HC Deb 25 March 1964 vol 692 cc590-616

Again considered in Committee.

The Chairman

The hon. Member for Dunbartonshire, East (Mr. Bence) was raising a point of order.

Mr. Bence

Further to that point of order, Sir William, I raised it because I was in some considerable trepidation at the thought that you had forgotten that I was addressing the Committee. I hesitated to rise before, because the hon. Member for Ormskirk (Sir D. Glover) had threatened to cut off my water.

Sir D. Glover

I apologise if any of the beautiful, pure streams of Scotland are thought to be in any way affected by anything that I have said in this Committee.

The Chairman

Order. The hon. Member for Dunbartonshire, East has the Floor.

Mr. Bence

I did not know whether the hon. Member was trying to destroy my argument. His intervention was of considerable length. I was saying that a manufacturer or supplier was compelled to supply a customer in his area, or, if he refused to do so, had to justify his action on other grounds than that the customer was breaking a resale price contract.

A manufacturer can find all sorts of reasons why he should not supply a retailer or wholesaler. I do not wish to name companies or products, but I know of two famous firms whose products have been marketed for over a century and have never been supplied to any distributors or retailers. Through their own marketing organisations the firms market their products direct to the consumers, whether they be shopkeepers, housewives or large industrial engineering plants.

The main reason why they have always been able to sell direct is that in every city and town in Great Britain they have established service stations where their machines can be serviced by expert mechanics trained by themselves. They regard the service behind the product as a very important factor in their business. They are selling the service with the machine. According to the Clause I understand that they will be compelled—

Mr. H. Lever

No—they will not be affected.

Mr. Bence

They will not be affected. In that case we have two manufacturing institutions which completely escape the Bill's provisions. They have this vertical structure, from the manufacturer straight to the customer. I take it that, under the provisions in Clause 2, a manufacturer could withhold supplies for any reason under the sun, with the exception of those applying to resale price maintenance.

I can think of dozens of products manufactured and distributed in this country which have to be kept under certain conditions in a shop or warehouse. They include engineering products and delicate instruments. Many consumer goods must be displayed under hygienic conditions. A manufacturer whose product is well known and advertised will require his distributors to have a knowledge of the product and be able to render an after-sales service. I can imagine that a company would be justified in arguing that a certain distributor was not adequately equipped to deal with its product.

Motor companies do not appoint main agents unless those agents possess a certain amount of capital and equipment and employ trained staff. All sorts of conditions must be complied with before a main agent receives supplies from motor car manufacturers. If a motor car manufacturer witholds supplies from a motor agent on the grounds that the agent is insufficiently equipped, and if at the same time the agent has been cutting prices, the motor car manufacturer must prove that the reason he is withholding supplies is that the agent is not adequately equipped, and not that prices are being cut. This sort of thing will provide a paradise for the lawyers because the question of resale price maintenance will lead to a tremendous amount of litigation.

This is no far-fetched argument. It actually happens. Manufacturers withhold all sorts of products because retailers are unable to store, equip or service such products. We have heard it argued on many occasions that a consumer should have the choice of buying a product on which there is a narrow margin of mark-up because there is no after-sales service. If the customer requires an after-sales service, he can secure it by obtaining the product from a store where the price is higher because of the existence of such a service. A manufacturer is entitled to say that he requires his distributors to provide an after-sales service. I am sure that people who, for example, buy typewriters expect to be able to get the machines serviced by experts. I presume that the lack of such a service would justify a manufacturer in refusing to supply his product to a particular distributor. As I read Clause 2, a manufacturer would be entitled to do that. These are the sort of questions that I want answered.

I dislike the Clause intensely, and I shall vote against it if I am given that opportunity, as I hope will also those hon. Members opposite who have always stood for this inalienable right of the individual and a company manufacturing or distributing a product to sell it to those to whom they desire to sell it and to refuse to sell it as they choose. People are already punished heavily by law if they supply a product to somebody who should not have it. A licensee is prosecuted for supplying drink to a man who has already had too much, but here are the men in Whitehall determining that manufacturers shall supply someone who, they think, ought to be supplied but who the manufacturers, knowing his lack of capacity to service and distribute the product, thinks should not be supplied. Here is where the expert in Whitehall knows best and the trader on the spot whose money is at stake knows nothing at all. This is the worst piece of legislation I have seen in 30 years in the House of Commons.

Sir D. Glover

I should like—

Mr. Mellish

Not to be too long.

Sir D. Glover

Would the hon. Member care to rise and repeat what he said?

Mr. Mellish

I was asking the hon. Member not to take too long.

Sir D. Glover

If the hon. Member counts the number of columns in HANSARD which he and I have respectively occupied he will see that he has wasted more time.

I understand many of the worries that the hon. Member for Dunbartonshire, East (Mr. Bence) has about Clause 2 so well that I asked the Secretary of State if he would provide a new Clause making it quite clear, separately from this Clause, that each manufacturer has a complete right to decide the agencies and methods of distribution of his product for the benefit of his own company and of the nation. But I was assured by my right hon. Friend that under Clause 2 every manufacturer has the right to continue the method of distribu- tion which he has carried out in years gone by.

Mr. H. Lever

Would the hon. Member tell us whether this assurance was given to him in his private ear or whether it was said across the Floor? None of us heard such an assurance.

Sir D. Glover

If the hon. Member had listened to the debate yesterday he would have heard the Secretary of State give me an explicit assurance when I interjected on this very point of the fears expressed by the hon. Member and by the hon. Member for Dunbartonshire, East in their speeches. I still feel that it would be a good thing if there was a Clause in the Bill which made this quite clear. There is a great deal of anxiety among manufacturers, distributors and retailers as to whether their restricted franchise will be affected by the Bill.

Mr. S. Silverman

I, too, am in favour of adding any Clause to the Bill which would make anything quite clear. The Bill has none so far. Would the hon. Member say exactly what he wants to make clear in the suggested Clause?

