Commons Sitting of 29 March 1965

Preamble
The House met at half-past Two o"clock
PRAYERS
[Mr. SPEAKER in the Chair]
DEATH OF SIR WINSTON CHURCHILL
  Message of Condolence
  Mr. Speaker: I have to acquaint the House that I have received a copy of a Resolution passed by the Legislature of the State of Wyoming expressing sorrow on the death of Sir Winston Churchill. I will have it placed in the Library, where it can be seen by hon. Members.
ORAL ANSWERS TO QUESTIONS
  MINISTRY OF HEALTH

    Epileptics (Report)
    Dr. David Kerrasked the Minister of Health what proposals he has to implement the recommendation of the Cohen Committee on the Medical Care of the Epileptic.
    The Minister of Health (Mr. Kenneth Robinson): I have reviewed developments since the Cohen Committee"s Report. Though the diagnostic and treatment facilities for epileptics have been developed, more needs to be done, and I propose to seek advice on what fresh guidance to further their active treatment and rehabilitation might be issued to hospital and local authorities.
    Dr. Kerr: In thanking my right hon. Friend for his very helpful reply, may I draw his attention to the fact that one of the greatest areas of concern is the school leaver who is labelled an epileptic? Would he consult his right hon. colleagues the Minister of Labour and the Secretary of State for Education and Science to consider ways and means of improving the employability and other opportunities of these young people?
    Mr. Robinson: I will gladly do that. The point is that hospital provision for epilepsy has largely been developed as part of the general out-patient and inpatient services, and not through the separate facilities which the Cohen Committee recommended. I am not altogether happy about the position, and it is partly on that account that I propose to seek advice.
    Mr. Wood: Is the Minister aware that one of the anxieties of the Committee was that areas existed where advice on the special problems relating to the epileptic was not available? Has there been any advance since the Committee reported in late 1950?
    Mr. Robinson: I would want notice of that particular point, but it is certainly one of the matters I am taking into account in the review I am having made.

    Disabled Persons (Motor Vehicles)
    Mr. Shepherdasked the Minister of Health how long cars adapted for disabled persons are retained before they are replaced.
    The Parliamentary Secretary to the Ministry of Health (Mr. Charles Loughlin): Normally eight years, but the period varies according to the condition of the car.
    Mr. Shepherd: Will the right hon. Gentleman bear in mind that I have one or two cases in my constituency where it appears to me that cars are being carried on to a life really beyond the practical limit? Will he see whether it is economically desirable, apart from the inconvenience to the users, that cars should go on for almost eight years, irrespective of mileage? I do not think that it is necessarily economic.
    Mr. Loughlin: There is nothing rigid about it. The hon. Gentleman will recognise that one car can be on the road for three years and in terms of mileage do twice as much as a car that is on the road for six years. Normally we expect eight years. If the hon. Gentleman has any particular problem and writes to me, I will certainly do what I can about it.
    Dr. Millerasked the Minister of Health if he will now seek to supply suitably adapted production motor cars

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    instead of the present invalid vehicles to the disabled who
    qualify.
    Mr. Spriggsasked the Minister of Health who qualify for the Ministry"s two-seater car; and if he will make a statement about the future issue of invalid cars.
    Mr. Martenasked the Minister of Health when he will complete his investigations into the question of the provision of vehicles for disabled persons; and whether he will now provide cars for those at present using Ministry tricycles.
    Mr. Hefferasked the Minister of Health when he expects that the extensions announced last July will have been fully implemented; and how soon after that he will announce his new policy on the question of vehicles for disabled drivers.
    Mr. K. Robinson: Four-seater motor cars are supplied to certain severely disabled war pensioners and to married couples where both partners are eligible for invalid tricycles or where one is eligible and the other is blind. I have no proposals at present for extending the supply of motor cars but I have undertaken to review the whole question of the provision of transport for the disabled when the recent improvements have been fully implemented. This will be in about a year"s time; I cannot forecast how long the review will take.
    Dr. Miller: While thanking my right hon. Friend for that reply, may I ask him whether he is aware that his undertaking to review the whole position will be welcomed and very well received by those who may benefit? Is he also aware that many of these vehicles which are at present supplied are rather dangerous as well as unattractive? Will he push his review as quickly as possible?
    Mr. Robinson: I am grateful for the first part of my hon. Friend"s supplementary question, but I really cannot accept the latter part in which he suggested that invalid tricycles are dangerous. They have been specially designed for the disabled driver and, if reasonably well driven and maintained, they are reliable machines.
    Mr. Spriggs: Will my right hon. Friend consider the promise made by the previous Administration some years ago that
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    they were prepared to consider the case which I put to my right hon. Friend, and about which they did nothing? Will my right hon. Friend at least give a firm undertaking that something will be done in the period to which he has referred today?
    Mr. Robinson: I have only undertaken to review the whole position of transport for the disabled. There is no doubt that the provision of motorcars in place of tricycles would involve a very considerable additional call on the resources available for the National Health Service as a whole, and we will have to balance this against other claims on those resources.
    Lord Balniel: Is the right hon. Gentleman aware that some of us find this answer rather disappointing? In this review, will the right hon. Gentleman bear in mind the desirability of providing two-seater vehicles for mothers who are crippled where there is no father in the family? Unless such vehicles are made available, it means that the child can never go out with his parent. Not only is this incredibly sad, but it impedes the mental development of the child. Will the right hon. Genleman bear this in mind in his review?
    Mr. Robinson: I will certainly bear it in mind but, as the hon. Gentleman knows, it has been considered many times by the previous Government. The provision of passenger-carrying vehicles under the National Health Service would in any event require legislation.
    Mr. Spriggsasked the Minister of Health what progress he has made in the choice of a two-seater invalid car, and if he will have a look at the maintenance arrangements generally, and in particular, those obtaining in the constituency of the honourable Member for St. Helens.
    Mr. Loughlin: On the first part of the Question I would refer my hon. Friend to my right hon. Friend"s reply on 15th February, to the right hon. Member for Monmouth (Mr. Thorneycroft). My right hon. Friend has looked at the maintenance arrangements in St. Helens and elsewhere and these appear to be working satisfactorily.
    Mr. Spriggs: When looking at the proposed new models for invalids, will my

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    hon. Friend bear in mind that a heater should be installed because of the special conditions arising from the health of these people? Will he also take into consideration my opinion about whether proper service is being given in St. Helens to those invalid carriages which need maintaining?
    Mr. Loughlin: If I may deal with the last part of the supplementary question first, about 50 patients have powered tricycles in the St. Helen"s area and are catered for by approved repairers at Liverpool, Warrington, Southport and Birkenhead. We have had no complaints at all from the locality about the failure of the service. With regard to heaters, my hon. Friend will be very pleased to know that we have just approved a type of heater for these vehicles, and we hope to get them installed very quickly.
    Mr. Molloy: In regard to the provision of cars for invalids, will my hon. Friend be prepared to examine the possibility of allowing people who qualify for an invalid carriage to use for this purpose the garage which they formerly used with their tricycle?
    Mr. Speaker: We have had a look at the provision of cars, but this question is confined to maintenance, with perhaps a heater added. This is rather different.

    Elderly People (Welfare)
    Mr. Patrick Jenkinasked the Minister of Health if he is aware of concern among those interested in the welfare of the elderly at the proliferation of voluntary organisations at national level concerned with such matters; and if he will take steps to co-ordinate their activities.
    Mr. K. Robinson: I am not aware that this matter is giving concern, but I am always ready to give these organisations any help they may wish in coordinating their work.
    Mr. Jenkin: I thank the right hon. Gentleman. Would he not agree that the existence of the National Old People"s Welfare Council, perhaps the best established today, the National Corporation for the Care of Old People, the National Benevolent Fund for the Aged, and now the National Trust for the Welfare of the Elderly, is a proliferation which
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    requires some measure of co-ordination? Would he undertake to pay heed to any representations which might be made to him on the subject?
    Mr. Robinson: I will certainly consider any representations, but I understand that all the major bodies are in touch with each other and, in various ways, with my Department, which I believe willingly gives any help it can.
    Mr. Rankin: Would my right hon. Friend agree that it was initially arranged at the establishment of the National Health Service that these bodies might be controlled and, if possible, reduced? Is it not the case that they have been tending to increase?
    Mr. Robinson: I understand that one or two bodies have been set up recently, but I have had no representations in favour of amalgamations such as was indicated in the hon. Gentleman"s supplementary question.
    Lord Balniel: This question deals with the co-ordination of the care of the elderly. Will the Minister take this opportunity to express his repugnance at the co-ordinated activities of hon. Gentlemen last week in deliberating filibustering—[Interruption.]
    Mr. Speaker: Order. How progress is supposed to be made in Questions if we do things like this I do not know.
    Sir J. Vaughan-Morgan: Reverting to the original Question, would not the Minister be the first to agree that, of the bodies named, at any rate the first two or three have entirely different functions which do not overlap, as he knows full well, and there is no risk of conflict or collision?
    Mr. Robinson: This is certainly true of the National Corporation for the Care of Old People, the National Old People"s Welfare Council, and the Women"s Voluntary Service. They all have separate functions.
    Mr. Ridsdale: In any co-ordination which may be done, will the Minister take care not to undermine the wonderful work being done by the Red Cross and the W.V.S. in caring for elderly people?
    Mr. Robinson: I certainly would not wish to undermine their work. Nor have I undertaken to do any co-ordination.

    Registration Officers
    Mr. Ogdenasked the Minister of Health what representations he has received from the National Association of Registration Officers; what reply he has sent; and if he will make a statement.
    Mr. Ennalsasked the Minister of Health what representations he has received from the National Association of Registration Officers concerning the need for the establishment of arbitration and disputes machinery in order to secure an adequate level of remuneration for registration officers.
    Mr. K. Robinson: Representatives of the Association discussed with me, four days ago, the matters raised in their petition presented to the House by the hon. Member for Leeds, North-West (Sir D. Kaberry); and I am now considering what they said. They are aware that registration officers have the same access to arbitration on disputes as local government officers.
    Mr. Ogden: Would my right hon. Friend agree that these officers have been extremely patient in waiting for this meeting and have not made the type of protest that other people with whom he has been negotiating have made recently? Therefore, would he do his best to make a decision on their representations as soon as he possibly can?
    Mr. Robinson: I will certainly consider what they have to say as quickly as possible. I do not think I have kept them waiting unduly. They came to see my predecessor as well.

    Canned Meat
    Mr. Geoffrey Lloydasked the Minister of Health what steps he is taking to educate the public in the health risks of purchasing bargain tins of canned meat.
    Mr. K. Robinson: None, Sir. I am not aware of any risk associated with bargains as such.
    Mr. Lloyd: Would the Minister agree with Professor Semple, Medical Officer of Health for Liverpool, that, however good official arrangements are, critical public opinion is important? Would he
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    encourage local authorities to make this fact known to the public?
    Mr. Robinson: As the right hon. Gentleman knows, it is an offence to sell unfit food for human consumption, whatever the price may be. Local authorities have powers to seize or detain food for sale if they think it is unfit for human consumption. I certainly encourage them to act on those powers.

    Ambulance Charges
    Mr. Peter Walkerasked the Minister of Health whether he will review payment of ambulance charges under the National Health Service.
    Mr. Ian Gilmourasked the Minister of Health whether he will make provision for ambulance charges to be covered under the National Health Service in those cases where a doctor considers it necessary for a patient to be moved from one private house to another.
    Mr. Loughlin: It is for each local health authority to decide whether provision of free ambulance transport for a particular journey falls within its duty under Section 27 of the National Health Service Act, 1946. A journey from one private house to another may or may not form part of their duty according to circumstances.
    Mr. Walker: Will the Parliamentary Secretary consider sending a directive to local authorities suggesting that where a doctor certifies that it is important for the patient to be moved from a house where there is no one to attend to that patient to a house where there is a relative, payment should be made under the National Health Service?
    Mr. Loughlin: We expect local health authorities to place the needs of the patient first. This is the paramount consideration, and we would hope that in all cases where it is necessary from a medical point of view to transfer patients from one house to another, local authorities will do the job in the interests of the patient.
    Mr. Mills: Will the Parliamentary Secretary tell us why, in the case of the use of helicopters as ambulances in the South-West, the local authority is enabled to charge for this service? Is not

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    this an operation which the Air Force could carry out as a training job and help the community at the same time?
    Mr. Loughlin: I think the hon. Gentleman is flying a bit high on this Question. If he puts a Question down I will give him an Answer.

    Prescriptions
    Dr. Summerskillasked the Minister of Health what evidence he has received of an increase or decrease in demand for prescriptions since 1st February, 1965.
    Mr. William Hamiltonasked the Minister of Health what evidence he has received on the increased demand for prescriptions following the abolition of prescription charges.
    Mr. Parkasked the Minister of Health if he will publish statistics of the changes in demand for prescriptions following the abolition of prescription charges.
    Mr. K. Robinson: It will be some time before it is possible to assess the effect of abolishing prescription charges; preliminary information suggests that the number of prescriptions dispensed in February of this year, compared with the same month in the last six years, was probably higher than in four of those years and lower than in the other two.
    Dr. Summerskill: Would my right hon. Friend not agree that, in view of that reply, it can be shown that in the winter months there usually is an increased demand for prescriptions depending on the severity of the winter and that the assumption on the part of hon. Members opposite that there would be an increase in demand even before the charge was taken off was quite unjustified?
    Mr. Robinson: I would certainly agree that there is nothing whatever in the provisional figures which have reached me so far to suggest that there have been any of the abuses by patients so confidently forecast from the benches opposite.
    Mr. Wood: Does not the information given by the right hon. Gentleman prove conclusively that talk during the election that thousands of people were being
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    kept away by what was called a "tax on the sick" was absolute rubbish?
    Mr. Robinson: As far as I know, nobody talked, and certainly I never talked, about thousands and thousands of people being kept away, but to the extent that people who were kept away have now been able to get prescriptions I am sure that all of us on both sides of the House will be pleased. In any event, we expected some increase. There is an indication of some increase, but there is no indication of any large increase or abuse.
    Mr. Hugh D. Brown: There may have been some slight increase, but would my right hon. Friend agree when all the information is to hand to provide some evidence on those cases and to analyse any increase which has taken place in respect of type of patient and even type of doctor responsible for giving the prescriptions?
    Mr. Robinson: I will gladly give such information as I can to the House, but I doubt whether it would be possible to break down the figures in quite the way that my hon. Friend would like.
    Dr. Wyndham Davies: Is the right hon. Gentleman aware that in yesterday"s Sunday Express a general practitioner in Chatham said that he gave out 255 prescriptions instead of the normal 60 on the first day of the removal of the charge and that he and many other doctors reckon that they are now being blackmailed by their patients?
    Hon. Members: Rubbish.
    Mr. Robinson: I saw the report in the Sunday Express and I gave it the attention which I thought it deserved.
    Mr. Pavitt: Is my right hon. Friend aware that the pattern of prescription charges, the economic difficulties of the Government and the pressure by general practitioners on pay are all leading to a situation where a school of thought is growing in favour of having a two-way system of not only free National Health Service at the time of the service but also for some form of payment? In the negotiations with the general practitioners, will my right hon. Friend resist any attempt to dilute the idea of a free at-the-time service to sick people?
    Mr. Robinson: I am glad to inform my hon. Friend that there is no indication that this is what the doctors wish to discuss in their charter for general practice.
    Mr. Frederic Harris: Will the right hon. Gentleman accept from me that Croydon doctors have found that the number of prescriptions have gone up by an average of 20 per cent. since the charge was taken off? Will he look into this?
    Mr. Robinson: Certainly, I will, but Croydon, as in some other matters, must be atypical, because there is no indication of anything like a 20 percent. increase.

    Immigrants
    Mr. Geoffrey Lloydasked the Minister of Health if he will introduce legislation to compel dependants of voucher holders and returning residents, at present exempted under the Commonwealth Immigrants Act, to undergo medical examination on landing.
    Mr. Kitsonasked the Minister of Health if he is satisfied with the health regulations governing immigrants from Commonwealth countries; and whether he intends to enforce stricter control.
    Mr. K. Robinson: I am sending the hon. Members particulars of new arrangements that were introduced earlier this year. I intend to study their effect before deciding whether further measures are needed.
    Mr. Lloyd: While appreciating the improvement in the arrangements, may I ask the right hon. Gentleman whether he is aware that the British Medical Association still consider that there is a gap in respect of dependants? Will the right hon Gentleman bear in mind that dependants, whom none of us would wish to exclude, would actually benefit from such a medical examination?
    Mr. Robinson: I should like to see how present arrangements are working out, because to require the medical examination of dependants would involve legislation. The right hon. Gentleman might like to know that in the first six weeks since X-ray apparatus has been established at London Airport, out of
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    150 X-ray examinations three active and two non-active cases of tuberculosis were discovered.
    Sir D. Renton: Would the right hon. Gentleman also bear in mind in his further consideration of this matter that there is strong medical evidence, which I believe has been put by the B.M.A., to the effect that healthy immigrants have been the cause of propagating disease when they have come to this country?
    Mr. Robinson: I am not sure that I know the evidence to which the right hon. and learned Gentleman refers, but I shall be glad to consider anything that he likes to put before me.
    Mr. Fisher: Is the right hon. Gentleman aware that many people feel that it would be more efficient to establish a health test in the country of origin rather than at the port of entry? If the right hon. Gentleman agrees, will it be possible for him to approve and equip medical health teams to go out to the key countries in the Commonwealth?
    Mr. Robinson: As the hon. Member knows, there is a mission going shortly to Commonwealth countries and it will be within their competence to discuss the possibility of such things. As at present advised, I do not think that it would be a very practical solution, but my mind is not closed on it.

    Infant Mortality (North-East)
    Mr. R. W. Elliottasked the Minister of Health if he is satisfied with the research facilities on infant mortality in the north-east of England; and if he will make a statement.
    Mr. Loughlin: The incidence of infant mortality in all regions of England and Wales is being studied by the Registrar-General. Local studies, both publicly and privately sponsored, are also in progress, including a special community research project at Newcastle. We welcome all efforts to add to existing knowledge in this field.
    Mr. Elliott: Is the hon. Gentleman aware that the Princess Mary Maternity Hospital, Newcastle, is 100 years old and that its research facilities are very inadequate? Is he aware that in consequence there is considerable concern

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    that there is not a maternity hospital planned in the next ten years in the teaching group of the North-East centred upon Newcastle-on-Tyne? Will he look at this question?
    Dame Irene Ward: Hear hear.
    Mr. Loughlin: I can appreciate the hon. Lady the Member for Tynmouth (Dame Irene Ward) saying "Hear hear", but we have been concerned with this for little longer than six months. We are examining it. As I indicated in my Answer, the Registrar-General is studying the causes of infant deaths in 1964 by region and according to social class, age of mothers and various other factors. We can only examine the matter as far as we possibly can. I think that we are doing what we can about it.
    Mr. Wood: In view of the very disquieting figures about deaths which his right hon. Friend gave to my hon. Friend the Member for Cheadle (Mr. Shepherd), will the hon. Gentleman undertake to take this matter very seriously indeed, and try and make as quick progress as possible?
    Mr. Loughlin: I do not know what the right hon. Gentleman means when he asks that we should take it seriously indeed. I wonder why he did not take it so seriously in the period when he was in the Government. The Registrar-General is carrying out studies in Birmingham, Bristol, and Gloucester and one is being carried out by the Welsh Board. We are taking the matter seriously and we shall be getting information. Once we have got it we will act upon it.
    Sir Knox Cunningham: What does the hon. Gentleman mean by "social class"?
    Mr. Loughlin: Obviously it is a question of social class, but if the hon. and learned Gentleman wants a different word let us talk about social strata.
    Sir Knox Cunningham: Will the hon. Gentleman explain what "social strata" means?

    Doctors (Pay)
    Mr. Freesonasked the Minister of Health if he will reconsider the pool system of payment for general practitioners and bring forward proposals for
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    developing a salaried service through the establishment of health centres by local authorities and hospital departments.
    Mr. Eldon Griffithsasked the Minister of Health if he will now make a statement on arrangements for family doctors" pay and expenses.
    Mr. George Craddockasked the Minister of Health if he will take steps to set up health centres under the National Health Service.
    Mr. K. Robinson: I expect all these matters, apart from the level of remuneration, to come into the discussions with the profession which I am to begin shortly.
    Mr. Freeson: I thank my right hon. Friend for that answer, but will he bear in mind that the policy of establishing a network of health centres throughout the country remains as vital as ever in the field of preventive medicine and that such a system would probably provide the most effective way of satisfying the demands laid down in the recently published B.M.A. charter? Will he consider issuing a circular to local authorities as soon as possible after these consultations with a view once again to encouraging the establishment of health centres throughout the country and the necessary consultations at local level between local health and welfare authorities and the general practitioner services?
    Mr. Robinson: I assure my hon. Friend that I intend that the discussions I have with the profession should cover practice premises and the use of health centres. He may be interested to know that, although only 21 new health centres have so far been set up, interest has been growing recently and I know at the moment of about 50 projects under consideration or actually in progress.
    Mr. Frederic Harris: When does the right hon. Gentleman expect these discussions with the profession actually to start, and has he any idea how long they will take? Further, would the outcome then have to be referred to the Review Body on the remuneration aspect?
    Mr. Robinson: I should not like to speculate on how long they will take. It is expected that when the terms of a new contract have been agreed, it will then be put to the Review Body for

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    pricing. I am to have a preliminary meeting with the leaders of the profession tomorrow.
    Mr. Pavitt: Will my right hon. Friend give special attention to the last part of Question No. 42 and review the possibility not only of extending health centres by local health authorities under Section 21 but the possibility of incorporating the hospital service and the hospital management committees themselves into the extension of local health centres?
    Mr. Robinson: I am prepared to discuss arty method of providing practice premises, and I should not rule this one out.
    Mr. Speaker: Mr. Braine, Question No. 43.
    Mr. Craddock: On a point of order, Mr. Speaker. I understood that my right hon. Friend was answering my Question No. 77 at the same time.
    Mr. Speaker: With respect, I do not think that the hon. Gentleman was here when I made a pronouncement the other day about late-number Questions.
    Mr. Orme: On a point of order, Mr. Speaker. In your consideration of Questions, will you take under review the number of hon. Members who have not been present today when they have been called to ask their Questions? It is exceedingly unfair.
    Mr. Speaker: I am not sure about that. I say nothing about it now because I should like to think about the implications of what the hon. Gentleman says.

    Cervical Cancer
    Mr. Braineasked the Minister of Health what further steps he is taking to expedite the provision of nationwide facilities for the routine cancer screening of women.
    Mr. K. Robinson: Good progress is being made. About 39,000 women a month are now being tested, mainly in hospital clinics, and the number will increase as more staff are trained. There are already about 200 pathologists and 150 medical laboratory technicians trained in cytology and more are undergoing training or awaiting places on the courses. Of the hospital laboratories
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    handling this work about a quarter expect to be able to support a routine screening service some time this year.
    Mr. Braine: The whole House will be very pleased to hear about what progress has been made, but is the Minister aware that about 3,500 women die every year from cancer of the cervix and the uterus, and is he further aware that many women are at risk below 35, the age at which it is proposed that screening should begin? Will he not agree, in view of the tragic toll and the obvious urgent priority here, that facilities for earlier screening, certainly for those women who apply for it, ought to be provided, and, if this means a greater allocation of resources, could he not persuade his colleagues to make them available?
    Mr. Robinson: As the hon. Gentleman knows as well as most people in the House, we regard this as a most important priority. I think that a good start has been made. At the end of last year, tests were running at an annual rate of 470,000, which is encouraging. There is some risk to women under 35 years of age, but my advisers say that this is the best minimum age at which to start routine screening. We must make a limited start, but, when we get the facilities going, we can extend them to younger women.
    Mr. Snow: Although the House will be grateful to my right hon. Friend for the advances in the service which he has been able to announce, is he aware that there is a greater preoccupation with this matter among women now arising largely from the publicity which has been given to the statistics involved and many women are beginning to worry greatly because of this publicity? Will my right hon. Friend take it that any further resources which he can make available for this project will be much appreciated?
    Mr. Robinson: I can well understand that the very considerable publicity which has been given to the service, which I personally welcome very much, may have given rise to additional anxiety on the part of some women who are in the group at risk, but I can assure my hon. Friend that we are really pressing ahead as fast as we can. The special courses for pathologists and technicians are now running at five centres and all regional

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    boards are sending people for training there. When those who have been trained go back to their own base, they themselves can embark on training in their own local hospitals.
    Mr. Dudley Smith: While I appreciate what has been done, may I ask the right hon. Gentleman to bear in mind that I have recently had a case of a woman constituent of mine who is barely 35 and had all the symptoms of cervical cancer and was told by a London teaching hospital that it would take four or five weeks before she could be screened? Will he bear in mind the tremendous agony of mind in such a case, and do all that he can to press on with his plans?
    Mr. Robinson: I will certainly bear that in mind. I do not like commenting on a particular case without notice, but I should have thought that it would have been possible somewhere in London for the woman to have got an earlier smear test analysis, particularly if she showed symptoms.
    Mr. Lubbock: Is the right hon. Gentleman aware that a far more extensive service is being provided at Orpington Hospital than is available under the National Health Service? Is he aware that not only is the service being extended to a lower age but screening will be once in three years instead of five years? Will he say that he welcomes this initiative? Also, what steps is the Ministry taking with regard to research into the electronic scanning of slides so that the number of people who need to be trained for this purpose can be kept to the minimum and the service can be introduced more rapidly?
    Mr. Robinson: We are looking very carefully into various methods of examining slides, into biochemical as well as electronic scanning, but I am advised that it will be some years before we shall know whether these methods are reliable or not. I certainly welcome the initiative in the hon. Gentleman"s constituency, about which he came to tell me.
    Lord Balniel: As the right hon. Gentleman accepts that there is very widespread concern about the matter, is he still maintaining the position that he is not prepared to increase the number of training facilities which are available for
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    cytologists? Would he perhaps look again into the number of training places available with a view to the possibility of increasing them?
    Mr. Robinson: I have looked at them, and so far as I am aware they should be quite sufficient to do the job that we want to do in a reasonable time. We have also got, as I have told the hon. Gentleman, 200 pathologists and 150 technicians trained, and 29 pathologists and 74 technicians are at the moment undergoing training in the special centres. There have been many more nominated for future courses.

    Doctors (Rural Areas)
    Mr. Eldon Griffithsasked the Minister of Health what steps he is taking to assist rural practitioners, the number of whose patients is below the average, and who live in areas that require travelling time above the average.
    Mr. K. Robinson: Special payments are already available in suitable circumstances.
    Mr. Griffiths: Is the Minister aware that in many parts of rural Suffolk a doctor may have to travel up to 10 or 12 miles, taking perhaps 40 minutes, to see a single patient? Is he aware that group practice is particularly difficult to arrange in rural areas, and that there is very strong feeling that rural practitioners are having an even more unfair deal than many of their urban colleagues?
    Mr. Robinson: There are difficulties here, but I do not think that the hon. Gentleman"s view would be shared by those urban colleagues. However, I must tell him that the rural practice payments scheme was revised as recently as July, 1963, and further revised a year later, in order to give greater benefits to the type of practices that he has described. The fund now totals £1½ million and is shared by some 5,000 doctors. I agree that group practice is not so easy to establish in rural areas, but there are doctors who have found it possible.

    Dental Treament (Charges)
    Mr. Costainasked the Minister of Health what proposals he has for the future of charges for dental treatment.
    Mr. K. Robinson: I would refer the hon. Member to my statement in the House on 17th December.
    Mr. Costain: Is the right hon. Gentleman aware that a number of patients who ought to be having dental treatment are having it delayed in the mistaken belief that they will shortly get it free? Is he aware that I have letters from dentists in my constituency who are extremely worried that the treatment will be more complicated? Will he do something to make patients realise that they will not get the treatment free in future?
    Mr. Robinson: I am very anxious indeed that dentists should not find themselves short of patients either now or when the removal of charges becomes imminent. Nothing that I have said should lead anybody to delay having dental treatment if he needs it now. He should realise that he may allow serious dental decay to develop if he does not take the opportunity of going to his dentist when he needs to do so. I will certainly see whether there are any further assurances that I need to give in order to prevent this happening.

    Chemists (Payment)
    Mr. J. E. B. Hillasked the Minister of Health whether, in view of the fact that the cancellation of prescription charges will deprive chemists of part payment at the time of dispensing, he will take steps to institute a monthly payment on account pending final pricing and settlement.
    Mr. K. Robinson: No, Sir; chemists in the National Health Service have a standing payment on account and payment in full for prescriptions dispensed during February will be made in the next 2 or 3 weeks.
    Mr. Hill: Is not the effect of the present system that the chemist gives the Government about three months" credit for one month"s work rolling forward, and that this can bear hardly on small chemists because it involves providing extra working capital because wholesalers will not give more than about six weeks" credit, whereas the Government require about three months? Will the right hon. Gentleman look into the matter, because it bears hardly on some rural chemists?
    Mr. Robinson: I have had some representations on this matter. I told the chemists that on the present evidence I was not able to agree to the increase in the standing charge which they sought, but I have told them that if they have evidence of serious financial hardship in a substantial number of individual cases I shall be prepared to consider with them whether there are any temporary measures which might be brought to bear to deal with them.
    Mr. Wood: Does the right hon. Gentleman think it satisfactory that this very considerable financial change for chemists should have been dictated by wholly different considerations? The change made a considerable difference to the chemists, but the considerations which led to it really had nothing to do with their paying more or less?
    Mr. Robinson: I suppose that one might regard it as fortuitous that the chemists got the 2s. over the counter when the prescription charges were first introduced and increased. In any event they have recently received very large back payments, totalling some £8 million, for dispensing in 1962 and 1963 and the first nine months of 1964.

  HOSPITALS

    Hospital Administrators
    Mr. Shepherdasked the Minister of Health what steps he is taking to improve the quality and remuneration of hospital administrators.
    Mr. K. Robinson: The National Staff Committee for the Hospital Service is considering a number of measures, regional staff committees are being set up, and arrangements are being made for the recruitment this year of 46 administrative trainees under the existing arrangements. The Administrative and Clerical Staffs Whitley Council is considering a claim for substantial increases in salaries.
    Mr. Shepherd: Will the right hon. Gentleman do all he can to raise this standard rapidly, since the hospital is about the only large-scale undertaking which no one appears to be running, and it is very difficult for administrative staffs with relatively low salaries to be able to

    1191
    have any real influence amongst consultants who earn three, four, five and ten times the amount that the staffs earn?
    Mr. Robinson: I would not accept all that the hon. Gentleman says. Indeed, there is at the moment a very substantial claim before the Whitley Council for administrative staffs. But I do expect great things from the National Staff Committee which, although it was set up last July, only really got going when its principal officer took up post in January this year.

    New Hospitals
    Mr. Peter Walkerasked the Minister of Health whether he intends to increase the number of hospitals to be built in the 1964–74 programme.
    Mr. Pavittasked the Minister of Health what are his proposals regarding the number of hospitals to be built in the 1964–74 programme.
    Mr. K. Robinson: Until hospital boards have reviewed their programmes and I have in due course considered their revised proposals, I cannot speculate on the number of hospitals likely to be built.
    Mr. Walker: Is the Minister aware that in his original statement on this subject he asked the hospital boards to consider this in view of the resources which were available? Does he intend the resources to be greater than were originally estimated or less than were originally estimated?
    Mr. Robinson: I am planning for the rate of expenditure on hospital building to increase over the period, but what resources are provided for hospital building are and must be related to the overall resources of the nation as a whole. The hon. Gentleman must realise that.
    Mr. Wood: Can the Minister now say when his review will be complete and when he will be able to make a statement?
    Mr. Robinson: Not yet.
    Mr. Shinwell: When my right hon. Friend is giving further consideration to the matter of an increase in the number of hospitals, will he recall that I have frequently pointed to the need for a hospital in the area which I represent? Would he give that consideration?
    Mr. Robinson: This Question is in general terms. If my right hon. Friend has a question about a particular hospital, I hope he will be kind enough to table it.
    Mr. Shepherd: As the date for starting Cheadle General Hospital has now regrettably been put back, are we to take it that the hospital programme under the present Administration will be slower than under the previous Administration?
    Mr. Robinson: No. It will certainly be faster, because, thanks to the £5 million extra we have got for the coming financial year, we shall be able to start all those programmes which are ready to start.

    Geriatric Cases, Clacton
    Mr. Ridsdaleasked the Minister of Health whether he will establish a day hospital in the Clacton area to deal with geriatric cases.
    Mr. Loughlin; Since there is no geriatric hospital department in Clacton, day hospital provision there would not be appropriate.
    Mr. Ridsdale: As such a successful geriatric day hospital has been established in the Cambridge area, could the Parliamentary Secretary say why it is not possible to establish a geriatric day hospital in the Clacton area, where the number of elderly is much greater?
    Mr. Loughlin: I am advised that it would not be in the best interests of the patients to have a day hospital divorced from a hospital geriatric department with consultant cover. There is reasonable provision in Clacton for the care of aged people. We consider that at this stage, pending the building of the new hospital, it would not be in the best interests of the patients.
    Mr. Ridsdale: Will the Parliamentary Secretary keep an open mind on this problem?
    Mr. Loughlin: My mind is always open.

    South Western Region
    Sir Rolf Dudley Williamsasked the Minister of Health whether he will ensure that sufficient finance is made available to the South-West Regional Hospital Board having regard to the need

    1193
    to expand the hospital facilities in that
    area.
    Sir G. Willsasked the Minister of Health whether he is satisfied that the amount of special extra capital allocated to the South Western Regional Hospital Board will ensure that the West Country gets a fair and adequate share of new hospitals and hospital improvements; and if he will make a statement.
    Mr. Scott-Hopkinsasked the Minister of Health whether he is satisfied that the allocation of money to the South-West makes adequate provision in view of the wide spread of the population; and if he will make a statement.
    Mr. K. Robinson: I am satisfied that within the resources available the South Western Region gets its fair share. The special needs of each region are taken into account in determining capital and revenue allocations. The special extra capital allocation to hospital boards for 1965–66 of £5 million has been distributed in a way that enables a start to be made by this and other boards on schemes ready and scheduled to start in that year.
    Sir Rolf Dudley Williams: I thank the right hon. Gentleman for that reply. He will be aware that I am particularly interested in an out-patient department of the Princess Elizabeth Orthopaedic Hospital in Exeter. Can he give me an assurance that the start of this department will not be delayed?
    Mr. Robinson: I understand that the South Western Regional Hospital Board hopes to start the new out-patient department at the Princess Elizabeth in November of this year.
    Sir G. Wills: Will the Minister do his best to ensure that there is at least enough of the allocation available for improvements to the Bridgwater Hospital, which has been making a very valuable contribution for a long time, and is still doing so, to the area around it as well as to Bridgwater itself?
    Mr. Robinson: I understand that, subject to the outcome of the review, it is unlikely that rebuilding of the Mary Stanley Maternity Home at Bridgwater will be possible for some years, but the board has in hand plans for interim improvements to the outpatient and other facilities at Bridgwater Hospital.
    Mr. Scott-Hopkins: Can the Minister say whether phase 3 of the new hospital being built at Truro will be started within the coming financial year with the new funds he is to allocate to the South Western Region?
    Mr. Robinson: I cannot answer the hon. Gentleman without notice on that point.
    Mr. Lipton: Has my right hon. Friend taken note of the sudden and passionate yearning displayed by hon. Members opposite for improved hospital services, about which they were pretty dumb until last October?
    Mr. Robinson: I welcome their enthusiasm. I am only sorry that it was not greater when they were in office.
    Mr. Peter Mills: Will the Minister bear in mind how important it is to keep the small cottage hospitals going until the bigger hospitals are built? Will he ensure that they have the necessary supplies and finance to carry on?
    Mr. Robinson: This is always taken into account when any proposal to close a cottage hospital or small hospital comes before me.
    Mr. Peter Millsasked the Minister of Health what steps he is taking to reduce the waiting list of surgical patients in the South-west in view of the long time many patients have to wait.
    Mr. Loughlin: This problem was brought to the attention of my right hon. Friend during his recent visit to the South Western Region. Both the Regional Hospital Board and the Board of Governors of the United Bristol Hospitals are planning further major schemes which should relieve pressure.
    Mr. Mills: Will the Parliamentary Secretary bear in mind the very real need for a new hospital in North Devon, and that we are not overstating our case? The staff are frustrated and there is a long waiting list of patients for surgical treatment. Can the hon. Gentleman now tell us whether the South Western Board is able to revise its building programme?
    Mr. Loughlin: The South Western Board is considering the building programme. So far as North Devon is concerned, the board has plans for releasing certain space in the North

    1195
    Devon Infirmary for a few additional beds and another operating theatre. This should improve the situation. We appreciate the problem. My right hon. Friend realises it in consequence of his visit, and I can assure the hon. Gentleman that we are now giving it every consideration.
    Mr. Scott-Hopkins: Can the hon. Gentleman say what plans the hospital board has for the other parts of Devon and Cornwall and the rest of the region, and can he say how much of the £5 million extra will be spent there?
    Mr. Loughlin: Not without notice.
    Mr. Spriggs: Does my hon. Friend appreciate that, generally speaking, those who can afford it can jump the queue and obtain a surgical operation at short notice?
    Mr. Loughlin: That is a slightly different matter from the Question on the Order Paper.
    Mr. Spriggs: It is still important.

    Eastern Region
    Mr. J. E. B. Hillasked the Minister of Health to what extent he will increase the approved annual capital building programme of the Eastern Regional Hospital Board, in order to ensure that hospital and other health services match the needs of the increased population in Ipswich and other towns in the Eastern Region which will result from the expansion plans announced by Her Majesty"s Government.
    Mr. Loughlin: The hospital building programme is under review. I cannot say, at this stage, what variation, if any, in the distribution of resources may be made to take account of population changes.
    Mr. Hill: That review will undoubtedly include the factor of expansion, will it not? Bearing in mind that there is no establishment of any regional advisory board and so on because the South-East Study is being reconsidered, could the Parliamentary Secretary say what is the machinery at the moment for discussing and arguing about the necessary capital allocation in these circumstances?
    Mr. Loughlin: The situation is that the regional hospital boards will be pro-
    1196
    vided with projected population changes and we shall expect them to allocate the resources in accordance with any population changes that may take place.

