SECRETARY OF STATE (TRANSFER OF FUNCTIONS)

HC Deb 03 December 1969 vol 792 cc1635-61

Mr. Speaker

Order. Before I call on the hon. Member for Leeds, North-East (Sir K. Joseph) to move the Prayer, may I say that a point of order was raised with me privately by the right hon. Member for Wolverhampton, South-West (Mr. Powell) at the end of the last debate on a Prayer. May I therefore confirm that the Chair always has the right at half-past eleven to decide whether the subject of the Prayer has been debated adequately, and if he thinks that it has not been debated adequately he may adjourn the debate.

10.28 p.m.

Sir Keith Joseph (Leeds, North-East)

I beg to move, That an humble address be presented to Her Majesty, praying that the Transfer of Functions (Monopolies, Mergers and Restrictive Trade Practices) Order 1969 (S.I. 1969, No. 1534), dated 29th October, 1969, a copy of which was laid before this House on 29th October, be annulled. We have put down the Prayer to give the Government an opportunity to explain to the House the policy behind the proposed transfer of responsibility for the Monopolies Commission and the Restrictive Trade Practices Court from the Board of Trade to the Department of Employment and Productivity. I am very disappointed that the Secretary of State for Employment and Productivity is not present to explain the Order. We have a respect and regard for the Minister of State, who is always very courteous to the House, but this is really his right hon. Friend's business, and she should have been here. She has successfully taken over a large slice of another Department's activities. She was no doubt given a consolation prize at the time of the Cabinet reshuffle for the Prime Minister's failure to support her in her proposed trade union legislation, and it is that consolation prize, the result of a prestige struggle in the Cabinet, that we are discussing this evening.

We hope that the Minister of State will be able to explain exactly what is in the Government's mind. First, is it or is it not a fact that his Department—his new Department, because he, as well as the jurisdictions we are discussing, has been taken over from the Board of Trade—advises companies that acquire other companies to inform the workers concerned? Does not his Department advise all companies involved in merger and takeover operations to keep their staff and their workers fully informed of what is going on? I think that he will find that that is regarded as good practice.

In the light of that, will he tell us whether the Government in fact consulted or informed the members of the Monopolies Commission or the members of the Restrictive Trade Practices Court before the public announcement was made of what was happening? The impression I get, admittedly only from the newspapers, is that these procedures were sadly breached in this operation.

Will he tell us what the object of this transfer of functions is? Have the Government the least idea of what they are to do in the D.E.P. with the Monopolies Commission? They are intending, we are told, to merge it in some way with the Prices and Incomes Board. Our view is that the Government should spell out their objectives and that the institutional changes should follow the declaration of objectives. Here we have the precise opposite. The institutional changes are announced first and we, the House and the country, have no idea of the objectives which the institutional changes are meant to implement.

After all, it was the Fulton Committee which recommended that the Government should look at the job first before staffing it. Here we have precisely the opposite. The staff has been shifted with no job definition. Frankly, we fear the worst. We fear that this is political stage management and has nothing to do with the national interest. We fear that once again the Government's tendency to go in for double talk is ruling the scene.

The Government are facing two critical audiences on the prices and incomes front. They have to satisfy the main creditors of the country, organised through the International Monetary Fund, who for some reason expect of this country what they expect of no other country—that there be some sort of enforced prices and incomes policy, an attitude which we deplore and with which we do not agree.

The Government are trying to satisfy the I.M.F. that they will treat prices and incomes policy seriously and at the same time they have to face hon. Members below the Gangway who, for different reasons, but with the same intensity as we have, dislike the prices and incomes policy.

Our impression is that the Government are trying to confuse everybody by mixing prices and incomes within a new framework dominated by a yet unknown merger, as yet an undetailed merger, of the Prices and Incomes Board with the Monopolies Commission. This is doubletalk to attempt to persuade the I.M.F. that the Government will he serious about incomes while persuading hon. Members below the Gangway that it is only prices about which the Government are to be serious.

There is another sort of double talk. We have experienced only too much over the last five years the habit of Ministers by their policies causing increases in prices which they then deplore as if they had nothing to do with them. Time and again the policies of Ministers, tax policies, economic policies, have resulted in the putting up of prices. Time and again the same Ministers, as if they had nothing whatever to do with them, have deplored the price increases which have inevitably resulted.

We believe that prices should be disciplined by competition and not by edict. We fear that the Government are embarking on a course which nominally is aimed at disciplining incomes and prices, but which in fact is to be focused mainly on prices. The leaks in the newspapers that we have read indicate that the new body, of which we hope the Minister of State will give us details, will be addressing itself to the efficiency of industry. But we on this side of the House maintain that the system of competition within the law is by far the best discipline yet invented for industry.

Only where there is not competition because of a monopoly situation do we accept the need for Government supervision, intervention or inquiry. We do not deny that, where there is a monopoly or even an alleged monopoly or the possibility of one, the Government of the day must inquire and, if necessary, seek relevant action. Short of monopoly, the best discipline for prices and for incomes is the combination of competition and free bargaining.

We want to warn the Government that, if they use the new instrument in order to focus attention on prices, the results will not be for the benefit of the country. If prices are restrained artificially—that is, not by competitive forces but by edict and by law—the result will be to squeeze profits. The result of that will be to affect confidence and investment. Come the next cycle of expansion, once again the country will be in a position where it cannot satisfy home demand enough from home resources, and the balance of payments will go wrong once more.

There is another way in which an attempt to restrain profits artificially can deeply damage the economy in the short term and, therefore, all our citizens. If earnings are allowed to rise because the Government are not making competition and free bargaining work properly and, at the same time, prices are restrained artificially, then, as we have seen time and again in this Government's period of office, imports are sucked in and profits and, therefore, investment are squeezed out.

This is a danger to the economy, and we would ask the Minister of State to tell us whether we are right in our fear that the new creation will concentrate principally on prices and the structure of industry, which we believe should be the job of competition and not of the Government by direct intervention.

Mr. Stanley Orme (Salford, West)

I have been following the right hon. Gentleman's argument carefully. He says that his party is opposed to the prices and incomes policy and has voted against it consistently. I have been present at practically all the debates on it. How does he oppose the incomes increases which are the result of free collective bargaining which is taking place at the moment, and—

Mr. Deputy Speaker (Mr. Harry Gourlay)

Order. Interventions should be brief. It may be that I have allowed the right hon. Member for Leeds, North-East (Sir K. Joseph) a little too much latitude. We are discussing an Order which deals with the transfer of functions. We cannot have a broad economic debate. I hope that the right hon. Gentleman will confine his remarks to the Order.

