§ 3.38 p.m.
§ The President of the Board of Trade (Mr. Peter Thorneycroft)
I beg to move,That this House welcomes the Report of the Monopolies Commission on Collective Discrimination as a basis upon which Her Majesty's Government can formulate its proposals.I hope to state the intentions of the Government with sufficient precision to leave no doubt where we stand upon the main issues involved in this Report. I shall, at the same time, refer to a number of questions, some of which are touched on in the Report and others not, about which we should value the views of the House, and some of which clearly require further consideration.
I would say, first, that I think we ought all to be grateful to the Monopolies Commission for this Report. It is probably the most useful Report we have yet had. It contains a majority and a minority opinion, and I think it is none the worse for that. These are matters of some complexity upon which intelligent men may hold different opinions, and, as I shall show, there is value in both the majority and minority findings in this Report. Indeed, I shall comment and draw upon them both in the solutions which I shall put forward.
I shall also watch with interest and sympathy, as always, what the right hon. Gentleman the Member for Huyton (Mr. H. Wilson) has to say in support of the Opposition Amendment to this Motion. It seems to me that to argue exclusively in favour of the majority Report and, at the same time, to support the system of registration which it specifically turns down, will be a remarkable intellectual exercise. As I say, we shall await with interest the way in which the right hon. Gentleman discharges that difficult task.
Let me start by putting this Report in the proper context. It is the first Report of this kind. The Monopolies and Restrictive Practices (Inquiry and Control) Act was passed by the Socialist Government, but passed upon principles which, I think, were generally agreed in the House. That Act provided for a case by case approach, but also included, and, in my judgment, rightly included, a Section, Section 15, whereby, after experience 1938 had been gained, a general reference could be made either of a practice or a group of practices.
Let me say in defence of the Socialist Party that it was not altogether its fault that progress in this matter in the six years of the Labour Government was lamentably slow. The Labour Government passed the original Act; they referred about ten industries to the Commission; they took action on one only, the supply of dental goods. In a final flurry they published a White Paper condemning all forms of resale price maintenance. There, I think, they were batting rather erratically and on the wrong wicket. I shall have a little more to say about the White Paper on Resale Price Maintenance later. However, whatever the reasons were, I do not think anyone could say that the Socialist record in this business was an impressive one, or that the Socialist Government pressed these policies with anything like the vigour with which they sought to eliminate competition in many kinds of business and to substitute statutory monopoly.
In the last Parliament, we thought it right to accelerate the work of the Commission. We doubled its size. We enabled it to work in groups, and—important in the context of today's debate—under Section 15 we referred, two-and-a-half years ago, a group of practices for general examination. At that time, on 23rd July, 1952, in a debate, I said, when talking about the case by case studies:… the Commission has found a complex system of restrictive arrangements affecting distribution, and they all had a strong family resemblance."—[OFFICIAL REPORT, 23rd July, 1952; Vol. 504, c. 568.]It is this group of practices, found in a large number of industries, that we are discussing today.
The right hon. Gentleman has sometimes urged me—he urged me before the Election—to act in advance of a Report of this character. I think that that advice was wrong. I do not want to be pedantic, or to stick with absolute rigidity to the scope of this or any other Report, but I do believe that, in general, a Report of this kind is a prerequisite to any legislative action. These are complicated and controversial issues, and it is necessary to focus public opinion on them and to see what is the nature of the issues to be faced. I believe that it would be impossible to carry public support without some 1939 kind of an inquiry such as that which resulted in this Report. It was for this reason that we launched it two-and-a-half years ago, and it is for that reason that today we shall declare our policy upon it.
I come to the scope of the Report. Some critics say that it should have been much wider, but one cannot include everything in one Report, one cannot solve all the problems in one Blue Book. If we believed some of the comments we should have sought a solution at one blow to all the problems, from exclusive selling by the Chemists' Federation here in this country to level tendering for the Snowy Mountains project in Australia. If we had made references of that kind we should not have been having the debate we are today, and we should not have had it for a long time ahead. We must delimit the problem in some way.
This Report is not primarily concerned with either price maintenance or price rings as such, but with a network of discriminatory practices mainly used for the purpose of enforcing or pursuing these and other objectives. In view of the Amendment put down by the Liberal Party to the Motion, I would observe that I agree with what it says about price rings, and that I have already announced my intention to make a reference of that matter to the Commission.
I said that the Report is concerned with a network of discriminatory practices. Let me remind the House what these practices are. They are conveniently grouped in pages 11 to 13 of the Report, and they fall into six categories. The first category is that practice whereby a seller agrees to sell exclusively to an approved list of buyers. Agreements relating to chemists' goods and spare parts for typewriters fall into this category. Category V is the reverse. It is the counterpart for buyers of Category I for sellers. It consists of agreements to buy exclusively from a favoured list of sellers. There are wholesalers who agree to put on a stop list manufacturers whom they consider to conduct their business in a manner prejudicial to the wholesalers. To take another perhaps controversial but topical example, suppose local authorities combined to put on a stop list constructional steel contractors who engaged in the practice of level tendering. It might be right, but it would fall into this category.
1940 Category II is a combination of Categories I and V, whereby a group of buyers and a group of sellers agree to discriminate in favour of each other. This is what is known commonly as exclusive dealing in the full sense—in radio valves and motor cycles. Many examples could be found.
Next there are two categories, Categories III and IV, and both of them relate to resale price maintenance. Category III consists of an agreement to adopt a common policy of fixing resale price conditions to goods—not necessarily common prices, but a common policy that the goods should be price maintained. Category IV is the instance in which the parties are free to decide whether to fix prices or not, but agree that when they are fixed they will collectively enforce them. Category III is concerned, therefore, with policy and not with enforcement, and Category IV with enforcement but not with policy.
Lastly, there is Category VI, which is the aggregated rebates. They are simply a rather sophisticated form of preferential rebates to encourage exclusive dealing.
That then is the field, and I should like to start by saying one or two things about it. First of all, do not let us work ourselves up into too great a state of moral indignation about restrictive practices of this character. A closed shop in the coal mines, strict rules demarcating labour, as in the building industry or in the film industry, may be socially or economically sound or unsound, wise or unwise. But there is nothing whatever in those practices themselves which is either criminal or even morally repulsive, and it is the same in this case. Agreements to sell motor cars only to garages which have trained mechanics and agreements by newspapers to fix the distances between the vendors who sell their papers, may be good, bad or indifferent from the economic point of view, but no one can say that they are a sin.
My second general point is that there is a good deal of common ground between the majority and minority Reports. Both agree that some of these practices, at any rate, may operate against the public interest while some of them can probably be justified in certain cases. Both Reports agree, though they differ quite markedly as to the method, that a sensible 1941 method must be found for sifting those which are tolerable from those which are not.
Before I state the Government's approach to this problem, I should like to examine the two approaches which are contained in the Reports. I count myself very fortunate to have them both. They help us in our consideration of the matter and I thank those who wrote them with such care and such moderation. I know that they will forgive me if I make some comments on both the majority and the minority Reports.
I take, first, the minority Report. The minority favour registration of these practices, followed by a continuation of the same case-by-case approach which we are pursuing at present under existing procedure. I say at once that I think registration has a part, and I believe an important part, to play in any solution of this problem, but I do not really believe that registration and no more is an adequate solution. It casts the President of the Board of Trade, or some other authority, in the role of a kind of recording angel. He notes what is happening. He writes it down and shows it to the world but otherwise, without further guidance or change of emphasis, the existing machinery goes forward.
I believe that it was the hope of all of us that publication of the Section 15 Report, in the interests of industry itself, would enable us to give a rather more precise guidance on some, at least, of the complex issues which confront us. Therefore, my comment on the minority Report is that it is all right as far as it goes but, in my judgment, it does not go anything like far enough.
I come now to the majority Report. It is, of course, much easier to criticise any of these proposals than to put forward one's own, and I propose to put forward my own in a few moments. My first criticism of the majority Report is perhaps psychological. It may exist perhaps more in the phrasing than in the intent, but I detect an odour of criminality in certain paragraphs—the creation of a new range of criminal offences. I hope that the House will not think that I am making too fine a point, but let us remember what we are considering. I believe that we can get through the tangled arguments about these economic and commercial problems with rather less 1942 emphasis on the criminal code. I believe that we can find other ways of doing it.
My second comment is on a point of substance. There seems to me in the majority Report an absence of a solution—perhaps it was outside the terms of reference to find a complete one—to the question of individual resale price maintenance, part of Category IV. I want to deal with that separately. I am not going to debate the subject of resale price maintenance this afternoon, but the various Reports published on the subject and the various things said about it leave us on both sides of the House in a considerable dilemma.
The fixing by manufacturers of the retail price of their goods has been examined on three separate occasions over the last thirty years, by the Committee on Fixed Retail Prices in 1920, by the Greene Committee in 1930, and by the Lloyd Jacob Committee in 1948, and individual price maintenance has never been condemned by any of these Reports. Manufacturers, distributors, consumers, and the trade union movement, all gave evidence that they believed it to be in the public interest. The women's organisations—the National Council of Women, the National Federation of Women's Institutes, and the Women's Co-operative Guild—all gave evidence to the Lloyd Jacob Committee that, in their judgment, fixed retail prices afforded them certain marked advantages. Any Government faced with that evidence would or should hesitate before rejecting it, and I certainly do not propose to reject it in the context of this debate.
Here, then, is the dilemma which faces us—a powerful body of support, including consumers, in favour of the individual fixing of retail prices while, at the same time, for many of the goods the only effective method of enforcement is the collective arrangements which have been condemned by a six-to-four majority of the Monopolies Commission and by the Lloyd Jacob Report. In fairness to both the majority Report and to the Lloyd Jacob Report I should like to say that I do not believe that those who were responsible for either felt that they had given a final answer to the problem posed by that dilemma, but it is certainly for us to seek to resolve it.
The answer given by the right hon. Member for Huyton was given in the 1943 White Paper which I have already mentioned. His view was that individual resale price maintenance should be made illegal by statute over the whole field of trade and industry, subject to some undefined procedure for exceptions. Nothing was done about it. It was a view stated in a White Paper and it never proceeded to a Bill.
The view of the Trades Union Congress is embodied in the General Council's Report which was presented at the Annual Conference at Margate in September, 1952. That view, contrary to that of the right hon. Gentleman, was stated to be that… the individual manufacturer who wishes to prescribe retail prices for his products should retain the right to do so and should in the last resort be able to enforce these prices by taking price-cutters to the Courts.That is something which, of course, they cannot do in many cases today.
On this point, I much prefer the advice of the T.U.C. to the advice of the right hon. Member for Huyton. I believe that the sensible course is not to declare resale price maintenance to be illegal, nor to abolish it fortuitously by the removal of all existing methods of enforcement. I believe that the right course is to examine urgently whether some other method cannot be devised for maintaining prices individually fixed, taking price-cutters where necessary to the courts in the last resort—which is certainly less open to criticism than the network of practices to which the Report refers. I make these comments on the minority and majority Reports not in any critical sense but to demonstrate some of the wider issues with which this Report confronts us.
I now come to our own proposals on this matter. I think the simplest thing for me is to state quite shortly and categorically what we propose to do. We intend to take power by Act of Parliament to require the registration of those restrictive practices which we shall from time to time specify. On the one hand, we shall not limit ourselves to those referred to in the Report, nor, on the other hand, shall we require all restrictive practices to be registered together as appears to be envisaged in the Amendment by the party opposite, because all would be drowned in a sea of paper. We shall select the ones we want and in the order we want. That is the Swedish 1944 system which has, in fact, met with considerable success.
We shall include in the ones for early registration the ones referred to in this Report, but we would also think it appropriate to include at an early stage agreements fixing common prices. With regard to those practices referred to in the Report, once the registration authority has called forward for registration any particular class of agreement, if the firms wish to operate or to continue to operate an agreement in this class they must register. Then the tribunal, with the information that the register makes available, will call upon them by a given date to come forward and make out their case for employing that particular practice.
May I make this as clear as I can. There are two stages. First, there is registration, when all agreements of a specified class will be registered and any firm wishing to operate such an agreement will be able to do so only if that agreement has, in fact, been registered. The second stage is examination and judgment, when the tribunal will select agreements for examination and specify the date and place of hearing at which agreements will have to be justified if they are to continue.
There are, here, two crucial issues on which a great deal of the discussion between the minority and the majority plays. Where does the presumption lie and what guidance should be given to the tribunal? Let me deal with the question of presumption. These practices in one form or another are all practices in restraint of trade, and as such they are of their nature liable at any rate to operate against the public interest. The answer seems to me not to declare them crimes or fix an arbitrary date at which all practices must stop which will not be kept—as there must be some procedure for exceptions—but to place the onus of showing that they are in the public interest in a particular case fairly and squarely on the shoulders of the men who wish to use them. I may say, in passing, that this approach has been powerfully supported by two very able leaders in the "Financial Times."
The applicant will, therefore, argue his case in front of the tribunal. If it decides in favour of the applicant he can go on, subject, of course, to any conditions or 1945 modifications that may be laid down, but if it decides against him then the practice must stop. It seems to me that an arrangement of this kind has some advantages over the views of the majority Report. While it places the onus where it should lie it keeps control over the timing and direction of the advance firmly in one's own hand. The work can, in the first instance, be concentrated where it is most desired.
§ Mr. Harold Wilson (Huyton)
We are trying to follow the right hon. Gentleman's new proposals on this matter, but will he tell the House what would happen in a case where there may be 600 or 700 of these restrictive arrangements, registered under one particular heading? Suppose this tribunal could not get round to the 600 or 700 in a year or, indeed, perhaps in ten or twelve years, would the association maintaining one of those restrictive arrangements be permitted to carry on with these practices until, finally, the tribunal should get to them?
§ Mr. Thorneycroft
That dilemma would be confronting us in any case under the majority Report. It is perfectly plain that some method of exceptions would have to be allowed. It seems to me that it would be wiser to enable the tribunal to concentrate upon the range of practices which we really wish to consign to them and so provide that they may be available for registration and examination first of all.
I recognise that this is a vast field, and that many important technical and complex problems do arise, not all of which are likely to be solved in the course of one debate. One of them I have already stressed as crucial. It is the precise guidance to the tribunal. It is, clearly, right that it should not be left without any guidance at all, in the interests of industry as of the tribunal. At this stage, there seem to me to be two extremes. At the one end, there are the four cases referred to as exceptions by the majority, on page 84 of the Report. That may not be a comprehensive list, but it is one where the majority thinks that these agreements are probably likely to operate in the public interest.
At the other end, there are practices like Category III which the minority Report itself condemns. Some indication must be given that the onus to be discharged in getting a Category III agree- 1946 ment through would be a very heavy one indeed. It might be right, and I ask the right hon. Gentleman, in view of his interruption, to bear this point in mind, that the agreements in this category should be the first to be registered and certainly among the first to be examined.
Another problem is, what kind of tribunal? I should welcome the discussion in the House this afternoon on this particular problem. Should it be a judge or a Minister who makes the final decision? There are powerful arguments on both sides, and I think it is essentially a question upon which the view of the House of Commons will be extremely valuable. Should there be any right of appeal?
What repercussions will all this have on the existing Commission? Clearly, it will have some effect upon the nature and the scope of its work. How should the work of the new tribunal be fitted in to the work of the existing Commission? At any rate, I hope the right hon. Gentleman will now realise that it was perhaps a little unwise and premature to press for a large expansion of the existing Monopolies Commission before we had this Report, and we could see the nature of the developments which lie ahead and which might, in certain circumstances, mean a shifting of the emphasis of the work.
Next, we must consider what is to happen when the tribunal decides in favour of a practice continuing, because it is clear in certain circumstances that would happen. A great deal of public criticism has focussed on the manner in which these things are done as well as on their purpose. Take, for example, the private trade courts. I acknowledge, as I am sure we all do, the desire of those who have these organisations to be fair, but there is something rather repugnant, at any rate to many, in that system. Our judgment is that even if we get a ruling of the tribunal that a particular practice should continue, a fairly radical alteration of these arrangements ought to take place.
I do not suppose it will be right for anyone to suggest that we should answer all these questions this afternoon, but they are very proper questions for debate and discussion. This Report does not pretend to propound the final answer in this field, but I hope I have said enough 1947 to make plain where we stand on the main issues involved.
What I have said fits into the main pattern of our commercial policy. Let no one mistake what are the objects of that policy. We reject both the rigid control of foreign transactions and the maintenance of a large network of physical controls at home, as advocated by the party opposite. We regard with suspicion both statutory monopoly and the erection of private restrictions upon competition.
The conditions of the 1930s do not persist today. The prime need for industrialists in those years was different. It was to search desparately for some stability in the shifting sands of economic circumstances. [HON. MEMBERS: "Oh."] Those conditions do not exist today. The principal industrial problem of today is not how to contain defeat but how best to share in the advance. Today, change is our ally. You do not help change by rigid controls, imposed either by Government or by a network of industrial restrictions.
It is for these reasons that we have pursued the aims we have, to remove the obstacles to trade abroad, to rid ourselves of the network of manufacturing controls at home and to eradicate abuses in the field of monopoly or restriction. We are, and remain, the party of free enterprise and competition, in an age when both are needed to the full.
§ 4.12 p.m.
§ Mr. Harold Wilson (Huyton)
I beg to move, to leave out from "House" to the end of the Question, and to add instead thereof:endorses the conclusions of the majority Report of the Monopolies and Restrictive Practices Commission on Collective Discrimination, and calls upon the Government to introduce legislation at the earliest possible moment for the purpose of implementing those conclusions, and of ensuring the registration of all collective agreements which provide for minimum prices and the regulation of production and trade.I should like to congratulate the President of the Board of Trade on his ingenuity, if not on the solutions that he has put forward. [An HON. MEMBER: "And on the clichés."] We are very familiar with the right hon. Gentleman, and we have noticed that the less he has of policy the more he works himself into 1948 a passion. It was after a debate about a year ago that the "Manchester Guardian" said of the right hon. Gentleman:Having nothing to say, he spun a cocoon of platitudes around the subject.… He will not go far as a Minister unless he can say nothing and make it appear like a revelation.I must congratulate the right hon. Gentleman on making some advance in that direction this afternoon.
He decisively and firmly rejected the Report of the Monopolies Commission. [Interruption.] That was the most important thing that the right hon. Gentleman rejected. The few Government supporters opposite who have read that Report should read again the recommendations of the majority of the Commission. They will see that those recommendations have been rejected by the President of the Board of Trade. There have been very many occasions when the right hon. Gentleman has failed to measure up to a great opportunity affecting trade and industry, but I have never known him fail more lamentably than he has this afternoon.
Listening to him, I was bound to ask myself what had happened to all those brave promises that we heard during the Election. There was the Chancellor of the Exchequer, for example, in his broadcast on 21st May. I do not see the right hon. Gentleman here. He said then:we do not intend to tolerate monopolies or unfair price-rings.More than 5 million people must have heard the right hon. Gentleman, and a sizeable proportion of them must have thought he meant it. Then, before, I gather, a somewhat smaller audience in his constituency, the right hon. Gentleman said:No private enterprise can function unless you deal with monopolies, restrictive practices and price-rings which are not in the interests of the public. I say quite firmly that we are in favour of dealing with them. If any of you hear of any cases, mention them to me.A fat lot of good that would do.
We all agree with what the right hon. Gentleman said when he began his speech. The occasion for the debate is the publication by the Monopolies Commission of majority and minority reports which must be the most important reports on industry in our economic history. I do not think the right hon. Gentleman will deny that. It is not an exaggeration 1949 to say that the action taken by the House on the Motion and the Amendment can, in very large measure, determine the pattern of the whole of the private sector of industry, and can thus profoundly influence our industrial efficiency and standard of living for generations to come.
As the right hon. Gentleman tried to do, we have to put this Report into its historical setting. There was the Monopolies and Restrictive Practices (Inquiry and Control) Act of 1948, passed, the right hon. Gentleman said, by the Socialist Party. It was, of course, passed by Parliament; not without a little opposition and trouble from certain leading Conservative spokesmen. Under that Act the Commission was established in 1949. Very soon there were criticisms from both sides of the House that the Commission was operating far too slowly.
The right hon. Gentleman mentioned that we took action on only one Report of the Commission. I think he will recall that because of the time the Commission took to produce its first few Reports—in fact, only three Reports were before the Labour Government at all—the third of them was received only three weeks before the General Election of 1951. On one of those Reports we did what the right hon. Gentlemen has not done on any that he has received; we took firm legislative action to compel the industry concerned to drop its restrictive practices.
We had already recognised, some time before we went out of office, that the case-by-case approach, however valuable up to a point, would never be adequate. One of the main things which emerges from the proposals of the President of the Board of Trade this afternoon is that he is putting the clock back seven years, because he is going back to the case-by-case approach. Every one of these cases has to be considered separately by the tribunal, and apparently, until they are considered separately by the tribunal, they will be permitted to continue. That is what I understood the right hon. Gentleman to say. If I misrepresent the President of the Board of Trade's speech perhaps he will put me right.
§ Mr. P. Thorneycroft
The right hon. Gentleman seems to have written his speech before listening to mine.
§ Mr. Wilson
I did furnish myself with one or two quotations from the right hon. Gentleman which I still intend to put before the House and which may rather embarrass him. In what I have just said I was basing myself on what the right hon. Gentleman said this afternoon.
Is it not a fact that he is now going back to the case-by-case approach and that, therefore, any restrictive practice can continue indefinitely—almost till the end of time—until the tribunal examines it, as it will have to examine each case before it can make it illegal? [HON. MEMBERS: "Answer."] Since the right hon. Gentleman does not want to answer the question, it is clear what the answer must be.
Let me remind the House that we had decided, as a Labour Government, that the case-by-case approach was inadequate. Perhaps I may remind the House of a few words I used from that Box in 1951. I said then:Hon. Members in all parts of the Committee are coming to the conclusion, as I have, that the 1944 White Paper approach to the problem of monopolies and restrictive practices is not enough … If we are to tackle this problem with the urgency required, we shall need … general powers to deal with particular harmful practices, not in one firm or one trade association, but wherever they may be found in British trade or industry. That is why I shall shortly be laying before the House a White Paper with the Government's proposals for dealing with resale price maintenance … and it will be our intention to follow this with further proposals to deal with other types of restrictive practice.—[OFFICIAL REPORT, 16th April, 1951; Vol. 486, c. 1491.]Of course, we did not remain in power long enough to carry that promise into effect. The present Government came into power, a Conservative Government, which was heavily committed on this question in its Election promises in and before 1951. The President of the Board of Trade himself, right from his "Tory Reform" days, was committed to fighting these monopolies.
There was "The Industrial Charter," published, we understand, and drafted by the Chancellor of the Exchequer. It said this:We condemn out of hand any price agreement designed to keep prices above the costs of the most efficient producers, or levies on more efficient firms to keep the less efficient.Condemn out of hand! Nothing happened. We have waited four or five years and now there is to be the setting up of a tribunal which is to take another 1951 twenty years to condemn these practices out of hand. In fact, the Government waited fourteen months before making its general references to the Monopolies Commission. The Commission has taken two and a half years to say, however elegantly, what everyone already knows about these practices. This Government reject the recommendations of the Monopolies Commission and put forward sonic very different solutions.
May I remind the right hon. Gentleman—I hope that his mind is not completely closed to suggestions—of another quotation from "The Industrial Charter." It said:The Government must keep the arena clear for the free play of private enterprise. Enterprise, large or small, and the consumer, who has the right to exercise free choice, must not be steamrollered by those who attempt to corner and abuse economic power.What right has the consumer under the practices exposed in this Report to "exercise free choice"? What are the Government doing, in the proposals that we have heard this afternoon, to protect enterprise, large and small, from the steam roller? Will they not be crushing it long before the tribunal gets around to them?
These were the promises on which the Tory Party got into power in 1951. What has happened since 1951. [An HON. MEMBER: "They got in again."] They got in again because too many people believed their promises about monopolies. Many people were taken in by the Chancellor of the Exchequer and the President of the Board of Trade. What has happened in these four years? In the first place, so far from clearing the arena, the Government have strengthened the position of some of the private monopolies. Action was promised against monopolies in the first Gracious Speech of the last Parliament. Nothing has happened. In the practices which are the subject of this Report nothing has happened. The right hon. Gentleman claims credit for his punctilious proceduralism in referring these practices to the Monopolies Commission. He is a great stickler for consultation and references to statutory bodies whenever it suits his purpose. But he did not consult the statutory Films Council when he reversed the previous policy on film circuits and set the arena clear for the free play of monopoly power by the Rank Organisation.
1952 There was the Statutory Films Council which the right hon. Gentleman could have consulted about that. He did not bother to consult it. He did not trouble to inform the House before we heard about it and pressed him on the matter. Then he denied that there was any change of policy. This is a case in which there was a strengthening of the monopoly without consulting the statutory council, and having changed the policy he tells the House that there is no change in policy at all. The right hon. Gentleman has always been very touchy about anything affecting the sovereign rights and privileges of the Rank Organisation. We can only wonder why.
§ Mr. Wilson
If the hon. Gentleman challenges me, I will deal with that. I shall be delighted to do so.
The right hon. Gentleman was talking just now about batting on a sticky wicket. Let me tell him that no Lancashire or Yorkshire batsman on a sticky wicket at Old Trafford ever dug his bat deeper in the blockhole and stonewalled more stubbornly than the right hon. Gentleman every time there was a proposal that the British end of the international oil monopoly should be referred to the Monopolies Commission.
This reference under Section 15 the President of the Board of Trade parades as a virtue. In his historical account he did not think it advisable to remind the House that the inclusion of Section 15 in the Act was vigorously opposed not only by Lord Kilmuir but by Lord Chandos—Mr. Oliver Lyttelton as he then was—who described such a reference as "a meaningless academic essay." I do not suppose Lord Chandos is any more reconciled to Section 15 now that he has read the Report.
But the right hon. Gentleman referred to it. It suited his purpose. He wanted delay. He wanted to avoid taking any action. He had the very difficult task—I sympathise with him—of reconciling the brave words of the Industrial Charter and the Tory Party's Election pledges with the pressures of the spokesmen of the price ring and monopolies who are very active in his party. We have just had the "Aims of Industry" document circulated on this question. Where I think we really feel sympathetic 1953 with him is in the fact that, having delayed for two-and-a-half years, he is still faced with the same problem. He still has to reconcile these promises with the pressures from behind him. He is now faced with the embarrassing fact that a powerful majority of the Monopolies Commission, after deep research and clear discussion of the issues involved, has come to the same conclusion as the Labour Government had reached on the evidence open to us four years ago.
§ Mr. Wilson
Four years ago—April, 1951.
I had hoped that the President of the Board of Trade would take his courage in both hands. He will need to if he is to do anything firm about monopolies. The 1922 Committee has already had one scalp and we gather that it is in full cry after another. Obviously, the right hon. Gentleman would be faced with great difficulty if he were to take any vigorous action about monopolies.
I must remind the right hon. Gentleman that he himself is heavily committed on this question by statements which he made in the House of Commons as recently as last February, when he said that we must await the Monopolies Report and thatwhere these practices are found to operate against the public interests, they will be firmly and inexorably eliminated."—[OFFICIAL REPORT, 24th February, 1955; Vol. 537, c. 1496.]That is what we want to happen and preferably in our own life-time; and it will not under the sort of procedure which the right hon. Gentleman has in mind.
Since the right hon. Gentleman made that statement there have been other speeches. I have referred to the speech of the Chancellor of the Exchequer. During the Election, I understand that the Prime Minister had referred to him the question of a grocer in Birmingham—a humanitarian grocer—who wanted to sell tea to old-age pensioners on a nonprofit basis and who had his supplies cut off by the trade association. The Prime Minister was apparently shocked about this. He said that a Conservative Government would take appropriate action to deal with the matter. We were told that in the House by my hon. Friend the Member for Ladywood (Mr. V. Yates) last week.
