HL Deb 16 July 1968 vol 295 cc180-97

2.43 p.m.


My Lords, I beg to move that this Bill be now read a second time. This is a short Bill to amend the law about Restrictive Trade Practices. It has two main purposes—on the one hand to make the operation of the legislation more flexible in the light of present day needs; and on the other hand to prevent evasion of the existing legislation and to strengthen the hands of those whose duty it is to enforce it. The legislation is complex, and it may be helpful to the House if I said something about the framework of the existing legislation against which the changes now proposed have to be set. The Restrictive Trade Practices Act 1956 catches within its scope a broad range of agreements by which commercial enterprises agree on restrictions on the production, selling, acquiring or processing of goods. Agreements relating exclusively to exports are excluded but they are required to be notified to the Board of Trade. Also outside the scope of the Act are all restrictions on the supply of services; for example, restrictions in transport and in professional services. These are, however, to some extent covered by the provisions of the Monopolies and Mergers Act 1965.

Agreements covered by the Act are required to be registered with the Registrar of Restrictive Trading Agreements. The parties to an agreement covered by the Act are under a statutory obligation to register it with the Registrar of Restrictive Trading Agreements. The Registrar is required to bring registered agreements before the Restrictive Practices Court for judgment. Restrictions in agreements are deemed against the public interest unless the defending parties satisfy the Court that the circumstances set out in one or more of the seven "gateways" of the Act are satisfied and that, further, it is not unreasonable, having regard to the balance between those circumstances and any detriment occasioned to the public or to persons not party to the agreement. The gateways are mostly concerned with specific benefits, but one is of a more general character—that the removal of the restriction would deny the public as purchasers, consumers or users of goods specific and substantial advantages.

There were in 1956 a large number of restrictive agreements which fell to be judged by the Restrictive Practices Court. In the event, a large number were determined voluntarily or were not defended at a court hearing, so that of the 2,600-odd agreements which have been registered only a comparatively few cases have given rise to a contested hearing. Thus only 315 agreements have been referred to the Court: 34 were defended, 11 successfully. The task of dealing with the backlog of pre-Act Agreements is now largely completed and the Registrar can bring proceedings without delay on any new agreement of substantial importance. The cost to the Government of administering the 1956 Act has been comparatively small in relation to the large number of agreements dealt with.

The overall result of the legislation so far is that less than 1 per cent. of the agreements registered have been found consistent with the public interest. The legislation in its operation has clearly had a substantial impact on the extent to which trade and industry can overtly by collective action seek to restrict competition. The Government believe that the legislation has done a good job. Many hundreds of agreements which were designed to maintain the status quo and impede desirable change have been got rid of. At the same time, the legislation has provided a sieve through which beneficial agreements could pass. Although there is no evidence that agreements in the public interest have been condemned, there are grounds for thinking that the making of new agreements which could be beneficial to the national economy have been at times inhibited. This is one of the main reasons why the Government consider that changes are necessary.

It has been claimed that the 1956 Act inhibits the rationalisation and modernisation of British industry, by, for example, impeding the adoption of cooperative schemes which the Government have, through the Economic Development Councils and as a consequence of recommendations made by the National Board for Prices and Incomes, been urging industry to adopt. Industry has generally taken the attitude that it is not prepared to embark upon any scheme which involves the making of a registrable agreement. The sort of schemes to which I am referring cover such matters as variety reduction in a number of industries, co-ordination of plant building programmes to make the best use of process plant capacity, and the possibility of import saving through arrangements to phase the installation of new plant according to the level of demand The developments in Government policy towards industry which have taken place since 1964 have laid particular emphasis on encouraging co-operative action to improve efficiency, and although there are other factors which bear on industry's decisions whether or not to take the sort of action which the Government has been urging on them, it is clearly undesirable that any avoidable impediment should be placed in the way of the Government's industrial policy. It would of course be possible for the industries affected to register their agreements and be prepared to defend them before the Court, but the delay and expense involved might deter action which is positively welcomed in the national interest.

