HL Deb 14 July 1960 vol 225 cc290-7

3.15 p.m.

THE MINISTER WITHOUT PORTFOLIO (THE EARL OF DUNDEE)

My Lords, this Order proposes to make illegal any arrangements under which importers of hardwood or softwood timber undertake to deal only with agents who are on approved lists, or vice versa. The Monopolies Commission, who looked into this question some time ago, reported in 1953 that, while there were no price rings on a national scale, arrangements of the type to which I have referred were not in the public interest, and they recommended that any such existing arrangements should be abrogated and that no new arrangements with a similar effect should be made.

In the following year, 1954, the Timber Trade Federation assured the Minister of Materials, who was then responsible for these matters, that these recommendations would be implemented, which in fact they were. But in subsequent years several complaints were again received from individual timber merchants, and the matter was referred again to the Monopolies Commission by the Board of Trade, who had by that time taken over the duties of the Ministry of Materials; and the Monopolies Commission gave their next report in July, 1958, just two years ago. They reported that the arrangements which had been objected to had, in fact, been abrogated, but that since then fresh arrangements had been made in the hardwood and softwood sections of the trade, but not in the plywood section, which, though different from the original ones, nevertheless had similar effects; and they recommended that they, too, should be abrogated. The timber trade assured the Board of Trade that those new arrangements had been made under a genuine misunderstanding as to the purport of the Monopolies Commission's original recommendations, and my right honourable friend the President of the Board of Trade has fully accepted that assurance.

A great deal of time and care has been spent in discussing this subject with the timber trade, because it was thought desirable that whatever action might be taken should have the agreement and the co-operation of the trade. It was finally decided, with the agreement of the trade, that the best course would be the issue of an Order under Section 10 of the Monopolies Act. 1948, and this Order, in paragraph 2 (1) makes it unlawful for any person to make or carry out any agreement or arrangement relating to the supply of imported hardwood timber or imported softwood timber having effects similar to the original arrangements. It also makes illegal retrospectively any agreements already entered into, but there is a proviso exempting any parts of such agreements which would be lawful if they had been made separately.

My Lords, this Order, which has the support of the trade—and we rely on them for their co-operation—was approved in the House of Commons last week. I hope that any of your Lordships who are interested in the matter have to-day managed to get the right copy of the right Order from the Printed Paper Office. I beg to move that the Order be approved.

Moved, That the Draft Monopolies and Restrictive Practices (Imported Hardwood and Softwood Timber) Order, 1960, be approved.—(The Earl of Dundee.)

LORD LUCAS OF CHILWORTH

My Lords, I can assure the noble Earl that I have procured the right copy of the right Paper, and that, as far as noble Lords on this side of the House are concerned, we shall not do one thing to prevent this Order from coming into operation, as we on this side of the House have argued for years that these restrictive practices, these price-fixing arrangements, should be done away with. But what I want to ask the noble Earl is this. It was in 1953—a long time ago now; eight years—that this matter was first brought to the attention of the Monopolies Commission. They said: What appears to us objectionable is not so much the Lists themselves as the agreements and undertakings by traders on the Lists to deal only with each other upon which the system rests. Our conclusion is that these agreements and undertakings operate against the public interest. We recommend that they should be abrogated and should not be replaced by any other arrangements or undertakings having similar effects. The Government immediately entered into discussions with the appropriate Federation. It is clearly stated in the Report of the Monopolies Commission in 1958 that: … the Government intended to implement the recommendation that the agreements and undertakings between listed traders should be abrogated. … The Minister expressed the hope that the T.T.F. would put forward its own proposals for doing this as quickly as possible. The noble Earl has said that this matter dragged on for years because there was a genuine misunderstanding by the Federation about what was meant. I am not going to quarrel too much with him; he has his own opinion. But, on reading carefully all the evidence, I am afraid that I come to another conclusion.

The Report goes on to quote the Federation as saying: In view of the consequences which we consider would follow if the Commission's recommendation is implemented, we must reserve our right to reopen the matter at any time. The Memorandum referred to set out in detail the T.T.F.'s arguments to the effect that the Commission's conclusions were wrong and contrary to the weight of evidence. There was no misunderstanding at all. And this went on year after year.

In 1955, the President of the Board of Trade had his attention drawn to the fact that these agreements and restrictive practices were still being carried on. He did not take what I consider to be sufficient notice of the seriousness of the matter. When asked in another place whether he was aware that these agreements were being carried on in another way, he said: The Monopolies Commission did not recommend that the approved list should be abrogated. They recommended that exclusive dealing agreements and undertakings between traders on these lines should be ended. The Timber Trade Federation agreed to this and I am assured that no such arrangements are now in force. Yet in 1957, owing to the disquiet, the Board of Trade had to refer the matter to the Monopolies Commission again, and the Commission have reported as the noble Earl has said: the Monopolies Commission have said quite definitely in this document that these restrictive practices were going on all the time. I would ask the noble Earl why the Board of Trade dragged their feet all these years.

Our concern on this side of the House—and I am sure that it must be also the Government's concern—is that this kind of thing is going on to-day to circumvent the activities of the Restrictive Trade Practices Court. These federations employ the most skilled lawyers. If your Lordships want to read how they circumvent the regulations by private dinner parties and by not having written agreements, I commend this Report of the Monopolies Commission. Nothing is put in writing and the whole thing is carried on in precisely the same way.

This has gone on since 1953, and it is not until 1960, as the noble Earl admits, two years after this Report was produced, that the Board of Trade bring in an appropriate Order and make it strictly illegal to do any of these things. Why do two years have to elapse between the Report of the Commission and action on behalf of the Board of Trade?

