§ Sir Eric Fletcher
I beg to move Amendment No. 13, in page 4, line 11, after "Act" to insert:as amended by the next following subsectionI hope that it will be convenient to deal at the same time with Amendment No. 14—page 4, line 15, leave out from "Parliament" to first "operate" in line 17. Amendment No. 19—page 4, line 33, at end insert:() Section 10(1)(e)(ii) of the principal Act (which enables orders under section 16 to be made on the authority of a resolution of 132 the Commons House of Parliament) shall cease to have effect.Amendment No. 48—Clause 6, page 11, line 39, leave out "either". Amendment No. 49—Clause 6, page 11, line 44, leave out from "interest" to end of line 4 on page 12, and Amendment No. 83—Schedule 2, page 26, line 7, column 3, leave out "Section 10(2)" and insert:In section 10, in paragraph (e) of subsection (1), the word 'either' and the words from 'or (ii) not earlier than' to the end of the paragraph; and subsections (2)".The House will be aware that when the Monopolies and Restrictive Practices (Inquiry and Control) Act, 1948, was passed, Section 10 provided that the 133 powers thereby given to the Board of Trade could be exercised in two events: either in the event of the Commission's making a report that certain things were being done by the parties concerned as a result of which the public interest was being injured; or if Parliament passed a Resolution to similar effect. That provision was not changed when the Monopolies and Restrictive Practices Commission Act, 1953, was passed. When the Bill was introduced, it was thought appropriate not to take away the power of this House. Indeed, it was believed a natural corollary that the House should be asked to assert the same powers on mergers.
In Committee, as the result of an Amendment moved by the hon. Member for Southend, West (Mr. Channon), we had a debate about this matter. During that debate, I indicated that I was in favour of the Amendment provided that it were acceptable to the House of Commons. In our earlier debates, we have heard something about the relationship between the Executive and the House of Commons. I took the view that it would be inappropriate for the Executive to take the initiative in asking the House to deprive itself of powers given to it by an Act of Parliament.
At the same time, it does not seem to me to be appropriate that after the Monopolies Commission has made a report which, in effect, exonerates a certain industry, there should be a review after a minimum interval of three months by the House of Commons. That would be particularly unfortunate in the case of a merger, because where a merger is concerned it is obviously important that those concerned should know without delay where they stand and should not have to run the gauntlet of seeing whether the House of Commons passes a resolution after an interval of three months.
There is, moreover, the fact that experience has shown that since 1948 the House of Commons has not thought it convenient or desirable to pass any resolution of the kind contemplated in the 1948 Act. Therefore, it would not be doing too much violence to our constitutional arrangements if we now ask the House by a self-denying ordinance to agree to deprive itself of the powers which it has enjoyed since 1948. That is the effect of the Amendments.
§ Mr. Channon
I should like to say how astonishing it is to us on this side that after a debate in which they heard nothing of the argument the whole of the Liberal Party should have gone into the Lobby to vote against the possibility of the trade unions even being referred to the Monopolies Commission. I hope that this fact will be noted outside.
I thank the Minister without Portfolio for moving the Amendment. When we considered the matter in Committee it was the general view that these provisions under Section 10 (1,e,ii) of the 1948 Act had not proved to be needed and had never been used throughout the seventeen years during which that legislation had been in force. It was a curious provision of the 1948 Act that in certain circumstances, without an adverse report of the Commission having been made, the House of Commons might have been invited to declare certain practices to be against the public interest.
I have been refreshing my memory by reading the interesting debates which took place in Standing Committee on this topic on 15th June, 1948. The Minister without Portfolio was a distinguished member of that Committee. I have already drawn his attention to the fact that for some extraordinary reason he did not speak in those debates. I am sure that had he done so, he would have spoken words of great common sense. It is a curious thing that although during that debate the Conservative Opposition had to press this matter to a Division, this is one of the few examples we have so far had in the past nine months of the Government reversing a decision which their party took at that time when it was in Government before. We argued against, and now we have been proved right. However, I do not think we want to make this a great party point.
