HC Deb 02 May 1956 vol 552 cc417-30
Mr. P. Thorneycroft

I beg to move, in page 10, line 6, after "person", to insert: being— (a) a person". It may be convenient if, with this Amendment, the Committee discuss the proposed Government Amendments to line 8 and line 31.

The combined purpose of the Amendments is quite simple. It is to ensure that when the Registrar wishes to obtain information, and has reasonable cause to believe that a person has a registrable arrangement or agreement, he should be able to serve notice on an association as well as on a person. In the case of a trade association which is not an incorporated body, there is probably no substantial difficulty, since the agreement to which the association purports to be a party is probably the agreement entered into by the parties. In that case, it would probably be possible to serve it on the parties. But I think, and I hope that the Committee will agree, that it should be clear beyond a peradventure that if the Registrar wishes to do so, and thinks the information could be obtained from an association, he may be able to do that with an association as with any other party to the agreement.

Amendment agreed to.

Further Amendment made: In page 10, line 8, after "Act", insert: ; or (b) a trade association within the meaning of the said section five the members of which consist of or include persons carrying on business as aforesaid or representatives of such persons".—[Mr. P. Thorneycroft.]

Sir John Barlow (Middleton and Prestwick)

I beg to move, in page 10, line 23, at the beginning to insert "if".

The Temporary Chairman (Major Anstruther-Gray)

I think it would be for the convenience of the Committee if, with this Amendment, we discussed the next Amendment, in the name of the hon. Member for Huddersfield, West (Mr. Wade), to the same line, and the two following Amendments, to lines 25 and 30, in the name of the hon. Member for Middleton and Prestwick (Sir J. Barlow).

Sir J. Barlow

These three Amendments deal with what I consider to be a very important point. If the Registrar wishes to enter the business premises, or the home, as the case may be, of anyone to get information which he has reason to expect may be there, he has at present the right to authorise his representative to do so. It will be remembered that the right of entry in this country has always been very jealously guarded. In recent years it has been somewhat extended, perhaps more so than some of us would like; but we feel that, although his right of entry is absolutely necessary in certain cases, it should be carefully guarded.

For that reason, instead of the Registrar allowing his authorised representative to enter such premises, the effect of these Amendments is to secure the authority of the High Court on information on oath, to allow anyone to enter for this purpose. In my submission, this is a very important question. I hope that the President will see the significance of it and the need to accept the Amendment.

Mr. Donald Wade (Huddersfield, West)

This is a strange Bill. In a number of Clauses the draftsmen have shown a tenderness towards the parties to restrictive agreements. Furthermore, I fear that many agreements will not be caught by the Bill at all. But every now and then one comes across a Clause which is unexpectedly tough. This Clause has been dubbed "a snooping Clause" and comes into the category of tough.

Two questions are raised. One is whether the means justify the end, and when the means are illiberal I generally start with the assumption that they do not justify the end. The second question is whether the Clause will achieve the desired end. Whether the Registrar on his own authority should have the power to enter and search the premises of a firm where he thinks a document is to be found raises a point of principle. Permitting the Registrar to act without any application to the Court cannot be justified on any general principles.

However, one is forced to the conclusion that the procedure will not work satisfactorily, because if there is a firm which is not co-operating and which has some documents which it does not want to disclose, or an agreement which it wants to keep secret, it will be extremely difficult for any representative of the Registrar, who does not know the premises or where things are kept, to find what he wants. I therefore doubt whether the Clause will achieve the end desired.

For those reasons, the Amendment would be preferable to the present Clause. However, the difference between the Amendment and that in my name is that the Amendment refers only to documents. In my Amendment I refer to …documents, or any particulars or other information… If the Registrar considers that a certain firm or firms are not disclosing information which they should disclose, or that they are hiding some agreement, the Registrar should have power to call for a statement on oath. A party would be very reluctant to deny on oath that certain information existed. The word "document" by itself is not adequate. We should go a step further and include …documents, or any particulars or other information… If some wording could be evolved which would include that expression, I should be satisfied.

Sir Lynn Ungoed-Thomas (Leicester, North-East)

I feel a good deal of sympathy with the approach of the Amendment. I do not like the idea of being able to go into premises and obtaining information in that way. Here we have the advantage of having court proceedings at some stage. I know that we are now dealing with the position before court proceedings arise, but the distinction between these cases and the proceedings before the Monopolies Commission is that in this case at some stage there will be proceedings, and if there are proceedings the ordinary provisions about revealing documents and discovery, and so on, will apply.

