Lords Sitting of 19 February 1980

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
PrayersߞRead by the Lord Bishop of Rochester.

NAMIBIA: PROGRESS TO INDEPENDENCE
Lord BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what progress has been made by the United Nations to realise the independence of Namibia.
Lord TREFGARNE: My Lords, a team of United Nations officials led by General Prem Chand, Commander Designate of the United Nations Force for Namibia, is at present in Southern Africa for discussions with the parties on arrangements for implementing the United Nations plan. The parties have already agreed to the concept of a demilitarised zone.
Lord BROCKWAY: My Lords, is there not danger for a settlement of independence because of the delay, for three reasons? Did not fighting begin again between the South African and SWAPO troops this week? Is not the South African Administrator-General urging the unrecognised national assembly to obtain self-governing powers? Finally, has he not given a very hostile reception to the United Nations commander, General Chand, saying that any negotiations with him must be treated with some suspicion?
Lord TREFGARNE: My Lords, the noble Lord, has indeed, accurately described a good number of the difficulties, but I should tell him that the shortcomings are not all on the one side, and we certainly hope that SWAPO will also be able to make some concessions and help the negotiations forward.
Lord GORONWY-ROBERTS: My Lords, will the noble Lord confirm that this country in the United Nations and, indeed, in Southern and Central Africa, is lending its fullest support to General Chand's very hopeful initiative under the aegis of the United Nations; that we place the utmost importance upon the creation, and thereafter the maintenance, of, I think, the 10-kilometre demilitarised zone on both sides of the northern border; and also that there is no question of any existing so-called assembly in Namibia usurping what properly will be the powers of a regularly elected and constituted assembly after stability has been achieved in that country?
Lord TREFGARNE: My Lords, as I think the noble Lord knows, the Government do not recognise the national assembly because it is based on the unilateral elections of December 1978, which were not consistent with the plan with which we were associated. As for the United Nations, we certainly support everything that they are doing, with one qualification: they have recognised SWAPO to be the sole representative of the Namibian people; we think that that is for the Namibian people to decide for themselves.
Lord BROCKWAY: My Lords, in addition to the welcome proposal of demilitarisation either side of the Angolan border, will the Government consider urging that both the South African and the SWAPO troops should be restricted to their barracks pending an election?
Lord TREFGARNE: My Lords, that is a useful suggestion which I think the noble Lord put to my noble friend the Foreign Secretary when he raised this matter some months ago. It is certainly something that could be considered. However, we think that the effective way forward for the moment is in line with the plan which we proposed, which includes the demilitarised zone, to which the noble Lord, Lord Goronwy-Roberts, referred. Perhaps I could say, in parenthesis, that that zone is to be 50 kilometres either side of the border, not the 10 kilometres that he mentioned.

THE IVEAGH BEQUEST
2.41 p.m.
Lord MOYNE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they can contradict the rumour circulating in Hampstead that either they or the Greater London Council intend to seek powers to override the Iveagh Bequest (Kenwood) Act 1929 so as to introduce entrance charges for viewing the collection on days additional to the two authorised by the Act, or to reduce the minimum hours of opening laid down in it.
Lord MOWBRAY and STOURTON: My Lords, the Government do not intend to seek any powers in respect of the lveagh Bequest (Kenwood), but I cannot answer for the intentions of the Greater London Council.
Lord MOYNE: My Lords, in thanking the noble Lord for his most helpful reply, I should perhaps declare my keen personal interest as a grandson of the founder, a former trustee and even a signatory aged 22 or 23 of the schedule to the Act. Therefore, I am extremely grateful for what my noble friend has said, as will be all friends of Kenwood in Hampstead, Highgate or London generally.
On the attitude of the Greater London Council, is my noble friend aware that, despite a resolution advocating these changes passed by the GLC last November, their leader has written to me saying that he certainly regards any such changes as needing the support of central Government?—which makes the Government's attitude, as now expressed by my noble friend, extremely welcome.
Lord MOWBRAY and STOURTON: My Lords, I am glad that my noble friend has declared his interest, because we in this country all owe a great debt of gratitude to his grandfather, the first Earl of Iveagh, for his very generous bequest to the nation. On the question of the Greater London Council, some proposals were put to them, but a General Powers Bill for 1979–80 is shortly to be laid in this House and there is nothing
566
relevant to the subject in that. At this stage they cannot add anything to it. As regards the future, as my noble friend knows, it is the Government's policy—and in particular my right honourable friend the Chancellor of the Duchy of Lancaster feels strongly about this—that we do not want to see museum charges extended.
Lord STRABOLGI: My Lords, in view of the noble Lord's answer, may I ask him whether he will take his original Answer a little further and confirm that the Government have no intention of introducing museum charges into the national museums and galleries, in view of the almost universal hostility which their original proposal engendered?
Lord MOWBRAY and STOURTON: My Lords, I can assure the noble Lord that we have no intention at present of introducing any such museum charges.
Lord WYNNE-JONES: My Lords, will the noble Lord accept that it is, I think, the universal opinion of this House that such charges are undesirable, and that they are very grateful for the statement made by the noble Lord on behalf of the Government?

GOLD: SUGGESTED REMONETISATION
2.44 p.m.
Lord BOOTHBY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will now bring pressure upon the Government of the United States to remonetise gold.
The MINISTER of STATE, TREASURY (Lord Cockfield): No, my Lords.
Lord BOOTHBY: My Lords, arising out of that Answer, may I ask the noble Lord whether he is aware that cogent reasons for a return not to the old rigid gold standard, but to a gold exchange standard with gold at a realistic price, were given in a debate held last week in your Lordships' House by the noble Lord, Lord Boothby? May I further ask him

567
whether he is aware that unless and until gold is accepted internationally as the standard measuring rod of value, no so-called monetary policy can ever succeed, and there is no hope of avoiding further inflation and higher unemployment?
Lord COCKFIELD: My Lords, I had the great pleasure of listening to the noble Lord's contribution to the debate last week, and I am grateful to him for reminding me of it. I would, however, be misleading him if I were to suggest that his views were shared by Her Majesty's Government.
Lord BOOTHBY: My Lords, arising out of that answer, does not the noble Lord think that, as the Treasury has proved to have been wrong about this for 50 years, and I have proved to have been right, he might use his own powers to persuade his department to give me a last chance before it is too late?
Lord COCKFIELD: My Lords, the noble Lord presses his case with great charm and ability. Nevertheless, the simple position is, as his own Question indicates, that the only country which is in a position to do this, either from the point of view of economic strength or from the point of view of possession of the quantities of gold required, is the United States. There is no reason whatever to believe that the United States has changed its policy of wishing to see gold demonetised.
Lord WYNNE-JONES: My Lords, is it true that Her Majesty's Government are thinking of adopting bimetallism?
Lord COCKFIELD: No, my Lords.

LOCAL AUTHORITY EMPLOYMENT FIGURES
2.47 p.m.
Baroness VICKERS: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether the numbers of industrial and non-industrial employees of local authorities have increased since the last general election.
The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Lord Bellwin): My Lords, figures for local authority employment in England and Wales taken from the Joint Manpower Watch show that between 10th March 1979 (the last survey date before the general election) and 9th September (the latest survey date for which information has been published) the number of manual employees increased by 3,062 and of non-manual employees decreased by 4,705, a net decrease of 1,643. All these numbers are in terms of full-time equivalents.
Baroness VICKERS: My Lords, I thank the noble Lord for that reply. Is the noble Lord satisfied, in view of all the cuts proposed, that the numbers are diminishing, particularly in the non-industrials?
Lord BELLWIN: My Lords, the Government are by no means satisfied, although a start does seem to have been made in achieving a reduction in manpower levels. But I think it is necessary to keep in proper context the extent of the cuts to which my noble friend refers. They are, if I may remind the House, 1½ per cent. from the levels of current spending in the current year plus another 1 per cent. to be taking place next year.
Baroness BIRK: My Lords, as the Minister has answered in terms of numbers and then percentages of public expenditure, can he give any idea of how this equates with the cut in services to the community, which is what so many people are suffering?
Lord BELLWIN: My Lords, it is of course quite fallacious to assume that the quality of provision of services is in any way commensurate with the level of expenditure.
Baroness BIRK: My Lords, with great respect, that is not the question I asked the Minister. I was asking as a question whether he would explain the relationship between the numbers reduced, which he has produced, and the level of services to the people. I was not talking about expenditure. I was talking about the personnel and the services.
Lord BELLWIN: My Lords, the point I was trying to make was that there is not of necessity a relationship between the two points that the noble Baroness mentioned. In any case, the figures that I quoted would surely indicate that at the time they were taken—and they are the latest ones available—one really could not draw any conclusions at all from them except that there is a trend. When we have the next figures, which should be, I am told, early next month, we may have a much better indication of the direction in which they are going.
Lord BOYD-CARPENTER: My Lords, is it not a fact that a number of local authorities have been far more zealous in reducing the services they give to the community than in reducing the numbers of their employees?
Lord BELLWIN: Yes, indeed, my Lords, that certainly is the case; but then I think one would have to accept that the circumstances differ in different authorities, as indeed does the degree of zealousness with which the various authorities try to carry out the Government's requirements. The fact is that if we do not succeed in reducing the general level of public expenditure then the debate as to the level of services could in time become somewhat academic.
Baroness SEEAR: My Lords, if one figure is going up and the other is going down would the noble Lord tell us what the trend is?
Lord BELLWIN: As I said, my Lords, the figures I quoted really show nothing of a trend other than that there is in general a slight decrease. One might expect the figures next time round to show a greater decrease.
Lord DAVIES of LEEK: My Lords, may I ask the Minister to say, despite his coruscating reply, which was blinding in its flashing and making the matter befogged, whether workers at the old folks' homes which have now been closed were considered industrial or non-industrial: and how many old folks' homes have been closed as a result of this?
Lord BELLWIN: My Lords, the noble Lord will know that a statistic of that kind is not something I can readily trot out now;
570
but in any case this only emphasises the point made by my noble friend Lord Boyd-Carpenter—namely, that what an authority does as regards its services when trying to reduce is costs, first of all will vary very considerably as from one authority to another, and, secondly, there will be those authorities which will be more concerned to ensure that what they reduce are the costs of administration and of providing services rather than the cost of the services themselves.

PICKETING: STATE OF THE LAW
Lord DENHAM: My Lords, with the leave of the House, at a convenient moment after 3.30 my noble and learned friend the Lord Chancellor will repeat a statement being made in another place on criminal law relating to picketing.
NEW HEBRIDES BILL [H.L.]
Read 3a, and passed, and sent to the Commons.

COMPETITION BILL
2.53 p.m.
The MINISTER OF STATE, DEPARTMENT OF INDUSTRY (Viscount Trenchard): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, that the House do now resolve itself into Committee.—(Viscount Trenchard.)
On Question, Motion agreed to. House in Committee accordingly.
[The LORD ABERDARE IN THE CHAIR.]
Clause I [Abolition of Price Commission]:
On Question, Whether Clause 1 shall stand part of the Bill?
Lord WALLACE of COSLANY: We strongly object to this clause. The clause itself is a formality to put into effect what has, in the main, already been carried out. No mention was made during the general election or in the gracious Speech of a Conservative decision to abolish the Price

571
Commission. During the election a review of the work of the Price Commission was promised and in the gracious Speech it was promised that the Government would publish proposals for more effective competition and fair pricing policies. However, during the debate on the Address, the Prime Minister in another place suddenly announced the abolition of the Price Commission.
"Competition" certainly comes into the title of the Bill, but how far it will be effective in operation is open to doubt. Fair pricing certainly takes a back seat in the Bill and Clause 1 rules out any effective measure of price protection for the consumer. There is no doubt that the work of the Price Commission played a significant part during the effective period of wage restraint under the Labour Government. In the winter before the election there was a demand for the return of free collective bargaining by some trade unions, actively and stridently supported by the present Prime Minister. That helped the Tories to win the election. But having sown the wind the Government and the country are reaping the whirlwind of escalating pay demands and rising prices. Eventually an incomes policy of some sort must emerge and to support it there must be price regulation or restraint. Those are the vital ingredients of a counter-inflation policy.
There is no doubt that the existence of the Price Commission had a deterrent effect on price increases. I see the noble Lord, Lord Trefgarne, shaking his head in dissent, but that is a fact. Indeed, one of the main complaints of manufacturers was that they did not want to fill in forms; they wanted to increase their prices without restraint. It also made consumers feel that they had a defendant. It made people conscious of the problem of inflation and people felt in some way that the Government cared about the problem of prices and pay. Today prices are a vital issue in the average household, as I am sure the noble Viscount, Lord Trenchard, realises as he wheels his shopping basket around the shopping centres trying to find bargain prices. Housewives look to the Government for action, but all the action they have is the Government forcing up prices by 15 per cent. VAT and ordering a gas price
572
increase against the Gas Board's wishes. To abolish the Price Commission in the way the Government are doing under this clause is not only an error of judgment but a serious psychological error as well.
Lord ROBBINS: Without entering into controversy at all on the noble Lord's main point, may I ask him whether he can quantify the effect which successive attempts to control prices have had on the retail price index?
Lord WALLACE of COSLANY: There has been an undoubted deterrent effect. In some cases prices were held without an increase being made and in some cases price increases were postponed. All of those added up to a position where until last winter—and I readily admit that position—there was recognised restraint on the part of trade unions. There were, of course, some awkward people involved, but in the main I think it is fair to claim that until last winter, when the dam broke, there was restraint, and that had some effect on the inflation issue.
Lord BOYD-CARPENTER: The abolition of the Price Commission, which I welcome, raises two issues. First, there is the issue which the noble Lord, Lord Robbins, raised, as to whether any system of price control—any instrument for seeking to regulate prices—is likely to be either effective or beneficial. I take the view—I will not weary your Lordships with it at any length—that, save in the most exceptional circumstances, such as a war-time situation, such a system on the whole is inefficient and does more harm than good, creates a black market and damages the profitability of industry.
The second point is whether, even if one concedes to the noble Lord, Lord Wallace of Coslany, the opposite view (that a system of price regulation is what the editors of 1066 and All That would call a good thing), the Price Commission was an effective instrument for doing that. I will detain your Lordships for a moment, and I have one justification for doing so because I have had very direct experience of the actual working of the Price Commission.
About this time last year a company of which I happen to be chairman was submitted to an examination by the Price Commission. The result was, in

573
fact, an acceptance that the price increase which we were contemplating was justified. So I have no grievance on that score. But if your Lordshios could have seen the waste of time, effort and public money involved in the examination of what was shown to be a perfectly efficient company, by an organisation which knew absolutely nothing about the industry concerned, then I think you would have been fully convinced that, whether or not one wants price control, the Price Commission was the clumsiest and most blunt instrument that anyone could have invented for the purpose.
They knew nothing about the industry concerned. They started with doctrinaire views. They sought to persuade us—your Lordships will hardly credit this—to adopt a pricing system based on cost-plus. Noble Lords who have served in the House of Commons know that the Public Accounts Committee in that place spent years getting Government departments off the system of cost-plus, which of course is a system which stimulates inefficiency, because on a cost-plus basis the less efficient you are, the higher your costs; the higher your costs, the bigger your percentage margin, and therefore the bigger your profits. Yet this was solemnly advocated to us by the Price Commission They knew nothing about the industry. They did not even understand that in the distribution of cement prompt and punctual delivery and service to the customer is what matters. Their chairman even went out of his way to say, "Oh, does it matter whether you deliver today, tomorrow, or in a few weeks' time?" This was the body who set themselves up to pronounce upon the efficiency of industry.
The experience which I have related to your Lordships is one of which I have direct knowledge. I am perfectly certain that other noble Lords who are in industry could add to this. Whatever may be said in theory for a system of price control, the elimination of the Price Commission has been greeted with a gasp of relief by British industry.
Baroness GAITSKELL: The noble Lord, Lord Robbins, asked my noble friend to quantify the rise in prices. What happened under the Price Commission? Is it not wonderful to hear noble Lords
574
—not the women, but the men—asking questions like that. Why do they not get together, go out into the streets, and ask the housewives whether prices have risen, or whether the Price Commission was any good? This is what they should do. They should not be talking in this theoretical, completely impractical, and ignorant way about price rises at this time. The extent of price rises really is staggering. Prices have practically doubled on all kinds of items. I bought a reel of cotton last week; I had to pay 30p for it. Do any of the noble Lords in this House know what was the price of a reel of cotton a year ago? Have they any idea of what they are talking about? They have no idea.
Lord ROBBINS: As usual, I am in complete agreement with the noble Baroness that prices have risen, but I submit that my question as to whether the Price Commission had exercised quantitative and significant restraint on the increase in prices—which, in my opinion has, since the beginning of the 'seventies, been due to both parties—was very down-to-earth. I think that the rise in prices, on which the noble Baroness and I are in complete agreement, is due to factors other than the existence or the non-existence of a Price Commission.
Baroness GAITSKELL: May I suggest, though, that the Price Commission had some effect—
Several noble Lords: No!
Baroness GAITSKELL:—on keeping prices lower? No one can deny that.
3.6 p.m.
Viscount TRENCHARD: May I at this stage get a word in edgeways. We are on opposite routes to the party opposite in terms of trying to control inflation. To rely on competition, and to make sure that competition works, is the object of the Bill and is thus the reason for the abolition of the Price Commission. There are put in its place some very extensive powers to ensure that competition really works. These are opposites. I, too, have spent some 30 years in industry with price control and without price control, and I know very well that when there is a Price Commission operating one talks more to competitors, and one gets in applications

575
early for the maximum amounts that could be justified. The Price Commission then claim that they have kept prices down by a certain amount. That route breaks down competition and is not effective. I should not dare to do what the noble Baroness, Lady Gaitskell, has just done; namely, to question the noble Lord, Lord Robbins, in terms of what have been the effects of price control so far as objective total measurements are concerned. Whether in the past there has been a Conservative Government or a Labour Administration in office, or whether one is talking of outside surveys, so far as I am aware no one has claimed, even at any one moment, that more than just on 1 per cent. of RPI has been affected; and at the time that 1 per cent. of RPI was affected very considerable damage was done to profit margins, cash flow and investment.
In those days I was an industrialist, and our excellent Civil Service under both Administrations were forced to use the word "cosmetic" over and over again, because the real purpose of the Price Commission, when difficulties were encountered under both Governments in trying to make a pay policy stick, was to try to encourage the trade unions to accept it. I have been asked to play the cosmetic game. The proof of this pudding is in the profit levels of industry, which have been reduced to very low levels, but which in time of extreme competition were never such that they could do more than fund the necessary investment; nor are they more in Germany, the USA, or other countries that have not followed this route.
I have no doubt that this subject will come up at a later stage, and I have little doubt that the noble Baroness, Lady Seear, who made many points on Second Reading, will want to raise it again when she moves her amendments, and I have perhaps a few extra points that I should like to make at that time.
Lord DAVIES of LEEK: A question was asked about quantifying—a horrible word, anyway—and when we are asking the trade union movement to modify its demands, it is important to ask ourselves how this can be expected if all the time we leave prices entirely to what is believed to be, wrongly, the logic of competition. When it comes to the shopping basket
576
both sides of the Committee plead that they want to keep prices low. There is no doubt whatever about the success of the Price Commission in regard to articles that matter to the housewife, her husband, and thereby the trade union movement. It is from the kitchen of the housewife consumer that demands of the trade unions emanate. Rents and the ordinary victuals of daily living are more than anything else the cause of the demands by the trade union movement.
As a matter of fact, since we strengthened the Price Commission in 1974, and again in 1977, there are on record hundreds of notified price increases which were modified. The Commission estimated that direct savings from their activities between August 1977 and July 1978 were around £120 million—and that is savings to the British housewife. That would therefore have a lessening effect on the demands of the trade union movement for increases in pay. This does not include unquantifiable artifacts. I know that the noble Lord opposite was one of the most capable Ministers in his day, and it would not be for me to denigrate his constructive speeches from time to time, but I should like to know in what article or artifact he was dealing. I do not doubt his words.
Lord BOYD-CARPENTER: I am very happy to tell the noble Lord, although it might perhaps almost rank as a commercial. I manufacture cement.
Lord DAVIES of LEEK: We do not eat cement, quite, but it does enter into the cost of buildings and therefore it enters into rents. We will accept that. I do not know whether the noble Viscount wants to intervene, but I have not finished.
Viscount TRENCHARD: I wonder whether I may intervene for one second. If I may say so, I think we are going over the same ground. I do not doubt the noble Lord on the £120 million. This is the difference between the applications put in and the price increases granted. I would just ask him: Can he account to me, please, for the reason why, since the announcement that the Price Commission was to be abolished, the overall profit margins, already abysmally low in industry, have in fact reduced, and reduced substantially, rather than gone up? This is quite separate from the question which the noble Baroness raises about prices rising.
Lord DAVIES of LEEK: Now I have the Minister on the hip, because —and he had an illustrious father in the military period—we used to have a phrase during the war to answer that question—"It's a piece of cake"! Obviously there has been a depression since the Tories won the election. Shops are closing all over the country, and people serving in shops are worried about their jobs. If you ask the Union of Shop, Distributive and Allied Workers you will find that there is a falling off in the number of shops. In fact, competition is forcing the average little shopkeeper on to the streets.
Baroness GAITSKELL: May I ask the Minister this? If prices are going to go up as well as profits, who wins? If they are both going up at the same time to the same extent, who is going to win?
Viscount TRENCHARD: That is a hypothetical question, and I do not fully understand it, if I may say so. At the moment, prices are going up for reasons of the inflation we inherited and the once-only moves that we have made—I repeat, for reasons of the inflation that we have inherited and the once-only moves that we have made—to lower tax. So we have added to it, but have added to it by a known amount. In the last year of office of the Government of noble Lords opposite inflation was accelerating. On a six-month basis it was over 13 per cent. We have added to it. The fact is that profits are going down. The noble Lord is quite right in saying that they are going down because conditions are difficult; but because, when conditions are difficult, competition exists, as it does all the time, very strongly, it makes it quite impossible, without a Price Commission, for industry to profiteer.
Lord JACQUES: The party opposite is being as contradictory in office as it was in opposition. First of all, we are told that the Price Commission was a waste of money; it was completely ineffective. Then, in the next breath, we are told that it had serious effects; it reduced the profits, and therefore reduced investment. You cannot have it both ways. The noble Viscount further said that their inflation, Government-induced, was once-and-for-all. I do not think that stands up to examination. I believe that the Government are going to find out, sooner or later, that
578
control of the public sector borrowing requirement and control of the minimum lending rate are by themselves insufficient to rid us of inflation, for the simple reason that in operating those controls over the demand for money the Government induce inflation in the first place. I will give them details to show that it is estimated that, from mid-1979 to mid-1980, 8½ per cent. of the inflation rate is Government induced. Three per cent. comes from the reductions of the PSBR, 1¾ per cent. comes from the high interest rates, and 3¾ per cent. comes from the increase in VAT. That makes up 8½ per cent.—approximately one—half of the inflation rate.
Now the Minister says that is once-and for-all. Not on your life! If you are at the same time operating a free bargaining policy, then it follows inevitably that trade unionists will expect their leaders to try to maintain their standard of living; and you do not need to belong to any party to take that view. Even the Conservative trade unions would take that view. Consequently, Government-induced inflation is perpetuated through wage claims into the succeeding years, and because of that I believe the Government are going to find that their present policies are completely inadequate to control inflation and that ultimately, like many of their predecessors, they will have to have some form of incomes policy, whether statutory or voluntary. They will never get that policy unless there is some effort made to control prices and profits; and I believe that ultimately, while you may not wish to have the Price Commission, you will certainly have to have profit control and a certain measure of price control. The sooner noble Lords opposite get that into their heads the better, because otherwise they are just burning their boats behind them.
Viscount TRENCHARD: I am hoping that in a moment we can perhaps get on with the amendments. I will try very hard not to respond in kind on this occasion, but merely in detail. The noble Lord, Lord Jacques, said I was contradicting myself. I do not believe I was. I said that the effect on the RPI had been very small even at the height of the strongest Price Commission applications—under 1 per cent. of the RPI. I said it did a lot of harm of other kinds in breaking down competition, and I would point out that

579
a fraction of a per cent. on a sales price can make a very big dent in profit margin and in investment—and that is what it did. It is the arithmetic of the situation, if I may say so, to which noble Lords opposite have not given adequate weight.
I shall not go back over the statements I made on the inflation that we inherited and added to, but they are correct and are in accordance with the figures. I would merely add once again that in many other countries where inflation rates are very low indeed they do not depend upon price control; they do depend upon competition, the principles of which are unaltered though the details need to be clearly understood. I hope that perhaps we shall have time to come back to them later where amendments have been moved to the appropriate clauses.
Lord PONSONBY of SHULBREDE: I want to add just one word. I was very surprised to hear the remarks of the noble Viscount opposite about inflation. I think it is largely unproductive to quote figures, because everybody quotes different figures on different bases. But what is absolutely undoubted is that inflation has shown a substantial increase since the Government came into office, and a lot of that increase was deliberately induced by increasing the rate of VAT from 8 to 15 per cent Now it would not be so objectionable that this clause should be included in the Bill, if, later on in the Bill, there were adequate powers to deal with prices. However, these powers are not there. A number of amendments have been put up to deal with them but, in the absence of any adequate substitute for a Price Commission, we feel that this clause should not stand part of the Bill.
Baroness HORNSBY-SMITH: On this occasion I support my noble friend. The noble Lord, Lord Jacques, referred to the necessity for the Price Commission May I say that trade, industry and the retail trade were delighted to see it go? It was a good propaganda exercise for the former Government, but it only scratched the surface and made a very small dent in inflation. It investigated only a tiny proportion of increases and it tended to
580
act as an arbitrary penalty on a very limited and selective number of companies. I believe that a Price Commission would be justified only if there was a lack of competition or where excessive profits are being made. There is no evidence today of lack of competition in the High Street, and Government policy is to encourage it.
We believe that, so far as the argument about profitability is concerned, that falls to the ground because profitability, in the old terms as understood, has been declining in industry for the past 10 or 15 years and is now at a level which positively discourages the investment that we all seek and need. I believe that the old Price Commission was likely further to have exacerbated the situation by holding down prices artificially. The major areas in which the Price Commission might have had an effect were in restricting price agreements. I understand that that will be covered in the increased powers given to the Director General of Fair Trading and a through strengthening of the Monopolies and Mergers Commission.
That commission should also perhaps be given power to investigate restrictive labour practices, which are a major source of industrial inefficiency and low production today and which therefore push up prices. The operation of the Price Commission as it was has, I believe, been wasteful of resources, and we are told that it cost £7 million a year. I shall not quibble about whether it was 1 per cent. or 5 per cent. of one point by which they were able to bring down retail prices; but no one can compare the £7 million which it cost the Government with the quite appalling loss in time and money for the companies which have been investigated. Therefore, I congratulate Her Majesty's Government on abolishing the Price Commission and, although I may disagree with him later, I support my noble friend in retaining this clause in the Bill.
3.24 p.m.
On Question, Whether Clause 1 shall stand part of the Bill?
Their Lordships divided: Contents, 121; Not-Contents, 61:

CONTENTS

Addison, V.

Enniskillen, E.

Middleton, L.

Adeane, L.

Exeter, M.

Morris, L.

Ailesbury, M.

Falkland, V.

Mottistone, L.

Airey of Abingdon, B.

Faithfull, B.

Mountgarret, V.

Alport, L.

Ferrier, L.

Mowbray and Stourton, L.

Amherst, E.

Fraser of Kilmorack, L.

Moyne, L.

Ampthill, L.

Gage, V.

Newall, L.

Amulree, L.

Glasgow, E.

Northchurch, B.

Auckland, L.

Gowrie, E.

Nugent of Guildford, L.

Banks, L.

Greenway, L.

O'Brien of Lothbury, L.

Barrington, V.

Grey, E.

Orkney, E.

Bellwin, L.

Grimthorpe, L.

Piercy, L.

Belstead, L.

Grimston of Westbury, L.

Reilly, L.

Berkeley, B.

Hailsham of Saint Marylebone, L.(L. Chancellor.)

Robbins, L.

Bessborough, E.

Roberthall, L.

Boyd-Carpenter, L.

Hampton, L.

Rochdale, V.

Brentford, V.

Hankey, L.

Romney, E.

Byers, L.

Harding of Petherton, L.

St. Aldwyn, E.

Caithness, E.

Henley, L.

St. Davids, V.

Campbell of Croy, L.

Hives, L.

St. Just, L.

Clancarty, E.

Home of the Hirsel, L.

Saint Oswald, L.

Clifford of Chudleigh, L.

Hornsby-Smith, B.

Sandys, L. [Teller.]

Clitheroe, L.

Hylton-Foster, B.

Seear, B.

Clwyd, L.

Ilchester, E.

Selkirk, E.

Cork and Orrery, E.

Inchyra, L.

Simon, V.

Cottesloe, L.

Inglewood, L.

Sligo, M.

Cromartie, E.

Kilmany, L.

Spens, L.

Cullen of Ashborne, L.

Kilmarnock, L.

Stamp, L.

Daventry, V.

Kimberley, E.

Stanley of Alderley, L.

De Freyne, L.

Kinloss, Ly.

Strathclyde, L.

De La Warr, E.

Kinnoull, E.

Suffield, L.

Denham, L. [Teller.]

Lauderdale, E.

Teviot, L.

Derwent, L.

Long, V.

Tranmire, L.

Drumalbyn, L.

Loudoun, C.

Trefgarne, L.

Duncan-Sandys, L.

Lovat, L.

Trenchard, V.

Dundonald, E.

Luke, L.

Vaux of Harrowden, L.

Ebbisham, L.

Macleod of Borve, B.

Vickers, B.

Effingham, E.

McNair, L.

Vivian, L.

Ellenborough, L.

Mancroft, L.

Wakefield of Kendal, L.

Elliot of Harwood, B.

Margadale, L.

Wigoder, L.

Emmet of Amberley, B.

Merrivale, L.

NOT-CONTENTS

Ardwick, L.

Goronwy-Roberts, L.

Plant, L.

Aylestone, L.

Gosford, E.

Ponsonby of Shulbrede, L.

Birk, B.

Greenwood of Rossendale, L.

Ross of Marnock, L.

Blease, L.

Hale, L.

Sefton of Garston, L.

Blyton, L.

Henderson, L.

Segal, L.

Boston of Faversham, L.

Houghton of Sowerby, L.

Shinwell, L.

Brooks of Tremorfa, L.

Irving of Dartford, L.

Stedman, B.

Bruce of Donington, L.

Jacques, L.

Stewart of Alvechurch, B.

Burton of Coventry, B.

Janner, L.

Stewart of Fulham, L.

Cledwyn of Penrhos, L.

Kilbracken, L.

Stone, L.

Collison, L.

Leatherland, L.

Strabolgi, L.

Cooper of Stockton Heath, L.

Lee of Newton, L.

Taylor of Blackburn, L.

Crook, L.

Leonard, L.

Taylor of Mansfield, L.

David, B.

Listowel, E.

Wallace of Coslany, L. [Teller.]

Davies of Leek, L.

Llewelyn-Davies of Hastoe, B. [Teller.]

Walston, L.

Davies of Penrhys, L.

Wells-Pestell, L.

Diamond, L.

Lloyd of Hampstead, L.

Whaddon, L.

Gaitskell, B.

Maybray-King, L.

Wilson of Radcliffe, L.

Galloway, E.

Paget of Northampton, L.

Wootton of Abinger, B.

Galpern, L.

Pargiter, L.

Wynne-Jones, L.

Resolved in the Affirmative and Clause 1 agreed to accordingly.

