Sitting of 8 May 1956

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRAYERS
  PRIVATE BUSINESS
    ROXBURGH COUNTY COUNCIL (ALE WATER) ORDER CONFIRMATION BILL
    Considered; to be read the Third time Tomorrow.
ORAL ANSWERS TO QUESTIONS
  EMPLOYMENT

    Carpet Trade, Scotland
    Mr. Prydeasked the Minister of Labour how many carpet trade workers were unemployed and how many were working short time in Midlothian and in Scotland, respectively, as at 16th April, 1956.
    The Minister of Labour and National Service (Mr. Iain Macleod): On 16th April the number of carpet trade workers wholly unemployed was 259 in Scotland and 51 in Midlothian. The number on short time in the week beginning 16th April was about 3,000 in Scotland and 60 in Midlothian.
    Mr. Pryde: Is the right hon. Gentleman aware that the situation has been accentuated since that time? Is he aware that the cheapest form of carpet in Britain is produced in this area and that it is the only place where tapestry is made? Is he further aware that our foreign markets have been closed and home markets are being filled by the importation of Belgian cotton carpets, which are sold at prices against which our workers cannot compete?
    Mr. Macleod: I think that recently there has been a slight, although very slight, improvement in the numbers of those on short time. The second and major part of the hon. Member's supplementary question is a matter for my right
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    hon. Friend the President of the Board of Trade, to whom the hon. Member already has a Question on the Order Paper.
    Mr. Woodburn: Has the right hon. Gentleman seen a report that a certain Scottish firm is opening a factory south of the Border? Does he take any steps to guide firms to places where there are unemployed, rather than to establish factories in places where there is already plenty of employment for the people who reside there?
    Mr. Macleod: In conjunction with my right hon. Friend the President of the Board of Trade, I always try to draw the attention of industrialists to places where there is a pool of labour. I have not seen the particular reference to which the right hon. Gentleman has referred. Perhaps he will draw my attention to it.

    Furniture Industry, Chigwell
    Mr. Biggs-Davisonasked the Minister of Labour how many persons engaged in the furniture trade and resident within the Chigwell urban district of Essex have been discharged from employment, or placed on short time, during the present year; how many have since been reemployed in the furniture trade; and how many are unemployed at the latest date for which figures are available.
    Mr. Iain Macleod: It is not possible to state how many of the workers employed in the furniture industry in adjacent areas who have been discharged or placed on short time since the beginning of the year are resident within the Chigwell urban district. On 16th April, 39 were registered as unemployed at the Chigwell Employment Exchange, of whom 30 were temporarily stopped.

    Automation
    Mr. Owenasked the Minister of Labour if he is aware that the introduction of automation in industry is giving rise to serious misgiving among the organised workers; and whether he is now in a position to make a statement.
    Mr. Woollamasked the Minister of Labour what action his Department is taking to consider the consequences of automation in the employment field.
    Mr. Leeasked the Minister of Labour whether he is now able to state

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    when the Department of Scientific and Industrial Research Report on the Effects of Automation will be ready; and whether in view of the industrial unrest now arising, he will now indicate the policy of Her Majesty's Government on the matter.
    Mr. Iain Macleod: Technological development has been for many years a feature of our economic life, and automation is its latest and most novel form. It is welcomed by the Government and responsible opinion on both sides of industry as essential to our future efficiency and, therefore, to the continuance of full employment. We should also recognise the very natural anxiety that its introduction may cause. There are bound to be employment problems involving the redeployment of labour. New skills will certainly be required.
    These problems can be satisfactorily resolved if the Government and both sides of industry work in close co-operation with each other. It is essential that firms which are contemplating the introduction of automation should in their planning consider from the beginning how it will affect their workers and bring them into early discussion. On their side the Government accept a continuing responsibility for maintaining the general level of demand. They will also help to meet the special effects in the employment field of technological changes by making provision, as they have already announced, for a wide extension of technical education; by encouraging opportunities for training and by assisting, through their employment services, workers who have to change their employment. These problems are being studied by universities and other bodies and by the Department of Scientific and Industrial Research.
    The Report by the Department of Scientific and Industrial Research is completed and will be issued this month. In the light of that Report I intend to discuss the whole question with representatives of the employers, trade unions and nationalised industries on the national joint advisory councils and, as appropriate, my colleagues will have similar discussions with other advisory bodies.
    The Government believe that if all those concerned play their part in this way these new changes, with their unlimited possibilities for the future, will prove of
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    immeasurable benefit to the prosperity and happiness of the nation.
    Mr. Owen: I am sure the House welcomes those observations on this important matter. Is the Minister aware that organised workers are by no means limited to the philosophy of the Luddite movement these days but welcome the development of a new technique in modern industry? However, they are seriously concerned with the probable economic and social effect of the new machines unless there is—as the Minister has indicated—a real possibility of early consultation between both sides of industry, with Government co-operation. Is he not aware that that may ensure the limitation of the effects of automation on the people concerned?
    Mr. Macleod: I recognise what the hon. Member has said. These consultations from the very beginning are of the first importance. Of course, there are anxieties, most natural anxieties, in this field, and we and, I am sure, the representatives of the employers and the trade unions want to do everything we can to meet them.
    Mr. Russell: Has my right hon. Friend seen an article in today's Daily Mail which gives more information about what has happened with automation in the United States? Does he not agree that there is a great deal to be learned from that country about the effects of automation?
    Mr. Macleod: We have, of course, especially in my Ministry, studied the experience and the conclusions of other countries, but they are not exactly applicable, and we must work out our own solutions in the light of the special problems we have in these islands.
    Mr. Lee: Is the right hon. Gentleman aware that the statement he has made is encouraging but that it is pretty useless in the short term to expect employers and workers in any one factory to find a solution to the problem? Indeed, it is quite impossible at national level for trade unions and employers to do it. We welcome his statement of Government interest, but will he try to give us a considered policy statement on behalf of the Government as soon as he can, because it is quite wrong to believe

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    that a sort of Pontius Pilate attitude of washing one's hands of the matter is possible in these circumstances?
    Mr. Macleod: I have never said or thought that the Government have no responsibility in this matter. Of course we have, and I gladly recognise that. It is fair to say that this is a matter which, although it has come into prominence in the last few days, is not one of which Government agencies and Ministries have thought only in the last few days. The Report from the D.S.I.R., which is of the first importance—and an admirable Report it is—has been in preparation for about two to two and a half years. I am certain that when we have it—and that will be in a matter of only two or three weeks—we shall be able, in the light of that Report and with all the advisory bodies playing their full part, to feel our way towards a solution.
    Mr. G. Brown: Does not the Minister remember that in the debate we had recently on the employment situation he did wash his hands of this, saying it was a matter for industry and that the level of unemployment and short-time working were matters for the employers after talks with the workers? Is the right hon. Gentleman aware that we require something more than a statement that the Government are interested? We need some indication that the Government are planning to have the jobs available for the men who may be affected by automation. We need some indication that the Government are planning to arrange for the workers' transfer and for their travelling and for their new houses if they have to move from their present homes? Will the right hon. Gentleman tell us when he can say anything further about these practical matters?
    Mr. Macleod: I am sure the right hon. Gentleman does not wish to misrepresent what I said in the debate on the employment situation. We were dealing with the level of manpower in a particular industry, and I said that it could not be laid down by the Government unless there were direction of labour, which it was impossible to have. I have acknowledged over and over again in statements and in reply to Questions that the Government have a responsibility, and a continuing responsibility. So far as the rest of the right hon. Gentleman's
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    supplementary question is concerned, it is precisely this problem that we are studying and have been studying for some time, and particularly now in the light of the very informative reports, including the recent one from the D.S.I.R.

    Standard Motor Company, Coventry (Strike)
    Mr. Mossasked the Minister of Labour if he is aware of the strike of workers at Standard Motors in Coventry owing to a dispute caused by the introduction of automatic processes; and, in view of the concern of the workers about the impact of automation upon their future livelihood, if he will make a statement.
    Mr. Iain Macleod: I am aware of the strike at the Standard Motor Company, Coventry, in support of a demand that instead of men being laid off short time should be introduced whilst one of the firm's factories is being retooled for the production of a new tractor. I understand that whilst a certain number of additional automatic processes will be installed this is only a part of the re-equipment of the factory and the installation of these particular machines is not the cause of the dispute.
    Mr. Moss: Is the right hon. Gentleman aware that at two mass meetings only two persons voted against the continuance of the strike, even though it is based upon short-time working instead of redundancy. which would mean a reduction in living standards all round? Is he further aware that the issue immediately at stake is what shall happen over the installation of new plant over a period of about eight weeks, and that the introduction of automatic processes will rouse industrial unrest again unless principles can be applied which are agreed upon in advance and honoured by both parties?
    Mr. Macleod: I do not want to comment on the status of the strike. It is at the moment, of course, unofficial. I understand that ten unions are meeting at York tomorrow to discuss their attitude towards it. In spite of that, conciliation officers of my Department have been in touch with the management and the unions. We shall continue to do what we can. This relates to what I said in my main reply to the last Question. if any changes, whether they be by way of

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    automation or not, are to be introduced, it is absolutely essential that from the beginning the unions should be brought into the very closest consultation.

    Engineering Industry (Equal Pay)
    Mr. Leeasked the Minister of Labour whether he will reconsider his decision not to hold an inquiry into the rates of pay of women employed in the engineering industry.
    Miss Leeasked the Minister of Labour what progress has been made in meeting the trade union request for a court of inquiry regarding equal pay for women; and what steps he has taken to expedite this.
    Mr. Iain Macleod: I informed the trade unions concerned on 26th April that I was unable to accede to their request for an independent inquiry into women's work in engineering. I can see no grounds for reconsidering this decision.
    Mr. Lee: Is it not the fact that the Ministry of Labour is now looked upon by both sides of industry as a sort of neutral court to which both can go when they are in great difficulty? May not the result of this refusal of the Minister be that, when issues of very great importance arise and he wishes to set up a court of inquiry, the trade union may refuse to co-operate in consequence of his action now? Will he again consider this matter? This is indeed a very great national issue. The Government themselves have accepted the basis of equal pay. Does it not appear that they are now backing out when the union asks for the implementation in private industry of what the Government have done in the Civil Service?
    Mr. Macleod: I shall be happy to accept that description which the hon. Gentleman has given of my Department. This, however, is a purely practical question, whether a court of inquiry set up by the Minister of Labour is the most appropriate body for what is, I recognise, an important and serious national issue. My answer to that would be that a court of inquiry is the last resort in the hands of the Minister of Labour, a resort which he uses extremely rarely, and it would seem to me, as I said in my letter to which I have referred, and which I am quite
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    ready to make public, wholly inappropriate for the sort of detailed inquiry that this would have to be.
    Miss Lee: Would the right hon. Gentleman prefer to have a strike in these industries if there is not equal pay? Is he aware that there is complete agreement between the men and women in industry on this point, and that there is a majority of Members of this House who support equal pay? Will he tell me what women can now do, and what others inside and outside the House can now do, who believe that this principle should be universally applied?
    Mr. Macleod: Naturally I should deem it a disastrous thing if there were a major strike in the engineering industry of this country. That, of course, is common ground. As I said, this is purely a practical issue about what the best way of resolving this may be. I cannot see that a court of inquiry set up by the Minister is the appropriate body. Indeed, in response to that letter the union is now asking the Federation whether it will meet to discuss the possibility of setting up such an inquiry within the industry itself, which is what I suggested.
    Miss Bacon: Is the right hon. Gentleman aware that equal pay is regarded by professional women not as the end but as the beginning? Will he therefore use his influence and do evertyhing he can to see that the example of the Government and of the local authorities is followed in industry?
    Mr. Macleod: That is a very important question, but undoubtedly it goes wider than this Question.

    Remploy Workers
    Mr. Willeyasked the Minister of Labour the number of disabled persons employed at Remploy factories on 1st January, 1956, and on the latest available date.
    The Parliamentary Secretary to the Ministry of Labour and National Service (Mr. Robert Carr): The number of severely disabled persons employed by Remploy factories was 6,006 on 3rd January, 1956, and 6,022 on 27th March, 1956.
    Mr. Willey: Whilst welcoming this slight increase, may I ask whether the

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    hon. Gentleman will assure the House that Remploy will not suffer from Government economies and that efforts will be made to increase still further the numbers employed in these factories?
    Mr. Carr: I think I can say that the pledge of a minimum of 6,000 still remains. Subject to its trading position, Remploy hopes to increase the number of severely disabled employees further during the course of the financial year.
    Mr. G. Brown: What does "subject to its trading position" mean? Is not this the frightening thing—that so often pledges about Remploy are hedged round with references to its trading position, which of course would justify almost anything? What does the hon. Gentleman mean by that remark?
    Mr. Carr: I have, in the course of an earlier debate, outlined all this in more detail. There is an agreement under which Remploy is certain of minimum guarantees for a five-year period. Coupled with that, there is the pledge of 6,000, which still stands. If the trading position allows Remploy to expand beyond 6,000 and yet keep within its five-year terms of reference from the financial point of view, the numbers can he increased.
    Sir L. Plummerasked the Minister of Labour how many workers of all grades are employed by Remploy at the latest convenient date compared with last year.
    Mr. Carr: The number of workers of all grades, both disabled and others, employed by Remploy at 27th March, 1956, was 7,971 compared with 8,357 at 29th March, 1955.
    Sir L. Plummer: I hope the Minister appreciates that this is disturbing news. However, may I ask whether the Government continue to regard Remploy as a social service and not only as a trading undertaking? Will the hon. Gentleman say how this level of employment will be affected by the Chancellor's proposed cuts?
    Mr. Carr: I have made a fairly categorical statement about the last part of the hon. Member's supplementary question in the course of my reply to the last Question. As to the earlier part, it is well known, and has been debated in the House, that there was a run-down in
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    Remploy during the last year, for reasons which were explained. That run-down was to a firm minimum, and we have not gone below that minimum. We are, in fact, now climbing slightly above it, as my earlier Answer showed.

    Byssinosis (Research)
    Sir I. Horobinasked the Minister of Labour whether he is aware of the recent medical and technological research into the question of byssinosis, particularly the dust extraction appliance devised by the Shirley Research Institute now on test at the Monarch Mill, Oldham; and what action he is proposing to take.
    Mr. Carr: Yes, Sir. My Department has been in the closest touch with these developments since their inception. Neither the medical nor the technological research is completed. As regards the former, work is proceeding on lines which were noted at the meeting of the Industrial Health Advisory Committee last month. As regards the latter, latest reports show that the dust extraction appliance to which my hon. Friend refers represents a great advance in this field and my Department is associating itself with this work by making further detailed dust estimations. The Joint Advisory Committee set up by the Chief Inspector of Factories on the conditions of work in the cotton trade is following the subject closely.
    Sir I. Horobin: While thanking my hon. Friend for that reply, may I ask whether he does not agree that there is already no serious doubt that this device is a great advance on anything that we have had before in preventing this distressing industrial disease? In view of that, can my hon. Friend assure the House that no time will be lost in taking the necessary steps to ensure that its use is as widely spread as possible in industry at the earliest possible date?
    Mr. Carr: We certainly agree that the tests appeared to show that this new apparatus is giving extremely good results. There are, however, two other appliances, based on different principles, which have recently been devised. The value of these has still to be determined. The Government are arranging to conduct detailed tests in order to compile records to compare the three methods, but I can assure my hon. Friend that we are aware

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    of the seriousness of the problem and that no time will be lost in making progress.
    Mr. T. Brown: Will the hon. Gentleman call the attention of managements and inspectors of factories to these appliances and recommend that wherever there is excessive dust they should be installed?
    Mr. Carr: I will certainly see that they know of it, though I am sure that they do so already, because it is the Factory Department of my Ministry that is particularly looking after and examining these latest developments.

    Shale-Oil Industry
    Mr. Prydeasked the Minister of Labour if his attention has been drawn to the serious situation at present confronting the workers in the shale-oil industry of Mid and West Lothian; and what steps he is taking to secure alternative employment for these workers.
    Mr. Iain Macleod: I understand that about 500 workers in the shale-oil industry will become redundant within the next three months. As opportunities for alternative work in the area are limited, workers in their own interests would be well advised to register with the local employment exchanges before their present employment is terminated.
    Mr. Pryde: Is the right hon. Gentleman aware that that answer does not give a full picture? In view of the urgency and magnitude of the problem in this home of the oil industry in the old world, will not the right hon. Gentleman consider urging upon the Government the setting up of a committee with powers to deal with this scheduled area which has had nothing done for it and where our oil industry has been drowned in a deluge of imported foreign oil?
    Mr. Macleod: I know a little about the problems of the shale-oil industry, and I have read carefully the interesting Adjournment debate which was initiated by the hon. Member for West Lothian (Mr. J. Taylor), a short time ago. I should like to study the hon. Member's suggestion about a committee of investigation into the industry, though I find it hard to think that such a committee would get over the difficulties which we all recognise the industry is facing.
    Mr. Lee: Now that the Notification of Vacancies Order is no longer applicable, would the right hon. Gentleman do what he can to give special notice to these people that they should go to the employment exchange in order to ensure that their lack of employment is known? Is it possible, within the Distribution of Industry Acts, to get Government factories erected in these areas so that industry may provide alternative employment?
    Mr. Macleod: We are doing what we can to encourage people to register early, and also to provide within the area alternative work for them, but I am bound to say that is a rather difficult problem. As for the second part of the hon. Member's supplementary question, I believe that point was raised in the Adjournment debate to which I have referred and was answered by the Parliamentary Secretary to the Board of Trade.

  SCOTLAND

    Prawn Fishing (Otter Boards)
    Major Anstruther-Grayasked the Secretary of State for Scotland whether he will now make a statement with regard to the discussions which have been taking place on the subject of fishing with otter boards for Dublin Bay prawns in the Firth of Forth.
    The Joint Under-Secretary of State for Scotland (Mr. J. Henderson Stewart): The request of the Firth of Forth Fishermen's Association for a modification of the law about the use of otter boards with seine nets for prawn fishing has been discussed with its representatives. The Association has agreed to co-operate in experiments designed to test this and other methods of catching and their effect on the stocks of white fish.
    Major Anstruther-Gray: Are we to understand from that reply that we are well on the way now to a solution of that problem?
    Mr. Stewart: I think that that is a proper deduction. The fishermen are co-operating very readily with us.
    Mr. Hector Hughes: Has the hon. Gentleman consulted the Foreign Office about this important international problem?

    Fisheries Research Vessel "Explorer"
    Mr. Hector Hughesasked the Secretary of State for Scotland if he will make a statement on the work of the fisheries research vessel "Explorer" since her launching, indicating the results of her researches and the nature and extent of her contributions to our knowledge in the spheres of her research.
    Mr. Henderson Stewart: "Explorer" was taken over from the builders on 30th March and began research work at the beginning of May. She will be used mainly to collect information about the stocks of fish, their movement and surroundings, required for the study of conservation and other problems. The collection of information of this kind does not often yield quick results.
    Mr. Hughes: Having regard to the large capital sum spent on this establishment, does the hon. Gentleman realise that it is desirable to make frequent and regular reports on its work to the House? Will he arrange that that should be done?
    Mr. Stewart: As far as it is practicable, but this is necessarily a long-term process and I do not think that the House would be interested in too frequent reports.

    School Accommodation, Clydebank (Faifley)
    Mr. Benceasked the Secretary of State for Scotland what representations he has received respecting the inadequacy of school accommodation at Faifley, Clydebank.
    Mr. Henderson Stewart: None, Sir.
    Mr. Bence: Would the hon. Gentleman go into this matter? Is he aware that this is a new housing estate some way out of the burgh and many children have to be transported from the area to the main part of the town? This causes a great deal of difficulty in the area. The school is also at present overcrowded, and the overcrowding is increasing every term. Will the hon. Gentleman therefore inquire into this to see whether a temporary building can be provided and a start made on another school as soon as possible?
    Mr. Stewart: Yes, Sir. The hon. Member will know that approval was given in April this year to the building
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    of temporary huts at the school to provide 360 extra places. The authority has this in hand, and I shall be very glad to give the hon. Member the details.

    Northern Hospital, Dunfermline
    Mr. Hamiltonasked the Secretary of State for Scotland the ratio of staff per 100 in-patients at the Northern Hospital, Dunfermline; and the national average per 100 in-patients in Scotland as a whole for general hospitals having 50–300 beds.
    The Joint Under-Secretary of State for Scotland (Mr. J. Nixon Browne): The ratio for this hospital in March, 1956, was 100 total staff per 100 average patients, as against 93 per 100 in March, 1955. Figures for the whole of Scotland in March, 1956, are not yet available: in March, 1955, the ratio for general hospitals with 51–300 beds was 132 per 100 and for chronic sick hospitals was 75 per 100. Some of the work carried on in this particular hospital is appropriate to the latter, i.e. to the chronic sick, rather than to the former category.
    Mr. Hamilton: That was more or less the answer I received last week, but is the Minister aware that the Group Medical Superintendent, who is an authority on this question, has expressed alarm at the inadequacy of the staff in this hospital and in the West Fife hospital, and will he look into the matter to see whether something cannot be done to remedy the position?
    Mr. Browne: Yes, Sir, we will look again at the matter, but as far as we can see, the staffing seems to be about right.

    Potato Harvesting
    Major Anstruther-Grayasked the Secretary of State for Scotland whether he has now decided to accept the conclusion of the Committee on the Employment of Children in the potato harvest, that it is still necessary to exempt children from attendance at school to assist in lifting the potato crop.
    Mr. Henderson Stewart: On 22nd March a circular was sent to education authorities informing them that my right hon. Friend accepted the Committee's conclusion.
    Major Anstruther-Gray: Will my hon. Friend bear in mind that most people regard the decision of the Secretary of State on this matter as being very sensible in the circumstances?
    Mr. Woodburn: Is the hon. Gentleman aware that there are still many people who do not regard the attitude of the Secretary of State as a correct one, and is he further aware that the solution of this problem depends upon the invention of a machine which can deal properly with the harvesting of potatoes? Is the Minister prepared to ask his Department to step aside from pushing on automation with such speed in order to find out whether the scientists cannot discover a machine which will relieve children for their proper job, which is to be educated for the purposes for which the schools stand?
    Mr. Stewart: Yes, Sir. We recognise that the proper solution here is the provision of a suitable all-purpose machine, which my hon. Friend the Joint Under-Secretary will be dealing with on a subsequent Question. As to whether the decision of my right hon. Friend was right, there can be no question of that. If the right hon. Gentleman would agree to look at paragraph 33 of the Report of the Committee, he will find that it made a clear recommendation and conclusion, which we have accepted.
    Mr. Woodburn: The point is whether the Question and Answer do not show a certain amount of complacency in assuming that this matter can lie dormant.
    Sir J. Hutchisonasked the Secretary of State for Scotland what steps he is taking to promote research for the production of an efficient potato harvester.
    The Joint Under-Secretary of State for Scotland (Mr. Niall Macpherson): Research and development work is being actively conducted by the National Institute of Agricultural Engineering and its sub-station in Scotland at Howden. As the rose Committee said in its Report, "much time, thought, and money are being devoted by individuals, firms and Government agencies to the production of" such a machine. Every encouragement has been given by my right hon. Friend and he is keeping the problem under continuous review.
    Sir J. Hutchison: In view of the competition for these children's services both in education and in agriculture, does my hon. Friend recognise the urgency of the question? Has he considered co-operating in research with his English counterparts? Has he drawn in, for example, the Department of Scientific and Industrial Research or the Agricultural Research Council? Every avenue to discover a suitable machine should be explored.
    Mr. Macpherson: I think that the answer to all my hon. Friend's questions is, "Yes, Sir."
    Mr. T. Fraser: In appreciating the urgency of getting a really successful all-purpose potato harvester, does the hon. Gentleman not realise that the more progressive and forward-thinking farmers have for a good many years been using the elevator type of harvester, lifting two or three drills at a time, thus to a great extent saving the employment of children? Will he do his utmost to ensure that this improved type of harvester is used until such time as we can (let the all-purpose potato harvester to which his hon. Friend has referred?
    Mr. Macpherson: We shall be very glad to do what we can to ensure its use in appropriate circumstances, hut, as the hon. Member knows, it is not appropriate in all circumstances.

    Right-of-Way, Midlothian (Rosslyn Castle-Polton)
    Mr. Prydeasked the Secretary of State for Scotland if he will name the body responsible for maintaining the ancient right-of-way between Rosslyn Castle and Polton in Midlothian, and if he will insist on its being satisfactorily maintained for public use.
    Mr. J. N. Browne: I understand that Penicuik District Council, which has power to repair and maintain public ways under Section 29 of the Local Government (Scotland) Act, 1894, is having this path surveyed.
    Mr. Pryde: Is the Minister aware that this is one of the most beautiful spots in southern Scotland, which could be improved a thousand per cent, if the Rivers Pollution (Scotland) Act were being operated as it should be? Is he also aware that Rosslyn Glen is of inestimable

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    value for geological research but is a danger to public use if it is not completely maintained, because tourist traffic from all over the world appreciates its beauties?
    Mr. Browne: I can assure the hon. Gentleman that this matter is being most carefully looked at. In fact, the Penicuik District Council received a complaint from the Scottish Right-of-Way Society about this path six months ago, and remitted the matter to two members of the council to make a survey. The members have not yet found it possible to report back to the district council, which, however, has reported that two public-spirited persons have taken hand saws and have removed the trunks of trees which were blocking the path.

    Milk Production (Costs)
    Mr. Emrys Hughesasked the Secretary of State for Scotland what investigations he made into the additional costs of milk production in Scotland since 1953 before fixing the recent Price Review.
    Mr. N. Macpherson: The information on costs of milk production considered at the recent Price Review related to changes in costs in the United Kingdom as a whole during the preceding year up to January, 1956. The figures are based on information obtained from independent agricultural economists at the universities and agricultural colleges and were agreed between the Government and the National Farmers' Unions.
    Mr. Hughes: Is the Minister aware that these researches are not at all approved of by the small farmer and that they continue to look into this matter more in anger than in sorrow? Does the hon. Gentleman not think that it is time he carried out a special investigation into the plight of the small farmers in this matter?
    Mr. Macpherson: The costs of production of milk by small farmers vary by as much as 100 per cent., some being twice as much as others, and it would be difficult to take all cases of this nature into consideration.

    Local Authorities (Loans)
    Mr. Emrys Hughesasked the Secretary of State for Scotland how many requests to borrow he has received from
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    local authorities during the last three months; and how many of these he has refused.
    Mr. J. N. Browne: My right hon. Friend's Department has dealt with 756 applications for borrowing consent received from local authorities during the three months ended on 30th April last: 79 of the 756 applications have been refused.
    Mr. Hughes: Is the Minister aware that in Ayrshire the Minister is refusing permission to local authorities to borrow for necessary alterations to the sanitary departments of their village halls, and does the hon. Gentleman not think that it is carrying this economy business rather far?
    Mr. Browne: The refusal to grant approval for sanitary and water work has only been made in 35 out of 144 cases. If the hon. Gentleman will let me have particulars, I will look at the matter again.
    Mr. Rossasked the Secretary of State for Scotland how many protests he has received from local authorities, following the issue of Circular 8802 by the Scottish Home Department.
    Mr. J. N. Browne: Three, Sir.
    Mr. Ross: Does not the hon. Gentleman think he has adequate powers to deal with local authority borrowing without continuing this penal rate of interest?
    Mr. Browne: That is a matter for my right hon. Friend the Chancellor of the Exchequer.
    Mr. Ross: Has the Secretary of State recently been discussing it with Scottish local authorities? What have they to say about it?
    Mr. Browne: All steps are being discussed with local authorities in Scotland.

    Road Accidents (Drunkenness)
    Mr. Hannanasked the Secretary of State for Scotland if he will state separately the number of people killed and injured in each of the years 1953, 1954, and 1955, in incidents where a driver was drunk in charge or under the influence of alcohol.
    Mr. Henderson Stewart: The numbers of persons killed or injured in Scotland in accidents where a driver was subsequently convicted of being drunk in

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    charge or under the influence of drink or a drug were as follows:—In 1953, eight persons killed and 87 injured; in 1954, four killed and 109 injured; in 1955, seven killed and 116 injured.
    Mr. Hannan: Is the hon. Gentleman aware of the growing concern amongst the public and police authorities in Scotland at the mounting number of innocent victims of this road carnage? Has his attention been drawn to the criticism of the inadequate and farcical penalties which are being imposed, and can he not do something about it?
    Mr. Stewart: Yes, Sir, we are indeed, and it is without any doubt a very distressing problem. We are considering what could be done.
    Mr. Stokes: May I ask the Minister, as a Sassenach, and regardless of whether this happens in Scotland or England, whether he does not consider that a man who is found drunk in charge of a car should have his licence taken away from him, if not for life, at least until he forswears the use of alcohol? What does the hon. Gentleman think would happen to an engine driver found drunk in charge of an engine?
    Mr. Stewart: I take careful note of the right hon. Gentleman's Sassenach intervention.

    New Hospital, Dundee
    Mr. G. M. Thomsonasked the Secretary of State for Scotland when it is proposed to start work on the new hospital for Dundee.
    Mr. J. N. Browne: I am afraid I cannot give a date for the start of building work on this very large project. An architect has, however, been appointed to enable a start to be made on the planning work, which will in itself take several years to complete.
    Mr. Thomson: Is the Minister aware that his reply is rather staggering? This important hospital has been in the blueprint stage for some years, and it is over twelve months since the Secretary of State announced that definite plans were being proceeded with? Could he not be more precise about when building is to start?
    Mr. Browne: I appreciate that this is an important project and that it ought to be proceeded with at the earliest date,

    1000
    but having regard to all the circumstances, it is impossible to envisage a start before 1960 to 1961.

    Highlands (Capital Development)
    Mr. G. M. Thomsonasked the Secretary of State for Scotland if he will make a statement of the Government's policy towards capital development in the Highlands in the light of the representations made to him by the Highland Advisory Panel.
    Mr. Henderson Stewart: While proposals for capital investment in the Highlands must be considered on their merits, my right hon. Friend will certainly bear the Panel's recommendation in mind.
    Mr. Thomson: Is the Minister aware of the very strong words used by the Chairman of the Highland Advisory Panel, Lord Cameron, about this matter? Is he aware that Lord Cameron said there was a strong case for exempting Highland development from the effects of the Government's credit squeeze? Is the hon. Gentleman further aware that both the Glasgow Herald and the Scotsman were extremely caustic about the policy of the Government in this respect?
    Mr. Stewart: Yes, Sir, one is aware of that, but I put this point to the hon. Gentleman, that whilst all schemes must be considered on their individual merits, their importance to highland development generally is one of the factors taken into account.
    Mr. John MacLeod: Will my hon. Friend bear in mind that the Highlands are suffering from years of neglect, that the proposals put forward by the Highland Panel have been before Government Departments for many years, and that it is time that more drastic action was taken?
    Mr. Stewart: I think it would be truer to say that the Panel's recommendations have mostly been very promptly accepted by the Government and acted upon.

    Licensing Laws (Young Persons)
    Mr. Hannanasked the Secretary of State for Scotland if he will introduce legislation to amend the licensing laws making it illegal for grocers, or any other person, to sell or deliver alcoholic liquor in bottles to young persons under the age of 18.
    Mr. Henderson Stewart: My right hon. Friend has no evidence at present of any general need for such legislation.
    Mr. Hannan: Will the hon. Gentleman convey to his right hon. Friend the information that there is great suspicion in Scotland that children under the age of 14 can be supplied with alcohol in sealed bottles by licensed grocers, and that such alcohol is used by teen-agers and this creates an abuse of the licensing laws? Is he aware that the number of teen-agers arrested for being drunk and incapable increased during 1950, 1951 and 1952, and that it was only as a result of an appeal to the trade by the police authorities in Glasgow that some action was taken by showing notices?
    Mr. Stewart: Yes, we know about the facts. Action is taken where it can be. However, we have no evidence—that is the point—of the need for a change of this nature.

    Technical Education (Expenditure)
    Mr. G. M. Thomsonasked the Secretary of State for Scotland whether, in view of the Government's economy programme, any changes are proposed in either the extent or timing of the expansion of Scottish technical education announced in Command Paper No. 9703.
    Mr. Henderson Stewart: In view of the urgency and importance of extending technical education, the review of expenditure for 1956–57 proposed by the Chancellor of the Exchequer in the Budget debate will not apply to the Government's plans recently announced in the White Paper.
    Mr. Thomson: Is the hon. Gentleman aware that there will be general agreement with the Secretary of State's decision, and that it will be generally hoped that local authorities will give the Secretary of State every possible cooperation?
    Mr. Stewart: The local authorities know that, and have known it for a very long time.

    Motoring Offences (Drunkenness)
    Mr. Hannanasked the Secretary of State for Scotland how many drunk-in-charge cases were reported to the police in 1955.
    Mr. Henderson Stewart: The number of cases of driving, attempting to drive, or being in charge of a motor vehicle while under the influence of drink or drugs, which were reported, to the police in Scotland in 1955 was 1,747.
    Mr. Hannan: Is the hon. Gentleman aware that the figure given last year was 1,494, which was then the highest on record and was about 70 per cent. above the 1938 figure? Yet here we have an increase of 200 upon the previous highest figure. Is it not further evidence that action is urgently required to deal with this type of case in order to protect sober motorists as well as pedestrians?
    Sir A. Gomme-Duncan: Does not my hon. Friend agree that this proves how sensible and efficacious has been the action of the Sheriff Substitute of Perth in imposing sentences of imprisonment in similar cases?
    Mr. Woodburn: Is the hon. Gentleman aware that, besides the 1,700 persons who have been detected as being drunk, there are many others who behave as if they are drunk as a result of driving for far longer hours than the law permits? Is he doing anything to curtail long driving hours?
    Mr. Stewart: If the right hon. Gentleman has evidence of that, I should be glad to have it. At the moment, I have no such evidence.

    Teachers' Salaries (Negotiating Procedure)
    Mr. Hector Hughesasked the Secretary of State for Scotland the terms of the replies made by the Educational Institute of Scotland and the local education authorities to his recent request for their views on the structure and functioning of the National Joint Council.
    Miss Herbisonasked the Secretary of State for Scotland what conclusions he has reached as the result of his consideration of possible changes in the machinery for negotiating teachers' salaries in Scotland.
    Mr. Henderson Stewart: My right hon. Friend has carefully considered the suggestion made by the hon. Lady the Member for North Lanarkshire on 2nd December that, in effect, the Secretary of

    1003
    State's power to modify or reject recommendations of the National Joint Council should be abolished; he has also examined certain other proposals, involving changes in the composition of the Council and in procedure, some of which were made by the hon. Lady and some in another place on 8th December. My right hon. Friend obtained from the Association of County Councils, the Counties of Cities Association and the Educational Institute of Scotland their views on the issues raised, and he is in agreement with these bodies that the power of the Secretary of State and the composition of the National Joint Council should remain as at present and that no major changes in procedure are called for.
    Mr. Hughes: Will the hon. Gentleman say how far his negotiations with the National Joint Council are preconditioned by salary awards in England?
    Mr. Stewart: The negotiations take place in a very open frank manner. There is, of course, the link between what is spent on education in Scotland and what is spent in England, but, in fact, in Scotland we spend a good deal more on teachers' salaries in proportion to our grant than is spent in England.
    Mr. Hughes: On a point of order, Mr. Speaker. The Minister did not address his mind to my supplementary question, and apparently he did not understand it. May I repeat it?
    Mr. Speaker: I think the hon. and learned Member had better put another Question on the Order Paper.

    Forth Tube Crossing
    Major Anstruther-Grayasked the Secretary of State for Scotland whether he has now considered the report of the panel of experts examining the Forth tube crossing; and if he will make a statement.
    Mr. Henderson Stewart: I cannot yet add to the reply which my right hon. Friend gave to my hon. and gallant Friend on 1st May.
    Major Anstruther-Gray: I appreciate my hon. Friend's position, but will he do his best to cut out delay?
    Mr. Stewart: Yes, Sir, there will be no delay, but at the moment we cannot move until we have had replies from the local authorities.

    Calf Subsidy
    Mr. N. McLeanasked the Secretary of State for Scotland whether he will consider amending the regulations implementing the Annual Price Review so as to change from 1st April to 1st January the date after which a calf has to be born to qualify for the increased rate of the calf subsidy.
    Mr. N. Macpherson: No, Sir. The increase in the calf subsidy forms part of the Price Review determinations for livestock products, and for Price Review purposes the livestock year commences on 1st April. It would not, therefore, be either desirable or practicable to make changes retrospectively.
    Mr. McLean: Is my hon. Friend aware that, although 1st April may be all right from the administrative and bookkeeping point of view, it is not all right from the farming point of view because it encourages late calving and will he therefore reconsider the matter?
    Mr. Macpherson: We recognise that 1st April comes in the middle of the calving season, and it would perhaps have been a little more logical to start later, but we wanted to begin as early as possible.

    Primary and Secondary Schools
    Dr. Mahonasked the Secretary of State for Scotland how many primary and secondary schools were under construction at the latest date for which figures are available; and how the total figures compare with those of the same date in 1955.
    Mr. Henderson Stewart: On 31st March, 1956, there were 138 new schools under construction of which 106 were primary and 32 secondary, compared with 111 a year previously of which 88 were primary and 23 secondary.

    Pit Bings, Clackmannanshire
    Mr.Woodburnasked the Secretary of State for Scotland (1) what requirements, under town and country planning law, he has imposed to protect the beauties of Clackmannanshire from spoliation by the growth of pit bings;
    (2) whether he is aware that the scenery in Clackmannanshire will be spoilt by unsightly bings of refuse which may result

    1005
    from the proposed large coal development; and whether he will ensure that suitable trees are planted to grow with the bings and preserve the amenities.
    Mr. J. N. Browne: The deposit of refuse resulting from proposed coal development on a site not already used for the purpose on 1st July, 1948, requires the permission of the local planning authority who may impose such conditions for the preservation of amenity as may appear to them appropriate.
    Mr. Woodburn: Will the Minister take steps to ensure that some ingenuity is exercised before such spoliation of the beauty of the country occurs? When it is known that enormous bings will arise as a result of the workings in the area, cannot some steps be taken to ensure that the spoliation of beautiful Scottish land which has taken place in the past does not recur?
    Mr. Browne: Yes, Sir. This is primarily a matter for the planning authority in co-operation with the National Coal Board.

    Families, Hillhead Quarry (Living Conditions)
    Sir D. Robertsonasked the Secretary of State for Scotland if he is aware that the children of school age of the six families in Hillhead Quarry, Wick, are liable to spread infection at school as a result of their living conditions, which violate subsections (1), (2), and (5) of Section 16 of the Public Health Act, 1897; and what action he is taking in this matter.
    Mr. J. N. Browne: The medical officer of health for the burgh reports that there is no unusual risk that the children referred to might spread disease, and in his opinion no action is necessary in this respect. The Town Council has been reminded of its obligations under the sanitary provisions of the Public Health (Scotland) Act, 1897.
    Sir D. Robertson: Is it not the case that the British Legion ventilated this appalling case of overcrowding, in which six families are living in dilapidated huts without water or sanitation of any kind? Is my hon. Friend aware that I have seen the children covered in scabs and that action must be taken? It is quite wrong that in a civilised country conditions like this should exist.
    Mr. Browne: The Town Council is considering the matter at a meeting which is being held today, and I shall let my hon. Friend know of any developments.

    Overcrowding, Halkirk
    Sir D. Robertsonasked the Secretary of State for Scotland if he will exercise his powers under Section 48 of the Housing (Scotland) Act to require an inspection in relation to overcrowding of that part of Halkirk to which his attention has been drawn by the hon. Member for Caithness and Sutherland; and if he will require that proposals regarding the rehousing of the 18 persons in the two-apartment house concerned shall be submitted by the local authority in accordance with subsection 2 of the Section.
    Mr. J. N. Browne: My right hon. Friend would not feel justified in taking the action suggested, having regard to the good progress which Caithness County Council is making with its general housing programme.
    Sir D. Robertson: Under what conditions can 18 people be allowed to live in two small rooms in a house without water or sanitation? Is it really good enough for a Minister who is responsible to this House for housing to tolerate this situation for an indefinite time?
    Mr. Browne: As my hon. Friend knows, the matter of housing allocation is one for the local authority. My right hon. Friend is in touch with the council about the rehousing of these persons, and he will write to my hon. Friend as soon as possible.
    Sir D. Robertson: In view of the thoroughly unsatisfactory nature of the Answer and the state of housing in my constituency, I give notice that I shall raise this matter at the earliest possible moment.

  MINISTRY OF WORKS

    Properties, United States
    Mr. Vaneasked the Minister of Works his policy with regard to the purchase in the United States of America of premises for use by British consuls as offices or residences as against taking such premises on lease.
    The Minister of Works (Mr. Patrick Buchan-Hepburn): My policy is to buy office or residential accommodation in the United States only where there would be clear financial or other advantage in doing so. It is not considered that at many of the posts in the United States the purchase of property would be financially attractive; but in some cases it would be advantageous. We already own property at two consular posts. The purchase of other houses is under consideration.
    Mr. Vane: Will my right hon. Friend look at this matter again? Is he aware that the British residents in the United States are under the impression that successive Governments have been penny wise and pound foolish in rejecting the purchase of suitable properties and preferring expensive leaseholds instead?
    Mr. Buchan-Hepburn: The matter has been very carefully looked at. As I say, the purchase of houses in cases where it would be advantageous to buy is under consideration, but it is not always advantageous to buy.
    Mr. Anthony Greenwood: Ought not the real criterion in every case to be the suitability of the premises rather than whether they happen to be for sale or to let? Will the Minister not look again into the very important point raised by his hon. Friend?

    Insecticide and Pest Infestation Laboratories
    Mr. Skeffingtonasked the Minister of Works (1) at what date it is proposed to start the construction of the new wing to house the Insecticide Section of the Pest Infestation Laboratory of the Department of Scientific and Industrial Research at Slough;
    (2) when it is proposed to provide, in addition to the provision being made for the Insecticide Section, new buildings for the Pest Infestation Laboratory of the Department of Scientific and Industrial Research at Slough.
    Mr. Buchan-Hepburn: Tenders for the new Insecticide Laboratory have been received and a contract will be let shortly; building will begin as soon as possible thereafter. No date has been fixed for the erection of new buildings for other sections of the Pest Infestation Laboratory.
    Mr. Skeffington: Is the Minister aware of the appallingly cramped conditions under which the staff are working at this site in doing work which will probably save the country millions of pounds? Will he try to get a move on?
    Mr. Buchan-Hepburn: It is hoped that the erection of the Insecticide Laboratory will begin very shortly.

    Fuel Research Station
    Mr. Skeffingtonasked the Minister of Works by what date it is proposed to provide at Stevenage the new accommodation planned for the Fuel Research Station of the Department of Scientific and Industrial Research.
    Mr. Buchan-Hepburn: It is intended that building work should start in 1957 and that the first part should be completed about three years later. No date has been fixed for starting the second part of the project.

  U.S.S.R. (PRIME MINISTER'S VISIT)
  Mr. Collinsasked the Prime Minister if he will make an official visit to the Union of Soviet Socialist Republics before the end of 1956.
  The Prime Minister (Sir Anthony Eden): Although I was glad to accept an invitation to visit Moscow, it is not possible to fix a date yet.
  Mr. Collins: Cannot the Prime Minister say whether it will be this year, next year or merely some time? Would he agree that the great advantage of the recent talks is that they left little room for misunderstanding; and on this foundation would the Prime Minister not make the visit as early as possible in the hope of reaching concrete agreements?
  The Prime Minister: I am sure that there is no room for misunderstanding at all between our Soviet guests and ourselves; they understood my position entirely. When something has been arranged, an announcement will be made.

  UNITED KINGDOM AND UNITED STATES
  Mr. Lewisasked the Prime Minister whether he will extend an invitation to the President of the United States of

  1009
  America to visit this country, after the Presidential election, as the guest of Her Majesty's Government, to enable discussions to ensue on matters arising from the recent talks with Marshal Bulganin and Mr. Khrushchev.
  The Prime Minister: I take note of the hon. Gentleman's suggestion and will only comment at this time that a visit from the President of the United States would always be welcome in this country.
  Mr. Lewis: I am sure that the whole House will be very pleased with the tone, the nature and the content of that reply. If in view of the President's unfortunate recent illness, which we all regret and from which we are pleased to see that he is making progress, he finds that he cannot come here, would the Prime Minister consider going to the United States to see the President?
  The Prime Minister: All those hypothetical questions seem to me to be highly dangerous in terms of domestic politics in both our countries.

  UNITED KINGDOM AND CHINESE PEOPLE'S REPUBLIC
  Mr. Harold Daviesasked the Prime Minister if he will now extend an invitation to the Prime Minister of the Chinese People's Republic to visit Britain.
  The Prime Minister: I have nothing to add to the reply which I gave to the hon. Gentleman the Member for South Ayrshire (Mr. Emrys Hughes) on 29th November last year.
  Mr. Davies: I have not been able to look up the reply given on that occasion. In view of the fact that the Chairman of the National Chinese Congress was kind enough to invite an all-party delegation to the Chinese People's Republic, will the Prime Minister assure the House that when it is possible and practical he will consider extending an invitation to the Chinese People's Republic to visit this country?
  The Prime Minister: I thought that answer received the general acceptance of the House. It has been our constant policy to work towards an improvement in relations with the Government of China, but I did not think the time had
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  yet come when it would be appropriate to pursue this particular idea.
  Mr. Steele: In view of the number of invitations which are being sent out, would it not be better for the Prime Minister to have cards printed to be "At Home" every Tuesday about four o'clock?

  SCIENTIFIC AND INDUSTRIAL RESEARCH

    Research Ship "Sir William Hardy"
    Mr. Hector Hughesasked the Parliamentary Secretary to the Ministry of Works, as representing the Lord President of the Council, if he will specify the nature and extent of the tests on refrigeration equipment recently carried out in the research ship "Sir William Hardy" and make a statement on the fish supplied for important researches to the Torry Research Station and the results of those researches.
    The Parliamentary Secretary to the Ministry of Works (Mr. J. R. Bevins): As the reply is detailed and lengthy, I will, with permission, circulate it in the OFFICIAL REPORT.
    Mr. Hughes: Does the hon. Gentleman realise that the work of this very expensive ship has been too long delayed owing to certain defects? Will he take steps to see that it gets on with the work for which it was built?
    Mr. Bevins: Yes, Sir. My noble Friend is aware of the position and progress is being made.
    Following is the Reply:
    The tests were made on the ship's cold stores and on a magnetic valve and a vertical plate freezer, both of which are part of the refrigeration equipment. The valve has special features for regulating the refrigerant at very low temperatures, and the vertical plate freezer is a piece of refrigeration equipment, designed by the Torry Research Station and especially suitable for use in freezing fish at sea.
    The fish caught by the trawler were used in research for assessing the quality and extending the keeping qualities of stored fish. They have been used on the further development of the tetrazolium method for the rapid testing of quality. They have also been used for the accumulation of information on the seasonal and other variations in the chemical composition and the bacteriological condition of fish, the odour and flavour of fresh fish,

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    and the histological disposition of muscle fibres which varies with different types of dehydration processes from vacuum freeze drying to air drying.
    Experiments have also been undertaken into the bacteriological condition of ice used in storage and an antibiotic in ice was used successfully in a medium scale trial in the trawler.
    Research is also in progress aimed at finding improved methods of sampling fish flesh as a criterion of changes in quality in cold-stored fish.
    The results of these researches will be made available in due course through advice given to the industry by the Torry Research Station, in the Annual Reports of the Food Investigation Organisation of the D.S.I.R. by special reports published by H.M.S.O. by articles in the Trade and Technical Press.

    Department of Scientific and Industrial Research (Report)
    Mr. E. Fletcherasked the Parliamentary Secretary to the Ministry of Works, as representing the Lord President of the Council, what proposals Her Majesty's Government have to give effect to the recommendations of the committee of inquiry into the Department of Scientific and Industrial Research.
    Mr. Bevins: The recommendations in the committee's interim report, recently published as a White Paper, form the basis of the main provisions of the Department of Scientific and Industrial Research Bill, which has passed through all its stages in another place and has been introduced in this House. The committee's final report, which is not being published, does not make positive recommendations for action now but contains a number of suggestions for the consideration of the new research council which it is proposed to set up under the Bill.
    Mr. Fletcher: But the interim report is only a very partial document. In view of the devastating criticisms which it contains, does not the Minister think that the full report should be published before this House is invited to consider the Second Reading of the Bill?
    Mr. Bevins: No, Sir. I do not agree that the interim report contains devastating criticisms of the D.S.I.R. I should like to make it plain that the positive recommendations contained in the first report are being written into the D.S.I.R. Bill, which has been presented to this House. The proposals made in the committee's second report are simply suggestions for the consideration of the research council, when it is set up.
    Mr. Fletcher: Can the Minister say why the full report cannot be published before the House is invited to consider the Second Reading of the Bill?
    Mr. Bevins: Yes—for the very good reason that the second report of the Jephcott Committee is quite clearly a report containing suggestions for the consideration of the research council when it is set up.

BILL PRESENTED
  WORKMEN'S COMPENSATION AND BENEFIT (SUPPLEMENTATION)
  Bill to provide for the payment of allowances out of the Industrial Injuries Fund with a view to supplementing workmen's compensation and benefit, and for purposes connected therewith, presented by Mr. Boyd-Carpenter; supported by the Chancellor of the Exchequer, Mr. Secretary Lloyd-George, Mr. Secretary Stuart, Mr. Iain Macleod, Mr. Turton, Mr. Aubrey Jones, Miss Pitt, and Mr. Wood; read the First time; to be read a Second time tomorrow and to be printed. [Bill 128.]
BUSINESS OF THE HOUSE
Proceedings on the Restrictive Trade Practices Bill exempted, at this day's Sitting, from the Provisions of Standing Order No. 1 (Sittings of the House).—[The Prime Minister.]
ORDERS OF THE DAY

  RESTRICTIVE TRADE PRACTICES BILL
  Considered in Committee. [Progress 3rd May.]
  [Sir CHARLES MACANDREW in the Chair]

  RESTRICTIVE TRADE PRACTICES BILL

    Clause 19.—(PROHIBITION OF AGREEMENTS FOR COLLECTIVE ENFORCEMENT OF CONDITIONS AS TO RESALE PRICES.)
    3.32 p.m.
    Mr. Eric Fletcher: beg to move, in page 16, line 6, after "out", to insert:
    " or to seek directly or indirectly to give effect to or by any method whatsoever to enforce or secure the performance of ".
    The Chairman: I think it would be convenient for the Committee if the next Amendment, in page 16, line 6, at end insert:
    " (whether any such agreement or arrangement has been made by such persons or others) ".
    were taken with the one moved by the hon. Member.
    Mr. Fletcher: I quite agree, Sir Charles. I have had the opportunity of consulting my hon. and learned Friend the Member for Aberdeen, North (Mr. Hector Hughes), who has been good enough to be a signatory to these Amendments.
    The President of the Board of Trade (Mr. Peter Thorneycroft): Perhaps I may intervene to point out that there are three further Amendments which, I think, raise the same point. They are the Amendments in page 16, line 15, after "circumstances", insert:
    "and offering the same facilities or rendering the same services either to the suppliers or to the public or otherwise ".;
    In line 18, at end insert:
    "or to seek directly or indirectly to give effect to or by any method whatsoever to enforce or secure the performance of".
    In line 19, at end insert:
    "(whether any such agreement or arrangement has been made by such persons or others)".
    The Chairman: Yes, I think that that is so.
    Mr. Fletcher: I am much obliged to you, Sir Charles, and to the President, for a very helpful suggestion. It certainly would be most convenient to us also to take the three Amendments to which the
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    President has referred while the Committee is preparing itself for the ordeal of trying to finish the Committee stage this evening.
    My hon. Friends and I attach some importance to the Amendment which I have moved. I am sure that the President will accept what I say when I tell him that these Amendments are put forward in no critical spirit. They are an attempt to be constructive. The right hon. Gentleman will appreciate that by putting down these Amendments we are attempting to help in the draftsmanship of this very important Clause.
    We are now embarking upon the consideration of Part II of the Bill, which enshrines a very important decision of Government policy which we cordially welcome, namely, the decision to prohibit collective resale price maintenance. That decision is one of the cardinal points of policy put forward by the Monopolies Commission. The Government's decision no doubt results from the majority Report of the Commission upon collective discrimination.
    I think that we would all wish to pay a tribute to the work of the Commission in bringing forward that most valuable Report. Having examined the matter in very great detail, the Commission came down conclusively in support of the view that the methods at present adopted for the collective enforcement of resale price maintenance were both excessive and dangerous. It condemned such practices as the collective boycott; the stop list, and private courts.
    The Parliamentary Secretary and, I believe, the President, have quite rightly told us that although there is nothing specific in the Bill to prohibit collective boycotts, stop lists or private courts, the Government's view is that they are effectively prevented by the implications which can be read into the Clause. That view was expressed by the Parliamentary Secretary during the Second Reading debate. He said that if one doubted the matter all that one had to do was to ask what industry itself thought of the matter, and they would find that it took the view that these practices, which it has always regarded in the past as being so necessary and efficacious for enforcing collective resale price maintenance, are brought to an end by the Clause, although it contains no specific, express prohibition.
    The Parliamentary Secretary to the Board of Trade (Mr. Derek Walker-Smith): The hon. Member will realise that there is a specific exclusion of the collective boycott. It is only in regard to private courts that the prohibition is implicit and not expressly stated.
    Mr. Fletcher: I am much obliged. The collective boycott is expressly stated, but private courts and stop lists are not.
    We think that the Clause will be strengthened and made more nearly perfect if, in subsection (1, a), which makes unlawful the withholding of supplies or the refusal to supply goods, there were inserted the words:
    " or to seek directly or indirectly to give effect to or by any method whatsoever to enforce or secure the performance of".
    We think that it would be a salutary precaution to insert those words, because, whereas in the past the final sanction which traders have adopted is the stop list or the refusal to put a person upon an approved list, it is difficult to foresee exactly what other devices might be resorted to in the future. We want to make it abundantly clear that by no device, mechanism or invention of any kind will manufacturers and suppliers be able, directly or indirectly, to enforce a policy of collective resale price maintenance.
    The Amendments in line 18 which duplicate the Amendment I have moved are necessary because as the Bill is drafted subsection (1) applies to the supply of goods and subsection (2) applies to dealers in goods. Therefore, what applies to goods applies in the second case in pari materia.
    The second Amendment is somewhat different and I attach more importance to it. It is designed to make clear that this prohibition on the withholding of supplies or the refusal to supply goods, or any enforcing of collective resale price maintenance, is effective not only against the parties to the agreement, but also against persons who may not be parties to the agreement.
    Hitherto, manufacturers and dealers have made these restrictive agreements to which objection is taken and, as in the case of the motor car industry, we have found that methods of enforcement have not been left to the parties who made the agreement. The party who has
    1016
    enforced the agreement has been a trade association, or at any rate, someone outside the agreement. Experience has shown that when it has been found necessary to control a recalcitrant retailer who wished to charge lower prices to the public than his agreement permitted, he has been called up, not before his contracting party, but before a trade association or some other body, or some kind of court, and told, "If you do not carry out your agreement with Mr. X, Mr. Y and Mr. Z will not supply you, and you will come before the court and fines will be imposed on you."
    Therefore, it is not sufficient merely to say that it shall be unlawful for parties to make such an agreement. The President will appreciate that it is not sufficient merely to say to people that it shall be unlawful for them to make an agreement, or that it shall be unlawful for them to enforce the agreement. It is necessary to make sure that no one else shall endeavour, directly or indirectly, to enforce the agreement; and that is the object of the second Amendment.
    I know what the President will say in reply. He will endeavour to rely on subsection (4). Of course, if he proposes to accept the Amendment, I will not say any more. But if the right hon. Gentleman proposes to resist the Amendment, as he has tried to resist some earlier Amendments, on the ground that they are not necessary because there is something else in the Bill which makes them superfluous or redundant, or something or other; if he proposes to say that subsection (4) makes them unnecessary, I will draw his attention to the fact that although subsection (4) states that
    "This section applies in relation to an association…as it applies in relation to a person so carrying on business… "
    That is all right so far as it goes; but it does not prevent an association, not being a party to an unlawful agreement, from taking an indirect step or introducing some kind of mechanism to enforce the agreement.
    What we are endeavouring to avoid is that, whereas a party to an agreement may be effectively prevented from enforcing it, there may be someone outside the agreement who will try to enforce it. Should that position arise we should find ourselves back in the same kind of

    1017
    trouble as we are now in, and the door would be wide open for people to abuse the provision of the Bill. I have endeavoured to put the object of these Amendments as helpfully as I can, and I hope that they will commend themselves to the Government.
    3.45 p.m.
    Mr. P. Thorneycroft: I accept entirely the spirit in which this Amendment was moved by the hon. Member for Islington, East (Mr. E. Fletcher). He made a very helpful and conciliatory speech. The purpose of the Amendments which we are discussing is simple. It is to ensure that collective enforcement is, in fact, banned by the Bill. The Government are absolutely at one with the Opposition in that intention. It is our purpose to ban collective enforcement of resale price maintenance and we believe that we have done so. Under subsection (1) we make it unlawful to withhold supplies or to refuse supply of goods and, under subsection (2) to withold orders for supplies of goods and, as the hon. Gentleman says, later we catch up with the associations, and so forth.
    It is tempting to make certain about these things by adding further words. The danger is that by so doing one does not necessarily clarify the drafting, but may blur the issue. That would apply to the first pair of Amendments to subsections (1) and (2). But I am not prepared to say "No" on that ground alone. I am ready to see whether there are any words which may he added and which would make absolutely clear what the hon. Member and the Government wish to carry out.
    The second point is one to which I am more attracted. It is not altogether a drafting point; it is a little more a policy point. It deals with the case where one group of people is seeking to enforce someone else's arrangement. There are such instances, or at any rate there might be, and I should like to examine that. I think that this Amendment may be a test of many things, including, perhaps, whether we shall finish at an early hour or a late hour tonight.
    I will try to give a helpful answer to it. We are at one about policy in this matter. I do not wish to leave a loophole in the Bill. I have made my position and that of the Government plain throughout our discussions. We desire
    1018
    to make unlawful the collective enforcement of resale price maintenance and I hope that the Committee will accept what I have said.
    Mrs. Barbara Castle: The Committee will welcome the helpful way in which the right hon. Gentleman has replied to these Amendments. But there is a point of substance in the Amendment in my name which is rather different. The Amendment to which I refer is in line 15, at the end to insert:
    "(c) to enforce or to attempt to enforce by any other method any condition as to the price at which goods may be resold."
    The President assumed, as is assumed in the Clause, that the only method of collective enforcement of resale price maintenance is by the withholding of supplies. We accept from the right hon. Gentleman that he is anxious to prevent the collective enforcement of resale price maintenance, but we suggest that he has left a loophole here of which he may not be aware.
    We all feel that we must close all possible loopholes which may be used to defeat the purpose of this Clause. We are aware—or we ought to be at the end of the long debates which we have had on this Bill—of the vast ingenuity of lawyers and the immense importance of not leaving anything to chance when lawyers are about. I suggest most seriously to the President that if he does not accept this wording, or similar wording, to reinforce the Clause he may find that his purpose of banning collective enforcement has been defeated.
    The right hon. Gentleman may say that the real sanction is the stop list and that if any other action is considered it comes back to that, but it is not quite so simple as that. It is true that the most effective and most generally used sanction is the stop list, but in all our experience of the way in which collective enforcement has been working we have found that that is used as the long stop and is not the first stage of the pressure brought to bear on firms and individuals.
    For example, take the case of the garage proprietor or the motor dealer who has been under pressure from the British Motor Trade Association for having evaded the list price on any article. I have had two cases sent to me. In one case a dealer was charged with having given£3 10s. for four old tyres

    1019
    as an inducement to purchase new tyres and had thus circumvented the list price. He felt that it was unjust but he paid a £50 fine.
    That was a case in which the punishment was a fine. The President may argue that the fine was paid only because behind the fine lay the sanction of the stop list, and there is something in that argument. In another case a dealer wrote complaining that he was fined £25 for having inserted an advertisement in the local Press saying that he would make a good allowance for any car in part exchange and he pointed out that the alternative to paying the fine was to be placed on the stop list.
    I suggest to the President, however, that for the purpose of clarity and to give support and reassurance to individuals who may be under pressure of this kind, we ought to make the first stage, as well as the long stop, subject to this prohibition, because a small dealer may not know that although the fine is not illegal, the stop list is, and, therefore, by banning the fine as well we may be strengthening his resistance to this kind of pressure. That is one argument which I want to advance, but there is an even more important argument.
    If, in future, a dealer resists a fine in the belief that he is safe and cannot be interfered with in any way, there is the possibility that he may find himself subject to another form of blackmail brought to bear on him under subsection (1, a) of Clause 16, which enables a restrictive agreement to pass through the net provided it is necessary for the safety of the public. It might be that the Motor Trade Association could make it known to a garage proprietor resisting this kind of pressure that if he was recalcitrant he would be placed on their list of unsatisfactory dealers on the ground that he could not be trusted to carry out his work to the safety of the public.
    I agree that some of this is hypothetical, but it is not impossible to think of many ways in which really astute lawyers might get round the Clause because for some unknown reason the House of Commons had restricted collective enforcement in this Clause merely to the withholding of supplies. I suggest that there could be no harm done by adding these words, which would make quite clear that the
    1020
    purpose is to ban collective enforcement whatever the defence of an astute lawyer might be.
    Mr. P. Thorneycroft: I entirely included the Amendment in the name of the hon. Lady in my promise to reconsider this matter. Indeed, it is the other side of the coin—one is dealing with supply and the other deals with the acquiring end of the business. I am only anxious not to add words which might blur the intention, but I will look at the Clause again to see that it carries out the intention we all have. I will look at the question of one association enforcing the arrangements of another association. I hope that with that assurance the Committee will allow us to proceed.
    Sir Lynn Ungoed-Thomas: We are very much obliged to the President for his reply on the first of this series of Amendments, but I am not clear about the Amendment in the name of my hon. Friend the Member for Blackburn (Mrs. Castle). There may be some doubt about that. I should like to know whether it is intended to include that Amendment within the reconsideration which the President said he would be good enough to give to the Clause.
    Mr. Thorneycroft: I think that what I have said covers the same point. It is whether, in fact, we are closing the door to anything which could be called collective enforcement of resale price maintainance. I am not going to argue again whether fines are paid against the background of the stop list, but I am prepared to look at the question to make certain that our intention is carried out.
    Mr. E. Fletcher: I am very glad to have the assurance given by the President. I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Mr. P. Thorneycroft: I beg to move, in page 16, line 23, after "aforesaid" to insert:
    "or who refrain or have refrained from taking steps to ensure compliance with such conditions in respect of goods supplied by them".
    This Amendment has the same purpose of strengthening the method of dealing with collective enforcement. The Clause makes it unlawful for two or more persons to withhold supply from a man who cuts his price, but that does not go far enough. It should also be unlawful to