There is another class of agreement which requires special treatment. In connection with prices and incomes policy, the most effective way of ensuring that an industry holds down its prices may be for the trade association concerned to recommend to its members not to put up prices or not to increase them by more than a figure agreed by the Government. Such a recommendation could, however, give rise to a registrable agreement.

Apart from these changes to make the operation of the 1956 Act more flexible, legislation is also needed to remove certain weaknesses which have become apparent in the operation of the 1956 Act. Agreements to exchange information, for example about prices, are thought to have become widely spread over industry in the place of agreements swept away by the 1956 Act. The definition of a registrable agreement is not wide enough to include all information agreements which can be operated to produce the same effect as restrictive agreements. Nor is there any effective deterrent against failure to register an agreement. At first the expectation that parties would register agreements of their own accord was substantially justified, but recent experience has demonstrated that there is now a wide realisation that no ill befalls parties who do not register their agreements and, once registered, the agreements' chances of survival are slim.

Finally, changes are required in order to enable Her Majesty's Government to honour the obligations which they have accepted in two international agreements they entered into since the passage of the 1956 Act. These are the Stockholm Convention establishing the European Free Trade Association and the Anglo-Irish Free Trade Area Agreement. Both these Treaties provide that certain types of restrictive practices are incompatible with them. In the case of the Stockholm Convention Member States have accepted that they should take account of their obligations when contemplating changes in their legislation. Consequential changes in United Kingdom legislation are therefore required and the Government have decided that they should apply to the Anglo-Irish Free Trade Area Agreement as well as to the E.F.T.A. Convention.

To meet these criticisms of the operation of the existing legislation and also to deal with a number of other points the Bill makes the detailed provisions which I will now describe. Clause 1 vests in the Board of Trade a discretionary power to exempt from registration under the 1956 Act (and thus from judicial examination by the Restrictive Practices Court) for a specified period agreements of substantial importance to the national economy which promote industrial efficiency or provide for new capacity. The object of this provision is to facilitate co-operative action by industry to carry out schemes of modernisation and rationalisation of the sort which the Government has been urging it to adopt and to which I have already made reference.

The exemptions procedure is subject to a number of safeguards. Thus the Board of Trade must be satisfied, after taking into account the interests of consumers, that on balance the making of the agreement is desirable in the national interest; that its object cannot be achieved in a reasonable time except by means of the agreement; and that the restrictions it contains are no more than is necessary to secure this object. Provision is also made for orders affording exemption and for copies of exempted agreements to be laid before both Houses of Parliament and for copies of exempted agreements to be made available for public inspection save in certain exceptional cases to which I shall refer later. On the other hand, industry must have some assurance that an exempted agreement will he allowed to run for a reasonable period. Although the Board therefore have, in certain limited circumstances, power to withdraw exemption before the period for which it was granted has elapsed, they may not do so in the first year of its operation except which there has been misrepresentation or where information has been withheld.

Clause 2 is designed to assist the administration of the prices and incomes policy. Government Departments have found it necessary in connection with the implementation on a voluntary basis of prices policy to secure the acceptance by industry of restraints upon price increases. In particular, Departments need to secure undertakings under the early warning system that advance notice of proposed price increases will be given to them and that price increases will be deferred or limited in amount. Action on these lines involving trade associations or two or more suppliers may involve industry in the making of an agreement which will be registrable under the principal Act. Industry is, however, unwilling to risk proceedings before the Restrictive Practices Court by making such agreements. The Bill, therefore, empowers those Government Departments (named in subsection (6)) which are involved in the operation of the prices and incomes policy to exempt from registration agreements and terms of agreements made at their request for the purpose of preventing or restricting increases in prices, or to reduce prices. Exemption may be given for a period not exceeding two years and it may be extended or withdrawn for misuse. Exempted agreements are required to be made available for public inspection. The procedure is designed to be as simple as possible, having regard to the need for appropriate safeguards. The power applies to agreements made both before and after the commencement of the Act.

