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 Sir Arthur Irvine Sir Arthur Irvine , Liverpool Edge Hill 12:00 am, 2nd December 1957

Before we can tell whether three calendar months is an appropriate period to prescribe in the Order, we really should know more than we do about the present state of the register and about how the whole process of registration of restrictive agreements is progressing.

Comparatively few agreements will come within the ambit of this Order, I imagine, because I suppose it to be the case that most of the agreements which provide for restrictions upon market sharing and upon processes of manufacture will provide for those restrictions compendiously with other price ring restrictions which are already incorporated in agreements presently upon the register. But, even so, I suggest that it is desirable, before we determine upon the merits of the Order and upon the correctness of the three months' period provided for, that we should know more than we do. Upon the answer to the question whether the Registrar is being heavily pressed or not will depend the determination of what is the appropriate period for which we should provide.

I would think that two factors recently have eased the task of the Registrar, if I may put it in that way, and lessened the scale of registration. The first factor is the circumstance that, as the Government quite naturally and rightly desired, in a great many instances agreements which would have been registrable if continued in force have been, under the pressure of the provisions in the Statute, abandoned by the parties to them, with consent. That seems to be a perfectly legitimate consequence of the introduction of this novel legislation. One is glad to hear that it has had results of that kind, and, by that means, the number of registrable agreements in use in commerce and between traders and suppliers has become smaller. That would seem to be a factor diminishing the congestion upon the register.

The second and, some of us may think, much less welcome and certainly unforeseen factor which I conceive to be lessening the pressure upon the register is the decision in the Austin Motor Company case. It would be interesting to be told something of the consequences of that. I cannot go into the detail of that very important case, but it was conceded by those who acted in court for the Registrar that the effect of the Section 8 (3) exemption was a great deal wider than some of us had thought when we considered the Bill in Committee.

There is no doubt that a consequence of that decision—and it is important that the House should know this and weigh its significance—is that very large-scale exemptions have been conceded to bilateral agreements made between parties neither of whom is a trade association. That is the effect of the decision, as I think all will agree, and it seriously affects the whole objective of the legislation. The result is that a monopoly which is sufficiently powerful to do without the aid of a trade association can do almost what it likes in the way of imposing restrictive practices in its trading as long as it chooses to proceed to do so by way of bilateral agreements. The trade association may be caught by the Act. The monopoly, to a surprising extent, is not.

Those are factors, I suggest, largely affecting the issue now before us and the propriety of determining upon a period like three months in this Order, which is inherently the kind of thing which should not be allowed to float past without investigation and consideration.