§ 2.40 p.m.
§ LORD LUCAS OF CHILWORTHMy Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
§ [The Question was as follows:
§ To ask Her Majesty's Government whether, in view of the appeal of the Prime Minister to trade and industry to keep prices down, they will repeal legislation which gives sanction to resale price maintenance, the object of which is to keep prices up.]
§ THE MINISTER OF STATE, BOARD OF TRADE (LORD DRUMALBYN)My Lords, my right honourable friend the Secretary of State for Trade, Industry and Regional Development has said in another place that he hopes to be able to make a statement before long about the Government's conclusions on resale price maintenance. This is a matter which affects the interests of all sections of the community, and it is necessary to weigh all the considerations involved. These naturally include the effect of resale price maintenance on prices.
§ LORD LUCAS OF CHILWORTHMy Lords, I am grateful to the noble Lord and thank him for the helpfulness of his reply, but will he bring home to his right honourable friend (whose long title I cannot remember) that it is because of the persistent and stubborn continuation of resale price maintenance that the pernicious system of stamp trading has grown? Does he not think that it would be far more fair to the trading community of this country if they were given the freedom to reduce their resale prices for the benefit of the public, instead of having to resort to what even the Consumer Council call 898 a gimmick, deluding the public into thinking that they are getting something in place of an honest reduction in prices?
§ LORD DRUMALBYNMy Lords, I am not certain there is a real correlation between the practice of resale price maintenance and the practice of giving trading stamps. I have the impression that there are parts of the world in which resale price maintenance is not permitted, but nevertheless, trading stamps are given. Nevertheless, I take note of what the noble Lord says and it is one of the considerations we will take into account.
§ LORD LUCAS OF CHILWORTHMy Lords, could I impress on the noble Lord that I am not talking about other parts of the world. I am talking about this country. The sole object of resale price maintenance is to keep prices up. Resale price maintenance is a sanction against those who want to pass on the benefit of their efficiency to the public—
§ A NOBLE LORD: Question!
§ LORD LUCAS OF CHILWORTHI am asking a question all the time. Is the noble Lord not aware that gimmicks such as stamp trading are the direct result of the inability of honest and conscientious retailers to pass on the benefit of their efficiency to the general public? It is correlated all the time.
§ LORD BARNBYMy Lords, before the Minister replies may I ask whether he would not agree that, in a free-enterprise country with a market-place economy—with respect to my noble friend whose Question says that resale price maintenance keeps prices up—the price at which an article is sold by a manufacturer is settled by the manufacturer? If it is not a viable price, it will automatically correct itself.
§ LORD DRUMALBYNYes, my Lords. I agree with my noble friend. I do not think one can regard these two matters as strictly correlated. It is quite possible to treat the trading stamps simply as a means of giving a rebate, quite irrespectively of whether or not the manufacturer has fixed the resale price for his products. I think we must treat these as problems that are connected though not necessarily correlated.
§ LORD LUCAS OF CHILWORTHMy Lords, if the noble Lord wishes to underline the freedom of people to charge what prices they like, why do the Government perpetuate a system which takes away the freedom of the retail trader to charge what price he likes?
§ LORD DRUMALBYNMy Lords, the provision of resale price maintenance is a long-standing practice, and it was, of course, strengthened by the Restrictive Trade Practices Act, 1956. I think the suggestion underlying the noble Lord's question is that, if we were to repeal Section 25 of the Restrictive Trade Practices Act, that in itself will necessarily bring entirely to an end the practice of resale price maintenance. With respect, I do not think that that suggestion is correct.
§ EARL ALEXANDER OF HILLSBOROUGHMy Lords, may I take it that it will be the policy of the Government, in their further inquiries, to make sure that they do not do anything to disturb the reasonable stability, and the wage, labour and employment questions wrapped up in the matter?
§ LORD DRUMALBYNYes. This, again, is one of the considerations which Her Majesty's Government have in mind. It must certainly not be thought that all the advantages are in favour of abolition of resale price maintenance, and that all the disadvantages lie with not abolishing it, or vice versa. There are advantages and disadvantages on both sides, and this is why the matter has to be so carefully weighed.