§ Order of the Day for the Second Reading, read.
§ THE UNDER-SECRETARY OF STATE FOR WAR (VISCOUNT PEEL)
My Lords, I regret that owing to the indisposition of my noble friend Lord Milner, who generally takes charge of these measures with regard to profiteering, it falls to me to move the Second Reading of this Bill. This Bill is, of course, a continuation of the previous Act. The first Profiteering Act became law on August 19 of last year. It was to last for 6 months; it was prolonged for another three months; and it will, I understand, elapse on the 19th of May, a date very near us. It has been dealt with as rapidly as possible in another place. It was discussed in Committee on the 11th and 12th of this month as a matter of urgency, and it passed the Report and Third Reading on the 13th. I only state this to show that the other House dealt 365 with it rather expeditiously, as one is asking your Lordships to deal with it. It is quite true that in Clause 10 the Act that is about to expire is to be continued and still have force until this present Bill becomes an Act, but your Lordships will see the urgency of passing this Bill, because considerable administrative difficulties might occur if that were not done.
This Bill is first of all an extension for one year of the principal Profiteering Act, and it contains also Amendments to that Act. I do not think that I need say much about the necessity for the Bill and the question of high prices, because your Lordships are very familiar with the conditions which apply to every other country as well as to our own. Indeed, we are more favourably situated as regards prices than I believe any other country. Moreover, the difficulties of production are still enormous, and two great countries in the world—Germany and Russia—are still almost entirely out of action so far as any production is concerned that will be of use to other countries, and until some equilibrium is established between the great demand for commodities and their supply it is impossible to hope for any substantial reduction in prices. Nor indeed, with such a condition of things, can legislation produce any very great result.
I do not desire, on behalf of the Government, to put too high the advantages of a Bill of this kind. Taking one particular fact or element like profiteering in one particular country obviously cannot have a very wide-reaching effect upon prices. At the same time I think we may claim that in a time when prices are high the opportunities for making excessive profits are particularly great and that therefore a Bill of this kind is necessary. Furthermore, owing to the fact of prices being high, the attention of the public is particularly directed to those prices and to any excessive profits that may be made. I should like to claim further that the success of the Profiteering Act during the last year must not be measured by the number of successful prosecutions that have taken place under it, because it has acted as a deterrent and has no doubt had some considerable effect as a deterrent in reducing excessive profits.
As to the scope of the Bill, it does not deal with control over certain special important articles of food. It is outside them altogether. The difficulty, of course, 366 of a Bill of this kind is that in a time when trade is struggling to re-establish itself we have to be very careful to do nothing which may check the revival of trade—a revival which would do away with the necessity of Bills of this kind. This therefore is a modest measure; it is temporary, and it deals with a temporary emergency—that is to say, the excessive prices which arise naturally and easily in time of scarcity.
I should like to deal quite shortly with the principal provisions of the Bill. The first clause is an attempt to do away with a great deal of Government machinery by allowing or urging either single traders or associations of traders to assess themselves—that is to say, they may make schemes, and those schemes may indicate what, under the particular circumstances of their trade or their portion of the country, is a reasonable profit. Those schemes are submitted to the Board of Trade, and if they are accepted it will be sufficient when any of these persons are attacked to say that the amount of profit they have been making is not in excess of the amount laid down in the scheme, and they will thereby be entirely exonerated. There may be another special advantage connected with the making of schemes. If the Board of Trade are satisfied that under these schemes an adequate, supply of material is afforded to the home market, then these associations of traders may be entirely free from the very elaborate, tiresome, and expensive investigations to which they are liable under Section 1 (1) (a) of the principal Act. It is quite possible, and the Board of Trade is competent, to undertake all these investigations, but your Lordships generally disapprove of any very large extension of Government Departments or multiplication of officials, and therefore you will probably accept readily suggestions and proposals of this kind which will do something to mitigate that increase.
There are certain Amendments in Clause 2 which extend the provisions of Part I of the Act beyond cases of sale. They extend them to hire purchase transactions and other arrangements of that kind, as to which there has been a great deal of complaint and which hitherto have escaped the provisions of the Bill. Moreover, so far under the principal Act it has been what has been done after the last process in manufacture has been completed that has 367 been principally attacked, but under this Bill the Board may if it chooses, and only if it chooses, bring under the provisions of the principal Act various processes of manufacture—repairing, altering, dyeing, cleaning, washing or other methods of that kind—and may, if the Minister of Transport agrees, also deal with cases of excessive charges for road transport.