    1021
    agree to withhold supply from a man who, although he lays down price conditions does not choose to enforce them. It would mean collective boycott of a man until he enforced to the last inch every price list he issued and that would be an obvious intention to defeat the purpose of the Clause.
    Amendment agreed to.
    4.0 p.m.
    Mr. Frederick Mulley: I beg to move, in page 16, line 27, to leave out paragraph (a).
    On the face of it, this Amendment appears to be on a similar point to that in Clause 6 subsection (1). The President gave an undertaking to look into the question of how far partnership agreements would come within the Bill. I submit to the Committee that whereas we agreed that there was a case for having a provision of this sort in Clause 6. there could be no similar ground for having it in Clause 19.
    This Clause relates exclusively to collective resale price maintenance. Perhaps, unlike the majority of hon. Members on both sides of the Committee, I am not an enthusiast for the abolition of resale price maintenance. I agree with what the President said in July, that very often the collective way is the only way to enforce resale price maintenance, but I do not want to argue that point now. I want to see, if we are to begin to have the abolition of collective resale price maintenance that it is fair as between small and large firms and as between manufacturers and retailers alike.
    The Monopolies Commission said, on the question of tyres, that the abolition in that case would probably result to the disadvantage of the small manufacturer. As drafted, I think that this subsection is a clear invitation to companies to form trusts. Why, for example, should Unilever be in a position, if a trader cut the price of margarine to be able to stop his supply and to discriminate in the supply of ice-cream, sausages, fish and all the rest of the things which it deals with in its enormous empire?
    In the tobacco trade we would not want one large manufacturer to be in the position to stop the whole of its supplies where the small manufacturer had not corresponding powers. It seems that much more than one advantage flows
    1022
    from having various sections of a firm in separate companies, and if organisations want the advantages of separate legal entities they must take some of the disadvantages as well. There is no case for giving monopolies or inter-connected bodies corporate privileges in this collective resale price maintenance which are not open to smaller firms.
    It does not seem to me that there is any justification for the exception in this case, which may have got in as a consequential provision following that in Clause 6. if inter-connected bodies corporate can be given that special exemption in Clause 6, it is contrary to the whole spirit of this Clause to include this subsection. I hope that the President will be able to accept the Amendment, or give us an assurance that he will introduce a subsequent Amendment at a later stage.
    Mr. P. Thorneycroft: I hope that the Committee will be concilliatory about this point, which is one that we have discussed before. In Jaw, the partnership and the inter-connected body corporate are to be treated as one person.
    Mr. Mulley: I thought that the whole point of forming several companies was that they would be, in law, different persons. Surely the right hon. Gentleman is now going right against the whole point of company legislation.
    Mr. Thorneycroft: I am sorry; I have got it wrong. I am told that, in law, they are not one person. The purpose of the Bill is that if the partnership agrees that it is no longer going to supply, it must be treated as one person for that purpose. It is the same for an interconnected body corporate. I apologise for having got the exact legal statement wrong, but under the principle of the Bill I do not think that we could deal with it in any other way.
    Sir L. Ungoed-Thomas: We voted against the principle of this point before. My hon. Friend the Member for Sheffield, Park (Mr. Mulley) has very rightly brought it up on this Clause because it is obviously relevant to our consideration of the Clause, but perhaps, in all the circumstances, he will not press the Amendment.
    Mr. Mulley: In view of the President's explanation, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Mr. George Darling: I beg to move, in page 16, line 32. to leave out paragraph (b).
    By this Amendment, we are really asking for clarification. I understand that at present we can have a group of manufacturers working together and that they can enforce their price agreement on the whole of their supplies collectively, so that if a trader offends against one of the manufacturers his supplies can be cut off by the whole lot.
    I gather that the purpose of this paragraph is to make sure that if the manufacturer is enforcing a contract of sale, it can be enforced only by him and only on the goods supplied by him and no one else can come into the arrangement. But it may be possible, when we come to Clause 20, for groups of manufacturers who, under Clause 19, are prevented from having their collective agreement, each to make a separate agreement to enforce its condition of sale and, without any formal agreement, agreeing among themselves to be able—I do not put it any higher than that—to say that the offending trader has offended against each one of them and that supplies may therefore, be collectively cut off. I want to make sure that there is nothing in this Clause to enable any further collective arrangement of that kind to operate.
    Mr. P. Thorneycroft: I can give an assurance that this does not affect collective enforcement. It is obvious that the individual manufacturer, to take the simplest case, can sell at a certain price and, if there is price cutting of those goods he can cut off his supply. There is nothing to prevent him doing so. The paragraph sets out the position where the manufacturer or supplier sells to a wholesaler. He can put in the contract that the goods must be sold at a certain price. If those goods—not any other goods or any other goods supplied to that wholesaler—are being price cut the wholesaler undertakes not to supply. It is the same as the individual doing it, but further down the line. There is no question of any form of collective enforcement here, and I want to make plain that this is a restriction only on the manufacturer's own goods and only those goods mentioned in the contract of sale.
    Mr. Douglas Jay: I am sure that that is what the President means to do, but for the sake of clarity
    1024
    is he sure that there is no ambiguity in the word "those"? Supposing a number of manufacturers met together and agreed that they would each of them sell identically the same type of goods and made the same corresponding agreement about those types of goods, nevertheless to be sold by each one of six firms, can they argue that this contract referred exclusively to those goods? Does "those" mean a particular type?
    Mr. Thorneyeroft: That is a fresh point. I know what the paragraph is intended to mean. It is intended to mean the goods of the manufacturer and to be restricted to them. I will, however, examine the paragraph again to see whether the words could be open to a wider interpretation, but that is certainly not the intention.
    Sir L. Ungoed-Thomas: I appreciate the intention of the Minister and, in view of what he has said, I do not think we are at cross-purposes on the intention. We put down this Amendment to secure the objective which, he says, he does not controvert by reason of including subsection (6). I will tell him how it occurred to us. In this Clause, we are dealing with collective agreements withholding supplies. Therefore, we are starting off with collective agreements withholding supplies. When we come to subsection (3), which is dealing with the exception, we can only construe that as an exception to a collective agreement and not as being the case of an individual agreement at all. Therefore, we argue from the case of a collective agreement that this may operate as an exception.
    Let us take the case of A, B and C agreeing together to supply goods to D—-the last named being a wholesaler. They might sell the whole of their production through the agent D. If they do that, then surely on the wording of this subsection, A, B and C are all agreed to sell goods to D; it is a contract of sale between A, B, C and D. In those circumstances, would not A, B and C, and their contract with D, be outside the ambit of the Clause and within this exception? That is the danger about which we are concerned.
    I appreciate from what the right hon. Gentleman has said that if that happened it would be contrary to his intention, and we suggest that he should look into this case to make certain that it is covered by the Clause.
    Mr. M. Turner-Samuels: I am sure that the President will look at the subsection again, because it might raise a network of restrictions, and I am sure he does not want to do that. He used the phrase "down the line", and that is where the difficulty may occur. The subsection relates to a contract of sale of any goods relating "exclusively to those goods." The same wholesaler or manufacturer may deal with many species of goods and we may, therefore, have a multiplicity of contracts which are "exclusive to those goods." All down the line there could be restrictions in prices imposed on different goods. A network of restrictions could be built up. In that sense, the problem is technical, and I think that the President should look at it again.
    Mr. Thorneycroft: The phrase "those goods" is meant to refer to the goods in that contract of supply. I will certainly look at the point which has been rasied.
    Mr. G. Darling: In view of the President's very satisfactory statement, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Motion made, and Question proposed. That the Clause, as amended, stand part of the Bill.
    4.15 p.m.
    Sir Hugh Linstead (Putney): Before we leave the Clause, I want to draw the attention of my right hon. Friend and the Committee to the whole question of resale price maintenance which the Committee almost lightheartedly seems to be engaged in abolishing from the manufacturing, wholesaling and retailing activities of the country.
    Listening to my right hon. Friend's replies to Amendments which have been moved to the Clause, it has seemed to me that he is more and more hardening his mind against making it at all possible for any reasonable form of retail price maintenance to be operated in this country. If that is my right hon. Friend's intention, what he is doing in the Bill is to play right into the hands of large combines and large organisations, very much to the prejudice of the small man and the small retailer. He is also saying, in effect, that a very large number of trade associations which have been operating
    1026
    perfectly within the law, and whose services the Government were frequently glad to use during the war, have now virtually put themselves beyond the pale.
    Before we part with the Clause, we must satisfy ourselves whether we should label large classes of the community as potential criminals, which seems to be the tendency which has been developing in the debate. It is one thing for the Government to say that they have no objection to resale price maintenance in the abstract, but it is another for them then to make it virtually impossible for resale price maintenance to be carried on.
    It is worth recalling to the Committee that the Monopolies Commission is not the only body which has looked at the question of resale price maintenance. It was first looked at by a public committee as long ago as 1920, when the Standing Committee on Trusts reported that the system of fixing retail prices was to the advantage of the public. Then the Greene Committee, presided over by a gentleman who subsequently became Master of the Rolls, reported that it was not satisfied that if a change in the law were made there was any reason to think that the interests of the public would be better served. Even the Lloyd Jacob Committee, which reported more recently, approved the practice of resale price maintenance, as far as individual manufacturers were concerned, although it criticised its enforcement by collective action.
    In other words, there is a danger that in this new-found enthusiasm for trying to bring prices down we may forget not merely the interests of various groups of traders but also the interests of the public.
    One of the reasons that I am joining in the debate is that many years ago I served an apprenticeship in retail pharmacy, and I came into that business just as the old price-cutting days were being brought under control. I can just remember how small chemists in those days were often hanging on by the skin of their teeth against price-cutting competition from departmental stores and other large organisations. If we look at that group of businesses we see a very good example of a group of individual business people needed by the community. Chemists are needed for the purpose of the National Health Service and their existence prosperously at the moment is largely determined by their ability to keep prices at

    1027
    reasonable levels within their particular trade or business.
    At the moment, for example, the pharmaceutical businesses are subsidising the National Health Service. If we find that, as a result of inability to maintain retail prices in the drug trade, chemists are no longer able to subsidise the National Health Service, we shall have the reverse of the position which we had yesterday; we shall find that the State has to increase the remuneration which it pays under the National Health Service simply in order to keep points of distribution of drugs and medicines open to the public.
    The chemists, looking at their history, have every reason to complain to us, as they have certainly complained to me and quite a number of hon. Members, against the likelihood of their being handed over to the mercy of cut-throat competition from large organisations which they will no longer be able to meet. In the Amendment which was in my name and the names of other hon. Members, but which I understand was not selected, we tried to give some indication of hope, not only to pharmacists but to other groups of retailers who have come to us and said that they very much doubt whether the Government's easy optimism about the ability of the manufacturer to maintain his own prices will be borne out in practice. That Amendment at the end of Clause 19 was designed to try—
    The Chairman: Order. I have no doubt that the Amendment was designed to try to do something, but it was not selected. We can discuss now only what is in the Clause as amended.
    Sir H. Linstead: I apologise, Sir Charles, and will put my point in the form of a question. Is it the President's view that it would be possible for trade associations to make out a case to a court under Clause 19 which would enable them to act as agents for groups of manufacturers in the enforcement for those manufacturers of the individual contracts which each manufacturer had made with those to whom he supplied his goods? In other words, does my right hon. Friend understand Clause 19 as still affording an opportunity for trade associations to act on behalf of their individual members as agents for price
    1028
    maintenance? If he is able to indicate that it is his intention—and is within the four corners of the Bill—that trade associations should still do that, he will, I think, reassure a very large number of the smaller retailers that there is some hope for them; and that they are not going back to the bad old days of the early nineteen-hundreds when there was no stability, and when there was cutthroat competition from organisations much larger than their own. I very much hope that before we part with the Clause my right hon. Friend will find it possible to give some reassurance on this matter.
    Mr. Jay: I hope that the President of the Board of Trade may resist what I think, if I understood him aright, the hon. Member for Putney (Sir H. Linstead) was pushing on him. It seems to us that even if the hon. Member's thesis were accepted we should be in danger of introducing collective resale price maintenance by another name. The hon. Member is frankly in favour of collective resale price maintenance. That is a perfectly respectable point of view—it does not make a man a potential criminal—but I do not think that that, any more than what we said on Second Reading—
    Sir H. Linstead: Can one be in favour of price maintenance in theory and yet deny to the individual the effective means of carrying out that operation?
    Mr. Jay: That was precisely the point that I was coming to.
    The hon. Member is really saying that it is illogical for the Minister to attempt to say that resale price maintenance may be legitimate in certain cases and yet object to the enforcement of it. I think that there is justification in the President's attitude in making this distinction between collective and individual resale price maintenance. I fully agree that one can say that the real question is whether we are in favour of price competition or whether we are not. If we are not in favour of it we should accept collective resale price maintenance. If we are in favour of it we should not accept individual resale price maintenance.
    I do not think that that is the whole story. It is one thing—and on the whole I think that public opinion would accept this, although it is always rash to make guesses about public opinion—for a manufacturer to claim the right to have

    1029
    some say about the prices at which his goods are sold. It is something else when a number of manufacturers combine together to enforce the prices at which the goods of each one of them are sold. After all, in the latter case we take from the individual retailer the right in the last resort to say "I do not like the price which this manufacturer is prescribing for his goods, and, therefore, I shall not sell the goods at all."
    Sir H. Linstead: I do not want to continue this debate by means of a series of interruptions, but does the right hon. Gentleman see any objection to an individual manufacturer appointing his trade association to be his agent for the purpose?
    Mr. Jay: If that amounts, as I should have thought it would, to a collective agreement, through the association, to enforce prices all round, there would be the same objection as there is to resale price maintenance as now worked.
    The point which I was about to make is that there is surely an additional element of conspiracy and abuse of power when a number of people join together to deny the retailer the right to sell at what price he wishes. It is quite a different thing from the retailer's point of view if he is to have so many types of goods, or the goods of so many manufacturers, withdrawn from his supply that it becomes difficult or impossible for him to carry on his particular trade, whereas in the last resort, if it is simply a question of individual goods, he can say, "I shall not trade in these goods, but shall carry on my business otherwise."
    Very briefly, it seems to me, therefore, that there is a distinction between individual resale price maintenance and collective resale price maintenance in that respect, though not in others, so that I hope that the President will not accept the suggestion, which would let in collective resale price maintenance by the back door at the end of the Clause, having professed to shut it out at the beginning.
    Mr. I. J. Pitman (Bath): The right hon. Member for Battersea, North (Mr. Jay) misunderstands the situation, in the sense that I think a great many hon. Members on this side of the Committee would be quite happy to agree that the collective boycott should not be used, but other collective action ought not to be regarded
    1030
    as illegal: for instance, it does not necessarily follow that because a trade association helps an individual producer in maintaining his price, the producer may not use collective methods other than those of arranging this conspiracy, which is the collective boycott.
    I would also say that the hon. Gentleman is a little wrong in thinking that he necessarily wants competition to be only by price. There is the possibility of competition being by quality. In relation to certain commodities I would say that competition by quality is a much better form of competition than competition by price. I am sorry that the hon. Member for Ogmore (Mr. Padley) is not here at present. He believes in competition by service, and knows only too well the really disastrous effect of the "loss leader" upon the ability of the retailer to compete in quality. He knows that a "loss leader" selling a price maintained article below the maintained price can be a competition which indicates that that retail shop is competing by price when it is doing nothing of the kind but is putting up its prices on the non-maintained goods and, as I say, giving a false impression that it is competing in terms of price when it is doing nothing of the kind.
    Mr. Percy Daines: The hon. Member for Bath (Mr. Pitman) says that competition should be by quality and not by price, but surely he would also agree that quality should be reflected in the price.
    Mr. Pitman: We are talking about the discounts given by the supplier to the retail trade and how the retail trade uses them It can use those discounts either to pass on some of that discount to the public, in which case it is competition in price, or it can compete with other retailers in quality by giving a really good service to the public in their purchasing.
    I would say "ditto" to every word which my hon. Friend the Member for Putney (Sir H. Linstead) has said in this respect about the qualified chemist, who must maintain a comprehensive stock of all lines and must keep a qualified staff who are able to advise the public. I shall claim the same for the bookseller. The booksellers do compete on service. A good bookseller such as Blackwell of Oxford can make rings round any other

    1031
    bookseller who does not give a good service, because he has a really comprehensive stock and has a staff which can be of real assistance to the public when the public come to seek help in buying books. He competes in the quality of his service at the determined fair price.
    The publishing industry is a peculiar one, because the copyright protection means, thank goodness, that we have no monopoly, no really big supplier. In fact, the trade is divided among three or four hundred publishers—quite apart from a large additional number of learned societies—from whom the bookseller must also obtain his books. Retail chemists and booksellers are wholly different from the retailers of, shall we say, a packet of cigarettes or a packet of soap powder.
    4.30 p.m.
    If one goes into a shop to buy a particular brand of soap powder, one is not really badly served if one is sold by the retailer a different one. In such sales, by all means, let us have competition on price. If one wants to buy a book by a particular author or on a particular subject, it is no use the bookseller offering one of the latest "whodunits". Similarly, if one has something wrong with one's chest, for the retailer to sell one something for a completely different—[An HON. MEMBER: "What about one's head?"] In any case, the retailer will have to know quite a good deal about how to make hair grow on my head as well as making one's chest better if he is to do his job and the public wants him to compete on quality.
    I think it is the thesis of those of us on this side of the Committee who have Amendments down that this is new legislation which is entirely experimental and that nobody knows what is going to happen. It is quite possible that individual price maintenance by individual suppliers may not succeed, and that bookshops will no longer be offering an adequate service or to a large extent will not be available, because in the publishing trade with 300 or 400 publishers, it is quite impossible for any individual publisher, however big, to carry the weight and support of the book trade if the small publishers in their hundreds do not in fact play their parts individually in support of the trader, which they clearly will not be able to do without
    1032
    some collective support, which need not necessarily be a collective boycott.
    It may well be that we shall find that what would work where cigarettes and soap powders are concerned will not work, shall we say, for medicine or books. If that is the case, and it does not work in practice, and if it is admitted that we are not asking for a collective boycott, but only for a very mild form of collective support for one another in the making effective of what is legal, surely we can claim that that is something which is in the interests of the nation as a whole, because it does mean that we shall stop the "loss leader" and also make and maintain free and keen competition on the basis of quality of service, not on price, which will make impossible such a service, so that members of the public will not have a sufficient or sufficiently good service of bookshops at which they can inspect what they may buy and get advice, and will not have the services of chemists to which they can also go for advice. Meanwhile competition on price will be as effective at the supplies level as will be competition on service at the retail level.
    Mr. P. Thorneycroft: I do not think that we want a far-ranging debate upon an issue which occupied a great deal of time on the Second Reading, but I should like to say a few words to my hon. Friends the Members for Putney (Sir H. Linstead) and Bath (Mr. Pitman), who have put the point extremely clearly and fairly.
    There is no question of saying that because someone believes in resale price maintenance that he is a member of the criminal classes. That is not, I think present in the mind of anybody on either side of the Committee. Let me say, too, that there are arguments—and strong arguments—which have been advanced over 35 years or more on this whole vast and complex issue. On the one side, there is the argument that resale price maintenance can be said to give a steady supply and at stable prices, that it benefits the manufacturers sometimes with long runs, that it is convenient for retailers, and that there is even evidence of benefit to the consumer, which was the view of the Lloyd Jacob Committee. On the other hand, fixed prices effectively prevent any benefits from improved methods of distribution being handed on to the consumer.

    1033
    I should like to say this as a background to the discussion. We are talking here about maintaining prices, but maintaining prices is not the true preoccupation of either party in the House of Commons today. The problem which confronts us is how to get prices down. I think we want to consider a little carefully before we push too far the argument that it must always be wrong if price competition takes place. I am not claiming that there is not or should not be valuable fields for competition in service, quality, and in other ways. I am sure that there are, but do not let us too readily rule out price competition as something of no interest to the British public at this particular time in our affairs.
    From all the consideration which has been given to this issue I think two things emerge. First, there is support for the view that an individual manufacturer can fix the price at which his goods are to be sold and retain a proprietary interest in that price right down to the retail stage or even beyond. At least, that is the view which the Government have accepted for the individual manufacturer. We may have sonic discussion on later Clauses about methods, and so forth, but that is the cardinal principle in the Bill.
    What all the inquiries have really shown is that, even allowing that and accepting the right of the individual manufacturer to fix his price and pursue it down to the retail stage, nevertheless the complex devices for collective enforcement have really produced a rigidity in profit margins and price competition which is inimical to the economic system. That has been the real result from the full inquiries which have been made into this question.
    Let us take the Lloyd Jacob Report for a moment. It said:
    "In short, these associations seem to us to have turned price maintenance from a reasonable means of preventing damage to well-known high quality brands by the operations of unscrupulous shopkeepers into a comprehensive system for regulating and policing entire industries."
    The majority Report of the Monopolies Commission took exactly the same line, when after a long inquiry into the subject, it said:
    "…we consider that these agreements sustain a more rigid and more widespread system of price maintenance than would exist if individual suppliers were responsible for their own enforcement even if enforcement in the Courts
    1034
    were made much easier than it is at present. Such a rigid maintenance of prices and enforcement of elaborate trading rules goes well beyond anything that can be justified as necessary for preserving a reasonably stable market for branded goods or for protecting particular retailers."
    After two inquiries, there has been very substantial support for the attitude which the Government have adopted in Clause 19. I do not want to pursue the matter, but I wish to re-emphasise that a manufacturer can fix his own price and pursue it right down the line through the wholesaler to the retailer; indeed, more can be done, because there is nothing to prevent suppliers agreeing among themselves to maintain prices and issue price lists, except that, if it is done it will be a mutual restriction which is referable to the Restrictive Practices Court under Clauses 15 and 16 of the Bill. It will then be open to them to go before the Court and justify it on its merits under the criteria.
    Mr. J. Grimond: I am very glad to hear many of the statements which the President of the Board of Trade has just made. I agree with the right hon. Gentleman that most people are extremely anxious to see prices come down. If we believe in any sort of system of free enterprise and competition—and, after all, the party opposite does believe in it—it must entail competion in price. There is no other sort of competition which the ordinary man in the street recognises. I also recognise that in certain cases the service given by retailers is useful, though in my opinion it is very often the case that its advantages are very much exaggerated. It is very curious to listen to the argument that there is no competition in price.
    Mr. Anthony Fell: Would the hon. Gentleman really suggest that the service given in some cases, from the point of view of safety, can be exaggerated?
    Mr. Grimond: Yes, I would say that in many cases they are grossly exaggerated. What has put the small retailer out of business is not by any means always the fact that competition has been allowed. It is since restrictive practices grew that the small retailer has been faced with extinction from the big retail combines and large stores.
    Am I to understand that if the Court allows an association under Clause 16 to

    1035
    continue, that association shall be allowed to continue to enforce resale price maintenance for all the members of that association? I may have misunderstood the right hon. Gentleman, but I thought he said that if the Court agreed that such an association was in the public interest, or was doing something to protect the safety of the public, it must, therefore, continue and should be allowed to protect its members under Clause 19.
    I do not think that the right hon. Gentleman meant that. I presume that what he meant was that it might be allowed to enforce a particular sale of goods but not to enforce the general sale of goods.
    Mr. P. Thorneycroft: A group of suppliers could agree among themselves that all of them should maintain their prices. That is a matter for agreement except in the case of mutual restriction, which is referable under Clauses 15 and 16. If it is agreed, there is nothing to prevent the individual suppliers enforcing their arrangements. Each of them will have the individual right of enforcement.
    It will not reopen Clause 19 and allow the whole structure of a collective boycott of individuals, private courts and that sort of thing to be revised. Indeed, I think it would make it much more difficult to get the price maintenance arrangement agreed by the Restrictive Practices Court under Clause 16 if that were so. The method of enforcement will be that prescribed in the Clause to which I hope we are about to turn—Clause 20.
    Mr. R. Gresham Cooke: I do not think we should let the Clause pass without saying that the British public ought to be thankful for collective price maintenance in many industries. I refer particularly to the first few years after the war. We have had a lot of criticism of trade associations and collective price maintenance, but whether we consider copper tubes, which were mentioned last week, or cigarettes or motor cars, it was the trade associations acting through their collective machinery which kept down prices of goods when they might have risen considerably.
    Resale price maintenance is generally accepted. Most branded goods are now sold at the nationally advertised list price, and a housewife likes to know what the
    1036
    price is. She does not want to trapse around from one shop to another in the hope of getting an article a halfpenny cheaper. She likes to know what the price is when she goes into the shop.
    I would go so far as to claim that mass production requires a regularity of demand and a large number of outlets which are kept alive by resale price maintenance. The question today is whether resale price maintenance at a nationally advertised list price should be maintained collectively or individually. On the next Clause I am going to make proposals for strengthening the individual protection of price maintenance.
    The only question today is that of enforcement and of what I believe to be a very valuable principle, namely, that of resale price maintenance which, after all, has been accepted by many Commissions, including the Lloyd Jacob Committee. Unless we strengthen the individual enforcement of resale price maintenance, we shall run the risk of the Bill creating bigger and more monopolies than we have at the moment. It would be a tragedy if the big stores, shops and garages were to wipe out the small ones—
    Mr. Cyril Bence: They are doing it.
    Mr. Gresham Cooke: On the next Clause, I shall make suggestions for strengthening resale price maintenance which I believe to be a good principle.
    4.45 p.m.
    Mr. Reader Harris: The hon. Member for Orkney and Shetland (Mr. Grimond) referred to competition in prices. I am in favour of manufacturers competing in prices. After all, the manufacturers are making the goods, and no doubt they arrive at different prices according to their methods of manufacture.
    I am concerned that the people who sell the articles should do so at the prices which have been fixed by the manufacturers. [Interruption.] I have just begun my speech. If hon. Members opposite care to wait, they may hear some of my reasons for what I am saying. The President of the Board of Trade said that we would have a long debate on the Second Reading of this Bill. I did not get a chance of saying anything on Second Reading. In fact,

    1037
    only two ordinary back benchers like myself managed to speak on the Second Reading. By the time we had heard the Front Bench speakers, two Privy Councillors and maiden speakers, there was time for only two back bench speakers.
    The Temporary Chairman (Mr. F. Blackburn): The hon. Member had better direct his remarks to the Question, That the Clause, as amended, stand part of the Bill, instead of going over the Second Reading debate again.
    Mr. Harris: This Clause is the most important one in the Bill because it is the Clause which departs from the principle laid down in Part I of the Bill, namely, that restrictive agreements should be subject to legislation. In my view, collective enforcement agreements ought to be subject to legislation like the other agreements under Part I. I am opposed to the system of automatically making them illegal.
    A number of hon. Members opposite have quoted in their support the Monopolies Commission Report on collective discrimination, but no one has referred to some of the words of wisdom which were uttered by the minority members of the Commission. They said:
    "We are not prepared to say that the referred practices as they exist over a very wide field of trade and industry are in general injurious to the public interest and should be prohibited and made illegal."
    They said later:
    "A general prohibition… would in our view lead to injustices."
    I believe that that is what will happen. I think there will be injustices if all collective enforcement is automatically banned.
    They went on to say:
    "… the question whether or not they should be permitted to continue in the altered circumstances of today may be vital to the industries themselves and we do not think that they should be deprived of the benefits they derive from these practices without having an opportunity of having their cases examined individually."
    I am sorry that the Government have not accepted that recommendation that these practices should be examined individually. I believe that resale price maintenance agreements are to the small shopkeeper what trade union agreements are to the worker. I have said this
    1038
    before, and was shouted down by the hon. Member for East Ham, North (Mr. Daines), and no doubt I shall be again.
    Mr. Daines: The first point that the hon. Member made was that he was in favour of the manufacturer enforcing his own prices. Does the hon. Gentleman apply this principle, in the case of chocolate, to the small retailers?
    Mr. Harris: There is an hon. Lady, who sits behind the hon. Gentleman, who sells chocolate. No doubt she will be able to discuss that subject with him.
    I am convinced that this Clause will hit the small shopkeeper, with whom I am particularly concerned. The hon. Member for Twickenham (Mr. Gresham Cooke) and others have made this point. I think that this Clause is playing into the hands of the big combines. I cannot understand why the Labour Party does not support me in this. I believe I am right in saying that the Labour Party is against what it calls the big interests. I suppose that its method of controlling this sort of thing would be nationalisation of all the means of distribution; I gather that is one of its ultimate objectives.
    The Temporary Chairman: Order. The subject of nationalisation does not arise under Clause 19.
    Mr. Harris: The Labour Party has its own methods of public control which it favours, but most of us on this side of the Committee do not believe in those methods of public control; we believe in stability and orderliness in trade and industry, and I, at any rate, believe that it is a good thing when a trade or industry makes some rules for itself and tries to introduce its own methods of ensuring orderliness and stability in order to maintain reasonable conditions. I am not talking about protecting inflated profits, but about maintaining reasonable profits within the trade.
    In 1945, the Labour Party made some statements which I find quite unexceptionable; I hope that it will bring them forward again. The Labour Party was referring to conditions after the war, and said:
    "The anti-controllers and anti-planners desire to sweep away public controls, simply in order to give the profiteering interests and the

    1039
    rivileged rich an entirely free hand to plunder the rest of the nation as shamelessly as they did in the 1920s."
    Mr. Daines: Read on.
    Mr. Harris: Yes, I will certainly read on:
    "Just think back over the depressions of the 20 years between the wars, when there were precious few public controls of any kind "—
    and now we are to sweep away even the private ones—
    "and the Big Interests had things all their own way. Never was so much injury done to so many by so few."
    It goes on to say:
    "The Labour Party stands for order as against the chaos which would follow the end of all public control. We stand for order for positive constructive progress as against the chaos of economic do-as-they-please anarchy."
    It seems to me hon. Members opposite cannot have it both ways; either they believe in competition and are against nationalisation and that sort of thing, or they believe in some degree of orderliness and stability in trade and industry.
    I believe that trade associations, with their agreements, have done much to contribute towards this orderliness in trade and industry, and I believe that this particular Clause is a bad one because it does away with all that at the stroke of a pen. I am very worried, I must confess, at the possible effects upon shopkeepers of the abolition of all collective enforcement without any investigation of individual agreements; they will be at the mercy of the big combines and big interests.
    Mr. Grimond: I quite appreciate what the hon. Gentleman says; I do feel that there is a strong argument on his side. But surely he carries the argument too far when he gives us to understand that what moves these associations of manufacturers is the terrible sufferings of the small man. It is asking us to believe too much when he says tears fall from their eyes at the thought of all these poor little retailers, and they do not think of their own profits at all.
    Mr. Harris: I will concede the hon. Member for Orkney and Shetland (Mr. Grimond) that point if he will concede me this point, that when people cut prices, they are not doing so with tears in their
    1040
    eyes out of sympathy for the poor exploited public, but they do it in order to make bigger and better profits for themselves and to pinch business from their competitors.
    In making that remark, I am supported again by what was said on the subject of collective discrimination by the three gentlemen who signed the minority Report of the Monopolies Commission. In paragraph 265, they say:
    "Equally we do not feel that the retailer who sells below (or above) the prescribed resale price is deserving of any sympathy. Either he has broken one of the conditions of sale on which he bought the goods or he has knowingly bought them from a wholesaler who has done so. He does this in order to gain an advantage over his competitors who honour their obligations".
    It is clear that I am not the only person who takes the view which I have expressed.
    The hon. Member for Orkney and Shetland seemed to pour some scorn upon the small shopkeeper. I do not know why he should do so. They are being hit very hard at the present time. At the risk of being called out of order again by the Chair, I would ask the Temporary Chairman to accept that this problem must be viewed in relation to other things which are happening at the present moment.
    The small shopkeeper has been hit very hard by three clubs wielded by Her Majesty's Government. The first is the credit squeeze. which is making things very difficult for him; the second is rating revaluation; and now—the third—he is going to be hit by the abolition of collective price maintenance agreements. The small shopkeeper will not be pleased. He will be hit in a way that he does not deserve. That is why I say we ought to make these collective price maintenance agreements registrable and examinable by the Restrictive Practices Court, instead of banning them willynilly.
    There is one further point I must make, despite the desire on all sides of the Committee to rush this Bill through. [HON. MEMBERS: "No"] Yes, there is. If these agreements are abolished by Act of Parliament simply because in present circumstances they are not justified because there is a boom, everybody has money and there is no depression on the horizon, I would ask what is to happen if trade suddenly takes a turn for the worse. These things can come upon us very suddenly.

    1041
    What is to happen if quite suddenly there is unemployment, and these agreements become desirable again? It will not be easy to pass an Act of Parliament in order to permit them again. Even if the House of Commons were agreed that it was desirable that such agreements should be permitted, the Government of the day, of whichever party, would almost certainly say that our legislative programme was so full that time could not possibly be found to bring in an Act for about three years. The people who need the protection afforded by these agreements would be at the mercy of very adverse trade conditions, and would suffer accordingly.
    Lastly, it seems to me that this Clause will hit chiefly the small shopkeeper, as opposed to the manufacturer. Most of the agreements which exist between manufacturers will fall to be dealt with under Part I of the Bill. Under the procedure of Part I, it is bound to be a year or two before such cases come before the Restrictive Practices Court; inevitably there will be a large number of agreements to be registered and examined by the Court, and it may be a year or two before they are pronounced upon. On the other hand, under this Clause, the props beneath the small shopkeeper are to be knocked away on 29th July, or on whatever date the Royal Assent is given to the Bill; so that the small shopkeepers will find their agreements taken from them at an early date, whereas the manufacturers who supply them may be able to retain theirs for two or three years.
    Such a situation does not seem to be fair at all. All agreements should be dealt with in the same way, by registration, appearance and examination before the Court, and approval, if the Court so holds.
    Mr. G. Darling: Now that the hon. Member for Heston and Isleworth (Mr. R. Harris) has got his Second Reading speech off his chest at long last, I am sure the Committee can proceed to discuss Clause 19 in its proper context. I agree with a great deal of what the hon. Gentleman said about Clause 19 possibly being used to assist, or having the effect of assisting, big firms as against little firms, and monopolists against those who want to pursue a policy of competition.
    1042
    There were opportunities given to him to support us on both those issues.
    The hon. Member for Heston and Isle-worth is associated with a trade which has already been examined by the Monopolies Commission. In my view, it is wrong that his association or his trade should now go through the mill of the Restrictive Practices Court. On both sides of the Committee, I think, we wanted the whole of this business to be dealt with by the Monopolies Commission.
    A few moments ago my hon. Friend the Member for Sheffield, Park (Mr. Mulley) suggested that subsection (3, a) should be deleted. That is one point in the Bill which envisages the possibility of big firms being able to deal adversely with small firms. It was an opportunity which I am sure the hon. Member is sorry that he missed. We should have more sympathy with those who are defending their own trade agreements from the other side of the Committee, if they would admit that there are some parts of those agreements which might be objectionable.
    5.0 p.m.
    For instance, there is in the book trade an agreement which contains parts relating to public libraries which the publisher—if he has to deal with this matter in the public interest—would have great difficulty in defending. The librarian of the Sheffield City Libraries has written to me on this matter explaining that until a short time ago all libraries were compelled to get their books from retailers, even though they were ordering thousands of books at a time. That system has broken down, but the Sheffield City Libraries take hundreds of thousands of books a year and can get only a flat rate discount of 10 per cent. on their bulk supplies, although anything from 16⅔ per cent. to 33⅓ per cent. discount is given to the private retailer. That sort of thing cannot be defended.
    There are features in both the Proprietary Articles Trade Association and the Chemists' Federation List Agreements which, if thrashed out in public, could not be defended. One of the more objectionable features, that of discriminating against co-operative societies, has been dropped from the Publishers' Book Agreement, and when we come to a later Clause we will raise that issue with

    1043
    regard to the chemists' and other associations. I am sure that now the publishers have dispensed with that feature of their agreement, the chemists will dispense with it in theirs.
    If we had some suggestion from those hon. Members opposite who are associated with these agreements that there might be features in the agreements which, with the development of public opinion, are objectionable and that they might be dropped, we would listen to them with more sympathy; but if they stick to the agreements and say that they want, as was suggested in one Amendment, to give power to the trade associations to go to the Court to enforce agreements, then obviously we have to have the agreements altered, even though they have some good, in order that the bad features can be removed.
    Sir James Hutchison: I agree with a great deal of what the hon. Member is saying. My view is that many of these agreements should be temporary. Historically, a great many of the agreements, after the disturbing situation had been put right, were automatically dropped.
    Mr. Darling: The chemists' agreement in one form or another has continued for more than thirty years. Although public opinion has changed in that period, the fundamental basis of the agreement has not changed.
    Dr. Donald Johnson: On a point of order. Is the speech of the hon. Member for Hillsborough (Mr. G. Darling) in order on this Clause? Should not his argument have been made on Clause 16.
    The Temporary Chairman: I will call the hon. Member for Hillsborough to order if I consider that his speech is not in order.
    Mr. Darling: We are dealing with the ban on collective agreements, and I am referring to collective agreements which I hope will be banned.
    I am very glad that the President of the Board of Trade resisted the last Amendment. I should like to ask him a question about an undertaking which he gave earlier when he promised to study some of the earlier Amendments. I want to give a far-fetched example. I
    1044
    have been talking about booksellers and I will continue with that example. Suppose that all book publishers got together and set up one wholesale agency and made arrangements with that agency so that the wholesaler was in law the person who was fixing the prices of all the books sold to the retailer, would that arrangement allow the publishers to get round the Clause? I do not think that it would, but it is a point to be considered with other matters which the President of the Board of Trade has promised to consider.
    I hope that hon. Members opposite who are associated with restrictive agreements for good or not—and I believe that they are associated with them for what they believe to be good reasons—will admit that the agreements have objectionable features and will say that they are willing to do something about those features. We might then be able to have a better discussion. We are getting closer together now that we have got rid of the conflict about whether this business should be dealt with by the legal procedure or through the Monopolies Commission.
    Mr. Angus Maude: Since I am as anxious as the President of the Board of Trade and anybody else to make progress, I had not intended to intervene in the debate, but I do not feel that I can allow the impression to be given that every speaker from this side of the Committee is hostile to the substance of Clause 19 and is anxious to weaken its effect. There is a considerable majority of my hon. Friends on this side of the Committee who entirely believe in and agree with the solution which the President has found to this problem and who are anxious that the Clause should go through in its present form.
    I have noticed that most of the objection has come from trade associations—I have noticed that from reading my mail, looking at the newspapers and listening to speeches. I do not find that, on the whole, manufacturers appear to feel that for them this is a very serious matter. If that is the way in which the balance of opinion lies, some of the inferences are fairly obvious.
    Mr. R. Harris: I said that most of the manufacturers' agreements were dealt with in Part I of the Bill. They have no

    1045
    need to grumble, because they will have a chance to register and prove their case before the Court.
    Mr. Maude: That is precisely the point which I want first to establish. The manufacturers are perfectly happy and believe that the process of individual enforcement of resale price maintenance will work perfectly well under the Bill and they are not concerned with the necessity to keep the collective enforcement by the particularly undesirable methods which are mentioned in Clause 19. They do not consider that that is absolutely essential to them and nor do I.
    It is the trade associations which dislike the provision. We have heard a lot of their arguments this afternoon and in the past. My hon. Friend the Member for Twickenham (Mr. Gresham Cooke) said that trade associations did a very good job in the war and after the war, and succeeded in keeping down prices in a period of rising prices. That may well have been true in the war and after the war, in a period of scarcity. The Government took the machinery nearest and most convenient to hand and made use of it, and no doubt trade associations in some commodities kept prices lower than they otherwise might have been. However, that in no way ensures that the same machinery could not be used in a time of falling prices for artificially keeping up prices, and we know that if that sort of machinery exists for that process it will be used.
    I used that sort of argument, with no support from hon. Members opposite, except from the hon. Member for Bilston (Mr. R. Edwards), in respect of restrictive practices which could be justified under another Clause if there were a risk of unemployment in a certain area. We had the argument about what happened between the wars and the argument that we should have the machinery in case it was needed again.
    We had the same argument from my hon. Friend the Member for Heston and Isleworth (Mr. R. Harris), who said that these agreements were necessary because unemployment might develop and become serious. However, if we had serious and persistent unemployment, it would become almost impossible to hold the line of the Bill in any way. There
    1046
    would be an assault on every provision in it. We must legislate for the position as we see it now, and try to get economic sanity into the position now.
    When I hear this talk about the small shopkeepers I really begin to wonder in whose interests we are supposed to be legislating. I sympathise with the small shopkeepers, who do go through difficult times. We know that very well. Many of them are admirable, and they perform a service which nobody else can perform. They know their customers; they know the difficulties of their neighbourhoods. The small shop may save an old lady walking half a mile to a multiple or chain store in the main street. But if the consumer feels that the price level and the service she gets in a large shop make it desirable to walk the extra half mile, we have no right to create an entirely artificial situation which would penalise the more efficient and the cheaper shops. Nothing that has been said today has persuaded me that it is wrong. I am unrepentantly on the side of the consumers in this matter.
    It is all very well to talk about competition in quality instead of price, but let the consumer decide between price and quality. Give the consumer a fair chance to decide and there will be no doubt of what will happen. We are told that the housewife likes to know the price of an article before she goes into the shop. That may be true, but there are some housewives who still retain sufficient use of their faculties to be able to walk out of the shop if they do not like the price they find in it, and they do not mind having the opportunity to go elsewhere to find a more attractive one.
    I think that most of us considering the Bill objectively will recognise that the solution which has been found is one which gives a pretty fair deal to everybody. It is more likely to work than is any perpetuation of an entirely artifical economic situation which is really not in the interests of the consumers or the country.
    Sir Leslie Plummer: The thoughtful speech which the hon. Member for Ealing, South (Mr. Maude) has just delivered illustrates the dilemma which has faced all of us who have been actively engaged on the Bill ever since its Second Reading. It is the dilemma

    1047
    of putting forward what is the immediate public good and risking forgetting what may be the ultimate public good.
    I think the hon. Member for Heston and Isleworth (Mr. R. Harris) ought to be congratulated on his eve of the poll speech today. It was illuminating. It explains his presence here. He worked himself into a passion which had little to do with the serious purport of this Bill.
    But the President of the Board of Trade put the problem when he said that we were all concerned with reducing prices. There is a problem here to which the hon. Member for Heston and Isleworth did not address himself. One of the problems we face today is that profit margins are too high. They are too high because the manufacturers have insisted on a constant expansion of their retail outlets. Therefore, what they have had to do in getting their goods into as many retail outlets as they can find is to fix profit margins at such a rate that they will be profitable even when sold by the most incompetent of these outlets. The result is that the retail margins are high today so that what is called in the trade the "parlour" shop, the little shop, can make a profit out of the sale of branded goods, while the shopkeeper who has a proper, efficient organisation makes an unnecessarily large profit out of the sale of the same branded goods.
    Mr. R. Harris: I would not deny what the hon. Gentleman has said, but what I say is that it does not apply universally. There may be some cases in which the profit margins are too high, and some where they are not. If they are too high, they can be registered and examined. In the tyre trade, for instance, there are profit margins of about 20 per cent. In America, where there is no resale price maintenance, the profit margins are up to 45 per cent. and 50 per cent.
    5.15 p.m.
    Sir L. Plummer: Now that the case for the tyre trade has been put with great brevity, perhaps I can go on with my argument about the branded goods. In their desire to get as many retail outlets as possible many manufacturers of branded goods, the sort of goods the hon. Member for Twickenham (Mr. Gresham Cooke) referred to, have fixed retail margins high with the result that we have
    1048
    artificial support for the existing high prices.
    Look what is happening today. If I like to go to a West End store to buy branded goods I walk to the counter over a plush carpet; I have the goods sent home to me and I get three months' credit for them. Yet I pay exactly the same for those branded goods when I buy them from a self-help store.
    Mr. Fell: Nonsense.
    Sir L. Plummer: The hon. Member says "Nonsense." Would he like to develop the argument? I pay the same amount in a self-help store for the branded goods and I take them away, and pay cash for them. I pay exactly the same price as I pay for them in a West End store, with its plush conditions, where I can get credit and where the goods are sent home for me. Thus I am denied the opportunity of being able to buy those goods at a cheaper price at the self-help store.
    Mr. Pitman: The hon. Member is putting a sound argument, but he is omitting the fact that the self-help store can cut its prices of non-branded goods and that, if he is intelligent, the hon. Member can go to the self-help store and buy all his goods there and save the excess profit he would otherwise pay, and save it in the indirect way of a reduction in the price of the non-branded goods. I cite a bookshop as an example. Many of our books are non-net and may be sold at any price the bookseller likes.
    Sir L. Plummer: Why should a retailer be permitted to sell loose flour at a cheaper price than his less efficient competitors and not be permitted to sell packaged flour cheaper? I do not understand.
    Mr. Fell: Would the hon. Gentleman consider the matter from the other point of view, and consider goods that are not controlled in any way in price? Has he considered what the profit margins are or what the result is when those goods are sold at very much higher prices than they are in other shops? [HON. MEMBERS: "No."] Of course they are.
    Sir L. Plummer: First of all, the hon. Gentleman describes what I say as nonsense and then tries to deal with an argument I am not using. I am discussing only branded goods at the moment.
    Mr. Fell rose—
    The Temporary Chairman: I think it would be better if we did not have so many interruptions. We are now discussing the collective enforcement of conditions of resale prices.
    Sir L. Plummer: I am saying that in a system of trade in which efficient retailers are not permitted to hand on to the consumer the results in part of their efficiency we are not making a determined attack on high prices. I have no interest at all in self-help stores or any of the other shops, but those of us who know anything about going shopping know quite well that self-help stores are here to stay and that they will prosper and flourish. In the United States, in the farmers' markets in the United States, one of the benefits of the self-help store is that it enables the customer to benefit by economies in retailing. I should like to see them operating in exactly the same way here. I admit that if they are to develop and are allowed to decide for themselves what margins of retail profit they will make, they will hit some of the small shopkeepers.
    This will be a great pity, but no change in our economic system can take place without hurting someone. I do not know how long one can go on piling up, year after year after year, additional costs of distribution. We have now reached the absurd situation where the cost of distribution of some manufactured branded goods, including the advertising, is many times the cost of the product. Advertising, packaging, retailing, distributing, jobbing, and wholesaling costs are making the price of goods to the consumer ridiculous and out of all proportion to their true value. It is no good trailing before us now the spectacle of the orphan and the widow in the little back-street shop. This is a case of developing a retail system under which the benefits of modern rationalised retailing are to be shared by consumers throughout the country.
    Mr. Daises: The hon. Member for Heston and Isleworth (Mr. R. Harris) said that he had difficulty in speaking in the Committee because I had tried to stop him. I think that that is a little facetious. It is obvious that the last thing I should want to do would be to stop the hon. Member, because if he makes more speeches like the one which
    1050
    we have just heard it will be a distinct advantage to us on this side of the Committee, and will be most helpful in our propaganda.
    I want to deal with one or two recurring sentences in the speeches of the President of the Board of Trade. The right hon. Gentleman constantly refers to this or that economic practice as not being criminal. I want to quote an actual case. The chief individual concerned is dead, and therefore I ask the Committee to accept my word. This manufacturer was a very good Conservative and sat opposite me in the council chamber. He manufactured a specialised article connected with the book trade of which, by circumstance, he had a virtual monopoly. There was nobody else in competition with him except in a very small degree.
    He was an enterprising man, and he decided to go into the manufacture of another article arising from his own processes. One of the largest combines in the country—and there are only three others who manufacture this article—invited him to their works and told him quite abruptly and brutally that if he did not get out of his second venture they would get into the first and smash him completely.
    I say to the President of the Board of Trade that that type of practice is not isolated, and that by any standard of decency that type of practice is criminal. When the President keeps reiterating phrases implying that none of these practices is criminal, I ask him to use his words more carefully. There have been practices in the past in the economic sphere which have been within the bounds of criminality by any kind of test, and there are practices today which break the law and are criminal, and I think that it is misleading of the right hon. Gentleman to imply that they are not.
    Question put and agreed to.
    Clause, as amended, ordered to stand part of the Bill.

    Clause 20.—(INDIVIDUAL ENFORCEMENT BY LEGAL PROCEEDINGS OF CONDI TIONS AS TO RESALE PRICES.)
    Mr. A. E. Oram: I beg to move, in page 17, line 16, to leave out "either".
    The Temporary Chairman: I think tha this Amendment should be discussed with

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    the next Amendment in the hon. Gentleman's name, in page 17, line 16, to leave out from "generally" to "that".
    Mr. Oram: The purpose of these two Amendments is to prevent discrimination by suppliers against any particular person or class of persons. The class of persons whom I have specially in mind are co-operative societies, which have suffered for a great number of years from a great variety of discriminations merely because they are co-operative societies and trade in a particular way. A number of my hon. Friends and myself have tabled an Amendment to be moved at a later stage of the Bill dealing specifically with the co-operative practice of offering a deferred rebate or dividend. I do not wish at this stage to anticipate the arguments on that matter, which can be more conveniently and appropriately done later.
    Mr. P. Thorneycroft: I agree that we should not debate the point about co-operative societies on this Amendment. A later Amendment will give us that opportunity. The purpose of the words in the Bill which we are now discussing can be put very simply. Normally when a contract of sale is made or arrangements for sale are made, the various retail margins at the different stages are laid down. The words here simply make it clear that the provision applies either generally or to a specified class of person and allows wholesale and retail margins to be laid down by the individual. That is all that happens. It is quite clearly ordinary commercial practice, and it is just that we should recognise it in the Clause.
    Mr. Oram: In view of the right hon. Gentleman's explanation, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Mr. J. E. S. Simon: I beg to move, in page 17. line 18, after "supplier", to insert:
    "or by any person adversely affected by a breach of this condition".
    The Temporary Chairman: I suggest that with this Amendment the Committee should also discuss the Amendment in page 17, line 20, at the end to insert:
    Provided that the condition shall not be enforceable by a person other than the supplier unless such person has acquired similar goods subject to a similar condition.
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    and also the Amendment in page 17, line 20, at the end to insert:
    (2) Where goods are sold by a supplier to more than one person subject to the same condition as to the price at which those goods may be resold and one of the persons or a person who subsequently acquires the goods with notice of the condition in such circumstances that the condition may be enforced on him as provided by the preceding subsection is aggrieved by the omission of the supplier to enforce the condition on another person who has acquired goods from that supplier in such circumstances may require the supplier to enforce the condition on such other person.
    and the Amendment in page 17, line 20, at the end to insert:
    (2) Where goods are sold by a supplier subject to conditions as to the price at which they may be resold, such conditions shall be deemed to be imposed for the benefit of all persons dealing by way of trade in such goods or similar goods or similar classes of goods which are subject to conditions to the like effect whether imposed by the same or another supplier and shall be enforceable by such persons against any other person who acquires the goods by way of trade with notice of the conditions. as if the obligation to observe the said conditions were contained in a contract made between the parties.
    The same principle is involved.
    Mr. Simon: Clause 20 is concerned with individual resale price maintenance and therefore with the manufacturer's rights to take action himself against the loss-leader. Many of my hon. Friends and myself think that the argument for the loss-leader is exaggerated. On the other hand, one must concede that the Lloyd Jacob Report came down in favour of individual resale price maintenance.
    It said, in paragraph 83:
    "It is, we have found, generally agreed that selective price-cutting and the use of well-known proprietary articles as loss-leaders have in the past had many undesirable results…"
    In the next paragraph the Committee said:
    " The disruption of trade… brought about by these activities appear to bear particularly heavily on the retailer who, by carrying in addition a wide range of relatively slow selling lines and in some trades by offering skilled technical advice to his customers, provides a service whose value may not be recognised until it has disappeared."
    Therefore, although I have some misgivings, I would not be prepared to dissent from the general proposals in Clause 20.
    The question arises who is to enforce the right—who is really injured. The Clause itself gives the supplier of the

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    goods the right to intervene in his contract, to follow it up and enforce it irrespective of into whose hands the goods have got, and even though the defendant before the Court is a stranger to the contract. That, to some extent, is a new principle in our law, but it is what the Lloyd Jacob Committee recommended. If one is to legislate against the loss-leader it seems a reasonable way of doing it. But it is not only the supplier who is injured. He may find his retail outlets disorganised, and therefore he should have the right to take action under the Clause; but the person who is most immediately injured is the rival retailer. He may find that suddenly there is a line of branded goods put into the shop round the corner that can act as a loss-leader, and by the time he can intervene with his wholesaler and the wholesaler has taken the matter up with the supplier, the damage is done.
    Therefore, if there is a case to allow strangers to intervene under the contract to prevent the loss-leader, that is, the undesirable selling of proprietary goods at below the stipulated price, it should inure for the benefit not only of the supplier but even more for the benefit of the rival retailer. The Amendment is designed to remedy that defect in the Bill. It allows anybody who is adversely affected by the breach of the condition to intervene, provided that he has acquired similar goods subject to a similar condition.
    I suggest that this is a completely reasonable provision designed for the protection of the person who is most likely to be injured, and that it should certainly recommend itself further to many hon. Members on both sides of the Committee, in that it may be the small retailer who will need the protection.
    5.30 p.m.
    There is a second reason why I suggest that this Amendment should commend itself to the Committee. That is, that if a rival retailer is allowed to intervene in the contract, it avoids what might otherwise happen, which would mean bringing back the trade association by the back door. It might well be that if we deny this protection to the rival retailer, it may be found that the only protection against the loss-leader is the use of the trade association.
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    I have heard it argued that the proposal in the Amendment is an innovation in the law and for that reason should be discouraged.
    Mr. Leslie Hale: Hear, hear.
    Mr. Simon: I hope that the hon. Member for Oldham, West (Mr. Hale), who has very free-ranging ideas in these matters, is not assenting to that as a desirable argument.
    In point of fact, the problem before the Court under this Amendment is exactly the same as the one that will arise under the Clause as it stands. The only difference will be who is to be the plaintiff. Instead of being the supplier, it will be the rival retailer, or anyone who has bought the goods subject to the condition, who can show himself to be injured. But the same question arises under the Clause as it stands, namely, has the defendant who has bought subject to a condition as to price broken that condition?
    Mr. Hale: With respect, I do not agree with the hon. and learned Gentleman's first proposition that the Clause, as amended, provides any innovation in the law, because the attachment of covenants to property and passing them on to a purchaser has been known to the law for a thousand years. But it is an innovation to say that somebody to whom one owes no duty, of whose circumstances one does not know, who merely claims to be carrying on a similar type of business in a similar district, possibly some distance away, has been caused damage because one is selling goods purchased on a third-party basis at a penny a pound less. Where is the principle of our law that applies to that case?
    Mr. Simon: I am much obliged to the hon. Gentleman.
    There are close analogies in our law to what we propose in this Amendment. The hon. Gentleman asks where is the duty? With great respect, he is thinking too much in terms of our present law of contract. This Clause allows a stranger to intervene in the contract. It allows a supplier, even though he has no direct contract with the retailer, to intervene in it, even though under our existing law he is owed no duty. All we seek to do is to allow the rival retailer, who is equally or more injured, to have the same remedies.

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    There are provisions in our law which are close to this, such as those in regard to a building estate, about which the hon. and learned Gentleman knows much more than I do. Where a building estate is sold off into plots of land, the people who own plots can intervene against any one breaking a restrictive covenant which is similar to one that they have bound themselves to observe. If the owner of the land sells off his land in building plots, each of which is subject to a restrictive covenant, and the neighbour who has bought a plot of land similar to one's own and subject to a similar covenant breaks that covenant, one can intervene and get an injunction to stop him from doing so.
    That is a close and exact analogy to what is provided for under the Amendment. There are other analogies in the law of strangers intervening, but the one I have given as an example is so close, and the grounds for it are so closely allied to those which have animated my hon. Friends and myself in putting down this Amendment, that there is no need to elaborate the point further. The law implies an understanding that all people who bought subject to similar considerations will play fairly with one another. It is because the Amendment seeks to give legislative enshrinement to the principle of fair play and fair dealing in trade that I unhesitatingly commend it to the Committee.
    Sir L. Ungoed-Thomas: I hope that the President of the Board of Trade will not accept the Amendment. We approach the Clause with considerable misgiving, but at any rate there is a clear distinction between the Clause and the kind of case put by the hon. and learned Member for Middlesbrough, West (Mr. Simon).
    There is at any rate a feasible case that where an individual owner has goods, it might not be so unreasonable that he should state the conditions which should attach to the goods which he manufactures. That is a typical case. But there is all the difference in the world between a proposal of that kind and a proposal that people who have no hand in the making of the goods, no interest in the goods, no connection with the supplier of the goods, a person to whom, as my hon. Friend the Member for Oldham, West (Mr. Hale) has pointed out, no duty is
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    owed in respect of the goods, should be able to enforce the condition applying to those goods.
    Mr. Simon: Will the hon. and learned Gentleman show in what way that differs from the case of adjoining buyers of land on a building estate?
    Sir L. Ungoed-Thomas: I am coming to that. There is all the difference in the world between that case and this one, and we shall deal with it in due course.
    There is a clear distinction between the manufacturer and the supplier of his own goods who can lay down conditions about them and make conditions enforceable by the Court. I am sure that the hon. and learned Gentleman recognises the demarcation?
    Mr. Simon: If the hon. and learned Gentleman asks me, that element is common to both cases. That element is equally common to the case I quoted, namely, that the manufacturer makes his conditions and they run with the goods. The only question is who can enforce them?
    Sir L. Ungoed-Thomas: Yes, but, of course, that is the whole substance of the case. With his knowledge of the law and rights and duties, and the right of resorting to the court which arises from them, surely the hon. and learned Gentleman is not suggesting that there is no point of legal substance in his Amendment.
    Mr. Simon: No.
    Sir L. Ungoed-Thomas: Of course not. Then we are agreed so far.
    There is all the difference in the world between the case of a supplier of goods, the conditions applying to the goods and his being given a right of enforcement in respect of those goods, and the case put forward by the hon. and learned Gentleman, that of another retailer or wholesaler or somebody else who has no connection at all with the goods.
    Mr. Simon: I really cannot allow the hon. and learned Gentleman to say that. If he will look at the second of the Amendments which we are considering he will see that it says:
    "… the condition shall not be enforceable by a person other than the supplier unless such person has acquired similar goods subject to a similar condition."
    Sir L. Ungoed-Thomas: Yes, it is "similar goods subject to a similar condition"; but what is the width of that? Is the person who obtains aspirin to be allowed to enforce conditions?
    Mr. Simon: Yes.
    Sir L. Ungoed-Thomas: The hon. and learned Gentleman replies "yes". Then there is no case at all except the ordinary case of collective enforcement, and that is the whole substance of the approach to the Clause.
    Let us take the case of a building estate which the hon. and learned Gentleman mentioned. That is entirely different from this matter. In the first place, the covenants in respect of building estates are linked with restrictive covenants affecting the land, a very old and ancient anomaly in our law. Secondly—this is the important point which differentiates it from the purposes which the hon. and learned Gentleman has in view—it is done because it is considered that all the persons in the building estate are affected by it. The covenant is entered into for the benefit of all the members of the estate. Therefore, one has there a nexus of common interest, common obligation, etc., interpreted by the law, which is entirely different from the case that we have here.
    The real justification for the case put forward in the Amendment—it is not a justification with which I should agree—is that anyone who is affected should be allowed to enforce the condition. That is really the same justification as there is for collective enforcement; namely, that anybody who is affected by a breach of condition should be entitled to go to the Court and say that he wishes to enforce the condition. That is entirely different from the principle of Clause 20, which is that the person who supplies the goods should have the right to enforce the condition.
    In our view, the Amendment opens up a wide resort to enforcement of restrictive practices and would lead to a kind of collective interest in enforcing restrictive practices which is entirely contrary to the principle of Clause 20, and one to which my hon. Friends and I take exception.
    5.45 p.m.
    Sir J. Hutchison: We have listened to the legal dialectics of two hon. and learned Members. I am not learned in the law and, consequently, I cannot follow on that tack.
    I would say to the hon. and learned Member for Leicester, North-East (Sir L. Ungoed-Thomas) that I should have thought that a retailer or wholesaler, or indeed anyone who handles goods, had an interest in the goods and that it would not be just the manufacturer or the processor. The whole complex of selling, handling and moving an article is as important as the processing of it. Unlegal as I am, if I may coin a word, I was not much impressed by the argument.
    Sir L. Ungoed-Thomas: I do not want to be at cross-purposes with the hon. Member. I do not know whether or not he appreciates that this would allow a competing retailer to enforce the obligation—someone who has not had any of the goods.
    Sir J. Hutchison: Surely it would only allow a competing retailer handling the same goods under the same conditions to enforce the obligation. At any rate. that is what is intended by the Amendment.
    Perhaps I may return to the economic and equity side of the argument and for the moment leave the purely legal side. It is generally accepted that the great bulk of British business is in the hands of small men. Probably in numbers the employees in this country are still dominated by those employed by small manufacturers, small wholesalers and small retailers.
    The man about whom I am concerned is the retailer who has bought his goods under certain conditions or undertaken to sell them under certain conditions, and has a competitor who is extremely important and influential and breaks those conditions, thereby damaging the smaller man. If the supplier of the goods takes no action in the matter, the small man may be permanently injured, and may easily be put out of business. That is a highly undesirable state of affairs. These small men should not be put in the position of having the dice cast against them. The purpose of the Amendment is to ensure that some recourse should be available to the small retailers.