The problem here is in the proceedings before the High Court proceedings come into operation. We are concerned about two things. The first is that the Registrar, who has to ferret out this information, shall have the means of so doing. It is a grave defect in the Bill that, as we suggested from this side of the Committee yesterday there should be, there is not an automatic penalty for failing to register when the duty of registering is imposed on the parties.

We are now facing the consequences of that failure to impose a penalty. As there is no penalty for failure to register an agreement, it is extremely important that the Registrar should be in a position to obtain information which he requires about the existence of an agreement. By his attitude towards our Amendment yesterday, the President has put us in a dilemma. How are we to obtain information so as to make registration effective where a party to the agreement chooses not to register, while, at the same time, avoiding procedure which is oppressive to the subject?

4.45 p.m.

We are in complete agreement with the approach that the procedure which is adopted should not be oppressive to the subject, that he should not be subjected to some sort of oppression by a Registrar, or some official or other. That is an intolerable situation, and it has resulted from the attitude which the Government have adopted towards our Amendment and from their failure to have any penalty for failure to register.

One does not want to throw the defects of the Government upon the shoulders of the poor subject and it seems to me that the suggestion put forward by the hon. Member for Huddersfield, West (Mr. Wade) is acceptable. It is not sufficient just to provide that the Registrar can go to the Court and get directions from the Court to do it. The whole Bill is cluttered up with delays by court procedure of one kind or another, court procedure about registration, about whether a contract is within the Bill, or not within the Bill—I shall not go through the whole rigmarole of court procedure which is involved.

I should have thought that a very sensible and reasonable course would be, if the Registrar thinks that there might be an agreement in existence, to follow the suggestion of the hon. Member for Huddersfield, West. It is reasonably effective and he will be a brazen person who will swear on oath about something and lie about it. It will be perfectly fair and will not be oppressive, because it will be done when the Registrar, who is a responsible official, has a reasonable case for thinking an agreement is in existence, and it will avoid the difficulty, delay and cumbersome procedure of court application.

Mr. P. Thorneycroft

I hope that the Committee will accept the Amendment. We can all agree that, if there is to be entry upon premises—if that be necessary—then it is right that the proper procedure of applying for a court order first should be undertaken. I think that that is right and that the Committee is united upon it.

The hon. Member for Huddersfield, West (Mr. Wade) really suggested an alternative procedure. What he really says is that instead of entering upon premises, we would arrive at the same end by getting the Registrar to order people to produce statements upon oath. That is a possible approach. I should like to carry that a stage further. There can, of course, be a procedure similar to that under the Companies Acts.

Under those Acts, or under a comparable arrangement, where the Registrar believes that registrable agreements exist, but is not satisfied with the information which he had obtained under subsections (1) and (2), he might be able to apply to the court for an order to examine persons believed to be parties to the agreement, and the court could then order the persons concerned to attend and be cross-examined about the matter.

That would have the advantage over the existing subsection that it would enable the Registrar to obtain information about oral as well as written agreements, and it would also have the advantage over the suggestion made by the hon. Member for Huddersfield, West that it would enable questions to be asked under proper court supervision as to what really was the situation. That would really be an alternative arrangement to this idea of entry, and it might be worth while considering whether that would not be the better way of doing it than an arrangement for entering everybody's premises. I do not think that they will always find very much if they do enter upon anybody's premises.

I suggest to the Committee, at this stage that as the Bill stands, we have the provision for entry, and we are all agreed that, if we are to have provision for entry, we must have a court order before it is done. Let us, then, accept the Amendment and get that state of affairs put right in the Bill. Meanwhile, I will consider the arguments put forward by the hon. Member for Huddersfield, West, which would seem to be the kind of thing which I was suggesting here, to see whether we could have an alternative arrangement which would obviate the necessity for people prowling about upon other people's premises. This is the same kind of procedure as under the Companies Acts, and it would enable parties, in such few case where there was real doubt, to be brought before the court and be questioned in order to discover whether the arrangements exist or not.

Mr. E. Fletcher

May I say that I personally welcome very much what the President has just said? I think it would be intolerable if the Registrar had a right of entry, and I think we are all agreed, on both sides of the Committee, that that would be entirely contrary to our conception of civil liberties and human rights. I am very glad to know that the President is prepared to accept the Amendment.