Clause 3 makes supplementary provision about agreements exempted by Clauses 1 and 2. For example, it permits trade association recommendations (which are deemed to be agreements by the existing legislation) to be exempted; makes provision for securing copies of exempted agreements or parts of them to be kept secret where this would be in the public interest, or where legitimate trade secrets are involved on similar lines to the provisions of the 1956 Act in relation to registrable agreements. It also deals with the variation of exempted agreements. The present legislation exempts from registration agreements to make goods in accordance with a British standard. Clause 4 widens this exemption to cover agreements about the acquisition or supply of goods made in accordance with British standards. It also extends the exemption to agreements about standards and arrangements for the provision of information or advice to purchasers, consumers or users approved by the Board of Trade and made by standard-making bodies other than the British Standards Institution. The provision supplements the provision empting agreements of importance to the national economy.

As I have already indicated, agreements to exchange information, for example, by notification of prices, can be used to evade the provisions of the present legislation. Clause 5 therefore empowers the Board of Trade, by Statutory Instrument, subject to the Affirmative Resolution procedure, to require any class of information agreements to he registered. The Board is given a wide power to classify agreements. The power is an enabling one and it is not the Board's intention to call up for regisstration beneficial classes of agreement—for example, agreements made in support of work on inter-firm comparisons. Provision is included for interested persons to make representations o the Board of Trade before a calling up order is made. I also referred to the difficulties which the Registrar of Restrictive Trading Agreements has experienced in securing compliance with the provisions of the existing legislation. While the present legislation requires particulars of an agreement to be furnished to the Registrar within three months it imposes no penalty upon those who fail to comply. The Bill therefore seeks to impose additional pressures upon parties to agreements to compel them to register them.

Clause 6 prescribes the periods in which particulars of agreements are to be sent to the Registrar for registration. The period is normally three months (as at present) or before the restrictions in the agreement come into force, whichever is the earlier. Clause 7 makes unlawful any agreement which is not registered within the appropriate period laid down by Clause 6. No criminal sanctions are imposed but persons damaged by the operation of an unlawful agreement may seek civil remedies. This follows the precedent of the Resale Prices Act. The Registrar is also empowered to seek an injunction to prohibit parties to an unlawful agreement from operating it; or from carrying out or enforcing any other registrable agreement if they have not duly registered it. Issues of fact decided in actions brought by the Registrar may be used as prima facie evidence in civil proceedings brought by third parties, and decisions of law are to be binding in the same circumstances on the same facts.

Under the principal Act the Registrar has a statutory duty to refer all agreements to the Court, including agreements which have been determined, or whose restrictions have been removed or abandoned. To relieve the Registrar and the Court of much unnecessary work, Clause 9 gives the Registrar discretion whether or not to refer such defunct agreements to the Restrictive Practices Court. The only purpose in instituting proceedings in respect of an agreement which is genuinely defunct is to seek a Court order precluding the making of a fresh agreement to the like effect. Proceedings to inhibit the making of like effect agreements are likely to be rare, but will sometimes be necessary.

The Board of Trade already have power under Section 12 of the 1956 Act to exempt insignificant agreements from examination by the Restrictive Practices Court on the ground that they are of no substantial economic significance. In practice, the definition of such agreements has proved to be too narrow. There are a large number of agreements on the Register which do not warrant legal proceedings but do not seem to satisfy the criteria of Section 12. Moreover, the requirement that the Registrar should remove particulars of insignificant agreements from the Registrar has proved to be a nuisance. One agreement has been removed and then had to be restored because of trivial amendments no less than six times. The Bill therefore repeals the existing Section 12 (except for certain transitional purposes) and substitutes for it a power for the Board of Trade to direct that an agreement should not be referred to the Restrictive Practices Court, if it is not of such significance as to call for investigation by the Court.

Clause 10 provides a new ground for defence which will allow parties to plead before the Restrictive Practices Court that a restriction is not contrary to the public interest because it does not have the effect, directly or indirectly, of restricting competition to a material extent. This ground is intended primarily to provide a defence for information agreements, for which the other so-called "gateways" set out in Section 21 of the principal Act are not likely to be appropriate. It is not, however, confined to information agreements. Parties to agreements may advance it in defence of any restriction.

