorter time and get a worse report. I think it is vital that these reports should be thorough.

It is worth noting that the reports that have been made so far by the Commission have been virtually unanimous on what is or what is not in the public interest. There are a few minor exceptions, but the Commission have been unanimous for the most part. There has been, as one would expect, some divergence of views as to the remedies which the Commission, in particular cases, thought proper to apply.

Action on the reports is a matter, as the House knows, for the production Departments concerned. In the main, with again a few and on the whole minor exceptions, the recommendations made by the Monopolies Commissions have been accepted and have been implemented either by an Order made by this House or by agreement between the Department concerned and the industry upon which the report was made.

I think it can fairly be said that public opinion and industry have accepted the main thesis of these reports, and have approved the actions that have been taken. It is already clear that an industry should think carefully before it embarks on some of the systems and practices which have been condemned in the various reports. At this moment, I think that two things are really necessary, and both are provided for in this Bill.

The first is that we must be quite certain that we are at all times in a position to get the best possible man for the position of chairman. The second is that we should, if we can, speed up the machinery and get the reports with greater frequency. First, as to the man. It is really vital that we should be able at any time to attract a man of the highest calibre to the position of chairman. The chairmanship of the Monopolies Commission is a job of very great responsibility. The decisions made by the Commission affect some of the greatest industries in the country. They can affect our export trade and our commercial relations with other countries, and also the men and women in the industries, because a great deal of their future depends on whether practices are allowed or disallowed in those industries.

So far, I believe that we have been fortunate, and I should like—and I am sure the House would wish me to do so—to pay a tribute to the work which Sir Archibald Carter has done in the opening stages of this new and unexplored field. I want to make certain that at any time we can attract the best man to that post. When one is looking for a candidate in a field of that kind, clearly there is something which every candidate must consider. He is bound to look at the salary which he is to be paid to see whether it is adequate for the job. He is also bound to consider the certainty of employment involved and whether a pension on an adequate scale is provided for him.

On the last two points, the certainty of employment and the pension, I think the House would agree that the present arrangements are really not wholly satisfactory. At present, I can appoint a man to the chairmanship for a period of not fewer than three and not more than seven years. I have power to extend the period up to a maximum of 12 years, but, after that, the man is not eligible for reappointment.

If a man is to leave his profession—and I am not suggesting whether one profession or another is the best pool from which to draw a chairman for the Monopolies Commission, whether it be the Bar, accountancy, the professional solicitor or business—and is to drop all his activities in that field and devote himself whole time to the quasi-judicial post of chairman of the Monopolies Commission, he will want to know, and is entitled to know, what is to happen at the end of that period.

Judges, for example, do not, in general, return to the Bar. Once they have left the Bar, they stay as judges. Their jobs are permanent and pensionable, and this job is the same kind of post. Naturally, one cannot absolutely compare the two jobs, but it is the same kind of job as that of a judge. It differs a little from the post of chairman of a nationalised industry. The chairman of a nationalised industry may be in one business and go into another business. The fact whether it is publicly or privately owned is for this purpose irrelevant. When a man leaves his normal post and goes into a quasi-judicial post, he is moving into a quite different sphere.

Therefore, in this Bill we have sought to place the chairman, as far as we can, on the same sort of basis as a judge—something comparable to the National Insurance commissioner or the county court judge, or something of that kind. Clause 1 provides, in the case of the chairman or any deputy-chairman appointed, for a pension on the basis set out in the Schedule, rising to half of the salary at the end of 15 years. No pension is payable for a term of service under five years or on retirement under the age of 65, unless retirement is due to grounds of ill-health.

That brings me to the second point—how can we speed up the machinery? A Select Committee of the House referred to this matter in a recent report. When I speak of speeding up the machinery, I do not mean that individual reports should be rushed through quicker than they are at present. As I said before, I think it important that a thorough examination should be given to any problem referred to the Commission. I mean that more reports should be produced in the same amount of time, and I think that is necessary for various reasons.

In the first place, I think it is necessary to build up a sufficient volume of what I might call case law to enable industry and Government, of whatever complexion it may be, to form a judgment upon what is right or wrong in this particular field. Secondly, I think that it is desirable so that we can treat fairly as between one industry and another. If a practice is undesirable, it may well be undesirable in more than the one industry which happens to be examined, and, therefore, I think there is something to be said for increasing the number of industries which can be studied.

Thirdly, not all the suggestions made to us for inquiry may be monopolies or suitable for inquiry, but the number of suggestions made are, of course, far greater than the two or three cases which we can refer to the Commission in its present form in any one year. We have considered this question of how to speed up the number of reports, and I must say, having looked at it carefully, that there is only one way, as far as I can see, of doing this. It is by enabling the Commission to sit in more than one group. As in the High Court the judges do not all sit together, so in the case of the Commission we must be able to let them sit in two or three groups, and this is proposed in Clause 2 of the Bill.

For that purpose, power is taken to appoint up to 25 members of the Commission, but the House should not assume from that fact that we can appoint up to 25 to-morrow morning. We must move steadily and be careful to see that the quality of the people serving on the Commission is maintained. The report of such a group would be effectively the report of the Commission. Provision is made for a minimum of five people Serving on a group, and two- thirds of the group must agree a report before action under Section 10 of the original Act can be put in hand.

As I have said, I can see no other way in which the output of reports can be increased. If this Bill is passed, an advance will have been made which would, I think, be necessary whatever view one takes about monopoly legislation. Officers of the necessary calibre will be provided and the machinery for promoting the necessary increased speed in the flow of work will be set up.

It would be wrong to suppose that British industry is wholly riddled with restrictive practices, but it is true that there are probably too many of them—and they are not altogether on one side of industry. The reasons for them differ between one practice and another and one industry and another. Some of them grew, or, at least, multiplied, in the atmosphere of world recession which permeated the 1930s. Many of them are kept today, not for a coherent purpose but from an inborn conservatism, a refusal to abandon the lifebelt long after the person has learned to swim.

My belief is that, on balance, most of these practices probably do more harm than good today, but I think that the right way to tackle them is the way in which we have been tackling them on both sides of the House, that is, by direct approach to the individual problem of individual industries, supplemented by general reference, such as the general reference which I made recently under Section 15 of the Act.

Already, quite a number of the practices are being and have been eliminated from quite a number of industries. Our experience is growing and, what I think is important, a climate of opinion is being formed as the searchlight of inquiry is turned first on one industry and then on another. We want more experience. I think that we want it quicker and we want to be quite certain that we can maintain and even improve the standard of work which we have undertaken. It is for these reasons that I commend the Bill to the House.

12.1 p.m.

Mr. Harold Wilson (Huyton)

I should like to assure the President of the Board of Trade that we on this side of the House welcome this Bill, as far as it goes. I also welcome some of the things which the right hon. Gentleman said in commending the Bill to the House. It was very interesting to note how far the process of education has gone with right hon. Gentlemen opposite, particularly in relation to their original proposal that nationalised industries should be included in the scope of the Bill. This morning the right hon. Gentleman, in indicating the reasons why it would be inappropriate to include nationalised industries within the scope of the Bill, used almost exactly the same arguments that I used in resisting an Amendment, very powerfully moved by the present Home Secretary, when we were in Committee and on the Report stages of the original Bill.

We on this side of the House certainly welcome measures to increase the size of the Monopolies Commission and to speed their work. Many of us, in all parts of the House, have felt for some time that it would be necessary to enable the Commission to work in groups. I told the House when I was speaking from the Box opposite, more than two years ago, that I had suggested to Sir Stafford Cripps that if we tried to work with a single Commission it would prove to be too slow.

I instanced my experience at the Ministry of Works, where I was Parliamentary Secretary for a couple of years. I found some hundreds, even thousands, of restrictive practices within the field of housebuilding, more particularly in the supply of building materials. As I told the House, I once asked for a list of all items going into a house which were not covered by restrictive practices. I found that the number was very small, whereas there were several hundred items covered by restrictive practices which, prima facie, required examination.

It was decided, however, to begin work with a single Commission and to review progress as we went on. Two years ago we informed the House, when we were the Government and we were reviewing the situation at that time with a view to action to speed up the work of the Commission, that we could not take action until we had received the first few reports from the Commission. There was a strong argument for saying that, despite the natural impatience of all of us to have as many reports as possible, we should have a common treatment and a common enunciation of principle in the first three or half-dozen reports.

The Commission, to whom I am sure the House would wish to pay tribute, have been successful in enunciating a set of principles and procedures for ensuring fair treatment to the industries that are being investigated, but not to ensure more than fair treatment, remembering that in making these investigations they have a real responsibility to the consumer and the national interest generally.

I do not think that any of us are satisfied with the speed at which the work is being done. That, again, is no reflection on the Commission. It was right that they should make these inquiries as thoroughly as possible and ensure that not only justice would be done, but that it would manifestly be seen to be done when their reports were published. If we examine the speed of preparation of these reports we find, for instance, that in the case of the famous Report on dental goods, the matter was referred on 1st March, 1949, the Report signed on 3rd November, 1950, laid on 1st December, 1950, and published on 14th December, 1950. Rainwater goods were referred to the Commission on 1st March, 1949, the Report signed on 16th February, 1951, laid on 14th March, 1951, and published two or three weeks later. The electric lamp industry was referred to the Commission in March, 1949, the Report was signed on 31st August, 1951, more than two years later, laid on 4th October, and so on.

Then we come to the case of the match industry. It was referred on 1st March, 1949, the Report was signed on 2nd October, 1952, but was not published until 13th May of this year. This was a very long delay between signature and publication, and if the President were to examine the table of the dates of signature, laying and publication he would find that there has been a growing gap before publication since he took over responsibility.

We know that the right hon. Gentleman was in some difficulty about the matches Report, but no one on this side of the House is satisfied about the delay between signature and publication. The President has told the House that parts of that Report were deleted before publication because the public interest was involved. Whenever a Minister claims that the public interest is involved he generally receives a sympathetic hearing from the House, but in this case it was not any question of security but a question of overseas markets and commercial markets. I put it to the President that he should consider whether different procedure could not be followed when it becomes necessary for Ministers to withhold parts of Monopolies Commission reports from the general public.

We are, of course, prepared to accept the right hon. Gentleman's statement in this case that there were important considerations of public interest, but he should consider whether there would be some way of consulting senior Members of this House of more than one party before taking action of that kind, and satisfying some senior Privy Councillors on both sides of the House that there are good grounds in the public interest before deleting certain parts of Monopolies Commission reports, in which the whole House and the public have such an interest.

We welcome this Bill. We shall, of course, want to examine it in Committee next week and, no doubt, move appropriate Amendments. We shall want to examine the proposals, particularly about the term of appointment and about pensions. One recognises the President's dilemma on this question. Obviously, he wants high-powered people, the best possible people for the Commission. We all do, and when he extends the size of the Commission he wants to maintain the high quality of the appointments that have been so far made.

We well recognise that if there is a question of trying to get someone of the standing of a High Court judge, the question of security of tenure and of pension must arise. But that, of course, raises the opposite problem that if by any chance the President of the Board of Trade were to make a mistake in such an appointment of a chairman or deputy-chairman of the Commission, and appointed someone reasonably young, hoping that he would be a virile, active and successful chairman or deputy-chairman and then found that he had made a mistake, we might find that the Monopolies Commission were saddled with that person for perhaps 20 or 30 years, which might be an extremely serious matter. There would be great difficulty in removing him. The Bill provides that he can be removed for misbehaviour, but I do not think misbehaviour would cover the sort of thing that I have in mind.

As I have said, we welcome the proposal to increase the numbers of members of the Commission so that it can work in groups. I hope, however, that the President will be extremely careful about the sort of appointments that he makes. I hope, for instance, that the Parliamentary Secretary, if he is to reply, will give us an assurance that there will be no question of appointing to membership of the Commission any business men who are themselves in firms or industries which are characterised by monopolistic or restrictive practices, or trade associations with price-fixing agreements and all that sort of thing.

I remember when I made the original appointments to the Monopolies Commission that the suggestion was made to me on behalf of one side of industry that I ought to appoint at least one person who had actual business and commercial experience. I accepted that proposition, but I made it clear that I was not going to appoint anyone who was himself either working in a monopoly or in an industry characterised by a trade association with price fixing or other restrictive powers, nor did I feel, to be fair to industry, that I should appoint a businessman who had a grievance against a monopoly or cartel.

The result of confining myself in this way was that it took me months before I could find a businessman with those qualifications, because so widespread are these restrictive practices throughout industry that it is almost impossible to find a person of eminence—to use a phrase which has already been mentioned—in the industrial world who is not either helping directly or indirectly to operate a monopoly or a trade association, or who may consider that he is suffering from their activities. In the end, we did succeed in finding such a businessman, but I think he has since resigned. I hope that the Parliamentary Secretary will tell us that the President of the Board of Trade has no intention of making such an appointment. Otherwise, we may find it necessary to raise this question on the subsequent stage of the Bill.

The other thing I hope we shall hear from the Parliamentary Secretary is what proposals the President and the Commission have in mind for increasing the staff of the Commission. The staff have done a first-class job during the period that the Commission has been in being, but if it is to work by groups and we are to have these panels I should imagine that there will have to be a very substantial increase of staff. The Commission took the view at the beginning that they did not want to set up too large a staff until it was known exactly what their job was going to be. I never envisaged that we should be competing with the large numbers of staffs that they have in the United States in their anti-trust activities, though I think the Commission has been in being long enough now to be able to expand the staff without any danger that the staff will find itself engaged in duplicatory activities.

Indeed, a corollary of this Bill must be a substantial increase of staff, particularly on the side dealing with investigation—the accountants, lawyers and economists—though, of course, in that connection we must not lose sight of the suggestion, made by the Select Committee on Estimates under the chairmanship of the hon. Member for Weston-super-Mare (Sir I. Orr-Ewing), of a more widespread use of private firms of accountants for speeding up these investigations.

I repeat that we welcome this Bill as far as it goes, but I am bound to say that we on this side of the House do not think that the case-by-case approach is adequate to deal with the problems of monopoly in British industry. In fact, we reached that conclusion some time before we left office. It was, I think, on 17th April, 1951 that I indicated that we were going to introduce general legislation to deal with certain restrictive practices. I mentioned particularly resale price maintenance, and my right hon. and learned Friend the Member for St. Helens (Sir H. Shawcross) published a White Paper on that subject indicating the intention of this party to introduce legislation at an early stage.

There are, obviously, other general practices—collective boycott, restriction of entry, stop lists, and so on—calling for outright banning throughout the whole range of British industry, and not merely case-by-case as a result of particular reports of the Monopolies Commission. I think also that most Members will agree that there is the strongest possible case for what has been suggested in a document recently published outside this House called "Challenge to Britain," which suggests that legislation should be introduced to compel the registration and publication of the activities of all trade associations which have restrictive and monopolistic powers or powers to interfere with the working of competition within those industries.