The next point to which I desire to call your Lordships' attention is to the definition of "profit." This was found to be rather too widely defined in the principal Act, and under subsection (3) of Section 2 a fresh definition of profit is adopted. The definition varies according to whether the particular trader was engaged in the business before the war, or whether it is a new business that he has adopted since the war. In the one case in considering what is a reasonable profit you have to consider the profit he was making before the war, and in the other case you have to consider the average rate of profit prevailing in that particular locality among the same class of traders before the war.
There is another provision—a small but important provision—in subsection (4) referring to cases of prosecution in wholesale cases. Prosecutions may be undertaken within one year after the commission of the offence. Previously the time was six months, but it has been found, in the case of wholesalers, that this was almost inoperative, because of course they have sold to the retail dealer and then he has sold at a price which is considered to be excessive, and then when the case came to be examined before the tribunal the defence set up was that the retailer was not making an excessive profit but that the wholesaler was doing so. And, as that would only come out generally rather more than six months after the goods had been sold by the wholesaler, the extension of this period from six months to a year is necessary in order that such goods may be dealt with.
Clause 3 is a question of trade competitors, and whether trade competitors can sit on tribunals. An exception is made in the case of members of co-operative societies, because I understand that in some of the towns in the North almost everybody is a member of a co-operative society, and therefore, unless they could sit on these tribunals, there would be no tribunals at all. But a careful exception from this rule 368 is made in the case of those who are officers or managers of those societies, who might be considered to have a real interest, and therefore to be unfair judges of those who were their competitors in trade.
Then there are powers of inspection by the Board of Trade. These give the Board of Trade powers for the production of books and so on, and strengthen their position in order to get information in cases where these offences have taken place. Then the publication of reports is made legal, but there is this careful proviso, that before any such reports affecting different businesses or trades are made public the persons concerned may come and state their case before the tribunal, and show their reasons why they think it disadvantageous to that particular trade or unfair that these reports should be published. Clause 7 deals with particular protection for secret processes or preparations. In those cases, it is decided, it is not necessary that an investigation should be held into what may be a secret and private process. That is waived, but an arrangement by which an accountant can assess the costs of production is substituted. I think the only remaining Clause to which I need call attention is the provision against victimisation, that is to say, if anybody in a village, we will say, has in a public-spirited manner objected to an excessive charge he is not to be penalised by possibly the only man in the village who deals in the particular article in question refusing to deal with him. That is made an offence, and is punished. Those are the principal provisions in this Bill, and I hope your Lordships will give it a Second Reading.
§ Moved, That the Bill be now read 2a.—(Viscount Peel.)
§ LORD ASKWITH
My Lords, I should like to ask the noble Viscount whether he can give some explanation of one of the clauses to which he has not alluded. It refers to the finance of this Bill. I do so because of the speed with which it has been hurried through, both initially in August last, when the main Act was passed, and also last week. The main Act was passed just before the Recess and the Bill was rushed through both Houses. After nine months' incubation, with plenty of time to consider it, it is now brought forward immediately before the Whitsun Recess, and we are told we are to pass it.
369 The Bill, I think, left another place at 3 o'clock on Friday morning, and arrived here late on Saturday afternoon, and many noble Lords yesterday said that they had not seen it. The noble Marquess, Lord Salisbury, called attention to the manner in which it had come through, and I have heard murmurs from other Peers who were present in the House at that time. My attention was called to it because I happened to see one clause to which I took exception. I then read the Bill through and, to use the noble Viscount's own words, it appeared to do away with a good deal of Government machinery, so that the Bill enabled one of these Ministries at least to reduce the number of officials. Actually here was a Bill with some saving of expenditure. The rest of the clauses seem to follow in the same way as Clause 1, that clause being to contract out of Government supervision and examination, and therefore not demanding so much Government machinery. Clause 2 simply dealt with the manner of payment, no new addition, but hire purchase payment; and Clause 3, if the two Ministers agree, enables you possibly to put before a tribunal an extortionate taxicab driver; or the Board of Trade might do very much without, or possibly stop in the midst of dealing with the examination in the inquiry into a whole industry, if they found that the profits came in the midst of this examination.