Sir K. Joseph

I shall abide by your wishes, Mr. Deputy Speaker. However, you allowed the intervention of the hon. Member for Salford, West (Mr. Orme), and perhaps I might deal with it. I am not aware that my right hon. and hon. Friends have opposed increases as such. We may criticise the economy—

Mr. Arthur Lewis (West Ham, North)

What about the dockers' increases?

Sir K. Joseph

We have criticised the Government for laying down a norm which is so unrealistic compared with the results of their general policies and their general submissiveness to trade union persuasion that the contrasts are laughable.

Mr. Deputy Speaker

Order. I think that the right hon. Gentleman has answered the intervention.

Sir K. Joseph

The next question to the Minister of State is whether the Government think that the Department of Employment and Productivity is the right home for a tribunal or authority which is to concern itself with safeguarding the public from the abuse of power.

The principal abuse of power has been and still is the trade union movement, because of the state of the law governing trades unions and managements. That is a point of view which we on this side of the House are not alone in holding.

Mr. Orme

We do not share it.

Sir K. Joseph

Since the Department of Employment and Productivity is, as it were, the sponsoring Ministry for the trade union movement, and since the trade union movement is that part of the economy which is least within the rule of law, is it likely that putting the Monopolies Commission with the National Board for Prices and Incomes—for what that is worth—under the Secretary of State for Employment and Productivity will protect the public interest? We say that it is the wrong place to put it. We repeat that the proper protection of the public, except for monopolies which should go to the Monopolies Commission, is a combination of competition, disclosure under company law, free bargaining and, where necessary, the use of the tariff.

We question the effectiveness of the prices and incomes policy. We were most interested in the quotation by the hon. Member for Middlesbrough, West (Dr. Bray) from an unpublished paper by Dr. Lipsey and Dr. Parkin of Essex University, which purports to show that the whole prices and incomes policy has been not only non-productive, but actively counter—

Mr. Deputy Speaker

Order. The right hon. Gentleman is again departing from the Order.

Sir K. Joseph

The subject is so fascinating, Mr. Deputy Speaker. But I am on my last comment.

Will the Minister of State address himself to this position? The Prime Minister told the House that a transfer of function from one Department to another may take as long as two years to be effective. This transfer will distract and divert energies away from policy making in the Department of Employment and Productivity for months, if not years, to come.

No doubt the individuals who were working in the Board of Trade now work, as does the Minister, in the Department of Employment and Productivity. But the senior officials of the new Department will have to school, teach and familiarise themselves with new problems, and that will take time.

We accept that with the I.R.C. throwing its weight about so considerably, a countervailing force is needed to protect the country against monopoly. But we believe that the Ministry that should have that countervailing force should be the Board of Trade which has experience in these subtle matters of company structure, and which is, on the whole—and there is a former President of the Board of Trade present, the right hon. Member for Battersea, North (Mr. Jay)—in favour of competition.

We are not altogether sure that the Secretary of State will be in favour of competition. The prime function of her Department has been that of conciliation. Her senior officials and she have no experience of company matters. The staff have moved, but the senior echelons are equally unfamiliar.

Finally, the Department of Employment and Productivity is the sponsoring department for the trade union movement which, with any monopoly, is the principal threat to the public interest when it comes to prices.

We fear that this transfer of functions bodes no good to the public interest and that, therefore, the onus on the Minister of State to justify it is very heavy indeed.

10.44 p.m.

Mr. Douglas Jay (Battersea, North)

I thought that we were discussing a transfer of functions, not economic policy in general.

I think that most of us on this side of the House try to be as charitable as possible to some of the Government's more curious decisions. But there is a limit to this process. In my opinion, in the case of this Order that limit has been crossed.

There is really no rational case for amalgamating the functions of the Prices and Incomes Board with those of the Monopolies Commission. Even if we do that, there is no case whatever for handing over the responsibility of both those bodies to the Department of Employment and Productivity.

I do not know why anybody ever supposed that the Prices and Incomes Board and the Monopolies Commission had similar functions. The job of the Prices and Incomes Board, if we are to retain it, is surely to examine proposals for increases in individual prices or wages and salaries at some point in time. If it goes beyond that, it is going beyond any sensible terms of reference. The job of the Monopolies Commission is to examine the whole basic structure and policy of our industry and the consequences of a proposed merger. These are two distinct functions, and nothing but confusion would result from mixing them up.

Secondly, the case is exceedingly weak for handing over the Prices and Incomes Board to the Ministry of Labour, and one only makes confusion worse confounded by giving the Ministry of Labour a meretricious name. The Ministry of Labour has a very great reputation and history, particularly in wartime, but its function is to find jobs for people, to administer unemployment insurance and improve industrial relations, not to fix wages and salaries and, still less, to fix prices. These have nothing to do with that Department at all.

There is absolutely no case for handing over responsibility for monopolies, mergers and restrictive practices to the Department of Employment and Productivity. That Department has very little knowledge of these subjects and has no experience or expertise for dealing with them. Clearly this should be the responsibility of the Board of Trade, as it always has been and as everyone with even an elementary knowledge of the machinery of Government knows that it ought to be.

The truth about this these clumsy, ill-thought-out and disruptive changes is that they weaken the efficiency of the Government as a whole. As a result, indeed, of successive upheavals in the Government machine in the last few years, and either unnecessary or harmful changes of functions, the Government machine, I fear, is in danger of sinking to the lowest level of efficiency for a great many years. That, I hasten to say, is not the responsibility in any way of the civil servants. It is due to these misconceived jolts imposed on them from the top.

One of the tragedies of the present situation is that these upheavals are tending to injure the morale and the efficiency of the Civil Service. This latest proposal to hand over mergers and monopolies to the Department of Employment and Productivity seems to be carrying amateurism to the point of absurdity. I hope that the Government will think again about this and that this time they will think seriously.

10.45 p.m.

