HL Deb 27 July 1955 vol 193 cc1097-133

3.50 p.m.

Debate resumed.


My Lords, your Lordships are fortunate in having the noble and learned Viscount on the Woolsack to give such an exhaustive explanation of this most complex matter. I am sure that you would wish me to endorse the thanks that he has expressed to the Monopolies Commission for the exhaustive though, as I shall endeavour to point out, somewhat limited Report that they have produced. My excuse for being so presumptuous as to address your Lordships on this subject is that I have spent a commercial lifetime grappling with this almost intractable problem. I remember saying thirty years ago that at some time or another industry would have to justify at the bar of public opinion a number of the restrictive practices built up as a result of the economic transition through which this country had passed. The subject is vast, and those of us who know so much about it are apt to talk for a long time about it, but I am going to try to narrow down my remarks to within the compass of what I believe to be your Lordships' patience.

This is not a problem which can be viewed in the sharp colours, black or white. I think that is where a number of people make a mistake. This problem stems from the introduction into commerce in this country of the branded article which upset to an appreciable extent the age-old theories of Adam Smith. The branded article is here to stay it will grow. The branded article is the only guarantee of quality which the ordinary man in the street has to guide him. Sonic of us do not think it is as good as it might be, but at least it is better than products with no name which ate put forward as being "just as good" articles but which are sometimes rather shoddy. With the branded article has arisen price fixing and the price maintenance procedure; with it also has arisen a most vicious principle. In general terms, I say that British commerce has lost the art of competing with the one thing that really matters—the lowest possible price to the ultimate consumer. Competition has gone on in margins, margins and margins until the gap that divides the cost of production from the price which the ordinary man in the street is asked to pay has been widened out of all recognition and out of all justification.

I am going to try to address myself to this problem from the point of view of that unfortunate, unrepresented individual, the ordinary consumer. I think that my right honourable friend Mr. Herbert Morrison, made a profound statement in the debate in another place, when he said that Parliament, the trade associations and everybody, had really forgotten this individual, although he is the man who matters. All the argument I have heard upon this Report has rather tended to argue what is good for trade and industry, and not what is good for the national interest. I interpret the national interest to be the wellbeing of the 52 million people who are the backbone of the country. After all, trade and industry exist to serve the public; the public do not exist for the benefit of trade and industry.

When I address myself to this problem, I can do so only in very general terms, because in my view we have here a Report which does not really get to the heart of the problem. The Report admits it—the noble and learned Viscount, I think, read the paragraph. The terms of reference were narrow. Perforce, they had to be, because if the Commission had been given the whole problem to investigate, as I see it we should never have had a Report in the lifetime of the majority of Members of your Lordships' House. The Report says, at the end of paragraph 26: We are not asked to say whether we think the maintenance of resale prices is a good thing; we are asked to say whether collective agreement to adopt or enforce resale prices is or is not in the public interest. Having lived with this problem, I fail to see how you can judge whether it is in the public interest to have a collective enforcement of a retail price unless you have inquired into the method by which that price has been fixed. That, I think, is the kernel of the trouble, because, as the Report quite rightly says, there are many things outside that. There is collective level price fixing. But level price fixing is only the start. You have level price agreements, level tendering, level agreements as regards retail prices. The next step is to maintain them, and the next step again is to enforce them. I submit that you cannot finally make up your mind whether this is right or wrong until you have started from that basis.

The noble and learned Viscount has put before your Lordships three choices. In general terms, one is the Minority Report; the second is the Majority Report; and then there are the Government proposals. Anything that I say this afternoon is rather tentative, because it is among the Government proposals that there shall be introduced a Bill to give effect to these proposals. The test will be what is in the Bill when it is presented to Parliament. The greater test will be what is in the Bill when it leaves Parliament. I think the majority of the detailed discussions had better be centred around the Government proposals when we see them in the form of legislation. I think that may save us a lot of trouble. I reject out of hand the Minority Report. I can quite understand how it was written. And let this be a warning to Her Majesty's Government when they set up the Tribunal: do not have it full of lawyers who will look at things from the legal and academic viewpoints. The Minority Report was signed by three lawyers. Nor do I think that holus bolus acceptance of the Majority Report will get us where we want to get.

If I rightly understand the proposals of Her Majesty's Government—and I make that qualification—we are going to make a far more extensive stride forward towards solving this intractable problem in that way. From my knowledge I do not think that bringing the Majority Report into operation overnight would get to the heart of this problem. That course would leave a lot of loose and ragged ends. I hope that Her Majesty's Government are sincere when they say that they will take the whole of the practices set out in the Report plus a lot of others—and I hope the noble Marquess the Leader of the House will forgive me for saying that the test of that sincerity will be the Bill—and will refer those practices to the Tribunal. I hope that Her Majesty's Government will not fall into the cardinal error of trying to get agreed legislation; for if they produce a measure which is the lowest common denominator of agreement in industry, then that measure will not be worth the paper on which it is printed. The Government have to be bold and to lead.

I would accept the proposals of Her Majesty's Government as being preferable to the other two sets of proposals provided that the speed factor is such as satisfactorily to overcome the time lag in legislation. I say that because I honestly believe that the Government will go further than the Majority Report goes. I am not going to rule out that some of these practices are good; but some are evil. What has to be justified at the bar of public opinion, however, is how these prices are arrived at before they are fixed and maintained. If industry is told that before we grant them power to maintain their prices we have to be satisfied that those prices have been fixed in the public interest and publicly, before a Tribunal sitting in public session, I do not think there will be much worry with a lot of investigations; they will automatically go by the board.

As things are to-day, and in the light of price-fixing to-day, I cannot find it in my heart to subscribe to the principle of collective resale price maintenance. This is not a cynical expression, but I believe that the majority of producers who are so enthusiastic in their support for resale price maintenance want resale price maintenance for the other fellow, not for themselves; having fixed their retail prices, they then, behind the scenes, give all these special rebates to selected purchasers until these who pay the price at which an article is advertised are in the small minority. Margins have widened to take care of so many selective purchasers that the gap between the cost of producing an article and what the public have to pay is now far too wide. Without any fear of contradiction, I would say that resale price maintenance has had two major impacts upon the economy of this country, both wholly bad: it has built up a huge redundancy and has attracted far too many people into the distributive trades. There are too many middlemen whose profits are fixed without competition, and this parasitical element have erected their toll gates along the distributive channels, paying little or no consideration to the economic needs of the country. Also, the practice has sheltered inefficiency. So far as the distributive trades are concerned, resale price maintenance has contributed more to inefficiency than has any single factor.

Level price fixing has kept alive in the production industries of this country more inefficiency than any other single factor. That cannot be good for the public economy. Advocates of collective resale price maintenance have to answer this question which I have never yet heard satisfactorily answered: when the ordinary purchaser pays the same price for an article in the biggest store in the country as he pays in the smallest village shop in a rural area, where does that retail purchaser receive the benefit of the supposed efficiency of the large-scale organisation? In productive industry it is an axiom that the more one produces, the lower is one's unit productive cost; but, through a rebate scale that has been introduced into distribution wholly and solely by a collective resale price-maintenance policy, the more that is sold the greater is the margin of profit.