Article 15 of the Stockholm Convention establishing EFTA, recognises that certain types of restrictive practices and monopoly practices are incompatible with the Convention. Member States of EFTA have accepted that this carries with it an obligation that it should be duly implemented. The Bill therefore provides that the Board of Trade should have a discretionary power to declare void in respect of its restrictions any agreement which the EFTA Council has found by formal resolution to be in breach of Article 15 of the Convention. Restrictions which were successfully defended before the Restrictive Practices Court before the commencement of the new legislation may not, however, be condemned under these new powers. The Board of Trade may exercise their powers in relation to registered agreements and to export agreements, notified to the Board under Section 31 of the 1956 Act.

My Lords, much of this Bill is non-controversial. Indeed, the provisions it contains relating to enforcement cover very much of the same ground as that covered by the previous Administration's 1964 White Paper. Judging by the Bill's reception in another place, noble Lords opposite will, I hope, recognise the need for the provisions of Clause 1, although (to echo the words used in another place) they may regard it as latently controversial and will wish to see how it is operated in practice. I should therefore like to stress that the operation of the provision is subject to appropriate safeguards, and that applications for exemption will be examined most stringently.

Although there have been differences of emphasis, the approach of both Parties to monopolies and restrictive practices has been broadly bipartisan. Indeed, the first Monopolies and Restrictive Practices Act, that of 1948, was based on a White Paper of the war-time Coalition. Since then the Party opposite have been responsible for the Restrictive Trade Practices Act of 1956, and the Resale Prices Act of 1964. More recently the present Government extended the field of operations of the Monopolies Commission in the Monopolies and Mergers Act of 1965. The underlying objective of both Parties in the evolution of this legislation has remained the, same: to check restrictions of competition and undesirable market power, without at the same time impeding improvements in efficiency or desirable changes in industrial structure. I hope that we shall be able to consider the present Bill in the same spirit. I beg to move.

Moved, That the Bill be now read 2a.—(Lord Brown.)

3.1 p.m.


My Lords, I am grateful to the noble Lord for the clarity with which he has introduced this Bill. I am afraid that I shall not be able to emulate his clarity, nor the expertise with which he introduced the Bill—nor indeed the tremendous gallop at which he managed to take us. However, I shall do my best to beat him in the matter of brevity. I am also grateful to the noble Lord for the references which he made to the legislation passed under Conservative Administrations. I personally hold, and hold strongly, the immediate parents of this legislation, the 1956 Restrictive Trade Practices Act, and the 1964 Resale Prices Act, as very important landmarks on the highway of greater economic efficiency. There is, of course, a limit to which any Government can by legislation alone stimulate efficiency. However, legislation can materially help to create the right conditions, the right climate for increased efficiency. In so far as legislation can serve this purpose, I think no Acts on the Statute Book have contributed more than the two I have mentioned, but to echo the bipartisan approach of the noble Lord to this matter, I should also like to recognise for my part the value of the Act of 1948, which was introduced under the post-war Labour Administration.

In so far as the Bill at present before us is designed to strengthen and improve upon the 1956 Act, I say straight away that we on these Benches welcome it. Indeed, I think we would have welcomed the Bill had it been introduced a little earlier. It covers a very important field. Indeed, modest though it may be in appearance, I think this Bill deals with far more important matters than a great deal of the legislation with which the Government are at present encumbering Parliament. Your Lordships may recall that in a White Paper published in March, 1964, the Government of the day made it clear that in their view certain Amendments to the 1956 Act were called for. I hope noble Lords opposite will not think it churlish of me, therefore, when I complain that we have had to wait rather too long for this Bill.

