Commons Sitting of 6 July 1964

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  MINISTRY OF HEALTH

    Venereal Disease
    Commander Keransasked the Minister of Health whether he will issue instructions that venereal disease be compulsorily reportable.
    The Joint Parliamentary Secretary to the Ministry of Health (Mr. Bernard Braine): No, Sir. I am sure that this would hinder progress rather than help it.
    Commander Kerans: Is my hon. Friend aware that there are many diseases sexually transmitted which do not come under the legal definition of venereal disease? In view of the fairly large and substantial increase amongst young persons, surely the Minister will reconsider his attitude?
    Mr. Braine: No, Sir. I agree with my hon. and gallant Friend that the increase in certain diseases since 1954 is a matter
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    of serious concern, but compulsory notification of venereal disease would be of little use, unless treatment of the patient, notification of his consorts and examination and treatment of the consorts were also made compulsory. Only in the most exceptional circumstances would such extensive compulsion be acceptable in this country, even if it were likely to be effective.

    Chiropodists
    Mr. Worsleyasked the Minister of Health what steps he is taking to ensure that no chiropodist at present paid out of public funds is prevented by reason of not being registered, from continuing to work until sufficient registered chiropodists are available.
    Mr. Braine: The Regulations which my right hon. Friend laid before the House on 29th June do not prevent chiropodists who are not qualified for registration from continuing in posts where they are properly employed.
    Mr. Worsley: Can my hon. Friend confirm that these Regulations will cover the case of the two ladies about whom I have written to him, who are working as chiropodists in Keighley and doing much valuable work?
    Mr. Braine: Yes, Sir. I know my hon. Friend has been concerned about this. I can confirm that the new Regulations do not affect the employment of these two ladies. Therefore, their employment is in fact protected.
    Mr. K. Robinson: Is the Joint Parliamentary Secretary aware that some local authorities have been employing chiropodists who are neither registered nor qualified? Is it a fact that the new Regulations will at any rate make this practice no longer possible as to new entrants to the Service?
    Mr. Braine: Yes; I understand that that is the position as regards new entrants to the Service. The new Regulations also make registration a requirement for employment in local authority welfare services and services provided by voluntary organisations as agents for local health and welfare authorities only for persons appointed after 29th June, 1964. In all other cases of existing employment the position is safeguarded.
    Mrs. Slater: Will the hon. Gentleman watch this matter very closely, because it is essential that a qualified person, or someone who thoroughly understands the job, should be responsible for dealing with people's feet, especially the feet of old people? So much depends upon the right treatment. There are all kinds of voluntary organisations employing people who have merely taken a postal course and are not qualified at all.
    Mr. Braine: I entirely agree with the hon. Lady. The whole purpose of these Regulations is to ensure that proper standards are employed. My hon. Friend in raising this question was concerned with people who have been providing good service over a number of years to a local authority, and we were anxious in this particular case—I am sure that the House will feel that this is right—to ensure that their employment continued.

    Invalid Vehicles
    Mr. Worsleyasked the Minister of Health whether he will now amend the regulations so as to allow the carrying of a passenger in such invalid tricycles as have room for them.
    Mr. Probertasked the Minister of Health if he will now give approval for the provision of cars for the industrial-disabled paraplegics.
    Mr. Whitlockasked the Minister of Health if he will make a further statement about the provision of two-seater cars for civilian disabled persons in lieu
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    of invalid tricycles in special circumstances.
    The Minister of Health (Mr. Anthony Barber): I am advised that the carriage of a passenger in an invalid tricycle would be dangerous. I hope very soon to have completed a review of the whole question of invalid vehicles.
    Mr. Worsley: Can my right hon. Friend give an indication of when he will have completed this review and, in particular, whether he will make a statement before the House rises for the Summer Recess? Is he aware that many people feel that these invalid tricycles could be used by two people, particularly for married couples who are both incapacitated, and that this would be of immense value?
    Mr. Barber: In answer to the second part of my hon. Friend's supplementary question, of course I see the great social advantage of being able to carry a passenger in an invalid tricycle, but I am told that accidents have occurred when a passenger has been carried and that in some cases this has seemed to have been the result of the vehicle having become unstable.
    In reply to the first part, I certainly hope that I will have completed my review and be in a position to inform the House before we rise for the Summer Recess. I would not like to make any firm promise, because this is a much more complex matter than I had at first appreciated. It is not simply a matter of whether one provides motor cars instead of tricycles, for it involves a number of medical, social and financial aspects. However, I hope to be in a position to announce my conclusion to the House before the Summer Recess.
    Mr. Probert: I welcome the Minister's statement about his intention to make an announcement before we rise for the Recess. Is he aware that hon. Members who represent constituencies where the incidence of disablement resulting from industrial injuries, particularly mining disablement, is high are sick and tired of this proscrastination on the part of the Government? Does the right hon. Gentleman not agree that the continued treatment of the industrially disabled—the cruel discrimination that takes place between those who have

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    been injured through industrial accidents and are severely disabled and those who receive their injuries in another way—requires action on the part of the Government?
    Mr. Barber: I can assure the hon. Gentleman that there is no question of procrastination here. I am trying to reach the best conclusion I can. As to his remarks about discrimination, with due respect to the hon. Member, if I were to do as he suggests in his Question—and I have, of course, given serious thought to his suggestion—that would be discrimination in favour of industrially disabled paraplegics over other people who are equally disabled and for whom provision is made within the National Health Service; and I do not think that that would be right.
    Mr. Whitlock: Do not the difficulties mentioned by the right hon. Gentleman apply to all disabled people, and is it not illogical that the war disabled should have two-seater cars while the industrially disabled should not?
    Mr. Barber: That matter has been considered on many occasions by the House and, as the hon. Gentleman knows, it has generally been the view of the House that some preference should be given to war pensioners.
    Mr. Probert: Does not the Minister realise that by refusing to agree that there has been procrastination over this matter he is refusing to accept that my hon. Friends and I have for years been urging that something should be done but have received no action from the Ministry? If that is not procrastination, what is?

    Mental Health Services, Middlesex
    Mr. Hollandasked the Minister of Health what arrangements are being made to secure that facilities for training the staff of training centres for the mentally sub-normal are available in Middlesex after 1st April, 1965.
    Mr. Braine: The county council is arranging for training for the staff of junior training centres to be carried on by the Chiswick Polytechnic, whose first course will start in September.
    Mr. Holland: Can my hon. Friend say precisely what arrangements are in
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    hand for the new London boroughs in the Middlesex area to carry on this valuable training for the staff of the junior training centres when they take over next April? Can he also say what arrangements there may be for providing courses for the staff of the adult training centres?
    Mr. Braine: The course at Chiswick Polytechnic will be open to students from any authority. I understand that a number of places for the first course will be reserved for Middlesex students. On the specific Question asked by my hon. Friend, we expect that the nine London boroughs in the Middlesex area will agree to sponsor these students after April 1965. In addition to courses for staff for adult training centres, the National Association for Mental Health also provides four full-time courses for teachers of mentally handicapped children, for which students are accepted from all over the United Kingdom and overseas.
    Mr. Hollandasked the Minister of Health what special features have characterised the services for the mentally disordered provided in recent years by Middlesex County Council.
    Mr. Braine: Two particularly noteworthy features are the development of industrial training for mentally subnormal adults including units within ordinary factories, and a small residential hostel for patients discharged from mental hospital which is run by the residents themselves and was the first such hostel to be opened anywhere in the country.
    Mr. Holland: Would the Joint Parliamentary Secretary not agree that Middlesex County Council has an outstanding record in mental health services, and can he give an assurance that the new London boroughs, when they take over from the Middlesex County Council next April, will continue and develop these services?
    Mr. Braine: Yes, Sir, and I entirely agree with my hon. Friend. [HON. MEMBERS: "Oh."] Hon. Members opposite have no need to say "Oh" because I have always believed in giving credit where it is due. Just as my own county council has a splendid record

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    in the welfare sector, so it is true to say that Middlesex County Council has an excellent record in the provision of mental health services.
    On the second point raised by my hon. Friend, I can assure him that we are confident that the community mental health services now provided by Middlesex County Council will be developed still further by the London boroughs which are due to succeed the County Council in April, 1965.

    Health and Hygiene (Washing Facilities)
    Mr. Brockwayasked the Minister of Health if he will prepare legislation to make the provision of free washing facilities compulsory in public conveniences and in toilets in railway stations, work places, restaurants, public houses, places of entertainment, hotels and houses in multiple occupation.
    Mr. Barber: There are already detailed requirements about washing facilities in most of the places mentioned by the hon. Member. They vary according to the particular type of place, and I do not think that general legislation would be appropriate.
    Mr. Brockway: Does the Minister remember that at the time of the typhoid epidemic in Aberdeen, which is an unusually clean town, it was said that one-third of the public conveniences were without washing facilities? Are these facilities not as important for health as factory legislation is for safeguarding against accident? Will the right hon. Gentleman at least consult with his right hon. Friends the Minister of Transport and the Minister of Housing and Local Government to see that in their Departments insistence is placed on washing facilities being provided?
    Mr. Barber: I expect that the hon. Gentleman will already know that local authorities may provide washing facilities in public conveniences and that they are not obliged to charge for them, although I appreciate that some do. My right hon. Friend the Minister of Housing and Local Government, in replying to a Question asked by the hon. Member for Lanark (Mrs. Hart) on 9th June, undertook to consider issuing a circular to local authorities about the provision of
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    free washing facilities in public conveniences.
    Mr. Swingler: Why does not the Minister of Health consider that general legislation on this subject would be appropriate? Is it not desirable, from a health point of view—and in view of the experience of happenings like the Aberdeen typhoid epidemic—that washing facilities of this type should be provided universally? Is it not advisable, if their provision cannot be obtained by other means, that it should be done by general legislation?
    Mr. Barber: The reason why I do not think that general legislation would be appropriate is because requirements differ, for example as to the persons for whom the facilities should be provided. [HON. MEMBERS: "Shame."] I refer to workpeople, residents or the general public. That is why there are regulations relating to each of the types of establishment referred to in the Question. It is better to deal with it in this way, although I am not saying that it may not be necessary to improve and extend the regulations; but general legislation would not be the best way of achieving what the hon. Gentleman and I both have in mind.
    Mr. K. Robinson: Does not the Minister appreciate that the events of recent months have suggested that our standards of food cleanliness are really not as high as they should be? Does he not think that perhaps the time has come for a general review of food hygiene regulations in order to see whether or not they should be rather more stringent and rather more stringently applied than at present?
    Mr. Barber: The hon. Gentleman knows, because I have announced it in the House, that I am reviewing the regulations concerning hygiene in markets and certain other places. As I understand it, it would in any event have been necessary, as a result of that review—and the regulations are now with the local authorities concerned for comment—to consider amendments to the general regulations. In doing that, of course, I am quite willing to—and, indeed, I have already decided that we should—take into account the events of recent months, and if there is anything we can learn, or any improvements we ought to make, we shall make them.

    Sale of Medicines (Pharmacists)
    Mr. Pounderasked the Minister of Health if he will introduce legislation to restrict the sales of all medicines, including proprietary brands of medicinal products, to pharmacists only.
    Mr. Barber: The current review of medicines legislation has not so far suggested that so comprehensive a restriction would be in the public interest.
    Mr. Pounder: May I thank my right hon. Friend for that Answer? Is he not aware that there must always be a qualified pharmacist at all times on the premises of any dispensing pharmacy even if he is selling only aspirins or cough mixture, whereas at the same time a supermarket can employ a nonqualified teen-age assistant to sell the same articles? Is he furthermore aware that when customers go into a supermarket for aspirins or something of that kind it may not necessarily be the article they want? The qualified pharmacist can offer guidance whereas the unqualified assistant cannot always do so.
    Mr. Barber: I see the point made by my hon. Friend. One of the matters being considered in the review is whether the existing restrictions on the sale or supply of medicine need extending at all, but, as far as I understand, the Pharmaceutical Society itself is not pressing for a complete monopoly.

    Elderly Persons (Accommodation)
    Mr. Boxasked the Minister of Health what provision is being made in Cardiff for accommodating elderly people who need residential care.
    Mr. Braine: Cardiff County Borough Council provides 427 places in 12 homes. Thirty-five places are provided by voluntary organisations acting as agents of the authority. The authority has two new homes with 83 places under construction and a further nine with 362 places are planned by 1974.
    Mr. Box: Is my hon. Friend aware that his reply will be widely welcomed in Cardiff, but can he tell me how much of this accommodation will be provided from former public assistance institutions?
    Mr. Braine: I am very glad to tell my hon. Friend that the answer to that
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    is "None". Cardiff County Borough Council has the best record in Wales in the construction of purpose-built homes. I am very glad to say that the council vacated its last former public assistance accommodation early in 1961. Again I should like to pay tribute to a progressive authority.
    Mr. G. Thomas: Is the hon. Gentleman aware that his tribute to the Labour Council of Cardiff will be very deeply appreciated, and used? Despite the splendid record of the local authority, can the hon. Gentleman say how long it will be before we can eliminate the waiting list of those who desire residential care?
    Mr. Braine: I seem to detect a partisan note creeping into the hon. Member's observations. In this particular field we see no distinction. There are first-rate authorities throughout the country, some under Socialist administration and some under Conservative administration. The important thing is that in recent years resources have become increasingly available from the Government in order to allow the expansion of local authority services. As for the latter point in the supplementary question, I notice that this subject is very near to the hon. Member's heart and that he has secured the Adjournment debate tonight. I suggest that we pursue the argument there.
    Mr. Thomas: On a point of order. I am raising an entirely different matter tonight. Would you care, Mr. Speaker, to give me an opportunity to follow up the supplementary question.
    Mr. Speaker: Not now.

    Water Supplies (Fluoridation)
    Mr. John Hallasked the Minister of Health why he disregarded the researches, of which he was informed, of Dr. Ionel Rapaport into the relationship between the concentration of fluoride in the water supply and the proportion of mongol births.
    Mr. Barber: I would refer my hon. Friend to the Answer my hon. Friend gave to my hon. and gallant Friend the Member for Arundel and Shoreham (Captain Kerby) on 24th June. I am sending him a copy of my chief medical officer's circular letter mentioned in it.
    Mr. Hall: Whilst I am not aware of the content of the letter, may I ask whether it is not rather odd that the Ministry, especially as in detailed evidence in Circular 105, disregards completely the overwhelming evidence in favour of the fact that an increase in mongol births is directly associated with an increase in fluoride in water and that an amount up to one part per million recommended by the Ministry is sufficient in itself apparently to have some effect? Although the number of such births is comparatively small, is it not entirely wrong that a local authority should be encouraged to put fluoride in the water supply even if one mother only is affected thereby?
    Mr. Barber: I disagree entirely with what my hon. Friend has said. I have considered this matter carefully, and the advice I have been given is that there is no basis whatever for any suggestion that fluoride might even cause one mother to give birth to one mongol child. The defects in the report of the work of Dr. Rapaport are fully explained in the document which I am sending to my hon. Friend.
    Mr. Denzil Freeth: Is it or is it not a fact that Dr. Rapaport's statistical evidence and conclusions are not accepted by any reputable authority, and that to the best knowledge and belief of my right hon. Friend no harm has come to anybody by drinking water containing up to one part per million of fluoride, whether artificially or naturally present?
    Mr. Barber: There is certainly no evidence whatsoever of any harmful effect from water with a fluoride content of the level which is adopted in fluoridation. A carefully planned investigation by Dr. Berry, in this country, in which virtually all mongols were traced and control areas were included, shows that there is no connection between the concentration of fluoride in water supply and the proportion of mongol births.
    Mr. Rankin: Would the right hon. Gentleman not agree that it would be absurd if he were to recommend local authorities to add Epsom Salts to all our drinking water because some people suffer from constipation? Does he not realise that the parallel with the addition of fluoride is exact? Surely all of us do
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    not need to drink fluoridated water just because it is of use to some children.
    Mr. Barber: I do not agree with the hon. Member. Epsom Salts may be appropriate in his case, but I do not need it.

  HOSPITALS

    Maternity Beds, Lowestoft
    Mr. Priorasked the Minister of Health whether, in view of the recent pronouncement of the East Anglian Regional Hospital Board on the subject of the provision of additional maternity beds at Lowestoft, he is in a position to give a firm date for the new maternity ward to be provided at Great Yarmouth with its consequent improvement to the position at Lowestoft Hospital.
    Mr. Braine: Not yet, by the Board is treating it as a matter of urgency.
    Mr. Prior: Will my hon. Friend do everything he can in his Department to help the Board get on with this project quickly? It is very badly required. Is my hon. Friend aware of the very serious position on the East Coast at the moment in regard to maternity beds?
    Mr. Braine: Yes, Sir. Both my right hon. Friend and I are well aware of the local concern in my hon. Friend's constituency and next door in Great Yarmouth. The project will be a major one and time is needed for the planning work before the Board can commit itself to a date.

    Hospital Management
    Mr. Barterasked the Minister of Health what machinery he has for encouraging improved methods of use of resources by hospitals.
    Mr. Braine: This year £145,000 is being provided for research into hospital management. Suggestions for improvements in efficiency are made in a variety of ways, and my right hon. Friend has the advice of an Advisory Committee for Management Efficiency. At the present time 155 work study officers are employed in the hospital service.
    Mr. Barter: Can my hon. Friend say to what extent regional hospital boards

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    and hospital management committees have been advised that they may employ specialist consultancy services externally to their hospitals for payment out of revenue allocation, whether the sum of £145,000 to which he referred is additional to normal revenue allocations, and whether the additional money is being provided for local clinical research?
    Mr. Braine: I can assure my hon. Friend that my right hon. Friend is prepared to consider any such proposals put to him by regional hospital boards. The sum of £145,000 is in addition to the money being provided by hospital authorities from their normal revenue allocations. My right hon. Friend is also providing £445,000 this year for local clinical research.
    Mr. A. Lewis: When the Joint Parliamentary Secretary says that additional money is being provided to give hospitals a chance to use their resources to better advantage, could it be that they will use some of it to deal with the matters outlined in Questions 69 and 70; namely, to see that ambulances are available for patients who really need them?
    Mr. Braine: That seems to be an entirely different question and I think that we must wait until we reach the Questions to which the hon. Gentleman refers.

    New Hospitals (County Durham)
    Mr. Shinwellasked the Minister of Health what was the number of new hospitals built in the County of Durham since January 1952.
    Mr. Barber: None, but over £5½ million has been spent on improvements to hospitals in the county. Site work on a new district general hospital at North Tees has also begun, and work on substantially remodelled hospitals at Shotley Bridge and Darlington is in progress.
    Mr. Shinwell: Is the Minister aware that since 1952—during the course of 12 years—we have had six Conservative Ministers of Health, none of whom has been able to produce a hospital in the County of Durham? Is he also aware that his predecessor, in reply to a Question I put about the need for a hospital
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    in the new town of Peterlee, a town with a rapidly-growing population and a very clamant need for hospital accommodation, informed me that a hospital was being extended in Stockton, 20 miles away? Is that position regarded as satisfactory?
    Mr. Barber: I have pointed out that already £5½ million have been spent on improvements to the hospitals in the county. The North Tees General Hospital will be a completely new hospital and, as I said, the Shotley Bridge Hospital and the Darlington General Hospital will be substantially remodelled, and major schemes are now in progress at both. It is planned that the West Hartlepool General Hospital, the Sunderland General Hospital, the South Shields General Hospital, the Queen Elizabeth Hospital, Gateshead, and Bishop Auckland General Hospital will all be substantially remodelled, and major schemes for all are planned to start in the next five years.
    Mr. Shinwell: All those extensions are remote from the area with which I am primarily concerned, which has a rapidly-growing population, as I have said. It is at the very centre of a still prosperous mining industry, where, unfortunately, many accidents occur. Is not this a bad situation? Does not the right hon. Gentleman think that even in the limited time at his disposal he might be able to initiate something?
    Mr. Barber: There is no difference between hon. Members on the two sides of the Chamber as to the size of the hospital programme. The question at issue is really one of priorities, and I should have thought from what I have seen of what is being done in the area that we had the priorities right. I must say to the right hon. Gentleman that last year the Labour Party scoffed when we said that we would start one new or substantially remodelled hospital every 19 days—but we did it. And this year we shall start one every ten days.
    Dame Irene Ward: Is my right hon. Friend aware that our hospital services on the North-East Coast were, for a variety of reasons, very behindhand after the war, and that when the capital allocation was made at the time of the establishment of the National Health

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    Act, no additional capital allocations were made to the North-East Coast, and it was left to the Conservative Government to put up the capital allocation, which those concerned there were glad to receive?
    Mr. Barber: I am very grateful to my hon. Friend for having made that point which, I am bound to say, had not occurred to me.

    Treatment of Burns, Newcastle-upon-Tyne
    Mr. Montgomeryasked the Minister of Health what provision is being made for a regional centre in the Newcastle-upon-Tyne area, for the treatment of burns.
    Mr. Braine: A burns unit of 40 beds is already in existence at the Hospital for Sick Children, Newcastle. Plastic surgery units which also deal with burns are in existence at the Newcastle General Hospital and the Royal Victoria Infirmary. Further provision will be made in the plans for the main Newcastle hospitals.
    Mr. Montgomery: But is my hon. Friend aware that badly-burnt patients need to be cubicle-ised, and that there is at the moment only one burn cubicle available at the plastic unit at Newcastle? Can he say what other plans there are for units to deal with badly-burnt patients in the North?
    Mr. Braine: It is not envisaged that there will be a single burns centre for each large region. The Standing Medical Advisory Committee recommendation was that certain accident centres which would normally be provided at most district general hospitals should be designated as burns centres. The answer to the second part of my hon. Friend's supplementary question is that the regional boards also plan to provide burns centres at Middlesbrough and Carlisle, and possibly at Sunderland.

    Croydon General Hospital
    Sir R. Thompsonasked the Minister of Health what progress has been made in the provision of improved casualty facilities at the Croydon General Hospital; and if he will make a statement.
    Mr. Braine: The regional board has now approved a scheme to provide an additional treatment cubicle, improvements to the waiting space and entrance, new partitions to the cubicles, complete redecoration of the department, and additional equipment.
    Sir R. Thompson: While thanking my hon. Friend for that helpful reply, may I ask whether he can say anything about the staffing services for this hospital? Would he, in conjunction with the regional hospital board, provide for a rather more efficient service for casualties, particularly at weekends, than we have been able to have in the past?
    Mr. Braine: I cannot, without notice, say anything about the staffing position. I am told that the board is satisfied that major changes are not practicable; and that its intention is still to move the casualty department to the Mayday Hospital, elsewhere in Croydon. Perhaps I should say that the improvements I mentioned should be completed by September of this year.

    Houses (Standards)
    Mr. Boydenasked the Minister of Health how many houses owned by the hospital authorities do not conform to the standards now prescribed for a local authority house.
    Mr. Braine: Such standards relate to the construction of new local authority houses. The construction of hospital houses matches these standards.
    Mr. Boyden: The Joint Parliamentary Secretary knows that there are a good many hospital houses that are not really satisfactory, and should be brought up to date. Will he do something about this by circularising the boards to see that standards are more in conformity with modern trends?
    Mr. Braine: My right hon. Friend has already done something about it. For existing hospitals, he has asked boards to conform within a reasonable time with the standards set out in the Housing Act.

    Vacant Wards
    Mr. Boydenasked the Minister of Health how many hospital wards are at present standing empty; and for what reasons.
    Mr. Braine: I regret that this information is not available. Wards can be temporarily out of use for a variety of reasons, including redecoration, quarantine, and staff illness.
    Mr. Boyden: Can they not also be out of use because there are not enough nurses available or money available sometimes to open new wards—because the scheme is postponed for money reasons? Does he not think that it would be a good idea to call for returns about vacant wards, so that the public may know what is going on in the hospital service?
    Mr. Braine: The hon. Gentleman is not only behind in this respect as he was before, but completely wrong. Hospital nursing and midwifery staffs are now at record levels. The point is that statistics by wards have never been collected, for the obvious reason that there can be many kinds and sizes of wards. I should have thought that the hon. Gentleman would have been aware that hospital statistical returns all give a total number of staffed beds available, irrespective of actual use. The information that the hon. Member requests could be obtained only by special census, and neither my right hon. Friend nor I consider that the work involved would justify it.
    Mr. K. Robinson: Is it not the fact that the official returns to the Department used to include in the figure for staffed beds the beds that were unavailable through lack of staff, and that this figure is no longer given? If so, why?
    Mr. Braine: If I heard him aright, the hon. Gentleman has referred to beds, in which case he is quite correct, but the question refers to wards—[Interruption.] No, the hon. Gentlemen is on a perfectly fair point, but it is a different point. The hon. Member for Bishop Auckland (Mr. Boyden) referred to a statistic that would be utterly and completely worthless.
    Mr. Boyden: On a point of order. The Parliamentary Secretary has accused me of not being up to date. May I say that, in all fairness, he should recollect that I raised this Question three years ago?
    Mr. Speaker: I do not observe a point of order.

    Hospital Facilities, Redditch
    Mr. Danceasked the Minister of Health what planning and what consultations have begun to ensure that the new town of Redditch will have adequate hospital facilities; and whether he will make a statement.
    Mr. Braine: The regional hospital board has already been in touch with the newly appointed chairman of the new town corporation and it has been agreed that the provision of hospital services for this area will be discussed as soon as the corporation is ready to do so.
    Mr. Dance: Can my right hon. Friend give me any information on when these discussions are likely to take place? Can he also give a positive assurance that the movement of population within my constituency will be taken into account when hospital planning for the future is thought about?
    Mr. Braine: Yes, Sir. I understand that discussions will be arranged as soon as the key staff of the new corporation have been appointed. The chairman was officially appointed only on 1st June. I assure my hon. Friend that the regional hospital board has taken note of the information so far available about the projected movement of population into Redditch and will keep the hospital development plans for this and the surrounding areas constantly under review.
    Mr. Shinwell: If this new town can get a new hospital, why cannot I?
    Hon. Members: Answer.
    Mr. Braine: I am sorely tempted to do so.

    Amenity Beds
    Mr. John Hallasked the Minister of Health what steps he is taking to increase the number of hospital amenity beds.
    Mr. Barber: This is a matter initially for hospital authorities, but I am always willing to consider their proposals.
    Mr. Hall: Would my right hon. Friend not agree that there are a number of patients whose recovery would be hastened if they were able to obtain an amenity bed? Would he not also agree that because of the tremendous shortage

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    of these beds, such patients are often forced to obtain private beds at considerable cost? Will not he do something to make an increasing number of amenity beds available, especially in the big teaching hospitals?
    Mr. Barber: The present practice, which I think is right, is to provide amenity beds to meet the demand where this is possible without detriment to the number of beds in single rooms or small wards which are normally required by patients on medical grounds. Wards in new hospitals planned in accordance with the Hospital Building Notes will have an adequate provision of single rooms and small wards to permit the designation of amenity beds.

    Dunston Hill Hospital, Gateshead
    Mr. Randallasked the Minister of Health what was the ratio of admissions from outside the area of the Gateshead and District Hospital Management Committee to the total figure of admissions to the Dunston Hill Hospital during 1963; and to what extent the figure of outside admissions was taken into account when assessing the bed requirements of the Gateshead Group and its effect upon the problem of accommodation for geriatrics.
    Mr. Braine: Thirty-seven per cent. Future bed requirements are based on the expected needs of the area to be served, and not on current admissions to individual hospitals.
    Mr. Randall: Is the Parliamentary Secretary aware that during the last 12 months in the Gateshead group of hospitals the waiting lists have swollen by one-third and waiting periods are something like 2 to 12 months and more? In any case, this does not take account of the time spent in waiting to see the consultant. Would the hon. Gentleman not agree that the admissions from outside the Gateshead Group are aggravating the situation? Can he tell me what action is being taken to bring about a decrease in the waiting lists?
    Mr. Braine: There are really two points here. The first is that at Dunston Hill war pensioners have a first call on the service and it is also a regional neurosurgical rehabilitation unit. Some beds are used for gynaecological and ortho-
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    paedic cases from the adjacent South Shields Hospital Management Committee. It is thus serving a larger area. On the second point relating to waiting lists, I should like notice of the question. May I look into the matter and write to the hon. Gentleman?

    Nurses
    Mr. Lubbockasked the Minister of Health what is the policy of Her Majesty's Government concerning the establishment of a grade of senior enrolled nurse.
    Mr. Braine: My right hon. Friend is taking steps to establish this new grade which we regard as an important advance. My right hon. Friend the Secretary of State is taking similar action in Scotland.
    Mr. Lubbock: Is the hon. Gentleman aware that when the Minister made the announcement to the State-enrolled nurses on 21st April many of them expected action in the near future? Could the hon. Gentleman give some indication of when this grade will be created? Could he also say what will be the qualifications for entry into the senior grade?
    Mr. Braine: I cannot give a date at the moment. Before a date can be announced, advice has to be sent to hospital authorities. A memorandum is being sent shortly asking them to revise establishments with the object of designating suitable posts in wards and departments. I can understand the impatience of the hon. Gentleman to get things moving, but I am sure there will be a general welcome to this further recognition of the place of enrolled nurses in the hospital service and the new opportunity for promotion which it will give.
    Mr. Lubbock: Can the hon. Gentle-man answer my question about the qualifications for the senior grade?
    Mr. Braine: I should like notice of that question.
    Mr. Lubbockasked the Minister of Health how many hospitals have so far applied the 42-hour week to all nursing staff.
    Mr. Braine: My right hon. Friend has asked for progress reports at six-monthly intervals. The first will be available in November.
    Mr. Lubbock: Can the hon. Gentleman give no indication at all at the moment of whether the target date for the 84-hour fortnight will be met by 1st January, 1966?
    Mr. Braine: We have asked hospital authorities to complete by 1st January, 1966, the implementation of the reduction in working hours. We hope that they will achieve this, or will make every effort to do so. I cannot give any more information on that point at the moment.
    Mr. Frank Allaun: Would the hon. Gentleman see that in the current negotiations the 72,000 nurses in training receive a fair deal in their wages this time? Is he aware that many of them are receiving only £2 15s. a week after they have paid for their board? Will he also bear in mind that they will not be satisfied with the 3½ per cent. recently awarded to the clerical staff in accordance with the Government's guiding light, because that would mean only 4s. a week extra for them?
    Mr. Braine: I always bear in mind anything that the hon. Gentleman puts to me. Of course, this is a matter for the Whitley Council, and I have no doubt that the consideration which he has been advancing will be advanced by the appropriate side.

    Pharmaceutical Manufacturers (Voluntary Price Scheme)
    Mr. K. Robinsonasked the Minister of Health if he will insist, in negotiating renewal of the Voluntary Price Regulation Scheme, upon full disclosure by individual pharmaceutical manufacturers of such research and manufacturing costs, profit margins, and sales promotion expenditure as may be required by his Department; and if he will take steps to ensure that any new agreement has a maximum duration of three years, subject to six months' notice.
    Mr. Barber: I hope that a new scheme will be agreed at a meeting which is taking place today, and I have noted the hon. Gentleman's points.
    Mr. Robinson: Would the right hon. Gentleman not agree that, in the absence of the kind of information referred to in the first part of the Question, he will be negotiating prices of individual drugs with one hand tied behind his back—if that is possible? Would he not also agree that his hand in these negotiations on the
    22
    agreement ought to have been strengthened by the assurance, which I now repeat, that in the event of a change of Government we would not necessarily feel bound by an agreement which we did not consider adequately safeguarded the taxpayers' interests?
    Mr. Barber: In reply to the first part of the supplementary question, compulsory powers for obtaining information are contained in the Emergency Laws (Repeal) Act, 1959, and are continued in the Emergency Laws (Re-enactments and Repeals) Bill which has just received its Third Reading. The Act provides, in general terms, for the undertakings concerned with medical supplies to furnish such informaton as may be prescribed.
    With regard to the second point in the supplementary question, which drew a mild cheer from the hon. Gentleman's supporters, I think I know what is worrying the hon. Gentleman. I can assure him that nothing in the agreement would prevent the Labour Party from implementing their declared policy of gradually nationalising the pharmaceutical industry if the British public should clamour for such a disastrous course.
    Mr. Snow: Is the right hon. Gentleman aware that if he does not investigate the difference between basic research and development research he may unconsciously be subscribing to claims for original discovery which bear no relationship to the facts because of the limited amount of basic research in this country? Is he further aware that he will be well advised to investigate the sources of income of the Association of the British Pharmaceutical Industry wherein he may discover that there are unnecessarily suspicious sorts of contribution?
    Mr. Barber: I think, with respect, that the powers which the Minister of Health will be taking in the Emergency Laws (Re-enactments and Repeals) Bill, which has received its Third Reading, will be adequate to achieve what we all desire.

    University Hospital of Wales (Chimney)
    Mr. Boxasked the Minister of Health whether the chimney of the University Hospital of Wales is of the

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    height and shape originally designed; whether it was included in the scale model as exhibited; and whether he will take steps to reduce annoyance to nearby residents by replacing it with a more attractive design.
    Mr. Braine: Yes, Sir; as is normal, the detailed design work was undertaken after the model was prepared; the design is intended to minimise any risk of nuisance from grit or fumes.
    Mr. Box: Is my hon. Friend aware that, while we welcome the construction of this hospital in Cardiff, it is understood that this chimney has been increased in height by some 25 ft.? It is something of an eyesore and a monstrosity, causing a great deal of annoyance to residents over a considerable area. Will my hon. Friend not see whether something cannot be done by redesigning or repainting, or doing something, to reduce the great pain which is caused to a number of people over a wide area in my constituency?
    Mr. Braine: The appearance of the chimney, or for that matter any chimney, is bound to be a matter on which there will be differing views. I can assure my hon. Friend that the greatest care has been taken in designing the chimney to minimise the possibility of grit or fumes being a nuisance or harmful to health. I should have thought that a nuisance of that kind would have given infinitely more pain to my hon. Friend's constituents.
    Mr. G. Thomas: Is the hon. Gentleman aware that as a constituent of the hon. Member for Cardiff, North (Mr. Box), albeit unwillingly, I can assure him that the hon. Gentleman has interpreted the feelings of people in Cardiff about this horrible, ugly, annoying chimney, which is, I believe, quite unnecessary in view of modern design? Will the hon. Gentleman ask the hospital authority to look again at this chimney, which is getting on the nerves of us all? Is he aware that wherever we go in Cardiff we see this chimney?
    Mr. Braine: All I can say is that the height and the position of this chimney on the site were determined only after tests of the model of the hospital had been carried out at the National Physical
    24
    Laboratory at Teddington. [Interruption.] The scientific tests, to which I imagine the hon. Member for Cardiff, West (Mr. G. Thomas) would attach some importance, were carried out at the National Physical Laboratory at Teddington. I will certainly consider whether it is possible to have a look at this point again, but I do not want to leave the House with the impression that the most careful thought has not already been given to this chimney in order to ensure that it does not pollute the atmosphere.

    Building Programme
    Mr. Pavittasked the Minister of Health what was the total amount of the decrease in the financial content of the hospital building programme 1963 to 1974 shown by the latest revision, as compared with the programme previously agreed for the North-West Metropolitan Regional Hospital Board; what schemes have now been excluded until the period 1970 to 1974; and what schemes were originally included in the period up to 1972–73, but are now deferred beyond 1974.
    Mr. Barber: The financial content of the hospital building programme for this region has not been decreased, as implied in the hon. Member's Question. On the contrary, this year's revision shows an increase for the region of £8 million compared with what was originally proposed. As I have already explained, with changes in priorities, involving the development of new projects in the national programme and the bringing forward and the enlargement of others, it has been necessary, despite an increased hospital programme in real terms, to defer some schemes. I will, with permission, circulate in the OFFICIAL REPORT details of those schemes suggested as likely to start within the original ten-year programme but now beyond it and expected to start before the end of the ten-year programme of the revised plan. I will also circulate in the OFFICIAL REPORT details of the schemes referred to in the last part of the Question.
    Many schemes now differ considerably in scope from what was earlier envisaged, and are likely to change further.
    Mr. Pavitt: How can the Minister reconcile the figures which he has given

    25
    with the figures from last year's revision, £66·5 million being reduced in this year's revision to £48·5 million, which, according to my reckoning, is a cut of £18 million in the financial content? Can the right hon. Gentleman say how it is that a number of the deferred schemes which are for out-dated and antiquated hospitals, which we had expected, before the plan presented by the right hon. Member for Wolverhampton, South-West (Mr. Powell), would be started by 1966, are now to deferred until after 1975? Does the Conservative Party mean by a 10-year plan a 10-year deferment of things which were to happen earlier?
    Mr. Barber: If the hon. Gentleman looks at the Answer which I have given, he will agree that my figure of an increase of £8 million as between the two programmes is correct. As regards his second point, all I can say is that it was made abundantly clear by my right hon. Friend the Member for Wolverhampton, South-West when he introduced the Hospital Plan, and it is, in fact, specified in the plan itself, that the estimates made in the preparation of the plan were tentative and might have to be modified considerably when the detailed schedules of accommodation came to be prepared. It was never intended to be a rigid plan, and I do not doubt that in the future, as in the past, there will be further modifications as priorities change. This is inevitable. What is important is that this is an expanding plan, a plan which is growing significantly not only in money terms but in real terms.
    Following are the details:
    North West Metropolitan Regional Hospital Board
    Schemes suggested as likely to start within the original programme, but now beyond it and expected to start before the end of the ten-year programme of the revised plan:

    Wexham Park Hospital—second phase.