Those are sonic of the arguments that the advocates have to answer. I say quite frankly that a good case could be argued in favour of resale price maintenance, if once the public were assured that the prices so fixed were fixed in accordance with the public need and the public policy. But—let us be frank about this—there was an idea years and years ago, when some of these practices first started, that it did not matter in industry what low wages were paid or what low conditions of employment existed so long as you could undercut your competitor. Those days have long gone by. So I leave collective price maintenance which, as it exists today, does not really operate. It is a myth to a large extent, because there are so many privileged purchasers that the man who walks along the street and thinks that the price he sees advertised represents the honest opinion of the producer of the value of the article displayed is deluding himself. There are many thousands of different classes of buyers all over the country who can always buy that article cheaper.

Now, turning from price maintenance to trade courts, I must say that I have never been happy about them. I am not going to say for one moment that they are operated unfairly. But unfairness is inherent in the system, as this Report quite rightly says. You get one law for the rich and another law for the poor; one law for the big and another law for the small. We have seen Press reports of the hounding of back-street traders for price cutting. The collective activities of these people would make no more impact on the economy of this country than sticking a pin in the hide of an elephant would upset that creature. These people have been hunted and caught by the most detestable method of the agent provocateur. I should like to see an attempt made to stop the practice where it has been carried on. It does not operate against people who are among the largest and most influential people in a trade. The manufacturer does not cut off his nose to spite his face: he could not afford to withhold supplies from one of his biggest and most influential purchasers. So I believe that resale price maintenance to-day as practised by trade courts is against the public interest.

Now I come to the individual. I believe I am right in saying that the Majority Report and also the Lloyd Jacob Committee came down against collective resale price maintenance but upheld individual price maintenance. I fail to see how you can prevent any man who produces an article from putting his name on it and saying who shall and who shall not sell that article and dictating the price at which it shall be sold, so long as the conditions of sale are legal. I do not see how you could say to a producer of anything: "You shall not sell your articles to people with ginger hair," if that producer so desires. I do not see how you could say that a man could not put in his sales agreement what conditions of sale he liked so long as they were within the law. But when it comes to his taking action in concert with his fellows to bring sanctions to bear, to bring economic pressure and forces of economic life and death to bear on people trading in this country, that is a different thing.

Would it be practicable for the law to be altered so that the individual could maintain his own prices? Very likely the answer is: "Yes, it would be." But a greater degree of equity would have to go into some of the sales agreements than are in them to-day. As I say, I think it would be possible. But would those concerned do it? I doubt it. The manufacturer would be afraid that if he took sanctions against one of his own big buyers and held up supplies, all his competitors would run round to that man in half-an-hour and sign him up. Such is the belief of a great many of these people in the real principle of resale price maintenance! So I think that until trade and industry can satisfy the British public at the bar of public opinion that the prices of these protected and price-fixed articles are arrived at in a proper manner and not unduly inflated against, if I may use the expression, the common man, I think it would be better if resale price maintenance were not allowed.

That, really, is the burden of what I have to say. With those general observations I should like to reserve my judgment completely until I see what are the Government's proposals in legislation. That will be the test. I want to see how they propose that registration shall work, and how they will get over the time factor. I tried to follow the noble and learned Viscount who sits on the Wool- sack very closely, and if I appreciated correctly what he said I can see that there can be a speeding up if it is done in one way rather than in the other. But I do not know whether it will not, even with speeding up, take a long time. I think the Government have really got to work this in batches. I do not like the expression "case by case": that savours to me of thousands and thousands. Batch by batch, and practice by practice, might be better. If they will do that, and if they will see that this Tribunal which they are going to set up has only one lawyer—I would have only one lawyer on any Tribunal—I think they will be on a course calculated to lead to good results. I say this with great respect to many noble Lords who are learned in the law. The chairman of such a Tribunal should always be a lawyer because there are such things as the practice of sifting evidence and ascertaining facts. The terms of reference must be far wider than the terms of reference in this document, and if they include power to inquire into these matters, and it is a condition that no trade or industry shall be allowed to carry on resale price maintenance until they satisfy the public about the method and manner in which the prices are fixed, I think we shall have made one more step in the economy of this country which will redound to the benefit of all its citizens.

4.20 p.m.


My Lords, as usual I am going to be short, but I should like to mention one or two matters about which I feel strongly. I am perturbed because the Government have brought this matter into prominence just now. As we listened to the extraordinarily clever and able speech of the noble and learned Viscount who sits on the Woolsack we must all have realised how complicated this question is. Already I have found, through my connection with the Association of British Chambers of Commerce, that there is a good deal of perturbation with regard to the future of our foreign trade. In view of the statement made in the other place, it seems to me that there is what I may call a Sword of Damocles hanging over the whole trade and commerce of this country. If the noble and learned Viscount is correct in what he said, it will take a long time to unravel the whole problem embodied in this Report.

I am not going to follow the noble Lord, Lord Lucas of Chilworth. He seemed to me to be almost getting to the street corner. He seemed to be saying, "Sweeten up the rich and down with the poor!"—almost in those words.


If the noble Lord thinks that I said that, either I spoke badly—I expect that was the fault—or the noble Lord has misconstrued what I said. By rich and poor, I meant large and small. I had no idea in my mind of money profits.


Then the noble Lord was referring to big and small firms and not to rich individuals—if there are any to-day—and to the less well off. I am sorry that I misunderstood him. The noble Lord threw a stone or two at the three lawyers who added a dissenting note to the Commission's Report. I have read the Majority Report and the Minority Report, and I am bound to say that I came down wholeheartedly, so far as my limited intelligence allows me, in favour of the Minority Report. I feel that we must bear the Minority Report very much in mind, in spite of the fact that three lawyers put their names to it. What I am most anxious about is that we should retain the foreign trade we have and not lose it, as we are doing to-day. I know that the noble Lord opposite, who referred to various habits of trade in this country, is well aware that there are two things at which we must aim. One is date of delivery and the other is price. My noble friend Lord Teynham will corroborate this because, like myself, he is a director of a shipping company. My own shipping company had a definite statement from one of the biggest shipbuilding firms in this country that they could not give us a date and could not give us a price for the construction of a new ship. So we were forced to buy elsewhere. We were quoted a price a great deal lower than we should have got here, and we were given a delivery date. In fact, delivery was three months before the date arranged.

I hope that noble Lords opposite will not think I am going to cast stones at them, but there is missing from this Report one reference which I think ought to have been included in it. I am all in favour of trade unions, but I am perturbed at the situation of members of the trade unions at the present time. I am all against unwarranted and wrong restrictive practices and surely the trade unions should have been included within the ambit of this examination of the problem, because, if I do not completely misunderstand the word "monopoly," they are probably the most powerful monopoly in the country. I find it difficult to define a monopoly, and I should like the noble and learned Viscount to tell me the real definition of a monopoly. Where State monopolies have been instituted, with the possible exception of the Post Office, undoubtedly they have been a ghastly failure. The results have been high prices and enormous staffs, and the wretched consumers get the worst of the bargain all the time. That is the experience we have had in the last ten or fifteen years. For goodness sake do not let us begin to go any further in that direction!

One of the things that worries me is what a big firm—a rich firm, as my noble friend opposite likes to call it—is going to do, in view of this position. They get the offer of big business abroad and their foreign business is very material to the business they are doing here. In view of the statement made in another place, I can understand the big firm asking themselves, "What are we going to face? An Act is going to be passed which may stop some of the methods by which we have been doing business for a great many years. What is going to be the effect on the business that is offered to us to-day?" I am worried about this matter, because I know that it is in the minds of many big firms who do big foreign business. We know that every week and every month competition is increasing, as the world is recovering from the effects of the war.

