Clause 16.—(PRESUMPTION AS TO THE PUBLIC INTEREST.)

HC Deb 03 May 1956 vol 552 cc599-739

3.35 p.m.

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

I beg to move, in page 13, line 33, at the end to insert: of any one or more of the following circumstances, that is to say". This is barely more than a drafting Amendment. All it does is to indicate that to get through the first stage of proof the parties will have to show one or other of the matters set out in paragraphs (a) to (g). We shall be discussing the merits of each of those paragraphs, but I think that everyone in the Committee will agree that the parties would not have to prove all of them at once, and so we propose putting in these words.

Amendment agreed to.

Mr. Hector Hughes (Aberdeen, North)

I beg to move, in page 13, line 34, to leave out paragraph (a).

Paragraph (a) narrows the scope of the Clause and would reduce the benefits which are clearly intended by the Clause. It would prove difficult of construction and difficult of implementation, and would, therefore, cause delay and frustration in carrying out what are the manifest benefits of the Clause. The obvious purpose of the Clause is twofold: first, to construe in the widest way the meaning of the term "public interest"; and, secondly, to deem a registered agreement contrary to the public interest in certain cases and to place the burden of proving otherwise on the parties to the agreement. Those purposes can be defeated and, in my submission, will be defeated by a number of exceptions.

A great number of exceptions are included in the Clause, from paragraph (a) to paragraph (g). Paragraph (a) is in particular one of too limiting and damaging a character. It involves a number of definitions of phrases. It includes such expressions as "restriction," "reasonably," and "necessary," and speaks of …the protection of the public in connection with the purchase, consumption, installation or use of goods requiring special knowledge or skill in that connection. One of the difficulties which people who have to administer the Clause will have to face will be the definition of phrases of that kind. The definitions will involve interminable arguments and reference to Reports and other documents and probably statistics, all of which arguments will tend to delay decision and frustrate the purposes of the Clause. It will protract the hearing of issues arising from the Clause and will in every way delay and frustrate its manifest purposes.

I invite the Committee to omit this damaging paragraph (a) so that the Clause may have some reasonable chance of carrying out the beneficial purposes which are obviously intended by it.

Mr. Eric Fletcher (Islington, East)

I support the Amendment. We are now embarking upon one of the most important parts of a Clause which was very carefully analysed in a leading article in The Times yesterday under the significant heading, "How Straight are the Gates to Be?" In other words, we now have to consider the conditions which enable the trader to claim exemption from the provisions of the Bill on one or other ground that his restrictive agreements are not contrary to the public interest.

Our first criticism of paragraph (a) is that it is quite unnecessarily wide. As I understand, the genesis of this paragraph is a suggestion that originates from a paragraph in the Report of the Monopolies Commission. The Commission, in recommending that all restrictive practices should be condemned, recognised that there might well be some circumstances in which restrictive practices should be condoned. As I understand, paragraph (a) is an attempt by the President of the Board of Trade to translate into the terminology of the Bill the recommendation which is set out in paragraph 240 (a) of the majority Report of the Monopolies Commission.

3.45 p.m.

Throughout, we on this side of the Committee are critical of the Government because they appear to us to be unnecessarily lenient towards traders who engage in restrictive practices. Therefore, I hope that I shall not be wearying the Committee if I analyse for a few moments the precise recommendations made by the Monopolies Commission in that paragraph and then compare that with the much wider phrases which the Government have sought to use.

The Commission's words are worthy of quotation. They are: Where final consumers are not able to judge the standard of service which it is in their interests to demand from distributors, e.g., where they are unlikely to appreciate fully the risks resulting from faulty installation or service. Where special risks arise they are normally dealt with by special legislation. If in relation to particular goods this legislation is inadequate it can be strengthened and we think that it should not be necessary to have restrictive arrangements in addition. There may, however, be rare cases in which there is no legislation and it is more convenient, temporarily at any rate, that there should be restrictive arrangements so that it is not left only to the discretion of individual manufacturers or traders to decide on the standards of safety. Such arrangements should, however, specify precisely the standards to be observed and should secure that they are in fact observed. It will be appreciated from that paragraph that the general view of the Commission is that in so far as any restrictive practice may be sought to be excused on the ground that it requires some special technique or skill, that should be a matter in the ordinary case for legislation and should not be a ground for exemption under this Bill.

We on this side of the Committee agree with that view. We think that if there are these special cases and if existing legislation in inadequate to deal with them, existing legislation should be strengthened. In other words, we do not think that it is right, under the cloak of a quite rare and exceptional commodity requiring a particular technique, to give a general blanket exemption enabling restrictive agreements of that kind to escape from the ordinary prohibitions of the Bill.

I regret that the President of the Board of Trade has thought it necessary to include any of these paragraphs in Clause 16 at all, but in so far as he has thought them necessary, we condemn paragraph (a) in particular because we think that the right hon. Gentleman has inserted different words, which are much wider than is necessary and which go far beyond the recommendations of the Commission. The President says in paragraph (a) that one ground of exemption should be, 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… That goes far beyond what was suggested by the Monopolies Commission and, in our view, goes far beyond what is necessary.

We think that it opens the door to a large class of traders to seek from the Restrictive Practices Court exemption on the quite spurious ground that they are rendering a service or providing the public with a standard of quality which they could not render or provide without a restrictive agreement. Once we allow that argument to enter into the matter there is no telling where we can stop it, because throughout the ages the justification which manufacturers and traders have sought to urge for the maintenance of these restrictive covenants is that without them they could not serve the public.

This is pivotal and central to our approach to this Bill. We believe that throughout recent generations, at any rate since we became a great manufacturing country, manufacturers have sought to inflate prices, to charge the public excessive prices for goods, on the ground that unless they did so they could not maintain quality. That is the ground on which the motor car tyre manufacturers, the electric lamp manufacturers, and all the monopolists and quasi-monopolists who, inferentially at any rate, are being condemned by this Bill, have in the past sought to justify their malpractices. The ground has always been taken that it was necessary to do so to maintain the standard of service to the public.

In our view, that argument is bogus and should be condemned. We do not want any loophole in the Bill which will enable manufacturers and traders to urge that reason as an excuse for being freed from the obligations of this Bill. Not only The Times, in its leading article yesterday, but, indeed, all the Press—not merely the anti-Government Press but all of what I might call the objective, independent, fair-minded Press such as The Times, the Manchester Guardian, the Economist—have been critical of the construction of this Bill and of its details.

It has been pointed out over and over again by the Press that the Bill is full of loopholes, that it is a weak Bill, and that unless it is strengthened—which is the task to which we on these benches are committed in this Committee stage—the Bill will not serve the purposes which the President of the Board of Trade wishes it to serve, and I give the right hon. Gentleman personally every credit for his aspirations in the matter.

I hope that my hon. Friends will support this Amendment and that by our arguments we shall be able to convince the Government that if this Bill is to make sense, and if the evil of restrictive practices—which has been clogging British industry for so long and has been hampering us in our competitive efforts with other countries—is to be removed, it is essential that we should reduce the grounds on which anybody is able to argue that a restrictive practice is in the public interest. This is most important, and I hope that the Amendment will be accepted.

Mr. Charles Fletcher-Cooke (Darwen)

All this depends on the definition of the words "protection of the public", and on reading paragraph (a) one gets the impression that this largely limits it to the protection of the public against personal injuries. The purpose of this Clause, which is a reasonable one, is that in the case of dangerous goods—such as, for instance, a complicated wiring system—the public should not be confused and burn themselves. So it may be necessary to have provisions restricting the numbers of installers and suppliers to ensure that the goods are installed properly.

That is right, and I am sure that no hon. Gentleman opposite quarrels with that, in so far as it is not already provided for by public legislation. However, protection is an ambiguous word and there is a school of thought, advanced largely by the hon. Lady the Member for Coventry, South (Miss Burton), that the public requires much more protection. Presumably the public is unable to judge for itself as to the value of goods, owing to modern methods of packaging in various attractive ways, such as in cellophane covers. Thus, the public is reduced to a juvenile status, unable to decide for itself what is good value and what is not. If that kind of protection to the public is to be allowed as an excuse for restriction, it would be going rather far. I therefore ask my right hon. Friend to clarify the meaning of the word "protection".

Mr. P. Thorneycroft

I compliment the hon. and learned Gentleman the Member for Aberdeen, North (Mr. Hector Hughes) on having put the argument on this Amendment so precisely and clearly. I agree that we have now passed from the machinery of the Bill to the tests which have to be applied, and that we are all agreed that some tests have to be applied. They are desirable in any circumstances, but they must be as closely defined as possible if we are to have a Court.

Whatever the view about restrictive practices and arrangements I should have thought that there would have been unanimous agreement on all sides of the Committee that if the restriction was for the purpose of safeguarding the public against some injury, that would be acceptable. After all, the onus is upon the industry in this matter. It is fairly and squarely on the shoulders of industry. Industry has to come forward and say that these arrangements are necessary to safeguard the public.

I shall not try to prejudge what these cases would be, but I will take an example. Suppose the chemists entered into mutual restrictions to ensure that dangerous drugs were sold to chemists to make up rather than to grocers. On the whole, I think the public would feel that this was quite a reasonable arrangement. We would not want the wrong ingredient in a cough mixture, for instance. Again, if people who build houses decided that they would employ only electrical engineers to install the wiring in a house in such a manner that it is not burned down, they might have a stop list or an exclusive dealing arrangement. That would be a restrictive arrangement, but a sensible one and that is what this Clause is intended to provide.

I think that my hon. Friend the Member for Darwen (Mr. Fletcher-Cooke) put his finger upon the real point. I agree with him that the word "protection" is a little uncertain and too wide. Although it is not intended to do so, it could go further than the recommendation in the Report of the Monopolies Commission. We are concerned with other things later, but in this Clause I want us to be concerned with the safety of the public, Where an industry, or a man, can come along and show that a restriction is necessary for the safety of the public in some way or another, he ought to be admitted through that gateway.

I suggest to the Committee that on the Report stage we should substitute for the word "protection" the word "safety", and on that basis I hope that the Committee will reject the Amendment.

Mr. E. Fletcher

In my view, it would make matters much clearer if the word "safety" were substituted for the word "protection".

4.0 p.m.

Mrs. Barbara Castle (Blackburn)

I am sorry, but I do not think that the concession which the right hon. Gentleman has announced that he will make really covers the anxiety which we feel on this side of the Committee. We are agreed—or I hope we are—on the desirability of getting the maximum protection for the consumer. Indeed, as the hon. Member for Darwen (Mr. Fletcher-Cooke) pointed out, there have been a number of demands from various hon. Members on this side of the Committee that the President should take a good deal more interest in the consumer and in his or her need for protection than he has shown himself willing to take—protection through higher standards of manufacture. He has not been prepared to be very active on this matter.

If we were satisfied that a result of this subsection would be an improvement in the standards of installation of electrical or other goods which might affect the safety of the public, for instance, we should be behind it 100 per cent. But does the subsection ensure that? Even with the alteration of the word "protection" to the word "safety" we have no guarantee in the subsection that the arrangements made would result in increased safety.

We know perfectly well the arguments advanced by the manufacturers for the practice of having an approved list of dealers and wholesalers. They say that it is to ensure that the outlet for their goods is in hands which will deal properly with the public. That is the manufacturers' argument, and it is an argument which will be used with great forcefulness in connection with such goods as electrical goods, where the standards of maintenance and installation are so important.

The manufacturers who enter into these agreements have made use of these arguments in favour of them, but they are not necessarily the overwhelming considerations which the manufacturers have in mind. When the Government's policy on monopolies was first anounced I had long talks with Mullards, who manufacture radio valves, television tubes and other things, which are, of course, directly affected by our consideration of this kind of arrangement, in particular.

I had long and very frank discussions with them on the sort of arrangements which they make, both through the B.E.A. and, independently, with the dealers. One of the points which struck me was when they told me that they maintain an approved list of wholesalers and the criterion for remaining on that list is the amount of business the man does. They put this point to me, "We try to strike a reasonable balance between an adequate number of outlets to ensure fair competition without too much expense to us, for every additional wholesaler is an additional expense and an accounting cost."

I quote that not because I think they are the villains of the piece. On the contrary, I think they have very high standards. I quote it simply to show that the motive behind so many of these agreements is often the interest of the manufacturer rather than the interest of the public. Nevertheless, in this field the argument about the interest of the public would undoubtedly be advanced.

The manufacturers of electrical goods can urge the claim that they must have this restrictive control of outlets in the public interest and they can put forward all kinds of arguments, based on the fact that if there is cut-throat competition and reduced margins and competitive prices we shall not have the right sort of wholesaler who will handle the goods in such a way that the public will benefit.

That is the argument which they would use, but I am saying that in the manufacturer's mind there are very different considerations—considerations of easing his problems. It is, therefore, absolutely specious, in my opinion, for manufacturers to use the argument of public interest unless they take steps, which at present they do not take, to ensure that a system of a limited number of outlets, with guaranteed margins of profit, results in a higher standard of workmanship; and at present there is no such guarantee.

My hon. Friend the Member for Islington, East (Mr. E. Fletcher) has quite rightly pointed out that when the Monopolies Commission considered this matter it said, "This is an argument and we are prepared to listen". The President of the Board of Trade smiles, which I think shows his generally frivolous attitude to the public interest in this matter. If he had been concerned to pursue the public interest here he would surely have considered paragraph 240 (a) of the Monopolies Commission Report—which my hon. Friend has quoted—with much greater care. This is, surely the kernel of the matter.

First, the Monopolies Commission said this where public safety is involved there ought to be special legislation; it ought not to be in the hands of the manufacturers to provide devices. Indeed, if the President is to alter the words "protection of the public" to the words "safety of the public", the situation is even worse, because if the actual physical safety of the public is involved, then it is a matter which ought not to be left to private agreements, however supervised. It ought to be a matter for legislation. This Committee ought to step in and say that children's lives are possibly being endangered, or the physical security of the home is being endangered, because of the inadequacy of the present arrangements for the safety of the public; and that, therefore, legislation is necessary.

We all know that the largest number of accidents in this country takes place not on the roads but in the homes. If the President is taking the safety of the public as the criterion, therefore, this is a matter which above all, as the Monopolies Commission says, ought to be dealt with by legislation. The Monopolies Commission went on to say: There may, however, be rare cases in which there is no legislation and it is more convenient, temporarily at any rate, —it made that qualification— that there should be restrictive arrangements so that it is not left only to the discretion of individual manufacturers or traders to decide on the standards of safety. It adds: Such arrangements should, however, specify precisely the standards to be observed and should secure that they are in fact observed. There is no guarantee in the subsection that the intentions of the Monopolies Commission in this respect will be met. I suggest very seriously that we are laying ourselves open to a situation in which a group of manufacturers could go to the Restrictive Practices Court—particularly bearing in mind that they have to go to a court and not to a tribunal created out of the Monopolies Commission, which is used to this kind of specious argument—and argue that they are acting solely from the highest motives and that no commercial considerations enter into it. They could argue that nothing could be further from their minds and that they were concerned merely with the safety of the public by maintaining the standards. That is the argument they could advance, without having to produce a shred of evidence that there is, in fact, any supervision over the standards of work and maintenance employed, or anything else.

Mr. P. Thorneycroft

indicated dissent.

Mrs. Castle

The President shakes his head, but has he met the point? In what way is this opinion of the Monopolies Commission to be met? What is to be done about the precise definition of standards and the insistence that they are observed?

We have here a loophole through which, purely on the say-so of manufacturers, agreements which do not protect the public can be escape. I do not believe that the alteration the President says he will make meets the really important point which my hon. Friends have raised.

Mr. J. Grimond (Orkney and Shetland)

I am very glad that the President has accepted the suggestion of the hon. Member for Darwen (Mr. Fletcher-Cooke). I am sure everyone must have realised that this Clause, as originally drafted, was far too indefinite and wide in its terms. The lawyers will have a very profitable field day, I think, in any case; indeed, it is rather public-spirited of the hon. Member for Darwen to reduce his fees in this way, when no doubt many arguments could have been adduced for a very long time about the precise meaning of the expression "the protection of the public".

The Amendment which he proposes will make it clear that the Clause refers only to the safety of the public, but I will go further and say that the remainder of the paragraph might well be reconsidered. It goes on to say: …in connection with the purchase, consumption, installation or use of goods requiring special knowledge or skill in that connection. I do not know what "in that connection" means in that paragraph. If it be said that there may be cases where some restrictive practice is required to prevent the public harming itself, surely that requirement arises whether the goods require special skill or knowledge or not. It can be argued that no special skill or knowledge is required to plug in an electric plug; indeed, I can even do it myself; but if somebody puts on the market a plug which the moment one tries to switch on the electricity, blows one up, although what is done does not require special skill or knowledge, that is certainly an instance where the public needs protection.

I feel that the President has not answered the point. We have already some protection at common law against dangerous objects on the market, and, if that is insufficient, there are in existence the appropriate special statutes, and more can be passed, by which the Government does protect the public. This is very important. I agree with those hon. Members who have said it is not the business of manufacturers to set up restrictive price rings or whatever it may be, and then to try and justify them by arguing that they are protecting members of the public from blowing themselves up. That, surely, is a matter for the common law or the Government. It does seem to me that the President has not really dealt with that question.

My hon. Friends have an Amendment upon the Notice Paper which would make it justifiable to continue a restriction upon the ground that it protected the public only if there were no other way of doing it. This is not the time for me to argue that, but I do think it should be made clear that there must be some special reason—which, at the moment, completely escapes me—justifying leaving this matter in the hands of the manufacturers. Personally, I should have thought they were the worst people to be the judges. I must confess that, offhand, I found it extremely difficult to visualise the sort of case in which this paragraph could be justified, and I rather hoped that the President might say a word on the point.

Mr. Wilfred Fienburgh (Islington, North)

I am happy to accept the word of the President of the Board of Trade at its face value and to believe him when he says that in this Clause he is concerned really with the safety of the public. From that, I would at once argue that the proper custodians of the safety of the public are the Members of this House of Commons and of another place. Where we have responsibilities for the public safety, they are fulfilled only by bringing before the representatives of the people in this House provisions designed to secure the greater safety of the public.

Here, in this Clause, we have the worst of all possible worlds, because, by insisting that the whole matter of restrictive practices shall be shoved off on the judiciary and shall be removed from the purview of the Board of Trade, the Minister takes the matter away from any reasonable control by Parliament; and in so doing he is effectively reducing the amount of control by the representatives of the people over these matters which, on his own words, concern the safety of the public.

4.15 p.m.

I will take the analogy of road safety. There are various lethal instruments being driven about the roads of this country all the time, and they execute a fair measure of mayhem and slaughter. We do not, however, suggest that the manufacturers of motor cars, London Transport Executive, and retailers of motor cars should come together and agree a series of restrictive practices which will improve or guarantee safety on the roads. We do not allow garage men plus public service vehicle operators plus motor car manufacturers to come to agreements whereby motor cars shall not be sold to people who have many convictions for drunkenness.

We do not allow them to say they will not sell motor cars to people who have shown themselves in the past unfit to drive a motor car. We do not allow them to lay out pedestrian crossings on the road. We say that this is a matter in which the public safety is involved, which should not be left to agreements between manufacturers, whether they can be sustained in Court or not. We say that it is the responsibility of the representatives of the people whose proper concern it is.

As my hon. Friend the Member for Blackburn (Mrs. Castle) and my hon. Friend the Member for Islington, East (Mr. E. Fletcher) have pointed out, this is a matter in which the Monopolies Commission was absolutely right. We see no reason at all why the President of the Board of Trade should be unwilling to accept the recommendation of the Commission. We say that where there is an issue involving public safety, the responsibility for drafting legislation to protect the public rests upon Parliament, and the way to handle the problem is not through restrictive practices arrived at for quite other purposes by private manufacturers, but to place the responsibility and retain it in Parliament where it belongs.

Mr. M. Turner-Samuels (Gloucester)

I ask the President to look at this particular paragraph again and ask himself whether it is really necessary. I do not doubt for a moment that the object he has in mind is a good one and his intention in putting in this paragraph is well meant. But I ask him to consider very carefully whether it is, in the words of the paragraph itself, reasonably necessary.

This is an exemption Clause. In any legislation where it is proposed to exempt either a class of goods or a class of persons from the operation of some Measure, the greatest possible care must be taken. Sometimes, I agree, it is necessary to allow exemption because there is no counter or alternative provision which would cover the matter but I put it to the President that in the circumstances here the proposed paragraph is unnecessary.

The machinery of the Bill is designed to work in such a way that all restrictions will come within the cognisance, examination and decision of the Court. If there is a restriction of the nature specified in the paragraph in very special circumstances, the Court would, of course, be asked to look at that. If, in all the circumstances, for the safety or protection of the public—and I think it matters little which expression we use—it was shown to be essential that that stipulation should be there, then the Court would uphold it. The onus would be upon the party who desired to sustain the restriction.

As this Clause intends it should be, the onus will be put upon him to satisfy the Court that the circumstances are exceptional and that the particular restriction should stand, without this paragraph being in the Clause at all. Therefore, I cannot see why it is necessary to put in this provision. On the other hand, I do see that if there is an exemption Clause of this kind, there might be a lot of hocus-pocus about alleged necessary restrictions. I ask the President of the Board of Trade to be rather cautious about this matter, where the words of the paragraph are superfluous and where, if they are kept there, this legislation may work, in allowing possible loopholes for that sort of hocus-pocus.

There is another element in the matter which the President should also consider. In most of these instances, where we have articles which are dangerous to the public as to content or user and which might be used by either children or adults in a way that would lead to danger, there is almost always special legislation to deal with that. It is only in the rarest possible case that there is any likelihood that such a matter would not be covered by legislation. In those circumstances, the facts would come under the consideration of the Restrictive Practices Court to be decided. The Clause is, consequently, unnecessary and, as I say, may prove very dangerous and not beneficial to the public interest.

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

As the President of the Board of Trade said, we are, of course, dealing with one of the most important and difficult Clauses in the Bill. It is a Clause which shows up the fundamental defects in the Bill. I agree with the right hon. Gentleman that when this decision is put in the hands of the Court, then tests and carefully defined cases have to be laid down. The difficulty is in deciding fairly and properly on the tests. It is an innate contradiction in the Clause itself which makes any answer to the problem which is posed by the method which the President has chosen impossible of solution.

In other words, one cannot, in the last resort, put a matter of public interest into terms which are justiciable, because one cannot satisfactorily define them. So, at whatever conclusion we eventually arrive on the actual tests in the Clause and the actual formation of the Clause, no solution will be satisfactory. It is with that rather sceptical attitude that I approach the Amendments, as well as the Clause.

There is another difficulty which confronts us, particularly in connection with paragraph (a). It has already been mentioned by my hon. Friend the Member for Blackburn (Mrs. Castle). It is the conflict between the public interest and the private interest in our economic organisation as we now have it. I am not making any sort of cheap point, but just trying to face the difficulty which is inherent in approaching this problem. The public interest, of course, is to protect the public interest. Our economic organisation is such that a commercial interest may be different.

I am not, of course, blaming the directors of a company for trying to make as much profit as they can. It is their job and their duty; and it would be a breach of duty if they did not try to do it. [HON. MEMBERS: "No."] Of course it is. They are not there as a philanthropic organisation. The hon. Member for Wokingham (Mr. Remnant) seems to think that the directors of a company are a philanthropic organisation. They are nothing of the kind. They are hard-headed businessmen, whose job is to make profits. We can argue whether profits are a good thing or not, but that is an entirely different argument. I am not criticising the directors of companies.

The Temporary Chairman (Major W. J. Anstruther-Gray)

We are not discussing the directors of companies on this Amendment.

Sir L. Ungoed-Thomas

We are here considering the private interests of company organisations, the purpose of company organisations, on the one hand, and the public interest on the other. The difficulty in the Clause—and my hon. Friend the Member for Blackburn put a finger on it, as did my hon. Friend the Member for Islington, North (Mr. Fienburgh)—is that one is trusting a question of public safety to private organisations whose purpose is not public safety, but an entirely different purpose.

I am not casting any reflection upon companies or the directors of companies, who may be the most philanthropically-minded people in the world. All I am saying is that it is not their job to do so. We should not leave it to an organisation by restrictive practices to cover matters of public safety. That is a matter with which a body responsible for that purpose should deal.

Mr. Anthony Fell (Yarmouth)

Surely the hon. and learned Member for Leicester, North-East (Sir L. Ungoed-Thomas) will agree that it is normally in the interests of directors to produce things which are safe.

Sir L. Ungoed-Thomas

It may or may not be. For instance, we have the simple case of electric fires and guards for them. That is a very simple case which will be within everybody's recollection and which happened in recent months. We had to deal with them, because it was a matter of public safety. The hon. Member for Yarmouth (Mr. Fell) should not be so touchy about it. I am not making any kind of personal allegation at all. The simple point is that matters of public safety should not be left to organisations whose concern is not public safety, but a very different concern. It should not be left to them as a by-product and, above all, it should not be left to them to be used to justify practices which in the Bill are regarded as fundamentally undesirable.

I have been led away by interventions. I do not like the approach of justifying restrictive practices on the ground of public safety, because public safety should be dealt with in other ways; but we recognise—and I concede this to the President at once—that there are cases which legislation does not sufficiently cover. Therefore, it is reasonable, as long as there is legislation which does not cover a particular piece of protection, that there should be sonic provision such as that in paragraph (a). We could not say that in cases of this kind, even in this rather haphazard way, if we are leaving private concerns to ensure protection and that is the only method by which the safety of the public is ensured, we should, nevertheless, do away with it. Of course, we cannot.

4.30 p.m.

We are concerned with what happens after registration becomes available to deal with it. I should imagine that application could be made by the Registrar for variation of this order, and I suppose that that will be done. We should like to hear a little more on that point. How would the machinery work? Would the Registrar inform the President of the Board of Trade that a particular concern came within paragraph (a) for this or that reason? Would the right hon. Gentleman consider whether the point could be dealt with by legislation? At what stage of the proceedings should it be dealt with? Or are we to get a whole range of restrictive practices justified on a ground of safety which could be dealt with perfectly happily by legislation without having this tremendous incubus of restrictive practices at all?

We were relieved to hear that the President of the Board of Trade proposes to limit this paragraph to cases of safety and not of general protection. The hon. Member for Orkney and Shetland (Mr. Grimond) referred to the last words of the paragraph; I should have thought that the retention of them was valuable, because the purpose of the practice is to ensure that the person handling the goods has the necessary special knowledge. It does not deal with inanimate objects, but with persons.

Mr. P. Thorneycroft

This discussion has taken a little time. We need to get on with the Bill. I gathered from the remarks of the hon. and learned Member for Leicester, North-East (Sir L. Ungoed-Thomas) that everybody agrees there have to be tests. He speaks of the methods adopted, but I have never understood from him that the provisions we discussed before were to be left so lax that the public interest would be left wide open. I must give him credit for seeking some kind of definite approach to the matter.

Sir L. Ungoed-Thomas

If the ultimate decision were with the Government, as we said it should be, we should have a much more flexible system than this hidebound system in Clause 16.

Mr. Thorneycroft

It would throw a lot of very wide questions on to some lay tribunal. The public must judge. It is agreed that under this system, and, I should have thought, under any other, we must have tests and they have to be clearly defined. Would any fair-minded person say that it should not be open to an industrialist or supplier to ask whether a particlar restriction is in the interests of the safety of the public and is reasonably necessary?

If legislation already safeguards the public interest, the industrialist will not get very far with that argument. That is the short answer. The Registrar will say, "Look at the Act dealing with electric wiring. That covers the whole thing." The only way in which this argument could be sustained would be to show effectively before the Court, presided over by a High Court Judge, that the restrictions reasonably necessary for the safety, as it now will be, of the public. in connection with the purchase, consumption, installation or use of goods requiring special knowledge or skill. I agree that those last few words are important. This was recommended by the majority Report of the Monopolies Commission, and it is right upon its merits. Any section of the Committee ought to hesitate before publicly recording an opinion against it.

Sir L. Ungoed-Thomas

May we have the answer to the question I put to the President of the Board of Trade? In spite of his great debating skill, he has not answered it. We are not concerned about the position where an Act of Parliament already provides for safety. It does not require a great deal of intelligence to come to the conclusion that in that case the Court would take it into consideration and there would not be very much chance of an applicant succeeding under paragraph (a). The right hon. Gentleman could have assumed that.

We are concerned with the case which the President has not answered, where there is no Act of Parliament applying. What is to happen? Is there to be an arrangement by which the Registrar will inform the President of the Board of Trade, who will then consider whether the case should be dealt with by Parliament so that we do not have all this incubus of restrictive practices? The matter could then be dealt with quite shortly and briefly in an Act of Parliament. We are concerned with this liaison between the Registrar and the right hon. Gentleman. It is a substantial point.

Provisions in the Bill allow variation of an order. It may very well be that legislation could not be brought in until the order has been made. One can easily envisage circumstances of that kind. I am not arguing the point that the Act should necessarily be brought in before the order is made to avoid the order having to be made. We are concerned with the liaison between the Registrar and the President so that the right hon. Gentleman can keep the matter under review and in appropriate cases we should not have unnecessary restrictive practices.

Mr. Thorneycroft

The Registrar will certainly have responsibilities in this matter, but I am not going to be drawn into any suggestion that the Board of Trade should start directing the Registrar.

I apologise for not answering the point put by the hon. and learned Member. It escaped me. He asked me about variation. I am not dealing with it, because we shall do so on Clause 17. As to the point about material change in the circumstances. I express the opinion that if there was subsequent legislation that completely covered the point there would be a material change in the circumstances, and it would then be a perfectly proper case for review by the Court on the application of the Registrar. There is no doubt about it.

I do not suggest that we should approach the Bill on the basis that every agreement which is introduced for the safety of the public should be the subject of legislation in this House. That would not only bring the Restrictive Practices Court to a standstill but this House of Commons, if we were not careful. The register will be open to public inspection and the arguments advanced will be in public hearing, certainly in a matter of this kind. If a whole range of cases shows that some particular danger always has to be avoided by the same kind of restriction, it would be a matter of public comment, and public opinion would be expressed in the ordinary way in the House of Commons.

Amendment negatived.

Mrs. Castle

I beg to move, in page 13, line 38, to leave out paragraph (b).

The Temporary Chairman

I understand that it would be for the convenience of the Committee to discuss with the Amendment which has been moved the eight following Amendments.

Mrs. Castle

If the Amendment which we have just discussed pointed to the essential weakness of the Bill, how much more so does this one? Paragraph (b) can render null and void the whole attack which the Bill makes on restrictive practices. I suggest that it is not only covering ground which is entirely new, and which was not visualised in the Report of the Monopolies Commission, but is drawn in terms which are so ludicrously wide that they show the impossibility of the job which will be facing the Restrictive Practices Court.

I would draw the attention of the Committee to the wording of the paragraph, which is: 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 enjoyed or likely to be enjoyed by them as such whether by virtue of the restriction itself or of any arrangements or operations resulting therefrom; I should have thought that a paragraph worded like that was just about as wide as the general proviso which concludes the Clause and which has caused The Times, for one, so much anxiety. As has already been mentioned by my hon. Friend the Member for Islington, East (Mr. E. Fletcher), in a leader yesterday The Times objected to the proposed Amendment which we are coming to shortly, pointing out how wide was the general proviso, and how undesirable it was to have a court of law trying to discuss these matters of public interest except within very narrow limits. Surely nothing could be wider than this Clause.

I am wondering what the President can possibly have had in mind in including it in the Bill. The argument contained in this paragraph is the whole case of the restrictionists, put into a nutshell. In fact, if we pass the Clause as it is we shall have completely given away the case to the restrictionists. We can see how satisfactory it is to them by the number of Amendments which have been tabled by hon. Members opposite who, throughout the whole of our discussions, have been steadily plugging the restrictionists' case, and who now say, "Whoopee, boys, this is it. Add a few words, such as 'directly or indirectly' and 'whether by way of price or otherwise,' and leave out the word 'substantial' and, chaps, we have the whole case of the Federation of British Industries."

I wonder if the President has studied that interesting pamphlet circulated by the Federation, called "Restrictive Business Practices in the Public Interest"? Here we have the bible of the restrictionists, and here it tells us, very sadly, that there has been a lot of misunderstanding about restrictive practices; that it is quite true that they limit production and keep up prices, but if anybody thinks that is contrary to the public interest he does not understand how British industry works. That, in effect, is what the pamphlet says. The argument of the Federation is that if the public only knew where its true interests lay it would welcome restrictive practices with open arms.

4.45 p.m.