    Edgware General Hospital—new ward block.

    Ashford Hospital—first phase of major redevelopment.

    Whittington Hospital—first phase of redevelopment.

    Schemes included in the programme following the first revision and which are now likely to start some time after 1974:

    Hillingdon Hospital—second phase of redevelopment.

    Luton and Dunstable Hospital—second phase of redevelopment.

    26

    King Edward VII Hospital, Windsor—first phase of redevelopment.

    Royal Northern Hospital—first phase of redevelopment.

    Shrodells Hospital, Watford—first phase of major redevelopment.

    Barnet General Hospital—first phase of redevelopment and engineering services.

    Central Middlesex Hospital—first phase of redevelopment.

    Paddington General Hospital—first phase of redevelopment.

    Mr. Haymanasked the Minister of Health what is the total reduction in expenditure on the South-West of England Regional Hospital Board's hospital building programme for 1963–64 revealed by the latest revision; what schemes have now been excluded until the period 1970–74; and what schemes originally included in the period up to 1972–73 have now been deferred beyond 1974.
    Mr. Wilkinsasked the Minister of Health what is the total amount of the decrease in the financial content of the hospital building programme, 1963 to 1974, shown by the latest revision, as compared with the programme previously agreed for the South-Western Regional Hospital Board; which schemes in the programme have now been postponed until the period 1970 to 1974; and which of the schemes originally planned to be commenced or completed prior to those dates have now been deferred beyond 1974.
    Mr. Barber: The financial content of the hospital building programme for this region has not been decreased, as implied in the hon. Members' Questions. On the contrary, this year's revision shows an increase for the region of £11 million compared with what was originally proposed.
    As I have previously explained, with changes in priorities, involving the development of new projects in the national programme and the bringing forward and the enlargement of others, it has been necessary, despite an increased hospital programme in real terms, to defer some schemes. I will, with permission, circulate in the OFFICIAL REPORT details of those schemes suggested as likely to start within the original ten-year programme but now beyond it and expected to start before the end of the ten-year programme of the revised plan.

    27
    I will also circulate details of those schemes which were planned to start before 1974 and which are now likely to start later.
    Many schemes now differ considerably in scope from what was earlier envisaged, and are likely to change further.
    Mr. Hayman: Will the Minister look again at the replies which he gave me last Wednesday to questions about Redruth, Tehidy and Budock Hospitals and take into account that these hospitals are likely to be needed for as far ahead as can be seen? Will he ask the regional hospital board to take this into account when making plans for the future?
    Mr. Barber: I am sure that the regional hospital board, as I shall, will always take into account what the hon. Gentleman suggests, but I must point out that, even though this is a programme which is expanding considerably in real terms, it is necessary to look at the priorities.
    Mr. Wilkins: Having regard to the Minister's reply to me in the debate on 11th June, which is reported in Col. 718 of HANSARD of that date, and in the light of his statement now that the programme has been expanded by £11 million—which, I presume, is to be over the next ten years—will the right hon. Gentleman consider publishing in HANSARD, in furtherance of the reply which he gave to me, information about where in the various regions the 20 new or substantially remodelled hospitals referred to in the Conservative Party's statement are to come? The right hon. Gentleman spoke of more than 19, so I presume that there are to be 20 new hospitals this year.
    Mr. Barber: I am always ready to provide what information I can. If the hon. Gentleman will put down a Question, I shall do my best to oblige him. The point is that, while we all regret that, from time to time, certain projects have to be deferred, with changes in priorities, what really matters is the overall financial content of the programme. It is relevant to bear in mind in this connection, particularly from the point of view of hon. Members opposite, that the "shadow" Chancellor, the hon. Member for Cardiff, South-East
    28
    (Mr. Callaghan), has made perfectly clear that the present hospital programme, as he put it,
    "could not be exceeded by any party with any degree of responsibility."—[OFFICIAL REPORT, 11th March, 1964; Vol. 691, c. 477.]
    In face of that statement, to go round the country, as some Labour spokesmen are doing—[HON. MEMBERS: "Come off it."]—pretending that a Labour Government would do more is sheer dishonesty.
    Mr. G. Wilson: Will my right hon. Friend confirm that the hospital programme is a rolling programme so that at any time during the next ten years, if priorities vary or medical needs vary, it will be possible to alter it?
    Mr. Barber: That is so. That is the whole purpose of having annual revisions.
    Mr. K. Robinson: In view of the vast number of major schemes which were included in last year's ten-year programme but which have been excluded from this year's ten-year programme, how can the Minister talk about a plan expanding in real terms? If he is interested in dishonesty, will he consider withdrawing that remark?
    Mr. Barber: Certainly not. The plan is expanding in real terms, as the hon. Gentleman knows only too well. We spent more last year than we spent in the previous year, we are spending more this year, and we shall spend more next year. The overall plan for the next ten years involves an increase in real terms of no less than £160 million as compared with the finance which was assumed in the original plan. Of course, priorities change. The hon. Gentleman talks about the dishonesty of this year's revision. He knows very well that in this year's revision there are pages of new schemes which are brought into the plan for the first time. This very year we are starting projects which will provide enough maternity beds for an additional 45,000 confinements a year. If the hon. Gentleman considers that a larger programme—[HON. MEMBERS: "Speech."]—is irresponsible, and he objects to the deferments which I have announced and of which he knows, let him tell the House frankly which of the new schemes he would cut out.
    Mr. Robinson—
    Mr. Speaker: We must get on.
    Mr. C. Pannell: On a point of order, Mr. Speaker. In view of the length and tenor of that last answer, which was a speech, not an answer, will you consider whether, in equity, we were entitled to a reply from this side?
    Mr. Speaker: I shall consider all those things, but, at the moment, let us have another Question.
    Following are the details:
    South Western Regional Hospital Board
    Schemes suggested as likely to start within the original programme but now beyond it and expected to start before the end of the ten-year programme of the revised plan:

    New district general hospital at Barnstaple—second phase.

    New West Somerset Hospital at Lyngford—first phase.

    New hospital in South Bristol—first phase. Schemes planned to start before 1974 and which are now likely to start later:

    New geriatric hospital at Devizes.

    Geriatric and maternity accommodation at Okehampton.

    New psychiatric hospital for West Cornwall.

    Gloucestershire Royal Hospital—further phase of redevelopment.

    Frenchay Hospital—new ward block.

    New West Somerset Hospital at Lyngford—second phase.

    Replacement of Mary Stanley Maternity Home, Bridgwater.

    New hospital at Derriford—second phase.

    New hospital at Penzance.

    New geriatric unit to replace Sedgemoor Priory, St. Austell.

    Budock Hospital, Falmouth
    Mr. Haymanasked the Minister of Health whether he will request the regional hospital board to provide a lift at the Budock Hospital, near Falmouth.
    Mr. Braine: I understand that the regional hospital board is considering the provision of a lift at Budock Hospital.
    Mr. Hayman: Will the Minister take it that everyone in my constituency will be delighted at that Answer, since this is a long-stay geriatric hospital and there is at present not even a lift to the first floor, a deficiency which prevents some of the patients being taken on car outings by friends of the hospital?

    Physiotherapists, Hull
    Mr. Coulsonasked the Minister of Health what scale of remuneration is being offered to qualified physiotherapists
    30
    living in Hull and district in order to induce them to undertake part-time work in their profession; and how this compares with the scale of remuneration offered to induce qualified teachers to do part-time work.
    Mr. Braine: The Whitley Council rates are £1 10s. a session for the basic grade but where more than four sessions a week are worked payment is based on the full-time salary scale. I understand that there are no prescribed scales for part-time teachers but that the local education authority makes payments in proportion to the Burnham salaries to which they would be entitled as full-time teachers.
    Mr. Coulson: While thanking my hon. Friend for that reply, may I ask him whether he will agree that, in view of the failure of the level of remuneration to attract physiotherapists to part-time work in Hull, very serious consideration must be given to whether the scale is adequate and whether sufficient recognition is given to qualification and experience?
    Mr. Braine: I know the difficulties in Hull, and I have been in communication with my hon. Friend on the subject. I think that he knows that the Whitley scales are applied nationally. There are no inducement payments, but I understand that an arbitration award on the salaries of physiotherapists is awaited. The staff side claims closer relativity with the pay of teachers.

HOUSE OF COMMONS ACCOMMODATION (DOCUMENTS)
The following Question stood upon the Order Paper:
Mr. C. PANNELL: To ask the Minister of Public Building and Works what documents relating to the accommodation of hon. Members, at present out of print, he has arranged to be made available for hon. Members.
The Parliamentary Secretary to the Ministry of Public Building and Works (Mr. Richard Sharples): With permission, I will now answer Question No. 103.

31
Arrangements have been made for copies of the Stanhope Committee's Reports, the Stokes Committee's Reports and the booklet entitled "Accommodation for the House of Commons", which was issued in July of last year, to be made available to hon. Members.
With the exception of the Stanhope Committee's Reports, which will not be available until Wednesday, the documents should be available to hon. Members from the Vote Office later today.
Mr. C. Pannell: I thank the Parliamentary Secretary and the Minister for having these old documents reprinted. They should be compulsory reading for all Members before the accommodation debate next Monday. May I specially commend them to the Leader of the House?

QUESTIONS TO MINISTERS
Mr. A. Lewis: May I ask a question of you, Mr. Speaker? In view of the urgency and tragic nature of Questions Nos. 69 and 70, I telephoned the Minister of Health this morning and asked him whether he would seek your permission to answer these Questions.
Since it is impossible to raise these matters again in Questions until October or perhaps November, or probably not at all with the present Minister, may I ask you, Mr. Speaker, whether the Minister sought your permission to answer these Questions?
Mr. Speaker: I received no such request.

SCOTTISH ESTIMATES
Committee of Supply discharged from considering the Estimates set out hereunder, and the said Estimates referred to the Scottish Grand Committee:—
Class III, Vote 2, Scottish Home and Health Department.
Class VI, Vote 18, National Health Service, etc., Scotland.
Class VI, Vote 2, Scottish Development Department.
Class VI, Vote 4, Housing, Scotland.
Class VI, Vote 6, General Grants to Local Revenues, Scotland.
Class VI, Vote 10, Scottish Education Department.—[Mr. Selwyn Lloyd.]

MONOPOLIES, MERGERS AND RESTRICTIVE PRACTICES
3.32 p.m.
The Secretary of State for Industry, Trade and Regional Development and President of the Board of Trade (Mr. Edward Heath): I beg to move,
That this House approves the proposals contained in the Command Paper on Monopolies, Mergers and Restrictive Practices (Command Paper No. 2299).
The Motion asks the House to approve the proposals which I first announced on 15th January together with the proposal for legislation on resale price maintenance. These were set out more fully in the White Paper in March. This is an opportunity for the House to debate these proposals fully and to express its views about these matters both in general and in detail. I can assure the House that the Government will value hon. Members' expressions of view today and that they will take them into account in the drafting of the legislation which is now proceeding.
The Government's proposals form a comprehensive development in this field of monopolies, mergers and restrictive practices. When the White Paper was produced, it was widely welcomed outside. The Federation of British Industries and the Trades Union Congress have endorsed the proposals in general, with a certain number of reservations about particular items. I notice that the Amendment in the name of the Leader of the Liberal Party and his hon. Friends does not criticise them and that the Opposition Amendment does not object to any of them, but implies that they should go much further.
I think that the feeling that some of these proposals are inadequate is due in part to a misunderstanding by the right hon. Member for Battersea, North (Mr. Jay) of some parts of the White Paper, judging from the supplementary questions which he has asked me at various times at Question Time, and, in particular, I think about the work of the proposed Registrar of Monopolies and the powers of the Government to deal with the findings of the Commission.
I will go into these later, and I hope that the right hon. Gentleman will then agree with me on their importance. But I

33
will certainly listen with very great interest to any proposals which he may have to make about the additional powers which he thinks the Government should take in these circumstances.
Legislation on monopolies and restrictive practices exists now in virtually all the modern industrialised economies, and I think that few people would question the value of this field of legislation in promoting greater efficiency in industry by ensuring that healthy competition is not neglected or is artificially suppressed. The proposals in the White Paper are a direct development of the traditions which have been established in this country in this field over the last 20 years by Governments of both sides of the House.
But, of course, this change is relatively recent. In the depressed conditions of the 1920s and 1930s industries got together to limit cut-throat competition. In many countries Governments intervened deliberately to encourage rationalisation, and the problems of the day arose from excess capacity and inadequate demand. Today the problems are exactly the reverse, and the urgent need, particularly in this country, is to make the most effective use of our resources. Therefore, our purpose today must be to counter inflation by keeping costs and prices down.
It is natural that, as a result of this change in circumstances, views about these matters have changed, and are continuing to change today, on the value of collective agreements which are restrictive of competition. Because of the circumstances between the wars these practices developed and thrived. They were the subject of a number of official inquiries—by the Committee on Commercial and Industrial Policy, the Committee on Trusts, and, in 1929, by the Balfour Committee on Industry and Trade. These Committees found that there was little evidence of abuses, and there was at that time little support for any kind of anti-trust legislation.
I should like to remind the House that the first sign of a new approach to match the new economic needs was entirely bipartisan. The present policy and legislation stem from the White Paper on Full Employment issued by the Coalition Government in 1944. This
34
White Paper announced the Government's intention of taking powers to collect information about the extent and effect of restrictive agreements and to take appropriate action to deal with harmful practices.
The first step in legislation to implement this policy was the 1948 Act, which set up what was then called the Monopolies and Restrictive Practices Commission. I think that the form which that Act took is significant. It did not incorporate any presumption that particular forms of monopolising or particular restrictive practices were against the public interest. It simply provided that in certain circumstances the Government could ask the Commission to conduct an impartial and unbiased investigation into the facts of a particular situation and then to make recommendations.
In this sense, the approach was entirely neutral and uncommitted. The law has retained this uncommitted approach where monopolies are concerned, and the proposals in the White Paper propose to make no change in this respect. I hope that the whole House will agree that this is the right approach. I do not believe that one can say in the abstract that it is wrong that one or two big firms should dominate a market or conduct its affairs in a particular way. Everything depends on the circumstances of the case, and, in particular, on how firms which are in this position behave.
When we come to the question of restrictive trade practices, these are, in some ways, a simpler problem than the problem of monopolies. It has been suggested that we are obsessed with the idea of the 30 per cent. of the market in monopoly practices. This is not the case, because a great deal of the White Paper is concerned with restrictive practices which are not relevant to this 30 per cent., or one-third, of the market.
But, in the light of the experience of restrictive practices, it has been possible to go further than the neutral approach of the Monopolies Commission. The Commission, in its early days, made reports on agreements in particular industries. This culminated in the Report on Collective Discrimination in 1955, which covered a very wide range of restrictive practices. The Commission concluded that there were very few

35
redeeming features about these particular practices and that they must be presumed generally to be against the public interest. It was the present Government which followed up the Commission's Report by the introduction of a Bill which became the Restrictive Trade Practices Act, 1956. This, then, was the second stage in the development of legislation.
With that Act, the law was to this extent no longer uncommitted. The restrictive practices covered by the Act—this went even further than the Commission's Report recommended—were presumed to be against the public interest. At the same time, we preserved the pragmatic approach. These restrictive practices were not condemned automatically and in all circumstances. The Act established the procedure of a register and a Restrictive Practices Court. This safeguarded the principle that in certain circumstances beneficial results might outweigh the general objections to restrictions on competition. This is the precedent which the Government have followed in the Resale Prices Bill.
The Government have completed a thorough review of policy and legislation in the whole field of monopolies, mergers and restrictive practices to see how the two main Acts are working and whether major changes are required. It is our conclusions, after this complete review, which are set out in the White Paper.
The proposals in the White Paper are of the greatest importance. In particular, there are proposals for extending the law into sectors which are at present entirely uncovered. Various changes of emphasis and procedure are also proposed. The importance of these changes, both in the scope of the proposals and in the extent of the powers involved, has so far been greatly underestimated.
Before coming to the details of the proposals, however, I should like to say a word about our general conclusion that the existing legislation is on the right lines. I realise that this is not as exciting as a proposal to recast the law entirely and to reform the pragmatic principles on which it is founded. Some people outside the House, and, perhaps, some hon. Members, may feel that more far-reaching changes should have been put forward. They may draw compari-
36
sons with the anti-trust legislation of the United States of America.
I do not believe that something on the lines of the Sherman Act would be appropriate in this country. I agree that such a law is strong and effective because infringement of the Sherman Act is simply a criminal offence; restrictions and monopolising are illegal in themselves. This law does not, however, allow for exceptions, even though it might be shown in particular cases that there were economic advantages. Such a law is accepted in America almost as an article of faith, but the economic problems of the two countries are not identical.
In a market the size of the United Kingdom, the case against monopoly must be much less clear-cut. Here, simple economic truth is not suspect in itself. Indeed, public opinion here tends to be suspicious of the encroachment of the law against the freedom of action of individual firms except where there is the clearest evidence of need. I believe, therefore, that the procedures which exist here and which have developed over the last 20 years meet our economic needs and fit our economic traditions.
We do not, however, claim that the proposals in the White Paper are the last word. They are one more stage in the evolution of this type of legislation in this country. We began with the administrative process of the Commission. Its inquiries produced a basis for generalisation in restrictive trade practices. There came a point when we could pass judgment on certain restrictions and say that they must in general be presumed to be against the public interest. The 1956 Act followed. This step, however, was taken only in the light of the experience gained from the 1948 Act.
The White Paper contemplates a continuation of that process. For example, in the particular case, it proposes a similar administrative process for obtaining information about restrictions in commercial services. At a later date, after this has been implemented, we may conclude that restrictions in this field should also be more strictly controlled. Evidence may lead to the conclusion that particular practices are wholly unjustifiable.

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That is the manner in which we have been working under the 1948 Act step by step and it is being continued in the White Paper. Therefore, the White Paper is intended to set out changes which are called for on the basis of the information which we have today and on our past experience. I hope that the House will consider these proposals on this basis as a practical and workable contribution to the needs of today. The specific proposals in the White Paper are set out shortly and clearly and I do not want to take up time by simply reiterating what is already there set out. What I say, therefore, will be more in the nature of a commentary on these proposals.
First, let me deal with the question of the strength of the Monopolies Commission. The White Paper sets out the proposals to increase the Commission's numbers and its staff and to strengthen it. There has been criticism of the changes which have been made in the strength of the Monopolies Commission over the last 10 years. I remember that in his Second Reading speech on the Resale Prices Bill, the right hon. Member for Battersea, North particularly attacked this point. I suggest that the House might look at the reason for these changes.
When the Commission was set up in 1948 by the Government of the right hon. Gentleman and his hon. Friends opposite eight members were appointed to form the Commission. The Act laid down a maximum of 10 members, and 10 had been appointed by the end of 1951. What I must point out to the right hon. Gentleman is that at that time the Commission had to deal with both monopolies and restrictive practices. That, however, was the Opposition's figure when they appointed the Commission—a maximum of 10 members. It began with eight and it worked up to 10 after three years.
In 1953, the present Government enlarged the Commission. There was a specific reason for doing so. The purpose was to build up a fuller body of information about restrictive practices and, in particular, the Commission was put to work on the report on collective discrimination. Therefore, we deliberately increased the size of the Commission for that purpose. Between 1953 and
38
1956, it was open to the Board of Trade to appoint up to 25 members to the Commission. It was never found necessary to do this and the Commission never consisted of more than 16 members. In 1956, there were only 15.
In 1956, the Restrictive Practices Court was set up to deal with all registered restrictive practices. Thus, the Commission no longer had to handle them and there was little work for it in this direction. As a result, its function was cut down to cover broadly speaking, only monopoly, oligopoly and export agreements.
Therefore, at that time, the Commission had less work to do in the field that it had then to cover than at the time when it was appointed by the Labour Government in 1948. We said then that the figure of 10 with a, so to speak, permanent and professional chairman, was the right figure for the more limited but still important functions which the Monopolies Commission would discharge.
We are now proposing to give the Commission additional work in two new fields: mergers and services. In view of this fresh extension, it is right and consistent to increase the numbers of the Commission and to revert to the method of group working. This is why the White Paper proposes a maximum of 25 members. What we have in mind is that the appointments should at least approach that maximum. This is not, therefore, merely a reversion to the position which existed between 1953 and 1956.
This is a perfectly consistent policy, which is designed on account of the work which was before the Commission not only when the right hon. Gentleman and his hon. Friends appointed it, but in the middle 'fifties, when it had specific tasks to do, and after 1956, when its field was severely limited, and now, when it is to have tasks covering a much wider range again. Assuming suitable members can be found—and I am sure that the House will agree it would be a great mistake to dilute the quality of the Commission—the new body will be considerably stronger in numbers than it has ever been before.
What we propose is that the members of the Commission shall be appointed on

39
the same basis as at present. I very much doubt whether a body of professional commissioners would be acceptable to public opinion in this country. I think that the present system is right. It consists of a body of industrialists, professional men and others who are for the most part still actively engaged in their professions or businesses and able to approach the inquiries put to it as practical men of affairs, up to date in their information in dealing with the matters of the Commission.
Moreover, the Commission will be given the right to work in groups, which will enable it to deal with more cases at once, now that it has the additional sphere of services to deal with. In the White Paper's proposals I attach great importance to the creation of the new post of Registrar of Monopolies, both from the point of view of the work of the Commission and its relation with the whole of industry. The White Paper explains that the Registrar will have two functions. First, he will be responsible for selecting monopoly situations for inquiry. The actual reference will be subject to the approval of the Board of Trade.
Secondly, in both monopoly and merger inquiries he will take responsibility for the inquiry into the facts of the situation, before these are submitted to the Commission for its consideration of the issues involved in protecting the public interest. So the Registrar will be responsible for handling the whole of the investigations. Moreover, those being inquired into will be able to see the evidence and produce anything in answer that they wish.
I hope that this will remove any lingering feelings of suspicion or injustice in industry. This appointment should establish a new relationship between the Commission, the Registrar himself and industry, which I very much hope will develop into a valuable habit of consultation between them.
The right hon. Member for Battersea, North suggested that this appointment is only interpolating another stage in the procedure of the monopolies inquiry, and that this will itself slow down the whole process. This view is based on a misunderstanding of what we propose by this appointment. By taking the investigating
40
procedure out of the hands of the Commission and allowing it to concentrate on reaching conclusions and, therefore, a judgment of where the public interest lies, it will help to speed up both the investigation and the consideration of particular cases.
That is why the proposal is of such importance for the actual work of the Commission. It will be necessary for the Registrar to have the requisite staff to handle all the things which he has in mind, and that we can and will arrange. The net result will be to speed up the process both of inquiry and of judgments by the Commission, and I believe, therefore, that it is beneficial.
Moreover, in general, monopoly inquiries will be more satisfactorily carried through if there is a full-time official, with staff, whose responsibility it is to keep the whole field of monopoly under review and to suggest subjects for inquiry. But the Government do not intend to abdicate their responsibility for deciding themselves on any action which the public interest may require to put right any abuse of monopoly power. We hope to be able to achieve this action, as has been done in the past, by the voluntary compliance of firms. At the same time, as the White Paper sets out fully, we believe that it is right that the Government should have full and effective powers in reserve.
As it is at present, the Government have certain statutory powers for dealing with recommendations of the Monopolies Commission. These powers are conferred by Section 10 of the 1948 Act. They were drawn up in 1948 by the right hon. Gentleman and his hon. Friends and were geared essentially to deal with collective restriction agreements, because until 1956 these were the things with which the Commission was mainly concerned.
I want to explain this, because from time to time I am asked why we have not taken specific action in certain cases. Under these powers the Government may, in certain circumstances, make orders rendering agreements unlawful. The problem is that the powers given under Section 10 are practically never suitable for dealing with individual firms. Now that the greater part of the Commission's work relates to single-firm monopolies we are increasingly aware of

41
the lack of power to deal effectively with individual monopolistic practices.
For example, the Commission might report that a monopoly was charging discriminatory prices with the object of driving competitors out of business. The Government might accept that recommendation, but, as the law stands, if the firm would not voluntarily comply with the Commission's recommendation there is nothing that the Government could do to compel it to do so. In such cases, and in many others, we need much wider powers to give directions requiring things to be done—a positive power, including, in the last resort, power to require a monopoly to divest itself of particular interests. This is what the White Paper proposes.
These powers, for which we shall be asking Parliament and for which there will be parliamentary safeguards in operation, are obviously very strong. I hope that no one, in the House or outside it in industry, will in any way underestimate them. I should be interested to hear from any right hon. Member what further powers he thinks may possibly be needed to deal with these cases. I feel that the White Paper has been underestimated, in relation to the strength of the powers which the Government propose to take to deal with monopolies with a newly strengthened Monopolies Commission.
Before I leave the subject of monopolies, I want to discuss two specific cases which are now before us—the Report on the Supply of Electrical Components for Mechanically Propelled Land Vehicles, and the Report on the Supply of Wallpaper. The first of these Reports took about six years to complete. The Board of Trade's reference to the Commission was made in April, 1957. The Commission's Report was submitted to the Board of Trade in March, 1963. I cannot answer for the day-to-day work of the Commission and the time it took, but it is fair to point out that in this case the reference and the inquiry which followed it were extremely complicated. There were eight distinct groups of components to be examined and considered, and the inquiries which were necessary cannot in all fairness be regarded as a single investigation.
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Some hon. Members have been critical of the time which passed after the Report reached the Board of Trade and before it was published. The Board of Trade received the Report in March, 1963 and sent it to be printed in October. The seven months which elapsed was occupied in the discharge of the Board of Trade's function under Section 9 of the 1948 Act. Under this, the Board of Trade had the power to examine the Report and to ensure that as published, it contained
"only so much, if any, of the Report as in their opinion can be made public without injury to the public interest".
That was the task which it had to perform statutorily.
With such a long and intricate Report—there were 422 pages of it—this was a considerable task. As a result of a careful examination carried out on this very large Report, information was excised from it before it was published, under the terms of the instruction to the Board of Trade, and having been sent to be printed in October the Report was published last December.
On 18th June I told the House of the progress that had been made in considering the recommendations in the Report. One, the disclosure of Lucas's interest, has been dealt with by the publication of the Report. One, the ending of resale price maintenance, is covered by the Resale Prices Bill. One, the ending of the information agreement, is covered by the proposals in the White Paper on information agreements which we shall be discussing later. I am in touch with the British Starter Battery Association to find out its intentions in the light of the Commission's Report and the proposals in the White Paper.
The fourth recommendation, the publication of prices and terms for sales of replacement goods to distributors, is also under discussion. I think that the House will realise that there are obvious practical problems in this recommendation. The Government have no powers to enforce it compulsorily. Our powers under Section 10 of the 1948 Act do not extend to that. It would mean getting voluntary undertakings from a very large number of manufacturers and importers. This action would also mean a novel intervention in the commercial activities of a very large number of firms.

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I hope that the House will agree that this clearly raises a number of important and complex considerations which go far beyond the context of the limited range of goods on which the Commission reported and made this specific recommendation. I am still studying the implications over a much wider sphere of this specific recommendation dealing with the particular section, and I hope to make a further statement on that and on other matters concerned with this Report before the end of this month.
There has been progress with the Report on the Supply of Wallpaper. On 18th June I told the House that I had been discussing this matter with the industry. These discussions are going very well, I am glad to say, and I expect to make a statement very soon.
Now I wish to deal with another far-reaching proposal which is contained in the White Paper, that relating to mergers. It is sometimes suggested that legislation against restrictive practices has been frustrated not only in the ways which we suggest in the White Paper and on which we propose action, but also because, instead of agreeing together on restriction, the firms concerned have merged. Today, there is quite clearly a trend towards concentration in industry and it would require a very thorough economic study to say whether one factor in this trend is the impact of legislation against restrictive practices.
In relation to the other forces working towards larger units, I doubt whether this one is of considerable importance. It has been suggested, particularly by the Trades Union Congress, that a fuller inquiry should be held into the growth of concentration in industry and also diversification. I have no doubt that this would be of very great interest, and might be worth consideration. At the same time, I do not think it necessary to carry out such a full study in order to form a sound basis for the policy towards mergers which is set out in the White Paper and on which we are drafting legislation.
There is no doubt that the effects of mergers can be significant for competition in the industry concerned and thus affect public interest. The House will agree, I think—and there is general
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agreement among the public outside—that many mergers are highly desirable. They ensure that capital is most profitably employed, or secure economies of scale. In many places the structure of British industry can be changed so that it is better able to support research and development programmes as well as the sales organisation necessary to compete successfully today against much larger countries and groups in the outside world.
We believe that it should be possible, without in any way prejudicing mergers of this kind, for the Government to be able to inform themselves and to take appropriate action when they suspect that a proposed merger may have undesirable consequences. The investigation proposed in the White Paper, which will be carried out by the Monopolies Commission at the instigation of the Government, could begin as soon as a merger was proposed and comes to the notice of the Board of Trade. It is probable that, normally, the investigation would take place after the event.
Interesting suggestions have been made as to the methods by which the completion of a potentially harmful merger could be prevented. Superficially, some of these are very attractive, but I believe that a form of procedure of this kind would work only if all mergers of a defined size or above were to be brought into the procedure. This means that there would bound to be delay. As both the F.B.I. and the T.U.C. have recognised, the need to get approval in advance would impose an unwarranted burden on the great majority of mergers with which we would have no desire at all to interfere. There would, therefore, be a very real risk of desirable mergers being frustrated. For these reasons we are not proposing to prevent the completion of a merger until the full inquiry has been completed.
It is perfectly true, as some hon. Gentlemen may suggest, that there would be cases where the Government would be unable to act effectively after the event, when the merging companies may have integrated their activities. We have thought about this very carefully. It is, of course, true, if a merger which is obviously within the range of possibility of doing damage to the national interest is proceeded with, it goes ahead at its own risk because it is clear that the Government would necessarily want to

45
investigate it; but if these important matters are to be given proper consideration, we do not see any acceptable method of insisting that the inquiry must be complete before the merger can go ahead.
I think it wrong to assume that the only answer to a merger which appeared likely to have undesirable consequences would be to break the companies apart. The difficulty of doing this is one of the anxieties of those who think that the Government would be unable to intervene effectively. It might be possible to safeguard the public interest by much less drastic requirements, or by undertakings as to how the merged firms would conduct their business. In the minority of cases, where there was no lesser course than to undo the merger, the Government believe that this can be done. It has been done in a number of cases in the United States of America. It requires the Government to have the power to order companies to divest themselves of interests.
I have already mentioned that the White Paper proposes this power in relation to monopolies. In this case it would be a similar power in relation to mergers. In respect of mergers, in the nature of things, it could be used only after the concentration had taken place.
Mr. A. J. Irvine: Would not the right hon. Gentleman agree that it would be an action of which one could be critical if companies contemplating a merger proceeded with such a merger if the Government had referred the proposal to the Commission? Surely that would indicate the view of the Government. Surely a climate would be likely to develop in which it would be recognised by responsible companies that such a merger was unlikely to go far.
Mr. Heath: That may well be the case. That is why I said that in the range in which there was possibility of damage to the national interest, obviously such mergers would go ahead at their own risk. I very much hope that the development which I have mentioned, the appointment of a Registrar of Monopolies, will lead to a climate in which there will be consultation by firms with him—very confidential consultations—or with the Board of Trade, before these matters develop, so that the
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firms would know whether the proposed merger was one in which there was likely to be interest in an inquiry or not. If we can build up an atmosphere of confidence between industry and the Registrar—as we hope to do with this appointment—that will lead to the best way to seek a solution.
Sir John Eden: Is it not correct to say that unless there is this consultation the Government are unlikely to know of a proposed merger until after it has happened?
Mr. Heath: There is, of course, that danger, yes. There are various ways in which possibilities of mergers become known, especially in a Government Department which is in close touch with industry, but, at the same time, there is this difficulty, about which I agree with my hon. Friend.
Leading on from the hon. and learned Gentleman's intervention, because of this I do not believe that it will be necessary to use these far-reaching powers very frequently. This is stated in the White Paper, and it has been subjected to the criticism outside, to a certain extent, that this means that the Government are not in earnest about their policy towards monopolies and mergers. This I do not believe to be the deduction to be made from this. It is certainly not the case. It does not imply any lack of will. What it does mean is that as the Government would have these powers I believe that industry, through the process of consultation, will consider very carefully indeed the sphere in which it is moving when it gets to a size which might be thought to be damaging to the national interest.
I believe that both sides would agree that it is preferable wherever possible to do what is necessary to prevent the suppression of competition in some way other than by using these powers, and, at the same time, powers to inquire into mergers and monopolies will allow the Government to give the Commission the entree into particular situations and a right to make recommendations. I think that one could go so far as to describe these powers, which the Government will take and have the will to use, as a deterrent which will very largely have failed if it gets to the point at which it has to be used. So I think that because of these powers, to be used in the last

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resort, there will grow up this process of consultation, and a suitable climate in which we can reach conclusions without having to go to these lengths and coming to Parliament for sanction, for each of these schemes.
I should like to deal with the proposals in the White Paper for amending the 1956 Act. These are important, but, as hon. Members will have seen from reading the White Paper, they are basically technical proposals. They deal with information agreements, a series of bilateral agreements, and agreements to like effect. The need for them is borne out by remarks in the Registrar's Reports. To those critics outside who have examined the proposals about information agreements I will concede all the difficulties about bringing the law to bear on agreements which are nominally just for the exchange of information, but I believe, and can assure the House, that this loophole ought to be closed. I believe that it can be done without prejudicing harmless or beneficial exchanges, and without imposing undue expense or trouble on the parties.
One means of achieving this is the additional ground of defence—the additional "gateway" as we would now be accustomed to calling it—proposed in the White Paper. The position is that this legislation, the 1956 Act, is intended to promote competition. It is aimed at agreements which are restrictive of competition. We have reached the conclusion that if the parties can satisfactorily demonstrate that an agreement is not restrictive of competition, then it should be permitted to continue, and I believe that parties to information agreements which are not being used to frustrate the Act should have no difficulty in demonstrating this.
There has been some comment to the effect that, by providing this additional gateway, we are in effect weakening the 1956 Act. I cannot in the least agree with this. There is nothing, in my view, to be gained from stopping things just for the sake of stopping them. Where these agreements are not objectionable because they do not restrict competition I think that they should be allowed to continue. There is already provision for not referring to the courts agreements which are of no substantial economic
48
significance. In my view, this is very similar to the machinery we have got for things of no importance, and covering information agreements which are beneficial provides us with a means of allowing them.
Finally, I should like to refer briefly to the proposals on services. Services were omitted from the earlier legislation, from the 1948 Act proposed by the right hon. Gentleman and his hon. Friends. I understand this was not based on any particular point of principle. It was simply the inevitable result of the need, and, I think, the wisdom, that to begin with the field of the Commission and the Court should be kept to manageable proportions.
Potentially, restrictive agreements—for example, on the level of charges for services—can be just as undesirable as comparable agreements on the supply of goods. What we propose is to provide that the Monopolies Commission be asked to inquire into restrictive practices in this field. The Government will be able to refer to the Monopolies Commission monopolies and mergers in services, although I think that in the nature of things these are probably the least important aspects of it.
It seems to us sensible that the Monopolies Commission's work in this sphere, which is an uncharted area, should be concerned with the relatively straightforward field of commercial services. It is our intention to build up a body of information and experience about restrictive practices in the provision of these services, and in particular those relating to goods. When this has been done we shall be in a position to consider what action needs to be taken. As I have already mentioned, this approach is in keeping with the practice of the Monopolies Commission in examining restrictive practices, generally reaching a conclusion, and then passing legislation about it, and in the new sphere of services we propose to follow the same path.
Perhaps I may sum up. The White Paper proposals would preserve the really significant features of United Kingdom law in this field, which is an independent, pragmatic, administrative procedure for investigating monopolies, and it would preserve, in the case of