One of the interesting things about that debate was the prophetic words of Mr. John Freeman, now the High Commissioner in India. Replying to my right hon. Friend the Member for Carlton (Sir K. Pickthorn), who asked how often he thought these powers would be used, he replied "Very seldom". How right he was, because after 17 years those powers have yet to be used at all.
I had thought of asking the Minister without Portfolio why it was not possible 135 to accept the Amendments in Committee. I thought we had drafted an admirable Amendment to cover this point. Looking back to the Committee, it would be fair to say that the Amendments we then had down were precisely the same as the Amendments the House is now being invited to consider except for one very important difference. By oversight, my hon. Friends failed to omit, when we were omitting other things, the word "either". I think that if at that time we had proposed to omit that word our Amendments would have been absolutely correct and we should not have had to take up the time of the House now.
I am sorry that the hon. Gentleman the Member for Westhoughton (Mr. J. T. Price), who has been a very regular attender throughout our debates, in Committee and again today, when he has been one of only two hon. Members on the back benches opposite who have taken the trouble to intervene in these debates, is not able to be here at the moment, because he was the only person in Committee who expressed doubts whether it would be wise for the House to remove these powers and whether or not the occasion might arise when it would be necessary for the House of Commons to have these additional powers. I do not think he was wholly convinced by me or by the more powerful arguments adduced by the Minister without Portfolio on that occasion, and I thought that perhaps he might have been going to raise the subject now; but perhaps in the interim he has been convinced of the wisdom of these arguments.
It seems to me that the conclusive thing about this small point was said by Mr. Oliver Lyttelton, as he then was, on 15th June, 1948, when he said that, if we wish to investigate a matter,It is quite wrong to set up a body to do so and give that Commission very large powers for hearing evidence and then, when that expert body has concluded that the public interest is not being damaged, ad hoc on this particular matter to get the House of Commons to set it aside. That is quite the wrong way to legislate."—[OFFICIAL REPORT, Standing Committee B, 15th June, 1945; c. 899–900.]I think that Lord Chandos was quite right on that occasion, and I am glad the Government are taking back those powers after 17 years. It is not a party point, because the Conservative Party had an 136 opportunity also, when passing monopolies legislation, to reverse this, but did not take the opportunity.
I do not think circumstances are at all likely in which it would be necessary for the House of Commons to have these additional powers. Frankly, I think they are very dangerous powers for the House to have, and I hope that my hon. Friends will agree to this Amendment. Perhaps even the Liberal Party, now that it has ventured to join the debate, will agree to the House taking away these powers, which have been in existence for 17 years but which have never been exercised. I do not think any hon. Member need fear that the House of Commons will be in any way weakened by this. In my opinion it will be the Executive, if anybody, who will be slightly weakened. The House need to feel that it is losing anything which might be useful to it in any possible circumstances.
We on this side would like to thank the hon. Gentleman for having given that assurance to the Committee and for having now brought forward this Amendment on Report.
§ 8.45 p.m.
§ Sir Eric Fletcher
I was asked why the Amendments were not accepted in Committee. The reason was that drafting points were involved and although, as the hon. Gentleman said, some of the Amendments that we are discussing with this one are in the same form as was proposed by him in Committee, this particular Amendment was not tabled then.
§ Amendment agreed to.
§ Further Amendments made: In page 4, line 15 leave out from "Parliament" to first "operate" in line 17.
In line 33 at end insert:
() Section 10 (1) (e) (ii) of the principal Act (which enables orders under section 10 to be made on the authority of a resolution of the Commons House of Parliament) shall cease to have effect.—[Sir Eric Fletcher.]