    Medical Certificates
    Dr. Millerasked the Minister of Health, if he will ask hospital boards to draw to the attention of their medical staffs the fact that they are entitled to issue panel medical certificates in their out-patient departments, thus frequently obviating for the patient the necessity of making a further medical visit, this time to his general practitioner.
    Mr. Loughlin: This has already been done.
    Dr. Miller: While thanking my hon. Friend for that reply, may I ask him whether he is aware that, in spite of the fact that he said that this is being done, many hospital doctors do not carry out the instructions which have been given to them or, at least, they do not avail themselves of the right which they have? This constitutes a considerable inconvenience both to the patients and to the doctors.
    Mr. Loughlin: My hon. Friend can take it from me that we have drawn the attention of hospital management committees to this matter. There is some difficulty in Scotland, and I understand that the matter is now being discussed with my right hon. Friend the Secretary of State for Scotland. I hope he will soon get as good a situation in Scotland as we now have in England and Wales.
    Mr. Rankin: In view of the addendum to the previous reply, are we to take it that this has not yet been carried out in Scotland?
    Mr. Loughlin: I gather that some discussion is taking place in Scotland.

    Maternity Hospital, North-East
    Mr. R. W. Elliottasked the Minister of Health if he is aware of the low degree of priority given to maternity hospitals in the north-east of England in the new hospital building programme; and what action he will take.
    Mr. Loughlin: No, Sir. The Newcastle Regional Hospital Board"s programme includes five maternity schemes

    1197
    now in progress and four more at present planned to start in the next five years, all in the North-East.
    Mr. Elliott: Does the hon. Gentleman realise that the research which has been going on during the past few years —it was mentioned in reply to Question No. 38—indicates that in some areas there is a higher birth-wastage rate than in others? Does not the evidence suggest that maternity hospital facilities in the north-east of England should be increased?
    Mr. Loughlin: I do not know precisely what the hon. Gentleman means by "birth-wastage rate". If he means that mortality in relation to live births is higher in some regions, I agree. As regards the North-East, we hope to increase the number of maternity beds from the present 1,080 to 1,685 as soon as we possibly can.
    Mr. Popplewell: Will my hon. Friend ensure that there is no unnecessary delay in authorising this expenditure? The Newcastle Regional Hospital Board pressed the previous Administration for years to make up the scarcity of beds. Is my hon. Friend aware that there has been a lot of talk about a new general hospital and further extensions to mental and other hospitals for very many years, and will he now ensure that real progress is made as speedily as possible?
    Mr. Loughlin: As my right hon. Friend said in his statement on 8th February, he is now reviewing the hospital programme. The question of getting the priorities right is one of the matters which we shall take into account.
    Lord Balniel: Does the hon. Gentleman recollect that last year a substantially greater proportion of the beds in the hospital programme was allocated for the maternity service, and, in fact, 600 extra maternity beds were provided? Will he give an assurance that this trend towards a greater proportion will be continued in the next two years?
    Mr. Loughlin: We are not going to give any assurances in advance of the review. It would be silly to do so. Although the noble Lord may be satisfied with the increase in maternity beds last year. his hon. Friend the Member
    1198
    for Newcastle-upon-Tyne, North (Mr. R. W. Elliott) is not.
    Dame Irene Ward: I am not either.

    Welsh Hospital Board (Chairmanship)
    The following Question stood upon the Order Paper:
    Mr. Box: To ask the Minister of Health what considerations he took into account when deciding to replace the present chairman of the Welsh Hospital Board.
    Mr. Speaker: Mr. Donald Box.
    Mr. Michael Foot: On a point of order, Mr. Speaker. Apparently, the hon. Member for Cardiff, North (Mr. Box) is not here to ask his Question. Can you tell the House whether there was any indication given by the hon. Gentleman that he would not be here? Is it not most undesirable for a Question to be put on the Order Paper designed for the purpose of attacking the newly appointed chairman of the Welsh Hospital Board and then for the hon. Gentleman not to be present in the House to put it?
    Mr. Speaker: The hon. Member is, alas, under no obligation to tell us whether or not he would be here. I should not like to institute any arrangement of that kind—my desk would really be terribly loaded today—nor do I think it necessarily follows, with respect, that the Question constitutes what the hon. Gentleman says it does. But I must not get into the realms of argument.

    Young Chronic Sick
    Mr. A. J. Irvineasked the Minister of Health what steps he is taking to ensure that youthful sufferers from multiple sclerosis, poliomyelitis, spasticity, rheumatoid arthritis and arteriosclerosis are accommodated in other than chronic wards.
    Mr. Loughlin: Regional boards have been asked to group the younger chronic sick in special wards as far as possible. My Department is at present engaged on a study of the needs of the younger chronic sick patients in hospital. When the results of this study are available, we shall consider what further guidance might be given.
    Mr. Irvine: I am very grateful for that helpful and constructive answer, but will my hon. Friend bear in mind that, in matters of this sort, quite small adjustments in the distribution of accommodation can give rise to considerable relief to sufferers?
    Mr. Loughlin: We appreciate that even small adjustments can give relief, but my hon. and learned Friend will accept that, very often, it is a question of putting younger patients close to their homes so that parents and friends can visit rather than putting them a long distance from home and imposing an onerous burden on relatives.

    Operating Theatres
    Mr. Dudley
    Smithasked the Minister of Health how many reports he has
    received from hospital governing bodies, management committees or individual expert sources, to the effect that operating theatres in particular hospitals are unsafe or dangerous for surgery.
    Mr. K. Robinson: Dangerous conditions are dealt with by Hospital Authorities as soon as they are identified, and formal reports would not be made to me unless advice or help is needed. Seven such reports have been made over the past year or so and steps have been taken to close, reconstruct or otherwise render safe the theatres involved.
    Mr. Dudley Smith: Is the right hon. Gentleman aware that there has been a great deal of public disquiet recently about reports that some operating theatres are unsafe? Does not he feel that this matter should be given first priority by the Ministry in the reorganisation of hospitals?
    Mr. Robinson: A great deal is being done to modernise and, indeed, to renew operating theatres. I hope that the hon. Gentleman will not suggest that, in all circumstances, where operating theatres are out of date, the conditions for patients in them are dangerous. That is not the case. As I said in the House on another occasion, 400 new theatres have been built since the National Health Service started and over 100 are under construction. I regard this matter as one of
    1200
    priority, and we are pressing ahead as fast as resources permit.
    Mr. Wood: How many complaints were made in the five years before the right hon. Gentleman took office?
    Mr. Robinson: I cannot answer without notice.
    Mr. Lipton: Is it not the case that many of these operating theatres now described as unsafe are not really as unsafe as all that? Is it not a fact that all they require in such cases is some extra care taken over sterilisation procedures?
    Mr. Robinson: A great deal of extra care has to be taken in out-of-date operating theatres by medical and nursing staff. The fact that they do take such great care is shown by the very high safety record which our operating theatres generally enjoy.
    Mr. Fisher: Will the right hon. Gentleman undertake to make unsafe buildings as safe as possible for patients and as tolerable as possible for surgeons without waiting for complete rebuilding schemes which might not take place for many years? Will he replace individual sterilisation by theatre supply units as is done in America?
    Mr. Robinson: Yes. We want very urgently to get rid of the boiler or steam kettle type of sterilisation. The hospital authorities were advised over two years ago that the sooner they got rid of this sort of sterilisation the better, since we know that it is not completely effective.
    Mr. Pavitt: Is my right hon. Friend aware that, even when the hospital theatre is completely rebuilt under the advice of the consultants present, mistakes can still happen? Will he make sure that the best advice is given by the hospital building unit in cases of rebuilding going on at present?
    Mr. Robinson: A circular is in draft and will shortly be sent to hospital authorities concerning the whole question of operating theatre procedure with special relation to safety factors. I hope that this will help the hospital authorities in planning new theatres.

ORDERS OF THE DAY
  MINISTERIAL SALARIES AND MEMBERS" PENSIONS BILL
  Lords Amendments considered.

  Clause 13.—(TRANSFER TO AND FROM OTHER PENSION SCHEMES.)
  Lords Amendment: In page 11, line 2, after "person" insert:
  "any service of his as a Member of the House of Commons before the date on which the payment is made shall cease to be reckonable service and".
  3.33 p.m.
  The Financial Secretary to the Treasury (Mr. Niall MacDermot): I beg to move, That this House doth agree with the Lords in the said Amendment.
  The purpose is to ensure that, when a Member leaves the House of Commons and his pension rights are transferred to another pension scheme, not only his contributory service but also his noncontributory service in respect of which pension rights have accrued shall cease to be reckonable for pension under the Members" scheme. This is to cut out any possibility of a double entitlement.
  The need for the Amendment arises from an error in drafting. The House will remember that, under Clause 7(5), reckonable service for the purpose of calculating a Member"s pension comprises two kinds of service. First, there is service after 16th October last, in respect of which contributions are paid by deductions from salary under Clause 5. That is, of course, a contributory service. Secondly, there is service before 16th October, 1964, by a person who is a Member after that date up to a maximum of 10 years. The reckoning of this service is paid for by Exchequer deficiency contribution under Clause 6. That, of course, is the non-contributory service.
  Clause 13 provides for transfers to certain other pension schemes when a Member leaves the House and the transfer value is then payable in respect of service for which pension rights have accrued—both the pre-October, 1964, non-contributory service and the post-October, 1964, contributory service.
  The intention of subsection (4) was to provide that any service before the date of the transfer payment should cease to
  1202
  be reckonable service. This was obviously necessary if a double entitlement was to be avoided. As originally drafted, the subsection achieved that object but it was redrafted in Committee, following Amendments which had been made to Clause 11. I think that it was at this stage that the error arose so that now the subsection only achieves half its object.
  It provides that contributions paid by deduction from salary under Clause 5 should be treated for the purpose of calculating reckonable service as though they had not been paid, but the subsection makes no provision for the noncontributory service before 16th October, which is paid for by Exchequer deficiency contribution. This, of course, should also cease to be reckoned on payment of transfer value. The transfer value as provided for in subsection (1) must be sums repaying the value of that person"s accrued pension rights in the Members" contributory pension fund. Those rates necessarily include the credit for service before October, 1964, which is being paid for by the Exchequer.
  The effect of the Clause as it stands would be to allow a man with a maximum of ten years" back service, who left the House with a transfer value which fully represented the value of his accrued rates for those 10 years, to receive, in addition, a pension for those 10 years on reaching the age of 65—in effect, a double pension. This is plainly wrong, so the Amendment cuts out the double entitlement by providing that, when a transfer value is paid, any service before the date at which the payment is made—that is to say, both contributory and non-contributory service—shall cease to be reckonable.
  Perhaps I may point out now that the subsequent Amendment removes the earlier provision which applied to contributory service only and which is now needless.
  Mr. Selwyn Lloyd: I shall detain the House only a moment. I accept what the hon. and learned Gentleman the Financial Secretary has to say. This was a clear mistake and it is right to correct it. It is the kind of mistake which does happen when the House takes the Committee stage of a

  1203
  Bill which includes complicated provisions like this at a late hour of the night, after a procedural row, and then takes it again at short notice the next day.
  We had difficulties about these Clauses and put forward one or two points about them, but there was not time to think them out and consider them properly. We made a mistake, without doubt, and we should be grateful to the other place for discharging its duty as a revising Chamber.
  Sir David Renton: Where the pension is valued for transfer in the way described by the Financial Secretary, does the non-contributory element have the same weight in transfer value as the contributory element?
  Mr. A. Woodburn: Before my hon. and learned Friend answers that point, may I say that I understood that the first pension scheme was purely ex gratia and had no rights at all. I thought that it was purely a matter of a pension being granted, but not as of right, and I should like my hon. and learned Friend to explain how rights can be transferred from a pension scheme which, so far as I know, has no rights.
  Mr. MacDermot: In reply to the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd), I will say only that I do not think that the Amendment was drafted either late at night or between a late night debate and the following day. This is the kind of error which may arise in complicated provisions of this kind.
  The right hon. and learned Member for Huntingdonshire (Sir D. Renton) asked whether the transfer value payment in respect of non-contributory service bore the same weight as that in respect of contributory service. I think that it does, but I will check that and, if there is any difference, I will let the right hon. and learned Gentleman know.
  Sir D. Renton: I do not know whether I require the leave of the House to speak again.
  Mr. Speaker: I thought that the right hon. and learned Gentleman had successfully sought to intervene in the Financial Secretary"s speech.
  Sir D. Renton: The reply which we have been given requires comment, more especially in view of what was said by the right hon. Member for Clackmannan and East Stirlingshire (Mr. Woodburn), who "thought, as I did, that the noncontributory element which was being transferred was purely ex gratia. I am somewhat surprised to find that in assessing the transfer value, this ex gratia element is to be given equal weight with the contributory right, which it is obviously right to transfer.
  Mr. MacDermot: I am not sure what the right hon. and learned Gentleman means by saying that this is ex gratia. Obviously, it is ex gratia in the sense that it is non-contributory, not counterbalanced by any contribution from the Member, but it is a pension to which he is fully entitled as a matter of right, provided that he qualifies under the Bill"s provisions. It is not in any sense discretionary, if that is what the right hon. and learned Gentleman means by ex gratia. It arises fully as an entitlement as of right. That follows from the provisions of Clause 7(5,b) which states that reckonable service is
  "service as a Member of that House before that date"—
  which is 16th October, 1964—
  "by a person who is a Member of that House at any time after that date."
  There is then the limitation that that service can be for only 10 years. Thereafter the whole of the entitlement of the Member is in relation to contributory service and no distinction is drawn between the two kinds of reckonable service, that is to say, that which is based on the contributory element and that which is based entirely on the Exchequer contribution.
  Sir D. Renton: I gave way to the Financial Secretary and I had not finished what I had intended to say. It may be perfectly right, and I think that it is, when we are dealing with this as a domestic matter, to accept that Members who have been here for some years—and I must declare my interest—should have the right, back to 10 years, of accumulating a right to pension on retirement at 65 or later.
  However, we are now dealing with the transfer of pension rights and doing so in a state of some uncertainty, because the Treasury is to be given power to transfer

  1205
  rights accrued under the Bill to any scheme approved by the Treasury, and we do not know what such schemes may be. It is a very strange proposition that ex gratia non-contributory rights should be transferred to schemes with which Parliament normally has nothing to do, at least, not Members of Parliament.
  I must say that I find this situation somewhat puzzling. It is unfortunate that its exact nature should come to light at such a late stage and I do not suppose that there is anything that we can do about it, but at some stage the Financial Secretary should take the opportunity publicly to clarify the matter.
  3.45 p.m.
  Mr. MacDermot: I am taking that opportunity now, so far as I am able. I think that the right hon. and learned Gentleman"s fears are groundless. There is no scheme which has to be approved by the Treasury. The scheme referred to in subsection (1) is a scheme in which the trustees may, at the request of any Member, pay into or for the purposes of any fund or scheme, being one of the two kinds of schemes set out in the subsection, sums representing the value of that person"s accrued pension rights. Those sums have to be certified as such by, or calculated in accordance with tables prepared by, the Government Actuary. This is no way dependent on any discretionary element resting in the Treasury.
  As I pointed out, the accrued rights are rights in respect of reckonable service and no distinction is drawn in the Bill between reckonable service which rests on contributions made by Members and reckonable service which is entirely non-contributory. The answer to the right hon. and learned Gentleman is that no distinction is drawn. The two kinds of service are of equal weight. In no way is the payment in respect of the non-contributory element discretionary. It is fully a matter of right.
  I think that this also answers the question of my right hon. Friend the Member for Clackmannan and East Stirlingshire (Mr. Woodburn).
  Mr. Woodburn: I appreciate that service is equal in both cases, but I understood that the first pension was payable only if there were certain circumstances which made it payable and that there was no right to the first pension in cash. I was unable to understand how there could be any possibility of a double pension as the earlier pension scheme was purely discretionary; so that if a person got, say, £900 from the second pension scheme, he would automatically be excluded under the rules of the first.
  Mr. MacDermot: I think that my right hon. Friend is referring to something else, namely, the difference between a pension which is payable out of the present existing Members" Fund and a pension which will be payable under the pension scheme when the Bill becomes law. Those are quite different matters. This Amendment is concerned solely with the transfer of value payments which arise exclusively out of rights accruing under the pension scheme. Under the existing Members" Fund system, of course, there are no accrued rights and the payments are of a discretionary nature and there is no question of any transfer of value in relation to any sum which might become payable out of the existing fund.
  Sir D. Renton rose——
  Mr. Speaker: The right hon. and learned Gentleman requires the leave of the House to speak again.
  Sir D. Renton: If I may have the leave of the House briefly to say——
  Hon. Members: No.
  Mr. Speaker: I heard leave being declined.
  Hon. Members: Shame.
  Question put and agreed to. [Special Entry.]
  Remaining Lords Amendment agreed to. [Special Entry.]

  MONOPOLIES AND MERGERS BILL
  Order for Second Reading read.
  3.49 p.m.
  The President of the Board of Trade (Mr. Douglas Jay): I beg to move, That the Bill be now read a Second time.
  This is a short Bill. It does not attempt to do everything, even in the field of monopolies and mergers. It sets out to do what is most urgent and most necessary in the belief that we should not postpone doing anything until we can do everything. The truth is that 13 years" government by the party opposite have left so many things undone which ought to have been done that the whole catalogue cannot be made good even in the most fertile parliamentary Session yet known. Therefore, the Bill omits some of the proposals in the previous Government"s White Paper of last spring, not because they are undesirable, but because they are less urgent, and includes certain others which are more urgent but which the previous Government had not the courage to swallow.
  The Bill is also one part of the comprehensive programme for streamlining and modernising British industry, which is crucial to the economic survival of this country, and which the Government are determined to launch. If we are to retain, as I believe we must, a large sector of private enterprise in the mixed economy of this country, competition is essential as one safeguard of the efficiency and progressiveness of that private sector.
  The Bill is conceived in the belief, which I think is common to all parties, that neither monopolies nor mergers are always bad. Sometimes they are and sometimes they are not. This truth was admirably expressed in that classical document, which wears well with time, the White Paper on Employment Policy, of May, 1944—a bipartisan, perhaps I should say a tripartisan document— [HON. MEMBERS: "Where are the Liberals?"] Whether they are here or not, it was a tripartisan policy—which said that, although
  "arrangements or combines do not necessarily operate against the public inerest",
  nevertheless
  "the power to do so is there".
  1208
  In many instances, greater size and further amalgamation may be desirable in the public interest; and the Government may be justified in actually promoting amalgamations of that kind. One possible example is the steel industry. What we need, however, is a test by which the public interest can be judged, and an accepted instrument by which that judgment can be made effective.
  That has been the basic principle of the legislation proposed by all political parties since 1945. But three valid criticisms have been made of the working of our present dual system of a Monopolies Commission, on the one hand, and a Restrictive Practices Court, on the other. The first is that it has all been too slow. The Monopolies Commission has not been able to work simultaneously on more than a very small number of inquiries; and each enquiry has tended to take years rather than months. The watchdogs have barked, or prepared to bark, but meanwhile the monopolies have gone marching on.
  The Tory Government, in 1956, embedded, as one would have expected, in policies of stagnation and decay, reduced the size of the Monopolies Commission and condemned it to operate in one group at a time instead of a number simultaneously. That is one reason why for the last seven or eight years the engines of reform in this field have ground so slowly. The responsibility for these delays, must not rest on the devoted members of the Monopolies Commission, but on the previous Government which, by the 1956 Act, curtailed its powers and slowed down its ability to act.
  Secondly, even when the Commission did its best to report and recommend drastic measures, the Government did not possess strong enough powers to carry its recommendations into force. Thirdly, when confronted with mergers likely to establish new monopolies, previous Governments have had no power at all to do anything except wait until the monopoly has been scrambled and then hold a belated inquiry to decide whether, long after the marriage had been consummated, something should be done to undo what had been done. When confronted with the proposed I.C.I.— Courtauld merger, three years ago, the then President of the Board of Trade appeared before the House to be somewhat timid and irresolute. To do him

  1209
  credit, even if he had known what he wanted to do, he had no power to do it.
  The present Government, therefore, propose to put an end to all this irresolution and impotence. By the Bill, we shall, first of all, enlarge again the size of the Monopolies Commission. The maximum number of members will be raised again to 25 instead of the present 10; up to three deputy chairmen may be again appointed; and the Commission will be given the power to do its work in groups. The appointment of members will be more flexible, so that past members can be reappointed and a retiring member can stay on until work on an inquiry already begun is rounded off. I believe that we are most likely to get greater speed if we thus enable the Commission to work with more than one panel simultaneously.
  Apart from the chairman, the Commission is made up, and always has been of part-time members—not unlike the House of Commons—with their own interests in business, trade unions, economics, the law, and so on. Unless we are prepared to depart from this, and appoint full-time professionals, we cannot get greater speed without greater numbers. One serious cause of delay up to now has been the slowness of individual industries and firms in answering the inquiries of the Commission, and the unwillingness of the Commission to incur charges of unfairness by hustling firms too insistently. Therefore, if we are to get on quickly, larger numbers and simultaneous inquiries seem much the best solution.
  But I should like to emphasise the value which we attach to the services of busy people in business and the professions who devote their time to this public work and to express our gratitude to them. [HON. MEMBERS: "Hear, hear."] We propose to give the enlarged Commission plenty of work. Where a firm is really dominant in an important industry, controlling perhaps over half the market, l think that an investigation should usually be made whether or not there have been complaints of monopoly abuse. One of the bad effects of having too small a Commission up to now has been the reluctance of the Board of Trade to make further references to it
  1210
  which might have overloaded the work of the Commission.
  We also intend to ensure that complaints of specific monopoly abuse as opposed to entire monopolies are investigated by the Commission except where we are satisfied that there is nothing serious in the complaint.
  Next, we propose to give the Government adequate power to carry out recommendations of the Commission when they are made. I have always felt that it is discouraging to the Commission, and, indeed, to the public, if Governments are either unwilling or too cowardly to adopt the Commission"s recommendations, and, in general, I am sure that Ministers ought to do so, although it is certainly right that the final decision should rest with a Minister responsible to this House.
  The Bill therefore confers on the Government, subject to parliamentary control, new and important powers to be used after a report from the Commission, including, in the last resort, power to undo a monopoly and power to require the publication of price lists by a firm and to prohibit departure from published price lists.
  Clause 3 also confers on the Government a new power of price control. In the past, on occasions, the Commission, in its reports, has commented on prices and profits, but neither the Commission nor the Government has had power to do anything about it except by persuasion.
  When the original Monopolies Act, 1948, was passed there were general price control powers in existence, and these could be used to enforce a Monopolies Commission report. The previous Government, rather typically, abolished the price control powers, but left the Commission with the ability to recommend the use of powers which, in fact, no longer existed.
  We are, therefore, ensuring that not merely shall the Commission have a voice, but that the Government shall have teeth as well. This, incidentally, will not merely restrain monopoly and restrictive practices in industry which have tended over the years to fossilise our competitive power, but will reinforce the present Government"s basic policy of calling a halt to the competitive scramble of prices

  1211
  and incomes. The existence of price control powers should greatly enhance the Government"s power to act in this field by persuasion, which is much the best way, and, therefore, our chance of success in restraining an excessive increase in money incomes and prices.
  We are also, in the Bill, extending the scope for inquiry by the Commission to the supply of services as well as of goods —and, indeed, why not? There is no real economic distinction between goods and services, and restrictive practices in either can be equally injurious to the national interest and to the new export drive.
  The 1948 Act provides at present for inquiry into only a very limited class of services—processing done on commission. Clause 2 of the Bill extends this to cover all types of services, and not merely commercial services as the previous Government"s White Paper of a year ago proposed. Services rendered by workers under contracts of service are excluded. That is not because restrictive practices in this sphere are necessarily immune to criticism—in my view, far from it—but because they cannot be covered by this sort of legislation, as has been recognised in all our legislation on monopolies and restrictive practices since the war. Also excluded are services which have statutory authority under other Acts of Parliament, since, clearly, Parliament would not wish to authorise a monopoly situation under one Act and then prohibit it under another.
  Apart from those qualifications. however, I think that it is right that both professional and commercial services should be included within the scope of the Bill, though that does not, of course, mean that the Government have any present intention of rushing in to question the arrangements of the learned professions. What the Bill does is to give the Government power to refer such commercial or professional practices to the Commission wherever this seems to be desirable and to use the powers contained in both the 1948 Act and the present Bill to restrain any practices which the Commission condemns.
  Mr. J. T. Price: Before my right hon. Friend leaves that point, in interpreting the intention of
  1212
  the Clause at a later stage will he pay particular attention to the effect on prices of cost accountancy and the very high fees which automatically are loaded in to inflated prices?
  Mr. Jay: I do not doubt that that is one of the considerations which we shall take into account, but it is not necessarily the only one. I note, however, what my hon. Friend has said.
  Here, the Bill follows the 1948 pattern in making not only actual monopoly as defined subject to investigation by a commission, but also collective arrangements or agreements of a restrictive kind. It was only after the Monopolies Commission had reported in 1954 on restrictive agreements in the case of goods that Parliament set up the Restrictive Practices Court to give verdicts on them. In the case of services, we are still at the first stage of inquiry by the Commission and have not yet reached the possible stage of judicial procedure.
  Next, the Bill makes a determined attack on the question of mergers and takeovers. Over these, the Government have hitherto had no power to do anything, except sit back until they had perhaps arrived at the monopoly stage as defined and then wonder whether the stable door should be closed after the horse had disappeared. The previous Government, after many years of cogitation, proposed that, provided that the horse had thus disappeared, the stable door could be bolted; that is to say, that mergers could be inquired into after the event.
  We are being bolder than that, and this is one respect in which the Bill sharply departs from the White Paper of a year ago. We are making the audacious suggestion that in certain cases a merger might be held up while a reasonably quick investigation into it is held by the now enlarged Commission. Unless we do this, I doubt whether any control of mergers can be real. We are, of course, not proposing for one moment to ban or even delay all mergers, but merely to have the power to subject them to the test of the public interest, and to delay where necessary, and prohibit them where both the Board of Trade and this House are convinced that they would be against the public interest.
  Many mergers, as I have said, will be positively in the national interest and can

  1213
  probably be reasonably easily seen to be so. Others, however, might tend, or, indeed, even be deliberately designed, to curtail competition, which, in the last resort, is the only real justification of private enterprise. The practical problem, I think we should all agree, is to sift the one sort of merger from the other.
  Numerous small mergers would, of course, be right outside the scope of the Bill. In deciding which we should include, we have adopted again the test from the original monopolies legislation of a control of one-third or more of the supply of any product or service and we have added a further test: the transfer of assets of over £5 million. Wherever either of these conditions prevails, the merger would be within the terms of the Bill although, even so, the Board of Trade would be under no obligation to intervene.
  I do not believe that it would have been enough simply to have included mergers which would have created or strengthened an existing monopoly situation as defined. There could be cases where monopoly in this sense is not technically involved, but, nevertheless, the concentration of economic power would be such that the transaction should at least come within the field of public scrutiny.
  What, therefore, we propose is this. The Board of Trade, unless it wishes, under the Bill need not take any action whatever in the case of a proposed merger. No doubt a large number of mergers and takeovers will continue to go forward, or else not go forward, in accordance with the business and bargaining processes which determine these matters. But in those cases—probably a minority—where it appeared that a merger or takeover might be both prima facie against the public interest and extremely hard to unscramble after it had been consummated, if that is the right word, the power would exist under the Bill to hold it up while the Commission carried out its inquiry and was required to report within six months, or, in exceptional cases, within nine months.
  It has always seemed to me that firms wishing to be merged, or firms threatened with a takeover bid—because human nature, even in this field, can sometimes be red in tooth and claw—would much prefer to have a judgment made before the union was completed rather than
  1214
  afterwards. The Board of Trade would, nevertheless, also have the power to ask the Commission, if this seemed best, to investigate a merger after the event, which is what the right hon. Member the Member for Bexley (Mr. Heath) proposed. That is not excluded. Power would thus be given under the Bill to do either the one or the other according to circumstances.
  I think that we all remember the case of I.C.I. and Courtaulds, three years ago. There are probably many who feel today that the economy is all the stronger and more competitive for the fact that, in the end, in this instance, the marriage did not take place. No doubt that is a matter of opinion, but if it was to have been frustrated not by market forces, but by public judgment, I think that it would have been as much in the interests really of the two protagonists as of everybody else that the ban should have been imposed before and not after the union was consummated.
  Mr. Edmund Dell: In the case of a take-over bid would the reference to the Commission occur before or after the shareholders had been consulted?
  Mr. Jay: As soon as the proposals were made public it would be in the power of the Board of Trade to make up its mind what action to take. Therefore, it might be the one or the other.
  I was going to add that take-over bids by foreign for British firms would, incidentally, also, of course, be covered by these powers which I have been describing.
  Mr. A. E. Cooper: If a public announcement is made that two companies want to get together, and the Board of Trade decides that it wants to intervene, in what period of time would it make its decision? Because there could be a long period of uncertainty while there was dithering in the Board of Trade.
  Mr. Jay: I am coming in a moment to the point of what the Board of Trade would do if a proposition of that sort were put to it.
  I believe that the legal powers embodied in the Bill are sufficiently flexible in that they leave it possible for mergers to go forward in many cases

  1215
  with no investigation at all, but also provide for investigation either before or after the event as may seem desirable. Even, of course, when the Commission has inquired, and made its report, it will still be possible for the President of the Board of Trade of the day, who, I think, as responsible to this House, must be the final judge, short of Parliament itself, to accept or to reject the Commission"s recommendations, but when action is clearly shown to be necessary Parliament will have the power, by affirmative Order, to prohibit or dissolve a merger found by the Commission to be contrary to the public interest.
  Next—and I come to the hon. Gentleman"s question—the House may reasonably ask what criteria the Board of Trade will use in deciding which mergers should be referred to the Commission and which should be left alone. We have given some thought already to this question. Mergers are of very great variety, and I do not propose to attempt to spell out precisely the cases where the public interest might be at risk. One obvious case, I think, is where competition in a vital industry might be markedly reduced. That is why we have provided, as an alternative to the criterion of monopoly, a size of assets test, so that what are called vertical or diversifying mergers could be investigated if the public interest required.
  Mergers involving large firms are not, of course, necessarily harmful to the public interest—I should like to make the point—but the power of a giant, especially of two giants united, might be such as to stifle competition, or the empire created might be too large for the most efficient use of resources. In judging all these cases, however, I would propose always to remember what mergers in certain cases can do to achieve greater strength for our economy at home and abroad.
  Sir John Rodgers: Would the right hon. Gentleman say, for the purpose of clarification, whether the powers he has outlined apply not only to take-over bids covered by the Measure, but also to mergers voluntarily negotiated?
  Mr. Jay: Yes, certainly. They apply in either case where amalgamation would be the result of the operation.
  Mr. A. Woodburn: May I put a question to my right hon. Friend on that? My right hon. Friend will remember that one of the large items which gave rise to a good deal of agitation was big Press take-overs. Would those come under the scheme?
  Mr. Jay: I was going to come to that at some length in a moment.
  Mr. Edward Heath: To return for one moment to the point when the right hon. Gentleman was interrupted by my hon. Friend the Member for Ilford, South (Mr. Cooper), when he said that this applies to mergers, amalgamations, where a foreign firm is involved, would the right hon. Gentleman clarify that the fact that a foreign firm is involved would be the only reason for intervening? There must be other criteria?
  Mr. Jay: What I was trying to say was that the same criteria will apply in each case, either the creation of a monopoly, as defined, or the size of assets concept. That will apply regardless of whether the firm is foreign or British.
  I was going on to say that we have also been asked how the Board of Trade would be prepared to give guidance to firms contemplating a merger and on the likelihood of its being referred to the Commission. We shall always be ready to say whether a proposed merger appears to us to be legally within the field of investigation. Beyond that, I think that I must distinguish merger proposals which are put to us in confidence before they are made public from proposals which are already public when we are consulted. If the proposal is already public and we are asked by someone with a legitimate interest we shall as a general rule be prepared to make known within a reasonable time whether we shall refer the proposed merger to the Commission.
  Our intention is that those concerned, that is to say, firms and their shareholders, should as far as possible know where they stand before any offer becomes unconditional. A decision not to refer a proposed merger would, therefore, carry with it an implication that the completed merger might, later, itself not be referred, but the Board of Trade, of course, could not entirely exclude the possibility of the reference of the completed merger in an exceptional case.

  1217
  The problem is, however, more difficult, I think, when a merger proposal is still at the formative stage and has not been made public. That is a difficulty which we cannot disregard. I myself understand and sympathise with industry"s desire to be able to seek at the stage some sort of negative clearance, as one might call it. So long as the proposal is confidential we should not have enough information to judge whether a reference should be made to the Monopolies Commission. For instance, if a takeover were contemplated we could not obtain information from the firm to be acquired. Even if the merger proposal were one on which the firms involved were in agreement, so long as the proposal remained confidential we still might not know the effects on other firms, such as, for instance, suppliers or customers.
  Also, when the merger proposal became public another bidder might, of course, conceivably always emerge and change the whole situation. I think, therefore, that we cannot be dogmatic now about the guidance we should give if we were consulted in confidence before the merger proposal was made public. How far we might, in practice, be able to give informal guidance must depend on the circumstances of the particular case, but we shall, of course, do our best.
  Now, my right hon. Friend the Member for Clackmannan and East Stirlingshire (Mr. Woodburn) asked about newspaper mergers, which are very important in this connection and which we have provided for in the Bill. The previous Government"s White Paper ignored this somewhat awkward issue even though the Royal Commission on the Press recommended action. Awkward and prickly as this subject is, I came to the conclusion that even in a short Bill it would be cowardly to evade it altogether. It is no good disguising the fact that Press amalgamations have threatened, and still may threaten, the freedom and variety of the expression of opinion, and, perhaps, even the unbiased presentation of news.
  It has always seemed to me, as one who has been a working journalist for over 20 years or so, that this is perhaps the one field where there exists potentially an insidious threat to real democracy in this country. It raises far dif-
  1218
  ferent and wider issues than the economic consequences of ordinary business mergers, but I think it reasonable to infer from the Report of the Royal Commission on the Press, on the one hand, and, on the other, from the public disquiet at the time, for instance, of the disappearance of the News Chronicle and the Star, the swallowing up of Odhams and the extinction of the Daily Herald, that many people are anxious whether the business forces making for amalgamations in the newspaper world might not one day imperil our liberties, though, thank goodness, there are plenty of discordant voices raised in the Press at the present time which we can all hear.
  This has always struck me as a baffling problem, because what neither a Government, nor even Parliament, can do is to compel the Press to be free, nor even, by Parliamentary decision, make a newspaper pay if the public is not willing to buy it. We have, indeed, allowed for this latter eventuality in the Bill by enabling the Board of Trade to give consent in the case of newspaper mergers if the paper in question has no chance of carrying on successfully with its existing resources.
  The Royal Commission proposed that a special court should be set up to adjudicate whether a newspaper amalgamation should be allowed to go forward. There are really, I think, only three practical alternatives here if we decide to do anything at all, and none of the three alternatives is very attractive. The first is judgment by some sort of judicial procedure; the second is decision purely by a Minister, who inevitably, or at any rate probably, has political loyalties of some sort; and the third is an inquiry and recommendation to the Government by some sort of administrative tribunal.
  I have come to the conclusion that the Royal Commission"s proposal of a judicial procedure is wrong, because really these decisions on freedom, of speech free expression of opinion, and the public interest, are simply not justiciable issues. Secondly, I do not believe that a decision by a political Minister alone would be wholly satisfactory because, however single-minded he might be, he could not always, I think, hope to command general assent on an issue of this kind.