As your Lordships are aware, on many occasions I have complained about the law's delay in connection with these restrictive practices. The noble and learned Viscount who sits on the Woolsack and who was responsible for setting up the courts under the Restrictive Trade Practices Act, will remember the disquiet we voiced on this side of the House. Here is a classic example of circumlocution, from 1953 to 1960, before definite action is taken by the Government to bring to an end restrictive practices affecting 95 per cent. of our imported hardwood and softwood. All these years elapse before the Government bestir themselves to do anything. I hope that the noble Earl will take note of w hat we have to say about this. There can be no excuse for it, except perhaps dilatoriness—that is the kindest and politest expression I can use.

3.27 p.m.

LORD EBBISHAM

My Lords, this is the first time I have ventured to address your Lordships, and I should not now have inflicted myself upon the House had it not been for the speech of the noble Lord, Lord Lucas of Chilworth, which I thought laid a certain portion of blame on the Timber Trades Federation. Of course I stand to be corrected if that is not so. I must say at once that I myself have no connection whatever with the timber trade, but I do know that members of that trade have been much concerned at the way in which the question of agreements and undertakings between lists of importers and agents have been treated in certain quarters ever since the Monopolies Commission published their Report in 1953.

The noble Lord, Lord Lucas of Chilworth, mentioned in his speech the question of price rings. Headlines such as "Timber Price Ring to be Busted" have no sort of relevance to this question today, as this is a matter not of prices but of agreements and undertakings between importers and agents in the trade to deal only with each other. When the timber trade abrogated those lists, although the Federation has never imposed—

LORD LUCAS OF CHILWORTH

My Lords, I will not interrupt a maiden speech—

LORD EBBISHAMM

Please do.

LORD LUCAS OF CHILWORTH

The noble Lord said that it is only a question of dealing with each other, of a "closed shop". I think the noble Lord should have added: "On certain terms and conditions."

LORD EBBISHAM

My Lords, so far as I know, that is all these agreements come to. There were lists of importers and lists of agents, and the idea was that each should deal only with the other members on the lists. So far as I have heard, there is no question of prices or anything else coming into the matter. Although the Federation have never imposed any sanctions after these agreements were abrogated, or even circulated the name of any member who may have traded with someone not on the lists, the Commission found (it is in paragraph 132 of their Report) that an arrangement need not be in writing or contain sanctions. The real sanction for any arrangements of this kind, whether formally provided or not, is in the known existence of a substantial body of common opinion in the trade. I quote from the Report: The Federation is at a loss to understand how anyone could prevent the existence of a substantial body of common opinion in the trade. This feeling was evidently shared by the Board of Trade, who pressed the Federation to accept alternatives to the making of an Order, such as the giving of a voluntary undertaking which the Federation would be expected to police, or the reinstatement of agreements, to be followed by their reference to the Restrictive Trade Practices Court.

The Federation, finally; in April, 1959, indicated that they would prefer matters to run their course and to let the Board of Trade make an Order. All subsequent delay was stated to be due to the legal complications in the drafting of that Order. Now that it has been published, it is obvious that the action it renders unlawful is far from clearly defined and there is ample scope for the repetition of genuine misunderstandings, to which the President referred, as to the exact meaning of arrangements or undertakings having similar effects to the original agreements. Nor does, or can, the Order deal with the existence of a substantial body of common opinion in the trade. The reasons for the pressure on the Federation to accept some alternative course, and for the long delay in the appearance of the Order, are perfectly clear. It is difficult to see how this Order will effect very much change in the day-to-day affairs of individual firms. But the timber trade is quite content with it, as it will bring to an end a long period of uncertainty during which the trade feels that it has quite unjustifiably come under something of a cloud.

THE EARL OF DUNDEE

My Lords, I am sure that your Lordships will wish me to convey your congratulations to the noble Lord, Lord Ebbisham, on his maiden speech. It is valuable not only on account of the exceptional knowledge which he is able to bring to your Lordships' service on this question, but also, I think, because he was drawn to his feet by the course of the debate and did not come here with a set speech ready to deliver. I hope that we may often have the pleasure of hearing the noble Lord again. I think what he has said has been most helpful in your Lordships' consideration of this subject and in explaining the answer to a number of questions which were put forward by the noble Lord, Lord Lucas of Chilworth.

I should prefer not to indulge in expressions of opinion but to stick as closely as possible to the facts. I would remind your Lordships that, according to the First Report of the Monopolies Commission, there were not any price rings in existence; and I do not think it has been suggested by anybody that there is not so much competition in the timber trade that this is likely to have any great effect on prices. It was simply because of the possible unfairness to certain individual merchants in carrying on their business that the Monopolies Commission made the recommendations they did. I think that what the noble Lord, Lord Ebbisham has said shows how important it is for the Board of Trade to take the greatest trouble to ascertain all the complexities of these questions, to carry the trade with them whenever they can and to win its co-operation. I am glad that the trade has agreed to this Order which we are now moving, and I feel sure that we may count on the co-operation of the trade in seeing that it is effective.

The noble Lord, Lord Lucas of Chilworth, said a good deal about delay. So far as we are concerned, the last Report of the Monopolies Commission was published only in July, 1958, and I do not think it is an excessive interval of time since then in which to have carried on consultations with the trade in order to make quite sure that we were doing them justice and not interfering with legitimate arrangements for orderly marketing and so on.

LORD LUCAS OF CHILWORTH

It is two years.

THE EARL OF DUNDEE

It is not quite two years, because it was agreed in the Spring that this Order should be introduced, and it was laid on the Table on June 21. But whether your Lordships think our anxiety to carry the trade with us has led to a somewhat unduly prolonged delay or not, I am glad that agreement has now been reached, and I hope that your Lordships will approve the Order.

On Question, Motion agreed to.