1954 When are we to have appropriate action about this tea business? Will the Government take any action? How long will it be, under the Government's present proposal, before it will be considered illegal for a trade association to cut off supplies of tea to a grocer when he wants to sell it cheaply to old-age pensioners? Does tea come within the President of the Board of Trade's proposal? There was a firm commitment by the Prime Minister during the General Election.
Turning to the Report itself, I will not go into it in great detail. The right hon. Gentleman quite fairly summarised most of its main conclusions. He outlined six practices which the Monopolies Commission used to divide up their terms of reference. I think that the right hon. Gentleman did that quite fairly. But it is interesting to note that, after describing in detail how each of these six types of restrictive practices works, the Report lists in Appendix 2 a number of goods the supply of which appears to fall into one or more of these categories. They are in alphabetical order from agricultural machinery to wire ropes, baths to biscuits, carpets to confectionery, lime to linoleum, pins to petroleum products, millinery to memorials. Whatever the Welfare State may or may not succeed in doing, it is clear that these price rings succeed in pursuing the citizen literally from the cradle to the grave.
Then there are items which enter into the cost of houses, whether local government houses or houses built for the private owner occupier. Let us take the items listed in the summary: baths, bricks, cement, damp courses, electrical goods, fibre building boards, flat glass, flushing cisterns and associated equipment, glazed and floor tiles, heating boilers, and radiators, lead sheets and pipes, paint and paint materials, plaster board, salt-glazed pipes, sanitary earthenware, sanitary fireclay, and other clay ware. How long will it take the tribunal to get through all that lot? I should imagine that it would take very many years to deal with house building alone.
Using the same appendix, again, when citizens of this property-owning democracy come to furnish and equip a house, these are the items affected: from carpets, rugs and curtain rails to linoleum and refrigerators—all these in one sample 1955 list of the Monopolies Commission showing one or more of the six restrictive practices.
To make sure that their grip is tight enough, many associations use two or three or more of the six practices which have been listed. The Dental Goods Report showed that the dental goods manufacturers made use of five of the six restrictive practices in order to make sure that their grip was effective. The electric lamp cartel used all six restrictive practices to make certain that everything was tied up and nothing could escape.
I think the examples which I have given justify a statement which I once made to the House, and to which the President took exception, that British industry was "honeycombed with these practices." I remind hon. Members of all the cases mentioned in the debate on 24th February. I do not intend to outline them all again this afternoon, but I might perhaps mention one or two. There was the Mendelssohn case, a trader put out of business for selling tyres too cheaply; a garage proprietor in the West country, trapped by a snooper masquerading as a farmer into buying second-hand tyres slightly above the ring price; the seedy looking commercial traveller who wheedled a garage proprietor into selling him petrol below list price because he said he could not afford to keep his car on the road; the many cases quoted by my hon. Friend the Member for Rossendale (Mr. Anthony Greenwood); and, of course, the case of the humanitarian Birmingham grocer. This is British industry, or a very big slice of it.
We read of these business men at trade association dinners, for which the Chancellor of the Exchequer so largely pays, waxing eloquent about the virtues, economic, moral and even spiritual, of untrammelled free enterprise and the iniquities of State planning; yet these are the very people who, with the perverted aid of accountants and lawyers—and I believe it is perverted—have devoted their ingenuity and business drive to drawing up a system involving the detailed and intricate planning of large sections of industry and trade with a degree of thoroughness and of ruthlessness in enforcement which far transcends most of the war-time and post-war controls which were maintained by Government Depart- 1956 ments over British trade and industry. Indeed, the right hon. Gentleman himself, in his famous book, "Design for Living," went out of his way to rebuke these gentlemen who make so many speeches about private enterprise and then spend their private lives building up these monopolistic situations.
Planning? I confess that when I read this Report I have to admit that we on this side of the House and the Civil Service are amateurs at it compared with the professionals of these trade associations. The only difference is that we operated it, and shall operate it, for and on behalf of the community, with Parliamentary consent and under Parliamentary control, whereas these gentlemen operate it without statutory authority for and on behalf of private profit and in a manner which an impartial inquiry has shown to operate contrary to the public interest. That is the difference between us.
Naturally, the right hon. Gentleman could not read out to the House all the quotations from the Report which make it absolutely plain that in the minds of the majority these practices are contrary to the public interest. There may be one or two exceptions. There was the reservation on collective enforcement of price maintenance by Mr. Gifford and there was the Minority Report, but running through every one of the chapters, and especially the final conclusions, is the clear decision of the Monopolies Commission that these practices are contrary to the public interest.
The President did not accept that conclusion. He merely accepted the view that they might be contrary to the public interest, so he sets up this tribunal to spend its time over a period of many years doing the work all over again which the Monopolies Commission has already done.
I would remind him of the quotations in the Report when, for instance, it refers to one practice leadingto the creation of a privileged group, subject to relatively little outside competition …";when it refers toapproved lists drawn up with criteria for admission which are arbitrary …";when it talks aboutpreventing experiment, protecting established traders from the competition of those who would otherwise be willing to introduce new techniques";1957 when it quotes from the Commission's earlier judgment on the Dental Goods Report which used the words,an extreme interference with the freedom of the subject to carry on any lawful business.These are the conclusions of the majority Report and in his speech this afternoon the President rejected them.
I want to stress one of the recommendations in the majority Report about which the President said nothing at all this afternoon. It is the view of the majority that legislation should be introduced to make it illegal for the trade associations to discriminate against Cooperative societies and other bodies who pay deferred dividends as a result of their trading. We find many cases here of trade associations cutting off supplies to Co-operative societies or insisting that they should charge higher prices in Cooperative shops compared with the prices charged in ordinary private enterprise shops.
This is condemned by the majority Report, but I wonder what will happen under the President's proposals? Will this problem be solved? Will this tribunal be given instructions about it? This is one of the practical questions which the President must face.
Our Amendment asks the House to support the majority Report and its recommendations. I would point out to the right hon. Gentleman that all the legislation proposed in this Report—the President seemed a little shocked by it and suggested that there was an air of criminality about it—goes much less far than, for instance, is the case in the United States and much less far than is the case in Canada. The right hon. Gentleman had no need to be very shocked about it.
If he rejects the Report, we must ask, how shall we outlaw these practices? He was right to ask how these practices arose and what inspired them. I think I agree with him—perhaps not all of my hon. Friends will—that in many cases they did not stem from greed or deliberate desire to exploit the consumer. There are some cases, of course, which arose from greed. On the whole, I think there were two main explanations. The first, as he said, was that they arose from fear and a desire for stability in an unstable and depressed world. The Report shows how many of them were born in the 1920s or 1958 developed in the 1930s, although it provides some shocking evidence of how they have been developed since 1945, when there has been no question of mass unemployment, depression and all the rest of it. The main reason for which these practices have developed is a fear mentality, a depression mentality.
There is a second reason and it is Empire-building on the part of trade association secretariats to justify their existence. Once there is a scheme of this kind it provides employment for a whole group of bureaucrats—the right hon. Gentleman is always against bureaucrats. Naturally, these bureaucrats want to go further in tightening up the enforcement, making the scheme work, so providing more jobs for themselves and for their like. Again, it is not a question of greed; these fellows are not wolves so much as jackals. As the right hon. Gentleman said, we are not living in pre-war days. The need in this country is to expand industry not to stabilise a small corner of an unstable market.
In previous debates the right hon. Gentleman has had a lot of fun about calico printing. [HON. MEMBERS: "Hear, hear."] I did not hear any "Hear, hears" from Middleton and Prestwich. We advised caution in the case of calico printing, only because textiles are almost—almost, but not quite—the only industry where there are still these fears and still these anxieties about the future, as a result of the Government's policy, or lack of it, in relation to textiles. At a time when four mills are closing every week and there are 60,000 cotton workers on short time, if recent Press reports are correct, there is an argument for caution and for going slow in that case.
§ Mr. William Shepherd (Cheadle)
Will the right hon. Gentleman tell the House whether he persists in his view that we ought to reject the findings of the Commission on calico printing? Does he also take the view that in Lancashire many of the difficulties are not caused by restrictive practices in the industry?
§ Mr. Wilson
If the hon. Member for Cheadle (Mr. Shepherd) had not interrupted me, I was about to say a little more about calico and would have answered his question without wasting his time, or mine. If he recalls, we have never said that we rejected the Report of 1959 the Monopolies Commission. I challenge the right hon. Gentleman to produce evidence that we ever have. I have said on more than one occasion that the right hon. Gentleman should go slow in enforcing it.
That does not mean that we endorse all the complicated market sharing arrangements of the Calico Printers' Association. Of course we do not. Indeed, the right hon. Gentleman may remember attacks on me by the Press, including the "Manchester Guardian," for being the first Minister from the Dispatch Box to condemn these price-fixing arrangements in calico printing, yarn spinning, and the rest. Nevertheless, the President should recognise that where fear persists—and for good reason—in an industry, his duty is to remove that fear. If he did that, we should certainly support him in any action he wanted to take about these arrangements.
That is why we suggested that if the minimum price arrangements—and I am referring, only to the minimum price arrangements and not the whole structure; I include yarn spinning—are left in being until confidence in the cotton industry revives, they should still be subject to Board of Trade control to protect consumers and other sections of the industry.
§ Mr. P. Thorneycroft
Do I take it that the right hon. Gentleman would support the abolition of the percentage quantum system?
§ Mr. Wilson
Yes. I have made that clear on many occasions. It was purely the price arrangements which we had in mind—temporarily—until the right hon. Gentleman could bring confidence back to the cotton industry.
§ Mr. Thorneycroft
The right hon. Gentleman will realise that the substance and very centre of that Report was the percentage quantum system. This is the first time that the right hon. Gentleman has openly said that he would support the abolition of that arrangement.
§ Mr. Wilson
The right hon. Gentleman will see in the OFFICIAL REPORT of 24th February that I specifically referred to the price arrangements and to the price arrangements only, and did not mention this percentage system at all. If he has had a nice Election, misrepresenting what 1960 I said, then now is the time to put that right.
The vast majority of cases condemned in the Report are where there are no such anxieties and fears about the future. That is why we support the majority Report that action should be taken about them. Those are the industries where there are full order books, shortages in many cases, inadequate capacity, long deliveries and a sellers' market. Any case there might have been in those industries in the 1920s and 1930s for restrictive arrangements went many years ago. That is why we hoped that the Government would accept the majority Report, so that all these arrangements in tyres, tea, Star Chamber courts, would have been made illegal by the legislation proposed by the Report.
I want to say a final word on registration. The right hon. Gentleman seemed to think that I would have found intellectual difficulty about the proposals in the Amendment involving both the majority and the minority Reports. That shows that he did not study the Amendment. What we suggested is quite clear. It is that in respect of those items within the terms of reference of the Monopolies Commission, and there is a clear proposal that legislation should be introduced to make these practices illegal, we should have that legislation and that these practices should be made illegal.
The suggestion in the remaining part of the Amendment is that over the remainder of the field of British industry—that is, restrictive practices not covered by this reference—such practices should be the subject of registration. I do not think that the President himself entirely rejects our proposal about registration, except that he proposes to do it group by group. There is not the intellectual conflict that the right hon. Gentleman seemed to think there would be. Certainly, I do not think that registration of itself will do anything. The President is too optimistic if he thinks that the dental goods manufacturers would have ceased from their vicious practices just on the basis of registration.
On 24th February my right hon. Friend the Member for Leeds, South (Mr. Gaitskell), my hon. Friend the Member for Hillsborough (Mr. G. Darling), myself and others commended the Swedish experience to the House and gave details of that experience. We pointed out that, since 1947, 1,250 restrictive agreements 1961 had been registered in Sweden, 480 of these have been scrapped and 250 modified. In fact, the Swedish equivalent of the Federation of British Industries has set up a special department to advise its members on how to wind up their cartels and price rings. It will certainly be a revolution if we find the British F.B.I. setting up a similar department in this country. Perhaps, as a result of these proposals, we shall see that happen.
I hope that the President will think again about this proposal. He does not say when he intends to introduce legislation. Above all, he has not told us how the Tribunal will work. I put a question about that in the middle of his speech, but I did not get a clear answer. Is it the fact that under this tribunal every one of these restrictive arrangements, provided they are registered, will be allowed to carry on until the final tribunal can get around to examining them and perhaps wind them up?
If that is the proposal, I suggest that he is putting the clock back to 1948, that we are getting back to the case-by-case approach, and that it will be very many more years before anything is done about some of the scandalous cases which have been exposed. We thought that the President was taking too much time in referring this matter to the Commission. We thought that there was enough evidence at that time to introduce legislation to make these practices illegal. But he wasted three years and those three years have been wasted, because, having made the reference, he has rejected the Report.
If we are to be told that the only result is that we have turned full circle back to the case-by-case approach, I am bound to say that all the high hopes aroused by some of the President's statements in February and by some of the Government's Election promises will be utterly frustrated. I put it to the right hon. Gentleman that the Government are faced with a great challenge and a great opportunity. It is not too much to say that the future of British industry, its ability to play its full part in our struggle for economic survival, in our export trade, in its contribution to our national standard of living, in great measure depends on how the Government and the House rise to this challenge and opportunities.
In the fierce and ruthless struggle for world markets we cannot move at the 1962 pace required, unless we firmly take the decision that these self-imposed and obsolete hobbles on industry and trade must go. I have heard nothing in the President's proposals this afternoon to suggest that anything is to be done to remove these self-imposed and obsolete hobbles, except over very many years. I hope that the Government will look at this again and tell the House that they recognise that a decision has to be taken. That decision, on which the House will be asked to vote tonight, has already been delayed too long and, in our view, can wait no longer.
§ 4.50 p.m.
§ Mr. Peter Rawlinson (Epsom)
In speaking in the House on the first occasion, my natural apprehension has been increased by the speeches of my right hon. Friend the President of the Board of Trade and the right hon. Member for Huyton (Mr. H. Wilson) who replied to him. In my attempts to avoid being controversial, I hope that I shall be able to pick my way gingerly between the "opposing powers." I represent the constituency of Epsom, in which we have no monopolies except perhaps a permanent monopoly on the finest flat race in the world, and we have no restrictive practices such as they have in the enclosures at Ascot. I wish, therefore, to speak in this debate personally, and as a lawyer. I have been long enough in this House to appreciate that saying that one is a lawyer is not in itself a recommendation. I do not know whether that also applies to economists.
I also have been long enough here to appreciate that though this House may have no love for lawyers, it certainly has no love for people who pretend to be what they are not, and therefore, as a self-confessed lawyer, I would draw attention to the procedure of the Monopolies Commission when investigating the matters placed before it. I think that there are serious faults to be found here.
To a certain extent the Monopolies Commission must be a judicial body. It is in fact conducting a trial; and anyone on trial, whether it be a person of no reputation accused of some of the most infamous criminal offences, or a trade or association, surely is entitled to the ordinary perquisites of the ordinary English system of justice. I heard my right hon. Friend refer to "onus" and 1963 "presumption of guilt." There are, of course, two main rules in English jurisprudence and English Common Law; a presumption of innocence, and that justice shall not only be done but shall be seen to be done. Anyone who has been an advocate in a case which has aroused public interest must be horrified by the telegrams, letters, calls and abuse dispatched by persons before the evidence has even been presented, or before a verdict has been reached. I think that "presumption of guilt" are ugly and, indeed, alien words to introduce into any form of trial, whether it be an inquiry or a proper trial before a judge and jury.
No accused is required to provide the evidence against him. Every accused also has before him a prosecutor who is not the judge. In these cases before the Monopolies Commission, it appears that, in fact, the chairman prepares the indictment and the arguments against the defendant industry and then, after having prepared them, becomes the judge and proceeds to try the issue. As I understand it, the procedure is to collect evidence, which takes a matter of two or three years, at the expense of the industry accused. There is a special secretariat to produce that evidence and following its production there is a clarification hearing where the representatives of the industry are brought before the Commission and asked questions. Based upon those questions a public-interest letter containing the charges is sent out. Then, finally, comes the public-interest hearing, where the representatives of the industry charged can make their speeches and answer the question put to them.
It seems that in those circumstances we have what we have seen in other countries, a form of congressional committee, with no opportunity for witnesses to be called who may be cross-examined by the defendants. We have the chairman putting the questions and conducting the interrogation. How can it be but that the persons in that industry must surely believe that in fact the man conducting the inquiry and asking the questions must have made up his mind, even before it comes to trying the issue?
Therefore, when I hear my right hon. Friend say that these tribunals will be created, I earnesly hope that there will be a distinction made between the rôle of the 1964 prosecutor and the rôle of the judge. Certainly, let us establish some organisation whose duty it is to present the prosecution and collect the evidence, if necessary, from the industry concerned. Let there be a permanent staff whose duty it is to bring the evidence before the Commission. The matter can then be tried by the Commission which would decide on the evidence what is in fact the truth and what should be done with a particular industry. I suggest that it is only in those circumstances that a fair trial would be given to the industry concerned.
I am not so rash as to enter into a discussion on the merits of this Report. My talons are not sharp enough in debate for me to be able to argue with hon. Members about which is the better part of it, or what should be done. All I wish to say to the House is that of course wrong practices should be stamped out. Indeed, I should imagine that it is the desire of every hon. Member that wrong practices contrary to public interest should be removed. But I ask the House to consider that that should be done only when a fair and reasonable trial has been given and that the stamping out should be based, not on prejudice, but on justice.
§ 4.55 p.m.
§ Mr. A. G. Bottomley (Rochester and Chatham)
It affords me pleasure to follow the hon. Member for Epsom (Mr. Rawlinson). He had some doubt about the kind of reception the House would accord to him because he was a lawyer. I can tell him that this House judges a speaker upon his character, sincerity and ability. The hon. Member has not let us down, and we shall look forward to further contributions from him.
I wish to go a little wider than the questions with which the Report, as such, confronts us. The popular belief is that hon. Members opposite are anti-nationalisation and anti-trade union, and that that is their conception of a monopoly. Likewise it is thought that we on this side of the House feel that a monopoly in itself combines all the evils of big business. The issue is not so clear-cut as that, and, whatever politics there may be in this kind of argument, I think it necessary for us all to consider the matter more widely.
Large-scale organisation is here to stay, that is, if we want a standard of 1965 living as high as we enjoy today. In my judgment, that large-scale organisation is necessary also if we are to keep down the cost of articles by better technical know-how or by efficient business organisation. It is necessary if we are to avoid wasteful costs of competition. As an exporting nation, we must produce goods as efficiently and economically as possible in order to hold our own in the world markets.
Speaking as a trade unionist, I do not want there to be shoddy production and cheap labour in order that we may be able to compete in those world markets, which would result from inefficient organisation. We should all join in condemning the behaviour of organisations which keep up prices higher than is justified, with the consumer having no other choice. The Commission's Report itself condemns this kind of restrictive practice. For instance, we can condemn the behaviour of those monopolies and rings which supply local authorities and in respect of whom the Association of Municipal Corporations recently had to see the Minister. We can condemn, too, those manufacturers who refuse to sell to the Co-operative societies. Speaking as a co-operator and as one who buys the goods he requires from them, I think that if Co-operative societies are prepared to give back a dividend to the consumer out of the profits which they receive, that is something to be encouraged. I do not think that any monopoly ought to have the right to refrain from selling to Cooperative organisations.
To take a particular case of which examples have already been given in the House, there is a local figure in my constituency who wanted to reduce the cost of living by selling tyres below the standard price. His was a familiar story. He was hauled before the trade court, and he either had to pay the fine imposed by that court or be put out of business. I am sure that we should condemn that kind of practice.
As the Report says, although we condemn the practices of rings and trade associations, we still have to consider what we are going to do with organisations like Unilever and Courtaulds, which can adopt precisely the same methods as those adopted by the trade organisations without it being apparent that they are ganging up.
1966 I think it is pretty clear from the speech of the President of the Board of Trade today that we cannot expect much from this Government. I am not disappointed because I thought that would be the position. I remember that in the Gracious Speech in 1951 a monopolies Bill was promised. It did not come until 1953. During the debate on that Bill, I moved an Amendment which suggested that there should be four deputy-chairmen. The President of the Board of Trade said that he was happy with only two, but to the best of my knowledge the two have not been appointed to this day. That in itself clearly shows me that the Government were not really keen on doing anything effective about monopolies and their evil effects upon markets, and, in particular, upon consumers.
I suggest that the Government ought to consider introducing a Measure under which monopolies would be forced to give some kind of account of their work as, for instance, the National Coal Board has to do. It is not good enough to have a national newspaper carrying two columns of a report of the year's activities of a great monopoly. Why should there not be public accountability? Why should not the Press speculate on what is likely to be in the report of the I.C.I. in the same way as it does in the case of a nationalised industry?
The Government ought to bring pressure to bear on monopolies so that the searchlight of public opinion can be turned on them in the same way as it is on other public organisations. The consumer should be able to see that he is not being overcharged. He cannot be sure of that today. He can only be told that it is all a question of the market and of how much the consumer will pay. We know how that system operates; the monopoly fixes the price and the public either pays or goes without. As most of the articles are sheer necessities, there is no choice.
We hear a lot today about the necessity of the trade unions co-operating with managements. I would put it round the other way. I think that managements should co-operate with the trade unions. The workers should be clearly shown that any improvements brought about by large-scale organisations or monopolies are not harmful to their interests. It is my conviction—and I repeat it because 1967 I believe it to be true—that when, by the very nature of its production, an industry or organisation becomes a large-scale organisation or monopoly, the direction in which it ought to be going is public ownership. That has been argued in the past by those who helped to found the movement to which I belong. It has been uttered, too, by those Liberals who belonged to the Radical school of thought.
Industrial co-partnership may play a part in that development, but we are living in days of automation, and there may not be the workers to benefit from that co-operation. I wish to draw an analogy between the great institution of which we are all privileged to be Members and the development of our economic system. In the past, this House was the place to which only the privileged members of the community came. Members of Parliament and of the Government were drawn only from the selected few. As time progressed, we were able to elect Members who truly represented the nation.
Do hon. Members believe that we could have gone through and won the last war, could have come out of it a united nation and have the stability which we have today if we had not built up this Mother of Parliament? I suggest, therefore, that if we leave industry as it is today in the hands of those who organise monopolies, a privileged section of the community, the time will come when there will be such industrial unrest that the very standards which we have built up will be threatened We may even find that instead of being a great and prosperous nation we shall be faced with turmoil. That would be disastrous because we not only have to think of this Parliament and of our own society, but of the rest of the world who have followed us in establishing free Parliamentary institutions.
I believe that we have to look forward to a field of development in which power is taken away from the few and in which monopolies are organised in such a way as to render a public service. They should be accountable to the public. The way in which that can be done is to build up a vast working economic democracy akin to our Parliamentary democracy. I have sown some seeds. I have not gone into the Report as such, but I have looked at 1968 it very carefully and could comment fully upon it. However, I will not detain the House any longer because I know that there are many other hon. Members who wish to make a contribution to the debate.
§ 5.8 p.m.
§ Sir Lionel Heald (Chertsey)
Parliament has been set a difficult problem by the Report of the Monopolies Commission, and I believe that almost the whole House will agree that we ought to regard it calmly and impartially. The subject of monopolies and the matters which have been referred to the Commission under Section 15 of the Act are rather perplexing to the layman. He finds himself in a world of price cutting, rebates, loss-leaders and non-signers, and he rather wonders what it is all about.
As many of us found by personal experience during the General Election, the electors made perfectly clear to us their desire that this matter should be taken seriously and that if abuses were found to exist Parliament should see that they were remedied. It is in that spirit that we approach this matter today.
I am not going to adopt any kind of party line, and I am certainly not going to follow the kind of line adopted by the right hon. Member for Huyton (Mr. H. Wilson). I am going to try for a few moments to assist the House in deciding between two alternatives.
The first is the alternative which is put forward by the majority of the members of the Monopolies Commission. The other is the alternative put forward by my right hon. Friend today. I ask the House to decide between the two. It would be quite wrong to ask the House to reject out of hand the advice of the majority of that distinguished body, the Monopolies Commission, and, therefore, we must examine what they have recommended and treat it on its merits. That is what I propose to do.
In these things we ought to have some sense of proportion. From what we sometimes hear, one might think that the practices with which we are concerned today are really responsible for the whole of our economic troubles. But we ought to remember that these are not the only monopolies which exist, and that, if we were to rush into panic legislation against them, it might create a rather awkward precedent which could be used by a future Government that might hold views 1969 different from those of either of the present political parties. In consequence, certain monopolies might suffer. Therefore we ought to be very careful that we do not rush this legislation unwisely. The majority of the Commission has recommended that a criminal offence should be established, and my right hon. Friend has said that he rejects that suggestion. I want to explain to the House why I regard the institution of such a criminal offence as a most dangerous and undesirable thing.
We dislike the multiplication of criminal offences. We regard it as bad enough in itself, but we dislike even more the creation of anything which might be described as an absolute or automatic offence—something to which there is no possible defence. We had to put up with it in the Defence Regulations, but many hon. Members on both sides of the House would agree with me that we do not want to repeat such legislation if we can help it. As my hon. Friend the Member for Epsom (Mr. Rawlinson) emphasised in his admirable maiden speech, we feel that a man should always have an opportunity of defending himself, and if he is accused of malpractices we should not like him to be deprived of the opportunity of calling evidence and putting forward arguments to justify his actions. That is the first reason why we should object in principle—and why I do object in principle—to the institution of a criminal offence in this matter.
When we come to the creation of an absolute offence, the matter is even worse. It is not surprising to find that the majority of the Commission appears to have appreciated this weakness in its proposal. No doubt it is for that reason that it introduced the rather remarkable suggestion of applications for exemption. It is a rather novel principle in criminal law that one should establish a certain course of action as a crime and afterwards allow people to apply for exemption. It is a rather strange conception. One might almost imagine someone saying, "My mother-in-law is a very difficult lady. She is coming to stay with me next week. May I have an exemption from the Offences Against the Person Act?" That is very much the sort of mentality which seems to lie behind this proposal, and there is a most striking point to be made in connection with it.
1970 The right hon. Member for Huyton made great play with the suggestion that under the Government's proposal it would be years before all these practices could be dealt with. One wondered what the contrast was. I think that I appreciate it now. If the right hon. Member for Huyton had his way, he would make all these things illegal, and then tell people, "You can come along afterwards and apply for an exemption." How extraordinary it would be to hold that certain offences were illegal and the subject of criminal proceedings—and, possibly, even imprisonment—and then allow offenders against that law to say, "May I please have an exemption?"
The result of adopting this exceptional procedure was pointed out very clearly in an article in "The Times" today. Everybody would regard himself as entitled to exemption, and everybody would apply. This House would say, "We cannot allow a man to be condemned and fined—and possibly imprisoned—if he has put in an application for exemption." We should find ourselves in the same position as is imagined by the right hon. Member for Huyton, but to a much worse degree, because we should be hopelessly bogged down. In that case the initiative would come from the people themselves, whereas, under my right hon. Friend's proposals, the Government will take the initiative and decide in what order certain practices are to be dealt with. I suggest that my right hon. Friend has adopted a solution which is a much better alternative than that suggested by the Majority of the Commission.
§ Mr. R. T. Paget (Northampton)
Whichever form of tribunal is set up, the issue before it must be, what is the public policy? Has the right hon. and learned Gentleman felt that either judges or tribunals have been very successful in ascertaining that?
§ Sir L. Heald
I do not want to quarrel with the hon. and learned Gentleman over words, but it is not a question of public policy; it is a question of public interest—which is quite a different thing. It is possible to have evidence which allows one to decide what is the public interest, but nobody knows what is public policy except those who are actually deciding it.
§ Sir L. Heald
In this case, as my right hon. Friend said, it would be necessary for certain lines of policy to be laid down and certain definite directions to be given.