  1219
  That really leaves us with inquiry and recommendation by some sort of administrative tribunal, if that is the right phrase, and, since the Monopolies Commission is, in any case, to be expanded and given power to adjudicate on other sorts of mergers, it seems to me that it is the best instrument that we are likely to have for this purpose. Even so, since the issues raised by newspaper mergers are so different from the normal takeover bid, I believe that it is right that we should recruit a special panel of individuals for this purpose who could be added to the Commission for this particular form of inquiry. I hope that the House will agree that rather than do nothing at all on this front it would be better to try this experiment and see whether, after a period of such trial, Parliament believes that this is the best way of preserving the genuine freedom and variety in the Press which I am sure we all value.
  We are also proposing one other departure in the Bill which was not foreshadowed in the previous Government"s White Paper. In Clause 4—we are always interested in Clause 4, in Bills or anywhere else—we are empowering the Board of Trade, on the basis of a Monopolies Commission"s report, to use the relevant powers which are in the Bill anway to prevent any breach of, or conflict with, a treaty. We propose this because it has emerged in recent months that the Restrictive Practice Article of the Stockholm Convention, which set up E.F.T.A., laid obligations on the British Government which they had no effective legal power of carrying out. This, incidentally, is another example of where the previous Government entered into treaty obligations which they had no practical powers to fulfil. We are here remedying this rather unfortunate sin of omission.
  One E.F.T.A. Government have represented to us that a British exporting firm was following price practices in their country which they considered to be in conflict with the Stockholm Convention on Restrictive Practices. We have, therefore, thought it right not merely to take powers to enable us to comply more effectively with the E.F.T.A. Convention obligations, but to widen the powers, subject to negative Resolutions by the House, so that we can act wherever any treaty
  1220
  obligation requires us to do so, because in principle this is not a point which is exclusive to the E.F.T.A. Treaty.
  Although this is a short Bill—and I commend it to the House as such—it contains quite a lot of meat. I hope, however, that in view of the history of these matters, and the previous Government"s White Paper, which overlaps the Bill to quite a considerable extent, but not to the whole extent, the House will approve it as a further step forward towards the stimulation of a more competitive and more self-reliant industry in this country.
  Mr. Heath: The right hon. Gentleman has twice said that this is a short Bill in which he is giving priority to the things which he regards as most urgent. He mentioned that he has excluded an amendment to the 1956 Act to block loopholes which have been found in dealing with restrictive practices. Is the right hon. Gentleman arguing that the action he is taking to deal with the occasional Press merger is more important for the economy than blocking loopholes in the 1956 Restrictive Practices Act?
  Mr. Jay: Yes, I am. The loopholes mentioned by the right hon. Gentleman are of some importance, but they are only part of a very large structure of restrictive practices legislation. Although, ideally, if we had nothing else to legislate about this is one of the things which I should like to put right, when we consider the whole field, I do not believe that this is one of the first priorities in the present situation, but I assure the right hon. Gentleman that, in principle, I agree that that is one of the loopholes that we should like to block.
  I hope that the House will recognise that the powers contained in the Bill are not the only step that we are taking along the road to stimulating greater competitive power in industry. There are many others, which some hon. Members will know to their cost from many laborious hours spent in Committee upstairs, but I believe that this is one essential step, on the main purpose of which I hope most of us in the House can reach agreement, towards the rejuvenation of the economic vitality and resilience of industry. I believe that we have great industrial and economic resources in Britain,

  1221
  and that what is needed now in this House and outside is the will to liberate and mobilise these to the full.
  4.29 p.m.
  Mr. Anthony Barber: Owing to my enforced absence from the House for a few months, this is the first real opportunity that I have had of congratulating the right hon. Gentleman on the high office which he now holds.
  I am sure that I express the view of right hon. and hon. Members on both sides of the House when I thank him for the clear exposition of the Bill, which is not lacking in complexity and detail. I know from my experience of attempting to expound the provisions of four Finance Bills that it is not easy to be lucid, brief, and informative, and, at the same time, accurate. I am only sorry that, until a moment ago, there was not a Liberal Member in the House to listen to at any rate the beginning of this very important debate.
  Whatever the President of the Board of Trade may say, in an attempt to claim all the credit for the Bill, he knows, of course—just as well as anybody else who has followed these matters over the past few years—that the theme of the Bill is that which was set out in the Conservative Government"s White Paper in March last year, although, in certain very important respects—as my right hon. Friend has just pointed out—the Bill fails to implement proposals which we would have implemented, had we been in office now, for curbing restrictive trade practices. In other resepects, the Bill has adopted different principles from those which were advocated last year.
  Before I come to that I want very briefly to refer to the history of these matters and to express some general observations about what I believe should be our attitude to monopolies and mergers. Despite what the right hon. Gentleman said, generally speaking—though we have had our differences—there has been a fairly broad bipartisan approach to the actual legislation dealing with monopolies and restrictive practices. But while there may have been a broad approach on the actual legislation, it is apparent from statements made in recent years by those who now occupy important
  1222
  positions in Her Majesty"s Government, that there is all the difference in the world between their attitude to concentration of industry and that of my hon. and right hon. Friends.
  When the Labour Government introduced the Monopolies and Restrictive Practices Bill in 1948, they were closely following—I am sure that the hon. Gentleman will agree—the Conservative Industrial Charter which had been published the year before. Since that Act was passed, successive Conservative Governments have proceeded pragmatically in the light of experience, and so we had the Monopolies and Restrictive Practices Commission Act of 1953 and the Restrictive Trade Practices Act of 1956, and then, in March last year, the White Paper which forms the basis of this Bill.
  While the present Government have put their own gloss on that White Paper, and propose some alterations of considerable significance, I am sure that the right hon. Gentleman will be the first to agree that when he arrived at the Board of Trade he found that much of the preliminary work for the Bill had been completed. Even so, it has taken the right hon. Gentleman over four months to produce the Bill. So much for what the right hon. Gentleman called, "A fertile Parliamentary Session".
  I make no complaint whatever about this delay and I think that the right hon. Gentleman was probably right to take his time. I mention it only because my right hon. Friend the Member for Bexley (Mr. Heath) was severely criticised last year by some hon. Gentlemen opposite for not introducing legislation on monopolies and mergers at the same time as he dealt with resale price maintenance. I am sure that he was right, as the right hon. Gentleman has been, not to rush this legislation, which, whatever measure of agreement there may be, is of the utmost importance, because of its consequences for the efficiency of British industry and so for our competitiveness and our standard of living.
  This brings me to the basic question of our approach to the current trend of increased concentration in industry. Hitherto, the legislation dealing with these matters has not involved any presumption that monopoly or size are, in themselves, undesirable. Indeed, while

  1223
  a monopoly situation may be exploited contrary to the national interest—the White Paper and the Bill, in their different ways, are directed to remedying such a situation—the general advantages of larger industrial units must be apparent to any objective observer, whether these larger industrial units come as a result of mergers or whether they come from the internal organic growth of individual companies and combines.
  It is, therefore, essential that, in our legislation and in the way in which it is applied, nothing should be done to inhibit or to deter desirable mergers. Indeed, they are essential, if we are to make the most effective use of our resources and get the additional exports which the right hon. Gentleman talked about.
  In the first place, many companies which have been taken over in recent years were not fully employing their assets and were not giving an adequate return to their shareholders, which is basic to the capitalist system. Whatever right hon. and hon. Gentlemen opposite may say, this is the system which has been responsible for the great surge in prosperity over the past 15 years or so.
  Secondly, a large proportion of the most progressive British companies have been created through mergers. One thinks of I.C.I. and the British Motor Corporation, and there are many others which I could mention.
  Thirdly, concentration of industry often leads to economies of scale which would otherwise be impossible, to the capacity to employ more efficient management, and to finance a high level of research, as well as to the development of sophisticated marketing techniques and a more effective sales organisation.
  After the lip service paid by the Prime Minister to science and technology, I hope that he will at least agree that, other things being equal, it is often the case that the larger the concern the more likely it is to attract the best scientific and technological brains.
  Mr. Peter Shore: Is the right hon. Member aware that the drift of his argument is precisely the same as has been advanced in the case for public
  1224
  ownership of steel, that is, to bring together a very large number of firms so that we can enjoy the optimum use of a large single enterprise?
  Mr. Barber: I shall refer very briefly in a few minutes to nationalisation of steel, but if only the hon. Member for Stepney (Mr. Shore) would press his right hon. Friends, particularly the Prime Minister, to get on and produce their Bill, we would have a good opportunity to debate it. At least they should produce a White Paper.
  As I was saying, all this concentration of industry is of crucial importance not only to the immediate balance of payments problem with which we are faced; it will become even more important as our foreign competitors speed up the rationalisation of their own industries. As I am sure the whole House would agree, already concentration of industry is more pronounced in the United States, in Western Germany and in France than it is in this country. It is not without significance that, only last Wednesday, the French Council of Ministers announced changes in their taxation system with the avowed objective of stimulating new mergers. In the United States, where there is certainly a stringent approach to restriotionism, the 500 largest manufacturing companies and the 50 largest merchandising companies between them took over 3,700 smaller firms from 1950 to 1961.
  In this country, in a laudable effort to encourage the smaller United Kingdom companies to export more, it is sometimes said in criticism that only 70 companies are alone responsible for 35 percent. of British exports. Whatever other conclusions one might draw from these figures, they certainly illustrate the magnitude of the contribution to the balance of payments made by the larger industrial units.
  I have dwelt at some length on the advantages of the concentration of industry for two reasons: first because, in discussing a Bill designed to deal with developments against the public interest, it is appropriate at this stage to look at the other side of the coin; secondly, I have said what I have because we must concern ourselves not only with the bare provisions of the Bill, but with the way in which the Government intend to apply them.

  1225
  I am far from happy about the almost pathological hostility to big business evinced by some members of the present Administration. It is not without significance that when these matters were last debated in the House—this bears out the interruption of the hon. Member for Stepney—many hon. Members concentrated on the virtues of nationalisation. I shall refer to it only briefly. I know that the President of the Board of Trade takes a different view from many members of his party. As he puts it:
  "We must now make it plain…that we do not believe in the extension of the public monopoly to manufacturing industry or distribution".
  But, of course, if any proposals within the ambit of the Bill are sent to the Board of Trade for consideration, and certainly if they are important proposals in which there is great public interest, the ultimate decision will not rest solely with the right hon. Gentleman the President of the Board of Trade. He is bound to consult his colleagues. We are, therefore, entitled to consider what the reaction is likely to be from those old-hat Socialists in the Cabinet who still wield considerable influence.
  Does the right hon. Gentleman, for example, agree with these sentiments:
  "Where major changes of ownership and control in a vital industry are threatened by takeover bid or merger, the State must be free to intervene, either by vetoing a proposed transaction or by stepping in itself and asserting the rights of the community through an extension of public ownership."?
  That was the policy of the Labour Government not long ago in "Signposts for the Sixties". [HON. MEMBERS: "And still is."] Very well, it still is their policy.
  The Prime Minister himself, I recall, has made it clear, as he puts it,
  "When we say "extend public ownership in any industry," we mean take over, nationalise".
  At least we are becoming a little clearer now that the election is over, but certainly in the General Election and in my by-election there was no mention of nationalisation of this kind.
  Mr. Jay: In view of what he said about the great merits of large-scale concentration, is the right hon. Gentleman prepared to say in advance that he will sup-
  1226
  port any Bill on the steel industry which the present Government introduce?
  Mr. Barber: No. The difference is that during the election I made my views on the steel industry clear whereas the right hon. Gentleman did not.
  Mr. Deputy-Speaker (Dr. Horace King): Order. We have time for only one debate today—and that is not a debate on the nationalisation of steel.
  Mr. Barber: I will leave the steel industry, but there are other forthright if somewhat naïve views which have been expressed by the Minister of Technology and which are highly relevant to the Bill because they are concerned with the control of industry.
  The Minister of Technology said:
  "We…have reaffirmed many times our belief in the basic principle of Socialism, which means ownership and control of industry…we have seen…how the control or a company can affect the whole economy of a big section of our community."
  He continued:
  "…if we cannot control the motor car industry, we shall never be able to say that we will do this or that or the other…"
  Will the right hon. Gentleman give the House an assurance that the powers in the Bill will not be used to implement the sort of doctrinaire prejudices expressed by his right hon. Friends in the Cabinet?
  Mr. A. E. P. Duffy: Let us have a serious debate on the Bill.
  Mr. Barber: If the hon. Member looks at Clause 3 he will see that enormous powers are sought by the Government for dealing with this sort of situation, which has been referred to by several members of the Cabinet. It is, therefore, highly relevant.
  Mr. Duffy: If I am fortunate enough to catch your eye, Mr. Deputy-Speaker, I propose to discuss that Clause, in, I hope, a more responsible and relevant way than the right hon. Gentleman is discussing it.
  Mr. Barber: Perhaps I may conclude by quoting someone of whom I am sure most hon. Members opposite will approve—the Secretary of State for Economic Affairs. He said:
  "The Labour Party, comprised of so many points of view anyway, is united in opposition to the capitalist system of society."

  1227
  What worries us on these benches is not the sweet reasonableness of the President of the Board of Trade, who has seen the light, but the prejudices and the stupidity of some of his most powerful colleagues, who might well override the right hon. Gentleman"s views.
  In the debate on the White Paper, last July, the Minister of State, who, I understand, is to wind up the debate, said that the Labour Government would deal with the Post Office bulk supply agreements. Now that he and his colleagues have had five months in which to consider these matters, is he yet able to tell us whether he has reached any conclusion or is likely to do so in the near future?
  I turn to the details of the Bill. We on this side of the House support the proposal to enlarge the Monopolies Commission to 25 members and to enable several inquiries to be dealt with concurrently. Despite what the right hon. Gentleman said, this is the very proposal which we made last year in the White Paper. I thought that I detected in the right hon. Gentleman"s speech a hint of criticism that it had not been done before, but it was the Conservative Government, in 1953, who increased the number of members to 25, and they were reduced to their present number in 1956 only because of the transfer of work to the new Restrictive Practices Court. With the added work of mergers and services, the decision taken in the Bill is obviously right.
  That brings me to the second point on which we are in substantial agreement —the powers sought by the right hon. Gentleman to call for investigations into the provision of services.
  Mr. Dell: Is the right hon. Gentleman aware that in the pamphlet "Monopoly in the Public Interest", published by the Conservative Party Political Centre, it is stated, on page 27, that the reduction of the Commission from 25 to 10 was a mistake?
  Mr. Barber: The point which I am making is that the right hon. Gentleman seemed to be suggesting that this was the first time that it had ever been proposed that the number should be raised to 25. I was simply pointing out the history of these matters.
  I come to the next point on which there is substantial agreement between
  1228
  both sides of the House, and that is the proposal to call for investigations into the provision of services. This, again, was proposed in the White Paper last year. The field of services is daily becoming of greater importance to the consumer, and it is right that the Commission should be able to inquire into restrictive practices in this field, too. The right hon. Gentleman has gone further than we proposed in that, as he pointed out, the Bill is not limited to inquiries into commercial services, a limitation which, incidentally, last July the right hon. Gentleman thought was right.
  I think that the right hon. Gentleman"s new view is the better one and that he is right in having decided to go further than was originally proposed. But we shall want to hear a little more about how he thinks these new powers will, in practice, be applied in respect of professional services. He told us a little this afternoon, but we shall want to know more, particularly about the likely action in those cases in which there is existing control and discipline in which the Government already have some say.
  Again, the Bill deals specifically in Clause 8 with newspaper mergers. I can deal with this very briefly. There are obvious special considerations to be taken into account in Press mergers, and I therefore agree with the proposal to treat them as a special case to be governed by special criteria. In one most important respect the provisions of the Bill differ from the recommendations of the Royal Commission, and in this difference I think that the right hon. Gentleman has made the right decision. I refer to the decision to refer Press mergers to the Monopolies Commission rather than to a specially constituted Press amalgamations court.
  I should have preferred the latter type of inquiry, but I can see the very real difficulty of stating the criteria of public interest with sufficient precision to create justiciable issues which would be capable of decision in the light of the evidence. With some hesitation, therefore, I have reached the conclusion that the right hon. Gentleman is right to go for an administrative tribunal, although in this important matter, involving not only the freedom of the Press but also the extent of the variety of opinion and news presentation which is available, we shall have to examine the details of the Bill with the utmost care.

  1229
  I turn to the proposals for investigating mergers, and here I must take issue with the right hon. Gentleman. The House will realise from what I have said about certain proposals in the Bill—for example, those dealing with services which are not in line with the last Government"s White Paper—that there is no question of the Opposition wishing to adhere slavishly to our previous proposals when we were in office. Furthermore, I recognise that opinion; as to what is the right course and what is practicable not only differ but are sincerely held. I have considered, I hope, all the various suggestions which have been made for dealing with mergers including, in particular, the report of the committee to which the hon. Member for Birkenhead (Mr. Dell) referred, the committee of which Lord Poole was chairman. I have reached the conclusion that the Government are wrong to take powers to hold up a proposed merger while it is being investigated.
  The right hon. Gentleman claimed that he was being audacious in taking these additional powers, but the real question to be decided is simply: what is the right action, the right powers, to take? I believe that my right hon. Friend the Member for Bexley was right in the view which he expressed last year that such action could well frustrate desirable mergers. I will explain why.
  Mr. Dan Jones: Desirable in the public interest?
  Mr. Barber: First, the proposal in the Bill contemplates that a proposed merger may be held up for six months—or, exceptionally, for nine months—while being investigated and thereafter there is no time limit during which the Government must make an order. It follows, secondly, that during this period it will be quite impossible in some cases for the proposed merger to remain confidential. Thirdly, it is inevitable that during the standstill period, while the investigations are taking place, the share prices of the two companies will often change relative to each other.
  Fourthly, during the standstill period there is nothing to prevent a third party, knowing what is afoot, from buying up a proportion of the shares in the market. Fifthly, what is the position of a third organisation, operating in a totally different sphere, which makes an alterna-
  1230
  tive bid? Since there would then be no question of a monopoly, and provided the assets to be taken over were less than £5 million, the Board of Trade would be powerless to prevent the second bid from going through, although in the national interest the original proposed merger might have been more beneficial.
  These are only a few of the obvious objections to the proposal to take power to hold up a proposed merger. I cannot believe that there will not be cases where these possibilities and others will prevent the merging of businesses in circumstances which would be in the national interest. I see no objection to a power to inquire into a proposed merger; and if the merger had not been completed before the inquiry was concluded then it could be prohibited. Again, I am at one with the right hon. Gentleman in that where a recently completed merger would result in a monopoly, or would increase the power of an existing monopoly, the Board of Trade should be empowered to direct the Monopolies Commission to make an inquiry, and it would then be for the Government to take action.
  In practice, any company contemplating a merger could consult the Board of Trade, which would then express an opinion; and, in practice, in such cases an inquiry would seldom be necessary. The power which the right hon. Gentleman is seeking to hold up a proposed merger assumes an even greater significance, because it may be exercised not only where a merger would lead to or strengthen a monopoly; it might also be exercised under the Bill where there is no monopoly situation, but merely where the assets to be taken over exceed £5 million. I cannot believe this to be right.
  If there is no monopoly situation the exercise of this power connotes a prima facie objection to a merger on the ground of size. Yet, as I said, there is a great deal of evidence to show that the growth of the economy would be helped rather than hindered by more mergers. If it is right that the criteria should not be concerned with a monopoly situation, then surely there might well be mergers involving assets of less than £5 million which, on the right hon. Gentleman"s principles, would warrant investigation.

  1231
  When one takes into account the cost of preparing evidence and conducting proceedings before the Monopolies Commission—to say nothing of the possibilities of a standstill order—one realises that it must follow that many desirable mergers will be deterred. What is the position if a company adopts the alternative method of gaining de facto control—although not 100 percent. ownership—of another company by buying shares in the market? What powers has the right hon. Gentleman got then, assuming that there is no monopoly situation? I cannot believe that this proposal in the Bill will encourage the more effective use of our resources, which must surely be the aim of the Government.
  There are a number of matters which the previous Government had intended to include in the Bill, but which, as I said earlier, I am sorry to see have been omitted. There were various proposals for strengthening the Restrictive Trade Practices Act, 1956. I remember being concerned, on the sidelines, in the discussions which we had last year, when the right hon. Gentleman and his colleagues took the view that they were most important matters which should be dealt with at the earliest possible opportunity. But the right hon. Gentleman has chosen not to deal with them at this opportunity.
  I do not see why it has not been possible for the Government to tackle the various ways which have been devised for circumventing the 1956 Act. My hon. Friends and I regret that the right hon. Gentleman has not seen fit to establish a registrar of monopolies, who would be responsible for making investigations into the facts and setting out the questions and issues involved. There is no doubt that his independence would have been recognised by industry and that a practice would have grown up whereby consultations could take place before there was any question of an inquiry by the Commission. I do not believe that the functions of a registrar of monopolies would have held up the proceedings in any way. On the contrary, I think that he would have been able to facilitate them.
  There are three further brief questions I will put to the Minister of State. Some
  1232
  concern has been expressed to me about the operation of Clause 4, which deals with our treaty obligations. I was rather surprised that the right hon. Gentleman dared refer to our treaty obligations. My goodness, if that is what is in his mind in connection with this matter, the 15 percent. surcharge might come off within a matter of weeks. However, these questions in connection with Clause 4 have caused some concern and I am sure that the Minister will be able to assure those who have approached me.
  First, how is the operation of the Clause likely to effect industry? What sort of action under it does the right hon. Gentleman contemplate? What sort of situation is it meant to cover which is not already covered by existing legislation and the rest of the Bill? Have there been any complaints from our friends abroad? Because of the open-ended nature of the Clause I hope that the Minister will be able to answer these questions tonight.
  My second question concerns an undertaking which was given by a member of the present Cabinet, the Minister of Overseas Development. She promised last year, when we were debating monopolies and mergers, that a Labour Government would introduce amendments to the Resale Prices Act. May we know when to expect these because, as I say, that promise was made in connection with proposals for monopolies and margers?
  My final question is this. The President of the Board of Trade said earlier that this was not the only step which the Government were taking to improve the competitiveness of industry. The purpose of the Bill is to strengthen the powers of the Government and to prevent situations and activities in industry which operate against the public interest. The Bill is concerned with the over-concentration of economic power and with practices which restrict competition and lead to unnecessarily high prices. But, of course, the increasing concentration of industry in Britain has been paralleled by the increasing concentration and power of the trade union movement. As with monopolies of production, distribution and services, so with the trade unions; this concentration of power does not necessarily operate against the public interest. Indeed, in some respects quite the reverse.

  1233
  The fact remains that this is a factor of immense importance. I think that we all recognise that restrictive labour practices can have a crushing effect on consumer prices and on our efforts to become more competitive in world markets. The Government have at last accepted the Conservative proposal to establish an inquiry into trade unions and employers" associations. I understand that the Royal Commission will pay particular attention to the law concerning trade unions. I hope, when we are considering these matters today, that we shall be given an assurance that any abuse of monopoly power by these organisations, together with the whole problem of restrictive labour practices, will be among the subjects to be considered by the Royal Commission.
  It is surely right, also, that we should pay full regard to the public interest in this sphere if we are to maximise the efficient use of our resources, which is the avowed aim of the Government and the Opposition alike.
  5.0 p.m.
  Mr. A. E. P. Duffy: I should have thought that on this occasion. above all, the right hon. Member for Altrincham and Sale (Mr. Barber) would have hesitated to make the claims he did on behalf of capitalism, because we are discussing a Bill which is intended to deal with the distortions and imperfections of a capitalist system which, according to classical economics, ought not to have happened, or ought not to have taken the form they have done. If the right hon. Gentleman and his colleagues were frank with the House they would agree that that is the reason why legislation has been so long in coming forward.
  It is not going too far to say that the whole cause of monopoly legislation was put back by the late Government in the "fifties principally because the then Government did not seem to know which way the economy was evolving, could not make up their mind what was likely to happen, or even make up their mind whether they believed in competition or regarded bigness itself as being the best policy for modern industry, and that efforts to enforce competition should only be at the margin.
  1234
  I do not suggest that these ideas are exclusive. I only say that we have had to wait for a Labour Government with sufficient courage and initiative—at any rate, at the Board of Trade—to tackle the problem and bring those two ideas together. In particular, we have had to wait for a Government that have a clearer idea of the evolution of our economy than hon. and right hon. Members have had. The right hon. Gentleman was, therefore, not making us feel uncomfortable, even if he thought that he was, when he made those irrelevant references in the middle of his speech to nationalisation, as I hope to show later.
  I say at once that the three things required for an effective policy on monopolies and mergers are (1) a Government able to employ relevant criteria as to what constitutes the public interest; (2) a Government will to take strong action when monopolies and mergers are found to be contrary to the public interest, and (3) a Monopolies Commission that can do more work more quickly than has hitherto been the case. I think that, on any fair showing, the Bill promises to do all three, and must, therefore, be welcomed.
  As their predecessors promised last year, the present Government propose, in Clauses 1 and 2, to increase the size of the Monopolies Commission, and to extend its investigations to include professional services. I shall be surprised if, during the course of this debate, many hon. Members do not come forward with their own candidates for early treatment under this head, and I myself am especially hopeful that the Commission will take an early opportunity to look at the discount market. In that way it may help monetary policy to recapture some of its lost effectiveness.
  The need for this has been quite clear since the Radcliffe Committee reported over six years ago, and what that Committee said has been repeated recently by the Porter Commission in Canada. The Radcliffe Report stated, that a more vigorous use of interest rates would strike at liquidity over a much wider spectrum of financial institutions, whilst the conclusion of the Canadian Royal Commission on Banking last year was that the prime reason why the rival financial institutions have fared so much

  1235
  better than the banks in periods of tight money lies in the fact that their interest rates are usually far more flexible than those of the banks.
  All this does not take us beyond last year"s White Paper, but the Bill breaks some important new ground. It gives the Government the power to apply a "standstill" to take-over bids pending investigation. It seeks to control newspaper mergers of a certain size. And it allows the Monopoly Commission to investigate mergers whether they are likely to lead to monopoly abuses or not, provided that the firms taken over have assets of over £5 million. Until my right hon. Friend the President of the Board of Trade spoke this afternoon I was worried in case mergers would be judged more by the size they brought about than the market dominance they created. I was, therefore, grateful to hear my right hon. Friend"s assurance on that point.
  This depends on the use the Government make of their new powers, as does everything else in the Bill. It is important that they should be used against monopoly in all its restrictive forms. Here I am with the right hon. Gentleman opposite that—as, indeed, was said by my right hon. Friend—the powers should not be used against mergers that produce the large industrial groups that Britain needs to compete effectively against increasingly fierce foreign competition. I also agree with the right hon. Gentleman about the Government"s fundamental approach, which is the neutral one.
  There is no automatic assumption in the Bill that mergers are against the public interest, and that is fundamentally right. I do not think that the hon. Member for Bournemouth, West (Sir J. Eden) need now show the same sensitivity as he did when we debated this subject on 6th July. We on this side recognise the need for mergers. As I have already said, we can see reasonably clearly the way in which our economy is evolving, and in this respect our attitude is a good deal more consistent than is that of the party opposite. There is a good deal more agreement on this side about mergers and monopolies than there is, for instance, between the right hon. Gentleman and his right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell).
  1236
  We recognise that the pace of bids and mergers has shown no sign of slackening since our debate on 6th July last, and I think that we shall see 1965 as another active year of bids and mergers in industry. That is due to many reasons. There is the drive for efficiency, about which most of us showed concern just a year ago, new power forms, new techniques of production, automation, excess capacity and diversification of industry as capital seek to spread its risks. Interestingly enough, fear is also a prime factor; even the biggest firms are seemingly being driven inexorably to expand as a condition of survival. Some pundits have argued in the last year or two that the safety zone is considered to be as high as £75 million.
  Moreover, industrial needs are changing fast and the size and structure of companies must reflect that change. As my right hon. Friend the President of the Board of Trade also recognises, a merger may offer that opportunity to achieve marked economies of scale in production and distribution, and that better use of resources, so that even if competition is reduced that merger is justifiable. In any event—and here I go beyond what has already been said in the debate—industry is too fragmented if it is to cope with foreign competition, and needs more mergers rather than fewer.
  Most of this was conceded in last year"s White Paper, but it watered down the merger proposals to the point at which they were almost certain to be ineffective, whereas if the public interest is to be brought to bear at all it must be done in such a way as to have some chance of being effective. Bringing the public interest to bear upon the action of monopolists should be the principal aim of the Bill.
  I therefore regard Clause 3 as the crux of this Measure. That is why I hope that we will debate it seriously, and if I thought that the right hon. Gentleman was not doing so earlier, I hope that he will forgive me, because I was concerned with the Bill rather than with his own remarks, and I welcomed everything that he said subsequently.
  The prosecution of the public interest will only be truly effective if the powers invoked in the standstill period, as well as the threat to force firms to divest

  1237
  themselves of assets, do not, on the one hand, hold back desirable schemes of rationalisation nor, on the other, frustrate a monopolistic merger that promises to produce more good than ill. Because, in many areas of the modern economy, oligopoly is the conformation to be expected—natural or otherwise. I believe that to argue that this is not so is greatly to delude oneself or to refuse to face facts.
  The argument that a monopoly position leads to inefficiency and reluctance to innovate, or to exploitation of a captive market, may apply to some situations but not all. Here again, I do not think that the right hon. Member for Altrincham and Sale gave sufficient weight to the extent to which we on this side recognise this. We do recognise that monopolies can produce economies of skill, better facilities for research, and often better management. That is why we have urged the nationalisation of certain groupings of companies. This is why we have regarded nationalisation as the logical combination of certain developments in our economy. Moreover, large industrial giants do at least have the advantages of mass production techniques and great financial resources.
  This is why there is a great need, which I hope the Bill will meet, to develop some basic criteria for judging whether a merger is in the public interest. We have little choice but to start with the assumption that competition is desirable, because in an uncompetitive market prices and profits are likely to be higher than necessary for the long-run survival of efficient firms. I said this a year ago on resale price maintenance. It still needs to be said again and again. However, there is a very important qualification to be made, because, if the experience of the United States is any guide, we may have to move beyond that point—indeed, in many respects we have already done so—to the assumption that firms cannot be forced to compete and that an environment must be created in which competition is more likely to develop than otherwise. Emphasis at that point must be on the regulation of concentrations of economic power.
  In view of what my right hon. Friend the First Secretary of State and Secretary of State for Economic Affairs is doing,
  1238
  and of all that I believe both sides jointly hope about the direction of overall economic planning, including pooled development programmes and concentrations on long-term economic groupings, judgment of what is in the public interest will have to proceed from further advanced assumptions. I refer to new forms of pressure which tend to put the emphasis on business co-operation and co-ordination rather than reliance on sheer self interest and the invisible hand. Whether the right hon. Member for Altrincham and Sale accepts this argument or not—he need not —he will understand why we take the view we do about nationalisation and perhaps he will respect a little more than he did our attitude towards nationalisation.
  We believe that the criteria that we apply to nationalisation, the criteria we apply to competition, and the criteria we apply to what is in the public interest, as they are enshrined in the Bill, must be relevant to a dynamic economic situation that is even more dynamic this year, I have already argued, than it was last year and certainly more dynamic than it was 10 or 20 years ago.
  I take it one step further. It may be necessary for a firm to have a virtual monopoly of the home market for a particular product if it is to compete effectively overseas. The work of the little N.E.D.C.s will undoubtedly be of assistance here, for the work of the little N.E.D.C.s will help us to determine what sort of structure is needed in various industries if this desirable competitive position is to be arrived at. I am looking forward to the day when the little N.E.D.C.s come up with some reports which will, in fact, endorse attitudes that we adopted years ago and which will support what my hon. Friend the Member for Stepney (Mr. Shore) presumably had in mind when he put his question to the right hon. Member for Altrincham and Sale. I am sanguine that the little N.E.D.C.s will come up with reports which will make a case for near, if not outright, nationalisation. They will point to the kind of structure which will be needed in various industries if the right competitive position with overseas producers is to be arrived at.
  Yet, interestingly enough, this development to which I am looking forward very

  1239
  hopefully has its dangers. It has dangers of undesirable anti-social collusion. For will not the work of the N.E.D.C.s in bringing businessmen together, both to push exports and to ensure forward planning of capacity, set a premium on information agreements? In the light of this, information agreements are undoubtedly desirable, because ill-informed estimating of future markets by businessmen is not their strongest point. Yet, as we all know, there are desirable and undesirable information agreements and the difficulty remains of distinguishing the one from the other.
  The problem does not end even when we can confidently point to the better type of information agreement, because it is impossible to say a priori whether better information will increase or restrict competition. Knowledge of competition costs may encourage efficiency, but it may also enable prices to be set so that business friends are not ruined. Exchange of information on projected capital expenditure may make possible the construction of plants near optimum size, but it will also show other producers when one of their number is increasing his share of the market at their expense and enable them to take action to maintain the status quo.
  Yet—I am sorry to have to make this criticism, though it is only a muted one—there is no provision in the Bill for information agreements. Important though it is that the Bill will confer on the Government the power to require the publication of price lists by the firms concerned, or even fix the prices themselves—and I welcome this—this is not enough by itself. An anti-merger policy must be accompanied, in my view, by stronger action against information agreements as well as price-fixing agreements. For differing degrees of market power do exist in almost all industries, and producers have to elaborate marketing strategies instead of accepting their price from a purely competitive market.
  Nevertheless, despite this small criticism, my right hon. Friend is to be congratulated on his Bill. Though it is largely an inheritance from the Conservatives, it is clearly more comprehensive and promises to be a much more vigorous Measure than anything the former Government contemplated. Nevertheless, I hope that it is only an interim Measure. I hope that the reason why we have got
  1240
  this "short" Bill, as my right hon. Friend put it, is because of the congested Parliamentary timetable. Anything that strengthens the Government"s weak powers against undesirable business concentrations and promises to tune up the competitive tone of our economy is becoming more and more imperative.
  Yet efficiency is only a relative concept. If the return on invested capital is the essential criterion, all kinds of investment can be justified that are in fact socially irresponsible. So any consideration of public interest must have regard to social as well as economic criteria.
  This is my last point. My constituents are not well placed to judge the technical merits of monopolies and mergers, but they can fairly gauge their social implications. There are some interesting developments taking place in my constituency at the moment, developments which I will not go into now in case I, too, should be guilty or irrelevancy. "The wool textile industry, on which so many of my constituents are dependent for their employment, is undergoing a slimming process and is being subjected to larger groupings.
  I received a letter only last week from a constituent who is employed by Little-woods Ltd., Grove Mills, Gynn Lane, near Huddersfield, which was acquired by Bradford Dyers" Association in the 1930s, which now, in turn, has just been taken over by Viyella International Ltd. On the face of it, I have no quarrel with that—how could I, in view of what I have said?—but I have a quarrel with the way in which it has gone about it. I have a quarrel with many things that it has done, but principally the compensation which it has offered my constituent. Afer 36 years employment with the firm, he is offered £4 10s. for each year of service.
  We hope that there is legislation already in the pipeline—legislation on severance pay—to deal in part with this. I hope that is not the only legislation which will be introduced to deal with this kind of development.
  At the Oldham end of my constituency, at the Lees Paper Staining Company, of Springhead, there is great anxiety on the part of management and workers alike about pensions benefits and long-service bonus pay because that company

  1241
  is subject to a take-over bid by the Reed Paper Group. Interestingly enough, the Lees Paper Staining Company is not a small or isolated firm. It is a member of Wall Paper Manufacturers Ltd. This is a most interesting development. What is equally interesting, and unlike the other case, is that both management and workers are filled with apprehension.
  I welcome this Bill, with the small criticism that I have made. I hope that this kind of legislation will be followed by more legislation which will deal with the social implications, and that we shall be as mindful in this House of the social criteria of what is in the public interest as well as with the economic criteria.
  5.21 p.m.
  Sir John Vaughan-Morgan: With much of the speech of the hon. Member for Colne Valley (Mr. Duffy) I agree. Perhaps I can refrain from further comment on his speech, since I do not know about his constituency points, although I know that his constituents expect more electrifying orations than that to which he treated us today.
  This is in no way a complaint, but I regret that the President of the Board of Trade is not here at the moment. I wanted to congratulate him myself, not only on attaining his office but on reverting to the ancient and honourable title of President of the Board of Trade. I was never very happy when that ancient office was snuffed out by the heavy and cumbersome title that his predecessor enjoyed. I wanted to say that to the right hon. Gentleman in person; even though I regret that with the advent of the Department of Economic Affairs the Board of Trade is pushed a bit further down the hierarchic scale.
  From all the speeches which have been made so far it is quite clear that the Bill is not opposed on Second Reading. I believe that for the first time in many parliamentary days that there is no Government Whip at the door of the Members" Lobby to prevent them leaving, no angel with the flaming word "No" to stop them going about their other business. Certainly, the Bill has a very respectable pedigree. It is largely based on our White Paper, and where it is not based on our White Paper it has taken suggestions from the
  1242
  Poole Report, to which an hon. Member referred who, apparently, did not realise that four or five of my hon. Friends were members of that Committee. May I say that I agree entirely with the criticism which they and he made.
  The Bill has been decorated with some individual and rather idiosyncratic features by the right hon. Gentleman. It is clear what has happened. The right hon. Gentleman has been the "shadow" spokesman in this matter for his party for many years. He has made many utterances in that capacity. Now the shadow has suddenly become substance. He reaches his office and finds the Bill in draft on his table. He says, "This will not do." He tells the assembled officials, "Search through my past speeches. Pick out the relevant bits and amend the Bill accordingly." This accounts for its slightly mottled appearance, which is true blue with pink spots—pale pink, of course, for the right hon. Gentleman is not exactly an extreme Left-winger. No wonder the Bill will need careful examination in Committee.
  We are also entitled to ask where the Bill stands in relation to other Government Measures. My right hon. Friend the Member for Altrincham and Sale (Mr. Barker) referred to the Resale Prices Act, which incidentally, the right hon. Gentleman did not support on Second Reading. He claimed then that the Bill was out of time and that this Bill should have been introduced instead. One is entitled to ask: would he have introduced the Resale Prices Bill? I have my doubts. Has he any proposals for amending the Act?
  In the debate on 6th July, the right hon. Lady the Member for Blackburn (Mrs. Castle) answered an intervention of mine when I had said:
  "If the hon. Lady thought that the Bill would smash the small shopkeeper, why did she not vote against it?"
  My right hon. Friend the Member for Bexley (Mr. Heath) then added:
  "Does that mean that the hon. Lady will make resale price maintenance lawful again next Session if her right hon. and hon. Friends get back into power?"
  The right hon. Lady then said:
  "We shall introduce far more adequate safeguards on the basis of a survey of the situation and the economic consequences in retail distribution which the Government have never been prepared to undertake."—[OFFICIAL REPORT, 6th July, 1964; Vol. 698, c. 66].

  1243
  I should like to know what the right hon. Gentleman"s intentions are, whether this survey is taking place, when the Report is likely to be issued and whether we are to have legislation later, This has now become important, now that the Resale Prices Act is beginning to bite and become effective. So far as I can see, the only noticeable improvement is that I find my razor blades are considerably cheaper, but I am waiting for future benefits to come. [AN HON. MEMBER:"Whisky?"]. I am afraid I was already stocked up.
  The general issues of the Bill were debated in July. Inevitably, there will be a little repetition of some of the points which were raised then, but I wish to mention two particular points which I then raised and which unfortunately were rejected. First, I refer to the name of the Monopolies Commission. I always thought it was a misnomer, because a 30-percent. share of an industry is not truly a monopoly. That is not the correct word and the name has now become hopelessly inappropriate. If we were to have a correct title in the spirit of the existing Act and of this Bill, it should be "The Monopolies and Mergers and Other Restrictive Practices, particularly of Press Mergers, Commission", which is not really suitable.
  It is time to get a better public image of what the Commission is trying to do. We should copy the United States of America and call this the National Trade Commission, because it now has very wide terms of reference for policing trade and industry generally.
  The second suggestion which I made on 6th July—and, in many ways, it is the more important—relates to the numbers of members of the Commission. The right hon. Gentleman takes great credit for having restored the numbers to 25. It was raised in 1953 to 25. The right hon. Gentleman has referred to the fact that at that time he criticised the 1956 Act because it reduced the numbers. With all the virtue of hindsight, I think that he was right. It was an error on the part of the Government of the day to reduce the numbers to 10 and this has been pointed out many times. But I think the right hon. Gentleman himself is now falling into the same error that we fell into in 1956.
  1244
  The right hon. Gentleman is on record as saying on 6th July, 1964:
  "We are, of course, to have a larger Commission again; but it is also to have the job of investigating mergers, and, on balance, I do not see any evidence that the delays of the past are likely to be lessened."—[OFFICIAL REPORT, 6th July, 1964; Vol. 698, c. 56.]
  That is with a membership of 25. I think that he was right at that time, but he has been proved wrong by what he proposes in the present Bill.
  Consider the change in the volume of work since 1953. First of all, there is the immense need to speed up the operations of the Commission. There have also been additions to the work in connection with mergers and services. So I am sorry that the right hon. Gentleman has ignored my proposal of July that the President of the Board of Trade should have powers to add to the membership of the Commission by Statutory Instrument.
  It seems particularly odd to me, since in Clause 8, dealing with Press mergers, the right hon. Gentleman is taking exactly these powers. I should like to see this much greater flexibility applied to the Commission"s work as a whole. When I first made this suggestion it was blessed by the present Minister of State for Economic Affairs, it received benevolent approval from the then Minister of State, my right hon. Friend the Member for Taunton (Mr. du Cann) and was criticised only by my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke).
  There are other changes which are clearly entirely the handiwork of the President of the Board of Trade. I regret the abolition of the proposed Registrar of Monopolies. This was a very sensible proposal. There is and will always be in industry a lingering suspicion that the Commission cannot and should not act as both prosecutor and judge. I should like to know whether, before removing this proposal, which was put forward in the White Paper, the right hon. Gentleman has consulted industry in any way, whether he consulted the Commission or at least its chairman, or whether he has consulted anyone other than his own past commitments on this point. I hope that it will not be accepted by him that it is wrong merely because it was put forward first from these benches.

