HC Deb 28 July 1982 vol 28 cc1082-4 4.51 pm
Mr. D. N. Campbell-Savours (Workington)

I beg to move, That leave be given to bring in a Bill to amend section 3 of the Competition Act 1980 to compel the Director General of Fair Trading to carry out an investigation with a view to establishing whether an anti-competitive practice is taking place. When the Competition Act 1980 was introduced, its explanatory memorandum clearly defined the Bill's intentions. It said that it Provides for the selective investigation and control of practices which restrict competition. Thus it empowers the Director General of Fair Trading … to carry out preliminary investigations into courses of conduct which may have this effect … Where he indentifies an anti-competitive practice, he is empowered to request the Monopolies and Mergers Commission to investigate further and report whether in their view the practice is against the public interest or, as an alternative, he may accept an undertaking from the enterprise concerned relating to the practice. Following an adverse finding by the Commission, the Secretary of State may ask the Director to seek an undertaking from the enterprise or he may make an order prohibiting the practice concerned or for remedying its adverse effects. The problem with the law as it stands is that it allows the Director General of Fair Trading a discretion. I believe that that discretion should be removed and compulsion placed upon him to investigate a complaint. My Bill removes that discretion, and to do so it amends section 3 of the Competition Act 1980 so that where it says: The Director may … carry out an investigation I would replace the word "may" by the word "shall".

I introduce my Bill because the Director General of Fair Trading refuses to investigate some complaints. This year's annual report, under the heading "Action on complaints and allegations", says: During the year the Office received a total of 982 complaints and allegations about uncompetitive behaviour and practices covering a wide range of goods and services. All complaints are carefully scrutinised, and where necessary additional information is sought from the complainants; the subjects of the complaints and other interested parties may be asked to comment. I know of complaints that have been made where additional comment has not been sought. I should like to draw the attention of the House to a complaint that reinforces the need for the Bill. On 15 February the Lancashire Footwear Manufacturers Association wrote to the Director General of Fair Trading seeking an investigation under section 3 into the distribution of Polish shoes by A. Nicholson and Company Ltd. of Liverpool at a price that was little more than the material cost of United Kingdom manufacturers. The complaint was not about the importation but about the distribution of those products on the British market. I emphasise that because I understand that importation complaints would be made not to the Director General of Fair Trading, but under the antidumping code of the Commission of the European Community.

The Director General replied to the Director-Secretary of LFMA: I feel bound to say that in the absence of any evidence to suggest that Nicholsons are selling below their costs an investigation by the Director General in these circumstances would be unjustified since it is usually the case that the availability of competitively priced goods acts as a spur to competition and is to be welcomed. I understand the Director General to be saying that dumped goods, or goods that are unfairly priced for whatever reason, distributed on the British market are to he regarded as a spur to competition.

The LFMA issued a press release on 23 March which said: The Director-Secretary of the LFMA said that an application for an investigation into Polish shoes had been turned down by the Director General on the grounds that 'dumped' goods provided the UK consumer with more effective competition. The distribution of those goods constitutes an anticompetitive practice that should have been the subject of an investigation by the Director General of Fair Trading.

After its first application the LFMA wrote to the Director General on 23 March seeking an investigation into the distribution by Messrs Beehive Rubber Company of Chinese slippers at 51p a pair when the United Kingdom manufacturers' basket of prices, based on average manufacturing costs, was £2.36 for a similar pair of slippers.

Mr. Speaker

Order. The hon. Gentleman is going a long way from introducing a Ten Minutes Rule motion. He must say what his Bill contains and why he thinks we should allow it. The speech he is making is more like an adjournment debate than a Ten Minutes Rule motion.

Mr. Campbell-Savours

I understand that, Mr. Speaker. I was well aware, when I considered making the application to introduce my Bill to the House, that I must prove that current legislation is wrong. What more can I do than relate correspondence that shows that the law is deficient?

Mr. Speaker

Order. The hon. Gentleman should not go into long detail about one particular case.

Mr. Campbell-Savours

Following that last letter, Mr. Speaker, the response from the Leader of the House, then the Secretary of State for Trade, the right hon. Member for Oswestry (Mr. Biffen), was the same as the reply to the first application from the LFMA. The Government repeated that existing anti-dumping code arrangements within the European Community and the Commission were sufficient to deal with the problem.

I do not believe that that is the case. The powers that the Director General of Fair Trading has can be used if he is compelled to exercise them and his discretion is removed. The arrangements that exist within the Community are slow and cumbersome and invariably lead to further damage to British industry and trade.

My Bill restores powers which were removed when we entered the European Community. I am not opposed to the Community and I have reservations about withdrawal, but that does not mean that we should not make every effort to restore power to our domestic Parliament, the Department of Trade and the Secretary of State, when those powers are in the public interest and current arrangements in Europe are not.

If the Bill was introduced there would be a spate of applications from British manufacturers and other people complaining of anti-competitive practices. An investigation might lead to a major change in the pattern of trade and distribution in the country. The Bill also fulfils the spirit of Labour policy, as it provides for fair and responsible trade practices and calls on the Director General of Fair Trading to institute them.

Question put and agreed to.

Bill ordered to be brought in by Mr. D. N. Campbell-Savours, Mr. Robert C. Brown, Mr. George Foulkes, Mr. Barry Sheerman, Mr. Alfred Dubs, Mr. David Stoddart, Mr. Joan Evans, Mr. Derek Foster and Mr. Stuart Holland.

  1. COMPETITION ACT 1980 (AMENDMENT) 63 words