§ 4.18 p.m.
§ The Chairman
It would be convenient if I were to begin by referring to a question put to the Chair yesterday by the hon. Member for Shipley (Mr. Hirst), who expressed anxiety regarding the selection of redrafted Amendments whose redrafting was made necessary by Amendments accepted yesterday.
I would like to tell the Committee that it would be my opinion that any Amendment put in to replace an original Amendment would be acceptable although it might be put in so late as to be starred. Further, should there be insufficient time to put a new Amendment so affected on the Notice Paper, I would be prepared to consider accepting a redrafted Amendment in manuscript form. I think that that would meet the anxiety of the hon. Member for Shipley, and I think, of all right hon. and hon. Gentlemen.
§ Mr. Douglas Jay (Battersea, North)
On a point of order, Sir William. I think that we must be clear about where we are. It seems to me from your statement that we are now in a worse position even than yesterday's. I really must ask you to allow me to move, That the Chairman do report Progress and ask leave to sit again, so that we may have a chance to sort out the procedure of the Committee and conduct the business in a reasonable manner.
The position appears to be that, owing to the successive vacillations and alterations of policy by the Government, we now find that, following the very extensive verbal amendment that the Bill received only yesterday, a number of the later amendments which had been put down in perfectly good faith by right hon. and hon. Members on both sides, and which were quite in order then, have now apparently been rendered out of order by what was done yesterday.
265 That, of course, is no fault of yours. It is entirely due to the blunders and the incompetence with which the Government are conducting their administration—in particular, this Bill. It is bad enough if they conduct their affairs in that way, but even worse if they make it impossible for the Committee seriously and rationally to examine the Bill. That seems to be the point we have reached. I understand that we have at least two days on the Committee stage before us. We do not know—
§ The Chairman
Order. I should make it clear to the Committee that at this stage I am not prepared to accept a Motion to report Progress. I am hearing the right hon. Member for Battersea, North (Mr. Jay) on the subject which I initiated. Further to that, this is not something which never happens. Quite frequently, Amendments are accepted to Bills which are being considered in Committee, and, if those Amendments affect subsequent Amendments, it is not unusual for the Chair to allow latitude to those hon. Members who wish to bring their subsequent Amendments up to date so that they can have a bearing on the Bill as it then stands. I go no further than that.
§ Mr. Jay
I gather, Sir William, that I am in order in proceeding with my brief argument.
However, whether unprecedented or not, the situation is undoubtedly that there are many hon. Members on both sides of the Committee, especially hon. Members opposite, who have Amendments on the Notice Paper and who put them down legitimately and in good faith, regarding them as being in order and, until lunch time today, having reason to believe that they would be called. We now find, as a result of the changes made yesterday, and because the Government put down these Amendments only over the weekend, that a number of the later Amendments—I do not know how many, because information about this reached us only after lunch today—are out of order.
If the business is to be conducted properly—and, goodness knows, the Bill needs examination and amendment—a number of new Amendments will have to be put down. I recognise—
§ The Chairman
I hope that the right hon. Gentleman will forgive me for interrupting him again. We are being a little premature in our anxiety at the moment. I do not foresee one of the Amendments affected coming up for discussion for some little time.
§ Mr. Jay
The difficulty is that the Amendments relate to Clauses and not to days. For instance, if there is an Amendment relating to Clause 3, which is affected, we do not know whether Clause 3 will be taken today or tomorrow. If it is taken tomorrow, then, during the course of this afternoon and this evening, while we are supposed to be seriously examining the Bill, we will somehow have to ascertain whether our Amendments already on the Notice Paper to later Clauses are in order and—I suppose in the backs of our minds—while w, debate the Bill we will have to go through the somewhat complicated process of redrafting Amendments, getting them in order and putting them on the Notice Paper.
Although I recognise, Sir William, that you are doing all you can to help us by your statement, in spite of you and not through your fault and if hon. Members on both sides of the Committee do the best they can to get things put right by tomorrow, it still will not be possible to conduct the rest of the Committee stage in a proper and businesslike manner. I should therefore like to suggest that the Government now come clean and do what they should have done yesterday—agree to postpone the rest of the Committee stage until after the Easter Recess so that hon. Members—
§ The Chairman
The right hon. Gentleman is getting further than matters to which I can reply. As Chairman of the Committee I am satisfied that we can conduct ourselves with the Notice Paper as it is, subject to the provisions which I have announced in response to the hon. Member for Shipley, without finding that we are at risk. I propose that we should now continue our discussion on Clause 1.
§ Mr. J. J. Mendelson (Penistone)
I should like to urge you, Sir William, to reconsider the earlier suggestion of my right hon. Friend the Member for Battersea, North (Mr. Jay) to report 267 Progress. I do so on grounds not yet advanced.
The Bill has been received with hostility to principle as well as detail and there are many hon. Members who agree with the general principle although feeling that it does not go far enough and does not start at the right end and who decided not to oppose it on Second Reading but to try seriously to improve it in Committee. Since that decision was taken by hon. Members on both sides of the Committee, a number of private conferences have taken place. At the last moment, those hon. Members of whom I have spoken have been placed in an impossible position in that they have not had time to consider their attitude vis à vis the new situation. It would be impossible for the Committee to live up to its reputation as the main instrument used by the House of Commons when acting as a legislative workshop and it would not be in the interests of good government to go on with this debate.
§ The Chairman
I thank the hon. Member for his observations, but my own conclusion is quite the contrary. I think that we can proceed and see what progress we make. I should like the Committee now to address itself to the first group of Amendments, on which I should like to make a statement.
§ Mr. Geoffrey Hirst (Shipley)
As the Member who put the point to you, Sir William, I should like to thank you for your kindness and courtesy in dealing with this matter. As is recognised on both sides of the Committee, you always attempt to meet the convenience of the Committee with the graciousness and kindness which we have come to expect. However, there is something which concerns me.
You have many advisers, and so have the Government, but I speak as a humble back bencher who is responsible for a number of Amendments on the Notice Paper, and I find the new situation very difficult. I do not think that it is fair to us. We do not have the facilities and the necessary technical advice which must be given by learned counsel.
In circumstances such as these, when the Government have made a fundamental drafting change—nine Amend- 268 ments to the first Clause—we do not know what the effects on some of our Amendments there will be. I do not know how many are now made nonsense in the light of the Amendments which have been made. We cannot question your selection of Amendments and I do not do so, but we do not now know where we are.
I have taken advice—and I respect the advice I get here—and I am informed that this is not a very usual situation. As the Committee stage is being put through on three consecutive days, we do not get much time to seek advice. Your judgment was very considered and no doubt you are right when you say that our earlier Amendments will not be affected; but I am responsible to many people outside Parliament and I think that I should have more time to consider the position. To accept Clause 3 without that further opportunity would be a travesty of justice in the circumstances.
§ The Chairman
My own view is that the hon. Member is unduly apprehensive in his fears about our early Amendments being affected. When we reach Clause 3, we shall be nearer the point at which Amendments might be affected. I invite the Committee now to continue its discussion of Clause 1.
§ Mr. Eric Fletcher (Islington, East)
The Committee is being placed in an intolerable position if it is asked to consider a Bill to which there are about 200 Amendments on the Notice Paper, many, admittedly, out of order by reason of an Amendment to Clause 1 which was carried last night, but involving consequential Amendments to at least three other Clauses, Clauses 2, 5 and 6. At your suggestion, Sir William, yesterday we considered a group of Amendments with far-reaching effects not only on Clause I, but on other parts of the Bill. The result of that decision is that, inevitably, the subsequent Clauses of the Bill will be recast.
Sir William, I think you have recognised that as a result of that a large number of Amendments put down by hon. Gentlemen opposite and by hon. Members on this side of the Committee will be out of order and, therefore, presumably will not be selected. Some of 269 my right hon. and hon. Friends, and some hon. Gentlemen opposite have been working very hard to try to work out the necessary revisions which will be required to those Amendments. There are many other hon. Members who are equally interested in the Bill, as are all our constituents, and are anxious that when the Bill emerges from the Committee it should be as rational and sensible in its language as we can make it.
You suggested that manuscript Amendments would be accepted by you on this occasion in your discretion as Chairman, but may I point out that the acceptance of manuscript Amendments, although they may be acceptable to you as Chairman of the Committee, places all other Members of the Committee in great difficulty? We have here one of the most complicated Bills ever introduced in this House, involving every citizen in the country. We are all anxious that it should be as rational as possible in its form, whatever divergent views we may have on various points of principle.
If you are conceding that it will be right for you to accept manuscript Amendments, you will have those Amendments before you, and they will no doubt be read out by whoever moves them, but every other hon. Member, whether or not he happens to be in the Chamber—even more so if he is not—at the moment when they are read will be in an impossible position. How can a Committee of the whole House be expected to work seriously, conscientiously, and rationally on manuscript Amendments to this kind of Bill?
For those reasons I very much hope that you will reconsider your decision not to accept a Motion to report Progress. I gather that you have intimated that one reason why you are not prepared to do so is that you do not know how far we shall get today. Nor do we, of course. All we know is that the Government's intention was to get the whole of the Bill through the Committee stage by tomorrow night. If that is still their intention it follows that some time today there is a chance that we shall read the stage when we shall be considering manuscript Amendments.
There cannot be this unseemly haste in rushing the Bill through the Committee. The Government have brought this 270 sorry position on themselves by their own vacillation. Surely, in fairness to the Committee and to the country, the right course is for further consideration of the Bill to be postponed until after Easter so that we may ascertain the considered views of our constituents on the revised Bill before us and have adequate time in which to frame essential Amendments to it?
§ The Chairman
If I might reply to the hon. Member's remarks about manuscript Amendments, I appreciate that they carry weight, but that is a part of the machinery of our procedure.
I am satisfied that the present group of Amendments under discussion is not at all affected by what was done yesterday. I can see no reason why the Committee should not continue with the consideration of that group of Amendments, and that is what I should like the Committee to do. It may be that when we get further on, possibly to the end of Clause 1, it would seem right and proper for an hon. Member to move that I report Progress and ask leave to sit again, but I cannot guarantee what the result will be. It may seem right and proper then, but I am sure that with the knowledge that we have we can conduct our debate on the present group of Amendments without further delay, and that is what I should like the Committee to do.
§ Mr. William Wells (Walsall, North)
Sir William, may I add a few words to what was said by my hon. Friend the Member for Islington, East (Mr. Fletcher). I will not for a moment argue with what you have said about the position of this group of Amendments, or indeed about any Amendments arising on Clause 1, but the difficulty is that both those, hon. Members who are putting down Amendments from the back benches and those who are trying to frame Amendments which the Opposition are putting down officially, do not have the expert advice which the Government have, or which, with respect, you yourself have.
I do not pretend to have the ability of a Parliamentary counsel, and though I am sure that my hon. and learned Friend the Member for Liverpool, Edge Hill (Mr. A. J. Irvine) has that ability, he cannot carry the whole burden on his shoulders The difficulty is that we 271 cannot be in two places at once. If we are trying to keep pace with what is going on in the Chamber, we cannot be considering what impact the Amendments which have been made to the Bill have on the rest of the Bill.
I doubt whether it is really in the interests of the good conduct of business in this Committee that we should live from hand to mouth in this manner. I ask you to consider that we have responsibilities to those outside the House, and that it is really intolerably difficult to conduct our business in these circumstances. Of course, we are all accustomed to situations in which Amendments are put down at the last moment, but here a large group of Amendments has been put down, and under normal practice we would be given a week's or two weeks' notice of them.
§ The Chairman
I am obliged to the hon. and learned Member, but nothing that I hear affects my decision with regard to getting on with our debate on Clause 1, and that I feel is what the Committee should do. At a later stage it will be open to reconsider the matter, but I can see nothing to prevent our getting on with our work now. As Chairman, that is my duty, and I should like to get on with the business.
§ Dr. J. Dickson Mabon (Greenock)
Sir William, if there were an Amendment which would add a cubit to my stature I would move it now for I have been trying to catch your eye for some time. Last night your distinguished predecessor promised that he would consider the point which some of us persistently made throughout the debate yesterday about the grouping of these Amendments. Some of us feel that there is a good case for taking Amendments Nos. 17 and 27 out of this group. If we are to be limited by the advice which you have given about the way in which we are to conduct our business, the case for taking those two Amendments separately is all the stronger, and I appeal to the Chair that those Amendments should not be taken with the others in this group.
Very different principles are involved. While I appreciate the commonality of Amendments Nos. 17 and 27 to the other Amendments, they nevertheless repre- 272 sent a distinct principle. In view of the complexity of the discussion, I think that they should be taken separately, and I appeal to you to allow that to be done.
§ The Chairman
I am obliged to the hon. Gentleman, and I have considered afresh the point raised by him yesterday. Hon. Members will see that in yesterday's notice of selected Amendments, in addition to No. 7, No. 17 was starred for a Division, and today I have starred No. 14 as well for a Division. That means that three separate Divisions can be taken on the three separate points. Hon. Members will have no difficulty in registering their votes on the separate Amendments.
I had to consider whether it was right and proper to consider the Amendments together, in a group, and I came to the conclusion that it was. They overlap each other. If hon. Members look at their Notice Papers they will find that that is the case. For that reason I must abide by the decision to keep them in a group. By allowing three separate divisions the rights of hon. Members will be adequately protected.
§ Mr. Archie Manuel (Central Ayrshire)
I recognise that you take the view that the four Amendments should be considered in a group, because of their commonality, as my hon. Friend the Member for Greenock (Dr. Dickson Mabon) suggested, but I would point out that hon. Members on both sides of the Committee have received a considerable volume of correspondence concerning the principles laid down in Amendments Nos. 17 and 27. Those two Amendments apply only to medicines and drugs, and so that we may represent constituency interests on both sides of the Committee we would appreciate it if those two Amendments could be debated separately.
We would not be wasting any more time. It would be better to get on with our proceedings in that way, instead of continually trying to obtain freedom of expression by appealing to the Chair, Sir William.
§ 4.45 p.m.
§ The Chairman
I understand the anxieties of the hon. Member, but I can assure him that the subjects that he has mentioned are also covered in Amendment No. 14.
§ The Chairman
Yes, but throughout those four Amendments and the new Clause there is a constant overlapping. I have given my best judgment on the matter, and I hope the Committee will allow me to continue in the way that I think best.
§ Mr. Michael Foot (Ebbw Vale)
I return to a fresh aspect of the point of order raised by my right hon. Friend the Member for Battersea, North (Mr. Jay) a few moments ago. The criticism of the way in which the Committee is conducting this part of its business derives first from the question put by the hon. Member for Shipley (Mr. Hirst). He has reinforced the question that he put yesterday by his remarks today. I am sure that you will agree that hon. Members on this side of the Committee have presented powerful arguments, and that they feel—perhaps wrongly, in your view—that they will be greatly inconvenienced by the way in which the conduct of our business has been arranged.
I would point out that the only section of the Committee from which we have not heard a word on this matter is the Treasury Bench. You have said that there are precedents for the suggested procedure. According to my recollection, when Governments have wished to alter the procedure on a Bill in a drastic form they have usually explained at the beginning what they wished the Committee to agree to.
The proper procedure now would be for the Government to move to report Progress, so that they could explain how they wished our proceedings to be conducted. If the Government found that, owing to a strange combination of circumstances, we were in difficulties, and that they had complicated our business and were putting hon. Members on both sides in difficulties—and it has been proved that that is the case by what has been said—in normal circumstances they would ask for the indulgence of the Committee.
This would not only be the most courteous way but the most expeditious way to proceed. If the Secretary of State had responded not merely to appeals from this side of the Committee but to those of his hon. Friends—and, 274 in particular, the hon. Member for Shipley, who originally raised the question—and had moved to report Progress and ask leave to sit again, in order to make a brief statement on the business of the House, apologising for the situation in which he had placed hon. Members and asking for their indulgence and assistance, he would have had a better hope of proceeding with the Bill than by coming here not caring a fig about how we proceeded. He has treated the House with outrageous discourtesy. When he wishes to change the whole structure—
§ The Chairman
Order. I am at fault in allowing the hon. Member too much indulgence to develop his point of order. I have considered what has been put to me, and the views of hon. Members have been heard all over the Committee. In my opinion, the submissions that have been made do not affect the consideration of Clause 1.
I now propose to call upon the Committee to consider further Amendment No. 7, in page 1, line 15.
Amendment proposed: In page 1, line 15, at the end, to insert:
except where the customs and excise duty exceeds 60 per cent. of the net cost price as determined in section 3(2) below".—[Mr. Hocking.]
§ Mr. Jay
On a point of order. In view of what you say about Clause 1, Sir William, may I make a suggestion to help us out of the difficulty? We must, naturally, accept your Ruling, but we shall have to do so under protest if we are forced to go on with the discussion of the Bill in these circumstances. If the public outside is to have respect for the law and confidence in the way in which we conduct our proceedings, and if, as a result of the Government's action—and not our action—a number of hon. Members on one side of the Committee do not have that confidence, I do not think we are conducting our proceedings as we should. I ask the Secretary of State to help us to get out of the difficulty in this way—
§ The Chairman
Order. I think that I should be allowed to conduct the business of the Committee as seems to me to be proper. I have tried to carry the Committee with me and I have made it clear that what I am inviting it to do 275 now is to consider this group of Amendments. I have made it clear that at a later stage I shall certainly be prepared to accept a Motion to report Progress and ask leave to sit again, but it is nearly five o'clock, and we must get on with our business.
§ Mr. Jay
But I was attempting to respond to the precise suggestion that you made, Sir William. You have said with some force that these changes do not interfere with the consideration of Clause 1, and because you say that I ask the Secretary of State whether he will give an assurance that the Government will not attempt to proceed beyond Clause 1 this side of the Easter Recess. If he could give us that assurance, in view of your suggestion—and because the whole difficulty arises from the Secretary of State's action and not ours—it would be very helpful. The Secretary of State could get us out of this difficulty by responding to that suggestion.
§ The Secretary of State for Industry, Trade and Regional Development (Mr. Edward Heath)
On a point of order. In view of the way in which the debate has gone I must speak to a point of order. The hon. Member for Ebbw Vale (Mr. M. Foot) seems to have overlooked the fact, in his exuberance, that yesterday I accepted Amendments put down by my hon. Friends. Those Amendments were on the Notice Paper, and were moved by my hon. Friends. I accepted them. Their consequences flow through the Bill. I am in agreement with you, Sir William, that it is possible for us to continue our business as laid down on the Notice Paper.
I hope that the Committee will be prepared to do that, because we share the anxiety of the right hon. Gentleman that we should make progress with the Bill. He said that he wants the public outside to realise how much we want to see the Bill through. The best way to demonstrate that is for him and his hon. Friends to help us make progress.
§ The Chairman
We are running into the danger that points of order rightly addressed to me, and to which I reply, are developing into more general speeches. When that happens they become out of order.
§ Mr. Sydney Silverman (Nelson and Colne)
I am obliged for your indulgence, Sir William. It was precisely, as a point of order, that I rose to put to you what you have said. The situation we have now is that the right hon. Gentleman has been allowed—in the course of putting a point of order to you, about whether the Motion should be accepted or not—to make exactly the kind of speech that he would have been in order in making had you given leave to my right hon. Friend to move his Motion. In my submission, every word of what the right hon. Gentleman has just said was out of order, but it was a very necessary thing for him to say.
The point I want to put to you, Sir William, is that in the vastly difficult situation which everyone knows us to be in, it might have been proper to give my right hon. Friend leave to move, That the Chairman do report Progress and ask leave to sit again, to give the Government an opportunity to explain how they view the situation and what they would like—as distinct from what you would like, Sir William—the Committee to do in the matter.
§ The Chairman
I am obliged to the hon. Member for his opinion. This has now been discussed long enough and I am sure that we must get on. The Question I have to put is, That those words be there inserted.
§ Dr. Dickson Mabon
On a point of order, Sir William. If the Chair would be kind enough to consult the records it will be found that I have what is called a right of pre-emption in that I was called by the Chair and I was about to begin my speech when I was interrupted by the Secretary of State for Industry, Trade and Regional Development. It was a very welcome interruption, and I only hope that the right hon Gentleman can do it again.
§ The Chairman
In actual fact, the hon. Member has no specific right. But he may be in no doubt that he will catch the eye of the Chair quite soon.
§ Mr. Manuel
The hon. Member for Bristol. West (Mr. Robert Cooke) was not even in the Chamber last night. He was at home in bed.
§ Mr. Robert Cooke
I hope, Sir William, that I shall now be in order if I address some words to the Committee on the first Amendment placed on the Notice Paper by some of my hon. Friends.
I think that my hon. Friends are mistaken in thinking that this Amendment, which seeks to exempt those cases where customs duty exceeds 60 per cent., would meet the point of objection made particularly by those gentlemen in the licensed trade who are represented by the Licensed Victuallers Association and other bodies of that kind. It is to that part of the Amendment that I wish to direct my remarks. I know that the question of tobacco would be included, but there are other hon. Members, who represent interests of that kind, and would know more about it than I.
I have no personal financial interest in the licensed trade, but I have had some experience of the workings of that trade. I did have an interest until about two years ago, so I know something of the difficulties in which those who have made many representations to hon. Members of both sides of the Committee on the subject find themselves. They have come to hon. Members and said that they feel that resale price maintenance should be maintained in the licensed trade. They feel that it would protect their position, because off-licensees find that their position is being attacked all the time by various people who are selling alcohol of one sort or another, particularly spirits, at prices way below the present retail price.
This is possible because any person who cares to go to a whisky manufacturer—I will confine my remarks mostly to whisky because it provides a good example but I have no doubt that this applies to other spirits as well—and if he is prepared to buy large quantities, may get them at a very advantageous rate. The retail price for whisky is 41s. 6d. a bottle. But one would find that the wholesale price one would be expected to pay would be 35s. 10d. a bottle. One might do even 278 better if one were prepared to buy larger quantities. That applies to everyone, except the off-licensee who, in a very large number of cases, is a tied tenant of a brewer. Even after the passing of the last licensing legislation a vast number of retail outlets for drink are still in the hands of the brewers. This is a continuing process of expansion on the part of the brewers who buy up wine merchants and similar establishments in order to get an increasing hold on the retail outlets.
Off-licensees who have been so vociferous, and have written letters and sent delegations to lobby hon. Members, make the pint that they find themselves at a disadvantage compared with club owners and other people who are able to sell whisky and other spirits at cut prices. They say that they would like r.p.m. to continue. What they really want, of course, is that r.p.m. should be continued not just for them, but for everyone else as well. They would like a protected market. One cannot blame them because they can only buy from the brewer—he is their exclusive source of supply, they are not allowed to buy from anyone else if they are tied tenants—as well as private individuals or someone in competition with them, the free men. So they would like everyone to be in the same boat as they are. That, of course, is quite impossible. No law that I can visualise could be made to put free people in the same restricted field as the off-licensee finds himself.
