Clause 5. — (Power of Court to Exempt Classes of Goods.)

Orders of the Day — Resale Prices Bill – in the House of Commons at 12:00 am on 22nd April 1964.

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Amendment proposed [21st April], In page 5, line 7, at end, insert: (a) the public as purchasers, consumers or users of any goods would be deprived of some specific and substantial benefit or advantage enjoyed or likely to be enjoyed by them as such, whether by virtue of the system of maintained minimum resale prices applicable to the goods of the class in question or by virtue of any arrangements or operations resulting therefrom; or".—[Mr.Turion.]

Question again proposed, That those words be there inserted.

3.56 p.m.

Photo of Sir Harry Hylton-Foster Sir Harry Hylton-Foster , Cities of London and Westminster

In continuing the debate on the Amendment which has been moved by the right hon. Member for Thirsk and Malton (Mr. Turton), I think that it would be convenient if we were first to dispose of the Amendment to the Amendment in the name of the hon. Member for Eton and Slough (Mr. Brockway), and, after that, to come back to the main debate on the Amendment.

Photo of Mr Charles Doughty Mr Charles Doughty , East Surrey

On a point of order. We are in the middle of a debate on my right hon. Friend's Amendment, and when the debate was started there was no suggestion that at this stage we should take the Amendment to it of the hon. Member for Eton and Slough (Mr. Brockway). He was not here to move it yesterday. I am not trying to shut him up in any way, but we are now in the middle of a particular debate and it is now sought to introduce another matter.

With the greatest respect, Sir William, that would not appear to be within the rules of order, because once a debate on an Amendment has been started, it must be continued until, for one reason or another, it is brought to an end.

Photo of Sir Harry Hylton-Foster Sir Harry Hylton-Foster , Cities of London and Westminster

The hon. and learned Gentleman's understanding of the rules of order is not quite correct. The Committee could not finally dispose of the original Amendment unless it had previously decided the Amendment to that Amendment. It was notified on the list of provisional selections and it was certain that at some stage, before a decision on the main Amendment, the Chair would call the Amendment to that Amendment. I believe it to be in the interests of the general conduct of business to act as I have suggested.

Photo of Mr Charles Doughty Mr Charles Doughty , East Surrey

I can think of three hon. Members who spoke last night on the Amendment. There may have been more. None of them mentioned the Amendment to the Amendment, because it had not been called.

Photo of Sir Harry Hylton-Foster Sir Harry Hylton-Foster , Cities of London and Westminster

I can reassure the hon. and learned Member that nobody will be prejudiced. When a decision has been taken on the Amendment to the Amendment, we shall revert to a full debate on the main Amendment.

Hon. Members:

What if the Amendment to the Amendment is carried?

Photo of Sir Harry Hylton-Foster Sir Harry Hylton-Foster , Cities of London and Westminster

We shall revert to a debate on the Amendment as amended.

Photo of Mr Archibald Manuel Mr Archibald Manuel , Central Ayrshire

Quite a number of us were aware that the Amendment to the Amendment was to be called. It was not called yesterday, but, as it has now been called, I take it that there can be no question of its being out of order. I support the contention of the Chair.

Photo of Sir Harry Hylton-Foster Sir Harry Hylton-Foster , Cities of London and Westminster

There is no question of the Amendment to the Amendment being out of order. It is in order and I call the hon. Member for Eton and Slough to move it.

4.0 p.m.

Photo of Mr Fenner Brockway Mr Fenner Brockway , Eton and Slough

Thank you, Sir William, I am very ready to meet the convenience of the Committee, but I will now proceed to move my Amendment, in accordance with your Ruling.

I beg to move, as an Amendment to the proposed Amendment, after the first "goods", to insert: and the workers employed in the production, distribution or sale of such goods". The purpose of the Amendment moved last night by the right hon. Gentleman the Member for Thirsk and Malton (Mr. Turton) is to secure that goods shout d be exempted from the effect of the Bill if the public as purchasers, consumers or users of any goods would be deprived of some specific and substantial benefit or advantage enjoyed or likely to be enjoyed by them as such The purpose of my Amendment to the proposed Amendment is that not merely the advantage of the public as purchasers, consumers or users should be protected, but also the advantage of the workers who are employed in these trades. I think I may say that all of us are concerned that this Measure should be for the good of the purchasers, consumers or users of the goods, but in the drafting of the Bill I think that the problems of the workers who are employed in shops and in these trades have been overlooked.

The workers are quite strongly organised now in the distributive trades. The Union of Shop, Distributive and Allied Workers has 353,000 members in these shops and in these trades. I say at once that because of their organised strength and the ability of those who negotiate on their behalf they have been able to obtain a considerable improvement in the r conditions, and the fact that there is this strong trade union organisation hakes it less likely that they would suffer as seriously under the Bill than if the Bill had been introduced several years ago, when the union had not obtained the same strength. The union has enabled them to obtain a very good agreement in the grocery trades, despite the fact that resale price maintenance is not enforced there; but that is largely due to the fact that their organisation is so strong.

Nevertheless, I would say that, on principle, if we are to think of the public as purchasers and consumers, this Committee ought quite definitely also to think of the workers who are employed in the shops and in the distributive trades, and my Amendment to. the proposed Amendment would have the effect of saying that these arrangements should not be to the disadvantage of the workers employed in the production, distribution or sale of the goods. It seems to me that this principle is so desirable, and that the case for considering the position, the status and the benefit of the workers at the same time as we are thinking of the purchasers and consumers is so obvious, that I do not think that it is necessary to say further words in support of this Amendment to the Amendment.

