LORDS AMENDMENT

HL Deb 28 July 1949 vol 164 cc632-41

Clause 3, page 5, line 13, after the words last inserted, insert— ("() If any such undue preference or unfair discrimination as aforesaid is shown or exercised or reasonably apprehended, any person affected shall have a right of action for damages, or for an injunction or other relief as may be just.")

The Commons disagreed to the above Amendment but proposed the following Amendment in lieu thereof:

Page 5, line 13, insert— ("(2) Nothing in this section shall be construed as imposing on the Corporation, either directly or indirectly, any form of duty or liability enforceable by proceedings before any court.")

VISCOUNT ADDISON

My Lords, this is the Amendment which another place has moved in lieu of the one inserted in this House. It deals with the showing of undue preference. I beg to move that this House do not insist on the Amendment to which the Commons have disagreed, but agree with the Commons in the Amendment proposed in lieu.

Moved, That this House do not insist on the Amendment to which the Commons have disagreed, but agree with the Commons in the Amendment proposed in lieu.—(Viscount Addison.)

3.25 p.m.

VISCOUNT SWINTON

My Lords, I do not think your Lordships would wish to pass this Amendment entirely in silence. I am rather surprised that the noble Viscount the Leader of the House has not given a little more explanation to your Lordships of why this change is introduced. But observe what is happening here. This is not a case where we disagreed with the Commons, and offered them an Amendment in disagreement with them—nothing of the kind. On the contrary, when the Bill came here it contained a provision—and this was the intention of the Bill as presented to us by the Government—that the subject should have a right of action if there were undue preference. Not only that: the noble Lord, Lord Lucas of Chilworth, commended to us that there should be this right of action, and we supposed that it was common ground. The only discussion in this House was not whether there should be a right of action, which the Government themselves proposed, but whether the words of the Bill gave the right of action which the Government intended.

The noble Lord, Lord Lucas, informed us in Committee that he was advised by the Law Officers that no special words were necessary. Assisted by the noble and learned Viscount, Lord Maugham, and others, I ventured to submit that the Law Officers were not right in law, or at any rate that there might be a doubt as to whether the intention of the Government was fully carried out by the words in the Bill. Your Lordships will remember that there was cited a speech by Lord du Parcq, in one of his last judgments, in which he said that where it was intended that the subject should have a right of action in regard to a statutory duty that right ought to be clearly expressed. Noble Lords thought that all they were going to do was to include simple words to say that the right of action which the Government proposed should be there and should be expressed in terms as Lord du Parcq advised.

Then, to everybody's surprise, at the end of the Report stage the Lord Chancellor, who had not hitherto taken any part in the Bill, came down to the House and said: "Of course, the Opposition are quite right; if there is to be a right of action, it ought to be expressed in the Bill." Naturally, we supposed that all that was going to happen, in view of the fact that we had had the assistance of the noble and learned Viscount, Lord Maugham, was that the Lord Chancellor would say: "I accept the Amendment." But, to everybody's intense surprise, he said, "I have had a look at this Bill now "—and this is the Bill for which there was a mandate and for which the country was so clamant! He had had a look at it, and had come to the conclusion that it would be better if there were no right of action at all. He commended that to us—whether on instructions or on his own motion he did not tell us. We considered this and, when the Bill came to Third Reading, your Lordships, not unanimously but by a great majority, were of opinion that what was proposed to us by the Government was perfectly right, that there should be a right of action, and that the right of action should be expressed. We carried the Amendment, which was merely a clarifying Amendment to make it plain that the right of action lay.

