§ Mr. du Cann
I beg to move, in pagc 11, line 3, to leave out from "it" to "shall" in line 4 and to insert:affects the validity of any term or condition of a contract or agreement for or relating to the sale of any goods, or the effect of notice of any term or condition so relating".If it would be for your convenience, Mr. Deputy-Speaker, and that of the House, I would suggest that we might deal with this Amendment and the next four simultaneously since they all relate to precisely the same point.
§ Mr. du Cann
These linked Amendments are a matter of clarification and tidying, and involve no substantive change. Their object, put simply, is to relate the transitional provisions of the Schedule more accurately to Clause 1, as amended during the Committee stage.
§ Amendment agreed to.
§ Further Amendments made: In page 11, line 5, after "made", insert "and notices given".
§ In line 9, leave out from "section" to "the" in line 11.
In line 15, leave out from "section" to "shall" in line 17 and insert:
in or for the purposes of any proceedings".
In line 19, after "void", insert:
or notice of which is invalidated".—[Mr. du Cann.]
§ Mr. du Cann
I beg to move, in page 11, line 26, to leave out paragraph 3 and to insert:3. In relation to any goods, references in this Schedule to the commencement of section 1 of this Act are references to the time at which, by virtue of section 14(2)(c) of this Act or of any decision of the Court under section 5 or section 7 of this Act, the said section 1 has effect in relation to those goods; and the reference in paragraph 1(a) of this Schedule to the said section 1 having come into force shall be construed accordingly.
§ Mr. du Cann
This is a drafting Amendment recasting paragraph 3 of the Schedule with the object, which I hope will have the approval of the hon. Member for Sheffield, Brightside (Mr. Winterbottom), of clarifying its operation.
§ Amendment agreed to.
§ 5.48 p.m.
§ Mr. du Cann
I beg to move, That the Bill be now read the Third time.
Several weeks have passed since my right hon. Friend moved the Second Reading of the Bill, and I hope it may be the opinion of the House in general that the intervening time has been profitably and wisely employed.
On that occasion my right hon. Friend said:The Government are satisfied that the principles embodied inthe Billand its basic provisions are right, but this, of course, does not mean that our minds are closed to practical and constructive suggestions for improving the Bill which may be made in our discussions in Committee."—[OFFICIAL REPORT, 10th March, 1964; Vol. 691, c. 275.]The record of the further consideration that has been given to the Bill will, I hope, be found fully to have borne out that clear undertaking given by my right hon. Friend.
The fundamental principle of the Bill is simple. In January, when my right hon. Friend made a statement in the House about the Government's general proposals on monopolies, mergers and restrictive practices, which, after all, are parts of a package operation, he expressed the attitude in two sentences. They were these: the Government believed that resale price maintenance wasin general, incompatible withour economic objectiveof encouraging effective competition and keeping down costs and pricesand that we had reached the conclusionthat resale price maintenance should be presumed to be against the public interest unless 473 in any particular case it is proved to the contrary…"—[OFFICIAL REPORT, 15th January, 1964; Vol. 687, c. 225.]I am sure that those words were entirely right and appropriate, for in general—and I say "in general" advisedly—how can anyone justify prices being higher than they need to be? This prescription by my right hon. Friend is the approach of the Bill. It incorporates the general prohibition on resale price maintenance and yet at the same time—and in our view this is very important—it provides fair and adequate machinery for the assessment of cases for exemption. Those are the two aspects of the Bill foreshadowed in my right hon. Friend's statement last January.
We believe that two further important points flow from the basic principles which I have indicated. First, it is for the parties seeking exemption to prove their case. In the context of the policy which the House has accepted, this is obviously right. What we are saying is that artificial restrictions on competition, including resale price maintenance, in general mean inefficient use of our resources and are basically undesirable, although there may be particular cases in which they confirm a benefit upon the public and which must be provided for.
The second point is closely connected with this attitude. It is for Parliament to define precisely and to set out in the Bill the circumstances which the Court should consider in deciding whether the case for exemption has been made out. We made it clear in Committee that we attached substantial importance to this second point. We have accepted it as a matter of principle that these exceptional cases exist, and it is up to Parliament to say what their exceptional character must comprise.
The Bill, as amended both in Committee and on Report, preserves its basic principles and in a number of respects it is a better Bill than when it received its Second Reading. It was not a bad Bill then—I am not suggesting that it was—but the amount of time and thought given to it and the devotion of hon. and right hon. Gentlemen on both sides of the House have made it a better Bill, and that is thoroughly good and desirable.
As I have said, on Second Reading my right hon. Friend said that he 474 expected that it was certainly capable of improvement, and we think that it has been considerably improved. I think that it is right that I should dwell for a moment upon those improvements and give the House examples. For instance, Clause 3, that dealing with loss leader sales, in its new form meets the substance of the criticism made about its original rigidity.
There have been important Amendments to the provision about exemption procedure. There are, first, various changes relating to registration introduced by Amendments moved by my hon. Friend the Member for Wycombe (Mr. John Hall) and my right hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan). These Amendments replaced the provision in the Bill as originally drafted that suppliers should explicity apply for exemption. They substituted for this a registration procedure, a procedure with which industry is already familiar under the Restrictive Trade Practices Act, 1956. Its great merit, perhaps above all out of many, is to do away with any impression, which it was represented to us might have been left by the original provision, that cases for exemption had in some respect been prejudged before they even came to the Court.
Perhaps I should also briefly mention the new gateways which have been added to Clause 5. These will permit the Court to hear argument on all the specific considerations which, in our view, are relevant to the question of whether resale price maintenance should be permitted to continue.
There are then the Amendment to Clause 7, which will permit late applications for exemption—we have been discussing this during the course of the afternoon—and the special provision for trades whose resale price maintenance has been dealt with under the Restrictive Trade Practices Act, 1956.
Those are perhaps the major issues which we have been discussing in Committee and on Report and are perhaps the most important of the several Amendments which we have made. Whichever is the most important is perhaps immaterial. We believe that all of them have a useful part to play in making the exemption procedure fairer, or more acceptable, and without 475 in any way detracting from the basic principles which I indicated in my opening remarks.
Besides these most obvious, most important, aspects of the Amendments which we have been considering, the Bill has been improved in many less dramatic but none the less important ways, partly as the result of the constructive Amendments put forward by my right hon. and hon. Friends and hon. Members opposite, and partly by suggestions, particularly for clarification, from both sides of the House.
I know that my right hon. Friend will want to refer to this, but I know that he would want me at once to pay tribute to the constructive work done in particular by my right hon. Friends the right hon. Member for Thirsk and Malton (Mr. Turton), the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith), the right hon. Member for Reigate and my hon. Friends the Member for Crosby (Mr. Graham Page), the Member for Putney (Sir H. Linstead), the Member for Bath (Sir J. Pitman), the Member for Twickenham (Mr. Gresham Cooke), and others. A great deal of constructive work has also been done by right hon. and hon. Members opposite, notably the right hon. Member for Battersea, North (Mr. Jay). Indeed, we gained very much from the advice of two experienced lawyers opposite, the hon. and learned Member for Walsall, North (Mr. W. Wells) and the hon. and learned Member for Liverpool, Edge Hill (Mr. A. J. Irvine). All this work has contributed to the usefulness of the Bill as it now stands.
We believe that its provisions will be welcomed generally by the public and will have an important contribution to make to the competitive atmosphere and conditions of our commercial life upon which, it is no exaggeration to say, our present standard of living and our future standard of life ultimately depend. We hope that the Bill will lead in the short and medium term to some reduction in prices. If it also results in the introduction of new trading methods, so much the better.
There can be no question that what we require in economic terms in Britain 476 more than anything else is to be up to date, as modern and as efficient as possible. It is no good letting old methods stand in the way, no good holding on to them simply because they are old methods. We might as well continue to drive around in the first motor car or first railway train invented. To do so in public would be to appear ridiculous. To hang on to outworn methods simply because one has grown accustomed to them would be equally ridiculous.
However, much of the discussion which has taken place in public and on the Floor of the House has concentrated around the future of the small shopkeeper in Britain. I say at once quite clearly that we believe in the small shopkeeper. We believe particularly in his independence of outlook. We believe that he does much to serve the neighbourhood where he operates, not least in the countryside and on the periphery of towns. We are perfectly confident that the efficient and enterprising small shopkeeper has a substantial future in Britain. Indeed, I go further and say that the advantages of personal service which he always makes available to the public will invariably give him the edge over some of his larger competitors. He can deserve to succeed, and in our opinion he certainly will.
In other countries resale price maintenance has long since disappeared and to some extent, in hanging on and maintaining it for so long, we have been the odd man out.
I hope that the House will agree that this is the right Measure to introduce in the context of competitiveness and efficiency which we all trust and hope will be the hallmark of Britain's economic success in the future. It is with those considerations in mind that, with confidence, we invite the House to give this Measure a Third Reading.
§ 6.0 p.m.
§ Mr. Douglas Jay (Battersea, North)
I agree with the Minister of State that this is a very much better Bill than it was when it was first introduced, because the Government have accepted a number of Amendments put forward in this House. It would have been an even better Bill if they had accepted even more of the Amendments.
477 I imagine that the Secretary of State for Industry and Trade has put up the Minister of State to move the Third Reading of the Bill because the Minister of State is not personally associated with so many of the past gyrations and tergiversations of Government policy on these issues as is the right hon. Gentleman himself.
I see that the right hon. Gentleman the Member for Enfield, West (Mr. Iain Macleod) is about to leave the Chamber.
§ Mr. Iain Macleod (Enfield, West)
Perhaps I had better wait to hear what the right hon. Gentleman has to say.
§ Mr. Jay
I am interested in some of his journalistic ventures, and I was reminded of one of them by the appearance of the Minister of State a few minutes ago. The right hon. Member for Enfield, West wrote an interesting review of that instructive book The Memoirs of Lord Kilmuir. Referring to Lord Kilmuir and also to Lord Longford, who had written an autobiography, he said:I belong to Lord Longford's school of biography. I like everybody.The Minister of State rather reminds me of that in this House. He likes everybody here.
§ Mr. Jay
That is an engaging and agreeing characteristic of the hon. Gentleman, and he has the advantage of not having been associated with all the Government's past policies. He told us just now that it was a splendid thing to get rid of old methods, obsolete ideas, and all the rest of it, but the main action that we are taking in this Bill is to repeal the most important provision of the Restrictive Practices Act, 1956, which was introduced with the help of the Secretary of State for Industry and Trade, though not with the help of the Minister of State.
The Government's record over the whole story is remarkable. First, they introduced a provision in that Act which gave legal power for the first time in this country for a manufacturer to enforce his retail prices on a retailer. We opposed that, but the Government left that provision in force for six or seven years. In the Queen's Speech last autumn there was no reference to any 478 intention to introduce a Resale Prices Bill. In the next lurch from the right hon. Gentleman we had a statement in January that he was going to introduce such a Bill, and also a number of Measures—which we are now told by the Minister of State is a package deal; I am not sure that that was a very diplomatic expression from his point of view—including action concerning monopolies, mergers and restrictive practices.
But the next stage was a Bill, rapidly introduced referring to resale prices only, and no action whatever other than a rather vague White Paper referring to mergers, monopolies and restrictive practices. This does not seem to bear the marks of any coherent and comprehensive Government policy on these issues. It is government by a series of lurches or hiccups this way and that which leave the public uncertain about what is going to occur next.
I should like to remind the right hon. Gentleman that, simultaneously with this Bill, he introduced a White Paper which made a number of practical proposals—that the Monopolies Commission should have power to inquire into proposed mergers; that there should be a Registrar of Monopolies; that additional powers should be given to the Board of Trade to enable the Commission's recommendations on monopolies to be enforced; that the Commission should be enlarged; and that the law should be further strengthened in the matter of information agreements. None of these proposals has been implemented by any legislative propositions brought before the House.
When, at the time of the introduction of this Bill which covers this limited field of resale price maintenance, we inquired why that was so, we were told that there was insufficient time. I am glad that we have the Prime Minister with us. He has occasionally followed our proceedings, and he, rather than the Secretary of State, is, I suppose, responsible at this point. The general impression created by Ministers at that time was that those measures were not introduced because there was to be a General Election in May or June.
What I cannot understand is why, when the decision was taken to postpone the General Election to the 479 autumn, we did not have some action concerning monopolies, mergers, and the other matters, as well as this Bill. We have the unfortunate Leader of the House coming down every Thursday and looking round anxiously for suggestions as to how he can occupy his Parliamentary time in June and July. Why cannot we have further action to tackle this question of the great combines, of monopoly practices, of mergers, and so forth?
In passing, I say to the right hon. Gentleman that he still has not told us what he proposes to do about the report on electrical equipment in the motor car industry, which he has had for at least a year, and which took many years before that to inquire into.
When we look at the Bill, it seems that it is a remarkably one-sided policy to apply this very vigorous and concentrated weapon on one part of the field, and leave everything else over to the indefinite future. It invites public suspicion that the Government really have not the courage to tackle the great monopolies, the great combines, and the really influential wealthy groups in British industry, and that they prefer instead to act where it is just a question of the retailer and the small or medium-sized shopkeeper. That may or may not be true. It may be an unworthy suspicion, but if it is, why is it that, now that he has an embarrassing amount of time at his disposal, the right hon. Gentleman has refrained from taking any action except in this limited field?
We on this side of the House would favour a comprehensive policy directed towards keeping down the cost of living and benefiting the consumer by ensuring that fair prices are charged, and that excessive prices are not being made either in the retail trade, or further back in the manufacturing and processing trades. It seems odd that the Government should make this assault on one part of the field while they are not merely not taking action in other parts of the field but are adopting policies which are calculated to raise the cost, of living rather than to reduce it.
§ Mr. Deputy-Speaker
Order. I think the House should bear in mind that we are now debating the Third Reading of a Bill.
§ Mr. Jay
I did not make that observation until I was challenged by the right hon. Gentleman. It was in deference to you, Mr. Deputy-Speaker, that I had not said it, and I did so only in response to the right hon. Gentleman's question. If it were in order, I could instance many other fields, such as rent policy, such as indirect taxation, and indeed policy in relation to food prices where the right hon. Gentleman's colleagues are engaged in trying to raise food prices, and where, so far from embarking on any comprehensive policy for assisting the consumer or keeping down prices, the Government are following the opposite course.
One of my criticisms of the right hon. Gentleman is that while he has embarked on this great campaign on the narrow field of resale prices, he seems unable to influence his colleagues such as the Minister of Agriculture, Fisheries and Food, the Chancellor of the Exchequer, and the Minister of Housing and Local Government, to understand the need for a comprehensive policy for this country which will assist us in terms of an incomes policy, in terms of exports, and all the rest of it, and restrain the rise in the cost of living to which we have become accustomed under the present Government.
If we look simply at the remaining powers in the Bill, as I said, we see that the difficulty all stems from the cardinal mistake which the Government made in 1956 in introducing into our system a new legal power by which the manufactures or supplier could enforce his resale prices on an unwilling retailer. We have said throughout the proceedings on this Bill that, having made that mistake, the Government were quite right to decide in this case to repeal the power.
481 But the mistake which the right hon. Gentleman made—no doubt due to the fact that he had only just come to the Board of Trade, and did not have long to think about these problems—was to assume that it was necessary not merely to repeal the 1956 Act, but to move rapidly right across the field. Having given manufacturers power in the 1956 Act, he has now decided not merely to take it away from them, but also, under Clause 2, to impose a new and onerous obligation upon them to refrain from withholding supplies from retailers in certain circumstances which are defined in the Bill.
The great majority of the difficulties that we have been discussing during the last three months have sprung from this effort to enforce upon manufacturers, against their will, the legal obligation to trade with people with whom they do not wish to trade. I doubt whether the right hon. Gentleman paused sufficiently to consider whether it would not have been wiser in the first instance simply to repeal Section 25 of the Act—without going so far as to impose these new obligations—and see how far that action was effective in ending the really undesirable features of resale price maintenance.
I understand very well the argument put forward yesterday by my hon. Friend the Member for Wednesbury (Mr. Stonehouse), to the effect that if we permit the withholding of supplies the abolition of resale price maintenance can be undermined by a form of individual boycott. Hon. Members who argue that case as conclusive do not always remember that the collective boycott has been made illegal by the 1956 Act, and that it continues to be illegal under present legislation. Therefore, if we had repealed Section 25 of the 1956 Act and continued the illegality of the collective boycott we should have had a situation which has never existed before in this country—either before 1956, when the collective boycott was not illegal, or since then.
It is quite possible that in those circumstances there would have been very few cases in which manufacturers would have found it possible to enforce their prices.
§ Mr. Angus Maude (Stratford-on-Avon)
Surely the right hon. Gentleman realises that the supplier could still withhold supplies, and that to many small retailers this would be disastrous. He must attempt to answer that point.
§ Mr. Jay
What the hon. Member does not realise is that although an individual manufacturer can withhold his supplies, since collective action cannot be taken it is probable that in the majority of cases retailers could obtain supplies from other manufacturers. Furthermore, in many cases a manufacturer who withheld supplies could do more damage to himself than to anybody else. I am arguing that it is at any rate debatable what consequences would have followed. I merely say that it might have been wiser to have legislated in that sense—thereby avoiding these difficulties—and to have seen what happened. If it had turned out that resale price maintenance was continuing by these methods there would have been a case for further legislation.
§ Mr. Peter Emery (Reading)
Will the right hon. Gentleman argue this matter a little more closely? Some retailers build up their whole business on one source of supply. If that source of supply were cut off it would not matter what other firms the retailer turned to—he would not have the same ability to sell as he had in the past. It is wrong to suggest that this sort of thing does not exist.
§ Mr. Jay
I am not suggesting that it does not exist. I am suggesting that none of these statements is universally true, and that without obtaining a good deal of experience in the matter it is not possible to be certain of what would occur. Anyway, if a retailer were in such a difficulty it would be open to him to charge the price suggested by the manufacturer. As I say, it might have been wiser to gain a little more experience of the matter.
The result of introducing this legislation about withholding supplies has been to add many complexities to the law on the subject. The time will come when we must pause to consider how far the average trader or retailer will understand what his rights and duties are, and be quite sure what he has to prove in relation to the motives of his supplier. 483 We have to ask ourselves whether these complexities are wholly justified. I say that merely to make the point that the Government, having rushed much too far in one direction in 1956, might have paused a little to ask themselves whether they wanted to jump the other way quite so far and quite so fast.
My next criticism of the Bill concerns the rather extreme extent to which, throughout our discussions, the Minister has refused to allow the Restrictive Practices Court, in taking decisions concerning exemptions—and the exemption procedure would not have been necessary if the right hon. Gentleman had adopted the simple course—to take into account the interests of shopkeepers or retail workers.