Photo of Mr Robin Turton Mr Robin Turton , Thirsk and Malton

To reply very shortly to the hon. Gentleman the Member for Eton and Slough (Mr. Brockway), the purpose of my Amendment, as I said last night, is to try to make the gateway the same as in the 1956 Act. That is why these words were used in the Amendment. The hon. Gentleman the Member for Eton and Slough would be altering the gateway as it is known to the Court. There is, however, another, even more serious, objection to the words he proposes. I have directed the Court to look at the interests of those who are purchasing goods in the shops and not the interests of the retail trade. That was made very clear by the Minister of Defence, when he introduced this particular gateway in the 1956 Act.

If the words proposed by the hon. Gentleman were inserted, then the whole question of the interests of the retailer would be brought within this particular gateway, and it would, I think, offend against the principle of the Clause. I have, in principle, sympathy with the hon. Gentleman's Amendment to the proposed Amendment, but I do not think this is the right place to do what he seeks to do, and for all these reasons, therefore, I hope very much that he will withdraw his Amendment.

Photo of Mr George Darling Mr George Darling , Sheffield, Hillsborough

I agree with the right hon. Gentleman the Member for Thirsk and Malton (Mr. Turton) that it would be best for our purpose if we kept the gateway separate, so to speak. I should like to thank my hon. Friend the Member for Eton and Slough (Mr. Brockway) for raising this matter, because I think that we have to keep before us the questions of employment and the effect of the Bill upon employment in the retail trades; and I agree with my hon. Friend that as the Bill stands it does not deal adequately with the question of employment as we would wish.

We intend to raise this matter again, but I think that the best way of doing it is in the way that the right hon. Gentleman has suggested, that it should have a gateway of its own, so to speak. There are Amendments on the Notice Paper, Amendments No. 103 and No. 95 on which this matter can be raised again, and in view of that, I think that it would be wise if my hon. Friend were to respond to the suggestion which has been made to withdraw his Amendment to the proposed Amendment so that we can come back to the issue at what, I think, is the proper place to consider it.

Photo of Mr Edward Heath Mr Edward Heath , Bexley

I would support the request which has just been made by the hon. Gentleman the Member for Sheffield, Hillsborough (Mr. Darling) to his hon. Friend the Member for Eton and Slough (Mr. Brockway) to withdraw his Amendment to the proposed Amendment. As the hon. Gentleman the Member for Hillsborough said, there will be an opportunity to discuss these matters on later Amendments which probably will be selected by the Chair.

However, the hon. Gentleman the Member for Eton and Slough has made some important points in the intervention which he has made. He said that the workers in the industry are well organised and that there is a contrast between their present position and that in a previous period and that they are, therefore, able to make effective agreements in the retail industry. That is important, and I believe it is the proper way in which these aspects from the point of view of those who work in the industry should be looked after—that they should have proper organisation in exactly the same way as the retailers themselves have, proper organisation to look after their interests.

The hon. Gentleman has emphasised that, as a result of their organisation, they have been able to make, as he said, good agreements in the grocery trade, in which, as we all know, resale price maintenance has disappeared, but, as he said, despite the fact that it has disappeared good arrangements have been made for those who work in the retail trade. I am quite certain that this is the proper way in which the interests of those who work in the retail trade should be looked after.

Of course, they are already affected by the provisions of the Bill. One of the gateways—Clause 5(2,b)—out of the three which concern the number of establishments, is inserted as a provision affecting the consumer because the basis of the Bill is the interest of the consumer. At the same time, it affects the number of retailers in existence and this affects the number of those who work in retail distribution. So, through that gateway, their interests are affected although it is true that the organisation of the Bill is in the interests of the consumer.

We shall, no doubt, have a further opportunity, when discussing the main Amendment, to deal with the question of the interests of the consumers, users, and purchasers so I will not deal with them now. But I would also emphasise that the way to look after the interests of those working in the industry is through the organisation—now greatly improved—and through the gateway dealing with the number of retail outlets which are, of course, indirectly affected.

I hope that the hon. Member for Eton and Slough will respond to the invitation to withdraw his Amendment.

Photo of Mr Fenner Brockway Mr Fenner Brockway , Eton and Slough

I do not accept all that the Secretary of State said, because he entirely ignored the principle behind the Amendment which we feel should be embodied in the Bill. Nor did he meet my point that, while the union is much stronger than it was seven years ago and, therefore, able to get better agreements, it does not yet cover the whole of the trade and that certain workers in the trade require the protection of Parliament. Nevertheless, principally in response to the request of my hon. Friend the Member for Sheffield, Hillsborough (Mr. Darling), but while also appreciating the point put by the right hon. Member for Thirsk and Morecambe—

Photo of Mr Marcus Lipton Mr Marcus Lipton , Lambeth Brixton

My hon. Friend's geography is wrong.

Photo of Mr Fenner Brockway Mr Fenner Brockway , Eton and Slough

Morecambe was in the constituency that I fought way back in 1921, when, for the first time, I was a candidate for the House of Commons. I do not know whether I should apologise to the right hon. Member for Thirsk and Mahon (Mr. Turton) or congratu- late him on representing Malton rather than Morecambe.

What I wanted to say was that, in response to the appeals that have been made, I am prepared to withdraw my Amendment in favour of one which will be discussed later and which stands in the name of my hon. Friend the Member for Ogmore (Mr. Padley).