This is a very impressive document. I read it with tears in my eyes, because it said quite definitely: Whereas it used to be a motive of industry in practising restrictive arrangements to avoid the fluctuations of unrestricted competition in times of slump, now the need is very different, and we need the restrictive practices because of the growing mechanisation of British industry and the need for stability within it. The whole public interest case is employed here. It is that we must have restrictive practices; we must limit competition, and we must stabilise prices, even if competition would make them lower, because this will ensure research and runs of production and stability within the industry. The pamphlet says: Agreements which contribute to high and stable levels of demand and output bring benefits which are reflected in the quality and price of the products. That is the restrictionists' case. They tell the public that it would not be better off if competition were restored and prices reduced.

I thought that the President introduced the Bill because he did not accept that case. Yet, if it looked at the paragraph, the Federation would say, "Of course, the removal of any of these restrictions would deny to the public as purchasers, consumers and users of goods substantial benefits and advantages enjoyed as the result of the modern organisation of British industry." I wonder where on earth the President got this paragraph. He has argued all along that the Monopolies Commission has accepted the need for some exceptions to be allowed for in the attack upon restrictive practices, but in doing so he has given us the impression that he appreciated that those exceptions had to be upon narrow and strictly defined grounds.

There is nothing in the Report of the Commission to justify the inclusion of a paragraph of this kind. In fact, it is very interesting to note the cautious tone with which the Commission approached the whole question of its exceptions. It said, in fact, that, whereas some might be necessary, We have not in the course of our inquiry come across any instances in which we were clearly satisfied that such practices were beneficial. But it went on to say that it had not had time to consider all these arrangements in detail and, therefore, We…cannot conclude that there should be no exception to our general conclusion. But the Commission couches its opinion in negative and not positive language. It goes on to say: It appears to us that the exceptional use of practices of this kind might be justified, subject to safeguards… But it wanted those exceptions strictly limited to the headings which it listed in paragraph 240.

We have already dealt with one category of exceptions which the Commission was prepared to entertain. Having studied the other three categories with care, however, I cannot see that they could be the source and origin of this paragraph. Except for the report of the Federation of British Industries, I do not know where the President can have got this paragraph. It occurred to me that he might have had in mind paragraph 240 (c) which, as the Committee will be aware, points out that in respect of agreements to charge common prices, There might be particular cases in which a common price agreement was found after inquiry to operate in the public interest, and where the effective operation of that agreement might depend upon the use of incidental practices of these types. I am wondering if it was within the ambit of that paragraph that the President found his inspiration for paragraph (b). If so, I really do suggest that he is cheating because the reason why the Monopolies Commission included paragraph (c) was not because it was really convinced that there might be common price agreements which could legitimately in the public interest be enforced by restrictive practices of this kind. On the contrary, it put this in because common prices were excluded from its terms of reference. Being scrupulously fair, as Monopolies Commission has been throughout, it had to point out that it had not examined the field of common prices, and it might be that if it had examined the field it would have found that some of these might be justified in very exceptional circumstances.

Common prices were referred to the Monopolies Commission separately, but the President withdrew that reference before the Commission reported. He did so on the ground that he is going to be a little quicker than that; he has done it as proof, he tells us, of his great desire to get ahead with tackling this giant evil. But really we are faced with this situation. The President has now told us that he is going to register common prices among the first of the agreements to be registered, but, then, having done that, and having stopped the Monopolies Commission from producing a report on common prices, he gives instead the loophole of paragraph (b) in the Bill. It is obvious that he has prices in mind, or, if not, some of his restrictionist friends have, because there is an Amendment on the Order Paper to include the words, Whether by way of price or otherwise. I suggest in all seriousness to I he President that he should look at paragraph (b) again. It is absolutely impossible for the Restrictive Practices Court to construe what is in the public interest in the light of these wide terms of reference. Surely there is no Member in this Committee who doubts that if the Monopolies Commission had continued its inquiry into common prices it would have come out flatly against them.

We see that sort of arrangement in the Report on the tyre industry. It is true that the tyre manufacturers claimed, and the Monopolies Commission accepted their claim that they had no common prices agreement, but had an identical price arrangement, and discussions had led to identical prices being charged throughout the field and all price increases taking place simultaneously, and the Monopolies Commission condemned this arrangement as contrary to the public interest.

I for one have no doubt that if we had had a report by the Monopolies Commission on common prices, it would, in fact, have condemned them. But we have not that report. All that we have is a reference by the President of the Board of Trade to his intention to register common prices first among the priorities and then to follow that up by examination by the Court. All the common price arrangements generally can then come along and claim exemption under this paragraph. The arguments used will range over the whole field of the restrictionist case.

I ask the President of the Board of Trade specifically if he had paragraph (c) of the Report in mind when he put paragraph (b) in the Bill. Is it his belief that any price arrangements operate in the public interest or may be expected to operate in the public interest? If not, under what recommendation of the Monopolies Commission has he produced this paragraph? Is it under the Monopolies Commission's recommendation (a), (b), (c) or (d)? If it is not under any of these recommendations, are we now not back in the position in which he has abandoned the whole case of the Monopolies Commission, that exceptions should only be allowed within very narrow limits as defined in paragraph 240 of the Commission's Report?

I suggest to the President that this is possibly the most important Amendment in the Bill. It is a complete rejection of the case of the Federation of British Industries which has argued and continues to believe that restriction of competition operates in the public interest, and that maintenance of high prices in some way, by spreading the cost of research and by enabling high capital investment in modern industry, is in the interests of the public.

The whole reason that we have this Bill is that the Government presumably reject that argument. It is a serious matter that the President, having started off with a great show of firmness in attacking and resisting the restrictionists' case, should by inserting this paragraph have now capitulated so speedily to the very attitude which it is our purpose to prevent.

Mr. P. Thorneycroft

Perhaps I may reply very shortly to what has been said about this paragraph, which is important. First of all, about where the idea came from, I would say to the Committee that it is not necessary—and I am sure that I carry the Committee with me on this—to have a report of the Monopolies Commission or any other Commission to produce a Bill in the House of Commons. We are responsible here ourselves, all of us on all sides, for what we legislate. We shall consider any Report that we have, and we shall do so in this discussion, but we are entitled to our own ideas about these things.

I want to say briefly what is the Government's approach to this matter. It is that the restrictions we are considering are presumed to be against the public interest. That is the first thing, and it is the answer to a good deal of what the hon. Lady the Member for Blackburn (Mrs. Castle) has been saying. Whether they are common prices or collective discrimination or the rest of it, they are presumed to be against the public interest. It is important to realise that these separate paragraphs are not a final answer in this matter. They define an argument which could be admitted before the Court, and what paragraph (b) says is that someone who is engaged in a restrictive practice may go to the Court, not to say that it benefits him—that is not permitted in this paragraph at all—but that the removal of the restriction would deny to the public, not even the general public, but to the public as purchasers, consumers or users of any goods other specific and substantial benefits or advantages enjoyed or likely to be enjoyed by them as such, whether by virtue of the restriction itself or of any arrangements or operations resulting therefrom". To deny that argument to someone who has a restriction would be an extraordinary state of affairs. I cannot imagine any tribunal, whether a court, a lay tribunal or a commission, or anything else, which would not at least admit the man to place in front of it an argument in support of that contention.

5.0 p.m.

I would only say this: I am anxious, and I know that the Committee realises it, not to widen these Clauses. I know that I am pressed in a number of Amendments to tighten it, and some people are pressing me to make it wider in other directions. I will listen to the arguments which I am sure will be expressed concisely to me on this matter. But I suggest to the Committee that this Clause, which has been most carefully drafted, is designed to do exactly what I have said so far; namely, not to establish some different principle or restrict our right to impose the onus fairly and squarely on the man. It presumes that a restriction is contrary to the public interest, but admits at this stage—and it is only the first stage—simply the argument that it operates not in his own interests but in the interests of the consumers of the country. I should think it astonishing were that contention rejected.

Mr. Douglas Jay (Battersea, North)

I do not think the President has answered the argument. He rests his case by saying that all this paragraph does or indeed any of the other paragraphs, is to permit the claimant, or plaintiff or whatever we call him, to use certain arguments. But the paragraph does not do only that. It goes further. It permits him to make out his case on these grounds and thereby get approval for his action whatever it is.

The President said that it is not for him to say where the idea came from which is contained in this paragraph. The right hon. Gentleman says he is at liberty to make up his mind as he chooses. Of course he is. But nevertheless it is pertinent to point out that most of the paragraphs in this Clause are founded on the suggestions in paragraph 240 of the Report of the Monopolies Commission. They are clearly modelled on the Commission's proposals, though they are slightly different from those proposals. When we find one which, as has been pointed out by my hon. Friend the Member for Blackburn (Mrs. Castle) in no way derives from that Report, I think we are entitled, and it is our duty, to examine it rather carefully and to ask what it means. We inevitably ask ourselves—even though the President will not answer our question—where it comes from.

What does it mean? The President did not tell us. What are these, special and substantial benefits or advantages enjoyed or likely to be enjoyed by the consumers as a result of restrictions which prima facie are contrary to their interests? I do not know what the President has in mind. I can only suppose that what he has in mind is the argument that in return for a higher price and a restrictive arrangement people will enjoy a certain higher standard of service or supply of goods, or whatever it may be. That was the argument which was considered by the Commission, and it is one of the defences advanced by restrictionists. I feel bound to say that it does not convince me. If what we are considering is the weighing of the one disadvantage to the consumer of higher prices against some advantage of getting better service, I consider that to be something which should be decided by the consumer.

Mr. Reader Harris (Heston and Isleworth)

Not always, where safety is concerned.

Mr. Jay

We have already dealt with safety in paragraph (a).

Mr. Harris

The same applies here.

Mr. Jay

If it is a choice between getting better service at higher prices and rather less service at lower prices, it is for the consumer and the purchaser to decide. All that is done by the restrictive agreement is to deprive the consumer of his freedom of choice. It means that once the agreement has been approved under this heading, it is the producer and not the consumer who chooses which advantage he gains.

Mr. P. Thorneycroft

Is the right hon. Gentleman really contending that if it were shown to a court of law that the removal of the restriction would remove a specific and substantial advantage from the consumer, he would say that was an argument which ought not even to be advanced?

Mr. Jay

I will not admit the argument until I know specifically the substantial advantages which the President has in mind. In answer to his question, I will read to the right hon. Gentleman what the Commission said on this very point. So far from suggesting this type of exception, it advanced arguments against it. It quoted a case where the principle is put forward that in return for a restrictive arrangement and higher prices there are certain better standards of service supplied. The Commission states in paragraph 83 However, if suppliers…collectively determine what the standard of service shall be and then protect those who give that service, they will probably lay down standards which are higher than some buyers need or would wish to pay for. There are individual buyers who because of the size of their purchases, or because of their own technical and commercial qualifications, require less service than others…". Then it goes on: Such buyers, it may be thought, should at least have the opportunity of placing their orders with concerns which give no more than the service they require and should not be forced to deal only with concerns which provide services they do not need. I think that a conclusive answer to the argument. Since, so far as we know, and on the information which the President has given, that is the only case which this paragraph is intended to cover, I am still led to the conclusion that this is an issue which should properly be for the consumer and purchaser to decide. It should not be decided either by the producer or by the Restrictive Practices Court.

Mr. Peter Remnant (Wokingham)

In his last few words the right hon. Member for Battersea, North (Mr. Jay) has confirmed what was my feeling earlier—particularly during the speech of his hon. Friend the Member for Blackburn (Mrs. Castle)—that the basis of the difference of view between the two sides of the Committee is in two main parts. First, right hon. and hon. Gentlemen opposite seem all the time to be saying, "Do not trust the Restrictive Practices Court to take a fair and reasonable judgment about what is or is not against the public interest when all the facts are put before it." Indeed, the right hon. Member for Battersea, North seemed Ito deny that when a restrictive agreement was referred to the Court, a trader should have any right to put his case before the Court.

Mr. Jay

I did not say that if there was a Court the trader should not have the right to put his case before it. I said that certain arguments should be admissible and certain others should not. Obviously, the President himself admits that by only having paragraphs from (a) to (g) and not from (a) to the end of the alphabet. The only point at issue is which particular argument should be admissible.

Mr. Remnant

The right hon. Gentleman must read his speech in the OFFICIAL REPORT tomorrow. He denied that the trader should be allowed to make out his own case, and I differ entirely from him. It is not only the trader whom I wish to be allowed to make out his own case, but whoever is the counsel acting for the Registrar as well. I wish to emphasise that it is the public interest which we are all endeavouring to safeguard and the means of achieving that under the Restrictive Practices Court. The object of certain Amendments in my name were to ensure that the Court should not rule out as remote something which it might have considered pertinent with regard to a particular practice.

The instance I had particularly in mind—and I should perhaps declare an interest in this—is that of an agreement reached to relate supply and demand with an adequate margin by Committee on which representatives of a foreign Government sit and to which agreement that foreign Government's consent is required before it can be put into effect. Just what is going to happen in the sterling countries connected with that practice if the Restrictive Practices Court rules that that particular arrangement is against the public interest, though the arrangement is made in obedience to the instructions of the foreign Government?

The hon. Member for Blackburn (Mrs. Castle) starts from the assumption that no agreement can be anything but harmful to the public interest. She is entitled to her own view, just as I am to mine, although with all respect I would suggest that perhaps I have a closer connection with business and its workings than she has. My view may be a biassed one, but I should be very surprised if, after two or three years, this Court, if put into operation on the basis proposed, does not find that quite a considerable number of the agreements of trade are not in any way against the public interest. Hon. Members on both sides are wrong if they expect too much to come out of this Bill.

I want to re-emphasise that in my view the fundamental principle of this paragraph which the hon. Lady seeks to remove is to see that all pertinent factors are placed before the Court by anyone who has a useful contribution to make, whether it be from the consumers' or from the manufacturers' side—that this Court is as independent as others. In that connection I must say that the hon. and learned Gentleman the Member for Leicester, North-East (Sir L. Ungoed-Thomas) just now rather shook my faith in the law, though my faith in the High Court judges still remains.

I am glad that my right hon. Friend has spoken as he did. If I may use a commonplace term, I hope that he will stick to his guns over this, and, if not, give me an assurance that there is very little excluded by this paragraph which the Court cannot take into consideration.

5.15 p.m.

Mr. Donald Wade (Huddersfield, West)

I should like to draw the attention of the Committee to a series of Amendments standing in the name of my hon. Friend the member for Bolton, West (Mr. Holt) and myself. I take it, Sir Charles, that there will be an opportunity to move them formally, if necessary, at an appropriate time?

The Chairman

No, I do not think so.

Mr. Wade

I am at any rate in order in debating them. I am well aware that the main problem now facing the Committee is the question as to whether, and if so to what extent, Parliament should delegate to another body the task of deciding issues which are wholly or partly political and economic. The Amendments which I am now discussing do not raise quite such a fundamental problem, but do raise matters which are not merely points of emphasis in wording.

Before I deal with the Amendments, may I make this general observation? My colleagues and I would not have dealt with this subject in quite the same way, as I think we have made quite clear already. For example, we do not accept the view that it is reasonable to draw up definitions of exemptions which are applicable to all forms of restrictive practice. We think that the limits of price rings should be defined differently from—and incidentally, very much more tightly than—other restrictive practices, such as zoning. However, I must not go into that now.

The Government have adopted this method, and we have to consider whether the definitions in the Clause are either too wide or too ambiguous. I submit that if the President would accept the wording we suggest—if not the precise wording then in principle—it would remove a certain ambiguity. Paragraph (b) as amended, would then commence "that the restriction provides" and would conclude with the words "without the restriction it is not reasonably practicable to provide such benefits or advantages." Had our Amendment to paragraph (a) been called I should have put forward a similar proposition, but the same argument applies to both paragraphs (a) and (b).

The purpose of the Amendments is to ensure that the Court will consider, first, whether in fact these restrictions do provide the benefits and advantages alleged by the parties to the agreement; and secondly, whether there may not be some other way of providing those benefits. As the Bill stands, there is some uncertainty as to what the Court will be entitled to consider. The Minister may contend that it follows from the present wording that before reaching a conclusion the Court would consider whether there was some other method whereby these advantages could be provided without restrictive practices, but I am not at all sure that as the Clause is at present worded, the Court would be entitled to consider that.

We must remember that these are new courts. The judge and those assisting him will be feeling their way. Any decisions that are made in the earlier stages may be regarded as precedents, and if the Court decides that it is not concerned with the question as to whether these benefits could be provided in some other way, the effect will be to widen these exemptions to an extent which I do not think was intended by Parliament. I say "widened" because those who make their applications will be entitled to argue that all they have to prove is that these advantages are provided for the public, and that it is no concern of the Court to consider whether or not those advantages could be provided in another way.

Last night the hon. Member for Twickenham (Mr. Gresham Cooke) gave the example of the electric fire and the guard. and the same subject has been mentioned again today. I can quite understand a body of manufacturers contending that certain restrictive practices—including, may be, a stop list—are necessary to ensure that retailers only sell a particular kind of electric fire with a particular type of safe guard. I think it might well be contended that that safeguard to the public could be better provided in some other way, and what I am asking the Committee to consider is that the Court should have within its purview the question whether or not the advantages can be provided in some other way than by these restrictions which, on general principles, we have already decided are contrary to the public interest.

Dr. Horace King (Southampton, Itchen)

Before I make the point I wish to make. I think someone from this side of the Committee should reply to the speech of the hon. Member for Wokingham (Mr. Remnant). It is not the view of the Opposition that the Court will be a prejudiced court in favour of those making restrictive practices, but, at the moment, we are devising a set of provisos or instructions to the Court itself. Obviously, we have to frame these provisos very carefully, because anyone who indulges in restrictive practices and who naturally thinks them right will take advantage of every opportunity of self-defence provided by the words of these provisos.

Although I take the view of my right hon. and hon. Friends that we must watch carefully how these provisos are drawn lest they be drawn too widely, and although, indeed, I also believe with my hon. Friend the Member for Blackburn (Mrs. Castle) that this subsection may be the point in this Measure through which the traditional coach and horses may be driven, I am troubled because this is the only proviso of the whole series in the subsection which seems to me to give sonic protection to a group of restrictive practitioners whose interests I want to plead this afternoon.

May I say that I have no interest to declare. I am a bookish man, who has spent more time in booksellers' shops and libraries than perhaps I ought to have done, but I have been asked by the little' booksellers—my friends up and down the country—to put their case. Their case, it seems to me so far, can only be dealt with in this subsection.

I want to say a few words about the bookseller himself. He is not merely a seller of books; he has to carry an enormous stock, he has to act as adviser, counsellor and friend to those who buy from him, and he thinks that he will be seriously jeopardised if the abolition of net sales price agreements by the wholesalers concerned were to make it possible for his customers, who use the free library service which he provides to take advantage of getting to know new books by handling them in his shop, were then to turn to some of the multiple stores and obtain these very books at cut prices. If some subsection to safeguard him is not included in the Bill, then indeed the little bookseller of England fears that his position may be jeopardised.

I think it goes deeper than that. I think the bookseller and the small town bookshop provide one of the instruments in the country which preserves the British book culture when it is being challenged more and more today by cheap commercial culture and that the disappearance of the little bookman from the towns of England would be a great loss to British life. On the other hand, the case of the bookseller is that the publisher himself is keenly competitive. This is not monopoly that I am defending. The Macmillans, the Pitmans, the Murrays and the rest of them fight each other in the world of buying authors and books and fixing competitive prices against each other. Their prices, between themselves, are competitive, so much so indeed that publishers are not interested in the Amendment which the hon. Member for Carlisle (Dr. D. Johnson) placed on the Order Paper earlier. It is because of that fact that I ask my hon. Friend who moved this Amendment and my right hon. Friends during the course of this debate to say what they feel about the case for preserving this particular restrictive practice as far as booksellers are concerned, the removal of which I believe would injure not only them, but the British public.

Mr. Eric Johnson (Manchester, Blackley)

The hon. Lady the Member for Blackburn (Mrs. Castle), who is no longer in her place, made some reference to an Amendment on the Order Paper in the names of some of my hon. Friends and myself about benefits in connection with prices. The hon. Lady did not appear to approve of that Amendment, and she appears to think that all arrangements about common prices are necessarily iniquitous.

I should like to point out that the purpose of my Amendment was not to say whether fixed prices are right or wrong, but only in order to make quite sure that, under this subsection of Clause 16, members of trade associations will have the opportunity of arguing their cases before the Court. If this Amendment was accepted, the effect would be that trade associations would be denied the opportunity of proving to the Court that the benefits which they give to the public are in fact real and substantial. I was very glad to hear my right hon. Friend say that the reason for this subsection is to give manufacturers the opportunity of proving their case.

As far as I am concerned, so far from wishing to delete this Clause, I must say that I must disagree with my right hon. Friend because I do not think it goes anything like far enough. I hope he will see his way to accepting some of the Amendments on the Order Paper, although I must say that the only one which would give effect to what I have in mind has not, unfortunately, been called. It is the Amendment which stands in the name of my hon. Friend the Member for Heston and Isleworth (Mr. R. Harris) and myself, in page 13, line 32, to leave out "shall" and insert "may".

What I am specially anxious to do is to make quite sure that, under this subsection, trade associations will have a chance of arguing their cases and the justification for fixing prices, and will be given the opportunity of proving that the public derive a substantial advantage from that practice. The hon. Lady the Member for Blackburn, and certain hon. and right hon. Gentlemen opposite, do not seem to think that agreed prices ever give any benefit to the public, but I could, of course, give very many examples to prove that in fact they do.

It is undoubtedly the case that in times of scarcity when supplies are short, there are always customers who are willing to pay a higher price than the agreed price of the association in order to get larger quantities of the goods they want or to get quicker deliveries. If there are no trade associations, there is a great temptation to individual manufacturers to accept the higher prices, and if one starts to take the higher price, the others very soon follow suit. If manufacturers are banded together in an association, they are much more likely to resist that temptation, because they know that their competitors are not taking advantage of it, and they will try to keep prices steady.

It is undoubtedly the case that whenever prices have been increased in times of scarcity, whenever advantage has been taken of shortage conditions, it has been done by those firms or suppliers who are outside an association, and it has been the association in these cases which has exercised restraint.

Sir L. Ungoed-Thomas

Is the hon. Gentleman's argument that all associations of this kind confer substantial benefits of the public?

5.30 p.m.

Mr. Johnson

What I am saying is that I hope an opportunity will be afforded under this paragraph to enable associations which believe they give substantial benefits to the public to prove that they do. I went on to say that I could give evidence that many such associations have given substantial benefits. I propose to mention one example very briefly.

The industry concerned deals with the supply of brass and copper tubes. I have no connection with this industry at all. The Committee will be aware that there has been a great shortage of copper in the last few years, notably between 1950 and 1952, and during that time the brass and copper tube association did not take advantage of those conditions to increase prices. The association did its best to keep prices down. I would stress this point, which no doubt will be more relevant on a later Clause. In that industry there is no agreement about resale price maintenance, and the association could not prevent certain retailers from asking excessive prices. As a result, certain retailers were making huge profits out of the scarcity conditions while the manufacturers were keeping prices down.

Mr. Albert Evans (Islington, South-West)

How does the hon. Gentleman reconcile what he is saying with the undoubted fact that the supply of nonferrous metals has constantly declined ever since the Korean War, and that if one asks the suppliers of non-ferrous metal sheets and bars for prices, almost invariably the prices given agree to within £1 or so?

Mr. Johnson

I do not find that in the least surprising. There is nothing wrong in the prices being identical. They will be the same if the manufacturers are in an association. What I have said is that the manufacturers who are in such an association and who agree on their prices do their best to keep the prices down, but there are people outside the associations who can and do ask what they like.

Associations have in many cases conferred substantial benefits on the public as a whole. I do not want to weary the Committee with a lot of examples, but I was about to say that it is not only in creating stable prices and keeping prices down that these associations confer benefits. One could give a long list of examples. The fact remains that if this paragraph is deleted, the effect will be to deny the associations the opportunity of proving that what they do is in the public interest, as they believe it to be.

I know that hon. Members opposite have always been critical of trade associations which fix prices, but I suggest that if they are not allowed to agree prices, those trade associations will very soon disintegrate, in precisely the same way as trade unions would disintegrate if they were not allowed to have any control over fixing wages.

If we are to have unrestricted price competition in addition to the competition which already exists between firms in regard to quality, general service and so on, I admit that the result may well be lower prices. There will also inevitably be a deterioration in quality. It might facilitate the disappearance of the less efficient firms, but the progress of the efficient firms would also be curtailed. What would undoubtedly happen would be that small firms would go bankrupt, and we should find that the control of an industry would be in the hands of a few firms or groups of firms with the largest financial resources. Instead of having more competition, they would tend to avoid competition with each other by concentrating on certain types of goods which might well develop into a monopoly. If the associations were not allowed to prove their case, the buyer would have a smaller choice and there would be less competition than there is now.

I regret, Sir Charles, that you have ruled that I cannot move this small Amendment in my name. I do not know whether my right hon. Friend would see fit at a later stage to include words of the kind suggested in my Amendment. I am aware that he does not want to widen the scope of the Clause. However, I ask him to give a definite assurance that trade associations which have price agreements will be given the opportunity to argue a case in favour of what they are doing.

Mr. Roy Jenkins (Birmingham, Stechford)

I think the hon. Member for Blackley (Mr. E. Johnson) has made a very striking and interesting speech. He expressed regret that he was not able to move a small Amendment, but I must say that I do not think the subject he dealt with in his speech was at all small. It is a very big subject which relates not only to paragraph (b), but to the Bill as a whole.

The argument that the hon. Gentleman was advancing was a complete argument in favour of common pricing and price rings in as wide a range of British industry as it is possible to have. Let me deal with the suggestion that it would be a powerful argument to say that trade associations operating a common policy might perform a public service at a time of shortage of certain commodities.

Mr. E. Johnson

I was not arguing in favour of price rings. What I was saying was that there was evidence that in certain cases they provided benefits to the public, that they ought to be given the opportunity of proving this, and that to delete this paragraph would deny them that opportunity.

Mr. Jenkins

I think the hon. Gentleman went a great deal further than that, and I want to show exactly how far he went.

When he interrupted me, I was about to say that he gave one or two specific examples and suggested that the price ring was useful at a time of shortage of a particular commodity, and that the traders should be allowed to deploy this argument in the Restrictive Practices Court. But it is impossible to think of a commodity which may not become in short supply in the future. Are trade associations to be allowed to say, "There is no shortage of our commodity at present, but it might become short, in which case we would pursue a policy which might result in keeping prices down"? That would certainly provide plenty of scope.

The hon. Gentleman, going still further, used the old argument that common pricing was essential unless we were prepared to have industry increasingly swallowed up by the large and more efficient firms. That is an old chestnut, that it is necessary to have a certain amount of restrictive practice in order to prevent an industry becoming almost a complete monopoly. On the evidence before us it is not the industries which most effectively apply restrictive practices of one sort or another, and in particular agree common prices, which are the industries in which there is a wide range of firms operating. We have all had our attention directed to the motor tyre industry. That industry has plenty of restrictive practice and common pricing, but it is not what one thinks of as an industry controlled by a vast multiplicity of small firms. Take the tobacco industry, as another example. It is hardly a paradise for the small firm.

Mr. Johnson

Might I draw the hon. Gentleman's attention to the wire industry, which has a very large number of small manufacturers in it and has agreements about prices?

Mr. Jenkins

I am certainly not going to argue that there are not industries of which that is true, but I say that the hon. Gentleman's general proposition cannot be held to be true from a consideration of the picture over British industry as a whole.

When I came into the Chamber my hon. Friend the Member for Blackburn (Mrs. Castle) was saying that her Amendment was the most important of all. I thought at the time that she was indulging, most unusually, in a little hyperbole, but having listened to the debate, I am not sure that she was not near the truth. A number of hon. Members opposite have shown great enthusiasm in supporting the President in resisting the Amendment.

The hon. Member for Heston and Isleworth (Mr. R. Harris), a most enthusiastic supporter of the Bill, said "Hear, hear" a great deal more often during the President's speech in reply to the Amendment than I have heard him do on any other part of the Bill. That makes me think that the removal of the paragraph would do a great deal to strengthen the Bill, though I am not unaware of the point of substance raised by my hon. Friend the Member for Itchen (Dr. King). There is something in the point about booksellers, but I think that that falls much more under Clauses 19 or 20 than under this Clause. What booksellers are concerned about is not the maintenance—

Mr. Douglas Glover (Ormskirk)

Ought not the hon. Gentleman to declare his interest in books?

Mr. Jenkins

I have written a number of books, but they do not sell very much. They are very highly priced. I freely admit that I am an opponent of individual resale price maintenance. I should say that bookselling was an exception to the general point, but it is essentially individual resale maintenance which booksellers are concerned about maintaining and not a whole range of common prices, which does not operate at present. I do not think that that is directly concerned with the problem with which we are dealing. Possibly it may be dealt with under other Clauses.

In his speech the President took the point that it would be unreasonable to exclude the paragraph not because he is convinced that very much will come of it when cases go before the Restrictive Practices Court, but because it would be most unreasonable for an industry affected by the operation of the Court not to be able to argue almost anything which it thought would be of assistance to it. If it were accepted, that would be an argument not in keeping with the other paragraphs. If it is reasonable that everyone should be able to make the best case they can on their own behalf, as it may be, why do we have the list of limitations? The fact that we have, means that the President and the Government recognise that the mere fact that a point may help somebody who is trying to uphold a restrictive practice is not in itself a reason why it should be admissible evidence before the court.

The subsection with which we are dealing goes very wide. I have been surprised to discover exactly how wide it goes. All that has to be shown is 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 does not say "benefits or advantages on balance." It does not say anything about the price which people may have to pay to get the benefits. It is difficult, particularly when we listen to wide-ranging speeches like that of the hon. Member for Blackley (Mr. E. Johnson) to imagine any restrictive agreement for which it could not be claimed that the consumer might get some advantages or benefits from it. Surely the basis of our approach to the subject in the Bill must be that the consumer himself ought to be allowed to judge what advantages he wants.

I am surprised at the attitude of hon. Gentlemen opposite on this point. My right hon. Friend the Member for Battersea, North (Mr. Jay) who also writes books—I dare say more copies of them are sold than of mine—wrote a book before the war in which he used a phrase not at all in the context in which hon. Gentlemen opposite think he used it that about the gentleman in Whitehall sometimes knowing best. My right hon. Friend used that phrase in the middle of a passage where he was arguing very strongly in favour of the widest possible consumers' choice. Many hon. Members opposite who have quoted that phrase tearing it from its context, are now proclaiming that the gentleman in the board room knows best what sort of service the consumer wants and what he ought to pay.

Mr. Philip Bell (Bolton, East)

If so, who would buy?

5.45 p.m.

Mr. Jenkins

This is a very different point. It is the job of the gentleman in the board room to try to judge what the consumer wants, but, having judged that, it is his job to put his judgment to the test under the free competition brought about by what the consumer really does want and not, having made his judgment, to go round to gentlemen in other board rooms and say, "We will now come to an agreement so that, whether or not we have judged correctly, the consumer will have to pay what we decide." That is the danger with which we are dealing.

We have argued what are justiciable issues and what are political issues. This seems to be a political issue. Is it reasonable to leave it to the court to decide in general whether it agrees with the hon. and learned Member for Bolton, East (Mr. Philip Bell), the hon. Member for Blackley and others of that sort, who really feel that gentlemen in board rooms, acting in collusion with gentlemen in other board rooms, know best, or whether under conditions of free competition the consumer should decide for himself what services he wants and what he wants to pay for the services when he wants them and should not have to pay for them when he does not want them? This seems to me to be preeminently a political decision and one which the President and the Committee ought to take. Unless the President takes it I cannot imagine how the court can usefully deal with these matters.

Mr. I. J. Pitman (Bath)

Might I have your Ruling, Sir Charles, on a point of order, whether, in view of the prohibition on collective price maintenance in Clauses 19 and 20, we are in order in importing into this discussion the question of common prices, or whether we may talk about common prices because there is an Amendment to Clause 19 to remove that prohibition in certain cases?

The Chairman

The Amendment is to leave out paragraph (b). Everything that I have heard so far seems to be in order.

Dr. Donald Johnson (Carlisle)

I rise to resist the Amendment. I speak as a restrictive practitioner. As a book publisher, I should like, in particular, to thank the hon. Member for Itchen (Dr. King) for his sponsorship of the small bookseller. I have also to thank the hon. Member for Stechford (Mr. Roy Jenkins) for the few crumbs of comfort which he offers the book trade.