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collective restrictive arrangements, the familiar machinery of the Registrar and the Restrictive Practices Court. What we propose is, to improve this machinery in the ways I have indicated. At the same time, we will take powers to apply the accepted procedure of a Monopolies Commission inquiry in two new directions—to potentially harmful mergers and to commercial services. Our conclusion is that these are the general direction in which changes should be made.
I have already said to the House that I do not want to suggest that the proposals which I have outlined are in every respect a cut and dried programme for legislation. We shall study the comments and suggestions put forward in the debate. We have had many useful comments on the White Paper from outside, and we shall value more. I believe, however, that in broad outline the developments of present policy and the new initiatives which are set out in the White Paper are right, and that legislation on those lines is necessary if the law in this field is to be effective. I think that these proposals are clear and firm. They will be given, as I have told the House, a high priority by the present Government in the first Session of the next Parliament.—[HON. MEMBERS: "Oh."] We believe that their implementation is the most effective way of securing greater competition in industry and the greatest efficiency in an. expanding economy.
What are the alternatives to pursuing a policy of this kind? Either to allow restrictive arrangements to continue and to develop further—and I think that now there is little support in the country for doing this; or to extend State ownership through nationalisation. But nationalisation by its nature creates still further monopoly. It solves no problems—[HON. MEMBERS: "Oh."] No: none at all. It produces additional ones with which we are all familiar. The right hon. Gentleman and his hon. Friends are just as familiar with the problems of nationalised industry, the problems of management, the problems of financial control, the problems of accountability, the problems of inducing enterprise and initiative. These things are problems with which we are familiar, and none of them is solved by a change of ownership. Nor will the creation by the State
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of individual firms produce the climate which is required to encourage competition and efficiency.
Again, it only produces more problems —how the State can build the factory and run it; how firms, knowing they have the resources of the State to fall back on, can maintain initiative; how, for prestige reasons, they can ever be liquidated if they fail. These are all problems—
Mr. A. E. P. Duffy Mr. A. E. P. Duffy (Colne Valley) rose—
Mr. Heath: I think that I have been interrupted quite a lot lately.
Mr. Duffy Mr. Duffy rose—
Hon. Members: Order.
Mr. Speaker: If the right hon. Gentle- man does not give way, the hon. Member must not persist.
Mr. Heath: I think that I have been interrupted quite enough lately. [Interruption.] The hon. Lady the Member for Blackburn (Mrs. Castle) can make her own speech in her own way. I notice that she has been writing about this subject lately.
None of these things is a solution to the problem which faces us in British industry today. Therefore, I urge the House to support the Motion, since the solution lies in greater competition in private enterprise. These proposals will ensure that greater competition and, in doing so, will serve the public interest.
4.21 p.m.
Mr. Douglas Jay: I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
"deplores the continued refusal of Her Majesty's Government to introduce legislation in this Parliament to strengthen the Monopolies Commission, and to curb abuses of private monopoly power, and their failure both to carry out the Commission's past recommendations without prolonged delay, if at all, or to make adequate proposals for speedy and effective action in the future."
I should like, first, to pay this tribute to the Secretary of State, that at least ever since he ceased to be Chief Whip he has never been short of words in this House. Two years ago it was to be harmonisation; this year it is modernisation; and next year, maybe, it will be

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tranquillisation, or even hibernation—I am not quite sure which. But if the right hon. Gentleman's oratory flows uninterruptedly on—perhaps sometimes a little complacently—nevertheless, the tide turns every so often.
In 1956, the right hon. Gentleman was all in favour of reducing the activities of the Monopolies Commission. Now he is enthusiastically in favour of building them up again to where they were before. In 1962, he was absolutely against any inquiry into mergers; now he is wholeheartedly in favour of it. But those of us who are not quite capable of these quick changes are bound to ask him this today: if the right hon. Gentleman's conversion on monopolies is so complete, why did he not introduce new legislation on this last winter, at the same time as the Resale Prices Bill? Why did he deal with the small shopkeeper so promptly, and leave the big monopolies over until after the election? He did not tell us that this afternoon.
When the right hon. Gentleman went to the Board of Trade, last October, he found already waiting for him a comprehensive, although confidential report, on monopolies and mergers as well as on resale prices. At least, I assume this must have been so, because it was as long ago as the debate on I.C.I. and Courtauld's on 14th February, 1962, when we proposed action, that the then President of the Board of Trade, now the Minister of Power, told us that an official inquiry into this was already going on. He said on 14th February, 1962:
"I had already decided last year"—
that was in 1961—
"that … the time has come to put in hand … a comprehensive review of our monopolies and restrictive practices policy."
He then went on:
"The review is making good progress,".—[OFFICIAL REPORT, 14th February, 1962; Vol. 653, c. 1355.]
The right hon. Gentleman said he told us that to show that there was nothing timid or complacent about the Government's policy.
So this important review was started in 1961, and was making good progress in February, 1962. I therefore give the Government the credit of assuming that
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it was complete by October, 1963, when the present Secretary of State took over. If I am wrong, perhaps he will tell me now. He does not, so obviously I am right and he had this report before him. Therefore, it follows that the right hon. Gentleman, finding all these conclusions ready and waiting for him last October on monopolies and mergers as well as resale prices, deliberately decided to legislate on resale prices first, and leave monopolies over until after the General Election. I wonder why. He has not told us this afternoon.
However, this means that we are now merely promised legislation, perhaps, some time after the election, on all these issues. Even then, what the right hon. Gentleman really proposes, in spite of all that he said today, is, in substance, to return to the previous system which the present Government terminated in 1962 by which the Monopolies Commission worked in a number of groups simultaneously. The present Minister of Defence suspended all this and weakened the Commission, with, of course, loyal support from his Chief Whip at that time; we opposed it then. I said, on behalf of the Labour Party:
"our third serious objection to this Bill"—
that was the 1956 Bill—
"is that the President of the Board of Trade is drastically curtailing the scope of the Monopolies Commission."—[OFFICIAL REPORT, 6th March, 1956; Vol. 549, c. 1952.]
But the Government, of course, would not listen. They proceeded to curtail them with the result, as I shall show, that the whole process of curbing monopolies was drastically slowed down. And now the right hon. Gentleman comes along and in his White Paper says this:
"The Government consider that the Commission should again be enlarged and given the right to work simultaneously in groups on several inquiries at once. These changes should also enable the Commission to work more quickly."
On mergers, the story is remarkably similar. In the debate on I.C.I.—Courtauld's in February, 1962, we on this side of the House said this from this Box:
"… the time has come to give a standing public authority, possibly a reinforced Monopolies Commission, the job of looking into major mergers.…"—[OFFICIAL REPORT, 14th February, 1962; Vol. 653, c. 1137.]
The present Minister of Power, then at the Board of Trade, turned this down

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flat, presumably with the support of the Secretary of State, who was then in the Cabinet in some position or other. The then President of the Board of Trade said that any such inquiries into mergers would take too long, would be beyond the capacity of anybody but clairvoyant experts who did not exist, and
"might create awkward and undesirable precedents. …"—[OFFICIAL REPORT, 14th February, 1962; Vol. 653, c. 1354.]
Now the Secretary of State, in his White Paper, announces
"… the new Monopolies Commission should be empowered at the direction of the Board of Trade, to inquire into any proposed or recently completed merger. …"
I do not think that in view of this record we start with a great deal of confidence in the Government's intentions.
If one examines the entire record, not that of just the present Government—about which there can be no two opinions—but the whole record of Parliament's dealings with monopolies since 1948, I think that two simple lessons stand out. First, the whole process of inquiry and report has taken far too long; and, secondly, far too little action has followed. The 1948 Act, as the right hon. Gentleman said, contemplated that after the Commission reported, action would be taken by parliamentary order. One such order had already been issued—on dental goods—by the rime of the change of Government in October, 1951. Since then, although we have had more than 20 Reports, all but two of them highly critical, only one order has been made in 13 years.
Instead, what has happened is that Conservative Ministers have normally engaged in long-drawn-out processes of negotiation or bargaining which usually leave it exceedingly hard for the House, let alone the public, to understand whether anything is being achieved at all. The simple figures show how drastically the whole process contemplated by the 1948 legislation has been slowed down and frustrated by the curtailment of the Commission. The right hon. Gentleman said this afternoon that this was merely an adjustment of the numbers of the Commission to the work which it had before it. My answer is to give the figures of what has happened.
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From 1949 to 1956 there were 29 references to the Commission—in eight years. That was three and a half per year. Since 1956, there have been only five references in seven years, or less than one and a half per year. Twenty-two reports were made before 1956, or two and a half a year. Since 1956, there have been six reports, or less than one per year. Even so, although the right hon. Gentleman says that it was adjusting the Commission to its work, each report since 1956 has taken on average not two and a half years as before, but three and a half years.
The latest example is the Report on the Supply of Electrical Components for Mechanically Propelled Motor Vehicles—in plain English, Joseph Lucas and its associates. That reference—the right hon. Gentleman admits it; he cannot really deny it—was made to the Commission on 18th April, 1957. An emasculated Commission signed the Report on 7th February, 1963, six years later; and said that serious monopoly practices existed, that profits were too high, and that the consumer was being exploited.
The Board of Trade meditated on the Report from February or, if the right hon. Gentleman wishes, March, 1963—it does not make much difference—until 18th December, 1963, when it allowed the Report to be printed and the rest of us to see it. Even then the Board of Trade continued to cogitate upon it under the new Secretary of State—who was supposed to be a new broom in all this—just as under the old, and it was finally, on 18th June this year, in answer to a Question of mine, seven years after the first reference, that the Secretary of State gave the first intelligible, or more or less intelligible, account of what action was to be taken by the Board of Trade.
What the right hon. Gentleman said, in effect—I think that this is consistent with what he said this afternoon—was that two of the Commission's main proposals were covered by the Resale Prices Bill or by the legislation promised under the present White Paper, which we have not, of course, as yet had, and that the other two were still under discussion between the Board of Trade and the first concerned. In spite of what the right hon. Gentleman said this afternoon, that does not seem to me to be exactly a

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record of speedy and efficient administration by the Government.
Let us look at Imperial Tobacco, which the right hon. Gentleman did not mention. Here, also, there has been no undue haste. The reference to the Commission was made on 29th November, 1956. The Report was signed on 6th January, 1961, and it recommended that Imperial Tobacco's 37½ per cent. holding in the shares of Gallaher, its chief competitor, should be sold. On 4th July, 1961, the Report was made public, but no action was announced by the Board of Trade until 28th December, 1961—during a Parliamentary Recess, incidentally—which was more than five years after the start of the inquiry. The President then told us that he was not, as the Commission proposed, asking Imperial Tobacco to sell its Gallaher shares, but was accepting undertakings from it that it would not interfere with the Gallaher management. So far as I know, and so far as the House knows, Imperial Tobacco retains the Gallaher shares to this day.
I could go on with this story, but it would be too long. However, I think that I might mention timber. Here, the reference was made on 10th October, 1951. The first Report of the Commission was received in July, 1953, and the Board of Trade finally announced an order, the only one ever made by a Tory Minister, in July, 1960—just nine years after the original reference to the Commission. The retail distribution of petrol, which one might have thought quite important, was referred to the Commission on 29th September, 1960, and on this—in July, 1964—we have so far had no news and no report. Therefore, I think one may fairly sum up the state of play to date by saying that our Monopolies Commission has shown that restrictive practices are very widespread over a large slice of British industry, and that very little has yet been done about it.
Now, however, the Secretary of State professes—he was full of good intentions today—to be enthusiastically embarking on a great new anti-monopoly crusade—but not, of course, until after the General Election. First, he proposes to appoint another Registrar. The Government seem a little obsessed with registrars. Their view seems to be, "When in doubt, appoint a registrar." In spite of what
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the right hon. Gentleman said, I think that we should look at how this new scheme is to work.
The right hon. Gentleman claims that it will speed up the procedure. As I understand it, the procedure will now be as follows. After the Registrar has been appointed—that is, after the legislation, which is after the General Election—the first process will be that the Registrar will select cases for inquiry by the Commission. Secondly, he will submit his selection for approval to the Board of Trade, which will approve or not approve it. Thirdly, if the selection is approved, the Registrar will then investigate the facts, and "set out" for the Commission the issues involved. That is what the White Paper says. That stage up to now has taken two or three years under the present Government.
Fourthly, the Commission will come into the picture; and will "assess where the public interest lies," with the Registrar making further investigations and elucidations. Fifthly, the Board of Trade, having got the Report of the Commission, will, or will not, take action on it; a final process which under the present Government usually takes another year.
In spite of what the right hon. Gentleman said today, I still find it hard to believe that the new procedure will speed things up, which, I believe, is what almost the whole House wants to see. We are, of course, to have a larger Commission again; but it is also to have the job of investigating mergers, and, on balance, I do see any evidence that the delays of the past are likely to be lessened. There is no sense of urgency discernible in all this, either in the White Paper or in the speech which we heard this afternoon.
The main trouble about this five-year type of legalistic inquiry is that, while the Board of Trade stands still or very nearly still, the business world move on. By the time one restrictive practice has been ferreted out into the light of day, and ceremonially unscrambled, another is devised. Indeed, the long and rather murky story of the timber and British Oxygen cases consisted largely of an attempt to discover whether the requests of the Board of Trade were being honoured in the spirit or merely honoured in the letter.

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To meet this, the right hon. Gentleman is now to ask for stronger legal powers of enforcement. We shall be able to judge the efficacy of them when, and if, we see them in legal form. Meanwhile, I find it rather extraordinary that the Government, who now protest that they need new powers, not merely took 13 years to find this out, but during those 13 years only once used the powers which they now pronounce to be inadequate.
We are glad, of course, that the Government have accepted, after only two and a half years, the proposal about mergers that we made in the debate on I.C.I. The Commission is now
"… to inquire into any proposed or recently completed merger which would result in a monopoly or would increase the power of an existing monopoly."
But on this front, also, things have moved on in the last five years.
In 1959, hon. Members opposite were deeply distressed about the 500 firms which they professed to fear might be taken into the ownership of the nation by a Labour Government. The Tory Central Office published a list which, in fact, dated from 1955, of these 500 firms. But in the years since then 112 of these 500 firms have vanished in private takeover bids. They have been swallowed up. They have disappeared. They are sunk without trace.
Yet there has not been a single squeak of protest about it from hon. Members opposite. Into the valley of death rode the 500—and fewer than 400 returned. The silence of the Tory Party about this is all the more remarkable because 25 out of the 112 vanished firms were in the drink trade, which it is supposed to be the traditional, historic duty of the Tory Party to protect.
Mr. W. S. Shepherd: Is the right hon. Gentleman saying that, had he had the authority, he would have stopped those mergers?
Mr. Jay: No. I was saying exactly what I did say and no more and no less. But I will add that some of these vanished firms were swallowed by foreign takeover bidders. Of course, foreign investment here is not necessarily undesirable, but it does emphatically need control.
The common sense of this matter is that overseas investment is desirable when
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it involves the creation of new productive assets—as it has done—but is not necessarily desirable if it means the transfer of the control of existing assets to outside the country. The extraordinary thing about hon. Members opposite is that they would rather see British industry taken over by foreign private owners than by the British public. On this side of the House, if that is the choice, we would far rather see British public ownership than foreign private ownership of British industry.
What is the right hon. Gentleman proposing, in the White Paper, to do? He accepts our main proposal for scrutiny by the Monopolies Commission, but again applies it in a hesitating fashion. The White Paper says that the Government—as the right hon. Gentleman himself said—do not intend to seek powers to hold up a proposed merger while it is being investigated because
"This could well frustrate desirable mergers."
The Government then invite firms contemplating a merger to consult the Board of Trade beforehand. But firms might not do so. In that case, the inquiry would be held afterwards, and the Government might be confronted with the problem of unscrambling a merger after it was completed. This means, on recent form, perhaps a year or two afterwards. Does the right hon. Gentleman think that the Government would do this? He was a little more informative today. All that he said in the White Paper was:
"… it would then be for the Government to take such action as they believed to be necessary."
That is not a very exciting conclusion.
There is surely great danger here of getting the worst of both worlds. Suppose that I.C.I. and Courtaulds had merged. Or take the case of Rootes and Chrysler. If the Government decided that such a merger was undesirable, would it really be fair to these firms or to their employees, or to anyone else, forcibly to unscramble them afterwards? It would surely be better for everyone, including industry, if a proposed merger were either given a quick clearance or, where there was a prima facie case against it, held up for a full investigation which should have a time limit of, say, six months at the most. I do not believe that that procedure is impracticable. If it is, then the Monopolies

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Commission should be given the extra staff necessary to make it work.
Meanwhile, we can all welcome the decision to make information agreements registrable and to extend the Restrictive Trade Practices Act for the purpose of inquiry only, of course, to commercial services. We shall have to look narrowly at the Government's precise plan to weaken Section 21 of the 1956 Act by putting alongside it a new gateway for restrictive agreements to get through. That might possibly be justifiable, but a new gateway makes it easier to get through the Act—indeed, that is its purpose—and inevitably weakens it.
We also need to know more of what the Government mean by "commercial services". Are banking and the discount market to be included? The right hon. Member for Wolverhampton, South-West (Mr. Powell) may well ask to be reassured on this point. As is well known, he is an heroic believer in the most savage and ruthless competition, regardless of all fear and favour. He is also a director of the National Discount Company. And that company, together with other discount companies, runs the tightest monopoly in British industry and commerce. These companies tender every week through a so-called syndicate for Treasury bills at a single, common price. I think that we should know whether this sort of practice is to be included in "commercial services".
Other industries, including the film industry, may be involved. The right hon. Gentleman the Secretary of State has been, despite his protestations today, singularly reluctant to do anything about monopoly in the film industry. In considering all these cases, we are entitled to know what is to happen, not merely to enlighten the House, but to allay the perfectly legitimate anxieties of the right hon. Gentleman the Member for Wolverhampton, South-West.
The public suspect the sincerity of the Tory Party in all this, not only because of its notorious subservience to vested interest, but also because of its doctrinaire refusal to consider public ownership as even a last-resort sanction against private monopoly. Let us take the case of steel as an example.
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For years we were told by the Government that the Iron and Steel Board had completely effective control over the industry, particularly over prices, and that no other stimulus or safeguard was necessary. But now the Restrictive Practices Court has declared that private steel firms, through the Iron and Steel Federation, have been agreeing to treat the Iron and Steel Board's maximum prices as minima. This has operated, according to the Court, contrary to the public interest, and ought to cease.
What are the Government to do now if private steel firms, without any agreement at all, simultaneously continue to treat the Iron and Steel Board's maximum prices as minima? This last judgment is, unfortunately, only one part of the evidence gathering that over the last five years the British steel industry, on its present basis of private ownership without price competition, is falling behind its overseas rivals. During the past 18 months a large part of our increased trade deficit has been due to the much quicker rise in steel imports than exports.
Whether we take the test of investment, of productivity, of exports or the size of units, the British steel industry's performance in these last few years compares rather disquietingly with that of the other major industrial countries. Much evidence has accumulated that prices are too high. Indeed, the steel industry's latest outcry against alleged dumping by overseas producers does not altogether allay one's anxieties about this.
For all these reasons I do not be lieve, and I am not yet convinced by the right hon. Gentleman, that the proposals which the Government are putting before the House will in themselves prove adequate to stimulate the real competition which, I agree, is necessary if a mixed economy is to be genuinely and progressively efficient. If the job is to be done, we must, first, give the Monopolies Commission a staff which is fully adequate to tackle what certainly is a very formidable job. Having done that, we must, secondly, require the Commission—which would be perfectly reasonable—to complete its reports in a reasonably short period of time.

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Thirdly, the Government must establish a normal practice of accepting the Commission's main recommendations, unless there is some overwhelming evidence to the contrary. Fourthly, a recognised standing section of the Board of Trade or the Commission should have the job of ensuring, continuously and effectively, that the Government's decisions are actually carried out in the spirit as well as the letter. Fifthly, we must have a procedure for provisionally holding up mergers when there is a prima facie case against them. I do not see why we should not move at least as far as that at present.
In all this, however, I believe that more will depend, in the end, on the will of the Government than on the form of the legislation. In face of this Government's record, of the vagueness and ambiguity of the White Paper and all that we heard this afternoon, no one will believe that the Government have the will or the capacity—or, indeed, the intention—of doing the job that needs to be done.
4.54 p.m.
Sir John Vaughan-Morgan: The many criticisms which have been made by the right hon. Member for Battersea, North (Mr. Jay) can, with the best will in the world, be held to come more under the heading of carping than of constructive. It is not impossible to agree with some of his remarks about delays in the bringing forward of the White Paper, but I should have thought that that came rather surprisingly from the right hon. Member and his party.
The right hon. Member, in particular, the apostle of freedom, so-called, had no new view on the Resale Prices Bill. That Bill was not in the legislation for this Session, but we have to bear in mind that neither he nor his hon. Friends voted against the Second and Third Readings after taking up a great deal of the time of the House, which I think becomes a humbug. They were divided between those who, with vim and vigour, did not support the Bill and those who, with equal vim and vigour, did not oppose the Bill. Their attitude was as futile and fruitless as neuters usually are.
Mr. Jay: Is the point that the right hon. Member is making that the party opposite was wholly united on the Bill?
Sir J. Vaughan-Morgan: We were by the time of the Third Reading. I think that the vigorous conflict within this party was more fruitful than the union of neuters in the party opposite.
I welcome the White Paper and I propose to devote myself almost entirely to the points with which I disagree with a view to influencing the Bill which, I trust, is already in process of being drafted. First, I hark back to the word "monopoly", which, apart from being a terminological inexactitude, is really out of date. The 30 per cent. formula adopted for a long time was only a cockshy. We ought to accept that what we are trying to deal with is domination of a market and the abuse of that dominance. This, surely, is a permanent task which will face the present so-called Monopolies Commission. That never was an appropriate name. We might almost offer a prize for a more suitable name. In the absence of one, let us take a leaf from the American book and, if necessary, call it the "Trade Commission". Its basic task is to police the whole field of trade and see that competition everywhere is as free as possible.
I should like to see the 30 per cent. formula amended to a more flexible definition which would cover the situations which arise where a company dominates not so much by reason of a particular percentage in manufacture or distribution, but by its position both as a producer and as a distributor. This is a new phenomenon which, I think, has not been considered in any of the cases coming before the Commission.
I come to the question of numbers on the Commission. The right hon. Member was very unfair, because he entirely omitted to refer to the fruits of the Restrictive Trade Practices Act. I am not saying that looking back it was not a mistake to reduce the numbers in 1956, but, although he may have said so at the time, he said it without any experience of the working of the Act and I am saying it now with all the virtues of hindsight. Why limit the number to 25? Statisticians have worked out that with 10 members it would take 140 years to complete its current tasks.
My arithmetic is poor, but I reckon that on this basis it will take 56 years

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for it to complete the same tasks. My suggestion is that far from fixing a permanent number for the Commission the Bill should include power for the Secretary of State to amend the number by Statutory Instrument. My right hon. Friend has pointed out the calibre and quality of people needed to man the Commission. But there are many more than perhaps he realises, and I believe that—assuming the right quality is there—the numbers should be kept flexible in accordance with the tasks which may be put before the Commission at any given moment.
I very much welcome the appointment of the Registrar of Monopolies. The right hon. Member for Battersea, North had his doubts about the Registrar just as, if I remember rightly, the Labour Party had its doubts about the composition of the Restrictive Trade Practices Court and of the Registrar of Restrictive Trade Practices. I am sure that his misgivings about this appointment will be equally unfounded; but I agree to this extent: the authority and power of the Registrar must be very carefully defined.
I accept, as the White Paper states, that the reference of cases must be subject to the approval of the Registrar, but any rejection of the Registrar's recommendations should be made known to Parliament. There should be no suggestion under any Government of any colour that these things could be influenced by political decisions. He must not be a creature of the Board of Trade. He should be as independent as the Comptroller and Auditor General.
Above all in the White Paper, I welcome the new powers to implement the Commission's recommendations. I share the Government's views about the desirability of seeking voluntary undertakings, and I think that the right hon. Member for Battersea, North was a little unfair in his remarks about what has been achieved by voluntary undertakings. But without being too cynical, I think that voluntary compliance will be more easily achieved with the compulsive power behind him, and, therefore, I strongly welcome the fact that powers—I hope stringent powers—will be given to him.
I hope that when these powers are provided, my right hon. Friend will take the
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opportunity to review some of the past decisions which have been taken without these powers—and I, too, am referring to the case of the Imperial Tobacco Company. I regret very much that my right hon. Friend has continued the policy of his predecessor, who, in my view, was supine in this matter. I am in no way criticising the Imperial Tobacco Company except to this extent—that the assurance which the company gave not to use its shareholding is in itself wrong. I do not think that it is right for any company to have what is called a locked-in equity to the extent of one-third of the capital of another company and to give an undertaking that it will abdicate from its powers and duties as a shareholder.
This is not a monopoly point. It is a company law point. In an age when we are seeking to restore the rights of shareholders, it is wrong that any shareholder should abrogate his rights, and this is the way to look at the undertaking given by the Imperial Tobacco Company. I understand and accept from the company that there is nothing wrong about its will and spirit to compete with Gallaghers. My view is that it is the locked-in equity in itself which is wrong and which should be scrapped.
The right hon. Member for Battersea, North also raised the thorny question of intervening before or after a merger has taken place. On balance, I come down on my right hon. Friend's side. It sounds weaker than to have the drastic power to intervene, but I am not sure that, in the long run, it will make much difference. The ability to warn should suffice, and although there are those who say that one cannot unscramble an omelette or undo what has been done, I think that that is wrong; I think that it can be done. I grant that if one unscrambles an omelette the eggs become slightly battered and not quite what they were beforehand, but this is not the point. A vast merger can be broken up.
It is quite interesting to see that after all the fuss about the I.C.I.-Courtaulds merger, which did not come off, the net result has been to break up a merger in the shape of British Nylon Spinners, which has turned out to be a very healthy development.
Mr. Jay: Does the right hon. Member agree that that is an argument for the

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Government intervening to prevent the merger between I.C.I. and Courtaulds rather than letting it go through?
Sir J. Vaughan-Morgan: It is rather hard to argue that, because the Government had no need to intervene, as the merger did not come off. If, however, the Government had intervened at an early stage it might well have resulted in Courtaulds not producing the fascinating information for their shareholders which they produced at the peak of the takeover bid. This is a very strong argument against intervening during the fight which Courtaulds had to put up. It put a little backbone into the company. I was not a shareholder at the time, but I am a shareholder now. I must admit that it has been to my considerable profit. Perhaps, having declared that interest, I had better hastily get away from the subject.
May I comment on the time which it has taken to produce the White Paper? It has taken three years to achieve this modest 4,000-word pamphlet. I think that my right hon. Friend will agree that, perhaps as a coincidence, its contents and its recommendations owe much to the report of the Conservative Party committee under the chairmanship of Lord Poole. That was a very remarkable committee. I was not a member. I wish that I had been. But it took only one year in which to produce a very comprehensive 10,000-word report, and nearly all its recommendations, I am glad to say, have proved acceptable to my right hon. Friend.
I think that I can truthfully say that this White Paper is a credit to the Conservative Party rather than to the Board of Trade. Perhaps I might recommend to my right hon. Friend that if he has any more ponderous reviews majestically proceeding through the machinery, he might equally consider the alternative of handing them over to a party committee. The freshness of thought in the party on this side of the House which has produced this report is in remarkable contrast with anything which I can find that the Labour Party have produced—a scant reference in "Signposts for the Sixties" and virtually nothing at all about legislation in the Campaign Guidebook, produced in the autumn, which probably accounts for its title "Twelve Wasted Years".
Finally, we should like to have firm assurances—rather firmer than my right
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hon. Friend gave in opening the debate—that the Bill is being drafted and will take a prominent place when he introduces it next Session.
5.8 p.m.
Mrs. Barbara Castle: The right hon. Member for Reigate (Sir J. Vaughan-Morgan), obviously nettled by the arguments of my right hon. Friend the Member for Battersea, North (Mr. Jay), tried to make some play with the attitude of the Labour Party towards the Resale Prices Bill. May I remind him that our attitude to that Bill was considerably conditioned by its timing. We objected to the fact that the Government could find time in this Parliament to smash the small man but could not find time to take legislative action against the monopolies and mergers which are far more responsible for keeping up the cost of living and destroying competition in this country than ever any small shopkeeper has been.
Sir J. Vaughan-Morgan: If the hon. Lady thought that the Bill would smash the small shopkeeper, why did she not vote against it?
Mrs. Castle: Because we know perfectly well that after the next election we shall be in power and we shall be able to put right the Government's policies.
Mr. Heath: Does that mean that the hon. Lady will make resale price maintenance lawful again next Session if her right hon. and hon. Friends get back to power?
Mrs. Castle: We shall introduce far more adequate safeguards on the basis of a survey of the situation and the economic consequences in retail distribution which the Government have never been prepared to undertake. May I also say to the right hon. Member for Reigate that I am surprised to find that he cannot read. When he refers to "Twelve Wasted Years" and says that there is no reference in it to the Labour Party's policy on monopolies, perhaps I can have a word with him afterwards when I shall be able to show him several pages on that subject which I have found very helpful.
I was very glad that in opening the debate the right hon. Gentleman the Secretary of State for Industry, Trade and

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Regional Development said that he welcomed expressions of opinion from both sides of the House to help him draft the necessary legislation and promised to take them seriously into account. I have a lurking suspicion that this is just an excuse for not having produced legislation earlier, but, nevertheless, I shall take him at his word and intend to give him some proposals which I hope he will agree should be acted upon, some of which could be done very speedily and by the administrative machine.
I was very struck by the right hon. Gentleman's phrase which I wrote down. It was, "Our purpose today must be to counter inflation by keeping costs and prices down". Therefore, it is in the light of that statement that both the Government's record and their proposals must be judged. I do not suppose that any hon. Member opposite would contend that in the past 12 years the Government have been successful in keeping costs and prices down.
Sir Ian Orr-Ewing Sir Ian Orr-Ewing (Hendon, North) rose—
Mrs. Castle: I am really sorry, but I cannot have every expression of opinion challenged, however it may strike home. I am afraid that the hon. Gentleman must try to catch your eye later, Mr. Deputy-Speaker.
Of course costs and prices have risen steadily over the past 12 years. Therefore, quite clearly new powers are needed and, what is even more important, as my right hon. Friend the Member for Battersea, North pointed out, is the will to use those powers. Let us have a look, therefore, at the proposals which the Government put before us. In effect, the Government are saying, "We quite agree that we have totally failed to do enough in the past 12 years, but re-elect us and we will take steps to bring costs and prices down." But is the Government's approach right and are the powers asked for sufficient?
Here the right hon. Gentleman is suffering from a certain kind of schizophrenia, because he says, on the one hand, that the best way to keep down the cost of living is to stimulate competition, but, on the other, that we must not suppose that monopolies and mergers are necessarily wrong because they are giving us
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the economies of scale. There are two objections to this confused line of approach of the right hon. Gentleman, two factors which I think the House ought to face. The first is that it should now be clear that there is a built-in determination by private enterprise to avoid competition if it possibly can. Private enterprise is not by instinct competitive; it is monopolistic and restrictive. It is all right the right hon. Gentleman shaking his head, but the evidence for that is in his own White Paper, because in it he himself points out that even when he set up the Restrictive Practices Court and outlawed certain practices industry very cleverly found new ways for achieving the same purpose. If price agreements were ruled out information agreements were entered into. The right hon. Gentleman admits that this had the same effect.
After a short period of the operation of the Act, therefore, an alteration of its powers has become necessary. Surely the very fact that when the Restrictive Practices Court was set up 2,000 restrictive agreements were registered shows that really the main source of restrictive practices in this country does not come from the trade unions. In so far as they have operated them, they have merely learned them at their master's knee. The real source of restrictive practice is to be found in private enterprise. Moreover, the very evidence of this—evidence which the right hon. Gentleman will not challenge because he referred to it in his speech—is that since 1956, when the Restrictive Practices Court was set up, there has been an acceleration of the number of mergers and the tendency towards monopoly.
The right hon. Gentleman says that he doubts whether it has anything to do with the setting up of the Court. I would merely refer him to the Financial Times, which has said on several occasions that this would be the consequence, that if we outlaw restrictive agreements private enterprise seeks to achieve its controlling position by means of monopolies and mergers. I suggest that the Government's basic assumption about the virtues of large-scale operations are far too facile. The White Paper says:
"Optimum efficiency of operation may demand large plants, costly research and highly developed marketing arrangements."

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It certainly demands the last of these things, as I shall proceed to show. But even if one agrees that this is what ought to happen, that economies ought to be achieved, what matters from the point of view of the consumer—and surely it is about him and her that we ought to be talking this afternoon—is whether these economies of scale are actually reflected in the selling price or whether they get swallowed up in something else. That is the test.
Mr. Heath Mr. Heath indicated assent.
Mrs. Castle: I am glad that the right hon. Gentleman agrees with me, because I want to say to him quite categorically that today that is not what is happening. Competition today has ceased over a wide field, certainly in consumer goods, and I want to limit myself to that particular aspect this afternoon. Competition today does not take the form of price reduction or even better quality. If a man is big enough to do it, he does not cut his prices in order to bring down his competitor. On the contrary, he pours out millions of pounds of money in advertising designed to kill his rivals. This is the kernel of the monopoly position today.
Indeed, in a static market where the demand for certain products has more or less reached saturation point, this is the only way in which competition can operate. Let us take soap, for example. Very few people today are not washing because they are not buying soap. What matters today in the market in soap from the point of view of the monopolist is not to increase demand by cutting the price but to get the other fellow out of the market by gimmicks, by advertising campaigns on television and in the Press that are absolutely farcical and economically totally unjustified. In fact, they put up the price. The level at which advertising costs are operating in British industry today gives, I think, the answer to the right hon. Gentleman when he says that large units will of themselves bring economies of scale. In 1963 no less than £510 million was spent on advertising and sales promotion, and the figure is still going up.
On Press and T.V. advertising alone £257 million was spent last year, an increase of 7½ per cent. on 1962. In the first quarter of this year there has been
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another increase of 13 per cent. over 1963. The bigger the units in industry, the greater the expenditure on advertising.
I suggest to the right hon. Gentleman that it is the marketing arrangements that monopolise the interest of the big units, not the research. The total research by private industry in 1961–62, which is the latest figure I could obtain, was only £365 million, covering the whole range of products, including computers, aircraft, and all the highly technical products, as well as consumer goods. Expenditure on advertising outweighs the research which is supposed to bring benefits to the consumers.
What benefit is the public getting from this? We are certainly not getting more competition, because I suggest to the Secretary of State that the cost of advertising today is the biggest barrier to the entry of new bodies into industrial production. This is recognised. It was recognised, for instance, by the Monopolies Commission on tobacco, which pointed out that Godfrey Phillips Ltd. was squeezed out because the company could not afford to hold its own in advertising in the domestic market.
This happens, in particular, in the big monopolies. Unilever is the biggest advertiser in Britain today. It is able to use the high profits it gets from its monopoly position in, say, margarine, in which it controls 80 per cent. of the market, to enable it to enter into other markets, like the frozen food market, selling Bird's Eye frozen foods, and dominate that market because it can afford to pour out advertising on a level which no smaller competitor can hope to match. Yet the consumer does not get this economy in scale reflected in prices.
Unilever has these economies in scale. Does it use them to help the consumer? On the contrary. I ask hon. Members to compare the prices of two of the soaps sold by Unilever—"Breeze" and "Astral"—for which it pours out huge sums in advertising, with the prices of unadvertised soaps of equal quality, such as Boot's unwrapped, unadvertised "Cologne" soap, which the Consumer Association's journal Which? put as a best buy in soaps. A large tablet of "Astral" is 1s. 9d. A large tablet of "Breeze" is 1s. 4½d. Boots "Cologne",

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described by Which? as the best buy, costs merely 10d. As has been pointed out, the cost of production of these soaps is probably about 2d.
It is the same with other products put out by Unilever. Unilever manufactures "Gibbs" and "Pepsodent" toothpaste. It is recognised that toothpaste costs more to advertise and sell than it does to produce. As the Financial Times pointed out:
"Advertising and selling costs form a higher percentage of the retail price of toothpaste than do production costs."
Advertising can be used, and is actually used, to offset the appeal of lower prices. The C.W.S. produces aspirins at 1s. per 100, but, because it is not able to advertise on an equivalent scale with the proprietary brands, the C.W.S. cannot hold its own against heavily advertised aspirins being sold at 3s. 2d. to 4s. 10d. per 100. It is fascinating to note how, time and again, Which? lists the best buys as the unadvertised products as against those of the proprietary brands of the monopolies. The more expensive the advertising, the more misleading it often is.
I am very glad that the question of detergents has been referred to the Monopolies Commission, and about time, too. I ask hon. Members to think of how many times we have to watch "Daz" advertisements on television before we can go on enjoying the evening's programme. It is salutary to be told by Which? that these synthetic detergents, which were submitted to washing tests, are not as good value for money as soap powders, and "Daz" was among the poorest. I should warn the House, too, that adding "Flash" to "Daz" did not improve its performance.
This is now being carried to absolutely ludicrous lengths. An example came to my attention only a few days ago. We all know what an animal-loving nation the British are. They can be lured into spending ridiculous and unnecessary sums upon their pets. Pet Foods Limited, which has 90 per cent. of the market in dog foods, has struck a new all-time low in advertising. The company used to produce a pet food called "Chum". In the Daily Express of 1st July there appeared this advertisement, five columns wide:
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"You can buy many kinds of dog food but only one is made for pedigree dogs—New Pedigree Chum. Pedigree Chum is a new food for pedigree dogs—as carefully planned and prepared as many of the foods you eat yourself… Helps bring out the champion qualities in your dog."
An advertisement of that size for one issue alone costs £3,000. Yet, according to The Grocer, "New Pedigree Chum" is exactly the same product as the old non-pedigree "Chum" and is sold at exactly the same price.
It may seem to the House that that is a farce. Of course it is a farce that this should be the dominating factor in the control of the market in consumer goods today. It may not matter so much in dog foods, but when it is applied over the whole range of consumer goods, as it is, it is time we took some action.
Clearly what we need is less advertising and more independent consumer surveys, market research and reports. The time has come when this question of advertising should be treated very seriously. It is extremely difficult to break through the net. The newspapers are dependent on advertising. Fat profits are being made in television on the basis of advertising. It is almost impossible to get the truth against this network of vested interests.
I agree with Professor Nicholls, who in his book on the United States tobacco monopolies pointed out that control of advertising and the reduction of the power of big advertising was "the key to the monopoly problem" and that without some such action, by whatever means might be the most effective, all our talk about attacking monopolies is so much eyewash.
The next conclusion to be drawn from all this is that there must be greater supervision of price. Even in those cases where the Monopolies Commission has recommended action on price, the Conservative Government have refused to take it. Consider the matches monopoly, chemical fertilisers, the British Oxygen Co. Limited; time and again the Monopolies Commission has made recommendations about prices but time and again the Government have done nothing—because they have no intention of taking action to bring prices down.