Mr. Charles Fletcher-Cooke (Darwen)

The right hon. Member for Battersea, North (Mr. Jay) has expressed the views of the whole House. This is one of the most cynical proposals we have ever had put before us. In order to give a fig leaf to the end of the prices and incomes policy, the Monopolies Commission, a most respected organisation which has been in existence for over 20 years, and which the right hon. Gentleman in particular and I and others in a humbler way, have supported, is being sacrificed on the altar of temporary party political expediency. That is what the right hon. Gentleman said in rather more distinguished language than I could hope to do.

What is the case for this merger? That is to say, what is the case for the transfer against the Board of Trade? The Board of Trade has administered the Monopolies Commission perfectly well. No one has criticised it.

Mr. Robert Sheldon (Ashton-under-Lyne)

Before the hon. and learned Gentleman completes his applause for the Monopolies Commission, perhaps he will recall that one of the disadvantages of the Commission has been the length of time it has had to take in preparing its reports, during which time events have moved on and it has presented virtually an historical document. The great advantage of the Prices and Incomes Board is that its reports have been relevant when published.

Mr. Fletcher-Cooke

If the hon. Member thinks that in all these matters speed necessarily means accuracy, all I can say is that he is dead wrong. It is true that the Monopolies Commission has gone into the matters judicially; it has tried to discover both sides of the case. If the hon. Member thinks that there is something wrong in finding out both sides he should go to a different country than the United Kingdom, because we believe in hearing both sides of a case, and that takes a little time. The Prices and Incomes Board does not believe in hearing both sides of a case. For those reasons its reports do not receive the respect that is accorded to the reports of the Monopolies Commission—a respect which comes not only from both sides of the House but from people throughout the country.

If anything, the criticism of the Monopolies Commission is that it does not always tell those under scrutiny all that is alleged against them. This is a somewhat exaggerated criticism. We live in an imperfect world. We must take into account the time factor. Although members of my profession sometimes think that the Monopolies Commission is somewhat inquisitorial, that is a counsel of perfection. But one has to get on with the job. The idea that it is possible, in a short time, to inquire not only into a monopoly condition but also into whether the monopoly condition has been abused—with all the enormous amount of evidence that must be pro- duced—is not merely to live in a world of fantasy but is a most dangerous totalitarian outlook.

The idea that the Monopolies Commission is to be subjected to the bright boys on the Prices and Incomes Board fills me—and, I am sure, will fill the whole industrial and financial world—with great alarm. That is what the Order purports to do. The opposite is the case. The Monopolies Commission is an inquisitorial body and apart from the technical objections raised by members of my profession it has achieved a degree of confidence.

Now it is to be moved out of that field into what has become a highly political Ministry. In the old days the Ministry of Labour was not a particularly political Ministry. Now it is highly political. I am sorry for the Minister of State having to answer these criticisms, because he knows, moving from the Board of Trade to the Ministry of Labour—or whatever it is now—as he has done, that he has gone down the slippery slope. The purpose of the Order is not to promote the Monopolies Commission or the great work that his right hon. Friend and others have done over the last 20 years to produce a degree of competition in British industry, but to provide a fig leaf—a decent cover—for the demise of the prices and incomes policy.

The only hope is that if we channel matters of monopolies and restrictive practices into the Department of Employment and Productivity inquiries into restrictive practices will move from management and capital into the field of labour. What other reason, in logic, can there be—apart from the squalid reasons of politics and the infighting of Whitehall—for saying that the Monopolies Commission and the restrictive practices operations which are mentioned in many paragraphs of the Order are being moved into what we still choose to call the Ministry of Labour, than that the restrictive practices of labour itself are to be inquired into? Is that the motive? If not, why not? What is the reason for the transfer, except for that?

10.55 p.m.

Mr. Eric S. Heffer (Liverpool, Walton)

I want to adopt a somewhat different point of view from that taken by the hon. and learned Member for Darwen (Mr. Fletcher-Cooke). What I am concerned about is not that this will lead to the demise of the prices and incomes policy, but that the fig leaf, of which the hon. and learned Member spoke, will hide behind it a continuation of the prices and incomes policy in a different way. This is what I am concerned about and suspicious of. When I read in the Gracious Speech that: "Legislation will be introduced to rationalise the work of the Monopolies Commission and the National Board for Prices and Incomes, and to combine them in a new body" I was worried. I followed very closely what the Prime Minister said in his speech introducing this. He said: Up to now their specific responsibilities have been quite separate. But although it has been right to draw a distinction—and we shall maintain a distinction—between, for example, short-term surveys of particular industries, where there are anxieties about incomes or pricing policies, on the one hand, and, on the other hand, examinations of industries with monopolistic tendencies, there has been a tendency towards overlapping, and this has caused problems for individual industries and firms."—[OFFICIAL REPORT, 28th October, 1969; Vol. 790, c. 5–42.] I am not very clear as to what precisely is involved. I want to ask my hon. Friend what is involved? What does the merger of the two bodies mean? Can we have some clear answers?

Mr. Deputy Speaker (Mr. Harry Gourlay)

Order. It is not in order to discuss the other body. We are discussing only the Order before the House, which is the transfer of functions.

Mr. Heffer

With due respect, we were told in the Gracious Speech that the reason for the transfer was because the two bodies were to be merged. That is why we are discussing this transfer. This is clearly indicated in the Prime Minister's speech.

Mr. Deputy Speaker

Order. We are not discussing the Gracious Speech tonight, but the Order before the House and therefore the hon. Gentleman is not in order to discuss the point raised by the hon. and learned Member.

Mr. Heifer

I am sorry, but with due respect it is quite impossible for me to discuss this matter unless I refer to the reasons given by the Prime Minister, and the Gracious Speech. My right hon. Friend goes on to point out that an Order will be laid and this is that Order. If I am unable to ask these questions then, frankly, it is a sheer waste of time having this debate. It is an impossible position and I want to ask your Ruling before I go any further.

Mr. Deputy Speaker

I thought that I had made my Ruling perfectly clear. One can either reject or support the Order, but one cannot amend it. One is entitled to adduce arguments supporting it or opposing it. The hon. Gentleman seemed to be going a bit wide of the Order, but if he will continue I will stop him if I feel that he is going too wide.