  1245
  The right hon. Gentleman is not a very doctrinaire man in these matters and I should like to think that he is more sensible than that.
  I refer also to the power to intervene before a merger takes place, as opposed to the intention in the White Paper. I do not wish to rehash all the arguments. They are fairly evenly balanced, but I think that the proposal in the Bill may inhibit some mergers from taking place. I am sure that this is wrong. I should have thought that the present powers would have been quite sufficient to prevent any company from proceeding too far with a merger if it was made aware, as it could be without these drastic powers, that a merger was likely to be frowned on by the Board of Trade. This seems to me to be bound to create delays, confusion, and uncertainties which will hinder the much-needed process of rationalization in certain industries.
  I should like to ask the right hon. Gentleman one or two other rather pertinent questions. He referred to the great takeover battle between I.C.I. and Courtaulds. I hope that he has refreshed his memory with the report of that debate. He pleaded then for an inquiry to take place and he stated again today how desirable it would have been then had the President of the Board of Trade had the powers which he is taking today. I should have thought that this was one of the classic occasions where the ability to prevent a merger beforehand would have had an undesirable result. In the event, the merger did not take place. If an inquiry had been put in hand, what would have happened? We would not have had the information which was suddenly forthcoming from Courtaulds and which was the reason ultimately why the I.C.I. bid was defeated. This is a shining example of why the President of the Board of Trade should not have powers to intervene.
  I am sorry that the right hon. Gentleman is not here, because I should have liked to remind him, also, that in that debate both he and I criticised the then President of the Board of Trade very much for his inaction in the matter of the Report on the holding of Imperial Tobacco in Gallaghers. We found ourselves absolutely at one on that occasion. Perhaps the Minister of State will deal
  1246
  with this point when he winds up the debate. I should like to know whether, when he has powers to do so, the right hon. Gentleman is proposing to review that decision, or, to be absolutely correct, that indecision, because he will now have the power to force the Imperial Tobacco Company to divest itself of its holding in Gallaghers. If he does he will have the warm applause of at least one Member on this side of the House.
  I turn, in particular, to Clause 3(3,c) which will need the most careful scrutiny. As it stands it will confer upon the Minister almost unlimited powers to fix prices. There will be no limit in time or extent. I am not saying that some powers on these lines are not right, but there is a danger that unlimited powers to this extent should be used for political purposes. We shall need to scrutinise these very carefully and to define far more closely than is done in the Bill the manner in which these powers stand to be used.
  In short, this shows that the Bill will need word by word examination. I can see that there will be some long and very interesting sessions in Standing Committee.
  5.36 p.m.
  Mr. Bernard Floud: I find myself in agreement with a number of points made by the right hon. Member for Reigate (Sir J. Vaughan-Morgan). I will not itemise them all, but I am certainly in agreement with him on what may be the somewhat minor point about the name of the Commission. Up to date, the name of the Monopolies Commission has been meaningless to a large proportion of the electorate. We need to find a name which will bring home to people much more clearly what this body will do.
  I am particularly glad to have the opportunity of intervening in the debate, because 17 years ago, when the first Monopolies and Restrictive Practices (Inquiry and Control) Act came into force, I was responsible, as a permanent civil servant in the Board of Trade at that time, for some part of the administration of that Act. I played no part in the formulation of the Bill, or in the discussions when it was going through the House. I came fresh to that job when the Act had been passed into law, and, naturally, I was concerned immediately

  1247
  to try to make myself as knowledgeable as possible about it and about the problems with which it was intended to deal.
  I was struck by certain things straight away. First, there was the fact that the Act made no judgment at all on the desirability or undesirability of monopolies or mergers, that is to say, we were not following the American outlook in this matter. Secondly, I was struck by the fact that the Act seemed to me, at any rate, to be rather inadequate in the powers which it possessed but I was assured and was given to understand at that time that it was hoped that persuasion and force of example would achieve all or almost all that was necessary and that it would be only necessary to use positive powers on a comparatively small number of occasions.
  The third point with which I was concerned was that it seemed to me, even at that early date, that this would be an exceedingly slow-moving process. It seemed that the referring of individual cases to the Commission, its investigation and report and action might be far too slow to achieve any substantial effect. But, here again, I thought that there were hopes at that time that the power under that Act to make general references to the Commission would be used to a considerable extent and that when one had a number of reports on a number of different industries, all with certain features in common, it would then be the intention to make a general reference to the Commission and action, possibly of a legislative kind, would be and could be taken to deal with practices of a general kind.
  A good deal has happened, and a good deal has not happened, during the 17 years since that Act was passed. There have been several items of legislation since that time, culminating in the Bill now before the House. Unquestionably, the general mood not only in the House, but in the country as a whole, has changed from what it was in earlier years. There is now a greater determination on both sides of the House to try to ensure that there is real competition and that, where monopolies exist, they should be judged and action should be taken if it is found that they are failing the public interest.
  1248
  The new powers granted to the Board of Trade under the Bill will, I think, be welcomed on both sides of the House, because the previous powers were clearly inadequate to deal with the situation. But I was concerned, many years ago, and am still concerned to a considerable extent, as was the right hon. Member for Reigate, about the slow operation of the whole process. If the House will forgive me, I should like to bring to its attention—it may know already—just how slow this process has been since 1948.
  There have been 38 references made to the Commission since 1948. Thirty-one of those references were made in the first 10 years, up to 1958, and since then, in the last six years, there have been only five references made at all, one in 1960, one in 1961, two in 1963, and one in 1964. That is how the references have gone, but inevitably, the process of producing reports has lagged sadly behind. Twenty-two reports were produced before 1958. Since that time, there has been one in 1958, one in 1959, two in 1961, and two in 1963.
  At present, there are four matters under consideration by the Monopolies Commission on which it is ultimately due to report. One of those was referred to the Commission in 1960. We understand that there may be a report on this within a few months, but it will have taken five years to produce that one report. Two of the references outstanding were made in 1963 and one in 1964. As to when we shall receive the reports on those matters there is no intimation at all.
  It must be clear that, alongside this process of legislation over 17 years when only 25 to 30 matters have been dealt with effectively, the general tendency towards monoply and towards mergers has enormously quickened. Many of us who fought, either successfully or unsuccessfully, in the 1959 election will remember how hon. Members opposite were going round the country with lists of the 500 firms which, they said, were threatened by nationalisation if the Labour Party was returned to power. The Labour Party was not returned to power at that time, but, since 1959, about 100 of those 500 firms have, in fact, been gobbled up by other firms.
  What steps have been taken over these years to speed up the process of getting

  1249
  reports and getting action taken? Right hon. and hon. Gentlemen opposite are entitled to take credit for the fact that the 1953 Act increased the size of the Commission from 10 to 25 and enabled it to work in groups. But, as has been said already, they went into reverse in 1956 and removed those powers. The new Bill will restore the size of the Commission and its ability to work in groups, but I entirely agree with the right hon. Member for Reigate when he says that he doubts whether this will be adequate in view of the wider range of the Commission"s duties.
  I draw attention now not only to the membership of the Commission, but to the question of its staff. Bearing in mind that few of the members of the Corn-mission are full-time, it is inevitable that a very large part of its work will be done before it actually comes before the Commission, that is to say, it will be done by the officials. There were 37 members of the staff of the Commission in 1949. The number had grown to 102 in 1954, and then it was heavily slashed following the Restrictive Trades Practices Act, 1956, and, since that time, there has virtually been a steady reduction in the size of the Commission"s staff down to a figure of only 34 in 1964.
  I hope that my hon. Friend will be able to give an assurance not merely that the membership of the Commission itself will be increased to 25, but, also, that it will be given adequate staff to do the job, to service the Commission and to get on with the inquiries. I realise that this is not a question of numbers. It is also a question of ensuring that the Commission is in a position to obtain information quickly. There is no doubt, as the President of the Board of Trade said in his opening speech, that many firms have been extremely slow and extremely reluctant to provide the Commission with information and have used every stalling method possible in the hope that this would delay the outcome of the Commission"s deliberations.
  I hope that my hon. Friend will say something also about general references. So far, since 1948, there has been only one report of a general character. This was on the subject of collective discrimination. It was referred to the Commission in 1952 and reported on three years later. It might be said to have led
  1250
  to the Restrictive Trade Practices Act, 1956 and also to have played some part in the Resale Prices Act of 1964. But that process took 12 years to mature and, if we are to have action on these general practices, which may or may not be against the public interest, we need to speed things up considerably. There was one other reference of a general character made to the Monopolies Commission and that automatically lapsed, or was allowed to lapse, after the passing of the 1956 Act.
  If progress is to be made, and made much more rapidly than it has been in the past, if we are to keep pace at all with the processes of merger and monopoly in this country, if we are to have any control over these processes and not merely be lagging behind all the time, then not only must the Commission be adequate in size and be adequately staffed, but action must be taken when necessary, with the powers which it has, and which we now hope to increase—they have been rarely used, on only two occasions in the past—and we must have more general references at the appropriate time, these general references also being acted on as speedily as possible.
  There are important new features in the Bill which I welcome. I refer, first, to the inclusion of professional and commercial services. It was clear to those who were intimately concerned with the administration of the first Act that services ought to have been included at the very beginning. I regret that it has taken 17 years for us to bring the question forward now.
  I have two other points to raise with reference to newspapers and mergers. I do not propose to say very much on these, but there is one aspect of the newspaper problem to which I must refer and, in so doing, declare some kind of interest myself. I am concerned, and I should like to hear something from my hon. Friend about it, not only about mergers as between newspapers, but about mergers as between newspapers and other media of information.
  We are now in a situation where a majority, I think, of the independent television companies have a substantial part of their shares held by newspaper companies. I am not saying that this is necessarily against the public interest. I am saying that this joining together of what

  1251
  to my mind should be two competitive media of information should be looked into. I would welcome a statement from my hon. Friend that the Government are concerned not purely with newspaper mergers but mergers of newspapers with other media of information. I was very glad to hear from the President of the Board of Trade that, while the Measure applies to mergers, it also covers mergers of a diversifying nature, which seems to me to be absolutely essential.
  Finally, it seems to me that whether or not the Measure is a success will depend to a very large extent on the considerations which made previous Acts either a success or a failure—that is, on the determination of the Government in power whether the machinery is to be properly used, whether references are to be made speedily, and, the most important question, whether action is to be taken. I sincerely hope—I have every confidence in my right hon. Friend the President of the Board of Trade—that we shall now see not a witch hunt against monopolies and mergers—that is not what we want at all—but very much more serious attention being paid to the matter than has been the case for many years.
  5.52 p.m.
  Sir John Rodgers: The speeches, including that by the hon. Member for Acton (Mr. Floud), have demonstrated clearly that there is a large consensus that approves of the Government taking powers to strengthen and extend their existing powers to deal with the problems of mergers and monopolies.
  I should have liked to be able to congratulate the President of the Board of Trade on the way he introduced the Bill. However, it is always baffling to me why a man who, in his private relationships, is always so magnanimous, always acts in a waspish way when he gets to the Dispatch Box and tries to score petty debating and party points.
  The Bill emerges from the White Paper published a year ago by the previous Government. The President of the Board of Trade maintains that the Bill is more "audacious" and introduces measures not mentioned in the White Paper. But even the "audacious
  1252
  measures" derive in large part from the pamphlet which has been mentioned. I thought that it was a little less than generous to try to score party political points when we are agreed that the Bill is good and do not propose to divide against it.
  Mr. J. T. Price: I am glad that the hon. Gentleman has made that remark. I do not think that anyone would charge me with making petty remarks of that kind, and I do not intend to, but if we are to look at this as grown-up men we must admit that the right hon. Member who represents me in the House—the right hon. Member for Altrincham and Sale (Mr. Barber), who has recently returned to the House—made petty polemical points. I was prepared to deal with them at an appropriate stage of the debate.
  We ought to discourage this kind of thing. There are issues of principle here on which we have sometimes to make party points in the common interest and not be mealy-mouthed about them. Indeed, I would point out that to me the Bill is far short of what it ought to be.
  Sir J. Rodgers: I am grateful for that intervention, which was almost a speech. I agree that we ought to quarrel about principles, but it is childish to try to claim credit for small points when there is no necessity for it.
  One "audacious suggestion" made by the document entitled "Monopoly and the Public Interest" was the bringing into being of a new servant of the Crown called the Registrar of Restrictive Practices. I shall be referring to that later. I hope that when we come to Committee we can reintroduce the idea and that the President of the Board of Trade will give sympathetic consideration to it.
  I am glad that throughout the Bill and the debate there has been recognition of the fact that it would be wrong to approach the problem in any spirit which would suggest that mergers—or monopolies for that matter—necessarily operate against the public interest. What we must have in the situation that we are now in is the greatest possible flexibility. It would be equally wrong to pursue an over-rigid policy for trying to control mergers and monopolies. That

  1253
  would cause far more damage to the economy than just leaving things alone and pursuing a policy of laisser-faire. It requires a very sound balance as to how far we intervene and on what occasion.
  Recent events have clearly demonstrated that large-sized units are of great advantage to the economy. In debates in the House over the last few weeks the whole subject of the aviation industry has been brought under the microscope, and there is no doubt that the larger units are required there. It is equally true that even if we had the largest units, even nationalisation, it would still probably be necessary to seek international co-operation in the development of supersonic aircraft. Therefore, we are in a sphere where not only national considerations, but international considerations as well, must be borne in mind. This will prove true not only in the aircraft industry, but in such emerging industries as electronics, computers and telecommunications.
  Reference was made by my right hon. Friend the Member for Altrincham and Sale (Mr. Barber) to the advantage that accrued to the motor industry when it amalgamated and formed larger units. For the first time it was able to deal with the aggressive competition from the American giants. In spite of the small number of units now, I am not sure that it would not be still better for the British motor industry if there were even fewer firms. With only two or three firms in an industry, one can get just as much fierce competition in regard to pricing and quality as from a myriad of small competitors. We should not be afraid. In the soap industry, for example, there are only two or three giants, but they compete with ruthless efficiency against one another.
  In considering that whole question of mergers and monopolies, we must avoid, on the one hand, trying to introduce legislation which would favour small companies and, at the same time, we must not persecute large companies merely on account of their size.
  Most people would agree that since the war this country has suffered in its economy—we are seeing the effects today —not from too much internal competition, but from too little. The danger was
  1254
  that even the large units in British industry are not too ruthless and aggressive in their determination to score over their competitors, but that both management and organised labour in those firms have become too complacent. This has resulted in a sluggish attitude towards industry and particularly towards exports, and it has led to inefficiency.
  There is no doubt to anyone who has studied our economy since the war that the large companies have proved very humane and good employers of labour and conscious of their human and social responsibilities. The trouble very often is that the large companies have pursued policies which make life easier for them. They believe that what is good for management and for organised labour is necessarily good for the customer. Very often this is not so. The customer has been excluded from the consideration of the easy life. The idea that what is good for labour and management is good for the customer contains dangerous fallacies.
  This manifests itself in inflated wages and salaries, over-staffing at all levels, expansion of amenities and fringe benefits, and, above all, a resistance to change. Change—sometimes rapid, sometimes gradual—is the one thing which is essential. It often makes them very uncritical and wasteful even of their resources, both of manpower, capital and research facilities. I therefore welcome the Bill, which will do something to put a jerk into the economy.
  With the hon. Member for Acton and my right hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan), I am delighted that the Bill seeks to extend the operation of the Monopolies Commission into services. I am certain that, in retailing alone, there are many aspects which should be carefully watched. Many amalgamations are taking place which may or may not—I do not know—operate to the public benefit Quiet mergers of retail chains are being carried out which should be watched. I welcome the proposed extension not only to services, but to professional services as well, although the extension itself must be carefully watched.
  I am worried about an extra power given by Clause 3(3,c) which seeks not only to compel publication of price lists, but, without a time limit, gives power

  1255
  to impose prices. The right hon. Gentleman said he would not exercise these powers very much, but hoped they would work by persuasion. But they are enormous powers and we shall have to debate this aspect very carefully in Committee. Who will decide the prices? At what intervals will they be reviewed? How long will price control continue over a firm? Will it be the continuing responsibility of the Commission to investigate the activities of large scale organisations and to fix prices ad infinitum? Is this a device to help the Secretary of State for Economic Affairs in his prices and incomes policy? How will it operate? It is not spelt out in the Bill. It could lead to abuse and to economic nonsense.

  ROYAL ASSSENT
  6.2 p.m.
  Message to attend the Lords Commissioners:
  The House went:—and, having returned;
  Mr. SPEAKER reported the Royal Assent to:

  1. Consolidated Fund (No. 2) Act, 1965.

  2. Armed Forces (Housing Loans) Act, 1965.

  3. Superannuation (Amendment) Act, 1965.

  4. Ministerial Salaries and Members" Pensions Act, 1965.

  MONOPOLIES AND MERGERS BILL
  Question again proposed, That the Bill be now read a Second time.
  6.15 p.m.
  Sir J. Rodgers: I want to refer to the setting up of a Registrar of Restrictive Practices, but before doing so, I should like to refer to the new powers for dealing with newspaper mergers. Like the hon. Member for Acton, I am a little worried about whether the provision goes far enough. For instance, I do not know why it excludes magazines and other publications. Why should it be confined merely to the daily and weekly Press and not bring in the local Press and the wider media of communications? This is a
  1256
  consideration which will have to be looked at
  carefully.
  However, my main reason for intervening is to suggest that we should take monopolies and mergers out of politics, not only out of party politics, but politics as a whole, as much as possible. It would have been advisable to have set up an independent office of the Crown, as described by the committee which I mentioned and of which I was deputy chairman. This new office of Registrar of Monopolies would be analogous in some ways with the Registrar of Restrictive Practices. He would be an official adequately supported by a staff and responsible for referring cases to the Monopolies Commission. This would do a great deal to allay the undoubted suspicion of many businessmen who feel that to be referred to the Monopolies Commission is in some way to be found half guilty, the view being that the Monopolies Commission is judge, jury and prosecutor, which is not consonant with normal British procedures.
  Obviously, in the ultimate analysis it must be for the Government of the day to decide what action to take on the recommendations of the Commission, or what further powers or legislation may be required, but if there were a Registrar of Monopolies, he would be responsible for collecting and presenting evidence to the Commission, which would add to the speed at which the Commission could work. If he had an adequate staff, he could, in consultation with industry, prepare briefs very much more quickly, which would relieve the Commission of a great deal of its preliminary work.
  I very much welcome the idea of having separate groups of the Commission in order to speed up the work but, as has been pointed out, the powers under the Bill are now extended to include not only services, professional and commercial, but special cases such as newspaper mergers. While the President of the Board of Trade may poke fun at us for having at one stage reduced the numbers of the Commission, enlarging its numbers to 25 is utterly inadequate now. Why should the powers not be extended, as with newspapers, so that there can be people with special knowledge of particular subjects, temporary commissioners, so to speak, who

  1257
  could be brought into supplement the Commission?
  It would be for the Registrar to determine which mergers were calculated to result in market dominance, for instance. He would determine which should be referred to the Commission and in what order of priority. Under the present procedure, irrespective of which party is in power, one is always under pressure to refer this and not that and one is asked why is this or that industry but not the other referred. One is asked whether there is not some party political consideration behind doing or not doing something. My proposal would take the matter out of party politics to a considerable extent.
  It would be for the Registrar to prepare the case to be presented to the Commission, and that would relieve the Board of Trade of many of its headaches. Such a registrar could have power to hold up a merger until the Commission had recommended on whether it would operate in the public interest. In my view, it should be illegal to proceed with a merger until the Commission had made its recommendation. I do not believe that this would cause a great deal of delay. Obviously, there would be chaos if it took years to make a decision, but many mergers now require much preliminary negotiation and a good deal of information has to be given to other bodies, such as the Stock Exchange, and I see no reason why a confidential and private intention of merger should not be given to the registrar, who could then pronounce upon it. The present rate of progress has been lamentably slow. The combination of the appointment of a Registrar of Monopolies with an adequate staff and the enlargement of the Commission by bringing in people with specialised knowledge on specific inquiries would do much to speed up the work.
  In addition, it would be only right and proper that firms contemplating mergers should have the right to go privately to the Registrar and tell him of their intentions and seek his advice as to whether, in his preliminary view, they should be proceeded with or not. There would be the reserve power of remitting the matter to the Monopolies Commission if he proved wrong. It would be of great assis-
  1258
  tance to business houses if there were someone, not a party politician, who was intimately associated with the subject to whom industrialists and others could go to talk over proposed mergers. I do not believe that the point of confidentiality would be breached in that way.
  It is essential that before a Monopolies Commission hearing such a person as a registrar of monopolies should be empowered to send the companies concerned a statement of the case which would include an indication of the recommendations which he was seeking from the Commission. In this way they would be saved a good deal of wasted time because they would know the case which would be made against them and for which they had to prepare a defence; whereas at present they go before the Monopolies Commission with stacks of figures and papers not knowing which particular aspect of their business will come under scrutiny. Such a power as this would be of great benefit in speeding up the work.
  The Commission should have power to hold up mergers and should take powers, whether there is a Registrar or not, to compel firms to divest themselves of certain assets if this has been recommended. I very much welcome the extension of these powers in the Bill.
  As I say, the one thing which alarms me is the whole question of fixing prices. We will have to consider this matter most carefully in Committee to find out exactly what is the machinery and how long it operates because, to my mind. this could be a most dangerous power to give to any Government, of whatever persuasion, unless it is circumscribed.
  I support the suggestion of my right hon. Friend the Member for Reigate that the name "Monopolies Commission", which has always offended me, because it is a nonsense—30 percent. of a market does not make it a monopoly in the strict sense of the word, and is not understood by the public—should be changed. I hope that a better name can be found for it.
  I am sure that the Bill will receive an easy passage today, but I am equally sure that the Committee stage will, perhaps, be very long and protracted.
  6.23 p.m.
  Mr. J. T. Price: The hon. Member for Sevenoaks (Sir J. Rodgers) has addressed the House so agreeably and in such a good-natured and well-intentioned manner that I hesitate to say anything critical of his remarks. But I think it should be said in this House that there is an increasing tendency in our debates to say that we should take this or that question out of politics and that we should resolve ourselves into a Council of State, as we are all reasonable men. The hon. Gentleman, who spoke in such a pleasant manner, has added another matter to the list of things which should be taken out of politics—monopolies and mergers.
  The list of things which we are told should be taken out of politics is already lengthy. We have been advised in recent months to take education, National Insurance, defence and foreign affairs out of politics. My colleagues who know me well know that I am anything but a bigoted politician, but I am becoming restive about all these proposals to take every controversial issue out of politics. This would be a very bad thing, for the simple reason that it would reduce us to a set of dishonest people who could not face up to the real issues and argue the merits of them.
  Sir J. Vaughan-Morgan: I agree with a great deal of what the hon. Gentleman says, but surely he will understand that what has happened in this case, and what happened in the case of immigration which we discussed last week, is that these issues have been taken out of party politics because the Labour Party has, in the main, taken over our policies.
  Mr. Price: That is as may be. I should be out of order if I started to debate that matter. Perhaps I have left myself open to a jibe of that kind. I know that the right hon. Gentleman tries to be fair, but sometimes he falls short of his own high standards.
  I am prompted to intervene very briefly in the debate for two main reasons. First, after some months" absence from our counsels, we have had the return of the right hon. Member for Altrincham and Sale (Mr. Barber). I am glad to see him in his place, because I happen to live in that part of the world and he is my Member of Parliament. Therefore, I have a
  1260
  special and more personal interest in what he said than would normally be the case. I always treated with respect what he said in his previous incarnations as Financial and Economic Secretary to the Treasury, Minister of Health and almost Pooh-Bah. He had a very good record in this House, and I always listen to what he has to say with respect, apart from liking his personal qualities, as he is well aware.
  People talk about polemics in this House, but the right hon. Member for Altrincham and Sale will forgive me if I say that there is no more polemical politician in the House than the right hon. Gentleman. He never seems to miss an opportunity of scoring a party point. When I heard him say today that during the last fifteen years the only thing which has made this country tick over has been the capitalist system, I wondered whether I was dreaming or whether he was talking a lot of bosh. He forgets that the industries which are not nationalised in a mixed economy, to which my right hon. Friend the President of the Board of Trade referred very fairly, ticked over only by a combination of forces. If there had not been a tremendous increase in and expansion of the power industries, particularly electricity and gas, British industry could not have made the very substantial progress which it has made.
  Some of the private sectors of industry have been able to tick over only because they have been able to attract public money into their coffers. They could not raise sufficient money on the market to finance them. This applies, for example, to the steel industry. Special facilities had to be provided. The right hon. Gentleman will know from his previous incarnation at the Treasury of the great transactions with Colvilles Ltd in Scotland. That concern had a great capital development programme which it was unable to finance from the market. I should be the last person to raise these polemical issues if they had not been raised from the benches opposite. I want to be fair about them and to face up to them. When we speak polemically or in a doctrinaire fashion—I am the least doctrinaire Member of this House, or one of them—[Interruption.] I am not doctrinaire in the sense that hon. Members opposite would have the public believe

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  we are all doctrinaire in this House. I am a Socialist. I am not afraid to say it in the House, and I will continue to say it, but I am a Socialist concerned with practical politics. I am not fobbed off by the idea that right hon. and hon. Members opposite who detest the idea and principles of Socialism are still able to take advantage of a great deal of public money for their friends in private industry.
  Let me refer—and I believe that this is strictly germane to the Bill—to the aircraft industry. If ever there was a vast monopoly in this country, it is the aircraft industry. We have had a lot of trouble and many debates in the House about it. We shall never agree about it. I suppose that we will go on disagreeing about it.
  The fact is that the Conservative Government set up a two-headed monopoly in the aircraft industry. They set up the British Aircraft Corporation and the Hawker—Siddeley Group on the other side. I could give chapter and verse to anyone who is interested that because of the merging of many subsidiary firms into those two great groups, with a great injection of Government capital to make it possible, we have outside those groups the independent pillars of capitalist society whose principles are so strong that they have resisted becoming part of this monolithic organisation. Many of these small service companies which are still operating as independent capitalist undertakings are unable to obtain orders from the great corporations because those giants are concerned only with servicing their own subsidiaries who came over into the grouping with them. This is something that should be mentioned in this House, and there may be occasions when we can go more fully into it.
  The right hon. Member for Altrincham and Sale made another rather interesting, to me even fascinating, proposition when he spoke about capitalist ethics. One cannot speak about capitalism purely as an economic phenomenon. One has to speak of it in ethical as well as economic terms. The right hon. Member complained that if the Government were given these powers under this modest Bill to hold up for six or nine months or longer of inquiry a major change which was referred to the Commission, this would in
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  some way detrimentally affect the prices of the equities in the undertakings concerned. Of course it might. But one cannot make omelettes without cracking eggs. Who should suppose that no inconvenience would be caused? Who should suppose that anti-monopoly legislation could affect its purpose without hurting anybody or causing inconvenience to somebody?
  Let us take the converse side of the picture. If two companies or a group are to he merged by, for want of a better term, some monopolistic tycoon who is the majordomo in the operation, it is not only the shareholders whose interests might be affected by the outcome of his proposals; it may be thousands, and scores of thousands, of workers and technicians, officials and people whose lives are involved in the industry and who may become redundant. Surely, when one looks at the modest scope of the Bill, one would not expect that kind of point to hold much weight in serious discussion.
  My right hon. Friend the President of the Board of Trade, in what, I think, anyone would agree was a modest and restrained approach to the question, dealt with the basic consideration of an asset value of more than £5 million as a criterion under which a proposed merger should be referred to the Commission. That was one of the criteria. I can think of many other undesirable monopolistic practices which would not be caught by that kind of criterion. It might be one which is useful, but there are many highly specialised products which are more or less monopolistic—
  Sir J. Rodgers: As I understand the Bill, there are two criteria. One is the size of the firm and its share capital of £5 million. If it is not caught under that criterion, it can be caught, even if its capital is much smaller, by being simply in the monopoly position.
  Mr. Price: That, I think, is the intention, but I am referring to the dichtomy between the two considerations, the purely financial holding aspect and the function of the company in society.
  Imperial Chemical Industries is a wonderful, vast capitalist undertaking. I am not sure that all the directors of I.C.I. are capitalists. Most of them are functionaries. They are not people who hold

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  much capital in industry. They are functionaries in the capital held amorphously by millions of people outside who take no part in the management of I.C.I. It is about time that in this House, in debates of this kind, we stopped kidding ourselves that these great amorphous undertakings, whose stocks and shares are held in thousands of portfolios throughout the world, are in some way private enterprise. They are nothing of the kind, because the people who are functionally managing them, often men of brilliant capacity and interested only in the efficiency of their industry, are not particularly concerned with the financial return for the company. That is a secondary matter. The right hon. Member for Altrincham and Sale was less than correct in referring to that.
  Let me take one particular monopoly situation which does not seem to be dealt with in the Bill. We can forget about the test of capital, but let us take the test of commodity. Let us take an item like soda ash, for example, a chemical which is universally used in a thousand and one other processes, which is a complete monopoly of I.C.I., and which is known to be sold at a completely ridiculous, unrealistic price in relation to its cost of production but the price of which is always sought to be justified on the ground that it is a return for a good deal of the research and development which has been put into other products. If we in this House are seriously concerned to bring down the cost of living, we must look closely at many basic commodities the cost of which enters into the cost of so many other commodities.
  I do not wish to pursue that point further but will conclude what I have been saying with two short references, one of them to an intervention which I made during the speech of another hon. Member and one to some remarks which I made after listening to some of the speeches from the benches opposite. My right hon. Friend the President of the Board of Trade said that the Bill would apply to services as well as to commodities. I ventured to intervene shortly whilst my right hon. Friend was addressing the House about a service which I regard as being unfair exploitation, and that is the function of costs and works accountancy. I know that my hon. Friend the Member for Heywood and Royton
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  (Mr. Barnett) has a professional interest in this matter and if I say anything with which he disagrees, I will be quite willing to give way to him.
  The whole of the inflationary spiral is correctly diagnosed as stemming largely from the colossal inflation in land and property. One of the contributing factors is the automatic 8 percent. which is added for the surveyors and valuers who do the costing and the like. That is a fantastic increase.
  Mr. Joel Barnett rose——
  Mr. Price: My hon. Friend should not get excited. I will give way presently. That is a fantastic, unrealistic addition to the costs of the building industry, and there are many others which I could talk about for quite a long time off the cuff.
  Mr. William Shepherd rose——
  Mr Price: Just a moment. I will give way presently. There are several other things on which I could address the House at length and uninhibited. I am concerned with doing something in this House to put a brake upon the monopoly abuses which have artificially increased the cost of commodities to the ordinary people.
  Mr. Barnett: In his original intervention, my hon. Friend did not, perhaps, intend to do so, but he gave the impression that cost accountants, to whom he referred, were causing increases in price. I am sure that he did not intend to give that impression, because the reverse is the case. Perhaps I should declare a general interest as an accountant. Surely, my hon. Friend would agree that the reverse is the case since accountants in industry are helpful to the economic structure of the country in reducing prices generally.
  Mr. Price: I would not wish to be unfair to any professional body and I accept the implied rebuke. Perhaps I ought to have said quantity surveyors, which is what I intended to say. If I got it wrong, I humbly apologise, because the last time I attacked any professional body in this House, and I have attacked the legal profession vigorously on a number of occasions, I received a spate of letters from irate and indignant members of the profession saving that I did not know what I was talking about. That did not, however, deter me in the slightest.
  Mr. Shepherd: The hon. Gentleman complained about the costs of professional services relating to building, though he did not say so in such specific terms. Would it interest him to know that his wonderful Ministry of Public Building and Works charges Government Departments over 20 percent. for services which are obtained outside at less than half that amount?
  Mr. Price:Well, I am grateful to the hon. Gentleman for drawing the attention of the House to that, and putting it on the record. If a Ministry were doing that it would not find me in very warm support of it, whether a Labour-controlled Ministry or another, for such a practice would be quite indefensible, unless, of course, some special reasons were produced for that sort of charge adding one-fifth to the costs of production.
  I apologise for having made a longer intervention than I intended, but there have been a lot of interruptions and I have tried to give way to everyone who wanted me to give way. Of course, for what is the purpose in this House except to debate? What is the purpose of burning the midnight oil in reading briefs? Our purpose is to stand up and say what it is we believe, and some of us try to do that, rather clumsily sometimes perhaps, but nevertheless we do.
  I am a little disappointed with this Bill. It is only a modest attack on a major problem which I should like to see dealt with in a rather more forthright manner. I do not think I shall be alone in saying that no tycoon concerned with mergers and monopolies will lose any sleep over this sort of Bill. For the last 17 or 18 years we have been tinkering with this sort of legislation. One of my hon. Friends behind me, who has now left the Chamber, spoke of the small number of things which have been referred to the Commission and the Court. Even in those cases in which the Commission has reported adversely upon monopoly practices no action has been taken. It has just been ignored. There have been no sanctions taken by anybody. In spite of having the Commission and the Court, plus ce change plus c"est la même chose—if that is what the lawyers call it.
  Mr. Patrick Jenkin: Without wishing to prolong the hon. Member"s intervention, may I
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  ask him whether he would not agree that, following the report on the supply of industrial gases, the action taken by the British Oxygen Company was fully in accordance with the recommendations of the report?
  Mr. Price: That is an exception which proves the rule. There were some exceptions. I am obliged to the hon. Gentleman for mentioning that. He is quite right, but there are many others which took a quite different line. I happen to be a Lancashire Member of this House, having had something to do with a famous Lancashire industry which is not so large as it used to be, and on which there was a very adverse report, and as the right hon. Gentleman the Member for Altrincham and Sale will remember, because he was at the Treasury at the time, nothing was done about it. That is the sort of thing we get. It is no use bellyaching about it in this House.
  I want to sit down, but somebody keeps getting up to question me. However, one further shot from the locker, if hon. Gentlemen will allow me. The greatest monopoly in this country is not a commercial or manufacturing monopoly. It is a financial monopoly. I say honestly as a Socialist, that anything we do to restrict the unnatural, anti-social practices of monopoly will always be defeated so long as we are faced with a financial monopoly which can erect all kinds of holding companies to do what they want to do and which are not covered by some other branch of the law. I know that that matter is incapable of being debated in this short debate, but I think it appropriate to mention it.
  Although if there is a Division on the Bill I shall support it, I do not think it goes anywhere near as far as I would wish in dealing with monopoly practices which, in many directions, go diametrically against public interest by artificially increasing the prices of the goods which everyone needs in his everyday life.
  6.44 p.m.
  Mr. Charles Fletcher-Cooke: Like the hon. Member for Westhoughton (Mr. J. T. Price), I am a Lancashire Member. I totally disagree with him about the lack of effect which orders and recommendations and court judgments have played in the history of this branch of our industrial and commercial activity

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  since the 1948 Act. The vast majority of the recommendations of the Monopolies Commission have been voluntarily adopted and faithfully observed. As for the orders of the Restrictive Practices Court, if the hon. Member was thinking, as I think he was, of the order of the Court relating to the cotton spinners" agreement, all I can say is that, although much disliked by the industry at the time, it was faithfully observed, to the great benefit both of the country and, eventually, of the cotton spinners themselves.
  I think this is a good Bill. It has some ommissions, which I deplore. It has omissions about information agreements, the reasons for which I simply do not comprehend. It has omissions about our proposals for a Registrar for the Monopolies Commission by which a great deal of the sting of unfairness to which the President of the Board of Trade himself drew attention in another connection would have been removed.
  But it has some novelties, most of which I welcome. I think it is quite right to bring services in, and professional services particularly. The hon. Member for Westhoughton will find that a great many of his suspicions about wicked and secret practices of professional men, when so exposed, as I welcome they should be, to the scrutiny of the light of day, will fall to the ground like scales. I know the hon. Member will accept that as far as accountants are concerned. I welcome that this scrutiny may be turned upon lawyers, because we have nothing to fear.
  I gathered from what the President of the Board of Trade said when he mentioned this aspect of the Bill that he contemplated a general report after a general reference of services—whether of professional services as a whole or whether simply of some, I do not know—followed by legislation which might produce some judicial process. I think that was his word, or else it was judicial-procedure. In other words, somewhat of a repetition of events from 1952 to 1956 as they were for combinations for the purpose of trading restrictions. I think that is a very good precedent.
  We had some very good action as a result of judicial process set up by the
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  1956 Act—which, at the time, was much criticised by the party opposite because, it was said, this was not a justiciable process; but in fact the reports of the court have been of the utmost utility, have been very firm, have not caused the outrage among lawyers or laymen which was anticipated and prophesied by many of the party opposite, but which, in fact, as I say, have been of benefit to all. I hope there will be some repetition of this with proper judicial decision at the end, with proper criteria laid down in advance, as was done in the 1956 Act. I would ask the hon. Gentleman who is to reply to the debate whether that is the intention of the Government.
  Divesting degrees in the case of monopolies we are to have for the first time. The Americans have had it for years. I think that is a perfectly proper weapon in the armoury of the Government. I am not sure why we have not had it before or why we did not have it in the first instance.
  Price control as envisaged in Clause 3(3) seems to me far too severe if it is to be in this unlimited form. It seems to me that the way in which it should be limited is this, because of the dangerous political potentialities about a Government order. This is very hot party politics. It would make the Clause far more acceptable both to industry and to hon. Members on this side of the House if such price regulation could only follow a recommendation of the Commission itself. As I understand it at the moment, although a report of the Commission may not recommend this, either as an immediate remedy for a monopolistic situation, or as a long-stop in a case where industry refused to accept some sort of voluntary arrangement, then if, and only if, the Commission recommended price regulation I think it might become slightly more palatable to hon. Members on this side of the House. But if it is to be produced out of a hat without any such prior recommendation by what is a non-party and independent body, then I think we view it with immense suspicion, and I hope that we shall fight it strongly.
  The biggest novelty of the Bill is the question relating to mergers, and here I do not think that the House has realised what a large step forward it is being