3.34 p.m.
Clause 2 [Anti-competitive practices]:
Lord WALLACE of COSLANY Lord WALLACE of COSLANY moved Amendment No. 1:
Page 2, line 22, after ("of") insert ("constituting a monopoly or").
The noble Lord said: With the passion of the Division subsiding, I put the point to the opposite Benches that this is a simple and straightforward amendment. Monopoly is obviously an anti-competitive practice. Some would argue that a 100 per cent. monopoly is not anti-competitive as there is no competition; but that would be playing with words. Constituting a monopoly is an uncompetitive practice. There are some patterns of behaviour for monopolies—restrictive trading arrangements, and inefficiency. Large organisations often arouse a great deal of inefficiency, rigidity and bureaucracy. This is evident in the nationalised industries as well as private industry. An example is the gas board taking a long time to give estimates to people and not calling at the right time.
There is also monopoly pricing. I would not say that it could be argued that petrol companies constitute a monopoly. I suppose the large three companies have the market. I am not a motorist but I understand that in some areas it is very difficult to get petrol; in other areas petrol varies in price. It is the small man who is finding it difficult to keep up with the bigger garage proprietors who are getting supplies on a basis of preferential treatment and discount. This is happening quite a lot throughout the rural areas and, as a result, it is a difficult job to obtain supplies of petrol. I am quoting this as an example. I hope that the Government will accept this amendment; it is simple and straightforward. There is no malice aforethought in it. I beg to move.
Lord TREFGARNE: I understand that it would be convenient if we now took the Statement. I therefore beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

PICKETING:STATE OF THE LAW
3.37 p.m.
The LORD CHANCELLOR (Lord Hailsham of Saint Marylebone): My Lords, with your Lordships' permission, I will repeat a Statement now being made in another place by my right honourable and learned friend the Attorney General. It is about the criminal law on picketing. After the formal parts, the Statement is as follows:
"The recent events outside the private steel firms have renewed public anxiety about the law on picketing and intimidation.
"I must emphasise that the law on picketing does not, in any real way, change the criminal law and in no way diminishes the rules which govern public order.
"The criminal law of the land applies to pickets as it does to anybody else.
"Let there be no illusion that the immunity provided under the civil law enables pickets to break the criminal law.
"Peaceful picketing in contemplation or furtherance of a trade dispute is lawful so long as it is the honest belief of those involved that their action will advance the interests of those in dispute.
"This does not mean that the freedom to picket is a licence to obstruct or intimidate—the law permits picketing solely for the purpose of peacefully obtaining or communicating information or of peacefully persuading another person to work or not to work.
"The immunity from civil proceedings given by Section 15 of the Trade Union and Labour Relations Act 1974 does not extend to any wrongful act such as violence, threats of violence or similar intimidation—whether by excessive numbers of pickets or otherwise or molestation amounting to a civil wrong. In these circumstances it may be open to the employer on his own behalf or on that of his workforce to take action in the civil court. In addition the criminal law is perfectly clear. Each of us has the right to go about our daily work or pleasure free from interference by anybody else. Each one of

585
us is free as an individual to come and go as we please to our home or to our place of work.
"The law specifically protects our enjoyment of those rights. If anyone tried to deter us from exercising those rights by the use of violence or intimidation or obstruction then he is breaking the law and may be punished.
"The freedom to picket does not confer or imply any right to stop vehicles—still less do pickets have the right to stop people going about their lawful business. Pickets have no right to link arms or otherwise prevent access to the place they are picketing. This is not a new situation; the present law was made clear by my predecessor"—that means, of course, my right honourable friend's predecessor—
"on 25th January last year and by my noble and learned friend Lord Rawlinson in 1972 when he was Attorney General.
"If pickets by sheer numbers seek to stop people going to work or delivering or collecting goods they are not protected by the law since their purpose is to obstruct rather than persuade.
"Are large numbers really necessary in the name of lawful peaceful persuasion? They are more likely to lead to unlawful assembly or even an affray.
"So far as excessive numbers are concerned the courts have recognised that the police may limit the number of pickets in any one place where they have reasonable cause to fear disorder. In my view, this includes, in the appropriate case, not only asking some of those present to leave but also preventing others from joining the pickets.
"The enforcement of the law is and must remain a matter for the police and the courts. I recognise the difficult task chief officers of the police have in deciding how order can best be maintained so as to ensure that ordinary people can exercise their own rights. It is the function of the law to protect the rights of people—employers and employees—to go about their daily business, to work or not to work, and to make their own decisions whether to exercise those rights. If we let go of that principle then we risk abandoning
586
the rule of law and risk surrender to the rule of violence.
"I hope that stating the main principles of the law, with which the Lord Advocate agrees, I have removed the doubts and encouraged all those concerned, whether pickets or others, to respect and uphold the law. I am sure that the great majority in this country will support this."
My Lords, that concludes the Statement.
3.44 p.m.
Lord BOSTON of FAVERSHAM: My Lords, I should like to thank the noble and learned Lord the Lord Chancellor for repeating this Statement, and your Lordships will be glad to have it at this time. The Statement itself does not indicate any change in the law. Perhaps the noble and learned Lord the Lord Chancellor would agree, as seems to be quite clear from the Statement itself, that it is a statement of what the law actually is and, if I may say so with respect, a clear one.
There are only two short points I should like to put to the noble and learned Lord the Lord Chancellor. I would ask him first of all whether he would agree that it is for chief constables to use their discretion to ensure that the criminal law is at all times enforced, bearing in mind, as I am sure they do, that in exercising this discretion of theirs, emotive situations are not always improved by introducing criminal sanctions into them, at least straight away.
I would ask the noble and learned Lord the Lord Chancellor whether he would confirm that this Statement itself does not in any way imply any change in the well-established tradition that Ministers of the Crown do not themselves attempt in any way to instruct chief constables upon how to carry out their duties or in the exercise of their discretion in handling any of the situations which are in mind in making this Statement, or indeed in any other.
I am sure we are all fully confident that chief constables will exercise their discretion in accordance with the fine and very best traditions of the Police Service. I am also sure that your Lordships on all sides of this House will be very conscious of the need to see that our Police Service

587
does indeed enforce the law in this situation.
3.46 p.m.
Lord WIGODER: My Lords, we on these Benches are also grateful to the noble and learned Lord on the Woolsack for repeating the Attorney General's Statement. I understand it really comes to this: that where there are threats to public order or to the Queen's peace that occur in the course of mass picketing, the criminal law in its present state is perfectly adequate in theory to deal with those dangers, and that the existing law of obstruction, of unlawful assembly, of riot and affray can be used properly against those misbehaving on those mass pickets.
I want to ask the noble and learned Lord on the Woolsack whether he would not agree that the real problem here is not whether the criminal law is adequate—because I would respectfully agree with the Attorney General that it clearly is so—but to what extent it can be enforced, which is a political question rather than a legal one, in a very difficult situation in which enforcing the criminal law is liable to lead to the creation of martyrs and is liable to lead to a situation in which, instead of hundreds of people defying the law, there way well be thousands of people defying the law.
I am the last person to suggest that in the face of such a threat the law should abdicate its responsibilities. What I would respectfully suggest to the noble and learned Lord is this: am I not right in thinking that among those on the mass pickets at the moment who are causing much of the trouble there are many people who are professional troublemakers and are not in the least bit interested in the industrial action which is sought to be pursued by the picket but are solely interested in sowing the seeds of civil disorder? If that is so, am I not right in thinking that these people are perfectly well known to the police force in the locality who have to deal with the situation?
Might I suggest to the noble and learned Lord that in that situation it is those people in the first place who should be dealt with with the utmost firmness of the law in order to cope with the breaches
588
of the Queen's peace that are taking place? If that were done, would it not be right to say that that would be with the full support not only of the community as a whole but of the great majority of ordinary decent, peace-loving trade unionists?
3.49 p.m.
The LORD CHANCELLOR: My Lords, I am extremely grateful to both noble Lords for their welcome of this Statement. I begin by confirming that it was designed to state what the law is and not to create any alteration in what it should be. That was my purpose over the weekend and that was my purpose on television yesterday; and it was the purpose of my right honourable and learned friend in the other place in making this Statement.
I absolutely concur in what the noble Lord, Lord Boston, said about the discretion of chief constables. Good policing or "policemanship", if there is such a word, is not a science but an art, and it involves a very great deal of tact as well as a very great deal of firmness. It is certainly not wise in what the noble Lord, Lord Boston, called "emotive situations" to react too violently. On the other hand, violence in itself is a crime, and the rights of ordinary people must be protected by the police Firmness is required as well as tact, and I know that chief constables can be trusted to give us the right blend of both.
I also confirm what the noble Lord, Lord Boston, said: that Ministers do not purport and will not attempt to instruct chief constables. This is not only a very wise and, I think, legal tradition, but it also reflects a fact which must be very familiar to your Lordships; namely, that in different situations and in different parts of the country the art of "policemanship" must necessarily differ. The mood of the locality must be taken into account, and all kinds of local feelings as well as national interests must also be taken into account. It is not the business of Ministers—I made that very clear myself on the television yesterday—even of the Home Secretary, still less of the Lord Chancellor or the Attorney-General, to instruct police constables in the exercise of their duties. Of course, they will consult with one another and, probably, with my right honourable friend, but

589
instructions are not the order of the day.
I was also grateful, as I have said, to the noble Lord, Lord Wigoder. Yes, I think that the criminal law is sufficient if it has the people behind it. The question is one of enforcement, but it is the business of Government and the business of the police to enforce the law, and enforceability very largely depends upon the extent to which the police and the criminal law have the support of the public. One of the purposes that I think my right honourable and learned friend had in making this Statement was to appeal to the public to give support in these matters.
I am not sure about the danger of martyrs. There are people who seek martyrdom in various causes of different degrees of attractiveness. But to be a martyr in favour of intimidation, to be a martyr in favour of unprovoked violence against innocent people, is a kind of church to which few of us, I think, would care to belong, even if the extent of it led to martyrdom.
Yes, I would agree with the noble Lord, Lord Wigoder, so far as I am informed, about the nature of some of the people who have been causing trouble. Of course, I am not as well informed about this as my right honourable friend the Home Secretary, but I am told that of those who have been arrested—and there have been, I think, more numerous arrests than is generally appreciated—a very high proportion had nothing at all to do with the steel dispute or with any organised trade union. They were there to make trouble and they received it, and I hope that they will continue to receive it.
At the same time, I should like perhaps —and I hope not improperly—to say that those who have nothing to do with a dispute do not necessarily help the police by joining the crowd. They themselves may be completely innocent of any offence, but they make it easier for the troublemakers. In any random crowd, of say, 2,000, it is almost inevitable that you get one or two hot-headed people who behave foolishly, and once violence breaks out in a crowd it is rather like a virus breaking out in the body—it spreads. So I do not want it to be thought that, even if the purpose of an individual or a group of individuals is innocent, it is necessarily to be encouraged that they
590
join groups who may themselves have a perfectly legitimate interest in a dispute.
3.54 p.m.
Lord SHINWELL: My Lords, may I ask the noble and learned Lord the Lord Chancellor whether he would be inclined to agree that what we appear to be discussing, because of some observations made by the noble Lord, Lord Wigoder, and also by himself in his final remarks, is not the question of whether the law is adequate, whether something is criminal or subject to civil action, but the whole question of picketing? Also, as I understand some of the observations to which we have just listened, although it is not within the prerogative of politicians, whoever they are, on any side of the political fence or even in Government or out of government, to seek to enforce the law or to suggest how the law should be enforced, that has not been the attitude of the noble and learned Lord who sits on the Woolsack, in his final observations, or of the noble Lord, Lord Wigoder. They have gone a little further. They disclaim the right of politicians to say to chief constables or to those in authority what they ought to do. They explain what the position is and almost appear to be telling them what to do. I think, if I have made myself clear about it, we want some clarification on that point.
Another point is this. I am not a lawyer, and therefore I understand nothing about these legal niceties. But if, as has been said by the noble and learned Lord the Lord Chancellor and by others, and as has appeared in Press articles—and there have been many in recent weeks—the criminal law is available and is quite adequate, what is the precise purpose of making the Statement today in another place and having it repeated in your Lordships' House? Is there not in contemplation the intention to make the law more adequate, to ensure that it is going to be enforceable? We ought to know.
I ask these questions because I myself had some experience of picketing a long time ago, just immediately after the First World War, when hundreds of thousands of men in the forces were disposed of without employment, with no hope, and living in despair. We were demanding a reduction in the hours of labour and we wanted to absorb many

591
of those who were unemployed. There was a great deal of picketing in which I joined, and which I even organised, not for the purpose of creating violence or disorder, but in order to provide employment for people who had rendered service to the United Kingdom during the First World War.
I want, further, to ask whether we ought to take account of the reason for this picketing, leaving aside the question of violence, which I deplore. I hate the sight of it when I see it on television, and I am sure that other Members of your Lordships' House feel the same. But do we ask ourselves: why this violence or attempted violence? Why these activities which we deplore? Are we considering what is the cause of it all, and are the workers entirely to blame? Are even the Scargills entirely to blame? What about the people on the other side? Recently, some of the managerial people associated with the BSC have come out and declared that they are dissatisfied with the administration of the BSC. There have also been suggestions, and even direct statements, to the effect that there is something almost in the nature of corruption operating, by way of cars, flats, perks and the rest of it, in the BSC.
Finally, I put this point. Do we take no account of the inescapable fact, which we must all deplore, that thousands of skilled workers who have rendered service to the steel industry, and others, are now to be unemployed with no hope of work in the future? Are we to take no account of that?
The LORD CHANCELLOR: My Lords, I think that the noble Lord, Lord Shinwell, if I may deal with his points in inverse order, has probably got the wrong end of the stick. I think that he does a very great disservice to the steelworkers to suggest that they have been on any substantial scale—although I would not speak for individuals —responsible for the violence about which we are talking in regard to this Statement. I do not think that is so at all. I think that the noble Lord, Lord Wigoder, was right in saying that those who have mainly been arrested, and presumably those who have caused offences, are not the workers themselves, nor even the rather uninvited guests led by Lord Scargill.
Several noble Lords: Lord?
The LORD CHANCELLOR: I am sorry, my Lords—King Scargill. I beg his pardon. I have underestimated his standing in the world! But it would be right to say that he had behaved perfectly lawfully, even if they were uninvited to the party.
Very largely, the violence is caused by people who want to commit violence, not by people with legitimate grievances. The English people, when they are deeply moved, are not a violent people. Whether their grievances are just or unjust is a very different matter from whether violence is used, and by whom. I do not claim to be quite so experienced of that period of history as the noble Lord, Lord Shinwell, but I do remember that in my boyhood there were a number of very legitimate grievances and very legitimate apprehensions, and very serious mistakes were made in the demobilisation period of 1919. I think that we have learned our lesson about that, and I think that that lesson has been learned in all walks of society. We very largely avoided it at the end of the last war because of our experiences of the kind to which the noble Lord, Lord Shinwell, referred.
Then he says: If the criminal law is adequate, why make the Statement? The fact is that the criminal law may be adequate but people do not know what it is, and that is why we made the Statement. It fell to my lot during the weekend to address a conference which was largely discussing the Employment Bill. We heard one informed speech after another by very intelligent young people who never realised that this criminal law existed. That is why I said what I said, and no doubt that is why my right honourable and learned friend said what he said.
The third point made by the noble Lord, Lord Shinwell, was about politicians. Why, he says, if you say that you are not going to instruct chief constables, should you express an opinion at all? My opinion is that one is entitled to express one's opinion, both in this House and elsewhere.
Lord FERRIER: My Lords, would my noble and learned friend agree that he asked for an expression of opinion from the people as a whole in support of the

593
views which have been expressed on this Statement? If so, am I not right in suggesting that this Statement is an appeal to all of us to be outspoken in our disgust and revulsion at the scenes which we see now? And would it not be proper for this House to say that we feel utter revulsion at what has been going on and that we feel it should be stopped?
The LORD CHANCELLOR: My Lords, I wholeheartedly agree with my noble friend. This statement of the law serves two purposes: one is to tell people what the law is and the other is to solicit their support in keeping it constantly before people's minds.

COMPETITION BILL
4.3 p.m.
Committee stage resumed.
Lord TREFGARNE: If we can now cast back our minds to the amendment, No. 1, proposed by the noble Lord, Lord Wallace of Coslany, I am afraid that I cannot share the same high hopes for it that he expressed when he moved it. When a monopoly exists, it can already he investigated under the Fair Trading Act, providing that it falls within the statutory definitions. The Government will be reviewing the provisions of the Fair Trading Act dealing with monopolies, but as yet there is no basis for any particular modification.
Our predecessors' Green Paper recommended further study of some relevant matters, including the definition of a monopoly, but we have not yet reached a conclusion on this very important and, indeed, complex issue. If any further provisions on monopolies are desirable, they will certainly not be made in the form of the present amendment.
I fear that this amendment falls into considerable confusion between a person's course of conduct, on the one hand, and the existence of a monopoly situation, on the other. The latter is a question of the structure of a market rather than the conduct of a particular firm, and there is no way in which the existence of a monopoly situation can be brought within the framework of the provisions of this Bill, which is designed to deal with parti
594
cular anti-competitive practices. If, of course, an anti-competitive practice is likely to give rise to or reinforce a monopoly situation, it will be open to investigation, but this is already the case under the Bill and there is no need for any special provision. I hope, therefore, that the noble Lord will not pursue his amendment.
Lord WALLACE of COSLANY: I am not surprised, of course. I did not expect generosity immediately to arise from the opposite Benches. If I understood him correctly, the noble Lord did say that the Government are reviewing the situation, with a view to amendment of the Fair Trading Act. That to some extent is satisfactory; but why it cannot be in this Bill, because it is in the Fair Trading Act, I fail to see. Again, if I remember correctly what the noble Lord said, it was that the Bill specifies a number of anti-competitive practices. But that is the trouble with the Bill. It does not.
Lord TREFGARNE: I did not say that it did.
Lord WALLACE of COSLANY: I am glad that the noble Lord agrees with me. It just shows how weak the Bill is. In the circumstances, I am not going to press the amendment at the moment. I give it for thought to the Government because I think that I have a fair point, but we must press on until the early hours of tomorrow, I suppose. I shall have to leave it there for the moment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn
4.7 p.m.
Lord MOTTISTONE Lord MOTTISTONE moved Amendment No. 2:
Page 2, line 26, at end insert ("(otherwise than by imposing of conditions relating to the export of such goods from the United Kingdom).").
The noble Lord said: The object of this amendment is the long-term retention of overseas markets. There is a need to safeguard contracts with overseas distributors and to cover the costs of promotion of a product and associated costs. This leads to a need for an overseas price which is higher than the equivalent in the United Kingdom for a particular product. A situation of this sort was highlighted within the last couple of years in Europe. The European Commission

595
forbade the Distillers Company to charge more in Europe for a well known brand of whisky than they did in the United Kingdom.
Similar situations, which are not subject to the application of the principles of the Treaty of Rome, as was claimed by the Commission, apply world-wide. It is perhaps relevant that in the case of whisky manufacturers, only 15 per cent. of their sales are in the United Kingdom; a further 15 per cent. of their sales are in other EEC countries, and 70 per cent. are in the rest of the world. So it is of the rest of the world that we are particularly thinking. I am assured that the European Commission agree with us in that respect.
As a result of the practice of charging more in an overseas market, exporting companies are at the risk of their product being bought by a wholesaler on the home market and sold more cheaply in an overseas market than they do. An example of that might be a market where a manufacturer is well established, such as Japan. The trader or the wholesaler who does this underselling benefits, free, from the promotion of the product by the agent of the manufacturer of the product, and also undercuts the sales by that agent. The overall effect—and this is the important point—is to undermine the position of the product in the overseas market and to lose the services of the overseas agent. All in all, a short-term gain to the trader who bought cheap on the home market can serve to ruin a well established and highly profitable major exporting success, to the net disadvantage of the United Kingdom as a whole.
The concern is that Clause 2(1) as at present phrased does not give sufficient argument to preventing this sort of position from coming about. Companies seek to protect themselves by special terms of sale on the home market and on the whole they are successful, although not always so. But they have also been protected in part by legislation. Examples of this are—or were, after having passed Clause I—in Section 2(2)(h) of the Price Commission Act of 1977. I hate to have to quote that Act, but even it had some good points. Also, Section 10(1)(f) of the Restrictive Trade Practices Act of 1976 makes the same point. The purpose of my amendment is to provide similar
596
underpinning of major British long-term exporting initiatives in this Bill. I beg to move.
Lord TREFGARNE: I must confess that while I was considering how to answer this amendment the sort of situation described by my noble friend was not one of the ones which occurred to me. However, the Bill is concerned only with competition in the United Kingdom market and the definition of "anticompetitive practices" in Clause 2 therefore confines the Director General's consideration to practices which affect competition in the United Kingdom. Practices whose only effect is to restrict competition in the supply of goods in overseas markets are therefore outside the scope of the Bill as it stands. We recognise, however, that there may well be practices related primarily to exports but which may have some immediate effect on competition in the supply or production of goods in the United Kingdom, and they are therefore within the scope of the Bill. But I do not think that was the sort of thing that was in the mind of my noble friend.
I believe that this amendment seeks to take such practices quite outside the scope of the Bill. We have to draw the line somewhere between the effects on competition in the United Kingdom and the effects overseas. We believe that the distinction already drawn in the Bill strikes a reasonable balance and we are not convinced that there is much to be gained by accepting this amendment. I hope my noble friend will be reassured by that.
There is one further point, however, in that there is a distinction between applying the scope of the Bill to the effects in the United Kingdom only and specifically exempting—and therefore by implication condoning—anti-competitive behaviour in relation to exports. I think a number of undesirable effects would flow from this amendment and I hope my noble friend will not pursue it.
Lord MOTTISTONE: I understand what my noble friend has said and it is significant perhaps that he did not think of the example I gave because it may be that we were working slightly at cross-purposes. I hope that what I have said (and I shall certainly study with great care

597
what my noble friend has said) might be borne in mind if and when it came to the stage of the Secretary of State producing an order under subsection (3), because it is a very real situation. Competition within this country is one thing and competition abroad with overseas people is another, but the two can complicatedly interact in the way I have described, and I think it is quite important that we do not cut off our exporting nose in order to be very competitive at home in every single possible respect, much as I applaud the general thought that we should. So at this stage I will withdraw my amendment, but I reserve the right to reconsider it or something similar at a later stage of the Bill when I have had the opportunity carefully to study my noble friend's remarks.
Amendment, by leave, withdrawn.
4.15 p.m.
Lord PONSONBY of SHULBREDE Lord PONSONBY of SHULBREDE moved Amendment No. 3:
Page 2, line 26, at end insert ("or the use of land in the United Kingdom or any part of it for the purposes of carrying on a business.").
The noble Lord said: This amendment to the latter part of subsection (1) of Clause 2 is concerned with the ambit within which competition references can be made and come into the general ambit of anti-competitive practices. Indeed there are a number of subsequent amendments tabled to try to extend that ambit in one form or another. As the subsection stands at the moment the wording is concerning competition
"with the production, supply or acquisition of goods in the United Kingdom or any part of it or the supply or securing of services in the United Kingdom or any part of it".
This amendment concerns the use of land in the United Kingdom or any part of it for the purposes of carrying on a business. The point here is that it would seem that, as the wording now stands, a situation where, for example, a restriction was put on the use of land (shall we say?) for a certain type of retailer, a certain type of use, by the owner of that land or by a local authority would not come within the ambit of Clause 2(1) at the present time. One can well envisage—and indeed one knows—with the question of the grant of shop leases, for example, that a number of restrictions might well be put on what type of use a particular shop can be put to and that might indeed be a
598
beneficial form of anti-competitive practice. One knows that there are local authorities who will try to secure a variety of different trades within an area. But as the Bill stands it would seem that this is not an anti-competitive practice which can in fact be investigated at the present time. I beg to move.
Lord TREFGARNE: I am obliged to the noble Lord for moving this amendment, although I hope I can explain that he need not press it. As the noble Lord will be aware, we shall shortly be discussing Government amendments the purpose of which is to bring within the scope of the anti-competitive practice provisions of the Bill certain practices relating to the supply of a site for a holiday caravan and for the provision of off-street parking facilities.
On the question of business leases, to which the noble Lord referred, this matter was discussed at considerable length in another place and the Government undertook to consult between departments in order to consider whether there might be scope for dealing with the problems more effectively, for example by amending the Landlord and Tenant Act 1927, and I am sorry to say that such consideration is not yet complete. But having aired the matter I hope the noble Lord will be content to pursue it further when we get to the subsequent amendments.
Lord ROSS of MARNOCK: Before my noble friend withdraws the amendment I should like to ask whether any thought has been given to the question of feudal restrictions in Scotland? I do not know whether the noble Lord appreciates it, but most of the land in Scotland is held on feudal tenure and the charters granted usually contain restrictive conditions. Not so long ago I could have taken the noble Lord to a village in Scotland where one person—and I shall not name the person concerned—owned the one hotel and all the rest of the land and would not allow any other hotel to be built in that village or any other place in that village to be used for that purpose. Surely, if anything, is that is anti-competitive. I thought perhaps the Government would have looked at this to see whether or not they are satisfied that conditions relating to the land code in Scotland are adequate. But could it not be brought within the

599
scope of this Bill? Of course it might trouble the Secretary of State for Scotland because he owns a lot of land.
Lord TREFGARNE: I do not know about that. The noble Lord has certainly raised a very interesting point. I will certainly undertake to ensure that the consideration currently being given to the desirability, for example, of amending the Landlord and Tenant Act also includes the very interesting point raised by the noble Lord.
Lord PONSONBY of SHULBREDE: May I thank the noble Lord for his explanation and say, at this point, that I was pleased to see a number of the amendments which the Government have put down subsequently to this clause. In the circumstances, I am happy to beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
4.21 p.m.
Baroness HORNSBY-SMITH Baroness HORNSBY-SMITH moved Amendment No. 4:
Page 2, line 26, at end insert ("such course of conduct being one which the Secretary of State has prescribed by order.").
The noble Baroness said: I beg to move Amendment No. 4. In many ways the intention of this amendment—although it is perhaps stronger—is similar to that to be moved by the noble Lord, Lord Jacques—Amendment No. 10. I wonder whether my noble friend appreciates how many hours have already been spent by legal advisers to companies who have asked, "What will this new Bill do and how will Clause 2 operate? What can we do and what can we not do?" The answer is they do not know. The retailing and manufacturing companies overall desperately want to keep within the law, but under this clause no one knows what the interpretation is going to be. You ask a legal adviser and he says, "It could be anything; it depends what the Director General's interpretation is". I think it is only fair that industry should be allowed to know what the Director General is likely to hold to be restricting, distorting or preventing competition.
At times, of course, every business activity impinges to some extent on its competitors; everyone is competing for
600
new business. Some advertise; others do not. It could be held that those who advertise have an unfair advantage over those who do not. Is Which's three months free issue to new members to be considered unfair competition? Is the free installation by gas and electricity boards, or the free set of saucepans if you buy one of their more expensive cookers, going to be held to be unfair competition? Campaigns for new promotions and new products take months to evolve and cost a very great deal of money. They may not know until they are well into their campaign—and it may be sales at home or for the export trade. I think it is really asking a great deal of industry to be forced to accept a clause which is so woolly that they will not know whether they are breaking the law or whether they are not. It is so much a matter of interpretation. If you close a shop in a village, there is no question that you are preventing competition, but will it be held as an offence for investigation?
I believe manufacturers and retailers are entitled to have a defined list, by order, of what will constitute an offence which will result in them being investigated by the Director General of Fair Trading under Clause 2. One rather wonders whether clearance sales are unfair competition. Shall we see the official receiver challenged on the selling up of bankrupt stock way below anything that can be bought in the High Street? One man and one man only is going to make these decisions, possibly when inquiries flood in—hundreds of thousands of inquiries by companies with different products and different methods of promotion. Poor man! I have the profoundest respect for the Director General of Fair Trading, but he really is being made into an inflated Solomon in order to be able to guide any and every type of industry, service, professional practice, to define, in his opinion alone, in industries with which he may never have been closely associated, what is and what is not preventing competition.
I ask the noble Lord perhaps to think again about the Green Paper Review of the Restrictive Trade Practices Policy, which quite firmly recommended that the abuses should be listed. The retail trade and manufacturing industry feel that they

601
should be listed by order, so that industry can find the right path over the swamp and not be engulfed in it. I beg to move.
Lord MISHCON: I wonder whether I may add my humble voice to the delightful one of the noble Baroness and say that this absence of particularisation does worry many practitioners in the law who will be called upon to advise under this Act. It is absolutely true that the wide words used in this clause, by way of definition of what constitutes an anti-competitive act, leave one in great wonder as to whether a certain type of act is meant to come within this provision or not.
I wonder whether your Lordships will allow me to give a brief example, arising out of the discussion that took place on the amendment moved just before this one by my noble friend Lord Ponsonby. He talked in terms of an amendment which will deal with the restriction of land in regard to certain trades, and the noble Lord who replied to him dealt then with a question of looking at the Landlord and Tenant Act. All of us know people who are trying to organise tidy shopping estates, which will not admit of cut-throat competition which would otherwise cripple the little traders, who suddenly find that they have entered into a lease and then, lo and behold, although the lease commands a full economic rent, the same landlord has let the shop next door or one away from it for precisely the same trade. There they are, committed to a lease, committed to obligations, and all of a sudden their trade and their living have disappeared. Unless there is a proper definition who will know—if the noble Lord does bring back, as a result of further investigation, a clause dealing with the Landlord and Tenant Act—whether this sort of behaviour by a landlord would be correct or not?
There are other instances that all of us could think of. What is so worrying is this; that the Director General, if I understand the position aright, is given the power either to refer the matter after investigation to the Monopolies Commission or to require an undertaking from the citizen. I tell your Lordships very frankly that the average practitioner will find it extremely difficult, with the Act standing as vaguely as it does, to tell this poor citizen whether he would be well advised or not to avoid further complica
602
tions, further costs, and further trouble by merely signing an undertaking which he may or may not be justly required to sign. I believe that the noble Baroness has done a great service to the Committee by tabling this amendment and by referring back to the Green Paper which seemed to favour the very cause which she so eloquently espoused.
Lord TREFGARNE: If your Lordships will allow me, I shall not repeat the arguments which I put forward in connection with the last amendment, except to say that the inquiries to which I referred were not specifically directed at the Landlord and Tenant Act; that was just one of the possibilities that we envisaged. The amendment, as it stands, would, I fear, have a very limiting effect. It would provide that the Secretary of State must specify in advance the types of conduct which might constitute anticompetitive practices.
We have already explained why we do not think it appropriate to specify in detail the varieties of anti-competitive practice. Not only is it very difficult to describe many commercial practices in precise legal terms—and if we attempted to do so in the Bill each case would turn not solely on the important question of whether the practice actually had anticompetitive effects but, on legalistic questions of whether the practice actually being pursued was the practice contained in the definition rather than on the much more important point of whether the results were the undesirable ones that we sought to control. However, as is the case with resale price maintenance under the Resale Prices Act 1976, questions of legal interpretation are essentially matters best handled by the courts.
We are concerned in this Bill with the economic effects of practices, and it would not readily be compatible with the procedures in this Bill for essentially legalistic definitional questions to be added to the procedures. Furthermore, we do not at present know of any practices which are regarded by definition as anti-competitive in all circumstances, and at this stage we think it best to continue to adopt a case by-case approach. There are many practices, such as exclusive dealing, which may often be beneficial to the public, but in some circumstances many have adverse effects. The philosophy of the Bill is that

603
the Director General and the Commission should investigate the circumstances in each case. Therefore, I hope my noble friend will not press her amendment.
Lord MISHCON: I wonder whether your Lordships will forgive me if I address the Committee for just a moment in order to elaborate the point that I tried to make and which the noble Lord has just sought to answer? The fact of the matter is that the clause, as now worded, does not even include the words "unfairly" or "unreasonably" in order to give some guidance to the citizen and to those who are trying to interpret the Act. If one takes his reply literally—that it is extremely difficult for various reasons to give definitions beforehand—will he consider before the Report stage at least introducing into this clause words which colour or define the conduct in order that people may know better what it is that this clause hits at by way of definition of "uncompetitive practices"?
Lord TREFGARNE: I think—if the noble Lord will allow me to say so—that those words are already present in the Bill. I refer to him the sub-section under discussion. I am reading from lines 20 and 21, where it says:
"a course of conduct pursued by persons associated with him, has or is intended to have or is likely to have the effect of restricting, distorting or preventing competition in connection with the production, supply or acquisition of goods".
I should have thought that that met the point made by the noble Lord.
Lord MISHCON: It does not say "unfairly" or "unreasonably".
Baroness HORNSBY-SMITH: My noble friend will know that I am very unhappy with his answer because, in view of all the burdens that trade and industry have to carry at present, they really do not want the uncertainty of this provision when they are trying to promote their sales and increase industry. I hope that my noble friend will consider the point made by the noble Lord, Lord Mishcon—namely, whether or not some phrase, such as he suggested, could not be introduced during the Report stage. As my noble friend knows, I feel very strongly about this issue. However, today I shall very reluctantly withdraw my amendment, but
604
I hope that he will consider the issue again before we reach the Report stage, when I shall feel free to put down another amendment if necessary.
The DEPUTY CHAIRMAN of COMMITTEES (Baroness Wootton of Abinger): Does the noble Baroness wish to withdraw the amendment?
Baroness HORNSBY-SMITH: Yes, my Lords.
Amendment, by leave, withdrawn.
Lord TEVIOT Lord TEVIOT moved Amendment No. 5:
Page 2, line 43, at end insert—
("( ) To the extent that a course of conduct is required or envisaged by an agreement or arrangement made under section 24 of the Transport Act 1968 or sections 1 and 3 of the Transport Act 1978 (which require certain bodies to enter into agreements for the reorganisation of bus services and require and authorise certain local authorities and other bodies to enter into arrangements for the coordination of transport) or by an agreement or arrangement made before the passing of one or both of those Acts which has been continued in force by the parties thereto as giving effect to the provisions of those Acts, that course of conduct shall not be regarded as constituting an anticompetitive practice for the purpose of this Act.").
The noble Lord said: I beg to move Amendment No. 5. This is the first amendment in the group of amendments I have tabled. At the outset I must firmly state that this amendment does not in any way try to alter the spirit of the Bill, for reasons that I shall explain, but hopefully it makes it more practicable concerning passenger road transport. Your Lordships will remember that at Second Reading I did dwell on the fact that the bus industry was already subject to much control. My noble friend Lord Trefgarne in his winding-up speech on that occasion referred to this subject and I shall briefly quote the Official Report of 4th February 1980, column 1141, where he said:
"the industry, as was intended, will not be exempt from investigation because there are a number of local areas where some firms have a monopoly, or near monopoly, and it is certainly our intention that those operations should be subject to scrutiny, if necessary. However, I can also say that we do not intend to use those powers particularly widely."
With respect, that statement gives the impression that there are many frustrated bus operators waiting for an opportunity

605
to enter the market, and that the present licensing system creates monopolies which can be exploited by those holding road service licences. Indeed, there is a strong element of such thinking in much of the support which has been given to the current Transport Bill. But it would be sensible not to prejudge the effects which that Bill will have on the level of stage bus services.
The Committee will be well aware that the operation of deeply rural bus services is not commercial, and that the operators depend on their integration into a viable network of services providing mutual support. Independent bus operators, rather than entering the market, have, over recent years, been selling their businesses to the major network operators because only the latter can keep many of the services in being. The majority of private operators of public service vehicles are not interested in providing such bus services.
I quote from the report from the Government's Transport Road Research Laboratory published last July, namely The Organisation and Role of Private Bus and Coach Companies, by Messrs. Jackson and Martin, who said:
"Many private companies were unwilling to take more work of this nature (stage) because it involved extra administration but did not provide a guaranteed income, and because of a reluctance to become involved in on-vehicle fare collection."
In the light of that quotation it should not be thought that bus operation provides a wide market for competition. On the contrary, the rapid advance of personal transport, especially the private car, has led to a decline in the bus market and, in addition to the car, the train and plane provide the competition which ensure, across the board, that passenger road transport does not enjoy a monopoly. The industry may not achieve perfect efficiency but, in the current economic climate, and through staff shortages, no other industry does. The industry is, however, involved in public service and strives to maintain that service as economically and as efficiently as possible. The complexities of the problem are seldom understood from the outside and, mostly through circumstances beyond its control, particularly in metropolitan areas, the industry is criticised by those who should rather be helping it to move passengers more freely on congested roads.
With regard to what I have already said, and to the industry's present statutory duty to co-operate in the provision of services to the public, the purpose of this amendment is to avoid the creation of further complicated machinery which would put obstacles in the way of providing greater operational efficiency for buses. I shall explain briefly how matters stand now and what are the statutory requirements. By Section 1 of the Transport Act 1978 it is the duty of the non-metropolitan county councils, acting in consultation with public passenger transport service operators and district councils within the county:

"(ii) to develop policies which will promote the provision of a co-ordinated and efficient system of public passenger transport to meet the county's needs, and

(iii) for the purpose to take such steps as the Council thinks appropriate for promoting the co-ordination, amalgamation and reorganisation of road passenger transport undertakings in the county."