Those seem to me to be clauses which allow some cutting down of expenses, and, to see how much they have been cut down, I got hold of the Act of 1919, and I must say that I was amazed to find that, instead of £75,000 a year being provided for the Act, this Act provides for £120,000 a year. At the present day £45,000 a year is nothing, but it is the accumulation of expenses going on in this way which is so serious, and the Bill has been pushed through both Houses at this speed, and nobody seems to have noticed the extra expense that is put on—and that in the case of a Bill where the work of the officials ought to be less. The sum of £45,000 is comparatively little, but I do not know that more officials are required for this Act—I cannot conceive it—it is sweeping away Government machinery, and either the estimates for the old Act were very much below the mark, or else this is a great deal too high.
§ THE EARL OF MIDLETON
My Lords, I should like to address a question to 370 the noble Viscount with regard to the purview of the Bill. I concur with my noble friend who has just sat down as to the proposal to increase the expenditure under the Bill. I have observed that in all these measures there is the same tendency to suppose that you can make the Bill more efficient by adding largely to the staff. I know that the whole subject is one of the greatest complexity, and I suppose that the noble Viscount himself would not claim that the Act of 1919 has hitherto had any marked success. In fact, I believe there is a general feeling throughout the country that only a few small prosecutions have taken place, and I do not think we have heard from the noble Viscount anything which leads us to believe that there has been any general reduction of charge in any of the staple trades.
Let me take one instance, the case of wool and cloth. I have heard it stated that the difference in the price of wool paid when it arrives in this country, despite all the great increase of charges for freight—the difference between that and the price for the made-up article is one of the greatest differences which has occurred as a result of the war. I believe the same may be said of cotton. I want to ask the noble Viscount whether the Government has considered that the real difficulty of these prices is that the price which the manufacturer is inclined to charge is an equivalent price to that which he can get by sending the article abroad. I put this as a hypothesis to the noble Viscount, and I ask him whether I am not correct in this assertion—that if the Government were to say to all the manufacturers of cloth, "You will in future have to sell in this country anything you do sell at x figure," the reply of the manufacturers might be "We are full up with orders for the foreign market, and we are forced to take these orders on, for which we can make any charge that the foreign market is willing to pay," and the result of that action would simply be to cause a shortage in this country.
I suggest to the noble Viscount that, whether it be economically sound or not, if you want to make a profiteering Bill effective in bringing down the price of some of the staple articles of consumption and use without reducing the price, the only course open to the Government is to consider whether they should not say to the manufacturers, "Show us what your profit 371 should be; you shall take a reasonable profit, but you are bound to sell at that profit such-and-such a percentage of your production in this country, and for the remainder you can get what price you like by sending it abroad." I ask this question because I very much fear that, on this point of the general rise of prices, owing to the great market abroad the only effect of interference by the Government may be to shorten supplies here. I would ask my noble friend whether that question has been considered; and I am afraid I must join in what the noble Lord behind me (Lord Askwith) said—namely, that it is really almost a scandal that subjects of this kind should be brought forward in such great hurry just before the recess. It is obvious that there is not the slightest opportunity to introduce Amendments in Committee and to have them considered. We cannot even confer with our friends outside on a measure which we saw in print for the first time only yesterday. The natural result of such an action can and must be to limit the usefulness of this House; and I have ventured to make these few observations only because I desire to know from the noble Viscount whether the Government have considered the difficulty.
§ VISCOUNT PEEL
My Lords, I think one question raised was why the cost under the previous Bill was suggested to be £75,000, and why it should be £120,000 under this Bill. I do not know that I can give a very satisfactory answer, because I believe it is not a question of increasing officials, as he seems to suppose, but that it is rather to meet a contingency in the way of heavy legal expenses. As a matter of fact, not nearly one half of that £75,000 has been spent in the first six months of the working of the Act; therefore it must not be assumed that the whole of that extra amount represented merely the multiplication of officials.