Observe what happens next. The Bill goes hack to another place. If we had not inserted the clarifying Amendment, which all the lawyers said was necessary and proper, in order to give effect to the Government's intention, I very much doubt whether the other place could have offered an Amendment in lieu, because we should have taken the Government's drafting at its face value and the Bill would not have been amended. But what now comes back is a proposal that we should reverse what the Government themselves did when they sent the Bill up to us—and I thought that the whole idea of the Parliament Bill was that Bills should pass in the form in which they were presented to us—and that the last thoughts of the Lord Chancellor should be substituted for the considered opinion of the Government! It is worse than that. When we had Clause 2 before us originally—Clause 2 sets out the duties of the Corporation and its subsidiaries—we extended its operation from the Second Schedule activities, which are iron and steel activities, to all the principal activities. That Amendment was rejected by another place when the Bill was returned there and your Lordships have not insisted upon the change. The result is that the duty not to give an undue preference is now confined to Second Schedule products—that is, iron and steel, pig iron, ingot steel and rolled products. Those are exactly the products which are the raw materials of every manufacturing industry, every engineering industry, the hundreds of undertakings (ninety-six in theory but far more when you take into account the subsidiaries) which are taken over by the nationalised Corporation, and all the other independent competitors. Those are exactly the cases in which, if the Corporation wanted to favour their own subsidiaries, they could do so by giving an undue preference. Therefore it is all the more important that the subject should have his right of action.

What has happened? At the last moment a change is made by the Government. Although the obligation not to give an undue preference is limited to ingot steel and rolled steel, yet they say "If an undue preference is given there should, at any rate, be no right of appeal to the courts." Let the country clearly understand what is being done now. Not content with rejecting the other Amendment, the Government insist on inserting an Amendment depriving the subject, the free industries, of that protection which the Bill as presented to this House had originally given to them, and was intended to give them. It deprives them of the right which every subject ought to have—namely, the right of appeal, not as a suppliant to a Minister (and in this case an interested Minister, the Minister responsible for the Corporation), but as a free man to the independent law courts of this country. Only a year ago or less the Lord Chancellor was boasting —and rightly so—that he had introduced a Bill in order that everybody might have equal rights as against the Crown. This takes away that right. Let us be perfectly clear as to what is to happen if this Amendment goes through. A duty is imposed in the Bill that there shall not be an undue preference; but if that undue preference is given, if the Corporation or its subsidiaries discriminate against the ordinary man, the ordinary man will have no right of action. It is said that he can go to a Consumers' Council. But of what use is that? He can go to the Minister as a suppliant. I say that in common justice he ought to have the right of any subject to go to the law courts if he has been injured by a statutory undertaking. That right is going to be denied him.

This is a bad enough Bill, even after amendment. The country will appreciate that every Amendment which gave extra protection to the subject or made the Bill more workable is to be rejected. From a political point of view, perhaps that is rather a good thing, for the country will know not only that they have before them the plain issue of whether this great industry should be nationalized, but that the Government have made the Bill as impossible as they can.

3.35 p.m.

VISCOUNT ADDISON

My Lords, perhaps I might be allowed to say a few words in general about the representation of the noble Viscount as to previous proceedings. Whether intentionally or otherwise, he has very seriously misrepresented the position. This particular provision, providing against undue preference, was not the subject of consideration by the Lord Chancellor months before the Bill was introduced. It was inserted in another place in order to meet points raised by the Opposition, and this particular subsection was, I believe, agreed with the Federation of British Industries as a fair way of providing that there should not be undue preference; and it is not proposed that that should be deleted from the Bill. As the noble Viscount has quite correctly stated, the question then arose whether there was or was not an appeal to the courts in all these cases. Then it is perfectly true, as he said, that the Bill as it then stood was subjected to careful and prolonged consideration by our legal advisers; and it was perfectly clear that one might have a long series of actions on all kinds of issues which were exceedingly difficult to define and which would be brought to the courts quite contrary to all commercial practice; because in the other part of the same clause the Corporation is required to supply people and firms with articles of such types, qualities and sizes as are available at certain prices, and all the rest of it. It is perfectly clear that this is in the ordinary course of business. If all these troubles between a supplier and his customer were to come to the courts of law—

VISCOUNT SWINTON

I think I am entitled to ask this question. Is it not a fact that the Minister of Supply in another place deliberately inserted the words: but without prejudice to such variations in the terms and conditions an which those products are supplied as may arise from ordinary commercial considerations or from public interest "? Is it not a fact that those words were inserted in order to preclude a variety of actions in petty cases to which the Minister has referred? And is it not a fact that the Minister did not move any Amendment to say that there should not be a right of action, but that the Law Officers said that there would be a right of action?