Therefore for the purpose of this co-operation, the bodies mentioned are given power to enter into:
"such arrangements with one another with respect to the exercise and performance of their respective functions on such terms as may appear to them to be expedient."
Section 3 of that Act provides specifically for agreements with operators.
Again, I must refresh your Lordships on the provisions of Section 24 of the 1968 Transport Act. It provides that the Passenger Transport Executive, the National Bus Company and the Scottish Transport Group have a duty to cooperate with one another in the reorganisation of bus services and to co-operate with each other, the London Transport Executive and the British Railways Board, either directly or indirectly through subsidiaries, for the purpose of coordinating passenger transport services.
In conclusion, I should like to state that in view of the clear duty imposed by Parliament to carry out all the functions that I have quoted, all arrangements or agreements made between the bodies covered by that legislation should be excluded from the provisions of the Competition Bill. I hope your Lordships will see this amendment in that light. I beg to move.
4.42 p.m.
Lord TREFGARNE: My noble friend's amendment seeks to exempt certain mat-

607
ters relating to bus services from investigation under the Bill. I can assure my noble friend that where practices of a bus company flow directly from an agreement or arrangement which is endorsed by the Government's transport policy and legislation, there is no danger that it would be investigated under the Bill.
As we have made clear in other contexts, where an investigation would call into question a practice authorised by the Government's own policies, the Government would always be able to exercise their power of veto. Therefore, the amendment does not really seem to be necessary. I hope that with that short explanation my noble friend will not press his point.
Lord TEVIOT: I cannot say that I am very happy about this. I should like to ask my noble friend a question which I thought I had explained in my amendment, perhaps not very briefly but also not at great length. Controls already exist for this industry which do not apply to other industries. This amendment seeks to exclude this industry. The industry is most concerned about this Bill. Although an amendment was not pressed on behalf of the industry in the other place, with respect, I do not think that many people are aware what the Bill really means. This industry has taken the Bill seriously and is extremely worried about it. It believes very strongly that in view of the fact that there exist all these other provisions in the two Acts which I have mentioned, the Bill is not necessary. Does not my noble friend think that the provivisions contained in those two Acts, which I explained at some length, do the trick as regards competition?
Lord TREFGARNE: No, not necessarily. Perhaps I did not make myself as clear as I should have done. There may be some grounds for exemption in regard to some of the bus services and transport services to which my noble friend refers, but it might be more sensible and more appropriate for exemptions in this area to be made under subordinate legislation—that is to say, by order—so that it could be more easily varied with any subsequent changes in policy or in the other legislation to which he referred. I assure my noble friend that the Government will give care-
608
ful consideration to what has been said, both here and in the other place, to see whether the sort of exemption which my noble friend proposes would be appropriate. If we come to that conclusion, we should make it in the form of an order under this Bill.
Lord TEVIOT: Having drawn my noble friend out a little further, I shall study what he has said and, if necessary, take the matter up at a later stage, bearing in mind that he says that this could be done by way of an order. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.45 p.m.
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 6:
Page 3, line 29, at end insert—
("(7) In this section "the supply or securing of services" includes providing a place or securing that a place is provided other than on a highway, or in Scotland a public right of way, for the parking of a motor vehicle (within the meaning of the Road Traffic Act 1972).").
The noble Lord said: I beg to move Amendment No. 6. We have already considered the amendment to extend the coverage of the Bill to any restriction of competition in relation to the supply of land. I explained why the Government felt unable to accept that proposal. The Government did, however, in another place undertake to consider amendments which would cover two matters about which particular concern had been expressed: namely, holiday caravan sites and off-street car parking facilities. I am glad to say that we are now able to propose amendments which meet those concerns.
In the case of holiday caravan sites, we feel that it is desirable to go further. The new clause therefore proposes that the Director General's responsibilities, not only under this Bill but also under the Fair Trading Act 1973, should extend to the supply of holiday caravan sites in the same way as they already extend to the provision of services in general. One effect of the amendment will be that the Director General will be required to monitor the practices in the holiday caravan industry in the same way as he monitors other practices in the supply of consumer services. The information which he obtains in this way will provide the basis on which he can decide whether

609
to take action and, if so, what action to take, in respect of holiday caravan sites either under the Fair Trading Act or under this Bill when it is enacted.
In particular, the Director General will be able to encourage the preparation of codes of practice in the industry, and will be able to continue the work which my right honourable friend the Secretary of State has initiated in this field. My right honourable friend will, of course, discuss the transitional arrangements with the Director General and ensure that his officials co-operate with the Director General's staff to achieve a smooth and efficient transfer. In the light of this short explanation, I hope your Lordships will agree this amendment.
Lord PONSONBY of SHULBREDE: We welcome the fact that the noble Lord has tabled this particular amendment as we believe that it is a very useful one.
Baroness SEEAR: We also very much welcome the reference to caravan sites, which is long overdue.
On Question, amendment agreed to.
4.48 p.m.
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 7:
Page 3, line 29, at end insert—
("(8) For the purposes of this Act any question whether, by pursuing any course of conduct in connection with the acquisition of goods or the securing of services by it, a local authority is engaging in an anti-competitive practice shall be determined as if the words "in the course of business" were omitted from subsection (1) above; and in this subsection "local authority" means

(a) in England and Wales, a local authority within the meaning of the Local Government Act 1972, the Common Council of the City of London or the Council of the Isles of Scilly,

(b) in Scotland, a local authority within the meaning of the Local Government (Scotland) Act 1973, and

(c) in Northern Ireland, a district council established under the Local Government Act (Northern Ireland) 1972.")

The noble Lord said: This Government amendment is brought forward to honour another commitment made in another place to extend the scope of the Bill to the acquisition of goods and the securing of services by local authorities, whether or not that activity is carried out in the course of business.
I should like to make it clear, however, that in extending the Bill to bring within the scope of the anti-competitive practice provisions all purchasing by local authorities, the Government have no intention of undermining the widely recognised practice of selective competitive tendering, because the reasonable application of such procedures by local authorities does offer very real benefits both to authorities and to their suppliers.
Under the basic approach of Clause 2 of the Bill, the definition of an anticompetitive practice is related to the effects on competition of a particular person's conduct. The particular circumstances of the case must always be taken into account. There can be no question that a general practice can be considered anti-competitive by definition. This applies as much to selective competitive tendering as to anything else.
The Government wish to go further than this, however, because they do not consider it appropriate for there to be investigations into tendering systems by local authorities when these are operated in accordance with principles accepted by the Government. Any such investigations by the Director General would call Government policy into question, and where the Director General proposes such an investigation the Government would have to consider the use of their power of veto. Any abuse of such procedures could, however, be caught and examined under the Bill. We are nevertheless not in favour of the Opposition amendment which goes further than extending the scope of the Bill to purchasing practices by local authorities, but we can deal with that when we come to it. I beg to move.
Lord PONSONBY of SHULBREDE: Unlike the noble Lord opposite, I thought it might be for the convenience of the Committee if, in welcoming his Amendment No. 7, I referred to my Amendment No. 9.
Lord TREFGARNE: I am quite content that we should discuss them together if the noble Lord wishes.
Lord PONSONBY of SHULBREDE: We welcome the fact that Amendment No. 7 has been put down, and indeed it meets a number of the points raised in my Amendment No. 9. Our feeling was

611
that a local health authority at a hospital could also be involved in selective competitive tendering and therefore that a number of the considerations which applied to a local authority would also apply to a local health authority. I feel that the Bill would be further enhanced if in fact that could be included as well. The noble Lord has already stated that in fact he does not believe that it should be extended to this extent, but I would ask him, as he is in fact prepared to go as far as including a local authority within this, would it not surely be logical to extend it to a local health authority as well?
Lord TREFGARNE: We do not consider it necessary or desirable to bring in health authorities. In their case procurement is done in accordance with instructions issued by the relevant health department, and that department's Ministers are directly answerable to Parliament for any procurement practices. Equally, unless evidence is brought forward that purchasing practices of other non-trading bodies are a cause for concern, there is no call, we say, to extend the scope of the Bill to the other persons as the amendment seeks to do.
Baroness SEEAR: Surely the local health authorities have great spending powers and it is highly desirable that they, as well as the local authorities, should act in a competitive fashion. I recognise, as the noble Lord has said, that they are under the control of the department, but nevertheless it surely makes it easier, particularly at local level, when issues of this kind come up if these powers are already in the legislation. Surely there is no harm occasionally in reinforcing what you wish to do. The fact that it can already be done by a method which will not be clear to a great many people is no reason why it should not be also in the Bill.
Lord TREFGARNE: I am afraid that I do not agree with the noble Baroness. Parliamentary scrutiny is, or should be, the best of all.
On Question, amendment agreed to.
4.53 p.m.
Lord WALLACE of COSLANY Lord WALLACE of COSLANY moved Amendment No. 8:
Page 3, line 29, at end insert—
("(7) For the purpose of this section and sections 3 to 10 below the word "person" shall where the context so admits be deemed to include a particular class of person.").
The noble Lord said: The purpose of this simple amendment is to cover restrictions on price competition and anticompetitive practices by and for professional services. This practice has been condemned by the Monopolies Commission on several occasions, including recently in the case of surveyors, and earlier in the case of estate agents, architects, and solicitors. The amendment does not deal with individual firms as such. The intention is to cover professional bodies, associations, or groups imposing scales of fees or charges for their members to carry out leading to anticompetitive practices.
There has been investigation by the Monopolies Commission. This is a field which I know is a delicate field—particularly in the case of solicitors, so many being in this House—but, nevertheless, it is not clear in the clause as it stands that such associations, bodies or groups are covered. I put this amendment forward mainly for clarification, but I firmly believe that in point of fact this class of person, or persons, should be included in the clause. I beg to move.
Lord TREFGARNE: I think that the noble Lord is misinformed in this matter. The provisions that he seeks to write into this Bill are already contained in the Fair Trading Act. We believe therefore that there is no need for this provision. Where an anti-competitive practice is widespread in an industry it is open to investigation under the Act I have referred to. The provision of an alternative procedure under this Bill, therefore, would I think serve no particular purpose.
As to the adequacy of the provisions under the Fair Trading Act, we do not claim that those provisions are perfect, nor do we rule out any subsequent revision, but this is not the time or place to do it. The provisions on anti-competitive practices in this Bill are designed to allow quick investigation of specific practices by particular firms. I do not think it is practical to turn these provisions into a means of dealing with whole sectors of an industry.
Lord WALLACE of COSLANY: All I can say is that here we go again: so long as it is in the Fair Trading Act, nothing should be mentioned in this Bill. This is ridiculous. There is no reason at all why this provision should not be inserted in the Bill. I shall not press it now, but I am rather surprised at the Government's attitude to this. All I do in all charity is to ask the Government to think again. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Lord PONSONBY of SHULBREDE Lord PONSONBY of SHULBREDE had given notice of his intention to move Amendment No. 9:
Page 3, line 29, at end insert—
("(8) In subsection (1) of this section the words "in the course of business" shall be taken to include the acquisition of goods or the securing of services by a local authority, health authority or other person notwithstanding that the person so acquiring or securing does not otherwise act in the course of business.").
The noble Lord said: I do not intend to move this amendment in view of the fact that we have passed Amendment No. 7. But, although I do not move it, I reserve my position with regard to moving a subsequent amendment on Report stage on the question of the local health authority.
4.57 p.m.
Lord JACQUES Lord JACQUES moved Amendment No. 10:
Page 3, line 29, at end insert—
("(7) The Director shall publish a code of practice in which he shall inter alia give an illustrative list of practices which in his opinion restrict distort or prevent competition."
The noble Lord said: I am in the happy position today that for this amendment I can call in support the Government's own experts. The chief officials of the department concerned in this area of legislation formed a working group, and they examined the legislation and the policies in this area and produced a report. The report is entitled A Review of Restrictive Trade Practices Policy. It is a consultative document, of March 1979, Cmnd. 7512.
Lord TREFGARNE: I think that the noble Lord's party was in office then.
Lord JACQUES: It was not the last Government that formed the working party. It was the officials, and the officials are still there.
Lord TREFGARNE: Before the noble Lord goes further, may I say that I think he is trespassing rather dangerously upon the unwritten rule—may be it is a written rule—that advice tendered to Ministers is kept private.
Lord JACQUES: I am not depending upon advice given to Ministers; I am depending on recommendations which were published. They are known to everybody, and I hope that noble Lords opposite will not argue with me about this because we shall only get into deeper water.
Lord BOYD-CARPENTER: Is the noble Lord saying that under the previous Administration officials published recommendations without any authority from the relevant Ministers so to publish?
Lord JACQUES: I am simply saying that the report was the result of the work of a working party; all the Minister did was to write the foreword.
Lord BOYD-CARPENTER: So it was with the authority of the Minister?
Lord JACQUES: Yes.
Lord BOYD-CARPENTER: Exactly.
Viscount TRENCHARD: The Minister appointed the working party and asked for it to report. The Civil Service, bless them, are entirely loyal to each Government in turn. I think it would be quite wrong if in your Lordships' House we were to apportion blame or use as evidence reports requested by an Administration.
Lord JACQUES: Surely it is quite in order—should like to know why the noble Lord, Lord Boyd-Carpenter, is shaking his head in dissent before even hearing what I am about to say—and perfectly proper to quote in support of this amendment opinions given by a working group and published to the world at large, which is all I am doing. I am not dealing with private advice and I do not know what the private advice was.
Lord TREFGARNE: That is perfectly fair, but the noble Lord must not suggest that those are the views of officials and not the views of Ministers. The views

615
which he is about to quote were the views of the last Administration.
Lord JACQUES: As I understand it, they were the views of officials during the period of office of the last Administration.
Lord MOTTISTONE: I have a copy of the document and it says:
"Presented to Parliament by the Secretary of State for Prices and Consumer Protection by Command of Her Majesty".
Surely that unquestionably says that it was the Minister who presented it to Parliament.
Lord JACQUES: Yes; he presented the report of the working party and I am going to quote from that working party's report. I can see nothing wrong in that, and I shall take a lot of convincing that there is anything wrong in it.
Lord TREFGARNE: There is nothing wrong in that at all, but what the noble Lord must not do is ascribe the views contained in that document to civil servants and not to Ministers.
Lord JACQUES: I suggest it would be much more reasonable for the Committee and everybody concerned if noble Lords opposite waited until it was their turn to speak and then replied and did not try to reply to every other sentence uttered from this side.
This working party was considering this area of legislation and policy in relation to the legislation, and in paragraph 7.32 they said:
"We do not recommend across the board prohibition of anti-competitive practices so defined. This conclusion does not, however, conflict with the suggestion that certain carefully defined practices might be prohibited".
They went on in paragraph 7.33:
"This scope of the powers would need to be delimited in the legislation, and to avoid the problem of trying to define the numerous varieties of restriction, the definition could simply take the form of a reference to certain practices which have as their purpose or effect the restriction, distortion or prevention of competition followed by an illustrative list of such practices."
We have the definition in Clause 2(1), but we do not have the list of illustrative practices, and the only assumption one can make in reading this document is that the working party intended that an
616
illustrative list should be part of the legislation; it should be either in the primary legislation or part of the secondary legislation. But I am not going that far. All I am asking is that it should go in a code of practice, not in the legislation.
In this matter there are two views There is the view of the trader. He does not want uncertainty; he wants to know where he is going and what he is being asked to do, and he cries out for the practices which are to be prohibited to be specified, as we heard in debating an earlier amendment. On the other hand there is the view of the administrator of the law. He wants general powers because he knows that things are constantly changing, and because things are constantly changing he wants to be in a position to deal with any new practice that comes along without the need for legislation. Both sides have a reasonable case and all I am trying to do is get a fair balance of their case. I am saying let the administrator of the law have the sweeping powers in Clause 2(1)—I am not trying to amend that in any way—but let us also try to meet the view of the trader; let us have a code of practice in which there is an illustrative list of the kind of things which would be regarded by the Director General as being anti-competitive. I would not expect that list to be definitive; in the words of the report:
"Such a list would not be exhaustive, nor would it imply that any practice included in it was always anti-competitive. The practices would come within the scope of the power only in cases where they had the purpose or effect of restricting competition".
Those words could go into the code of practice. While the administrator has the right to be in a powerful position to deal with any anti-competitive practice that comes along, the trader should have the right to know where he is going and, to be rid of uncertainty, he should have some indication from the Director General as to the code of conduct expected of him.
Lord AIREDALE: If I may pour a little oil on troubled waters, although the storm seems to have subsided somewhat, I have great sympathy with the object of the amendment, but I noticed that the Minister in Standing Committee in the other place did not favour an amendment of this kind. I think what went through her mind was that a code of practice was

617
more appropriate to a list of things one should do than to a list of things one should not do. At any rate, it occurred to me that probably this amendment would not be agreed to today, and I am bound to say that nothing that has been said so far from the Government Front Bench has led me to change that view. I therefore took the opportunity of trying to achieve our joint purpose by another means, namely by my Amendment No. 63 to Clause 18. Speaking for myself, I am only too willing to support the noble Lord, Lord Jacques, in this amendment in the hope that when we come to my Amendment No. 63 he will support me, and then perhaps, in one way or another, we may succeed in achieving out joint objective.
Viscount TRENCHARD: Perhaps I may in general terms, before the noble Lord, Lord Jacques, decides whether or not to press the amendment, again remind the Committee that the purpose of what we are trying to do is to have a Director General of Fair Trading with a relatively small staff who will be publishing reports in all sorts of different industries where different things are anti-competitive or unfair. Having rules right across the board is extremely difficult; what is unfair and uncompetitive in one industry and one situation is not so in another. What we are trying to do here is to have a body headed by a man of great ability and responsibility who will be picking up all the transient wisdom on questions of competition, and there are many complicated and difficult arguments and different kinds of anti-competitive practice. There is predatory competition, and every sort and kind of effect of competition in different circumstances. Earlier, in another amendment, there was reference to the effect on overseas competition.
We are trying to have a small body, led by a man of wisdom, who will publish their decisions, who will take contemporary wisdom as it emerges from committees of inquiries being conducted currently, for instance, by the Monopolies Commission, and who will work on very simple broad terms. It would be quite impossible for such a body, equipped as it is, to set itself up as the authority on what should or should not be a competitive practice in every circumstance. It is not possible to have detailed regulations or descriptions,
618
nor in my view does one get into clearer waters by having codes of practice to go halfway. One merely opens as many questions as one leaves unanswered. My plea to the Committee is to leave the terms simple, short and general, and to judge the performance of the Office of Fair Trading as it proceeds, as it uses contemporary wisdom; and if it takes a step in the wrong direction, there will be a howl. There are plenty of safety powers in this legislation to stop a proceeding at various stages, as we have discussed. So I ask the noble Lord, Lord Jacques, please to consider this before pressing the amendment.
5.12 p.m.
Lord HARMAR-NICHOLLS: I wonder whether my noble friend would pay the noble Lord, Lord Jacques, the compliment of saying that he will consider a little further the points that he has made. I think that the noble Lord, Lord Jacques, has certainly made a point. The Director General has all the powers to form his views on evidence as it comes in, as my noble friend has said. But I believe that the trader is entitled to have set up a boundary where he knows he is safe and so can make long-term arrangements accordingly. Let me give an example to illustrate the reason why I rise to my feet. Some time ago a business in which I was interested wished to build a cellulose store. We applied for permission for the store to be built, and we wanted it to comply with all the necessary safeguards. We were told that the authority required a certain thickness of concrete, that the roof had to have a concrete finish, and that the furniture and doors had to be made of steel in order, it was argued, to contain the effects of any explosion that might occur.
We then applied for permission to build a similar building in a town only seven miles away. We submitted plans which included the concrete finish, the steel doors and all the other requirements that in the other case we had been told were absolutely necessary, only to find that in this case the authority said that it wanted the building to be as flimsy as possible, with the roof to be made of lathes and the shelves to be made of wood. That authority argued that if an explosion was not contained in the rigid way suggested in the other case less damage would

619
result. Both those cases were considered by experts, based within seven miles of one another; yet they were flatly contradictory one of the other. We, the poor traders, did not know where we were in terms of wanting to ensure the kind of safeguards we had in mind.
I admit that it is not easy to deal with such cases. I recall that when I had some ministerial responsibility the Metropolitan Police wanted it the other way; they wanted put on plaques in Trafalgar Square detailed descriptions showing when people were committing an offence by scratching a wall or plucking a flower. Then I argued that that ought not to be done; that the matter ought to be put in general terms. I believe that there is enough in the argument of the noble Lord, Lord Jacques—supported by the noble Lord, Lord Airedale—for my noble friend to say that he will have another look at it. It may be difficult, but I believe that if possible this boundary fence ought to be erected, so that traders know where they are, rather than have the proposal negatived without it receiving the further thought that I think could be given to it.
Baroness SEEAR: I hope that the noble Lord, Lord Jacques, will not press the amendment. It is my belief that anticompetitive practices are in fact very widespread and that we do not know the full extent of them. In any case a code of practice confuses because it does not have the force of law. Certainly it strengthens an argument, if the matter comes to an argument, but it does not have the force of law. It would be assumed by everybody that whatever was not in the code of practice was not an anti-competitive practice, though investigation could well prove that not to be true. Those of us who want to get rid of anti-competitive practices and who believe that this Bill is not strong enough—and that is very much the position that we on these Benches are taking—would not like to see the list prescribed at this stage.
Lord BOYD-CARPENTER: Although as the noble Lord, Lord Airedale, has rightly said, the atmosphere has now cooled, may I none the less put to the noble Lord, Lord Jacques—because I think it is only courteous to him that he
620
should understand it—the reason why I and one or two of my noble friends ventured to interrupt him in the course of his very interesting speech. I certainly understood him to say that he was going to quote a document giving the views of my noble friend's civil servants and that therefore these views would naturally be acceptable to my noble friend. Having himself held public office, I am sure that the noble Lord, realises the very crucial importance in our Constitution of not disclosing the views of the Civil Service on public issues and of not appearing to rely upon them in public discussion. I do not want to weary the Committee at this time; it is obvious to all noble Lords that it is a basis of our Constitution that an incoming Government can rely upon the absolute loyalty of civil servants who a week earlier were serving another Administration.
Naturally, therefore, to quote as the views of my noble friend's civil servants, views which were I understand formerly contained in a document that was laid, perfectly properly, on the authority of the then Secretary of State for Prices and Consumer Affairs could seem, however inadvertently—and I at once acquit the noble Lord of any deliberate intent—to be trespassing on that rule. Those of us who, like the noble Lord and myself, have held public office and fully understand therefore the importance of this constitutional nicety, naturally feel sensitive on the point. I know that when one is interrupted in the course of a speech, when one's mind is on the merits of the matter in question, one is naturally a little impatient; I sometimes am myself. I am sure that, having had time for reflection, the noble Lord will appreciate that we were right to prevent even a nominal or marginal departure from what is really one of the basic principles of our Constitution.
Lord TAYLOR of GRYFE: I hope that the Committee will heed some of the advice offered by the noble Lord, Lord Jacques, who has had a long and distinguished record as the chief executive of a very large retailing organisation, and who has had the responsibility of interpreting law and applying it in his business. If there is one area that causes difficulty, it is this area of uncertainty, with inevitable delays in interpretation of law,

621
and all of this is frustrating in the conducting of a lively retail or wholesale business. To that extent I believe that we ought to heed some of the advice that is given—that the illustrations provided in a code of practice might in fact lead to a more expeditious handling of the provisions of the Bill. I support the Bill. I think that all of us want to see competition, but we all want to see it clearly delineated for the trader in terms of where he stands, and the illustrations contained in a code of practice as suggested might be extremely helpful and so remove some of the uncertainty from business.
Lord GALPERN: May I say a few words? The purpose of the amendment is nothing really new, so far as I see it. In my opinion it is only an extension of what is present day practice so far as most trades are concerned. Quite a number of trades I know of have published their own codes of conduct, and retailers and traders and people who buy or sell their appliances or goods are expected to conform to certain conditions suggested by the trades' associations. I see no possible difficulty, if the Minister or the Director were called upon, in following the practice of these trade associations. It would be most helpful and most welcome to these trade associations. Some of the recommendations may be in conflict with the code of practice already utilised by the various traders, and in that respect we can avoid the conflict by getting to know exactly what the Director himself thinks of the matter.
Lord TREFGARNE: I think we are under a delusion if we imagine there is any halfway house in this matter. The choice before us, I suggest, is, on the one hand, the procedure that we have laid down in the Bill, where we do not define precisely the practices which are to be held to be anti-competitive, much less unlawful; or, on the other hand, if we do not choose to follow that course, then we must provide a comprehensive catalogue of practices which are to be outlawed under the Bill. That second route is a wholly different philosophy, and the one which I suppose the Americans have chosen to follow with their anti-trust laws but one which we have, I think very soundly and rightly, chosen to reject.
622
If the Director General were required to publish a code of practice or a list of practices which he considered to be anti-competitive, this would put him under great pressure to implement a much more rigid approach, which would be quite at variance with the flexibility which is the very heart of this legislation.
However, as my noble friend Lord Trenchard said a while ago, the Director General will be required to publish an annual report on all his activities, and the Government made it clear when the Bill was discussed in another place that the Director General will wish to use these reports to provide some kind of "forward look" wherever that proves possible. This might be in the form of guidance on anti-competitive practices in general, the circumstances in which they arise and the manner in which they affect competition, based on the experience of investigations under the Bill; and he might indicate any particular practices which cause concern and which he might seek to investigate in the future. I believe that this is the most sensible way to proceed, and I hope that in view of these observations the noble Lord will not press his amendment.
Earl DE LA WARR: I, too, hope that the noble Lord, Lord Jacques, will not press his amendment, but I have to say that I have listened very carefully to all the arguments and am much impressed by those who think that traders will find themselves in some difficulties. The noble Baroness, Lady Hornsby-Smith, quoted the example of a promotion which contained free offers. This went fairly close to my heart, because until a few months ago I had spent 20 years trying to dispose to the public television sets, mainly for rental. Whether or not I was a success is beside the point, but I know well that the practice in times of fierce competition is of going further and further towards giving away larger and larger gifts. It may well be that that is anti-competitive. Nevertheless, I have taken the point of my noble friend Lord Trefgarne that you must decide one way or the other; but I hope the Government will take on board the points which have been made, because they will not go away and they will assuredly come up on Report.

623
Could it not be that the Government could indicate that the Director General of Fair Trading would welcome approaches from companies before they sought to do certain things in order that they might get an informed opinion as to the view of the Director General of Fair Trading on these things? Is there not some way like that in which we could find a reconciliation between the difficulties of publishing a code of practice and the worries that traders will have if a code of practice is not published?
Lord TREFGARNE: I am certainly quite happy to agree that the Director General would consider informal approaches from companies considering adopting a particular line of practice, but I would emphasise the point that simply because a company is adopting a particular line of practice which the Director General might seek to investigate does not mean that they are breaking the law. They are not even breaking the law when they enter into an understanding or agreement with the Director General and subsequently depart from it. That is a matter we shall be referring to later. The ultimate test of whether or not a practice is to be regarded as anti-competitive will eventually come to be decided by the Monopolies and Mergers Commission when it finds the practice (if it does) to be against the public interest. But, as your Lordships will have noticed, there are many steps to be taken before it gets to that stage. With this explanation I hope, as I said earlier, that the noble Lord, Lord Jacques, will not press this amendment.
Lord JACQUES: May I say, first, that if I in any way transgressed convention I apologise, of course, but I did not feel that I did and I still do not feel that I did. I am quoting something which was published, and which is available to everybody. That is the difference I think. That is the important difference; and I think it is a difference which entitles me to quote it as I did.
However, be that as it may, I do not agree with the statement made by the noble Viscount, Lord Trenchard, that the list would have to be one of practices which were anti-competitive in all circumstances. I agree with him that that is impossible. That is not intended. It is
624
quite clear that in giving a list of practices which could be in breach of the rules of competition the Director General would have to point out, first, that the list was not exhaustive, and, secondly, that the list was not of practices which would be anti-competitive in all circumstances, but was giving examples of where it was anti-competitive. I believe that the trader must have some guidance, and if the noble Lord thinks that a code of practice is going a bit too far, then, all right, make it guidance notes. Guidance notes are being printed in this sphere of legislation almost daily—explanations of orders, explanations of Bills and so on. Unless I can get some definite promise of that kind, I shall certainly insist upon dividing the Committee.
Viscount TRENCHARD: I do not think that from these Benches we can give any guarantee that the Director General will issue guidance notes. My noble friend has pointed out that his reports will in fact be published and that the cases on which he takes action will be published, so the case law that already exists in this country will continue to build up, but not with the full penalties of law. This is one of the advantages of the quick investigation without reaching a stage where a company is considered to have broken the law. This is the whole point of it, that it will push the accumulated wisdom forward. In addition to all that body of individual cases—some withdrawn, some practices with undertakings agreed—the Director General has the duty to publish the annual report that my noble friend mentioned. I cannot (and it would be quite wrong for any Administration to do so) tell the Director General what to write in that report, but it must be obvious that he is going to review the cases which have been through his hands in the year, and I would think that he is going to make observations of the kind that the noble Lord, Lord Jacques, has in mind. I cannot from these Benches give the noble Lord a guarantee, and it would be improper for me to do so.
Lord JACQUES: What the Minister is saying in effect is, that after 10 years when we have had 10 annual reports, if we take them altogether, there may be a code of practice. That is not something that I could accept.
Lord WALLACE of COSLANY: Surely the noble Viscount will be able to give some indication that the matter might be considered before Report. Representations have been made from all sides of the Committee. This is not at all a one-sided argument. If I may presume to be in the position of giving advice, surely it would be better to consider this at a later stage, at Report, rather than forcing a Division and ruling out something which is giving concern to a number of Members of the Committee.
Viscount TRENCHARD: I do not feel able to do that. These matters have been discussed—and noble Lords have no doubt read them fully—in another place. I do not believe that the halfway house suggestion, which I think is the term my noble friend used, is a starter. I think that it would be inhibiting the Director General if you started to declare what was fair or unfair, unless you were to write literally volumes. I do not believe that the proposition is a practical one, and I am afraid, therefore, that I cannot give the undertaking for which the noble Lord has asked.
Lord HARMAR-NICHOLS: Could not my noble friend give another thought to that? Those of us who are traders (or claim to be) are concerned about this. The Director General, I have no doubt, will be a man who will be fair-minded and who will do his best to operate in the spirit described by my noble friend. But he may not be so. Those of us who are dealing with officials of various sorts, whether in planning departments or in matters of this kind, know that a lot depends upon the personality of the people to whom we are giving these powers.
I believe that the noble Lord, Lord Jacques, has shown less rigidity than has my noble friend on the Front Bench. Parliamentary proceedings have their Committee stages and Report stages so as to allow time to elapse in order that other thoughts may be given to it. That is the object of the system. The noble Lord, Lord Jacques, first suggested that it should be written in; now, he is not pushing that. Then he suggested a code of conduct, which I agree would be a difficult thing and would go into volumes; but now he has suggested guidance notes, which we know are the general practice.
626
It may be that at the end of the day my noble friend will have to come back and say that nothing can be done. But it would be more satisfying to people who come to Parliament to examine Bills in detail (which is the purpose of the Committee stage) to feel that there is not a rigidity of mind and that further thought can be given. I should have thought that this was an ideal opportunity for the Government at the Dispatch Box to say that they cannot offer a great deal of hope for reasons which have been explained; there have been one or two extra points made that are worthy of consideration; and at the Report stage they will see what can be done. If that is not working the parliamentary system with sympathy and good sense, I do not know what is. That is all I ask.
I shall have to vote against the noble Lord, Lord Jacques—I tell him that—if he pushes the issue, because, on balance, there is a great deal in terms of administrative problems in what my noble friend has said. But I should like to be given the opportunity to feel that these matters have been given more detailed thought than appears from a quick answer now.
Lord BOYD-CARPENTER: I should not like my noble friend, Lord Harmer-Nicholls, to think that the view he has expressed is unanimous on these Benches. It is one of the easiest things in the world for a Minister—and many of us have done it—to avoid a Division by saying, "We will think about it". It means another amendment at the Report stage. But, in truth, the ministerial mind is almost certainly made up. I differ from my noble friend in thinking that it is that which derogates from parliamentary procedure.
I have listened to every word of the discussion and the issue is clear-cut. I do not say that the view of the noble Lord, Lord Jacques, is not a respectable one. It always is—I must not go too far; it generally is. My noble friend the Minister has deployed what is clearly Government philosophy on this. As he says, it was argued at length in another place. I should have thought that the sensible thing is to say that the matter has been fully argued and should now be decided in the way which this House and the other place decides these matters, by vote.
Baroness PHILLIPS: I would hope that the Minister will not agree with that slightly immoral suggestion from the noble Lord opposite, that the Minister says that he will consult when he has no intention of doing so and already has his mind made up. Whatever we think about Ministers it would be unfortunate if it went on the record that they actually do what the noble Lord described.
Lord BOYD-CARPENTER: If the noble Baroness will allow me to say so, my memory had gone back a year to a number of Ministers—and I will not name them—in the previous Administration.
Lord MOTTISTONE: I wonder if the noble Lord, Lord Jacques, before finally reaching a conclusion, has given consideration to subsection (3). He has come a long way towards modification of his original point. The subsection seems to make provision for the negative aspect of what Lord Jacques is calling for positively. It may be that the negative aspect of this matter meets the point of my noble friend —it must; it is in the Bill—in the sense that it is not calling for a vast, comprehensive list but is going somewhere towards identifying those areas where specific acts are not treated as anticompetitive. That goes a long way towards meeting the basic principle asked for by the noble Lord, Lord Jacques.
Viscount TRENCHARD: Before the noble Lord, Lord Jacques, answers that request for consideration, I should love to appear a reasonable man (as my noble friend has said) always prepared to consult again. But I am quite sure that we are on a wrong course here—the Committee is, or noble Lords opposite are. What the noble Lord, Lord Jacques, is asking for when he asks: "Will the Director General give guidance?" is, in effect, to ask me to tell the Director General how to carry out this Bill. That, we specifically do not want to do. The Director General must make very public all his actions.
My noble friend Lord Harmar-Nicholls, asked what happens if we get an unreasonable man. Frankly, I believe that even if we were to get an unreasonable man, there are all the provisions that are upon him of what he has to declare and
628
the reports that he has to make. He has no legal power whatever. He cannot convict a company; he cannot even send a company to court. I really believe that if he publicly states things which clearly are unreasonable and not in accord with the general body and forward movement of thinking on this vexed and difficult question of competitive practices, he will not be there for very long. I believe that even in the unlikely event that either Administration would appoint an unreasonable man to that position, we are not taking in the point that he is not making the law.
Furthermore, if he is a reasonable man, which I believe he will be, then I am quite sure that he will be having discussions with all the trade associations in the country. I am quite sure that they already ask him to come to meet them—in fact, I know that they do—at regular intervals. I know that all the difficult and thorny questions of what is or is not a competitive policy are being discussed between the Director General and between certain officers who are interested in the Monopolies Commission and others, and the trade associations. This goes on all the time. I am pretty sure that when he does move there is not going to be any doubt in the minds of the traders concerned that this is a practice which is investigatable. Even then, it may be a moot point; and when he publishes his report there is the delay before a reference is made.
Surely we are overlooking this fact. This is a preliminary and fast investigation where we want to be able to do preliminary, fast investigations which do not have the force of law. Let us not complicate the issue by telling the Director General how he should behave.
Lord JACQUES: May I leave the Committee with this thought? Had my amendment been moved by a member of the party opposite from where I am standing, it would have been carried by a huge majority.
5.41 p.m.
On Question, Whether the said amendment (No. 10) shall be agreed to?
Their Lordships divided: Contents, 64; Not-Contents, 120.