§ Mr. Leslie Hale (Oldham, West)
I apologise for interrupting the hon. Gentleman. But when he rose I rushed out to get a copy of HANSARD to find out what had been said yesterday and to see what other Amendments are being discussed with this Amendment. I am told that no list of selected Amendments is available at the Vote Office, as is normal. I have not heard the hon. Member refer to any Amendment on the Notice Paper. The note which I made yesterday was that the other Amendments related to quite different matters from those being discussed. Can the hon. Gentleman tell us what we are now discussing? Are we discussing Amendments Nos. 14 and 17?
§ The Chairman
May I help the hon. Member? The notice is never in the Vote Office. It s[...] posted in the "No" Lobby. 279 If the hon. Member consulted the notice in that Lobby at this moment he would get the information which he requires. To help him, may I read it to him? With this Amendment, which is No. 7, are being discussed Amendments. Nos. 14, l7 and 27 and the new subsection, Amendment No. 10.
§ Mr. Robert Cooke
Thank you, Sir William, for dealing with that interruption by the hon. Member for Oldham, West (Mr. Hale). I was addressing my remarks to those words which appear first on the Notice Paper today. I wish to confine my remarks to that Amendment and not stray into wider fields which would involve some of the other Amendments.
Off-licensees, who have been very active in the matter, wish the restrictions which apply to them to be made to apply to other people who are in competition with them. As I was about to say, that seems to me to be an impossible burden to put upon Parliament—to make a further restriction—and surely the Government are right in trying to take off a restriction and to achieve free competition in this field.
My hon. Friends who put down the Amendment are mistaken in thinking that it will have the result which they suggest. What really should be done is, the Bill should go through as my right hon. Friend has left it, but perhaps we could cover the future if my right hon. Friend were able to say—within the rules of order—a little word of encouragement in this direction, that perhaps even the Bill may have some effect for those unfortunate tied tenants of the brewers; and that under the provisions of the Bill—if not perhaps we may get some encouragement for the future—they will find themselves in a position of freedom where they can buy their supplies at the best prices and sell them at the most competitive rate, which is not happening at present.
What my hon. Friends suggest by this Amendment would not help to get the free competition that we all want and which would be to the benefit of the consumer. I hope that the House will reject the Amendment and that my right hon. Friend will advise against it and that he will be able to do something about getting, in a real sense, a free market in the licensed trade.
§ 5.0 p.m.
§ Dr. Dickson Mabon
I believe it was the late James Maxton who once said. "If you can't ride two horses at the same time you ought not to be in a circus." I congratulate the hon. Member for Bristol, West (Mr. Robert Cooke) on managing to achieve that act this afternoon. He ought to have put down an Amendment confined to the difficulties about tenants of brewers.
It is not for me to praise Amendments which have been put down to the Bill, but I think the hon. and learned Member for Hove (Mr. Marlow), with Amendment No. 14, rather caused the wheels of the bandwagon to fall off. The trouble about that Amendment, which we are considering in this group, is that it is so heavily loaded with all kinds of interests that it is difficult to make a coherent case on any one. It is all very well for the Minister to say that it is not Parliament's place to debate the circumstances and that it is for the Registrar to invite the Court to do that, but if the various items had been taken in order by the Committee there might have been a case made for some and against others.
I believe there is a case for some of these items. The Restrictive Trade Practices Court has already shown that on two of the items mentioned in Amendments the practice is not acting against the public interest. The Secretary of State ought to tell us why when he introduced the Bill he did not make it clear that goods which have been examined by the Court already should not automatically be exempt. Why should there be this procession of testimony again to an overburdened Court, which will be more overburdened in the years to come if this Bill becomes law? Amendment No. 14 is so overweighted with vested interests, legitimate or not so legitimate, that it cannot succeed.
That is why I regret that we are taking that Amendment with Amendments numbered 17 and 27. Defeat can be contagious. I do not accept the usefulness of Amendment No. 27. I have reasons for saying that but I shall not go over them now. I think there is an excellent case for Amendment No. 17. If the Minister is to cavil on technical points, I willingly admit that that Amendment is not very well drawn. 281 As my hon. Friend the Member for Flint, East (Mrs. White) said last night, the words "any substance recommended" could be misconstrued in a multitude of ways. "Any substance" could refer to any alcohol. Again who recommends the substance?
I admit right away that this is not a perfect Amendment, but we all know that although an Amendment may lack perfection in some regards it is the principle we seek to ensure that is Important. The Secretary of State, in his reply to this debate, may like to bracket all reference to drugs with cosmetics, tobacco, cigars, sweets, wines and spirits, but I think that would be most unfortunate. There is a very good case to be made about drugs.
When I was in America in the summer I had occasion to mix with doctors in Harvard. I was at one time with a doctor who was prescribing for a patient. I was with him on two separate occasions purchasing the same drug. I was astounded to find that there was a different price for the same proprietary drug in different shops. It was a specific new drug and it struck me as unfortunate that there should be different prices. When we found it offered at a lower price I was concerned to find whether it contained the same ingredients.
It is difficult for a biochemist to do that, but when the public are faced with different prices for the same drug they immediately consider it best to buy the more expensive variety in the belief that it is more reliable. This will not tend to lower the price. In some trades it is well known that it is better to charge a higher price in order to sell goods.
§ Mr. Wilfred Proudfoot (Cleveland)
Surely the hon. Member realises that there is a maximum price which cannot be exceeded?
§ Dr. Mabon
That is a bad argument. I am arguing on the question of variability in prices of a drug. How far the prices are below the maximum does not affect the point about variability. It is undesirable to have the same drugs sold at varying prices because that confuses those seeking to purchase the drugs. It will doubly confuse people seeking to buy drugs for others.
282 That leads me to the question of self-medication. The medical profession has set its face against encouraging self-medication. Hon. Members who have some experience of a doctor as a friend will know something of the human tragedies which are seen in surgeries. They have so long relied on self-medication that they arrive in the surgery far too late for anything to be done for them. I am against encouraging prolonged self-medication. These are two important points which have to be taken into account in considering Amendment No. 17.
I cannot accept the argument that the Registrar should decide these things. It is a very unfair burden to impose on him that not only should he have economic knowledge but also medical and pharmacological knowledge to enable him to arrive at conclusions on matters such as these. If the Minister refuses to exempt drugs, logically they will have to be among the groups paraded before the Board of Trade for the Registrar to decide in which priority they shall go before the Court.
§ Dr. Mabon
I apologise. Perhaps in the excitement of my delivery I said the wrong words. I meant to say that the Court is not qualified to make decisions of this character.
The Court might agree that there is a case for admitting certain groups of drugs to the exemptions. The damage done may not be so large and on balance it may not be against the public interest. But there are a large number in which it can be argued that it would be wholly against the public interest to have variability of price. Drugs, unlike many groups of articles mentioned in these Amendments, are of considerable public concern and there is a great deal of legislation about them. There is a great deal of legislation still to come on this 283 matter. This is part of the good case for exempting drugs.
The Dunlop Committee has not arrived at conclusions about how to operate the testing of drugs and the ultimate licensing of drugs for sale to the public. Yet we know from the statements made by the Minister of Health that there is to be legislation on the subject. We can all recollect the thalidomide disaster as one of the principal reasons for activating the Dunlop Committee. This has not been resolved either medically or publicly. The lawyers are not sure how any future Bill will be drawn and neither are the doctors. The Dunlop Committee is in active consideration concerning how it should go about the matter.
The next point that springs to mind is that we have through the Ministry of Health a voluntary price agreement—of what the price will be when purchasing drugs for the National Health Service.
§ Mr. James Dance (Bromsgrove)
I am most grateful to the hon. Gentleman for giving way. I think there is a little confusion here. Already there are variations of the prices of these types of drug not on the National Health Service. Not long ago I had conjunctivitis and I was given a prescription by my doctor which, I think, was chloromycetin. At one chemist's I paid 6s. 6d. for a little dropper bottle and at another chemist's 8s. 6d. This was within the course of two or three days, so surely resale price maintenance is not there at the moment.
§ Dr. Mabon
I cannot comment unless the hon. Gentleman shows me exactly what he means. Different companies sell different forms of drugs—I concede this, particularly from abroad—at different prices, but the hon. Gentleman is anticipating my speech.
284 Let me deal with the voluntary price agreement. One of the bargains made between the Government and the drug manufacturers is that if one buys through the National Health Service drugs, one gets them at a certain price, but if one takes them out of the Health Service one gets them at a higher price. The voluntary price agreement is there in order to arrive at what would be a fair return on the research done to acquire these drugs. Many of these drugs are expensive discoveries. Of course, other firms can acquire knowledge of these drugs once they are on the market, and can cash in on them. I concede that. However, if we are not to strangle original research we must make sure that there is an appropriate reward for companies which engage in pure research, as, otherwise, we shall end up by having no research of our own and having "to borrow" the formulae from foreign companies.
It is hardly fair to apply a Bill of this sort to drugs when this would prejudice the voluntary price agreement. Some of us are concerned about the economics of the drug industry, and we feel that it is a subject which merits examination on its own, that it is not a subject which ought to be the general concern of a Bill for the abolition of resale price maintenance. We are concerned with the safety of patients, with the quality control of drugs and with ensuring that the manufacturers of these wonderful instruments of human comfort are in no way impeded in their proper development.
It is wrong that drugs should be brought within this Bill. I have mentioned quality control. Anyone with knowledge of the operation of the Ministry of Health knows that one of the grave concerns, not only in this country but in others, is to exercise proper quality control over drugs. This is something which has really got to be done properly. For the arguments which I have advanced, I feel that it is clearly wrong merely to permit anything which would encourage price variations, that we should have the public confused over the price of drugs for the same purpose and that it is wrong that we should have drugs regulated in this way when they can be regulated by a voluntary price agreement or by recommendations following 285 an inquiry into the drug industry. It is wrong in my view that drugs should be covered by the Bill when we have important committees considering the matter, including in particular the Dunlop Committee.
For all these reasons I think that Amendment No. 17 should be incorporated in the Bill in some form, and I hope that my hon. Friends will support me.
§ Mr. William Clark (Nottingham, South)
I supported my right hon. Friend on the Second Reading of the Bill on the understanding, in my own mind, that the Bill could be strengthened in Committee. I wish to speak only to Amendment No. 7, because I am sure that my hon. Friend the Member for Putney (Sir H. Linstead), in addition to what the hon. Member for Greenock (Dr. Dickson Mabon) has said, will deal with the chemists' interests in the matter.
I do not apologise for anything in Amendment No. 7 because I accept the fact that it is probably a device to get exemption from the Bill. The Amendment says that anything carrying a customs duty in excess of 60 per cent. should be exempted. I do not accept the argument of my hon. Friend the Member for Bristol, West (Mr. Robert Cooke). I am sorry that he was not present yesterday when my hon. Friend the Member for Coventry, South (Mr. Hocking) moved the Amendment, because he never brought into the argument that the Amendment was intended to help tied or untied houses in the matter of spirits. His main argument was that goods carrying a customs duty of 60 per cent. were, in fact, tax gatherers for the Exchequer. Any industry which collects a tremendous amount of tax—it runs into nearly £1,000 million a year—should have special treatment as far as the Resale Prices Bill is concerned.
I am afraid that if we do not get some exemption for such industries as the spirits and tobacco industries we may find—this is particularly so in the tobacco industry, where the margin of return is so very small—that if one has a reduction in price the tobacco content in cigarettes will go down and, consequently, that the revenue which the Exchequer collects will also go down. This may be a good idea, but I think the Committee wants to look at the 286 matter coldly and squarely and to realise that if we are going to lose a substantial part of the revenue which we get from spirits or tobacco it has to be found elsewhere.
No one advocating less smoking has ever given me any valid reason or answer as to how that revenue is going to be rep aced. I understand that the only country which has exempted large tax-bearing goods from resale price maintenance is Denmark. I accept the fact that in Denmark the customs duty is allied to the retail price of the goods whereas curs is regulated according to the amount of spirit in the bottle of whisky or the tobacco in a cigarette.
If I am right in my contention that, because of the small profit margin and the price cutting that may arise owing to the imposition of resale price maintenance, we shall get a reduction of alcohol or tobacco and that, consequently, the Exchequer will lose money, then I would have thought that there was a case, for exempting these sorts of goods. The tobacco industry has, in fact, been investigating recently, and, although it was incidental to the decision of that court, it was said that resale price maintenance in the tobacco industry did not activate against the public interest. I would have thought that it was logical to give some sort of exemption in this Bill to any industry that has gone through the hoop. This not only applies to the tobacco industry, we all agree, but to the net book agreement also.
It was suggested yesterday that ail the Amendments which have been tabled by hon. Members on this side are inspired by the Whips or by somebody else on the Government Front Bench. May I make my own position clear? My support of the Amendment has not been inspired by any member of the Government or by any of the Whips. I am certain that my right hon. Friend will accept this from me because he and I have had many discussions on this matter.
There is a case for an exemption. My hon. Friend the Member for Coventry, South and I are not wedded to the wording of the Amendment. Sixty per cent. may be the wrong figure. Perhaps it should be 65 per cent.
§ Mr. Peter Emery (Reading)
Will my hon. Friend give me an explanation on 287 the matter which troubles me most on the Amendment? What would be the position if there were an alteration in tax, Excise duty or customs duty? If it suddenly fell below 60 per cent., r.p.m. would disappear. Therefore, r.p.m. is set purely on the way that the Budget happens to go. Petrol, for instance, could be freed from duty, and then duty could be reimposed on it. There would be no stability.
§ Mr. Clark
I hope that my hon. Friend does not fear that there will be a Government formed by the Labour Party. If there were, perhaps there would be an increase in customs duty. There have been reductions in the past twelve years. I said—I am sorry that my hon. Friend did not hear this—that I am not wedded to 60 per cent. Perhaps it should be 65 per cent. If it fell below 50 per cent., I would agree that r.p.m. could be abolished. In that sense, this would be to the consumer's advantage. The fact that a tax may be increased or decreased does not invalidate the argument that the tobacco industry and the spirit industry are tax gatherers for the Revenue, and they are unpaid.
§ Mr. A. E. P. Duffy (Colne Valley)
If Amendment No. 14 were accepted, it would make nonsense of the Bill. It is designed to exempt many items. Unlike the hon. Member for Nottingham, South (Mr. W. Clark), I think that the number of exemptions should be kept to an absolute minimum. Exemptions should be granted only in respect of commodities such as books and drugs where Gresham's Law threatens to operate and adversely effect the quality and safety of life in society. I commend this principle to the Committee.
I do not think that the argument advanced by the hon. Member for Nottingham. South can be regarded as sound. Hence, I join my hon. Friend the Member for Greenock (Dr. Dickson Mabon) in recommending Amendment No. 17. I certainly could not support a sweeping Amendment like No. 14. Those hon. Members who have put their names to it take too far pessimistic a view. I do not think that supermarkets are casting greedy eyes at most of the items the Amendment mentions, certainly not at tobacco and cigarettes. There is no evidence of this.
§ Mr. W. A. Wilkins (Bristol, South)
Is it not rather strange that the day following the announcement of the Bill a supermarket situated within one hundred yards of the headquarters of the Imperial Tobacco Company reduced the price of cigarettes by 4d.?
§ Mr. Duffy
The margins on cigarettes and tobaccos and on other items such as sweets and confectionery, are not high enough to justify supermarkets risking the pilferage which is almost certain to follow.
The item in the Amendment I want to take up is—the sale of goods normally carried on by pharmacists, including cosmetics.I recognise the special position in society of chemists. From the consumer's point of view, the most valuable man in the high street is the chemist. What he does cannot be measured in terms of money. Who can put a price on the chemist's services? He has to make provision for emergency throughout the year. He has to carry—if I can use the phrase—excess social capacity.
However, I still do not see how the exemption asked for in paragraph (a) can be justified. I do not see that the chemist can be set apart from other retailers and treated separately. What the hon. and learned Member for Hove (Mr. Marlowe) said last evening—this is said by so many of our correspondents in the trade—was that the National Health Service pays chemists so little for dispensing medicines that they cannot maintain this service or make ends meet without the fair profit they receive from selling branded goods.
Many hon. Members will have received from the Proprietary Articles Trade Association an article which says this:The chemist is a retailer of many kinds of goods, the largest proportion being price-maintained articles. On these goods the chemist (whose overhead expenses are high) receives a fair profit margin. This enables him to carry on his dispensing and professional activities free from acute and persistent financial anxiety.If the Association and the hon. and learned Member for Hove are right in taking this view, then there is a case, not against the Bill and its purpose, but against the National Health Service.
289 The hon. and learned Member for Hove went further and said, in effect, that chemists were treated so badly by the National Health Service that they can go on dispensing only at the expense of all types of people—for instance, secretaries and their cosmetics. The logic of this argument is that chemists will be entitled also to go on retailing cameras and mark up 42½ per cent. and will be entitled to retail rolled film—120, for example—at a mark-up of 40 per cent. I cannot accept such an argument.
The hon. and learned Member for Hove said that, as the small shopkeeper is an institution in our society, we should hesitate long before driving him out of business. Much has been said on behalf of the small shopkeeper, both on Second Reading and so far in Committee. It is only right that we should consider his position further. We should tell him frankly that, as I had the brief opportunity of saying on Second Reading, the Bill obliges him to think out new ways of increasing, not justifying, his usefulness in the modern economy. Small shopkeepers can do much for themselves, as the hon. Member for Cleveland (Mr. Proudfoot) told the House in the debate on the Abolition of Resale Price Maintenance Bill, introduced by my hon. Friend the Member for Wednesbury (Mr. Stonehouse).
There are many ways in which the little man could be encouraged by the shopping public, the local authority and the Government to extend that part of his service which is unique, because it is provided at odd places and at odd hours. This would not merely involve his liberation from some of the strange rules in regard to opening and closing. It would also help him to fit into the system of the big blocks of flats which are being erected all over the place. It would help him to fit in with the railway stations, given the modernisation of many which is now being undertaken. His presence in large factories could save time, and time to many consumers is just as precious as money. Some hon. Members have had first-hand evidence of how the United States keep their small shops, which fill in gaps between the weekly visits to the supermarket. There will always he consumers who will prefer to patronise the local shop, because of the personal attention, the quality, the 290 delivery and the local gossip. The atmosphere, the service and the convenience are much appreciated.
Does anyone seriously contend that the same prices are to be paid for similar goods in different shops, irrespective of atmosphere, service and convenience? When the hon. Member for Greenwich (Mr. Marsh) put a question on this last night he was told, in effect, that the prices must be the same irrespective of the location and distribution costs of the retailer.
I do not think that small shopkeepers should assume too facilely that r.p.m. will be felt entirely in their ranks. Many large-scale firms have also been effectively shielded from competition by the protective umbrella of resale price maintenance.
Thus, enterprising small shopkeepers will experience little difficulty in competing even with their large rivals. Because under more competitive conditions their assets of flexibility, convenience and personal service can be deployed more effectively.
§ 5.30 p.m.
§ Sir Hugh Linstead (Putney)
There are two Amendments to which I have put my name which fall within the group that we are discussing, and I join with those who nave already spoken in wishing that it would have been possible for us to have isolated the discussion on drugs and medicines from other items in the group. I must, however, accept the decision that has been taken by the Chair. The two that I wish specifically to discuss are Amendments Nos. 27 and 17, both of which deal with drugs and medicines only.
It is probably unnecessary for me to say to the Committee that I am secretary of the Pharmaceutical Society, but I think it is in interest which once again I should declare.
On Amendment No. 27, I want to make only a brief point. It is an Amendment which seeks to enable a manufacturer to select his distributors in all and any circumstances. As the Clause is drafted, it prevents a manufacturer refusing supplies where there has been price-cutting. That is the reason why on Second Reading my right hon. Friend interrupted me and said that what is now in Amendment No. 27 is already permitted by the Bill.
291 There is a distinction here which it is important to underline. It is true that supplies cannot be refused under the Bill if the sole ground is that a man is price-cutting. But consider the situation the manufacturer finds himself in when dealing with a price-cutter. He has to satisfy the Court that he is withholding supplies, not on the grounds of price-cutting, but on some other ground. He has to go through all the processes of law without any certainty that in the eyes of the Court he will be able to separate the motives which led him to withhold supplies. Therefore, in the particular case of drugs and medicine, I feel that there should be afforded the manufacturer an absolute right to with-hold supplies in any circumstances for the very specific reason that drugs and medicines, the handling of them and the storage of them and the care with which they are handed out to the public are extremely important elements from the manufacturers' point of view. He may have an extremely good reason for not desiring drugs manufactured by him being distributed by someone who engages in all types of commercial price-cutting. That is the point that I want to make clear to my right hon. Friend. I can only explain it to him and express the hope that he will see that there is differentiation here.
§ Sir H. Linstead
May I come to the second Amendment, No. 17, which has much more depth to it and deal at once with the point which the hon. Member has just raised. That was a point raised last night when we began this debate by the hon. Member for Flint, East (Mrs. White) who asked why medicines and drugs were defined as being substances recommended as a medicine. It is to meet a difficulty which has occurred elsewhere in our medicine legislation—the difficulty of drawing a line between what is a medicine and what is not. There are many substances which are used for medical purposes and also for non-medicinal purposes. In other legislation the distinction is made according to 292 whether a substance is recommended on the label as being a medicine. In such a case under that particular legal provision, it is regarded as a medicine. If it is labelled for use for some other purpose it is regarded as not being a medicine.
I think that the precedent of earlier legislation can quite wisely be followed here. I want to give the two main reasons why I feel that this Amendment has very substantial merits. I have been greatly struck by the interest which has been shown by friends of mine on both sides of the Committee in relation to the representations which they have received from pharmacists about the effect of the abolition of r.p.m. not merely on themselves as individuals economically, but on the quality of the service they will be able to render to the public. I have sensed a general concern in the Committee on both those grounds. I have on two occasions explained in this Chamber the basis of the fears that pharmacists have on the effect on their economic circumstances if r.p.m. disappears. They have, as the Committee knows, broadly three sources of income: the medicines that they supply under the National Health Service; the medicines they sell over the counter; and the non-medicinal goods which they have to sell in order to increase their turnover. The National Health Service remuneration will continue and the abolition of resale price maintenance does not affect this. With regard to the other two sources of their income, they will undoubtedly be seriously affected.
That effect will be shown in the quality of the service which they can afford to give to the public, not merely the National Health Service element in that service, but the broad pharmaceutical service they give. It will affect the quality of the staff which they can afford to employ, and it will affect the amount and variety of the stock that they will be able to carry and the hours during which it will be possible for them to maintain their public service. In fact, any reduction of prices, if it is achieved by the abolition of resale price maintenance, will be an extra tax out of their own pockets, crippling them in the service which they can give.
§ Mr. Eric Lubbock (Orpington)
If one accepts all that the hon. Member 293 has said so far, the chemist would be able to pass through either gateway A or gateway C. I would be grateful if he would explain why it is necessary to have a separate Amendment excluding them from the Bill if it is so certain that they would be covered by these two provisions.