I would ask noble Lords opposite to bring the trade unions right into the middle of this problem, because they are probably the most important element that should be considered in discussing it. Yet, so far as I can see, the trade unions were not mentioned in the terms of reference of the Commission. I think that is a pity. I think the trade unions themselves would appreciate it. The Trades Union Congress were consulted, but they were not brought into the middle of the picture in regard to monopolies and restrictive, practices. If they had been, I am sure that many members of trade unions would have appreciated it. That is all I have to say. I hope that this question will not be rushed—I do not think it can be. I hope that every step will be taken to make all these matters as clear as possible, and that the greatest publicity will be given to whatever deliberations take place in regard to this matter. Again, I should like to thank the noble and learned Viscount on the Woolsack for an extraordinarily clear speech on what is obviously a most intricate and difficult subject.

4.32 p.m.


My Lords, I should like to join the noble Lord, Lord Teviot, in emphasising the debt which we owe to the noble and learned Viscount, the Lord Chancellor, for his careful exposition of this subject. As we all know, technical advance has added greatly to the complications of manufacture, and it is not surprising that in the field of distribution and marketing many new devices should have been invented, not only, as the Commission point out, under the stress of the conditions in the 'thirties but because of the prevalent desire—I might almost call it an obsession—to be more scientific in all that we do to-day. No one will question the advantage of being scientific when you are dealing with matter, and it may be permissible to be scientific when you are dealing between individuals who have approximately, at any rate, equal freedom of action. But when you come to a body which has too great a concentration of power, you may have all the qualities of tyranny in their action. I would prefer not to try to define "monopoly," as the noble Lord, Lord Teviot, suggested, but rather to refer to those where there is too great a concentration of power.

I have always believed that it was one of the primary functions of government to hold a balance between conflicting interests so that there was no bullying and no tyranny exercised by one citizen on others or by a group upon the community. I do not think the Government can shirk this duty, for to do so would he to abdicate as Government. In another place the Attorney-General, referring to retail price maintenance, used these words [OFFICIAL REPORT, Commons, Vol. 543 (No. 27), col. 2062]: If we can find methods of enforcement which are effective without collective boycott and private courts, then, of course … it would be possible to prohibit such methods … if we cannot … then … we must secure adequate supervision and control over the exercise of these sanctions. With all respect, we on these Benches do not feel that that is a satisfactory statement of Government policy. I should not like to agree with the noble Lord, Lord Lucas of Chilworth, that even if the time factor is expedited the procedure suggested in the Minority Report may be preferable to the recommendations of the Majority Report. Nor should I like to follow him in the sort of investigation which he envisages, not only into restrictive practices but into whether prices are fair or not. It may take a long time to investigate particular restrictive practices, but if the price that is asked for any commodity is to be investigated, I do not know where our investigations are likely to end.

Surely the only fitting attitude for the Government to take is to say that certain methods are not permissible, and then leave business to adopt methods which are within the rules which the Government lay down to prevent the possibility of oppression or exploitation. Hardship in the trade is not the only issue, as the Commission have pointed out; nor is it even the most important issue. Few in the trade may complain: presumably to have taken such deep root these practices are not unremunerative, at any rate to those in the circle, and most manufacturers and distributors have been tempted inside. We all realise that the problem is complicated, because the practices complained of are so widespread. But I think it is obvious that mere registration of restrictive practices, followed by individual investigation, must take years, and will create the impression that the Government are not in earnest in this matter. I do not believe that this can be the wish of the Government, in view of the clear promises which were made by leading members of the Government in the recent General Election.

The Majority Report is quite explicit in this matter. It says: We are satisfied that all the types of agreement which we have examined do adversely affect the public interest. We ask the Government, therefore, to start by specifying certain practices as illegal. I do not suggest a wide range of practices, as the noble and learned Viscount, the Lord Chancellor, feared, and if exceptions are to be granted, I think they will be very few. My suggestion is that all forms of collective enforcement, including private courts, should be made illegal and I would include within the term "collective enforcement," enforcement by a large supplier where no alternative competitive supply is available.

I have great sympathy with the desire of the Attorney-General and the noble and learned Viscount on the Woolsack not to create more criminal offences. Prevention by injunction might well be tried; but if so, the procedure must be made simple and inexpensive—and at the moment it is neither. This would leave contracts between individual suppliers and distributors without any appearance of duress, and enforceable in the ordinary courts. I do not think one need feat what the noble Lord, Lord Lucas of Chilworth, suggested, because it would be a question not of stopping the supplies, but of bringing a claim for damages for breach of contract under agreement to supply; and to refuse to supply after such an action would, of course, be made a practice which would not be permitted. I think that this method of individual enforcement conforms to the trade union view to which the noble and learned Viscount the Lord Chancellor referred. At the same time as this first measure, is introduced, the Government could proceed, as is their declared intention, to require registration of restrictive agreements; and in our view this requirement should apply to all the restrictive practices dealt with in this Report. We hope that the Government will not limit this by themselves specifying only particular restrictive practices. They can be classified after registration in their order of importance.

I should like to say a word in support of what the noble Lord, Lord Teviot, said in the matter of grade union restrictions. While on this subject, surely the registration of restrictive practices so that the public may be the better informed, should be widened so that we have also the registration of other restrictive practices not included within the terms of reference of this Commission, and, in addition, any such practices imposed by the trade unions. In no case is judgment passed upon these particular practices by the requirement of registration. But surely the public have the right to know what devices are practised in the interests of a group or section of the community which may or may not be acceptable on their merits.

We must not lose sight of the bearing of this subject which we are discussing to-day upon the problem of checking inflation. It is not increased dividends that have to be attacked, as has been suggested in some quarters, if we are to check inflation. They may to some extent reflect the inflationary trend. But what must be ruthlessly attacked is restrictive practices of all kinds which artificially put up prices. I am sure that if what I have suggested is put into operation it would, in particular, have a salutary effect in the building industry. The present over-high costs in that industry are one of the greatest threats to an expanding economy. That is why I ask that the trade union restrictions should be considered alongside the restrictions practised by the suppliers of materials.

Finally, we should like to stress that, in our view, these restrictive practices which have grown up have been facilitated and multiplied under the cover of tariff protection and other devices to limit competition. This is particularly true of the large combines. The relation between tariff and reorganisation was made abundantly clear in the discussions with the steel industry in the 1930s. Tariffs facilitate the formation of combines which, when in being, use their influence to preserve them. A Board of Trade committee, when it was considering industrial efficiency in 1927, said that a protective tariff offers inducements to combination with a view to limiting competition. This comment has been more than justified by events. Subsidies plus compulsory marketing schemes have a similar effect, and I think, for example, that the trawler owners would find it difficult to justify before a Tribunal some of their actions in regard to fish. This tariff aspect should, we consider, be included in the terms of reference for further inquiries. The threat of the withdrawal of such protection might well prove a powerful additional deterrent to procedure by way of injunction.