It is important to realise what the issue is. Most of my hon. Friends agree with the right hon. Gentleman that in taking these decisions the interests of the consumer should be paramount. The question, therefore, is whether the interests of the consumer should be paramount, and nobody else's interests taken into account at all, or whether, as we would propose, the consumer's interests should still be paramount but that the Court should at least have the power to pay some attention to the effects of its decisions on retailers and retail workers.
§ Mr. Graham Page (Crosby)
When the right hon. Gentleman puts the matter in that bald way it is apt to be misleading. He knows that retailers and employees are entitled to have their case heard, and their case may be heard if they can go through one of the gateways, such as a reduction in the number of establishments.
§ Mr. Jay
We argued all that at length in Committee. The question of the reduction in the number of establishments is relevant only if it is detrimental to the interests of the consumer. It is therefore precisely true that it is the consumer's interests which are to be considered; the interests of the retailer will be considered only indirectly, if it so happens that the detriment to the consumer because of a reduction in the number of establishments is fortuitously accompanied by a disadvantage to the retailer.
§ Sir Douglas Glover (Ormskirk)
This is a fascinating argument. The right 484 hon. Gentleman is saying that in 70 per cent. of the retail distribution trade the consumer's interest should be paramount, and the position of the retailer and retail employees should not be safeguarded, but that in 30 per cent, of the trade they should be in a special position.
§ Mr. Jay
I did not mention 70 per cent., 30 per cent., or any other percentage whatever. I merely said it seemed to us that the shopkeepers and retail workers who, numerically, represent a considerable proportion of the community, and whose interests might be materially affected, ought to have been considered when the decisions were reached. It still seems to us extreme to say that their interests should not be taken into account at all, or taken into account only when, accidentally, and in so far as damage to the consumer occurs, it leads to damage to them also.
The right hon. Gentleman never made out his case on that issue, and assuming the general objective to be the benefit to the consumer, greater efficiency in distribution and the rest of it, I think that the Bill would have been much better if the interests of other sections of the community had been taken into account.
It seems to us, therefore, that in any comprehensive and effective policy in this sphere we ought to have had simultaneous action to tackle monopolies, monopoly practices and mergers which might threaten to create greater monopolies. There should also be action to restrain information agreements and a greater strengthening of the Monopolies Commission. We believe that a policy of this kind, designed to keep prices down in the interests of the consumer, would make far more sense were it part of a coherent policy affecting indirect taxation, rents and food prices and all the other elements which enter so substantially in the cost of living.
A policy covering all these items would make sense, would be coherent and would achieve something in the national interest. But this piecemeal approach carries with it the danger of involving us in a great deal of trouble, legislation and discussion, and possibly hardship to some section of the community, without in the end achieving a great deal. While welcoming the little crumbs of comfort which we have been able to distil from a great deal 485 of discussion, I leave the Bill with the firm conviction that there is a great deal which still needs to be done.
§ 6.23 p.m.
§ Sir J. Vaughan-Morgan
The right hon. Member for Battersea, North (Mr. Jay) was, rather surprisingly, provocative at moments, within the limits imposed by a Third Reading debate. I am sure that when he replies my right hon. Friend will be able to deal in the same sort of terms with matters of rent control—always, of course, within the limits of a Third Reading debate, also.
The right hon. Member for Battersea, North was on very unsound ground in respect of his strictures on the Bill. Although my experience of parliamentary procedure is not as great as his, I thought that when such a Bill as this was before the House on Second Reading one either voted for it or against it or one put down a reasoned Amendment.
The facts of the right hon. Gentleman's criticism must be seen against the background that he did not lead his party into the Division Lobbies, for the obvious reason that hon. Members opposite were themselves, within their own ranks, as divided as we were. Not being in power they could afford to conceal the matter. But every debate in Committee showed that there were divisions among hon. Members opposite.
I hope that it will be borne in mind that it is to the credit of the Government that they brought in the Bill, and only to the credit of the Government. Though detailed Amendments may have been moved by hon. Members opposite, in substance this is a Government Bill which is being given its Third Reading with the agreement of all hon. Members on this side of the House.
There were two sides to the case presented by the right hon. Member for Battersea, North. One was that the Bill should form part of comprehensive legislation. I always mistrust the word "comprehensive", because one never gets down to specific details. I share, in part, the opinion of the right hon. Gentleman. I, too, should like to see legislation introduced in respect of monopolies, and the sooner the better, but that is no excuse for not taking up an attitude, or refusing to vote for or against a Bill of this kind.
486 The other point made by the right hon. Gentleman was that it would have been, I think his word was "simpler", not to have had this Bill, but to have repealed Section 25 of the 1956 Act. If he thinks that the position produced under those circumstances would have been in any way comparable with what is produced by this new completed Bill, I cannot think that he has been paying as much diligent attention as I have noticed him paying during the proceedings on the Bill.
I think that I shall be speaking for everyone when I say that we are all rather glad to see the back of this Measure. It has occupied a great many days and led to a complexity of debate which I, for one, sometimes found rather baffling.
The other remarkable feature is the calmness of the later stages of the debate, which contrasted with the storms which there were in the earlier stages. That, I think, may be attributed to the fact that a few of us very soon realised that, once the principle of the Bill was accepted, the differences between the two "sides" on this side of the House—I leave out the Opposition; they do not count any more—were not really very great and could be bridged. I think that that opinion has been proved correct.
We have had an argument as to whether or not my right hon. Friend has made major concessions. I think it true to say that he has, particularly with regard to registration and the new gateway on prices. Perhaps, in parenthesis, I may say that I never really thought that the gateway on prices was necessary, but if, in the view of some, it has improved the Bill, so much the better. These improvements have been worth while. Once we accept that the object of the Bill is not, as was originally thought by some, to abolish resale price maintenance, but rather to restrain it—once that step was taken, compromise was inevitable.
I have said what I said earlier about the timing of the Bill. I think that its passage in the earlier stages would have been much better had we had a White Paper about it. I should not like to say that every Bill should be accompanied by a White Paper, but on this occasion I think that our discussions 487 have been very much bedevilled by a lack of knowledge on the part of many right hon. and hon. Members about the background against which the Bill was being introduced.
We have had quoted at us ad nauseam experiences in other countries. If anyone tells me again whether or not the prices in Canada have gone up or down, I shall refuse to listen. We have never had the authoritative background to the Bill. As to the effects it will have when it becomes law—
§ Mr. John Stonehouse (Wednesbury)
In view of the strong feelings which the right hon. Gentleman has about this matter, I wonder whether he made it clear to his colleagues when he was himself at the Board of Trade that a Departmental report should be released?
§ Sir J. Vaughan-Morgan
The hon. Gentleman has got his chronology a little wrong. There was no report to be released when I was at the Board of Trade.
§ Sir J. Vaughan-Morgan
Time marches on; not so the hon. Gentleman. I am largely in sympathy with the hon. Gentleman's point of view on the subject of resale price maintenence, but he should not have introduced such a had Bill as his own Private Member's Bill.
The changes made under this Bill will not be as great as were at one time supposed, or, indeed, threatened. New methods of retailing will now have a chance of being introduced over a wider field. Certainly, it will not have any dramatic effect on the level of prices in the short run.
Perhaps I could go back to a theme which I discussed on the Second Reading of the Bill presented by the hon. Member for Wednesbury, to which I have already referred, and that is how "fed to the teeth" I am with being lobbied by some of the trade associations. If I see another cyclostyled sheet sent out from an office I shall tear it up. We have really seen some of the trade associations absolutely at their worst over this matter. There has been a great 488 deal of propaganda on both sides which has been misleading, and particularly by some of those who have had some kind of vested interest.
§ Mr. Peter Emery
Would my right hon. Friend not say that in this matter some of the trade associations have done themselves considerable harm by some of their propaganda? There seems to be a place for some trade associations in this country, but would my right hon. Friend not agree that in behaving as they have done some have done nobody, including themselves, any good whatsoever?
§ Sir J. Vaughan-Morgan
I agree, but I must go on.
Hyperbole has been a note throughout a great deal of propaganda on the Bill. I am sorry that the hon. Member for Manchester, Cheetham (Mr. H. Lever) is not here. He said yesterday:… the moral forces n the country hold this legislation in contempt …"—[OFFICIAL REPORT, 12th May, 1964; Vol. 695; c. 305.]This conjures up a vision of the whole bench of bishops protesting; or perhaps, a meeting in Trafalgar Square with my own bishop, the Bishop of Southwark, Canon Collins, and all the rest denouncing the abolition of resale price maintenance.
I found in my file of the propaganda a copy of a telegram which was sent to my right hon. Friend the Secretary of State on 4th February and which, at this stage of the Bill, might be illuminating to the House. It reads:If r.p.m. is abolished, every busy shopping day all town centres will be like an ants nest, with a turmoil of millions ricocheting from shop to shop to find the biggest cheap-jack. Great frustration. New mental homes, hospitals, will be needed fast. Certainly, a steep rise in mental cases and accidents".I agree with my hon. Friend the Member for Reading (Mr. Peter Emery) that some very good cases have been badly damaged by the kind of propaganda which has been indulged in, and I hope that it will be a lesson to them for the future.
§ 6.33 p.m.
§ Mr. W. T. Williams (Warrington)
I intervene in the debate with some trepidation, for I have not spoken before on the Bill. This is not from any lack of interest, but for a reason which 489 perhaps I may be allowed to give in a moment. I would pray in my own aid that my interest in the objects of the Bill date over 14 years, because it is 14 years almost to the day since I introduced a Motion in the House to welcome the Report of the Lloyd Jacob Committee on resale price maintenance. I presume that it is from that Committee's Report that a great deal of the later legislation on this subject has stemmed.
That debate is still not without interest, because my Motion was greeted by an Amendment.approving the valuable functions of the mechanism of resale price maintenance in the complicated structure of a modern economic society.The Amendment was supported by a large number of leading members of the Government, both by speech and by vote. Among those who either spoke or voted for the Amendment were the present Prime Minister, the present Lord Chancellor, the present Chancellor of the Exchequer, the Home Secretary, the Pooh-Bah of the Government, the Secretary of State for Education and Science, and, last but not least, the Secretary of State for Industry and Trade, who has now been responsible for the presentation of this Bill.
Not all of those who spoke in that 1950 debate have been converted from their then point of view. The hon. Member for Putney (Sir H. Linstead) stands now where he did then, in fierce opposition to the proposals of the Lloyd Jacob Committee, as does my hon. Friend the Member for Ogmore (Mr. Padley).
No one, of course, knows who of the present Government is in firm support of the Bill who then was strongly opposed to its objects. From what one hears, the Bill is the love child of the Minister who presents it and the Prime Minister—and I hasten to say that I speak only figuratively. It is more rudely regarded by others of the Government as an entirely illegitimate offspring for Conservatives and, one fears, a child, moreover, who is destined to be an orphan in the political storm which has overtaken that party.
I am this much of a convert from my earlier position in that although I 490 moved to welcome the Lloyd Jacob Report, criticising resale price maintenance, I am not enamoured of the Bill. I have little faith in its forebears, the time of its conception, the circumstances of its birth, or its value to the community when it has permission to leave this House and go out on to the Statute Book.
We are told that when the Devil is sick, the Devil a saint would be. The fathers of the Bill were in government 12 years before the thought of it came to them. Even at the beginning of this last Session it had not apparently sufficiently attracted them to find a place in the Queen's Speech. It is true that from time to time the Government have made a parade of tackling the problems related to the cost of living.
In 1948, we had the Monopolies Act, under which provision was made for prohibiting and limiting practices which were contrary to the public interest. The history of the application of that Act does not greatly encourage those who think that the Government are serious in their concern to end abuses of trade and commerce in this country.
Since 1951, when the only order under the Monopolies Act was made, and that was against a restrictive practice in the dental goods trade, 21 other industries have been held to be guilty of practices contrary to the public interest, but only once in respect of those has an order been made. That was in the case of imported timber, and that was only after seven years' delay, after a second report, and after an invitation to the timber importers to abandon their practices had been ignored.
In 1956, we had the Restrictive Trade Practices Act and the setting up of the Restrictive Practices Court. The present Minister of Defence spoke of sounding the death-knell of such practices when he introduced the Bill. Later history shows that he allowed himself more than a little poetic licence, because in 1952 the Registrar of Restrictive Trading Agreements admitted that as soon as the Court declared against any trade agreement the manufacturers, in many cases, abandoned it only to replace it by unwritten agreements which the Registrar had no power to hinder.
In the result, the practices still flourish unhindered. How freely they 491 flourish is to be seen from the evidence of the Chairman of the Central Electricity Generating Board to the Estimates Committee of this House, when he said that, despite the adverse reports of the Monopolies Commission, and despite proceedings in the Restrictive Practices Court, electric cables and transformers were still being sold at restrictive prices.
§ Mr. Speaker
Order. I have not interfered before, because I did not want to get in the way, but we must remember that this is Third Reading, an occasion when we talk about the contents of the Bill.
§ Mr. Williams
Mr. Speaker, I propose to do that immediately.
In the Bill the Minister has huffed and puffed even louder than his predecessor, but with the record behind him—I am sorry if I was a little late in coming to the point—it is not surprising that the fears of the Bill's opponents have been allayed when they have turned from the record to the crystal to see into the future. For all the Minister's fury there is little in the Bill as it stands to deal with the abuses of resale price maintenance. As well as the seven escape clauses which Section 21 of the Restrictive Trade Practices Act conceded to manufacturers, the Secretary of State has conceded an eighth—to restrictive practices which can be shown not to restrict competition.
There is no appeal against the judgments of the Court in respect of the matters contained in the Bill. It is not difficult to see how, with the passing of the years, once agreement has been allowed by the Court, the allowed practice cannot be prevented from becoming a restrictive of competition without let or hindrance. One can visualise matches being sold by amateur economists—
§ Mr. Williams
The manner in which I apprehend that the right hon. Gentleman has attempted that is in Clause 1. There the terms are so narrowly drawn that if a trader or manufacturer, or group of traders, can show that any agreement that is drawn up is not restrictive of competition that would not come 492 within the confines of the Bill. If I am right, this does not, in fact, block up one of the most effective ways by which, over the years, a restrictive agreement between traders has been allowed by the Court.
Once the Court has decided—there being no appeal against the decision of the Court and no return to the Court in respect of such agreement—that agreement can itself in time become restrictive of competition.
§ Mr. A. R. Wise (Rugby)
I am following the hon. Member's argument with great attention, but I cannot see in the early part of the Bill anything which does what he says it does. I only wish I could see it, but I do not.
§ Mr. Speaker
Order. All kinds of possibilities are possible, but we cannot have them as an intervention upon an intervention.
§ Mr. Williams
I am sorry. My technique is not so good as that of my right hon. Friend who leads for the Opposition on the Bill, my right hon. Friend the Member for Battersea, North (Mr. Jay). He may well be right. I think, however, that the point I am making is valid.
Because of the built-in delays in this legislation it appears that it will be years before it will have any impact on the cost of living. It will be years before all the claims for exemption can be dealt with. I was persuaded by the last two Acts that the Government introduced that wholesale prices in restrictive agreements between manufacturers were the targets against which the Government should have directed their attack, not on this plane if they were concerned to tackle the cost of living and give a modern look to their legislation.
Born of such parents, in a sort of shot-gun emergency to make them look respectable before the electorate, it is hardly to be expected that it would be much of a Bill, but at least it has shown, in its progress through this House, how limp our democracy has become to prevent inadequate legislation. I have watched the progress of the Bill with 493 increasing dismay. Rarely can a Bill have found its way on to the Statute Book with such insubstantial support of fact and hard evidence.
§ Mr. John Biffen (Oswestry)
If the Bill is in such a wretched condition can the hon. Gentleman tell us why he did not vote against it on Second Reading?
§ Mr. Williams
I take the view that half a loaf is better than no bread. I say that this is a poor Bill and I shall show how I think it could have been made a better Bill.
§ Mr. Williams
We are faced with the Bill as it is. Hon. Members who have taken an interest in it have been fed to indigestion with half-baked, half-truths from all sorts of vested interests. On this, I entirely agree with the remarks of the right hon. Member for Reigate (Sir J. Vaughan-Morgan). We have had very little opportunity of getting at the facts. Hon. Members have had to rely on what they could find for themselves in what must be the most inadequate research facilities afforded to Members of Parliament throughout the world and from what Ministers have told them. In the result the Bill has been debated with heat which has generated little but smoke.
The Government have forced the Bill through by relying not on hon. Members' knowledge or understanding of its provisions, but on their own patronage and fear of their own followers of the consequences of defeat. It would be interesting to take a poll among Members to try to discover which hon. Member really knows what the effects of the abolition of resale price maintenance have been in other countries. I have read numerous pamphlets which have said flatly contradictory things. Who really knows how particular industries or retail trades or consumers will be affected if this legislation ever grows teeth? Some of my informants must have been telling untruths, but I have no means of testing the truth of the various asseverations which I have received and read. How many trades in Britain really depend for their profits upon goods covered by r.p.m. and how much of it is the sham that the Minister obviously believes it to be?
494 Yet the Bill will be passed and the burden, for better or worse, of its longterm effects will be on the shoulders of those who have for the most part passed it in ignorance of the facts. [HON. MEMBERS: "Oh."] I hope that hon. Members will hear me. In the United States of America such a Bill would not be permitted to become law with such inadequate provision for the real protection of the people. There, Congressional committees, assisted by research experts and skilled investigators, would have conducted fact-finding inquiries and the results would have been available to every Representative before legislation was embarked upon.
Why are we treated less courteously, not only on this Bill but always? Shall we ever be given the facilities to legislate properly? Why when the Bill was brought in could we not have called for evidence and cross-examined representatives of trade associations, retailers and consumer organisations—
§ Mr. Speaker
Order. With the best will in the world we cannot discuss matters of this kind on Third Reading. The rule on Third Reading is that we discuss the contents of the Bill.
§ Mr. Williams
The point I was seeking to make was that on the Bill as it stands those of us who are dissatisfied have expressed our dissatisfaction only with the contents of the Bill because of the failures of the Government to give us an opportunity to learn what the facts are upon which a better Bill could have been introduced.
Surely the time has come when if we are to do our work properly and deal with the issues before us we could be given proper tools for our job and could no doubt make a better job of it. We should be able properly to criticise the limitations of this Bill, limitations which will show themselves in the days to come through the presentation of a Bill which, in itself, will be inadequate and which could have been more properly drafted if the opportunities had been Given to us to do so.
§ 6.50 p.m.