Another suggestion is that to make these actions absolute criminal offences would lead to simplicity and speed. So it would, if we adopted the "off-with-his head," Alice-in-Wonderland method, but I hope that it will not be suggested that we ought to do that. If we were to adopt that method the opportunities for litigation would be enormous. We cannot have better proof of that than that which is afforded by the experience of the United States, which the right hon. Gentleman the Member for Huyton seemed to take quite lightly. He said, "After all, the Sherman Act is not so bad."
Do many hon. Members appreciate what the Sherman Act has meant? It was passed in 1890, and said in effect, "Every crime which may lead to a restraint of trade is illegal, and anybody concerned with it is guilty of a criminal offence." As was pointed out by one Supreme Court judge, that included the circumstances of two business men going out to lunch together—because that might lead to a restraint of trade, and very probably would. So the courts in the United States said, "We cannot have our people being imperilled by that kind of broad danger, so we must introduce a qualification," and they introduced the beautifully vague words, "undue" and "unreasonable" in front of the word "restraint." That produced the most magnificent lawyers' jamboree in the whole of history.
I should like to give the House one example of what happened; there is not time to go into all the details. There are three decisions on the record in the United States relating to traders who were held to have committed offences against the Sherman Act. The first man sold his goods at a higher price than another. He was held to be guilty of profiteering and, therefore, guilty of an offence against the Sherman Act. The second sold his goods at a lower price than another. He was held to be guilty of unfair competition, and of offending against the same Section of the Act. The third man sold his goods at the same price, and he was held to be guilty of being a party to an agreement in restraint of trade.
1972 We must not create what somebody once described in relation to the Sherman Act, as,A lawyers' paradise and a traders' hell.Surely it is much better not to make this a criminal offence, because if we do not we reap certain advantages. First, the matter does not have to be tried by a jury—and I believe that it would be most undesirable to have these matters tried by juries. Juries are human and it is easy to say to them, "Is it a very nice thing to call this man a criminal? He is only doing what everybody has been doing for years, and what all sorts of people are still doing, including trade unions. Are we to condemn him and call him a criminal?" That would not be a very desirable thing to do.
Then there is the question of public opinion. I believe that the public would feel that there was a certain amount of vindictive and, possibly, political feeling about the matter, and we might find that these cases would fail upon that ground. That would be a bad thing, because we want them to succeed where they ought to succeed. In addition, let us remember that the Labour Party's Monopolies Act of 1949, which was very carefully thought out, did not make use of criminal terms at all except in relation to the suppression of information and things of that kind, which are quite different. Everything needed here could be done by means of civil remedies.
I ask my right hon. and learned Friend to give his attention to one thing which does not seem to have been considered. For 70 years in this country we have had a code of legal practice in relation to the abuse of monopoly in relation to patents, which has been extremely successful. If it is shown that a man is abusing his patent rights he may even lose his patent or he may be ordered to grant a compulsory licence. I suggest to my right hon. and learned Friend that he should consider the possibility of applying those same considerations to trade marks and brand marks, because many of those practices are carried on by reference to such marks, and if the same provisions which now exist in the 1949 Patents Act were applied to trade marks and brand marks possibly many of the practices could be dealt with in that way. I hope, therefore, that this may be considered.
1973 Finally, there is the question of trade courts. It obviously would not be appropriate to discuss those in detail today because their future must depend upon the decision which is made on the broader issues; and it will only be possible to discuss them in detail when we come to see the form of the legislation that is brought in. Yet I feel entitled, and bound, to say this: that the minority of the Monopolies Commission, who seemed to think that trade courts are quite desirable, because of their eminent position in the world do not come into contact with the opinions of the ordinary man and woman in the same way that some of us have had the opportunity of doing in a recent period of three weeks, and I do not think they appreciate how strongly the general public feels about this matter.
I want to put dispassionately what has been put to me often by my constituents irrespective of party, because it is not a party question but one of people's feeling of fairness. The general public does not like the idea of people who are not members of an association being summoned before that association and "fined." The word "fined" I put in quotes, because those so-called courts have no legal right to fine anybody and they have no legal status of any kind, sort or description since no one can lawfully set up any court except the Crown. And the fine is not a fine in the ordinary sense but a payment of money under the threat of being put on a black list. It is the fact that in a case called Thorne v. The Motor Trade Association the House of Lords decided that the demand and receipt of money in return for not being put on a black list did not—repeat "not"—amount to "blackmail."
The associations are entitled to lay that flattering unction to their souls, but all that was decided by the House of Lords was that it was not blackmail. I believe that in the general opinion of the public these things, if they are to be done at all, ought to be done in the ordinary courts of the land.
In order to allow this to be done, as the right hon. Gentleman explained, the law would have to be altered so that, if the House came to the conclusion that price maintenance arrangements were justifiable in some cases, there could be a condition which is called a condition running with the goods, which would enable the price to be applied to the 1974 last seller. That is what is called the "non-signer," which is an American expression and means a man who is not in direct line but who eventually gets the goods and sells them to the public. If it were considered by Parliament desirable, it would be simple to have a legal provision which would allow the price, as it were, to follow the goods. I am not suggesting that it should be done but, if it were done, it could be done in the courts and I believe that it ought to be done in the courts or nowhere.
Two very eminent members of the minority who are good friends of mine and very great lawyers laid much stress on the great impartiality and judicial qualities of these so-called courts. I do not doubt that. It is a point which is emphasised by the associations themselves, but that is not the real point. The real point is the one which was put picturesquely and directly, as many things were put, by Dr. Johnson, when he was asked his opinion about women preachers. He said that it is like a dog walking on its hind legs; the surprising thing is not that it is done well but that it is done at all.
§ Mr. Godfrey Nicholson (Farnham)
I must correct my right hon. and learned Friend. What Dr. Johnson actually said was:It is not done well; but you are surprised to find it done at all.
§ Sir L. Heald
Whether it is done well or badly, I hope that the House, in coming to the conclusion that my right hon. Friend is taking the right course, will also join with me in asking him to make quite certain that, whatever else is included in this legislation, a provision is included by which these so-called courts cease to walk on their hind legs.
§ 5.27 p.m.
§ Mr. John Cronin (Loughborough)
To address this House effectively requires a degree of knowledge and experience which I do not claim to have attained, so I feel gratitude for the courteous usage of this House which accords indulgence to maiden speakers.
I have the honour to represent Loughborough, a constituency which is occupationally rather a mixed one and which is rather mixed in trade. We have a mining industry where there are fewer trade disputes and a higher production of coal per 1975 man per ton than anywhere else in the country; we also have an excellent agricultural industry, and we have important engineering and hosiery industries as well as numerous other minor industries.
There is one common factor in the constituency, and that is the popularity of the co-operative trading practice, which is of the first importance there. This form of trading suffers particularly from restrictive practices as known at present. There is no doubt that those people who wish to obtain their goods and commodities from Co-operative organisations suffer a heavy disadvantage in that they cannot receive dividends on those goods or else they have to do without them if the goods are the subject of restrictive practices. So in speaking today I feel that I am representing my constituency not only in that it is largely a Co-operative trading one, but also in that these practices affect most housewives and other people who shop.
The President of the Board of Trade rendered considerable service when he said that we should strip this question of all moral indignation and of all feelings of moral revulsion. It is important that we should analyse it coolly and appreciate that businessmen, so long as they are businessmen, have a duty to maximise their profits. So long as we accept private enterprise in this country, we must accept that principle. Therefore, we cannot regard it as morally wrong for them to accept restrictive practices to further their ends.
The important question is whether we are morally right in permitting those practices to continue if they are contrary to the interests of the country. Businessmen may have a straightforward self-interest. So far as production in industry is concerned, Oscar Wilde's dictum that self-love is the beginning of a lifelong romance is directly applicable, but we have to take into consideration whether we must break up that romance and interfere with it.
Another important point which the President of the Board of Trade mentioned was that this issue is complicated by the circumstances that there is no definite view at present as to the desirability of retail price maintenance, and this particular system of restrictive practices is only one way of maintaining 1976 retail price maintenance. I could not quite follow the right hon. Gentleman there, because surely it is quite a simple matter.
If we find on investigation that retail price maintenance is desirable, it is surely a simple matter to legislate to continue it? Across the Atlantic, in the United States, by the Miller-Tyding Act of 1931, they passed a law which legalised and strengthened retail price maintenance, so that it is a comparatively simple matter to deal with this question by legislation. It is quite unnecessary to proceed with it by a system of private law which goes on behind closed doors and of which the country has no knowledge at all.
It seems to me that the main argument against the Government's proposals, which are essentially those of the minority group on the Monopolies Commission, is first of all the slowness with which the procedure will take place. The President of the Board of Trade mentioned that things moved very slowly after the Labour Government had passed the Act of 1948, and I think that is the essence of the problem. If we examine each case on its merits, it will take a very long time, and I think it has been calculated that if we continue investigating monopoly conditions and restrictive practices at the same pace as we have done so far, it will take roughly 340 years to cover the whole of industry. It seems to me that that is carrying caution too far.
Another important aspect of the matter is that, under the Government's proposals, the industry will be quite unaware of what the position is. No individual industry and no individual producer or distributor will know whether it is likely that the practices with which it or he is associated will be condemned or not, and that will produce considerable uncertainty. Another important point is that the latecomers to be tried by the tribunals which the Government propose will be rather more fortunate people than those who will be tried straight away, because they will continue their practices, and this will create enormous injustice.
The right hon. and learned Member for Chertsey (Sir L. Heald), who has just spoken, has the advantage of being a lawyer, and I feel some diffidence in referring to his arguments. One of his 1977 principal objections to the recommendations of the majority group on the Commission was that they would create a new crime, and that we in this country are very reluctant to introduce new crimes into our law. Surely, that is an inevitable effect of a large part of modern legislation? If we are to control the life of this nation to the extent which is necessary in modern times, we have to produce new crimes.
One hundred years ago or so, it was eminently reasonable for somebody to enter this country with several gold watches and say nothing about it, but it is now considered, and reasonably and justly considered, to be a crime. If the public interest necessitates making what are apparently at present blameless practices into crimes, there is a very good precedent for doing so.
The right hon. and learned Gentleman also said that we would be deluged with applications—and that these applications basically will consist of applications to commit a crime. With all respect for the reasoning of the right hon. and learned Gentleman, I cannot follow it. Surely, the whole purpose of the majority Report recommendation that there should be applications is to decide whether the alleged offence was a crime or not; in other words, whether it was against the public interest or not. There is no question, in the face of the majority Report, of applications being made to commit a crime.
The right hon. and learned Gentleman also mentioned that the Sherman Act worked rather unsatisfactorily. The Sherman Act of 1890 was perhaps rather badly drafted, and that is probably the reason. It was the very first Act of its kind, but there is no reason why this House should not be able to draft a satisfactory Act. The Sherman Act, as amended by the Clayton Act of 1914, has worked very well in American industry, and there has been no question that since then restrictive practices have enormously decreased, and nobody can argue that it has adversely affected American industry.
America is now standing across the economic world like a colossus, and no country can make any important economic decision without deciding how it will be affected by the American 1978 economy. America, therefore, can hardly have been seriously affected by the Sherman Act, particularly as amended in 1914 by the Clayton Act.
A very important aspect of the matter is referred to on page 240 of the Commission's Report. It is made absolutely clear there that the Royal Commission did not find in any instance of all the multitudinous cases it investigated one restrictive practice which was in the public interest. It could not find that at all, and that was after a most careful investigation. Even the minority members of the Commission also appeared to be quite unable to put their fingers on any definite case in which it was in the public interest to maintain a restrictive practice.
It seems to me that there is a very strong case for applying really drastic action in completely prohibiting restrictive practices as defined in the Commission's Report. This decision is particularly important just now as we are facing more and more competition from other countries. We have been largely beaten by American competition in many commodities throughout the markets of the world, and we now find a rising competitor in Germany, which is producing very substantial competition for us. It is most important, therefore, that we should train ourselves down and strip ourselves like athletes, so as to get our economy into the best possible form to meet this real, dire competition that will threaten the standard of living of everyone in this country.
In conclusion, there is one point which is not referred to in the Report of the Monopolies Commission, and it is a question about a restrictive practice that might reasonably have been included. It is this question of collusive tendering. Though it was outside the terms of reference of the Commission, it is clearly a restrictive practice and one that is having a widespread effect throughout the country. Until a short time ago, I myself was a member of the London County Council, and a member of the Supplies and Finance Committees, and I was constantly struck by this unsatisfactory aspect of tendering as we met it there. We so frequently met suggestions that the tendering was not strictly fair and was not competitive.
1979 The President of the Board of Trade only recently received a deputation from the Association of Municipal Corporations which produced incontrovertible evidence that there was a very unsatisfactory position arising through what appears to be collusive tendering. I think that is a matter which the right hon. Gentleman would do well to consider in conjunction with the vexed question of restrictive practices.
The whole country will await the results of this Royal Commission's Report, because it is something of really fundamental importance to our economy and to our lives in the future, and I think that the President of the Board of Trade must come to a firm conclusion on what the Government must do. Are they going to offer what is largely a palliative, or tackle this by a well-planned but carefully-performed major operation? I think that the latter course is necessary. The whole country will wait to see whether the housewives are to have relief in their shopping and the people on fixed incomes and the old-age pensioners are to have lower prices. Industry, too, will wait before making its plans for the future. The whole country is waiting, and I hope that the right hon. Gentleman will meet the challenge.
§ 5.40 p.m.
§ Lieut.-Colonel Wentworth Schofield (Rochdale)
It is with very great pleasure indeed that I follow the hon. Member for Loughborough (Mr. Cronin). I am rather pleased to hear that he considers that the greatest or the chief business interest in his constituency is the Cooperative movement. As I happen to represent a constituency which was the home of that movement, I think it rather fitting that I should have the opportunity of congratulating him on what I consider to be a quite memorable maiden speech. He delivered it with confidence and without reference to notes, and has shown a complete grasp of the subject now under discussion. I can assure him that we shall all wait with pleasure and eagerness to hear further contributions from him to our debates.
I myself have taken part in the organisation and administration of minimum price agreements in the cotton spinning industry. Although the particular type of agreement is in the category of collective agreements on common prices and, as 1980 such, was not included in the Commission's terms of reference, I feel I should acquaint the House of my association. I think, also, that the House should know something about how these agreements originally came into being. When considering the majority Report, my mind was carried back about twenty-five years to the early 'thirties, when unemployment was rife and when many of these agreements which are now condemned were evolved.
At that time there was a general lack of trade, and in a mad scramble for such trade as was available price cutting was rampant in many industries. For instance, in the cotton spinning industry—of which I feel that I can claim a fairly extensive knowledge—the situation became so bad that cotton yarns and cloth were being sold at prices far below the cost of production of even the most efficient firms. Price cutting was carried to such an extent that such items of cost as depreciation and interest on capital were completely ignored. The need for providing for replacement of machinery and plant was no longer taken into account in the computation of selling prices. In the struggle to keep their mills running, manufacturers and spinners deliberately sacrificed the future of those mills to the needs of the present.
So intense was the price war at that time that firms found themselves actually giving away their capital with every pound of yarn or yard of cloth which they sold; as prices were forced lower, cloths became debased and the survival of the firms depended not so much on their own efficiency as upon the length of their purse. When, finally, they came to the end of their resources, as so many did, mill after mill was forced to close—many never to start again. I do not need to remind hon. Members that, as the mills closed, the queues of the unemployed grew longer and longer.
I do not know the precise definition of the words "public interest," but I would hardly think that the conditions which I have just described could be held to be in the public interest. Under such conditions it is not only the employer who suffers. The workpeople become unemployed. That means that they have no money to spend and the shopkeepers are also affected—and so is the general economy of the country. When it is finally decided what sort of tribunal is to 1981 be set up, I hope that great care will be taken in correctly defining what is known as "public interest."
It was against the background of those conditions that those who survived started to look to other methods for the marketing of their products. There is no doubt at all that it was the bitter experience of those days which caused this one-time fiercely individualistic cotton spinning industry to change its methods, and to become almost a pioneer in the art of collective selling. Indeed, so serious was the position that a combined approach was made by representatives of all sections of the cotton industry asking for Government sanction for price-fixing schemes. Those present who were hon. Members of this House in 1939 will remember that, on 4th August, 1939, Parliament passed the Cotton Industry (Reorganisation) Act. That gave power to the industry to implement schemes—one of which related to redundancy—as and when they were required. Another scheme was for the implementation of minimum prices.
That Act laid down that the schemes would come into operation three months after the passing of the Measure, but because of the outbreak of war the Act was postponed for use when peace returned. It was left to the President of the Board of Trade to determine on what date it should come into operation, but in 1947 the Act was repealed—I do not know why. From the Second Reading debate on the original Bill, it is rather singular to notice that its strongest support came from hon. Members on the other side of the House; and perhaps those who spoke mostly against it were hon. Members on this side.
The Bill received its Second Reading without a Division. In those days, there was no question of appealing to a tribunal for the cotton industry. The industry appealed to this House, which heard the case and sanctioned the carrying out of the scheme. I mention this merely to show that the feelings of hon. Members were not always as they are today, particularly on this thorny subject of price agreements. Circumstances certainly change the opinions of many people.
Nor must it be thought that it is only the employers who were in favour of these price-fixing schemes. I have here a report issued by the Amalgamated Association of Operative Cotton Spinners, 1982 one of the most important trade unions in the cotton spinning industry, in which they give their opinion on this subject of minimum price schemes which are operating in the cotton spinning industry at present. I shall not take up the time of the House by reading the report, but I have paraphrased it, and it amounts to this. They refer, as I have done, to the intensive price cutting and to the closing down of firms.
They also point out that at that time not only were dividends practically eliminated but the wages of the operatives were very severely reduced and the trade union funds were wholly used up in the provision of unemployment benefit for their members. The report concludes by saying that the experience must never again be repeated in the spinning industry, and because of that they feel that the scheme at present operating in the spinning industry should not be interfered with.
§ Mr. John Edwards (Brighouse and Spenborough)
Would the hon. and gallant Gentleman tell the House the date of that report?
§ Lieut.-Colonel Schofield
The date was 1954.
During the whole of the time that the Monopolies Commission has been in existence the country has been enjoying unrivalled prosperity and full employment, but many of the agreements which came into being did so in a time of slump. In the cotton industry, for instance, those agreements were born of adversity. They were in the nature not of profit-making instruments but lifebelts to prevent firms from sinking to destruction.
When reading the Report of the Commission, I could not help wondering what sort of report might have been made by the Commission had it been called upon to report in those days and in those conditions. I wonder whether, in face of those conditions, the Commission would have made such sweeping recommendations as it now makes for the general prohibition of these agreements.
§ 5.53 p.m.
§ Mr. Harold Lever (Manchester, Cheetham)
I suppose it is axiomatic that when merchants, manufacturers or traders band together in an association to fix the terms of their trade, whether it 1983 be prices or means of distribution and the like, they fall short in objectivity in deciding what is most in their interest and what is most in the community interest, and I suppose it must follow that where these restrictive practices, cartels and monopolies exist there are many instances where the public is the victim of gross overcharging.
This having been said, I want to say, without mincing my words, that I cannot join in the nostalgic hallelujahs which one hears from all quarters of the House at the idea of a return to unbridled competitive capitalism in trade. I go further and say that I am astounded to hear from both sides of the House perfectly normal and desirable trade practices being condemned as criminal in themselves, as opposed to the criminal abuse of them, as, indeed, there can be criminal abuse of any form of human behaviour.
I want to try to bring the House back to a sense of reason. These practices are not criminal, and the idea of the majority of the Commission in recommending that these should be made sweeping criminal offences has already been partly dealt with by the former Attorney-General, the right hon. and learned Member for Chertsey (Sir L. Heald). There is nothing primarily immoral, still less criminal, in members engaged in a trade seeking to fix the price at which their products shall be sold, provided that the price fixed is fair and does not abuse the public interest. How hon. Members can take the contrary view I do not know.
That is precisely what has been happening in our major industry today, agriculture, with the blessing of the House and a good deal of supporting legislation, not to mention a good deal of finance provided by Chancellors of the Exchequer of both parties. I should like to know therefore, whether, in turning this sort of practice into a criminal offence, the majority of the Commission would whip off to gaol all the Chancellors of the Exchequer who have been in office since I have been in this House, which is ten years at intervals. I have noticed Chancellors of the Exchequer of both parties financing the restrictive practices which we are urged by the majority of the Royal Commission to regard as criminal offences.
1984 While we are at it, I take it that we are going to lock up all the directors of British European Airways and British Overseas Airways because they have committed the atrocity, in common with every leading airway in the world, of signing the most complicated arrangements for the fixing of fares, terms of agency, terms of ticket issues, terms on which parties should be carried, terms of reduction and the like, with expulsion from the organisation of those who will not honour these arrangements. Why we should assume that these practices are of their nature evil, still more criminal, I know not.
It is perfectly obvious that nothing like decency in modern commercial life is possible, whatever view one takes, without a network of these arrangements. Not only must we refrain from putting them out of existence but we must recognise that the only sensible course is to preserve and encourage them on the one hand, while making quite sure, on the other hand, that they are not used to exploit the public.
Our economic thinkers, as always backing the wrong horse and out of touch with reality, are almost unanimous in their desire to bring this restrictionism, as they call it, to an end. They want us to return to the glories of a nineteenth century Liberal dogfight as if the world were not peopled with monuments to the results of the unbridled practice of free competition.
My views are not contradicted by hearing from my right hon. Friend the Member for Huyton (Mr. H. Wilson) the sad tale of the tea trader who was anxious to supply without profit all the needy old-age pensioners in his area with tea. All I can say is that I should like to know what many of my trade union friends in the House would say if some of their colleagues offered to do work for firms, for moral or other reasons, at half the wages ruling.
§ Mr. Lever
I am not suggesting that it would, but, obviously, it is wrong to argue that because a trading association refuses to allow one of its members to work for nothing, and thereby tend to undermine the business of his colleagues, it is doing 1985 something evil and criminal which should be spurned and condemned by all forward-looking members of the Labour Party. I have been a member of that party since I was a boy, and I am afraid that I cannot share the enthusiasm for supporting practices of that character; and neither, I think, would most working men.
The same applies to the tyre trader who wanted to bring down the cost of living by selling at cut prices tyres which he had contracted to sell at a fixed price. There was no other motive but to increase his profit at the expense of his colleagues in the trade. He may or may not, according to the facts, be undermining the possibility of his colleagues to earn a normal living by normal work.
It is up to the Government and to the Opposition to find a means of controlling monopolies and trade practices instead of condemning them in this stupid general way, because they are the inevitable accompaniments of any civilised form of commercial life. We have to ensure that they are not unfair to the public and that there is no abuse contrary to the public interest. No one has offered anything very constructive from that point of view.
It is unthinkable that we should create a criminal offence as suggested by the Royal Commission. This is one of the very grave difficulties in dealing with the matter. If one takes the view, as some of my hon. Friends do, that one must stop dealing piecemeal with the problem and, instead, apply a sweeping scimitar and create a criminal offence, it will affect most respectable persons who have been enjoying Government financial support for their practices for ten years or longer. It will undermine the basis of stability by which much has been achieved for industry and for workers.
Above all, one would pose an insoluble problem for the unfortunate judge who had to try the case. One cannot make restrictive practices a criminal offence without giving the accused the defence that what he was doing was not contrary to the public interest. It follows that judges in the High Court or tribunal presidents would have to determine whether or not a man should go to gaol on the basis of whether what he had done was or was not in the public interest.
1986 If I were the chairman of a tribunal I might have one view of what constituted public interest. My right hon. Friend might take a different view. What is certainly not in the public interest is that people's lives, liberties and personal reputations should be at the mercy of such a clash of divergent opinions on what is, after all, a matter of opinion and not a matter of established fact. It is out of the question for us to create a criminal offence of that kind.
It is equally begging the question for the Minister to come here and pile up a small mound of platitudes, lash himself into a meaningless peroration and then tell us that he has solved the problem, which is one of the greatest problems of modern economic life. That is not tackling the problem; it is running away from it. If the right hon. Gentleman seeks to comfort himself by the follies or lack of thought in the argument of those attacking the Government, he is not doing justice to the office which he holds.
It is for the Government to work out a means, unless they are to betray their Election pledges and betray the people to ruthless exploitation and abuse by monopolies. Instead of our having the collection of impracticalities promised in the speech of the right hon. Gentleman, the Government should bring in serious legislation. It is inconceivable that the country will be satisfied with what is, plainly, a blatant evasion of the problem. It is clear that the country will demand an account of the stewardship of the President of the Board of Trade in this very important matter.
I want to make one or two observations in order to elaborate the theme that reality is always a little more complex than the theories of economists. It is not always the case that price fixing results in extortionate charges to the community. Very often the contrary is the case. I dare say that in most cases a short-term greedy view is taken by associations, but I do not know. Nevertheless, I am aware of many specific cases where things have worked the other way.
For years after the war the motor trade association was pursuing a typically English commercial activity in hunting people down for paying too much for its products. It did its best to keep down the price of motor cars. The same thing 1987 was done by the virtual monopolists of one of the most precious of this world's liquids, Scotch whisky——
§ Mr. Lever
We also have Mr. Prain, probably the biggest semi-monopolist in the Rhodesian mines, who controls half the Rhodesian copper production, selling copper to manufacturers in this country at about £60 per ton below the London market price. He is a sort of Canute of the copper kings of Rhodesia. He is selling at £280 per ton when the world market price is about £350 per ton, which is a laudable effort. Therefore, monopoly does not always work in the one way.
Speaking from my experience in the constituencies, I am constantly tortured by the simplicity and child-like behaviour of many working people in relation to their commercial dealing. These people may be hard-working and very good at their own job, but they are very often like babes in arms in the hands of slick traders when it comes to buying household goods and the like. [HON. MEMBERS: "Slick lawyers, too."] They very often have to go to slick lawyers to help them out.
From my experience with my constituents in trying to undo some of the swindling, fraud and sharp practice from which they have suffered, I am convinced that the sharp practice that takes place is usually not in respect of price-controlled goods but dud carpets, dud textiles and the like. We are very sophisticated and doubtless know whether a shirt is a good value at 30s. or 50s. Many people do not; they are not in a position to judge the value of carpets and shirts.
Having branded goods, price-fixing and price-maintenance arrangements very often works to the advantage of the ignorant, for they then know what they are getting and they often know that they are, at any rate, getting some sort of value for their money. This does not mean that the people are not being overcharged, but these things do not always work one way.
We appear to be up against quite insuperable difficulties in operating either the scheme propounded by the Govern- 1988 ment or the criminal proceedings propounded by the Opposition and the Royal Commission. I should like to offer, very tentatively, what I consider to be the general principles of a remedy.
The first thing is that most of the problems can be tackled by sharpening our fiscal weapon so that excessive profits can be dealt with. It is not an easy matter to work it out. The second thing is that we should clear from our minds the kind of nonsense that we have heard. I gathered from the admirable maiden speech of my hon. Friend the Member for Loughborough (Mr. Cronin) that at some point in the Report of the Royal Commission, or a Report by another Royal Commission, it was said that there is not one restrictive practice which has proved to be in the public interest. That is patent balderdash. Any body of men surveying modern industry in this or any other country who can propound such unadulterated nonsense disqualify themselves at once from being counsellors in the matter.
The House should look at this matter again very carefully. As a Socialist, I believe that the remedy for overcharging and abuse of monopoly practice or price-fixing arrangements will very often lie in the direction of public ownership.
§ Mr. Lever
It appears that I have wasted a great deal of the time of the House because hon. Members opposite have not appreciated the purport of my remarks, which is that monopoly practices are often perfectly all right, necessary, desirable, civilised and modern, provided that they are used not for the exploitation of the public but for preserving decent working and trading conditions. That is what we must ensure.
