HL Deb 27 July 1953 vol 183 cc884-93

2.50 p.m.

Order of the Day for the Second Reading read.

THE CHANCELLOR OF THE DUCHY OF LANCASTER (VISCOUNT WOOLTON)

My Lords, I have asked my noble friend Lord Mancroft whether he would be agreeable to my putting this Bill before your Lordships. In the White Paper on Full Employment which I published when I was Minister of Reconstruction, and in the production of which I had the great benefit of beng associated with the noble and learned Earl who now leads the Opposition, we wrote these words: There has in recent years been a growing tendency towards combines and towards agreements, both national and international, by which manufacturers have sought to control prices and output, to divide markets and fix conditions of sale. Such agreements or combines do not necessarily operate against the public interest, but the power to do so is there. The Government will therefore seek power to inform themselves of the extent and effect of restrictive arrangements and of the activities of the combines, and to take appropriate action to check practices which may bring advantages to sectional producing interests but work to the detriment of the country as a whole. I think that in the Coalition Government we were wise to make this provision. It was as a consequence of that that the Monopolies Bill was subsequently passed.

The Bill that I have the honour to introduce to your Lordships to-day has a limited scope and a single purpose. It is to strengthen the Monopolies and Restrictive Practices Commission so that they can deal at any one time with a greater number of investigations. Monopolies and restriction of competition, as we said in 1944, are not necessarily harmful, but they have the power to do harm. The Monopolies Act did not, in fact, prohibit restrictive conditions or any particular example of them, but it instructed and empowered the Government to arrange for their investigation and to take what remedial action they thought was necessary in the public interest. The Commission were embarking on a difficult task: it was a novel task in which they were not able to be guided by precedents. They had to establish a procedure which brought a steady stream of reports, and they have succeeded in doing so. I think they have a good achievement to their credit.

It is most important that we should now review the situation and make whatever changes experience has shown to be necessary in order to improve the machinery of the organisation that we placed at their disposal. This Bill, which I imagine will have the support of all sections of the House, is a simple machinery Bill. It provides the terms of service of the chairman, makes arrangements for the appointment of one or two deputy chairmen and seeks to lay down the sort of conditions that will attract men of the necessary background and ability. It increases the permissible maximum of the Commission. If I remember rightly, the members originally numbered eight, and when noble Lords opposite were in power that was increased to ten. Now we are proposing, in Clause 2 of this Bill, to increase the number to twenty-five. Having done so, we now propose that these twenty-five gentlemen, or such of them as are appointed, should be permitted to work in groups. As the Act now stands, the chairman is appointed from time to time by direction of the Board of Trade. He may be appointed for a maximum of seven years, in the first instance, and this may be extended to twelve years. There is no power to pay any pension and no power to appoint a deputy chairman.

We have been fortunate up to date, but it would be relying on extraordinary good fortune to expect that men of the calibre needed for this Commission, and to strengthen it, can be induced to serve on these terms. Whilst it is not necessarily the case that lawyers should be appointed to these high positions, the qualities of mind and personality required are little, if any, inferior to those required in a High Court Judge. Important aspects of the work are of a semi-judicial character. I think your Lordships will agree that, in these circumstances, it is appropriate that we should have terms of security and superannuation likely to attract the right kind of men. The type of men we have in mind is, broadly, similar to that suitable to act as County Court Judges or as National Insurance Commissioners. We are hoping we may get men who have already achieved some distinction in their professions, who would probably be in their early fifties, and in our opinion it would not in these days be reasonable to expect such men to apply for positions that were neither permanent nor pensionable.

Therefore, in the Bill we are proposing that the chairman and deputy chairmen should be permanent appointments. Permanency is conferred by prescribing the age limit of seventy for retirement, with possible extension of not more than two years at a time, without any provision for earlier determination of appointment, except on the unlikely ground of misbehaviour or on the ground of incapacity. The chairman or deputy chairman would not get a pension under the Bill if he retired after less than five years' service, and no pension on retirement below the age of sixty-five except on medical grounds, unless he was certified as being permanently incapable of continuing the work. His pension would be on a sliding scale, rising from one-quarter of his salary on vacating office after five years' service to a maximum of one-half of his salary after completing fifteen years or more. The power to appoint deputy chairmen is permissive. None will be appointed until it is found necessary to make appointments in order to engage in the work.

Your Lordships will notice that in the Bill we have arranged for groups in the Commission. Experience has suggested that live is the minimum number of members required to provide the necessary variety of outlook and experience, and accordingly it is thought desirable to make this a statutory requirement. In this new field of Government investigation, it is important that we should build up a volume of case law, so that, as a result of inquiries, discussions and conclusions, both public opinion and business opinion may be guided to sound conclusions as to the practices which are, and those which may not be, in the public interest. The expansion of the Commission and the transition to the group principle will hasten the time when this body of case law can be established. As a consequence of the discussions that took place in another place, when we come to the Committee stage we shall make three drafting Amendments of a minor nature, with which I do not propose to trouble your Lordships to-day.