§ Sir H. Linstead
I can return the question to the hon. Member by asking if he can give such an assurance to me at the moment. None of us has the remotest idea how the Restrictive Practices Court will operate. If we felt certain that it was going to operate in that way, a very large part of the argument for this Amendment would disappear. We do not know. We are gazing into the crystal ball and cannot find the answer.
I have nearly concluded what I want to say about the effect on the chemist. I would remind the Committee that according to the 1961 Census of Distribution, 22.9 per cent of chemists' shops had a turnover of less than £10,000 a year, and 46.8 per cent. had a turnover of between £10,000 and £20,000 a year. That is not a picture of a group of people who are getting fat out of the profits on their businesses.
I believe that the views of many hon. Members, echoed in this debate in what was said earlier, are right, namely, that if the remuneration under the National Health Service were more adquate, much of the argument behind what I am now saying would disappear. It is generally accepted—indeed there is on the Order Paper an Amendment to that effect—that it is because the remuneration takes too much account of turnover earned through other parts of their business.
If we could get from the Government an undertaking that a very serious upgrading of National Health Service remuneration was possible, I think many of these difficulties would disappear. But, in the nature of things, no Minister is able today to give an undertaking of that kind, or, at any rate, has not done so up till now.
I have spoken about the effect on the pharmacist. I want now to say a word about the effect on the public, which, after all, concerns the Committee even more seriously. I have indicated that 294 the staff, the stocks and, indeed, possibly the numbers of pharmacies are likely to be reduced. I want to echo what was said earlier about the undesirability of competition in selling drugs. I do not believe that the public should be encouraged by every conceivable commercial wile to purchase additional drugs to supplement what they obtain under the National Health Service, drugs attractively advertised at cut prices, so that they may try one against the other. I think it is important to remember that part of the duty of the pharmacist is often to say "No" and not "Yes". In other words, it is his job to discourage people from taking drugs when he does not believe, that in their particular circumstance it is wise for them to do so.
The hon. Member for Colne Valley (Mr. Duffy) referred to Gresham's Law, and I am sure that Gresham's Law will apply to drugs as it will apply to other fields. In other words, competition in price will only result in competition in quality, with poor drugs and cheap advertised medicines driving out the good medicines.
§ 5.45 p.m.
§ Mr. Charles Loughlin (Gloucestershire, West)
I am wholeheartedly in support of the hon. Member in both the Amendments to which he has referred, but would he explain this to me? I do not think his case is substantial on this point because I am wondering where these drugs are going to be sold. So far as I can see, there is no danger that huge supermarkets will be selling drugs at cut prices. Drugs are sold only at pharmacies.
§ Mr. Loughlin
The hon. Gentleman says "No". Perhaps he will tell me where they can be sold other than at the pharmacy.
§ Sir H. Linstead
I will answer the hon. Gentleman directly by saying that there is no legislation in this country that limits the sale of medicines, broadly speaking, to pharmacists. Medicines other than poisons and narcotic drugs can be sold through any trader. That is one of the changes which are badly needed in the law of this country.
I want to summarise the three remedies that have been put forward, other than 295 the Amendment which I am now discussing. First, it is said that proper remuneration under the National Health Service is the answer. I know that my right hon. Friend the Minister of Health is sympathetic, but, so far, that has not extended beyond expressions of sympathy. Then it is said that there should be new legislation bringing more pharmaceutical business into the pharmacies. I believe that some legislation of that kind is now under consideration in the Ministry of Health, but, again, that is something for the future.
Finally, there is the possibility, as the hon. Member for Orpington (Mr. Lubbock) said, of exclusion under Clause 5. That is a possibility, but again it is uncertain. The problem that pharmacists are faced with is that they find that the three possible remedies—remuneration under the National Health Service, legislation for bringing more pharmaceutical business to them, and the possibility of exclusion under Clause 5—are all vague and uncertain. That is the situation with which some of us are faced in this Amendment.
I hope that my right hon. Friend the Secretary of State for Industry, Trade and Regional Development will be able to give us some indication of how he visualises the operation of Clause 5 and the gateways applying in the case of drugs or medicines. If we are able to get a very clear-cut assurance from him, it may have some effect upon the attitude of mind of myself and some of my colleagues. All I can say at the moment is that there is so much vagueness that it will require a great deal of assurance from my right hon. Friend in relation to Clause 5 before I would feel that Clause 5 provides the gateway for which this Amendment asks and which I believe hon. Members on both sides of the Committee desire to see.
§ Mrs. Harriet Slater (Stoke-on-Trent, North)
If I were to answer the hon. Member for Putney (Sir H. Linstead), I would say that the case which he has put forward is in favour not of the exclusion of drugs but of the exclusion of all articles sold in chemists' shops. When brought down to rock bottom, the hon. Member's case has been submitted not from the pharmaceutical point of view but from the commercial point of 296 view. I was horrified to think that cosmetics were to be excluded, because if ever there was a racket there is a racket in cosmetics—
§ Mrs. Slater
I refer to Amendment No. 14, and my hon. Friend mentioned cosmetics.
In the last two Budgets there have been alterations in the Purchase Tax on cosmetics. The week before the alteration has been announced the wholesale price of the goods has gone up, so that the consumer has never benefited from a reduction. The manufacturers go in for wide-scale advertising of all kinds, in magazines, on the I.T.V., on the doorstep and in every way possible in the hope of achieving very large business.
The hon. Member for Nottingham, South (Mr. W. Clark) spoke about cigarettes. I do not want to follow him, except to say that a committee of inquiry pointed out that this business constitutes a monopoly, and that facilities for a take-over should not be given to a certain firm. That shows, as we have said time and again, that the Government have tackled the problem in the wrong way. If they had tackled the monopolies problem first, most of the other things would have fallen into place.
My hon. Friend the Member for Flint, East (Mrs. White) has expressed reservations on the meaning of the words…or any substance recommended as medicine…in Amendment 17. I share her reservations. The wording could cover all sorts of things that are not really drugs. There is the old idea of people saying that they were recommended to take a Guinnesss a day, that it put them right, and they did not need the doctor. My reservations extend to alcohol as well as cigarettes and some other things.
Drugs should be completely outside the Bill. In many cases life itself depends on their use and, if not life itself, the improvement of life, in that a sick person can be made better by their use. This is a question that should concern, perhaps not so much the Secretary of State as his right hon. Friend 297 the Minister of Health, and several aspects should have received much more consideration by now.
There is the price of drugs—two drugs can be sold under different names and each be offered at a different price. The importing of drugs and their purchase should also have been considered by the Government but, more than anything else, attention should be given to the standard of practice in the sale of drugs. As with cosmetics, there is far too much advertising done to try to persuade people to buy certain drugs to improve their condition. One has only to think of the simple aspirin. I do not know how many varieties of that there are, but I am sure that my hon. Friend the Member for Stoke-on-Trent, Central (Sir B. Stross) will tell us that, generally speaking, a plain aspirin is much better than the tablets that have had other bits added to them, are well advertised and marketed under a name, and attract a very much higher price—
§ Sir Barnett Stross (Stoke-on-Trent, Central)
As my hon. Friend has called me in aid, will she accept my opinion that if aspirin had just been invented today and had come before the Dunlop Committee—or, if it had been invented in America, it had come before the F.D.A.—it is fraught with so many possibilities of side-effects that it would never have passed?
§ Mrs. Slater
I have taken up the question of side-effects of aspirin with the Minister of Health, because a very respectable friend of mine in the medical world says that they are very serious and could cause great trouble to a person suffering from a particular disease.
Advertising, which is now a very large-scale business, has so extended its activities to the drug world that the ordinary person does not know what is good for him or what is not. As my hon. Friend the Member for Greenock (Dr. Dickson Mabon) said, one of the dangers is self-medication. This is a going concern, and it is helped by advertising and by the Government's 2s. prescription charge, which persuades some people that they get the thing cheaper by getting the ordinary commodity in the shop. The people who dispense our drugs, the pharmacists, ought not to be 298 subjected to this Bill. If they are doing the job for which they are trained—and this is the important thing—they should be receiving adequate remuneration from the Government for doing that job.
I am not prepared to vote for Amendment No. 14 or Amendment No. 7. The basis of the argument for Amendment No. 7 is completely wrong. To speak of the tax that comes from these commodities is an absolutely false argument. It has been pointed out that if the tax were altered the commodity would come out of the provisions of the Bill, but the argument should not be applied at all. If we want tax from these commodities, let us do it by straightforward taxation rather than by indirect means.
§ Mr. Philip N. Hocking (Coventry, South)
Would the hon. Lady not agree that where a commodity is taxed to the extent of three-fifths, the remaining two-fifths is a very small margin within which to manœuvre from a price-cutting point of view? Surely that is a fair argument for the Amendment.
§ 6.0 p.m.
§ Mrs. Slater
Where does resale price maintenance then come into price cutting? The hon. Member for Nottingham, South tried to put the point of view that the standard of these commodities would be lowered unless we followed the provisions in Clause 7. I would not be worried if the standard of tobacco, cigarettes and alcohol went down. Perhaps it would save us from many other problems which affect us today.
Far too many items are included in Amendment No. 14, which deals with such things as pharmacists' goods, tobacco, newspapers, sweets and confectionary, wines and spirits. Their inclusion defeats the whole purpose of the Bill. It would mean that there would be a large section of the provisions of the Bill to which r.p.m. would not apply. I would be prepared to vote, with reservations, on Amendment No. 17, which provides that the Clause should not apply to any drug or substance recommended as medicine or any medical or surgical appliance.
On Amendment No. 27, dealing with the withholding of supplies of medical substances, there is the point that if we 299 supported it I am not sure whether or not it would prevent the small grocer, about whom so many hon. Members have been making pleas, from selling simple things like iodine, aspirin and liver pills. I, therefore, hope that the Minister will look again at that Amendment and consider whether, in the interests of better quality and more control over price, some requirement should be laid down.
§ Mr. Norman Cole (Bedfordshire, South)
I want to address my remarks to Amendments No. 14 and No. 17 and to deal first with the proviso in Amendment No. 14 that nothing in the Bill shall apply to(a) pharmacy and the sale of goods normally carried on by pharmacists, including cosmetics,This is something similar though not quite the same as Amendment No. 17, which provides thatthis section shall not apply to any drug, or any substance recommended as medicine, or any medical or surgical appliance.My hon. Friend the Member for Putney (Sir H. Linstead) and the hon. Lady the Member for Stoke-on-Trent, North (Mrs. Slater) have made it clear that this all-important matter of drugs, which may be said to be the outward working of the doctor's skill when he prescribes, ought to be outside the confines of the Bill. I think that most of us would agree.
I was very much taken up with the point made by the hon. Member for Greenock (Dr. Dickson Mabon) when he spoke of the danger of variability of price because people might go for the dearer drug because they would be suspicious of the cheaper one. There is the other side to the coin in that people might economise and buy the cheaper article, and it might well be cheaper in the sense of being inferior. I use an innocuous article as an aid to digestion. The article is sold in two forms, one pure and the other combined with some other ingredient. Both are excellent but differ in price. When we are dealing with drugs we ought to consider means of eliminating them from the processes of the Court.
In another respect I differ from the hon. Lady the Member for Stoke-on-Trent, North. I thought that my hon. 300 Friend the Member for Putney made it quite clear that in order to assist the State or to help people to pay the prescription charges, the rest of the things which a pharmacist or chemist sells should be allowed to carry a reasonable profit, and certainly far more than the profit on prescriptions so as to allow him to continue to deal with prescriptions. Some shock has been expressed that some of these articles may carry 42 per cent. gross profit, but we should not forget the "gross". We should remember the stock of one hundred and one specialities which has to be carried in these shops. I know of another trade where the gross profit is anything between 30 per cent. and 40 per cent. and where there is no resale price maintenance and the price depends upon what people will stand.
A good case can be made for these Amendments on the ground of improving the nature of the drug sold and on the ground of the support given by the sale of non-drug articles to the sale of prescriptions. These are good grounds for the elimination from the Bill of those engaged in pharmacy and the sale of goods normally carried on by pharmacists, including cosmetics.
§ Mr. J. J. Mendelson (Penistone)
Does the hon. Member argue in favour of this omission on the grounds that profit is too high in some lines of trade not subject to r.p.m.?
§ Mr. Cole
The expression "too high" is the hon. Member's, not mine. I was speaking of gross profit. Whether or not that profit is justified in other trades, it is argued that it is justified in the chemist's trade when one bears in mind the many things which he has to sell so that what he does by way of prescriptions can be done at a cut profit.
As for the proposal in the first of the Amendments I mentioned to eliminate those engaged in the trade of(b) tobacco, cigars, cigarettes and the sale of associated goods,".Although the Chancellor of the Exchequer in 1899 and 1900 did a great deal to encourage people to smoke so as to increase the Revenue, nobody in his right mind would wish to encourage more smoking today. Nevertheless, millions of people want to smoke and they want to see the continuation of these retail outlets. It should be borne 301 in mind that the retailer receives only £10 or £11 gross profit from the disposal of £100 worth of stock of cigarettes and tobacco. One would think that this is a reasonable case which would get through one of the gateways provided in Clause 5.
§ Mr. Proudfoot
I trust that my hon. Friend realises that stocks of cigarettes and tobacco are held by the retailers on sale or return.
§ Mr. Cole
I was not talking about conditions of sale and return. I realise that, but I was shocked to hear that a man has to stock £100 worth of goods, with all the risk that that involves, and has to sell that stock to produce £10 gross profit for himself. We should be well advised throughout our discussions to use the expression "gross profit". Some people may think that "gross" should be used in another connotation, but I use it in the sense that it is not net profit but profit before the deduction of overheads and tax.
The provision in the first of the Amendments I mentioned, dealing with(c) newspapers, magazines, periodicals, stationery, and the sale of goods normally retailed by newsagents,includes part of an industry which has already been, as it were, in jeopardy before the Restrictive Practices Court. It seems unfortunate that we should have industries exposed to double jeopardy, as no doubt they will be if the Bill goes through in its present form. There is a good case for considering these small items.
As for(d) sweets and confectioneryperhaps we are much more concerned here with the maintenance of quality and condition than with price. It is possible for some of these goods to have been in a shop for a couple of years. In the case of many of the items sold in small sweetshops there is a condition, which is clarified in a later Amendment, in that many of these items are under 6d. in price, and I take it that we are not going to play about by trying to insist that a man should be able to buy one of these items at perhaps ½d. or 1d. cheaper in a shop round the corner.
Now, the last item, wines and spirits, on which the hon. Lady the Member for Stoke-on-Trent, North commented. Like 302 her, I should be the last to want to encourage or assist the consumption of wines or spirits. Indeed, I think that the average publican, too, is very much against the intemperate consumption of wiles and spirits. However, it should not be forgotten that we have seen a great development in this trade by the provision of better places and surroundings, all of which can very often assist towards proper and sober conduct in the pubic houses of today, unlike what happened in some of the "hell pits" of days gone by. Whether this is done by the brewer, by the tenant of a public house or by a brewery employee, there must be some sort of margin somewhere to make possible the provision of improved conditions and amenities in modern public houses.
The whole point of the Bill is that, if we do away with resale price maintenance in this industry, we shall, in effect, reduce the price of some of the products. I should be the last to wish to reduce prices and thereby possibly causing an increase in consumption. In this case, I think that some special pleading might well be justified. On the one hand, there is at present maintained a not unreasonable price level for wines and spirits the ordinary prices which most of us know about in the average public house. On the other hand, I think that we should be doing a disservice if we produced a situation in which cut prices were offered in competition between public houses, one on one side of the road and another, perhaps, just across the way. It would do no good to the country's welfare. I do not know, but the Court may well think it right to have this sort of consideration in mind if the occasion arises.
Although it is a little complicated and inconvenient to have so many different kinds of article listed in Amendment No. 14, with its five items (a) to (e), I am glad to have had the opportunity to express my views about it. The main point to which I direct my mind is that covered by item (a) of Amendment 14 and by Amendment No. 17 in the name of my hon. Friend the Member for Putney which would provide for the exclusion from the Bill of drugs and medicines and all things that come under that heading because of their great value in saving human life and their good purpose for the betterment of life.
§ Mrs. Barbara Castle (Blackburn)
I am sure that the majority of the Committee feels that both Amendment No. 7, which has been moved by the hon. Member for Coventry, South (Mr. Hocking) and Amendment No. 14 in the name of the hon. and learned Member for Hove (Mr. Marlowe) with its five items (a) to (e) are so widely drawn as to be self-defeating. The principle behind Amendment No. 7 is quite unacceptable as a basis for deciding whether or not resale price maintenance should be maintained or abolished. The list of items included in Amendment No. 14 is so comprehensive as to amount to a direct negative to the whole purpose of the Bill. There was really no reason for one hon. Gentleman opposite to assure us that this Amendment had not been put down at the instigation of the Government Front Bench. I cannot see the right hon. Gentleman hurrying to put down this Amendment after one of the secret conspiratorial meetings which he has been having on the Bill.
In my view, there is a case for exempting some of the items listed in Amendment No. 14, but I think that it is a case which needs to be examined very thoroughly and with far more information than is available to us in the Committee today. One of the reasons why I have deplored both the reason why the Bill has been introduced and the manner of its introduction is that we have had to discuss it against the back-ground of quite inadequate information about the social and economic consequences of the Bill. One can only hope that some of the deficiencies will be met by the Restrictive Practices Court when the items come before it one by one.
We are saddled with the Bill. I do not like its machinery. I do not like the reason why it was introduced. I do not like the right hon. Gentleman's economic philosophy. However, having the Bill before us, it is our job not to direct negatives at it but to seek to improve the machinery, modify its evil consequences and be as constructive as possible.
This is why I wish to concentrate on Amendment No. 17, in the name of the hon. Member for Putney (Sir H. Linstead), to add a new subsection (5) specifically to exclude drugs, medicines 304 and surgical appliances from the effect of Clause 1. I can supplement what was said by the hon. Member for Putney from the pharmacist's point of view by some arguments from the consumer's point of view in favour of accepting the Amendment and excepting the pharmacist and his goods. Clearly, the existence of an adequate number of chemists shops, reasonably accessible, is a vital public interest. We ought to make an exception in this case. Chemists provide a service which is, in effect, ancillary to the whole of the nation's hospital and health services. It is no good going to a doctor and being told what is wrong if, on being given a prescription to put the trouble right, one then has the devil's own job to find someone who will translate the prescription into the medicine which one needs.
There is already evidence that the number of dispensing points in the country is on the decline. This was put to me by pharmacists in my constituency when they came to see me about the Bill. They told me that the number of dispensing points was, over the past few years, being reduced at the rate of 13 a month. I thought that I had better check this, so on 16th March I put a Question to the Minister of Health asking him if he would give the number of dispensing points in England and Wales in the years 1961, 1962 and 1963. His Answer bore out the argument which the chemists had put to me. I was told that the number of chemists' shops, drug stores and appliance suppliers in contract under the National Health Service in England and Wales fell from 15,681 in 1961 to 15,208 in 1963. That is a reduction of 480 in three years, and, if my arithmetic is correct, it works out at just about 13 a month. This is happening at a time when the income of the pharmacist as a dispenser under the National Health Service is being supplemented by the sale of goods subject to price maintenance. If resale price maintenance on some of the supplementary goods which he sells is abolished, the chemist's income will be even more in jeopardy.
It is not enough to say that this should be met by an increase in the dispensing allowance which the pharmacist receives under the National Health Service. It is a little more complicated than that. I do not claim to know the rights and wrongs 305 of the pharmacist's argument on whether or not he is being paid enough for dispensing under the National Health Service—I should want to go into it a little more thoroughly—but I am assured that the arithmetic works out in this way.
The margin of profit on National Health Service prescriptions is not enough unless the chemist does over 1,000 prescriptions a month. I gather that the average throughout the country is about 1,200 a month. This means that there must be a large number of chemists, especially in the more scattered areas, who do less than the national average. Therefore, they are doing less than the minimum of 1,000 prescriptions a month. It is they who will be most hard hit and yet the closure of their shops would cause the maximum hardship.
The pharmacist in the central area may be able to get his requisite minimum number of prescriptions per month to keep his head above water, but the outlying shop, perhaps in an area of scattered dwellings, does probably less than the average. I was surprised to be told by chemists in my constituency that of 42 of them in Blackburn, 30 were doing fewer than 1,000 National Health Service prescriptions a month. They are the ones who will be in direct danger of having to close if r.p.m. is abolished over the rest of the range of their goods. This is a matter of public interest. It is one in which I must take great concern as the representative of my constituents. That is why, from a consumer's viewpoint, we should take Amendment No. 17 seriously.
Another point that was put to me by the pharmacists was that if r.p.m. is abolished on the supplementary goods, their non-ethical goods as they call them—a description which is appropriate probably to cosmetics—and if a price-cutting war in these goods begins, pharmacists will be at a disadvantage because they are supposed to observe rather special standards of conduct.
In that connection, I was shown a circular which has been sent by the Pharmaceutical Society to my local chemists, entitled "Important notice about price-cutting". It contains the following paragraph:At present some cosmetics sold in pharmacies are not subject to resale price maintenance 306 and prices to the public are decided by the pharmacist or firm concerned. Following Government action it may be that the list of such items will be increased. The right of each retailer in these circumstances to fix his own prices is not disputed, but the Council of the Society wish to make it clear that any blatant publicity relating to price levels will be regarded as conduct liable to bring the profession into disrepute. Whatever the outcome of the proposed legislation, pharmacies are urged to act with restraint in meeting competition from sources outside pharmacy.They are, therefore, expected to observe levels of conduct which will make it difficult for them to compete in the sort of society into which the Secretary of State for Industry and Trade wants us to move—the price-cutting, cut-throat society in which, apparently, he so passionately believes.
As I understand, what the pharmacists in my constituency are concerned with is not so much whether resale price maintenance should be maintained on cosmetics. Their concern is with the items listed in Amendment No. 17. If they are given price maintenance, they will be satisfied. They have even said that they would not mind having their retail margins controlled. They have this in any event over a large area. Their alarm is lest, in the field of drugs, medicines and medical and surgical appliances supplementary to those prescribed under the National Health Service, they should be subjected to a price-cutting war. This argument of their is a fair one.
They also point out—and here again I am in hearty agreement with them—that instead of our paying so much attention to reducing the retailer's on-cost in pharmacy, the House of Commons would be far better employed in examining the on-costs of the drug manufacturers, which, it is argued, are completely unwarranted and excessive and should be examined by the House of Commons. In this I heartily concur with the pharmacists. In the meantime we must support Amendment No. 17.
§ Mr. G. R. Howard (St. Ives)
I will confine my remarks to my Amendment to the proposed Amendment No. 14, in line 10, at end add:(f) photographic equipment and materials used in connection with photography.I know that certain photographic materials are sold in chemists' shops. 307 They are one of the items of which the hon. Lady the Member for Blackburn (Mrs. Castle) has spoken. These articles have a fixed price which allows the chemist a profit which helps to pay his overheads. I shall concentrate, however, upon the effects on purely photographic dealers and shops which deal with photographic materials.
