HL Deb 15 January 1964 vol 254 cc599-603

3.45 p.m.


My Lords, I should like, with your Lordships' permission, to read to the House a statement which my right honourable friend the Secretary of State for Industry, Trade and Regional Development has just made in another place. It will be convenient if I use his own words:

"With your permission, Mr. Speaker, and that of the House, I wish to make a statement on monopolies, mergers, restrictive practices and resale price maintenance. The Government's policy of modernisation requires the promotion of the greatest possible efficiency in all sectors of the economy. Competitive trading conditions are an important element in helping to ensure that the nation's resources are efficiently used. Effective legislative measures in this field are essential if the nation is to enjoy the benefits of a high rate of economic growth and stable prices.

"After a thorough review of the operation of the present legislation on monopolies and restrictive practices, the Government have reached the conclusion that this needs to be strengthened and extended. The Government are satisfied that the 'neutral' and uncommitted approach to monopoly on which present legislation is based remains fundamentally right and they do not propose to introduce into the law any presumption that monopoly or size are in themselves undesirable.

"There are nevertheless occasions when the public and the Government need to know how a monopoly is operating, in case intervention is necessary. The Government are satisfied that such enquiries are best carried out by an administrative tribunal like the present Monopolies Commission. But they have concluded that certain changes are necessary to make the Commission more effective, to give it greater authority, and to enable it to work more quickly. With these objects in mind the Government propose that the Commission should be strengthened and enlarged to enable it to work in groups. They also intend to enlarge their powers to implement the Commission's recommendations.

"I wish to deal now with mergers. Many mergers are beneficial to the economy. They produce stronger units, economies of scale, better management, better research and better sales organisation. The Government do not wish to place any obstacle in the way of such mergers, or of the great number whose effects on the economy are not significant. There is, however, a small minority of mergers which may lead to monopoly conditions damaging to the public interest. The enlarged powers to be taken by the Government to ensure that the recommendations of the Commission can be implemented should cover this type of case.

"I turn now to restrictive practices. It is clear that the Restrictive Trade Practices Act needs to be amended to deal with certain loopholes which are weakening its effectiveness: for example, information agreements on prices. The Government propose to close these loopholes.

"As it stands, the law makes no provision for monopolies and restrictive practices in the field of services. The Government think that this legislation should now be extended to enable them to refer what I might describe as commercial services to the Monopolies Commission. They would need to take powers to deal with any practices contrary to the public interest which the Commission's reports might reveal. The Government intend to present a White Paper dealing in more detail with the proposals I have outlined.

"I come finally to resale price maintenance. The Government believe that this practice is in general incompatible with their objective of encouraging effective competition and keeping down costs and prices. They have reached the conclusion that resale price maintenance should be presumed to be against the public interest unless in any particular case it is proved to the contrary to the satisfaction of a judicial tribunal. They therefore propose to introduce legislation this Session designed to bring the practice to an end, subject to the right to apply for exemption to the judicial tribunal to which I have referred.

"The Government believe that if this comprehensive series of proposals are put into effect the economy will be strengthened, to the benefit of all sections of the community, and to the advantage of our competitive position in international trade."


My Lords, I must thank the noble and learned Lord the Lord Chancellor for giving us this statement by Mr. Heath. I think it is a very important statement indeed. I notice that there is to be a White Paper issued—I believe it will be available to-day—and I think that that White Paper will require pretty careful study. The references at the end of the statement to the question of resale price maintenance may not satisfy everybody. There will be fairly extreme views on either side; but I think the basic idea of having any such questions resolved by a judicial tribunal might work out effectively. However, I should like to have a look at the White Paper myself.

Then, the statement is made that legislation will be introduced "this Session". In what sense are the words "this Session" used in this respect? Is it the Session that would normally end in July, or is it the Session that will be brought to an end at any moment which the Government choose to appeal to the country? I should like a little more detailed guidance as to what is meant by "this Session" in this context. Certainly the legislative powers that are required ought not: to be delayed, and the question therefore is whether it is intended to introduce this Bill within days or weeks, as a General Election might easily take place at any time from the end of March onwards.


My Lords, in reply to the noble Earl, who has asked me to elucidate the meaning of the words "this Session" in this context, I would say only that the Session usually ends about October or November. What I have said about "this Session" would certainly cover right up to the end of the Session, whenever that end may come. With regard to the other point which the noble Earl raised, the White Paper will not be published to-day: it will be published as soon as possible. It will not cover the proposals in relation to resale price maintenance, because they will be included in the Bill—which, again, will be published as soon as possible.


My Lords, the statement envisages, as I understand it, either administrative or, quite possibly, legislative action on a number of related but nevertheless distinct subjects. Will the noble and learned Lord the Lord Chancellor tell us whether, where legislation is required, that legislation will cover the whole of these matters, and not only resale price maintenance?


I do not think that the Bill, which will be introduced, as I hope, after not too long a delay, will extend to subjects other than resale price maintenance and the few other matters which are closely related thereto. The subjects relating to the Monopolies Commission will, I think, have to await further legislation. The proposal in relation to that, as I hope I have made clear, is to publish a White Paper containing the Government's proposals.


But does the Lord Chancellor realise that that means further delay? It may mean quite material delay, because there has been a considerable delay in the modification of the Monopolies Commission ever since it was established quite a number of years ago. Is it not a pity that these related matters should not be dealt with in the same legislation, rather than leaving it to a somewhat speculative future?


My Lords, I think that the legislation dealing with resale price maintenance would form a very comprehensive and good Bill. I think it would be covering too wide a field to include all the other matters—although, if I could be assured of the noble Lord's co-operation in getting such a measure through, I would certainly consider the matter with my right honourable friend.


That will depend upon what is in the Bill, will it not?