Personally, I am sorry that the President has not brought along before now the wide sweeping Monopolies Bill of which some hint was given in the Gracious Speech of November, 1951. I know there have been two views about monopolies in the party opposite. We used to have these two views clearly expressed in Committee on the original Monopolies Bill. There was the view of the Home Secretary who, I think, genuinely wanted in some way, perhaps rather mildly, to deal with the problem of monopolies, and then there was the right hon. Gentleman the present Secretary of State for the Colonies who took an entirely opposite view to that of his right hon. and learned Friend. It seems that the President of the Board of Trade is a mild supporter of the Home Secretary in this matter, and we welcome that fact.

In considering whether this Bill is adequate to deal with the problem, it is necessary to remind the President that industry, despite his remarks, is, in fact, honeycombed with restrictive practices which, in many cases, not only fleece the consumer but impede national efficiency, which is recognised in all quarters of the House to be the first priority in all our industrial policies.

I would remind the House of a case which has been referred to before in our debates dealing with the activities of the Proprietory Articles Trade Association—the case of a tube of hand cream selling at 1s. 4d. and the Association raised the price to 1s. 8d. The shopkeeper did not raise the price because she had some large stocks which were selling at 1s. 4d. Then she was visited by one of the snoopers of the Association who, to quote her words: … told me that unless I raised my price to 1s. 8d., I would have my name placed on the P.A.T.A. stop list and supplies would be stopped. That meant that this innocent person, who had a disabled war pensioner husband, was in the gravest danger of being put out of business by the activities of this "Star Chamber" association and with no redress in the form of an appeal to the Government or to this House or to the courts. It is against this kind of background that the adequacy of this Bill must be judged. That was a case referring to shops.

Of course, we remember that the party opposite fought an Election not very long ago, in 1950, on a document called "This is the Road." The first and practically the only concrete proposal in that programme was to: preserve and extend competition in the shops and in the factories. They have not done anything in implementation of that, pledge yet. [An HON. MEMBER: "Ask the butchers."] I should have thought that that was the last thing the hon. Gentleman would want to mention this morning.

We have had many speeches from hon. Members opposite over a long period of time complaining about snoopers and enforcement officers. The plain fact is that there are thousands of traders who are not free today under this so-called private enterprise, and they are not free because of the activities of probably thousands of snoopers and enforcement officers who go round for the purpose, not like our price control enforcement officers, of keeping prices down, but of keeping prices up. To use a phrase we often heard from hon. Gentlemen opposite, these snoopers ought to be going into more productive employment.

I should like to give an example, which, I think, has a bearing on the Bill and is a very recent case. I can only rely for my facts on the reports which I have seen in the Press this week. It relates to the supply of motor tyres in a remote area of Aberdeenshire. This shows how widely these snoopers range. Actually, this was not an ordinary snooper. He was an agent provocateur. He went to a garage proprietor and asked to be sold a tyre. He did not disclose his identity.

When he was told that the price of a motor tyre was £7 6s. 8d. he haggled over the price and asked for a discount. The garage proprietor, thinking that there was some misunderstanding and that the snooper was, in fact, a friend of a neighbouring farmer, finally let him have the tyre for £7, taking the 6s. 8d. out of his own pocket so that he could put the list price £7 6s. 8d. into the till. He owned the garage, so that this was a self-liquidating economic transaction.

The British Motor Trade Association, to whom the snooper had made a report on this case, announced that they would fine the garage owner £25. Imagine this private association just deciding to fine someone without any authority being given by this House or by the courts. He was fined £25, if the Press report is accurate, for selling goods at a figure below the list price. Otherwise, the Association would cut off supplies and thus cut off his livelihood.

I see that the agent provocateur was, quite properly, charged at the sheriff court for fraud and he himself was fined £15, which fine was no doubt paid by the British Motor Trade Association. Ultimately, that fine may affect the price which the right hon. Gentleman and I will have to pay for our motor tyres. This is not a self-liquidating transaction. The comment made on this case by an eminent journalist this week was: One fine was imposed by a properly constituted court of law. The other was imposed by commercial judges guarding one of the sacred price rings. This is why I hope that the President of the Board of Trade will refer this case, and everything that lies behind it, as a matter of urgency to the Monopolies Commission to find out, among other things, who gave this price-ring power to institute fines of this kind and by what authority they are behaving in this manner.

Mr. William Shepherd (Cheadle)

Is not the right hon. Gentleman overlooking the fact that the question of tyres has already been referred to the Commission?

Mr. Wilson

I know that the whole question of tyres was referred to the Commission some time ago. Indeed, I well recall that there was a question put to me when I was speaking in the House on this matter, asking why I had not, up to that stage, referred to tyres. We felt at that time that there were more urgent cases. I should think that the President of the Board of Trade would refer this particular case to the Commission and ask for an urgent report on it, because it offends-the sense of fairness and decency of hon. Gentlemen in all parts of the House.

Reference has been made to delay in publishing the reports. So far, we have not had many, but they show, especially in lamps, dental goods and matches, what is going on in some sections of British industry. I do not think that any of us feel that things that have been disclosed are representative of the whole of British industry; of course, they are not, but they show that if we turn over some of the stones of British industry and trade at the present time there are some very unpleasant and slimy things living underneath.

We welcome the fact that the President proposes, by the Bill, to increase the speed of the inquiries as well as the number of inquiries that he will be able to refer to the Commission. Therefore, we welcome the Bill as far as it goes. We hope to make minor improvements to it in Committee, but I hope that the President will follow this interim Bill early next Session with a more wide-ranging piece of legislation to ban particular pernicious practices throughout the length and breadth of British trade and industry. I certainly promise him the very fullest support from this side of the House if he introduces a Bill on those lines, perhaps in the next Session.

12.27 p.m.

Sir Ian Orr-Ewing (Weston-super-Mare)

I was glad to hear the right hon. Member for Huyton (Mr. H. Wilson) welcome the Bill, although he did so with a slightly backhanded compliment. I was surprised to hear him try to belittle the Bill merely on the ground that it did not do everything. It was never meant to do everything, and it would not be the right vehicle in which to include as much as the right hon. Gentleman would wish to see in it. Within its limited sphere it is bound to bring about at least some improvement in the procedure and the work of the Commission.

I hope that it will not be thought that I wish to criticise the manner in which the Commission's work has been carried out. I have had the opportunity, with other hon. Members, of looking at the work of the Commission when serving on a Select Committee, and we were all impressed by the thoroughness with which that work was carried out. At the same time, we were deeply impressed by the dangers which must arise if such prolonged delay takes place between publication of the first mention of a case and the Board of Trade's final issue of the report on each case.

I welcome what has been said about the staffing of this Commission. It is rather pitiful to note the very small staff who have been serving the Commission. It is amazing that this staff should have got through the work they have in the period at their disposal. It is extraordinary that the average time between the investigation starting and being completed was two years. That is not to say that two years is an extraordinary time; very far from it. The work of the staff must have been quite outstanding.

I would ask the Parliamentary Secretary whether any representation has been made to the Commission as regards the employment of outside firms who specialise in cost-accounting, and so on. It would enable us to get some sense of proportion into matters if outside accountants and experts came in, and the work to be done by the staff would not be so great.

I was rather surprised by one statement in my right hon. Friend's speech. He referred to the matter of speeding up, and said that by the proposals of this Bill, by adding to the Commission, forming it into separate panels, each responsible for its own report, the through-put of work to the Commission could obviously be increased. That is perfectly true. At the same time, he seemed to give the impression that he was satisfied that no time could be saved in each individual inquiry.

I wonder whether that really is the case. Looking through the figures which appear in the Select Committee's Report, it does not seem to me that we can say that no inquiry can possibly be carried out, in all fairness and thoroughness, in under 18 months or two years. It is quite true that my right hon. Friend has resolved one difficulty which was given in evidence before the Select Committee, when it was stated by the Chairman of the Commission that the Commission itself was the bottleneck. As regards numerical strength, that aspect of the matter has been partially solved, but only partially.

If there is one bottleneck with an overriding Commission, let us be careful that we do not get five or six bottlenecks by splitting the Commission into panels. When we examine this Bill in its further stages I hope that we shall get some indication as to how we can avoid the danger of forming a series of bottlenecks taking the place of the one overriding bottleneck under the existing arrangements.

The question of saving time in each individual inquiry is not just a matter of saving the time of the Commission. It is not merely a matter of the Commission being able to say, "We have published so many reports." It is a matter of vital public and national importance that this time should be cut down, always with the qualification that in certain types of industry the inquiry must take a longer time. Everybody realises that. I cannot believe, however, that it is right, or in the national or public interest that, complaints having been received, about two years must elapse before a report is published on the justification for those complaints.

From the moment a complaint is received, in the eyes of the majority of the public the industry concerned is, as it were, marked with a black mark. That is a wrong impression. At that stage it is merely a complaint which is put forward for investigation. It is unhealthy that important industries of this sort should be under suspicion in the public mind for as long as two years. The fact that we shall now have more panels sitting, and that we have added a number of commissioners to look into these matters, does not automatically mean that each inquiry will take a shorter time. It is against the public interest, it creates an unhealthy position in the industry, and it is equally unhealthy from the national point of view, for an inquiry to take too long.

It would be most unfortunate if the impression were to be given abroad that the nation's trade was riddled with malpractices. There are bound to be some restrictive practices, but they are not confined to either branch of industry. We should try to avoid giving anything of an impression overseas that the bulk of our industries are rotten, dirty and dishonestly carried on.

Mr. Percy Daines (East Ham, North)

The hon. Member is making a point about delay, with which everybody would probably agree. Would he also comment on the fact that the Report on matches and match-making machinery was available on 3rd October, 1952—yet was not laid before this House until 12th May, 1953? It was in the hands of the President of the Board of Trade for nearly nine months.

Sir I. Orr-Ewing

That fact has already been commented on by the right hon. Member for Huyton, and I think we may hear more about it later. In any event, that is a matter for which this House is not responsible in any way. It is laid down in the original Act that the President has an absolute right, if he so desires, to deal with the Report in the public interest.

I hope it will not be thought for one moment that I am pressing that these inquiries should be merely surface inquiries. AH the evidence that has been heard from those who have been through this filter has been to the effect that they welcomed the thoroughness of the inquiry. At the same time, there was a considerable feeling that the Commission, in carrying out these early inquiries, learning the ropes and finding their way about this vast problem, had asked more of them than was necessary to arrive at a fair conclusion.

Another matter I want to raise is the question whether anything has yet been done to make it possible for the Commission to inquire whether those industries which have undertaken voluntary agreements within the recommendations and terms set out by the Commission have carried out those agreements. It is most important that when, rather than having an Order made against them, a group of industries act together voluntarily on the recommendations of the Commission, we should know that those terms have been complied with. I hope we shall hear that some machinery has been evolved by the Board of Trade to meet that difficulty.

This Bill is by no means the end of the story, but is helpful, it is essential, and it goes a long way to resolve the weaknesses which certainly exist.

12.38 p.m.

Sir Leslie Plummer (Deptford)

I am happy to be able to welcome this Bill and to say a few words in support of what the hon. Member for Weston-super-Mare (Sir I. Orr-Ewing) has said. It may be within the knowledge of the House that I was a Member of the Select Committee which sat for many meetings under his shrewd and penetrating Chairmanship, inquiring into the workings of the Monopolies Commission. I can probably say, on behalf of all those who were on the Select Committee, that we learnt a good deal and, in our Report, tried to illustrate some of the weaknesses that had become apparent from the questions we asked and the answers we received. This Bill goes a long way to meet some of the points we made in our Report.

I want to say a word about the staff. We were all quite shocked to find that out of the small staff of 50 employed by the Commission three-fifths—29—were unestablished civil servants, subject to dismissal at a month's notice, and not entitled to any of the terms of security which civil servants enjoy. The argument put to us was that this was natural because the staff was so small that there were only limited opportunities of promotion. Now that we are to have a much larger Commission, I hope that when the staff is added to, as it must be, consideration will be given to the application of Civil Service terms of security to as many members of the staff as possible.

I do not want it to be thought that this Bill cannot be improved. I shall make some suggestions, in the hope that by some administrative action now, or during the Committee stage, the President of the Board of Trade will consider them to be improvements. I was impressed by the fact that the firms, industries or associations summoned before the Commission are in the habit, as they are entitled, of using counsel to represent them. On the other hand, it is not the practice of the Commission themselves to employ counsel to represent them. Heaven forbid that I should demand that more lawyers should be appointed to jobs in this country, but when the President comes to choose his additional 15 people then, if he does not intend to give the Commission power to engage counsel, I hope he will consider adding among these 15 people counsel of ability who can act not only as members of the Commission in the normal sense but can use their legal training to explain what counsel for the other side are getting at.

It makes it rather difficult for the simple honest trades unionists and people of that kind who are members of the Commission to judge issues clearly when they are befogged by all the arts which lawyers can produce. That is a matter of great importance, and I hope that if the Minister is unable, by administrative action or amendment, to get the Commission to use counsel, at least he will include some counsel among the new members of the Commission itself.

Some of my hon. Friends and I were impressed by the fact that there was a general feeling on the part of industry that it was necessary to have counsel, not because the Commission was being unfair or unkind or asking the wrong sort of questions or pressing too hard but because industry thought they were better represented that way. If it is good enough for the industries being examined to employ counsel, I submit that it is good enough for the Commission who are inquiring into these matters on behalf of the people of this country and this House also to employ counsel in such cases.

Turning to the question of the enforcement of voluntary agreements, to which the hon. Member for Weston-super-Mare referred, it might be a good thing if the Commission could set up a special department for this purpose. It is clear that Section 12 of the 1948 Act gives powers to the Commission to inquire whether voluntary agreements are being adhered to, but in the evidence put before us it was equally clear that the Commission have never been asked to fulfil that function. I am not blaming anybody in particular for it, because the Commission have been grievously pressed by the amount of work put upon them and by the bottlenecks which have occurred because of the smallness of the staff.

Now that the Commission are being increased, however, and now that it is proposed that there should be an infinitely more efficient and workmanlike body, it seems that the time has come to give to perhaps one of the groups the power to see that voluntary agreements are being carried out. It is quite useless to say it is no longer necessary for the public to be suspicious of an industry because of the complaints having been made, because a Report has been published and a voluntary agreement is in operation, unless the public is assured that the voluntary agreement will be observed.

I was very uneasy about some of the evidence which was produced and which is contained in questions 201–218 of the Select Committees Report, of violations of the Dental Goods Order. It was not enough to enable me to say that the Order was being violated as a whole, but I was very unhappy about it because the evidence seemed to say, "Of course it is not being violated in spirit, but it is true that some people are being refused supplies. Perhaps they are being refused supplies because they are bad credit risks." When we asked "Were they bad risks?" we did not get a satisfactory answer.

I feel—and some of my hon. Friends support me in this—that the Order is not being properly obeyed. If we have that feeling about an Order which has the sanction of law behind it, how much more do other people, who know other businesses much more intimately than we do, feel about voluntary agreements which they suspect are not being maintained? They feel that they have no power at all and that it is nobody's concern to see that the agreements are enforced. If the President would consider that point and consider using Section 12 of the Act, setting up one group or perhaps several groups within the Commission, or a department within the Commission, to make sure that these agreements are being obeyed, we should be grateful. They could perhaps be given the power held by similar American authorities which can and do issue "Cease and desist orders" where they believe the law is being broken. If he did that, the Commission would be performing a very real service.