Amendment to the proposed Amendment, by leave, withdrawn.

4.15 p.m.

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

Clause 5 is the heart of the matter just as Section 21 has proved to be the heart of the Restrictive Trade Practices Act, 1956. As I have not previously contributed to the discussions in this Committee, although I have listened to a good deal of it, perhaps I may be allowed to preface what I have to say by stating that I am not an opponent of the Bill. I voted for it and I support the principle which it represents.

Indeed, I sought to make it clear in the controversy over the Common Market that we in this country should be able to take steps to make ourselves fully competitive without the necessity of- having them imposed upon us by membership of any outside organisation.

At the same time, however, I believe that the Bill, like all complex Measures of this sort, can be improved and should be improved if possible. I have a very clear recollection of the formative processes of what is now the Restrictive Trade Practices Act. I remember well the long processes of evolution and formulation which resulted in that Act. I was engaged as the junior Minister in charge of the Act. We approached it in no obstinate pride of authorship. We sought help where we could and improved it is we went along. I hope that we succeeded in our efforts. I am sure that my right hon. Friend the Secretary of State will bring that approach to the consideration of this very important Clause.

It is true that the Restrictive Trade Practices Act governs a wider area of practices and agreements than the single matter of r.p.m. Nevertheless, the basic approach is the same and it is, I suppose, quite simply this: that because of the necessity of our having a competitive economy it cannot be the interest of the trades themselves that must provide the test but that of public interest. That is the test accepted by all.

But the corollary of that is that, in applying the test of public interest, it is necessary to be very careful that all matters which can properly relate to the public interest are capable of being taken into account and that things are not excluded by the technicalities of tight drafting of the Act. As a result of that approach in the Restrictive Trade Practices Act, Section 21 emerged with seven gateways—one general and six specific.

In practice, the general gateway has prove to be incomparably the most important of them all. The Amendment moved by my right hon. Friend the Member for Thirsk and Malton (Mr. Turton) is based on the general gateway in Section 21(1,b) of the 1956 Act. I will summarise briefly the differences between the 1956 provisions and the provisions in this Bill as drafted.

There is, first, the substitution of the three specific gateways for the general approach of the 1956 Act, but there are, in addition, certain rather more technical differences. None the less, these are differences which might or would have important consequences. There is, first, the substitution for the general words "any goods", contained in Section 21 of the 1956 Act, the narrower words "goods available for sale"—that is to say, goods covered by r.p.m. This involves a narrowing or tightening up in this Bill of the test.

Then there is the omission from the Bill of the phrase …purchasers in addition to consumers and users… and the omission of the words which the Amendment seeks to include: …or by virtue of any arrangements or operations resulting therefrom; In considering what the attitude of the Committee should be to these matters of difference between the Act and this Bill, perhaps we should start from the point that r.p.m. is not, of course, exactly analogous with the variety of restrictive practices which come within the jurisdiction of the 1956 Act.

Nevertheless, there is a close enough similarity to allow at least some pre- sumption that what has worked well in the 1956 Act should be the starting point for the consideration of the gateways in the Bill. It is. perhaps, for the Secretary of State to show cause to justify the differences put into the Bill and, in particular, to show why no general gateway has been provided.

I am not an expert on the retail trade and I have not been in touch with any organisations of retailers. It may be that these three matters specified in the gateways in the Bill—the reduction in the quality and variety of goods, reduction in the number of establishments and the cessation of necessary services actually provided—are the only conceivable matters which could be adduced bearing upon the public interest. But I would think it contrary to experience and probability that we could pinpoint all matters in advance which could be related to the determination of the public interest. It is certainly contrary to the actual experience of the operation of the Restrictive Trade Practices Act, 1956.

One could readily consider the sort of examples that would lie outside these narrower gateways—for example, services which might result in benefit to the public but could not be shown to be reasonably necessary for the benefit of consumers and users within the language of the Bill.

Then there is the other aspect of services—the provision of service on a less advantageous basis which might be a detriment to the public but is not within the narrower language of the Bill, which restricts the test to a cessation or reduction of services—in other words, a quantum judgment.

Then there is the possibility that abrogation of resale price maintenance might result in a diminution in the quality or variety of other goods stocked—not the goods actually covered by the resale price maintenance agreement but other goods. If a general uncertainty were introduced into a retailer's position by such abrogation, it might cause him to stock less of some other article not actually covered by the agreement. Under the Bill that is not a matter which he could deploy before the Court, but under the different and wider language of the Restrictive Trade Practices Act he could do so.

Perhaps an appropriate method of testing the matter is to see what was taken into account in the net book agreement, where the practice of resale price maintenance was considered by the Court. It took into account three consequences, in these words: These consequences which we think would flow from condemnation of the agreement can be summarily stated as: first, fewer and less well-equipped stockholding bookshops; second, more expensive books; third, fewer published titles. As to the second—more expensive books—the matter of price is not at present catered for in the gateways in the Bill.