I assure the hon. Member for Stechford that we are very closely affected by the Bill, and as he seems to be somewhat vague as to the manner in which we are affected, I hope in my remarks to put him right. It is a public assumption which has been held through the years that books are always the same price. I am sure the hon. Member likes to see his books in different shops always at the same price, and not 15s. in one, 9s. 6d. in another and perhaps even 2s. 6d. in another. That arrangement depends essentially on the agreement we have in our trade, which is known as the "net book agreement." That arrangement was started at the beginning of the century subsequent to a price-cutting war in the book industry in the last years of the nineteenth century. It was finally fixed in 1899 and has continued since as the sheet anchor of the book trade. That is an agreement to maintain prices.

On our side, as publishers, we agree to maintain the price of a book—in the case of a fiction book, for two years and, in the case of a general book, for three years—unless we give special notification in our trade magazine to the booksellers and give credit accordingly, and the booksellers arrange for a shorter time. Later, we shall be discussing sanctions for enforcement under later Clauses, but here I want to explain how this subsection will help us to justify our arrangements.

The purpose of our price arrangements is to enable the bookseller to buy the slow moving stock which is the essential of our trade. As can be seen, the average bookshop of any standing has a varied stock, some items of which may take two or three years to dispose of. If it is not quick sales stuff, which sells in a week, a fortnight or a month or two, many items may take a year, two years or even three years to sell. It is essential for the bookseller to have confidence that he will be able to maintain his prices. The advantage to the public is that this stock is the culture of our country.

That is the advantage which this price maintaining arrangement in the book trade has for the public and under which it can be presented to the Court under this Clause. It is equally true that great knowledge and skill is essential in the book trade in the acquiring of this stock. That is why I think it would be the wish of the book trade that it should be able to submit its agreement under the qualifications granted by this Clause. We shall talk about sanctions when we discuss a later Clause.

Mr. Roy Jenkins

I am trying to follow the argument of the hon. Member carefully. I gathered from what he said that I was right in saying that it is individual resale price maintenance in which the book trade is interested today. It is not a system of common prices. There is nothing to prevent one publisher, if he wishes, bringing out a novel for 9s. 6d., whereas another charges 15s.? It is not an attempt to get common prices, but the retention of individual resale price maintenance, although clearly the means by which that can be effected is a matter for argument.

Dr. Johnson

I think the hon. Member for Stechford is bringing in something which we shall be discussing when we reach Clauses 19 and 20. The question I am discussing at the moment is the agreement to maintain prices, however they may be enforced, whether individually or collectively. That is the agreement. Under Clauses 19 and 20 we shall be discussing whether to maintain them collectively or individually.

Mr. Jenkins

The hon. Member has misunderstood what I am asking, with the greatest fairness to the trade. We all want to understand the problems. Will the hon. Member tell us exactly what it is the book trade wants to maintain?

Dr. Johnson

Essentially we want to maintain the price structure of the book trade so that, for instance, a book written by the hon. Member is not sold for 15s. in one shop and for 12s. 6d. in the next. I do not think I can use simpler words than those. It is only by an agreement of some kind that we can do that.

Dr. King

This is a point of importance to the Committee. I understand that what the hon. Member is asking for is not the maintenance of common prices between the wholesaler and the publisher, but the maintenance of a specific price for a specific book, whereas between publishers there are competitive prices.

Dr. Johnson

If I publish a book I can fix the price at any price I like. That is the case now. I am sorry I did not make that clear. I have complete freedom to fix what price I like for my own books in competition with other publishers. There is no restriction on competition whatever as between individual publishers.

I wish to go on from there to assure the hon. and learned Member for Leicester, North-East (Sir L. Ungoed- Thomas) that profit is not the only motive force in the book trade. On both sides of the trade—publishers and booksellers—there are a great many people who are struggling on a very narrow margin of profit because they think they are doing something which is very much worthwhile in other ways. That is, the promoting of ideas that come to them to retail as booksellers and create what we consider to be the culture of the country. That is why we hope our agreement will be acceptable under this subsection.

Dr. Barnett Stross (Stoke-on-Trent, Central)

I find myself in a little difficulty over the Amendment because with one part of the speech of the hon. Member for Blackley (Mr. E. Johnson) I must agree, as I am compelled to give another illustration similar to the one which he gave.

In one section of the pottery industry which makes tiles there is a collective agreement that no prices should be charged to the public above a certain level. It appears to me that if people are organised to see that the public are not exploited it would be difficult to attack that. The general secretary of the trade union representing pottery workers has brought this question to my attention. It is a small matter, but there is something in the point that not all agreements are connected with extorting the maximum price from the public. Obviously some protect the public by ensuring that, whether the article concerned is in short supply or not, the charge shall not be above a certain level. I should have thought such agreements were admirable.

Mr. George Darling (Sheffield, Hillsborough)

It is unusual.

Dr. Stross

It is not unusual. We can think of the co-operative society, which, when everything was in short supply, did not raise its prices.

Mr. Arthur Holt (Bolton, West)

Will the hon. Member tell us more about the agreement he has mentioned? Is it a general maximum price agreement, or a minimum price agreement in disguise as a maximum price agreement?

Dr. Stross

I hope I am not wrong, but I am advised that it is as I have described it. It may have come into existence for the reasons given by the hon. Member for Blackley. After the war tiles were in short supply, but they were wanted for the purposes of housing. The trade did everything it could to see that its goods did not come into disrepute through retailers taking advantage of the shortage and charging much more than they should charge, but the agreement has continued. This may be a small point, but I felt that I should make it. It follows on one part of the argument of the hon. Member for Blackley.

6.0 p.m.

Mr. Pitman

We are really in the situation of Abraham and Lot in that we are asking whether there are not a number of just men who should be spared, and I am glad to pay my tribute to the hon. Member for Southampton, Itchen (Dr. King) and to several hon. Members opposite who feel that there are, or may be, a number of such just men and who are anxious that the Court should be given the opportunity of examining, not only the question of the merit of a case, but also the precise means by which a meritorious case may be made effective.

I am a publisher, and should like to declare my interest in that respect. I would also desire to reserve until later, on Clauses 19 and 20, the question of collective versus individual price maintenance. For the moment, it seems to me that there are a great number of trade practices, certainly in the book trade, which are essential—or seem to me, at least, to be essential—to a proper service to the public. As the hon. Member for Itchen said, books are indeed a vital part of our culture, and it would be a sad day if in the passing of the Bill we made it impossible, as the Amendment would make it impossible, for the Court to approve really decent and well performed practices which have been going on for such a long time.

Mr. Grimond

In his remarks earlier, the right hon. Member for Battersea, North (Mr. Jay) made a very forthright defence of the consumer and said that he could be trusted and relied upon to buy the best in the market. Coming from one who had been widely painted as the Robespierre of bureaucrats, that was a notable pronouncement. Clearly, the right hon. Gentleman has been very much misunderstood hitherto, and I hope that we may eventually welcome him into the Liberal Party.

Mr. Jay

I assure the hon. Member that I have always held the views that I expressed today and, indeed, have expressed them in both spoken and written form exactly as I expressed them today but I do not think they will lead me to the Liberal Party.

Mr. Grimond

Obviously, the right hon. Gentleman has been widely misunderstood, and I am glad that this afternoon we have been able to correct a public impression. Subsequently, however, a good many doubts have been cast upon the right hon. Gentleman's argument and various arguments have been put forward for restrictive practices, particularly in regard to the book trade.

I myself at one time had an interest in a small bookshop, and I share very much the feelings of those who think that bookshops are agreeable places and that one should browse in, say, Blackwells and not buy one's books at Woolworth's. I am, however, forced to admit that if that is the case, presumably the public are willing to pay a little for the privilege of browsing. In my case, I must admit that they were not, but in theory that should be the answer.

Mr. Pitman

The real trouble is when somebody goes to select his books at Blackwells, who have all the overhead expenses of stocking and showing the books, makes a list of what he selects and then buys them at a cut-price shop which keeps no stock.

Mr. Grimond

I agree that people much abuse the privilege of small bookshops, as everyone knows, but the book trade, with which I have great sympathy, must be a little careful about what is almost double talk in this. It is all very well to say that the public like books but will not go into the bookshops, but that does not make sense. I agree that the bookshops could be allowed to make their case, which falls largely under the later Clauses, before the Court.

As the Bill is drawn in its present form, I find it difficult to believe that one can do without paragraph (b). It may well be that the Bill should not have been drawn in this form—that is another matter—but the Bill received a Second Reading, for better or for worse. If there is any reason for maintaining a restrictive practice—on the whole it would be difficult to make out convincing reasons—it would be that it conferred substantial benefit on the public and on customers. It is unfair to the Court for us to argue that the whole matter should be left wide open for the Court to decide. It must be given some indication of the grounds on which it should proceed.

Having said that, I feel that the Clause should be drawn as precisely and, I would say, as narrowly as possible. Like other hon. Members, I have been a little alarmed by the arguments put forward for restrictive practices, which would, in fact, drive a cart and horse through the whole Bill if they were accepted, and would make it valueless. Therefore, we must try to make this subject specific.

I should like to end by drawing the President's attention to the phrase "likely to be enjoyed." I concede that it would not be altogether fair to tic down an association to proving that at any one moment the public was gaining from its restrictions. I also concede that one must rely upon the Court to act reasonably and to put a reasonable construction on those words, but I ask the President whether we are not in fact asking the Court to do something difficult if it is to take into account whether a restrictive practice is conferring benefits which are "likely to be enjoyed." What does that expression mean? Does it mean likely in the future, or in the far-distant future? It opens up an immense range of argument.

I ask the right hon. Gentleman, between now and the next stage of the Bill, to look at these words again. I agree that it is difficult to find suitable words, but these are rather vague, and it is, I suggest, unfair to ask the Court to construe them.

Sir James Hutchison (Glasgow, Scotstoun)

I make no apology for delaying the Committee for a few moments, although much more weighty questions than mine are being considered. Nevertheless, I should like to draw my right hon. Friend's attention to an alteration of comparatively minor importance in connection with the wording of line 38. There is a slight conflict in wording, which might lead to misapprehension in the Court, between paragraph (f) and the wording, used in almost identical circumstances, in line 38.

Therefore, I wonder whether, when he is considering the Clause again, my right hon. Friend would remove any doubt as between the form of the wording of paragraph (f) and the wording which, we suggest, should be inserted in line 38. If in almost identical circumstances the two sets of wording are different, misapprehension might be caused in the mind of the Court as to the intention of the Clause.

Mr. John Baldock (Harborough)

I should much regret the omission of paragraph (b), and I believe that most hon. Members who have spoken against it would like to see a statutory prohibition on every kind of price agreement and restrictive practice and very little opportunity for those practising it to give reasons for their doing so. I profoundly prefer my right hon. Friend's method of dealing with this matter empirically, and I am glad that the House has already accepted that method of doing it on Second Reading.

I believe that there is just as much danger to the community and to the consumer from an absolutely unregulated jungle of cut-throat competition as there is, on the other hand, from an economy tightly drawn by restriction and monopoly. I am convinced that the answer is somewhere between the two, and I believe that the Bill is the most courageous and far-sighted attempt that any Government has ever made to achieve it.

My reason for supporting the retention of paragraph (b) is that I think that trade associations—I have no connection with any nor do I derive benefit from any personally—have a great job to do. They have a great job to do in maintaining standards, in co-ordinating research, in exchanging information, and, perhaps, in going overseas to learn how industries are carried on in other countries. I should be very sorry to see those trade associations broken up.

I agree with my hon. Friend the Member for Blackley (Mr. E. Johnson) in seeing certain dangers of trade associations disintegrating if they are no longer able to regulate prices. Be that as it may, I very much hope that the result of the passing of the Bill, if it is passed, will not be the diminution of trade associations in this country, because I think that they have a job to do, and I should like to hear a word go out from the Committee, or, at any rate, from some of us, of appreciation of what trade associations can do in maintaining standards and in ensuring orderly marketing.

Mr. P. Thorneycroft

I thank my hon. Friend the Member for Harborough (Mr. Baldock) for the support which he has just given to the Clause, and I agree with him that we must find a balance between cut-throat competition and the tight arrangements of monopoly and restriction. We believe that this Bill is a sensible approach to the finding of that balance.

In reply to my hon. Friend the Member for Glasgow, Scotstoun (Sir J. Hutchison), I would say that we believe that the words removal of the restriction would deny to the public … specific and substantial benefits or advantages enjoyed or likely to be enjoyed by them means the same as the words "reasonably necessary" used in the previous paragraph in other cases. However, I will look at the case that he has made to me.

My hon. Friend the Member for Wokington (Mr. Remnant) asked me a number of questions. I would say to him that there is nothing which can be properly and reasonably argued on the basis of benefit to consumers which would be excluded by the Clause. It is clearly necessary to have that provision. One has only to consider the Reports of the Monopolies Commission itself to see that—for example, those about cables and electric lamps. The Commission went into those matters and found that, on balance, there was benefit in having arrangements which led to the exchange of technical information within the groups.

I do not say that such arrangements could be sustained in all cases. I am very far from saying, or accepting the argument, that unless there is a ring we do not have any research. I simply do not believe it. However, I think that the effect of research and the exchange of technical information are matters which cannot be omitted or denied in argument to the Court, and I think it would be unfair to the Court if they were.

Mr. E. Johnson

Does that mean that it would be permissible for manufacturers to argue before the Court that there were benefits to be derived from agreed prices?

Mr. Thorneycroft

Certainly it is possible for manufacturers to argue that, if the benefit is not for themselves. That is why the Clause is drawn as it is. My hon. Friend is perfectly right, but the argument must show by evidence that the consumers derive the benefit from these arrangements. I know there are cases where it is deeply and sincerely held that the consumers do derive benefits from such arrangements, and I believe that there may be cases in which the users of the products would themselves be willing to give evidence of that to the Court, and to say that they prefer things that way. To put it no higher, that would be evidence on which the Court could reasonably hold that the removal of the restriction would deny a specific and substantial benefit to the users. It would be rash of the Committee to try to deny the submission of evidence of that sort.

6.15 p.m.

The hon. Member for Huddersfield, West (Mr. Wade) and the hon. Member for Orkney and Shetland (Mr. Grimond) said the Clause must be specific, and I agree that it should be as specific as possible. I am going to consider the suggestions of my hon. Friends. I believe that there is very little difference between the meaning of the paragraph as it is and its meaning were the words which the hon. Member for Huddersfield, West would like imported written into it. However, I shall not debate that drafting point now.

My hon. Friend the Member for Bath (Mr. Pitman), the hon. Member for Southampton, Itchen (Dr. King) and my hon. Friend the Member for Carlisle (Dr. D. Johnson) all pointed to an illustration of the need for the paragraph. I was very grateful to the hon. Member for Itchen, who was the first to mention it.

I think the Committee would agree that whatever view may be ultimately held about the net book agreement it should be possible for argument in favour of it to be brought forward. The answer to the hon. Member for Stechford (Mr. Roy Jenkins) is that the agreement falls within Part I of the Bill. The essence of the not book agreement is mutually accepted restrictions under which everybody concerned agrees to exercise price maintenance, and to publish the prices which must be maintained for the books that they sell: and that is a registrable agreement under Part I.

It is quite clear to my mind, when there is an agreement of that kind, which can be registered, and which will be registered, under Part I, that the arguments which have been canvassed in the Committee in favour of that agreement are arguments which can properly and legitimately be put forward to the Court within the compass of the Clause as drafted. That is why we have the Clause.

Hon. Members have concentrated on the net book agreement, but I am sure they will agree that there are many other agreements of this kind, many other arrangements which exist in industry, of varying merit and demerit and varying importance and unimportance. The arguments which have been adduced about that agreement illustrate the need for a Clause which will enable the parties to those arrangements to show by evidence, by the ordinary court procedure, that the removal of the restrictions would deny a specific and substantial benefit to the consumers.

Mr. Jay

It is, is it not, the essence of the net book agreement that it is enforced—it could not exist without enforcement—by a collective boycott? That collective boycott to enforce the agreement will be banned outright by Clause 19. Therefore, the plea in justification of the essence of that agreement should not arise on this Clause and should not come before the Court.

Mr. Thorneycroft

The right hon. Gentleman is quite wrong about this. I am not blaming him, and I am not criticising him, for this is a matter which it is not, perhaps, easy to apprehend at first glance. There are two things which must be kept distinctly separate, the substantive agreement and the method of enforcement. They are quite different things.

First there must be the substantive agreement. There can be no talk of enforcement until there is some agreement. The essence of the net book agreement is that publishers mutually accept restrictions, all of them to maintain their prices—it is a mutually accepted agreement to maintain prices—and they are registrable restrictions under Part I. They have to advance arguments to get those restrictions through one of the various openings in this Clause.

Assuming they justify them, we come to the question whether the new method of individual enforcement proposed in Clause 20 or the old method of collective enforcement banned by Clause 19 is the most appropriate. We shall debate that presently, but it is a quite separate question from the one we are now discussing.

It is quite clear that the net book agreement itself would be out altogether—finished, outlawed—without this Clause, which would allow publishers to argue their case, as, I think, they properly should be allowed to do.

Mr. Jay

I am not disagreeing with the right hon. Gentleman but I think that we are not quite clear on this matter. I am sure he would agree that if Clause 19, as it stands, becomes law then, although the net book agreement without enforcement could be argued under the Clause, it would not be possible to come forward and justify the enforcement part of it, which is the only thing that enables it to continue.

Mr. Thorneycroft

We shall debate later whether enforcement is to be effected by individual enforcement through the courts or whether it is necessary to have the full panoply of the stop list and all the rest, but no method of enforcement is much good unless there is the agreement. We must face reality, and the reality is that there must be an agreement, and the first matter in question is the mutual arrangement of the book trade to maintain prices.

Without this Clause the net book agreement would be banned. It would be presumed to be contrary to the public interest. I have taken the net book agreement as an example merely because it has been mentioned. There are many others. It is absolutely essential, for the reasons which I have mentioned, that we should have a Clause of this kind and that a proper opportunity should be given to people to argue that the removal of the restriction would cause specific and substantial damage to the consumer.

Mr. Nigel Nicolson (Bournemouth, East and Christchurch)

As yet another publisher who has refrained from speaking in the debate on this point, may I ask a question? I agree that under Clause 16 (b) publishers may argue that the net book agreement should be retained, but they can only do so by arguing that failure to retain it would cause a great many bankruptcies among the booksellers. Is that justifiable? Can one say that that is an argument in interest of the public, that is, the consumers? It strikes me as an argument in the retailer's interest. Is it therefore permissible as an argument, as the Clause is now drawn?

Mr. Thorneycroft

I want to make it perfectly plain that the argument that must be advanced here is the benefit to the consumer. The protagonists of the net book agreement are prepared to argue that. They are not without arguments on that score. There are powerful arguments for saying that the maintenance of the net book agreement, particularly having regard to certain types of bookshops and types of books, is a valuable benefit which if it were denied, and some say that it is denied in other countries, would be a very great blow to the consumer. I express no opinion about the merits of that argument. I would only say that there are arguments which it is claimed can be properly advanced, under the Clause, before the courts.

Sir L. Ungoed-Thomas

We have sympathy with those who are engaged in the book trade and who are primarily concerned about the cultural aspects of the occupation which they follow. We are all anxious to have a good, flourishing book trade in this country. The concern of the book trade and those who are advancing the interests of the net book agreement is for the retail shops. As the hon. Member for Bournemouth, East and Christchurch (Mr. N. Nicolson) said quite frankly, concern for the retail shop is the whole hub of the argument on the book trade. But in order to get within the terms of this provision, those concerned must come within paragraph (b), which deals only with the position of the consumer. They are having to distort their argument, as they say quite frankly. Although they are primarily concerned with the retail position, nevertheless they have to come within this provision about consumer benefit.

We all sympathise with the retail book trade problem, and it is quite possible that something could be done to meet that kind of case. There are all kinds of distinctions between that case, which one might call the cultural case, and the ordinary economic case. We are concerned about the general effect of paragraph (b), and we have had speech after speech from the other side of the Committee directed towards that concern.

The hon. Member for Wokingham (Mr. Remnant) stated that he does not think that any substantial difference will be made by the Bill. The hon. Member for Blackley (Mr. E. Johnson) said that trade associations with price agreements were generally for the benefit of the public, because they maintained prices. But the same maintenance of prices is precisely what is assumed—as the foundation of the Bill—to be something not of itself beneficial. It is quite clear from the debate that we shall have applications under paragraph (b) covering almost every conceivable trade association with retail price maintenance.

If something could be formulated to avoid the complete inrush of applications which would be covered by paragraph (b), we on this side of the Committee would be prepared to approach this matter as objectively as we have approached other features of the Bill in Committee, but paragraph (b) simply enables a vast mass of applications to be made upon the ground which was rejected in the Monopolies Commission's Report on discriminatory practices. The Commission considered all the arguments about benefit to the public and about maintaining a bight standard of service, the answer, of course, being that given by the hon. Member for Orkney and Shetland (Mr. J. Grimond)—that there should be consumer choice instead.

All that has been prejudged before we came to the Bill, which is largely before us for that very reason. By means of paragraph (b) we are really reopening the whole matter and allowing these trade associations to reconsider again the very reason why we ourselves are considering that something ought to be done.

Sir Lionel Heald (Chertsey)

Is it a fair way of putting what the hon. and learned Member and his hon. Friends are saying today to say that there may be deserving cases which would come under paragraph (b) but, in the interest of pure Socialist doctrine, they ought to be excluded?

Sir L. Ungoed-Thomas

The right hon. and learned Member is pungent in his reasoning, as he so frequently is. He has come into the debate again, and I am sure that we are all delighted to see him.

Sir L. Heald

I have been here for many boring hours.

Sir L. Ungoed-Thomas

So have we.

Mr. G. Darling

Listening to vested interests.

Sir L. Ungoed-Thomas

There may be matters like the net book agreement which ought to be provided for somehow or other, but paragraph (b) is far too wide a proposal to deal with anything of that kind. If Amendments are brought forward to deal with something reasonable and specific within Clause 16—

Mr. Julian Snow (Lichfield and Tamworth)

My hon. and learned Friend keeps on saying that we are all in favour of these net book agreements. I can

assure him that that opinion is not unanimous.

Sir L. Ungoed-Thomas

I did not say that we were all in favour of net book agreements. I said that we were all in sympathy with those in the book trade who experience the difficulties which have been brought before us. If an Amendment is brought forward dealing with specific cases, that is quite a different matter, but paragraph (b), which we are now discussing, is a wide provision which would enable a horse and cart to be driven through the Bill.

Question put, That the words proposed to be left out stand part of the Clause:—

The Committee divided: Ayes 225, Noes 173.

Pannell, N. A. (Kirkdale)	Roper, Sir Harold	Turner, H. F. L.
Partridge, E.	Ropner, Col. Sir Leonard	Vane, W. M. F.
Pickthorn, K. W. M.	Russell, R. S.	Vaughan-Morgan, J. K.
Pilkington, Capt. R. A.	Schofield, Lt.-Col. W.	Vickers, Miss J. H.
Pitman, I. J.	Sharpies, R. C.	Vosper, D. F.
Pitt, Miss E. M.	Shepherd, William	Wade, D. W.
Pott, H. P.	Simon, J. E. S. (Middlesbrough, W.)	Wakefield, Edward (Derbyshire, W.)
Powell, J. Enoch	Smithers, Peter (Winchester)	Walker-Smith, D. C.
Prior-Palmer, Brig. O. L.	Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)	Wall, Major Patrick
Profumo, J. D.	Stevens, Geoffrey	Ward, Hon. George (Worcester)
Raikes, Sir Victor	Steward, Harold (Stockport, S.)	Ward, Dame Irene (Tynemouth)
Rawlinson, Peter	Stoddart-Scott, Col. M.	Waterhouse, Capt. Rt. Hon. C.
Redmayne, M.	Studholme, H. G.	Watkinson, Rt. Hon. Harold
Rees-Davies, W. R.	Summers, G. S. (Aylesbury)	Whitelaw, W.S.I.(Penrith & Border)
Remnant, Hon. P.	Sumner, W. D. M. (Orpington)	Williams, Paul (Sunderland, S.)
Renton, D. L. M.	Taylor, Sir Charles (Eastbourne)	Wills, G. (Bridgwater)
Ridsdale, J. E.	Teeling, W.	Wilson, Geoffrey (Truro)
Rippon, A. G. F.	Thomas, Leslie (Canterbury)	Woollam, John Victor
Roberts, Sir Peter (Heeley)	Thompson, Kenneth (Walton)	Yates, William (The Wrekin)
Robertson, Sir David	Thompson, Lt.-Cdr. R. (Croydon, S.)
Robinson, Sir Roland (Blackpool, S.)	Thorneycroft, Rt. Hon. P.	TELLERS FOR THE AYES:
Rodgers, John (Sevenoaks)	Touche, Sir Gordon	Mr. Barber and Mr. Bryan.

NOES
Ainsley, J. W.	Griffiths, Rt. Hon. James (Llanelly)	Pargiter, G. A.
Albu, A. H.	Griffiths, William (Exchange)	Parker, J.
Allen, Arthur (Bosworth)	Hale, Leslie	Paton, J.
Allen, Scholefield (Crewe)	Hall, Rt. Hn. Glenvil (Colne Valley)	Peart, T. F.
Bacon, Miss Alice	Hamilton, W. W.	Plummer, Sir Leslie
Bellenger, Rt. Hon. F. J.	Hannan, W.	Popplewell, E.
Benn, Hn. Wedgwood (Bristol, S.E.)	Hastings, S.	Price, Philips (Gloucestershire, W.)
Benson, G.	Hayman, F. H.	Probert, A. R.
Beswick, F.	Henderson, Rt. Hn. A. (Rwly Regis)	Proctor, W. T.
Blackburn, F.	Herbison, Miss M.	Pryde, D. J.
Blyton, W. R.	Hobson, C. R.	Rankin, John
Bottomley, Rt. Hon. A. G.	Holmes, Horace	Redhead, E. C.
Bowden, H. W. (Leicester, S.W.)	Houghton, Douglas	Reeves, J.
Bowles, F. G.	Hubbard, T. F.	Reid, William
Braddock, Mrs. Elizabeth	Hughes, Emrys (S. Ayrshire)	Robens, Rt. Hon, A.
Brookway, A. F.	Hughes, Hector (Aberdeen, N.)	Robinson, Kenneth (St. Pancras, N.)
Broughton, Dr. A. D. D.	Hunter, A. E.	Rogers, George (Kensington, N.)
Brown, Rt. Hon. George (Belper)	Irvine, A. J. (Edge Hill)	Ross, William
Burden, F. F. A.	Irving, S. (Dartford)	Royle, C.
Burke, W. A.	Isaacs, Rt. Hon. G. A.	Shurmer, P. L. E.
Burton, Miss F. E.	Jay, Rt. Hon. D. P. T.	Silverman, Julius (Aston)
Butler, Herbert (Hackney, C.)	Jeger, George (Goole)	Simmons, C. J. (Brierley Hill)
Butler, Mrs. Joyce (Wood Green)	Jeger, Mrs. Lena (Holbn & St. Pncs, S.)	Skeffington, A. M.
Callaghan L. J.	Jenkins, Roy (Stechford)	Slater, J. (Sedgefield)
Castle, Mrs. B. A.	Johnson, James (Rugby)	Snow, J. W.
Champion, A, J.	Jones, David (The Hartlepools)	Sorensen, R. W.
Chetwynd, G. R.	Jones, Jack (Rotherham)	Sparks, J. A.
Clunie, J.	Kenyon, C.	Steele, T.
Collick, P. H. (Birkenhead)	Key, Rt. Hon. C. W.	Stokes, Rt. Hon. R. R. (Ipswich)
Collins, V. J. (Shoreditch & Finsbury)	King, Dr. H. M.	Strauss, Rt. Hon. George (Vauxhall)
Corbet, Mrs. Freda	Lawson, G. M.	Stross, Dr. Barnett(Stoke-on-Trent, C.)
Craddock, George (Bradford, S.)	Lee, Miss Jennie (Cannock)	Summerskill, Rt. Hon, E.
Cronin, J. D.	Lindgren, G. S.	Swingler, S. T.
Daines, P.	Mabon, Dr. J. Dickson	Sylvester, G. O.
Darling, George (Hillsborough)	MacColl, J. E.	Taylor, John (West Lothian)
Davies, Harold (Leek)	McGovern, J.	Tomney, F.
Davies, Stephen (Merthyr)	McInnes, J.	Turner-Samuels, M.
de Freitas, Geoffrey	McKay, John (Wallsend)	Ungoed-Thomas, Sir Lynn
Delargy, H. J.	McLeavy, Frank	Viant, S. P.
Dodds, N. N.	MacPherson, Malcolm (Stirling)	Warbey, W. N.
Donnelly, D. L.	Mahon, Simon	Weitzman, D.
Dugdale, Rt. Hn. John (W. Brmwch)	Mallalieu, E. L. (Brigg)
Ede, Rt. Hon. J. C.	Marquand, Rt. Hon. H. A.	Wells, Percy (Faversham)
Edwards, Rt. Hon. John (Brighouse)	Mellish, R. J.	Wells, William (Walsall, N.)
Edwards, Robert (Bilston)	Messer, Sir F.	Wheeldon, W. E.
Edwards, W. J. (Stepney)	Mikardo, Ian	White, Mrs. Eirene (E. Flint)
Evans, Albert (Islington, S.W.)	Mitchison, G. R.	White, Henry (Derbyshire, N.E.)
Evans, Edward (Lowestoft)	Monslow, W.	Willey, Frederick
Evans, Stanley (Wednesbury)	Moody, A. S.	Williams, W. R. (Openshaw)
Fernyhough, E.	Morrison, Rt. Hn. Herbert (Lewis'm, S.)	Williams, W. T. (Barons Court)
Fletcher, Erie	Mulley, F. W.	Willis, Eustace (Edinburgh, E.)
Forman, J. C.	Neal, Harold (Bolsover)	Wilson, Rt. Hon. Harold (Huyton)
Fraser, Thomas (Hamilton)	Noel-Baker, Francis (Swindon)	Winterbottom, Richard
Gaitskell, Rt. Hon. H. T. N.	Oliver, G. H.	Woof, R. E.
Gibson, C. W.	Oram, A. E.	Yates, V. (Ladywood)
Gordon Walker, Rt. Hon. P. C.	Oswald, T.	Younger, Rt. Hon. K.
Greenwood, Anthony	Paget, R. T.
Grenfell, Rt. Hon. D. R.	Paling, Will T. (Dewsbury)	TELLERS FOR THE NOES:
Grey, C. F.	Palmer, A. M. F.	Mr. Short and Mr. Deer

Mr. G. Darling

I beg to move, in page 14, line 1, to leave out paragraph (c). The purpose of the paragraph that we seek to delete is to allow a group of small firms to take countermeasures against, for instance, a large firm which is seeking, perhaps by improper methods, to put the small firms out of business. It will allow the small firms, by permission of the Court, to carry on their proposed measures against the big competitor.

We seek to delete paragraph (c), not because we lack sympathy with the small firm, but for two other reasons. First, we think that this is another good illustration of the fact that one cannot deal with such real problems as this under the legal procedure laid down in the Bill. We suggest that the proper body to deal with such questions is an expanded, reconstructed Monopolies Commission. The second reason is that we think that the gate is opened far too wide and that, with the help of astute lawyers, many restrictive practices which ought to be caught by the Bill will be able to get through.

In considering the paragraph, we must take notice of Clause 18. While the Court may deal with one or two straightforward cases in which public opinion would probably agree that the small firms ought to be allowed to continue their measures to protect themselves against sonic monopoly development, in coming to those decisions the Court will be laying down case law to be used on subsequent occasions. Although the first two or three judgments may be satisfactory, the case law so established may be used to determine judgments in subsequent cases in which, although the legal situation may be the same, the economic and social circumstances may be entirely different.

Consequently, we say that, in the public interest, it is improper to deal with all the cases of this kind by means of the legal procedure. The reduction in the power, influence and size of the Commission will mean that many of the issues which we think ought to be examined by the Commission will have to undergo the Court procedure. We believe that many cases ought not to be judged as involving very narrow legal questions but ought to be considered in the light of their wider political and economic aspects.

I should probably be out of order if I suggested how the Commission could be improved and widened to deal with those cases. It may well be that the defensive practices of the smaller firms, taken by themselves, will fall foul of the Bill, but they may be permitted to be carried on because they are defensive practices against the action of the big firm which is trying, probably improperly, to put the small firms out of business. The Court ought to be concerned not so much about the defensive practices as about the restrictive practices against which the small firms are trying to defend themselves. Yet in many cases those practices will not come within the purview of the Court and will not be considered by it.

6.45 p.m.