We must not blame the Commission for the delays in producing reports. After all, they were handed six industries to investigate all at one time. Nobody knew how long it would take, because the Commission were an entirely new organisation. I think they have done a very good job indeed. On the other hand, the Minister bears a serious responsibility for holding up the match industry Report in the way he did. It was a very long time. We have had no satisfactory explanation of why it was held up for so long. We know that he intends to increase the size of the Commission and the size of the staff, but if he persists in the shocking practice of holding up reports of this kind and deleting relevant passages from them, he will stultify the work of the Commission, to which I wish every success.

12.47 p.m.

Mr. Charles Fletcher-Cooke (Darwen)

In introducing the Bill, my right hon. Friend re-emphasised the empirical approach of this country in tackling this question. For that very reason, it seems to me, it is very important to get for the posts of chairman and deputy-chairman, who are now to be permanent, full-time officers, the very best people obtainable, because in many ways these men are even more powerful than High Court judges.

Let me explain what I mean by that. In the first place, they operate secretly and inquisitorially. They need not do so, because they can decide their own procedure, but, according to a paper from which I shall quote freely, "The Task and Methods of the Monopolies Commission," written by the first secretary to the Commission, Dame Alix Kilroy, who is known and respected on both sides of the House, it is stated quite clearly that hitherto hearings have all been held in private. It continues: There has been no confrontation of witnesses and no cross-examination, except by members of the Commission. It would clearly have been impossible to have public hearings and still maintain the principle that everything must be revealed to the Commission, leaving them to disclose in their report only the necessary minimum. That puts in a nutshell the need for secrecy and shows also that so far, and probably inevitably, the procedure is not judicial but inquisitorial. That being so. the powers of the chairman and deputy-chairman are enormous and almost unique in this country.

As I said, therefore, in a way they are even more powerful than the judges of the High Court. In another sense they are more powerful because they have to make the law as they go along as well as to interpret it. The definition of public interest which the right hon. Member for Huyton (Mr. H. Wilson) assumed to be so easy in these matters was, in fact, so difficult that the House was unable to give any definition at all when the principal Act was passed.

Again, before we decide that examples of resale price maintenance enforcement are necessarily bad I would quote again from this admirable paper by Dame Alix Kilroy, which shows just the difficulties in deciding what is in the public interest and what is not. She says: Is it more important for prices to be low for the consumer or for industry to be profitable enough to attract new capital and embark on schemes for the benefit of its workpeople? The two things are not necessarily the same at all, and any particular action may work either in one way or the other, but not necessarily in both. She goes on: Is it better for an industry to export goods or import dividends by taking part in the development of secondary industries abroad? Is it necessarily undesirable that using industry should buy its machinery abroad, even, indeed, supplying its own needs to the best advantage, but perhaps discouraging the growth of specialist machine industry here? These are very difficult questions of which this House has given the Commission no indication, and which it must not be assumed can be easily solved at all.

There is a particularly difficult conflict of which the United States has had experience, the conflict between the interests of the consumer and the interests of the competitor. It is too generally assumed that low prices, because they are in the interest of the consumer, are necessarily in the interest of the competitor, but it is quite clear from such decisions as the "Alcoa" decision in the United States and other decisions under the Sherman Act that very often a monopoly, which is a monopoly because it is efficient and only because it is efficient, not because it has indulged in practices not honestly industrial or anything of that sort, but, nevertheless, has beaten all its competitors in the field, has lowered its prices; and that is in itself in the United States a complaint because, of course, no new entrants can come into the field because the monopoly is so efficient.

Is the public interest best served by keeping prices to the consumer low or in allowing a healthy competitive atmosphere in an industry of that sort where new entrants and new ideas can grow up? Because, sooner or later, even the best and finest monopoly is apt to ossify.

All that is left to these gentlemen. All these recommendations are left to the Chairman and the Deputy-Chairman and the members of the Commission, and, in practice, it will mean, as it always does, that the lead will be taken in this matter by the permanent members, because always, in any activity, it is the permanent people, the people who are there all the time, who, subject to some slight criticism and to suggestions from others, really make the running. Therefore, it is vitally important that we should have men who are properly paid and whose security of tenure is properly guaranteed to them.

There are the difficulties that the right hon. Member for Huyton mentioned about the dangers of picking a loser at an early age, but, nevertheless, I suggest that that danger is much less than the need for discovering someone, and of giving him a long security of tenure, who can devote his life to what is really becoming one of the most powerful positions in the country. The risk has to be run.

The right hon. Gentleman, I thought, tried to poke a little scorn at the Government on the question of the nationalised industries, and I do not think he can be allowed to get away with that. The nationalised industries are, of course, by definition, monopolies, but this Commission does not deal merely with monopoly, which may be good and may be bad. Monopolies, just as much as other people, can indulge in practices which are bad practices for the health of the country.

I should like to give examples. First of all, they may favour large customers and powerful people by discriminatory tariffs or discriminatory prices at the expense of the small ones, and I for one do not see why that there should not be a proper subject for inquiry in the case of nationalised monopoly just as much as in the case of private trade; it is quite wrong that people running nationalised industries should be permitted, as they frequently feel they must, no doubt from the best of motives, but, to my mind, quite wrongly from the point of view of the economic health of the country, to favour big consumers at the expense of the small consumers; and there are many examples of where they have done so.

Indeed, there has been already in these reports a case—not a serious case, but a case—of just this sort of thing. In the Report on electric cables it was, of course, observed that the Post Office is almost the sole purchaser of these cables, and in the recommendations the Post Office was recommended to leave itself free in future to take a number of its purchases of cables, of which it is the practically the sole purchaser, from independent makers, to allow the development of independent competition in the general interests of the State. Suppose the Post Office decided that it would not alter its buying methods, or selling methods for that matter? Why should it not be reported on in the same was as anybody else? I really do not see why not.

Mr. H. Wilson

Is it not one of the essential differences, at any rate, with the Post Office, that if it were conducting its affairs in a way which might be harmful to any small man or the country, its activities can be subjected to the day to day scrutiny of this House by Questions to the Assistant Postmaster-General, whereas if similar action is being taken by a private monopoly there is no redress at all? I agree that with nationalised industries there is a difference from the Post Office, and it is also the case that the nationalised industries, as has often been said in this House, operate in the way laid down in legislation, but that is not true of I.C.T. or any private monopoly.

Mr. Fletcher-Cooke

The right hon. Gentleman has a good point on the Post Office. One of the ways of seeing how it works is by Questions put down in the House, but so far as the nationalised industries are concerned the case is different, and I was not anticipating that we should ever be allowed to put down Questions on, say, the purchase of cables by any of the nationalised industries or other raw materials or the sale of raw materials, because, for one thing, if we were to ask Questions on all sorts of matters of that kind we should not have time to get any other work done in this House.

Machinery has to be created to see that the nationalised industries are susceptible to some examination, and I hope that my right hon. Friend, though, quite rightly, he has not been able yet to do that, with the experience we have had so far, and which is so far limited, will not dismiss from his mind this matter that has got to be settled sooner or later.

I should like to ask my right hon. Friend a question. When I was in the United States last summer investigating their monopoly legislation all the people I met, the dons, the lawyers, the Government officials, took a very great interest indeed in our experiment in a matter in which they regard themselves as pioneers. One thing which interested them was that we do not investigate individual firms or named businesses, but a business as a whole, and, therefore, we were not, as it were, discriminating apparently unfairly between one firm and another. They thought we had an edge over them on that.

Nevertheless, they expressed great bewilderment as to the method by which individual activities were selected for examination. What they wanted to know was, on what principle does the President of the Board of Trade choose rainwater goods and not chemicals, on what principle does he choose dental goods and not oil, to take perhaps a tendentious example? That was a matter on which I was not able to satisfy them, because it is a matter I do not understand. Therefore, my question to the President is, on what principle does he work? Is it the size of the industry, the number of rumours of restrictive practices or the importance of the industry in the national economy or what?

The power of selection is of immense importance. Mr. Justice Jackson, when Attorney-General of the United States, was once asked on what principles did the Anti-Trust Department of the United States select people to prosecute. He said, "We select on political grounds. On what other grounds could you select?" The choice is so enormous and the number of potential defendants is as wide as the list of firms in the directory. We have to have a principle and it is vitally important to know what that principle is because it is a great burden on an industry to be investigated, even if it comes out with a completely clean bill. It is a tremendous burden even to suggest that there is a prima facie case against it. It diverts enormous numbers of staff from their normal tasks.

The mere matter of selection itself—unless used fairly, as I am sure it is—is liable to be a great weapon of oppression on the industry of the country. I say I am sure that the method of selection is used fairly because we have great confidence in our President. But I should like the Parliamentary Secretary, when he replies, to tell us exactly the method not merely in a vague phrase such as that "they are selected on merits, taking every circumstance into consideration". That would mean a purely arbitrary power and we should not know the rules at all. Will he tell us of some well-defined canons by which the President decides what to select and what not to select? The President said that he has innumerable suggestions. Even when he has cut away the lunatic suggestions there must remain an immense field for selecting and an immense field for ordering priorities of selection. On what basis does he make a selection and on what basis does he order priorities? That, as far as industry is concerned, is often the root of the matter.

1.3 p.m.

Mr. W. T. Williams (Hammersmith, South)

I confess that I approach this Bill with a great deal more suspicion than has been apparent in the speeches made this morning. In part that may be because I am a member of the Co-operative group in this House and the Co-operative movement has perhaps been one of the sections of the community that has suffered most seriously from monopoly practices.

It seems to me that the President of the Board of Trade revealed some justification for that suspicion in a sentence he used in his opening speech. It seemed to represent the typical Government attitude to the whole of this matter. It was an extraordinary sentence. He said he believed that a climate of opinion was being built up by spotlighting these practices with a searchlight. Perhaps it might be not unreasonable if we of the Co-operative group were to express our point of view in this House because the group does represent the point of view of the largest group of consumers in the country.

From our point of view there is little doubt that in influencing business practices the legislation of the Government on monopoly has not been a remarkable success. Since the 1948 Act, 12 products have been referred to the Commission and seven—I think the President said six, but I believe it is seven—Reports have been received on those products. Every one of those Reports—some coming rather late, but better late than never—did reveal gross abuses of the public good, which in my view do not justify the rather optimistic view expressed by the President and the hon. Member for Weston-super-Mare (Sir I. Orr-Ewing).

Prices have been held artificially high, boycott agreements have been entered into, restrictive entry into industry has been practised, sales quota arrangements made, restriction of competitive entry is the practice in many monopolies and there is rigging of estimates and prices. All these things have been reported, not by any prejudiced viewer, but by the Monopolies Commission reports. Yet the result of all these relations has been a veritable sprat of legislation. The Government have introduced only one statutory order—the Dental Goods Order, 1951, made by the then Minister of Health. That, according to the 1952 Report of the Monopolies Commission, has been notable for the breach rather than for the observance.

In fairness one has to add that the Government have expressed their determination to watch the working of the new arrangements and we are told they are proceeding with various discussions. With what one might call typical Government achievement, no result has been reported from those inquiries and no consequence from the discussions. In the words of the P.E.P. report on the subject: the sum total of Britain's experience of enforcing anti-monopoly legislation amounts to that provided by two relatively small industries. Even to achieve this tiny consequence has taken five years, and of the 12 products already submitted to the Commission five remain still shrouded in mystery.

In 1948, the then President of the Board of Trade, my right hon. Friend the Member for Huyton (Mr. H. Wilson) said that at that time he had a list of 38 more cases suitable for reference to the Commission. I have beside me another list of 60 more that I could offer to the President of the Board of Trade for his consideration, if he would care to have them. It therefore arouses some suspicion that to deal with this mountain, or snowball, of irritation to the consumer the Board of Trade have seen fit, at this late day, to introduce no more than this tiny, trivial and insignificant Bill.

From the point of view of doing anything about monopolies in this country, this Bill is really worse than useless. I say that because I believe that hopes were raised by the expressed intention of the Government, in the Gracious Speech, to extend legislation and do something about monopolies. If this is all the Government are going to do now, or in the near future, those hopes will be very far from fulfilled. Certainly the Bill will quicken the rate at which the Monopolies Commission can investigate and report and I would not have it thought that I was despising the day of little things.

The Bill is to be welcomed as far as it goes, if it does so much as to quicken the output of reports. It is some comfort that the Government can be shamed into some kind of action by somebody. But this is a very different kind of Bill from the Bill the Conservative Party promised in their Election manifesto and foreshadowed in the Gracious Speech because this is not "extending legislation to deal with monopolies." In spite of the Preamble to the Bill this is not strengthening the powers of the Monopolies Commission; by its very nature it might achieve the absolute opposite of strengthening the Commission and in fact end by strengthening monopolies.

Let me quote the Report of the Select Committee, to which reference has been made. In dealing with the inquiries that are carried out and the length of the reports, the Committee say: … the effect on the general public and on industry is not satisfactory. Once the Board of Trade have published receipt of a complaint in their annual report, an industry becomes, as it were, sub judice. That is, nothing can be done until the Board of Trade makes up its mind what it intends to do with that industry which has been reported.

The Select Committee go on to say: It cannot be a good thing for a state of uncertainty to continue for what may be a period of years. Indeed, if the experience of the industries which have been reported on so far is any criterion, it might be not for a period of years, but might quite easily be for ever.

To the solution of that problem the Bill makes no contribution of any kind. It merely makes a suggestion that the personnel of the Commission might be increased. Even that is little more than a pious bit of window-dressing. It is no secret that even in the case of the present Commission—the former President of the Board of Trade said as much this morning—the Board of Trade have not always found it easy to get suitable persons who are willing to serve. Now, it is proposed virtually to treble the number of people on the Commission. Can the President of the Board of Trade say where he will get those new members, or is he following the example of his right hon. Friend the Minister of Transport in appointing people for no other qualification than that they can write English amusingly?

Perhaps a better way of enlarging the Commission would be, not by appointing new permanent members, but to appoint new persons to panels on an ad hoc basis. In this way, continuity could be maintained on the Commission by means of its permanent members, while making it possible for a wide range of experienced people to serve for a shorter period. Such people coming on to the panels, under the chairmanship, perhaps, of a permanent member of the Commission, might be drawn from a wide area of industry and commerce, and from among workers and consumers, and could make a contribution on the particular matter in which they were experienced. They would then leave the Commission to continue with its report under the guidance of the permanent chairman or members.

The Bill makes no provision to deal with one of the major bottlenecks of the Commission. The Select Committee drew special attention to the delay in costings investigations. The Bill, of course, makes no attempt to overcome this delay. The Select Committee on Estimates, whose Chairman this morning repeated the suggestion, suggested that private firms of accountants might be employed to relieve the pressure. Private firms of accountants, however, are themselves often employed by the parties who are the subject of investigation; the larger the firm, the more likely that is true. Again, the greatest merit of having accountants who can deal with costings investigations is that they can be available for day to day contacts if delay is to be overcome. I suggest, therefore, that the President of the Board of Trade ought to consider the setting up of a costings division within the Commission. There is a large source of possible personnel that he might obtain from his right hon. and gallant Friend the Minister of Food.