VISCOUNT ADDISON

I am not disputing the history of the case. What I am saying is that this provision was put into the Bill to oblige the Opposition in the other place. But it having been subjected to prolonged and careful examination as to what might be involved, it was decided that it would be much better and, indeed, necessary to follow the example of the Transport Act to which the noble Viscount and his followers did not object. The provision which we proposed should be inserted, and which was rejected by the other side, reads as follows: Nothing in this section shall be construed as imposing on the Commission, either directly or indirectly, any form of duty or liability enforceable by proceedings before any court or tribunal to which they would not otherwise be subject. That was put into the Transport Act with the full accord of this House. After careful and prolonged examination of all that might be involved in the vague words which were inserted, it was felt that it would be an impracticable matter in ordinary business; and it was for that reason and that reason only that this subsection was inserted. It was not done, I agree, until the latter stages of the Bill, and after prolonged consideration. But the proposition was put fully before this House and debated. It was rejected by the noble Lords opposite, and it has been reinserted in another place.

3.40 p.m.

LORD STRABOLGI

My Lords, before the noble and learned Viscount deals with legal matters, I should like to put a question to him, because I must confess that I feel a little dubiety concerning the whole situation which we are discussing. I refrained from raising this at an earlier stage because I had not given notice of it, but the Lord Chancellor now knows what is in my mind as the result of a conversation which I have had with him. The matter is made rather more important because of the new wording which we are asked to insert in the Bill in accordance with the proposal from he other place. We have heard arguments about the subject not being able to sue the Corporation. I accept what the noble Viscount, Lard Addison, said, though I confess with a little uneasiness because I happen to know from first-hand knowledge, as I explained earlier, how it is possible to discriminate unfairly in the case of raw materials. We had some examples of that during the war. It is most important that we should do anything we can to prevent any unfair discrimination.

The question which I should be grateful if the noble and learned Viscount who sits on the Woolsack would be good enough to answer is this. Do these new words preclude the subject—in this case the independent companies left outside the scope of the Bill—from proceeding against the individual companies with whom they will in practice deal and from whom they will buy their plates, billets and so on. Are they precluded from proceeding against those companies? I think it is of the greatest importance. If I may say so with great respect to my noble friend below me, this is a matter which differs somewhat from the position under the Transport Commission. The Transport Commission, after all, deal with the whole of the railways and with the whole of transport together. Here we have a different set-up. This is a different experiment in national ownership—and I believe a very valuable one —under which the companies are left a great dealt of autonomy, with the overriding Corporation settling policy. Therefore there is some difference between the situation of the Transport Commission and that of the Iron and Steel Corporation, and I should be grateful if we could be informed whether the right of proceeding against and suing the companies in extreme cases is in any way weakened by the words which we are asked to adopt.

3.43 p.m.

THE LORD CHANCELLOR

My Lords, the position is that any company has the right to sell to any person any commodity it likes at any price it likes, unless it is precluded from doing so by some obligation with regard to undue preference. The obligation with regard to undue preference is an obligation which is imposed only on the Corporation. There is no obligation on one of the companies and there never has been. Your Lordships will note that Clause 3 of the Bill starts out by saying: It shall be the general duty of the Corporation so to exercise their powers as"— and so on. There has been no obligation on any companies at any time; the right has been only against the Corporation. This clause profoundly affects the Corporation. If I may say so with respect, I think the noble Viscount, Lord Swinton, was a little in error in certain of the points which he raised. May I tell your Lordships this quite categorically? The Lord Chancellor is in a somewhat ambiguous position for he is a member of the Cabinet and also Speaker in your Lordships' House: I interpret my position in this way. When it comes to advising your Lordships on matters of law I will accept no instructions from anyone. I shall often be wrong, I do not doubt. But I shall explain the law to your Lordships as I believe it to be. I shall be utterly indifferent whether anyone else disagrees with me or not. That is the line which I have taken in this case, and I believe it is the line which would commend itself to your Lordships.