Let us take the case of petrol companies. We have petrol companies individually—not by any collective action—making exclusive arrangements to supply petrol to garages and turning private garages into tied garages. In doing so, they will probably, as seems to be the case already, make it difficult for the smaller lubricating oil companies, which are not concerned in the petrol trade, to carry on. The oil companies may be barred from their sales outlets by the action of individual petrol companies.

It may be that the small oil companies and the manufacturers of other motor car equipment and materials will get together in a defensive arrangement against the petrol companies. If they resort to practices which would otherwise be banned, all that the Bill will deal with under this paragraph will be the practices of the small firms employed in defending themselves. Whatever they do, the big petrol companies will be outside the scope of the Bill because they will not be resorting to collective action but will be behaving individually.

Consequently, the Court will be concerned not with the real cause of the complaint, which is the exclusive trading development of the big petrol companies, but the defensive arrangements of the smaller companies. That is dealing with the matter the wrong way round, and is why we think that these matters should be dealt with by the Commission and not by the Court.

There is the second aspect, that of opening the door too wide. Let us suppose that, on the very good grounds of the case that I have mentioned, the oil companies were allowed to develop some defensive action against the petrol companies. Case law would be built up which would be cited in other cases. We might get all kinds of cases of small firms getting together and adopting practices, which would otherwise be made unlawful by the Bill, and being given permission to continue those practices. No one can say at this stage how wide that will go. We suggest that that would be opening the door far too wide, and that it would be better to delete paragraph (c), and at a later stage of the Bill provide for the Commission and not the Court to deal with cases of that type.

We believe that what is in mind here is groups of firms or persons getting together in order to keep competition going in an industry. Consequently, we believe that that sort of case ought to be referred to an enlarged Commission. It would be far better to let the Commission deal with such problems than to submit them to the Court and open wide the door to all sorts of arrangements which would otherwise be made unlawful by the Bill.

Mr. P. Thorneycroft

This paragraph is concerned with a narrow point. It is simply to admit the argument before the Court that persons have entered into mutual restrictions in order to deal with a large competitor in industry who is himself resorting to restrictions. It is really taken from the majority Report of the Monopolies Commission itself, paragraph 240 (d), which says, Where the arrangement is a necessary means of enabling smaller concerns in a trade to compete effectively with a very large concern in that trade which is itself resorting to restrictive practices. I am sure the Committee would generally agree that that is a reasonable provision to include. The cases may in fact be very few.

We are putting down an Amendment to establish that precedents under Clause 18 are not simply precedents at law but precedents on the facts. We will deal with that when we reach that Clause. I quite agree that there may be cases of larger firms—the petrol companies might be one example—suitable for a proper judgment by the Monopolies Commission. I think that is a perfectly fair and proper point to take, but at the same time I do not think it answers the case put forward by the majority of the Monopolies Commission itself, that in provisions of this kind one ought to admit, at any rate, the argument that these are protective arrangements directed against a large competitor in the trade.

Sir L. Ungoed-Thomas

Our attitude to this paragraph has been put so completely by my hon. Friend the Member for Hillsborough (Mr. G. Darling) that I have very little to add. We recognise that we must accept this paragraph in the Bill as it stands; there obviously must be some arrangement of this kind, and, as the President said, it was in fact recommended by the Monopolies Corn-mission, although, as he also said, that is not necessarily the final word. But, on this occasion, it is generally accepted.

We should be glad of a little help from the President on one point. Where there is, under paragraph (c), a restriction, and the restrictive practice is allowed to continue because it is necessary in order to sustain someone's position against some monopolist of one kind or another, what happens then, if that other monopolist has been dealt with? This is very much the same point as that which I raised on the earlier provision, namely, how is it proposed to deal with such a case when the reason for the applicant coming within paragraph (c) has itself disappeared?

Mr. Thorneycroft

I think that the answer is clear, that if the monopoly or a large firm had been dealt with in some other way, there would probably have been a material change of circumstances within the terms of Clause 17, giving ground for an application for review.

Mr. Robert Edwards (Bilston)

The President has not, I think, been very convincing in his reply. I will give a concrete example to illustrate my reason for saying that. For many years, Imperial Chemical Industries Limited concentrated on the production of dyestuffs, acids, alkalis, and all the heavy chemicals. Then they moved into the production of drugs. The small drug firms, in order to protect themselves against the challenge of I.C.I., did precisely what is provided for in paragraph (c); they got together and formed what seemed a very harmless protective cartel. Experience has, however, proved otherwise.

After an exchange of pamphlets between the head of Boots, the drug firm, and the Chairman of I.C.I., each conclemning one another for a few months—those pamphlets, incidentally, being reviewed in the The Times very extensively—quite suddenly this controversy disappeared because there was an understanding between the group of small drug firms forming themselves into a protective cartel against the inroads of the big monopolist, and out of that agreement came fixed prices for hundreds of lifesaving drugs, and those fixed prices are maintained to this present day.

This is precisely what will be repeated under the protection of the law enunciated in paragraph (c). The example that I have given can be treated as a sort of blueprint of what will happen in the future, and the proposed paragraph seems to me very much of a backhanded way of going about creating the best method of maintaining competition in order to safeguard the public interest against one single monopoly.

I presume that it would be wasting time to press the Amendment moved so ably by my hon. Friend the Member for Hillsborough (Mr. G. Darling); nevertheless, the statement should be on record in this Committee that this is a very dangerous procedure which can lead to a wide range of small cartels which will be competitive with the big firm in the initial stages but which ultimately might well come to terms. The result will be that our economy will be blanketed by small cartels and big monopolies which, out of the original conflict, have come to secret agreements with one another. Even though there seems to be very little support for the Amendment at this stage, I hope that the President will answer the point which I have made. How does one deal with the problem that I have posed to him, of which I have given a concrete example—something which did in fact happen and is existing today?

Mr. A. J. Irvine

We ought not to end the discussion on this Amendment without having from the President of the Board of Trade an assurance about one question in particular. A measure taken by any person not party to the agreement might be deemed a measure of becoming a party to another registrable agreement. That seems to present a possible difficulty. Unless we were vigilant, there might be some attempt made to make use of this paragraph to set in motion what would, in effect, be a series of competing rings. I think that that was the sort of thing which my hon. Friend the Member for Bilston (Mr. R. Edwards) had in mind. There is a danger of that, and it would obviously be absurd if one ring was to be caught by the Bill for its operations, but, if there were two equivalent operations proceeding at the same time, they could both escape.

I have in mind that in a subsequent Amendment it is proposed to make it quite clear "any one person" is meant. With all respect, I do not think that entirely meets the difficulty which I am facing, because, as a matter of strict construction, it would be, I should have thought, a measure taken by one person when he entered into another registrable agreement. I should welcome an assurance about that.

Mr. P. Thorneycroft

The answer to the first point is that it will be entirely a matter for the Court, not for me, to say whether what had been done was reasonably necessary to counteract measures taken, and the Court would have to say whether that was established or not. I do not want to go any further into the Clause at the moment, but the Court would have to go on from that point to strike a balance between that and any other detriment to the public interest. I do not want to debate that now, because we shall do so later.

With regard to competing rings, it is very much in our minds that we want to restrict this provision to one person. Might I deal with the matter on the next Amendment, because these questions are so interlocked that it would be very much simpler to deal with the two together?

Sir L. Ungoed-Thomas

There is a point here which I think we should ask the President to be so good as to look at. Suppose an applicant comes before the Court, saying that it is necessary for him to have protection against another person or, perhaps, interconnecting bodies or anything of that kind. That body being a person, interconnected bodies corporate, or partnership, none of that would come within the scope of the Bill, unless it happened to be another cartel, or something of that kind, which would be dealt with entirely separately and would not come within paragraph (c). There could not, I take it, be an application under paragraph (c) for protection on the ground of a restrictive practice which could later come before the Court and claim protection on the ground of the restrictive practice which had originally come before the Court, thus creating a vicious circle. As I understand it, that position could not arise, because, as the President indicated, a person or interconnected bodies corporate or a partnership, if it falls into evil ways, will come within the scope of the Monopolies Commission and not under the Bill.

Mr. P. Thorneycroft

That is certainly our intention, and I believe it to be the effect of the Clause.

Mr. G. Darling

In view of the President's explanation, and the fact that we can return to this subject again when we reach Part III of the Bill, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

7.0 p.m.

Mr. P. Thorneycroft

I beg to move, in page 14, line 2, after "any", to insert "one".

The Deputy-Chairman (Sir Rhys Hopkin Morris)

It might be for the convenience of the Committee to take together the Amendments, in page 14, line 2, after "any", to insert "one", and in page 14, line 2, after "person", to insert: or any two or more persons being interconnected bodies corporate".

Mr. Thorneycroft

This is to meet the point which hon. Members have in mind. We do not want to give the right to argue that a ring exists because another ring exists. That would be a sort of unending situation. We are therefore anxious to make it absolutely plain that the provision is restricted to a person, to interconnected bodies corporate, or partnerships. It does not operate in the case of another ring, for the very good reason that if there is another ring or an arrangement of that kind, the Court can be seized of that and that would be the right way to deal with it and not through this particular subsection.

I accept in principle the Amendment in the name of the hon. Member for Huddersfield, West (Mr. Wade), but I hope that the hon. Member will not press it, because we have an Amendment to the same effect in page 14, line 41. That meets the substance of what he wants.

Mr. Wade

I have not counted the score; I am not sure how many of my Amendments the President has accepted. On matters of major principle, I have not been very successful, but I am thankful for small mercies. His Amendment meets my point and I shall not move mine.

Amendment agreed to.

Mr. P. Thorneycroft

I beg to move, in page 14, line 8, to leave out from "supply" to "a" in line 11 and to insert: of goods to, or the acquisition of goods from, any one person not party thereto who controls". We are now moving to paragraph (d). I should like to remind the Committee what it is about. This deals not with trade with a rival competitor, but trade, supply or acquisition from someone who holds a preponderant part in the trade. It says: that the restriction is reasonably necessary to enable the persons party to the agreement to negotiate fair terms for the supply or acquisition of goods to or from … persons … not party thereto who controls or together control a preponderant part of the trade or business of acquiring or supplying such goods. The Clause as it stands allows the argument that the agreement is necessary to deal with an outside person—somebody not in the ring—who holds a preponderant part of a trade of acquiring or supplying. This series of Amendments covers the case where the outside person is not in the trade at all. They are irrelevant in the case of supply, because if one carries on supply, one inevitably carries on a business of supply.

However, that does not necessarily follow in the case of acquiring. There are probably many cases, say, public authorities of various kind, either alone of together, who are quite outside the realm of the Restrictive Practices Court, or, indeed, the Monopolies Commission, because no one would suggest referring a local authority to a Monopolies Commission, but it might hold a monopoly in acquiring goods of a particular kind. In that case, the argument ought to be permitted. Normally the Clause will be sufficient, because, normally, the people who acquire or supply will be carrying on the business of acquiring or supplying, but one can think of cases where they are not carrying on business in any sense of the term, but are acquirers of the goods in question.

Sir L. Ungoed-Thomas

In view of the explanation which the President has been good enough to give, it is a little difficult to see that it is in the public interest—if that is the eventual test and it is the governing test under Clause 15—to say that one could have a monopoly, combination, cartel, or restrictive arrangement of this kind against public authorities, but could not have it against other people. If that is what it comes to, that hardly seems a justifiable ground.

On the other hand, I can well appreciate that it would be a real hardship upon people not to be able to combine together in circumstances where one person holds the monopoly. It would be difficult, in principle, to draw a distinction between any kind of public authority and any kind of private authority in those circumstances.

it is a difficult problem and I am inclined to agree with the President that the best course is to leave it here within the paragraph, to leave the Court to deal with it and to see what the balance is in the public benefit. I am concerned with one point which is not an entirely drafting matter. Would the Amendment in page 14, line 12, at the end to insert: or for the supply of goods to any person not party to the agreement and not carrying on such a trade or business who, either alone or in combination with any other such person, controls a preponderant part of the market for such goods. lets in the vicious circle of the combination of restrictive practices which we mentioned in our last discussion? Why do we have the distinction between the combination with any other such person which is introduced in the Amendment in page 14, line 12 and not in this Amendment?

Mr. P. Thorneycroft

That point puzzled me for some time. The answer is that as they are not carrying on business, the Court could never be seized of their activities. They would be outside Clause 5, and therefore they are in a class different from that of the persons carrying on business and a ring of them—and it might be public or private—would not be open to challenge in any way. That is why we have included them in this Clause.

Mr. A. J. Irvine (Liverpool, Edge Hill)

In view of the fact that my hon. and learned Friend the Member for Leicester, North-East (Sir L. UngoedThomas) has said that the view of the President of the Board of Trade is probably correct, I hesitate, in that context, to intervene.

If this provision goes through, the beneficiary of it will not be the monopoly supplier. The monopoly supplier has what, to him, is a satisfactory price for his product largely because a cartel which purchases from him is, by the exercise of a restrictive practice, maintaining at a high level the prices of the goods that it sells. If the restrictive practice has to come to an end because of the Bill, nobody will be left to pay the monopoly supplier the high price of the article of which he has a monopoly. I express my doubt about this provision somewhat diffidently. Throughout our consideration of these Clauses I am vigilant that too much is not getting by. If the President of the Board of Trade can offer a further word of assurance in this matter I shall be much obliged.

Mr. P. Thorneycroft

This is not an easy point. We want to deal with cases where there is a strong or perhaps a monopoly buyer who is not in the trade, while the sellers are in a very weak position. Their defence for coming together is that it offers their only possibility of bargaining with the monopoly buyer. It is not a very common arrangement, but there is historical precedent on both sides of industry. We do not want to extend this matter too far and get to the point where a ring against the local authority can be justified in every locality. We have to deal with the case of a supplier who is without access to other markets and is at the mercy of a monopoly buyer.

That is what the Amendment is intended to do. I do not think it will happen very often on a national scale. It might conceivably happen on a more limited scale, but it would still be the rare case. I think the Clause deals with it, particularly when we bear in mind the question of detriment to the public which we have to discuss at a later stage. I assure the Committee that our purpose here is to include in the Clause not only persons who are engaged in the business in acquiring, but others who would be technically omitted because they are not in the trade or business.

Amendment agreed to.

Mr. Harold Steward (Stockport, South)

On a point of order. May I ask whether the Amendment in page 14, line 10, after "who" to insert: generally or in a particular area will be called?

The Deputy-Chairman (Sir Rhys Hopkin Morris)

That Amendment has not been selected.

Further Amendment made: In page 14, line 12, at end insert: or for the supply of goods to any person not party to the agreement and not carrying on such a trade or business who, either alone or in combination with any other such person, controls a preponderant part of the market for such goods ".—[Mr. P. Thorneycroft.]

7.15 p.m.

Mr. P. Thorneycroft

I beg to move, in page 14, line 13, to leave out paragraph (e).

This paragraph has to come out because we have covered the point already in the Bill.

Sir L. Ungoed-Thomas

We almost whoop for joy when we hear the President of the Board of Trade move this Amendment. The point is covered already in the Bill only in the sense that it has been, by Amendment, taken out of the Bill altogether as included in Clause 6.

That was done in these circumstances. Paragraph (e) covered the case where a rationalisation scheme has been approved by the Board of Trade and one of the grounds is that the scheme is in the national interest. Therefore the Board of Trade in that case is deciding a matter of national interest which might be in complete conflict with another decision on national interest as well as in complete conflict with the jurisdiction on the question of national interest, if this matter were brought before the Court. Quite rightly, the matter of national interest should be decided by the Government and not by the Court at all.

I am almost tempted to quote passages from the speech which the President of the Board of Trade made the day before yesterday when we welcomed him with open arms to speak on this side of the Committee. I ventured to mention on the Second Reading debate this conflict between paragraph (e) and the Clause, and on that occasion I was met with contradictory jeers from the right hon. and learned Member for Chertsey (Sir L. Heald) and the hon. and gallant Member for Leicester, South-East (Captain Waterhouse) who is sitting beside him. There was conflict between those two, and we very much welcome that the conflict is resolved in favour of the Board of Trade politically, rather than in favour of the Restrictive Practices Court judicially. In this respect we are glad to have converted the President of the Board of Trade.

Mr. Wade

I agree that paragraph (e) is inappropriate in this Clause.

Amendment agreed to.

Mr. Wade

I beg to move, in page 14, line 18, to leave out paragraph (f).

The Deputy-Chairman

If it meets the convenience of the Committee, this Amendment may be taken with the Amendments in page 14, line 20, to leave out from "likely" to "to" in line 25, and in line 21, to leave out "and" and to insert "or".

Mr. Wade

My hon. Friends and I have endeavoured to show some discrimination in dealing with the Clause and in amending it. The paragraph which I am proposing to omit will make an appalling task for the Court. I do not think I can do better than to quote the last two lines of a leading article which appeared in The Times yesterday. Is it right that a Court should have to weigh the alleged likelihood that the removal of a restriction would 'cause a substantial reduction in the volume or earnings of the export trade' against the alleged discomfiture of consumers or would-be new entrants into the industry? Argument on such a matter would be far more general and doctrinal than anything commonly heard in the Royal Courts of Justice. I do not want to make a second Second Reading speech. I have just two general points to make. First, I think that it is well recognised that most of these restrictive arrangements have grown up out of a fear of large-scale unemployment, or a fear of insecurity—and the experience of the pre-war years has added to those fears. It is the duty of the Government so to guide the economy that there is not large-scale or unnecessary unemployment, and that does not appear to me to be the prime function of employers. There is a danger that if the paragraph were accepted the principle might be established that it is right and proper for employers to get together in some form of association and make agreements of this nature in order to safeguard their own security and the security of their employees. That might be a very dangerous principle.

Secondly, there is a fairly widespread fear of the effects of automation. I recently received a delegation of employees from a firm in Yorkshire, and they were worried about the subject of automation. Yet, if these new technical advances do not take place, the effects upon our economy may be very serious. If one allows, in principle, the proposition that employers are entitled to get together for their own security, out of fear of unemployment, it would be extremely difficult to persuade employees to cooperate in these changes, which might involve temporary unemployment.

It is for these general reasons that think it would be inadvisable to leave the paragraph in the Bill. Added to that, it would be extremely difficult for any court to decide the kind of issue which would be argued before it by those who attempted to claim exemption within the paragraph.

Sir Peter Roberts (Sheffield, Heeley)

First, I should like to take up the point made by the hon. Member for Huddersfield, West (Mr. Wade) about the suitability of the Court to deal with these problems of employment and unemployment. As I understand the matter, the Court will have assessors, taken from industry, who will sit to assist the judge. I would remind the hon. Member that the Railway and Canal Commission had to deal with very similar matters. It is possible to deal with industrial problems in such a court, and I do not think that that point made by the hon. Member should weigh with the Committee.

I also have two points to make. First, I support the President in his view that this paragraph should remain in the Bill. Any suggestion to take it out would be quite wrong. Unemployment is best dealt with by collective arrangements between employers. In 1930 and 1931, nearly 49 per cent. of the people engaged in the lighter steel trade in Sheffield were unemployed. It was only by associations of trade, which enabled us to hold prices steady and have stable markets, that we were able to build up again a great body of employment in the city. It now has a greater volume of employment than ever before, and this has been made possible by price-level associations.

We have had some interesting speeches upon the question whether these associations are good or bad. It is impossible for anybody to make a generalisation. Some are good and some are bad. The benefit of my right hon. Friend's proposal is that it enables us to discuss the matter and sift the good from the bad. There are different kinds of trades to consider in this respect, and I would make a great distinction between the distributive and shop trades and the main, basic productive industries. There is a very important distinction between the two.

I listened with a certain amount of interest to the arguments of hon. Members opposite about book sellers, chemists and petrol companies, but it is surely the productive associations which are built up mainly in order to improve our industry, and I should have thought that the trade union movement would have as much interest as the employers in maintaining that form of employment.

Having dealt with the question why we must have a paragraph of this kind in the Bill, and how the Court can deal with the matter, I want to ensure that the paragraph is effective. I cannot think that the Court would be able properly to deal with the matter as the paragraph is at present worded. I would draw my right hon. Friend's attention to the words, serious and persistent adverse effect on the general level of unemployment in an area … The words "serious and persistent" make it difficult for those of us who wish to support the President. I am not saying that the substitution of the word "or" for "and" is the answer, but with the present wording it may be difficult for the Court to deal with the question whether serious and persistent unemployment together may result.

There are pockets of unemployment which may be of a temporary nature, and where it may be possible to remedy the situation by some form of stocking arrangement within industry. For instance, in the case of the cotton trade, the Government gave orders to build up stocks. Industries can help themselves in that way. Some kind of association might be able to deal with a pocket of unemployment. So far as I can see, however, we should not be able to get through the gate here provided in the Bill, because such unemployment would not be "serious and persistent".

It would be difficult to prove that it was persistent. I suggest that it would be better if my right hon. Friend divorced the two words in some manner, and made the fact that employment was likely to be serious a sufficient cause to bring an association before the Court. If he thinks that there might be some niggling persistence, which would not be sufficient to require special action, he could no doubt find words to cover the point.

If the Court is able to decide this matter, I believe that it will assist in maintaining employment. I am certain that nobody on either side of the Committee wishes to do anything which might increase unemployment. Therefore, I beg hon. Members opposite not to press for the deletion of this paragraph—and I ask my right hon. Friend to see if he can in some way amend the wording so that it can cover cases of unemployment which, though serious, might not be persistent.

Mr. P. Thorneycroft

If I say a few words at this stage it may assist the Committee. First, I agree with the hon. Member for Huddersfield, West (Mr. Wade) and my hon. Friend the Member for Heeley (Sir P. Roberts) about the importance of the paragraph. It is by no means an easy matter to deal with. I share my hon. Friend's view that this paragraph should remain in the Bill. I think that there would be an obvious flaw in a Bill which did not permit the argument to be raised that certain restrictions were being maintained because serious and persistent unemployment might result if they were abandoned. I hope that the Committee will take that view.

At the same time, I fully recognise the dangers pointed out by the hon. Member for Huddersfield, West. Unless carefully handled, this Clause, if widened or weakened, could ruin the purpose of the Bill. It is one of the most dangerous and difficult Clauses that we have had to discuss. The interests of both sides of industry are very much together on this matter. It is important to understand what has to be shown and what is insufficient. It is not sufficient to show temporary unemployment. I do not think that would be enough because there are other ways of dealing with temporary unemployment.

7.30 p.m.

In the world in which we live today—I do not say that we always expect to be successful—there are broad measures of Government policy designed to encourage the tempo of demand and the like, and I do not think that it would be appropriate to encourage the idea that by restrictions on either side—I do not restrict myself here rigidly to the employers' side—we should attempt to deal with temporary pockets of unemployment. Nor does this Clause say that restriction is necessary because otherwise there would be an effect upon unemployment in industry. It may well happen that by restriction we can get employment in a particular industry absolutely fixed, or we can attempt to do so. It would be quite wrong to permit, that argument because that would be to accept the theory that we ought to allow groups of persons, among themselves, by mutual restriction to attempt to freeze the economy.

The right answer is that if restrictions cause some unemployment, and some people may, as a result, have to leave employment in a particular industry, they should go to some other industry and take up jobs in it. That is an essential prerequisite to a growing, thriving economy.

We are very anxious—and that is why I say that the wording of this Clause has to be watched so carefully—not to open that particular loophole in these arrangements. I do not think we have done so; in fact I am sure we have not. We have considered this matter very carefully and we say—and I think it is right that we should provide for it—that where a case can be made out that there is a likelihood of large-scale, persistent unemployment, it should be be possible to advance that argument to the Court.

I say that because we have in mind the sort of case which many hon. Members in the Committee will remember in their political experience. Let us take the shipbuilding industry on the North-East Coast. It may be that the position there was very far removed from what we have now when the order books are full and everything looks all right. Nevertheless, although the argument would not be accepted in the courts today—it could not be sustained for a moment—I think that both sides of the industry would think me a little unrealistic if we did not include in the Bill a provision so worded that if the situation alters and things change the kind of argument which governs that sort of situation could be advanced.

This Clause admits argument upon that basis, but it is upon that basis only, and I hope that no one in the Committee will press me to widen the Clause or to weaken it or to do anything which would admit of temporary pockets of unemployment being dealt with in this way. I think that I can assure hon. Members that as the Clause is drawn it does not weaken the Bill, and is a proper provision.

Mr. Jay

I think that the President in this case is perfectly right to put this paragraph into the Bill even though it was not recommended by the Monopolies Commission. I do not agree on this matter with the Members of the Liberal Party, and to that extent I cannot join the Liberal Party, despite my views about consumer choice.

I think that the President this time has got his economics right. Apart from the human argument, it is not good economic policy to break up some agreements at the cost of creating serious and persistent unemployment. That does not even increase the national income; it simply put some people out of work, and they do not find alternative employment. The right solution, as I think the President will agree, for such a situation is action planned by the Government to bring additional and perhaps different work into an area.

To take another instance before the war, even more specific than the one on the North-East Coast, there was the case of Dundee, almost wholly dependent on one industry which suffered from very heavy and persistent unemployment. I do not know whether there were restrictive practices by the jute manufacturers or not in Dundee before the war, but if there were, such practices maintained hundreds and thousands in employment who would otherwise have been unemployed. I cannot convince myself that it would be right to break up those restrictive practices and do nothing else whatever. Nevertheless, on the whole I agree with the President that it is right to keep in the words, "serious and persistent". I think that on balance they are probably better than "serious or persistent", although I think that that Amendment is a rather tempting one. I think that on balance "serious and persistent" is better because clearly this Clause is liable, like many others, to be pushed too far.

Sir P. Roberts

How would the right hon. Gentleman prove to the Court that something was likely to be persistent in the future?

Mr. Jay

The hon. Gentleman supports the argument that I have been constantly putting forward from this side of the Committee that it will be almost impossible to prove these things before a court of law at all. This again illustrates our main argument that these are most extraordinary decisions to expect a court of law to take.

Mr. Simon

Why does the right hon. Gentleman think that it would be any easier for a tribunal to make up its mind on exactly the same problem?

Mr. Jay

It would be easier, in our opinion, for the Monopolies Commission and the Board of Trade to make up their minds on that kind of problem, and it is precisely the kind of problem upon which the Board of Trade does make up its mind when it decides, for instance, to schedule an area as a Development Area. What will the evidence be? The evidence presumably that will be brought before the Court to prove that there was likely to be serious and persistent unemployment will be evidence from the Board of Trade and the Ministry of Labour. I suppose that that would be necessary—I should like to know whether that would be in order before the Court—and the only way effectively to prove it would be to bring statisticians of the Ministry of Labour before the Court and judges in order to prove the case.

I think that that is most extraordinary procedure. Accepting that we have the scheme of things that we have, I think that the subsection is necessary, and I think that the same conclusion applies to the substantial export earnings which are included in this paragraph, as well as the reference to employment. I think that as this country's balance of payments situation at the moment is so difficult and likely to be so difficult for as long as we can foresee, we cannot afford the luxury, so to speak, of breaking up restrictive agreements which may be undesirable in themselves if they are going to have a substantial and serious effect on our export earnings. It is possible that neither of these cases may ever arise. I do not think that it is very likely that the kind of situation envisaged under the unemployment wording is likely to arise, but in case it does I think that it is perfectly right and wise to have that wording in the Clause.

Mr. Angus Maude (Ealing, South)

As will be seen by the Amendment which we have put down, my hon. Friends and myself are less concerned about the escape clause in respect of export earnings than is the hon. Member for Huddersfield, West (Mr. Wade). Regarding the unemployment proviso with which we are concerned, I was considerably encouraged by the speech of the President but, I am afraid, not quite encouraged enough. I was glad to know that my right hon. Friend recognised the great danger inherent in this paragraph and that he was not proposing to weaken it in the way suggested by my hon. Friend the Member for Heeley (Sir P. Roberts). It has been generally appreciated how extraordinarily difficult of decision are these questions and how great is the risk that, for human and possibly emotional reasons, there could be a tendency to exaggerate the circumstances for which exception is claimed.

Both my hon. Friend and the right hon. Member for Battersea, North (Mr. Jay) sought to justify this paragraph by reference to events which took place before the war and during the slump of the 1930s. This seems to me precisely the sort of argument which makes this paragraph so dangerous. We are not dealing with a period of general unemployment; and I suggest that were we to run into a period of general and serious unemployment, the onslaught on a number of the provisions in this Bill would be so enormous that it would be virtually impossible for any Government to hold the line. I hope that the Government would hold the line in respect of most restrictive practices, but nevertheless there would be a general campaign to enable a number of restrictive practices, of the sort we got to know so well during the rationalisation period between the wars, to be reinstated.

But in a period of full employment, which may yet be characterised by the decline of certain individual industries, very different considerations arise in certain areas, and I do not believe that we ought to risk the sort of impediments in the way of economic progress which this paragraph might admit. For example, it would. I think, be reasonable for an industry to claim before the Court, if this paragraph remained part of the Bill, that it was perfectly reasonable for it not only to fix its prices but also to restrict the quantity of production in order to keep prices up and thus keep a large proportion of its original labour force working on short time; instead of making them available for transfer to other industries which might, as so many are now, be crying out for additional labour.

For one thing this is a perpetual temptation to any Government—and to the Board of Trade and the Ministry of Labour and National Service in particular—to avoid the task of trying to diversify the industry of an area, and to take some steps in a less harmful economic way to mitigate the unemployment which might be arising. If a declining industry is frozen into its present pattern and at its present level of production, prices and employment, the most dangerous developments conceivable may follow. I should have thought that this was one case in which, for once, I could agree with some of the things said by hon. Gentlemen opposite about the difficulties of arguing these things before a court of law.

I do not take the view that it is impossible for a court of law to deal with industrial matters. Nor do I take the view that it is impossible for a court to judge what is a reasonable degree and then—and this is what I think may very well always prove a temptation in this case—to give rather more than the benefit of a reasonable doubt in favour of those who say that serious and persistent unemployment is likely. If we look at the words of the paragraph we find that not only conditions "actually obtaining" are to be taken into account, but the conditions to be "reasonably foreseen" at the time of the application.

That seems to me a most extraordinary thing to have to argue before a court. During his Budget speech, the Chancellor of the Exchequer talked about the difficulties of economic forecasting, and said that experts were always looking up trains in last year's Bradshaw. But to think of them looking up trains in next year's Bradshaw before a judge who has not even a copy of it is even more terrifying.

7.45 p.m.

Mr. Jay

Would not the hon. Gentleman agree that if the question was whether a large steelworks or a shipyard employing practically the whole population of a town were to close down it would not be difficult to know that that would cause unemployment?

Mr. Maude

We are not talking about the closing down of a steelworks or a shipyard in a particular place. But if the only thing which keeps a shipyard or a steelworks going, and keeps employment up in a particular area or town is a restrictive practice and the exploiting of the consumer by keeping up prices, the sooner—in a period of full employment—a readjustment is made which enables that situation to be remedied, the better.

Sir P. Roberts

Would my hon. Friend—

Mr. Maude

No, I cannot give way. I wish to finish this argument.

We cannot adduce that as a satisfactory argument. The danger is that if we do not allow this readjustment to be made at a time of general full employment, when other industries and areas are crying out for labour, we shall get the thing fossilised until perhaps a period when unemployment is beginning to rise in other industries and areas. Then restrictions will be clamped down more firmly and we shall not be able to make the general structural readjustment in the pattern of the industry.

Before my hon. Friend interrupted me I was proposing to make one last appeal to the President. I recognise that the emotional, social and political pressures here are very strong indeed, because of the aftermath of unemployment and the feeling of insecurity between the wars. It may well be that some sort of recognition of that must be made. But I wonder whether, in this one case, my right hon. Friend might feel that it is not inconsistent with his principles to strengthen the safeguard a little more.

I should like him to consider whether, on Report stage, he might so amend this paragraph as to make it necessary for an affirmative Resolution to be laid before Parliament which would justify restriction of this kind being reintroduced. Suppose that they had been broken up and it was desirable that they should be reintroduced, I think that would be a case in which it would be wholly reasonable that Parliament should be able to weigh the evidence and consider it again. But I should like to say once more that I am very worried, and so are some of my hon. Friends, about the dangers inherent in this paragraph, and we would much rather that the right hon. Gentleman took it out altogether.

Mr. R. Edwards

I listened with attention to the speech of the hon. Member for Ealing, South (Mr. Maude), and I find myself in agreement with a great deal of what he had to say. Very rarely do I differ with my right hon. Friend the Member for Battersea, North (Mr. Jay), but on this point I find some small difference of opinion exists between us.