Mr. Heffer

I am sorry if you thought that I was going wide, Mr. Deputy Speaker. It is because I want to know why this is being done that I am asking these questions of my hon. Friend. It seems to be perfectly legitimate to do so. Will this be a completely new body? Who will be the chairman and what sort of things will be in front of it? Unless we can ask these questions we cannot proceed. These are pertinent questions which we are entitled to ask. Who will be on this new body and what will be the sort of things which will come before it? Is it desirable that it should act as a fig leaf, hiding the continuation of the Prices and Incomes Board? Is this, for example, part of the strategy to activate Part 11 of the Prices and Incomes Act?

I am not opposing transference. I say that there is a very good argument for it, but, having said that, one is entitled to get answers to these questions, and I hope that my hon. Friend will give us the answers this evening.

11.0 p.m.

Mr. David Howell (Guildford)

One way and another I think enough has already been said in this debate to make clear that this transfer proposal is not seen as the most brilliant and popular move which this Government have made in their rather chequered career. I should like to add my four reasons why I support my hon. and right hon. Friends and the right hon. Gentleman the Member for Battersea, North (Mr. Jay) in their sensible critiques of this absurd manoeuvre.

The first point is one which has been made, that this is a whimsical move in the chessboard game of Cabinet politics. It is made by a Government who have adopted the Fulton principle of systematic analysis, the evaluation of changes in machinery before they are made, yet here, despite the Prime Minister's bold declaration that he accepts Fulton, is a classic example of a non-evaluated, non-systematic move being made. My right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) said—and it was a very true word—that this is a move in exactly the opposite direction from the basic precept of Fulton, which was, "Look at the job first". The last thing which has been looked at in this move is the job which is intended to be done. Other things of a more squalid kind have been looked at long before. As my right hon. Friend said, and as The Times said, absolutely accurately, this is no more than a prestige struggle". That is my first reason for supporting this Prayer and opposing this transfer.

The second reason was given by the right hon. Gentleman the Member for Battersea, North. It really spells itself out as soon as one begins to ask, what are the functions and at what are they aimed? We know that in the kind of economy we have today, even if it is not as free enterprise and dynamic as some of us would like, there is an essential requirement for Government to maintain competition, which is not an easy business of laying down a few rules, but a very complex business involving—and perhaps some of my hon. Friends will not agree with me in this—certain degrees of political intervention to maintain competition. This is one of the functions of the monopolies and restrictive practices legislation. Competition is not a natural phenomenon. It is a phenomenon only maintained by an increasingly sophisticated form of intervention. We have right to receive protection from unfair competition from overseas. I am ready to receive some brickbats from some of my hon. Friends when I say that when one looks at some of the Reports of the Prices and Incomes Board and forgets, if possible, some of the more absurd charges in the field of price fixing and wage regulation, the analysis of the way competition works in certain firms and the analysis of why it has continued to work in certain industries is of very high quality, and that is something which is very valuable and ought to be preserved. Despite all the criticisms which are made of the P.I.B., I place a very large question mark over the possibility of the understanding of this work, and of its being preserved, in the suffocating and submerging atmosphere of the Department of Employment and Productivity. This is a function which we ought to be preserving, and the question is whether it will be preserved in the D.E.P., and the business of preserving and promoting competition is a very complex one indeed.

Then there is the question of the protection of British industry from unfair competition from overseas and the question of mergers and monopolies which flow from that, the concern of Government Departments and with other countries' unfair buying practices and administrative preferences. I do not know what the D.E.P. knows about that, but I would guess, very little or nothing.

There is the function of the protection of investors. Government Departments and various bodies, such as lately the City take-over panel, have involved themselves in this field. I do not know whether investors have ever thought or ever will think that they will really get much protection from the Department of Employment and Productivity in the share market.

Finally, and this is not least important though I list it fourth, there is the protection of the employee in the merger monopoly situation. It is true that this is something with which the old Ministry of Labour and the modern D.E.P. had a right and a responsibility to concern themselves, but that is the only function; the other three functions do not lie on the labour and employment side at all but at the centre of industrial policy.

My second major reason for opposing the Order and supporting the Prayer is that there was a hope, held by some of us—I believe on both sides of the Chamber—that it might be possible in the post-Fulton period to rationalise and centralise the control of industrial policy more sensibly than in the past and to get away from the absurd situation—which, to the credit of members of the Government no longer exists—in which, until a year or two ago, there were nine different Ministries concerned with industrial policy, competitive policy and monopolies and mergers, and to move towards a situation in which there was some coherence in industrial policy. The proposed transfer of functions drives a coach and horses through that idea, and destroys the hope of a centralised and sensible industrial policy strategy. That is wrecked.

My third reason is one to which my right hon. Friend has already alluded. It is that the need, the driving force in the management of these functions must be a concern with competition. Whatever may have been thought about the old Board of Trade, it understood, and had a sort of crusading spirit for, the competitive process. It was concerned to maintain competition. Even if some of us thought that its interpretation of competition was at times a little archaic, there was this competitive and open approach to the business of competition when monopoly and merger functions were in their old place. As my right hon. Friend has said, these functions are now being transferred to a Ministry of restraint, a protectionist Ministry, a Minstry where all the arguments have been for holding down and protecting and restraining—the very opposite of the spirit required to inform the functions we are now discussing.

My final reason for supporting the Prayer is that we are moving now towards a new concept of public monopoly control as well as private monopoly control; and to an understanding that public industries are best controlled, less by absurd day-to-day interference and meddling and more by regulatory mechanisms. It is here that new thinking, such as there may be, in the Ministry of Technology should be going—when it has time to take its mind off the many things it is doing that it ought not to be doing. That is where the thinking ought to be going. I doubt whether the Department of Employment and Productivity either understands these new functions of public control, recognises them or welcomes them.

To sum up, my four reasons for opposing the Order are that there is no systematic analysis at all behind this transfer; it undermines the hope of centralised and rationalised industrial policy; it places these important functions with a ministry of restraint and protection, and it distracts us from the real tasks of the 'seventies which are bringing our ramshackle and inefficient public sector more effectively under control.

11.9 p.m.

Mr. Robert Sheldon (Ashton-under-Lyne)

Unlike the hon. Member for Guildford (Mr. David Howell), I do not see this transfer as undermining the hope of a centralised industrial policy, because one of the virtues I see in the Order is that it can centralise one such aspect.I am sure that the hon. Gentleman cannot believe that we can centralise all aspects of industrial policy at one go; or that it would be desirable to do so. The Order does go some way along that road.