As my hon. and learned Friend pointed out, the dilemma in which we find ourselves on Clause 11 really stems from the weakness of Clauses 7 and 8, which were discussed earlier. Since the President has approached all these Amendments in such a conciliatory spirit and has undertaken to review the whole of the procedure, I hope also that in this context he will look with an open mind and with sympathy on the representations made to him yesterday with a view to putting a positive, specific obligation on the parties to the agreement to register. We believe that if that is made clear, specific and obligatory, it will go a long way to remove the possibility of doubt arising under the later Clauses of the Bill. I therefore hope that the President will take the opportunity of saying something about that.

May I also refer to the suggestion made about court procedure under the Companies Acts being pursued? It seems to me to be really more satisfactory than the proposal made by the hon. Member for Huddersfield, West (Mr. Wade) and I think it would help very much if there were introduced into this Bill some similar provisions and procedure which would enable the Registrar, in cases of doubt, to be able to summon persons and investigate matters in doubt and documents in his possession.

Sir L. Ungoed-Thomas

We all welcome the attitude adopted by the President of the Board of Trade towards these Amendments, but I want to make quite clear the point about which I was concerned in my earlier observations, when I suggested that the only remedy provided should not be by application to the court. That is the point I wished to make. Therefore, to leave the Amendment which the President is to accept on its own, in substitution for what is now in the Bill, is not good enough.

I am all in favour of the President accepting that Amendment, but I am cavilling at the right hon. Gentleman saying that it is necessarily an alternative to what has been suggested by the hon. Member for Huddersfield, West (Mr. Wade). The advantage of the hon. Gentleman's Amendment is that it avoids the cumbersome procedure of application to the court, and yet it is not at all oppressive to the subject. It would be a nice change to see in this Bill something that does not involve the procedure of the court.

I hope that the President will consider the possibility of including something on the lines of the Liberal Party Amendment, as well as the Amendment which he is now considering, because we want something as well as a remedy which involves application to the court. I welcome what he said to my hon. Friend the Member for Islington, East (Mr. E. Fletcher) about the Companies Acts. I hope it will be necessary, as it is certainly advisable, to make the Amendment which the right hon. Gentleman is accepting, because, after all, under that Amendment there will not be any oppression.

On his own showing, it is a matter which will go before the High Court, which will be discussed with the judge, who will obviously be extremely concerned to see that no oppression is involved and there is no hardship to the subject. There may well be cases in which it is desirable to have the right of entry, under every proper safeguard which the High Court judge provides. I therefore hope that the President will consider these Amendments, not necessarily as alternatives, but as possibly supplementary to each other.

Amendment agreed to.

Further Amendment made: In line 25, leave out from "section" to "inspect" in line 28 and insert: the High Court is satisfied by information on oath that there is reasonable ground for suspecting that documents which are material for the purposes of registration under this Part of this Act are to be found at any premises specified in the information, being premises on or from which the said person carries on business, the court may, on application made by any officer duly authorised in that behalf by the Registrar, grant a search warrant authorising any such officer named in the warrant to enter the premises at any time within one month from the date of the warrant, if necessary by force, to search the premises, and to".—[Mr. P. Thorneycroft.]

Amendment proposed: In page 10, line 30, leave out from "material" to end of Clause and add: as aforesaid (4) In the application of this section to Scotland, for any reference to the High Court there shall be substituted a reference to the Court of Session."—[Sir J. Barlow.]

Amendments to the proposed Amendment made: In line 3, after "Scotland", insert "and Northern Ireland respectively".

In line 4, at end add: or the High Court of Northern Ireland."—[Mr. P. Thorneycroft.]

Proposed Amendment, as amended, agreed to.

Mr. P. Thorneycroft

I beg to move, in page 10, line 31, at the end, to add: (4) In the case of any such trade association as is mentioned in paragraph (b) of subsection (1) of this section, a notice under that subsection may be given by the Registrar either to the association or to the secretary, manager or other similar officer of the association; and for the purposes of this section any such association shall be treated as party to any agreement to which members of the association, or persons represented on the association by such members, are parties as such. This is a consequential Amendment.

Mr. E. Fletcher

Is it just consequential?

Mr. Thorneycroft

Perhaps I should have said that we discussed this Amendment with an earlier Amendment.

Mr. Fletcher

I know that, but that does not prevent us discussing it further now, does it?

The Temporary Chairman

As I understand, it was agreed earlier by the Committee to take this and another Amendment together. I shall now put the Question on this Amendment.

5.0 p.m.

Mr. E. Fletcher

I do not want in any way to impede progress, Major Anstruther-Gray, but there was one matter which I wanted to discuss and which I do not think it would have been appropriate to raise until we came to this Amendment.