I hope that one other aspect of this subject, which has not been before the Commission, will not be overlooked by Her Majesty's Government. There are quite a number of nationalised institutions, Government Departments, nationalised industries and corporations which keep approved lists of persons or companies for a number of purposes. Of course, integrity and financial capacity are proper tests for anyone to be put on an approved list, but I should like an assurance from the Government that they will issue a reminder to all these institutions that such lists should be overhauled from time to time and, in particular, that they should not be used in restraint of competition by a refusal to put a proper applicant on the list. One still hears stories of lists which were compiled on pre-war statistics, or at the time of the nationalisation of an industry. In a changing world we must avoid this sort of rigidity of which the Commission complained. I should like to see the Government taking the initiative by example in this matter. Monopoly and monopolistic practices can flourish only with the support or connivance of Government. The responsibility of seeing that these practices do not flourish rests squarely on the shoulders of Government, and the declarations of Ministers confirm that they accept this responsibility. We await action, and action which is adequate to deal with the abuses which have crept in and which have gone so far that they threaten the structure of free enterprise and competition in this country.

4.48 p.m.


My Lords, the noble Lord, Lord Grantchester, will not, I hope, expect me to comment on the further suggestions that he has just put forward to your Lordships, particularly the interesting ones that he brought forward in the latter part of his speech where he suggested a widening of the scope for investigation. I am sure we shall all read the speech to-morrow in Hansard with the greatest interest. Personally, I should like to address your Lordships briefly, and to confine my remarks to one or two general points. To do otherwise would get one involved in a maze of detail which would probably lead nowhere, for much of the detail one might feel like mentioning may be beside the point when we come to read the Bill which we understand Her Majesty's Government will be introducing, we hope in the course of the next few months.

I should like to make one general point first—it has already been made, but I think it cannot be made too often. It is that the matter which we are discussing is a commercial point. It is not a political issue, and it must only and can only be discussed on the basis of its being a commercial matter. I say that because, reading with some care the debate in another place on July 13, I was rather disturbed to find from time to time that a certain amount of what I could only describe as political prejudice seemed to arise. It was allowed to creep in on more than one occasion. One got the sort of innuendo that the motive behind the various schemes and practices which are dealt with in the Report must, of necessity, be sinister or immoral; that it was ridiculous to suggest that they were other than at times dishonest; that it was wrong to think that these schemes had in fact been originally conceived as a sincere attempt to enable some particular industry to give service to maintain its quality, perhaps to strengthen its opportunities for research, even to protect its employees; and that the overriding motive could only be—and here I am quoting from the OFFICIAL REPORT in another place—that some firms or groups of firms might make a bit more profit, suggesting that the only motive that actuates those who direct industry is the question of how much profit they can possibly make.

To discuss this important, technical matter on that line, or with that background, would be entirely wrong; and no one in your Lordships' House who has spoken so far this afternoon has got anywhere near it. But I think it is worth mentioning, because this matter is of great interest, not only in Parliament but in the country as a whole. One wants, however, to make quite sure that that point of view is not allowed to creep in. Indecently high profits are, obviously, indecent and immoral, but profits from industry, whether from nationalised industry or from private industry, are an essential part of our economy. If there were no profits, or if private industry, shall we say, were to follow the pattern of some of the nationalised industries in the way of profits, where would the Chancellor of the Exchequer be when he came to look for his revenue? Where would the Welfare State be? Where would the money come from for development, for progress, for reseach and for all the essential investment that is necessary if this country is to continue to exist at all?

I would say—and the writers of the Majority Report seem to agree with this point—that most of the schemes and practices referred to, at the time they were started, were conceived with sincerely held motives. I would go further and say that most of those schemes are to-day being carried on as such. Again, the Majority Report agrees with that, for in paragraph 25 it refers to many who feel strongly and sincerely that their arrangements are in the general interest. That is not to say that those schemes are right or wrong, black or white, or some shade of grey, but it means that it would be both unfair and ungenerous, and I think would be doing a disservice to all in industry—who are, after all, trying to earn a living and at the same time trying to assist the national economy—to question their sincerity. I think that is important. Whether the practices are right or whether they are wrong, they are not, as the noble and learned Viscount has said during his most interesting speech, the work of criminals; and to approach this matter as if they were—and, having listened to the noble and learned Viscount's description, I am still of the opinion (I may be corrected) that the Majority Report's suggestions, if they were carried through, would count all these people as criminals—would at once undermine all the good will that inspires the genuine attempts of industry to heed the exhortations of successive Governments since the war, of both Parties, to produce and export more. I believe that the psychological aspect must not be lost sight of in anything that Her Majesty's Government may decide to do.

It is because of that that I particularly welcome what I regard as the statesmanlike approach that Her Majesty's Government have announced towards this problem. Also, for the same reason, I welcome the refusal to be stampeded into hasty legislation which in my view, whatever it was, would be bound to be unfair to somebody. I have read a good deal of the Report and find it most interesting. I agree with other noble Lords who have paid their compliments to those who have done so much work to produce both the Majority and the Minority Reports, but what I have just been saying is strengthened, I think, by what the three eminent members of the Commission wrote in their Minority Report when they said (paragraph 255): The evidence and information put before us do not in our view justify so sweeping a condemnation. If one takes paragraphs 255 and 256 and considers them in conjunction with paragraph 25, where the Majority Report, in arriving at their conclusion, said: We have had rather to attempt to make broad general judgments taking into account both the views of those who have come before us and our own assessment of the effect of the practices …"— and there may be other paragraphs—I think it is clear that the only proper course for Her Majesty's Government is to proceed with a due amount of caution, though that is not by any means to suggest that what they do should not be both firm and effective.

Of course, there is much that we do not yet know about the details of the Government's proposals: the constitution of the Tribunal; its exact function; whether it is to be advisory or judicial; how it will work; what is the right of appeal that will be given to those industries whose practices are condemned. I have no doubt that Her Majesty's Government are hard at work on that point, and one knows that those who are interested in this in industry are also giving it a considerable amount of thought. I hope, and feel some confidence, that as a result of those considerations there will be opportunities before legislation is introduced for an interchange of ideas between industry and Her Majesty's Government. I may be wrong (the noble Lord, Lord Lucas of Chilworth, will correct me if I am), but I rather sensed from one remark he made that he feared that the Government might allow themselves to be too subservient to the views of industry. I do not know whether he meant that but I hope that that fear is unfounded.


That is precisely what I meant. I am afraid that the vested interests in this will bring sufficient pressure to make the Government give way on a number of points on which they should not give way. If the Government do not yield, then they will deserve the thanks of everybody.


I am grateful to the noble Lord and am glad that I put the question to him, because he has confirmed the point that I made. All I would say, speaking for myself, is that I have every confidence that, whilst industry may put strongly its point of view, Her Majesty's Government will take their own line when they see what is right.


I hope so.


There are, however, to my mind four general essentials that must be watched. First, nothing must be done to weaken the enthusiasm and energy which is now being shown by industry in its great task. That is not to condone any practice which may be shown to be against the public interest; nor is it to suggest that Her Majesty's Government should not press on with what it obviously becomes their duty to do. But it is to avoid losing what, to my mind, is a priceless national asset which we have at the moment—the degree of team work between Government Departments and industry, which I think is of immense importance when we come to consider our overseas trade.

The second point I want to make is that nothing must be done which might give an industry whose practices are condemned the feeling that such opportunities as it may be given for appeal are not genuine. The opportunities for appeal must not be suspect in the eyes of those who have to invoke them.