As to the question asked by the noble Earl, I suppose it is fairly obvious that if you prevent people from selling an article above a certain price in a particular country the tendency will be for the goods to be sold at the best price in an outside market. That is why the Bill has been so drawn. If the noble Earl will look at Clauses 1 and 2 he will see that their whole object is not to cut down profit but to prevent unreasonable and excessive profits; and, indeed, so far as you can, to get the different traders and associations of traders 372 to agree amongst themselves what is a fair and reasonable profit, so that, as the noble Earl suggested, they may sell in the home market. I called attention to that in Clause 1, subsection (2). It is an advantage to them as regards their trade to be able to make these arrangements and to be free from these tiresome and rather harrassing investigations; and, as an inducement to them, they are asked to make these arrangements if the Board of Trade is satisfied on the particular point to which the noble Earl has alluded—that is, that an adequate supply of these articles is taken for the home market. You are, of course, to some extent sailing between two dangers. You have to prevent the prices being too excessive and being profiteering prices in this country, but at the same time you have to make the profits so fair and reasonable that there is not the temptation—as there was under the Coal Bill when prices were limited as regards the home market—to send everything out of the country.
One further thing about expenditure. A very small amount of the £75,000 was actually spent in legal expenses. The two sums which I think my noble friend Lord Askwith took were not comparable. I think he rather suggested that £75,000 was for a year as was also the £120,000; but I understand that the former amount was for a half-year. The £120,000, is, of course, not double £75,000, and is therefore a reduced sum. Instead of taking £150,000 only £120,000 is taken. Consequently on those figures it would appear that there would be some reduction. This money is taken to some extent in fear of certain legal charges.
§ THE MARQUESS OF SALISBURY
My Lords, this discussion of a Bill is, of course, a very inconvenient process at this period of our proceedings and in this desperate hurry. May I say that it makes it a little more difficult if Ministers, who are very hard worked in other Departments, do not really know the answers to the questions which are put to them. I do not complain in the least of my noble friend Lord Peel, who has all his work cut out for him in helping the Secretary of State for War, that he does not know the full answers to questions that are put by noble Lords on the actual terms of this Bill which has nothing whatever to do with his Department; but it makes it extremely difficult for your Lordships, who are asked to get 373 through everything in a couple of days, if the Minister in charge of the Bill is not in a position to answer questions.
My noble friend Lord Askwith has put a question to the Government as to the expense set down in the Bill, and, as I understand, he shows that the sum of money allocated in the Bill is larger on the face of it than the sum allocated in the principal Act. The noble Viscount says he thinks it is for half a year and not for the whole year—
§ THE MARQUESS OF SALISBURY
At any rate we shall be very glad to know the purpose for which this £125,000 is required; why this large sum of money should be proposed to be voted in the Bill under discussion. I then come to the question of my noble friend Lord Midleton. He wants to know whether the Government have thought of the dilemma which he carefully explained to your Lordships. I do not desire to repeat what he said, but merely to recite it in one sentence. If you control the price in the home market there are certain commodities which will be driven abroad where the price is not controlled, and, where you are dealing with a commodity of first necessity like wool, that may have a very formidable result on the whole market. My noble friend asked whether the Government had faced that question—whether they had considered it. Certainly in listening to my noble friend Lord Peel it did not seem that he was aware whether they had thoroughly threshed out that particular point.
What will the Government do supposing they find, with regard to a commodity of first necessity, that the effect of limiting the price is to restrict the home supplies? Is there any clause or provision in this Bill or in the principal Act under which they will be able to relieve the necessity of the home markets; or will the noble Viscount have to come to Parliament again, probably the day before some recess, in order to persuade us to pass another Act to get the Government out of the particular dilemma in which they are placed? One would have thought that there would have been a provision in the Bill itself that where the Secretary of State—is it a Secretary of State or a Minister?—where the Minister certifies or ascertains that the effect of the 374 restriction is to drive a commodity abroad and to limit the home supply, there would be some means of relief granted without coming to Parliament again. I do not gather that that matter has been really contemplated by the noble Viscount, though, no doubt, it has been contemplated by the Department to which this Bill actually belongs. I am sorry to have to press the points, but I should have been glad if the Government could have added some further word to relieve our anxiety in that important respect.
