Clause 1. — (Avoidance of Conditions for Maintaining Resale Prices.)

Part of Orders of the Day — Resale Prices Bill – in the House of Commons at 12:00 am on 24 March 1964.

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Photo of Mrs Barbara Castle Mrs Barbara Castle , Blackburn 12:00, 24 March 1964

I am sure that the majority of the Committee feels that both Amendment No. 7, which has been moved by the hon. Member for Coventry, South (Mr. Hocking) and Amendment No. 14 in the name of the hon. and learned Member for Hove (Mr. Marlowe) with its five items (a) to (e) are so widely drawn as to be self-defeating. The principle behind Amendment No. 7 is quite unacceptable as a basis for deciding whether or not resale price maintenance should be maintained or abolished. The list of items included in Amendment No. 14 is so comprehensive as to amount to a direct negative to the whole purpose of the Bill. There was really no reason for one hon. Gentleman opposite to assure us that this Amendment had not been put down at the instigation of the Government Front Bench. I cannot see the right hon. Gentleman hurrying to put down this Amendment after one of the secret conspiratorial meetings which he has been having on the Bill.

In my view, there is a case for exempting some of the items listed in Amendment No. 14, but I think that it is a case which needs to be examined very thoroughly and with far more information than is available to us in the Committee today. One of the reasons why I have deplored both the reason why the Bill has been introduced and the manner of its introduction is that we have had to discuss it against the back-ground of quite inadequate information about the social and economic consequences of the Bill. One can only hope that some of the deficiencies will be met by the Restrictive Practices Court when the items come before it one by one.

We are saddled with the Bill. I do not like its machinery. I do not like the reason why it was introduced. I do not like the right hon. Gentleman's economic philosophy. However, having the Bill before us, it is our job not to direct negatives at it but to seek to improve the machinery, modify its evil consequences and be as constructive as possible.

6.15 p.m.

This is why I wish to concentrate on Amendment No. 17, in the name of the hon. Member for Putney (Sir H. Linstead), to add a new subsection (5) specifically to exclude drugs, medicines and surgical appliances from the effect of Clause 1. I can supplement what was said by the hon. Member for Putney from the pharmacist's point of view by some arguments from the consumer's point of view in favour of accepting the Amendment and excepting the pharmacist and his goods. Clearly, the existence of an adequate number of chemists shops, reasonably accessible, is a vital public interest. We ought to make an exception in this case. Chemists provide a service which is, in effect, ancillary to the whole of the nation's hospital and health services. It is no good going to a doctor and being told what is wrong if, on being given a prescription to put the trouble right, one then has the devil's own job to find someone who will translate the prescription into the medicine which one needs.

There is already evidence that the number of dispensing points in the country is on the decline. This was put to me by pharmacists in my constituency when they came to see me about the Bill. They told me that the number of dispensing points was, over the past few years, being reduced at the rate of 13 a month. I thought that I had better check this, so on 16th March I put a Question to the Minister of Health asking him if he would give the number of dispensing points in England and Wales in the years 1961, 1962 and 1963. His Answer bore out the argument which the chemists had put to me. I was told that the number of chemists' shops, drug stores and appliance suppliers in contract under the National Health Service in England and Wales fell from 15,681 in 1961 to 15,208 in 1963. That is a reduction of 480 in three years, and, if my arithmetic is correct, it works out at just about 13 a month. This is happening at a time when the income of the pharmacist as a dispenser under the National Health Service is being supplemented by the sale of goods subject to price maintenance. If resale price maintenance on some of the supplementary goods which he sells is abolished, the chemist's income will be even more in jeopardy.

It is not enough to say that this should be met by an increase in the dispensing allowance which the pharmacist receives under the National Health Service. It is a little more complicated than that. I do not claim to know the rights and wrongs of the pharmacist's argument on whether or not he is being paid enough for dispensing under the National Health Service—I should want to go into it a little more thoroughly—but I am assured that the arithmetic works out in this way.

The margin of profit on National Health Service prescriptions is not enough unless the chemist does over 1,000 prescriptions a month. I gather that the average throughout the country is about 1,200 a month. This means that there must be a large number of chemists, especially in the more scattered areas, who do less than the national average. Therefore, they are doing less than the minimum of 1,000 prescriptions a month. It is they who will be most hard hit and yet the closure of their shops would cause the maximum hardship.

The pharmacist in the central area may be able to get his requisite minimum number of prescriptions per month to keep his head above water, but the outlying shop, perhaps in an area of scattered dwellings, does probably less than the average. I was surprised to be told by chemists in my constituency that of 42 of them in Blackburn, 30 were doing fewer than 1,000 National Health Service prescriptions a month. They are the ones who will be in direct danger of having to close if r.p.m. is abolished over the rest of the range of their goods. This is a matter of public interest. It is one in which I must take great concern as the representative of my constituents. That is why, from a consumer's viewpoint, we should take Amendment No. 17 seriously.

Another point that was put to me by the pharmacists was that if r.p.m. is abolished on the supplementary goods, their non-ethical goods as they call them—a description which is appropriate probably to cosmetics—and if a price-cutting war in these goods begins, pharmacists will be at a disadvantage because they are supposed to observe rather special standards of conduct.

In that connection, I was shown a circular which has been sent by the Pharmaceutical Society to my local chemists, entitled "Important notice about price-cutting". It contains the following paragraph: At present some cosmetics sold in pharmacies are not subject to resale price maintenance and prices to the public are decided by the pharmacist or firm concerned. Following Government action it may be that the list of such items will be increased. The right of each retailer in these circumstances to fix his own prices is not disputed, but the Council of the Society wish to make it clear that any blatant publicity relating to price levels will be regarded as conduct liable to bring the profession into disrepute. Whatever the outcome of the proposed legislation, pharmacies are urged to act with restraint in meeting competition from sources outside pharmacy. They are, therefore, expected to observe levels of conduct which will make it difficult for them to compete in the sort of society into which the Secretary of State for Industry and Trade wants us to move—the price-cutting, cut-throat society in which, apparently, he so passionately believes.

As I understand, what the pharmacists in my constituency are concerned with is not so much whether resale price maintenance should be maintained on cosmetics. Their concern is with the items listed in Amendment No. 17. If they are given price maintenance, they will be satisfied. They have even said that they would not mind having their retail margins controlled. They have this in any event over a large area. Their alarm is lest, in the field of drugs, medicines and medical and surgical appliances supplementary to those prescribed under the National Health Service, they should be subjected to a price-cutting war. This argument of their is a fair one.

They also point out—and here again I am in hearty agreement with them—that instead of our paying so much attention to reducing the retailer's on-cost in pharmacy, the House of Commons would be far better employed in examining the on-costs of the drug manufacturers, which, it is argued, are completely unwarranted and excessive and should be examined by the House of Commons. In this I heartily concur with the pharmacists. In the meantime we must support Amendment No. 17.