The Chairman

Order. I should like to make clear that we should apply ourselves to the Question, That the Clause, as amended, stand part of the Bill.

10.15 p.m.

Sir D. Glover

I am just about in order in that it is under this Clause that the question arises of a manufacturer or distributor having freedom of action, with the exception of price cutting.

The hon. Member for Nelson and Colne (Mr. S. Silverman) asked me what I am worried about. I will not go into a long explanation, but his esteemed colleague the hon. Member for Dunbartonshire, East, spent the last half-hour explaining what he was worried about in that manufacturers would no longer have the right to control the distribution of their products. We have had a long debate on the Amendment of my hon. Friend the Member for Crosby (Mr. Graham Page) about the credit-worthiness of customers. Any manufacturer must have the right to decide how to distribute his products.

For a certain type of product it might be right to confine it to one distributor in a town. For a smaller product there might be three outlets, and for an even smaller product there might be ten outlets. The manufacturer or distributor must have the right to decide on his own commercial policy about the goods which he is handling. Equally, he must have the right to decide his own financial policy, because if he goes bankrupt the State will not pay his debts; he will have to pay them himself.

There is much unity in the Committee on these two points. The hon. Member for Manchester, Cheetham (Mr. H. Lever) agrees with every word which I have said on the financial side. But I want to come to a more fundamental aspect—and this is why I want a new Clause. I should like my hon. Friend to listen carefully. May I describe a case—not speaking for myself. I am a manufacturer and my policy at the moment is to supply my goods to everybody in the country who is willing to sell them. This is my position as a hypothetical manufacturer when the Bill becomes law.

When the Bill becomes law my product comes under intense price competition and price cutting, so much so that the name which I have spent 25 to 50 years building up is, it appears to me and my board of directors, rapidly disappearing down the drain. We have a board meeting and decide that in future instead of supplying every dealer in the country, we shall supply our products to a restricted franchise—one supplier, or perhaps two, for each town. We decide as the policy of the firm that not everybody wanting to buy our goods will be able to buy them but that we shall maintain the reputation of our product by selling it on a restricted franchise. On our previous unrestricted practices we are supplying our goods to a great many outlets which are cutting the price to the bone, and we decide as a matter of permanent policy—not just for six months—to alter our method of distribution.

Under the Bill I do not think that we should ever be allowed to do that. Surely if we are to write that restriction into a Statute we are removing an enormous amount of freedom from manufacturers and distributors to carry out their business in the best interests of their firm.

Mr. Jay

It is plain that under the Bill the hon. Member would not be able to do that if his reason for withholding supplies from the other retailers were that they were cutting prices. There is no question about it.

Sir D. Glover

I accept that, in the context that, basically, I am not in favour of price-fixing. On the other hand, there is a great distinction between accepting unrestricted competition and having some control over the outlets for one's goods. I should like my hon. Friend to give this serious thought. If he does not, the Bill will stratify the distributive process for all time when it becomes law, whereas in fact in a modern society distribution policy naturally changes year by year and what is good today is bad tomorrow. If under the Bill the Government are not able to knit into this the opportunity for a firm to alter its distributive processes, a stratified society will be created.

Mr. A. P. Costain (Folkestone and Hythe)

Is my hon. Friend talking about an individual firm's products, or all the products of individual firms? How would he view the matter of a subsidiary company being set up to deal with one product?

Mr. Bourne-Arton

I do not understand why my hon. Friend should assume that the Bill prevents his imaginary company from changing its sales policy and going over to a limited franchise. The Clause provides that a manufacturer must not refrain from supplying on the ground that a dealer has cut prices. This would not be the ground for the board of directors about which my hon. Friend has spoken reaching that decision. It is therefore outside the scope of the Bill.

Sir D. Glover

This means that I shall have to take up the time of the Committee for a little longer. My hon. Friend has not seen the point. I am speaking of a company producing a popular piece of merchandise whose previous practice has been to sell it unrestrictedly across the board to anybody who wants to buy it. The company discovers that, as a result of this Measure, fewer and fewer people want to stock it because its price has been cut to the bone. There is then a board meeting. The directors decide to alter their policy.

However, under this Measure they will have to go on supplying, because, if they want to withhold supplies, they must find another reason than that of price-cutting. They cannot reach their decision purely on price-cutting. They must have another reason before they can change their policy. They may want to alter their policy because a product they have built up, perhaps over 50 years, and which is held in great esteem by the nation, is losing its reputation and becoming non-acceptable and because they see their turnover gradually falling because fewer and fewer people want to stock it.

Mr. Bourne-Arton

Precisely. As a result of price cutting a new situation has arisen, and the company decides to change its policy. This is not discrimination directly against a price cutter. It is a change of commercial policy resulting from a new situation.

Sir D. Glover

The trouble with the Bill, which is very complicated—[Laughter.] Hon. Members opposite may laugh. I find this the most fascinating Bill I have studied since I entered the House.

Several Hon. Members

rose—

The Chairman

I would remind the Committee that we are not discussing the whole Bill but only the Question, That the Clause stand part of the Bill.

Sir D. Glover

I apologise, Sir William, but to clear up this matter I have been anxious to give way. I am endeavouring to make this point on Clause 2 and to show that it is a valid example which my right hon. Friend should bear in mind.

The point I am raising—and I have spent for many year in distribution, so I know what I am talking about—is a valid one. I am not in favour of r.p.m. and I believe in competition. At the same time, a person who is producing or distributing goods should be the master of his own household and I see a real danger that the Clause will cease to enable him to have that position.

My hon. Friend the Member for Darlington (Mr. Bourne-Arton) has not grasped the point. If I have sold goods to A, B, C, D, or E without any restriction and the reason I want to stop supplying them with my product is that they have been cutting prices, I shall find it difficult under the Bill to do so; yet it may be a decision of my board of directors that we should alter the policy of the company. Under the Bill we will find it almost impossible to do that.