The noble Viscount seemed to assume that I knew nothing whatever about this Bill. As a matter of fact, I was as responsible as anyone, and perhaps more responsible than most, for the form in which this Bill was introduced in the House of Commons. I had gone through every line of it. I confess, however, that I had not followed the later alterations made to the Bill in the House of Commons. If excuse were needed, I may say that I had plenty of other things to occupy my attention. So I confess I was not aware of this alteration. The first time that I realised that this Amendment had been moved in the House of Commons was when they came to consult me about the question whether there was some ambiguity, some room for doubt, about the right of the individual. I came to the conclusion that in a Statute of this sort there was some room for doubt, and that it was undesirable to have a Statute which allowed any form of ambiguity in this regard. Therein I was following out what the late Lord du Parcq said in one of his last judgments.

I will tell your Lordships why I came to that conclusion. I have one ambition which I have tried to carry out throughout my term of office as Lord Chancellor: I want to keep the judges out of anything that looks like politics. In that I am sure I am right.

As this Amendment was moved and accepted by the Minister, it contained a clause against an undue preference which was qualified, however, in this way, which is quite without precedent: but without prejudice to such variations in the terms and conditions on which those products are supplied as may arise from ordinary commercial considerations or from the public interest. When that wide consideration was raised, I came quite definitely to the conclusion, rightly or wrongly, that that was not a desirable subject to leave to His Majesty's judges. There is no precedent for it at all. I do not believe it is desirable that the judges should embark on consideration of what are ordinary commercial considerations; still less, in this sort of topic, that they should deal with what is regarded as the public interest. If judges are going to pronounce on these matters—and these matters are in essence political matters—there is danger of the judges being drawn into the political arena. I am quite convinced that that is completely opposed to the interests of the country.

Therefore, when I saw that the clause had been qualified in that way, I came to your Lordships and said: "If you want this clause in this form, the remedy which anyone has who thinks he has a grievance is a political remedy. He can go to the Consumers' Council, and from the Consumers' Council to the Minister, and raise this matter in Parliament." For that point of view I make no apology. I believe that to be the right point of view. The fact that the House of Commons accepted my view is to me satisfactory These matters are typically the sort of matters on which the Lord Chancellor must advise this House and his own colleagues. Though I apologise in that I have not kept in touch with day-to-day changes of the Bill in the House of Commons, as soon as I saw that the Bill contained this clause I came at once and told your Lordships what I thought about it. I think the House of Commons have acted wisely in accepting the sort of vague principle which is here enunciated as being a matter far more suitable for political sanction than judicial sanction. Accordingly, I maintain that the Commons have taken the right view.

3.50 p.m.

THE MARQUESS OF SALISBURY

My Lords, I had not wished to intervene on this question, which is undoubtedly one of considerable legal complexity. I have listened very carefully, as I am sure all your Lordships have, to what the noble and learned Viscount the Lord Chancellor has said. I think that none of us will disagree with his general contention that the judges ought to be kept out of politics. I think that is common ground in all parties. Of course the result of what the Government have now done is unhappy. None of us can deny that. Under the Lords Amendment the citizen who felt he was aggrieved had an appeal to an independent tribunal. Now he has only an appeal to the Minister.

LORD LUCAS 0F CHILWORTH

To the Consumers' Council.

THE MARQUESS OF SALISBURY

To the Consumers' Council, which can only make a recommendation to the Minister. That is the unfortunate result, and whether it is a question of undue preference being a political affair or not, I should have thought it would have been possible to find some completely independent body which could have dealt with this from a legal angle. I believe the Bill was a happier one, and would have given more confidence before this Amendment was introduced. I can only regret that it has been done, and I feel bound to say so.

On Question, Motion agreed to.