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Even with a strengthened Monopolies Commission this situation of an artificially high cost of living would not be met. To begin with, esteemable as the members of the Monopolies Commission are, there is not a woman among them. They are mainly professors of economics or big businessmen—among whom, I have been interested to note, is Mr. Philip G. Walker, the gentleman who has just received a golden handshake worth £124,000 from the Reed Paper Group, I should have thought an effective example of monopolies. Are these the people who are to destroy monopolies in this country? I suggest that the House is very gullible if it believes that.
When the Monopolies Commission recommends action we need a Government who are determined to carry it out. Not once have this Government taken action on prices. I suggest to the President of the Board of Trade, if he really wants to do something about the cost of living, that he should give the Consumer Council power to conduct spot checks on prices when it is felt that they are unnecessarily high. It is obvious that the Government will not do it because they do not want high prices to be broken down. For them there is a political argument in concealing the facts, because then they can say to the country, particularly at the time of a General Election, "If it were not for these terrible wage increases the cost of living would not be as high as it is". They should add that it was the Government's National Incomes Commission which stated in its Report about the construction industry that it was impossible to say whether proposed wage increases were inflationary until fuller information about the pricing structure and profits of the industry were available.
A Consumer Council, strengthened as I suggest, would know better than any Registrar whether or not a prima facie case existed of over-high prices being charged. It should then have power to examine all the costs involved to see whether a fair price is being asked. No one is suggesting a widespread reintroduction of price control; merely the right of the public to have full information.
Mr. Heath: The hon. Lady has spoken about prices and has said that nothing
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has been done. She also mentioned chemical fertilisers. She must realise that Fisons gave an undertaking to the Government that it would not make the excess profits of which the Commission complained, and the firm said that it would adjust its prices accordingly. I have just seen the auditors' statement following an examination of books and they have assured me that Fisons' undertaking has been carried out. This is a clear example of the exaggerations and distortions of the facts by the hon. Lady and her right hon. Friend a short while ago. This shows that action has been taken by voluntary agreement and has been certified as such.
Dr. Jeremy Bray: Will the right hon. Gentleman say how many years Fisons continued to charge high prices after the firm had submitted its evidence to the Monopolies Commission but before the Commission's Report was made?
Mrs. Castle: Obviously, the right hon Gentleman will not answer that one.
Mr. Heath: I did not rise to answer immediately because I did not want to interrupt the hon. Lady again.
Mrs. Castle: I do not mind.
Mr. Heath: After the Commission's Report, the Government entered into discussion with and that firm gave an undertaking. That undertaking has been carried out.
Mrs. Castle: I am grateful to the right hon. Gentleman for having mentioned Fisons, because one of the things which has interested me in my study of Which?, which I conduct carefully each month, has been to note the report in Which? about liquid tomato fertilisers. Fisons' highly advertised proprietary brand came well below the Boots' fertiliser, which was recommended as the best buy at 3s. for 20 fluid oz., against 3s. 9d. for 16 oz. being charged by Fisons.
Britain today is riddled with unnecessarily high prices due to the operation of monopolies and the Government's neglect to do anything to get at the kernel of the problem. It is obvious that, if they want to strike a blow against the high cost of living, they must give the Consumer Council the powers for which I ask. Let the public know how these

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prices are made up, how much is spent on research, advertising and the inflated and unnecessarily high profits which many companies are making, and let them know what the fair price should be so that public pressure may be brought to bear on these companies.
5.37 p.m.
Mr. Charles Fletcher-Cooke: The hon. Lady the Member for Blackburn (Mrs. Castle) took as the theme of her speech the idea that the only way to reduce the power of monopolies was to cut down their advertising. That raises all sorts of interesting questions, most of which, I suppose, are answered in the pamphlet "Twelve Wasted Years". How would that document suggest cutting down the advertising of, for example, the National Coal Board, the Gas Council, the Egg Marketing Board and, if it has any proposals for cutting it down, how would it reduce their monopoly position?
Mrs. Castle: There is one way by which one could immediately prevent there being an increase in advertising; to oppose the suggestion which is now being made to the effect that Mr. Charles Hill, the head of I.T.A., is to allow A.T.V. longer advertising time to enable it to recoup any losses it may have made in its huge profits as a result of the strike.
Mr. Fletcher-Cooke: I hope, on the other hand, that the hon. Lady is aware that, from the point of view of the public monopolies, they seem to regard advertising as essential to their way of life. One advertising agent in London carries £4½ million worth of advertising every year for the public monopolies of gas, coal, egg marketing and something else. There are many other agencies doing the same. If the way to reduce monopolies is to reduce advertising, one would have thought that those public monopolies would be prepared to set an example and stop their advertising, and see what would happen. Perhaps the suggestion is that one should have a tribunal on all advertising to see whether or not it is approved by the authority in power at the time. That would be an interesting suggestion and one which may emerge in the propaganda of the party opposite.
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I wish to deal with an interesting case which has been mentioned and which is of constituency concern to me. It is the report on the supply of wallpaper. The Wallpaper Manufacturers' Association has its chief mill in my constituency. The Belgrave Mill, which produces Crown Wallpapers, is a very fine mill indeed. It is becoming more and more automated. It was rebuilt only a few years ago, and it has been under severe scrutiny from the Commission for two years. We are concerned, therefore, with a relatively rapid report. The business has emerged fairly well, although the Commission made three recommendations. The recommendations are, first:
"That the group which at present produces 80 per cent. of the wallpaper of this country should not in future acquire interests in undertakings engaged in the manufacture of wallpaper without obtaining the consent of the Board of Trade.
(2) That the group should not provide the practice of exclusive trading in its supply of wallpaper without the like consent.
(3) That the group should terminate its existing resale price maintenance arrangements in relation with sales of wallpaper, and should not enter into any new such arrangements."
Although my right hon. Friend did not say so, I understand that the firm has entered into all those undertakings already, and has done so very quickly and, I think, very honourably.
There has been no criticism at all of the profits of this large business, because the wallpaper it produces for this country and for all over the world is, on any measurement, by far the cheapest in the world. Making all allowances for the differences in prices, and in real and money terms, we get our wallpaper far more cheaply than anyone else. It is therefore quite wrong to say that there are not advantages from time to time in large-scale operations. The concern is not a monopoly, of course, although it sells 80 per cent. of our wallpaper production. The figure has fluctuated over the years; at one period it was down to nearly 60 per cent., but I believe that it is now about 80 per cent.
The interesting thing is that another great concern—Imperial Chemical Industries—is now moving into this business. It has started to buy wallpaper

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mills, and to produce wallpaper in com petition with Wallpaper Manfacturers. It is, therefore, not quite right for the hon. Lady to say that there is a "built- in refusal to compete" those were her words—in industry. If there were such a built-in refusal to compete, it is doubtful whether I.C.I. would start in on a trade in which it has never been before, against a firm that has for many years held such a dominant position. One can visualise a very considerable increase in competition in that business—
Mrs. Harriet Slater: The hon. and learned Gentleman seems now to be telling us that the Crown Wallpaper Company has, as he understands, accepted all the recommendations of the Monopolies Commission, but is it not the fact that it was because it did not adopt, in that list of items, the reduction in prices that the Commission had to inquire? Can the hon. and learned Gentleman give us some evidence of where the firm is now reducing prices?
Mr. Fletcher-Cooke: The Monopolies Commission made no complaint at all about the prices charged for the wallpaper. All I say is that the wallpaper produced by this concern is cheaper than that in any other country. There is no complaint on price. The only complaint made by a Monopolies Commission related to exclusive trade in its outlets and to resale price maintenance. It also said that the firm should not acquire any more mills without the consent of the Board of Trade. The firm has adopted all those requirements within a matter of weeks or months of the Report. It was not mentioned—perhaps he did not know about it—by the right hon. Member for Battersea, North (Mr. Jay) in his great complaint about delay, inaction, feeble action, and the rest, but here is an example of where the Commission and industry have both done their part in adapting our modern business to the modern world.
Opinions change, of course, and it may be asked, "Why didn't they do this before? Why did they adopt this practice of exclusive dealing?" The truth lies in the climate of opinion in economics. As the years go by, and as conditions alter, people's views of what is right or wrong in these matters also alter.
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It is, therefore, necessary to have a Monopolies Commission to point out to people that they are not in line with modern economic thought. If it were not necessary, there would be no point in all the structure we have set up, but that is the point of the structure, and it is what I seek to defend because, from the example I have given, I think it to be the right structure.
The company had no criticism made of its profits, it has good labour relations and very good mills. As to resale price maintenance, only 40 per cent. of its papers were price maintained owing to individual methods of marketing the papers. That practice it has now abandoned and says that it will not seek to justify it before the Restrictive Practices Court. It will not seek exemption under the new Measure.
Another interesting thing about exclusive trading rather illustrates my point that very often not only does the climate of economic opinion change but also that very often business men do better when they do not seek to tie up their outlets or their competitors than when they do. I am told that since the concern abandoned exclusive trading—which it did in the course of the inquiry, no doubt because it saw that the case was not going down very well with the Commission at that time—it has done very much better, because many of the outlets were not prepared to sign up on an exclusive trading business, so that the firm could only get all or nothing. Now it is getting many new retailers and many new outlets from those who did not want exclusive trading. Here, therefore, is an example of where virtue gets its own reward.
Again, this is an interesting case, because it shows that the mere big size of a business—I hate to call it "monopoly "—is not a serious problem provided there is competition from home and from abroad. I do not agree with the hon. Lady when she says that large ness of business rarely brings advantages of scale—
Mrs. Castle Mrs. Castle rose—
Mr. Fletcher-Cooke: I will give way in a moment.
I think her argument was that it can bring advantages of scale but that in this wicked world it does not, because

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the money that should be devoted to such advantages as the streamlining of marketing or more basic research is channelled into a less worthy cause—mat of advertising.
Mrs. Castle: I tried to say that it no doubt does bring economies of scale, but that those are not passed on to the consumer. Instead, they are retained in excessively high profits, or spent on advertising to keep out the competitors.
Mr. Fletcher-Cooke: From the examples that the hon. Lady gave it does not seem to affect the competitors. When she spoke of Boots' fertilisers being considerably cheaper than Fisons', it struck me as a very good example of competition in which the person who does not advertise was probably driving a very thriving trade in the face of a very big competitor. I have not seen any lack of business in Boots', or in any of the firms to which the hon. Lady referred. It only shows that there is an awful lot of claptrap spoken about the word "monopoly" itself, because these are not monopolies at all. If one can walk over to Bridge Street and buy Boots' aspirins at half the price others are asking, what the hon. Lady says is the wicked monopoly in drugs is shown to be nothing but a figment and a bogey in some people's minds.
The only monopoly where we get up against impossibility and illegality of competition is in the State monopoly. There it is a criminal offence to compete. That is what rather frightens people who believe, as I do, that it is only by competition that we can make ourselves efficient. That is why I am in favour, as a way of dealing with big-sized business, of lower tariffs from abroad. If we must accept the big-sized business, as I think we must, one sanction against its abuse of power is to lower the tariff against foreign competition. But I fear that in a case of State monopolies any Government of any complexion—and I do not attack particularly the party opposite in this—are bound to preserve that monopoly in face of competition because they dare not admit for other reasons to seeing that their child goes bankrupt or does not compete successfully.
Mr. George Darling: Surely the argument is that
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these monopolies do not allow competition. is the hon. and learned Gentleman suggesting that we should have competition in electricity services in the same area, which would be so very costly?
Mr. Fletcher-Cooke: The case of services as opposed to goods is rather different. In South Wales when the steel people wanted to import cheaper coal they were told by the Government that they must buy the more expensive home product. When B.O.A.C. wants to buy the cheapest aeroplanes it is told that it must buy the same product for political or other reasons on a noncompetitive basis. Any Government will do this because they have non-commercial obligations to the taxpayers and to employees. This inevitably means that they have to break the rules of competition in favour of nationalised concerns.
Mr. Austen Albu: Was the obligation to which the hon. and learned Member referred to a nationalised industry or to a private air corporation?
Mr. Fletcher-Cooke: It is an example of cheating in reverse. It means that the power of direction which the Government have, whether expressly or implicitly, over nationalised industries is used for purposes which are noncompetitive. I fear it very much in the case of oil and coal. The Government put a tax on oil expressly for the purpose of preventing the operation of competition against coal. One can do this for a short time but, in the long run, one reduces efficiency and, therefore, the competitiveness of the economy.
This is why I fear the extension of this practice. It is much too tempting to a Government, even if they have no monopoly and their own concern is in competition with private concerns. If the Government feel that their concern is going badly they feel that they must save the taxpayers' money by giving that concern some preference other than the market allows.
We should realise that there is no monopoly unless it is 100 per cent. water-tight, and there is no such thing in this country or any other country that I know except that owned by the State. The

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present system of controlling big-sized business in this country is as good as we can get. In America there is such bitterness between the Federal Trade Commission and the Department of Justice and business that the time taken in the end in anti-trust suits is far longer than even the long periods to which the right hon. Member for Battersea, North objected, very largely because the sanctions are far more swingeing.
I think that we could reduce this time and I am glad that the membership of the Commission is to be increased. I would not go as far as my right hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan) did in suggesting almost unlimited numbers. This is very much a question of public opinion, and public opinion changes. It is important therefore to make the right selection, and I am sorry that there is not a woman on the Commission. At one time the membership included Mrs. Robinson, a very distinguished lady of Left-wing persuasion. One has only to read down the list in these Reports to see how membership must be selected on a very careful balance of political views. Any Government must do that when the Monopolies Commission is in the position of acting judicially, as it must.
I do not think that we would find more than 25, as most, of people who are not only able to act judicially and produce a balance of political opinion but who also will be sensitive to changes of political and economic opinion. Theirs is a far harder job than that of a judge, where the principles which he is given to apply are specific and more immutable. Here one makes up the principles as one goes along. There is little guidance from the statute; one is forming opinion at the same time as one is interpreting it. The number of people of that quality who would be prepared to do this, not as their main and exclusive work but often as part-time work, is very limited indeed. This seems to me to be an important factor in limiting the size of the Commission, although I think that it should be increased.
The White Paper strikes the right balance. On the "battle of the mergers", that is to say, to what extent they should be prevented before they take place if there is a prima facie case against them, there is; here a careful balance of
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opinion. If the Commission can be strengthened in its members to the extent to which I should like to see, the crash programme suggested by the right hon. Member for Battersea, North might well be looked at. There may be mergers where a divesting decree ex post facto might have to be made. If that were so, it would be terrible to allow it to take place and then to divest it. We should get the worst of all possible worlds.
If some machinery of a rapid kind can be devised in the very few cases where it is necessary, that should be provided, but it will be extremely difficult and perhaps impossible. We therefore look forward to the new legislation with great interest. I do not think that the party opposite would depart very much from the legislation that we propose if the responsibility were theirs. One has not yet heard any serious criticism of the legislation foreshadowed in the White Paper from the benches opposite. I should be surprised if there is any. In the matter of controlling terms of trade there is a pretty good unanimity of opinion, and I am glad to see that my party has taken the initiative in the matter.
5.58 p.m.
Mr. Donald Wade: In paragraph 3 of their White Paper the Government say that
"They are satisfied that legislation on monopolies and restrictive practices on the present lines effectively meets the particular requirements of this country."
It seems to me, however, that publication of the White Paper in itself is evidence that existing legislation has not yet effectively met the country's needs in the matter of restrictive practices and monopolistic conditions. Whether one agrees that the nature of existing legislation is of the right kind or should be altered, it must be admitted that there has been a reluctance on the part of Governments here to come to grips with restrictive practices in industry.
It is very important in a mixed economy that there should be genuine competition. I watched the rather strange confrontation between the Deputy Leader of the Opposition and the Secretary of State for Industry, Trade and Regional Development a few days ago on television. I had the impression that the Deputy Leader of the Opposition was

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trying to prove that the Labour Party did not differ from the Government on nationalisation.
Whether that is so or not I do not know, but that is another subject. Both, however, agreed that this was a mixed economy. In the private sector of industry profits are a convenient method of payment for the risks and responsibilities involved, and they can be justified as an incentive for efficiency, but profits cannot be justified if they are achieved by rigging the market at the consumer's expense.
I am not suggesting that the whole of industry is absolutely lush with profits comfortably made. In my part of the country in the textile industry competition is quite keen, and in some industries—for example, those concerned with manufacturing machinery for the textile industry of which I have some knowledge—it is sometimes difficult to find any profit margin at all. But the general principle is true that in the private sector of industry there must be genuine competition. This is not something that happens as a matter of course. There must be a continual watch on industry and on the economy, just as there must be a continual watch on the nationalised sector to see whether there are those failures to which nationalised industries are particularly prone.
In the pre-war days there was no legislation on this subject at all in this country. It is true that the climate was very different, but I do not agree that in those pre-war days nothing was needed at all. Many references have been made to party documents, and I could quote the Liberal reports of 1928, 1938, 1945 and 1959 but I do not propose to burden the House with a summary of those reports. I would point out, however, that the 1945 report of a committee under the chairmanship of Sir Arthur Comyns Carr foreshadowed most of the legislation that has been introduced since the war, and when the Monopolies and Restrictive Practices (Inquiry and Control) Bill was introduced, in 1948, Lord Shawcross, who was then President of the Board of Trade, with a generosity that is not always to be found in party politics, acknowledged his debt to the Liberal report of 1945.
The Monopolies Commission having been set up, it has worked very slowly
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and laboriously. It has done some good work, but I think there is a general consensus of opinion about the long delay, and action by Governments in carrying out the recommendations of the Monopolies Commission has been the exception rather than the rule. It has already been pointed out in this debate that only one order has been made on the 18 recommendations. In fact, two have been made but only one on the 18 recommendations during the life of the present Government. Before that, I believe there was one on dental goods. Then we had the setting up of the Restrictive Practices Court in 1956, but, again, there has been this long time lag.
It has often been contended—I have heard it stated on a number of occasions by Government spokesmen—that the withdrawals of agreements that have been registered are a clear indication of the effectiveness of the Restrictive Trade Practices Act. I do not think that that is so. I think the contrary is now admitted by what is said in the White Paper. It has been known for a long time that there are these information agreements and what are known as open price agreements replacing other restrictive agreements. Under an open price agreement there is no apparent compulsion on the members to charge the same price. All that happens is that they inform each other of their prices and keep them mysteriously in line. It is possible to break away from an open price agreement, but a variety of pressures, from control over distribution outlets and supplies to pressure inside associations, can be and are used to keep the members of the industry in line.
In May, 1963, the Select Committee on Nationalised Industries, reporting on the electricity supply industry, said, on cables, where the system of common prices was condemned by the Monopolies and Restrictive Practices Commission in 1952;
"Several area boards find that the prices quoted for cables are the same, a fact attributed by them to the system of price leadership adopted by the manufacturers. Ring prices still exist among the manufacturers of high voltage cable."
On transformers, the Select Committee stated:
"The Board"—

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that is, the Generating Board—
"think that while the manufacturers have observed the letter of this decision, they have flouted its spirit by adopting a system of price leadership."
Price parallelism is remarkable in many other industries, from flour milling to baler and binder twine.
The Registrar of Restrictive Practices put it modestly in this way in his Report, published in January, 1964:
"Information agreements do provide a framework within which, consciously or unconsciously, there may arise understandings about prices, allocations of contracts and so on."
It is putting it very moderately to say that there were understandings about prices.
I think that the seriousness of these information agreements has now been realised and it is suggested that action should be taken, but not until the next Parliament. Again, we have this long deay. Here I might interpose that I am still puzzled over the reasons for the Government's decision to act on r.p.m. first while leaving these other very important matters for another Parliament. They seem to have got their priorities wrong, and I have not found any adequate explanation for that. I think that it arises from this reluctance, to which I have already referred, on the part of Governments to tackle this whole subject of restrictive practices at the manufacturing end of industry.
Another example of this reluctance was the cutting down of the Commission in 1956. I know the reasons that were given, and the Secretary of State mentioned them in the opening of this debate. I opposed that at the time, and it very soon became clear that the Commission needed expanding.
One last reference to a Liberal report. In 1959, a report stated emphatically that there was a clear need for the immediate introduction of a Bill to increase the size of the Monopolies Commission. That was five years ago, and now, in 1964, we have a recommendation in the White Paper that it will be done in the next Parliament. Not only are we faced with these delays. We are also faced with the danger of the Restrictive Practices Court being overwhelmed with work. The Court has been working slowly and there is still a great deal to be done. I understand
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there are 430 cases still waiting to be dealt with. Now we are to place in the Court the additional work resulting from information agreements having to be registered. There is a danger that the process may be still slower.
Under those circumstances, what are we to do? I suggest first that certain major restrictive practices—probably the collective boycott is as good an example as any—should be banned outright.
Sir Ian Orr-Ewing: They have been.
Mr. Wade: Yes, but it is not made illegal, that is, it is not an offence.
Mr. Jay: It is illegal, but it is dealt with by the injuncture procedure.
Mr. Wade: Yes, but I would take it a little further. I am suggesting that it should be made illegal in the criminal sense, that certain well known restrictive practices—I am using that as a general term—should actually be made an offence, along the lines of legislation in the United States. I do not say that because something is done in the United States it is necessarily best for other countries to do the same, but I put forward that proposal as a partial solution to the problem.
Mr. Fletcher-Cooke: I am very interested in what the hon. Gentleman says. One could see the point of it if there were any evidence that the existing sanction against the collective boycott was too weak. But is there any such evidence, and, if not, why pile a criminal offence on top quite gratuitously?
Mr. Wade: I am inclined to think that it is too weak. I was going on to say that it is most important that the position should be abundantly clear. I have no wish to create a lot of new offences, but I think it better that the business community should know exactly where it stands, there being a risk, as in America, of directors being found guilty of an offence if they ignore the law.
Sir J. Vaughan-Morgan: The hon. Gentleman is under a misapprehension. As I understand it, if an order is issued to abandon a boycott and it is not obeyed by the directors or the company, they are then in contempt of court, and

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the penalties are infinitely greater than anything that Parliament is likely to lay down by statute.
Mr. Wade: Yes, but that comes at the end of a rather lengthy procedure. That is the point I am trying to make. If I may give an example, when we were considering the Resale Prices Bill, I endeavoured to advance the proposal—the new Clauses were not actually called—that certain actions on the part of the manufacturers or suppliers in forcing shopkeepers out of business, to put it in the simplest terms, should actually be an offence, as under Canadian law. In my view, that would probably have been better than the very complicated Clause dealing with loss leaders which was ultimately passed.
Mr. Duffy: I am most interested in the hon. Gentleman's reference to American practice. Will he tell the House what he has in mind as the penalties to which directors should be exposed?
Mr. Wade: A fine. Obviously, if there were contempt of court and one persisted in disobeying the court, the ultimate sanction under the procedure of any court would be imprisonment. But, in talking about penalties, I had a fine in mind. Once the position became known it would be most unlikely that offences would be committed.
The Minister of State, Board of Trade (Mr. Edward du Cann): I am anxious to dispose of this point which, obviously, is of great interest to both sides of the House. While we shall, of course, consider most carefully what the hon. Gentleman has been good enough to say, for it is a practical suggestion, I must advise him that we are entirely satisfied with the procedure as at present operated, which we believe to be operating satisfactorily.
Mr. Wade: I take that point, but I am at issue on the question whether it is operating satisfactorily, and I am very much concerned, also, about the delays which may result from adding a further burden to the procedure already in operation. As regards the existing procedure—this is my second point—I agree that we must try to stop up the loopholes by adding information agreements and we must try to accelerate the work of the Court.
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Thirdly, we must try to tackle mergers and industrial concentrations. I rather doubt that the Government's proposals, namely, the process of examining afterwards rather than beforehand, will be effective. By an Amendment to the 1956 Bill—the debate will be found in HANSARD of 26th April, 1956—I proposed a procedure for examination and obtaining consent before certain mergers actually took place. This was turned down by the Parliamentary Secretary to the Board of Trade at the time, who said that he regarded it as a very difficult and novel departure. Now, however, it is recognised that something must be done about mergers.
The T.U.C. Report suggests that the Government should institute an inquiry along the lines of the Radcliffe Report into the whole subject of concentration in industry. In my view, a once-for-all report would not be the best method. We have had a great many once-for-all reports, and I consider that it would be preferable to have some kind of permanent department of the Monopolies Commission collecting information, as is already done in the European Economic Community. This would assist a policy under which permission would have to be obtained before certain amalgamations took place.
As regards investigations, there would be investigation as to whether there was foreign competition—this would arise in deciding whether or not a merger was in the national interest—as to whether it would lead to a protected monopoly or semi-monopoly, and as to whether there were any alternative products with which the particular industry would compete. I have already mentioned the proposal which I made on the Resale Prices Bill.
Fourth, on the subject of concentration in industry, one must remember that it is in the public interest, first, to avoid too much concentration of power and, second, to avoid the maintenance of unnecessarily high prices. I rather doubt that the present procedure, even as amended according to the proposals in the White Paper, will tackle sufficiently effectively the whole problem of rising prices. Therefore, I should propose the creation of a department of the Monopolies Commission which would be given the duty of collecting information on prices, with power to call for price lists

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from the major firms and the nationalised industries. With the information so obtained, it would be easier for the Monopolies Commission to make recommendations upon which the Government could act.
As regards action, one most important direction would be in the direction of tariffs. In my view—this is my fifth point—there may have to be a new policy for dealing with tariff reductions. It has been said generally that tariffs should be reduced only as part of a bargain with other countries or that they should be held up altogether because, for instance, of our intention at one time to enter the Common Market. We have now reached the stage when some unilateral action may be necessary, even if it be only a threat. One must not forget how rising prices, often protected by import duties, affects one industry and then another. There is a chain reaction.
In this connection, I make my last quotation. It comes from a booklet entitled "Expansion without Inflation", and it reads:
"When Mr. Paul Chambers, Chairman of I.C.I., was under heavy criticism recently for the enormous tariff protection enjoyed by so many I.C.I products, he said in defence of his firm that if it were not for the high cost of fuel in this country he would not need any tariff protection against foreign competition The steel makers complain bitterly about the high price of fuel which they say makes their steel prices uncompetitive. The Government forbids them to import cheaper coal or coke. Meanwhile, the shipbuilders say that owing to the high cost of steel components for their ships they are priced out of the export markets."
My sixth point is that increasingly this is becoming an international problem. That is why nationalisation is so irrelevant. For example, there are world-wide cartels. I understand that there is a world cartel in machinery for the flour-milling industry, which indirectly affects the price of bread and facilitates the agreement between Rank's and Spiller's to prevent competition in flour milling. I understand that there is a world cartel in nitrogen. I refer particularly to the European agreement known as NITREX, which leads to fixed prices, affects the cost of nitrogenous fertilisers and affects the overhead costs of farming.
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In circumstances of that kind—and this problem will grow—there must be international action. The problem cannot be solved nationally. As a step in that direction, I suggest—it would be worth trying—the setting up of a joint working party with representatives of the American Anti-Trust Authority, the European Directorate of Competition and the British Monopolies Commission.
Mr. Jay: And the Registrar.
Mr. Wade: I summarise my six points. First, in certain cases there should be a banning of some restrictive practices. Secondly, there should be a speeding up of the work of the Restrictive Practices Court. Thirdly, there should be a determined attempt to tackle mergers and monopolies and to ensure a more expeditious working of the Monopolies Commission. Fourthly, there should be the setting up of a new prices department of the Monopolies Commission. Fifthly, we should use tariffs as a means of reducing prices and preventing price fixing. Sixthly, we should work for international agreement on world prices and cartels.
If, however, anything is done, there must be the will to act. I revert to my original point. The failure to act has been in part due to a lack of will on the part of the Government. The White Paper contains improvements on existing procedure and it may be that it is better late than never, but this is not an occasion on which the Government can be congratulated. They have introduced a White Paper containing intentions which we can do no more than debate. It can only be put into effect in the next Parliament and it is only being debated at the fag end of this one.
6.23 p.m.
Sir Ian Orr-Ewing: I hope that the hon. Member for Huddersfield, West (Mr. Wade) will excuse me if I do not begin by dealing with his arguments. I wish to refer during my remarks to some of the aspects with which the hon. Member has dealt.
To start with, I should like to deal with the right hon. Member for Batter-sea, North (Mr. Jay), whom we were interested to see opening the debate

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for the Opposition. With his great intellectual powers, the right hon. Gentleman can see all the advantages and disadvantages of public and private monopolies. We on this side are with the right hon. Gentleman: we see the disadvantages in these monopolies.
The right hon. Gentleman quoted his wisdom and foresight in 1956. I should like to quote from his foresight in October, 1959, when he said:
"The truth is that the public monopoly was suitable only for public utilities but"—
he continued—
"not for manufacturing industries."
I should like to know whether the right hon. Gentleman has changed his view and now feels that steel, which is clearly a manufacturing industry and a basic one, is ripe for nationalisation, because he has had a severe change of view since 1959.
Mr. Jay: I said earlier this afternoon that the evidence in the steel industry over the last few years is very convincing on this point.
Sir Ian Orr-Ewing: Perhaps I may give the right hon. Gentleman a chance with another quotation to give more reasons or views. In 1962, in that admirable book in which the right hon. Gentleman dissected the disadvantages of nationalisation, he went on to say:
"But if a Government proposes to take over an industry compulsorily, that so-called industry has to be exactly defined."
This gives the right hon. Gentleman an opportunity of defining the portion of the steel industry which he wishes to take over.
Mr. Jay: Not now.
Sir Ian Orr-Ewing: I am grateful for the right hon. Gentleman's courtesy. I feel sure that at a suitable and early moment he will make certain that this is put before the country, because the people are entitled to know.
We always listen with interest to the hon. Lady the Member for Blackburn (Mrs. Castle), because she is stimulating in every way. We feel that as an ex-member of the Bevanite group, the hon. Lady now probably has more influence on the Leader of the Labour Party than many other people. Therefore, we
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listened to the wisdom with which she said that the Labour Party would control advertising, supervise prices and more or less make Which? compulsory reading for the electorate, as well as many other interesting possibilities which, I am sure, will be included in the next edition of "Signposts for the Sixties". My hon. Friend the Member for Cleveland (Mr. Proudfoot), if he catches your eye, Mr. Speaker, will demolish the hon. Lady's arguments about the action which has or has not been taken by the Restrictive Practices Court, but I should like to demolish her arguments about the cost of living. I realise that as a Member of Parliament, the hon. Lady must get other people to help with at least part of her shopping.
The facts are that during the last year of Labour Government, the cost of living rose by no less than 12 per cent. During the last five years, it has averaged a rise of 2½ per cent. Over five years, therefore, we have stabilised to a far greater extent than the single rise in the cost of living in the last year of the Labour Government. If any hon. Member likes to refute this, I shall be glad to give way. The average increase over the whole period of Labour rule was 6½ per cent. a year. I am sure that the electorate will take note of these facts.
In introducing the White Paper, my right hon. Friend the Secretary of State for Industry and Trade showed the history of Tory legislation and the introduction of greater competition, which has made its mark on the rise in the cost of living, which has been much more stable than under Labour rule. One thing in which I agree with the hon. Lady the Member for Blackburn is that life is easier and more comfortable if there is no competition—of course it is. Competition causes discomfort and rearrangement of plans for people who work in industry. It causes discomfort for the managers in industry, and discomfort very often to the shareholders. Surely, however, the nation is mature enough to realise that we have no choice on this issue. This is the only corrective. We must have price competition if we are to pay our way in the world.
Monopolies or near monopolies can often charge more or less what they like. We see this in the bus service in London,

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with which my constituents are concerned. Those who organise the services can meet wage demands and then charge the expense upon the prices of their commodity or service. They can cut hours and again add to the cost of the service. I therefore believe that a monopoly or near monopoly is, on the whole, bad and would need to be properly justified in this country of ours, with our vulnerability to competition from overseas, if it is to continue.
Mr. Cyril Bence: I agree with the hon. Member that competition is uncomfortable for those who take part in it, but would not the hon. Member agree that it would be much more comfortable for many business men if bankers began to compete with each other in rates of interest for overdrafts?
Sir Ian Orr-Ewing: If the hon. Member wants to borrow money, he can peddle around the banks and see whether he can get a competitive rate. I agree with the hon. Member: I should like to see the banks compete more. My mother was the only woman I have ever met who, when sent a note asking what steps she would take to reduce her overdraft, said, "If you send another of these rude letters, I shall take my overdraft away." As at the beginning of the next month she got another such letter, she removed her overdraft to another bank. There was more competition in the 1930s than there is today.
Mr. Duffy Mr. Duffy rose—
Sir Ian Orr-Ewing: I must get on: other hon. Members want to speak. We on this side of the House are sincere in that we want to break up monopolies. Hon. Members opposite want to set up monopolies. This is the basic difference between us.
Mr. Duffy: Would the hon. Gentleman give way? This is very important.
Sir Ian Orr-Ewing: No.
Hon. Members opposite must know that each further step of nationalisation, whether it be direct, under the Clause Four philosophy, or indirect, will make it just that much more difficult for this country to compete in the world. They must also know that it is extremely difficult to unscramble the eggs. It can
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be done in certain instances, but it is very difficult.
What I want to consider—and I am serious in this part of my speech—is whether there should be a better way of monitoring our public monopolies. If Parliament sets up a monopoly, it is impossible to discover or to probe whether the policy of that monopoly is in accord with the public interest, with that of the taxpayers who have to use it. Surely in the interests of efficiency there should be an independent judge. We have the Select Committee on the nationalised industries, but it cannot probe all the details of these great monopolies. We have come to accept that many of them cannot be changed. Therefore, the problem is to devise machinery by which they can be supervised.
I am sure that hon. Members will agree that Ministers cannot interfere too much in the nationalised industries. I was interested to read in the Economist over the weekend about an interview with Lord Douglas, who said that successive Ministers of both parties had been very reluctant to give him commercial directions about his aircraft buying programmes. I think that he implied that the VC10 was entirely his choice, although it was not, perhaps, the first choice of the Minister of the day.
We have in the G.P.O., our oldest monopoly, certain practices which I think have disturbed successive Select Committees and Public Accounts Committees but which are still going on. In 1950, the Estimates Committee pointed out that there was a ring from which all telephone equipment was bought. In 1952, the Monopolies Commission looked into the cable purchasing arrangements, again with a ring, and drew attention to the undesirable effects. In 1961, the Public Accounts Committee pointed out that, despite these criticisms, the Post Office was continuing to buy all its telephone equipment, both subscriber and exchange equipment, from the same five firms which it had used for over 30 years. In this current financial year, 1964–65, those orders will be worth not less than £51 million. It is, therefore, disturbing to find a public authority like this buying from a ring. I do not know how we will correct this situation if public authorities cannot be

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brought before the Monopolies Commission or the Restrictive Practices Court. This is not possible at the moment.
I have been looking at some of the prices of common goods which we all have to use. The cost of the telephone dial as supplied by the ring is 26s. The cost of the dial as supplied by the 25 per cent. of competitive enterprise which is allowed as a result of the Public Accounts Committee's recommendations is 2is. The cost of the same dial on the Continent of Europe is 15s. There is a saving of 5s. between the price charged by private enterprise and the price charged by the ring—roughly 25 per cent. On a £51 million programme, that is worth £12 million a year.
It does not stop there. This has an effect on our export industry, which will interest the Minister of State who supervises the export side of the Board of Trade with great acumen. Here there must be one of the greatest potentialities there is for our export business, because telephonic communications are growing, particularly in the newly-developing countries, at an enormous rate. They are growing in this country, too. Yet the exports from the British ring represent only 15 per cent. of its telephone business whereas the exports of the private enterprise side represent 50 per cent. of its telephone business. In a small country like Sweden, a member of the European Free Trade Association, the Ericson company is exporting more telephonic equipment than the entire ring in this country.
I raise these matters only because this is what happens with bulk-buying agreements, which are laid before the House. They are in the Library of the House and generally last for five years. If we do this decade after decade we must introduce some feather-bedding which acts against the competitiveness of our industry and particularly against our exports.
We have also come to appreciate in this country that public and private industry is competing in the same sphere. If we are to believe "Signposts to the Sixties", this idea is to be extended. We are told that this is to be done by the means of competitive public enterprise which is to be set up with publicly-
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owned plants to compete in certain industries. The machine tool industry is mentioned as a suitable one.
If this were to happen—and I am sure that the electors will be wise enough not to allow it to happen—would these public companies also be outside the probe of any future Restrictive Practices Court or Monopolies Commission? If so, it will be very difficult to ensure that there is fair competition.
This is illustrated by two instances which are vividly before the country at the moment—the B.B.C. and the I.T.A., one a private enterprise concern and one a public service. In broadcasting I am a great supporter of that idea. I believe in public service and private enterprise competition. But what happens? About 2½ years ago, the B.B.C. made a wage agreement and a 37-hour agreement with five extra hours for meals. Now the pressure has come on the I.T.A. The Authority says that if it is to meet the nearly £20 million additional levy out of its advertising revenue and other rising costs, it will not be able to grant the claims of 3,500 of its operatives.
At the moment the B.B.C. is operating at an annual loss of £12 million. What will happen? It will approach whoever forms the next Government and say, "With the advent of B.B.C.2 and because of increasing costs, we find it necessary to increase our T.V. licence fee by, say £2"—and I predict that it will be £2. This is a way in which the public portion of an industry can pass costs on to the taxpayer or licence-holder which the private enterprise sector cannot do.
To take another example, B.O.A.C. and B.E.A. both made very generous wage agreements with their air crews some time ago. Now, in spite of the fact that B.O.A.C.'s loss has built up to £80 million which the taxpayer underwrites, the independents say, "We have a claim for exactly the same conditions". A.S.S.E.T. has taken, up the case, and it is now being considered by the Industrial Court. If we are to have this system, which in some places is already built into our industrial organisation and is to be extended in other places if the Labour Party is to be believed, we must probe the public sector as well as the private sector. I ask my right hon. Friend to think most seriously about how this shall be done.