It may be that it is thought that it is a paradoxical result of a resale price condition if the establishment of minimum prices should have that result. Indeed, that was precisely the case put forward on behalf of the Registrar of restrictive practices in the net book agreement. He put forward his case that it was a paradoxical argument that the abrogation of resale price maintenance could possibly result in higher prices. Counsel for the Registrar said: The Association's case rests on the paradox that if retailers were allowed to sell books more cheaply, fewer books would be sold and books would become more expensive. He put that forward as a paradox, and submitted to the Court that The Association has totally failed to establish that prices overall would be higher if the agreement were abolished. The Court took account of that argument, and dealt with it in the course of its judgement in the net book agreement case. It decided in these words: The purpose of the Agreement is to maintain resale prices. It was formulated and has been kept in being with the intention of preventing retailers from offering books for sale at less than net prices. Counsel for the Registrar says that it is paradoxical to say that a consequence of ending such an agreement would be higher prices. But it must be borne in mind that the agreement is not a price fixing agreement. Its object is not the maintenance of any particular price maintenance or price level throughout the trade or any section of it… The main object of the agreement is to preserve retail price stability. It is not an instrument for fixing prices. The Court then posed quite specifically the question whether books would become dearer without resale price maintenance. On that, it found in answer to the question "In these circumstances, would books become dearer?" "Not on the average, but generally, if aot universally", and said: The point of balance between freely competitive forces pushing prices down and the cautious approach of publishers tending to put prices up would no doubt be different for different kinds of books. We consider, however, that the upward thrust of the increased cost of production would be more urgent and effective than the reverse thrust of sales resistance. Thu public would pay higher prices for many, and probably most, books more readily than, publishers would reduce their margins. The consequence would be a rise in the general evel of list prices. That was the ratio decidendi of the net book agreement.

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

I will give way in a moment to the hon. Member for Grimsby (Mr. Crosland).

I know that he is interested in these matters and has an extensive knowledge of the subject. I am merely making the point that, whatever the economic aspects of this may be, here is a matter which was specifically found to be not only a material factor in that case but the decisive factor, and it is admissible under the definition of the Restrictive Trade Practices Act but not admissible under the Bill as drafted.

Photo of Mr Anthony Crosland Mr Anthony Crosland , Grimsby

I am most grateful to the right hon. and learned Gentleman, and I am sorry to interrupt him when he is making such a closely reasoned argument. However, are there any circumstances it which prices could go up for reasons other than those already covered by tie three gateways, such as, for example, limitation of number of retail outlets? I cannot conceive of any way in which prices could go up for reasons other than those already covered by the gateways, and this certainly applies to the fears expressed about the results of abrogating an agreement.

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

I think that a close reading of the judgment in the net book agreement case, and perhaps that in the Cement Association case also, would provide the hon. Gentleman with possibilities of ways in which that night happen. I am not, I assure him, taking any dogmatic view about it, and, as I explained earlier, I have no expertise in the field of retail trade at all. I am not, therefore, able to supply all the possible ways in which this might happen. All I am submitting to the Committee is that if there are possible ways which could be deployed on the broader definition of public interest, we as a Committee of the House of Commons must be very careful not to narrow the definition too tightly so as to exclude even the possibility of their being canvassed, as they were in the Net Book Agreement case.

Photo of Mr William Shepherd Mr William Shepherd , Cheadle

Would my right hon. and learned Friend assist the Committee by telling it of one other commercial activity where the circumstances are the same as, or similar to, those which obtained in the book trade?

4.30 p.m.

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

I could not make "off the cuff" any such closely detailed comparisons between the book trade and other trades. My hon. Friend, who is, I know, closely interested in industrial matters, will appreciate that the cases that come before the Court take a very long time to try and that the circumstances of the industry in question are gone into in very great detail indeed, and it is in the course of that, with the salutary processes of cross-examination, and so on, on both sides, that these matters are sifted. All that I am arguing is that the tests should not be so tightly drawn that any legitimate matters, be they what they may, cannot be put forward.

I have given some examples drawn from services and prices and the possibility of a reduction in the stocking of other goods. I think that they are sufficient examples of matters which, clearly, would come within the broad gateway of Section 21(1,b) but which would not, or at any rate might not, come within the Bill as drafted. If it is right that they are the sort of matters which should be taken into account, if that is the right value judgment to be made on the economics of it, then the wider wording of my right hon. Friend, or something approximating to it, would be more satisfactory, unless, of course, it is apprehended that to introduce the wider wording into the Bill would admit of the canvassing before the Court of matters which are better excluded. But if that be the case, I think that my right hon. Friend the Minister should help the Committee by indicating what are those matters which he fears may come in on the wider definition and which would be harmful or undesirable.

After all, nobody can say that the 1956 Act has been tender on restrictive practices. It was not meant to be, and it has not been. Statistics were given in the most recent report by the Registrar. They show that 2,430 agreements were registered, 1,505 of them being determined by the parties or stripped of their offending restrictions without need of recourse to the Court at all, 160 being referred to the Court, with 46 cases in various stages of preparation. Of those which have been tried, only a handful have got through the Court—about seven or eight out of that large number—and of those nearly all have got through the broad general gateway of Section 21(1,b).

I do not wish to detain the Committee for too long, but I hope that I may have its indulgence far a moment or two, because I think that it is not uninteresting in the barest summary just to look at the sort of findings which have come out of the Restrictive Practices Court where an association has succeeded in justification. They are nearly all under the specific and substantial benefit provisions of Section 21(1,b), and, further, they are to a large extent benefits consequential on the agreement rather than necessarily the direct operation of the agreement itself.

In the permanent magnets case, what won the day was the technical cooperation dependent on the price agreement, not as a result of physical causation but in the wider interpretation of the words "resulting therefrom" at the tailpiece of my right hon. Friend's Amendment, and in Section 21(1,b).

The tile case was decided on the benefits of standardisation which were held to flow from the price agreement. The standard metal windows case was decided primarily on the keeping down of operating costs by reason of the exchange of costing and technical information which it was held would cease or be materially diminished if there was no price agreement.