§ Mr. Angus Maude (Stratford-on-Avon)
I think that we must all regret that the hon. and learned Member for Warrington (Mr. W. T. Williams) was not able to give as much time as 495 he has clearly given to the manuscript of his Third Reading speech to making interventions during the Committee and Report stages of the Bill.
If one thing is certain, it is that had he asked the sort of questions which are obviously troubling him now during the earlier proceedings on the Bill, not only would he have been hard put to it to prevent a flood of facts deluging him from all quarters but it is quite impossible that he could have remained ignorant of the things that he was seeking to know.
The trouble during the proceedings on the Bill is not that there has been a lack of information, but a plethora of information from all sides. [An HON. MEMBER: "Not always right."] Not always right, it is perfectly true, and very often contradictory on either side of the House. When the hon. and learned Member says that the Bill was half a loaf and better than no bread, and that he could hardly see it being of any effective benefit to the consumer or to the country, he seems to me to be either less than fair or he does not grasp exactly what the Bill does.
The hon. Member said that he did not believe that it could, within any reasonable time, have any effect upon the cost of living or upon prices. He cannot know that when the Bill is passed it is at least possible, as has been the case in various other kinds of legislation against restrictive practices and monopolies, that many suppliers or groups of suppliers may find it worth while, because it is less trouble, to drop practices which hitherto they have maintained, than to go through the procedure of the Court.
This is one of the things which has been noticeable in every country where this sort of thing has been attempted. Nothing could more perfectly illustrate the state to which the Opposition have been reduced over the Bill than the way in which the numbers of hon. Members opposite taking part in our debates on it have steadily dwindled as the proceedings continued and the way in which the views they expressed have more and more sharply diverged.
The right hon. Member for Battersea, North (Mr. Jay), who said that on some things he was in two minds about the 496 abolition of resale price maintenance, has got himself not only into two minds but into a state of complete schizophrenia. On the one hand, he wants to abolish resale price maintenance and, on the other, he does not want to do it in such a way that it will be effective because he has the gravest suspicions about what will happen if suppliers are not prevented from withholding supplies from retailers.
Yesterday, the right hon. Member went so far as to suggest that the purpose of the Bill was being frustrated by the possibility of direct sales from suppliers to consumers. This seems to me to be a most extraordinary argument. This is a Bill to prevent resale price maintenance, not to prevent direct selling. It is rather like saying that a man is frustrating the objects of the laws against homicide if he does not murder somebody.
The sort of argument which we have been having from the right hon. Gentleman is very peculiar. He says that we should simply have abolished the provisions of Section 25 of the 1956 Act, but this would, in my view, have been totally ineffective. What the Bill does—and we have gone through a great deal of toil and trouble to get it to this stage—is to lay down the criterion of the public interest, to safeguard not only the public interest but the interests of all suppliers, retailers and consumers, and to give us a reasonable chance of getting rid of probably the bulk of resale price maintenance without causing either injustice or hardship to anybody.
The right hon. Gentleman devoted a great deal of his speech—I doubt whether, within the rules of order, I can follow him too far—to suggesting ways in which this could have been achieved other than by a Bill to restrain and restrict resale price maintenance. But it was a very nebulous series of suggestions. So far as one can gather, it involved a general economic policy which we had not heard, a series of controls which we can guess at only too well, and, in respect of monopolies legislation, a general statement that we should have had a general and comprehensive attack upon all anomalies and restrictive practices.
We hope that we shall get that before too long, but let the right hon. Gentleman consider the time and history of 497 this. As he knows, and as he has often said, the practice of the collective boycott was made illegal in 1956. It is true that the individual enforcement of resale price maintenance was also made legal at that time. I was in some doubt then whether we were right to go that far. Looking back, I am inclined to think that the difficulties of trying to abolish resale price maintenance altogether then would have been much greater than they are now, because resale price maintenance covered a much wider field then than it does now.
Where the advantage of the timing of this Bill lies is in the fact that we have been able to see what happened, for example, in the grocery trade, when resale price maintenance was gradually eroded almost to the point of disappearing. We now know that it does not ruin thousands of small shopkeepers where this happens; we did not then. We should have seen much more trouble, alarm and despondency if we had done it then. In fact, it would have been a much larger, more hazardous and perhaps less easy operation. So I think that we probably were right then not to take the whole thing in one bite. I think that we are right to do it now.
The right hon. Gentleman asked why we did not include in the Bill, or a series of pieces of legislation, all the other matters of monopolies and restrictive practices. Surely the fact is that these are very long and complicated operations, and we have got further with those than we had with resale price maintenance. We are catching up in the sphere of resale price maintenance, and by the time we reach the next jump we shall have a base from this Bill from which we can say that the process of derestriction and of modernisation can proceed equally through all levels of industry from manufacture down to retail distribution. This seems to me to be the sensible way to go about it.
The fact remains that the Opposition have never made up their minds about the Bill or decided their collective attitude towards it at any stage. As my right hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan) said, the differences among the Opposition have multiplied as the differences on our side have diminished. I should like to be the first, but, I hope, not the last, to congratulate 498 my right hon. Friend the Secretary of State on his conduct of the Bill and on the way in which he has been open to discuss suggestions and ready to accept compromise solutions where the principle of the Bill has not been eroded. He has not eroded the vital principle of the Bill at any point; this needs to be clearly stated, and it is greatly to his credit.
On the other side of the House some of the debates were little short of chaotic. Hon. and right hon. Gentlemen opposite have risen to intervene in each other's speeches, one stating that he did not want to abolish resale price maintenance at all, one saying that his aim openly was to cause as much confusion as possible during the course of the Bill, others saying that they wanted to abolish resale price maintenance without any exception, and others having variations upon one or the other of these themes.
Some hon. Members opposite have sought to write in the Bill what were virtually named exceptions. We have heard talk about the size of gateways and whether a gateway would admit the net book agreement or the cement industry or whatever it might be. They never seemed to realise that had we followed the principle of writing particular exceptions into the Bill we should have left the way open to discuss writing into the Bill named industries which we wanted caught by the Bill.
§ Mr. Mendelson
The hon. Member is giving a travesty of what happened. If he quotes the argument put forward by my hon. Friend the Member for Ebbw Vale (Mr. M. Foot) about books, he cannot possibly overlook that a whole day was spent on a major Amendment moved by the hon. Member for Putney 499 (Sir H. Linstead) to exclude a whole class of goods. It is no good the hon. Member at this stage, having missed many of the debates in Committee, to give a travesty of what happened.
§ Mr. Speaker
Order. We cannot discuss Amendments which were not written into the Bill or the reasons for them. Hon. Members should try to remember that we are discussing the contents of the Bill.
§ Mr. Maude
I have spent a fairly considerable time on these benches during the proceedings of the Bill, and I assure the hon. Member that there is no need to make a deliberate travesty of the Opposition's performance on the Bill; it has been a travesty of opposition from start to finish. The Opposition have not been able to make up their minds whether they wanted to abolish r.p.m. and, if they did, how they wanted to do it. They had not the courage either to vote for the Bill on Second Reading or to vote against it on Second Reading—or to put forward a reasoned Amendment
§ Mr. Mendelson
The hon. Member is running away from the point which I made. He is not addressing himself to what his hon. Friends did in moving the Amendment.
§ Mr. Maude
Mr. Speaker has already said that the hon. Member was out of order in raising the question. Clearly, I should be out of order in replying.
I am not suggesting for a moment that some right hon. and hon. Gentlemen opposite have not contributed to some very helpful debates during the course of improving the Bill—and, certainly, we have improved it. But it would have been a miracle, had the Opposition been in power—that would have been a miracle, anyway—if they had succeeded in getting through the House a Bill to restrict or abolish resale price maintenance. They have talked about divisions on this side of the House. Goodness knows what would have been the situation if they had tried to pilot such a piece of legislation through the House.
In the end we have succeeded in producing a Bill which, as my hon. Friends generally agreed, meets the fears and 500 doubts of suppliers and retailers, safeguards the public interest and does justice to the consumer. Whatever hon. Members opposite may say, the consumer and the public recognise the value of the Bill and know that it is in their interests. They appreciate that, unlike the Labour Party, the Government had the courage, against some opposition, to deal with this problem.
§ 7.7 p.m.
§ Dr. Alan Thompson (Dunfermline Burghs)
I am a little surprised that the hon. Member for Stratford-on-Avon (Mr. Maude) under-values the deliberative processes of the House to the extent that he expects everybody to say the same thing, either on this side of the House or on his side of the House. What has impressed me about participating in the discussions is how much my views have changed from day to day and the range of experience, particularly on this side of the House, from people who have worked behind counters in shops and who have put forward points of view which I had not previously considered.
There have also been the views of the lawyers, who, I must confess, in the past have sometimes irritated me by their quibbles and who no doubt will irritate me again. Nevertheless, I have been impressed by the way in which they have fastened on quite small points which have affected the rights of individuals and conditions of contract which, again, I had not considered. If the deliberative processes of the House mean anything at all, they mean a constant to and fro of argument and even a diversity of view.
My view is that the Bill is needed, and I support it, although I have qualifications which I shall come to in a minute. Particularly in an inflationary period when, on the whole, prices tend to rise anyway, when suppliers are better organised and when producers are better organised, the consumer tends to go to the wall. I should not have felt the same about the Bill in a period of depression. I should not have liked so much to change the organisation of industry and distribution during a depression when things were bad and people were hard hit. But I think that an inflationary period is exactly the period for such a Bill. Often in a period of 501 minor inflation the consumer is put at a disadvantage in respect of prices and often over the quality of goods and the quality of services.
For this reason, I think that the Bill is needed, and I generally support it. Moreover, formerly in the days of international free trade the consumer was protected by foreign competition. When we have tariffs and all the paraphernalia of protection, he is not protected, and for this reason the Bill is helpful.
Continuing my points in favour of the Bill, I see it as a contribution to consumer education, which has been somewhat neglected.
§ Mr. R. Gresham Cooke (Twickenham)
The hon. Gentleman is giving an eloquent tribute to the Bill, which no doubt many of my hon. Friends are pleased to hear. I should be interested to hear why he did not vote in favour of it on Second Reading.
§ Dr. Thompson
I shall be coming soon to my qualifications. One is always at a disadvantage in answering specific points. I have reservations.
I want to return to the problem of consumer education. I doubt whether any housewife under 35 shops as discriminately as housewives over that age. I doubt whether she shops discriminately over prices, over the quality of goods and over the authority with which she deals with shopkeepers. Shops often pass off shoddy goods. The housewife accepts articles back from the laundry looking as though they had been dipped in a vat of boiling, greasy, oil. She rarely challenges the right of the shopkeeper to put in her bag the most odious fruit instead of insisting on what she wants. In this respect the French or Italian housewife is more adept at scrutinising the tomatoes or apples that are put on the scales.
We accept delivery of cars with doors which do not fit. We accept ownership of houses with interior walls three-quarters of an inch thick. Over this whole range of consumer acceptance we have grown deplorably slack, largely because of inflationary conditions, but for other reasons also. I should like 1964 to be the year of the consumer revolution. We have had the agrarian revolution, the industrial revolution and the Keynesian 502 revolution. I should now like to see a consumer revolution. In so far as the Bill contributes to it—I do not think that it contributes to it completely, and in some respects it does not—I support it.
Consumer education—the consumer revolution—is important. Emphasis in discussing the contents of the Bill has frequently been on the side of suppliers and not on the consumer. It has been said from both sides of the House that we all believe in the small shopkeeper. That is true. There are conditions in which we would all rather deal with the small shopkeeper, have a pleasant little chat and buy goods in a leisurely fashion, rather than be served by a harassed assistant in an over-heated departmental store. There are conditions in which we would prefer the small shopkeeper. These have been gone into at great length.
The inroads into the position of the small shopkeeper and the dangers relative thereto do not necessarily arise from the contents of the Bill. I think that they come from what might be called the changing technology of shopkeeping, the fact that new methods in the organisation of shopkeeping demand much more fixed capital, much more elaborate premises, window displays and lighting. The small shopkeeper faces problems such as that which arise, not only from the changing technology of shopkeeping, but from the changing pattern of consumption, from the fact that more people have telephones and order goods by telephone, and from the fact that many more people have cars and shop around. The objects of the Bill, in so far as they make it possible to compare prices, fit in with this change, with the fact that nowadays many more people have cars and can shop over a wider area. This all fits in with what I believe about the pattern of consumer education.
I have been impressed with some of the points which have been made in support of the contention that the Bill interferes with the business man's freedom of contract. I think that it does interfere with the business man's freedom of contract, but the freedom of contract has never been an ultimate end of economic and social policy. It is true that the Bill interferes with the 503 manufacturer's freedom to trade on his own terms; but r.p.m. in certain conditions interferes with the shopkeeper's freedom to trade on his terms. We have gone into this at great length and I will not pursue it much further.
It is sometimes contended that the distributor is selling the manufacturer's goods and that, therefore, the manufacturer should have the last word. I do not accept this. I do not think that the distributor is necessarily the agent of the manufacturer. After all, he buys the goods from the manufacturer. I think that efficiency in distribution can be best achieved if the distributor does not consider himself as an agent but as a man indulging in economic enterprise in his own right and organising his business as such.
Similar arguments have been advanced about what might be called the economics of the chemist's business. Heaven forbid that at this very late stage we should laboriously retrace all those arguments. One point can be made strongly here. If the dispensing of prescriptions is being subsidised by other aspects of the chemist's business, this fact should be taken care of by considering whether the chemist is getting a fair return for that. The best way to do that is to ensure that each part of the business pays its way. I should have thought that this was good economics.
One point must be faced when considering this question of the National Health Service subsidising the other side of the chemist's business, a contention which I have never been too inclined to agree with. It must be remembered that often it is the other side of the chemist's business, not his prescribing, that involves him in his overheads, his expensive site, his advertising, his large investment in stocks and in sales people. The chemist is often involved in large overheads to deal with the other kinds of business which he would not necessarily have to incur for his purely dispensing activity.
It is true—I am impressed by this point made by the Cohen Committee—that the high standards of the leading firms in the industry are not necessarily reproduced throughout the industry. It is 504 possible that there may well be 10 per cent. of drug producing firms which demand the closest scrutiny and about which we must be very careful. We probably need to be even more careful about imports of drugs. We may have to look very carefully at the question of the safety of imported drugs. I should have thought that this matter was well taken care of by the Advisory Committee on Toxicity and by other similar means.
I have expressed myself strongly because I have strong feelings, and I believe that hon. Members who feel strongly do not object to others expressing themselves strongly. On the question of chemists' goods and the economics of the chemist's shop, there are two points concerning expenditure. There is the question of the administrative measures to control expenditure through the Health Service and its various committees. There is the question of monopoly power over the prices of drugs. I am concerned with both points. I do not want to mix them together. I am very concerned with the monopoly power and the high price of drugs, on the one hand, and with the perfecting of the administrative machine, on the other. The contents of the Bill are improved to some extent by concentrating on price policy and leaving us free to deal with administrative policy and at the drugs industry in a far-reaching way in another sphere.
On balance this is a good Bill, and I support it. I think that it leaves a lot aside. I should like to see the question of misleading advertising and the hire-purchase racket tackled, and wider action taken against monopolies and mergers. I should like to see all sorts of aspects of our obsolete weights and measures legislation tackled and more fundamental measures to reduce rents and house prices. I believe, above all, that in this day and age the consumer should be educated. As we organise ourselves better, as we move into the era of national planning, as we ensure better living standards, as our economists become more adept at dealing in aggregates in national income and input-output analysis, thinking of the economy as consisting of large categories and groupings, we must now turn our attention more to ensuring that the individual consumer gets a fair deal.
§ 7.17 p.m.
§ Mr. A. R. Wise (Rugby)
I am very sorry indeed that the right hon. Member for Battersea, North (Mr. Jay) has left us, because I wished to be the first to congratulate him on the post to which he was elevated by the hon. and learned Member for Warrington (Mr. W. T. Williams), that of Leader of the Labour Party.
I was only hoping that in some ways it might be true, for I have the greatest respect for the right hon. Gentleman. I was a little depressed in other ways, because I am rather inclined to think that he would be a very much better Leader of the Labour Party than the right hon. Member for Huyton (Mr. H. Wilson), because at least the right hon. Member for Battersea, North has been taking some part throughout the proceedings on the Bill.
§ Mr. Mendelson
Seeing that the hon. Gentleman played such a small part in the election of his own leader, is it not rather presumptuous that he wants to take part now in our elections?
§ Mr. Wise
I am sorry, but I cannot go into the esoteric details of how we arrived at what I consider to be a very satisfactory solution of the leadership problem on our side. As this is a Bill of major importance, the right hon. Member for Battersea, North should not have been left so much on his own to carry the Bill through.
§ Mr. W. Wells
May I ask the hon. Gentleman on how many occasions the Prime Minister has intervened in the debates on the Bill?
§ Mr. Wise
I cannot, without consulting HANSARD, say on how many occasions my right hon. Friend the Prime Minister has intervened. I have seen him on the Treasury Bench not less than nine times during the course of our debates on the Bill. I took particular note of his presence, because I felt that at least he was not doing what my hon. Friend the Member for Howden (Mr. Bryan) suggested last night that the Leader of the Opposition was doing, leading his regiment from behind because he found it less exciting.
§ Mr. Speaker
Order. We must get somewhere near resale price maintenance. My indulgence cannot be unlimited in the service of the House.
§ Mr. Wise
I respect your Ruling at once, Mr. Speaker.
Before proceeding I will deal briefly with the arguments of the hon. Member for Dunfermline Burghs (Dr. A. Thompson), who welcomed the Bill for rather curious reasons. He said that he is in favour of the Bill in a period of inflation, but would be against it in a period of depression.
§ Mr. Wise
I wonder what would happen if an ultimate disaster produced a Government who, in turn, produced a depression and inflation at the same time. What action would the hon. Member then take to a Bill of this nature? Fortunately, such a situation is unlikely to happen. On the other hand, the hon. Member for Dunfermline Burghs appears to be trying to see it happen—and I urge him to take the most careful thought of what his action would be in such circumstances.
Time is limited for the Third Reading debate. I opposed the Bill on Second Reading because I thought that, on the whole, it was wrong. I am not repentant of the attitude I took and I am still not in any way convinced that I like the Bill even as it stands. However, there is no question from my outlook but that I consider it a very much better Bill than it was when it started. I am grateful, as are many people who thought with me, to my right hon. Friend the Secretary of State for Industry and Trade for having taken much trouble to consider our various points of view and to meet them on many occasions.
I have totted up some statistics and have noted that there have been 10 major alterations in the Bill, all of which have been improvements. This redounds to the credit of my right hon. Friend, for he has been extremely forthcoming and has managed to carry out this long and strenuous battle with much good temper. Credit is also due to my right hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan), who has played a part of great importance in our deliberations without seeking any publicity for what he has done. His services in bringing opinion together on this side of the House have been 507 invaluable, and I am sure that my right hon. Friend the Secretary of State is grateful to him.