It seems to me that the experiences of monopoly high prices between the war resulted in prolonging unnecessarily the recessions and depressions. We had high prices artificially maintained for basic strategic goods when wholesale, retail and world prices were falling. If in a period of recession we maintain an artificially high price with the object of maintaining local employment, we defeat the whole purpose for which that high price was applied because, automatically and inevitably, we maintain the recession longer than otherwise it would be maintained. That is simple, common sense economics.

I am afraid this Clause can be abused. It can become a premium on inefficiency. We have inefficient industries which would use this escape Clause as an alibi for maintaining high prices based on the social needs of the local population, which may be very short term and may not be based on the general economic interest of the nation as a whole. That is why I think the problem posed in this Clause is a problem which can be dealt with only by economists, businessmen and trade unionists—not by a judiciary. Basically this is the responsibility of the Board of Trade rather than that of even the Monopolies Commission. Basically it is the responsibility of this House rather than that of a judge and two laymen sitting in a High Court.

Take the whole question of the introduction of new means of production, the introduction of automation in old-established industries. The Americans, the Germans, the Japanese and the Russians may have completely automated production in those industries and may be beating us in the markets of the world, but in a certain locality, because a thousand jobs may be in jeopardy, and industry which is the leader in that particular trade might refuse to introduce automation which would cause some redundancy, maintain artificially high prices and argue its case on the basis of this Clause. Such an argument and a diversion in their favour would do harm to the economy of the nation. It would be only of short-term service to the nation and, in the long run, it would be harmful to the workers whose jobs this Clause was being used to protect.

I think this is a very dangerous Clause. I have mentioned that I am a trade union general secretary. In the normal course of events I would be very sympathetic to safeguards of this nature, but there are times when trade union general secretaries have to consider the needs of the whole trade union movement and not the sectional needs of the workers in a particular industry. There are times in history when purely sectional interests have to be swept away in the general interest of the whole nation. Therefore, I do not like this Clause at all. I do not think it would do what it is intended to do—namely, protect the worker and protect exports. I think it would give a very substantial escape and provide for the maintenance of restrictive practices for different reasons from those in the Clause, the maintenance indeed of restrictive practices and high prices.

In any case, I think the Clause is defeatist in relation to our economy. It suggests that we are afraid of expanding the economy and that we may again go down into the depths of depression. I think that is psychologically bad at this time. It also suggests that this House, industry, and intelligent people generally, are afraid of temporary redundancy. I do not think we should be afraid of short-term redundancy with the development of increased production. On both sides of industry, and on both sides of this House, we must have courage to face the social consequences of redundancy in the interest of the general standard of living of the people and in the interests of an economy moving towards abundance. For these reasons—which differ in some small respects from the views of some of my hon. Friends on this side of the Committee—I repeat I have very serious doubts about this Clause.

Sir J. Hutchison

I was delighted to hear my right hon. Friend resist the pressure which has been brought to bear on him to abandon this Clause. I have been bewildered and alarmed at the amount of optimism which has been shown by hon. Members on both sides of this Committee that the present conditions, apparently, are going to endure permanently.

Hon. Members may say that my outlook is psychologically coloured by the fact that I ran some part of industry during the period which has been quoted once or twice and that I know just what a desperate time the industry of the country went through. We are legislating and talking today as though permanent full employment were normal. I am one who thinks it will be extremely difficult to have permanent full employment unless we have a national wages structure. We have been enjoying our standard of employment in circumstances extremely favourable to trade and to full employment. For example, the German competition has not really started, nor has the Japanese competition.

I wonder how many hon. Members have thought what is likely to be Russia's next card. She has quite frankly and blatantly told us that she is still out for world Communism. She has a five-year plan which is likely to put her into the ranks of the big exporting nations. She controls her costs and her policy completely through monopolies. The other day when I was in Germany I found German industrialists talking in exactly the same way. I hope I am not a pessimist, but I think that in a few years' time we are likely to have a completely new international competitor.

For my hon. Friends to speak, as my hon. Friend the Member for Ealing, South (Mr. Maude) spoke just now, as though we are to continue as we are now indefinitely and, if some difficulties rear their ugly heads, we have only to go back and alter legislation, is, I think, a very foolish attitude to take.

Mr. David Ormsby-Gore (Oswestry)

Surely my hon. Friend is not suggesting that if we got back to serious unemployment retaining restrictive practices would be all the Government action that would be necessary? Very much more than that would be needed. Surely private restrictive practices would not save the situation?

Sir J. Hutchison

I saw private restrictive practices save the situation for the whole of the shipbuilding industry of this country. There is no doubt in my mind that unless the private arrangements made by the shipbuilding industry had been put into force the shipbuilding industry of this country would largely have disappeared.

8.0 p.m.

Mr. Holt

There is unemployment when there is a lack of effective demand. That occurred in the 'thirties, as the hon. Member will agree. Will he explain how a continuation of restrictive practices increases the effective demand?

Sir J. Hutchison

Because it limits the amount of competition temporarily until the situation is readjusted and it allows the producer of an article to get a price for it which allows him to carry on. In the shipbuilding industry, the price for ships internationally was so bad that one yard after another was closing its doors, and so the National Shipbuilders' Securities was set up to buy up those yards which were closing their doors and to prevent their use for further shipbuilding for a period of time.

Mr. A. Blenkinsop (Newcastle-upon-Tyne, East)

Does the hon. Member not recognise that the activities of Shipbuilding Securities almost meant that we were not able to produce the ships that were urgently needed throughout the war?

Sir J. Hutchison

I do not agree. If it had not come about we might have produced none, because the whole industry was going gradually under.

I am prepared to say that in connection with the paragraph (f) we would not be likely to get a situation of grave competition without getting unemployment. Therefore, that set of circumstances could be argued before the Court and the sub-clause could, I think, provide a measure of safeguard against the situation which the Committee would be very unwise to ignore. I hope that the word "persistent" is drawn somewhere between permanent and temporary. I am at one with my right hon. Friend in agreeing that a temporary patch of unemployment should not be handled in this way. Labour must be flexible and be able to move from one industry to another. I hope that "persistent" will not be argued as being "permanent," because to prove that unemployment was going to be permanent would be an impossible task.

I should like to make one other appeal to my right hon. Friend. I believe I shall be successful in the appeal I have already made, because he has stated his intention to retain paragraph (f) and I have tried to show how important it is to keep it. I hope he will do something to protect a particular trade which is hard hit by unemployment but which nevertheless does not rank as sufficiently important to cause an adverse effect on the general level of employment in an area. I should like to hear my right hon. Friend say that if a small strategic industry was being put out of business, there would be some protection for it. Its products, though small in quantity, might have a strategic significance with weapons, for example, and be of immense importance to the country. A circumstance of this nature should be able to be taken into account.

Therefore, I hope that my right hon. Friend will agree to the Amendment in the name of my hon. Friends and myself, in line 21, after "on," insert: the availability of skilled labour in the trade or industry to which the agreement relates or". In other words, when a certain industry was being hard hit it would be able to have its case considered by the Court. I apologise for having held the Committee's attention for some little time, but I regard the Clause as being the most important part of the whole Bill. Once again, I urge my right hon. Friend not to weaken it.

Mr. Holt

After hearing the speech of the hon. Member for Scotstoun (Sir J. Hutchison) I am even more concerned than ever that the President of the Board of Trade should seriously look again at the Amendment. In his own words, he said that paragraph (f) might ruin the Bill, and if he considers it more closely I think it will be obvious that it has every chance of ruining it.

I do not want to follow the hon. Member for Scotstoun in the argument which was implied in my intervention, but he and others of his hon. Friends who have the same view must consider the argument again. One simply does not increase demand by restrictive practices. All that happens is that if there is cut-throat competition because of the reduction in demand and firms then try to get together to make things profitable, they can do so by further restricting their output to meet the demand and employing fewer people. That was the kind of thing that happened in the 'thirties, and the consequence was that even more people were thrown on to the employment exchanges to receive their dole.

If circumstances of that kind were to return, the Government should not permit a return to those restrictive practices but should manipulate credit in the ways that we here pretend we know. Perhaps we do not know quite so much as we think. There seems, however, to be a chance that we might ride the storm through the control of credit and by creating demand.

I do not know whether the hon. Member for Ealing, South (Mr. Maude) and his hon. Friends intended this, but their Amendment would make possible, as almost certainly would happen, the subsidising of exports by the home market. It is indeed possible to form that view from the Clause as it stands, because that is happening now.

The Ford Motor Company and other motor car concerns are selling their cars abroad below the home market price, entirely behind our tariff barriers. Whether the barriers existed or not, they could say that competition was so severe abroad that unless they could charge more on the home market by getting together and keeping up their prices, they would not be able to subsidise exports and would, therefore, lose the oversea market.

The most pernicious practices could pass the Court if Parliament accepts paragraph (f). As my hon. Friend the Member for Huddersfield, West (Mr. Wade) said earlier, if there is any question of unemployment in an area, we must not allow the position to become rigid. We must allow the ordinary economic forces to operate in the area. If necessary, the Government have many other ways open to them through subsidies of one kind or another by which they can help the position.

The President, I know, wants to get on with the Bill but I assure him that we feel extremely strongly on the Clause, the dangers of which he recognises himself. If only he would give an assurance that at least he will reconsider the matter again, we could make progress.

Mr. William Shepherd (Cheadle)

I do not want to delay the Committee, but I urge my right hon. Friend to look again at the Clause. I should be much happier if paragraph (f) were removed. It opens an immense loophole and I do not believe that many people outside would be beyond exploiting it. I am always sceptical when people say that they want restrictive practices because they wish to protect the small man. In the same way, I am sceptical about the use of this gateway in the Clause. I think there is a very good case indeed for eliminating it, and I am glad to have heard the speech of the hon. Member for Bilston (Mr. R. Edwards) upon the matter.

It has been said that certain things happened in the 'thirties and that we are still suffering from the effects of restrictive actions taken in those years. The coal situation rests almost entirely on restrictions that took place in the 'thirties. It is a mistake to have in the Bill a provision which reflects that outmoded mentality. It is a hangover from those days when our economic thinking was formed. I am disappointed to find my right hon. Friend putting such a provision in the Bill. I want to see flexibility, and I do not want to see anything in the Bill because in the 'thirties we were foolish enough to take a certain course. We ought not in 1956 to pursue mistakes made in the 'thirties, and I hope that my right hon. Friend will think again about this matter before the Report stage.

Mr. Ede (South Shields)

I support generally the line taken by my right hon. Friend the Member for Battersea. North (Mr. Jay). It was a very courageous speech which the hon. Member for Glasgow, Scotstoun (Sir J. Hutchison) made. I say it was courageous because I think that point of view ought to be mentioned, although I disagree with almost every word that the hon. Member said. I am certain of this, that if his interests had been on the Tyne rather than on the Clyde he would not have viewed the activities of National Shipbuilding Securities, Ltd. with the favour he apparently does.

Let us face the fact that we lost from the shipbuilding industry men whom we could not trace even in the most desperate days of the war. In my constituency and elsewhere on Tyneside there are sites on which ships ought now to be building, and men employed who were lost to the industry; but not a ship may be built there for forty-two years from the date on which National Shipbuilding Securities, Ltd. took over.

Let us recognise that the depression of the 'thirties was appalling in its magnitude, and that anything done under this Bill is not likely to be very much help one way or the other in such a situation. I am quite certain that every Member of the Committee, irrespective of which side he sits, and whatever his views may be on general economic theories, is determined that if we ever look like being in that sort of situation again the most drastic remedies will have to be put through Parliament to avoid the appalling waste of human and physical power which we then experienced and from which we are still suffering. I do not think that consideration of things of that magnitude arise on this paragraph of this Clause, however.

Mr. Hugh Fraser (Stafford and Stone)

I would support the Amendment to which my hon. Friend the Member for Scotstoun (Sir J. Hutchison), has put his name, and to which he alluded a few moments ago. There are industries such as the pottery industry, in which there has been a loss of skilled labour in the same way as there was a loss of skilled labour in the shipbuilding industry prior to the war. In those industries, what is provided by my hon. Friend's Amendment would be a valuable consideration, which could be argued by the industries, and which should be at least viewed by the Court. I hope, therefore, that although my right hon. Friend proposes, as he says, to stand firm, he will look carefully at my hon. Friend's Amendment and consider whether he could not include the words which my hon. Friend's Amendment would insert.

They would meet the very trouble the right hon. Gentleman the Member for South Shields (Mr. Ede) has just spoken about, the loss of skilled labour from certain industries. An argument from the point of view of the pottery industry in particular would, perhaps, be beyond the scope of the debate on this Amendment, and so I shall say no more of that now, but certainly the loss of skilled labour should be a consideration for review by the Court. I do not put it higher than that. We have in the past seen skilled labour lost to important industries, and my hon. Friend's Amendment would be a means of safeguarding against such loss of skilled labour in the future.

8.15 p.m.

Mr. A. J. Irvine

I desire as one privileged to represent a constituency on Merseyside to identify myself with the remarks of my right hon. Friend the Member for Battersea, North (Mr. Jay) my right hon. Friend the Member for South Shields (Mr. Ede) and their view of this paragraph. It is a most extraordinary cross-current of opinion which the debate has revealed, and I find myself in agreement with the President of the Board of Trade and in disagreement with my hon. Friend the Member for Morpeth (Mr. Owen).

There is a fallacy in the Amendment moved by the hon. Member for Bolton, West (Mr. Holt). It is quite true that it is not a justiciable issue, but where the hon. Member in my view, goes wrong in considering this in the context that there is to be a court dealing with these issues is that he then tries to draw a boundary line beyond which it must not go. If we are to refer questions of public interest in terms of commercial and trade policy to a court, we have to refer the whole thing. We cannot stop half way, and I should undoubtedly regard it as a very serious and undesirable thing if any court applying its mind to problems of this kind were to think itself free to exclude from its consideration such a vitally important matter as the likelihood of there being serious and sustained unemployment.

The hon. Member for Ealing, South (Mr. Maude), speaking of his Amendment, spoke of the danger that in discussing unemployment there was an emotional upsurge, and that the realities of the situation were too easily forgotten. He also said that the paragraph might have the effect, should it remain in the Bill, of discouraging the possibility of diversifying industry in an area, which was, in his view, a much better way of combating unemployment than the maintenance of a restrictive practice. I think that the point which he overlooks is that, of course, those considerations to which he referred and to which he gave weight are matters to which the Court will give weight. They are all to be considered, and evidence is to be given upon them all. It would be a matter of evidence and not a matter of emotion, and the discretion of the Court in the matter is fairly satisfactorily preserved in the last part of the Clause. As for this paragraph, I am in entire agreement with the view expressed by the President of the Board of Trade and by my right hon. Friend the Member for Battersea, North.

Amendment negatived.

Mr. Basil Nield (City of Chester)

I beg to move, in page 14, line 25, to leave out from the beginning to "or" in line 26.

It would be convenient, Mr. Hynd, if you and the Committee were to permit it, to consider this Amendment with the next in my name, in page 14, line 26, at the end, to insert: (g) 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 substantial reduction in the volume of earnings of the export trade of the United Kingdom either generally or in respect of the said trade or industry; or.

The Temporary Chairman (Mr. H. Hynd)

I was about to suggest that.

Mr. Nield

I am much obliged, Mr. Hynd.

This is a drafting Amendment, not designed to alter the sense of the Clause in any way, but to improve its shape. The design of the Clause is to set out various sets of circumstances in which a restrictive practice may be justified, and they are set out in paragraphs numbered from (a) to (g), although one of them has now been omitted.

There is one set of circumstances in each paragraph. But for some reason, as drafted, paragraph (f) embraces two such sets of circumstances, namely the question of the level of employment and the question of export trade. It seems to me and to my hon. Friends who have put their names to the Amendment that it would be much more convenient to separate these two quite separate matters and place each in a separate paragraph.

Mr. P. Thorneycroft

This is a matter of drafting, and I think that it is an improvement if these two subjects are placed in separate paragraphs. I am sure it would be agreed that it would be much clearer to have the two separate sets of circumstances dealt with in separate paragraphs.

Sir L. Ungoed-Thomas

I question whether this is just a matter of drafting, though I accept at once from the President of the Board of Trade and the hon. and learned Member for the City of Chester (Mr. Nield) that drafting is what is intended. If the point is really one of drafting I conform immediately, but as we are all agreed on the intention, there should be no substantial difference in the wording.

Mr. Thorneycroft

I apologise to the hon. and learned Member. I omitted to mention the matter because I was thinking of that as something in a separate Amendment. There is a difference in the words. The hon. and learned Member is quite right, and I apologise for not drawing attention to it.

Sir L. Ungoed-Thomas

I quite appreciate that there was some misapprehension in the President's mind, and that drafting was really the intention of the hon. and learned Member for the City of Chester (Mr. Nield). But what the hon. and learned Member has done is not to follow the words of the President in paragraph (f). In that paragraph the material words are, … a substantial reduction in the volume or earnings of the export trade of the United Kingdom. whereas in the second Amendment the words are, … a substantial reduction in the volume or earnings of the export trade of the United Kingdom either generally or in respect of the said trade or industry … Therefore, the words of the Amendment makes the onus on the applicant appreciably less.

They do not have to be earnings which really substantially affect the United Kingdom's position. In other words, they are not earnings which affect the position of the country as a whole, not as it were public-interest earnings, but earnings of the particular trade or industry which is concerned with this restriction. Therefore the test, instead of the public interest, becomes—and I do not want to use unnecessarily controversial words—a private profit test and that makes a substantial difference to the effects of the paragraph.

Mr. P. Thorneycroft

I should like to apologise again for what I am sure the hon. and learned Member will accept as a slip. I had meant to mention the second Amendment which we are now discussing, which is important and separate in that it provides that it must be admitted as a ground for argument that the effect of the removal of the restriction would be a substantial reduction in the volume or earnings of the trade or industry concerned. I think that that is right.

We might well have a small trade exporting a high proportion of its products. Surely it must be permitted to argue that the removal of the arrangement which it had entered into and which might be of a complex nature, sometimes inside, sometimes outside the country and very often interlocked, would have a bad effect upon the exports of that industry. The total export position of the country is made up of exports from often quite small industries, and it would be very damaging to the country if that particular argument were not admitted.

It is not a private-profit argument in quite the sense which the hon. and learned Member for Leicester, North-East (Sir L. Ungoed-Thomas) suggested. Throughout the Bill we have been really concerned to see that we do not do damage to our export trade. We have had several discussions on that at various stages and if it really can be shown on evidence that damage will result to the export trade of one of these industries by the removal of these restrictions, I certainly think that that should be an argument which could properly be put before the Court.

Mr. Holt

The right hon. Gentleman is constantly being pressed by industry to get Germans or Frenchmen, for example, to remove their export subsidies. Does he not realise that, in allowing this arrangement, that is just what will not happen? People will be made to think that unless they can subsidise their exports by holding up some high prices, through a ring, at home they will lose their exports. This is in fact an argument for export subsidies. We understood that the whole of the right hon. Gentleman's policy recently has been not to support export subsidies but to try to get other people in other countries to stop that practice. Do I understand that in this Bill the right hon. Gentleman is reversing that policy and is now in favour of export subsidies?

Mr. Thorneycroft

No, Sir, that is only one isolated example of something that can happen occasionally and no doubt does happen occasionally. Industries all over the world sometimes sell abroad at a lower price than they sell at home. That in its technical sense may be treated as dumping. It is treated as such under the rules of the General Agreement on Tariffs and Trade if it results in a damaging effect on the importing country. The point here, however, is rather wider. It is concerned with a whole range of arrangements and restrictions. Sometimes these arrangements are entirely internal. For example, high and stable prices at home may be argued as a good basis upon which to export anyway, but very often there are mixed agreements, part internal and part external. Some of them may have the effect of arranging markets and matters of that kind.

I am not saying that they are always right or always beneficial. The arguments about them are sometimes com- plex and difficult. There is no doubt that they are entered into by industry often for the purpose of maximising their sales abroad, and that many industries and trades hold, and sincerely believe, that the removal of those networks of arrangements would do substantial damage to them. I am not accepting those arguments, but I say that they are arguments on which we ought properly to be advised.

Mr. Hector Hughes

I hope the right hon. Gentleman will change his mind about this Amendment. It is evil because it considerably reduces the onus of proof on the person who seeks to have his agreement exempted from Clause 16. Under Clause 16 the onus is on the party to an agreement who seeks to have it excluded from the Clause, and it seems to me to be an evil thing to reduce that onus of proof on the party to the agreement, because it would limit the usefulness of the Bill.

8.30 p.m.

Sir L. Ungoed-Thomas

I am not happy to leave this matter as it stands. I will put my difficulty as concisely as I can. First, we are agreed that if there is a substantial reduction in the volume or earnings of the export trade of the United Kingdom, that should be a ground for coming within the application. The difficulty arises solely about the additional words included in the Amendment. The words are "in respect of the said trade or industry".

I grant at once to the right hon. Gentleman that it is not intended to take the trade or industry isolated from the United Kingdom; it must be the earnings of the export trade of the United Kingdom in respect of the said trade or industry. To that extent it is a little stronger than it would be if it were severed completely from connection with the United Kingdom. But it is intended to have some meaning, and the meaning which I suppose it has is that although the amount of reduction in the earnings of the United Kingdom might be negligible, and not worth bothering about, nevertheless, if there is a substantial reduction in the amount of the earnings of the United Kingdom trade or industry as a whole, then the agreement comes within the subsection.

Obviously the trade might be an extremely small one, and it might also be a trade with substantial earnings, but the export part of which is very small. Neverthless it would come within this Amendment because the reduction would be a substantial one in the amount of the export. Therefore, in this last instance we are in the ridiculous position, where the reduction in the volume of earnings does not matter to the United Kingdom because they are negligible in quantity, they do not matter even to the trade or industry because they are a negligible part of it, yet they come within the application. Obviously that is too wide.

I suggest to the right hon. Gentleman that we do not want to take a severe line about this, but I hope that it will be possible to come to some arrangement, because there is a point here which is not in accordance with the intention of the President and his general approach to this matter. Would the right hon. Gentleman therefore be good enough to consider this point before the Report stage, because it is a difficulty which merits looking into?

Mr. P. Thorneycroft

My intention is not to discriminate against an industry just because it is small. The Bill, as drafted, would only admit the argument in the case of a few vast industries because the loss of no other industry's contribution to the export trade could conceivably be said to make a substantial diminution of it. Therefore it is necessary to alter the words and take not simply the United Kingdom but the United Kingdom either generally or in respect of the said trade or industry". The Amendment reads: a substantial reduction in the volume or earnings … and if that can be shown, then I think the argument should properly be advanced. I would remind the hon. and learned Gentleman again that even if one succeeds upon that argument, it is not the end of the matter. We have to balance this advantage against any other detriment to the public when we consider later provisions in the Clause. In the case he cited, where the export earnings were, say, 6s. 3d. a year, reduced to, say, 4s. 5d., I do not imagine for a moment that it would be held under this Clause as being a justification for a network of arrangements. Certainly it would not be so held under Clause 16. A substantial reduction in export earnings would have to be shown.

Sir L. Ungoed-Thomas

We must get this point perfectly clear. The President says that what must be taken into account are the export earnings of the United Kingdom in relation to the trade or industry. He has squarely faced the case which I put to him of a substantial industry with a small fraction of its earnings being export earnings but there nevertheless being a substantial reduction in that amount.

First, in the instance which I am taking, we are arguing on the footing of the export earnings being negligible from the point of view of the United Kingdom position. Consequently, the point is negligible to the United Kingdom. We then look at the matter from the point of view of the trade or industry, and it is here that the President says that the export earnings must be taken into consideration. Why should they be, any more than that the internal earnings should be taken into consideration?

It is something which does not matter to the United Kingdom. We have got rid of that side of it. We are now considering the welfare of or hardship to the trade or industry, and in this instance the President selects the export earnings. That is irrational. Why give more weight to export earnings than internal earnings? The export earnings might be negligible and the internal earnings substantial, or vice versa; to the trade or industry concerned, one is as important as the other.

Mr. P. Thorneycroft

Let me put the matter this way. I am not concerned here with the interests of the trade or industry. I am concerned about the export earnings, and that is the point to which the argument must be addressed. That is a satisfactory answer to part of the hon. and learned Gentleman's argument.

As to the point that it might be a trade or industry whose export earnings were in any event negligible even in relation to that trade or industry, I agree with the hon. and learned Gentleman that that would not be a proper argument to advance. If the Clause admits an argument of that kind, I should certainly be prepared to look at the point. I am concerned that we should not limit the benefit of the Clause simply to the very large industries. We should allow the argument in the case of the smaller ones where there is a substantial export in relation to the trade or industry which is hit if the restriction is removed.

Sir L. Ungoed-Thomas

Perhaps we might go over the matter rather more carefully after the President has had an opportunity to consider the arguments. Perhaps we can return to it at a later stage and not spend more time on it now. It is obviously a matter upon which various representations can be made and which can profitably be discussed before the Report stage.

Amendment agreed to.

Mr. Wade

I beg to move, in page 14, line 26, to leave out from "Kingdom" to the end of line 34.

The object of the Amendment is to delete paragraph (g), which will presumably become paragraph (h) in view of the President's acceptance of another Amendment. There is much that could be said about the paragraph, but I will make my point briefly in view of the desire to make progress, and then I shall be grateful to hear the President's reasons justifying it.

The purpose of the paragraph is to allow parties to argue that a restriction should be allowed because it is … reasonably required for purposes connected with the maintenance of any other restriction.… Presumably this refers to restrictions that cannot be justified on any other ground. In spite of all the other exemptions that we have allowed, we are now asked to approve this additional provision. As we have agreed to such a wide range of grounds upon which restrictions may be justified, I question whether it is necessary to have another exemption.

Mr. P. Thorneycroft

I am much obliged to the hon. Gentleman the Member for Huddersfield, West (Mr. Wade) for putting down the Amendment and moving it in so brief and clear a speech. The purpose of this paragraph is really quite limited. It is to apply where the Court has found, perhaps after prolonged examination, that some major restrictive arrangement is in the public interest under one of these heads we have been discussing. It nearly always happens in these cases that associated with the major arrangement there is a number of little ones of minor importance. As an example, there may be a common price ring and, as very often happens, the common price ring is supported by aggregated rebates. Probably, the provision for aggregating rebates has no particular purpose save that it happens to be a method of fortifying the common price ring and is necessary to it.

When considering this matter, the majority of the Monopolies Commission in its Report took this as an illustration of one of the exceptions which ought to be allowed. I will not read the passage in full; it is paragraph 240 (c).

Rather than try to spell out all sorts of further detailed exceptions, I think we would be wise to say that where, and only where, a principal arrangement has been approved under one of these heads—and when I say "approved" I mean admitted for argument under the next head—the Court should also be allowed, as a matter of tidiness, to say that the aggregated rebates, perhaps even an agreement for price maintenance, or whatever it may be, that the Court thought was reasonable for its enforcement or maintenance should be allowed to go with it.

Mr. Mulley

Would the President tell us if this would apply to the imposition of stop lists? Would they come in under this paragraph?

Mr. Thorneycroft

If there were a restrictive agreement, it would be open to the Court to say, I think, that the stop list was reasonably necessary for it. May I just quote an example? Suppose a group of suppliers agree amongst themselves that they will supply only a limited group of people having special qualifications, and suppose that they manage to justify that agreement upon the basis that it is necessary, within the terms of paragraph (a), for the safety of the public, because they are selling something requiring special skills or whatever it may be. If that arrangement were approved and they established their case, their arrangements about stop lists would be subject for argument—which might not be accepted—as being reasonably necessary for the support of that arrangement. But they would have to show that the stop list was reasonably necessary.

Mr. Roy Jenkins

I am not entirely happy about this question. Might I refer to an example which we discussed a little earlier, the question of what I think is called the publishers' association net book agreement? What is important in the first place here is the principal agreement; one worries about that before worrying about the machinery of enforcement. Clearly, the net book agreement is an agreement of a much simpler nature than almost any other type of restrictive agreement one could envisage.

If one has a situation where an agreement of this sort is accepted, what we are being asked to do is to accept automatically every possible machinery of enforcement also which might be used, with the one exception of the collective boycott, which is clearly ruled out by Clause 19.

Mr. Mulley

The collective boycott is ruled out only in matters of resale price maintenance and can be used to enforce other agreements.

8.45 p.m.

Mr. Jenkins

That is quite right. All we are ruling out is a particular means of enforcing an agreement relating to resale price maintenance, although resale price maintenance is not only separated out, so the collective boycott may not be used to enforce it, but is also separated out in the sense in its individual form it is given special blessing, which no other form of restrictive agreement is given. I find it odd that in one Clause the President should go out of his way automatically to ban a particular and probably the most effective method of enforcement on a particular set of agreements, whereas in this part of the Bill he is asking us without examination to accept almost every other method of enforcement, provided that the arrangement itself is accepted. That is going much too far and much too quickly.

Sir L. Ungoed-Thomas

I am rather disturbed about this. I can understand the point which the President is making, that it may be necessary to have a method of enforcement in order to carry out some restriction which is, for instance, within paragraph (a). If that is so, I should have thought that the application, so far as it is necessary to carry out the purposes of paragraph (a), would be made for the restriction itself under paragraph (a), so that then the test would be whether a restriction was reasonably necessary for the protection of the public in connection with consumption, installation and so on.

I know that under paragraph (a) the restriction has to be reasonably necessary for the protection of the public. Here we have these extremely wide words that the restriction is "reasonably required." I do not know why there is the change from "necessary" to "required". I suppose that it is a lower standard of requirement. If it is the same thing, perhaps the President will put "necessary" instead of "required," because "reasonably required" means that the applicant has to say that his reason is "reasonable" and that it is "reasonable" for him to ask for something. That is different from saying that it is "reasonably necessary" for purposes connected with the maintenance of any other restriction.

Why are those words inserted? They are not inserted to make the paragraph longer. They are inserted to bring in things which would otherwise not be brought in. Otherwise, things would be "reasonably necessary" for the maintenance of any other restriction. It is not limited to that and I should have thought all that was required in enforcing a restriction might have been properly covered—and it would be dangerous if more than that were covered—by making application under paragraph (g) where the application for exemption is made for the restriction in aid of which paragraph (g) is conceived.

Mr. P. Thorneycroft

The position is plain, and I have the full support of the Majority Report of the Monopolies Commission, which we all call in aid whenever it is on our side. The matter is clear beyond a peradventure. One has a restriction which one says is "reasonably necessary" to prevent large scale and persistent unemployment and which we have just approved. It is very difficult to say that an aggregate rebate is necessary to prevent persistent and large scale unemployment, but it may be a necessary part of other arrangements which have been successfully pleaded on this matter, and it is very necessary to have some Clause linking the two. That is what the Monopolies Commission proposes and I hope that the Committee will accept it.

Mr. E. Fletcher

I am not at all happy about this matter. I do not think the President of the Board of Trade can shield himself behind the Monopolies Commission's Report. I have just been re-reading what it said, and it does not say anything like what the right hon. Gentleman has suggested. If he is really relying upon it he ought to study it a little more closely.

Paragraph 240 (c) of the Report is concerned in the main with matters of collective enforcement, and the Commission comes to the conclusion that all matters of common enforcement and restrictive practice should be banned. It says, however, that there are cases in which particular restrictions should be permitted. It is because of that that we have these subsections in the Clause which the Committee has already approved.

This is a sort of general sweeping-up Clause. I grant that it is based upon paragraph 240 (c) but it seems to go much further. I was disturbed at what the President of the Board of Trade said just now about collective rebates. He also suggested that stock lists might be justified under the Clause. Paragraph 240 (c) says that there may be agreements to charge common prices, and that such agreements are often associated with, or supported by, arrangements for collectively agreed price discrimination, aggregated rebates and the maintenance of common resale prices Then they say: There might be particular cases in which a common price agreement was found after inquiry to operate in the public interest, and where the effective operation of that agreement might"— these are the operative words— depend upon the use of incidental practices of these types. What does the Clause seek to do? I hope that we may have the assistance of the Attorney-General on this matter because there is a vital difference between what is suggested in the Monopolies Commission's Report and a restriction which is "reasonably required for the purpose". It is the word "reasonably" which is troubling us.

If the right hon. Gentleman wants to follow the recommendations of the Monopolies Commission he should make it clear that the restriction is not reasonably required but is necessary and essential. Only on that basis could it be required. Otherwise, where do we get to? We have an agreement which has this restrictive practice attached to it, and the argument is whether the practice is reasonably required. It would be much easier for the trade to say, "It is much easier for us to enforce that particular agreement if it has stock lists, secret courts and the other paraphernalia of that kind."

If the person concerned were driven to saying that the agreement was dependent for its enforcement upon collective enforcement, which is so objectionable, he would find at the outset that it would be far more difficult to persuade the Court, on the reverse side of the argument, that the agreement could operate in the public interest. For these reasons I hope that the hon. Member for Huddersfield, West (Mr. Wade) who moved the Amendment, will press it.