CONTENTS

Airedale, L.

Gardiner, L.

Ponsonby of Shulbrede, L. [Teller.]

Ardwick, L.

Glenamara, L.

Aylestone, L.

Goronwy-Roberts, L.

Rhodes, L.

Balogh, L.

Granville of Eye, L.

Ritchie-Calder, L.

Birk, B.

Hale, L.

Ross of Marnock, L.

Blyton, L.

Henderson, L.

Sefton of Garston, L.

Boston of Faversham, L.

Houghton of Sowerby, L.

Shinwell, L.

Brockway, L.

Jacques, L.

Stedman, B.

Brooks of Tremorfa, L.

Janner, L.

Stewart of Alvechurch, B.

Bruce of Donington, L.

Kaldor, L.

Stewart of Fulham, L.

Caradon, L.

Kennet, L.

Stone, L.

Cledwyn of Penrhos, L.

Leatherland, L.

Strabolgi, L.

Collison, L.

Lee of Newton, L.

Taylor of Blackburn, L.

Cooper of Stockton Heath, L.

Listowel, E.

Taylor of Gryfe, L.

Crowther-Hunt, L.

Llewelyn-Davies of Hastoe, B.

Taylor of Mansfield, L.

David, B.

Longford, E.

Wallace of Coslany, L.

Davies of Leek, L.

Lovell-Davis, L.

Walston, L.

Davies of Penrhys, L.

McGregor of Durris, L.

Wells-Pestell, L. [Teller.]

Diamond, L.

Maelor, L.

White, B.

Fulton, L.

Monson, L.

Willis, L.

Gaitskell, B.

Phillips, B.

Wilson of Radcliffe, L.

Galpern, L.

Wynne-Jones, L.

NOT-CONTENTS

Abinger, L.

Giladwyn, L.

Northchurch, B.

Aircy of Abingdon, B.

Glasgow, E.

Onslow, E.

Amory, V.

Greenway, L.

Orkney, E.

Ampthill, L.

Grey, E.

Pender, L.

Auckland, L.

Gridley, L.

Redesdale, L.

Avon, E.

Hailsham of Saint Marylebone, L. (L.Chancellor.)

Rochdale, V.

Banks, L.

Romney, E.

Barrington, V.

Halsbury, E.

St. Davids, V.

Beaumont of Whitley, L.

Hampton, L.

St. Germans, E.

Belhaven and Stenton, L.

Hanworth, V.

St. Just, L.

Bellwin, L.

Harmar-Nicholls, L.

Saint Oswald, L.

Bessborough, E.

Hemphill, L.

Sandford, L.

Boyd-Carpenter, L.

Henley, L.

Sandys, L. [Teller.]

Brookes, L.

Hereford, V.

Seear, B.

Caccia L.

Home of the Hirsel, L.

Selkirk, E.

Caithness, E.

Hooson, L.

Sempill, Ly.

Campbell of Croy, L.

Hylton-Foster, B.

Spens, L.

Cathcart, E.

Inglewood, L.

Stanley of Alderley, L.

Clifford of Chudleigh, L.

Killearn, L.

Strathclyde, L.

Clitheroe, L.

Kimberley, E.

Strathcona and Mount Royal, L.

Cork and Orrery, E.

Linlithgow, M.

Cottesloe, L.

Lloyd of Kilgerran, L.

Suffield, L.

Craigavon, V.

Long, V.

Swansea, L.

Cromartie, E.

Lucas of Chilworth, L.

Teviot, L.

Cullen of Ashbourne, L.

Mackay of Clashfern, L.

Tranmire, L.

Daventry, V.

Macleod of Borve, B.

Trefgarne, L.

de Clifford, L.

McNair, L.

Trenchard, V.

De La Warr, E.

Malmesbury, E.

Trevethin and Oaksey, L.

Denham, L. [Teller.]

Mansfield, E.

Tweedsmuir, L.

Drumalbyn, L.

Margadale, L.

Vaux of Harrowden, L.

Dundee, E.

Massereene and Ferrard, V.

Vernon, L.

Ellenborough, L.

Merrivale, L.

Vickers, B.

Emmet of Amberley, B.

Meston, L.

Vivian, L.

Exeter, M.

Middleton, L.

Wade, L.

Faithfull, B.

Morris, L.

Wakefield of Kendal, L.

Falkland, V.

Mottistone, L.

Westbury, L.

Ferrier, L.

Mountgarret, V.

Wigoder, L.

Gainford, L.

Mowbray and Stourton, L.

Winstanley, L.

Garner, L.

Moyne, L.

Wise, L.

Geddes, L.

Murton of Lindisfarne, L.

Young, B.

Geoffrey-Lloyd, L.

Newall, L.

Resolved in the negative, and amendment disagreed to accordingly.

5.50 p.m.
Lord STANLEY of ALDERLEY Lord STANLEY of ALDERLEY moved Amendment No. 11:
Page 3, line 29, at end insert—
(" (7) For the purposes of this Act a course of conduct is not an anti-competitive practice if it constitutes an agreement which is excluded from the application of the Restrictive Trade Practices Act 1976 by virtue of section 33 of that Act (Agricultural and Forestry Associations, and Fisheries Associations).").
The noble Lord said: The purpose of this amendment at this stage is to try to discover how the Government interpret the effect of this Bill on agricultural cooperatives. I hope that I shall not be accused of quoting anything or anybody other than the Bill or myself—both are somewhat confused on this matter. I should declare that I am a member and director of various agricultural cooperatives. The trouble is that the principle behind the Bill is in particular to stop two or three co-operatives from gathering together, not in this case to pray, but in order to obtain a higher price by, in the words of the Bill, "restricting, distorting or preventing" the supply of their product. That of course is exactly what we do, or indeed try to do, when we belong to an agricultural co-operative.
If my simple summary of the Bill's objective is correct, it follows that we who are agricultural co-operators—and, I might say, encouraged to be so by many past Governments, and indeed the EEC —are frowned upon by this Bill, and would be subject to all the provisions and inspection by the Director General of Fair Trading, the Monopolies and Mergers Commission, not to mention the Secretary of State for Trade. In theory, at least, they could stop us from co-operating in order to obtain either a better price for our product or maybe better terms from our customers.
What is more confusing is that the agricultural co-operatives have been expressly excluded and protected in Section 33 of the Restrictive Trade Practices Act. In this Bill we are complicating the co-operatives' lives by including them. There is an urgent need for clarification here. I hope and trust that my noble friend can put my mind at rest, and maybe he can move an amendment so that the agricultural co-operatives will not have to spend their time answering long and detailed questions posed by the
632
Director General of Fair Trading, the Monopolies and Mergers Commission and/or the Secretary of State for Trade.
I noted the possible exemption mentioned by my noble friend Lord Trenchard in his Second Reading speech, that the Government may make exemptions for firms with a turnover of (I think he said) £5 million. I welcome such an action, but quite a few agricultural co-operatives now have a turnover very much in excess of that. So far as the grain trade is concerned, a turnover of say £30 million is really chickenfeed compared to those with whom we have to trade.
If my noble friend is confused—as I am —over the position of the agricultural co-operatives, I will fully understand if he does not wish to accept this amendment to straighten out what I believe to be a muddle. But I hope he will put his mind, and that of his department, to outlining very clearly how we, as agricultural co-operatives, stand and behave in regard to this Bill. I beg to move.
5.54 p.m.
Lord TREFGARNE: There is no muddle in our minds. The Government agree that agricultural co-operatives certainly have a valuable role to play and entirely accept that they can and do make significant contributions to increasing standards and increasing efficiency. We would not wish this Bill to discourage or undermine such desirable aims. On the other hand, co-operatives, like any other enterprise, may seek, where they have a strong market position, to abuse that position by anti-competitive behaviour. If they were to do so, I am sure we would all agree that such anti-competitive behaviour should be within the scope of this Bill.
The question is: Where to draw the dividing line? We believe that the Bill as it stands should not discourage farmers from entering into co-operation for beneficial purposes; and I can assure my noble friend that, as the Bill is drafted, the Director General of Fair Trading would not normally be concerned with the internal working and relationships of a co-operative; nor would membership of a co-operative by itself constitute an anticompetitive practice.
I should like to remind your Lordships of the Government's intention, to which

633
my noble friend referred, to introduce a cut-off to exempt small firms, or farmers or co-operatives, with a turnover of below £5,000,000 a year from investigation, unless they have more than a 25 per cent. share of a particular market. That alone should ensure that most co-operatives, although I accept not all of them, are outside the scope of the Bill. We are, however, looking closely at the question to see either whether we can give a clearer assurance of the context of the application of the Bill to co-operatives, or whether some further clarification is needed to remove any doubts that remain. I hope to be in a position to say something further about this on Report; and, with that assurance, I hope that my noble friend will not press his amendment.
The Earl of CAITHNESS: I, for one, am very pleased to hear those words from the Front Bench, because this is a problem. As my noble friend will be aware, in order to enable agricultural co-operatives to become feasible in their own right, the Agriculture and Forestry Associations Act was passed in 1962. That was absorbed into the Restrictive Practices Act. However, I welcome the assurance that he has given that he will look at this again, because it is getting in a muddle, in that the co-operatives are already governed by the Agricultural Marketing Act and the Fair Trading Act. The Director General of Fair Trading has pretty extensive powers now to look into any co-operative when it seems as though it might be abusing the purposes for which it was set up. We are governed by stringent rules under the Restrictive Practices Act and I am very glad that he realises that a further complication by inclusion in the provisions of the Competition Bill would make life very difficult indeed for the co-operatives.
Lord MOTTISTONE: I do hope that if the Government think further about this they will bear in mind that co-operative farmers are no different from other traders and that they need to be in competition with other processors and traders of whatever sort, and therefore need to be subject to anti-competitive legislation as much as anybody else. I hope that will be fully borne in mind by the Government.
Lord TREFGARNE: It certainly will be.
Lord STANLEY of ALDERLEY: I, too, very much welcome the remarks made by the noble friend on the Front Bench that he will look at this again. I am glad that, though he did not say so in so many words, he implied that he was slightly confused, just as I am totally confused, over the matter. I think that agricultural co-operatives are slightly different from other people. We have been encouraged for many years; we are terribly weak sellers. It is one of the things that is being permanently complained about: the Minister of Agriculture permanently says: "Get out and sell." Here we are, trying to get out and sell, as agricultural co-operatives; so I would to some extent disagree with my noble friend here, and I do not think it will be the last time that I shall do so during this Committee stage.
There are one or two other points I would like to ask my noble friend to consider when he goes back and thinks about this. I would ask him to remember that at the present time agricultural co-operatives can be investigated by the Director General of Fair Trading under the Restrictive Trade Practices Act if they do anything to break the rules under that Act. Now we are going to get the situation that if the Director General of Fair Trading, as I understand it, wakes up one morning and perhaps is a bit cross with us, he can just descend on us for no reason whatsoever. Before, he had to descend on us if we had broken a particular thing. I am not very keen on that. I do not think that would increase our efficiency, as my noble friend on the Front Bench said, if we are permanently to have to turn up and listen to the Director General of Fair Trading as he looks at our affairs. There is a slight problem there. Surely, if we are exempted under Section 33 of the Restrictive Trade Practices Act, that should be all right. That is where we should stay and we should be taken out of this Bill. However, certainly I have no intention of following this up after the very good assurance I have had from my noble friend, bearing in mind what was said in connection with the last amendment—that they had no intention of giving that sort of assurance unless they were actually going to do

635
something about it. I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
Clause 2, as amended, agreed to.
Clause 3 [Preliminary investigation by Director of possible anti-competitive practice]:
6 p.m.
Lord WALLACE of COSLANY Lord WALLACE of COSLANY moved Amendment No. 12:
Page 3, line 30, after ("Director") insert (" acting alone or acting upon representations made to him").
The noble Lord said: This is quite an important amendment, the purpose of which is to make provision for organisations which are recognised as representing consumers to raise with the Director practices which appear to be anti-competitive, either directly or through a parliamentary representative who could also raise issues on behalf of constituents. The amendment brings in a very important democratic right, and I would add that Amendment No. 41 to Clause 11, which is shortly to be moved by the noble Baroness, Lady Seear, also covers this point.
There are a number of organisation and State constituted bodies, such as the Consumer Council, Townswomen's Guilds, Women's Co-operative Guilds and many others which have, in the past, played a valuable and constructive part in the area of consumer protection. In the present situation, when trust and understanding on the part of the public are urgently required by the Government, the contribution made by the bodies I have mentioned, and others, could prove invaluable. Furthermore—and I am bothered about a situation which arises in another place—the amendment would ease the intolerable position of elected Members of Parliament, who, bearing in mind the statement of the Minister for Consumer Affairs at the end of the Third Reading in another place, cannot, it appears, make direct representations to the Secretary of State, but have to search to find the Minister responsible for a given situation.
If this amendment were accepted, the Director would have to reach a decision
636
about whether to act on the representations which have been made. It is true that the Director's duty to consider complaints is already provided for in Section 2(2) of the Fair Trading Act, but this is no reason for rejection of the amendment. On the contrary, it is all the more essential for a reference to be made in this Bill, in order to gain public support and confidence, which I am sure the Government would wish to see. As the Bill stands, there is no right of complaint by a member of the public to the Director. I feel that this is very wrong indeed, and I hope that the Government —who have so far been set as hard as the cement which the noble Lord, Lord Boyd-Carpenter, alleges he produces —will show a little more tolerance and understanding.
I understand that the Minister responsible for public relations has recently urged his colleague Ministers to put over the real face of the Government. I have my views on that, but, here at least, is something which they can put into the Bill to show that the public have a part to play. So I urge the Government to think very seriously about the amendment. I beg to move.
Baroness SEEAR: I very much hope that the Government will feel able to accept this amendment. There is great anxiety about price increases and it is highly desirable that elected representatives, consumer bodies and voluntary organisations, of one kind or another, should feel that they are able to play a part. I strongly support what the noble Lord, Lord Wallace, has just said, if only to relieve the anxieties that people are experiencing in the face of price increases, and the sense of impotence that they have in their inability to do anything about them. It surely cannot do any harm to allow this amendment to be included, and it would be evidence of the Government's understanding of how anxious people are in this area.
Lord TREFGARNE: I entirely accept what has been said by the noble Lord, Lord Wallace, and the noble Baroness, Lady Seear, that everybody ought to have the right to approach the Director General with their representations. Indeed they do. Under the Bill as drafted, the Director General is entirely free to take any representations into account when

637
selecting cases for investigation. An explicit provision is not necessary, and I do not think that we ought to write it into the Bill.
Lord WALLACE of COSLANY: I am astonished. My relations with the noble Lord outside this Chamber are quite friendly, but, really and truly, he is spitting in the face of the housewife and that is dangerous. Here am I, on the Opposition Benches, humbly trying for the sake of the nation to help the Government and all they are doing is just rejecting the amendment out of hand. The noble Lord has said that this is written into the Bill, but it should be more explicitly stated on the lines of my amendment. I ask the noble Lord not to be so difficult. Let us have a little hit of reason.
Baroness SEEAR: It cannot do any harm and may do some good. What is the objection?
Baroness GAITSKELL: May I add my opinion to that of the noble Baroness, Lady Seear, and my noble friend Lord Wallace. It is awful of the Government not to give way on such a small and valid point, and to make it a real case of principle. It is really not very nice.
Viscount TRENCHARD: With respect to the noble Lord, I think that my noble friend, in the hope of getting through the less important questions fairly quickly, has stated the Government's position fairly brusquely. But may I ask the noble Lord who moved this amendment what it is that he thinks his amendment will achieve which is not in any event bound to happen? The Director General of Fair Trading is not in some ivory tower somewhere, as I was saying to some of my noble friends on a previous amendment. He has a statutory job to do. He is bound to be accessible, and fully accessible, to all those with credentials to advise him on his task, particularly those concerned with consumer protection, which the noble Baroness mentioned, or with departments, elected representatives, local authorities, national Government and Quangos who may be involved. Why is it necessary to state the obvious? We are trying to keep Bills fairly short. Why does the noble Lord want to state what is bound to happen in any event? We cannot give these bodies statutory powers
638
to be consulted. Dozens of bodies would consider that they had to be consulted on each issue, if there were statutory powers. So what really is the purpose—and I say it as politely as I can—of the noble Lord's amendment? What is it going to achieve that is not already done?
Lord WALLACE of COSLANY: The noble Viscount and his colleague keep hiding behind the skirts of the Director-General if I may use that term. The noble Lord smiles—
Viscount TRENCHARD: I am smiling about the skirts of the Director General.
Lord WALLACE of COSLANY: Why should there not be a Director General with skirts?
Lord TREFGARNE: Is the noble Lord aware that the Director General is a Scotsman and probably wears a kilt?
Lord WALLACE of COSLANY: I will not comment on that, because I am supposed to have come from Scotland in the dim and distant past. But, really and truly, I do not understand the Front Bench here. Noble Lords may say that it is already in the Bill, but where is it? The Government have to give an outward appearance to the public that they can make representations. I will ask the noble Lord another question. What is his honest opinion of what was said at the very last stage of the Third Reading of the Bill in another place, when she said that the Secretary of State would have no responsibility for prices? It would leave the responsibility of Ministers and the responsibility of their Department, undefined.
This is a very important democratic point. The Government are smothering it with confusion. The organisations that I am speaking about have played a good part, and they continue to do so. We want the voice of the people—
Several noble Lords: Hear, hear!
Lord WALLACE of COSLANY:—so why not put it in the Bill? If noble Lords shout "Hear, hear! ", I invite them to come and join me in the Division Lobby.
6.11 p.m.
On Question, Whether the said amendment (No. 12) shall be agreed to?

Resolved in the negative, and amendment disagreed to accordingly.

Their Lordships divided: Contents 74;Not-Contents, 92.

CONTENTS

Annan, L.

Gladwyn, L.

Sefton of Garston, L.

Ardwick, L.

Goronwy-Roberts, L.

Segal, L.

Aylestone, L.

Gregson, L.

Shepherd, L.

Balogh, L.

Grey, E.

Shinwell, L.

Banks, L.

Hale, L.

Simon, V.

Barrington, V.

Hampton, L.

Spens, L.

Beaumont of Whitley, L.

Hanworth, V.

Stedman, B.

Blease, L.

Henderson, L.

Stewart of Alvechurch, B.

Blyton, L.

Hood, V.

Stewart of Fulham, L.

Boston of Faversham, L.

Houghton of Sowerby, L.

Stone, L.

Brockway, L.

Jacques, L.

Strabolgi, L.

Brooks of Tremorfa, L.

Janner, L.

Taylor of Blackburn, L.

Caradon, L.

Kaldor, L.

Taylor of Gryfe, L.

Cledwyn of Penrhos, L.

Lee of Newton, L.

Taylor of Mansfield, L.

Collison, L.

Llewelyn-Davies of Hastoe, B.

Wade, L.

Cooper of Stockton Heath, L.

Longford, E.

Wallace of Coslany, L. [Teller.]

Crowther-Hunt, L.

McNair, L.

David, B.

Maelor, L.

Walston, L.

Davies of Leek, L.

Milner of Leeds, L.

Wells-Pestell, L.

Davies of Penrhys, L.

Ponsonby of Shulbrede, L. [Teller.]

Whaddon, L.

Diamond, L.

Wigoder, L.

Elwyn-Jones, L.

Rhodes, L.

Willis, L.

Fulton, L.

Ritchie-Calder, L.

Wilson of Radcliffe, L.

Gaitskell, B.

Ross of Marnock, L.

Winstanley, L.

Galpern, L.

Seear, B.

Wynne-Jones, L.

Gardiner, L.

NOT-CONTENTS

Abinger, L.

Ferrier, L.

Murton of Lindisfarne, L.

Airey of Abingdon, B.

Feversham, L.

Northchurch, B.

Amory, V.

Gainford, L.

O'Neill of the Maine, L.

Ampthill, L.

Galloway, E.

Onslow, E.

Auckland, L.

Garner, L.

Orkney, E.

Avon, E.

Glasgow, E.

Pender, L.

Bellwin, L.

Gray, L.

Redesdale, L.

Bessborough, E.

Greenway, L.

Rochdale, V.

Brookes, L.

Gridley, L.

Romney, E.

Brougham and Vaux, L.

Grimston of Westbury, L.

St. Davids, V.

Caithness, E.

Hailsham of Saint Marylebone, L. (L. Chancellor,)

St. Germans, E.

Campbell of Croy, L

St. Just, L.

Clifford of Chudleigh, L.

Halsbury, E.

Sandys, L.[Teller.]

Cork and Orrery, E.

Hereford, V.

Selkirk, E.

Craigavon, V.

Hives, L.

Sempill, Ly.

Craigmyle, L.

Home of the Hirsel, L.

Stanley of Alderley, L.

Cullen of Ashbourne, L.

Hornsby-Smith, B.

Strathclyde, L.

Daventry, V.

Hylton-Foster, B.

Strathcona and Mount Royal, L.

de Clifford, L.

Inglewood, L.

Stuart of Findhorn, V.

De Freyne, L.

Killearn, L.

Swansea, L.

De La Warr, E.

Kimberley, E.

Teviot, L.

Denham, L.

Kinnoull, E.

Tranmire, L.

Drumalbyn, L.

Lauderdale, E.

Trefgarne, L.[Teller.]

Duncan-Sandys, L.

Long, V.

Trenchard, V.

Dundee, E.

Lucas of Chilworth, L.

Tweedsmuir, L.

Ellenborough, L.

Lyell, L.

Vaux of Harrowden, L.

Elliot of Harwood, B.

Mackay of Clashfern, L.

Vernon, L.

Emmet of Amberley, B.

Mansfield, E.

Vickers, B.

Exeter, M.

Massereene and Ferrard, V.

Vivian, L.

Faithfull, B.

Mottistone, L.

Wise, L.

Falkland, V.

Mowbray and Stourton, L.

Young, B.

6.19 p.m.
Baroness SEEAR Baroness SEEAR moved Amendment No. 13:
Page 3, line 43, leave out from (" relate ") to (" arrange") in line 1, page 4, and insert (";but
( )before arranging to be published the notice referred to in paragraph (b) below the Director shall afford to the person or persons whose conduct is to be investigated an opportunity to make representations within such a period as the Director considers reasonable in the circumstances; and
( ) subject to subsection (9) of this section").
The noble Baroness said: The last thing that I want to do is to build delays into the operation of this legislation. However, I think that there is a case for asking that before the fact that an investigation is taking place is made public the bodies or persons to be investigated should have the chance to take up the issue with the Director General. I recognise that in the vast majority of cases there will be no question of not proceeding with the investigation, but it could happen that there is some misunderstanding and raising issues with the Director General could mean that he would change his mind.
I think there is no doubt that organisations feel that the fact of being investigated is in itself a criticism and that the mere fact that it is known that they are being investigated can have an effect on their business. Therefore, I think that the right to have a hearing to explain their position is one that ought to be built into the legislation.
I am sure that the noble Lord will tell us that this of course will happen. I suspect that on everything that we are going to raise in this Bill we shall be told that of course it will happen; that it is implicit in the legislation. But once again before the noble Lord says this, may I make the point that there is a lot to be said for having things made clear in the Bill as well as having it implicit in the Bill. These things may be crystal clear to the noble Lord the Minister, but they are not always so clear to other people who are less familiar with ploughing their way through legislation. I beg to move.
Lord TREFGARNE: We have some sympathy with the underlying purpose of this amendment—that firms which are investigated should be given a fair hearing. But it should be remembered that the
642
Director General's investigation is intended only to obtain a preliminary view of the facts. This preliminary investigation itself gives firms an ample opportunity to present their case to the Director General. Nevertheless, we recognise that even before an investigation formally begins it would normally be desirable for the Director General to seek the views of the company concerned. This is only common sense, and we understand that it would be the Director General's intention to do so wherever practical. A strict legal requirement to this effect would however be cumbersome, and could, we think, involve unnecessary delays and complications for example, where a number of subsidiary companies were involved.
The amendment as it stands seeks to introduce a further opportunity for the Director General to reconsider a decision to investigate. This could be likely to result in lengthy and frustrating delaying tactics. It is surely better that once the Director General has firmly decided on an investigation, it should be allowed to proceed without interruption. I hope the noble Baroness will be persuaded by my remarks and will not press this amendment.
Lord MOTTISTONE: There is one small point which worries me. The noble Baroness said that because the matter is going to be made public anyhow then there is purpose for her amendment because it gives a chance to the company to explain the situation beforehand. What I did not like was her point, nor did I like the fact that my noble friend on the Front Bench did not refute that point, because as I read Clause 3(2)(a) and more especially subsection (2)(b) it seems to me that paragraph (b) says that the fact that there is going to be an investigation will only be published in such a manner as the Director considers most suitable for bringing it to the attention of any other person who is concerned. To me, that is not making the matter widely public. I think it is crucial and it is the subject of an amendment which I have tabled, and I beg the indulgence of the Committee to make a little of the speech that I shall be making later, because it is an important point. If it is thought that it does not matter that the fact that a company is to be investigated is made

643
public I hope the Government will give careful thought to any amendment on that line.
I believe that the fact that a company is being or has been investigated or is going to be investigated needs to be treated with as much confidentiality as can reasonably be applied, because it could well be that it will react against the company in the market, its general standing, its reputation, even if it is totally cleared or, under the circumstances of this Bill, every undertaking that is ever called for is given. The fact that it has happened reminds me of the terrible phrase that my noble father warned me against in politics, "There's no smoke without fire". People go about saying that and however much a person is cleared, they still say it.
With the greatest respect to the noble Baroness, I do not agree with this amendment and I think my amendment is much better, but the fact of the matter is that we really must have it confirmed to us that my reading of subsection (2)(b) is correct and that the publicity—because we are talking about publicity—given to an investigation or a potential investigation is as restricted as it possibly can be so as not to harm somebody's reputation when it is purely an investigation and the result is that nothing happens. I hope that my noble friend on the Front Bench will be able to give us an assurance.
Baroness SEEAR: If the noble Lord, Lord Mottistone, really thinks that in subsection (2)(b) the words,
" in such manner as the Director considers most suitable for bringing the proposed investigation to the attention of any other persons who, in the opinion of the Director, would be affected by or be likely to have an interest in the investigation ",
mean that the matter is going to remain secret and confidential for very long, his experience of rumour is very different from mine. Once all those people who might have an interest in it have been informed about it, it will be known to all the people who have any interest in the matter whatsoever. That is what I want to avoid, for precisely the same reason that the noble Lord, Lord Mottistone, has given—that this can be extremely damaging. Therefore, at least the company should have a chance to get in first and point out to the Director General that just this once he has made a mistake.
Lord PONSONBY of SHULBREDE: This amendment deals with a preliminary investigation by the Director General and the intention of the Bill, which seems right, is that this should be a speedy investigation. My feeling is that this amendment would have the effect of very much delaying and extending that initial investigation and therefore on the whole my view is that the Government view is probably the right one on this amendment.
Baroness SEEAR: I am afraid I do not agree with that and I think that some amendment of this kind should be included in the Bill.
On Question, amendment negatived.
6.29 p.m.
Lord JACQUES Lord JACQUES moved Amendment No. 14:
Page 4, line 9, at end insert (" but no such notice shall be published before the end of the period of two weeks beginning with the day on which the Secretary of State receives notice of the proposed investigation under paragraph (a) above ").
The noble Lord said: I think it would be for the convenience of the Committee if I were to speak to Amendment No. 16 at the same time. Subsection (1) of Clause 3 gives the Director General power to investigate. Subsection (2)(a) requires the Director General to give notice to the Secretary of State and the person whose conduct he is to investigate. Subsection (2)(b) requires the Director General to publish a notice of investigation indicating the matters to be investigated and the person whose conduct is to be investigated. Subsection (5) gives the Secretary of State power to veto the investigation within two weeks. Surely it is not in the interests of any party that there should be publication and then within the next two weeks there should be a veto by the Secretary of State. That seems to me to be absurd. It is not in the interests of the Government that it should happen, nor the Party concerned nor anybody else. It is in the interests of all that if there is to be a veto it should be before, and not after, publication. Therefore, the purpose of Amendment No. 14 is that publication should be after the two weeks during which there can be a veto. It therefore defers publication until the period for the veto has entirely elapsed,

645
and there could not be the confusion which there would be if the Bill is left as it is.
Amendment No. 16 provides that the notice received by the person whose conduct is to be investigated shall state the date after which publication shall be made. If the person whose conduct is to be investigated knows the date after which there will be publication, then he has an opportunity of making any representations before publication. If he does not know the date, he cannot do that. I believe that these two amendments make no material alteration to the Bill but are fair and reasonable to the parties concerned. I beg to move Amendment No. 14.
Lord TREFGARNE: I am sorry to say I am not very happy with this one, either. There are three points which your Lordships might like to consider. The first difficulty would be that it would, of course, as with the previous amendment, delay the start of an investigation by the Director General, and that, as the noble Lord, Lord Ponsonby, said earlier, is not desirable in the context of this quick procedure. Secondly, I think that the arrangements, if we agreed to this amendment, would seem to be to those who were subject to an investigation a sort of court of appeal where the Secretary of State would be obliged to reconsider almost every decision made by the Director General to institute an investigation. That is not the intention. It is intended only that the Secretary of State should use his powers in a very narrow range of cases, principally where the Director General proposed to investigate matters which were properly a matter of Government policy.
I think the third and final objection is that an arrangement such as this would smack of a behind-the-scenes deal where the public at large might be persuaded to think that it was all a put-up job and that neither the Director General nor the Secretary of State was a particularly free agent in this matter. I hope, therefore, for these reasons the noble Lord will not press this amendment.
Lord JACQUES: I should like to reply to all three points which have been made.
646
First of all, on the question of delay, surely there will be delay in any case. You are not going to start upon an investigation before the period during which it can be vetoed has come to an end. You do not want an investigation partly completed and then the Secretary of State vetoing it. If the Secretary of State wants to veto it he should veto it before it starts. Therefore, I do not accept that there will be any delay. In any case, if there is any delay the whole period is only two weeks. The Bill provides that within two weeks the Secretary of State shall have the power of veto. He may decide to veto it within three days. In that case, since it would be known that there was no veto, the investigation could then start. I do not believe there is any serious delay. Two weeks is not important, and it does avoid the confusion. Look at the confusion you would have if you got publication and then the Secretary of State said, "I veto that". That is obviously not in the interests of the Secretary of State or anybody else. It is quite wrong.
Coming to the question of a court of appeal, there is no question of a court of appeal. The person whose conduct is to be investigated will be advised in accordance with subsection (2)(a) that his conduct is going to be investigated. He would obviously wish to acknowledge it. He will not be asked if he has anything to say, but if he knows that there is going to be publication in two weeks and he wants to say anything before publication he had better get on and do it. So I do not accept that there is any question of a court of appeal.
The third objection is the appearance of a deal behind the scenes. There is nothing in the words of the Bill or in the words which I have used in the amendment which would smack of a deal behind the scenes. What is said almost throughout this Bill is that the Director General shall try and get agreement with the parties. It is quite obvious that if he gets agreement with the parties that a practice is going to be dropped he will not proceed with his investigation. Even if he has proceeded with his investigation he is authorised to try to get agreement. Consequently, I think all these three reasons are absolutely phoney.
Lord TREFGARNE: I suppose I had better reply to what the noble Lord has said, but I do not think it will have persuaded your Lordships. The fact is that an investigation could start within the two-week period allowed for the Secretary of State to exercise his veto, and in general cases it will, because most of the investigations decided upon by the Director General will under no stretch of the imagination be candidates for the Secretary of State's veto. Therefore, the Director General will of course proceed right away. Where the Director General apprehends that there is a possibility of the Secretary of State seeking to exercise his veto he will undoubtedly, as he is required to do under the Bill, have informed the Secretary of State in advance of his intention to carry out the investigation and the Secretary of State will no doubt have made up his mind whether or not to exercise the veto.
Lord JACQUES: Before he knows there is going to be an investigation?
Lord TREFGARNE: No. Once the Secretary of State has heard formally of the Director General's decision to institute an investigation he will be able to make up his mind right away, if he needs to, whether or not to exercise the veto.
As for the "behind the scenes" point, it will be the case, if the noble Lord's amendment is agreed to, that the announcement of the Director General that he proposes to carry out the investigation, and the announcement of the Secretary of State's veto, will be made at more or less the same time, which I should have thought would always cause people to think that the whole matter has been fixed up behind the scenes, which would not, of course, necessarily be the case. It would, I think, cause people some apprehensions and misgivings. I think the noble Lord's amendment detracts from the effect of the Bill in this clause, and I hope he will not press it.
Lord JACQUES: I think this is sheer obstinacy. This amendment clearly improves the Bill. It does not involve any serious delay. It avoids the confusion of publication followed by veto, which is in nobody's interest. But I am not going to press this to a vote. I think the Government are being damned obstinate.
Viscount TRENCHARD: I am glad the noble Lord will not press it, but we really are not being obstinate. You either have to get the Secretary of State's agreement to every move of the Director General of Fair Trading, or, if you do it the way this amendment suggests the Director, working on a wide-ranging brief, looking for areas he wants to look at, of his own initiative, publishes that he is going to investigate. If you have a delay before he starts, a period for consultation, you are bound to have every interested body in the country descending on the Secretary of State and the Director General to say, "Do not start". This would completely defeat the power of the Director General to do these quick, short, sharp investigations in many areas, and it would make life for the Secretary of State absolutely impossible. Everybody would be on him if there was a need not to go ahead with the investigation until the Secretary of State had decided whether to use the veto. It really is not practical given the objectives of this body and this Bill.
Lord JACQUES: The argument is exactly the opposite to what the Minister has said. He has confused the facts. He has transposed the two matters. I think that Hansard will show that he said: "if there is publication, and then delay". I am not asking for that. I am asking that there should be delay and then publication and that is quite the opposite to what the Minister has said.
On Question, amendment negatived.
6.41 p.m.
Lord TEVIOT Lord TEVIOT moved Amendment No. 15:
Page 4, line 9, at end insert—
(" (2A) Where the Secretary of State receives notice under subsection (2)(a) above, he shall consult any other Minister who, in his opinion, has functions directly relating to the persons specified in the notice.").
The noble Lord said: I beg to move Amendment No. 15 and with it discuss Amendment No. 17. This amendment is relevant to a large number of later amendments in Clauses 7, 9 and 11. I realise that I shall not get very far with this amendment because it is rather similar to that of the noble Lord, Lord Jacques. I am asking for the Minister to be brought in. I have listened to the arguments that have been put forward by my noble friends

