§ 3.19 p.m.
§ Amendments reported (according to Order.
§ Clause 6 [Agreements to which Part I applies]:
§ THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE HOME DEPARTMENT (LORD MANCROFT) moved, in subsection (1), after "between" to insert "two or more". The noble Lord said: My Lords, I am happy to say that the first Amendment on the order paper is short and non-controversial. It is purely a drafting Amendment and it paves the way to Amendment No. 6. I beg to move.
§
Amendment moved—
Page 4, line 38, after ("between") insert ("two or more").—(Lord Mancroft.)
§ On Question, Amendment agreed to.
§ LORD MANCROFTThe purpose of this Amendment is to deal with the doubts which my noble and learned friend, Lord Hailsham, and the noble Lard, Lord Saltoun, expressed at the Committee stage. They were puzzled as to why "conditions" as well as "terms" were not included. We tried to explain this to them, and I am afraid we only made 106 confusion worse confounded. We now hope that the best solution has been reached by removing altogether the words in brackets in paragraph (b), and I hope this will set their minds at rest. I beg to move.
§
Amendment moved—
Page 5, line 6, leave out from (" conditions") to end of line 6.—(Lord Mancroft.)
§ On Question, Amendment agreed to.
§ LORD MANCROFTMy Lords, this Amendment marches with Amendment No. 4. They are both consequential Amendments, albeit somewhat belated. I beg to move.
§
Amendment moved—
Page 6, line 9, leave out from ("association") to ("as") in line 11.—(Lord Mancroft.)
§ On Question, Amendment agreed to.
§ LORD MANCROFTMy Lords, this Amendment is also consequential. I beg to move.
§
Amendment moved—
Page 6. line 12, leave out ("those persons") and insert (" all persons who are members of the association or are represented thereon by such members").—(Lord Mancroft.)
§ On Question, Amendment agreed to.
§ VISCOUNT ALEXANDER OF HILLS-BOROUGH moved, in subsection (7), after the second "members" to insert "or to any other person or persons". The noble Viscount said: My Lords, in view of the fact that the noble and learned Viscount who sits on the Woolsack promised that he would look into the terms of my statement, and having regard also to what he had already told me last time, if your Lordships will permit me I should like now to move this Amendment formally and to reserve my right to speak after the Lord Chancellor has spoken. I beg to move.
§
Amendment moved—
Page 6, line 18, after the second ("members") insert the said words.—(Viscount Alexander of Hillsborough.)
§ 3.22 p.m.
§ THE LORD CHANCELLOR (VISCOUNT KILMUIR)My Lords, the noble Viscount has correctly stated what took place. I hope that it may be helpful if I make a further statement on the point which he raises. If noble Lords will refer to subsection (6) of Clause 7 they will find that it deals with specific recommendations made by trade associations to 107 their members; and if those recommendations relate to any particular class of goods, and are in respect of such matters as are described in paragraphs (a) to (e) of subsection (1) of the clause, they will come within the range and scope of the Bill. The wording of the Amendment is such that it would seek to extend this provision to recommendations when made by a trade association to persons other than its members. Your Lordships may remember that when a similar Amendment was moved at the Committee stage I said that if subsection (7) of Clause 6 needed tightening I should be happy to look into it. The noble Viscount then withdrew his Amendment.
As I see it, this Amendment is aimed at informal agreements between traders that they will not supply, particularly, the co-operative societies. In my view, this is not really a question at all of trade associations making understandings between traders of the kind described, even if they are not part of a formal agreement and no binding commitments are made. In that case, as I say, even if they are not part of a formal agreement and the commitments are not binding, such agreements are registrable under subsection (3) of Clause 6. This applies equally, of course, to any arrangement of the kind between one trade association and another—for example, a manufacturers' association and a distributive association. Incidentally, your Lordships should note that under subsection (3) of Clause 9 particulars of oral agreements must be furnished to the Registrar. If there are no understandings of the kind mentioned, but individual manufacturers—I repeat individual manufacturers—entirely of their own volition, decide not to supply certain customers or classes of customers, that is not a state of affairs with which this Bill is designed to deal. But if, in fact, such an attitude were adopted by large undertakings, and that attitude were imitated by smaller firms in the industry, it would, of course, be possible to refer the question to the Monopolies Commission under the Monopolies Act of 1948.