The real weakness of the Bill, however, lies in the fact that it gives no promise of attempting really to strengthen the Commission in dealing with monopolies. It does nothing to meet the need for some means of enforcing agreements voluntarily entered into between the Government and the trade associations, nor does it throw any light on the Government's intentions on the only matter which really counts. If the Government are sincere in tackling the evil of monopoly, how do they intend to deal with undesirable arrangements which are reported by the Commission?

By the 1948 Act, nine Government Departments were declared to be competent authorities to make statutory orders following a recommendation from the Commission. As I have said, however, only one Government Department—the Ministry of Health—has acted. All that the Government are now doing is to make provision for a still larger number of reports with which to fill the shelves of the Library. They make no provision for getting anti-monopoly action.

If we could feel sure—many of us on this side of the House have no such assurance—that the Government would use the information which they receive, we should be more confident. But the Colonial Secretary, for instance, in the debate on the 1948 Bill, when speaking for the then Opposition, made it clear that he was completely without interest in general essays to deal with monopoly by the Board of Trade. His point of view still seems to be that of the Government, of which he is a Member.

We are therefore left to believe that the Bill is evidence not so much of the Government's interest in tackling monopolies as of putting off the day of judgment on them. The Government have so far refused to go on with the legislation suggested by my right hon. Friend for dealing with resale price maintenance, although that has reached scandalous proportions. We have already heard of the delay in the publication of the match Report, and to this day no action has been proposed or suggested in relation to it.

Many of us feel that the Government are also dragging their feet side by side with the United States in the committee that was set up by the United Nations to inquire into and to deal with international restrictive business practices. We are given to understand that the only country that will proceed at the moment is Sweden and that our own Government are unwilling to take any action. I ask the Parliamentary Secretary, when he replies, to say what instructions have been given to our representatives on that restrictive business practices committee.

We shall not oppose the Bill, because it does do something; it is desirable to get more people at work so that the work might more quickly be done. Nevertheless, it still leaves most things to be desired. We shall try, so far as the Government permit us, to help to make it a better Bill in Committee, but we should be glad of assurances that the Government really mean to use the resources of the Commission and their reports for a positive purpose and that they will use the reports already in their possession to hasten legislation to end abuses of which everybody is aware.

1.19 p.m.

Mr. Richard Fort (Clitheroe)

In two important respects, the hon. Member for Hammersmith, South (Mr. W. T. Williams) did not face the problems which were outlined in the notable speech of my hon. Friend the Member for Darwen (Mr. Fletcher-Cooke). One of the proposals put forward by the hon. Member was that there should be temporary commissioners, but in view of what my hon. Friend said about the inquisitorial powers of the Commission this seemed to me to be a very dangerous suggestion. The Commissioners have these unique powers in England and I am sure that they can exercise them satisfactorily only if they are a really expert body of people with an accumulation of experience.

Nor did I think that the hon. Member answered the point made by my hon. Friend the Member for Darwen about foreign arrangements covered by the Havana Treaty. The problem is touched on in the report of Dame Alix Kilroy. Until there is a general consensus of opinion about what is the right action to be taken economically regarding the matters raised by Dame Alix Kilroy about arrangements at home, it will be even more difficult to do anything about foreign arrangements.

In view of the problems that the United States have encountered as a result of the Anti-Trust Division of the Department of Justice trying to extend its control over international agreements, it was, clearly, sensible to set up the original Commission without the right to become involved in export trade. Both the last United States Administration and the present one has been deeply involved by the Department's action in the litigation being undertaken towards the oil companies.

One excellent point was made by the hon. Member for Hammersmith, South and I hope that the Parliamentary Secretary will tell us that he can do something about it. That is the appointment, as part of the extended commission, of an accounts branch so that there will be a group of specialist accountants able to carry out investigations thoroughly and quickly.

I am pleased that recognition has been given to the important position of the Chairman. My hon. Friend the Member for Darwen touched on the importance of the chairman in the inquisitorial system inevitable in the Monopolies Commission. But there is also another point. One of the most successful of the overseas organisations dealing with this problem is the Combines Commission in Canada. One of the reasons for its success during nearly 30 years has been the eminence of the gentleman who has acted as chairman. When I lived in North America the chairman was a civil servant who, I think, has recently retired, Mr. MacGregor, a man of outstanding calibre in the Canadian Civil Service. I have no doubt that the subsequent appointment is of the same calibre. But to get outstanding people to fill the posts the points made by the President of the Board of Trade have to be recognised.

I was glad to hear the President say that we are to continue the ad hoc approach for the time being. On that, on the whole, there has been fair agreement about this in the House, although there may have been some sniping from hon. Members opposite. In one industry, the insulin industry, the Commission have been able to make recommendations about the public interest which it might not have been able to had certain practices been outlawed by legislation. There is a flexibility under our procedure which it is not possible to obtain under the American legislation.

Hon. Members opposite who criticise the ad hoc approach overlook the powers under Section 15 of the principal Act for the Commission to look into practices which are common to a wide range of industries. At present, the Commission are investigating a range of practices remitted to it last December. I hope that we shall get an account of how widespread are these practices and how deep they go throughout the industries; and also the recommendations of the Commission in a form which will enable the Government to introduce legislation to stop the objectionable practices which may be discovered. I am sure that this is a much better approach to the problem, this developing from the initial case approach—the ad hoc approach—than to try to lay down, before we have the information, exactly what are the practices which we feel should be outlawed.

One of the problems with which the United States legislation is faced is that, owing to the wideness of the terms in the original Sherman Anti-Trust Act and the subsequent Clayton Act, the whole definition of what is forbidden relies on judicial decision. The Acts have produced a bewildering number of decisions, which sometimes outlaw this and sometimes outlaw that. They are, in effect, as ad hoc as the recommendations of our Monopolies Commission. Because they are being made by different courts on separate companies, and not on the whole industry, they are extraordinarily diffuse.

I endorse the praise given by the President of the Board of Trade for the Reports of the Commission, both the individual Reports on industries and the annual Reports. They contain excellent summaries and they set out the facts with a clarity which is welcomed by those of us who have had something to do with United States judicial decisions. In this field we have, as it were two facets of the truth. One is political, which greatly concerns us and our constituents, and the other is economic. They are not contradictory but they do not always touch closely on one another.

Despite the decisions of the United States courts over so many years I have yet to see in any American publication a reasonably exact assessment of what has been the effect of the anti-trust legislation in all its different forms on particular industries; cases where prices have actually been reduced or better quality goods supplied to the customer or more efficient processes introduced.

I should be obliged to the Parliamentary Secretary were he able to tell us not only what is being done with the dental goods industry and in the rainwater goods industry as a result of the investigations, but whether there" are definite examples of reduced prices or better service to the customer as a result of alterations in the restrictive practices in which these two industries were found to be indulging.

On the political side we reflect what we are told by our constituents. There is a widespread uncertainty and feeling of insecurity in many industries, because it is suspected that there are restrictive practices or monopolies working. That is especially true of smaller companies in business—the shops and the smaller manufacurers. There is widespread anxiety.

So far as the Commission is helping to remove that anxiety and so far as our wish is to strengthen the Commission so that it can meet a real political factor outside this House, it is our duty to support Bills such as this and, as we get more information, to produce legislation which will deal with practices which, undoutedly, are injurious. But that does not necessarily mean that we have to say now, before we have examined a fair number of cases, that certain practices are obviously so wrong that they should be outlawed immediately. This problem is far too complicated for us to proceed in that way.

Even in the case of the match industry, where there has been such a long delay, one must compare that with the far longer delay and the far more farcical prevarications of the United States Government with the oil companies. They rushed into a situation and found that it was so closely tied up with the United States export trade and had world-wide connections of great political importance to the United States that the Department of Justice had to retreat from the original position it took up and finally had to follow an entirely different line of litigation. The example of the United States is a partial explanation of the care with which the President of the Board of Trade has proceeded in the match industry.

Let us make up our minds that we are really on the right road by taking this ad hoc approach, by examining cases and building up a gradual knowledge from which we can then outlaw certain practices piecemeal. The reason why we on this side of the House welcome the Bill, which is welcomed in the country, too, is that it will speed up the time when we can proceed along the road which I, having seen a lot of United States procedure, am convinced is the right one.

1.34 p.m.

Mr. J. Grimond (Orkney and Shetland)

I do not entirely share the opinion of the hon. Member for Clitheroe (Mr. Fort) about the advantages of the piecemeal approach. In saying that, I do not want it to be thought that I want to swing over entirely to the opposite approach of trying at once to rush in and produce general legislation defining every type of restrictive practice which should be forbidden. But there is widespread dissatisfaction today with the slow speed at which we are tackling this admitted evil of restrictive practices and semi-monopolies.

Surely it is reasonable to ask that where a practice has been clearly condemned—and there are certain practices which have been condemned by the Monopolies Commission and their opinion has been widely endorsed—some effort should be made to outlaw it, not only in a particular industry under discussion but in general throughout trade. I cannot see that there will be any harm in doing that. By that means we should be building up on the piecemeal approach a corpus of opinion on this matter and speeding up the process of breaking down restrictive practices and monopolies.

I am not quite clear that it is entirely fair to the Commission to ask them to make all the law as they go along. I think that Sir Archibald Carter has complained that he had not much direction from Parliament. That is a fair complaint. It is reasonable for Parliament to indicate rather more than it has done what type of restrictive practice it thinks is undesirable. Having said that, I should like to say something about what I regard as the background of the matter.

Mr. Fort

May I correct what is perhaps a false impression? I agree with the hon. Gentleman that we should legislate against practices of which we disapprove. That is surely what would follow from investigation under Section 15 of the principal Act and it would include the practices about which the President of the Board of Trade gave the remit to the Commission last December.

Mr. Grimond

It may be that I misunderstood the emphasis of the hon. Gentleman's speech. I thought that he was strongly advocating the piecemeal approach. I, for my part, would like to see the Government move over into the general field and there lay down general rules about certain practices on which in my view there is no doubt at all. If the hon. Member agrees about that then we are at one, but it must be borne in mind that the last few years have been particularly favourable for the creation of restrictive practices and monopolies.

The war and the post-war world has restricted the entry into many trades and made it difficult for new people to enter business, partly through restrictions and partly through such tendencies as the fact that a great many contracts are placed by the Government and they find it convenient to go back to the same firms, partly through the difficulty in raising capital. In this matter of monopoly and semi-monopoly, as in many other matters, prevention is certainly better than cure. It is true that there is a very important place for anti-monopoly legislation, but I very much hope that there will be a general freeing of entry into business and a general breakdown of restrictions which have tended to create unnecessary and artificial monopolies which have acted against consumers.

I share the view of those who feel that this Bill does not meet the need. It does not meet the pledges which the Government gave in 1951 about the need for introducing a more comprehensive Measure to protect the consumer against restrictive practices of all sorts. But I am a little chary of the word, "monopoly." It is sometimes taken to mean that there is a great section of the British economy in which there is a monopoly in the hands of one firm. In my experience there are very few such sections of the economy. There are many trades in which there is a semi-monopoly, a ring, an agreement for resale maintenance; but there are very few trades in which there is anything approaching complete monopoly.

If we are to face up to the subject honestly we must face the few parts where there is, in fact, a complete monopoly, and those are in the sectors of the nationalised industries. I do not say that in a spirit of antagonism to the nationalised industries. I hope that the approach of the Commission will not be antagonistic, because there are certain trades and industries in which we may have to have a monopoly. The important consideration is to see that such a monopoly does not abuse its position.

It may be perfectly well argued that as these industries were set up by Act of Parliament and as, at any rate in respect of the Post Office, Questions can be asked. Perhaps a different approach should be made to them than should be made to monopolies in the private sector. I do not think that it would be proper to argue that at length now. All I say is that if we are to have legislation to deal with monopolies and if we are to have an inquiry into monopolies, from the public point of view it should in all fairness cover the parts of the economy where there is no question but that there is a monopoly.

Mr. Austen Albu (Edmonton)

Are there any matters which the Monopolies Commission discovers from private industry which are not published in the annual reports of the various nationalised industries?

Mr. Grimond

I could not tell the hon. Member offhand, but I should have thought that there are many suggestions about the nationalised industries which could be the subject of further investigation, not necessarily by the Monopolies Commission. There are matters which hon. Members of this House would like to ask Questions about, but they are not able to do so. In my own mind I believe there is a field of inquiry in these nationalised industries which, as I have said, should not be undertaken with any hostile intent, but to complete the picture of the British economy.

The other point which seems to me to need attention in this matter is the international aspect. I would not like this country to find itself in the position in which America is, but I do not think that that would result from the suggestion made by the hon. Member for Hammersmith, South (Mr. W. T. Williams). He had in mind an international approach through an international body to this question of monopoly trade, and I hope the Parliamentary Secretary will be able to say something about the Government's attitude to that when he comes to reply.

I feel that in all this it is extremely important to keep the Monopolies Commission entirely free from any charge of any sort of political bias. It has been forcibly said by one hon. Member today that it has certain iniquisitorial powers, and that is quite true. If we are to set up a Commission with such powers, it is most important that it should have a fairly free hand to investigate restrictive practices, which turn against the public interest of whatever kind they be. I think myself that Parliament has been guilty of skating past some restrictive practices because they thought to investigate them would have unfortunate political repercussions. If the Commission are to do this job properly every type of restrictive practice has to be examined, not from a hostile viewpoint, but in the general interest. There are certain trade union practices, resale price maintenance, some trade customs which some people think are perfectly proper but about which others may have different views, and so on. It is most important that as impartial a view as possible should be taken of these things, and that wide inquiry should be made if we are going to have an inquiry into the state of industry at all.

Sir I. Orr-Ewing

Is the hon. Gentleman suggesting that further powers are needed beyond those which are covered by Section 15 of the principal Act? Is he suggesting that a form of inquiry, which was not contemplated at the time of the 1948 Act and covered by Section 15, should now be considered?

Mr. Grimond

Yes, I think I am. I am not sure that Section 15 is the right one under which it can be done, but I am suggesting that.

Finally, as to the proposals in the Bill, I agree that there is a danger of giving too great a tenure to the chairman, because it is conceivable that the Commission might be saddled with a bad chairman for longer than one would like. Certainly, that is something that is worthy of consideration, but on the other hand it is absolutely essential, if there is to be a Commission of this sort, that the chairman should be a person with the very highest level of ability and that he should inspire the greatest public confidence.

I agree with the right hon. Member for Huyton (Mr. H. Wilson) that it would be unfortunate to have as chairman a monopolist or one who had suffered from monopolies. We want a man who will approach this whole subject in as judicial a way as possible. Having chosen him, we must allow him adequate staff, and at present that is what the Commission have not got. I do not know whether it would be better to employ outside firms or whether the Commission should increase their salaried staff. That is for consideration, but some extra staff must be provided.

As I say, while I do not feel that this Bill anything like meets the need that there is for more legislation in this field, as far as it goes it strengthens the Commission and enables it to act more speedily, and, therefore, I certainly hope that it will pass its Second Reading.

1.45 p.m.