One thing it does is to try to bring the Monopolies Commission and its work up to date, because one of the things that has been transparently clear over the years is that the Commission has not been doing its job properly, and it has not been doing its job properly because this was one of the first forays by Government into a relationship with industry. Its first foray was that by judicial process. It compared the liberties of the firm with the liberties of the individual and the result was the Monopolies Commission.

We have advanced a great deal since then, and so have other countries. We realise that we cannot operate in that way because it is a recipe for inaction. We cannot say that we must prove to the hilt a particular course of action before we say that an industry must change that course. The liberties of a firm are by no means the liberties of an individual. The firm has wider responsibilities. The pace of industrial change today might mean that by the time the report is produced the problems with which it deals have become out of date. So we had a position where a Commission has not been able to respond to industrial change in the way in which the National Board for Prices and Incomes has been able to respond to changes as they occur.

Mr. Fletcher-Cooke

Does the hon. Member think that under the direction of the right hon. Lady this Commission will speed up its work? If so, what sort of direction does he think she will give it?

Mr. Sheldon

The main function is to bring these two organisations together so that we get the same sort of action from the Monopolies Commission as we have from the National Board for Prices and Incomes. I should hope that as a result of the merger there would be an improvement in the speed at which reports are produced and so affect industry when it is in a position to be so affected.

The whole relationship between industry and Government is in process of change at present. This is what this Government have brought about. The great increase in relationships between industry and Government is going on and it is irreversible. There is obviously a time when it could have been said—this is one of the clichés some of us have inveighed against—that it is better to get it right than early, but in industrial matters it does not work like that. That is because there is a time factor and if one does not produce a solution by a certain time one gets it wrong. It does not matter how brilliant it is, it is wrong.

This is a changing world and we need a body which is able to act within limits circumscribed by change. I do not say that this is the obvious Ministry which should take charge of this kind of centralising of industrial policy, but it will at least concentrate it. The hon. Member for Guildford should at least welcome this kind of action, even if he does not welcome the particular Ministry to which it is moved. With that hope I welcome this Order.

11.14 p.m.

Mr. Tom Boardman (Leicester, South-West)

I found it difficult to follow the argument of the hon. Member for Ashton-under-Lyne (Mr. Sheldon). If he was suggesting, as I understood he was, that there have been delays occurring in the present system which will not occur in future under the new sponsorship, perhaps he will spell out the reasons for saying that this will be achieved.

He did say that the liberties of a firm are not the same as the liberties of people, but on the liberties of a firm depend the livelihood, the jobs and the prosperity of much of this country. If we are prepared to take short cuts and suffer injustice for the sake of a Ministerial ego or pride, it is a sad day for this country. Arguments have been more directed to points of view on ministerial pride, but I want to say a word on the attitude of the customer on the other side of the fence—industry. I hope it is the objective of hon. Members on both sides of the House to have a more efficient and competitive industry. If this move does, as I believe it will, add to the inefficiencies of government the fragmentation of government functions, it will fail to achieve, not only what we believe to be the right purpose, but also the intentions which the Minister of State may well have for it.

I have considerable sympathy for the Minister of State. He is a lonely figure tonight. Apart from the hon. Member for Ashton-under-Lyne, whose arguments the Minister would probably not care to adopt, he has been lonely. He has been sent forward by the Secretary of State to carry the bat tonight on a hopeless wicket. It is the fragmentation of government operations with industry which concerns me most. The Ministry of Technology deals with one part. The Board of Trade deals with exports. There is now to be the Department of Employment and Productivity. They all deal with the corporate structure of industry. It will be impossible for industry to operate in such a climate. It is for that reason that I support the Prayer.

11.16 p.m.

The Minister of State, Department of Employment and Productivity (Mr. Edmund Dell)

Various arguments have been adduced against the Order. They have extended from that of in-fighting in Whitehall to fragmentation of the government structure which the hon. Member for Leicester, South-West (Mr. Tom Boardman) mentioned—that was a rather curious argument after the construction of the Ministry of Technology—and to some curious connection which the right hon. Member for Leeds, North-East (Sir K. Joseph) discovered with the problem of soothing the I.M.F. I should have thought that the I.M.F. was at present thoroughly satisfied with our balance of payments advance. There has also been mention of fig leaves. I will try to give the House the justification for the transfer.

I am justifying the transfer at a time when the legislation creating the new Commission for Industry and Manpower is not yet before the House. The merger between the Monopolies Commission and the National Board for Prices and Incomes is the main justification of the transfer for which I am arguing. It is obvious that there is a limit to what I can say about that merger before the legislation is introduced. For example, I cannot tell my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) the name of the chairman of the new body.

Mr. Heffer

But my hon. Friend is accepting my point that this obviously is the main reason for the transfer?

Mr. Dell

Yes. I hope to say one or two things later which may help my hon. Friend.

Many tributes have been paid to the Board of Trade's management of the Monopolies Commission. I am the last person to dissociate myself from those tributes. Tributes are due, too, to the work of the Board of Trade in this field under the direction of my right hon. Friend the Member for Battersea, North (Mr. Jay) and others. The Board of Trade has changed since my right hon. Friend's time. There are always problems of delimitation—the drawing of boundaries—between Departments and between functions.

Even in the House tonight we heard from the hon. Member for Guildford (Mr. David Howell) an alternative suggestion as to where the Monopolies Commission and the Restrictive Practices Court should have been transferred, different from the confidence which most hon. Members opposite have expressed in the Board of Trade. The Board of Trade undoubtedly had an excellent record in handling this legislation, but it has now lost its main industrial sponsorship function outside the consumer field. It has lost a factor of some importance—its distribution of industry responsibilities, which brought it into close relationship with some of the consequences of mergers. It has also lost its sponsorship of productivity bodies —in this case, to the Department of Employment and Productivity.

The main reason for the transfer is to enable the Government to work out in legislation to be presented to Parliament the establishment of a new commission merging the Monopolies Commission and the National Board for Prices and Incomes for the purpose of regulating the use of market power in cases in which the public interest is involved. Both these bodies, the National Board for Prices and Incomes and the Monopolies Commission, have filled an important rôle in our economy. They have had in certain respects different rôles, but also in certain respects overlapping rôles. For example, their different roles have included the specific function of the Monopolies Commission in the field of mergers, and the philosophy on mergers of the 1965 Act will continue. The National Board for Prices and Incomes has had a special responsibility in the field of prices and incomes questions and the nationalised industries. As I say, although there have been these different functions, there has always been between the two a considerable area of overlap. That overlap has required similar types of members of the Commission and the Board, and similar types of staff and consultants.

