HC Deb 13 June 1956 vol 554 cc715-22
Mr. P. Thorneycroft

I beg to move, in page 15, line 17, to leave out from "necessary" to the end of line 20 and to insert: having regard to the character of the goods to which it applies, to protect the public against injury in connection with the consumption, installation or use of those goods;". This Amendment is no more than a clarification of subsection (1, a) of Clause 16. There was some discussion in Committee about what precisely was meant by: that the restriction is reasonably necessary for the protection of the public in connection with the purchase, consumption. installation or use of goods requiring special knowledge or skill in that connection; The effect of this Amendment would be to make the paragraph read: that the restriction is reasonably necessary having regard to the character of the goods to which it applies, to protect the public against injury in connection with the consumption, installation or use of those goods; In other words, we seek to make it demonstrably plain that it is the safety of the public in those respects to which the Court should have regard under this subsection. There are other arguments which can be advanced, but we are concerned here with the argument, which is fairly advanced from time to time, that the public is in need of protection. It was, indeed, the very point that was argued in the Report of the Monopolies Commission on Exclusive Dealing, that there were cases where safety was involved. This subsection now admits that argument as a proper one to be advanced before the Court.

Amendment agreed to.

Sir Wavell Wakefield (St. Marylebone)

I beg to move, in page 15, line 22, at the end to insert: or the products of such goods Clause 16 (1, b) refers to purchasers, consumers or users of any goods… I do not think it is quite clear that "any goods" would include the products of such goods. Let me mention as an example electricity produced by heavy electrical generating plant. If the products of such goods are not included, an industry would not be able to argue before the Court that the public were benefiting by the efficiency of the machinery sold in that industry. If that is so, I suggest that that is an unfair limitation. I hope that this Amendment may be considered to clarify the situation and that the Government will feel that it is acceptable and desirable.

Mr. W. S. Duthie (Banff)

I beg to second the Amendment.

10.15 p.m.

Mr. P. Thorneycroft

I accept in principle what my hon. Friend the Member for St. Marylebone (Sir W. Wakefield) says. I can, however, assure him that there is in fact no need for this Amendment. The sort of argument that he has in mind is fully admissible under the Clause as drafted. That is to say that under subsection(1,b)

that the removal of the restriction would deny to the public as purchasers, consumers or users of any goods other specific and substantial benefits or advantages… It would be perfectly admissible, although I am glad that my hon. Friend put down the Amendment to raise the point, to say that it applies to the machinery or the goods that are made from the machinery. I am not saying what weight would be attached to that argument in particular cases, and no doubt the nearer one was to the restriction the more force perhaps the argument would have, but at the same time it is fully admissible under the Clause as drafted and it is not limited to any particular goods.

Sir L. Ungoed-Thomas

I should have thought that the hon. Member for St. Marylebone (Sir W. Wakefield), if he had been following the President and the Committee stage of this Bill, would have realised perfectly well that by this time there is hardly any argument of any kind whatsoever that cannot be brought within the ambit of subsection (1, b). It is a very stupid business man who cannot rely on that subsection, so justifying almost any agreement he has made.

This subsection is the most pernicious provision in all the loopholes provided in this Bill, and I am not at all surprised at the answer which the hon. Member has received. We are only grateful to him for bringing forward the Amendment which exposes once more how really ridiculous is the provision of subsection(b).

Amendment negatived.

Mr. P. Thorneyeroft

I beg to move, in page 16, line 8, to leave out "substantial". I think that it would be convenient if we discussed, together with this Amendment, the Amendment in line 9, leave out from 'export ' to of ' in line 10 and insert business which is substantial either in relation to the whole export business of the United Kingdom or in relation to the whole business (including export business)". These Amendments are to meet a point raised by the hon. and learned Gentleman the Member for Leicester, North-East (Sir L. Ungoed-Thomas). He pointed out that under the Clause as drafted even damage to a minute export trade could in fact be used as an argument, whatever weight was attached to it, in favour of justifying a particular restriction. We now seek to get over that difficulty, and, I think, successfully, by somewhat altering the wording of the Clause and saying: That, having regard to the conditions actually obtaining or reasonably foreseen at the time of the application, the removal of the restriction would be likely to cause a reduction in the volume or earnings of the export business which is substantial either in relation to the whole export business of the United Kingdom or in relation to the whole business (including export business) of the said trade or industry;… I think that effectively meets the very pertinent point which the hon. and learned Gentleman put during the Committee stage.

Sir L. Ungoed-Thomas

It is extraordinary to hear the President say that this was to meet an objection which was raised during the Committee stage, the objection being that the Clause as it stands was not directed to a substantial reduction in the volume of the business of the United Kingdom or the trade as the case may be, and that the right hon. Gentleman proposes to cure that objection —the objection that it is not substantial —by omitting the word "substantial" from the Clause. That really is a rather odd provision.

