§ 3.19 p.m.
§ Order of the Day for the Second Reading read.
§ VISCOUNT MASSEREENE AND FERRARD
My Lords, in rising to move the Second Reading of this Bill, I should like, first of all, to give a short résumé of the reason why it is necessary. 101 The 1939 Act had, roughly, the same objectives. The trouble was that the 1939 Act was purely permissive and could not force local authorities to take any action. So it has been rather a failure. Also, the 1939 Act did not register riding establishments, and the local authorities often did not know where they were. The present Bill, once it gets on to the Statute Book, as I hope it will, will put bite and teeth into the law, which the 1939 Act did not do.
Before the war, the majority of people who rode horses came from the farming fraternity and the so-called leisured classes—rather a misnomer, I must say. Since they were country people, with a country background, one of the many things they were taught was horse management and the art of horsemanship. Livery stables were handed down from father to son, and to the average man who owned a riding school or livery stable in those days horses were second nature. To-day, things have changed. We no longer have our cavalry regiments, our yeomanry regiments and the excellent courses in horse management that the British Army used to teach us.
Since the war, there has been a great increase in the number of people wishing to take up riding. This is no doubt due largely to the hell on the roads, and also, I suppose, to the greater leisure that the average person now has. We find, for instance, that the membership of pony clubs has quadrupled since the war. It is also estimated that we now have 2,000 riding establishments, or schools, with 20,000 horses, catering for 100,000 weekly horsemen. Where the matter has changed is that a great number of these people now desiring to ride come from urban backgrounds—and all the more credit to them! It is an excellent thing. The trouble is that a considerable number of riding establishments have been started by people who come from an urban background and have no previous knowledge of horse management. I could almost say that it has almost become a question of "the blind leading the blind"; and the poor horse is the Aunt Sally.
This Bill is primarily designed to prevent suffering to horses in riding establishments, and, to a certain extent, to ensure that the customers of such establishments get a fair deal: that they are taught something, and that the horses they ride are 102 fit. The Bill has been through another place, under the capable hands of my honourable friend Sir Jocelyn Lucas, the Member for Portsmouth, South. It has the support of all horse authorities, including the British Horse Society, the Association of British Riding Schools, the Horses and Ponies Protection Society, the Royal College of Veterinary Surgeons and the R.S.P.C.A. All these organisations have done a great deal of groundwork on the Bill. Three years ago, the Horses and Ponies Protection Society published a survey made by Colonel Boultbee, who surveyed 1,200 riding establishments. The Report says that 30 per cent. of the establishments were in a deplorable condition, with the horses underfed and overworked, and that the people in charge had no knowledge of their job. The object of this Bill is to put that matter right. The Bill is also intended to be educational, because anybody desiring to start a riding school will have to learn about proper horse management, otherwise he will have his licence soon revoked.
If I may now turn to the Bill, your Lordships will see that Clause 1 has to do with the procedure of licensing. By subsection (2) a person must be over 18 before he or she can apply for a licence. Further, anyone who has been disqualified under any of the five Acts therein mentioned may not keep a riding school. On subsection (3) of Clause 1 I am afraid that we are in a little trouble, because the clause has not been drafted very well. As your Lordships see, that subsection requires that the local authority shall not reach a decision on an application for a licenceunless they have received and considered a report by a veterinary surgeon—and this is the important part—carried out by him within the period of twelve months immediately preceding the date on which the application is received …That does not make sense, because if someone initially applies for a licence the veterinary surgeon cannot have made art inspection in the twelve months preceding the date on which the application is made, because he would not know that the application was to be made. So when we come to the Committee stage, I shall put down an Amendment to put this right. The licence, as your Lordships see runs for twelve months; it has to be renewed every year, and it costs 10s. 103 By subsection (4) the local authority maintain their right to withhold a licence on any other ground. The vet, may say that it is perfectly all right to grant a licence, but the local authority retain their power to withhold a licence for any other reason—perhaps, that the site is on a bad corner or main road, or otherwise is badly situated, Subsection (4) also secures certain conditions of management. Perhaps I should draw your Lordships' attention to paragraph (b). Probably the word "shelter" is not very clear. It is rather an ambiguous word and, of course, can mean anything. For instance, the sort of shelter a New Forest pony or Highland pony would require would be quite different from the sort of shelter required by a blood horse. A New Forest pony would require only a tree or a shrub, whereas a blood horse, if it were out at certain times of the year, would require adequate housing. Probably the paragraph is saved by the word "adequate", because the veterinary surgeon has to decide whether the shelter is adequate.
Subsection (5) says that anybody who is refused a licence can apply to the local magistrates' court, and if the magistrates see fit they can issue a licence. Under subsection (8), if the owner of a riding establishment dies his representatives are allowed to have an extension of the licence for a year from the date of death, and if the deceased's estate is not then wound up they can have an extension.
Clause 2 deals with the inspection of riding establishments. The local authority do not have to rely upon their own officers completely to inspect the riding establishments. They can ask officers and veterinary surgeons from other areas to do it. In this context, perhaps I should explain that the Royal College of Veterinary Surgeons and the British Veterinary Association have, between them, so I am informed, drawn up a list of 4,000 vets., to whom the local authorities can apply. There are, of course, 7,000 veterinary surgeons who are qualified to inspect. It has been thought that of these 7,000 there are 4,000 who, by their great practical experience, are more qualified, and so the local authorities are to apply to them. There is nothing of particular 104 note in subsection (3) of Clause 2, in addition to what I have just told your Lordships.
Clause 3 deals with offences, and is quite straightforward. Perhaps I might draw your Lordships' attention to paragraph (b). Here the rider and horse are protected. If the owner has faulty equipment, a faulty saddle which either hurts the horse or causes an accident to the rider, the owner can be prosecuted. In Clause 4 are the penalties or disqualifications: a maximum fine of £25 or three months' imprisonment, or both. I should point out a printing error in this clause. It refers to Section 2(5): that should read 2(4). There is no subsection (5) to Clause 2.
Clause 5 empowers the local authority to prosecute, and there is nothing I need draw your Lordships' attention to in that clause except that the local authority cannot prosecute until they have had the vet's. report. Clause 6 is the Interpretation Clause, and here perhaps some of your Lordships may be a little confused. You may have the case of a farmer who has two or three hunters and who occasionally hires them out for hunting. Your Lordships may think that perhaps he should apply for a licence. But, of course, he is not a riding school; he is a man who has great experience of horses and, on the whole, provided he does not do it in a very big way, with thirty or forty horses, I understand that he does not have to apply. It is a question of the circumstances. There is nothing else of importance in the Interpretation Clause. Lastly, under Clause 8, the Riding Establishments Act, 1939, is repealed.
That, my Lords, is the Bill. I sincerely hope that your Lordships will give it a Second Reading. As I have said, riding is a recreation which is increasing to-day with the greater amount of leisure enjoyed by everybody. I am sure that the horse, if he could speak, would be extremely grateful, and also the rider would be grateful—although perhaps not all the riders, for now that these riding school horses will have to be fit probably quite a few learners will be "chucked off". However, we cannot help that—they have to learn the hard way. I beg to move.
Moved, That the Bill be now read 2a.(Viscount Massereene and Ferrard.)
§ 3.40 p.m.
My Lords, I am glad to be associated with the noble Viscount on what is, to me, a unique occasion: I do not remember having been associated with him in anything before. Moreover, it is a little surprising that I should be now, for I have never been on a horse in my life, whereas I imagine that the noble Viscount has spent most of his life, or at any rate a large part of it, on horses. But we are in complete agreement in the desirability of this Bill, which is for the protection of animals against cruelty, neglect and ignorance, and for the protection of those who use the animals, the riders, against injury, and even, on very rare occasions, loss of life through accidents arising out of riding horses that are unfit for that purpose. So everything we can do to ensure that our riding establishments are properly conducted, by persons fully equipped, and that the establishments are fully inspected is a very worthwhile thing, and I am very glad that the noble Viscount has introduced this Bill.
The noble Viscount pointed out that some 30 per cent. of existing riding establishments are thoroughly bad. As to the remainder, they are about half and half; some are very good and some not quite so good. But the fact that some 30 per cent. of the riding establishments are very bad, with horses existing under frightful conditions, is a sad reflection on a nation that prides itself on love of animals—and, on the whole we are animal lovers, certainly so far as dogs are concerned. But so far as horses are concerned, those in 30 per cent. of the riding establishments are existing under these awful conditions. This Bill, therefore, is quite timely.
The noble Viscount has explained in detail the purposes of the Bill and I do not propose to discuss them at any length. There will be a Committee stage. I am not sure whether the Bill was adequately discussed in another place. There was no discussion whatever, not even an introductory speech on Second Reading; it just passed "on the nod". There was a small Committee stage and a very short Report stage, in which a large part of the discussion centred on whether the registration fee should he 10s. or £5. As the noble Viscount has pointed out, the Minister gave an assurance that the whole ques- 106 tion of the kind of fees for registration would be considered by the Government, and that, I presume, is being done.
There are one or two points in the Bill to which I should like to draw attention. One is: is it really the most satisfactory way of carrying out this registration that small authorities—the enormous number of them—should be entrusted with the task? They cannot possibly have the officers; in fact, the Bill contemplates that they will not have them, because it talks about sharing them, and passing them round, borrowing and lending and so on. This being so, would it not he better to give the responsibilities to those authorities that are capable of carrying out the job and are likely to have within their own jurisdiction the necessary officers? As we know, there is a considerable shortage of veterinary surgeons, and it would be far better to have those who are available under the control of the authority which is responsible, rather than have them shared and going around from one authority to another.
I see that even the City of London is an "authority" under this Bill. Perhaps the noble Lord, Lord Derwent, could find out, if he does not know (I think I can give him the answer, anyway), how many riding establishments there are in the City of London and why they are put in as an authority under this Bill. Is it to satisfy their pride or is there some special reason for it? However, this is a matter which we can deal with in Committee, and I hope (although this is not a Government Bill, but I imagine they are very much behind it), that we shall have proper discussion on it and that the Government will consider very carefully whether they want to maintain the position of making the small authorities responsible for something which we know they cannot adequately carry out.
The other matter to which I should like to draw attention is that the noble Viscount stressed over and over again that a great many of the people who were conducting these riding establishments were townspeople who obviously could not know very much about horses. I agree with him. There was a case quoted by one honourable Member in another place of a girl of 15, still at school, who was running a riding establishment with 14 ponies in her spare 107 time. The report of the newspaper which was quoted was, naturally, that the condition of the animals was very poor, the stables were awful, the feeding and general management were very bad and the animals were in the hands of inexperienced people. This girl, assuming she can tidy up the stables a bit, when she is 18 will get a licence, unless she is disqualified by virtue of one of the provisions which disqualify people. But she will still have no experience, and it seems to me to be a fundamental weakness of this Bill that anyone who is not in terms disqualified can apply, pay 10s., and get a licence, provided he or she can get by with a reasonably satisfactory kind of stable.
Since some societies are carrying out training in the management of horses, I should have thought it ought to be possible to ensure that anyone applying for a licence at least has some qualification for the care of a riding establishment, which involves not only the welfare of the animals themselves but the safety of people who go to the establishments; indeed, it involves, further, the safety of traffic. I have seen horses which are a menace in traffic being ridden on main roads; horses which perhaps become suddenly uncontrollable or suffer pain because they are badly harnessed or shod—things of that kind and they can be the cause of very grave accidents. Yet there is nothing in this Bill to ensure that the person in charge of the riding establishment has any qualifications for conducting such a concern. However, I am sure that every one of us will be in complete sympathy with the main purposes of the Bill, and I am hoping that it will be possible, in the course of its passage, for it to be strengthened in the various directions to which I have referred.
§ 3.48 p.m.
§ EARL FORTESCUE
My Lords, as one who for sixty years has had most of his enjoyment on horseback, I welcome this Bill sincerely. Quite obviously, there are a large number of riding establishments which need no inspection and no licensing, and this Bill will be just too easy for them. It is the bad ones who should be got at. The trouble, from the horse point of view, is that it has always been a status symbol. In the Middle Ages it was a status symbol to 108 ride a horse in battle. Since then it has become a status symbol to own a racehorse and to own a red coat and go hunting. Now it is almost a status symbol for anybody to say that he rides a horse when on holiday. The more riding there is, the better; but we do want to get the riding establishments and the condition of the, horses better, and this Bill, I think, goes a long way towards that.
The noble Lord, Lord Silkin, made the point about qualification for running a riding school, a point I had in mind to bring up. I pick a hole in the Bill in that under Clause 1 anybody who wants to start a riding school can get an option on a yard and apply for a licence. A vet. would have to inspect the yard and any horses likely to be there But until the owner knew he was going to obtain a licence he probably would not have a horse. So a vet. having inspected the yard, there is nothing to prevent the man from getting a licence. I think it is most important that there should be some qualification in applying for the licence. Clause 1(3) says inspection of premises is to be carried out. Inspecting premises of the horses once a year, or something like that, will really not produce an answer at all. What is needed are spot inspections, and I should like to see something put in the Bill to the effect that the licensing authority must have a minimum of three or four spot inspections during the year. Spot inspection of a good establishment would obviously be perfunctory, but of a bad establishment it might be very searching.
Clause 1(4)(b) deals with the question of shelter. That, I think, may cause a good deal of trouble because everyone knows that no type of weather will drive a horse into an open shed; the only thing that will drive him in is flies. And a vet., according to this Clause 1(4)(c), has to certify adequate exercise and resting. How can he do that by going there one afternoon? It entails keeping logbooks and all sorts of records. It is not difficult to maintain a horse in a presentable condition—I do not say a good condition, but presentable condition—even if he has not been regularly and adequately exercised or adequately rested, and asking a vet. to sign to that effect after one inspection is, I think, asking too much. We have also got to see that adequate steps are taken for protection 109 of horses in cases of fire. I cannot imagine what should be done, other than to have doors open; you cannot have loose box sprinklers.
Under Clause 5(2), the local authorityshall not institute any such proceedings except after receiving and considering a report by a veterinary surgeon".The vet., as this Bill stands at the moment, is going to be very busy. Whether there will be enough good vets. who have the time to do all this work is, I think, very doubtful, and if the local authority cannot prosecute without getting a vet. I think a lot of people will escape a good deal It is not every abuse of a horse which can be detected only by a vet. If a horse is maltreated, a hundred and one people can testify to that, and the owner should be convicted, but by the time the vet. comes along—it may be two days after or half an hour later—there may be no evidence of that maltreatment at all. To rule out the evidence of such people as inspectors of the R.S.P.C.A., I should have thought a mistake. All these are points which will no doubt come up in Committee.
§ LORD LINDGREN
My Lords, I join with others in the general welcome of the Bill. The only point I wish to raise brings me in conflict with my noble friend Lord Silkin. When this Bill becomes an Act its effectiveness will depend upon the closeness with which the local authority can carry out the inspection and keep in contact with the riding establishment. I am not biased. But I am a member of a county council and have been a member of an urban district council, and Clause 6(4) defines "local authority" as having over 20,000 population. Many rural and urban authorities in which riding establishments are sited have a population under that figure; and it is my belief that it would be far better for the local authority to be the local district council, the urban, borough, rural district council, as is the case for the Animal Boarding Establishments Act and the Pet Animals Act. Both those Acts are administered by the district councils; conviction under them involve disqualification for holding a licence under this Bill. Therefore, I think they ought to be the local authority. In spite of this bringing me into conflict with my noble friend Lord Silkin, I give notice that I shall move an Amendment 110 the Committee stage to bring in those authorities.
§ 3.55 p.m.
§ LORD BALFOUR OF INCHRYE
My Lords, the noble Viscount who moved the Second Reading of this Bill said it had been given a Second Reading in another place. That is so, but I am quite sure your Lordships will agree that that does not absolve us from our responsibilities for examining this Bill very closely; at the present stage and in later stages. Like the association of the noble Lord, Lord Silkin, with the mover of the Bill—that amalgam that he said had not come about before—I should like to join as a third party and say that, of course, I support the general objectives of the Bill. Lord Silkin said he had never been on a horse. I cannot compete with this claim to have an anatomy unbruised by saddlery, but I am not a great exponent on a horse, I fear.
I think we should have a look at some of the propositions in this Bill in order to see how far we are going in its scope, and whether we are in fact encroaching on the liberty of the subject in a way to which we must give very careful attention before we give assent. In Clause 1 there is a demand that there should be suitable accommodation available at all times. I side with the noble Lord, Lord Silkin, in thinking that it is not right that the local authority—in fact the local veterinary surgeon—should be the person to decide what is suitable accommodation and what is adequate pasture and adequate provision for saddle rooms. For humans we have a Housing Bill that lays down certain defined standards of accommodation. We have an Offices and Shops Bill, I think, on the stocks. Animals are apparently to have a blank cheque to be filled in by the local authority, and we shall have different standards all over the country as to what is suitable accommodation for a horse and what is adequate accommodation in a saddle room, unless we alter the Bill in its present form.
As regards Clause 2, I would question the broad proposals of the right of entry into premises. There is a provision that the local authority representative can enter premises. The premises of a riding establishment may be in part used for horses and in part residential, and surely 111 the Bill should lay down that the part for which there is right of entry is specifically that part of the premises where the horses are accommodated. It is a Committee point which I hope will be considered by the mover and by the Government; nevertheless, it brings up that question which your Lordships and Members in another place, too, are always most careful to consider—the right of bureaucracy, the Executive, to enter the residential premises of any citizen of this country.