The noble Lord knows so much about this matter from the manufacturers' side that I should like to put this question to him. When he stresses the overseas position, is he arguing that we should have especially gentle treatment in regard to the agreement in this country, but that when he goes to New Zealand or Canada with his goods he need not do something similar to what is proposed? There is permanent legislation in New Zealand and in Canada to prevent this kind of collective restriction on price; action has been taken by the Governments concerned. Is the noble Lord arguing that he would be content to export to two such countries and to expect the restriction of these practices there, but that he wants them to be continued here?


I was not dealing with the point that the noble Viscount has in mind. What I was saying was that to-day, thanks to a considerable amount of mutual team work between Government Departments and industry, a great many of the difficulties that our exporters meet in their overseas trades are mitigated. That situation is obviously arrived at by good will on the side of the Government Departments and of industry, and we do not want to do anything that might upset that. That is not to say that one should pander to industry when industry is palpably doing something that is wrong. I hope that meets the noble Viscount's point.

The third point that I wanted to make is that every effort should be made to hasten a decision on any particular practice that may be questioned by the Tribunal. Again, that is not to suggest that there should not be adequate time for proper investigation. But with any period of investigation, there is a period of uncertainty for the industry, and it ought to be made as short as possible. A certain amount has already been said about this question of time. Will the procedure of registration and justification take too long? I would say that there can be no possible simple short cut towards solving this problem. To attempt one, I believe, would easily land us in far worse problems. Looking at the relatively small number of serious disclosures that the Monopolies Commission's individual reports have so far brought to light, I should expect that Her Majesty's Government's present plans would achieve more, and achieve it more quickly, by dealing first with those practices which more obviously call for justification than by some sweeping and more general legislation, which could only let loose a flood of argument and problems, and a good deal of heartburning as well, and would require years to unravel.

My last and fourth point deals with the question of what is the public interest. All I want to say on that point is that in laying down or deciding what the public interest shall be (I realise that Section 14 of the original Monopolies Act deals with this point) the system must be sufficiently flexible, not only as between one industry and another, or as between one practice and another, but also—and this is perhaps even more important—to take account of changing economic circumstances. My Lords, when the noble and learned Viscount was speaking, he did not mention those four points as such, but listening to what he said I got the impression that he already had them clearly in his mind. Therefore, I conclude by again saying that, in my view, Her Majesty's Government have so far taken the right step; it only remains to be seen how they go from there. Provided that they exercise wisdom, tact and determination to push through the essentials, then I believe that they are on the right lines.

5.7 p.m.


My Lords, I would venture to make only one or two comments, in view of the thorough way in which the points have so far been discussed by your Lordships. There is, I think, one most pertinent matter which runs through the whole of the debate and derives from the instructions given to the Commission before they made this Report—I refer, of course, to the exclusion of any question of the rightness or wrongness as such of individual price maintenance. It seems to me that this is the foundation of the difficulties in which we find ourselves. As has been said, these schemes, of one sort or another, derive mostly from the times when trade was bad and manufacturers and traders wanted to maintain the level of the value of their products as best they could, and over a period of years the system of practices in regard to which we have the comments of the Report has grown up. In two places, if not more, the majority of the Commission refer specifically to the fact that, while they are not permitted to discuss individual price maintenance, they are bound to observe that there seems to be no other alternative than the collective system which was remitted to them. The Minority Report makes the same sort of comment.

Throughout the Report one sees that the efforts of the individual manufacturer to maintain his own prices are bound to be considerably weaker than the efforts of a group acting collectively. I think it is agreed by most people that abuses have crept into the collective system and that many of them should be modified or prevented. But what I think we lack is a more positive suggestion as to how manufacturers may keep up their indi- vidual prices by any action which remains open to them, without resorting to the collective practices which are, to a greater or lesser extent, condemned by various bodies of opinion. To put it rather crudely, it is all right to maintain your price if you do it individually, but it is all wrong if you do it collectively. I am not disagreeing with those who say that there are abuses which ought to be checked, but I think that there is a gap in the thought which has followed from what appears to be the incorrect terms of reference to the Commission. Lord Lucas of Chilworth pointed out that had that limitation not been put on, too lengthy a period might have elapsed before any Report was received; but it seems to me very material that it weakens the deductions one can draw from the Report which we are discussing.

I think the noble Lord, Lord Lucas of Chilworth, made a most interesting contribution to this debate. As I understand it, his argument on prices as such was that before setting up a Tribunal or any other body which might be set up as to the necessity and propriety of some form of collective price maintenance system, the individual differences of prices had to be established—briefly, the margin between what the manufacturer receives and the purchaser pays. I follow the noble Lord as far as saying that the interests of the consumer must come first in these matters, but to that I would add (and I am sure the noble Lord would agree) that, while that is essential, it is also essential that industry must earn its keep.


Hear, hear!


I believe that if individual detailed prices or margins were discussed in relation to the approval or otherwise of price maintenance schemes, the matter would become so complicated as to be almost unworkable. With the noble Lord, however, I should like to see a simplification of the distribution system which might increase efficiency and in many cases reduce such margins. I feel, however, that that matter is beyond the scope of anything that may be done in the Bill now under consideration. Next to that, a difficult point will be the definition of that which is going to do harm in the practices which are to be considered. The wording of the present Monopolies and Restrictive Practices Act would seem unsuitable for this purpose. A definition must be found. Whichever body is appointed to carry out the work of this Tribunal must have terms of reference and instructions, and, naturally, must be given some lines on which to work. I find it very difficult to imagine precisely how a definition as between what is right and what is wrong in these collective practices can be reached.

It is fair to say that throughout the Report of the Commission, as expressed by both the majority and the minority, while the conclusions that certain practices are probably harmful are fairly drawn and seem to be right, there is, on the other hand, little detailed statement or evidence as to precisely what harm has been done. I point that out to emphasise the difficulty of wording that part of the Bill which is to be passed for this purpose. If the Commission had had more complaints before them, or more detailed criticism, it would have been that much easier. Nevertheless, I believe that Her Majesty's Government are on quite the right lines.

I do not take the same view as some noble Lords in regard to the time factor, because the object of the Bill when it becomes an Act will be, first, to discourage people from carrying out practices which are thought to be harmful. If they can be so discouraged without having to be brought to a Tribunal, or having to appeal in any way, so much the better. It is the public interest which matters. It would be a very important part of the procedure so to adjust the timing as to make it clear when the Act is passed that it has powers and teeth, but carefully to arrange the period so that the various associations, industries and trades can adjust their affairs to bring themselves within what appears to be the law under the new Act. I hope, too, that Her Majesty's Government will not listen too much to the suggestion of the noble Lord, Lord Grantchester, that the possibility of removal of tariffs should be held over the head of various trades rather like a stick over a naughty boy, warning them that if they do not comply with the Monopolies Act the tariff will be removed. Such action would be far too hazardous and hasty.

I do not agree that Her Majesty's Government are in any danger through consultation with industry. It would be wise to talk to the people responsible for the trade of this country, those who are organising the earning of this country's livelihood and who know these matters in detail. I do not believe that any leader of industry will approach this matter with any attempt to hoodwink or deceive the Government, and I have sufficient faith in this Government to believe that they would not be hoodwinked if that did happen. The best results can be produced by a measure which has been discussed with leaders of trade and industry. That course would have the great benefit of leading, rather than driving, people into the way in which the Government and the people feel these things should be conducted.