§ LORD AMPTHILL
My Lords, I beg to move that the debate on the Second Reading of this Bill be adjourned until some day after the recess. It is clear that the House is not prepared to deal with it adequately or in any manner consonant with our reputation. I think advantage would be gained both by the Government and by other members of the House if the debate were adjourned until we have had an opportunity to consider the Bill more carefully.
§ Moved, That the debate be adjourned.—(Lord Ampthill.)
THE CHANCELLOR OF THE DUCHY OF LANCASTER (THE EARL OF CRAWFORD)
My Lords, I hope that my noble friend will not press this Motion. I do not know whether he was in the House yesterday when I explained the rather unfortunate position in which we find ourselves in regard to this matter. The Act to which Lord Salisbury has just referred, and which, I must admit, was passed under very inconvenient circumstances on the last day of our sitting, comes to an end in the course of a few hours. It is quite true that there is in this measure a clause which says that the Act shall be deemed to have come into force in the event of its not having come into force, or something of the kind, in order to bridge over any interval between the passage of this Act and the date of expiry of the old Act. None the less I submit to your Lordships that it is early and there is ample time—considerable time at any rate—to examine the Bill, and it would be very unfortunate if the Bill were deferred until after the recess. I admit that there are obvious difficulties in the measure, to which Lord Salisbury has just referred, but I submit most respectfully and, indeed, most decidedly, to your Lordships that the fact of there being difficulties is not a justification for putting off 375 the measure and involving us in any possible Departmental or legal difficulties which might result from there being an interregnum between the two stages.
THE MARQUESS OF CREWE
My Lords, I quite perceive from what the noble Earl has told us that it would be an inconvenience to His Majesty's Government if the matter were postponed, as the noble Lord below the gangway suggests. But I think, before expressing the agreement of the House with the noble Earl, that we should be glad to be informed what is the precise danger of which His Majesty's Government are afraid if the coming into operation of the Bill were postponed for a fortnight, which the adoption of Lord Ampthill's suggestion would mean. I understand that there is a clause in the Bill providing that its effect will be produced retrospectively whenever it passes. Do the noble Viscount and the noble Earl really think that in the event of the postponement there will be a sort of orgy of improper action on the part of those affected by the Bill which would have any serious national results? It cannot be disputed that the House has not had a chance of examining the provisions of the Bill properly. That I do not think the noble Earl attempted to contradict. That being so, one would be glad to know what is the really imperative need of its immediate passage, and what dire consequences may follow if it is postponed for the short time contemplated by the noble Lord.
§ VISCOUNT PEEL
My Lords, the noble Marquess, I think, rather suggested that there would be some inconvenience to the Government if there was a sort of interregnum, if the present Act comes to an end, as it does, on the 19th, and we have to wait until after the recess in order to pass this measure. He says that there is a provision in the Bill (as I stated when I moved the Second Reading) whereby the existing Act is prolonged until the time when the present Bill becomes an Act. That is so. But I think the noble Marquess and your Lordships will see how extraordinarily undesirable it is, not from the Government's point of view—
§ VISCOUNT PEEL
I must admit that the Bill is running rather close to the date. 376 If there was an unfortunate lapse of six or seven hours, or perhaps half a day or twenty-four hours, it was necessary to provide against it. The fact that there was a possibility of there being some little lacuna of that sort between the lapsing of the first Act and the commencement of the operation of the second Act shows how extraordinarily inconvenient and troublesome it would be for business in this country for an Act like this suddenly to lapse and then for there to be a gap when anybody could charge what prices he liked and the whole of the machinery would be temporarily suspended.
If, therefore, the idea that there should be a lacuna, or gap, or interregnum of only a few hours or one day is inconvenient, how immensely more inconvenient it must be for the whole trade of the country if, perhaps for two or three weeks, this gap should be left and that only after the lapse of that time and all these operations have gone on we should pass an Act retrospectively (as it were) lengthening the period of the previous Act. I cannot conceive a more troublesome state of things than that for the country. The noble Marquess asks whether we think there might be a general outburst of profiteering. I do not know. Possibly there might not be, but, anyhow, there would be a terrible breakup of the machinery of administration and a great disturbance of the minds of traders who would not in the least know where they stood during that time. I hope, therefore, that your Lordships will not press the postponement of the Bill till after the recess. May I point out though, no doubt, your Lordships have not had a very long time to consider it, on the Committee stage of the Bill (which comes on tomorrow) your Lordships will have plenty of opportunity to consider particular provisions.