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    It would, I think, be accepted as a general principle that, the same goods being handled and the conditions being the same, it is only fair that the same prices should apply, and if one of the retailers breaks the conditions, another retailer who has accepted to sell the goods on the same conditions should be able to have the original conditions enforced.
    I want to repeat a question which was asked by the hon. Member for Orkney and Shetland (Mr. Grimond). I am not clear what the President of the Board of Trade's reply would be. The hon. Member asked whether an association whose agreement had been approved would be entitled to enforce individual price maintenance on behalf of a member. If the answer is "Yes" I think the whole of the circumstances alter. I should be most interested to hear the President's reply.
    Mr. Donald Wade: I should also be interested to hear the President's reply to the question just posed by the hon. Member for Glasgow, Scotstoun (Sir J. Hutchison).
    I have grave doubts whether it would be advisable to adopt the procedure laid down in Clause 20. The discussion on the Amendment has indicated some of the difficulties that may arise once we introduce that kind of procedure. Assuming that this procedure is adopted, I can see that there is something to be said for the case put forward by the hon. and learned Member for Middlesbrough, West (Mr. Simon).
    I should not like to press too far the analogy with land. In the case of the building estate, the assumption is that the owner of a certain plot of land who wishes to enforce a restrictive agreement has taken the plot on the understanding that one of the benefits running with the land is the right to enforce restrictions upon the owners of other plots of land. I am very doubtful whether that is implied or written into contracts relating to goods.
    The general question, however, I approach in this way. On an earlier Clause, I tabled an Amendment, which was not called, the purport of which was to ensure that parties who felt aggrieved by restrictive arrangements would have a right to appear before the Restrictive Practices Court to state their
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    case. If one accepts the general principle, I would think that there should also be procedure whereby a retailer who fears the effect of loss-leaders—the main fear in the mind of the retailer, which accounts for his support for the policy of price maintenance, is the potential effect on him of loss-leaders—can bring his complaint before a court, although I should have thought that under some contracts, at any rate, he would have the right to complain to and proceed against the common supplier.
    On the Amendment, however, I do not feel happy about the wording
    "by any person adversely affected by a breach of this condition".
    This goes too far. It is not so much on the principle but rather on the wording that I do not feel able to support the Amendment.
    Dr. Johnson: I support the Amendments as a consequence of my interest in the book trade. Our anxiety is that which has been already expressed concerning the small retailer and the small bookseller. Perhaps I may be excused for giving a resume of our position. We have our net book agreement, which we hope would be approved under the arrangements in Clause 16, paragraph (b). Next, we come to the question of enforcement of the agreement, which hitherto has been enforced by the procedure of collective price maintenance.
    Under Clause 19, however, the President of the Board of Trade would take the agreement, so to speak, to the dentist, who, first, would yank out the upper teeth under subsection (1) and then the lower teeth under subsection (2). Now, we come to Clause 20, which is, so to speak, the orthodontic department. I would not be so unkind as to say that false teeth are being inserted, but what is being inserted is only an upper set and not a lower set. The supplier—in our case the publisher—has his remedy, but the bookseller or retailer is left with no remedy whatever other than the rather uncertain one of a complaint to his supplier.
    The anxiety in the book trade is increased by the realisation that it is not necessarily in the immediate interests of a publisher to maintain his prices. There might be either the large rogue publisher, who can defy anyone and do as he likes within the trade; or, on the other hand,

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    there is the danger of the small publisher with a heavy depreciating stock—and nothing depreciates more quickly than a book after publication—who is in a somewhat desperate financial position.
    Both of those people have a temptation not to maintain their prices but, on the other hand, to let their prices go, with the large publisher selling the best seller as a loss-leader and the small publisher selling off stocks of what might be quite attractive and good books and which could very well be picked up by a department store for its book department and sold in a similar manner to the loss-leader. That is the main fear of the trade.
    Books as a loss-leader are a particularly suitable commodity for the large department store. The type of book which is suitable for the loss-leader—the best seller, of course, such as "The Cruel Sea" and books of that character—is just the thing which under the modern conditions of trade is essentially the small bookseller's bread and butter. He relies upon them to keep him afloat and to maintain his slow moving stock and to enable him to give to the public the service that is expected of him.
    It is a fallacy to think that if this system of loss-leaders, and so on, develops, books will be cheaper in the long run. The danger that faces the trade. if this develops, is that, with the loss of that type of business, the small retailer will go out of business. There would be a closing down of markets and the publisher, in turn, would have a narrower market and smaller editions for his books. As a consequence, the price of books would not go down, but would definitely go up.
    For the benefit of hon. Members opposite, I should like to read a quotation from The New Statesman and Nation of 14th April this year, giving conclusions concerning the book trade:
    "Under price-cutting conditions best-sellers might sell even better than at present, but if the general level of sales in Britain of the 250,000 titles in print were depressed, it would have an immediate effect on book sales abroad. These are running at about £17 million a year. Falling home sales would involve higher prices for books, and as books are Britain's biggest cultural export, the loss of price stability might have far wider repercussions than purely commercial ones."
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    I have said that our market hitherto has been kept up by the operation of collective price maintenance. I agree with my hon. Friend the Member for Heston and Isleworth (Mr. R. Harris), who regretted that no exceptions are possible to the prohibition under the Bill. We cone, however, to the question of individual enforcement. Obviously, in the circumstances as we visualise them in the book trade, this will be a capricious matter. On the one hand, these conditions may work; on the other hand, they may not work—we do not know. If they do not work, it will be the small retailer and the small manufacturer or publisher who suffers in consequence.
    Looking at the position of the small retailer—looking for the moment at a wider sphere than book publishing and considering, say, motor traders, chemists. and so on—there is only one remedy for the small retailer under the Bill in its present form. That is under Clause 19 (3), under which he or several other small retailers may get together and form an inter-connected body corporate and so protect themselves in this way. In other words, they would be forming a trust or monopoly.
    We have surely to remind ourselves that this is an anti-monopoly Bill. I am sure that it is not the intention either of my right hon. Friend the President of the Board of Trade or of hon. Members, on either side, that small retailers should go out of business or even that fresh monopolies should be born, the effect of which obviously would not be to lower prices, but eventually to close down on the consumer and to raise prices. For these reasons, I hope that my right hon. Friend will favourably consider the Amendments.
    6.0 p.m.
    Mr. P. Thorneycroft: This Clause gives to the suppliers a right which they have never had before, a right to enforce in the courts the prices which they wish to have maintained in each particular case not only against the people with whom they are in privity of contract, but beyond. This Amendment would allow one trader to instigate legal proceedings against a competitor for indulging in price competition. I do not propose to enter into a debate with my hon. and learned Friend the Member for Middlesbrough, West (Mr. Simon) about the

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    analogy of the law of real property, but I do say that this would be a startling innovation in the English legal system.
    There have been some criticisms that the new legal right of suppliers goes too far and gives a force to resale price maintenance which should not be there. I have defended it and will, if necessary, do so again. But whatever we think about that this Amendment goes much wider and further. In my view, and in the view of the Government this raises quite a different issue from the one we are now considering. The issue we are here considering and the issue which has been discussed, debated and analysed in one quarter after another, is whether or not the manufacturer should be able to carry the price of his goods beyond the wholesale stage to the retail stage and see at the retail outlet that it is sold at a level price.
    After great argument and debate the Lloyd Jacob Committee came down on the side of saying that it should be allowed. The Committee made some reservations about which we may hear later, but at any rate there is evidence, and a basis on which the case may well be sustained, that the manufacturer should have that right for his own goods. The Lloyd Jacob Report states specifically that the manufacturer should not do it for someone else's goods.
    In that Report, it was not even suggested that the individual retailer should start suing. After all, when the manufacturer does it, he acts with a special sense of responsibility. He exercises some flexibility in his judgment about these matters. But were we once to introduce into the English legal system a right whereby any individual retailer could sue any other retailer selling the same sort of goods from the same supplier, it would apply in every case. The moment there was any sign of price cutting there would be an action before the court, and I do not know where we would end with an arrangement of that kind.
    I appreciate that in these complex matters there is force in the argument on all sides and, in particular, in the one about the loss-leader. The loss-leader hits the manufacturer and that is the danger. The loss-leader was the main
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    argument which impelled the Lloyd Jacob Report and other reports to come down in favour of individual resale price maintenance. That is the argument which led them to the conclusion that it is wrong to suppose that the manufacturer will be indifferent to the matter.
    It is in the interests of the manufacturer to see that his distributive system is not disrupted. He depends on the good will of the retailers in matters of this kind. He will not discriminate between one retailer and another, and lose a useful and valuable retail outlet, and a carefully constructed distribution organisation, by treating one retailer in a way which is manifestly and harshly unfair compared with his treatment of other retailers.
    It is true that in some other countries an arrangement of this kind—I will not say has been introduced—has been attempted; I will not say more than that. As some hon. Members know, in the United States arrangements of this kind have not worked very satisfactorily. This system of cross actions by retailers is not one which could be fitted easily into any legal system and in some countries, like Canada and Sweden, the whole system of individual price maintenance has been taken away altogether. The argument may well be advanced that this should be done. I do not advance that argument. But I say that to introduce into this Bill an arrangement which gives the right not only to the supplier or manufacturer—who has a real, substantive interest in the matter and whose right has been formally made out in two massive Reports on the subject—but also to the retailer, is carrying this Bill and this Clause far beyond the present intention.
    My hon. Friend the Member for Carlisle (Dr. D. Johnson) mentioned the net book agreement. I fully appreciate the interest of hon. Members in an arrangement of this kind. May I say at once that this Bill does not outlaw the net book agreement. That needs to be said, because there is some misapprehension about all these things. To start with, every publisher will be as free tomorrow as he is today to say at what price his books should be sold and what margin should be held at the retail stage, and so forth. If he wishes to agree with other publishers to maintain prices, he is free

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    to come to a mutual arrangement of that kind, to register that agreement and, in due course, to have it considered and discussed before the Court. I have no doubt that a fair hearing will be given to the arguments and that, if it is proved, the agreement will stand. All that will change will be that individual manufacturers will have to take their own actions in the matter.
    I do not accept the view that individual manufacturers or publishers do not take action on these matters. To contend that is merely to contend against the case for resale price maintenance. After all, if there is an interest in these matters people will have an interest to see that they are, in fact, carried out; and in my judgment that new right is far more convenient and at any rate far less open to public criticism than the massive arrangement of private courts, and stop lists and the rest of it. If there is a clear case of loss-leading I have no doubt that the rights we give in Clause 20 will be used.
    I have sympathy with the arguments which have been addressed to me in this matter. In particular, I wanted the opportunity to answer my hon. Friend the Member for Carlisle. We do not outlaw the net book agreement by these arrangements, but I hope very much that the Committee will not press me on these Amendments, which would introduce a manifestly new principle into English law.
    Mr. Hale: I wish briefly to reply to the two or three observations which have been directed towards me. I apologise to the hon. Member for Carlisle (Dr. D. Johnson) for not realising at what point his upper and lower dentures were mixed in the book publishers' bread and butter; and, therefore, if for once I do not follow him, he will understand why. I am always interested to hear about books, and perhaps on some other occasion we might even have further discussion on this matter. If the hon. Member will arrange with Rolls-Royce to provide cars to convey the publishers to the Mayfair Hotel, I will arrange for a supply of boots and shoes from the co-operative society for the authors so that they may walk up from Shoreditch, and then we can have a further discussion upon the interlocking problems of the book industry.
    The hon. and learned Member for Middlesbrough, West (Mr. Simon) produced a fantastic analogy in support of
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    his proposition that there was some legal system in this from the old law relating to building estates, where, of course, each participant was regarded, so to speak, as having the interest of a club member in the welfare of the estate. That was desirable, but it was found to be too rigid and was repealed. In the Law of Property Act it no longer exists, to the extent that any person who considers that he has a special case can apply. But, on the whole, it was not the hon. and learned Member's happiest example of policy.
    I was cheered to hear my hon. and learned Friend the Member for Leicester, North-East (Sir L. Ungoed-Thomas) take the view which he did. I was rather afraid that I might have spoken out of turn in expressing a proposition which my emotions prompted me to express, but which was not about to be accepted by the party to which I belong, and which would have placed me in a somewhat difficult situation. I am fortified now to know that that is not so.
    If we look at the Clause we see that what is suggested is the most fantastic example of the encouragement of litigation that has ever been put before the Committee. This does not apply to the next-door neighbour. Speaking in parenthesis, Sir Rhys—first, because I may be out of order, and, secondly, because my party might not approve—I do not much like Clause 20 at all. I find some real difficulties about it. In the Amendment we are dealing with a man who buys a retail shop to stock with goods. Suppose he does not like the goods. Suppose he is a chemist who does not like Mother Siegel's Syrup and says, "I want to put in something which I think is better ". Suppose he knows of some other health salts which someone says will produce something two hours more quickly. Why should he not do so? I do not know.
    Directing myself to the exact terms of the Amendment, I would point out that when Sir Henry Hawkins was making a fortune out of railway compensation cases it was suggested that there was a special case for the chemist to have adequate compensation because he was not in an attractive part of the town. He ridiculed that by saying that he could imagine a man passing a nice little "pub" and saying to his friend, "Here is a nice little place. Let us pop in and have a quick one," but no one passing a chemist's shop would say, "Let us pop in and have half

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    a truss." It is not the man next door against whom he can apply for an injunction. The competitor concerned may be ten miles away.
    Mr. Simon: Does the hon. Member think that is a likely contingency, that a man ten miles away would be adversely affected?
    Mr. Hale: That is precisely what does happen. It has been suggested that the bulk of the business is in the hands of the little man. That may be true, but the little man is in the hands of the big man. A firm of multiple chemists would obviously be interested in this.
    I depart from Sydenham Hill every morning and return there every night—well, most nights—but I am not the only person who does so. About 1,000 other people do so. I can imagine a man at Sydenham Hill saying, "A shop at Victoria Station is starting undercutting" and all those people, before returning to Sydenham, would buy their books at Victoria. What is to stop them doing so?
    Mr. Simon: If the hon. Member is asking me, what would stop such a happening is that the retailer concerned would have to prove that he was adversely affected; and he could not possibly prove it in a case like that.
    Mr. Hale: The hon. and learned Member should really face the consequences of his Amendment. The retailer concerned does not have to prove anything to start with, but has to apply for an injunction. I used to observe that nearly all my clients came to me on a Monday morning when they had had a day of prayer and a day of anxiety the day before. These are worrying matters. Why should the retailer be faced with this?
    The hon. Member for Huddersfield, West (Mr. Wade) put a point which has not been answered. If a retailer thinks that he is being affected, what does he have to do? He has to ring up the manufacturer and say, "This is your business. Are you going to stop him, the other retailer, or are you not?" The manufacturer either says, "Yes, I shall proceed under Clause 20"—if we pass the Clause, and I hope we shall not do so—or he says, "This is so small a matter that I am not interested." If it is so small a matter that the wholesaler is not interested, why
    1068
    should we be interested? Hon. Members are introducing an Amendment which would complicate the position for most retailers and place them in difficulties without limit, geographical or otherwise.
    6.15 p.m.
    Mr. Gresham Cooke: I think we must pay some attention to the fears of retailers under this Clause. In the Clause the Government have accepted the principle of resale price maintenance, but in my submission they have not really paid attention to all the fears which retailers are expressing.
    There are three classes of fears which retailers have. One is that they might be selling the goods of a very weak manufacturer who would not be likely to bring an action against a big distributor. That would be a usual case. In another case the manufacturer may not care to maintain his price and in a third case there may be two retailers in one town—
    Mr. Roy Jenkins: Is the hon. Member now suggesting that the manufacturer who does not wish to maintain his price—that was his phrase—should be forced to do so?
    Mr. Gresham Cooke: I am not suggesting that, but I wish to bring forward a suggestion.
    Suppose two retailers in a town are selling somewhat similar goods. If one retailer begins vigorously to slash his prices what remedy has the other retailer got? The only remedy he has under the Clause is to go back to his manufacturer and ask him to speak politely to the other manufacturer and get that manufacturer to try to persuade the other retailer to maintain his price. That is a very real fear on the part of retailers.
    Mr. W. T. Williams: If the manufacturer does not want to maintain his price, as the law stands, or even if the Amendment were passed, the aggrieved retailer would have no remedy in those circumstances, anyway.
    Mr. Gresham Cooke: I am saying that it is a very cumbersome and roundabout way of dealing with the question rather than having a direct action as between one retailer and another. Although this may be somewhat of an innovation in British law, there is nothing very startling

    1069
    about it in the Western world. This Clause is based on the American practice. In the debate last July, the Attorney-General said:
    "If we can find methods of enforcement which are effective without collective boycott and private courts, then, of course, it would follow that it would be possible to prohibit such methods, maybe by adopting some of the ' non-signer ' arrangements which are current in other countries."—[OFFICIAL REPORT, 13th July, 1955; Vol. 543, c. 2060–1.]
    This Clause is a "non-signer" Clause based on legislation which has been accepted in 45 American States. Even as recently as 1951 and 1952, when there was some disastrous price cutting going on between retailers in America, the Maguire Act was passed to overcome the defects of enforced resale price maintenance in industry and commerce. Recently, in New York, actions have been brought by retailers against other retailers of chemists' goods and other goods when retailers broke manufacturers' prices. This may be novel to this country, but it is not a startling innovation in legislation, as it has been accepted in America for many years and has been enforced recently.
    Sir L. Ungoed-Thomas: I have been looking at the Amendment to see whether I understand it. Is the hon. Member for Twickenham (Mr. Gresham Cooke) really suggesting, for instance, that the retailer of "Aspro" who buys from one manufacturer should have a right of action against a retailer of "Genasprin" who buys from another manufacturer if the retailer of "Genasprin" reduces his price? Is that really the proposal?
    Mr. Gresham Cooke: Where both manufacturers advertise and give notice of the price of "Aspro" and "Genasprin," if retailer A breaks the price I do not see why retailer B should not be able to take action.
    Sir L. Ungoed-Thomas: Although there is no agreement between the manufacturers of "Aspro" and "Genasprin"?
    Mr. Gresham Cooke: I agree that there is no privity of contract. As my hon. and learned Friend the Member for Middlesbrough, West (Mr. Simon) said, this is not a new principle. We get the principle already on the sale of plots of land where restrictive covenants are entered into by buyers of land and one enforces against the other.
    Sir L. Ungoed-Thomas: That is quite wrong. It is a quite startling proposition.
    Mr. Gresham Cooke: I merely say that I should like to support what my hon. and learned Friend the Member for Middlesbrough, West said. As we have accepted the principle of resale price maintenance in this Clause, I would like to see the retailers have a direct right of action instead of having this cumbersome arrangement of having to go back to their own manufacturers.
    Mr. P. Thorneycroft: I am grateful to my hon. and learned Friend the Member for Middlesbrough, West (Mr. Simon) for tabling this Amendment and enabling us to have a discussion on a subject which is of importance—the question of the position of retailers under this arrangement. It has given me an opportunity of explaining the enforcement arrangements which are available and, although they do not go quite so far as my hon. Friends would wish, they are substantial and in many ways novel in this country. I hope that with that explanation, my hon. and learned Friend will see his way not to press for the Amendment.
    Mr. Simon: When I find the hon. and learned Gentleman the Member for Leicester, North-East (Sir L. UngoedThomas), speaking on this occasion with the accents of Lord Eldon, in agreement with my right hon. Friend the President of the Board of Trade, I realise that there is very little chance of getting this Amendment accepted by the Committee. Although I confess that I have not been impressed by all the arguments put forward, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Mr. E. Fletcher: I beg to move, in page 17, line 20, at the end to insert:
    Provided that the contract under which such person acquired the goods for resale itself contained a condition as to the price at which such goods might be resold.
    In this Amendment we want to look at the matter from the point of view of the retailer against whom the contract is to be enforced. Therefore, we are looking at it from the reverse angle from that which we were considering on the last Amendment when we were considering who should enforce individual retail price maintenance. I do not quite agree with what the President said a moment ago,

    1071
    that we were giving manufacturers a right that was entirely novel in this country. What he had in mind, I think, was that since the well-known case of Dunlop Tyre Co.v. Selfridge &Co. in the House of Lords, in 1915, it has, in fact, been impossible for a person to sue on a contract to which he is not a party.
    It is very largely because of that decision that the whole of this extra legal system of private courts, stop lists, fines, and so forth, has grown up. I think that where I differ from the President is this. As Lord Justice Denning pointed out in a recent case—Drive Yourself Hire Co.v. Strutt—there is good warrant for saying that the decision in Dunlop v. Selfridge reversed the old common law and that for about 200 years the position was quite different. In the old days a party could at common law enforce a contract in which he had an interest, although he was not a party to it.
    Where I think the President has gone wrong in this subsection is in looking at the matter from the wrong point of view. The common law, as I understand it, was this. If a manufacturer A made a contract with a wholesaler B providing that a particular article should only be resold at a certain price and requiring the wholesaler B to enter into a similar contract with any retailer C, then, if B entered into such a contract with C, A, in the old days, could have enforced the contract directly against C although he was not a party to the contract with C. That, however, has not been the law since the decision of the House of Lords in Dunlop v. Selfridge.
    There, the point was that C, the retailer, had made a contract with B, the wholesaler, to sell the article at a particular price and personally I think that it is desirable, contrary to the decision of the House of Lords in Dunlop v. Selfridge, that A, for whose benefit C entered into that contract, should be able to enforce it directly against C, the retailer.
    If Clause 20 had been constructed on those lines, I would have been in agreement with it. But it is not. What the President has done is this. He is providing that if A makes a contract with B for the sale of an article to a wholesaler B, then, if retailer C sells the articles with notice of that contract, A, the manufacturer, can enforce against C. The
    1072
    difficulty about that is that there is not necessarily any contract between B and C. This Clause is providing that A can enforce his contract not only against B but against someone else, the retailer who has notice of it. I think that that is an unfortunate way of drafting it, and I would have thought that it would have been a prerequisite of this legal method of enforcing individual resale price maintenance that there must be a contract between B and C which is to be enforceable by A. I think that that is the result we should aim at.
    The only way, without a great deal of redrafting of the whole Clause, in which we can bring about that result is by putting down this Amendment, the effect of which is to extend the operative words "with notice" to provide that the person against whom the contract is, exhypothesi, being enforced acquired the goods for sale under a contract which itself contained a condition as to the price at which such goods might be resold. In other words, the doctrine of the enforcement of price maintenance by contract must, it seems to me, be based on contract and based primarily on a contract made by the person against whom it is to be enforced.
    It is not enough to say that a manufacturer and a wholesaler made a contract and gave notice to the retailer. If that is the doctrine, then we get all kinds of doubt as to the circumstances in which the retailer gets notice, whether he must have written notice, whether he must have express notice, whether he has implied notice because there has been something in the Press or trade Press, or because he has bought similar articles under similar conditions before. I can foresee a whole range of debatable circumstances in which it is arguable whether the retailer is to be deemed to have had notice or not.
    The object of this Amendment is to ensure that, as a basis of enforcement against a particular retailer, he himself should have entered into a contractual obligation with his supplier to resell at a particular price. If he has done so, I would think it right that the contract he has made should be enforceable against him not merely by his wholesaler, but by his manufacturer. That is the object of the Amendment, and I hope that the

    1073
    arguments in favour of it will commend themselves to the President of the Board of Trade.
    Mr. P. Thorneyeroft: I want to be fair to the Committee and make absolutely plain what I am trying to do here, whether anyone agrees with it or not, and then we can examine the wording.
    What I am trying to do is to give the manufacturer the right to maintain an interest in the price at which his goods are sold past the wholesale stage right down to the retail stage. That is what I am doing, or intending to do. In that, I base myself on the Lloyd Jacob Report.
    I will not read long passages from the Committee's Report, but the argument was set out at length that for a variety of reasons—the need for a large-scale manufacturer to have long runs at stable prices, for instance—it was right for a manufacturer in those circumstances to maintain his prices. He cannot do it by contract. I accept the hon. Member's argument; I may be wrong, but I believe that the manufacturer cannot do it by contract because there is no contract between A and C in the hon. Member's illustration.
    6.30 p.m.
    But I want him to be able to do it. I do not want him to be at peril whether the wholesaler happens to strike a contract with the retailer; that is not my purpose, and I do not want to leave the matter to luck. I am stating my purpose plainly because I want the Committee to understand it. I accept the Lloyd Jacob contention that there are solid, respectable, economic arguments in favour of the right of the individual manufacturer to preserve his contract over prices down the line, if I may use the shorthand expression for it.
    Mr. Turner-Samuels: As long as there is notice.
    Mr. Thorneycroft: I am obliged; as long as there is notice.
    That is why we have not said that there should be a contract between A and C. If there is a contract, to some extent this provision would not be so necessary, because action could probably be taken under the contract. I am facing the case in which there is no contract but in which notice is given by the manufacturer of the price at which his goods are to be sold.
    Mr. Turner-Samuels: Not necessarily notice given by the manufacturer; notice acquired by anyone.
    Mr. Thorneyeroft: Yes. As long as the retailer against whom the injunction has been brought has acquired notice of the price conditions, the Clause will operate. That is my intention. I believe that there is solid support for it in the Lloyd Jacob Report, and I ask the Committee to accept it.
    Mr. Roy Jenkins: I should declare a rather tenuous interest in this matter in that I sometimes give economic advice to a large retail organisation.
    For the purpose of discussion, I accept what the President is trying to do in this Clause, although I do not, in general, accept what he is trying to do. Although he is giving effect to that point of view, I think he should look a little more closely at possible modifications of the words, even if he cannot accept the exact wording suggested by my hon. Friend the Member for Islington, East (Mr. E. Fletcher). The words "with notice" would clearly cover the most casual passing of the information to the retailer that there was resale price maintenance. I am not even sure that it could not be done verbally. It might be given verbally by the wholesaler to a buyer of a retail organisation. Notice could be given in a whole range of ways which would make it far from clear to the retail organisation what was happening.
    Some retail organisations which dislike resale price maintenance adopt a policy not of breaking a resale price maintenance agreement in so far as it exists, but of trying to avoid buying goods to which such agreements apply. Clearly, that is a reasonable and reputable point of view and we certainly do not want to put such organisations in a position in which, through a genuine misapprehension of the conditions, they can be caught by the Clause.
    We do not want a long debate on the point, but I ask the right hon. Gentleman to bear in mind that the phrase "with notice" is the loosest possible phrase and that even if he cannot accept the Amendment he should look at the other Amendment on the Notice Paper, which is intended to cover the same point. We seek to insert the word "written" before the word "notice" and add afterwards,
    "at the time when such person contracted to acquire them"

    1075
    This is a point which gives rise to genuine concern, and I hope the right hon. Gentleman will see whether it can be covered.
    Sir L. Ungoed-Thomas: We are concerned about two aspects of the Amendment. One, which was mentioned by my hon. Friend the Member for Stechford (Mr. Roy Jenkins), concerns the words "with notice." The phrase is extremely wide. It need not be written notice; it need not be oral notice; it may be notice which arises by some kind of implication. In the case of a notice to a company, it need not be notice to the managing director, but may be notice to an agent whose agency can be fixed upon the company for the purpose of receiving notice.
    There may have been an advertisement in a paper which an agent of the company has seen and the question may arise whether this is sufficient notice within the Clause. I need not develop the point further, since the difficulties which arise are obvious, as is the nebulous nature of the wording. The Clause exposes retailers, as the President very fairly said, to an entirely new remedy; it exposes them to action in the Court. We therefore want to be precise in making clear the ground on which they will be liable.
    The second aspect which worries us is that brought forward by my hon. Friend the Member for Islington, East (Mr. E. Fletcher). May I put it this way? If there is a contract between a manufacturer and a wholesaler, the manufacturer can sue the wholesaler on the contract. The contract may include a condition that the wholesaler, in his contract with the retailer, shall require that the resale shall not be below a certain price. If the wholesaler does not include that in his contract, there would be a breach of contract on his part, on which the manufacturer has a remedy.
    I come now to the point made by my hon. Friend. Let us assume that the wholesaler has a contract with the retailer which provides that the retailer shall not sell below a certain price. There we have a very clear position; a contract between manufacturer and wholesaler providing for resale at not below a certain price; and a contract between wholesaler and retailer providing that there shall be no resale below a certain price. Under the law as it stands, if the
    1076
    wholesaler broke his contract with the manufacturer, the manufacturer would have a remedy against him, and if the retailer broke his contract with the wholesaler the wholesaler would have a remedy against the retailer.
    I completely fail to see why anything more is necessary than that the manufacturer should be given a remedy direct against the retailer instead of bringing in the wholesaler. If that were the approach to the Clause it would at any rate be a provision which was easily recognisable: the remedies would be there, lying in contract; the contracts would be before the court in a form which was easily recognisable and there would not be the ambiguity which we have about the word "notice." In fact, the manufacturer would be provided with a direct remedy against the retailer.
    I understand the position that where there is a contract between a manufacturer and a wholesaler, and between a wholesaler and a retailer, in the cases which I have mentioned, the manufacturer could not bring an action against the retailer without bringing in the wholesaler as well; and I can understand that in those circumstances it would be better to cut the wholesaler out. There would be advantages to the manufacturer in doing so. But it seems to me that it is asking for trouble and putting an undue burden on the retailer, as well as going much further than is reasonably necessary, even according to the President's own approach to the problem, to go any further than the proviso which my hon. Friend has brought before the Committee.
    Sir Lancelot Joynson - Hicks: The Amendment simply is not practicable and I hope that my right hon. Friend will not accept it. One can take the case of the village store, where the woman behind the counter says that she is sorry that she is out of a particular item but will get it by the following day. She rings up her wholesaler and orders the item. If the proposal of the hon. and learned Gentleman the Member for Leicester, North-East (Sir L. Ungoed-Thomas) were to operate, the wholesaler would have to grant a contract post it to the retailer who would have to sign it—and in the case of the village store the policeman would probably act as the witness—and post it back again. It would be

    1077
    several days before the required item was obtained.
    That, of course, is an exaggerated example, but in actual business such a provision as that proposed would so add to the complications and the machinery of trade that it would add to the expense—which is one of the things which by the provisions of this Bill we are trying to reduce—and delay the normal flow of trade through its normal channels. The answer is perfectly simple. In every case the manufacturer will succeed in giving notice by printing on the package containing the commodity just what the retail price is.
    Mr. E. Fletcher: In the case mentioned by the hon. Gentleman all that is necessary is a clause in the wholesaler's invoice to the village storekeeper saying that the retail sale price of the article is so much. That constitutes a contract.
    Mr, P. Thorneycroft: I have listened to this discussion with a genuine desire to help. The difficulty is this. Where there is the straightforward case of the manufacturer having a contract with the wholesaler and the wholesaler then having a clear contract with the retailer there is no trouble about notice at all. That is the best, the easiest and the most straightforward case of notice there could be. I do not want to bring in the village policeman or anyone else, but the truth
    is that life is not quite like that. Trade is not carried on in quite such a clear-cut manner. Indeed, with the rapid change of goods going from one stage of supply to another there will be many cases where the goods will pass without anything to which one could point as an actual contract.
    In the case in stanced by my hon. Friend the Member for Chichester (Sir L. Joynson-Hicks) there probably would have been a contract, but very often it could be extremely difficult to establish a contract, and it is important that one should establish notice. The trouble is that the notice itself will be given—according to the fashion and habit of the trade—in very different ways in different classes of trade and of goods. I therefore believe that it would be rather difficut to write a definition of notice into a Bill.
    I will certainly look at the precedents, but what is meant is a matter for the courts, and an injunction is, of course, a discretionary remedy. The safeguard is there—that it is a discretionary remedy—and no court will grant one unless it is satisfied that proper notice has been given.
    Question put. that those words be there inserted:—
    The Committee divided: Ayes 203; Noes 238.

    Division No. 173.]

    AYES

    [6.44 p.m.

    Alnsley, J. W.

    Collick, p. H. (Birkenhead)

    Gibson, C. W.

    Allaun, Frank (Salford, E.)

    Collins, V. J. (Shoreditch Finsbury)

    Gooch, E. G.

    Alien, Arthur (Bosworth)

    Corbet, Mrs. Freda

    Gordon Walker, Rt. Hon. P. C.

    Allen, Scholefield (Crewe)

    Cove, W. G.

    Greenwood, Anthony

    Awbery, S. S.

    Craddock, George (Bradford, S.)

    Grey, C. F.

    Bacon, Miss Alice

    Cronin, J. D.

    Griffiths, David (Rother Valley)

    Bellenger, Rt. Hon. F. J.

    Crossman, R. H. S.

    Griffiths, Rt. Hon. James (Llanelly)

    Bence, C. R. (Dunbartonshire, E.)

    Cullen, Mrs. A.

    Griffiths, William (Exchange)

    Benson, G.

    Daines, p.

    Hale, Leslie

    Beswick, F.

    Dalton, Rt. Hon. H.

    Hall, Rt. Hn. Glenvil (Colne Valley)

    Blenkinsop, A.

    Darling, George (Hillsborough)

    Hamilton, W. W.

    Blyton, W. K.

    Deer, G.

    Hannan, W.

    Boardman, H.

    de Freitas, Geoffrey

    Harrison, J. (Nottingham, N.)

    Bowden, H. W. (Leicester, S.W.)

    Delargy, H. J.

    Hastings, S.

    Bowen, E. R. (Cardigan)

    Dodds, N. N.

    Hayman, F. H.

    Bowles, F. G.

    Donnelly, D. L.

    Healey, Denis

    Boyd, T. C.

    Dugdale, Rt. Hn. John (W. Brmwch)

    Henderson, Rt. Hn. A. (Rwly Regis)

    Braddock, Mrs. Elizabeth

    Dye, S.

    Hobson, C. R.

    Brockway, A. F.

    Ede, Rt. Hon. J. C.

    Holmes, Horace

    Broughton, Dr. A. D. D.

    Edwards, Rt. Hon. John (Brighouse)

    Houghton, Douglas

    Brown, Rt. Hon. George (Belper)

    Edwards, Rt. Hon. Ness (Caerphilly)

    Hubbard, T. F.

    Brown, Thomas (Ince)

    Edwards, Robert (Bilston)

    Hughes, Cledwyn (Anglesey)

    Burke, W. A.

    Evans, Albert (Islington, S.W.)

    Hughes, Emrys (S. Ayrshire)

    Burton, Miss F. E.

    Evans, Edward (Lowestoft)

    Hughes, Hector (Aberdeen, N.)

    Butler, Mrs. Joyce (Wood Green)

    Evans, Stanley (Wednesbury)

    Hunter, A. E.

    Castle, Mrs. B. A.

    Fernyhough, E.

    Irvine, A. J. (Edge Hill)

    Champion, A, J.

    Finch, H. J.

    Irving, S. (Dartford)

    Chapman, W. D.

    Fletcher, Erie

    Isaacs, Rt. Hon. G. A.

    Chetwynd, G. R.

    Forman, J. C.

    Janner, B.

    Clunie, J.

    Fraser, Thomas (Hamilton)

    Jay, Rt. Hon. D. P. T.

    Coldrick, W.

    Gaitskell, Rt. Hon. H. T. N.

    Jeger, George (Goole)

    Moyle, A.

    Steele, T,

    Jenkins, Roy (Stechford)

    Mulley, F. W.

    Stokes, Rt. Hon. R. R. (Ipswich)

    Johnson, James (Rugby)

    Neal, Harold (Bolsover)

    Stones, W. (Consett)

    Johnston, Douglas (Paisley)

    Oliver, G. H.

    Summerskill, Rt. Hon. E.

    Jones, Rt. Hon. A. Creech (Wakefield)

    Oram, A. E.

    Swingler, S. T.

    Jones, David (The Hartlepools)

    Oswald, T,

    Sylvester, G. O.

    Jones, Jack (Rotherham)

    Owen, W. J.

    Taylor, Bernard (Mansfield)

    Jones, J. Idwal (Wrexham)

    Paling, Rt. Hon. (Dearne Valley)

    Taylor, John (West Lothian)

    Jones, T. W. (Merioneth)

    Paling, Will T. (Dewsbury)

    Thomas, lorwerth (Rhondda, W.)

    Kenyon, C.

    Pargiter, G. A.

    Thomson, George (Dundee, E.)

    Key, Rt. Hon. C. W.

    Parker, J.

    Thornton, E.

    King, Dr. H. M.

    Parkin, B. T.

    Tomney, F.

    Lawson, G. M.

    Paton, J.

    Turner-Samuels, M.

    Lee, Frederick (Newton)

    Pearson, A.

    Ungoed-Thomas, Sir Lynn

    Lee, Miss Jennie (Cannock)

    Plummer, Sir Leslie

    Viant, S. P.

    Lewis, Arthur

    Popplewell, E.

    Warbey, W. N.

    Logan, D. G.

    Price, J. T. (Westhoughton)

    Watkins, T. E.

    Mabon, Dr. J. Dickson

    Price, Philips (Gloucestershire, W.)

    Weitzman, D.

    MacColl, J. E.

    Probert, A. R.

    Wells, Percy (Faversham)

    McChee, H. G.

    Proctor, W. T.

    Wells, William (Walsall, N.)

    McGovern, J.

    Pryde, D. J.

    West, D. G.

    McInnes, J.

    Randall, H. E.

    Wheeldon, W. E.

    McKay, John (Wallsend)

    Redhead, E. C.

    White, Henry (Derbyshire, N.E.)

    MeLeavy, Frank

    Reeves, J.

    Wilcock, Group Capt. C. A. B.

    MacMillan, M. K. (Western Isles)

    Reid, William

    Willey, Frederick

    MacPherson, Malcolm (Stirling)

    Robens, Rt. Hon. A.

    Williams, David (Neath)

    Mallalleu, E. L. (Brlgg)

    Roberts, Albert (Normanton)

    Williams, Rev. Llywelyn (Ab'tillery)

    Mann, Mrs. Jean

    Roberts, Goronwy (Caernarvon)

    Williams, W. R.(Openshaw)

    Marquand, Rt. Hon. H. A.

    Rogers, George (Kensington, N.)

    Williams, W. T. (Barons Court)

    Mason, Roy

    Ross, William

    Wilson, Rt. Hon. Harold (Huyton)

    Messer, Sir F.

    Royle, C.

    Winterbottom, Richard

    Mikardo, Ian

    Shinwell, Rt. Hon. E.

    Woodburn, Rt. Hon. A.

    Monslow, W.

    Silverman, Julius (Aston)

    Woof, R. E.

    Moody, A. S.

    Simmons, C. J. (Brierley Hill)

    Yates, V.(Ladywood)

    Morris, Percy (Swansea, W.)

    Skeffington, A.M.

    Zilliacus, K.

    Morrison, Rt. Hn. Herbert (Lewis'm, S.)

    Slater, J. (Sedgefield)

    Mort, D. L.

    Smith, Ellis (Stoke, S.)

    TELLERS FOR THE AYES:

    Moss, R.

    Sorensen, R. W.

    Mr. Short and Mr. Wiikins.

    NOES

    Agnew, Cmdr. P. G.

    Currie, G. B. H.

    Harvey, John (Walthamstow, E.)

    Aitken, W. T.

    Danee, J. C. G.

    Hay, John

    Allan, R. A. (Paddington, S.)

    D'Avigdor-Goldsmid, Sir Henry

    Head, Rt. Hon. A. H.

    Alport, C. J. M.

    Deedes, W. F.

    Heald, Rt. Hon. Sir Lionel

    Amery, Julian (Preston, N.)

    Digby, Simon Wingfield

    Heath, Rt. Hon. E. R. G.

    Arbuthnot, John

    Donaldson, Cmdr. C. E. McA.

    Henderson, John (Cathcart)

    Armstrong, C. W.

    Doughty, C. J. A.

    Hicks-Beach, Maj. W. W.

    Ashton, H.

    Drayson, G. B.

    Hill, John (S. Norfolk)

    Baldock, Lt.-Cmdr. J. M.

    du Cann, E. D. L.

    Hinchingbrooke, Viscount

    Baldwin, A. E.

    Dugdale, Rt. Hn. Sir T. (Richmond)

    Hirst, Geoffrey

    Balniel, Lord

    Duncan, Capt. J. A. L.

    Holland-Martin, C. J.

    Barlow, Sir John

    Duthie, W. S.

    Hornsby-Smith, Miss M. P.

    Barter, John

    Eden, T. B. (Bournemouth, West)

    Horobin, Sir Ian

    Baxter, Sir Beverley

    Elliot, Rt. Hon. W. E.

    Horsbrugh, Rt. Hon. Dame Florence

    Beamish, Major Tufton

    Emmet, Hon. Mrs. Evelyn

    Howard, Hon. Greville (St. Ives)

    Bell, Philip (Bolton, E.)

    Errington, Sir Eric

    Howard, John (Test)

    Bell, Ronald (Bucks, S)

    Farey-Jones, F. W.

    Hudson, Sir Austin (Lewisham, N.)

    Bevins, J. R. (Toxteth)

    Fell, A.

    Hudson, W. R. A. (Hull, N.)

    Bidgood, J. G.

    Finlay, Graeme

    Hughes Hallet, Vioe-Admiral J.

    Biggs-Davidson, J. A.

    Foster, John

    Hughes-Young, M. H. C.

    Birch, Rt. Hon. Nigel

    Fraser, Hon. Hugh (Stone)

    Hurd, A. R.

    Bishop, F. P.

    Freeth, D. K.

    Hutchison, Sir Ian Clark(E'b'gh, W.)

    Body, R. F.

    Galbraith, Hon. T. G. D.

    Hutchison, Sir James (Scotstoun)

    Bossom, Sir A. C.

    Garner-Evans, E. H.

    Hylton-Foster, Sir H. B. H.

    Boyd-Carpenter, Rt. Hon. J. A.

    George, J. C. (Pollok)

    Iremonger, T. L.

    Boyle, Sir Edward

    Gibson-Watt, D.

    Irvine, Bryant Godman (Rye)

    Braine, B. R.

    Glover, D.

    Jennings, J. C. (Burton)

    Brooman-White, R. C.

    Gomme-Dunoan, Col. Sir Alan

    Johnson, Dr. Donald (Carlisle)

    Browne, J. Nixon (Craigton)

    Gower, H. R.

    Johnson, Eric (Blackley)

    Bryan, P.

    Graham, Sir Fergus

    Johnson, Howard (Kemptown)

    Butcher, Sir Herbert

    Grant-Ferris, Wg. Cdr. R. (Nantwioh)

    Jones, Rt. Hon. Aubrey (Hall Green)

    Butler, Rt. Hn. R. A. (Saffron Walden)

    Green, A.

    Joseph, Sir Keith

    Campbell, Sir David

    Gresham Cooke, R.

    Joynson-Hicks, Hon. Sir Lancelot

    Carr, Robert

    Grimond, J.

    Kerby, Capt. H. B.

    Cary, Sir Robert

    Grimston, Hon. John (St. Albans)

    Lambert, Hon. G.

    Channon, H.

    Grosvenor, Lt.-Col. R. G.

    Lambton, Viscount

    Clarke, Brig. Terence (Portsmth, W.)

    Hall, John (Wycombe)

    Lancaster, Col. C. G.

    Cole, Norman

    Hare, Rt. Hon. J. H.

    Langford-Holt, J. A.

    Cordeaux, L.-Col. J. K.

    Harris, Frederic (Croydon, N.W.)

    Leather, E. H. C.

    Corfield, Capt. F, V.

    Harris, Reader (Heston)

    Leavey, J. A.

    Craddock, Beresford (Spelthorne)

    Harrison, A. B. C. (Maldon)

    Leburn, W. G.

    Crowder, Sir John (Finchley)

    Harrison, Col. J. H. (Eye)

    Legge-Bourke, Maj. E. A. H.

    Crowder, Petre (Ruislip—Northwood)

    Harvey, Air Cdre. A. V. (Macclesfd)

    1080

    1081

    Legh, Hon.Peter(Petersfield)

    Noble, Comdr. A. H. P.

    Stevens, Geoffrey

    Lennox-Boyd, Rt. Hon. A. T.

    Nutting, Rt. Hon. Anthony

    Steward, Harold (Stockport, S.)

    Linstead, Sir H. N.

    Oakshott, H. D.

    Steward, Sir William (Woolwich, W.)

    Llewellyn, D. T.

    O'Neill, Hn. Phelim (Co. Antrim, N.)

    Stoddart-Scott, Col. M.

    Lloyd, Maj. Sir Guy (Renfrew, E.)

    Qrr, Capt. L. P. S.

    Studholme, H. G.

    Longden, Gilbert

    Osborne, C.

    Summers, G. S. (Aylesbury)

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Page, R. G.

    Taylor, Sir Charles (Eastbourne)

    Lucas-Tooth, Sir Hugh

    Pannell, N. A. (Kirkdale)

    Taylor, William (Bradford, N.)

    McAdden, S. J.

    Partridge, E.

    Teeling, W.

    Macdonald, Sir Peter

    Peyton, J. W. W.

    Thomas, Leslie (Canterbury)

    McKibbin, A. J.

    Pickthorn, K. W. M.

    Thomas, P. J. M. (Conway)

    Mackie, J. H. (Galloway)

    Pilkington, Capt. R. A.

    Thompson, Lt.-Cdr. R. (Croydon, S.)

    McLaughlin, Mrs. P.

    Pitman, I. J.

    Thorneycroft, Rt. Hon. P.

    Maclay, Rt. Hon. John

    Pott, H. P.

    Thornton-Kemsley, C. N.

    Maclean, Fitzroy (Lancaster)

    Profumo, J D.

    Tiley, A. (Bradford, W.)

    McLean, Nell (Inverness)

    Raikes, Sir Victor

    Tilney, John (Wavertree)

    Macleod, Rt. Hn. Iain (Enfield, W.)

    Redmayne, M.

    Touche, Sir Cordon

    MacLeod, John (Ross & Cromarty)

    Remnant, Hon.P.

    Turner, H. F. L.

    Macpherson, Niall (Dumfries)

    Renton D. L. M.

    Turton, Rt. Hon. R. H.

    Maitland, Cdr. J. F. W.(Horncastle)

    Rippon, A. C. F.

    Tweedsmuir, Lady

    Maitland, Hon. Patrick (Lanark)

    Robertson, Sir David

    Vane, W. M. F.

    Manningham-Buller, Rt. Hn. Sir R.

    Robson-Brown, W.

    Vosper, D. F.

    Markham, Major Sir Frank

    Rodgers, John (Sevenoaks)

    Wade, D. W.

    Marlowe, A. A. H.

    Roper, Sir Harold

    Wakefield, Edward (Derbyshire, W.)

    Marples, A. E.

    Ropner, Col. Sir Leonard

    Walker-Smith, D. C.

    Marshall, Douglas

    Russell, R. S.

    Wall, Major Patrick

    Maude, Angus

    Schofield, Lt.-Cot. W.

    Ward, Dame Irene (Tynemouth)

    Maudling, Rt. Hon. R.

    Scott-Miller, Cmdr. R.

    Whitelaw, W. S. I. (Penrith & Border)

    Maydon Lt.-Comdr. S. L. C.

    Sharples, R. C.

    Williams, Paul (Sunderland, S.)

    Milligan, Rt. Hon. W. R.

    Shepherd, William

    Wills, G. (Bridgwater)

    Molson, A. H. E.

    Simon, J. E. S. (Middlesbrough, W.)

    Wilson, Geoffrey (Truro)

    Monckton, Rt. Hon. Sir Walter

    Smithers Peter (Winchester)

    Wood, Hon. R.

    Morrison, John (Salisbury)

    Smyth, Brig. Sir John (Norwood)

    Woollam, John Victor

    Nabarro, G. D. N.

    Soames, Capt. C.

    Yates, William (The Wrekin)

    Nairn, D. L. S.

    Spearman, A. C. M.

    Neave, Airey

    Spenoe, H. R. (Aberdeen, W.)

    TELLERS FOR THE NOES:

    Nicholls, Harmar

    Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)

    Mr. Godber and Mr. Barber.

    Nield, Basil (Chester)

    Stanley, Capt. Hon. Richard

    The Temporary Chairman (Major Anstruther-Gray): The next Amendment is that to Clause 20, page 17, line 35, in the name of the hon. Member for East Ham. South (Mr. Oram), and I understand that it will be convenient for the Committee also to discuss the Amendment to Clause 21, page 18, line 6, in the name of the hon. Member for Ogmore (Mr. Padley).
    Mr. A. E. Oram: I beg to move, in page 17, line 35, at the end to insert:
    (4) The granting by a society registered under the Industrial and Provident Societies Acts, 1893 to 1954 of any discount, rebate or dividend to its members payable at intervals of not less than a quarter of a year in respect of amounts paid or payable by or to them on account of their transactions with the Society shall not be treated as a breach of a condition as to the price at which any goods acquired by the Society may be resold and no proceedings under this section shall be taken by a supplier of goods against such a Society solely on the grounds that the granting of a discount, rebate or dividend by the Society in the circumstances hereinbefore mentioned is a breach of a condition as to the price at which the goods may be resold.
    It may be helpful to the Committee as a whole, and to the hon. and learned Member for Middlesbrough, West (Mr. Simon) in particular, if, at the outset, I say that my hon. Friends and I are will
    1082
    ing to accept his proposed Amendments to our Amendment. The proposed Amendments of the hon. and learned Gentleman are more general in their purpose, but we are quite willing that the principle which we have sought to lay down in our Amendment should also apply to traders other than co-operative societies if they see fit to imitate the methods which the co-operative societies employ. My especial concern is with the position—
    The Temporary Chairman: Order. To prevent any misunderstanding, I should say that I was under the impression that those Amendments were not to be moved. Am I right?
    Mr. Simon: I have not heard that, but I am anxious to hear what my right hon. Friend the President has to say about the main Amendment which has just been moved before taking any decision about them.
    The Temporary Chairman: In that case, perhaps the hon. Member for East Ham, South will continue his speech.
    Mr. Oram: In reply to what the hon. and learned Member for Middlesbrough, West has said, may I say that I will accept his Amendments if they are moved?

    1083
    My main concern and that of my hon. Friends is with the position of co-operative societies under this Clause. Perhaps I ought, therefore, at the outset to declare an interest, since I am a loyal and enthusiastic member of the Co-operative movement, and this Amendment is designed to protect one of the fundamental principles of co-operative trading—the right to pay dividends on purchases. I would remind the Committee that that interest of mine is shared by more than 11 million other cooperators. We have joined together in our vast social and commercial movement in order to own and run jointly our thousand retail societies, to own our factories and warehouses and our 25,000 shops. and to conduct that vast business according to the special co-operative, democratic, non-profit-making principles. On the basis of those principles, our movement has grown to a position of tremendous success and strength from very humble origins.
    One of the most important of those principles is that we return the surplus at the end of a trading period to the purchasers from whom that surplus was made in proportion to the purchases which they make at their co-operative stores. That is the well-known principle of the "co-op. divi", and it is that principle which I assert is placed in jeopardy by Clause 20.
    These 11 million co-operators are of many kinds. We pride ourselves on open membership. We apply no test of a political or religious kind, and indeed many of the members do not share my own attitude to political and economic affairs. Many of them, I regret, are to be numbered among the supporters of the President of the Board of Trade, but. whatever may be their differences on their public or co-operative affairs, we can be sure that they all welcome their cooperative dividend on their purchases, and that they are all irritated when they go into the co-operative store and are told that on a particular commodity they cannot have their dividend because the manufacturer of that commodity has imposed a ban on the payment of dividend on that article.
    Clause 20, in our view, will give the backing of a court of law to that kind of ban, and it will, therefore, be a
    1084
    deliberate encouragement to other manufacturers who have not imposed that ban so far to do so. It will be our clear duty on this side of the Committee, if this Clause goes unamended, to explain to these 11 million co-operators whose responsibility it is for giving direct encouragement to all and sundry in the manufacturing world to impose a ban on a co-operative dividend.
    Mr. Philip Bell: What is there to prevent the powerful co-operative organisation putting in their contracts, "We will buy from you, but we are going to pay a dividend"?
    7.0 p.m.
    Mr. Turner-Samuels: The answer is that they will not sell.
    Mr. Bell: They will not sell if this Amendment is passed.
    Mr. Oram: The experience of the Co-operative movement is that manufacturers have refused to supply. Over the past 50 years they have refused to supply when we have tried to insist on our right to pay dividend.
    Mr. Bell: How does that help? If this Amendment is passed there is nothing to prevent them saying, "We do not like this provision, so we are not going to supply at all." One is caught either way.
    Mr. Oram: The point is that this Amendment will give them the right to go to courts of law. At present, they have not that power. This provision will enable them to enforce their conditions with the backing of the courts of law.
    I was about to say, before I was interrupted, that the Co-operative movement has had a long and unfortunate history of this kind of discrimination against it. The movement has complained to successive Governments about their inability to get a whole series of articles because of the nature of co-operative trade. We have been prevented from getting wireless sets, television sets, vacuum cleaners, washing machines, toys, games, and a whole list of articles of that kind because we dare to conduct our business in a certain non-profit-making way.
    Our objection to Clause 20 is that it opens the door wide to that sort of discrimination, and the Co-operative movement sees in this a real threat to its trade.

    1085
    It sees a real danger that in respect of a wide range of its trade it will be prevented from practising its special commercial methods.
    The Lloyd Jacob Committee on Resale Price Maintenance made clear its attitude to this question of the co-operative dividend, or the deferred rebate as it is sometimes called. Paragraph 101 of that Report says:
    "We can see no reason why a retailer's right to distribute some of his profits in this way should be restrained or restricted, and we do not consider that a bona fide exercise of this freedom can imperil the trade or good-will of any manufacturer. The difference between the two methods of price reduction is, as we have already said, that whereas deferred discounts are paid in respect of past purchases and are applied to the general run of goods sold, price cuts ' such as are associated with the loss-leader technique are made at the time of sale and are applied to a few commodities or a specially selected commodity only."
    That is a clear and most important distinction between the price cut which is immediately made and the deferred rebate which is made periodically and applies to a whole range of a customer's purchases. We have had in recent months a very important example of that distinction. We have heard in the debates on this Bill that the book publishers and retailers can argue a very powerful case in favour of their net book agreement. But quite recently they have recognised this vital difference between a price cut on a particular book and the payment of a co-operative dividend on books sold by a co-operative society—a discount is paid but is included in that on the general purchases of the co-operative member. In fact, co-operative societies have been exempted from the provision of the net book agreement.
    It is just that distinction that we, in this Amendment, are urging the President of the Board of Trade to make in general. If he does so, he will be following, first, the advice of the most important Committee which has investigated this matter, namely, the Lloyd Jacob Committee, and, secondly, those who are among the most strong exponents of resale price maintenance, namely, the book publishers.
    There is a general similarity in the approach of the Bill to the recommendations of the Lloyd Jacob Committee. Both the Bill and that Report are against collective resale price maintenance, and both, in general, are in favour of individual price maintenance. But Clause 20
    1086
    goes well beyond the intention of the Lloyd Jacob Report in respect of individual resale price maintenance, in that it gives the sanction of the court to the individual to maintain the price which he has fixed.
    There was another recommendation of the Lloyd Jacob Committee which has been entirely ignored by the President of the Board of Trade and his advisers in framing the Bill. I should like to read a paragraph of the Report because it is of great importance. Paragraph 164 says:
    " Producers are not, in our opinion, entitled to use resale price maintenance to obstruct the development of particular methods of trading, to impede the distribution by another manufacurer of competitive goods or to deprive the public of the benefits of improvement in distribution. Public policy requires adequate distribution of goods with provision for such price reductions as are justified by low-cost distribution or by a regular policy of distributing surplus profit to the customer."
    That is quite clear in the Committee's recommendations, and I would emphasise that that was a body of experts who were not opposed, as some of us here are, to individual resale price maintenance entirely but recommended in favour of individual resale price maintenance. However, the Committee drew this clear distinction between the immediate price cut and the deferred rebate in the system which we have employed in the co-perative movement.
    The second consideration that the Committee had in mind was this question of low-cost distribution. My hon. Friend the Member for Deptford (Sir L. Plummer), who was arguing powerfully on an earlier Clause the case in respect of self-service trading, was pointing out that retailers of all kinds ought to be allowed to pass on to the consumer the benefits of any efficiencies that they are able to introduce into their trading.
    I do not want to repeat my hon. Friend's argument, but here is something in which the Co-operative movement has a very special interest because we in this country pioneered the self-service shop and we believe it is most important that co-operative societies should be able to pass on as dividend to their members the benefits of the introduction of such methods as self-service trading.
    I have referred so far to the retail trade, but I should like to remind the Committee that it is not just retail trade

    1087
    which is covered by the terms of this Amendment, nor indeed by the Amendments to our Amendment, which may or may not be moved later.
    The Temporary Chairman: Perhaps it would make matters clearer if I were to inform the hon. Gentleman that the Amendments in the name of the hon. and learned Member for Middlesbrough, West (Mr. Simon) are not selected.
    Mr. Oram: I am much obliged, Major Anstruther-Gray. I will therefore confine my remarks to my Amendment.
    The point I wish to make is that the Industrial and Provident Societies Acts cover not just retail co-operative societies but agricultural co-operative societies as well. It is surely welcome on both sides of the Committee that there has been a significant growth in the activities of agricultural co-operative societies in this country since the end of the war. I believe it to be true that about two-thirds of all farmers are members, in some capacity or other, of an agricultural co-operative society.
    I know that there are right hon. and hon. Gentlemen opposite who themselves are directly interested in this new and important development in the agricultural industry. Only last week we read in The Times that the National Farmers' Union and the Agricultural Co-operative Association have got together and formed a new association, from which it is hoped that there will be even greater development of agricultural co-operation.
    It seems to be an essential principle of agricultural co-operation that farmers should be able to receive a deferred rebate just as the housewife does who buys goods from a co-operative shop and later receives her "divi". If this Clause is passed unamended, it will be open to manufacturers to impose on farmers' cooperative societies the same sort of ban to which we in the retail movement so strongly object.
    I would urge the President, before he says his final word on this Amendment, to consult his hon. Friends on the benches behind him, particularly those with knowledge of agricultural co-operation, to ask the National Farmers' Union about their arrangements in connection with this new Co-operative Association, and also to ask
    1088
    himself whether he would wish to facilitate the possible imposition of a ban on an essential principle which is being applied in agricultural co-operation.
    Finally, I would urge the President to consult his right hon. Friend the Chancellor of the Exchequer on the savings aspect of co-operative dividend. The Chancellor is urging everyone to save, and he is receiving a good deal of support in that. The co-operative societies are among the most important small savings institutions. As I have mentioned, there are 11 million co-operators, and there is an aggregate of about £300 million of savings belonging to them. Each year the co-operative dividend amounts to about £40 million, which is returnable to the consumer members, and evidence which I have collected indicates that probably half of that amount is not actually withdrawn by members but is left as savings in the societies.
    Small savings by housewives amounting to £20 million ought to be taken into account by the President of the Board of Trade in association with his right hon. Friend. It is not something which ought lightly to be ignored. When the President indicates his attitude towards this Amendment he should answer such questions as this: does he want to encourage small savings or not?
    I assure the President that he cannot, with impunity, attack one of the basic principles upon which 11 million consumers and 200,000 farmers have sucessfully organised themselves. Unless he accepts this Amendment he will be rejecting the specific advice of the Lloyd Jacob Committee on these matters. He will be discouraging the introduction of low-cost methods of distribution in the retail trade; he will be discouraging one of the most hopeful and interesting experiments in post-war agriculture, and he will be striking a blow at one of the most important thrift institutions among the working classes. I urge him seriously to think about these matters again—and, if need be, to think yet again—before he is guilty of any of those regrettable errors.
    7.15 p.m.
    Mr. P. Thorneyeroft: The hon. Member for East Ham, South (Mr. Oram) has made an eloquent and persuasive speech on the subject of the co-operative dividend. Very properly, he declared an

    1089
    interest, and I say at once that that certainly does not disqualify him from speaking on this matter; indeed, it adds force to his remarks. The last thing I would have in mind would be to attack co-operative societies, which are a great institution in this country and which make a very great contribution in many fields. I am certainly not here to attack them in any way whatsoever.
    I want to put the hon. Member's arguments into the context of the Bill, and to explain precisely what the Bill does, because that may bring our debate within a somewhat narrower compass. I am not complaining about the hon. Member's speech; he was right to open the matter on a broad front, but I do think that we must now look at this matter with greater particularity.
    Clause 19, which we have now passed, outlaws collective enforcement. Clause 20, which we are now discussing, provides a new method of individual enforcement. Both Clauses deal with enforcement, and this Amendment has nothing whatever to do with that. I am not complaining or saying for one minute that the hon. Gentleman's Amendment is out of order, but it has nothing to do with enforcement. It raises an interesting and important question about price maintenance. that is, what price conditions should be enforced; but that is a quite different point altogether.
    The point I wish to make is that this Bill has no effect whatsoever upon the existing situation as to what price conditions should be laid down.
    Mr. G. Darling: No.
    Mr. Thorneycroft: If the hon. Gentleman the Member for Hillsborough (Mr. G. Darling) will listen to me, he will follow the argument as I develop it.
    Precisely the same price conditions can be laid down on the day after the Bill becomes law as were laid down the day before, and by exactly the same people, namely the suppliers. I am not saying that an argument cannot be advanced as to whether this is right or wrong; I am merely describing what the Bill does. The position today is that suppliers, whether supplying to the private sector of industry, to the co-operative sector, or to the nationalised sector of industry—whoever it may be—lay down the price conditions; they say they want an article which
    1090
    they supply to be sold at a certain price, and they lay the conditions down, very properly, in detail.
    The arrangements which suppliers make vary one from another; some of them, for example in the grocery trade, the electric lamp trade, the tobacco trade, and, as the hon. Member for East Ham, South pointed out just now, the book trade, prefer to treat the matter rather flexibly and allow discounts, either immediate or deferred, without treating such discounts as price cutting in any way. Others treat the matter more rigidly, either regarding discounts as price cutting or agreeing to discounts only if the price is artificially raised before the discount is in fact paid.
    After the Bill is passed, the position will be exactly the same; the only difference will be in the method of enforcement. The method of enforcement which at this moment operates namely, collective enforcement of resale price maintenance, will be outlawed; it will no longer be lawful for any two or more persons to refuse supplies to a co-operative society in order to enforce resale conditions. Such practices will be outlawed under Clause 19, and there are many co-operators who think that is an important advance.
    Under Clause 20, however, it is true to say that there is a new method of individual enforcement; the supplier, whether he is in direct contractual relationship with a co-operative society or not, will be able to use the injunction machinery there laid down. Nevertheless, he will have exactly the same freedom in his policy as he had before.
    There is an argument as to whether the co-operative society is in a stronger or weaker position as a result of these changed arrangements. We had some argument about this a little time ago. Some hon. Members were contending that we had greatly weakened the enforcement arrangements of resale price maintenance. To that extent the position of the hon. Member for East Ham, South would be greatly strengthened, because he does not wish for strong methods of enforcement. He is arguing that the enforcement arrangements rather worsened the position of the co-operative societies.
    My own view is that under the combination of these various Clauses—while

    1091
    retail prices can be maintained—with the abolition of collective enforcement of retail price maintenance, more flexibility will be introduced into the arrangements. There will be a tendency to allow rather greater freedom in the whole mechanism of deciding what is or what is not price-cutting. That is a view strongly held both by the Lloyd Jacob Committee and the Monopolies Commission, and that is their principal reason for urging that massive arrangements for the collective enforcement of retail prices should be done away with altogether.
    I agree that it is a matter of argument whether the position is stronger or weaker. I think that on the whole rather more flexibility is introduced, but the position as to what conditions and what prices a supplier can lay down is unchanged in any particular by this Measure.
    Mr. F. Beswick: What does the right hon. Gentleman mean by "more flexibility"? Does he mean that some firm or association of firms can lay down a condition that a dividend should not be paid, or that some will not lay it down? How, between payment or nonpayment of dividend, is there scope for flexibility?
    Mr. Thorneycroft: If the hon. Member will read paragraphs 145 to 147 of the Lloyd Jacob Report he will see that the argument is laid out most clearly there.
    Mr. Beswick: Not on this point.
    Mr. Thorneycroft:The whole basis was that so long as there were trade associations policing these complex arrangements whereby wholesalers, manufacturers and retailers were often working in one interlocked group for price maintenance, no flexibility whatsoever was allowed. That position has been cured effectively by Clause 19, and a new method of individual enforcement is introduced by Clause 20. But there is no change whatsoever as to the conditions that can be laid down by individual suppliers.
    After the Bill is made law, individual suppliers will differ among themselves, as they do now. Some will and some will not allow the payment of dividends, and I agree that one cannot single out the co-operative societies. If we are to deal
    1092
    with this matter we must deal with discounts however paid, whether immediate or deferred. But the position as to dividends will be precisely the same.
    The hon. Member for East Ham, South quoted from paragraph 165 of the Lloyd Jacob Report, which supports his case, and there is force in it. There is no question about that. I will not waste the time of the Committee by pretending that it does not support the hon. Member's case, but of course it is easier to put a proposal of that kind into a Report than it is to translate it into legislation. That goes a great deal wider than the co-operative case. The paragraph says that where there is economy in some form of distribution, resale price maintenance should be so flexible as to take that economy into account.
    In a perfect State, and if I could find a way of doing it, there is a lot to be said for translating a recommendation of that kind into legislation, but we certainly cannot do it in this Bill, and in the Bill I have no intention of legislating for or against the co-operative dividend. No Clause in the Bill says that a dividend should or should not count for price-cutting purposes. It will remain, as it remains now, entirely a matter for the individual supplier to decide. It is true that it is provided in a Clause in the Bill that he can specify that conditions as to price—including arrangements for discount and dividend as he wishes—as he can do today. The only thing that the Bill does is to re-arrange matters of enforcement, and if the Lloyd Jacob Report stands for anything it means that the co-operative societies are in a better position.
    Mr. Turner-Samuels: Would the right hon. Gentleman say whether the Clause, to which this Amendment applies, really catches dividend or merely gives power to enforce by legal proceedings conditions as to retail prices?
    Mr. Thorneycroft: I think that conditions as to retail prices include dividends and discount today as a matter of trade practice, and they will continue to do so after the Bill becomes law.
    Mr. G. Darling: The President of the Board of Trade has been very selective in the examples which he has given from the Lloyd Jacob Report. There are many more paragraphs, such as paragraphs 96,

    1093
    101, 102 and 114, which deal precisely with this question of deferred rebates. The Lloyd Jacob Committee states quite clearly:
    "We see no reason why a retailer's right to distribute some of his profits in this way should be restrained or restricted and we do not consider that a bona fide exercise of this freedom can imperil the trade or the good-will of any manufacturer."
    I am sure that the right hon. Gentleman will agree with that, but the Amendment is not accepted and neither apparently will the Amendment to Clause 21 on this same point with which the right hon. Gentleman has not dealt, be accepted.
    Clause 21 specifically states that the amount of discount which may be allowed in any sale should be counted as a condition of sale. If the Bill goes through in its present form, the manufacturer can say to a co-operative society, "If you insist on paying dividends to purchasers of my goods I shall not supply you". Under Clauses 20 and 21 he will be given the opportunity of legally enforcing that condition in the courts.
    The President of the Board of Trade said that he does not want to legislate either for or against co-operative societies. We on this side of the Committee do not want him to do so, but many of the manufacturers are looking to the Bill as their effective instrument to deal with co-operative societies in precisely that way. To us the position is very simple, and if we could have the Bill without a great deal of lawyers' language in it, which is of course impossible, we could make the position quite clear.
    While the Bill lays down quite clearly that individual manufacturers can enforce individual prices, we want to ensure that that right should not be taken further to mean that traders who take and resell the manufacturers' goods shall be dictated to by the manufacturers as to how they shall distribute their profits. That is a quite different issue of principle from the question of price.
    7.30 p.m.
    Let us be perfectly clear: the cooperative societies are not price-cutters. If manufacturers, under the Bill want to lay down their prices for retail sale, there is no question that the co-operative societies would agree to sell the goods at those prices. Our concern is whether
    1094
    the manufacturer has a further right, beyond the right to lay down the retail price, to say to co-operative societies or to any other traders—we are not asking for any specially favourable position for co-operative societies—that they must not distribute their profit to their customers but must distribute it to their shareholders, in the case of a company, or put it in their own pockets if they are private one-man businesses or partnerships. That is the issue.
    The President can argue that what we are dealing with in the Bill and in the Clause is the enforcement of conditions in regard to the fixing of prices, but we must also take into account Clause 21, which gives to the manufacturer the right, not only to say that the retail prices which he stipulates shall be the prices charged in the traders' shops, but to tell the trader how he must distribute his profits. We think that that is bad.
    I do not know what the general public would think about an issue like this if it were presented clearly to them, but I feel confident that they would say that any trader, particularly in the circumstances of today, who wanted to distribute some or the whole of his profits to his customers as rebates on purchases should be allowed to do so, and that the law should not put anything in the way of the trader doing precisely that.
    We say that the Bill will put something in the way. I repeat, as it is the kernel of the whole argument, that it will give to the manufacturer the right to say, "I will refuse to supply you with goods if you distribute your profits to your customers and not to your shareholders". That is something which we cannot accept. As my hon. Friend the Member for East Ham, South (Mr. Oram) said, that goes to the whole basis of co-operative trading.
    I do not want to appear rude about this matter, but the President was riding away from that issue, quite properly in the context of the Bill, on a legal argument that the Bill has nothing to do with that issue. He says that it does not go to the basic principle of co-operative trading. In the context of the Bill, in a very narrow legal way, that may be true, but in our view it does go to the basis of co-operative trading.
    We may, in the House of Commons, if the vote is against us, have to concede,

    1095
    but outside the House we cannot and shall not agree that a Government in the twentieth century have the right to say that manufacturers can impose conditions of trade upon retailers by which the manufacturers can dictate the way in which a trader's profits shall be distributed. This goes to the whole basis and principle of the Co-operative movement, which was started in this country and has been built up and become the accepted method of trading for many hundreds of millions of people throughout the world. Here is an attack upon that basis and principle, and we hope that the President will think again about his attitude to the Amendment.
    Mr. Simon: I think that hon. Members on this side would respond gladly to the approach that was made by the hon. Member for East Ham, South (Mr. Oram). We certainly agree with what he and the hon. Member for Hillsborough (Mr. G. Darling) said about the social purposes of the Co-operative movement. In fact, I think we would go further; for we would say that the Co-operative movement has a valuable and, some of us would say, essential part to play in a free economic society. We do not see how it can play the same sort of part in a completely planned economy. These, however, are large issues which, obviously, fall outside the scope of the Amendment, and it would not be proper to pursue them further. I have said that, however, so that hon. Members opposite should appreciate that we on this side are certainly no less tenacious than they are as to the rights and the prosperity of the Co-operative movement.
    Where we cannot follow is when the hon. Member for Hillsborough says that the Bill gives to the manufacturer a right to dictate how the co-operatives shall distribute their profits. There are two things to be said. First, the Bill gives manufacturers no such right whatever. I should have thought that it left the Co-operative societies rather better off than before the Bill, because the whole apparatus of collective enforcement is to be dismantled.
    The matter, however, goes further. This is not a question of profit. We have had this argument before with reference to the revenue laws. It has been argued by many people, both inside the House and outside,
    1096
    that the co-operative dividend should be taxed because it was a profit. We have always resisted that contention, and hon. Members opposite have quite rightly resisted it, because the argument put forward by all of us was that it was not a profit to be taxed, but a trade rebate. It is because it is a trade rebate that it falls precisely within the manufacurer's right to control how rebates should be given on these goods.
    We are not dealing with the question of individual resale price maintenance as a principle, Obviously, opinions differ on both sides, and I myself, as I said on an earlier Amendment, am not by any means sold on the argument of the loss-leader. But once it is accepted that a manufacturer has the right to control the price at which his goods will be resold, it follows that he has a right to control rebates. That is why it is wrong in our view that the co-operatives should be singled out in this respect.
    Mr. Joseph Reeves: If the hon. and learned Member thinks that rebates ought not to be taken into consideration, how would he treat savings which have resulted from associated trading?
    Mr. Simon: I did not say that rebates should not be taken into account. My argument was precisely the opposite. It was that the manufacturer has the right, or we have conceded it to him as a basis of the Clause, to control the rebates which shall be given on his goods because that affects the price at which they shall be resold. It is for that reason that, apart from the very narrow terms generally of the Amendment, I shall find myself unable to support it.
    I appreciate that my Amendments have not been selected but perhaps I can say, without infringing the rules of order, that I could not in any case accept any provision of this kind which did not apply to all the transactions between a trader and the customer. That was a rider that the Lloyd Jacob Committee made in paragraph 106. I know that the hon. Member for East Ham, South quite fairly met that point, even though, as it transpired, he was out of order in doing so; but if there is selection as to what goods shall be the subject of a dividend, as there is with many traders, including many co-operative societies, it obviously

    1097
    falls outside the scope of any recommendation of the Lloyd Jacob Committee.
    It is for those rather more general reasons, because it is not a distribution of profit but a trade rebate which is in question, and because we have conceded the right of the manufacturer to control the price of his goods, that I respectfully agree that the Amendment falls outside the scope of the Bill. With all good will to the Co-operative movement, we feel that this is not a suitable opportunity to deal with the matter.
    Mr. W. T. Williams: The President of the Board of Trade said that the Bill does not concern itself with the method of price fixing and the enforcing of price fixing, and does not in any way alter the right of manufacturers to fix prices. By making that comment he was successfully riding away from the real problem with which we are concerned. I have an interest in this matter, being a co-operative member, but my interest is not cribbed or cabined by that fact. My concern with the Amendment is a good deal wider than my narrow interest in the Co-operative movement.
    The Minister is correct when he says that the Bill is not primarily concerned with the matters that have been advanced from this side of the Committee in favour of the Amendment. However, Clauses 20 and 21 are concerned with more than the things that the Government and the Minister want to achieve. They are concerned also with many exceptions and things which the Government do not want. Clearly, if the Government are to make an exception in the case, in particular, of the Co-operative movement, it applies equally to all societies protected by the Industrial and Provident Societies Acts.
    The Minister and the Committee should consider some rather fundamental questions about resale price maintenance, the enforcement of resale price covenants, and the significance of the fact that the Co-operative movement and provident societies generally claim some privilege at the hand of the Minister.
    Before I go into that, I would say that it appears to me that the effect of the Clause and of the Bill generally upon the trade of industrial and provident societies will be harmful. It is true that, in regard to the dismantling of collective enforcements, the co-operatives—perhaps the Minister will permit me to use
    1098
    that term; I mean it to include all industrial and provident societies—are somewhat better off in that they are enabled to escape the disadvantages of collective boycott, condition sales and private agreements about supplies.
    On the other hand, they are greatly at a disadvantage in the sense that many manufacturers who hitherto have not felt it of sufficient interest to them to belong to trade associations, who have not joined any collective boycott and who are unwilling to join any of these massive forms of retaliation, will find that the possibility of applying a sanction by obtaining an injunction is a cheap and easy method of restricting co-operative trade. It is the existence of that sanction that puts the co-operatives in particular in a very worse position now in respect of a greatly widened area of supply compared with the position in which they were before this Bill came forward.
    7.45 p.m.
    For that reason, we urge upon the Government that it is right to claim for industrial and provident societies generally the protection which would be afforded them by the provisions of the Amendment. I am persuaded—I know I should be out of order if I were to pursue the matter—that the hon. and learned Member for Middlesbrough, West (Mr. Simon) is wrong when he sweeps aside the other claims of the Co-operative movement merely by saying that cooperative dividend should be exempt from Profits Tax and the like because the discount or dividend which is enjoyed by its members is merely a trade rebate.
    However that may be, I am equally persuaded that it is tremendously important that when the Minister considers whether the co-operatives ought to enjoy some privileged position or some protection as is provided by the Amendment, he should consider, first, the purpose of resale price maintenance in general, and the protection that Governments hitherto have always felt it proper to give to industrial and provident societies. He should also ask himself whether the Amendment, without at the same time doing real injury to manufacturers and other traders, protects and serves the public interest to a greater degree than would be the case if it were defeated. It is to these matters that I

    1099
    should like for a few moments to direct the attention of the Committee.
    I have always understood that the purpose of resale price maintenance was, in particular, to prevent injury to traders and manufacturers by unscrupulous people using branded goods upon which a great deal of research has been done. I am equally persuaded that the object of all the Industrial and Provident Societies Acts extending over half a century was to enable bona fide provident societies, which were regarded as socially useful, and worthy of being promoted and encouraged by legislation, to be given special and protective privileges as against the generality of traders because they were regarded as socially useful and desirable. It is important that no opportunity should be neglected by any Government of continuing that principle and policy. It is right that the Bill should continue the policy.
    The Minister and the Government are refusing to recognise that fact. I know that the Minister does not agree with this view, but I am asking him to think about it. The Government are riding away from the obligation to continue the policy embodied in the Industrial and Provident Societies Acts. The President says that the Bill does not alter the situation. He must realise that it materially alters the situation because it makes very serious inroads into co-operative supplies and the freedom of co-operative societies to pay dividends on a very wide range of goods. What the Minister is doing is to turn his back upon the general procedure and the protection given to industrial and provident societies which has always consistently been given by all preceding Governments.
    It cannot be doubted that the effect of this refusal of the Minister to agree to the Amendment will be to injure cooperative trade, with the consequent effects upon the co-operative societies generally of which my hon. Friends have spoken. In my view, that has been done contrary to the public interest. It cannot be held—it has not been held by the Lloyd Jacob Committee, by the Monopolies and Restrictive Practices Commission, or by anyone who has taken the trouble to inquire into these matters—that by protecting the consumers in the Co-operative movement by
    1100
    such an Amendment as this, which could easily be put into the Bill, it would cause injury to manufacturers or other traders.
    In those circumstances, I urge the Minister, even now, to reconsider the position which he has taken up, and I ask him whether, fundamentally, the attitude that he is adopting in respect of co-operative societies in this matter will not ultimately be injurious to the public interest, and will not serve the best interests of the country.
    Mr. Philip Bell: At the risk of being thought old-fashioned, I invite the Committee to look at the Amendment. We are not discussing whether the co-operative societies are altogether out of this world and beautiful. I think they are quite beautiful and that some of their advocates are persuasive and almost beautiful as well. But we are not really discussing whether there is a penal or savage attack being made on the cooperative societies. Hon. Gentlemen might have helped some of their hon. Friends, who, perhaps, have not their Notice Papers with them, to see what the Amendment says.
    The Amendment asks for nothing except to construe an agreement. Of course, it is rather long, so I shall read only a brief extract:
    "The granting by a society… of any…dividend… shall not be treated as a breach of a condition as to the price…"
    That is all that is being asked. There is a great deal of force in the suggestion that dividends should be treated differently.
    Now let us assume that the Amendment is accepted. There is the law. What happens? Some people do not mind about that law. As we see from the Report of the Monopolies Commission, the persons who supply groceries and chocolate do not take any account of that dividend so they do not mind about the law. Nor do the people who supply tobacco goods or electric lamps. [An HON. MEMBER: "Where is that?"] In paragraph 128. They do not mind about that, so that some of the people who supply goods to co-operative societies now do not bother about the dividend. They say that it is not taken into account and they do not regard it as a breach of condition. So far, so good.