Mr. Bourne-Arton

indicated dissent.

Sir D. Glover

We will, because each one of those dealers will say that we are cutting off their supplies because they have been price cutting.

In a Bil so complicated as this, I hope that the Secretary of State and the Attorney-General will appreciate that, speaking as a trader, I believe that what I am saying concerns a very real danger. I hope that they will have a serious look at this matter. I do not wish to delay the Committee and I hope that, on Report, my right hon. Friends will make certain that manufacturers and distributors will remain masters of their own households and will not become, as a result of the Bill, subservient to a system of which they entirely disapprove.

The Attorney-General

Perhaps I can assist the Committee. My hon. Friend the Member for Ormskirk (Sir D. Glover) has suggested that because trading conditions have altered, as a result of the Bill, a company could not change its policy. I can assure him that that is quite wrong, because if the trading conditions had changed substantially the company would be perfectly entitled to restrict the agencies through which it sold. What it could not do would be to restrict the agencies through which it sold to those who were not price-cutting. The only restriction under Clause 2(1) is that the company must not restrict the agencies to those who have not either sold or are likely to sell at a cut price.

Therefore, once a company has changed its policy, that change would be a justification for a restricted sales policy. The time at which one must look to see if that policy is being properly applied is the moment of the refusal to supply the goods and not the moment of the passing of the Bill. The Bill would not, therefore, stultify trading conditions and they would not have to remain exactly as they are at present.

Sir D. Glover

How would this be decided? Would it be decided by the Court? How does one decide whether a company has altered its policy or has refused to supply goods because of price-cutting? It seems that unless we are careful we will need to have a court case before a firm can alter its policy.

The Attorney-General

There is nothing whatever in the Bill which deals with the policy generally of a company provided it is applied equally and fairly between all the dealers and is not applied only to those who have or are likely to cut prices.

Mr. Jay

Surely the right hon. and learned Gentleman will agree that on his own statement—and I shall be surprised if we are to have no further elucidation about this—it would only be necessary for the retailer to actually cut prices and to make plain the fact that he had done so to establish his right to get the supply of goods and throw the onus of proof to the contrary on to the manufacturer. Am I not right in that assumption?

10.30 p.m.

The Attorney-General

That is quite a different point. There are two quite different problems. One, which I was not discussing and which we shall discuss under Clause 4, relates to the onus of proof and the question of the relationship between a supplier and an individual dealer who wants goods. What I was trying to deal with was the point raised by my hon. Friend, quite fairly and properly, that a company will have to go on trading in the same way in which it has always done up to the time that the Bill was passed, and that it cannot thereafter change its trading policy.

It can change its trading policy and it can say, "Trading conditions are such that instead of selling to everybody we will now sell only to one agent in the town." Provided that is the policy that it applies generally, and provided that it does not say, "We will only sell to the non-price cutters," it is entitled to pursue that policy.

Mr. H. Lever

If a trader changes his policy—and this is the crux of the whole of this Clause—he will have to face the possibility of total ruin by an action for damages for breach of statutory duty, unless he can prove to the satisfaction of the court that he was not influenced in his decision to cut off supplies or to change his policy which resulted in the cutting off of supplies, in which case he will succeed, as the Attorney-General has said. The onus of proof will be statutorily upon him.

Sir D. Glover

I find that interjection most helpful. What I am worried about is the case of the firm which has changed its policy because of price cutting and not for any other reason. If I had got a large plant with £1 million worth of machinery producing chocolate bars or something of that sort and, as a result of the play of competition, I found that most of the reputable people to whom I would like to sell ceased to stock my produce because it was no longer profitable, I should want to restrict my franchise to sell on a limited market. I should withdraw my supplies from those people because they were cutting prices.

Mr. Lever

The Attorney-General's intervention has the quality of being technically correct but practically useless to people such as those—

Mr. Ellis Smith

If I may interrupt my hon. Friend, can he explain how a thing can be technically correct if it is not practical?

Mr. Lever

If a firm is placed in the position where it might have a reasonable chance of proving all the matters that the Attorney-General has spoken about, but there is a risk that it will not succeed, and the onus of proof is upon the firm, and failure so to prove would mean the total ruin of that firm, what normally happens is that the lawyer tells the firm, "You may have a reasonable, sporting chance of proving technically correctly your assertion, but should the reasonable, sporting chance come unstuck, you will be ruined."

I am not going to make any point generally against the Bill. There is plenty of opportunity to do that later. I want to speak briefly on what I regard as one of the most obnoxious Clauses in any Bill that has ever been brought before the House of Commons while I have been a Member. The only hon. Member who has made a vigorous defence of this machinery, as far as I know, is the hon. Member for Cheadle (Mr. Shepherd). He accuses those of us who cannot stomach this Clause of being flabby and lacking in muscularity in our approach to price maintenance. The respect for justice and the rights of individuals is not flabbiness; it is a concern for those in-built principles which we in this House are especially charged to preserve and protect.

I submit, first, that one has only to read the Explanatory Memorandum about what it is sought to achieve in Clauses 1, 2 and 3 to realise that one cannot in a Bill of this kind accomplish so complex an achievement as to compel suppliers to supply and buyers to be free to buy on given terms without being unjust. The particular form of injustice to which I wish to draw attention is as follows. The remedies here are worse than if the Government had a simple straightforward enactment which made it a criminal offence to enforce price maintenance. The manufacturer would be in a better position if he were told that on pain of a fine and imprisonment he must not enforce price maintenance than he is in the precarious situation in which he is placed here. The manufacturer will inevitably and often be put in a position where it will be doubtful whether he will succeed in the civil action which can be brought against him—an action for unlimited damages. The more dishonest the man bringing the action, the more precarious will be the supplier's position.