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There are many problems which we must consider. I do not think there is any major difference of opinion between the two parties. The only difference is in philosophy, which at this time is bound to be highlighted and is bound to become more acute. I hope that when the hon. Member for Sheffield, Hillsborough (Mr. Darling) winds up the debate he will tell us how the Labour Party proposes to stop abuses in the public sector, both where it has a monopoly and where it will be set up in competition with the private sector. We are sincere in this and we will do it. I hope that after the election when my right hon. Friend returns to the Board of Trade he will tackle this matter with the same vigour as he has shown in the past.
6.40 p.m.
Mr. Austen Albu: The hon. Gentleman the Member for Hendon, North (Sir Ian Orr-Ewing) really spoilt the interesting middle part of his speech by his references to television. The real trouble about the hon. Gentleman and his hon. Friends is that they think of television entirely in terms of a commercial competitive trading business. This is not what television is. It is something which this country, and every other country, has to take far more seriously, because of the enormous effects which television has on public opinion, on a nation's culture and on its morale.
The hon. Gentleman speaks of television purely as a matter of competition between the B.B.C. and the I.T.V., and thereby he does a great disservice to what has been done in building up standards for television in this country. So far, I have never heard it said that the B.B.C. has been paying its employees wages and salaries which are unreasonably out of line with their jobs.
As for the hon. Gentleman's remarks about the airlines, this brings us to some of the most difficult problems with which we have to deal in a modern economy. There is probably no case at all for the independent airlines, in view of the fact that most of them are merely providing capacity which ought to be used to take up the spare capacity of nationalised airlines.
Sir Ian Orr-Ewing: Nowadays, hundreds of thousands of people take their cars across the Channel by car ferry. This is entirely a private enterprise idea which was not thought of or started by the nationalised airlines. I do not see why one should stop people performing a public service of that sort, just because of some prejudice on this issue. I think that they should be allowed to carry on.
Mr. Albu: I am not thinking of that type of service. I am thinking in terms of where, because of the doctrinaire approach of hon. Members opposite, private airlines have been established in competition with the nationalised airlines which were already and are still in competition with airlines of other countries the world over.
Again, I have not heard it suggested that the salaries and wages paid by the public airline corporations are excessive. In fact, it has been suggested from time to time that the conditions of service, particularly of pilots, in the private airlines are not conducive to safety. Figures have been given recently which show that the standards of safety of some private airlines are not as good as they are in the public airlines in this country, or of large airlines in other countries.
Mr. Shepherd: is the hon. Gentleman really saying that it is necessary to pay a pilot between £5,000 and £6,000 a year in order to establish a requisite standard of safety?
Mr. Albu: I am really not in a position to say what anybody's salary ought to be. All I am saying is that I have never heard it suggested before that the salaries and wages paid by the public airlines are excessive, although I have sat on the Select Committee on the Nationalised Industries which has three times examined the airlines. Indeed, as far as I know they are completely in line with the salary rates paid by other airlines throughout the world.
The speech of the hon. Gentleman the Member for Hendon, North was really more about nationalisation than it was about the subject we are supposed to be discussing, the White Paper on Monopolies, Mergers and Restrictive Practices. It was interesting that he himself was more interested in the opportunities for businesses to sell to public corporations

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than in the effects of monopoly on prices to the consumer. He had, however, a quite interesting point about the Post Office. After all, the Post Office has been under the control of Postmasters-General from the Conservative Party for something like 13 years now, and if this system of dealing with a ring is something which ought to be abolished, why has it not been abolished before?
The truth of the matter is that although the hon. Gentleman may have had a good case, I am certain that the situation is more complicated than he thinks it is. He himself exemplified how this very complicated matter is in conflict with the ideological prejudices of hon. Members opposite who would like no interference at all with industry and have tried not to face what would be the effects of such a policy.
We are here concerned with three separate commercial practices and with their economic consequences. By economic consequences I mean, first, their general effect on industrial efficiency and, secondly, their effect on the prices charged to the consumers. In my opinion, by far the worst of the practices which we are considering is that of price fixing and other restrictive practices by a ring of firms, because this keeps in being inefficient firms without any compensating advantages at all through maintaining standards of production, or the advantages of large scale.
These practices have to a large extent been dealt with by the Restrictive Trade Practices Act and now will also be dealt with by the Resale Prices Bill, but there has been a very long delay in dealing with information agreements and in getting such agreements registered. The Registrar referred to this in his second Report and again in his third Report. It seems to me that the Government should have done something about this before.
The evidence is that the benefits of the abolition of these restrictive practices, particularly of price fixing, are mostly for the large and powerful buyers, as one would expect, but the small consumers still need protection by the abolition of information agreements.
The second industrial practice with which we are dealing is the formation of monopoly, or, in deference to the right
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hon. Gentleman the Member for Reigate (Sir J. Vaughan-Morgan), the tendency to form monopolies. This is mixed up with the third practice, the formation of mergers, because most large companies in this country have grown up in this way. This is not, however, necessarily the only way, because a large company can grow up organically by capturing a large part of the market, or because it introduces processes or products which require large amounts of capital which smaller firms cannot provide. The Reports of the Monopolies Commission over the years have shown the existence of a number of highly undesirable monopolistic practices as well as a number of cases of excessive profits.
It is on these that the Government have been so slow to act, as I think they have been very slow to give the Commission the resources it needs to deal speedily with inquiries. I liked the suggestion of the right hon. Gentleman the Member for Reigate of having a flexible number of Commissioners so as to be able to deal with a bulge in inquiries at any particular time, so that there need not be the delays which we have had in the past.
One of the things we have lacked is any report which I think we ought to have from time to time on the effects of Government orders to an industry to carry out a recommendation, or of the discussions with an industry and the agreements reached with an industry to accept the Commission's recommendations in the face of Government pressure. I should like to know what is the general effect, what has been the effect on prices, what has been the effect on trading practices of firms which have agreed to accept recommendations.
The last of the developments with which we are dealing, is the growth of acquisitions and of mergers. Some acquisitions are intended to promote diversification in industry or to insure against the decline in demand of the traditional products of a company. The dangers here are not of monopoly, or even of monopolistic tendencies, but much more the dangers of inefficiency due to the dilution of management. When a management, built up to deal with a particular industry, becomes a

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sort of financial trust with a large number of different kinds of industry under its control, the chances are that that management will not then be efficient. This is not necessarily a matter for legislation, but it is a matter for the Government who should be interested in the efficiency of industry. It can best be dealt with by the encouragement of competition with the firms taken over.
Then there is vertical integration which is also very often inefficient except in those cases where it is necessary because of the fragmentation of the industry, as in the textile industry, where vertical fragmentation in the past has been ludicrous and new processes are making integration necessary; but in general, vertical integration very often merely means getting a tied buyer, forced to buy at every stage from a seller above him in the vertical company, without any choice or competition in the product which he buys. I do not think this leads to economic efficiency.
The merger which gives rise to anxiety—the one with which we are really concerned—is the horizontal merger which reduces the number of firms in an industry. Here we have to look at the effects very carefully. Such a merger can, of course, increase competition, as it did in the case in the United States when the Chrysler Corporation and the American Motor Corporation were formed, because this brought together a lot of small firms which enabled them to face the two giants, Fords and General Motors, and to some extent one could say that competition was increased.
I personally believe that competition in the High Street is being increased rather than decreased by the growth of large retail organisations, supermarkets and so forth. I believe that when one gets in the High Street three or four such firms—as one generally does—competition between them will be very great.
Apart from the general consumers' point of view, we are concerned with the country's economic performance because we are a country dependent on exports. Our industries are in competion with foreign industries and we need very strong firms with substantial capital resources and substantial resources
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for research and development to be able to compete. As the Trades Union Congress recognised in the evidence that it gave to the Board of Trade—part of which I see quoted almost verbatim in the White Paper—in an increasingly technological environment the optimum unit size has increased to such an extent that there may be room for only one unit in a single national economy of the size of ours. This may, of course, be part of the answer to the hon. Member for Hendon, North. I have not gone into this question, but I am quite sure that one of the reasons for the Post Office maintaining its relations with the ring is because it thinks it gets technical advantage out of it. It may be wrong and he may be right, but I think that it is something which should be looked into much more. This is one of the complications of the situation in a country such as ours where we cannot afford to have more than a small number of firms in industries which require a lot of research and development.
This has led to the situation—and this is why I think hon. Members opposite always get so very uncomfortable and have to spend most of their speeches attacking nationalisation instead of really facing the real issue—in which the Government must be interested not so much in the mergers themselves—and here I agree with the right hon. Member for Reigate—as in those cases which lead to domination of the market and abuse of their position.
The Monopolies Commission's Report has shown that these cases exist and that there has been abuse and there have been excessive profits. It may not always be possible to stop abuses by Government pressure or even by Government order. I agree with the spokesman of the Liberal Party that one of the methods of dealing with the situation in which there is semi-monopoly or a dominating firm that is abusing its position would be to reduce tariffs. It was, I think, the hon. and learned Member for Darwen (Mr. Fletcher-Cooke) who referred to the coal industry and said that the steel industry complained because it was not able to buy coal abroad at a cheaper price, and the coal industry was protected by a tax on oil.

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The coal industry in this country is not protected by a tariff but most industries in this country are protected by a tariff. What is the difference? When the hon. and learned Member for Darwen said that the Government would never allow a nationalised industry to go down and would always have to protect it, is he implying that the Government would allow the British Motor Corporation to go down—and do they not have to protect the aircraft industry? One cannot really take this simple view of private companies or public corporations. The truth is that in this country there will be some very large private companies which will be almost the only companies in their field, and the Government will have to be interested in them as much as in the public corporations.
Incidentally, the hon. Member for Hendon, North underestimated the extent to which the Select Committee on Nationalised Industries can investigate the buying policies of these industries. In one of its Reports it referred to the difficult problem of the electricity industry in its relation with two or three dominating large firms in the supply industry. In fact, most people believe that they are coming down to two. What sort of competitive relationship shall we then have between a monopoly and two semi-monopoly suppliers? We have to have some Government intervention and probably some sort of tribunal to determine prices, as the Select Committee suggested.
It may be that all these methods are insufficient and that we will have to find some method of public control. This could go all the way from a director or directors on the board to some degree of partial or full public ownership. How can one say as hon. Members opposite do that that is an impossible policy and that we must never have this, faced with the technological and industrial changes which are taking place? It may be that the only solution to a problem like the relationship between the Central Electricity Generating Board and its suppliers is that the Board should own part of the equity of the suppliers. This suggestion has come from some quite extraordinary sources and not only on this side of the House.
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The situation is a good deal more complicated than hon. Members opposite are prepared to admit, at any rate here, although I think most of them admit it outside. I agree with the suggestion made by the Trades Union Congress that the Commission or the Registrar—I have not quite made up my mind why one should appoint a Registrar—should have a continuing research function. The situation raises the whole question of the availability of statistics of public companies. We need much more information in their annual accounts of turnover, shareholdings in other companies, pricing policies and so forth, and we need a systematic appraisal, of developments towards industrial and financial concentration which have been taking place and its effect on technological development, employment, prices, industrial relations and relations with the Government.
But I agree with the spokesman of the Liberal Party that this is not enough. One does not want a once-for-all inquiry but one wants it to be followed by annual reports on the activities of large firms, their profits, prices and policies. Very important indeed is the degree to which the control of the company is in foreign hands. This is not because we do not want foreign investments but because the Government are interested in the planning of the national economy it is extremely important to know what part of it is outside their direct influence. This is one of the main reasons that we want all this information, not only because we want to control monopoly or a monopolistic position but because we need it for planning purposes.
In the past the fear about big business has been that of irresponsible power. The fear of irresponsible power has aroused very strong emotions in the United States and has been the driving force behind most of the United States anti-monopoly legislation. This is because the United States has a strong Federalist anti-government tradition. These traditions are not so strong in this country. The trade unions in this country at any rate, and I imagine in the United States, too, have obtained rather better conditions from large companies than from small ones. The danger is not so much that in their policies, particularly their investment policies, the large organisations will

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act wickedly as that they will act selfishly or ignorantly. The effect of the decisions which they make on investment—very often very large scale investment—and on their future policies if they are taken in ignorance and selfishly can have very serious effects on the whole national economy. The Government have to play a role in the forward planning of large organisations, and must have the information to enable them to do so.
Finally, I want to say a word about the human effects of what we have been talking about—mergers. In so far as mergers lead to more efficient and expanding industries, workers, in the end, will benefit. However, in the short term it is important that account is taken of the serious disturbance—and the serious anxiety arising from it—that take-over bids, mergers, acquisitions, and so forth, can cause.
More consideration should be given to legislation protecting the workers who do not get the "golden handshake". There are no workers who are likely to do as well as a man did last week, when he received more than a hundred times the average yearly earnings of a worker because, as a result of a merger, he had to give up his position, although he was fully and very profitably employed elsewhere.
What has to be considered is not only the actual injustice, but the very serious psychological effect which such things have on industrial workers. Much more attention should be paid to the effect on the workers of mergers of this sort, because their lives are bound up with the companies which are taken over and very often they have not the chance to go off and get different and remunerative jobs elsewhere.
Sir J. Eden: What the hon. Gentleman has just been saying about the social aspects does not seem to be borne out by the T.U.C. in its statement. It went out of its way to say that the conditions enjoyed by employees of larger firms are, generally speaking, much more acceptable and advantageous than with smaller firms.
Mr. Albu: That is exactly what I said. I also said that in many cases there were great economic advantages in many mergers and that, in the end, the workers would benefit. However, as Lord Keynes once said, in the long run we are all dead. People are concerned with the short term.
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When a take-over takes place, and they see a single individual, after tax, getting a hundred times their annual earnings while they probably get nothing, they are entitled to ask how they are to be looked after.
This is, I admit, partly a job for the trade unions, but it is also a job for the Government, and something more ought to be done about it, particularly in the form of redundancy regulations, if policies which are necessary in the national interest are to be accepted.
7.2 p.m.
Mr. Peter Walker: I hope that the hon. Member for Edmonton (Mr. Albu) will not be offended if I say that I agreed with many of his remarks, particularly some of his observations on the subject of mergers. It is refreshing to hear an hon. Member opposite refer to mergers as being not all bad, rather evil and nasty devices of the capitalist system.
I listened to the right hon. Member for Battersea, North (Mr. Jay) declare, to the enthusiasm of his back benchers, that of the 500 industries listed in a Conservative leaflet, 112 had already been taken over, as though this was some wicked and evil measure which we should all deplore, implying that it would have been nicer if they had been taken over by the public rather than by private industry.
There is an interesting factor about the mergers which have taken place in the last 10 or 20 years. I believe it is true to say that of the 2,000 largest companies which existed 10 years ago, 400 have been involved in mergers. One seldom hears any complaint, grievance or criticism of the economic effects of those mergers. In fact, the majority of mergers in British industry during that period have been to the advantage of the economy. They have been to the advantage of the economy in terms of the increased power of research. As the T.U.C. pointed out in its report, a merger can also be to the great advantage of employees. If two firms merge, the firm with the higher wage and salary rates cannot put those rates down, and what normally happens is that the wage and salary rates of the two firms are brought up to those of the firm with the higher ones. This is also frequently true of the fringe benefits. If one firm has a pension scheme and the other has not, both end up with a pension scheme.

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It is important that hon. Members on both sides of the House should adopt a far more sensible approach to mergers in British industry than has hitherto been the case. This is particularly important in terms of the new international atmosphere developing in trade. There is a considerable likelihood of lowering of tariffs in the coming years. Another important implication is that the younger generation of British businessmen are becoming more internationally-minded. The businessman who will be at the head of British industry in five or 10 years' time will be the man who thinks essentially on an international scale. He will be a man used to looking upon travelling around the world as a normal part of his business life whereby he can go to any part of the world in a few hours. In this House it is important that we bring our thinking up to date and think in terms of our economy as part of a large international economy.
This is why I was particularly concerned with the views of the right hon. Member for Battersea, North when he referred to the Labour Party's attitude to investment from abroad. He said he thought that, rather than that a foreign firm should take over a British firm, it would be better for the British public to take it over, and he received appropriate cheers from his supporters. But if we pursue this policy, it would be very much to the detriment of the development districts. At present, there are about 80 industries in Northern Ireland and Scotland which are owned by American capital. It is also true that about 180 industries in areas of high unemployment have been started by foreign companies over the past 10 years. These figures are important to the people in those high unemployment areas.
A factor which is always neglected by hon. Gentlemen opposite is that we are essentially a country that invests to a considerable extent abroad, and if we start expressing prejudice against the investment of foreign capital in this country it means that we shall soon encounter methods of retaliation in countries abroad. At present we have about £8,000 million of investment abroad. Last year our earnings as a nation from dividends and interest on our overseas investment amounted to £750 million, a sub-
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stantial contribution to our balance of payments.
I was interested to note that the Australian Labour Party shares views similar to those of the right hon. Member for Battersea, North, but those views are about British investment in Australia. The Australian Labour Party expressed the view that if it were in power it would take action about the great drain of Australian resources going to the United Kingdom as the result of our interests in Australian banking, insurance and shipping. I wonder what the position would be if the right hon. Member for Battersea, North were in power here and the Australian Labour Party were in power in Australia and started taking measures against British investment in Australia when the same sort of measures were being proposed back here by the British Labour Party. I ask my right hon. Friend to give careful consideration to the advantages of examining what prospects there are for further investment by this country on an international basis.
The hon. Member for Edmonton mentioned the disadvantages and advantages of vertical take-overs. On a vertical basis, take-overs in the international sphere could be of very real advantage to this country. If a British company dependent on overseas raw material resources were to make investments in those resources and so in some way help to secure their future supplies to this country, that would be of considerable importance to our economy. I see the hon. Member for Edmonton shaking his head, but the fact is that the American business community has well recognised this point. After the publication of the Paley Report on raw material supplies, in which reference was made to the likelihood of diminishing raw material resources in certain spheres, there was considerable American investment in raw material supplies. I would welcome some sort of investment by British industry in this direction.
Mr. Albu: All I meant was that British industry might be tied to high-cost raw materials. The Paley Report came out about 50 years too soon.
Mr. Walker: I disagree with the hon. Gentleman. If hon. Members opposite project future likely demand in terms

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of raw materials, then that view illustrates the sort of complacency found among them. If one projects the market, however, there will be a case for a considerable increase of British investment overseas in raw material supplies.
We must not forget those who purchase our goods—the customers. Industry should give very careful consideration, perhaps it could be assisted by our commercial attaches abroad, to the prospects for the take-over of those we supply—the prospects, for instance, in retailing interests. One mail order house in this country recently purchased one in Holland. I do not know whether it is now selling British goods through that Dutch company or not, but certainly this sort of thing presents very good prospects for selling British goods abroad.
Mr. Bence: There is a good deal to be said for the hon. Member's argument about investment in raw materials and supplies. Did he support the Government's disinvestment when they agreed to sell the Trinidad Oil Company to Regent Oil, an American concern?
Mr. Walker: The hon. Gentleman must remember that if we are to go in for a free flow of international investment we cannot be restrictive on things we do not particularly like to part with. If we propose such restrictions then other nations are likely to follow suit. If we are to have a free flow of capital we cannot have the type of restriction that hon. Members opposite desire whenever they hear of international transactions taking place.
Mr. Bence: Did the hon. Member support the sale of Trinidad Oil?
Mr. Walker: Yes: I am opposed to the sort of restrictions hon. Members opposite would apply. I was saying that British industry should carefully examine the prospects available for investment in raw materials which are likely to go into short supply in the years ahead.
There is a need for further evidence of how successful mergers would help the economy. I believe that the N.E.D.C. should look very closely at the possibility of reporting on the desirability of certain mergers. The reasons may include under-capacity or the desirability
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of combining in view of competition from a larger size company abroad.
There is also the question of the treatment of employees. In the majority of cases mergers work very well for those employed, but in a minority they do not. Mergers particularly affect people in the age-group 45 to 65. They may find themselves surplus as a result and they are at an age when it is difficult to find other employment. I believe we made a start with the right type of reform of this situation by passing the Contracts of Employment Act, 1963. I hope that this Act is the first of many in this direction. I should like to see future legislation take into consideration the age factor to a far greater degree. If we could secure benefit for those in the older age-group it would be a contribution to solving the problems thrown up by mergers. Another aspect is the transferability of pension rights.
Mr. John Diamond: Does not the hon. Gentleman agree that a wise firm undertaking a merger need not await legislation? There is surely no reason why a company should not recognise its accumulated accrued responsibility to its own employees and provide for it contractually at the time of sale.
Mr. Walker: I agree completely. Wherever it is feasible, one of the first responsibilities for the company is to see that any such person is appropriately compensated for his service and any damage which might be done to his employment by the merger.
Sir J. Eden: Does not my hon. Friend agree that the reason quite often for mergers is just in order to honour that responsibility?
Mr. Walker: It is true that, in certain cases, if a merger did not take place a company would go to the wall and all the employees would be in a bad position.
The interesting factor in this debate has been that, on this side of the House, there is shown to be a genuine desire to remedy some of the faults of a free enterprise system. I support the measures proposed in the White Paper. I believe that the record of the Government is good. Any Government who

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introduce Measures such as the Restrictive Trade Practices Act and the Resale Prices Bill must be serious about doing away with price fixing and monopolies. The proposals in the White Paper show that we intend to continue to be serious about this problem and I am sure that, in the next Parliament, we shall introduce the Measures outlined in the White Paper.
7.16 p.m.
Mr. Robert Edwards: I listened with great attention to the hon. Member for Worcester (Mr. Walker). Apparently, we are not merely all Socialists now. We are also all internationalists now. The hon. Member dealt in detail with the problems of mergers and concluded that mergers arising out of investments from other countries were invariably progressive. What are the arguments we support in connection with mergers, particularly as they relate to the movement into our economy of extensions of very large industrial undertakings operating in other countries?
If German, Swiss, French or American firms move into British industries, like chemicals, motor cars, plastics and light engineering, we do not object to this capital investment. What we do object to, however, is, first, the lack of detailed information about this silent invasion of our country by foreign capital, and, secondly, the dangers that are bound to arise for the employees of these firms if recession hits the American, Swiss, German or French economies.
The Rootes-Chrysler merger gives the United States 60 per cent. control of the British motor car industry and that distresses me.
Mr. Shepherd Mr. Shepherd indicated dissent.
Mr. Edwards: Yes. The Americans now have 60 per cent. control of car production in this country. Only three independent British car firms now operate. It is a very serious state of affairs that a great basic industry, supplying the home market and vital exports, should come under the control of foreign capital.
All the American basic industries, including the motor car industry, have powerful lobbies in Washington. These
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influence the policies of the United States Government. They arouse terrific campaigns. It is only natural, if international markets are declining, that they will use their lobbies against British subsidiary companies, which are really an extension of their own powerful organisations in America, and improve their export trade at the expense of the British companies.
Mr. Heath: The hon. Member is making very wide, sweeping statements. First, the Rootes merger does not give Chrysler control and does not alter the amount of control in this country by American firms. Secondly, can the hon. Member substantiate these wide-ranging statements, that during the last recession in the United States the policy of Vauxhall's and Ford's was affected by it? He must substantiate these things if he puts them forward.
Mr. Edwards: The Canadian Government lost an election because Canadian Ford's decided to accept an order for tractors for China. The American China lobby, only a couple of years ago, was so powerful that it exerted pressure on Canadian Ford's to cancel this order for political purposes. At that time there were many thousands of skilled Canadian engineers out of work, but Canadian Ford's, although it was supposed to be an independent subsidiary of Ford's operating with Canadian directors, was not allowed to accept the order for tractors and motor cars for Communist China.
The right hon. Gentleman will perhaps remember that the Canadian Government fought an election on the issue and were thrown out by the people. If he wants concrete examples I do not think that he could have a better one than that.
Canadian Ford's was supposed to be 100 per cent. under the control of Canadian directors, but it was informed by its masters in Detroit that, although its dummy directors were Canadians, the policy of America must apply. Consequently, the order was withdrawn.
Mr. Heath: Perhaps the hon. Member will now answer my question.
Mr. Edwards: I am dealing with the question. The point I raised was: how do we know what would be the consequences of the effect of American investments in basic British industries if a big

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recession struck America? Naturally, the effects would be—just as they would be in this country, I hope—to protect their own people, to cushion the recession and stimulate their own products as against those of subsidiary industries.
The right hon. Gentleman asked me to give a concrete example of this kind of interference. I have given him a concrete example. He suggests that I am not dealing with the point. I repeat it for his benefit. [HON. MEMBERS: "Oh!"] Oh, hon. Members opposite do not want it to be repeated. If they will forgive me, I shall repeat it, because it is obvious that the Minister has not got in his mind the political point I was making.
I was asked to give an example—
Mr. Wilfred Proudfoot: On a point of order, Mr. Speaker. is it in order for an hon. Member to undertake tedious repetition when other hon. Members are wanting to get into the debate?
Mr. Speaker: It is for me to decide when repetition becomes tedious.
Mr. Edwards: Far be it from me, when we are talking about monopolies, to monopolise this debate. I know that several hon. Members on this side of the House want to get into the debate. I was making a serious political point and I was questioned by the Minister. Surely it is legitimate for me to prove the contention I was making. If hon. Members opposite do not like the point, that is not my fault.
The point I was making is a legitimate one. The American Government used American Ford's to interfere, not merely in the trade of Canada, but in the politics of Canada. This arose because Canada dared to decide through this American motor car subsidiary company to accept an order from Communist China. This was against American policy on China. The American firm exerted pressure on the Canadian subsidiary and it had to accept the decision of the American firm. All I suggest is that if that could happen in Canada—a very close neighbour of America, where there are very large capital investments—how much more readily could it happen here?
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The point we make about mergers is not the danger of the penetration of capital from other countries, but the necessity for public accountability; the necessity for this House and the country to know what are these tendencies towards industrial concentration in our country and in that industrial concentration how much British capital is involved, how much American, Swiss, German or French capital is involved. is there anything wrong with that? Only if we have the facts are we able to assess the policy that we need in planning the British economy.
I did not intend to concentrate the whole of my remarks on this single aspect of the subject. I wanted to speak in general terms about the danger of monopoly in our country, the dangers of cartelisation and the like. I shall make brief and rapid points in order to limit my remarks and allow other hon. Members to get into the debate. The Minister may smile, but there is no country in the Western world where there is a higher degree of monopoly than in our country. It is my conviction, in spite of all that has been said in this debate, that when we get this high degree of industrial concentration in fewer and fewer hands we reach a point of inefficiency in British industry. We reach a point at which these forces sabotage science and sabotage new technological development because the terrific capital investments involved and the scrapping of existing capital investment enables them—in fact, forces them—to consider immediate profits rather than long-term investments.
If hon. Members doubt that, I repeat what is known to all of us. This country is rich in invention. Some of the most important inventions in the world saw the light of day in Britain. We were the first country to produce sulphuric acid on a large scale. It was a British scientist who discovered rayon. It was a British scientist who discovered penicillin and all the antibiotic group of drugs which came from this discovery. Sulphur drugs first saw the light of day in a British laboratory. In these mass production products Americans and Germans have outstripped us. Although we discovered them, we were not able to apply the results of our inventions and the results of the genius

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of the small minority, which exists in every community, who can invent and apply inventions to mass production. Our Health Service is mainly dependent at the moment on antibiotics which are produced by American firms operating in this country.
Why is this? It is because British private enterprise has failed to undertake the risk of production, which is the only justification for its existence. It has failed to find the capital for these developments, and, therefore, it has failed its shareholders, the nation and the consumers. The time has come when we have to extend social ownership to deal with the problem of concentration and to make some of these large undertakings, which will become larger through merger, publicly accountable. That is what hon. Members on this side of the House will do when we come back as the Government after the next election in October.
Mr. John Biffen: In view of the hon. Member's remarks, aimed particularly at the pharmaceutical industry, is he stating that it is Labour Party policy to nationalise the pharmaceutical industry? If not, how do his remarks bear much relevance to current Labour Party policy?
Mr. Edwards: The Labour Party has made its policy clear, has it not? It was repeated by my right hon. Friend the Member for Belper (Mr. G. Brown). You have it in your hand—"Signpost to the Sixties". It has been passed along the Conservative benches during this debate. We shall make these firms publicly accountable. If we as a nation spend a lot of public money in these firms, we are entitled to a couple of directors on the board to watch our interests. Is there anything wrong with that? You have done it with British Petroleum. You have a couple of directors on the board.
Mr. Speaker: Order. The hon. Member's observations should be addressed to the Chair.
Mr. Edwards: I beg your pardon, Mr. Speaker. I was carried away by that provocative intervention. I want to let others take part in the debate, and I therefore end my speech.
7.33 p.m.
Sir John Eden: The hon. Member for Bilston (Mr. R. Edwards) was going round in a circle which eventually caused him a certain amount of excitement, but towards the end of his speech some of his remarks were extremely good arguments in favour of larger sizes in manufacturing industry.
I have a duty to declare an interest to the House, in that I am a director of a firm directly concerned with promoting amalgamations and mergers. I hope, however, that this will not bias my remarks. If anything, it will give me some factual support for what I say.
Earlier, I made an intervention which caused some mirth among hon. Members opposite, and I should like to substantiate what I said then by repeating that many mergers are initiated through the desire of owners of private companies primarily to guarantee continuity of employment for those who assisted them in the early days in building up their enterprise and industry. This causes them to seek an amalgamation with another company of a similar size, perhaps in a parallel range of product, or to go even further and to find association or absorption in a publicly quoted company.
I start by asking myself the question why it is that mergers have been wrapped up with monopolies in the general discussion today and why it is that mergers are included in the White Paper. Surely what we are concerned with is the abuse of monopoly. In so far as mergers are likely to lead to the abuse of monopoly, then we are concerned with mergers; but we are concerned with them in this context only when they become a monopoly which then becomes abused. We must get the sequence of events clearly in our minds if we are to consider fairly the all-embracing topics which are wrapped together in one White Paper.
I believe it to be the case that less than half of 1 per cent. of mergers are likely to lead, or have led, to the sort of situation which could be described as a monopoly situation. I admit that we have had some colourful examples which have hit the headlines of the newspapers and have aroused a lot of emotion in various quarters of the House

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and in the country. But these are a very tiny fraction of the whole general process of mergers and amalgamations which is going on continually throughout industry. Less than half of 1 per cent. are likely to lead to the sort of situation in which they will possibly become the concern of the Registrar and the Monopolies Commission. We must get this matter into its proper perspective.
Mr. Emlyn Hooson: Are we not concerned with the preservation of a competitive economy? In so far as mergers may restrict—not necessarily, but may—competition, surely we are concerned with mergers as well as with monopolies.
Mr. Darling: is that not what the hon. Member for Bournemouth, West (Sir J. Eden) said?
Sir J. Eden: If mergers produce any form of restraint of trade, then they are not desirable. But this is hardly the reason why people merge. Let us get this clear. When two companies join together it is not in order to become more restrictive but in order to ensure greater expansion, growth and prosperity for the owners and the employees, and subsequently the whole of the country.
My right hon. Friend said that legislation is being drafted—I quote his words—to deal with "potentially harmful mergers". I should like to hear my hon. Friend take that a little further in winding up and tell us exactly what my right hon. Friend means by the words "potentially harmful mergers". Sometimes it is put a different way. Sometimes it is said that we are concerned with mergers which are against the public interest. What are they? What are the mergers against the public interest, if not a monopoly which is being abused? Why single out mergers for particular castigation in this way when it is the abuse of monopoly with which we are concerned?
I refer hon. Members to paragraphs 8 and 11 of the White Paper. Paragraph 8 reads:
"The Government therefore reaffirm their view that it would be wrong to introduce into the law any presumption that monopoly is in itself undesirable, without regard to the conditions under which it operates, or to the manner in which it conducts its business. It follows from this basic approach that judg-
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ment should only be reached on a particular monopoly after investigation into the way in which it is in fact operating."
Paragraph 11 says that the way in which it is operating is to be divided into two sections from the point of view of the Registrar and the Commission:
"The investigation into the facts"
and
"the assessment of their consequences in relation to the public interest".
These things cannot take place, therefore, as the White Paper envisages until a monopoly exists and has been operating.
I therefore entirely support my right hon. Friend in the stand which he has made in resisting a series of proposals that mergers which are deemed likely to lead to monopoly conditions should be stopped before they occur. I agree very much with paragraphs 8 and 11 of the White Paper that the investigation of the facts and the assessment of the consequences of the monopoly in operation should be the basis on which the judgment is to be made.
My right hon. Friend expressed the hope that consultation will take place with the Registrar. I am sure that he is justified in expressing this hope. I am certain that industry has learned over many years that the representatives of the Board of Trade are extremely helpful and free with their advice to those who go before them in consultation.
The difficulty here will be one of timing. At what stage in the process of merging will this consultation have to take place? This is an extremely sensitive area of business and human relationship. The process of creating an amalgamation between two companies is a very delicate affair and could take many months of careful, painstaking approach, counter-approach and negotiation. At what stage is it suggested that they should come into consultation with the Registrar? is it to be at the stage when it is all but completed and when they have satisfied themselves in every respect that the merger is desirable from their point of view, or are they to assume that at one stage of the negotiations they will conclude that what they are about to enact will result in a monopoly position which they will abuse and that, therefore, they had better consult the Registrar about it?