The noble Viscount asked at the Committee stage, whether it would be possible for a person who is not able to obtain supplies to approach the court and bring evidence showing why such a practice should be registered. The court which deals with the question whether agree- 108 ments are subject to registration or not is, of course, the High Court, and not the Restrictive Practices Court. Application to the High Court under Clause 12 can be made either by the Registrar or by any of the parties to an agreement to declare whether or not an agreement is one to which Part I of the Bill applies. If, however (and I hope that this may help the noble Viscount in his difficulties), any dealer considers that he is the victim of discrimination by reason of an agreement of a suppliers' ring which should be on the register and is not, he may, of course, approach the Registrar and give him reasons for thinking that there has been a default in registration.
Now I would ask the noble Viscount to consider (because I attach importance to this) the fact that under subsection (2) of Clause 1 the Registrar has the duty— not the right, the duty—of maintaining a register of agreements which are subject to registration under Part 1 of the Bill, and in pursuance of this duty he would be required to investigate any case where he had good reason to believe that the registration provisions of the Bill were being evaded. I think I ought to say at this stage, as has been said often before, that everyone realises the importance of the position of the Registrar. It is almost unique and a position of great importance. It is his duty to see that all registrable agreements are registered. I do not think the noble Viscount need have any fear that if any dealer finds himself in the difficulty I have mentioned and takes it to the Registrar he will find himself turned away. I have tried to explain the position. I hope that, in view of what I have said, the noble Viscount will see that this immediate Amendment would not help a position which is otherwise provided for in the Bill.
VISCOUNT ALEXANDER OF HILLS-BOROUGHMy Lords, I am obliged to the noble and learned Viscount for his long and detailed statement, which was what I required. I shall study it carefully before the Third Reading, of this Bill on Thursday. It does seem to me that in respect of those practices, which arise not out of formal agreements but out of quite informal agreements, the people concerned ought to be able, somewhere under Statute, to submit a case. It ought not to have to be left to accusers to go to the Registrar in a particular matter. 109 We are very anxious that if what is known to be an existing practice is found not to be registered, there should be a channel open to report the facts to the Registrar. I gather from what the noble and learned Viscount has said that it will be possible to do that. Of course, we should have been in much better fettle with regard to some of these matters if we had dealt with the whole question of these restrictive practices on the lines of the Majority Report of the Monopolies Commission. There seem to me to be so many loopholes by which it is possible for those receiving the necessary concentration of expert legal advice to escape from this clause that it very much undermines what would otherwise, no doubt, be the beneficial effect of the Bill in respect of collective agreements.
However, we shall have to prove this now in he making. The noble and learned Viscount may rest assured that when this Bill becomes law we shall watch two matters in particular. The first is in respect of gramophone records and similar goods, and the other is in respect of the extraordinary position in which, in a country which prides itself upon maintaining a free Press, an unwritten agreement can refuse supplies to a trader who has bought a newsagent's business, with all its goodwill, and thereby not permit him to carry on the business. That is an extraordinary position in a country which claims above everything else to be the country of a free Press—apparently free at the discretion of editors and publishers, but not free to disseminate knowledge with all the power the Press possesses. Perhaps I shall return to this matter on Thursday, after I have had time to study the answer which the noble and learned Viscount has been kind enough to give me to-day. I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ LORD MANCROFTMy Lords, this is a drafting Amendment. I beg to move.
§
Amendment moved—
Page 6, line 34, at end insert ("and for the purposes of this section, two or more persons being interconnected bodies corporate or individuals carrying on business in partnership with each other shall be treated as a single person.")—(Lord Mancroft.)
§ LORD LUCAS OF CHILWORTHMy Lords, the noble Lord has said that this is drafting: is it not something more 110 than drafting? The noble Lord may be right, but would he explain it to us?
§ LORD MANCROFTI am sorry if I hustled the noble Lord I was only "trying to get a move on". In the Bill as it stands, subsection (1) of Clause 7 exempts from Part I agreements to which the only parties are interconnected bodies corporate or individuals carrying on business in partnership with each other. This means that, for example, agreements between two interconnected bodies corporate and a foreign trader would not be exempt, although an agreement between a single United Kingdom company and a foreign trader would be. I am sure that the noble Lord would agree that: his would be anomalous, since it is the intention that throughout the Bill interconnected bodies corporate and certain partnerships shall be treated as single persons. As the noble Lord knows even better than I, this principle accords with the facts of commercial life. The Amendment removes the anomaly by applying the principle to all agreements falling within the scope of subsection (1) of Clause 6.
