HC Deb 23 April 1964 vol 693 cc1673-8

(1) Where in proceedings under sections 20 or 22 of the Restrictive Trade Practices Act 1956, the Restrictive Practices Court has declared that a restriction relating to any goods is not contrary to the public interest, any person or association who was represented in those proceedings and who has duly given notice under section 6 of this Act in respect of goods of that description may apply to the Court in accordance with this section.

(2) On an application made under this section the Court may make an order directing that goods of a description to which a restriction such as is referred to in the last foregoing subsection of this section relates shall be exempted goods for the purposes of this Act if, having regard to its judgment in the proceedings under sections 20 and 22 of the said Act of 1956 it appears to the Court that in default of a system of maintained minimum resale prices applicable to goods of that description—

  1. (a) the continued operation of a restriction which was found by the Court to be not contrary to the public interest would become impracticable or would no longer produce the results by reason of which the said restriction was held by the Court to be not contrary to the public interest; or
  2. (b) the continued operation of any other restriction not materially different from such a restriction and contained in an agreement which is registered under Part I of the said Act of 1956 and to which a person making the application is a party, would become impracticable or would no longer produce such results
unless in any such case the Registrar adduces prima facie evidence of a material change in the relevant circumstances since the previous decision of the Court.

(3) On any application made under this section any person or association who has duly given notice under section 6 of this Act in respect of goods of the same description as the goods referred to in the application shall be entitled to be represented before the Court.

(4) If, on an application made under this section, the Court refuses to make an order direct- ing that goods of any description referred to in the application shall be exempted goods, no further application may he made under this section in respect of those goods on the basis of the proceedings under sections 20 or 22 of the said Act of 1956 on which the application was based but, subject thereto, goods of that description shall not thereafter, for the purposes of this Act, be treated in any way differently from other goods in respect of which notice has been given under section 6 of this Act and in respect of which no application under this section has been made.—[Mr. Turton]

Brought up, and read the First time.

Mr. Turton

I beg to move, That the Clause be read a Second time.

I apologise to the Committee for raising at this hour a complex and substantial point dealing with those who have already been adjudged by the Restrictive Practices Court to have systems that are in the public interest. This clearly presents a problem that we must meet in some way. My new Clause proposes an expedited procedure for those systems provided that there has been, in the view of the Registrar, no material change in the relevant circumstances since the previous decision of the Court. In other words, it is putting them in the same position in that respect as those who, under Clause 7, will later have been adjudged to have systems that are in the public interest. They cannot be retried unless the Registrar can adduce evidence that there has been a material change.

If the Registrar finds that there has been a material change, they will have to go before the Court under exactly the same procedure as any other manufacturer or system under the Bill. That is dealt with in subsection (4) of the new Clause. Subsection (3) gives those who are interested in similar products the same rights as they have under Clause 6, so that they can be represented before the Coin during the proceedings.

This is an important Clause, particularly for the three industries that have already been before the Restrictive Practices Court: the net book agreement, cement and the Black nuts and bolts agreement. The net book agreement, which was discussed earlier on my Amendment to Clause 5, cost the respondents £35,000 to fight and win their case before the Court, and it took them three years. Clearly, it would be undue hardship and financial burden to ask those who have just been through the Court, the judgment having been reported only in 1962, to go to similar expense to prove exactly the same facts.

When we were discussing the gateways in Clause 5, I understood my right hon. Friend to say that in his view the net book agreement would probably succeed under gateways (a) and (b) of that Clause. He pointed out that they had been adjudged not to succeed under gateway (c), and he offered on Report to insert a new gateway dealing with price. Price was, of course, the major reason why net book agreements succeeded when they came before the Court in 1962.

Clearly it would be a hardship on them to have to fight through these gateways so shortly after they had succeeded in fighting their case before the Court. There is another consideration. If we adopt expedited procedure for the first application there will be nothing to prevent the Court using Clause 7 if there is a material change later. In other words, the three who have been through the Court will not be in any better position than any other successful applicant to the Court because, once material change has been proved, they will be in exactly the same position as before.

I appreciate that there is the difficulty that we have not yet seen the fifth gateway my right hon. Friend has promised to table but, assuming that it will be as he explained it—one on price that will meet the point of the more expensive books in the net book agreement judgment—I feel he could even now accept this Clause to give expedited procedure.

It might well be that, in view of the fact that he has not yet drafted the new fifth gateway, he may feel that this procedure is a matter he could pay attention to at a later stage and not tonight, but I hope that he will make it clear that he accepts that there is an obligation on the Committee to make some special treatment for those who so recently succeeded before the Court on the question of what is or is not in the public interest.