It has not by any means been proved that unbridled competition accompanied by the bankruptcy of marginal producers and the paraphernalia of thumbscrew Liberalism is even economically advantageous, except, perhaps, to the satisfaction of the economists who, as I have said, are almost always wrong. Every time there is unbridled competition we get the kind of thing quoted by the hon. and gallant Member for Rochdale (Lieut.-Colonel Schofield), who spoke about the fine spinners.
1989 Very often at times of crisis people take the short view, and the weaker man has to sell out, often at destructively low prices which undermine the stability and basis of the trade. That sort of thing has to be guarded against. For all I know, the fine spinners' agreement may be a fraud on the public. I do not know, but I know that there is every justification for a fine spinners' agreement. Whether the present prices fixed are right or not I am not in a position to say, but the Government could find out. I am all in favour of a fine spinners' agreement to prevent the trade being wrecked.
When people cite the progress of America I remain coldly unimpressed. I want more goods and material things to enlarge human happiness and not to make people the slaves of an anxiety-ridden system where everyone lives under a ruthless competition with no sort of protection for anyone and where the human decencies do not apply. I am prepared to have a dish of herbs where there is peace rather than a fatted calf where strife prevails and no man knows whether his job is safe.
Subject always to the necessary steps being taken, instead of the bluff and platitudes to which we have been treated I am in favour of restrictive practices. I am in favour in most cases of monopoly practices. I am in favour of decency, order and accommodation rather than a return to the law of the jungle, which has done so much to disfigure our lives and our country in the past and is likely to do so again if we go back to that law.
§ 6.12 p.m.
§ Captain Charles Waterhouse (Leicester, South-East)
The hon. Member for Cheetham (Mr. H. Lever), who addressed the House so admirably, in his last few sentences made clear his attitude, which was not very clear before. He referred to the proposals of my right hon. Friend as being "a collection of imbecilities," to the Report as being "patent balderdash and unadulterated nonsense" and other parts of the suggestions as being connected with "a thumbscrew Liberalism," but, generally, I believe that when he considers what my right hon. Friend said this afternoon he will find that those suggestions are not very far away from those suggested by the hon. Member for Cheetham, just as I believe that my hon. 1990 and gallant Friend the Member for Rochdale (Lieut.-Colonel Schofield) will approve of those suggestions, also.
This is an extremely difficult subject. It seems to me that my right hon. Friend has to try to get all the skill of a surgeon. He has to cut out the bad, cankered parts and preserve as far as he can the health of the patient. The bother is that this is an operation in which he can administer no anaesthetic. Worse still, the operation has to be done in public.
My hon. and gallant Friend the Member for Rochdale gave a short account of the history of these proposals. I would remind the House that within the memory of many of us in this House these very practices were commended from these benches and re-commended from the Opposition benches under the pleasant name of "rationalisation." Rationalisation schemes during the 1930s were extremely popular. I believe that the benefits which certain industries got under the Safeguarding of Industries Act were made to hinge on whether or not they had rationalised their industry. So we ought not to be too sweeping in our condemnation but look at each of the industries concerned with very great care.
Let hon. Members opposite remember that although some of these proposals have undoubtedly increased prices, and profits, others have definitely held prices, have even decreased them. They should remember especially that all these proposals, I think without exception, are as much to the benefit of the workers in the trades as to the shareholders and owners of the industry. In times of acute depression schemes of this sort are apt to fail and in times of great prosperity they are not needed, but in normal times, when trade is on a fairly level keel, there is great value in many of these trade agreements.
I would also remind the House that, in spite of the fact that this Commission sat for two years and invited representations to be made to it from all sources, it had only 90 representations from any sources, from industries, from persons, from those who generalised and those who took a political view. Only 90 people took the trouble to send in complaints, if we put it that way.
§ Mr. Percy Daines (East Ham, North)
Is the right hon. and gallant Gentleman 1991 satisfied that there are not many businesses and concerns which were afraid to come forward? I can assure him that in the Co-operative movement we had the greatest difficulty in getting some societies to come forward and give evidence for fear of having their supplies withheld.
§ Captain Waterhouse
If the hon. Member means that Co-operative societies were afraid to come forward I should be extremely surprised. One of the greatest industrial movements in the country, one of its greatest retail organisations, afraid to come forward because it will be blacklisted by a manufacturer? I should be very surprised indeed.
§ Captain Waterhouse
I should have thought they would welcome it as an additional reason for expanding their wholesale trade in that direction. I am perfectly certain that that is not the reason why there were so few complaints to the Commission. The reason was that, generally, the trading community as a whole does not find these restrictions nearly as injurious as one is apt to think.
I wish to commend what my right hon. Friend the President of the Board of Trade said about registration. I am sure that he is absolutely right about getting a general registration. There is no secrecy about these agreements and there should be no difficulty about getting them registered. An agreement is best negotiated in private. When it is established let it be published and I am sure that nothing but good could come out of publication.
There seem to be three main points for decision. The first was dealt with by my right hon. Friend to a certain degree and I do not altogether agree with his conclusions. It is that we must decide who is to be allowed to object. At present, the objection must come from the Board of Trade. My right hon. Friend suggested a tribunal which would object, and apparently judge at the same time. That I do not like.
1992 I should leave the power of objection with the Board of Trade, but I should widen it. I should let any trader come in and object. I should let any consumer come in and object. Anybody with a definite interest I should allow to come in and object, but I certainly should not allow objections open to any theorist who merely thought that rings were a bad thing and, therefore, he was objecting on what is called principle. Principles are the basis of our political life, but this is the application of a principle and we must assure ourselves that the objections made to these practices are practical suggestions.
The second point is that we have to decide the grounds for objection. My right hon. Friend made certain suggestions. I do not think it is impossible to get a set of rules on which we could work. I am told that for 150 years or so, before the Commission was thought about, the courts used to decide these cases and there is quite a body of case law which could be reviewed and perhaps utilised. Section 14 of the Act lays down certain definite rules and my right hon. Friend has, at the Board of Trade, many active young men who could think up plenty of rules. He may have, I hope, a certain number of wiser, older, civil servants, who could go through those suggestions with a red pencil and scratch most of them out. Finally, the abbreviated list should come to my right hon. Friend, and I believe that, in consultation with his Ministerial colleagues, it would be possible to get a code of rules which would operate usefully and smoothly.
The third point is, who is to judge? My right hon. and learned Friend the Member for Chertsey (Sir L. Heald), the former Attorney-General, has spoken on that subject and I entirely agree with him. I am in dread of setting up another tribunal. In no way am I disparaging those ladies and gentlemen who work on these public bodies, but it is quite impossible to get anybody who does not have a bias. If people are politicians, they most certainly have a bias. It may be a very healthy bias, I agree. If they are traders or are in commerce, they are sure to be biassed. If they are trade unionists they will have another bias, and if they are economists they will have the biggest bias of all. If one goes into the outside world to get people, one is almost bound with them to get a bias.
1993 There is, however, one section of the community which is regarded in its functions as being above bias and above complaint. I am referring to the judiciary. I am quite sure that it would be possible to get a panel of learned judges who could and would specialise in this matter, just as judges specialise in other matters, who would deal with each case as it came up on the rules and who would themselves form a body of case law as time passed, possibly expanding and possibly contracting in some directions in which they would use their discretion.
Those are the main points I wanted to raise on this issue today, but my last point I believe to be the most important and I shall refer to it briefly. I believe that this set of restrictive practices, important as they are, are comparatively small in importance compared to the much wider restrictive practices on what has been called "the other side of industry." The examination of those was expressly excluded from the Report. There has been built up by the trade union movement, properly at the time they were built up, a whole mass of rules and regulations to protect the worker against the employer. They were absolutely right at the time they were initiated. Today, I believe, many of them have outgrown their usefulness, and I hope that the time will come when, if possible in consultation with the great trade unions, my right hon. Friend will be bold enough to examine this other side. Then, and then only, can we hope that British trade may be free from the most objectionable practices which now exist.
§ 6.25 p.m.
§ Mr. R. T. Paget (Northampton)
I find some difficulty in accepting either the majority or the minority Report of the Monopolies Commission, because it seems to me that both of these Reports are based upon two primary fallacies. The first of these fallacies is the assumption that prices today are generally fixed by competition. They are not. The second assumption, which seems to me to be even worse, is that it would be a good thing if prices were fixed by competition.
Over the great field of our prices, starting with agriculture, fuel and steel, and moving into the realms of engineering and of all our great industries, prices are fixed not by competition. They are not fixed 1994 by the buyers. They are fixed by the sellers, and they are fixed either by large monopolies who have gained sufficient control in their fields to become price leaders or by trade associations, fixed upon the basis of what is deemed to be a fair price. Whether the right people decide what is a fair price is another matter, as to which I shall speak presently, but that idea of the fair price is the basis of pricing in the overwhelming field of our economy today.
The idea that that is not the right thing to do is an idea of morality which occurred only in the nineteenth century. Up till then, every church regarded price fixing by competition as a sin. The idea that prices should be fixed by driving the marginal producer into bankruptcy was an idea which every church, up to the nineteenth century at any rate, regarded as fundamentally contrary to a Christian's views. I believe that they were right in so thinking. I believe that the medieval conception of the fair price which has come back again into the whole field of our economy was the right one and the moral one.
Having said that, I would add one other thing. Stalin in his "Political Testament" started with these words:It is the nature of capitalism and the condition of its existence that the capitalist should not merely seek profit, but the maximum possible profit.Then he proceeded to argue, with impeccable logic, that it was unnecessary for the Soviet Union to take action because the working of that system would inevitably break itself to pieces within a few years. If his original premise were right, I entirely agree with his argument. The reason I believe that we shall prove Stalin to be wrong is quite simple; that we have got away from the price competition as the means of fixing our prices and have achieved a system which gives us a vastly greater stability.
It was said that the last Election was rather dull because there was no great conflict between the parties. That was deplored, I think, by a great many people on both sides of the House. I do not deplore it. It would be difficult to define a good community better than saying it is one which has two parties which will provide alternative Government and which are broadly in agreement on the general lines on which a country ought to be 1995 governed. That is something which, very largely, we have achieved here in England.
I should say that that is true for this reason, that in the Tory Party and in the Socialist Party we have two parties which fundamentally believe in a peaceful and an ordered society. It is a different ordering in which we believe. We on this side believe in an egalitarian society, they, on that side, in a less egalitarian society; but, none the less, a society which is ordered——
§ Mr. Paget
—a society which has security and a sense of responsibility. [Laughter.] It is all very well for hon. Members to laugh at these things, but let them consider the things we have stood for and worked for and which, in five years of Government after the war, we created.
That is the society in which we are living. It is a society which attempts to achieve within our social and industrial organisation the most complicated, the most unnatural and the most difficult of human relationships: peace. I believe that we have achieved a larger measure of peace within our society here in England, political peace, industrial peace, than any society has ever enjoyed before. That has been the work of the two great parties in this country since the war.
As against that, the Liberal conception is the conception of war in the economy. How can we have an ordered society, which the two great parties desire, if we throw our production open to a price competition which consists of bankrupting the marginal producers and forcing them out of production? A society which does that cannot be a peaceful society. I feel that it is the influence of the infiltrators from Liberalism within both our parties who have too much to say on these occasions.
I believe that our British system is a good system. I think that we have achieved a far better society than any community has yet achieved in our human history. Consider the Americans. They have certainly achieved a higher production, but, as my hon. Friend the 1996 Member for Cheetham (Mr. H. Lever) put it, at the cost of—I believe it is statistically true—of causing one stomach ulcer in three among the male population in the northern States. We proceed to move more leisurely. We look at the Americans and say, "Children run, but adults have the sense to walk." I do not want this feverish activity, which this new competition may induce us to adopt. The Tory Government hand out to us as an objective a calculation that we may double our productivity in twenty-five years. As far as I am concerned, I do not mind if it takes fifty, but I certainly do not want that increase of productivity to be made at the cost of Americanising our society.
These practices have grown. They have grown as our industries have developed. On the whole, I am in favour of the things that have grown within our society. They have grown because the people in those industries found that they were for their mutual comfort and good, and enabled them to live at peace with one another. I do not want to upset them indiscriminately. We need to look at these things carefully, and to look at them not from the point of view of putting the clock back, and least of all from the point of view of upsetting that level of peace which we have achieved, and which is so precious, and of casting us back into the conditions of the nineteenth century.
Prices ought to be watched and controlled in the national interest, but the suggestion which the President of the Board of Trade has made of a court or tribunal is a piece of sheer hypocrisy. There is no justiciable issue here. How will a tribunal decide what the public interest is? That is the very job of the Government to do themselves. All retail prices fixed by the manufacturer, whether by agreement or not, whether under a trade mark or not, should be submitted to the Board of Trade with a cost certificate of the cost of production of the goods. Let nobody mark goods with a retail price unless he has had that price thus scrutinised.
The price-cost certificate is in existence. It is necessary to enable the producer to make his price. It should go to the Board of Trade, and the Board of Trade ought to consider it, to see whether the price is reasonable, whether, for instance, it contains too much for advertising and should 1997 have power to control the price if it is not. The Board of Trade ought to have the power, on considering a cost certificate, to make further investigation into the costs if necessary, and power to exercise control, if we are to work not on a competitive price but on a price which is settled, not by the buyer, but by the seller—which is how most prices are fixed today. The public has an interest in that price, and that interest must be guarded. That is what we have a Government for.
§ Mr. Osborne
Does the hon. and learned Gentleman really think that there are or could be at the Board of Trade men better qualified to look through production costs than the men in the industries themselves? Does he think that the Board of Trade could do the job better than the men in industry themselves? If he does, he really does not know much about industry.
§ Mr. Paget
I am not saying that they could do better, but that they could do it in a different interest. A manufacturer prices his goods in his own interest, and since he maintains that price the public has an interest in the costings. The Board of Trade is quite capable of considering in the public interest the cost certificate which the manufacturer will have brought out, and of seeing how it is made up. and whether the price is fair to the public. That is the way it ought to be done.
§ 6.38 p.m.
§ Squadron Leader A. E. Cooper (Ilford, South)
The hon. and learned Gentleman the Member for Northampton (Mr. Paget), I believe, practises at the Bar—I hope, successfully—but it is quite obvious that his ignorance of industry is abysmal. The proposal which he has just made is nothing more or less than the old cost-plus. Anybody who has had any experience of working with a Government Department on a cost-plus basis knows the inefficiencies of that system. I hope that we have long since passed the day when we need to return to that sort of system.
§ Squadron Leader Cooper
I understood that, but, obviously, if the cost is to be submitted to the Board of Trade then the selling price also must be submitted, and it will then be for the Board of Trade to determine the difference between the selling price and the cost. In other words, the Board of Trade will determine what the profit is to be, and I believe that that is cost-plus.
The debate has become very interesting. We have on the Order Paper an official Opposition Amendment calling upon the Government to take certain action. If I may say so, the speech which made most sense today was that of the hon. Member for Cheetham (Mr. H. Lever).
§ Squadron Leader Cooper
We shall all be interested to see how the hon. Member for Cheetham votes tonight. I would suppose that after the speech he has made he will either abstain on the official Opposition Amendment or come into the Lobby with us.
§ Mr. H. Lever
The hon. and gallant Member has been kind and courteous enough to say that my speech made good sense, but as he attacks the Opposition Amendment and the Government Motion I shall also be interested to see how he votes.
§ Squadron Leader Cooper
Perhaps the hon. Member will do me the courtesy of listening to me until I end my speech. He might then have some idea of what I propose to do.
I would hope that the kind of approach which the hon. Member made to this problem of restrictive practices would be the approach which the House as a whole could make, for it really is beyond the realm of party politics. First, we have to consider the type of monopolies which exist in the country—and they do not all exist on one side of industry. There are certainly very many monopolies on the manufacturing side. I wonder whether my right hon. Friend the President of the Board of Trade has any idea how many registrations are likely to flow into the Board of Trade once legislation to deal with this matter is passed. I would hazard a guess that there would be certainly more than 10,000. If the President is prepared to assure the House that 1999 more than 10,000 agreements—and I put that as a very conservative estimate—can be dealt with quickly by a tribunal I hope that I shall live to see it done.
§ Squadron Leader Cooper
In a moment.
I should like us to be a little clearer on what constitutes a monopoly. I have heard hon. Members opposite refer to I.C.I. as a monopoly. It has become almost a fetish with hon. Members opposite to speak in the House and on the public platform about I.C.I. as if it were something vicious. The monopoly which I.C.I. has in the chemical industry exists only in a number of products. It exists in products which are generally sold in such large quantities and at such a low price that it would not pay anybody else to enter into competition with the I.C.I. This is certainly the case with such things as caustic soda and chlorine. There is no monopoly in the sense that nobody else can produce these things.
§ Squadron Leader Cooper
It is true that I.C.I. has almost a monopoly interest in Terylene, but it certainly has not in nylon.
§ Squadron Leader Cooper
Yes, for a certain number of years, but nobody would suggest that those patents which I.C.I. has properly acquired, very largely as a result of its own research, are something wrong in themselves. In fact, the research which I.C.I. has done over many years has added enormously to our economic strength. Instead of criticising I.C.I., hon. Members opposite should be very proud that this great company operates in this country.
I want to get this question of what is a monopoly into correct perspective. There are various types of monopoly, some good and some bad. As to the trade union side, we must not forget that if it is right for a man to unite with other men to determine the price at which his labour should be sold, it cannot be wrong for a manufacturer of a product to determine 2000 the price at which that product should be sold. But we have to control both these things; otherwise, both get out of hand and the economy of the nation suffers in consequence.
My objections to some of these trade practices are very precise. If I may say so, I speak with a little authority, because for some years I was associated with a company which was itself a member of a trade association which fixed prices. Then the company with which I am now associated decided that it would have nothing whatever to do with this price ring, with very considerable effects on the price of the product in the country. I believe that a price ring, that is to say, a collection of firms which join together to fix the price at which they should sell to the manufacturer, is wrong and is contrary to the national interest. I believe it to be wrong because selling prices in the main are fixed on the costs of the least efficient producer in the group, and that cannot be right in the national interest.
§ Mr. Charles A. Howell (Birmingham, Perry Barr)
So we shall see the hon. and gallant Member in our Lobby after all.
§ Squadron Leader Cooper
I wish the hon. Member would try not to be facetious. This happens to be a very serious debate affecting the life of the country. I hope that the hon. Member will have something constructive to say before the debate is over. We shall be interested to hear it.
I believe individual resale price maintenance to be in the best interest of the country. I believe that the National Union of Shop, Distributive and Allied Workers approve of it. It creates a situation of stability for shopkeepers and assistants and permits a decent standard of living for them, but I believe that collective resale price maintenance is wrong. I think that if one has a body of firms which together determine the price at which a product shall be sold and that if the buyer breaks the rules laid down by the association he is put on a stop list and virtually has his livelihood taken from him, that is morally wrong. That is why I profoundly oppose the practices of the British Motor Trade Association and like bodies. The existence of what had been called "Star Chamber" courts and similar bodies are wholly repugnant to the people of this country.
2001 Paragraph 268 of the minority Report states:Much of the public uneasiness on this matter arises from a feeling that the recalcitrant trader is made the subject of some sinister 'Star Chamber' procedure. We do not think that uneasiness on this score is well-founded. The 'Star Chamber' notion arises from the existence of informal tribunals where the trader is given a hearing before any decision to apply sanctions to him is taken. Where such tribunals exist, the evidence goes to show that considerable trouble is taken to ensure that their procedure is fair and in conformity with the law.I submit, with all respect, that that begs the whole question. It is not a question whether the proceedings at the courts are fair, but whether it is right or just that the courts should exist at all. That is where, quite frankly, I join issue with a number of my hon. Friends.
Somehow—and I do not profess at this stage to be able to offer any clear solution to the House—we have to create a system of orderly marketing for our goods in this country. But we have to create such a system in order to secure stability in our economic life and to secure the wages and salaries of our people. But in creating that system we do not need to create a Frankenstein monopoly which, in the end, will crush our economic life rather than develop it.
It has been said this afternoon that many of these practices in industry developed between the wars, when there was great unemployment. It is true, but it is equally true of the restrictive practices which exist in the trade union movement. These practices were created at a time of great unemployment, when men were seeking means whereby they could keep themselves in a job. I do not blame them for that, but we have to face the fact that this year, and for as far ahead as we can see, there is likely to be no unemployment. Therefore, there must be a complete reorientation of our thinking, both on the management plane and by the workers. This is not a party issue. There cannot be anything more fundamental to the future of our country than to seek and find a proper solution to this great problem.
I think that the proposal of the President of the Board of Trade to create a tribunal and, at the same time, to register these practices is good as far as it goes. I am not myself yet satisfied that this procedure will be quick enough to deal with the problem as a whole, and, having 2002 regard to the fact that there are certain practices named by both the majority and the minority Report as being contrary to the public interest, I should like to see such practices scheduled in the proposed legislation. That in itself, I believe, would eliminate many of the undesirable practices which are operating at present and it would certainly do a very great deal to speed up the process of control.
Undoubtedly, this is an issue which excites the public imagination and it is a matter to be dealt with urgently. I am not suggesting for one moment that we must deal with it along the lines of the United States or of Canada. Our approach to our industrial problems here is very different, but the man in the street, the man at the bench, the housewife, everybody in our industrial life, must be shown by action in this house that we intend to take this problem seriously; that we propose to take action which will drive out many of these undesirable practices from our industrial life, and that there is good faith on both sides of the House for an endeavour to seek a proper solution to this great problem.
§ 6.55 p.m.
§ Mr. Donald Wade (Huddersfield, West)
During this debate there have been several references to the expression "a new criminal offence" used in the majority Report. I hope hon. Members will not condemn the majority Report outright merely because of that expression. I will, if I may, refer to it in a few moments and express my own views on that particular aspect of the Report.
It is exactly 110 years since Disraeli said:The right hon. Gentleman (Sir Robert Peel) caught the Whigs bathing, and walked away with their clothes.Since then it has been a popular political pastime to steal the clothing of the Whigs and the Liberals. I have no objection to that. We always have other good clothes in our cupboard. I was hoping that I would be able to rejoice today at the sight of the right hon. Gentleman the President of the Board of Trade unashamedly wearing Liberal clothes, and I should have urged him to go on wearing them and to resist all attempts at persuading him to discard them. But I have some doubt about it now, and I gather from many of the speeches during this debate that a number of hon. 2003 Members on both sides of the House are rejoicing in the fact that the right hon. Gentleman is not wearing Liberal clothes.
I am quite convinced that this is a Report of great importance. I appreciate that the problem is a difficult one to tackle, but I believe if we could start now on the dismantling of this very elaborate system of restrictive practices, which has grown up during the last 25 years, we should be taking a step as important as the decision of Sir Robert Peel to repeal the Corn Laws. Who the modern Sir Robert Peel will be, who will follow him, and who will be left behind I do not know. That is a matter for speculation and for the future.
The problem that we have now to decide is what action to take upon this Report which has been prepared with great care by the Monopolies Commission. I agree with the right hon. and learned Gentleman the Member for Chertsey (Sir L. Heald) that one has to try to look at this dispassionately, and I have examined it from three angles. Firstly I have tried to get the Report in the right perspective; secondly, I have tried to consider what is the underlying purpose of any legislation that may flow from its recommendations; and, thirdly, I have considered what steps should be taken to implement them.
Firstly, on the subject of getting the Report into the right perspective, I agree with the "Economist" leading article of 2nd July—I do not always agree with the "Economist," but on this occasion I do—that the majority Report is a restrained and sensible document. It is absolute nonsense to talk, as some have done, about unrestrained competition. It does not, as the "Economist" points out, espouse the cause of cut throat competition. It is, however, a bold document, and it has been fairly and clearly presented.
Like the right hon. Gentleman, I am glad there has been a majority and a minority Report. It helps us to see both points of view, and I also agree in one other respect with the right hon. Gentleman that there is something to be said for registration. I will come to this in a moment or two, because I am anxious to cover this vast subject as quickly as I can. During the last debate 2004 on this question I broke a resolution I had kept for over five years of never exceeding twenty minutes in a speech.
The Commission has been restricted by its terms of reference. In many respects the recommendations of the majority Report are similar to the recommendations of the Liberal Committee which reported in 1945. The differences are largely due to the fact that the terms of reference of that Liberal Committee were very much wider. On this occasion the Commission was limited in its inquiry, and it has clearly kept within its terms of reference. It has dealt with methods of enforcement, but it has been precluded from considering whether or not certain rules which are thus enforced are or are not against the public interest. A subject that certainly calls for investigation is the effect of these rules themselves as opposed to the methods of enforcing them.
I am aware there has been a general reference to the Commission on the subject of level tendering. I do not know the terms of reference. I do not know how much ground they will cover, and whether they will cover the whole subject of common prices, but it will be a useful investigation and I shall be glad in due course to hear the precise terms of reference. I do not know whether that investigation will cover pre-arranged, uneven tendering or, as it is sometimes called, "collusive tendering." That occurs where manufacturers or contractors agree to parcel out contracts, with one quoting one price, another a higher price and others varying prices in order that the manufacturer or contractor selected gets the contract whilst giving the impression of genuine competition which does not exist. That also should be examined. Again it would be useful to have an inquiry into the effect of Import Duties since 1931 in so far as they encourage or facilitate the growth of restrictive practices. This, of course, may involve legislation to alter the powers of the Commission.
It is clear that all the ground has not been covered by this Report, and the conclusion I draw from that is not that we should delay putting the recommendations into effect, but rather that we should regard them as part of a long-term policy, and, unless we start boldly, I am afraid we may fail in our endeavours.
2005 As to the underlying purpose of any legislation that may be required, it will not be merely to eradicate certain practices which are contrary to the British sense of justice or because certain things have been done which offend British ideas of what is fair or which interfere unduly with personal liberty. We do not want merely to bring down prices, although if the recommendations were carried out they might have that effect. The real purpose is to alter the climate of restrictionism which has prevailed during the last 25 years. That must be the object of Government policy, namely, to encourage not merely private enterprise, but genuine private enterprise, with all that this implies.
To quote the "Economist" once more—I apologise for doing this so frequently—it is important that the Government, in considering the proposals put forward, should remember that "the purpose of an industry" is notto provide a fixed number of people with a fixed pattern of jobs at an accustomed and invariable standard of remuneration.I believe we have a great opportunity, just as I believe that a great opportunity was missed in the years between 1945 and 1950. That was the time, when we were moving out of the war-time era into one of greater freedom, when conditions should have been laid down under which private enterprise would operate beneficially for the consumer. Because freedom does not just happen; it is just as important to plan for freedom as it is to plan for control and restrictions.
That is the purpose of the operation. What are the first steps that should be taken? As I said earlier, there is a case for registration and publication, unless it is shown that the administrative difficulties are too great. The value of legislation is to turn the light of publicity on to these agreements. It could be done quickly. It might be coupled with general registration of trade associations, with a provision that any alterations in their rules be recorded annually. It would assist the public in considering whether the rules of those trade associations conform to the law. I am not satisfied, however, that the proposal put forward by the right hon. Gentleman would succeed owing to the great difficulty of the time factor, and for that reason I believe there will also have to be some alterations in the law.
2006 The registration of restrictive agreements might bring some surprising things to light and might give the public some shocks. On the other hand, it is not fair to suggest that all firms engaged in either manufacturing or distributing are in favour of collective discrimination and of the various methods of collective enforcement mentioned in the Report. As an illustration, may I give the point of view expressed by the Branded Textiles Group, which states specifically that the group—has no collective price-fixing or any kind of collective enforcement.…That view is held perhaps more widely than the public appreciates, and I do not believe that industry as a whole supports the kind of practices which have been elaborated in the Report. Nevertheless, I am in favour of registration and I do not believe that the trade associations would object to it.
I am a little puzzled by the official Opposition Amendment, which calls for the registration of all collective agreements that provide for the regulation of production and trade. That is extraordinarily wide and would cover all kinds of agreements between employers and trade unions. I do not know whether that is intended, but I should have thought it would have been dealt with separately.