Let us get out of the atmosphere of thinking that these things are criminal, selfish or wrong. They were started and were necessary in their time, for very good reasons. They have become out of date and redundant and even, I think noble Lords will agree, harmful. But let us not think of them, in the way in which they have been referred to during discussions in some places, as being petty and selfish. I believe that the noble Lord, Lord Lucas of Chilworth, will agree that, in their time, these practices have done a great deal of good. I could quote a rather different but parallel example. The noble Lord, Lord Grantchester, referred to tariffs in connection with the steel industry. Had we not had the Import Duties Advisory Committee and steel tariffs I doubt whether we should have had as much steel as we had during the war. That is not, of course, a restrictive practice but relates to a maximum price imposed by Government powers; in a sense, however, the idea is not dissimilar. I hope that Her Majesty's Government will continue in the way that they have announced.

5.18 p.m.


My Lords, we have had a very interesting debate upon what is to me an intensely interesting subject and one which has been near to my heart for the last fifty years. Frankly, an attempt to get behind the difficulties involved in monopolies or restrictive practices in restraint of trade and to the detriment of the public weal has been a large part of my public life for nearly forty years. I agree with my noble friend Lord Lucas of Chilworth that the only basis from which Parliament can approach this subject is the position of the consumer. If the consumer can be justly dealt with, we may depend upon it that, in the long run, under any decent efficient organisation of industry and distribution, the traders concerned are bound to be satisfied. I have very strong doubts on the extent to which, according to the noble Viscount, Lord Ridley, some of these practices may have fallen to the point where their continuance is justified, or whether they may have done some good. That probably will remain a matter of difference of opinion between the noble Viscount and myself on this occasion, and possibly on many others when the Bill comes up for discussion.

First, the general interests of the consumer must at all limes be set before Parliament. In the history of Parliament, over the last 250 years, the position of the consumer has never been adequately represented. I say that in the presence of the noble Lord the Leader of the Liberal Party, because although Liberals often made good speeches, and sometimes did good things on behalf of sections of the community, the case for the consumer has never been really thoroughly maintained in Parliament in our modern times. If you take an analysis you will find some interesting facts as to the composition of Parliament. I have been refreshing my memory. I have had the impudence to read one of my own essays which I wrote nearly thirty years ago. It is entitled Parliament and the Consumer. One finds that Parliament has been made up largely of certain sections, especially on the representative side. History shows that a cross-section of its make-up reveals substantial proportions of representatives of the professions, the industries, directorships, finance and so on. And history shows, beyond doubt, that in general the bulk of our legislation has been for certain interests and not, in the main, for the general body of consumers.

I have been taking up that matter all my public life. I have striven always to get the position of the consumer properly stated and, wherever necessary, defended. For that reason, I have given most of my life to the Co-operative movement, and if it were not for the position the Co-operative movement holds, and for the fact that the Co-operative movement stated its collective case against these restrictive and abominable practices, you would not have had the body of evidence which has been given to the Commissions, one after another, which have been organised in respect of the different trades. You would not have had that evidence upon which to make as much progress as has been made towards this decision. It fell to my lot on more than one occasion to have to prepare and submit evidence to the various Commissions, but I think that never, until the days of these post-war Parliaments, has any really serious consideration been given in any Parliament to the question of the growth of monopolies and the fears for the consumer resulting from the spread of these general restrictive and price-fixing practices.

I do not want to spoil the effect of what my noble friend Lord Lucas of Chilworth said with regard to the setting up of tribunals in the future. He said that he hoped there would never be more than one lawyer on any such tribunal, and that the tribunals should be widely based in order to give them a comprehensive range. Your Lordships are aware that we had a remarkable opening speech by a great lawyer—one who has reached the summit of the just and reasonable ambition which might be entertained by any lawyer in the country. I was so much taken with that speech that I looked up a little passage in the essay to which I have referred. I wrote this when I was dealing with the constitution of Parliament in relation to the defence of the consumer. Because I want to put myself right with the noble and learned Viscount who sits on the Woolsack, so that he will understand that I am grateful to him for the way in which he introduced the debate, I am going to quote the passage. It was written in 1929, which makes it not too ancient as legal records go: Many brilliant lawyers first made a name in Parliament, and some of our most famous statesmen, past and present, have at one time been engaged in some branch of the legal profession, sometimes, to their credit, surrendering golden fees for public service and the relatively modest income of a Minister of the Crown. Generally speaking, too, politics has some reward to give to lawyers in employment in Crown cases, and in such remunerative advancement as may be found in appointments as Law Officers of the Crown, or even the summit of all lawyers' ambition, the seat of the Lord Chancellor on the Woolsack. That was a comment which I then made on the situation, and I would not withdraw from it after all these years. I should say, speaking both with reference to my noble and learned Leader and to the noble and learned Viscount who sits on the Woolsack, that they are among those lawyers with records of the greatest and most distinguished service who have given up very much larger incomes in order to render public service. So whatever more I say about lawyers in the course of my speech, I hope that the noble and learned Viscount will not think that I am making any personal references.

When I look at the Report of the debate which took place in another place on July 13, and analyse some of the speeches, I can see some grounds for the comment of the noble Lord, Lord Lucas of Chilworth, on lawyers, because I found a division of opinion on both sides of the House; and those who were usually defending any kind of encroachment on the consumers' rights and who would see these practices continued were frequently lawyers. If I have any wide and general criticism to make with regard to the kind of policy which the Government now propose to adopt, it is that this is going to be a fine thing for the lawyers—it really is. There is going to be one long process of getting counsel and other people to justify what is done in these individual cases. It is all very well for the noble and learned Viscount who sits on the Woolsack to say that it is a great mistake to think of making these various practices the basis, as it were, of a crime, and to deal with them as criminal cases. I gather that he suggests it is very much better to deal with them, one by one, as civil cases. When we delve deeper and deeper into this matter we find that where big business is concerned we seem to be getting away from some of the primary principles on which the old law and the practice of industry under the law were built up.

I am sure that the noble and learned Viscount who sits on the Woolsack, like myself, must be a member of some City Guild or Company. We look back into history from time to time to see how we have progressed, and in this connection I am going to quote again from my own little writing of years ago because it refreshes my memory. I see that I wrote this: It is evident from a study of our English history that the consumers' interest was by no means overlooked in the Middle Ages. Our ancestors of that day regarded as essential an ample supply of pure food. Every town had its Assize of Bread and Ale, which fixed standards of quality, measures, and, in most cases, price, and there is a record that the Government of 1266 issued an Act which enforced the local assizes and fixed a general price. I made a bit of a study of this matter. I am a Warden of the Bakers' Company, and I find that at one time we were charged with the duty of the assize of bread. In regard to justice to the consumer they were then far and away ahead of Parliamentary practice to-day in dealing with those practices. I further wrote this: In those days the view was held that there was a 'just price' for commodities which would ensure an honest living to the producer, that you were not justified in compelling the people to pay more for necessities in time of scarcity, and that no commercial crimes equalled those of the forestaller and regrator. If the noble Viscount Lord Ridley, had been here, I should have assured him that I did not want anything to be done to prevent a just price for the producer. Anyone who looks back on the war of 1914–18 and thinks of the £4,000 million which was the assessed amount of profit-making, the extra profit of profiteers in the First World War, knows what is meant by the passage: you were not justified in compelling the people to pay more for necessities in time of scarcity.… What is the modern man or company who withholds goods from the consumer in time of scarcity but a "regrator"? What are those who support collective price maintenance but "forestallers and regrators." I should like the lawyers to answer that. I suggest that it is the same thing.