I have given your Lordships a brief outline of the Bill that is before the House. Since I had something to do with the creation of this body, along with the noble and learned Earl, Lord Jowitt, I should like to pay tribute to the present chairman and the members of the Monopolies Commission, men of sound and educated judgment, who have carried on their work free from political bias or preconceived ideas: we are considerably indebted to them. I beg to move that this Bill be read a second time.

Moved, That the Bill he now read 2ª.—(Viscount Woolton.)

3.2 p.m.

LORD SHEPHERD

My Lords, the noble Viscount, Lord Woolton, has expressed the wish that this Bill should be passed through your Lordships' House with a blessing from all sides. I can tell him that we shall offer no opposition to the Bill, as a Bill, but during the Committee stage we may endeavour to persuade the Government that certain Amendments are desirable. When I have finished my short speech, your Lordships will perhaps realise that there is some ground for extending this Bill, if we can. I say that, because this Bill has been narrowly drafted. It is bound down closely by the Money Resolution passed in another place, and it may be that, if we endeavour to move Amendments on certain lines, they will not be in order. If your Lordships read the debates on the Committee stage in another place, you will find that some comment was made about this, because it restricted the character of the Amendments put forward by our friends in that Chamber.

First of all, I should like to say a few words about a sentence in the speech of the President of the Board of Trade in another place. Apparently, he was resisting a suggestion that this Commission should be given authority, not merely to deal with monopolies, as we have hitherto understood them, but to deal with the nationalised undertakings, also. We are pleased that the President of the Board of Trade declined to accept the pressure brought to bear upon him in that regard. We may not entirely agree with the reason that he put forward, but to get a refusal from him seems to me most useful for the welfare of the great undertakings now run by the State. We on this side of the House do not admit that a nationalised undertaking is a monopoly, in the ordinary sense of that term and as we have hitherto understood it. A monopoly, hitherto, has been to us a man, or a few men, controlling an industry to the exclusion of everybody else, and possessing the right of exploitation over the whole population. We look upon the nationalised undertakings as something quite different. They are a form of co-operation in which the whole of the population is involved. They do not exclude anyone from participation politically in the government and control of their organizations; they are subject to the power of the Government; they come under decisions of Parliament; and they have to stand every kind of criticism that can be brought upon a public body of every description. Therefore, we are pleased that the Minister found it unnecessary to accept such a suggestion, and has drawn a difference between a nationalised industry and one which is run as a monopoly in the old form.

A second reference to the speech of the President of the Board of Trade in another place enables me to make a small point about something said by the noble Viscount, Lord Woolton, as to the flow of activities which proceed from the Commission as now constituted. The President of the Board of Trade stated that in the four and a half years of the existence of this Commission there have been thirteen(an unlucky number) specific references to that body, and one general reference. From the Commission we have received in all Reports in six Cases—namely, on Dental Goods, Rainwater Goods, Electric Lamps, Electric Cables, Insulin and Matches. I hope it will be realised that, although we on this side of the House should be reluctant not to give our thanks to the Commission for the work they have done, we still have a feeling that much quicker progress might have been made had the conditions under which they were working been better. I am well aware that the conditions were largely laid down by our own Government which preceded the present Government, but we were then taking our first step in that direction. The scheme now in operation can be looked upon as a pilot scheme, and we were hoping that this Government, now that they have some little time, would, in view of the experience gained, give us a more extensive scheme than this Bill provides. There are many things that we have got to do if we are seriously to tackle the evils which spring from private monopoly.

Let us look for a moment at the extent of the field which is to be covered. In the White Paper published in 1951 it was stated that as long ago as 1938 30 per cent. of the consumer goods reaching the public came under price maintenance schemes laid down by manufacturers for the guidance of the retail trade. If one measures what has been done up to now with the great work that still remains to be undertaken, it will be realised that the steps taken by the Government to-day will not expedite matters very much in the great fields revealed. We should like to see the work of the Commission more developed than it now is. Before I say anything about the size of the Commission as it is to be, perhaps I should mention one other fact about the production of Reports hitherto. Sir Archibald Carter, the chairman, has indicated that, although the Commission have been working very well, none of their Reports have been issued in under a period of eighteen months—and, indeed, the average length of time taken to bring out a report has been just over two years. So, given that great expanse to be covered, and given the rate of progress up to the moment, it will be realised that it will be a long time before we defeat monopolies by the present measures.

In another place members of my Party moved Amendments as follows: first, that there should be four vice-chairmen, instead of the two vice-chairmen proposed by the Government. They did that, in the first place, because there are to be twenty-five members of the Commission. They are to work in groups of five, so that if there is only a chairman and two vice-chairmen there will always be ten reserves standing by apparently with little to do.

VISCOUNT WOOLTON

May I help the noble Lord? The whole twenty-five will not be sitting all the time, and in the opinion of the Commission a chairman and two vice-chairmen will be able to cover the work, so that there will always be either a chairman or a vice-chairman in charge of the investigation when they are taking evidence.

LORD SHEPHERD

I am obliged to the noble Viscount for his explanation. While there is a slight difference between what he says and what I say, it will be realised that at no time will there be more than three groups sitting.