§ Mr. H. Wilson
If I may interrupt, I thought I made it clear that I was making the same point as the hon. Gentleman made a few moments ago. It was that the Report was made on narrow terms of reference. We would accept legislation to make certain things illegal which were dealt with in the Report, but the proposal for registration was made in order to deal with a far wider type of topics not covered in the Report.
§ Mr. Wade
Well, I must hasten on. I think there is a case for altering the civil law. The hon. and learned Member for Middlesbrough, West (Mr. Simon) will appreciate that where firms combine together to force another firm out of business or otherwise to damage its trade, the test should not be the object in the minds of those who combine, but rather the natural and probable consequences of the act. That would involve an alteration in the law as laid down in a House of Lords case.
2007 Finally, we have to face up to the necessity for making certain methods of enforcement illegal—as I am limiting my remarks to this Report. The term "criminal offence" has aroused much feeling, but we should not worry too much about it. When we come to ensuring that the new law is not broken I believe that the injunction would be the better method of carrying it out. The point is, is it necessary to make certain methods of enforcement illegal? I believe it is. There should be an escape clause, of course, but we must ensure that this is not so wide that the new law is of no effect.
I am convinced that something drastic must be done. It will not lead to the wild cut-throat competition referred to, but it will be part of an essentially long-term programme. I believe that it will be a major and a difficult operation but, if it is carried out firmly and resolutely, in spite of the storm of criticism that may be aroused, it will not only have far-reaching but beneficial effects on the British economy.
§ 7.10 p.m.
§ Sir Ian Fraser (Morecambe and Lonsdale)
I declare an interest in certain companies which practice various kinds of price maintenance. The hon. Member for Huddersfield, West (Mr. Wade)—the only Liberal, I think, who has spoken—nearly made me cry when he showed concern about putting people out of business. I was under the impression that the Liberal Party spent most of its time trying to put us or hon. Members on the other side out of business. What he wanted the House to do was to undertake a drastic surgical operation. I have heard those words two or three times today. I do not recommend drastic surgical operations to my friends when they are in fairly good health.
It seems to me that this country is doing pretty well with a higher standard of living than in almost any other country this side of the Atlantic. With a higher standard of living than we have ever had before and with a wider distribution of wealth and employment than we have ever enjoyed before, I do not think this is the time for drastic surgical operations.
I support the Government because I think that their proposals are less dangerous than those of the Labour Party's 2008 Amendment, and less irrelevant than those of the Liberal Party. I am bound to ask some questions and to make one or two criticisms which, I hope, the President of the Board of Trade will answer and bear in mind. In passing, may I say how ably and competently I thought my right hon. Friend discharged a most difficult task?
What is the public interest? Is the public interest what a number of academic gentlemen on a tribunal think it is, or is it the full employment of our people and increasing standards of living and wages and profits? Let us bear in mind that, without increasing stable and good profits, there cannot be full employment or new industry or new development. What is the public interest and by what standards is it to be judged by the tribunal? That is my first question, and a lot depends on the answer that is given.
It is said that restrictive practices of various kinds and trade agreements of various kinds raise the cost of living. Of course they do. So do the arrangements made by A.S.L.E.F. to have special rates for drivers. So do the demands of the miners that coal should be sold at the economic price. So do all the arrangements whereby doctors are paid and the health services run. The hon. and learned Member for Northampton (Mr. Paget) was not far wrong when he said that a great part of our economy is based upon agreed and arranged prices and wages and so on. Is it really disadvantageous to have steady employment, good profits, good wages and salaries, and an improved standard of living? I think that is a good thing. We need to be very careful before we monkey with the system that has given these things to us.
Much is said about the housewife, and tears are shed for her as if she were the only spender of money in the shops. But she is not that at all. She is a partner with her man in the business of making a living. She helps him to go out and make a living, encourages him, feeds him and looks after the house for him. If it were not for the high employment and good wages which he enjoys and brings home, she would not be as well off as she is. If she has to pay a little more for the certainty of employment that her husband enjoys, and if her cost of living has gone up, so has his standard of living. That should not be forgotten either.
2009 The President puts the onus of proof on to industry. That means that at a certain date certain practices will be said to be illegal, or at any rate immoral, and possibly whole series of agreements or practices will be said to be ultra vires and the manufacturer or and industrialist will have to go to the tribunal to make out his case. The onus of proof is on him. How can he prove that a product which he has in mind will prove to be in the public interest? It may run him into bankruptcy and disaster because he is backing the wrong kind of invention. On the other hand, it may lead to a tremendous boon for a large number of people because a lot of money will be made for him, for those who back him, and for all those he employs.
There may be a young Lord Nuffield up and coming—who knows? He may say. "When I start distributing my motors I want the chap who sells them to understand them. Therefore I am going to limit my sales to half a dozen men at the start and then perhaps later on increase them to 60 men who will really know the car and be able to drive it around and work it." But that will be a restrictive sale. If young Nuffield had gone to such a tribunal, it might have said, "This is a horseless vehicle that we have never seen before, and the restrictive arrangements you have in mind are not in the public interest." How could such a tribunal foresee what was to happen 40 years later with hundreds and thousands of people enjoying motor cars? I hesitate about putting this onus of proof on the manufacturer.
The President says that he is going to approve of individual price fixing. If that means all the way up through—the factor, the wholesaler and the retailer—I am very glad to hear it. He says that he will introduce a clause which will enable such an individually made price fixing arrangement to be taken to the ordinary courts. I am very glad of that. It will make it very much easier to enforce it legitimately, properly and openly than any of the more difficult methods now being used. If he is careful in what he does, he may not upset so many people or our trade as much as at first I feared.
Does the House know that there are 400,000 or 500,000 points of sale in this country—that is retail places where goods 2010 are sold? I know of two or three firms which have 200,000 or 300,000 points of sale. They cannot make 200,000 or 300,000 separate agreements, so they make an agreement with an association.
If one firm makes an agreement with 300,000 retailers through an association which represents one-half or one-third of them, and it enforces it by making the price run with the goods and by going to the courts and that is to be allowed, that is not so bad. That will enable a number of businesses which I know to go on making money. I hope that the President will make some of these points clear. At any rate, let both sides of the House beware lest this tampering with freedom of agreement between individuals leads us into all kinds of difficulties in the future.
Let the trade unions beware that the collective arrangements which they rely upon are not threatened by what we do in this other field. Lastly, let us remember the services rendered by workmen through the trade unions and by manufacturers and distributors through their services, in respect of the margins received. If manufacturers could sell their goods cheaper they would do so, because they want to sell the largest number they can. If they could reduce margins which they give the wholesalers and distributors, they would do so. What they find by experience empirically is the best margin at which to sell the largest amount of goods, and having found it, they enforce it for the great benefit of the whole trade and indirectly to the great benefit of the country.
§ 7.20 p.m.
§ Mr. Wilfred Fienburgh (Islington, North)
It is indicative of the present state of politics that the only two really intelligible speeches defending restrictive practices have been those of my hon. and learned Friend the Member for Northampton (Mr. Paget) and my hon. Friend the Member for Cheetham (Mr. H. Lever).
My hon. Friend the Member for Cheetham based his argument in favour of restrictive practices upon the memories of competitive conditions as they occurred in 1870s, 1880s and 1890s. I would remind him that I was nurtured on Thomas Hood's "Song of the Shirt." I, too, read "Merrie England" when I was very young. But that was some time 2011 ago. If I agreed with him that restrictive practices serve only to produce an orderly system of marketing, never to exploit the consumer and never in any possible circumstances to protect inefficiency, I would join him in his condemnation of the Report of the Monopolies Commission, However, I do not agree with him, for reasons which I shall give later.
My hon. and learned Friend the Member for Northampton drew a rather touching picture not of an economic situation but of a way of life. He said, "Here we are. We do not want to develop into an ulcerated society. We look at America where people get ulcers through going quickly, and we reflect that it is children who run and gentlemen who walk." When I recollect the tempo of delivery which my hon. and learned Friend exercises in this House, I can well understand why he should look with some distaste upon a more speedy approach to a problem.
The fact is, nevertheless, that this is not an amble through life. It is an analysis of an economic way of life. If we are going towards a certain prize and that prize happens to be our food, our raw materials, our standard of living and the economic viability of this country, it may well be that if we amble like gentlemen, the children from America and other countries will nip in and seize our living from us. Consequently, I cannot agree with my hon. and learned Friend. I notice that my hon. and learned Friend has just re-entered the Chamber. He still ambles.
I want now to say a word about the incredible intellectual dichotomy of both the President of the Board of Trade and the Conservative Party generally upon this issue. I congratulate the President on making the best of a very difficult position. In facing up to the problem he could choose whether to save his integrity or his skin. He has chosen to save his skin. He used to speak at the Dispatch Box with what, for him, amounted to passionate emphasis. Time and time again he uttered phrases about the need to deal with monopolies and to create a free competitive economy. He rapped the Dispatch Box with his two forefingers, which is his own way of underlining the particular cliché he is uttering at the moment. Time and time again he posed as the apostle of free enterprise.
2012 But the right hon. Gentleman was in a very difficult position on this issue, because if he had accepted the Report he would have had to endorse the allegation that certain practices which hon. Friends of his have been pursuing for some time to great profit were criminal offences. It has been noticeable during the debate how hon. Gentlemen opposite have a number of times veered away from the allegation of criminal offences and have attempted in so doing to ride off the whole Report.
My hon. Friend the Member for Cheetham did the same. He painted a ghastly picture—I was very sad at the time; I was almost in tears—about the number of directors of the Bank of England, directors in industry, directors of the British European Airways Corporation, and so on, who would be put in prison if this new criminal offence were created.
Constantly in the development of our society we have evaluated new concepts of what is criminal and what is not criminal. There was a time when it was not considered criminal to employ sweated labour in industry and to employ children at the age of four, but the gradual development of our society made those practices criminal offences. I consider that the time has come for us to say that in the evolution of a new kind of society, equipped to deal with the twentieth century, and without condemning too much those who pursued these practices in the past, we ought to say that in the future at least we are entitled to regard the practices listed in the Report as criminal offences.
The President, remembering the sad fate of the previous Minister of Agriculture, had to decide whether he would stand up to the enunciations which he has made on this subject at the Dispatch Box or salvage his political career. He has decided to salvage his political career—for only a little while—and as a result there is little hope of anything being done upon this subject at the moment.
The right hon. Gentleman is not the only hon. Gentleman opposite in difficulty. The entire Conservative Party is in difficulty on the issue. Conservative hon. Members have been constructing a political philosophy in order to hide their moral nakedness ever since 1940. The intellectuals of the Conservative Party 2013 have now, to their own satisfaction, produced a political philosophy of the Right. It goes something like this, "We in this country can double our standard of living within twenty-five years. In order to do that, people must work harder. The way to make people work harder is to give them incentives. Incentives, according to our analysis, are cash incentives. Therefore, we must provide cash incentives in a free competitive industrial society so that people in scrambling for the prizes will somehow lift the whole of the economy out of the mud."
That has been the general Tory political philosophy. The only trouble about it is that we have not got the first prerequisite, which is a free competitive economy in this country. I am not saying whether we ought to have it or not; I have my own views on that. For the moment I am trying to analyse the incredible moral humbug of hon. Gentlemen opposite, for we are entitled to examine it now and again. It consists mainly of this, "We construct a free competitive industrial society. We give prizes and incentives to those who struggle, use their elbows, teeth and claws the best, and that will, somehow, energise the economy, dynamise our way of life, and push everybody up into a higher and better standard of living."
However, we have not got that kind of society. Our society ceased to be competitive after the First World War. During the inter-war years a plethora of restrictions developed, no doubt for sound, reasonable purposes at that time. The Second World War sanctified those practices, and they have continued since the war. The net result is that Britain as an industrial nation has now gone soft; we are flaccid and flabby. One of the main troubles from which we suffer is hereditary management in British industry and the general conception, "If father did it that way, it is all right for me to carry on on the same lines."
There is a reluctance to invest and renovate. There is a keen desire to avoid the ulcerated kind of society. The result is that, bound by restrictive practices, we are developing to a large extent into a stratefied and ossified industrial structure which will prove fatal to our people ten or fifteen years from now in the face of 2014 industrial competition from the younger nations of the world.
It is fair to say that we are suffering from a form of industrial corruption the equivalent of which in terms of moral corruption has pulled down other nations in the past. We must have the kind of society in which we can produce cheaply and efficiently, and one factor in that is the creation in certain sectors of the economy, subject to certain safeguards, of a genuine form of industrial competition.
Hon. Gentlemen opposite are in the terrible position that they either had to accept the Report and enjoy a little moral rectitude or reject it and satisfy the Federation of British Industries. They have decided not only to satisfy the Federation of British Industries, but, what is even worse, to base nearly all their speeches on the free hand-out provided for all hon. Members by the "Aims of Industry." That, of course, has completely exposed the confidence trick, the new mock Tory philosophy. It has proved that, in rejecting the Report, they have also rejected the general incentive excuse. Incentives now turn out not to be allied with competition. Therefore, incentives are no longer a proper instrument in a political philosophy; they are an excuse for making the rich richer in a stratified type of society. They have rejected the general conception which underlies their whole moral, political attitude of the past few years.
What should be the attitude of our side of the House on these problems? First, we have to look at this problem of competition very seriously indeed, as was briefly said by my hon. Friend the Member for Cheetham. Should we, in fact, nowadays continue to be as afraid of competition as we were in the past? Should we still remember the attitude of mind which, as I said before, derives from Robert Blatchford's "Merrie England"? I think we can now afford not to do so. Our industrial structure today can face a stronger competition without fearing that its effects will be borne by the workers and the workers alone, because there is now a new factor in industrial relations and that is the strength of the organised trade union movement.
The organised trade union movement can not only secure, in a competitive 2015 society, by use of its own competitive strength that there should be proper conditions and that competition should not be paid for by exploitation of the workers, but can secure for the workers a higher share of the increased production and higher standard of life, which, one must assume, would flow from increased efficiency.
The second point is whether we should in any case encourage the proliferation of small industries from the competitive point of view. Here we are in some difficulty, because we have to face the facts and acknowledge that nowadays, and here I am beginning to agree to some extent with my hon. Friend the Member for Cheetham——
§ Mr. Fienburgh
I wish that the uni-Lever trust operated only outside this House.
We really have to face the fact that the day of the competitive, small entrepreneur is gradually declining and that it is no longer possible to revolutionise society by the possession of a screwdriver and an idea. That is one of the basic fallacies behind the whole Tory conception. We now have in this country a growing range of natural and inevitable monopoly. It is not possible to demonopolise, it is not possible to split it into constituent parts, it is not possible to slice it this way, or the other and say, "Out you go into that particular field and you to the other."
There are certain parts of private industry where monopoly is inevitable. All the anti-monopoly legislation and all the anti-monopoly commissions will avail as nothing in face of the pressure of these very rigid economic forces which are determining the pattern of society today. They are felt in the United States of America, where they have had their antitrust legislation. They have a steel industry which works within that legislation and is not regarded as cartelised, or monopolised, but it always happens that whenever steel prices in the United States of America go up they go up from the same price to the same price, by the same increase, at the same minute, of the same day.
2016 I do not think that we can really condemn the United States steel industrialists for that, because here is a field of what I would regard as inevitable and natural monopoly, where, in order to achieve economies of scale, the unit of production must be very large, and the larger the unit of production the more sensible it is to have some form of specialisation between different units, because on the Gargantuan scale one cannot afford the same kind of competition economically—And for the nation it is unsound—that one would encourage between two back street "pubs" in Islington.
When one comes to the larger scale industries and to the question of providing services, gas, electricity, water, fuels, chemicals, steel, transport, then one is reaching a stage, or one has already reached a stage, of inevitable monopoly in which the small man's day is over and in which there can be no realistic competition and no kind of monopoly legislation is viable. It is coming in the motor industry where amalgamations are proceeding all the time. I do not disagree with that. The problem then remains of how we are to deal with and control them and secure that the public interest is helped through the development of these natural and inevitable monopolies. I say that the answer is perfectly clear. There must be one of two things in some parts, and I would say over the wider part, of the industries I have named.
The only answer is to admit that there must be monopoly, not to fight against it, but to insist that it shall be public monopoly, publicly owned, answerable to the will of the people, for good or ill, in this House of Commons; in other words, an extension of public ownership over these basic, natural—[HON. MEMBERS: "Oh."] Hon. Members say, "Oh." [HON. MEMBERS: "The electors did not say so."] The electors said very little of consequence at the last Election.
The return of hon. Gentlemen opposite is not a thing of which they should boast. It is a reflection of political apathy and not of political thought, and if we are in part responsible for that political apathy, then I accept the blame and shall spend the next few years trying to enliven that position, so that there will be less apathy next time. When the electorate thinks, hon. Gentlemen are sitting 2017 on this side and not that side of the House.
§ Mr. David Price (Eastleigh)
Do I gather that the hon. Gentleman is saying that the electorate thinks only when hon. Gentlemen opposite are the majority party?
§ Mr. Fienburgh
I think that that was a maiden interjection and, therefore, it would be unfair of me to comment.
Where there is no public ownership, to resume my point, where, for various reasons, public ownership does not seem appropriate, there must be really genuine and effective public control over these natural and inevitable monopolies. That does not mean receiving a report now and again; it does not mean setting up a board like the Iron and Steel Development Board; it means that the Government and the community must assume power over their credit policy, over their investment policy, over their dividend policy, and over their price policy. The answer of hon. Gentleman opposite is nil. It is to leave them alone and to try to identify certain practices they think to be wrong.
§ Mr. Henry Usborne (Birmingham, Yardley)
Is my hon. Friend not confusing two points? I agree—we must all agree—that there are certain things, like transport, that are natural monopolies and that in those circumstances no other competitor ought to be allowed to come in. That is one thing and, indeed, I hold that where there is a natural monopoly, it should be owned by the State. At the same time, there is a general integral principle operating in all industries at all levels. That is proper, but these cartels are not necessarily natural monoplies. There is an important difference between cartelisation and monopoly.
§ Mr. Fienburgh
But where this natural integral process produces a monopoly as its inevitable end, I say that it is a natural and inevitable monopoly, and that we should ensure that that monopoly is responsible to the public interest generally and not the private interest of the people who own it. That still leaves a fairly large and, for some time, substantial residual field of privately-owned industries.
2018 What should be the policy of the Labour Party towards them? I differentiate from the policy of hon. Gentlemen opposite. I believe that in the residual field of private industries, once natural and inevitable monopolies have begun to grow they ought to be placed under public ownership or control. Then, in the rest of industry we should, in the modern context of the modern society, encourage competition to the utmost. Given that the workers in the industry are protected, as they are nowadays by the trade union movement; given that many of the ideas which were created by the depression are now no longer quite so valid; given that we can anticipate, as we can anticipate if reasonable policies are followed, continued full employment; and given that unless we are to have this increase in industrial efficiency the nation will suffer—then, unless we secure our ends by public control, direction and order, the only way of achieving them is by inculcating in that field of private industries a real and genuine competitive spirit.
One of the first necessities is the implementation—and it does not go far enough—of a large part of the Report. But even that would not be enough. I believe that it would be necessary, also, that in certain respects there should be real and vigorous competition by industry established by the community in fields where. it is not possible, or not likely, even removing the restrictive practices, to have sufficient competition to ensure an increase in efficiency.
If the registration of written agreements is replaced by gentlemen's agreements which are decided over a cup of coffee or a glass of whisky, then the State ought to be prepared to say, "We will show you what competition means. If you believe in a competitive economy, and that higher productivity and efficiency flows from competition, and if you are not prepared within your own organisation and industry to produce that competition, then we will do it for you. We will produce competitive industries to challenge you upon your own ground."
Therefore, in a mixed economy, the answer to the problem of monopoly is, first, that we should take into public ownership those natural and inevitable monopolies; secondly, we should publicly control in most details of their investment. 2019 prices, dividends and development policies the other industrial concerns which are developing into near-monopolies. In the residual field of private enterprise where we should see that it is real competitive private enterprise, the trade union's job, in that context, should be to look after the interest and general well-being of its members to ensure that they are not exploited in nineteenth century fashion.
Given that, I think that we can within this country develop the kind of industrial complex which will measure up to the urgent needs of the next fifty years.
§ 7.42 p.m.
§ Mr. William Shepherd (Cheadle)
One thing is very clear, and that is that, wherever restrictive agreements lie, they do not lie on the benches opposite. Almost every speech from the benches opposite has revealed a startlingly different facet of view on the question of monopolies. I was told by the Press that among members of the Tory Party there would be displayed a violent clash of opinion; but this afternoon that clash has been manifest not on this side of the House but very clearly among hon. Members opposite. They are in a pretty sad mess.
Even the right hon. Gentleman the Member for Huyton (Mr. H. Wilson) was in rather a bad mess this afternoon, because he denied that he ever said that the monopoly practices of the Calico Printers' Association ought to continue. I invite him to look at column 1476 of the OFFICIAL REPORT of 24th February, 1955, where he is reported as having said precisely those words. It would have been much more honourable if, having changed his view upon this, or having come to the conclusion that his words of 24th February were unwise——
§ Mr. Shepherd
He said:My own feeling would be to allow the agreements to continue.…Later he said that… this was a case where the Government would be justified in resisting the proposals of 2020 he Monopolies Commission …"—[OFFICIAL. REPORT, 24th February, 1955; Vol. 537, c. 1476.]
§ Mr. Shepherd
The right hon. Gentleman can do that himself. I really do not want to take up the time of the House.
§ Mr. Shepherd
Nothing could be more emphatic that the agreements ought to continue and that the Government were justified in resisting the proposals of the Commission.
§ Mr. Wilson
I cannot accuse the hon. Gentleman of unwittingly misrepresenting me; it must be deliberate, because he has looked up the quotation. I made it clear on that occasion, and subsequently, that I was referring to price agreements. If he would read the quotation, it would become clear.
§ Mr. Shepherd
The quotation refers to the agreements.
I want to deal with the specific aspects of the debate and to say that I welcome the Report, although I am afraid that it is not a very clear one. Its lack of clarity is, in a sense, unfortunate. It lacks clarity because a good number of the practices which have to be dealt with are not under the review of the Commission. This is one of those Reports about which one can say that it might have been better had it been longer. Usually we feel that most Reports would have been better if they had been shorter.
I find the attitude of hon. Gentlemen opposite very surprising, except in two instances. I refer to the two hon. Members who said, "We believe in restriction; we believe in monopolies." They were honest men. They were truly in line with Socialist thought, because no one has done more since the war to erect the Frankenstein of monopolies than hon. Gentlemen opposite. They, at any rate, although they may have earned the disapproval of their hon. Friends, had the 2021 qualities of frankness and honesty, and their point of view was on the whole the more genuine one.
We have had a lot of talk from hon. Gentlemen opposite about State monopolies and private monopolies. Let me say this about the respective merits of these two kinds of monopoly. One can deal relatively easily with the evils of private monopoly. It is a terrible problem to deal with the evils of State monopoly. Hon. Gentlemen opposite do not know how to deal with them. We on this side of the House are finding them an almost insuperable problem. If there is a question of private and public monopoly, quite clearly there is an advantage in having a private monopoly which is susceptible of action. I am not in favour of monopolies.
§ Mr. Mikardo
Since the hon. Gentleman says that it is easy to deal with private monopoly, will he give some advice to the right hon. Gentleman the President of the Board of Trade who devoted all his speech this afternoon to saying how difficult it is to deal with this matter?
§ Mr. Shepherd
I ought to have completed my statement by saying that it is much more easy to deal with the evils of private monopoly than to inject into State-run businesses a spirit of enterprise and of service and efficiency. If the hon. Gentleman complains about that, then perhaps we can discuss it at another time.
I feel that there has been a good deal of most unjustified attack upon business people. I say that as one who does not like monopoly and who views with distaste many of the practices in which business people at present indulge. I do not believe that the view taken by some hon. Members is the right one. I do not believe that people in business go out of their way to make arrangements with a view to doing the consumer down. I do not think that they ever attempt to contravene the public interest; I believe that what they may do incidentally does that, but I am quite certain that, on the whole, the business community in this country is the most public spirited community in the whole world. There is too much denigration of business men by people in this House who perhaps do not understand very much about it. There is definitely a case for education but not for the denunciation which sometimes come from the benches opposite.
2022 I turn to the details of the Report, and I say right away that I hope that we shall not have any condemnation of individual price maintenance. I believe that individual price maintenance clearly and positively fulfils the public interest. When people talk about doing away with it, they do not really know what is happening in trade today.
I refer to one industry which is not in a very good state—the furniture trade. I really and truly believe that if we had more price maintenance and more manufacturer selling of furniture, that industry would be much more healthy than it is now. When people compare—as they do—the advantages of selling under competition and non-regulated industry, when they compare the position here and in the United States, they are indeed on a very bad wicket. In this country we have an extraordinarily efficient system of distribution, and we have, let me say——
§ Mr. Shepherd
The hon. Member for Reading (Mr. Mikardo), who just scraped home in the General Election, may say, "What," but I invite him to consider the evidence produced by the International Association of Departmental Stores. He will find that the costs of distribution in this country are lower than in any other country in the world.
§ Mr. Shepherd
The hon. Gentleman may say "No," but I invite hon. Gentlemen opposite to produce evidence to the contrary. I say that the evidence produced by the International Association of Departmental Stores shows that our margins are the lowest of any country in the world.
§ Mr. Shepherd
It is true that in the United States there are extraordinarily high mark-ups. There it is not an unusual thing to have mark-ups of 60 per cent. or 70 per cent., which allows for a good deal of price-cutting in sales. In this country mark-ups are more of the order of 25 per cent. or 30 per cent., which does not admit of comparison with the United States, so that I hope my right hon. Friend will stand very firm—[HON. MEMBERS: "On what?"]—because retail price maintenance has a positive value which this country ought not to lose.
2023 Coming to the main recommendations of the Report, I should have liked to have seen more sweeping action than is visualised at the moment. We have no choice between sweeping action, on the one hand, and some form of graduated action on the other. The majority Report had in mind making exemptions. In my submission, it would be absolutely impossible to specify exemptions by statute. I defy any hon. Member, or any of our learned clerks, to devise a law by which, on equitable grounds, one could exclude certain individuals, firms or trades from the ambit of the regulations. That would be an utter impossibility, and so we have no choice between a clean sweep or a graduated process.
§ Mr. Shepherd
I consider that, on the whole, what has been decided by my right hon. Friend is by far the best method that could be decided upon in all the circumstances. Indeed, it is a very good best, because it clearly lays an onus on the people on the register. Hon. Gentlemen have been talking as if no progress was being made by putting people on the register. There are on the register people who have been shown by the Commission's Report to have been conducting their affairs in a manner considered in general to be against the public interest. When they get on to the register, people are not in a position of being clear of blame. Unless they can prove that their's is a special case, they will be knocked off the register after a period, and they will not be allowed—[HON. MEMBERS: "How long?"]—we cannot this afternoon talk about how long—they will no longer be able to indulge in those practices.
On the whole, I think that the method chosen by my right hon. Friend, although to some extent it has been limited, is the best in all the circumstances. It is certainly fair, and I think that we should pay more regard to what is fair and just. People who adopt these practices, although they may be grossly mistaken—and I think that they are—believe that what they are doing is not harmful; and it is a good thing that we should bear in mind that to convince them that what is being done is not fair and just is not the main matter under consideration.
2024 No one has yet said, although it is true, that we are now entering a new field of monopoly legislation. We are getting away from the old ambit into an entirely new one. I hope it will be successful. There are difficulties, but I would not say that I am a pessimist about it. I consider that, on the whole, the problems now confronting us are no greater than when we set up the Commission. I consider that the Commission has done better than most people imagine. I see no reason why these obstacles, which I know are real obstacles, cannot be surmounted.