§ Mr. Darling
I beg to move, Amendment No. 20, in page 6, line 6, at the end to insert:but the Board shall not, in relation to goods or services of any class to which the report relates, exercise the power conferred by virtue of paragraph (c) above unless it appears to the Board on the facts found by the Commission as stated in the report that prices charged in the case of goods or services of that class 137 are, or have been, such as to operate, or to be expected to operate, against the public interest".The purpose of the Amendment is to clarify the circumstances in which the Government may make an order to regulate prices under subsection (3, c). We put down the Amendment to carry out an undertaking given in Committee that the Government would consider whether the price control provisions could be so amended as to meet the concern that was expressed by hon. Gentlemen opposite who felt that the Bill as drafted would enable Governments—not just the present one, but perhaps successive Government, too—to make Monopoly Commission Reports a pretext for price control, even if this was quite relevant to the Commission's actual findings.
I think that the words we have proposed carry out the undertaking that was given. They mean that we have put into the Bill in legal form the undertaking that the Government will not use this power improperly, and that any proposal made by the Government to have price supervision or price regulation can be exercised only where it is a proper remedy for a situation that is revealed by an adverse report by the Commission.
§ Mr. Peter Emery
I thank the Government for going as far as they have done in this Amendment and for carrying out at least part of the undertaking which they gave in Committee. This problem exercised the Committee to a considerable extent, and a lot of concern was expressed about it, because, as originally drafted, the Bill gave power to control prices in a very much wider form than had been envisaged by anybody who had dealt with monopolies, and in a way which could have been used improperly by the Government, if they had an ulterior motive or desire, when a specific industry had been referred to the Monopolies Commission.
It is true that the Amendment meets some o' the points that we made. It is true that there can be no price fixing by the Government unless there has been an adverse decision of the Board, and, as stated in the Amendment,that prices charged in the case of goods or services of that class are, … against the public interest.138 I am a little worried about the phrase,or to be expected to operateand I would very much like to know what the Minister has in mind by including that phrase. I find it a little strange that the Monopolies Commission would come to this sort of decision on a hypothetical situation on which you. Mr. Deputy-Speaker, would never rule. It would be very much better for the Commission to follow your example and not to rule on a hypothetical expectation. Will the Minister tell us why he thinks that this phrase is necessary?
We are still very much concerned about the way in which this price control would be carried out if it were ever necessary to use these powers. Industry is concerned about it, for the Board is given power to fix a company's prices apparently indefinitely. Is this what the Government intend? Do they not envisage a time limit to the price fixing? Surely the right hon. Gentleman cannot expect a company to continue in business if for any length of time the basis of its whole pricing policy has to be submitted to the Board of Trade? That is an attitude towards prices which cannot bring the kind of competition which we feel so necessary for the modernisation of industry.
The Amendment does not meet another point which I put—that in the fixing of prices it is not enough to refer to the publication of a list. Does the Minister envisage the publication of one list? Most industries and businesses operate on a number of prices. Some have a single fixed price, but many have a variable price scale dependent, for example, on quantity.
These points were made in Committee, and the Minister made favourable noises and gave an undertaking which he is fulfilling. But he gave no direct answer to my question, and in meeting the undertaking he has gone only part of the way. It is important that industry should be informed of what is in the Government's mind. How will the power operate, for how long, to what extent, and in what manner? If industry does not know these things, then it does not know what may be involved. It is the Government's duty to state the position quite clearly. This is the only place on Report to do so, because it is tied up with the Amendment.
139 If we are given favourable answers by the Minister to my questions, we shall not want to do other than welcome the Amendment. The Minister may say that it is impossible to outline in the Bill an exact answer to my questions because a variable factor is involved. It might be a useful addition as a Schedule listing the methods of operation which the Government intend to use if they decide to take action under the Amendment. We are very concerned about the matter, and I ask the Minister, not only for my sake but for the sake of a considerable part of industry, to answer the questions which I have put to him.
