§ 3.57 p.m.
§ THE PARLIAMENTARY SECRETARY, BOARD OF TRADE (LORD WALSTON)My Lords, with permission, I should like to repeat a Statement which has just been made by my right honourable friend the President of the Board of Trade in another place. The Statement is as follows:
"Over the past year it has been increasingly suggested that there may be restrictive practices in the professions which are contrary to the public interest. I have therefore decided to ask the Monopolies Commission to investigate this matter and to make a general report to me under the extended powers in Section 5 of the Monopolies and Mergers Act 1965. The Commission will be asked to consider such questions as restrictions on entry into a profession, the practice of charging standard fees or commissions 780 for professional services, the terms or conditions on which professional services are to be supplied, and restrictions on advertising. I am circulating the full terms of reference in the OFFICIAL REPORT.
"The intention is that the Commission should conduct as comprehensive a survey as possible of all professions, omitting from consideration practices which are expressly authorised by Statute or Royal Charter. The precise method of handling the inquiry will be a matter for the Commission and they can be relied upon to keep it within manageable bounds. They will however be asked to report to me on the extent of the specified practices, if any, in professional services; whether these practices operate against the public interest; and, if so, what remedies they propose.
"This request to the Commission does not in any way overlap with the activities of the National Board for Prices and Incomes or preclude references to that body of the level of particular professional charges. The possibility of certain references of this kind to the National Board for Prices and Incomes is indeed being considered."
§ Following are the terms of reference referred to:
§ Monopolies and Mergers Act 1965
§ Request for General Report on Restrictive
§ Practices affecting Professional Services
§ The Board of Trade in pursuance of the powers conferred upon them by Section 5 of the Monopolies and Mergers Act 1965 hereby require the Monopolies Commission (hereafter called "the Commission") to submit to the Board a report on the general effect on the public interest of the following practices so far as they prevail in relation to the supply of professional services, that is to say practices which are restrictive of—
- (a) entry into a profession;
- (b) the fees or commissions to be charged for the supply of such services;
- (c) the rendering of such services by or on behalf of bodies corporate or by persons acting in partnership;
- (d) the persons to whom, or the circumstances in which, such services are to be supplied;
- (e) the terms or conditions on which, or the manner in which or extent to which, such services are to be supplied;
- (f) the carrying on of any other business by persons supplying such services or the commercial relationship of such persons with others engaged in other activities;
- (g) the extent to which, if at all, persons supplying such services may advertise.
§ 2. For the purposes of this instrument the practice of limiting entry to a profession to persons who pass examinations designed to test their proficiency shall be regarded as a practice restricting entry into that profession but the Commission shall not report on the standard of proficiency required for entry into any profession.
§ LORD DERWENTMy Lords, I am sure we are all grateful to the noble Lord for repeating that Statement. I found it a somewhat strange Statement in that it seemed to me to cover an extraordinarily wide ground. I should therefore like to ask certain questions. Can the noble Lord tell us how many professions there are in this country? Can the noble Lord say how many years this Inquiry is likely to take? Is it at the hack of the Government's mind that all the professions shall be brought into line with each other on these questions? If that is so, perhaps they will tell us why. If it is not so, would it not have been more sensible to take one professional at a time, because nearly all these professions differ widely from each other at the moment? Finally, the Statement says that the Commission can be relied upon to keep the Report within bounds. I am sure they will want to, but in my view they will find it extremely difficult.
§ LORD WALSTONMy Lords, I cannot tell the noble Lord how many professions there are. There is no exact or legal definition, but it is left to the good sense of the Monopolies Commission to decide what activities—shall I call them?—come within the definition of "profession". As the noble Lord well knows, the Monopolies Commission is composed of distinguished and fairminded people, and I am quite sure their selection will be one which will comment itself to all right-minded people.
With regard to the noble Lord's second point, whether it is the intention of the Government that all professions should be brought into line, the answer is that it certainly is not. The object of this exercise is to allay suspicion, which does exist, and we must all face the fact that in certain professions there are restrictive practices which are against the public interest. It may be that on inquiry it will 782 be found there are no such restrictive practices, in which case the public mind will be set at rest and a great deal of good will have been done. On the other hand it may be that some restrictive practices will be found. I cannot foretell what the Monopolies Commission will find, but undoubtedly if some restrictive practices are found and recommendations are made by the Government for putting these right, it will clearly be in the public interest that this should be done.