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  asked to take. For the first time the Government are taking powers not merely to stop a merger before it takes place. That is the novelty which has hitherto been concentrated in the Bill. Much more than that, they are asking for powers to forbid or divest a merger in which conditions of monopoly do not apply, or may not apply, but merely because more than £5 million is involved, even if a very small proportion of the market may be involved.
  That raises all sorts of new concepts, new philosophies, and new thoughts, and I do not think it enough for the President of the Board of Trade to leave us simply with that on the plate without saying what sort of criteria he and his successors at the Board of Trade are going to apply in such cases. In the case of the monopoly test, we know pretty well what the criteria are in a broad sense. We know, for example, that if competition is likely materially to be reduced, that is a good reason for intervening, and either stopping the merger before it takes place, or breaking up the monopoly, in the technical sense of the word, subsequently. We understand that, but what are the criteria where no conditions of monopoly apply, and where only 2 or 3 percent. of the market is involved?
  I had somewhat suspected that it was a question of where foreign interests were bidding. My right hon. Friend the Member for Bexley (Mr. Heath) intervened during the President"s speech, but I do not think that his question was directly answered. I am not saying that it is necessarily wrong to step in in the case of a foreign bidder where one might not intervene in the case of a domestic bidder, other things being equal, but we would like to know whether that sort of consideration is in the Government"s mind, and if that is the reason for this great departure into uncharted seas by the erection of this second criterion which we have never had in this legislation before. Is that one of the reasons?
  Is another reason, and this may be a good one, that if the organisation that is threatened is fighting against a takeover bid, it should have greater protection, it itself should be protected, whereas it would not be protected in similar circumstances, merely from the point of view of the public interest, if it was a willing victim, or a partner in the enter-
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  prise? Is that suggested as a possible cause of distinction, and is that one of the reasons why this £5 million criterion is added?
  The second reason that I suggested may be a good one, because in this connection the right hon. Gentleman mentioned the sort of take-over bid the motive behind which is not monopoly at all, but diversification. He mentioned that specifically, and this struck me as immensely interesting, because it is just such a take-over bid which my constituents, the Wall Paper Manufacturers, are being threatened with at the moment. They are not, I think, threatened with the sort of body which would increase in any material sense the monopolistic structure of the industry. After all, it has already been through the mill of the Monopolies Commission and with one or two adjustments has come out pretty unscathed. The bidder in this case, the Reed Paper Group, is not at the moment in any material sense engaged in the manufacture of wallpaper or in any of the similar activities of W.P.M. It is obviously a bid for diversification by the Reed Group, and not a merger which will produce a bigger monopoly situation than already exists.
  It has provoked the most enormous resistance, not only from those at present managing W.P.M., but from all the staff —and I ask the Government to believe this, as I think they know—who have spontaneously put out statements objecting to this take-over bid. Ninety-eight percent, of the staff, down to foreman level, which is something quite new in British industrial life, have said that they do not want this take-over to happen. They think the present organisation is perfectly equipped to do its task and they do not wish for any change.
  That may or may not be a reason why there should not be a change, but I am instancing this case to ask the hon. Gentleman whether it is this sort of situation which the Government have in mind in introducing this new test. It is not only a new test, but a totally vague one. The only thing that we have to cling to is the arbitrary figure of £5 million, and I hope that when the hon. Gentleman replies he will tell us the sort of conditions in which the Board of Trade will refuse protection for a take-over or a merger which comes under

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  Clause 6(1,b), but does not come under paragraph (a), the anti-monopoly test. The right hon. Gentleman refused to specify this, and we must be told what the Government have in mind.
  It is only the Board of Trade—and this is one of the important features of this —which under the legislation as drafted can refer the case to the Monopolies Commission as a matter of urgency when there is a take-over bid. The victim cannot do so, and in the Wall Paper case, as the hon. Gentleman knows, the President of the Board of Trade has written to me and to others refusing to intervene, not merely on legal grounds, because he is not sure, owing to the time-table, whether he has power to do so—I believe that he has, but I do not want to argue that—but also because he does not think that it would be a suitable case, or rather that he would not wish to commit himself on whether this would be a suitable case, or not. Let us put it in that neutral way. I should like the hon. Gentleman to tell us why it would, or would not, be a suitable case if there were not this legal objection in addition, because I think it would be a good illustration, it would give the House some idea of the sort of way in which this revolutionary proposal is likely to be administered, and I appeal to the hon. Gentleman to address himself to the matter.
  The prevention of mergers is likely to be a blunt and rather damaging instrument, and some of my hon. Friends object to this power. I do not object to it with the same force as they do. I think that unless it is very carefully handled, it may cause difficulty until we have learnt to live with this new machine, but I think that we have to learn to live with it. and I am sure that the necessary consequential adjustments in our industrial, financial, and commercial life will be made.
  There is no doubt, as the hon. Member for Colne Valley (Mr. Duffy) said, that a great many take-overs and mergers are good, are inspired by motives of economic efficiency, and will do the country a great deal of good. I do not think that many of them are inspired by bad motives in the classical sense, in the sense that there is some wicked monopolist wishing to get a corner in the market and then raise prices because he has a monopoly. I do not think that there are many of them
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  about in the world today, if only because of the substitutes which there are nowadays for so many commodities, and if only because of foreign competition, which is going to get greater and greater.
  But there is a third motive, which may be just as bad, and that is the motive of fear, the motive which says, "If we do not gobble up somebody we ourselves will be gobbled up". This is, on the whole, a bad motive, which is why I support the extension of these powers in the way the Bill proposes, because fear produces fear. The fear of my constituents, from the executives and administrators down to the foremen and the men actually printing the wallpaper and making the paint is—unconsciously perhaps but nevertheless really—a by-product of the sort of fear which the take-over bidders, the so-called "grabbers", have, that if they do not get in first they will themselves be swallowed up.
  That is why we have to have powers to break this vicious circle; I hope they will be kept in reserve and used sparingly, but their existence is important. If they are used delicately and with confidence, we shall find that the fears of some of my friends will not be justified, nor will those of may hon. Members on both sides of the House which were expressed when we passed the 1956 Act, and I dare say, though I was not in the House at the time, when the 1948 Act was passed. We have moved a long way, and it has been a bipartisan effort. It is quite absurd for either side to try to score small points off the other. This is a great, successful attempt to produce in this country a competitive industry and a competitive commerce, and, now, a competitive professional atmosphere. I wish the Government well. This is not the modest Bill which the President said it was; it is a comparatively long Bill, containing many novelties. We shall have to deal with them at great length, I am afraid, in Committee, but its lines and its aims are right, and I hope that we get it on the Statute Book.
  7.2 p.m.
  Mr. Edmund Dell: I have listened to the speech of the hon. and learned Member for Darwen (Mr. Fletcher-Cooke) with great interest, particularly his remarks on the subject of mergers. My own view is that it is right that these powers should exist, but I

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  think that they will have to be used very sparingly. This is one of the subjects of debate which appears to engender a great deal of agreement, certainly between the Front Benches.
  This is one of those Measures which was half-cooked in the previous Government"s kitchen and is now served on this Government"s table. I welcome it, but I cannot say that I welcome it with any enthusiasm. I wait for the next Bill which the President of the Board of Trade has promised us. I do not believe that this one, as it stands, is likely to add greatly to the efficiency of British industry.
  All legislation on this subject since the war—the Bill is no exception—has been based on the general attitude that we should take a neutral and uncommitted view of monopolies, contrary to the view taken, for example, in the United States of America, where a monopoly is judged to be bad in itself, and monopolising has often been severely punished. One reason, no doubt, for the attitude taken in this country, as compared to that taken in the United States, is that the United States can—perhaps far more easily than we can—afford to take that attitude. It has a very large market, within which it can have a series of very large units in competition with one another. We, on the other hand, have a small market, within which it may appear that to achieve the economies of scale, to have the finance with which to do the necessary research, we have to have monopolies or very large industries.
  But, in fact, monopoly is not the necessary consequence of the small U.K. market. There are, after all, at least two ways of expanding. The first is by monopolising the home market; the second is by advancing in exports pari passu with advances at home. It is a pity that this second way is so little regarded. Exports are of the very essence of any economic problem which this country faces.
  I have read two pamphlets, one by the Bow Group and the other by the Poole Commission, both published by the Conservative Political Centre. Without reservation, I say that they are two very good pamphlets. They have one curious characteristic, which is that, in them, the problem of exports is barely mentioned. It seems to me that this problem is the essence of the question of monopolies, as
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  embodied in the Bill and other legislation. There is, in fact, no limit to the markets open to British firms, if they have the energy to export.
  We want to fix our minds on the idea of the export-oriented company. The export-oriented company—if one may use that phrase—is one which achieves its economies of scale and pays for its research by exporting 40 or 50 percent. or more of its total turnover. I suppose that the type of the export-oriented company is the great Swiss chemical companies, Ciba, Sandoz and Geigy. They are firms with a negligible home market, but, on the basis of technical and commercial effort of the highest quality, they have succeeded in becoming dominating forces in the world chemical market.
  In this country too, we have such export-oriented companies which achieve their economies of scale and finance their research not just as a result of expanding in the home market nor by monopolising more and more of the home market, but as a result of exports. The car firms mentioned earlier are an example of this. B.M.C. exports one-third of its total turnover, Ford exports nearly a half, Vauxhall exports over 40 percent. There are other examples and I could mention B.I.C.C. and others.
  On the other hand, there are firms which have achieved these alleged economies of scale and have expanded by monopolising the home market, but whose export record is pathetic. If anyone in this country wants to buy oxygen he probably has to go to the British Oxygen Company, which exports 8 percent. of its turnover. If he wants to buy tubes of a certain size, he may well have to go to Tube Investments, which exports 9 percent. of its turnover. These are figures which were recently published in the Financial Times.
  It may not be possible for every large firm to be export-oriented, but the onus should, in my view, be on them to prove that they cannot achieve the economies of scale or finance research, without increasingly monopolising the home market. We should start with the idea that private monopoly is bad, not only if it acts directly opposed to the public interest but if it fails to take full advantage of its size and efficiency to

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  promote its own efficiency, its research and its exports. We should require from any monopoly the most rigorous and continuous justification for its existence.
  I will refer to the pamphlet, "Monopoly and the Public Interest", because I think that it agrees with something which I will say. I believe that the Board of Trade should be able to demand from monopolies, or from many large firms which are nearing monopoly position, regular indices of their efficiency. I think that this pamphlet says more or less the same thing, when it says that the powers
  "… should certainly include the power to require from a monopoly regular returns of information of a type for which there is no other statutory authority…"
  I agree with that.
  The sort of information which I think that the Board of Trade should be in a position to demand from any monopolistic firm is information which will enable it to decide whether that firm exports enough. I would say that high exports which involve meeting competition in the world market are, in themselves, normally a justification which could be produced against a charge of monopoly. A large firm should know what proportion of the world market in a particular product it commands, and I believe that that information should be available to the Board of Trade on request. Every large firm should be required by the Board of Trade to provide details of its target exports, and if those target exports are too low, it should be asked to explain why. If they are not achieved, again it should be asked to explain why. I do not in any way regret the powers in the Bill on the subject of prices. I think that information about prices should be available from monopolies at the request of the Board of Trade. There is also the need to be able to refer single firms to the Monopolies Commission and not just industries.
  The Government, in my view, should be prepared to act very strongly against monopolies. There are far too many sleeping monopolistic firms—for example, Courtaulds, until it was awakened by the I.C.I. bid. There are various ways in which it is open to a Government to awaken sleeping monopolistic firms. They can perhaps lower tariffs and thus
  1276
  encourage the firm in the home market by the threat of imports. The difficulty about that method in the present economic situation in this country is that the balance of payments may not always allow it, and in any case there are certain products—plastics, in particular—where the marginal cost of the foreign exports may be so low as to permit dumping and the type of competition which would destroy the home industry rather than wake it up.
  Another method which is open to the Government to encourage such sleeping monopolistic firms is the refusal to grant Government contracts to them. This action might cause certain difficulties. I feel that one of the best methods, if not the best method, open to the Governmen in taking action against sleeping monopolistic firms is rapid investigation by an independent commission followed by strong Government action.
  This brings me to a point in the Bill about which, I must confess, I am not satisfied. I refer to the proposal which has been made, and which, as far as the arguments which have been deployed so far are concerned, I continue to accept—and that is the argument in favour of having a registrar of monopolies. It seems to me that the principle of divided responsibility which has been used to justify this idea—that the Registrar will assemble the facts and refer cases, whereas the Monopolies Commission, with the assistance of the Registrar, will assess these facts and judge them—is a very good principle. It is particularly important that there should be an independent person who, without Board of Trade permission, could refer monopolistic companies and monopolistic situations to the Monopolies Commission.
  I say this with a great deal of respect, and of course it applies to Governments of whatever party, but in these days the links between Government and industry are becoming closer and closer. The Government deals with bodies like big Neddies, little Neddies, the British National Export Councils and the like. The links between Government and industry are getting closer and closer. I should like to see an independent person who will have the responsibility of referring monopolies and monopolistic situations to the Monopolies Commission

  1277
  without the specific permission of the Board of Trade. Of course, it would have to remain with the Board of Trade what action might be taken subsequently. At any rate, reference should be made independently.
  One of the troubles in dealing with this whole monopoly situation over the years h is been the lack of action by the Board of Trade. This, of course, occurred in the time of the previous Government. I do not want to be accused of making a party political point here, any more than I should, but it unfortunately remains true that the Board of Trade has not been remarkable for its enthusiasm in following up monopolies. Under the 1953 Act it became possible to appoint a Monopolies Commission of 25 members. I think I am right in saying that the number of persons actually appointed never reached even 20. In other words, a great deal less work was being done, and there had to he a great many fewer references, than the legal limit of 25 might have permitted.
  There is also the question of speed. The fact that we are now to have 25 members and that they are to be able to work in groups may enable a larger number of industries to be investigated simultaneously. It does not mean that any particular investigation will take a shorter time. If there is a single individual who is responsible for ensuring that these inquiries are speedily conducted, then they are more likely to be speedily conducted than if they are dealt with within a somewhat amorphous and unidentifiable staff on a Monopolies Commission.
  I also do not understand why the Bill places a limit on the size of the Monopolies Commission. Compared with the 1953 Act, we are adding mergers and services, and restrictive practices have been taken away. In addition, we shall have to deal with newspapers, but it will be possible to co-opt a few people, up to five I think, to assist inquiries into newspapers.
  I consider that this limit of 25 may well prevent enough inquiries from going on simultaneously, and I should certainly question that any limit was necessary. I know that it is said that it is very difficult to find the right sort of people
  1278
  —and maybe it is. Maybe, on the other hand, the difficulty in finding the right sort of people has been due to lack of enthusiasm on the part of those who, in the past, have been searching for them. I believe that if we really want to tackle this problem of monopolies as it should be tackled, then we shall have no difficulty in exceeding the number of 25, and if we can do so, I cannot see why we should not do so.
  I should like to ask the Minister of State, who will be replying to the debate, one or two questions about the Bill. I have read—I was not here at the time—that in the debate on 6th July on the White Paper of last year he referred to the necessity to control the operation of international companies. He referred, particularly, to the oil companies, which have found it convenient to make their profits elsewhere than in this country; and, of course, this is something which international companies find it only too easy to do. It is something which occasionally benefits this country as well as sometimes harming it—although possibly not to the same extent as in the case of the oil companies.
  It is also in the power of international companies to decide how they will supply their exports—from which of their manufacturing plants distributed throughout the world they will supply them. If we are to have foreign investment in this country—and I have no objection in principal—then we should know the answer to the question: from where will such companies supply their exports? I think that there is a need for the registration of any provision that a British subsidiary of a foreign concern is prevented by internal agreement from competing with its parent concern or its other foreign subsidiaries in particular markets.
  Mr. J. T. Price: I am interested in what my hon. Friend is saying in this part of his speech. He may or may not be aware that the matter which he criticises goes much further than he has explained. For example, the House, about seven or eight years ago, in the Finance Bill of 1957, passed a special Section dealing with the Overseas Trading Corporations, which granted taxation relief to foreign-based subsidiaries of British registered companies, which were able to retain the profits made overseas

  1279
  and thus in no way make a contribution to the British Treasury from those profits. I have often protested in the House about it. This is something which I should like to see a Socialist Administration put right. It is quite wrong.
  Mr. Dell: I thank my hon. Friend for that intervention. I have some knowledge of the workings of international trade and investment, and I know of some of the things which go on. It is because of this that I refer to this point about the control by international companies of exports supplied from their different manufacturing plants.
  I should like to raise, in the mildest possible way, especially in the light of the remarks of the Prime Minister over the weekend, one controversial constitutional point. I would like to know why the other place—I think that it is right to call it such—is given certain powers under the Bill which could, in certain cases, be extremely controversial politically.
  One of the powers granted under the Bill is to require a company to divest itself of certain holdings. I understand, from my reading of Clause 3(10), that an order of such a kind would require the agreement not simply of the House of Commons, but of the House of Lords as well. Such an order might be extremely controversial politically and I would like to know how this proposal is justified by my hon. Friend.
  I would be interested to know whether a constituency case of mine would be covered by the Bill. I feel that, unfortunately, it would not, but I hope that the Minister of State will comment on this, for it is another criticism I have of the Bill. My criticism is that it has not dealt with certain gaps which have appeared in the Restrictive Practices Act. A shop keeper in my constituency is being denied supplies of newspapers by wholesalers, who have said that the areas which he wishes to supply are already sufficiently supplied with newspapers.
  While I appreciate that this would need to be the subject of an independent inquiry, I consider that what they are doing is creating one monopoly retail supplier in what is quite a large area. This problem was examined by the Registrar and the previous Government,
  1280
  but it was found that nothing could be done about it under existing legislation. Would it be possible, under the Bill, to tackle a situation of that sort?
  Clause 8(1) refers to newspaper mergers and the problem of newspapers perhaps not being economic. What is meant by the phrase "not economic"? How could that phrase be interpreted in an argument? Does it mean, for example, that a newspaper must be running at a loss or that the proprietors would be able to argue that they could achieve a greater return on their capital if they invested it in a different way? The phrase "not economic" would appear to be susceptible of different interpretations and I would like to know what interpretation the Government place on it.
  The object of this type of legislation is to increase the efficiency and competitiveness of British industry. Yet despite all our monopoly and restrictive practices legislation since the war, our proportion of manufactured exports continues to fall and our balance of payments position continues uncertain. No doubt we should not expect too much from this type of legislation and must not exaggerate what a Bill of this sort can do to increase the efficiency of industry. Nevertheless, my suspicion is that more than has been done could have been done within the ambit of the Bill.
  7.23 p.m.
  Mr. William Shepherd: The House will agree that the hon. Member for Birkenhead (Mr. Dell) made a reasonable and balanced speech. He did not take us in to the somewhat controversial sphere which his hon. Friend the Member for Westhoughton (Mr. J. T. Price) entered.
  I would, if time permitted, have liked to have made some observations on the ethics of a capitalist society and a Socialist society, which is a matter of wide and considerable interest, but I will merely say that if faced with the alternative of private and public monopoly I would, in economic terms, be more anxious to embrace private monopoly, though perhaps in ethical terms I would be more inclined to public monopoly. However, I would prefer to see neither public nor private monopoly because, in my view, all monopoly is bad.
  It will be seen, therefore, that I do not follow the view of some of my hon.

  1281
  Friends, perhaps because I am more actively concerned in business and can see some of the effects, as one of the smaller fry, of monopoly in the United Kingdom. There is no doubt that there is a correlation between exports performance on the one hand and monopoly on the other, as was indicated by the hon. Member for Birkenhead. It is a correlation which depends upon attitudes of mind; upon aggressiveness of spirit and intention.
  The real evil of monopoly is not that people do bad things—if that were the case it would be nothing like as serious as it is—but that restrictive practices and monopolies are the opiate of trade and industry. People get themselves, as a consequence of monopolies and restrictive practices, into the state of mind where they really think that they are doing their best when, in fact, they are not.
  British industry is a curiously disparate example of intensive competition on the one hard and of extraordinary monopoly, fortifies by very high tariffs in many respects, on the other. If one looks at the monopoly situation one finds that, broadly speaking, in the relatively large scale manufacturer of primary produce and raw materials there is a high degree of very damaging monopolies in the United Kingdom. When one looks at applied manufacturers, however, one finds that there is intense competition, probably as great as anywhere in the world. I want to see the breaking down of this monopoly situation and I am satisfied that what we have done up to now has not been sufficient to break it down.
  I am sorry to have to tell the President of the Board of Trade that I do not believe that the Bill will do it, either. What we must destroy is an attitude of mind, an attitude built on 30 or 40 years of restriction and monopoly practices. It is not easy to destroy an attitude of mind of this sort. Indeed, monopoly and restrictive practices can coast on on their own momentum long after legislation which has the presumed effect of putting an end to them has been introduced.
  To give an example of this, I refer to what was said by my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke); that those who have been the subject of inquiry, have faithfully observed the conditions which have been laid down by the Government—as
  1282
  a result of the Monopolies Commission"s
  report.
  Mr. J. T.
  Price:
  Nonsense.
  Mr. Shepherd: I assure the hon. Gentleman that this is not necessarily nonsense. Almost all have readily agreed to make changes, but almost all, in one form or another, are continuing to do what they did before. I believe that I see the President of the Board of Trade shaking his head in disagreement, but I assure him that this is largely what happens.
  Mr. Price: Perhaps I should make my position clear since I did rather rudely shout something across the Floor of the House while the hon. Gentleman was speaking. I entirely agree with him that many of these people who have been condemned for these activities by the Monopolies Commission have gone on as before. For that reason I am disappointed with this legislation, and would be whichever party was in power.
  Mr. Shepherd: I was about to give an example. On the day the Monopolies Commission produced its Report on electrical goods in the motor car industry I telephoned a friend in the business and said, "What do you think about the Report of the Monopolies Commission?" He replied: "It does not tell us anything we do not already know." I then asked, "What effect do you think it will have on the trade?" He replied, "You don"t want to bother about this. We don"t want to go about taking a hatchet to each other. We will carry on just the same after this Report as we did before". This is, by one means or another, what is happening. It is bolstered by the fact that we have a very high level of demand for goods and services, and that very high tariffs exist in respect of many commodities.
  I urge the President of the Board of Trade and the House to accept the fact that we must have a much more positive attitude towards monopolies and restrictive practices if we are to get the sense of urgency, drive and competitiveness that is necessary for our economic survival. Therefore, I believe that this Bill, although I welcome it in a way, is inadequate, and I want to give one or two reasons for my opinion.

  1283
  I accept—and I have been pressing this perhaps as much as any hon. Member, and probably more, the need to include services. When I say "include services" I hope that the right hon. Gentleman will not be afraid of the big boys—the banks, the insurance companies, the shipping companies—because their practices want looking at. The White Paper had to my mind a most unhelpful qualification of "services", appearing to limit the definition to services in connection with the supply of goods. I hope that the present Government will see that inquiries into services are determined by the size of the operations and their importance to the community and not by whether they are related to the supply of goods; and that banking, shipping, insurance and other aspects will come within their purview. I am convinced that those sort of activities should be looked at in the same way as those of manufacturers, and others.
  Much has been made about the size of this Commission, and I regard that as a piece of nonsense. It is quite true that the Commission ought to be made rather larger, but this will not get us very far. The best thing we ever did in dealing with monopolies was when we said that exclusive boycott would be brought to an end. The Measure that said that did more in terms of combating monopolies than almost anything we had done before or have done since. The size of the Commission is not critical. The important thing is to try to define specific practices that are harmful to British industry and its competitiveness and get them outlawed as quickly as possible.
  I will give an example of what is perfectly possible under the terms of the Bill. I have to declare a personal interest here —I make car batteries. I am prevented from selling my car batteries to probably seven-tenths of the main sellers of batteries because those seven-tenths are agents for another maker of batteries which is a member of the erstwhile ring. The ring says, "You can only sell my battery provided you enter into an undertaking not to sell anyone else"s battery". I therefore cannot sell my battery to that man because of an exclusive arrangement that prevents me from doing so. That is grossly wrong. We ought not to allow
  1284
  people to enter into agreements excluding other people"s products—
  Mr. Jay: The hon. Gentleman will agree that if more than one firm entered into such an agreement it would be registrable under the 1956 Act.
  Mr. Shepherd: The right hon. Gentleman is quite right—if more than one person did it. But if we had an industry in which there are three or four concerned or, in this case, two large-scale operators, they themselves can bring about the same state of affairs without entering into any collusion the one with the other. They can merely decide, as is so easily decided, "We shall continue to follow a common policy in respect of these operations." Under this Bill this limitation of competition will still be permitted; it should go.
  Another thing that I regard with the utmost seriousness is failure to deal with information agreements. I am rather ashamed of those information agreements. They are a great reproof to British industry that those concerned have refused to accept the decisions of the Restrictive Practices Court and continue with information agreements that are really only another form of the old agreements. Why do we not make these things illegal? Why do we not send someone to prison for doing something that is contrary to what a court of this country has decided?
  Why should those who frustrate the decisions of the Restrictive Practices Court not be sent to gaol? I tell the President of the Board of Trade that until we start sending someone to gaol for doing things that are contrary to the decisions of the Restrictive Practices Court we shall not get adherence to antimonopoly legislation. We have had 30 or 40 years" of restrictive practices, and it is not easy for people to give up their bad old easy ways and accept the rougher, tougher and more difficult course.
  I hope in Committee to be able to put down a number of Amendments which will make this a tougher Bill than it is now, and which will compel the Board of Trade to take a tougher line. I know all the arguments in favour of voluntary persuasion: "It is very nice. We get the gentlemen responsible for running the monopoly to see us at the Board of

  1285
  Trade. We tell them "You are very naughty boys. You should not do this." They reply, "Perhaps we have been naughty boys, but we shall conform"." That is not good enough, because it never produces a sufficiently decisive and clear-cut line.
  The Board of Trade must be much tougher with restrictionists. We can then afford to be a little tougher with those on the workers" side if they are restrictive. We can afford to be tougher with them if we are tougher with the employers. I say at once that if we are tough now with the employers we shall not have so much restrictive practice at the worker level, because the restrictive practices of the workers are, on the whole, made possible by the restrictive practices of employers. One has only to look at the newspaper industry to see precisely what I mean. The Board of Trade must be much tougher than it has been before, because it is no good trying to pretend that the change of attitude can be brought about in a gentlemanly manner.
  I had hoped that this Bill would have included some procedure for investigation. The method we are now adopting of waiting for a complaint and then making an inquiry will never root out restrictive practices. Some organisation—the Board of Trade, the Registrar, whatever the mechanism may be—should have an investigating staff going round getting information about the methods by which the decisions of the Court are being frustrated. There is quite a lot of information to be obtained by competent and intelligent agents. The Registrar of the Restrictive Practices Court should have such an inquiry staff, so that there is a constant war upon those who try to defeat the purposes of this Bill.
  Let no one say that if we force upon industry a more vigorous competition it will be disastrous. When, as we now do maintain by Government action a high and stable level of demand it is incumbent upon those in private industry to be fully competitive. There is no justification for private enterprise unless it is engaged in a free competition to serve. We on this side have to take this stand in favour of private enterprise based upon its being freely competitive.
  1286
  I was told in 1956, when I was pushing the Bill then, that disaster would overtake industries if we had intensive competition—but just look at the motor car industry. That is one of the most competitive industries in the world, in which a manufacturer starts arguing about putting ½d. or 1d. on a product. Yet this has been one of our most successful industries, because it has been intensely competitive. Intensive competition within a society where the level of demand is high and stable will not be followed by harsh consequences. It will be followed by substantial benefits and economic efficiency.
  Therefore, the right hon. Gentleman should not be afraid of being tough and rough with monopolies. The monopolist is not a bad man. He bemuses himself into believing that he is doing what is socially right and economically justified. He lives in a false world and one day he awakens, as did our great electrical industries to find that they were 20 years behind the times because they had been engaging in restrictive practices. The only basis on which we can survive as an industrial nation is by being much more rigorously competitive and efficient. I refuse to believe that the average Britisher is not as good in terms of business as the average German or Frenchman, but we have been losing the game in the last ten years. One of the prime reasons why we have lost our position is that we have not been sufficiently competitive. Therefore, whilst
  I will vote for the Bill, if there is a vote, I feel that it should be much more far-reaching, because I believe that the House and the country as a whole have not fully appreciated the truly damaging nature of restrictive practices and monopolies.
  7.41 p.m.
  Mr. Joel Barnett: I agree with much that has been said in this debate, particularly some of the comments made by the hon. Member for Cheadle (Mr. Shepherd), although I believe that he contradicted himself in a sense to which I shall refer later. I also agree with the right hon. Member for Altrincham and Sale (Mr. Barber) that not all mergers are bad. It is clearly true that not all mergers are bad, because there are many thoroughly incompetent boards which need very much to be taken

  1287
  over. In many instances it would be helpful to both shareholders and to the nation if there were mergers so that such companies could be absorbed.
  When considering the Bill, it would be foolish to ignore the approach of businessmen generally. They love monopolies. As the hon. Member for Cheadle said, they do it in the nicest possible way; they believe that they are doing it in a benevolent way and that what they are doing is in everybody"s interests, including their own. This is so except when they complain of monopolies working against themselves. When it hurts, they complain about the particular monopoly. I do not blame businessmen for believing that they are doing the right thing in being satisfied that their particular monopoly is right. But we should strive all the harder to ensure that we put the national interest first. If they do not put the public interest first, we must.
  We must also understand the nature of the opposition we face. It is not just the large businessman. Monopoly tendencies are there throughout industry, from the very smallest upwards. The little local shopkeeper would do everything in his power to see the local shopkeeper round the corner closed. One can understand that the same goal is in the minds of the directors of I.C.I. when they want to take over Courtaulds.
  There are some interesting comments in the 1955 Report on Collective Discrimination by the Monopolies and Restrictive Practices Commission, to which my hon. Friend the Member for Acton (Mr. Floud) referred. The Commission makes the point that complaints against various practices in various trades are mostly made by those who are complaining about the fact they are excluded from those practices. If they were included, they would not be complaining. In the main, businessmen are happy with the monopolies they have and genuinely believe that they are working their own monoply in everyone"s interests. Recognising this attitude, we must see whether the Bill has been framed in a way satisfactory to all of us. I propose not to deal with the parts of the Bill with which I agree. I shall take those parts in which I am dissatisfied.
  My right hon. Friend the President of the Board of Trade today and in the
  1288
  debate on the White Paper last July made two main points. He said, first, that the whole process was far too long from the time when a reference was made to the Commission to the receipt of the Report. Many examples of this have been given. My right hon. Friend said, secondly, that there was far too little action when reports were eventually received. There is adequate evidence of this.
  Will the Bill deal with these criticisms? First, as to the length of time from a reference to the Commission to the receipt of the Report, the Bill will provide that we revert to the 1953 position and have a board of 25 members. This will be split up with vice-chairmen so that the Commission can deal with several references separately. This will help, but it will not prevent the situation which arose on the Report relating to electrical components in the motor industry. Almost six years elapsed from the initial reference to the receipt of the Report. Under the Bill this could still happen, but we should at least have the additional benefit that other matters were being examined at the same time. However, we could still wait six years for a report.
  I believe that something must be done about this. It is said on page 6 of the 1964 Report that in one year alone the Board of Trade received 30 suggestions for reference to the Commission. These suggestions included such goods as bread, burglar alarms, infant milk foods, imported comics, supply of drinks to tied houses, and automatic vending machines, amongst many others. The Board of Trade eliminated subjects already under investigation and matters which it considered frivolous. After eliminating these, there were still 30 matters which could have been referred to the Commission in one year. At this rate, it will take a long time to deal with the problem, even under the terms of the Bill.
  There are other possibilities. There are not just the 30 referred to in that Report. On page 97 of the 1955 Report on Collective Discrimination a further 75 items are referred to. They are not all necessarily relevant to the Commission, but clearly many of these items could be referred to the Commission. There were such things as flushing

  1289
  cisterns and copper balls, groceries, pins and hair grips.
  Mr. Shepherd: Is the hon. Gentleman really saying that the Board of Trade regarded all these submissions as being of any consequence? This was put in only as a sop to Labour Members in 1948. It was a very unwise provision to allow these things to be put in and recorded in this fashion. Some of them are without any bearing.
  Mr. Barnett: I was not saying that they were all necessarily relevant. I was saying that nevertheless there are many cases which could and should be submitted to the Commission. The hon. Gentleman himself was very disturbed about the way the present arrangement was working and said that the Board of Trade should be tougher. He went on to say, and contradicted himself by so saying, that he did not think that the size of the Commission was relevant. He said that he did not think it needed to be increased
  Mr. Shepherd: I do not want to detain the hon. Gentleman or the House, but I said that the size of the Commission had been made a political play point by the present Government and that I did not think it had any importance. The hon. Gentleman is fortifying my view that the time scale will be the same, although one may deal with more items than at present. The point that I was making was the necessity to outlaw specific practices, which is much more important than increasing the size of the Commission.
  Mr. Barnett: I think the hon. Gentleman is contradicting himself. I am not trying to make any party political point. What I am saying is that under the new arrangements suggested by this Bill, although I am still not satisfied with them, it will be possible to deal with rather more cases, and presumably the hon. Member for Cheadle would be pleased if that were to happen. Even so, in view of the way in which things worked out in the past, whereby one report could take six years to emerge, we could reach the year 2000 before we dealt with all the possible monopolies which would need to he referred to the Monopolies Commission.
  I think it was the right hon. Member for Reigate (Sir J. Vaughan-Morgan) who
  1290
  referred to this matter. I do not see why we need to be so rigid and inflexible over the size of the Commission. Why must we say that the number has to be 25, 10 or 35? I do not see why this is necessary. I do not see why the President of the Board of Trade, subject always to the approval of the House, should not have power to increase the size of the Commission even to as many as 125 in one year, whereas in other years it should be possible to manage with only 10. In other years it may be necessary to supplement the number with a few extra members.
  I am a little sick of the Parliamentary tactical manoeuvre which makes it necessary for months to go by before a Measure can get on to the Statute Book, whereas the matter could be dealt with by a simple Resolution and the Minister coming to the House and saying, "We need to deal with a tremendous backlog of business and we require 20 extra members and additional staff".
  A second criticism to which my right hon. Friend the President of the Board of Trade referred is that action has taken far too long. Of course, it is not difficult to prove that this is the case, but it is difficult and, indeed, impossible to point a gun at the Minister"s back and say, "You must take action." This is why, over the past 13 years, we have not had the sort of action that we would have expected, because a Minister goes as fast or as slow as he wishes and the Parliamentary procedures of this House help him to do so.
  What are we to do? My hon. Friend the Member for Birkenhead (Mr. Dell) referred to the question of the Registrar or some other means by which we could give more power to the Commission, subject always to the approval of this House, if a Minister, of whichever political party, was not acting speedily enough. He might be busy with other matters but, whatever the reason, if we could get the Commission to work at a greater speed and with a greater sense of urgency, this would press the Minister to deal with these problems much more urgently.
  I now wish to turn to Clause 8 dealing with national newspapers. I am sorry that local newspapers are not dealt with, for very often they are subject to the use

  1291
  of monopoly powers. I feel I am fortunate, because in my constituency there are three local newspapers which are very fair, but I know of many hon. Members who complain at the way in which they are treated by their local newspapers which have a virtual monopoly. In Manchester, for instance, there is one newspaper which covers a lot of Lancashire and Manchester, having gobbled up the Evening Chronicle which used to circulate in that area. Now the whole of the area is covered by one evening newspaper. Very often it is far from fair and reasonable in its approach. I hope, therefore, that the Minister will look into the question of local newspapers in the near future.
  Dealing with the Bill itself on the question of national newspapers, I can appreciate the difficulty that the Minister had in drafting this Clause, but I am afraid it will do very little. Indeed, it will do almost nothing. I am sure we would all deplore the concentration of power into yet a smaller and more irresponsible number of proprietors" hands. This Clause states what shall happen if a newspaper is losing money —my hon. Friend used the term "uneconomic"—and if a national newspaper loses money it does so at a fantastic rate. Surely if a newspaper is losing money and the proprietor wishes to close it down, we could not prevent that happening; otherwise it would be unfair to the shareholders, creditors and workers.
  The Clause goes on to say that if a newspaper is losing money and if it is a matter of urgency, consent shall be given to the merger. I do not know what is intended by the word "urgency". Perhaps my right hon. Friend can deal with this when he replies. But clearly it would be a matter of considerable urgency if a newspaper were losing millions of pounds. Therefore, under the terms of this Clause the Minister would have to give his consent to the merger, unless there is some other meaning to the word "urgency".
  One should consider some of the possibilities that could arise. Suppose the owners of the Sun, the Daily Sketch, the Sunday Citizen or even the Daily Mail decided that they had lost enough money and decided to stem the tide, close down and stop the losses, and that
  1292
  as a matter of urgency it was decided that they should be taken over. Under this Clause I do not see how that could be prevented. Take an even more extreme case. Suppose the Daily Express were losing money and were taken over by the Daily Mirror. I am sure hon. Members would not like to see that happen, but under this Bill I do not see how this could be prevented.
  What are the alternatives open to us? There are only two—three, of course, if we include this Clause, but I submit that it does nothing. The first alternative is that we should say "No, you may not merge. You must close down." Clearly, if we did that, we must compensate the newspaper and pay the equivalent of what it would have had under the merger so that the shareholders, creditors and workers would not suffer. There is the other alternative, and it is the only alternative open to us if hon. Members do not want to see national newspapers in this country eventually being reduced in number to one or two covering the whole country. I know that it will be a great temptation to dismiss this alternative out of hand, but the Government might consider setting up an independent trust consisting of three non-political judges, by agreement with all the parties, the Government to have no further say in the matter but leaving it entirely to the trust who would, no doubt, from time to time appoint editors with whom we would all heartily disagree, and which editors would then, no doubt, select writers whom we would all detest. Perhaps, in deference to some Members, we could exclude, say, Bernard Levin and Cross Bencher.
  I do not need reminding that there are many difficulties in such a suggestion. But the next time that a national newspaper is being closed down and there is no alternative to letting it close down or merge, as would be more likely the case, and we come to a situation where we have one, two or three national newspapers only covering the whole country. I ask hon. Members to bear in mind that under the Bill nothing can he done about it.
  8.0 p.m.
  Mr. Peter Bessell: It would be surprising if anyone rose from the Liberal bench to do anything other than

  1293
  welcome with open arms any legislation which tends to curb and control monopolistic practices, and I have no hesitation in welcoming the Bill as a forward piece of legislation which we know is well received in all parts of the House. It would be impossible for other than this to happen, particularly in the present economic situation. There is a wide measure of agreement that we shall not in the long term overcome the economic problems which are still confronting the nation unless we have a competitive system which will compel the majority of manufacturers to seek much wider and larger markets overseas.
  It is perhaps even more important to take anti-monopoly action in this country than in many others because we are a nation which for many years has been heavily protected by an almost impenetrable tariff system. I should not like to argue, in the present economic situation, for any drastic or large-scale reduction in tariffs, but, as long as we are protected by a strong tariff wall, clearly the only way in which we can make the soft home market less attractive to the home producer is by the cold wind of competition within the nation itself. This makes antimonopoly legislation of the kind which we have before us today of far greater importance and significance to the economic situation of the nation.
  We have had references in the past and again today to the position in the United States. Over the past 10 years, for business reasons, I have become very familiar with the position in the United States and the effectiveness of many of the antitrust laws that exist there. I do not hesitate to say to the President of the Board of Trade that I hope he will not be led into the false path of belief that if this country adopted identical anti-trust laws we would necessarily benefit from them.
  I do not think that the right hon. Gentleman will do that, but it should be remembered that while the legislation which has been provided to prevent monopolistic practices in the United States from operating to the detriment of the public have in many cases gone too far the result has been the very opposite of what was intended. This is seen particularly in certain aspects of the retail trade, where shoddy goods are the result of enforced competition. Nevertheless,
  1294
  there is in the United Kingdom a situation which clearly indicates the urgent need of action.
  I have been looking through the reports of the Monopolies Commission during the first 11 years of its existence. It is startling to see the numbers of goods and wide variety of products which in the Commission"s view are operating under monopoly to the detriment of the nation as a whole. They include such things as rainwater goods, electric cables, insulin, matches, building in London, linoleum, rubber footwear, oxygen, metal doors and windows, fertilisers, and tobacco. One cannot look at this situation with complacency. I am glad that Her Majesty"s Government and the Opposition, who did so much of the preparatory work for the Bill, are not complacent about it and are taking at least some action towards curbing this continuing growth of monopolistic practice. I believe that this action has been too long delayed. The Liberal Party, like Humpty Dumpty, has shouted loud and clear on the subject of monopolies and restrictive practices for many years.
  Mr. Albert Murray: And has fallen off the wall.
  Mr. Bessell: We did not fall at Roxburgh and I do not think that we shall fall in one or two other places, but if I say any more I am certain that I shall be ruled out of order. Nevertheless, we have sounded a clarion call and if, like little lost sheep, the Government and the Opposition have gradually come home, dragging their tails behind them, I do not welcome them any the less for that reason.
  In the view of both parties in opposition, the Clauses of the Bill will require amendment, but in the main these are matters which will be dealt with in Committee and, therefore, there is no need for me to refer to them in detail tonight. Clause 3 is, to my mind, the most welcome part of the whole of this legislation, because it apparently takes the more drastic step of giving the Board of Trade the power to declare certain monopolistic practices positively unlawful. Unless these practices are declared to be unlawful there is not very much hope of our getting any positive action of the kind which is so badly needed.

