Orders of the Day — Monopolies Commission

Part of the debate – in the House of Commons at 12:00 am on 23 July 1952.

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Photo of Mr Hugh Dalton Mr Hugh Dalton , Bishop Auckland 12:00, 23 July 1952

My direct responsibility for the affairs of the Board of Trade ended, of course, in the latter days of the Coalition Government, so that I am not very directly touched by this. My right hon. Friend the Member for Huyton was responsible as President, and I only tried to give helpful assistance as a colleague. I was not the prime mover.

What has happened? Hardly anything is moving at all. The whole thing is desperately slow. As I watch all these operations, I am reminded of a fleet of tortoises going to a funeral. It is really no faster than that. Since March, 1949, when the Monopolies Commission began work, they have made four Reports—only four. I do not intend to go into much detail about them, because many of my hon. Friends will no doubt wish to elaborate on the details.

They made a Report in December, 1950, on the supply of dental goods; in April, 1951, on the supply of rain-water goods; in November, 1951, on the supply of electric lamps, and in July, 1952, on the supply of insulated electrical wires and cables. That is all they have reported on so far, so there would not be very much in the picture if they were at Helsinki just now.

Let us briefly consider what has happened following those four Reports. On the dental goods Report, my right hon. Friend the Member for Middlesbrough, East (Mr. Marquand), who was then the Minister of Health, made a very good Statutory Order in July, 1951, and I recall with satisfaction my collective part in that. In that Order he forbade a number of most objectionable practices which had been clearly revealed in the very remarkable Report of the Commission on the dental goods supply system. In that Order my right hon. Friend forbade the objectionable practices of exclusive dealing, collective boycott, arrangements which restrict entry into the trade and the nefarious practice of collective resale price maintenance. My only regret is that it is not yet clear whether effect has been given to that Order by the traders and monopolists concerned.

My right hon. Friend has in fact been putting Questions to the Minister of Health in the present Administration about this matter. We had, I repeat, an Order made by my right hon. Friend a year ago this month. Yet on 12th June of this year, in reply to a Question by my right hon. Friend, the present Minister of Health was only able to say that he had received a copy of the revised rules of the Association of Dental Manufacturers and Traders, which was now under consideration. Why? It was under consideration to see whether these monopolists, against whom the Order had been issued, had, in regard to a whole series of gross and anti-social practices, yet mended their ways, even on paper. That is all we have.

I should like to know why there has been this tenderness towards a group of people who had been convicted by the Monopolies Commission of nearly all the offences of which we suspected they might conceivably be guilty. I am not asking the right hon. Gentleman necessarily to reply himself. That is for the convenience of himself and whoever else may speak from the other side of the House. But at some stage in this debate we should like to know why there has been this delay and tenderness towards these people.

The next two Reports are on rain water goods and electric lamps. No Order has yet been issued in either case. Indeed, since the present Government came into office, no Orders under this Act have been issued at all. I do not know how many of these people—as is sometimes said—have contributed towards party funds on one side of the House or the other. I do not know whether there is a lurking explanation of that here. No Order has been made against these groups of monopolists in the case of rain-water goods. It is the Minister of Works who is responsible. He said on 27th November—a Report having been made in April, 1951— My Department has received an assurance that new trading arrangements to carry out the recommendations of the Monopolies and Restrictive Practices Commission will replace the present agreements. I should like to place on record my appreciation of their co-operation."—[OFFICIAL REPORT, 27th November, 1951; Vol. 494, c. 129.] But it is still in the future. They are going to consider whether perhaps they will take notice of what has been said about them. But no Order has been made, nothing has been published, and we have not yet had a copy laid before the House of their new code of conduct. I think that is very unsatisfactory.

To come to electric lamps, about the malpractice in the supply of which a good deal was known before—it is a notorious case of price rigging and the exclusion of new entrants—although the Report was made in November, 1951, it was not until 19th May of this year that the Minister of Supply, who is responsible for this branch of our industry, said that both the Government and the Electric Lamp Manufacturers' Association had accepted the Commission's recommenda- tions. It is very good of the manufacturers to accept them, and I think that we must be very grateful for their kindly approach. They have accepted the recommendations, except for abolition of rebates. I will not develop that. We were told that a new scheme promoted by the E.L.M.A. would come into force on 1st July, 1952. I should like to know if that has been published. Are we to see this new scheme and be able to exercise our own judgment as to whether, on the face of this new scheme, the recommendations of the Monopolies Commission have been carried out?

Finally, there is the question of insulated cables. I will not spend much time on that, because the Report has only just been received and it is not reasonable at present to expect action. I would hope that in all these three cases we shall get an Order. Assurances are all very well, but the whole purpose of the Act was to give new power to the relevant Minister to make an Order and to ensure that objectionable practices should become illegal as from the date of the Order. So much for what has happened so far, and it is really not a very good story.

There were discussions in this House in the last Parliament and in this Parliament. I have looked up some of the past debates. There was an extraordinarily good debate on 15th June, 1951, when we were able to go wider than we can today because there was no such bar as exists today about discussing legislation. In that debate there were two very able and interesting speeches made at the beginning, and others later, by two of my hon. Friends who moved and seconded the Motion, the hon. Member for Gloucestershire, South (Mr. Crosland) and the hon. Member for East Ham, North (Mr. Daines). Those speeches will well repay re-reading.