649
on the Front Bench. I cannot say that I am extremely happy, but before I withdraw the amendment I should like to hear from them whether the departments concerned, such as transport and energy, are quite happy that they will not be brought in until the end of the power to veto. Like the noble Lord, Lord Jacques, I thought that it would have been rather better—and it would not have been behind the scenes—if they had been brought in at the beginning and thereafter at every stage. Because, with great respect to the Secretary of State for Trade, he cannot know about the various inquiries and investigations that have been brought up—no one Minister can—whereas if the matter had been referred to the relevant Minister, he would have been able not necessarily to veto, but to advise and that would save a great deal of argument and even a great deal of bureaucracy. Having made those short remarks, I welcome the Government's reply.
Lord TREFGARNE: I have a great deal of sympathy with the amendment, or the series of amendments, proposed by my noble friend. However, I think that the formal consultation procedures which my noble friend seeks to introduce are rather cumbersome and, I hope your Lordships will agree, unnecessary. The Secretary of State will certainly wish to consult the relevant Minister, who might well be the Minister of Transport, about the sort of matters in which my noble friend takes such an interest, before using any of his powers under the Bill in respect of the matters for which that Minister had direct responsibilities. This would be in complete accordance with the normal principles of collective responsibility and that I think removes the need for a formal procedure. I hope that that explanation will persude my noble friend that the sort of procedures which he desires will, in fact, take place and that therefore he will not press his amendment.
Baroness SEEAR: We are still talking about the same problem; namely, that the Ministers think that informal understandings are good enough and that we do not need to have these matters written into the legislation. With the greatest respect, I do not believe that that is so. If the informal procedures work, and they want them to work, what harm is there in
650
having them written into the legislation, as well?
Lord TREFGARNE: Collective responsibility is a very important matter. Every Minister in every Government is responsible equally with his colleagues, for every measure put forward by that Government and, therefore, of course, insists that he is consulted on proposals that affect his department. I hope that the noble Baroness will accept—and indeed my noble friend behind me will accept—that there is a good deal of formality in the consultations that take place between Ministers. I hope that the noble Baroness will accept what I have said on this occasion.
Lord TEVIOT: I accept what my noble friend has said. The Director General of Fair Trading will, as he said, informally discuss the matter with the various Ministers of the various departments. I do not take the view that my amendments are all that cumbersome; indeed, it would have been nice to have seen them written into the Bill. However, I shall not press this amendment. My noble friend's answer was kinder than I thought it would be. With that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. /6 and 17 not moved.]
Lord MOTTISTONE Lord MOTTISTONE moved Amendment No. 18:
Page 4, line 42, leave out ("and relating to any matter relevant to the investigation").
The noble Lord said: My Lords, I beg to move Amendment No. 18. In Committee in another place—the Committee report of 30th November, column 430—it was made clear that anything that the Director does in a preliminary investigation must be with a view to establishing whether a person is or has been pursuing a course of conduct which is anti-competitive in its effect. If that is the case, then the words that I seek to delete for the purposes of clarity would seem to be superfluous. If, on the other hand, the Government feel that they are necessary to emphasise the point, I suggest that they should then, logically, also be included in Clause 3(7)(b) where they are, if anything, even more important. I beg to move.
Lord TREFGARNE: I can assure my noble friend that the effect of the paragraph, as presently drafted, is quite clear and reflects the Government's intentions in this matter. Although the Director General's powers will enable him to request documents from persons who are not the subject of an investigation, such documents must relate to matters relevant to the particular investigation. There is no question of these powers being used to obtain documents which have no bearing on the investigation. In the event of any dispute, the courts would have to determine the relevance of a particular document. I hope that my noble friend will agree that to give the type of powers that would be created if we were to agree to his amendment, would be undesirable. They would enable the Director General to ask for almost any document under the sun from people who were not connected with the investigation. I really do not think that that is the right way to proceed and I hope my noble friend will not press his amendment.
Lord MOTTISTONE: I quite take the point made by my noble friend that it is necessary to have this provision in paragraph (7)(a). However, I should have thought that the same sort of sense needs to be in paragraph (7)(b), indeed, even more so. What would the Government's reaction be if I were to put down an amendment to that effect at a later stage?
Lord TREFGARNE: I agree that the powers in paragraph (b), which enable the Director General to obtain information from any person carrying on any business, do not include a requirement that that information should relate to matters relevant to the investigation. However, the provisions in that subsection closely follow similar provisions in Section 85 of the Fair Trading Act, and I should perhaps point out that the subsection as a whole is prefaced by the words:
"For the purposes of an investigation".
I suggest that that makes it clear that the Director General is not empowered to seek information irrelevant to the investigation.
Lord MOTTISTONE: I thank my noble friend very much for that further answer which I shall study with great
652
care. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.49 p.m.
Baroness HORNSBY-SMITH Baroness HORNSBY-SMITH moved Amendment No. 19:
Page 5, line 35, at end insert ("and why such a course of conduct might be contrary to the public interest").
The noble Baroness said: I beg to move Amendment No.19. We have heard from the noble Lords on the Front Bench today about the enormous variety of industries and, that a practice which may be perfectly acceptable in one industry may be inapplicable to another. However, there is no doubt that in this Bill the Director General of Fair Trading is given enormously increased and almost all-embracing, powers. Even if he has the keenest of brains, is indefatigable, as he will need to be and, indeed, has the wisdom of Solomon, we are creating a tremendously over-mighty servant of the public. I believe that the vast discretionary power which is given to the Director General should, within this Bill, be subject to judicial control and that where he proposes, in following up preliminary investigation, to make a competitive reference, he should be required to show reasonable grounds for believing that the anti-competitive practice in the instance which he is investigating and which is applicable to that firm or industry, is contrary to the public interest. I know that subsection (10)(b) says "with reasons", but that may be in respect of pricing advertising, which in itself may not be contrary to the public interest.
As the noble Lord said, as indeed my noble friend Lord Mottistone has pointed out and as did the noble Baroness, Lady Seear, a little while ago, the mere announcement of a competitive reference is in itself extremely damaging to the company. Therefore, it is imperative that before a company is sent for a competitive reference, it should be told why its practice—which no company goes into lightly—is to be referred. A company goes into a practice because it thinks that it is within the law, because it thinks that it is promoting some new product; in no way does it want any section of the law to stop it marketing or selling the product. Therefore, it does not blindly go into these

653
unfortunate practices. I believe that it should be reasonable that those challenged should be told immediately why the particular practice is deemed to be contrary to the public interest at the time that they are sent forward for their competitive reference. I beg to move.
Lord MOTTISTONE: I should very much like to support my noble friend in her amendment. In any case, I had it in mind at some suitable stage to ask the Government why it is that there is no reference to public interest in relation to the sort of inquiry which is the subject of this clause. Clause 7(6) refers to Section 84 of the Fair Trading Act 1973, which is all about public interest. I find it odd that the public interest aspect of an investigation is not mentioned at all in this clause or, indeed, in the succeeding one. I have it in mind to put down an amendment at a later stage in order to invite the Government to comment on this more fully; it would be a very good opportunity for them to do so. In the meantime, may I suggest to the Government that it would be reasonable to accept my noble friend's amendment? If, on reflection, they do not much like it, they can always take it out at a later stage.
Lord TREFGARNE: I should prefer not to follow that course. Under the Bill as drafted, the Director General is required, where he has found an anticompetitive practice, to state with reasons whether he considers it is appropriate for him to make a reference to the corn-mission. The purpose of the Director General's preliminary and relatively informal investigation is to establish to his own satisfaction whether—and why—there is an anti-competitive practice. He is not equipped, nor is it his role, to assess the public interest. That is for the commission. Nevertheless, it will be helpful to consumers, to industry—both the investigated firm and those who may be affected by its practices—to know why the Director General thinks it appropriate or otherwise to make a reference to the commission.
It will be up to the Director General to take his own decisions, but I would expect that, where he has found a significant restriction on competition, this would be the principal reason why he thinks a
654
reference appropriate. On the other hand, if he finds that the restrictions on competition are trivial, he may decide that they are not sufficiently serious to warrant further investigation. Equally, it could happen that he thinks a particular practice is similar and operating in similar circumstances to one which the commission has found to be anti-competitive but not against the public interest, and that he thinks it inappropriate to make a reference in those circumstances.
But, as I have said, his task is not to assess the public interest. This is why we cannot accept the amendment. It would lengthen the Director General's inquiry. It would force him to hold public interest hearings and it would considerably add to the burden on industry facing what is, after all, only a preliminary inquiry, which would have to be repeated before the Monopolies and Mergers Commission. For those reasons, I hope that the amendment will not be pressed.
Baroness HORNSBY-SMITH: I think that the noble Lord is rather turning the arguments upside down. The Director General is to have enormous power; it will be for him to decide in his wisdom and discretion. Surely the unfortunate firm has the right to know why, what it is doing is not in the public interest. It does not seem a very great request to make. However, we are now told that the Director General has nothing to do with the public interest and that it is not for him to decide whether it is in the public interest. I rather thought that that was what he was there for.
I hope that the noble Lord will look again at this before the Report stage, because companies are being kept in the dark the whole time—they are having to walk through a minefield. It is to be at the discretion of this one overriding man, who may cause terrible damage to a company by way of a reference. I should not have thought that it was unreasonable to ask Her Majesty's Government to think again and to let the unfortunate victim know why he is not acting in the public interest.
Lord TREFGARNE: I am sorry that I have not persuaded my noble friend in this matter. If I may, I should like to make one further point. There is no obligation upon a company to accept the

655
findings of the Director General; there is no obligation upon a company to give an undertaking to the Director General. If the Director General finds that in his view the practice is anti-competitive he may then, if he wishes, refer it to the Monopolies and Mergers Commission. But the company is still under no obligation to cease the practice until it is found by the Monopolies and Mergers Commission to be against the public interest. Therefore, I do not think that the evil consequences which my noble friend foresees for this provision will, in fact, flow.
Baroness HORNSBY-SMITH: With great respect, I should like to raise one other point. If we have to wait for the public interest decision by the Monopolies and Mergers Commission, will the Minister give consideration to the enormous amount of time, money and effort that has to be put into preparing a case for the Monopolies Commission? Might it not be possible at an earlier stage to prove and point out that such and such a practice is detrimental to the public interest, without having to go through all that?
Lord TREFGARNE: I think that, for example, the question of costs of proceedings before the Monopolies and Mergers Commission is the subject of amendments which we shall be considering later on. Perhaps my noble friend would like to raise that matter then.
Baroness HORNSBY-SMITH: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
7 p.m.
Lord MOTTISTONE Lord MOTTISTONE moved Amendment No. 20:
Page 5, line 41, at end insert—
("(11) Where a report is published under subsection (10) above, it shall in the first instance be provided only to the Secretary of State and to the person or persons concerned. If an undertaking under the provisions of this section is agreed, the Director will discuss with the person or persons concerned in the report whether all or part of it, subject also to the provisions of section 16(1) below, shall be made generally public or be issued only to persons notified in accordance with section 3(2) above.").
The noble Lord said: With permission, I should like to speak also to Amendment
656
No. 23, which is consequential on this one. This is a subject which was raised under Amendment No. 13 by the noble Baroness, Lady Seear. The purpose of these amendments is to safeguard firms against unreasonable publicity from a preliminary investigation by the Director where an undertaking is given to adjust practices to ensure their competitive nature.
It appears from Clause 3(2)(a) and (b)—and I mentioned this earlier—that the fact that an investigation is being conducted will be made known only to those persons considered to be affected by it. Whether that then gets leaked to the Press and others is unfortunately a risk difficult to avoid, because it is clear that they ought to know that the investigation is going on. I was slightly heartened by my noble friend saying in answer to the last amendment that this was an informal investigation. Let us hope it is kept so informal that the Press does not get interested in it. If, thereafter, the company being investigated complies with all that the Director asks of it—and most companies will—it is suggested that wide publicity of the report and the investigation would be unreasonable.
The purpose of the first amendment is to limit the publicity of the Director's report to those who already know about the investigation. We cannot do any better than that. It is as good as we can get, even if it is not perfect. This will keep to a minimum any adverse effects on the company's public standing that might result from the mere fact that an investigation was considered necessary. I suppose that is the best we can do. I think that the Government are probably not aware how badly some people can be affected by these things. The trouble is that we tend to legislate for the lunatic fringe, and we do this always. Both sides do it. The other Government did it even more than we do it. We therefore find that the sensible chaps, the ones who want to be law-abiding, get caught and get a bad name, with lots of time wasted and money spent all because we have to cover this so fully. The publicity angle in this modern day and age is something that must and should be taken seriously by the Government. That deals with the first amendment.
On the other hand, if the company does not give the undertakings required by the

657
Director it would seem that there is no need for its interests to be so specially protected. Accordingly, I shall propose Amendment No. 23 to make that clear. Finally, if the Government do not feel that they can accept my Amendment No. 20—and I hope they will be persuaded by my arguments and those of other noble Lords—I should be grateful if, in endeavouring to explain why they cannot accept it, my noble friend would specifically tell the Committee to whom it is intended that the report specified in Clause 3(10)should normally be distributed. I beg to move Amendment No. 20.
Lord TREFGARNE: It is an important aspect of the Bill that a report should be published to explain the Director General's findings as to whether a practice is anticompetitive. I want to emphasise that point—anti-competitive; that does not necessarily mean for or against the public interest. Without the publication of reports on investigations people will not be aware of the reasons for the Director General's views, which may contain important clarification about the circumstances in which anti-competitive practices arise. If no report were published, quite unjustified inferences might be drawn from the bare fact that a practice had been discontinued, and those affected by the practice, or those who might be considering engaging in similar practices, would not have the opportunity of seeing for themselves the Director General's conclusions. It is also an important discipline on the Director General that his conclusions and arguments should be open to public scrutiny.
We therefore think there is an overwhelming case for reports to be published. I can however, assure the Committee and my noble friend that it would be the standard practice of the Director General to show the factual parts of any report in draft to the persons concerned in order to correct any factual errors or misunderstandings. Where an undertaking has been agreed, the Director General will also try wherever possible to clear his Press Notice with the firm or firms concerned. I hope that these observations will allay the fears of my noble friend and that he will not press his amendment.
Baroness GAITSKELL: I wonder whether the Minister would tell me
658
what he means by "anti-competitive"? This is Alice in Wonderland language. I do not understand a word of it. It is something quite new. I am ignorant about this kind of Bill. It is hard to follow, and there does not seem to me to be a great deal that is very important in it. What does "anti-competitive" mean?
Lord TREFGARNE: Perhaps the noble Baroness was not in her place when we had our discussion on Clause 2 where we went into that particular point in great detail. "Anti-competitive" means discouraging to competition. I hope that is clearer to the noble Baroness.
Baroness GAITSKELL: That is not an explanation. That is just another set of words not telling me what it is.
Lord MOTTISTONE: It seems that I am not getting any further support on this particular point. I am heartened by various things that my noble friend said. I was rather distracted by the noble Baroness and she has rather upset my thoughts, which were carefully assembled for the task. I think that the reassurances are as satisfactory as one can hope for. Would the Government—and this is a practice which has been adopted in other circumstances—give consideration to making it possible for these reports (the noble Lord talked about "reports", so presumably there might be several of them) to be generalised so as to get the point across, and made anonymous so that the specific company which had been investigated is not mentioned by name? I think that would help. Therefore, every six months one would get a report from the Director which would say, "During the past six months I have investigated x cases. They fall into the following categories, and these are the points I investigated, what I found, and what action was taken. All these chaps are splendid, and they all undertook to do what we asked them to do", and that would be it. It is quite unimportant for the purposes of that exercise that the firm in question happens to be a particular firm with a particular name, and, if I understood my noble friend aright, that is what he wanted. Would be prepared to say that he will look at that sort of way of translating it?
Lord TREFGARNE: I shall consider that point. I think it is quite a reasonable one. The only danger I see is that a bowdlerised report is always the subject of intense detective work by those who receive it to see if, by reading between the lines, they can discover to whom it actually refers. If there were no clear indication in the report as to who it referred to, one might have it wrongly ascribed to some company which was in no way involved. I shall consider the point and see whether the difficulties can be overcome.
Lord MOTT1STONE: I thank my noble friend for that concession and look forward to hearing from him, in order to perhaps free us from further consideration at the Report stage. If there are enough of these reports, of course there will be so many that it will not be worthwhile trying to identify them. But you will always get these detective creatures, who are dangerous characters anyhow.I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
7.10 p.m.
Lord PONSONBY of SHULBREDE Lord PONSONBY of SHULBREDE moved Amendment No. 21:
Page 5, line 41, at end insert—
("(11) Nothing in the European Communities Act 1972 shall be construed to curtail the operations of sections 3 to 10 of this Act.").
The noble Lord said: This amendment raises the question of conflict with European Community legislation. Those of your Lordships who have served on sub-committees of the European Subcommittee will well recall that this question of conflict arises, particularly in the field of consumer protection; the question is whether the superiority of European laws can have the effect of forcing a subsequent alteration in a measure such as the one we are discussing today. This amendment is designed to make clear the superiority of our legislation in this field so that there can be no doubt that this is superior legislation to legislation passed in Brussels.
Lord TREFGARNE: The noble Lord, Lord Ponsonby of Shulbrede, is expressing an oft-expressed fear, if I may put it that way, from the Benches opposite. In certain areas it would conflict with Community obligations for the Government to exercise unilateral control; this is a
660
consequence of our membership of the Community. Your Lordships have discussed on many occasions the general principle of membership of the Community and I do not suppose the Committee wants to hear from me on that again, nor even from Lord Ponsonby. The amendment would create a potential conflict between action under the Bill and our obligations under treaties. I very much hope that the responsible authorities under the Bill would never turn a potential conflict into a real one, but it is best not even to allow such a possibility to arise and I therefore hope the noble Lord will not press the amendment.
Lord PONSONBY of SHULBREDE: I thank the Minister for his remarks. It was not my intention to press the amendment to a Division.
On Question, amendment negatived.
Clause 3 agreed to.
Clause 4 agreed to.
7.13 p.m.
Baroness SEEAR Baroness SEEAR moved Amendment No. 22:
After Clause 4, insert the following new clause:
Breaches of undertakings
".—(1) If it appears to the Director that a person has given such an undertaking as is mentioned in the preceding section and has failed to carry it out, the Director may bring proceedings against that person before the Restrictive Practices Court at any time after the notice referred to in paragraph (c) if subsection (4) of the preceding section has been given to that person.
(2) Where in any proceedings before the Restrictive Practices Court under this section, the Court finds that the person against whom the proceedings are brought (in this section referred to as "the Respondent") has failed to carry out an undertaking which has been accepted by the Director in accordance with the provisions of subsection (3) of the preceding section, the Court may make an order against the Respondent under this section.
(3) An order of the Court uner this section shall require the Respondent co carry out his undertaking.
(4) Notwithstanding anything in any other enactment, an appeal on a question of law shall lie from any order of the Court under this section—

(a) in the case of proceedings in England and Wales, to the Court of Appeal by way of case stated;

(b) in the case of proceedings in Scotland, to the Court of Session by way of stated case;

661

(c) in the case of proceedings in Northern Ireland, to the Court of Appeal in Northern Ireland by way of case stated.

(5) In proceedings under this section the Court's decision on questions of fact is final.".
The noble Baroness said: This and the subsequent amendments standing in my name are governed by our overall approach to this legislation. At this late hour I will not make a long speech on the subject, but I wish to stress a few points that have determined the amendments we have tabled. It is our view that the objectives behind the Bill are desirable—those of strengthening competitive policy—but at the same time, as I tried to make clear on Second Reading, we have considerable doubts whether the Bill as it stands is sufficiently strong to do the job it is intended to do. Therefore these amendments are intended to make the alleged purposes of the Bill more likely, in our view, to be fulfilled than they are at the present time.
There is, after all, a reduction in the overall resources being devoted to this task; the work of the Director General is considerably enlarged but the resources he is being given are not being considerably enlarged. There is the further point that there is great public anxiety about rising prices. The Government have told us repeatedly that this Bill, plus their economic policies, will have the effect of reducing inflation and controlling prices because this is how their legislation in this field will work. If it does work in this way, it is going to take time, but we have a problem of rising prices here and now which is causing a great deal of anxiety, and therefore we want the public to be assured that this legislation has teeth on the one hand and, secondly, that the elected representatives of the people in Parliament and those other consumer bodies of one kind and another—this point will come out more strongly when we debate a subsequent amendment—will really he able to get into the act and see that the intentions of this legislation are carried out, because that is what we doubt.
When we on these Benches voted against the continuation of the Price Commission we did so not because we did not want to see prices properly controlled, with real control over prices, but because we wanted to see the Monopolies Commission, the Director General of Fair Trading and the
662
Restrictive Practices Court acting more strongly than they have done in the past, because we believe these can be very effective instruments for price control, but that they need to be strengthened. It is with that in mind that I have tabled this and subsequent amendments, and the subsequent amendments I shall move much more briefly because they are all governed by these considerations.
When he has carried out his investigation, the Director General can get an undertaking from the investigated body that they will desist from certain anticompetitive practices. If they fail to give that undertaking, the Director General, if he considers the matter sufficiently serious—and I take it he would not ask for an undertaking unless he did—can proceed with an competitive reference. Plainly, it will be in the interest of the investigated party to give an undertaking. As the noble Baroness, Lady Hornsby-Smith, pointed out, references to the Monopolies Commission are expensive and are a long-drawn-out business which everybody who can will want to avoid, and therefore they have every interest in giving an undertaking.
However, we want to make sure that those undertakings are adequately fulfilled, that they are properly monitored and that if there is any side-stepping of an undertaking, it will be quickly picked up and dealt with. As the Bill is drafted, the only way in which that can be done is by the Director General then deciding that the concern which has been investigated and given an undertaking but which is not adequately carrying out its obligations should be referred to the Monopolies Commission. That is a very long-drawn-out business. By the time the Monopolies Commission has given a finding on it, we shall be many months from the date at which the Director General originally discovered that there was, in his view, an anti-competitive practice.
I fear that some of the more wily organisations which have been found to be indulging in anti-competitive practices may work out good delaying tactics, during which time of course they will be finding various ways to continue the practices which are contrary to the interest of the consuming public. I want to speed up this process, and that is why I want to

663
give a second route for the Director General to follow, which is to take the breach of the undertaking to the Restrictive Practices Court and not necessarily to have to go through the lengthy procedures involved in a competitive reference to the Monopolies Commission.
Lord TREFGARNE: This amendment raises an issue which was exhaustively and extensively discussed in the other place. The central question is whether there should be a stronger deterrent against failure to comply with an undertaking given to the Director General following a preliminary investigation. The Government believe, and it has been accepted by the other place, that the Bill as it stands strikes the right balance in this respect. If an undertaking is broken, the case can quickly be referred to the Monopolies and Mergers Commission for a full investigation, and I do not think any firm will wish to bring an investigation upon itself in a light or casual manner. We believe that to go even further than that and to introduce specific penalties for the breach of an undertaking would act as a positive disincentive to the offering of the undertaking in the first place. Apart from the general principle involved, the particular amendment proposed raises some objections—
Baroness SEEAR: I apologise for interrupting, but I wonder whether the noble Minister will agree that, if firms refuse to give an undertaking, they will know that they are going to be referred to the Monopolies Commission. I should have thought that they would not be likely to refuse to offer an undertaking, because as the Bill stands the only option then would be for the Director General to go straight to the Monopolies Commission, which is precisely what they would wish to avoid.
Lord TREFGARNE: I suppose that in the short term they would wish to avoid it, but the noble Baroness will recall that earlier we discussed the question of public interest, and a firm, while agreeing that a practice is anti-competitive, may well believe that it is in the public interest and that it will be found to be so by the Monopolies and Mergers Commission in due course. For that reason I do not think
664
that a firm would necessarily want to give an undertaking simply to avoid a reference to the Monopolies and Mergers Commission. The noble Baroness is really thinking of a situation in which a rogue firm (if I may call it such) has given an undertaking simply to avoid a reference. I think that that is taking an unduly pessimistic view of the ethics of our companies, although I am not saying that there is no firm that would do that. In general a firm which has given an undertaking accepts that the practice in which it was indulging was anti-competitive and therefore has undertaken not to continue it. It is not likely that the view of the firm and of the Director General would be overturned by the Monopolies and Mergers Commission.
Apart from the general principle involved, the particular amendment proposed raises a number of objections. The most fundamental is that it would involve the permanent prohibition of a practice without there being any finding by the Commission about the public interest, to which I referred. It cannot be right that the practice should be condemned—which is the effect of the amendment—without the implications for the public interest being considered; and when I say "condemned", I mean permanently condemned. I hope that in the light of these difficulties the noble Baroness will not press her amendment.
Baroness SEEAR: I am sorry, but I am afraid that I am not satisfied with that explanation. I quite agree, as the noble Minister has said, that the great majority of firms will play it straight and will not try to get round the intention of the legislation, and that if they have been found to have indulged in an anti-competitive practice and have entered into an undertaking, they will honour it. I am sure that this goes for the great majority, but in every pack—or is "herd" the right term?—there are rogue elephants. We know that in this country we have suffered very considerably from anticompetitive practices. We want this to cease in the interests of consumers, in the interests of competition, in the interests of anti-inflation and control of prices—all the things we stand for—and I believe that these stronger measures need to be there in reserve to deal with the rogue elephants.
Lord TREFGARNE: Before the noble Baroness decides what to do with her amendment, may I say that I think her objection is a Second Reading objection; she objects to the very philosophy of the policy that we have advanced to contain anti-competitive practices. The right logical progression from what she is suggesting is the kind of legislation that exists elsewhere, in which a large number of practices are specifically prohibited and there are penalties laid down for those who undertake those practices. That is not the course that we have chosen to follow. We have chosen a course described in the Bill, whereby the Director General can consider these matters, reach his conclusions, and accept undertakings; but at that stage the firm has not broken the law. I hope the noble Baroness will
agree that our more restrained approach to these matters is the right one.
Baroness SEEAR: I am very sorry not to be able to satisfy the noble Minister on this point. At Second Reading I indicated that I believe that the Bill is too weak and that it needs to be strengthened. That has been the theme of the comments that have been made from these Benches on this legislation, and I am afraid that I am not prepared to withdraw my amendment.
7.25 p.m.
On Question, Whether the said amendment (No. 22) shall be agreed to?
Their Lordships divided: Contents, 54; Not-Contents, 89.

CONTENTS

Ardwick, L.

Hampton, L. [Teller.];

Ritchie-Calder, L.

Balogh, L.

Hanworth, V.

Ross of Marnock, L.

Barrington, V.

Houghton of Sowerby, L.

Seear, B. [Teller.]

Beaumont of Whitley, L.

Howie of Troon, L.

Simon, V.

Blease, L.

Jacques, L.

Stewart of Alvechurch, B.

Boston of Faversham, L.

Janner, L.

Stewart of Fulham, L.

Brockway, L.

Kaldor, L.

Stone, L.

Brooks of Tremorfa, L.

Kilmarnock, L.

Strabolgi, L.

David, B.

Lee of Newton, L.

Taylor of Blackburn, L.

Davies of Leek, L.

Llewelyn-Davies, L.

Taylor of Mansfield, L.

Davies of Penrhys, L.

Llewelyn-Davies of Hastoe, B.

Wade, L.

Elwyn-Jones, L.

Lovell-Davis, L.

Wallace of Coslany, L.

Gaitskell, B.

McNair, L.

Wells-Pestell, L.

Galpern, L.

Maelor, L.

White, B.

Glenamara, L.

Mishcon, L.

Wigoder, L.

Goronwy-Roberts, L.

Monson, L.

Wilson of Radcliffe, L.

Gregson, L.

Pitt of Hampstead, L.

Winstanley, L.

Grey, E.

Ponsonby of Shulbrede, L.

Winterbottom, L.

NOT-CONTENTS

Abinger, L.

Gainford, L.

Morris, L.

Airey of Abingdon, B.

Galloway, E.

Mottistone, L.

Auckland, L.

Glasgow, E.

Mountgarret, V.

Bellwin, L.

Greenway, L.

Mowbray and Stourton, L.

Bessborough, E.

Gridley, L.

Moyne, L.

Caithness, E.

Grimston of Westbury, L.

Murton of Lindisfarne, L.

Campbell of Croy, L.

Grimthorpe, L.

Newall, L.

Colwyn, L.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

O'Neill of the Maine, L.

Cork and Orrery, E.

Hereford, V.

Onslow, E.

Cottesloe, L.

Hives, L.

Orkney, E.

Craigavon, V

Holderness, L.

Pender, L.

Craigmyle, L.

Home of the Hirsel, L.

Rochdale, V.

Craigton, L.

Hood, V.

Romney, E.

Cullen of Ashbourne, L.

Hornsby-Smith, B.

St. Aldwyn, E.

de Clifford, L.

Hunt of Fawley, L.

St. Davids, V.

De Freyne, L.

Inglewood, L.

St. Germans, E.

De La Warr, E.

Kilmany, L.

St. Just, L.

Denham, L.

Long, V. [Teller]

Sandys, L. [Teller.]

Drumalbyn, L.

Lucas of Chilworth, L.

Selkirk, E.

Ellenborough, L.

Lyell, L.

Sempill, Ly.

Elliot of Harwood, B.

Mackay of Clashfern, L.

Skelmersdale, L.

Fairfax of Cameron, L.

Macleod of Borve, B.

Stanley of Alderley, L.

Faithfull, B.

Malmesbury, E.

Strathclyde, L.

Falmouth, V.

Mansfield, E.

Stuart of Findhorn, V.

Falkland, V.

Mansfield, E.

Swansea, L.

Ferrers, E.

Mansfield, E.

Teviot, L.

Ferrier, L.

Massereene and Ferrard, V.

Tranmire, L.

Trefgarne, L.

Vaux of Harrowden, L.

Westbury, L.

Trenchard, V.

Vernon, L.

Wise, L.

Tweedsmuir, L.