The cement agreement which has been referred to was justified on the ground that it gave greater security to the investment of cement makers, and thereby enabled them to accept lower returns on their capital, that in turn, leading to lower prices. The bolts and nuts price agreement was justified because it avoided the necessity for stockholders to shop around for these very small and varied commodities and thereby constituted a specific and substantial benefit.

All these cases were decided- under the broad gateway under Section 21(1,b).

When one looks at the narrow and specific gateways, there is a very small calendar of success indeed. The only case under paragraph (a), on safety, the tyre case. did not succeed. The jute goods agreement under paragraph (c) did not succeed. The sulphuric acid case succeeded on the technical gateway of paragraph (d) of Section 21(1).

That brief and necessarily inadequate summary of the experience of the Restrictive Practices Court, and the analysis of those cases, shows three things: first, that there has been no stampede through the broad gateway of Section 21(1,b); secondly, that nearly all the cases which have got through the Court have passed through the broad gateway rather than through the narrow and specific ones—indeed, from the figures that I have given, without the broad gateway there would scarcely have been a trickle through at all—thirdly, in enabling an appropriate adjudication to be made on this test, the words or of any arrangements or operations resulting therefrom have had a most important, and often decisive, effect on the consideration of the test of the public interest. Those words will be absent from the Bill, unless they are incorporated in it by acceptance of my right hon. Friend's Amendment or a similar Amendment.

We have the position that not only are the gateways narrower than in the 1956 Act, but the approach to them is narrower, too, because in the one case one can have regard to the benefit derived from any arrangements or operations resulting from the restrictions as well as to benefits from the price fixing agreement itself, while under the Bill as drafted one is restricted in the assess- ment of benefit from the actual operation of resale price maintenance.

Just how important that difference can be, or has been in the case of the 1956 Act, is very clear from the cases decided there under and if one starts from the presumption that there ought to be similar treatment, one wants to know why it is that that particular provision, so important in practice in the 1956 Act should not also find a place in the Bill.

I have put forward these thoughts to the Committee, based on a fairly long interest in this subject. I appreciate that if it is possible to confine tests to specific tests it is a good thing in an Act which has to be interpreted by a judicial process. Of course, it is better for the Court, in dealing with issues, to have those issues as specifically drawn as possible by Parliament. I think that there is no doubt about that, and, therefore, if it is possible to specify the test of public interest by a comprehensive catalogue of specific tests, that is the best thing to do; but it is not right to say that because it is more easily justiciable if it is confined to specific issues one is justified in making that approach, if the issues which one is putting before the Court are not the right issues, or the whole of the issues, for the determination of public interest.

I am more inclined to a broader test than I othewise would have been, by reason of the fact that the experience of the 1956 Act has shown that this broad test of specific and substantial benefits, although to some extent an economic value judgment, has nevertheless operated well in a judicial court in which there are five full members, one of whom is a judge, the other four being drawn from various representative walks of industrial and commercial life and having the necessary experience thereof.

Although it may be said that my right hon. Friend the Minister is trying to achieve the ideal—to make an exhaustive catalogue of the tests of public benefit according to:specific criteria—experience has nevertheless shown that a broad gateway can be operated effectively and appropriately. This is a very important matter. It is not one which should give rise to strong feelings or passion, and there are no great questions of conscience involved. In many respects it is a technical matter. Nevertheless, it is a very important one, not only for the community but also for those who are engaged in the retail trade.

What the Committee, the House and the Minister owe above all to the community is a detailed, dispassionate and objective study of all those considerations, with the determination that the Bill will leave the House as good a Measure as the collective wisdom and experience of the House can make it. It is in that spirit that I invite the Minister to study my right hon. Friend's Amendment and the considerations arising from it, and at any rate, between now and Report, to give it such further consideration and make such inquiries as he can, with a view to deciding to include a broad gateway—if not this precise one—which will allow a wider interpretation of the public interest, or, alternatively, if he thinks that he can succeed in solving the problem by specific tests only, to add to the catalogue of those specific tests all the possibilities which appear even remotely likely to arise in the consideration of the test of the public interest.

It may take a little longer to do that, but it will have the corresponding benefit of making this a better Bill and thereby better serving the public interest.

4.45 p.m.

Photo of Sir Arthur Irvine Sir Arthur Irvine , Liverpool Edge Hill

do not dissent from the account which the right hon. and learned Gentleman has given of what he thinks is the right state of mind that the Committee should bring to bear upon the problem. It is an interesting problem, and I quite accept his account of the manner in which it should be approached. The right hon. Member for Thirsk and Malton (Mr. Turton) impressed the Committee last night with the argument he put forward. He made certain assumptions about what my hon. Friends' attitude would be to the recommendations he had to offer. I am glad to be able to indicate from this side of the Committee the impression made upon us by the arguments he presented.

There are formidable arguments against the Amendment. As it stands, the Bill is based upon the assumption that resale price maintenance, in principle, is detrimental to the public, as consumers or users. At the same time, he is in a difficulty when it is put to him by his right hon. and hon. Friends that on analysis his Amendment challenges that assumption.

Let me test the matter with the Committee in this way. The right hon. Gentleman raised the matter of price as a point of particular importance, and I agree that it is immensely important. He said that in respect of certain commodities the public liked standard prices. That may well be so. It would certainly seem desirable that an argument based upon that assumption should receive careful consideration. The difficulty is that if the matter comes before the Court, and if, on the evidence, it is made clear that in respect of certain goods the public does like standard prices, the element of standard price will, within the terms of the Amendment, be a specific or substantial benefit or advantage.