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I do not mean to belittle this in any way, because I think that consultation is the right approach to try to discover if there is any harm in it. I emphasise that we are concerned with the harm that will come from the abuse of monopoly, not from the harm which could result from a merger between two companies, whatever their size.
Mr. E. Shinwell: I am following the hon. Gentleman's speech with great interest. Would he elucidate a point for me? What does he mean by "the abuse of monopoly"? Would he define that?
Sir J. Eden: What I mean by "the abuse of monopoly" is taking advantage of a position of complete control over the market in any one product so as either to fail to improve the service or, generally speaking, to fail in terms of the cost of the product to the consumer. Primarily, the abuse of monopoly lies in going against the interests of the consumer. The monopoly concerned is shielded from the economic consequences of this by virtue of the fact that it is a monopoly. This is one of the reasons why many of us are opposed to public ownership.
Mr. Shinwell: I am sorry to interrupt the hon. Baronet again. I am merely trying to elucidate this point. If a monopoly exercises complete control, if it is efficient, if it satisfies the consumer in respect of the price, and if it satisfies the country by being productive, is there any harm in it?
Sir J. Eden: None whatever.
Mr. Shinwell: In that case, as I am a heretic about all these matters, I favour monopolies and do not mind if they are occasionally abused, because if they are monopolistic and if, occasionally, they abuse their position, then the time is appropriate for the State to take them over.
Sir J. Eden: The right hon. Gentleman carries it a stage further, with which I do not agree. I am delighted to learn that the right hon. Gentleman agrees with "Signposts for the 'Sixties". This is the first time I have heard a right hon. Member opposite admit a share in the authorship of this pamphlet. I will re
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fresh the right hon. Gentleman's memory of what that publication says:
"Where major changes of ownership and control in a vital industry are threatened by take-over bid or merger, the State must be free to intervene, either by vetoing a proposed transaction or by stepping in itself and asserting the rights of the community "—
whatever that may mean—
"through an extension of public ownership."
This, apparently, is what the right hon. Gentleman is for. We on this side have protested time and again, because this is not spelt out in practice. It is a fine, generalised way of putting across an expression of view, but what does it mean in practice?
This is not the only view which has been put before us. The right hon. Member for Battersea, North (Mr. Jay) said earlier that he would hold up mergers where there is prima facie case against them. This was the main disagreement which the right hon. Gentleman seemed to have with the aspect of the White Paper dealing with mergers. The right hon. Gentleman will find difficulty in defining a prima facie case against mergers before they take place without harming the many desirable mergers which take place in industry every day of the year and which must continue if we are to have a buoyant economy.
A book was published recently, by some Labour lawyers, called "Law Reform Now ". I hope that hon. Members opposite have studied the book. It contains a passage about mergers. The lawyers seem to require that all company mergers involving more than a fixed ceiling of assets or a fixed amount of capital should receive prior approval before they can go ahead. In passing, I should say to my right hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan), who is not here at the moment, that this bears a remarkable and rather sad similarity to the proposals of the Poole Committee. I am delighted in this respect that my right hon. Friends have resisted the proposals of the Poole Committee. They would find almost word for word what that Committee has called for repeated in the Labour lawyers' "Law Reform Now".
Mr. Shinwell: Lawyers are the worst monopolists in the country. They monopolise everything associated with the law.
Sir J. Eden: Except that barrack-room lawyers always seem to get their way.
The T.U.C. paper in this regard was much more realistic. The T.U.C. attitude, generally speaking, on the subject of mergers, is much more understanding of the real problems of industry and of the economy today. I hope that the Congress will do some serious talking to the Labour Party Front Bench. The Congress recognises, as does the White Paper, that in the changing economic picture larger firms, larger groupings and larger corporations must come about. This applies particularly in manufacturing industry, which has to develop and accept scientific innovations and new techniques of production.
This is one of the answers to the point made by the hon. Member for Bilston, who took industry to task for not cashing in on the products of its research laboratories by making proper use of mass-production techniques. There will not be mass-production techniques, unless there is size and the market for the product. The market for the product will beget the size of the manufacturing technique. The two things go together.
In the last few years our products have become much more research-based. This entails very costly human and financial investment. This country is moving from craft-based to science-based industries. The process is already well under way. The fact that this process is under way, and has been encouraged by the Government's economic policy, is indicated by the general rising standard of living of the people as a whole.
In this broad economic picture acquisitions, amalgamations and mergers have a very important and increasingly significant rôle to play. I should like to see less of a negative approach in every opinion expressed in the House. The Government should take as positive an attitude to mergers as possible. They should try to educate the public away from lumping mergers with monopolies and indicating thereby that there is something sinister or bad about them, which is far from the truth. In fact, mergers are good and what we need is not fewer but many more.
7.50 p.m.
Mr. Bruce Millan: I intend to take up several of the points
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made by the hon. Member for Bournemouth, West (Sir J. Eden) later in my speech. I would say in passing, however, that I agreed with his remarks about it being unfortunate that an association of ideas is often contrived between mergers and monopolies, for they are different subjects. However, in many ways the problems associated with them are allied.
The only other point made by the hon. Member which I will take up immediately is that he drew a false antithesis when he said that in many cases an amalgamation was not concerned with restriction but with expansion. That is not a proper comparison to make, because the point about restrictive practices is that they are not concerned necessarily with restriction, per se, but with restriction of competition.
Sir J. Eden: In the context in which the hon. Gentleman has seen it, that is the sort of situation which might lead to a monopoly and, subsequently, to an abuse. I was concerned to emphasise that there is an enormous range of mergers going on the whole time, many of which are desirable, and I spoke of the type of merger the operations of which were essential and which were concerned with expansion and growth rather than restriction.
Mr. Millan: Some of them are, I admit, and I made the references I did merely in passing. I will have more to say about the hon. Member's speech later.
I want to refer primarily to the general monopoly position, because it has been agreed by virtually all hon. Members who have spoken today that the monopolies part of our monopolies legislation, as distinct from the provisions dealing with restrictive practices, has not worked out at all satisfactorily. This is partly due to the fact that reports from the Monopolies Commission take such a long time to produce. My right hon. Friend the Member for Battersea, North (Mr. Jay) gave a number of examples of this and one could give many more. It seems to be a regular feature of the Commission's work that it takes a long time for it to produce a report, so that one of the basic requirements for dealing with the present situation is some way of speeding up the activities of the Commission.
The Secretary of State made a long and laboured explanation of the Government's record in this matter. He tried to

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prove that they had been consistent all along about the work of the Commission, the number of commissioners, the way they had worked either as a whole or in sub-groups and about various other aspects of the Commission's activities. Neverthless, the fact remains that during the passage of the 1956 Act my hon. Friends warned the Government that to go back to the small Monopolies Commission position would reduce the productivity of the Commission unnecessarily and undesirably. The Government did not listen to the criticism we made at the time. This is not a question of my hon. Friends now talking of this criticism with hindsight. It is a fact that we told the Government of this in 1956.
All we can do now is welcome the belated conversation of the Government to the idea that the size of the Commission should be increased and that it should be allowed to work in separate sub-groups. It need not have taken eight years, from 1956, for it to have become apparent to the Government that the Commission could not work properly as it has been operating the last few years. It has been obvious for at least the last five years, so that even if the Government could claim that in the circumstances of 1956 what they had done was right, they could not substantiate it in the last five years because it has been obvious that the Commission has not been getting on with its job.
One need only look at the last, the 1963, Report of the Commission to see the long additions to the queue of applicants for treatment. On page 5 of the 1963 Report one finds a list of suggestions for Commission investigation. Those suggestions were made during the course of that one year. There are no fewer than 24 such suggestions—that is, having eliminated all the frivolous suggestions and those which the Board of Trade and the Commission did not consider worth investigation. This list of suggestions is not concerned with only trifling items. Many substantial industries are mentioned, including, even in the 1963 list, hearing aids, punched card tabulating machinery, flour, glass, razor blades, milk, bread and other bakery produce, along with gold coin and bullion production.
Whatever we do with the Commission, we must see not only that its present
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investigations are dealt with more expeditiously but that the long queue of applicants for investigation is reduced. I approach this problem with an open mind, as I approach the proposals of the Government about a Registrar because the Government have not made it clear what he will do, although the Secretary of State somewhat amplified the rather vague references to him in the White Paper. It is still not clear to me whether the Registrar will have a continuing research function, to repeat the question asked by my hon. Friend the Member for Edmonton (Mr. Albu), and we are entitled to an answer to this because it is an extremely important facet of the Government's suggestion.
It should not be necessary for the Commission to establish the facts. What one wants from the Commission is an assessment of the facts and the drawing together of conclusions. It should not be the Registrar's function simply to draw together the facts about a possible monopoly position in anticipation of an immediate Commission investigation. One would like to think that the Registrar will have sufficient staff to gather a lot of information together about many different industries which may be regarded as potentially susceptible to Commission investigation. I hope that that is what the Government have in mind.
If the Registrar were to be given this kind of research function—the ability to gather information, statistics and then to make an economic analysis of the position—he could have a real rôle to play, although the work could still be equally well done by extra staff being given to the Monopolies Commission; that is, without interpolating the Registrar at all. I will not go into that now because a simple question of administration may be involved. It is more important that the information should be made available so that the work of assessment can go ahead more expeditiously than the Commission has been able to achieve up to now.
The next main fault—and this has been accepted by the Government, among others—is that our monopolies procedure has lacked effective powers to enable the recommendations of the Commission in its reports to be properly and expeditiously implemented. Looking back, one can see the mistakes which were made in the 1948 Act because, as

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the Secretary of State pointed out, the various powers contained in Section 10 of that Measure were largely superseded by the 1956 Act since they related mainly to restrictive practices.
Mr. Jay: is it not a fact that additional powers should have been given to the Monopolies Commission in the 1956 Act?
Mr. Millan: What I was saying was that there was a lack in the 1948 Act. I agree that the additional powers might well have been given in the 1956 Act. Here we come against not just a technical defect in the Act but, until the present time—and perhaps even now—a Government unwillingness to act. It has not really been any defect in the 1948 Act. If we have gone on right to 1964 with this decreasing efficacy of the Monopolies Commission organisation, it has not been because of a technical defect in the 1948 Act but because the Government have not been willing to put the matter right long before now.
Even in the present White Paper the Government are still explicitly saying that they take a neutral and uncommitted attitude to a monopoly situation. That is in complete contradiction to their attitude on resale price maintenance. There the Government have said that the onus of proof is on the person wishing to retain r.p.m. to show that there is public advantage in it. The same attitude should be taken to a monopoly situation; the onus should be on the monopolist to prove that the way in which he works the monopoly and all the circumstances of the case are such that a substantial public advantage accrues. If the Government had adopted the same attitude to monopoly as they have adopted towards r.p.m., I am sure that we should not have had to wait until 1964 before getting even the White Paper, much less monopoly legislation—
Mr. Heath: As I understand it, it is not the view of the hon. Gentleman's party, or of the Front Bench of his party, that we should abandon the neutral attitude we have adopted ever since 1948, and adopt the attitude he suggests of presuming monopolies being against the public interest unless it can be shown that they are not so. I do not know whether the hon. Gentleman has
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thought the whole of this through, but the reasons we could do that with restrictive trade practices and resale price maintenance was that they were examples of specific trade practices, but the different ways in which monopolies can act are so numerous that I do not think we can specify in the same way.
Moreover, the Monopolies Commission is not a judicial tribunal but an investigating body, and there is all the difference in the world between the two things. If one were to adopt the hon. Gentleman's suggestion, these matters would have to go before a judicial tribunal, and we should have to elaborate the criteria on which they should be judged in the same way as with resale price maintenance, and this is by no means easy.
Mr. Millan: The right hon. Gentleman anticipates my next point. I know very well that there are differences between restrictive trade practices and monopoly situations, and the particular distinction to which the Secretary of State has just drawn attention is that it is very much more difficult with a monopoly situation to lay down criteria in advance which either the Monopolies Commission or some kind of judicial tribunal should investigate, yet the fact is that the Commission has been guided by certain specifications as to the public interest laid down in the 1948 Act.
That brings me to the powers that I think the Government ought to have in dealing with a specific monopoly situation. Whether one starts with the presumption that a monopoly is against the public interest and, therefore, that the onus of proof is on the monopolist, or starts from a neutral point of view, once one gets to the position of giving teeth to the Government in dealing with the conclusions brought out of the Monopolies Commission Report, one is in exactly the difficulty that the right hon. Gentleman has just adumbrated.
Under new monopoly legislation, if we were to get such a thing, from any Government, there would still be the difficulty of laying down in an Act of Parliament the particular criteria by which the Government were to judge the situation and the particular criteria which would give the Government power to intervene. It is because of that that

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I make the suggestion of a parallel with certain parts of our tax evasion legislation; that there should be given to the Government a general power to act with regard to the conclusions of the Monopoly Commission's Report in any circumstances that may be brought out in the Report.
In other words, I do not believe that we can wholly meet this situation by attempting to define in an Act of Parliament criteria for Government action. If we can do that, by all means let us do it, but if we find it impossible to meet all the circumstances, a general power should be given to Government to make an Order dealing with the particular circumstances that may be brought out in a Monopoly Commission's Report.
If that were done in some way which brought in Parliamentary control by some kind of Statutory Instrument subject to discussion in the House of Commons, we would not in any sense be giving the Government unlimited powers; in fact, in some senses, we would be giving them less unrestricted powers than one gives where attempting to lay down criteria in advance, because each time the Government acted on a particular monopoly situation there would be an Order, and the Order would be subject to Parliamentary discussion. I hope that the Government will consider that suggestion, because I do not honestly believe that we can get legislation to deal with the situation unless we have a general power of that sort.
I should like now to say one or two things about mergers and, perhaps, to take up some of the points made by the hon. Member for Bournemouth, West. As the interesting publications which his own company have produced demonstrate, mergers are growing in size and scope every year. There are more mergers in 1964 than 10 years ago; there are more today than five years ago. I agree absolutely that here one does not start with the presumption that every merger is bad. The neutral or uncommitted approach is the right one, because there may be all kinds of situations in which a merger is, if not desirable, at least, from the public point of view, not undesirable.
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But I would make this point: that a good deal of the prejudice, if one likes to call it that, against mergers and takeovers, arises because very large sums of capital gains are made in many of these transactions. If we had a capital gains tax to deal with that, I am sure that a great deal of the public feeling against them would be very much reduced, because one would at least see that if large sums of capital gains were made they were subject to tax.
Quite apart from that, there is a public interest in mergers even when they do not necessarily or potentially lead immediately to a monopoly situation, because very often with a merger the monopoly situation is only three moves ahead; the particular immediate merger may not lead to a monopoly situation, but one can guess that very soon a monopoly situation will transpire.
It seems to me that the Government's attitude on this and the proposals that were given to us by the Secretary of State this afternoon are almost incredibly weak. I personally felt that the right hon. Gentleman was not terribly happy about the Government's proposals in relation to mergers when he was explaining the White Paper for us earlier. It seems to me that what the Government intend to do would, as a number of hon. Members have pointed out, get the worst of all possible worlds. There would be an intervention, or the possibility of an intervention, yet the companies concerned in the merger would not know in advance whether or not an intervention would take place.
It seems to me to be very much simpler and fairer to everyone for the Government to take power to intervene in mergers before the merger actually takes place. There are a number of different ways in which this can be done. The Poole Committee made a recommendation—I cannot remember whether it related to the amount of cash involved in the merger transaction, or the level of assets, or the share capital but, in any case, one can easily lay down a standard of that sort.
It seems to me that it would not be impossible or impracticable to have legislation which provided that mergers involving a certain level of finance, of assets or of cash or of share capital should be notified to the Board of Trade

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before the actual merger went through and the Board should have power to deal with that and prevent the merger going through.
I would hope that the Board of Trade would not simply look at the proposals from the point of view of a potential monopoly danger, because there are wider issues which also should be taken into account—the general interest of the consumers and of the workers involved in particular proposals, the fears of redundancy, and even in some cases fears of redundancy among management who in many merger proposals suffer much more than the ordinary man at the work bench.
Sir J. Eden: The hon. Member surely appreciates that in the private transactions which we have been discussing this is an extremely sensitive matter, particularly probably because we are talking about publicly quoted companies. Many of these transactions have to take place so very secretively and quietly and the more people that get to know about them before they take place the greater the risk of leakage of information. This is the real difficulty here.
The second difficulty is that of the timing of the deal itself. I do not know how long it would take for the Registrar to approve or disapprove in the context which the hon. Member put forward, but it could possibly be several months before he came to any conclusion and this might lead to a totally different economic climate at the time and might change the whole raison d'être of the merger.
Mr. Millan: I know that there are these difficulties but these arguments do not seem anything like conclusive. The point about secrecy seems to me completely ill-founded. I do not know whether the hon. Member is seriously suggesting that if information about a possible merger went to the Board of Trade there would be likely to be a leakage from the Board of Trade to financial journalists, Stock Exchange speculators and other people. I do not think that that is a serious objection to giving information. One certainly appreciates that very often there is a delicate situation, but there are many cases where there is no delicate situation in the sense that a delay of a month or two will mean that the whole merger will be
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off. This seems to me very much the exception and not the rule. A much more difficult situation arises with regard to Stock Exchange speculation, but this in any case arises at present because mergers and rumours of mergers are part of the currency of financial journalism, as one can see for oneself in reading the columns of ordinary financial journalists day in, day out, week in and week out.
It seems to me that the most convincing argument for the approach which I suggest was given by the hon. Member for Bournemouth, West himself, because he said that less than ½ per cent. of mergers involved a potential monopoly situation. I would not necessarily accept that figure, but if that happens to be true—and the hon. Member is professionally engaged in the merger and amalgamation business—the idea that prior registration or consultation with the Board of Trade and a prior power on the part of the Board of Trade to prevent mergers and amalgamations would result in a wholesale hold-up of mergers throughout British industry falls to the ground. In practice the number of cases in which the Board of Trade would say immediately that there was a prima facie case for the Government interference would be very small indeed.
Unless the rules are drawn very stringently, I anticipate that the number of mergers seriously held up because of this kind of provision would be very small, and perhaps rather too few to satisfy some of my hon. Friends. Certainly there would not be so many that the whole progress of British industry, which depends on these mergers and amalgamations—or so hon. Members opposite have been claiming—would be completely stultified. I do not believe that that would happen.
Sir J. Eden Sir J. Eden rose—
Mr. Millan: No, I will not give way now. I am coming to a conclusion.
I am glad to see that there are new Government proposals in the White Paper. Criticisms have been made time and time again from this side of the House that the Government have completely neglected this field of monopoly legislation right up to the last minute—to one month before we break up for the end of this Parliament. These charges have been substantiated and I do not think

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that the Government have any answer to them. I very much hope that the new Labour Government who will come in after the General Election will not only put into operation some of the proposals in the White Paper but much more comprehensive and much more effective monopoly legislation.
8.16 p.m.
Mr. William Shepherd: Despite the electoral nature of his last remarks, the hon. Member for Glasgow, Craigton (Mr. Millan) paid a compliment to this side of the House when he said that the Restrictive Practices Act, 1956, was effective whilst the 1948 Act had been somewhat abortive. That is generally true. If we compare the record of the two sides of the House on monopolies and restrictive practices we are forced to the conclusion that what we on this side have done has been more effective than what has been done by right hon. and hon. Members opposite.
Far too much has been made by the right hon. Member for Battersea, North (Mr. Jay), and those who followed him, of the expansion of the Commission. Its expansion is basically necessary only because we have now decided to give it questions of mergers and services. It would not be necessary, apart from these considerations, to have anything like a substantial expansion of the Commission.
I want to deal with these questions of monopolies and restrictive practices as I see them. I want to refer to them perhaps rather more pointedly than have hon. Members opposite, or some of my hon. Friends, because I believe that as a nation ' we are still underestimating the damaging effects on this country of restrictive practices and monopolies. We still fail to realise how damaging these things can be. I believe that hon. Members opposite always fail to realise it because to them the painted harlot of monopoly has an extraordinary attraction, since they are wedded to the idea, false as it is, that social interest and power are involved in having State monopolies. This, in moral terms, is absolute nonsense and they know it, but they cannot escape from their own extreme followers.
I want to try to prove to the House that these practices are much more
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damaging than we are inclined to believe. I join issue with my right hon. Friend the Secretary of State for Industry and Trade, who said that he thought that we should not have the severity of United States legislation because conditions here are different. I agree that conditions are different, but I wonder whether he was right in the assumption that we do not require the same degree of severity. My belief is that the differing conditions demand the greatest severity.
There is in American society, because of its newness, a great desire for expansion and competition. This is accepted as a way of life. In this country, unhappily, this is not so. We have large and vicious protective practices, but in the United States this is not generally so. [HON. MEMBERS: "Oh."] Indeed it is not so, as it is in so many industrial fields here. Certainly, American society is more egalitarian and this is less damaging than our society, where class structure and nepotism still play far too large a part. Therefore, I say that if there is a difference between the United States and ourselves it is perhaps that we need more competitive stimulus than does the United States.
I agree that growth is necessary in many industries. I thought that the hon. Lady the Member for Blackburn (Mrs. Castle) was unfair when she spoke of the economics of scale and referred to detergent manufacturers. There is a factor in the economics of scale and this is clearly manifest when one looks at the British motor industry or, for that matter, any other motor industry. Here the economics of scale are decisive. But I have some doubt as to how far economics of scale should be used to persuade us to agree to mergers or to restrictive practices, because I believe that in most instances economy of scale can be over-rated whereas the effects of an effective price competition between manufacturers cannot be over-rated.
In Britain we have a curious mixture of competition and non-competition, and I do not mean merely between State monopoly and private enterprise. I wish that were the only distinction. There is in the United Kingdom a very marked contrast between what I would describe—and here I am generalising—as primary manufacturers, on the one hand,

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and secondary manufacturers, on the other. Among secondary manufacturers there is intense competition—so intense that it is probably more intense than in many other countries.
What one finds—and I speak here as a secondary manufacturer—is that when one comes to buy one's supplies from the primary material producers one has to buy nearly all the time from those who have rigged their prices in one way or another. Therefore, not only economic justice, but also social justice, demand that we iron out this disparity between intense competition between secondary manufacturers and the very limited competition between those bigger people who have been able comfortably to arrange their existence.
May I stress the importance of price competition? Competition is the most important thing. In fact, in this quater-centenary of the Bard I might say that competition is the only true begetter of efficiency. I think that to some extent we have failed to realise how important this is. Even those connected with the Monopolies Commission and the Registrar of the Restrictive Practices Court fail to realise how important is this question of price competition. They talk, as the Registrar does in his last Report, about the high profits that may be obtained as a consequence of these restrictions. But I do not think that the high profits that are obtained really represent the serious injury which is done to our society. It is the brake upon progress, the extent to which it creates an unreal or uneconomic pattern, which is the real measure of the damage which these restrictive practices do.
It may be that one can point to arrangements which are restrictive and say that firms which are engaging in these practices are not making excessive profits, but they may well be prevented as a result of the artificial nature of the restrictions from evolving a more efficient method of production. It is not sufficient to judge the merits or demerits of restriction by a look at the pattern as it exists at the time. One has to decide whether or not these restrictive practices are preventing us from progressing towards a more efficient form of organisation and production. In many instances, I think that it can be said that they are.
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Indeed, I get annoyed when I hear hon. Members, and certainly people outside this House, talk about the restrictive practices of the workers. They say, "Why do you not deal with the restrictive practices of the workers? Why do you want to deal with the restrictive practices of employers?" This reveals their abyssmal ignorance of trade, industry and economics. No employer can permit restrictive practices among his workers unless he is in some way protected from competition. If there were no big tariff barrier and no agreement among the manufacturers there would be no question of permitting restrictive practices. I am convinced that those newspaper proprietors who sit in their comfort in Fleet Street—those who are left—are happy to pay men for doing no work as an insurance premium against letting anybody else in the newspaper business compete with them. They are happy to do that.
If we are to deal with the question of restrictive practices among employees, which I think is exaggerated, we must first of all create those conditions of competition in which it is impossible for an employer to tolerate these circumstances. When we are considering the question of restrictive practices and monopolies we must look at the very serious situation in which this country finds itself. There will be a serious situation, whether or not hon. Gentlemen opposite are on this side of the House after October. The nation is faced with immense responsibility, with commitments of a very considerable nature to people inside the country mortgaging the future, and with commitments to other countries. Yet our rate of growth is very much less than that of other countries in Europe.
Take almost any industrial enterprise in this country and compare its rate of growth in the last five years with a corresponding company in France, Germany or Italy. One will find an alarming comparison. If this goes on for another five or 10 years, we shall have reached a situation where there will be in France and Germany a much higher national income than in the United Kingdom, and we shall be faced with large burdens at home and overseas which we shall be unable to sustain.

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Therefore, one must not take lightly the question of stimulating British industry to a more competitive effort because it is competition alone which can bring forth from our people the best of which they are capable. I refuse to believe that there is anything which is done in Germany, or France, or Italy that cannot be done as well in this country. It is not done as well simply because people have become unaccustomed to competition, they are afraid to risk a competitive adventure and they have relied far too long on the crutch of restrictive practices.
When I look at what is happening in the existing state of affairs, I am somewhat dismayed. For instance, when one reads the Report of the Registrar for the period July, 1961, to June, 1963, it is very difficult to conceive that he is talking about judgments of the High Court of the United Kingdom when he has to tell us that, in so many instances, the decisions of the Court have been frustrated in one way or another. I realise that, after 30 or 40 years of restrictive practices, it is difficult to expect people to embrace a more competitive way of life, but I am dismayed that British industrialists have found so many ways round the judgments of the Restrictive Practices Court.
In my view, this reflects very badly upon them, and I hope that my right hon. Friend will make clear that, when we take this further step to deal with information agreements and similar agreements, if there is in respect of these any flouting of the judgments of the Court, people will run the obvious risk of going to prison. Indeed, I doubt that we shall get through to the more competitive spirit which we need if some drastic action is not taken in respect of some individuals.
Now, a word about the new proposals. I regard the decision to deal with services with real enthusiasm. I took a fairly active part in the consideration of the 1948 Measure, and I have never quite understood why we did not deal with services. I imagine that the reason was that right hon. Members opposite were so nervous about the wages questions involved that they dodged the issue. Surely, there is no equity in allowing manufacturing Indus-
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try to be subject to quite severe scrutiny—I do not disagree with it-while allowing the vast area of services to go unmolested. I am glad that my right hon. Friend has decided to include services, though I am somewhat disturbed about the way the reference appears in the White Paper. The words are:
"..services (in particular, services relating to goods)".
To my mind, this is not good enough. It deals only with services related to the supply of goods, and I want services to be looked at over the whole range. For example, I should like there to be an examination of banking practice. I can think of a lot of things connected with banking, not only in the relationships of the banks with their employees, which are worth examination. I do not see why one should examine car batteries, for instance, and not banking. Banking ought to be looked at by the Monopolies Commission.
What about shipping? Would one be able to say with absolute certainty that there are no practices in British or international shipping worthy of examination? I should not like to give such an assurance. I consider that British shipping ought to be examined. What about insurance? The insurance companies, like our banking institutions and shipping companies, have done a great deal for this country, but there are many practices in insurance which are worthy of investigation.
I should like to see these three among other commercial services not related to the supply of goods, commercial services in their own right, tackled by this Government when they are returned to power in October. The fact that insurance companies are rather large and the City has a sacred protection wrapped round it should not in any way prevent the most rigorous examination of the practices of the insurance companies, of shipping companies and of banking.
Now, mergers. We should all like to be able to stop a merger which is deemed to be against the public interest before it is concluded. Obviously, this is the sensible thing to do, but we must all accept that it is not practicable having regard to the time which would be taken. I think that what my right hon. Friend proposes in the White Paper

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meets the issue fairly. I thought that my hon. Friend the Member for Bournemouth, West (Sir J. Eden) was not quite right when he assumed that there would be immense difficulties and asked how one would know when to go to the Registrar. I think that it would be quite simple. If there is a large measure of doubt about whether a proposed merger is in the public interest, one will go to the Registrar before one gets very far in order to find out, in principle, what he thinks about the proposition.
If, on the other hand, one is fairly satisfied that what one is doing could not by any stretch of the imagination be held to be against the public interest, one will go to the Registrar rather late in the day. I do not accept that the problem is incapable of rational and sensible solution. I hope that when we introduce this legislation we shall see an end to the restrictions which have bedevilled British industry.
I hope that right hon. and hon. Members opposite are not returned to power because they are committed to another piece of monopoly legislation which can never do any good. We heard today from the right hon. Member for Battersea, North that one of the reasons why we are in trouble with the steel industry is because there is not enough competition in it. But in the next breath he said that when his party gets back it will destroy what competition there is. If what is wrong with the steel industry is that there is not enough competition in it, the reasonable and sensible thing to do is to make sure that there is more. That is not the view of right hon. and hon. Members opposite.
They cannot escape from the dilemma of the large buyer. My hon. Friend the Member for Hendon, North (Sir Ian Orr-Ewing) pointed out the difficulty when he said that the Post Office was probably paying more than it should for its telephonic equipment. He said that we should encourage more competition. But he did not describe the whole dilemma. If one has only these companies with a production capacity, and their only customer is the Post Office, if they cannot get an order, if the Post Office does not get a big enough supply of telephones, all the workers in that company engaged in making telephones are out of work. Monopoly, particularly State
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monopoly, creates problems not only in the sense of making industry inefficient, but in the sense that it creates monopoly buyer. I urge right hon. and hon. Members opposite to think very carefully about this monopoly question.
There is nothing more important than competition, and it is not easy to see how important competition is until one is engaged in industry. The essential thing in industry is to ensure that the right people get to the top, and it is difficult to see that this takes place in a monopoly when it is private and certainly more difficult when it is public. The important thing in industry is not who owns it, but how efficient and able are those who run it from the top. I suggest to right hon. and hon. Members opposite that they are mistaking the real question of the day when they talk about the power of ownership being important. What matters is how efficient is the higher management level of industry. In this country it has not so far been as efficient as it should be largely because we have had insufficient competition. I hope that my right hon. Friend's measures will make good this deficiency.
8.38 p.m.
Mr. Edward Milne: I am sure that the hon. Member for Cheadle (Mr. Shepherd) will forgive me if at this late stage of the debate I do not take up some of the many excellent points which he has made.
What has amazed me in listening to the greater part of the debate has been the inherent contradiction among hon. Members opposite between deploying the case for mergers, combines and take-overs as increasing competition and arguing against the aspects of monopolies. One other point which needs mentioning in my introductory remarks concerns the benefits which many Members have assumed have accrued to the consumers and employees in the firms which have engaged in mergers and take-overs. One needs only to look at the cost-of-living index to realise that the price advantages to the consumer have not been all that evident at a time when take-over bids have been a major feature of our economy.
While there have been some very good wage agreements in some of the larger firms in the trades which have been subject to take-overs, none of these wage

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rates can really stand up to rigorous examination in the light of the present demands of the people who are earning them. An aspect of monopoly which has been rather seriously omitted in today's debate is the social and political implications of the tendency towards monopoly. We should not talk about mergers, on the one hand, and trusts, combines and monopolies, on the other hand, as if they were separate parts of the economy. All these things indicate in some way a tendency towards monopoly. In many instances in the past, we have seen that this has been a danger not only to the country's economy, but to democracy itself.
Over the past 13 years, there has been a considerable tenderness on the part of the Government towards big business, which has been reflected in the manner in which they have dealt with this tendency. We all would do well to remember the words of the late President Roosevelt in 1938 in regard to this tendency in America, when he said that
"The liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself."
One may say at this stage in the second half of the twentieth century that there is still sufficient competition left in the economy to do away with warning voices of that description. It is also true, however, that the transition from an individualist to a co-ordinated economy is not the only task which confronts modern democratic statesmanship but that the antagonism between authority and liberty is something which must be looked at closely.
I was interested in the editorial in the Financial Times of 24th November, 1959, which dealt with the question of the Restrictive Trade Practices Act. One of the central themes running through the arguments from the other side of the House is that that Act has been the instrument by which monopoly has been arrested and by which the shackles have been placed upon it. The editorial of the Financial Times said, however, that in the first place, it was clear that the Restrictive Trade Practices Act had increased the tendency to monopoly in the industry. It was dealing in that instance with cables and with the question of
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monopoly in general. The Financial Times went on to warn that an Act which prohibited price fixing while having no provisions against monopoly would result in more amalgamations and in a larger share of the market going to the largest firms.
We are told that mergers increase competition because, as the number of firms in an industry is reduced, their efficiency and competitiveness are increased. That applies only until the next time we pick up our newspapers or financial journals and find that a take-over bid is being indulged in among those companies.
Between the First and Second World Wars, we saw a terrific development in that direction. In the inter-war years, we witnessed also the internationalisation of this big business tie-up whereby, under the Düsseldorf Agreement of 1939, made at the time when the Nazi troops were marching into Czechoslovakia, the Federation of British Industries and its counterpart in Germany were getting down to the job of carving up their spheres of influence. All through we find that this is taking place.
One hon. Member spoke earlier about the question of competition in the High Streets of the main cities of this country. He said that as he walked through those streets he could not see any signs of a tendency towards monopoly. Perhaps the Minister of State will look at the idea which has been mooted in some quarters that where a firm which decides to trade is controlled by a holding organisation or by some other company its shop should bear on its sign the name of the firm which is controlling it. If that were done I am pretty sure we should see the extent to which monopoly has invaded the High Streets and the shopping centres of the country.
It has been argued by defenders of monopoly control that the present-day position is that it is the small firms which are being swallowed up and that there greater efficiency and lower prices are ensuing. Of course, now it is not only the small firms which are involved. The publications of the National Institute of Economic and Social Research show that in 1955 it had a list of 512 companies which in the preceding year had net assets of over 2½ million. By early 1962, 91 of those companies had

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been taken over or had merged with other firms. So we see that what starts off as a small take-over bid in a section of industry becomes an increasing tendency towards monopoly, and it is not sufficient for the White Paper, or the Government in their policy in other fields, to tell us that there must be one-firm control of an industry before it is regarded as a monopoly, because a holding firm can have over a firm or firms a tremendous influence on price and policy, and that in many cases is even more important than the actual monopoly control itself.
On the question of the High Streets, and despite the short time at my disposal, let us look at some of the stores, at the retail trade and at the position which exists. Take Great Universal Stores. One could walk through the shopping centres and never be aware that such a vast combine exists in retail distribution. In 1938 this combine had 100 stores with about 7,000 employees. By 1958 the number of stores had risen to 2,672 trading under hundreds of different names and with well over 100,000 employees. The present-day figures have exceeded even those. The profit in 1938 was about £408,000, which had risen in 1958 to well over £23 million.
Then we are all aware of the vast size of the House of Fraser, stretching northwards and southwards, southwards from Aberdeen, with stores in almost every centre in the country, including, in London, Harrods, Pontings, John Barker, Derry & Toms, and others, and stores in other parts of the world. United Drapery Stores has vast ramifications. Lewis's Investment Trust links up with Selfridge's and Merseyside Dairies.
Having mentioned Fraser, we cannot ignore the take-over bid tycoon, Charles Clore, but it would take a far longer time than I have in this debate to deal with the ramifications of his company. The President of the Board of Trade in February, 1962, answering a question on this firm, told us that its production of United Kingdom footwear was 8 per cent. of the total, that it controlled 12 per cent. of the retail outlets and 22 per cent. of the retail sales. Yet, if we look at the boot and shoe shops in this country we find that there is an appearance of extreme competition. While it is true that some of these retail giants
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have taken a sensible view in regard to trade unionism and wage negotiations, others are not so well-disposed.
If one reads the Monopolies Commission's Report on the supply of wallpaper, one sees references to Wallpaper Manufacturers Limited. On 8th June, my hon. Friends the Members for Coventry, East (Mr. Crossman), Coventry, North (Mr. Edelman), Jarrow (Mr. Fernyhough) and Gloucestershire, West (Mr. Loughlin) raised the question of the firm of Decorwall Limited of Coventry, where there was not this consideration for trade union negotiations and trade union membership. We discovered that all was not light and learning in the approach by the firm to a modern attitude to trade unionism. Concerning this firm, we are prepared to say that no matter how powerfully supported it may be by the firms mentioned in the Monopolies Commission's Report, it will be met by all the forces that the in 1938 was about £408,000, which had risen in 1958 to well over £23 million.
One is acutely aware at the end of this debate, in which time is restricted, that one cannot move over a very wide field, but I think that we have said sufficient to indicate that the question of monopoly and of the concentration of economic power in the hands of small numbers of people without public and social control is the greatest menace of this day and age. We hope to hear from the Parliamentary Secretary what the Government intend doing about this, because the measures being taken at the moment are far too belated for a Government who have had 13 years in which to come to grips with this problem. It is only in the later stages of their existence that they have given some indication that they are prepared to deal with the problem.
8.54 p.m.
Mr. Wilfred Proudfoot: I have to divest myself of at least 20 minutes of perfectly good speaking material and get on rapidly with the rest of my speech in the six minutes left at my disposal.
I have also been divested of something else. The hon. Member for Blyth (Mr. Milne) said that ideas had been mooted in some quarters about the names of the shops in the High Street. If he looks at

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the Resale Prices Bill he will find that it was my Amendment that he was talking about, and I am glad to acknowledge authorship.
Mr. Milne: I am sorry to ask the hon. Member to give way at this late stage, but my time was just as restricted as his is.
Mr. Proudfoot: To begin again, this is obviously an emotional issue when one talks about monopolies. Two years ago I initiated a debate on a Friday, the Friday immediately after the debate on I.C.I. and Courtaulds. Since then, I have done a lot of thinking on the subject. We humans tend to view monopolies from the point of view of our frail time in this world—three score years and ten. Let me say here and now that nothing is for ever. I.C.I. is not for ever—and part is in my constituency. Ford is not for ever, neither is Unilever; and I am delighted to say that British Railways are not for ever, nor is the National Coal Board. In fact, the longest monopoly known to this world lasted only 300 years. The Pope started it in the then known world—it was in a certain chemical—and even his power could not maintain that monopoly. So we must recognise that we judge monopolies from our tiny lifespan here.
This will be an issue at the next General Election. The Labour Party looks at monopoly and says that its method of dealing with it is to nationalise it. I will tell the House what I want to see in our economy. I want a desirable sandwich. On the top I want the big firms with their great technical expertise, but I want them to be controlled by the type of legislation which is suggested now. At the bottom is the little man—more and more will be in service industries—but he will always exist. I want the middle strata to be an absolute cauldron of bubbling dynamism and competition. When the Labour Party looks at this cauldron, every time a bubble comes up it calls it a commanding height of the economy and wants to petrify it. This is wrong for the country.
Our method of approaching the business of monopolies and mergers should be by regarding ourselves as the game wardens of this preserve. We are here to preserve vigorous competition.
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Hon. Gentlemen opposite get worked up about the bubbling cauldron to which I referred and start to call it a commercial jungle. I want to pose two questions to them. First, what is wrong with commercialism? I have never had an effective answer to that. Secondly, what is wrong with a jungle? We have debates in the House about preserving the balance of life in our rivers and on our land, the use of insecticides and so on. Our job in this "commercial jungle" should be as game wardens.
What a blundering game warden the Deputy Leader of the Opposition made of himself the other day! He blundered in, not as a good game warden would move, and said that he wanted to nationalise where there was no competition. But that will not work. His method is the saturation bombing by nationalisation instead of the more humane method proposed by my right hon. Friend the Secretary of State. Let us for a moment examine the statement by the Opposition that where there is not sufficient competition they will create State firms.
We have just had an incredible object lesson in competition, a much more effective object lesson in competition than the Leader of the Opposition could create by nationalising firms in order to create competition. This is the case of the Rolls-Razor Company and its washing machines. If hon. Members had watched their newspapers closely recently, they would have found that the Rolls washing machine company, through competition, had brought down the established market in these machines. One machine, a Hoover, came down from 115 gns. to 105 gns., and last week it dropped to 95 gns. because of this competition.
I believe that when we must accept a monopoly of scale—and this means a 100 per cent. monopoly, a real monopoly, not a 30 per cent. monopoly, a legal monopoly—we should look to lowering tariffs. I do not know whether this is the right thing if a firm has only 30 per cent. of the market, because it may speed up monopoly if tariffs are lowered too quickly, but I am a low-tariff Tory and would lower tariffs to obtain competition.
9.0 p.m.
Mr. George Darling: I am sorry to have had to cut short the speech of the hon. Member for

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Cleveland (Mr. Proudfoot). All I would say to him is that I am in favour of turning jungles into cultivated land for the benefit of mankind. The question of Mr. Bloom's company is one that I will discuss with the hon. Member privately, if he does not mind, on another occasion.
Today, the Secretary of State, introducing his White Paper, did so without any of the fervour and ebullient enthusiasm we have come to expect from him on these occasions. Apart from a bit of somewhat subdued electioneering at the end, which was a complete non sequitur, there was nothing forceful or determined in it. It was an academic exercise. The reason is that we are discussing not a Bill to give effect to what are, in many ways, quite admirable intentions but only a White Paper, full of promises which, according to the Government, will be implemented "as soon as practicable"—whenever that may be.
Thus, as will generally be agreed, there is an air of unreality about the debate, because no one knows at this stage how these various proposals will be written into legislation after the General Election or that the new Government, of whichever party, will not have a new approach at least to some of the problems we have been discussing.
Even so, there is one thing on which we seem to be all agreed. Every hon. Member who has spoken wishes to strengthen the Monopolies Commission, wants some sort of action on mergers and is, by and large, in favour of tightening up the law on restrictive practices. The debate has revealed different views on what needs to be done, but there is general agreement on the proposition that we should do something on these three aspects of trading practices.
The right hon. Gentleman has been criticised for not introducing legislation on the lines proposed in the White Paper at the beginning of the Session instead of pursuing what we think is the comparatively minor attack on resale price maintenance. As my right hon. Friend the Member for Battersea, North (Mr. Jay) said, the right hon. Gentleman had a choice and elected to run away from the big issues of monopoly practices and mergers, even though the pub-
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lic and informed opinion have, for some years, been far more concerned about take-overs, the trend to monopoly and the increase in the concentration of industrial power than about the price-fixing activities of manufacturers.
Moreover, it is our view that the right hon. Gentleman could have covered resale price maintenance arrangements along with the proposals in the White Paper in one major Bill if he had had the will to do it.
Mr. Heath: The hon. Member for Sheffield, Hillsborough (Mr. Darling) is making certain accusations that I ran away. He may recall that I went to the Board of Trade on 20th October. I had three months in which to produce my proposals in the House on 15th January, when I covered the whole complex of these issues. Anyone who knows the problems of Departmental life and drafting Bills knows that one could not have drafted a Bill of the size, scope and complexity of that which would be required for monopolies, mergers and restrictive practices in time to have carried it through in this Session. The hon. Gentleman has attacked me personally, and I have explained the position.
Mr. Darling: Surely what the right hon. Gentleman is saying is that his predecessors had done no work on this at all and that there was nothing in the Department's pigeonholes when he arrived there.
Mr. Heath: If the hon. Gentleman is saying that the Report was finished before I went to the Board of Trade, that is true. He attacked me personally and I have told him what I have done.
Mr. Darling: What the right hon. Gentleman says implies great criticism of his predecessors. I agree with him. We have a poor opinion of them also. As he himself has said, there is hardly anything original in the White Paper in the sense that nothing has been done before. In fact, every single proposal is a proposal to amend existing legislation. I take back my personal attack on the right hon. Gentleman if he assures me that his predecessors had done nothing on the investigations; if he says that they are to be blamed, not him. [Interruption.] If nothing had been done, surely someone has to be blamed.