Clause 3 deals with control or management. Subsection (1)(d) reads:in keeping a riding establishment knowingly permits any person, who is for the time being disqualified under this Act from keeping a riding establishment, to have control or management of the keeping of the establishment.Does "management" mean management of a horse or of horses, or does it mean management of the whole establishment? I think it would be wrong to disqualify a man from the care of horses because he had been a manager who was disqualified for not keeping proper saddling rooms. This is indeed possible under the Bill as at present drafted.
These are Committee points, but I think they are points of some substance which Parliament should look at. The noble Viscount who moved the Bill with such eloquence confounded, I think it was, Oscar Wilde, who said that he knew a good horse when he saw one, but what he knew when there was no horse, no friend was ever able to discover. To-day, the noble Viscount has shown us, in the way he moved this Bill, that a man who knows a horse knows far more than that. While giving the Bill general support, I sincerely hope that on the Committee stage we shall look at these and other points raised by noble Lords, so that Parliament is not asked to pass something which goes considerably beyond the actual scope and purposes of the Bill.
§ 4.3 p.m.
§ LORD SOMERS
My Lords, I should like to add my support to this Bill. There are one or two small points that I want to raise. First, I should like to support those other noble Lords who have said that some qualifications for keeping an establishment should be included in the Bill. After all, this is 112 responsible work, for the sake both of the horses and of the riders, and I feel that the keeper of an establishment should have some knowledge of what he is doing.
The other point concerns Clause 4. The noble Viscount mentioned the misprint in regard to "section 2(5)". As your Lordships will see, that occurs twice. It occurs in subsection (1) and again in subsection (2). What each of them is 'referring to I do not know; but I should like to say that if they are serious offences, I think a maximum penalty of £25 is not enough. One knows that when the maximum fine is £25, the most that will ever be imposed will probably be about £10. Therefore, I would recommend something nearer £50 or even more, so that in practice one might obtain £25. That is all I have to say. Apart from that, I welcome the Bill and give it my full support.
§ 4.5 p.m.
§ THE MINISTER OF STATE, HOME OFFICE (LORD DERWENT)
My Lords, may I say briefly what is the Government's view on this Bill? I congratulate my noble friend on the way he introduced this Bill. I may say that in principle Her Majesty's Government think it will strengthen the law, and I hope your Lordships will give the Bill a Second Reading. As my noble friend has said, there are certain drafting Amendments that he will propose on the next stage, one of them a major Amendment. I need hardly say that the Home Office will give him all the help it can in regard to drafting.
The general remarks of other noble Lords, while welcoming the Bill—and, of course, I am not replying to this Second Reading debate; my noble friend will do that—seem to be on Committee points. But there are one or two matters upon which I think I should here and now express an opinion. The first is the point that the noble Lord, Lord Silkin, has raised, about the City of London. It is essential that, like other local authorities, the City of London should be included. If the City of London were not included, anyone who was not prepared to run a reputable riding establishment would at once move into the City of London. It is customary practice when all local authorities are mentioned to name the City of London. Otherwise, 113 as I say, we might unfortunately have a great many riding establishments in the City.
§ LORD DERWENT
It is, as the noble Lord knows well, a separate local authority. In discussing the points which they may bring forward at Committee stage, I think that some noble Lords have slightly misunderstood the Bill, and perhaps in particular this applies to my noble friend Lord Fortescue. In one breath he says that there ought to be more frequent inspection by veterinary officers and, almost in the same breath, he says that there are not really enough veterinary officers in the country to do the job as laid down in the Bill.
I think there is misunderstanding to this extent. All that we are saying about veterinary officers is that, before a local authority come to a decision in the matter, they must have had a report from a veterinary officer—this is provided for in Clause 1(3). But they can attach any other conditions to the granting of a licence. That is laid down in Clause 1. At page 1, line 23, the clause says that they maygrant a licence to that person to keep a riding establishment at such premises in their area as may be specified in the application and subject to compliance with such conditions as may be specified in the licence.I doubt whether one could get a much narrower condition laid down in this particular Bill. If a local authority know that somebody has never had anything to do with horses, they can in fact refuse the licence. What happens then is that that person who is quite new to horses has to apply to the magistrates' court. If the magistrates thank that the local authority have been unreasonable, they will order that the licence be granted in so far as these particular conditions are concerned. But, as would undoubtedly happen in the particular case which has been mentioned, if they think that the local authority were correct the magistrates' court would not override the local authority.
May I say one word, rather "off the cuff", about the private argument that has ensued between the noble Lord, 114 Lord Silkin, and his noble friend Lord Lindgren. Having heard this argument for the first time between the noble Lords, I believe, on balance, that the noble Lord, Lord Lindgren, is right. I believe that in this matter it is important, where a local authority are prepared to undertake this duty, that they should be, one might almost say, as small a local authority as possible. One must remember, as my noble friend Lord Fortescue has said, that it is not possible for a sufficient number of veterinary officers to go round all the time. One must remember, too, that the general public, in regard to complaints about horses being in bad condition and so on will want to go to their local member. If he is a county councillor he may be too far away; but if he is a man who lives in the next street it can be mentioned to him, and the local authority may then be prepared to send somebody round to look at the premises. I think that is really the argument of the noble Lord, Lord Lindgren.
May I go back to one argument that I was using, and refer noble Lords to page 2, subsection (4), at lines 12, 13 and 14, as to the circumstances in which a local authority can refuse a licence? Paragraphs (a) to (f) lay down what they must take into consideration, but earlier there are the words in brackets:but without prejudice to their discretion to withold a licence on other grounds".So they have complete authority to refuse a licence—which answers some of the queries noble Lords have raised. We can consider all the other points in Committee. I hope that your Lordships will give the Bill a Second Reading, for I believe that it will strengthen the existing law and I feel that the Bill is necessary.
§ LORD BALFOUR OF INCHRYE
My Lords, can the noble Lord say something about restricted right of entry?
§ LORD DERWENT
I understood from the noble Lord that he, too, thinks that that is a Committee point, and if he wishes to pursue it perhaps he will put down an Amendment.
On Question, Bill read 2a, and committed to a Committee of the Whole House.
§ 4.12 p.m.
§ Order of the Day for the House to be again in Committee read.
§ Moved, That the House do now resolve itself into Committee.—(The Lord Chancellor.)
§ On Question, Motion agreed to.
§ House in Committee accordingly.
§ [The LORD MERTHYR in the Chair.]
§ Clause 5:
§ Power of Court to exempt classes of goods
§ (2) An order under this section directing that goods of any class shall be exempted goods may be made by the Restrictive Practices Court if it appears to the Court that in default of a system of maintained minimum resale prices applicable to those goods—
- (a) the quality of the goods available for sale, or the varieties of the goods so available, would be substantially reduced to the detriment of the public as consumers or users of those goods; or
- (d) the goods would be sold by retail under conditions likely to cause danger to health in consequence of their misuse by the public as such consumers or users; or
- (e) any necessary services actually provided in connection with or after the sale of the goods by retail would cease to be so provided or would be substantially reduced to the detriment of the public as such consumers or users,
§ (3) On a reference under this section in respect of goods of any class which have been the subject of proceedings in the Court under Part I of the Restrictive Trade Practices Act 1956 the Court may treat as conclusive, against any person who was party to the proceedings under the said Part I, any finding of fact made in those proceedings, and shall do so unless prima facie evidence is given of a material change in the relevant circumstances since those proceedings.
LORD CHAMPION moved, in subsection (2), after paragraph (e), to insert:
() there would be a substantial detrimental effect on employment in the manufacturing industry or in the retailing industry".
§ The noble Lord said: We seek here to add a sixth gateway to the five gateways provided for the instruction of the Restrictive Practices Court and the Registrar as to registration of goods as exempted goods for the purposes of the Bill. The five existing gateways are in keeping with the general tenor of the Bill, which is to safeguard the interests of consumers and users; and what we are proposing here is a safeguard for employees, whether on the manufacturing or the retail side of the business. Under the 1956 Restrictive Trade Practices Act the Restrictive Practices Court were given guidance in reaching a decision as to whether or not a restriction was contrary to the public interest. As I understand it, under that Act the Court was expected to declare a restriction contrary to the public interest unless it was satisfied that the restriction produced one or more of seven beneficial effects. One of these beneficial effects was summarised by the Registrar in his report in 1961–62 as when the removal of the restriction would be likely to have a persistent adverse effect on the general level of employment in the area or areas in which the industry in question was carried on. What we are seeking to do here is to import into this Bill the safeguard for employment which Parliament intended in the 1956 Act. That was not, if I remember rightly, put into the Bill without a great deal of consideration. It was not lightly done, but was put in because it was considered that a restrictive practice may well have a beneficial effect on employment in certain industries.
§ If that was the case in 1956, it will be no less the case from 1964 onwards. I frankly admit that I have not searched the records of the cases reported upon by the Registrar to see in how many of them the employment factor has been used as an argument by the suppliers appearing before the Court, or if the Court itself has permitted the continuation of a restrictive practice on the ground of a possible adverse effect on the general level of unemployment in an area. But it needs no stretch of the imagination at all to see that if the abolition of resale price maintenance seriously affected a manufacturer's business, the effect on employment would have serious consequences in the locality 117 of the business and for the employees generally and the people in the area. What is true of the manufacturing side of any business is, of course, equally true of the retail side. I will not attempt here to rehearse the arguments that have been repeatedly used about this Bill or its effect upon small shopkeepers, but I stress that they are an important consideration; indeed, they figured very largely indeed in the discussions in the other place.
§ All we are trying to do by this Amendment is to make the possible effect on employment one of the considerations for exemption by the Court. Clearly, the Court would have to consider it in the light of the balance of advantage to the community as a whole as against that of the people engaged in the industry. It is the case that the public will benefit by squeezing some of our inefficient manufacturers and shopkeepers out of business, for, clearly, it prices are enhanced as a result of unnecessarily high costs the public, as the consumers, are bound to suffer. On the other hand, the employees are also a part of the public and we ought not lightly to dismiss their interests as being inconsiderable.
§ Clause 8 of the Bill as it now stands makes provision for trade unions representing the distributing trades to be heard by the Restrictive Practices Court. By that provision the Government clearly recognise that their interests in the matter ought to be considered by that Court. We say, too, that their interest ought to be recognised by their inclusion as one of the gateways—making the sixth gateway, as I am suggesting here. If the Amendment is accepted—and it ought to be accepted in the interests of employees who have their lives staked in an industry—I propose to put down an Amendment to Clause 8, permitting appropriate trade unions of manufacturing undertakings to be represented at the Court. That would naturally follow if the Government accept this Amendment, which we on this side believe to be a reasonable one. I sincerely hope that the Government will accept it, despite the fact that this gateway seems rather to alter the general tenor of the Bill and the five gateways as they at present exist. I beg to move.118
Page 6, line 11, at end insert the said paragraph.—(Lord Champion.)
§ 4.19 p.m.
§ THE MINISTER OF STATE, BOARD OF TRADE (LORD DRUMALBYN)
The noble Lord has raised three questions here. First of all, the parallelism between the provision in the 1956 Act and the provision in his Amendment; secondly, the question whether the abolition of resale price maintenance is likely to have an effect on manufacturing industry and retail industry in particular ways; and the third question relates to the general compatibility of a provision of this kind with the provisions of the Bill.
If I may deal first with the question of the 1956 Act, the noble Lord is, of course, quite right in saying that there is the provision which he quoted from the 1956 Act. He said that he was not aware how this had worked out in practice, but I am informed (not that this is conclusive) that in practice no agreement has been declared not against the public interest on this ground. As I say, that would not be conclusive in itself, but I would point out that there is really no parallelism between the two cases, because the purpose of that provision in the 1956 Act was surely to give recognition of the fact that the manufacturing industry for a particular product might be concentrated in a particular area. But, of course, by its nature the practice of resale price maintenance is spread all over the country. Moreover, in this Bill we are not dealing with the effect on manufacturers' prices; we are dealing with the effect on distributive margins, on distributive prices. So that, so far as the manufacturer is concerned, there is no parallelism. I recognise that the 1956 Act is not directed only against collective agreements between manufacturers; but is directed against collective agreements between wholesalers or even retailers—or anybody. But, as I see it, the protection given to employment in the 1956 Act was given mainly to protect manufacturing industry.
The second question is whether this is likely to affect "the manufacturing industry"— by which I take it that the noble Lord means the industry manufacturing goods of that class—or" the 119 retailing industry"—and presumably he means the same there: the retailing industry dealing with that class of goods. I should have thought that the prospect of unemployment arising in the distributive trades from the prohibition of resale price maintenance was pretty remote. Any redistribution of employment which might take place as the distribution system evolved would occur over wide areas, and probably over a considerable period of time, and any surplus labour arising should be easily absorbed in expanding sectors of the economy.
So far as the manufacturing industry is concerned, I should have thought that here the possibility of unemployment arising was even more remote. After all, if this Bill is going to have an effect it is surely likely to have an effect in reducing prices. It is not going to have an effect in reducing demand. If you reduce prices, you are more likely, if anything, to raise demand. Therefore, I should have thought that the effect of this Bill of lowering prices was more likely to stimulate demand than to reduce it.
On the third point, the question of the compatibility of the provision with the Bill, may I just say this? The Amendment departs from the principle that damage to the public "as consumers or users" must be shown. In this case, I should have thought the tailpiece would, in effect, cease to be applicable, because the applicants would not be required to show that any detriment to the public generally would arise from the ending of resale price maintenance. All they would have to show would be that there was detriment to those engaged in the trades concerned; that is to say, to the manufacturers and the retailers. Whereas, of course, one has to face the fact that the manufacturers and the retailers, and those employed by them, are interested parties in a case of this kind. I think that the proposal which the noble Lord is making in this Amendment would really be incompatible with the purpose of the Bill, which is to protect the public as consumers or users. For those reasons I feel that the Government would not be justified in accepting the Amendment.
120 Perhaps I might make just one further point. To some extent the interests of retailers and their employees are already covered in the gateways; that is to say, in so far as the necessary services would be likely to be reduced, then employment would also be reduced, so to that extent they are covered. Similarly, in so far as retail outlets would be likely to be reduced, so the retailing industry, too, would be protected in that way. I should have thought that that protection was sufficient and certainly that protection is compatible with the purposes of the Bill.
§ LORD SHEPHERD
When we put the Amendment down on the Order Paper, I think we did so because we were concerned about the possible effects of this Bill not only on the retail side but also on the manufacturing industries. I think our general conclusion, after two days in Committee, particularly after the assurances of the noble and learned Lord the Lord Chancellor, and the noble Lord the Minister, Lord Drumalbyn, is that the Bill is likely to have very little effect upon the management and marketing arrangements of our bigger industries. But I should have thought that, while these gateways are specifically directed towards the retailing side and to the consumers, some consideration should be given to the possible effects on employment.
I was reading the debates that we had in your Lordships' House on the 1956 Act. Members on the other side spoke very strongly on the consequences of resale price maintenance in the days when there was depression, and their feeling was that resale price maintenance should continue for the benefit of the manufacturing industry and the employees. I do not know whether those Members have changed their views; I suspect that they have. But there is no doubt that if there were real "cut throat" competition some companies within industries might well suffer. I would not go so far as to say that we should put a special provision in the Bill to protect them. But I should have thought that, when we are considering a change which may well affect marketing arrangements, some consideration should be given to the possible effects on employment.
I would not say that the question of employment should be a main gateway 121 in itself, but it should be something that the Court could, or should, take into account when considering the effects of the other five gateways. I imagine that the Court might be faced with a case being made on two of the gateways. They might then reach a position, shall we say, when they were not quite sure whether or not to give exemption, and they could then consider the possible effects on employment. It would not be used as a main gateway, but it should be something which they could take into account when making their decisions. I would not press the matter at this stage. I do not think it is now as important as it was when we first saw the Bill. But I think that the consequences to employment, perhaps in some of the smaller industries which might be affected by the Bill, is something that one should take into account.
§ THE LORD CHANCELLOR (LORD DILHORNE)
May I just say a word to the noble Lord? Of course one appreciates—I am sure he does—the difference between this Bill and the 1956 Act. I would say myself, that the prospect of unemployment arising in the manufacturing industries in consequence of this Bill is really very remote indeed. Indeed, it could take place only if the coming of freedom to retailers, which this Bill seeks to ensure over a pretty extensive field, were in some way the cause of a significant fall in demand. I do not myself think that that is at all likely.
Now if one comes to the position of the retailers themselves, and to employment in retail shops, then the point the noble Lord has in mind is, to some extent, certainly, comprehended in gateway (b) because that deals with the number of establishments in which the goods are sold by retail being substantially reduced. Under that gateway, the Court will be asked, or may be asked, to consider the possible reduction in the number of establishments, and no doubt the Court's attention will be drawn to the number of persons employed therein. Of course, at the end of the day, when someone goes through the gateway, one comes to the tailpiece, where the Court has to do a balancing operation. I do not think that a gateway such as the noble Lord proposes really can fit into the scheme of this Bill so as to leave 122 the Court with justiciable issues. This particular gateway really cuts across the other gateways and does not fit into the pattern of this Bill. Though I have said that, naturally, of course, we will consider what the two noble Lords opposite have said, but I do not think one can really put more weight on this particular element.