The Temporary Chairman

I think the hon. Gentleman will find that he has an opportunity quite soon when we discuss the Question, "That the Clause, as amended, stand part of the Bill."

Amendment agreed to.

Motion made, and Question proposed, That the Clause, as amended, stand part of the Bill.

Mr. E. Fletcher

Perhaps it will be convenient now to see where we have got to. Two points ought to be made. Broadly speaking, the first is whether the powers of the Registrar "to obtain information"—I am now reading from the rubric of the Clause—are adequate.

The second question, with which I want to deal first, is the materiality of the words that have been added about trade associations. Since Clause 11 was printed, we have, largely at my instigation—if I may take credit for it—inserted some words dealing with trade associations. I put down the Amendment in Clause 11, page 10, line 8, to extend the ambit of the Clause to trade associations. The President of the Board of Trade subsequently put down an Amendment of his own to introduce a new paragraph (b), which I must acknowledge is far better from the point of view of draftsmanship than mine was. It carries out the same idea and it has the effect of giving the Registrar power to obtain information from trade associations which he would otherwise not have been able to obtain, So far, so good.

What about these trade associations? I am not quite happy that even now the President of the Board of Trade or the Registrar has got the full powers that he ought to have and which we want him to have to deal with trade associations. Trade associations are amorphous bodies. They are not like individuals or companies with specific legal obligations. They are, by their nature, much more fluid. As everyone who has had any experience of restrictive practices knows, a great many of the evils that have arisen and that we are now trying to remedy arose from the activities of these associations.

Would the President of the Board of Trade consider—whatever may be the precise legal nature of these bodies and their legal constitution—whether he has got all the powers that he ought to have to deal with them? By the last Amendment, which we did not discuss, in page 10, line 31, the right hon. Gentleman very wisely has extended the Clause so as to enable him to serve a notice either on the: …secretary, manager or other similar officer of the association… I want him to consider whether such a notice, if served on any of these officers who, for all we know, may after all be mere flunkeys of the association, is really effective to bind the association, the members of it and those who control it. It is all very well to serve a notice on the secretary of an association, but some of these associations are so loose in their constitution that I am not at all sure whether the secretary is a responsible officer in the ordinary sense of the secretary of a limited company. He may be an honorary official, and the real power may reside elsewhere.

I am nervous about it. I have a feeling that, owing to the way in which the Bill is drafted, there may well be cases in which there are agreements—and as we know, some of these agreements will be verbal agreements and not written ones—between companies carrying on business. A great many of the evils against which we are legislating arise from loose verbal agreements, made by trade associations loosely organised, and imposed very rigidly, but not by any clear-cut legal documents, on their members.

This is the Clause, if any, which will enable the Registrar to probe into the agreements made by these associations. In its original form, trade associations were entirely outside the scope of the Bill. They have now been brought in, and the question we want to ask—and we merely ask it in this kind of inquisitive way in order to test the effectiveness of the provision—is whether it really goes far enough. As we said in discussing the Amendments, we are anxious to strengthen every Clause in the Bill. We are anxious that the Registrar should obtain all the information that is relevant to enable him to see that all these restrictive agreements are brought to the light of day and published.

It may well be that the machinery is adequate to ensure that written agreements are not concealed but are registered. I am not entirely happy about that. I should have preferred specific obligations on the parties to a written agreement to register it, and I hope that we shall still get that incorporated in the Bill before we have finished. But what we have found as we have proceeded is that the most sinister of the restrictive agreements which hamper the liberalisation of trade, and which hold up prices, are verbal agreements come to by trade associations which narrowly control their members. I am not at all happy that the Clause, as it stands, is adequate to give the Registrar power to require the information that he will want.

I have no doubt that when the Bill is enacted, inquiries will be directed to him by Members of Parliament, members of the public, and others as to restrictive practices which are causing injury to the public. He will have to take the initiative in getting the facts. He can give notice to the secretary, the manager and other officers. Is that adequate? What about the people who really direct these associations? What about the members? Why should not the members of an association, if necessary, be called upon to account under this new subsection?

I do not want to press the matter unduly, but, having ventilated the point which concerns us, I hope that the Government will consider the question between now and Report and see what steps can be taken to strengthen the Clause.

Mr. Philip Bell (Bolton, East)

May I tell my right hon. Friend how much I and many of my hon. Friends appreciate his acceptance of the Amendment dealing with the question of entry into premises? I know that the President of the Board of Trade is aware, and I hope that the Parliamentary Secretary remembers, that I felt strongly about this form of entry. I trust that this may form a happy precedent for the future, and that we shall not have brought up what was done for the bakers or for the sanitary inspectors in the past, or any of those old-fashioned methods of entering premises without warrants.