VISCOUNT WOOLTON

I do not realise that.

LORD SHEPHERD

If there is to be a chairman and two vice-chairmen, and if the groups have to be presided over by the chairman or one of the two vice-chairmen, no more than three groups could sit on any one day.

VISCOUNT WOOLTON

Yes, on one day.

LORD SHEPHERD

Or at one period.

VISCOUNT WOOLTON

No.

LORD SHEPHERD

Perhaps the noble Viscount will give us more information when he replies.

VISCOUNT WOOLTON

May I do it now, because it is so simple? The members of the Commission will not be sitting every day, and a chairman or vice-chairman will be able quite easily to be chairman of two groups at the same time, because the groups will sit on different days. I do not wish to pursue the matter further.

LORD SHEPHERD

I understand what the noble Viscount has said, and I will accept it, but I can still see that if a chairman or a vice-chairman is a chairman of two groups, he will have to sit on different days, and on the day on which he presides over one group there will be no chairman for the other.

VISCOUNT WOOLTON

The other will not be sitting.

LORD SHEPHERD

It will not be sitting, because there will be no chairman to preside. At any rate, in another place we moved to have four deputy chairmen, instead of two. The Government, however, decided that they could not agree. Then we moved that the deputies should be made full-time members of the Commission, in order to extend the amount of working time and so expedite the work of the Commission. That, too, was declined. We then wanted to strengthen the basis upon which the Commission worked, by making it impossible that the chairman or deputy chairmen should have a great financial interest in the trades or industries with which any inquiry was connected. Whilst it was pointed out that this was borne well in mind when appointments were made, we still feel that it would have been useful had there been something in this Bill which would have made it impossible for anyone who had a strong financial interest to undertake work in a given case. That, too, was refused. Then we moved another Amendment—the last one that I will mention—dealing with the appointment of assessors. We felt that if assessors were appointed, bringing skill and knowledge to the Commission, the work of the Commission would be more efficiently performed and, at the same time, would enable the Minister to enlarge the area from which the Commissioners would be drawn.

We also quarrel with the Bill because we do not think it looks at the whole field as it ought to do. If, for instance, your Lordships will look at the number of inquiries that have been made and will study the names, it will be found that they are chiefly in the light and secondary industries. We feel that the time has come when we should take cognisance of some of the larger industries, and make quite sure that decisions taken within their own organisations respecting prices are for the public benefit. We are all aware of the fact that, in the steel trade, price fixing is the order of the day, and has been for a long time. Both sides of the House have taken special steps in establishing an authority which could deal with steel prices, on behalf of the State, the consumer and the producing bodies. But another great industry, such as the cotton industry, for example, can fix prices and yet, apparently, not be brought within the Government's supervision and the provisions of this Bill. What we must realise is that we are living in changing times. The old days when the price mechanism could vary the price at which an article was sold are fast passing away. Industry after industry is safeguarding itself against the price mechanism in that respect, and is fixing prices for commodities which will pay a profit and which, at the same time, will give the workers engaged in that industry the standard of living to which they are entitled.

In the 'twenties, when the cotton industry lived in the fiercest kind of competition, the trade of Lancashire and Cheshire had a very thin time indeed. It was almost impossible for factory and mill owners to make a profit at all. Those industries had been largely built up on loan capital, a part only of which has been subscribed in the first instance. When the bad days under competitive enterprise came after the First World War, to save the textile industry those uncalled monies were called up to the extent of£30 million, and in a very few years, because of continued bad conditions, nothing whatever could be seen for the great sacrifices some people had been called upon to bear. But now, in the spinning mill section of the cotton industry, we have price fixation; profits are again being made and, indeed, some sections of the cotton industry have been doing remarkably well. I should like some reference to be included in the Bill by which that industry could be brought under the terms of this Bill, so that, even though it is not selling goods bearing a trade mark, it shall not, because of its power, be able to hold customers at too high a price. On the other hand, members of my Party do not wish to see a condition of affairs under which there can be no unity or organisation in a trade. We are not anxious that it should be brought down to the level of the cotton industry between the wars, because that is bad for the working people and bad for the country. Therefore, we should like to see the Government taking a more positive line in this Bill than is the case now.

Under this Bill and the main Act, action is taken only when a fault has been committed. Further action will be taken only when further faults are committed. We should like to see some machinery established which will enable the Government, or their representatives, to take action by which business can be put upon a positive footing. We agree that there must be a return on capital, because we think that capital is entitled to its due, whether it be owned by the State or by a private person. We want to see proper wages paid; we want to see continuous activity in trade. We are anxious about full employment. We desire to see fair and even prices. We want a sensible scheme of distribution, and for that purpose we want the State to enter into con- sultation with all concerned, so that in each industry, by organisation, we can be given a certainty of good wages and good business. As I have said, we do not propose to object to the Second Reading of this Bill, but we shall hope, when the Committee stage comes, to make suggestions to the Government which may result in the Bill becoming a little more valuable than, I am afraid, it seems to be at the present moment.