§ 3.56 p.m.
§ Mr. J. W. Rooker (Birmingham, Perry Barr)I beg to move,
That leave be given to bring in a Bill to amend the Restrictive Trade Practices Act 1976 so as to provide increased powers for the Director General of Fair Trading.I shall briefly explain the reasons for this Bill and then its contents. In the The Times of 25th April, there was an article which commenced with the following two short paragraphs, which are worthy of the attention of the House. I quote:Walk into Marks & Spencer's Oxford Street store in London, steal half a dozen shirts and you are likely to find yourself in Marlborough Street Magistrates' Court paying a hefty fine.Sit round a table with three or four other businessmen and agree to rig local authority contracts thereby relieving the public purse of large sums of money and you will probably end up with nothing more than a judicial wigging and a warning not to be so naughty in future.
§ Mr. RookerFollowing this, there appeared in The Guardian on 14th June a leader entitled, "Our league of gentlemen" which commenced as follows:
If Mr. Bloggs of Clapham found a way of improperly removing £9 millions of the Post Office's money, he would no doubt end up behind bars. To the ordinary man-in-the-street, the sight of BICC, Pirelli General, Standard Telephones and Cables and Telephone Cables getting away with a hefty out-of-court settlement for operating an unregistered and secret price-fixing agreement must look very much like one law for the private individual and another for the corporation.The year 1978 has so far been the year when some sunshine has lit the dark corners of corporate greed in this country, 285 corporate greed which is typified by the Conservative Party and is in no way represented on the Labour Benches. This year, in the ready-mixed concrete industry, companies have been found out operating illegal price-fixing agreements. To date, over 140 have been registered since the whistle was blown. Companies involved have included Ready Mixed Concrete itself, Amey Roadstone, Tilling, and Tarmac.In the road-surfacing industry, or black top as it is known, the Financial Times has forecast that by the end of this year, 1,000 previously secret price-fixing agreements will have been registered. Companies involved include Tarmac, Tilling and Wimpey.
We have also seen the telephone cables industry saga, where the four companies have repaid £9 million to the Post Office.
The common thread in all these industries has been the fact that the existence of the price-fixing agreements did not come to light as a result of the investigation of the Director General of Fair Trading or, previously, the Registrar of Restrictive Trade Practices. In fact, it came about by accident. In the ready-mixed concrete industry, the secret price-fixing arrangements were discovered by accident by a farmer in Leicestershire, a Mr. Hill. The black top price-fixing arrangements were discovered when someone from the industry walked into the Office of Fair Trading and spilled the beans. The telephone cables saga was discovered as a by-product of a Monopolies Commission inquiry which had not set out to look for price-fixing arrangements.
Section 36 of the 1976 Restrictive Trade Practices Act covers the powers of the Director General of Fair Trading to obtain information. The section provides:
If the Director has reasonable cause to believe that a person being—then there is a list of directors or managers—is or may be a party to an agreementthe director has the power to go to the court and say to that company "I want details of the agreement."But in 1969—and I shall explain the apparent contradiction of dates in a moment—Lord Denning took the teeth out of the legislation. In 1969, he said 286 that the statement of the director's powers
does not make the registrar the judge of the matter. The words are not:'… if the Registrar thinks he has reasonable cause to believe.' They are:' If (he) has reasonable cause', i.e., in fact. And it is for the judge to find whether or not reasonable cause did in fact exist. The registrar can, of course, act on information from credible people and the like '—he did not define exactly what he meant by "credible people", but clearly off-the-cuff remarks are not enough—but if he seeks an order from the court, he must place his information before the court so that the court can see whether in fact there is reasonable cause to believethat the agreements existed.Hunches or informed tipoffs to the Director General of Fair Trading about secret illegal price-fixing agreements are not on. He cannot take any action. He cannot even ask the company or get an order asking "Have you or are you party to an agreement?"
Mr. Gordon Borrie, the present Director General of Fair Trading, has explained this "Catch 22" situation. He is quoted in the same article in The Times of 25th April as saying:
I dare not issue a formal inquiry notice unless I am really confident that I could if necessary show the courts that there is a restrictive agreement—which is really something of a nonsense—because if I could already prove the existence of an agreement I would not be writing to a firm saying Is there one and are you in it?'We have placed this important public official in a crazy position.The solution appears to lie in a change of the wording in section 36 so that it reads: "If the Director believes", and so on. We have to use the words used by the learned judge which he suggests will show the way round if the director thinks or believes that he has a cause. This seems to be the only way to restore to our law the teeth which Lord Denning removed in 1969. I know it means this official going on fishing expeditions. But on the record of corporate greed, all these cases involve ripping off the public, and it is thoroughly justified to send this official out on fishing expeditions.