There is already strong competition, not only between retailers but within a shop. Under the present system, one can go to a shop and see any number of cameras, both imported and home produced, although, alas, there are not so many of the latter. One sees also optical instruments, lenses, field glasses, telescopes and the like. There is already great competition as to quality and price.
In discussing this matter last night, an hon. Member said something to me which is a good illustration. He said that he had been to a shop and was asked how much he knew about photography. He replied "Very little" and was given a foolproof camera, and a cheap one at that. This is one of the best arguments which I can give for resale price maintenance, because the retailer gets a fair profit on that article. If he considers it the right one for somebody to buy, he recommends him to buy it. If r.p.m. goes, he will not get the profit on such articles and he will advise people to buy things on which he gets the greatest profit.
§ Mr. Peter Emery
Is my hon. Friend trying to suggest that the profit margins on all these goods are the same? If that is true, I can understand his argument. If it is not true, I do not understand it.
§ Mr. Howard
No. The retailer gets a reasonable profit on a cheap article. The profit margins are not all the same. I am told that in the trade the average is 33⅓ per cent. and that when Purchase Tax is deducted, it is between 27 and 28 per cent. That, however, is over the whole field.
§ Mr. Proudfoot
I bought a foolproof camera a week ago and I checked on the price, both in London and in my home town. The dealer in my home town gave me a 10 per cent. discount.
§ Mr. Howard
Perhaps it was a line which was not selling very well. Retailers can do that. There are dealers and dealers. I maintain that there is strong competition and a wide choice.
There is a moderately good secondhand value for cameras and equipment if people wish to buy them, but most important of all is the skilled advice and service. The photographic business is getting more complex every day. There is the increase in sales of home "do-it-yourself" colour processing materials and equipment. There is the increase in the sales of every sort of camera—from that about which my hon. Friend is talking to the most expensive cameras which can cost up to £500.
One thing which the customer expects is that a qualified man should be available to explain to him the various points about the camera which he proposes to buy—whether it has a coated lens, what the focal length is, whether the focal depth scale is graduated to this, that or the other thing. This is a highly skilled business and this man is expected to give advice to the customers. He helps them in purchasing their materials. He advises them on whether they photograph well or badly. This service can be rendered only if the photographic shop is able, through resale price maintenance, to pay skilled people who can give it.
If resale price maintenance goes, what will be the answer? Obviously, there will be fewer shops. The smaller man will not be able to compete. The big multiples will go for the extensively advertised goods. As many hon. Members have said, this does not mean that they will be of the best quality. I heard the other day about a Japanese camera which had been advertised as an absolute bargain. Someone bought it for £6 and it was not worth 5s. The trade got after this case and stopped it happening again, but this sort of thing can happen.
If resale price maintenance goes, there will be less variety because shopkeepers will not be able to afford to keep the slow moving lines—the things which do not sell well—and the quality of his goods must suffer. I do not see how that can be avoided. Shopkeepers will simply go for the things which can be 309 quickly cleared. There will be no after-sales service, no guarantees and no help given to customers in buying their materials. [HON. MEMBERS: "Why not?"] Simply because shopkeepers, so they tell me, will not be able to pay high enough wages to attract the skilled men to this sort of job. Therefore, they will not be able to get the men who can give technical advice on the equipment which people wish to buy.
§ Mr. Nicholas Ridley (Cirencester and Tewkesbury)
By how much does my hon. Friend expect the price of a camera to come down?
§ Mr. Howard
If the shopkeeper does not get his recognised 27 per cent. to 30 per cent., if there is a price-cutting war and the price of cameras comes down considerably, those in the photographic trade say that they will not be able to pay the salaries of the highly skilled men needed to render this service.
Therefore, I hope that the photographic trade will be excluded. It is a very important trade, and it is growing rapidly, but it is a very technical and complicated one. I hope that my hon. Friend will see his way clear to excluding it.
§ Mr. Anthony Crosland (Grimsby)
I do not think it will be considered in bad taste, in discussing a Bill to abolish resale price maintenance, if I say that I am strongly in favour of the principle of abolition. One would never guess from most of the speeches made on both sides of the Committee in the last two days that probably a very considerable number of hon. Members are in favour of the principle of abolishing resale price maintenance. A rather false impression of the feeling in the Committee has been created, because of the Amendments which we have been discussing.
I should like to comment on the speech of the hon. Member for St. Ives (Mr. G. R. Howard). Would he say that in the United States, where resale price maintenance does not exist, the conditions surrounding the sale of photographic goods are so much worse than they are in this country?
§ Mr. G. R. Howard
I am delighted to answer the hon. Member. Having been to a good many places in the United 310 States, I can say from my experience that the service is nil. On many occasions I have asked questions just out of interest, and the assistant could not begin to give me one technical answer to the things that I wanted to know. He just handed the article over the counter, and that was all that he could do.
§ Mr. Crosland
In view of that, I shall rather rapidly shift my ground away from photographic goods towards motor vehicles. In the United States, where resale price maintenance does not exist, the standard of garage and repair facilities for motor vehicles is much higher than it is in this country.
§ Mr. Peter Emery
The hon. Member says that he is shifting his ground. May I reinforce his ground? I do not believe that the advice on cameras is so bad in Germany, Sweden, Denmark and Switzerland. There is certainly no resale price maintenance in those countries.
§ Mr. Crosland
I applaud that brilliant and pertinent intervention.
I want to make it absolutely clear that I firmly and strongly oppose Amendments Nos. 14 and 27 and support, with considerable reluctance, Amendment No. 17. My reluctance stems from this fact. I listened to the hon. Member for Putney (Sir H. Linstead), both tonight and on previous occasions, describing the great services rendered by the pharmacists and the threat to these services if resale price maintenance is abolished. What he says may be true, but it seems to me that there must be pharmacists and pharmacists.
I can think of a number of services which the chemists could render to the public under the existing system which they do not do. For example, if I go into a shop wishing to buy aspirin, why does not the chemist tell me that aspirin B.P. at one-fifth the price is identical to any sort of branded aspirin that I can buy? Why does not he tell me that the same applies to codeine and to a very large, number of other goods on sale in his shop? With that reservation, I shall march happily into the Lobby in support of Amendment No. 17.
§ Mr. W. R. Rees-Davies (Isle of Thanet)
Before the hon. Member does 311 any such thing, may I put this to him? I know that he is very good at reading these matters. If he looks at Amendment No. 17, he will see that it refers toany substance recommended as medicine".Does the hon. Member really want to defend the vast mark-up on things such as Lucozade and Ribena, not to mention all the appliances which can cover a wide range of things; or would he merely deal with those medicines which would be the subject of a prescription?
§ Mr. Crosland
If the hon. Member had been here during previous stages of the debate, he would have heard most hon. Members on this side say that they had reservations about this phrase and about the precise language of the Amendment, but that they were nevertheless prepared to support it in principle, subject to those reservations. That has been made very clear from this side of the Committee.
I wish to make one or two particular points and one or two general remarks on the other Amendments. It seems to me that Amendment No. 7 is totally indefensible on any grounds. Even the hon. Member for Nottingham, South (Mr. W. Clark), who usually speaks with great skill and ingenuity, was utterly unable to make a serious case for it. I thought that he was totally floored by the intervention of one of his hon. Friends who pointed out, quite rightly, that the changes in the rate of tax on alcohol and tobacco could have the effect of bringing in and putting out of the Bill tobacco goods and liquor from one year to another. There are no grounds in logic for choosing this criterion as to whether resale price maintenance should apply or not. Resale price maintenance may be a good or a bad thing in this trade or that trade, but whether it is good or bad is not to be judged by the rate of tax which has to be paid in respect of a certain commodity.
I agree very much with the view that if Amendment No. 14 were passed it would make nonsense of the entire Bill. But I do not object to it merely on that ground, which is obvious enough. My objection to it is much more fundamental. It would be a great mistake at this stage of the proceedings to bring a range of particular exemptions into the Bill.
312 It may be that, in the case of medicine, there is a strong social argument as to why it might be desirable but, leaving aside social and non-economic arguments, it would be wrong for us to say that certain goods should be inside the Bill and the rest outside. We would start a great deal of undesirable logrolling, to which my hon. Friend the Member for Ebbw Vale (Mr. M. Foot) referred yesterday. The whole principle of doing this by Amendment is wrong and should be strongly resisted.
If there is a case for not having resale price maintenance it does not apply to most of the goods listed in Amendment No. 14 in the name of the hon. and learned Member for Hove (Mr. Marlowe). I fear that the list (a) to (e) in that Amendment is based on the fundamental misapprehension which runs through most of the speeches made by the rebels opposite. This is their fear that the abolition of resale price maintenance will be felt first and foremost by the small shopkeeper. That will not be so. It is a total misapprehension.
The typical small shopkeeper is the man in the village shop, the man in the shop round the corner, the man in the suburban shop. But he is very strongly protected against any invasion or depredation by the effects of the Bill. He is, for instance, protected by his geography, his location, the mere fact that he is just round the corner, or is in the village or in the suburb, with the High Street a long way away. That is his most important and most fundamental protection.
Secondly, he is protected by the fact that a greater number of people, like my hon. Friend the Member for Oldham, West (Mr. Hale), like nothing better than to go into such shops for the service they offer and for the opportunity to discuss the latest racing results, or some such topic. This is another very important social protection for the small shopkeeper. He is also protected by the fact that the majority of goods listed in that Amendment are goods in which the multiples or supermarkets would not, or could not, try to compete. No one can possibly reduce the price of a newspaper without removing the profit. Again, the small shopkeeper is heavily protected in his sale of confectionery. People, particularly children, are apt to buy on 313 impulse. If parents send the children out for sweets, they are told to go just round the corner and not further afield to multiple stores.
§ Mr. Walter Monslow (Barrow-in-Furness)
My hon. Friend is putting a plausible argument, and I agree with what he says about the village shop and the suburban shop, but we are surely talking about the effect which this Bill will have on the legitimate profits of the retailers in the High Street.
§ Mr. Crosland
I entirely agree with my hon. Friend, but I was making the opposite point that the small shopkeepers outside the High Street will not be affected. I will deal with those in the High Street in a moment.
A great deal of alarm has been expressed about the tobacconists. I have a great deal of sympathy with the tobacconists, but none with the Imperial Tobacco Co. nor with Gallahers. Both these near-monopoly concerns are bringing a good deal of pressure to hear on their own retail outlets in propaganda against the Bill. We should be clear whether we are defending the interests of the small tobacconists or the Imperial Tobacco Co. or Gallahers. There is a sharp distinction.
There may be some price cutting in tobacco and cigarettes by the multiples. One does not know yet. I agree that, when the Bill was first announced, some multiples used price-cutting in cigarettes as loss leaders. In Ireland, there have been examples of cigarettes used as loss leaders, but how widespread it would be in this country I do not know. It has been pointed out that low margins are involved in the sale of cigarettes and that this is not such an attractive loss leader line as appears at first sight. That is something to look at, however, when we come to the loss leader Clause.
My main point is that the main force of the new competition brought about as a result of the abolition of resale price maintenance will not be directed at the small village shopkeeper, confectioner or tobacconist, but elsewhere. The first trades to be affected will be furniture, hardware and ironmongery, electrical goods and motor cars. If anyone worries about the effects of abolition on trade, then those are the lines they should be 314 considering and not sweets and cigarettes.
The competition in those trades will not hit the small village or suburban shopkeeper but it will possibly hit a number of independent retailers in the High Street, but no one can say that every independent retailer selling hardware and ironmongery or something else in the High Street is the most efficient retailer in the world. That would be by no means true. But multiples and departmental stores will also be hit.
I hope that the biggest single result of the abolition of resale price maintenance will be the spread of the discount store This is, in fact, the most likely single result, but that will hit not the small shopkeeper but the departmental stores, the multiples and, sometimes, the independent men in the High Street But what they should do if worried about the threat to their livelihood is to follow the example of the grocers in the last five years. The grocers have reacted to resale price maintenance abolition by banding themselves into voluntary associations whereby they are able to compete by obtaining large discounts. This is the answer to other trades which feel themselves threatened.
§ Mr. Proudfoot
Since voluntary chains started in Scarborough, in the last three weeks three chain stores and two "co-ops" have closed.
§ Mr. Crosland
I must confess to disappointment about the "co-ops," but I accept the fate of the others with some equanimity. On the Second Reading debate of the Abolition of Resale Price Maintenance Bill, moved by my hon. Friend the Member for Wednesbury (Mr. Stonehouse), the hon. Member for Putney (Sir H. Linstead) said that the whole mint of abolition was to favour the big man, the co-operative society and the formation of big combines. I hope that the hon. Member for Cleveland (Mr. Proudfoot) will explain clearly to the hon. Member for Putney what has happened, for example, in Scarborough.
Therefore, as I have said, the first threat will not be to the small village or suburban shopkeeper. I want to reinforce, secondly, something that was said on Second Reading. A great number of facts and figures have been put 315 out as propaganda for resale price maintenance and much of that propaganda is of a level of hypocrisy and dishonesty that I have seldom seen. The pamphlet which has already been quoted is simply—well, I do not know what one could say about it that would be reasonable or within order. It is certainly a tissue of—I will call it a tissue at any rate.
One of the tricks in this kind of propaganda is to take different countries where resale price maintenance has been abolished and quote figures showing that, in the years after abolition, there was a decline in the number of small shopkeepers. What these profoundly hypocritical statisticians never dream of doing is giving the figures for the five years before abolition. One discovers, in examining them, the self-evident fact that the number of small shopkeepers was declining before the abolition of resale price maintenance. What is not proved is that the decline accelerated after the abolition of r.p.m.
The fact is that there are profound social changes going on in all countries and these are tending to diminish the number of small shopkeepers. This has nothing whatever to do with r.p.m. or its abolition. One hears horrifying stories about what has happened in the United States and how the number of small shopkeepers there has declined, but that has had nothing to do with the abolition of r.p.m. There has been the great growth of the suburban shopping centre in the United States with a total change in shopping habits. That, in turn, has led to changes in the type of shops people want. The abolition of resale price maintenance hardly came into the picture at all.
I will now pick one or two examples of small shopkeepers. First, there are the grocers. In the last three or four years, where there has been no resale price maintenance in the grocery trade the proportion of trade held by the independent shopkeepers has been stable. It has not declined.
On the other hand, let us take two trades in which resale price maintenance is strongly entrenched—chemists, and radio and electrical goods. In both of these trades, in contrast to the grocers, the share held by the independents has 316 declined appreciably in the last five years. One cannot prove cause and effect, but I suggest that these figures show that what is happening to the small shopkeeper is not mainly dependent on whether his trade is subject to resale price maintenance.
The major reason why the number of small shopkeepers in my part of the country is declining—and it is probably true all over the country—is the shift of population out of the older areas of the old industrial towns into the new industrial estates. When that occurs, the number of shops is reduced in the older areas where not only was every other house often a shop but one could buy tobacco at practically every other shop. Where the shift of population occurs, the number of shops goes down in consequence of it. That has nothing to do with the abolition of resale price maintenance.
I do not want to go into too many general arguments at this stage. I repeat that I am strongly opposed to all the Amendments except that of the hon. Member for Putney, and I hope that as our debates develop we shall get a slightly fairer impression of what the opinion in the Committee is. Anybody listening to our debates in the last two days and listening to this and that plea for this and that trade would get the impression that the bulk of hon. Members, even the bulk of hon. Members of my party, were fundamentally opposed to any abolition of resale price maintenance, whereas there are many of us who are strongly in favour of the principle of abolition.
§ Mr. Proudfoot
I hope that my right hon. Friend will resist all the Amendments. When I consider the Amendment of my hon. and learned Friend the Member for Hove (Mr. Marlowe), think that he is guilty of at least what might be called economic gerrymandering, because he seems to try to draw a line around those commodities about which we have had most letters.
I want to speak from one point of view and to say that the very people whom hon. Members are trying to protect, the small shopkeepers, will in the end regard those hon. Members as their worst enemies if they try to throw a blanket of protection around them and the shopkeepers one day find that it is 317 stripped away because of the advancing techniques of distribution. That would be the cruellest of all things to do.
I know the grocery trade which has been quoted many times as an example of a trade which has been exposed to competition. Seven years ago I had to stop reading the grocery Trade Press. It depressed me so much that I could not read it any longer. It should have been printed with black borders. Some three years later, I took a casual look at it and found how much it had changed. It was vigorous and bright and full of ideas. It even told retailers what profits they should make; it gave them targets to achieve and it tried to blow a breath of efficiency into the business. There are now 27,450 members of voluntary grocery chains and they are doing extremely good business and, I am sure, will continue to do so. At this point of time the supermarkets have been hurt for three reasons. One is that they cannot get enough managers. The second is that they have paid too expensively for sites and the third is that the voluntary chains are competing hard against them. I believe that this will happen in other trades.
I want first to take the example of the chemist. I speak as one who comes from a very long line of hypochrondiacs. I had a grandmother who used to throw her medicines away but whose son tried every pill on the market. The Amendment of my hon. Friend the Member for Putney (Sir H. Linstead) is not the kind of criteria to write into the Bill. Certain commodities are prescribable and others are not. I do not know where that is laid down, but I accept it as good sense. Grocers have sold patent medicines for years. The first widely advertised patent medicine had the slogan, "Worth a guinea a box", and that slogan has now been written into the history of advertising in this country. As a boy I was dosed by my grocer father with Fenning's Fever-cure and California Syrup of Figs. Some of these lines have been sold by grocers for years and years.
Let me take an instance to show why I dislike resale price maintenance so intensely. I once bought what for me was an enormous quantity of tooth brushes. They had a nationally branded name. I had read in the Financial Times that the tooth brush market was saturated and 318 that the manufacturers were trying to get people to buy more than one toothbrush each. Being situated in a holiday resort I bought 10 gross, expecting that everyone would come on holiday forgetting their toothbrush. I bought them at 6d. each. The selling price on the box was 1s. 8d.
I think that that is an immoral profit. It is far too high. However, believing that one should take what the market will bear, I tried to sell them at 1s. 8d. I failed. I advertised them locally at 10d. each and every chemist in my town wrote to the manufacturer, and within days his representative called and asked me to put the price back to Is. 8d. I am pleased to say that I refused to do so and that I showed him the door of the shop and told him to go.
I believe that chemists could have the same sort of success that grocers have had if they form voluntary chains. I take that view for many reasons. The logistics of retail chemists are much simpler than those of grocery in many respects. The commodities are not as big and transport costs within a voluntary group would be less and the size of warehouses could also be less. If they were organised—and if resale price maintenance goes, they will not take long to get organised—chemists would do better business.
I envisage chemists then organising their shops so that the chemist himself could do his professional job—some now do. He could take his dispensing counter to the back of the store and give information and dispense and take out his window back and the traditional type of display of little bottles which now fills his window, have an open store and put a check-out at the door and allow customers to browse for the things which can be bought without prescription—cosmetics and health and beauty aide, and so on. I admit that there might be packaging problems and that some packaging would have to change to deal with the possibility of pilfering.
§ Dr. Dickson Mabon
I have listened carefully to the hon. Member's arguments, but he has not made a distinction between the Amendment of the hon. and learned Member for Hove (Mr. Marlowe) and that of the hon. Member for Putney (Sir H. Linstead). I regretted the fact that we were to take the two 319 together and the distinction is being blurred. I agree with everything that the hon. Gentleman has said about the sale in chemist shops of items which are not on prescription, but he is dodging the issue of those which are on prescription. He ought to address his argument to the question of prescription costs. When he was a hypochondriac and his family were hypochondriacs, they were taking medicines most of which have long since been denounced by the medical profession, apart from simple remedies. Publications of the B.M.A.—that most progressive of organisations—in 1909 and 1910 were pointing out the iniquities of self-medication of this type. The hon. Member ought not to dismiss the Amendment concerned with medicines just because he so much dislikes the more general Amendment.
§ Mr. Proudfoot
I will answer that by asking a question. Has the hon. Member ever prescribed a placebo? This lets the cat out of the bag. Every member of the medical profession must have done precisely that. This is something to placate the patient who is given a beautifully coloured bottle of medicine, which always separates into two different colours and which has to be given a jolly good shake. As I said, I speak as one in a long line of hypochondriacs. My mother swears by the tonics her doctor gives her. I am sure that they have their medical uses. Psychologically, they help people who feel that they need medicine. I am sure that there is an ethical case for the use of a placebo.
§ 7.0 p.m.
§ Dr. Dickson Mabon
I congratulate the hon. Gentleman on surviving thus far. Of course placebos are prescribed, but if we were to say to the person concerned, "Go down to the grocer and get one; do not get it from the chemist", the whole point of prescribing it would be lost. A doctor's major concern is in prescribing real drugs. That is the real argument which the intelligent hon. Gentleman appears to have missed.
§ Mr. Proudfoot
Does the hon. Gentleman consider wines and spirits to be placebos or not? I have heard of doctors prescribing Stergene, a soapless detergent, as a cure for baby eczema. It 320 is available in all grocers' shops. I think that one has to figure out when is a medicine a medicine. It is a difficult thing to do, because a cup of tea can be considered a medication. If I correctly recall my first-aid days, we were advised to give the patient a cup of tea in certain circumstances.
Let me turn to the fact that I am also a newsagent, and inform the Committee how I become a price cutter. The Daily Express was the first paper that I bought myself after I stopped sponging on my father. This was just after the war, and it said, "Cut your prices and you will succeed". I did just that but the Daily Express has deserted the bridge. Never mind, I got off that ship, just before the Common Market debate.
Let me tackle the business of the newsagent. Let us think for a moment of the physical aspects of this business. It is a matter of distance limits, how convenient people are to the shop in question, and how people are influenced by habit. People travel from A to B, from home to work, and if there are four different routes, they generally take the same one. They call into the same shop, purchase the same paper, and buy the same packet of cigarettes. We must recognise that the newsagent should not be covered by this Amendment, but I dislike the idea that Lord Beaverbrook sells me my paper for 2¼d. which I have to sell at 3d. It has a shelf life of only three hours. At 10 o'clock it is very difficult to sell papers, and I have to throw 24¼d. away. There is no "sale or return" on national dailies, and I hope that newsagents will pressure the proprietors of newspapers to get back to pre-war condition of "sale or return".
Again on the business of r.p.m. in a newsagent's shop, the thing that they are most worried about is the sale of cigarettes, and I am delighted to have heard that mentioned in this Chamber. The odd occasion of Adsega was obviously a gimmick. They got off the mark pretty quickly, and received a lot of national publicity for doing so.
If one examines resale price maintenance in connection with the sale of cigarettes—and I ask my hon. Friend the Member for Coventry, South (Mr. Hocking) to consider this—one realises that it has given sellers a guaranteed profit. The sale of cigarettes has spread 321 enormously. They can be bought in garages, in chemists' shops, in grocers' shops, in fish and chip shops, and more and more people are taking to selling them. I am convinced that that would never have happened if there had not been virtually a guaranteed profit on them.
