HC Deb 27 June 1968 vol 767 cc937-43


9.30 p.m.

Mr. Dell

I beg to move Amendment No. 17, in page 11, line 5, at the end to insert: (5) For the purposes of this section ' relevant restriction' includes any restriction by virtue of which an agreement would be subject to registration under Part I of the Act of 1956 apart from subsection (8) of section 8 of that Act (exception for export agreements). This is a minor drafting Amendment. Clause 13 defines a "relevant restriction" for the purposes of the Bill generally as meaning a restriction which makes an agreement registerable. These words are, however, used in Clause 11, not only in relation to registered agreements, but also in relation to certain export agreements which are exempted from registration from Section 8(8) of the 1956 Act but are required to be notified to the Board of Trade under Section 31 of that Act.

The definition in Clause 13 is inappropriate to restrictive terms in these export agreements. The Amendment expands the definition of a "relevant restriction" to cover restrictive terms in these agreements.

Amendment agreed to.

9.31 p.m.

Mr. Dell

I beg to move, That the Bill be now read the Third time.

Although this is a comparatively short Bill and, in many respects, a non-controversial one, we have spent almost 20 hours in discussing it since it received its Second Reading. In that time, many Amendments have been moved and some valuable changes have been made. The Bill has therefore been the subject of long and detailed consideration. Hon. Members opposite have not always felt able to agree with all we wished to do, particularly in relation to the provisions dealing with agreements made in support of the prices and incomes policy. Perhaps that was too much to expect.

Altogether, we have achieved a good deal. For example, In Clause 1 we have clarified the definition of agreements which qualify for exemption from registration, and we have placed a statutory duty upon the Board of Trade to take account of the interests of the consumer when considering agreements for exemption. I hope, too, that we have given some reassurance to industry by the provision requiring the Board of Trade to give notice before revoking an exemption order.

We made a useful Amendment to Clause 4, again with the interests of the consumer in mind. We had a particularly useful debate about the provisions relating to information agreements about which there is a broad area of agreement on both sides of the House but about which fears have been expressed concerning the operating mechanism. I hope that the Amendment which makes calling up orders subject to the affirmative resolution procedure and the provision providing for statutory consideration of representations will allay the fears of those who have argued that the Clause will interfere with normal and legitimate commercial activity.

It might be useful, however, if I were to reiterate that it is not the Government's intention to use the Clause 5 powers to call up beneficial classes of agreement. What we are concerned with is to bring to an end evasion of the provisions of the 1956 Act by the use of agreements which in form have not in the past been registrable.

Although I have been unable to accept a number of Amendments tabled to Clause 9, I have been able to give an indication, which I hope will be useful to industry and its advisers, of the way in which the machinery of the Clause will be operated.

To sum up, the Bill contains a balanced package of provisions which, on the one hand, will add flexibility to the operation of the present legislation and, on the other hand, will strengthen the hands of those whose duty it is to ensure its enforcement.

9.34 p.m.

Mr. Lane

I support the Bill as a useful step forward in our continuing attempt to find the right balance between competition and rationalisation in the modern industrial economy. I like the later Clauses rather more than the earlier Clauses.

Will the Government do all they can to make this new legislation comprehensible to industry? This point arose several times in Committee. Modern life gets more and more complex. Many problems arise simply because of lack of understanding or failure of communication.

Westminster and Whitehall are widely thought to be out of touch with the people of the country. This is a problem to which we can return more widely perhaps on some other occasion. But within this narrow aspect, I believe that the Government, in administering this Bill when it has passed through the House, have the chance to make a modest contribution towards putting it right by sparing a thought for people in industry who have to operate their side of this legislation. Will the Government do everything they can, by means of special leaflets, articles in journals and the like, to make clear to people in industry how the procedures work and what is required of them? This will help considerably in achieving what we all want, namely, that there shall be the maximum good will in industry in the operation of this legislation.

With this special plea, I support the Third Reading of the Bill.

9.36 p.m.

Mr. Tom Boardman

I, too, support the object of the Bill. I acknowledge that during the 20 hours in Committee when we discussed the Clauses the Minister showed considerable patience and understanding with the points that we made, although it is also true that he did not, as I am sure he will acknowledge, often feel able to meet them. It is some tribute to the work of my hon. Friend the Member for Morecambe and Lonsdale (Mr. Hall-Davis) that a number of the points which were so fully discussed in Committee have been acknowledged and, to some extent, accepted by the Minister.

I have some reservations about the Bill. I have already ventilated them in Committee, so I will refer to them only briefly.

The first is that the 1956 Act set a standard and a procedure which has stood well the test of 12 years. During that period, as one would expect, it has disclosed gaps and weaknesses. The object of the Bill has been to fill those gaps or strengthen those weaknesses. That is something which I commend.

The Bill established two standards. It established a standard for the competitive society which is spelt out in the 1956 Act and it set out a standard for the non-competitive arrangement contained in Clause 1. The Minister knows that this is something which caused me considerable concern.