I will not deal with the general possibilities of destroying price maintenance, but the method chosen is obnoxious to anyone who has any respect for the subtle and flexible arrangements of all kinds mentioned by hon. Members who are concerned in trade. It must not have occurred to the Secretary of State and his muscular trade supporters, like the hon. Member for Cheadle, that some manufacturers and suppliers do not like to deal with crooks.—[HON. MEMBERS: "A novel doctrine"]—It may be an eccentricity on the part of some suppliers and manufacturers, but they exist certainly in the part of the country from which I come and no doubt they are equally to be found in other parts.

Under the Clause in certain circumstances a supplier is made to deal, whether he likes it or not, on pain of an action which would ruin him or an injunction which would stigmatise him and cast him into gaol if he persisted, with a man he knows to be a crook. The man may have come out of prison just long enough ago to qualify him for the most favourable terms of undercutting the man's product for a week, within the six-months' period referred to in the Measure. I see the Minister shaking his head. Does he really say that a man with a criminal record is not entitled to use the provisions in Clause 2 to enforce supplies? Of course he is. And the supplier is obliged to deliver to him the actual—

Mr. Bourne-Arton

No. This is the point. A supplier is not obliged to supply anybody who has a criminal record if he thinks that is a good reason for withholding the supply.

Mr. Lever

But the onus of proof would be thrown on him by this muscular Clause. He would have to prove that it was not because the man had been cutting his prices that he had not supplied but because he had a criminal record. It is terrifying for a manufacturer that if he wants his just rights under the Bill, assuming that the spirit of the Bill is passed in some form, he can never exercise those just rights without being told by his lawyers that the onus of proof is on him. He stands in grave peril always of being ruined by the kind of action for damages which is created by the Bill.

Also, the idea that because one has cut prices and insisted on supplies, this should entitle one to most-favoured nation treatment is so odd and astonishing that it does not seem to me possible that it could be approved by the Committee. One would have thought that as the country gets more and more prosperous we should be less and less inclined to encourage the rat race, but it is obvious that there will always be rats even when the rat race is no longer necessary. I wonder why it is thought necessary in the Clause to exalt the price cutter and force ordinary manufacturers not merely to supply him but to give him credit on peril of being sued for damages or faced with an injunction by the Attorney-General.

It speaks volumes for the impartiality and generosity of my hon. and learned Friend the Member for Northampton (Mr. Paget) that he supposes that, if the Committee enacts this power and enables the Attorney-General to proceed by way of injunction against a supplier, nobody will dream of using it. I do not understand why the Government want such a power in the hands of the Attorney-General if he is not to use it. Perhaps the Attorney-General will explain the reason for wanting a power which he will be unable to use.

The truth is that the power is to be given to him to intimidate suppliers. When a supplier has such an injunction against him, imagine his pitiable condition. The injunction will say to him, "You shall not further withhold supplies from this man". A reference to the wording of this infamous Clause shows that it is proposed to enact that it is a withholding of supplies if the supplier in any respect fails to give the man in question the most favoured treatment of all his customers. Therefore, once an injunction is made against a firm, it will have to proceed with meticulous care to ensure that the man with whom it is at loggerheads has the best credit and other terms of dealing that any other customer has, on pain of being cast into prison, since breach of the injunction would be a contempt.

The Committee cannot possibly allow the Government to enact a Clause so unjust, so peremptory and so unnecessary even for the purpose of destroying the resale price maintenance system, as was shown by the hon. Member for Buckinghamshire, South (Mr. Ronald Bell).

Hon. Members opposite are not obliged to vote with us and cause acute embarrassment and nervous tension to the Government in order to produce the result which we all desire. Hon. Members opposite have shown that they are very concerned about this matter, and I am the last person to be in a position to lecture them on how they should fulfil their duty. But, with respect, I feel that hon. Members on both sides of the Committee who feel passionately on this Clause, quite apart from the general principles of price maintenance, ought to enforce our will on the Government by some means, be it by vote or by pressure of one Parliamentary kind or another available to us.

Mr. du Cann

I shall endeavour to answer the points which have been raised in the debate and at the same time make some general observations on this Clause.

I noted two points particularly in the speech of the right hon. Member for Battersea, North (Mr. Jay). The right hon. Gentleman said—I think I quote his words almost exactly—that he had no objection to the abrogation of the power of the supplier to force a retailer to charge higher prices than he wished. I entirely agree. That is the chief purpose of the Bill. Plainly, we agree between us that the present position is unsatisfactory, and the aim in all our discussions is to find an appropriate method to remedy the situation. The Government believe that this Bill is the appropriate method.

I very much agreed with the right hon. Gentleman also when he said that it was quite wrong that we should permit a situation to endure in which it was possible to forbid price competition by law. That is entirely right. I remember my right hon. Friend bringing the same point out in his Second Reading speech.

If we agree, as between the Government and the official Opposition, as to what we are seeking to achieve in general, the only quarrel between us is as to method. The method chosen in the Clause is well known to the Committee now, and I shall not take time by going into it, save to repeat that it seems to us to be the right method and a wise method. I shall endeavour now to illustrate the reasons for my confidence.

I take, first, a point raised by the right hon. Gentleman, by the hon. and learned Member for Northampton (Mr. Paget) and by my hon. Friend the Member for Buckinghamshire, South (Mr. Ronald Bell). My hon. Friend's speech I greatly enjoyed, as, I think, did every- one who heard it. Indeed, one hon. Gentleman opposite who followed him said that it was one of the best speeches he had heard on this subject or ever in the House of Commons. I think that it was—but, my word, I thoroughly disagreed with a great deal of what my hon. Friend had to say, and I thought that he was answered effectively by my hon. Friend the Member for Cheadle (Mr. Shepherd).

10.45 p.m.

It is suggested that the Clause means, in effect, that manufacturers must supply. In fact, it says that manufacturers must not withhold supplies, in certain conditions, which is a very different thing. The only purpose of the limited curtailment in the Bill of the supplier's right to sell his goods to whom he chooses, upon which my hon. Friend rightly sets great store, is to preserve the dealer's right to sell his goods at the prices he chooses. I suggest that that is a right of which the dealer has been deprived for far too long. It is that right which we seek to restore and I suggest that it is equally, if not more, important.