  1295
  I am also glad that there is provision in the Bill for dealing with existing monopolies and not merely those which might accumulate or come into force as a result of further mergers. One of the worst examples of monopolistic practice is the one which occurs in the industry which produces sugar, a vital commodity upon which everyone depends, except of course, the diabetics. The example of sugar has come to my notice in recent years because about two years ago, when I was a director of a company in the south-west of England, we had occasion to require sugar in small packets. We applied to one very well-known firm for a price and also to a number of other refineries in the country. To our astonishment we discovered that the price was absolutely identical in each case. I was curious about this and I investigated the register of companies when it was located in Bush House. It appeared that one sugar company, Tate and Lyle, either controlled completely, or had very large holdings in, the competitive companies concerned.
  The company with which I was associated tried to purchase sugar abroad. We were quoted very much more favourable prices from France, but when we came to investigate the regulations dealing with the importation of sugar in packets of the kind produced by the monopoly company to which I have referred we discovered that the import duty was such as to bring the price to almost exactly the same as that which we were offered by Tate and Lyle and many of it subsidiary companies that trade under such a variety of names.
  Therefore, one of the urgent tasks before the enlarged Monopolies Commission—I share the view expressed on both sides of the House that it is vital that the Commission should be larger, it this means that it can work faster—is to look at those industries, in particular, which produce commodities upon which every section of the public depends.
  As regards the Press, I think it doubtful that any responsible director or shareholder of a large newspaper company will be offended or displeased by the Clause which deals specifically with Press mergers. Whether this is a good thing or not is arguable, and I share the view expressed by the hon. Member for Heywood and Royton (Mr. Barnett) that it is important that local and provincial
  1296
  newspapers should be included within the scope of the Bill.
  Mr. Jay: The hon. Gentleman is not quite right in assuming that local newspapers are excluded as such. There is a limit on the total size of circulation which a combined firm, on a merger, could achieve.
  Mr. Bessell: I am very grateful to the right hon. Gentleman for that clarification, but there is a danger, in certain cases where local newspapers are concerned, of mergers taking place which are not in the interest of the public as a whole. Like the hon. Member for Heywood and Royton, I am fortunate in having a very fair Press in my part of the country. In this Chamber, of course, I should not dare to say otherwise, but it is, in fact, absolutely true and I have no hesitation in paying that tribute. I see the hon. Member for Torrington (Mr. Peter Mills) in his place, and I believe that he would probably share that view.
  There are several other points which will have to be looked at rather closely. The suggestion that there ought to be a Registrar, with power to investigate the affairs of any company which is referred to him, is good as far as it goes, but we in the Liberal Party have always felt that something more drastic was needed. It is our view that all companies should be compelled to register with the Board of Trade and make a complete annual disclosure of all their activities, all their subsidiary companies and all the holdings which they have in any other company or interest.
  Mr. Barnett: Does the hon. Gentleman include every small private limited company in that?
  Mr. Bessell: Yes, I should prefer to see it done in that way. But I recognise the administrative difficulties where small private companies are concerned, and I should be quite happy to accept a limit in the case of private companies up to an issued capital of £10,000, or something like that. It would require closer definition than I have given it. Certainly, it should apply to all public companies and private companies of any substantial size. If this were done, it would be possible to discover many of the restrictive practices which are "continuing, often under cover and quite unknown.

  1297
  Secondly, we should like to see registration and disclosure of the activities of all trade associations and very strong penalties for any association which assisted its members in price-ringing arrangements or in any way helping to produce price agreement among members. I agree with the hon. Member for Cheadle (Mr. Shepherd) that, if the Bill is to be effective, it will depend entirely on how fast and how vigorously the Board of Trade is prepared to act. In the last analysis, any legislation which passes through the House can only be as effective as the Ministry concerned determines to make it, and there is in this case a very bad record of lack of determination.
  During the first 11 years of the existence of the Monopolies Commission, 18 of the 23 Reports made were said by the Commission to involve monopolies which were carrying on practices contrary to the public interest, yet in only two cases were orders actually made. This is a very serious situation. There is the blatant example of the Imperial Tobacco Company, which was found by the Monopolies Commission to be acting contrary to the public interest by maintaining its holding in Gallahers. So far as I am aware—I shall be corrected if I am wrong—the Imperial Tobacco has done nothing about this holding and there has been no attempt by the Government to insist that it does.
  Mr. Jay: That is not absolutely right. Since the present Government took office, the Imperial Tobacco Company has—it has stated this publicly—handed over the shares to an investment trust which has the right, on investment grounds, to dispose of them if it wishes.
  Mr. Bessell: I am grateful to the right hon. Gentleman for that piece of information. I wonder, of course, what the composition of the investment trust is, who the main shareholders are, and what sort of interest the Imperial Tobacco Company may have in the trust.
  Mr. John Hall: This question has been raised more than once in the debate. Two points should be made clear. The first the President of the Board of Trade has just dealt with. The second is that the only other thing the company was asked to do was to terminate its bonus agreement, and this it did.
  Mr. Bessell: I appreciate that, and I am grateful to the hon. Gentleman for making the point. Nevertheless, the company did not take the action which was required according to the main recommendation of the Monopolies Commission until the present Government took office. Whether that is coincidental or not I do not know, but its happening now does not alter the point that it should have happened when the recommendation was made.
  The many recommendations made by the Monopolies Commission which have not been acted upon are, plainly, overdue for action, and I hope that the President of the Board of Trade will not hesitate to insist that action be taken, where necessary forcing it upon the companies concerned. Otherwise, there is no point in having a Monopolies Commission of 10, 25 or 500 members. The only use the Commission has in this context comes when the recommendations it makes are acted upon promptly and efficiently and where necessary, I believe, quite ruthlessly.
  I take, next, the question of newspapers and the position of many of the middlemen who operate most successfully their own monopolies in particular areas of the country. The hon. Member for Birkenhead (Mr. Dell), who referred to a case in his own constituency, may be interested to know that I have an identical situation in my own constituency. A bona fide trader has applied to a newspaper wholesaler for supplies and has been refused. The wholesaler takes no notice of any letters either from solicitors or from anyone else who tries to assist the trader.
  Other examples can be found in the activities of wholesalers supplying shops in the food trade. I have had a recent example of this. The only practical wholesaler in the district in terms of delivery, and so on, has refused to supply what I regard as a perfectly legitimate partnership set up by two young people simply because he fears that to do so would damage his position with other retailers in the area. I believe that there is a need for a very strong line in such cases. It is wrong that there should not be free competition and that wholesalers should be in a position to dominate the retail market, frequently to the detriment of the general public.

  1299
  I was glad that an hon. Gentleman raised the question of consideration of staff attitudes to mergers. The case of the Wall Paper Manufacturers Limited and the proposed take-over by Reeds has been referred to during the debate. There is no doubt that the memorandum circulated by the staff in their interests and the interests of the shareholders is an impressive document.
  I believe that it is right that representations should be received by the Board of Trade from staff associations concerned with any proposed merger or take-over bid and should be considered very carefully, and that the arguments advanced should be examined, because in many cases senior staff, in particular, are in a better position to judge the effect of a merger or take-over on the future health of a company and its productivity. To that extent, this is a matter which should be looked at with great care. It may be that in Committee the President of the Board of Trade will be able to consider Amendments to that affect.
  In 1959, a Liberal Party committee recommended an increase in the size of the Monopolies Commission. That is included in the Bill. Mr. Donald Wade, the former Member for Huddersfield, West, in the debate on 6th July last, recommended legislation to enable an investigation of mergers to take place before they actually happened. That is also incorporated in the Bill. As I said earlier, for a very long time indeed, throughout the last 30 years, the Liberal Party has continuously, and without abatement, called for stronger and more effective action, both legislative and by the Board of Trade when it has the powers, against any monopoly practice to the detriment of the consumer. We believe in a society of free enterprise. We want to see free enterprise grow. We welcome the steps which the Government have taken by means of the Bill, and we congratulate them on their prompt action and also upon following the many admirable recommendations contained in the White Paper published by the previous Government, to which many useful additions have been made.
  8.23 p.m.
  Mr. Robert Sheldon: The hon. Member for Bodmin
  1300
  (Mr. Bessell) appears somewhat as a purist in referring to matters of monopoly or instances where monopolies themselves might be created. I was more pleased to note that many hon. Members have been anxious to protect desirable mergers and consider the division somewhat more sharply. The President of the Board of Trade has given as a criterion that his Department should step in where mergers might drastically reduce competition.
  It is very important that we should know what we mean by "competition". Very many of our views have been formed by the great mythology which can be traced back to the Industrial Revolution, that of competition at once both absolute and pure. When industries were new and rising and expanding rapidly, their costs naturally fell dramatically. The growth of those industries was at that time part of the mythology—that growth and expansion and reduction in costs could be attributed to competition. This was partly so, but a very much larger part was due to the tendency of the interests concerned to use their profits for reinvesting in the fairly easy improvements that are possible when an industry is very young.
  Competition played an important part in so far as it helped to stabilise prices. But let us not overdo the part that competition played and that it plays now in our economy. The position of competition in stabilising prices, not in causing vigorous and sustained growth but just in stabilising prices, is probably still a tenable function, but the distinction must be made that industry has always idealised competition and at the same time has always tried to reduce its effects.
  The ideal of industry, in pursuing its own ways, assisting in competition, as we imagine was once pursued, was that in the pursuit of profit industry would be able to offer better services and lower prices. But if this may have been true in the past, it is manifestly only very limitedly true today. It may have been true at other times, and it may have been true in certain other countries, but it is true here today only to a very limited extent. The ideal of industry, in pursuing its own ways, assisting in the competitiveness and progressiveness of industry, is not very meaningful today.

  1301
  Yet, although actual competition in the way that we know it and understand it, in the way in which it is practised today, might stop prices rising to exorbitant levels, in the large majority of our important industries it does very little more than this. In established industries today the competition is not so much in prices or in fundamental development. Far more of the competition is in side developments, not of new products but of variations of products in style and design and similar matters which go with it.
  The units which are concerned in the Bill before us are large—large manufacturing, distributing and servicing units. When units are large and few, price competition is not often very real, because each unit, if pressed, can often reduce its prices to cost or below cost, and can maintain this position indefinitely. This is the prerogative of the large and powerful organisation. It can maintain the position indefinitely especially if it is making and distributing other products, for some of the costs can he transferred to some of its more profitable functions, for a certain time at least.
  In a situation where no one concern can hope to subdue its competitors, price fixing becomes inevitable. If we pass laws making price fixing illegal, we shall get price stability, because these people understand what is likely to happen and will take steps to safeguard their interests out of fear of the consequences.
  Clearly, in the case of steel and tyres, to mention only two examples, aggressive competition at this time is an ideal which is impossible. There is, however, in large organisations one possible type of competition which is still tenable. That is where units are large and the sizes of the orders are also very large. I think particularly of the shipbuilding industry and very large manufacturing organisations. But for most firms a monopoly status does not necessarily result in a true decline of competition because competition was previously almost nonexistent in so many of the organisations.
  I think that it is an over-simplification to say that competition determines prices. One only has to consider the price differences between countries making the same goods. Whether one works it out
  1302
  in terms of man hours or rates of exchange or whatever it may be, one can see that, however vigorous the competition may or may not be, the relationships between prices here and certain overseas markets have very little in common.
  The effect of competition, I believe, is quite subordinate to very much more important effects—the driving force, the technology and the size of the markets—in determining the aggressiveness of a particular industry. In a large competitive industry, there are one or two sources of disguised waste. An obvious source of such waste is advertising. Advertising is now taking about 2 percent. of our gross national product. All competitive industries have to practise it, the object being, so we are told, to achieve the economies of scale.
  If we are prepared to spend 2 percent. of our gross national product on achieving the economies of scale, then we are spending 2 percent. to achieve a monopoly position which then has to be threatened by anti-monopoly legislation. This, of course, is our contradiction. We understand, or are beginning to understand, the advantages of certain economies of scale, but it is no use providing the economic climate in which the large organisations can flourish and are encouraged to grow and then stopping them from achieving their objective.
  I believe that the sponsors of this Bill had this in mind, because they have avoided very firm rules. When legislation avoids such firm rules, we should think about it very carefully because it may be that it is not founded on very firm principles. I understand the difficulties of avoiding firm principles in this case, but the truth is that the virtues of competition are less than is generally realised and the disadvantages more than generally accepted.
  I believe there are such things as certain limits beyond which competition ceases to be useful. I think that competition ceases to be useful when the advantages of the economies of scale equal the usefulness of competition. It comes at a point where one achieves certain economies of scale which are more important than the usefulness of competition which one then tries to avoid in large, expanding efficient industries. This limit is getting very large and is

  1303
  coming to the point when we approach almost complete monopolies.
  Mention has been made of car and chemical firms. The most important and aggressive of these produce, as my hon. Friend the Member for Birkenhead (Mr. Dell) said, largely for export, and the concentration of all these industries and their growth increase the arguments to be advanced for the economies of scale. This is a growing trend and something that is not a subject of extrapolation: it is inevitable. As the advantages from economies of scale increase, then the advantages of a monopoly or a near monopoly position will also increase.
  Mr. Terence L. Higgins: Would not the hon. Gentleman agree that, if this is so, his argument only holds if the industry concerned is not protected by tariffs and that it is, therefore, essential that such an industry should be investigated by the Monopolies Commission to see whether there are economies of scale of the size he suggests? If that were so, the Commission could recommend the complete abolition of all protective tariffs on the industry concerned.
  Mr. Sheldon: The hon. Gentleman has anticipated my remarks rather well. It used to be felt that the optimum size for any industry was about 5,000. A group of economists felt that, as an industry approached a certain size so inefficiencies built in, due to bureaucracy and other causes, caused a certain optimum size beyond which it would then fall. People believe that maximum efficiency would come at a certain stage and beyond that one got bureaucracy.
  But certain things the managers of these organisations did not really understand. These were the development of management techniques, of aids of one kind or another. All these things are changing the whole balance of argument in favour of growing centralisation.
  The new management tools we are seeing are today only in their infancy. Information processing can show that there need be no such thing as optimum size and, as far as one can see in these matters, it can be argued that efficiency will increase quite rapidly, with increase in size. In many cases, faced with large capital investments, smaller organizations
  1304
  will no longer be able to survive as they used to. The new technology, the new methods of management and the new ideas of information processing are making monopolies more common and more viable.
  But if the factors of information processing, management techniques and the new technology favour monopolies, what are we to do about the great concentrations of industrial power which will be built up? Even in the United States, where there is an enormous market favouring the growth of these large organisations, the large organisations will shortly find themselves in the position of being unable to expand because of the anti-trust Acts, and all the time industry is likely to be bumping up against the anti-trust Acts. If that should happen in a country the size of the United States, with the organisation of the United States, how much more likely is the same kind of thing likely to apply to us?
  Mr. Bessell: The hon. Gentleman has referred to the effect of the anti-trust Acts and, to some extent, I believe that he is correct. But would he not agree that the technical advances made by General Motors, the Chrysler Corporation, American Motors and other companies of that sort have been largely because of the intensive competition among these companies, which has resulted in lower prices?
  Mr. Sheldon: Of course, there are many advantages in competition. I do not deny that, but the competition must be genuine. When in this country we have companies which cannot grow to such a size, the incentives of competition must be replaced by some other means which will provide the same sort of beneficial effects. While one can go to the toffee shop round the corner, if one wants the best toffee and the best service it is best to have two such toffee shops; but if one can have only one there must be some alternative to competition when competition is no longer tenable.
  When we find these large concentrations of industrial organisation building up, we will find that they will reach such a stage that we will need Government regulation, or even Government ownership. Of course, imports complicate the situation, because it is possible to get

  1305
  competition from imports, but that is not really the remedy for the situation, because we are concerned with the big, important industries of this country, and if the competition of imports were so serious, it would be likely to promote even further Government intervention.
  So we find the situation where the growth of monopolies and the large-scale industries which are necessary today is leading to a greater control and participation by the Government. The President of the Board of Trade said that competition was the justification of private enterprise. In the large industries, the economics of scale can be greater than the advantages of competition. This trend is not likely to diminish and it may be argued that, in the interests of industrial efficiency, so far from declining to accept mergers, part of the function of the Board of Trade should be to promote them, but we all know that it is easier to draft legislation to prevent action than to promote it.
  The President of the Board of Trade said that by making certain mergers more difficult he hoped that there would be certain beneficial results. This can be a very dangerous road. Part of the rôle of the Board of Trade must be to understand industry and to understand some of the important forces which are emerging from it. It is important to understand the nature of these mergers. Any Bill affecting this part of our industrial sector should be not so much anti-monopoly as against the quiet life which is enjoyed rather too easily in many board rooms. The fault, possibly, is not that there is too much monopoly, but that there is too much sloth, and part of the function of any Bill dealing with this subject must be to discourage it.
  I believe that there is little value in the over-encouragement of competition. The real dangers of monopoly and over-monopoly are what many people have been mentioning—restrictive practices. But restrictive practices are not necessarily the result of monopoly. Acts dealing with resale price maintenance and restrictive practices have done a great deal of good in this part of our industrial and economic sector, but we must not confuse those with the monopoly which can often be so helpful to industry.
  There are useful anti-monopoly powers in the Bill. If there is a danger of price
  1306
  abuse this can be curbed. But I do not think that this is a terribly important point. Far more dangerous is the fact that there are many firms opting for this fairly easy life. We must understand why these firms act in this way. Playing for safety is quite an understandable form of management. In many management games there are young men who beat the chairman of the big boards very easily and with very little effort. This is easily understood because the responsibilities of power can be very large indeed. Although the young man, playing his management games, may stake the fortune of his company on a switch in the computer, no head of an industrial organisation can ever venture in quite the same way.
  The lesson which I have learned from the battle between I.C.I. and Courtaulds is not the same as that which other people have learned. I think that had a merger gone thtrough it would have been better than the position which existed before the bid was made. This is because I read certain aspects of this industry rather differently. But much more important is that this bid, which was made and was foiled, woke up the entire industry, and in fighting the merger Courtaulds got a taste for business.
  This taste for business should be permeating our industrial and economic life. Anybody who can find some way of initiating it and introducing this stimulus will have the thanks of the whole House.
  There may well be certain means of achieving resale price maintenance through a monopoly structure. Firms can get round the provisions of the Bill concerning resale price maintenance by achieving a monopoly structure. This does not look very likely at the moment, but there is a point in this.
  What concerns me particularly are the various Reports from the Monopolies Commission. Going through all these reports, we see the small results that they have had. I do not think that this is the fault of the Monopolies Commission. It is because industry, so far from being wrong and wicked, tends rather more to be slothful. The idea that industries of various kinds have great schemes for enriching themselves has proved to be unfounded. What has been shown up much more is their activity in very many branches of their own sphere of interest.

  1307
  As I have said, the Bill does nothing to stimulate industry. It can stop abuses, but the reports of the Monopolies Commission have shown that abuses are few. The great danger in the Bill, however, is that it can discourage mergers of the useful type which I have been discussing, even by public examination, proving something which the firms in a proposed merger might prefer not to go through with.
  The trial by public examination is very real. If companies have to go through that trial before taking part in a useful merger, it may well be that many large and valuable mergers will be stifled at birth. I ask the Minister of State to reply particularly on this point. We must have a firm understanding that no restriction shall be placed on mergers. The Bill leans against mergers. Of this there is no doubt. Throughout the Bill the accent is against mergers. I think that, in the main, mergers are probably a useful feature of our industrial life. The Minister must try to correct and restore the balance. It could well be tragic if in anti-monopoly legislation by eliminating such a potential abuse from industrial life we were to initiate an even greater one.
  8.45 p.m.
  Mr. Terence L. Higgins: I am somewhat less enthusiastic about the Bill than a number of hon. Members who have spoken, on both sides. It seems to me that in some respects it goes too far and in other respects not far enough, and in one respect it introduces a particular point of principle which I regard as being entirely undesirable.
  To deal, first, with the point of principle in the Clause concerning mergers, the Bill suggests that in addition to the usual definition of monopoly in terms of share of the market we should introduce an additional criterion concerned with absolute bigness. This is a radical departure which is to be deplored, because, clearly, from an economic point of view it is only through control of the market that a firm can exert monopoly power and raise prices and profits. To introduce a definition in terms of an absolute figure is entirely wrong.
  The figure of asset value which is given in the Bill is £5 million. It is pertinent
  1308
  to ask the Minister exactly how he intends to define this figure. He must surely be aware that the Monopolies Commission has had great trouble in determining how to value the capital assets of a certain firm. It has tended normally to value assets in terms of the historic cost of the assets less depreciation at Inland Revenue rates. This is a quite nonsensical concept from an economic point of view. It is a concept based upon accounting conventions and it means, generally speaking, that the value of a firm"s assets is assessed at a lower figure than that at which they would normally be valued.
  What I am saying—and the Government may well wish to introduce an Amendment in Committee—is that the definition of £5 million in terms of the Clause does not give a precise definition and that the Commission has had great difficulty in evaluating assets in this way. I regard this as a major point and I hope that the Government will consider it.
  Some potentially wrong principles have been bandied about during the debate concerning the little "Neddies". Little "Neddies" may provide a useful source of data, but it would be quite wrong for them to become part of the anti-monopoly apparatus, because this would certainly deter industry as such as from participating in little "Neddies" in the way in which one hopes that it will co-operate. Therefore, it would be dangerous to do as the Prime Minister suggested in a recent speech and incorporate the little "Neddies" into the anti-monopoly structure.
  I said in my opening remarks that in particular respects the Bill appeared to go too far. One respect which I have in mind is the Clause dealing with regulation of prices. If the Commission and the Board of Trade have any real criteria on which to set prices they will find that it is better to go into the question of enabling competition to be increased to reduce prices rather than to regulate the prices of a given monopoly. To regulate those prices would deter new competitors from coming into the industry concerned and would deter research into products which might well compete with the monopolistic industry.
  The answer, therefore, is not the regulation of prices by the Board of Trade, but rather the encouragement of competition by enabling new entrants to come into

  1309
  the industry and, as I suggested in an intervention during the speech of the hon. Member for Ashton-under-Lyne (Mr. Sheldon), the reduction of tariffs to ensure that our competition is at the highest possible level in industries which the Monopolies Commission has found to be wanting.
  I said, thirdly, that the Bill would not go far enough. In one respect, I agree wholeheartedly with what has been said on this side of the House to the effect that we need a Registrar of Monopolies who will determine what the particular market being monopolised is and which firms should be referred to the Monopolies Commission.
  The White Paper introduced by the Conservative Government was right in this respect, because it removed references to the Monopolies Commission from political pressures which might otherwise be brought against it, and this is what an hon. Friend of mine was suggesting earlier when he said that monopolies should be taken out of politics. He did not mean they should riot be subject to controversy in this House. What he did mean was that references to the Monopolies Commission should not be subject to political pressures, but that there should be an impartial body able to act in an impartial way.
  As to the size of the Commission, hon. Members on both sides of the House have stressed that there has been too much delay in investigating firms referred to the Commission. I would ask the Minister, when he winds up the debate, to say exactly how many members of the Commission are full-time members, because I think that the important point here is not only that we need more members, so that investigations can be speeded up, but that we should have more people, in addition to the chairman and deputy-chairman, devoting their whole energies to the difficult problem of appraising monopolistic firms to see whether or not they are against the public interest.
  I should also like the hon. Gentleman to answer this point. I should like to know how many economists there are on the Commission. Would I be right in thinking there is only one economist, part-time, on the Commission? Would the hon. Gentleman also care to tell us how many people there are on the staff of the
  1310
  Commission and covered by the sum of £190,000 as mentioned in the Explanatory and Financial Memorandum? How many economists will there be full time on the permanent staff of the Commission, helping it with its investigations?
  I ask because one of the important points which has emerged from the work of the Commission is that the criteria which the Commission has used to determine whether a monopoly position is being abused have been extremely out of date. As I was saying earlier, it has been inclined to evaluate the capital of firms on the basis of historic cost less Inland Revenue rates. This, clearly, is not an effective or meaningful economic criterion.
  The hon. Gentleman should be thinking more in terms of replacement costs of assets, taking account of the effect of inflation over the years. It is quite absurd that the Commission should evaluate assets in terms of what they cost in the 1890s, making no allowance at all for the change in the value of money, and then knock off depreciation at Inland Revenue rates, which is a purely tax concept, and then, having arrived at this nonsensical estimate of what the assets of the company are, to relate them to current profits in terms of pounds of today"s value.
  This is the kind of concept to which the Commission has been working, and I think that it must reflect the fact that the Commission has been working in difficult circumstances, that it has been under great pressure, and has not had either enough full-time members or the number of staff to enable it to work in a manner economically meaningful to produce results which can be a basis for decision.
  The Commission has been inclined to rely on figures of profits, or rate of return on capital, which are too high, though it may be that an inefficient monopolist is making a return on capital, or a profit margin, which is extremely low, the reason being that his costs are high because he is inefficient. So it is quite nonsensical, I would suggest, for people to say that these profits are too high or too low, because there is really no basis for taking decisions.
  Again, as I suggest, it stems from the fact that the Commission and its staff

  1311
  are heavily overworked, and the provisions in the Bill for increasing them and for increasing the facilities available to them are totally inadequate. If, as they profess, the Government believe that we should have a more stringent monopoly control in this country, they should introduce a much more drastic Measure than they have, and a Measure which, at this stage, could be much more important than this one.
  The hon. Member for Ashton-under-Lyne, referred to economies of scale. The fact is that because of the small staff, and so on, the Commission has had little opportunity to look into what economies of scale really are in particular industries. The points made by the hon. Gentleman were largely theoretical. He postulated that economies of scale were getting bigger and bigger, but the Commission itself has made little attempt to evaluate exactly what economies of scale are in particular industries.
  This means that it has not been able to evaluate whether a particular monopoly is, or is not, against the public interest, because, as the hon. Gentleman rightly stressed, it may he that an industry which is able to obtain economies of scale may be in the public interest, and this is the kind of industry which we should encourage, but it means that we have to ascertain technically and economically what those economies of scale really are.
  I suggest that that is something which we ought to do, but I add the caveat which I mentioned just now, that if the economies of scale are large there may be a case for encouraging competition by the removal of tariffs. This, again, is something which, if it went into the question of costs in detail, the Commission could look into and help in encouraging the competition and efficiency of industry.
  I do not think that the Bill goes anywhere near far enough. I do not think that the proposals for expanding the Commission are sufficiently vigorous or ambitious. We must encourage competition in this country. We must be sure that we are not discouraging mergers where economies of scale are great, and to do this we must have a much better Bill than this one as it stands at the moment.
  8.57 p.m.
  Mr. Raphael Tuck: I support the Bill, and I have only one suggestion to make to my right hon. Friend the President of the Board of Trade. It is with reference to the monopoly and enormous power wielded by the Press. We on this side of the House have felt this power, to our detriment. The scales have been inordinately weighted against us.
  Everybody knows that the vast majority of the newspapers in this country are anti-Labour, and that the dice are strongly loaded against our party. My suggestion might meet with derisive laughter from both sides of the House, but it is one which I think merits consideration by my right hon. Friend. because it would set at nought the great power of the Press on one side or the other.
  I should like to see it made compulsory for every newspaper to devote an equal number of pages to Conservative news and views, to Liberal news and views, and to Labour news and views. In this way the man who read the Daily Worker would be conversant with Conservative views, and the man who read the Daily Telegraph would be conversant with Labour views. It would set at nought the tilting of the scales against any one party. It would enable people to be better informed, and in that way would reduce the monopolistic tendencies of the Press today.
  8.59 p.m.
  Mr. John Hall: We have had a very interesting, if short, intervention from the hon. Member for Watford (Mr. Raphael Tuck), who said that the Press tended to be heavily weighted against the Labour Party. My hon. Friends and I have always been under the impression that the scales were weighted very heavily against us. Under those circumstances, it is probably correct that the Press have the scales about right.
  I think that hon. Members on both sides of the House will agree that this debate has been notable for the very high standard of the contributions which have been made to it. We have had a number of extremely thoughtful speeches which have not only suggested ways by which the Bill could be improved, but have brought to the notice

  1313
  of the Government various considerations which they ought to have in mind when they are considering how to administer the Monopolies Commission"s system. I think that there has been a very considerable measure of agreement on both sides of the House, a measure which it a very important one and which could have a considerable effect for good or ill on the economy of the country.
  We had an intervention from one member of the Liberal Party who, I am sorry to see, is not in his place. It was an interesting speech, during the course of which he likened the Liberal Party to Humpty Dumpty. I would remind him, if he were here, that
  "All the King"s horses and all the King"s men
  Couldn"t put Humpty Dumpty together again."
  The President of the Board of Trade put over a good brief in the way which we have come to expect of him. In view of the form of his introduction, I hope that he will forgive me—I am sure that the Minister of State will forgive me—if my own introduction is not entirely dissimilar from that of the President of the Board of Trade.
  On 4th June, 1841, Edward Stanley, later Lord Derby, made a speech in the House in which he quoted Mr. Tierney, the authority of the day, as saying that the duty of an Opposition was very simple: it was to oppose everything and to propose nothing. I think that it "is probably true that when the present Government were in opposition, they followed this admirable advice to the letter. As the spokesman of a responsible Opposition, I find it a little more difficult to follow that advice, particularly as the Bill which we are discussing emerges from the proposals of Command Paper 2299, which was laid before the House in March, 1964, by the previous Government.
  While this Bill differs in some respects —respects to which I will refer a little later—it follows the Conservative line of thinking fairly closely on this subject. Even the Monopolies and Restrictive Practices Act, 1948, as my right hon. Friend tie Member for Altrincham and Sale (Mr. Barber) pointed out, follows quite closely proposals which were made by this party in our Industrial Charter. This is, of course, not unusual. The best
  1314
  legislation which has been introduced by Labour Governments over the history of government of this country has often been based either on the groundwork laid by previous Conservative Administrations or on Conservative principles.
  If I may slightly misquote that famous extract from Disraeli"s "Coningsby", which hon. Members may remember:
  "A sound Labour Government," said Taper musingly. "I understand: Labour men and Tory Measures""
  While this Tory Measure is based on a neutral and uncommitted approach to monopoly, it has emerged from this Government"s hands a little later than we would have introduced it ourselves and not perhaps quite in the form which we would have liked. This does not mean that we do not recognise this as a very valuable step along the road towards making our industry more competitive.
  I think that its main defects have been mentioned time and time again in speeches from both sides of the House. I would mention some of them. The first is the failure to appoint a Registrar of Monopolies under the Bill, which I think, is regrettable. The second defect is the very wide and, I believe, inadequately detailed powers given to the Board of Trade and particularly as has been stressed from this side of the House—the power given to fix prices, apparently indefinitely.
  The third deficiency is in respect of the powers relating to mergers or proposed mergers given by Clause 6, and particularly the power to apply a temporary stop to a merger while it is being considered by the Commission—in other words, to bring the merger to an end even before the Commission has considered it. The Bill has other defects of commission and omission which are perhaps best considered in Committee, although I will return to one or two of them later.
  May I refer to the question of the appointment of a Registrar of Monopolies? This was referred to by my right hon. Friends the Members for Altrincham and Sale (Mr. Barber) and Reigate (Sir J. Vaughan-Morgan) and other hon. Members on both sides of the House who suggested that it might be of value if we introduced a Registrar of Monopolies. It will be remembered

  1315
  that this was covered at some length in paragraphs 9to15 of the White Paper, and I should like to quote some of the relevant extracts from those paragraphs.
  Paragraph 9 includes:
  "…but experience has shown that certain aspects of the law are open to criticism: the impression that the same body is being asked to carry out the function of "both judge and prosecutor"".
  In paragraph 10 we read:
  "The first point has been made particularly by industry. It rests to some extent on a misconception."
  In paragraph 11 we read:
  "Nevertheless, the Government believe that it would be desirable to draw a clearer distinction between the two stages of an inquiry into a monopoly—the investigation into the facts, i.e. into what is done by the monopoly, and the assessment of their consequences in relation to the public interest."
  In the White Paper we stated our intention to appoint a Registrar of Monopolies who would be responsible for making the investigation into the facts and for setting out for the consideration of the Monopolies Commission the questions and issues involved. I believe that the arguments used in those paragraphs in the White Paper were right, and this has been emphasised by speeches by my right hon. and hon. Friends, and, indeed, by hon. Members opposite. It is not too late to reconsider this question, and I hope that it will be reconsidered.
  Not only is it desirable from the point of view expressed in the paragraph which I have quoted, but it might also make it possible for those companies which are desirous of achieving a merger to go to the Registrar to seek guidance in a way which perhaps they could not do if they had to go to the Board of Trade.
  This point was raised at the beginning of the debate by my right hon. Friend, and in his reply the President of the Board of Trade suggested that it was perhaps difficult for companies to approach the Board of Trade to ask for advice because, for some reason or another, it might not be possible to disclose the various facts on which the Board of Trade could make up its mind whether it was likely to refer the merger or not. It is true that it may not be possible to ascertain all the facts. Nevertheless, the Registrar could in confidence
  1316
  have representations made to him by firms which are likely to come together and merge; it would have to be an approach by both sides.
  They could give him enough information for him to say, "On the facts given to me I do not think that you are likely to be referred", or, alternatively, "You are likely to be referred". This would not bind the Board of Trade or the Registrar in any way at all, but it might be easier to do it with a Registrar than if the matter were left to the Board of Trade alone. I hope that the Minister of State will give attention to this point and, in his reply, will say that it will be reconsidered in Committee.
  I turn to the powers given to the Board of Trade. These are very extensive. I recognise that to some extent they have to be extensive, and I agree with my right hon. and hon. Friends who have said that the existing powers are inadequate. Indeed, this was recognised by the White Paper. The White Paper stated clearly that we thought at that time that the powers under existing legislation were quite inadequate.
  On the other hand, it is going too far to take the power to control prices for an indefinite period. I think that I am right in saying that almost every hon. and right hon. Member on this side of the House who spoke on this subject was against giving these powers. I do not think that they are necessary to deal with the monopolies and mergers which the Bill covers. The powers may be very useful if they are designed to implement a Government policy to control prices, but that is not supposed to be the basic purpose of the Bill. If, however, the Bill is designed as a method of controlling prices, the Government should say so.
  It will be generally agreed that any lengthy control of prices of this kind makes trading extremely difficult, distorts the economy and means that firms must make constant application for increases in prices in the face of rising costs. Although I appreciate that France has a system which is not dissimilar—it controls prices in such a way that firms must make application if they want to increase prices—that system has not resulted in bringing down the cost of living in France. If we are to follow the French example in this connection