VISCOUNT ALEXANDER OF HILLS-BOROUGHMy Lords, I can see how the matter arises in the terms put to us by the noble Lord, but I should like the noble and learned Viscount who sits on the Woolsack to know that we are a little anxious about the results of this provision in Clauses 6 and 7. I am not going to expatiate on the matter, but before the war a number of books were published with regard to Dupont, Imperial Chemical Industries, Limited, and their German counterparts, which still exist. I was then in another place, and exception was taken to the secret restrictive practices then existing between these organisations. This kind of exception in the Statute seems to be given to such arrangements as they had then, about which these books complained, and will make difficult the success of this measure. I hope the noble and learned Viscount will keep this in mind.
§ THE LORD CHANCELLORMy. Lords, the noble Viscount has raised an important point and I am glad that he has done so. I think it ought to be borne in mind that at the time of which he was thinking, which I remember well, the companies he quoted were large-scale 111 monopolies. They are caught already by the 1948 Act, which was introduced by the Government of which the noble Viscount was a member, and I would remind him that under that Act the test is one-third of the supply in a considerable area of the United Kingdom. This matter has already been dealt with in a case before the Monopolies Commission and it has been accepted that a "considerable portion of the United Kingdom" applies to central Scotland. Therefore the working out of the Act of 1948 shows that monopolies of any considerable size may be caught. I think that deals with one of the major fears in the noble Viscount's mind. Without laying down the law, I think that the companies he mentioned, at any rate in relation to certain goods, would come within the definition of the 1948 Act, if any question arose. Obviously. I am not saying anything final on that subject, because one would have to consider what goods were in mind.
The point of this Amendment is the much more restricted one of an amalgamation betwen two companies, after which the companies act together and are one person so far as their work is concerned; and they should be treated as one person. I think everyone would also agree that a partnership should be treated as one person. The only reason I have taken up the time of the House is to make clear that scale monopolies are now covered and this Bill will not cut into the working of the previous Act in regard to that matter.
§ LORD BENNETT OF EDGBASTONMy Lords, may I ask whether the companies to which the noble Viscount has already referred are not all covered by the Companies Act and forced to produce one consolidated balance sheet? If so, it is clear that they are one company and this is perfectly in order.
§ THE LORD CHANCELLORMy Lords, I think that probably my noble friend is right, but I should like to verify that point and communicate with him.
VISCOUNT ALEXANDER OF HILLS-BOROUGHMy Lords, it really means, then, if these companies are under one consolidated balance sheet, that the intention of the Bill is to make a special cover to protect them against action for 112 restrictive practices. That has thrown new light on it.
§ THE LORD CHANCELLORMy Lords, I do not think that is what my noble friend meant and it certainly was not what I meant. This covers the case where companies which have amalgamated and become one concern make an agreement with somebody else. It does not mean that by becoming one concern they would be in any better position under the Monopolies Act, 1948. They would still have to answer for the fact that they had control of a supply of one-third of the goods in a considerable portion of the United Kingdom. So far as I can see, this Amendment is only to deal with the reality that two become one, if I may put it that way.
VISCOUNT ALEXANDER OF HILLS-BOROUGMy Lords, does that not mean that the giving of this protection in this Bill protects an amalgamation of a number of firms from any move against them on the type of collective agreements dealt with in the Bill? I admit that a consolidated organisation which is guilty of a large monopoly can be proceeded against under the Monopolies Act. This seems to be a special cover against the provisions of the Bill for this type of concern. I am rather anxious about that.
§ THE LORD CHANCELLORMy Lords, I am anxious to satisfy the noble Viscount. Really this is to cover the case, which I think is common sense, that you cannot make an agreement with yourself. It is only when the two become one that it applies. Perhaps the noble Viscount will again do me the honour of looking at what I have said, and if he sees any loophole, I shall be pleased to look at it.
VISCOUNT ALEXANDER OF HILLS-BOROUGMy Lords, certainly I will look at it again. It seems a doubtful proposition that because a holding company issues a consolidated balance sheet, as it has a number of subsidiary companies, some of which may be engaging in these practices and in which the share capital is held in part by the public and part by the controlling interest, they should seek protection under this Bill.
LORD SALTOUMy Lords, if there are to be many more Amendments like 113 this one, would it not be better to stop here and now, re-commit the rest of the Bill, and then take it quite shortly on Report afterwards? If noble Lords speak once, twice and again on every Amendment—that is quite out of order on Report stage—I think we ought to recommit the Bill.