I am sorry that I did not hear the whole of the speech of the hon. Member for Dunbartonshire, East (Mr. Bence), who raised the question of a supplier to a motor agent or dealer. Under the Clause as written, a supplier to a motor agent can withhold supplies, assuming that the motor agent is not price-cutting, on the ground that the dealer is unqualified in some way. I do not think that there would be much difficulty in proving it. The hon. Member mentioned that category and also typewriters. In the circumstances which he described, precisely the same would obtain.

The hon. Member went on to ask whether the Bill was virtually a lawyer's benefit. That is not the view that we take of it, particularly in the circumstances retailed by the hon. Member. We think that proof in these cases would be a simple matter. That, again, is the answer to another point raised by the right hon. Member for Battersea, North.

I understand the kindness of my hon. Friend the Member for Bath (Sir J. Pitman) in not taking the time of the Committee to move Amendments. It is slightly ironic that he did not do so, because I was ready to accept the first completely and the second in principle. Now that my hon. Friend has made his points, I do not, on this Motion, know what to reply to him, except to say that if he will be good enough to put down Amendment 23 again on Report, and assuming that there are no mistakes in transmission, we shall certainly consider accepting it. As to Amendment 21, we will put down an Amendment to cover the point.

My hon. Friend the Member for Buckinghamshire, South asked why we should not repeal Section 25 of the 1956 Act to abolish resale price maintenance and said that it could be done as simply as that. That, too, was answered by my hon. Friend the Member for Cheadle. The chief reason why Section 25 remains is for exempted goods. In other cases, it disappears in effect, although the Bill does not specifically refer to Section 25. We think that it would be inconsistent explicitly with the general approach embodied in the Bill to withdraw the support of Section 25 from exempted goods. The point basically is this. Surely, it is agreed by my hon. Friend that there should be exemption procedures. Surely, exempted goods deserve protection, which would mean that Section 25 must remain.

It was the hon. Member for Sheffield, Brightside (Mr. Winterbottom) who paid tribute to my hon. Friend the Member for Buckinghamshire, South. The hon. Member, speaking from his experience, interested us all. I cannot catch sight of the hon. Member; if he is not here, I will curtail my remarks to him. I felt, as, I am sure, many hon. Members felt, that his fears were misconceived. The Bill will not mean the end of retail distribution. It will not mean an end of quality, and recommended prices can still appear.

To come to another point made by my hon. Friend the Member for Buckinghamshire, South, who certainly deployed the most powerful of all the cases made against this Clause, he said that the Clause in his opinion was unnecessary. I hope that I can convince him otherwise. Without the Clause the prohibition in Clause 1 can be evaded without any difficulty if the supplier can withhold supplies of price-cut goods, which only means the goods being sold slightly cheaper. The imposition of minimum prices is not even necessary. R.p.m. could be made effective simply by withholding goods. Therefore, I am sure that my hon. Friend will agree that, in logic, the whole purpose of the Bill would be undermined if there were no Clause 2. Many suppliers at present enforce r.p.m. not by legal action but simply by withholding supplies. Without what I shall describe again as this limited prohibition on the withholding of supplies we should not get rid of r.p.m. by this Bill.

Finally, I should say that the Government have no wish to interfere with what I may describe as ordinary trading practices, about which there has been so much discussion this afternoon and this evening. To refer again to a point made by the hon. Member for Dunbartonshire, East and the type of case he was speaking about especially, if a firm is not acceptable to a supplier for reasons other than that the firm wishes to reduce prices—for example, creditworthiness, or the fact that the manager of the firm, or the firm itself if it is a one-man band, which was mentioned, has a criminal record, he certainly must be free to use commercial judgment.

My right hon. Friend said, and said clearly, in reply to an earlier debate, that certainly we shall be very ready to take into account, both in the light of the decisions on the Amendments to the Clause and the discussions we are going to have in relation to Clause 4, the points which my hon. Friends and by hon. and right hon. Gentlemen opposite have in mind. We do not regard the Clause as perfect. We have never said we did. We do regard it, however, as an essential part of the Bill. I say to the Committee that, in our judgment, it is an integral part of the Bill, and I commend it to the Committee.

Sir D. Glover

My hon. Friend is usually very courteous, and I should very much like a reply to the point I made in my speech. Even though I say it with great humility, I know more about retailing than 95 per cent. of the people in the Committee. I have spent the whole of my working life in it. The point I made and the case I put about manufacturers changing their policy was a very valid point, and if my hon. Friend did not reply to it I shall go into the Lobby against him.

Mr. du Cann

I certainly would not wish my hon. Friend to think me guilty of discourtesy. The reason I did not reply to the points he raised particularly was very simple: I thought that my right hon. and learned Friend the Attorney-General had done so. He made two interventions at some length. If my hon. Friend the Member for Ormskirk (Sir D. Glover) feels that he still does not have the information which he wishes to

have I shall certainly see he has it, and furthermore, I will certainly see that the points which he brought to our attention—he said during his remarks he was happy we should do this—are considered by my right hon. Friend.

Question put, That the Clause, as amended, stand part of the Bill:—

The Committee divided: Ayes 218, Noes 130.