Again, I wrote this: To corner or forestall the market by buying supplies before they reached it, or by purchasing large quantities to sell at a higher price (or regrating) was the last stage of commercial immorality. I do not think your Lordships' House should be quite so tender about regarding these things which are still being done, as only civil indiscretions or something of that kind. The basic law of our country in the old days regarded them as a crime, and they were so included in the administration of justice then—both local justice as it was exercised, as well as the national legislation as it gradually developed.

I look back at the history of my own, movement and I claim, and claim with justice, that the Co-operative consumer movement in this country has grown up to be the main bulwark of the consumer in this country. When I look at the record of Governments, while I am most anxious to fall in with the spirit of the noble and learned Viscount on the Woolsack, that so far as possible these matters should be dealt with in no Party spirit, I am bound to say that in my period of some thirty-five to forty years of public life, I have found little to encourage me to believe that we should get special treatment of the case of my comrades in the Co-operative movement from the other side. The Co-operative consumers' movement sprang from the injustice, the exploitations and the profound wickedness of the capitalist system in the early part of the nineteenth century. It was founded by a handful of cotton weavers—I hope that the noble Lord, Lord Rochdale, is listening because it was founded in the town from which he takes his title. They were poor because they were robbed, and they were robbed in buying their goods because they were poor. They founded their own co-operative society, in order that they might save themselves on the price. And the early history of the Co-operative movement was that as soon as a few local centres copied the Rochdale example they were boycotted. There was the immediate sin of boycotting and forestalling. The final result was the setting up of the Co-operative Wholesale Society to take the place of the boycotting wholesalers; and that Society has gradually grown until now it is the largest trading organisation in the whole country.

What is the experience of the Cooperative Wholesale Society? Let us take their evidence to the Commission—and, incidentally, on the question of evidence I should like specifically to put to the noble and learned Viscount, and to the noble Marquess the Leader of the House, this point: that if the Government are to introduce legislation, as apparently they are, in the autumn, it will be advisable to publish the evidence upon which this Report is based. Most of the evidence laid before them was written, although there are six or seven oral passages, marked with asterisks in the Report, which, from the names mentioned—though I am not going to mention them—I should judge to be most interesting. I think that when Parliament comes to make up its mind what is going to be the first major step in permanent legislation to deal with this great evil in our national life, it will want a record of all this evidence, because this question is going to be most controversial.

I say straight away, from the evidence submitted by the Co-operative movement, that toilet articles, groceries, cigarettes and tobacco, chocolate and sugar confections, stationery and books, hardware, bicycles and motor-cycles, motor-cycle accessories, electrical goods and electric lamps, radios and televisions, refrigerators and refrigerating equipment, dental goods and all kinds of developments from any one of these trades have all been subject, and are subject, to collective resale price maintenance. I find that that is confirmed by the Report of the Lloyd Jacob Committee. Co-operative consumers have proved clearly that in this very period during which this Government, on top of other Governments, have had to deal with a very serious financial position, and when it is vital to the interests of this country that we should be able to keep our cost of living as low as possible, because of its effect on the cost of labour in producing for export, the one place in which we could make a serious contribution towards redeeming the pledges of the Conservatives in 1951 is in passing on to the general public as great a part of the surplus between the prime production costs of articles and the final price to the consumers as is justified by the greater efficiency of modern distribution. There is no possible doubt that that is not being done.

I claim that between £400 million and £500 million of ordinary household purchases are reflected in the index of the cost of living which ought not to be there at all—they are what Professor J. A. Hobson, in his Science and Wealth, would have described as "surplus profit": not merely profit, but surplus profit. Anybody who knows anything of conditions in the trades I have mentioned knows that in many cases the prime cost of articles is no more than 30 per cent. or 40 per cent. of the retail price, and that it is a common thing in these industries to allow 50 per cent. to cover the wholesale and retail margin. How do we expect to deal with a problem like this, when, in spite of increasing outputs, the cheapening of the basic costs of production by the increased use of machinery and the extension of new systems of distribution like the self-service shop, the same final retail prices are still claimed from the consumer?

I will give an illustration to bring the matter home to noble Lords. The noble Lord, Lord Mancroft, who is going to reply seems to have some doubt—No? I beg his pardon. If we take the trade figures of the Co-operative movement for 1954, we find that their retail turnover was £792 million, distributed amongst 11,700,000 members, who have banded themselves together to get the most efficient supply of goods and services through their own organisation. After paying trade union wages—in the distributive trades only about 10 per cent. of employees outside the Co-operative movement are in trade unions—we have a surplus amounting to £52 million to £53 million. That is divided between a small fixed-rate interest on capital, averaging not more than 3 per cent., and the co-operative consumers, serving to reduce their cost of living. If this system were applied to the total distribution and production of goods for the home market, it would mean that my claim would be made good: that in the amount of money required to meet the cost of the standard of living some £400 million to £500 million is being dissipated in what J. A. Hobson would have described as wasteful profit, instead of being used to increase the spending capacity of the great majority of the people of this country.


My Lords, does the noble Viscount wish to intimate to us that the prices charged by the Co-operative stores all over the country are less to the consumers than those charged by any other organisation? I just want to know.


I am glad to have that question asked. Because the consumers in the Co-operative movement own their own business, they have the benefit, in the final adjustment of their income, over an accounting period of six months or a year, of a substantial addition to their purchasing power, because they get distribution of the collective results of their co-operation given back to them.


The "divi."


In the dividend, certainly. What we complain about in the Co-operative movement is that, while we have a great deal of production and we fix a price, our price to be charged by other people is always a maximum and not a minimum price. We do not ask any store selling our goods, who can sell at a lower price than we fix because their distribution is more economic and efficient, to stick to the fixed price. Our aim is the maximum price. Yet we say to every one of those traders and producers who go on with these collective price-fixing arrangements: "We want to buy your goods. It does not matter what your price is, we will pay it. We do not ask you how it is made up; we do not ask you what is the proportion of profit you have made; but we assume that in putting this on the market you have covered yourself in all your production costs for raw materials, for labour, for plant and overheads and in every detail, and have covered yourself in profit sufficient for you to be able to maintain and replenish your resources in your industry. If that is so, we are willing to charge that price of yours across the counter. But if we do not ask questions about your profit and what you do with it, or your method of distribution, you have no right in this free England to ask what we are doing with our surplus, especially when we use that surplus only for the benefit of the community, and we block out no single entry into that organisation under any conditions whatsoever." That is all.

There is nothing here that comes within the definition given by Professor Taussig. I may tell the noble Marquess the Leader of the House that I was astonished to find that in our wonderful Library in the House of Lords we had not a copy of Professor Taussig's works; it is a useful set to have about, and I wanted to consult it to-day. Professor Taussig made it clear in his definition what kind of things these are. There are two classes of monopoly: there is a public monopoly, owned on behalf of the State or the municipality, and the other sort of monopoly, which is a monopoly, says Professor Taussig, in order to provide increasing profits and to restrain trade in other directions for the purpose of those profits and for the benefit of a limited number of shareholders. That is the kind of monopoly we are up against; that is the kind of monopoly we are fighting. I can see no virtue at all in playing about with the situation any longer.