Vickers, B.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

[Amendment No. 23 not moved.]
Clauses 5 and 6 agreed to.
[Amendments Nos. 24 and 25 not moved.]
Clause 7 agreed to.
7.34 p.m.
Clause 8 [Conclusions and reports of the Commission]:
Lord JACQUES Lord JACQUES moved Amendment No. 26:
Page 12, line 26, at end insert—
(" (6) When in the opinion of the Commission a person has been put to unnecessary and unreasonable expense because the reference should never have been made to the Commission, the Secretary of State shall refund those expenses.")
The noble Lord said: In support of this amendment I have only two things to say, and I invite the Minister to reply to both points before he throws the amendment out. First, this amendment is based upon the Report of the Council on Tribunals on the Award of Costs at Statutory Inquiries. The date is 1964, and it is Command Paper 2471. So I think I am on safe ground. Secondly, I direct the attention of the Committee to the fact that the question is not whether a party has won his case, but whether the reference should ever have been made.
A person may have acted unreasonably, vexatiously or frivolously and have only himself to blame for the position in which he finds himself, and therefore be not entitled to costs, even though he has won his case. But it is unreasonable that a person should have to bear his costs in all circumstances. This amendment seeks to get a fair balance. I hope that on those grounds it will be accepted by the Minister. I beg to move.
Lord TREFGARNE: I do not have in front of me the report to which the noble Lord has referred, but I believe that the procedures and safeguards already incorporated into the Bill make this amendment unnecessary. No case will go before the commission unless the
668
Director General has himself carried out his own preliminary investigation and has concluded, setting out his reasons in a published report, that there is an anticompetitive practice to be investigated and whether it is appropriate for him to make a reference to the commission. This procedure will ensure that no trivial or unnecessary cases are sent before the commission. If the amendment is accepted, firms might be tempted to divert the commission from their main task of deciding whether a practice was anticompetitive and, if so, whether it was against the public interest into considering quite separate arguments about costs—which, incidentally, would themselves increase the costs of the investigation. This, I believe, would be undesirable, especially since the safeguards and procedures in the Bill make it inconceivable that unnecessary cases would come before the commission. I hope the noble Lord will not press his amendment.
Lord MISHCON: Does the Minister really put that to the Committee as being an appropriate answer to the very lucid way in which my noble friend Lord Jacques put this matter? First of all, are we to have a new doctrine of the infallibility of Directors General, whoever they may be; and can it not be conceived that a Director wrongly has a reference before the Commission? Is it really seriously suggested by the Minister, for whom we have a profound respect and whose utterances are usually very serious, to those of us who know the court procedures and commission procedures, that proceedings are prolonged by an argument over costs? One knows perfectly well that such matters are dealt with only at the end of the commission's proceedings, and then a short submission is made as to the unreasonableness of the proceedings having been brought before the commission. I am sure that within a matter of a few seconds the commission could make up their minds.
The point about this is that the citizen can be put to expense. It is not a question, as my noble friend Lord Jacques put it so reasonably, of the citizen being put to expense when there is a slight balance

669
as to whether or not the case ought to have been brought. In order to get his expenses he would have to show that it was quite unreasonable for him to have been brought there. Would the Minister not think again about this matter?
Lord TREFGARNE: The amendment on the Marshalled List is not concerned simply with the question of costs. The noble Lord, Lord Mishcon, briefly referred to this in his closing sentences: it says—and I am reading now from the Marshalled List:
"When m the opinion of the Commission a person has been put to unnecessary and unreasonable expense because the reference should never have been made to the Commission, the Secretary of State shall refund those expenses".
Does the noble Lord, Lord Mishcon, or the noble Lord, Lord Jacques, not think that that would lead to endless arguments before the Commission as to whether or not the reference to the Commission was unnecessary or unreasonable? I should have thought that almost half the references, at least, might well, in the minds of those companies which have been referred, fall into that category—and in most cases, I should have thought, wrongly. I can see endless representations made to the Commission on this point by counsel learned in these matters.
However, I do not want to appear inflexible or unreasonable in these matters. I will consider this again and perhaps, if the noble Lord, Lord Jacques, would wish, we could refer it to the next stage of the Bill. But I want to say clearly that I am not in a position to give any firm undertaking of what the outcome of that consideration may be.
Lord MISHCON: Perhaps I may intervene again because the Minister was good enough to say that he would consider the matter again and because, too, he directed a question to me which I ought to answer. Surely the Minister is being rather pessimistic about the result of matters referred by the Director to the commission when he says that he thinks that possibly in half of the cases there would be an argument about their being unreasonably brought before the commission That implies that at least one-half of the cases before the commission would be unsuccessful.
Lord TREFGARNE: I said that they would be unreasonable in the minds of those referred.
Lord MISHCON: Quite obviously, this application for expenses cannot be made unless the commission has found that the case has been wrongly brought. That is why I said that one imagines, if the Minister is correct in his forecasts of the care that the Director will be taking, that there will be only a small percentage of cases where the Commission finds that it was wrong for the matter to have been brought before them. I do not want to delay the Committee, but I feel that where a citizen is brought before a tribunal—whoever be the party who does it; and we live in a democracy—in the event of it being found that that citizen was unnecessarily brought there, wrongly brought there, there ought to be the right of recovery of, at least, expenses so that the citizen, who in certain cases may be in very poor cirumstances, has the right to recovery if the Commission think it appropriate.
Lord TREFGARNE: Before the noble Lord, Lord Ponsonby of Shulbrede, addresses us or the noble Lord, Lord Jacques, decides what to do with his amendment, may I remind your Lordships that the Price Commision Act, as it now is, in which Lord Jacques and Lord Wallace of Coslany took notable part when it went through this House, did not provide for costs incurred by firms of inquiries by that Commission to be recovered by the Commission or by anyone else. We shall bear that in mind when considering this matter.
Baroness HORNSBY-SMITH: I am sure it would be with the agreement of the Committee in view of the fact that this amendment has almost exactly the same aim as my Amendment No. 27, that I should say a few words on this and not move Amendment No. 27. To say that there would be endless argument is no answer to somebody who has had to go to enormous expense and who has been proved guiltless of the representation made against him. We are not asking for something new and unreasonable but for something already enshrined. If an objector is successful in a town planning inquiry, he can get reimbursement of costs.

671
In other areas, under the Local Government Act, again costs can be made available.
Many of these arrangements stem from the report of the Council on Tribunals on the Award of Costs of Statutory Inquiries. Surely, this is equivalent to a statutory inquiry. If it goes to the Monopolies Commission, it will be a statutory inquiry. It seems to me to be grossly unfair. It is the old idea that industry can stand and pay anything; no matter, they can find the money. I take a little gleam of hope from the Minister's assurance that he will look into this before Report stage. It has been said time and again in this House how enormously expensive are some of these inquiries. If people are found to have offended, let them pay. But if they are completely cleared it is a different matter. They have to suffer already the damage that they have had from being sent to the Monopolies Commission on that product; they have already suffered the loss of (I do not know how many) man-hours of people on their staff preparing their evidence within the firm—which will not be counted for expenses. I hope sincerely that in justice, following the precedent of other cases, the Minister will look again at this before we come to Report stage.
Lord TREFGARNE: I have undertaken to look at this matter again. I must say that I do so with an open mind but without too much hope. I think that the arguments which I deployed in respect of the amendment of the noble Lord, Lord Jacques, are broadly the same as those I would deploy in respect of the amendment proposed by my noble friend, Lady Hornsby-Smith. I believe that this amendment was also discussed in another place and, if I have my information correct I think the amendment was withdrawn in the light of the assurances that were given. I am happy to think that my noble friend Lady Hornsby-Smith will feel able to do the same, as will the noble Lord, Lord Jacques, on his amendment now before the Committee.
Lord MOTTISTONE: I was going to speak in support of my noble friend Lady Hornsby-Smith on her amendment, but I understand that she has embodied it within this one. I support her amend
672
ment, but not that of noble Lords opposite. I might say two things. First, it is extraordinarily expensive. A company which is investigated by the Price Commission (which takes a shorter time than a monopolies reference normally will take) has been known to spend £1 million in goods and services in the shape of the services of their directors. I hope that somehow the Government will give attention to this very large sum of money which must be produced. With a Monopolies Commission inquiry it can be that a firm has to detach special staff for nine months. I am sure that my noble friend on the Front Bench is aware of these things even if other Government Ministers are not. I think it is something which needs to be taken seriously. I would make another point. My noble friend said that we had this difficulty in raising the matter with the previous Government over the Price Commission Act. I raised it and was sharply shot down by the noble Lord, Lord Jacques.
Lord PONSONBY of SHULBREDE: The point I wished to make earlier was, first, to thank the noble Lord, Lord Trefgarne, for saying he will look at this again, without holding out any great hope that he will be able to come back with a favourable answer. I would point out that the amendment moved by my noble friend Lord Jacques refers to unnecessary and unreasonable expense. It does not refer to the fact that the reference was unnecessary or unreasonable. What it states is that the reference should never have been made—an absolute situation. Therefore, I hope, when the noble Lord comes to look at this, that he will be able to take that into account.
Viscount MASSEREENE and FERRARD: May I make one or two short comments in support of both these amendments. I think it is unjust that these heavy costs would have to be borne by the innocent party. In industry today, employers have a hard enough time with VAT and all the other things that they have to deal with, without having to pay out a great expense after they are found to be innocent under this Bill. My noble friend on the Front Bench says that he will look at this matter with an open mind. I hope that his mind and that of his right honourable friend are 100 per cent. open when they look at this again.
Lord JACQUES: I think that I should first reply to the noble Lord, Lord Mottistone. I have no recollection of rejecting an amendment of this kind on the Bill during our term of office. I invite the noble Lord to produce the Hansard which supports the point he made.
The Minister made four points. I want to reply to them one by one, very briefly. First of all, he says in effect that this situation is never likely to arise. If this is never likely to arise, there is no harm in putting it in the Bill. Secondly, he said that the time of the commission would be wasted in the discussion of unreasonable expenses and costs. The Minister knows that a commission or a court first of all decide on the main issue, and the question of costs only arises after that. This is generally dealt with very briefly. Thirdly, he seemed to take objection to the words "unnecessary and unreasonable expense". But as my noble friend has pointed out to him, this applies only to the expenses. It does not apply to the reference; it is a reference which should never have been made. Those are the words used.
That wording is based upon the Council of Tribunal's report of which I have given the number. I invite the Minister to look up that report before he comes to the Report stage. The final point that he made was that he was quite happy to consider this before the Report stage. I thank him for that and I am very happy to accept it. But I give notice now that I shall put the amendment down again at the Report stage. If I find the matter has been dealt with in response to what has been said tonight, I shall withdraw it. At this stage, I withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 8 agreed to.
[Amendment No. 27 not moved.]
Clause 9 [Undertakings following report on competition reference]:
[Amendment No. 28 not moved.]
Clause 9 agreed to.
Clause 10 [Orders following report on competition reference]:
7.54 p.m.
Lord MOTTISTONE Lord MOTTISTONE moved Amendment No. 29:
Page 14, line 32, leave out ("substantially to the same effect as that practice") and insert ("similar in form and effect to the one so specified").
The noble Lord said: In the Committee stage in another place (on 29th November, at cols. 505 and 506 of Hansard of the other place) the Government accepted an amendment to Clause 6(5)(a) to improve the wording to read as it currently does in line 40 on page 9 of the Bill:
"similar in form and effect to the one so specified".
It would seem logical for a similar amendment to be made, as suggested in Amendment No. 29, to Clause 10(2)(a). I beg to move.
Lord TREFGARNE: I hope that the members of the Committee are sitting comfortably because we agree in principle to this amendment. I understand my noble friend's concern that art order made following a report on a competition reference should not extend to a course of conduct which was different in form from that specified in the report and we are therefore prepared to accept his amendment in principle. I am advised that the amendment, as drafted, is however slightly defective. But if my noble friend is prepared to withdraw his amendment now, I will give him an undertaking that a Government amendment will be tabled at Report stage to achieve the desired effect.
Lord WALLACE of COSLANY: I should like to congratulate the Minister on emerging as a human being once more. I am staggered! I want to go and celebrate, but I had better not do so.
Lord MOTTISTONE: I am grateful to my noble friend. I happily withdraw this amendment and look forward to seeing the Government amendment at Report stage.
Amendment, by leave, withdrawn.
Baroness HORNSBY-SMITH Baroness HORNSBY-SMITH moved Amendment No. 30:
Page 14, line 37, after (" Part 1") insert (" (excluding paragraphs 8, 9, 10 and 11) ").
The noble Baroness said: It may be for the convenience of the Committee if I speak to this amendment and the next. We took great pride in the fact that we have abolished the Price Commission. But it does appear that we have brought back by a somewhat circuitous route the reintroduction of a price control under this clause. Subsection (2) gives the Secretary of State the power to make an order following an adverse finding in the Monopolies and Mergers Commission prohibiting the practice concerned or for remedying adverse effects. It also gives him the power, by virtue of paragraphs 8 and 11 of Schedule 8 of the Fair Trading Act 1973, Appendix 2, to control prices.
If it is the intention of this Government to abolish price control, it seems rather absurd halfway through the Bill that we should negate the effect of abolishing the Price Commission and, having assured ourselves through the Monopolies Commission that the abuse has been removed, say we believe that prices should then find their own level. If this Government believe in the free market economy, then we think they should aim to remove distortions. This seems to us bringing back a price control through the back door. We believe that prices will be perfectly well regulated if the abuse in the practice is removed—which we fully agree with—and we do not think that the price control should be reinstated in this way. I beg to move.
Viscount TRENCHARD: If I have understood her correctly, I think my noble friend is under a misunderstanding. She is suggesting that under Clause 10(2) price control powers can be brought back. But we are deliberately excluding the route via the Fair Trading Act 1973, which is the subject of amendments to be moved by other people. In Clause 13 the Secretary of State can ask the Director General to cause an investigation. This would only be done in very rare cases. Clause 10(2) deals with prohibiting the anti-competitive practices. When it refers to the Fair Trading Act 1973 it excludes the part of it which could refer to prices. I may have got this wrong—I asked my noble friend to check it—but I think I have it right.
Lord TREFGARNE: Perhaps I might be allowed to deal with the general points
676
referred to by my noble friend. Under Clause 10, order-making powers are available either to prohibit a practice or to remedy its adverse effects. Normally it will be sufficient to prohibit the practice, but, exceptionally, it may be necessary or desirable to take steps to remedy the adverse effects of the practice which had been specified by the commission either instead of or as well as prohibiting the practice. The former could arise where the practice is so deeply built into the fabric of the firm that it would be unrealistic to demand that it should cease, and the Secretary of State judges it sufficient to remedy the adverse effects by means of the order-making powers of the Fair Trading Act.
Another example could arise where a firm has successfully been employing an exclusionary practice and, as a result, there are few or no competitors. Even if the' firm is ordered to cease operating the practice, the adverse effects specified by the commission could continue at least for a transitional period until new firms have been able to enter the market. In these circumstances, too, it may be necessary or desirable to remedy the continuing adverse effects by means of an order. The order-making powers available are those listed in Part 1 of Schedule 8 of the Fair Trading Act 1973. The powers in paragraphs 8 to 11 of Part 1 of Schedule 8, which this amendment seeks to remove, apply to the regulation of prices and to such things as a requirement for firms to publish price lists and to adhere to them or to notify prices. These powers are, of course, already available to remedy adverse effects following a monopoly report by the commission and, since they are limited to the remedying of adverse effects specified by the commission in their report, it is in no way inconsistent with our general approach towards price control to retain these powers.
Baroness HORNSBY-SMITH: My noble friend will not expect me to welcome his reply, but in view of the explanation he has given, although I do not find it wholly satisfactory, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendment No. 31 not moved.]
On Question, Whether Clause 10 shall stand part of the Bill?
8.3 p.m.
Lord AIREDALE: As we have now reached the last clause under the heading of" Control of anti-competitive practices", I should like briefly to mention to your Lordships an example of what I believe to be a practice which this Bill is about. The electricity boards send out quarterly bills to their customers and between them they have access to just about every household in the United Kingdom. I have no doubt they assess their bills at a figure which passes on the cost of postage to the consumer. Some boards take the opportunity to enclose with their bills leaflets advertising the electrical appliances which they have for sale. They go further. I have in my hand a typical electricity bill, and at the foot of it is written in capital letters:
"For safe, guaranteed electrical repairs, call 'the experts'. Ring the number above for repairs or wiring by appointment".
For the private enterprise sector of the electrical industry to penetrate to this degree by direct mail advertising would cost them a fortune. Therefore, I should have thought that this practice which is being indulged in by some electricity boards amounts to an anti-competitive practice within the meaning of this Part of the Bill, and I think it might well be the subject of an investigation by the Director. I should be very interested in any comments the Government might have.
Lord TREFGARNE: That was a most interesting thought. At first sight, although I shall have to think about it, I would not have thought that it involves any restriction of competition, and indeed I am not sure that many of us will be in the most receptive mood towards advertising when we have just had our electricity bill. As one who has night storage heaters, I can say that is certainly the case, so far as I am concerned. However, it is for the Director General of Fair Trading to consider whether any restriction of competition is involved, and I will draw the noble Lord's remarks to his attention.
Lord MISHCON: Does the Minister realise, in these last observations, the
678
whole doubt that comes in interpreting the very clause that he looked to; namely, Clause 2? I do not want to repeat previous speeches made by the noble Baroness, Lady Hornsby-Smith, and the ones that I ventured to make when we dealt with that interpretation; but does the Minister now see the difficulty one gets into without a proper interpretation or clarification of that clause?
Lord TREFGARNE: No, I am afraid not. I remain content with what I said about Clause 2.
Clause 10 agreed to.
Clause 11 [References of public bodies and certain other bodies corporate to the Commission]:
8.7 p.m.
Lord WALLACE of COSLANY Lord WALLACE of COSLANY moved Amendment No. 32:
Page 15, line 22, leave out (" or ").
The noble Lord said: I think it would be for the convenience of your Lordships if I were to take Amendments Nos. 32 and 34 together: they do run together. The purpose of Amendment No. 32 is quite simple. It is to enable the Secretary of State to make reference to the Commission concerned with prices being charged by nationalised industries or similar public bodies. If all other aspects of nationalised industries, as indicated in (a), (b) and (c), can be referred, surely one of the most important questions concerning consumer interest—namely, price—should be included?
I can understand the Government being a little sensitive over the price of gas, but prices charged to the consumer by nationalised industries are very much a question of public as well as governmental concern. In fact, I cannot understand why the reference to prices has been left out. It may be that the Government are "touchy" about the general question of price, and they have every reason to be so; but apart from that, this is quite a sensible and reasonable amendment and I am sure the Government are going to accept it. They seem to be changing their minds. I beg to move.
Viscount TRENCHARD: I take it that we are also dealing with Amendment

679
No. 34. There is no question that the Government do not think that the prices charged by nationalised industries are an important matter. It is a question of how they shall be dealt with; and it is the view of the Government that we have, on the one hand, the objectives and the financial limits set by the sponsoring Minister of the nationalised body or other body referred to in this context in the Act and, on the other hand, the new powers to inquire into questions of cost and efficiency. We believe that those two between them deal with the question of prices in the nationalised or public body sector.
Therefore, we also believe that it would be unnecessary and would possibly lead to considerable conflict, if there were to be further powers for investigation into prices per se. Prices will stem from the costs and efficiency of the public body on the one hand and the objectives of that body on the other. Ministers, Secretaries of State, are responsible to Parliament for the objectives and financial limits and we have cases clearly in front of us at the present time. If we now look after the costs and efficiency area, I believe there is no need to pursue prices per se.
Lord WALLACE of COSLANY: That is quite a surprise. Am I to understand from the noble Viscount's remarks that, in future, the nationalised industries will deal with their own prices and that there will be no Government intervention whatever?—that Ministers may be responsible for the financial contributions of the Government towards such industries but they will have nothing to do with prices, which are a very important matter?—that it is for an industry itself to set its prices, so long as it makes a reasonable profit, et cetera? Is that the position?
Viscount TRENCHARD: The objectives set for different public bodies by their sponsoring Ministers vary to quite a high degree, but, as I have already stated, it is not a disregard for prices which the Government are suggesting. It is that the prices will be at the most reasonable level possible if costs and efficiency are right and if financial objectives are secured. There is also a danger, if you do not leave it to the sponsoring Minister with his objectives for the public body, that if
680
there is further pressure on public bodies in regard to prices the result will be not only a conflict, but a shifting of the necessary cost from the consumer to the taxpayer, which, as I have said before, would be a clash between directions and objectives.
It is not impossible for the Secretary of State to have the Director General look into the question of nationalised or public body prices under Clause 13. though it is not anticipated that he would find it necessary to use those powers, because our stance is very definitely that through financial limits and general objectives, together with the securing of greater efficiency through this Bill, prices charged by public bodies as a whole will be as moderate in total as they can be, and that to interfere in the detailed pricing as between one product and another is to interfere with management, which we are trying very hard not to do.
Lord WALLACE of COSLANY: I am still a little baffled, because I think the Minister has said that if the efficiency and the costs of an industry are right, then the price is bound to be right. If it is not—
Viscount TRENCHARD: Together with the financial limits.
Lord WALLACE of COSLANY: The financial limits of Government interference. I cannot understand how the Government instructed the Gas Board to put up the price of gas, on the basis of what the Minister has said. We are assuming in this argument that prices must he right, but what will happen if, even in the judgment of the Secretary of State or the Minister concerned with the industry, they are not? Will the Minister tell them that they are naughty boys and then let them get away with it, or what will happen?
Viscount TRENCHARD: I think that I have answered that point. It is the financial limits and the objectives of the sponsoring Minister—and the noble Lord mentioned the question of gas—which will bear on prices. The other factors which will bear on prices are the costs and efficiency of the organisation. On prices as a whole, there is really no room between those two forces of the general objectives and financial limits on the one hand, and

681
efficiency on the other. A lot has to be done to make sure that that efficiency is up to scratch in all areas.
Lord WALLACE of COSLANY: I am still not satisfied. It seems to me that we are now reaching the stage where the Government do not want to have anything to do with prices. I am not happy about the reply of the Minister, and we may give further consideration to this issue at Report stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
8.16 p.m.
Lord AIREDALE Lord AIREDALE moved Amendment No. 33:
Page 15, line 23, leave out (" situation ") and insert (" enjoyed ").
The noble Lord said: On 21st November last year, the noble Lord, Lord Kings Norton, introduced an interesting short debate on the deterioration in the use of the English language. In the course of his speech, the noble Lord said this at columns 127 and 128 of the Official Report:
"In another place recently a Member referred to 'the crisis situation'. The word 'situation' was unnecessary. Rather worse, in a broadcast report of the Pope's visit to Mexico, I learned that in Mexico City there was 'an ongoing chaos situation', which meant, I suppose, 'continuing chaos'.".
What is sauce for the goose is sauce for the gander. A monopoly is a monopoly is a monopoly. The word "situation" adds nothing to "monopoly". I beg to move.
Lord MONSON: I warmly support this amendment. The noble Lord, Lord Airedale, is well-known for his zeal in upholding the correct use of the English language. What a pity it is that more noble Lords do not appear to share his concern. It is curious that this phrase ever crept into the Bill in the first place, but I suppose that in an era when even Ministers of the Crown can refer to "crisis situations" when their predecessors for generations past were content with the word "crises" perhaps it is only to be expected. At any rate, I hope that the noble Lord will stand firm on his amendment if the Government refuse to give way and, if he decides not to do so tonight for tactical reasons, then I hope that he will stand firm at a later stage.
Viscount BARRINGTON: May I in a very few words also support this amendment on the grounds that although the phrase "monopoly situation" could mean something, I do not believe it means anything in this Bill? If I were to say that the noble Lords on the Front Bench opposite had a monopoly of wisdom, or that the Liberal Party had a monopoly of virtue, I might be challenged on both points but one would know what was meant. The only sense of a monopoly situation then would be that the Front Bench was a monopoly situation, or that the Liberal Benches were a monopoly situation. Otherwise, I find it very difficult to understand that the word adds anything at all. I hope that the Minister will support this.
Viscount TRENCHARD: I should love to agree with this amendment. Unfortunately, I cannot be retroactive. The reason why I use that term, which is equally ghastly but in common use, is that, unfortunately, the term "monopoly situation" is one that is used in the Fair Trading Act, and it cannot be avoided. I sympathise with the noble Lord's desire to avoid what seems to be a very slipshod use of language. In the present case, however, I have to point out that "a monopoly situation" has a precise meaning which is defined in the Fair Trading Act and that to refer simply to "a monopoly" would not have the same effect. I therefore hope that, however reluctantly, the noble Lord will be able to withdraw his amendment rather than press me to act retroactively in relation to the 1973 Act.
Lord AIREDALE: I am always deeply depressed by being told that something which we all agree is nonsense must be perpetuated—because this mistake was made in the past, therefore it must go on being perpetuated forever. Perhaps the answer to the Minister's problem is to be found in his Amendment No. 69, which we have not yet dealt with:
"After Clause 21 Insert the following new Clause—(' . In Section 137(3) of the Fair Trading Act 1973…' there shall be inserted"
an amendment to that Act. Here is the opportunity. Let us amend "a monopoly situation" in the 1973 Act to "a monopoly" and then we shall get it right retroactively as well as now.
Viscount TRENCHARD: I will undertake to look into this before the Report stage, but the point is that there is a definition in that Act. I am not familiar with all its details, but the definition in the 1973 Act says, as I understand it, that "a monopoly situation" means X, Y and Z. As a result, I feel we shall find that it is impossible to change this. Perhaps, however, the noble Lord will accept my undertaking that, with a full wish to achieve his aim, I shall look into it and come back at Report stage to say whether we can get round this obstacle. However, I fear that I may have to confirm that we really cannot do so without quite a major amendment of the 1973 Act.
Viscount BARRINGTON: Before the noble Lord answers, may I make only one suggestion? If there is a difference between "a monopoly" and "a monopoly situation", the wording might be altered to "monopolistic situation", on the grounds of monopoly restrictive practices and so on. That would make an adjective instead of what I think the noble Viscount has at the back of his mind—this very confusing use of two long nouns which nobody quite understands. What the difference is we shall learn later on.
Lord AIREDALE: Of course I will respond to that generous offer by the Minister. I feel sure that he will be able to accommodate me, seeing that his Amendment No. 69 is an amendment to a definition in the 1973 Act. But for the present, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 34, 35 and 36 not moved].
8.24 p.m.
Lord TEVIOT Lord TEVIOT moved Amendment No. 37:
Page 16, line 2, leave out ("and").
The noble Lord said: I beg to move Amendment No. 37 and with it to take Amendments Nos. 38 and 39. These amendments are rather different to those I proposed on earlier clauses though I did refer to their implications loosely on Amendment No. 5 in Clause 2. I mentioned in the Second Reading debate that the operators of bus services are
684
already subject to a considerable degree of control. The purpose of these amendments is to remove further controls which, in the light of what control already exists, are deemed unnecessary by the road passenger transport industry. Your Lordships will forgive MC if I spell out the present position.
Except for the London Transport Executive, all road transport undertakings are already subject to investigation of the service provided to consumers, and into efficiency and costs, through the Traffic Commissioners' powers in the interests of the public under Sections 135 and 136 of the Road Traffic Act 1960; and they will continue to be subject to similar powers in the case of local services if the 1979 Transport Bill, in its present form, becomes law.
The Passenger Transport Executives are subject to control by the Passenger Transport Authorities by virtue of the Transport Act 1968. I must say the verbiage is very dry! The metropolitan county councils act as Passenger Transport Authorities. District council bus undertakings are controlled by their respective councils in terms of the legislation by which they were established, and they are also subject to a measure of control by virtue of Section 1 of the Transport Act 1978, to which I now refer.
The Transport Act 1978 requires non-metropolitan county councils to prepare annual five-year rolling public transport plans, which must be published, and it specifically requires county councils and operators to co-operate and provide information to one another for the purpose of preparing and implementing these plans. Many operators also receive grants from county councils under that Act and are thus subject to policies determined by county councils.
Overall, there is the "control of the market place", in that bus operators are subject to competition from other forms of public and private transport. For instance, the car owner is so wedded to using his own car that he will use it disregarding its true cost.
The apparent original intention of subsection (3)(b) in this clause was to include publicly-owned undertakings such as "National Bus" but, as the wording is now, it includes all corporate bodies which

685
provide a bus service. The only organisations that are not subject to this legislation are the small sole owners and partnerships, whereas limited companies are. The industry feels that this is unfair, and I would like to present an example. For instance, if one of these corporate bodies—we can call it John Bloggs and Co.—provides a one-day-a-week bus service from a village to a nearby town, it will, as the clause is worded, be subject to authorisation of a full investigation into the whole of its business. A company might also be involved in car sales, travel agency, haulage and, to the extent permitted by subsection (1), these could all be included in a reference to the commission. That may not be the intention, but it is what Clause 11 unquestionably authorises. It is all patently unfair, patently contrary to the spirit of the Bill, patently an inconsistency which should be removed.
Finally, I can see no good reason for making bus operators subject to further investigation when adequate controls already exist in other legislation, as I have said. It is accepted that there are special circumstances in respect of the London Transport Executive, because it is not subject to the controls that I have mentioned, but I do feel the Government should spare all other operators. Therefore I do urge my noble friend to look at this again and, if he does not like the wording, agree with the principle and come up with something more suitable at a later stage. I beg to move.
Viscount TRENCHARD: I should like to start where my noble friend Lord Teviot ended, on the question of the words "adequate control"—adequate control in terms of the purposes of this Bill. Of course, in almost every area of investigation under this Bill account is bound to have to be taken of laws and of policies and of other Acts—and the 1960 Act and the 1978 Act have been mentioned specifically. But, in relation to the 1960 Act, it should also be mentioned that the providers of bus services generally are often effectively protected from competition by the licensing provisions of the Road Traffic Act 1960. It is not the intention to cut across transport policies laid down or to question their detailed foundations, but it is thought that independent scrutiny should
686
apply to these organisations as to any other.
In the case of the very small organisation noble Lords will remember the statement that I made on Second Reading on the £5 million turnover exclusion. My noble friend has already mentioned the inconsistency that this amendment would produce in relation to London Transport, but the justification for including in the clause bus undertakings from the point of view of the Bill we are considering, other than public corporations answerable to Ministers, is that the providers of bus services are protected from competition and that independent scrutiny should be allowed to operate. It is true that bus services will operate in a more competitive environment when the Transport Bill becomes law. The Traffic Commissioners will still be able to grant monopolies to the operators of local stage services and it is right to retain the power to examine them.
I want to end by saying that we are looking for the possibility (I do not think that it is likely to be used in many cases in this area) of scrutiny by a body right outside the transport world—I understand that I have made yet another mistake. The turnover cut-off for small businesses does not apply to references under Clause 11. I am sorry.
However, those are our general views and we hope very much that my noble friend will allow this independent body, looking at competition and the effects of lack of competition, to have a look at the public transport world and the private transport world.
Lord TEVIOT: I thank my noble friend very much for his considerate reply. He mentioned that there may be scrutiny outside the transport world and perhaps he is referring to a consumer association or the like who are looking into a particular bus service and who might make a complaint to the Director General of Fair Trading. If that happened, they could do it perfectly well now through the Passenger Transport Executive, which does not include London Transport. I purposely omitted London Transport from this amendment because that is responsible to the GLC only. They have plenty of scrutiny and this consumer organisation could well go to the Passenger Transport

687
Executive, and I suggest that to do that with the Director General of Fair Trading could be counter-productive and create a lot of unnecessary red tape because they are perfectly adequately safeguarded now. However, I shall read what the noble Viscount has said and I am certainly not going to press this amendment now. I feel that either this or something similar would have been suitable, but in the light of what I have said I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 38 and 39 not moved.]
8.35 p.m.
Lord STANLEY of ALDERLEY Lord STANLEY of ALDERLEY moved Amendment No. 40:
Page 16, leave out lines 14 to 16.
The noble Lord said: The purpose of this amendment is to remove the agricultural marketing boards from being referred by the Secretary of State for Trade to the Monopolies and Mergers Commission in matters relating to (a) their efficiency and costs, (b) their services, and (c) a possible abuse of their monopoly position. I hope that the Government will find my amendment helpful, because I truly believe that they have not appreciated the difference between the agricultural marketing boards and other bodies affected by this Clause 11, who are such organisations as the nationalised industries and the water authorities. I hasten to add that the difference is not just because I happen to believe that the agricultural marketing boards have done a remarkably good job for both the farmer and the consumer, as opposed to the water boards in general, and Thames in particular, with whom I have to admit to having a personal vendetta.
I hope to convince the Committee of the true difference by looking at the three items referred to in the Bill in Clause 11(1) paragraphs (a), (b) and (c), and prove to your Lordships that in each case the present position of the agricultural marketing boards under the Minister of Agriculture, Fisheries and Food and the Agricultural Marketing Act 1958 is far more satisfactory not only to the farmer but particularly to the consumer than that proposed in this Bill under Clause 11. Clause 11(1)(a) allows the Secretary of State for Trade to refer the agricultural
688
marketing boards to the Monopolies and Mergers Commission if he suspects inefficiency or high costs. This is totally unnecessary because these points are already covered by the Fair Trading Act which allows the Minister of Agriculture Fisheries and Food and the Secretary of State for Trade to refer the board to the Commission, as in this Bill, but also under the Agricultural Marketing Act the Minister of Agriculture can set up a reorganisation commission; and also the Minister can direct the board and also, if he thinks fit, the Minister can amend the scheme.
Apart from these extra statutory powers because the members of the agricultural marketing boards are responsible to their farmer members, great pressure is always put on them by their grass root farmers, on their economy and their efficiency. Farmers are not particularly well known for giving their money away for no return and, as an example, may I remind the Committee of the demise of the Tomato and Cucumber marketing boards and indeed the demise of the Egg Marketing Board, who failed to measure up to the efficiency and cost strictures put on them by their farmer members. It was the farmer members who acted in one case and the consumer committee in the other. In fact, I cannot see how I, as a ratepayer, could do the same thing to, say, the Thames Water Authority, which I hope reinforces my case that the agricultural marketing boards are totally different beasts from those which are referred to in Clause 11.
Clause 11(1)(b) says that the Secretary of State for Trade is allowed to refer matters relating to the service provided by the board to the Monopolies and Mergers Commission. Once again, under the Fair Trading Act this can be done by the Minister of Agriculture and the Secretary of State for Trade; but much more important is the fact that under the marketing Acts there is a consumers committee who watch the effects of that particular board, and they are no toothless wonders. I hope the Committee will believe this, rather than force me to read out the number of complaints and the ways in which these consumer committees have dealt with them over the past 30 years. However, if the Committee wishes it I shall be happy to delay the Committee for a considerable period of time, quoting them all.
Lastly, under Clause 11(1)(c) the Secretary of State for Trade may refer matters relating to possible abuse of the boards' monopoly position to the Monopolies and Mergers Commission. Once again under the Fair Trading Act the Minister of Agriculture and the Secretary of State for Trade can do this; also, so can the Minister of Agriculture under the Agriculture Marketing Act refer such an action to a committee of investigation under that Act. However, quite honestly I cannot envisage a situation where the Secretary of State for Trade would have to use his powers under this clause, because he already has these powers under Clauses 2 to 10 of this Bill, and I have not asked for the agricultural marketing boards to be taken out of those clauses, though quite privately I admit that I would have liked so to do, and if the Government would like to put down an amendment to do this I would be delighted to support it.
I hope I have proved that Clause 11 should not apply to the agricultural marketing boards. It is useless, it is redundant and it is bureaucratic nonsense. And although I admit that I cannot see it ever being used, it could make the unfortunate board appear all over again, by order of the Secretary of State for Trade, before the Monopolies and Mergers Commission, which, in the words of my noble friend Lord Trenchard, in his Second Reading speech, would have exactly the same effect as previously, and I quote:
"…having to beat off … the Price Commission … with its 500 staff and consultants to support it, was capable of asking enough questions to keep the minds of tens of thousands of managers away from wealth creating in the sector that used to so create ". [Official Report, 4/2/80, col. 1111.]
In this case, it would be the agricultural marketing boards which would have their minds taken off the marketing of, say, milk, which I understand is in surplus and at the moment badly needs selling.
As I understand it, one of the reasons why this Government were elected was to cut down on bureaucracy. I believe that, unbeknown to them, including the agricultural marketing boards in Clause 11 is doing just the opposite. I am reinforced in that view because when this clause was debated in another place my right honourable friend Sally Oppenheim on 22nd November in Committee B said:
"For the first time under this Bill the agricultural marketing boards and their practices will be capable of investigation ".
690
Perhaps I should just say, "No comment", but I hope I have convinced the Committee that that just is not so, and that the present arrangements are very much more foolproof and embracing, both for the consumer and the farmer member of that particular board, than what is proposed under this Bill. I, therefore, very much hope that the Government will accept my amendments. I beg to move.
Baroness ELLIOT of HARWOOD: I rise to support my noble friend Lord Stanley. I stand here tonight rather in the position of being the mother of all marketing boards since it was my husband who in 1933 started the Milk Marketing Board and a great many others. Although some of them have not survived or have outlived their usefulness, I think it is perfectly true to say this. Last year, or it may have been the year before, when the EEC challenged whether our farmers should be able to continue with marketing hoards, they said we could if the dairy industry, the milk producers, would vote up to 80 per cent. in favour of the Milk Marketing Board. They voted 99·2 per cent. or 99·3 per cent. in favour. So it shows in any case that this has the wholehearted 100 per cent. support of the dairy industry.
I agree with all that my noble friend Lord Stanley has said. There are quite distinctive points about this which seem to me to put the marketing boards in a different category from the other boards we have been talking about. To begin with, the agricultural marketing boards are elected by producers. The members of the various boards are working in the different agricultural industries. They do not supply goods or services directly to the public. They are elected and watched over very carefully by the producers, and they are not directly responsible to the public. They are subject to investigation if anything they do or recommend is contrary to public interest. That is already in the Act. If the Minister receives a complaint under the Act of 1958 about the working of the Milk Marketing Board or any other board, the Minister can order an investigation to get the complaint dealt with. Under the Fair Trading Act 1973, the activities of any board can be referred to the Monopolies Commission. All these things are there; they do not require to