This concession does not go all the way. What we wished, as I understand it, was that the Board should not have the power to fix prices unless the Commission so recommended it—that is to say, unless the Commission were satisfied that there was no other way of dealing with the market domination—and only then should the Board of Trade be empowered to fix prices. This is a power of last resort. As I understand it, all that has happened now by this Amendment is that the Board is to retain the power to fix prices, even though the Commission does not so recommend. The Commission may find that the prices charged have been operating or may be expected to operate, against the public interest, but may in fact recommend quite a different remedy and propose a divesting decree or a hiving off operation, or something quite different, and yet, even though the Commission has done that the Board of Trade can ignore that remedy and propose the remedy of price fixing.
This does not go as far as we would like. We would like the Board's power to depend upon a recommendation of price fixing by the Commission. I do not rule out the possibility that the Commission may so recommend, and in some cases I believe it has so recommended. However, it is a matter of last resort. I do not believe either side of the House wants to see a monoply so frozen that the power of price fixing is all that can be done, and it seems to me that in such an extreme and absolute situation it should be done only when the Commission finds there is no other way. However, as this Amendment stands, the Board of Trade is entitled to take that extreme view, even though 140 the Commission has recommended some other remedy. This goes, not half-way but only a quarter of the way and, although it is better than nothing, it is not very much.
§ Mr. Darling
In regard to the point of the hon. and learned Member for Darwen (Mr. Fletcher-Cooke) about these additional words to the Bill not going as far as he would wish, it is perhaps a hypothetical situation: but the point we had in mind is where the Commission reports adversely about price fixing arrangements by the industry that it has examined, but leaves it to the Board of Trade to find the remedy. This may not happen. What we have tried to cover is that circumstance which may arise.
§ Mr. Peter Emery
It would be most helpful if the Minister of State could clear up this point. Is he saying that on the whole the Board of Trade would not use its pricing control powers unless in its adverse report the Monopolies Commission had referred to the pricing section? It would be quite possible to have an adverse report from the Monopolies Commission without a reference on prices, and therefore the Board of Trade would only operate if there was a mention of the pricing position.
§ Mr. Darling
I am sure that would be the situation. The hon. Member for Reading (Mr. Peter Emery) will see the wordsunless it appears to the Board on the facts found by the Commission as stated in the report that prices charged …It is perfectly clear from that that it is an adverse report on prices which is referred to. Now that these words are to be put into the Bill, it is only in these circumstances that the Board of Trade would act. There is the slightly hypothetical case where the Commission does not recommend the remedy but where, the Commission having made this kind of adverse report, the remedy must be found by the Board of Trade.
It also covers, on its wording, a state of affairs where the Commission has made an adverse report on prices but has also recommended a remedy other than price fixing.
§ 9.0 p.m.
§ Mr. Darling
Yes, but it has been implicit in monopolies legislation since 1948 141 that the action to be taken to remedy the mischiefs which have been found by the Commission must be approved by the Board of Trade. In this case, because Orders must be laid, it must be approved by Parliament. This gives an opportunity, after hon. Members have read the report of the Commission, to decide whether the Government are taking the right action. This is the situation. I think that the hon. and learned Gentleman will agree on reflection that we had to cover all the circumstances which might arise from an adverse report by the Commission.
The hon. Member for Reading (Mr. Peter Emery) asked whether the power to control or regulate prices or to ask that price lists be issued will be exercised for all time. As subsection (1) clearly states, the purpose of the control is to remedy mischiefs which have come to light as a result of the Commission's recommendations. On studying past reports from the Commission, we realised that some action might have to be taken in the future on prices, if past experience was any guide. As soon as the mischiefs have disappeared—if other arrangements can be made; if there is some divesting of monopoly power to get greater competition in the industry; whatever may happen which renders it necessary that the powers should be put on one side—it is a duty on the Board of Trade in practice, whether it is written into the Measure or not, to bring the powers which it has taken to an end, because the circumstances in which the powers needed to be exercised have also come to an end. Obviously this must be left to the Board of Trade and to Parliament's review of Orders and Statutory Instruments of the Board of Trade.