As my hon. Friend the Member for Stratford-on-Avon (Mr. Maude) pointed out, as opinion has spread wider and wider on the benches opposite it has drawn closer and closer on this side of the House. In my view, the proceedings on the Bill have been a great tribute to the functioning of Parliament. Nobody can get everything he wants in this world. Throughout our proceedings there has been confusion on the benches opposite as to whether this was a major Bill, a difficult Bill, and whether or not my right hon. Friend ever made any concessions. I trust that I will not be stretching your patience too far, Mr. Speaker, if I illustrate this by mentioning one or two things which occurred during our proceedings.
I recall a protest which was produced by the right hon. Member for Battersea, North shortly after the Second Reading, when he said that we were faced with an impossible situation—that we were faced with a different Bill, that no less than 10 Amendments of a complicated kind had been tabled and that nobody had had a chance to see what had been done. He also said that insufficient time had been given to study a complicated series of changes. Later the same night he said that it seemed remarkable that such changes had been made in the Bill. He cannot have it both ways.
§ Mr. W. Wells
Perhaps the hon. Gentleman will appreciate that between the time of my right hon. Friend speaking on the first occasion and the time of making his second utterance that night, a few hours had elapsed, during which he had had time further to study the Amendments about which he had been speaking.
§ Mr. Wise
I am prepared to accept that a few hours had elapsed, but not that so hasty a judgment need have been passed in the first instance. The habit of talking before thinking is too prevalent among hon. Members opposite. They should, if possible, avoid doing that.
I do not wish to delay the House. As it now stands, the Bill should not 508 have all the ill effects we at first thought might occur to persons for whom we have the greatest respect in our constituencies, many of whom we know personally and to nearly all of whom we have spoken. The Bill will give a chance to persons to prove a good case; and if they have a good case they will be able to maintain a system of trade which I believe, on the whole, has been justified in the past and which, I think, will justify itself in future.
I am sure that I speak on behalf of those who may be affected by the Bill in saying that if it is shown that the practices in which they indulge are not in the national interest they will be only too ready to accept the decision resulting from the Bill and stop what they are doing. That is why we have functioned as a Parliament should function.
Despite the remarks of the hon. Member for Dunfermline Burghs, I recall what happened during our discussions on 23rd March. It was a significant incident which illustrated the difference in our respective political outlooks. We had been discussing an Amendment on which there might have been a Division. My hon. Friend the Member for Burton (Mr. Jennings) called the Opposition's bluff on that occasion and said that if hon. Members opposite went into the Lobby he would go with them. There was a glare from the Opposition Front Bench, but that was all. No hon. Members opposite went into the Lobby. I mention that incident in the hope that it will be noted in the country at the appropriate time. It shows that if we really want a functioning back bench it is as well to keep a Conservative Administration.
§ 7.28 p.m.
§ Mr. R. E. Winterbottom (Sheffield, Brightside)
I always enjoy the wit of the hon. Member for Rugby (Mr. Wise), but I question his political philosophy. He wants to know what would be the view on a Bill of this kind of my hon. Friend the Member for Dunfermline Burghs (Dr. A. Thompson) in the event of an economic depression and inflation occurring at the same time. The hon. Member for Rugby wonders how such a situation could occur. He should know that it can because only 12 months ago we had economic depression, in the shape of more than 900,000 unemployed, 509 and a sort of inflation—one might call it a cost-plus inflation—of an alarming kind. I hope that he will study that point. I prefer to think of the hon. Gentleman as a genial rebel.
I am told that the rebellion on the benches opposite over this Measure—a rebellion which began the moment the Bill was introduced—has been prevented from becoming really troublesome to the Government as a result of a slow process of compromise. I am reminded of the man giving advice to the newly married couple. He said, "I can only hope that in your future married life you will learn to compromise as I did 30 years ago. I quarrelled with my wife on the first day of our marriage over whether I should sleep between blankets or sheets. Thank goodness, we compromised. She wanted blankets and I wanted sheets. For 30 years, I have slept between blankets".
The compromise on the Government side of the House has been like that. The lion has lain down with the lamb. I am not quite sure, but I think that it is the rebel lamb which has lain down with the compromising lion in the form of the Secretary of State. Perhaps it would have been better if we had had more freedom of action on the Bill in the House. If there had been a little more rebellion on both sides, perhaps we could have got down to the fundamentals and had a little more practical experience applied to the issues which the Bill raises.
The Parliamentary Secretary said that this was a bad Bill. This was a confession. I am not blaming the hon. Gentleman for it. He said that it was a bad Bill which had been made better.
§ Mr. du Cann
With respect—I realise that it was an honest mistake—I must tell the hon. Gentleman that, in the first place, I am not the Parliamentary Secretary, and, in the second place, I never said that it was a bad Bill, or anything like it.
§ Mr. Winterbottom
I took the hon. Gentleman's words down. If he was quoting someone else, perhaps I misunderstood, but someone has said that this is a bad Bill which has been made better.
§ Mr. Winterbottom
I take the quotation from the hon. Gentleman then, but I say that it is not a bad Bill which has been made better. It is an impossible Bill which has been made tolerable, but only just. It has been made only just tolerable, because the Minister—I give him this—has been wise enough to sense some of the temper of the House at least and to yield when he thought that there was substance in what was, unquestionably, the feeling of the House. From that standpoint, I congratulate the right hon. Gentleman, even though I must be quite frank at the outset and say that I do not like the Bill and have never liked it. Even with all its Amendments, it is still a Bill which I can never accept.
This does not mean that I disagree with the abolition of resale price maintenance. I do not disagree with the restriction of resale price maintenance. But I do not consider that the Bill approaches the problem from a practical point of view to achieve the aims of those who believe that we should have either the restriction or the abolition of resale price maintenance.
To a certain extent, the Bill makes more difficult the position of those retail organisations which have had trouble in getting goods as a result of the prohibitions operated against them under resale price maintenance. For just about the whole of my life I have suffered because of these prohibitions. Even when I was a boy, before the time when my hon. Friend the Member for Wednesbury (Mr. Stonehouse) began his connection with the London Co-operative Society, and long before we heard the term "resale price maintenance", we had the Proprietary Traders Association and its restrictions. I suffered in those days from the prohibitions directed against co-operative societies.
So far as these prohibitions are eliminated by the Bill, I am glad, although I do not think that the Bill goes the right way about it. I do not like to think that trade bodies can fix minimum prices and carry through their intentions by dictatorial methods applied to organisations which are not part of their own organisation, to people who are completely divorced from them either in terms of capital or in terms of 511 authority. They have no right to tell them what they should charge for the goods they have bought. That is quite clear, but this is all operating in a system of competition such as we have today. If the Bill does something along those lines, it will serve a useful purpose, but I do not believe that it does it in the best possible way.
The Government have lacked the courage to face the real issue. The Bill itself is not directed to the real issue. I do not know whether it is correct or not, but information which I have received leads me to believe that, before the Bill was framed, there was no consultation between the Government Department and the associations of traders and trade unions concerned, with their practical knowledge of the trade and all that it involves. Had that consultation taken place before the Bill was framed—
§ Mr. Winterbottom
Perhaps we should not—I do not know—but, even if one cannot get agreement through consultation and discussion, one can at least find out why we should not have the Bill.
I have had some practical experience in every section of the trade, on the retail side and on the wholesale side. I know what has been the experience of my friends in every branch of distribution, and I know that, over the years, they have suffered as a result of what has been happening and the failure on someone's part to tackle the abuses within distribution itself. I believe that the trade associations and trade unions would have met the Minister in consultation with a view to evolving a much better Bill than this to deal with the real problems of resale price maintenance.
I am not suggesting that I should be right every time in what I would do, but I know this much: if I were a spiv, a drone or a racketeer. I should be wanting to send telegrams of thanks and congratulation to the Secretary of State.
§ Mr. Winterbottom
Perhaps they are. I know that the prayer to the Almighty on the open markets of this country has 512 associated with it lately a very distinct prayer for the right hon. Gentleman, because people know that, if they can get good weather and the right hon. Gentleman's Bill, they will be in clover. The spivs, the drones and the racketeers have everything they want in the Bill. Yet this situation could have been prevented by wise co-operation and consultation with the people who represent the trade and the trade unions in the distribution world.
§ Mr. Arthur Holt (Bolton, West)
Is the hon. Gentleman implying that we could have done away with the Bill and just had an outright abolition, with no exceptions at all? This is very interesting, if that is his point.
§ Mr. Winterbottom
I have made no suggestion of that kind. That arises out of the fertile imagination of the hon. Gentleman.
All that I am saying is that consultation would have produced something far more practical and effective than the Bill. I am not falling for the trap of fighting the hon. Member's battles. He must fight them himself. I believe that consultation would have eliminated the danger of the "wide boys" taking advantage of the Bill.
The Secretary of State yesterday agreed that the Bill could affect those sections of the distributive trade where, for all practical purposes, resale price maintenance had been abolished. There is very little resale price maintenance in the grocery trade. The right hon. Gentleman says that, if the inspiration of the Bill tends towards the re-creation of resale price maintenance in the grocery trade, there is no difference from the existing situation. He is perfectly right. Resale price maintenance can be re-created in the grocery trade before the Bill become law. But it will be much easier to do it when the Bill has been passed.
§ Mr. Winterbottom
In almost every trade, particularly in the grocery trade, where resale price maintenance did not exist before it will be much easier to introduce it now.
§ Mr. Maude
The hon. Gentleman should address himself to this problem. 513 There is nothing whatever to prevent resale price maintenance from being imposed in the grocery trade now, except that it has been proved that it does not work. It will not work any better economically, or, from the trading point of view, be any more satisfactory after the Bill is passed. What is more, whereas it can be imposed legally now, it probably will not be possible to impose it legally after the Bill is passed; and in either case it will not work.
§ Mr. Winterbottom
My view is the converse of the hon. Gentleman's view. It will be possible under the Bill to bring about resale price maintenance in sections of the distributive trade which had abolished it—
§ Mr. Winterbottom
The point is that it can be economical to re-establish resale price maintenance in connection with specific goods in certain sections of distribution.
§ Mr. Winterbottom
Because the Bill will give protection. In the past, they have not been protected.
§ Mr. Winterbottom
Under the Bill they can follow through the test cases which go before the Restrictive Practices Court, and they can follow through the test of the Clauses of the Bill and, by so doing, secure the re-establishment of resale price maintenance. I prophesy that this will take place.
§ Sir D. Glover
I am very confused by the hon. Member's argument. Is he so in favour of the abolition of resale price maintenance that he thinks that the Bill does not go far enough in bringing in Clauses which would stop the grocery trade reimposing resale price maintenance? I do not understand to where his argument leads.
§ Mr. Winterbottom
I am not arguing that at all. I have not come to my final argument on the point yet. I am just saying that the Bill can promote the re- 514 establishment of resale price maintenance in sectors where it has been abolished by practice.
§ Mr. Winterbottom
If it is in the economic interests of the trade, that will be done, and these sections of trade will be protected by the Bill.
If, under the Bill, it will be possible to promote resale price maintenance, would it not have been better, instead of dealing with the situation as it is, if we had faced the real issue of resale price maintenance and dealt with the nature, quality and price of goods as they exist in all sections of distribution from the point of view of the margin which it would be fair to allow to all traders? I believe that automatically, without the Bill, resale price maintenance would have been abolished and that all traders on the wholesale, retail, and manufacturing side would have been given a fair crack of the whip.
§ Mr. Winterbottom
Who decides now? There is not much inspiration to reduce margins now. There may be an increase of margins as a result of the Bill. In some sections of the distributive trade an increase of margins is called for. In the grocery trade an overall margin of 16 per cent. gross profit is not excessive. In many cases, overhead costs closely approximate to that figure. I believe that there is a case in the grocery trade for considering widening the margins to give a greater gross profit at the beginning.
§ Mr. Biffen
It is very important to get this on the record and to get it straight. Is the hon. Member arguing that there is a good case for having increased margins in the grocery trade and, therefore, that there is a good case for increasing the retail price of groceries?
§ Mr. Winterbottom
There is a good case for increasing the margins in the grocery trade. The 16 per cent. gross overall profit is insufficient in most cases to meet the needs of the industry. There is a case, which cart be substantiated in terms of any independent investigation, for investigating whether that margin 515 should not be increased. I believe that the increase in that margin will be inspired by what has happened in the Bill.
Because of these things—I make this declaration only in terms of prophetic judgment—I believe that in certain sections of distribution there will be the re-establishment of resale price maintenance because it will be an economic proposition to do so. Secondly, I believe that in certain sections of distribution there will be, as a whole, an increase in the gross margins, because as a result of the Bill traders will have collectively to examine what exactly is their position in society from a trading point of view. That will be the result. The Bill will not have been worth presenting to the nation if it inspires things of that kind.
§ 7.52 p.m.
§ Mr. Graham Page (Crosby)
The hon. Member for Sheffield, Brightside (Mr. Winterbottom) has made a number of valuable contributions to the Bill in earlier stages, but I hope that he will forgive me if I do not follow him today down the road of lions and lambs, of blankets and sheets, of spivs, drones and racketeers, and of consultations with the trade unions. Rather will I concentrate on what is contained in the Bill.
I start by sincerely thanking my right hon. Friend the Secretary of State for the way in which, throughout the proceedings on the Bill, he has listened to and has been ready to relieve the anxieties of hon. Members and of their constituents—anxieties which, when the Bill was published, were put before us, in correspondence and at meetings, by our constituents. My right hon. Friend has always been ready to listen to us when we have put those anxieties before him.
There is no doubt that there was great concern when the Bill was published particularly amongst the independent shopkeepers. Their anxiety was that something, on which they had based their trade for many years, might be taken away from them. They felt rather as if a rug was being pulled violently and suddenly from under their feet and that they would find themselves, financially, flat on their backs. It may be that this feeling was partly emotional, it may be 516 that it was a flame fanned by propaganda from manufacturers and trade associations, but there was fact in it.
That concern was based upon a foundation of fact. There were, for example, the unremunerative services which are so frequently carried on by the small shopkeeper, by the independent retailer, which honestly and genuinely those people felt that they might not be able to continue if they were deprived of the stability which resale price maintenance agreements gave them. I refer to such services as dispensing by the chemists, newspaper delivery rounds by the news-agents, after-sales maintenance by electrical goods retailers, and so on.
The individual traders said, in effect, that if they could not be certain of a steady income, they could not perform those services. It was not so much a case of services being subsidised by sales as that by means of resale price maintenance they had been given stability in their income. If they could not be assured of that steady income, they would not be able to stock up, because next day, perhaps, they would be undercut by the store around the corner.
When the Bill was published, it was not only the retailer who was worried, but members of the public also. If the small retailer was to be put out of business by price reductions, would those price reductions remain when he was out of business? This was what people wondered when reading the Bill as it was first published. How long, they wondered, would the supermarkets and big stores really keep down their prices when they had destroyed the independent retailer who is their competitor. There was a real fear that retail monopolies might be created by the Bill.
For these reasons, some of us desired to ensure that neither the independent shopkeeper nor the shopper suffered from the terms of the Bill. Hon. Members opposite have, at times, joined with some of the newspapers which normally support the Government in scoffing at the efforts of some of the Government backbenchers in trying to get the Bill into good shape. They have talked about abortive revolutions from the back benches on the Government side. Let me, however, call attention to what has happened to the Bill and what is now 517 in it as a result of whatever people call it, whether rebellion, revolution or anything else. It is not a question of concessions being exacted from my right hon. Friend or of victories by so-called rebels. It is merely ordinary but effective Parliamentay work on proposed legislation.
The anxiety of the retailer had been increased by the procedure which had to be adopted under the Bill as it first stood. At first, retailers thought that r.p.m. was to be declared illegal right away, that they had to give notice of a reference and that they had, in effect, to claim legality. As the Bill first appeared, it branded the r.p.m. agreement as something rather "untouchable" and it made those concerned feel that they had lost the game before they started. To overcome this, my right hon. Friend agreed to the Amendment which provided for registration rather than application by those concerned, leaving the Registrar to take the initiative in making the reference. This was, perhaps, a difference in attitude and not really of substance. Nevertheless, it was important in creating the setting for the rest of the Bill.
The next major point, which came in Clause 2, was concerned with the prohibition of withholding goods in order to enforce, by the back door, an r.p.m. agreement which was declared void by the Bill. There was great feeling that by reason of the penalties imposed on a supplier for withholding goods, the supplier who refused to give one dealer the advantages which he was prepared to give to another would be forced to withdraw the advantages from the latter.
As it first stood, Clause 2 threatened the disturbance of well-settled trade custom and practice and the relationship between suppliers and dealers. The Amendment which was made to the Bill yesterday—that it is not unlawful to withhold supplies if it is for a reason other than selling under the recommended price—has relieved that anxiety. As the Bill now stands, the supplier is not forced to withdraw benefits from what might be called his loyal retailers for fear of having to give them to what the hon. Member for Manchester, Cheetham (Mr. H. Lever) called the "seedy dealer". In particular, the Amendment 518 concerning cash and credit was helpful in this way by ensuring that refusal of credit terms should not lay the supplier open to penalties.
Clause 3 gave rise to anxiety among the independent shopkeepers about the use of loss leaders by large concerns which had the capital to use them, that is to say, to throw away goods in order to acquire trade. Before the Bill was publicised, my right hon. Friend was urged to protect the man with the small capital who could not compete in this way. My right hon. Friend's first Clause did not go as far as it could, and it was not, to many of us, satisfactory. But the Clause now brought into the Bill is a far more satisfactory one and avoids unfair competition from loss leaders.
Then we come to the so-called gateways. I think that is a misleading phrase. Clause 5 was a protective Clause for resale price maintenance agreements which do no harm to the public as consumers. As the Bill was originally drawn, this protection was substantial. The so-called gateways were fairly wide, in particular the one which referred to the number of establishments. I am sure that if the abolition of a resale price maintenance agreement will cause a reduction in the number of establishments from which goods are sold, that goes to the whole root of the claim of the retailers who say that their agreements are for the benefit of the public, and thus exempts them from the Bill.
The addition of the gateway concerning danger to health should satisfy the retail chemists in the case which they put before hon. Members and which was put before the House in the course of the Committee stage.
On Report there was introduced the further protection of the prices gateway; if the abolition of a resale price maintenance agreement causes or is likely to cause a rise in prices, it must be retained. This shows consideration for the customer. Unless one has such a gateway—such protection—in that clause, the Bill might well be purposeless. After all, the whole point of the Bill is to reduce retail prices, and if the abolition of the resale price maintenance agreement will cause an increase in prices, the Bill does not achieve its purpose.