§ LORD CHAMPION
Having regard to that assurance, I will not further expound this Amendment. The reply is reasonably satisfactory in the circumstances. We realise that this is a different Bill, but we felt that there was some justification for at least stating a case on behalf of the employees and for having that case answered by the Government, which they have done today. We shall look to see whether the noble and learned Lord the Lord Chancellor is able, in the time between now and Report stage, to put anything down which we might find a little more satisfactory than the words which he has quoted from gateway (b) but, in the meantime, I ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
§ 4.33 p.m.
LORD JESSEL moved, in subsection (2), after paragraph (e), to insert:
() Export sales of the goods would be substantially reduced.
§ The noble Lord said: This Amendment is almost exactly the same as the next one on the Marshalled List, No. 26, which is under the names of three distinguished members of the Opposition. I am grateful for their interest in British exports, and I hope Her Majesty's Government will show equal enthusiasm. The purpose of my Amendment is to ensure that, if the abolition of resale price maintenance in respect of any goods were to harm their export sales, this should be considered as a ground for permitting the continuance of resale price maintenance in respect of those goods. What I am really asking for, therefore, quite obviously, is another gateway. As the Bill stands, harm can be done to exports without bringing the case within one or other of the existing gateways.
§ We are very familiar with the cliché that this country must export or die. It may be a cliché, but it is reality. Selling abroad is an 123 expensive business. We all know the difficulties. Competition is keen, and very often lower profit margins have to be accepted. Therefore a steady level of home sales is essential if exports are to be maintained. A continuing home demand also justifies the maintenance of substantial stocks, which are essential so that an exporter can give prompt delivery. I appreciate that each case will have to be considered and proved, but what I submit is that where it can be definitely shown that the abandonment of resale price maintenance will have an adverse effect on home sales, which in turn will be reflected in a diminution of export sales, then the Court should have power to exempt the goods. The manufacturer may find his case difficult to prove and the Court may throw out many applications of this kind, but I feel that this gateway should be in the Bill so that it can he used when it is really needed. I beg to move.
Page 6, line 11. at end insert the said paragraph.—(Lord Jessel.)
§ VISCOUNT MASSEREENE AND FERRARD
I should like to support this Amendment very briefly. I have a small manufacturing business, and it is my experience that if you get drastic price-cutting it affects your quality. I am quite convinced that the abandonment of resale price maintenance is in certain instances going to affect quality; and, of course, anything that affects quality does affect export trade adversely. Therefore, it is going to be to the detriment of the public in the widest sense. So far as I can see, among these gateways there is no gateway to cope with that. Another point I should also like to make is that today if you are to export you must have the most up-to-date plant, and you cannot buy the most up-to-date plant on the problematical extent of your export orders. You can go in for expensive plant, as the noble Lord, Lord Jessel, has just said, only on the basis of a steady home demand. I am quite con. vinced that in some instances the abandonment of R.P.M. is going to affect whether or not there is a steady home demand for certain goods. Therefore, in the interests of the public in a wider sense, regarding export trade, I support the Amendment.
§ LORD DRUMALBYN
Naturally, the Government very much welcome interest in exports and very much welcome the interest that those noble Lords who have spoken have shown in it: but is it really likely that this Bill will affect exports? My noble friend Lord Massereene and Ferrard has just been making the case that the abolition of resale price maintenance could affect quality. If it is going to affect quality, then the supplier can ask for the goods to be registered and can argue that case under gateway (a); in which event it would not be necessary to have a separate gateway for exports.
My noble friend Lord Jessel took a rather different line. He said that you must have a steady level of home sales if exports are to be maintained. I think it is necessary constantly to bear in mind that under this Bill it is the goods that are to be exempted, not the manufacturer. I was arguing under the previous Amendment that any tendency towards the lowering of retail prices is likely to stimulate demand rather than reduce it. This may not work evenly as between the goods of one manufacturer and those of another, but it is likely to affect the goods as a whole, and it is the class of goods as a whole in which the Court will be interested. It is that which will be exempted.
I should have thought that it is very doubtful whether, in practice, the presence or absence of resale price maintenance on a product in the United Kingdom could ever have any effect on the exports of that product. It is conceivable that if, as a result of the abolition of resale price maintenance, the market for the goods of that description as a whole were disrupted, then the export trade could suffer, too. But if there were any real risks of that kind of development, there would inevitably be a ground for arguing that the abolition of resale price maintenance would affect the public as consumers or users in one of these various ways already in the five gateways. So, on those grounds, I do not think there is any reason whatever to introduce another gateway dealing purely with exports. I hope that I have said enough to convince my noble friends that that is so, and that they will be willing to withdraw their Amendment.
I do not think my noble friend is quite correct in all the assumptions he has made. I take it that the object of the Bill is to reduce prices at the retail level. The normal effect of reducing prices at the retail level is to stimulate demand; and if you stimulate demand from a fixed supply it can have only one result: either somebody else must go short or you create a long order book. I can well visualise a state of affairs—perhaps where the retail margin is rather high at the moment—when intense competition between retailers on the passing of this Bill might result in a considerable fall in the retail price of certain goods: motor cars, for instance. In the past it has been shown by various Chancellors of the Exchequer that certain goods are remarkably susceptible to rises and falls in the retail price manipulated by means of taxation. If the Chancellor of the Exchequer is capable, by putting on or increasing purchase tax, of reducing the demand considerably; and, by removing the purchase tax, of increasing demand considerably, then surely the abolition of resale price maintenance may have precisely the same effect. Therefore we may well find that a manufacturer who is selling his full output at the moment may be faced after the passing of this Bill, with a demand from the home market for larger quantities of goods, which he can supply only to the detriment of his foreign sales.
I must admit that I find some of these provisions in the Bill extremely difficult to understand; and it may be that I do not understand them. But as I read Clause 2, it means that the manufacturer can refuse to supply people who come along demanding to be supplied on the same terms as other dealers. Therefore either he is going to break the law under Clause 2 or he is going to refuse supplies to his foreign dealers, or at least increase the length of their delivery. Therefore I think another gateway in this clause is very necessary.
§ LORD SHACKLETON
I think the argument we have had is very ingenious. I am not quite sure whether I would go the whole way in suggesting that the Restrictive Practices Court should, in this matter, act for the Chancellor of the Exchequer in using a kind of additional regulator; none the less, I think it shows, 126 as did the argument of the other two noble Lords, that there are additional considerations of a kind which are very difficult to visualise with any certainty. All concerned with this will agree that we are to some extent dealing in theory and, as the noble Lord has said, the particular gateways are themselves of a somewhat theoretical kind. If I understand the position correctly, it would be possible for a supplier to refuse to supply the home market under Clause 2 because (as was very clearly explained by the noble and learned Lord Chancellor) this would be a ground, and presumably a respectable ground—though I think it is perhaps not very likely. None the less, he might wish to do so; and if he did so, in order to achieve continuity and to build up an export market, it is open to him to do so. I think that disposes of that argument.
I should like to support this Amendment on the grounds advanced by the noble Lord, Lord Jessel, and the noble Viscount, Lord Massereene and Ferrard. It seems to me that, since there are certain gateways built into the clause, this is an additional one which the court might wish to take into account. It may be argued that the absence of resale price maintenance would have an effect on the quality of the goods; but the arguments brought forward might not by themselves be quite convincing enough for the Court to accept them. Indeed, so far as "the public" as consumers or users of those goods applies to the public in this country (and I shall be interested to know whether "the public" includes also the public at the exporting end), it may be that in this particular category of goods any decline in quality may be of less importance than in the export trade. It seems to me that it would be perfectly proper for a supplier in these circumstances to go to the Court and argue on more than one ground, and that the export ground might be the clinching argument. But at the present moment, as I understand it, the Court would not be able to take this into account.
I should like to suggest that something along these lines should be put into the Bill. It may be theoretical, but then much of the Bill is theoretical. It is a great deal less theoretical than some of the other parts of the Bill—and particularly the clause dealing with loss leaders. This 127 Amendment seems to me to be a great deal more justifiable than some of the things the Government have already done in this Bill. I should like to ask the Government to consider this matter again, bearing in mind that the export market may be different and that the arguments under the other gateways which might not apply in this country might apply abroad. On this point we could perhaps be assured as to whether the public abroad are covered under, say, paragraph (a); and finally whether it is not a perfectly proper additional ground which might be argued before the Court.
§ LORD CONESFORD
I should like to support the arguments put by my noble friend Lord Jessel and, to some extent, those put by the noble Lord, Lord Shackleton, in the speech that he has just made. The export trade of this country is of such overwhelming importance— and nobody realises that better than the Government and the President of the Board of Trade—that if there were a risk, through the abolition of resale price maintenance, of injuring the export trade, I am certain Her Majesty's Government would concede there ought to be this additional ground. It may be difficult to imagine the case where it could be shown that the export trade would be injured. In that event, very little harm would be done by introducing this as a ground which might be very difficult to satisfy but which, if it could be satisfied, would provide a very strong argument indeed for the exemption of the goods in question.
I listened very carefully to the reply of the noble Lord, Lord Drumalbyn. I agreed with him, of course, that in so far as the risk of the abolition of resale price maintenance is a risk of the deterioration of quality, then gateway (a) is relevant; but, for the reasons given by the noble Lord, Lord Shackleton, it is not conclusive. If gateway (a) is examined, it will be seen that it mentions the possibility of the quality being substantially reduced to the detriment of the public as consumers or users of those goods. My noble and learned friend will correct me if I am wrong, but I think it is clear that the reference to consumers or users of goods in that subsection means consumers or users in the United Kingdom. If that is the case, there may 128 be a possibility of consumers or users in the United Kingdom being not particularly interested in the maintenance of the quality of those particular goods. It might be possible that resale price maintenance maintains quality in this market, and that is very valuable when it concerns goods for export.
I should have thought that there were two possible ways of dealing with this. I should have thought that the simplest way would be the acceptance of the Amendment of my noble friend Lord Jessel. I cannot see that much harm would be done by that acceptance. But if Her Majesty's Government feel strongly that that would be objectionable, for some reason which they put forward, then, at least, either at this stage or at a later stage in the Bill, they should allow an amendment of gateway (a), which would make it run something like this:… reduced to the detriment of the public as consumers or users of those goods or to the detriment of the export trade.Because I do not think that the two things are demonstrably identical.
§ THE LORD CHANCELLOR
I have listened with interest to what has been said and, of course, I share with other Members of the Committee their view about the importance of maintaining exports. I cannot agree, though, with what has been said by my noble and learned friend or by the noble Lord, Lord Shackleton, or by my noble friend behind me. The arguments about resale price maintenance have been going to and fro over years, and I think I am right in saying that it was not until very recently that it was ever suggested that the abolition of the maintenance of prices in retail shops could have any effect on the export market. I do not believe that it is likely to have any effect at all. If I may be allowed to follow on and explain the reasons, all we are doing here is to give the retailer the opportunity, if he wishes to take it, of reducing prices below those which have been previously fixed. We introduce more competition in retail trade. My noble friend behind me said that the object of the Bill was to reduce prices at retail level. Let me assume that, as a result of this Bill, prices are, in fact, reduced. That may lead to increased demand on the home market but, with 129 great respect to my noble and learned friend, I think that the fallacy of his argument is that the level of production of that commodity would remain constant and that the increased demand on the home market could be met only by diverting goods from export to the home market. I have often heard it argued that if one wants a substantial export trade one must have a large base in the home market, and if the results of this Bill be as my noble and learned friend suggests, to reduce prices at retail level so that the demand in the home market increases, then there will be an even larger basis for the export trade.
My noble friend Lord Massereene and Ferrard raised the question of quality. I endorse what my noble friend Lord Drumalbyn said: that if the abolition of resale price maintenance was really to have an effect on the quality of goods available for sale, then gateway (a) would apply. Of course, my noble and learned friend Lord Conesford is quite right in saying that the "public" in this context means the United Kingdom public. But I put this question, in all seriousness. What possible relation can there be between the abolition of resale price maintenance and the consequent reduction of prices in retail shops, and a reduction in the quality of goods for export, if, as my noble and learned friend has suggested, the quality of goods on the home market remains unaltered?
§ LORD CONESFORD
May I correct my noble and learned friend? Of course I did not make any such assumption. The assumption I made was that it might be argued that in certain industries the effect of the abolition of resale price maintenance would be that they might make a slightly different sort of goods for the home market. Let me give a simple example. Suppose that after the abolition of resale price maintenance there is an equal or greater production of pottery, it might he that some of the high-class pottery, which is the kind that is important to the export trade, might not flourish on the home market.
§ THE LORD CHANCELLOR
I do not see that the question of whether high-class pottery may or may not flourish on the home market is really relevant. The question posed by my noble and learned friend, if I understood him aright, was 130 that the effect of the abolition of retail price maintenance in retail shops might lead to the lowering of the quality of goods on the export market. I can see no possibility of that happening. There seems to me to be no connecting link. If the abolition of resale price maintenance leads to a lowering of the quality of goods on the home market, then the gateway will apply. But why should it lead to any alteration in the quality of goods for export? I really do not see it.
The Government have most carefully considered these gateways and the question of the export sales of goods. This matter was discussed at considerable length in another place. I can only tell my noble friends that we do not think that any case has been made out for an amendment of this clause in the way suggested. We do not think that there is any reality in the suggestion that the giving of freedom to retailers in this country to charge what prices they like will, or could, affect the quality of goods on the export market or affect exports. Production will rise if the demand on the home market increases. Surely there can be no doubt of that.
My noble friend Lord Hawke raised a question with regard to the interpretation of Clause 2. With great respect to him, I do not think he got it right. I will not repeat what I said about it earlier on; I merely ask him to look at Hansard with regard to it. He is not right in assuming that the manufacturer cannot withhold supplies from someone who comes and asks him to deliver supplies, if the manufacturer has a good reason, apart from price-cutting, for taking that particular course of action.
§ LORD SHEPHERD
I should like to say a few words in support of the Amendment, as one who has been for the last fifteen years very much connected with the export trade and the export efforts of British industry. I think it is difficult to pinpoint what may be the effects of the abolition of resale price maintenance on the export industry. But I think it must be noted that in 1956 the Government of the day then thought that retail price maintenance should continue, and they gave it power and enforcement by Section 25. Now they have changed their mind, and most of us, I think, would agree that there 131 are certain sides of industry where the change should be made. But the Government recognise that there may be exemptions from this general rule. What the Amendment says is that the gateways through which the exemptions should be decided should take into account the possible effect on the export trade.
One of the difficulties, as I see it, is this. An exemption cannot well be given to a general classification of trade. If we take the textile industry, it may cover a whole range of textiles—wool, cotton, man-made fibres and perhaps some new product that is only being dreamt up at present in the laboratories of the firms concerned. What it will mean is that there will be no individual firm within that classification which will be able to obtain exemption. The Committee will have perhaps noticed Amendment No.32, where I have tried to deal with this point: that where there was a general classification, the Court, if it thought fit, could make an order that Clause 2 would not apply to that particular firm.
I think the main difficulty for the Committee in this matter is to decide whether an individual firm which is mainly connected with the export trade may be seriously involved to its detriment in its export trade because its particular class of manufacture is not exempted. I should have thought it was right, knowing that we are such a major exporting country and depend so much on exports, that this point of the export trade should be one of the factors to be considered by the Court when it is making its decision. I cannot see that it is likely in any way to affect major industries and major companies, but it may be that some of the smaller companies who play quite a considerable part in our export trade will be involved. I hope that the Committee will express their view, if necessary, in a Division, that the effect on exports should be taken into account by the Court when considering the other gateways.
§ THE LORD CHANCELLOR
I am sorry to intervene again, but I would ask your Lordships not to be persuaded by the eloquence of the noble Lord, Lord Shepherd, into taking a step which, having regard to the scope, content and 132 arrangements of the Bill, is one that I do not think would improve the Bill at all. I think I am right in saying that similar Amendments to this were put down, considered and debated in another place, and rejected. This is a majorissue. If there was any reality in the belief that the freeing of the retailer to charge such prices as he might wish would have an adverse effect on the export of goods I should not stand here and ask your Lordships to reject this Amendment. But that possibility, when one considers the matter impartially (as I hope I am), and free from emotion, is really so remote that there is no need to legislate in respect of it.
We are all concerned with exports. But I must say that I have listened carefully to the arguments advanced, and I am not in the least convinced that any case has been made out to establish that, because resale price maintenance goes off a class of goods—and that is what will be exempted, a class of goods; not perhaps all man-made fibres, but a class of goods; and the class will be compiled by the registrar—and because individual retailers are left free to charge such prices as they wish, the sales by manufacturers and suppliers on the export market will be, or may be, affected. I think that really is a nonsequitur.
If my noble friend Lord Jessel asks me to look at it and think it over again, of course I will do so. But it would not be right for me, as at present advised, to hold out any hope that we shall be able to meet him on this particular point, because by so doing we should not be improving the Bill. That is as tar as I can possibly go. If my noble friend would like me to think about this further, I will do so: but if he desires to press the matter now, I can only advise my noble friends to resist the Amendment.
§ LORD COLERAINE
If the noble and learned Lord the Lord Chancellor will allow me to say so, I was not entirely convinced by his argument in rebuttal of what my noble friend Lord Hawke put to him. The Lord Chancellor says that the effect of this Bill will be to reduce prices: that that will increase demand; the increase in demand will increase production, and therefore there will be a still wider basis for export.
§ THE LORD CHANCELLOR
With great respect, the noble Lord is paraphrasing what I said and not paraphrasing it quite accurately. I said that the effect of this Bill will be to give freedom to certain retailers to reduce prices, if they wish. It was the argument of my noble friend Lord Hawke that the object of this Bill was to reduce prices. That was not stating the object of the Bill quite correctly. I argued it on the basis that the reduction of prices on the home market followed in consequence of resale price maintenance going. I merely make that correction because, with respect, my noble friend is not paraphrasing correctly what I said.