May I now say a word about the particular practices under review? I think that they are the most disagreeable of all the practices indulged in by traders. A straightforward, honest-to-goodness price ring is, to my mind, much more honourable than these seedy, devious methods which are referred to in the Report. It is better to have a frank and genuine price ring than these devious devices which tend to keep trade within watertight compartments. On the whole, these agreements tend to restrict the entry of new people into business. That is a very important objective, and it is a very unreal and unwise objective. I am certain that these devious devices referred to in the Report are highly unsuitable to trade and that we could get rid of them with very little bother.
I believe that we are in danger of overstating the effect of anti-monopoly legislation, and I think that we should steady ourselves a little. We shall not obtain any magic results from anti-monopoly legislation. Prices will not tumble overnight. E.L.M.A. lamps have come in for severe restriction in the last 12 months, but I do not notice any marked reduction in price. Pro-monopolists and anti-monopolists tend to overstate the effect of this practice on industry for two reasons. The first is that when things are very bad, obviously these practices go to the wall. People go round to the back door and sell things at a lower price. When things are very good the restrictions imposed on progressive manufacturers become too great to bear, and those manufacturers leave their association. In the last two months there has been a number of instances of manufacturers leaving an association because they found the restrictions too irksome.
2025 I believe in the advantages of a free enterprise society. I believe that restrictions and constraints on trade are generally undesirable, and should be abolished. I believe that arrangements between individuals made behind closed doors are a misuse of economic power and, so far as possible, we ought to stop them from being brought about. Where they are inevitable—as in some cases they are—they should be subjected to proper supervision in the public interest. I wish to see trade in this country thrown open to newcomers to come in and try to make their way. I desire to see an atmosphere of adventure and progress rather than enshrined restrictions.
Today we have changed circumstances in this country. It is ridiculous for the right hon. Member for Huyton to talk nonsense about our having laissez faire in this country. It is not true. There is a tremendous change in the whole atmosphere, and it is not a change towards laissez faire, because the Government accept the moral, political and economic obligation to maintain a high and stable level of demand. If the Government accept that obligation, trade associations ought to act upon it. If they have no longer the need to protect themselves—and I do not think that they have—they should not be eager to indulge in these restrictive practices. We are not going back to a policy of laissez faire. We are going in for a policy of ensuring, by Governmental action, a high and stable level of demand.
Some hon. Members have said that we cannot ensure for the whole of the future that we shall have full employment and a high level of demand. Of course, no one can prophesy that that is going to happen, but there are very good reasons for believing that it will. Ten years have elapsed since the war, during which time there have been some very startling economic changes and dislocation. During the whole of that time we have maintained—and not only we, but most of the countries of the world—a fairly high and stable level of employment and demand.
The position is not getting any worse. In fact, we are learning as we go along. We have learned that one of the prerequisites for maintaining full employment and a high level of demand is to see that producers get a fair return for 2026 their products. In some cases, we have erred in giving too much of a return. We have learned to operate the mechanism. There is no reason why, if there is national effort and international co-operation, there should not be a fairly high and stable level of employment and demand for some years to come.
But, even if that were not so, I would still controvert the point of view that restriction is the way in which to deal with these things. It leads to difficulties when things turn bad. Take Lancashire as an example. Lancashire today is not in a very easy position, and it may well be that if there were absent some of the restrictive practices which obtain in that industry the structural changes necessary to it would have taken place before now. It is debatable whether these restrictive practices necessarily prepare us for the bad times. They may make us impotent when the bad time comes along.
I believe in the free enterprise society. I reject the idea held by some of my hon. Friends that because the area of competition is necessarily small we ought not to try to get competition within it. Because it is small it is all the more necessary to get competition within it. No one does as well as he or she can do unless driven to it by competition. That is the only way in which we can get the maximum effort from the country, and within the free enterprise of this country, in the steel and metal industries and in the engineering industries, lies the future life-blood of the nation. If that is not efficient to the highest possible degree we fail as a nation. Therefore, we ought to have within those industries the highest measure of competition.
I believe that what my right hon. Friend has proposed this afternoon is the practical solution to this problem. I believe it is what the nation needs, and that it implements what the Conservative Party put into its election manifesto. It is one more step on the road towards a freer and more vigorous society.
§ 8.4 p.m.
§ Mr. Ian Mikardo (Reading)
If I do not follow the observations of the hon. Member for Cheadle (Mr. Shepherd), it is only because he expressly invited me not to do so. On two occasions during the course of his speech he started a hare and then, when his observations and his 2027 so-called facts were challenged, he waved his hand airily and said, "Well, we can discuss that at some other time."
The hon. Gentleman had better have a conversation with his right hon. Friend the Leader of the House, because he is taking unto himself to decide what subject the House will discuss at some other time. It is either that, or he is very understandably and very pardonably begging that the House shall not examine too closely the basis of the arguments which he has put forward. I hope that my contribution to the discussion of this very difficult problem will be a little less didactic than his. The trouble with the hon. Gentleman is that he confuses dogmatism with authority. He thinks that if he says a thing firmly and often enough that makes it right. By no means is that so.
§ Mr. H. Wilson
If I may interrupt my hon. Friend for a moment, I would point out that when the facts of the hon. Member for Cheadle (Mr. Shepherd) were challenged—when he was trying to prove that I had misled the House about calico printing—he failed, despite repeated challenge, to read the next sentence, which said:That is the reason for these price-fixing agreements."—[OFFICIAL REPORT, 24th February, 1955; Vol. 537, c. 1496.]That made it quite clear that I was referring only to price fixing in that respect.
§ Mr. Mikardo
I am very glad that my right hon. Friend was able to get in that correction, even if it was at my expense. The inaccuracy of the hon. Gentleman's quotation is, I am afraid, no more than a typical example of the way in which he normally treats the House. Of course, he talks with all the arrogance derived from coming from a safe seat and he speaks disparagingly of people who just scrape in. Since the hon. Gentleman is so cocky, and as Reading is looking for a new candidate, I invite him to come along to fight the Reading seat at the next Election.
§ Mr. Mikardo
I should jolly well think so.
2028 The President of the Board of Trade is not the only member of the Conservative Party busy saving his skin today. This problem is clearly one of timing. It is a problem of the speed at which Governments should take action in respect of the matters which have been laid before us in the Report of the Monopolies Commission.
Very few of us in this House knew when we came along today what action the President of the Board of Trade would propose. We all knew, of course, that he would propose something, whether or not he and his colleagues in the Government agreed with the view of the Monopolies Commission that the practices which it had examined were universally contrary to the public interest. We knew that, whatever the right hon. Gentleman felt about the merits of these practices, he would be bound to propose some action because, otherwise, he could not justify the speeches which hon. Members opposite have been making these last few years, or the posters which they have been putting up all over the country.
What sense would there be in setting the people free or in claiming that the so-called paradise in which we live comes about because industry has freedom to get on with the job? What sense would there be in saying, as the right hon. Gentleman said today, "We are and we remain a party of free enterprise" so long as, virtually at the same moment, the Monopolies Commission refers to the exclusive dealing which is going on as being "an extreme interference with the freedom of the subject to carry on any lawful business"?
It was clear that the Government would have to propose to do something to expunge this challenge from the record, because here is a majority of the Monopolies Commission, whose eminence and fairness no one can dispute, saying that in this country there is not freedom for industry to get on with the job So the question which faces the President of the Board of Trade, the problem which he has been arguing with the 1922 Committee these last few evenings, is, since he has got to do something, should he do as much as it is right to do, or should he do as little as he is compelled to do?
2029 Those who listened to the right hon. Gentleman this afternoon will know that he has come down in favour of doing as little as he is compelled to do, and to do that as slowly as he can get away with it. Indeed, almost all the pleas from hon. Gentlemen opposite today have been to do as little as possible and as slowly as possible. The hon. Member for Cheadle said we should steady up on anti-monopoly legislation. But the right hon. and learned Member for Chertsey (Sir L. Heald) went further. He campaigned against any intention whatever to do anything, or to take any action which would be characterised by simplicity and speed.
The right hon. and learned Gentleman, with the tortuousness which his profession sometimes imposes upon those who practise it, said, "Let us choose a method of dealing with this urgent problem that is slow and complicated. Let us not have anything that is quick or simple." If the President of the Board of Trade really meant what he said in his peroration——
§ Mr. Mikardo
Not even the right hon. Gentleman could believe it. But if he had meant it he would be seeking for the quickest possible method. He says, "We will have a Bill." He does not say when. Let us try to work out the timing of this matter. The last time that the Government said we were to have a Bill was in the Gracious Speech in November, 1951. We still have not had the Bill—and that is nearly four years ago. So, unless the Government have speeded up their productivity, we may have this Bill in anything up to four years' time. We shall certainly not get it until 1956; I think that that is clear.
We shall eventually have a Bill. Under that Bill, the President will set up a tribunal. We know that that is a slow process—sometimes inevitably so. People have to be found to make up the tribunal. Up till now the President has not given very much thought to the question of what sort of people he should have. He was just playing around with this question today. That will take a very long time. Then, when the tribunal has been set up, it will have to get staff from somewhere—and that will take a little longer. Then it will have to start up all the machinery of registering agreements.
2030 The hon. and gallant Member for Ilford, South (Squadron Leader Cooper) warned the President that the tribunal might have to register as many as 10,000 agreements and, said he to his right hon. Friend, "Do not imagine that you will do that in a hurry." The President knows that; that is just what he is after. He wants a method which cannot be carried out in a hurry. After all these agreements have been registered the tribunal will sit down and go through them—and there may be hundreds, or even thousands—and, by a process of "Eeny, meeny, miney, mo," it will pick out one and say, "We will call upon the manufacturers of elastic-topped socks"—for example—"to tell us why their agreement is in the public interest and should be maintained."
Those manufacturers will come along, and, unless the tribunal is more high-powered than the Monopolies Commission—and we have no reason to suppose that it will be—experience goes to show that answering that question will take about two years. I suppose that a Member of the Government will reply to the debate. I want to ask him a direct question. My estimate is that, at best, the first action flowing from this tribunal will be available in 1959. Does he challenge that estimate? If so, will he justify his reasoning and give us particulars of the time-table which leads him to believe that it will come just before that date, or at any time before that date? If he cannot do that, will he please say whether, in all conscience, he thinks that the measures proposed today are or are not an honest implementation of the promises which his party has been making in the last two election campaigns, about action to be taken against monopolies?
§ Mr. Shepherd
Does the hon. Gentleman realise that the tribunal will be faced with an entirely different situation from that which faced the Commission? The Commission has already inquired and has concluded that, in general, these practices are against the public interest. They are registered as such, and it is merely the duty of the tribunal to call firms or associations before it to see whether they can show that, contrary to the general experience, their agreements are not against the public interest. That will take merely a day or two.
§ Mr. Mikardo
I should be very glad if that were to happen, but I do not share 2031 the hon. Member's view in that respect. We are clearly both forecasting—and neither of us can speak with authority—but the Monopolies Commission, too, has been able to find out in a matter of a day or so what agreements existed in a certain industry, and it nevertheless took the Commission about two years to report. I do not criticise the Commission for that; it is a complicated business finding whether an agreement—the facts of which are admitted—is against the public interest in its operation. From every word the President said today it seems to me that the tribunal will have to do precisely what, up till now, the Monopolies Commission has had to do.
§ The Attorney-General (Sir Reginald Manningham-Buller) indicated dissent.
§ Mr. Mikardo
The Attorney-General shakes his head, but the only difference between the two bodies is that at the end the tribunal will have some teeth, whereas the Monopolies Commission has not. Mc tribunal's powers are stronger, and I welcome that fact, but the method through which it will reach its findings can only be the same method as that of the Monopolies Commission.
§ The Attorney-General indicated dissent.
§ Mr. Mikardo
I am sorry that the right hon. and learned Gentleman does not agree. The Monopolies Commission has made its inquiries upon the basis of ascertaining the facts. I hope that the right hon. and learned Gentleman is not suggesting that the new tribunal is not going to act on that basis, because, if he is, we shall be a little more suspicious than we would otherwise be of any dream-child of the present President of the Board of Trade.
We shall not disentangle this problem unless we first trace the motives which tie behind the present practices. I agree with those who say that, on the whole, British business men do not sit around saying, "How can we chisel the public; how can we pull a fast one?", but they do sit around saying, "How can we make more profit?" If the answer to that question results in some unfairness to the public the business man is faced with a double loyalty. Is he to be a citizen first, or a business man first? Ninety nine times 2032 out of a hundred, if he were a citizen first and a business man second, his shareholders would sack him and choose somebody who was a business man first and a citizen second.
There is only one answer. We should not run away from the profit motive element in this business. Like my hon. Friend the Member for Loughborough (Mr. Cronin), who made what I thought was a remarkable maiden speech, I do not condemn people in business for seeking to maximise their profits—so long as there is a profit sector of the economy that is what they will do—but I do condemn people who, in this instance—and I condemn nobody more than the F.B.I., who published a whitewashing statement upon this subject a few weeks ago—try to make us forget that there is a profit motive in this matter; because if we do forget it we shall get the whole problem distorted.
Some hon. Members have complained that "Aims of Industry" sent us all a pamphlet, because they thought that it was rather a slur upon our intelligence. They take the view that "Aims of Industry" imagines that hon. Members are not capable of speaking for themselves without the help of "Aims of Industry." But what the F.B.I. did is worse. A week or so before the Monopolies Commission Report was published the F.B.I. published a statement trying to turn it aside. It did worse than "Aims of Industry." It did not pretend that Members of Parliament are not capable of speaking without its assistance; it seemed to imagine that Members of Parliament are not capable of thinking without its assistance and of reading the Report of an independent Commission and making up their minds about it.
I read the F.B.I. document with great interest, and I extracted a list of no fewer than twenty different reasons why the F.B.I. was in favour of restrictive practices. I shall paraphrase them. It says that firms may have restrictive practices for any one or more of the twenty following purposes: to safeguard the public interest; to increase exports; to look after the consumers—[Laughter.]—that is what they say—to look after the workers; to avoid price wars; to increase investment; to avoid bankruptcies; to eschew unemployment; to maintain efficiency; to offer a dependable quality 2033 and service; to take advantage of new techniques; to avoid fluctuations in demand; to make full use of resources; to keep prices down; to encourage research; to exchange statistics; to visit each other's factories; to educate and train their staffs; to protect small firms, and to keep distributors on their toes.
Those are the twenty reasons given by the F.B.I. for restrictive practices. The F.B.I. did not include as one of its reasons that sometimes some firms or groups of them might go in for restrictive practices to make a bit more profit. We simply must have some sort of public honesty about these matters or we shall not get the thing clear at all.
What happens because they talk in this way and hide their real motive is that very often people talking about and justifying restrictive practices are really rationalising their own emotions and their real reasons. Many of the defences put forward for restrictive practices just will not stand up to any practical examination.
I am following the lead of various hon. Members on both sides of the House in not trying to make any moral judgment about this. I do not know that I am competent to make moral judgments about other people anyway. I want to look at the argument from a purely practical point of view. In particular, I want to examine what seem to me to be the only three important arguments put forward by restrictionists to justify their behaviour and to see how far they stand up.
First, restrictionists say—we had it in the speech of the hon. Member for Morecambe and Lonsdale (Sir I. Fraser)—that firms are entitled to restrict their distribution through certain channels where they know that those channels will give proper service. The argument is that these restrictive arrangements ensure better service for the consumer than he would otherwise get. Without reading it all in detail, I ask hon. Members to read paragraph 80 in page 28 of the Commission's Report and paragraph 90 in page 31, which go to show—and it seems to me that this part of the Commission's examination, even for that body, was particularly close and careful—that not only do people who are not restrictionists give as good service as people who are, but that in many cases the actual operation of the restrictive agreement diminishes the 2034 possibility of the manufacturer or the distributor giving the best after-sales service.
The real give-away is this. A manufacturer of an engineering product says, "Only XYZ Company can sell my products because it is the only firm with staff, equipment and facilities to give service"; and so the XYZ Company is appointed distributors. After that, the manufacturer never again goes to check whether the standard of service is being maintained, whether the XYZ Company has not sacked all its fitters, or whether its machine tools have not run down. The Commission says in the most explicit terms that it has received no evidence that manufacturers who choose distributors on their own showing for their ability to give service, subsequently check whether that ability continues to be maintained.
§ Mr. R. Gresham Cooke (Twickenham)
To give one example from my experience in the motor industry, motor manufacturers have factory representatives whose one job is to go around and see whether distributors are up to the mark.
§ Mr. Mikardo
The Commission took evidence from the motor trade. I do not want to read great lumps of the Report, but the Commission says explicitly in two different places that there is no evidence that manufacturers ever so much as consider deleting a distributor's name from their lists because he has ceased to give good service. In another place, the Commission says that there is no evidence to show that the ability to give service is checked as a regular routine thing—and it had evidence from the motor trade.
The hon. Member knows how assiduous these trade association are in sending inspectors, sometimes heavily disguised, to check that people are not cutting prices. Will he tell me that they are just as assiduous in sending inspectors to check that people are not cutting the standard of service? The hon. Member knows perfectly well that they do no such thing. If the motive were genuine, manufacturers would be just as assiduous in doing the one job as they are in doing the other job.
The tribunals haul up traders who cut prices. Has anyone ever heard of one 2035 of these "Star Chamber" courts hauling up a trader because he has not given good service to a customer, and punishing or fining him for it or putting his name on a stop list? Yet if there were anything in this bunkum, this hypocrisy, that this is done to ensure service, that would happen just as much as hauling up people because they are cutting prices.
I ask any hon. Member who has had the good fortune which I have had of spending some time in doing shopping in the Dominion of Canada, where they do not have these arrangements, whether he found any difficulty at all in getting after-sales service in Canada for anything he chose to buy. I ask the House to believe that after-sales service standards there are certainly no lower without any discriminatory practices than they are in this country.
The second of the three justifications that I want to examine is the argument that these restrictive practices facilitate a greater degree of standardisation in manufacture. Let me say at once that I am a fanatic about standardisation. I believe that it is the one thing more than any other which can raise productivity in this country and I would be almost prepared to accept restrictive practices if they gave rise to a greater measure of standardisation of method of manufacture and of end product. Again, the Commission has had a look at this aspect and finds that not only is it not true that these restrictive practices create more standardisation, but that in fact they interfere with what standardisation there is. If hon. Members like the reference, they will find the passage concerned at the end of paragraph 93 and the beginning of paragraph 94 in page 32 of the Report.
Perhaps I might quote a single example. The Commission referred particularly to the evidence of the Railway Executive, as a very large buyer, that it would arrange to centralise its purchasers to a much greater extent were it not for the fact that the rainwater goods agreements prevented the Executive from obtaining any appreciable advantage in price by so doing. If I had to pick one single thing that British industry most needs—and it needs a lot of things—one thing that it needs more than any other is an arrangement out of which great 2036 price advantage can be got through increased standardisation. But the Commission shows that great price advantage is not obtained, however much one standardises, in a situation in which there are restrictive agreements.
Thirdly, I should like to refer to a matter which has been mentioned already: that is, the question of investment. One of the justifications given for restrictive agreements is that because they exist, they give stability. I wish that people would not make a god out of stability. Stability is a static situation and our industry wants dynamism, not a static outlook in life. It wants, not stability, but adventure, a bit of pluck and guts about it, instead of looking always for security and stability. It is argued that we get stability and that, because there is stability, we get more investment.
Of course, it flies in the face of all the facts. There is no evidence at all that the restrictionist trades invest at a higher rate, taking all other factors into account, than the non-restrictionist trades. There are not available any comprehensive, detailed statistics, but I have not been able to come across any evidence at all that the restrictionist trades have increased their investment as much as some other trades in which there is no restriction at all. Of course, that is not surprising, because nothing so destroys the impetus to modernisation as absence of competition. Why should a man buy a new machine to make his product a bit more quickly if he is guaranteed that with the existing machine he will sell his product, however much more it costs to make because the machine is running down?
Again, let us compare what has happened in the United States. I agree with those of my hon. Friends, notably my hon. Friend the Member for Islington, North (Mr. Fienburgh), who have said that the Sherman legislation works only imperfectly. That is true, of course, but we know that there is much less restrictionism in the United States than here and that there is much more industrial investment in the United States than there is here—very much more. It follows, therefore, that there is not any correlation between restrictionism and investment.
2037 The two alternatives put before us by the two sections—if I may call them that—of the Commission were on the one hand registration and publication and on the other hand statutory action. I can see why the Commission divided on this question. I can see there is not a clear-cut, black and white argument, but that there is a balance of argument. I happen to agree with the majority that registration and publication will not do enough in themselves, will not do as much as even the President of the Board of Trade seemed to suggest that he hoped they would.
I advance on this question two considerations. First, there is the experience of Sweden, which has been referred to. Sweden has had these restrictive agreements registered and published since 1946. If registration and publication were sufficient Sweden would not have had to do anything else, but last year Sweden nevertheless found it necessary to put a statutory ban on two forms of restriction, on resale price maintenance and on collusive tendering. I think it is reasonable to argue from Sweden's experience that, having tried them out patiently for eight years, Sweden found registration and publication insufficient to correct abuses. It had to take some statutory action as well.
Secondly, I adduce our own experience in this country with cast-iron rainwater goods. It is now some years since the Commission investigated that trade and found some practices to be reprehensible, and published them in one of its Reports. There were then the usual discussions with the trade about what was to happen. On 27th November, 1951, the right hon. Gentleman who was then Minister of Works answered a couple of Questions on what was happening about those practices, which the Commission had condemned. He said:My Department has held discussions with representatives of the manufacturers and merchants concerned and has received an assurance that new trading arrangements to carry out the recommendations of the Monopolies and Restrictive Practices Commission will replace the present agreements. I should like to place on record my appreciation of their co-operation."—[OFFICIAL REPORT, 27th November, 1951; Vol. 494, c. 129.]That, I repeat, was on 27th November, 1951. Yesterday, Councillor E. S. Bishop, of Bristol City Council, announced that he had been having a look 2038 at tenders received by Bristol City Council during the last year, from 1954 to 1955, not 1951, and he said that in the past year there had been 100 per cent. level tendering for cement, salt glaze ware, and cast-iron rainwater goods.
So that we see that the manufacturers and merchants who had to suffer publication of their practices in 1951, and all the obloquy of condemnation by the Commission, and who had discussions with the Government and promised a Minister that they would do something about it, simply then proceeded to thumb their nose at the Government, thumb their nose at the Commission, thumb their nose at the British public, and thumb their nose at the local authorities which buy from them. I should dearly like to know, in the light of this situation, whether the right hon. Gentleman who was then Minister of Works and is now Minister of Education would still want to record his appreciation of the industry's co-operation.
This is not a problem to tinker with, but a problem that demands action. The President of the Board of Trade may have gone out of the Chamber a little while ago saying, "Boys, I have got past that one. I have found a formula." But he will not get away with it for long, because as the years go by and the tribunal does nothing and no action is taken, and the public, and more and more city councillors, complain about collusive tendering and other practices which are included in the Commission's terms of reference, the right hon. Gentleman will find that a formula is not enough to protect him from having been too cowardly to take effective action.
§ 8.36 p.m.
§ Mr. R. Gresham Cooke (Twickenham)
We have listened to many interesting, constructive and courageous speeches from both sides of the House on the subject of the debate, but I was not so impressed by the speech of the hon. Member for Reading (Mr. Mikardo). The hon. Member conjured up a rather horrific picture of the tribunal going on for years and years looking into cases of individual industries, but I cannot visualise the tribunal working in that way. I imagine that the tribunal which my right hon. Friend the President of the Board of Trade has in mind is probably a judicial or professional one, spending all its time 2039 hearing cases quite quickly, perhaps taking evidence on oath, with the result that each industry may be disposed of in a few days.
I should like to correct the hon. Member for Reading on another facet of his argument. He mentioned that distributors had not been taken off the list by the British Motor Trade Association for lack of service, but the checking of service is a matter for individual manufacturers. They send round representatives and I have known from my own experience of distributors having their contracts taken away from them because their service was not up to the manufacturers' requirements.
§ Mr. Mikardo
When the hon. Member thinks that he is correcting me, he is correcting the Commission, because I was quoting from the Commission's Report. If he thinks that the Commission is wrong and he knows the Commission's address, perhaps he will be good enough to send it a letter. In the meantime, I take the Commission's view as slightly more authoritative than that of the hon. Member.
§ Mr. Gresham Cooke
I am talking about something from my own experience.
If I may bring the debate back to its subject, we are not discussing monopolies, price rings or collusive tendering. We are discussing only certain trade practices which are carried on by hundreds of trades, the chief one being collective resale price maintenance. That can take place in a highly competitive industry with a number of manufacturers in hot competition with one another. The manufacturers settle their prices and uphold them by means of an association.
As I know something about it, I should like to give an example from the motor industry of how these things work. It is not generally known that the British Motor Trade Association, of which I was not a member and with which I never had anything to do, has been in existence for about 45 years with the object 2040 of securing the maintenance of prices. One of the reasons for its existence is that in the motor industry a manufacturer may have 1,000 dealers who are signed up in contract to him. He can in those contracts require those 1,000 dealers to adhere to a nationally advertised list of prices, but in a large trade such as the motor trade there are another 16,000 dealers who are not under contract to the manufacturer. So the manufacturer relies on the use of the association to see that these remaining dealers maintain the advertised prices.
An association such as the B.M.T.A. is a trade union and is set up under the Trade Union Acts, 1871 and 1876. It is like any other trade union, and as such it is prohibited from entering into any legal proceedings to recover damages for a breach of any agreement between its members. That is why that trade association and many others have set up their own courts or their own committees. When such bodes have been tested at law in the House of Lords, their functions have been found to be within the common law and to be perfectly legal.
The fact that these restrictive practices exist in industry does not mean, as the hon. Member for Islington, North (Mr. Fienburgh) said, that the industry is ossified. Far from it. The motor industry has been the foremost exporter from this country, yet it has had these arrangements for many years and is far from being ossified. The particular reason why it has had these arrangements is to maintain a dealers' organisation for after-sales service, because vehicles are capital goods which require the provision of a national network of service points all over the country.
A person may take delivery of a vehicle one day in London and a few weeks later in the North of England require the replacement of some part of it. There has got to be a dealer who has stocks, and in order to see that these dealers are kept in business and are able to build up adequate stocks, they have to be supported by adequate margins.
There has been a good deal of talk in the Press and some here today on the question of secret courts, "Star Chambers" and so on. I think this can be exaggerated. If a jockey slashes another jockey at Ascot he is brought up before his "Star Chamber" or secret 2041 court, the Stewards of the Jockey Club. If a lawyer charges below the minimum fees he can be called before his own "Star Chamber," the Benchers of his Inn. If a trade union member breaks the rules he can be brought before his own committee or "Star Chamber," and if a clubman kicks a Minister of the Crown down the steps of the club he is had up before his own "Star Chamber," the committee of the club. All these are really committees of the institution.
In order to meet the criticism that was made in the past, the motor trade tried to make its committee as impartial as possible. It appoints an independent chairman, generally an ex-colonial judge. [Laughter.] Yes, a high legal official, who has to work to a set of rules, and the established procedure allows the members to be represented by counsel or solicitor. It is the opinion of the trade that this is speedier, less costly, and leads to rather less personal antagonism than having the case fought out in the courts where the remedy is either damages or an injunction. Certainly that would not be the proper remedy—to put a man out of trade altogether.
§ Mr. Gresham Cooke
Certainly, nonmembers are given the opportunity of appearing before the court. They can go or not, as they wish. I know there are many difficulties, but since at the present time a trade association cannot bring these cases before the courts, it is not easy to find a remedy.
One remedy might be for these private trade courts to be controlled by statute. For instance, the Potato Marketing Board has a disciplinary court and is able to impose fines. It keeps a list of registered dealers and operates under regulations. So it might be that the way to deal with this matter would be to put these trade courts under regulations under statute, just as doctors and solicitors have their own committees which are under statutory control. I put that forward as a suggestion.