Mrs. Castle

The President is rather cool to plead in aid at this time of night the Report of the Monopolies Commission. Earlier, when some of us were trying to discover where he got paragraph (b) from, he told us that we must not fall back upon the Monopolies Commission Report but must think of our arguments for ourselves. When some of us expressed anxiety about paragraph (b), which seemed to us an enormous loophole, he said that it was absolutely imperative to have a Clause which would enable public advantage to be pleaded. Many hon. Members had quoted in aid the net book agreement. At that point the President insisted that it was important that we should separate completely—

The Deputy-Chairman (Sir Rhys Hopkin Morris)

The hon. Lady now seems to be dealing with something which we have already dealt with and not with paragraph (g).

Mrs. Castle

I do not know why it is, Sir Rhys, but you seem to have a propensity for interrupting me in the middle of a sentence—before I can conclude it and show that I am in fact dealing with the Amendment, and using an earlier discussion merely as an illustration. I was going on to say that earlier on the President had said that it was important to discuss the nature of an agreement quite separately from the methods of enforcement. Now that we have reached a later paragraph of the same Clause he says that if an agreement per se is acceptable, all the methods of enforcement automatically fall to be approved.

I am pointing out that he has now completely joined up our discussion of pararaph (b) with our present discussion, because he is now saying that if any agreement falls to be acceptable by the nature of that agreement rather than by the nature of the methods of its enforcement, those methods of enforcement automatically also become acceptable—and his own sharp distinction, drawn earlier, is surrendered. His explanation is therefore entirely unsatisfactory. All he has said is that he falls back upon the Monopolies Commission Report—an argument which he himself considered unsatisfactory earlier on.

Mr. Pitman

I rise with the intention of giving a helpful explanation of what I imagine to be the sort of instance in point. I am thinking of a product which can be sold only to qualified chemists, and only to those qualified chemists with good refrigerators. In that case the possession of a good refrigerator would be a condition of sale. It might be that there were a number of independent chemists' undertakings, all under the same management and having a central buying department but, in point of fact, being different legal entities. It might be a really necessary part of the denial of supplies to shop A to deny supplies also to shops B and C, who were the central controlling powers for all the shops. That would be a matter connected with the maintenance of any other restriction because the other restriction would not otherwise be effective.

Mr. Mulley

I appreciate the point which the hon. Member for Bath (Mr. Pitman) has just made, but if that really is the purpose of the paragraph why does it not say so? We should have far less objection to the paragraph if it were in the form suggested by the hon. Member, namely that it was really necessary for the operation of the restriction concerned. "Reasonably required" is a weaker form of words than is contained in any other paragraph in the Clause.

I think that I am speaking for all my hon. Friends when I say how much I welcome the sight of the Attorney-General taking part in the proceedings. I do not know whether his presence is an indication that the Government feel that they are in a difficulty or whether it would be safer to predict that they will soon be in a difficulty as a result of his assistance. Perhaps he will explain to the Committee the difference between "reasonably necessary" and "reasonably required", because there must be some significance in the change of wording, otherwise I cannot see why the draftsmen would have altered it.

9.0 p.m.

If this paragraph is to remain in the Bill, I suggest that it needs to be drafted on much tighter lines. After hearing my hon. Friends, I have considerable doubt about the merits of the paragraph in the Clause. The President was rather offhand in saying that if we had a few trimmings, by way of aggregated rebates and perhaps a collective boycott or two, that did not matter if the root restrictive practice was approved by the Court. I do not think that we are bound to agree to the trimmings just because we accept the main restrictive practice.

I thought that the President and the Bill were against restrictive practices per se, and that the whole question of proving that they were necessary and in the public interest had to be gone through before they were allowed to

remain. The point of this paragraph, if it means anything at all, is in connection with the reinforcement provisions. It really is not necessary, just because there is a restrictive agreement on common prices approved by the Court, to have an aggregated rebate system as well.

The President would have been far better advised to give people the power to go to the public courts to have their agreements enforced rather than to allow them the paraphernalia of stop lists, secret courts and the like. I know that that is a controversial view, but certainly if they have no other redress and if this provision is in the Bill it will provide a loophole through which a great many of the particularly obnoxious practices which we are all against will be allowed to continue, and I ask the President to give a little more consideration to this matter before we go any further.

Mr. Wade

I listened very carefully to what the Minister had to say. I find from time to time that I have to remind myself that I must not rely entirely on the good intentions of the Minister in considering wording that has to be interpreted by the Court. In my opinion this provision may be interpreted in too wide a way. For that reason I think that the paragraph would be rather dangerous, and I do not think that I can conscientiously ask leave to withdraw the Amendment.

Question put, That "or" stand part of the Clause:—

The Committee divided: Ayes 192, Noes 143.

Division No. 168.]	AYES	[6.30 p.m.
Agnew, Cmdr. P. G.	Fletcher-Cooke, C.	Jones, Rt. Hon. Aubrey(Hall Green)
Aitken, W. T.	Fort, R.	Joseph, Sir Keith
Arbuthnot, John	Fraser, Hon. Hugh (Stone)	Joynson-Hicks, Hon, Sir Lancelot
Armstrong, C. W.	Freeth, D. K.	Keegan, D.
Ashton, H.	Galbraith, Hon. T. G. D.	Kerr, H. W.
Baldock, Lt.-Cmdr. J. M.	George, J. C. (Pollok)	Kershaw, J. A.
Baldwin, A. E.	Gibson-Watt, D.	Kimball, M.
Barlow, Sir John	Glover, D.	Kirk, P. M.
Barter, John	Godber, J, B.	Lagden, G. W.
Baxter, Sir Beverley	Gomme-Duncan, Col. Sir Alan	Lambert, Hon. G.
Beamish, Maj. Tufton	Gower, H. R.	Leavey, J. A.
Bell, Philip (Bolton, E.)	Graham, Sir Fergus	Leburn, W. G.
Bell, Ronald (Bucks, S.)	Green, A.	Legge-Bourke, Maj. E. A. H.
Biggs-Davison, J. A.	Gresham Cooke, R.	Legh, Hon. Peter (Petersfield)
Bishop, F. P.	Grimond, J.	Lindsay, Hon. James (Devon, N.)
Black, C. W.	Grimston, Hon. John (St. Albans)	Linstead, Sir H. N.
Body, R. F.	Grosvenor, Lt.-Col. R. G.	Lloyd, Maj. Sir Guy (Renfrew, E.)
Bossom, Sir A. G.	Gurden, Harold	Low, Rt. Hon. A. R. W.
Bowen, E. R. (Cardigan)	Hall, John (Wycombe)	Lucas, Sir Jocelyn (Portsmouh, S.)
Boyle, Sir Edward	Harris, Frederic (Croydon, N.W.)	Lucas, P. B. (Brentford & Chiswick)
Braithwaite, Sir Albert (Harrow, W.)	Harris, Reader (Heston)	McAdden, S. J.
Brooman-White, R. C.	Harrison, A. B. C. (Maldon)	Macdonald, Sir Peter
Browne, J. Nixon (Craigton)	Harrison, Col. J. H. (Eye)	Mackie, J. H. (Galloway)
Buchan-Hepburn, Rt. Hon. P. G. T.	Harvey, Air Cdre. A. V. (Macclesfd)	McLaughlin, Mrs. P.
Burden, F. F. A.	Harvey, John (Walthamstow, E.)	Maclay, Rt. Hon. John
Butler, Rt. Hn. R.A.(Saffron Walden)	Hay, John	Maclean, Fitzroy (Lancaster)
Campbell, Sir David	Heald, Rt. Hon. Sir Lionel	Macpherson, Niall (Dumfries)
Carr, Robert	Heath, Rt. Hon. E. R. C.	Maddan, Martin
Channon, H.	Hicks-Beach, Maj. W. W.	Maitland, Cdr. J. F. W.(Horncastle)
Chichester-Clark, R.	Hill, Rt. Hon. Charles (Luton)	Maitland, Hon. Patrick (Lanark)
Clarke, Brig. Terence (Portsmth, W.)	Hill, Mrs. E. (Wythenshawe)	Manningham-Buller, Rt. Hn. Sir R.
Cooper, Sqn. Ldr. Albert	Hill, John (S. Norfolk)	Markham, Major Sir Frank
Cordeaux, Lt.-Col. J. K.	Hinchingbrooke, Viscount	Marlowe, A. A. H.
Corfield, Capt. F. V.	Hirst, Geoffrey	Marples, A. E.
Craddock, Beresford (Spelthorne)	Holland-Martin, C. J.	Mathew, R.
Crosthwaite-Eyre, Col. O. E.	Holt, A. F.	Maude, Angus
Crouch, R. F.	Hope, Lord John	Mawby, R. L.
Crowder, Sir John (Finchley)	Hornsby-Smith, Miss M. P.	Maydon, Lt.-Comdr. S. L. C.
Cunningham, Knox	Horobin, Sir Ian	Milligan. Rt. Hon. W. R.
Currie, G. B. H.	Horsbrugh, Rt. Hon. Dame Florence	Molson, A. H. E.
Dance, J. C. G.	Howard, Hon. Greville (St, Ives)	Moore, Sir Thomas
Deedes, W. F.	Howard, John (Test)	Morrison, John (Salisbury)
Doughty, C. J. A.	Hughes Hallett, Vice-Admiral J.	Nairn, D. L, S.
Drayson, G. B.	Hughes-Young, M. H. C.	Heave, Airey
du Cann, E. D. L.	Hulbert, Sir Norman	Nicholson, Godfrey (Farnham)
Duncan, Capt. J. A. L.	Hutchison, Sir Ian Clark (E'b'gh.W.)	Nicolson, N. (B'n'm'th, E. & Chr'ch)
Duthie, W. S.	Hutchison, Sir James (Scotstoun)	Nield, Basil (Chester)
Eden, Rt. Hn. Sir A. (Warwick & L'm'tn)	Hyde, Montgomery	Noble, Comdr. A. H. P.
Elliot, Rt. Hon. W. E.	Hylton-Foster, Sir H. B. H.	Nugent, G. R. H.
Emmet, Hon. Mrs. Evelyn	Iremonger, T. L.	Oakshott, H. D.
Errington, Sir Eric	Irvine, Bryant Godman (Rye)	Ormsby-Gore, Hon. W. D.
Fell, A.	Jenkins, Robert (Dulwich)	Orr, Capt. L. P. S.
Finlay, Graeme	Johnson, Dr. Donald (Carlisle)	Orr-Ewing, Charles Ian (Hendon, N.)
Fisher, Nigel	Johnson, Eric (Blackley)	Page, R. G.
Pannell, N. A. (Kirkdale)	Roper, Sir Harold	Turner, H. F. L.
Partridge, E.	Ropner, Col. Sir Leonard	Vane, W. M. F.
Pickthorn, K. W. M.	Russell, R. S.	Vaughan-Morgan, J. K.
Pilkington, Capt. R. A.	Schofield, Lt.-Col. W.	Vickers, Miss J. H.
Pitman, I. J.	Sharpies, R. C.	Vosper, D. F.
Pitt, Miss E. M.	Shepherd, William	Wade, D. W.
Pott, H. P.	Simon, J. E. S. (Middlesbrough, W.)	Wakefield, Edward (Derbyshire, W.)
Powell, J. Enoch	Smithers, Peter (Winchester)	Walker-Smith, D. C.
Prior-Palmer, Brig. O. L.	Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)	Wall, Major Patrick
Profumo, J. D.	Stevens, Geoffrey	Ward, Hon. George (Worcester)
Raikes, Sir Victor	Steward, Harold (Stockport, S.)	Ward, Dame Irene (Tynemouth)
Rawlinson, Peter	Stoddart-Scott, Col. M.	Waterhouse, Capt. Rt. Hon. C.
Redmayne, M.	Studholme, H. G.	Watkinson, Rt. Hon. Harold
Rees-Davies, W. R.	Summers, G. S. (Aylesbury)	Whitelaw, W.S.I.(Penrith & Border)
Remnant, Hon. P.	Sumner, W. D. M. (Orpington)	Williams, Paul (Sunderland, S.)
Renton, D. L. M.	Taylor, Sir Charles (Eastbourne)	Wills, G. (Bridgwater)
Ridsdale, J. E.	Teeling, W.	Wilson, Geoffrey (Truro)
Rippon, A. G. F.	Thomas, Leslie (Canterbury)	Woollam, John Victor
Roberts, Sir Peter (Heeley)	Thompson, Kenneth (Walton)	Yates, William (The Wrekin)
Robertson, Sir David	Thompson, Lt.-Cdr. R. (Croydon, S.)
Robinson, Sir Roland (Blackpool, S.)	Thorneycroft, Rt. Hon. P.	TELLERS FOR THE AYES:
Rodgers, John (Sevenoaks)	Touche, Sir Gordon	Mr. Barber and Mr. Bryan.
NOES
Ainsley, J. W.	Griffiths, Rt. Hon. James (Llanelly)	Pargiter, G. A.
Albu, A. H.	Griffiths, William (Exchange)	Parker, J.
Allen, Arthur (Bosworth)	Hale, Leslie	Paton, J.
Allen, Scholefield (Crewe)	Hall, Rt. Hn. Glenvil (Colne Valley)	Peart, T. F.
Bacon, Miss Alice	Hamilton, W. W.	Plummer, Sir Leslie
Bellenger, Rt. Hon. F. J.	Hannan, W.	Popplewell, E.
Benn, Hn. Wedgwood (Bristol, S.E.)	Hastings, S.	Price, Philips (Gloucestershire, W.)
Benson, G.	Hayman, F. H.	Probert, A. R.
Beswick, F.	Henderson, Rt. Hn. A. (Rwly Regis)	Proctor, W. T.
Blackburn, F.	Herbison, Miss M.	Pryde, D. J.
Blyton, W. R.	Hobson, C. R.	Rankin, John
Bottomley, Rt. Hon. A. G.	Holmes, Horace	Redhead, E. C.
Bowden, H. W. (Leicester, S.W.)	Houghton, Douglas	Reeves, J.
Bowles, F. G.	Hubbard, T. F.	Reid, William
Braddock, Mrs. Elizabeth	Hughes, Emrys (S. Ayrshire)	Robens, Rt. Hon, A.
Brookway, A. F.	Hughes, Hector (Aberdeen, N.)	Robinson, Kenneth (St. Pancras, N.)
Broughton, Dr. A. D. D.	Hunter, A. E.	Rogers, George (Kensington, N.)
Brown, Rt. Hon. George (Belper)	Irvine, A. J. (Edge Hill)	Ross, William
Burden, F. F. A.	Irving, S. (Dartford)	Royle, C.
Burke, W. A.	Isaacs, Rt. Hon. G. A.	Shurmer, P. L. E.
Burton, Miss F. E.	Jay, Rt. Hon. D. P. T.	Silverman, Julius (Aston)
Butler, Herbert (Hackney, C.)	Jeger, George (Goole)	Simmons, C. J. (Brierley Hill)
Butler, Mrs. Joyce (Wood Green)	Jeger, Mrs. Lena (Holbn & St. Pncs, S.)	Skeffington, A. M.
Callaghan L. J.	Jenkins, Roy (Stechford)	Slater, J. (Sedgefield)
Castle, Mrs. B. A.	Johnson, James (Rugby)	Snow, J. W.
Champion, A, J.	Jones, David (The Hartlepools)	Sorensen, R. W.
Chetwynd, G. R.	Jones, Jack (Rotherham)	Sparks, J. A.
Clunie, J.	Kenyon, C.	Steele, T.
Collick, P. H. (Birkenhead)	Key, Rt. Hon. C. W.	Stokes, Rt. Hon. R. R. (Ipswich)
Collins, V. J. (Shoreditch & Finsbury)	King, Dr. H. M.	Strauss, Rt. Hon. George (Vauxhall)
Corbet, Mrs. Freda	Lawson, G. M.	Stross, Dr. Barnett(Stoke-on-Trent, C.)
Craddock, George (Bradford, S.)	Lee, Miss Jennie (Cannock)	Summerskill, Rt. Hon, E.
Cronin, J. D.	Lindgren, G. S.	Swingler, S. T.
Daines, P.	Mabon, Dr. J. Dickson	Sylvester, G. O.
Darling, George (Hillsborough)	MacColl, J. E.	Taylor, John (West Lothian)
Davies, Harold (Leek)	McGovern, J.	Tomney, F.
Davies, Stephen (Merthyr)	McInnes, J.	Turner-Samuels, M.
de Freitas, Geoffrey	McKay, John (Wallsend)	Ungoed-Thomas, Sir Lynn
Delargy, H. J.	McLeavy, Frank	Viant, S. P.
Dodds, N. N.	MacPherson, Malcolm (Stirling)	Warbey, W. N.
Donnelly, D. L.	Mahon, Simon	Weitzman, D.
Dugdale, Rt. Hn. John (W. Brmwch)	Mallalieu, E. L. (Brigg)
Ede, Rt. Hon. J. C.	Marquand, Rt. Hon. H. A.	Wells, Percy (Faversham)
Edwards, Rt. Hon. John (Brighouse)	Mellish, R. J.	Wells, William (Walsall, N.)
Edwards, Robert (Bilston)	Messer, Sir F.	Wheeldon, W. E.
Edwards, W. J. (Stepney)	Mikardo, Ian	White, Mrs. Eirene (E. Flint)
Evans, Albert (Islington, S.W.)	Mitchison, G. R.	White, Henry (Derbyshire, N.E.)
Evans, Edward (Lowestoft)	Monslow, W.	Willey, Frederick
Evans, Stanley (Wednesbury)	Moody, A. S.	Williams, W. R. (Openshaw)
Fernyhough, E.	Morrison, Rt. Hn. Herbert (Lewis'm, S.)	Williams, W. T. (Barons Court)
Fletcher, Erie	Mulley, F. W.	Willis, Eustace (Edinburgh, E.)
Forman, J. C.	Neal, Harold (Bolsover)	Wilson, Rt. Hon. Harold (Huyton)
Fraser, Thomas (Hamilton)	Noel-Baker, Francis (Swindon)	Winterbottom, Richard
Gaitskell, Rt. Hon. H. T. N.	Oliver, G. H.	Woof, R. E.
Gibson, C. W.	Oram, A. E.	Yates, V. (Ladywood)
Gordon Walker, Rt. Hon. P. C.	Oswald, T.	Younger, Rt. Hon. K.
Greenwood, Anthony	Paget, R. T.
Grenfell, Rt. Hon. D. R.	Paling, Will T. (Dewsbury)	TELLERS FOR THE NOES:
Grey, C. F.	Palmer, A. M. F.	Mr. Short and Mr. Deer
align="center">Division No. 169.]	AYES	[9.2 p.m.
Agnew, Cmdr. P. G.	Clarke, Brig. Terence (Portsmth, W.)	Godber, J. B.
Aitken, W. T.	Cooper, Sqn. Ldr. Albert	Gomme-Duncan, Col. Sir Alan
Arbuthnot, John	Cordeaux, Lt.-Col. J. K.	Gower, H. R.
Armstrong, C. W.	Corfield, Capt. F. V.	Graham, Sir Fergus
Ashton, H.	Craddock, Beresford (Spelthorne)	Grant, W. (Woodside)
Baldock, Lt.-Cmdr. J. M.	Crouch, R. F.	Green, A.
Baldwin, A. E.	Crowder, Sir John (Finchley)	Gresham Cooke, R.
Barber, Anthony	Cunningham, Knox	Grimston, Hon. John (St. Albans)
Barlow, Sir John	Currie, G. B. H.	Grosvenor, Lt.-Col. R. G.
Barter, John	Dance, J. C. G.	Gurden, Harold
Baxter, Sir Beverley	Deedes, W. F.	Hall, John (Wycombe)
Bell, Philip (Bolton, E.)	Doughty, C. J. A.	Harris, Frederic (Croydon, N.W.)
Bell, Ronald (Bucks, S.)	Drayson, G. B.	Harris, Reader (Heston)
Biggs-Davison, J. A.	du Cann, E. D. L.	Harrison, Col. J. H. (Eye)
Bishop, F. P.	Duncan, Capt. J. A. L.	Harvey, Air Cdre. A. V. (Macclesfd)
Black, C. W.	Elliot, Rt. Hon. W. E.	Harvey, John (Walthamstow, E.)
Body, R. F.	Errington, Sir Eric	Hay, John
Bossom, Sir A. C.	Finlay, Graeme	Heald, Rt. Hon. Sir Lionel
Boyle, Sir Edward	Fisher, Nigel	Heath, Rt. Hon. E. R. G.
Brooman-White, R. C.	Fletcher-Cooke, C.	Hicks-Beach, Maj. W. W.
Buchan-Hepburn, Rt. Hon. P. G. T.	Fraser, Hon. Hugh (Stone)	Hill, Mrs. E. (Wythenshawe)
Butler, Rt. Hn. R.A.(Saffron Walden)	Freeth, D. K.	Hill, John (S. Norfolk)
Channon, H.	George, J. C. (Pollok)	Hinchingbrooke, Viscount
Chichester-Clark, R.	Gibson-Watt, D.	Hirst, Geoffrey
Holland-Martin, C. J.	Markham, Major Sir Frank	Robertson, Sir David
Hope, Lord John	Marlowe, A. A. H.	Robinson, Sir Roland (Blackpool, S.)
Hornsby-Smith, Miss M. P.	Marples, A. E.	Rodgers, John (Sevenoaks)
Horobin, Sir Ian	Marshall, Douglas	Roper, Sir Harold
Howard, Hon. Greville (St. Ives)	Mathew, R.	Ropner, Col. Sir Leonard
Howard, John (Test)	Maude, Angus	Schofield, Lt.-Col. W.
Hughes Hallett, Vice-Admiral J.	Mawby, R. L.	Sharpies, R. C.
Hughes-Young, M. H. C.	Maydon, Lt.-Comdr. S. L. C.	Shepherd, William
Hutchison, Sir Ian Clark (E'b'gh, W.)	Milligan, Rt. Hon. W. R.	Simon, J. E. S. (Middlesbrough, W.)
Hutchison, Sir James (Scotstoun)	Molson, A. H. E.	Smithers, Peter (Winchester)
Hyde, Montgomery	Moore, Sir Thomas	Stevens, Geoffrey
Hylton-Foster, Sir H. B. H.	Morrison, John (Salisbury)	Steward, Harold (Stockport, S.)
Irvine, Bryant Godman (Rye)	Nairn, D. L. S.	Stoddart-Scott, Col. M.
Jenkins, Robert (Dulwich)	Neave, Airey	Studholme, H. G.
Johnson, Dr. Donald (Carlisle)	Nicholson, Godfrey (Farnham)	Summers, G. S. (Aylesbury)
Johnson, Eric (Blackley)	Nicolson, N. (B'n'm'th E. & Chr'ch)	Sumner, W. D. M. (Orpington)
Joseph, Sir Keith	Nield, Basil (Chester)	Taylor, Sir Charles (Eastbourne)
Joynson-Hicks, Hon. Sir Lancelot	Noble, Comdr. A. H. P.	Teeling, W.
Keegan, D.	Nugent, G. R. H.	Thomas, Leslie (Canterbury)
Kerr, H. W.	Oakshott, H. D.	Thompson, Kenneth (Walton)
Kershaw, J. A.	Ormsby-Gore, Hon. W. D.	Thompson, Lt.-Cdr. R. (Croydon, S.)
Kimball, M.	Orr, Capt. L. P. S.	Thorneycroft, Rt. Hon. P.
Kirk, P. M.	Orr-Ewing, Charles Ian (Hendon, N.)	Touche, Sir Gordon
Lagden, G. W.	Orr-Ewing, Sir Ian (Weston-S-Mare)	Turner, H. F. L.
Leavey, J. A.	Page, R. G.	Vane, W. M. F.
Leburn, W. G.	Pannell, N. A. (Kirkdale)	Vaughan-Morgan, J. K.
Legge-Bourke, Maj. E. A. H.	Partridge, E.	Vickers, Miss J. H.
Legh, Hon. Peter (Petersfield)	Pickthorn, K. W. M.	Vosper, D. F.
Lindsay, Hon. James (Devon, N.)	Pilkington, Capt. R. A.	Walker-Smith, D. C.
Linstead, Sir H. N.	Pitman, I. J.	Wall, Major Patrick
Lloyd, Maj. Sir Guy (Renfrew, E.)	Pitt, Miss E. M.	Ward, Hon. George (Worcester)
McAdden, S. J.	Pott, H. P.	Ward, Dame Irene (Tynemouth)
Macdonald, Sir Peter	Powell, J. Enoch	Waterhouse, Capt. Rt. Hon. C.
Mackie, J. H. (Galloway)	Profumo, J. D.	Whitelaw, W. S. I. (Penrith & Border)
McLaughlin, Mrs. P.	Raikes, Sir Victor	Williams, Paul (Sunderland, S.)
Maclay, Rt. Hon. John	Rawlinson, Peter	Wills, G. (Bridgwater)
Macpherson, Niall (Dumfries)	Redmayne, M.	Wilson, Geoffrey (Truro)
Maddan, Martin	Remnant, Hon. P.	Woollam, John Victor
Maitland, Cdr. J. F. W. (Horncastle)	Ridsdale, J. E.
Maitland, Hon. Patrick (Lanark)	Rippon, A. G. F.	TELLERS FOR THE AYES:
Manningham-Buller, Rt. Hn. Sir R.	Roberts, Sir Peter (Heeley)	Mr. E. Wakefield and Mr. Bryan
NOES
Ainsley, J. W.	Fernyhough, E.	McInnes, J.
Albu, A. H.	Fletcher, Eric	McKay, John (Wallsend)
Allen, Arthur (Bosworth)	Forman, J. C.	McLeavy, Frank
Allen, Scholefield (Crewe)	Gaitskell, Rt. Hon. H. T. N.	MacPherson, Malcolm (Stirling)
Benn, Hn. Wedgwood (Bristol, S.E.)	Gibson, C. W.	Mahon, Simon
Benson, G.	Gordon Walker, Rt. Hon. P. C.	Mallalieu, E. L. (Brigg)
Beswick, F.	Greenwood, Anthony	Mellish, R. J.
Blackburn, F.	Grenfell, Rt. Hon. D. R.	Mikardo, Ian
Blenkinsop, A.	Grey, C. F.	Mitchison, G. R.
Blyton, W. R.	Griffiths, William (Exchange)	Monslow, W.
Bowden, H. W. (Leicester, S.W.)	Grimond, J.	Moody, A. S.
Bowen, E. R. (Cardigan)	Hale, Leslie	Mulley, F. W.
Braddock, Mrs. Elizabeth	Hall, Rt. Hn. Glenvil (Colne Valley)	Noel-Baker, Francis (Swindon)
Brockway, A. F.	Hamilton, W. W.	Oliver, G. H.
Broughton, Dr. A. D. D.	Hannan, W.	Oram, A. E.
Burke, W. A.	Hastings, S.	Oswald, T.
Butler, Herbert (Hackney, C.)	Hayman, F. H.	Owen, W. J.
Butler, Mrs. Joyce (Wood Green)	Herbison, Miss M.	Paget, R. T.
Castle, Mrs. B. A.	Holt, A. F.	Paling, Will T. (Dewsbury)
Champion, A. J.	Houghton, Douglas	Palmer, A. M. F.
Clunie, J.	Hubbard, T. F.	Pargiter, G. A.
	Hughes, Emrys (S. Ayrshire)	Parker, J.
Collick, P. H. (Birkenhead)	Hughes, Hector (Aberdeen, N.)	Paton, J.
Collins, V. J. (Shoreditch & Finsbury)	Hunter, A. E.	Peart, T. F.
Corbet, Mrs. Freda	Irving, S. (Dartford)	Plummer, Sir Leslie
Craddock, George (Bradford, S.)	Isaacs, Rt. Hon. G. A.	Probert, A. R.
Cronin, J. D.	Jay, Rt. Hon. D. P. T.	Pryde, D.J.
Daines, P.	Jeger, George (Goole)	Redhead, E. C.
Darling, George (Hillsborough)	Jeger, Mrs. Lena (Holbn & St. Pncs. S.)	Roberts, Albert (Normanton)
Davies, Rt. Hon. Clement (Montgomery)	Jenkins, Roy (Stechford)	Rogers, George (Kensington, N.)
Davies, Stephen (Merthyr)	Johnson, James (Rugby)	Ross, William
Deer, G.	Jones, David (The Hartlepools)	Royle, C.
Delargy, H. J.	Jones, Elwyn (W. Ham, S.)	Shurmer, P. L. E.
Dodds, N. N.	Kenyon, C.	Silverman, Julius (Aston)
Donnelly, D. L.	Key, Rt. Hon. C. W.	Skeffington, A. M.
Dugdale, Rt. Hn. John (W. Brmwch)	King, Dr. H. M.	Slater, J. (Sedgefield)
Ede, Rt. Hon. J. C.	Lawson, G. M.	Sparks, J. A.
Edwards, Robert (Bilston)	Lee, Miss Jennie (Cannock)	Steele, T.
Evans, Albert (Islington, S.W.)	Lindgren, G. S.	Stokes, Rt. Hon. R. R. (Ipswich)
Evans, Edward (Lowestoft)	Mabon, Dr. J. Dickson	Stross, Dr. Barnett (Stoke-on-Trent, C.)
Evans, Stanley (Wednesbury)	MacColl, J E.	Summerskill, Rt. Hon. E.

Swingler, S. T.	Weitzman, D.	Williams, W. T. (Barons Court)
Sylvester, G. O.	Wells, Percy (Faversham)	Willis, Eustace (Edinburgh, E.)
Taylor, John (West Lothian)	Wells, William (Walsall, N.)	Woof, R. E.
Tomney, F.	Wheeldon, W. E.	Yates, V. (Ladywood)
Ungoed-Thomas, Sir Lynn	White, Mrs. Eirene (E. Flint)	Younger, Rt. Hon. K.
Viant, S. P.	White, Henry (Derbyshire, N.E.)
Wade, D. W.	Willey, Frederick	TELLERS FOR THE NOES:
Warbey, W. N.	Williams, W. R. (Openshaw)	Mr. Simmons and Mr. Short.

Amendment made: In page 14, line 26, at the end insert: (g) 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 substantial reduction in the volume of earnings of the export trade of the United Kingdom either generally or in respect of the said trade or industry; or.—[Mr. Nield.]

Sir P. Roberts

I beg to move, in page 14, line 34, at the end to insert: (h) that the removal of the restriction would be likely to have a serious and persistent adverse effect on the carrying out of technical education, research and development in the industry concerned. The Amendment deals with technical education, research and development. I do not think that there is any need at this time of night to stress to the Committee the need for these three sciences. I understand that the main principle of a research association would be covered by paragraph (b), but there is the case of the production association using the price level in order to finance its research and development and then exchanging the results of that research and development between its members.

It is on that point that I should like my right hon. Friend to advise us tonight, because the position would be that if the general association became illegal there would be a good deal of cut-throat competition and loss of faith and no exchange of information such as is going on at present. In some of the smaller industries, particularly, they are up against the competition, not only of America, but also of Russia, for the lead. I believe it is essential that this exchange of technical knowledge should go on in this country as far as possible, and that if we were to lose it we should, to a large extent, also lose the lead which we now have.

I should like my right hon. Friend to consider this point very carefully. An industry may have a research association that in itself is covered by paragraph (b)—I think that is correct—and a price-fixing arrangement to enable it to pass on the results of all its research and development which is essential to industry, but there may be one or two firms which will not do that. They may be prepared to cut, if they can, to make it uneconomic for such development to take place. We want to know whether restrictions allowing such development that would come under paragraph (b). I think that is the point which should be covered this evening.

9.15 p.m.

Mr. P. Thorneycroft

I am grateful to my hon. Friend the Member for Heeley (Sir P. Roberts) for moving this Amendment in order that I may make the position quite plain.

Under paragraph (b) a person concerned is entitled to prove 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 enjoyed or likely to be enjoyed by them as such, whether by virtue of the restriction itself or of any arrangements or operations resulting therefrom. I am not going to specify all the arguments that would be used because they would very infinitely between one industry and another, but certainly those arguments could be used about technical education, research and the like. Certainly they can use those arguments, but they would have to establish that the removal of the arrangement would mean that those things would be lost, or lost to a substantial degree. I do not say that in every case the Court would accept the fact that research would go on in an industry only so long as there was a price ring. The argument might be rejected in some cases. At the same time, there is nothing to prevent those arguments being put forward in the context of establishing specific and substantial advantages to the consumer.