Right hon. and hon. Members will have noted that I referred to the 1976 Act and to a judgment in 1969. This is because the 1976 Act was a consolidation 287 measure. By and large it is based on the 1956 Restrictive Trade Practices Act, the relevant provision being section 14.
I believe that the Minister in charge of pushing through that legislation in 1956, the then President of the Board of Trade, made most of my case for me. On the Second Reading of that Bill, on 6th March 1956, he said:
The purpose of any Bill on this topic must be to secure that the virtues of free enterprise—initiative, adaptability and risktaking—are not throttled by restrictions imposed by industry upon itself. Agreements between traders about the prices that they will charge, or the markets or consumers to whom they will sell, or the quantities that they will produce, are all attempting ways of avoiding competition."—[Official Report, 6th March 1956; Vol. 549, c. 1927.]On Third Reading, on 14th June 1956, the then Minister said:We on this side believe in a system of free competitive enterprise, but that system must be defended not only on its success but on the fact that arrangements which may be made under it are not only fair, but can demonstrably be shown to be fair. One method —at least, one which is well understood—of demonstrating that things are fair in this country is that they should be judged not simply by industry itself, not even by politicians or by Governments, but by courts working and operating upon criteria which from time to time are laid down by Parliament"— [Official Report, 14th June 1956; Vol. 554, c. 863.]The then President of the Board of Trade obviously forgot about Lord Denning and, of course, Mr. Peter Tnorneycroft, as he then was, may have forgoten a lot more since.I believe that we should move to restore teeth to the 1956 Act and make it operate in the way that the then Minister said that it should operate. I realise that there will be an increase in the number of civil servants with the passage of this Bill. But when right hon. and hon. Members consider that in West Germany there are 125 lawyers and economists working for the Government to stamp out illegal price-fixing arrangements and that we have six, and then when we consider the comparative economic performances of so-called private enterprise in this country and West Germany, I think that the House should give me leave to introduce the Bill without any opposition.
§ 4.8 p.m.
288§ Mr. SpeakerIs the hon. Member rising to oppose the motion?
§ Mr. RidleyI am, Mr. Speaker.
I was tempted to allow the hon. Member for Birmingham, Perry Barr (Mr. Rooker) to bring in his Bill without contest, until I heard what he said. He expressed his remarks in such a partial way and in such a party way that I believe that it is right to object to his Bill. I say this as one who played a part in designing the last Fair Trading Act and one who has made a television broadcast railing against the cartels in ready-mixed concrete and in black top. It is quite right that those cartels should be upset and, as far as I am aware, the Director General of Fair Trading is busy doing that under the present legislation with the maximum amount of power.
What the hon. Member for Perry Barr seeks to do is to impute that these unacceptable rackets are in some way part of the Conservative Party. That is what he said. He opened his remarks by saying that he had seen a report in The Times saying that it was easier to rig local authority contracts than to steal half-a-dozen shirts from Marks and Spencer.
It is odd to hear the hon. Member for Perry Barr, representing the political party that he does represent, talking about rigging local authority contracts. I do not know whether he was thinking of Poulson or of Bryants, but I ask him to moderate his language and to take the party sting out of what he is trying to say.
The hon. Gentleman made a disgrace[...] allegation. Does he want me to go on to talk about the Hodge bank and about Labour Party Properties which tried to give itself planning permission in order to pry to recoup its £90,000 loss in the property development arena by manipulation of the public power to create wealth out of planning permission?
How dare the hon. Member raise such a subject? How dare he make such allegations? How dare he expect to go unchallenged? No one will yield to any Government supporter more quickly than myself about the need to promote competition, be it in the public or the private sector—be it in all sectors of our economy. I believe that there is everything to be said for strengthening he powers to have a fully competitive policy.
289 But that was not the motive of the hon. Member in bringing forward this motion. He knows that he cannot get this Bill enacted before the end of this session. He knows that it will be left to my right hon. and hon. Friends to enact a proper Bill to increase competition. He knows, furthermore, that competition must be provided in a far wider range of industries than those to which he has referred.
Let me talk about the nationalised industries. Why is it that private manufacturers of telephone equipment cannot invade the monopoly of the Post Office beyond the subscriber's front door? Why is it that people cannot dig coal profitably in competition with the National Coal Board? Why is it that people cannot generate and sell electricity, either to the grid or to other private consumers?