Having said that, I should like to pay a tribute to the work of the Registrar, for the most part silent and pretty well unsung, and to the equally valuable, work of the Restrictive Practices Court. I think a glance at the Registrar's four reports is enough to demonstrate the great volume of business which both he and the court have discharged since the 1956 Bill became law. I have said that we on these Benches in principle welcome the second part of this Bill, that which is designed to improve the enforcement machinery. We shall, of course, reserve our right to suggest Amendments or improvements to it during its passage through your Lordships' House.

Meanwhile, may I put four specific questions to the noble Lord on what appear to be omissions in the present Bill? He will doubtless recall that in the 1964 White Paper attention was drawn to the fact that one way of circumventing the 1956 Act was by means of a series of bilateral agreements which were apparently unconnected. In paragraph 36 of the White Paper, for example, the Government of the day stated that it was their intention to bring in amending legislation designed to catch such agreements. I cannot find mention of that in this Bill, but that may be because I am not an expert in this field. When the noble Lord winds up, perhaps he could deal with that aspect of the matter.

Secondly, the Government of the day, the Conservative Administration, stated that it was their intention to close another bolthole here. They pointed out—and I should like to quote, if I may, from paragraph 37 of the 1964 White Paper —that, Experience has shown that it is possible to reproduce the restrictive effect of an agreement which the court has already condemned, by making another agreement which is restrictive in somewhat different terms. So far as I can make out, agreements to the like effect—as I think they are technically termed—of the type which I have mentioned, are not covered in the Bill before us. I may again be mistaken, and perhaps the noble Lord could enlighten us.

Thirdly, the White Paper quite rightly referred to the growing importance of services in the contemporary economy, and ventilated the desirability of bringing services within the scope of restrictive practices legislation. I think it was the intention to refer this to the Monopolies Commission and thereafter, if necessary, to seek legislative authority to bring services, in particular services relating to goods within the 1956 legislation, or its successors, within this corpus of legislation. It is my understanding that this matter is now before the Monopolies Commission. Perhaps the noble Lord could tell us what the Government's programme and intention in this particular field may be.

In addition, there is a relatively small point—I think it is almost a Committee point—relating to Clause 9. As your Lordships who are interested in this matter, and who have had to deal with it will know, companies can be put to very considerable expense, and a great deal of trouble, in preparing and presenting their case before the Restrictive Practices Court. I have no quarrel with that, but it would seem reasonable, therefore, that when agreements are not of any significance and are unlikely to merit investigation by the court, there should be some machinery by which companies could receive early warning as to whether or not they are going to have to prepare a case for a court hearing. This new clause, Clause 9, admittedly provides machinery under which the Registrar himself can apply for discharge to the Board of Trade. That is fine, so far as it goes. We believe this machinery could be usefully reinforced if it were possible for a company which believes the agreement affecting it to be quite insignificant, could apply, if need be through the Registrar, for discharge; and such a reinforcement of an early warning system would be of substantial benefit to the companies concerned without in any way abating the effect of this legislation.

Subject to these queries, I should like to reaffirm that we welcome this Part, the second Part, of the Bill. I should like to make it equally clear that our welcome for the first Part, the first three clauses, is more muted. I have listened very carefully to what the noble Lord has said, but I should like to make it clear that it is the definite view of the Opposition that competition not only makes for industrial efficiency but also, in so far as it leads to reduced production and distribution costs, very much helps to the benefit of the consumer, too. Undoubtedly I would carry the noble Lord with me there.

Again, in an increasingly competitive world, we strongly feel that we must somehow contrive to be that much more competitive, and this can come only through giving free play to the cutting edge of competition; and for that reason we on these Benches are necessarily opposed to any unnecessary restraint on competition. I do not wish to be unduly dogmatic about this. I recognise that in the industrial climate in which we live the economics of scale are vitally important whether we are dealing with research, development, production, or indeed marketing. There may very well be cases in which a single firm, or even a single plant, can serve the total requirements of the United Kingdom, including the export requirements. I accept that this may mean in certain instances—but I hope in rare instances—that the full rigour of the 1956 Act may require abatement.