The areas of overlap have been demonstrated in a number of references which have been made to the two bodies in recent years. Both bodies have dealt with beer. The N.B.P.I. has dealt with beer prices and the Monopolies Corn-mission has also considered the problems of the structure of the brewing industry. Similarly, the Monopolies Commission considered the cellulosic fibres industry and the N.B.P.I. has considered the prices of certain cellulosic fibres.

There has been an overlap, and if the overlap can be removed, consistently with the purposes of the two bodies, I would have thought that it would be sensible to do so. I believe that certain advantages will flow from the merger. These include the fact that there will be a single body to which the Government can look for advice on matters affecting mergers, monopolies and price behaviour in weakly competitive industries, recommended resale prices and the relationship between pay, productivity and costs.

Secondly, the same body will be looking at the problems affecting the private and public sectors of industry. Thirdly, the clear links between pay, costs and prices will be retained; and fourthly—a matter of some importance—scarce resources with specialist staff and consultants will be better employed.

It has been argued—and I do not dissent from the argument—that one of the best ways of achieving efficiency in industry is through the mechanism of competition. The right hon. Member for Leeds, North-East argued to this effect, and this is true if competition works effectively. But unfortunately, and necessarily in many cases, particularly with a market of our size, competition is imperfect. There is market power, and in many cases market power is exerted in fields in which the public interest is involved. Therefore, there is need for a body which can inquire; and I believe there is need for a body which can inquire even in cases where there may not be a statutory monopoly as, indeed, the National Board for Prices and Incomes has been doing in recent years.

I know it is the view of many hon. Members opposite—the right hon. Member for Leeds, North-East is particularly associated with this view—that all these problems outside the field of monopoly can be dealt with or at any rate ameliorated through disclosure. He greatly under-estimates the difficulties of legislating effectively for disclosure. Much of the work of the N.B.P.I. and of the Monopolies Commission has been in the field of disclosure of the type which he is interested in securing for the purposes of achieving a more competitive and informed economy.

The question is put, why should the Department of Employment and Productivity be responsible in this area? Let me say this in respect of one point made by the right hon. Gentleman when he referred to the market power of trade unions. I think that in opposing the market power of trade unions against the market power of companies, he is making the wrong comparison. The market power of companies is exercised against other companies, and may be exercised against the public interest. That is a matter to be dealt with on its own merit, quite apart from any question of the market power of trade unions.

There are good justifications for transferring the Monopolies Commission to the Department of Employment and Productivity and putting the new Commission under its authority. One of the reasons was touched on by the hon. Member for Guildford, and he indicated that in his view, it was, perhaps, one argument in favour of the transfer. This was the connection between problems of mergers and problems of the employment effects of mergers, with which we in the Department of Employment and Productivity are greatly concerned.

A principal argument for the transfer is that it is an advantage to have in the hands of a Department concerned with the social as well as the industrial consequences of mergers the monopolies and mergers legislation which we have at present and the new legislation which we shall have in a few months. We are concerned with the problems of redundancy. We are concerned with the development of employment services to meet them. We are concerned with the development of training and retraining to equip people for new jobs. We are concerned with the development of the manpower and productivity service which, equally, helps in that area.

The question of mergers has two aspects. One is the aspect of market power, and whether the market power created by any merger may be operated against the public interest. The second is the consequences of industrial rationalisation on employment in many parts of the country.

The second reason in favour of the transfer is that the Department of Employment and Productivity is already responsible for the National Board for Prices and Incomes, one of the elements in the new merged body. A large part of the work of the new body, as of the Prices and Incomes Board, will be concerned with incomes, though, I hope, within the ambit of a voluntary incomes policy. It will be concerned not just with the immediate justification for individual settlements but with wider questions of the relation of various pay structures and methods of payment to industrial efficiency.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)

The hon. Gentleman said a moment ago that the object of the new body was to administer public policy in relation to market power. How does he square that with what he has just said about administering incomes and pay rises?

Mr. Dell

Because, clearly, pay rises, incomes and prices are all involved in the question of market power.

Third, there is the problem of efficiency in industry. The National Board for Prices and Incomes has been concerned with efficiency in the public sector. The Monopolies Commission has been concerned with efficiency in the private sector, for example, in recent merger references. The new body will be concerned with efficiency in the public sector, and efficiency will not be outside its terms of reference in dealing with the private sector, for example, in the case of mergers.

Those are three substantial reasons for the transfer of these bodies to the Department of Employment and Productivity. The full working out of this policy will be seen by the House when the Bill is brought before it which will create the new Commission for Industry and Manpower. I hope that the arguments which I have presented tonight in support of the merger will show the House that the current transfer of the Monopolies Collision and the Restrictive Practices Court to the D.E.P. is justified by the creation

of the new Commission, and by the need to have advice in the detailed working out of the new legislation from civil servants of the Board of Trade who have now transferred to the new Department. I ask the House, therefore, to reject the Prayer.

11.29 p.m.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)

At first, the House thought that it was true that this was to be a fig leaf to hide the end of the prices and incomes policy, but from the last remarks of the Minister of State it is clear that the hon. Member for Liverpool, Walton (Mr. Heffer) was right, and it is to carry on exercising a busy-body interfering rôle in prices and incomes and all sorts of other matters. For that reason—

It being half-past Eleven o'clock, Mr. DEPUTY SPEAKER put the Question pursuant to Standing Order No. 100 (Statutory Instruments, &c. (Procedure)).

The House divided: Ayes 169, Noes 228.