§ LORD COLERAINE
I apologise to the noble and learned Lord. But the point still remains that, if my noble friend Lord Hawke is right, there will be an increased demand for goods in the home market, if this Bill fulfils the hopes which are built on it, and that will limit the supply of exports. The noble and learned Lord says that that will not be the result, because if the demand increases, then the supply will increase, production will be expanded and, therefore, there will be an even wider basis for the export trade. I think I have now put the case as he put it. If his argument is right, it surely means that every effort that the Government make from time to time to damp down demand on the home market in the interests of the export trade must be wrong. I personally do not believe that. You cannot expect production to expand immediately, especially when all our resources are being used as fully as they are to-day.
What I would suggest to the noble and learned Lord the Lord Chancellor is this. What is lost by putting in this additional gateway? It may never be used. So much the better. But, surely, it is possible to conceive of occasions when it might be very useful to have it there. My noble and learned friend said that the possibility is so slight that it is not worth taking account of. But I think the experience of all of us is that when Governments make prophecies about economic development—whatever Government they may be—they are likely to be proved wrong. I cannot see what will be lost by having this 134 gateway, whereas, if my noble and learned friend's prophetic instinct is at fault, a great deal might be lost to the export trade if this gateway is not included.
§ LORD CONESFORD
I wonder whether I might explain the great difficulty that I feel about this. My noble and learned friend the Lord Chancellor said: how can the abolition of resale price maintenance have an effect on quality? But gateway (a) acknowledges that it may have an effect on quality.
§ THE LORD CHANCELLOR
With great respect, I did not say that. I said how can abolition of resale price maintenance have an effect on quality of the goods for export without having an effect on quality of the goods which are also sold on the home market? If they are sold on the home market and the quality is affected, gateway (a) applies.
§ LORD CONESFORD
I know that when I differ from my noble and learned friend on a matter of law the House will treat me with the contempt I deserve. Nevertheless, I venture to have a slight difference from him on this point. What I say gateway (a) acknowledges is that the abolition of resale price maintenance may have an effect on quality. The Court might consider that that was to the detriment of the home market. On the other hand, if the bulk of the home market were very keen on slightly different kinds of goods, they might think that that loss of quality was insufficient to allow exemption under gateway (a). I say that there is a distinction between detriment to the home public and injury to the export trade. There are possible distinctions between those two things, as most manufacturers know.
Now I want to put to my noble and learned friend the point that gives me the greatest difficulty, if this matter goes to a Division. I have not read through the whole of the proceedings in another place, but if this direct Amendment which is now being moved was debated and voted on in another place and rejected, then I shall not support my noble friend any longer on this Amendment. But if there was no such Division, or no Division which implied such rejection in any direct way, then I think it would put some of us in a great difficulty if my noble and learned friend 135 insists on this matter going to a Division. I wonder whether that simple question of fact could be cleared up: what precisely it was that another place voted on which is said to cover the principle of this Amendment. Because, if there were no such Division, then I think there would be a lot to be said for something being put in the Bill, either at this stage or a subsequent stage. I can assure my noble and learned friend that some of us are put in the greatest difficulty by the resistance to an Amendment which, prima facie, looks as if it cannot do any harm, and which arguably could be of importance to our export trade.
§ LORD SHACKLETON
Before the noble and learned Lord replies may I support what the noble Lord, Lord Conesford, has said? I am not sure that I would go quite so far as him in extending the Parliament Act and suggesting that we should never pass an Amend-mend which has been voted on and rejected in another place, although ultimately we might have to give in on it. The arguments which the noble and learned Lord used have been of two kinds. There has been what might be called a general political one, which we have just been discussing, and there has been the argument that he himself is unconvinced by this argument. But this is not a reason, if the House is convinced by it, for our not putting this Amendment into the Bill. I would suggest that the noble and learned Lord, either willfully or because he just has not understood the arguments of the noble Lord, Lord Conesford, has confused the Committee in regard to the position in the Restrictive Practices Court with relation to this question of quality.
Perhaps I could illustrate this by an example. If there is a manufacturer of a certain kind of yarn, say a man-made fibre, in an industry where there is a large element of monopoly in this country, and where, as a result of there being no resale price maintenance, the manufacturer decided that it was no longer worth his while to use certain yarns in a certain type of cloth, it might be that what was not necessarily to him of the greatest importance was of importance to the nation: that is, that certain types of cloth would no longer be suit- 136 able for the export market. It is not necessarily the case that manufacture takes place in two compartments, one for the home market and one for the export market, which to some extent was the implication of the noble and learned Lord. He did not say that, but there was a slight implication.
I would reiterate the argument that I and the noble Lord, Lord Conesford, used, that the Court might decide that the variation in the reduction in quality was not to the detriment of the public as consumers or users of those goods, but that it might well be to the detriment of the sale of those goods abroad. We know that the reference to the public as consumers and users of those goods applies only to this country. If in fact it is possible—and this is a theoretical argument, anyway—that the quality will be affected, it seems to me to follow perfectly logically that the export trade might also be affected as a separate problem, apart from the interests of the public in this country. It seems to me that the Restrictive Practices Court ought to be able to take this into account as an additional factor when considering any such representations.
§ THE LORD CHANCELLOR
If your Lordships will forgive my addressing you again upon this matter, I have been invited by my noble friend Lord Conesford to answer specific questions which he has put to me, and I will certainly seek to do so. I would ask your Lordships to consider for one moment what we are engaged upon. The subject of this Bill is the practice of resale price maintenance and whether it should go on or stop. It is a practice we are concerned with in relation to this country, and this clause is the clause which provides gateways, if certain facts are established, to enable manufacturers and suppliers in this country to maintain resale price maintenance in relation to a particular line of goods. Therefore, it is obviously right that the clause should be drawn in such a way that the interests of the public as a whole in this country are considered.
I did not suggest, as the noble Lord, Lord Shackleton, sought to put upon me, that a manufacturer would be engaging in two distinct classes of manufacturing. What I said (I am afraid that I cannot have made myself clear) was that I find it difficult to believe—indeed, I simply 137 cannot accept—than, the abolition of resale price maintenance for a particular class of goods is likely to affect the quality of those goods for export with-cut affecting the quality of those goods on the home market. That was the view I put forward; and I said that if it does affect the quality of the goods on the home market, then, of course, gateway (a) applies.
§ LORD SHACKLETON
May I interrupt the noble and learned Lord? I hope he will point out that the Court will not be interested in a change in the quality of the goods, so far as this country is concerned, unless the change is to the detriment of the public in this country.
§ LORD CONESFORD
Before my noble friend replies, I would remind him of the words that follow all the gateways; the further thing about which the Court have to be satisfied:…in any such case that the resulting detriment to the public as consumers or users of the goods in question would outweigh any detriment to them as such consumers or users.…That is again a reference to the public in this country.
§ THE LORD CHANCELLOR
I entirely accept that. That is just what I am saying. We are considering here within the field of the United Kingdom whether this practice of resale price maintenance should continue; and in considering whether in the field of the United Kingdom that practice should continue it is only right to have regard to the advantages and the detriment to the public as consumers in this country.
The chain of my noble friend's argument is, in my view, one that it is quite impossible for him to establish: that there is any relation between the abolition of resale price maintenance in retail shops here and the volume of our exports abroad. The Board of Trade, with which he is familiar, is in close touch with industry, and I am told that that Department is satisfied that industry as a whole takes the view that resale price maintenance is a restrictive practice, and that its removal would not damage the export industry. I ask my noble friend to pay attention to that view. If it is right—and that is the view, I understand, of industry as a whole—then the 138 case for making this change is greatly reduced.
My noble friend, Lord Coleraine, took me to task for the argument that I put forward in dealing with the volume of demand against supply. I would point out to my noble friend that I was really replying to my noble friend Lord Hawke's argument about that; because he was maintaining, if I followed his argument correctly, that the volume of production would remain constant and that the necessary consequence of a reduction of price, if one occurred in a particular line, would be that goods would be transferred from the export to the credit market.
§ LORD COLERAINE
But it may well remain constant when the economy is as overstretched as it is to-day.
Every Chancellor of the Exchequer since the war has used precisely those arguments in every Budget speech.
§ THE LORD CHANCELLOR
My noble friend Lord Hawke drew attention to the fact that a regulator was sometimes used to increase charges and to lessen demand. Here, of course, if he is right and the effect of this will be to reduce prices, it may increase demand. All I was saying was that it does not necessarily follow that an increase in demand at home will lead to a reduction of goods for the export market. What I am saying is that the effect of enabling the retailer to charge such prices as he likes on particular lines of goods is not likely to have—and, indeed, I do not believe will have—any effect on the volume of our exports.
My noble and learned friend Lord Conesford asked me to say whether this question had been discussed and voted on in another place. I am not sure to what extent it is right for me to refer to your Lordships the particular terms of Amendments moved in another place, but if my noble and learned friend would look at Hansard of April 22, 1964, col. 1414, he will see that an Amendment was moved by a Conservative Member and was taken, at the suggestion of the Temporary Chairman, with another Amendment. The mover of the first Amendment said, quite shortly, to the House that the Amendment dealt with exports. That debate, which obviously took a considerable time, was followed 139 by a Division, and the Amendment was rejected for reasons which I have sought to advance to your Lordships to-day. I do not think there is any point in my repeating the arguments. I ask your Lordships not to accept this Amendment, though I would at the same time stress that I share with all your Lordships the importance we attach to maintaining, and indeed increasing, our exports. But I do not think that the case is made out for making any change; and it would be a major change in this measure on the lines directed.
LORD JESSEL: There has not been a single speech supporting the Front Bench. Every speech in this House has been strongly critical of the Lord Chancellor's attitude. The Lord Chancellor says that it will make a major change. I do not agree with that at all; I do not think
§ it will make a major change. He also said there would not be many cases where it would be used. I entirely agree; in fact, I said so myself. But I still do not think that is a reason why we should not put it in the Bill. There may be cases. Also, in view of the tone of the debate here, which has shown the views of the Committee, I think it would be wrong for me not to press the matter. It would also be wrong in regard to my friends in industry, who, quite frankly, put me up to make this speech and put down this Amendment. Therefore, I am afraid that I cannot withdraw the Amendment.
§ 5.30 p.m.
§ On Question, Whether the said Amendment (No. 25) shall be agreed to?
§ Their Lordships divided: Contents, 44; Not-Contents, 63.139
|Ampthill, L.||Gardiner, L.||Molson, L.|
|Amwell, L.||Greenhill, L.||Monsell, V.|
|Ashbourne, L.||Hawke, L. [Teller.]||Moyne, L.|
|Attlee, E.||Henderson, L.||St. Davids, V.|
|Balfour of Inchrye, L.||Hobson, L.||Shackleton, L.|
|Bridgeman, V.||Iddesleigh, E.||Shepherd, L.|
|Burden, L.||Jessel, L. [Teller.]||Silkin, L.|
|Burton of Coventry, B.||Latham, L.||Sinclair of Cleeve, L.|
|Champion, L.||Lindgren, L.||Stonham, L.|
|Chorley, L.||Lindsay of Birker, L.||Summerskill, B.|
|Coleraine, L.||Longford, E.||Taylor, L.|
|Crook, L.||Mabane, L.||Wakefield of Kendal, L.|
|Forster of Harraby, L.||Mackintosh of Halifax, V.||Williams, L.|
|Fraser of North Cape, L.||Massereene and Ferrard, V.||Williamson, L.|
|Gaitskell, B.||Milford, L.|
|Auckland, L.||Falkland, V.||Newton, L.|
|Balerno, L.||Falmouth, V.||Ogmore, L.|
|Blakenham, V.||Ferrers, E.||Perth, E.|
|Bossom, L.||Fortescue, E.||Raglan, L.|
|Boston, L.||Goschen, V. [Teller.]||Redesdale, L.|
|Brecon, L.||Grenfell, L.||Robertson of Oakridge, L.|
|Carrington, L.||Harris, L.||Rockley, L.|
|Chesham, L.||Hastings, L.||St. Aldwyn, E. [Teller.]|
|Cholmondeley, M.||Horsbrugh, B.||St. Oswald, L.|
|Craigton, L.||Ilford, L.||Sandford, L.|
|Daventry, V.||Jellicoe, E.||Sandys, L.|
|Denham, L.||Long, V.||Sinha, L.|
|Derwent, L.||Lothian, M.||Somers, L.|
|Devonport, V.||McCorquodale of Newton, L.||Stonehaven, V.|
|Devonshire, D.||Mancroft, L.||Strange of Knokin, B.|
|Digby, L.||Merrivale, L.||Stratheden and Campbell, L.|
|Dilhorne, L. (L. Chancellor.)||Milverton, L.||Swinton, E.|
|Drumalbyn, L.||Monk Bretton, L.||Tangley, L.|
|Dundee, E.||Mottistone, L.||Templemore, L.|
|Ebbisham, L.||Napier and Ettrick, L.||Thurlow, L.|
|Eccles, V.||Nathan, L.||Tweedsmuir, L.|
Resolved in the negative, and Amendment disagreed to accordingly.
LORD TANGLEY moved, after subsection (2), to insert:
() On a reference under this section in respect of any drug medicine or other pharmaceutical substance the Court shall by order direct that such goods shall be exempted goods for the purposes of this Act subject to such conditions (if any) as the Court thinks fit.
§ The noble Lord said: In moving this Amendment I must declare an interest: I am a shareholder in, and chairman of, my family company, which owns a group of pharmacies. I am sorry to have to disappoint the noble Lord, Lord Lucas of Chilworth; we give nothing away; we do not even give away hot cross buns or small tubes of toothpaste, but as that idea has been put by him into my head I shall consult my colleagues and I shall pass on the assurance that the noble and learned Lord the Lord Chancellor gave yesterday, that that would be perfectly all right under the Bill.
§ The object of this Amendment is to invite the Committee to consider whether the principles of this Bill should be applied without qualification to the sale of medicines to the public. I am a supporter of this Bill. I have voted with the Government on all three Divisions on this Bill. And I am a supporter of it because I believe in the philosophy underlying it, which is, as I understand it, that as great a variety of goods as possible should be offered to as many people as possible and at as low a price as possible. Ought that philosophy without qualification to be applied to the supply of medicines to the public? Is it desirable that we pour as much medicine as possible down as many throats as possible at as cheap a price as we can devise? I am certain your Lordships, when you consider that, will say, No. Of course the right answer must be "No," and that is why the business of supplying medicines has long been treated as being something different from ordinary types of other business
§ The reason for that, of course, is that the consumer of medicines is in a quite different position from any other kind of consumer. As a rule, he is not in a position to exercise a rational consumer's choice. He is usually not a physiologist; he does not know what is wrong with him, or even what he imagines is wrong with him. He is certainly not a pharmacologist: he does not in the least understand the nature of the medicine that he 142 is buying, or what will be the effect of the medicine on his actual or imagined complaint. He is in a weak position. He is not able to know on what basis his choice should be made. He is usually also in an emotional condition: he is worried and anxious, either with or without cause, about his bodily ailments, and is liable to fall into a state of credulity. That is why special provisions have always been made for protecting the consumer of medicines, the buyer of medicines, against exploitation of his weak position. He is not in at all the same position as this intelligent housewife or this active buyer, of whom we have been hearing so much in the course of the proceedings on this Bill, whose consumer's choice is to be respected.
§ There are three ways in which the supply of medicines to the public has, in effect, been controlled for a long time past. First of all, there are certain provisions of law; secondly, there are certain traditional practices; and, thirdly, there are certain voluntary actions taken by various component parts of the pharmaceutical industry. The legal situation I need not go into; it is familar to you all. There are a great many drugs which cannot be obtained at all except on a doctor's prescription, and it is illegal for anybody to supply them on any other footing or by any other means.
§ However, traditional practices hold and are most important. Most of the medicines which go to the public otherwise than through prescriptions are sold in the shops of pharmacists and under the control of pharmacists. As your Lordships know, a pharmacist is a professional man; he has a long and an expensive training. He has his own professional body, which admits him, examines him and disciplines him, in the same way that other professional bodies deal with their members. And most of the drugs, other than those on prescription, are sold by these professional men in their own places of business. It is by no means unusual—in fact, it is most common—for people to come to the pharmacist with some ailment and say, "What can you give me for my stomach ache," or backache, or corn, or whatever it may be. The pharmacist will often advise them and say, "I am not going to give you anything. You should go to a doctor"; or, if he does advise something, it will be 143 something which he knows about, which he can honestly recommend as a professional man.
§ This Bill will have no effect whatever on, and is utterly unnecessary in respect of, those two ways in which medicines get into the hands of the public. It cannot possibly affect what goes out by prescription, and it can hardly affect what the pharmacist, as a professional man, recommends over the counter—except to this extent, that it would be wrong for the pharmacist to have his attention diverted from his professional duty by wondering whether there was a cut-price store round the corner which was selling something else at a cheaper price. The real danger is, surely, that the control of supply of medicines to the public will get out of professional hands and into the hands entirely of people whose one interest, whose only interest, is the sale of as much as possible—the supermarkets, the cut-price stores, the discount houses—where there will be nobody in the shop trained in anything except in the techniques of getting rid of as much as possible as quickly as possible.
