Orders of the Day — Restrictive Trade Practices

Part of the debate – in the House of Commons at 12:00 am on 2nd December 1957.

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Photo of Mr Frederick Erroll Mr Frederick Erroll , Altrincham and Sale 12:00 am, 2nd December 1957

I beg to move, That the Registration of Restrictive Trading Agreements Order, 1957, dated 29th October, 1957, a copy of which was laid before this House on 6th November, be approved. The House will recall that the first registration Order which was before Parliament about twelve months ago called for registration, under the Restrictive Trade Practices Act, 1956, the agreements that seemed to be the most important. These fell into two broad groups: namely, agreements involving restriction of prices, discounts or other trading terms and conditions; and, secondly, agreements involving discrimination between persons or firms. The first Order came into operation on 30th November last year, and particulars of the agreements in question had to be sent to the Registrar of Restrictive Trading Agreements within three months of that date, that is, by 28th February this year.

The purpose of the present Order is to call up for registration all the other classes of agreements covered by the Act. The main classes of these remaining agreements are agreements which impose restriction on the types or quantities of goods to be produced and agreements under which markets or areas are shared between suppliers. If Parliament approves this Order, it will come into operation on 31st December, and particulars of the agreements in question will have to be sent to the registrar by 31st March, 1958. Within the same period particulars of agreements affecting exports, but not the home markets, will have to be furnished to the Board of Trade, as is provided for in Section 31 of the Act.

Experience under the first Order has shown how registration itself provides an inducement for industries to review critically their own restrictive agreements and the need for retaining them or parts of them. It seems clear that some agreements were actually abandoned before registration was due, and others were modified and rewritten. The Registrar has recently informed the Board of Trade that he has examined a substantial sample of registered agreements. Of these, over one-third are agreements in which the relevant restrictions are in a document dated after 2nd August, 1956, or are pre-Act agreements in which it was apparent that significant alterations in the scope of the restrictions had been made since that date. In some cases, admittedly, a new agreement was entered into for the purpose of putting them into a form convenient for registration but without having alterations of substance.

The conclusion that the Registrar draws, however, is that apart from outright cancellation of agreements, about one-third of the continuing agreements were substantially modified in consequence of the provisions of the Act requiring registration. That is what the Registrar has told us about the effects of registration and that is why we attach great importance to registration itself. Registration induces industry to reconsider the need for restrictive agreements, and we think it right that this process of re-examination should now extend civet the whole of the remaining field.

Inevitably, there will be some agreements which those concerned in them will feel are not really restrictive and which ought, therefore, to be exempted. We cannot, however, exempt from registration in perpetuity any kinds of agreement which Parliament in the Act has decided should be subject to registration. The basic purpose of registration is not to condemn agreements, but it is the first step in the process of sorting the good from the bad. As to whether a particular agreement needs to be registered at all, I am sure that the Registrar will always be ready to discuss informally with those concerned, before registration, the position of agreements which seem to be on the borderline.

I hope that the House will agree that we have lost no time in bringing this important Act into operation. The register was opened in April and it now contains about 1,400 agreements. The Board of Trade also has given two directions to the Registrar about the first cases to be taken before the Restrictive Practices Court. These directions cover about 40 commodities and about 200 agreements. Our immediate object now, however, is to ask the House to provide the incentive for industry to review the remaining classes of agreement and complete registration of those which are retained. I ask the House, therefore, to approve the Order.