Division No. 27.]	AYES	[11.30 p.m.
Alison, Michael (Barkston Ash)	Dodds-Parker, Douglas	Kershaw, Anthony
Allason, James (Hemel Hempstead)	Eden, Sir John	King, Evelyn (Dorset, S.)
Astor, John	Elliot, Capt. Walter (Carshalton)	Kitson, Timothy
Atkins, Humphrey (M't'n & M'd'n)	Elliott,R.W.(N'c'tle-upon-Tyne,N.)	Lambton, Viscount
Baker, W. H. K. (Banff)	Emery, Peter	Lawler, Wallace
Beamish, Col. Sir Tufton	Errington, Sir Eric	Mackenzie, Alasdair(Ross&Crom'ty)
Bennett, Dr. Reginald (Cos.& Fhm)	Eyre, Reginald	McNair-Wilson, Michael
Berry, Hn. Anthony	Farr, John	McNair-Wilson, Patrick (NewForest)
Biggs-Davison, John	Fisher, Nigel	Maddan, Martin
Birch, Rt. Hn. Nigel	Fletcher-Cooke, Charles	Maginnis, John E.
Black, Sir Cyril	Fortescue, Tim	Maude, Angus
Blaker, Peter	Foster, Sir John	Mawby, Ray
Boardman, Tom (Leicester, S.W.)	Fraser, Rt. Hn. Hugh(St'fford & Stone)	Maxwell-Hyslop, R. J.
Body, Richard	Gibson-Watt, David	Maydon, Lt.-Cmdr. S. L. C.
Bossom, Sir Clive	Glover, Sir Douglas	Mills, Peter (Torrington)
Boyle, Rt. Hn. Sir Edward	Glyn, Sir Richard	Miscampbell, Norman
Braine, Bernard	Gower, Raymond	Monro, Hector
Brewis, John	Grant, Anthony	Montgomery, Fergus
Brown, Sir Edward (Bath)	Grant-Ferris, Sir Robert	Morgan, Geraint (Denbigh)
Bruce-Gardyne, J.	Grieve, Percy	Morgan-Giles, Rear-Adm.
Buchanan-Smith, Alick(Angus, N&M)	Griffiths, Eldon (Bury St. Edmunds)	Morrison, Charles (Devizes)
Buck, Antony (Colchester)	Hall-Davis, A. G. F.	Mott-Radclyffe, Sir Charles
Bullus, Sir Eric	Hamilton, Lord (Fermanagh)	Murton, Oscar
Campbell, B. (Oldham, W.)	Hamilton, Michael (Salisbury)	Nabarro, Sir Gerald
Carlisle, Mark	Harris, Reader (Heston)	Neave, Airey
Carr, Rt. Hn. Robert	Hawkins, Paul	Nicholls, Sir Harmar
Channon, H. P. G.	Hay, John	Noble, Rt. Hn. Michael
Chataway, Christopher	Higgins, Terence L.	Onslow, Cranley
Chichester-Clark, R.	Hiley, Joseph	Osborn, John (Hallam)
Clegg, Walter	Hill, J. E. B.	Page, Graham (Crosby)
Cooke, Robert	Holland, Philip	Page, John (Harrow, W.)
Corfield, F. V.	Hordern, Peter	Pardoe, John
Costain, A. P.	Hornby, Richard	Percival, Ian
Crouch, David	Howell, David (Guildford)	Pike, Miss Mervyn
Crowder, F. P.	Hunt, John	Pink, R. Bonner
Currie, C. B. H.	Hutchison, Michael Clark	Pounder, Rafton
Dalkeith, Earl of	Irvine, Bryant Godman (Rye)	Price, David (Eastleigh)
Dance, James	Jenkin, Patrick (Woodford)	Prior, J. M. L.
Davidson, James(Aberdeenshire, W.)	Johnston, Russell (Inverness)	Pym, Francis
Dean, Paul	Jones, Arthur (Northants, S.)	Ramsden, Rt. Hn. James
Deedes, Rt. Hn. W. F. (Ashford)	Jopling, Michael	Rawlinson, Rt. Hit. Sir Peter
Digby, Simon Wingfield	Joseph, Rt. Hn. Sir Keith	Rees-Davies, w. R.
Renton, Rt. Hn. Sir David	Stodart, Anthony	Ward, Dame Irene (Tynemouth)
Rhys Williams, Sir Brandon	Summers, Sir Spencer	Wells, John (Maidstone)
Ridley, Hn. Nicholas	Taylor, Frank (Moss Side)	Whitelaw, Rt. Hn. William
Rossi, Hugh (Hornsey)	Temple, John M.	Wiggin, A. W.
Royle, Anthony	Thatcher, Mrs. Margaret	Williams, Donald (Dudley)
Russell, Sir Ronald	Thorpe, Rt. Hn. Jeremy	Wilson, Geoffrey (Truro)
St. John-Stevas, Norman	Tilney, John	Winstanley, Dr. M. P.
Scott, Nicholas	van Straubenzee, W. R.	Wolrige-Gordon, Patrick
Sharples, Richard	Vaughan-Morgan, Rt. Hn. Sir John	Wood, Rt. Hn. Richard
Shaw, Arnold (llford, S.)	Vickers, Dame Joan	Worsley, Marcus
Silvester, Frederick	Waddington, David	Wright, Esmond
Smith, Dudley (W'wick & L'mington)	Wainwright, Richard (Colne Valley)
Smith, John (London & w'minster)	Walker, Peter (Worcester)	TELLERS FOR THE AYES:
Speed, Keith	Walker-Smith, Rt. Hn. Sir Derek	Mr. Jasper More and
Stainton, Keith	Wall, Patrick	Mr. Bernard Weatherill.
Steel, David (Roxburgh)	Ward, Christopher (Swindon)
NOES
Abse, Leo	English, Michael	MacColl, James
Allaun, Frank (Salford, E.)	Ennals, David	MacDermot, Niall
Alldritt, Walter	Ensor, David	Macdonald, A. H.
Allen, Scholefield	Evans, Fred (Caerphilly)	McElhone, Frank
Anderson, Donald	Evans, loan L. (Birm'h'm, Yardley)	Mackenzie, Gregor (Rutherglen)
Armstrong, Ernest	Fernyhough, E.	Mackie, John
Ashley, Jack	Finch, Harold	Maclennan, Robert
Atkins, Ronald (Preston, N.)	Fitch, Alan (Wigan)	MacMillan, Malcolm (Western Isles)
Atkinson, Norman (Tottenham)	Fletcher, Raymond (Ilkeston)	McMillan, Tom (Glasgow, C.)
