HC Deb 30 January 1967 vol 740 cc44-8
The President of the Board of Trade (Mr. Douglas Jay)

Over the past year it has been increasingly suggested that there may be restrictive practices in the professions which are contrary to the public interest. I have therefore decided to ask the Monopolies Commission to investigate this matter and to make a general report to me under the extended powers in Section 5 of the Monopolies and Mergers Act, 1965. The Commission will be asked to consider such questions as restrictions on entry into a profession, the practice of charging standard fees or commissions for professional services, the terms or conditions on which professional services are to be supplied, and restrictions on advertising. I am circulating the full terms of reference in the OFFICIAL REPORT.

The intention is that the Commission should conduct as comprehensive a survey as possible of all professions, omitting from consideration practices which are expressly authorised by Statute or Royal Charter. The precise method of handling the inquiry will be a matter for the Commission and they can be relied upon to keep it within manageable bounds. They will however be asked to report to me on the extent of the specified practices, if any, in professional services; whether these practices operate against the public interest; and, if so, what remedies they propose.

This request to the Commission does not in any way overlap with the activities of the National Board for Prices and Incomes or preclude references to that body of the level of particular professional charges. The possibility of certain references of this kind to the N.B.P.I. is, indeed, being considered.

Mr. Corfield

Is the right hon. Gentleman aware that, just as we supported the provisions under which this reference is made, we welcome this reference in principle? The term "professions" covers a very wide range of services with an equally wide range of characteristics. Will he consider being very much more precise in the terms of reference to the Commission, bearing in mind that there are wide differences of opinion even as to what is a profession and what is not? The right hon. Gentleman has only to refer to a number of dictionaries to find that there are even wide variations among them.

Secondly, in referring to the terms of reference—of which he kindly gave me a copy—the right hon. Gentleman made it clear that one of the restrictions to which the Commission is referred is the restriction on entry by way of examination. Yet, in the second paragraph of the terms of reference, he makes it clear that, although this should be regarded as restrictive, the Commission must not look into the standards of examination. This is a contradiction in terms. If the Commission is to decide whether these qualifications by examination are in the public interest, surely the Commission must look at the examinations.

Mr. Jay

I am grateful to the hon. Gentleman for his support for the inquiry generally. As to his first point—this is an inquiry into practices and not into professions as such. We have, therefore, specified precisely the practices concerned in the terms of reference, and it will be the duty of the Commission to inquire into those practices wherever they exist. We did not think that it would be possible to define the professions as such. We think that that is better left to the Commission.

Secondly, I think that the hon. Gentleman will agree on reflection that there is not a contradiction here. It will not be for the Commission to try and specify exact standards for entry into an individual profession. It might, however, be within its competence to take a view on whether entry into a profession should be controlled wholly by that profession itself or by some independent authority. There is no real contradiction here.

Mr. Lipton

Will my right hon. Friend make it clear whether or not the inquiry will also investigate the practices of the legal profession, including the Bar and the solicitors?

Mr. Jay

I thought that I had made it clear in my statement that no profession as such is excluded from the inquiry.

Mr. Heath

It is interesting to hear what the right hon. Gentleman says about the definition of "professions". But that is not what he said in his statement. From my own experience, I recognise the difficulties of definitions of this kind, but the right hon. Gentleman is asking the Commission to consider such questions as restrictions on entry into a profession, not merely restrictions on entry. Therefore, either the right hon. Gentleman or the Commission must define what is meant by "profession". Is it not the case that consideration of restrictions on entry means that the inquiry can go into the whole range of trade union restriction on entry as well? I am sorry that the right hon. Gentleman has not solved this dilemma in his reply to my hon. Friend the Member for Gloucestershire, South (Mr. Corfield), and I think that the right hon. Gentleman knows it.

Mr. Jay

I did not attempt to define "profession", and we are seeking not to do so. We think it wiser to define the practices and leave it to the discretion of the Commission to decide where the practices lie. As the right hon. Gentleman knows, trade union restrictions are covered by the Royal Commission on Trade Unions and Employers' Associations.

Mr. C. Pannell

Since my right hon. Friend suggests that there are no limits at all, will the inquiry extend to the world's oldest profession.

Mr. Jay

I am quite prepared to leave that to the Commission.

Sir Knox Cunningham

When may we expect the report to be made? Does the right hon. Gentleman include M.P.s in the professions?

Mr. Jay

I would expect this to take a reasonable period—something up to two years.

Mr. Whitaker

Is my right hon. Friend and constituent aware of the extremely warm welcome given to his announcement of this long overdue inquiry by right hon. and hon. Members on this side of the House, including those belonging to the professions? Will the Restrictive Practices Court now also entertain professional charges and services?

Mr. Jay

No, Sir. The Court, under present legislation, is confined to goods. We felt that there was here a gap that should be covered, and that is why we have asked the Commission to undertake the inquiry.

Mr. Clark Hutchison

Is the right hon. Gentleman aware that I think that this is a lot of nonsense? Does the inquiry include the Church?

Mr. Jay

I have already tried to make it clear that we are not attempting to define the professions. The Commission, which has a lawyer as Chairman and includes a number of professional men, will be perfectly competent to do that.

Mr. Bessell

Is the right hon. Gentleman aware that his statement will be greeted with considerable relief by the Liberal Party, since we have for long advocated such an inquiry and welcome his initiative? Can we hope for an early report followed by early legislation?

Mr. Jay

I am always grateful for the hon. Member's support. I can only say that I hope that both the report and the legislation will come as soon as is reasonably practicable.

Mr. Pavitt

If there is to be an examination of fees, will relating fees to the total cost of a project be within the purview of the Commission to make sure that there is not just an increase according to the rise in the cost of labour?

Mr. Jay

I emphasise again that we are asking the Commission to inquire into certain restrictive practices, which are defined. If what my hon. Friend says comes under that heading, then certainly it would be within the terms of reference.

Mr. Fletcher-Cooke

Although the right hon. Gentleman will not define a profession, will he say whether the inquiry will relate to professional people who are nevertheless employed persons and not merely those who are acting independently?

Mr. Jay

I would certainly say that an individual would not be automatically excluded because he was employed and not self-employed.

Following are the terms of reference: Monopolies and Mergers Act 1965 Request for General Report on Restrictive Practices affecting Professional Services The Board of Trade in pursuance of the powers conferred upon them by section 5 of the Monopolies and Mergers Act, 1965, hereby require the Monopolies Commission (hereafter called "the Commission") to submit to the Board a report on the general effect on the public interest of the following practices so far as they prevail in relation to the supply of professional services, that is to say practices which are restrictive of—

  1. (a) entry into a profession;
  2. (b) the fees or commissions to be charged for the supply of such services;
  3. (c) the rendering of such services by or on behalf of bodies corporate or by persons acting in partnership;
  4. (d) the persons to whom, or the circumstances in which, such services are to be supplied;
  5. (e) the terms or conditions on which, or the manner in which or extent to which, such services are to be supplied;
  6. (f) the carrying on of any other business by persons supplying such services or the commercial relationship of such persons with others engaged in other activities;
  7. (g) the extent to which, if at all, persons supplying such services may advertise.
Provided that the Commission shall not report on practices expressly authorised by or under any enactment or Royal Charter. 2. For the purposes of this instrument the practice of limiting entry to a profession to persons who pass examinations designed to test their proficiency shall be regarded as a practice restricting entry into that profession but the Commission shall not report on the standard of proficiency required for entry into any profession.

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