519 There were a number of other Amendments in the course of the Committee and Report stages which have now been brought into the Bill. There is the recognition of the right of retailers and employees in the distributive trade to come before the Court and put their case before the Court. I deliberately say "put their case before the Court". It may well be a case in which they are saying "The agreement which affects us does no damage to the public as consumers". Surely that is, although put that way, the retailer's case. It is also, the case of the employees in the distributive trade for retaining a resale price maintenance agreement. To recognise the rights of those people to come before the Court relieves many of the anxieties in the trade, I am sure.
There are just three more Amendments that I will mention—the relief to those who have been through the hoop once, who have come before the Court previously and have put the facts before the Court; the relief as to costs in a number of cases, not quite so many cases as I should have wished, but there is some relief in the Amendments which have been accepted; and the clear statement in the course of the proceedings yesterday that this Bill does not attack agency agreements.
Finally, I will summarise the Amendments which have been introduced into the Bill and which I think justify my claim that back benchers on this side of the House have not done damage to the Bill by being a little persistent in what we wanted to see in the Bill but have produced something a little better than the Bill when it started. We have got registration, not an application for legality; some relief to trades which have already come before the Court; permission to withhold goods for other than price reduction reasons without a penalty for doing so; an opportunity to prove the public benefit in certain trading arrangements and thereby escape condemnation under the Act; consideration for the case of the retailers and the employees in the distributive trades; the condemnation of unfair competition from loss leaders. These were Amendments accepted, rightly so, by my right 520 hon. Friend during the progress of the Bill.
I finish as I began, by expressing gratitude to my right hon. Friend and congratulations upon the way in which he has conducted the Bill through to this stage.
§ 8.7 p.m.
§ Mr. R. T. Paget (Northampton)
The House must seldom have heard a more nauseating exhibition than the rebels in this matter recanting. [HON. MEMBERS: "Rubbish."] They are deceiving nobody. There is not a newspaper which has followed and analysed the Bill that has not said, and said with justice, that the right hon. Gentleman has not made a single concession of any importance. [HON. MEMBERS: "Rubbish."] The rebels know this perfectly well.
There is registration instead of application. This is perhaps a matter of morale. It makes no difference at all. It is merely a change of words in order to soothe the runaways. I can see no more useful job that Transport House can do than to analyse the performance of each of these hon. Gentlemen, beginning with their high promises—
§ Mr. Paget
—the hon. Gentleman can wait just a little—their demagogic assurances, the headlines which they all got in their local newspapers, in which they were described as splendid chaps standing up for the little retailer, the points which they made and said they would stand by, and then the utter cowardice with which they have bolted.
That pamphlet needs to be prepared, and Transport House will do it, and it will be there for issue in the constituency of each hon. Member, because, regardless of anything else, they have proved themselves to be people who are just not fit to be Members of Parliament.
§ Mr. Graham Page
I am grateful to the hon. and learned Gentleman for giving way. I wanted to ask him if he knew whether Transport House was bringing out a similar pamphlet about his own rebellion against his Front Bench.
§ Mr. Gresham Cooke
The hon. and learned Gentleman must now say whether he intends to vote against the Bill tonight.
§ Mr. Paget
Having seen this quitting, let us now see what the Bill does. Various of my manufacturing constituents and other constituents in grave anxiety about what would happen and how they would be affected have written to me. I can write back to my manufacturers and say, "Do not worry your heads a bit. If you want to retain resale price maintenance, you will not have the slightest difficulty. You can come round to see me at the town hall on Friday, where I usually am, and I will tell you how to do it and I shall have the greatest pleasure doing so."
§ Sir D. Glover
The hon. and learned Gentleman cannot make this invitation to his manufacturers and then say that the so-called rebels on this side of the House have achieved nothing. He cannot have it both ways.
§ Mr. Paget
The means of walking round the Bill have not been introduced by any of the rebels or any of the Amendments. They would have applied with just the same effect if the Bill had been unamended. The agency system, which any manufacturer who chooses to retain his resale price maintenance can adopt, was available before the Bill was amended in exactly the same way as it is available now.
I also have to write to the real sufferers, who are the small retailers, the people who, in instance after instance, have invested their savings in a small business to cushion their retirement on inadequate pensions, who have a small turnover and who could never have anything except a small turnover and whose livelihood depends on the maintenance of the margins on which they calculated and on which they bought the business and on which they live. All I can tell 522 them is, "Nothing can be done for you; you are sacrificed; you are dead; your business has gone and you had better shut it up; you are done".
The big man is all right. He can walk round the Bill, but the little man is helpless. This is a typical Liberal Measure and Liberal Measures are charters of the strong against the weak. That is what Liberalism means and has always meant—free trade and laissez-faire—these are the means by which the rich get richer and the poor get poorer. Throughout the world it has always been so.
Do not let hon. Members imagine that they will get electoral advantage from this. The one piece of wisdom of democracy and the one answer to the evil thing Liberalism is universal suffrage. Wherever there is universal suffrage, it is certain that the Liberals will be destroyed. Bismarck was the first man to see that and Disraeli followed. All through, with universal suffrage, when the people can look to their real interests, the Liberals are destroyed.
§ Mr. Deputy-Speaker (Sir Robert Grimston)
This is all very interesting, but I do not think that we can have a philosophical discussion on Liberalism and Toryism on the Third Reading of the Bill. I ask the hon. and learned Gentleman to come back to what is in the Bill.
§ Mr. Deputy-Speaker
In my opinion, the hon. and learned Gentleman is getting rather far away from the Third Reading.
§ Mr. Paget
We will see how the Bill works. At one point, hon. Members opposite who knew perfectly well that this was an attack upon established interests, upon order, upon the position which had been built up by the small trader within the custom of the Realm and of the distributive trade, and which had been built throughout those years, and who knew that that was wrong, marshalled themselves to vote against Second Reading.
Not one of the features which they attacked then, not one of the features which was attacked in the speech of the hon. Member for Rugby (Mr. Wise), has been removed. Not a principle of the Bill has been altered. The Secretary of State can proudly say, "I conceded nothing of substance". The people who knew it was wrong—and that does not include the hon. Member for Reading (Mr. Peter Emery), who is a Liberal who has strayed into the Tory Party; because there are no votes in Liberalism—
§ 8.18 p.m.
§ Mr. Peter Emery (Reading)
The most entertaining and delightful speech of the hon. and learned Member for Northampton (Mr. Paget) was underlined in its inexactitude and incorrectness by his suggestion of the part which I played in my constituency, whether I was a Conservative or a Liberal. I hope that he will come and make a speech along those lines in my constituency in the next few days, especially as a Liberal has just been adopted against me. The only interest of the Socialist Party is that its members believe that they can get into power on the wings of the Liberal Party and in no other way.
Let us get back to the Bill. I have been unrepentedly in favour of the Bill ever since it was introduced. I congratulate not only my right hon. Friend and his Department but the Government 524 on having the guts to introduce the Bill during the last year of this Parliament. This only goes to prove more than ever the Government's insistence on doing what is right and proper irrespective of the popularity of any Bill and its effect on the Government's popularity in the country.
What I think is most unfortunate is the emotion which, quite incorrectly, has been engendered, mainly through a lack of knowledge about what the Bill was intending to do. I believe that in many ways small shopkeepers have, quite incorrectly, been made to fear for their livelihood. This fear has been maliciously engendered by some hon. Gentlemen opposite, and has been fanned by some of the trade associations who, although they have a considerable part to play in the proper working of industry and commerce, have vastly overstated the benefits which they can bring about.
§ Mr. A. E. P. Duffy (Colne Valley)
Will the hon. Gentleman say which of my hon. Friends have raised unnecessary fears in the breasts of small shopkeepers?
§ Mr. Paget
As the hon. Gentleman and his colleagues know, the only difficulty is that the fears of the small shopkeeper are real. He cannot raise his turnover. He is crippled if his margin is destroyed, and the purpose of the Bill is to destroy that margin. Do not let us add to the hypocrisy by pretending that these people, described by the Government Front Bench as an inefficient distributive channel, are not to be sacrificed.
§ Mr. Emery
I know that the hon. and learned Gentleman has great experience of the retail trade from the tuck shop at Eton and places like that, but let us not attempt to mislead people. It has always been the policy of the Conservative Party that competition should be properly encouraged. It has never been suggested by the Government that inefficient producers and inefficient retailers must, for their own sake, be kept in operation. If the hon. and learned 525 Member for Northampton is suggesting that they should be, that should be kept very much in the forefront of the record. What the Government have said many times on this Bill is that there is no reason whatsoever why the small shopkeeper who gives service, who gives credit, and who is as efficient an aspect of the distributive trades as any other organ, should have anything to fear, and that is as true now as it was when the Bill was first introduced.
If one analyses Clause 5 which sets out the basic stands whereby resale price maintenance can, if necessary, and if judged by the Court to be necessary, be retained, one gets over the emotion which has been aroused by some of the trade associations. The argument that resale price maintenance can be maintained if the quality of goods available for sale would suffer, or the number of establishments would be reduced, or certain necessary services would cease to be provided, or there would be a danger to health, if it was abolished, has been embodied in the Bill. This may not appeal to the hon. and learned Member for Northampton and some of his hon. Friends, but we in the Conservative Party have always believed that where the public interest can be bettered by resale price maintenance, it should he. I believe that it is because that aspect of the matter has not been properly put over by many of the trade associations that there has been so much emotion aroused about the Bill, and so much opposition to the theory of the Bill. There has not been any opposition to the actual practice or the actual working of the Bill.
If what pharmacists have said time and again to almost every hon. Member about the services which they give, the possibility of those services being reduced, and the quality of their goods being affected, is true, then resale price maintenance for the chemical industry will be maintained. If it is not true, then it ought not to be maintained. What is more, I believe that most pharmacists accept that argument.
Members of the Opposition have found themselves in a particularly difficult position. One or two of them have been permanently opposed to it.
§ Mr. Emery
Oh, no. Surely my hon. Friend is not suggesting that they should carry their principles into the Division Lobby? We simply could not expect that from hon. Gentlemen opposite. The hon. Member for Wednesbury (Mr. Stonehouse) is a great advocate of the Bill, but did he follow us into the Lobby? On two or three occasions I passed him while on my way into the Division Lobby in support of the Bill. But I give the hon. Gentleman some credit. Now and again he has had the guts to abstain, but that is as far as he has gone. None the less, it is further than most of his party have gone.
What about the improvements in the Bill? I believe that considerable improvements have been made. The basic principles have been maintained, but the action of Conservative Members has produced a considerable number of improvements. For example, loss leaders have been much more clearly defined. The onus of proof, and finance on credit, which is a very small and marginal point, but one of great importance where it will apply, have been clarified. The question of registration, although made light of by some, is also of great importance.
One of the things about the Bill that has been proved in the last two and a half months is that the criticisms that have been made about both sides of Parliament—that Members are just Lobby fodder, dominated by the Whips—
§ Mr. Jay
I agree with much of what the hon. Member has just said, but the Hire Purchase (No. 2) Bill, now going through the House, has been almost totally altered as a result of the efforts of the Opposition.
§ Mr. Emery
I am sailing close to the wind already. If I allowed myself to become involved in a discussion of the 527 Hire Purchase Bill I should be ruled out of order. I am sure that the right hon. Member realises that. Nevertheless, I am glad to have given way to him, because I want to refer specifically to part of his speech. He criticised the Bill because it did not go far enough—because it did not impose the sort of price control that he would like, and that in past years he has always regarded as necessary. He mentioned the question of rents, and I thought that he went on to suggest that there should be control of anything that has any value. My memory is jogged in that connection, and I am reminded of the remark made by somebody that the man in Whitehall knows best. I am not sure who said it, but I am sure that the right hon. Gentleman will remember it only too well.
It seemed to me that he was coming perilously close to exactly the view that was propounded a number of years ago when he said that this Bill was not good enough because it did not impose sufficent control. If that is the extent of his criticism we should make known exactly what arrangements he made in the past. That should be put clearly on the record.
§ Mr. Jay
That is exactly the opposite of what I said. Evidently the hon. Member did not listen. I protested against the Government's present policy of controlling food imports in order to raise prices against consumers here. If that control were not introduced there would be some benefit to consumers. The hon. Member supports a Government which has introduced that control.
§ Mr. Emery
I listened very carefully to the right hon. Gentleman's speech. I always feel that he thinks his speeches out most carefully, and does not—as many of his hon. Friends do—speak without considering what he is saying. But the right hon. Gentleman talked specifically about rents and their influence on prices. He may not like to admit it, but the country should realise what he has suggested. He should go on to the logical conclusion. A woman cannot be half pregnant; she is either pregnant or she is not.
§ Mr. Emery
Whenever one gets through the guard of hon. Members opposite—whenever any criticism begins to tell—they either become very noisy and begin to interrupt their opponents' speeches, or dismiss them as nonsense. But let me get back to the Bill before I am called to order.
Great credit should be given to my right hon. Friend the Secretary of State. He and his Department have worked unceasingly in an effort to improve the Bill and to meet criticisms and suggestions brought forward by my hon. Friends in an endeavour to make the Bill a better one. I believe that the Bill will help to modernise our retail trade, if not the whole of our industry. One thing that has not been mentioned is the effect—even if it be a small one—that r.p.m. has on industrial purchasing itself. If it is swept away there will be a definite decrease in prices. This is a move in the right direction. For that reason, having supported the Bill from the beginning, it gives me great pleasure to be able to support its Third Reading.
§ 8.35 p.m.
§ Mr. John Stonehouse (Wednesbury)
One observation may be made about the hon. Member for Reading (Mr. Peter Emery) without fear of contradiction. It is that he always supports and applauds whatever is said by his right hon. Friend the Secretary of State for Industry and Trade at any one time, although that Minister changes his opinion frequently. At least, the hon. Member for Reading is consistent in that, and we congratulate him to that extent.
§ Mr. Stonehouse
My worst fears about the Bill were confirmed, when I heard the felicitations which the hon. Member for Rugby (Mr. Wise) and the hon. Member for Crosby (Mr. Graham Page) addressed to their own Front Bench. If the rebels who so gallantly went into the Division Lobby to vote against the Bill, and who made very distinguished contributions to our discussions, are now able to accept it with such a glow of happiness over their countenances, there must be something wrong with the Bill; and indeed there is.
§ Mr. Stonehouse
Reference has been made during the debates on the Bill to lions and lambs. I prefer to believe that the Secretary of State for Industry and Trade came to the House in February roaring like a lion. Now he is going out rather like a lamb, having had all the real effectiveness of the Bill, as he intended originally to introduce it to the House, removed during the debates which have taken place on it in Committee and on Report.
I very much regret this, because I believe that the Secretary of State is an honourable man who has very good intentions. He is a good man who has fallen among bureaucrats. Every now and then he has a divine inspiration, but when he tries to put it into effect he gets bogged down in many detailed compromises which spoil the general effect. To sum up, one might say that not only cannot the right hon. Gentleman see the wood for the trees, but he gets lost in the brambles as well. He had a similar experience during his "European period", when he was in another Ministry. He has forgotten the main motive of this Bill. We have had so many compromises that the main motive has been completely undermined.
I wish to remind the House of the real reason for abolishing the practice of price fixing in respect of resale prices. This practice is really quite mediaeval. It gives manufacturers and suppliers power to dictate the retail price which their goods shall carry long after those goods have left their control. The retailers are adding a value to the commodity which they sell in service which no manufacturer can really determine because the value is bound to be different in respect of different types of establishments and different types of services.
It is absolutely impossible for a supplier, however intimately he may be involved in the trade in which he is engaged, to know just what value a retailer or distributor should add to the product. So he chooses an arbitrary 530 figure, an arbitrary mark-up and dictates to all retailers the price at which they must sell the goods, irrespective of whether the commodity is sold in a small shop in Orkney and Shetland or in a supermarket in the middle of a metropolis. He dictates.
The result is that the consumer is paying invariably a higher price than he should pay, because most retailers are able, if not throughout the year then at certain times, to economise through increasing their turnover in that particular product and so pass on the benefit in terms of lower prices for that product to the consumer. While r.p.m. is in existence they are forbidden to do this, so that throughout the 12 months, irrespective of trading conditions and of the type of service which the retailer is providing the customer, the retailer must charge the same price. This is had, because it prevents retailers from being encouraged to improve the efficiency of their retailing.
What is the point of changing over from counter-service to self-service and economising in overheads if the retailer cannot attract to his shop a sufficiency of turnover to justify a reduction of price? If he cannot reduce the price he cannot attract the turnover and, therefore, cannot develop the efficiency which the customer wishes to see. One cannot develop a discount house, because if one has a mark-up of 10 per cent. on goods at present attracting a mark-up of 33⅓ per cent. or 40 per cent. one cannot provide the services to a customer who wants to drive up and collect the commodity from the discount house. If the manufacturer insists that the mark-up must be 33⅓ per cent. or 40 per cent. that is too high. The discount house is unable to cut the price and take advantage from the higher turnover which would follow.
The result of the imposition of r.p.m., therefore, is that retailers are discouraged from developing efficiency. It also militates against freedom of choice for the customer. The customer may prefer to go some distance to a self-service shop and help himself and obtain the commodity at a lower price than to go to a department store where there are all the services, with soft music, thick carpeting and a rest room, and perhaps even credit 531 over a long period. The customer cannot make that choice as long as r.p.m. is applied.
Thirdly, resale price maintenance is bad because there is not enough pressure on suppliers and manufacturers to reduce their prices if retailers are finding an esay life because they can guarantee that they can sell a certain branded commodity at a certain price. There is no competition at the retailing end and there is no incentive for the retailer, either individually or as one of a group of independent shopkeepers, to insist that the supplier reduces the price which he charges to the retailer. There is, therefore, inefficiency at the producing end as well as at the retailing end while r.p.m. exists.
What great demonstration have we had from the Board of Trade in face of this undisputed case? It has had "umpteen" inquiries. It has had its own departmental inquiry which it is still clutching to its breast and is not revealing to the general public or even to the House. There have been Royal Commissions. An inquiry into electrical appliances for mechanically propelled vehicles condemned r.p.m., particularly in the case of sparking plugs. There was an inquiry into the wallpaper trade which condemned r.p.m. One would imagine that as a result of all these inquiries we would have had effective action from the Board of Trade, but, instead, we have a Bill which puts off the decision and gets somebody else to make it rather than it should be made here in the House, which is the proper place.