Bacon, Rt. Hn. Alice	Fletcher, Ted (Darlington)	McNamara, J. Kevin
Bagier, Gordon A. T.	Foley, Maurice	MacPherson, Malcolm
Barnes, Michael	Forrester, John	Mahon, Simon (Bootle)
Barnett, Joel	Fraser, John (Norwood)	Mallalieu, J.P.W.(Huddersfield, E.)
Baxter, William	Freeson, Reginald	Manuel, Archie
Beaney, Alan	Garrett, W. E.	Mapp, Charles
Benn, Rt. Hn. Anthony Wedgwood	Ginsburg, David	Marks, Kenneth
Bidwell, Sydney	Colding, John	Marsh, Rt. Hn. Richard
Binns, John	Gray, Dr. Hugh (Yarmouth)	Mason, Rt. Hn. Roy
Bishop, E. S.	Gregory, Arnold	Maxwell, Robert
Blackburn, F.	Grey, Charles (Durham)	Mellish, Rt. Hn. Robert
Boardman, H. (Leigh)	Griffiths, Eddie (Brightside)	Mendelson, John
Booth, Albert	Hamling, William	Millan, Bruce
Boston, Terence	Hannan, William	Miller, Dr. M. S.
Bottomley, Rt. Hn. Arthur	Harper, Joseph	Milne, Edward (Blyth)
Bradley, Tom	Harrison, Walter (Wakefield)	Mitchell, R. C. (S'th'pton, Test)
Bray, Dr. Jeremy	Haseldine, Norman	Molloy, William
Brooks, Edwin	Hattersley, Roy	Moonman, Eric
Broughton, Sir Alfred	Heffer, Eric S.	Morgan, Elystan (Cardiganshire)
Brown, Rt. Hn. George (Belper)	Hooley, Frank	Morris, Alfred (Wythenshawe)
Brown, Hugh D. (G'gow, Provan)	Horner, John	Morris, Charles R. (Openshaw)
Brown, Bob (N'c'tle-upon-Tyne, W.)	Houghton, Rt. Hn. Douglas	Morris, John (Aberavon)
Brown, R. W. (Shoredltch & F'bury)	Howarth, Robert (Bolton, E.)	Mulley, Rt. Hn. Frederick
Buchan, Norman	Howell, Denis (Small Heath)	Murray, Albert
Buchanan, Richard (G'gow, Sp'burn)	Howie, W.	Neal, Harold
Butler, Mrs. Joyce (Wood Green)	Hoy, Rt. Hn. James	Newens, Stan
Carmichael, Neil	Hughes, Rt. Hn. Cledwyn (Anglesey)	Oakes, Gordon
Carter-Jones, Lewis	Hughes, Roy (Newport)	Ogden, Eric
Chapman, Donald	Hunter, Adam	O'Halloran, Michael
Coe, Denis	Hynd, John	O'Malley, Brian
Coleman, Donald	Jackson, Peter M. (High Peak)	Orme, Stanley
Concannon, J. D.	Jenkins, Hugh (Putney)	Oswald, Thomas
Conlan, Bernard	Johnson, Carol (Lewisham, S.)	Owen, Dr. David (Plymouth, S'tn)
Crawshaw, Richard	Johnson, James (K'ston-on-Hull, W.)	Owen, Will (Morpeth)
Cronin, John	Jones, J. Idwal (Wrexham)	Page, Derek (King's Lynn)
Crosland, Rt. Hn. Anthony	Judd, Frank	Palmer, Arthur
Dalyell, Tam	Kelley, Richard	Pannell, Rt. Hn. Charles
Davidson, Arthur (Accrington)	Kerr, Mrs. Anne (R'ter & Chatham)	Park, Trevor
Davies, G. Elfed (Rhondda, E.)	Kerr, Russell (Feltham)	Parker, John (Dagenham)
Davies, Dr. Ernest (Stretford)	Latham, Arthur	Pavitt, Laurence
Davies, Rt. Hn. Harold (Leek)	Lawson, George	Pearson, Arthur (Pontypridd)
Davies, Ifor (Gower)	Leadbitter, Ted	Peart, Rt. Hn. Fred
de Freitas, Rt. Hn. Sir Geoffrey	Ledger, Ron	Pentland, Norman
Delargy, Hugh	Lee, Rt. Hn. Jennie (Cannock)	Perry, Ernest G. (Battersea, S.)
Dell, Edmund	Lee, John (Reading)	Perry, George H. (Nottingham, S.)
Dempsey, James	Lestor, Miss Joan	Prentice, Rt. Hn. Reg
Dewar, Donald	Lever, Rt. Hn. Harold (Cheetham)	Price, Christopher (Perry Bar)
Diamond, Rt. Hn. John	Lewis, Arthur (W. Ham, N.)	Price, William (Rugby)
Dickens, James	Lewis, Ron (Carlisle)	Probert, Arthur
Dunnett, Jack	Lomas, Kenneth	Rees, Merlyn
Dunwoody, Mrs. Gwyneth (Exeter)	Luard, Evan	Richard, Ivor
Dunwoody, Dr. John (F'th & C'b'e)	Lyons, Edward (Bradford, E.)	Roberts, Rt. Hn. Goronwy
Eadie, Alex	Mabon, Dr. J. Dickson	Robertson, John (Paisley)
Edwards, William (Merioneth)	McBride, Neil	Roebuck, Roy
Ellis, John	McCann, John	Rose, Paul

Ross, Rt. Hn. William	Urwin, T. W.	Whitlock, William
Rowlands, E.	Varley, Eric G.	Wilkins, W. A.
Ryan, John	Wainwright, Edwin (Dearne Valley)	Willey, Rt. Hn. Frederick
Sheldon, Robert	Walden, Brian (All Saints)	Williams, Mrs. Shirley (Hitchin)
Shore, Rt. Hn. Peter (Stepney)	Walker, Harold (Doncaster)	Willis, Rt. Hn. George
Silkin, Rt. Hn. John (Deptord)	Wallace, George	Winnick, David
Silkin, Hn. S. C. (Dulwich)	Watkins, David (Consett)	Woodburn, Rt. Hn. A.
Silverman, Julius	Watkins, Tudor (Brecon & Radnor)	Woof, Robert
Skeffington, Arthur	Weitzman, David	Wyatt, Woodrow
Slater, Joseph	Wellbeloved, James
Spriggs, Leslie	Wells, William (Walsall, N.)	TELLERS FOR THE NOES:
Stonehouse, Rt. Hn. John	Whitaker, Ben	Mr. Ray Dobson and
Tinn, James	White, Mrs. Eirene	Mr. James Hamilton.
Tuck, Raphael