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One major Bill on the basis of all the investigations which he admits had taken place could have been introduced at the beginning of this Session. I will blame the Government if the right hon. Gentleman does not want me to blame him personally.
Let us take this a little further. The right hon. Gentleman will agree that the legislation we are to amend and the White Paper itself stem from the 1948 Act. The hon. Member for Cheadle (Mr. Shepherd), who is not here now, criticised some of the terms of that Act, but I think even he would agree that the Ministers in those years immediately after the war did not content themselves merely with publishing White Papers instead of getting on with the job of enacting necessary, indeed essential, legislation. Apparently the right hon. Gentleman believes in a legislative formula, which no doubt springs from his period as Chief Whip, by which one Government Department should produce only one major piece of legislation in one Session.
Mr. Heath: I have already produced two.
Mr. Darling: If the right hon. Gentleman is taking credit for the Hire Purchase Bill he will remember that we rewrote it for him in Committee.
Mr. Heath: Nonsense.
Mr. Darling: When we came to the final stage of the Bill there were four Government new Clauses and 94 Amendments which we persuaded the right hon. Gentleman to accept. We wrote that Bill for him. We take credit for it, even though it was completely inadequate to his purpose.
The right hon. Gentleman thinks that there should be only one major Bill from one Department in one Session, but look at the record of the Board of Trade in 1947–48. There was the Companies Act, the Monopolies Act, and a whole series of minor Measures dealing with such things as export guarantees, the Cotton Board re-equipment, the development of inventions and so on. This, of course, was not in an empty legislative period. All sorts of post-war reconstruction Measures were coming along and this was three years after the end of the war.
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I think that the right hon. Gentleman would agree that none of this legislation could have waited. It was desirable and good for the country—necessary for the country. In those days we had Ministers who got on with the job and were not content merely to publish White Papers.
The Minister of State, who is to wind up this debate, will agree that there have been many well-founded comments and criticisms of the terms of the White Paper which both sides of the House ought to take into consideration. Before I come to some of the detailed points, I wish to make one or two general comments and to follow up some of the very sensible remarks made by the hon. Member for Cheadle. We must not give the impression that even if this White Paper is fully implemented it will remove all the faults, the weaknesses and deficiencies in our industrial and trading practices.
Neither the strengthening of the Monopolies Commission nor any of the proposed Measures will in my view by themselves compel unenterprising managements to be more efficient or more adventurous in search of trade, particularly overseas trade. These proposals alone will not, for instance, persuade a factory owner to put in a modern machine instead of buying a new Jaguar at the firm's expense, which far too frequently happens. If firms are to be more enterprising they have to modernise and put new machines into their factories. It has been said on both sides of the House that far too many managements are complacent, rather happy-go-lucky, quite happy to retain their share of the market and not wishing to burden themselves with an expansion programme. They are content to jog along. That has been said frequently. In my view this inertia, apathy and complacency are probably as dangerous to our national prosperity as are the practices covered in the White Paper, and in my view equally will have to be dealt with.
My second general point concerns excessive prices, which have been touched on by hon. Members on both side of the House, and particularly by my hon. Friend the Member for Blackburn (Mrs. Castle). There have been references to overcharging by firms which are in a position in their market to push up prices unreasonably but whose practices do not come within the

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scope of the Monopolies Commission or the Restrictive Trade Practices Court or even the extended terms of the White Paper. In the debate on the cost of living on 11th March we drew attention to the report of the Purchasing Officers' Association on this subject and to statements made by Lord Robens and others about overcharging by manufacturers of a wide range of products.
We asked the Chancellor to give consideration to a proposal which had been put to N.E.D.C. for a prices register, in order that firms intending to raise their prices would have to submit details and the reasons for increasing their prices and would have to be prepared to have their costs and their trading circumstances examined. Whether the register should be operated by a department of the Monopolies Commission or some other body set up for the purpose is a question to be considered, and I do not think that we can pronounce on it today, but as the idea has been raised twice, it ought to have some comment from the Minister of State when he winds up the debate. Clearly, there is need for some authority to examine prices.
Let me give the Minister an example of price arrangements which, if the facts are correct, as I believe them to be, calls for swift examination and, if the facts are established, even swifter action. I refer to the oil companies, which appear to be making no profit at all in this country and which are quite clearly making their profits before the crude oil is brought here. They bring it here. This raises some difficult questions. I should like to quote from an article by the financial editor of the Sunday Telegraph which appeared last September. He pointed out that the Esso set-up in this country made only 3½ per cent. profit on its capital employed here last year, that Shell-Mex and B.P. made profits of only £687,000, less than 1 per cent., on the capital employed, and that Regent made a £1 million loss. He continued:
"I am well aware that the oil business in Britain has become more competitive in recent years, but this is ridiculous. It is generally agreed among oil experts that, because of the relatively high prices paid by private (as against bulk) consumers, the oil market in Britain is still one of the best in the world. The only reason for figures as bad as this is that the oil companies do not want to make
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profits in Britain. … It is easy to see why. … For the international' majors' who own the British marketing and distributing subsidiaries also control the sources of crude oil and petroleum products supply. So it is immaterial to them at which stage the profits are made—immaterial, that is, except for tax considerations. And the net tax advantage clearly lies in making the profit before the oil gets to Britain. … This is not a subject that the normally publicity-conscious oil companies like to talk about. But it seems clear that they normally import crude oil or products at or near the official 'posted' prices, whereas the true world price is nowadays well below the 'posted' price. If, instead, they were to import oil at realistic prices this might have a considerable beneficial effect on Britain's balance of payments. Last year we imported £500 million of oil, over 10 per cent. of our total national import bill. A 10 per cent. reduction in oil import prices would clearly, on these figures, materially affect our balance of payments. It would save more foreign exchange than is earned each year by the whole of Britain's aircraft exports."
These are very serious charges levelled against the oil companies. If these charges are proved, these very prosperous companies are not only deliberately dodging their tax liabilities to this country but are pursuing a price policy with regard to imports of crude oil which is very dangerous indeed to our balance of payments and definitely against the national interest, as I think hon. Members would agree. I should like to know from the Minister of State, because this is an academic exercise, not what the Government intend to do, but what the hon. Gentleman thinks that the Government should do to deal with this situation.
Sir Harmar Nicholls: The hon. Gentleman mentioned the percentage profit made by the companies in this country. To substantiate the point he has made, which is an interesting one, could he tell the House the profits the companies made at the point where he says they are making their profits?
Mr. Darling: I have them here. They are in the article, if the hon. Gentleman cares to look it up.
I agree with the hon. Member for Hendon, North (Sir Ian Orr-Ewing) that the public services and nationalised industries must look more closely to their purchasing arrangements. I agree that this monopoly set-up should not lead to the situation the hon. Gentleman described in regard to the purchase by the Post Office of its equipment. I go even

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further. This is the beginning of the reply the hon. Gentleman wants. We must spell it out in more detail later. We shall have to look more closely at the capital investment programmes of the nationalised industries in relation to this kind of purchasing and what we are to get from it.
With regard to the Post Office's purchases from the ring, to which the hon. Gentleman referred, the difficulty that the Public Accounts Committee was up against was that there was no alternative source of supply—at least, this is what the Post Office said. I agree with the hon. Gentleman that a private ring of this kind should be broken up; but apparently the Post Office has been very happy with this arrangement. However, although the Post Office officials themselves may be satisfied that the costs and the prices they pay for the equipment are reasonable, they do not seem to understand that ring arrangements are stifling competition. As the hon. Gentleman rightly pointed out, they stifle the enterprise that could lead to more trade, more exports, and so on, in which these firms ought to be encouraged. We thoroughly agree with the hon. Gentleman. This is a situation with which any Government elected at the next election should deal.
Sir Ian Orr-Ewing: Perhaps I should have made it clear that 25 per cent. of subscriber equipment is now available for competitive tender, so obviously there are other sources of supply of that equipment. Ten per cent. of the more complicated exchange equipment is reserved to outside suppliers. Therefore, it is not quite true to say that there are no other sources, because they clearly are being met by other sources.
Mr. Darling: This is one of the developments that we can perhaps discuss on another occasion.
I want very briefly to touch on another aspect of excessive prices. Here I refer to the cost of legal actions in the Restrictive Practices Court. The Secretary of State said that the information agreements loophole in the Act could be closed without imposing hardship or great expense on the parties to information agreements who go to the Court and ask for their agreements to be
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adjudged to be in the public interest. I hope that he will look carefully at the costs involved in proceedings before the Court. I understand, for example, that the net book agreement cost the publishers about £70,000 in legal fees. I understand that the Motor Agents Association was involved in an equally large sum.
I understand, too, that the Co-operative Union has been caught, so to speak, by the Registrar because it sent out suggestions—they were suggestions to co-operative societies, so I suppose that I could describe them as "collective suggestions "—about what they should do over the trading stamp business. To go before the Court will cost them about £10,000, I understand. This might be all right for a big organisation but this may involve small firms and trade associations, which may be caught by the information agreements and other proposals in the last part of the White Paper in great legal expense, which may even deter them from going before the Court, although they might have a good case. I go no further than that because this is, after all, an academic exercise. We are not discussing action today and it is clear that this is something which should be looked into carefully.
The Secretary of State had a good deal to say about mergers and this subject has taken up most of our discussion. We are glad that the Government are at last proposing to deal with takeovers and mergers, despite the declaration they made a couple of years ago that we need not bother about these developments. As the House knows, my hon. Friends and I have been demanding Government intervention for some time, obviously with a great deal of public support.
It would appear that most hon. Members are concerned about paragraph 25 of the White Paper, and there are two arguments on this score. Some hon. Members do not want to hold up mergers while they are being investigated, and I see their side of the argument. They do not want to delay or frustrate what are considered to be desirable mergers. But I do not agree with the right hon. Member for Reigate (Sir J. Vaughan-Morgan) or the hon. Member for Bournemouth, West (Sir J. Eden) that mergers should be examined

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only after they have taken place and that no prior examination should be made.
It is worth considering some of the consequencies involved in mergers. It is likely that factories will be closed down, skilled workers sacked or dispersed and that the acquired holdings may be seriously deflated in value if they are to be sold after the event has taken place. In this academic exercise we must balance the advantages and disadvantages when considering whether mergers should be investigated before or after they have taken place.
I believe that all mergers above a certain size should require Board of Trade or Registrar's approval, depending on how the organisation works out. I do not believe that this would cause undue or harmful delay for obviously desirable mergers. I agree with the hon. Member for Bournemouth, West that many amalgamations are desirable from an economic point of view. At the same time, any merger the possible results of which seem doubtful enough to persuade the Secretary of State or Registrar to refer it for inquiry should be held up rather than that we should run the risk of having to unscramble things afterwards.
I also agree with the hon. Member for Bournemouth, West that we should make a better effort than is made in the White Paper to distinguish between useful and desirable amalgamations on the one hand and those which may be against the public interest on the other. It is for this reason that I believe that all proposed mergers should be reported in confidence to the Registrar or the Board of Trade, whichever is the considered avenue, so that the proposals can be sorted out at an early stage to distinguish one from the other. The right hon. Gentleman hopes that this will happen in practice without any need to write it into legislation, but I think that it should be written in.
A question has been asked about steel. We are told that this is highly-competitive, enterprising industry—or rather that is what we are led to believe by the rather tendentious propaganda from the British Iron and Steel Federation. Those who believe that this is a highly-competitive industry seem to have
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very peculiar notions about competitive enterprise.
John Summers, for instance, sent out a leaflet—to every elector, I think—demanding that steel men should be allowed to run the steel industries without the measures of State interference that we have proposed. The chairman also says that it is a competitive industry. Summers has a director on the board of the United Steel Companies, with whom they are supposed to be in competition. In turn, the United Steel Companies have a director on the board of Stewarts and Lloyds, with whom they are supposed to be in competition.
Then we have Sir Julian Pode of the Steel Company of Wales on the board of Guest, Keen and Nettlefold. The English Steel Corporation and Firth Brown jointly own Firth Vickers and as the Minister knows, the English Steel Corporation and the United Steel Companies, recently joined together to take over Baker Bessemer. So they go on. They all work together. This is the weirdest picture of competitive enterprise that I have ever come across; where, apparently, the competitive firms all have directors in each other's boardrooms. This raises questions that the Minister of State should answer.
For the sake of argument only, let us assume that the major steel firms are not taken into public ownership. This is an academic exercise—I do not ask the Minister to tell me what the Government propose to do, assuming that they are in a position to do it, but to tell us what he thinks ought to be done by a Conservative Government to stop these collusive arrangements with, as I say, directors of supposedly competing firms sitting in each other's boardrooms. If he thinks that competition is desirable and healthy, and an economically sound system for the steel industry, what rules does he suggest should be laid down to force the steel companies honestly to compete with each other?
If he believes, as I think he does, that the scale of size and high degree of specialisation required in the steel industry make it virtually impossible for the major firms to compete with each other, will he tell us what measures of Government intervention he thinks are needed to ensure that the steel companies

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operate in the public interest? I hope that he will answer these questions, if he can—
Sir Ian Orr-Ewing Sir Ian Orr-Ewing rose—
Mr. Darling: No, I am sorry; I am asking the questions tonight.
Sir Ian Orr-Ewing: The electorate are asking them all the time.
Mr. Darling: Finally, I should like the Minister of State to answer one or two questions—I will put them very briefly—arising from the intervention made by the Secretary of State about Fisons. The right hon. Gentleman said that in response to the Monopolies Commission Report, Fisons had agreed to limit that profit, as the Monopolies Commission recommended; and that independent auditors look into the matter and produce reports to the Secretary of State to prove whether or not Fisons are carrying out their agreement.
Perhaps the Minister can give us answers to clear our minds, because this is a very peculiar way of working—that we have a sort of private arrangement following on a public recommendation, and we do not know the terms at all.
May I ask whether Fisons have been asked to return to the Treasury any of the excessive profits which they made out of the subsidy arrangements, which the Monopolies Commission condemned? Secondly, do the auditors go further than the profits? Do they go into competitive costs and prices? Do they make a thorough examination of Fisons costs, and is the hon. Gentleman satisfied that Fisons are charging reasonable prices in view of the fact that the subsidy payments that we make come into this? Will the hon. Gentleman publish the auditors' reports so that we can see what is going on?
The right hon. Gentleman tried to persuade us that his promises of action some time in the future should entitle him to a vote of confidence, or at least to a vote of approval of his White Paper. We cannot agree, and we must register our protest against the Government's failure to take legislative action, even to put the proposals in the White Paper into effect, in the present Session of Parliament. We must also protest, for
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reasons advanced in the debate by my hon. and right hon. Friends, that the proposals in the White Paper do not go far enough to deal with the economic problems which are facing the country. The nation calls for action, not for White Paper promises, and the Government, in our view, on this issue have failed the nation.
9.31 p.m.
The Minister of State, Board of Trade (Mr. Edward du Cann): I would not be prepared to agree with the opinion first expressed by the hon. Member for Sheffield, Hillsborough (Mr. Darling), however pleasantly he expressed it, to the effect that we have had an unreal debate. In my view, we have had a most important and interesting debate. The surprising thing is that there has been so little informed public comment about the White Paper, with the honourable exceptions of the F.B.I. and the T.U.C. In particular, the T.U.C. published an excellent memorandum on the subject.
Publication of the White Paper marks an important stage in the implementation of the Government's progressive policy and we are very grateful for the views expressed by my hon. and right hon. Friends in the admirable speeches which they have made in the course of the debate. Hon. Members opposite have also made some valuable contributions, in particular, the hon. Member for Glasgow, Craigton (Mr. Millan).
I cannot say that Her Majesty's Government agree with everything that has been said, particularly by the hon. Member for Hillsborough, but, on the other hand, I repeat the undertaking given to the House at the beginning of the debate by my right hon. Friend the Secretary of State for Industry and Trade to the effect that serious consideration will be given to the constructive points put forward. The point made about Fison's will be considered by my right hon. Friend.
As for the speech of the right hon. Member for Battersea, North (Mr. Jay), I cannot promise that we shall take very much of what he said into consideration, because it was so short of constructive content. It may be that it was good political stuff, but it was mainly about the past. It was rather

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like the Labour Amendment, with its 67 words, only 13 of which are about the future.
Mr. Cyril Bence: There is no future for the hon. Gentleman.
Mr. du Cann: I sometimes whether there is any future for the hon. Member.
I should like to make some general remarks about the economic position and follow the points brought up in the debate. My hon. Friend the Member for Cheadle (Mr. Shepherd) particularly referred to this. We live in a fiercely competitive, highly technical world. It is a commonplace to say that it is a world of change, and it is true that life is changing very fast. The fact is that we have to make a living in this world by our enterprise and our competitiveness. The debate indicates that there is an agreed view in the House that we have to make the most effective use of our assets, that we have to create a competitive economy, and that we have to exploit the economies of large-scale investment and accept, in many cases, a need for greater industrial concentration.
When we consider the population of this country, 53 million by comparison with the giants by whom we are surrounded—E.F.T.A. 90 million, the E.E.C. 172 million, the United States 183 million and the U.S.S.R. 200 million—it makes us realise the big problems which we have to face and the fact that old judgments about monopoly size are no longer valid in this modern context. As my hon. Friend the Member for Darwen (Mr. Fletcher-Cooke) said, we cannot as a nation say that bigness in industry is a priori bad. That is why Her Majesty's Government should not and do not say that monopolies necessarily operate against the public interest. Indeed, the largest companies are not necessarily the most hidebound, the least venturesome or the least effective in overseas markets.
The attitude taken by the United States to monopoly, about which my right hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan) had some highly appropriate and apposite things to say, to the effect that it is wholly bad is certainly not appropriate in the context of our own market here. Every dominant enterprise must be judged upon its detailed merits. In other words, the whole of this debate,
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in the context of the discussion on monopoly, must be considered not only in national but also in international terms, as my hon. Friend the Member for Worcester (Mr. Walker) pointed out. I am sorry that I did not hear the whole of his speech.
I was asked a question by the hon. Members for Huddersfield, West (Mr. Wade) and for Blyth (Mr. Milne) about international cartels, trading agreements and the like. Our view is that the first step must be to collect the information. The O.E.C.D. Committee of Experts on Restrictive Business Practices, of which, of course, we are a member, is already arranging a study of this subject by a group of expert consultants.
In relation again to the competitive position of the economy, to which my hon. Friend the Members for Hendon, North (Sir Ian Orr-Ewing) and my hon. Friend the Member for Cheadle referred, we believe that we have done much in recent years to strengthen the competitive forces in the economy, whether by the abolition of controls, the unification of the two-tier system of Profits Tax—I am sorry the Labour Party appears to be going back to that-fiscal incentives to modernisation, which, in spite of what the hon. Member for Blyth said, are the most generous in the world, and, last but by no means least, the reduction in tariffs to which many hon. Members have referred, a very important matter.
It is worth recalling that the United Kingdom has taken a leading part in five successive rounds of discussions in the G.A.T.T. resulting in a reduction in rates covering well over one-half of the tariffs. My right hon. Friend is now heavily engaged, as the House knows, in supporting the proposals for success in the Kennedy Round. In E.F.T.A., by 1966, the tariff will have been completely abolished on industrial goods; and in relation to Commonwealth preference—a matter of pride—over 90 per cent. of our imports of goods, including manufactures and all that that means for other parts of British industry, now enter the United Kingdom duty-free from the Commonwealth. The position is that with a very few specialised exceptions we have removed controls from all imports from countries outside the Soviet bloc. Those we shall retain because we

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are unwilling to see our domestic manufacturers exposed to unfair competition, and I believe that to be right.
The hon. Member for Huddersfield, West asked particularly about tariffs and import controls in relation to monopolies and restrictive practices. This is a point on which hon. Members of the Liberal Party are extremely keen. How much we regret that their number in the House will be halved after the next election. We are all very fond of them. The possibility of action through tariffs is not excluded should this appear to be appropriate in particular circumstances. But the desirability of a punitive tariff action is not a simple black or white issue.
One cannot turn tariffs on or off like a tap because of real, imagined or temporary conditions. One must consider the effect on smaller suppliers, not only on monopoly suppliers, and also on the balance of payments. The hon. Gentleman may think, on reconsideration, that a reserve of bargaining power is needed to secure a reduction in other people's tariffs in order to help British exporters, particularly in the context of the Kennedy Round. We are always ready to consider tariff reductions, but there is no self-evident case for reductions simply as a punitive measure.
I turn now to the gravamen of the Opposition's case, the question of delays in the work of the Monopolies Commission. It is the Government's intention that the work of the Commission should be expeditious and effective. In its leading article today, The Times asks, "Have the Government got the will?" My answer is "Yes". However, it is necessary to bear in mind—this is what speakers opposite completely ignore—that there are certain limitations. One is the technical complexity of many of the references.
This applied particularly in the electrical goods case of which the right hon. Member for Battersea, North made such play. There is a need, too, and this also was ignored by the right hon. Gentleman, for the reports to be reliable. They must be matters of deep study. We do not want slapdash reporting. Any fool can produce a quick report. There must be full inquiry, and there must be fair-
160
ness, another point which the right hon. Gentleman refused to mention.
However, experience has shown—here, I agree that the right hon. Gentleman's criticism had merit, although he spoiled it by exaggeration—that there is a category of delay which could be avoided if the Commission could pursue more inquiries simultaneously. Several hon. Members have drawn attention to this point in the debate. The proposals for enlarging the Commission will be effective in dealing with this particular matter. The point made by my right hon. Friend the Member for Reigate about the possibility of having a flexible total number of members of the Commission will be closely borne in mind.
It must be recognised that thorough reports on complex monopoly situations simply cannot be published in a matter of weeks or even a few months. I repeat that neither now nor in the future will we tolerate avoidable delays, but the inquiries must be thorough and they must be fair.
I was asked particularly by my right hon. Friend the Member for Reigate and the hon. Member for Craigton about the appointment of the Registrar. His appointment will not lead to delay. It will make the work of the Commission, we believe, quicker and more effective.
I was not surprised that the right hon. Member for Battersea, North did not refer to the Report of the T.U.C. in his speech, for the fact is that the T.U.C. endorses the approach which we are making to this subject. Perhaps the right hon. Gentleman will consult the T.U.C. rather more closely.
In answer to the hon. Member for Craigton, I can tell the House that the staff will be available for carrying out the full functions which will fall upon them.
Mrs. Castle: Since the hon. Gentleman so approves of the T.U.C. document, does he intend to accept the recommendation in it for a thorough-going inquiry into the growth and ramifications of monopoly?
Mr. du Cann: My right hon. Friend said in his opening speech that this idea was worth consideration, and he will be replying to the T.U.C. in due course.
The hon. Member for Edmonton (Mr. Albu), in his very interesting speech,

161
raised a number of points partly on this matter and partly on others. I make two points about the proposal to have a Registrar. The proposal has two advantages additional to those of speed and effectiveness which I have already mentioned. The first is that it removes as far as possible from the political arena the invidious task of selecting subjects for inquiry. I was interested in the comments of my right hon. Friend the Member for Reigate on this aspect of the matter. Second, it separates the factual stage of the inquiry from that of adjudication on the public interest and, therefore, meets the criticism that the Commission is at present both judge and prosecutor. In sum, there is no doubt that our proposals will be valuable and effective.
I come now to the question of action on the Reports of the Commission. Our usual and preferred method of acting on Reports is by seeking undertakings from the firms concerned. It would be quite wrong to suggest, as the right hon. Member for Battersea, North did, that because only two orders have been made under the 1948 Act all recommendations but two have been ignored. Nothing could be further from the truth. The Government have the responsibility of implementation. The Commission is an advisory body, and the Government have a duty thoroughly to study the recommendations made by the Commission. Our view is that, in general, action should be taken on the Commission's recommendations unless there are strong over-riding considerations to the contrary.
The two recent Reports about which my right hon. Friend has been quite unjustifiably criticised contained a total of eight recommendations. One is covered by the White Paper, one my right hon. Friend has under consideration, three are under discussion with the industry and three have already been implemented by Government action. It is quite wrong and improper to suggest that we have been inactive. I thought that the right hon. Gentleman's comments on the Restrictive Trade Practices Act, 1956, were particularly inappropriate. The number of agreements registered is 2,340. Of that enormous mass of agreements, a balance of only 430 are left undealt with; 1,505 have been com-
162
pletely disposed of and the agreements terminated—a record of good and constructive progress.
I turn to the point about why we do not have earlier legislation, which is brought out very clearly in the Amendment. I suggest that criticism of the 1956 Act is about as relevant as a complaint that the 1948 Act should have looked 16 years ahead. The truth is that hindsight is very easy, but it is equally attractive whether it is made by people outside or inside the House. The history of this matter shows that we have acted, and acted steadily and sensibly. Indeed, the 1956 Act was the most far-reaching attack on restrictive trade practices made by any Government.
The hon. Members for Edmonton and Huddersfield, West asked why there should not be legislation during this Session. A short, simple Bill to enlarge the Commission, or to give it power to work in groups, would certainly have been feasible. But a Bill including more effective powers to remedy the mischiefs revealed in the Commission's Reports—to set up the new process of the Registrar, to deal with mergers and services—would be a very different matter. This new legislation will be comprehensive, lengthy and complicated following, as it will, the lines of the White Paper. But we shall certainly give it high priority in the next Parliament—and I repeat "we".
The major part of the debate has been about mergers. The hon. Member for Hillsborough referred to them in particular. This is a subject much clouded by emotion. Many people outside the House feel that there is something sinister about the whole business, largely because it is much misunderstood. The I.C.I.—Courtaulds affair received great publicity and was debated in this House. Many other mergers have aroused public interest—for example, the Daily Mirror's designs on Odhams Press. The fact is that there may be many good reasons for mergers, as was pointed out by the hon. Member for Edmonton and by my hon. Friends the Members for Worcester and for Bournemouth, West (Sir J. Eden). I do not disagree with the catalogue of good reasons for mergers suggested by the Leader of the Opposition on 29th June, 1959—as he is so fond of dates—in this House.

163
Mergers are only one way in which industry is adapting itself to technological changes and changes in demand. We cannot make a simple judgment, as the hon. Member for Blyth did, that all mergers are good or, as he preferred, bad. I say to my hon. Friend the Member for Bournemouth, West that the majority of them are highly desirable if the economy is to develop and to grow. But there may be a minority which are, or which could be, harmful—those that create monopolies, those that strengthen them and those which are designed substantially to reduce competition. Therefore, in our view, there should be powers of investigation by the Monopolies Commission at the direction and discretion of the Board of Trade. As my right hon. Friend said we should welcome prediscussion with the Board of Trade or, additionally or alternatively, with the Registrar. We shall closely and carefully define the conditions which the Commission should bear in mind in assessing where the public interest lies and its evaluation.
As the hon. Member for Hillsborough said, there has been great discussion during the debate about paragraph 25 of the White Paper. I agree with my right hon. Friend the Member for Reigate that our view of the matter is the most practical view, because any pre-merger registration system would involve great delays. Of that there is no doubt. It is not our intention to hold up mergers which may well be in the public interest.
Therefore, if mergers go through and are judged to be against the public interest, we shall certainly take power either to hold them up, if they have not yet fully gone through, or, if they have gone through, to unscramble them if they are proved to be against the public interest. As my hon. Friend the Member for Cheadle said, anything that the United States or any other country can do, we can do as well, if not better, in the United Kingdom.
The object of the Government in that regard and in regard to the publication of the White Paper is to stimulate competition and efficiency, without which our country, as one of the greatest trading nations of the world, cannot survive economically. This is the only way, as my hon. Friend the Member for Cheadle
164
said, by which we can pay for social advance.
We are against malpractices or exploitation where they exist in industry and where they are not in the public interest. This is a complex subject. Even the definition of monopoly, particularly viewed, as I suggest that it should be, in international terms is problematical. It is for reasons such as these that we state, in paragraph 8 of the White Paper, our view that
"it would be wrong to introduce into the law any presumption that monopoly is in itself undesirable, without regard to the conditions under which it operates, or to the manner in which it conducts its business."
It is true that improvements in the Act are required—for example, in the case of monopolies, strengthening the Government's powers to implement the Commission's recommendations or to deal with mergers and services. We want to deal with registration and, indeed, the enlargement of the Commission.
Similarly, however, the Restrictive Trade Practices Act, 1956, provides specific grounds on which the parties can plead that a restrictive practice is justified. We do not believe that as an instrument the Act requires a fundamental change of approach. It has secured the termination, as I have demonstrated, of many restrictive agreements. We believe that it has thereby promoted more effective trading conditions. Again, however, improvements are required—to deal with information agreements, for example, although there will be a procedure to clear quickly the trivial agreements, to deal with bilateral agreements and with agreements to like effect.
The White Paper is not in any way an exhaustive document. There is, therefore, no change of attitude by the Government either to monopoly or to restrictive practices. We shall seek to curtail or to prevent either when they militate against the general well-being of the economy We are after competition and efficiency. We recognise it is our clear duty to provide the economic conditions and the legislative framework in which both can flourish.
Our objectives are twofold: to ensure, again in the language of the White Paper, that the resources at the disposal of the nation can be used in the most effective way and to create a climate of opinion

165
which, by effective sanctions, will refuse to tolerate restrictions on competition or curbs on innovation or efficiency. I only wish that I could say the same for Her Majesty's. Opposition.
When one reads the Amendment, which is signed by the leaders of the Opposition—the elders, as one might say, and some of them very elderly—it is difficult to believe that one is not in wonderland. This debate is an accusation that the Government are not strong or firm enough in dealing with monopoly—an Alice in Wonderland situation. The monopolists in this House are on the benches opposite.
They are the ones who would make it an almost criminal offence to compete. The most unsatisfactory monopoly of all, as my hon. Friend the Member for Hendon, North—[HON. MEMBERS: "Not Cheadle?"]—and as my hon. Friend the Member for Cheadle—[HON. MEMBERS: "Hear, hear."]—said, is a monopoly State buying enterprise, set up by hon. Members opposite.
The truth of the matter is simply this, that the Government are making good progress, have made good progress, and will continue to make it. I am sorry that the right hon. Gentleman the Leader of the Opposition is not here, because—[HON. MEMBERS: "Where is the Prime Minister?"]—because one of the questions asked was why the Government had only produced a White Paper. We published a White Paper on the whole of this subject, and we were right to do so, to define the subject, to take the view of the House as a whole—but I recall that the right hon. Gentleman was responsible—was he not?—or had some responsibility at the Board of Trade for publishing a White Paper on resale prices. Yet the Opposition had not the courage of their convictions in the Lobby a few weeks ago.
On the other hand, I must say that in a way I am quite glad the right hon. Gentleman is not here, because one never
knows when a member of the Opposition will make an intervention which will lose this country valuable orders abroad. [HON. MEMBERS: "Oh."] One attitude on the part of the Opposition has disappointed me greatly, and that is the attitude which has run through a number of speeches criticising and attacking the work which is done in this country by private enterprise. The truth of the matter is that Britain's exports depend on private enterprise. Little do they realise, I think, the harm which is done both at home and abroad by some of these ill-thought out attacks.
A number of right hon. and hon. Members on the opposite side of the House have connections with the trade unions which make their membership of this House extremely valuable and worth while. Their experience and their knowledge is undoubtedly important in the House and in the country as a whole. I only hope that those of them who take up the attitude which I have described, which has run through a number of speeches in this debate, will use that experience and influence to make certain, with us, that there are restrictive practices remaining on no side of industry, for it is in the nation's interests that they all should go. We shall play our part, and we rely on them to play theirs.
In all these fields, monopolies, mergers, services, restrictive practices, we have been firm and we have been progressive. The law, in our opinion, has worked well—not perfectly, but well. The White Paper marks a further significant advance in the light of our experience. Our new measures will, we believe, contribute effectively to more efficient, more productive, more competitive practice. I commend them to the House.
Question put, That the words proposed to be left out stand part of the Question:—
The House divided: Ayes 269, Noes 194.

Division No. 128.]

AYES

[10.0 p.m.

Allason, James

Berkeley, Humphry

Bourne-Arton, A.

Amery, Rt. Hon. Julian

Bevins, Rt. Hon. Reginald

Box, Donald

Arbuthnot, Sir John

Bidgood, John C.