Mr. Geoffrey Hirst (Shipley)

I am not quite happy with what the President of the Board of Trade has said, although I think he has tried to meet the point made by my hon. Friend the Member for Heeley (Sir P. Roberts). I speak on this matter with some experience, and I should like to give my right hon. Friend an instance of what happens.

For a great number of years I was connected with the heavy chemical industry. A particular section of that industry had a remarkably good arrangement. There were common prices, but, before any hon. Member opposite shouts me own, I wish to tell the Committee what the result was. All the individual firms in that association made a complete exchange of research work—the whole bag of tricks was exchanged—and the price was very much reduced. We did not require anything like the wholsale charges for research which individual firms would have had to pay if they carried out research separately.

I am not at all happy that the Clause would cover such a point. We require a little more assurance. It is all very well to say, "I think those things would come in; I can see no reason why they should not". That is the way in which we conduct affairs and often we are wise after the event. If possible, I want to be wise before the event and to ensure that systems which have been of enormous benefit to certain sections of the chemical industry should be retained. I think this addition would be a very wise one to make, and I hope my hon. Friend the Member for Heeley will press the Amendment. I am not satisfied with what the President has said, and, if the matter is taken to a Division, I shall vote in favour of the Amendment.

Mr. R. Gresham Cooke (Twickenham)

I think it very important that these firms and industries should have the opportunity of making their case under paragraph (b) of Clause 16. I understand that this question affects chiefly the heavy engineering and electrical industries. In those industries the amounts of money devoted to research are very large. I have been told that one machine required for testing purposes in the electrical industry cost £1 million.

It would be ridiculous if the products of those industries were sold at their barest cost, only covering the direct cost of production, without anything being left for research, technical education, or technical development. Some of these industries have been criticised severely for level tendering and level prices, but I believe there is a great deal of justification for what they have done in the past, as they have devoted money which has come from level tendering to provide vast sums for research. In one industry alone these sums have amounted to £10 million.

Therefore, I am pleased to hear the President say that this matter will be covered by paragraph (b). It would be disastrous if we were forced into the position that these heavy industries had to give up research because of cut-throat competition and to give up installing big machines, whether gas turbines or for electrical engineering or atomic energy.

It was said from the other side of the House at Question Time today that we are not spending as much money as we should on scientific and industrial research. It was suggested that we are spending only £35 million when we should be spending £50 million. Therefore I hope that the Court will be able to take into account a benefit that the public derives from the money spent in research, even if obtained from level prices and level tendering in some of the heavy industries.

Sir Hugh Linstead (Putney)

I wonder whether my right hon. Friend would look again at the wording of his original paragraph (b)? I gather that he does not disagree with the Amendment on its merits but is saying that everything for which it provides can be achieved under paragraph (b). Paragraph (b), however, seems singularly badly designed to deal with the advantages of education, research and development.

Paragraph (b) refers first to the advantages to "purchasers, consumers or users"—not to the public or to industry generally, but to individual people who purchase, consume or use. Then it uses the words "of any goods". The limitation to goods seems to me to cut out entirely services such as electricity or other forms of energy. Therefore, to rely solely upon paragraph (b) for education, research and development would impose a limitation to education, research and development connected with goods and not with a number of other industrial things or processes which should enjoy the benefits but which, I think, could not be brought in under paragraph (b) as it is drafted.

There is merit in this objection. Paragraph (b) should be looked at again and extended somewhat in the sense of the Amendment, and I hope that my right hon. Friend will be willing to look at it again.

Mr. Mulley

If hon. Members opposite press their threat to divide on the Amendment, I shall have great pleasure in going into the Division Lobby against the Amendment, for it seems to me unreasonable to create another loophole in the Bill. Hon. Members opposite adopt a rather different attitude when they come near to feeling the blast of competition in contrast to their traditional election cries about the virtues of competition. Their own arguments condemn the Amendment.

We have been told that we are backward in our provision for research. The reason for that is largely the price agreements and restrictive arrangements which have operated against industry for so long.

Mr. Hirst

The hon. Member cannot get away with that. Research has developed, and has been able all the more to develop, as a result of these trade associations which have encouraged progress.

Mr. Mulley

The hon. Member is speaking complete nonsense. The comparison that is made is with the U.S.A. Any American will say that the reason why America has made progress in research and development is because there is competition and the type of restrictive practices which the Amendment would perpetuate are not allowed.

The incentives to an individual firm which wants to do a job of research are discouraged because if its members belong to a price-fixing association they cannot lower their prices and secure the increased market that their new technical developments would make possible. I do not think anyone has given any evidence, and I do not think any evidence exists, to show that research has been done in a significant way by joint research associations. Most of the technical advances which have been made have been made as a result of research financed by Government money, or, alternatively, research done by individual firms. If anyone likes to give me a very good example of a substantial advance in technology as the result of a pooling arrangement depending on a fixed price agreement, I shall be very happy to give way to him. No one has been forthcoming with that information.

Mr. Hirst

If the hon. Member is going to attack me—not that I mind that a bit —he must listen to what I say. I gave him a case from the heavy chemical industry. It was in the case of sulphuric acid. [HON. MEMBERS: "Oh."] Have hon. Members opposite never heard of it?

Mr. Mulley

I do not accept that for a moment. There was no need to have a restrictive practices arrangement to obtain research. I think that a firm like I.C.I. has done much more for research on its own than has been done under any restrictive agreements.

Mr. E. Johnson

As the hon. Member says these arrangements have not worked I would quote to him an extract from an answer to a questionnaire by the Monopolies Commission to the British Steel Wire Industries Association. It refers to a scheme of common research in which all members of the British Steel Wire Industries Association are automatically entitled to share the benefits and most recently, a mutual aid scheme for subsidising imported raw material. A firm is not likely to subscribe to a common research arrangement with another with whom it is conducting a price war.

Mr. Mulley

The hon. Gentleman has given me no evidence that there was a substantial advance in technology. If he wants any evidence on this matter let him compare the efficiency and technological developments of this country with those of the United States, where there is no provision of the sort that hon. Gentlemen opposite seek to put into this Bill.

We have gone a long way already to meet them. Patents have been excluded, and the President has said that a reasonable case for a common research arrangement is already covered by paragraph (b). If the Amendment was accepted I suppose there would be people who would say that they would have to send their representatives on sandwich courses. A wider form of words could hardly be designed, and I would ask the President not to give way to the blandishments of his hon. Friends.

Mr. Hirst

I think we should have some further answer to the case made by my hon. Friend the Member for Heeley (Sir P. Roberts). My right hon. Friend may not like the way I put it, but that does not matter, but I think that the very reasonable case of my hon. Friend calls for further answer. I hope he will consider giving us an assurance that what we are aiming at is covered by paragraph (b). If my right hon. Friend can give that assurance that that is specifically covered, I shall be happy. Otherwise I shall not.

Mr. P. Thorneycroft

I do not think that there is any doubt about what the Clause does in the matter. We have had a long discussion on paragraph (b), and have gone into this matter in very great detail indeed. I listened with the greatest interest to my hon. Friend the Member for Heeley (Sir P. Roberts), who argued, as he was entitled to do, and argued very properly that research, technical education, the exchange of techniques, were of great benefit to the consumers of these goods. That is quite true, and there is substantial support for that. If my hon. Friend refers to Reports of the Monopolies Commission he will find that it laid special stress on the advantages of this kind of thing.

9.30 p.m.

Indeed, it was with the idea of permitting arguments upon research that we drafted paragraph (b) in the form it has been drafted, and there is not the slightest doubt that arguments of that kind can be admitted. I do not say that the Courts will accept the argument. It may say that the research can go on perfectly well without a price ring. Indeed, research does very frequently go on without a price ring in free enterprise, but there may be occasions when knowledge and technique are fostered by mutual restrictions. These are matters which can be properly argued in the courts.

Sir P. Roberts

My right hon. Friend has given me the assurance for which I asked. No one maintains that before there can be an advance in technology there must be a price ring. All we want is for it to be permissible to be argued before the Court whether or not there is a reasonable case for maintaining a restriction in certain circumstances. Before I ask leave to withdraw the Amendment, I would say to the hon. Member for Sheffield, Park (Mr. Mulley) that I do not know how he can suggest that we are backward in research. In some respects we lead the world. To hear the hon. Member denigrating some of the technicians in Sheffield was really a shock to me.

I beg to ask leave to withdraw the Amendment.

Hon. Members

No.

Mr. Mulley

My information was derived from the Government's own White Paper.

Hon. Members

No. Amendment negatived.

Mr. P. Thorneycroft

I beg to move, in page 14, line 35, after the first "and", to insert "is further satisfied".

I think it may be convenient if we discuss this Amendment with the Amendment in page 14, line 35, to leave out from "restriction" to "persons" in line 37 and insert: is not unreasonable having regard to the balance between those circumstances and any detriment to the public or to". and the Amendment in page 14, line 41, leave out from "goods" to end of line and add: resulting or likely to result from the operation of the restriction". I think it will be convenient also if I explain what the effects of these Amendments are. Their object is to make some clarification of what I might conveniently call the tailpiece of Clause 16. Up to now, we have been discussing the various paragraphs (a) to (g), and I might remind the Committee of the way in which we are dealing with this matter. The presumption is that the restriction is against the public interest and if anyone wishes to repudiate that presumption he has first of all to establish one, but not all, of the circumstances in paragraphs (a) to (g).

Then he must go on to establish something else and I think that it would be convenient if I read out the tailpiece incorporating the Amendments but, to make it simpler, omitting the definition of the public as being consumers and users and so forth, which is not directly relevant to the point which I am making. The tailpiece would then read as follows: … and is further satisfied (in any such case) that the restriction is not unreasonable having regard to the balance between those circumstances"— that is the (a) to (g) circumstances— and any detriment to the public or to persons not parties to the agreement resulting or likely to result from the operation of the restriction. That is how it will read. I hope that it is convenient to the Committee that I have read it out like that, because it is not always easy to recognise from Amendments what the final result will be.

I will put quite shortly the principles which I have in mind here. The first principle, which I think is shared by the Committee, is that, throughout, the onus should be on the industry, on the people who practice particular arrangements, to show that they are not contrary to the public interest. They must do that because they alone know what it is they want to do and why it is they want to do it. We discussed that on Second Reading, and that is a basic presumption the whole way through the Clause.

This is a difficult realm in which complete solutions are not always possible, and the second one is a little more difficult. We are anxious not to throw the issue of the public interest wide open; that is to say, so far as possible we should circumscribe the task which the Court, or whoever is to judge this matter, has to perform. But we should not ask the Court vaguely, "Is it, or is it not against the public interest?" and permit in every case all the range of arguments which go on as to whether price rings are good or not. Once we started arguing as widely as that, there would be no end to the deliberations of the Court in those circumstances.

So what we do is to ask, first, that the parties should establish one of the paragraphs (a) to (g). Secondly, they should show that it is not unreasonable, having regard to the balance between those circumstances and any detriment to the public … I think it is necessary to put those words in because there has been much misunderstanding about this point. It has been felt that if we go through paragraphs (a) to (g) so to speak, the whole operation has to start afresh.

That is not so. Clearly, when one comes to think of the way these proceedings would take place, it must not be so. They all take place in front of the same Court and in the same proceedings. The party to the restrictive arrangement will have shown that it was reasonably necessary for the safety of the public or that its removal would have caused specific and substantial damage. When the Court comes to the end of Clause 16 it is right, and should be demonstrably clear in this Clause, that the circumstances which they have considered in paragraphs (a) to (g) should be weighing with them.

"Weighing" is the right word because this is a question of balance which, I admit frankly, is not easy. But, however difficult the task may be, it is right that I should set out what we want to happen here. Therefore, the Court must weigh the various advantages or benefits or avoidance of evils that have been shown in paragraphs (a) to (g) and then weigh them against any detriment to the public. It is not exactly a measuring operation. It is not enough to show that they could not avoid the damage to the public because of the necessity to do the specific thing. That is not enough. They must weigh the balance of advantage, which they have already shown, against any detriment to the public which may flow.

We all admit that in the vast majority of these cases there must inevitably be some detriment to the public. I hesitate to give long examples but I will give one example of the kind of questions which will arise. Supposing it was shown that a series of arrangements, with stop lists and the rest, were proved to be reasonably necessary under paragraphs (a) to (g). On the tailpiece I think it would certainly be right to show that they did not operate to an unreasonable extent to the detriment of the public. The court might well ask, "What arrangements are there for anyone to come in on this list?" This question would be properly asked and properly debated and no doubt hon. Members can think of many others.

I do not think there is any great alteration—that certainly is not our intention—in the tailpiece as drafted, but what it makes plain is, first, that the onus remains fairly and squarely on the shoulders of the persons practising the restrictions, and, second, that when they have gone through paragraphs (a-g) they do not suddenly lose the benefit of any arguments that they have adduced but can ask that they be weighed and balanced against any detriment which has been caused to the public.

Mr. E. Fletcher

The Committee will give the President credit for having stated his intentions about the Amendments with complete candour. Where we differ from him is on his claim that the Amendments make no real change in the Bill as drafted. My opinion is that they make a very radical change going to the root of the Clause, if not to the root of the Bill.

I do not think the President would deny that since the Bill was published a great deal of attention has been directed by trade and industry generally, including chambers of commerce, to this Clause, the tailpiece, as the President describes it, which we are now considering. Representations were made that the tailpiece imposed onerous conditions on industry. I thought it did, and I thought it was intended to do so. I object to the Amendments because I believe that the President is making a totally unnecessary concession to industry as the result of representations made since the Second Reading, and this will mean changing the whole character of the Bill.

Those who have had occasion to study the Clause since the Bill was presented have focussed their attention on this very point. They pointed out that for a trader to escape under the Clause it was not merely necessary first of all for him to bring himself within one of the provisions in paragraphs (a-g) but, after that, he had to go further and discharge the onus of showing that, notwithstanding that he came within the provisions of paragraphs (a-g), his restrictive agreements were still not detrimental to the public.

I thought that was the whole purpose of the Clause as originally drafted. I thought that was implicit in the professions which the President has hitherto made about wanting to be serious about this matter. I thought that was his intention. In other words, I have understood that the sting was in the tailpiece, and that it was meant to be effective. The President is now taking the sting out of the tail and rendering it almost nugatory, because he is now taking away from the industry concerned the obligation of discharging the onus of showing—

Mr. P. Thorneycroft

No.

Mr. Fletcher

Yes, it is. He is taking away from the industry concerned the obligation of showing that the restrictive agreements are not detrimental to the public.

Mr. Thorneycroft

indicated dissent.

Mr. Fletcher

We must pursue this. I have here a circular which is typical of many others, and I have no doubt the President has seen it. It contains an interpretation from the London Chamber of Commerce which raises this very point. It states that what I have said was the result of the Clause as originally drafted. I think that was the intention. Otherwise the public interest would be defeated. The circular urges hon. Members opposite to support an Amendment earlier on the Order Paper in the name of the right hon. and learned Member for Chertsey (Sir L. Heald), which for some curious reason has not been moved. I suspect that the reason why the Amendment has not been moved is that after it appeared on the Order Paper the President—

Sir L. Heald

On a point of order, Sir Rhys. The Amendment referred to by the hon. Member for Islington, East (Mr. E. Fletcher) was not called. There never was an opportunity to move it.

The Deputy-Chairman

The Amendment in the name of the right hon. and learned Member for Chertsey (Sir L. Heald) cannot be discussed.

Mr. Fletcher

Obviously, a fortiori, if it was not called it was not moved.

Mr. Godfrey Nicholson (Farnham)

It was not selected.

9.45 p.m.

Mr. Fletcher

Neither selected nor called nor moved. I said it was not moved.

The Deputy-Chairman

It not having been selected, of course, it cannot be discussed.

Mr. Fletcher

I hope I am not being disrespectful, Sir Rhys, either to you or to anyone else. I am not complaining that it was not called or moved. I merely remarked that there was an Amendment on the Notice Paper, which was not for some reason being discussed—perhaps for very good reasons. The reason why we are not discussing it is because of the fact—

The Deputy-Chairman

Order. There must be no further discussion on it.

Mr. Fletcher

I do not want to make a point about it. The only relevance of it is that after that Amendment appeared on the Notice Paper, during the last day or two, the President has put down his own Amendment, the one we are now discussing, which has given rise to this debate and also to some concern in other quarters. If I may say so, it is not of the greatest significance; I only mentioned that other Amendment on the Notice Paper in order to show how this matter has developed during the last two or three days.

What I am arguing is that, so far from it being the case, as the President contended, that there was not very much substance in this Amendment, in our view it makes a very great deal of difference to the construction of this Clause and to the task with which the Court will be confronted.

In support of that argument, perhaps I might quote what The Times said in a leading article on this particular subject yesterday. Under the heading, "How Strait are the Gates to Be?", this is what was said: A Government Amendment to Clause 16"— which is the one we are now considering— throws into still clearer relief a problem which has beset this legislation from the beginning. A little later it says: The Amendment is officially regarded as neither strengthening nor weakening the Bill.

Hon. Members

Read on.

Mr. Fletcher

I am intending to read the whole thing, because this is very important. I shall read on, but I propose to take it in my own way, and comment upon it as I go. Obviously, this is a matter of great interest; so let us proceed. The article continues: It is strengthening in that it makes clear that the Court is not to take account of any advantages claimed for the agreement except the particular advantages specified in the seven grounds for exemption. Let us pause there, and see if that is right. The President was careful to read out the effect of this tailpiece as amended. The new relevant wording which he has introduced by this Amendment requires that the Court has now to decide between the detriment to the public and "those circumstances". There is no definition of "circumstances".

Mr. P. Thorneycroft

It is all in the Clause.

Mr. Fletcher

I accept that.

The assumption behind the President's speech so far was that the industry might be able to bring this only within one or other of the paragraphs (a) to (g). There is no need to make that assumption. It is as at least likely, if not probable, that any industry coming before the Court will claim the benefit of perhaps three or four out of the seven paragraphs. A trader may have to prove only one to succeed, but may well say that he is entitled to benefit from them all and, if he has any sense, he will do so. Having done so, the Court does not produce a verdict and say that it comes within one or the other and, if so, which one.

The trader will say, "All these apply to me", and the Court, without having to say that the trader falls within (a) and not the others, or within (c) and not the others, will have to listen to the whole of the argument and at that stage, under the President's Amendment, the Court will be able to weigh up all the contentions which the industry has made against the public interest. Therefore, it is not correct for the President to say that the Court will be limited to one particular set of circumstances. That is the assumption which The Times makes. The Times says, and I think wrongly, that the Amendment strengthens the Clause.

I will now read on: But the effect of the old wording might have been doubtful. We should all agree with that— It is clear now that the Court must pronounce on the balance of advantage between the positive merits claimed for an agreement under paragraphs (a) to (g) and the detriment which it may inflict under the general proviso. This takes the Court some way from the ordinary judicial function. It emphasizes the importance of the knowledge, and indeed the economic views, of the members of the Court. There is no reason why Parliament should not delegate to the Court the power to judge the balance of economic advantage within limits laid down by statute. But those limits should be narrow. Is it right that a Court should have to weigh an alleged likelihood that the removal of the restriction would ' cause a substantial reduction in the volume or earnings of the export trade' against the alleged discomfiture of consumers or would-be new entrants into the industry? Argument on such a matter would be far more general and doctrinal than anything commonly heard in the Royal Courts of Justice. These seven gateways may yet have to be subjected to stricter scrutiny. I have read the whole article. I want to comment on it and then, if hon. Members opposite wish, I will give way.

This is merely confirmation, if more confirmation were wanted, of the contention which we have been advancing throughout, that these matters are not justiciable at all, but are rather matters in which economic advantages have to be weighed in the balance. It is very unfortunate that the Amendment was put down at such a late stage and after we had had the argument about whether these matters should be referred to the Court or to a tribunal, because the President has made more abundantly clear than ever before that the Court is being asked not to try a justiciable matter, but to come to a view on the balance between circumstances of detriment to the public.

As the Clause stood previously, he could plausibly, although not very successfully, have put forward the argument that the trader had to discharge an onus of proof before he could succeed. He might have been able to allege, with far more success than he could now have, that the language of the tailpiece required the Court to declare an agreement contrary to the public interest, unless the trader proved what used to be set out in the tailpiece. Under the Amendment that onus no longer exists.

Mr. Thorneycroft

indicated dissent.

Mr. Fletcher

Forgive me. It no longer exists. The Court weighs in the balance one economic advantage against another, and gives a decision accordingly. The President shakes his head; I know he has a very difficult and thankless task with all the pressure from the ranks behind him. It is with some regret that I have to say on this occasion that the President of the Board of Trade has given way to pressure against his better judgment.

Mr. Thorneycroft

I have not given way to pressure. The hon. Member has had some legal training. He has had an opportunity to study these words. He says that they shift the onus. How can he substantiate that, in view of the words "further satisfied"?

Sir L. Ungoed-Thomas

It would be helpful to me if the right hon. Gentleman would say precisely what, in his intention, is the difference between the words now in the Clause and as they would be if the Amendment were accepted. I do not mean that he should read out the words, but should tell us the difference in effect.

Mr. Thorneycroft

There was doubt expressed about just precisely what these words meant. It was thought in some quarters that after (a) to (g) were over the whole issue was started de novo and that some new approach was to be made to it with no relation—this was put to me—to what had been established before. Without calling in aid the rights or wrongs of these restrictive practices, they had then to be judged in relation to the onus on the industry.

Our intention is always the same about the onus. The words are quite clear: Is further satisfied (in any such case). That makes it clear beyond a peradventure that the onus is still there. We have tried to make it plain that the benefits or advantages which have been shown by the parties in evidence in front of the Court can be called in aid and a balance has to be struck between those advantages and any detriment to the public. That is what courts are doing all the time.

The quotation from The Times was helpful to the hon. Member for Islington, East but on the wrong point, that which we debated and finished with, whether there was to be a court or a tribunal. It said quite plainly that the Amendment strengthened the Clause in the sense that it makes it definitely plainer.

Mr. Grimond

I appreciate that the tail-piece to the Clause is important but is a little difficult, and I appreciate that the right hon. Gentleman is going to reconsider paragraphs (a) and (g). Will he tell us what is meant by the word "public"? I understand that the Clause safeguards the general public.

10.0 p.m.

It does more than safeguard people who are directly affected by the restrictive practice, or the people who buy the goods from the association which is enforcing any particular practice. It places upon the court the onus of taking into account the effect of the practice upon public life. I hope I am right about that. Earlier on some reference was made to Dundee and the jute industry. It was suggested that the heavy unemployment in that industry might have been alleviated to some extent by the maintenance of restrictive practices. That was put forward as an argument when we were dealing with paragraph (f).

I have grave doubts about that paragraph, one of which is that although it is possible to conceive circumstances in which one industry might be able to minimise unemployment by being allowed to continue restrictive practices, it might well be at the expense of other industries. In the case of Dundee, new industries were brought into the area. It might have so happened that, had rigid restrictive practices been enforced in the jute industry, those other industries would not have received the advantages which they did receive and would not have created the very important new occupations in the town. Would that consideration have been taken into account under this tailpiece? Does the word "public" cover the public at large and also other industries? I should be very grateful if we could be assured on that point.

Secondly, how is this public to be represented? It is all very well to say that the onus is on the association to prove that its operations are not against the public interest, but surely the public interest will have to be represented to the Court in some way. The Court will surely have to be placed in a position in which it can call evidence as to the effect of certain restrictive practices upon the public interest. I am not certain how that is to be done. Will it be open to anyone who feels that he may be affected by the maintenance of a restrictive practice—even though he is not a purchaser, consumer or user of the goods concerned—to ask to be heard at the Court? Will it be open to individuals, associations, consumers and other industries? Or will such representation be left to a Government Department, such as the Board of Trade? Or will the Court be allowed to call evidence at its own discretion? We should be informed about this point before we leave the Amendment.

Lieut.-Colonel Wentworth Schofield (Rochdale)

I support the Amendment because it accepts the very important principle of balance. It will enable the Court, if it thinks fit, to rule that a particular practice or agreement is not neces sarily contrary to the public interest if the Court is satisfied that, on balance, the benefit which would accrue to the public is so small as to be out of all proportion to the damage which would be caused, not only to those who are parties to the agreement, but also to other sections of the public who may be affected by the withdrawal of the restriction. Work-people engaged in the industry may well come within that category. What we must watch is that when the Bill becomes law it will be just and fair, not only to the general public, but also to those who engage in industry and commerce.

I presume that that is why the Bill provides that any practice or arrangement which comes before the Court shall be considered and judged by judges. As an ordinary layman who has never yet been before a judge—fortunately—I cannot claim to know as much about courts and judges as many hon. and learned Members. But I have always understood that judges are impartial and are accustomed to hearing evidence from both sides—the pros and cons—and are able to weigh up that evidence fairly and squarely before coming to their verdict.

If I read the Amendment correctly, it will give the right to the Court to hear such arguments as may be necessary and, having done so, to determine whether on balance the restriction is reasonable or otherwise. If the restriction takes place it is certain that agreements or practices will vary in the degree to which they may or may be against the public interest. What worries many people engaged in industry is that an agreement may be comparatively harmless to the general public but be declared contrary to the public interest purely because the Court would not have a chance of assessing the findings on the balance of evidence. Prior to this Amendment being moved by my right hon. Friend, there appeared to be no power for the Court to take into account that there are some industries where the slight amount of benefit to the public would be completely outweighed by the damage which would be caused if the practice were discontinued in that particular industry or trade.

One such case which comes to my mind, about which I have special knowledge, is the cotton spinning industry, an industry which works on large productions and small margins. Let us take, for example, the cotton spinning mill, spinning the kind of yarn which is normally sold to a manufacturer to make overalls. A pair of overalls commonly described as the bib-and-brace type has approximately 2¼ 1bs. of cotton yarn in it. These overalls are normally sold at about 25s. in the shops. If the price of the yarn were reduced by 2d. per 1b.—and I can assure hon. Members that 2d. per 1b. reduction on that type of yarn, which is twenties, would be a very considerable reduction indeed, because we talk about a farthing, an eighth and a sixteenth in adjusting our prices—and that adjustment was passed on in subsequent stages to the retail shops, the most that the retail shops could reduce the price of that pair of overalls would be by 4½d.—from 25s. to 24s. 7½d. I doubt very much whether any member of the public would feel that he was getting much benefit from such a reduction.

Let us look at the effect that that reduction would have on the spinner who has to spin the yarn if he had to knock 2d. per 1b. off the price of his yarn. The modern spinning mill today would spin 82,000 1bs. of that yarn every week and 82,000 1bs. at 2d. per 1b. amounts to £683 a week or £34,000 a year. The industry is so balanced that it makes no difference whether it is spinning coarse or fine yarns.

If we take as an example the ordinary poplin shirt which many hon. Members may be wearing, and reduce the price of the yarn which goes into that shirt by 6d. per 1b., which is a considerable amount, it would have the same effect of costing the industry £34,000, and all that the public would get by way of reduced cost would be 4½d. off a shirt retailed at 35s. to 40s. That is a perfect example of what it means.

Mr. Roy Jenkins

How does the hon. and gallant Gentleman arrive at the extraordinary figure of 4½d.?

Lieut.-Colonel Schofield

If the hon. Gentleman is wearing a shirt which contains3¾ 1b. of yarn and the price of the yarn is reduced by 6d. the reduction in the price of the shirt would be only 4½d. I am sorry that I had to go into this question with someone who has established himself as an economist.

Mr. Jenkins

Does not the hon. and gallant Gentleman recognise that a retailer works on a percentage margin and that a reduction in cost on the primary subject is carried through, all the time being increased?

Lieut.-Colonel Schofield

I am afraid that the hon. Gentleman, in spite of being an economist, does not understand.

I said that the price of the yarn is reduced by 6d. a pound and passes through all its subsequent stages, and I was referring to the raw material which goes into the making of the shirt. No one else can have any effect on that reduction. It is still 4½d. for the shirt. I am not talking about the tail of the shirt, but the shirt as a whole.

A short time ago the President of the Manchester Chamber of Commerce, when making a survey of the industry, said that during 1955 the average profit of the cotton spinning mills was £27,000 a year. I submit that if the industry had to make the reductions of which I have spoken, that average of £27,000 profit would be converted into a loss. No industry can live on losses and, sooner or later, there would be unemployment. I support this Amendment, because it lays down that the balance between benefit and damage shall be taken into consideration.

Mr. Jay

I do not wish to spin yarns on tailpieces but to ask the President this question. By the introduction of these new words, whatever he intended, has not the right hon. Gentleman in fact weakened the scope of the Clause? Did not the previous words means that the applicant had to prove that the agreement caused no unreasonable detriment to the public, to paraphrase the words, and do not the words which are now introduced mean that the applicant has to prove that the detriment to the public does not exceed the advantage claimed under the other Clauses?

Whether that is right or wrong, it surely must be easier to prove that the detriment to the public, however great, is not greater than certain other advantages, than to prove that there is no detriment at all? Is that correct, and if not can the President explain why?

Mr. P. Thorneycroft

Before answering that question I wish to thank my hon. and gallant Friend the Member for Rochdale (Lieut.-Colonel Schofield) for the courteous and lucid way in which he has supported my Amendment.

The answer to the right hon. Member for Battersea, North (Mr. Jay) is that under the Bill as drafted the words are as follows, and (in any such case) that the restriction has not operated and is not calculated to operate to an unreasonable extent to the detriment of persons … When the Court is faced with these words and has to decide what was "to an unreasonable extent," there would be a good deal of doubt as to what it ought to take into account. We thought it right to spell that out clearly in the Bill itself. I do not think there is much difference of opinion on either side of the Committee that what ought to be taken into account are the advantages and benefits on the one side against the detriment on the other.

10.15 p.m.

Mr. Hector Hughes

I did not intend to trouble the Committee until I listened to the very entertaining speech of the hon. and gallant Member for Rochdale (Lieut.-Colonel Schofield). He gave us a very interesting performance with figures, but we know other people who come from Rochdale who give us much more interesting performances in another sphere. As I listened to the hon. and gallant Gentleman's speech it seemed to me that his argument was really one in favour of the Clause without the Amendment now under discussion.

I propose to counter the hon. and gallant Gentleman's argument with some further reasons why this Amendment is undesirable, and I shall put them very succinctly. The first is that it adds to the already long list of escape paragraphs in the Clause which run from (a) to (g), but this escape Clause is not like the others from paragraphs (a) to (g), which are frankly set forth as escape Clauses. This escape Clause is designed and disguised as an omnibus Clause. In fact it is an escape Clause in terms which are far too generous. It would place too great a burden upon the Court and would tend to defeat all the purposes of the Bill by the delay which it would involve in the administration of the Bill.

Let us consider what the Court will have to decide if this Amendment is accepted. The Court will have to be satisfied not only on the seven issues arising on paragraphs (a) to (g), but it will also have to be satisfied that the restriction is unreasonable. What is the criterion of "unreasonable"? No criterion is given beyond having regard to the balance between those circumstances and any detriment to the public or to persons not parties to the agreement. Who are these persons to be? They may be legion. They are described in generic terms, but not in any particular terms.

I submit that it is placing an impossible burden upon the Court to have to determine questions of that sort. The questions will include the meaning of "unreasonable" and what are the circumstances envisaged—the word "circumstances" is used—but which are not defined, and what is the balance of circumstances. The Amendment adds nothing of advantage to the Clause. It only makes the Clause more complicated, more difficult to construe and far more difficult for the unfortunate people who will have to administer it. Therefore, I oppose it.

Sir L. Ungoed-Thomas

I accept at once that the onus remains upon the industrialist. There is nothing between us at all on that. The word "balance" seems to be the next point of importance in the Amendment. Again, I say, as I stated on Second Reading, that I have always taken the view that on the construction of this Bill as it originally stood the words "unreasonable extent" in the second line of the tailpiece always brought into operation in the tailpiece the "balance" as against the items in paragraphs (a) to (g). As I say, I have taken that view throughout, and I was interested to see that that was, in fact, what the Lord Chancellor stated in his speech in Glasgow, shortly after the Second Reading debate, as being his interpretation of the tailpiece. There has certainly been doubt about it.

What the Amendment does, quite clearly, is to make it impossible for the Court to avoid the political economic decision which is involved in balancing the economic advantages and disadvantages of what is included in paragraphs (a) to (g) with what I will call the general detriment to the public which is included in the latter paragraph. It has the advantage of clarification, but clarification in the sense which is contrary to the way in which we should like to have it clarified.