    1101
    However, there are some obstinate suppliers, for instance, the pharmacists and booksellers. Whether they are right or wrong has nothing to do with this Amendment, so I shall not go into the merits of it. Those gigantic people say that any payment of dividend would be treated as a breach and must be added to the retail price. It may be wicked, it may be most tyrannical, but those are the terms they make.
    I am not saying that they are good or fair terms, but under the law as it stands now, the man who makes goods can say, for good or evil, "I will attach this price limit and I shall not make the stinking things at all if I cannot sell them in that way." So, for good or evil, he makes those terms, and the only way to stop that is to say that nobody can make a contract or that every contract for sale must be subject to scrutiny.
    Mr. G. Darling: Not to interfere with the argument, but to keep the record straight, may I point out to the hon. and learned Gentleman that the booksellers have withdrawn discrimination against co-operative societies?
    Mr. Bell: I am obliged to the hon. Gentleman. I was reading from a report of 1955.
    Mr. Darling: Following that report, they put this right.
    Mr. Bell: I am much obliged. Then, suppose there is only that one firm which says. "We will not deal with the co-ops unless they add on the price", what will this Amendment do about it? Will it say, "You must supply them?" It does not even say, "It is criminal if you do not supply them "or," It is criminal if you put in the provision ". The fact is that even if we accept this Amendment we shall still not make the person who insists upon the retail price being added in do anything about it. He will merely say, "If you do not agree, I shall not supply you with the goods".
    Mr. Arthur Moyle: Granted all that the hon. and learned Member says is correct, does he not agree with the contention that, if this Bill is passed as it stands, it will put into the hands of some of these suppliers a legal instrument which they do not now possess?
    Mr. Bell: I do not think that it puts any power into their hands. As the law
    1102
    stands now, if a co-operative society said that it would sell at a certain price whereas, in fact, it sold under that price because it paid the rebate—
    Mr. Moyle: I am grateful to the hon. and learned Gentleman for giving way again. I was influenced very much by the speech by the hon. and learned Gentleman the Member for Middlesbrough, West (Mr. Simon). As I understood. the hon. and learned Gentleman contended that if the dividend is described as a trade rebate it will place in the hands of the supplier the instrument which we contend is conferred upon him.
    Mr. Bell: With respect, I do not think that that affects the point I am making. The supplier need not call it a rebate and he can say to the co-operative store, because it is a free contract, "I want razor blades sold on your counter at 2s. a dozen. if you give the purchaser a ticket which entitles him to 2d., you must sell them at 2s. 2d." He need not use the phrase "price maintenance"; he can put it in ordinary language. I am not saying whether it is right or wrong. All I am pointing out to the Committee is that, whether it be right or wrong, this Amendment will not protect the cooperative societies any more than the present position does.
    With respect to the hon. Member for Barons Court (Mr. W. T. Williams), who spoke of my right hon. Friend as if he were leading a savage attack on the co-ops, it is an extravagant way of talking. This Amendment merely states that a particular thing would not be a breach of an agreement. It cannot force anybody to make an agreement, it does not say what happens if a man will not sell goods because he does not like the terms—
    Mr. Coldrick: Does the hon. and learned Gentleman appreciate that any manufacturer has the right to supply any organisation with goods or not? We are conceding to the manufacturer under this Bill the right to determine the price at which goods shall be sold. If this Amendment is accepted we shall deny to the manufacturer the right to regard dividend as price reduction, and, therefore, he will be obliged to supply, or not to supply, on that specific condition.
    Mr. Bell: The hon. Gentleman is wrong on the first point. The Bill does not confer any right upon anybody. The law is that the private man can enforce his agreement. This part, supplying to the co-operative societies, remains as it is now. That is now part of the law. If this provision is effective at all the supplier will stop supplying. He will say, "I do not like this provision." With respect, I cannot see that this Amendment does anything more—I do not wish to be more rude than necessary—than provide a little cheap advertising for the Co-operative movement.
    8.00 p.m.
    Mr. Beswick: I must say that the courtesies of this Committee are very attractive. When my hon. Friend the Member for Hillsborough (Mr. G. Darling) corrected the hon. and learned Member for Bolton, East (Mr. Philip Bell) on one of the principal points of his argument, the hon. and learned Member said that he was obliged. In fact, he was most upset, because it knocked away the proposition that he was trying to put forward. When the President of the Board of Trade prefaced his argument by saying that he was not out to attack the Co-operative movement, we sensed at once that the right hon. Gentleman was not intending to accept the Amendment.
    The hon. and learned Member for Middlesbrough, West (Mr. Simon) was a much more subtle opponent of the Cooperative movement. He brought forward his Morton's fork. He said, "If I cannot catch you on the dividend as profit, from the Inland Revenue angle, I shall catch you on the other prong if you insist that the deferred rebate is, in fact, a form of price cutting. The contradiction which the hon. and learned Gentleman put forward is embodied in the contradiction which has been running through some of the speeches of the President of the Board of Trade. The right hon. Gentleman has made it clear in some of his arguments that what he wished to do is to find a method of cutting prices. He said that quite plainly. He said that we do not want to keep up prices; we do not want to advance prices; what we desire to do is to bring prices down. And, of course, that has been the argument of the
    1104
    Conservative Party at successive General Elections.
    What the right hon. Gentleman also said at other times is that we are all agreed that we do not wish to bring prices down by methods which upset the stability of trade. We do not want to bring down prices by methods which will lower the conditions of work in the retail trade. We do not want the sort of vicious practice to which many hon. Members have referred, such as loss-leading. We do not want that kind of reduction of prices.
    In the co-operative form of trading we find a possibility of reducing the cost of living without all the dangers and abuses which this Clause enables the manufacturer to stop if he is so minded. The question arises: which of the apparently contradictory elements do we wish to support? What we want is to enable a form of efficient trading to be carried on without the kind of threat which is posed by this Clause. The hon. and learned Member for Bolton, East, says that there is nothing new about the Clause. Of course there is something new. This Clause will give a power to the manufacturer to prevent a co-operative society from paying a dividend on the goods which it manufactures.
    Mr. Philip Bell: No.
    Mr. Beswick: Of course it will.
    Mr. Bell: With respect, it is the contract which the manufacturer makes which prevents the Co-operative movement from doing anything.
    Mr. Beswick: As a matter of fact, there is a new and different element in this Bill. It gives a legal sanction to the manufacturer which he did not previously have. Life in this field is not quite so clear-cut as the hon. and learned Gentleman would have us believe. It is not the fact that we have two different categories of manufacturers; one prepared to trade with the Co-operative movement and not worrying about a dividend, and the other—there is a decreasing number in this category—who says, "We will not supply the Cooperative movement because it gives a dividend."
    The fact is that there are a number of manufacturers who now supply the Co-operative movement, because it is difficult to enforce a contract. In fact, there are

    1105
    no written contracts, in the main, as between supplier and retailer in the great majority of trades. The fact that there is no legal sanction means that there is great difficulty in drawing up a legal contract. Once the power is given to the manufacturer legally to enforce a written or a non-written contract, we shall begin to introduce an element which is quite fresh and we shall be encouraging discrimination against the Co-operative movement.
    Something was said earlier about the unwisdom—the President used this argument—of encouraging retailers to band together to enforce prices. Strangely enough, that kind of thing could be encouraged by the power now being given to the manufacturer. The retailers might say to a manufacturer, "We object to you supplying the co-operative society in the town." It is not unknown today. But a manufacturer can say, quite honestly," It is very difficult for me, because there are no legal sanctions open to me. There are ways and means for the co-operative society to get my products and, therefore, I do not feel that I can enforce it." Or the manufacturer may well say, "We supply the co-operative societies and what they do afterwards is not our business."
    If this Bill becomes law, the retailers can say to the manufacturer," It is your business. You can enforce your conditions. A legal sanction has been given you by Parliament."
    Mr. Philip Bell indicated dissent.
    Mr. Beswick: It is no use the hon. and learned Member shaking his head. It is written into the Bill. A legal sanction is to be given to the manufacturer who, previously, was not able to sue, and I think that is a retrograde step.
    The President must answer this question. Does he, or does he not, wish to give power to the manufacturer to discriminate against this form of trading? That is the issue. Does the right hon. Gentleman differentiate between the co-operative form of trading and the sort of cut-price trading we had in the 1930s? Does he accept the argument of the Lloyd Jacob Committee that there is a difference between the deferred rebate and the plain common or garden loss-leading or other forms of cut-price trading? If the right hon. Gentleman
    1106
    accepts the difference, I suggest that there is a necessity to write into this Bill an Amendment which reflects that view.
    I hope that the right hon. Gentleman will have another look at this. He has said that he does not wish to harm or damage the Co-operative movement, but he is making it possible for manufacturers to harm the movement, and I beg him to reconsider the matter.
    Mr. Turner-Samuels: I am sure that there is a good deal of misapprehension, both about the effect of the Bill in general, and about this Clause in particular, in relation to the question of Co-operative societies' dividends. I am sure that the President will take it kindly when I say that I think the misapprehension has arisen because the right hon. Gentleman has not made as clear as he should have done what the real effect of the Clause will be.
    The whole object of the Amendment which we are discussing is to prevent an interference by the provisions of the Bill by adding something to what is the present situation, regarding dividends paid by the Co-operative movement. I say at once that if I thought that the Bill, or the Clause, was in any way undermining the present position of the Co-operative societies in regard to dividends, I should say so and fight it strongly. After all, the city of Gloucester is a strong co-operative centre, and my constituents include many members of the Co-operative movement. Therefore obviously I would wish to keep their interests well in mind.
    When I put the question to him, I was surprised to hear the President say that co-operative dividends, in some way which he did not explain, would be caught by the Bill. I want the President to follow my observations on this point because I do not think he has done justice to his case. If he will follow me, perhaps he will be able to see what the position is. First, I think the ground ought to be cleared about the meaning of the term "dividend" here. The hon. and learned Member for Middlesbrough, West (Mr. Simon) got the position quite wrong. It is true that the Amendment uses the words "dividend" and "discount", but I should have thought it correct, in this context, to say that those words are most inapt to describe what applies in connection with the co-operative dividend.

    1107
    The co-operative dividend is not a price reduction at all. As a result of the society's trading a surplus ensues, and it is that surplus which is distributed under the name of a dividend to the members of the particular society concerned. The question resolves itself purely into whether that form of dividend will be caught by the provisions of this Measure. There is no room here for any discussion of the question raised earlier as to whether those dividends ought to be taxed or not. That is an entirely different question, which has nothing to do with the question involved here. The material question here is whether that dividend as a dividend is to be caught by this Bill.
    I want the President to notice—I am sure that in this he will agree with me—that this Clause deals exclusively with the sale of goods. It does not deal with dividends at all. Let us try to get this clear; it is very essential to do so. It is perfectly plain, on any interpretation of the wording of the Clause, that it does not touch in any way whatsoever the question of dividends. I challenge anyone to prove the contrary.
    What the Clause does is to say quite plainly that where goods are sold
    "by a supplier subject to a condition as to the price at which those goods may be resold, either generally or by or to a specified class or person, that condition may, subject.…"
    The Clause concerns the price at which those goods are sold and has nothing at all to do with the society's surplus which eventually emerges and is used for the purpose of being distributed to the members of the society in the form of a dividend.
    In those circumstances, I wish to refer to the argument expounded by the President of the Board of Trade when he was stating what the effect of Clause 19 and Clause 20 would be. He quite rightly said that Clause 19 deals with collective enforcement, and by virtue of that Clause the whole pre-existing structure of collective enforcement will have gone. Therefore, any question of attacking the dividend in any way by means of collective enforcement could not, under the Bill, apply. The only other possible way, it is argued, of attacking the dividend is under the form of individual enforcement provided by Clause 20. It is because it is contended the dividend comes under
    1108
    Clause 20, that the present Amendment seeks to avoid that effect.
    Under Clause 20, however, it is perfectly clear, in my submission, that the dividend cannot possibly be attacked. That Clause can only attack the resale price at which any particular goods are being sold. That is the only condition which the supplier can lay down and enforce by virtue of that Clause. If the goods are to be sold by the retailer the only condition which the supplier can lay down is the condition as to resale price. That, therefore, excludes any other condition whatever; it is as strong as that. It accordingly clearly excludes any attempt to deal with, or to affect, or undermine, or alter the rights of the Co-operative society in regard to the payment of dividends.
    Mr. Beswick: Will my hon. and learned Friend bear in mind that the President of the Board of Trade, who is not unfamiliar with this Clause, has assured the Committee to the contrary?
    Mr. Turner-Samuels: At the beginning of my speech I explained that I did not think the President had done justice to his case. I disagree with the view of my hon. Friend the Member for Uxbridge (Mr. Beswick) if he thinks that what the President said is correct. I think that the President ought to take steps now to correct the impression which he gave the Committee, because I am quite certain that it was a wrong one.
    8.15 p.m.
    Invariably the President deals with these points when they are raised, and I am sure that he will deal with this one and be candid enough to say whether he thinks that my view is correct or whether he still contends that his view is correct. Assuming that my contention is correct—that under Clause 19 the co-operative society's dividends cannot possibly be attacked because the whole machinery of collective enforcement falls to the ground under the provisions of that Clause, then, assuming I am equally right that under Clause 20—the Clause which gives the right of individual enforcement—relates merely to a condition regulating resale price, then, it follows that it cannot extend to any question relating to the payment of dividends.
    I think that there has been a good deal of misapprehension, and I agree with the

    1109
    hon. and learned Member for Bolton, East (Mr. Philip Bell) on the question of legal sanction. My hon. Friend the Member for Uxbridge thought the Bill expressly conferred some legal sanction in the direction of affecting the payment of dividends. My submission to the Committee is that it does nothing of the sort. If it is still argued that it does, then I should like someone to point out where, in the Bill, particularly in this Clause, any such legal sanction is given.
    Mr. A. J. Irvine: Clause 21.
    Mr. Turner-Samuels: I am dealing with Clause 20.
    Clause 21 has nothing to do with this point about the payment of co-operative dividends. In these circumstances, I ask the President what he now has to say about the position, and whether he thinks my view of it is correct or not.
    Mr. Robert Edwards: Listening to this debate, it seems to me that in this Chamber from time to time black can become white and white can become black. We have heard speeches from hon. Members opposite declaring their sympathy with the great social experiment of co-operation, yet, although the President states precisely and very clearly that the Clause will enable certain anti-social practices against 11 million consumers of this country to become legalised—although that is admitted and in spite of hon. Members on the benches opposite talking about their sympathy with that movement—hon. Members opposite will refuse to accept the Amendment, and will go into the Lobby against it.
    As honest people, we can only assume that, fundamentally, hon. Members opposite are on the side of big business against this movement, which essentially is a workers' movement. I want to declare my interest. I am an active member of the Co-operative movement, and I have a very deep emotional interest in the movement because, 97 years ago, a forbear of mine in Lancashire started the first co-operative bakery in this country. I hope that the Committee will forgive me for mentioning that, but it touches the very crux of the conflict between both sides of the Committee.
    This forebear of mine started work—heavy, hard work—at five o'clock in the
    1110
    morning. He went to the bakery at four o'clock in the morning to bake fresh bread for the villagers, walked six miles to his work in a quarry and afterwards came back, and with his wife distributed the bread, so that that little village in Lancashire could get fresh, good, wholesome bread, which was not provided before. He did not make any money out of it, but he put his whole life into it. It was men and women like that who started this movement, which has now 11 million members in Britain and hundreds of millions of members all over the world. It is one of the greatest examples of social welfare and dedicated social activity in the history of the world.
    It is something which the country and the House should be proud of. Any Bill which commences to undermine that great British contribution to the world has to be challenged, and any Government and any Minister who dares to set machinery in motion which is likely to weaken that great movement is doing a disservice to the nation now and a disservice to children as yet unborn. That is why this is a very serious Clause.
    Let us look at what is happening now. More than thirty years ago, a Government Commission on restrictive practices complained and wrote down clearly for all to read that existing practices against the Co-operative movement should be abolished. That was thirty years ago. Every Commission which has dealt with this subject that we are discussing this evening, every Commission, allow me to emphasise, under the control of this House, has also declared that there are restrictions against the Co-operative movement which should be abolished.
    The Co-operative movement, as my hon. Friend the Member for East Ham, South (Mr. Oram) has already stated, cannot buy certain workmen's tools. The Royal Arsenal Co-operative Society bought a corner shop—a bicycle shop. It paid goodwill for that shop. As soon as it became a co-operative bicycle shop, the supply of bicycles was stopped. Is not that a crime against the 800,000 consumers of the Royal Arsenal? Are they not entitled to some protection? They get no protection in this Bill. Now that kind of restriction and boycott against the consumers is being legalised. It is another sanction. Now all kinds of restrictive

    1111
    practices can be applied against the Co-operative movement, and those engaged in them can go to the courts to justify them.
    Not long ago, the Luton Co-operative Society bought a little newspaper round which had 173 customers, all members of the co-op. Within two months, all its newspaper supplies were stopped by the wholesalers. It was not paying dividend on its papers and periodicals, but it was stopped on principle because certain people in this country, who are now to get the protection of this Bill and the protection of this House, would not trade with the Co-operative movement at all, whether it paid dividends or not. They want to destroy the movement because it represents the ideals of working men and women combining together to create common ownership, which is a mighty, progressive thing.
    Let us see just what will happen. This is why we are entitled to get from the President concrete answers to the points raised in this debate. I have here a letter from a manufacturer of workmen's tools to a co-operative society. Here is what we are going to legalise. The letter says:
    "This will acknowledge your letter from which we note with regret that you are unable to enter into an undertaking not to pay dividend in respect of certain tools."
    These tools were not sent any more, and they cannot be sold to workmen who are members of the co-operative society. Is it true or is it false that this kind of practice can now be legalised, and that if the co-operative society gets tools, this manufacturer can sue the society in the courts, with the result that hundreds of thousands of pounds may have to be spent in litigation?
    Another example concerns gramophone records. The Decca Record Company writes to a co-operative society and says:
    "We thank you for your letter of the 13th instant but regret to inform you that we cannot supply you with our records as our policy is not to trade with co-operative societies."
    I am suggesting that in this Bill cooperative societies should have been protected against these practices; that they get no protection against them; on the contrary, under this Clause, these practices which are now isolated can be made general. That is a very serious business.
    1112
    I have here letters about toys, Meccano, records and a whole range of requirements essential to working people today, such as electrical appliances, which cannot be sold by the Co-operative movement in this country. The President, we suggest, should tell us plainly, without all the smiles and sweet reasonableness, what he feels about the Co-operative movement. We are entitled to ask him, is it true or is it not that the practices imposed on the Co-operative movement, and mentioned by my hon. Friends and myself, receive the sanction of the law under the Bill? If that is not so, we shall be glad to hear it said. If it is so and if hon. Members pass the Clause and vote against the Amendment they ought to be ashamed of themselves.
    8.30 p.m.
    Mr. P. Thorneycroft: We have had a fairly long debate on this matter, in which the arguments have been very fully and perfectly fairly put on both sides of the Committee. We have a long way to go on the Bill. I think there is an honest difference here which should be carried, in the proper way, to a Division. It is, I may be able to persuade the hon. Member for Bilston (Mr. R. Edwards), a little narrower than he might imagine. So far from the collective boycott being legalised, it is made unlawful by the Bill.
    Mr. R. Edwards: These arrangements are not collective.
    Mr. Thorneycroft: I am not suggesting that everything is satisfactory from his point of view, but to that extent the position of the co-operative societies has substantially improved, as I think they themselves, in honest argument would fairly admit.
    No new right is given. The rights are exactly the same as exist today. But it is true to say that there is a new method of enforcing a right. Hon. Members are perfectly entitled to say that there ought not to be that new method of enforcing the right, and to carry that opinion into the Division Lobby, but I have explained why, in the wider context of the Bill, we have included the new right, the position has been widely covered, I have tried to co-operate with the Committee as far as possible, and I hope that we may now reach a decision.
    Mr. Moyle: May I put a question to the right hon. Gentleman before he sits down? It is a point which I should have made in my speech had I been able to make my speech.
    Having regard to Clause 21 (1) and the speech of the hon. and learned Member for Middlesbrough, West (Mr. Simon), does the right hon. Gentleman agree that a co-operative dividend, for the purpose of the Bill, will be described as a trade rebate? If that is so, does it not place in the hands of the suppliers of goods the right to go to court and to state that the action taken by a local co-operative society in declaring a dividend, no matter how much or how little, is breaking the law? If they were to get a decision, would it not involve the cooperative societies in very large legal costs—more than they could possibly sustain?
    Mr. Thorneycroft: I shall not debate the technical point whether it is a rebate or a profit. I want to answer fairly the point put to me. The point is not whether technically, the dividend is a rebate or a profit, It is that the supplier today can treat a dividend or a discount, whether by the Co-operative movement or by anybody else, as price cutting. He will be able to do that after the Bill has been introduced. The position will be unaltered. But the method of enforcement will be altered; some say for the better, some say for the worse—and that is a matter for a Division. That is the only alteration in the arrangement.
    Mr. Jay: This issue is of first-class importance to the whole Co-operative movement, and I do not think we can possibly have the debate rushed or the subject inadequately discussed. I will therefore make one or two comments on the two speeches which the President has already made on the Amendment.
    In the first place, he admits quite frankly that under the Clause it is possible for the manufacturer to treat the co-operative dividend as being a discount or price rebate, in spite of what was said by my hon. and learned Friend the Member for Gloucester (Mr. Turner-Samuels) and the hon. and learned Member for Bolton, East (Mr. Philip Bell); I accept the President's interpretation of the law on that issue, and not theirs.
    1114
    Secondly, it is also clear that the President is asking us, under the Clause, to give the manufacturer legal power to enforce in the courts, as he could not do before, his interpretation of what the dividend is. I think that the President was rather below his usual level of logical argument when he said in both speeches that the point was that if we took Clauses 19 and 20 together, it was arguable that the Co-operative movement might perhaps be better off after the Bill than it was before the Bill. That really is not the issue. The issue is that Parliament is being asked to give a new legal sanction to manufacturers to enforce their prices on the co-operative societies in this fashion. That is what we really have to decide.
    The case from this side was put in an extremely moderate way. My hon. Friend the Member for East Ham, South (Mr. Oram), in moving the Amendment, made it perfectly clear that we are not asking for any special privilege for the Cooperative movement as such. I should be willing to accept all the Amendments of the hon. and learned Member for Middlesbrough, West (Mr. Simon)—who has left us—and would at any rate wish to make it perfectly clear that similar but not identical organisations such as agricultural co-operative societies and anybody who traded in this fashion should, of course, be included in the concession which we seek to make.
    I do not think that the main issue is whether the co-operative society is a generally socially desirable thing. I believe that it is, as do many hon. Members on both sides of the Committee. The real essence of the argument is that the Co-operative dividend is not, in the ordinary sense, a price cut as is meant by these two Clauses. The co-op does not pay a dividend because it wishes to make a cut in the price of the particular type of goods. It pays the dividend because that is part of its general system of trading. Dividend is paid irrespective of whether the electric lamp, the cigarettes or whatever it may be are sold at this price or at that. That seems to me to constitute a real difference in substance.
    Secondly, as has already been pointed out, it is not a cut made at the time at which the goods are sold. It is made at a later date and is for that reason described as a deferred rebate. I shall

    1115
    not enter into the interesting economic controversy as to whether this discount should be regarded as a change in price or a distribution of profit. I do not think that it is strictly relevant, but I do think that the private manufacturer should not be allowed to enforce his particular answer to that abstruse question by legal powers in the courts, which is what the President seems to be asking us to do.
    There are these two additional reasons. I gather now that the publishers have accepted the distinction which I have made and now agree that there is a complete difference between the system of dividends and a straight price cut on the individual article. Again, the Lloyd Jacob Committee accepted the fact that the co-ops were in a particular situation and should be treated exceptionally—not so much the co-ops but that anybody who traded in that way should be treated exceptionally for purposes of resale price maintenance.
    The remarkable thing is that the President is going out of his way both in Clause 20 and in Clause 21 to make it perfectly clear that manufacturers can treat the dividend as a discount and can, in effect, discriminate against the Co-operative movement. Clause 20 (1) says that
    "Where goods are sold by a supplier subject to a condition as to the price at which those goods may be resold, either generally or by or to a specified class or person,…"
    That, of course, makes it possible to act in the way I have described.

    Clause 21 (1), of course, makes it as plain as could be, even to us non-lawyers, that under the Bill the dividend can be treated as a price discount. For all those reasons I think that the President is really making a very grave mistake in refusing to make any concession to all that has been said by my hon. Friends. As I say, he has made two speeches already, but we should not mind him making a third if he would make it in that sense, and I would advise him seriously to think again on this issue.
    The reality and the substance of it is that, whatever the exact and correct legal interpretation may be, this is discrimination against the Co-operative movement, and, in the unanimous opinion of that movement, it is going to do it grave damage. If that is so, I think that the
    1116
    President would be well advised to think again. If he cannot do so now, he could do so before the Report stage, but if he is unable to give us any further satisfaction at present, I think we ought to carry this matter forthwith to a Division.
    Sir H. Linstead: Would the right hon. Gentleman answer this question? Does he or not take the view that an individual manufacturer should be free to refuse to have his goods sold through a co-operative society, if he so desires?
    Mr. Jay: I should have thought that it is perfectly plain to everybody that if a manufacturer does not wish to have his goods sold through a particular channel, neither Parliament nor anyone else can compel him to do so.
    The Temporary Chairman: That question does not concern the Amendment.
    Mr. Coldrick: The President of the Board of Trade has been excessively timid in his attitude towards this problem. He will know perfectly well that in this Committee we are not speaking on behalf of the political section of the Co-operative movement, because I myself have been a member of deputations, representing the trading side, which have expressed the concern which is felt by the whole of the people employed in the trade.
    The President, by this Amendment, has the opportunity of declaring whether he himself and the Government consider the payment of a dividend to be price cutting. He himself will not make a declaration upon that issue. He says that the matter remains precisely as it was before the Bill was drawn up, but is it not obvious that, by this so-called neutral attitude on his part and that of the Government, this is a deliberate encouragement to the private manufacturer to use legal powers in order to enforce price maintenance, and that precisely to the extent that that is done the position of the Co-operative movement will be infinitely worse in the future than it is at present?
    Let us make it quite clear that all through the period of the war, and for some time afterwards, there was price-fixing by the Government but no one suggested that, when the Co-operative movement sold goods at prices which had been fixed by the Government and returned a surplus in the form of a dividend, that fact was to be construed as

    1117
    price cutting. I submit that, since both Conservative, Labour and Coalition Governments have been prepared to recognise the right of the Co-operative movement to charge the prices that were laid down and then distribute the surplus as a rebate, this has never been regarded as price cutting, and that we should never concede that right to the private manufacturer.
    Consequently, it seems to me to be a form of moral cowardice to grant a legal sanction to an immoral practice on the part of a manufacturer. I am asking for no privileges for the Co-operative movement, because we never ask for privileges. This is a favour which, we believe, should be conferred on all—to have the right to share a surplus if they feel disposed to share it. For these reasons, I would appeal not only to the President of the Board of Trade, but also to the public to make it impossible to operate such an iniquitous Act as this Bill will prove to be.
    Several Hon. Members rose—
    8.45 p.m.
    Mr. P. Thorneycroft: I appeal to the Committee. I have tried to be as fair as possible in answering all the points that have been made. We have had a very long debate and we have a long way to go still. I have frankly conceded that there is a difference. It is nothing to do with the point about the manufacturer keeping goods back. I concede that that is an irrelevancy and has nothing to do with this point. The point was clearly put by the right hon. Gentleman the Member for Battersea, North (Mr. Jay) that there is no difference of right here but there is a difference of method of enforcement, which has now been fully debated for a considerable time.
    Mr. Norman Dodds: The right hon. Gentleman has not answered the question.
    Mr. Thorneyeroft: I am prepared to answer the question and, indeed, I have done so. I would urge the Committee to come to a conclusion.
    Sir L. Ungoed-Thomas: Throughout the many days that we have been discussing the Bill we on this side of the Committee have tried to co-operate to our utmost with the greatest economy of time consistent with a thorough debate of the points involved. I am sure that
    1118
    the President of the Board of Trade fully recognises that fact.
    Here we have an Amendment which is of the greatest importance to the Co-operative movement. On various occasions we have dealt with other parts of the Bill. For instance, we dealt with various Clauses at some length on Second Reading. This is the first and only opportunity when we have been debating a matter which affects so profundly the Co-operative movement.
    I am sure the President of the Board of Trade will recognise at once that we deliberately desisted from debating at any length an earlier Amendment seeking to leave out a specified class of person because we wanted to deploy the whole of the co-operative case at one time. In fact, we withdrew the Amendment, although it was an important consideration. All of us on this side of the Committee wish, as we have done throughout, to deal with this Bill in a most businesslike manner, but we really cannot ask Members representing the Co-operative movement, on the one issue which profundly affects that movement, to desist from putting forward considerations which to them and to all of us are important. I cannot ask my hon. Friends to refrain from putting forward matters which are obviously most relevant to this Amendment.
    There is no suggestion of being out of order or anything of that kind. I am sure the President of the Board of Trade recognises that. He will recognise, too, that a great deal of time on the Bill has been taken up, quite rightly—I am not gainsaying it—by hon. Members on his own side. That has been done on Clause 19, for instance, without any reference to any Amendment at all, and, therefore, could not have any relevance to the altering of the Bill, whereas this Amendment has.
    I can assure the right hon. Gentleman, on behalf of all of us, that we wish to economise in time, as we have done throughout, but there should be an opportunity for those of us who wish to speak on this Amendment to put forward considerations with which we are concerned.
    Mr. Thorneycroft: I am not questioning the right of any hon. Member to speak. I recognise that hon. Members hold their views with absolute sincerity. All I was doing was to ask, as a Minister is entitled to do, that we should be as

    1119
    expeditious as possible because we have a long way to go yet before we complete the Committee stage of the Bill.
    Mr. Ron Ledger: I am sure the President of the Board of Trade would not like, in so short a time, to undo the work of a hundred years, yet he is asking us to stop debating a Clause which affects the very basis of the Co-operative movement. I am not at all sure that if this matter should go to a Division, and the Amendment should be defeated, the right hon. Gentleman would find that all of his colleagues would be very pleased with him, because we are discussing, also, a very important method of saving.
    The President seems to think that we are concerned here only with those who at present discriminate against the Co-operative movement. He says that the difference is that after the Bill has been passed they will have to find another way of discriminating; they will have to go to the courts.
    The real cause for our worry—and I am sure the President will consider this—is that he is putting a weapon into the hands of those who at present supply the Co-operative movement and who appear to make no condition about dividend. I have spoken recently to a number of people who are suppliers to the Co-operative movement, who profoundly disagree with the dividend but who still supply the movement, for a number of reasons: the credit is good and they value the points of distribution which the Co-operative movement has. Immediately this Bill is passed, they will still be able to make the most of those advantages, but they will also be able to enforce price maintenance by taking co-ops to court and, possibly, preventing them from paying dividends.
    Is the President absolutely certain that the Bill will not give to suppliers who, at the moment, do not discriminate, an opportunity and incentive to discriminate? Those who now supply the Co-operative movement, in spite of the dividend being paid, will still want to supply co-operative societies but will think that they can take them to court and see that no dividend is paid.
    I am sure that the President and those who are not in the Co-operative movement will appreciate that the principle
    1120
    of thrift is of the utmost importance. We thought of it long before the Conservative Party thought of saving. Indeed, there are many people, old-age pensioners and others, who could not exist today if it were not for the fact that they had a dividend which had accumulated in the Co-operative movement. I want the President to assure the Committee that it would not be his intention to encourage suppliers to the Co-operative movement to take advantage of the Bill and to discriminate against the co-ops where they have not done so in the past.
    Mr. Dodds: In my opinion, there are no new arguments to be deployed on this matter. I believe that when the President made his first speech today he was quite ignorant of the seriousness of the situation from the co-operative point of view. Such a thing is quite possible when people are not co-operators and have not studied the subject very deeply. I would, therefore, like to say just a few words in order to bring out a question which has not been answered, but which is of the utmost importance.
    As the debate has continued, I have been satisfied that there is no new argument to advance; but one thing has clearly emerged, namely, that the President has closed his mind to whatever arguments will be put forward. In fact, he had made up his mind right from the beginning, and very definitely. It has been clearly indicated that whatever argument we can put forward, he will not change his view.
    The President must know, because he has never denied it, that he is doing something now in attacking these very important principles which his predecessors would not have done. That is a new departure. He does not argue whether it is better or worse, but he admits that there is a difference here. It is a difference which the Co-operative movement, after fully examining it, knows is a serious one. Many people will be asking this question, and I would ask the President now whether he would stand up at the Dispatch Box and explain why, contrary to the policy of his predecessors, he is introducing this Measure which, as he must know, is an attack on the very principles of a movement which has tens of millions of people dependent upon it.
    Mr. E. Fernyhough: We all appreciate the right hon. Gentleman's anxiety to get on with the Bill. As most of us are anxious to help him, I can tell him how to expedite the business. All he need do is accept the Amendment which will protect the Co-operative movement from the fears which many of us feel are justified.
    It does not matter how hon. Members opposite pretend from time to time that they have no prejudice against the Co-operative movement, for when an issue of this kind arises they show their true colours. The Clause will put the movement at a distinct disadvantage. It will tend to move trade away from the co-ops to private distribution, and that is something which all hon. Gentlemen opposite want. They can never make us believe that they have any great love or admiration for the Co-operative movement.
    The Minister is trying to support big business by strangling the co-ops. We all know that the Proprietary Articles Trade Association has from time to time stopped supplies of goods to the Co-operative movement because it pays dividends. The members of that association know that in all large retail establishments the employers allow concessions to the employees in the form of rebates on purchases. Employees of establishments, in London and elsewhere, can buy articles at a discount although the price has been fixed by the manufacturer, and it has never been known that any supplier has taken action to stop the sale of his goods at a discount.
    On the other hand, because the co-ops give a dividend, not at the time of sale but some months later, covering all sales, the suppliers of the co-ops are to be able to step in and say that they shall no longer be supplied. It is dangerous for the future of Britain to do that. I remember what happened when the radio manufacturers decided not to supply the co-ops with radios. The Co-operative movement made its own. One of the things on which we want to cut down today, whether it be motor cars, radio or any other industry, is competition between manufacturers producing similar types of article. We want more mass production and longer runs. The Co-operative movement will not go without these articles. The right hon. Gentleman
    1122
    will drive the movement to building the necessary factories and attracting the manpower to make its own goods if it does not get supplies through the ordinary channels.
    I therefore beg the right hon. Gentleman to leave aside his prejudices and recognise that 11 million people will be affected by the Clause. If suppliers take action there will be a great measure of inconvenience. I come from a small mining village, where the co-operative society provided the general stores. We got everything from there, and when suppliers refused supplies of patent medicines, Ovaltine, and so on, the people had to tramp for two miles to get what they looked upon as necessities. The Clause will encourage that kind of procedure. The President of the Board of Trade ought to have the grace to recognise the feeling that there is about this matter, cast aside his prejudice, do the right thing, and accept the Amendment and let us get on with the Bill.
    9.00 p.m.
    Mr. Moyle: I should like to respond to the appeal made by the President of the Board of Trade, but I feel so very strongly about this issue that I must again remind him of the position of the co-operative movement and place on record my own attitude to the Clause. I have been a co-operator all my life, but in the observations made from the benches opposite—and I do not except the President—I noted a great deal of ignorance displayed about the whole of the controversy on this Clause. For example, the hon. Member for Putney (Sir H. Linstead), in challenging my right hon. Friend the Member for Battersea. North (Mr. Jay), asked if my right hon. Friend objected to suppliers refusing to supply the Co-operative movement. Of course we do not.
    The Co-operative movement has had to battle right through the years with private interests, supported by the Daily Express, which have maintained, with less success, of course, as time went on, their boycott of the supply of goods of all kinds to the Co-operative movement. That boycott is still being maintained by a number of manufacturing firms and wholesalers, as was indicated by my hon. Friend the Member for Bilston (Mr. R. Edwards). In a free society the Co-operative move

    1123
    ment can have no legal complaint against such action, but it is nevertheless an economic boycott practised by private interests at the expense of the Co-operative movement.
    I can go to my local Co-operative society and buy Gillette razor blades, Player's cigarettes, or tobacco of almost any brand, and pay precisely the same price as I would pay to an ordinary retailer. The dividend that is declared by the local co-operative society is declared on the basis of its own local trading, and is not determined by the price of any particular product. It is a saving that is declared on the basis of the whole of its trading in a particular quarter of the year. It covers clothing, haberdashery and almost every kind of article.
    As I said, there are organisations which still refuse to supply the co-operative societies. What will be the position if the Bill is passed as it stands? I beg the President of the Board of Trade to reflect upon it and to remember the recent experience of the Minister of Education. If the right hon. Gentleman really thinks that this controversy will be dismissed by a mere Division in the Committee tonight he is making the biggest mistake of his political life. The right hon. Gentleman does not realise what is coming to him if this Bill is passed unchanged and evokes once again the long-standing issues relating to the form of trading of the cooperative societies. So I ask the right hon. Gentleman to reflect seriously upon his attitude to this issue, and to make certain that what he decides before he leaves this Bill is the product of his own judgment and not that of his advisers.
    I was influenced by the speech of the hon. and learned Member for Middlesbrough, West (Mr. Simon) in which he put the issue clearly to the President of the Board of Trade. The hon. and learned Gentleman said that the co-operative dividend was a trade rebate, and the President was enthusiastic, by the shake of his head, in endorsing that view—
    Mr. Dodds: But not at the Box.
    Mr. Moyle: No. As a matter of fact the right hon. Gentleman has been cooing like a sucking dove all the evening. There was no trace of that when he was on this
    1124
    side of the House. The right hon. Gentleman has mellowed and become exceedingly tender, kindly and conciliatory during the more mature years of his political existence.
    The President does not believe in the adage about letting sleeping dogs lie; for what the Bill does is to arouse sleeping dogs. Sleeping dogs have been lying around the co-operative societies for a long time—[HON. MEMBERS: "Hear, hear."] Even the Daily Express has allowed them to sleep. [Laughter.] I am talking about the capitalist dogs surrounding the British Co-operative movement. The Bill will place in the hands of every private supplier of goods or food or clothing to the Co-operative movement a legal case, an actionable case against the co-operative societies that will entitle them to go to the courts. Every lawyer will tell them that they have a case to argue. So they will go to the courts, and every little co-operative society will have to trail behind the lawyers and put up its case against a ruling coming from the courts which will be inimical to co-operative trading.
    Therefore, I say to the President, "Do not think that this matter will be dismissed by a Division here this evening". The fight will go on outside the House, and I know that the Co-operative movement will win in the end.
    Mr. W. T. Proctor: This is a deliberate act on the part of the President of the Board of Trade to alter the law and to allow the prejudice against the Co-operative movement to operate. I appeal to the right hon. Gentleman to recognise that this kind of thing has been done in the past against the trade union movement. It had the effect of making the trade union movement ten thousand times more eager to enter politics than it was before.
    I predict that hon. Gentlemen opposite, who are laughing so much tonight and who are so delighted by this deliberate action against the Co-operative movement, will live to regret it. They will do so because the 10 million members of the Co-operative movement throughout the country will recognise that we have here tonight a classic example of a deliberate act by the President of the Board of Trade and the Tory Party, whose only desire is to defeat this form of trading by a vote on the Amendment.
    Mr. Dodds: Will the Minister give an explanation for his action? [HON. MEMBERS: "Divide."] On a point of order, Mr. Blackburn, I did not go into the case. I told the Minister that he had not given a reason for his action.
    The Temporary Chairman: That is not a point of order.
    Mr. Fernyhough: I appeal to the Minister to look at this matter again to see whether, on Report, he cannot do
    something. The right hon. Gentleman must appreciate that there is more opposition to this matter than he thought at first there would be. Having regard to the number of hon. Members who have spoken, and the issues involved, will the Minister look at it again and see what he can do on the Report stage?
    Question put, That those words be there inserted:—
    The Committee divided: Ayes 196, Noes 230.

    Division No. 174.]

    AYES

    [9.9 p.m.

    Ainsley, J. W.

    Grenfell, Rt. Hon. D. R.

    Moyle, A.

    Allaun, Frank (Salford, E.)

    Grey, C. F.

    Mulley, F. W.

    Allen, Arthur (Bosworth)

    Griffiths, David (Rother Valley)

    Neal, Harold (Bolsover)

    Allen, Scholefield (Crewe)

    Griffiths, Rt. Hon. James (Llanelly)

    Oliver, G. H.

    Awberry, S. S.

    Griffiths, William (Exchange)

    Oram, A. E.

    Bacon, Miss Alice

    Grimond, J.

    Orbach, M.

    Baird, J.

    Hale, Leslie

    Oswald, T.

    Bence, C. R. (Dunbartonshire, E.)

    Hall, Rt. Hn. Glenvil (Colne Valley)

    Owen, W. J.

    Benson, G.

    Hamilton, W. W.

    Paget, R. T.

    Beswick, F,

    Hannan, W.

    Paling, Rt. Hon. W. (Dearne Valley)

    Blenkinsop, A.

    Harrison, J. (Nottingham, N.)

    Paling, Will T. (Dewsbury)

    Blyton, W. R.

    Hastings, S.

    Parker, J.

    Boardman, H.

    Hayman, F. H.

    Paton, J.

    Bottomley, Rt. Hon. A. G.

    Healey, Denis

    Peart, T. F.

    Bowden, H, W. (Leicester, S.W.)

    Hobson, C. R.

    Plummer, Sir Leslie

    Bowles, F. G.

    Holmes, Horace

    Popplewell, E.

    Boyd, T. C.

    Holt, A, F.

    Price, J. T. (Westhoughton)

    Braddock, Mrs. Elizabeth

    Houghton, Douglas

    Price, Philips (Gloucestershire, W.)

    Brockway, A. F.

    Howell, Denis (All Saints)

    Proctor, W. T.

    Broughton, Dr. A. D. D.

    Hughes, Cledwyn (Anglesey)

    Pryde, D. D.

    Brown, Rt. Hon. George (Belper)

    Hughes, Emrys (S, Ayrshire)

    Randall, H. E.

    Brown, Thomas (Ince)

    Hughes, Hector (Aberdeen, N.)

    Reeves, J.

    Burke, W. A.

    Hunter, A. E.

    Reid, William

    Burton, Miss F. E.

    Irvine, A. J. (Edge Hill)

    Robens, Rt. Hon. A.

    Butler, Mrs. Joyce (Wood Green)

    Irving, s. (Dartford)

    Roberts, Albert (Normanton)

    Castle, Mrs. B. A.

    Isaacs, Rt. Hon. G. A.

    Roberts, Goronwy (Caernarvon)

    Champion, A. J.

    Janner, B.

    Ross, William

    Chapman, W. D.

    Jay, Rt. Hon. D. P. T.

    Royle, C.

    Chetwynd, G. R.

    Jeger, George (Goole)

    Short, E. W.

    Clunie, J.

    Jenkins, Roy (Stechford)

    Silverman, Julius (Aston)

    Coldrick, W.

    Johnson, James (Rugby)

    Skeffington, A. M.

    Collick, P. H. (Birkenhead)

    Johnston, Douglas (Paisley)

    Slater, J. (Sedgefield)

    Collins, V. J.(Shoreditch & Finsbury)

    Jones, Rt. Hon. A. Creech (Wakefield)

    Smith, Ellis (Stoke, S.)

    Corbet, Mrs. Freda

    Jones, David (The Hartlepool:)

    Sorensen, R. W.

    Cove, W. G.

    Jones, Jack (Rotherham)

    Sparks, J. A.

    Craddock, George (Bradford, S.)

    Jones, J. Idwal (Wrexham)

    Steele, T.

    Cronin, J. D.

    Jones, T. W. (Merioneth)

    Stones, W. (Consett)

    Cullen, Mrs. A.

    King, Dr. H. M.

    Summerskill, Rt. Hon. E.

    Daines, P.

    Lawson, G. M.

    Swingler, S. T.

    Dalton, Rt. Hon. H.

    Ledger, R. J.

    Sylvester, G. O.

    Darling, George (Hillsborough)

    Lee, Frederick (Newton)

    Taylor, Bernard (Mansfield)

    Davies, Harold (Leek)

    Lee, Miss Jennie (Cannock)

    Taylor, John (West Lothian)

    Deer, C.

    Logan, D. G.

    Thomas, Iorwerth (Rhondda, W.)

    Delargy, H. J.

    Mabon, Dr. J. Dickson

    Thomson, George (Dundee, E.)

    Dodds, N. N.

    MacColl, J. E.

    Thornton, E.

    Donnelly, D. L.

    McGhee, H. G.

    Timmons, J.

    Dye, S.

    McGovern, d.

    Tomney, F.

    Ede, Rt. Hon. J. C.

    McInnes, J.

    Turner-Samuels, M.

    Edwards, Rt. Hon. John (Brighouse)

    Edwards, Rt. Hon. Ness (Caerphilly)

    McKay, John (Wallsend)

    Ungoed-Thomas, Sir Lynn

    Edwards, Robert (Bilston)

    McLeavy, Frank

    Usborne, H. C.

    Edwards, w. J. (Stepney)

    MacMillan, M. K. (Western Isles)

    Viant, S. P.

    Evans, Albert (Islington, S.W.)

    Mallalieu, E. L. (Brigg)

    Wade, D. W.

    Evans, Edward (Lowestoft)

    Mann, Mrs. dean

    Warbey, W. N.

    Evans, Stanley (Wednesbury)

    Marquand, Rt. Hon, H. A.

    Watkins, T. E.

    Fernyhough, E.

    Mason, Roy

    Weitzman, D.

    Finch, H. J.

    Mikardo, Ian

    West, D. G.

    Fletcher, Eric

    Monslow, W.

    Wheeldon, W. E.

    Forman, J. C.

    Moody, A. S.

    White, Henry (Derbyshire, N.E.)

    Fraser, Thomas (Hamilton)

    Morris, Percy (Swansea, W.)

    Wilcock, Group Capt. C. A. B.

    Gibson, C. W.

    Morrison, Rt. Hn. Herbert (Lewis'm, S.)

    Wilkins, W. A.

    Gooch, E. G,

    Mort, D. L.

    Willey, Frederick

    Gordon Walker, Rt. Hon. P. C.

    Moss, R.

    Williams, David (Neath)

    Williams, Rev. Llewelyn (Ab'tillery)

    Wilson, Rt. Hon. Harold (Huyton)

    Zilliacus, K.

    William, W. R. (Openshaw)

    Winterbottom, Richard

    Williams, W. T. (Barons Court)

    Woodburn, Rt. Hon. A.

    TELLERS FOR THE AYES:

    Willis, Eustace (Edinburgh, E.)

    Yates, V. (Ladywood)

    Mr. Pearson and Mr. Simmons.

    NOES

    Agnew, Cmdr. P. G.

    Harvey, John (Walthamstow, E.)

    Nabarro, G. D. N.

    Aitken, W. T.

    Hay, John

    Nairn, D. L. S.

    Alport, C. J. M.

    Head, Rt. Hon. A. H.

    Neave, Airey

    Arbuthnot, John

    Heald, Rt. Hon. Sir Lionel

    Nicholls, Harmar

    Armstrong, C. W.

    Heath, Rt. Hon. E. R. G.

    Nicolson, N. (B'n'm'th, E. & Chr'ch)

    Ashton, H.

    Henderson, John (Cathoart)

    Noble, Comdr. A. H. P.

    Baldock, Lt.-Cmdr. J. M.

    Hicks-Beach, Maj. W. W.

    Nugent, G. R. H.

    Baldwin, A. E.

    Hill, Rt. Hon. Charles (Luton)

    Oakshott, H. D.

    Balniel, Lord

    Hill, Mrs. E. (Wythenshawe)

    O'Neill, Hn. Phelim (Co. Antrim, N.)

    Barber, Anthony

    Hinchingbrooke, Viscount

    Orr, Capt. L. P. S.

    Barlow, Sir John

    Hirst, Geoffrey

    Orr-Ewing, Charles Ian (Hendon, N.)

    Barter, John

    Holland-Martin, C. J.

    Osborne, C.

    Baxter, Sir Beverley

    Hornsby-Smith, Miss M. P.

    Page, R. G.

    Bell, Philip (Bolton, E.)

    Horobin, Sir Ian

    Pannell, N. A. (Kirkdale)

    Bidgood, J. C.

    Horsbrugh, Rt. Hon. Dame Florence

    Partridge, E.

    Biggs-Davison, J. A.

    Howard, Hon. Greville (St. Ives)

    Peyton, J. W. W.

    Birch, Rt. Hon. Nigel

    Howard, John (Test)

    Pickthorn, K. W. M.

    Bishop, F. P.

    Hudson, Sir Austin (Lewisham, N.)

    Pilkington, Capt. R. A.

    Body, R. F.

    Hudson, W. R. A. (Hull, N.)

    Pitman, I. J.

    Bossom, Sir A. C.

    Hughes, Hallett, Vloe-Admiral J.

    Pitt, Miss E. M.

    Boyd-Carpenter, Rt. Hon. J. A.

    Hughes-Young, M. H. C.

    Pott, H. P.

    Boyle, Sir Edward

    Hurd, A. R.

    Price, Henry (Lewisham, W.)

    Braine, B. R.

    Hutchison, Sir Ian Clark (E'b'gh, W.)

    Prior-Palmer, Brig. O. L.

    Brooke, Rt. Hon. Henry

    Hutchison, Sir James (Scotstoun)

    Profumo, J. D.

    Brooman-White, R. C.

    Hylton-Fosrer, Sir H. B. H.

    Raikes, Sir Victor

    Browne, J. Nixon (Craigton)

    Iremonger, T. L.

    Redmayne, M.

    Butler, Rt. Hn. R. A. (Saffron Walden)

    Jennings, J. C. (Burton)

    Remnant, Hon. P.

    Campbell, Sir David

    Johnson Dr. Donald (Carlisle)

    Renton, D. L. M.

    Carr, Robert

    Johnson, Eric (Blackley)

    Rippon, A. G. F.

    Cary, Sir Robert

    Johnson, Howard (Kemptown)

    Robertson, Sir David

    Channon, H.

    Jones, Rt. Hon. Aubrey (Hall Green)

    Robinson, Sir Roland (Blackpool, S.)

    Clarke, Brig. Terence (Portsmth, W.)

    Joynson-Hicks, Hon. Sir Lancelot

    Rabson-Brown, W.

    Cole, Norman

    Keegan, D.

    Roper, Sir Harold

    Cordeaux, Lt.-Col. J. K.

    Kerr, H. W.

    Russell, R. S.

    Corfield, Capt. F. V.

    Kershaw, J. A.

    Schofield, Lt.-Col. W.

    Craddock, Beresford (Spelthorne)

    Lambert, Hon. C.

    Scott-Miller, Cmdr. R.

    Crouch, R. F.

    Lambton, Viscount

    Simon, J. E. S. (Middlesbrough, W.)

    Crowder, Sir John (Finchley)

    Lancaster, Cot. C. G.

    Smithers, Peter (Winchester)

    Crowder, Petre (Ruislip—Northwood)

    Leather, E. H. C.

    Spence, H. R. (Aberdeen, W.)

    Currie, G. B. H.

    Leavey, J. A.

    Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)

    Davies, Rt. Hon. Clement (Mongomery)

    Lebum, W. G.

    Stanley, Capt. Hon. Richard

    D'Avigdor-Coldsmid, Sir Henry

    Legge-Bourke, Maj. E. A. H.

    Stevens, Geoffrey

    Deedes, W. F.

    Legh, Hon. Peter (Petersfield)

    Steward, Harold (Stockport, S.)

    Digby, Simon Wingfield

    Lindsay, Martin (Solihull)

    Steward, Sir William (Woolwich, W.)

    Donaldson, Cmdr. C. E. McA.

    Linstead, Sir H. N.

    Stoddart-Scott, Col. M.

    Doughty, C. J. A.

    Llewellyn, D. T.

    Studholme, H. G.

    Drayson, G. B.

    Lloyd, Maj. Sir Guy (Renfrew, E.)

    Summers, G. S. (Aylesbury)

    du Cann, E, D. L.

    Lloyd-George, Maj. Rt. Hon. G.

    Taylor, Sir Charles (Eastbourne)

    Dugdale, Rt. Hn. Sir T. (Richmond)

    Longden, Gilbert

    Taylor, William (Bradford, N.)

    Dunoan, Capt. J. A. L.

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Teeling, W.

    Eden, J. B. (Bournemouth, West)

    Lucas-Tooth, Sir Hugh

    Thomas, Leslie (Canterbury)

    Emmet, Hon. Mrs. Evelyn

    McAdden, S. J.

    Thomas, P. J. M. (Conway)

    Errington, Sir Eric

    Macdonald, Sir Peter

    Thompson, Lt.-Cdr. R. (Croydon, S.)

    Farey-Jones, F. W.

    Mackeson, Brig. Sir Harry

    Thorneycroft. Rt. Hon. P.

    Fell, A.

    McKibbin, A. J.

    Thornton-Kemsley, C. N.

    Finlay, Graeme

    Mackie, J. H. (Galloway)

    Tiley, A. (Bradford, W.)

    Fisher, Nigel

    McLaughlin, Mrs. P.

    Tilney, John (Wavertree)

    Freeth, D. K.

    Maclay, Rt. Hon. John

    Touche, Sir Gordon

    Galbraith, Hon. T. G. D.

    Maclean, Fitzroy (Lancaster)

    Turner, H. F. L.

    Garner-Evans, E. H.

    McLean, Neil (Inverness)

    Turton, Rt. Hon. R. H.

    George, J. C. (Pollok)

    Macleod, Rt. Hn. Iain (Enfield, W.)

    Tweedsmuir, Lady

    Gibson-Watt, D.

    MacLeod, John (Ross & Cromarty)

    Vane, W. M. F.

    Glover, D.

    Maitland, Cdr. J. F. W. (Horncastle)

    Vosper, D. F.

    Godber, J. B.

    Maitland, Hon. Patrick (Lanark)

    Walker-Smith, D. C.

    Gower, H. R.

    Manningham-Buller, Rt. Hn. Sir R.

    Wall, Major Patrick

    Graham, Sir Fergus

    Markham, Major Sir Frank

    Ward, Dame Irene (Tynemouth)

    Grant-Ferris, Wg. Cdr. R. (Nantwich)

    Marlowe, A. A. H.

    Waterhouse, Capt. Rt. Hon. C.

    Green, A.

    Marples, A. E.

    Whitelaw, W. S. I. (Penrith & Border)

    Grimston, Hon. John (St. Albans)

    Marshall, Douglas

    Williams, Paul (Sunderland, S.)

    Grimston, Sir Robert (Westbury)

    Maude, Angus

    Wills, G. (Bridgwater)

    Grosvenor, Lt.-Col. R. G.

    Maydon, Lt.-Comdr. S. L. C.

    Wilson, Geoffrey (Truro)

    Hall, John (Wycombe)

    Medlicott, Sir Frank

    Wood, Hon. R.

    Harris, Frederic (Croydon, N, W.)

    Milligan, Rt. Hon. W. R.

    Woollam, John Victor

    Harris, Reader (Heston)

    Molson, A. H. E.

    Yates, William (The Wrekin)

    Harrison, A. B. C. (Maldon)

    Morrison, John (Salisbury)

    Harrison, Col. J. H. (Eye)

    Mott-Radclylfe, C. E.

    TELLERS FOR THE NOES:

    Mr. E. Wakefield and Mr. Bryan.

    9.15 p.m.
    Sir L. Plummer: I beg to move, in page 17, line 42, to leave out "whether" and to insert "provided that they are".
    The Temporary Chairman (Mr. F. Blackburn): I suggest that it would be convenient to discuss, at the same time, the next Amendment, also in the name of the hon. Member for Deptford (Sir L. Plummer) in page 17, line 43, leave out "or of any other description".
    Sir L. Plummer: Yes, Mr. Blackburn.
    It is quite clear that the Bill interferes a good deal with the liberty of the subject. That is inescapable, for once we decide to embark on steps such as these we are bound to interfere with the liberty which has been enjoyed by some people up to now. Subsection (4) of Clause 20, however, is as tough as any provision ever to be written into a Bill of this kind. The purpose of my two Amendments is to do something towards protecting the small shopkeeper and retailer—the beloved of many hon. Members opposite—from some of the fairly harsh restrictions and penalties that may be imposed upon him.
    The effect of the Clause is that a man who has been found guilty of breaking an agreement for the sale of one particular class of goods can be so treated as to prevent him from continuing that practice with another dissociated class of goods. Let me give an example of how this thing might work. A shopkeeper might, deliberately or inadvertently, break an agreement to sell one of the products of Lever Brothers, a toothpaste or a tin of peas, or a bar of soap. An injunction is obtained against him—and that is a rather harsh weapon to use against a man—not only for the offence which he has committed regarding that particular class of goods or product, but, as the Clause says so clearly, goods "of any other description".
    Does that mean that a man who commits this offence can be punished twice; that there are two penalties? There is, first, the injunction taken against him because he broke an agreement about one class of goods, with the threat of pecuniary damages against him if he continues to do so; and there is the second penalty that he will have a similar sort of injunction and a similar threat of damages against him if he sells any other
    1130
    product presumably made by the same manufacturer.
    This is putting two penalties on a man for one offence, which, I should have thought, was contrary to our law. Certainly, it means that a company which sells a great number of products can almost get itself into the position of establishing a system of collective resale price maintenance, which of course is completely contrary to the spirit of the Bill.
    There are some other things in this Clause which will cause difficulties for the shopkeeper. What is the advantage to him of a sale not applying in the case of goods seized, according to paragraph (b),
    " by way of execution or distress "?
    What is the good to him of an injunction being taken against him on goods that he has already sold? The man has already sold them. He probably needed the money. Perhaps he was in great difficulties and that is why he got rid of the stock in the way this Clause suggests and prohibits. What is to be done to him? Is his life to be made even more difficult? In any case, what is to happen to the goods which a shopkeeper has on the shelf and is not able to sell in normal circumstances?
    Like everyone else, a shopkeeper is subjected to the blandishments of the salesman. I do not suppose that there is a shopkeeper who has not goods on his shelves which he finds extremely difficult to sell. What is he to do with them? Is he to throw them away? What he now does is to sell them to a cheapjack. The cheapjack takes them to the country market. The word "cheapjack" has a quite pleasant connotation to the women in the countryside who travel each week to the market town and go to the stall of the cheapjack to buy these goods at reduced prices. Why are they able to do so? Because this fellow travels round the countryside, relieving shopkeepers of their unsold stock.
    There is no harm in that. Such a person performs a very useful economic purpose. The fact that the housewife can get cheap, if perhaps somewhat dusty, goods, satisfies her. Under this Clause, such a sale will cause penalties to be inflicted on the shopkeeper. I do not see what harm that does to the manufacturer.