§ If this Bill goes through, you will see up and down the high streets this sort of advertisement on the windows of these stores: "This week's bargain—ABC pills. Astounding reductions". In the next shop window you will see: "This week's bargain: XYZ elixir" or whatever it is, at an equally astonishing reduction. Do you want to see that sort of thing happening up and down the country, as compared with the way in which this trade is handled to-day? If these things did happen to-day there are many respectable and self-respecting people in the trade who would stop that nonsense; they would withhold supplies, or they would insist upon proper prices being charged.
§ I think your Lordships will agree that these are public-spirited, right and proper, and reasonable actions to take. If your Lordships pass this Bill without amendment in this respect, people who take that proper action will be branded as lawbreakers; they will be illegal in their actions under this Bill. What is more, their actions will be ineffective. The cut-price stores can snap their fingers at them. I submit that that is not the sort of thing which the Govern- 144 ment intend to come out of this Bill, or which your Lordships would wish to come out of this Bill.
§ There are other precautions which are taken because of the special position of the consumer of medicines. I refer to restrictions upon advertising. Many of your Lordships—I know that the noble Lord, Lord Taylor, is most active in this connection—have felt that there ought to be even more restrictions, by the media—in television, newspapers and so forth—upon the type and content of medical advertisements. Different opinions may be held about that, but there is a common consensus of opinion that advertisements ought to be controlled. The media themselves have their codes, and the trade co-operates with the media for this purpose. That is another illustration of the special nature of the particular trade in question, and the special circumstances with which it is now surrounded.
§ This Bill asks us to cast away all these safeguards or precautions and, as I say, to adopt the principle of getting as much medicine down as many throats as cheaply as possible. That cannot be right. What I am asking your Lordships to do is to recognise, as has been recognised already in the ways I have described, the special position of this particular business, and to carry that same principle into this Bill; to recognise in this Bill, in the same way as it has been recognised in other ways, the special position of this particular business.
§ How is that to be done? In another place an Amendment was moved seeking to take this medicine business out of Clause 1 of the Bill altogether. So strong was the feeling that that Amendment, I believe, was lost by only the narrowest possible margin. I think that is going too far. I do not think one ought to take medicines out of this Bill altogether. I accept the decision that has already been made in another place. But surely there is a strong case for my Amendment, which says that it can be dealt with under Clause 5 that prima facie this business ought not to be subjected to the rest of the provisions of the Bill.
It may be objected that I could wriggle through, in some way or another, one or other of the gateways in Clause 5. As I have been listening to these arguments about gateways—and I have sat through
the whole of this debate—I have thought of these words of Scripture,
… strait is the gate, and narrow is the way … and few there be that find it.
and few there will be who get through these gateways unscarred. Why should I be condemned to this serpentine, wriggling process of getting through one of these gateways when I could be made an honest man on behalf of the consumer and walk straight through a wide open gate labelled "For me"? That is what I am asking for. It is reasonable, and I am certain that the Government will give me what I want. I beg to move.
Page 6, line 16, at end insert the said subsecticn.—(Lord Tangley.)
§ LORD WAKEFIELD OF KENDAL
I rise to support the Amendment that has been so ably proposed by my noble friend Lord Tangley, but before I do so I must declare an interest in that I am a member of the Pharmaceutical Society; and although for many years now I have had no financial interest in the supply of drugs, the only interest I have had is, like so many of your Lordships, that of consuming them from time to time.
As your Lordships will know, the principle and purpose of this Bill is to free trade from restrictions and to give greater competition, which will come about, so it is hoped, by the reduction in prices. My noble friend Lord Tangley has made it clear that it cannot possibly be in the public interest that there should be the same free and unrestricted trade in drugs, medicines and pharmaceutical products which could happen—not of course in the case of all drugs or medicines prescribed under the National Health Act, but in relation to many kinds of drugs and medicines. Surely it is wrong that in this category there should be free and unrestricted trade and an encouragement to reduce prices and to increase production. It must be right, as this Amendment suggests, that there should be some restriction and control. Is it not best that control and restriction should be obtained through trained professional men who have spent a considerable time in passing their examinations and getting the necessary technical knowledge to enable them to discharge those duties in the services which they render to the public?
146 I suggest that, on the one hand, this Amendment seeks to give public protection. It is so worded that the Court, while exempting goods, can ensure that there are appropriate conditions, whether it be as to profit or in any other way. when the goods are supplied. I hope that the Government will feel that this Amendment is in the public interest in that the Restrictive Practices Court is surely there for cases which have to be proved; but from the way in which this Amendment has been moved it is plain that it is not necessary for pharmaceutical products, such as medicines and drugs, to have that proof—for the proof here is self-evident. Drugs and medicines are in a quite different category from those various other commodities with which this Bill is mainly concerned to deal. I therefore suggest that Amendment should be most carefully considered; and, if perhaps the wording is not quite right, that at any rate the principle which it seeks to put forward is acceptable, to the public's advantage. and would in no way undermine the principles for which this Bill stands.
§ LORD COLERAINE
Although I, too, must declare an interest in this Amendment, I can honestly say that the argument advanced by my noble friend Lord Tangley in his powerful speech just now seems to me to be incontrovertible. As I understand it, the purpose of this Bill—and it is a purpose which I support —is to do away with a form of restrictive practice which, in the view of the Government, and in my own view, does harm to the consumer. Therefore, I genuinely support the purpose of the Bill. The result of the Bill, if our hopes are fulfilled, will be that goods of all kinds will become cheaper in the shops. Their consumption will increase and the consumer will benefit. But, in respect of medical preparations, it must surely be the case that we do not want this to happen and we do not want the kind of picture which my noble friend Lord Tangley painted—one of "To-day's special line!"—to be a reality. If it became a reality, it would do incalculable harm.
It is perfectly true that in another place an Amendment on similar lines was very narrowly rejected, but my noble friend's Amendment contains in it some safeguards as to conditions, and so on. 147 which the Amendment voted on in another place did not contain. I very much hope that my noble and learned friend the Lord Chancellor will consider most carefully what Lord Tangley has said, and, whether or not he can accept this Amendment, I hope that he will realise it embodies a very real point which, unless there is to be real danger to the health of the public, ought to be met.
§ LORD SILKIN
We have had three speeches from people who have had an interest to declare. I have no interest to declare except to preserve the broad policy which this Bill sets out to achieve. I have listened carefully to the arguments put forward, and there is a confusion of thought. The pharmacist, who, I agree, is a highly trained person, is in fact in the majority of cases acting in two capacities. First, he is a person who makes up prescriptions given to him by a doctor—and in that capacity I agree he is dealing with people who may be suffering from emotional strain, from illness, and so on. But he is also a salesman, in exactly the same way as a person employed in Marks and Spencer's or anywhere else: he is selling commodities, like aspirin. He is not asked to exercise any judgment or skill whatever in selling a bottle of aspirin, or a box of cough tablets, or an ointment, or whatever it may be. These are all taken from stock or off the shelf and sold to the customer. The customer does not ask for the advice of the pharmacist on those matters; the customer normally knows what he wants. In those circumstances, where one is dealing with merchandise in the ordinary way, I can see no reason whatever why the Court should be directed, as this Amendment envisages, to exempt them from the provisions of the Bill. The noble Lord, Lord Tangley, has himself recognised this distinction.
Of course, on the question of drugs that are prescribed by a doctor no question can arise. All we are dealing with here, although it is described in the Amendment as adrug medicine or other pharmaceutical substancewhatever that may mean—and would that include what is called "medicinal soap"?—is an ordinary commodity which the customer goes into the shop 148 and pays for. I think it is only right that those commodities should be dealt with in exactly the same way as any other commodity. I hope, therefore, that the Government will not accept this Amendment.
§ THE LORD CHANCELLOR
I have listened with interest to the entertaining speech given by the noble Lord, Lord Tangley; and, indeed, he advanced powerful arguments in support of this Amendment. He accepted that pharmacists should be within the scope of the Bill. Your Lordships will remember that when he was talking about what had happened in another place he referred to an Amendment which had been moved to Clause 1—
§ THE LORD CHANCELLOR
The noble Lord accepted that pharmaceutical products should be within the scope of the Bill. He having accepted that, I now ask your Lordships to see what in fact this Amendment does. We have heard a lot about the sale of pharmaceutical products, but this Amendment in fact takes them right out of the Bill —there is no real halfway house—because the Court is by this Amendment directed to say that they shall be exempted goods; that is to say, exempt from the provisions of this Bill. That means that the Court is directed to say that the practice of resale price maintenance can go on, and there is no escaping that. The noble Lord's argument that in some way, by making this Amendment to Clause 5, these products are kept within the scope of the Bill, whereas under the Amendment to Clause 1 they were taken right out, is not a sound argument.
The Amendment says that they will be exempted from the provisions of this Bill so that resale price maintenance can be continued, and the last few words say:subject to such conditions (if any) as the Court thinks fit.So the Registrar would have to brine these pharmaceutical goods before the Court with the knowledge that the Court could only exempt them from the provisions of the Bill, but—if this Amendment were accepted—with the 149 Court having power to impose any conditions it liked in relation to these pharmaceutical products. No indication is given as to the nature of the conditions contemplated, and I must say that I think the whole concept of attaching conditions to an exemption order is fraught with difficulties. If it were advantageous to attach such conditions, power to do so should be a general power not limited to pharmaceutical products.
I really do not see what sort of conditions the Court could sensibly and effectively impose. The only conditions that would seem relevant to resale price maintenance—and that, of course, is the matter under consideration—are conditions relating to the level at which suppliers fix their resale prices. If that is the purpose of giving this power to impose conditions, I do not think it is acceptable. The object of the Bill, if I may remind your Lordships, is to permit a greater degree of flexibility in the retail prices, and the gravamen of the complaint against resale price maintenance is not only that it keeps prices unnecessarily high but that it keeps prices unnecessarily rigid. To make a condition about the resale price would be to perpetuate the rigidity, since it would have to be imposed on many suppliers carrying on business in different places and in varying circumstances; and, in any case, the level at which resale prices may be fixed is not a matter for the Court.
I have said a little about the content of this Amendment. What my noble friend is really seeking is in some way to avoid the operation of this Bill in relation to pharmaceutical products, and I do not think that would be right for the reasons that have already been advanced. For these reasons I would say that these goods should be treated like other goods. The case for exempting these goods was powerfully argued by the noble Lord, Lord Tangley, and by my noble friend Lord Coleraine; and, indeed, by my noble friend Lord Wakefield of Kendal. The proper place to argue that case for exemption is before the Restrictive Practices Court. If the case is as strong as my noble friends think it is, then surely they should succeed before that Court in obtaining exemption. The stronger the case is for pharmaceutical products the stronger, I would 150 say, was the case for leaving it to the Court to adjudicate upon those issues.
I would draw your Lordships' attention, in particular, to gateway (d) which was inserted with regard to this particular question—namely, the gateway which says:the goods would be sold by retail under conditions likely to cause danger to health in consequence of their misuse by the public as such consumers or users".I advised your Lordships not to accept this Amendment but to leave it to the Court to adjudicate upon the matter, and I can assure my noble friend Lord Wakefield of Kendal, who asked a question and hoped that the Amendment would be most carefully considered, that indeed it has been. My noble friend Lord Coleraine thought that the argument advanced for exemption by the noble Lord, Lord Tangley, was quite incontrovertible. But if that be so, why not leave it to be argued, as the Bill gives it power to be argued, before the Restrictive Practices Court? Of course, I was very glad to note that my noble friend Lord Coleraine generally supports this Bill, but for the reasons I have given I must ask your Lordships not to accept this Amendment.
§ LORD TANGLEY
May I just deal with three points, the first being the point raised by the noble Lord, Lord Silkin? The noble Lord, Lord Silkin, has not had the advantage that I have had of knowing from earliest boyhood what really happens in pharmacies. I have had that experience and I spoke from the depths of it in what I said to the Committee this afternoon. The noble Lord, Lord Silkin, is perfectly right in saying that the business of pharmacists divides itself into two parts; one is the dispensing of medicines, and the other is the trading in medicines—to use his own term. But the distinction is nothing like as rigid as he believes. In fact, the professional man who sells medicines to the public carries over into that sale a tremendous sense of professional responsibility which shows itself in three ways: one, is in advising, as I suggested; the second is that he makes up his own mind what he will stock, and I can assure the noble Lord that the respectable pharmacist takes a great deal of trouble to make sure that what he is stocking is good stuff and worthy to be sold—it is his own method 151 of control. The third point is that he does not attempt to push his wares on the public. He is not trained in salesmanship; he is trained with a professional background which he applies not only to his pure professional work as a dispenser, but also to the selling of goods over the counter. I can assure the noble Lord that that is in fact what happens.
The next point I want to make is that, so far as I can judge—and I say this with great respect—the noble and learned Lord has not attempted to meet my case in substance. He took the easier course—and I admit it is the easier course—of criticising the words of my Amendment. There is no attempt before your Lordships' Committee to answer the case in substance; there is no answer given to my point that there will be these advertisements in the supermarkets and elsewhere; there is no suggestion that they are desirable; and there is no suggestion that it is right to deprive the suppliers of their means of stopping the nonsense.
There has been no attempt to justify any of these things at all; and I do venture to suggest to the Committee that it would have been very much better, from the point of view of the Government, for them to have answered the substance of my case rather than spend a good deal of time on dealing with the wording, which I admit is imperfect. It is not only the wording in this Amendment which is imperfect. The wording of the Bill is imperfect almost from end to end, because the unfortunate draftsman—and I admire his skill enormously —has been attempting to draft the undraftable. I have been attempting, perhaps, to draft the undraftable in this particular Amendment; but I think that the noble and learned Lord the Lord Chancellor, bearing in mind some of the words he has been seeking to defend, might have been a little more sympathetic to my wording in this particular Amendment.
§ THE LORD CHANCELLOR
I did not criticise the wording of the noble Lord: I criticised the effect of his wording.
§ LORD TANGLEY
Then may I come to the wording which the noble and learned Lord was good enough to put to me, in particular, under gateway (d)? It 152 is not good enough just to say that you can wriggle through these conditions somehow or other. Gateway (d) I have studied at least as carefully as the others, and there is one thing which is not caught by (d) at all, and that is a substance—and there are plenty of them, I am sorry to say—which is perfectly harmless and equally useless, the only damage which the consumer suffers being that he has money taken out of his pocket for a valueless article. Paragraph (d) says:the goods would be sold by retail under conditions likely to cause danger to health in consequence of their misuse by the public as such consumers or users …".If it is not dangerous but only useless, you could not possibly get it under that clause. That is another example of what, in the first speech which I made, I called wriggling.
I am disappointed that the Government will not see the light on this clause. I greatly regret it, and I respectfully suggest they ought to. I want to say this with all the force I can urge. These things I have been fearing will happen, and when they do happen then it is the Government who will have to take the responsibility for them. It will be idle for Members of this House or Members of the Government to fulminate against the wickedness of the pharmaceutical industry. It is the Government who will have taken away their powers, and it is the Government who must accept responsibility for having done so.
I said in opening that my object in moving this Amendment was to ask your Lordships what you felt about this business of medicines. I think Members have expressed themselves very clearly. I have achieved my object. I hope that the Government will have second thoughts before the next stage of the Bill here—they certainly should. But, in the meantime, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
§ 6.14 p.m.
LORD CONESFORD moved, in subsection (3), to leave out "against any person who was party to the proceedings under the said Part I". The noble Lord said: This Amendment deals with subsection (3) of Clause 5 of the Bill. This subsection, I think, commands the support of the whole Committee, but after
the Second Reading it was the view of my noble friend Lord Colville of Culross and myself that the excellent intentions of the Government in this subsection might be frustrated by the limitations imposed by the words which I propose to omit. Those words are,
… against any person who was party to the proceedings under the said Part I …
§ For that reason, on the very next day, my noble friend and I put down a series of Amendments to amend the words that I am now proposing to delete. When we gave the matter further consideration, it became clear that we should achieve our purpose even better by omitting the words altogether. That has the additional advantage of making the whole subsection more comprehensible to the layman. I believe that Her Majesty's Government also prefer this Amendment to the earlier Amendments which we put down. In those circumstances, I beg to move.
Page 6, line 20, leave out from ("conclusive") to ("any") in line 21.—(Lord Conesford.)
§ THE LORD CHANCELLOR
We have naturally considered this Amendment. We have come to the conclusion that it effects an improvement in the Bill, and I therefore advise the Committee to accept it. However, I should not like to part with it without congratulating my noble and learned friend on the excellent drafting of this particular Amendment.
On Question, Amendment agreed to.
§ 6.16 p.m.
LORD SINCLAIR OF CLEEVE moved, after subsection (3) to insert:
()(a) On a reference under this section in respect of any goods, if
- (i) the supply of those goods has been the subject of a reference to the Monopolies Commission, and
- (ii) the Monopolies Commission has included in a report made pursuant to such reference a conclusion that in respect of such goods the maintenance of minimum resale prices neither operated nor might be expected to operate against the public interest,
the Court may make an order under subsection (1) of this section in respect of those goods and shall make such an order unless prima facie evidence is given of a material change since the date of such report in the circumstances appearing from the report to 154 have been taken into account by the Monopolies Commission in coming to such conclusion;
(b) In this subsection 'Monopolies Commission' means the Monopolies and Restrictive Practices Commission constituted by the Monopolies and Restrictive Practices (Inquiry and Control) Act, 1948, or the said Commission as reconstituted under the name of the Monopolies Commission by the said Act as amended by the Restrictive Trade Practices Act, 1956, as the case may be.