I come back to the point about supermarkets. The sale of cigarettes in one chain of supermarkets accounts for only 0.5 per cent. of the sales, and I know of one chain which in the course of the next few weeks is to stop selling them. A personal friend of mine who owns some supermarkets says that when he has to deal with the problem of pilfering in his stores he stops selling cigarettes and he is no longer troubled with shrinkage.
Supermarkets are not really interested in selling cigarettes, but if they do sell them I believe that they will sell them in packs of 200, as they come into the store. They might knock off 2s. 0d., but I ask the Committee to think of the way in which the whole pattern of selling them would have to be altered. How many people will buy 200 cigarettes at a time and plonk down more than £2 on the check-out for their purchases? Again, there are a number of people who use the 10 or 20 packet to ration themselves as it were, or to keep their smoking within bounds, particularly since the cancer scare. I believe that this business of the sale of cigarettes is a red herring, and that the tobacconist-confectioner-newsagent will exist if his site is right. If his site loses its value because of slum clearance and the like, he will not exist in that area, which is natural.
I deal next with the propaganda which has been sent by newsagents to all hon. Members. The pamphlet to which I am referring says—and I will take only one point—that nine out of ten butchers' shops are owned by chains. If hon. Members check on the census of distribution they will find that that is an erroneous figure. The co-operatives have 5,997 outlets; the multiples have 5,795; the large independents have 275, and other independent butchers have 31,555. Those figures show how wrong are the facts put forward in this propaganda.
322 I have been a subscriber of a Newsagents' Federation for 15 years. I have been to one meeting only, at which three members were present, yet this is the kind of pressure which has been exerted on us. The older people in the trade attend to earn respect in the trade, to wear the medal at the annual dinner, and just think of the line of promotion? The man who is interested in the politics of the business goes to the area committee and eventually becomes national chairman. There he has a hired pressure-group hack at his elbow to give him some of the false figures which we have been getting from these pressure groups. He has not the time in which to study the figures. He swallows what the men in the centre give him.
The hon. Member for Grimsby (Mr. Crosland) referred to a pamphlet on resale price maintenance. I rang up the gentleman responsible for this publication. He is ex-Member of the House—from the other side of the Committee. The late Sir Willy Darling was once attending a meeting at Scarborough. A heckler remarked on the Labour Party in Australia winning the 1916 election and Sir William replied, "I know that. I was there, and I voted Labour". That is the kind of thing that catches people out and on page 9 of this pamphlet there are statistics about the United States and about New York during the period 1947 to 1958.
I was it New York in 1958 when resale price maintenance ended. I checked the figures, and I assure the Committee that being in New York on that day was like being present at everybody's birthday. The price cuts in consumer durables were enormous. It was the gayest day in my life.
During my telephone conversation with the person responsible for this pamphlet h said that he was thinking of going in to a second edition of the pamphlet because some of the words were not quite right. He said, "In New York State, which is a fair trade state"—he broke off there and said that he was going into a second edition because it should read, "New York State was a fair trade state". That is the kind of stuff with which we have been pressured by these groups. I believe that it is not in the ultimate interest of men in small businesses in 323 this country to listen to that kind of thing.
I turn now to the positive side of getting rid of resale price maintenance and the things that it has done for the grocery business. Voluntary groups are now marching along the path of progress more rapidly than the supermarkets. If Members look at the census of distribution, part of which has just been published, they will find that between 1950 and 1961 the number of grocery and provision dealers increased. Those figures should be closely studied by every hon. Member before he votes on this issue.
To turn to new Clause 10, if we decide to let people drink alcohol, that is a primary decision. I do not see that price alters the argument. Every survey that has ever been carried out in the grocery business has shown that the reasons why a customer selects a certain shop are, first, proximity; secondly, the giving of credit; thirdly, the provision of a delivery service and, fourthly, price. Nearly every survey puts the reasons in that order.
The independent trader has enormous advantages which no multiple can have. The cards are stacked in his favour. He is generally a local man, who can serve on the local council and attend the local church. He can be a prominent member of his own community. These are all reasons why the independent will be able to stay in business. I expect that in the next few years he will increase his business. For all the reasons that I have given, I ask my right hon. Friend to resist all these Amendments.
§ Miss Margaret Herbison (Lanarkshire, North)
I am sure that hon. Members on both sides of the Committee have thoroughly enjoyed the hon. Member's speech, whether or not they agree with it. I want to take up a few points that have been made. In a very lucid and logical speech, my hon. Friend the Member for Grimsby (Mr. Crosland) seemed to suggest that all those Members on this side of the Committee were, without reservation, in favour of the abolition of resale price maintenance. He was afraid that an impression might be given that that was not the case. I am afraid of the impression that his speech gave, and I feel that we must make our position clear.
324 I am speaking for myself. I believe in the abolition of r.p.m., but only if there are positive safeguards for the consumer. They are not provided in the Bill. The Bill does only half the job, and that makes it very difficult not only for the small shopkeeper but for almost every housewife. That is the main reason why I criticise the action of the Government in bringing forward a Bill which is only half a Measure, and doing nothing worth while to deal with the other side of the coin, namely, monopolies.
My hon. Friend the Member for Grimsby said that in the grocery industry r.p.m. had disappeared. I accept that. He said that because of the associations which the independent grocers have entered into they are able to compete on equal terms with the big chain stores and self-service stores. Only on Sunday—two days ago—I was speaking to a man who, like the father of the hon. Member for Cleveland (Mr. Proudfoot), has been in the grocery trade all his life, owning his own shop. He gave me one example of the difficulties he experienced.
He is an excellent businessman. He has prospered. But even that type of man experiences difficulties. Every housewife must buy sugar. This man has to buy a ton of sugar in order to get it at 8½d. a lb. He says that he has had to reconcile himself to the fact that he just cannot sell sugar in competition with the big multiple shops. He sells it to those who will come in and buy it, but he cannot reduce it to the 1s. 4d. for 2 lb. that so many big multiples charge for it.
As it is at present, the Bill will not help the small shopkeeper. But I want to develop my argument about small shopkeepers and consumers when we reach Clause 5 and to deal with points made by the hon. Member for Colne Valley (Mr. Duffy). I want to devote the rest of my short speech to Amendment No. 17. Even though the wording may not be what we should like to see ultimately in legislation, the Minister ought to be able to tell us that he accepts it in principle, and that on Report he will ensure that the proper wording will be put in.
I was amazed at the hon. Member for Putney (Sir H. Linstead). He made an excellent speech. I was certain that, 325 come what may, no matter what the Government said he at least would go into the Lobby in support of Amendment No. 17. But he has talked himself out of taking that step, because he has said that he would like the Minister to show him whether there was a gateway in Clause 5 which would do for the pharmaceutical industry and the chemists what the Amendment asked for. In the middle of his speech one of the Liberal Members intervened and suggested that he might find a gateway in Clause 5, but he said that that would leave it to the judges to decide on this matter and could decide to abolish r.p.m. on pharmaceutical products. There seemed to be a great contradiction in his speech.
There is one point to which little reference has been made. Sometimes chemists have to carry very large stocks in order to supply the medicines prescribed by doctors. If r.p.m. is abolished for them, and the rest of the Bill is made to apply to them, it is possible that some of this medicine could find its way into grocers' shops, multiple stores and other similar places. I am certain that my hon. Friend the Member for Greenock (Dr. Dickson Mabon) would say that one of the things that a chemist has to know is whether his stock has deteriorated. If medicine has deteriorated it may prove very dangerous to a sick person. One could not expect a grocer to take the same care over medicines as would be taken by a chemist. From that viewpoint alone it seems to be of the greatest importance that this Amendment should be accepted.
§ Mr. Peter Emery
If one accepts the argument advanced by the hon. Lady the Member for Lanarkshire, North (Miss Herbison) it would follow that a grocer, who may be selling many types of food, would not be willing to take the necessary care to ensure that the food which he sold was in a proper condition. Surely, if the argument of the hon. Lady is a sound one, she is suggesting that a grocer would not take the necessary care. That, I think, is entirely wrong, and something neither she nor the Committee would maintain.
§ Miss Herbison
There are two points arising from the intervention with which I should deal. A grocer is trained in 326 his job. But he is not trained as a chemist. The training for a chemist is fairly lengthy and does not relate just to the dispensing of medicine. It is necessary for a chemist to know about the properties of the medicines that he stocks and one could not possibly expect a grocer to know that. One could not expect a grocer to know the condition of goods which a chemist may sell and which may deteriorate even more rapidly than some foods.
When a housewife buys goods from a grocer—with the exception of tinned foods—she can see almost at a glance whether the cheese, the butter and other things are in a good condition. She would find that impossible where medicine is concerned.
§ Mr. Heath
I am not quite clear whether the hon. Member for Lanarkshire, North (Miss Herbison) is suggesting that the medical commodities which are at present sold by other traders than chemists should not be sold in that way, or whether she fears that if r.p.m. were abolished, goods sold by chemists might be sold more widely. There will be no question of that, because the matter is covered by legislation to which I shall refer later. But I should like to know what is worrying the hon. Lady, whether it is the suggestion that goods of a medical nature which are sold in shops other than chemists shops ought not to be sold in that way.
§ Miss Herbison
I am not suggesting that at all. In a small hamlet it should be possible to buy aspirin and other simple remedies at the general shop. But there are certain things sold by chemists that the small shopkeeper, or particularly the multiple shop, would not at present dream of including in stock, but which they might consider selling if the provisions in this Bill become law. I wish now to refer to the reduction—
§ Miss Herbison
No, I am sorry, but I cannot give way to the hon. Gentleman. The Committee has already spent a long time on this matter and there are other hon. Members who wish to speak. It may be that the Closure Motion will be moved, and they will be cut out.
There are many villages in my constituency. My hon. Friend the Member 327 for Blackburn (Mrs. Castle) gave the exact figure of the reduction which has taken place in the number of chemist shops. It seems to me that it would be a very serious matter if there were a further reduction in the number of chemist shops in villages. I hope that the Minister will give consideration to this question, and ensure that the people living in villages may enjoy the same service that they get at present, and that they may even be improved.
§ Sir Douglas Glover (Ormskirk)
I am glad of the opportunity to speak about these Amendments, particularly as the whole of my business life has been spent in distribution and retail in a sphere where resale price maintenance has never operated. Listening to speeches from hon. Members on both sides of the Committee, I have come to the conclusion that people are worrying unduly about what will happen to the shopkeeper with a medium-sized business. My hon. Friend the Member for St. Ives (Mr. G. R. Howard) referred to the possibility of cameras being sold at half-price and there being no after-sales service. That might happen were we living in the midst of a dreadful depression. But, if we consider the competition which takes place in the market street, to which reference was made by the hon. Member for Grimsby (Mr. Crosland), we realise that there are rent and rates to pay; and there is the ever-rising cost of wages, light, heat and so on. There is a very real difficulty about securing staff. These business people will not fill their counters and shop windows with goods that they propose to sell at a loss just to please the public.
I agree with my hon. Friend the Member for Cleveland (Mr. Proudfoot), who recalled what happened in New York when resale price maintenance was abolished, and I think that when this Bill becomes an Act a lot of funny things will happen in this country for the first six or twelve months. People may well exhibit whisky in their shop windows for sale at 35s. a bottle. But they will not tie up vast amounts of capital or utilise much window space in order to sell whisky below cost price, or even at cost price. It is difficult enough to get sufficient whisky to sell at the full price without considering 328 cutting the price. So I do not think that there will be a great deal of price-cutting, except at the beginning of the period after the abolition of resale price maintenance.
In my business, the clothing business at the popular price end, we fight each other like Kilkenny cats. We are really keen merchandisers. But we are all conscious of the fact that we must secure a certain mark-up on our total turnover, otherwise it would not be worth while being in business. The same thing will happen when resale price maintenance is abolished in other forms of business.
I am surprised that Amendment No. 14 was selected, because if ever there were a wrecking Amendment this is it. I have made a rough calculation of the turnover in the various items referred to, and I believe that the total resale turnover of all commodities, including food, is about £16,000 million to £18,000 million a year. I reckon that the turnover involved here would add up to about £5,000 million to £6,000 million. The total of the goods sold and covered by r.p.m. is about 40 per cent., and so that apart from motor cars it does not seem to me that much has been left out from the terms of this Amendment. If it were accepted, we might as well scrap the Bill altogether.
According to the speeches I have heard, no one has appeared to realise that there are a great many safeguards which are not altered by this Bill. We have heard a reference to photographic equipment. Films are generally sold in all pharmacists and a great many stores, but I doubt if many cameras are sold in them except on a restrictive franchise. The manufacturer decides that he will have so many outlets in a town. He may allow four shops to stock his particular range of cameras in a large town, two shops in a small town, and in a still smaller place he will allow one shop to have an exclusive franchise. There is nothing in this Bill to stop that manufacturer continuing to do so.
A chemist should not think that he will go out of business the next day after the Bill becomes an Act if he has exclusive rights in a small town to sell Helena Rubinstein cosmetics. Such a chemist would still have that right, while the chemist across the road would have 329 an exclusive right to sell Max Factor preparations. All these things are generally sold on a restricted franchise.
If a motor-car dealer has a sole agency in his area, he will still have it under this Bill. If a person wanted to buy a Ford, he would still go to the same person. If he wanted to get it at a cut price, he would probably have to go to another area, or to a subsidiary dealer who does not get so much profit in the first place.
I am a little critical of the Minister in thinking that we shall not find an enormous reduction in prices. I believe that nearly every commodity reaches its retailing optimum price, whether it is a fixed price or an unfixed one, in a free competitive market. That is the price which nearly all retailers find they need. The mark up is the same if they are to make a profit in selling that commodity. In a full employment society, with rising costs of rents, rates, staff, light, heat and so on, everyone finds it increasingly difficult to get staff to carry their increased turnover. Once the freeing of prices comes into operation, there will not be a very big reduction in prices. It will lead, perhaps, to a marginal reduction and to a keener area of efficiency, but I do not think the public will get a bonanza of reduced prices as a result of this Bill.
On the other hand, it is about time we mentioned on the Floor of this Committee that the main object of the Bill is to help the public, the consumer. From many of the speeches we have heard, there seems to be a belief that retailers and wholesalers are, by definite right, entitled to a given income from the public whether they give service and provide facilities which the public have a right to expect.
I hold a totally different theory about retailing—and I speak as one who has been a retailer—and that is that when a man puts his name over the front of a shop he issues a challenge to the community that he will provide it with goods and services at a price and of a quality and with the ancillary services which go with shopkeeping, and he challenges himself to make a living out of the margin of profit. That is the correct way to approach the question. He is not entitled to a given return from the public on his activities. It is 330 up to the retailer to justify and prove that his way of doing business is the most efficient, and to go on proving it year by year.
Having said this about competition and believing in the free competitive element in retailing, I am very worried about Amendment No. 17. There are some instances where, I think, price is a secondary factor. As many of my colleagues know, I have been ill in the last 12 months. I had so many drugs pushed into me that I became, not a hypochondriac, but an anti-druggist. Only on the last month have I begun to feel better because, ignoring all medical advice, I poured the whole lot down the sink. Now I am making a rapid recovery. It is all right for doctors to talk about self-medication being bad for us, but if we are honest we all admit that no one on these benches has not done some self-medication at some time. Are enormous amount of self-medication takes place. I am sure that the average person when he goes into a chemist's or a grocer's is much more concerned that a medicine shall be backed by a name which is known and respected. That applies to many proprietary medicines, let alone ethical medicines.
Having spent a lifetime in a type of retailing where there is no resale price maintenance, I think the public have gained an enormous benefit from its absence; but there has been a tendency to lower Quality. We cannot get away from the fact that if we have cut-throat competition the tendency is to lower quality. That might not matter in some trades because the general level is going up as a result of various inventions and so on, but in others a person's name and reputation is very important.
§ Mr. Donald Chapman (Birmingham, Northfield)
The hon. Member has been in a type of retailing and perhaps can help us. The dilemma, as I see it, is that if we open up the remainder of the retail trade to competition to keep the margins Keen, how can we be assured after this Bill has passed that margins will not to too high for patent medicines? Can the hon. Member give a guarantee on that? I am with him in my sympathy with Amendment No. 17, but if we do this how can we be sure 331 that margins are not too high? Some of us feel that they are already too high.
§ Sir D. Glover
I think that a very useful contribution, and I am glad that I gave way to the hon. Member. It is not my duty, however, in a speech on an Amendment, nor even on Second Reading of this Bill, to say whether prices in pharmacy are too high or too low. That applies to many proprietary medicines, let alone ethical medicines. Every hon. Member will know what I mean by that—medicines and drugs prescribed by doctors. If there is an argument for resale price maintenance for proprietary medicines, there is an overwhelming case in the ethical field that they should be sold through chemists with no question of price-cutting or lowering of standards and quality. If another system is to be evolved whereby the pharmaceutical industry would have to have its prices vetted, that would be a different argument. It is not something to try to interject into a speech on an Amendment.
§ Sir D. Glover
My hon. Friend is right. However, the hon. Member for Birmingham, Northfield (Mr. Chapman) made a genuine point, which I was trying to answer quickly.
Therefore, I do not think that the Amendment as it is drawn is nearly tight enough to deal with what most people have been discussing, namely, the prescribing and handling of medicines which are drugs in the accepted sense and not aspirins bought in the local store. I therefore ask my right hon. Friend to consider this. I believe that he would carry the Committee with him overwhelmingly if he said that between now and Report he would see if ethical medicines, where quality is far more important than price, could be made an exception. With this one proviso, I think that Amendment No. 14 is a wrecking Amendment.
I agree with the hon. Member for Grimsby (Mr. Crosland) that the worst 332 fears of the smaller shopkeeper will not be realised. I believe that there is a great future for the bright, forward-looking and pushing independent shopkeeper in the suburbs, away from town centres. Costs in town and city centres are becoming colossal. Space is becoming increasingly valuable. Some smaller shopkeepers who think that they will be adversely affected by the Bill may be the first to cut prices and put multiple shops out of business in expensive high street. In the suburbs it is easier to park. Advertising for small shopkeepers in suburbs is no more expensive. Space is much cheaper there than it is in town and city centres. Once r.p.m. is abolished. I believe that those who will reap the most benefit—perhaps not in the pharmaceutical trade, but in many other trades—will be the small men away from the high street. They will also help the Minister of Transport to solve some of our traffic problems.
§ 7.45 p.m.
§ Mr. Donald Wade (Huddersfield, West)
I agree with the hon. Member for Ormskirk (Sir D. Glover) that there is a great future for the independent retailer. Probably it is the independent retailer selling high quality goods in the high street and endeavouring to keep a fairly wide range of goods in stock who will, with or without r.p.m., have the difficult time in years ahead.
I have been present throughout the whole debate. As I have listened, it has become clear to me that we cannot satisfactorily examine all the evidence relevant to the various commodities covered by the Bill, nor to the fairly wide range covered by Amendment No. 14.
I agree with those who have said that, if Amendment No. 14 were carried, it would wreck the Bill; the Bill might as well be scrapped. We are in a difficulty when trying to discuss a number of different commodities in a group of Amendments such as this. Most hon. Members will remember the debates we have had on Purchase Tax, some of them dealing with groups item by item, sometimes with a group of items. It is difficult to cover all the ground satisfactorily. I have no doubt that the Minister in winding up will say that the Bill provides the machinery for considering these various groups of goods. It is a matter of opinion whether the machinery of 333 going before the Court is the best that could be devised. I have my own views on that.
I have carefully examined all the letters which have been sent for me. The strongest case has been made out by the chemists. Earlier in the debate the hon. Member for Cleveland (Mr. Proudfoot) said that he was a hypochondriac. The hon. Member for Ormskirk said that he was not. My father-in-law certainly was not a hypochondriac, but he could not bear to see anything wasted. Whenever he saw a half-empty bottle of medicine lying around, he drank it because he could not bear to see it wasted. He did not seem to be any the worse for it. Perhaps they were all placebos.
The reason why chemists seem to have a strong case is that they do not just retail goods. They have the dispensing service. This is a very important service. The whole question in relation to chemists is bound up with considering the safeguards affecting the sale of drugs, including poisons. This extends beyond the realm of r.p.m. I quote briefly from one of the letters I have received from chemists. A Huddersfield chemist expresses his desire, which I think is genuine, that we should consider the public as well as the welfare of the pharmacist. He then says this:I would suggest that the Government should be pressed for an undertaking to improve dramatically the terms of service of the dispensing chemist and to investigate the means of bringing British pharmacy into line with European pharmacy by the restriction of sales of medicine to qualified outlets.This goes beyond the realm of r.p.m. All kinds of ancillary social problems are involved. There is the question of drugs and poisons, to which I have referred. There is the problem of paying for the National Health Service. I have received a number of letters, as no doubt other hon. Members have, saying that it would be very difficult for chemists to maintain the National Health Service if it was not for the maintained price of other articles.
§ Mr. John Hynd (Sheffield, Attercliffe)
Is the hon. Gentleman quite sure that the problem in relation to pharmacists is outside the scope of r.p.m.? Surely the problem of the chemist is that with the present arrangement under the Health Service he is forced to sell all kinds of goods and pay unqualified 334 people in his shop. If he were given better standards under the National Health Service, we could then insist on chemists being pharmacists and not general grocers, which would be more in keeping with the status of the service.
§ Mr. Wade
That is the point I was endeavouring to make. I am not satisfied that the social problems—for instance, the question of the Health Service—will be solved by a reference to the Court. How exactly will Clause 5 be construed in the case of the chemist, for example? There are three gateways. There is the question of the quality of the goods being substantially reduced. I do not know whether chemists will be able to get through that gateway. There is the question of the number of establishments being substantially reduced. It may be that a number of chemists would go out of business. I hope that that will not be so. I do not think they would be able to prove that the number of establishments would be substantially reduced because many of the articles they sell might be sold by other establishments. I would be unhappy to see that happen, but I am not sure that this gateway will be sufficient in their case. It may be that they will come under the third gateway—necessary services or the public interest. I do not know to what extent the Court could consider issues that are really social problems and not merely questions of price maintenance.
One hon. Member referred to the procedure before the Court as a "crystal ball". I am not sure whether our judges would like a court of law to be described as a "crystal ball". I presume that when a case came before the Court, the Court would have to say whether price maintenance was to be allowed to continue. The Court would not be able to express an obiter dicta that there should be a qualified outlet only for medicines and drugs. It would not be able to express an opinion on how the Health Service should be paid for. These are matters that come outside the scope of the Court that is being set up.
The Court, obviously, would not be able to consider whether it was desirable that there should be an increase in the drinking of alcohol. All these matters would come outside the concern of the Court. I do not know to what extent 335 the Court would be able to consider fully the interest of the consumer. I believe that in examining this Bill and the various Amendments we must consider primarily the interests of the consumer.