    1131
    I understand that, later, my hon. Friend the Member for Blackburn (Mrs. Castle) is to deal with the question of cut prices. It is very difficult to say to the shopkeeper who is inundated with coupons pouring into his shop every day from this advertiser giving 5d. off the price of this article and that advertiser giving 4d. off the price of another brand, that prices ought not to be cut. The fact is that the Clause prevents the continuance of a perfectly reasonable form of dispersal of excess, unsold goods. I am surprised that there should come from hon. and hon. and learned Members opposite so restrictive a Clause as Clause 20.
    Mr. Walker-Smith: The hon. Member for Deptford (Sir L. Plummer) has moved his Amendment, as he always does, persuasively, concisely and with clarity. There are in effect three ways in which one could deal with the problem with which this subsection seeks to deal. It would be possible, as the hon. Member suggests in his Amendment, to limit the court's power to grant an injunction to cover the particular line of goods which is the subject of the offending price cutting. That is what the hon. Member asks for.
    That is one extreme, and it would be possible, as is suggested in Amendments proposed in page 17, line 36 and line 40, which have not been discussed by the Committee, to adopt a suggestion which would extend the power to grant an injunction to cover all price-maintained goods. Those are the two, as it were, extreme positions, either of which we could take up in an effort to solve the problem.
    The subsection in the Bill takes a middle course, which perhaps is not seldom the best solution in these difficult matters. That course is to allow the injunction in respect of all the goods of the particular supplier and of the particular supplier alone. It really is an estimate of what is a reasonable course of action in all the circumstances. We think that that is a reasonable course of action, and that it would be unreasonable, following on the proposal of the hon. Member, to compel a supplier to make possibly repeated application to the court to grant a series of injunctions in respect of different lines of goods which might be successively the subject
    1132
    of price cutting by a small dealer. We think it is not an unreasonable inference that if a dealer is minded to cut prices on one line of a supplier's goods he might very well be minded to extend his operations sooner or later—and perhaps sooner rather than later—to other lines.
    Sir L. Plummer: Is the hon. Gentleman saying that if a man is a thief he therefore might be a wife beater? Is he saying that because a man will cut the price of cornflakes he will cut the price of soap? Surely that is a new departure in law.
    Mr. Walker-Smith: I think that the second proposition is more probable than the first. I resist the temptation at this hour and this stage of the proceedings to follow the hon. Member into those fascinating analogies of criminal law because, although he used the terminology of the criminal law. this is not a matter of criminal law. Although the hon. Member spoke of a double penalty he will appreciate that this subsection limits the relief which the court can grant to injunction and does not give a right of damages so there is no question of a double penalty even in the civil sense of the term.
    The hon. Gentleman referred to the provisions of subsection (2, b). That is, of course, to relieve from the provisions of this subsection certain special forms of sale under a distress or so on, where we can hardly expect the resale price maintenance condition to run.
    9.30 p.m.
    I would add, as a final observation in answer to the generality of the hon. Gentleman's argument. that there may be a harshness in this. He suggested, for example. that this provision might bite on an inadvertence. I am sure that the hon. Gentleman and the Committee will bear in mind in all these matters that an injunction is a discretionary remedy, and it is always within the discretion of the court whether to grant the relief or not. I have little or no hesitation in saying that in the case of inadvertence quoted by the hon. Gentleman it was extremely unlikely that any court would grant an injunction in those terms in such a case.
    I trust that the hon. Gentleman, having raised this point and ventilated it in this way, will not feel himself obliged to press the Amendment.
    Sir L. Ungoed-Thomas: The Parliamentary Secretary has made an unsatisfactory reply. My hon. Friend the Member for Deptford (Sir L. Plummer) has put his case clearly and very forcibly before the Committee and I do not intend to cover any of the ground which he has covered.
    My hon. Friend has made the point that what is being provided by this subsection is really a very harsh remedy. and that in the case, for instance, of a vast firm like Levers, if there is a departure by the retailer in one instance from the provisions of the agreement, then every single article within the range of the Lever commodities could come within an injunction granted by the court. That, as he said, is an extremely harsh provision. It is, we believe, really out of proportion to the sort of remedy that ought to be provided.
    There is one other point which I would put forward in supplementing what my hon. Friend has said. As the Parliamentary Secretary has said, very rightly, an injunction is, of course, a discretionary remedy. He will recognise that what is contemplated—in fact, the sole purpose of the Clause—is that the remedy, which is not to be an ancillary remedy, shall be by way of injunction. When an application is made for an injunction for selling in breach of notice, as it is here now, the whole case deployed before the court would be bearing upon the cases in respect of which the breach has been committed.
    What is contemplated by this Clause is that an injunction could be granted not
    only in respect of those goods but of all the goods of that supplier, and all kinds of different considerations may arise. There may be very different circumstances, and the circumstances may change. It is quite conceivable that an injunction may be granted in respect of goods on which a breach has taken place and not on other goods. Nevertheless, the case that will be deployed before the court, as the Parliamentary Secretary will know—the whole gist of the application—will be on the breach that has been made, and the danger of this Clause is that, although the breach has been in respect of a particular class of goods, nevertheless all the other classes of goods would be included in the injunction, without the matter being deployed and examined in the same way as it would have been in the case of the goods which had been involved in the breach, That seems to us an extremely harsh provision, quite unnecessarily so, and really not justifiable for the purposes of the remedy. It puts in a privileged position the big concern, with the vast range of goods which it supplies, as compared with the small man who provides one or two articles.
    The Government's reply is not satisfactory. We do not want to spend a great deal of time on the point, but we certainly do not accept the case made by the Parliamentary Secretary and we shall press the Amendment to a Division.
    Question put, That "whether" stand part of the Clause:—
    The Committee divided: Ayes 228, Noes 189.

    Division No. 175.]

    AYES

    [9.35 p.m.

    Agnew, Cmdr. P. G.

    Brooke, Rt. Hon. Henry

    Duncan, Capt. J. A. L.

    Aitken, W. T.

    Brooman-White, R. C.

    Eden, J. B. (Bournemouth, West)

    Alport, C. J. M.

    Browne, J. Nixon (Craigton)

    Emmet, Hon. Mrs. Evelyn

    Amery, Julian (Preston, N.)

    Bryan, P.

    Errington, Sir Eric

    Arbuthnot, John

    Butler, Rt. Hn. R. A. (Saffron Walden)

    Farey-Jones, F. W.

    Armstrong, C. W.

    Carr, Robert

    Fell, A.

    Ashton, H.

    Cary, Sir Robert

    Finlay, Graeme

    Atkins, H. E.

    Channon, H.

    Fisher, Nigel

    Baldock, Lt.-Cmdr. J. M.

    Clarke, Brig. Terence (Portsmth, W.)

    Freeth, D. K.

    Baldwin, A. E.

    Cole, Norman

    Galbraith, Hon. T. G. D.

    Balniel, Lord

    Cordeaux, Lt.-Col. J. K.

    Garner-Evans, E. H.

    Barber, Anthony

    Corfield, Capt. F. V.

    George, J. C. (Pollok)

    Barlow, Sir John

    Craddook, Beresford (Spelthorne)

    Gibson-Watt, D.

    Barter, John

    Crouch, R. F.

    Glover, D.

    Baxter, Sir Beverley

    Crowder, Sir John (Finohley)

    Godber, J. B.

    Bell, Philip (Bolton, E.)

    Currie, G. B. H.

    Gower, H. R.

    Bidgood, J. C.

    D'Avigdor-Goldsmid, Sir Henry

    Graham, Sir Fergus

    Biggs-Davison, J. A.

    Deedes, W. F.

    Grant-Ferris, Wg.Cdr. R. (Nantwich)

    Bishop, F. P.

    Digby, Simon Wingfieid

    Green, A.

    Body, ft. F.

    Donaldson, Cmdr. C. E. McA.

    Gresham Cooke, R.

    Bossom, Sir A. C.

    Doughty, C. J. A.

    Grimston, Hon. John (St. Albans)

    Boyd-Carpenter, Rt. Hon. J. A.

    Drayson, G. B.

    Grimston, Sir Robert (Westbury)

    Boyle, Sir Edward

    du Cann, E. D. L.

    Grosvenor, Lt.-Col. R. G.

    Braine, B. R.

    Dugdale, Rt. Hn. Sir T. (Richmond)

    Hall, John (Wycombe)

    Harris, Frederic (Croydon, N.W.)

    Lloyd, Maj. Sir Guy (Renfrew, E.)

    Renton, D. L. M.

    Harris, Reader (Heston)

    Lloyd-George, Maj. Rt. Hon. G.

    Rippon, A. G. F.

    Harrison, A. B. C. (Maldon)

    Longden, Gilbert

    Robertson, Sir David

    Harvey, Air Cdre. A. V. (Macclesfd)

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Robinson, Sir Roland (Blackpool, S.)

    Harvey, John (Walthamstow, E.)

    Lucas-Tooth, Sir Hugh

    Roper, Sir Harold

    Hay, John

    Macdonald, Sir Peter

    Ropner, Col. Sir Leonard

    Head, Rt. Hon. A. H.

    Mackeson, Brig. Sir Harry

    Russell, R. S.

    Heald, Rt. Hon. Sir Lionel

    McKibbin, A. J.

    Schofield, Lt.-Col. W.

    Heath, Rt. Hon. E. R. G.

    Mackie, J. H. (Galloway)

    Scott-Miller, Cmdr. R.

    Henderson, John (Cathoart)

    McLaughlin, Mrs. P.

    Shepherd, William

    Hill, Rt. Hon. Charles (Luton)

    Maclay, Rt. Hon. John

    Simon, J. E. S. (Middlesbrough, W.)

    Hill, Mrs. E. (Wythenshawe)

    Maclean, Fitzroy (Lancaster)

    Smithers, Peter (Winchester)

    Hill, John (S. Norfolk)

    McLean, Neil (Inverness)

    Spence, H. R. (Aberdeen, W.)

    Hinchingbrooke, Visoount

    Macleod, Rt. Hn. Iain (Enfield, W.)

    Stanley, Capt. Hon. Richard

    Hirst, Geoffrey

    MacLeod, John (Ross & Cromarty)

    Stevens, Geoffrey

    Holland-Martin, C. J.

    Maitland, Cdr. J. F. W. (Horncastle)

    Steward, Harold (Stockport, S.)

    Hornsby-Smith, Miss M. P.

    Maitland, Hon. Patrick (Lanark)

    Steward, Sir William (Woolwich, W.)

    Horobin, Sir Ian

    Manningham-Buller, Rt. Hn. Sir R.

    Stoddart-Soott, Col. M.

    Horsbrugh, Rt. Hon. Dame Florence

    Markham, Major Sir Frank

    Studholme, H. G.

    Howard, Hon. Greville (St. Ives)

    Marlowe, A. A. H.

    Summers, G. S. (Aylesbury)

    Howard, John (Tent)

    Marshall, Douglas

    Taylor, Sir Charles (Eastbourne)

    Hudson, Sir Austin (Lewisham, N.)

    Maude, Angus

    Taylor, William (Bradford, N.)

    Hudson, W. R. A. (Hull, N.)

    Maydon, Lt.-Comdr. S. L. C.

    Teeling, W.

    Hughes Hallett, Vice-Admiral J.

    Medlicott, Sir Frank

    Thomas, Leslie (Canterbury)

    Hurd, A. R.

    Milligan, Rt. Hon. W. R.

    Thomas, P. J. M. (Conway)

    Hutchison, Sir Ian Clark (E'b'gh, W.)

    Molson, A. H. E.

    Thompson, Lt. Cdr. R. (Croydon, S.)

    Hutchison, Sir James (Scotstoun)

    Morrison, John (Salisbury)

    Thorneycroft, Rt. Hon. P.

    Hylton-Foster, Sir H. B. H.

    Mott-Radclyffe, C. E.

    Thornton Kemsley, C. N.

    Iremonger, T. L.

    Nabarro, G. D. N.

    Tiley, A. (Bradford, W.)

    Irvine, Bryant Godman (Rye)

    Nairn, D. L. S.

    Tilney, John (Wavertree)

    Jenkins, Robert (Dulwloh)

    Neave, Airey

    Touche, Sir Gordon

    Jennings, J. C. (Burton)

    Nicholls, Harmar

    Turner, H. F. L.

    Johnson, Dr. Donald (Carlisle)

    Nicolson, N. (B'n'm'th, E. & Chr'ch)

    Turton, Rt. Hon. R. H.

    Johnson, Eric (Blackley)

    Noble, Comdr. A. H. P.

    Tweedsmuir, Lady

    Johnson, Howard (Kemptown)

    Nugent, G. R. H.

    Vane, W. M. P.

    Jones, Rt. Hon. Aubrey(Hall Green)

    Oakshott, H. D.

    Vickers, Miss J. H.

    Joseph, Sir Keith

    O'Neill, Hn. Phelim (Co. Antrim, N.)

    Vosper, D. F.

    Joynson-Hicks, Hon. Sir Lancelot

    Orr, Capt. L. P. S.

    Wakefield, Edward (Derbyshire, W.)

    Keegan, D.

    Orr-Ewing, Charles Ian (Hendon, N.)

    Walker-Smith, D. C.

    Kerby, Capt. H. B.

    Osborne, C.

    Wall, Major Patrick

    Kerr, H. W.

    Page, R. G.

    Ward, Dame Irene (Tynemouth)

    Kershaw, J. A.

    Pannell, N. A. (Klrkdale)

    Waterhouse, Capt. Rt. Hon. C.

    Lambert, Hon. G.

    Partridge, E.

    Whitelaw, W. S. I. (Penrith & Border)

    Lambton, Viscount

    Peyton, J. W. W.

    Williams, Paul (Sunderland, S.)

    Lancaster, Col. C. G.

    Pickthorn, K. W, M.

    Wills, G. (Bridgwater)

    Langford-Holt, J. A.

    Pilkington, Capt. R. A.

    Wilson, Geoffrey (Truro)

    Leather, E. H. C.

    Pitman, I. J.

    Wood, Hon. R.

    Leavey, J. A.

    Pitt, Miss E. M.

    Woollam, John Victor

    Leburn, w. G.

    Pott, H. P.

    Yates, William (The Wrekin)

    Legge-Bourke, Maj. E. A. H.

    Price, Henry (Lewisham, W.)

    Legh, Hon. Peter (Petersfield)

    Profumo, J. D.

    TELLERS FOR THE AYES:

    Lindsay, Martin (Solihull)

    Raikes, Sir Victor

    Colonel J. H. Harrison and

    Linstead, Sir H. N.

    Redmayne, M.

    Mr. Hughes-Young.

    Llewellyn, D. T.

    Remnant, Hon. P.

    NOES

    Ainsley, J. W.

    Chetwynd, G. R.

    Fletcher, Eric

    Allaun, Frank (Salford, E.)

    Clunie, J.

    Forman, J. C.

    Allen, Arthur (Bosworth)

    Coldrick, W.

    Fraser, Thomas (Hamilton)

    Allen, Scholefield (Crewe)

    Collick, P. H. (Birkenhead)

    Gibson, C. W.

    Awbery, S. S.

    Collins, V. J.(Shoreditch & Finsbury)

    Gooch, E. G.

    Bacon, Miss Alice

    Corbet, Mrs. Freda

    Gordon Walker, Rt. Hon. P. C.

    Baird, J.

    Craddock, George (Bradford, S.)

    Grenfell, Rt. Hon. D. R.

    Bence, C. R. (Dunbartonshire, E.)

    Cronin, J. D.

    Grey, C. F.

    Benson, G.

    Cullen, Mrs. A.

    Griffiths, David (Rother Valley)

    Beswick, F.

    Dalton, Rt. Hon. H.

    Griffiths, Rt. Hon. James (Llanelly)

    Blenkinsop, A.

    Darling, George (Hillsborough)

    Griffiths, William (Exchange)

    Blyton, W. R.

    Davies, Rt. Hon. Clement (Montgomery)

    Grimond, J.

    Boardman, H,

    Davies, Harold (Leek)

    Hall, Rt. Hn. Glenvil (Colne Valley)

    Bottomley, Rt. Hon. A. G.

    Deer, G.

    Hannan, W.

    Bowden, H. W. (Leicester, S.W.)

    Delargy, H. J.

    Harrison, J. (Nottingham, N.)

    Bowles, F. G.

    Dodds, N. N.,

    Hastings, S.

    Boyd, T. C.

    Donnelly, D. L.

    Hayman, F. H.

    Braddock, Mrs. Elizabeth

    Dye, S.

    Healey, Denis

    Brockway, A. F.

    Ede, Rt. Hon. J. C.

    Hobson, C. R.

    Broughton, Dr. A. D. D.

    Edwards, Rt. Hon. John (Brighouse)

    Holmes, Horace

    Brown, Rt. Hon. George (Belper)

    Edwards, Rt. Hon. Ness (Caerphilly)

    Holt, A. F.

    Brown, Thomas (Ince)

    Edwards, Robert (Bilston)

    Houghton, Douglas

    Burke, W. A.

    Edwards, w. J. (Stepney)

    Howell, Denis (All Saints)

    Burton, Miss F. E.

    Evans, Albert (Islington, S.W.)

    Hughes, Cledwyn (Anglesey)

    Butler, Mrs. Joyce (Wood Green)

    Evans, Edward (Lowestoft)

    Hughes, Emrys (S. Ayrshire)

    Castle, Mrs. B. A.

    Evans, Stanley (Wednesbury)

    Hughes, Hector (Aberdeen, N.)

    Champion, A. J.

    Fernyhough, E.

    Hunter, A. E.

    Chapman, W. D.

    Finch, H. J.

    Hynd, H. (Accrington)

    1136

    1137

    Irvine, A. J. (Edge Hill)

    Moyle, A.

    Summersklli, Rt. Hon. E.

    Irving, S. (Dartford)

    Mulley, F. W.

    Swingler, S. T.

    Isaacs, Rt. Hon. C. A.

    Neal, Harold (Bolsover)

    Sylvester, G. O.

    Janner, B.

    Oliver, G. H.

    Taylor, Bernard (Mansfield)

    Jay, Rt. Hon. D. P. T.

    Oram, A. E.

    Taylor, John (West Lothian)

    Jeger, George (Goole)

    Orbach, M.

    Thomas, Iorwerth (Rhondda, W.)

    Jenkins, Roy (Stechford)

    Oswald, T.

    Thomson, George (Dundee, E.)

    Johnston, Douglas (Paisley)

    Owen, W. J.

    Thornton, E.

    Jones, Rt. Hon. A. Creech (Wakefield)

    Paget, R. T.

    Timmons, J.

    Jones, David (The Hartlepools)

    Paling, Rt. Hon. W. (Dearne Valley)

    Tomney, F.

    Jones, Jack (Rotherham)

    Paling, Will T. (Dewsbury)

    Turner-Samuels, M.

    Jones, J. Idwal (Wrexham)

    Parker, J.

    Ungoed-Thomas, Sir Lynn

    Jones, T. W. (Merioneth)

    Paton, J.

    Usborne, H. C.

    King, Dr. H, M.

    Peart, T. F.

    Wade, D. W.

    Lawson, C. M.

    Plummer, Sir Leslie

    Warbey, W. N.

    Ledger, R. J.

    Popplewell, E.

    Watkins, T. E.

    Lee, Frederiok (Newton)

    Price, J. T. (Westhoughton)

    Weitzman, D.

    Logan, D. G.

    Price, Philips (Gloucestershire, W.)

    West, D. G.

    Mabon, Dr. J. Dickson

    Proctor, W. T.

    Wheeldon, W. E.

    MacColl, J. E.

    Pryde, D. J.

    White, Henry (Derbyshire, N.E.)

    McGhee, H. G.

    Randall, H. E.

    Wilkins, W. A.

    McGovern, J.

    Reeves, J.

    Willey, Frederick

    McInnes, J.

    Robens, Rt. Hon. A.

    Williams, David (Neath)

    McKay, John (Wallsend)

    Roberts, Albert (Normanton)

    Williams, Rev. Llywelyn (Ab'tillery)

    McLeavy, Frank

    Roberts, Goronwy (Caernarvon)

    Williams, W. R. (Openshaw)

    MacMillan, M. K. (Western Isles)

    Ross, William

    Williams, W. T. (Barons Court)

    Mallalieu, E. L. (Brigg)

    Royle, C.

    Willis, Eustace (Edinburgh, E.)

    Mann, Mrs. Jean

    Short, E. W.

    Wilson, Rt. Hon. Harold (Huyton)

    Marquand, Rt. Hon. H. A.

    Silverman, Julius (Aston)

    Winterbottom, Richard

    Mason, Roy

    Skeffington, A, M.

    Woodbum, Rt. Hon. A.

    Mikardo, Ian

    Slater, J. (Sedgefield)

    Woof, R. E.

    Monslow, W.

    Smith, Ellis (Stoke, S.)

    Yates, V. (Ladywood)

    Moody, A. S.

    Sorensen, R. W.

    Zilllacus, K.

    Morris, Percy (Swansea, W.)

    Sparks, J. A.

    Mort, D. L.

    Steele, T.

    TELLERS FOR THE NOES:

    Moss, R.

    Stones, W. (Consett)

    Mr. Pearson and Mr. Simmons.

    9.45 p.m.
    Mr. Rov Jenkins: I beg to move, in page 17, line 43, at the end to add:
    "but the court shall not grant an injunction unless it is satisfied that the granting of the injunction would not be contrary to the public interest".
    The Deputy-Chairman (Sir Rhys Hopkin Morris): Perhaps it will be convenient to take this Amendment and the remaining Amendments on page 3040 of the Notice Paper together.
    Sir L. Ungoed-Thomas: I think perhaps the convenient course would be to take this Amendment and the next three together, because the last one really raises a different point.
    The Deputy-Chairman: I understood that that was the original position, but I am now informed that it is desired to change.
    Hon. Members: No.
    Mr. E. Fletcher: I am prepared to move the last Amendment on that page, to which my name is attached, and which raises a totally separate point.
    The Deputy-Chairman: Then it may be convenient to take the Amendment which I have called and the next three together:
    1138
    In page 17, line 43, at the end to add:
    "but the court shall not grant an injunction unless it is satisfied that it is not calculated to operate to an unreasonable extent to the detriment of purchasers consumers and users of such goods or otherwise to the detriment of the public".
    In line 43, at the end to add:
    "but the court shall not grant an injunction unless it is satisfied that the said condition is reasonable in the interests of the supplier and of the consumers".
    In line 43, at the end to add:
    "but the court shall not grant an injunction unless it is satisfied that it cannot directly or indirectly assist the enforcement of any agreement within section five of this Act which has been declared to be contrary to the nubile interest or section nineteen of this Act".
    Mr. Jenkins: These four Amendments, together with the Amendment which my hon. Friend the Member for Islington, East (Mr. E. Fletcher) will move later, have a common purpose. Their purpose is that of seeking to remove the situation in which individual resale price maintenance has the automatic protection of the courts and is in all circumstances regarded as something which is not to be argued about, but which the courts will automatically protect. That is the purpose of the Amendments, which offer alternative methods to achieve the purpose of the Clause. I do not want to discuss the

    1139
    methods, but to turn to the underlying purpose and discuss it.
    I think that throughout the debate this evening the Government have been in a difficulty because the way in which this Clause and the preceding Clause are drafted shows the extraordinary attitude of the Government. One can well understand them approaching this matter in something of a spirit of compromise. No doubt some people in the Cabinet said one thing and other people said another about resale price maintenance, and it was eventually decided to outlaw in a blanket way the collective enforcement of resale price maintenance, and, at the same time, to make a complete legal blanket enforcement of individual resale price maintenance, which might appear to be a fairly satisfactory compromise.
    It is not, however, something that really stands up to logical examination, and now, having seen Amendment after Amendment put forward from both this side of the Committee and from the other, the Government are finding it very difficult to maintain a consistent attitude, just because of this question of resale price maintenance. They concern themselves entirely with the shadow of enforcement, and have not worried about the substance of the thing itself.
    Here, we are concerned about the substance of resale price maintenance. We are not in these Amendments attempting to go in an extreme direction in relation to resale price maintenance, which we can discuss on the Question, That the Clause stand part of the Bill. We are not attempting to take the line that all resale price maintenance is bad, but we are putting forward the reasonable point of view that, while individual resale price maintenance may be a good thing in some cases, there are equally other cases where the case for it is by no means obvious, and where it is wrong that it should be granted the automatic protection of the court, without the court having any discretion at all to consider the issue of the public interest, as in other parts of this Bill it is constantly being told to do.
    This should be a point of view which ought, in logic at any rate, to be acceptable to many hon. Members opposite who have put Amendments before the Committee and have spoken in support of them on Clause 19. When we were dealing
    1140
    with one part of the Government's compromise—that outlawing collective enforcement of resale price maintenance—one Member after another on the other side of the Committee asked us at least to accept the possibility that, concerning the collective enforcement of resale price maintenance, which after all most people regard as one of the most objectionable features of the whole field of restrictive practices, something in that direction might be desirable. What we are asking in this Amendment is the converse, but a much more responsible converse, of that.
    We are asking that, in a Bill which is intended to be an anti-restrictive practices Bill, the Government should accept at least the possibility that some cases of individual resale price maintenance may not be in the public interest. In order to do that, one does not have to take the extreme point of view. The hon. Member for Carlisle (Dr. D. Johnson) referred to the book trade, in which there probably is a case for individual resale price maintenance. In many other cases the same position may be accepted, but what we are asking is that the Court should have some discretion, and should be able to bring into the balance the public interest.
    We have heard from the benches opposite today a number of extremely muddled and confused arguments in favour of individual resale price maintenance. I thought that a very effective reply was made a little earlier by the hon. Member for Ealing, South (Mr. Maude) to some points raised by the hon. Member for Twickenham (Mr. Gresham Cooke) on that subject. The hon. Member for Heston and Isle-worth (Mr. R. Harris) made some remarks which would have been more fitting if made on this Clause than on the Clause on which he spoke. I should like to make a few comments on those points.
    One of the points made in an intervention to a speech by my hon. Friend the Member for Deptford (Sir L. Plummer) was that it did not matter if we did not have price competition in cases of resale price maintenance goods, because there were a lot of other goods in respect of which we could have price competition and which would allow the economies of more efficient methods of retailing to be passed on to the consumer. That is a most extraordinary argument. Why should it be assumed that it is a good

    1141
    thing not to have price competition in a certain range of goods because there is another range of goods in which we can have price competition? This is by no means clear or logical.
    It is also argued that we cannot have competition in service unless we exclude competition in price. That again seems to be a most extraordinary proposition and a completely false antithesis. There is no reason why there cannot be competition in a service which is given alongside with price competition. The danger about concentrating on competition in service without having competition in price is that we then get into a position in which we may well be offering the consumer a choice of a whole range of things but which are not the things he really wants.
    Mr. Gresham Cooke: The hon. Member is overlooking the factor of competition in price as between manufacturers. That remains. There is always competition in price between manufacturers.
    The Deputy-Chairman: The hon. Gentleman appears to be widening the scope of the debate on this Amendment.
    Mr. Jenkins: The point underlying all these Amendments is that the court should have the power not to grant an injunction if it feels in particular cases that individual resale price maintenance is not in the public interest. The issue to which I was attempting to address myself, and which seems to be central to this matter, is whether there may be a particular case in which individual resale price maintenance is not in the public interest. In order to discuss that matter sensibly one is bound to argue some of the consequences of individual resale price maintenance and some of the advantages which there would be from its disappearance.
    The hon. Member for Twickenham made an intervention which was very similar to that with which I tried to deal earlier, namely, that it is all right to have no price competition in a certain range of goods because it is possible to have that competition in another range of goods. He says it is all right to have no competition at the retail stage because we can have it at the manufacturing stage.
    Hon. Members must make up their minds whether price competition is a
    1142
    good thing or is not a good thing. If it is not a good thing, it cannot be an advantage that we have it in some other way; if it is a good thing, it is by no means self-evident why we should not have it at the retail end. If it is good for manufacturers, why must it be excluded entirely from the retail field? I cannot in any way follow the force of the arguments on that point advanced by the hon. Member for Twickenham.
    A series of comments have been made about small shopkeepers. The hon. Member for Heston and Isleworth (Mr. R. Harris), in his exhilarating oration a little earlier today, was, I think, rather unjust to the small shopkeeper. He speaks of the small shopkeeper as though he has to be mollycoddled and protected by the law to quite a ridiculous extent in order to remain in existence at all. I am quite sure that the association of small shopkeepers, or whatever such a body may be called, would be extremely ill-advised to employ the hon. Member for Heston and Isleworth as a public relations officer, because he presents the whole case on the basis that the small shopkeeper is so grossly inefficient that he cannot hope to keep in business unless the whole price mechanism of the retail trade is rigged in his favour. The hon. Gentleman has taken the argument much too far.
    If it is true, as we are constantly being reminded by hon. Members opposite, that competition in service is extremely important and we should not concern ourselves only with competition in price, the argument applies both ways. If the small shopkeeper is really serving the needs of the public—as I am sure he is in certain cases—he should be able to remain in being because of the better service which he can offer as compared with the large concerns. The hon. Member for Heston and Isleworth has substantially overstated his case in that regard.
    The point that we are trying to make here is that it is by no means self-evident that individual resale price maintenance is of public good. We therefore ask, not at all unreasonably, that it should be open to the court, as it is in almost every other Part of the Bill, to take account of the various grounds of public interest which are set out in detail in the Bill, to decide that certain schemes are not in

    1143
    the public interest, and accordingly to refuse an injunction when these matters are under consideration.
    Mr. R. Harris: The hon. Member for Stechford (Mr. Roy Jenkins) is, of course, falling into the old political error of picking out those parts of reports which suit his book and ignoring those which do not. He has just made a statement which really needs answering. He says that the desirability of individual resale price maintenance is not necessarily selfevident. Hon. Members on the other side of the Committee have continually been quoting from the numerous reports on the subject. All of them have supported individual price maintenance. It is on collective price maintenance that some have expressed doubt, though, even here, there has been approval. Support for individual price maintenance has been consistent throughout.
    Mr. Roy Jenkins: Would the hon. Member say that the Report of the Monopolies Commission on the Supply and Export of Pneumatic Tyres—which I am sure he must have looked at—offered a complete justification of the Dunlop scheme for resale price maintenance?
    Mr. Harris: There is no criticism of what Dunlop has done in the Report. I was not speaking of reports on individual industries; I was referring to general reports on collective discrimination.
    I cannot understand why the hon. Member says that I have done injustice to the small shopkeepers, because I have not. It is quite wrong of him to say that. The real point is that if the hon. Member wants a court to pronounce upon the desirability or otherwise of this, he should have supported me on Clause 19, when I wanted all these matters to be subject to registration and to go before the Restrictive Practices Court. That would have been his proper line of action.
    10.0 p.m.
    The Deputy-Chairman: Order. We must not go back to Clause 19.
    Mr. Harris: I was afraid that you would say that, Sir Rhys, but I got the point in before I was called to order. It is the obvious answer.
    The Deputy-Chairman: The obvious answer is to keep in order.
    Mr. Harris: The Amendment wants the Court to say whether or not the granting of an injunction is contrary to the public interest. There is a perfectly good procedure laid down in the Bill for deciding whether or not something is in the public interest. I hope my right hon. Friend will resist the Amendment, which will make the application of resale price maintenance still more difficult than it will be in any case. The difficulties will be colossal. I have not much faith in Clause 20. It will be very difficult to work because of the difficulties of suppliers actually taking action to enforce their prices. They may be entitled to do it under the Clause, but whether they will be able to do it is quite a different matter. I hope that my right hon. Friend will resist anything which will make it more difficult.
    Mr. Grimond: I hope that the hon. Member for Heston and Isleworth (Mr. R. Harris) may prove right in thinking that Clause 20 will not be as effective as some of us fear it may be. My own suspicion is that, in some trades at any rate, by the judicious application of Clause 20 we may come precious near to collective price maintenance again. We must watch that position carefully. We are not yet quite clear how far the trade associations may help in actions taken by individual suppliers under Clause 20. That, also, is very important. I fully appreciate that an association cannot take action under Clause 20 in its own name, but how far it can give assistance to the supplier is a point about which the Parliamentary Secretary might be good enough to say something.
    There have been reports which certainly uphold individual resale price maintenance. I agree that there is a case for individual resale price maintenance, certainly in some trades and in relation to some goods, although, having listened to the argument, I find it more and more difficult to understand exactly which goods these are which have a cast-iron case for price maintenance. At the same time, it is becoming abundantly clear that there are great difficulties over the whole matter. There was the difficulty with the co-operative societies, and there is the real difficulty, pointed out by the hon.

    1145
    Member for Deptford (Sir L. Plummer), of the small trader who wants to get rid of his surplus stock and who becomes liable for heavy penalty if he tries to do so.
    I have considerable sympathy with the Amendment. I certainly think that it would be a step in the right direction, if it were practicable. What I am not clear about, after listening to the hon. Member for Stechford (Mr. Roy Jenkins), is whether the court would be an ordinary court and not the Restrictive Practices Court. We should have two courts pronouncing on public interest in relation to all those questions of restrictive practices in the Bill. We should have one definition from the Restrictive Practices Court, and it is not inconceivable that we might have a different definition of public interest from the other court. That is a genuine difficulty. If that could be surmounted I should feel happier about the Amendment.
    I suggest that the Government should take back the whole of Clause 20 and look at it again and consider whether it does not go much too far, and particularly whether it does not get near to collective price maintenance. If the Amendment proves impracticable, the Government might see whether they cannot bring forward something at a later stage which would limit individual price maintenance to cases which can be shown to be not only in the interests of the supplier, but also in the interests of the public. It may be out of order to say so now, but Clause 19, also, might well be a matter for reconsideration.
    Mrs. Castle: I want to support the Amendment and to suggest to the Committee that it is a very important one to which we must give careful consideration. It seems to me that there is a rather lighthearted approach to the Clause on the part of the President of the Board of Trade and the Parliamentary Secretary. We are taking a very serious step here, because we are going further than merely accepting individual resale price maintenance. We are giving a legal status to enforcement which it has not had before. We are taking a restrictionist practice and giving it a new legal sanction in the Clause. We on this side of the Committee suggest that that is something which we simply cannot do automatically without
    1146
    there being a check to ensure that the public interest is safeguarded.
    We recently had a very good speech by the President of the Board of Trade in which he rejoiced our hearts by pointing out that we should recognise that price maintenance was not a desirable thing and that what people hoped for was a reduction in prices and not the consolidation of higher prices. In this Clause, however, we have a remarkable example of Conservative policy. We on this side of the Committee have frequently argued in favour of enforcement by law of maximum prices, but the Government have opposed that. They have abolished price control. They do not believe in having that kind of sanction, but in this Clause we have the Government introducing by legal sanction a minimum price control. We ought to realise the seriousness of this step.
    We have heard many arguments in favour of individual resale price maintenance, and arguments why the manufacturer should have the right to safeguard his own reputation and the quality of his goods and his own manufacturing processes by being able to ensure that the prices which he thinks are right should be maintained. But a great deal of this is sheer "hooey." The case which is sometimes made out for the resale price maintenance of branded goods simply will not bear examination.
    Let us take, for instance, the classic case of detergents. Only this morning there was pushed through my door a 5d. voucher from Persil informing me that if I would go to my shop and buy a giant packet of Persil I would get 5d. knocked off the price.
    This price war amongst the detergent manufacturers has been going on for months. Are we to say that a manufacturer should be allowed to maintain his prices by law when he cuts them himself by giving free vouchers? One of the things that I would want the court to do would be to refuse an injunction for enforcing resale price maintenance to any firm which cuts its own prices. In this matter we are reaching a ludicrous situation. Whose reputation is safeguarded in this case? Is Persil's? Is Dreft's? Is Tide's? Is Surf's? Is that of any other of this tidal wave of detergents sweeping across the market? Whose reputation is maintained?

    1147
    If I liked to take to my grocer the 5d. voucher for Persil or the 3d. voucher for Surf or the 2d. voucher for Tide—or whatever it is, I do not keep count—I could trade the voucher for anything. [An HON. MEMBER: "Cigarettes."] I could trade them for anything. They represent a discount which the retailer will collect from the manufacturer. It does not necessarily mean that I have to buy a giant packet of Persil—
    The Deputy-Chairman: Order, order. I am loath to interrupt the hon. Lady, but her speech is really directed to the Question, "That the Clause stand part of the Bill."
    Mrs. Castle: With respect, Sir Rhys, that is not so. I am saying that the case often made for the enforcement of resale price maintenance under this Clause is that a firm must be able to maintain the reputation of its own branded goods. I suggest that manufacturers themselves make that reputation absurd by devices such as these vouchers. I am arguing that one of the things we have in mind in moving this Amendment is that the court should refuse to grant an injunction to any manufacturer who is not maintaining his own resale price, and I suggest that this is in order.
    There ought to be good arguments used for giving this new legal sanction before we permit it. Another argument used is that the price maintenance of branded goods enables a firm to get an adequate return with which it can carry out the research from which we all benefit. There, again, much nonsense is talked. One of the most highly price-maintained pharmaceutical products is Aspro. Ask almost anyone whether Aspro is worth the extra money paid for it. Of course it is not, but it is a most fiercely price-maintained article. Under this Clause we are proposing that Aspro could take a retailer to the Court, and our Amendment says that we would not wish the Court to be given that power unless it was satisfied that the price to be imposed by law is reasonable in relation to the value of the product.
    If we are to have this kind of minimum price control then there ought to be some study of the matter from the point of view of the consumer and of the public interest. I would go further and say that many of the inflated prices paid for
    1148
    branded articles, which we are asked to underpin by a legal sanction, are not levied for the purpose of public interest. They are not levied to cover research. They are levied far more to cover advertising.
    There was an interesting article in the British Medical Journal recently by Dr. William Sargant. He was warning of the dangers arising because manufacturers of drugs were flooding doctors with extensive advertising material and shoals of circulars urging the claims of drugs whose value have not been authoritatively established. Suicides have even been caused by the bad prescribing of these drugs, and there have been dangerous complications from their unwise prescription.
    That is done because doctors are subjected to high-powered advertising. Are we really going to say that the court should automatically give an injunction to enforce a price which is inflated far more by advertising factors than by considerations of fundamental research? We submit, in this Amendment, that the public interest should be safeguarded here, just as much as it needs to be protected in any other part of the Bill.
    10.15 p.m.
    I want to put another point to the Parliamentary Secretary. This is what worries me very much indeed. In one part of the Bill we shall refer to the Commission the problem of single-firm monopolies. That is to be the subject of future consideration elsewhere. Yet in this Clause we are giving singe-firm monopolies stronger powers of enforcement of their prices without there being any kind of safeguard to ensure that the public interest is thereby served. That is contrary to the whole tenor of the Bill.
    I will give the Committee an example of what is happening. Reference has been made to tyres. We are still waiting to know what is to happen about the problem of tyres sold in the replacement market. In its Report on tyres the Commission found that there were identical prices in the replacement market and that there were also certain collective practices of enforcement which were undesirable.
    The Report went very much further than that. It gave expression to a frontal condemnation of individual resale price

    1149
    maintenance in the tyre industry. It said:
    "It appears to us that in the circumstances of this industry… the only way to ensure a reasonable degree of price competition in sales to the public is to abolish the maintenance of retail prices, whether it be individual or collective."
    If the Clause is passed, how shall we be able to carry out that recommendation?
    I was alarmed by a sentence in the speech by the President on Second Reading, in which he told us emphatically:
    "… I do not propose to make Governmental decisions on matters which are now made justiciable."—[OFFICIAL, REPORT, 6th March. 1956; Vol. 549, c. 1949.]
    The right hon. Gentleman was, in fact, washing his hands of the recommendations in the Commission's Report on tyres. It said that individual resale maintenance in the case of tyres is wrong, contrary to the public interest and underpinning the killing of effective price competition in the industry.
    Mr. R. Harris: That may be true, but surely the hon. Lady will realise that, excluding the chairman, of the eight members of the Commission, four said exactly what she has said and the other four said the opposite.
    The Deputy-Chairman: I find it very difficult to follow the hon. Lady's argument. I cannot see that the merits or otherwise of price maintenance are arguable here. The question is what the powers of the court shall be.
    Mrs. Castle: With infinite respect, Sir Rhys, I am suggesting that without our Amendment it will be impossible for the court to refuse an injunction to a tyre manufacturer on the grounds that price maintenance in his case would be contrary to the public interest. We have had a very detailed Report on the industry which says that individual resale price maintenance in the tyre industry is contrary to the public interest. Our Amendment would give the court the power to refuse an injunction, because the Commission has given it the evidence on which to establish that an injunction would be contrary to the public interest. We move our Amendment in an effort to provide that flexibility. I urge the Parliamentary Secretary to read the Clause carefully. As it stands, he is making the new sanction automatic, in a
    1150
    sphere where there is a great deal of anxiety about the effects of the Clause.
    Mr. Walker-Smith: We have had a very interesting debate on these Amendments and have ranged fairly wide over the general merits of individual resale price maintenance. Naturally, Sir Rhys, I entirely concur with your view that we are on a relatively narrow point here. The Committee will appreciate that individual resale price maintenance as between a supplier and a dealer is something which can already be enforced in the ordinary way by legal proceedings in the courts.
    All that is being done by the Clause is to give a right, not now existing, for the supplier to, as it is sometimes called, sue down the line or, in the more technical language of the Bill, be able to enforce his right against any person not party to the sale who subsequently acquires the goods with notice of the condition as if he had been a party thereto.
    That is all that the Clause does. It merely adds one additional step or right to the enforcement of individual resale price maintenance which in principle exists already in the law as it stands. Indeed, as I indicated on Second Reading, all that is done here is to assimilate the general law to the law as it already exists where patents, copyright and registered designs are in existence. As the Committee will see from the Long Title of the Bill, all that it is concerned to do is
    "to make further provision for the individual enforcement of such conditions by legal proceedings… "
    In other words, the Bill does not give rise to a right: the right already exists. It merely improves it in this respect. What the Amendments are concerned with is whether that extended right should be limited by applying a public interest test.
    The hon. Member for Stechford (Mr. Roy Jenkins), who, on Second Reading, made some interesting reflections on the general principles of resale price maintenance, has gone into the merits of it to some extent again this evening. He condemns our approach on the grounds that it is a compromise approach. If that be so, I do not know that I am prepared to apologise for it, because an empirical approach—to some extent a compromise approach—is an abiding characteristic of the traditional British

    1151
    approach to this sort of question. I would prefer, however, rather than use the word "compromise," to say that we have made a general approach to the question of resale price maintenance—I quite accept that.
    We have taken the view that it is necessary to make a general approach, and we have made a general approach in respect both of collective enforcement and of individual enforcement. We have proscribed collective enforcement and we have somewhat reinforced the right of individual enforcement. After all the discussion and thinking that we have had about these matters, I am not prepared at all to abate my view that this general approach is the right approach in all the circumstances and that it is not practical or appropriate in these circumstances to seek to apply a case by case approach to specific cases of individual enforcement of resale price maintenance.
    In so far as we are concerned with the generality of the matter, the Committee will recall that the authoritative examination of individual resale price maintenance took place in the Lloyd Jacob Committee, which found in favour of individual resale price maintenance.
    Mr. Jay: The hon. and learned Gentleman will agree that the Lloyd Jacob Committee did not propose that it should be made legally enforceable.
    Mr. Walker-Smith: Following on what other hon. Members have dealt with, I am on the merits of the position. What the right hon. Gentleman says is true, and I am obliged to him, but the Lloyd Jacob Committee was not spelling out a solution in the whole field of restrictive trade practices, as we are seeking to do with the Bill. It did, however, approve the principle. The Monopolies Commission, in its Report on Collective Discrimination, did not consider individual enforcement of resale price maintenance because it was out with its terms of reference.
    There has been a good deal of play with the Report of the Monopolies Commission on the Supply and Export of Pneumatic Tyres, and I shall certainly not court your rebuke, Sir Rhys, by going into the question of that Report.
    Mrs. Castle: Why not?
    Mr. Walker-Smith: The hon. Lady asks me, "Why not?" It is because I respect the Ruling of the Chair.
    Mrs. Castle: The hon. and learned Gentleman is just evading the point.
    Mr. Walker-Smith: I will deal with the point in 30 seconds, if the hon. Lady likes. There is nothing at all to get cross about in this. It is all a matter of weighing up this difficult question and coming to the best judgment we can on the evidence available.
    So far as the Report on tyres is concerned, there are two points which derogate from its value as an expression of general principle. The first has already been made by my hon. Friend the Member for Heston and Isleworth (Mr. R. Harris). It was a majority recommendation by the narrowest of majorities, in any event. Secondly, the expression of opinion was specifically related to the particular and unusual circumstances of the tyre industry. And it is, of course, not appropriate to stand as a general view on individual resale price maintenance as such.
    That being our general approach, in this Amendment we are faced with the position of whether it is applicable, because I echo with respect what was said by the hon. Member for Orkney and Shetland (Mr. Grimond)
    —
    Mr. Roy Jenkins: May I put this to the hon. and learned Gentleman before he leaves the question of the Report on tyres? He says airily that the Report relates only to the tyre industry and cannot be applied in general. If he rejects the Amendment it will make it impossible for anything to be done to implement that Report. We are not asking him, on the basis of the Report on tyres, to come out in a blanket way against resale price maintenance. We are asking him to admit the possibility of there being exceptions from the general position. From that point of view the Report on tyres is of extreme importance and is completely relevant as the result of only one industry.
    Mr. Walker-Smith: As the hon. Gentleman points out, the Report on tyres, with a very appropriate sense of relevance, was concerned with the tyre industry. All I am asking the Committee to do is to refrain from drawing from the Report,

    1153
    which related to the specific and unusual circumstances of that industry, a general principle over the whole field of individual resale price maintenance.
    Mr. Jay: If our argument is that there may be some exceptions, is it not relevant as an example of one exception?
    Mr. Walker-Smith: But the value of spelling out an exception is subject to the point I was dealing with, whether there is a practical remedy or solution to this problem contained in these Amendments. I ask the Committee to say that there is not. What is proposed to be done is to say that individual cases of resale price maintenance will each be judged by the court whether or not they are in accordance with the public interest.
    The hon. Member for Stechford referred to systems of enforcement. As I see it. in these Amendments each case will have to be judged by the court as to whether or not it is in the public interest. It would not even be the Restrictive Practices Court, but either the Chancery courts would be asked to make a value cases, the county courts. The county courts would be asked to make a valued judgment on the public interest, the question of economics, and so on, without the assistance of criteria such as exist in Clause 16 for the detailed guidance of the Restrictive Practices Court.
    I think that, upon reflection, the Committee will realise that that would be placing an impossible burden on the county courts, and even upon the Chancery Division of the High Court, in trying to assess the public interest in relation to each and every one of these vastly diverse and varying small cases of individual resale price maintenance.
    10.30 p.m.
    Sir L. Ungoed-Thomas: This part of the Parliamentary Secretary's argument is being addressed, of course, only to the impracticable nature of the proposal, and we therefore approach it on the footing that the rest of the proposal is all right, because obviously we are dealing with the aspect that it is impracticable. The Parliamentary Secretary is suggesting that, even assuming—as we have to for the purposes of this part of the argument—there is something in the argument on public interest, nevertheless it should be
    1154
    enforced because the particular mechanism which he has provided is not the right mechanism to deal with it. That is the conclusion at which he arrives.
    We on this side of the Committee should be perfectly happy for him to take back the Clause and recast it so as to enable the Restrictive Practices Court to deal with all these applications. What we are concerned about at the moment is the particular Amendment rather than the particular forum which the Parliamentary Secretary has chosen for deciding those restrictive practices.
    Mr. Walker-Smith: I do not think the hon. and learned Gentleman has stated the principle quite correctly. If it were true to say that an individual resale price maintenance was generically wrong, then I do not say there would be any practical difficulty in dealing with that situation by legislation. What is impracticable, in my view, is to give effect to a case by case adjudication upon the public interest by the courts, whichever courts they may be. That is the point on impracticability. We have said that individual resale price maintenance normally is an appropriate thing. It exists in law at present, and we have given it this additional right of enforcement which is, as I think has been appreciated by the Committee, offset by the prohibition of collective enforcement.
    We believe that the right balance has been struck in the Bill as it stands, and that this Amendment would not add virtue to the Bill and would not be possible in practice.
    Mr. John Cronin: The Parliamentary Secretary made a very reasonable point when he said resale price maintenance was already enforceable between two parties. That is the law, and nobody could seriously object to it; it is a matter of contract. But I do not think anyone on this side of the Committee would agree to his suggestion that this Clause provides a very small extension of this enforcement of resale price maintenance.
    Usually, when there is an action in contract between two parties it is confinable only to those two parties. But, as the Parliamentary Secretary knows perfectly well, there is a long vertical line through which goods pass before they reach the final consumer; they may pass through the hand of perhaps six or even

    1155
    a dozen different manufacturers, suppliers and processes to the retailer. What Clause 20 will do, if left unamended, is enforce resale price maintenance all the way along the line, so that instead of having resale price maintenance enforced between two parties it will be enforced between six or eight, or ten or twelve parties, which will multiply the effect of it many, many times.
    The Parliamentary Secretary also said it is rather impracticable for each court to consider the public interest, and made the point that resale price maintenance had the approval of the Lloyd Jacob Committee. I think that both sides of the Committee agree that resale price maintenance is often desirable in a substantial number of cases; but both sides will also agree that there are cases where it is most undesirable.
    I make one possible exception to that, namely, the hon. Member for Heston and Isleworth (Mr. R. Harris), who defended resale price maintenance with such a passion that one sustained the impression that he thought the stop list was British industry's crowning contribution to world economy—a personal idiosyncrasy upon which perhaps the Committee will not dwell too much.
    The important thing about this Clause is that we are embarking on a revolutionary process for British industry, and nobody knows what will be the ultimate effect of this Bill. For that reason the Clause should be tied up very closely and carefully so that the courts know exactly where they stand. In discussing a previous Amendment, the Parliamentary Secretary said that an injunction is a discretionary procedure. That is perfectly true, and if we look at subsection (4) we see that it contains the words, "if it thinks fit". I submit that that discretion is not adequate but that the court should have more exact guidance. That is what the Amendment would provide to the court.
    The hon. Member for Orkney and Shetland (Mr. Grimond) raised what appeared to be a valid objection to the Amendment. He said that two courts would have to decide on matters of public interest if the Amendment were accepted. I would point out to the hon. Member that even without the Amendment no less than three courts will speak on matters of public interest because not only the
    1156
    Restrictive Practices Court but the Court of Appeal and the Law Lords of another place would all speak on that matter. So the point about additional courts being able to give opinions on the public interest should not seriously weigh in this question.
    Obviously there is no objection to resale price maintenance being enforced when it is in the public interest, but there are a large number of cases in which it would be very detrimental to the public interest. As the Clause stands, without amendment, the court would have no discretion at all and no guidance. There are cases in which resale price maintenance would deprive the public of low cost distribution. There will be occasions where some new form of sales service such as a self-service stores would enable goods to be sold much more cheaply to the public, but, if the traders concerned sold goods at low prices they would be immediately prevented from doing so by the court. That is something in which the public interest would be seriously infringed and the court would have no discretion and no guidance in dealing with that matter.
    There will be occasions when the introduction of competitive goods will be held up simply because manufacturers are prevented from selling them at competitive prices opposed to other manufacturers. There again the court would have no discretion and no guidance. There will be occasions when a particular method of trading would be especially favourable to the public interest—for example, in areas where there are few shops and customers have no access to a wide variety of goods. In that case postal trading would be of enormous value and goods could be sold much more cheaply. There again the court would have no discretion and no guidance but would be obliged to enforce the retail prices fixed by the manufacturers.
    I could give numerous examples, such as that of the village shop which has a large stock of goods which are deteriorating. What is to be done if those goods cannot be sold off cheaply? Are they to rot on the shelves? Obviously it would be to the public interest that they should be sold at lower prices. There are occasions when a valuable retail organisation might be in financial difficulties and, to obtain relief, might wish to sell a large part of the stock but be unable to do

    1157
    anything about it because the retailer is obliged to sell at the prices fixed by the manufacturer.
    These four Amendments are all valuable contribution to the drafting of the Bill, and I would suggest that the parliamentary secretary takes them into his
    serious consideration so that they can, to some extent, be incorporated into the Bill.
    Question put, That those words be there added:—
    The Committee divided: Ayes 163, Noes 206.

    Division No. 176.]

    AYES

    [10.40 p.m.

    Ainsley, J. W.

    Gordon Walker, Rt. Hon. P. C.

    Neal, Harold (Bolsover)

    Allaun, Frank (Salford, E.)

    Grey, C. F.

    Oliver, G. H.

    Allen, Arthur (Bosworth)

    Griffiths, David (Rother Valley)

    Oram, A. E.

    Allen, Scholefield (Crewe)

    Griffiths, Rt. Hon. James (Llanelly)

    Orbach, M.

    Awbery, S. S.

    Griffiths, William (Exchange)

    Oswald, T.

    Bacon, Miss Alice

    Grimond, J.

    Owen, W.J.

    Baird, J.

    Hall, Rt. Hn. Glenvil (Colne Valley)

    Paget, R. T.

    Bence, C. R. (Dunbartonshire, E.)

    Hannan, W.

    Paling, Rt. Hon. W. (Dearne Valley)

    Benson, C.

    Harrison, J. (Nottingham, N.)

    Paling, Will T. (Dewsbury)

    Beswick, F.

    Hayman, F. H.

    Parker, J.

    Blyton, W. R.

    Healey, Denis

    Pearson, A.

    Boardman, H.

    Henderson, Rt. Hn. A. (Rwly Regis)

    Peart, T. F.

    Bottomley, Rt. Hon. A. G.

    Hobson, C. R.

    Plummer, Sir Leslie

    Bowden, H. W. (Leicester, S.W.)

    Holmes, Horace

    Popplewell, E.

    Bowen, E. R. (Cardigan)

    Holt, A. F.

    Price, Philips (Gloucestershire, W.)

    Bowles, F. C.

    Houghton, Douglas

    Proctor, W. T.

    Boyd, T. C.

    Howell, Denis (All Saints)

    Randall, H. E.

    Braddock, Mrs. Elizabeth

    Hughes, Cledwyn (Anglesey)

    Roberts, Albert (Normanton)

    Brockway, A. F.

    Hughes, Emrys (S. Ayrshire)

    Roberts, Goronwy (Caernarvon)

    Broughton, Dr. A. D. D.

    Hughes, Hector (Aberdeen, N.)

    Ross, William

    Burke, W. A.

    Irving, S. (Dartford)

    Short, E. W.

    Burton, Miss F. E.

    Janner, B.

    Silverman, Julius (Aston)

    Butler, Herbert (Hackney, C.)

    Jay, Rt. Hon. D. P. T.

    Simmons, C. J. (Brierley Hill)

    Butler, Mrs. Joyce (Wood Green)

    Jeger, George (Goole)

    Skeffington, A. M.

    Castle, Mrs. B. A.

    Jenkins, Roy (Stechford)

    Slater, J. (Sedgefield)

    Champion, A. J.

    Johnson, James (Rugby)

    Sorensen, R. W.

    Chapman, W. D.

    Jones, Rt. Hn. A. Creech (Wakefield)

    Stones, W. (Consett)

    Chetwynd, G. R.

    Jones, David (The Hartlepools)

    Sylvester, G. O.

    Coldrick, W.

    Jones, Jack (Rotherham)

    Taylor, Bernard (Mansfield)

    Collick, P. H. (Birkenhead)

    Jones, J. Idwal (Wrexham)

    Taylor, John (West Lothian)

    Collins, V. J. (Shoreditch & Finsbury)

    Jones, T. W. (Merioneth)

    Thomas, Iorwerth (Rhondda, W.)

    Corbet, Mrs. Freda

    King, Dr. H. M.

    Thomson, George (Dundee, E.)

    Craddock, George (Bradford, S.)

    Lawson, G. M.

    Thornton, E.

    Cronin, J. D.

    Ledger, R. J.

    Timmons, J.

    Cullen, Mrs. A.

    Lee, Frederick (Newton)

    Tomney, F.

    Dalton, Rt. Hon. H.

    LeeMiss Jennie (Cannock)

    Ungoed-Thomas, Sir Lynn

    Darling, George (Hillsborough)

    Logan, D. G.

    Usborne, H. C.

    Davies, Rt. Hon. Clement (Montgomery)

    Mabon, Dr. J. Dickson

    Wade, D. W.

    Davies, Harold (Leek)

    MacColl, J. E.

    Warbey, W. N.

    Deer, G.

    McGhee, H. G.

    Weitzman, D.

    Dodds, N. N.

    McGovern, J.

    West. D. G.

    Donnelly, D. L.

    McInnes, J.

    Wheeldon, W. E.

    Ede, Rt. Hon. J. C.

    McKay, John (Wallsend)

    White, Mrs. Eirene (E. Flint)

    Edwards, Robert (Bilston)

    McLeavy, Frank

    White, Henry (Derbyshire, N.E.)

    Edwards, W. J. (Stepney)

    MacMillan, M. K. (Western Isles)

    Willey, Frederick

    Evans, Albert (Islington, S.W.)

    Mallalieu, E. L. (Brigg)

    Williams, Rev. Llywelyn (Ab'tillery)

    Evans, Edward (Lowestoft)

    Mann, Mrs. Jean

    Williams, W. R. (Openshaw)

    Evans, Stanley (Wednesbury)

    Mason, Roy

    Willis, Eustace (Edinburgh, E.)

    Fernyhough, E.

    Mikardo, Ian

    Winterbottom, Richard

    Finch, H. J.

    Monslow, W.

    Woodburn, Rt. Hon. A.

    Fletcher, Eric

    Moody, A. S.

    Woof, R. E.

    Forman, J. C.

    Morris, Percy (Swansea, W.)

    Yates, V. (Ladywood)

    Fraser, Thomas (Hamilton)

    Moss, R.

    Zilliacus, K.

    Gibson, C W.

    Moyle, A.

    Gooch, E. G.

    Mulley, F. W.

    TELLERS FOR THE AYES:

    Mr. Price and Mr. Wilkins.

    NOES

    Agnew, Cmdr. P. G.

    Baxter, Sir Beverley

    Brooman-White, R. C.

    Aitken, W. T.

    Bell, Philip (Bolton, E.)

    Browne, J. Nixon (Craigton)

    Alport, C. J. M.

    Bidgood, J. C.

    Bryan, P.

    Amery, Julian (Preston, N.)

    Biggs-Davison, J. A.

    Carr, Robert

    Armstrong, C. W.

    Birch, Rt. Hon. Nigel

    Cary, Sir Robert

    Ashton, H.

    Bishop, F. P.

    Channon H.

    Baldock, Lt.-Cmdr. J. M.

    Body, R. F.

    Clarke, Brig. Terence (Portsmth, W.)

    Baldwin, A. E.

    Bossom, Sir A. C.

    Cole, Norman

    Balniel, Lord

    Boyd-Carpenter, Rt. Hon. J. A.

    Cordeaux, Lt.-Col. J. K.

    Barber, Anthony

    Boyle, Sir Edward

    Corfield, Capt. F. V.

    Barlow, Sir John

    Braine, B. R.

    Crouch, R. F.

    Barter, John

    Braithwaite, Sir Albert (Harrow, W.)

    Currie, G. B. H.

    Dance, J. C. G.

    Johnson, Howard (Kemptown)

    Pickthorn, K. W. M.

    D'Avigdor-Coldsmid, Sir Henry

    Joseph, Sir Keith

    Pilkington, Capt. R. A.

    Deedes, W. F.

    Joynson-Hicks, Hon. Sir Lancelot

    Pitt, Miss E. M.

    Digby, Simon Wingfield

    Keegan, D.

    Pott, H. P.

    Donaldson, Comdr. C. E. McA.

    Kerby, Capt. H. B.

    Price, Henry (Lewisham, W.)

    Doughty, C. J. A.

    Kerr, H. W.

    Profumo, J. D.

    Drayson, C. B,

    Kershaw, J. A.

    Raikes, Sir Victor

    du Cann, E. D. L.

    Lambert, Hon. G.

    Redmayne, M.

    Eden, J. B. (Bournemouth, West)

    Lambton, Viscount

    Remnant, Hon. P.

    Elliot, Rt. Hon. W. E.

    Lancaster, Col. C. G.

    Renton, D. L. M.

    Emmet, Hon. Mrs. Evelyn

    Langford-Holt, J.A.

    Rippon, A. G. F.

    Errington, Sir Erie

    Leather, E. H. C.

    Robinson, Sir Roland (Blackpool, S.)

    Farey-Jones, F. W.

    Leavey, J. A.

    Roper, Sir Harold

    Fell, A.

    Leburn, W. G.

    Ropner, Col. Sir Leonard

    Finlay, Graeme

    Legge-Bourke, Maj. E. A. H.

    Schofield, Lt.-Col. W.

    Fisher, Nigel

    Legh, Hon. Peter (Petersfield)

    Scott-Miller, Cmdr. R.

    Freeth, D. K.

    Lindsay, Martin (Solihull)

    Sharpies, R. C.

    Galbraith, Hon. T. G. D.

    Linstead, Sir H. N.

    Shepherd, William

    Garner-Evans, E. H.

    Lloyd, Maj. Sir Guy (Renfrew, E.)

    Simon, J. E. S. (Middlesbrough, W.)

    George, J. C. (Pollok)

    Lloyd-George, Maj. Rt. Hon. G.

    Smithers, Peter (Winchester)

    Gibson-Watt, D.

    Longden, Gilbert

    Speir, R. M,

    Glover, D.

    Lucas-Tooth, Sir Hugh

    Stanley, Capt. Hon. Richard

    Gower, H.R.

    Macdonald, Sir Peter

    Stevens, Geoffrey

    Graham, Sir Fergus

    Mackeson, Brig. Sir Harry

    Steward, Harold (Stockport, S.)

    Grant-Ferris, Wg Cdr. R. (Nantwich)

    McKibbin, A. J.

    Steward, Sir William (Woolwich, W.)

    Green, A.

    Mackie, J. H. (Galloway)

    Stoddart-Scott, Col. M.

    Gresham Cooke, R.

    McLaughlin, Mrs. P.

    Studholme, H. G.

    Grimston, Sir Robert (Westbury)

    Maclay, Rt. Hon. John

    Summers, G. S. (Aylesbury)

    Grosvenor, Lt.-Col. R. G.

    Maclean, Fitzroy (Lancaster)

    Taylor, Sir Charles (Eastbourne)

    Hall, John (Wycombe)

    McLean, Neil (Inverness)

    Taylor, William (Bradford, N.)

    Harris, Frederic (Croydon, N.W.)

    Macleod, Rt. Hn. Iain (Enfield, W.)

    Teeling, W.

    Harris, Reader (Heston)

    MacLeod, John (Ross & Cromarty)

    Thomas, Leslie (Canterbury)

    Harrison, A. B. C. (Maldon)

    Maitland, Hon. Patrick (Lanark)

    Thomas, P. I. M. (Conway)

    Harrison, Col. J. H. (Eye)

    Manningham-Buller, Rt. Hn. Sir R.

    Thorneycroft, Rt. Hon. P.

    Harvey, Air care. A. V. (Macclesfd)

    Markham, Major Sir Frank

    Thornton-Kemsley, C. N.

    Harvey, John (Walthamstow, E.)

    Marlowe, A. A. H.

    Tiley, A. (Bradford, W.)

    Head, Rt. Hon. A. H.

    Marples, A. E.

    Tilney, John (Wavertree)

    Heald, Rt. Hon. Sir Lionel

    Maydon, Lt.-Comdr, S. L. C.

    Touche, Sir Gordon

    Heath, Rt. Hon. E. R. C.

    Medlicott, Sir Frank

    Turner, H. F. L.

    Hill, Rt. Hon. Charles (Luton)

    Milligan, Rt. Hon. W. R.

    Tweedsmuir, Lady

    Hill, Mrs. E. (Wythenshawe)

    Molson, A. H. E.