I also recognise that both industry and bodies like the N.E.D.C. have brought pressure to bear on the Government, and that is to some part reflected in the first two or three clauses of this Bill. On the other hand, my Lords, all of us have witnessed a fairly steady drift over the last few years towards greater Government intervention in industry, whether by nationalisation, renationalisation or backdoor nationalisation. We recognise that in the modern industrial world the State must inevitably be prepared to intervene more than in the past. Nevertheless, again without being unduly doctrinaire, I must make it perfectly plain that we on these Benches feel that this drift has gone far too far. Moreover, in so far as these first three clauses of the Bill are designed to aid further Government intervention of this sort, we can only view them with considerable scepticism. We shall therefore watch them in their operation of these clauses with very keen interest, and we shall certainly criticise and feel free to oppose any orders brought before us which show that there is discrimination in favour of companies in which the Government themselves may have a stake.

It would, of course, help to relieve some of the doubts which at least some of us feel about these first three clauses of the Bill if, when he winds up, the noble Lord can say rather more about the sort of cases which they are designed to catch. How many of them do they anticipate there will be? Apart from this, the Government could go at least some way to reassure us if they could show themselves in this House more disposed than they were in another place to accept the need for some definite time limit to exemptions given under the Clause 1 machinery of this Bill. In another place the Secretary of State said on Second Reading that there would need to be a reasonable duration for Clause 1 agreements. We could not agree more. There may be an initial case for exemption, but we all know that monopolies or quasi-monopolies can well get soft or soggy; and it is of course quite true—I recognise this—that subsection (2) of this clause lays down that exemption should be given only for a specific period. That, again, is all very well so far as it goes. However, I should be a great deal happier if a definite maximum period for any exemption were written specifically into the Bill.

My Lords, I think I indicated at the start of my remarks that I would try to be brief, and I propose to redeem that pledge. In concluding, I should like once again to re-emphasise that we are glad to welcome in principle that part of the Bill—in fact, all of it from Clause 4 onwards—which strengthens the enforcement machinery of the 1956 Act. However, we do have certain reservations, to which I have given some voice, about the first part of this Bill.


My Lords, I want to ask one question before the Minister replies. What is the increase in staff which he contemplates the Registrar of Restrictive Practices will require to put the provisions of this Bill into effect?

3.14 p.m.


My Lords, the noble Earl was courteous enough to give me notice of most of the points he proposed to raise, and this has been a great help to me because I have been able to work out a response beforehand, a crisp answer; and I think we shall not find ourselves too far apart. I will take the points he raised in turn. The first was that of bilateral agreements; that is, agreements under which only one party accepts a restriction. The 1964 Conservative White Paper suggested that the 1956 Act could be circumvented by a series of such agreements. The Bill does not deal with bilateral agreements. There are two main reasons for this. First, on closer examination it was realised that an appropriate provision would have been almost impossible to draft because of the difficulty of excluding a wide range of normal, commercial, bilateral agreements in which only one party accepts a restriction. Secondly, it seemed likely that a court would, on the basis of the 1963 decision in the Basic Slag case, interpret "agreement or arrangement" sufficiently broadly to catch a series of one-party agreements—and I think it is a series of these which concerns the noble Earl. Our legal advice is that that case has set up a situation where there would he a good deal of trepidation before anybody indulged in a series. I hope that will satisfy the noble Earl.

I move now to agreements to the like effect, to which the noble Earl has referred. The White Paper noted—I am referring to the Conservative White Paper now—that experience had shown that it was possible to reproduce the restrictive effect of an agreement which the court had already condemned by making another agreement which was restrictive in somewhat different terms. That is the noble Earl's point. It proposed that provisions should be made to cover such evasion, but the nature of the provision was unspecified. The Bill does not deal with this problem. The problem is far less important than appeared to be the case in 1964. Two recent decisions of the Restrictive Practices Court, first in the Galvanised Tank case and secondly in the Tyre Manufacturers Conference case, have demonstrated that the court is prepared to impose heavy fines, totalling almost £200,000 in the two cases mentioned, on those who make like-effect agreements. I think industry is unlikely to "try it on" when faced by penalties of that magnitude. I think the courts have again done us a good turn to get us out of our difficulties here.