Mr. Austen Albu (Edmonton)

The hon. Member for Darwen (Mr. Fletcher-Cooke), in quite an interesting speech, referred to the difficulty which any one who examines present practices in industry will have in trying to determine what is in the national interest and how these practices will affect the national interest. Perhaps it is on that account that I mainly welcome this Bill, which is going to enable the Monopolies Commission to expand our knowledge of the way industry works, its structure, its procedure and its practices.

I always remember, and continually quote, the statement of Sidney and Beatrice Webb that the best method of public control of any sort of organisation, whether it be a private or a public business, is by measurement and publicity. There is no doubt at all that the Monopolies Commission has effected a very considerable measurement—using the word in its broadest sense—and publicity of the way some parts of British industry are conducted. Undoubtedly the expansion of its activities envisaged in this Bill will greatly increase our knowledge. I believe that is of great importance, because there is a great deal of ignorance—not confined to one side of the House or to one particular section of the public—about the way in which industry really works.

It is one of the greatest advantages of the nationalised industries—and I say this particularly to hon. Members opposite—that nobody need be really in ignorance of the structure of the industry, the way it conducts its business, its efficiency as measured by figures at any rate, its accounts, its price fixing arrangements and so on. When the hon. Member for Darwen referred to the dangers of a nationalised industry making special arrangements in favour of a particularly large undertaking, I think he was underestimating the extent to which it is possible to inquire into these things, either through the Minister or by inquiry from the chairman of the boards themselves.

Mr. Fletcher-Cooke

I quite agree with the hon. Member that it is always possible to find out what the nationalised industries are doing, but it is very difficult to stop them from doing it. Indeed, we had an example of that the other day. The North-West Division Gas Board admitted quite freely that it was favouring a large consumer because it was frightened that that consumer would turn over to oil if some arrangement was not made with it, and if the Board refused to do anything about it. Publicity is not always enough.

Mr. Albu

No, but if public feeling is strong enough on the matter I have no doubt at all that any nationalised board would inevitably have changed its practice, because in the end the Minister is perfectly entitled to give a direction. But I had better not be led too far on that aspect because, as a member of the Select Committee examining the method by which the affairs of the nationalised industries should be made known to the House, I might be led into difficulties in matters of Privilege. So far I have only been concerned with things that are within the knowledge of the House as a whole, and I do not think it is wrong to make that comparison.

So far as I know, no single one of the matters which can be inquired into by the Monopolies Commission is not freely available in the case of the nationalised industries, in annual reports or in other ways to the Members of this House. What action is subsequently taken does not arise directly out of the report, but is the responsibility of the Government of the day. That applies to whether it is a report from the Monopolies Commission or of a nationalised industry. The nationalised industries are in a far more exposed condition to public knowledge and public criticism than any part of private industry, and I think it is extremely important that we should bear that in mind, because there is a lot of extremely irrelevant criticism about the expenditure and the affairs of the nationalised industries which are public knowledge.

The importance of a continuing study of the way in which British industry conducts its affairs is shown in debates in this House, where there is romantic ignorance sometimes on the part of hon. Members opposite about the structure of British industry. It is by no means universal, because there is a very strong conflict of view even among hon. Members opposite. Some of them are concerned with very large organisations, and some, by virtue perhaps of their family relationship, happen to be directors of small businesses. The result is that we often get a very romantic picture of how the whole of the British economy is dependent on small businesses. That is really not the case.

When one examines the Reports of the Commission, it is interesting to see that they rather bear out what, according to the hon. Member for Darwen, who wrote a couple of very interesting articles in the "Manchester Guardian," is the case in the United States, that the attack on large-scale businesses and what is normally called monopoly is frequently made, not in the interest of the consumer, but in the interest of small businesses or small retailers who are anxious about the increasing efficiency of some large-scale undertaking. Many of the practices exposed by the Monopolies Commission are not practices in defence of monopoly.

As the hon. Member for Orkney and Shetland (Mr. Grimond) pointed out, that is not really the problem, but the protection of a very large number of smaller undertakings, assisted probably by a large manufacturer who finds it is in his interest to maintain a number of small undertakings within a ring of private law. This, I think, is a very serious thing for British industry, because it is by no means the case that under modern industrial conditions the smaller undertakings are the most efficient. As a matter of fact they are frequently very inefficient, and anybody who has read the Report published only yesterday by the Advisory Committee on Scientific Policy will see that reference is made in it to the lack of adequate technical knowledge and the use of scientific skill and manpower by small undertakings.

Of course, if these smaller undertakings with their lack of scientific assistance and knowledge, and probably their greater inefficiency, are protected by the sort of practices on which the Commission have so far reported, it is the consumer who will suffer, and most of these practices have that effect. Today, with the extraordinary development particularly of chemical science and the interchange-ability of materials, it is necessary, if the Commission are examining an industry from the point of view of the national interest, to make sure, not only Whether or not a particular firm has a monopoly of a certain material, but whether or not there are alternatives to that material and whether or not there is competition not between firms, but between materials or products.

It is in this sense again, of course, that the nationalised industries are very subject to competition. For instance, in the case of the fuel and power industries there is considerable competition between the various forms of fuel, and in the case of transport considerable competition between the various forms of transport, and growing competition from the air. It is very important, therefore, that these things should be well understood.

The conception of monopoly is changing all the time. So far the matters which have been examined concern, in general, price and marketing policy and the way by which goods finally reach the consumer. But these, in my opinion, are not the only matters which the Commission should investigate or the only matters on which we should have knowledge if we are to make up our minds what is the public interest in the economic sense.

I think that the Commission should, perhaps, widen their inquiries into the effect of large-scale advertising, and, if we were ever to get sponsored television, I should certainly want to see an enquiry into the effects of what would become not exactly a monopoly, but at any rate a very small oligarchy of advertisers which might have a serious effect on the public interest from the point of view of concentrating the power of a large number of small manufacturers.

I also feel that the Commission ought to widen their inquiries, in view of the enormous scale of modern investment and the interdependence of industries today, into the way in which investment policy is determined, because these matters are as much matters of public interest as are matters of price and marketing policy. Until we understand all these things—and there is an enormous gap in our knowledge of how British industry is conducted—we cannot really determine what is the national interest and what is the best policy towards industry.

Hon. Members opposite sometimes accuse hon. Members on this side of the House of dogmatism in regard to nationalisation, but they should be the last to object to our finding out everything to be found out about the present structure and motivation of British industry and about the way in which its policy is determined. When we have that knowledge we should be able to make up our minds on industrial and economic policy in a much more informed way.

Finally—and this is a matter to which reference has already been made by several hon. Members—I hope that in future the Commission will be able to report from time to time on the carrying out of their recommendations. When the Select Committee on Estimates makes a report, it is the duty of the responsible Department to make a reply within a short time so that the House is aware whether or not the recommendations of the Committee are being carried out. In the same way, I believe that when the Monopolies Commission makes a report it should be the duty of the industry to inform the Commission in what way it is carrying out their recommendations, or the instructions which it receives from the Minister, and the Commission themselves should publish a statement in their report of what action has been taken and how they think it is affecting the public interest.

1.59 p.m.

Mr. J. E. S. Simon (Middlesbrough, West)

The two sides of the House may disagree as to the extent of the economy which should be left to private enterprise, but I think that we are all agreed that the economic advantage of private enterprise in the sphere left to it can only obtain under competitive conditions. It is only under those conditions that private enterprise offers a reward to superior efficiency. It is only under these conditions that it directly relates profit to service to the consumer and to the community.

The hon. Member for Orkney and Shetland (Mr. Grimond) warned us, I think rightly, against being fascinated by the word "monopoly ". It is, of course, not only where there is only one producer in the field that the danger arises. We object to any monopoly, and consider the harm of a monopoly is that in certain fields the producers can influence the price of their products instead of responding to the market price. In other words, they make a profit other than at the cost of their own superior efficiency.

We should be warned that that is true not only of private enterprise but also of the nationalised industries. The same criticism applies equally, of making a profit other than at the cost of efficiency. It is that to which we prima facie object in a nationalised industry rather than, as the hon. Member for Edmonton (Mr. Albu) suggested, that we do not know enough about what goes on in the industry.

It might lead to a greater sense of proportion if we realised that restrictive practices obtain not only on the part of employers but on the part of employees. In both cases there is probably a prima facie objection, and in both cases the practices can be justified in particular instances. If that is true, it means that we have to adopt to a considerable extent an empirical approach. I agree with the hon. Member for Orkney and Shetland that that does not mean that we cannot say that a certain practice is inherently likely to be objectionable. But that we should be alive throughout to the fact that we shall probably have to make exceptions.

There are many trade union practices which are recognised as obviously necessary for the protection of the living and working conditions and the remuneration of the workers. Similarly, as we have seen in the Report on insulin, there are restrictive practices on the part of employers which are found to be operating in the public interest. If we adopt an approach of that sort I am sure that this problem admits of solution. The Monopolies Commission is designed to operate only against a certain type of monopoly, the artificial monopoly. I am not convinced that it is the right way to deal with nationalised monopolies, although the same problems arise and must be dealt with.

There are natural monopolies where, owing to the inherent structure of an industry, the price can be influenced by the large producers. The steel industry is a typical example. The Government have produced a logical and well-balanced scheme to solve the problem there. In the field of artificial monopolies, the Commission is the instrument at our disposal.

Many hon. Members have drawn attention to the dangers of delay in the production of the reports and I should like again to emphasise the point. The reports that we have had suggest that in certain sections of the economy there are widespread monopolistic practices. Those which have been investigated have in many cases been found to be against the public interest, which necessarily suggests that in other industries in the same field there may be similar practices. It is essential that we should press on, not only by investigation but by general legislation, to deal with these practices.

The Select Committee drew attention to the fact that there are practices in a number of different industries, such as exclusive dealing and the collective boycott. The President of the Board of Trade has dealt with this matter in the way it should be, by referring the whole system of practices to the Monopolies Commission. We should suspend judgment until we have the report on such practices, and we certainly would not be entitled at this stage to outlaw them without knowing what the Commission were going to say about them.

Another example is rainwater goods. The 1949 Report of the Board of Trade on the Monopolies Commission makes it plain that cast-iron rainwater goods were selected only because they were typical of a larger sphere of goods produced for housebuilding, attention to which had been drawn by the Simon Report. There were many conditions in the industry investigated which were found to be unsatisfactory and operating against the public interest. That suggests that in the rest of the industry there may be similar practices.

For that reason I welcome the Bill, which will enable further investigation to be carried out in that field. In reports of the Board of Trade year after year, the same complaints appear and are not investigated. They are reported, but there is no possibility yet of investigation. It is made clear in the 1949 Report of the Monopolies Commission that the requests mostly come from those who have found themselves unable to enter a particular trade, or who cannot obtain from suppliers the rate of discount to which they consider themselves entitled. That means that there are traders with a burning sense of industrial grievance and that they are kept labouring under that sense of grievance until their complaints can be properly investigated.

With the enlarged Commission, an important question arises. Attention has been drawn by the hon. Member for Deptford (Sir L. Plummer) and my hon. Friend the Member for Darwen (Mr. Fletcher-Cooke) to the way the functions of the Commission should be split up. There are three quite separate functions. First of all, there is what my hon. Friend called the "inquisitorial" job of investigation. Secondly, is the job of pronouncing judgment, and, thirdly, there is the job of enforcing judgment. I should have thought that it was undesirable to mix those three functions.

The hon. Member for Deptford suggested that the Commission itself should have sitting on it counsel who can engage in investigation and the cross-examination of witnesses. I submit that this is inherently undesirable. It means that the Commission, instead of holding judgment, enters into the fray and will be regarded, as the chairman of the Commission said to the Select Committee, as "professional ring hunters."

It is desirable that a sub-committee, consisting of a certain part of the Commission, should be charged with the job of investigation and, if you will, of prosecution, and that a separate part of the Commission should sit in judgment, weigh up and recommend. I should have thought there were big advantages in giving to the Commission themselves the job of following up reports. They have power under Section 15, since they have, during their investigation, acquired a mass of detailed knowledge, and one would have thought they were a better body to do that than a department of the Board of Trade.

Finally, I would make one specific suggestion. This matter has been regarded in general practice as though there were no alternative between a purely ad hoc approach and general outlawry of a practice. If we believe that certain practices, like exclusive dealing and collective boycott and any practice in restraint of trade, are inherently undesirable, why should we not submit all those sorts of agreement and practice to the light of public opinion?

Would there not be great advantage in saying that there shall be deposited with the Monopolies Commission every agreement that has been made in restraint of trade and every restrictive practice? I would include restrictive practices among employees as well as among employers. That does not mean necessarily that those practices would be discountenanced, but that there would be a mass of material in the Monopolies Commission which would give an indication where the real problems lay, and that the light of publicity would play on those dark places.

I welcome the Bill. It is not the last word that can be said on the matter. When we get the report of the Monopolies Commission on the widespread practices which have been referred to them of exclusive dealing and collective boycott, we shall have to inquire what further steps are being taken. But it is a step towards harnessing once again, in the interests and in the service of British industry, one of the most powerful motive forces which the world knows, that is to say, the surge and force of the human spirit which seeks to advance its own fortunes.

2.10 p.m.

Mr. Percy Dailies (East Ham, North)

I have been fortunate enough to speak in practically every debate that we have had on this subject since 1945. One should try to be as fair and reasonable as one can on a subject so important as this. I do not like to pay too much credit to the Government, but if one allows for the difficulties of the President of the Board of Trade in the case of the match industry, which was a very sticky and tricky job, one has to admit that his rate of progress was not very dissimilar to the rate of progress which the Labour Government made when they tried to tackle this job.

I have heard most of the speeches which have been made in this debate and it was not until the hon. and learned Member for Middlesbrough, West (Mr. Simon) came on the scene that I heard the refreshing words "private enterprise." There seems to be a general assumption among all who have spoken this morning, except the hon. and learned Member, and perhaps I ought not to except the Liberal Chief Whip, that the days of private enterprise are practically finished and that what we have to consider is what we are to do about large-scale organisations of a semi-monopolistic character. I think that my hon. Friend the Member for Edmonton (Mr. Albu) is quite right when he calls attention to the dichotomy that sometimes shows itself on the other side of the House between small-scale private enterprise and large-scale operators of private business.

I am very dubious about the great virtues claimed for publicity in this matter. We have had an enormous amount of publicity upon it in the newspapers, but we have had very little real action. It is a question not so much of whether we can put the matter over to the people as how we can create amongst people at the receiving end some method by which they can express themselves and take effective action. The only form of organisation of which I know that does the job partially well, because it is also a business, is the Co-operative movement, with which I have distinctive associations.

I do not think that it is helpful either for hon. Members opposite to think that they meet the problems inherent in the subject matter of this Bill by throwing bricks at nationalisation. On the other hand, I do not think that it is particularly helpful for my hon. Friends to throw those bricks back at large-scale monopolies. A complete monopoly may be in practice to the social advantage and public interest. It all depends on how it operates. I suggest to the President that the solution to the match problem is certainly a simple one, though the President will not accept it. It is to place the industry under public ownership.