VISCOUNT ALEXANDER OF HILLS-BOROUGHMy Lords, if that is a point of order., I should like to say that if on the Report stage of the Bill we are to be met with a number of Government Amendments for the first time, surely we are entitled to pursue them to a proper conclusion, to decide what is right in the interests of the nation.
LORD SALTOUNMy Lords, I am not in the least against what the noble. Viscount says; but in that case, we ought to re-commit the Bill.
§ On Question, Amendment agreed to.
§ Clause 7 [Excepted agreements]:
§ LORD MANCROFTMy Lords, this Amendment is consequential on the soidisant drafting Amendment to which your Lordships have just given a somewhat guarded approval. I beg to move.
§
Amendment moved—
Page 6, line 38, leave out lines 38 to 40.—(Lord Mancroft.)
§ On Question, Amendment agreed to.
§ LORD MANCROFTMy Lords, the next three Amendments, Nos. 7A, 7B and 7c, go together, and, with your Lordships' permission, I will take them together. They are concerned with the iron and steel industry. The first is little more than a drafting Amendment. The second, and the words to be inserted under the third Amendment, make it clear that it is the distribution of imported raw materials and products which is concerned. It is not the intention that restrictive agreements about the distribution of home-produced raw materials and products should be exempted from the Bill. The present wording understandably misled the noble Viscount, Lord Alexander of Hillsborough, on this point. I hope, therefore, that he will forgive me for putting down the Amendment, in the hope of helping him, arid not of obstructing business in any way. On the Committee stage the noble Viscount assumed that arrangements for the distribution of all iron and steel products were being exempted from 114 the Bill. As I have said, that is not the intention, and as a result of the Amendments I hope that the matter will be left in no doubt. The third Amendment is consequential. I beg to move.
§
Amendment moved—
Page 7. line 5, at end insert ("which has been approved by the Iron arid Steel Board and by the Board of Trade").—(Lord Mancroft.)
§ LORD LUCAS OF CHILWORTHMy Lords, this certainly makes it clearer than it was before. What I understand the noble Lord seeks to do here is to exempt any arrangement or agreement approved by the iron and Steel Board and the Board of Trade for the importation of any material from the exercise of any restraint under this Bill. But are we to understand that it does not cover any distribution of the products upon the home market? In order to make it quite clear, could the noble Lord confirm that?
§ LORD MANCROFTMy Lords, I think that that is so.
§ On Question, Amendment agreed to.
§ LORD MANCROFTMy Lords, the next Amendment is consequential on that which we have just discussed. I beg to move.
§
Amendment moved—
Page 7, line 8, leave out from ("undertakes") to ("as") in line 9.—(Lord Mancroft.)
§ On Question, Amendment agreed to.
§ LORD MANCROFTMy Lords, this, too, is a consequential Amendment. I beg to move.
§
Amendment moved—
Page 7, line 10, leave out from ("industry") to ("or") in line 12 and insert ("the importation of those materials or products, 07 the distribution of those materials or products when imported").—(Lord Mancroft.)
§ LORD LUCAS OF CHILWORTHMy Lords, I hope the noble Lord will not think that we are being pernickety about this matter. I asked him the first question for this purpose. If he will read the third Amendment, he will see that the words are:
the importation of those materials or products, or the distribution of those materials or products when imported.What the noble Lord said originally was that, while this covers any arrangement upon importation, it does not exempt the Iron and Steel Board from any breach 115 of this Bill when it becomes an Act when the products are distributed in the United Kingdom. Is that in line with what the noble Lord now seeks to put into the Bill under Amendment 7C? As I say, that says:the importation of those materials or products "—that he has explained—or the distribution of those materials or products when imported.
§ LORD MANCROFTMy Lords, I think I shall have to ask the noble Lord to give me notice of that question. I do not want to give him bad information on an important point like this. I should like to consider what he has said in the light of these new Amendments.
§ LORD LUCAS OF CHILWORTHMy Lords, I am grateful to the noble Lord. He will appreciate the importance of this matter.
§ LORD MANCROFTYes, I do.
§ LORD LUCAS OF CHILWORTHWhat my noble friend was afraid of originally was that this lifted the Iron and Steel Board outside the scope of this Bill, and we were somewhat disturbed. Then the noble Lord says: "We have clarified it. We did not intend that. It is only in so far as the importation is concerned." Now I have raised the doubt again. I am happy that the noble Lord will look at the point, and if he feels he can explain it in any different light, we can come back to it on Third Reading.
§ On Question, Amendment agreed to.