Coming back to the question of chemists, my own view, subject to anything which the right hon. Gentleman has to say, is that there seems to be a case for Amendment No. 17. I am not persuaded on the other Amendments. I think that there are cases which must go before whatever procedure is finally decided upon, but it seems to me that Amendment No. 17 is a social problem and not just a problem of price maintenance. At the moment subject to anything further that may be said, I would be prepared to support that Amendment.
§ Sir Richard Thompson (Croydon, South)
Of the group of Amendments that we are discussing, the one which mainly interests me is Amendment No. 17. I shall be as brief as possible because I know that several other hon. Members want to speak. I do not think that the kind of blanket exceptions which is urged in the terms of this Amendment is either acceptable or, indeed, workable in practice, because of its looseness of definition. Nor do I think that it would solve the problem of the chemists, around which so much of this debate, rightly, has revolved.
There are, of course, plenty of substances, in the words of the Amendment, "recommended as medicine," which can be freely bought anywhere, including the grocers. I am thinking in terms of aspirins, cough lozenges and mixtures, Beecham's pills, indigestion tablets and the like. It seems to me that the wording of Amendment No. 17 would deliberately exclude the wide range of toilet accessories, soap, cosmetics, sponges, sunglasses and all the rest, on which, we are told, the chemist relies to a very great extent for the extra income which his services under the National Health Service do not by themselves secure for him.
I think that if we accepted this Amendment it would be terribly difficult to make sense of it, and I do not believe that it would be workable in practice. We hear a great deal, as we have heard 336 tonight, of the claim by chemists, which is regarded by them almost as axiomatic, that their activities subsidise the National Health Service. It is quite an article of faith with them. I do not believe that this is really the case. But it is on this assumption that they fear the effects of this Bill. They claim that the profitable part of their trade will disappear, leaving them only with the unrewarding and sometimes quite exacting task of dispensing prescriptions. Although I think that they have the argument wrong, I accept that it is a genuine fear on their part, but I believe it to be exaggerated.
I believe that the existence of the National Health Service has had quite the reverse effect on chemists. I think that single fact alone has brought many thousands more customers into their shops every year. We must accept the fact that if it were not that the public, by payment simply of a prescription charge, can have costly prescriptions dispensed at the cost of the State large numbers of people would fall back on the sort of self-medication which hon. Members have deplored, and which we all to some extent indulge in, and the products of which can be purchased in shops other than chemists' shops. Therefore, I think that the chemists are on rather a shaky point when they maintain that they subsidise the National Health Service by what they make on ordinary retail sales. If it were not for the National Health Service, they would have about half their custom removed, which could not be of advantage to them.
§ Mr. Elwyn Jones (West Ham, South)
Are not the chemists agitating very actively for the restriction on the sale outside chemists shops of drugs of the type which the hon. Member has mentioned? It is also part of their complaint in regard to this matter that they are not getting the protection from the Government which they would expect to have if they were losing other benefits?
§ Sir R. Thompson
I accept what the hon. and learned Member has interjected, but the point that I was dealing with was that the kind of things that chemists sell—cosmetics and things of that kind—which are not drugs are the 337 things on which they make a good commercial profit. They are helped in selling them by the existence of the National Health Service which brings many more people into their shops than would otherwise be the case.
What are we to do about this? It seems to me that on the whole the retail chemists' business is holding its own. I know that one hon. Member quoted figures to show that there had been a rather marginal reduction in the number of "dispensing outlets", which I think is the term. My own figures show that the number of chemists in retail business has not altered significantly over the last 14 or 15 years. This does not suggest to me that, as things are at present, the chemists' business is a precarious or unrewarding practice. Indeed, in 1960–61 the Public Accounts Committee drew attention to what it thought was over-remuneration in certain cases. Nevertheless, a genuine apprehension exists, and no one in the Committee would deny the key role that the chemists undoubtedly play in the machinery of the National Health Service. A really substantial fall—and I mean "substantial"—in the number of retail chemists would create a serious problem for the general public. That is the problem that we have to grapple with.
It suggests to me that the real solution is for the Government not to look at this matter solely in the context of resale price maintenance but to look at the scale of remuneration to chemists for the services that they perform under the National Health Service. I am told that at this moment some pretty detailed inquiry is going on. I am told that the chemists themselves have hired professional consultants to go into the whole basis of the economics of their profession, and that the result of those researches is now being argued out in the Ministry of Health. If that is so, at the end of the day—and I hope it will not be a very long day—we ought to get some reliable data on which we can properly assess the position. I should have thought that that would point to an equitable solution.
§ Mr. Hale
I did not quite follow the hon. Gentleman's argument on that point, in which I am very interested. 338 Is he saying that because the pharmacists are having regard to the actual expenditure in reconsidering the structure of their industry, they should be deprived of our protection and that we should say, "Perhaps some time in the years to come, when we have time and when the Government are feeling benevolent, we might return to your problems"? If not, what is he saying?
§ Sir R. Thompson
I did not say any of those things. If the hon. Gentleman will read the OFFICIAL REPORT tomorrow, I think he will find that I said that the chemists had commissioned a survey of the economics of their own activities and that the result is being examined by the Government. I said that at the end of the day—and I added, "I hope it will not be a very long day"—we shall then have the data on which we can assess the situation.
§ Sir R. Thompson
I can tell the hon. Gentleman clearly what I shall do in the Lobby tonight. I do not believe that the chemists can be rescued from this dilemma by the abolition of resale price maintenance. I think these are the wrong kinds of Amendments to secure the kind of end that I want to see. I was giving my idea or an objective alternative which would secure a better economic return. I shall oppose these Amendments in the Lobby. That is the answer to the hon. Gentleman.
§ Mr. Sydney Silverman (Nelson and Colne)
My hon. Friend the Member for Oldham, West (Mr. Hale) asked the hon. Gentleman a definite question and he began by saying that he was going to reply to it, but he never did reply to it. The question was, what will the hon. Gentleman do in the Division Lobby tonight?
§ Sir R. Thompson
That question was specifically answered in my very last sentence. I think the hon. Gentleman will find that is so.
I believe that is the more sensible way to deal with this problem. To 339 accept this Amendment would be unworkable and also would give rise to utterly unacceptable claims in respect of a whole group of other goods which to the manufacturers would appear equally as important as those sold in chemists' shops.
§ Mr. Chapman
I apologise for the fact that I have very little voice. Perhaps I had better see a chemist. The state of my voice will, at least, have the advantage that my speech will be very brief.
I want to develop the dilemma which I posed to the hon. Member for Ormskirk (Mr. Glover) in the course of his speech. I am sympathetic to Amendment No. 17. May I illustrate my attitude in this way. Last week, and before that in 1959, we gave the protection of resale price maintenance, in the most vicious form, to the opticians. We have said that a purely cosmetic product sold by opticians—namely, a spectacle frame—can never be advertised with a price on it, that it can never have its price cut by competing opticians, but must be treated as an ancillary service to a professional prescription. I opposed that proposal because I think that this is one field of the optician's activities where we certainly ought to allow a breath of competition. It is a purely cosmetic article in many cases. Yet because we said that an optician is a professional man, we gave him the protection of the Opticians Act, and opticians have now used that protection to prevent price-cutting and advertising.
If a spectacle frame is in that sense an ancillary product to a professional service, how much more so is a drug? It is pre-eminently so compared with a spectacle frame. There is an absolute case for saying that a drug, which we should not encourage people to use except under professional advice, should not be subject to price cutting, advertisement inspiring self-medication and all the other dangers which have been developed ad nauseam today.
But once we say that, and if we give that protection of preventing price-cutting and the ability to enforce resale price maintenance, how do we ensure that the retail margin is not too great? We cannot do so in many cases. Without a great deal of evidence, but, never- 340 theless, with sufficient evidence to persuade me, and particularly after having listened to my hon. Friend the Member for Hayes and Harlington (Mr. Skeffington), who has developed this subject over the years, though only with the protection of this Chamber, because if he said these things outside this House about patent medicines he would be in great difficulty. I feel absolutely sure there is a racket in patent medicines and drugs that border on patent medicines.
Here is a dilemma, that if we examine the activities of pharmacists from the point of view of the operation of the Bill, how do we ensure that their margins of profit are not too great? I challenge the right hon. Gentleman to point to a solution to this dilemma. I do not know the answer. If we exclude the pharmacist, we entrench him absolutely in his profit margin. I appeal to the right hon. Gentleman to tell us whether he can think of a way of solving this dilemma.
The hon. Member for Croydon, South (Sir R. Thompson) referred to products which are not really drugs, such as laxatives, voice pastilles, indigestion tablets and the rest. There seems to be no reason to regard them as ancillaries to a professional service. They could as well be sold in shops other than in pharmacies. Then we come to a certain ring of products—patent medicines which are supposed to cure diseases as such. In that case I would generally opt for the ending of resale price maintenance. I do not think it would do a great deal of harm.
Then we come to the middle core of the whole problem, namely, the provision of drugs which should not be taken except under the guidance of a pharmacist or doctor. We must find some way of discovering whether the Bill as drafted, or with the inclusion of any of the Amendments, can enable the court which is to be set up to judge whether resale price maintenance should be retained in the public interest in respect of specific groups of products in that field. If so, I shall feel happy about this part of the Bill. Does the right hon. Gentleman feel that this will solve the problem which I have in mind—first, that it can judge whether or not resale price maintenance on those items will enable the margins to be too great? 341 It is not only that it should be in the public interest, and that these things should be sold only under professional advice, but also that the Court can decide that in those cases there is no grave danger that the public will be milked by too high retail margins as well—because these are part of the parcel I want. We want an assurance on both points before we exempt this class of goods from the operation of the Bill. It is all very difficult. I am in sympathy with Amendment No. 17, but until I can be reassured about the size of the retail margins, I cannot go the whole way in exempting goods as suggested in Amendment No. 17.
That leaves us with the other point that, in any case, if part of the pharmacist's case is that he is subsidising his work under the National Health Service from these too high margins on patent medicines, we must look at the margin available to him for his National Health Service work. The right hon. Gentleman ought to make some announcement on that problem as well this evening, before we can feel happy that we have constructively tackled the problem in the Amendment.
§ Mr. Patrick Wall (Haltemprice)
It would be wrong at this stage to spend much time discussing generally this batch of Amendments. Suffice to say that I believe that there are long-term benefits both for the consumer and for the trader in the general abolition of r.p.m., and I believe that there has been gross exaggeration—probably deliberate exaggeration—of the fate in store for the small trader. The arguments contained in Amendment No. 14 would drive a coach and horses through the Bill and therefore cannot be accepted but, like the hon. Member for Birmingham, Northfield (Mr. Chapman) I am particularly interested in Amendment No. 17.
As I understand it, the chemist earns his remuneration through three main actions; the dispensing of medicines, the selling of drugs and surgical appliances, and the selling of infant foods, special foods, cosmetics, and so on. He draws about one-third of his returns from each of those three branches of the service he gives. I cannot wholly accept the argument that chemists must recoup their losses in dispensing medicines by making large profits in the other two 342 branches of their service. As has already been said by my hon. Friend the Member for Croydon, South (Sir R. Thompson), the answer there is to give better National Health Service payments.
Here, I would commend attention to Motion No. 77, in the name of my hon. Friend the Member for Torquay (Mr. F. M. Bennett), myself and other hon. Friends, which points out that the Minister of Health is at present conducting an investigation into the remuneration of pharmacists for N.H.S. dispensing, and suggests that when the review has been carried out there should be…adequate provision to cover all overhead expenses of the services rendered so as to obviate the need for pharmacists to have to sell other non-pharmaceutical goods to subsist.If we ensured this, we would probably solve our main difficulty, but it does not get us out of a further difficulty.
There is the very serious argument that drugs should not be subject to a cut-price war and that there sales should, broadly speaking, continue to be controlled through the professional discipline that exists in chemists' shops. Chemists alone are under that professional discipline. With their long training, they are fully aware of the considerations in handling medicines, the restrictions that should be applied to the sale of drugs, and the precautions necessary in their use. I do not believe that this long training and discipline can apply in the same way to other channels of sale. There is also the parallel argument that chemists render great services to the community, such as the first-aid they are prepared to carry out, the provision of oxygen, and so on.
I am told that the effect of the removal of r.p.m. on the sale of proprietary medicines would be of great importance to the chemists, that it would drive the small ones out of business, and that their service to the public in the medicinal field would be made insecure. I am also told that under the terms of the Bill as now drafted the Court cannot consider service to the community. If that is so, an Amendment such as No. 17 would be necessary; No. 14 is far too wide, but I think that No. 17 covers the point that I particularly want to stress.
There may be another way out. I can see that my right hon. Friend would not 343 particularly want to include one group of items when not allowing exemptions for other items, but Amendment No. 89 allows exemption on goods that…would be sold under conditions which would be likely to lead to their misuse by the public".That provision would cover the main point I am making and I hope that my right hon. Friend will deal with it very carefully when he speaks later. It is quite obvious that this is something that is worrying many hon. Members on both sides.
§ Mr. Hale
I do not want to start by saying something that might sound unpleasant to the Committee, but perhaps I could try humbly to return the debate to the comparatively narrow questions that have been postulated for us by the Ruling of the Chair. We are trying to consider collectively the question whether strong spirituous alcoholic liquors should be exempted from the provisions of Clause 1: the question whether tobacco and tobacco products should be exempted from the provisions of that Clause; the question whether we should exempt from the same provisions…pharmacy and the sale of goods normally carried on by pharmacists, including cosmetics…tobacco, cigars, cigarettes and the sale of associated goods…newspapers, magazines, periodicals, stationery and the sale of good normally retailed by newsagents…".That is a difficult one. I have been here throughout most of this debate but I have not heard a word about newspapers—
§ Mr. Manuel
My hon. Friend is perhaps being misled in the Amendment he quotes. It does not speak of good newspapers but of…the sale of good normally retailed by newsagents…".The "s" of the word "goods" has been missed out.
§ Mr. Hale
I am infinitely obliged to my hon. Friend, whose advice I always welcome, but that raises the question of the Sunday Times. I was told some time ago by the Sunday Times that I was to be given a free coloured supplement, and it was added that the advertising revenue would pay for the supplement. Now it 344 costs 8d. Other papers rise in price. Now, when I go to my newsagent, I find that he is very annoyed about it. I have had bitter complaints from him—and I am on tolerably good terms with him. He tells me that for weeks he was selling one of the sporting papers at below the price until someone told him that the price had gone up; he had not examined it to find out. The Sunday Times is now 8d., I think, and the Sunday Telegraph is 5d, I think that the Sunday Telegraph is a jolly good newspaper—if they would not keep leaving out Hugh Massingham.
This is the nub of the problem. It is a serious question whether a gentleman who became a peer by mistake, because he had not expected to pay United Kingdom taxation and wanted to preserve his Canadian nationality—
§ The Temporary Chairman (Sir Samuel Storey)
Order. I do not think that this arises on the Amendment before the Committee.
§ The Temporary Chairman
Order. We are not discussing Lords in another place. We are discussing the question of these Amendments on the Notice Paper.
§ Mr. Hale
I apologise at once, Sir Samuel—of course, you are right. We have so many noble Lords in this place it is really hardly worth while looking in another direction.
I remember the remark of Henry VIII who said of Holbein, "I can make seven peasants into seven lords tomorrow but I cannot make of those seven lords one Holbein", but perhaps I ought to pass from the Sunday Times to other matters which I sought to enumerate when I earned the temporary reprobation of the Chair.
Sweets and confectionery, wines and spirits, if they are not strong enough to be included in the previous Amendment, any drug or any substance recommended as medicine. These are some of the items. I hope in the course of 345 a few minutes to return to the Amendment which was moved by the hon. Member for Putney (Sir H. Linstead) with a certain amount of limited admiration, but "any substance recommended as medicine" raises a very serious problem.
When I was a young man I was confronted by pictures which suggested that if I were too fat I should take "Antipon". I could acquire a figure worthy of a male. If I was not fat enough I should take "Sargol". I believe that both were made by the same firm and I think that it would be true to say that both contained much the same constituents, though there may have been some variation in the quantity of water. But I got fat without the use of "Sargol", and such physical progress as I have made has been made without the help of any product described as medicine. The hon. Member for Putney said "recommended as medicine"—not recommended by anyone who mattered, but on the label by the manufacturers. On television at the moment we are advised to take all sorts of obscure products to advance us mentally, physically and in beauty. I have complained before that although I am offered a paste which would make me look like Marilyn Monroe no one offered to Marilyn Monroe a paste which would make her look like me.
It is not for me to say one word which would be interpreted as expressing any doubt about the wisdom of the Chair in exercising the difficult problem of selection of Amendments, but I recall that Henry Hawkins made a point rather effectively in his reminiscences. He was appearing on behalf of a railway company in a case which concerned a chemist whose shop was being taken over for a railway siding and the question of valuation arose. It was said that the site was very attractive and he said, "It is all very well but if the witness and his friend were walking along a street and saw an attractive pub on an attractive site they might be tempted to say, 'Here is an attractive pub. Let us pop in and have a beer', but nobody passes an attractive chemist's shop with the sun shining on it and says, 'Here is an attractive chemist's shop. Let's go in and buy a truss'".
This is an important point and the discussion has ranged rather widely. 346 There is no hon. Member for whom I have greater respect than my hon. Friend the Member for Ebbw Vale (Mr. M. Foot) He speaks with great authority and with exceptional ability and great charm, and in private conversation is always speaking with tolerance, but I think that yesterday he was tempted to show a little harshness towards political delinquents.
I watched yesterday's scene with compassion. I recalled rather unhappily William Allingham's reference to the four ducks on a pond which moved us so much. There were only four ducks yesterday, although the Press said that there were going to be 40,What a little thing To remember for years— To remember with tears!And when the hon. Member for Rugby (Mr. Wise) rose, I think justifiably, from the political scaffold to say with Danton, "Show my head to the people", I could almost have sobbed aloud.
The fact remains that we have been discussing all these Amendments with brevity in view of the range of the products, and I think with relevance, except for one of two hon. Members opposite. I am bound to say that the hon. Member opposite who promised to say what Lobby he was going into bolted like a rabbit almost within two seconds of the Question. I am not sure, but I fancy that he was going to take refuge in some burrow other than the Lobby. The result is that we have had the right hon. Gentleman whose short title is terribly difficult to remember, the Secretary for Industry and a lot of things as well as President of the Board of Trade, sitting almost triumphant and saying hardly a word and making no intervention.
The hon. Member for Huddersfield, West (Mr. Wade) talked about his winding up the debate. I hope that that was not a prognostication. Many of us hope that we shall hear the wise words of the President of the Board of Trade and make our own comments upon them when we have heard them. For the moment we feel to a certain extent that we are speaking in vacuo. It is sad that, as far as I can remember, we have not had the assistance today of more than one or two of the 40 who were staging a tremendous political battle a day or two 347 ago. Where are they now? In the words of the lament of Francois VillonMais où sont les neiges d'antan?All gone, all dead, all disappeared. And here is the Patronage Secretary. [An HON. MEMBER: "No, he has gone too."] I beg the Committee's pardon, I meant the President of the Board of Trade. It would be generous to deny the right hon. Gentleman the opportunity of obtaining some sustenance in the course of these long and thoughtful debates and I shall have to refer to him again unhappily in his absence.
I recalled this morning something which I thought apt to yesterday's debate—a ballad of my salad days, whose precise verbiage it is difficult for me now precisely to recall.They were poor but more or less honest, Victims of a strong man's whim. Now they are selling penny or rather fourpenny matches Not subject to r.p.m.* * *See him in the grand theatre On the Front Bench looking slack In one hand he holds the Order Paper And with the other pats his back. He never grieves and he never smiles And he never larfs nor play, But he sits and croaks and a single joke Has he, which is to say— 'I am a cook and a captain bold And the mate of the Alec brig And the bo'sun tight and the midshipmite And the crew of the Premier's gig'.8.30 p.m.
No one can doubt, no one will wish to doubt or detract from the right hon. Gentleman's victory over the mutineers. But I am wondering now whether he will be generous in his victory, if he will, on his return, consider some of the representations which the Committee might wish to direct to him.
I referred to my hon. Friend. I hope that he will forgive me for reminding him of Louis XVIII, a man of great commonsense, I have always thought. There was brought before him Barentin, who had made an unhappy journey to Elba at the wrong moment to swear allegiance to Napoleon. When asked to explain, he said, "I did not actually swear". The generous king said: "Vous avez mi juroté"—"You took only a partial oath. Of course, at your age, one only does things by halves."
348 It is difficult. I should like to take matters seriatim for the convenience of the Committee and, if I may humbly say so, for the convenience of the Chair. We start with alcohol. I have had a note from the Licensed Victuallers' Association asking me to support resale price maintenance in respect of alcohol. I do not deny a certain interest in the subject. I rather sympathise with what Robert Burns is supposed to have said—
§ Mr. Ellis Smith (Stoke-on-Trent, South)
Say it all again. The Secretary of State has come back now.
§ Mr. Hale
A very happy meeting. I was hoping to make some generous reference to the right hon. Gentleman in his presence. Perhaps it would not be inappropiate now to put this familiar quotation to him—Ah Sin was his name And I shall not deny In regard to the same What that name might imply; But his smile it was pensive and childlike As I frequent remarked to Bill Nye Which we had a small game And Ah Sin took a hand; It was euchre. The same He did not understand, But he smiled with his feet on the table With a smile that was childlike and bland.I was interrupted by my hon. Friend, and I have for the moment lost the thread of this rather complicated argument. I was saying that I rather sympathise with the remark wrongly attributed to Robert Burns. When asked whether he would have alcohol or tea, he is supposed to have said, "If I have the first, you will make me fou. If I have the second, I shall be as dull as you".
The Licensed Victuallers' Association, however, did not answer several questions which were in my mind. I had just paid a visit to Oldham and I had found a surprising variety of scales of prices for alcoholic liquor even in the "pubs" of Oldham. It is true that the "Red Lion" has a quite different scale of prices from that of the Dorchester in London. I gather that it is not on that side of the retailing of alcohol that the Amendment falls. Hon. Members are talking about the sale of whisky and high quality spirits in bottles. This, of course, is our old friend the loss leader again.
349 I do not feel passionately about this, but I can see difficulties. Some years ago, the Member who was then my hon. Friend the Member for Hornchurch raised the whole question of tied houses in relation to this matter. Indeed, I went almost as a crusader to Oldham and said to the licensed victuallers, "I have come to save you from your vassalage." They said to me, "Will you please go away".
What will the effect be? I understand that the brewers have resale price maintenance in their tied houses and lower prices for the club premises in the backyards which they have hived off and sold to the clubs. It seems to me that the argument on this head is singularly difficult to present.
I have no desire whatever to detain the Committee in these important deliberations, but I feel that I should briefly say, in passing, that I have had representations from the Commercial Travellers Association. Although I have been here pretty well throughout this long debate and yesterday's debate, I have heard no reference to this point. I believe that they have a right to be considered. Their incomes are paid on commission, and if we are to have a movement to reduce prices at least we must say what we propose to do with the victims of this procedure. I put this not as a high point but as one which the Committee cannot afford lightly to dismiss.