§ The noble Lord said: This Amendment may appear somewhat formidable, in view of the amount of space that it occupies on the Marshalled List, but I assure the Committee that it is not a wrecking Amendment in any sense. Although the drafting may not be perfect, I hope that the meaning may be clear; and I hope to convince your Lordships that the Amendment is a reasonable and a desirable one. When this Bill was being considered in another place the Secretary of State introduced an Amendment, now incorporated in this Bill in subsection (3) of this particular clause, Clause 5, to provide special treatment for goods which had been the subject of proceedings before the Restrictive Practices Court. That Amendment was generally welcomed, and the one which I am now proposing to the Committee is intended to deal with an analogous problem—that is, the case of goods the supply of which has been considered, investigated, by the Monopolies Commission.
§ There are, of course, procedural differences between a reference to the Restrictive Practices Court and an investigation by the Monopolies Commission. In the former, the cases are heard in court, before one of Her Majesty's Judges, and witnesses are called and examined by counsel: in the latter, the particular industry is subjected to a long and laborious investigation, lasting over a number of years and culminating in hearings before the Commission, presided over by one of Her Majesty's Counsel. From the point of view of the industry concerned, however, whether the case is to be heard before the Restrictive Practices Court or whether it is to be investigated by the Monopolies Commission, the differences in the discharge of the burdens placed upon it have been more apparent than real. Since the Government, in their wisdom, have concluded that special provisions should be included in the Bill to lessen the burden of proof 155 in cases which have already been before the Restrictive Practices Court, I would submit that, in all fairness, analogous provisions should be included to reduce the burden on those industries whose affairs have been investigated by the Monopolies Commission and who have reason to believe that their practice is not against the public interest. This is what this Amendment seeks to do; and any order made under the proposed subsection would, of course, be subject to review in the event of any change in the relevant circumstances.
§ That is what I might describe as the prima facie case for this Amendment. I feel that there are few of your Lordships who would dispute its plausibility, and I venture to hope that most of your Lordships would sympathise with it—and, indeed, approve it—when regard is had to two factors. First, to take a case before the Restrictive Practices Court is a laborious, time-consuming and expensive business, involving the preparation of the arguments, the employment of counsel, arranging for the appearance of a large number of witnesses, and so forth. Secondly, each case takes a great deal of the time of an already overburdened Court. It is clear, I think, that there will be many applications for exemption, and power is taken in this Bill to appoint three more puisne judges. Yet there are likely to be very few cases where the Monopolies Commission pronounce on this subject, and it is difficult to conceive, under any likely future legislation, of any increase in that number. So I think there can be no reasonable doubt that, if this Amendment is accepted, it will not mean more exemptions of a large number of classes of goods, but it will mean, if and when the conditions stipulated are fulfilled, that a great deal of time, effort and money, both public and private, will be saved.
§ I realise however (and the advice which the Minister of State has been good enough to give me confirms this; indeed, the Lord Chancellor has reminded your Lordships on more than one occasion of this point) that both under the 1956 Act and under this Bill the Restrictive Practices Court, in considering cases before it, must have regard to specified gateways, a common feature of which is the establishment of the fact that, in some way 156 or another, discontinuance of the practice would be to the public detriment. With the Monopolies Commission, however, the question for determination is whether or not that practice is harmful to the public interest. This is a fine distinction. I would not claim that it is a distinction without a difference, but it is, nevertheless, a very fine one.
§ I would submit to the Committee that if, after due examination, after ascertaining and considering all the relevant facts, the practice is found not to be, or not likely to be, against the public interest, then its enforced discontinuance cannot be in the public interest. What we are concerned with surely is the public interest—the facts, not theory. This Amendment is not a specious device to insert into the Bill a provision which in general undermines its basic conception or real purpose. The distinction to which I have referred—perhaps I should call it "the different legal approach" in this Bill to the question of public interest—does not, of itself, turn something which quite recently was found not to be against the public interest into something which operates to the public detriment.
§ For all these reasons I earnestly hope that the Minister will be prepared to accept this Amendment at its face value, as being sensible, reasonable and calculated to save time, effort and money, and not something which makes any kind of breach in the structure of the Bill or in any way contravenes its purpose in promoting free competition and safeguarding the public interest. I beg to move.
Page 6, line 24, at end insert the said subsections.—(Lord Sinclair of Cleeve.)
§ LORD ROBERTSON OF OAKRIDGE
I should like warmly to support this Amendment. The case for it has been put so well by the noble Lord, Lord Sinclair of Cleeve that it is not necessary for me to add many words. However, I think it may be worth while to say a few words, first in the hope that it will show the Government that the feeling about it is fairly widespread; and, secondly, because I think I have one point to make which was not made by the noble Lord, Lord Sinclair of Cleeve. It is a point on which there has been a great deal of discussion throughout all 157 the period of preparation of this Bill. One is aware of that; and the Government have conceded something in introducing subsection (3) which will expedite the procedure when the case comes before the Court. Yet there is still some feeling about it.
I noticed that the noble and learned Lord, the Lord Chancellor, said in regard to a previous Amendment that the Board of Trade had advised him that industry was not interested in that particular Amendment. I do not know whether he has received similar information from the Board of Trade about this one; but I know that I speak on behalf of a not inconsiderable section of industry who feel strongly about it. Why do they feel strongly about it—especially after this subsection (3) has been inserted? Because that subsection does not alter the fact that they will again have to go before the Court. Having already been "through the hoop", they must go through it again. They are told that the hoop is now a gateway and is not the same shape—and that is perfectly true. Yet it does not alter their feeling that they are being, as it were, put on trial twice for the same offence; and this is a point that was not made by the noble Lord, Lord Sinclair of Cleeve.
It is not only that for them the process is time-consuming and expensive, but also that public companies do not like having to go before a court to explain all the things they do. In a competitive world, that is very awkward and they object to it very strongly. They do not like having to do it unless it is absolutely necessary. In this case they feel that it is not necessary, and that the Government might be more considerate; and they do not like being "pushed about". That is, perhaps, a British characteristic. The soldiers have a song about it which expresses that in far more forcible and rather monotonous terms. But that is the sort of feeling that industry has on this particular point.
§ THE LORD CHANCELLOR
The noble Lord, Lord Sinclair of Cleeve, has put forward his Amendment with very considerable persuasion, but I am sorry to have to disappoint him by saying that I must advise the Committee to reject it. The effect of it would be that the Restrictive Practices Court would have power to make an exemption 158 order, would have to make an exemption order, without regard to the application of the gateways, in respect of goods which had been the subject of a Monopolies Commission Report in which the Commission had concluded that resale price maintenanceneither operated nor might be expected to operate against the public interest".It would be obligatory upon the Court to make an exemption order unless prima facie evidence was given of a material change in the circumstances which appeared to have led the Monopolies Commission to such a conclusion.
But the Amendment goes further than that. It would be open to the Court to make an exemption order—and without any reference to the gateways—even where there was evidence of a change in the circumstances. The Amendment is intended to facilitate the exemption of particular goods. Tobacco is one. There are other goods in relation to which the Monopolies Commission has expressed a view: standard metal windows and doors, tea and certain rubber footwear. I have already mentioned cigarettes and tobacco. It is only in relation to those goods that there can be any suggestion of being put "through the hoop" twice or put on trial twice for some offence. Naturally, those concerned with the maintenance of resale price maintenance in respect of those articles may feel it is rather bad luck that they should have to be brought before a different body—a court in this case—to deal with that particular matter. The Amendment applies only where resale price maintenance arrangements are registered. We have carefully considered this and feel that this Amendment is quite inconsistent with the principles of the Bill and with the provision that has been made for cases, such as net books, where there have been proceedings before the Restrictive Practices Court in which resale price maintenance was involved.
The intention of the Bill is that individual resale price maintenance in all trades, if it is to be permitted to continue, must be considered by the Restrictive Practices Court in the light of the criteria in Clause 5. As I indicated in discussing the last Amendment, the Government do not think that any goods 159 should be automatically exempted from any liability to be judged by the Court against these criteria. We have introduced the provision in Clause 5(3) providing that any finding of fact in proceedings under the 1956 Act before the Restrictive Practices Court is to be treated as conclusive as a finding of fact in exemption proceedings under the Bill, unless there has been a material change in the relevant circumstances. The effect will be that, where the clause applies, suppliers will not have to prove facts all over again, but it will remain the Court's function to decide in the light of the established facts if an exemption order should be made. The principle that the grounds for an exemption order should remain the same for every case is unimpaired.
Therefore, there is an enormous difference of principle between Clause 5(3) and any provision on the lines of this Amendment, under which it would be obligatory for the Court to make an exemption order, regardless of the application of the gateways, where another body with its special terms of reference had reached a certain conclusion. This would put the trades which have been before the Monopolies Commission and secured (if I may so call it) a favourable verdict, in an unusually privileged position simply because they had happened to be the subject of a Monopolies Commission inquiry and the Monopolies Commission had had to consider whether resale price maintenance contributed in any way to abuses connected with monopoly; because, unless there were such a connection, the Commission would have had no ground for commenting adversely on resale price maintenance. Its concern is with abuses which stem from or strengthen monopoly situations.
I do not think that it would be right to require a court of law to accept as proved facts the conclusions reached in an essentially administrative inquiry in a different field and on different criteria. But I would add that this does not mean that the effort which particular industries may have put into Monopoly Commission inquiries would go for nothing, if relevant to exemption proceedings under the Bill. The rules of the Restrictive Practices Court already provide for the Court to be assisted in determining any issue in the proceedings by the 160 admission of oral or documentary evidence, which would not otherwise be admissible under the law of evidence. It is already the practice of the Court to have regard to the contents of the reports of the Monopolies Commission where these would be relevant. It has done so, for example, in the Linoleum and Metal Window cases. And I can see no reason why a similar procedure should not be followed in exemption proceedings under the Bill. We take the view that this is the only practicable method of ensuring that decisions are reached on the merits of these trades (like all others), in the light of the criteria in Clause 5(2). For the reasons I have indicated, while I regret having to disappoint my noble friend, I must say that the Amendment is not acceptable to the Government, and I must ask your Lordships to reject it, if it is not withdrawn.
§ LORD SINCLAIR OF CLEEVE
I am grateful to the noble and learned Lord for the very full reply he has been good enough to give. I must confess that I have heard what he said not entirely without surprise but with a good deal of disappointment, disappointment in particular that his remarks seem to be so much related to the principles of the Bill as it stands (and I would certainly not presume to enter into argument with the noble and learned Lord on these) and so little to what I think is the underlying issue of supreme importance—namely, the public interest. On that, as I tried to establish, I believe that there is little difference between the two points of view, the point of view which the Monopolies Commission has determined and that which this Court has to establish. Of course, I accept that the Restrictive Practices Court must go into this specific gateway.
I hope very much that the noble and learned Lord can see his way to give some further consideration to the general point in this before Report stage, and, in reference to what I understood him to say towards the end of his reply, particularly to whether it might not be possible to adopt this Amendment, omitting the words in lines 11 and 12 as printed, "and shall make such an order". Though that would detract from the strength of the clause, it would still write into the Bill something to cover this point, which I feel is important, that the Restrictive 161 Practices Court may have regard to the conclusions of the Monopolies Commission in these matters. I hope that the noble and learned Lord will not say that this is completely unnecessary, but will be able to give it some further thought. On that basis, I should be very happy to withdraw my Amendment.
§ THE LORD CHANCELLOR
I should not like the noble Lord to be under any misapprehension. Naturally, we have thought about this a great deal. Even with the slight qualification he suggests, I am sorry that I really cannot hold out any hope that any further cogitations would lead to the acceptance of his proposal.
§ LORD SINCLAIR OF CLEEVE
I am very sorry to hear that. If I am in order to do so, I will refer to this again on Report stage, but, meanwhile, I beg leave to withdraw my Amendment.
§ Amendment, by leave, withdrawn.
LORD SHEPHERD moved, after subsection (3), to insert:
() In any case where the Restrictive Practices Court on a reference made to it determines that no order under this section is to be made in respect of goods of a specified class, the Court may nonetheless, if it is satisfied that special circumstances make it reasonable so to do, make an order that the provisions of section 2 of this Act shall not from a date to be specified in the order apply to any supplier of that class of goods in respect of such goods.
§ The noble Lord said: In view of the hour, I will be as brief as I can on this Amendment. I wonder whether the Government can give us some indication of the type of classification that will be considered by the Court. To take textiles as an example, do the Government intend that the Court should examine the whole of the textile range or make their decisions on woollens, cottons and manmade fibres separately? The reason why I should like this information is that, if we are going to have a broad classification, there may be cases in which a particular manufacturer or supplier, for some special reason, is entitled to protection under Clause 2. If the Court is going to decide on a fairly narrow basis, then obviously the point of view of the individual supplier will be taken note of and will have a bearing on the decisions, but if it is going to decide on a fairly wide range then the position of the in- 162 dividual supplier, who may need special protection, may be affected in regard to the quality of his goods for the export market. I wonder whether the noble lord, Lord Drumalbyn, can help us in regard to the extent of the classifications on which the Court will decide. I beg to move.
Page 6, line 24, at end insert the said subsection.—(Lord Shepherd.)
§ THE LORD CHANCELLOR
So far as the extent of the classification is concerned, I am afraid I cannot give the noble Lord any positive information, except to say this. People will register goods for which they want exemption. It will then be for the Registrar to classify them as convenient. How extensively or how narrowly that will be done is a matter, in the first instance, for the judgment of the Registrar. But there is, as your Lordships will see, an appeal provided in the Bill against the Registrar's decision as to classification. I can only speculate, but I should think it highly unlikely that the classification would be so wide as to apply to all textile goods, or anything of that kind. I think it would make the goods much more identifiable. The Bill is designed in this way: the Registrar will decide in the first place, and people interested can then appeal against his decision.
§ LORD SHEPHERD
I thank the Lord Chancellor for that reply, but I would invite him to consider, on this point of classification, whether we could not perhaps make a little clearer to the Registrar the way in which he might, as it were, build the classification of goods to be considered by the Court. I think it would make a considerable difference to many suppliers, and also retailers, if they knew fairly well in advance that it would be a narrow definition and not a wide one. If it is put in on a wide basis, then I think there is a greater case, which we could come back to on Report, for making it possible for suppliers to have exemption, if in the view of the Court there is some special circumstance arising, while the general classification would continue. If the noble and learned Lord will consider this, I am quite happy to withdraw the Amendment.
§ THE LORD CHANCELLOR
I will, of course, consider that between now and Report. I am doubtful whether I can give the noble Lord any further assistance on it, because it must be for the Registrar, when he sees what goods are registered, to classify them in the most convenient classes possible for handling before the Restrictive Practices Court. As I said, if anyone does not like the classification, he can always appeal against it, and provision is made for this in the Bill. On the question of knowing in advance what goods are registered, I do not think it will be possible for me to give the noble Lord much assistance, but I will consider the matter between now and the Report stage.
§ LORD SHACKLETON
I should like to ask one question. The noble and learned Lord said that anybody can appeal against this classification. I have been looking at the Bill, but I am not clear where this appears. Does he mean anybody, or only interested parties?
§ THE LORD CHANCELLOR
I am afraid that, at this late hour, I said "anybody" when I naturally meant "anybody interested"; that is to say, interested parties. This is dealt with, as your Lordships will see, by Clause 8(3)(a), and it will be dealt with by rules.
§ Amendment, by leave, withdrawn.
§ 6.44 p.m.
LORD LINDGREN moved to add to the clause:
(5) Any order under this section directing that goods of any class shall be exempted goods may also be made by the Restrictive Practices Court if it appears to the Court that purchase tax, excise duty, and similar charges payable before the goods are offered for sale by retail would amount to more than half of the cost of such goods to the dealer.
§ The noble Lord said: Taking the hint from my noble friend Lord Shepherd, too, propose to be brief, and particularly as this Amendment is really a variation of an Amendment that was put clown in another place and fairly fully discussed there. Everyone will agree, I think, that where there is a commodity on which the excise duty, purchase tax or similar charge is over 50 per cent. of the price of the goods before they go on to the market—and one must have in mind the cost of manufacture and distribution— 164 there is litle room for manœuvre in regard to the general question of price-cutting, except perhaps where there are large-scale retailers, supermarkets and the rest, who can buy in great bulk and perhaps get greater discounts, thereby enabling them to indulge in this practice.
§ A case in point is the off-licence. I have received a letter from an association representing off-licensees in this country, and no doubt other noble Lords have, too. They feel that if they are to maintain a reasonable trade with stability, and to give reasonable service, then an Amendment such as this is necessary. It very likely covers many other goods as well. I beg to move.
Page 6, line 33, at end insert the said subsection.—(Lord Lindgren.)
§ LORD DRUMALBYN
I hope that I, too, shall be able to reply to the point quite briefly. The attitude of the Government is that it hardly seems that the rate of tax, or the fact that duty represents a substantial element in the price, is material to the question of whether there is or is not a case for maintaining the resale price. It is true that there may be less scope in such cases for retailers to make price reductions, or at any rate significant price reductions, in relation to the maintained resale price. But there seems to be no reason why they should not be permitted to make what reductions they can in cases where there is no ground for exemption under Clause 5.