Ever since we nationalised industries there has been a perfectly absurd tendency in this House to confine attention to the problems of a specific industry to examination in a one day's debate in the House. We have, for instance, a one day's debate on the coal industry. All that happens is that the dispossessed coal owners on the other side of the House say how cleverly they would have dealt with the problems of the industry and how badly this side of the House have done the work, and then we on this side say that everything is quite all right. I do not think that we are being serious about these industries. The fundamental job during the period of the Labour Government was to change the ownership of the coal industry from privately-owned to publicly-owned. But we did it in such a way that we have set up an authority which, if we are not careful, will become so powerful that this House in the course of a few years will be unable to effect any control at all.

I believe that the effective voice of the consumer of the products of nationalised industries can only be expressed effectively through this House, and for that purpose I see no reason why the Ministers concerned and Members of this House should not sit together in a Standing Committee and get together to make the coal industry work in the most efficient way possible. Why should we not do the same with what remains of the transport industry? So long as these industries are only discussed on the Floor of the House it is inevitable that political prejudice will prevent our working properly on the problems of the industry. I am fortified in this view by the National Union of Mine-workers' conference this week. The conference was concerned not only about obtaining this or that advance but also about the difference between the cost of coal at the pithead and the cost to the customer.

I do not know whether a Minister concerned with one of the nationalised industries is a good or a bad Minister. We can only find out by Questions and answers and most of our proposed Questions cannot be put on the Floor of the House. In those circumstances, how can we tackle the Minister about what is to be done in the case of a nationalised industry? Are hon. Members opposite quite sure that they have the right machinery inside their own party? I am very pleased that "leaks" take place from their party meetings just as they do from ours. Judging by those "leaks" there has been a showdown in the party opposite and the Jolly Roger flag has been hauled down, so we cannot expect much progress there.

I submit seriously to the House that we should spend time in considering whether we could have a Standing Committee of hon. Members, sitting with the Minister, so that we can bring effective pressure to bear within nationalised industries. These matters should be above party differences. I do not share the illusion that we can afford to look upon the economy of this country as something to play with in a tinkering kind of way. The health of our economy should be a matter of vital concern to every hon. Member, and a matter on which we should act together.

We should do quite a lot of thinking about this problem. The President of the Board of Trade is intelligent enough to appreciate that this Bill will simply add to our information and no more. My hon. Friend the Member for Edmonton (Mr. Albu) is a Fabian, and I am quite certain that he loves Blue Books and wants a lot of information. I am not so much concerned about stacks and stacks of information as about positive action. I can see no intelligent reason why we should not now begin to square up to the question of having another Commission to enforce the recommendations of the fact-finding Commission. I believe that we made many mistakes in the original Bill, one of which was to give to the President of the Board of Trade, and only the President, power to make references to the Commission.

I repeat what I have said in previous debates. I believe that at the back of the present provision of a mere fact-finding Commission was some vested interest among the Minister's advisers. It would be far more helpful and sound if there were a second commission charged with the job of carrying out the recommendations of the first fact-finding Commission and also charged with nominating matters for investigation and correlating them.

The hon. Member for Darwen (Mr. Fletcher-Cooke), in a very able speech, referred to the question of priorities of treatment. I, too, am interested in that question. On what are those priorities based? Is it on the number of letters that the Minister receives, or the pressure on Members, or is it something like the pools system, where we stick a pin in and pull out the winner? We are entitled to know.

I notice that in America, to which reference has been made by a number of hon. Members, there is growing a very strong body of opinion among people who deal with this vast and complicated problem that we have to get away from the old idea that monopolies are wholly bad and must be condemned. I think the second factor which is emerging in American opinion is that it is not by legislation alone that this problem can be tackled. American opinion is now coming round to a much more enlightened view, namely what is known as countervailing pressure.

In other words, I think we should be much better occupied, or just as well occupied, in trying to fashion methods of organising consumer opinion informed either by some form of public propaganda, or by the consumers' council method or by the Co-operative movement, and in building up an effective and enlightened public opinion which not only knows the facts but can make itself effective. One of the biggest mistakes that we can make is to think that, first of all, by merely bringing out the facts we solve the problem, and that by legislative action alone we can solve the problem. Even after we have taken the legislative action and even after we have made our orders in this House, the old backstairs method and the grape vine begin to work, and the supplies do not come through. We ought now to consider the third method of tackling this evil thing by creating forms of consumer pressure and organisation.

2.23 p.m.

Mr. E. H. C. Leather (Somerset, North)

Two particular points have arisen and have been prevalent throughout the whole of this debate which, I think I can say, are not lost on the President of the Board of Trade. First, unless I completely misunderstood, there has not been a single voice raised on either side of the House in defence of restrictive practices in industry. We seem to be unanimous that we are against them and that we hope vigorous action will be taken——

Captain J. A. L. Duncan (South Angus)

No.

Mr. Leather

My hon. and gallant Friend says "No," but I am only saying that that would so far appear to be the fact from listening to this debate.

The second point is that most of the speeches which have been made have been concerned not with what is in the Bill but with what is not in the Bill. Those are two precedents which I, for one, do not intend to break. I shall say nothing in favour of any restrictive practices, and I am very concerned with what is not in the Bill.

Like every hon. Member who has spoken, I welcome this Bill so far as it goes, but, like most hon. Members, I would not be candid with the President of the Board of Trade if I did not confess publicly my grave disappointment at what is not in the Bill. I fully realise that my right hon. Friend has referred to the Commission under Section 15 of the Act. I still cannot understand why his predecessor the right hon. Member for Huyton (Mr. H. Wilson) never did. But, at any rate, that has now been done and I agree that we must await the report.

Mr. H. Wilson

The reason I did not do so is that I was pressed in Committee by the right hon. and learned Member for West Derby (Sir D. Maxwell Fyfe) to accept an Amendment which would preclude us from making any general reference under Section 15 until there had been a substantial number of reports from individual industries. I did not accept the Amendment, but I gave the assurance that we would await the receipt of a number of individual reports before we made a general reference under Section 15. It was to meet his requirements that no general reference of that kind was made.

Mr. Leather

I thank the right hon. Gentleman for his explanation. I can only say that I am sorry that on that occasion he gave way to the views of the Opposition, because I personally do not agree. At any rate, that has now been put right.

I hope that arising out of this larger Commission we shall not be given the argument in a year or two's time that we have got to give it a chance to run for another five years before we can take some definite action which most of us in this House want taken. That is my only fear about this Bill. We have had only five years' experience of the Commission, but we have had 50 or 60 years' experience of restrictive practices in industry.

There have been all kinds of committees and commissions investigating this matter for at least 60 years, and we cannot pretend that we do not know anything about it. We must have all the up-to-date facts relating to 50 different industries; I agree that it will be useful to have those facts, but it is not right to pretend that this is all quite new and strange and has not been considered before.

Therefore, I hope that when the Parliamentary Secretary replies to the debate he will give an assurance that it is intended to press on with the matter, not with a view to postponing but to bring nearer the day when we shall have a general debate so that this House can decide that certain definite practices are against the public interest of this country. I agree with my hon. Friend the Member for Clitheroe (Mr. Fort) that we want a flexible system. I do not dispute it for a moment, but I believe that the days of "ad hoc-ery" have gone on long enough, and I hope the Parliamentary Secretary can give an assurance that at least in the lifetime of this Government they will come to an end.

2.27 p.m.

Mr. Reader Harris (Heston and Isleworth)

This is a Bill in which I take some interest, although I do not greet it with all the enthusiasm that some people do. I am probably one of the few Members in this House who are being investigated by the Monopolies Commission. It is not a very terrifying experience. From what I have seen of them, I think they are doing a useful job of work, but there are one or two questions that I should like to ask the President of the Board of Trade.

Before we start extending the activities or the scope of the Monopolies Commission it is worth asking whether or not, from the experience that we already have, the Monopolies Commission have, as a result of their activities, succeeded in bringing down the prices of any goods charged to consumers. Have there been any practical results from what has taken place? They have the job of seeing whether anything is against the public interest. I am sure that it will be a good thing if one day somebody lays down what the public interest is. There are very varying views on what is the public interest. Is it in the public interest that there should be competition in all these industries which have so far been investigated, and in others, or is it in the public interest that there should be a restriction on competition?

Sidney and Beatrice Webb, those pioneer Socialists, 50 years ago devoted one-third of their great work to examining the effects of unrestricted competition. I think I am right in saying that they came to the conclusion that unrestricted competition was a bad thing because, in fact, the pressure was always passed back to the weakest elements, who are always the workers, and therefore if the smaller organisations and employers suffered, inevitably the workers also suffered. I think I am also right in saying that they came to the conclusion that combination produced an element of stability in the market and, to use a customary phrase, it forced competition away from the socially destructive pressure on wages to economies in organisation and production.

It is most important that before we start extending the activities of this Commission we should know whether or not the results already achieved have led to any benefit to the consumers. Can the President of the Board tell us whether or not there has been a reduction, for instance, in the cost of electric lamps, rainwater goods and dental goods? If there has not, where are we going? What is the object of all this? Are we to have more and more committees, with more and more reports which simply lie on the Table? If no legislative action is taken, we may get agreements between the Government and the various industries concerned. There may be some widening in competition, and we may get more and more people entering particular trades, but is that in the public interest? Is it all worth while?

Mr. Daines

I have been following the hon. Member's argument very carefully. Will he tell the House whether he believes in private enterprise? He seems to have been inspired by Beatrice Webb, and he appears to be flatly against private enterprise. Does he believe in it?

Mr. Harris

I am sorry if I gave any indication that I was against private enterprise, because I am not. My argument is that private enterprise exists, whether we like it or not. If one is a Socialist, one can do one's best to destroy it by nationalisation, but it is there, and with the best will in the world we cannot make people compete if they do not want it. In saying that I am only quoting what the hon. Member for East Ham, North (Mr. Daines) said in June, 1951, in a debate on this subject. We cannot make private enterprise competitive by legislative action if it does not want to be competitive.

Mr. Daines

It is surely the hon. Member's job, as a representative of the Conservative party, at least to pretend that he believes in private enterprise, whereas I have never had to make that confession.

Mr. Harris

I believe in private enterprise, but it must be left to decide for itself to what lengths it can go. If private enterprise decides that it is a good thing that there should be certain restrictions on competition and enterprise, in most cases we shall find that it is to the advantage of the public as well as of the industry that there should be that restriction.

Mr. Shepherd

I hope my hon. Friend will make it clear that this extraordinary doctrine is one which he holds, personally, and is not something which most hon. Members on this side of the House would be prepared to accept.

Mr. Harris

It was not I who said that I was a representative of the Conservative Party; it was the hon. Member for East Ham, North who said that. I speak for myself in this House, as does every other Back Bencher. I am not sitting on the Front Bench.

I believe in private enterprise, and I believe that competition is a good thing, but there are restrictive practices in industry, some of which are good and some of which may be bad. We shall have an awful job to prove they are bad; we shall have an awful job to stop them, and it will be very difficult to convince me that by stopping them we shall always benefit the consumer. I am asking whether there has been any evidence that the action taken so far has been of benefit to the consumer. That is a reasonable question.

I am against those who say that we should start passing legislation which deals generally with certain aspects of trading practices and that we should, by legislation, prohibit a particular practice throughout the whole of industry. We cannot possibly do that. We must look at each case on its merits. Certain practices may be right in one industry and wrong in another. Other practices may be right in an industry at one time and wrong at another time. There may be a shortage of goods at one time and a surplus at another.

The right hon. Member for Huyton (Mr. H. Wilson) referred to the question of tyres, in which I am interested. I do not seek to defend the actions of the gentlemen from the British Motor Trade Association of Scotland, who resorted to fraud, but, as the right hon. Member mentioned tyres, I suppose he takes the view that it is wrong that there should be resale price maintenance in the tyre trade. I say that it is a good thing in that trade and in other trades, at the moment.

Mr. Daines

Restricted competition.

Mr. Harris

Yes. We do not want unrestricted competition in tyres, and no resale price maintenance agreements, because we may find that at some time tyres are scarce. Certain makes are scarce now. We may find that people are charging more for tyres.

Mr. H. Wilson

If they become scarce at any time, the Minister can control distribution by fair means, controlled by this House. The hon. Member has said that he naturally does not support the fraud that was committed, but is he seriously telling the House that he supports the system by which this garage proprietor was fined? Can he tell the House by what authority that fine was imposed, and how he defends it when there was no power to appeal to a court or to anyone else, when that fine was imposed by a price ring of this kind?

Mr. Harris

I promised that I should speak for only seven minutes. The whole tyre trade is now being investigated by the Monopolies Commission and these points will no doubt be brought out.

The right hon. Member for Huyton referred to the Star Chamber courts. He referred to a lot of slimy things, but I should not regard this as one of them. If a manufacturer sells some tyres to a, distributor, under a certain agreement that they shall be sold at a certain price, it is true that he can take that distributor to the courts if he undersells them, because that would be a breach of contract.

Mr. Daines

Why should not the matter go to the courts?

Mr. Harris

That takes a tremendous amount of time and involves a colossal amount of money. It would be very good for the lawyers. They want action which will be quick, effective and cheap.

Mr. Wilson

So did Hitler.

Mr. Harris

So did Stalin. The people who impose these fines are very often legal men—retired judges—and the whole thing is carried out with the utmost fairness. If it is not, no doubt the Monopolies Commission will say so when they report. They have been examining the question for a year, and within the next year they will probably produce their report, and everybody will be able to see for himself whether or not it is fair. Without it the price of motor-cars would have risen to a fantastic height during the last five years.

What a profound disappointment it will be to a lot of people if the nationalised industries are not to be included in this Bill. I do not know whether the Monopolies Commission is the right body to look into these nationalised industries, but there is no other organisation in existence which could usefully do so, and the Conservative Party gave a pledge that they would bring the nationalised industries under the purview of the Monopolies Commission. I hope that one day it may be possible to do so.

The right hon. Member for Huyton talked about industries which fleeced the consumer. If he could see the mail which I receive from my constituents he would realise how many of them think that they are being fleeced by the nationalised industries. It may be that they are wrong, but the Monopolies Commission could look into the question and give us the facts.

The right hon. Member for Huyton also talked about the slimy things which could be found when one turned over stones. We might well turn over some slate in the National Coal Board and find some slimy things. The hon. Member for Edmonton (Mr. Albu) said that the nationalised industries make reports every year, and that we know everything that goes on in them, but that does not follow. They put into their reports only the things they want to be known. We want to know the things which they do not put in, and only some independent inquiry can search into that point. I hope that some day it may be possible to include nationalised industries in a Monopolies and Restrictive Practices Bill, and that at an earlier date steps can be taken to define what is in the public interest and what is not.

2.39 p.m.

Mrs. Harriet Slater (Stoke-on-Trent, North)

It was refreshing to hear the hon. Member for Heston and Isleworth (Mr. R. Harris) trying to defend himself as not belonging to the Conservative Party and not speaking on their behalf. It would be more refreshing if the same hon. Member made that kind of speech when he went before the electors and let them know for which party he speaks.