691
be added to any Act of Parliament at all. Also, the consumer committees appointed under the agricultural Acts can periodically investigate any marketing board, and in case of recommendations in regard to any of their practices they can receive those criticisms and be guided by such criticisms, and in many cases will alter the practices.
Clause 11, if passed as it stands, simply duplicates existing powers. It would cause confusion and additional costs and complicate matters quite unnecessarily. I think it would be greatly important to this Bill, apart from its importance to the agricultural industry, if the Government could see their way to accepting the amendment which Lord Stanley and I—and I may say, Lord Cledwyn of Penrhos, who I am sorry is not here—support.
Viscount TRENCHARD: I think I may be able to help, at least to a degree. I do not want in any way to fail to support the views that my noble friends have expressed on the excellent job, in many ways, that the marketing boards have done and are doing, and the extensive machinery under which they operate. But there is extensive machinery in other areas, too. There are consumer councils, and indeed the noble Baroness, Lady Seear, will be speaking to an amendment in a moment in relation to consumer councils and consumer committees in nationalised industries.
If I may remind your Lordships once again, what this Bill is dealing with is anti-competitive practices. It is possible for these marketing boards—which, as my noble friend has just said, are elected by the producers and organised by the producers—to be engaged in anti-competitive practices in particular terms that they may give to particular customers for particular products. They are large and very powerful boards, and in some cases have near monopolies. In that situation, it is possible for anti-competitive practices to arise and to affect other and smaller organisations and companies to a major extent. So they have been included in Clause 11 because of their monopoly position under statute, in which respect they have some similarities with other bodies. They are not, of course, entirely similar for the reasons my noble friends have mentioned.
692
As has been made clear in other contexts, the Fair Trading Act 1973 is not an ideal vehicle for examining the efficiency of public bodies, and Clause 11 is designed to remedy this deficiency. The fact that these boards are already subject to the Act of 1973, albeit at the initiative of Ministers rather than the Director General, is not an argument against including them in Clause 11. The Government, however, recognise that special provision for these boards was made under the Fair Trading Act and that similar procedures should be adopted in the Bill.
Consequently, amendments have already been accepted in another place which have the effect of extending the order-making powers of the Minister of Agriculture so that he can take appropriate action in respect of these boards following a report of the commission in exactly the same way as he can under the Fair Trading Act. At the same time, these amendments remove the Secretary of State's powers to make orders in respect of these boards. However, in view of the special position of the Ministers for agriculture in relation to agricultural marketing boards under the Act of 1958, the Government consider that it would be right to make some further amendments to this part of the Bill. Therefore, an amendment will be tabled on Report which will require the Secretary of State formally to consult the relevant agricultural Minister before a board is referred to the commission under Clause 11. An amendment will be tabled requiring similar consultation about the use of the Secretary of State's power of veto under Clauses 3 and 7 of the Bill. Therefore, I hope that my noble friends will be satisfied with that statement. We shall see whether we can give it positive form at the Report stage.
The Earl of CAITHNESS: I am very grateful for what my noble friend has said on this matter. However, he made one remark which I should like him to clarify. He said again that the Fair Trading Act was not the complete answer. However, there is the Agricultural Marketing Act, which covers the agricultural marketing boards and that, I have been informed, covers every situation raised by the Bill. Therefore, it is sheer duplication rather than covering any new ground. Perhaps he could confirm whether that is a correct interpretation?
Viscount TRENCHARD: I do not think that the Agricultural Marketing Acts, which indeed set these boards up in many cases as monopolies—although they contain many safeguards, many checks and balances, if that is the correct expression—bear on all the purposes of the Bill and on how these boards may act in relation to other traders. Therefore, I hope very much that a form of words along the lines that I have described will satisfy my noble friends and allow the ligitimate purposes of the Bill to apply to agricultural marketing boards with the minimum of duplication.
The Earl of CAITHNESS: Without wishing to press the point, but in order to satisfy the people who have given me help in this matter, can the Minister suggest one or two areas which would prove his point? Specific examples would be most useful.
Viscount TRENCHARD: I do not think that I can give specific examples other than the type that I have already given. This is the first time that we have had legislation on the statute book which bears on such matters as distortion of competition, for instance—I am thinking aloud to answer the question—in relation to how particular customers might be treated. Again, in each individual case, people interested in particular bodies or particular types of companies are visualising that the Director General of Fair Trading will be investigating them fully all the time and only them. That gives me the opportunity of saying to my noble friend, who quoted me my words in the Second Reading debate, that this organisation is set up with a small staff —much smaller than that of the Price Commission—and it is set up with the object of making competition work. My remarks on Second Reading were in relation to the Price Commission, which, in many respects, did the opposite.
Lord STANLEY of ALDERLEY: Of course I thank my noble friend for what he has said and I look forward to seeing the form of the amendment that he will bring forward at the next stage. I should like to mention one or two matters that I would like him to consider as regards this issue. First, I must point out again that Clause 11, as I see it, deals only with the internal arrangements of the board, and not the external arrangements.
694
I know that I shall be picked up on Clause 11(1)(c) in a few minutes, but I have already said that I cannot ever see that happening unless the monopoly position that they occupy is dealt with in Clauses 3 to 10. I cannot see why that is there and I would be most grateful if my noble friend, when he refers it back to the department and thinks about it, would try to consider whether there would ever be a case when Clause 11(1)(c) would actually be used rather than another part of the Bill—Clauses 2 to 10—which, as I say, I have not taken out, although I would like to do so.
If there is any anti-competitive action or practice going on, I am sure my noble friend will find that he will catch us in Clauses 2 to 10. In any event, I am afraid that my noble friend has not convinced me that the new arrangements are any better than the old arrangements.
I should like to take your Lordships through one other point in this respect. I see a great duplication. Under the present system the Minister of Agriculture is in charge of his boards, we may say, through the Agricultural Marketing Act 1958. Under that Act we could get a position whereby the Secretary of State for Trade wakes up one morning and sees something happening in one of the agricultural marketing boards. He writes a letter to the Monopolies and Mergers Commission and says, "Off you go, we shall take you to them ". At the same time, at the other end of the corridor in Horseferry Road, the Minister of Agriculture, under the Agricultural Marketing Act, is doing exactly the same thing. I do not think that that will lead to a happy relationship.
On the other hand, the Minister of Agriculture may decide to take a different view and refer the matter to one of his committees of inquiry under the Agricultural Marketing Act. I do not know whether I have made myself clear to my noble friend, but I would like him to look at the duplication arising from both being in charge and neither being in charge and perhaps both doing separate things in their own particular way and not knowing what the other side is doing. If they both know what they are going to do by consultation with each other, why not leave things as they are at present? Apart from that, unless my noble friend

695
has anything else to say at this moment —which I do not think he has—I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
8.58 p.m.
Baroness SEEAR Baroness SEEAR moved Amendment No. 41:
Page 16, line 23, at end insert—
(" ( ) Any body established under any enactment to represent the interests of consumers of goods or services supplied or provided by any body falling within subsection (3) above may, in relation to that body, make representations to the Secretary of State at any time with regard to the matters specified in subsection (1) above and it shall be the duty of the Secretary of State to consider such representations with a view to making a reference to the Commission under this section and in the event of the Secretary of State not making such reference he shall report his decision to Parliament with reasons.").
The noble Baroness said: I am sure that by this time the noble Viscount, Lord Trenchard, is pining for an opportunity to agree to an amendment. I really believe that on this occasion I have given him the chance that he has been looking for. Amendment No. 41, which seeks to strengthen the position of the consumer councils in the nationalised industries, is surely an amendment which must appeal to the heart of the noble Viscount, Lord Trenchard. The amendment proposed illustrates the two major points that I made when speaking to a previous amendment. There can be no question—can there?—that the public is deeply concerned about prices in the nationalised industries. That has been demonstrated in the last few weeks. The public are concerned about the prices in the nationalised industries because the nationalised industries deal with commodities of the very first importance to the general public, as well as, indeed, to manufacturing industry. They are also, almost by definition, industries which are monopolistic. Therefore, they are industries of quite peculiar importance to people everywhere and to those of us who are concerned to see that prices are kept as low as is compatible with efficiency.
It is also well understood and well agreed that, despite efforts to make consumer councils effective, we have never really found a way in this country to protect the consumer in relation to the nationalised industry. I do not believe
696
that anybody, however strong a supporter of nationalisation—and I am not a strong supporter of nationalisation—believes that the consumer councils have been a satisfactory answer to the problems of the consumer vis-à-vis the nationalised industries.
In this legislation we have an opportunity to strengthen the position of the consumer councils in an area of the very greatest possible importance. In this legislation the Government have recognised that action is needed in relation to the nationalised industries. But surely they must also recognise that the consumers want representation; they want to be able to take action through those bodies which are set up for their peculiar benefit.
As I said earlier, we want to ensure that consumer representatives are able to have a more effective say in what happens. We also want to ensure that Members of Parliament are able to have a more effective say in prices in these peculiarly sensitive areas. Therefore, in this amendment I propose, first, that the consumer councils should have the right to bring a case to the attention of the Secretary of State which, in their view, needs investigation and, secondly, that if the Secretary of State does not act on the suggestion from the consumer councils, he has to explain to Parliament why he is not so acting, which gives Members of Parliament an opportunity to challenge and press the Secretary of State on reasons for not taking up a matter which has been raised by the consumer councils.
I really believe that, if this amendment could be accepted, it would make Clause 11 far more effective; it would give real teeth to the consumer councils, which they have lacked in the past; and it would give a real opportunity for Members of Parliament to play an effective part in the control of prices in the nationalised industries. I beg to move.
Viscount TRENCHARD: That was a heart-moving appeal to accept an amendment—how I wish I could respond to it, and respond adequately. However, if I read the amendment correctly, it would impose an obligation on the Secretary of State to consider such representations specially. The future of the nationalised industries' consumer councils is under

697
review. I do not want that statement to be taken as being a critical one. New Governments review many things and they may well want to strengthen rather than weaken. I do not want that statement to be regarded as being anything other than entirely neutral.
We recognise the good work carried out by a number of dedicated people in these areas. We do not think that the present legislation is the appropriate vehicle for setting out their rights of representation to the Government. The Government would, of course, very carefully consider any representations which they received from nationalised industries and their consumer councils about an industry's costs and efficiency, service provided or possible abuse of a monopoly situation. However, I think that that makes it unnecessary to impose a requirement on the Secretary of State to consider such representations. For the same reason, I do not consider that he should be obliged to give his reasons to Parliament should he, in the event, decide against making a reference. In any case, Ministers are accountable to Parliament for their decisions. Therefore, for those reasons I must resist this amendment. I have the slight feeling from the noble
Baroness that she wanted to have a look at the good work that the nationalised industries' consumer councils do, and thus put them on a stronger footing. I suggest once more that the present legislation is not the appropriate vehicle for setting out their rights of representation to the Government generally, and that in the context of this Bill, therefore, there is no need for the amendment.
Lord PONSONBY of SHULBREDE: I am sorry that the noble Viscount takes that attitude to this amendment, for it seems to us that this is a very worthwhile amendment and I had hoped that, in fact, we would have a constructive response to it from the noble Viscount.
Baroness SPEAR: I am very sorry indeed that the noble Viscount is unable to accept the amendment. In the circumstances, I fear that I must test the opinion of the Committee.
9.6 p.m.
On Question, Whether the said Amendment (No. 41) shall be agreed to?
Their Lordships divided: Contents, 40; Not-Contents, 77.

CONTENTS

Airedale, L.

Grey, E. [Teller.]

Ross of Marnock, L.

Barrington, V.

Hanworth, V.

Seear, B. [Teller.]

Beaumont of Whitley, L.

Houghton of Sowerby, L.

Segal, L.

Blease, L.

Kaldor, L.

Simon, V.

Brooks of Tremorfa, L.

Llewelyn-Davies, L.

Stewart of Alvechurch, B.

David, B.

Llewelyn-Davies of Hastoe, B.

Stewart of Fulham, L.

Davies of Leek, L.

McNair, L.

Stone, L.

Davies of Penrhys, L.

Maelor, L.

Strabolgi, L.

Elwyn-Jones, L.

Mishcon, L.

Taylor of Blackburn, L.

Evans of Claughton, L.

Oram, L.

Taylor of Gryfe, L.

Galpern, L.

Pitt of Hampstead, L.

Wallace of Coslany, L.

Gladwyn, L.

Ponsonby of Shulbrede, L.

White, B.

Glenamara, L.

Ritchie-Calder, L.

Winstanley, L.

Gregson, L.

NOT-CONTENTS

Airey of Abingdon, B.

Exeter, M.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Bellwin, L.

Fairfax of Cameron, L.

Harvey of Tasburgh, L.

Bessborough, E.

Faithfull, B.

Hereford, V.

Caithness, E.

Falkland, V.

Hives, L.

Cockfield, L.

Falmouth, V.

Holderness, L.

Cork and Orrery, E.

Ferrers, E.

Home of the Hirsel, L.

Craigavon, V.

Gainford, L.

Hornsby-Smith, B.

Crathorne, L.

Galloway, E.

Hunt of Fawley, L.

Cullen of Ashbourne, L.

Glasgow, E.

Inglewood, L.

de Clifford, L.

Gray, L.

Kilmany, L.

De La Warr, E.

Greenway, L.

Long, V.

Denham, L. [Teller.]

Gridley, L.

Lucas of Chilworth, L.

Denman, L.

Grimston of Westbury, L.

Lyell, L.

Drumalbyn, L.

Hacking, L.

Mackay of Clashfern, L.

Elliot of Harwood, B.

Macleod of Borve, B.

St. Aldwyn, E.

Strathcona and Mount Royal, L.

Mancroft, L.

St. Davids, V.

Stuart of Findhorn, V.

Mansfield, E.

St. Germans, E.

Swansea, L.

Margadale, L.

St. Just, L.

Swinfen, L.

Massereene and Ferrard, V.

Sandys, L. [Teller.]

Trefgarne, L.

Mottistone, L.

Selkirk, E.

Trenchard, V.

Mountgarret, V.

Sempill, Ly.

Vaux of Harrowden, L.

Mowbray and Stourton, L.

Skelmersdale, L.

Vernon, L.

Murton of Lindisfarne, L.

Spens, L.

Westbury, L.

Newall, L.

Stanley of Alderley, L.

Wise, L.

Orkney, E.

Strathclyde, L.

Young, B.

Rochdale, V.

On Question, amendments agreed to.

Clause 11 agreed to.
Clause 12 [Orders following report under section 11]:
9.14 p.m.
Lord PONSONBY of SHULBREDE Lord PONSONBY of SHULBREDE moved Amendment No. 42:
Page 18, line 33, leave out ("excluding paragraph 10").
The noble Lord said: This and the following two amendments are concerned with the same subject, and I would say in parenthesis that we are now starting a series of amendments all dealing with the question of prices and all trying to put back into the Bill some guts, so that we have an adequate mechanism for dealing with prices. This amendment and Nos. 43 and 44 are aimed at retaining for the Minister the ability to regulate prices as described in Section 10 of the Fair Trading Act 1973. Our feeling is that the Bill as drafted is inadequate in this field and, as I say, these amendments would go some way to put some guts into the Bill.
Viscount TRENCHARD: I will try in my answer to emulate the brevity with which the noble Lord, Lord Ponsonby of Shulbrede, moved the amendment. My comments on this are in line with those I made earlier; namely, that for public body investigations or references, we believe a combination of the financial limits and general objectives set by sponsoring Ministers to nationalised industries, and investigations into the efficiency of the organisation under Clause 12, are more than adequate to cope with any possible problems and that to bring back—which I think is what the amendment seeks to do—part of the price-regulating powers is the opposite of the Government's objective.
700
These amendments have already been considered in another place at considerable length and the Government advised against their acceptance, and the reasons are still valid. The order-making powers in Clause 12 relate only to investigations into nationalised industries and the other bodies described in Clause 11(3). These investigations will be concerned primarily with efficiency and the commission's reports will be available to sponsoring Ministers, who will be able to take account of the findings when they come to determine the financial targets of the bodies concerned. If one were to go further, one would cause a conflict between financial targets and pricing, and if efficiency is properly investigated and improved and financial targets are set by sponsoring Ministers, there will be no need to act on prices.
Lord PONSONBY of SHULBREDE: I thank the noble Lord for his remarks. I persist with my amendment, but will not press it to a Division.
On Question, Amendment negatived.
[Amendments Nos. 43 and 44 not moved.]
Clause 12 agreed to.
Clause 13 [Investigations of prices directed by Secretary of State]:
9.20 p.m.
Baroness SEEAR Baroness SEEAR moved Amendment No. 45:
Page 19, line 1, leave out from beginning to ("under") in line 5 and insert—
(" (1) The Director may carry out an investigation into any price which appears to him to be of public concern with a view to providing the Secretary of State with information, recommendations and observations relating to that price; but an investigtion").
The noble Baroness said: The purpose of the amendment is to strengthen the powers of the Director General so that in a matter of public concern he does not have to wait

701
for the direction of the Secretary of State, but can in fact take the initiative. This amendment should be considered in conjunction with Amendments Nos. 46 and 47, all of which together constitute the total amendment that I propose. I beg to move.
Lord AIREDALE: I should like to support the amendment. It seems to me to be fairly clear that people making complaints about prices will complain to the Director, because the Director will be the person who holds the investigation, if there is to be one. So in practice, the Director will receive the complaint, look at it, and decide whether an investigation is desirable. He will then write to the Secretary of State and say, I think this investigation is desirable. Would you care to direct me to make one, because I cannot make one under the Act as it now stands unless you direct me to do so. "The Secretary of State, having faith in his Director General of Fair Trading, will almost automatically say, "Yes, if you, having looked at it, think an investigation should be made, you go ahead and make one—and I formally direct you to do so ".
This is rather a waste of time, shuffling between the Director and the Secretary of State and back again. Surely the Director will always be a person worth his or her salt who is capable of reaching a sensible conclusion on whether an investigation should take place; and that is the situation which the amendment would achieve. I hope that the Government will think it a sensible and excellent amendment. Of course, if the Secretary of State differs from the Director and wants an investigation which the Director is not particularly keen to conduct, under, I think, subsection (2), the Secretary of State can still direct the Director to investigate. So nothing would be lost on that score.
Viscount TRENCHARD: The Government's view is that Clause 13 will be needed only in very exceptional cases. If indeed we concentrate both on making competition work—I have said this several times already today—and on anti-competitive practices, the market will take care of prices. At the beginning of today's Committee stage, we had a long interchange which I do not propose to repeat on the question of the degree to which
702
Price Commissions or their equivalents in this or other countries had in fact affected the level of prices.
We agree that there are some areas where, due to an anti-competitive situation, there is the risk not only of results relating to prices but of other unfortunate results, and the Bill is designed to go to the root of the causes, rather than to the symptoms. We do not believe that the suppression of the symptoms has been successful. We do not believe that Clause 13 will need to be used, except in very exceptional circumstances. Therefore all the amendments of the noble Baroness—she may wish to speak to each of them; she mentioned two other amendments—are based on the presumption that a great deal of price reference work will be necessary. We do not think that it will be. The noble Baroness thinks that the market place has changed, but we do not believe that it has changed in principle. It has changed in many details, but before the days of "motorbility" of customers—probably in Adam Smith's day—there were just as many opportunities for people to corner a particular section of a local market as is the case today when competition relates not only to price but to many other factors, and is very often international as well as national.
Again, we believe the proof lies in the profit margins of industry, both at times when we have had price control and at times when we have not, and we believe that independent surveys bear that out. So I very much hope that noble Lords opposite will not press these amendments.
The noble Lord, Lord Airedale, I think suggested that the Director of Fair Trading would be the main person to receive complaints about prices. We do not see it that way. We believe the Director of Fair Trading will be principally engaged, so far as this Bill is concerned, on the anti-competitive practices, and that if he gets to the root causes the prices question will not arise. We quite specifically do not want him to be a Price Commission, and we quite specifically, therefore, regard Clause 13 as the exceptional safety valve, where someone can go to the Secretary of State to make a complaint. It may be that in some instances the Director General may himself make a complaint, but we believe that the very exceptional case will have to

703
be considered by the Secretary of State before the Office of Fair Trading moves into prices under this clause.
Baroness SEEAR: This, of course, is the heart of the disagreement between us. We on this side of the Committee do not share the Minister's optimism as to the extent to which the measures proposed are in fact going to deal quickly enough (though maybe in the very long run) with the prices situation which is causing the very greatest concern at the present time, both in general and in particular localities. We therefore believe that it is necessary for the Director General to have a function in relation to prices which will be something more than the very exceptional occasion when he has to intervene. However, at this late hour, with the plain unbalance between the two sides of your Lordships' Committee, I do not propose to press this to a Division at the present time, but I reserve the right to bring the matter up again at the Report stage.
Lord ROSS of MARNOCK: I sincerely hope this question is brought up again at the Report stage, for the simple reason that it is of very considerable importance. Here we seek to give some real power to the organisation that will replace the Price Commission and which will do a better job, although they are going to have very few people with which to do it. I have looked at the number of people who are going to be employed. For all these things that we have been talking about all day, I think the number to be employed is about 80. I heard one Minister today talking about the Price Commission being cosmetic. This is not even pale whitewash. Here we have a chance to give power to the Director himself to carry out an investigation; hut, no, he must get the permission or the direction from the Secretary of State also.
What price is causing us most trouble at the present time? It is gas—gas prices. Do you think the Secretary of State is going to tell the Director to start an investigation into that? After all, it was a Minister who came to that Dispatch Box and told us that gas prices were going up, and that they were going up at a rate and to a degree which was not agreed with the Gas Council itself. It was the
704
Minister who was putting it up. Can we expect the Minister, then, to order an investigation into himself? This is the weakness. Some residual power must therefore be given, I think, to the Director to carry out an investigation into these special things. The special things are important, but at the present moment the special things are tied up, and the people responsible are not the nationalised industries in two particular cases, but the Ministers themselves. Who is going to investigate the Ministers? It is an interesting question. Unless we get an answer to it, I do not think there is any satisfaction in this piece of whitewash.
Amendment, by leave, withdrawn.
[Amendments Nos. 46 and 47 not moved.]
9.30 p.m.
Lord WALLACE OF COSLANY Lord WALLACE OF COSLANY moved Amendment No. 48:
Page 19, line 12, leave out ("major").
The noble Lord said: My amendment strikes at the heart of the differences between the two sides of this Chamber. If there was ever a bunch of artful dodgers, the Government are certainly that so far as this particular clause is concerned. The clause as drafted is heavily weighted against reference to the Secretary of State by providing too many excuses. For the Secretary of State to be satisfied of "public concern" is quite sufficient. What more do they want? The clause is so widely drawn that it is almost impossible to make any reference out of it. First, the Secretary of State has not only to be satisfied on public concern but on "major public concern". What constitutes "major public concern"? Do we have to have marches on No. 10 or riots in Whitehall? What do they mean by that? Then we have to have "general economic importance". Not just "economic" but "general". What precisely does "general economic importance" mean? How vague can you get? And that is not the end. The Secretary of State has to decide that the consumers are affected by "the price"—not the charge. But they have to be "significantly affected ". If there was ever a clear example of dodging responsibility, this is it.
Let us face it. Having got rid of the Price Commission, every attempt is being

705
made to avoid responsibility on prices. The noble Viscount, Lord Trenchard, has admitted this. They do not want to have anything to do with prices. The Secretary of State has no responsibility for prices. Some Minister or some junior Minister in some remote corner will have responsibility; but who does what, nobody knows. I think this is a disgraceful piece of legislation so far as this clause is concerned. Public concern, certainly! What more do they want? I state definitely that, in dodging this issue, this is an act of clear political cowardice. I do not expect to get any satisfaction from the Minister. Neither does the housewife, nor the country. The Government do not intend to do anything about prices, except perhaps to put them up where they have some responsibility. This is absolutely disgraceful. I do not expect to get any undertaking, and in view of the lateness of the hour, there will be no vote. But I warn the Minister now that when we come to the Report stage we shall have another battle on this question because this is a vital issue in the country and not only in the House of Commons and the House of Lords. I beg to move.
Viscount TRENCHARD: On a point of detail, first I think that the noble Lord, Lord Wallace of Coslany, has implied that the Bill means that the Secretary of State must be satisfied under Clause 13(2)(a) and (b). This is not true. There is an "or" between (a) and (b). That is a detail. In general, I have to return Lord Wallace's compliments. I believe that the noble Lord himself is the artful dodger. I believe that he suggested that we were a bunch of artful dodgers. If he did not, it may be my hearing—
Lord WALLACE of COSLANY: I did.
Viscount TRENCHARD: Then I return the compliment. The form of artful dodging that the noble Lord indulges in is in paying not one bit of attention to the substantial evidence which we discussed earlier this afternoon that, in fact, the Price Commission had little, almost negligible, effect on prices and damaged business to a major degree. I explained why that was not a contradiction. I am afraid that noble Lords opposite have never understood business and that is
706
why they have nearly ruined it. How can it be explained, as I said earlier, that there are no huge profit margins in big companies or small companies in any situation? Nor will there be as a result of our already fait accompli since we announced the abolition of the Price Commission. I will not go over all the international evidence again, but the artful dodgers are opposite. They do not listen and nor do they pay any attention to the facts.
Lord WALLACE of COSLANY: Tempers are getting a little bit frayed, are they not?
Viscount TRENCHARD: Yes.
Lord WALLACE of COSLANY: I am very surprised. The noble Viscount says, "noble Lords on the opposite side" know nothing about business. I happen to have been in my career an office manager, getting staff working and consoling my typists when the management came in, after extremely heavy lunches, late in the afternoon and intended to dictate their letters. We are the people who kept the businesses going. The people out wining and dining for business reasons on business expenses were not those actually keeping the business going. I resent any reference that has been made. This amendment is nothing whatever to do with the Price Commission. This amendment is just giving the Secretary of State responsibility to deal with public concern. That is what he is there for. With all the other provisions, the Government are really dodging the issue. As for artful dodgers, I would not be in competition with that bunch. They have the know-how; I have not. Under the circumstances—I have enjoyed myself—
Viscount TRENCHARD: Steady. I was resisting replying.
Lord WALLACE of COSLANY: That is all right. Under the circumstances —the hour is late and my bedtime is nigh—I will withdraw the amendment now but I give warning that further shots will be fired on the Report stage. I shall bring it in again.
Amendment, by leave, withdrawn.
[Amendment No. 49 not moved.]
9.38 p.m.
Lord MOTTISTONE Lord MOTTISTONE: moved Amendment No. 50:
Page 19, line 17, at end insert—
(" ( ) The Secretary of State shall not give a direction under this section until—

(a) he has given to the person or persons whose price is to be investigated notice of the proposed investigation together with an indication of the goods or services to which the investigation is to relate; and

(b) at least fourteen days have elapsed since such notice was given ").

The noble Lord said: The purpose of this amendment is to allow time for representations to be made by a company whose prices might be investigated. The procedure might prevent unnecessary investigations arising from misunderstandings and would provide companies with an opportunity to draw attention to any factors which they believe are relevant in weighing up the potential advantages and benefits of such an inquiry. I beg to move Amendment No. 50.
Lord TREFGARNE: I am afraid it would be impracticable for the Secretary of State to give the notice required by my noble friend's amendment. An investigation might well involve a whole multitude of manufacturers, suppliers of services or distributors and it would not be realistic to expect all these parties to receive notice of the proposed investigation. If, having announced his intention to launch an investigation under Clause 13, the Secretary of State became convinced through representations received that his original decision needed to be modified, it would be open to him to revoke or vary the investigation under Clause 13(3). In any case, it is important to remember that the powers under Clause 13 are to be used only exceptionally. There is, therefore, no question of investigations under this provision imposing major burdens on industry or commerce. In the light of that last point, particularly, I hope that my noble friend will see fit not to press his amendment.
Lord MOTTISTONE: I thank my noble friend for his very clear reply, which has clarified the situation well. I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Lord AIREDALE Lord AIREDALE moved Amendment No. 51:
Page 19, line 19, leave out from ("not") to ("having") in line 22 and insert ("vary a direction unless he issatisfied that he can give the direction as varied ").
The noble Lord said: This is a purely drafting amendment. This subsection is not the only one in the Bill which seems to me to say what it has to say in more words than it needs in which to say it. I have ventured to preserve the meaning of the subsection intact but to convey the message in rather fewer words. I beg to move.
Lord TREFGARNE: The noble Lord—I am almost inclined to call him my noble friend after all these exchanges—has made an appeal for simplified drafting in legislation which we have heard many times in this Chamber. His appeal will be welcomed by everyone and particularly, I am sure, by parliamentary counsel who will take careful note of what the noble Lord has said. The present text of Clause 13(3), however, we think makes absolutely clear the Government's intention, and for that reason I believe the amendment is unnecessary and I hope the noble Lord will not press it.
Lorc AIREDALE: I shall not press it, but it is not unnecessary if it makes the meaning as clear in fewer words, because we want to save people having to read more words in Acts of Parliament if we can. However, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The CHAIRMAN of COMMITTEES (Lord Aberdare): The next amendment I have to call is No. 52. I understand there is a misprint here. This amendment is in the name of the noble Baroness, Lady Seear.
9.43 p.m.
Baroness SEEAR Baroness SEEAR moved Amendment No. 52:
Page 19, line 30, leave out subsection (5) and insert—
(" (5) As soon as practicable after the completion of an investigation made under this section, the Director shall prepare a report—

(a) stating the findings of fact made by him in the course of that investigation;

709

(b) recommending whether, in his opinion, the price in question should be wholly or partly restricted and as to the duration of any recommended restriction;

(c) making such additional recommendations or observations (if any) as the Director considers should be made to the Secretary of State as a result of the investigation; and

(d) stating the Director's reasons for making his recommendations.

( ) A report referred to in subsection (5) above, shall be submitted by the Director to the Secretary of State, and where a direction has been made under subsection (2) above shall be so submitted before the expiry of a period which shall be specified for this purpose in such direction (whether as originally given or as varied under subsection (3) above).
( ) On the date that a report is submitted to the Secretary of State in accordance with preceding subsection (hereafter in this Act referred to, in relation to that report, as "the publication date").

(a) the Director shall give a copy of the report to the person by whom the price or charge which is the subject of the investigation is made (hereafter in this Act referred to, in relation to that price or charge, as "the relevant person") and shall publish the report in such manner as he considers appropriate; and

(b) the Secretary of State shall lay a copy of the report before each House of Parliament.