We are facing an extremely difficult problem in resale price maintenance and collective enforcement. I liked the suggestion made by my right hon. and learned Friend the Member for Chertsey (Sir L. Heald) that a legal arrangement 2042 might be made for the price to follow the goods. The difficulty I visualise in the trade about which I know something is that if the British Motor Trade Association were wound up, an arrangement would have to be made about the 850,000 separate contracts. In other words, the 50 manufacturers of vehicles would have to enter into separate contracts with each of the existing 17,000 dealers or garages. That would be a cumbersome method.
I was as surprised as was the hon. Member for Cheetham (Mr. H. Lever) to read in the Report:We have not in the course of our inquiry come across any instances in which we were clearly satisfied that such practices were beneficial.For eight years I was Secretary of the National Advisory Council of the Motor Industry. For six of those years we were pressed by hon. Gentlemen opposite, as the Government of the day, to keep the covenant scheme on motor cars in operation. The right hon. Gentleman the Member for Vauxhall (Mr. G. R. Strauss) will remember that those were the days when the Morris Minor, listed at £300, would have sold for perhaps £1,000. By a voluntary arrangement through the trade the public was restricted on the resale of motor cars first for one year and then for two years.
I am not suggesting that because we were pressed by the Government at that time it was necessarily a good public service, but it was much applauded as such, and it could not have been carried out without the use of a trade association. There were many more cases against dealers for over-charging than there were for under-charging—1,200 of them. There have been 250 cases of under-charging in the last few years. In actual fact, I believe that there are more cases at the present time against people who are over-charging for models in short supply than there are of under-charging. That is a public service whch will help to keep inflationary tendencies in check.
As the President said, this is a very deep and complicated question which affects all trades. I think that the registration of these trade agreements is very much on the right lines, as it will bring the light of day on them. For individual trades to submit themselves to an examination by an impartial tribunal under defined rules is obviously a further step in the right direction. I hope that 2043 the tribunal will be a professional or a judicial one. In my opinion, the President is taking two big steps in the right direction in the very difficult and complicated field of resale price maintenance.
§ 8.51 p.m.
§ Mr. J. T. Hall (Gateshead, West)
I want to say a few words on behalf of the local authority in my constituency, which has drawn my attention to certain practices in relation to their tenders which they believe to be against the public interest. Since receiving that complaint, I have taken a great interest in the speeches of my hon. Friends here tonight. I feel that this is a growing evil which ought not to be allowed to go on. I am glad that the Monopolies Commission, in its majority Report, has made recommendations that the Government should take action on certain practices which they feel have a tendency to put up prices. I am sure that that is a step which will be welcomed by the public.
It is a fact that there is a creeping inflation in the country, and I have no doubt that it is caused to a great extent by restrictive practices. I feel that there would be greater confidence in the public mind if it knew that it was getting value for its money. While there are monopoly practices by big business and price rings by trade associations, we shall always be having wage claims by the trade unions, which have to protect their members from the rising cost of living. I would say that the Government have great responsibility in this matter.
As supplies have become easier, the Government have neglected to safeguard the individual consumer by dismantling the central and local price regulation committees which did a great deal to control pries. As a consequence, in trades where production is concentrated, as in the case of cement or steel, or where powerful trade associations are able to enforce restrictive practices, there is always a danger that unnecessarily high prices will be charged.
As the House knows, there were reports on dental goods, the supply of rainwater goods, electric lamps, electric wires and cables, and so on. The Monopolies Commission has stated that, in its opinion, prices would tend to be lower if the system of restrictive practices designed to 2044 eliminate competition were abolished. In the case of the match industry, manufacture is in effect a one-firm monopoly. The evidence placed before the Monopolies Commission showed that the British Match Corporation was able to eliminate outside firms which were likely to compete with them in the United Kingdom and regulate competition from abroad by cartel arrangements.
There is one drawback about the findings of the Commission. The Government have failed to follow up the Commission's Reports. In only one case has statutory action been taken, and that was by the Labour Government. I was pleased to hear from the President that more positive action will be taken by the Government. The Commission will be wasting its time if it makes recommendations and the Government do nothing about them. It is all very well to say that consultations have taken place between the Government and trade associations and that restrictive practices have, as a result, been relaxed, but if the Government refuse to publish information, the public are bound to suspect that nothing has been done.
I now come to the experience of the Gateshead Town Council. When I said that restrictive practices were growing I had in mind that for the first time Gateshead Town Council have received identical prices in their annual tenders. One of the principles laid down by the Ministries of Transport, Health and Housing and Local Government is that for the supply of goods and materials local authorities must accept the lowest tender. It is only when previous experience has proved a contractor unsatisfactory that Ministries allow a choice other than the lowest tender. What do Ministers say when all the prices are identical? At the moment there is nothing in law against it. Yet councillors and even the Minister must feel that it is against the public interest.
I believe that having to accept the lowest tender is sound. It brings in the element of competition. It helps to keep prices down. It gives encouragement to enterprising firms, and makes other firms more efficient. On the other hand, the restrictive practices of trade associations are bound to raise prices higher than they should be. They prevent the enterprising 2045 firm from expanding and protect the inefficient firm from the penalty of its inefficiency.
When Gateshead Town Council invited tenders for the annual supply of goods and materials, the prices quoted were identical to a penny. For the supply of cement, six firms quoted exactly the same price of £7,417 6s. 3d. For broken whinstone and whinstone chippings five firms tendered. One firm was ruled out on the grounds that the tender did not comply with the specification. The other four firms tendered at the one price of £1,503 Os. 5d.
There was a slight variation in the case of salt glaze ware pipes and fittings. One firm found that it could tender at ½d. less than one other. The prices quoted by four firms were, respectively, £2,355 2s. 10d., £2,355 2s. 11d., £2,355 3s. 4½d., and £2,355 3s. 5d. I could give other illustrations, but in deference to my right hon. Friend who desires to speak I will refrain from doing so.
The burden of increasing rates is a matter of deep concern to everybody in all parts of the country. Councillors have added responsibilities through new Acts of Parliament. They have huge commitments in building new houses. They are expected to carry out slum clearance schemes. There are numerous new schools to be built. With ratepayers grumbling about the high rates, councillors have every reason to be shocked when they find price rings operating which make the rates go even higher.
This matter of price rings therefore becomes one of great urgency. The local authorities are afraid that if price rings are not dealt with their work of providing houses and schools and other buildings will become an intolerable burden on the ratepayers or the work will have to be abandoned or retarded.
The Government have a great responsibility. The Monopolies Commission has shown that restrictive practices are against the public interest, and we have more and more of them reported in the Press every day. I hope that the Government are to take strong action, because it will need a rigorous policy to succeed against these monopoly organisations which are very strong today. I hope that as a result of the debate it will not be long before the Government bring forward legislation to 2046 enable these undesirable practices to be ended.
§ Mr. Ellis Smith
On a point of order. Having sat here for the whole of the debate and having been prevented from speaking, I cannot be prevented from raising a point of order. I want to keep myself in order. I know that I am not allowed to ask you, Mr. Deputy-Speaker, why my Amendment was not called. However, it will get on the record and be read outside and that will suit my purpose.
Many of my hon. Friends who are well-informed in this matter have not had an opportunity of speaking in this democratic Assembly. An hon. Member who desires to speak in support of my Amendment has not had the opportunity of doing so, so I therefore beg to move, "That the debate be now adjourned."
§ 9.3 p.m.
§ Mr. Herbert Morrison (Lewisham, South)
May I join with other Members in extending my congratulations on their 2047 speeches to the two maiden speakers today, the hon. Member for Epsom (Mr. Rawlinson) and my hon. Friend the Member for Loughborough (Mr. Cronin).
It may be as well in this concluding speech for the Opposition to recall to the House the restrictive practices which are under consideration in the debate. They are set out in paragraph 29 of the Report. Firstly, there is:Collective discrimination by sellers (without any corresponding obligation on the buyers).That is to say, discrimination by the sellers as to whom they will sell and under what conditions.
Secondly, there is:Collective discrimination by sellers in return for exclusive buying.That is to say that they enter into discrimination in favour of those who will exclusively buy from these sellers. Thirdly, there is:Collective adoption by sellers of a policy of maintaining resale prices, or imposing other collateral trading obligations on the buyers.Fourthly, there is:Collective discrimination by sellers to enforce resale prices or other contract terms.Fifthly, there is:Collective discrimination by buyers (without any corresponding obligation on the sellers).The sixth point is the matter of "aggregated rebates." There is involved in the extensive exercise of these restrictive practices private organisations who, from the public point of view, are necessarily irresponsible. They have no accountability to any public authority and no Minister can effectively answer for them in Parliament. This substantial list of restrictive practices means that, to that extent, economic functions are assumed by private trade associations and exercised by them entirely upon their own responsibility. The whole purpose of these practices is to restrict, to interfere with, the functioning of private enterprise, and so that principle is involved.
I want to say on that only that if we are to have a public sector of industry and a privately owned sector of industry—and that is likely to last for some time to come—[HON. MEMBERS: "Hear, hear."]—as is the publicly owned sector of industry, and it may well grow; but 2048 if there is to be a privately owned competitive sector of industry, which hon. Gentlemen opposite are very glad to hear about, then do let it be enterprise, and let it be free.
Hon. Gentlemen opposite cannot have it both ways. They cannot advocate free, competitive enterprise on an individualistic basis and then have the tacit assumption of these economic powers by private trade associations that interfere with the freedom of the competitive character of private industry. Moreover, there is involved the rights of citizens in production and in distribution. Their individual rights are interfered with. They are ordered about. They are required to conform with certain rules and regulations imposed upon them by trade associations, either sellers' trade associations, or producers' or buyers' associations.
As has been emphasised by the right hon. and learned Gentleman the Member for Chertsey (Sir L. Heald), the former Attorney-General, these associations have their own private courts, with their own procedure and their own decisions, and they are responsible to nobody. Above all, there is involved in all this the rights and the interests of the consumer. One of the things that worries me about modern economic society and modern industry is that I do not think that there is enough insistence on, and enough consideration of, the needs, the interests and the rights of the consumer, either by Government, Parliament or trade associations. There is nobody effective to speak for the consumer as much as there ought to be. He is liable to be neglected.
I think that it was the right hon. and gallant Member for Leicester, South-East (Captain Waterhouse) who said that in all the people who give evidence there was no long list of those who could be held to represent the consumer. There is truth in that. Apart from the organised voluntary consumer, the Co-operative movement, it is a bit doubtful who can represent the consumer. Consequently, another danger of these trade associations exercising these restrictve practices is the danger to the consumer who badly needs champions in these days of highly organised industry.
Even in the special case, which I would venture to mention, of the Co-operative movement, there is the most shocking discrimination on the part of some of these 2049 interests and trade associations. The so-called dividend of the Co-operative movement is not a dividend in the ordinary commercial sense of the term. As hon. Gentlemen know, what happens is that trade is done and the prices charged are much the same as the prices charged in competitive stores. At the end of an appropriate period, the Co-operative store discovers that after all its expenses are paid it has a greater amount of money in receipts than its expenses. It then returns to the consumer at the store—I experience this twice a year myself at the Royal Arsenal Co-operative Society—[HON. MEMBERS: "Oh."]—of course, I expected some sneers and jeers about the Cooperative movement from a few hon. Members opposite. One knows that they would certainly support discrimination against the Co-operative movement.
This repayment to consumers happens periodically, and it is merely a return of a payment which has proved to be higher than was necessary in order to meet the expenses and the cost of purchases by the Society. Because the Co-operative movement charges below the prices which they have fixed for a number of goods, these associations have refused to supply the Co-operative movement with goods within their jurisdiction.
I should like to hear from the Attorney-General what the Government propose to do about this and whether they will make statutory provision to prevent discrimination against this great form of thrift on the part of the people—not only the working class, but members of the middle-class as well. A lot of them, unfortunately, vote Conservative, but hon. Gentlemen opposite had better remember that these people can easily be persuaded to vote against them. Well, I do not know about it being easy—[Laughter.]—but if the Government propose to uphold discrimination against the voluntary Cooperative movement, with its form of thrift, let us know, and we will see that the co-operators know what is the attitude of the Government to the Co-operative movement.
Moreover, there was the point made by my hon. Friend the Member for Reading (Mr. Mikardo) about public tenders to our own local authorities, and, what is more, the damage being done to the export trade, even within the Commonwealth, by tenders at fixed prices 2050 to Commonwealth Governments, and so on. There is no point in the Government denationalising the iron and steel industry on the ground that they wanted to stimulate competition in the industry instead of having what they regarded as a great State monopoly—though it was not a complete monopoly—and then for them to be indifferent—that is if they remain indifferent—to the fact that tenders to local authorities for the supply of steel and for the erection of steel-framed structures are exactly the same. That completely disposes of the whole idea of competitive principles.
The truth is that the Government are in the soup. The Conservative Party is in a difficulty. Hon. Members opposite do not know whether to support free private enterprise or private cartel monopoly and trade association restrictions. To say that all this should go on without effective public action and a declaration of what practices are not permissible and should be prohibited, seems to me to be wrong.
I submit that we cannot continue to hand over this vast field of economic control to private trade associations. It is a matter for Parliament, for Government and for the public interest. To argue otherwise is to argue for social irresponsibility; to be anti-social and, of course, to be anti-Socialist, which is the same thing. All that may be natural for Conservatives, as the custodians of private capitalist interest, but it is not natural for Socialists to take that point of view.
There is a legitimate field for private trade asociations. I should not like it to be thought that there is no case for the existence of trade associations. I think that there is, and that there are valuable functions for them to discharge. For example, there is the exchange of opinions on trade problems, discusions on behalf of industries with Ministers, on public policy and on Government policy, negotiations with labour, and in connection with research, including scientific research. As a matter of fact, when I was Lord President in charge of civil science, I instituted a system of systematic grants to private trade research associations and established co-operation with them and the Government research organisations.
Therefore, it is not a question of there being nothing useful for the trade associations to do, but it is a question that 2051 it is not their business to take charge of economic planning outside of public supervision. We cannot submit to the doctrine that there should evolve private economic empires discharging functions which are appropriate to public and not to private authority. Yet that is what is happening and what some are advocating, namely, that there should be a toleration and an encouragement of these associations functioning as private economic empires without any public supervision.
I appreciate, of course, that no doubt there are many hon. Members opposite who are associated with these private trade associations and who are probably themselves personally involved in these restrictive economic practices. That is no doubt why the President of the Board of Trade has virtually rejected the majority Report and virtually accepted the minority Report which is ineffective.
§ Mr. P. Thorneycroft indicated dissent.
§ Mr. Morrison
The right hon. Gentleman shakes his head in dissent. I do not know whether he is disposed to accept the majority Report and to reject the minority Report, and whether he would like to say that is so. Or, it may be——
§ Mr. Morrison
I did, and the conclusion I reached from listening to what the right hon. Gentleman said was that he had virtually accepted the minority Report which, in view of the nature of the composition of the party behind him, was rather what I expected him to do. I should be pleasantly and very much surprised if, in view of his record and the nature of his party, the right hon. Gentleman were to accept the majority Report of the Royal Commission.
Moreover, the Government are not logical about all these things. They break up so-called monopolies such as the transport organisation, organisations which by no means are all monopolies, but which, however, are responsible in some way to the Government and Parliament. This Government do as little as possible in relation to private economic control and monopolies, while abandoning public supervision of the use of the nation's economic resources.
2052 The Commission, in its majority Report, is clear in its condemnation of these practices. For example, on page 83 of the Report, in paragraph 237, the Commission says:Apart from these considerations, we think that it is generally against the public interest for combinations of traders to be able to exercise the powers over individuals which some price maintenance associations have acquired, and for this to be done through private tritunals whose procedure cannot provide the safeguards which public justice requires. These powers are particularly open to objection when they are used against concerns which are not members of the association or have not entered into any contractual obligation to observe the rules enforced against them.That is a fairly clear and categorical condemnation of, at any rate, part of the practices of these associations. And in paragraph 240 in the majority Report, the Commission says:We have considered whether there may be circumstances in which our conclusion that the practices with which our reference is concerned are generally against the public interest may not hold good. We have not in the course of our inquiry come across any instances in which we were clearly satisfied that such practices were beneficial.That is fairly clear too. But the Commission does make allowance for the possibility that exceptional considerations may arise. Therefore, it recommends the prohibition of the objectionable practices and a chance for people to be heard to establish their case and for exceptional arrangements to be made.
Therefore, I think that the majority Report of the Commission is in all the circumstances fair and reasonable. Indeed, this is the opinion of the "Economist," which cannot be held to be consistently unfriendly to the party opposite. It says:In other words, it is proposed that the way in which some of the most respectable gentlemen in the country (including several Conservative M.P.s) now carry on their businesses should be declared by Parliament to be, in general, contrary to the public interest and illegal, leaving upon the onus of proving (if they can) that they are the virtuous exceptions. The Government in general, and Mr. Thorneycroft in particular, will show great courage if they push this recommendation through.The courage is wanting and, obviously, the Government are not going to push the recommendation through. Consequently, the President of the Board of Trade has made the unsatisfactory statement today from which it looks as though we are to get registration and that there may be 2053 reference of particular cases to that tribunal.
But that is bound to be slow. My hon. Friend the Member for Reading, in his persuasive speech, entered into his own estimates of time, and he is right. It may take an extraordinary amount of time.
§ Mr. Morrison
As my hon. Friend says, it was intended to take a long time. Consider the time that this Report has taken. Of course, it is over a wider field. The Report, incidentally, is able to quote from earlier reports of the Monopolies Commission which condemned similar restrictive practices.
Consequently, it is bound to be handled on the basis of either referring a case at a time to the tribunal or, if possibly half a dozen tribunals are set up—there is a limit to the number that can be set up—we might get half a dozen cases referred at a time. We had the optimism of an hon. Member opposite who spoke a little while ago and who thought that these cases would be settled in two or three days. He need not believe that. There will be considerable argument, especially if legal representatives are to be heard. It is likely that these cases will go for a long time. Literally, it may be twenty, thirty or even forty years before the ground is covered.
It could be so. Let us consider the enormous number of cases which the Commission has already had under consideration, and to which it refers. If these are to be treated fairly and equitably, and the arguments of the parties are to be adequately heard, it is obviously going to take a long time. It will be a substantial period of years before it can be done.
The truth is that many of these restrictive practices are a survival of the miserable years of the 1920s and 1930s, which were produced under Conservative rule after the First World War. [HON. MEMBERS: "Oh."] We all know it; it is a matter of historical fact. I know that hon. Members opposite do not like to be reminded of it. They say, "Do not look at the past; look to the future." I am all in favour of looking to the future, and I only mention, as an historical fact, that they were miserable times—and we know who was politically in control.
2054 These restrictive practices grew up at that time, when the economics of scarcity were being preached in the world of private enterprise, and were being exercised in the iron and steel industry, with the result that we did not have enough steel when war broke out. We do not want the economics of scarcity; we want the economics of plenty. [HON. MEMBERS: "Hear, hear."] I am very glad that that eminently Socialist sentiment should be cheered by hon. Members opposite. Ever since it began Socialism has been advocating the economics of plenty as against the economics of scarcity. It is Conservative capitalism which is preaching and practising the arts of restriction under these trade associations which are condemned by the Report of the Commission.
The Government are not living up to their own Election manifesto—even allowing for its woolliness and the fact that it is written in language deliberately meant to be explained in more than one way after the Election; though deliberately calculated to lead people to think that it meant something at the time of the Election. This is what the manifesto said—and it is a different sort of language and a different sort of spirit from that which we have heard from the benches opposite today. The manifesto of these champions of trade associations and restrictive practices says:We reaffirm our belief in the system of free competitive enterprise.Today they have been busily telling us that they do not believe anything of the kind. [HON. MEMBERS: "Look behind you."] If hon. Members are referring to my hon. Friend the Member for Cheetham (Mr. H. Lever), let me say how pleasurable it is to see him in his place. I know the facts about my hon. Friend's attendances, and I am very glad to see him here, even if he has said some things with which I do not agree.
The manifesto goes on to say:The Monopolies and Restrictive Practices Commission, first suggested and recently strengthened by the Conservatives, has started on the right path. Its recommendations have been acted upon. The Conservative Government has made a new approach by referring for examination crtain practices which cover a wide range of industry.
§ Mr. Morrison
All right; I shall take the time out of the speech of the Attorney-General.
The manifesto continues:This reference is likely to raise many issues ranging from the existence of private trade courts to the right of proprietors of branded goods to fix a uniform price for their products. These are complex questions. Our policy is to obtain an impartial statement of the facts and their effect on the national interest, and then to take the action appropriate in each case.That was clearly intended to lead those who are opposed to restrictive and monopolistic practices to suppose that the Conservative Party meant business. [HON. MEMBERS: "SO it does."] It does not mean business. The President of the Board of Trade has said either that he is going virtually to accept the minority Report or that he does not know what he is going to do. However, he will get his orders all right, just as the Minister of Fuel and Power got his orders at the beginning of the week——
§ Mr. Morrison
—just as the Minister of Transport and Civil Aviation has had his orders.
The Government's Motion means nothing. It says that the Report can be taken as a basis for consideration by the Government, but the Government ought to have considered it before. It was a live issue in Parliament before the Election. Indeed, they must have considered it to have been able to have included that passage in their Election manifesto from which I have just quoted. The Government have moved a Motion which virtually means nothing at all, and we strongly suspect that the Government mean to take no effective action in this matter. Therefore, we shall press the Amendment to a Division, in the belief that the majority Report of the Commission recommends the best course to take.
§ 9.32 p.m.
§ The Attorney-General (Sir Reginald Manningham-Buller)
Anyone considering the speech of the right hon. Member for Lewisham, South (Mr. H. Morrison) will have found in it very little to justify voting for the Amendment. There were in it only two references to matters in the Report which we are considering, and they were to the references to the Cooperative societies and to the chapter 2056 headings under which the Commission divided practices. I have some sympathy with the right hon. Gentleman the Member for Huyton (Mr. H. Wilson) in having to follow the President of the Board of Trade. [HON. MEMBERS: "Oh."] Yes, the same sort of sympathy one would have with a barrister who went into court with the wrong brief—an old one, dusty and covered with cobwebs.
The right hon. Member for Lewisham, South surprised me. I was surprised that he had not appreciated what my right hon. Friend said in opening the debate. The right hon. Gentleman suggested that my right hon. Friend had rejected the majority Report and accepted the minority Report. Both statements by the right hon. Gentleman were entirely inaccurate. He has done neither.
§ The Attorney-General
The solution which my right hon. Friend put forward accepts part of both Reports, as he himself indicated, and, in my view, it is a better solution than that put forward by either section.
The debate today has centred not on the nature of the practices to which the Commission referred, but on the steps to be taken towards the implementation of its proposals. That has been the main feature of a debate which has ranged widely and which has been most interesting. I join with the right hon. Member for Lewisham, South in what he said about the two excellent maiden speeches which we heard from my hon. Friend the Member for Epsom (Mr. Rawlinson) and the hon. Member for Loughborough (Mr. Cronin).
The right hon. Member for Huyton argued in favour of a general prohibition of the practices to which reference has been made. He said, with an inconsistency that is not without its charm, that general prohibition, of course, should not apply to the calico printers.
§ Mr. H. Wilson indicated dissent.
§ The Attorney-General
Yes, the right hon. Gentleman went on to say that it should not apply because of the circumstances in that trade. I listened to him with the greatest care. He then referred to the tribunal which is contemplated in my right hon. Friend's proposals as a "Heath Robinson" tribunal. I do not 2057 know why he used that description, but I will have something to say about that shortly.
In trying to wind up the debate for the Government, I propose to distinguish between the particular discriminatory practices to which both sections of the Commission referred and the methods of enforcement, and to deal first with what has been said about the methods of enforcement and what the majority and minority Reports recommend should be clone. It is the case, of course, that the majority and minority went outside their terms of reference, as the majority admitted, in recommending what should be done in implementing their conclusions, but I am sure that the House is glad that they did so, because by doing so they have posed a very real and important problem for our consideration.
As the House knows, the minority Report recommended registration of agreements involving collective discrimination, and registration was recognised by both the minority and majority as a good thing. The majority Report said that it… might lead the parties to abandon or modify arrangements that were likely to incur criticism, and to proceed with care when new arrangements were in contemplation.We have the whole of the Commission considering this matter speaking in favour of registration, although it is true that the majority did not recommend it because they thought they had found something better.
Not only did the Monopolies Commission recommend that, but we are asked in the Amendment which is in the name of the Leader of the Opposition to make arrangements for… ensuring the registration of all collective agreements which provide for minimum prices.…It is really a little inconsistent of the right hon. Member for Huyton to say, as he did today, that registration will not do anything—a view which was also expressed by the hon. Member for Reading (Mr. Mikardo).
§ Mr. Mikardo
I am sure that the right hon. and learned Gentleman does not want to misquote me. I said that registration and publication are not enough, which is very different from saying that they are of no use.
§ The Attorney-General
I am sorry if I did the hon. Member an injustice.
This is why the proposal which is put forward by my right hon. Friend is not the same as the proposal that is contained in the minority Report, because the minority stop with registration whilst our proposals go a stage further.
Before I proceed to say something about our further proposals, I would emphasise that I think that we are all in agreement that registration is a good thing. The majority of the Commission, of course, did not recommend it, because it would not fit in well with the scheme, which they propounded, of general prohibition. How will it work? Of course, legislation will be required to provide for registration and to make it compulsory. When that provision is made, those who are parties to these discriminatory agreements can be called upon to register them according to their nature, or, it may be, industry by industry. If they do not register them on the due date, then the practice will be illegal and unenforceable. That will be the sanction to secure registration.
As I said a moment ago, it is not intended to stop there. I agree with my right hon. Friend that it would not be sufficient to stop there. Those registered agreements must be examined and the next step, as we see it, must be to bring those which appear bad before some tribunal. That brings me to the next question which has been touched upon in the course of this debate, and on which my right hon. and gallant Friend the Member for Leicester, South-East (Captain Waterhouse) said a great deal, namely, what kind of tribunal should it be.
I have listened with interest to the different views expressed. Personally, I think that a strong case is required for the establishment of a special tribunal for a special purpose. There may be a divergence of opinion as to how the tribunal can best be constituted, but we want to secure a very high-powered and highly qualified tribunal to function on matters of this complexity. We shall give consideration to all that has been said as to the nature of the tribunal.
2059 It may be possible to deal with these matters in the courts or it may be outside the courts, I cannot say; and I am sure that the House would not expect me to say more now about the constitution of the tribunal.
§ Mr. H. Wilson
Will the right hon. and learned Gentleman kindly tell the House, now that he is giving us a little more information, what difference, if any, is there between this proposal for a high-powered, impartial tribunal to look at the case after registration and what the House agreed to seven years ago when it set up the Monopolies Commission for individual cases?
§ The Attorney-General
If the right hon. Gentleman will allow me I will deal with that if I have time. [HON. MEMBERS: "Do it now."] Certainly, I am trying to deal with it. I appreciate the point. It is important, but I am dealing first with the nature of the tribunal.
The next point which comes in its logical order is the question of what guidance should be given to that tribunal. The hon. and learned Gentleman the Member for Northampton (Mr. Paget) says that the issues would not be justiciable. That will depend, to a large degree, on the guidance given to the tribunal. It is, as my right hon. Friend said previously, desirable to lay down criteria. Having regard to the nature of the problem, that will not be an easy task, but it will have to be done if it can be done.
They will have to be carefully formulated because practices vary from industry to industry. Although they are divided by the majority Report into six distinct categories, as the Report pointed out, the practices are often inter-mixed and their effect varies very considerably from industry to industry, with some more harmful than others. It is a difficult problem and one we shall tackle with the intention of solving it.