Division No. 55.] AYES [10.54 p.m.
Agnew, Sir Peter Gough, Frederick Mawby, Ray
Amery, Rt. Hon. Julian Grant-Ferris, R. Maxwell-Hyslop, R. J.
Atkins, Humphrey Green, Alan Maydon, Lt.-Cmdr. S. L. C.
Awdry, Daniel (Chippenham) Gresham Cooke, R. Mills, Stratton
Barber, Rt. Hon. Anthony Grimond, Rt. Hon. J. Miscampbell, Norman
Barlow, Sir John Gurden, Harold Montgomery, Fergus
Batsford, Brian Hall, John (Wycombe) More, Jasper (Ludlow)
Bovine, Rt. Hon. Reginald Hamilton, Michael (Wellingborough) Morgan, William
Biffen, John Harrison, Brian (Maldon) Mott-Rodclyffe, Sir Charles
Biggs-Davison, John Harrison, Col. Sir Harwood (Eye) Noble, Rt. Hon. Michael
Birch, Rt. Hon. Nigel Harvey, John (Walthamslow, E.) Nugent, Rt. Hon. Sir Richard
Bishop, Sir Patrick Hastings, Stephen Orr-Ewing, Sir Ian (Hendon, North)
Bourne-Arton, A. Hay, John Osborn, John (Hallam)
Bowen, Roderic (Cardigan) Heald, Rt. Hon. Sir Llonel Page, John (Harrow, West)
Box, Donald Heath, Rt. Hon. Edward Pannell, Norman (Kirkdale)
Boyd-Carpenter, Rt. Hon. John Hiley, Joseph Partridge, E.
Boyle, Rt. Hon. Sir Edward Hill, Mrs. Eveline (Wythenshawe) Pearson, Frank (Clitheroe)
Braine, Bernard Hobson, Rt. Hon. Sir John Peel, John
Brewis, John Hogg, Rt. Hon. Quintin Percival, Ian
Brooke, Rt. Hon. Henry Holland, Philip Peyton, John
Brown, Alan (Tottenham) Holt, Arthur Pickthorn, Sir Kenneth
Bryan, Paul Hopkins, Alan Pike, Miss Mervyn
Buck, Antony Hornby, R. P. Pitman, Sir James
Bullard, Denys Hornsby-Smith, Rt. Hon. Dame P. Pitt, Dame Edith
Campbell, Gordon Howard, Hon. G. R. (St. Ives) Pounder, Rafton
Carr, Rt. Hon. Robert (Mitcham) Hughes Hallett, Vice-Admiral John Powell, Rt. Hon. J. Enoch
Channon, H. P. G. Hughes-Young, Michael Price, David (Eastleigh)
Chataway, Christopher Hulbert, Sir Norman Price, H. A. (Lewisham, W.)
Clark, Henry (Antrim, N.) Hutchison, Michael Clark Prior, J. M. L.
Cole, Norman Iremonger, T. L. Prior-Palmer, Brig. Sir Otho
Cooke, Robert Irvine, Bryant Godman (Rye) Proudfoot, Wilfred
Cooper-Key, Sir Neill Johnson, Eric (Blackley) Quennell, Miss J. M.
Cordeaux, Lt.-Col. J. K. Johnson Smith, Geoffrey Ramsden, Rt. Hon. James
Corfield, F. V. Jones, Arthur (Northants, S.) Rawlinson, Rt. Hon. Sir Peter
Costain, A. P. Joseph, Rt. Hon. Sir Keith Redmayne, Rt. Hon. Martin
Courtney, Cdr. Anthony Kaberry, Sir Donald Rees, Hugh (Swansea, W.)
Dalkeith, Earl of Kerans, Cdr. J. S. Rees-Davies, W. R. (Isle of Thanet)
Dance, James Kershaw, Anthony Renton, Rt. Hon. David
d'Avigdor-Goldsmid, Sir Henry Kirk, Peter Ridsdale, Julian
Deedeo[...], Rt. Hon. W. F. Kitson, Timothy Rippon, Rt. Hon. Geoffrey
Digby, Simon Wingfield Langford-Holt, Sir John Roberts, Sir Peter (Heeley)
Douglas-Home, Rt. Hon. Sir Alec Leather, Sir Edwin Rodgers, John (Sevenoaks)
Drayson, G. B. Legge-Bourke, Sir Harry Roots, William
du Cann. Edward Linstead, Sir Hugh Royle, Anthony (Richmond, Surrey)
Eden, Sir John Litchfield, Capt. John Russell, Sir Ronald
Elliot Capt. Walter (Carshalton) Lloyd, Rt. Hn. Geoffrey (Sut'n C'd field) Sandys, Rt. Hon. Duncan
Emery, Peter Longbottom, Charles Scott-Hopkins, James
Emmer, Hon. Mrs. Evelyn Loveys, Walter H. Sharples, Richard
Errington, Sir Eric Lubbock, Eric Shaw, M.
Erroll, Rt. Hon. F. J. Lucas, Sir Jocelyn Shepherd, William
Farr, John Lucas-Tooth, Sir Hugh Skeet, T. H. H.
Fell, Anthony MacArthur, Ian Smith, Dudley (Br'ntf'd & Chiswick)
Finlay Gracme McLaren, Martin Smyth, Rt. Hon. Brig. Sir John
Fisher, Nigel Maclean, Sir Fitzroy (Bute & N. Ayrs) Soames, Rt. Hon. Christopher
Fraser, Rt. Hn. Hugh (Stafford & Stone) Macleod, Rt. Hn. Iain (Enfield, W.) Spearman, Sir Alexander
Fraser, Ian (Plymouth, Sutton) McMaster, Stanley R. Speir, Rupert
Freeth, Denzil Macmillan, Maurice (Halifax) Stoddart-Scott, Col. Sir Malcolm
Gammans, Lady Maitland, Sir John Studholme, Sir Henry