As I understand the Amendment, however, it will still be necessary for the Court to balance the loss of that advantage against some other kind of detriment which is regarded as attaching to resale price maintenance. Great difficulties might arise in that connection. I may be telescoping my argument too much, but to me words would have lost their meaning if the Court were to be asked to weigh the proved advantage of a standard price, on the one hand, against a disadvantage—assumed in the Statute—of a standard price, on the other. This is the character of the difficulty that faces the right hon. Gentleman, and it is a real one. That is why, considering the argument which can be brought against it, I regard it as being very much a wrecking Amendment, although I accept at once the right hon. Gentleman's assurance that that is not his intention.

That is the argument which can be brought against the Amendment. What about its merits? The right hon. Gentleman made certain assumptions about the reactions of my hon. Friends and myself to his proposals. I have no doubt that there are certain merits in his proposal, and I would have thought that the Government ought to have regard to them. But let us suppose that it was proved in evidence before the Court that the public liked a standard price for a certain class of goods—which is an easy and rational assumption to make. It would seem distinctly odd that that Court should not then be free to take that factor into account. I regard the view expressed by the right hon. Gentleman in support of his Amendment as having merit, but it is an odd and undesirable feature that the Court, in that hypothesis, should not be free to take such a factor into account.

The difficulty which faces hon. Members on both sides of the Committee under this head probably arises from considering resale price maintenance as capable of being treated as a matter of principle. If, for some goods, resale price maintenance is a good thing and in others it is a bad thing, then, logically, the view may be taken that it is not an issue of principle at all and I think it possible--on this, I would go some distance with the right hon. Gentleman—that we have been inclined thus far to treat the issue too much as an issue of principle and too little as a matter of practical significance and application.

At this stage in our consideration of this Amendment, I ask the question: should not the Government show a readiness to give further consideration to the proposal contained therein? The arguments brought before the Committee by the right hon. Member for Thirsk and Malton have been fortified by the arguments of the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith). I think that the right hon. and learned Gentleman was a little qualified in some of the support which he gave, but in substance, as I heard him, he supported the Amendment.

From this side of the Committee I ask whether the proper course in this situation is for the Government to say that they will give further consideration to the Amendment. If, in its present form, it is thought to go too far, or, for the reason which I have ventured to adumbrate to the Committee, to be a wrecking Amendment, is not there, even so, something to be said for the Government expressing a readiness now to consider the treatment of this problem at a later stage in the Bill in the light of the representations put before the Committee under this head?

It might be done—I put this forward for consideration—by an Amendment to what has been called the tail-piece of the Clause, by giving a supplier an oppor- tunity in respect of a particular class of goods to argue before the court that, contrary to the assumption in the Bill as it stands, no detriment would result from the maintanance of minimum resale prices in respect of those goods. That would be a change in the language of the Bill deserving, I suggest, the serious consideration of the Committee.

The right hon. Gentleman will appreciate that if that treatment were given to the matter, the burden of proof on such an issue would, of course, be on the supplier and to that extent what is today the basic assumption of the Bill would remain its basic assumption. In other words, wet e that kind of treatment thought appropriate to the problem, the Secretary of State would not have abandoned the basic assumption which he has, perhaps rightly, invited the Committee to accept, that, in principle—to use that language—resale price maintenance is undesirable in the interests of the public as user and consumer.

On the arguments advanced on behalf of this Amendment, I would say that although it seems to some of us that the Amendment goes too far, and would have, were it accepted, consequences that would perhaps be overall detrimental—aid ought we shall listen to the whole of the argument—none the less, there is undoubted force, within the context of the Amendment, in some of the complaints which the right hon. Gentleman has made of the content of the Bill as it new stands, and I think it in the general interest that appropriate regard should be had to this.

Photo of Mr Charles Doughty Mr Charles Doughty , East Surrey

This is one of the most important Clauses in the Bill. I think that that has been agreed by all hon. Members who have spoken. Therefore, it is only t and proper that we should spend some time debating it. There would seem a considerable uniformity of view, with the usual technical differences, between hon. Members on both sides of the Committee. I say at once that I entirely agree with what was said last night by the hon. Member for Ebbw Vale (Mr. M. Foot). We must be grateful to the hon. Gentleman for the length of his speech, which has enabled this matter to be discussed before a larger attendance the Committee, with hon. Members present to give the full view of the Committee on this matter.

I will not digress on the points which were raised by the hon. Member for Ebbw Vale about party committees and Ministers, or "Shadow" Ministers, attending party committees. I do not think that the hon. Gentleman would obtain much support for his views from hon. Members on his own side. As individual hon. Members are entitled to do, he expressed his own personal view, but I do not think that he would expect many people to agree with what he said.

I think that there was one fallacy in what was said by the hon. and learned Member for Liverpool, Edge Hill (Mr. A. J. Irvine). He began by saying that the Bill starts with the assumption that resale price maintenance is a bad thing. It does not. The Long Title of the Bill says that the purpose is to Restrict the maintenance by contractual and other means of minimum resale prices in respect of goods supplied for resale in the United Kingdom; and for purposes connected therewith. The House decided to give the Bill a Second Reading and to my mind that wording shows that the view taken is that there must not be unrestricted resale price maintenance, as was allowed under the 1956 Act. A line must be found somehow—it is not an easy thing to do—between resale price maintenance agreements which are what one might call good and those which are bad and must be stopped. In many trades and industries resale price maintenance is vital and necessary. In this Committee it is quite impossible to take one trade after another and for hon. Members to decide, by a Schedule or Section in an Act, what trades shall be in or shall be out.