I follow on to what is the next stage of this system. What is to be the result of the decision of the tribunal? It must be that if the tribunal decides against the industry or against those claiming to be allowed to continue the practice the continuance of this practice should be illegal and unenforceable. The burden of making out their case will be on those 2060 claiming to be allowed to continue it. The tribunal may permit the practice while condemning the methods of enforcement. As to the methods of enforcement, it may well be possible in our legislation to be fairly positive and definite.
Most people do not like a person who is not a member of an association, who has not voluntarily bound himself to certain terms and conditions, being stopped from earning his livelihood in the trade or industry of his choice by those engaged in that trade or industry; or being prevented by those with whom he desires to compete from entering a particular industry.
Nor, as is clear from what has been said in the House today, are private courts liked. It is only fair to say that these private courts which have been constituted can be looked upon as preferable to the ejection of a man from a trade by the operation of an association without any kind of impartial investigation. I know that in some cases steps have been taken to make these private courts as good as they can be, but the idea of private courts is repugnant. It is wrong that they should be able to inflict fines and penalties, particularly on persons who do not belong to their association.
On the other hand, it is no use, if a practice such as individual resale price maintenance is held to be a good practice, abolishing all the methods by which it can be enforced. The right hon. Gentleman the Member for Huyton has one view on individual resale price maintenance, the T.U.C. has expressed another. The majority Report does not indicate any way in which individual resale price maintenance can be effectively enforced if it is a good thing to have. That is one real problem which we have to tackle. We shall give, and indeed are giving, earnest consideration to methods of enforcement.
If we can find methods of enforcement which are effective without collective boycott and private courts, then, of course, it would follow that it would be possible to prohibit such methods, maybe by adopting some of the "non-signer" arrangements which are current in other countries. It means, however, that if one of the practices is desirable and ways have to be found of maintaining it, then if we cannot find any alternative method 2061 of enforcement—and I very much hope that one can be found—as the next best thing we must secure adequate supervision and control over the exercise of these sanctions.
§ The Attorney-General
I think that the hon. and learned Gentleman has misunderstood me. When I say "illegal" I mean that there will be some way of stopping those who partake of these forbidden practices from carrying them on.
§ The Attorney-General
By injunction. Surely the hon. and learned Gentleman will admit that this can be a very effective remedy. I was just going to say that there was one thing on which I agree with the hon. and learned Gentleman in what he said today——
§ The Attorney-General
He said we want to look at these things carefully. For once I find myself also in agreement with the "Economist," when it said:The need is not for a showy charge which, like Rupert at Edge Hill, will break through part of the line and leave it to form up again behind, but for a careful, sustained and penetrating advance, widening out as it progresses.I believe that the policy outlined by my right hon. Friend will satisfy those requirements.
Let me say, quite shortly, why I think that it will work in that way. Criticism has been advanced by the majority Report of the Commission of the case-by-case approach on the grounds that it is cumbersome, slow and unfair. This is a variant of that. First, a section will be required to register. One will pick out, presumably, the section where it is thought that the practices are worse. 2062 Directly they are registered, the appointment is made for bringing the worst ones before the tribunal. The tribunal's function will be different, as I see it, from that of the Monopoly Commission now set up. Before the tribunal the burden will rest on the industry claiming to be allowed to carry on these practices. The Monopolies Commission has to find out all the facts covering the whole range of the industry. Here, these agreements will be registered and will be available before the tribunal.
Personally, I would say that whether we accept the majority Report or the Minority Report, we still have to have a tribunal of this character. In my view, our proposals should act more speedily than the proposals contained in the majority Report. I think that the building up of case law by the tribunal will lead to a lot of firms and parties altering their agreements in the light of those decisions and may lead to many people not seeking to justify them.
May I turn to the majority Report as to implementation. The Report recommends, in paragraph 246, that there should be a general prohibition. It recognises that there will be a need for exemption. Towards the end of that paragraph it will be seen that it contemplates that the exemptions will be decided upon before the general prohibition is brought into effect. So, for each of these exemptions, it will be necessary to have a tribunal and an inquiry which may take just as long—one does not know—but if it has to cover the whole field of those who are claiming exemption it means that general prohibition will not take effect for many years to come.
Indeed, the majority Report seems to contemplate that difficulty because it goes on to suggest that there should be an interim procedure for making exceptions as well. As my right hon. and learned Friend the Member for Chertsey (Sir L. Heald) said, that really is a novel and astonishing proposition. Adoption of the majority Report will, I believe, mean that it will take quite as long as, and possibly longer than, under the scheme put forward by my right hon. Friend.
In that part of the majority Report, it is said that all we need do if we accept its recommendations is to establish a 2063 prima facie case. That looks very nice when one first glances at it. I do not know how one can establish a prima facie case without that case being heard. If it is to be heard, then we are back again with a tribunal. It is all very well for the hon. Member for Reading to try to deride this procedure which we are putting forward, but I believe, for the reasons which I have given, that it is a fair and proper procedure and will be generally welcomed throughout the country as a fair method of dealing with a very difficult problem. It is a procedure which, I believe, will be thoroughly effective in stopping practices which should be stopped and, in particular, in stopping methods of enforcement which certainly ought to be prohibited.
§ Mr. Mikardo
Will the right hon. and learned Gentleman go further and answer my direct question? Will he say in which year he thinks the first effective action will be taken under the President's proposal. Will it be earlier than 1959?
§ The Attorney-General
It will depend to a large degree on the amount of collaboration and assistance given to us by the hon. Gentleman.
In conclusion, I would say—I am sure we should all agree—that this has been a very valuable and interesting debate.
§ The Attorney-General
I ask the House to accept the Motion, which expresses the correct view of the Report, and to reject the Amendment.
§ 9.57 p.m.
§ Mr. Ellis Smith (Stoke-on-Trent, South)
As one who has been a member of no other political party, and as one who was born of the working class and regard with pride the opportunity of serving my people and my country, I look upon this assembly as a democratic one, where those elected should have an opportunity of speaking on behalf of the people. We live in a great country, made great not by "that lot" opposite but by the people of the country. In past years we have seen in France those who were prepared to sell their country. Here, those who support the continuation of monopolies, restrictions and trade associations are the people who would sell our country.
A great deal is said about the need to reduce the costs of production. There are trade associations which are strangling our productive industry, and in manufacturing industry management and organised workpeople of all grades are agreed that their hands are tied behind their backs before they start because of trade associations built up and supported by many right hon. and hon. Members opposite——
§ The Parliamentary Secretary to the Treasury (Mr. P. G. T. Buchan-Hepburn) rose in his place and claimed to move, That the Question be now put.
§ Question put accordingly. That the words proposed to be left out stand part of the Question—
§ The House divided: Ayes 316, Noes 255.2069
|Division No. 24.]||AYES||[9.59 p.m.|
|Agnew, Cmdr. P. G.||Bevins, J. R. (Toxteth)||Cary, Sir Robert|
|Aitken, W. T.||Bidgood, J. C.||Channon, H.|
|Allan, R. A. (Paddington, S.)||Biggs-Davison, J. A.||Chichester-Clark, R.|
|Alport, C. J. M.||Birch, Rt. Hon. Nigel||Churchill, Rt. Hon. Sir Winston|
|Amery, Julian (Preston, N.)||Bishop, F. P.||Clarke, Brig. Terence (Portsmth, W.)|
|Amory, Rt. Hn. Heathcoat (Tiverton)||Black, C. W.||Cole, Norman|
|Anstruther-Gray, Major W. J.||Body, R. F.||Conant, Maj. Sir Roger|
|Arbuthnot, John||Boothby, Sir Robert||Cooper, Sqn. Ldr. Albert|
|Ashton, H.||Bossom, Sir A. C.||Cooper-Key, E. M.|
|Astor, Hon. J. J.||Boyd-Carpener, Rt. Hon. J. A.||Cordeaux, Lt.-Col. J. K.|
|Atkins, H. E.||Boyle, Sir Edward||Corfield, Capt. F. V.|
|Baldock, Lt.-Cmdr, J. M.||Braine, B. R.||Craddock, Beresford (Spelthorne)|
|Baldwin, A. E.||Braithwaite, Sir Albert (Harrow, W.)||Crookshank, Capt. Rt. Hn. H. F. C.|
|Balniel, Lord||Bromley-Davenport, Lt.-Col. W. H.||Crosthwaite-Eyre, Col. O. E.|
|Banks, Col. C.||Brooke, Rt. Hon. Henry||Crouch, R. F.|
|Barber, Anthony||Brooman-White R. C.||Crowder, Sir John (Finchley)|
|Barlow, Sir John||Browne, J. Nixon (Craigton)||Crowder, Petre (Ruislip-Northwood)|
|Barter, John||Bryan, P.||Cunningham, S. K.|
|Baxter, Sir Beverley||Bullus, Wing Commander E. E.||Currie, G. B. H.|
|Beamish, Maj. Tufton||Burden, F. F. A.||Dance, J. C. G.|
|Bell, Philip (Bolton, E.)||Butcher, Sir Herbert||Davidson, Viscountess|
|Bell, Ronald (Bucks, S.)||Campbell, Sir David||D'Avigdor-Goldsmid, Sir Henry|
|Bennett, Dr. Reginald||Carr, Robert||Deedes, W. F.|
|Digby, S. Wingfield||Joynson-Hicks, Hon. L. W.||Price, Henry (Lewisham, W.)|
|Dodds-Parker, A. D.||Kaberry, D.||Prior-Palmer, Brig. O. L.|
|Donaldson, Cmdr. C. E. McA.||Keegan, D.||Profumo, J. D.|
|Doughty, C. J. A.||Kerby, Capt. H. B.||Ralkes, Sir Victor|
|Drayson, G. B.||Kerr, H. W.||Ramsden, J. E.|
|Dugdale, Rt. Hn. Sir T. (Richmond)||Kershaw, J. A.||Rawlinson, P. A. G.|
|Duncan, Capt. J. A. L.||Kirk, P. M.||Redmayne, M.|
|Eccles, Rt. Hon. Sir D. M.||Lagden, G. W.||Rees-Davies, W. R.|
|Eden, Rt. Hn. Sir A. (Warwick & L'm'tn)||Lambton, Viscount||Remnant, Hon. P.|
|Eden, J. B. (Bournemouth, West)||Lancaster, Col. C. G.||Renton, D. L. M.|
|Elliot, Rt. Hon. W. E.||Langford-Holt, J. A.||Ridsdale, J. E.|
|Emmet, Hon. Mrs. Evelyn||Leavey, J. A.||Rippon, A. G. F.|
|Errington, Sir Eric||Leburn, W. G.||Roberts, Peter (Heeley)|
|Erroll, F. J.||Legge-Bourke, Maj. E. A. H.||Robertson, Sir David|
|Farey-Jones, F. W.||Legh, Hon. Peter (Petersfield)||Robinson, Sir Roland (Blackpool, S.)|
|Fell, A.||Lennox-Boyd, Rt. Hon. A. T.||Robson-Brown, W.|
|Finlay, Graeme||Lindsay, Hon. James (Devon, N.)||Rodgers, John (Sevenoaks)|
|Fleetwood-Hesketh, R. F,||Lindsay, Martin (Solihull)||Roper, Sir Harold|
|Fletcher-Cooke, C.||Linstead, Sir H. N.||Ropner, Col. Sir Leonard|
|Fort, R.||Llewellyn, D, T.||Sandys, Rt. Hon. D.|
|Foster, John||Lloyd, Rt. Hon. G. (Sutton Coldfield)||Schofield, Lt.-Col. W.|
|Fraser, Hon. Hugh (Stone)||Lloyd, Maj. Sir Guy (Renfrew, E.)||Scott-Miller, Cmdr. R,|
|Fraser, Sir Ian (M'cmbe & Lonsdale)||Lloyd, Rt. Hon. Selwyn (Wirral)||Sharples, Maj. R. C.|
|Freeth, D. K.||Lloyd-George, Maj. Rt. Hon. G.||Shepherd, William|
|Galbraith, Hon. T. G. D.||Longden, Gilbert||Simon, J. E. S. (Middesbrough, W.)|
|Gammans, L. D.||Low, Rt. Hon. A. R. W.||Smithers, Peter (Winchester)|
|Garner-Evans, E. H.||Lucas, Sir Jocelyn (Portsmouth, S.)||Smyth, Brig. J. G. (Norwood)|
|Glover, D.||Lucas, P. B. (Brentford & Chiswick)||Soames, Capt. C.|
|Godber, J. B.||Lucas-Tooth, Sir Hugh||Spearman, A. C. M.|
|Comme-Duncan, Col. A.||Macdonald, Sir Peter||Speir, R. M.|
|Gough, C. F. H.||Mackeson, Brig. Sir Harry||Spence, H. R. (Aberdeen, W.)|
|Gower, H. R.||Mackie, J. H. (Galloway)||Spens, Rt. Hn. Sir P. (Kens'gt'n, S)|
|Graham, Sir Fergus||McLaughlin, Mrs. P.||Stanley, Capt. Hon. Richard|
|Grant, W. (Woodside)||Maclean, Fitzroy (Lancaster)||Stevens, Geoffrey|
|Grant-Ferris, Wg. Cdr. R. (Nantwich)||McLean, Neil (Inverness)||Steward, Harold (Stockport, S.)|
|Green, A.||Macleod, Rt. Hn. Iain (Enfield, W.)||Steward, Sir William (Woolwich, W.)|
|Gresham Cooke, R.||MacLeod, John (Ross & Cromarty)||Stewart, Henderson (Fife, E.)|
|Grimston, Hon. John (St. Albans)||Macmillan, Maurice (Halifax)||Stoddart-Scott, Col. M.|
|Grimston, Sir Robert (Westbury)||Macpherson, Niall (Dumfries)||Storey, S.|
|Gurden, Harold||Maddan, Martin||Stuart, Rt. Hon. James (Moray)|
|Hall, John (Wycombe)||Maitland, Cdr. J. F. W. (Horncastle)||Summers, G. S. (Aylesbury)|
|Hare, Hon. J. H.||Maitland, Hon. Patrick (Lanark)||Sumner, W. D. M. (Orpington)|
|Harris, Frederic (Croydon, N. W.)||Manningham-Buller, Rt. Hn. Sir R.||Taylor, Sir Charles (Eastbourne)|
|Harris, Reader (Heston)||Markham, Major Sir Frank||Taylor, William (Bradford, N.)|
|Harrison, A. B. C. (Maldon)||Marlowe, A. A. H.||Teeling, W.|
|Harrison, Col. J. H. (Eye)||Marples, A. E,||Thomas, Rt. Hn. J. P. L. (Hereford)|
|Harvey, Air Cdre. A. V. (Macclesfd)||Marshall, Douglas||Thomas, Leslie (Canterbury)|
|Harvey, Ian (Harrow, E.)||Mathew, R.||Thomas, P. J. M. (Conway)|
|Harvey, John (Walthamstow, E.)||Maude, Angus||Thompson, Kenneth (Walton)|
|Harvie-Watt, Sir George||Maudling, Rt. Hon. R.||Thompson, Lt.-Cdr. R. (Croydon, S.)|
|Hay, John||Mawby, R. L.||Thorneycroft, Rt. Hon. P.|
|Head, Rt. Hon. A. H.||Maydon, Lt.-Comdr. S. L. C.||Thornton-Kemsley, C. N.|
|Heald, Rt. Hon. Sir Lionel||Medlicott, Sir Frank||Tiley, A. (Bradford, W.)|
|Heath, Edward||Molson, A. H. E,||Tilney, John (Wavertree)|
|Henderson, John (Cathcart)||Monckton, Rt. Hon. Sir Walter||Touche, Sir Gordon|
|Hill, Rt. Hon. Charles (Luton)||Moore, Sir Thomas||Turner, H. F. L.|
|Hill, Mrs. E. (Wythenshawe)||Morrison, John (Salisbury)||Turton, Rt. Hon. R. H.|
|Hill, John (S. Norfolk)||Nabarro, G. D. N.||Vane, W. M. F.|
|Hirst, Geoffrey||Nairn, D. L. S.||Vaughan-Morgan, J. K.|
|Hope, Lord John||Neave, Airey||Vickers, Miss J. H.|
|Hopkinson, Rt. Hon. Henry||Nicholls, Harmar||Vosper, D. F.|
|Hornsby-Smith, Miss M. P.||Nicholson, Godfrey (Farnham)||Wakefield, Edward (Derbyshire, W.)|
|Horobin, Sir Ian||Nicolson, N. (B'n'm'th, E. & Ch'ch)||Wakefield, Sir Wavell (St. M'lebone)|
|Horsbrugh, Rt. Hon. Dame Florence||Nield, Basil (Chester)||Walker-Smith, D. C.|
|Noble, Comdr. A. H. P.||Wall, Major Patrick|
|Howard, Gerald (Cambridgeshire)||Nugent, G. R. H.||Ward, Hon. George (Worcester)|
|Howard, Hon. Greville (St. Ives)||Nutting, Rt. Hon. Anthony||Ward, Miss I. (Tynemouth)|
|Howard, John (Test)||Oakshott, H. D.||Waterhouse, Capt. Rt. Hon. C.|
|Hudson, Sir Austin (Lewisham, N.)||Ormsby-Gore, Hon. W. D.||Watkinson, H. A.|
|Hudson, W. R. A. (Hull, N.)||Orr, Capt. L. P. S.||Webbe, Sir H.|
|Hughes, Hallett, Vice-Admiral J.||Orr-Ewing, Charles Ian (Hendon, N.)||Whitelaw, W. S. I. (Penrith & Border)|
|Hughes-Young, M. H. C.||Orr-Ewing, Sir Ian (Weston-S-Mare)||Williams, Rt. Hon. Charles (Torquay)|
|Hulbert, Sir Norman||Osborne, C.||Williams, Gerald (Tonbridge)|
|Hurd, A. R.||Page, R. G.||Williams, Paul (Sunderland, S.)|
|Hutchison, Sir Ian Clark (E'b'gh, W.)||Pannell, N. A. (Kirkdale)||Williams, R. Dudley (Exeter)|
|Hyde, Montgomery||Peake, Rt. Hon. O.||Wills, G. (Bridgwater)|
|Iremonger, T. L.||Peyton, J. W. W.||Wilson, Geoffrey (Truro)|
|Irvine, Bryant Godman (Rye)||Pickthorn, K. W. M.||Wood, Hon. R.|
|Jenkins, Robert (Dulwich)||Pilkington, Capt. R. A.||Woollam, John Victor|
|Jennings, J. C. (Burton)||Pitman, I. J.||Yates, William (The Wrekin)|
|Johnson, Dr. Donald (Carlisle)||Pitt, Miss E. M.|
|Johnson, Eric (Blackley)||Pott, H. P.||TELLERS FOR THE AYES:|
|Johnson, Howard (Kemptown)||Powell, J. Enoch||Mr. Buchan-Hepburn and|
|Jones, A. (Hall Green)||Price, David (Eastleigh)||Mr. Studholme.|
|Ainsley, J. W.||Griffiths, David (Rother Valley)||Neal, Harold (Bolsover)|
|Albu, A. H.||Griffiths, Rt. Hon. James (Llanelly)||Noel-Baker, Francis (Swindon)|
|Allaun, F. (Salford, E.)||Griffiths, William (Exchange)||Noel-Baker, Rt. Hon. P. (Derby, S.)|
|Anderson, Frank||Grimond, J.||O'Brien, T.|
|Attlee, Rt. Hon. C. R.||Hale, Leslie||Oliver, G. H.|
|Awbery, S. S.||Hall, Rt. Hn. Glenvil (Colne Valley)||Oram, A. E.|
|Bacon, Miss Alice||Hall, John T. (Gateshead, W.)||Orbach, M.|
|Baird, J.||Hamilton, W. W.||Oswald, T.|
|Balfour, A.||Hannan, W.||Owen, W. J.|
|Bartley, P.||Hastings, S.||Padley, W. E.|
|Bellenger, Rt. Hon. F. J.||Hayman, F. H.||Paget, R. T.|
|Bence, C. R. (Dunbartonshire, E.)||Healey, Denis||Paling, Rt. Hon. W. (Dearne Valley)|
|Benn, Hn. Wedgwood (Bristol, S. E.)||Henderson, Rt. Hn. A. (Rwly Regis)||Paling, Will T. (Dewsbury)|
|Benson, G.||Herbison, Miss M.||Palmer, A. M. F.|
|Bevan, Rt. Hon. A. (Ebbw Vale)||Hewitson, Capt. M.||Pannell, Charles (Leeds, W.)|
|Blackburn, F.||Hobson, C. R.||Pargiter, G. A.|
|Blenkinsop, A.||Holman, P.||Parker, J.|
|Blyton, W. R.||Holmes, Horace||Parkin, B. T.|
|Boardman, H.||Holt, A. F.||Paton, J.|
|Bottomley, Rt. Hon. A. G.||Houghton, Douglas||Peart, T. F.|
|Bowden, H. W. (Leicester, S. W.)||Howell, Charles (Perry Barr)||Price, J. T. (Westhoughton)|
|Bowles, F. G.||Howell, Denis (All Saints)||Price, Philips (Gloucestershire, W.)|
|Boyd, T. C.||Hoy, J. H.||Probert, A. R.|
|Braddock, Mrs, Elizabeth||Hubbard, T. F.||Proctor, W. T.|
|Brockway, A. F.||Hughes, Cledwyn (Anglesey)||Pryde, D. J.|
|Broughton, Dr. A. D. D.||Hughes, Emrys (S. Ayrshire)||Pursey, Cmdr. H.|
|Brown, Rt. Hon. George (Belper)||Hughes, Hector (Aberdeen, N.)||Rankin, John|
|Brown, Thomas (Ince)||Hunter, A. E.||Reid, William|
|Burke, W. A.||Hynd, H. (Accrington)||Rhodes, H.|
|Burton, Miss F. E.||Hynd, J. B. (Attercliffe)||Robens, Rt. Hon. A.|
|Butler, Herbert (Hackney, C.)||Irvine, A. J. (Edge Hill)||Roberts, Albert (Normanton)|
|Butler, Mrs. Joyce (Wood Green)||Irving, S. (Dartford)||Roberts, Goronwy (Caernarvon)|
|Callaghan, L. J.||Isaacs, Rt. Hon. G. A.||Rogers, George (Kensington, N.)|
|Carmichael, J.||Janner, B.||Ross, William|
|Champion, A. J.||Jay, Rt, Hon. D. P. T.||Royle, C.|
|Chapman, W. D.||Jeger, George (Goole)||Shinwell, Rt. Hon. E.|
|Clunie, J.||Jeger, Mrs. Lena (Holbn & St. Pncs, S.)||Short, E. W.|
|Coldrick, W.||Jenkins, Roy (Stechford)||Silverman, Julius (Aston)|
|Collick, P. H. (Birkenhead)||Johnson, James (Rugby)||Silverman, Sydney (Nelson)|
|Collins, V. J. (Shoreditch & Finsbury)||Jones, Rt. Hon. A. Creech (Wakefield)||Simmons, C. J. (Brierley Hill)|
|Corbet, Mrs. Freda||Jones, David (The Hartlepools)||Skeffington, A. M.|
|Cove, W. G.||Jones, Elwyn (W. Ham, S.)||Slater, Mrs. H. (Stoke, N.)|
|Craddock, George (Bradford, S.)||Jones, Jack (Rotherham)||Slater, J. (Sedgefield)|
|Cronin, J. D.||Jones, J. Idwal (Wrexham)||Smith, Ellis (Stoke, S.)|
|Crossman, R. H. S.||Jones, T. W. (Merioneth)||Snow, J. W.|
|Cullen, Mrs. A,||Kenyon, C.||Sorensen, R. W.|
|Daines, P.||Key, Rt. Hon. C. W.||Sparks, J. A.|
|Dalton, Rt. Hon. H.||King, Dr. H. M.||Steele, T.|
|Darling, George (Hillsborough)||Lawson, G. M.||Stewart, Michael (Fulham)|
|Davies, Rt. Hon. Clement (Montgomery)||Ledger, R. J.||Stokes, Rt. Hon. R. R. (Ipswich)|
|Davies, Ernest (Enfield, E.)||Lee, Frederick (Newton)||Stones, W. (Consett)|
|Davies, Harold (Leek)||Lee, Miss Jennie (Cannock)||Strachey, Rt. Hon. J.|
|Davies, Stephen (Merthyr)||Lever, Harold (Cheetham)||Strauss, Rt. Hon. George (Vauxhall)|
|Deer, G.||Lever, Leslie (Ardwick)||Stross, Dr. Barnett (Stoke-on-Trent, C.)|
|Delargy, H. J.||Lindgren, G. S.||Summerskill, Rt. Hon. E.|
|Dodds, N. N.||Lipton, Lt.-Col. M.||Swingler, S. T.|
|Donnelly, D. L.||Logan, D. G.||Sylvester, G. O.|
|Dugdale, Rt. Hn. John (W. Brmwch)||MacColl, J. E.||Taylor, Bernard (Mansfield)|
|Dye, S.||McInnes, J.||Taylor, John (West Lothian)|
|Ede, Rt. Hon. J. C.||McKay, John (Wallsend)||Thomas, Iorwerth (Rhondda, W.)|
|Edelman, M.||McLeavy, F.||Thomson, George (Dundee, E.)|
|Edwards, Rt. Hon. John (Brighouse)||McNeil, Rt. Hon. H.||Timmons, J.|
|Edwards, Rt. Hon. Ness (Caerphilly)||MacPherson, Malcolm (Stirling)||Tomney, F.|
|Edwards, Robert (Bilston)||Mahon, S.||Turner-Samuels, M.|
|Edwards, W. J. (Stepney)||Mallalieu, E. L. (Brigg)||Ungoed-Thomas, Sir Lynn|
|Evans, Albert (Islington, S.W.)||Mallalieu, J. P. W. (Huddersfd, E.)||Usborne, H. C.|
|Evans, Edward (Lowestoft)||Mann, Mrs. Jean||Viant, S. P.|
|Evans, Stanley (Wednesbury)||Marquand, Rt. Hon. H. A.||Wade, D, W.|
|Fernyhough, E,||Mason, Roy||Warbey, W. N.|
|Flenburgh, W.||Mayhew, C. P.||Watkins, T. E.|
|Finch, H. J.||Mellish, R. J,||Weitzman, D.|
|Fletcher, Eric||Mikardo, Ian||Wells, Percy (Faversham)|
|Forman, J. C.||Mitchison, G. R-||Wells, William (Walsall, N.)|
|Fraser, Thomas (Hamilton)||Monslow, W.||West, D. G.|
|Freeman, Peter||Moody, A. S.||Wheeldon, W. E.|
|Gaitskell, Rt. Hon. H. T. N.||Morris, Percy (Swansea, W.)||White, Mrs. Eirene (E. Flint)|
|Gibson, C. W.||Morrison, Rt. Hn. Herbert (Lewi'm, S.)||White, Henry (Derbyshire, N. E.)|
|Gooch E. G.||Mort, D. L.||Wigg, George|
|Greenwood, Anthony||Moss, R.||Wilcock, Group Capt. C. A. B.|
|Grenfell, Rt. Hon. D. R.||Moyle, A.||Wilkins, W. A.|
|Grey, C. F.||Mulley, F. W.||Willey, Frederick|
|Williams, David (Neath)||Williams, W. T. (Barons Court)||Yates, V. (Lady wood)|
|Williams, Rev. Llywelyn (Abertillery)||Willis, E. G. (Edinburgh, E.)||Zilliacus, K.|
|Williams, Ronald (Wigan)||Wilson, Rt. Hon. Harold (Huyton)|
|Williams, Rt. Hon. T. (Don Valley)||Winterbottom, Richard||TELLERS FOR THE NOES:|
|Williams, W. R. (Openshaw)||Woodburn, Rt. Hon. A.||Mr. Popplewell and Mr. Pearson.|
Resolution agreed to.
That this House welcomes the Report of the Monopolies Commission on Collective Discrimination as a basis upon which Her Majesty's Government can formulate its proposals.