  1317
  it should be remembered, on a slightly different subject, that France is about to depart from the very fiscal measures which we are about to introduce. Further, France has announced its intention of encouraging company mergers by easing the tax which at present applies to them. I am sure that this would meet with the approval of the hon. Member for Ashton-under-Lyne (Mr. Sheldon), who suggested that we should have more mergers rather than fewer of them.
  My hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) suggested that if we are to have a restriction of this kind then price control should only follow a recommendation by the Monopolies Commission. There might be something to be said for that idea. As it stands, however, I think that it is a dangerous and unnecessary power and one to which we will have to return in Committee.
  On the question of mergers generally, the President of the Board of Trade said of our proposals that they were rather like shutting the stable door after the horse had bolted. To continue that equine example, I suggest that the Government"s proposals are rather like interrupting a stallion put to stud. One will not get a Jay Trump that way.
  Under the provisions of the Bill if the Board decides to refer a merger that is almost tantamount to deciding that it should not take place, particularly if a temporary stop is put on it and, according to Clause 6, that could be done even before the Monopolies Commission has completed its inquiries. Very few mergers would be likely to survive an inquiry lasting six or nine months, especially if, under the Bill, the Monopolies Commission must then lay a report before Parliament. That could not be done, under the Bill as I understand it, until three months after the report has been made, so it could be nine or 12 months before any action could be taken, and a decision arrived at, about a merger. As I say, I doubt whether any proposed merger could survive that sort of delay.
  As has been mentioned during the debate, the conditions on which the original proposals were made in connection with a merger—the attitude towards the merger, and so on—tend to change, the whole basis of calculations
  1318
  change and often one needs to start all over again. Furthermore, other people may seize the opportunity to come in or to disrupt the merger. As has been pointed out, many desirable mergers could be frustrated because of this.
  The example of I.C.I.-Courtaulds has already been given, including reference to its eventual breakdown. One hon. Member opposite mentioned that one of the effects was to stimulate Courtaulds into taking what he described as a businesslike interest or developing a greater business spirit in consequence of that attempted merger. I do not think that the kind of examination to which they would be subjected under this legislation would have that result.
  Not that I think that the failure of the I.C.I.-Courtaulds merger was necessarily a good thing for the country in the long run. I agree that there is a lot to be said for encouraging more mergers, especially when we must compete with increasingly large industrial combines in other parts of the world. This particularly applies now to Europe, where mergers are taking place the whole time.
  I should not have thought it necessary to hold up the merger while it was being considered. We must bear in mind that if companies are thinking of a merger but know that, on grounds of the operation being against the public interest, the Bill as it stands gives power to the Government to insist on the companies concerned breaking up their assets or splitting apart again, that is sufficient to deter them from merging. If companies had a merger in mind that was likely to be referred to the Commission, knowing full well that in those circumstances they could later be asked either to divest themselves of the assets acquired or split, I do not think that they would go ahead—it would be a very expensive operation to undertake.
  The figure of £5 million has been attacked by various hon. Members on both sides, and I cannot quite understand what relationship it has to the question of monopoly. Whether or not one has assets of that value has nothing to do with whether or not one holds, or is likely to hold, a monopoly position. A company with a comparatively small capital, or total assets considerably below that figure, could well be in a monopoly position,

  1319
  or be able to attain a monopoly position in a limited field—
  Mr. J. T. Price: Sparking
  plugs.
  Mr. Hall: I am not sure that that is a good example, but it may be, and there are examples of that kind. I do not think that it has anything to do with the question at all.
  The Government, or the Minister, have probably been misled by reading that excellent pamphlet by the C.P.C. "Monopoly and the Public Interest", because there the suggestion is made that an asset figure should be taken into consideration. Here, the figure mentioned is even less. That was one of the few proposals that I did not agree with then, and I do not agree with this one now. I am not sure how it will work.
  My hon. and learned Fried the Member for Darwen gave the example of the attempted take over of the W.P.M. Here is a case of an attempted takeover on grounds of diversification. It does not create any greater monopoly position than existed before. Is this the kind of thing that would be referred for consideration? My hon. Friend the Member for Worthing (Mr. Higgins) asked how the Commission would assess the value of the assets. How will it decide whether or not a particular concern has assets worth £5 million? How does it value them? These facts have not yet been established, and we do not know how it will be done. Perhaps the hon. Gentleman the Minister of State will address himself to that matter in his reply.
  Hon. Members on both sides have suggested that the Monopolies Commission should have its name changed, and I agree with the suggestion. The name "Monopolies Commission" gives a wrong impression. My right hon. Friend the Member for Reigate suggested that the name might be the "National Trade Commission". I do not know whether that commends itself to the House in general, but I consider it to be preferable to "Monopolies Commission".
  It has been suggested that the number of members of the Commission should be increased. The figure of 25 is one that we introduced ourselves in the 1953 Act. I thought that it was inadequate then, and I think that it will be even more inadequate in the future. The Minister
  1320
  of State might consider amending the Bill in Committee to give power to add to the numbers by Statutory Instrument. It has not been possible to establish a number, and say that 25, 35, or 45 is the right figure. Power to add to the numbers, to cope with the work placed on the Commission, would deal with that point. It is necessary, and I hope that the Government will accept the suggestion.
  The notable thing about the debate is that everybody has welcomed the Bill in principle, although some doubts have been expressed about its possible effect on industry, as to whether it is likely to be as beneficial as some Members think. We accept it as a logical development of our own previous legislation and preparation. I do not think that by itself it will make industry any more efficient. What it will do, however, is to take another step towards making the country increasingly competitive and perhaps arrest a tendency for industry to relax and become, to use a word which has been used this evening, slothful. There is a tendency for industry to become a little slothful. The Bill, if it does anything at all, will tend to increase the competitive spirit, which, I believe, is one of the essential factors we must have if industry is to be competitive and able to compete successfully abroad.
  The Bill follows the Resale Prices Act, introduced by the Conservatives in the last Parliament. That was the first step in a series of steps designed to improve the efficiency, effectiveness and competitiveness of industry as a whole. The benefits of that Act are now beginning to be felt. Perhaps rather naturally, the present Government tend to take credit for the benefits coming as a result of that Act. I have no doubt that they will take the credit for any benefits which might flow from the Bill in future. I do not object to that. After all, we on this side of the House are concerned only that the legislation approved by the House should be for the benefit of the nation as a whole. It does not matter really which side takes credit for it. I can leave it at that.
  Mr. J. T. Price: The Bill is a big improvement.
  Mr. Hall: I can assure the hon. Gentleman that it is not a big improvement to any of my right hon. and hon.

  1321
  Friends. This has always been our attitude. If the hon. Gentleman looked back at past speeches made by my right hon. Friend the Member for Altrincham and Sale, and my hon. Friend the Member for Reacting (Mr. Peter Emery), he would find many examples showing that this was our main objective. I sometimes wish that the enthusiasm which is now being shown for maintaining and, indeed, increasing the competitive spirit in our economy would also influence the Government"s attitude towards other major industries, to which they seem to have a rather different attitude.
  I can promise the Government that we will co-operate to the full during the Committee stage and do our best to make the Bill more effective and move Amendments which will take into account the many useful points which have been made on both sides of the House. I am certain that the Government will have taken note of these suggestions and will be tabling Amendments to give them effect. If, perchance, they omit to do so, we will help them by tabling Amendments. We welcome this recognition of the need for a competitive economy.
  We wish the Bill well. There is no intention on our part to oppose it in any way. In fact, this is a case where we would have proposed a very similar Bill ourselves. We congratulate the Government on having taken off the shelf a Bill which was ready to come forward. We regret that they have not perhaps included it in some of the things we would have liked to have seen. We regret that they have put into it provisions which we think might not be helpful, but which there is still time to amend in Committee.
  We rest assured that the Government will co-operate with us, as we will cooperate with them, in improving the Bill for the benefit of industry and for the economy of the country as a whole.
  9.24 p.m.
  The Minister of State, Board of Trade (Mr. George Darling): I thank the hon. Member for Wycombe (Mr. John Hall) for his offer to co-operate with us in making this a satisfactory Bill. In view of the remarks which have been made about the paternity of the Bill, this is what we would expect. I am sure that all those hon. Members who referred to the Corn mince stage are now volunteering
  1322
  to serve on the Standing Committee. I am sure that in Committee we can deal with many of the questions which have been raised in this most interesting and valuable debate.
  The Bill has received a general, though somewhat qualified, welcome even from the right hon. Member for Altrincham and Sale (Mr. Barber). I suppose I ought to comment on his reappearance at the Dispatch Box—appropriately the one on the other side of the House. Of course, it is difficult when a right hon. Gentleman disappears from the House in the way that he did. We are in a position of either offering him a welcome or ignoring the fact that he has reappeared. The best thing I can do is to say that if Altrincham and Sale has got to be represented by a Tory, then we accept his return here personally with very good grace indeed.
  The right hon. Gentleman chided us for not putting into this Bill the whole of the White Paper introduced by his right hon. Friend the Member for Bexley (Mr. Heath). After all, he said, we had since last October to prepare this big comprehensive Measure. I should like to quote what his right hon. Friend the Member for Bexley said when I accused him of precisely the same thing, of not introducing a comprehensive Measure, last year. I said that the right hon. Gentleman had had plenty of time to introduce it, and the right hon. Member for Bexley—then the Secretary for Industry, Trade and Regional Development, and I think he was also called the President of the Board of Trade—said that I would recall that he went to the Board of Trade on 20th October. There was not a great deal of difference. We got there on the 21st. He went on to say:
  "Anyone who knows the problems of Departmental life and drafting Bills knows that one could not have drafted a Bill of the size, scope and complexity of that which would be required for monopolies, mergers and restrictive practices in time to have carried it through in this Session."—[OFFICIAL REPORT, 6th July, 1964: Vol. 698, c. 146.]
  What we have done has been to start off from scratch. There was no Bill in the pigeon-hole.
  Mr. John Hall: I thank the hon. Gentleman for giving way. He will recollect that the President of the Board of Trade, in introducing this Bill, described it as a modest Measure, and it is only one

  1323
  part of the legislation which was envisaged by my right hon. Friend.
  Mr. Darling: I was going on to deal with that. There was nothing in the pigeon-holes and we had to start from scratch. We could not introduce a complete comprehensive Measure in this Session, and what we have decided to do is to make this modest first advance towards the comprehensive Measure. We will deal with restrictive practices and other issues which arise out of the White Paper as soon as we possibly can, but this is the first instalment, and I think that my right hon. Friend, instead of being attacked and criticised for making this first instalment in these circumstances, ought to be congratulated.
  There was one contribution from the right hon. Member for Bexley, in a wider sense. I am referring to the Resale Prices Act of last year. We learned from him a year or so ago that even in debates on great issues in this House a majority of one is enough. The right hon. Gentleman nearly got into hot water and into a very difficult situation when he was talking about steel. He may recollect that when we were discussing his Government"s White Paper in July, this question of steel, and how to deal with the monopoly situation in steel, arose and I put two questions. I was winding up for the Opposition. I put two questions to the then Minister of State, Board of Trade, which have not yet been answered by anybody in the party opposite.
  I asked him what, if hon. Members opposite believed in private competition in the steel industry, they would do to get the directors of the steel companies out of each other"s boardrooms so that They could really compete with each other instead of cooking up things between themselves. I am still waiting for an answer to that question. I went on to ask what, if the party opposite believed that competition was impossible among the big firms in the steel industry, because of the need for size and specialisation and so on, they would do to deal with the monopoly situation which arose out of that need. I am still waiting for a reply.
  The right hon. Member for Altrincham and Sale said that he raised this issue of steel at the General Election. So did I,
  1324
  at every meeting, and I made sure that there was a steel worker in the audience to ask questions. [An HON. MEMBER: "A stooge."] No, he was there to ask what the Labour Government were doing about the steel industry, The result is well-known. The right hon. Gentleman was defeated and I trebled my majority.
  Mr. Barber: I was not this afternoon the first to raise the question of steel. It was raised in an intervention from the benches opposite. Secondly, in my election address I dealt with the question of steel. It is true I lost. I think that the hon. Gentleman did not put in his election address any reference to the nationalisation of steel.
  Mr. Darling: That is quite untrue. I mentioned it in my election address and, as I have said, at every meeting during the election, and on television. There is no question about it. I raised it not only at the last election but at every election from 1951 onwards.
  The right hon. Gentleman said that it was quite true that the size of the Monopolies Commission was cut down in 1956. I do not know whether he agrees with the remarks of his right hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan) that this is now considered to be a mistake. I think that it was the right hon. Member for Reigate who said that now, with hindsight, we were increasing the number. That is altogether wrong. My right hon. Friend the President of the Board of Trade and I were both involved in the debates on the 1956 Measure and both of us protested against cutting down the size of the Commission and we forecast what would happen if it were cut down.
  Sir J. Vaughan-Morgan: The hindsight I mentioned was my own. I admitted that it was a mistake to have cut down the number and that there could and should be more.
  Mr. Darling: I am sorry. I thought that we were being accused of hindsight.
  The question has been raised in the debate of why we have not accepted the suggestion in the White Paper that there should be a Registrar of Monopolies. One point struck me as rather peculiar, when some hon. Members opposite were raising this issue. They said that a

  1325
  Registrar would be more impartial than if references were made to the Commission by the Board of Trade. I had the impression from the hon. Member for Sevenoaks (Sir J. Rodgers) that he was thinking of the Monopolies Commission as a sort of trial, and that the Registrar would he involved in making submissions to the Commission on the basis of a trial. We are not concerned about the trial at all. The Commission is not concerned with a trial in that sense. We are merely asking the Commission to investigate the facts.
  Sir J. Rodgers: What I was suggesting was that a Registrar should put the case for the monopoly being investigated by the Commission. The firm would answer that and it was then up to the Commission to adjudicate whether or not the monopoly was in the public interest.
  Mr. Darling: No, we do not want to do it in that way. First of all, we want to get at the facts. It is essential, all through our discussions on the Bill and on the whole question of monopolies, to think of the Commission as a fact-finding body, which, of course, can make recommendations to the Board of Trade though the primary need is to establish the facts.
  This is not the only consideration we have had in mind, of course. As I explained, we had to produce a Bill rather quickly in the terms which were laid down by the right hon. Member for Bexley, and, because of the circumstances, it had to he restricted in scope. We should have much preferred to introduce the comprehensive Measure which, I am sure, all hon. Members want, but we had to keep the Bill short and we did not wish to do anything in the Bill which would completely close the door to the eventual introduction of the Registrar if this was shown to be desirable. However, we thought that a further major unheaval in the system of dealing with monopolies would not be desirable at this stage. We have taken into consideration the other advantages which have been claimed for the appointment of a Registrar, but we have come to the conclusion that we ought not to provide for it in this Bill.
  We have been told that the appointment of a Registrar would separate the factual stage of an investigation from that of adjudication in the public interest,
  1326
  and would also help to speed up the Commission"s work. My right hon. Friend gave careful consideration to the proposal, for which all these advantages can be claimed, but, as I said, it would have meant a much longer Bill and we were not altogether satisfied that the resulting benefits would justify the degree of complication that the appointment of a Registrar would raise at this stage.
  We believe that not only the enlarging and strengthening of the Commission but —here I reply to the point raised by the hon. Member for Worthing (Mr. Higgins) and other hon. Members—the strengthening of its staff, which is equally important, will achieve the major part of the advantages which would have resulted from the appointment of a Registrar; but I assure hon. Members who raised this point that our minds are not closed to the idea and, when we come to deal with the restrictive practices part of the operation, it may well be that we can go back to it and make whatever alteration may arise out of the results of working the Bill.
  Sir J. Rodgers: Are we to take it from the hon. Gentleman"s last remark that there is no chance of the Government putting down an Amendment to the Bill on the question whether a Registrar should be appointed and we shall have to wait?
  Mr. Darling: Not on this Bill, no. We think, for the reasons I have given, that it would make the whole thing too complicated, and, in any case, we have got to come back to the question of restrictive practices and, therefore, we shall have to look at the work of the Commission again as a whole. We think it more desirable to look at the problem again in those circumstances rather than tackle it in this Bill, which must necessarily be limited, for the reasons I have given.
  Mr. John Hall: I apologise for interrupting again, but this is a rather important point. I am not sure, from the answers which the hon. Gentleman has given, exactly why he thinks it not possible to introduce under the Bill a power to add by Statutory Instrument to the members of the Commission. It seems a very simple thing to do, and far more satisfactory than saying that one can come back to it at a later stage

  1327
  after the Bill becomes law, because one never really does that.
  Mr. Darling: The hon. Gentleman seems to be confusing the two points. Up to now, I have been talking about a Registrar. I have said that we consider that increasing the size of the Commission to 25 and, equally important, making sure that it has the right size of staff is the best course for the moment. I do not want to go into detail in reply to the hon. Member for Worthing"s question about the composition of the staff—how many economists and so on—because I should require notice before I could do so, but, clearly, the Commission must have the right kind of staff to do the job. I think that we are in agreement about that. The hon. Member for Wycombe has spoken about the membership of the Commission itself, and this is a question I should be prepared to look at, although at present, until we have discussed the matter a little more fully, I cannot give an undertaking that we should propose an alteration during the Committee stage.
  One of the difficulties—
  Mr. Higgins: I appreciate the hon. Gentleman"s reluctance to go into detail, but can he give an assurance that if the Commission is to work in groups there will be on each group one full-time member and one economist?
  Mr. Darling: I appreciate the hon. Gentleman"s vested interest in economists, if I may put it so, which is in a friendly way. I cannot give that assurance now, but I appreciate the argument. There is a great deal to be said for it. The point is how to find the right people to do this kind of work, particularly the members of the Commission. I think it would be relatively easy with the right salaries to get, as my right hon. Friend said, a professional, full-time body of commissioners, but is that what we want? The Commissioners would, I think, be criticised for being divorced from industry, even from the academic life which some economists ought to have, and trade union leaders would be criticised for being divorced from their trade union practices and activities.
  The proposition of making the Commission more professional must, I think, be taken into consideration, but if we
  1328
  are to carry on with the present voluntary arrangements of having people engaged in industry coming to work for the Commission more or less in their spare time —although a great deal of spare time may be taken up with it—we may have difficulty in finding more than 25 persons at this stage. I do not know. However, this is one of the things that we can discuss later.
  The right hon. Gentleman and other hon. Members raised the question of mergers. They think it is wrong for us to take in the Bill power to hold up mergers during an investigation. On this point the hon. Member for Wycombe was very severe on us. He thinks that the provision may frustrate desirable mergers. He asked me a number of questions. I want to make clear—I repeat what my right hon. Friend and hon. Friends of mine have said—that we are not opposed to mergers and amalgamations in British industry. Of course not. I do not want to reproduce all the arguments which have been put forward for getting a better concentration of British industry, by stopping the dispersal of many industries into small units, none of which is capable of doing the job that industry in our modern economy requires. The bringing together of firms is very desirable. We must have our economy put into a modern shape, and this is one of the ways of doing it.
  Therefore, we are not opposed to mergers and amalgamations in all cases. Indeed, we expect that very few mergers and take-overs will be referred to the Commission. But where there is a prima facie case that a projected merger may be contrary to the public and national interest, it is at least arguable that it should be held up and inquired into so that the facts may be established, rather than that it should be allowed to go ahead and then, if it is shown to be contrary to the public interest, we should have the appallingly difficult job of unscrambling it. We prefer the method we have laid down in the Bill, so that the projected merger can be held up while it is inquired into. Obviously the only mergers which will be inquired into will be those where there is a prima facie case that to let them go on will be contrary to the public interest.
  Mr. Barber: Does the hon. Gentleman agree with his right hon. Friend the

  1329
  Minister of Technology—I quoted him earlier—who obviously thinks that there is a case for inquiry into the motor industry?
  Mr. Darling: One thing that we are not going to do during the debate is to give any indication at all of the references that will be made to the Commission. We do not want any bargaining in this Chamber about references to the Commission. That would destroy everything that hon. Members opposite have been asking for when they have suggested that there should be a Registrar to do it instead of this House. It is a good debating point but has nothing to do with this debate.
  Mr. Barber: It has a great deal to do with it, for the simple reason, as I said earlier, that one of the things of genuine concern to us is not the terms of the Bill but the way in which they are likely to be implemented. We recognise the point of view of the hon. Gentleman and of the President of the Board of Trade. We do not quarrel with their outlook, but I am bound to say that we are concerned about the way in which the Bill might be implemented by some other members of the Cabinet.
  Mr. Darling: If the right hon. Gentleman will allow me to make my speech I will come to such points as he has raised. He has referred to another very important point about Clause 4—which. perhaps, has some slight relation to his previous question, although we are referring to Clause 4 of the Bill and not to Clause 4 of the Labour Party constitution.
  I think that I can best answer the right hon. Gentleman by taking what must be considered a hypothetical case. I must stress that it is hypothetical because he also asked whether any complaints had been made to the Board of Trade about offences—if one can put it that way—against the Stockholm Convention of E.F.T.A. We have received complaints and, therefore, the example I am giving must be a hypothetical case, although it explains what we have in mind.
  Let us assume a complaint from an E.F.T.A. Government that a British company, as a member of an international cartel, is changing discriminatory prices in the complaining country. This would
  1330
  be a breach of the Stockholm Convention and the Board of Trade, therefore, should ask the Monopolies Commission to investigate if the case cannot be settled by discussion among the parties concerned. The word "must" would entail all cases and I would rather temper the expression by using "should". The Board of Trade should ask the Commission to conduct an investigation to establish the facts.
  If, in the light of the facts found by the Commission and reported, we were satisfied that there was a breach of the E.F.T.A. Convention, we could use the powers of the Bill to make an order requiring the firm to end the discriminatory practices complained of. That is what Clause 4 means, but I stress again that, before making an order, we should try to get voluntary arrangement which would put an end to the practices complained of. I think that will work out that way but obviously, having signed the Treaty and accepted the Convention, we must take power, as I am sure the right hon. Gentleman would agree, to deal with the situation that might arise in the way I have described.
  The right hon. Gentleman raised one or two other questions. For instance, he referred to the defensive or restrictive practices of trade unions which, of course, can sometimes be harmful to the development of British industry. I am sure that he has noted with interest the announcement of the appointment of a Royal Commission to consider all aspects of relations between employees and management. I, in turn, also noticed with interest that the right hon. Gentleman had nothing to say about the social consequences of mergers and, therefore, I think that between us, by this reference to the Royal Commission, we can perhaps get things straight.
  Mr. Barber rose——
  Mr. Darling: I am sorry. I must get on now. The right hon. Gentleman also referred to Post Office bulk supply agreements. I think that I can say, on behalf of my right hon. Friend the Postmaster-General, that the Post Office is doing its best to foster competition in the industries in question, that the future is constantly under review and that there is no need for the right hon. Gentleman

  1331
  to assume that the present system will be permanent.
  The right hon. Member for Reigate made a very interesting speech. He said that the Bill had a respectable pedigree —that it was blue with pink spots. That is as may be. The right hon. Member also referred to resale prices and asked whether we would review the Resale Prices Act, a subject also raised by other hon. Members. The right hon. Gentleman will know that, although that Act was passed some months ago, under its terms the Registrar has only just made his first reference to the Restrictive Practices Court. Everybody will agree, whatever statements might have been made in the past, that we must give this new procedure time to work so that we can examine how it works before making suggestions for alterations.
  I have far more sympathy with the right hon. Gentleman"s suggestion that we should change the name of the Monopolies Commission. I have been looking into this, and I have found that the same proposition was put forward in 1948, on the Second Reading of the original Measure. My right hon. Friend the Prime Minister, who was in charge of that Bill, promised to think up a better and more appropriate name if he could, but on Report stage he had to say that, after full consideration and consulting everybody he could think of, he had not been able to find a better name.
  The right hon. Gentleman"s suggestion that it should be called the National Trade Commission was made at that time, but it was turned down for reasons which I will not go into now. I can assure hon. Members that not only in connection with this but also with other legislation in which we deal with trade matters, for instance, the Merchandise Marks Acts, the name of which must be changed when we introduce the new legislation, I shall be very glad to consider suggestions from any quarter for a new name.
  The right hon. Gentleman went on to ask how we proposed to apply price control and for how long. So did the hon. Member for Wycombe. In the past, the Monopolies Commission has made recommendations either straightforwardly for price control, as in the
  1332
  case of matches, or for some kind of supervision of prices and profits. In its Report on the supply of dental goods it recommended that prices should be reduced in the national interest.
  It went into a great deal of detail about matches and recommended that the Government should fix maximum prices for both home-produced and imported matches. On the supply of certain industrial and medical gases, when the Commission was dealing with the British Oxygen Company, again it said that steps should be taken to prevent the British Oxygen Company from charging prices which would produce a higher return of profit on capital employed than was reasonable.
  On the supply of chemical fertilisers it suggested that the pricing policy of Fisons should be put under supervision, although recording its belief that the company itself could be relied on to carry out the recommendation that prices should be kept down. There is a great weakness in accepting that kind of recommendation of course.
  On the supply of electrical equipment for motor cars and so on, it suggested that the prices of sparking plugs were too high and that something should be done to keep them under supervision.
  Our view is that if we receive an adverse report on profits and prices in any particular case and fail to get a voluntary undertaking on prices as recommended by the Monopolies Commission, or as a result of an adverse report—and I must stress that—an Order would be laid to give the Board of Trade power to exercise control of prices. The Order would lay down clearly how the powers would operate, but I must stress that the Board of Trade would never contemplate acting without an adverse report from the Monopolies Commission.
  I should like to take up the point made by my hon. Friend the Member for Acton (Mr. Floud). I have answered the point which he made about staff. The Monopolies Commission"s staff will be improved and made adequate for its job. He raised a point about general references and wanted to know whether there would be any more such references and whether they could be speeded up. The answer is "Yes". Within the scope of the Bill we have

  1333
  power to make an increasing number of general references. If he looks carefully at the Bill he will see that the provision makes it much more flexible for us to deal with general references.
  On Press mergers, it is true that the Bill refers only to amalgamations of newspapers. It does not take in mergers of newspapers and magazines, or newspapers in relation to television companies. The reason its that we are following closely the recommendations of the Royal Commission on the Press. The only difference is that, as my right hon. Friend said, we have discarded the idea that this matter should be dealt with by a judicial tribunal. We have decided that if there are any newspaper mergers which have to be considered they should be dealt with by a special panel of the Monopolies Commission. This proposal has, I think, received general support.
  The hon. and learned Member for Darwen (Mr. Fletcher-Cooke) raised a question about the
  £5 million criterion for mergers and the reference to the Monopolies Commission of mergers above that figure. The figure of £5 million is arbitrary; we accept that. We went through the list of mergers over the last five years and did a little separating of the sheep from the goats. It seemed that £5 million was a very satisfactory figure where the merger did not lead to a monopoly situation. If the hon. and learned Gentleman looks at the Bill, he will see that the provision is rather flexible. We take the book value for assets as shown in the last accounts. But we want this provision for the very reason which the hon. and learned Gentleman gave. Where there is the
  prospect of public detriment arising from too big an empire, where a succession of mergers leads to diversification but the sheer power of the giant, as my right hon. Friend said, even though it is a diversified empire, is so great that it may stifle competition, we think that this kind of merger should be inquired into, and because it does not lead to a monopoly we have to find a new criterion for dealing with it. Therefore, we took this figure for size and said that any mergers above £5 million worth of assets can be looked into if there appears to be a prima facie case that the merger is contrary to the public interest.
  1334
  We have been very pleased that there has been such a general welcome for the Bill. We have been warned that there may be plenty of discussion in Committee on certain points. However, I think that the whole House will agree that this is a very welcome step in the right direction for dealing with monopolies and mergers, and that the powers to be taken by the Board of Trade will, in general, receive the support of the whole country.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  MONOPOLIES AND MERGERS [MONEY]
  [Queen"s Recommendation signified]
  Considered in Committee under Standing Order No. 84 (Money
  Committees).
  [Sir SAMUEL STOREY in the Chair]
  Motion made, and Question proposed,
  That, for the purposes of any Act of the present Session to make further provision for the constitution and proceedings of the Monopolies Commission, for the matters dealt with by the Monopolies and Restrictive Practices (Inquiry and Control) Act 1948 and related matters and for preventing or controlling mischiefs that may result from mergers of businesses or similar transactions, it is expedient to authorise the payment out of moneys provided by Parliament—

  (a) of any increased expenditure of the Board of Trade attributable—

  (i) to any provision for the powers of the Act of 1948 to be extended in relation to conditions of monopoly in the supply of services, or in relation to reports of the Commission on general questions; or

  (ii) to any new provisions about mergers of businesses or similar transactions; or

  (iii) to any extension of the powers exercisable by the Board for or in connection with the preventing or remedying of mischiefs that result or may result from conditions of monopoly or from such mergers or cimilar transactions (including any extension to secure the observance of treaties);

  (b) of any increased expenditure of the Monopolies Commission
  attributable—

  (i) to any such provisions as are mentioned in paragraph (a) (i) or above; or

  1335

  (ii) to any provision for there to be deputy chairmen of the Commission, or for the Commission to be enlarged, or for there to be additional members for particular references, or for the Commission to work on different references in separate groups;

  (c)of any pension or similar benefits payable to or in respect of deputy chairmen of the Monopolies Commission, and of any increase in respect of service as deputy chairman in those payable to or in respect of the chairman.—[Mr. Jay.)

  10.1 p.m.
  Mr. Charles Fletcher-Cooke: I should like to ask a question concerning the Money Resolution and the possibility of moving Amendments in Committee for the appointment of a Registrar for the Monopolies Commission. I do not want to rehearse the arguments at this stage. In his very fair reply, the Minister of State said that it was rather difficult to deal with the matter now and that we must await another Bill.
  Suppose that we decide that we want to do it now and that we wish to move an Amendment in Committee to institute a Registrar for the Monopolies Commission for the purposes that we have argued on Second Reading. Is the Money Resolution wide enough to enable such Amendments to be tabled and to be called?
  The Deputy-Chairman: What is in order in Committee is not a matter for the Minister now.
  Mr. Anthony Barber: Is it not in order, Sir Samuel, to ask the Minister questions concerning the scope of the Financial Resolution? If so, I wonder whether he can tell us whether this question is within the scope of the Money Resolution?
  The President of the Board of Trade (Mr. Douglas Jay): It is not for me to give a ruling about what is in order in Committee, but I would say this. Certainly, neither I nor my hon. Friend would have any wish to exclude discussion of this topic from the proceedings in Committee.
  Mr. J. T. Price: May I add another question, which arises from paragraph (c) of the Money Resolution which authorises the payment
  "of any pension or similar benefits payable to or in respect of deputy-chairmen of the Monopolies Commission, and of any increase in respect of service as
  deputy-chairman in those payable to or in respect of the chairman."
  Were the conditions under which pensions were payable laid down originally in the 1948 Act? If not, are new arrangements being made and is this Money Resolution, to which the Queen"s Recommenadtion has been signified, seeking to vary or in any way amend any previous provisions which have been made?
  In other words, is it merely carrying over an existing liability and may I be assured that it is not creating any liability of which the House should know details before passing the Resolution?
  Mr. Jay: Basically, the liability is the same as it was under previous Acts, except that in so far as we increase the numbers of the Commission we thereby increase the liability for pensions and other matters. Otherwise, basically, the liability is the same.
  Question put and agreed to.
  Resolution to be reported.
  Report to be received Tomorrow.

  COVENTRY (LOCAL GOVERNMENT AREAS)
  10.4 p.m.
  Sir John Hobson: I beg to move,
  That an humble Address be presented to Her Majesty, praying that the Coventry Order 1965 (S.I., 1965, No. 222), dated 12th February, 1965, a copy of which was laid before this House on 19th February, be annulled.
  This is not, I think, on the whole a party matter. I speak from the back benches in order to represent the views of my constituents who are affected, and many others in Rugby and Meriden, who are of all parties.
  It is, of course, true that the Minister himself can rely upon the fact that his predecessor, my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph), proposed to make this Order, and that this Order is in accordance with his decision, but, despite the fact that he can rely on a decision of his predecessor, I can rely on the fact that the hon. Gentleman the Member for Meriden (Mr. Rowland), who is one of the supporters of the Government, has put his name to my Motion, and on the fact that very many constituents of mine and of his, of all political parties, object very strongly indeed to the provisions of this Order and the effect which it will have.
  Therefore, even if both the present Minister and his predecessor are in agreement about making this Order, very many people who are affected by it, and of all parties, are strongly opposed to it, and object very strongly indeed to it.
  I should like to be permitted to say a word of gratitude to the Minister for being here this evening. It is, of course, the fact that Coventry is within the Order and that he is well acquainted with that city, but, despite that fact, I am grateful to him for being in the House this evening to deal with this Motion.
  The purpose of the Order is to transfer within the jurisdiction of the City of Coventry about 10,000 people who at present live on the outskirts of Coventry and within the jurisdiction and administration of the County of Warwick. Approximately 5,000 of those persons live within my division of Warwick and Leamington, largely in the area of Fin-
  1338
  ham, and those 10,000 people are, by this Order, to be transferred, as from 1st April, which is two days after to-morrow, into the extended and swollen boundaries of the City of Coventry, and they are, so far as I can make out, to be so transferred without any administrative benefit of any sort or description to the City of Coventry.
  It has not been suggested by any evidence in the course of the inquiry, that either the City of Coventry itself or the people who comprise the city will derive any benefit at all from the attachment of this 10,000 people. Nor has there been any evidence at all by anybody who has looked into this Order that, on the balance of administrative advantage, one way or the other, there will be any balance of advantage in favour of the change which is proposed.
  It is suggested that this Order bringing this change should be made in the teeth of the unanimous opposition of almost everybody who is affected and certainly of all the local authorities who are affected, all of whom object very strongly to the making of this Order. Therefore, this Order is ignoring local public opinion, ignoring local wishes, and ignoring the views of those who are to be affected by it.
  To tell something of the feelings which the Order has aroused in the areas which are affected, 80 percent. of the voters in the area to be attached to Coventry which lies within my division have, by a referendum organised by the local rural district council, expressed their opinion contrary to the intent of this Order. As to the balance of 20 percent., I do not think that it appears whether they did not vote, or could not be found, or whether they were, in fact, against the Order, but I certainly, since this proposal was first mooted, since it was first put forward on behalf of the City of Coventry, and long before the inspector held his inquiry, received the most strong and violent representations against it from everybody with whom I discussed it.
  Ever since then I have had loud and prolonged protests from all those who are affected, and from all the local authorities affected. Within the area that is affected I have not heard one single voice raised in favour of this proposed alteration of the boundary. The only one that

  1339
  I know of, even in relation to Coventry itself, is the city council and its officials. At the time of the inquiry that was held within Coventry and the area there was a public meeting to discuss and to allow the expression of opinion by local residents. The meeting, which was held in the centre of Coventry was packed. Every person who spoke was against these proposals. Not one voice was raised in favour of them, and the inspector reported that the meeting was intensely hostile to this proposed extension.
  There cannot be the slightest doubt that there is the strongest objection from almost everybody who is affected by this Order, and in that they are almost unanimous. Therefore, one has to see what is the justification for this overriding of local opinion in the area. Local opinion has always been regarded, and I am sure that it is by the Minister, as a matter of the greatest importance. The right hon. Gentleman"s predecessor said that this was one of the most important factors in the consideration of a Minister as to what should be done.
  Local opinion should not be overridden except for the very strongest reasons, and I am sure that the Minister agrees with that principle. While the Act itself and the Regulations lay down a series of factors which have to be considered, one of them certainly is local opinion, and it is only if the other factors point strongly in an opposite direction that local opinion should be overridden.
  Apart from local opinion, local authority opinion is equally firm against the Order, and equally unanimous. First, all the parish councils are against it. Secondly, the Warwickshire Association of Parish Councils is against it. Thirdly, Warwick R.D.C. and Meriden R.D.C. are both strongly against it. The Order will have a disastrous effect on Warwick R.D.C."s viability and capacity to carry on efficient local government until a redrawing of the district boundaries in Warwickshire can be carried out. Warwick R.D.C. is to lose 20 percent. of its population, and 36 percent. of its rateable value by the effect of this Order. Until some alteration can be made in the Warwick R.D.C. boundaries, the Order will not produce an efficient unit of local government. The Warwickshire County Council itself is also, and has been
  1340
  throughout, opposed to this Order. It is proud of the way in which it has administered the area, and it knows of no complaints about the way in which the areas that it is to lose have been administered.
  Therefore, except on the principle that all big towns ought to extend over the area of their adjacent built-up areas, there is no justification at all for this Order. In my submission, the House ought to call a halt to the process whereby, merely because an area adjacent to a big town has become more or less extensively built up, the boundaries of the administration of the county borough should therefore be extended to cover that housing area.
  There is no administrative advantage, and there never has pretended to be any, in support of this Order. The Minister will remember that a lot of evidence was given on this point at the inquiry, and that the inspector who held the inquiry reported that he was unable to come to any conclusion on whether, on the balance of advantage, this Order ought or ought not to be made. That was his report after listening to a great deal of evidence. We therefore have a situation in which, after the fullest inquiry, the inspector says that there is no conclusion to which he can come on whether there is any balance of advantage in making this Order.
  Both the local authorities and the private residents are entirely satisfied with the service which they at present receive from both the county and the rural district councils. Most of them consider those services to be considerably superior to the services which they are likely to receive when they have been incorporated into the city of Coventry.
  In his decision letter, the Minister"s predecessor said, I think, that it would be of benefit to the City of Coventry for this change to take place, but there was no evidence to that effect during the inquiry. It certainly was not a topic upon which the inspector either deliberated or decided. It was a pure inference, unsupported by any evidence. As I have already said, I cannot believe that it makes any difference one way or the other to the City of Coventry whether these 10,000 people are incorporated into its boundaries or not. Therefore, on the basis of an assumed but unproven benefit to the city, and without any