Gardner, Edward Marples, Rt. Hon. Ernest Summers, Sir Spencer
Gilmour, Ian (Norfolk Central) Marten, Neil Taylor, Frank (M'ch'st'r, Moss Side)
Gilmour, Sir John (East Fife) Mathew, Robert (Honiton) Teeling, Sir William
Glover, Sir Douglas Matthews, Gordon (Meriden) Temple, John M.
Glyn, Dr. Alan (Clapham) Maude, Angus (Stratford-on-Avon) Thatcher, Mrs. Margaret
Godber, Rt. Hon. J. B. Maudling, Rt. Hon. Reginald Thompson, Sir Richard (Croydon, S.)
Goodhart, Philip
Thornton-Kemsley, Sir Colin Wade, Donald Williams, Paul (Sunderland, S.)
Thorpe, Jeremy Walder, David Wilson, Geoffrey (Truro)
Tilney, John (Wavertree) Walker, Peter Wolrige-Gordon, Patrick
Touche, Rt. Hon. Sir Gordon Wall, Patrick Wood, Rt. Hon. Richard
Turner, Colin Ward, Dame Irene Woodhouse, C. M.
Turton, Rt. Hon. R. H. Watkinson, Rt. Hon. Harold Worsley, Marcus
van Straubenezee, W. R. Webster, David
Vaughan-Morgan, Rt. Hon. Sir John Whitelaw, William TELLERS FOR THE AYES:
Vosper, Rt. Hon. Dennis Williams, Dudley (Exeter) Mr. Chichester-Clark and
MR. R. W. Elliott.
NOES
Ainsley, William Hayman, F. H. Padley, W. E.
Awbery, Stan (Bristol, Central) Henderson, Rt. Hn. Arthur (Rwly Regis) Paget, R. T.
Barnett, Guy Herbison, Miss Margaret Pannell, Charles (Leeds, W.)
Beaney, Alan Hilton, A. V. Pavitt, Laurence
Bennett, J. (Glasgow, Bridgeton) Holman, Percy Peart, Frederick
Blackburn, F. Houghton, Douglas Pentland, Norman
Blyton, William Howell, Charles A. (Perry Barr) Prentice, R. E.
Bottomley, Rt. Hon. A. G. Howie, W. Price, J. T. (Westhoughton)
Bowden, Rt. Hn. H. W. (Leics, S.W.) Hughes, Emrys (S. Ayrshire) Probert, Arthur
Bowles, Frank Hughes, Hector (Aberdeen, N.) Redhead, E. C.
Braddock, Mrs. E. M. Hynd, John (Attercliffe) Rees, Merlyn (Leeds, S.)
Bray, Dr. Jeremy Irvine, A. J. (Edge Hill) Roberts, Albert (Normanton)
Brockway, A. Fenner Irving, Sydney (Dartford) Robinson, Kenneth (St. Pancras, N.)
Brown, Rt. Hon. George (Belper) Jay, Rt. Hon. Douglas Rodgers, W. T. (Stockton)
Butler, Herbert (Hackney, C.) Jenkins, Roy (Stechford) Rogers, G. H. R. (Kensington, N.)
Castle, Mrs. Barbara Johnson, Carol (Lewisham, S.) Ross, William
Cliffe, Michael Jones, Dan (Burnley) Silverman, Sydney (Nelson)
Collick, Percy Jones, Elwyn (West Ham, S.) Skeffington, Arthur
Craddock, George (Bradford, S.) Kelley, Richard Slater, Mrs. Harriet (Stoke, N.)
Cronin, John Kenyon, Clifford Slater, Joseph (Sedgefield)
Crosland, Anthony Lawson, George Small, William
Crossman, R. H. S. Lee, Frederick (Newton) Smith, Ellis (Stoke, S.)
Darling, George Lever, Harold (Cheetham) Sorensen, R. W.
Davies, Harold (Leek) Lewis, Arthur (West Ham, N.) Soskice, Rt. Hon. Sir Frank
Davies, S. O. (Merthyr) Laughlin, Charles Stones, William
Dempsey, James Mabon, Dr. J. Dickson Swain, Thomas
Diamond, John McBride, N. Symonds, J. B.
Dodds, Norman McCann, John Taverne, D.
Doig, Peter MacColl, James Thompson, Dr. Alan (Dunfermline)
Driberg, Tom MacDermot Niall Tomney, Frank
Duffy, A. E. P. (Colne Valley) Manuel, Archie Wainwright, Edwin
Edwards, Walter (Stepney) Mapp, Charles Warbey, William
Evans, Albert Mellish, R. J. Wells, William (Walsall, N.)
Fitch, Alan Mendelson, J. J. White, Mrs. Eirene
Fletcher, Eric Millan, Bruce Whitlock, William
Foot, Dingle (Ipswich) Milne, Edward Wigg, George
Foot, Michael (Ebbw Vale) Morris, Charles (Openshaw) Wilkins, W. A.
Fraser, Thomas (Hamilton) Neal, Harold Williams, W. T. (Warrington)
Ginsburg, David Noel-Baker, Francis (Swindon) Winterbottom, R. E.
Gordon Walker, Rt. Hon. P. C. Oliver, G. H. Woof, Robert
Grey, Charles O'Malley, B. K. Wyatt, Woodrow
Hale, Leslie (Oldham, W.) Oram, A. E.
Hamilton, William (West Fife) Oswald, Thomas TELLERS FOR THE NOES:
Harper, Joseph Owen, Will Dr. Broughton and Mr. Ifor Davies.
Hart, Mrs. Judith
Mr. Heath