The difficulty inherent in exemptions of this sort is that it makes an entirely arbitrary provision as to what sort of goods should be exempted; and because it is arbitrary, and because of the nature of the various taxes, excise duty and so on involved, it would operate quite haphazardly. For example, spirits would qualify for exemption, but not beer. Whether petrol lighters or scents would qualify would depend on their prices, because the duties on these goods are specific and so the ad valorem incidence is greater the lower the price. If at any time there were changes in the rate of duties or tax, in that case goods could quite by chance be brought within the exemption range or be excluded from it. I think I have said enough on this to show that this (quite apart from the drafting of the clause, which does not make it clear whether customs duty 165 would be included or not; and, if it were not, tobacco would be outside) would not be a possible criterion to apply because it would operate so haphazardly.
§ LORD LINDGREN
I thank the noble Lord for that reply. It is not exactly convincing, because these are all goods of standard manufacture. He mentioned wines and spirits, and said that beer would not be included. That is my beverage, and my trouble is to find out what the price is, because as I go from bar to bar the price seems to vary. Certainly there is no resale price maintenance in that connection. However, I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
LORD LINDGREN moved, to add to the clause:
() Any order under this section directing that any goods of any class shall be exempted may also be made by the Restrictive Practices Court if the Court is satisfied that there is adequate competition between the suppliers of the goods and that the minimum resale prices applicable to the goods are not greater than necessary to ensure the efficient distribution of the goods in the United Kingdom.
§ The noble Lord said: This is another gateway Amendment, and I think it at least has the advantage that its wording is clear and easily understood. The Amendment really sets two tests which would appear to justify the continuance of resale price maintenance on any class of goods. To restate them—although they are stated quite clearly in the Amendment—they are, first, where there is adequate competition between suppliers of the goods, and, secondly, where the minimum resale price applicable to the goods allows of a margin sufficient only to ensure efficient distribution. I have admitted that it would cover a wide variety of goods; and that is perhaps an argument against the Amendment. But in view of the two safeguards which are quite stringent and I think would be effective, I beg to move the Amendment.
Page 6, line 33, at end insert the said subsection.—(Lord Lindgren.)
§ LORD SINCLAIR OF CLEEVE
Despite the lateness of the hour, I hope that I may be allowed to say a few words in support of this Amendment, because it seems to me to be of particular importance. The Bill, as I see 166 it, suffers from an absence of any positive encouragement of freer competition, and this Amendment underlines that omission. When I saw it, I felt it covered a point that I tried to make on Second Reading—a point particularly relating to the boot and shoe trade. In an industry where both systems operate —price maintenance and non-price maintenance—and where there is absolutely free competition between the suppliers in that industry; where the price-maintained sector of the trade is considerably smaller, but growing at the expense of the other, and where the distributors' margins in the pricemaintained sector are in general lower, and in some important brands very much lower, than in the non-price-maintained sector, then in some circumstances I cannot see how it can be in the public interest to compel the cessation of resale price maintenance. Yet the only possible gateway for a case of this type is subsection (2)(c) of Clause 5.
That requires the manufacturer concerned—the plaintiff, that is—to prove to the Court that in the event of the cessation of the practice the prices at which the goods are sold by retail would in general, and in the long run, be increased to the detriment of the public as consumers and users. That is a difficult thing for a minority manufacturer to prove. Surely, this Amendment is good. As the noble Lord, Lord Lindgren, said, it is not an unduly wide gateway, for it is restricted by the Court's judgment of the reality and adequacy of the competition between the suppliers, and by the Court's being satisfied that the distributor's margin is not greater than is necessary to secure efficient distribution. I hope that the Government will be prepared to consider accepting this Amendment, or something very much like it.
§ 6.54 p.m.
§ LORD DRUMALBYN
The noble Lord, Lord Lindgren, and my noble friend Lord Sinclair of Cleeve have both adduced very strong arguments in this case, but I think they were probably aware from the start that they would have to be exceedingly strong arguments in a case like this in order to enable them to overcome the natural disinclination of the Government to admit the making of an exemption order which 167 would by-pass any argument about detriment to the public. In this case, as the noble Lord said, the Amendment would permit the Court to make an exemption order where it appeared that there was adequate competition between the suppliers of the goods in question, and that the minimum resale prices applied werenot greater than necessary to obtain the efficient distribution of the goods in the United Kingdom".The trouble here is that there is a fundamental objection to an Amendment on these lines. It is at variance with the whole concept and basic intention of the Bill.
As my noble and learned friend said on the last Amendment, the Government believe that the rigidity of the resale price maintenance system is itself necessarily undesirable, except where one of the specific benefits to the public set out in the gateways can be shown. The primary purpose of the Bill is to permit greater competition (and I am afraid one has to keep saying this in the course of the discussion of the Bill) between distributors, and so to introduce more flexibility into the distributive trades. However many manufacturers there may be in competition with one another in a particular field, if all shops sell each brand at uniform prices there is to this extent no scope for price competition between the shops: there is only competition between the manufacturers.
I was not quite clear about the argument which my noble friend Lord Sinclair of Cieeve put forward. He said that in the boot and shoe trade one of the factors was that in the price-maintained sector in that trade margins were lower. I think we must be careful about adducing an argument to show something which it may not show at all. I wonder whether the margins are lower because the goods are price-maintained, or because the goods are advertised. To the extent to which a manufacturer advertises his goods, he is bearing part of the expense of selling: he is helping to sell the goods.
§ LORD SINCLAIR OF CLEEVE
May I say a word in explanation? Of course the goods are advertised as well as price-maintained, and I agree that advertising 168 certainly has an effect on the situation. But the goods in the non-price-maintained sector are also advertised. In this particular case in the boot and shoe trade, as I understand it, the lower margins are accepted by distributors on the grounds of having fewer sizes and fewer makes to stock, and of being assured of a more rapid turnover as a result of the advertising and quality of the product. So they are satisfied that in the aggregate on their sales of these particular classes of goods they are making a satisfactory profit, although the actual margin per pair, or dozen pairs, of shoes, or whatever it may be, is, on the whole, lower than in the non-price-maintained sector. I think this is a real case.
§ LORD DRUMALBYN
I appreciate what the noble Lord has said, but again, as he has put the case now, it seems to me that he is adducing further points in which margins are lower, not only because they are price-maintained, but for other reasons. I think this is the effect of what he has said.
§ LORD SINCLAIR OF CLEEVE
I did not endeavour to argue that the margins are lower only because they are price-maintained.
§ LORD DRUMALBYN
I accept that. It seems to me that we have to consider the point that the competition we are aiming to produce within this Bill is competition between distributors, and to the extent that we allow price maintenance to continue among distributors we are reducing competition in distributive trades. But there is, of course, another objection to this Amendment, and that is that it is extremely difficult to say what would be the single appropriate price for the Court to determine here, because low-cost distributors can well afford, and may well wish, to sell more cheaply than shops offering a higher standard of service. That is another difficulty about this Amendment.
The third point is the general point which my noble and learned friend raised in a different connection, but which I believe applies equally to this Amendment; that is, that whether there is adequate competition between suppliers, and particularly whether the resale prices applied are greater than is 169 necessary to ensure the efficient distribution of goods in the United Kingdom, are not really justiciable issues. It is not possible for the Court to pronounce on matters of that kind. For those reasons, I hope that the noble Lord will not press his Amendment.
§ LORD LINDGREN
I thank the noble Lord for that reply. He said in his opening statement that he would have expected that any argument in favour of the Amendment would have to be exceedingly strong if it were to pierce the armour of the Government Front Bench. That is true, because it has been "No, no, no" all the way through, irrespective of the likely effect of the Amendrnent on trade, industry, the consumer or the manufacturer. I am most grateful to the noble Lord, Lord Sinclair of Cleeve, for calling attention to the boot and shoe industry, which was a staple industry in a constituency which I had the honour to represent in another place. It is an extremely good example, and, of course, there are very many others. In view of the attitude of the Government and the representation in the House at the present time, I beg leave to withdraw the Amendment.
§ Amendment, by Leave, withdrawn.
§ Clause 5, as amended, agreed to.
§ Clause 6:
§ Registration of goods for exemption
§ (2) Within the period of three months from the commencement of this section, any supplier who supplies goods under arrangements for maintaining minimum prices on resale, or any trade association whose members consist of or include such suppliers, may give notice to the Registrar in respect of goods of any description so supplied by that supplier or those suppliers claiming registration in respect of those goods.
§ 7.2 p.m.
§ LORD JESSEL moved, in subsection (2), to leave out "three" and insert "five" [months]. The noble Lord said: I suggest that this Amendment is necessary as the existing time-table laid down by the Bill is very tight. Clause 6 will come into force one month after the Act receives Royal Assent, and as the clause is at present drafted, suppliers will have to register within three months of its coming into force.170
§ Bearing in mind the time it will take for suppliers to have the Act brought to their attention as something requiring positive action on their part, and the time they will then need to take legal advice and to receive all the relevant forms, I suggest that this is not long enough. It ought to be at least six months from the date when the Act receives Royal Assent, especially having regard to the serious consequences to people who fail to register in time.
§ For the sake of comparison, the final date by which the parties to restrictive agreements were required to furnish particulars of such agreements to the Registrar under the Act of 1956 was seven months after the commencement of that Act, and the consequences of failure to register in time under that Act were less serious than the consequences of a failure here. A period of six months from the date when the Act was passed cannot be said to be unduly long. I beg to move.
Page 6, line 42, leave out ("three") and insert ("five").—(Lord Jessel.)
§ THE LORD CHANCELLOR
I think that after the debate upon this Bill every supplier in the country who engages in the practice of resale price maintenance must be aware that the Bill is going through Parliament, and I would ask the Committee to bear in mind what he has to do. First of all, he has to decide whether he has to seek to get exemption under this Bill so that he can continue to practise resale price maintenance. He will not want to consult lawyers on that at this stage. He knows that the only step he must take is to register. Claiming registration is not going to be a particularly onerous task; and I would say to my noble friend that three months, I should have thought, would give ample time for suppliers to decide whether they want to register and to cope with the necessary documentation which is involved in registration. Once they have registered, as your Lordships know, their goods will be exempt from the prohibitions in the Bill until the matter has been before the Court.
Handling the notices claiming registration will mean a lot of work for the Registrar, but this would not be lessened by extending the period for registration. 171 Any extension in period for claiming registration will mean a comparable delay in the period before the provisions in the first Part of the Bill can be brought into force. Believing, as we do, that suppliers will realise what little has to be done to effect a registration, we consider that the three months' period which would befall from the enactment of the Bill is really sufficient. Therefore I would ask my noble friend not to press this Amendment.
§ LORD JESSEL
I thank the noble and learned Lord for his explanation and beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ 7.7 p.m.
LORD COLERAINE moved, after subsection (2) to insert:
(3) Such a notice as is mentioned in the preceding subsection may be given at any time in respect of goods which have not been the subject of any previous notice to the Registrar and which, at the time of the giving of the notice, were not being supplied by any supplier under arrangements for maintaining minimum prices on resale.
§ The noble Lord said: The intention of this Amendment is to raise again the ghosts which were only partly laid in the debate on Clause 1 on the Amendment of the noble Lord, Lord Shepherd; the rather unhappy ghosts of those new products which, unless this Bill is amended, will probably be strangled at birth and never see the light of day. In that debate my noble friend Lord Drumalbyn committed himself to some statements which I hope he will agree on reflection were a little extreme. He said that any Amendment proposing special treatment for new products would drive a coach and horses right through the Bill; there could be no doubt of that. I seriously suggest to him that that is an unreasonable attitude to maintain. If new products require special treatment in order to be launched on the market, it surely does not drive a coach and horses through the Bill if, for a temporary period, they are given special treatment to meet their special difficulties.
§ My noble friend also said, I think, that there are thousands of new products which come on to the market without the help of resale price maintenance. I have no doubt that is true, but there 172 are also some new products which, I am sure, can never reach the market without the support of resale price maintenance. One has to realise that when a manufacturer puts a new product on the market, not only is he taking a risk —and he is taking a risk because he does not know whether there is any public demand or whether the public will like it—but the retailer also is taking a very big risk. He has to make a very heavy investment in stock, and a heavy investment in shelf space, which is perhaps more valuable, in order to try to promote a product for which there is no public demand whatever and for which there may never be any public demand. He is only going to do this if he is assured that if the product is successful and there is a public demand he will profit from it. That is why, generally speaking, it is necessary to have higher and more stable margins with a new product than with an existing product.
§ One case comes to my mind, although I was not concerned in it myself. Some years ago an electric spit was put on the market for domestic use. It was an expensive piece of apparatus and the retailer had to make a pretty heavy investment in stock. It was a bulky piece of apparatus, and he had to give up a good deal of his shelf space to it. If it had not been price-maintained he would not have taken it on, and this very useful piece of equipment would not have come on to the market.
§ I think there is a more valid point in this than my noble friend was prepared to admit the other day on Clause 1. The Government recognise that there is a problem with new products under the Bill, and that is why I have no doubt my noble and learned friend on Second Reading, on the problem of new products and referring to Clause 7, said that this clause will also permit suppliers of new products to seek exemption. But Clause 7, in fact, gives no real help at all to anyone trying to launch a new product; because before the product is launched they have to apply to the Court; the Court has to deliberate, and it would be, I should think, at the most hopeful estimate, a year and probably longer before any answer came. No supplier is going to develop a new product to the point of 173 marketing it and then wait a year or eighteen months before he knows whether he can market it or not; and his only alternative is to market it without resale price maintenance, in the knowledge that almost certainly he will not find distribution for it and the product again is killed.
§ I think one has to realise that this question of the marketing of new products is a special problem for the relatively small manufacturer. The big manufacturer, who can afford heavy advertising, who is prepared to stand a heavy loss for two or three years in the knowledge—he has so much confidence—that in the end it will come out all right, is in one position and he can face up to the Bill. But the relatively small manufacturer, who is not a big advertiser and cannot afford to stimulate a public demand, relies entirely on distribution, and he will not get that distribution unless the retailer gets some special treatment under the Bill. I hope that the Government will consider the point behind this Amendment. I dare say the Amendment is imperfect, too wide and imprecise. I know there are all kinds of difficulties of definition. But there is a real problem, and I hope the Government will consider it and take some steps to deal with it later on. I beg to move.
Page 7, line 3, at end insert the said subsection.—(Lord Coleraine.)
§ THE LORD CHANCELLOR
My noble friend has raised again an issue which we debated at some length at the earlier stages of this Bill, and I thought a great deal of what he said was really answered in the course of that debate by the noble Lord, Lord Lucas of Chilworth.
§ THE LORD CHANCELLOR
I only expressed my view; I said I thought it was. My noble friend may not have thought it was. But I really cannot accept his proposition that you cannot put a new product on the market without resale price maintenance. That is the underlying theme of his speech, and I do not believe that is the case at all. Of course, if you are going to engage in a trade and try to sell an article when everything else is price-maintained, the retailers will expect some price main- 174 tenance in relation to the article that you are marketing. But in the future it may not be that the other articles of that line are subject to resale price maintenance. I do not want at this hour to go back to the debate that we had, but I must say to my noble friend that we really cannot accept the Amendments that he proposes, on account of the effect they would have.
As the Bill stands, the compilation of a register is a once-for-all operation, and then you get the temporary exemption which follows upon that; and the only goods that can be registered are, of course, goods in respect of which resale price maintenance arrangements are carried on. Suppliers of goods not on the register, either because during the registration period suppliers were not maintaining price or did not wish to seek exemption or because the goods in question were not then in production, must seek exemption under this Clause 7. This requires the leave of the Court, and the applicant must show prima facie evidence of facts on which an exemption order could be made. That is what the Bill provides.
These Amendments would do away with that procedure. Instead, suppliers of goods which had not been the subject of any previous notice claiming registration would be permitted to give notice at any time to get their goods on the register at any time, and so, at any time, gain freedom to practise resale price maintenance until their case had been heard. The effect would be to extend the registration procedure indefinitely, and the three months' limit for initial registration would become virtually meaningless. I am sure, having said that, that the noble Lord will appreciate that the Amendment is one that we really cannot accept.
He has confined his observations to the supply of new goods, the manufacture of new goods, and I make this point: that although his speech was confined to that, this Amendment goes far wider. If my noble friend likes to put forward between now and Report stage any suggestions which he thinks might meet the particular case that he has so much at heart, I can say, of course, that we shall gladly consider what he suggests. But this Amendment is not one it would be possible for the Government to accept, and I hope my noble friend will excuse me, 175 therefore, from saying anything more on the matters which we debated at an earlier stage.
§ LORD COLERAINE
I accept what my noble and learned friend said about the wide scope of this Amendment, and certainly if I can think of a form of words which will deal with the new products aspect of it satisfactorily to my noble and learned friend, I will put it down. But I would say to the noble and learned Lord the Lord Chancellor that it struck me that he was under a misapprehension about my argument. I was not arguing that no new product can be launched without resale price maintenance; I was arguing that there are a number of new products which cannot be launched without the retailer's being assured of a fairly high margin during the launching period. It is not so much that the retailer must be protected by resale price maintenance as that if it is to be worth his while to launch this new product, to take this gamble to try to stimulate a public demand which does not exist at all, then he must have a higher margin than he would need with the normal range of goods with which he is dealing. However, I certainly have no wish to detain your Lordships any longer, and I would ask leave to withdraw the Amendment.
§ LORD SHEPHERD
Before the noble Lord withdraws it, may I say that this is an interesting point. I think the noble and learned Lord the Lord Chancellor said at an earlier stage that there was nothing to prevent a supplier from making arrangements for the marketing of his goods so as to ensure that the goods are marketed as I think the noble Lord, Lord Coleraine has in mind. I think that is the case: that in an early stage of new goods a supplier would be quite entitled, as I understand it from the Lord Chancellor. to so market his goods that it would prevent acute competition coming in by one or two individuals which would upset the general marketing of a new line. I think that is the case.