I suggest that this Clause would meet the situation without making any exceptional treatment for those who have gone through the Court compared with others who have not had to prove their case before the Court. I would rather it were done this way than in the way the Attorney-General hinted at on Clause 8, when he gave the idea that there might be some provision for costs in this case.

Under this expedited procedure the cost to the two parties—the Registrar and the trade concerned—would be less in money in fighting the case, and that would be more in the public interest than if the longer procedure of the Bill as drafted is taken, when they would spend far more. I hope my right hon. Friend will accept the Clause or make it clear that, if it is withdrawn now, he will look into the matter and accept the principle on Report stage.

Mr. Geoffey Stevens (Portsmouth, Langstone)

I should like briefly but strongly to support what my right hon. Friend has said. He talked about the hardship which certain trades would be caused if they had to go through the hoop once again. He called it hardship; it would be absolutely monstrous if these trades, having proved their cases before the Court on one occasion, were asked to do so again. The process has already cost them an enormous sum of money, and I see no reason why they should be caused to be at risk of losing such sums again.

In the Second Reading debate my right hon. Friend the Minister said that the Court would no doubt take into consideration the fact that these trades had previously proved their cases. That is not nearly sufficient a safeguard. I recall that my right hon. Friend also said that the House should not try to dictate what the Restrictive Practices Court should decide. But surely the House makes the laws. We decide what the courts are to determine, and they then interpret the laws. If we say that the Court is not to examine these cases it is not for the Court to do so. I should have thought that it was clear that the three industries to which my right hon. Friend referred constituted a special case, and I hope that my right hon. Friend the Secretary of State will be able to go at least as far as my right hon. Friend has asked.

Mr. Heath

As my right hon. Friend has said, this is a long and very complex new Clause. He has made a very succinct comment upon it. I assure him that I recognise—as I did in the Second Reading debate—the position in the three cases to which he referred, and which we have discussed on previous occasions, which have been before the Court and have been exempted, and which concern, directly or indirectly, resale price maintenance. I am anxious to find a way of dealing with them.

I am not entirely convinced at the moment that the new Clause would deal with all the problems that would arise. My right hon. Friend said that the object was to put these trades into the same position as any other trade under Clause 7. This is a complicated legal matter, and I have doubts whether it puts them into the same position under that Clause. I do not think that my hon. Friend the Member for Portsmouth, Langstorte (Mr. Stevens) suggested that they should be permanently exempted. Therefore, we have the problem how the review can take place, and how we can take notice of a change in material circumstances.

There are one or two other difficulties about the Clause as it is at present worded. It would not be confined to those cases where proceedings had already been taken under the 1956 Act; it would also apply where an agreement went before the Court after the Bill was passed.

It would allow the law of exemption to follow, under the Bill, for individual resale price maintenance, merely because a collective r.p.m. agreement had 41 been upheld under the 1956 Act. Apart from those considerations the effect of the Clause would be that even if the collective agreement were abandoned by the parties individual resale price maintenance would remain lawful. This would be so even if the Court had considered resale price maintenance only as incidental to the collective agreement.

Yesterday, when we were discussing the matter, I pointed out that in all three cases r.p.m. had been justified as being necessary to the collective agreement. But if the collective agreement disappeared, under the Clause individual r.p.m. would remain lawful.

12 m.

The other point, which I have already mentioned, is the question of the power of the Court to review the exemption order in proceedings under Clause 7. The fundamental difficulty arises because under the 1956 Act there has been a general gateway and under this Bill we have got the particular gateways, and so one of the problems we have to overcome in the review procedure is to have regard for these circumstances. That is another point to which I should like to give great attention. My right hon. Friend will appreciate that we have been examining this with great care. It is a very complicated legal matter and the inter-relationship of the 1956 Act and this Bill is a very complicated one.

At the same time, I give him a reassurance that I want to find a way of dealing with these particular cases and the other element he has mentioned, which is the new gateway which I discussed lest night, and about which I gave an undertaking. If my right hon. Friend will withdraw his proposed Clause and give us time between now and Report stage to examine in detail these proposals, and see if there are ways of getting around the difficulties, I would undertake to do that. I have noted the remarks about the Attorney's suggestions on costs. I hope that by the time we get to Report stage we will have found an effective way of meeting these points.

Mr. Turton

After that undertaking from my right hon. Friend, I am very pleased to beg to ask leave to withdraw the Motion

Motion and Clause, by leave, withdrawn.