On the question of services, I do not know that I am quite so likely to satisfy the noble Earl. Certain powers to deal with services were taken in the Monopolies and Mergers Act, 1965, as he has already indicated. That Act empowered the Board to refer to the Monopolies Commission monopolies in services or restrictive agreements or situations affecting firms responsible for more than one-third of the supply of any particular service in the United Kingdom. The Board of Trade were empowered to act on an adverse report from the Commission. This follows the proposal of the 1964 White Paper, which proposed that the Monopolies Commission should be empowered to make investigations in this field at the request of the Government. Indeed, it is a wider power than that envisaged in the White Paper, because it deals with all services, not merely commercial services. I am not certain whether or not this satisfies the noble Earl. I rather gathered, in one sense, that he hoped to see service agreements brought within the general provisions of the Bill. This, as I have pointed out, has proved too difficult.


My Lords, I also am not quite certain whether it satisfies the noble Earl or not. I should like to read what the noble Lord has said and study it. But in fact I was not proposing at this stage that services and service agreements relating to them should be brought within present legislation. I was interested to know how matters stood in relation to the Monopolies Commission.


The next point raised by the noble Earl concerned insignificant agreements. Here, I suggest there is no need for an early-warning system, as suggested by the noble Earl. The Registrar said in his first report, in paragraph 35: Whether or not the parties request it, the possibility of making a representation under Section 12 is always considered before an agreement is referred to the Restrictive Practices Court". The Registrar always examines. The Registrar has assured us that this is still his policy, and he will continue it when Clause 9 replaces Section 12. He regards it as of importance that public money and the time of the Court should not be wasted by inappropriate references. Firms or associations desirous of entering into a registrable agreement or making a recommendation may always ask the Registrar informally for indication whether the proposed agreement or recommendation is likely to be a successful candidate under Clause 9(2); that is, for exemption. How clear an indication can be given in any particular case must depend on all the circumstances; but, short of a binding promise, I think you may take it that the Registrar will be as helpful as he can. Of course, the firm, in registering an agreement, is perfectly entitled to accompany it with a memorandum of an explanatory sort which may help the Registrar to get a clear insight into the agreement and to give guidance. We certainly do not envisage any difficulties on these scores. Perhaps those comments will help the noble Earl.

The noble Earl was also concerned about the possibility, under the first three clauses, of wider-scale Government interference. I believe that it is possible to have a difference of opinion about these clauses when they are looked at in general; but if we were to be able to concentrate our different views on particular cases then I think we should rapidly come to agreement. The testing of the intention behind these clauses lies in how they apply to the individual cases as they arise. The noble Earl will be aware, and I am sure that he is, that circumstances are now emerging in industry where the amount of capital investment required to start a process is enormous and the risks involved are very great, but if the risks are not taken by British industry then some of our large competitors overseas will capture the markets. There should be agreements to look at capacity and organise it so that there will not be appalling losses which will inhibit further development. This is very much in the national interest. Cases of this kind and many others will be the likely recipients of attention under these first three clauses.

On the question of the anxieties about the period of exemption, again one must retain flexibility; one must not lay down a specific period but relate it to the circumstances of a particular case. These will be looked at carefully. There is a bipartisan approach. We are no more anxious to set up great monopolies to exploit the situation than are Members of the opposite Benches; one can be assured of that. In answer to the point raised by the noble Lord, Lord Cawley, I can say that the Registrar does not envisage any staff increase.

I should like to join with the noble Earl in congratulating the Registrar and the Court on the enormous number of cases dealt with successfully. It is a success story. I hope that I have answered the questions to the satisfaction of the noble Earl. I shall not detain the House any longer. I am grateful for the swift way in which this matter has been dealt with; and I think we can look forward to proper modification of the 1956 Act which will be helpful to all concerned.

On Question, Bill read 2a, and committed to a Committee of the Whole House.