Then we come to the difficult Amendment of the hon. Member for Putney. I have never had any desire in Committee to make verbal points. But this is rather more than a verbal point. The hon. Member refers to things "recommended as medicine", and that protects, and clearly protects, the worst type of product. I recall that in my earlier days we had a certain amount of proganda from the Left Book Club about patent medicine companies. In Tory M.P. there was reference to interests in this country. More recently, in Tribune, it was suggested that hon. Members opposite had an interest in what I will call, in deference to the fact that this is a mixed Committee, surgical goods.
These are clearly problems, but I think that the hon. Member for Putney has made out an impressive case. I do 350 not criticise his draftsmanship. We have all been in this difficulty. We all know that drafting is not easy, and it may be that the words which he has used indicate as clearly as they reasonably can in a back bench Amendment the sort of intention which he has in mind. My hon. Friend the Member for Greenock (Dr. Dickson Mabon) made a brilliant speech which was later supported by my hon. Friend the Member for Stoke-on-Trent, North (Mrs. Slater). We must get clear of the fact that we are protecting the manufacturers of Yadil or the people who tomorrow will produce purple hearts in a slightly amended form and call them restoratives. [Laughter.] Let us not be funny about this matter. This is a very serious problem of the day.
§ Sir H. Linstead
I think that the hon. Member will probably agree that in so far as there are abuses—and, on the whole, the examples which he has taken concern abuses of many years ago—they should be checked by other legislation, and that an attempt should not be made to deal with them in a Bill dealing with resale price maintenance.
§ Mr. Hale
That would probably be true if we had an efficient Government. Naturally, I should not wish to give the appearance of moving even to the circumference of the ambit of order, otherwise I might develop the point rather as the hon. Member developed it when he referred to the defects of the National Health Service and to the necessity for increased contributions, on which I should want to be satisfied by evidence and by a Departmental Committee. It is said that there are grievances. I do not fully understand them, but it is probably true. It is certainly true that this is an area in which there should be legislation, and effective legislation.
It is monstrous and frightening what could be done with patent medicines by the irresponsible companies like the A.B.C. Company, with no local interest and no local responsibility but merely with the desire to make money. I do not attack the desire to make money; I have made a little myself. But, if hon. Members refer to the Notice Paper, they will see that I have tabled a new Clause in defence of Tory principles to ensure that the mere desire to make money is not regarded as reprehensible 351 in the interpretation of the Bill when it becomes an act. That is supported by my hon. Friends on both sides of me. [Laughter.]
However, I cannot agree that this is the be-all and end-all of existence. I think that the chemists have a very strong case. Not having had any assurance from the hon. Member from Putney, I am not prepared to say what I will do in the Lobby. But, at the moment, if the hon. Gentleman moves his Amendment, I shall vote with him, subject to what may be said by the Secretary of State for Industry and Trade. I have not much hope in that direction. I do not think that he is likely to move me. If he does not, the hon. Member will move me into the Lobby in support of Amendment No. 17.
The hon. Member has virtually conceded that the other Amendments are impassable. One of them No. 14 is virtually a direct negative to the Bill. For the moment, I feel that I have neither the time nor the ability to discuss more fully the important proposed new Clause 10 entitled "Intoxicating liquors" standing in the name of the hon. Lady the Member for Manchester, Wythenshawe (Mrs. Hill), which is supported by my hon. Friends for motives on which it is likely they would have been challenged yesterday by a cavalier who did not take the field.
I disagree with reluctance with my hon. Friend the Member for Colne Valley (Mr. Duffy). It is not good enough to talk about the small shopkeeper in such terms. The small shopkeeper in Oldham is often a disabled pensioner of the last war, or a lady who has been left a widow and desires to eke our the miserable income that is being paid to her by the Government. I had a letter this morning from the National Assistance Board to say that a dear old lady whom I represented was getting £3 10s. a week and should be jolly pleased about it and could live on it. This is a question which I cannot develop more fully now, but I shall not miss an early opportunity of doing so.
These are the people who have tried to provide a little service, often in remote areas, in Oldham, in outlying areas and very often in back streets. They try to provide the limited range of goods that 352 is available. We have not dealt with the question of whether newspapers can be retailed on a basis of r.p.m. unless one is able to establish the need for the sale of newspapers in that area, which, in view of the type of newspapers today, is difficult to establish.
These shops have a range of—what? One commodity which they have is cigarettes, another chocolate. As one hon. Member has said, they must have a minimum stock. They have a very minimum profit. They have to keep also some magazines, which, as far as I am able to say, are mostly the sort of vulgar and crude American magazines which now flood the market. They have to sell what they can get. To talk about their being efficient is ludicrous. To talk about their being able to develop stocks is not quite good enough. These questions develop from geographical considerations.
In the Bay of Galway my missus sends me across the bay—I have to row two miles—to go to the local grocer to get two bottles of burgundy, six flypapers, calor gas, groceries, frozen fish, confectionery, the newspapers, and so on, because he is the only man there.
§ Mr. Hale
There have been occasions when I have gone on a favourable tide.
We are discussing a genuine human problem, and a laudable human problem. The desire of somebody who is put on one side by poverty or disablement to develop a little business is not an unlaudable desire. As for saying that these people can become efficient, I said yesterday, and I repeat myself, that there are 500 retail shops in the urban district of Chadderton, with a population of 32,000. To say that they must all become efficient is ludicrous. If they were all efficient, I would not want to go to them. One calls on them for a chat. I remember popping in at one shop to ask the test match score. I was told, "Come inside. The television is on. You can see the next over." I went in. That is the sort of service I like.
I rise only to say, with my accustomed brevity, that I support Amendment No. 17. Subject to a little doubt about the words…recommended as medicine…353 which may be dealt with on Report, I think that this is a desirable and proper Amendment.
The pharmacists have had a raw deal. They are subject to very heavy expenditure. They must have very special qualifications and it would be much against the public interest if these mass stores could retail any sort of drug. We are told that drugs can only be sold on prescription, but at inquest after inquest we are told that chlorodyne contains almost all the damaging effects of many scheduled drugs and can be obtained in chemists' shops. Under the law as it stands the chemist must supply it. Indeed he must stock virtually everything that a doctor, who is often submitted to very intensive advertising pressure, may wish to prescribe.
I have said that I was moved almost to tears at one time during yesterday's debate. The whole position was expressed in a poem by R. K. Munkittrick. He calls it "Unsatisfied Yearning".Dawn in the silent hallway Scampers the dog about And whines, and barks and scratches In order to get out. Once in the glittering starlight He straight away doth begin To set up a doleful howling In order to get in.Some of the sentiments of that poem are appropriate to the procedure of this Bill on both sides of the Committee.
§ Mr. W. R. Rees-Davies (Isle of Thanet)
The task of following the hon. Member for Oldham, West (Mr. Hale), after almost every speech he makes, is very difficult. I can only comment, [...] which, for those who might not understand, is Homer's saying, "He spake the winged word." I want to recall the speech of another entertainer yesterday. We are always pleased to hear the hon. Member for Ebbw Vale (Mr. M. Foot). Certainly he told us yesterday what I profoundly believe to be true: that the purpose of the Committee was now to hear what had already been decided. I would put it even more cynically than that and say that we are here to listen to arguments which the Committee has every intention beforehand of rejecting.
I speak as one who views this matter entirely from the point of view of con- 354 sumer interest. Broadly speaking, I hold the same sort of views so eloquently and knowledgeably expounded by my hon. Friend the Member for Cleveland (Mr. Proudfoot). But I have watched these debates for some time, and it is my impression—I say this in no sense of criticism—that there has been some careful stare management opposite with regard to Amendment No. 17. I believe that right hon. and hon. Members opposite have the general intention here to create a division in our midst on this side of the Committee. Whether that be so or not, I wish to reply to a number of arguments on Amendment No. 17, because I profoundly believe that it would be singularly unfortunate if the Committee accepted it in its present form or in any other form suggested.
I listened with great care to what was said by the hon. Member for Greenock (Dr. Dickson Mabon) and the hon. Member for Blackburn (Mrs. Castle) on the subject of chemists. I recognise that the passing of the Bill will require chemists to alter the whole nature of their business, but I want to see the whole nature of that business so altered and to see chemists get back to the true nature of being pharmacists, which at present they are unable to do. The hon. Lady the Member for Blackburn was quite right when she said that there had been a reduction in the number of dispensers, those who are true pharmacists. There has been a reduction, particularly in the rural areas.
§ Mr. Rees-Davies
And in the Highlands of Scotland. The reason for the reduction is well known to those who understand the case. It is that the money in being a chemist lies not in being a chemist at all but in being a purveyor of cosmetics, of French perfumes by Dior and of a wide range of so-called pharmaceutical products of which I will give one example. It is that of Lucozade, which is manufactured at a cost of about 4½d., purveyed by the manufacturer at ls. 7d. and sold by the chemist at 2s. 10d. If the public were aware of that, is it thought that it would buy this mixture of glucose and water under a trade name?
355 I give only one example which has been the subject of a widely publicised case, but it will have been noted that in the course of these debates although precise mark-ups have been quoted, they have been mentioned by very few hon. Members. There can be no doubt—this has not been denied by the chemists in my area, every one of whom has written to me—that there will be substantial reductions in price in those very products to which my hon. Friend the Member for Putney (Sir H. Linstead) adverted, those which are not pharmaceutical products at all, but which are a whole range of cosmetics with a very large mark-up. The so-called "surgical appliances have a mark-up in some cases as much as 200 per cent. and in others of 100 per cent. It is well known to us, although for some reason we do not seem to be prepared to say so, that there will be some substantial price reductions in these products, with the result that the whole system of the trading of chemists will have to be completely altered.
Why should we not tell them so straight? I have told the secretary of my local association that this is what I believe will happen to the trade of the chemists, and that I believe that it is right that is should happen. Do we want to get these men back to pharmacy, these men who now spend half their day dispensing face powders and all that sort of muck, who have done three or even five years' training to become pharmacists in order to be able to dispense to the public the services for which they have peculiar and careful education and knowledge? I want them to get back. I want them to be able to undertake that task for which they are trained.
It is wrong in principle and morally wrong that the ladies of this country should have had to pay far too much Purchase Tax on their cosmetics for many years—that has now been reduced—and should also be denied the opportunity of far cheaper cosmetics for all of them—and good luck! But that caries with it the corollary that in another capacity we might have to pay more through the Minister of Health to the pharmacists to encourage them to go back into the Highlands and the other areas where they can dispense services, 356 often late at night or at hours of the day when they do not do so now.
I go further. In the inquiry which is taking place at the present time, and to which my hon. Friend the Member for Croydon, South (Sir R. Thompson) adverted, one of the things which my right hon. Friend the Minister of Health must inquire into is whether or not there ought to be a loaded factor of extra pay to a pharmacist in a rural or out-of-the-way area. I give this pledge to my hon. Friend the Member for Putney, that while I shall oppose him root and branch on this Amendment, in the years ahead I shall give him and whichever Government is in power all the support that I can to ensure that the proficient and qualified pharmacist is properly remunerated for his task.
But that is a long way from saying that one can amend Amendment No. 17. In the first place, I think it was conceded yesterday, and it has been pointed out today, that subsidies for medicine can cover almost anything. I was a "Gugnunc" when I was young. Everybody appears to have had some deplorable background, and in those days I had to have at least two spoonfuls of Keppler's Malt every day. My child has Ribena every day, and others have Lucozade and the like. These branded products which we pour into our stomachs are of inestimable value to us because we believe them to be so, and, because we believe that, they are useful. But they are, of course, branded products with a very healthy mark-up.
Let us not forget the manufacturer, because he is entitled to consideration. What does the manufacturer of these things say? What do Beechams, and so on, say? They say, "It is true that the public may pay far too much for some of these products, but we have a tremendous research establishment to maintain, and if the public want the best type of chemical products they have to pay one way or another to enable us to run those research establishments which can carry into effect the research necessary in other fields".
Just as I say that chemists ought to be paid the proper price for their services, so I say that it is not right to try to get a large mark-up on the manufacturers' price in respect of these branded products to subsidise research. 357 If we want research into, for example, cancer, let us carry that burden where it properly belongs. That is why I am against the Amendment.
Furthermore, in any event I would much rather look at Clause 5 carefully to see whether under that Clause what I would call the genuine prescription part of medicine can go through the gateway, and if my right hon. Friend and his advisers come to the conclusion that the feeling of this Committee is that medicines on prescriptions ought to be the subject of exemption, let us not do it here. Let us make sure that when the principle adumbrated in the Bill is looked at by the judges they can see the clear intention of this type of exemption.
If the net book agreement of the publishers is exempted by the Monopolies Commission and, indeed, tobacco has been brought in for exemption, there must be a powerful argument for exempting medicine on the ground that it is beneficial to the public interest.
§ Sir H. Linstead
I have a great deal of sympathy with what my hon. Friend is saying, and I am grateful to him for his remarks, but the example that he has given of medicines is the one section of the business in respect of which r.p.m. does not apply, and even if it were able to get through the gateway it would have no effect on the turnover and the return of chemists.
§ 9.0 p.m.
§ Mr. Rees-Davies
In the case of these rather cosy types of goods it has been difficult to sustain the mark-up. In many cases the mark-up is due to the fact that the trader is used as a form of advertisement. Instead of advertising in the Press the manufacturers allowed the trader a very big mark-up, as a kind of douceur. I am sorry to use a French term, but thank goodness we have no English word for it. [HON. MEMBERS: "A sweetener."] It is not quite the same. There is something rather nice and naughty about the word douceur. Perhaps I can better refer to it as a mixture of douceur and pourboire. The trader is encouraged to plug the goods. Anyone who looks in a chemist's shop can see almost at a glance what he hopes to be able to sell you. It will have a 358 higher price than other goods. I should like to see the end of that system.
Now let us consider the question of wines and spirits, about which the hon. Member for Oldham, West waxed so eloquently. I understand that beer does not come into the question. The brewers have not said that they want r.p.m. It may be argued that they proceed in another way. If so, so be it. Wines cannot come in, because anyone who drinks them knows that the only class of wine which is price maintained is something like Sandeman's Port, which sells under a trade name. The ordinary run of wines depends upon the bottler. There is an infinite variety, and the licensed trade does not contend that wines should be price maintained.
As for spirits—gin, whisky and brandy—we should try to stop loss leadering. A supermarket may be able to flog whisky at 35s. for a week or two, but I do not know how long it would be able to continue after that. What the licensed trade fears is the springing up of working men's clubs, but that subject is outside the scope of the Bill. I believe that these fears are groundless and that we do not need to exclude either wines or spirits.
Leaving aside the question of confectionery, what about periodicals, newspapers, books and tobacco? They are matters which the Registrar is bound to put fairly low on his list, and things will run very much the same for a while with those products. Ultimately, if they do come up, we must remember that the Monopolies Commission has reported on the net book agreement and the tobacco trade agreement, and has found that both, on the whole, are in the public interest.
That view can be encouraged in Clause 5. They should be excluded. I want to see price maintenance for cigarettes and tobacco. One of my hon. Friends said that in recent years the distribution of tobacco had widened. If we want this wide distribution we must allow for a big mark-up, otherwise the smaller garage proprietor and the small out-of-the-way shop will not sell it. If we want to be able to obtain cigarettes and tobacco easily throughout the country—and I should have thought that that was what the public 359 wanted—price maintenance should be allowed.
Is it right to take out the manufacture of tobacco? I should have thought not. I should think that it is wrong to take out any named trade in the Bill. I stick by the principle that if it is to come out it must come out through one of the gateways determined by Parliament and through no other one. The order in which we considered them yesterday is another matter, and I hope that the order of what might be termed the "batting list" will mean that in the clear cases, where there is not likely to be protection, like the tobacconists and newsagents, the situation will continue as it is.
If we want a wide variety of magazines, it is the case—as many hon. Members will know much better than I—that a guaranteed circulation is needed. If there are 20,000 or 30,000 copies unsold the firm concerned will go broke, as the advertisement as well as the sales revenue depends on the circulation. It seems to me, therefore, that there is a strong case for arguing that almost the whole range of magazines should be price-maintained in the public interest and that there should be a steady mark-up. I hope that we shall not consider these matters in connection with this Clause at all, and that we shall reject the Amendments; but I hope that we shall take care that Clause 5 is so drafted that there will be the close examination of publications and tobacco where wide distribution is necessary and security of circulation.
I am sorry to have taken up so much time and I apologise for the lack of wit in my speech which followed witty speeches from hon. Members opposite, but I felt that these things should be said before we turn to some other aspects of the Bill.
§ Mr. Denis Howell (Birmingham, Small Heath)
We have reached the point when hon. Members are anxious to hear the speeches from the Front Benches, and I shall therefore take only a few minutes to refer to Amendment No. 17, which I consider to be important. I agree with the hon. Member for the Isle of Thanet (Mr. Rees-Davies) that the provisions in Amendment No. 14 would have a revolutionary effect on the 360 Bill. A good case can and probably has already been made to the Restrictive Practices Court about books, newspapers and tobacco. I am prepared generally to support the Bill, because I believe that the more competition which is made possible over the whole sphere of retailing, the better it will be for the consumer and the housewife. But I have to ask myself whether competition is in the public interest if applied to certain commodities. I have unhesitatingly concluded that competition is not in the public interest but is, in fact, detrimental to it if applied to drugs and dressings. The hon. Member who drafted the Amendment probably experienced some difficulty over it. I do not like the word "recommended", whatever that means.
I realise that, in discussing this, we are determining a principle in relation to drugs and medicine. Although he may not be able to accept the wording of the Amendment, I hope that the Minister will signify a general acceptance of the principle. I feel that we have failed to draw a distinction between drugs and medicines prescribed under the National Health Service and those freely available for anyone to purchase. There might not be so much difficulty about drugs and medicines prescribed by general practitioners if we had an ideal situation in which all drugs were self-prescribed and that was the only way that people could obtain them. Then none of us would be particularly worried. But that is not the situation. As a matter of fact, a very serious position is arising because some drugs may be obtained too easily, particularly by young people.
As chairman of the Birmingham Association of Youth Clubs, I know the great concern there is on this matter. Only this week I wrote to the Minister of Health giving him a list of 10 drugs freely available in Birmingham at some of the less reputable chemist shops. These drugs are positively dangerous to young people, but they can be bought by young people. We should all like to see those drugs brought under the scope of the poisons legislation, but they are not at present under that legislation. Similar types of drugs are coming forward which social workers view with very grave apprehension. The last thing which society wants is competition in the 361 sale of these drugs. We do not want a situation in which people have free access to them.
I hope we realise that we cannot deal with drugs prescribed under the National Health Service without having regard to the fact—however much people support the Health Service as I do—that these drugs can be bought outside the Service. The only way to deal with the problem would be to see that the National Health Service is fully implemented in the way we wanted it to be, with doctors and pharmacists and everyone needed available in all districts. We have to be realists and to acknowledge that that situation is still a long way off. We hope that the next Government will make much greater strides in this direction than have been made since the inception of the Health Service.
The hon. Member for Isle of Thanet said that cosmetics should not be regarded as a legitimate part of the pharmacist's income because that detracted from his true profession as a pharmacist. I quite agreed. The hon. Member said that he wanted the system to be altered, but we know that it will not be altered. He could not tell us when it would be altered, nor by whom. Much as we should like chemists' charges to be put on to a rational basis so that the genuine pharmacist did not have to resort to the sale of these ancillary items to make a living that will not happen for a long time.
As my hon. Friend the Member for Oldham, West said, we have not been presented with a very valid costings argument by the industry showing what changes there should be in this direction. I am prepared to accept from pharmacists that if they dealt only in prescriptions they would be in difficulty from the economic point of view, but there has been no evidence on that state of affairs. Before we can accept their statements we should have some detailed costings information to determine whether or not we should make a substantial increase in the charges for drugs under the National Health Service. If the pharmaceutical industry makes a case showing that it cannot make an economic living on present standards of payment for National Health Service prescriptions, the position should be 362 rectified so that pharmacists do not have to rely on ancillary services.
Most chemists nowadays must stock an extremely wide range of drugs and medicines. They do not stock on the basis of what is profitable for them to have in their shops for the public. They keep a whole range of things simply to be able to supply what any general practitioner may prescribe. In other words, they perform a public service over a very wide range. This is an additional argument which should weigh in their favour.
I return to my basic point. I have spoken of my interest in the youth service. I think that drugs and medicines are the very last thing in which we should indulge or encourage unnecessary competition. Even if the Secretary of State cannot accept the wording of the Amendment, I hope that he will indicate his sympathy with it, otherwise many of my hon. Friends and I will be forced to register our belief in the Division Lobby.
§ Sir H. Linstead
On a point of order, Sir Samuel. Could you give some guidance to the Committee about voting, should it be necessary, upon any one of the Amendments which we are discussing? We are discussing with Amendment No. 7 Amendments Nos. 14, 17 and 27 and new Clause 10. Before any question of voting arises, we shall obviously want to consider very carefully what my right hon. Friend has to say and weigh his words. If any section in the Committee thought it desirable to have a Division on Amendment No. 17, would you be kind enough to advise us at what point that Amendment would be called for Division purposes, should it become necessary?
§ Miss Jennie Lee (Cannock)
I shall detain the Committee after this long debate for only a few minutes, and on one point only. It is a point which may influence other Members as well as myself on Amendment No. 17. My dilemma is that the Government present me only with a choice of evils. Some 363 hon. Members have said that it is essential that chemists should be allowed to charge exceptionally high prices on a wide range of cosmetics and other articles because, unless they are able to do so, they will not be able to sustain their business as dispensing chemists. Other hon. Members have accepted that the serious dispensing chemist might not be able to make a living at present prices if he was confined simply to his products as a pharmacist. They have said that we must therefore see if we can increase his remuneration for his strictly chemistry goods.
I take a very poor view of that. Every time additional burdens are placed on the Health Service there is a chorus of protests from hon. Members opposite. That is why I say we are presented simply with a choice of evils. I agree with my hon. Friend the Member for Birmingham, Small Heath (Mr. Denis Howell) that the solution which should have been reached in many communities long ago is that when there is sickness in a house the father or mother, or whoever goes for a prescription, should be able to go to a doctor and get a prescription; and in the same building there should be the doctor and the chemist with dispensing facilities. We should cut out the drugs which are unnecessary and ensure that the beneficial drugs are provided at the lowest possible price. This should be done for the sake of the consumer and with a view to keeping down the charges imposed on the Health Service.
What finally decides me is this. In the last few years there have been many vast new housing schemes. The former Prime Minister made such a high priority of housing figures that he neglected not only school, hospital and other buildings but—
§ Miss Lee
I do not mean to stray any further, Sir Samuel. I was about to say that among the things which have been neglected in those vast housing areas are places where families can take doctors' prescriptions.