( ) If such a report is presented by command of Her Majesty to either House of Parliament otherwise than at or during the time of a sitting of that House, the presentation of the report shall for the purposes of this section be treated as the laying of a copy of it before that House by the Secretary of State.").
The noble Baroness said: This amendment is once again an attempt to give greater publicity to the reports of the Director General and to give greater parliamentary control over the results of those reports. I fully expect the same response that we have had to all the previous amendments from the Government Bench. It is quite clear they are not interested in bringing more control by the representatives of the people, elected or in consumer councils, to bear on the whole question of monopolies and prices. This amendment is intended to give the public fuller information about what is happening and to allow Parliament to have more influence on the outcome of those reports. I beg to move.
Lord TREFGARNE: I think that my noble friend Lord Trenchard really deployed the major arguments against this amendment and, frankly, I have precious little to add to what he has said. May I just say this: that because all investiga-
710
tions under Clause 13 will be exceptional and limited to prices of major public concern, the Director General will not retain a large staff for this purpose. On the rare occasions when investigations do take place, he will probably have to engage consultants to assist him. If, as a result of price investigations, there is evidence that a price is unjustified, the appropriate follow-up action could be through the use of the competition legislation; for example, the earlier provisions of this Bill dealing with anti-competitive practices or action under the Fair Trading Act. I do not really think there is much more I can say beyond that.
Baroness SEEAR: Once again, I shall withdraw this amendment at this stage, but with the prospect of bringing it forward again later at Report stage.
Amendment, by leave, withdrawn.
Lord PONSONBY of SHULBREDE Lord PONSONBY of SHULBREDE moved Amendment No. 53:
Page 19, line 41, at end insert (";and
(c) containing such recommendation for the restraint or reduction in the price specified as the Director considers justified.").
The noble Lord said: Amendments Nos. 53 and 55 are, again, concerned with reinforcing the prices aspects of Clause 13. We have discussed this matter at some length and I do not intend to detain the Committee at this late-ish hour with a further long speech. Therefore, I beg to move.
Lord TREFGARNE: I shall try to follow the fine example of the noble Lord and speak very briefly. The purpose of these amendments is, we think, totally at variance with the underlying intention of Clause 13. The aim of investigations made under the clause is to explore the circumstances behind a particular price issue of major public concern, and to produce a public report 'on the facts. It is not the purpose of a price investigation to replace the mechanism of competition. If there is effective competition, then there should be no need to restrict prices; and that is a point which I think my noble friend Lord Trenchard has made a number of times already this evening. If a price investigation reveals evidence that a price is unjustified, the appropriate follow-up action is through the use of competition legislation; for example, under

711
the Fair Trading Act or the earlier provisions of this Bill dealing with anti-competitive prices. So I hope that the noble Lord will not feel inclined to press this amendment or No. 55.
Lord PONSONBY of SHULBREDE: I thank the noble Lord for his remark. I shall not press the amendment to a Division.
On Question, amendment negatived.
[Amendments Nos. 54 and 55 not moved.]
Clause 13 agreed to.
[Amendments Nos. 56 and 57 not moved.]
Clauses 14 and 15 agreed to.
Clause 16 [General Provisions as to reports]:
9.48 p.m.
Lord MOTTISTONE Lord MOTTISTONE moved Amendment No. 58:
Page 21, line 36, at end insert—
(" ( ) Before reports are made under sections 3(10), 8(1), 11(8) and 13(5) above, the Director or the Commission shall make available to the person or persons who are the main subject of the report a final draft of it. The person or persons concerned may within 72 hours make representations to the Director or to the Commission with regard to accuracy both of the detail and of the general sense of the report. In the event that agreement cannot be reached on any corrections to the report that may appear necessary a note to this effect shall be appended to the report.")'
The noble Lord said: One of the most serious difficulties that companies had with Price Commission inquiries was that they were conducted quickly by staff with limited experience of business and no knowledge of the company concerned. Your Lordships who were here when we were discussing Clause 1 will have heard very expert advice on that point by my noble friend Lord Boyd-Carpenter. There can also be difficulty over conflicting needs. There is the need for speed in inquiries, so as to cut to a minimum the massive diversion of effort by company management, with its resultant cost, which can quite readily run to millions of pounds. On the other hand, there is an equally pressing need for the inquiry to be done sufficiently thoroughly and expertly to give all concerned a truly fair picture of the relevant state of affairs.
This is a genuine problem which applies whenever you have a public body which is required to so something quickly, and whose staffing is limited, by whatever means. To that extent, it is not a political issue, though the Price Commission, which was perhaps wrongly conceived by noble Lords opposite, pointed this out particularly clearly. Because the Price Commission was required to give emphasis to speed, experience showed that some of its reports tended not to make a fair and accurate comment, which was very unfair on the companies that were investigated. The purpose of my amendment, therefore, is to give companies being investigated a final
714
say about the overall accuracy of the various types of report which may be made under this Bill. The amendment does not seek to prolong any argument unduly and, in the last resort, merely seeks to make provision for the recording of such an argument where one takes place. I hope that that point was taken up by the Government and noted by them when they read my amendment, for I suggest that that makes it more tolerable for them to accept. Otherwise, it could well be very difficult for them. I therefore hope very much that the Government will be disposed to give favourable consideration to Amendment No. 58, which I beg to move,
9.51 p.m.
Lord TREFGARNE: I am conscious of the fact that we have accepted only one amendment this evening. Although I will not reveal what is in my brief for the rest of the evening, I am afraid that I cannot add to that small tally with this one. I can, however, assure the Committee that where matters of fact are concerned the regular practice of the commission is to check all factual material concerning companies with the companies themselves. This procedure will be followed also in investigations under the Bill. The Director General will follow a similar procedure in relation to his preliminary investigations and report.
So far as the conclusions of the commission are concerned, it is of course right that firms should have a full opportunity to make their case to the commission. I understand that the procedure of the commission is to advise the firms concerned in writing of the issues which they consider relevant and of any complaints against them. Firms are given every opportunity to comment. The Director General's own investigations into anti-competitive practices are intended to be quick, preliminary and informal. Nevertheless, firms under investigation will have ample opportunity to make their views known. But under the legislation the commission and the Director General must ultimately be responsible for their own conclusions.
The procedure suggested in the amendment is akin, I suggest, to permitting the

715
parties to a case in a court of law to be given the right to hear the judgment three days in advance and to have the opportunity to overturn it before it has been delivered. I hope your Lordships will agree that that is not appropriate.
Earl DE LA WARR: I understood that the purpose of the amendment was to enable the facts to be ascertained and not the judgment. I suggest—and I do so from very considerable experience of no fewer than two Price Commission investigations—that an investigation like this can, with the best will in the world, very easily fall into the trap of failing, in the short time that it has available to it, to pick up all the facts. I believe therefore that it is enormously for the benefit of the Director to have the opportunity to discuss with the firm concerned whether all the facts are right before he publishes them. I have known cases, admittedly with the Price Commission, where the Price Commission rather made fools of themselves because they had not bothered to check their findings with the company concerned.
I feel therefore that it would be to the advantage of both sides if this amendment, or the purpose behind it, were to be agreed to. It may be that the Government will wish to deal with it in some other way, but I hope that they will respect and accept what my noble friend Lord Mottistone has suggested.
Lord TREFGARNE: I am sorry to disappoint my noble friend, but I am afraid that I cannot do so. As I said earlier, the sort of procedure proposed by my noble friend is akin to getting a sneak preview of the judgment in a court of law. That is not, I think, the sort of proposal that ought to commend itself to your Lordships. To pick up a point made by my noble friend Lord De La Warr, may I read from the amendment tabled by my noble friend Lord Mottistone? He says in the second sentence:
"The person or persons concerned may within 72 hours make representations to the Director or to the Commission with regard to accuracy both of the detail and of the general sense of the report."
In other words I think my noble friend's amendment provides almost for a veto of
716
the report, at least with the provisions that he provides for.
Lord ROSS of MARNOCK: I am sure the noble Lord appreciates that in Scotland at least in a public inquiry a reporter is appointed by the Secretary of State for Scotland and the first thing he does, before he delivers his finding, is to send out to the parties concerned a statement of fact. If that is all that is required there is something to be said for it, but by what the Minister said latterly it may well be that he is going a bit beyond that in respect of this amendment. However, there is precedent for a statement of fact.
Earl DE LA WARR: The noble Lord, Lord Trefgarne, again spoke about a judgment in a court of law. I think there is no suggestion of that: it is simply giving both sides the opportunity to make sure that the facts are right, not the judgment. That is why I said that if the Government will accept the spirit behind this amendment they may see their way to being able to do something about it at Report stage without in fact accepting the wording of this amendment. May I have any hopes of that?
Lord TREFGARNE: I said right at the outset of my remarks that the Director General—and indeed the commission—will take every opportunity during the course of their investigations to make sure that the facts which they are relying upon are accurate. I am afraid I cannot give my noble friend any undertaking to consider this matter further before the next stage.
Lord MOTTISTONE: I regret the note on which my noble friend Lord Trefgarne ended both his first reply to me and also to my noble friend, with all this business about judgments and vetoes and so on. The earlier part of his statement was most acceptable and understanding and I hope that it actually happens. One is always slightly worried—and this applies to both sides of the House—about allowing things not to be put into an Act of Parliament and relying on the goodwill of public bodies, which in

717
the event do not always reveal that goodwill. I hope the Director General and the people running the commission will be made aware for all time of the remarks of my noble friend in the earlier part of his statement.
As to the judgment aspect of it, if I may say so I think that was a bad simile, rather beneath the normal standard of the noble Lord, Lord Trefgarne. It is not like a judgment. As my noble friend has said, it is just a question of making sure that the facts are right because, as he has had experience, as the noble Lord, Lord Boyd-Carpenter, has had experience and as companies with which I am associated have had experience, when that confounded Price Commission reported, the facts were not always right. This was not because the Price Commission was wicked; it may have been stupid but it was not wicked. It was because it did not have time to get them right. If one puts in a lot of young men who are inexperienced in business to have a quick look at a business which has been running for centuries and to try to pick up in a short time how it works, it is really an impossible task.
That is the sort of thing I am afraid will happen, not so much with the Monopolies and Mergers Commission, because it takes a relatively long time to do its investigations anyhow and it has more experience in this area. I know that it will be informal: the trouble with informality, splendid though it is in theory, is that it can get too informal and the result is that one does not get an accurate picture.
The object of this amendment is to give an opportunity for an accurate picture to be produced. This is not a question of fiddling with the judgment: it is making sure that the facts are right. As to the question of the veto, which the noble Lord, Lord Trefgarne, suggested, the whole point of the last sentence of my amendment is to take away any suggestion that there should be a veto. There is no question of the accused person in the dock having a veto: it is just a question of trying to get the facts right. If they cannot agree, for very good reasons, it seems only reasonable if there has been a cause for this to arise, for it to be recorded so that the Secretary of State, when he eventually comes to read it, will say "Ah, there is something
718
that is not quite right". It can make a tremendous difference to the interpretation of what a public body or company is doing, whether it really is being anti-competitive, if the facts are not quite right. As my noble friend Lord Trenchard knows, the difference between a competitive situation and an anti-competitive situation can be a very narrow one, so facts are going to be very important.
As my noble friend Lord De La Warr says, will it be possible for the Government, quite understandably not accepting my wording, to take this away, and to say they will have a look at it with a possible view to having something like it, which gives this strength? —because one is trying to strengthen these reports so that they may mean something. They are going to be used, we are told by noble Lords on the Front Bench, as the basis of guidance; these reports will be published so that people can learn a sort of case law; so it is particularly important that they should be accurate and based on facts. At the same time, they have got the problem as I said in my opening remarks on this subject, of trying to produce firm facts when they have not got very much time to put the facts together. So I do hope that perhaps noble Lords could have another think and say that they will have a look to see what they can do. If they cannot do anything perhaps they will have a good explanation for it at the nest stage, and I will have another "bash". I do hope they can do something for me before I finally take a decision.
Lord TREFGARNE: I am reluctant to mislead my noble friend. The fact is that his amendment goes further than asking for a discussion of the mere facts. His amendment says "both of the detail and of the general sense of the report", and that really goes a good deal wider than the effect of the arguments my noble friend has deployed. I said earlier, and I repeat, that where matters of fact are concerned the regular practice of the commission is to check all factual material concerning companies with the companies themselves, and this procedure will be followed by the Director in his investigations under this Bill. If my noble friend insists that I think about it again I will do so, with little hope that I shall reach any different conclusion.
Earl DE LA WARR: I am sorry to press this point. The noble Lord said that the facts would be checked. What we are asking for is that the company concerned see the draft of the report in which the facts are stated and they check that.
Lord TREFGARNE: I am aware that is what my noble friend has asked for, and I am afraid I cannot agree to it.
Lord MOTTISTONE: I am not quite clear if the noble Lord said he would, if I pressed him, look at it again but is not going to agree. That seems rather pointless. Is he going to look at it again or not?
Lord TREFGARNE: I will look at it again but I am not prepared to agree to it on the terms defined in the amendment.
Lord MOTTISTONE: I am very sorry to keep this going. I have said that I quite accept, as one always does when one produces amendments, that the wording is not quite right. It is the general overall sense of this amendment that one wishes to have reconsidered, at the highest level perhaps I might ask.
Lord TREFGARNE: I really do not think I can go any further. The noble Lord keeps on pressing me, but I think I have made the point quite clearly. I will think about what I have said and maybe I will change my mind, but I am very unlikely, I think, to do that. I am prepared to think about it, but without any commitment at all that I will reach any different conclusion.
Lord MOTTISTONE: I thank my noble friend very much for being so concessionary in the end, and with that I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 16 agreed to.
Clause 17 [Laying before Parliatnent and publication of reports]:
[Amendment No. 59 not moved.]
10.5 p.m.
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 60:
Page 22, line 8, leave out ("such a report") and insert ("a report made to him under section 8(1), 11(8) or 13(5) above").
The noble Lord said: I beg to move Amendment No. 60. This is merely a technical amendment which makes clear that the procedures in Clause 17(3) of the laying of reports when Parliament is not sitting apply equally to the reports made under Clauses 8, 11 and 13. I beg to move.
[Amendments Nos. 61 and 62 not moved.]
Clause 17, as amended, agreed to.
Clause 18 [Information and advice about operation of Act]:
Lord AIREDALE Lord AIREDALE moved Amendment No. 63:
Page 22, line 41, leave out ("such") and insert ("information as to those courses of conduct which in his opinion constitute anti-competitive practices and such other").
The noble Lord said: This is the amendment to which I referred briefly during the debate on the amendment of the noble Lord, Lord Jacques, when the noble Lord sought to advocate a code of practice. The reason I put down this amendment was that I had observed that, in the Standing Committee in another place, the Minister had shown no enthusiasm for a code of practice and it occurred to me that, by this amendment, the same objective could be attained by a different route; the objective being to give the Director an opportunity to address himself to the general public in a case where it had come to his attention that a practice was being conducted which he had decided was an anti-competitive practice within the meaning of the Act, but he was aware that the general public did not realise that it was an anti-competitive practice and he therefore wished to address himself to the public, to explain the matter in the hope that the people who were minded to adopt this practice or to continue it would stop doing so.
I listened very carefully to the Government's arguments against the code of practice put forward by the noble Lord Lord Jacques. It seemed to me that there were two limbs to the Government's argument and I shall take them one at a time. The first was that the difficulty about a code of practice was to make it comprehensive. This amendment does not seek to make anything comprehensive

721
at all. It is an amendment to Clause 18 which is intended to provide the Director with an opportunity to make a series of ad hoc pronouncements and address them to the general public. After all, that is what it says:
"Such…advice as it may appear to him [the Director] expedient to give the public in the United Kingdom about the operation of this Act".
Nobody would suppose that any one of these announcements made to the public by the Director under this clause would, by itself, be comprehensive: it would be only one of a series of pronouncements.
The second limb of the Government's argument was that the appropriate vehicle for the Director to convey this information to the public was by means of his annual report. I do not know precisely the distribution of the average annual report made to Parliament, but I very much doubt whether very many copies of annual reports get into the hands of the general public. I should have thought that Clause 18, directing itself directly to the general public, was the perfect vehicle to enable the Director to make this very wise announcement that, in a given case, a practice has been found to be anticompetitive, but is not generally realised to be so and he wishes the general public to know about it. I should have thought that there could be no argument against an amendment of this kind and that it was exactly what was required as an alternative to the code of practice. I beg to move.
Lord TREFGARNE: I do not think it would be helpful to require—and that is the operative word—the Director General to provide information about courses of conduct which he considers anti-competitive. This would starkly conflict with the flexibility which is at the heart of the legislation.
However, as we have already indicated in another place and, indeed, here this evening, the Director General does anticipate using his annual report to provide some guidance on anti-competitive practices in general, the circumstances in which they arise and the manner in which they affect competition, based on the experience of investigations under the Bill and indicating any particular practices which caused concern and which it might be appropriate to investigate in the future.
722
With regard to the point made by the noble Lord about the distribution of the annual report, I think that it will be distributed among those people most anxious to know about the thoughts of the Director General in this matter; that is, industry, commerce, trade associations and the like, We really explored this matter very fully when we were considering the amendments put forward by the noble Lord, Lord Jacques, and others. I believe that the reports to which I have referred will be helpful, both to industry and indeed to the consumer. In view of what I have said, I hope that the noble Lord will not wish to press his amendment.
Lord AIREDALEM: Having heard that reply, I am very much more inclined to press the amendment than I was before. The Government must make up their minds. I understood the noble Lord to say just now that it is not desirable that the Director should make pronouncements about anti-competitive practices, but that the annual report would be the occasion on which he would make pronouncements about such practices. I do not understand this. What is the mystery about this? Surely the point of all this is to let people know what are the anti-competitive practices, because in that way they can be discouraged from pursuing or initiating them. Therefore, if we have a clause which says that the Director shall address himself to the general public about certain matters, why not include in that a "non-comprehensive" pronouncement from time to time about some practice against which people ought to be warned?
Lord TREFGARNE: I do not think that there is such a thing as a "non-comprehensive" announcement in this context. Anything that the Director General says will be taken as written on tablets of stone, and I think that that is wholly undesirable. We developed this point very fully indeed when the noble Lord, Lord Jacques, moved his amendment. I hope that the noble Lord will now be content.
Baroness SEEAR: I must support my noble friend. It is quite different from the problem of the code of practice. I was very much on the side of the noble Lord, Lord Trefgarne, over the question

723
of the code of practice, because that creates an idea that one has now been told what are the anti-competitive practices and people will believe that that is a comprehensive list. But my noble friend is saying that as the experience of the Director General develops in carrying out anti-competitive practices, from time to time he clarifies issues as they arise in order to give people an illustration. No one is going to be so stupid as to think that if he has one illustration of a particular case which has been established as a competitive practice in a given context, that is a comprehensive list. It is the comprehensive list that was the objection to the code of practice put forward in the previous amendment.
Lord TREFGARNE: The noble Lord, Lord Jacques, did not persist with his proposal for a comprehensive list. Some guidelines were all he was asking for. What we said was that the Director General will record in his annual report the outcome of investigations that he has made during the year. I think that that will be sufficient guidance for those who are seeking guidance in this matter. May I say again that this is the third debate at least this evening we have had on this subject. Your Lordships may think that we have now gone round and round this topic and ought to leave it for another one.
Lord AIREDALE: I have the greatest respect for the Minister, but I am really sorry to hear him speak as he has just been speaking. We had a debate on codes of practice. I mentioned for the benefit of noble Lords that it so happened that I had an amendment down to a much later clause which was an alternative solution to the problem facing the noble Lord, Lord Jacques, but I carefully did not use that occasion to develop any argument at all regarding this amendment we are now discussing. Neither Government spokesman answering the noble Lord, Lord Jacques, referred at all to this amendment. Not one word do I remember being addressed to this amendment on that occasion. It is not good enough to say that this matter has been fully discussed. It has not.
Lord TREFGARNE: The noble Lord disclaims all parentage as far as the noble Lord, Lord Jacques, is concerned with
724
respect to this amendment, but noble Lords may like to read the amendment which the noble Lord, Lord Airedale, is now asking us to consider. I quote:
"…and insert ('information as to those courses of conduct which in his opinion—
that is, the Director's opinion—
"constitutes anti-competitive practice and such other')".
I am at a loss to distinguish between what the noble Lord is now proposing and what the noble Lord, Lord Jacques, was proposing when he spoke earlier.
Lord AIREDALE: Then we shall have to take time with me explaining to the noble Lord what he did not gather from the speech of my noble friend Lady Seear who just now was at great pains to point out that a code of practice was something which was probably comprehensive, but an ad hoc pronouncement about one particular—
Lord TREFGARNE: Will the noble Lord give way again?
Lord AIREDALE: In a moment, but I am going to finish the sentence. An ad hoc pronouncement about one particular practice which the Director General wished people to know was considered anti-competitive could not by any stretch of imagination be regarded as a comprehensive list in the sense that Lord Jacques' code of practice might be regarded as a comprehensive list.
Lord TREFGARNE: I am obliged to the noble Lord for giving way. The noble Lord, Lord Airedale, is asking for the Director General to give information as to those courses—not in the singular but the plural. In any event, the noble Lord, Lord Jacques, ended up asking for guidelines, which is a different thing from a code of conduct or a code of practice. May I say again that I think that what the noble Lord is now proposing is very much in line with what the noble Lord, Lord Jacques, was finally proposing.
Lord AIREDALE: Very well, I do not think we have seen the last of this one. We shall be coming back to this on Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 18 agreed to.
Clause 19 [Restriction on disclosure of information]:
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 64:
Page 23, line 28, leave out from ("enabling") to ("the") in line 31 and insert ("information obtained under certain other enactments to be used for facilitating the performance of functions under this Act").
The noble Lord said: There are presently provisions in the Fair Trading Act 1973, the Consumer Credit Act 1974, the Restrictive Trade Practices Act 1976 and the Estate Agents Act 1979 restricting the disclosure of information obtained under those enactments except for proper and relevant purposes. Clauses 19(4) amend those enactments to enable information obtained under them to be used for the exercise of functions under the Bill.
The purpose of this amendment is to make it clear that the effect of the amendments to the enactments listed will be to enable any amendments obtained under their provisions to be used for the purpose of facilitating any of the functions under the Bill and not merely, as the opening words presently suggest, to enable the Director to use such information. This amendment is therefore purely clarificatory and not substantive. I beg to move.
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 65:
Page 23, line 32, at end insert—
(" ( ) at the end of paragraph (aa) of the proviso to section 47(2) of the Agricultural Marketing Act 1958 there shall be added the words "or the Competition Act 1980";
( ) at the end of paragraph (aaa) of section 23(2) of the Agricultural Marketing Act (Northern Ireland) 1964 there shall be added the words "or the Competition Act 1980 ";").
The noble Lord said: This amendment will enable information obtained under the Agricultural Marketing Act 1958 and the Agricultural Marketing Act (Northern Ireland) 1964 to be disclosed for the purposes of the Bill. It will be useful for this information to be available to the Director General or the commission if an investigation is being conducted into the practice relating to an agricultural marketing board. This will bring the Bill into line with the Fair Trading Act, where a similar provision already exists in relation
726
to monopolies investigations. I beg to move.
Clause 19, as amended, agreed to.
Clause 20 agreed to.
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 66:
After Clause 20 insert the following new clause:
Monopoly references by the Secretary of State alone
" . It is hereby declared that where it appears to the Secretary of State that—

(a) a monopoly situation exists or may exist as mentioned in subsection (1) of section 51 of the Fair Trading Act 1973 (monopoly references by Ministers), and

(b) the goods or services in question are of a description mentioned in subsection (2) of that section, and

(c) none of the Ministers mentioned in subsection (3) of that section has such functions as are mentioned in subsection (2) of that section in relation to goods or services of that description,

the Secretary of State may make a monopoly reference with respect to the existence or possible existence of that situation acting alone; and accordingly any reference which has been made in such circumstances by the Secretary of State acting alone has been made in compliance with that section."
The noble Lord said: Section 51 of the Fair Trading Act makes provision for monopoly references to be made by Ministers. References must be made by Ministers and not by the Director General in respect of those industries which are wholly or in certain circumstances the subject of statutory monopolies—that is monopolies arising from Government measures or which are controlled by a statutory body. These include the nationalised industries and certain agricultural products. Section 51(2) precludes the Secretary of State from making such a reference other than jointly with one or more of the Ministers listed in Section 51(3) who have functions relating to the particular industry.
There are, however, certain Government Ministers, notably the Secretaries of State for Trade, Energy and Industry, who are not listed in Section 51(3) as their functions were held by the old Secretary of State for Trade and Industry when the legislation was passed. While we believe that a reference can be made by the Secretary of State alone when there is no appropriate Minister with whom it

727
could be made jointly, it is possible that this could be open to challenge. The purpose of this new clause is to make it clear that the Secretary of State can and always could make a reference alone under this section if there is no appropriate Minister with whom he could make it jointly. I beg to move.
[Amendments Nos. 67 and 68 not moved.]
Clause 21 agreed to.
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 69:
After Clause 21, insert the following new clause:
Amendment of s. 137(3) of Fair Trading Act 1973.
" . In section 137(3) of the Fair Trading Act 1973 (definition of "the supply of services") there shall be inserted after paragraph (b) the following words:—
"and
(c) includes the making of arrangements for a person to put or keep on land a caravan (within the meaning of Part 1 of the Caravan Sites and Control of Development Act 1960) other than arrangements by virtue of which the person may occupy the caravan as his only or main residence"."
Clause 22 agreed to.
Lord PONSONBY of SHULBREDE Lord PONSONBY of SHULBREDE moved Amendment No. 70:
After Clause 22 insert the following new clause:
Exclusive Copyright Licences.
" . It is hereby enacted that:—
(1) The Restrictive Trade Practices Act 1976 shall have effect and be deemed always to have had effect as if it had been made with the addition, in Schedule 3 thereto, of the paragraph set out in Part 1 of Schedule 1A to this Act.
(2) The Restrictive Trade Practices Act 1956 shall be deemed always to have had effect as if it had been made with the addition of the section set out in Part II of Schedule 1A to this Act.
(3) The Fair Trading Act 1973 shall be deemed always to have had effect as if it had been made with the addition of the section set out in Part III of Schedule 1A to this Act."
The noble Lord said: I am afraid I cannot be quite so brief as the noble Lord, Lord Trefgarne, was in moving No. 69. This amendment—and associated with it is Amendment No. 75—concerns exclusive copyright licences. Until about two years ago it was generally accepted that exclu-
728
sive copyright licences did not fall within the ambit of the Restrictive Trade Practices Act 1976 and the Fair Trading Act 1973, as they did not constitute the supply of goods or services. However, it has recently been the bone of a contention that the grant of such licences falls within the ambit of those Acts, on the supposition that an author who grants a copyright licence to a publisher is factually depriving himself of the right to publish, and that that therefore is an anti-competitive practice. I could go on at some considerable length on this question. I understand that it is a matter which the Government might well feel minded to look at with favour, and therefore I will not speak at length on the amendment. I beg to move.
Lord TREFGARNE: We have considerable sympathy with the object behind the noble Lord's new clause and new schedule. There appears to have been a fairly general assumption until relatively recently that agreements relating solely to copyright were completely outside the restrictive trade practices legislation. However, as the noble Lord has said, some doubt has been cast on this assumption, specifically in the case of exclusive copyright licences. It is unlikely that all such licences are liable to registration, but it appears that they may be registrable where two or more parties carrying on business accept relevant restrictions within the definitions of the 1976 Act.
I agree that this matter requires urgent consideration. I am afraid that I am not yet in a position to accept the noble Lord's amendments, as the implications of their proposals need to be explored further, and indeed the drafting may also need some attention. But I can undertake that the question of copyright in relation to the restrictive trade practices legislation will be looked at very carefully before the Report stage and that, if at all possible, the Government will introduce their own amendments when we then consider the Bill.
Lord PONSONBY of SHULBREDE: I thank the noble Lord for his remarks. I understand that there are a number of legal problems involving the amendment, particularly in regard to the retrospective nature of it. In view of the undertaking

729
given by the noble Lord, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 23 agreed to.
Clause 24 agreed to.
10.28 p.m.
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 71:
After Clause 24, insert the following new clause:
Recommendations by services supply associations.
" .—(1) An order under section 11 of the Restrictive Trade Practices Act 1976 (restrictive agreements as to services) may provide that section 16(3) of that Act (recommendations by services supply associations to members about services) shall not apply to recommendations of such descriptions as may be specified in the order and an order under section 12 of that Act (information agreements as to services) may make similar provision in relation to section 16(5) of that Act (recommendations by services supply associations to members about furnishing information).
(2) Where—

(a) section 16 of that Act would (apart from this subsection) apply in relation to a recommendation by a services supply association within the meaning of that section, and

(b) if the sole term of the agreement for the constitution of the association were a term by which each member of it agreed to comply with that recommendation, the agreement would be excluded by the terms of the order from the operation of an order made, or having effect as if made, under section 11 of that Act which came into force after 21st March 1976 and before the coming into force of this section

subsection (3) of the said section 16 shall not apply and shall be deemed never to have applied in relation to that recommendation during the continuance in force of the order.
(3) Subsection (2) above shall have effect in relation to a recommendation made before the repeal of section 112(3) of the Fair Trading Act 1973 as if each reference to section 16(3) of the 1976 Act included a reference to that section.
(4) In the Table in paragraph 5 of Schedule 2 to the said Act of 1976 (time within which particulars of agreements and variations to be furnished under that Act)—

(a) there shall be added at the end of the first column of paragraph (f) the words "not being a variation which becomes subject to registration by virtue of an order under section 11 or 12 above"; and

(b) there shall be added at the end of the first column of paragraph (i) the words other than a variation to which (ii) below applies"; and

(c) after paragraph (i) there shall be added the following paragraph:—

"(ii) Variation of an agreement being a variation which extends or

Within 1 month from the day on which the

The noble Lord said: The purpose of this new clause is to correct a technical defect which had been identified in the exemption of recommendations by certain services supply associations from the Restrictive Trade Practices Act 1976. It was hitherto thought that where the Restrictive Trade Practices (Services) Order 1976 exempted categories of agreement made by these bodies, the exemption extended to their recommendations which fell in the same categories. However, there is now doubt as to whether the order did exempt these recommendations, or indeed whether the Act effectively conferred power on the Secretary of State to exempt recommendations in the first place. This defect was unfortunate. If it is possible to exempt categories of specific agreements made by services supply associations from the Act, it is only logical that there should be a power to exempt recommendations of the same category made by the body to their members.
Furthermore, associations which thought that recommendations that they made in good faith were exempt from registration under the Act may have been operating unregistered and therefore void agreements, thereby exposing themselves to civil actions from third parties. It is important that this defect should be corrected, and with retrospective effective.
The new clause is inevitably complex and I shall therefore say only a few words about it. It will ensure that the exclusions listed in the 1976 order in relation to recommendations shall have the effect originally intended. It will also ensure that for the future the Secretary of State may exempt categories of recommendations from the Act, as well as categories of agreement. I can assure your Lordships that the new clause does not restrict the Secretary of State under Section 11 in any way and would not prevent him, if he thought it desirable, from withdrawing any exemptions for agreements listed in the order, subject of course to parliamentary approval.
This is, as I have said, a technical amendment, but it is of considerable importance to members of services supply associations. It would be inequitable to them if the defect which has been detected in the law were not removed, and I therefore commend the new clause to your Lordships. I beg to move.
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 72:
After Clause 24, insert the following new clause:
Amendments to s. 19 of Restrictive Trade Practices Act 1976.
" .—(1) In section 19(1) of the Restrictive Trade Practices Act 1976 (which provides amongst other things that there is a presumption that a restriction or information provision is against the public interest unless the court is satisfied the removal of it would deny benefits to the public as purchasers, consumers or users of any goods)—

(a) the word "vendors" shall be inserted before the word "purchasers" in both places where it occurs, and

(b) the words "or other property" shall be inserted—

(i) after the words "users of any goods" in paragraph (b) and

(ii) after the words "users of goods" in the words following paragraph (h).

(2) In subsection (2) of that section ("purchasers", "consumers" and "users" to include persons purchasing, consuming and using for trade, business and public purposes) the word "'vendors'" shall be inserted before the word "purchasers'" and the word "selling" shall be inserted before the word "purchasing"."
The noble Lord said: Section 19 provides that the restrictions in an agreement shall be deemed to be contrary to the public interest unless they pass through one of the so-called "gateways" in paragraphs (a) to (h) and also satisfy the tailpiece to Section 19(1). Paragraph (b) provides that a restriction will pass through that gateway if its removal would deny certain benefits to
"the public as users of any services, or as purchasers, consumers or users of any goods in relation to which any services are supplied".
This amendment will make it clear that parties to an agreement before the Restrictive Practices Court may, in defending their agreement, plead benefits to the public arising from the purchase, consumption or use of property other than goods in relation to which any services are provided. It also provides that bene-
732
fits arising from the sale of property, including goods, may be pleaded. The amendment recognises a fact of life in the commercial world—that the providers of services do not perform their functions in relation to goods alone but also in relation to intangibles, such as securities, copyright and leases, all of which do not fall within the legal definition of "goods" but are included in the term "property". If such people are caught by the legislation, it is only fair to allow them to defend themselves as widely as can those providing services in relation to goods alone. It also recognises that the public may receive such benefits as sellers as well as buyers or users of property, including goods. I beg to move.
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 73:
After Clause 24, insert the following new clause:
Exemption of certain undertakings from Restrictive Trade Practices Acts.
.—(1) The Restrictive Trade Practices Act 1976 shall not apply in relation to any agreement by virtue only of restrictions being accepted or information provisions being made under it which are comprised in undertakings which have been—

(a) given pursuant to section 88 of the Fair Trading Act 1973, or

(b) certified by the Secretary of State under paragraph 9 of Schedule 11 to the said Act of 1973, or

(c) accepted under section 4 or 9 above.

(2) The said Act of 1976 and Part 1 of the Restrictive Trade Practices Act 1956 shall be deemed never to have applied in relation to any agreement by virtue only of restrictions being accepted or information provisions being made under it which are comprised in undertakings falling within paragraph (a) or (b) of subsection (1) above.
(3) In this section "agreement" has the same meaning as in the said Act of 1976.".
The noble Lord said: The Restrictive Trade Practices Act 1976 (which consolidated earlier legislation, including the Restrictive Trade Practices Act 1956) provides for the registration and subsequent investigation by the Restrictive Practices Court of agreements between persons in business in the supply of goods or services under which certain restrictions are accepted. "Agreement" is defined in the Act to include
"any agreement or arrangement whether or not it is intended to be enforceable…by legal proceedings • •"

733
In the light of this definition it is possible that, where undertakings are obtained following investigations by either the Director General into anti-competitive practices or by the Monopolies and Mergers Commission upon a monopoly reference, and where the undertakings are obtained at the same time from more than one person in relation to the same practices, if these undertakings restrict the supply of goods or services they may be liable to registration under the Restrictive Trade Practices Act 1976.
Since it is clearly inappropriate that such undertakings given in the public interest should be liable to registration and proceedings, the new clause exempts from the Restrictive Trade Practices Act 1976 any future undertaking given under the Competition Bill as enacted and under the Fair Trading Act 1973; and to avoid any doubt about their standing will exempt retrospectively undertakings already entered into under the Fair Trading Act 1973 or its predecessors. I beg to move.
Clause 25 [Orders and regulations]:
Lord TREFGARNE Lord TREFGARNE moved Amendment No. 74:
Page 27, line 29, leave out ("(1)") and insert ("(3) or (5)").
The noble Lord said: Under the Bill as drafted, Clause 25(3) provides for orders made under Clause 12(1) to be subject to negative resolution. Clause 12 orders are in fact made under subsections (3) and (5), not subsection (1), and the amendment corrects this small error. I beg to move.
Clause 25, as amended, agreed to.
Remaining clauses agreed to.
Schedule 1 agreed to.
After Schedule 1:
[Amendment No. 75 not moved.]
Schedule 2 agreed to.
In the Title:
Lord TREFGARNE Lord TREFGARNE moved Amendments Nos. 76 to 79:
Line 10, leave out from ("of") to ("the") in line 11.
Line 13, after ("1(3)") insert ("to exclude certain recommendations from section 16").
Line 13, after ("1(3)") insert ("and to amend section 19").
Line 14, after ("1976") insert ("and to exempt certain undertakings from the provisions of that Act and Part 1 of the Restrictive Trades Practices Act 1956").
The noble Lord said: Amendments Nos. 76, 77, 78 and 79 are all very minor, consequential amendments on the amendments that I have moved earlier. I beg to move them en bloc.
Title, as amended, agreed to.
House resumed: Bill reported with the amendments.

BRITISH OLIVETTI LIMITED BILL [H.L.]
Examiners Certificate that the further Standing Orders applicable have been complied with: Ordered to lie on the Table; Bill committed to an Unopposed Bill Committee.
EAGLE & GLOBE STEEL LIMITED BILL [H.L.]
Examiners Certificate that the further Standing Orders applicable have been complied with: Ordered to lie on the Table; Bill committeed to an Unopposed Bill Committee.
PROCEDURE OF THE HOUSE
Third Report from the Select Committee made and to be printed.