There are two points I want to make in connection with this matter. First, while we welcome some of the proposals which are in the Bill, we are all very emphatic that it does not go far enough. The hon. Member for Heston and Isle-worth wanted private enterprise to be left to decide for itself on the amount of restriction it could impose. Surely the purpose of the Monopolies Commission is to determine how far those restrictive practices have been destructive and how far they have affected the consumer. We suggest that the Bill should go further by making some proposals about how far action can and will be taken in dealing with the matters raised in the Commission's various Reports.

Mention has been made of the Cooperative movement. When matters of resale price maintenance were being discussed, many Co-operative societies were afraid to give the full evidence of the effect of resale price maintenance because they knew that if they did they would be stopped from selling in the Cooperative shops the commodities which they needed. That in itself was evidence that even Co-operative societies were afraid of the destructive effect of resale price maintenance and of the power of the monopolies in that respect.

The hon. Member for Heston and Isle-worth also wanted to know whether, as a result of any of the Reports, there had been a reduction in the price of the commodities dealt with. If he had to buy some of the commodities, such as electric lamps, he would find that no action had been taken. The Reports have been made but the same sort of thing continues. Every one of the Reports submitted has proved without any doubt that the consumer is held to ransom by the power of these large monopolies.

This House should have some concern for the protection not only of the people who are concerned with the monopolies but also of the ordinary consumer who has to buy goods from the monopolies. While the Bill extends powers to speed up the inquiries which can be made, surely the Monopolies Commission should not be merely a fact-finding body, as the President of the Board of Trade suggested. We do not want simply to build up that side of the work. We also want to carry it to its logical conclusion and to take action so that we can deal with the evil effects which are reported by people, thus safeguarding those in whose long-term interests the Commission has been set up and who, the Commission reports, are being affected by the malpractices of various monopolies.

2.43 p.m.

Mr. William Shepherd (Cheadle)

A good deal of the time of the House has been occupied with what is not in the Bill, but I propose to deal briefly with one or two things which are in the Bill. First, may I refer to one or two points which have been raised during the debate? I do not for one moment accept the view of my hon. Friend the Member for Heston and Isleworth (Mr. R. Harris) that it is the right of private enterprise, behind closed doors, to agree upon any form of restriction of trade.

I agree profoundly that the public interest is not necessarily served by unrestricted competition—and that is no new doctrine, for, in the last century, the Supreme Court of America, in one of its judgments, gave what to my mind is the classical expose of this principle. It is perfectly true that the public interest is not necessarily served by unrestricted competition, but it is certainly my view, and I think that of my right hon. and hon. Friends, that it is not for private enterprise itself to determine how far restriction is consistent with the public interest.

The hon. Member for Deptford (Sir L. Plummer), who sat on the Select Committee which considered the question of the Monopolies Commission, suggested that the Commission should use counsel. I am opposed to that in principle because, as I believe the hon. Member will realise on reflection, the Commission hear counsel only when they have made a tentative finding of the public interest. They have then already made up their minds, and it would not be fitting or proper at that stage to call on counsel on their behalf to make any statements at all. The use of counsel in those circumstances could not be commended. The hon. Member also dealt with a subject which I pursued with some vigour in that Committee—the question of supervising the carrying out of the recommendations and the apparent absence of a proper mechanism for that purpose. I hope that the Parliamentary Secretary will be able to tell us something about that when he replies.

May I refer to some of the provisions of the Bill? There are two main provisions—to make the job of the chairman and deputy-chairman pensionable, and to increase the Commission to a maximum of 25 and enable them to work in groups, with a minimum of five. My first reflection is that they are certainly complementary proposals. I am very surprised that no one has commented on the effects of the Government's proposals. The first effect will be that we shall need to have a superman as chairman. Secondly, there are inherent dangers in allowing the Commission to be divided into groups as small as this in a task so difficult as that of deciding the public interest.

It is true that we want to speed up the inquiries, but over a large part of the work the Bill will not speed up any individual inquiry. The time occupied in the preliminary work, in putting the case and finding out what is required to be known, in waiting for submissions from the industry on facts and figures and in investigating those facts and figures, will remain the same under the Bill as hitherto. All we may be able to do is to produce more reports in a given period of time, but we shall not very substantially increase the speed with which the reports are produced.

It is true that panels already exist. One of my hon. Friends, who is a lawyer, said there should be panels which dealt with finding facts and another part of the Commission to deal with the assessment of the facts. That is precisely what is happening now. Panels find out the facts and come to a tentative conclusion about the public interest, and the matter is then discussed by the whole Commission. That, I find, is a satisfactory arrangement, but I am not so happy—and I wish to impress this upon the House—now that a body of five, or perhaps more, is to be called upon to pronounce upon the very important aspect of the public interest.

To my mind it is a weakness in the Bill that so few persons are to be called upon to perform this duty. As my hon. Friend the Member for Darwen (Mr. Fletcher-Cooke) said, it is one of the most difficult tasks confronting anybody in this country and it imposes a responsibility perhaps even greater than that of a High Court judge. Here we are proposing to delegate this responsibility to a relatively small number of people.

Sir I. Orr-Ewing

My hon. Friend is surely aware that this House has always the power and the right and, indeed, the duty to correct what it considers to be a wrong ruling as regards the public interest? The final answer does not reside, and will not under the Bill, either in the chairman of the panel or the panel as a whole, any more than it does now in the Chairman of the Commission.

Mr. Shepherd

It would be quite useless having a Monopolies Commission whose reports were constantly over-ruled by this House. Unless we have a Commission of such responsibility that they can command the assent of this House, in general, not in every detail, quite clearly the Commission cannot continue to exist.

I feel that there is, in the circumstances of having so small a number, a real danger of there being difficulty. Moreover, there is a danger of differences of opinion. If there are 10 or 12 people discussing something and two or three take a different view from the rest there is a fairly considerable majority, but what if there are two or three in a small panel? There will be great difficulty in arriving at some sort of agreed conclusion. Therefore, I suggest that we need to look carefully at this proposal to have a minimum of five, and that in Committee it would be a good thing if that minimum could be raised to a higher figure. The chairman will have an immensely difficult task. Those unco-ordinated bodies, relatively small ones, charged, as they are, with determining the public interest, will have only one link with the Commission, and that will be the chairman, and he will need to be a man of great power, influence and capacity if he is faithfully and efficiently to carry out his duty.

My right hon. Friend paid a tribute to the present Chairman, and I think I can join with him in that tribute. I think that on the whole the present Chairman has not been regarded as highly as he should have been. He was faced with the very difficult job of starting something from scratch with scarcely any signposts to guide him at all, and I think that the work of the Chairman and of the Commission has been of the most praiseworthy character. I do not share the view of some hon. Gentleman that these reports have been far too long in coming out. I think there has been far too much impatience about this. When one realises that the United States has had this legislation for nearly half a century and are where they are today one cannot regard as entirely unsatisfactory the progress which we have made in what is a relatively short space of time.

Hon. Gentlemen on both sides of the House have tended to be too impatient over the question of these investigations. What we have done is to establish a position in which the Commission's reports are accepted not only by the public and Parliament but by industry itself. There is no one case that I know of in which industry has not regarded the report as being accurate, careful and painstaking, and that, of course, is the main test of the Commission's work.

The right hon. Member for Huyton (Mr. H. Wilson) has excused himself from the charge of not making an earlier reference under Section 15, but if he thought it was really in the public interest he ought to have done it. I have no doubt he could justify himself. He has justified himself in more difficult circumstances than that. I really think that to come to the House to increase the size of the Commission at this time is to choose the wrong time. There would have been, I should have thought, a case for increasing the Commission two years ago, or there would have been a case, perhaps, for waiting until the reference under Section 15 was completed, because most of the malpractices, if I may call them such, in British industry arise not from the existence of large companies controlling a third or more of production but from the existence of trade associations and trade agreements.

If we have a reference under Section 15 we may find—I am not prophesying—that we are extending the position at the present time beyond what it may need to be when Section 15 and the subsequent legislation become operative. Certainly I should say that it would have been much better if this Section 15 reference had been made some years earlier—one or two years earlier.

I would refer to the question of State monopolies. My hon. Friend the Member for Darwen said State monopolies ought to be dealt with under this Bill. I feel that that is not a practicable proposition.

Mr. Fletcher-Cooke

I said not by this Bill but by a subsequent Bill.

Mr. Shepherd

I am sorry if I misunderstood my hon. Friend, but I thought he said that certain aspects of the State monopolies, such as the giving of preferential rates to a particular industry, should be dealt with by the Monopolies Commission. I think that my right hon. Friend has been perfectly right in taking the view that, as the monopolies certainly exist by statute and have been pronounced, whether rightly or wrongly, by this House as being in the public interest, it would not be fitting to put into this Bill any provision to deal with them.

I must conclude to allow time for the spokesman for the Opposition Front Bench, but I should like to make some reference to monopoly practices in general. It ought to be said that monopolists in this country are by no means the wicked men that they have appeared to be in the word pictures drawn by Labour candidates on the hustings. If one were to read some of those speeches and then read the Reports of the Commission what a contrast there would be. It ought to be said of British industry that while there are practices which we regard generally as being harmful there is no desire—and there has not been shown to be in the Commission's Reports—on the part of industry generally to exploit the consumer.

The Commission themselves, while decrying many of the practices and recommending that they should cease, have, nevertheless, spoken highly of the probity of the industries concerned, and that is a very important factor. It is true to say that big business in this country has not had a flagrant disregard for the public interest, that big business in this country on the whole serves the public interest well, and has a conscience about these issues which is probably as good as or better than that of any in any other country.

When I read in the "Manchester Guardian" some time ago an article by an American professor saying how hopelessly inadequate was our anti-monopoly legislation, I could not help but reflect that there was a difference between the approach of business in this country and the approach in the country from which that professor comes. If there is a body of employers and industrialists who are anxious to do what they know to be right, the monopoly can be dealt with in a much less exacting manner than where there is a body of men who are determined at all costs to try to get a small advantage for themselves in conflict with the public interest.

Big business has no friends in this country. Even a Conservative selection panel turns up its nose at a representative of big business. It ought to be said here, however, that by and large those who have carried out these restrictions of trade have done so with no desire to harm the public interest. They have, as my right hon. Friend the President of the Board of Trade said, carried on some of these ridiculous practices not realising that they are deriving no real benefit from them. Many of them have built up their belief in these practices because of wartime and post-war conditions, whereas many of the restrictive practices, especially where smaller industries are concerned, would go to the wall tomorrow if people found that they could not sell their goods.

I am pleased that my right hon. Friend has introduced this Measure, although I have seen fit to criticise one or two of its features. I am satisfied that it will do something to speed up the present arrangements and the reaching of the stage where industry knows what is to be regarded as right and proper and what is outlawed. When we have reached that position. I am quite satisfied that industry will play its part and that there will not be as much need for us to have as many debates on monopolies as we have had in the last seven years.

3.2 p.m.

Mr. A. G. Bottomley (Rochester and Chatham)

The President of the Board of Trade came along this morning expecting an atmosphere of calm, and I imagine that his speech was couched in terms to secure that objective. There have, however, been one or two stormy passages, particularly from one of his hon. Friends, and I imagine that inside the Cabinet there has been a struggle to get the Bill before the House today.

I should like to claim, on behalf of the Labour Party, that we, by our constant criticism and pressure upon the President of the Board of Trade, have encouraged the Bill to be presented. After all, the Bill was suggested in the Tory Party Election manifesto and it was considered so important that it was introduced in the Gracious Speech in 1951, but we have had to wait until today for its presentation for Second Reading.

As far as we on this side are concerned, as my right hon. Friend the Member for Huyton (Mr. H. Wilson) has said, we had been considering the strengthening of the Act. Statements were made in the House on two occasions and in our Election manifesto an indication was given that we were going much wider than the Bill goes today. Therefore, although we welcome the Bill and will give it our blessing, it falls far short of what we think necessary to meet the position today.

Lieut.-Colonel Marcus Lipton (Brixton)

It also falls short of what the Conservatives promised.

Mr. Bottomley

The popular conception of a monopoly, I suppose, is of one giant firm dominating an industry. I am at one with some of the comments that have been made that some monopolies are good things; not all are bad in themselves. I take the view that a nationalised industry is a good thing and that other forms of public ownership are desirable. I think, also, that other forms of organisation and trade association which try to get standardisation or to build up the quality of commodities are something that is to be desired.

What has been done, however—I was surprised that the hon. Member for Orkney and Shetland (Mr. Grimond) introduced it again today—is to try to use the term "monopoly" in such a way that it applies not to those giant undertakings who, in my judgment, are not working in the best interests of the public—for example, a monopoly which is organised and set up by private individuals for their own benefit—but to other bodies as well. The Conservative Party always try to cloud the picture by speaking of the nationalised industries and the trade unions, as undesirable monopolies. We have heard a great deal today from both sides of the House about these subjects. I regret that it was a Liberal Member on this side who should have done that today, although I accept at once his statement that it was done not with evil intent but with the best end in view. The Select Committee will be looking into the position of the nationalised industries, and we shall have to examine the matter when we have their report.

In the case of a nationalised industry as opposed to private enterprise, we are entitled to say that the nationalised industry is set up by Parliament with direction and instruction and with powers of direction and instruction. There is public accountability and their annual report, submitted to Parliament, can be debated. I agree that this position might need strengthening, but that, also, is a matter for the Select Committee to consider. In addition, there are the consumer councils. There is, therefore, a fundamental difference between public ownership and selfish private enterprise.

As far as the trade unions are concerned, we all deplore some of the restrictive practices that are carried on. We are, however, entitled to ask whether a bigger investigation is not wanted. The control of industry is autocratic, and so long as it remains autocratic it is necessary for trade unions to protect their right to have some kind of restrictive practice. But if it could be shown—I think public ownership can do this—that a worker is dependent for his own comfort and standard of living upon the efficiency of the commercial enterprise or undertaking, the unions would be only too willing to accept their share of national responsibility in removing those things which, perhaps, are not enabling us to produce as much as we ought to be producing.

I quote from the Sunday "Observer," which, rightly, said on one occasion that unless the worker is given, as a generally accepted right, the status of a responsible partner in economic life he cannot be expected to behave responsibly in industrial affairs. It would be wrong in any way to link the nationalised industries and the trade unions with this monopoly investigation, using the word "monopoly" in the sense I have used it already as relating to private persons who organise for their own selfish profit.

Reference has been made to the six or seven reports and there are five other industries to be investigated, which I will not debate further now. I think that by far the most important industry which has been investigated, and upon which a report has been issued, is that concerning the match industry. The popular Press saw the importance of that matter and there was much publicity in headlines such as, "Strike a light" and "The burning question."

The reason why that industry and the investigation is of special importance is because, unlike other industries, it concerns an industrial combine and not only a combine in this country, but one with international obligations. We know that parts of the investigation had to be suppressed because of the national interest. My right hon. Friend the Member for Huyton (Mr. H. Wilson) took no exception to that as there are times when that is necessary. All hon. Members readily acquiesce in a situation of that kind.