Why is it that in the warped mind of the hon. Member for Perry Barr once an industry is nationalised and is a statutory monopoly it is somehow sacrosanct and immune from criticism?
The moment we on this side of the House suggest that there should be competition in some small peripheral areas on the edge of the nationalised industries, the full weight of union monopoly is
| Division No. 278] | AYES | [4.13 p.m. |
| Allaun, Frank | Cowans. Harry | George, Bruce |
| Archer, Peter | Cox, Thomas (Tooting) | Gilbert, Rt Hon Dr John |
| Ashley, Jack | Crawford, Douglas | Golding, John |
| Ashton, Joe | Crawshaw, Richard | Graham, Ted |
| Atkins, Ronald (Preston N) | Crowther, Stan (Rotherham) | Grant, John (Islington C) |
| Atkinson, Norman | Oalyell, Tam | Hamilton, W. W. (Central Fife) |
| Bagier, Gordon A. 1. | Davidson, Arthur | Hardy, Peter |
| Bain, Mrs Margaret | Davtes, Bryan (Enfield N) | Hattersley, Rt Hon Roy |
| Barnelt, Guy (Greenwich) | Davies, Ifor (Gower) | Keller, Eric S. |
| Bates, Alf | Davis, Clinton (Hackney C) | Hooley, Frank |
| Bean, R. E. | Deakins, Eric | Horam, John |
| Beith, A. J. | Dean, Joseph (Leeds West) | Hoyle, Doug (Nelson) |
| Bennett, Andrew (Stockport N) | de Freitas, Rt Hon Sir Geoffrey | Huckfield, Les |
| Bidwell, Sydney | Dempsey, James | Hughes, Rt Hon C. (Anglesey) |
| Blenkinsop, Arthur | Dewar, Donald | Hughes, Robert (Aberdeen N) |
| Booth, Rt Hon Albert | Dormand, J. D. | Hughes, Roy (Newport) |
| Boothroyd, Miss Betty | Dunn, James A. | Jackson, Miss Margaret (Lincoln) |
| Bottomley, Rt Hon Arthur | Edge, Geoff | Janner, Greville |
| Brown, Hugh D. (Provan) | Edwards, Robert (Wolv SE) | Jay, Rt Hon Douglas |
| Brown, Ronald (Hackney S) | Ellis, John (Brigg & Scun) | Jenkins, Hugh (Putney) |
| Buchan, Norman | English, Michael | John, Brynmor |
| Buchanan, Richard | Evans, Fred (Caerphilly) | Johnston, Russell (Inverness) |
| Butler, Mrs Joyce (Wood Green) | Evans, Ioan (Aberdare) | Jones, Barry (East Flint) |
| Callaghan, Jim (Middleton & P) | Evans, John (Newton) | Jones, Dan (Burnley) |
| Canavan, Dennis | Ewing, Harry (Stirling) | Judd, Frank |
| Cant, R. B. | Ewing, Mrs Winifred (Moray) | Kaufman, Rt Hon Gerald |
| Carmichael, Neil | Fitch, Alan (Wigan) | Kelley, Richard |
| Carter, Ray | Flannery, Martin | Kerr, Russell |
| Cartwright, John | Fletcher, Ted (Darlington) | Kilroy-Silk, Robert |
| Castle, Rt Hon Barbara | Foot, Rt Hon Michael | Kinnock, Neil |
| Clemitson, Ivor | Forrester, John | Lambie, David |
| Cocks, Rt Hon Michael (Bristol S) | Fraser, John (Lambeth, (N'w'd) | Lamborn, Harry |
| Cohen, Stanley | Freud, Clement | Lamond, James |
| Cook, Robin F. (Edin C) | Garrett, John (Norwich S) | Latham, Arthur (Paddington) |
| Corbett, Robin | Garrett, W. E. (Wallsend) | Lestor, Miss Joan (Eton & Slough) |
§ brought down upon us and we are told that it is unacceptable to the unions. When we talk about competition we should consider the unions. Where is the competition in the coal industry? I have heard trade union leader after trade union leader say that the unions will not accept competition, from the private sector or from imports or, indeed, from any other source.
§ The Labour Party should make up its mind. If it stands for competition, let it break the monopolies of the unions and the nationalised industries. Let it make its demands for full and unfettered competition fair, and full and across the board. I believe that this is how it should be. As I rail against the monopolies and the cartels in the private sector with the hon. Member for Perry Barr, so let him join me in extending that to the whole of our economy. Because of the partiality of his motives I hope that the House will not give him leave to bring in his Bill.
§ Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and Nomination of Select Committees at the Commencement of Public Business):—
§ The House divided: Ayes 209, Noes 147.
| Litterick, Tom | Pardoe, John | Stewart. Rt Hon M. (Fulham) |
| Loyden, Eddie | Park, George | Slott, Roger |
| Lyon, Alexander (York) | Parker, John | Strang, Gavin |
| Lyons, Edward (Bradford W) | Parry, Robert | Summerskill, Hon Dr Shirley |
| Mabon, Dr J. Dickson | Perry, Ernest | Swain, Thomas |
| McCartney, Hugh | Phipps, Dr Colin | Taylor, Mrs Ann (Bolton W) |
| McDonald, Dr Oonagh | Price, C. (Lewisham W) | Thomas, Mike (Newcastle E) |
| McElhone, Frank | Price, William (Rugby) | Thomas, Ron (Bristol NW) |
| McKay, Allen | Radice, Giles | Thompson, George |
| MacFarquhar, Roderick | Rees, Rt Hon Merlyn (Leeds S) | Thorne, Stan (Preston South) |
| MacKenzie, Gregor | Reid, George | Tilley, John |
| Maclennan, Robert | Richardson, Miss Jo | Tinn, James |
| McMillan, Tom (Glasgow C) | Roberts, Gwilym (Cannock) | Tomlinson, John |
| Madden, Max | Robertson, George (Hamilton) | Urwin, T. W. |
| Magee, Bryan | Roderick, Caerwyn | Varley, Rt Hon Eric G. |
| Mahon, Simon | Rodgers, George (Chorley) | Wainwright, Edwin (Dearne V) |
| Mallalieu, J. P. W. | Rooker, J. W. | Walker, Harold (Doncaster) |
| Marks, Kenneth | Rose, Paul B. | Walker, Terry (Kingswood) |
| Marshall, Dr Edmund (Goole) | Ross, Rt Hon W. (Kilmarnock) | Watkins, David |
| Maynard, Miss Joan | Sandelson, Neville | Weetch, Ken |
| Mellish, Rt Hon Robert | Sedgemore, Brian | Welsh, Andrew |
| Mikardo, Ian | Sever, John | White, Frank R. (Bury) |
| Mitchell, Austin (Grimsby) | Shaw, Arnold (Ilford South) | Wigley, Dafydd |
| Mitchell, R. C. (Soton, Itchen) | Sheldon, Rt Hon Robert | Willey, Rt Hon Frederick |
| Morris, Alfred (Wylhenshawe) | Short, Mrs Renée (Wolv NE) | Williams, Alan Lee (Hornch'ch) |
| Morris, Rt Hon Charles R. | Silkin, Rt Hon John (Deptford) | Wilson, Gordon (Dundee E) |
| Morton, George Martin | Silkin, Rt Hon S. C. (Dulwich) | Wilson, Rt Hon Sir Harold (Huyton) |
| Moyle, Rt. Hon. Roland | Sillars, James | Wilson, William (Coventry SF) |
| Mulley, Rt Hon Frederick | Silverman, Julius | Wise, Mrs Audrey |
| Newene, Stanley | Skinner, Dennis | Woof, Robert |
| Noble, Mike | Smith, Cyril (Rochdale) | Wrigglesworth, Ian |
| Orbach, Maurice | Smith, Rt. Hon. John (N Lanarkshire) | Young, David (Bolton E) |
| Orme, Rt Hon Stanley | Snape, Peter | |
| Ovenden, John | Spriggs, Leslie | TELLERS FOR THE AYES: |
| Owen, Rt Hon Dr David | Steel, Rt Hon David | Mr. Kevin McNamara and |
| Palmer, Arthur | Stewart, Rt Hon Donald | Mr. Bruce Grocott. |
| NOES | ||
| Adley, Robert | Goodlad, Alastair | Molyneaux, James |
| Amery, Rt Hon Julian | Gorst, John | Monro, Hector |
| Atkinson, David (B'mouth, East) | Gower, Sir Raymond (Barry) | Montgomery, Fergus |
| Banks, Robert | Grant, Anthony (Harrow C) | Moore, John (Croydon C) |
| Bell, Ronald | Gray, Hamish | More, Jasper (Ludlow) |
| Benyon, W. | Grimond, Rt Hon J. | Morgan, Geraint |
| Biggs-Davison, John | Grist, Ian | Morrison, Charles (Devizes) |
| Blaker, Peter | Hamilton, Michael (Salisbury) | Morrison, Hon Peter (Chester) |