    Vane, W. M. F.

    Hirst, Geoffrey

    Morrison, John (Salisbury)

    Vickers, Miss J. H.

    Holland-Martin, C. J.

    Mott-Radclyffe, C. E.

    Vosper, D. F.

    Hornsby-Smith, Miss M. P.

    Nabarro, G. D. N.

    Wakefield, Edward (Derbyshire, W.)

    Horobin, Sir Ian

    Nairn, D. L. S.

    Walker-Smith, D. C.

    Howard, Hon. Greville (St. Ives)

    Neave, Alrey

    Wall, Major Patrick

    Howard, John (Test)

    Nicholls, Harmar

    Ward, Dame Irene (Tynemouth)

    Hudson, Sir Austin (Lewisham, N.)

    Nicolson, N. (B'n'm'th, E. A Chr'ch)

    Waterhouse, Capt. Rt. Hon. C.

    Hudson, W. R. A. (Hull, N.)

    Noble, Comdr. A. H. P.

    Whitelaw, W. S. I. (Penrith & Border)

    Hughes Hallett, Vice-Admiral J.

    Oakshott, H. O.

    Williams, Paul (Sunderland, S.)

    Hughes-Young, M. H. C.

    O'Neill, Hn. Phelim (Co. Antrim, N.)

    Wills, G. (Bridgwater)

    Hurd, A. R.

    Orr, Capt. L. P. S.

    Wilson, Geoffrey (Truro)

    Hylton-Foster, Sir H. B. H.

    Orr-Ewing, Charles Ian (Hendon, N.)

    Woollam, John Victor

    Irvine, Bryant Godman (Rye)

    Osborne, C.

    Yates, William (The Wrekin)

    Jenkins, Robert (Dulwich)

    Page, R. G.

    Jennings, J. C. (Burton)

    Pannell, N. A. (Kirkdale)

    TELLERS FOR THE NOES:

    Johnson, Dr. Donald (Carlisle)

    Partridge, E.

    Mr. R. Thompson aod Mr. Godber.

    Johnson, Eric (Blackley)

    Peyton, J. W. W.

    Mr. E. Fletcher: I beg to move, in page 17, line 43, at the end, to add:
    (5)The Board of Trade may after receipt of a recommendation to that effect of the Monopolies Commission by order direct that this section shall cease to have effect (subject to such saving or transitional provisions as may be contained in the order) in relation to any supplier of goods of a class prescribed by the Board of Trade as being goods in respect of which the individual enforcement by legal proceedings of conditions as to resale prices is contrary to the public interest.
    (6) The powers of the Board of Trade to make orders under this section shall be exercised by Statutory Instrument; and any statutory instrument containing such rules shall be laid before Parliament after having been made.
    In view of the debate which has just concluded, I think that discussion on this
    1160
    Amendment can be quite brief. In a sense it follows on the debate we have just had. The point is to give the President of the Board of Trade another opportunity of meeting the case which we put on the last Amendment. I do not want to reiterate the arguments which were put by some of my hon. Friends on earlier Amendments.
    Our case is, as in fact the Parliamentary Secretary practically conceded, that there will be some cases in which individual resale price maintenance is a bad thing and contrary to the public interest. In fact, there are some near monopolies where individual resale price maintenance is indistinguishable from collective resale price maintenance. Reference was

    1161
    made to the Report of the Monopolies Commission on the Supply and Export of Pneumatic Tyres which came to that conclusion, though it is true it was by a majority. That is an illustration of one commodity in respect of which, as is now shown, at any rate by a majority of the Commission, individual resale price maintenance ought to be stopped, ought to be condemned, because it is equivalent to collective resale price maintenance.
    The Parliamentary Secretary said that resale price maintenance can be enforced today as between the manufacturer and the wholesaler, but Clause 20 carries the matter a stage further. It gives an additional power to stop by legal methods, through the courts, a practice which is contrary to the public interest. The Parliamentary Secretary said that one reason why he could not accept the earlier Amendment was that it would not be fair to give the court responsibility for having to judge, by a case-by-case method, whether any particular commodity came within the class of commodities where individual price maintenance amounted to collective resale price maintenance.
    This Amendment would deprive the President of the Board of Trade of that answer which was given on an earlier Amendment. The Amendment would give the Board of Trade the power, on a recommendation of the Monopolies Commission, by order to say that as regards a particular article or commodity this Clause should no longer operate. The Board of Trade would have full discretion whether or not to make an order. There is nothing obligatory about it.
    This is a permissive power which would be available to the Board of Trade, on the recommendation of the Commission. The Board may want to use the power in connection with tyres or it may not. It may take the view—I hope it does not—that the minority view is preferable to that of the majority; but there are other commodities which would, in due course, be investigated by the Commission in connection with which there might be a unanimous result or a decisive majority.
    1162
    All we ask is that the Board of Trade should seize the opportunity which we are presenting to it, by the Amendment—not of putting an invidious task upon the court but of having this power where, after Investigation by the Monopolies Commission, it has been established that individual resale price maintenance works against the common interest and therefore ought to be stopped.
    I very much hope that the Amendment will be accepted. The Report about tyres was published after the right hon. Gentleman had announced his general plan of the form of the Bill. Many people have recognised that the Report on that industry posed a dilemma for the President of the Board of Trade. It is obviously most unsatisfactory, in view of that majority Report condemning individual resale price maintenance, deliberately to flout the verdict of the Commission and to give to manufacturers in that industry an additional power to enforce their system. Here is an opportunity which I hope that the right hon. Gentleman will accept.
    Mr. P. Thorneycroft: As the hon. Member for Islington, East (Mr. E. Fletcher) said, this Amendment is distinct from the Amendments moved earlier, but it follows logically after them. The proposal here is to erect some new arrangement whereby the right of individual enforcement should be challenged. At an earlier stage I was pressed from some quarters to provide some machinery whereby the making unlawful of collective enforcement could be challenged in a particular case, and I rejected it and pointed out that once we did that, every case would be brought forward, and it would, in effect, bring the whole principle of resale price maintenance out of Part II of the Bill and into Part I.
    To some extent the same arguments apply in the case of individual enforcement. We have said, in the Bill, as a matter of policy, that in place of the old collective enforcement we shall give this new legal right of enforcement in the courts to individual manufacturers. In fact, however, where there is a monopoly seeking individually to enforce prices—a monopoly in the technical sense—where more than one-third of the goods are contained within the compass of the

    1163
    arrangement the matter is referable to the Monopolies Commission under existing law, and that is not affected by the Bill. So the existing law goes some way towards meeting—
    Mr. E. Fletcher: But if the Monopolies Commission reports that individual price maintenance as regards a particular commodity should be stopped, what are the Government going to do about it? How can they give effect to it unless they have power, as suggested in this Amendment, to say that Clause 20 shall cease to apply to that commodity?
    Mr. Thorneycroft: I understand that they could do so, although I am not saying that they would. I am not prejudging the issue. As I understand the law, and it is my purpose solely to inform the Committee how the Bill stands at this moment, the Monopolies and Restrictive Practices (Inquiry and Control) Act, 1948, remains in existence, and if more than one-third of the goods were covered by a monopoly, which was employing individual price enforcement, it would be subject to investigation and could be made—I am not saying that it would be made—the subject of an order to the courts.
    Sir L. Ungoed-Thomas: Then surely the President is going to accept this Amendment?
    Mr. Thorneycroft: It is not necessary to accept the Amendment.
    But the Amendment would go further, and would apply to any case of individual enforcement. That I am not prepared to accept. The monopolies legislation as it stands is satisfactory from this point of view. Where one gets a large and powerful group, or single corporation, controlling more than one-third of the trade, the matter is examinable by the Commission.
    Mr. Fletcher: That cannot be so. It is true that the matter is examined under the 1948 Act, but that is being modified by this Bill, which is going to supersede the Act of 1948. It will supersede it in a great many respects.
    I think that the right hon. Gentleman is mistaken if he thinks that he will have power, after the Bill is passed, to exclude
    1164
    the operation of the new Clause merely because there is a recommendation from the Monopolies Commission. There cannot possibly be anything in the Monopolies and Restrictive Practices Act, 1948, which gives the President power to exclude a particular commodity from the effect of what will be Section 20 of a 1956 Act.
    11.0 p.m.
    Mr. Thorneycroft: I am advised, and I believe, that the provisions of the Monopolies and Restrictive Practices Act, 1948, remain intact even after the passing of this Bill. Naturally there will be plenty of opportunity between now and Report to check that point. Where particular goods are covered as to one-third, that matter would be referable, and that is a perfectly proper provision. I am not saying that it would necessarily be used in a particular case or that it would be widely used. I am not making any declaration of policy. I am merely saying that the provision is there and that I think it should remain there. I am declaring the position, which I think should go a substantial way towards meeting the point made by the Opposition.
    Mr. Wade: May I press this point a little further? It would obviously be anomalous if this procedure gave added power to concerns that had been condemned by the Monopolies Commission. This seems to be a matter of policy and not just one of interpretation. I am anxious to know what safeguards the President has in mind to employ to ensure that this new procedure does not give added power to monopolies or semi-monopolies. Do the Government intend to use the procedure of the Monopolies Commission to overcome the difficulty created by the Clause?
    Mr. Beswick: The President of the Board of Trade has assured us with some force that powers to refer to the Monopolies Commission remain. But suppose the right hon. Gentleman refers an industry to the Commission because it covers more than one-third of the goods and is known to be enforcing a price, and the Commission finds that it has been established that this near-monopoly is indeed enforcing the price individually, as provided in law. What happens then?

    1165
    The Commission makes a recommendation to the President, but what can the right hon. Gentleman do, when he has this provision in the Bill?
    Mr. Thomeycroft: It is not a question of fact—the fact would probably be undisputed in a particular case—it would be a question of the public interest. Hon. Members have referred to the Report on the tyre industry, but that was a very narrowly divided Report. I am very far from saying that it does not give any clear indication on which one should necessarily come to a decision. I am not deciding the matter now. All that I am saying is that where there is a monopoly, where more than one-third of the goods are covered, it can be referred to the Monopolies Commission, and if the responsible authority so decide—the Board of Trade in the case of tyres, the Ministry of Supply in some other cases—an order can be made. I am satisfied that that
    is what the law should be and in fact is at present.
    Sir L. Plummer: Has the superior authority ever issued an order?
    Mr. Thorneycroft: On resale price maintenance?
    Sir L. Plummer: On practices against the public interest.
    Mr. Thomeycroft: There have been twelve Reports and an order has been made in respect only of dental goods, which were the subject of the first Report. In all other cases undertakings have been given by the industry, sometimes after discussion with the responsible authority, either to drop the practices or to pursue them in a different way.
    Question put, That those words be there added:—
    The Committee divided: Ayes 123, Noes 172.

    Division No. 177.]

    AYES

    [11.5 p.m.

    Ainsley, J. W.

    Gibson, C. w.

    Oram, A. E.

    Allaun, Frank (Salford, E.)

    Gordon Walker, Rt. Hon. P. C.

    Owen, W. J.

    Allen, Arthur (Bosworth)

    Grey, C. F.

    Paget, R. T.

    Awbery, S. S.

    Griffiths, David (Rother Valley)

    Paling, Rt. Hon. W. (Dearne Valley)

    Baird, J.

    Griffiths, William (Exchange)

    Paling, Will T. (Dewsbury)

    Beswick, F.

    Grimond, J.

    Parker, J.

    Blyton, W. R.

    Hall, Rt. Hn. Glenvil (Colne Valley)

    Pearson, A.

    Boardman, H.

    Hannan, W.

    Plummer, Sir Leslie

    Bottomley, Rt. Hon. A. C

    Harrison, J. (Nottingham, N.)

    Popplewell, E.

    Bowden, H. W. (Leicester, S.W.)

    Hayman, F. H.

    Price, J. T. (Westhoughton)

    Bowen, E. R. (Cardigan)

    Healey, Denis

    Price, Philips (Gloucestershire, W.)

    Boyd, T. C.

    Henderson, Rt. Hn. A. (Rwly Regis)

    Prootor, W. T.

    Braddock, Mrs. Elizabeth

    Houghton, Douglas

    Randall, H. E.

    Brockway, A. F.

    Howell, Denis (All Saints)

    Roberts, Goronwy (Caernarvon)

    Broughton, Dr. A. D. D.

    Hughes, Cledwyn (Anglesey)

    Ross, William

    Brown, Rt. Hon. George (Belper)

    Hughes, Emrys (S. Ayrshire)

    Short, E. W.

    Burke, W. A.

    Hughes, Hector (Aberdeen, N.)

    Silverman, Julius (Aston)

    Butler, Herbert (Hackney, C.)

    Irving, S.(Dartford)

    Simmons, C. J. (Brierley Hill)

    Castle, Mrs. B. A.

    Janner, B.

    Skefffington, A. M.

    Champion, A. J.

    Jay, Rt. Hon. D. P. T.

    Slater, J. (Sedgefield)

    Chetwynd, C. R.

    Jeger, George (Goo'e)

    Sorensen, R. W.

    Coldrick, W.

    Jenkins, Roy (Stechford)

    Stones, W. (Consett)

    Collick, P. H. (Birkenhead)

    Johnson, James (Rugby)

    Sylvester, G. O.

    Collins, V. J.(Shoreditch & Finsbury)

    Jones, David (The Hartlepools)

    Thomas, Iorwerth (Rhondda, W.)

    Corbet, Mrs. Freda

    Jones, Jack (Rotherham)

    Thornton, E.

    Craddock, George (Bradford, S.)

    Jones, J. Idwal (Wrexham)

    Ungoed-Thomas, Sir Lynn

    Cronin, J. D.

    Jones, T. W. (Merioneth)

    Usborne, H. C.

    Cullen, Mrs. A.

    King, Dr. H. M.

    Wade, D. W.

    Dalton, Rt. Hon. H.

    Lawson, G. M.

    West, D. C.

    Darling, George (Hillsborough)

    Lee, Frederick (Newton)

    Wheeldon, W. E.

    Davies, Harold (Leek)

    Logan, D. G.

    White, Mrs. Eirene (E. Flint)

    Deer, G.

    Mabon, Dr. J. Dickson

    White, Henry (Derbyshire, N.E.)

    Dodds, N. N.

    MacColl, J. E.

    Willey, Frederick

    Donnelly, D. L.

    McGhee, H. G.

    Williams, Rev. Llywelyn (Ab'tilery)

    Ede, Rt. Hon. J. C.

    McInnes, J.

    Williams, W. R. (Openshaw)

    Edwards, Robert (Bilston)

    Mallalieu, E. L. (Brigg)

    Winterbottom, Richard

    Edwards, W. J. (Stepney)

    Monslow, W.

    Woof, R. E.

    Evans, Stanley (Wednesbury)

    Moody, A. S.

    Yates, V. (Ladywood)

    Fernyhough, E.

    Morris, Percy (Swansea, W.)

    Zilliacus, K.

    Fletcher, Eric

    Moss, R.

    Forman, J. C.

    Moyle, A.

    TELLERS FOR THE AYES:

    Fraser, Thomas (Hamilton)

    Mulley, F. W.

    Mr. Holmes and Mr. Wilkins.

    NOES

    Agnew, Cmdr. P. G.

    Harris, Reader (Heston)

    Nicolson, N. (B'n'm'th, E. & Chr'ch)

    Aitken, W. T.

    Harrison, A. B. C. (Maldon)

    Noble, Comdr. A. H. P.

    Alport, C. J. M.

    Harvey, Air Cdre. A. V. (Macclesfd)

    Oakshott, H. D.

    Amery, Julian (Preston, N.)

    Harvey, John (Walthamstow, E.)

    O'Neill, Hn. Phelim (Co. Antrim,

    Armstrong, C. W.

    Heald, Rt. Hon. Sir Lionel

    Orr-Ewing, Charles Ian (Hendon, N.)

    Ashton, H.

    Heath, Rt. Hon. E. R. G.

    Page, R. G.

    Baldock, Lt.-Cmdr. J. M.

    Hill, Mrs. E. (Wythenshawe)

    Partridge, E.

    Baldwin, A. E.

    Hirst, Geoffrey

    Peyton, J. W. W.

    Balniel, Lord

    Holland-Martin, C. J.

    Pickthorn, K. W. M.

    Barber, Anthony

    Hornsby-Smith, Miss M. P.

    Pilkington, Capt. R. A.

    Barlow, Sir John

    Horobin, Sir Ian

    Pitt, Miss E. M.

    Barter, John

    Howard, John (Test)

    Pott, H. P.

    Baxter, Sir Beverley

    Hudson, Sir Austin (Lewisham, N.)

    Price, Henry (Lewisham, W.)

    Bell, Philip (Bolton, E.)

    Hudson, W. R. A. (Hull, N.)

    Profumo, J. D.

    Biggs-Davison, J, A.

    Hughes Hallett, Vice-Admiral J.

    Raikes, Sir Victor

    Birch, Rt. Hon. Nigel

    Hughes-Young, M. H. C.

    Redmayne, M.

    Bishop, F. P.

    Hylton-Foster, Sir H. B. H.

    Remnant, Hon. P.

    Body, R. F.

    Irvine, Bryant Godman (Rye)

    Robinson, Sir Roland (Blackpool,

    Bossom, Sir A. C.

    Jenkins, Robert (Dulwich)

    Ropner, Col. Sir Leonard

    Boyd-Carpenter, Rt. Hon. J. A.

    Jennings, J. C. (Burton)

    Schofield, Lt.-Col.W.

    Boyle, Sir Edward

    Johnson, Dr. Donald (Carlisle)

    Scott-Miller, Cmdr. R.

    Braine, B. R.

    Johnson, Eric (Blackley)

    Sharpies, R. C.

    Braithwaite, Sir Albert (Harrow, W.)

    Joseph, Sir Keith

    Shepherd, William

    Carr, Robert

    Joynson-Hioks, Hon. Sir Lancelot

    Simon, J. E. S. (Middlesbrough,

    Cary, Sir Robert

    Keegan, D.

    Smithers, Peter (Winchester)

    Channon, H.

    Kerby, Capt. H. B.

    Speir, R. M.

    Clarke, Brig. Terence (Portemth, W.)

    Kerr, H. W.

    Stevens, Geoffrey

    Cole, Norman

    Kershaw, J. A.

    Steward, Harold (Stockport, S.)

    Cordeaux, Lt.-Col. J. K.

    Lambert, Hon. G.

    Steward, Sir William (Woolwich, W.)

    Corfield, Capt. F. V.

    Lambton, Viscount

    Stoddart-Scott, Col. M.

    Crouch, R. F.

    Langford-Holt, J. A.

    Studholme, H. G.

    Currie, G. B. H.

    Leather, E. H. C.

    Summers, G. S. (Aylesbury)

    Dance, J. C. G.

    Leavey, J. A.

    Teeling, W.

    D'Avigdor-Goldsmid, Sir Henry

    Legge-Bourke, Maj. E. A. H.

    Thomas, Leslie (Canterbury)

    Deeds, W. F.

    Legh, Hon. Peter (Petersfield)

    Thomas, P. J. M. (Conway)

    Digby, SimonWingfield

    Lindsay, Martin (Solihull)

    Thompson, Lt.-Cdr. R. (Croydon, S.)

    Drayson, G. B.

    Linstead, Sir H. N.

    Thorneycroft, Rt. Hon. P.

    du Cann, E. D. L.

    Longden, Gilbert

    Thornton-Kemsley, C. N.

    Eden, J. B. (Bournemouth, West)

    Lucas-Tooth, Sir Hugh

    Tiley, A. (Bradford, W.)

    Errington, Sir Eric

    Macdonald, Sir Peter

    Tilney, John (Wavertree)

    Farey-Jones, F. W.

    Mackeson, Brig. S.r Harry

    Touche, Sir Gordon

    Fell, A.

    McKibbin, A. J.

    Turner, H. F. L.

    Finlay, Graeme

    Mackle, J. H. (Galloway)

    Vickers, Miss J. H.

    Fisher, Nigel

    McLaughlin, Mr. P.

    Vosper, D. F.

    Freeth, D. K.

    Maclay, Rt. Hon. John

    Wakefield, Edward (Derbyshire, W.)

    Galbraith, Hon. T. G. D.

    Maclean, Fitzroy (Lancaster)

    Walker-Smith, D. C.

    Garner-Evans, E. H.

    Macleod, Rt. Hn. Iain (Enfield, W.)

    Wall, Major Patrick

    George, J. C. (Pollok)

    Manningham-Buller, R. Hn. Sir R.

    Ward, Dame Irene (Tynemouth)

    Gibson-Watt, D.

    Markham, Major Sir Frank

    Waterhouse, Capt. Rt. Hon. C.

    Glover, D.

    Marlowe, A. A. H.

    Whitelaw, W. S. I. (Penrith & Border)

    Godber, J. B.

    Maydon, Lt.-Comdr. S. L. C

    Williams, Paul (Sunderland, S.)

    Gower, H. R.

    Medlicott, Sir Frank

    Wills, G. (Bridgwater)

    Graham, Sir Fergus

    Milligan, Rt. Hon. W. R.

    Wilson, Geoffrey (Truro)

    Grant-Ferris, Wg Cdr. R. (Nantwich)

    Molson, A. H. E.

    Yates, William (The Wrekin)

    Green, A.

    Morrison, John (Salisbury)

    Gresham Cooke, R.

    Nabarro, G. D. N.

    TELLERS FOR THE NOES:

    Grosvenor, Lt.-Col. R- C.

    Nairn, D. L. S.

    Colonel J. H. Harrison and

    Hall, John (Wycombe)

    Neave, Airey

    Mr. Bryan.

    Harris, Frederic (Croydon, N. W.)

    Nicholls, Harmar

    Motion made, and Question proposed, That the Clause stand part of the Bill.
    Sir L. Ungoed-Thomas: I beg to move, That the Chairman do report Progress and ask leave to sit again.
    We have had a debate lasting for several hours upon Clause 20, and although we have also a considerable amount of work still to do, the Opposition has done everything it possibly could have done during the whole of the proceedings so far to expedite the passage of the Bill. Our approach, if I may use the term, has been a businesslike approach. We have wanted to have the
    1168
    various Clauses and Amendments thoroughly debated but, at the same time, debated in a manner which was economical of time.
    No time, I am sure the President of the Board of Trade will agree, has been wasted. There has been no Closure during our discussions; no filibustering, and scarcely a case of an hon. Member being ruled out of order. As an example of what we have tried to do, I would remind the Committee that in the earlier part of today, we took matters at a speed which, perhaps, was not even warrantable in order to get through this Bill as expeditiously as we could.

    1169
    11.15 p.m.
    It is an important and a complex Bill. It affects the whole economy of the country, and it merits full consideration from all parts of the House. We have had speeches on the Bill, not just from the Opposition, but from Government back benchers, and we have had speeches from them—I do not complain of this—f considerable length. On Clause 19, for instance, the debate on the Motion, That the Clause stand part of the Bill, took a considerable time. Back bencher after back bencher on the Government side of the Committee spoke upon it, although their speeches were not addressed to particular Amendments designed to improve the Bill. Again, I am not complaining. All I am saying is that this is a Bill which deserves and requires the attention of all parts of the Committee, and upon which Members in all parts of the Committee have spoken.
    This is not, and never has been at any stage, anything like the case where one part of the House is simply trying to press its case at inordinate length to bring pressure to bear on the Government. I am sure that the Presideot recognises that at once. In a Bill of this complexity and importance, it is a matter in which it is not possible to go on for hour after hour and bring to bear the consideration which the Bill deserves and requires.
    At this hour, after having concentrated on the Bill, as the President, the Parliamentary Secretary and all of us have done, hour after hour, it just is not possible to go on discussing these matters at a late hour and give them the kind of reasonable approach and the careful consideration which they require. No businessman would conduct his business in the way that the business of the Bill would be conducted if we were to go on into the early hours of the morning. Therefore, my proposal is that we should now adjourn, and that the Government should find the time to deal with this, their own legislation, in a way which is worthy of the subject and its importance.
    Mr. P. Thomeycroft: I entirely endorse much of what the hon. and learned Gentleman has said. There is no question of any kind of obstruction from any quarter of the Committee. Hon. and right hon. Gentlemen opposite have co-operated fully. They have debated force
    1170
    fully and fairly but have co-operated fully in dealing with this large, complicated and important matter.
    The fact remains, however, that we have spent seven days on the Bill and we are now at Clause 20, about to discuss the Motion, That the Clause stand part of the Bill. We have a number of Clauses still ahead of us. My belief is that if we can continue to show the co-operation which we have been able to show on the previous Clauses, we can make progress and finish the Bill.
    Mr. Beswick: When?
    Mr. Thorneycroft: We can finish it tonight.
    We have had seven days' full debate on the Floor of the House. There can be no question of full opportunity not having been given. I emphasise that there is no suggestion on my part about hon. Members obstructing the debate. At the same time, I ask for co-operation in making progress with the Bill.
    Sir L. Ungoed-Thomas: That is a most disappointing and unsatisfactory reply. When the President himself says that we have not wasted time on the Bill, it is no answer at all to say that we have reached only Clause 20 in seven days. The measure of the treatment of the Bill is not the number of days we have spent on it or the number of Clauses we have considered. The measure of whether it has been properly dealt with is whether time has been wasted on it. The time spent on this Bill is the amount of time that has been required to be spent on it. It is impossible to give this Bill the consideration which it requires, if we are to go on until the early hours of the morning.
    The Government brought this Measure forward, and it is for them to find time to deal with it in a proper, businesslike way. They are not doing that. We should not be complaining about sitting until the early hours of the morning had we been obstructive about this Bill, because that would have represented the Government's retort to us, and it would have been perfectly fair Parliamentary fighting. But that is not the position. We have given every assistance to get this Bill through its Committee stage, and the President is aware of that.

    1171
    The Government are in this position because they have got themselves in such a mess with their programme, and they propose to carry on until the early hours of the morning. That is quite intolerable.
    Mr. Thorneycroft: I hope that the hon. and learned Gentleman will not become too indignant. After all, it is only twenty minutes past eleven. When I first came to the House, and I have not been here so very long, the House never rose before eleven o'clock. It is only twenty minutes past eleven, and I think that we could make some progress.
    Mr. E. Fletcher: I do not think that the Government have treated the Opposition with the respect to which they are entitled. As my hon. and learned Friend has said, and as the President of the Board of Trade has acknowledged, there has been no obstruction over this very complicated Bill. It has involved a great deal of careful and concentrated attention. I do not think it fair, either to the Opposition or to the President or the Parliamentary Secretary, that we should be asked to continue into the early hours of the morning.
    This is not a matter for the President of the Board of Trade to decide, It concerns the business of the Committee. Where is the Lord Privy Seal? We have the Chief Whip present. I do not know whether he intends to say anything, but I think that someone should send for the Leader of the House. I do not think the right hon. Gentleman is treating the President fairly. The President and the Parliamentary Secretary have had the whole burden of dealing with this Bill. We have not had the Attorney-General here at all, except for one fleeting visit. I do not know whether the right hon. and learned Gentleman understands the Bill or not, but he has not been present, and neither has the Solicitor-General nor the Lord Advocate.
    We have now reached the point where the Committee must decide whether we shall adjourn or deal with Part III of the Bill. I would remind hon. Members that the Economist and other papers have stated that Part III is the most important part of the Bill. I do not know whether that is the reason why the Government wish it to be discussed in the night hours, but this is a matter on which the Committee is entitled to guid
    1172
    ance from the Leader of the House. If it is considered necessary to continue with this Bill tonight, we are entitled to hear from the Leader of the House what is the programme of the Government. What is it which makes it necessary to sit all night considering a Measure of this kind? What other Measures are the Government proposing to bring forward which will take up a great deal of Parliamentary time? I know that there is a Finance Bill, but that is an attenuated affair, which will not take the usual ten or eleven days for the Committee stage.
    Mr. Ede: Do not be too sure about that.
    Mr. Fletcher: That Government have boasted that this is one of the most important Measures that they are asking the House of Commons to deal with this Session. The President of the Board of Trade has acknowledged that the Bill has been dealt with in a businesslike way, and that no time has been wasted. A great deal of time has been taken up by hon. Members on the Tory benches, and a great deal of time by hon. Members of the Liberal Party. I make no complaint about that. They have made several notable contributions. I would say that in proportion to their number we have had more speeches from the Liberal Party on this Bill than from other Parties.
    Mr. Grimond: Of a higher quality.
    Mr. Fletcher: I am not talking about quality at the moment, but about quantity.
    In relation to its number the Liberal Party has had more time than the Government or the Opposition. Among the Amendments we have to consider are further Liberal Amendments. They may be a strain on the President and on the Parliamentary Secretary. They will be less strain on us, because there are more of us. I ask the Government to think what they are asking the Liberal Party to do. With two or three hon. Members of the Liberal Party it will have to sustain the debate until two or three the morning.
    I was hoping that by this time the Leader of the House would have been here to give guidance on what the Committee ought to do. I hope that before the debate on this Motion concludes he will be here to answer some of the questions which have been raised.
    Mr. Mulley: I would like to add a protest to those of my hon. Friends. It seems to me unreasonable that the Committee should be given six days for Part I of the Bill, and should now be asked to take Parts II and III together in one sitting. It has been stated that Part I was dealt with well, and that no time was wasted. The debate has been divided between both sides of the Committee. The parts of the Bill which touch the public closest, that is the Amendments relating to Clause 20, and the Monopolies Commission, with which we have still to deal, are, if anything, of more public interest. They are not the sort of points which should be taken after midnight. If we cannot adjourn now I hope that the President will indicate the time at which he thinks it would be reasonable to conclude the debate.
    Mr. Hector Hughes: I would ask the President to reconsider his refusal to accept this Motion. I want him to approach the matter reasonably. My first ground is that the Bill is of great importance. It ought, therefore, to be considered by the Committee during the day, and not at midnight, or after midnight, as it will be if this debate continues. This is a Bill which will affect the trade and commerce of the country. The President, and other Ministers, have admitted that during our debates.
    Another point to which I would draw attention is the complexity of the Bill. The President has admitted that the Bill is not only of importance to trade and commerce, but that it is of the utmost complexity. Several times he and others have said that it would take lawyers to construe it. The courts will have great difficulty in construing the Bill, and dealing with it adequately. Those two points alone ought to be sufficient to induce the Minister to revise his refusal to adjourn now, so that the Bill may be given the consideration which it ought to get.
    But those are not the only points. The debate so far has shown that not only is the Bill important and full of complexity, but that difficult points on it arise not only on the Government side of the Committee, but on the Opposition side. The Minister has said the Opposition have treated this Bill very fairly, that we have not been obstructive. We have put forward constructive Amendments and
    1174
    discussed them in speeches of no great length, all of which were strictly relevant.
    Mr. P. Thorneycroft indicated assent.
    11.30 p.m.
    Mr. Hughes: I am glad to see the Minister nod. In the very words which fell from his lips earlier in this debate he made it clear that he did not think we were obstructive, but were, on the contrary, constructive and trying to make the Bill a better Bill.
    The Amendments which have been put forward by the Opposition have been of a character designed to make it a better Bill. Will the Bill be a better Bill if we go on discussing it after midnight, perhaps till one, two, three, four, five—[HON. MEMBERS: "Six, seven, eight, nine, ten, out."] This is not a laughing matter. On the contrary, it is a matter of great importance. One has only to see the light-hearted way in which the Government are treating the words I am uttering to see that they will not give the Bill the consideration it ought to get.
    The atmosphere of the Committee is rather lively at the moment. Who can tell how lively it will be in the small hours of the morning? If we go on until those hours, will we have more Ministers here? Will we have the Lord Advocate for Scotland here? Will we have the Attorney-General and the Solicitor-General? Where are they? They ought to be here now, so that the Bill can be given adequate consideration.
    I began by suggesting that the Committee should consider this not in a lively way, but in a calm way. I have put these relevant arguments before the President of the Board of Trade. I hope that he and his colleagues will consider them in the calm and judicial way in which I ventured to put them, and will change their minds and adjourn now in the interests of the country.
    Mr. P. Thomeycroft: I always listen to the persuasive speeches of the hon. and learned Gentleman with great attention, and he has perhaps more of my sympathy than he recognises in some of the appeals which he has addressed to the Committee. At the same time, it is now very nearly twenty-five minutes to midnight; it is not the small hours of the morning yet. As he said, the Committee is in a lively mood; let us seize the

    1175
    opportunity, while there is still life in us, to press on and at least to pass Clause 20.
    Mr. Ede: I hope that the right hon. Gentleman has not yet said the last word on this issue. I have sat for a good many hours through the debate on each of the seven days, and there is a very good precedent for rest on the seventh day. The right hon. Gentleman, in defiance of well-known precedent, proposes to make the seventh day the one with the hardest work. I have only once spoken in the debate, quite briefly, almost in response to an invitation from the right hon. and learned Member for Chertsey (Sir L. Heald), and what has struck me judging from what right hon. and learned and hon. and learned Gentlemen have said, is that it appears to be a measure that is without precedent in English law. We are making new law. When the hon. Member for Twickenham (Mr. Gresham Cooke) wants to cite a precedent he always tells us that in America they have a law like this. I am not impressed by a country which has regarded Senators McCarthy and McCarran as great legislators.
    We have now reached a stage in considering this Measure which to me, listening to it as an amateur in these matters, seems to be dealing with injunctions which may be imposed on small shopkeepers, quite small people who might find their livelihood placed in considerable jeopardy under the Clause to which we shall come back as soon as this Motion is disposed of one way or the other. We shall either come back to it late tonight, early tomorrow morning, or on the next day on which the Committee considers the Bill.
    It seems to me that one cannot expect the attention to be given to this Measure between now and 8 or 10 o'clock tomorrow morning that ought to be given to it. Hon. Members on both sides of the Committee who, obviously, have studied the Measure have been expressing their gravest doubts about its effects. The hon. Member for Heston and Isleworth (Mr. R. Harris) has made a number of speeches and is obviously well informed, whether one agrees with him or not. He has expressed the gravest doubts as to what may happen if the Measure becomes law in its present form.
    1176
    My hon. and learned Friends have been expressing similar views from the point of view of other people. As the son of a small country tradesman, I realise the kind of difficulties which may be put in the way of such tradesmen if the Clause becomes law in its present form, and they find themselves falling into the kind of traps which it is now sought to avoid setting for them if we possibly can avoid that.
    I hope that the right hon. Gentleman will feel that he has had a very good discussion today. He admits that there have been no irrelevant speeches and that they have been consistently short. The discussion has taken place on both sides of the Committee with the obvious intention of trying to make the Measure one which, while unprecedented, will achieve the kind of results we all wanted it to achieve when we started.
    I am quite sure that anyone, not claiming to be expert in the matter, who has listened to the debates must realise that on both sides of the Committee well-informed hon. Members are very concerned as to what may be the result of this Measure when it becomes law. I cannot think that the Committee will deal adequately with the remaining Clauses and the Schedules, and the problems which they present, if we attempt to finish the Bill between now and the time the House rises from its present sitting.
    Mr. Beswick: The President paid a very proper tribute to my hon. and learned Friend the Member for Aberdeen, North (Mr. Hector Hughes) and I am sure we all agreed with what the right hon. Gentleman said. It was suggested that my hon. and learned Friend the Member for Gloucester (Mr. Turner-Samuels) might reinforce what my hon. and learned Friend said.
    In view of the circumstances, I think the President would do well to clarify the point he made about Clause 20 that he had an open mind on some of those matters, even though on the Amendments to the Clause he was not very forthcoming. If he could say a little more about what he had in mind on Clause 20, I am sure that the Committee would greatly appreciate it.
    There comes a time in the affairs of all Ministers in charge of a Bill when they realise that the progress to be made

    1177
    will be in inverse proportion to the energy expended. We seem to have gone beyond that point this evening. I hope, therefore, that the President will be in a position to give us a little more information and to clarify the point about Clause 20.
    Mr. Jay: We should like to be clear about the offer that the President made in his last remarks. I hope he is trying to be reasonable, if only for his own sake, because I do not suppose that he himself wishes to go on for another ten or twelve hours. Do we understand him to say that he thinks it reasonable to continue this discussion until we have completed Clause 20? If his proposal is that we should continue to the end of Clause 20, and should then suspend this sitting until a more suitable time, I think that most of my right hon. and hon. Friends would be content to do that here and now, but I do not think that they will be so disposed if there is any doubt about that proposal. I hope that he will give us that assurance, and we can then return to the rather more businesslike type of discussion that we have so far had.
    Mr. G. Darling: I am very worried about Part III of the Bill. I do not want to make a long speech, but rather to put a question to the Minister. Does he want it to go out, when we have finished the Committee stage, that he had so little regard for the work of the Monopolies Commission that its work and future were discussed in the early hours of the morning; that he had so little regard for the Commission's future that he was prepared to discuss all the difficult legal questions involved at such an hour? I sincerely hope that he will take into consideration that we must not discuss the future of the Monopolies Commission in this way.
    Mr. Roy Jenkins: I rise only because the President, greatly to our surprise and disappointment, refuses to say a word to my right hon. Friend the Member for Battersea, North (Mr. Jay). I do ask the right hon. Gentleman to consider very carefully whether he cannot say something more definite at this stage. I appreciate that he is undoubtedly in grave personal difficulties. If it is the Leader of the House who is seeking, against the fairly clear will of the House, to make us go on with this particularly
    1178
    complex Bill at a particularly inconvenient time, I hope that, whatever instructions he has had, the President will use his own initiative.
    He may strengthen his resolve to do that if he casts his mind back to the experience which the Lord Privy Seal himself has had when he has carried the House into all-night sittings against its will. The Lord Privy Seal has considerable experience of all-night sittings. I am sure that the President—and you, Sir Charles—will remember the last occasion when the Lord Privy Seal insisted on carrying the Committee through the consideration of a complex and difficult Bill at a stage when the House had already made considerable progress. The right hon. Gentleman should note that the amount of progress then made was, unfortunately, extremely small during the night, and that the work of the night did more to damage the reputation of the Lord Privy Seal than it did to help the progress of the Bill.
    I hope that the President will take note of the lesson to be learned from this, and will not follow too closely any instructions he may have received from the Lord Privy Seal. In particular, I hope that any instructions he may now be receiving from the Government Chief Whip will be more up to date than those he has received from the Lord Privy Seal, and that he may now be in a position to say something.
    11.45 p.m.
    Mr. P. Thorneycroft: May I suggest that a convenient arrangement might be that we should proceed to discuss the Question, "That Clause 20 stand part of the Bill," and that while that is going on some discussion might take place with a view to making an arrangement?
    Sir L. Ungoed-Thomas: On the understanding that we shall immediately move to report Progress when we have dealt with the Question, "That Clause 20 stand part of the Bill," I agree that that would perhaps be a convenient course to follow, and I dare say it would save time. If that would meet with your approval, Sir Charles, I shall be prepared to withdraw my Motion.
    The Chairman: I would be quite willing to agree to that course.
    Sir L. Ungoed-Thomas: I beg to ask leave to withdraw the Motion.
    Motion, by leave, withdrawn.
    Mr. Mulley: I do not apologise for detaining the Committee to discuss this Clause, I hope rather briefly, because it is a Clause of such great importance to trade and industry.
    Although the President of the Board of Trade is evidently engaged on other matters for the moment, the Parliamentary Secretary will perhaps agree that it is not a very satisfactory Clause. In fact, as I think the Government now realise, it is much more difficult than they thought to translate into statutory terms the simple recommendation of the Lloyd Jacob Report.
    In my submission, the Government have not really faced the logic that it is almost impossible to devise a satisfactory system of individual resale price maintenance on the lines which they have chosen. This is much less satisfactory than the White Paper which was published by the Labour Government, in 1951. It was a great disappointment to us on this side of the Committee that the President having made speeches about the reduction in prices, and so on, which he hopes will flow from this Bill, he has resisted the reasonable Amendments which were moved from these benches to extend the provisions to the co-operative and similar bodies.
    The point on which I wish to concentrate is the failure of the Government to give sufficient consideration to the operation of loss-leaders. It may be a matter of definition, but it is not at all clear what is meant by "retail purchase" in subsection (2, a). For example, will it be possible for someone who wants to use recognised goods to buy them by retail purchase in the ordinary way and in that way avoid the provisions of the Clause?
    At this time of night perhaps it is not desirable to go very far into the question of the non-signer Clause that was debated earlier, but I think the Government ought to give more consideration than they have to the question of size. It seems that this Bill, as we go through it, is increasing the advantages of the large manufacturer or retailer at the expense of the smaller one. While I agree that the words which were
    1180
    suggested might not have been appropriate, I believe that some provision on the lines of protecting one retailer who finds that a large retailer in competition with him is abusing him, ought to be considered. We have to consider the practical implications of this matter.
    The President of the Board of Trade spoke as though every manufacturer approached all his customers with the fairness of an equity judge. In practice, that is not the case. If one retail firm is very large and another firm is very small, the manufacturer will not take action against the large retailer at the whim and wish of the small one. I think that some provision might be made to incorporate that in the Bill.
    I do not want to go into the legal niceties at this time of night, but I thought that in the duel between the hon. and learned Member for Middlesbrough, West (Mr. Simon) and the President of the Board of Trade the hon. and learned Member had the best of it.
    I conclude by asking that before we come to this matter again, on Report, the Government might seriously give thought to the whole question of the operation of individual price maintenance, and particularly to the drafting of subsection (4). It seems to me that snoopers will have to be employed before the subsection can be operated. The wording of "any other description" at the end of that subsection is far too wide and the whole operation of this Clause is extremely clumsy. I ask that it be reconsidered before it becomes law.
    Mr. Jay: In the circumstances we do not wish to prolong discussion unduly, but this should be said about the Clause. A strong case can be made out against individual resale price maintenance. I believe that in these days of full employment, when we are all talking about fighting inflation, there is a great deal to be said for price competition. However, in spite of that, I think that for two reasons I should not go so far as to accept the case against individual resale price maintenance altogether.
    The first reason is that it can be argued with some force that the manufacturer has a reasonable interest in the price at which his own goods are sold. Secondly, we must pay some attention to the question about loss-leaders, of which so much

    1181
    has been heard in reports on this subject and from other sources. We seem to meet these loss-leaders rather more in theory than we do in practice. Nevertheless, on the whole, the evidence makes a case for giving the individual manufacturer the power to enforce individual price maintenance; but we do not agree that it is justifiable to give the power to individual manufacturers in the unqualified form in which the right hon. Gentleman gives it in the Bill.
    We are, after all, giving the power to suppliers to enforce, through the courts, on third or fourth parties who have not entered into the contract, a price dictated by the manufacturer. Although we have heard a great deal today, mainly from the hon. Member for Heston and Isleworth (Mr. R. Harris), about the desire, as he sees it, of the retailers to have this power enforced, what the Clause does is to limit the freedom of the retailer to charge what price he wishes. That should not be ignored.
    We should have been prepared to accept the Clause had the right hon. Gentleman included the three conditions: first, that collective resale price maintenance really had been effectively banned by the Bill. I think we have now quite definitely established that what we said on Second Reading about collective resale price maintenance is in fact true: that is to say, that what the previous Clause does is to ban its enforcement by a collective boycott. It does not ban its enforcement in any other way. If there is agreement to enforce resale price maintenance by methods other than collective boycott, then it is a registrable agreement which will be registered under the earlier part of the Bill, and then the matter may come up at some time before the Restrictive Practices Court which may or may not take the view that it is contrary to the public interest. That, whether right or wrong, is very far from banning
    collective resale price maintenance outright.
    Secondly, we think there should have been a firm safeguard to look after the special position of the Co-operative movement. I thought that the speech of the right hon. Gentleman, in answer to my hon. Friends who spoke about the Co-operative movement, was the least satisfactory speech he has made throughout the debates on the Bill. We were totally unconvinced by it. Very largely for that reason we do not feel prepared to accept the Clause in this unqualified form.
    Thirdly, we feel equally strongly that if we are to grant this power to enforce, then there should have been a qualification, which we suggested in one or two Amendments a little earlier, that the Court—and we did not really want to have a Court—the body taking the decision, should have the power to say, when a consumer or user came forward with a grievance, "Well, in this case enforcement of individual price maintenance by law is not justified." The right hon. Gentleman refused that. By refusing that he has laid himself open to criticism which was made with much force by one of the members of the Liberal Party, in one of many excellent speeches on the Bill, to which we have already paid tribute.
    If we are not careful we may get individual resale price maintenance used by the monopolies, on the one hand, and by the trade associations, on the other, to enforce what really is collective resale price maintenance through Clause 20. Since we have been refused all these safeguards, although I hope that the President will think again before the Report stage, we feel bound to vote against the Clause in its present form.
    Original Question put:—
    The Committee divided: Ayes 141. Noes 92.

    Division No. 178.]

    AYES

    [11.56 p.m.

    Agnew, Cmdr. P. G.

    Birch, Rt. Hon. Nigel

    Corfield, Capt. F. V.

    Aitken, W. T.

    Bishop, F. P.

    Crouch, R. F.

    Alport, C. J. M.

    Body, R. F.

    Currie, G. B. H.

    Armstrong, C. W.

    Boyle, Sir Edward

    Dance, J. C. G.

    Ashton, H.

    Braine, B. R.

    D'Avigdor-Goldsmid, Sir Henry

    Balniel, Lord

    Braithwaite, Sir Albert (Harrow, W.)

    Deedes, W. F.

    Barber, Anthony

    Bryan, P.

    Digby, Simon Wingfield

    Barlow, Sir John

    Cary, Sir Robert

    Drayson, G. B.

    Barter, John

    Channon, H.

    du Cann, E. D. L.

    Baxter, Sir Beverley

    Cole, Norman

    Eden, J. B. (Bournemouth, West)

    Bell, Philip (Bolton, E.)

    Cordeaux, Lt.-Col. J. K,

    Farey-Jones, F. W.

    Fell, A.

    Kershaw, J. A.

    Ropner, Col. Sir Leonard

    Finlay, Graeme

    Lambton, Viscount

    Schofield, Lt.-Col. W.

    Fisher, Nigel

    Leather, E. H. C.

    Sharpies, R. C.

    Freeth, D. K.

    Leavey, J. A.

    Shepherd, William

    Garner-Evans, E. H.

    Legge-Bourke, Maj. E. A. H.

    Simon, J. E. S. (Middlesbrough, W.)

    George, J. C. (Pollok)

    Legh, Hon. Peter (Petersfield)

    Smithers, Peter (Winchester)

    Glover, D.

    Lindsay, Martin (Solihull)

    Stevens, Geoffrey

    Godber, J. B.

    Linstead, Sir H. N.

    Steward, Harold (Stockport, S.)

    Gower, H. R.

    Longden, Gilbert

    Steward, Sir William (Woolwich, W.)

    Graham, Sir Fergus

    Lucas-Tooth, Sir Hugh

    Stoddart-Scott, Col. M.

    Grant-Ferris, Wg Cdr.R. (Nantwich)

    Macdonald, Sir Peter

    Studholme, H. G.

    Green, A.

    Mackeson, Brig. Sir Harry

    Summers, G. S. (Aylesbury)

    Gresham Cooke, R.

    Mackie, J. H. (Galloway)

    Thomas, P. J. M. (Conway)

    Grosvenor, Lt.-Col. R. G.

    McLaughlin, Mrs. P.

    Thompson, Lt.-Cdr. R. (Croydon, S.)

    Hall, John (Wycombe)

    Maclay, Rt. Hon. John

    Thorneyoroft Rt. Hon. P.

    Harris, Frederic (Croydon, N.W.)

    Manningham-Buller, Rt. Hn. Sir R.

    Thornton-Kemsley, C. N.

    Harris, Reader (Heston)

    Markham, Major Sir Frank

    Tiley, A. (Bradford, W.)

    Harrison, A. B. C. (Maldon)

    Marlowe, A. A, H.

    Tilney, John (Wavertree)

    Harvey, Air Cdre. A. V. (Macclesfd)

    Maydon, Lt.-Comdr. S. L. C.

    Touche, Sir Gordon

    Heald, Rt. Hon. Sir Lionel

    Medlicott, Sir Frank

    Turner, H. F. L.

    Heath, Rt. Hon. E. R. C.

    Milligan, Rt. Hon. W. R.

    Vickers, Miss J. H.

    Hirst, Geoffrey

    Morrison, John (Salisbury)

    Vosper, D. F.

    Hornsby-Smith, Miss M. P.

    Nabarro, G. D. N.

    Wakefield, Edward (Derbyshire, W.)

    Howard, John (Test)

    Neave, Airey

    Walker-Smith, D. C.

    Hudson, Sir Austin (Lewisham, N.)

    Nicholls, Harmar

    Wall, Major Patrick

    Hughes, Hallett, Vice-Admiral J.

    Nicolson, N. (B'n'm'th. E. & Chr'ch)

    Ward, Dame Irene (Tynemouth)

    Hughes-Young, M. H. C.

    O'Neill, Hn. Phelim (Co. Antrim, N.)

    Waterhouse, Capt. Rt. Hon. C.

    Hylton-Foster, Sir H. B. H.

    Orr-Ewing, Charles Ian (Hendon, N.)

    Whitelaw, W. S. I. (Penrith &; Border)

    Irvine, Bryant Godman (Rye)

    Page, R. G.

    Williams, Paul (Sunderland, S.)

    Jenkins, Robert (Dulwioh)

    Peyton, J. W. W.

    Wills, G. (Bridgwater)

    Jennings, J. C (Burton)

    Pitt, Miss E. M.

    Wilson, Geoffrey (Truro)

    Johnson, Dr. Donald (Carlisle)

    Pott, H. P.

    Yates, William (The Wrekin)

    Johnson, Eric (Blackley)

    Price, Henry (Lewisham, W.)

    Joseph, Sir Keith

    Profumo, J. D.

    TELLERS FOR THE AYES:

    Joynson-Hicks, Hon. Sir Lancelot

    Raikes, Sir Victor

    Mr. Oakshott and

    Keegan, D.

    Redmayne, M.

    Colonel J. H. Harrison.

    Kerby, Capt. H. B.

    Remnant, Hon. P.

    Kerr, H. W.

    Robinson, Sir Roland (Blackpool, S.)

    NOES

    Ainsley, J. W.

    Fernyhough, E.

    Owen, W. J.

    Allaun, Frank (Salford, E.)

    Fletcher, Eric

    Paget, R. T.

    Allen, Arthur (Bosworth)

    Fraser, Thomas (Hamilton)

    Parker, J.

    Awbery, S. S.

    Gibson, C. w.

    Pearson, A.

    Baird, J.

    Grey, C. F.

    Peart, T. F.

    Beswick, F.

    Griffiths, William (Exchange)

    Plummer, Sir Leslie

    Blyton, W. R.

    Grimond, J.

    Popplewell, E.

    Boardman, H.

    Hall, Rt. Hn. Glenvil (Colne Valley)

    Price, Philips (Gloucestershire, W.)

    Bottomley, Rt. Hon. A. C.

    Hannan, w.

    Randall, H. E.

    Bowden, H. w. (Leicester, S.W.)

    Hayman, F. H.

    Roberts, Goronwy (Caernarvon)

    Bowen, E. R. (Cardigan)

    Healey, Denis

    Ross, William

    Bowles, F. C.

    Henderson, Rt. Hn. A. (Rwly Regis)

    Short, E. W.

    Boyd, T. C.

    Holt, A. F.

    Silverman, Julius (Aston)

    Brockway, A. F.

    Hughes, Emryt (S. Ayrshire)

    Simmons, C. J. (Brierley Hill)

    Broughton, Dr. A. D. D.

    Hughes, Hector (Aberdeen, N.)

    Skeffington, A. M.

    Brown, Rt. Hon. George (Belper)

    Irving, S. (Dartford)

    Slater, J. (Sedgefield)

    Burke, W. A.

    Janner, B.

    Thornton, E,

    Castle, Mrs. B. A.

    Jay, Rt. Hon. D. P. T.

    Tomney, F.

    Champion, A. J.

    Jeger, George (Goole)

    Ungoed-Thomas, Sir Lynn

    Chetwynd, C. R.

    Jenkins, Roy (Stechford)

    Usborne, H. C.

    Collick, P. H. (Birkenhead)

    Jones, J. Idwal (Wrexham)

    Wade, D. W.

    Collins, V. J. (Shoreditch & Finsbury)

    King, Dr. H. M.

    Wheeldon, W. E.

    Corbet, Mrs. Freda

    Logan, D. G.

    White, Mrs. Eirene (E. Flint)

    Craddock, George (Bradford, S.)

    MacColl, J. E.

    Wilkins, W. A.

    Cronin, J. D.

    Mallalieu, E. L. (Brigg)

    Williams, W. R. (Openshaw)

    Dalton, Rt. Hon. H.

    Mikardo, Ian

    Winterbottom, Richard

    Darling, George (Hillsborough)

    Morris, Percy (Swansea, W.)

    Woof. R. E.

    Davies, Harold (Leek)

    Moss, R.

    Yates, V. (Ladywood)

    Deer, G.

    Moyle, A.

    Dodds, N. N.

    Mulley, F. W.

    TELLERS FOR THE NOES:

    Ede, Rt. Hon. J. C.

    Oram, A. E.

    Mr. Holmes and Mr. J. T. Price

    Edwards, Robert (Bilston)

    Oswald, T.

    Question put and agreed to.

    Clause 21.—(SUPPLEMENTARY PROVISIONS.)
    Amendments made: In page 18, line 9, after "of", insert "section twenty-one of".
    In line 14, after "of", insert "section twenty-one of".
    In line 20, after "to", insert "section twenty-one of".—[Mr. P. Thorneycroft.]
    Clause, as amended, ordered to stand part of the Bill.
    Sir L. Ungoed-Thomas: I beg to move, That the Chairman do report Progress and ask leave to sit again.

    1185
    We have discussed the desirability of continuing this debate or not. I think it would be quite possible, and I am sure we could, without any difficulty, finish the rest of the Bill in less than a day. We shall certainly co-operate with the Government, as we have done throughout, with a view to getting through the Bill expeditiously but, at the same time, we wish it to be thoroughly and satisfactorily discussed. I hope that on that footing, therefore, it will be possible for the President to say that we will not continue further with this debate tonight.
    Mr. P. Thomeycroft: I welcome the hon. and learned Gentleman's suggestion. I am not an addict for discussing complicated Measures late at night. It there
    1186
    fore gives me personal satisfaction in not having to deal with further Amendments now. If we could finish the Committee stage of the Bill as the hon. and learned Gentleman has suggested, I am sure that that would be satisfactory to all concerned.
    Committee report Progress; to sit again this day.

    ADJOURNMENT
    Resolved, That this House do now adjourn.—[Mr. Galbraith.]
    Adjourned accordingly at seven minutes past Twelve o'clock.

NATIONAL SERVICE
  Science and Engineering Graduates
  Science and Engineering Graduates
EMPLOYMENT
  Pottery Industry (Pilot Survey)
  Pottery Industry (Pilot Survey)
SCOTLAND
  Inveresk Gate
  Inveresk Gate
  Prescriptions (Average Cost)
  Prescriptions (Average Cost)
  Institute of Seaweed Research
  Institute of Seaweed Research
SCIENTIFIC AND INDUSTRIAL RESEARCH
  Scientific Libraries (Report)
  Scientific Libraries (Report)
BRITISH ARMY
  Future Structure (Committee)
  Future Structure (Committee)
  Reserve Army (Reorganisation)
  Reserve Army (Reorganisation)
  N.A.A.F.I. (Board of Management)
  N.A.A.F.I. (Board of Management)
  Letters (Air Mail)
  Letters (Air Mail)
  Roberton Training Ground, Lanark
  Roberton Training Ground, Lanark
  National Service Man's Death, Cyprus
  National Service Man's Death, Cyprus
TRADE AND COMMERCE
  Sound Recordings and Films
  Sound Recordings and Films
  Canadian Markets (Restrictive Agreements)
  Canadian Markets (Restrictive Agreements)
  Paper Production (Statistics)
  Paper Production (Statistics)
NATIONAL FINANCE
  Capital Expenditure (Industry)
  Capital Expenditure (Industry)
  Surtax
  Surtax
  University Education, Scotland
  University Education, Scotland
LOCAL GOVERNMENT
  Warwickshire County Development Plan
  Warwickshire County Development Plan
  Water Supply, Pateley Bridge and Nidderdale
  Water Supply, Pateley Bridge and Nidderdale
  Finance (Review)
  Finance (Review)
HOUSING
  Completions
  Completions
  Housing Management Commissions
  Housing Management Commissions
EDUCATION
  Teachers (Local Authority Membership)
  Teachers (Local Authority Membership)
  School Building Programme
  School Building Programme
PENSIONS AND NATIONAL INSURANCE
  Motor Car Workers (Unemployment Benefit)
  Motor Car Workers (Unemployment Benefit)
FUEL AND POWER
  Atomic Power Programme
  Atomic Power Programme
TRANSPORT
  Ports Efficiency Committee (Report)
  Ports Efficiency Committee (Report)
COLONIAL TERRITORIES
  Detained Persons
  Detained Persons
KENYA
  Death Sentences (Appeals)
  Death Sentences (Appeals)
TANGANYIKA
  School Certificate Holders (Higher Education)
  School Certificate Holders (Higher Education)
  Central and Local Government Franchise
  Central and Local Government Franchise
Preamble
The House met at half past two of the clock, The LORD CHANCELLOR On the Woolsack.
Prayers
  CROYDON CORPORATION BILL
  Read 2a, and committed; the Committee to be proposed by the Committee of Selection.
LIVERPOOL OVERHEAD RAILWAY BILL [H.L.]
Read 3a, and passed, and sent to the Commons.

OVERSEAS INFORMATION SERVICES
2.35 p.m.
LORD REA: My Lords, I beg 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 approximate proportion of the £10,500,000 estimated expenditure (1955–1956) on the maintenance of all overseas information services to the Commonwealth and to foreign territories is being spent upon broadcasts or other vehicles for enlightenment directed specifically by Her Majesty's Government to foreign nationals who are known to be recipients from other sources of highly damaging and continuous misrepresentations of British policy and aims.]
THE MINISTER OF STATE FOR FOREIGN AFFAIRS (THE MARQUESS OF READING): My Lords, the inhabitants of many foreign territories may be said to be exposed in some degree to misrepresentations of the kind referred to in the noble Lord's question. These chiefly emanate at present from certain regions.
As the noble Lord is aware, the £10·5 million estimated expenditure on overseas information services is mainly divided between expenditure in foreign territories of £2¼ million, in Commonwealth territories
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of £500,000, in Colonial territories of £250,000, on the work of the British Council of £2·6 million and on the B.B.C. of £4·8 million. Apart from these figures, no analysis of the total cost of the overseas information services which would show how much was spent in the various areas and for the various purposes is possible, since the production of material for use by the information services is centralised in the United Kingdom. Moreover, a great deal of the effort is devoted not to rebutting misrepresentations after they have been made but to taking the initiative in informing people overseas of the aims and achievements of this country.
The only guide I could give would be to take the proportion of the total cost of staff overseas spent in certain areas like the Middle East and South-East Asia; but this would be misleading because the scale of costs and the methods used vary substantially from country to country. Her Majesty's Government are fully aware of the pernicious effect of these misrepresentations and within the limit of what is financially possible, they are doing their best to counter it.
LORD REA: My Lords, I thank the noble Marquess for his long and helpful explanation and particularly for the assurance contained in his last sentence.
LORD TREFGARNE: My Lords, as the noble Marquess himself knows so well, what is really important is not what is broadcast but what is heard; and will he convey to the B.B.C. the suggestion that they inform themselves more fully about the high proportion of many of these broadcasts which, for various reasons to which I need not refer, are quite inaudible to the audience to whom they are addressed?
THE MARQUESS OF READING: My Lords, I would think that if that inaudibility is deliberately provoked, the B.B.C. are fully alive to the situation.
LORD TREFGARNE: My Lords, I have in mind not mere jamming but other reception factors of which the B.B.C. may not be so fully informed.
LORD BARNBY: My Lords, arising out of his reply, may I ask the noble Marquess whether, since he lumped under one heading the expenditure from all sources, it is to be understood that the total expenditure which is under the

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British Council, as he has just described, is directed wholly by the officer in the Foreign Office who, in a recent reply, he indicated directed all foreign public promotion activities? And would he also care to say whether further consideration is likely to be given to so large an expenditure rightfully occupying a whole-time officer?
THE MARQUESS OF READING: My Lords, I am bound to say, with all respect to the noble Lord, that I am not very clear on the substance of that question; and in so far as he quoted, or alleged that he was quoting, an earlier reply of mine, I am afraid that, there again, did not recognise the reply. I can only say that the British Council works in very close association with the Foreign Office, of course, but it is an independent body and, as the noble Lord knows, pursues its activities in many countries of the world. Unfortunately, there again, the question of finance has to be taken into account in limiting its activities to a greater extent than we should like to do if we had inexhaustible resources.
LORD BARNBY: I thank the noble Marquess for his reply and I make my apology to him for not making my question clear. Perhaps I can confine it to one sentence: Is it to be understood that the direction of the expenditure by the British Council is directly under the responsibility of the Foreign Office?
THE MARQUESS OF READING: My Lords, that supplementary does not really arise from the main Question, but I think the question of where the emphasis is to be laid in the work of the British Council must to a considerable extent be a Foreign Office responsibility; and that is so. The British Council also carries on its activities as a separate organisation.

ALDERSHOT TATTOO
VISCOUNT BRIDGEMAN: My Lords, I beg 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 their attention has been drawn to a report in the Press of 2nd May to the effect that a rehearsal of the White City Tattoo was to be held at Rush-moor, Aldershot; and whether it is the
188
policy of Her Majesty's Government to reintroduce the Aldershot Tattoo in the near future.]
LORD FAIRFAX OF CAMERON: My Lords, the report referred to was not official, and it is not the policy of Her Majesty's Government to reintroduce the Aldershot Tattoo.
VISCOUNT BRIDGEMAN: My Lords, is my noble friend aware that his Answer will give great satisfaction to those of us who think that modern soldiers should be trained for modern war and not for the battles of the past? And is he also aware that the use of National Service men on tattoos or events of the same kind should be approached with the greatest caution?
LORD FAIRFAX OF CAMERON: My Lords, I can assure my noble friend that my right honourable friend the Secretary of State for War has no intention of allowing training to be endangered by the devotion of excessive time to this kind of display.
VISCOUNT BRIDGEMAN: I thank my noble friend for his reply.

UNIVERSITY COLLEGE OF RHODESIA
2.43 p.m.
THE EARL OF LUCAN: My Lords, I beg 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, in view of the financial contribution they are making towards the setting up of the University College of Rhodesia and Nyasaland in Salisbury, they are satisfied that the proposed residential arrangements are consistent with the principle of a multi-racial university.]
THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (THE EARL OF HOME): Yes, my Lords. When Her Majesty's Government agreed to make a financial contribution to the University College of Rhodesia and Nyasaland, it had already been announced that the College was to be open to students of all races. The College has since been constituted by Royal Charter. It is governed by a Council, which is autonomous. The Council is responsible

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for the residential arrangements, and I am sure that your Lordships will agree that it is right to leave them to make the arrangements which are most likely to attract both Africans and Europeans to the University.
THE EARL OF LUCAN: My Lords, I thank the noble Earl for his reply. May I ask him whether he recollects that the noble Earl, Lord Swinton, in 1953 said that the essential principle of a multiracial university is completely accepted? Does the noble Earl also remember that that statement was an important factor in gaining wide support for the principle of federation at the time it was being passed through?
THE EARL OF HOME: Yes, my Lords, I recollect the statement of my noble friend Lord Swinton. I would remind the noble Earl that the Carr-Saunders Report on Higher Education for Africans in Central Africa considered that separate hostels would be in accordance with the multi-racial principle. I think that the University should concentrate on those conditions which will attract both Europeans and Africans to the University: that is the first thing to do. When that is established, I think that as the years go by many other developments will take place which we cannot as yet foresee.
THE EARL OF LISTOWEL: May I ask the noble Earl this question in order to elicit information on a point which I think still needs to be cleared up? Can the noble Earl tell us whether Asians will have access to both European and African hostels or only to one or the other?
THE EARL OF HOME: My Lords, I think I should require notice of that question.
LORD WINSTER: My Lords, may I ask whether any consideration has been given to the question of providing multiracial hostels for either sex in addition to the segregated hostels? Is it not likely that if that were done many European students might like to go into the multiracial hostels, and that might be the beginning of a movement which might make these segregated hostels ultimately unnecessary?
THE EARL OF HOME: I have no doubt that the Principal of the University
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who, as the noble Lord knows, is a most enlightened and progressive man—he has very progressive ideas indeed—will see the noble Lord's question. I am not prepared here from Whitehall to interfere with people who really know their business. As I said in answer to the noble Earl, Lord Lucan, I am sure that we must begin by trying to attract both African and European students to the, University. Incidentally, I believe there is going to be a restaurant which will be available to both Africans and Europeans. I have no doubt that there will be many changes as a result of commonsense practice and that we shall see many developments in future years.