I will select one interesting statistic from one of those speeches. I think it was my hon. Friend the Member for Bristol, South-East (Mr. Benn), who made the calculation quoted in that debate by my hon. Friend the Member for Gloucestershire, South, that at the rate of progress at that time prevailing, it would take 2,400 years for the whole of industry to be surveyed by the Monopolies Commission. That struck me very much at the time, and I am inclined to think that, even if we take into account what has happened since then, that figure is about right within a margin of error of a few hundred years on either side I hope that that will have impressed the right hon. Gentleman the President of the Board of Trade and encouraged him to see whether he can do something to foreshorten future history. Enough has come out, even in these few Reports that we have had, greatly to strengthen the belief that many of us already held, based on other studies which had been made, that British trade and industry today are literally honeycombed with monopolistic and restrictive practices of all sorts.

This leads to a number of consequences, which I hope the right hon. Gentleman and the Government will agree are very undesirable. It leads not only to the more obvious objection that prices are higher than they ought to be and profits are larger than they ought to be, but to a general atmosphere of inefficiency in industry, resistance to change and to new ideas, and it leads also to gross tyranny by trade associations over traders or other persons who may be within the ambit of their interests. These are the two main counts which I put against these monopolistic activities.

There are two or three principal monopolistic practices—I shall not discuss them in detail—which are emerging from practically all these reports. They are the use of the collective boycott, exclusive dealing, the black list and restrictions on new entry into the trade. These occur with monotonous regularity, and there is evidence to show that they occur in other places which have not yet been probed by the Monopolies Commission.

I have already referred to the interesting speech of my hon. Friend the Member for East Ham, North in the debate last June. He used a vivid phrase. He said: I do not want to cover the ground again of trade associations… He had already made some reference to that subject. It is remarkable how, in modern businesses, practices are conducted, which are very similar to the practices for which people in other walks of life are today sent to prison. There are the Star Chamber, locked doors, fines and penalties. A man can be economically murdered for carrying out the very principles in commerce that hon. Members advocate both in this House and on the public platform."—[OFFICIAL REPORT, 15th June, 1951; Vol. 488; c. 2702–3.] That is a very serious state of affairs, and I had hoped that before now the Government would have done something to deal with it.

I should like to quote one more passage from the White Paper issued by the late Government dealing with resale price maintenance. In that White Paper it was stated: If a trader fails to observe any of these rules and regulations by which the associations seek to close any loopholes in the operation of resale price maintenance, he may suffer penalties ranging in severity from fine (in some cases involving substantial sums) up to the boycott. (It is worth noting, too, that a trader who by charging too little for his goods incurs these penalties at the hands of a trade association has no recourse to any higher authority. It is final. It is economic murder. By contrast, a trader, who charges too much and is proceeded against by the State under price-control laws, can always appeal to, a higher court.) These penal proceedings, which may have the effect of driving a shopkeeper out of his trade and which are directed not to the maintenance of a recognised standard or code of behaviour, generally accepted as necessary in the public interest, but solely to the enforcement of a particular trade policy of questionable merit, take place behind closed doors and without any supervision by the courts or by Parliament. That is a very grave condition of affairs, or so it seemed to the late Administration. Without wishing to put myself out of order, I would say this. Had the late Administration remained in power, few things are more certain than that we should have legislated on this subject this Session not merely in terms of the White Paper on resale price maintenance but in wider terms than that. I am dissatisfied that nothing has been done to deal with these matters yet.

What can be done under the present Act? No doubt the right hon. Gentleman has been considering this. Has he any idea of any measures to speed up the work of the Commission itself? A number of suggestions have been made. I should like him to tell us in his own words. Further, has he considered the use that might be made of procedure laid down under Section 6 (2) of the Act or under Section 15 of the Act, both of which, when we were considering the form of the Bill when it was going through Parliament, seemed to hold out special hope of speedy and effective action, but neither of which has yet been used.

Section 6 (2) of the Act permits the Monopolies Commission, if they have established that monopoly conditions prevail in an industry, thereafter to confine their study to the actual effect of specified restrictive practices. At present they write a treatise about the industry. They go into everything, which is no doubt interesting to the student, but does not get us quickly to the point. It is possible under Section 6 (2) for the Monopolies Commission to concentrate their brainpower, which is considerable if they can concentrate it, upon studying the effect of some particular restrictive practice in an industry, provided a prima facie case for the existence of that practice has been made out.

Section 15 of the Act is even potentially more valuable, because it empowers the Board of Trade to refer to the Commission the effects in industry generally, and not simply in one industry, of some particular restrictive practice, such as collective boycott, restrictions on new entry and so forth. Such references can be made within the terms of the Statute, provided the Commission has already satisfied the President of the Board of Trade that such a practice widely exists now.

My submission would be that, even in the small number of Reports which we have so far had, there is plenty of evidence that some of these practices are at least as widespread as the total field of the Commission's inquiries up to date, and probably a great deal more widespread than that. Perhaps, therefore, the right hon. Gentleman will tell us whether he has given thought to action under these two Sections, and if so, when it will begin

What do Ministers propose to do about this matter? Grave words are rightly spoken about the economic difficulties of this country, and all of us on both sides of the Committee would wish to do all we can to make it easier, or at least less difficult, for us to pay our way in external trade, for exports to be expanded and productivity to resume the increase which at the moment seems to have been checked.

In the battle of the balance of payments in which we are engaged, and the verb hard battle for exports which is part of it, we cannot afford as a nation to carry on our backs into battle the dead weight of these monopolistic and restrictive practices of private industry. We cannot afford the organised discouragement by powerful private vested interests of new enterprises, new ideas, new men and new methods. We cannot afford all that. It should be done away with and thrust off the backs of our more enterprising private traders and industrialists.

If Britain is to win through now, she must be able to shake off this incubus of highly organised private unenterprise. She must be free enough in this fight to make the most of all she is and all she has. I wish to know on which side in this battle for freedom Ministers stand.