With regard to the final point about the difficulty of this operation, I would say that it is not a simple operation and it will undoubtedly take a considerable time—possibly a couple of years. But the fact that an operation is a difficult one should certainly not preclude Her Majesty's Government from asking for it to be carried out, and the skill and standing of the Monopolies Commission are such that I am sure they are capable of coping with it satisfactorily. I would make it quite clear that it is not suggested that each separate profession should be investigated individually by the Monopolies Commission, but that they should look over the whole field of professions and see where, in their opinion, there exist, if at all, such restrictive practices.
§ LORD DERWENTMy Lords, I am sorry to rise again, but if it is not the intention that these professions should be looked at one by one, and as they all operate differently, how are the Monopolies Commission expected to arrive at a decision as to what constitutes a restrictive practice? If there are restrictive practices, then doubtless they will be different in each profession.
§ LORD OGMOREMy Lords, I consider this is an utterly nonsensical proposition. It is just a bit of jealous egalitarianism of the worst kind on the part of the Government. What on earth have the Monopolies Commission to do with the professions? We do not want to sell soap, india rubber or bacon. It has nothing whatever to do with the Monopolies Commission. If it is thought that the professions are not carrying out their duties, if it is thought that improvements should be made in the professions, then let us have a Royal Commission. To look at it from the point of view of the Monopolies Commission—in other words, whether we carry out restrictive 783 practices—is ridiculous. Of course, in a sense we do, in that we do not let every Tom, Dick and Harry into the profession and everybody who comes in has to be of good character and be properly examined.
§ THE EARL OF LONGFORDMy Lords, I hesitate to interrupt one of the Leaders of a political Party here, but may I recall the passage in the Companion to the Standing Orders that runs as follows:
Questions for clarification may be asked upon such Statements but they should not be made the occasion for immediate debate unless the House so order.I am not aware that the House has so ordered on this occasion.
§ LORD OGMOREMy Lords, on the last occasion when this question was raised, about a week ago, the noble Earl, the Leader of the House, said that by custom some consideration and allowance was made to the Leaders of the Parties, who could comment on a Statement at rather greater length than was usually permitted to Back Benchers. However, that is all I wanted to say. I do not want to ask any questions because I do not think the Statement is worthy of further consideration by your Lordships.
§ LORD CONESFORDMy Lords, in the event of a profession being simultaneously examined by the Monopolies Commission and the Prices and Incomes Board, is it expected to await the Report of either or both before it continues serving the public?
§ LORD DRUMALBYNMy Lords, may I ask one question? This is a point in regard to the Monopolies Commission which is increasingly becoming more and more a matter for anxiety. The noble Lord says that in this case the Monopolies Commission will be asked to suggest a remedy. May I ask that before either House is required by the Government to carry those remedies into effect there shall be a full debate on the Report? I think it is extremely important that there should be a debate on the recommendations of the Monopolies Commission before the Government go forward to make their recommendations to Parliament upon it.
§ LORD WALSTONMy Lords, may I first answer the last clear and specific questions asked by the noble Lord, Lord Drumalbyn? The short answer is, Yes. 784 The President of the Board of Trade has no power to implement by a particular Order any recommendation of the Monopolies Commission under the relevant section, but these recommendations are naturally valuable as guidance to any Orders that may be laid or any legislation that may be considered, so it would give ample opportunity for further discussion after the Report and recommendations of the Monopolies Commission have been made.
I think I can assure the noble Lord, Lord Cones ford, that no profession worthy of the name would have a sit-down strike during any discussions that may be taking place with the Monopolies Commission or the Prices and Incomes Board or anything else. I think he can rest assured that the public will go on being served at least as well as they have been served in the past.