  1341
  balance of advantage either way—putting it at its lowest—this Order intends to override the express and strong view of the people who are affected by it.
  I would remind the Minister that there was a case in the last Parliament, when the County of Rutland was affected. There was very strong local feeling in that case. There were strong administrative reasons for the County of Rutland being abolished, but the previous Government at any rate allowed, and took into account, and made it their decision upon the basis of, the very strongly held wishes of the people of Rutland, despite the administrative advantages which were likely to flow from incorporating the county into some other local government area. Here, we have no such situation. Here, we have no balance of advantage, no proven benefit to the City of Coventry and the strongest possible objection from everybody concerned with the making of this Order.
  I summarise—only on behalf of my own constituents; I believe that other hon. Gentlemen wish to speak about their constituents—the strong objections and the basis of the objections which there are from those whom it is suggested should be incorporated into the City of Coventry. First, the local residents who now live outside the city do not want to be subject to what they regard as a spendthrift and doctrinaire city council. Secondly, they do not want to lose elected representatives who look after them very well at the moment. For instance, in Finham, they have five parish councillors, two representatives on the rural district council and one county councillor. That is eight elected representatives representing that area and they will exchange that for a part in three city councillors whom they will elect annually, together with a large part of the existing City of Coventry, consisting of the wards into which they have now been incorporated. Therefore, they lose substantially, on elected representation which they now enjoy, as a result of this Order.
  Thirdly, they do not want to exchange the excellent services which they at present receive from the Warwickshire County Council for the arrangements which at present exist in the city. I recognise the difficulties of the city, and I do not want to make comparisons which
  1342
  are odious, but matters like the collection of dustbins, the provision of a local district nurse and a local midwife will be radically altered by having the centralised system which is at present provided in the centre of the city, compared to the local service which exists in the actual area of Finham as it is at present constituted. These and other services are now provided on a local basis in a local community, but will be provided as part of the much wider system, and this the residents do not wish to have.
  Fourthly, they do not wish to exchange the excellent Warwickshire high schools and grammar schools for the overcrowded primary schools of Coventry and the prospect of their children going later into comprehensive schools. This is a matter which we may argue. This is a matter upon which we may think they are wrong—although I think that they are right. Many of the residents went to live outside the boundaries of Coventry so that they should enjoy the benefits of the educational system of the County of Warwick. They tried to escape from the boundaries of Coventry for that very reason, but now find themselves thrust back into the area from which they tried to escape. Finally, they do not want to pay a considerably higher rate for inferior services from a city council which they think is antagonistic to their point of view and their way of life.
  These are the arguments upon which I say that this Order ought not to be allowed to operate. But if the Minister and the House are not prepared to accept that request, there is the further point that this Order ought not to come into operation as quickly as it is laid, namely, the day after tomorrow. The rearrangements of the urban districts and rural districts of the County of Warwick are due to come into operation on 1st April, 1967. They could not take their decisions within the county on the nature and shape of their own internal administrative boundaries until they knew for certain the Minister"s final decision on the way in which these boundaries are to be ordered.
  The district councils were asked for their comments on this draft Order on 31st December last. That was when they were first approached and asked for their comments. They were given less than three weeks in which to make their comments

  1343
  on an exceedingly complicated administrative alteration, because they were asked for their comments by 20th January, within three weeks of the Order being placed in their hands. The Order was made on 12th February and it was laid on 19th February. It was not available for several days. It came into operation on 22nd February. The time for praying against it expires on 30th March, which is tomorrow, and it is due finally to come into operation on the day after that.
  The Minister knows very well that this is a very complicated and elaborate administrative arrangement. Much remains to be done. I have been in touch with the local authorities today about the details of the transfer of staff, and some problems have already arisen about the transfer of mortgages for schoolmasters; contributions are given by the county council and the question arises whether this will be continued by the city council.
  Many details of this kind remain to be completed. The whole of the extract from the planning register in respect of the transferred areas remains to be done. The adjustment of the improvement grants remains to be made. The financial adjustments between the two authorities remain to be made. These may be small matters, but an enormous amount of work has been pressed on the local authorities already, and these additional details still require to be done. The readjustment of the boundaries which will be necessary within the County of Warwick cannot be brought into operation until 1st April, 1967, and we shall have a lag of at least two years between this Order operating and the new adjustments of the district boundaries within Warwickshire being ordered.
  In addition, we shall have the odd situation of the city, or parts of it, being represented by five different Members of Parliament. I am sure that the Minister realises that I shall become one of the City of Coventry"s Members of Parliament. This might be a matter which, he might think, should be postponed for a little while until the electoral revisions take account of the alteration of the boundaries.
  Taking the problem as a whole, and looking at it very much more broadly, this Order will do nothing to increase
  1344
  the effectiveness or convenience of local government, which is the statutory requirement which we are considering. It will not make the slightest difference to the City of Coventry whether it does or does not have these added areas.
  Most of the inhabitants of the added areas think that their services will be depreciated and less beneficial as a result of the transfer. Certainly, the inspector who inquired into the matter came to the conclusion that there was no balance of advantage in favour of the Order. Therefore, one is left with informed local opinion which should only be overridden for good reason. It is unanimously against the Order and there is no good reason why that local opinion should be overridden.
  10.26 p.m.
  Mr. Christopher Rowland: I speak on this matter in an even less politically partisan spirit than the right hon. and learned Member for Warwick and Leamington (Sir J. Hobson). The fact that we both speak in support of the Prayer is an index of the non-partisan nature of the objections which have been lodged in our differing constituencies, both of which are affected by the Order.
  I recognise, also, that it is a bipartisan problem from the other side, because the Minister has in many ways only inherited a decision made by his predecessor. All that he has done is to implement it. I speak on behalf of members of all parties and no party in the Meriden Rural District Council. This is certainly the first, and it may be the last, time that I shall have an opportunity to express their protests and the protest of many constituents to the Order, because it is to be implemented in two days" time.
  The opposition to the Order is of long standing. It goes back at least six years, when the proposal was first mooted. During this time there has been no deviation whatsoever by any organisation or body of opinion within the Meriden rural district to the implementation of the Order. Its inevitability has not reconciled my constituents to it nor has it abated their opposition. At the very beginning of this campaign, long before I was elected the hon. Member for this constituency, large public meetings were held in some of the villages affected. In May, 1960, a petition was lodged and in

  1345
  March, 1962, the inspector examining the subject said in his report:
  "It is clear that there is a strong objection locally to the proposals".
  Knowing the temperate language used by inspectors, that was a striking statement. It certainly made it clear that local objection to the proposals was indeed strong. When one bears in mind that it is laid down in matters of this nature that the wishes of people are one of the most important considerations, one sees that the inspector"s statement should have been weighed more heavily.
  Not only individual constituents and residents have objected to the Order. Every organised body of opinion has done likewise, ranging from the Warwickshire County Council downwards, including the Warwickshire Association of Parish Councils, the Keresley Parish Council, the Eastern Green Residents" Association, which is part of the Allesley parish, which is also affected, and even organisations like the Eastern Green Young Wives.
  All these people, who have chosen to live in the Meriden rural district, are worried—rightly or wrongly; that is not the issue before us tonight—about being incorporated in Coventry. They are worried on the grounds of education and about the possibility of higher rates. They are satisfied so far with the education provided in Warwickshire and with the services, such as the library and refuse services. It was not proved to them at the public inquiry that there is any advantage to them in going into Coventry. There has been no plea from anybody to go into Coventry. The inspector himself came to no conclusion at all; he threw up his hands on this issue of the balance of advantage as between going into Coventry and staying out.
  It is no part of my case to criticise the City of Coventry, of which the Minister is himself a distinguished parliamentary representative, and part of which I shall also, like the right hon. and learned Gentleman, represent if this Order stands. I prefer to dwell mainly on the opposition that has been expressed by the Meriden Rural District Council in respect of the way in which this Order will affect it.
  The Council has opposed this Order and this proposal with tenacity and con-
  1346
  viction for years past, because it presents the council with very great problems as and when it is implemented. The rural district is not only one of the largest and most important in the country; it may well claim to be the most important in the country in the one respect that it has total responsibility for maintaining the green belt between the Birmingham conurbation and the City of Coventry.
  It is not unfair to say, and I am sure that the Minister will agree, that it has been successful in doing this partly because it is an effective and viable unit of administration. I will not pretend that after the Order has gone through it will not still be an effective and viable unit. It will lose 10 percent. of its population and 6 percent. of its rates, but it will survive, and its problems are not as acute as those presented to the Warwick Rural District Council.
  I would, however, draw the Minister"s attention to one factor. The Local Government Commission, when discussing whether or not part of the Birmingham conurbation should be taken out of the Meriden rural district and placed under the Birmingham City authorities, said that
  "…The decisive consideration is that it is important to have a strong rural district council assisting the county to control the green belt area between Birmingham and Coventry."
  I believe that the Commission was right, and it is a pity that the Commission and in turn the Ministry, should have gone against that excellent advice when dealing with the smaller Coventry conurbation.
  I cannot accept that big cities, whether Birmingham or Coventry, can look after the green belt better than can the rural districts that lie between them; but the rural district councils can only act effectively if they have the resources to do so. This Order will deprive the Meriden Rural District Council of a proportion of its resources. It may well be that, in the long term, local government reorganisation and regional government will resolve this problem in a different manner, but there seems little prospect of that in the foreseeable future.
  In the meantime, we have to face the problem of who can best preserve the green belt—the big cities, naturally

  1347
  voracious of land for expanding populations, or the rural districts lying between them. I have no doubt at all that the rural districts can do the job best.
  The effect of the Order is to weaken the Meriden Rural District Council in various respects. It will weaken it in its rateable value. The product of a ld. rate this year will go down from £10,700 to £10,365. It is true that there will be a saving in services estimated at £8,000 a year, but I understand that this will be more than offset by a reduction in the rate deficiency grant of £16,000.
  Perhaps most important of all, for rural districts, this kind of decision puts a premium on building in the middle of their green belts rather than on their peripheries, because the result of building on the periphery of the green belt—which takes it right up close to the expanding city—is that sooner or later that city will demand to have that building incorporated within its own community. So, in the long run, this kind of decision could erode the green belt at its heart, because only in this way can rural districts protect the rateable value arising from development.
  There is one other matter in respect of housing which I would like to mention, and that is that under this proposal 231 council houses belonging to the rural district will be absorbed into the City of Coventry. The problems that this poses are many. First, these council houses were built at a period of lower costs. Therefore, they have had the effect of moderating any rise in rents in the rural district, but we have recently had the decision taken in this rural district of a rent rise of 30 percent. this year.
  Many factors are involved, but one is the fact that 231 houses built at a time of lower costs have been taken out of the rural district. In fact, this represents 13 percent. of the total housing pool open to the rural district. Of course, this 13 percent. cannot easily be replaced, because by definition it is not easy for a green belt rural district to find other sites on which to get building permission. It means that 13 percent. of the houses will now no longer be available for the general housing needs of the eastern area of the Meriden Rural District Council.
  An associated feature to which I would draw attention is the dashing of the hopes
  1348
  that the Meriden rural district had of selling six acres of land in the parish of Keresley, one of the two parishes going into Coventry, for development, the proceeds of which would have been used to finance local authority housing elsewhere in the rural district. This land has gone to Coventry. Coventry may well decide to use it as an open space, but the Minister has not excluded it from the transfer provisions. I express my regret and the rural district council"s disappointment in this matter. I believe that this decision may well have been a casualty of the speed with which this Order has been brought in and to which the right hon. and learned Member for Warwick and Leamington has referred.
  I am not sanguine enough to expect the acceptance of our proposal for annulment of the Order by the Minister, but I trust that he will feel able to give us some assurance that he will bear in mind the kind of considerations that I have presented if ever he feels tempted to approve further Orders of this sort at the expense of the Meriden Rural District Council or any other similarly placed rural district close to one of our great cities.
  10.38 p.m.
  Mr. William Wilson: I wish to deal particularly with the area which the right hon. and learned Member for Warwick and Leamington (Sir J. Hobson) has described as Finham. Of that area I probably have greater knowledge than any other Member of the House. I represent the division which adjoins the area of Finham. I live in the municipal ward of Coventry, to which, when this Order goes through, Finham will be lost.
  Further, as a member of the Warwickshire County Council I can say that frequently the residents in Finham have consulted me rather than their own member about county council issues that have arisen in connection with Finham. Indeed, I can go further. Upon the issue which is before the House tonight, both those who wish to stay in the County of Warwick and those who wish to come out of the county have come to me for help and advice, and with great impartiality I have passed on their comments to the Minister.
  As I listened to the right hon. and learned Member for Warwick and Leamington, I detected a note of nostalgia in

  1349
  his voice, because he and I are old Parliamentary opponents on this very ground of Finham. It is true that there are some local pundits who say that if it had not been for Finham the results of the by-election in Warwick and Leamington in 1957 would have made Roxburgh look like a Tory victory.
  Mr. Deputy-Speaker (Dr. Horace King): Order. I am enjoying this, but it is still out of order.
  Mr. Wilson: Thank you, Mr. Deputy-Speaker. I was enjoying it as well.
  Now that the decision is clearly to be made on Finham by means of this Order I feel that it is time for discussion to stop. The decision has been well and truly considered. The Boundary Commission has looked at it, an inspector has looked at it, and two Ministers have looked at it and they have come to the conclusion that Finham should be brought into Coventry. The right hon. and learned Member for Warwick and Leamington spoke about the politics of Coventry as being "spendthrift and doctrinaire". He should realise that there has been continuous Socialist rule in Coventry for the last 27 years and that last Thursday, so "disappointed" are the residents of Coventry with their representatives, we had five Socialist gains on the local council. So much for "spendthrift and doctrinaire."
  I would say to the right hon. and learned Gentleman and to the residents of Finham that Coventry is a city which is in the forefront of municipal administration and endeavour. As a Coventrian, I say to the residents of Finham, "We welcome you into the City of Coventry. By coming in you will not lose your identity. We hope that you will come in with us and that you will make a city which was great in the days of destruction even greater in the days of construction. Come into Coventry and you will say with us, I am proud to be a citizen of Coventry"".
  10.42 p.m.
  Mr. Graham Page: I do not propose to enter the ring on the merits of the Order. My right hon. and learned Friend the Member for Warwick and Leamington (Sir J. Hobson) and the hon Member for Meriden (Mr. Rowland) have put forward a strong case against it and
  1350
  their arguments cannot be brushed aside. The Minister has something to answer in the case which they put forward. They touched upon a number of services the administration of which, to use my right hon. and learned Friend"s phrase, will undergo some radical changes.
  The Order is made in pursuance of a Section of the Local Government Act, 1958, which gives the Minister power to give effect to the Commission"s proposals. Those proposals, made in this and other Orders, affect very wide areas of the country. A great number of these Orders may be brought before the House in future. It is important, therefore, that a wrong precedent should not be set at an early stage, particularly in the timing of the Orders. This Order was made on 12th February. It was laid before Parliament on 19th February and, in respect of certain matters set out in Article 2, the Order came into operation on 22nd February. The rest of the Order is to come into operation on the appointed day, the 1st April.
  There are many important transitional matters to be undertaken by the local authorities concerned, and seven weeks from the making of the Order to the appointed day is not a very long time for this purpose. We have heard tonight that some of the local authorities were asked about the order in its draft form on 31st December last and then given only three weeks in which to comment on it. This is not good enough when dealing with local authorities which have these important functions to carry out in the transition between their old structure and the new structure which is being given to them.
  I do not recall a previous precedent of an Order under the Local Government Act, 1958, for alterations of areas which gave such a short time between the making of the Order and the appointed day on which the local authorities were required to carry it out. I hope that the right hon. Gentleman will in future be able to ensure that a longer time is given for all the necessary things to be done.
  10.46 p.m.
  The Minister of Housing and Local Government (Mr. Richard Crossman): I had better start by declaring an interest in this matter. I represent a part of the city of Coventry, and, after careful

  1351
  consideration, I decided that it was my duty to reply to the debate. I thought that it would be more proper, having an interest to declare, to do it myself rather than allow a Parliamentary Secretary to do it for me.
  I am aware of the problem of timing. It is fair to say that my predecessor made the original decision in December, 1963. He had plenty of time. The Minister"s decision was issued on 10th December, 1963, and on that date he promised consultation and asked for the co-operation of the local authorities concerned in the preparation of the Order. He was Minister from December, 1963, until October of last year, and no consultation took place. There was ample time for it to be done under his aegis. When we took over, there was a nasty problem before me as Minister of Housing and Local Government. I had the choice of regarding this as a matter calling for speedy decision after such a long hiatus, or of saying that one should still give the normal period for consultation. If the hon. Gentleman the Member for Crosby (Mr. Graham Page) cannot think of a precedent since 1958 for such a short period, there has been no precedent for an October election since 1958, if one wants to finish before 1st April.
  I knew it was a short time, and I give an assurance that, after this Order, we shall make sure that there is at least one month for local authorities to consider new Orders. I regard the period as short, but it was a question of a short period or one whole year"s delay in the fulfilment of the Order.
  I have been most interested in the debate. I am grateful to my hon. Friend the Member for Coventry, South (Mr. William Wilson) for expressing that strictly impartial and neutral view of the situation which I myself take. He saw matters with that integrity and impartiality which we all feel in Coventry about questions which affect our city"s interests and which every speaker feels on this issue.
  My hon. Friend reminded us that the result of the Order will be to add 13,000 people to Coventry.
  What has not been said yet is that Coventry asked for 36,000 people and the addition has been scaled down to
  1352
  13,000. We asked for 19,000 acres, and we have got 1,100 acres, a very modest gain for a city of Coventry"s ambitions. How has that result come about and how are the surrounding areas divided? Taking the three names appended to the Motion, the right hon. and learned Member for Warwick and Leamington (Sir J. Hobson) loses 4.700 people, my hon. Friend the Member for Meriden (Mr. Rowland) loses 6,696 people, and the third, the hon. Member for Rugby (Mr. Wise), whose absence is noted, loses precisely three people. Perhaps that explains his absence. The length of speech was in direct relationship to the number of voters lost from each constituency to Coventry. This does not mean that the speeches were not impartial, detached and wise. I use the argument to relate the numbers to the feeling.
  I deal with Meriden first. My hon. Friend felt that a rural district council such as his had been sadly damaged. He did not add that in a few weeks he will be receiving 800 people from Tamworth, which will be an accretion of strength to him. So I should have thought he could have afforded to give us the 6,000. He complained of the six acres which he hoped to sell at a profit. He also mentioned the 230 houses. I would say that these are subjects for arbitration. I strongly advise him that they are matters which should be settled by consultation between the authorities under Section 151 of the Act of 1933. There is power to have consultation, and I think that Coventry City would be generous in dealing with a "small and backward" local authority such as Meriden rural district on the subject of the 230 houses and the six acres.
  As for my personal view of the matter, my hon. Friend did not add that in exchange for the loss of 230 houses to Coventry City, by a recent decision about overspill from Birmingham, thousands of Birmingham houses are to be built in his constituency, the rateable value of which will accrue to Meriden. When he thinks what the Minister has given him from Birmingham, he should be grateful to me for the small loss that he has suffered to Coventry.
  I turn to Warwick and Leamington. This was the first Order that I had to

  1353
  consider, and it is true that my consideration was considerably eased by the fact that the Local Government Commission, an inspector and my predecessor had all decided in a certain direction. The right hon. and learned Member did not mention that the Local Government Commission had in its wisdom allocated to Coventry a vastly greater area covering our refuse disposal works, our airport and many other facilities essential to Coventry in the Baginton area. Great was the rejoicing when the city found that for the first time these essential services were to be included in its area. But great was the shock when it was discovered that, after a neutral verdict by the inspector. my predecessor had allocated the whole of that area to Warwick.
  All I would say is that with an astonishing self-restraint and impartiality I have accepted this denial to Coventry. I told myself "Coventry can afford to accept this defeat and be content to be denied its refuse disposal facilities, especially if they are to remain right outside in the county area". It is owing to Coventry"s belief in good relations with the county that we believe that we shall still continue to have the services of our airport and other essential facilities even though they are across the frontier. It says much for the city"s great belief in collaboration with the county.
  My hon. Friend has said wise words about Finham. I do not deny what the right hon. and learned Gentleman said, that the people of Finham protested strongly and vigorously, with all the power of protest that a small group feels in escaping from what they regard as a doctrinaire ideological dictatorship. We all know the feeling of passion in Finham. The feeling was organised and stimulated by the right hon. and learned Gentleman. He did it with great good spirit, I am sure.
  Sir J. Hobson: I never on any occasion stimulated any opposition. The whole of it was entirely voluntary. All I did was to repeat what has been forcibly put to me. It was not stimulated by me or my party.
  Mr. Crossman: I did not mean about the city of Coventry. The right hon. and
  1354
  learned Gentleman referred to deep feelings about comprehensive education, which is a common situation. I agree that it is a factor which one has to consider. I will take it more seriously than some. I believe very strongly that one should consider this.
  If it had been a larger area, and if it had been an area not so clearly contiguous with Coventry and not clearly an essential part of the city, sharing its services, I might have said that I must overrule the Local Government Commission and my Conservative predecessor. Despite myself, I must say, however, that the thousands of citizens of Finham who object to entry must be denied. I felt it impossible to do otherwise and, on balance, I accepted the decision.
  As my hon. Friend put it crudely, I inherited the situation, but I decided that my predecessor was right in saying that Baginton, on balance, must stay out and that Finham, on balance, must come in. These are questions of balance, and there it is. I do not think this was a difficult decision to take. It is not a major one, but I will give my assurance once again.
  I am not content with the time given. The complaint about that is reasonable. We will make every effort to ensure that in future decisions which I shall be making from time to time now from the pile I have inherited, we really do try to make sure that we have adequate time for consultation with the local authorities.
  I am grateful to right hon. and hon. Members for their self-restraint in expressing their feelings. I feel that they are right in thinking that this decision was not unexpected and that I would uphold a decision which, after all, was taken carefully and impartially by the right hon. Member for Leeds, North-East (Sir K. Joseph). It was, in my view, a correct decision by him. Although in certain ways it has disappointed Coventry profoundly, I think that on balance it is a decision we have to uphold.
  Question put and negatived.

  NIVEN CRAIG
  Motion made, and Question proposed, That this House do now
  adjourn.—[Mr. Lawson.]
  10.57 p.m.
  Brigadier Terence Clarke: I have put down a number of Questions regarding the problem of a prisoner called Niven Craig. This man was let out under the hostels scheme after a very long career of crime, and it is a mystery to me, from the Answers I have had from the Minister of State, as to why he was let out at all.
  I am glad to have this debate in order to clear away a number of doubts relating to the hostels scheme, in general, and to Craig, in particular. I would say here and now that I am thoroughly in favour of the hostels scheme, I think it should be extended and that it should be fair and appear to be fair to all concerned. At the moment, however, a number of people, including most of those now in prison, believe that the scheme is thoroughly unfair and badly administered. This is not a party matter. Whichever party is in power has a duty to see that any penal reform is properly and fairly carried out.
  I understand that Craig has a considerable part of his prison sentence to serve, and that the hostels scheme was designed to rehabilitate prisoners of good conduct and help them to get back into civil life and once more be useful citizens. In 1960, Craig was released under the hostels scheme after a terrible record, which I will read shortly, and he abused the privilege. Within a few months of being put on the hostel scheme, almost a few weeks, he committed an armed robbery. For that he received another long sentence. If that was not good enough, Niven Craig, back in prison again, in 1961 took part in a mass breakout from prison. For that he received another sentence. In October 1961, having been sentenced again, he was back in prison, and today he is the first person I know of to be signed on the hostel scheme again. First, he did nearly nine months on the hostel scheme, although I have always understood that the hostel scheme was meant for people in the last six months of their sentence, so that it was peculiar that he should
  1356
  have gone on it for nine months. He now has nearly 4½years to serve, and he is once more on the hostel scheme in spite of his very bad record.
  I have been asking Questions about this man pretty regularly. On 18th February, the hon. Lady the Minister of State told me, when I asked how many people had been on the hostel scheme more than once, that the number was one. I then asked how many times Niven Craig had been in prison and on what charge he had been convicted in each case. The hon. Lady replied:
  "It would be contrary to long-standing practice to publish the information in my possession about any previous conviction which a prisoner may have; but I am writing to the hon. and gallant Member about the case."
  I got the Minister"s letter a month later, after I had put down this Adjournment debate last week. Waiting a month for an answer is itself a bit peculiar.
  I then asked how many more years, taking into account full remission dates, Niven Craig had to serve in prison, and the answer was:
  "On the basis of ordinary remission Craig has at present four years and eight months of his current sentence still to serve."—[OFFICIAL REPORT, 18th Feb., 1965; Vol. 706, c. 265.]
  That does not accord with my information that one goes on to the hostel scheme only in the last six months of one"s service.
  I should like to quote—these quotations can be checked elsewhere—what two judges have said about this man Niven Craig:
  "You are very exceptionally dangerous, quite cool and cold blooded."
  That was Lord Justice Hilbery. And
  "You are a dangerous criminal."
  That was Mr. Justice Havers.
  This man has been in prison nearly all his life. I have asked the hon. Lady many Questions about him and she has replied that there are very exceptional circumstances about Niven Craig. She has had many opportunities to tell me what those exceptional circumstances are, but so far nothing has come to light.
  On 25th March, in reply to a supplementary Question from a colleague of mine—I was not here on that day—who asked:
  "Could not the hon. Lady admit that Craig in fact is now for the second time on the hostel

  1357
  scheme? Is not this rather extraordinary, since at the moment the term of his sentence should take
  him to about 1973?"
  the hon. Lady replied:
  "Yes. Craig has been treated exceptionally and, as I tried to point out in the previous reply on the case, this is an exceptional case in that he has been in prison for 12 years and, so far as I am aware, there is no other prisoner in any prison in the country who has been in that number of years other than a life prisoner. Although he may be treated exceptionally, this is a rather exceptional case."—[OFFICIAL REPORT, 25th March, 1965; Vol. 709, c. 729–30.]
  It was an exceptional case in that he was an extremely bad prisoner and, if one wanted to take the worst prisoner in the world, one would seem to have the right man in Niven Craig.
  Also, from what I gather, he has been visited by a number of people, amongst whom there are a couple of "do gooders", the Earl of Longford and Lord Stonham, who have taken an extreme interest in this man"s case, as, of course, they are entitled to do, just as any back bencher here is entitled to take up the question of any other person who may be in gaol. It is stated that Niven Craig has received some unusual visitors, among them Lord Stonham, and I know that Lord Stonham has been visiting and taking an extreme interest in this prisoner. That is all perfectly in order, and there is no reason why he should not, but I have now had a very large number of letters from Dartmoor, Pentonville, Wormwood Scrubs, and all gaols, saying there is no good in behaving well in prison and all that really matters is whom you know and not how you behave.
  If that is going to happen to the hostel scheme, the whole thing will break down and will he in complete disrepute. It is essential that prisoners should believe that every prisoner has a proper right to be considered for the hostel scheme and that each one will be considered regardless of whom he knows or who is trying to get him out of gaol. That is my view, and I stick to it.
  Since I first put down a Question to the Minister of State I have been inundated with letters from prisoners, and not only prisoners but their wives as well. I personally think that this scheme should be extended, but not if influence is to be brought to bear on individual
  1358
  cases whom some lord may take up, or some back bench Member may take up, and if this man has a special right to be a favourite. I do not say that that is what has happened. All I am asking the Minister of State is to assure me that there has been no favouritism whatsoever in the case of this man, because she is going to find it very difficult to persuade those in prison that that is in point of fact what has happened.
  Mr. Speaker: Order. I do not think one can leave it vague. The hon. and gallant Member ought to make it quite clear that he is not suggesting that any improper influence was exercised in any way. All he is saying is all right if that be made plain. That is all.
  Brigadier Clarke: I am not suggesting that anything improper has happened at all. What I wish to ask the Minister of State before I sit down is that we should have a public inquiry into why this man, the worst man I can find who ever went to gaol, has twice been let out on the hostel scheme when no other man has ever been let out on a hostel scheme twice before.
  The hon. Lady in answer to another Question said that, apart from those on life sentence, no one has been out on this scheme, and it was because he is the only man serving a long term other than a life sentence.
  I have a number of letters from people who are not on life sentence, and I have one in particular from a man who is on life sentence whose name is Holmes. I visited this man in Pentonville. He had been there for a very long time indeed. He is an extremely intelligent man, and he was let out on the hostel scheme. He had done six months on the hostel scheme, although the hon. Lady said he was out for a fortnight. She said that in reply to a Question from another hon. Member. My information is that he was out for six months; he was pulled back but given no information whatsoever why he was pulled back. I would ask, what is the good of putting a man on a hostel scheme and then, after he has been in over ten years, pulling him back into gaol, giving him no answer whatsoever why he is pulled back, and leaving him there?
  Holmes is alleged to be a "lifer". In fact, he received a sentence of ten years

  1359
  and he appealed, and on appeal his sentence was changed to life. Now, whatever he does, if he gets drunk in the street, he can be pulled back and left in gaol for the rest of his life. That is something the Minister might well change and see that these people, after ten years, when they must be peculiar by any standard, should be given a chance to rehabilitate themselves properly and take their place properly amongst ordinary citizens.
  There is another man I have been there to see at his request on the same problem, and his name is Michael Ali. My only reason for raising his case tonight is that he has written to me twice to say that he is now being ill-treated. The Governor told me at the time that he and Holmes were model prisoners, but Michael Ali now complains that he is being persecuted because he saw a Member of Parliament. I cannot vouch for that—I have not been to see him again; I cannot spend half my time going to gaol to sort out these problems—but perhaps the Minister will make inquiry about Michael Ali"s treatment since I saw him and what happened to him before. One of my hon. Friends wants to have a word about Holmes, in whose case he has been interested, and then I should like to hear a reply from the Minister.
  11.12 p.m.
  Mr. Patrick Wall: I should like to raise briefly three rather strange features of this case. First, as regards sentence, we have been told that Craig received three sentences as an adolescent, another in the Army and three more since. Holmes, to whom my hon. and gallant Friend the Member for Portsmouth, West (Brigadier Clarke) has referred, had one sentence for rape, which was increased on appeal to life imprisonment. This is a time when we are told that even murderers should not stay in prison for more than nine years, as has been said in the House recently.
  As regards imprisonment, Craig has served eight years and another four years and three months, and he has had three months" hostel treatment. Holmes served nine years and eight months and, according to official information, has had two weeks" hostel treatment. He asked to be transferred to Hull, to be near his home, but is request was not granted.
  1360
  With regard to rehabilitation, Craig is allowed to work outside the prison. Holmes has had eight months in prison since his licence was revoked for failure to co-operate with the Central After-Care Association.
  Both Home Secretaries who have been concerned with this affair are men whom we respect and whose justice and fairness is without question, but these three features which I have mentioned show that justice does not seem to have been done. I hope that the Minister of State will be able to explain in a little more detail that justice has been done.
  11.13 p.m.
  The Minister of State, Home Office (Miss Alice Bacon): Before I deal with the case of Niven Craig, I should like to say a word about the man Holmes, whose case has just been raised. Holmes was in prison serving a life sentence for the rape of an 11-year-old-girl. He was put on the hostel scheme. He came out of prison on licence after nine years. As the hon. Member for Haltemprice (Mr. Wall) knows, because he came to see me about the case and discussed it for an hour, Holmes deliberately refused to leave his address with the after-care people who were looking after him. We thought that, having regard to his previous crime, the rape of an 11-year-old girl, we could no longer leave at large a man who refused to leave his address with the after-care people.
  Mr. Wall rose——
  Miss Bacon: I cannot be interrupted; there is not time. That was why we brought Holmes back to prison. Indeed, last Wednesday morning, when we were discussing the Bill to abolish the death penalty, we were urged to exercise more control over life prisoners who were out on licence.
  Now I turn to the question of Niven Craig. I understand the motives which have led the hon. and gallant Gentleman to raise this case. It is understandable that the decision to transfer Niven Craig to a prison hostel should cause some public concern, because here is a man who undoubtedly has a bad record of serious crime. I am not denying that. He still has some years of his prison sentence to serve, and yet he has been transferred to the less restricted conditions of a hostel and allowed to take

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  outside employment. I hope to be able to reassure the House that this decision was not taken lightly or hastily, but only after the most careful consideration, and because my right hon. and learned Friend the Home Secretary was satisfied that on the merits this was the appropriate course to take, and one that seemed likely in the long term to serve the public interest best.
  I should like to correct some misapprehensions about Craig"s position. He has not been released from his sentence, nor has he been promised early release. He is still serving the term of imprisonment imposed on him, and the prison hostel where lie lives is part of the prison at Wormwood Scrubs. In common with other hostel prisoners he goes out to work daily for a private employer. This work was found for him, and he cannot change it without permission. He is paid normal wages, out of which he is required to pay for his board and lodging at the hostel. He is allowed a weekly sum for his fares, expenses, and pocket money not exceeding 30s. a week, and the remainder is saved for his final discharge.
  He is allowed to visit his sister at weekends, and, if he wishes, he may spend one or two evenings away from the hostel for a specific purpose agreed to by the prison authorities. Other hosteliers are not subject to such strict conditions about the use of their leisure time. These temporary releases to go to work and to visit his sister at weekends are authorised under Rule 6 of the Prison Rules which permit the temporary release of any sentenced person for any special purpose, or to enable him to engage in employment, to receive institutional training, or to assist him in his transition from prison life to freedom. When he is away from the hostel he may be recalled at any time, and he may at any time be taken off the hostel scheme and made subject to the normal prison régime again.
  As a matter of administrative practice a prisoner does not normally go to the hostel scheme until he is within six months of his date of release, but there is no rule about this at all. I assure the hon. and gallant Gentleman that although it is usually the practice that it is the last six months, there is no rule about this at all. Where Craig has been
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  treated differently is that it was decided to put him on the hostel scheme with more than four years of his sentence still to serve, and it is that decision that I want to justify tonight.
  The events which led to this decision may be said to have begun about a year ago, in the early part of 1964. Before that, Craig, like many other prisoners, had submitted petitions about his case, and representations had been made on his behalf, but nothing had come to light to justify any action on the part of the then Home Secretary. Early in 1964 Craig petitioned again, asking the Home Secretary, who was then the right hon. Member for Hampstead (Mr. Brooke), to review his case and to give him a chance.
  Like all petitions and representations on behalf of prisoners, this was carefully considered, and certain features were noted about the case which suggested that it might be exceptional. Here was a man aged 38, still comparatively young, who had been continuously in prison since 1952 and who, if he served his last sentence, would not come out at the earliest before October, 1969. This was after 17 years continuously in prison and much longer than is served by most people who are undergoing life imprisonment.
  This by itself would not be sufficient to justify special treatment, but coupled with this were indications of a changed attitude on Craig"s part. There was good reason to believe that he was sickened by the life of crime and determined to go straight if given the chance. Craig himself said this in his petition, but more significant were reports from prison staff, who knew him well, that they believed that these statements were sincere.
  In order that the matter could be more fully considered, full reports, based on observations over prolonged periods, were obtained from prison, including reports by medical experts covering Craig"s present mental and physical condition and the likely effect on him of completing his sentence, his response to prison training, the risk that he might again turn to crime and the prospects of his resettlement. These reports showed that the most recent sentences—those imposed in 1961—appeared to have given Craig a severe jolt and to have changed his whole outlook towards crime. He was at the present time determined to go straight and

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  to make the most of any opportunities afforded to him to lead an honest life. The prospects of rehabilitation were good.
  Against this, the reports indicated that if Craig were made to serve his sentence in full he would almost certainly deteriorate, and any hope of rehabilitation would be completely destroyed by further lengthy imprisonment. Here was a situation demanding a constructive and imaginative use of the prison system, and a bold and experimental step seemed justified. If Craig completed his sentence the public would be protected from him for another five years, but there was a near certainty that he would leave prison an embittered and dangerous criminal.
  Brigadier Clarke rose——
  Miss Bacon: I am sorry. I cannot give way. I must not be interrupted or I might not say what I wish to say.
  If he were given a chance there was the distinct possibility that he might go straight, and in the long run this would be very much in the interests of the public as well as of Craig himself. The risk admittedly existed that Craig, however genuine his present intentions, might find himself unable to maintain them and might revert to crime, and full account was taken of Craig"s misconduct when previously on the hostel scheme. But on balance the risk seemed to be worth taking.
  Shortly before the General Election, the then Home Secretary, the right hon. Member for Hampstead, consulted the Lord Chief Justice about this proposal, and the Lord Chief Justice in turn consulted the judge from whom Craig received his latest sentence. When these consultations had been completed, the papers came before my right hon. and learned Friend with further up-to-date information about Craig"s circumstances, and he decided, after careful consideration and further inquiry, to agree to Craig living experimentally under hostel conditions and going out to work. He balanced the risks involved and came to the conclusion that the public interest would he best served by trying out this one method which seemed to hold out a good chance that this hitherto dangerous criminal would not return to crime.
  Craig was accordingly put on the hostel scheme at the end of December, subject
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  to the strict conditions which I have mentioned. I am pleased to be able to say that Craig"s employer is very satisfied with the way in which he has settled down and the excellent standard of his work. He works overtime, is punctual, reliable and efficient. Nevertheless, Craig is faced with a difficult situation and many temptations, but so far he appears to be co-operating with those who are trying to help him to overcome these difficulties. The case will be further reviewed when Craig has been at the hostel for 12 months.
  I have gone into some detail about the sequence of events in the consideration of this case because of the suggestions of favouritism which have been made. I would like to make it perfectly clear that the decision in this case was taken by my right hon. and learned Friend on the basis of the very full reports before him and that he was in no way influenced by any representations made to him or any pressure put upon him from any quarter whatsoever.
  I readily acknowledge that the decision in this case may have been misunderstood, not least by other prisoners who could not see how they were any less deserving of early admission to the hostel scheme. It is understandable that when different treatment is given to one man in a close community such as a prison every aspect of the case should be scrutinised. By demonstrating in the House and outside that this different treatment was justified by the exceptional circumstances of the case and was in the public interest, this debate will have served a most useful purpose.
  My right hon. and learned Friend and I believe very firmly in the hostel scheme as a means of the rehabilitation of prisoners and we want to see it greatly extended. I recognise fully the interest which the hon. and gallant Gentleman has shown in this case, and I know that he has made many visits to Pentonville to interview prisoners there. I assure him and the House that we have, we believe, acted in the best interests of Craig and in the best interests of the community at large.
  Question put and agreed to.
  Adjourned accordingly at twenty-seven minutes past Eleven o"clock.