I come down on the side of the lesser evil, that we must sustain the small shop. The number of prescribing chemists is 364 already diminishing, and if we do not buttress the prescription service with the sale of other goods, families will have to travel further than ever, and the evils which already spring from our badly-balanced communities, especially many of those great new communities where there are not enough proper social amenities, will be worsened.
I do not see how we can ask mothers and old persons to travel further than they are now travelling in order to get to chemists' shops. That is one of the factors which will decide some of us, unless the Minister astonishes us with a brilliant solution to the problem.
§ Mr. George Darling (Sheffield, Hillsborough)
I am very pleased that my hon. Friend the Member for Cannock (Miss Lee) has made that contribution, because I agree with it and it enables me to leave out one part of my speech.
I agree with my hon. Friend the Member for Oldham, West (Mr. Hale), as I am sure most of the Committee do, that this has been a very good debate. It has given the Committee an opportunity which, for reasons I shall not go into now, we did not have yesterday, to get the principles of Clause 1 into perspective.
I do not want to go over all the arguments that have been put forward on both sides of the Committee for and against the Amendments that we are discussing, but I should like to present, if I may, a sort of summing up of our views on these Amendments. I should like, first of all, to refer to Amendments Nos. 7 and 14 and new Clause No. 10, because they go together. Between them, as we have heard, they provide a list of goods which, it is claimed, should be exempted from the terms of the Bill. Hon. Members who have spoken in support of these Amendments have offered different reasons for excluding the list of goods, but I think we should take into consideration the fact that whether the reasons are sound or not—and I personally believe that no sound reasons have been put forward for the exclusion of these goods—the effect would be that we would be asking Parliament to decide quite arbitrarily whether certain goods should be excluded from the effects of the Bill.
Taking the two Amendments and the proposed new Clause together, the list 365 is not exhaustive, although it is pretty long. There are many other goods which have not been mentioned during the debate, and which are certainly not in the Amendments, but for which perhaps equally good claims for exemption could be made—indeed, perhaps better claims. There are, for instance, mechanical goods and electrical appliances where cheapness might well lead to the manufacture of unsafe appliances in the absence of standards being laid down under the Consumer Protection Act. There are no other goods before us.
I suggest that this Committee cannot proceed on the basis of giving favourable treatment arbitrarily to one list of goods, specified for a set of reasons, while leaving out other goods which might claim exemption for another set of good reasons which we have not heard. If there were anything in the argument that Parliament, not the Court, should lay down the exemptions, I suggest that the only way open would be for this Committee to go through a complete list of goods commercially sold in this country, group by group, and decide, on some accepted criteria that have not yet been put before us as we have not yet come to Clause 5, the goods for which exemption should be given.
That is a quite impossible exercise, and cannot be done for two reasons, amongst others. First of all, we do not have the facts before us on which to base decisions, nor the criteria to guide us. Secondly, these Amendments have been put down—let us be quite frank about it—on behalf of sectional interests. If we can accept that Parliament can make a list of exemptions in response to the pleadings of sectional interests, without any guiding criteria whatsoever, the House becomes an auction for special considerations—as it is often in danger of becoming when we discuss Purchase Tax exemptions—
§ Mr. Hocking
The hon. Gentleman has just said that these Amendments have been put down on behalf of sectional interests, but the Amendment in my name was put down not with any sectional interest whatsoever in mind but merely on the guiding principle of taxation.
§ Mr. Darling
When I speak of sectional interests I am not seeking to be offensive. The fact remains that these 366 are sectional interests—sectional interests of tobacconists, chemists, and so on. I am not being offensive, but merely stating the facts.
Moreover, neither in the Bill nor in any of the Amendments is there provision—on the assumption that the Amendments are accepted—for adjusting the list as circumstances change. The list would be fixed as long as the Bill, as enacted, remained unamended, and every time we wanted to make the changes that circumstances might make necessary we would have to pass amending legislation.
On the procedure that is being laid down in this Bill, we must leave decisions on exemption to the Restrictive Practices Court, with a proper examination of the gateways in Clause 5 to make sure that we have everything in perfect order—as far as anything can be perfect under this rather imperfect Bill. We might well later find a better procedure for dealing with these restrictive practices, but we have to concern ourselves with this Bill, and even if we succeed in our efforts to improve the Bill we shall still be left with the procedure of the Restrictive Practices Court, and the registration that goes with it.
In my view, we should leave all commercial goods to be dealt with by the practice laid down in the Bill. In other words, the arguments in favour of Amendments Nos. 7 and 14 and new Clause No. 10 should be rejected. But I share the opinion of my hon. Friends that Amendment No. 17 is in a different category. I would assure the hon. Member for the Isle of Thanet (Mr. Rees-Davies), if he were present, that there has been no stage management about this. I have not discussed it with anybody. It represents my own personal conclusion from listening to the debate.
I do not want to go over all the arguments for giving prescribed drugs special treatment under the terms of the Bill for social and non-commercial reasons. Despite the views advanced by the hon. Member for Cleveland (Mr. Proudfoot), I think that the case put forward by my hon. Friends the Membes for Flint, East (Mrs. While) and Greenock (Dr. Dickson Mabon) last night and today should be accepted by the Government. Those arguments have been reinforced by further speeches today.
367 If Amendment No. 17 is going to be accepted by the Government it can only be accepted as far as its intentions go. It will have to be reworded before it is included in the Bill, for the reasons given in the debate, for we cannot accept thatany substance recommended as a medicineshould have the exemption that is being claimed for it. We cannot accept Amendment No. 27. It goes far too wide. I need not labour the point. It has already been expressed in Committee.
I would end on this note with regard to drugs. The hon. Member for Putney (Sir H. Linstead) said that there was a case, and I agree as I think do many of my hon. Friends, that there is a case for restricting the sales of certain categories of drugs to trained and professional pharmacists, but, with respect to the hon. Member, this is not the Bill in which to put that proposition. Therefore, while we think that there is a case for accepting a rewritten Amendment No. 17, and we would vote for it unless the Secretary of State can give us some assurance by covering the points we have made in some other way. I do not think that we can accept Amendment No. 27. I therefore hope that for the reasons I have given the Committee will reject the other three proposals which we have been discussing in this group.
§ Mr. Heath
This has been an important debate, as the hon. Member for Sheffield, Hillsborough (Mr. Darling) has indicated. It has been important because it has covered the question whether or not there should be specific exemptions to the procedure laid down in the Bill. It has therefore been a wide-ranging debate dealing with all the articles named in the Amendments together with a number of others.
I think that the hon. Member would agree that we have had expressed to the Committee a wide variety of views about the items mentioned and we have also been given a considerable amount of information of different kinds. At the same time, some hon. Members have drawn the attention of our colleagues to the fact that they still lack a considerable amount of information. The hon. Member for Birmingham, Small Heath (Mr. Dennis Howell) drew attention to 368 this in patricular and asked how he could make a decision on such information as he had.
This leads me to the point that some of our colleagues have been speaking as though we had to settle these questions here and now. Indeed, the hon. Member for Oldham, West (Mr. Hale) said at one point that the question with which he was faced was whether r.p.m. should stay or should go on these particular items, but, with respect, that is not the question with which we are faced tonight. This is really the answer to the hon. Lady the Member for Cannock (Miss Lee) in the dilemma she had as to which course she should follow. The question is not whether we should decide here and now whether r.p.m. stays on one of these products or goes. The question we have to decide is whether we automatically make it an exemption tonight or does it go through the normal process of the Bill, in which case all the information about the product is placed before the Court in that fullness desired by the manufacturer and it is then for the Court, with the assessors, to reach a conclusion.
§ Mr. Heath
I shall come to the details in Clause 5 in which the things which will have to be taken into account are mentioned—the quality of goods, the variety of goods available, the number of establishments in which the goods are sold by retail and any necessary services provided in connection with or after the sale of the goods, service including the size and variety of stock. All these things have to be taken into account by the Government on the information provided about them. I think that this is the answer to the hon. Lady's dilemma as to whether she has to decide now or whether all these matters can be placed before the Court, the Court reaching a decision on the information put to it. This is the procedure laid down in the Bill.
The hon. Member for Hillsborough was quite frank in his view that all these things ought to go before the Court, but he then said that, for social and economic reasons, there should be 369 a difference in respect of a limited number of goods, presumably the prescription items, handled by chemists. My hon. Friend the Member for Putney (Sir H. Linstead) pointed out that this was not what he wanted. What he wanted was what was in his Amendment, which is something very much wider than what the hon. Member for Hillsborough suggested.
In dealing with these exemptions, we come to the root decision which we have to make in formulating the structure of the Bill. How should the problem of exemptions be handled? A variety of ways was open to us. It would have been possible to do it purely by administrative means, for the President of the Board of Trade or the Government to come to a conclusion about particular items, on what criteria they liked, and to say, "We think that this is a case in respect of which r.p.m. should continue, and we will take powers for it to be swept away elsewhere". We could, perhaps, have brought these individual items before the House by order, on the affirmative or negative Resolution procedure, justifying each to the House on its merits. This would have been an administrative procedure to follow, very much akin to what happens in some other countries.
The Leader of the Liberal Party has several Amendments down, which we shall discuss later, no doubt, suggesting that these things should go individually to, I think, the Monopolies Commission, that the Commission should make a recommendation, and that the Government should then bring the matter before the House. There are several ways in which the question of exemptions could be handled.
The Government decided that the method they should adopt was to bring cases before a judicial tribunal. The criteria for the tribunal should be laid down in the Bill itself by Parliament, but, Parliament having done that, it should then be left to the judicial tribunal, with the advice of its assessors, to make an impartial judgment, according to the criteria, on each case brought before it.
There are several reasons why we took this decision. The main one was that we thought that it would be fair to all the different interests concerned. It 370 would be an absolutely fair procedure. Second, it would, therefore, command the confidence of the manufacturers of all the products that they were getting a fair judgment from a judicial tribunal commanding all the respect that such a tribunal has in this country. Third, it would give consumers confidence that the judgment had been reached according to criteria laid down by Parliament in their interest and not by a Minister backed by a majority under pressure from any particular interest or other.
Although this system may be more complicated and may take a little longer than a purely administrative system, we believe that it has those advantages in dealing with the question of exemptions. This was the reason why we came to the conclusion that it was the procedure to use. I believe that, having decided on this procedure as laid down in the Bill and having asked Parliament to give its approval to a judicial process as the basic structure of the Bill, we should then leave the decisions to the tribunal, under the criteria which we still have to settle in Clause 5, and that we should not try to make exemptions on our own judgment here in Parliament on such information as it is possible to lay before us in the course of a debate. This, therefore, is our general approach to the whole of this very important subject.
§ Mrs. Castle
If the right hon. Gentleman attaches so much importance to the adoption of a purely judicial procedure in deciding exemptions, how does he justify his acceptance of the Amendment yesterday which allows the Board of Trade to intervene, on a purely political basis, to decide the order of reference to the Court?
§ Mr. Heath
This does not affect in any way either the criteria on which the Court acts or the decisions of the Court. It was made plain yesterday—and I am sorry that I was unable to explain it to the hon. Lady yesterday—that this affects only the order in which items are brought forward by the Registrar to the Court. We have, therefore, a general position in which I believe we should leave the Court to decide the individual items on the criteria set out by Parliament.
The purpose of all the Amendments which we have been discussing is to obtain special exemption for certain items, 371 and I should like to deal with them in detail. My hon. Friend the Member for Coventry, South (Mr. Hocking) was using what I am sure he would agree was the device of taxation in order to exempt certain articles. He did not wish to over-emphasise his case, and he said that a number of those affected by his Amendment would not make any use of it. He suggested, for example, that neither the small producers nor, he thought, probably the large producers of spirits would want to make any use of it. The one group which he thought might take advantage of it would be those in tobacco. I think that that was the group in which he was particularly interested.
On the other hand, my hon. Friend the Member for Nottingham, South (Mr. W. Clark), who also said that it was a device, was particularly interested in whisky. He emphasised that he thought that those producing this excellent product were acting as tax gatherers and that this entitled them to special consideration. But my hon. Friend will realise that every wholesaler is a gatherer of Purchase Tax and that wholesalers might equally feel that they were entitled to special consideration as a form of, as they would gladly say, unpaid tax gatherers on behalf of the Government.
My hon. Friend mentioned the Danish example. It may well be that those who have followed this Amendment carefully think that the Danish example might be followed. But, as my hon. Friend hinted, there are particular circumstances about the Danish example. The level of the tax in Denmark varies with the level of the retail price. This means that when prices are reduced the Government begin to lose their revenue. The Government therefore have an interest in having a fixed price which maintains a fixed revenue. That is why the Danish Government have adopted resale price maintenance in respect of some of these items. At the same time, I understand that they are under considerable pressure to remove resale price maintenance even on these items.
My hon. Friend the Member for Bristol, West (Mr. Robert Cooke) mentioned the problem of off-licences. There is no doubt that the holders of them are in a particular position because they 372 are tenants. They are not in the same independent position as the ordinary shopkeeper. I should have thought that if resale price maintenance were to be removed from these products the brewers would undoubtedly have to consider the arrangements with the tenants about particular items because of the competition which, as my hon. Friend rightly pointed out, will ensue. But, naturally, brewers have very great investments in the houses themselves, and I should have thought therefore that there was a common interest between them to find a solution.
May I remark on what would be the effect of accepting this Amendment. First, it excludes from Clause 1 items covered by the 60 per cent. arrangement. On the other hand, it does not exclude them from Clause 2. Therefore, it would not be possible to enforce the arrangement in any way. In my view, the rate of duty has no direct relationship to resale price maintenance. I do not think that my hon. Friends have endeavoured to prove that it has a particular relationship.
However, this proposal would have very arbitrary results. Spirits would be exempted, but beer would not, and, as my hon. Friend pointed out, neither would wine. On the other hand, whether petrol, matches, lighters or scents were exempt would depend entirely upon their price. This, therefore, makes an arbitrary group to exclude from the Bill. The duties on these items are specific duties and, therefore, the ad valorem amount of 60 per cent. or whatever other percentages is fixed depends upon the prices. It has the odd effect that the lower the price, the higher the ad valorem and, thus, exempted goods. That, too, was a result which my hon. Friends would not particularly want.
Finally, as has been pointed out, the changes in duties can quite fortuitously affect whether a product is covered by resale price maintenance. I hope, therefore, that my hon. Friends will agree that even as a device, this is not a satisfactory one and that they will not wish to press the suggestion. I hope, moreover, that they agree with my general premise that the items should be decided by the Court on the basis of the information if those producing the products so wish.
373 The next group of items was brought forward by my hon. and learned Friend the Member for Hove (Mr. Marlowe) and it was a very wide group. My hon. and learned Friend emphasised the position of the small shopkeeper. Coming, like my hon. Friend, from a seaside town myself, although not so large or distinguished—indeed, perhaps, a small one—I recognise the problems of that type with small shopkeepers.
During that debate, we had a most interesting discussion, lively and stimulating from my hon. Friend the Member for Cleveland (Mr. Proudfoot) and informed, as usual, from the hon. Member for Grimsby (Mr. Crosland), about the small shopkeeper and the approach to him. There was also the interesting letter in The Times yesterday from a rural shopkeeper pointing out how much he wanted to have resale price maintenance removed to allow him to compete and to build up, as he said, a very good business. There are all these aspects of the problem of the small shopkeeper.
The Amendment of my hon. and learned Friend would have wide-ranging implications. The items seem to be fairly arbitrarily selected. It would ensure the retention of resale price maintenance over a substantial proportion of those items which have it now, because it deals not only with certain items mentioned in the Amendment. It also covers those normally sold by the institutions mentioned in the Amendment and it covers all goods manufactured by people who supply these establishments. This, therefore, is a wide-ranging Amendment and would remove a large part of all these products from the scope of the Bill. I hope, therefore, that my hon. and learned Friend, who put forward very powerfully the reasons for helping the small shopkeeper, will recognise that the Amendment goes much wider than he intended and that there are other ways, which have been discussed today, in which the small shopkeeper can be helped.
I come next to the third and fourth Amendments, dealing with the supply of items for chemists. Again, we have had an interesting discussion. Some of the points were put forward last night by the hon. Lady the Member for Flint, East (Mrs. White) and this afternoon 374 by the hon. Member for Greenock (Dr. Dickson Mabon). I should like to deal with some of the individual points before coming to the general position.
First, however, there has been running through the minds of some hon. Members and of some of my hon. Friends the feeling that resale price maintenance should be kept on these products because of factors affecting safety and the health of our people. Nobody could realise more than hon. Members here the importance of safety and the health of our people, and also of chemists who minister to them.
In looking at this problem we must clearly separate questions of safety and health, which are dealt with under existing legislation affecting all these products, from questions of price through resale price maintenance. There are very important differences which we must keep clear all the time in our minds.
The hon. Member for Greenock said he wanted the Amendment because he did not want variable prices in any of these items, but, as has been pointed out, there are variable prices already in many of them, whether sold in chemists' shops or other shops. We heard examples of medicinal items sold in village shops and so on in which there are price differences and I do not believe that the public is confused in the way he suggests. Nor, in my experience, do the consumers always buy the most expensive of these items. They will, in many cases, make their own decision as to whether to buy expensive or cheaper items. I do not accept that they automatically believe that the more expensive goods are the better ones.
§ Dr. Mabon
I was trying to point out—perhaps inadequately—that the bulk of drugs—certainly 50 per cent.—are proprietary. The manufacturers themselves put them on the market. A rather unfair example was given referring to products in which prices were variable. The fact is that these are in the minority. This is the point to which the right hon. Gentleman must address himself. Many drugs used in the National Health Service are the precinct of only one firm.
§ Mr. Heath
I agree that that is so as far as the National Health Service is concerned, but I was talking about other 375 items which can be bought at shops other than chemists' shops—the same sort of things but in different brands, with the consumer able to choose between prices. This goes on at the moment and does not cause harm or damage. Nor do I believe that people are confused by it.
§ Mr. Monslow
Do we understand that the basis of this Bill is free prices so that the person next door may be able to sell at less than one is charging?
§ Mr. Heath
If resale price maintenance were to be abolished on some or all of these items then we should get different prices, but the hon. Member for Greenock believes that one should always have the same prices for particular items. I was pointing out that many items can be bought at shops other than chemists. We have had examples where prices vary. I was pointing out also that this was not necessarily a wholly bad thing and that it did not confuse the purchaser.
The hon. Member for Greenock also said that he thought that the Court was not equipped to deal with the question of drugs. I do not agree with him. The Court will have assessors and advice on the various items it deals with. Under other legislation the Court already has to deal with drugs and similar articles and there is no reason why it should not be capable of dealing with them in this case.
The hon. Member also claimed that, if resale price maintenance were abolished, these drugs would become more easily available. This, I think, is a confusion that is beginning to come about in his mind and the minds of other hon. Members. It is that if we change the present system we change also the question as to which of these articles are to be available to the public. This is a misunderstanding which tends to develop and I will deal with it in more detail in a moment, together with the question of legislation which is due.
The hon. Gentleman also mentioned voluntary price agreements under the National Health Service and said that these will be breached. They will not be breached in the least, and that, therefore, is not an argument for settling the question here tonight as to whether there 376 should be exemptions. He also claimed that r.p.m. should be maintained in order that manufacturers could do research. But research comes out of the manufacturers' price and not out of r.p.m., which is the retailers' benefit from price. [HON. MEMBERS: "Unfair."] It is not unfair. It is a question of where the manufacturer gets his return. He gets it from his price and uses it for research and manufacture. I want to deal with this point before coming to the detailed position about chemists.
I now address myself to the very important remarks of my hon. Friend the Member for Putney. He has put down two Amendments and I should like first to refer to No. 27. This is the Amendment which says that it shall not be unlawful for a supplier to withhold supplies of any drug or any substance recommended as a medicine, or any medical or surgical appliance, from a dealer who is not an authorised seller of poisons. My hon. Friend said that he wanted the manufacturer to be able to select retailers in all or any circumstances.
Clause 2 makes it absolutely plain that the manufacturer can select his outlets in all circumstances, except where he would normally do so but is refusing to do so because the man has sold below the recommended price. The whole range of choice is thus protected except in the case of price. I believe that this is sound and covers the position of all these cases as a whole. What my hon. Friend is really asking is that a dealer who is not an authorised seller of poisons shall not sell these items, which limits their sale very specifically to chemists and dispensers and pharmacists, excluding all other suppliers who may be selling these goods. It is, therefore, asking for the chemists to be put in a privileged position, and that is not justified by the circumstances of the case.
§ Sir H. Linstead
I am grateful to my right hon. Friend for giving so much time to this matter. The only reason why a chemist should be exempted is that nobody should have the right in any circumstances to withhold goods from a chemist, because a chemist must have them in stock in order to carry out his statutory duties. We are saying 377 in the Amendment that he alone, therefore, must be in a position never to have goods refused to him.
§ Mr. Heath
What we are saying is that he cannot have goods refused to him even though he may sell below the recommended price. That is what the Bill says and that is the position I want to maintain, because it means that if the chemist sells goods below the recommended price, people ought not to be able to withhold supplies from him. That is exactly the point we are trying to make in Clause 2.
§ Sir H. Linstead
This is an extremely difficult argument to maintain at the end of a long debate, but I think that my right hon. Friend is wrong. If he looks at his own Clause, he will see that goods will be withheld from a chemist who has cut prices, and we say that nobody should have the right, even in those circumstances, to withhold goods from a chemist.
§ Mr. Heath
With great respect to my hon. Friend, the whole of the discussion is exactly the reverse. What we are saying in the Bill is that if a man reduces his prices below the recommended prices, supplies must not be withheld from him. That is of great importance to my hon. Friend's chemists and that is why we have it in the Bill. It is one of the reasons. I hope that my hon. Friend will accept that that is covered and will therefore not wish to press this Amendment, and I will gladly discuss it with him separately afterwards.
§ Sir D. Glover
Will my right hon. Friend clarify the minds of many hon. Members? Does this mean that if a supplier says to somebody who is not a chemist, "I am sorry but I cannot supply you because our policy is to supply our goods only through chemists" that is a valid reason for withholding supplies from people who are not chemists?
§ Mr. Heath
Yes. The manufacturer or supplier has the right to decide the outlets which he will use in all the circumstances except that which I have mentioned, which is that he must not withhold only because a man is reducing his prices. Therefore, it gives him the right of selection. Of course, if a supplier also likes to say that there are certain chemists whom he does not wish to supply, he can do that now and would 378 still be able to do it for other reasons. He might say that he wishes to limit his outlets to a certain number in a town. It lies within his power to do that, and to go on doing that. That is part of his general freedom of choice as a supplier as to the method of outlets that he wants to have. I hope that my hon. Friend will not wish to press the Amendment, but I shall gladly discuss it with him individually.
§ It being Ten o'clock, The CHAIRMAN left the Clair to report Progress and ask leave to sit again.
§ Committee report Progress.