The noble Lord, Lord Ogmore, used the term "we" very often and I was a little at a loss to know whether he was speaking as one of the leaders of the Liberal Party or as a representative of a profession. Judging from the tone of his remarks and phrases like "jealous egalitarianism" I suspect he was speaking as a representative of a profession, and he went on to say, "We do not sell soap or bacon". I do not think the Liberal Party ever sells soap or bacon. But, in all seriousness, the professions do sell services which, in my opinion, are of far more value and importance to the community even than soap or bacon. Therefore it is surely right that if we are going to investigate any monopolistic abuses that may occur among sellers of soap and bacon, we should also be in a position to investigate any monopolistic abuses that may occur in more important things, such as those commodities or services that the noble Lord's profession sells.
Simply because one investigates it does not mean to say that one accuses. The noble Lord may be right, and his profession—and indeed all others—may be above suspicion they may prove themselves to be admirable servants to the public in every respect, in which case they have nothing whatsoever to fear. Certain members of those professions may even benefit from the removal of some outworn regulations which many of them would like removed yet find hard to 785 remove. So I ask noble Lords not to look at this as a challenge being thrown down to the professions, as a pre-judgment and an assertion that they are abusing their monopolistic position, but to recognise that it is simply an impartial investigation of the very important sector of the providers of services to the public, so that the public themselves, and the professions themselves, will in the long term benefit.
The final point was that made by the noble Lord, Lord Derwent, in which he queried how this investigation could be carried out unless the professions were going to be considered one by one. That is a matter for the Monopolies Commission themselves to decide. What I wanted to make clear was that they were not going to take profession A and look right through it to the end, and then profession B and so on, but would undertake a comprehensive survey into all professions simply picking on those areas where it seemed to them, as experienced and impartial men, that there might be reason to suspect that improvement could be achieved.
§ LORD OGMOREMy Lords, is the noble Lord aware that he has misunderstood my point? I am not against the professions being examined: in fact I am for them being examined; but not by this machinery. I suggested that if they needed to be examined—and I think there is some case for it—there should be a Royal Commission. The basis of restrictive practices is to misunderstand the very great problems which now confront the professions, and, so far as the legal professions are concerned, problems to which successive Lord Chancellors including the present one, have referred over the years.
§ LORD DERWENTMy Lords, may I ask which, if any, of the Churches are to be investigated?
§ LORD ALPORTMy Lords, I am not quite clear on one point. As most professions restrict entry by means of qualification or examination, is it part of the terms of reference of this particular inquiry that the Monopolies Commission should investigate the standards required by various professions for entry into the profession; and, if so, how are they qualifield to judge those standards?
§ LORD WALSTONNo, my Lords, the standards of entry are not to be investigated at all, because, as the noble Lord rightly points out, the Monopolies Commission are not selected with a view to giving them the right background to pass judgment on this matter.
§ LORD CONESFORDMy Lords, may I ask a question for clarification, on the lines of what the noble Earl the Leader of the House reminded us was proper on this occasion? Am I right in thinking that the solicitor's profession is excluded from examination by the fact that it is already the subject of Statute? May I ask whether the Bar is equally excluded, on the ground of the Royal Charters applicable to it, or whether, those Royal Charters being rather more limited in their operation, the Bar is going to be examined while the solicitors' profession is not?
§ LORD WALSTONI am grateful to the noble Lord for raising that point because, clearly, I have not made that as clear as I should have, or the Statement has not made it as clear as it should have. I will repeat the actual words used:
The intention is that the Commission should conduct as comprehensive a survey as possible of all professions omitting from consideration practices which arc expressly authorised by Statute or Royal Charter…—not the professions themselves but the specific practices.
§ LORD CITRINEMy Lords, would the Minister not agree it is a matter of common knowledge that restrictive practices are rife throughout the whole country, whether it applies to professions, to industry or trade unions? And would he not consider that the procedure adopted in this case will be very carefully watched by the trade union movement to see whether the same consideration will be given to them in regard to restrictive practices which they consider necessary for the defence of their members as is given to the professions?
§ LORD WALSTONMy Lords, I am quite sure it will be carefully watched, as the noble Lord says. And I think it right that it should be, because in both cases it is in the national interest that certain restrictive practices should be abolished whereas others may be justified.
§ LORD MITCHISONMy Lords, will there be power in the Commission to produce interim reports?
§ LORD WALSTONThere will certainly be power to make interim reports to the President of the Board of Trade, but it will be entirely up to him whether he makes such a report public.