§ LORD COLERAINE
As I understand the noble and learned Lord the Lord Chancellor, it would be open to the supplier to restrict the number of retailers; but if he wants an opportunity 176 to launch his new product, that probably is the very last thing he wants to do. He wants as wide a distribution as he can get.
§ THE LORD CHANCELLOR
I think the confusion here is this. If there is no resale price maintenance the retailer can fix any price he likes that he thinks he can get from the public. It will not rest with the manufacturer to say, "Sell my goods at so-and-so". The retailer, having got the goods and having made whatever contract he likes with the manufacturer, will then be free to charge what price he likes.
§ LORD COLERAINE
Yes, but that is of very little help in this connection, because while the individual retailer can charge whatever price he likes, he has no guarantee that he will not be undercut by the big chain store just round the corner, and that he will not dispose of these goods at all. However, I do not want to get involved in further argument. I would ask leave to withdraw this Amendment, but before the Committee gives me leave perhaps I may say that, if I am given leave to withdraw it, I do not propose to move the further Amendments in my name on the Marshalled List because they are in essence consequential.
§ Amendment, by leave, withdrawn.
§ 7.20 p.m.
§ THE LORD CHANCELLOR
It might be convenient to deal with the next four Amendments together. Amendments Nos. 38, 39, 40 and 41 are all drafting Amendments. I will explain them to your Lordships if your Lordships desire, but I think your Lordships would find it singularly uninteresting. I beg to move.
Page 7, line 9, after second ("of") insert ("a class of goods consisting of or comprising").—(The Lord Chancellor.)
§ On Question, Amendment agreed to.
Page 7, line 10, leave out from ("entered") to end of line 10.—(The Lord Chancellor.)
§ On Question, Amendment agreed to.177
Page 7, line 17, leave out ("class are included") and insert ("description are included in a class specified").—(The Lord Chancellor.)
§ On Question, Amendment agreed to.
Page 7, line 20, leave out from ("goods") to ("shall") in line 21 and insert ("of any description are not included in any such class".)—(The Lord Chancellor.)
§ On Question, Amendment agreed to.
§ Clause 6, as amended, agreed to.
§ Clause 7:
§ Late applications to, and review of decisions by, the Court
§ 7.—(1) The Restrictive Practices Court may, upon application made in accordance with this section at any time after the expiration of the period mentioned in section 6(2) of this Act, make such an order as is described in section 5(1) of this Act in respect of goods of any class, being goods in respect of which no notice claiming registration was given under the said section 6 within that period.
§ (4) No application shall be made under this section except with the leave of the Court; and such leave shall not be granted—
§ (a) in the case of an application under subsection (1) of this section, except upon prima facie evidence of facts upon which an order could be made in accordance with section 5(2) of this Act in respect of the goods in question, or could be so made if any detriment to the public resulting from the maintenance of minimum resale prices were disregarded;
THE LORD CHANCELLOR moved, in subsection (1), to leave out all words after "class" and insert:
not being goods of which particulars are entered in the register kept under the said section 6 or goods in respect of which a previous application has been made under this subsection".
The noble and learned Lord said: This Amendment makes two minor modifications in the provision for late applications for exemption. First, it restricts late applications to goods
not being goods of which particulars are entered in the register
instead of goods
in respect of which no notice claiming registration was given".
This will make it simpler for the supplier who wants to know whether he is entitled to make a late application. The easiest way for him to do this will be to look at the lists published by the Registrar, which by virtue of Clause 6(4) will be conclusive evidence of what is on the register. There will be no need for him to concern himself with the form in which notice was given.
§ Secondly, the Amendment will prevent late applications on goods in respect of which a previous late application has been made. There was a loophole there which is now filled. I beg to move.
Page 7, line 39, leave out from ("class") to end of line 41 and insert the said words.—(The Lord Chancellor.)
§ LORD JESSEL
I should like a little further explanation from the noble and learned Lord the Lord Chancellor. Does this mean that the late applicant is in a worse position than the ordinary applicant, in that a late applicant can never apply again?
§ THE LORD CHANCELLOR
No; it does not mean that. What it does mean is this. Clause 7 deals with those two kinds of application. The application under subsection (1) is the only one affected by these Amendments. Where the application is under subsection (1) you have to make it with the leave of the Court; and as subsection (1) stands now you could have repeated applications with the leave of the Court.
§ THE LORD CHANCELLOR
Even if the first one was a late one. We do not think that is right. The right thing to do is this: if he has made one application and had it turned down; then the late applicant ought to apply under subsection (2), and my noble friend will see that he has to show that there is prima facie evidence of a material change in the relevant circumstances since the last decision of the court in respect of the goods. So the late applicant is not prejudiced; but this second part of the Amendment does prevent what might develop into an abuse, repeated applications under subsection (1) when the second application to the court really 179 ought to come under subsection (2). That is all it does.
On Question, Amendment agreed to.
§ Clause 7, as amended, agreed to.
§ Clause 8:
§ Supplementary provisions as to registration, references and applications
§ (2) The Schedule to the said Act of 1956 (proceedings of the Restrictive Practices Court) and, so far as applicable, section 23 of that Act (rules of procedure) shall apply in relation to proceedings before the Court on a reference or application under this Act, as they apply in relation to proceedings on an application under Part I of that Act, and as if references to agreements in the said section 23 included references to classes of goods:
§ Provided that notwithstanding anything in the said Schedule the Court may order the payment by the Registrar of all or any of the following costs incurred by any other party, that is to say—
§ THE LORD CHANCELLOR
Again this Amendment is really drafting. It slightly widens the Registrar's powers to make regulations. I can again explain it to the Committee if the Committee wishes, but I think that anyone who studies it will see that it is so much drafting that I need do no more than say that I will answer any questions upon it. I beg to move.
§ Amendment moved—
Page 8, line 32, leave out from ("the") to ("relates") in line 35 and insert—
("manner in which notice claiming registration in respect of goods is to be given under that section;
(b) for prescribing the particulars to be included in any such claim of the descriptions of goods to which it").—(The Lord Chancellor.)
§ On Question, Amendment agreed to.
Page 8, line 37, at end add ("and the documents to be furnished in support of any such particulars").—(The Lord Chancellor.)
§ On Question, Amendment agreed to.
Page 8, line 38. leave out paragraph (b).—(The Lord Chancellor.)
§ On Question, Amendment agreed to.180
§ 7.27 p.m.
VISCOUNT HANWORTH moved to add to subsection (2):
(c) costs incurred on a reference under section 5 of this Act or on an application under section 7 of this Act where the Court has made an order directing that goods of any class shall be exempted goods for the purpose of this Act.
§ The noble Viscount said: I should like to speak on behalf of my noble friend Lord Jessel on this Amendment. It deals with the costs of proceedings when a firm applies to the Restrictive Practices Court. As things stand at the moment, whether that firm or supplier are successful or not, they still have to pay their own costs. I should like to put forward three reasons why I think this is possibly a little unfair. In the first place, the practice of resale price maintenance has never been regarded, either at Common Law or by Statute, as contrary to public interest, and the present legislation recognises that in certain cases its practice may confer real and substantial benefit on the public. It would therefore seem right that the public having this benefit given to them might well foot the bill.
§ The other reason is that there are many small firms to whom the costs which might be incurred in such an application represent a considerable risk. They do not know beforehand how much it will cost, and therefore they may not feel justified in making the application. The application may, in fact, be in the public interest, and we are deterred from making such an application. The present Bill recognises that it is not necessary, and would not be fair as a general rule, to impose the Registrar's costs upon suppliers who had failed to discharge the heavy burden of proof in a complex matter; though, of course, if for any reason their application is considered frivolous, or it is felt that it should not have been made or was not made in the right way, the costs can be awarded against them. I should like this Amendment seriously considered. I beg to move.
Page 9, line 28, at end insert the said words.—(Viscount Hanworth.)
§ THE LORD CHANCELLOR
I can assure my noble friend that this Amendment has been seriously considered, but the result of that consideration is, I am 181 afraid, wholly unsatisfactory to him. He would not for one moment, I imagine, like the Court to be in the position to award costs to either side; and I do not suppose that the small man who is applying for exemption would in the least welcome the idea that in some events he might get his costs before this Court and in others might be ordered to pay the Registrar's costs. Having considered it, I really do not think it would be right to go further than we have in the Bill in making provision for the payment of costs for those who apply for exemption.
The practice in the Restrictive Practices Court is not to award costs: each party pays its own costs. But we have recognised here two sorts of cases in which it is right to pay the costs where the issue has been determined in the other party's favour: first, where the issue substantially corresponds with an issue so determined in proceedings under the 1956 Act, and, second, in review proceedings. I am afraid that we cannot go further than that.
§ VISCOUNT HANWORTH
I thank the noble and learned Lord for the assurance that the matter has been fully considered. I am not convinced that if this were agreed to it would necessarily mean that the firm or supplier applying need have the costs of both awarded against him, but I do not wish to press the Amendment. I beg leave to withdraw it.
Amendment, by leave, withdrawn.
§ Clause 8, as amended, agreed to.
§ Clauses 9 and 10 agreed to.
§ Clause 11 [Interpretation]:
VISCOUNT HANWORTH moved to add to subsection (2):
provided that no company shall be liable to civil proceedings under section 4 of this Act in respect of any act or omission of any other company unless it would be liable thereto apart from the provisions of this subsection".
§ The noble Lord said: I should also like to speak to this Amendment—
§ THE LORD CHANCELLOR
Might I again save time by saying that this Amendment has drawn our attention to a slight defect in the Bill which might, as drafted, produce some anomalies? We should like to give tome further con- 182 sideration to the matter, and if the noble Lord, having spoken to his Amendment, will now withdraw it, that will save time.
Page 10, line 43, at end insert the said proviso.—(Viscount Hanworth.)
§ VISCOUNT HANWORTH
I thank the noble and learned Lord for what he has said, and beg leave to withdraw the Amendment. I should like to assure the noble and learned Lord that I had only five lines to say on the subject.
§ Amendment, by leave, withdrawn.
§ Clause 11 agreed to.
§ Clause 12 [Application to Scotland and Northern Ireland]:
LORD CONESFORD moved, in subsection (2), after "had not" to insert "been". The noble Lord said: This is a small drafting Amendment, the reason for which is as follows. Let me say at once that I, of course, agree that one can use the "pass" in an intransitive sense in saying, the "Act passes", or one can use it in a transitive way, in the sense of passing an Act or an Act being passed. But I think that there is some convenience in sticking to the one practice or the other throughout neighbouring clauses. The Committee will observe that in this sentence the Bill says that the Northern Ireland Parliament shall have the same power
to pass Acts with respect to any matter as they would have had if this Act has not passed …
using the word "pass" in the transitive and intransitive sense in the very same sentence. If one looks a little lower down, to Clause 14(2)(a) one sees a reference to "the date on which this Act is passed". So that I think there would be more uniformity of practice if the word "been" were inserted here. I beg to move.
Page 11, line 8, after ("not") insert ("been"). —(Lord Conesford.)
§ THE LORD CHANCELLOR
I do not propose to debate the question of grammar with my noble friend tonight. All I can say now is that I will make sure that the draftsman has the noble Lord's observations drawn to his attention. If it is of any comfort to the noble Lord, the provision which he is seeking to amend is in common form and is identical with the comparable provisions in Section 37(1) of the Restrictive Trade Practices Act, 1956, and Section 21(1) of the Monopolies and Restrictive Trade Practices (Inquiry and Control) Act, 1948. The word "been" is not used in this form of provision, and therefore my advice is that as a matter of custom, practice and precedent the Amendment is not required.
§ LORD SHACKLETON
May I say that on a matter of such moment the Opposition would certainly not wish to commit themselves—at least, not quite so close to a General Election. I must say that, on an issue of this kind, I am rarely in disagreement with the noble Lord in matters of English. Indeed, I sometimes think that it would be unduly conceited to agree at all with him, rather than just to follow in the expert lead he gives. But on this matter I think he is in fact wrong, and for this reason we would probably support the Government.
§ LORD CONESFORD
I agree entirely with my noble and learned friend the Lord Chancellor that this Amendment is not required, and in a moment I shall withdraw it. But I would point out to the noble Lord, Lord Shackleton, that, if he holds this view strongly, he might put down an Amendment to Clause 14 to leave out the word "is". Then he would have the whole thing consistent in the way he likes it. Having said that, I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Clause 12 agreed to.
§ Clause 13 agreed to.
§ Clause 14 [Short title, commencement and transitional provisions]:
LORD GARDINER moved, in subsection (2)(c), after "months" to insert "and not more than nine months". The noble Lord said: The Government so
far have not been very appreciative of all our efforts to try to help them with this difficult Bill, but I am glad to find at the last moment an Amendment which I am sure they will accept with great pleasure. The effect of this clause is to provide first that the clauses to do with the Registrar and the judges, and so forth, come into force on the passing of the Act; then the clauses with regard to the Restrictive Practices Court come into force a month after the beginning of the Act. But Clause 1—which, after all, is the only clause that is going to work, the one which may abolish resale price maintenance—is not, according to this clause, to come into force on any specific date. It is to come into force
not less than three months after the expiration of the last-mentioned period
—that is, one month. So it is not to come into force until four months after the Act receives the Royal Assent, but there is no provision that it shall ever come into force at all.
§ After all the talk and time that has been taken up on this Bill, I would suggest for the consideration of the Committee that we ought to insert some period of time in which it ought to come into force—three months, six months, or nine months, as the Amendment says. I will make a sporting offer to the Government: if they want a year, I will agree to a year. But there should be some maximum period. We shall no doubt be told, "We have every intention of bringing it into force. We do not know how long the Registrar will be in drawing up his list." But I should have thought that nine months (which means ten months after the Act has been passed), was an outside period, and while ordinarily one would accept the assurance of the Government that they did intend to bring it into force, when I observe that four months from today is October 23, obviously no such assurance is of any value at all. By that time we may have a Government of the same or of a different persuasion, but nothing that is said tonight can bind any future Government. It is for these reasons, and because some of us believe that at the end of the day retailers should, save as to exempted goods, be free to re-sell at any price they like—and that will not happen until Clause 1 comes into force —that I beg leave to move the Amendment.185
Page 11, line 28, after ("months") insert ("and not more than nine months").—(Lord Gardiner.)
§ THE LORD CHANCELLOR
I am astonished at the optimism of the noble and learned Lord at this late hour of the evening, but I am sorry that once again I have to disappoint him. This is an Amendment which was also discussed in another place, and I repeat the assurances given then, that there will be no unnecessary delay in bringing the provisions of this Bill into force. I do not share any of the doubts expressed by the noble Lord as to the power of this Government to implement that undertaking.
§ THE LORD CHANCELLOR
But, be that as it may, there are practical reasons why it would be wrong to tie the Board of Trade's hands to a specific timing. It I may give one example quite shortly, the Board of Trade would not want the prohibition to take effect until the Registrar's published lists of registered goods were substantially complete. This is not to suggest in practice that this need take longer than the time limit specified in the Amendment, but there must be some discretion. The noble Lord has offered twelve months, but I would rather have an unfettered discretion about the appointed day in case of some unforeseen difficulty.
As I say, I can repeat the assurances that it is the Government's intention to bring the Bill into force at the first practicable date. But this is, as has been said before, largely uncharted territory and a great deal of administrative work will have to be completed by the Registrar in the first few months after the Bill becomes law. But, barring unforeseen difficulties, we see no reason to suppose that we shall need to overrun a time-table of the kind of length indicated in the Amendment. I can assure your Lordships that, having gone to the trouble of introducing this Bill and seeking to get it through both Houses of Parliament this Summer, we will take action with regard to it as soon as it is possible to do so in the next Session of Parliament.
§ LORD GARDINER
I cannot help feeling that the Government's real reason for opposing the Amendment is that they do not know how long it will take the Registrar to understand what the Act means. However, in view of the fact that the next Government will in fact be free to do exactly as they like, I ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
§ Clause 14 agreed to.
§ Schedule [Transitional Provisions]:
§ Amendments moved—
§ Page 12, line 11, leave out from ("of") to ("shall") and insert ("the said section 1, that section")
§ line 19, leave out ("the said section 1") and insert ("that section").—(The Lord Chancellor.)
§ On Question, Amendments agreed to.
§ THE LORD CHANCELLOR
This is an Amendment to the Schedule. Paragraph 2 is designed to allow suppliers a period of grace of one year to dispose of stocks of goods or containers which are already marked with a minimum resale price at the time when Clause 1 comes into operation in relation to the goods in question. The Bill as now drafted makes this concession conditional upon the goods having been manufactured before the date on which Clause 1 came into effect in relation to the goods, instead of referring to the time at which the price was marked. This produces undesirable anomalies. To rectify this position the Amendment limits the one year concession to cases where the minimum resale price was marked upon the goods or the container before Clause 1 came into operation. I beg to move.
Page 12, line 23, leave out from ("if") to ("before") and insert ("that price was so marked").—(The Lord Chancellor.)
§ On Question, Amendment agreed to.187
Page 12, line 30, leave out ("has") and insert ("takes").—(The Lord Chancellor.)
§ On Question, Amendment agreed to.
§ Schedule, as amended, agreed to.
§ House resumed: Bill reported with Amendments.