That is why—I say this courteously—the discussion by the hon. Member for Ebbw Vale about the newspaper industry was not one that we should consider in this Committee, or vote that it might be right or wrong that there should be resale price maintenance. After what might prove a lengthy hearing of a great deal of evidence, that should be decided in the Restrictive Practices Court and not in this Committee.

Photo of Mr Michael Foot Mr Michael Foot , Ebbw Vale

If that be the view of the hon. and learned Gentleman, why did not he interrupt his right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith), who illustrated the gateways under the Restrictive Trade Practices Act by citing a series of specific commodities just exactly as I did?

Photo of Mr Charles Doughty Mr Charles Doughty , East Surrey

I did not interrupt my right hon. and learned Friend because he was giving a history of what happened under the 1956 Act which is another thing altogether.

I should like to say that I could not support the Amendment of my hon. Friend the Member for Putney (Sir H. Linstead) because I consider it better to make an exemption for one trade or industry. Because I voted against his Amendment does not mean that I do not have the fullest sympathy with the chemists. I think that they ought to retain resale price maintenance, but that should not be something done by the House of Commons. That is why, in conformity with the view that I have already expressed, I could not possibly support the Amendment.

We must be extremely clear about what gateways—if that is the term we wish to use—we propose to use under the provisions of this Clause. I have read Clause 5 many times. I have read it slowly, and quickly, and I have gone back to the various subsections. I consider that the Clause has many defects and should be redrafted. I am glad that my right hon. Friend the Member for Thirsk and Malton (Mr. Turton) was able to put down this Amendment, which has good parentage because it comes more or less straight from the 1956 Restrictive Trade Practices Act. We could say that this is much too narrow a gateway.

Although this is a Bill to restrict resale price maintenance, if we are not careful, and use this form of words, we shall produce a Bill to end resale price maintenance, with all the hardship to the public and to the retail trade which would result.

5.0 p.m.

I do not know whether my right hon. Friend, when he replies, will try to point out that in the particular words of this Clause the matters to which I shall refer are already covered. I do not think that they are, particularly because of what has been called by the hon. and learned Member for Edge Hill the tail end piece, but which I prefer to call the proviso at the end. When we look at the particular gateways which have been put there, we must also read the proviso that applies to any subsection.

The Clause states: …the quality of the goods available for sale, or the variety of the goods so available, would be substantially reduced to the detriment of the public as consumers or users of those goods… They are rather vague words. Whether the resulting detriment would outweigh any existing detriment to the public or the consumer using the goods in question would be an almost impossible task for the Court to assess.

I would point out to the Committee that the words of the proviso in the 1956 Act are different. The Court has further to be

…satisfied (in any such case) that the restriction is not unreasonable having regard to the balance between those circumstances and any detriment to the public or to persons not parties to the agreement (being purchasers, consumers or users of goods produced or sold by such parties, or persons engaged or seeking to become engaged in the trade or business of selling such goods or of producing or selling similar goods) resulting or likely to result from the operation of the restriction. I am not trying by anything that I say or proposal I make to support any wrecking Amendment or to provide a gateway through which everybody could rush, because to do so would make a nonsense of the Bill. That being so, there would be no point at all in having the Bill before the House or the Committee.

There are some things which we want to consider very closely. I take the view—I may be wrong and prophecy in these matters is always difficult—that one of the results of the Bill, in some matters, at any rate, would be not a decrease but an increase in prices, after possibly a slight decrease to start with. I have a letter, with which I shall not weary the Committee, from a former constituent who has been engaged during the greater part of his working life in the retail trade in Canada, where resale price maintenance at one time was abolished.

The writer mentions the names of a number of shops in which he worked. The net result of the abolition was that, in fact, the price of a large number of goods increased. If, on reference to the Registrar, an industry could satisfy the Court that such a result was likely to follow, it most certainly ought to be allowed to do so, and to obtain exemption without the very restricting, to use the hon. Gentleman's words, tailpiece of the Clause.

We must remember, also, one of the results of resale price maintenance. In nearly all these resale price agreements—I shall not take any particular industry or trade—between the manufacturer and the trader there is nearly always a reciprocal agreement. I think that we are too much inclined to forget the reciprocal agreement, that the trader shall stock a particular number of goods, that he shall provide services for those goods, and that, in other words, he shall see that the customer is satisfied.

In some cases, those services may be necessary for safety. If a motor car, for instance, becomes defective, it may be dangerous to the driver and to the public. If an electrical apparatus begins to give trouble, it may set the house on fire. There may be other goods at present which I are subject to resale price maintenance which are not a danger to anyone, but it is extremely annoying, when one buys them, if they go wrong, and there is no service. At present, the retailer at once puts those matters right. That is of considerable advantage to the public. I suggest that some words ought to be put in the Clause to cover that type of case.

Photo of Sir Douglas Glover Sir Douglas Glover , Ormskirk

I am sure that this argument, although very interesting, is not accurate. Some firms today give services and other do not When resale price maintenance is abolished, some firms will give service and others will not.