There are two tribunals. Judgment is decided by one of two tribunals. There are those cases dealt with by the Restrictive Trade Practices Court, set up by the 1956 Act, which merit the full rigour of that court; and there are those cases, if I may use the Minister's own words in Committee, which amount to administrative discrimination. In case that should be considered a harsh definition, the Minister used it at col. 249 of the Committee proceedings on 30th May, 1968.

That is one of my concerns—the two standards and the two tribunals. This is a departure from the practice set up by the 1956 Act.

Another concern relates to the bringing in of information agreements in Clause 5. I recognise all too well the evil at which this was aimed—price fixing by exchange of information. I have some doubts whether Clause 5, which brings in the whole terms of information agreements—price, conditions, place and all the rest—is not going far too wide. I freely acknowledge that the Minister has helped us by saying that those agreements will not be brought in except by order. The Minister has made certain provisions which in some way meet our points in that respect. However, I believe that the provisions of Clause 5 may give cause for trouble in future. The evil in exchange of information is the information exchanged concerning price, which is referred to in Clause 5(l)(a). I think that exchange of information on other matters—I know that this is a view not necessarily shared by all hon. Members on this side—can beneficially be exchanged, provided there is a free for all concerning price. That is the area in which competition really matters.

I fear that the Bill can be used as a net which may catch little fish, but will enable the big fish to escape. The two standards; to which I have referred may mean one standard for the big fish, and another for the little ones. All too often a net which is dropped to catch large fish catches hundreds of little, innocent ones.

I hope that I shall not be misunderstood if I use the newspaper industry as an illustration. Something which is set up to catch the big newspaper proprietor might catch all the newsboys and roundsmen who put their heads together and decide which is the most convenient way of pedalling their bicycles and letting each other know when Mrs. Bloggs is out.

We shall have to wait and see how the Measure works out in practice. I hope that my fears will prove groundless. The 1956 Act was aimed at creating an efficient, competitive and just attitude of mind in both industry and commerce. It would be a tragedy if the Bill with its Ministerial discretion did anything to destroy that. Subject to the reservations which I have expressed, I support the Bill.

9.41 p.m.

Sir Keith Joseph (Leeds, North-East)

Because of illness I missed the previous stages of the Bill, but I read the HANSARD reports with great interest. I very much admired the efforts of my hon. Friends, led so admirably by my hon. Friend the Member for Morecambe and Lonsdale (Mr. Hall-Davis), to probe, clarify and improve the Bill. I was not there, but I acknowledge the apparent courtesy and helpfulness of the Minister of State. The Committee approved eight significant Amendments, of which five were proposed originally by the Opposition. The Bill emerged from Committee better than it was when it went in.

The Minister called the Bill a non-controversial Measure. I say that it is a latently controversial Measure, because I echo the reservations entered by my hon. Friend the Member for Leicester, South-West (Mr. Tom Boardman), particularly about Clause 1.

I propose to concentrate my remarks on the discretion given to the Government to exempt agreements from the tough Restrictive Trade Practices Act, 1956, which of course was passed by the then Conservative Government. I accept at once that industry may have played its part in the original concept of this and other parts of the Bill, but I suspect that industry found Ministers philosophically susceptible to the arguments it put forward.

An organised market diminishes competition. We on this side of the House believe that competition is the best safeguard that the consumer has for his interests. We therefore start with a wholehearted presumption against any restraint on competition. The Government to some extent share that view, but I do not believe that they are as wholehearted about it as we are."Little Neddies"set up by the Government woo Ministers with seductive proposals for import substitution and other interventionist doctrines.

It is only today that the summary of the Brookings Institution Report on the British economy says something extremely appropriate. The Financial Times report says that the Brookings Institution found no logical reason why Government intervention should not move mountains, but also no mountains that have historically been moved. We have the greatest suspicion of Government intervention, and we are also sceptical about intervention by the Government to exempt restrictive trade practices from the scrutiny of the courts. We accept that there may be some minor administrative conveniences that may make sense and that should be exempted under the procedures proposed by the Bill and that will not diminish competition, but market-sharing agreements such as are envisaged under Clause 1 are a very different matter, and on them we have the very greatest doubt. We are not so dogmatic as to exclude all possibility of a justifiable case, but we are sceptical of any net benefit to the public.

We on this side well understand that the pressures of decision-making in capital intensive industries are fierce, and growing every year fiercer, but these pressures, which impose sharp dilemmas and awkward choices on entrepreneurs and managers, are the very pressures that guarantee to the public an untiring pursuit by industry of cheaper investment, of improved marketing and of ever closer attention to the demands of the consumer. Where these pressures imposed by competition are relaxed, the price may prove to be high and the consumer, the public, will pay that price. At the end of the road of exemption from the Restrictive Trade Practices Act lies misuse of resources, sluggish response to the interests of the consumer and lack of enterprise.

We note with appreciation the Government's caution. We have read the cautious Second Reading speech of the President of the Board of Trade. We welcome this caution. We urge them to be extremely cautious. We shall scrutininise any orders under the Bill very critically, we shall put this discretion to exempt agreements from the restrictive trade practice procedure under the very strictest probation and we shall not hesitate to withdraw it if it is abused when we are once again the Government.

Question put and agreed to.

Bill accordingly read the Third time and passed.