In further answer to the question about the money, I have pointed out already that the reason for the discrepancy between the two sums is that one is for the half-year and one for the whole year, but I would be very glad indeed to-morrow, when we come to the Committee stage, if your Lordships allow the Bill to pass Second Reading, to give any full account I could of the particular items which cause the size of the Estimate. That I should be extremely glad to do if it would help your Lordships in coming to a decision.
§ THE MARQUESS OF SALISBURY
My Lords, I do not think we can allow the procedure of our House to be interfered with on every occasion, and at the same time not get adequate answers to the questions we put as to the tenor of the Bill itself.
§ THE MARQUESS OF SALISBURY
The question before your Lordships is whether the debate should be adjourned. The only effect of an adjournment would be that the Second Reading would stand for to-morrow. It does not follow that the Bill will be put off until after the Recess, but your Lordships would have further time to consider it between now and to-morrow. It may be that by to-morrow we shall be satisfied and allow the Bill to go through. That depends, of course, on your Lordships' House. But no definite harm will be done if we adjourn the debate, and we shall have recorded an emphatic protest against the way the Government manage business. I say this with all the greater assurance because I know it is not the fault of Ministers in this House. I know my noble friends opposite are absolutely blameless in the matter. It is due to the extraordinary way in which business is done in another place. It is not as if the House of Commons was hard worked in these days. Everybody knows that is not the case. They often go to bed, and I congratulate them upon it, a great deal earlier than I was allowed to go to bed when I had the honour of a seat in the other House. I think Lord Ampthill was fully justified in moving the adjournment of the debate.
THE EARL OF CRAWFORD
May I say one further word? Lord Ampthill proposed the adjournment of the debate until 378 after Whitsuntide, but the noble Marquess has thrown out a suggestion which puts rather a different complexion upon it. He says, "Postpone the Second Reading to-day, and, having given further consideration to the Bill, we will see if we can pass the measure within the statutory limit of the existing Act." If your Lordships are prepared to pass this Bill to-morrow, or by Thursday, I would agree at once.
THE EARL OF CRAWFORD
In that case I am afraid I must resist the Motion for the adjournment of the debate.
THE EARL OF CRAWFORD
We are entirely in the hands of your Lordships. I repeat that a very grave departmental situation may occur in the fact that the old Statute will have come to an end and will only be prolonged, ex post facto, by this Bill, which may, or may not, pass after Whitsuntide. I wish to add one further personal word. My noble friend Lord Peel only took charge of this Bill yesterday evening owing to the fact that Lord Milner was suddenly taken ill.
§ THE EARL OF MIDLETON
I do not know what action your Lordships will take, but I suggest that it is an intolerable position in which to place this House. We have asked whether it is not possible to pass an amendment which will largely extend the scope and usefulness of the Bill, and the only answer we get is that we must pass the Bill to-morrow at all hazards. I shall do my very best to bring before the Government the nature of the Amendment which I mentioned to the noble Viscount just now. If the Government would undertake to deal with such cases as I alluded to it would probably have a very large effect in reducing the cost of articles. They have not the power under the Bill at the moment, and we really ought not to be denied an opportunity of having sufficient time for debating the measure.
§ VISCOUNT PEEL
I did not know that the noble Earl indicated he was putting down an Amendment. If he desires to do so, I suggest he could put it down to-night and we could discuss it to-morrow 379 if we had to sit up all night. There is no objection to that course.
§ LORD SOUTHWARK
My Lords, I think it would be a good lesson for the Government if we adjourned the Second Reading until to-morrow in order to give them an opportunity of affording information on the points which have been raised. It seems a reasonable request. I do not understand the noble Marquess to say that he will not vote for the Second Reading of the Bill, but his suggestion that we ought to have some more information before giving assent to the Second Reading is a good one. On previous occasions I have objected to passing measures through this House so hurriedly—measures of great importance that ought to be criticised. Somebody ought to be taught a lesson; whether it is the House of Commons or the Govern-
§ Resolved in the affirmative, and debate adjourned accordingly.