I beg to move, That the Chairman do report Progress and ask leave to sit again. We might perhaps discuss how we should handle the next stages of the Bill. We have now had a number of long discussions on a number of Amendments put forward by my hon. Friends, and a long debate on the Question, That the Clause, as amended, stand part of the Bill. Many hon. Members will be disappointed that we have reached this late hour without achieving discussions on the "loss leader" in Clause 3, and, indeed, more detailed discussions on Clause 4, which has been of great concern to hon. Members on both sides of the Committee in the course of the day.

In the ordinary way, on an occasion like this evening's, one would expect that we would be able to go on and make further progress with Clause 3 and loss leaders. That, however, is a big subject, on which we have put forward fundamental proposals. There have been discussions in the Press and elsewhere about the nature of the Clause, and we have put down Amendments which represent a fresh approach to the subject, in an attempt to avoid some of the difficulties which are inherent in the approaches suggested so far.

I feel that in the circumstances, as we are on the eve of an Adjournment before a Recess and questions of travel are of importance to hon. Members on both sides of the Committee, and as the next debate is bound to be one not only of importance but of considerable length, embodying a whole group of Amendments which can be taken together, we should not endeavour to embark upon it at this hour.

I hope it will be for the convenience of the right hon. Gentleman and his hon. Friends, and for my right hon. and hon. Friends, if we now report Progress, and I also express the hope that when we resume, as announced by the Leader of the House this afternoon, and embark on the remaining Clauses, we shall be able to make rather more rapid progress than we have been able to make so far. I hope, therefore, that it will be convenient to the Committee if we now bring our deliberations to a conclusion.

Mr. G. Brown

This just shows that one's faith, as an Anglican, ought never really to be disregarded. One can always save a sinner if one tries hard enough. Last night I was a little cast down, because I thought that the right hon. Gentleman was beyond redemption. Clearly that was not so. He can be saved, and tonight he is proving himself—[An HON. MEMBER: "Parson Brown."]—[Laughter.] If what is reported to me as having been said is in fact what was said, it does not seem to justify that amount of hilarity. Anyway, it seems that we can now take a certain amount of humble pride in having impressed on the right hon. Gentleman last night that he should not be quite so rough and tough. He has learned his lesson and has come to us tonight in a much more humble mood.—[Interruption.]—Yes, indeed. He has now proposed that, having gone just about as far as he knows he can get, we should all go home.

I want to make it quite clear that my hon. Friends and I have not held up the Bill so far. His own hon. Friends have occupied a large part of the time, and I must remind him that it was I who came here today to get his Bill afloat, at a time when his right hon. and learned Friend the Leader of the House did not bother to come in, and when he himself was a wee bit afraid to rise. We got his Bill afloat for him. But for that we would have been discussing points of order for a long time. We helped him as far as we could.

However. I agree with him, in his new mood—the mood of today as against the mood of yesterday—that once we start on the next set of Amendments and the next Clause we shall be dealing with a very wide subject, which will take us a long time. It would be jolly inconvenient for hon. Members on both sides of the Committee to interrupt that debate. It therefore seems a natural thing to break off our discussion at this point.

As to any commitment when we come back after Easter, I want to make it quite clear that on this side of the Committee we shall conduct the debate exactly as we have done up to now. We shall discuss every point in the Bill with the attention that it demands, and we shall give it no more but no less than the attention that one would expect from a flee House of Commons. I do not want the right hon. Gentleman's Motion to be accepted with any misunderstanding about our position, but on that basis I think that the right hon. Gentleman is doing much better tonight than he did last night. I am therefore delighted tonight to second him and on behalf of my hon. and right hon. Friends to agree that we should now report Progress.

Mr. Heath

I understand the right hon. Gentleman, of course, when he says that he has entered into no commitment about the future conduct of the Bill from his side of the Committee, but I fully apreciate what he was saying when he said that he was determined to carry on conducting the proceedings on the Bill in the way that hon. and right hon. Members opposite have been doing so far, because that enables us to form our own judgment about the way the proceedings have been going.

I am grateful to the right hon. Gentlemen for his help this afternoon when he indicated to his hon. Friends that he would prefer them not to raise points of order. In this respect he was quite different from last night when he moved a Motion similar to the one we are now discussing and suggested to his hon. Friends that they should take further part in the debate. I agree with the right hon. Gentleman that we have reached a satisfactory solution and should report Progress.

Mr. Brown

I said last night that the right hon. Gentleman had joined the select band of Ministers who had obstructed their own Bill, and he is doing the same thing again. If the right hon. Gentleman wants to play it this way, very well. We will play it this way [HON. MEMBERS: "Touchy."] No, not touchy, but I want some things to be quite clear on the record. The right hon. Gentleman was laying, a speech then to which he hoped to refer at a later date when the Guillotine Motion is moved by the Patronage Secretary. I want to get one point quite clear. There has been absolutely no behaviour from this side of the Committee which could possibly justify that. There have been speeches after speeches from both sides of the Committee, and there has been as much concern on the benches opposite about the effect of the Bill as there has been on this side.

If the right hon. Gentleman wants to play it this way, we are quite prepared to stay here tonight. If he does, let us start on the next Clause. This is the absurdity of the position that the right hon. Gentleman takes up. Faced with a genuine offer from this side of the Committee, he cannot help but make a kind of party point. We have helped him far more than have his own hon. Friends. If the right hon. Gentleman is thinking, as I guess he is, and as I guess he has already arranged with the Patronage Secretary, in terms of a Guillotine Motion on Monday, 13th April, let us make it quite plain that nothing has been done on this side of the Committee to justify it. If he wants to defer the debate until the next sitting day, it is all right as far as we are concerned, but it is for the right hon. Gentleman's convenience. The Leader of the House, who so seldom troubles us with his attendance, should not enter into hiccups the moment he arrives [Laughter.] The mere mention of his right hon Friend's name caused him to hiccup. Last night all he did was to appear round the corner to see whether his right hon. Friend was in trouble; and the moment he saw that he was in trouble out he dodged. If the right hon. and learned Gentleman feels, as I do, that his right hon. Friend did not deal very well with this matter, perhaps he would like to say a word about it.

11.15 p.m.

To us it seems logical and rational to end the discussion here, but I want no threats held over our head and no misunderstandings. We, being broadly speaking in favour of the consumer, have helped a rather bad Bill to be amended and improved. We shall address ourselves to the rest of the Bill in the same spirit. The right hon. Gentleman will perhaps use the Recess to talk to some of his hon. Friends, who clearly do not see the consumer in the same way as we see him.

Mr. Heath

The right hon. Gentleman and I are both agreed that this is a suitable moment at which we should interrupt proceedings on the Bill and report Progress.

Question put and agreed to.

Committee Report Progress; to sit again Tomorrow.