I hope that my hon. and learned Friend the Member for Walsall, North (Mr. W. Wells) will forgive me if I say that the function of Parliament is to make law but that by the Bill we are not making law, we are making a heyday for the lawyers. As a result of the Bill, lawyers will be able to get very fat briefs for appearing before the Restrictive Practices Court and arguing out all the complexities we have been discussing in Committee.
Probably a special branch of the legal profession will be established of lawyers who are able to understand the Bill and be up-to-date with all the precedents for the various appeals which will be created as a result of hearings by the Court. It will be a specialised branch 532 of the law and lawyer friends will no doubt be very pleased indeed about this addition to their important responsibilities within the community, but I do not believe that Parliamentarians should pass on decisions on matters of this description to lawyers. They should make the decisions here. They should have the honesty and courage to make decisions rather than passing them back to the Restrictive Practices Court.
The decisions will depend on the interpretations by the Court. We do not know at this stage how those interpretations will be arrived at. We can only imagine that the judgment will be on a legal basis rather than a basis of economics or business experience because the majority of the members of the Court are eminent lawyers. There are very few laymen attached to the Court. It will be the lawyers who will make the decisions. If we look at the detailed provisions of the Bill, particularly in Clause 5, we can appreciate how easy it will be for suppliers and manufacturers who are determined to maintain r.p.m. to continue this practice.
They will be able under subsection (2,a), for instance, to argue that the quality of a whole range of commodities—clothing, hardware, even sparking plugs, for which r.p.m. was condemned by an inquiry a few months ago—could be substantially reduced to the detriment of the public if r.p.m. were abolished. Lawyers will be arguing that and perhaps the Court will find in favour of it. Who is to say what is the quality of a particular commodity? Who is to say whether it will be substantially reduced? We have not laid down any criteria for that in our debates. We are passing the decisions over to the Court.
In subsection (2,b) we find that ifthe number of establishments in which the goods are sold by retail would be substantially reducedthat will be a reason for continuing r.p.m. Is it in the public interest to maintain the number of establishments as such?
§ Mr. A. Bourne-Arton (Darlington)
If the hon. Member reads on he will find that it will not be so continued if that is to the detriment of the public.
§ Mr. Stonehouse
How do we define, "the detriment of the public"? I should say it would be obvious that the customer's best interests would be served in a medium-sized town by having, say, 60 small shops, two or three supermarkets and one discount house rather than a larger number, say 100, small establishments. That would give the customer freedom of choice and what I believe the customer wants to have. The customer wants to be able to choose whether to go to a corner shop and pay a higher price, or to get on a bus, go to the town centre and into a supermarket, where he can buy at a lower price and help himself. It is the customer's freedom of choice which we should be defending. Here we are establishing a principle that the number of establishments shall not be substantially reduced. What sort of merit is there in that?
Paragraph (d) of the Clause says:any necessary services actually provided in connection with or after the sale of the goods by retail would cease to be so provided".Here again, it is the customer's freedom of choice which we should be protecting, but customers will not have freedom of choice to decide whether to go to a shop which provides after-sales service or to pay a lower price at a discount house or a self-service shop where they know that as a result of paying a lower price they will not get after-sales service, but will have to do the servicing themselves or pay for it to be done.
I believe that it is entirely wrong that these decisions of principle in relation to the abolition of r.p.m. have been put off for long-winded discussion in the Restrictive Practices Court. I challenge the Secretary of State to say whether, in all his researches into this matter—he has been able to have the advice of many experts—he has come across any country in the world which has chosen this cumbersome, clumsy and tedious procedure.
The right hon. Gentleman knows that in Sweden r.p.m. has been abolished with the exception of books and printed music and herrings. He knows that it has been abolished in Norway, Denmark, Western Germany, France, in most of the States of the United States, and in Canada, and none of those countries has constructed the fantastic, bureaucratic, 534 legal machinery of the Restrictive Practices Court, which is the brain-child of the right hon. Gentleman.
Instead of having the courage to deal with this effectively as it has been dealt with in other countries, the right hon. Gentleman has run away because he was frightened of the crossfire of his hon. Friend the Member for Crosby or of rough treatment from his hon. Friend the Member for Rugby.
§ Mr. Biffen
It will be within the recollection of the hon. Gentleman that when the Bill was originally published it had a judicial rather than an administrative procedure, so how can he sustain the argument that these concessions were made after the Bill was published?
§ Mr. Stonehouse
The whole point is that the Bill should not have been introduced in this way in the first place, and the reason why the right hon. Gentleman introduced it in this way was that he was already beginning the slippery business of compromising with his own back benchers whom he knew were opposed to the principles of the abolition of r.p.m. In none of these countries has this extraordinary procedure been adopted.
The right hon. Gentleman on other occasions has begged us to learn from Europe. It is a pity that he did not learn a little more from Europe during the days when he was Lord Privy Seal, travelling between those capitals every other day of the week. Perhaps if he had made a few inquiries in those days about the trading practices in Scandinavia and France, he would have produced a better Bill than this one.
I believe that this is an unfortunate Bill. The only credit that I give to the right hon. Gentleman is that he has given the nation and the House an opportunity of discussing a most important subject. I do not believe that the Bill will achieve very much. It will be many months before r.p.m. is effectively abolished under its provisions. I do, however, believe—I give the right hon. Gentleman credit for this—that as a result of continuing the discussions on r.p.m. all these months we have had a gradual change in public opinion in this country in relation to retail price fixing and a notable change of opinion even among small shopkeepers. If I 535 may say so to the hon. Member for Putney (Sir H. Linstead), there has been something of a change of opinion even among pharmacists. That I welcome, and if the Bill has done some good in that respect I am glad that the Secretary of State introduced it.
I am sometimes given the credit for having initiated this whole business, but I prefer not to have that honour. I prefer not to be responsible for this abortion of a Bill. It is badly drafted, and it would have been better if the right hon. Gentleman had adopted the Bill which I put before the House in January. The Bill which I had the honour then to present was based on Canadian law. The Irish had followed the Canadian law and so, indeed, had the Danes in their regulations on r.p.m. I believe that the right hon. Gentleman was somewhat influenced by Canadian experience, and I am sorry that he was not prepared to accept what the Canadians had done about r.p.m., which they had done after studying the White Paper which we had issued in June, 1951.
I am sorry that the right hon. Gentleman gave in to some of the elements in his own party and to Conservative supporters in Conservative constituencies who were worried about a full-blooded attack on r.p.m. I am sorry that he did not take effective action. He has had plenty of opportunity, particularly as the General Election has been put off, to produce an effective Bill. Instead of that, he has run away and has presented us with this monstrosity of a Bill. I give him the credit of helping public opinion to be formed on this very important subject.
It will make it much easier for my hon. Friends, when we change sides to the Government side of the House, to introduce a more effective Bill to deal with resale price maintenance.
§ 8.57 p.m.
§ Sir Douglas Glover (Ormskirk)
This has been a fascinating debate. It has become obvious that although they have tried to present a united front on this important Measure, the Labour Party are more riddled with dissension than anything which has been seen on this side of the House.
536 I do not understand the nauseating hypocrisy of the hon. and learned Member for Northampton (Mr. Paget), who talked about the lack of courage of my hon. Friends although, having stated categorically throughout Second Reading and other phases of the Bill his utter opposition to everything which it did, he has not divided the House to show that he has the courage of his convictions. Why? The hon. Member for Wednesbury (Mr. Stonehouse) talked about the Bill as an abortion—strong language for someone who has produced a Bill trying to achieve a similar object. I hope that he will not be taken in the country as meaning that the Labour Party support abortion. He made a great mistake in using that phrase. Like his hon. and learned Friend, he is not prepared to vote against the Bill. Why? Because they know that the great mass of the people are behind my right hon. Friend in trying to bring in legislation on this problem.
The hon. Member for Wednesbury, who has some knowledge of the retail trade, speaks with authority on this subject. I can speak with a similar authority, having spent the whole of my working life in distribution and retail. I supported my right hon. Friend in his desire to bring in the Bill, but when the Bill was published I stated that although I was in favour of the abolition of retail price maintenance, with my knowledge of distribution I was convinced that there must be some exceptions. I have always believed that free competition was the right atmosphere to reach but that there must be some exceptions. He sneered on the question of quality. He may be a very brave individual. If I am buying a drug, I much prefer to pay the price for that drug knowing that by so doing its quality will be ensured than to have completely free competition, which may mean that the quality has been reduced.
§ Mr. Stonehouse
Surely the quality of drugs would be better determined by supervision by the Minister of Health rather than by relying on the cumbersome procedure of the Bill.
§ Sir D. Glover
It depends on the type of drug. I said something about this on Second Reading. There has been vicious criticism by the hon. and learned 537 Member for Northampton. I wonder if his behaviour and attitude in his career are the same as his behaviour and attitude have been over the Bill. I believe that he is the "Shadow" Secretary of State for War. He marches up and down the hill, blows hot and cold, and has not the courage of his convictions. That is another argument why the Labour Party should never get into power. The hon. and learned Gentleman is the biggest coward in the House. He has made these speeches, yet he never once put his view to the test with his own colleagues.
This has been the most fascinating Bill I have dealt with since I have been in the House. There is a genuine division of opinion cutting across both parties. It is just as strong amongst Labour Members as it is amongst Conservative Members. Some people believe that free competition, the abolition of resale price maintenance, is a good thing. Others, including the hon. and learned Gentleman, think that there is a sort of virtue and privilege in being allowed to be a distributor. My view as a retailer has always been that if I put up my name over a door I challenge the rest of the community that I will provide a service to the public out of which I will make a profit. That is the only way in which a retailer can justify his existence. He should be prepared to accept the competition which goes with his trade. If somebody can find a better way of doing it, that is a good thing. In saying all this, however, I do not overlook the fact that there is the necessity for a sufficient number of outlets for certain commodities, for instance those dealt with by the pharmaceutical industry.
I have been pretty rough with my right hon. Friend the Secretary of State on certain aspects of the Bill, although I have been one of his supporters. I should like to thank him for his wisdom in giving way when I was in favour of him giving way and standing firm when I was in favour of him standing firm. I believe that he has got his Bill just about right.
I am sorry that my hon. Friend the Member for Crosby (Mr. Graham Page) is not here, because I believe that he has had a very great influence on the Bill. When he was not absolutely certain of his Amendments, he withdrew them.
538 When he was convinced that they were right, he plugged away and got support. He helped ray right hon. Friend to improve the Bill. I believe that the Bill is a better Bill as a result of the Amendments my right hon. Friend has accepted.
I shall not delay the House much longer, because this debate on Third Reading has been long and interesting. I know that my right hon. Friend wants to wind up and either congratulate or commiserate with hon. Members on both sides. I believe that we have carried out a very great Parliamentry function on the Bill, rather because there is this division across party lines. It has been labelled in the Press as a revolt amongst Tory Members. The hon. Member for Wednesbury knows that there is just as much revolt behind the scenes in the Labour Party. It has been a fascinating Bill, because Parliament has been doing its job. It has done its job on this Bill much more effectively than it has done it on many Bills during recent years.
We have seen the cut and thrust of debate by hon. Members propounding their views and knowing what they were talking about. Parliament is stronger as a result of this Measure having gone through it. I know that the hon. and learned Member for Northampton does not agree with me. He made a powerful speech and talked about some of my hon. Friends having run away. They have not run away. As a result of seven days in Committee, two on Report and our Second Reading debate, there is now a far greater appreciation of the problems and, as the hon. Member for Wednesbury said, Parliament and the country now have a greater understanding of these problems than when the Bill was first presented.
It is because of the cut and thrust of debate and the limited but important concessions the Secretary of State has made that my hon. Friends and I are convinced that the Bill is now better than it was and that many of our fears were groundless. The Conservative Party may be temporarily somewhat unpopular in the country because of the so-called attitude that has been taken towards this Measure, but I believe that history will record that Parliament has gained in strength as a result of our debates on the Bill. My right hon. Friend the Secretary of State need not 539 be modest about accepting some of the share in the increasing prestige of Parliament.
We have debated a difficult problem, I believe capably and well, and I congratulate my right hon. Friend. On one or two occasions I have given him a rough time. I am sure that, as a result of the Bill, my right hon. Friend is probably a much wiser politician and more au fait with the techniques of the House than he was before the Bill was introduced. I applaud him, because it means that the Conservative Government have an even stronger and wiser Minister. I support the Bill. I will not say that I hope that it will get an unopposed Third Reading, because there are at least two hon. Members on this side of the House who have the courage of their convictions and who, I am sure, will want to show it in the usual way.
§ 9.8 p.m.
§ Mr. A. E. P. Duffy (Colne Valley)
The hon. Member for Ormskirk (Sir D. Glover) said that there was a division of opinion right across the House on the Bill. There is something in that. It is obvious that there is some opposition to the Bill on both sides, and throughout our deliberations uneasiness has been expressed by hon. Members of both parties about the way in which the Measure will work in practice.
Having gone that far with the hon. Member for Ormskirk, it may be worth considering how far this division of opinion can be seen as a result of the Third Reading debate, particularly from the way in which hon. Members opposite, who have criticised the Measure and have been styled as rebels, have suddenly tried to discard the label and have scuttled for cover. They have fallen over themselves to thank the Secretary of State, to tell him what a good chap he is, how good the Bill has turned out and how, after all, they did not mean anything by what they had said. I have found it nauseating.
It may be, having been here for only a year, that I am unused to the ways of the House. On the other hand, when the hon. Member for Ormskirk said that in his many years in Parliament he had never known such an interesting Bill, I hope that he means that he has 540 never known hon. Members behave as he has behaved, along with his hon. Friend the Member for Crosby (Mr. Graham Page), the hon. Member for Rugby (Mr. Wise), the hon. Member for Reading (Mr. Peter Emery) and several others, including the right hon. Member for Reigate (Sir J. Vaughan-Morgan).
I have not missed any of the proceedings on the Bill in the last two or three months. I thought as I listened to the speech of the right hon. Member for Reigate that he and I had been taking part in different Bills, and when the hon. Member for Ormskirk accuses my hon. and learned Friend the Member for Northampton of being a coward I suggest that it is he who is being a coward—
§ Sir D. Glover rose—
§ Mr. Duffy
The hon. Member will get his chance. As I was saying, he is being the coward because my hon. and learned Friend has been consistent in his opposition to the Bill from the beginning. He has not said anything of which my hon. Friends were not aware and he has not gone back on his opposition to the Bill because all his remarks tonight he had said before. Moreover, my hon. and learned Friend put his finger on the essential weakness of the Bill right at the beginning, long before any other hon. Member voiced it, namely, the way in which Parliament is shedding its responsibilities and passing them on to the courts and the judges. This is something about which my hon. Friend the Member for Wednesbury (Mr. Stonehouse) has already spoken and to which I shall refer again in a few moments. It ill becomes the hon. Member for Ormskirk—he will have his chance now—to throw that kind of taunt at my hon. and learned Friend.
§ Sir D. Glover
I am very grateful to the hon. Gentleman for giving way to me. I do not mind his accusing me of being a coward or anything he likes—
§ Sir D. Glover
—but he should have the record straight. Even before the Second Reading debate in the House I was making speeches in the country 541 supporting the Bill. I have supported the Bill all through. I do not believe in resale price maintenance. As I said to my right hon. Friend, I have criticised some of the details of the Bill, but I am with the Government in their object in bringing it in. I do not need to apologise for being in the Lobby with the Government.
§ Mr. Duffy
Why, then, did not the hon. Gentleman stand up like a man and continue to apply himself critically to the Bill right to the end? After all, this is what a Third Reading debate is about.
I welcomed the announcement of this Measure, because I believe whole-heartedly in the abolition of resale price maintenance. I welcomed it as a step towards the modernising of our economy. I recognise that there has been too much investment especially in distribution in recent years which has not been given the chance to pay off. I want to see a new pattern of distribution. But this does not mean that I am unmindful of the plight of the small shopkeeper.
My hon. and learned Friend the Member for Northampton has been absolutely right on this matter, too. I am sorry that the hon. Member for Reading is no longer in his place, because I did not think it was good enough for him to address remarks as he did to my hon. and learned Friend. Many small shopkeepers will be very badly placed as a result of the Bill. This is perfectly true. I should have liked to remind the hon. Member for Reading that there are 100,000 one-man businesses in this country, and 13 per cent. of small shopkeepers have a turnover of £5,000 a year or less. Of course, many of them will be hurt. It is hypocrisy, to borrow a word which the hon. Gentleman used, to pretend otherwise. I do not pretend otherwise, although I welcomed the announcement of this Measure.
In Committee, I tried to point out new ways in which small shopkeepers could go on justifying their usefulness to our economy. One cannot write off all small shopkeepers. They must make more of their assets of adaptability, flexibility and personal service. On the other hand, it is quite intolerable to pretend that prices must remain the same irrespective of the different location of the small shop, irrespective of 542 differences in skill on the part of the small shopkeeper in buying and so forth, and irrespective of the difference in the personal services offered by him.
§ Sir D. Glover
I am sorry that the hon. Gentleman and I seem to be having a bit of a row, because I find myself agreeing with every word which he says. I hope that he will understand if I now leave the Chamber and go and get something to eat before I starve. I am not leaving because I am not interested. I am really agreeing with everything he says.
§ Mr. Duffy
Perhaps the hon. Gentleman will remain for another minute or so. I want to take up another point which he made. The fact that I welcomed the announcement of the Bill does not mean that I shall congratulate the Secretary of State. I agree with what my hon. Friend the Member for Wednesbury has said. It is a disappointing Bill, hastily conceived. It has been rushed along much too fast. Far too much woolly thinking has gone into the construction of the Bill and, I am afraid, into some of the arguments put forward in support of various parts of it.
I hoped—and I said this on Second Reading and in Committee—that the Bill would be kept as clear-cut as possible and would maximise its effectiveness. I hoped that the Secretary of State would keep the number of exemptions to an absolute minimum. Unfortunately, he has not done so. That is because this is the crux of the Bill. It is at this point that the pressures have been greatest and this is where they are reflected. Yet—and this is what has amused me about some of the contributions from some hon. Members opposite—the Secretary of State has not given anything away. Some hon. Members have talked about major concessions. Of course, there have not been major concessions.
All that the right hon. Gentleman has done has been to fob off his colleagues with concessions dressed up in legal jargon. This will not give hon. Members opposite what they want. The right hon. Gentleman has surrendered no more than a few outposts of the Bill. What he has done will have the effect of weakening the Bill. In the first place, the issue will now be transferred from Parliament to the courts. It is therefore untrue to 543 say, as the hon. Member for Ormskirk said—and I am sorry that he has left the House because this is what I wanted him to hear—that Parliament has gained by the Bill. On the contrary, Parliament has lost as a result of the Bill. Let me explain why.