I cannot understand why he proposes to leave out the word "substantial". That word, in so far as it is directed to the kind of trade we want, is obviously an important word. The President proposes to leave out the word "substantial". He proposes that the paragraph should read: …a reduction in the volume or earnings of the export business… Then, I agree, he does use the words "which is substantial", and the paragraph continues: which is substantial either in relation to the whole export business of the United Kingdom… So far, of course, we are in complete agreement. It goes on: or in relation to the whole business (including export business) of the said trade or industry; If it is a substantial reduction, by reason of export trade or otherwise, and it is a substantial reduction as regards the trade or industry, that is sufficient. A trade or industry, of course, might be extremely limited. I cannot understand why the words should be: substantial … in relation to … the trade or industry". Why have those words? Why not make them "substantial in relation to the trade of the United Kingdom "? That is the approach, as I understand it, and the test which it is intended to impose here is the test of public interest, and whether there is a substantial loss to the United Kingdom as a whole. If that is the approach, why not just limit the provision to the United Kingdom, instead of going on to provide that the reduction may be sufficient if it is substantial in relation to the trade or industry?

One of two things ought to matter here. Either one should have the approach of the public interest, from the point of view of the United Kingdom, or one should have the approach that it is hard luck on a particular business if it is injured. But the approach here, in the latter part of this provision, is neither. It is neither the United Kingdom as a whole, because it may not apply to the United Kingdom as a whole—there may be no public injury at all, as the Amendment stands—nor, as the Amendment stands, is the approach from the point of view of industry. It seems to fall badly between two stools by saying, "the trade or industry." I should be very glad to have some explanation.

Mr. P. Thorneycroft

If I may say so, the hon. and learned Gentleman the Member for Leicester, North-East (Sir L. Ungoed-Thomas) has not understood what I wish to do. He may disagree with it, but I am anxious that he should understand it absolutely clearly, and the reason for it.

First of all, we all agree that if there were substantial injury to the export trade of the whole United Kingdom, no one in any quarter of the House of Commons would say that that was not a proper argument to advance. But, of course, it would be very difficult really to demonstrate in any one case substantial injury to the export trade of the whole United Kingdom. As the hon. and learned Member for Leicester, North-East and all hon. Members will know, our export trade, in the main, is made up of a vast number of quite small packets. The last thing one would wish to see is one small packet after another going down because, in the case of no one packet—and it is only one packet which would be considered at a time—could one show that there was substantial damage to the export trade of the whole United Kingdom. That would be a wholly inadequate provision.

In all the circumstances, what one has to do is to put in some provision which enables one to show that, in the case of any particular trade or industry. there is damage which is substantial either in relation to the whole export business of the United Kingdom or in relation to the whole business, including export business, of the trade or industry.

May I remind the hon. and learned Member for Leicester, North-East that the point he made to me in Committee. which was a very good and perfectly fair point, this being an honest attempt to meet it, was that I had gone much too far in limiting the thing simply to the export business, because one might have a trade or industry whose total turnover was infinitesimal; it might be very small, and perhaps 5 per cent. of its total production would go for export.

In those circumstances to show that a little of that, or even a substantial part of it, was lost could have no real impact or importance even when we accumulated it in case after case. That is an absolutely fair point, and we have amended the Clause so that the only case where it can he argued is the case of the substantial exporter. He has to be a substantial exporter, otherwise it could not possibly be shown that the injury was substantial in relation to the whole business, including the export business, of the trade or industry concerned.

We, thus, have the situation in which there are two arguments that can be put forward. There is the one with which we are all agreed but which I think will be very rare indeed—substantial damage to the whole of the United Kingdom export industry. The second is where there is a trade or industry, a substantial exporter, which is by the removal of these restrictions, likely to lose a substantial part of its whole business which, by implication, must in those circumstances be export business.

Sir L. Ungoed-Thomas

I agree at once that I made the point that it should cover the internal as well as the external business if what was intended to be taken as the criterion was the individual business. It would be utterly unjustifiable in the case of the individual trader. the individual business or indeed the individual industry, to take export as the criterion instead of export and internal trade. But that was merely meeting the right hon. Gentleman on the footing that the test was to be a private interest test and not a public interest test. If it is an export test it is a public test, and that test should be the United Kingdom position. With regard to the United Kingdom position, the right hon. Gentleman says that one cannot prove it in the case of the United Kingdom as a whole, but the Amendment preserves that as a test.

Mr. P. Thorneycroft

One test.

Sir L. Ungoed-Thomas

Yes, as one test, but surely the right hon. Gentleman does not pretend that one of the tests in his own Amendment, namely the United Kingdom test, is entirely nugatory. Of course, he does not do that. If it is not entirely nugatory, why should not that be made the general test? Why overlap and go on to include what is not a public interest test at all but a private interest test, namely the injury to the trade or industry? That is not a matter which should be included. It is not a public interest matter at all, and it is not within, as I say it should be, the policy of the subsection.

Mr. Thorneycroft

May I, by leave of the House, speak again to assure the hon. and learned Gentleman that this is a public interest test in both cases. Where one is judging the export trade of the whole United Kingdom, it is clearly public interest; but, equally clearly, where one is pleading the case of damage to the exports of a single trade or industry—it may be a small proportion of our total export trade, but it may be a big exporting industry in proportion to its total production—we cannot afford to see damage done in one trade after another.

10.30 p.m.

I am not asking the hon. and learned Gentleman to accept my argument, but I ask him to reflect on it and then I think he will see that the public interest is served in both instances.

Amendment agreed to.

Further Amendment made: In page 16, line 9, leave out from "export" to "of" in line 10 and insert: business which is substantial either in relation to the whole export business of the United Kingdom or in relation to the whole business (including export business)" —[Mr. P. Thorneycroft.]