RESALE PRICE MAINTENANCE (Hansard, 28 January 1964)

§ LORD CONESFORD
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

§ THE MINISTER OF STATE, BOARD OF TRADE (LORD DRUMALBYN)
My Lords, in reaching the decision announced by my right honourable Friend the Secretary of State for Industry on January 15 the Government naturally took account of all the evidence available to them about the practice of resale price maintenance in this country and abroad. There have been a series of inquiries and reports into the practice from 1920 onwards. My noble friend's Question refers to the Lloyd-Jacob Report, the Report of the Committee on Resale Price Maintenance presented to the then President of the Board of Trade in 1949. This Com- 1078 mittee reported in a period when there was widespread resort to methods of collective enforcement of resale price maintenance which have subsequently been made illegal, and its Report concentrated primarily on this aspect of the practice. Its general conclusion was that the elimination of price competition over the greater part of the distributive trades was not consistent with the need for maximum efficiency and economy in production and distribution. There were important qualifications to the recommendation that, in general, no action should be taken to deprive an individual producer of the power to maintain the prices of his branded goods.
Naturally this Committee's qualified endorsement of individual resale price maintenance cannot be regarded as of permanent validity. The Report was made fifteen years ago, during the period of post-war shortage. Since then, we have had practical experience of the operation of an economy in which output and demand are progressively expanding.
I assume that in the second and third parts of his Question my noble friend is seeking information about the Departmental inquiry into the extent and effect of individual resale price maintenance which was announced by the President of the Board of Trade in, 1960. Apart from the fact that it is contrary to normal practice to publish reports to Ministers of Committees composed exclusively of officials, to do so in this case would involve disclosing information given to the Committee by trade associations and other persons in confidence.

§ LORD CONESFORD
My Lords, in thanking my noble friend for his Answer, may I ask him two questions? Since Her Majesty's Government showed in the Restrictive Trade Practices Act, 1956, that they agreed with the recommendation of the Lloyd-Jacob Committee quoted in my Question, is it not unfortunate that the reasons that have now converted them to the opposite view have not been published? My second question is this. Is resale price maintenance to be presumed to be against the public interest, even in those cases in which the Monopolies Commission or the Restrictive Trade Practices Court have found that it is not?

§ LORD DRUMALBYN
My Lords, I should have thought that in both cases 1079 the right course was to await the introduction of the Bill which has been promised by Her Majesty's Government, and which will give an ample opportunity of bringing out all the arguments on both sides.

§ EARL ALEXANDER OF HILLSBOROUGH
My Lords, may I ask the Minister whether the paragraph 163 quoted by the noble and learned Lord in his Question was an actual recommendation from the Lloyd-Jacob Committee? It is not a recommendation to which I, personally, have ever seriously objected in all circumstances. But is it also not a fact that a White Paper was issued by the then President of the Board of Trade, Mr. Harold Wilson, in 1951, in which he made clear the reasons why the Government of that day were in favour of bringing to an end certain resale price maintenance provisions, but with a qualification in the summary to which I am referring that provision should be made for certain cases to be specially examined? Up till now the Government have gone that far and propose, I gather from the Minister, to make some qualifications in the course of the legislation to be introduced. Because of my private views about resale price maintenance, I should much prefer to leave it there for the moment.

§ LORD DRUMALBYN
My Lords, I would agree with the noble Earl in the last part of his remarks, in that I think it is better to leave this question as it is for the moment—I am not quite certain whether this is what he meant—until the terms of the Bill are actually known. The noble Earl is correct in what he said about the White Paper that was issued—

§ EARL ALEXANDER OF HILLSBOROUGH
Command 8274.

§ LORD DRUMALBYN
—Command 8274, and presented in June, 1951. On the first part of his question, it is a fact that this was a recommendation of the Lloyd-Jacob Committee in paragraph 163. But I think I should remind your Lordships, if I may, of the next paragraph which said this. Producers are not in our opinion entitled to use resale price maintenance to obstruct the development of particular methods of trading, to impede the distribution of another manufacturer of competitive goods, or to deprive the public of the benefits of improve- 1080 ments in distribution. Public policy requires adequate distribution of goods with provision for such price reductions as are justified by low cost distribution, or by a regular policy of distributing surplus profit to the consumer.

§ EARL ALEXANDER OF HILLSBOROUGH
My Lords, I am much obliged to the noble Lord. With reference to the last portion of his answer, does it not rather follow that it would have been preferable to deal in amending legislation with all the outstanding questions concerning monopoly aspects referred to in the last part of the paragraph he quoted?

§ LORD DRUMALBYN
My Lords, this is obviously a question of the possibilities, and I think your Lordships are well aware of the possibilities of time and space that affect this matter.

§ EARL ALEXANDER OF HILLSBOROUGH
And of the Election.