On this question how the Government will exercise these powers subsection (3) says this:The Board may—(b) require a person supplying goods or services to publish a list of or otherwise notify prices with or without such further information as may be so specified or described;(c) regulate to such extent and in such circumstances as may be provided by or under the order the prices to be charged for any goods or services so specified or described.We gave a great deal of thought to those words, in the light of reports of the 142 Monopolies Commission. It is difficult—in fact, impossible—to answer the hon. Member's request to specify in detail the action which will be taken by the Government on an adverse report by the Commission. Each adverse report has to be taken on its merits. We must see what the report says. We must see if the Commission has any recommendations to offer. In the absence of specific recommendations, we must see what is the best course to be taken by the Board of Trade in presenting an order for Parliamentary approval. It is impossible to specify in detail the action which will be proposed by the Board of Trade until we see the reports from the Commission. There may be very few indeed in which price control is requested directly by the Commission, or where the outcome of the report calls for these controls. I think the cases will be very few and will be very difficult to specify.
§ Mr. John Hall
Would the hon. Gentleman say whether it would be possible under this legislation for the Board of Trade to lay down the prices charged by a particular industry and to say that that industry shall not be entitled to increase the prices of that range of goods without the authority of the Board of Trade? I believe this is the practice under the French system.
§ Mr. Darling
I think it would be possible, but obviously if the Board of Trade is going to act on the Monopoly Commission's Report we have got to wait until we have seen the Report before we can answer a question like that. It depends upon what the Report indicates, or suggests, or recommends. But offhand, I would say that the answer to the question is "Yes".
§ Mr. Hall-Davis
As I am sure the Minister of State will remember, I spoke at considerable length in Standing Committee. Therefore, I do not wish to detain the House this evening. However, I should like to emphasise a point made by my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) about this being an action of last resort.
This Amendment has gone half way towards meeting what was said in Committee. It was said that this was certainly the least acceptable remedy in cases 143 where mischief is occurring. What disturbs us is that there is no responsibility laid on the Board of Trade not to allow this state of affairs to continue indefinitely as an acceptable solution. We would all be happier if there were some reference to the fact that this action should be taken pending other and more acceptable solutions.
While the Amendment accepts the argument put forward in Committee that price regulation is, on the whole, an unsatisfactory state of affairs in a mixed economy, it does not suggest that it is incumbent upon the Board of Trade actively to pursue means of creating circumstances in which it can be terminated. I would feel much happier if something could be written into the Bill, possibly in another place, making it clear that not only should this course be adopted only after a recommendation by the Commission, but that it should be adopted preferably as an interim measure and that every attempt should be made to take some other step so that this does not become a permanent situation. It is very easy, through inertia, for this situation to continue.
§ Mr. Darling
To answer the point briefly, we considered this matter very fully indeed and, frankly, we could not find any way within the terms of the Bill of laying an obligation on the Board of Trade within a certain period of time to bring to an end the price fixing control, which is a control of last resort.
If the hon. Member will look at past Reports of the Monopolies Commission where the prices issue was raised, he will find that the prices issue was not raised in isolation from other remedies and suggestions. I would think that in practice other remedies would be associated with this. If that is so, the price control would operate only as long as the prices mischief continued.
I agree that this is rather a negative way of doing things, and if it could be an interim measure so much the better. But I think the hon. Gentleman will find in practice that the prices proposals or recommendations or adverse reports, whatever it may be, are not isolated. They are usually associated with other remedies as well.
§ Amendment agreed to.144
§ Mr. Deputy-Speaker (Sir Samuel Storey)
The next Amendment is No. 21, in page 6, line 15, after "may", insert "by order", and we can discuss with it Amendment No. 22, in line 15, leave out "provide" and insert "prepare a scheme", Amendment No. 24, in line 31, leave out "for all such" and insert:whenever the Board shall so provide, the Board shall publish a scheme making provision for such of the following".Amendment No. 25, in line 22, leave out "including" and insert "namely", and Amendment No. 72,