There was one part that the Commission had no opportunity of considering and which did not appear in the Report because of the international obligations. The Swedish Match Company refused to disclose information and were within their legal rights in doing so. We should be the last to criticise that because not long ago, when the United States wanted to find out something about our oil companies, with justifiable patriotism we all said, "No, why should we give them the information?" Nevertheless, not only politicians but serious statesmen and scholars believe that monopolies and cartels of this kind can be a threat to political democracy. They can wage political warfare, exert economic pressure and have a power and influence far beyond what we as responsible Parliamentarians would wish any organisation or individual to have.

There are many views as to how this problem can be tackled. Some say that we should have an international Sherman Act which would abolish all forms of monopolies and cartels. There are others who take the view that there should be international public agencies working on principles agreed upon by the Governments of the countries concerned. Others argue for public regulation of cartels and monopolies, which, I suppose, we are trying to effect by this Bill. But, if we take the case of the British Match Company, it is not the fact that it is a monopoly or has a position of dominance which in itself is bad but the fact that the power they have is maintained, and perhaps used, for wrong reasons.

The Report itself shows that this company operates and is likely to operate against the public interest. My hon. Friend the Member for East Ham, North (Mr. Daines) was right when he said that the Government should acquire a sizeable holding in this industry in order to safeguard the public interest. So in the case of this industry, we may have to go much further than the Bill would permit.

The other Reports have been good in themselves. The President of the Board of Trade said that Parliament had approved one or two suggestions which (had been passed on. But the only piece of legislation arising out of the Reports is that dealing with the supply of dental goods: exclusive dealing and collective boycotting are unlawful in the dental goods trade if arrangements are likely to restrict entry into the trade or are used to enforce resale prices. It is a sad reflection on the Government that more rigid action has not been taken when the Commission, after a careful and impartial investigation, have shown that a good deal more might be done. I agree that it is desirable if some things can be done by peaceful cooperation, and I have the assurance of the President that this has been achieved with some industries. In the case of the match industry, however, unless something much more drastic is done this Bill will be out of date before it receives the Royal Assent.

I agree that it will speed up the work of the Commission in the sense that facilities will be provided to enable the machinery to work faster and not that inquiries will be rushed. We on this side of the House fail to see anything which suggests the indication in the Conservative Election Manifesto that the party opposite proposed to have a great "trust-busting" exercise. If this is it the Government have once again hopelessly failed to keep the promise they made to the public. The truth is they have no intention of doing anything further than complying with Parliamentary pressure from hon. Members on this side of the House and a large section of influential public opinion.

The President of the Board of Trade and the Chancellor have been the leaders of the Tory reform movement, but they are fast becoming prisoners of the more reactionary element in their party. Were it otherwise this Bill would be better than it is. I would make it plain, however, that in criticising the Government I am not criticising the Commission. They and their officials have done an excellent job and are to be congratulated on their efforts. The Government promised there would be a reduction in the number of public servants. That, I am glad to say, is another promise they are breaking, because they propose to increase the number by recruiting further members to this Commission and their organisations.

We on this side of the House are disappointed in the Bill, as we knew we should be. The public will also be disappointed when they realise that the party opposite, with their slogan "Set the people free" are still determined that monopolies, cartels and private interests, although they are to be investigated, are to be investigated only in the most limited fashion; and only following pressure from hon. Members on this side of the House and the public. This Bill does not go so far as we would desire, but to the extent that it meets our wishes we extend to it our support.

3.15 p.m.

The Parliamentary Secretary to the Board of Trade (Mr. Henry Strauss)

On the whole, this Bill has had a friendly welcome from both sides of the House and I think that it will get a unanimous Second Reading. The right hon. Gentleman the Member for Rochester and Chatham (Mr. Bottomley) tempts me by his venture into party politics at the end of his speech, but perhaps I can confine myself to the remark that as experts on public opinion I do not think that the Opposition have a very good claim to be good judges.

The right hon. Gentleman the Member for Huyton (Mr. H. Wilson), who explained that he would be unable to wait for the concluding speech, for reasons which we all understand, asked a number of questions with which, in courtesy, I think I should deal. I wish to deal with matters raised by many hon. Members and perhaps the House as a whole will excuse me if I deal with some of them as may be convenient and not in relation to a particular hon. Member's speech.

The right hon. Gentleman mentioned that in only one case after a Report of the Monopolies Commission has there been an Order. That is true, but that does not mean that the enforcement action in the other cases has been ineffective. I think that the action of the right hon. Gentleman the Member for Middlesbrough, East (Mr. Marquand), when he was Minister of Health, may have been the right action to take in that case; but he and everyone else will agree that there is no magic about an Order. Suppose the Government Department concerned with a certain industry can achieve by agreement the same object as would be affected by an Order, such agreement is every bit as good. The idea that there is any special merit in an Order is an illusion.

Nor, if we make an Order, does that necessarily remove the difficulties. One of the difficulties in completely solving a question may survive whether we proceed by agreement or by Order. It is very difficult to enforce an action where a breach cannot be proved—for instance, to enforce a supply when one cannot prove that a refusal of supply is due to an agreement. There is no special merit in an Order as contrasted with an agreement.

The right hon. Gentleman then asked whether there would be an increase in staff. Undoubtedly there will be. The Memorandum shows that as the Commission increases in numbers no doubt there will have to be some increase in staff. I suggest that hon. Members should dismiss from their minds the idea that there is something good in itself in a large staff. The right hon. Gentleman the Member for Rochester and Chatham said that in this case we were increasing staff, but the Board of Trade as a whole have diminished their staff by about 10 per cent.

The right hon. Member for Huyton and others talked about the case by case approach being somewhat out of date and said that what was really needed was a statute making certain practices wholly illegal. They implied that had the Opposition formed the Government we should have had such legislation and resale price maintenance would have been wholly barred. I wonder. Let me give some reasons for my doubts.

When I wound up a debate on 23rd July, 1952, I dealt with a sequel to the publication of a White Paper by the party opposite; I asked if they were going to legislate on this subject. I called the attention of the House to the National Book Agreement described by the "Economist" as the sheet anchor of the publishing trade and generally recognised as a desirable form of resale price maintenance. I was interrupted by the hon. Gentleman the Member for Gloucestershire, South (Mr. Crosland) who has made a considerable study of this subject, saying that, of course, the party opposite realised that there must be exceptions. But they have never told us What those exceptions are. Maybe the inquiry now proceeding under a reference under Section 15 may give some guidance on this subject.

One or two members of the Cooperative movement have been telling us how much stronger this Bill ought to be and that then the Commission would be a force to be reckoned with. Having listened to the remarks of the hon. Member for Hammersmith, South (Mr. W. T. Williams), I find it very difficult to see how he can justify himself in not voting against the Second Reading of this Measure today.

Mr. W. T. Williams

I only do so because half a loaf is better than no bread, and a quarter of a loaf is also better than none at all.

Mr. Strauss

That may well be, but what was it the hon. Member said? He said that this was a trivial, impotent, insignificant Bill which was worse than useless. If it is worse than useless it will require all the hon. Gentleman's sense of logic to tell us why he supports this Bill.

There are other doubts as to whether we should have this legislation from the party opposite. We have heard what the Co-operative Party have had to say about the subject, and now I ask, what has the T.U.C. to say about it? I have quoted before what the T.U.C. had to say about the proposals in the White Paper on the subject published by the party opposite. I will quote it again: 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"— that is, the Opposition's White Paper— might do more harm than good. So perhaps when they are considering the view of Co-operative Members they will also consider the view of the T.U.C.

The right hon. Gentleman also drew attention to a scandal which, he alleged, existed in connection with motor tyres. On that I propose to say nothing because that very topic is one of the things which has been referred to the Monopolies Commission and is now under investigation. I have no doubt that all the relevant matters, such as were mentioned by the right hon. Gentleman, can be considered by the Commission under the current reference.

My hon. Friend the Member for Weston-super-Mare (Sir I. Orr-Ewing) made an interesting speech. He was Chairman of the Select Committee whose Report we have read with great interest. One or two hon. Members opposite who served on that Committee have also made speeches. I should like to inform them that the Board of Trade have just submitted their replies to the proposals contained in that Report, and I think that the Committee would wish to study those replies.

My hon. Friend made one mistaken statement, which has also been made by others and I think it appears in the Report of the Committee. It is a mistake which I should at once like to correct. It is suggested that when once a possible reference or suggestion for a reference has been made in the annual report, the industry, so to speak, automatically becomes sub judice. It is a statutory requirement in the annual report to mention suggestions that have been made, but, of course, the matter does not begin to become sub judice until the reference has been made.

I invite the attention of my hon. Friend and others to the statement that we have repeatedly made in the annual report—hon. Members will find it in paragraph 25 of the last annual report—emphasising that the mere fact that an industry appears among the suggestions does not mean that the conditions which would bring it within the scope of the Act necessarily apply, or that a reference will necessarily be made. Therefore, I think that the real time with which we are concerned is not between the dates when it is first mentioned and when we get the Commission's Report, but between the time of the reference to the Commission and the receipt of the Report.

Sir I. Orr-Ewing

I think I was very careful to say, and I think it was in the minds of the Committee when they reported in the way they did, that though, in fact, the industry against which a complaint was made was not sub judice, yet in the public mind that was the position. Though it may be repeated in the annual report, that still remains the opinion outside.

Mr. Strauss

I am much obliged to my hon. Friend, but I think that on both sides we must do our best to disabuse the public of that idea, because it is wholly wrong.

Though by this Measure, when it becomes an Act. we hope to increase the number of reports which we get each year, it would be wrong to suggest that it will shorten the actual time between the making of the reference and the receipt of the report. There is nothing which necessarily will have, or should have, that result. Finally, before leaving my hon. Friend, I must thank him for adding his delightful "overriding bottleneck" to my celebrated collection of bottlenecks. Hitherto, my favourites were the "drastic bottleneck," the "vicious circle of interdependent bottlenecks," and, perhaps the best of the whole collection, the "worldwide bottleneck."

I now come to the interesting speech of the hon. Member for Deptford (Sir L. Plummer), who also served on the Committee. He dealt with the question of enforcement, as did other hon. Members. Let me say at once that the functions of the Commission and of Government Departments in follow-up action or in enforcement action should be kept quite distinct. It is perfectly true that under Section 12 of the Act the Board of Trade can, if necessary, get the help of the Commission as regards the observance of the agreement which may have been reached, but the normal people to watch whether the enforcement action is effective or whether anything more is needed are not necessarily the Board of Trade, but the competent authority, that is the Government Department, concerned with the particular industry.

An extremely interesting and informed speech—I think this is the view of the whole House—was made by my hon. Friend the Member for Darwen (Mr. Fletcher-Cooke), who has made a great study of this subject. He asked me whether I could give any indication of the method of selection of subjects to be referred to the Commission. The shortest and most accurate answer I can give is to refer my hon. Friend to the paragraph which begins at the end of page 34 of the Report of the Select Committee on Estimates. The passage is at the bottom of page 34 and at the top of page 35. One of the effects of the Bill will be that we shall be able to choose rather more subjects than we can at present.

I have dealt in my comments with the specific points raised by the hon. Member for Hammersmith, South, except that he mentioned international action. I can assure him that in international bodies Her Majesty's Government are not dragging their feet in this matter, but that private trade restrictions are so much bound up with many other matters, such as international trade agreements and tariffs, that it would not be possible for me to deal with the topic fully in this debate.

The hon. Member for Orkney and Shetland (Mr. Grimond) made a perfectly accurate observation, which has been made also in previous debates, about the inaccurate use of the word "monopoly" in much of the discussion. The difficulty is inevitable. The hon. Gentleman failed to pay sufficient attention to the reference under Section 15 of the existing Act made last December, and the value that that will be when we get the report.

Several hon. Members have called attention to the fact that the declarations of general principle in some of the American legislation have not led to the complete success which was once hoped for by their authors and that they have had very different consequences. Nothing has occurred which should alter the view on both sides of the House that our general empirical approach should not be abandoned, and is, indeed, the right approach. It came out originally in the Coalition White Paper on Employment Policy, which is the ultimate origin of all the legislation that we are now discussing.

My hon. and learned Friend the Member for Middlesbrough, West (Mr. Simon) made some of the very points on the distinction between enforcement and investigation which I have endeavoured to make. The hon. Member for East Ham, North (Mr. Daines) rather interestingly answered the hon. Member for Edmonton (Mr. Albu), who explained the immense value of publicity as regards the nationalised industries. The hon. Member for East Ham, North pointed out that publicity in itself was wholly insufficient.

My hon. Friend the Member for Somerset, North (Mr. Leather) who has taken a great, though not entirely conventional, interest in this subject was very eager that we should legislate at once on some of these practices. I think that, if legislation was called for, some of those who advocate legislation, of whom at the moment I am not one, would find that they were calling for it on some of those very practices which have already been mentioned in the Reports of the Commission and which have now been referred to the Commission for report under Section 15.

In fairness to the right hon. Member for Huyton, I should like to defend him against a charge to which he did not realise that he had a better defence than that which he made. It has been suggested by some that he might have made a reference under Section 15 much earlier. I do not think that that criticism would be fair, having regard to a proviso which will be found in Section 15 of the Act. By the proviso in Section 15 (1) it was necesary to wait until there had been a number of these Reports before making a reference.

Mr. Bottomley

That is what my right hon. Friend said.

Mr. Strauss

No, what he said was that he gave an undertaking to us across the Floor of the House but that it was not in the statute. Actually, it is in the statute.

I am not at all certain that I fully grasped the argument of my hon. Friend the Member for Heston and Isleworth (Mr. R. Harris), but, in one of the few passages which I felt fairly confident that I understood, he asked whether, in fact, there was any case in which a Report had been followed by a reduction of prices. The answer is that the 1951 Report on the working of the Monopolies and Restrictive Practices (Inquiry and Control) Act, 1948, stated that there had been a reduction in the prices of dental goods. Whether it was a case of post hoc or propter hoc is a matter of speculation, but the answer to his question is, apparently, "yes."

My hon. Friend the Member for Cheadle (Mr. Shepherd) called attention, quite rightly, to the very big step that we were taking in providing that the Commission should be able to sit in compartively small panels, even in panels as small as five. There undoubtedly are risks which we can all see, but I think that my hon. Friend may have overlooked a provision which we have put in the Bill which ensures that if enforcement action is to follow the report of a panel as small as five, not fewer than four must agree.

The right hon. Gentleman the Member for Rochester and Chatham (Mr. Bottomley), who wound up for the Opposition in so spirited a speech, mentioned in particular the match Report. I do not think that it would be appropriate for me to discuss that in any way today or to add to what my right hon. Friend said about the action of Her Majesty's Government. There have been one or two suggestions about what the right remedy would be in this difficult case, but no remedy suggested commended itself to any member of the Monopolies Commission and we have to bear that in mind.

I think I have dealt with the main points which have been put from both sides of the House. I commend this Bill, not as a major change in monopoly legislation, but as an improvement of the machine which, whatever may be the views of hon. Members on further legislation, must be common ground to all parties.

Question put, and agreed to.

Bill accordingly read a Second time.

Committed to a Committee of the whole House.—[Mr. R. Thompson.]

Committee upon Monday next.

c1668
1. MONOPOLIES AND RESTRICTIVE PRACTICES COMMISSION [MONEY]. 158 words