I now come to the more controversial questions, from my point of view, on which the noble and learned Viscount on the Woolsack endeavoured to instruct me during his clear and lucid speech. I am afraid he will find I do not accept all his views about the situation. The President of the Board of Trade, a lawyer (I would recommend both him and certain other lawyers in the House to go back to some of the elementary books on economy and trade, if they have not been in trade themselves: I could recommend Hobson's Science of Wealth or Hobson's Economics of Unemployment, and others) seemed to me to be in a great quandary up to almost the moment of having to face the House of Commons with a statement of policy. We have had faithfully produced for us this afternoon by the noble and learned Viscount on the Woolsack the differences between the majority and the minority recommendations. It is quite clear that the majority considered that all the practices concerned are against the public interest. They only admit, as they go on, that there may be some cases which are not—I think they are doubtful about it; and, to be fair, the noble and learned Viscount on the Woolsack quoted words which said that they had not heard any real evidence which would show that there could be many exceptions. They recommend that these practices should be banned by law, and that if anybody wants to continue all or part of the practice complained of they should be allowed to bring their case to a Tribunal: in other words, to ban, and then put the onus on the individual man who is doing this kind of thing to come to the Tribunal and state his case.

I was bemused and bewildered by the difference of emphasis put by the noble and learned Viscount on the time question between the two methods. He said he thought it would probably take far less time to have registration of the sort recommended by the President of the Board of Trade, and to take it case by case, because they would then fall into line, largely because a bit of Case Law would be established and a number of cases would drop away under that. Why does that not apply in the other direction? If you ban it by law now, and say that the individual, if he feels that he has a grievance, and he has a real purpose to serve the community by continuing the practice, should state his case, what is the difference? All the newspapers that I have seen which have been commenting on the subject seem to think that that would be much quicker. I listened carefully to the noble and learned Viscount, but I did not hear a single word that indicated there could be any saving of time in the other direction.


I am sorry to interrupt the noble Viscount, but this is an important point. Our proposal is, as he stated, that the person who wanted to justify his policy would have the right to be called to the Tribunal to do it. The difference is that the majority say that he would have to bring himself within certain exceptions, and it is the bringing himself within the exceptions which I said would encourage an infinite variety of cases.


I quite see the point of view which is adopted by the noble and learned Viscount, but I must say that he has not convinced me by any means. These practices are harmful and unfair to the consumer, and undermining to the ultimate general resources of the community. Instead of putting their profits into a limited area of the country, we want to have them spread over the purchasing power of the whole community, to try and erase some of this policy of wages chasing prices and always living with a state of inflation. I believe, therefore, that the case is for banning at the earliest possible moment those cases which, by a majority of 7 to 3, the Commission consider to be against the public interest. What I cannot understand about the President of the Board of Trade is that he says, first of all, with great élan—he is very proud of it—that he has accepted the general principle of the Majority Report. Then, when we read on, we find that he is not adopting the recommendation of the Majority Report, but he comes back to the Minority Report which, ipso facto, if he has accepted the principle of the Majority Report, is quite against it, and he says: "I am going to adopt the policy of the Minority Report and go in for registration"—registration which, I should have thought, from reading the recommendations of the minority, would have applied only to a limited number of cases. I gather, from the reply given to the interpolation by Mr. Harold Wilson in the other place on July 13 that it is almost certain that if the President of the Board of Trade is to keep faith with the House of Commons, then 600 to 700 cases will have to come in for immediate review.

The other thing I am surprised at is this. The President of the Board of Trade, in the course of this same statement in the same Parliament, referred to the support, as he thought, of the Financial Times for the point of view that he was adopting for the Government. The Financial Times certainly had articles in June and July about the Report, before any announcement was made by the Government, but I could find nothing in those articles which would justify the kind of policy adopted by the Government. I followed with great interest what would be the final view of the Financial Times. I am glad it is the Financial Times which I am quoting. I suppose if I quoted the Daily Herald it would not be held in the same esteem with regard to the substance of the evidence. This article is really remarkable. There is no time to read it all, but it would be to the instruction of your Lordships if you would read it in the Library. I will take the last part of it only. It says: When the Report was published these arguments seemed overwhelming. They were not, in fact, disputed in the Minority Report which had never envisaged the proposed register as anything more than a basis for the selection of agreements for detailed examination. Even if the individual inquiries should be made as brief as possible it must take a very long time to cover the whole ground. It has been estimated that there are 600 to 700 agreements which have to be considered. So far the Monopolies Commission has published eleven reports under Section 2 in the course of seven years, and that is at least some indication of the difficulty and delay inherent in this kind of case-by-case treatment. It is probable, then, that the Government's policy will prove unworkable if it comes to be applied. Now that is something I hope your Lordships will bear in mind. This great financial paper, of such Conservative erudition and stability, says about this matter It is probable, then, that the Government's policy will prove unworkable if it comes to be applied. They go on to say: The argument in its defence seems to be that no more workable system would be devised. Yet in fact the recommendations of the majority of the Commission would plainly be more effective. If trading agreements are against the public interest they should be made illegal. Provisions should be made for specific grounds of exemption, as the Commission suggested, but that would not mean a hearing of every agreement that came within the scope of the Statute. Only those agreements in which there was a prima facie case for exemption would require examination in detail. This was what the majority recommended, and the majority was right. As the Government accepted the principles of the Majority Report it should also now accept the one effective way of carrying them out. Now that is from the great financial and Conservative journal to which the President of the Board of Trade had paid such tribute, and whose articles had primed him towards his policy. What an amazing thing! Here is the case put by the noble and learned Viscount on the Woolsack today answered in advance.

I say only this in conclusion. I would be failing in my duty to my own movement if I did not say this. There has been no attempt by Governments of all kinds in the last fifty years to deal effectively with this matter. I think the first Government majority we had for Labour was in 1945, and that led to the passing of the Act under which all these proceedings are now taking place. But in this movement we are today suffering from the fact that whole ranges of articles are prevented from being supplied through a Co-operative store, although we are willing to meet every one of the producer's conditions except that we will not be interfered with regarding how we distribute our final surplus, any more than we ask him to tell us how he distributes his final surplus. The proprietary articles, and the trades that I have mentioned this afternoon I will deal with when I come to speak upon the Bill. In the meantime, I beg that the Government will put its own house in order and make quite sure that they have agreement. I close with this remark. In the course of the 1951 Election I took from a Luton paper a statement by Dr. Charles Hill. He said of the Labour policy then: I am against the Government policy on retail price maintenance, and I shall do my best to defeat it. We feel that the Government can do a great deal to meet the situation if they will follow the recommendations of the Majority Report accepted in principle by the President of the Board of Trade and bring in the ban on those practices straight away.


My Lords, as your Lordships will know, there is a Royal Commission at six o'clock, and I beg to move that the House adjourns during pleasure and that we reassemble as soon as the Commission is over.

Moved, That the House do now adjourn during pleasure.—(The Marquess of Salisbury.)

On Question, Motion agreed to, and House adjourned during pleasure accordingly.

House resumed.