In the early days, the task of the Restrictive Practices Court was, in the words of Lord Devlin,the ordinary task of a court of law to take the words of the Act according to their proper construction and see if upon the facts proved the case falls within them".In other words, only Parliament can properly determine economic policy; it should not pass this responsibility to the courts. My hon. Friend the Member for Wednesbury made this point, but it is so important that I feel that it deserves to be made again. This is precisely what the Bill will do, and in this way it will blur the traditional distinction between economic policy-making, which should be done in this Chamber and nowhere else, and the administration of justice.
My hon. Friend the Member for Wednesbury gave some examples. I should like to add to them. Phrases like "the quality of goods", "substantially reduced", "to the detriment of the public", "cause danger to health in consequence of their misuse by the public" and "necessary services" can be given a variety of meanings by judges with different views. As speed of decision was not one of the virtues of the Restrictive Practices Court, clearly we cannot expect the work of the Court to be done faster as a result of this Measure.
However, at least this could be said for the Court, that earlier decisions resulted in the abandonment of many restrictive practice agreements without reference to the Court. Will this happen in the early application of the Bill, in what will be a vital period for its success? I think not. On the contrary, I believe that slow progress is likely, given all the ambiguities to which these concessions will give rise.
I should like to consider briefly the most important concessions which the Secretary of State has made. The concession on the preamble to the Bill will encourage more companies to defend 544 their price agreements before the courts. At the same time, it will encourage judges to take a more tolerant view had they been able to base their judgments on the original preamble.
I turn to the second concession, the one on loss leaders. This gives judges more scope than the original definition would have done. What will judges make of retailers who loss-lead to tempt housewives or to advertise? I think that this has been the red herring of this debate. I know that when it is practised by their rivals, loss leading is seen by many small shopkeepers as an abuse of price competition, but I cannot follow the proposition that there are many retailers who actually give goods away or, where they do give them away, do so for very long.
On the other hand, this concession on loss leading introduces an element of inflexibility into retailing. Similarly, the public safety criterion for exemption is a good deal less straightforward than it appears and is likely to take the judges much further afield than intended. If one lets one's imagination go—I think not merely of the obvious field of electrical appliances—one can imagine all kinds of goods that come under this heading.
As I said last night on Report, the last concession is the most ambiguous of all. There can be few cases where prices will tend to rise when they are no longer fixed and fewer still in which it can be proved. But what of the time element when judges are adjudicating on the merit of all these and many other similar arguments? Does this not suggest a changed function of the Court as compared with especially the function of the Court under Lord Devlin? Again, as my hon. Friend the Member for Wednesbury asked, what of the economic and social assumptions of the judges who will make these judgments?
I would say, therefore, that the Bill will be weakened where its application is delayed, where the Court takes longer to decide upon the merits of claims for exemption and where such cases continue for very long and, meanwhile, firms subsist in resale price maintenance. This is inescapable where judges have to address themselves to a hypothetical future state of affairs. This is most unfortunate for those who want the Bill to 545 have an impact. Surely, the test of the Bill will be how soon it will induce a greater spirit of competition into our economy. We cannot expect this to come about dramatically. It will come about only through a filtering down through our economy.
Nevertheless, we can be concerned for speed in that filtering down. We can be concerned, therefore, for speed in the application of the Bill. The way in which the Secretary of State has yielded to pressures that do not really amount to the gains that his hon. Friends have this afternoon claimed but which, nevertheless, through their indirect effects, weaken the Bill is to be deplored.
§ 9.23 p.m.
§ Mr. John Biffen (Oswestry)
I should like to address some fairly brief remarks on Third Reading and to take up the point of the decision in the Bill to use a judicial rather than an administrative procedure. This is a point on which there could be a substantial division of opinion, and quite clearly there is, as has been demonstrated this evening. If there are hon. Members opposite who still believe that the decision to accept a judicial process was wrong, I should have thought that this was so fundamental to the entire Bill that they should go into the Lobby and force a Division on it tonight.
I do not want to pursue that line of argument except to say that a great deal of play has been made of political courage. This has been represented as either rebels who did not have the guts to rebel or who, having had the guts to rebel, were fairly easily placated. Some of the things over which those rebellions were supposed to have taken place are fairly small fry compared with the fundamental decision of whether to accept a judicial process as a means of determining whether resale price maintenance should be permitted. If there are hon. Members who believe that the Bill is so fundamentally at defect because it contains the provisions for a judicial process, they should, if they are to emphasise their political integrity and courage, be forcing a Division this evening.
It is easy enough to score debating points about whether or not resale price maintenance is desirable or undesirable. Clearly, this is a subject which divides 546 opinion within the Conservative Party and within the Labour Party. There was an aristocratic hauteur on the countenance of the hon. and learned Member for Northampton (Mr. Paget) as he listened to the hon. Member for Wednesbury (Mr. Stonehouse), who, I gathered, he thought was stating the small town Liberalism of a shopkeeper. The hon. and learned Gentleman having given us such a fine, stirring address upon the iniquities of Liberalism, it was particularly unkind for him that he should have been followed from his side of the House by the fairly trenchant speech of the hon. Member for Wednesbury.
One reason why I supported the Bill on Second Reading and have been very pleased to support it throughout the Divisions which have taken place since concerns a point which is not very often referred to. I believe that the competitive elements in the economy are all too few, and I believe that one addition to the competitive elements will be the increased purchasing strength of retailers. The experience of the grocery trade has suggested that retailers combining together have become a competitive force in the food industry.
Reference to the recent report of a company engaged in this, H.P. Sauce, would, I think, be a case in point. This is a company which, as the result of the competitive pressures of organised buying, has been engaged in developments which are, on the whole, I think, desirable. I should welcome that addition to the competitive elements in the economy.
In the last analysis, the Bill is about competition and whether or not prices are to be given a fairly free range in determining the forces of competition. I, as a Tory, believe in the market economy and competitive forces. I am delighted to support the Bill and am only sorry that some of my hon. Friend's opposed it on Second Reading.
§ 9.27 p.m.
§ Mr. A. Bourne-Arton (Darlington)
There are two matters on which I agree with the hon. Member for Colne Valley (Mr. Duffy) and two on which I am in disagreement with him. Like him, I have sat through every stage of the Bill. Like him, I oppose resale price maintenance. However, unlike him, I greatly 547 admire the courage with which my right hon. Friend has not just talked about modernising the economy but has actually done something about it, and the skill and courtesy with which he has conducted the Bill.
The House will also be pleased to hear that I, unlike the hon. Member for Colne Valley, think that after this long time there is not a great deal more to be said on the subject of resale price maintenance. We have been talking about it inside and outside the House for a very long time—at any rate, it seems a very long time. I have sometimes wondered in the last six months what we had to talk about before resale price maintenance. I have no doubt that we shall think of something else in future.
This Third Reading debate marks the death of what has been a most persistent topic of conversation. In that connection, it is pertinent I think—I very much hope it is—to recall the story of a rather grand pheasant shoot where as each guest arrived in the morning and was ushered into the library to be greeted, his host, after the usual courtesies, said, "And, by the way, if you see a white pheasant today, please spare it as we like having it about." When all assembled had been thus greeted, they went outside and climbed into the shooting wagon and lumbered off. As they went off, the agent said, "For heaven's sake, chaps, do not shoot this white pheasant or there will be hell to pay." Arrived at the rendezous, they were greeted by the head keeper who touched his cap and said, "There will be a white pheasant in the first drive, gentlemen. His lordship is particularly anxious not to have it shot". Sure enough, they were half way through the first drive when a magnificent white pheasant flew high and fast over the head of the oldest and most experienced member of the party, who put up his gun and shot it. As it hit the ground in a bolsterful of white feathers, the delinquent was heard to remark in tones of quiet satisfaction, "I hope that that is the last we shall hear of that wretched bird".
§ 9.31 p.m.
§ Mr. Norman Cole (Bedfordshire, South)
At this late hour I intervene for only a few minutes. With most 548 of what the hon. Member for Wednesbury (Mr. Stonehouse) said I cordially disagreed, but there was one thing he said which reminded us all that little enough has been said about it. He said that the retailer in his position in the community added some value, some benefit, to the article which he sold and which he obtained from the supplier. With that I wholeheartedly agree. Not enough has been said in that respect in our deliberations of the Bill.
After all, in the long run, in addition to competition, the basis of our thoughts on this matter has been the individual mostly affected by the Bill, the retailer or dealer. He is a very important person, whether he is the person who keeps open, as some do even now, for all hours and to whom one goes at the last minute because one has run short of something, or the person who runs the large emporium which one visits in the town on a Saturday afternoon and where many things can be found under the one roof. In either and both of those capacities and in others the dealer is an integral part of the comfort and satisfaction of the community. I like to think that in the course of our deliberations we have not lost sight of that fact.
Then the hon. Member for Wednesbury spoiled it. He said two other things with which I could not disagree more. He said that resale price maintenance was militating against retailers developing their efficiency. All I can say is that the retailers of whom he must have had experience are very different from those I know anything about. The grocers and others have introduced the latest devices for looking after and keeping food and other shops selling other goods are using the implements and equipment sold today to keep themselves up to date. The hon. Gentleman conjured up a vision of shops of 1825 scattered all over the community and not having changed in the last 140 years. Nothing could be further from the truth.
To finish it off, he said that retailers were having an easy life. I know that he is connected with a great retailing movement, but he cannot have done much retailing himself or he would not say that retailers had more than a reasonable livelihood. On both sides of 549 the House we have been trying to maintain a reasonable livelihood for them, but I would go to the stake to disagree with anybody who said that they had an easy life. It is because we on this side of the House are conscious that they are not having an easy life that we have tried to maintain a reasonable livelihood for them. That is the expression which I have used in letters to my constituents and that is what we have sought to ensure for them during our deliberations.
This is a unique sort of Bill; probably the most controversial Bill that we have had in this Parliament. Generally speaking, both Opposition parties are in favour of it. Some of us can remember the Bill which the hon. Member for Wednesbury introduced in January. The word "abolition" appeared in its title. That word does not appear in this Bill, despite what the hon. Gentleman said earlier. The word "restrict" is in the long title of this Bill, and that is all, but the hon. Member for Wednesbury, whose speech was consistent with the tenor of his Bill, indicated that he would like a much more rigid abolition, a much more cut-throat business altogether. He considered that, because of the efforts of the rebels on this side of the House, the Bill was now so emaciated that it was no longer anything at all. In fact, he held it up as though it were a piece of dirty paper.
The hon. and learned Member for Northampton (Mr. Paget), on the other hand, thought just the opposite. He thought that no kind of reasonable concessions had been made at all. There it is.
§ Mr. Cole
It is, as my right hon. Friend says, another split in the party opposite, but we get so used to that on the other side of the House that we are almost unable to recognise them when they occur.
The Bill was brought in, and has been deliberated on in this House, because it was felt that it was in the public interest to do so. There is still room for improvement in another place, but the public interest will remain paramount. Over many years in politics, it has been borne in on me that what we in this House and what the Government 550 of the day feel is of public interest is not always synonymous with what the public itself thinks is its interest.
That has been one of the bones of contention on this Bill. I hope that when it does work out it will be shown in effect and in fact to be in the public interest, and not the opposite. Time alone will tell.
I say this not as a prophetic judgment, but because of a deep conviction, that within five years we shall need some kind of amending legislation on certain parts of the Bill, because, as has been said, and as my right hon. Friend said, this is rather a departure from the usual kind of legislation. This is not analogous to the 1956 Act, and therefore it will be no reflection on us in Parliament as a whole if it is necessary to introduce amending legislation. Indeed, it would be sensible to do that if it was called for within the next five years.
I refer next to the rebellion, or, if one likes to so describe them, the comings and goings since the Bill was first introduced. My hon. Friend the Member for Crosby (Mr. Graham Page), in a comprehensive and magnificent speech, talked about the concessions which had been made. I would draw attention to the insertion of the Board of Trade in Clause 6, to the concession on the question of loss-leaders, and to the increase in the extent of the criteria, or what are colloquially known as gateways. Those and other matters which we passed last night, such as not putting firms through the hoop a second time unless there was a substantial change of circumstances, are substantial concessions, and with all the kindness in the world I feel that there is a certain amount of envy on the part of hon. Gentlemen opposite that this so-called rebellion achieved those concessions.
But they were achieved with the cooperation of my right hon. Friend, and I pay great tribute to his demeanour and disposition about the Bill. My right hon. Friend started from one position. He made it clear that he was open to suggestions. They were made unequivocally and firmly, and he listened to them. He would have been a lesser man than he is if he had given in to all the demands that were made. What he did 551 was to find a compromise which accommodated his views, and also accommodated the views of those who took a different line. By the typically British method of sensible compromise, we arrived at the Bill now before us.
As my hon. Friend the Member for Rugby (Mr. Wise) said, we have not got everything we wanted. I venture to say that my right hon. Friend has not got everything that he wanted. But that is not important. What is important is the question: is what has been produced the best that can be produced, and is it in the public interest, really and truly, in the long run? I hope so. I hope that it will prove that the step that we have taken is in the public interest, because I have constantly to remind myself that it is not our function to evolve a doctrine, however dear it may be to our individual hearts or to us, compositely, as a party, if that doctrine, in practice, is not for the benefit of the whole public.
We are here to serve the public. Occasionally we go against what they feel is best for them, if we are sure that we are right, but we do not run counter to their wishes merely because we hold a view different from them on a purely doctrinal basis. That is not our function, any more than it is a function of Parliament to be moved in every direction by every kind of pressure that is brought to bear at any time.
We have taken a step that I believe will be shown to have been a bold step. It will be some time before any effects of the Bill are seen, but it is accepted by us all. I hope that the Bill will benefit the whole public, and I am not thinking, of its effects on voting in the General Election. I hope that it will help not only the consumers but the manufacturers, distributors, and the retailers. That is what I mean by the whole public.
§ 9.42 p.m.
§ Mr. J. A. Leavey (Heywood and Royton)
I welcome the Bill. If, as a matter of courtesy, I owe it to the House to explain why I have not taken part in the debates on the Bill hitherto, perhaps I may say that I have been absent for reasons beyond my control. I am not going to say whether or not I would have been a rebel. It appears 552 from what has been said this evening, and from what I have read, that one could not have been right whatever view one took. One would be said to be either a rebel who rocked the boat and who gave satisfaction to the enemy—a person who kicked the ball through his own goal—or one who followed like a sheep into the Lobby behind the Minister. In this matter it is difficult to be right.
I prefer to take the view put forward by my hon. Friend the Member for Ormskirk (Sir D. Glover), who told us that he believed that the Bill has been much improved by the Amendments pressed upon my right hon. Friend by a number of my hon. Friends. I, too, take the view that the Bill has been substantially improved. My right hon. Friend has been right to take up the position he has, so that the principle of the Bill shall not be destroyed. I join with my hon. Friends in congratulating my right hon. Friend, and also my hon. Friend the Minister of State. How glad I was to see him spring to the Dispatch Box this evening to defend his rank and reputation.
The system of resale price maintenance is a system of propping up prices which I believe to be no longer consistent with the competitive atmosphere that we wish to encourage in commerce. We have seen great changes in distribution. I feel that the time has come when we need to limit the liability of a retailer to be hauled into court for seeking to be more competitive in the services he offers to the general public. That view has seemed generally acceptable, although I would have found it difficult to support my right hon. Friend wholeheartedly if he had not done precisely what certain hon. Members opposite have condemned him for doing, namely, to provide an opportunity to establish before the Court the question whether or not a certain practice is against the public interest.
I share the view which has also been expressed that there will be no dramatic change in retail prices as the result of the provisions in the Bill. I wonder whether we should expect such a dramatic change. I believe that there is not room for a very large reduction in retail prices across the board. I do not believe that in commerce and dis- 553 tribution generally the public is being exploited.
My second reason for welcoming the Bill is that I believe that it meets an essential of legislation in that it recognises and reflects the realities of life and the changes which have come about in retail distribution. A first criterion for legislation is that it should recognise changing patterns and the facts of life. Though, in biological terms, the facts of life do not change, I believe that they do in commercial and industrial terms. We have seen, as it were, resale price maintenance deteriorate over a wide field and this legislation reflects what the general public and a large part of the commercial world believe to be right.
I share with a great many hon. Members a feeling of sympathy and affection for the so-called small shopkeeper. I do not share the view which was expressed today, and earlier in our discussions, that, as a matter of course, the small shopkeeper is to be destroyed. There was little that was said by the hon. and learned Member for Northampton (Mr. Paget) with which I agreed and this was something he said with which I vehemently disagree. I believe that the small shopkeeper is judged and has his place in society in direct relation to the services he renders, and that goes for all of us.
The levels of service provided and the standard of trading efficiency of the small retailer are in many cases very high. His service is not a matter of chromium plate and a glamorous shop front. I feel certain that a large proportion of our small shopkeepers will remain in business and I hope that they will prosper.
I take to heart the hint that was dropped by my hon. Friend the Member for Darlington (Mr. Bourne-Arton) about the length of Third Reading speeches and debates, and particularly about this one. Almost everything that can be said has been said, and I should be abusing the hospitality of the House and the patience of hon. Members if I did not take that hint seriously. I conclude, therefore, by saying that I welcome the opportunity to congratulate my right hon. Friend and to be present at the Third Reading debate. I am sorry that, because of the decision of 554 some hon. Gentlemen opposite I shall not be able to vote positively for the Bill.
§ 9.47 p.m.
§ Mr. William Wells (Walsall, North)
The debate has ranged over an astonishingly wide field. The lawyers have been made the butt in observations from hon. Members on both sides of the house, but I have felt full of envy at the skill of a number of hon. Members who are laymen and who contrived to deal with all kinds of questions of political and economic philosophy which seemed to my innocent ears to go a good way otuside the terms of the Bill.
I certainly join with the hon. Members for Heywood and Royton (Mr. Leavey) in congratulating the Secretary of State for Industry and Trade, and also the Minister of State, Board of Trade, on having brought their barque safely to port. It has been rather a pleasant experience to sit on this side of the House and watch the happy and contented faces of hon. Members opposite and compare their present appearance with the stormy scenes which occurred and the glowering glances which everyone flashed at everyone else during the early stages of our dicussions on the Bill.
§ Mr. Wells
It is always nice to view a scene of brotherly affection, and this has been our experience from this side of the House.
A diversity of views has been expressed from this side of the House this evening, and indeed on other occasions, about the merits of the Bill, but we have come, in practice, to adopt a certain attitude towards it collectively. We have our own collective processes, as has the party opposite, and if it has been difficult for some hon. Members opposite, and others have been reluctant, to understand the explanations which my right hon. Friend the Member for Battersea, North (Mr. Jay) has given on this and other stages of the Bill, I would not hope to be able to succeed in explaining to them what my right hon. Friend has not been able to do.