| Body, Richard | Hampson, Dr Keith | Mudd, David |
| Boscawen, Hon Robert | Harvie Anderson, Rt Hon Miss | Nelson, Anthony |
| Boyson, Dr Rhodes (Brent) | Haselhurst, Alan | Newton, Tony |
| Braine, Sir Bernard | Hastings, Stephen | Onslow, Cranley |
| Brittan, Leon | Higgins, Terence L. | Page, John (Harrow West) |
| Brocklebank-Fowler, C. | Howe, Rt Hon Sir Geoffrey | Page, Rt Hon R. Graham (Crosby) |
| Brown, Sir Edward (Bath) | Hunt, David (Wirral) | Percival, Ian |
| Buchanan-Smith, Alick | Hutchison, Michael Clark | Price, David (Eastleigh) |
| Buck, Antony | Irving, Charles (Cheltenham) | Pym, Rt Hon Francis |
| Budgen, Nick | James, David | Raison, Timothy |
| Bulmer, Esmond | Jenkin, Rt Hon P. (Wanst'd&W'df'd) | Rathbone, Tim |
| Burden, F. A. | Jessel, Toby | Ronton, Rt Hon Sir D. (Hunts) |
| Butler, Adam (Bosworth) | Jopling, Michael | Rhodes James, R. |
| Channon, Paul | Joseph, Rt Hon Sir Keith | Rifkind, Malcolm |
| Clark, Alan (Plymouth, Sutton) | Kellett-Bowman, Mrs Elaine | Roberts, Michael (Cardiff NW) |
| Clarke, Kenneth (Rushcliffe) | Kilfedder, James | Roberts, Wyn (Conway) |
| Cockroft, John | Kitson, Sir Timothy | Rost, Peter (SE Derbyshire) |
| Cope, John | Knight, Mrs Jill | Sainsbury, Tim |
| Cormack, Patrick | Lamont, Norman | Shaw, Giles (Pudsey) |
| Costain. A. P. | Lawrence, Ivan | Shelton, William (Streatham) |
| Crouch, David | Lester, Jim (Beeston) | Shepherd, Colin |
| Dean, Paul (N Somerset) | Luce, Richard | Silvester, Fred |
| Dykes, Hugh | McCrindle, Robert | Smith, Dudley (Warwick) |
| Eden, Rt Hon Sir John | Macfarlane, Neil | Smith, Timothy John (Ashfield) |
| Elliott, Sir William | MacKay, Andrew (Stechford) | Speed, Keith |
| Emery, Peter | Macmillan, Rt Hon M. (Farnham) | Spence, John |
| Eyre, Reginald | McNair-Wilson, M. (Newbury) | Spicer, Jim (W Dorset) |
| Fairbairn, Nicholas | Marten, Nell | Sproat, Iain |
| Fell, Anthony | Mather, Carol | Stainton, Keith |
| Fletcher, Alex (Edinburgh N) | Maudling, Rt Hon Reginald | Stanley, John |
| Fletcher-Cooke, Charles | Mawby, Ray | Stokes, John |
| Fookes, Miss Janet | Maxwell-Hyslop, Rown | Tapseli, Peter |
| Fraser, Rt Hon H. (Stafford & St) | Mayhew, Patrick | Taylor, R. (Croydon NW) |
| Gardiner, George (Reigate) | Miller, Hal (Bromsgrave) | Taylor, Teddy (Cathcart) |
| Gilmour, Rt Hon Sir Ian (Chesham) | Mills, Peter | Temple-Morris, Peter |
| Gilmour, Sir John (East Fife) | Miscampbell, Norman | Thorpe, Rt Hon Jeremy (N Devon) |
| Glyn, Dr Alan | Mitchell, David (Basingstoke) | Townsend, Cyril D. |
| Goodhew, Victor | Moate, Roger | Wainwright, Richard (Colne V) |
| Wakeham, John | Whitney, Raymond | |
| Walker-Smith, Rt Hon Sir Derek | Wiggin, Jerry | TELLERS FOR THE NOES: |
| Walters, Dennis | Winterton, Nichoias | Mr. Nicholas Ridley and |
| Weatherill, Bernard | Younger, Hon George | Mr. Ian Gow. |
| Wells, John |
§ Question accordingly agreed to.
§ Bill ordered to be brought in by Mr. J. W. Rooker, Mr. George Rodgers, Mr. Ivor Clemitson, Mr. Max Madden. Mr. Andrew F. Bennett, Mr. William Hamilton, Mr. Dennis Skinner, Mrs. Audrey Wise, Mr. John Evans, Mr. Dennis Canavan, Mr. John Pardoe and Mr. Cyril Smith.