Boyd-Carpenter, Rt. Hon. John

Ashton, Sir Hubert

Biffen, John

Boyle, Rt. Hon. Sir Edward

Atkins, Humphrey

Biggs-Davison, John

Braine, Bernard

Barlow, Sir John

Birch, Rt. Hon. Nigel

Bromley-Davenport, Lt.-Col. Sir Walter

Barter, John

Bishop, Sir Patrick

Brooke, Rt. Hon. Henry

Batsford, Brian

Black, Sir Cyril

Buck, Antony

Beamish, Col. Sir Tufton

Bossom, Hon. Clive

Bullard, Denys

Bullus, Wing Commander Eric

Holland, Philip

Powell, Rt. Hon. J. Enoch

Burden, F. A.

Hollingworth, John

Price, David (Eastleigh)

Butcher, Sir Herbert

Hopkins, Alan

Price, H. A. (Lewisham, W.)

Campbell, Gordon

Hornsby-Smith, Rt. Hon. Dame P.

Prior, J. M. L.

Carr, Compton (Baront Court)

Hughes-Hallett, Vice-Admiral John

Prior-Palmer, Brig. Sir Otho

Carr, Rt. Hon. Robert (Mitcham)

Hughes-Young, Michael

Proudfoot, Wilfred

Cary, Sir Robert

Hulbert, Sir Norman

Pym, Francis

Chataway, Christopher

Hutchison, Michael Clark

Quennell, Miss J. M.

Chichester-Clark, R.

Iremonger, T. L.

Ramsden, Rt. Hon. James

Clark, William (Nottingham, S.)

Irvine, Brant Godman (Rye)

Rawlinson, Rt. Hon. Sir Peter

Cleaver, Leonard

Jennings, J. C.

Redmayne, Rt. Hon. Martin

Cole, Norman

Johnson, Dr. Donald (Carlisle)

Rees, Hugh (Swansea, W.)

Cooke, Robert

Johnson, Eric (Blackley)

Rees-Davies, W. R. (Isle of Thanet)

Cooper, A. E.

Johnson Smith, Geoffrey

Ronton, Rt. Hon. David

Cooper-Key, Sir Neill

Jones, Arthur (Northants, S.)

Ridley, Hon. Nicholas

Cordeaux, Lt.-Col. J. K.

Jones, Rt. Hon. Aubrey (Hall Green)

Ridsdale, Julian

Corfield, F. V.

Joseph, Rt. Hon. Sir Keith

Roberts, Sir Peter (Heeley)

Costain, A. P.

Kaberry, Sir Donald

Robson Brown, Sir William

Coulson, Michael

Kerans, Cdr. J. S.

Roots, William

Courtney, Cdr. Anthony

Kerby, Capt. Henry

Ropner, Col. Sir Leonard

Craddock, Sir Beresford (Spelthorne)

Kerr, Sir Hamilton

Royle, Anthony (Richmond, Surrey)

Crawley, Aidan

Kershaw, Anthony

Russell, Sir Ronald

Critchley, Julian

Kirk, Peter

Scott-Hopkins, James

Crowder, F. P.

Kitson, Timothy

Seymour, Leslie

Curran, Charles

Lambton, Viscount

Sharples, Richard

Currie, G. B. H.

Lancaster, Col. C. G.

Shaw, M.

Dalkeith, Earl of

Leavey, J. A.

Shepherd, William

Dance, James

Legge-Bourke, Sir Harry

Skeet, T. H. H.

d'Avigdor-Goldsmid, Sir Henry

Lewis, Kenneth (Rutland)

Smith, Dudley (Br'ntf'd & Chiswick)

Deedes, Rt. Hon. W. F.

Lilley, F. J. P.

Smyth, Rt. Hon. Brig. Sir John

Donaldson, Cmdr. C. E. M.

Lindsay, Sir Martin

Soames, Rt. Hon. Christopher

Douglas-Home, Rt. Hon. Sir Alec

Linstead, Sir Hugh

Speir, Rupert

Drayson, G. B.

Litchfield, Capt. John

Stainton, Keith

du Cann, Edward

Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)

Stanley, Hon. Richard

Duncan, Sir James

Lloyd, Rt. Hon. Selwyn (Wirral)

Steward, Harold (Stockport, S.)

Eden, Sir John

Longbottom, Charles

Stodart, J. A.

Elliot, Capt. Walter (Carshalton)

Longden, Gilbert

Storey, Sir Samuel

Elliott, R. W. (Newc'tle-upon-Tyne, N.)

Lucas, Sir Jocelyn

Studholme, Sir Henry

Emery, Peter

Lucas-Tooth, Sir Hugh

Summers, Sir Spencer

Emmet, Hon. Mrs. Evelyn

McAdden, Sir Stephen

Tapsell, Peter

Errington, Sir Eric

MacArthur, Ian

Taylor, Sir Charles (Eastbourne)

Fell, Anthony

McLaren, Martin

Taylor, Edwin (Bolton, E.)

Fisher, Nigel

Maclean, Sir Fitzroy (Bute&N. Ayrs)

Taylor, Frank (M'ch'st'r, Moss Side)

Fletcher-Cooke, Charles

Macmillan, Maurice (Halifax)

Taylor, Sir William (Bradford, N.)

Foster, Sir John

Maddan, Martin

Temple, John M.

Fraser, Rt. Hn. Hugh (Stafford&stone)

Maginnis, John E.

Thatcher, Mrs. Margaret

Freeth, Denzil

Maitland, Sir John

Thomas, Sir Leslie (Canterbury)

Galbraith, Hon. T. G. D.

Markham, Major Sir Frank

Thomas, Rt. Hon. Peter (Conway)

Gammans, Lady

Marples, Rt. Hon. Ernest

Thompson, Sir Kenneth (Walton)

Gardner, Edward

Marten, Neil

Thompson, Sir Richard (Croydon, S.)

Gibson-Watt, David

Mathew, Robert (Honiton)

Thornton- Kemsley, Sir Colin

Giles, Rear-Admiral Morgan

Matthews, Gordon (Meriden)

Tiley, Arthur (Bradford, W.)

Gilmour, Ian (Norfolk, Central)

Maude, Angus (Stratford-on-Avon)

Tilney, John (Wavertree)

Glyn, Dr. Alan (Clapham)

Maudling, Rt. Hon. Reginald

Touche, Rt. Hon. Sir Gordon

Godber, Rt. Hon. J. B.

Mawby, Ray

Turner, Colin

Goodhart, Philip

Maxwell-Hyslop, R. J.

Turton, Rt. Hon. R. H.

Goodhew, Victor

Maydon, Lt.-Cmdr. S. L. C.

van Straubenzce, W. R.

Gough, Frederick

Miscampbell, Norman

Vaughan-Morgan, Rt. Hon. Sir John

Gower, Raymond

Montgomery, Fergus

Vickers, Miss Joan

Gresham Cooke, R.

More, Jasper (Ludlow)

Walder, David

Griffiths, Eldon (Bury St. Edmunds)

Morrison, Charles (Devizes)

Walker, Peter

Grosvenor, Lord Robert

Morrison, John (Salisbury)

Walker-Smith, Rt. Hon. Sir Derek

Gurden, Harold

Mott-Radclyffe, Sir Charles

Wall, Patrick

Hall, John (Wycombe)

Neave, Airey

Ward, Dame Irene

Hamilton, Michael (Wellingborough)

Nicholls, Sir Harmar

Wells, John (Maidstone)

Harris, Frederic (Croydon, N. W.)

Noble, Rt. Hon. Michael

Whitelaw, William

Harris, Reader (Heston)

Nugent, Rt. Hon. Sir Richard

Williams, Sir Rolf Dudley (Exeter)

Harrison, Brian (Maldon)

Oakshott, Sir Hendrie

Williams, Paul (Sunderland, S.)

Harrison, Col. Sir Harwood (Eye)

Orr, Capt. L. P. S.

Wills, Sir Gerald (Bridgwater)

Harvey, Sir Arthur Vere (Macclesf'd)

Orr-Ewing, Sir Ian (Hendon, North)

Wilson, Geoffrey (Truro)

Harvey, John (Waithamstow, E.)

Osborn, John (Hallam)

Wise, A. R.

Harvie Anderson, Miss

Page, John (Harrow, West)

Wolrige-Gordon, Patrick

Hastings, Stephen

Pannell, Norman (Kirkdale)

Wood, Rt. Hon. Richard

Heald, Rt. Hon. Sir Lionel

Partridge, E.

Woodhouse, Hon. Christopher

Heath, Rt. Hon. Edward

Pearson, Frank (Clitheroe)

Woodnutt, Mark

Henderson, Sir John (Cathcart)

Peel, John

Woollam, John

Hendry, Forbes

Percival, Ian

Worsley, Marcus

Hiley, Joseph

Peyton, John

Yates, William (The Wrekin)

Hill, Mrs. Eveline (Wythenshawe)

Pickthorn, Sir Kenneth

Hirst, Geoffrey

Pitman, Sir James

TELLERS FOR THE AYES:

Hocking, Philip N.

Pitt, Dame Edith

Mr. Finlay and Mr. J. E. B. Hill.

Hogg, Rt. Hon. Quintin

Pounder, Rafton

168

169

NOES

Abse, Leo

Hamilton, William (West Fife)

Paton, John

Ainsley, William

Hannan, William

Pavitt, Laurence

Albu, Austen

Harper, Joseph

Pearson, Arthur (Pontypridd)

Alldritt, W. H.

Hart, Mrs. Judith

Peart, Frederick

Allaun, Frank (Salford, E.)

Hayman, F. H.

Pentland, Norman

Awbery, Stan (Bristol, Central)

Healey, Denis

Popplewell, Ernest

Bacon, Miss Alice

Henderson, Rt. Hn. Arthur (Rwly Regis)

Prentice, R. E.

Baxter, William (Stirlingshire, W.)

Herbison, Miss Margaret

Pursey, Cmdr. Harry

Beaney, Alan

Holman, Percy

Randall, Harry

Bellenger, Rt. Hon. F. J.

Holt, Arthur

Rankin, John

Bence, Cyril

Hooson, H. E.

Redhead, E. C.

Benn, Anthony Wedgwood

Houghton, Douglas

Rhodes, H.

Bennett, J. (Glasgow, Bridgeton)

Howell, Denis (Small Heath)

Roberts, Goronwy (Caernarvon)

Benson, Sir George

Hoy, James H.

Robertson, John (Paisley)

Blackburn, F.

Hughes, Emrys (S. Ayrshire)

Robinson, Kenneth (St. Pancras, N.)

Boston, T. G.

Hughes, Hector (Aberdeen, N.)

Rodgers, W. T. (Stockton)

Bowden, Rt. Hn. H. W.(Leics, S. W.)

Hunter, A. E.

Rogers, G. H. R. (Kensington, N.)

Bowen, Roderic (Cardigan)

Hynd, H. (Accrington)

Ross, William

Bowles, Frank

Hynd, John (Attercliffe)

Royle, Charles (Salford, West)

Boyden, James

Irvine, A. J. (Edge Hill)

Shinwell, Rt. Hon. E.

Braddock, Mrs. E. M.

Irving, Sydney (Dartford)

Silkin, John

Bradley, Tom

Janner, Sir Barnett

Skeffington, Arthur

Bray, Dr. Jeremy

Jay, Rt. Hon. Douglas

Slater, Mrs. Harriet (Stoke, N.)

Brockway, A. Fenner

Jenkins, Roy (Stechford)

Slater, Joseph (Sedgefield)

Broughton, Dr. A. D, D.

Johnson, Carol (Lewisham, S.)

Small, William

Butler, Herbert (Hackney, C.)

Jones, Dan (Burnley)

Silverman, Julius (Aston)

Callaghan, James

Jones, Eiwyn (West Ham, S.)

Smith, Ellis (Stoke, S.)

Carmichael, Neil

Jones, T. W. (Merioneth)

Snow, Julian

Castle, Mrs. Barbara

Kelley, Richard

Sorensen, R. W.

Cliffe, Michael

Kenyon, Clifford

Soskice, Rt. Hon. Sir Frank

Collick, Percy

King, Dr. Horace

Spriggs, Leslie

Craddock, George (Bradford, S.)

Lawson, George

Steele, Thomas

Cronin, John

Lee, Frederick (Newton)

Stonehouse, John

Crosland, Anthony

Lee, Miss Jennie (Cannock)

Stones, William

Dalyell, Tarn

Lever, Harold (Cheetham)

Strauss, Rt. Hn. G. R. (Vauxhall)

Darling, George

Lever, L. M. (Ardwick)

Stross, SirBarnett (Stoke-on-Trent, C.)

Davies, G. Elfed (Rhondda, E.)

Lewis, Arthur (West Ham, N.)

Swain, Thomas

Davies, Ifor (Gower)

Lipton, Marcus

Swingler, Stephen

Davies, S. O. (Merthyr)

Lubbock, Eric

Symonds, J. B.

Deer, George

Mabon, Dr. J. Dickson

Taverne, D.

Delargy, Hugh

McKay, John (Wallsend)

Taylor, Bernard (Mansfield)

Dempsey, James

MacColl, James

Thomas, George (Cardiff, W.)

Diamond, John

Mackenzie, Gregor

Thomas, lorwerth (Rhondda, W.)

Dodds, Norman

Mackic, John (Enfield, East)

Thornton, Ernest

Doig, Peter

McLeavy, Frank

Tomney, Frank

Donnelly, Desmond

Mallalieu, E. L. (Brigg)

Wade, Donald

Manuel, Archie

Wainwright, Edwin

Driberg, Tom

Mapp, Charles

Watkins, Tudor

Duffy, A. E. P. (Colne Valley)

Marsh, Richard

Weitzman, David

Edelman, Maurice

Mayhew, Christopher

Wells, William (Walsall, N.)

Edwards, Rt. Hon. Ness (Caerphilly)

Millan, Bruce

White, Mrs. Eirene

Edwards, Robert (Bilston)

Milne, Edward

Whitlock, William

Evans, Albert

Monslow, Walter

Wigg, George

Fernyhough, E.

Moody, A. S.

Wilkins, W. A.

Foley, Maurice

Morris, Charles (Openshaw)

Wllley, Frederick

Foot, Michael (Ebbw Vale)

Moyle, Arthur

Williams, D. J. (Neath)

Forman, J. C.

Mulley, Frederick

Williams, LI. (Abertillery)

Fraser, Thomas (Hamilton)

Noel-Baker, Francis (Swindon)

Williams, W. T. (Warrington)

Ginsburg, David

Noel-Baker, Rt. Hn. Philip (Derby, S.)

Willis, E. C. (Edinburgh, E.)

Gordon Walker, Rt. Hon. P. C.

O'Malley, B. K.

Woodburn, Rt. Hon. A.

Gourlay, Harry

Oswald, Thomas

Woof, Robert

Greenwood, Anthony

Owen, Will

Wyatt, Woodrow

Grey, Charles

Padley, W. E.

Yates, Victor (Ladywood)

Griffiths, Rt. Hon. James (Llanelly)

Paget, R. T.

Gunter, Ray

Pannell, Charles (Leeds, W.)

TELLERS FOR THE NOES:

Hale, Leslie (Oldham, W.)

Parker, John

Mr. Charles A. Howell and

Mr. McCann.

Main Question put and agreed to.
Resolved,
That this House approves the proposals contained in the Command Paper on Monopolies, Mergers and Restrictive Practices (Command Paper No. 2299).

BUSINESS OF THE HOUSE
Ordered,
That the Proceedings on the Fishery Limits Bill may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Redmayne.]

ORDERS OF THE DAY

  FISHERY LIMITS BILL
  Not amended (in the Standing Committee), considered.
  The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. James Scott-Hopkins): I beg to move, That the Bill be now read the Third time.
  10.11p.m.
  Mr. James H. Hoy: That was a very short speech we had from the Parliamentary Secretary, but it was not unexpected. This Bill was adequately discussed both on Second Reading and in Committee upstairs. I want to say only a few words on it.
  This Bill has been forced upon us by the action of other Governments. They have taken action unilaterally to extend their fishing limits and this Measure is a reply to that action. It is one which commends itself to the whole House. Although, as I said on Second Reading, it will do something to help the industry, the industry will be much more interested in what the Minister has to say about the date when he is to make a reply to the proposals of the White Fish Authority. That is extremely important for the industry and it is something it wants to know. Perhaps the Minister will take advantage of the situation to say what the Government's intentions are in this respect.
  10.12p.m.
  The Minister of Agriculture, Fisheries and Food (Mr. Christopher Soames): I was glad to hear what the hon. Member for Edinburgh, Leith (Mr. Hoy) said. He made clear on Second Reading and in Committee that he regards this as a necessary Bill from which our inshore fishermen will benefit.
  As to the point about when we are to discuss matters affecting the wider interests of the fishing fleet as a whole, I am afraid I cannot tell him exactly on what date that will be, but as he knows always at this time of the year we have a debate on subsidies and arrangements for the coming year for the fishing fleet as a whole. I have no doubt that my right hon. and learned Friend the
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  Leader of the House will be announcing the date for that as soon as he can. I hope that on that occasion I shall be able to give the information for which the hon. Member has asked.
  Mr. Stan Awbery: Can the Minister tell us how many countries have agreed to extend their limit from three miles to 12 miles?
  Mr. Soames: No, because it is up to each individual country which is a signatory to the Convention. We are, in fact, the first to take advantage of the Convention.
  10.14 p.m.
  Mr. Anthony Crosland: Although we on this side of the House welcome the Bill, I wish to make one point about it. One of the disadvantages of this kind of Measure, as I suggested on Second Reading, is the inevitable resentment it causes in the fishing industries of other countries. In the last few days we have had a dramatic example of the sort of resentment and confusion which can be caused by the extension of fishing limits. The Minister knows about the extension of the Faroese limits a few months ago and the restrictions imposed on Faroese landings by the Federation with the support of the trade unions. This is an example of what could follow from this sort of Bill.
  I wonder whether the Minister has observed that a group of merchants in Grimsby have applied to the Dock Labour Board to be allowed to become employers of labour in order that, contrary to the ban, they may land Faroese fish. This is a direct result of the extension of their limits by the Faroese.
  I regard this sort of situation as nothing less than dangerous for the industry. I think that the Minister agrees that the only hope for the industry to have any kind of prosperous future is if all sides are united. In this kind of situation we have, on the one hand, the merchants and, on the other hand, the trawler owners, the trade unions, the skippers and the mates. If the Minister has seen reports on this situation which has arisen in Grimsby, I wonder whether he has any comment to make on it. It is a very delicate situation.
  I do not propose to go into the rights and wrongs of it at this stage, but it is

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  precisely the kind of situation caused by the extension of limits elsewhere which is creating conditions inside the industry which in the long run can do only harm to it. I shall be grateful if the Minister will tell us whether he regards himself as having any Ministerial responsibility in the matter.
  10.17p.m.
  Mr. Hector Hughes: On Second Reading I drew the Minister's attention to the fact that ill will might be created by the Bill between various nations which have fishing interest in the North Sea. It is very important that the Minister should indicate what steps he has taken to prepare those nations and to come to some agreement with them.
  It is also very important that he should have some regard to the guidance offered to him by the White Fish Authority. What has he done about the report issued by the White Fish Authority? What steps is he taking with the nations surrounding the North Sea which, as I said on Second Reading, I regard rather as a lake in which various nations around the North Sea are interested, in order to promote harmony and to avoid discord between those nations?
  The Bill has some regard for policing the North Sea and for protective vessels. It is of the utmost importance that there should be a clear and friendly understanding between Britain and the nations concerned in order to promote the utmost harmony in that fishing area.
  10.18p.m.
  Mr. Patrick Wall: We all deprecate the unilateral extension of fishery limits, but we should emphasise the contrast between the way in which the Government have handled the problem and the way in which certain foreign Governments have handled it. The Minister will recall that the Icelandic Government unilaterally extended their limits. Her Majesty's Government, on the other hand, called a conference of 16 nations and obtained a very great measure of agreement, which resulted in the Bill. I think that the Government are entitled to great credit for a Bill which will afford greatly increased facilities to many hundreds of inshore fishermen around our coasts.
  10.19 p.m.
  Mr. Frederick Peart: On Second Reading and throughout Committee stage we on this side of the House have expressed our approval of the Bill. There is no party conflict. My hon. Friends the Members for Grimsby (Mr. Crosland) and Edinburgh, Leith (Mr. Hoy) have dealt with points arising out of the Bill, and my hon. Friend the Member for Leith has expressed the Opposition's approval of the Bill.
  We are anxious to know about future policy but we should be out of order if we went on to that argument now when we are discussing the Third Reading of the Bill. Clause 1 of the Bill deals specifically with the extension of limits to a distance of 12 miles from the base lines of the territorial sea and divides that area into two parts, the exclusive fishery limits and the outer belt. I will not go beyond that. My hon. Friend the Member for Leith, who knows the industry intimately, put a question to the Government. I think that we had a favourable reply and that we should leave the matter there. To go beyond that point in this debate would be unfair. We shall await another occasion.
  Question put and agreed to.
  Bill accordingly read the Third time and passed.

  SCOTTISH GRAND COMMITTEE
  Ordered,
  That, for the remainder of the present Session, Standing Order No. 63 (Special Procedure for Scottish Estimates) shall have effect as if the word "three" were substituted for the word "six" in line 11, and Standing Order No. 64 (Matters relating exclusively to Scotland) shall have effect as if the word "five" were substituted for the word "two" in line 15.—[Mr. Selwyn Lloyd.]

  REPRESENTATION OF THE PEOPLE ACT 1949 (AMENDMENT) [MONEY]
  Resolution reported,
  That, for the purposes of any Act of this Session to amend subsections (1)(e) and (3)(a) of section 12 of the Representation of the

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  People Act 1949 so as to enable persons temporarily absent from their qualifying address to vote as absent voters, it is expedient to authorise—

  (1) the payment out of the Consolidated Fund of any increase attributable to the said Act of this Session in the sums payable out of that Fund under section 20 of the said Act of 1949;

  (2) the payment out of moneys provided by Parliament of any increase attributable to the said Act of this Session—

  176

  (a) in the sums payable by way of General Grant, Rate-Deficiency Grant or Exchequer Equalisation Grant under the enactments relating to local government in England and Wales or in Scotland;

  (b) in the sums payable under section 43(2) of the said Act of 1949 out of moneys so provided.

  Resolution agreed to.

  WHITCHURCH MENTAL HOSPITAL, CARDIFF (PATIENTS)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Pym.]
  10.20 p.m.
  Mr. George Thomas: I am grateful to the Joint Parliamentary Secretary for his courtesy in coming to the House tonight, as I know that he had another important engagement which he has now cancelled. I am sorry to cause the hon. Gentleman inconvenience, but I wish to raise a matter of substantial importance in the City of Cardiff. I have not hitherto taken part in the debates in the House on the question of mental health, but recently I paid a visit to the Whitchurch Mental Hospital, Cardiff, and I must say that my deep interest was aroused and my concern for those who are involved in the work of the hospital has found expression in this debate.
  I want to pay a tribute to the doctors, the nurses, the psychiatrists and the social workers and the whole splendid team who, under the leadership of Dr. Spillane, pursue the interests of them mentally sick at Whitchurch Hospital. Like those in other mental hospitals, they work under substantial difficulties. For instance, the workroom which I visited was crowded almost beyond capacity. But I gladly pay tribute to the substantial improvements that have taken place in this hospital since my previous visit, unfortunately a long time ago. Bright decorations and modern furniture have made the wards much more attractive and, I believe, the life of the patients much more variable.
  I was shocked to learn that a great number of patients in the hospital ought not to be there at all. Devoted medical skill and care and the use of modern drugs have together served to bring these patients to a point where they could live in the community if they had suitable accommodation. Some of them have been long years in the hospital and the only reason they are there today is either that they have no family to which they may return or that for a diversity of reasons their family declines to take responsibility for caring for them. I can think of no greater agony than for a
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  restored person in a mental hospital to be aware that he has to go on living there simply because he has no home to which to return. It is a palpable injustice which society perpetrates upon these people that they should have to endure further years in the mental hospital like lost souls in an indifferent society.
  In a Written Answer today the Parliamentary Secretary was good enough to tell me this:
  "I understand that about 160 patients in this hospital could live in the community if suitable accommodation of various kinds were available. Fourteen have been housed in local authority accommodation during the past six months. The local authorities concerned proposed a substantial increase in their provision of residential homes."
  I gather that Whitchurch Mental Hospital is in no different plight from that of other mental hospitals throughout the country and that this is not a local but national problem. There must be, if it is a national problem on the same scale, many thousands of unfortunate people in this unhappy plight. There is an urgent need for more adequate community services for both the mentally sick and their families.
  At the present rate of absorption into local authority homes it will take years more before these recovered people can begin to take their place in the life of the community. The Minister will correct me if I am wrong, but I understand that Cardiff has a community centre for eight people, with another soon to be forthcoming, but that this is only a trickle when we need a flood.
  The Mental Health Act, 1959, which I regard as a giant stride forward in legislation for the mentally sick, put upon local authorities a special responsibility for the provision of these hostels. I am thinking not merely of short-stay hostels, but those which cater for people who are able to go to work but whose standard of behaviour at home may not be good enough, even in supervised lodgings; people who need the care of responsible, trained social workers. It is vital that qualified trained personnel should be in charge of these community centres. The hostel is not merely an alternative form of accommodation—to get these folk out of hospital. It is part of the plan for rehabilitation.

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  I hope that the Minister will tell the House what steps are being taken to ensure an adequate supply of trained social workers who may operate under the guidance of trained psychiatrists. Dr. Martin, Senior Lecturer in Social Medicine at the University of Edinburgh, in a remarkable article on 2nd April, in New Society, pointed out that each local health authority had submitted its own proposals for the number of social workers to be employed during the next 10 years, the number of hostel places to be provided and so on, and went on to say that psychiatric social workers still accounted for a good deal less than one-tenth of all social work staff in community mental health services.
  "Nearly all the social work in the community is carried out by untrained staff, in spite of the fact that workers in this setting function with a high degree of independence."
  Dr. Martin pleads, as an expert, for a shift of psychiatric social workers from the hospital into the community setting.
  I ask the Minister what steps he is taking to increase the number of such excellent day hospitals for the mentally sick as that supervised by Dr. Joshua Bierer at Marlborough. I understand that the present danger of the modern and enlightened mental hospital—and there are more than a few of them—is that it can produce the type of patient who actually prefers the hospital and its security to taking the risk of reentering community life.
  Dr. Bierer's solution is a comprehensive day hospital based on the community and providing facilities geared to meet the individual needs of each patient. Could the Minister tell us to what extent these hospitals are being matched by community centres? I know that to find suitable lodgings for folk who are fit to leave the mental hospital is a giant's task. I suggest to the Minister that where community centres are provided he ought to invite to serve on the house committee enlightened and dedicated employers and trade union representatives who can help in the rehabilitation of these people by employment.
  I should also like to ask to what extent refresher courses are available for the personnel engaged in this remedial
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  work. As I give way to the Minister. I should like to pay my tribute to the National Association for Mental Health for its valiant efforts to create community concern for these people. We in this House believe in the dignity of the individual and the rights of personality in finding expression, and I am deeply moved by the plight of people who want a chance to live a full and honourable life again.
  I believe that it is our obligation, and the Minister's obligation in particular, to provide that opportunity and I shall be grateful if the hon. Gentleman can enlighten us on the development of the community centre.
  10.31 p.m.
  The Joint Parliamentary Secretary to the Ministry of Health (Mr. Bernard Braine): I am well aware of the keen interest of the hon. Member for Cardiff, West (Mr. G. Thomas) in the subject which he has raised tonight, and I should like, if I may, to compliment him on the manner in which he has put his points, and to thank him for giving us the opportunity to consider this very human problem.
  The patients with whom we are concerned tonight are those who were admitted to hospital some years ago as genuine psychotics. They have now recovered from their psychoses, but are unable to leave hospital because, as the hon. Gentleman has said, for one reason or another suitable accommodation is not available. I should like to make it clear that this is not a new problem; indeed, I think that the hon. Gentleman himself recognised that.
  It is not a problem peculiar to Whitchurch, but a national problem. It stems in part from a change in the attitude to mental health discussed by the Royal Commission on the Law relating to Mental Illness and Mental Deficiency, and given legal recognition in the Mental Health Act, 1959. As the House knows, the essence of the change is, where possible, a movement away from the retention in hospital towards care in the community.
  In any consideration of the problem, we must recall that psychiatric patients range from those who cannot be released into the community because of their deep need for special supervision and treatment in hospital to those who, by any

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  standard, are able to move out of hospital back to their own homes to fend for themselves within the community. Between these limits there are many gradations of fitness, and many shades of ability to make the change from the one environment to the other. The patients with whom we are now concerned no longer need hospital treatment, but need to be helped in the community.
  I agree entirely with what the hon. Gentleman said about Whitchurch Hospital and the devoted staff who work there. This is certainly a very good hospital. Today, 95 per cent. of admissions are on a voluntary basis. Indeed, this was one of the first hospitals to run an associated day hospital. I noted what the hon. Gentleman said about day hospitals. This is something that must come gradually, and grow. It is a developing idea.
  There is no waiting-list for beds at Whitchurch, but there is pressure, and I readily recognise that a measure of relief would be provided if some of the patients about whom we are here concerned could be found places elsewhere. Moreover, I have no doubt that the hospital's staff are very anxious to achieve this. I am advised that there are altogether about 160 patients who could leave the hospital if satisfactory accommodation was available for them in the community. They are between 45 and 70 years of age, but predominantly in the 50 to 60 age group. There are about the same number of men as women. They are all long-stay patients who have been 10 years or more in hospital. None of them is detained against the patient's will and all are free to leave, but precisely because they have no homes to go to, either because their households have long since disintegrated, or because their relatives are unable or unwilling to accept them, the hospital has for a long time been their home.
  In saying this I remind the House that a custodial atmosphere of locked doors and rattling keys is not to be found in this hospital, and, indeed, should not be found in any psychiatric hospital. The present position is that a proportion of these patients is suitable for a welfare home of the kind provided for old people. A proportion would require greater supervision or segregation in special hostels. Thus, to a large extent, this is not a
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  problem of enabling a fully fit person to set up house again in society at large, but of transferring people, who are now free from disabling mental illness but who are still enfeebled by the effluxion of time, from one type of institutional care to another.
  It is essential that we should appreciate fully the condition of the people with whom we are concerned. I entirely agree with the very human approaches of the hon. Member in this. It is precisely because of this that I ask the House to consider the condition of these people so that we can set out to do whatever will be most helpful to them. As I have said, most of them are in the 50 to 60 age group and have been in hospital quite a long time. Clearly, the accommodation which we aim to provide for them must give them some protection from the stresses of the world at large while helping them wherever possible to come to terms with those problems and difficulties of life which are commonplace to most of us.
  The movement toward a greater degree of care within the community for persons suffering mental illness and of rehabilitation of former patients is still at a comparatively early stage. We have much to learn in this field. We are learning all the time. The solution of these problems will no doubt lie in more than one direction. The hon. Member has referred to the establishment of small groups of former patients in hostels. This is a very interesting development. It is one whose progress we are watching very carefully. As the hon. Member will no doubt be aware, a scheme run by one Welsh local authority won the first award in a national scheme for encouraging enterprising local authority services. I have seen the kind of work which is being done in this field and have been deeply impressed by it. But it is not something which can be planted down overnight; it must grow experimentally and we must watch its development very carefully.
  This problem is not peculiar to Wales. We find this sort of thing all over the United Kingdom now. These hostels help to bridge the gap for former patients returning to the community, and those which I have seen have had some remarkable successes. I know, however, that the hon. Member will realise that I

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  am not being insensitive to the problems of these people when I say that until the most suitable kind of accommodation is available they are best cared for in the hospital where, although the arrangement is not ideal, as I readily concede, they do enjoy a settled environment with which they are familiar.
  Whitchurch Hospital accepts patients predominantly from the area of the Cardiff County Borough Council. Some parts of Glamorgan also send patients to Whitchurch, but this is essentially a matter for Cardiff Corporation. Cardiff provides accommodation for cases from Whitchurch. There is one hostel, to which the hon. Gentleman referred. There are also a number of welfare homes providing 427 places to which patients from Whitchurch are admitted—12 were admitted in the year 1963–64—that is to say, if they are found acceptable by the Welfare Department. Naturally, these patients have to take their turn along with the many pressing cases of aged people from the community at large applying for accommodation. The present wafting list of 231 for this local authority accommodation includes 11 patients at Whitchurch Hospital.
  The hon. Gentleman wants me to say something about the measures being taken to increase the scale of accommodation of this kind. As I told him in our exchange at Question Time this afternoon, Cardiff's record in providing residential homes is good. Cardiff is a progressive local authority. In the next 10 years the city plans to provide a further 445 places in welfare homes, and some of these will be filled by patients from the Whitchurch Hospital. The city also proposes to provide a further 88 places in mental health hostels.
  But this, as I said earlier, is not just a local problem. It is a national one. Guidance which has been given to hospital authorities on the subject by my Department has laid down that the aim of hospital care should be, wherever possible, to enable the patient to return to life in the general community either independently or with help from the local authority or from other sources. But hospital authorities should not expect to return to the community large numbers of patients in mental hospitals who are not strictly in need of hospital
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  care but who, pending the provision of hostels, have nowhere to go. This would be heartless. It might, in some cases, be cruel in the extreme.
  The point has been made to local authorities regarding mental patients who are already in hospital that it would obviously be undesirable and impracticable to seek to uproot all of those who have been settled there for many years. It has been pointed out, however, that there will be increasing numbers of patients, including elderly persons, who, while they cannot for one reason or another be discharged to their own homes, could suitably be cared for in a local authority home after they have gained all the benefit they can from specialist hospital treatment.
  In the context of this debate we should remember that the initial effect of an expansion of community mental health services, such as the child guidance services and early detection of incipient mental disorder, is more likely to be a reduction in the number of patients coming into hospitals than the departure of patients already there who need hostel accommodation. We are in a field where changes are taking place very rapidly and I should not like to forecast what the pattern is likely to be in five to 10 years time.
  The hon. Gentleman was also concerned about the question of training for social workers. I can tell him that local health authorities are building up their staff of psychiatric social workers and other persons with advanced training. Of the 70 psychiatric social workers who qualified last year in the United Kingdom, 22 went into the local authority mental health service as distinct from the child guidance service, compared with 14 going into the hospital service.
  In England and Wales the total number of psychiatric social workers or others with advanced training, in terms of whole-time equivalents, employed by local health authorities, was 106 compared with 91 at the end of 1962. In Cardiff, there is a course in specialised social work at the University College. The hon. Gentleman will probably know something about that. Also, the local education authority is running its own course in social work. Thus, the city itself, in these two ways, is making a

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  contribution towards solving the problem.
  The provision of residential accommodation on a national scale is also encouraging. As my Department's Annual Report for 1963, published last week, shows, the building of residential hostels gained momentum during the year. Twenty-eight hostels for the subnormal, providing 554 places, were opened in England and Wales, and nine hostels for the mentally ill, providing 228 places. Loan sanctions were issued for the cost of building 31 more hostels for the subnormal, to provide 751 places, and nine hostels for the mentally ill, to provide 207 places. The building of residential hostels now forms roughly half of the value of the local authorities' mental health building programme, whereas in recent years training centres have been predominant. This indicates the contribution which my Department is making to help towards the solution of the problem.
  By the end of the next 10 years, local authorities in England and Wales plan to provide well over 200 hostels for the mentally ill, with over 5,000 places, at a cost during that time of over £8 million. This is in addition to the accommodation provided in ordinary welfare homes for people who are mentally infirm as well as elderly.
  The hon. Gentleman stressed the importance of ensuring co-operation, a theme constantly recurring in his exchanges with me on the subject, that is, co-operation between all concerned in the administration of our Health Service in tackling the business of easing the return of former psychiatric patients to the community and helping them to lead as fruitful and active a life as possible within
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  the community. I entirely agree that co-operation is the key to success in this as in other fields.
  When the Mental Health Act was passed, the Minister at that time placed great emphasis on the need for co-operation in achieving those aims which the Act set out to achieve. My right hon. Friend and I, and the Welsh Board of Health, continually stress the vital importance of effective co-operation, and I am very glad of the opportunity which this debate provides to stress the point once again. I have taken note of what the hon. Gentleman said about the management of hostels. He will appreciate that this is a local authority responsibility, but I do not doubt that the City of Cardiff will be interested in what he has said.
  The subject of our debate tonight is extremely important, and I am sure that the hon. Gentleman will join with me in expressing the hope that our consideration of it for a few minutes will serve to encourage to even greater efforts all those involved in the work of rehabilitating people who have suffered mental illness.
  I have mentioned the staff of Whitchurch Hospital already, but, in conclusion, I should like to pay a tribute again to them and to all the medical staffs engaged in the care and treatment of mental patients. I understand their anxieties in this particular case. We must do all we can, through effective co-operation, to help solve the problem. I am, therefore, most grateful to the hon. Gentleman for raising the subject and, in particular, for the way in which he did it.
  Question put and agreed to.
  Adjourned accordingly at ten minutes to Eleven o'clock.