555 I would only say in a sentence, as my right hon. Friend has often so patiently explained, that we think that the Bill does something which ought to be done, but are dubious about some of the ways in which it does it. Had it been the position that a more comprehensive attack had been made on the subject of monopolies as a whole, we would have been more happy to support the Bill and probably any disagreements on our side which have been voiced from time to time would have been very much less in evidence than they have been.
§ Mr. Wells
I did not say that they would wholly disappear. I said that there would be less in evidence than they have been.
To deal, shortly, with one or two points which have arisen in the debate, the first question is whether there have been improvements of any substance in the Bill. This is a subject on which a good deal of doubt has been expressed on both sides of the House. To look at some of the main changes, the hon. Member for Crosby (Mr. Graham Page) was very optimistic about the effect of the Amendments which were introduced in Committee in relation to loss leaders. My hon. Friend the Member for Colne Valley (Mr. Duffy) thought on the other hand, that these Amendments were dangerous and would destroy the purpose of the Clause. Personally, I would have thought that perhaps both these views are a little exaggerated and that the Amendment which the Minister introduced is not of very great moment. This would also be my comment on some of the major Amendments, but this is not to say that the Bill has not been considerably improved both in Committee and on Report.
Of course, hon. Members opposite are disturbed by their experience of recent times, but we have no reason to have any unhappinesses of that kind. Improvements have been made which we have welcomed and which I do not think I need elaborate now. One of the most important has been made very recently. That is in relation to late applications for exemption. This is a 556 very important amendment to and improvement of the Bill.
Among the main defects in the Bill, as I see it, which we have discussed with a view to amending them, is that retailers and employees have still no right to initiate applications for exemption, although, of course, they have a right to be heard in the proceedings. The loophole that was disclosed yesterday in relation to agency arrangements designed to evade the provisions of the Bill is one which will appear increasingly important as time goes on. My judgment may be wrong about this, but I was disturbed by the Secretary of State's failing, as I thought, to appreciate the point of the Amendment and to deal with this loophole, which I think a serious one.
§ Sir D. Glover
I think that the hon. and learned Member is being unfair to my right hon. Friend the Secretary of State, because although there may be an agency or dealers' arrangement they will be no longer bound by resale price maintenance. Although they may have the agency they will be able to decide what is the economic price at which to sell the product.
§ Mr. Wells
The point of the Amendment, I remind the hon. Member for Ormskirk (Sir D. Glover), was that we considered there was a danger that those who had been previously dealing through normal retail channels, in order to evade the provisions of the Bill, would alter their arrangements from a sale basis to an agency basis. If this happened we would regard it as a clear evasion of the purpose of the Bill, one which was quite simple to prevent and which has not been prevented.
As a lawyer, I cannot help being interested in language. This, to my mind, apart from the questions of philosophy which we have discussed, remains one of the more dubious parts of the Bill. The Restrictive Trade Practices Act, 1956, was an experiment in legislation. It was a difficult one and I appreciate the difficulties that those who were called on to draft that Measure had to solve. One of the points which has emerged from that Act, and which might easily have been avoided by taking appropriate action in the preparation of this Bill, is that 557 a kind of legal double language is being evolved.
Words are being used in connection with restrictive practices which have a perfectly well-known meaning, but a different meaning in relation to the sales of goods. This may be to some extent inevitable, but it is not inevitable to the extent to which it obtains in the Bill.
§ It being Ten o'clock, the debate stood adjourned.
§ Question again proposed, That the Bill be now read the Third time.
§ Mr. Wells
I very much hope that in another place examination will be given to this aspect of the matter. The Minister of State, on one important issue, gave an undertaking, or, at any rate an expression of intention, of the Government in relation to one or perhaps several matters which caused this to happen, and I hope that the whole range of language will there be examined.
There is one matter which was raised by my hon. Friend the Member for Wednesbury (Mr. Stonehouse) and by my hon. Friend the Member for Colne Valley on the fundamental question of whether, for the purposes of the Bill, the Restrictive Practices Court should be the tribunal to which cases would be referred or whether some other procedure should be evolved. I share some of the apprehension of my hon. Friend the Member for Wednesbury that the volume of work in the Court may lead to some rather bogus speciality in my profession.
May I, however, suggest to my hon. Friend that one of the difficult problems about this very difficult issue is this that somebody, at some stage, in relation to monopolies and restrictive practices has to take dicisions that are very adverse, or thought to be very adverse, to some of the parties concerned. If one does not live in a dictatorship, one has to impose unacceptable decisions in a way that those who are the subject of them find less intolerable than in other ways. I think that it is one of the characteris- 558 tics of our people that they are more willing to take adverse decisions from a court after a judicial process than they are when the decisions were reached by other means.
§ Mr. Stonehouse
Surely it would be better to give this job to a strengthened and enlarged Consumer Council to deal with rather than to lawyers being responsible, because in the long run we are all consumers and it is the consumers' interest which really counts.
§ Sir D. Glover
The hon. and learned Gentleman says that he cannot argue this now, but really it is a split in his own party and he is not prepared to argue the proposition with his own colleagues.
§ Mr. Deputy-Speaker (Sir Robert Grimston)
The hon. Gentleman who has the Floor is quite right in saying that we cannot enter into discussions now on a means of settling these matters which are not in the Bill.
§ Mr. Wells
Having dealt with a few of the points which the Bill has involved and some of the Amendments which have been either made or not made, it remains for me to say a word about the political significance of the Bill. Whether the view is taken that there has been a great rebellion on the Conservative benches and that it has been successful, or that there has been a great rebellion and it has been unsuccessful, this much is clearly true: the right hon. Gentleman has brought the Bill to the stage which it has reached tonight and by doing so has extracted from a dying Government the promise of a death-bed repentance.
§ 10.6 p.m.
§ The Secretary of State for Industry, Trade and Regional Development and President of the Board of Trade (Mr. Edward Heath)
It will not be an exaggeration to say that some of the earlier stages of this Bill generated a degree of controversy. My first remark, however, is in no way controversial. It is to express my appreciation to my hon. and right hon. Friends and right hon. and hon. Gentlemen opposite for the time and effort which they have given to the consideration of the Measure and 559 which have contributed to the production of the Bill in its present form.
I confess that his has been an extremely lively and entertaining Third Reading—certainly the most entertaining and lively that I have experienced in this Parliament, and in some ways in the four Parliaments for which I have been in the House. I have been deeply moved by the tributes which have been paid to the Minister of State and myself in the conduct of the Bill, and I should like to express our appreciation of them. They have varied in warmth and degree, from, at the lower end, that of the hon. Member for Wednesbury (Mr. Stone-house), who went as far as to say that he thought that we might have influenced the climate of opinion. The hon. Member for Sheffield, Brightside (Mr. Winterbottom), who is no longer with us, said that we had gone as far as to make an impossible Bill barely bearable.
My hon. Friend the Member for Rugby (Mr. Wise), if I understood him aright, thought that the main justification for the continuation of a Conservative Government was that it would enable Conservative back bench Members to keep the Government straight. That was a notable contribution. My hon. Friend the Member for Ormskirk (Sir D. Glover) said that I must understand that the process of improving the Bill had hurt him much more than it had hurt me but that in the long run it would be beneficial to both of us. There have been those who have welcomed the Bill neat, so to speak, and who have regretted that it has been changed. There have been those who have genuinely welcomed the Bill in its changed form.
Perhaps the approach which grieved me most was that of the hon. Member for Wednesbury and his hon. Friend the Member for Colne Valley (Mr. Duffy). They, who most strongly support the complete abolition of resale price maintenance, greatly regretted the judicial procedure contained in the Bill. The hon. Member for Wednesbury went so far as to say that should his own party come to power it would be extraordinarily easy for them to institute the complete abolition of resale price maintenance. What put that thought in his 560 mind, after having listened to so many proceedings of the Bill, I find it difficult to understand. I have always regarded him as a most intelligent member of our assembly. He must surely have realised that, to say the least, there were certain divisions of opinion on this subject on his side of the House and that after what had been said from two Front Benches it would be difficult for him to achieve his end.
He introduced his own Bill earlier in the year. He is quite right to demonstrate his modesty in disclaiming any connection with this Bill. This Bill owes nothing to the Measure which he put before the House. He went as far as to try to arrange certain exemptions to be included in his Bill, but, as we know, he failed to find a form in which to make those exemptions.
I ask the hon. Members for Wednesbury and Colne Valley to consider whether they really thought that a Bill completely abolishing resale price maintenance would have commended itself to the House. It would not have commended itself to the Government, nor to the country. I cannot believe that the hon. Member for Wednesbury now considers that to have a Bill completely to abolish resale price maintenance, with no procedure of any kind for exemptions, would really have commended itself to the House.
§ Mr. Stonehouse
The right hon. Gentleman will be aware that I provided in my Bill for exemptions, particularly for books, and favoured the system adopted in Canadian law for exemptions, so what the right hon. Gentleman has been saying is not quite fair.
§ Mr. Heath
I was saying that, although the hon. Gentleman favoured it, he did not find a means of doing it, because his Bill was defective in its drafting, as I 561 think he realised at the end of the debate, and he was therefore not able to achieve his ends. These have all been very moving tributes, which I have received with gratitude, as has my hon. Friend the Minister of State.
The right hon. Member for Battersea, North (Mr. Jay), who has led for his own party on the Bill—[HON. MEMBERS: "Part of it."] Part of it, yes—part of the official part of his own party. He put forward the idea that it would have been much simpler merely to have repealed Section 25 of the 1956 Act. This would undoubtedly have been much simpler in many ways. We could have had another sort of blunt instrument. We could merely have made resale price maintenance entirely illegal, or we could have had an administrative procedure. We discussed this on an earlier occasion.
The right hon. Gentleman spent some time going over the history of this matter, and he reproached us with the 1956 Act. As my hon. Friend the Member for Heywood and Royton (Mr. Leavey) said, there is no doubt about it that commercial opinion changes with the process of time. Our experience since 1956, above all our experience of an expanding economy, has certainly justified the action we are taking in the Bill. I have never quite understood the right hon. Gentleman's approach in this matter, in view of the White Paper published in June 1951, by the Government of which he was a member.
In the light of that, I find it difficult to understand how he can maintain that what we ought to have done was merely to repeal Section 25 of the 1956 Act, because the conclusion of the White Paper was quite clear—not only to make collective arrangements illegal, which was done by the Conservative Government in the 1956 Act, but also to make illegal any indication by a manufacturer or other supplier of goods of a resale price for those goods, unless that price is clearly stated to be a maximum price. The proposal of the White Paper was quite clearly to make it illegal and from the beginning of our debates on the Bill I have never understood the right hon. Gentleman's position, nor, indeed the position of his party, least of all the position of his right hon. Leader, who has never even bothered to put in an appearance in our debates.
§ Mr. Jay
If the Secretary of State thinks it reasonable to have learned something since 1956, it is presumably also reasonable to have learned something since 1951. I point out to him that we opposed Section 25 of the 1956 Act. Therefore, if the right hon. Gentleman is right in thinking that commercial opinion has changed since then, it has caught up with where we stood in 1951 and have stood consistently since then.
§ Mr. Heath
The right hon. Gentleman has declared, on that basis, that he has gone back since 1951, because what he is prepared to do now is to repeal Section 25, instead of taking action to make it illegal, which he was prepared to do in 1951. So in that respect he has gone back.
Part of the right hon. Gentleman's criticism of the Bill, or part of his opposition to it, has been due to the fact that we have not legislated for monopolies, restrictive practices, mergers, and so on, at the same time. As my right hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan) said, this does not seem to be any very sound reason for opposing the Bill. As my hon. Friend the Member for Stratford-on-Avon (Mr. Maude) said, we have already taken considerable measures in the 1956 Act to deal with restrictive practices, by action on the Monopolies Commission, and so on. This is a continuing stage of this process. I have made it plain from the beginning that legislation on monopolies, mergers and restrictive practices is bound to be extremely complex and of considerable length. It would not, therefore, be possible to enact it at the same time. Nevertheless, I assure my right hon. Friend the Member for Reigate that no one is more anxious than I that we should see this legislation on the Statute Book.
The White Paper, far from being vague and indefinite, is specific in all these matters and when the House has an opportunity to debate it—and I have no doubt that that will happen during this Session—we will be able to hear the views of the right hon. Member for Battersea, North and his hon. Friends on these matters; and perhaps they will indicate specifically what additional powers Parliament should take on monopolies and mergers. My right hon. Friend the Member for Reigate and the hon. and learned Member for Warrington (Mr. W. T. 563 Williams) asked for more information and a White Paper on r.p.m. Considering monopolies and restrictive practices, that is what we have done. We have produced a White Paper with specific proposals. The House will have an opportunity to discuss them and then we can consider legislation in the light of those proposals.
I hope that I have dealt with the question of restrictive practices and monopolies. As I have explained, we are anxious to have action at the earliest possible moment and we hope that that will happen in the immediate future—after we have taken office in the next Parliament.
Another point to remember about the repeal of Section 25 is that it would not have allowed any method of retaining r.p.m. for goods where that procedure was justified. This is a great weakness of the proposal of the right hon. Member for Battersea, North and it leads one to ask whether his remarks about that Section, the gateways and so on, were really necessary from his point of view. Had he considered the question of there being a means of retaining r.p.m. in those cases where it was justified—or would he consider that it would not be justified on any grounds? When putting forward that sort of proposal as an easy solution to the problem he is overlooking the fundamental point that if one accepts that there are cases where r.p.m. is justified, one must have a means of enabling it to continue.
The right hon. Member for Battersea, North then raised the question of the interest of the consumer. We have heard a lot about this today and it is one of the keys to the Bill. The right hon. Gentleman tried to argue that the interest of the consumer must be paramount and, at the same time, he pointed out that we had to take every interest into account. Intellectually, it is difficult to understand how the interest of the consumer can be paramount—which, if I understand the word aright, means supreme above all—and, at the same time, take other interests into account. How can one do the latter if one has already decided that the interest of the consumer must be paramount? This is another weakness of the right hon. Gentleman, who has been trying to please not only the consumer 564 but also the workers in the distributive trades, along with the retailers, as well as trying to pretend that in taking every interest into account, the interest of the consumer must remain paramount.
§ Mr. Heath
The right hon. Gentleman declared that the interest of the consumer had to be paramount over all other interests. He has tied himself up sufficiently for us now to leave him where he is.
There followed interesting contributions from other hon. Members opposite, in particular from the hon. and learned Member for Northampton (Mr. Paget) who, if I may say so, has throughout our proceedings given a remarkable performance. He emerges from time to time rather like a coelacanth from the depths. He comes up pouting for air, finds himself absolutely blinded by the light around him, spouts for a considerable time and finally descends to the depths again. Nothing that he has said seems to be at all in keeping with either the philosophy of his party or the views of his right hon. and hon. Friends. I cannot see how he can have any sympathy with their general trading views. He seems to think that anything which reduces tariff barriers or encourages greater trade between nations by the freeing of trade is a terrible heresy which puts all the strong against the weak and will result in suffering for the great majority. The hon. and learned Gentleman concluded by advising us all to go and meet him in the town hall so that we might be told how to get round the Bill. This did not seem to me to be a particularly helpful contribution to our deliberations.
There has been revealed to us the most interesting spectrum of behaviour on the part of the Opposition. We have had the views of the hon. and learned Member for Northampton, the hon. Members for Manchester, Cheetham (Mr. H. Lever) and for Sheffield, Brightside, and one or two others who, in fact, have emerged as 565 the most fundamental protectionists yet in our society. This is why the party opposite has been completely split on the whole Bill, and, of course, it is the fundamental reason why right hon. and hon. Members opposite did not divide on the Second Reading. They had not the courage to support this side of the House in carrying the Bill through or the courage to put down a reasoned Amendment and advance the proposal of the right hon. Member for Battersea, North. The hon. and learned Member for Northampton did not even have the courage, bitterly opposed though he has been to the Bill at every stage, to go into the Lobby with those of my hon. Friends who did express their disapproval This does not seem to me to be an attitude which is any way commendable.
I turn now to one or two more general points. I take, first, a question raised by my hon. Friend the Member for Bedfordshire, South (Mr. Cole). He said that experience may reveal loopholes in the legislation. I agree that this is so. It is possible with all legislation. In our proceedings, we have done our best to ensure that it is a good Bill, and I have already expressed my gratitude for all the help we have been given in improving it. However, unlike some hon. Members opposite, I believe that the Bill will be an effective instrument for implementing the policy which I described to the House on Second Reading. Undoubtedly, it will be more effective because of the improvements which we have made, and I believe that it will be a useful Bill in this respect.
I agree with the hon. Member for Wednesbury on one matter. When we come to look back on the Bill and the place which it will hold in our general legislation on restriction and competition, historians will, I think, judge that its value lay a great deal in the way in which it has affected the climate of opinion and the attitude of people in this country towards restriction and towards competition.
The general prohibition will apply when the Board of Trade makes an Order bringing in the first part of the Bill. I repeat the assurance which I gave earlier, that it is our intention to make the Order on the first practicable date. The extent to which resale price 566 maintenance will be brought to an end will depend upon how many suppliers decide to register their arrangements. I believe that there are a number who will be prepared to accept the challenge of the Bill and do away with their resale price maintenance arrangements. The provision we made today, on Report, for applications for exemption to be made at a later date should encourage those who might otherwise be in doubt to give a trial to the abolition of their restrictions without further delay, knowing that they have an opportunity to go directly to the Court., For the rest, the outcome will depend on the case which suppliers can make to the Restrictive Practices Court.
This Measure is an indication of our belief that, in an increasingly competitive world, we cannot afford wasteful restrictive practices in any sector of the economy. Some of my right hon. and hon. Friends have spoken in the most interesting way today about the position of the small shopkeeper, about the way the Bill has been understood, and about the position of the small shopkeeper in modern competitive society. Earlier, we had some rather pessimistic things said. Tonight, the tone has been much more optimistic, and I think that there is a general recognition that the small shopkeeper can live effectively with competition. It is true that distribution in this country is going through a period of rapid change. In a way, it is comparable on its own terms to the Industrial Revolution as a whole. A commercial revolution is already in progress. I believe that we must accept it, co-operate with it and move with it.
I am convinced that the trades concerned can accept the challenge. They can re-examine their functions. They can reorganise their distribution so as better to meet the consumer demand of today. So far as the Bill assists in the process, it will be of benefit to the economy, to the consumer and also, I believe, in the long run, to the distributive traders themselves. It is on these grounds that I commend this Measure to the House for its Third Reading.
§ Question put and agreed to.
§ Bill accordingly read the Third time and passed.