BUSINESS OF THE HOUSE
2.46 p.m.
THE EARL OF HOME: My Lords, with reference to the Business of the House to-day, may I say that, as your Lordships know, as a matter of convenience we arranged that we should proceed with the debate on the economic situation and thereafter deal with the Committee stage of the Clean Air Bill. The economic situation has proved a rather more popular subject than the Government, and perhaps anyone else, thought likely. To-day we are to have eleven speeches upon it. I do not know whether the noble Viscount, Lord. Alexander of Hillsborough, will agree, but I think we should finish the debate on the economic situation and then see how far we can get with the Committee stage of the Clean Air Bill, without any desire to sit late or any wish on the Government's part to finish it. I understand that the right reverend Prelate the Lord Bishop of Sheffield will be unable to get here on another day, so I think it would be convenient if we could manage to get as far as Clause 8 to-day.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I have only just been notified of this matter and therefore have not had much time to think about it. I think it is quite right that we should see how long we take over the debate on the economic situation. We do not want to sit too late, but if it is at all possible we should like to get through all the Amendments to the Clean Air Bill. It would be a convenience to one or two of my noble friends who

191
are interested in the Amendments and who would find it difficult to be here on another occasion if we could do that—that is unless we can come to some agreement about the next occasion on which to continue the consideration of this Bill. I have not heard yet of any such agreement.
THE EARL OF HOME: Perhaps we can see how we go on, and then, through the usual channels, make arrangements.

LICENSING (AIRPORTS) BILL [H.L.]
Returned from the Commons, agreed to, with Amendments: the said Amendments to be printed.

THE ECONOMIC SITUATION
2.49 p.m.
Debate resumed (according to Order) on the Motion moved last Wednesday by Lord Pethick-Lawrence, That there be laid before the House Papers relating to the economic situation.
LORD WINSTER: My Lords, I have noticed two phrases which constantly recur in the course of our debates. The first is "Speaking at this late hour", which becomes operative at about five o'clock. The second is that used sometimes by a speaker when he rises, "I will not follow the noble Lord who has just sat down in his remarks." It is very natural, of course, to wish to make a speech which one has prepared, but the persistent practice of never following a previous speaker rather kills the spirit of debate. I was so interested in the speeches on Wednesday last that I hurriedly scrapped nearly all I intended to say had I spoken that day. I should like, with your Lordships' permission, to refer to one or two of the speeches that were made.
I thought Lord Rea's speech was most interesting. He raised a question which I feel will have to be faced in the future. I could not entirely agreed with his view [OFFICIAL REPORT, VOL 197 (No. 87), col. 53] that
"warnings and exhortations … have successfully induced in us all a willingness to face some … form of self-sacrifice."
192
I am afraid that that is far from literally true, as in fact in the latter part of his speech the noble Lord amply demonstrated. I notice that he spoke (Col. 55) about modern developments having
"… brought the workers into a position of power which they ought to have."
I am far from entirely disagreeing, but I think that that statement requires some analysis.
LORD REA: My Lords, it is a question of how my remark is interpreted. My intention was to imply to that degree of power to which they are entitled.
LORD WINSTER: I would agree with the noble Lord, but as the phrase was used, and as I have read it and checked it from Hansard, I say that I think it would require some analysis. Certainly they have power now, and certainly they deserve to have it; but on occasion that power is abused. I think we have seen that in the dock strikes; in that preposterous strike at Cammell-Laird about boring holes; certainly in the current difficulties in B.O.A.C., and in regard to the Amalgamated Engineering Union and automation. I think that all these examples show that that power requires perhaps to be rather more carefully used than it sometimes is, and that if it is used too much in these ways it will land us in very considerable trouble. I think that a remark made by the noble Lord, Lord Pethick-Lawrence, in the course of his speech, bears on the point. He said (col. 51) that inflation cannot be cured
"… by the false doctrine that everyone should pursue his own personal advantage to the community at large."
I entirely agree, but I regret to say that there have been too many instances in the past of people pursuing their personal advantage without regard to the welfare of the community.
The noble Lord spoke about wicked men who dodge income tax and "cook" expense accounts. That is very wrong, but practices such as these have their parallels in some of the strikes to which I have referred, which have disregarded the good of the community. I was interested in what the noble Lord said about tax evasion and expenses, remembering how I was pursued by the income tax authorities on the question of my income tax return and expenses. I could not help feeling that there must be one law for the rich and another for the poor,

193
if those people are able to get away with such practices as the noble Lord revealed to us. I know that I certainly cannot get away with a ha'penny. Therefore, it puzzles me very much that these things can go on. I have little doubt that expense accounts are "wangled". I was staying recently at a very luxurious hotel on the South Coast and happened to remark to the maître d'hotel that they seemed to have a very good business. "Oh yes," he replied, "but it is all expense accounts of course." I said, "Really?" He replied, "Yes, and you see all these ladies here. Half of them are secretaries posing as wives, and the other half are wives posing as secretaries. That gets then on to the expense account."
Going back for one moment to what the noble Lord, Lord Rea, said on the question of trade unionism, I think we can perhaps agree with him that
"anomalies … must have arisen in a movement founded ninety years ago,"
but to my way of thinking they are anomalies which should not have developed and which to-day the trade union leaders are perfectly capable of correcting themselves. There is truth in the saying that the unions have perhaps largely exhausted the function which called them into existence, in the days of which the noble Lord, Lord Pethick-Lawrence, spoke, when, to use his words (col. 49):
"the manual worker was treated with savage inhumanity."
That is quite true, and it was that inhumanity which called the trade unions into existence. But to-day the law would not permit of such abuses as existed in those days, and the question to-day is rather whether the trade union leaders can control the machine they have created. They are, unfortunately, very often defeated when advising moderation and restraint or when refusing to recognise a strike as official. Most unfortunately, the level-headed trade unionists, who I am sure are in the majority, take little or no interest in their own organisation, so that there is always the danger of the organisation being captured by an active minority of Communists and hotheads who no doubt plan for a "Workers' Republic" or something similar. But the trade unions were not
194
created, nor have they been supported by public opinion, which has reacted upon and affected the actions of all political Parties, in order that their control should be wrested from the hands of men who have regard for tie community by extremists who really wish to erect a tyranny of labour. In this country we have dealt with a great many tyrannies, one after the other. If one looks back through our history, one sees a constant struggle of our people against one tyranny or another, and those who think that they can erect yet another tyranny will duly find out their mistake, as did those who tried to do the same thing in the past.
The noble Viscount, Lord Hailsham, is not here this afternoon. He used the debate as a stick with which to beat the most reverend Primate the Lord Archbishop of Canterbury and gave us a very spirited and lively exhibition of argumentum ad baculinum, which we all enjoyed, and nobody more than the noble Viscount himself. But dangers lurk in such wit. It was an American Senator, Thomas Corwin, who had been Governor of Ohio and Secretary of the American Treasury, who used to say that he might have gone higher and been President of the United States had his enemies not given him the reputation of being a funny man. His advice to General Garfield was:
"Never make people laugh. If you want success in life, you must be solemn, solemn as an ass. All the great monuments are built over solemn asses."
Obviously, General Garfield took his advice, because he did become President—and noble Lords have only to step across the road to the Abbey to see how right Senator Corwin was about monuments.
However, I agree with the noble Viscount, Lord Hailsham, that the most reverend Primate made rather heavy weather of this question of premium bonds by denouncing them as a gamble, which of course they are not. For myself I dislike the idea very much, not on the moral grounds advanced by the most reverend Primate, but because to me there is something rather Latin-American about such bonds. I think it is beneath our dignity to resort to such methods in our Budget. But the most reverend Primate really must not tell us all that gambling is inherently wrong, because it is an instinct which is inherent in human

195
nature. My reading of the New Testament has always been that it is very tolerant indeed towards manifestations of deep-seated human instincts. I do not know that it has anything to say about gambling, but I notice that on the question of alcohol it does not tell us to abstain entirely. It is wrong to get drunk and beat your wife, or to drive your car and run over somebody. But the New Testament preaches moderation and says:
"Take a little wine for your stomach's sake."
I think that moderation might well prevail in this matter of premium bonds.
There is one question that I should like to address to the most reverend Primate, in case he should read the Report of this debate. If he is so opposed to all indulging in chance, I do not follow why he presented a mascot to the captain of the Australian cricket team. Surely, the whole idea of a mascot is that it is given as something which will interfere with the laws of chance and influence them in favour of the person who holds the mascot. I feel that there was something a little inconsistent in that action of the most reverend Primate. I must also say that I have noticed that in the halls of the most respectable clubs at this time of year one sees going up notices about Derby sweeps. I wonder if all Bishops and lesser ecclesiastical fry could give their word that they have never taken a ticket in a Derby sweep.
We are all glad to see the noble Lord, Lord Lucas of Chilworth, back amongst us. He has returned to our climate from the sun of California, and it seems to have led him to take rather a gloomy view of our national prospects. There was great force in much of what the noble Lord said, but I do not know that our prospects are quite so desperate as he pictured them. I have a little more hope about them than he appears to have. On the question of defence expenditure, I believe that we all share his sorrow that we have to budget for such enormous sums on defence, but I feel that his views on that subject might be put to the test by his taking part in the coming debates on the Navy Estimates and the Air Estimates.
What does the noble Lord suggest giving up? Are we to abandon the struggle to arm in proportion to our position and our responsibilities in the world?
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Or does the noble Lord suggest neutralism—a policy which rests entirely upon the good will of other countries? Or does he suggest our being for ever dependent upon America? As I say, neutralism is a policy which depends on the forbearance of strong nations, and I do not want to live "by kind permission of the United States of America." The more one examines this question, the more one is brought down to the hard fact that, things being as they are, and people in other countries being as they are, we have no alternative but to pursue our existing policy on armaments, while, of course, endeavouring to pursue that path as economically as possible. I do not deny that there is room for great economics: but I wish the noble Lord, Lord Lucas of Chilworth, were going to take part in those two forthcoming debates, when he could elaborate a little more fully his views on this question.
In the last economic debate I ventured to give my opinion that what causes our economic troubles, and inflation, especially, is the fact that we are not getting full value for the hundreds of millions of pounds paid out during the year in wages; and that if we do not get full value for that money, it is certain that we shall have inflation and find ourselves in great difficulties. Wages rise, but productivity does not always rise in proportion. Promises of better work in return for higher wages are given, but they are not fulfilled. In far too many cases those who grant the higher wages do so with the comforting thought that it will be possible to "stick it on the price"; and, not unnaturally, the workers' view of wages is, "all that the traffic will bear". But what happens when it is no longer possible to "stick it on the price"—when the price has reached a point where the consumer will not pay any more—and when the traffic will not bear any more? Will the worker then realise that to maintain even current wages, let alone raise them still further, will be impossible unless there is a corresponding proportional rise in productivity? The noble Lord, Lord Cherwell, has written to say that he is unable to be present to-day, but in his interesting speech this passage occurred: [OFFICIAL REPORT, Vol. 197, (No. 87) col. 81]:
"Only a change of heart of the population can save the situation."

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He went on to say that the mentality of trying to get as much as possible for doing as little as possible must eventually lead to unemployment. Those are not, perhaps, very comforting words, but I believe it to be perfectly true that wages cannot be maintained at their present level, let alone raised still higher, unless productivity rises in proportion.
I would venture to call the attention of the noble Earl, Lord Munster, who I understand is to reply on behalf of the Government to-day, to what I think is a most important feature in our economy. I see that leading shipowners have referred to the possibility of registering their ships in Commonwealth countries, where taxation is low, to enable them to compete with what are called "flags of convenience". I want to make it quite clear that the shipowners have not spoken about this in the sense that they are actively considering it, or have any immediate intention of doing so; but they have pointed out benefits that would accrue to them if they were to take such a step. For instance, taxation in Bermuda is negligible. Why should not our shipowners operate from there? There are certain legal difficulties in the way, but they could be overcome. At present they have to compete with tax-free fleets, registered in Liberia or Panama, where the growth of the fleets is quite phenomenal. What blame could attach to our shipowners for taking such a step, when they see themselves threatened with being put out of business by such ships?
In 1939, Panama, Liberia, Honduras and Costa Rica registered between them 750 gross tons of shipping. To-day, the figure of those four countries is over 9 million gross tons. That is the situation with which our shipowners are confronted. The owners of that 9 million gross tons of shipping can add to their fleets out of untaxed profits. Suppose the Cunard Company decided to follow their example. I see that the Chairman of the Cunard Company said the other day that, had they done so in the past, they could have saved £14 million over the past six years, which would have been a very great help towards replacements, which are such a problem to-day, when with the present cost of building a ship, it really is not possible to provide for her replacement out of her earnings during her life.
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Are British owners expected to turn their backs indefinitely upon comparable sums? The Government have been fully warned upon this point, and the matter has been raised more than once in debates in this House. One gets only a very perfunctory reply when one raises it. Here is an industry contributing enormous sums to the total of our invisible exports. Are the Government willing to let it be "done down" by competitors running what I can only call the "Fancy Flag" racket? I hope the Government will be moved to give more consideration to the question of the difficulties of our shipowners to-day, and, if they do, I hope they will take some practical steps to ease the difficulties of one of the greatest of our industries. I mention only one other source of grievance to the shipowners and I will mention it in two words. They ask, and not unnaturally: Why is civil aviation treated like a rare orchid and given the hot house treatment, while another mode of transport, shipping, gets put in the deep-freeze?
The last point I wish to mention is the treatment handed out to the middle classes of this country by successive Chancellors of the Exchequer. The middle classes are by tradition an inarticulate section of the community. Nowadays it is rather difficult to say where they begin and where they end. However, there is something which is still very distinctly the middle class. It is a solid national element, displaying highly admirable virtues and qualities, particularly in the sphere of family life. Their distinctive characteristic, to my mind, is that they make great sacrifices, not "to keep up with the Joneses" but to keep up certain traditional virtues and standards, especially as regards the education of their children and the training of their children in honesty and reliability. It always seems to me that the middle classes have a sense of duty to society and the nation—a sense of duty which has no truck with clock-watching or work-dodging. The professional man does not think of his duty to society in terms of a forty-hour week—he is usually working much longer hours than that.
I would put it in this way: just as the red strand runs through an Alpine rope telling you that you can trust your life to it, so I feel the middle class runs through our national life, dependable amid rather

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weak strands. Too many of these estimable people are having a very hard time. Taxation bears too heavily upon them, and no Chancellor seems to heed their plight. The husband who works with his brain to keep his household going mostly has his mind full of financial preoccupations, uncertainties and anxieties which are certainly not conducive to good brainwork. There are no longer any wolves in England; it is now the tax-gatherers who have to be kept from the door. Whereas in the old days you could shoot a wolf, tax-gatherers now enjoy an all-the-year-round close season, with the result that to-day the middle-class man is having the life squeezed out of him by the boa-constrictor of inflation.
What specially hits the middle-class man is the fact of surtax beginning at £2,000. That is the pre-war equivalent of £800, and it really is absurd to apply such an opulent sounding tax—misleadingly opulent sounding—to such a small income. Imagine treating a man who has the equivalent of £800 a year to spend as a rich man! Apart from what I regard as the iniquity of starting surtax at £2,000, there are other anomalies about it of which I do not think everybody is always aware. The allowances which are granted for income tax purposes may bring a taxable income below surtax level, but they are not deductible when calculating liability for surtax.
It works out in this way, if I may give one instance. A married man with two children earning £2,100 a year may, for income tax purposes, deduct £890, making his income for income tax purposes £1,210, which is worth about £485 pre-war. Nevertheless, he is liable for surtax. If the allowances which are granted him in respect of income tax were also granted in respect of surtax the man would be free of surtax until his income reached £2,890 a year. It seems to me an extraordinary anomaly to allow a man certain income tax allowances which bring his income well below the £2,000 at which surtax begins, but when you are considering surtax to disregard that deduction entirely and to say: "No, you are also liable for surtax in spite of the fact that your income tax allowances bring your income below the £2,000 level." It seems to me the antithesis of statesmanship to do damage to and
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harass the middle class, people who constitute a vital element in our society. Taxing them at present rates really endangers our prosperity, because it is not an exaggeration to say that taxation is really taking the heart out of those to whom the country should be looking at this juncture for leadership and initiative. To ease their burdens would really help the whole nation as well as helping people who, I think, deserve help in their personal capacities.
I think the matter was well put recently in a letter to The Times which, speaking of the middle classes, says:
"They are no longer able to command the goods and services which make life something more than alternating periods of work, either at home or the office, and sleep. Papering the bedrooms can be a pleasant change but other things in life seem more worth while. Promotion is a diminishing reward and so incentive diminishes. It is more profitable to send one's wife to work or take evening work oneself than to aspire to greater responsibility. This is certainly the situation among clerks in the Civil Service and will extend into higher grades."
I have no reason to think that there is anything overstated or inaccurate in that letter, and it does reveal a state of affairs which must be an unfortunate reaction upon the nation at large. When the noble Earl, Lord Munster, replies to this debate, I hope he will be able to say something about the possibility in future Budgets of giving some relief also in the matter of allowances for children's education.
The middle classes deserve a much better advocate than myself. I have tried to put a part, though a very small part, of their case to the best of my ability whilst emphasising that what is at issue is more than their hardships; it is the harm which is being done to the nation and, as I believe, the trouble lying up in store for the nation by this neglect of an all-important body of people. If the noble Earl will be referring to this point in his reply, may I remind him that the President of the Board of Trade has acknowledged that the middle classes have not shared in the general prosperity of the country. He used these words: "rather the reverse". A Conservative speaker said that his greatest regret about the Budget was that
"nothing is to be done about the middle class. It is upon the skill and technical knowledge of the middle class that we depend. These men are leaving the country in large numbers."

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I would remind the noble Earl of these two statements. I hope that he will interest himself in the matter and represent to the Chancellor of the Exchequer the fact that strong feeling exists about past neglect of the middle classes.
3.22 p.m.
LORD GRANTCHESTER: My Lords, since the last debate in your Lordships' House in March credit is due to Her Majesty's Government for the manner in which they have highlighted the value and importance of savings and given some encouragement to the small saver. We have also had, I think, two welcome admissions from Her Majesty's Government. The first is that their expenditure must be reduced, and the second that to achieve this some changes of policy will be necessary, to which thought is being given. We shall be impatient to hear more on this subject at an early date. I would suggest that in their search for possible economies, the feasibility of a common defence budget for the N.A.T.O. countries might be explored with advantage. But, I still feel that there is no real sense of the urgency of the task of cutting expenditure, or that no real sense of the urgency of cutting expenditure has penetrated as far as our great spending Departments. Nor has the magnitude of the task which is necessary been grasped. The noble Lord, Lord Coleraine, mentioned it, but I should like to keep on saying that the excess of expenditure over what is safe is something like 10 per cent. of the national income. That is the measure of the target for cutting expenditure. It is a truly formidable figure.
Nearly a year ago Her Majesty's Government asked the banks to cut their advances by 10 per cent. as a start. This has almost been achieved. Why do they set themselves a target of only 2 per cent. and then allow themselves to get a year behind in making a start? This matter of cutting expenditure is vital for our survival as a great Power. More than that, it is vital for our survival as any sort of Power at all. It is not possible to bottle up enterprise indefinitely. It will inevitably be drawn where it is less fettered and where reward is more commensurate with effort. I should like to reinforce what the noble Lord, Lord Winster, has just said about the shipping industry. They have put their case clearly
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and given a plain warning that—and these are the words they used:
"Decline and slow extinction is inevitable if taxation continues at a level which prohibits the replacement of ships out of profits."
The shipping industry is a favoured industry, for it still has the benefit of investment allowances. This same replacement difficulty and fear haunts every industry which has to compete with nations where taxation is less than it is here. Vitality is being sapped from our industries by the burden of taxation.
I have referred previously to the method of the taxation of overseas sub-sidiaries which here bear both distributed, and undistributed profits tax. I have also drawn attention on more than one occasion to the provisions of the Finance Act, 1951, which forbids the transfer of control of a company abroad without prior permission from the Treasury. There are no clear rules as to what will be permitted. Discretionary powers are usually undesirable, and they always create uncertainty. I want to go further than the noble Lord, Lord Winster, and ask Her Majesty's Government whether they do not consider that the time has come when this Act should be modified to permit the free movement of the control of British companies at least within the Commonwealth and British territories. The consequence of these restrictions under the Finance Act of 1951 is that many new businesses have been registered overseas on the initiative of British citizens without any formal ties or associations with this country, which would be preferable.
If I may refer to the topical question of premium bonds, some have suggested that the introduction of these premium bonds will undermine the morale of the country. I am not nearly so frightened of the effects of the bonds as of the demoralising effect of the discriminatory taxation which is directed against the most enterprising and against those who carry the greatest burdens of responsibility in industry. Dependence on premium bonds, I agree with the noble Lord, Lord Winster, may not be very dignified for the British Government—but that is another matter.
I recall a scheme which I was asked to consider for a company which was anxious to issue some debenture bonds for the purpose of encouraging members

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of its staff to invest in the company in which they were working. By holding debenture bonds, they would have a secured financial interest in the company. It was proposed that these debenture bonds should carry a low rate of interest. Drawings were to take place periodically, and they were to be redeemed at a substantial premium, not of course comparable in size with the prizes offered by the new premium bonds. However, the company were legally advised that such a scheme contravened the Lotteries Acts. I believe that there was quite as good a motive behind this scheme and that it would have served just as good an economic purpose as the Government scheme—perhaps better. This particular item in the Budget would have been, I suggest, better dealt with in a separate Bill, when matters like this should have been raised. I do not like the idea of the Government setting themselves above the law which is applicable to private citizens in a matter like this. While on the subject of the bonds, I should like to ask what the administrative costs are likely to be. I suppose the scheme will require an expensive building. Is commission to be paid on the sale of the bonds? Are the costs to be deducted from the prizes?
When we come to a question of undermining morale, I think one of the worst factors is the feeling which most enterprising individuals have and which those who direct our most "go-ahead" corporations feel to-day—namely, that the State is their enemy and not their protector. Her Majesty's Government have introduced tax-free benefit as prizes for the premium bonds. Whether they introduce tax-free benefits on premium bonds or have to make a tax-free offer to get a chairman for a public service, they realise clearly that what matters to the individual is his net reward for his work. It was right first to raise the net incomes of the small income group, but to leave those on whom industry depends—those people to whom the noble Lord, Lord Winster, has just referred—still surcharged at a pre-war level of value is overstraining their patience. Attempts to derive some kind of benefit, even if it is not of a very desirable nature, are undermining the character and the privacy of the home. There is no more
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absurd result than a state of affairs in which those who direct our great industries live in straitened circumstances in their homes, compared with their prewar method of living, and in comparative luxury when they are on business or attending conferences. This evil has spread now to Government Departments, all of whom expect a free conference arranged for them in lieu of a holiday for which they would normally have paid.
My Lords, it would be churlish not to acknowledge that the Government have done something in the relief given to the self-employed in the matter of deferred annuities, but I should like to ask the noble Earl, Lord Munster, to consider one point in connection with this matter and to elucidate another. Many in this category of self-employed persons have already taken out endowment assurances, some with the intention of converting the sum assured on maturity into an annuity. It is serving no useful purpose to tempt these policy-holders to discontinue their existing policies in favour of a new type of contract on which greater tax concessions are offered. I suggest that this risk might be obviated if the margin between the concession allowed on existing policies and on the new contracts were narrowed slightly. I should like to ask the noble Earl to consider whether he would lend his support to making the allowance on life and endowment insurance premiums, one half the rate of tax payable and not to distinguish between income tax and surtax—to allow it for both, as is intended in the new form of contract for a deferred annuity. Incidentally, this used to be the rate that was allowed, and it is rather less than the rate suggested by some of the members of the Tucker Committee.
As a director of an insurance company I should, as is customary, declare my interest, as well as my concern, in this matter. The point which I should like elucidated is this. The incomes of the self-employed are apt to vary very considerably from year to year. Where the premium is fixed on the basis of one year's current income, which may be followed by a fall in a subsequent year, can the part of the premium upon which no allowance can be claimed in the year when the income falls be carried forward to a subsequent year when the income may rise again? In other words, can

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claims be made on the basis of an average income over a period of years? This concession is limited to the self-employed and to a premium of £500 a year. I am afraid that in this matter I feel, as I did when I listened to the Chancellor of the Exchequer expressing his determination to continue to chase a surtax payer for tax on £15 of interest in a savings bank, that Her Majesty's Government show regrettable class consciousness. I should like to see the principle of equality before the law maintained whatever the income of an individual. Cannot Ministers make an effort to rid the minds of the officials who advise them of the antipathy which they always seem to show to profits and to the higher earnings upon which the welfare of this country depends? I cannot credit Conservative Ministers with a desire to kill the goose that lays the golden egg, or to drive it out of the country; but that will be the inevitable result of the maintenance of the existing level of taxation.
Nor, as the noble Lord, Lord Winster, has just said, can Ministers afford to go on ignoring the vast and increasing body of middle-class workers. They dislike the regimentation involved in having benefits, so-called, planned for them. They are too cramped and burdened to be able to arrange their lives for themselves and their families with the reasonable freedom of choice which their gross earnings entitle them to expect.
3.37 p.m.
LORD TEVIOT: My Lords, in view of the increased number of your Lordships who wish to address the House on this subject I have done my best to show consideration for the noble Earl who is going to reply and to curtail my remarks as far as possible. I am lucky, in a way, in that although I was going to speak on the first day, owing to the long list of speakers then I agreed to speak to-day, and so far no speaker has touched materially on the subjects I wish to put before your Lordships. First, I should like to congratulate the noble Lord, Lord Pethick-Lawrence, on the success of this, the third debate on this subject which he has raised in, I think, the last six months. I feel that this debate has been the most important because of the character of the speeches to which I have listened—I have been here the whole time. I think that noble Lords have
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really got down to brass tacks and have made some most material and constructive suggestions. In his reply to the debate on the first day my noble friend Lord Selkirk seemed to paint a brighter picture than have some of your Lordships, but then he proceeded to paint a picture which was not nearly so bright and which, I thought, countered what he had already said.
It is no use saying that the position is not serious. We have heard quite definitely on more than one occasion from the Prime Minister and from the Chancellor of the Exchequer that the situation is serious—I mentioned this point, I think, the other day when I was discussing the coal situation. I thought that Lord Lucas of Chilworth was "hauled over the coals" for being gloomy. He had every reason to be gloomy; anybody who faces up to the situation is gloomy, particularly noble Lords who are connected with business. Yesterday afternoon I sat on a Board for three hours, and what was worrying us was the appalling price that we have to pay to produce goods. We cannot produce them now at a price at which we can sell them in the markets of the world—and 66 per cent. of our business is export business. If we are in that position—and we are in that position, and noble Lords are perfectly well aware of it why should we not paint the picture as it really is, and not try to make things appear better than they really are? We must drive into the minds of everybody, in all walks of life in the country, the seriousness of the position. Unless we are able to do that, I am afraid our situation will go from bad to worse.
I was in agreement with what the noble Lord, Lord Cherwell, said; and although I am not going to follow the noble Lord, Lord Winster, on the subject of the most reverend Primate and premium bonds, I agree with what he said on that particular subject. I was particularly interested in the very able speech of my noble friend Lord Coleraine. I thought he was going to get "bang-on" to the subject which I was saving up for your Lordships to-day; he nearly got there but not quite, for which I am most grateful to him.
As I have said, in this debate we really have got down to brass tacks and there have been some interesting and constructive suggestions. I, like your Lordships,

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have noticed that it seems to have become the habit in this country to think that the Budget can cure almost all our economic troubles. I do not think that is the case and I cannot see that it ever could be the case. Therefore I propose to discuss the pros and cons of that idea. What we do know is that since the Budget has been used to determine the economic policy of this country, the total Budget figure goes up year by year. Noble Lords are aware that in the last ten years it has gone up £1,000 million. It went up £200 million last year and £200 million the year before, so that whereas ten years ago it was £4,000 million it is now over £5,000 million, which the Chancellor expects to collect from various revenues. We have got to stop this. If we do not stop it, in my view we are finished. I am going to make suggestions as to how, by explaining the situation most clearly to everyone, we may be able to prevent the continuance of this rise every year in the Budget.
My noble friend Lord Coleraine rather suggested that public expenditure amounted to about 30 per cent. of the total national income. I cannot quite agree with that; I make it out to be 40 to 45 per cent., and I base my calculation on the fact that we have this figure of over £5,000 million and the total national income is £12,500 million. I make that roughly 40 per cent. to 50 per cent. That cannot be disputed by anybody. Mr. Colin Clark, the well-known economist, is of the opinion that it is dangerous that public expenditure should rise in peace time above 25 per cent. of the national income. The noble Lord, Lord Coleraine, agrees that it is a good deal higher than that, and I think it is higher than he said it was. If this is true, are we not working in the wrong direction in that we are spending more and more instead of spending less and less? Surely this must be the logical conclusion to which one has to come. I am afraid there is nothing in this Budget which tends to correct this tendency.
Here I come to the main point, and it is this: should not the determining factor in regard to our economic policy be simply our prices in the world's markets? That is all; that should be the determining factor in the whole of our economic policy. In fact, I go so far as
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to say that economic needs must be geared to these world prices. There must be a cutting back on all wages which tend to raise prices. We are now in some cases cutting back labour to four days. We have a warning in the motor trade, and I can see plenty of warnings all over the country that the same thing is likely to happen. This has been forced upon us because the present wages and taxation policies mean inflation. We are faced with the need to build up our export trade in a buyers' market. That is what we are trying to do to-day. Organised labour, on the other hand, is fixing wage rates by exploiting conditions of a sellers' market for labour, which is a completely contradictory policy. So far as I can make out, those are facts that we cannot ignore, and I hope that what I have said will sink into the minds of the powers that be and that something will be done about this matter—because it has to be done, and soon. Falling sales at too high prices must inevitably result in unemployment. It is bound to. If this occurs, the sellers' market for labour will end, wages will begin to fall and we shall be facing an era of industrial strife, which none of us wants to see. There is enough of it already. That is the danger that I see ahead.
If these consequences are to be avoided definite steps must be taken—and now. Not long ago I raised the question of coal and of the manpower in our coal industry. Your Lordships will no doubt remember that debate. The position has become far worse since I raised that question. The noble Lord who is going to reply to this debate agreed that if my suggestion could be carried out, we should save £100 million a year; and that is so. Let us get on with doing something, instead of saying these things and then doing nothing. I should like to see far greater energy on the part of those who have our affairs in hand. We must realise that, with the present high taxation, the cost is bound to go on to the overheads of our industries and to raise prices. It seems to me that what is needed is a national wages policy, which ought to be hammered out by Her Majesty's Government, the T.U.C., representatives of employers, the Association of Chambers of Commerce and the F.B.I. The terms of reference should be nothing less than the question of world prices. The basis of our present prices

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is wages, taxation, cost of materials, coal, electricity, gas and transport. I do not know what one would call such an organisation, but no doubt some noble Lords opposite will remember that many years ago (I was then in the other place) Mr. Ramsay MacDonald suggested that there should be a national council to assist the Government when the Government were in distress of any kind. I believe that a council such as I suggest would to-day be able to carry the whole nation, eliminating Party feeling altogether.
There is just one other matter which we must consider, I am told—and I believe there is no doubt whatever about it—that we are not ploughing back sufficient to replace capital machinery and development. I understand that in Russia they are ploughing back 25 per cent. of their national income; in Germany, 15 per cent. of the national income is being ploughed back; and in the United States of America, 10 per cent. But our figure is only 6 per cent. Somehow or other we have to rectify that situation. I, and no doubt many of your Lordships, know that a very large number of our industries are a long way short of efficient, up-to-date machinery to compete with other nations in the markets of the world. The sooner we get at this problem the better. To compete successfully in world markets, and to lower production costs to enable us to do so, there must be either a substantial increase in the volume of production without increased cost or a reduction in personal incomes all round. While effective demand in the home market exceeds available supply, prices must continue to rise and inflationary pressure to increase. This is not the fault of the Chancellor of the Exchequer, for the problem, so far as I can see, is one which cannot be solved by budgetary policy. It must be done in the kind of way that I suggest——by studying prices in the markets of the world so that we can work and produce at prices that will enable us to compete in those markets as we always have done.
We have been told by successive Chancellors of the Exchequer that we are losing our trade position in world markets. That is a serious enough statement coming from that source, and I beg that these matters to which I have referred should be carefully considered and that some such body as I suggest should immediately be set up. We must get prices
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lower here, and we must be able to explain to all those working in factories and everywhere else that, although wages, taxation and so on, may appear to be dealt with detrimentally, in the end lower prices will mean that the money in the pay packet will be worth more and that nobody will be worse off. I have rather exceeded the time which I intended to take, but I strongly urge Her Majesty's Government to do something on the lines I have suggested, and to do it now.
3.56 p.m.
THE EARL OF SELBORNE: My Lords, I do not propose to delay your Lordships long. We have had three very interesting speeches this afternoon and I find a general consensus of opinion throughout this debate, as indeed there is from every part of the country, on both the gravity of the problem and its nature. There is really little difference of opinion anywhere as to the nature of the problem and the remedy; but it is because every Government have lacked courage to implement what they are ready to agree to in conversation that we are in our present impasse. Everybody agrees that the only way to correct inflation is by increasing output, reducing consumption, and achieving greater saving.
Now I reflect that mankind is divided into two categories: those who know how to save money and those who do not; and for The sake of brevity we call the former category "the rich" and the latter category "the poor." During the last twenty years and more, all previous Chancellors of the Exchequer and all Governments have been doing everything they can to weight the scales of legislation in favour of "the poor." This policy is advocated and defended on the ground of what is called social justice. I have never understood where the word "justice" comes in. Any Government can take money from Peter and give it to Paul, but the idea that that should be just seems to me a non sequitur. It can only emanate from the hypothesis that by this means we can correct the grave error which was made by the Almighty when he created some men much more capable than others.
I want, for a moment, to examine that diminishing and almost extinct category, the so-called "rich." The rich are divided into two sub-categories, one of whom inherit their wealth, and the other

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of whom have been endowed with the gift of creating wealth and making money. I should like to ask my noble friends on the Front Bench what inducement they find in this Budget to save. I do not expect them to give me a reply because the question is a very tactless one. But I venture to say that neither they nor any other Minister in this House can save. It is not physically possible for a man who has inherited property to save, if that property is to be properly maintained. And if he does save any money it is merely taken off his heirs at his death in death duties. The effect in practice of death duties is one gigantic process of dissipation of the savings of past generations. I suggest that the Chancellor of the Exchequer has no moral right to urge people to save when he, himself, is spending the savings of past generations as if they were income.
The whole emphasis of legislation over many years now has been in favour of the dissipation of savings. Income from investments is officially described as "unearned income", as if there were something disreputable about it. This question-begging phrase which was invented by the late Earl Lloyd-George is symptomatic of the modern attitude towards saving. I suggest to the Chancellor of the Exchequer that the official description of income from investments might be changed to "savings income". That, at any rate, would show that the practice of saving was no longer frowned upon officially. If the Chancellor of the Exchequer really wishes to increase saving the first step he should take is to reduce death duties, a system of taxation which is spending capital as if it were income.
The second sub-category of the so-called "rich" people are those whose natural gifts enable them to earn big incomes. But what inducement have they to do so? Our legislation seems to be framed in defiance of the fact that some men are a great deal cleverer than others. There are a good many men in this country who earn more than £5,000 a year, but the law does not allow them to do so. Directly a man's income reaches £5,000, the amount of taxation becomes so heavy that he has every discouragement against adding to it. Therefore it is a fact that many of our ablest business men are not pulling their full weight because they feel it is
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unjust that they should exert themselves and take risks if the Government are going to take eighteen shillings out of every pound they succeed in making. It is this sense of injustice, this sense of resentment, that, as noble Lords have said this afternoon, is a great drag on the output of this country.
The noble Lord, Lord Pethick-Lawrence, in his interesting speech on Wednesday, accused businessmen in the City of London of tax evasion, or rather tax avoidance, though he did not give chapter and verse or, indeed, any evidence in favour of that assertion. I can tell him how a great deal of tax is avoided in the City of London, and that is by people declining to work. It is becoming increasingly difficult to get first-class men to join fresh boards or take on further responsibilities. I have had much personal experience of that myself and I can testify that the reply one is too often met with is: "My dear fellow, why should I take on this extra work in order to earn one shilling in the pound of the income you are willing to pay me?" Such taxation is obvious insanity from a national point of view.
I notice that, in this Budget, the Chancellor of the Exchequer is making a special attack on those men who are in a position to find markets for British exports. There is no class of company which has assisted exports more than those companies which have factories or railways or mines overseas; and in the properties of those companies, if you go there, you will find British machinery. if you go to neighbouring railways or mines or other properties which are run by other nations you will find foreign machinery. The two go together. The Chancellor of the Exchequer, I suppose in worship of the goddess of social justice, is apparently going out of his way, in this Budget, to increase the taxation of those who are in that particular form of business. I suggest that it is no good trying to correct inequalities of nature or of opportunity by penal legislation. You will only damage the national interest if you do so.
I think the noble Lord, Lord Teviot, and other noble Lords this afternoon, have rather criticised trade unions for their wage claims, and charged them with being responsible for inflation. I cannot follow my noble friends there. It appears

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to me that the right of the trade unionist to ask for better wages or better terms for his labour is an absolutely inherent right in a free economy. And what we have seen happening during the last few years, to my mind, is not so much a cause of inflation as an effect of inflation. But we must, of course, recognise the grave national dislocation that results from the activities of nation-wide organisations. A strike in a particular factory is one matter, a quarrel between an employer and his employees—that is part, as it were, of the everyday life in the bargaining process of a free economy. But when you have a dispute in one factory which leads to a national stoppage because the network of organisation is spread all over the island, then it seems to me that a new situation has arisen. I just drop this thought—and it is not in the least original—that if the State, as the State is now doing, is seeking to prevent nation-wide organisations of employers on the ground that they constitute a monopoly, does it not follow that the State must also have regard to the effects on the national economy of nation-wide organisations of employees?
The real fundamental cause of our troubles, as everybody agrees, is excessive Government expenditure and, therefore, excessive taxation. Our present scale of taxation is incompatible with the maintenance of a free economy, and the fence at which we are all boggling is where to cut it down. Everybody has his own particular enthusiasm, which must not be touched. There are also certain flags which must not be hauled down. But we shall have to tackle this problem resolutely. The noble Lord, Lord Lucas of Chilworth, wants to cut down on national defence. To my mind, that is the last thing on which we ought to cut clown, because unless we can be safe, we cannot be prosperous. Of course I entirely agree with the noble Lord that there is a great deal of extravagance and waste in all the Fighting Services, and certainly that ought to be cut down. But I find this extravagance and waste of money in all State services, whether they are Fighting Services or nationalised industries. I recall how, when the railways were nationalised, in our little wayside stations, which used to be manned by one stationmaster-cum-ticket collector-cum-porter—a staff of one, who had been there for "donkey's years"—we immediately had a stationmaster
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and two porters. The inevitable result happened after a few years the transport authority declared that that station or line was no longer economic, and it was shut down. That is typical of what has been happening in several of the nationalised industries. It is not a vice particular to the Navy, the Army and the Air Force; it is a vice common to every organisation where those who spend the money are spending not their own money but the taxpayers' money.
I know that I shall be unpopular in every quarter of the House, and particularly with my next-door-neighbour, in doing so, but I would suggest that we cut down on education. It seems to me that we arc spending far more money on education than we are getting value for. I have not added up the figures, but noble Lords know that during this century we have spent thousands and thousands of millions on our educational system, and I ask myself: can any advance in national culture be seen? Whether we look at the newspapers, at the theatres or at the crime statistics, there seems to be no appreciable advance. I do not see what we have got for our money. It is also the case, surely, that we are now educating a large number of people whose gifts are in their hands, rather than in their heads, and we are injuring the potential craftsmanship of many boys and girls by keeping them at school when they would be much happier and much more useful citizens apprenticed in an industry. Craftsmanship can be learned only when comparatively young, and in keeping boys whose gifts appear, as I have said, to be in their hands, rather than in their heads, compulsorily at school up to the age of sixteen, I believe that we are inflicting injury on them and on the nation.
I know that all this is heresy, but one of the privileges of being a Member of your Lordships' House is that of being allowed to talk heresy. It has often been the case that a so-called "heresy" preached in this House has afterwards been accepted as not so heretical after all. The noble Earl, Lord Attlee, when he was Prime Minister, admitted, when speaking of his own Party and his own Government (I hope that I am not misrepresenting him), that perhaps they had been trying to do too much too quickly. I think that that is true. I also think that they had been trying to do things we simply could not afford. The root of

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the trouble is that we have been trying to build houses, schools, hospitals and other things, all of which are in themselves desirable, when we could not afford them to that extent. In addition, we have made education into a fetish. We are giving many boys and girls education for which their gifts are not suited. We arc injuring their future craftsmanship. We are trying to turn out a nation of third-rate bank clerks instead of continuing to turn out what we have had in the past, the finest craftsmen in the world. I hope that the Chancellor of the Exchequer will look at all these matters afresh and that, when he has decided what requires to be done, he will have the courage to come forward and tell the people. If politicians had always done that we should have fewer problems to-day than now face us.
4.18 p.m.
LORD CHORLEY: My Lords, I hope the noble Earl will forgive me if I do not follow him. I have some difficulty in restraining my indignation because, even coming from him, I think his was one of the most reactionary speeches I have listened to since I had the honour of becoming a Member of your Lordships' House. I feel that if ever, by some mischance, the noble Earl had charge of the destinies of this country, the Communist revolution would be only just round the corner. Even the good points he made were made in such an extreme way that he destroyed his purpose. He suggested, for example, that the rich were as dead as the dodo, whereas only in the last few weeks in The Times we have seen case after case of wills of over £100,000 up to £1 million. There are more rich men in this country now than there were in the years before the war.
Like other noble Lords who have spoken this afternoon, I was unable to be present at the beginning of this debate last Wednesday. There was some misunderstanding about my name being on the list of speakers, and I must apologise to your Lordships. On that day I had an old-standing engagement connected with Civil Defence which kept me longer than I expected and prevented me from reaching your Lordships' House until the concluding stages of the first part of the debate. I have, however, read what was said on that occasion and, like the noble
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Lord, Lord Teviot, I found that by no means all the points that I wished to put before your Lordships were taken then, and I should like to put them forward this afternoon.
As I say, I read the debate with a great deal of care, and the matter that struck me more than anything else was a remark by the noble Lord, Lord Coleraine (col. 97), who considered that we are
"in greater danger to-day than we have ever been since the war."
What a confession to come from a leading Conservative politician after five years of Conservative government! Whether or not that note of extreme pessimism is justified—and, for my part, I think it goes too far—I agree entirely with the noble Lord that the situation is a difficult one and one of some danger. I wish that he could persuade his political friend the Chancellor of the Exchequer to strike a rather less facile rote of optimism than appeared to me to characterise his Budget speech—a note which was echoed, though perhaps not at the same level of enthusiasm, by the noble Earl who wound up the first day's debate in your Lordships' House. It is true that he agreed that the time had not yet come, as he said, for a "let up" on the measures against inflation, but he did not seem to be at all dissatisfied with them, such as they are, and, indeed, suggested that they are working excellently. It appears to me that few of your Lordships who have taken part in the debate agree with that view.
If those measures are working excellently, it certainly is not very obvious to the ordinary man. Indeed, the present Government and their predecessors, in my submission, have the unique record in the economic history of this country of having produced a serious inflationary situation in times of peace. I do not believe that that has ever occurred before, certainly since our economy took its present shape. Serious inflation has, in my reading of history, occurred only in time of war or during a period immediately succeeding war, which is almost as difficult a period. The inflationary difficulties which followed the Napoleonic Wars have been a locus classicus for the economic historian and the economist himself—and, incidentally, that was another period of predominantly Tory Government. But I venture to think that

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the present years will in due course provide the economic historian with an even more fruitful field of study.
It is fair to say that the cold war involves the continued withdrawal of a substantial part of the keenest and most energetic part of our young men from the labour forces of the country, and I agree with what my noble friend Lord Lucas of Chilworth said about the importance of getting a large part of these young men back into the industrial army. I am sure that it would pay us, even if it cost a little more in cash—which I very much doubt—to go back to our old, pre-war professional Army, a comparatively small force, if in that way we could get back these hundreds of thousands of young men into our industrial army to provide workers at the machines, which we need for the increase of our productivity, the importance of which has been emphasised by so many speakers both this afternoon and last week.
In addition to our being deprived of manpower, we have had this extremely heavy expenditure on rearmament, and that undoubtedly has been one of the most fruitful causes of inflation. But that situation was perfectly well known—it had developed as a result of the cold war—before the Conservative Government came into office, and it was well known to the Conservative leadership when they embarked on their electoral campaign in 1951. The promises which were then made, for the purpose of what I think can be described only as vote-catching, were definitely inflationary in character, and they were followed by an actively inflationary policy by the Government when they came into power. I am thinking particularly of the way the planning arrangements and the methods of financial and economic control and direction which had been laboriously built up by the preceding Government were all scrapped and thrown overboard. In parenthesis, I might say that the 1955 pre-Election Budget was even more inflationary. The diminution in income tax, much as we all appreciated it, put large sums of money at the disposal of people who were only too ready to spend it, and it was followed by an outburst of spending which was a large factor in the crisis which followed in the autumn.
I believe that the leading example of this short-sighted policy is provided by
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the building industry. Not only was local authority housing stepped up to a point which, considering the precarious balance of the overall situation at the time when the Government came into power in 1951, was definitely dangerous, but controls over luxury building and over private building generally were quickly abandoned. I do not think there can be any doubt that this has been one of the most important causes of the present inflation, and it has not received anything like the amount of attention which it deserves. Wages increases, which have been referred to constantly through out this debate, are, of course, more spectacular and much better copy for the newspapers. But with over 1 million men employed in the building industry, it is—if one puts retailing on one side, and that, after all, is not an industry in the ordinary sense—the most heavily staffed of all the industries in the country, and throughout 1955 it was still expanding. In my view, this shows a thoroughly unhealthy situation. The industry over the last years has been competing for labour with the export industries; its wage structure is not at all satisfactory; and, generally speaking, it is a focal point of inflation for which the Government, in the light of their 1951 Election policy, must accept full responsibility. This is only one result of the abandonment of planning.
I am surprised that there has been so little reference to planning during the course of this debate. The noble Lord, Lord Coleraine, referred to it in a short sentence of disparagement, and the noble Lord, Lord Cherwell, praised it—but, of course, quite unintentionally. I entirely agree with what the noble Lord said about the nation being like a family and having to live within its means. That is an old but still, I believe, apposite analogy. And the noble Lord went on to describe how this is done in a typical family by planning expenditure as against resources. The implication, of course, was that planning is equally necessary on. the national level, although, in fact, he never got to the stage when he made that point explicit in his argument; indeed, it seemed to me that he went off shortly afterwards and contradicted the earlier thesis of his speech when he contended that those occupied with industry ought to be left completely free to conduct their business in whatever way appeared to them to be right. It is my view that for

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a country like ours, if we are to keep our heads above water in the modern world, the old laissez faire policy which appealed so intently to the noble Lord who has just left the Chamber is completely out-dated.
In the old days a very rich man did not have to plan his family expenditure; he had such a lot of money that he could buy anything, objects or services, that appealed to him. While we were the leaders of the Industrial Revolution and the whole world was open to us for our export trade as a market for our industries, we were no doubt in the same sort of position. But the situation now, as everyone appreciates, is completely different. We are a small country with comparatively straitened resources, contending against many larger and stronger countries. The raw materials which we need become scarcer; finance for our industry becomes more difficult; labour, as the noble Earl, Lord Selkirk, said in his speech, is also more and more difficult to get—indeed, the conditions under which we carry on business are tighter everywhere.
This country is like a garden which has to be cultivated up to something like 100 per cent. of its capacity. Not only have the plots under the different crops to be carefully calculated out and planned in advance, but the ranker and coarser crops have to be prevented from crowding out the less strong ones which may be of equal, or even greater, value. Yet that is emphatically what we have not been doing over these last years. Referring to what was said by the noble Viscount, Lord Hailsham, we have, for example, allowed an enormous gambling industry to grow up in this country making substantial demands on the manpower which should be available for industry. That is just one example of the sort of thing which happens under this "come-as-you-please" type of laissez faire policy. If the Chancellor of the Exchequer will leave his own garden alone for twelve months, he will find that by the end of that time the coarse weeds will have crowded out everything of value in his garden. It is exactly the same, in my submission, with the national economy, when all are left to work for their own private advantage without any sort of oversight or direction on behalf of the community.
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It would be possible to elaborate this point at substantial length, but I will content myself with one illustration, typical. I think, of the sort of thing that happens under this absence of planning. This illustration again, appositely enough, is taken from the building industry. During the last few weeks there have appeared in The Times—and your Lordships will have seen them—letters from important industrialists in the heavy industries complaining of the shortage, or an imminent shortage, of steel which is going to be a serious thing. Other correspondents referred to the heavy demands made for structural steel in the building industry, and pointed out that, because of the absence of planning (which is what it comes to), something like 25 per cent. of steel is being wasted in our present constructional methods because we are not up to date and are not using the measures adopted by the United States and Russia. That, I suggest, is typical of what happens under this absence of planning.
I ought perhaps to give the Government some credit for what is called the "credit squeeze," which is, of course, a form of control and can be usefully employed for the purposes of enforcing planning policies. It was used a great deal by the Labour Government, and I had the interest to look up the debate on the Address in your Lordships' House in November, 1951, in which, in effect, the Government of the time announced that they proposed to make use of the old-fashioned methods of increasing the bank rate arid that sort of thing, and to give up the methods of credit control which had been used by the previous Government. I remember the noble Lord, Lord Balfour of Burleigh, saying that we were "oiling up the old machinery." I took the opportunity then of saying that perhaps this would not work so well as was expected; and, of course, it has not. It is a hit-and-miss method which hits the most useful project just as much as it hits the extravagant private individual who wishes to build himself a large house, or whatever it may be. That is exactly what has happened. The Government have found it necessary to introduce this credit squeeze, which is really just a return to the method of relying on the sense of the banks to control the output of credit. I only wish that the Government could have gone further and been rather more

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explicit in the directions which they issued to the bankers telling them what ought to be encouraged and what ought to be discouraged.
I have taken rather longer than I had intended in bringing home to the Government the basic responsibility, as I see it, for the inflation under which we suffer. I should now like to turn, just for a minute or two, to an examination of some of the remedies which are proposed, and I shall just make two points. The first is saving, which is the main plank in the present Budget platform. My noble friend Lord Pethick-Lawrence welcomed this step—as, of course, we all do; but it is not a very realistic policy without a much stronger guarantee against inflation than is provided by anything contained in the present Budget. Anybody who has been saving during these last years (and I speak with a great deal of knowledge in this matter as a university teacher who has just reached the point of receiving back, so to speak, the premiums on his life insurances) has lost more than half of his savings, and there is no sort of guarantee in the present Budget that that situation will not continue. I listened to the Chancellor of the Exchequer's Budget speech, which as a piece of oratory was admirable, and I listened with growing hope as he developed his argument that savings must be encouraged by providing a security which would not melt away under the hot sun of inflation. But when the acid test came, and he unfolded his proposals, they came to nothing more than a proposal to increase the interest rate. He provided no sort of guarantee that the new Savings Certificates will not lose their value, in terms of the cost of living over the next years, just as the old ones have done.
I endorse the tribute which was paid by the noble Earl, Lord Selkirk, to the noble Lord, Lord Mackintosh of Halifax, for the enormous amount of work which he puts into the Savings Movement, but I must say that he has my commiseration in having to fight continually against the inflation which does so much to prevent his success. A few clays after the Budget speech I heard two men in conversation in the Tube. What they said, I think, expresses this point very appositely. One of them was telling the other that he had just received his £100
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bonus. The other man said, "What are you going to do with it, Bill?" He said, "I think my television is a bit out of date so I shall buy a new one." The first man said, "Your daughter Mildred is going to be married quite soon. Do you not think it would be better to put it into these new Savings Certificates, so that you will be ready to give her something when the marriage takes place?" "No," was the answer, "By the time she is married they will be worth only about 70 per cent. of what they are worth now." That is a view which is prevalent all over the country; and until the Government can provide a security which is proof against inflation, I think they will find that the saving plan will not go as well as they hope.
The other point concerns exports, and this, of course, should be the obverse of the medal. Its importance has been emphasised by many speakers who have taken part in the debate. What is the Government's policy here? There was a singular lack of any sort of constructive policy, so far as I could find, in the Budget speech. We are apparently to live on in the hope that the shrinkage of home demand under the policy adopted will eventually result in an expansion of our export trade. I suggest that something more dynamic than that is needed—a constructive policy to foster trade with those parts of the world where there are real possibilities of development. We should all, of course, like to increase our trade with the United States of America, but I am inclined to agree with what the noble Lord, Lord Lucas of Chilworth, said: that we cannot push expansion very much further there. The Americans can manufacture all strong and big lines as cheaply and efficiently as we can. It is only the small odd lines, like the Rolls Royce (if one dare call it so), or the M.G., which can get an opening there. The amount of trade in those sorts of lines is obviously limited.
So it seems to me that we must look elsewhere. If we study the map we shall see that by far the biggest area where we could get a great deal of trade is, the enormous area behind the Iron Curtain, stretching from the Elbe to the China Seas. One of the most encouraging and satisfactory aspects of the recent visit of the leaders of the U.S.S.R. to this country was the proposals which they brought with them for a notable increase

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in trade between our country and theirs. I was sorry that in his speech the noble Lord, Lord Cherwell, rather sneered at this, and suggested that it was a mere 2 per cent. anyway and hardly worth bothering about. Actually, 2 per cent. of our total trade is a very substantial amount. I took the trouble to look at the figures of our export trade to the United States of America about which there has been so much discussion. That is only some 2 per cent. of our export trade. It was pointed out by the noble Lord, Lord Rochdale, that that is more than our exports to Canada, so that 2 per cent. is a substantial amount and certainly ought not to be sneered at. A good business man does not neglect a customer, even if his business is very small. I would congratulate the Prime Minister on the progressive attitude he adopted to this offer. I hope that every effort will be made to secure the 2 per cent. and to build it up into a larger amount still.
Let us also extend our effort to China, which is still a good customer of ours and, of course, in the past, has been a very much better one. It seems to me that here lies the most promising road leading out of the difficulties which have been emphasised so much during this debate—in establishing betterrelations with the Communist countries. A more peaceful world would undoubtedly reduce one of the worst sources of inflation, and a substantial increase in our exports to those countries would, undoubtedly and obviously, greatly improve our balance of trade. Therefore I trust that the Prime Minister will continue to work upon the lines of his recent policy of a rapprochement with the U.S.S.R. If that is done, it may well prove of very much greater value in our struggle for economic survival than all the Budgets of recent Chancellors of the Exchequer.
4.44 p.m.
VISCOUNT BRIDGEMAN: My Lords, I have seldom heard two speeches more poles apart than the speeches by the noble Earl, Lord Selborne, and the noble Lord, Lord Chorley, who has just sat down. It would be quite beyond my powers to debate them so I will merely say this: that I think the speech of my noble friend Lord Selborne, which was described by the last speaker as being completely reactionary, will not prove to
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be so when it is read in Hansard. If there is a point of disagreement in that the noble Lord, Lord Chorley, suggested that there was vice in being rich and it was wrong to provide incentives for the creation of wealth, then I would agree with my noble friend Lord Selborne. But the noble Lord, Lord Chorley, made some other points to which I will come back in a moment or two, if I may.
A little earlier in the year most of us had the experience of being asked by our friends outside Westminster what we thought the Chancellor of the Exchequer was going to do; then, a little later on, they asked what we thought of what the Chancellor had done. The interesting result of those conversations, to my mind, is the ideas we glean from our friends outside Westminster of what the Budget means to them or what they think are the powers which the Government can exercise through the Budget. This year it struck me that there was rather more misunderstanding than usual among the public on these matters.
In the first place, it seemed that a great many people saw the Budget itself quite out of context with the other measures which the Government had taken to deal with the present economic situation. The Budget itself, apart from the Budget Statement, deals only with taxation, and it is wrong, to my mind, to think of the Budget measures unless in the same context as things like the raising of the bank rate (which is never a matter for the Budget), or measures to deal with local authorities' borrowing (which are just as important as any of the things in the Budget but are quite separate from it, from a legislating point of view), or the credit squeeze (which officially is entirely unofficial), and the alteration in the rating structure. Perhaps later on we shall have a Bill to deal with rents. The Budget must be looked at, as I do not think it is looked at in the country, as part of a general plan which includes those other features.
The other point which struck me was the idea, which seemed to be far too prevalent, that the evils, if evils they are, in the present economic situation could all be put right by something which the Government could do or refrain from doing without any need for co-operation on the part of the unofficial world. I rather thought for one moment that the

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noble Lord, Lord Chorley, had that idea too. If so, I must respectfully disagree with him. As I see it, the fact of the matter is that only a national effort can put matters right. This idea, as expressed just now by the noble Lord, Lord Chorley, that it was for the Government to do these things, as if they were players in a football match while the rest of the population has grandstand seats and watched to see whether or not they succeeded, is, I think, in a way a legacy from Socialism.
LORD CHORLEY: But surely we agree that the Government should provide the leadership and the technical methods to be adopted?
VISCOUNT BRIDGEMAN: I quite agree that the Government should do what the noble Lord has just said; but what I said just now was that we could not succeed unaided by the national effort of people outside, which is not the same thing as the noble Lord attempted to put into my mouth. In one way that idea is a legacy from Socialist policies. It is a legacy in this way: that very often one felt—certainly we did on this side of the House—that Socialist Budgets, especially those introduced by the late Sir Stafford Cripps, were used not only for raising the correct amount of taxation but for making social changes which in themselves were not related to the need or otherwise for taxation. But I will not follow my noble friend Lord Selborne into the realms of a discussion on social justice.
Another factor which causes people outside to take that view is the use of phrases such as "The Government are committed to a policy of full employment." Of course, that is true. Both Governments have been committed to a policy of full employment, and I hope they will remain so. But that does not mean that the Government, because they are committed that policy, can therefore produce a state of full employment without assistance from the world outside, the world of employers and employed. So I think it most important that in the Budget speech my right honourable friend emphasised the degree of individual cooperation which was necessary. He expressed it chiefly by referring to the part which the saver has to play—and we are now glad to be able to record that the saver includes the self-employed man who can save enough money to get tax relief
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on his pension. This kind of free co-operation by the individual must be forthcoming unless one envisages a corporate State where everything that needs to be done is done by Government control, and a state of affairs in which we can isolate our national economy from the world economy. That might conceivably be the case if this were a country where that could be done; but everybody knows quite well that this is, the last country in the world where the national economy can be arranged without regard to what is happening outside.
By the same token, that is one of the reasons why we are going through a crisis now; it is one of the reasons why we are going through inflation, because inflation is not a thing peculiar to this country at the present time but is common in greater or less degree to all the countries in the world, or almost all of them, although it might be said that in this country we have had a larger dose of inflation than many countries. But unless the State takes over the responsibility for all our economic and commercial affairs, to make the policies work we are bound to rely, whatever Government is in power, on the co-operation of the people outside who are at work. I saw this point very well put in the magazine of an Australian bank, in an article referring to the Australian economic situation, which in many ways is not greatly different from the one we are experiencing here. It said:
"The government has tied its colours to the mast of 'voluntary restraint', and although it may have to impose some degree of persuasion or compulsion, there must be a large degree of 'voluntariness' if such a policy is to succeed."
I believe that is quite true here.
It is equally true, as Lord Chorley himself stated, that there must be proper and selective consideration by the Government of the expenditure which is to be undertaken, to make quite sure that in difficult times only the worthwhile expenditure is undertaken. I am bound to say that I cannot go the whole way with Lord Selborne in what he said about education. I would go so far as to say that at this time we ought to take more care that we are building up the technical requirements of industry in our educational establishments and that perhaps we might do that a little faster than we build up the places in the secondary modern schools. But it is perfectly true that at

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the moment there is a great deal of Government and local government expenditure which should be pruned a good deal if we are to avoid having to prune the expenditure which is going to create wealth. We are still suffering from that "starry-eyed" period after the war when the Socialists were in power—I am not sure that it would not have happened just the same if they had not been—when we all worked on a doctrine which I might describe shortly as "Nothing but the best is good enough for baby." This is an admirable time to call a halt all down the line in Government and local government expenditure.
Now we come to a third point which I have noticed in listening to people who talk to me about these things—namely, what the nature of the crisis really is; whether it is because we have too much money going about, or too little money, or not enough foreign money. The position seems to be slightly obscured, because the moment the credit squeeze was announced Government Departments and people of that sort hurried to get into their familiar fancy dress of Gladstonian Liberalism and to say, "We are spending far too much money now; we must spend a little less, and everything will at once be all right." And at intervals they have tried to dress up the Chancellor of the Exchequer, who is not a Gladstonian Liberal, in that fancy dress.
But any effort to put the situation right certainly cannot succeed if it becomes anything in the nature of a restrictive practice. After all, cutting spending just for the sake of cutting spending is not much more than a restrictive practice. Cutting unnecessary spending is quite a different thing, and should be looked upon as such. So we must be careful that we do not allow ourselves to mistake the cause of the crisis, which was not in itself that we had too much money and did not know what to do with it but rather, to my mind, that we did not create enough foreign exchange to buy from abroad those things which were necessary to support the amount of currency in circulation in this country. That is where the trouble lies; and that is where it will continue to lie unless the public themselves realise that it is only by their efforts that we can pull
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ourselves out of this danger. It will go on lying in that bed, whether we keep on with the present Government and present policies, or whether we have a Socialist Government and Lord Chorley's policies. Lord Winster mentioned—and I agree with a great deal that he said—that it will go on lying there as long as the people in this country think they can go on increasing the cost of production and still find foreign buyers to buy the things that they are producing. That is absolutely basic, and one cannot repeat it too often.
However much the Government have a policy for export, it will be no good unless there is some reason to suppose that the things which are produced for export sale can, in fact, be sold in foreign markets at a competitive price. All those who have connections with industry will agree with me when I say that for the last five years we have seen our profit margin soaked up by these increases in price. And it has now come to the point where our cost of labour and materials—which are largely the same thing—is so much greater than in other countries that it is no longer possible for us to quote a competitive price to the people who would have bought our goods four or five years ago, and who, indeed, would like to buy them now, if it were not that the goods were not value for money as compared with those obtainable from the Continent, from the United States, from behind the Iron Curtain, or even from the Japanese—though I am not suggesting that everything that the Japanese produce for export is value for money.
My Lords, that brings me, as it brought the noble Lord, Lord Chorley, to the question of exports. I am bound to say that I am just a little in agreement with Lord Chorley when he said, as I understood, that he wished something more dynamic had been said in the Budget speech about exports. I should have liked to hear a few more practical and constructive words said about this problem, which does not appear the same in practice as it does in theory. Some industries in this country have a stable home market which they can carry on in order to make a profit and cover their overheads. Believe me, those people who do what the country wants and go out for exports very often find, however

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shrewd their calculations, that in order to get into the market they have to do without their profits there and have to be content with the profits to be made from the "bread and butter" lines of home business.
Moreover, it is not as if exporters nowadays, as was once the case, can count on prompt payment in sterling in London. Any amount of export business can be had, as noble Lords beside me know quite well, if one is prepared to wait "until the cows come home" to be paid, or to take terms of payment which are not insurable under export credits and would not form the basis of an advance from any ordinary bank. I am sorry that my noble friend Lord Selkirk is not here. I do not think that, when he replied on the first day of this debate, he quite covered that point; but there comes a time when no exporter, if he is a man of ordinary sanity and common sense, can continue to export unless he feels reasonably certain of being paid at the proper time. I know that the Export Credits Guarantee Department have loosened their terms, and I know how greatly that has been appreciated by all those with whom I have come into contact. Even so, I very much doubt whether the present arrangements for credit insurance and advances to cover the cost of exports will meet the very difficult payment terms that exporters have to meet now. I feel that is a matter to which the Government must pay constant attention.
I do not want it to be thought that, in saying this, I am suggesting that exporters, who are there to do their job for this country, want "feather-bedding" or protection of that sort. But I am suggesting that in certain industries, particularly the heavy type of industry, conditions are now getting to such a point that it is not possible for exporters to finance exports on long-term credit to foreign Governments, especially in those cases (and there are so many of them now) where diplomacy, as well as commerce, enters into the payment terms. Sometimes an exporter is successful—or lucky—and obtains finance from the World Bank, though I cannot recall a case where a British exporter has obtained finance from the American Export-Import Bank, or from the new Finance Corporation. Neither the Export-
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Import Bank nor the World Bank, however, is domiciled in this country. Our contribution under the Colombo Plan is made not to finance goods but only for technical assistance. That, I think, has prevented a number of worthwhile exports from being sent to India and Ceylon, and it pained me rather to read, about a year ago, on one page of a financial paper the position as I have just explained it, and then to turn to the back and find that our export for the day to Ceylon was a highly skilled inspector of taxes who was going out to help the people of Ceylon to revise their tax system. Much good may it have done them!
The problem is not a simple one. Exporters do their best to compete against "phoney" prices, and here, in parenthesis, I would say that recently the German export prices seem to have come a good deal more into line with our own than they did at one time. We cannot compete against over-generous finance; still less can we compete against the constant rise of prices in basic materials, such as steel, which has just risen by 5 per cent. We in this country can compete in efficiency, and in service, but we can go on doing that only if we make the fullest use of the modern aids, now termed "automation" In this matter I entirely agree with what I understood the noble Lord, Lord Winster, to say: that the interests of employers and workers in this matter are almost entirely coincidental. I was reading the other day a paragraph out of the works magazine of a works with which I am connected. I know the man who wrote it: he is not a big man; he is a man who has worked for his living all his life. Speaking of the cost of living he wrote:
"Yet we know it can be brought down. It seems to us that we are reaching the stage when we must decide for one of two ways of doing it. Shall it be through two or three million unemployed idling about redundant factories? Or can we do it as free men, with worker, employer, shopkeeper and civil servant pulling their weight together?"
The man who wrote that in a works magazine deserves well of his country.
There is one step that I hope will result front the visit of our two Russian friends whom we recently entertained, and that is the disappearance of "Cocom". Lord Elibank is not here this afternoon, but I know that he will agree with me. If we can get the embargoes lifted there is

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a good deal of worthwhile trade that can be done with the Iron Curtain countries and China, with no real detriment to our defence affairs. I would remind the noble Lord, Lord Chorley, that, despite all the promises made, none of the Russian inquiries, so far as I know, has yet turned into an order, though I agree entirely with him in hoping that they may. But, my Lords, if we want to go forward, as we all do, on both sides of the House, with the plans for the Welfare State laid down at the end of the last war, and to go forward with them at the same pace, we must remember that we shall stand or fall in that effort according to the success we have in dealing with our foreign exchange position—in other words, our exports. There is no way round that, and no way round the proposition that our export policy cannot be successful unless we have a "new look" at home by all concerned with it. When we have done that, the rest, I think, will come right in its own time, always provided that matters are so arranged that private individuals can really save, and that public, nationalised and local government bodies really try to confine their expenditure to essentials.