The second item is the words "detriment to the public". The whole of this tailpiece involves some difficult questions of construction. "Public" and "detriment to the public" are terms which are capable of more than one meaning and terms which obviously have to be interpreted in their context. It is arguable as to what is meant by "detriment to the public." The phrase in the Bill as it stands is at the end of the tailpiece. After dealing with consumers, etc., the paragraph gives as a general omnibus arrangement, or otherwise to the detriment of the public. Rightly or wrongly, I have always taken the view that those words mean everything that could be brought within the term "public interest". I do not know whether that was the intention, but that was the view I formed to the best of my ability on the words, or otherwise to the detriment of the public at the end of the Clause.

Now we have the words balance between those circumstances and any detriment to the public or to". but they are used in a different context and as a term capable of a wide or narrow meaning according to the context in which it is found. The difficulty I find about this term in the Amendment is that it may be interpreted in a very much narrower sense than it would be interpreted in the original wording of the Bill.

These are difficult questions of construction, and it is perfectly possible for "detriment to the public" to have one meaning in one context and a different meaning in another context. It seems to me that in the Amendment it has a much narrower connotation than in the original wording. Was the intention in the original wording that "detriment to the public" should bring in all questions of public interest or not? I gather that the intention is that it should have the same effect, but it is intended to bring in all matters of public interest, or is it not?

Mr. P. Thorneycroft

"Detriment to the public" is the detriment resulting, or likely to result, from the operation of the restriction in both cases.

Sir L. Ungoed-Thomas

Yes, but we are dealing with the balance of advantage, and I wish to ask if "detriment to the public" means anything, for instance, which affects the public, not the public merely as consumers, but generally?

Mr. Thorneycroft

These Amendments are difficult to follow if they are not set out completely, but the Amendment makes it plain that any detriment to the public, or to persons not parties to the agreement—which is in the subjunctive—is detriment to the public, which is preserved in both cases.

Sir L. Ungoed-Thomas

I appreciate that the right hon. Gentleman does not intend any change in meaning, but I gathered earlier that in the Bill as it stood originally one could bring in, under "detriment to the public", any matter of public interest, anything in the interest of the public, anything, in other words, which is within the meaning of "public interest" in Clause 15, whereas it may have a very much more restrictive meaning and may mean just members of the public, "the public" in that sense. Shall we be quite clear on this? [Laughter.] That is the object of the Committee stage. I am certainly not letting it pass until I am clear upon it.

Does "detriment to the public" in the Amendment mean the same as "public interest" in Clause 15? If it does, I am content. If it does not, I am not content, because in my view it would restrict the meaning of the Clause.

The Chairman

I think the Committee is ready to come to a decision on the Amendment.

Mr. R. Harris

I have been waiting[HON. MEMBERS: "Divide."]—a long time to speak. I regard this as one of the major controversial issues of the Bill, on which I feel strongly. As a trade association secretary, I may be one of the people who has to go before the Court. Therefore I am anxious to know exactly what the Bill means.

My feelings on the Amendment have fluctuated. Every time a Member of the Labour Party has put his views on it my hopes have risen, and every time my right hon. Friend has risen to speak they have fallen. I hope that all the things that the Labour Party says about the Amendment are true. Even if they are true, they do not go nearly far enough.

The whole Clause is one which I do not like. I do not like a system under which people go before a Division of the High Court and are guilty before they open their mouths. I put down an Amendment because in my opinion there should be something that should be proved by the Registrar or there should be a shift of onus on to the Registrar or the Court. I do not like a Clause which puts the complete onus on to the operators of an agreement. I hoped that anything in this tailpiece, as we are calling it, would have to be proved by the Registrar or by the Government or their representatives. If the operators of an agreement have to prove the requirements of paragraphs (a) to (g), there is enough onus on them and I should have thought that the final all-embracing condemnation should be the responsibility of the Registrar. My Amendment was designed to shift the onus.

I hope that what the Labour Party has said about this is right, and I hope that the right hon. Member for Battersea, North (Mr. Jay) is correct in his summing up of the new situation. I shall not oppose the President of the Board of Trade if there is a Division. I shall have to go into the Lobby behind him. [HON. MEMBERS: "Shame."] I shall go with dragging feet. I am diametrically opposed to the views of the Labour Party, and so there would have to be a third Lobby for me, which is an impossibility.

There will undoubtedly be great resentment by industrialists and traders who are affected by registration and appearance before the Court. They are as modest, hard-working and respectable as those who sit in this House, but they must go before the Court and find themselves guilty before they start. It would have been much fairer had that which has to be proved in this tailpiece been made the responsibility of the Registrar. However, as the President of the Board of Trade has moved an Amendment which goes a little of the way, while I entirely agree with the right hon. Member for Battersea, North, I must be satisfied.

Mr. P. Thorneycroft

If anyone had doubt as to where the onus lay, my hon. Friend's speech will have removed it. I do not want to reply at length to the points of construction which were very properly put by the hon. And learned Member for Leicester, North-East (Sir L. Ungoed-Thomas). These are not easy or simple matters.

On the words "public interest", we have in the opening phrases of the Clause put the presumption that all these restrictions are against the public interest. Both in the Amendment and in the Bill as drafted we have avoided the words "public interest". We have avoided them for reasons connected with the case law with which the hon. and learned Gentleman will probably be familiar.

10.30 p.m.

It might be as well to make a fresh start about this, to get the presumption that it is against the public interest and then to say that the following circumstances have to be proved—(a) to (g)—and any detriment to the public which might result or is likely to result from the operation of the restriction; that is to say, the detriment that one has to judge in both cases is the detriment or injury which might flow from the operation of the restriction.

What the Court does—and we have argued on other occasions as to whether this is the appropriate tribunal—is to balance the advantages or benefits of this against the detriment in that sense, the detriment to the public either in general or to persons not party to the agreement.

Mr. Grimond

Can the right hon. Gentleman say what power the Court will have to call evidence of the public interest?

Mr. Thorneycroft

The Registrar represents the public interest in this sense and he will, of course, call any evidence which appears to him to be appropriate whether of other industries or private persons.

Mr. Philip Bell

Is there a difference between "not unreasonable" and "reasonable"?

Question put, That those words be there inserted:—

The Committee divided: Ayes 176, Noes 115.

Division No. 170.]	AYES	[10.32 p.m.
Agnew, Cmdr. P. G.	Harrison, Col. J. H. (Eye)	Noble, Comdr. A. H. P.
Aitken, W. T.	Harvey, Air Cdre. A. V. (Macclesfd)	Nugent, G. R. H.
Arbuthnot, John	Heald, Rt. Hon. Sir Lionel	Oakshott, H. D.
Armstrong, C. W.	Heath, Rt. Hon. E. R. G.	Ormsby-Gore, Hon. W. D.
Ashton, H.	Hill, Mrs. E. (Wythenshawe)	Orr, Capt. L. P. S.
Baldock, Lt.-cmdr. J. M.	Hill, John (S. Norfolk)	Orr-Ewing, Charles Ian (Hendon, N.)
Baldwin, A. E.	Hinchingbrooke, Viscount	Page, R. G.
Barber, Anthony	Hirst, Geoffrey	Pannell, N. A. (Kirkdale)
Barlow, Sir John	Holland-Martin, C. J.	Partridge, E.
Barter, John	Holt, A. F.	Pickthorn, K. W. M.
Baxter, Sir Beverley	Hope, Lord John	Pilkington, Capt. R. A.
Bell, Philip (Bolton, E.)	Hornsby-Smith, Miss M. P.	Pitman, I. J.
Bell, Ronald (Bucks, S.)	Horobin, Sir Ian	Pitt, Miss E. M.
Biggs-Davison, J. A.	Howard, Hon. Greville (St. Ives)	Pott, H. P.
Bishop, F. P.	Howard, John (Test)	Powell, J. Enoch
Black, C. W.	Hughes Hallet, Vice-Admiral, J.	Profumo, J. D.
Body, R. F.	Hughes-Young, M. H. C.	Raikes, Sir Victor
Bowen, E. R. (Cardigan)	Hutchison, Sir Ian Clark (E'b'gh, W.)	Rawlinson, Peter
Boyle, Sir Edward	Hyde, Montgomery	Redmayne, M.
Bryan, P.	Hylton-Foster, Sir H. B. H.	Remnant, Hon. P.
Buchan-Hepburn, Rt. Hon. P. G. T.	Irvine, Bryant Godman (Rye)	Ridsdale, J. E.
Channon, H.	Jenkins, Robert (Dulwich)	Rippon, A. G. F.
Chichester-Clark, R.	Johnson, Dr. Donald (Carlisle)	Robertson, Sir David
Clarke, Brig. Terence (Portsmth, W.)	Johnson, Eric (Blackley)	Robinson, Sir Roland (Blackpool, S.)
Cooper, Sqn. Ldr. Albert	Joseph, Sir Keith	Rodgers, John (Sevenoaks)
Cordeaux, Lt.-Col. J. K.	Joynson-Hicks, Hon. Sir Lancelot	Roper, Sir Harold
Corfield, Capt. F. V.	Keegan, D.	Ropner, Col. Sir Leonard
Craddock, Beresford (Spelthorne)	Kerr, H. W.	Schofield, Lt.-Col. W.
Crouch, R. F.	Kershaw, J. A.	Sharpies, R. C.
Cunningham, Knox	Kimball, M.	Shepherd, William
Dance, J. C. G.	Kirk, P. M.	Simon, J. E. S. (Middlesbrough, W.)
Davies, Rt. Hn. Clement (Montgomery)	Lagden, G. W.	Smithers, Peter (Winchester)
Deedes, W. F.	Lambert, Hon. G.	Steward, Harold (Stockport, S.)
Doughty, C. J. A.	Leather, E. H. C.	Stoddart-Scott, Col. M.
Drayson, G. B.	Leavey, J. A.	Studholme, H. G.
du Cann, E. D. L.	Leburn, W. G.	Summers, G. S. (Aylesbury)
Duncan, Capt. J. A. L.	Legge-Bourke, Maj. E. A. H.	Sumner, W. D. M. (Orpington)
Elliot, Rt. Hon. W. E.	Legh, Hon. Peter (Petersfield)	Taylor, Sir Charles (Eastbourne)
Errington, Sir Eric	Linstead, Sir H. N.	Teeling, W.
Finlay, Graeme	Lloyd, Maj. Sir Guy (Renfrew, E.)	Thompson, Kenneth (Walton)
Fisher, Nigel	Macdonald, Sir Peter	Thorneycroft, Rt. Hon. P.
Fletcher-Cooke, C.	McLaughlin, Mrs. P.	Touche, Sir Gordon
Fraser, Hon. Hugh (Stone)	Maclay, Rt. Hon. John	Vaughan-Morgan, J. K.
Freeth, D. K.	Macpherson, Niall (Dumfries)	Vickers, Miss J. H.
Galbraith, Hon. T. G. D.	Maddan, Martin	Vosper, D. F.
George, J. C. (Pollok)	Maitland, Hon. Patrick (Lanark)	Wade, D. W.
Gibson-Watt, D.	Manningham-Buller, Rt. Hn. Sir R.	Walker-Smith, D. C.
Godber, J. B.	Marlowe, A. A. H.	Wall, Major Patrick
Gower, H. R.	Marples, A. E.	Ward, Hon. George (Worcester)
Graham, Sir Fergus	Mathew, R.	Ward, Dame Irene (Tynemouth)
Grant, W. (Woodside)	Maude, Angus	Waterhouse, Capt. Rt. Hon. C.
Green, A.	Mawby, R. L.	Whitelaw, W. S. I. (Penrith & Border)
Gresham Cooke, R.	Maydon, Lt.-Comdr. S. L. C.	Williams, Paul (Sunderland, S.)
Grimond, J.	Milligan, Rt. Hon. W. R.	Wills, G. (Bridgwater)
Grimston, Hon. John (St. Albans)	Molson, A. H. E.	Wilson, Geoffrey (Truro)
Grosvenor, Lt.-Col. R. G.	Morrison, John (Salisbury)	Woollam, John Victor
Gurden, Harold	Nairn, D. L. S.
Hall, John (Wycombe)	Neave, Airey	TELLERS FOR THE AYES:
Harris, Frederic (Croydon, N.W.)	Nicolson, N. (B'n'm'th, E. & Chr'ch)	Mr. R. Thompson and
Harris, Reader (Heston)	Nield, Basil (Chester)	Mr. E. Wakefield.

NOES
Albu, A. H.	Clunie, J.	Fletcher, Eric
Allen, Arthur (Bosworth)	Collick, P. H. (Birkenhead)	Forman, J. C.
Allen, Soholefield (Crewe)	Collins, V. J. (Shoreditch & Finsbury)	Gaitskell, Rt. Hon. H. T. N.
Benn, Hn. Wedgwood (Bristol, S.E.)	Corbet, Mrs. Freda	Gibson, C. W.
Benson, G.	Craddock, George (Bradford, S.)	Gordon Walker, Rt. Hon. P. C.
Beswick, F.	Cronin, J. D.	Greenwood, Anthony
Blackburn, F.	Darling, George (Hillsborough)	Grenfell, Rt. Hon. D. R.
Blenkinsop, A.	Davies, Stephen (Merthyr)	Grey, C. F.
Blyton, W. R.	Delargy, H. J.	Griffiths, William (Exchange)
Bowden, H. W. (Leicester, S.W.)	Dodds, N. N.	Hale, Leslie
Braddock, Mrs. Elizabeth	Donnelly, D. L.	Hall, Rt. Hn. Glenvil (Colne Valley)
Brockway, A. F.	Dugdale, Rt. Hn. John (W. Brmwch)	Hannan, W.
Broughton, Dr. A. D. D.	Ede, Rt. Hon. J. C.	Hayman, F. H.
Burke, W. A.	Edwards, Robert (Bilston)	Herbison, Miss M.
Butler, Herbert (Hackney, C.)	Evans, Albert (Islington, S.W.)	Houghton, Douglas
Butler, Mrs. Joyce (Wood Green)	Evans, Edward (Lowestoft)	Hubbard, T. F.
Callaghan, L. J.	Evans, Stanley (Wednesbury)	Hughes, Emrys (S. Ayrshire)
Champion, A. J.	Fernyhough, E.	Hughes, Hector (Aberdeen, N.)

Hunter, A. E.	Mikardo, Ian	Short, E. W.
Irving, S. (Dartford)	Mitchison, G. R.	Silverman, Julius (Aston)
Jay, Rt. Hon. D. P. T.	Moody, A. S.	Sparks, J. A.
Jeger, George (Goole)	Mulley, F. W.	Stross, Dr. Barnett (Stoke-on-Trent, C.)
Jeger, Mrs. Lena (Holbn & St. Pncs, S.)	Neal, Harold (Bolsover)	Summerskill, Rt. Hon. E.
Jenkins, Roy (Stechford)	Noel-Baker, Francis (Swindon)	Sylvester, G. O.
Johnson, James (Rugby)	Oram, A. E.	Taylor, John (West Lothian)
Jones, Rt. Hn. A. Creech(Wakefield)	Oswald, T.	Tomney, F.
Jones, Elwyn, (W. Ham, S.)	Owen, W. J.	Ungoed-Thomas, Sir Lynn
Kenyan, C.	Paget, R. T.	Wells, William (Walsall, N.)
Key, Rt. Hon. C. W.	Paling, Will T. (Dewsbury)	Wheeldon, W. E.
Lawson, G. M.	Palmer, A. M. F.	White, Mrs. Eirene (E. Flint)
Lindgren, G. S.	Pargiter, G. A.	White, Henry (Derbyshire, N.E.)
Mabon, Dr. J. Dickson	Parker, J.	Willey, Frederick
MacColl, J. E.	Peart, T. F.	Williams, W. R. (Openshaw)
McInnes, J.	Plummer, Sir Leslie	Willis, Eustace (Edinburgh, E.)
McKay, John (Wallsend)	Probert, A. R.	Woof, R. E.
MacPherson, Malcolm (Stirling)	Pryde, D. J.	Yates, V. (Ladywood)
Mahon, Simon	Roberts, Albert (Normanton)	Younger, Rt. Hon. K.
Mallalieu, E. L. (Brigg)	Rogers, George (Kensington, N.)
Mellish, R. J.	Ross, William	TELLERS FOR THE NOES:
		Mr. Deer and Mr. Simmons.

Further Amendments made: In page 14, line 35, leave out from "restriction" to "persons" in line 37 and insert: is not unreasonable having regard to the balance between those circumstances and any detriment to the public or to".

In line 41, leave out from "goods" to end of line and add: resulting or likely to result from the operation of the restriction".—[Mr. Walker-Smith.]

Mr. Roy Jenkins

I beg to move, in page 14, line 41, at the end to add: In determining whether the restriction has not operated and is not calculated to operate to an unreasonable extent to the detriment of persons or the public as hereinbefore provided all matters which appear in the particular circumstances to be relevant shall be taken into account and amongst other things regard shall be had to the need consistently with the general economic position of the United Kingdom to achieve the objects stated in paragraphs (a). (b), (c) and (d) of section fourteen of the Monopolies and Restrictive Practices (Inquiry and Control) Act. 1948. We have spent all today until now dealing on this Clause with considerations which the Court should take into account in order that restrictive practices may be allowed to continue. We think it not inappropriate that at the end of this Clause there should be inserted certain considerations in the other direction which the Court should also keep constantly in mind when pronouncing upon these cases. We thought that the most appropriate thing to do was to take a part of the Monopolies and Restrictive Practices (Inquiry and Control) Act, 1948, and to insert a part of it at the end of this Clause as balancing points against those which we have been considering throughout the day.

I will read briefly to the Committee the part of the 1948 Act which we propose here to insert: … regard shall be had to the need, consistently with the general economic position of the United Kingdom, to achieve

1. (a) the production, treatment and distribution by the most efficient and economical means of goods of such types and qualities, in such volume and at such prices as will best meet the requirements of home and overseas markets;
2. (b) the organisation of industry and trade in such a way that their efficiency is progressively increased and new enterprise is encouraged;
3. (c) the fullest use and best distribution of men, materials and industrial capacity in the United Kingdom; and
4. (d) the development of technical improvements and the expansion of existing markets and the opening up of new markets."

It is important that the Court, in pronouncing on these issues, should bear in mind what I hope is the general idea of the Committee, that we should have a dynamic approach to our economy and to the problems which the Court is called upon the consider.

In the light of some of the speeches to which we have listened, it is a little difficult to remember that this is a Bill to end and not to uphold restrictive practices, certainly in view of the applause given to some of the speeches made within the last hour or so. For instance, the suggestion was made by the hon. Member for Shipley (Mr. Hirst) that if there is to be any progress, any technical development, any research and rapid development in British industry, there must be a price ring or monopolistic practice to make that possible.

This is a point of view which we reject completely, and I hope that the President of the Board of Trade and the Parliamentary Secretary will reject it also. It is important that we should keep the main object of this Bill before our eyes. It is also important that we should keep in our minds the fact that there is a great deal wrong with British industry at the present time, and that is why we are having this Bill.

It is no use hon. Members coming before the Committee and trying to put forward the suggestion that almost every restrictive practice which exists in British industry is fully justified, has a great deal to recommend it, and it is desirable that it should continue. We are faced at present with the hard fact that the rate of growth of the British economy is almost certainly less than that of any other comparable economy in the world, and something should be done about it.

10.45 p.m.

In our approach to the Bill, let us bear in mind that not only must we safeguard existing vested interests but we must be prepared to sacrifice them in order to get a little dynamism into our economy. It is for this reason that we have taken these provisions from the 1948 Act and suggest that they should be inserted at the end of the Clause as balancing considerations—the President likes the phrase "balancing considerations "—to be kept in the mind of the Court and set against the other considerations which we have been debating for so long.

The Parliamentary Secretary to the Board of Trade (Mr. Derek Walker-Smith)

As the hon. Member for Stechford (Mr. Roy Jenkins) has reminded the Committee, we have now been debating the Clause for more than six hours, and almost everything that could possibly or usefully be said has been said about almost every aspect of it. I will certainly emulate the conciseness with which the hon. Member has spoken and try to emulate his admirable clarity.

I am sure the hon. Gentleman, in wishing to add these words to the Clause, is desirous of improving and strengthening it. However, let me say straight away that the addition of the words, far from strengthening it, would give rise to grave danger of weakening the Clause as now drafted. I fully appreciate that the Amendment was, no doubt, thought out and tabled before we tabled our clarifying Amendment to which the decision of the Committee has just given effect.

We consider that as a result of that Amendment we have now got the right test by way of justiciable issue for the Court defined in the way in which my right hon. Friend put it in moving that Amendment. The essence of the test is that it should be definite and that there should be a balancing of the advantages under such of paras. (a-g) as the industry has been able to establish before the Court as against any detriment to the public or the parties which can be established.

That principle is put in jeopardy by the addition of these words because of the very largeness of the principles set out in Section 14 of the 1948 Act. If those tests are written into the Bill, it will invite a general discussion on the second part of the requirements under the Clause—that is, of the balancing—and it will admit of arguments in aid of restrictive practices more widely based than merely on the benefits established under paras. (a-g). These words make the matter wide open, and it would be possible for a person justifying restrictive practices to base his case much more widely than he will be able to do it under our balancing test.

If the hon. Gentleman will look at the words with care, he will appreciate that some of the tests to which he has referred are merely vaguer and more generalised versions of some of the specific points which are spelt out with considerable precision in paras. (a-g).

Mr. Roy Jenkins

indicated dissent.

Mr. Walker-Smith

The hon. Gentleman shakes his head. If he will turn to the reference to the export position in 14 (a) and 14 (d), and to the words about the opening up of new markets, he will see how much vaguer and imprecise is the phraseology in which the tests would be applied than in (a) to (g) of the Clause.

Though the hon. Gentleman's intention is to make the tests stiffer, he is in fact proposing to weaken them with these very wide and generalised words. I do not want him to misunderstand me. I am not saying that the principles are not in themselves admirable, but that they are vaguely and widely expressed and not helpful in framing a justiciable issue for the Court. If the Bill had followed the desires of hon. Gentlemen opposite and was to work in a different way from having a Court, the Amendment might have been in some circumstances suitable; but it is not suitable for a Court.

Sir L. Ungoed-Thomas

We have had a long and exhausting discussion on the Clause and I am sure we want to bring it to a head as soon as we reasonably can. I appreciate the point which the right hon. Gentleman has just made about disturbing the balance and all the rest of it.

I accept that the Amendment is not as well drafted as it might be to achieve our purpose, but the principle that we have in mind—this is decisive from our point of view—is whether or not the matters in consideration, and which were mentioned in Section 14 (a), (b), (c) and (d) of the 1948 Act, could be brought into the consideration of the detriment of the public in the Bill as now amended. If so, we are satisfied. If not, the sub-

stance of our Amendment has not been met.

Mr. Walker-Smith

I will answer in this way. The Court has to do the balance test, and the people seeking to justify a practice can only put forward matters under (a) to (g). That is their side of the test. The Court will be able to approach the detriment to the public side from two aspects, one being the detriment to the parties who are defined in the Clause. In the same context of detriment to the public I have no doubt that these matters will come in. I do not want the hon. Member to think that the Court is to be compelled on each occasion to look at these very wide matters. I do not want to impair the balance that we have got.

Question put, That those words be there added:—

The Committee divided: Ayes 104, Noes 168.

Division No. 171.]	AYES	[10.54 p.m.
Albu, A. H.	Forman, J. C.	Noel-Baker, Francis (Swindon)
Allan, Arthur (Bosworth)	Gaitskell, Rt. Hon. H. T. N.	Oram, A. E.
Allen, Scholefield (Crewe)	Gibson, C. W.	Oswald, T.
Benn, Hn. Wedgwood (Bristol, S.E.)	Gordon Walker, Rt. Hon. P. C.	Owen, W. J.
Benson, G.	Greenwood, Anthony	Paling, Will T. (Dewsbury)
Beswick, F.	Grey, C. F.	Palmer, A. M. F.
Blackburn, F.	Hale, Leslie	Parker, J.
Blenkinsop, A.	Hannan, W.	Peart, T. F.
Blyton, W. R.	Hayman, F. H.	Plummer, Sir Leslie
Bowden, H. W. (Leicester, S.W.)	Herbison, Miss M.	Probert, A. R.
Braddock, Mrs. Elizabeth	Hubbard, T. F.	Pryde, D. J.
Brockway, A. F.	Hughes, Emrys (S. Ayrshire)	Roberts, Albert (Normanton)
Broughton, Dr. A. D. D.	Hughes, Hestor (Aberdeen, N.)	Rogers, George (Kensington, N.)
Burke, W. A.	Hunter, A. E.	Ross, William
Butler, Herbert (Hackney, C.)	Irving, S. (Dartford)	Short, E. W.
Butler, Mrs. Joyce (Wood Green)	Jay, Rt. Hon. D. P. T.	Silverman, Julius (Aston)
Callaghan, L. J.	Jeger, George (Goole)	Sparks, J. A.
Champion, A. J.	Jeger, Mrs.Lena (Holbn & St. Pncs. S.)	Stross, Dr. Barnett (Stoke-on-Trent, C.)
Clunie, J.	Jenkins, Roy (Stechford)	Summerskill, Rt. Hon. E.
Collick, P. H. (Birkenhead)	Johnson, James (Rugby)	Sylvester, G. O.
Collins, V. J. (Shoreditch & Finsbury)	Jones, Elwyn (W. Ham, S.)	Tomney, F.
Corbet, Mrs. Freda	Kenyon, C.	Ungoed-Thomas, Sir Lynn
Craddock, George (Bradford, S.)	Lawson, G. M.	Wells, William (Walsall, N.)
Cronin, J. D.	Lindgren, G. S.	Wheeldon, W. E.
Davies, Stephen (Merthyr)	Mabon, Dr. J. Dickson	White, Mrs. Eirene (E. Flint)
Deer, G.	MacColl, J. E.	White, Henry (Derbyshire, N.E.)
Delargy, H. J.	McInnes, J.	Willey, Frederick
Dodds, N. N.	MacPherson, Malcolm (Stirling)	Williams, W. R. (Openshaw)
Donnelly, D. L.	Mahon, Simon	Willis, Eustace (Edinburgh, E.)
Dugdale, Rt. Hn. John (W. Brmwch)	Mallalieu, E. L. (Brigg)	Woof, R. E.
Ede, Rt. Hon. J. C.	Mellish, R. J.	Yates, V. (Ladywood)
Edwards, Robert (Bilston)	Mikardo, Ian	Younger, Rt. Hon. K.
Evans, Albert (Islington, S.W.)	Mitchison, C. R.
Evans, Stanley (Wednesbury)	Moody, A. S.	TELLERS FOR THE AYES:
Fernyhough, E.	Mulley, F. W.	Mr. J. Taylor and Mr. Simmons.
Fletcher, Eric	Neal, Harold (Bolsover)
NOES
Agnew, Cmdr. P. G.	Barber, Anthony	Black, C. W.
Aitken, W. T.	Barlow, Sir John	Body, R. F.
Arbuthnot, John	Barter, John	Bowen, E. R. (Cardigan)
Armstrong, C. W.	Baxter, Sir Beverley	Boyle, Sir Edward
Ashton, H.	Bell, Philip (Bolton, E.)	Buchan-Hepburn, Rt. Hon. P. G. T.
Baldock, Lt.-Cmdr. J. M.	Biggs-Davison, J. A.	Butler, Rt. Hn. R. A. (SaffronWalden)
Baldwin, A. E.	Bishop, F. P.	Channon, H.
Chichester-Clark, R.	Hughes-Young, M. H. C.	Partridge, E.
Clarke, Brig. Terence (Portsmth, W.)	Hutchison, Sir Ian Clark(E'b'gh, W.)	Pilkington, Capt. R. A.
Cordeaux, Lt.-Col. J. K.	Hyde, Montgomery	Pitman, I. J.
Corfield, Capt. F. V.	Hylton-Foster, Sir H. B. H.	Pitt, Miss E. M.
Craddock, Beresford (Spelthorne)	Irvine, Bryant Godman (Rye)	Pott, H. P.
Crouch, R. F.	Jenkins, Robert (Dulwich)	Powell, J. Enoch
Cunningham, Knox	Johnson, Dr. Donald (Carlisle)	Profumo, J. D.
Dance, J. C. G.	Johnson, Eric (Blackley)	Raikes, Sir Victor
Davies, Rt. Hon. Clement (Montgomery)	Joseph, Sir Keith	Rawlinson, Peter
Deedes, W. F.	Joynson-Hicks, Hon. Sir Lancelot	Redmayne, M.
Doughty, C. J. A.	Keegan, D.	Remnant, Hon. P.
Drayson, G. B.	Kerr, H. W.	Ridsdale, J. E.
du Cann, E. D. L.	Kershaw, J. A.	Rippon, A. G. F.
Duncan, Capt. J. A. L.	Kimball, M.	Robertson, Sir David
Elliot, Rt. Hon. W. E.	Kirk, P. M.	Rodgers, John (Sevenoaks)
Errington, Sir Eric	Lagden, G. W.	Roper, Sir Harold
Finlay, Graeme	Lambert, Hon. G.	Ropner, Col. Sir Leonard
Fisher, Nigel	Leavey, J. A.	Schofield, Lt.-Col. W.
Fletcher-Cooke, C.	Leburn, W. G.	Sharpies, R. C.
Fraser, Hon. Hugh (Stone)	Legge-Bourke, Maj. E. A. H.	Shepherd, William
Freeth, D. K.	Legh, Hon. Peter (Petersfield)	Simon, J. E. S. (Middlesbrough, W.)
Galbraith, Hon. T. G. D.	Linstead, Sir H. N.	Smithers, Peter (Winchester)
George, J. C. (Pollok)	Lloyd-George, Maj. Rt. Hon. G.	Steward, Harold (Stockport, S.)
Gibson-Watt, D.	Macdonald, Sir Peter	Stoddart-Scott, Col. M.
Godber, J. B.	McLaughlin, Mrs. P.	Studholme, H. C.
Gower, H. R.	Maclay, Rt. Hon. John	Summers, G. S. (Aylesbury)
Graham, Sir Fergus	Macpherson, Niall (Dumfries)	Sumner, W. D. M. (Orpington)
Grant, W. (Woodside)	Maddan, Martin	Taylor, Sir Charles (Eastbourne)
Green, A.	Maitland, Hon. Patrick (Lanark)	Teeling, W.
Gresham Cooke, R.	Manningham-Buller, Rt. Hn. Sir R.	Thompson, Kenneth (Walton)
Grimond, J.	Marlowe, A. A. H.	Thompson, Lt.-Cdr. R.(Croydon, S.)
Grimston, Hon. John (St. Albans)	Marples, A. E.	Thorneycroft, Rt. Hon. P.
Grosvenor, Lt.-Col. R. G.	Mathew, R.	Touche, Sir Cordon
Gurden, Harold	Maude, Angus	Vaughan-Morgan, J. K.
Hall, John (Wycombe)	Mawby, R. L.	Vosper, D. F.
Harris, Frederic (Croydon, N.W.)	Maydon, Lt.-Comdr. S. L. C.	Wade, D. W.
Harris, Reader (Heston)	Milligan, Rt. Hon. W. R.	Wakefield, Edward (Derbyshire, W.)
Harvey, Air Cdre. A. V. (Macclesfd)	Molson, A. H. E.	Walker-Smith, D. C.
Heald, Rt. Hon. Sir Lionel	Morrison, John (Salisbury)	Wall, Major Patrick
Heath, Rt. Hon. E. R. G.	Nairn, D. L. S.	Ward, Hon. George (Worcester)
Hill, Mrs. E. (Wythenshawe)	Neave, Airey	Ward, Dame Irene (Tynemouth)
Hill, John (S. Norfolk)	Nicolson, N. (B'n'm'th, E. & Chr'ch)	Waterhouse, Capt. Rt. Hon. C.
Hinchingbrooke, Viscount	Nield, Basil (Chester)	Whitelaw, W.S.I.(Penrith & Border)
Hirst, Geoffrey	Noble, Comdr. A. H. P.	Williams, Paul (Sunderland, S.)
Holland-Martin, C. J.	Nugent, G. R. H.	Wills, G. (Bridgwater)
Holt, A. F.	Oakshott, H. D.	Wilson, Geoffrey (Truro)
Hornsby-Smith, Miss M. P.	Orr, Capt. L. P. S.	Woollam, John Victor
Horobin, Sir Ian	Orr-Ewing, Charles Ian (Hendon, N.)	TELLERS FOR THE NOES:
Howard, John (Test)	Page, R. G.	Colonel J. H. Harrison and
Hughes Hallett, Vice-Admiral J.	Pannell, N. A. (Kirkdale)	Mr. Bryan.

Question put and agreed to.

Amendment made: In page 14, line 41, at end add: (2) The references in this section to any one person include references to any two or more persons being interconnected bodies corporate or carrying on business in partnership with each other.—[Mr. P. Thorneycroft.]

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