Mr. G. Darling

I do not want to enter into an argument with the hon. and learned Member for Bolton, East (Mr. Philip Bell). I am worried about whether this Clause is strong enough to achieve what we all want to achieve by the Bill, and that is to obtain the fullest possible information about restrictive practices which ought to be caught by the Bill and dealt with. I cannot read the amended Clause as clearly as it ought to be read, so I do not know whether it is strong enough.

We want three results from the Bill. First, by the act of registration we hope to see discarded a number of trade agreements that are restrictive. We hope that the parties to them, realising that the agreements will be unlawful according to the definitions in Clause 5, will discard them without any further ado. We also want to see, and I hope we shall see, that agreements where the parties concerned are not sure whether they ought to be continued because they may not be in the public interest will be brought into the open, will be discussed publicly, and a judgment given upon them.

Then there is the third group of agreements, those that are operated to some extent in secret, often without any formal arrangement of any kind, where one or two traders or industrialists get together and decide to fix common prices, and so on. Such agreements can be judged only by their results, because there is no evidence that they exist, since there may be nothing on paper. Is the Clause as drafted strong enough to get at the evidence, so that the Registrar will know that such agreements are being operated, and ought to be dealt with, or will it be necessary at a later stage of the Bill to tighten the Clause?

For instance, supposing in a county court it is discovered that a poor trader has been knocked about a bit by a group of industrialists who have either broken contracts with him or have forced him into contracts which, in the opinion of the county court judge, are wrong. The county court judge may say that this is something with which the Restrictive Practices Court ought to deal. How do we make sure that the Restrictive Practices Court will deal with the group of persons who have put that hypothetical trader in this position? Such a case may not arise, but I want to make sure that any activity contrary to the intentions of the Bill will be discovered and dealt with, and I am not sure that the Bill provides for that case.

I hope that either under this Clause or somewhere else in the Bill—we must leave it to the lawyers to decide where—we shall make sure that all kinds of agreements, written, private or secret, open or made behind closed doors and about which nobody knows except those who suffer from them, can be dealt with in the Restrictive Practices Court and brought to an end.

5.15 p.m.

Mr. P. Thorneycroft

The hon. Member for Islington, East (Mr. E. Fletcher) apologised for his drafting. He need make no apology for that because the Government have certain facilities which are not available to every hon. Member in the House, and so it is a little easier for them to draft some of these complicated Amendments.

Nevertheless the idea behind his Amendment and mine is exactly the same and is shared by all hon. Members. It is that if an association has information of an agreement of this kind, it should be treated in the same way as any other party to an agreement; so this Clause, which is designed to ensure that such information is made available, ought to include within it a provision whereby notice can be served upon an association.

That is now happily done and I think that the Clause is couched in the right form. The proper person is the secretary, manager or other similar officer of the association. If the members of the association are in a mutual agreement or arrangement of course the Registrar will be entitled to serve notice on any one of the members. The difficulty is that they might not be in such an arrangement, and the provision about the association is designed to deal with the case where there is no real evidence of a direct mutual arrangement, but where it was made on the basis of a recommendation by the association, or the other case in which the association itself had entered into the mutual restriction. So the Clause catches those cases which all hon. Members think we should properly catch.

I endorse the remarks of my hon. and learned Friend the Member for Bolton, East (Mr. Philip Bell). I think that the Amendment ensuring that, if powers are used, they are subject to the Court is a right and proper provision to put into the Bill. I am grateful to my hon. Friends for putting it forward.

In reply to the hon. Member for Hillsborough (Mr. G. Darling) I would say that nobody would suggest that we shall catch every arrangement in the world. We cannot do it. Even when the Committee has completed all the anxious work that it is doing on this Bill, I expect we shall find that there will be some loopholes somewhere and that something will get through. However, we want to ensure that the loopholes are as small as possible and that there are as few opportunities for evasion as possible. If the hon. Gentleman looks at the wording of Clause 5 he will see that we have spread the net fairly wide, and in Clause 8 (3, b) he will see how we deal with the oral as well as with the written arrangement.

I believe that this Clause, as amended with the assistance of the Committee, is a useful and workmanlike approach, and I hope that the Committee will approve it.

Question put and agreed to.

Clause, as amended, ordered to stand part of the Bill.