BUSINESS OF THE HOUSE
THE CHANCELLOR OF THE DUCHY OF LANCASTER (THE EARL OF SELKIRK): My Lords, may I intervene to say that I understand it has been agreed that the Committee stage of the Clean Air Bill will be taken on May 30 instead of to-night. I think that is agreeable to your Lordships.

THE ECONOMIC SITUATION
5.6 p.m.
Debate resumed.
THE EARL OF HUNTINGDON: My Lords, as the noble Lord, Lord Winster, said, most of us are apt to begin our speeches with "At this late hour"; and at this late hour I will not keep your Lordships much longer. I have, however, a few remarks that I should like to make on this very important subject, and I should like to say that I am speaking for myself in supporting the Government in their scheme of premium bonds. I was very surprised to read the speech of the
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noble Viscount, Lord Hailsham, which might almost be called an attack on the most reverend Primate, the Lord Archbishop of Canterbury, because it seemed to be that the Archbishop was following a true Conservative line. He was wishing for the vast profits of the gambling industry to go to private enterprise. I, speaking from these Benches, would much rather that those profits went to the State to benefit us all; and for that reason I support what I regard as one of the most imaginative steps in the Budget, these premium bonds.
Like many other speakers, I do not look on gambling as necessarily evil, unless it is done in excess; in excess, yes, but not otherwise. My only fear about the scheme is that the prizes are not large enough. There is the very big competition of the football pools, the attractions of dog racing, horse racing and the different forms of gambling which are allowed and practised, and I am wondering whether these not very big prizes (which one is very unlikely to win) will be sufficient to attract the money for which the Government hope. However, I wish them well in their scheme.
What worries us all this afternoon is this problem of inflation. The noble Lord, Lord Cherwell, in his speech drew attention to what had happened in Germany after the 1914 war. I myself was in Germany, in Bavaria and in the Rhineland, just after that war, and I can assure your Lordships that the misery and the suffering of those people at that time were indescribable. The noble Lord, Lord Cherwell, said that some of them thought the situation worse than the war; and that is no exaggeration. I remember having to keep my English money in ten-shilling notes, cashing it as the time went on, otherwise I should have lost too much. On one occasion, having lost my felt hat, I remember going to buy a new one. The shopkeeper wanted to charge me something like 150,000 marks, and when I said, "I have not the money with me; I shall have to come back this afternoon," he told me, "I advise you not to do that, for the price will certainly be over 200,000 marks by then—the mark is going down at such a rate." I have heard it said that one could let inflation run and so pay off the internal debt. But I submit that the suffering which that would involve to people of fixed incomes, pensioners, and people with fixed salaries,

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or people who have not got strong unions, would be so dreadful that we ought not even to contemplate such a measure. What we in this country should suffer would be far worse than Germany ever suffered, because we are so dependent on our credit; on the value of the pound; on being the centre of the sterling bloc; on our invisible exports and banking. Once our currency was regarded as valueless, we should indeed be bankrupt and completely "down and out."
I always find the essence of all this financial business extremely complicated in detail, but I believe that the principles which lie behind it are simple. If I am wrong in my ideas I shall be grateful if any noble Lord will put me right. We find that people are not satisfied with what they can buy. Because they find living expensive, they push their wage claims, asking higher wages to meet the high prices. The manufacturer can meet those claims and put up wages because he can raise his prices; and so the circle goes on. What is happening is simple. Inevitably those with fixed salaries and fixed incomes, and pensioners, suffer; but the real danger, which has been emphasised by the noble Lord, Lord Teviot, and others, is of our losing our foreign exchange and not being able to sell our goods abroad. Already we are coming near to the point where we shall not be able to sell because our prices will be too high. We shall be unable to get foreign exchange and we shall be unable to compete in world markets. We must remember that to-day we, more than I suppose any country in the world, depend on selling abroad. It has always puzzled me why Germany, with roughly an equivalent population and equivalent land to ourselves, produces something like 80 per cent. of her food, while we produce something under 50 per cent. It is true that we import some of our food a little more cheaply, but that puts us at the mercy of exporters in other countries. One of the main things which we should do is to try to build up our own agricultural industry and food production.
Will the credit squeeze work? That is really the question before us. I do not think it will, and I do not think the Stock Exchange thinks it will. I do not find many noble Lords in this House who are confident that it will. I believe that
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it will not work because this spiral can be stopped only by means already suggested—that is, if considerable unemployment arises. And I do not believe that Her Majesty's Government contemplate (quite rightly) allowing this to happen, or of pushing things to such an extent that unemployment will be the factor bringing down wages. What else can the Government do? I feel that it would be an absolute waste of my time and of your Lordships' patience if I were to try to persuade Her Majesty's Government to adopt a policy of planning or controls. I do not see how a Conservative Government, elected, as they were, on a basis of "Set the people free," can possibly go in for a policy of thorough-going controls; so we shall have to leave that out. What is left? I am going to make only two suggestions.
One which might be of some benefit, would be for the Chancellor of the Exchequer to tax advertising. It seems to me perfectly ridiculous that, if we are suffering from inflation, from too few goods and too many people with too much money wanting to buy them in the home market, we should have this huge industry of advertising which is non-productive, producing nothing, and which puts up the cost of production and at the same time encourages people to do the one thing which we do not want them to do. Yet not only is advertising allowed as a trading expense but it is absolutely tax-free. I should like Her Majesty's Government to consider whether it is not possible to put a quite big tax on advertising. It is done in other countries. The French have the taxe d'affiche, or poster tax, and I do not see why there should not be an equivalent system worked here. I believe that it would be extremely beneficial. I admit this is a minor, though important, feature.
Then I should like to support the noble Lord, Lord Lucas of Chilworth, in that I believe a great deal could be done by looking into the expense of the Armed Forces. Fundamentally, by far the greatest economic waste is the bill for the Armed Forces—something like £1,500 million a year. Unpalatable and unpopular though the suggestion may be, I believe that this figure is very much on the high side. I know that it will be objected that we must have our defence against possible attack. It will be objected that we have big commitments abroad, in

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Malaya, Kenya, Cyprus, Germany and many other places; that we must have defences to look after our interests in order that this country may play in the world the part that it should. Knowing all that, I still believe that we have to review our policy in the light of our economy and consider whether we can afford not only to spend all this money but to waste these materials, very often materials going into new weapons which are obsolete before men can be trained to use them. Can we afford National Servicemen in the present quantity? Can we afford the labour and brains of those young men, at the moment when they are just maturing, when they are training to be useful people, taken on that scale into the Armed Forces?
I suggest that there are two ways of looking at this problem. One may go to the Service chiefs and say: "These are our commitments. We wish to fulfil them. This is the danger against which we must be defended. What will be needed, in money, men and materials, to meet these demands?" But there is a completely different and reverse way of looking at it. One can ask: What can this country economically spend? What can we afford in men, materials and money? Then let us work out our policy of defence and consider our foreign policy and commitments on that basis. I believe that we could cut down the expense bill very considerably, without necessarily allowing our position to deteriorate. We cannot really compete with the giants, with the U.S.A. and the U.S.S.R. We can play our part, but it is no good thinking that we can dominate the world as we did in the nineteenth century. These are unpalatable facts, but unless we face them I am afraid that we shall not cure this disease of inflation which, if it is allowed to continue, will lead to ruin. And I belive that we shall be more valuable as a world Power if we are solvent with fewer divisions, than if we have many divisions and are, in the end, bankrupt.
5.20 p.m.
LORD BARNBY: My Lords, the noble Earl who has just sat down has shown that he has no fear of risking unpopularity with the Press and with I.T.A. in suggesting that advertisements should be taxed. Those Members of your Lordships' House who, like myself, had the
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misfortune to be out of London last Wednesday, so that they could not attend the debate, will have had plenty of opportunity to read the speeches which were made on that occasion. For my part, I took great pleasure in reading the admirable speech of the noble Earl, Lord Selkirk, which I thought was a most illuminating and helpful survey of the debate as it had appeared to him.
I must admit that I, no doubt like others of your Lordships who for a couple of months in the early part of the year were at a distance from this country (I happened to be in North America), had expected that the situation as presented first by Mr. Butler and then by the present Chancellor of the Exchequer would require some more drastic measures than have appeared to the Chancellor to be adequate. It would have seemed, from that distance, from the analysis put before us, that it would have required something in the nature of a Geddes Axe. Then, again, one recalled the deflation of the 'thirties and one asked oneself what good would millions of unemployed and the tremendous decrease in the value of capital assets in the country have contributed. So one came to understand the remark of the noble Earl, Lord Selkirk, that the economy was actually in such a delicate balance that the Chancellor was compelled to be very reserved in the action he took. From that distance, however, it seemed that the anxiety of drastic action was quickly being deflated. The buoyancy of the retail trade and the analysis of the stock market gave encouragement to people to believe that things were less bad than, as Lord Teviot has said, they had been thought to be by many.
I would not suggest for a moment that I underestimate the gravity of the matters of which the noble Lord reminded us. During this debate some noble Lords have made speeches in the nature of a general reflection on the situation. Others have attacked the question of imports from the angle of the balance, and yet others have dealt with this subject with a special reference to exports. The noble Viscount, Lord Bridgeman, following Lord Chorley, put great emphasis on the difficulties and outlined various angles of export business. In the case of imports there is indeed much ground for perplexity. For instance, why should there be such generous allowances for films and tobacco while yet there is apparently great difficulty in

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assisting re-equipment by getting machinery from dollar-origin countries when it is based on a prototype not made in this country?
The noble Viscount, Lord Bridgeman, gave us a good indication of the problems which he feels beset the export trade. Others have laid emphasis on the expectation of the Government doing what is the obvious thing to do in the present difficult circumstances—that is, lessening expenditure. Now all those matters are matters in our own control, but there are others which are not in our own control, and I shall presume here to follow Lord Bridgeman and deal with one particular aspect of industry as it is affected by the General Agreement on Tariffs and Trade, or the contemplated I.T.C. This multilateral liberalisation of tariffs certainly is a desirable ideal, but there is a risk in their effect being uneven.
Also the effects of devaluation of currencies can make a heavy cut in effective tariff rates in hard-currency countries. Indeed, they can, as has happened in Canada, substantially annihilate modest rates previously in operation. These dislocations are intensified by the Ottawa Agreements. Illustrations similar in character are low-wage-cost Asiatic textiles coming into Britain and low-wage-cost textiles going into Canada. In both cases, the wage rates of the producing country are far below the wage rates of the receiving countries. Emphasis is being given to this in the depositions before the Ways and Means Committee of the House of Representatives by Mr. Roger Millikin and Mr. Spencer Love, who testified to the danger to United States industry, despite tariffs, arising from merchandise from low-wage-cost countries like Japan. Indeed this is recognised by the United Kingdom Government in its treatment of manufactured jute imports from India, where there is complete prohibition for entry into this country except by British Government agency. Thus the consuming public in the United Kingdom pays the necessary toll to maintain in business the highest cost producer in this country.
There is no such mercy for the Lancashire cotton manufacturers. It means that textiles call for special treatment. Ultimately it looks as though this will have to be recognised. After all, the
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textile industries, measured both by employment and by the value of the product, are very important to the economy. At some point wage rates between East and West will have to be related by special co-efficients. It would seem meanwhile that it is thought by Western Governments that the textile industry in this country is expendable and that it may be to the national advantage that employees in that industry should be diverted to other forms of export production. Indeed some 30,000 workers have gone out of the industry in the last twelve months. That is a substantial drain away from one industry.
The noble Earl, Lord Selborne, made a most interesting speech, and although Lord Chorley described it as very reactionary It would say that if noble Lords opposite or people anywhere in the country will take the trouble to read Lord Selborne's speech they will, if they are honest with themselves, admit that there was in it a considerable amount of sound logic which justifies contemplation. He made this particular point: that those British adventurers who go overseas and establish plants there do a great service to their country. I think there should be some more guidance as to the relative advantages of contributions to balance of payments from the earnings of British factories established overseas, as against a possible loss of exports from this country. Actually it would appear that a million dollars in repatriated dollars are equivalent to 5 per cent. profit on 20 million dollars' worth of exports. Mutiply that by several instances, and so it goes on. I cannot expect my noble friend who is to reply for the Government to make any comment on this matter, but I hope that he will take notice of the point and feel that there is some justification for our asking for more guidance from the Government on this subject. My noble friend Lord Selkirk has emphasised that the Government adhere to their policy of giving no assistance by way of subsidies. It is to be hoped that they will use their influence to stop the French from continuing to give export subsidies in their country, to the disadvantage of British industry and in disregard of their engagements under G.A.T.T.
I would ask your Lordships' indulgence to refer to two other points. The financing of nationalised industries from

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surpluses arising from taxation has been referred to several times in the debate and has been the subject of some interesting letters recently in The Times. I have a copy of one in my hand, written by Mr. Laurence Robson, who, like a good Liberal, expresses dismay at the proposal that the Government should so apply the money raised by taxation without the taxpayer having power to indicate his feelings about it. I suppose that this is a matter on which eminent economic authorities alone are justified in being heard. To the average lay taxpayer, like myself, that seems to be a dangerous precedent. There seems to be much that is applicable in the letter's suggestion that the taxpayer should have the privilege of subscribing his own name to the capital requirements of nationalised industry rather than having it done for him by the Government. I suppose they would want a Government guarantee. The Central Electricity Authority, of which I had the honour to be a member for twenty years, raised money without a Government guarantee, but, once nationalised, they had to have a Government guarantee, and I do not think the service is any better than it was.
I cannot sit down without referring to a point which has already been mentioned often. There is overwhelming support for the decision of the Chancellor of the Exchequer to issue premium bonds. Surely it is nonsense to deny the fact that everybody in Britain likes a "flutter." I consider that the suggestion that the Chancellor's proposal is going to do harm to the moral fibre of the nation is hypocrisy. For myself, I welcome this decision wholeheartedly. Like the noble Earl, Lord Huntingdon, I could wish that the State benefits or prizes, or whatever you like to call them, had been set much higher, and that the Chancellor of the Exchequer had with courage stated more emphatically that he was going to use civilian agencies for their distribution.
5.35 p.m.
LORD SALTER: My Lords, I propose to put such views as I have to put before your Lordships in the form of candid comments on points made in the debate. It is sometimes said that in this House candour is unduly subordinated to courtesy, but the noble Viscount, Lord Hailsham, has already shown in this
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debate that that is neither invariable nor inevitable. I think that in some respects we are less inhibited here than the Ministers and Members in another place, particularly in regard to such delicate, almost unmentionable, subjects as the future of the currency or over-full employment. Sometimes in another place there has been almost complete silence on such questions because of a consciousness of possible reactions of sensitive constituents or sensitive financiers. I shall try to benefit by these advantages. I shall follow the noble Viscount, Lord Hailsham, though in this as in other respects a long way behind; and on occasion I may even mention some unmentionables.
Once more the House is greatly indebted to the noble Lord, Lord Pethick-Lawrence, both for his initiative and for his interesting and constructive speech. There are, however, one or two comments that I should like to make. I do not think he was quite fair in speaking of the Budget as a "thing of bits and pieces". That is to ignore the importance of what seemed to me the dominating feature of the Chancellor of the Exchequer's Budget—whether or not we agree with it—namely, the decision to retain the large surplus for the purpose of disinflation instead of giving it away in tax concessions.
The other point made by the noble Lord to which I wish to refer relates to tax avoidance, using the phrase, as he did, to distinguish it from tax evasion, which is illegal. It is by no means confined to the avoidance of taxation by the avoidance of work, to which the noble Earl, Lord Selborne, referred. We have to contemplate the fact that there will be a perennial conflict between the Inland Revenue and the taxpayer, between the gamekeeper and the poacher, reflected every year in the annual Finance Bill. Like the noble Lord, on the whole my good wishes are with the gamekeepers, but they sometimes overdo it. I think, for example, that the provision in the present Finance Bill to tax that part of the salaries of employees of a foreign country which is not brought to this country is a mistake, for reasons given in what I felt was a conclusive letter by Mr. Graham in The Times of last Friday. But, in general, I am on the side of the gamekeeper.
The point I want to make (and here I hope that I shall have the support of the

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noble Lord, Lord Pethick-Lawrence) is that, as a corollary, the Government should refrain from tax exactions which are exactly like tax avoidance, in that they are legal but unintended—exactions that are due to the destruction of the real structure of the income tax system through inflation. Consider what happens—and if I took actual figures, my argument would be strengthened, not weakened—if, in a given period, incomes and output alike, as measured in terms of pounds sterling, both double. People are neither better nor worse off. What has really happened is that what was called 10s. is then called £1. That does not affect the ordinary standard income tax or other forms of taxation, because tax and income go up together, and the proportion remains the same. But it makes complete nonsense of income tax limits set down in the tax system for the purpose of giving special relief to people at one end of the scale and an extra tax on people at the other end.
At the lower end, on the whole, although not exactly or completely, that anomaly has been corrected, by what are always, though unsuitably, called concessions—I say "unsuitably" because they are only inexact and partial and belated returns of improper gains of the Inland Revenue. But the £2,000 limit has remained all the time. In the case I have taken, what is now called the "£2,000 a year" man is really a "£1,000 a year" man; but nothing has been done to correct that. That, in my view, is really filching extra taxes from one particular unfortunate class of taxpayers. It is legal, but it was unintended; and it ought to be corrected. It is particularly unfortunate, because it applies with particular severity to the people who have gross earnings from, let me say, £2,000 to £5,000 a year, who are at the very core of the efficiency of our industrial economy. Their money is taken away by an act that is very much like that of a salesman who uses weights and measures that have become completely defective. The Government may say: "We did not indeed create inflation for this purpose." That is true, of course; but it would be no answer for a salesman who consciously went on using defective weights and measures after he knew perfectly well what was wrong and kept the profits for himself. That is what the Government are doing at this moment.
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I turn now to the noble Lord, Lord Rea, the Leader of the Liberal Party in your Lordships' House, who started with, I thought, rather undue modesty, at least so far as he was speaking for the whole human race, when he said that this problem was beyond the human mind to grasp. He then went on to call for an abolition of the travel allowance control. I have great sympathy with that appeal, but not because I agree with his initial and rather curious argument that it is hard luck on the £45 allowance man to fill up a form. The real fact is that the man who is inconvenienced by being limited to the £100 allowance is the man who wants to spend more than £100—so let us say so quite frankly. The reason why I am in support of the noble Lord's appeal is that I think at this stage the direct saving of that travelling allowance to our foreign exchange is negligible; and if we allow for the indirect results I believe that it is nil or negative. Against what I believe to be really no advantage at all, there are the great disadvantages referred to both by the noble Lord, Lord Rea, and by my noble friend Lord Conesford. I believe there is only one real reason for a restriction of this kind, and that is to prevent undesirable capital movements. But if it is possible to have the rules that apply to travelling to Scandinavia without incurring that unfortunate consequence, why cannot those rules be extended to other countries which are at present covered by the £100 allowance?
I now come to what the noble Lord, Lord Lucas of Chilworth, said. He tackled the problem of our deficit. However, I do not think he either stated quite correctly the nature of our real and dangerous problem or prescribed the appropriate method of dealing with it. He started by asking: Why do the Government think that they can get a balance between our imports and our exports which we have never had in living memory? That last phrase shows clearly that the noble Lord was thinking only of physical exports and imports, because in living memory we have certainly had a positive balance of £200 million a year, equivalent at present prices to £600 million a year. But what reason has the noble Lord for thinking that the Government ever contemplated that that was the goal of our effort? What the Government are trying to do, and must do, is to secure a balance between our exports, visible and

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invisible together, which will enable us to pay for our imports and to meet our foreign commitments and such foreign investment as we have to make abroad. That is a difficult enough task: the penalty of failure is severe enough, and the obstacles in the way are high enough. The weaknesses in our system include, of course, a great dependence for such income as we have from abroad on rubber from Malaya, on cocoa from West Africa and on oil from the fringes of the sterling area. And we have many other difficulties, to some of which I will refer in a moment.
What happens if we fail to get that balance? Here, I think, the real and crucial danger of this country has never been stated quite starkly enough by any responsible Minister. The real fact is that if, for reasons which have been mentioned, we go on failing to earn sufficient to pay for our essential food and raw materials, we face the prospect of both destitution and mass unemployment. I said that Ministers never state this quite starkly enough. The Chancellor of the Exchequer said the other day, in describing our problem, that the trouble was that we had not a large enough reserve to meet the fluctuations in our fortunes. That is true, so far as it goes; but it is not the real trouble. If we had, by the gift of the gods, or the modern gods, the dei ex machina, the Americans, let us say, double our reserves at this moment, that would only postpone disaster; it would not avert it if we continued to have, as we have had over past years, a long-term downward curve round which the fluctuations have taken place, due to long-term causes which so far are not being corrected or removed. That is the deadly danger that confronts us, and it ought to be stated clearly by responsible Ministers, because it is that danger, I think, that we should take as the touchstone by which to judge all measures of policy and to assess the alternative various issues that confront us.
I come now to the remarks of my noble friend Lord Cherwell. He did, I think, accurately diagnose the fundamental underlying cause as wage inflation. As I shall explain in a moment, I do not think that his prescription of the remedy was equally satisfactory. He said—and here I should like to quote his words
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[OFFICIAL REPORT, Vol. 197 (No. 87), col. 77]:
"… the rise in prices is due almost entirely to the fact that earnings have risen faster than output. It is no use being mealy-mouthed about this subject."
He went on to say that output in the United Kingdom in the last five years had gone up by only 9 per cent., whereas earnings had gone up by 45 per cent.; while in West Germany output had gone up by 40 per cent. and earnings only by almost exactly the same amount, 42 per cent. In my view, the noble Lord, Lord Cherwell, has rightly diagnosed our inflation as predominantly, though not wholly, wage inflation—in this sense: not that wages have gone up, as of course they ought to go up with increased output, but that they have gone up so much more than any increase of output, while no such excess is found in the countries which compete with us in foreign markets.
I do not think, however, that the remedy of the noble Lord, Lord Cherwell, was equally satisfactory. He said that a 10 per cent. rise in wages was likely to mean a 10 per cent. rise in prices, so that the worker had no real interest in demanding such increases. The trade union leaders, he said, who really understand the position, might prevent the inflationary spiral. That might be true if wages were negotiated collectively by one single organisation, the T.U.C., but they are not. They are negotiated through separate unions, and it is no use to say to a particular union: "Do not ask for a 10 per cent. increase in wages; it will only put up the price of things you buy by an equal amount." The answer is conclusive: "Oh! no. If we get an extra 10 per cent. in wages, that does not necessarily mean that all the people who are making the things that we want to buy will also get 10 per cent. And, equally, if we refrain from making this demand, that will not prevent other industries from getting the increase which we do not have."
The T.U.C. could not, and perhaps should not, negotiate on wages as a whole in one great settlement. The right line of settlement, in my view, is that the Government, by its general financial policy, should not only make it less possible for employers to give those illegitimate and unearned increases in wages but, as an

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essential counterpart to that, should insist that the national monopolies, where the ordinary process of wage negotiation does not work, should pay their way, as Parliament intended them to do but as they have failed to do because of the action of successive Governments. The last notorious example is the pronouncement of the present Minister about railways, which I will not further discuss at this moment.
The appropriate rôle of the T.U.C., in my opinion, is quite different. It is not to prevent the separate unions' demands for wages. It is to deal with what is clearly within the proper rôle and responsibility of the trade union movement itself; that is, to prevent unofficial strikes and settle disputes between unions. The great bulk of the strikes last year, with the enormous losses they entailed, were not the old, orthodox strikes as a last resort after proper official negotiations about wages between employers and employed had broken down. The great bulk of them were either unofficial strikes or resulted from quarrels between unions. The actual amount in wages claimed or in wages lost to the men was comparatively small—it was a matter of millions in total—but for the industries concerned, the loss was to be measured in tens of millions; for the country in hundreds of millions. The noble Lord, Lord Cherwell, said—I do not know the authority for his figure—that the dock strike alone caused a loss of £200 million. That seems to me the proper rôle for the trade union movement: to achieve an organisation to deal with the trouble that specially concerns them, leaving the normal wage problems to be dealt with as I have just suggested.
I am speaking rather longer than I intended, but I should like to refer to the speech of the noble Lord, Lord Cones-ford, who tackled the almost unmentionable and most delicate question of over-full employment. As has been said several times during this debate, all Parties subscribe to full employment. They are careful, however, not to say exactly what they mean by it. Does it mean a policy rimed at having not more than 3 per cent. unemployment at the worst, which was the way the Labour Government defined their policy as late as their last year of office in 1951? Or does it mean the 1·2 per cent. we have at this moment, or the 1 per cent. we have
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had on the whole for the last six months? I do not think the best definition is in terms of a precise percentage. I think we all want as much full employment as we can get without stopping the essential remedial processes. The Government must now apply themselves to what will be the really fatal disease if it is not cured (the appropriate methods I have already referred to) in our foreign balance of payments. The Government must, I suggest, go on with their policy designed to secure adequate mobility from industries that do not need men to our export industries that do. They must press on with their policy until they stop the fatal Influence of inflation (of an order of magnitude which I have already illustrated by the case of Germany), and they must not—this, I suggest, is the right answer to the question—in pressing on with that proper policy, stop short because it may have the effect of raising the present 1 per cent. of unemployment to something nearer the figures that were regarded as the objective only a year or two ago.
Among the desirable objects of the Government's policy, I referred to securing the necessary mobility. That is not happening at present. It is notorious, I think, that the credit squeeze is not securing sufficient mobility. It may have to be pressed further. Incidentally, here I suggest an analogy to the tax avoidance question mentioned before. The process of encouraging mobility has just been impeded by a decision, the legality of which I do not question—namely, to give unemployment benefit in respect of part-time working. This was, I think, never intended by the Legislature, and merits attention as much as the stoppage in a Finance Bill of tax avoidance.
I will not delay your Lordships further beyond making one concluding remark. The future of this country will depend more than on anything else, apart from the hazard of war, on one fundamental factor, and that is, the mental attitude of all those concerned with the processes of production—employers, workers, and potential investors—to work and its rewards, to enterprise and its risks, to consumption and saving. This mental attitude has been profoundly affected by the post-war environment created by the Welfare State, by full employment, by the national monopolies and by inflation. Some of these have brought great and

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obvious benefits. Some have brought disillusion and injustice. Taken as a whole, whatever their benefits, they have undoubtedly impaired the old incentives required for a dynamic society, and at present no alternative incentives of equal potency have been discovered. If, which God forbid! a future historian has to write on the decline and fall of Britain—it will not be the one who has just given his account of the birth of Britain and who many centuries later led our country to the height of its greatness—he will, I believe, find the fundamental cause since the war in the psychology to which I have just referred, and in our failure, if, indeed, we should fail, to restore and revive again the dynamic energy on which the greatness and power of this country have in the past been founded.
6.0 p.m.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, one is always impressed with the presentation of the case to your Lordships' House by the noble Lord who has just sat down. He is an old friend, a well-known economist, a man of great knowledge and capacity in regard to international affairs; but I must say that, when he begins to talk of history, as he did in his peroration, which was so moving, he will, in my view, have to be a little more adequate. It may be that, in the historian's eyes, the present situation will have to be related to the psychology of the people of to-day, and their part in the Welfare State and what it means to them. But it will have to be remembered that much also depends on the circumstances that led up to the last war, as well as on those that followed it. That will be a part of the historian's record of their effect upon the economic life and general economic prospects of the world and this country, and upon the future status of States. The future record will also have to include something about the post-war period, quite apart from the points mentioned by the noble Lord.
There was the bankruptcy with which we in the Labour Government were faced when we came into power in 1945. In this present state, as the noble Lord has had to admit in the course of his speech, the old-time methods of mere credit squeeze and the money method cannot
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fulfil the task of dealing with the threatened inflation. He himself said that other things would have to be put in—for example, something to secure mobility, a general control of some kind or other. A real historian, when he comes to write about it, will see that much—I agree not all—of the present situation has arisen as a result of the Election in 1951, after which the Party which came into office determined to put political dogma before the immediate task of dealing with the general situation. And they had the great advantage of coming in at a time when the terms of trade began to go in this country's favour. They thought that they were going to show the country that they were continuing prosperity because of some special thing they had done in "setting the people free." But directly the terms of trade go against them in the country, they are up against it. Thus, hardly one of the Election pledges made in 1951 has been fulfilled.
They should talk about wages being one of the principal causes leading to inflation! We have to look at what comprises the increased cost of living and the percentages. It is when one comes to deal with the result of Government policy, and sees how the increased cost of living has become more or less centred not upon luxuries but upon the cost of food, which has always been admitted to be a proper basis for wage negotiations, that one can begin to give proper weight to the part that wages themselves play in dealing with this situation. So, whilst I have enjoyed a great deal of the speech made by the noble Lord, Lord Salter, and was most interested in what he had to say by way of comment upon the speech of the Leader of the Liberal Party in regard to the Trades Union Congress and trade unionism in general, he will have to revise his history considerably, from my point of view, before I can accept all his statements this evening.
LORD SALTER: The noble Viscount will realise that I did not deprecate an increase in wages. I referred entirely to an increase in wages which anticipated, and ran ahead of, any increase in output.
VISCOUNT ALEXANDER OF HILLSBOROUGH: Strangely enough, I am glad that the noble Lord dealt with the

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speech made by the noble Lord, Lord Cherwell, last week. I had marked that very passage which he quoted from Lord Cherwell's speech in Hansard. Of course, there is no doubt that increased wage rates have had a good deal to do with the rise in costs and general inflationary tendencies, but it has not always been because of an increase in the basic rates. Very often it has been competition between the various trades, as well as between those within a given trade, that has made such a vast difference and has also increased largely the cost of the output by overtime rates. Those things have to be taken into account.
There are other factors. A few days ago I was reading an interesting document, Interest and Dividends upon Securities Quoted on the Stock Exchange, issued by the Stock Exchange people themselves. There has also been the question of how the position is affected by the increase in profits. There are profits distributed. How much easier it is to check them than profits which are actually put back into the business! But it is a by-word amongst those who really follow, from the ordinary economic point of view, the Financial Times, the Economist and others, that, whilst no doubt wages have been a larger global figure than profits have been during the inflationary tendency, one cannot say it is practically all wages and no profits.
I have here this document issued by the Stock Exchange, and of the very large proportion of the loans and ordinary equities, both preference and ordinary, they give a picture from 1947. Taking the three classes and adding them together, they show that the total of interest and dividends in 1947 was £859 million, and in 1955 it was £1,224 million—a rise in those years of getting on for £400 million. Of course, there are other securities as well which are not dealt with in that particular list. I cite those only to show that, when one comes to consider all the factors contributing to the tendency to inflation, one must not put all the charge upon labour. One of the great faults of this debate, in my view, speaking as a Labour man, has been the tendency to try to put the blame upon the workers in the country. I listened with great interest to the speech of the noble Earl, Lord Selborne, which
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was described by my noble friend Lord Chorley as "reactionary". The noble Earl is an old political friend on the opposite Benches, as it were. As I listened to him to-day, I would not say that his speech was what the noble Lord, Lord Chorley, called "reactionary": it was just a reversion to type of fifty or sixty years ago. What a story the noble Earl was telling us about the position of the worker!
My noble friend Lord Pethick-Lawrence, to whom all of us on these Benches are so grateful for his constant leadership in opening debates of this kind, described what happened to the workers in those days as being "savage inhumanity". When language like that comes from my noble friend Lord Pethick-Lawrence, one of the most tender-hearted persons in the world, one knows that he would not be inclined to describe actions of opponents like that—we know him too well from his nature—but for the fact that it was historical and proved fact. When we come to deal now with the question of inflation and try to put all the blame upon labour, do not let us think, as the noble Lord, Lord Rea, does, that all this could be put right by having a special outside inquiry, as I think he advocated, into the trade unions; the trade unions who had to fight first in order to beat the anti-combination laws before they could even exist; the trade unions who have just purchased the cottages at Tolpuddle as a national memorial to those who were sent to gaol and some who were sent overseas for asking for a rise from 7s. a week on which to bring up a family in a Christian country. Those are the people who formed the trade unions—and not by any special grace at that time on the part of even Liberal Governments. Let that not be forgotten. If the negotiation difficulties, which the noble Lord, Lord Salter, quite rightly mentioned, need to be tackled, they can be tackled by the trade unions themselves. They are capable enough to do their own job. I think they are steadily increasing their efficiency in equipment, in education, in literature and in science, and I am sure that they will be able to do their job satisfactorily.
Now I want to take up one of the points made tonight by my noble friend Lord Huntingdon—namely, the subject of advertisements. We have discussed this

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matter since the war and so far as income tax is concerned it was dealt with, for a time, I think in one of Mr. Dalton's Budgets, by establishing a practice period. Sir Stafford Cripps, who altered those arrangements to what they were previously, made the alteration in the hope that those who had been engaging in the practices which had been brought to the notice of Mr. Dalton would be good boys in future. In fact, however, there has since been an orgy of expenditure on advertising. I do not know how many Members of your Lordships' House take the trouble, as I do sometimes when I am not able to sleep very well, to read the company reports in the newspapers. I read one last night. It was a report by Messrs. Bibby and Sons, the soap and cattle feed people. The directors in their report refer to their poorer results as being largely due to the gigantic advertising programme of their opponents in business, especially on the soap side. The word used was "gigantic". One has only to look at the soap industry to see what is happening. There is a great battle between, for instance, Hedley's, representing the American combine, and Lever's. The poor housewife is wooed with all kinds of things. She buys a packet of detergent for 1s. 9d. or 2s. and the actual product inside costs about 2d. It may have a cardboard packet around it. In the margin which is charged to the consumer there is an enormous bill for advertising. Is that not inflationary? I should like an answer from the Government.
LORD TEVIOT: I was wondering whether, in speaking of the enormous amount of money that is spent on advertising, the noble Viscount has forgotten the Co-operative Societies. The noble Viscount is talking about other people; I must bring that point in.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I do not forget them at all. I should think that on the wholesale side we probably spend 2d. in the £, which is about half the usual amount spent elsewhere. All the time the taxpayer is paying while general advertising, obviously for a capital purpose and not for a revenue purpose, is allowed as tax-free expenditure. When great firms go out to capture the whole business and goodwill of an opponent, that expenditure should
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be treated by the Government, in dealing with taxation, as a capital expenditure—a purchase of the goodwill which was not theirs before. If it is a question of salesmanship, then one certainly needs to keep one's goods before the public. I certainly should not want to see a tax change made in respect of advertisements overseas. I think that in order to maintain our export markets that is quite reasonable expenditure. I do say, however, that the extent to which advertising has gone up now, whereby we are spending, I believe, nearly £300 million per annum, all of which is allowable as a trade expenditure, is leading to an inflation in price and, in many cases, to a "make-believe" as to what is the best thing for the consumer to get. It is time that the Government examined the matter from beginning to end.
I hope I have said enough on the other side not to lead noble Lords into thinking that I am against all advertising; I am not. I am in favour of reasonable advertising for home sales. I am in favour of all the advertising necessary for the overseas market. But I am totally against our subsidising gigantic wars between great organisations in this country at the expense of the taxpayer and the consumer who ultimately buys the article. All the history that I have been accustomed to study in this matter of distribution for the past fifty years would enable me, if I had time, to prove my case over and over again.
Now I come to the question of how we are going to do one of the things to which Lord Salter and previous noble Lords before him referred. How are we going to increase our production? At the present time, I quite see the difficulty of having the kind of increase in investment that would be necessary to bring about the expansion that we desire. But I am bound to repeat the plea I made some weeks ago, that the Government should look afresh at their agricultural policy before giving up the idea of being able to produce an expansion of output to reduce the imports which are so crippling in our balance of payments and trade. With a more favourable policy to the farmer, there is no reason why we should not greatly expand our output. Instead of that, the present Minister of Agriculture, Fisheries and Food seems to be determined, whether it is because he has lost his fight with the Treasury or for whatever reason it may be, just to let things

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take their course. The Government had to give lip-service to the terms of the 1947 Act; but in general their policy is to proceed ultimately to laissez-faire.
I was astonished to read in the Farmers' Weekly an extract from a speech by the Minister which I think shows fairly plainly what I mean. This is the report in the Farmers' Weekly of May 4:
"Farming bankruptcies are at an extremely low level. The latest figure I have seen is about 150 to 170 for last year"—
not a very firm figure; the Minister did not give the figure exactly—
"and this year the number is running rather less. Out of a total of 300,000 farms that figure is really insignificant. An industry that has no bankruptcies at all cannot be in a healthy state."
I think that is a most outstanding contribution—that an industry that has no bankruptcies at all cannot be in a healthy state. When this statement was greeted with exclamations of surprise, the Minister added:
"Yes, I stick to that absolutely; it is the price of efficiency. If Members want a system in which nobody is ever squeezed out of business they will not have efficient industry."
Those were the words of the Minister of Agriculture speaking in another place. I hope the farmers will duly note that. It really comes back to the old philosophy that Lord Selborne put to us this afternoon. He showed his views quite plainly: that you can never deal with inequalities of nature or lack of opportunity by any legislation. I am quoting the words the noble Earl used; we can look in the OFFICIAL REPORT to-morrow.
THE EARL OF SELBORNE: If I may correct the noble Viscount, I did not go so far as that. I said it was no good trying to correct the inequalities of nature or of opportunity. That is different from not dealing with them.
VISCOUNT ALEXANDER OF HILLSBOROUGH: There may be a difference in the words but not in the meaning—at any rate, I shall be delighted to refer to it again. It is the old Tory philosophy. It is what my colleagues and my party have been fighting against all our lives: the survival of the fittest and the weakest to the wall. That is what we have been fighting against. We get it expressed tonight: "Why should these people"—the people among whom I was brought up—"have such education? We are
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spending far too much on education for them." Are we? All the facts of education prove differently. The old greybeards of the Admiralty were seventy-seven years ahead of Mr. Herbert Fisher and his day continuation schools. They took the lads into the dockyard schools from 1841 onwards, and what did they produce?—naval architects of the next century, out of workmen's apprentices. By education they produce heads of technical colleges—and to think that, when we are dealing with these great and serious facts facing us to-day, the noble Earl says: "We must not have so much education. Reduce expenditure on it," whereas his former leader, Sir Winston Churchill, says: "For heaven's sake! let us have a let more technical education of all classes. We shall need every bit of it in the future." There seems to be a division of counsel there as to how we are to deal with this situation.
I have heard nothing in the course of this debate that would take me away from the basic principles which led me into politics. I have found no real explanation from any members of the Government, either in this debate or in any previous one, as to what they have gained for the country in dealing with the postwar problems by reverting to a system of "Every man for himself, and the devil take the hindmost." What have they gained? They had a sort of mesmerism over the people for a year or two, while the terms of international trade were going in their favour; but when the terms of trade turn against them they have nothing to say but the old saws that we found used right through 1921 and 1922. If the people are foolish enough to give the Government a long enough rope we shall have the same sort of thing which we had in years gone by; what was prophesied by Lord Salter just now—unemployment and mass despair. I am not quite sure of the word, but it was a pretty bad word that he had to use about it. That is what we shall get, whereas what is needed in a modern world is courage to face economic planning.
The Government are not prepared to do it. Why are they not prepared to do it? Because, apparently, they want to keep certain divisions in society. That is

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why they are not prepared to do it. During all the period of unemployment, in 1920, 1921, 1923 and 1924, when every morning in my political office in Sheffield I had queues and queues of unemployed, begging for help of any kind, as a result of the deflationary policy of a Tory Government—during all those years what was going on? Just the same kind of stuff that we are having talked to us to-day, just the same sort of thing. If it had not been for the manner in which the situation was dealt with when the country was bankrupt in 1945, I say advisedly that the country would have been very near that situation then. Both the country and the workers were saved from it by the people's Government of 1945–51.
THE MINISTER WITHOUT PORTFOLIO (THE EARL OF MUNSTER): By what Government?
VISCOUNT ALEXANDER OF HILLSBOROUGH: By the people's Government, I said. I am not ashamed of it. Call it what you like. Call it the Labour Government or the Socialist Government, it will still be the people's Government. I do not see why your Lordships should not allow me to speak in a proper fashion in this House, according to what I think. I am sure that I should be allowed to do that. That is the situation.
LORD TEVIOT: I do not want to interrupt the noble Viscount, but is it not true that the highest figure of unemployment this country has ever had was during the term of office of the Labour Government?
VISCOUNT ALEXANDER OF HILLSBOROUGH: When? It certainly happened after the great Wall Street smash of 1929 and when there was no Labour majority in another place. We were completely prevented, both on that issue and upon the problem of coal and the like, from being able to exercise a Labour policy. Please do not count that. It would be quite wrong, in any assessment of the situation, to try to take that into account.
I say that there is no possibility of doing what is just and right for the workers of the country, the poorer classes of the country, other than by having properly controlled economic planning. The Government are afraid of it. When I listened to the noble Earl, Lord Selborne, this afternoon and his (shall I
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call them?) expositions of the rich and the poor, and when I think of what a good churchman he is—because I know he is—I remember that as a boy I used to sing the Magnificat in the choir:
"He hath put down the mighty from their seat; and hath exalted the humble and meek.
He hath filled the hungry with good things; and the rich He bath sent empty away."
Does the noble Earl think I am bothered about his definition of rich and poor?—not likely, because we have a gospel and a mission. We have also a sound technical basis for our case, and I say to the Government: "If it had not been for the unfortunate imposition upon our work (and I myself had a lot of responsibility for this) of having to agree to an enormous defence programme you would never have had the chance to come in and do the damage you have done. I think it is about time you made up your minds to get back to planning in the interests of stability and success."
6.28 p.m.
THE EARL OF MUNSTER: My Lords, at the end of a two-day debate it now falls to my lot to wind up on behalf of Her Majesty's Government. I think noble Lords, on whatever side of the House they sit, will have been impressed by the speeches that have been delivered during these two days by noble Lords who are so competent and capable of discussing almost every aspect of our economic position. The debate has indeed roamed far and wide. I think my best course this evening would be to try to reply to some of the questions which have been addressed to the Government during the two-day discussion and not to travel over any of the ground which was so admirably covered by my noble friend Lord Selkirk, who spoke at the end of the first day's debate.
Let me say at once that I was disappointed with the speech which we have just heard delivered by the noble Viscount who leads the Opposition. It struck me that he conveniently forgot that in 1951 his own Party left this great British nation on the verge of bankruptcy. He still seems to forget that to-day we have a higher standard of living in this country under a Conservative Administration than has ever been known before. Indeed, when your Lordships think of the words that he used this afternoon it is obvious that he was living in the 19th century and

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that he had no constructive ideas whatsoever to present to your Lordships or to the nation for consideration.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, that is not true. It is sheer nonsense—eyewash.
THE EARL of MUNSTER: It is perfectly true.
VISCOUNT ALEXANDER OF HILLSBOROUGH: If you want to talk about 1951, I may say that you got in on a false cry. You told the whole country that we were running away, whereas you knew that, with a majority of five, we had to get a mandate to put this very type of planning into operation. You beat us at that and, by gum! you are beating the workers now.
THE EARL OF MUNSTER: My Lords, I think it would be better to get on to constructive ideas in this debate rather than have a discussion now on the benefits of Socialism and Conservatism. I want to deal first with exports and trade. At the beginning I should like to remind noble Lords that my noble friend pointed out last week that our reserves had increased by 50 million dollars during the month of April and not by £50 million, which is mentioned in the OFFICIAL REPORT, and which was obviously a slip of the tongue. Recently our exports have shown an appreciable improvement. None the less, it is quite clear that we are not holding our own compared with our competitors in the overseas markets. It must be remembered that no Government can obtain export orders; those orders can only be won by individual firms going out to sell their goods at competitive prices with an assurance of good delivery dates. But what the Government can do, and have done, is to create the conditions whereby our exporters are stimulated to sell abroad rather than in the easier home market. Surely, to curb inflation and to reduce the excessive demand at home is far and away the most important task facing Her Majesty's Government to-day.
At the same time, our overseas commercial policy must be aimed at establishing external conditions whereby our trade can flourish. We have done a good deal. The Government's services of direct assistance to exporters are being increasingly used, and, as my noble friend, Lord Bridgeman, said, the Export
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Credits Guarantee Department has recently announced improvements in the range of its services and a reduction in its premium rates on trade with no fewer than 100 markets. I repeat that it is not the Government's job to sell exports but it is their responsibility to create conditions in which the exporters can get on with the job.
I pass now to deal with the matter raised by the noble Lords, Lord Pethick-Lawrence, Lord Salter and Lord Selborne—the question of tax avoidance or evasion. Much has recently been said and written about both these practices. Tax avoidance is not illegal but tax evasion is, of course, a punishable offence. I believe that all noble Lords, and certainly those who, in the course of their political time, have been engaged at the Treasury, will be very familiar with the fact that on publication of a Finance Bill acute minds throughout the country settle down at once to find ways and means of legally circumventing its provisions. It follows that the Government must always be one stage behind these acute-minded people. But successive Governments (the "people's Government" also) have tackled this matter on more than one occasion, and seriously disturbed, as we have done, the misplaced ingenuity of these individuals. In this very Finance Bill the door is closed to two defects of the law relating to profits tax which have recently become apparent; and although there is no direct evidence to show that avoidance of this tax has been practised to a large degree, nevertheless, the law is being amended before trouble really starts.
We all know that Finance Acts have for many years contained provisions to stop the loopholes through which tax can be avoided. I have heard it said on many occasions, and the noble Lord, Lord Winster, mentioned it in the course of his speech this afternoon, that expense accounts are "wangled". I expect we have all used that observation from time to time, but I suggest that when any noble Lord makes that observation in future (quite apart from the noble Lord who made the observation to-day) he should give us concrete facts upon which we can go, so that we can find out whether they are correct or false.
I come now to evasion, which is quite a different matter. To dodge tax by

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illegal methods is, as we all know, a punishable offence. Under Clause 16 of the Finance Bill additional powers are being taken to enable information to be obtained about fees and commissions which have been paid to individuals, but which the recipients might be tempted not to declare. With the best will in the world, I could not give the House any indication whatever of the cost to the Exchequer of tax evasion. Suggestions of very large sums have been bandied about but I have no idea of the facts and know of no method whatsoever whereby we could secure an accurate estimate. Noble Lords' guesses would be just as good as mine. Nevertheless, the closest watch is kept on these matters by the Inland Revenue, and from inquiries which I have made I understand that it is quite clear in their minds that no further powers than those which now exist can stop people breaking the law. The thing to do, of course, is to catch the individual who is breaking the law.
I come now to a question which was raised on the first day of this discussion and has been raised this afternoon by the noble Lord, Lord Grantchester. In the Budget proposals of my right honourable friend it was indicated that he intended to give some relief to the self-employed in respect of provision for retirement. I need not go into any details for they are all embodied in the Finance Bill; but suggestions have been made during this two days' discussion that we should go further and implement a recommendation of both the second Millard Tucker Committee and the Royal Commission on Taxation of Profits and Income—namely, that part of the permitted benefits should, subject to a maximum limit, be a lump sum payment. I hardly think it would be right for my right honourable friend to make this concession, as it is wrong in principle for any part of the benefits to be paid free of tax when the whole of the contributions are deductable for tax purposes. To allow such lump sum payments to the self-employed, with full tax relief on contributions, would put them in a better position than some other classes who do not get full tax relief on their contributions. It was also the noble Lord, Lord Grantchester, who wanted to know whether it would be possible to carry forward for relief against the earnings of
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a future year the amount of a contribution made under a "self-employed" policy which cannot be allowed in the year of payment because of the rule limiting relief to 10 per cent. of earnings. That answer also will be found in Clause 19 of the new Finance Bill. The excess of payments over 10 per cent. of earnings, but not any excess over £500, can be carried forward to a future year, as the noble Lord suggested.
My noble friend Lord Bridgeman emphasised—and how right he was!—the need for the public to realise the part they must play in helping our economic recovery. My noble friend is perfectly correct in saying that the Budget is only a small part of the total plan, but the proposals to encourage savings will, I hope, provide one really good incentive for the public to play their full and ample part. We all know, as has been said by the noble Earl, Lord Selborne, that during the last few years far too much has been spent and far too little saved; and in the existing state of our economy it is vitally necessary to reverse this trend. The Government can lead the way through their proposals in the Budget, but they must have the willing co-operation of everyone if they are to achieve the objective which we all have in mind.
Assistance will also be forthcoming if we can secure, as we are trying to do, the help of industry and trade unions in bringing about a period of stability in prices and wages, and a substantial increase in output per man. This particular question was mentioned, I think, by every noble Lord who has taken part in our debate to-day. As Lord Cherwell said on the previous occasion—and his words have been quoted also in our debate to-day—earnings per man in industry increased last year twice as fast as output per man. If we are to keep our heads above water, our first aim must surely be to increase output per man more quickly than earnings. The only method by which this can be done is to secure a period of stability of wages and prices and to step up production so as to enable us to become more and more competitive in foreign markets.
Reference has also been made by noble Lords, in the course of the discussion to-day, to the present monetary position. I think it was my noble friend behind me who said he thought that there was

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too much sterling about to-day. I would not quite agree with that view, but I would agree that there is too little foreign exchange, which, in point of fact, means our gold reserves. The position is by no means as good as we should like it to be. Some improvement has certainly materialised during the first four months of this year, when our reserves have risen by 208 million dollars, compared with a loss of 75 million dollars incurred during the same period last year. If the reserves continue to increase at the present rate, they should by the end of the year be back at their December, 1954, level. But, as my noble friend beside me pointed out last week, the first half of the year is always more favourable to our reserves, partly because of the seasonal swing in the trade of the rest of the sterling area and partly because we have to make an annual payment of some 200 million dollars to the United States and Canada at the end of the year.
The noble Earl, Lord Selborne, and the noble Lord, Lord Grantchester, asked about the intention of Her Majesty's Government to reduce expenditure by at least £100 million in the current year. As I think the House knows, my right honourable friend the Chancellor of the Exchequer has expressed his intention of making an announcement at the proper moment as to how and where this reduction will operate. I am not in a position to-day to add anything to the announcement which has already been made.
VISCOUNT ALEXANDER or HILLSBOROUGH: May I raise a question upon that?
THE EARL OF MUNSTER: Certainly.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I can understand that, of course, we shall not be able to learn for some time of any major proposals. As my noble friend Lord Pethick-Lawrence said last week, we shall have to wait for the details before we can judge of this £100 million proposal. But I should like to ask now whether it is true that the Government have already sent out a circular suggesting the halving of the amount of milk provided for children in nursery schools to save £100,000? Is that so? I understand that a circular has been sent out by the Ministry of Education intimating a reduction of from two-thirds of a pint to one-third of a pint in the milk provided for children under five
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years of age in nursery schools. If that is the kind of economy that is suggested it will not be very popular.
THE EARL OF MUNSTER: I do not know if it is. The noble Viscount is perhaps judging a little too quickly. I cannot give him an answer now on the point which he has raised.
VISCOUNT ALEXANDER OF HILLSBOROUGH: Perhaps the noble Earl will let me know what the answer is.
THE EARL OF MUNSTER: I think the noble Lord, Lord Grantchester, went on to ask why expenditure by the Government was not to be reduced by 10 per cent., like the reduction in the figure of bank advances. Here I think there is some mistake in the minds of many people. The Government have never set the banks a target figure at all; all they did was to ask the banks to make a "positive and significant" reduction in bank advances. That, indeed, the banks have done, and my right honourable friend sincerely hopes that the pressure will continue. I think it would certainly be unrealistic to compare the reduction in Government expenditure with the reduction in bank advances. The two things are really poles apart and in my view they are in no way comparable.
The Government have had addressed to them various questions about premium bonds—a method of saving which seems to have been widely welcomed in your Lordships' House, as it has been throughout the country. The issue of these bonds as an aid to saving will rightly find its place in the Finance Bill. I cannot at the moment give the House any further information about them, as the details are being worked out; nor can I give the House any indication of the administrative costs. Nevertheless, an announcement will be made in good time to enable noble Lords to purchase these bonds.
I leave those matters and turn to deal with other questions which were addressed to me. Lord Salter said—I think I understood him correctly—that the time had now arrived when Her Majesty's Government should lift some existing restrictions on the annual sum of money which may be taken by individuals as travelling allowance overseas. He quoted the case of Scandinavia. The allowance in the case of Scandinavia is always put at "any reasonable amount", and it has been

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pretty liberal in practice. Up to £250 a year has been allowed, with no questions asked. Allowances above that figure would be granted for any reasonable purpose, but it would have to be understood, I think, quite clearly what the purpose was. With regard to the £100 limit, my right honourable friend is of the very firm opinion that at the present time our resources could not be considered good enough to warrant an extension to other countries of the world of the Scandinavian arrangement.
THE EARL OF SELBORNE: May I ask the noble Lord whether he can explain to the House what is the difference, in this respect, between Scandinavia and the rest of Europe?
THE EARL OF MUNSTER: It has been worked out under an agreement which I should not like to define to my noble friend to-day—an agreement called the "Uniscan" Agreement. I will certainly see that the noble Lord has full particulars of the agreement, which no doubt he will read at his leisure.
LORD SALTER: My Lords, the noble Earl will agree, will he not, that so far as the purpose of retaining this travel allowance restriction is the prevention of capital movements, the danger, whatever it may be, applies equally to the Scandinavian countries. I did not suggest the complete abolition of the travel allowance, nor would I suggest freedom in regard to countries to which the allowance does not now apply, such as America. What I suggested was an extension of the Scandinavian arrangement to countries to which the £100 allowance now applies.
THE EARL OF MUNSTER: I see the noble Lord's point. I do not think that my right honourable friend would be prepared to go to that length at the present time, but I will convey the noble Lord's views to him.
LORD REA: My Lords, is the noble Earl maintaining that the cost of the administration of this regulation is worth it and that we save more than we spend in putting it into effect?
THE EARL OF MUNSTER: My Lords, I do not say that for a moment, but at the present time our reserves do not stand at a sufficient height for my right honourable friend to lift this restriction.
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May I pass on to deal with the point raised by the noble Lord, Lord Barnby, on export subsidies? He knows full well that for a long period of time Her Majesty's Government have made all possible efforts to secure the abolition of export subsidies which are used in other countries. He also knows that, following discussions between my right honourable friend and the German Minister of Economic Affairs, agreement was reached about the removal of artificial aids to exports; and when the law providing for the relief of German exporters from profits tax expired last year, it was not renewed by the German Government. Her Majesty's Government are also helping to promote a decision, taken last year in 0.E.E.C., which calls on members, with one or two exceptions, to discontinue as from the beginning of this year the use of artificial aids to exports. In the International Monetary Fund, when multiple currency practices and other uses of exchange restrictions are under revision, the possibility that these may be operated to give unfair advantage to particular exports is one consideration which we have particularly in mind in instructing the United Kingdom Director. In G.A.T.T., in O.E.E.C., in the Fund and in all other ways we can, we shall continue to press for an effective limitation of the use of export subsidies.
I pass from that to deal with the question asked to-day by my noble friend Lord Winster about shipping. He implied that the Government had placed shipping in a "deep-freeze" and that they had no desire to resuscitate the industry. The shipping industry, as the noble Lord, Lord Grantchester, mentioned, has been given a specially favourable assessment in the matter of depreciation allowances. The investment allowance is to be maintained for shipping, notwithstanding its withdrawal from industry in general. I am advised that the very fact of maintaining this allowance gives an initial relief from tax of 20 per cent. of the cost of a new ship when brought into service, while still allowing other depreciation allowances to be deducted over the years up to 100 per cent. of the original cost. The effect of the extra 20 per cent. has been to give additional tax relief equivalent to about 9 per cent. of the cost of a new ship at current rates of income tax and profits tax. So I think your Lordships will see that we are doing

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something useful and beneficial to the vast shipping industry, upon which so much of our prosperity relies.
VISCOUNT ALEXANDER OF HILLSBOROUGH: Give it to farmers, too!
THE EARL OF MUNSTER: I wish the noble Viscount would not make these interruptions. I did not interrupt him while he was speaking, and I have heard a ceaseless chatter coming from opposite. I was going to refer to the noble Viscount's speech in a moment, so perhaps he will wait until I have finished this part of my speech, and then I will turn to the question he raised. The noble Viscount raised the question of the relief from income tax of interest on savings bank deposits and asked if that could be extended. The noble Viscount will remember that in his Budget speech my right honourable friend proposed to exempt from income tax, but not from surtax, the first £15 of interest on deposits with the Post Office Savings Bank and the Ordinary Department of the Trustee Savings Bank. This means that an individual will be able to deposit up to an aggregate of £600 in one or both of these banks without having to pay any income tax on the interest; and in the case of a married couple, each will be able to have £15 tax-free.
This concession which my right honourable friend has made is part of the Budget scheme for encouraging saving and lending to the State. The Post Office and the Ordinary Department of Trustee Savings Banks, which are limited by Statute to a rate of interest of 2½ per cent., do just that, whereas other savings agencies lend to local authorities and individuals or buy market securities. These other agencies use their initiative to obtain good rates of interest for their depositors by judicious investment on terms which take full advantage of market yields. I hope that the noble Viscount will observe that if this concession were extended, it would depart from the Budget's intention of providing a special encouragement for lending to the State, as distinct from lending to outside organisations.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I knew about that before, but the whole point is that industrial and provident societies do not go on to the general market to obtain
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their capital. They work upon me thrift of their own members, and they are limited by law to a shareholding of £500 a member. What will happen is that the institutions that do not go on to the public market for money will be greatly handicapped through savings being transferred from their low-rate interest share capital into the Post Office and Trustee Savings banks up to £600, when they are limited to £500. They will be compelled to go to other places for their capital when for the last hundred odd years they have been getting it from their own members. These are great thrift institutions.
THE EARL OF MUNSTER: I see the noble Lord's point plainly, but I think he will agree that that is a matter which probably will come up in another place on the Finance Bill which is going through at present. I cannot give the noble Viscount a reply to-day, but I will certainly convey the view he has expressed to my right honourable friend the Chancellor of the Exchequer.
My noble friend Lord Winster raised the question of surtax and personal allowances, a matter of some importance. The Royal Commission on Income Tax considered this point and came to the conclusion that it was not unfair to ignore the personal allowance in assessing surtax because to do so would not affect the principle of the graduation of tax according to the size of income. However, they went on to suggest changes in the methods of charging surtax which would take into account the circumstances of the individual family. My right honourable friend has not yet reached a final decision on these recommendations. I think that a similar point was raised by my noble friend Lord Salter.
I think I have now replied to almost every one of the important questions which were addressed to me to-day. All I need do, in conclusion, is to emphasise to the House, as was done by my noble friend when winding up the debate last week, that there is no justification at the present time for letting up in any way whatever on the attack against inflation. Although, as we all know, the problem still remains, there are undoubtedly certain signs which indicate that the country has been responding to the measures which we have introduced. In the first place, there has been a continuing rise in

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exports and a slackening in the rise of imports: the trade gap has, therefore, narrowed. In particular, we are doing well in dollar markets, where our exports are now running at £40 million a month, which is one-third higher than a year ago. This improvement in trade has helped to increase confidence in sterling, and as a result our reserves are rising. At home, the credit squeeze is beginning to bite, and bank advances are £277 million below their peak of last June. All this is to the good but, as my noble friend Lord Salter said, pressure is still severe; hence the necessity for a large surplus in the Budget, the encouragement of savings and the need to balance such tax reliefs as were given by corresponding increases elsewhere.
I believe that the financial proposals which my right honourable friend recently presented in another place have been well received throughout the country and, indeed, in financial circles throughout the world. To encourage savings will do more than anything else to end inflation, and in turn increase the value of the purchasing power of sterling. I can well remember that, in my younger days, when I was working in Manchester, saving was always believed to be one of the foundations upon which the credit of this country and her vast Empire was securely based. I believe that what I learned then is true to-day; and if we return to that belief and encourage thrift amongst all members of the community we may well recover our financial equilibrium far more quickly than will otherwise be the case. My right honourable friend has issued a clarion call, and I believe that it will find response up and down the land.
7.3 p.m.
LORD PETHICK-LAWRENCE: My Lords, in rising to withdraw my Motion for Papers, I want first of all to thank all noble Lords who have taken part in the debate, and I especially wish to thank my noble friend Lord Huntingdon for what I think was at one and the same time the shortest and one of the best speeches this afternoon. Noble Lords will realise that it is not my habit to take up the time of the House with any final remarks, but I have been challenged by the noble Lord, Lord Salter, to reply to two points, and, though I see that for some reason he has had to leave the Chamber, I will just
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answer those two points. The first relates to what I said about tax avoidance. The noble Lord said that he was prepared to agree with me over that, but did I not also agree that there should not be any unfair attack on the taxpayer on the other side. I fully agree with that—and when saying that, I thought he meant some Revenue procedure which was very unjust. However, as the noble Lord developed the argument I found that he meant a change of tax law. I am quite prepared to agree that it is a reasonable thing that if, as a result of inflation, injury is inflicted upon certain taxpayers, some relief should be given by the Government. But a large number of people of all kinds and classes are affected by inflation, and the real nigger in the wood pile is not the action of the Government but inflation, which on more than one occasion I have strongly pronounced against. I am prepared to agree that every person who is injured by inflation is entitled to such consideration as the Chancellor of the Exchequer can give.
The other matter with which the noble Lord dealt was this. He asked whether I would not praise the Chancellor of the Exchequer for retaining in the Budget surplus the whole amount instead of giving it away. I did praise him for that in my opening speech, and I stand by what I said. I do not give him extravagant praise, because for him to give away the surplus at this juncture would, in my opinion, have been most unwise policy. In reference to that, I should like to make one remark to the noble Lord, Lord Barnby, who, I think, spoke about the mistake of the Government and the Chancellor of the Exchequer in paying capital to the nationalised industries out of the money provided in the Exchequer. I really think he is barking up the wrong tree there, and it is a pure mare's nest. Once you grant the desirability of having a big surplus in order to deal with inflation—which is pure Keynes doctrine, with which I agree—exactly how you raise the money to be provided to the nationalised industries is purely a financial matter. The difference between what the Chancellor is doing and what was done before is a small matter; and if it comes to controlling the extent of the nationalised industries, the country, as a whole, under the Chancellor's proposals, is, if anything, having a greater control than it had before. If the noble Lord, Lord Barnby,

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asks his financial friends, he will find out that it is a pure mare's nest on that point.
I have only one more thing to say—because my noble leader has dealt with the noble Earl, Lord Selborne, fairly faithfully, I think—and it is with regard to education. I want to tell the noble Earl two things. Some twenty years ago, when I was sitting next to Lord Rutherford in my colleague's dining room, he said to me that the whole scientific world was watching Russia to see whether she would not, through her system of education, produce such a large number of scientists that she would make greater economic progress than we were making in this country. Only a few weeks ago I was sitting next to a great living scientist, and he made the same remark to me. He said that this country must do everything it can to produce scientists at least to the same proportion of our population as they are being produced in Russia. We shall not do that by the kind of suggestion which the noble Earl, Lord Selborne, made: that we are spending too much on education and should cut it down. I do net propose to take up any more of your Lordships' time, and I ask leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

AGRICULTURAL MORTGAGE CORPORATION BILL
7.10 p.m.
House in Committee on recommitment of the Bill (according to Order): Bill reported without amendment

PENSIONS (INCREASE) BILL
Read 3a (according to Order), with the Amendments, and passed, and returned to the Commons.
FELIXSTOWE DOCK AND RAILWAY BILL [H.L.]
The CHAIRMAN OF COMMITTEESinformed the House that the opposition to the Bill was withdrawn: the Orders made on March 6 and April 19 last discharged, and Bill committed.

CITY OF LONDON (VARIOUS POWERS) BILL [H.L.]
Commons Amendments considered, and agreed to.
House adjourned at eleven minutes past seven o'clock.