Photo of Mr Charles Doughty Mr Charles Doughty , East Surrey

There is no incentive whatever to give service if all that one can get out of the deal is the very minimum amount of profit. Then, the only incentive is to turn over the maximum number of goods at the smallest amount of profit, and if one brings an article back to a shop, and says, "This thing will not work," the shopkeeper says, "That is too bad; I could not care less." have made only a few shillings profit on it, and you had better get hold of ] the manufacturer who made it,"—and who may be in Birmingham, Sheffield, or wherever it was.

Photo of Mr Kenneth Lewis Mr Kenneth Lewis , Rutland and Stamford

Is it not a most extraordinary argument to suggest that if one buys something and it fails, then it is just too bad? Firms sell quality goods because they cannot afford a once-for-all sale and must have continuity of sales.

Photo of Mr Charles Doughty Mr Charles Doughty , East Surrey

If my hon. Friend thinks that when goods are sold with this restriction, service will always be given, he lives in a world of imagination. Of course, every trader tries to do his best, but to maintain that best he has protection from the manufacturer and also a fair amount of profit. I have outlined one or two general matters and I hope that the Minister will look into this Clause again. It does not require the wide opening of the gateway. This is not a Bill to abolish resale price maintenance.

I ask my right hon. Friend to look at this matter and to remember the effects of too restrictive a gateway. I hope that at some stage he will give us fresh thought—in particular, a fresh tailpiece or proviso in place of the one which I think is not fair to those who want to continue this practice.

Photo of Mr Patrick Duffy Mr Patrick Duffy , Colne Valley

If the hon. and learned Member for Surrey, East (Mr. Doughty) thinks that unanimity about the importance of this Amendment extends through the whole Committee I agree with him, but, if he thinks that it goes beyond that to support for his right hon. Friend the Member for Thirsk and Malton (Mr. Turton), I cannot agree, because, unlike some of my hon. Friends, I had the benefit of listening to the right hon. Member when he moved this Amendment last night.

I do not share the standpoint of the right hon. Member, but I agree with my hon. Friend the Member for Ebbw Vale (Mr. M. Foot) that he made a formidable case. It was one which the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith) only fortified, and not to a tremendous extent. He only echoed what was said last night. The right hon. Member for Thirsk and Malton seemed more con- cerned that there was no provision in the Bill for defining and recognising what is in the broad public interest. He even said that he had looked for some help in this connection at the speech of the Prime Minister at Swansea on 20th January, and in the speech of the Secretary of State for Industry and Trade in the House on 15th January.

Because he had received no assurance from those quarters, he was now seeking to put into the Bill the definition laid down by the Government as being in the public interest in the 1956 Act. In addition to the provision of the three specific gateways in the Clause he wanted a general gateway. It may be of benefit to the Committee if I quote what was said last night by the right hon. Gentleman the Member for Thirsk and Malton because some of my hon. Friends might not have been present at that time. He said: It is important that those who wish to argue the case that their resale price system is in the public interest should have full liberty to do so before the Restrictive Practices Court. As the Bill is drafted, that is not done. I shall return to that later.

I also quote the right hon. Gentleman as follows: In the Bill, my right hon. Friend has no broad general gateway of defining the public interest. What he has done is to define three narrow gateways of specific public interest dealing with quality or variety, the number of establishments and the reduction of necessary services. That does not deal with the kind of arguments that will be adduced before the Court by many interests. Two specific arguments which are left out and which are of great importance are price and, secondly, general service which is given—not necessarily services, but the general service given by a dealer to a customer"—[OFFICIAL REPORT, 21st April, 1964; Vol. 693, c. 1244–5.] I comment on the second part of that second quotation, which refers to services. 1t does not follow that general service before or after sale will be jeopardised since the Bill specifically allows manufacturers to go on making exclusive agency agreements with retailers. It is the usual practice, despite what was inferred by the hon. and learned Member for Surrey, East, to make certain minimum standards of conditions of granting such a franchise.

It is particularly to the concern of the hon. Member for Thirsk and Malton for provision for "public interest" that I address myself. He referred to the net book agreement, as did his right hon. and learned Friend, although it was interesting to note that when the latter was asked to broaden the basis of his argument he was unable to do so. The right hon. Member for Thirsk and Malton also quoted the judgment of Mr. Justice Buckley and Mr. Justice Diplock in respect of the Cement Association. From this he adduced that they had been influenced by what they believed to be in the public interest and he concluded that as a result price is the "major argument in the public interest."

I wonder whether he has taken sufficient account of the changed attitude of the Court towards trade associations. I wondered this while listening to the right hon. and learned Member for Hertfordshire, East. I wonder whether they have taken sufficient account of the changed attitude of the Court since 1956 towards trade associations, which had nothing to do with a policy decision of this House. I wonder whether the two right hon. Members would have as ready a recourse to the very rigid interpretation of the Restrictive Trade Practices Act by Mr. Justice, now Lord, Devlin.

It is interesting to glance back and to read what Lord Devlin said in the Court's first case. He said: We are not to consider whether competition…is desirable or undesirable… Such questions of general policy are settled by the Act… Our task is 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 this House can properly determine economic policy. It cannot—or rather it ought not to—pass the buck to the courts. This, I suggest, is precisely what some hon. Members are trying to do when they argue the need for public interest to be provided for in this Clause.

5.15 p.m.

If I had no other reason for doing so, I should have been persuaded of the need for new legislation given the changed attitude of the Court since 1956, especially the Court's pronouncements in 1962 on metal windows and permanent magnets. Incidentally, I note that the right hon. Member did not summon to his aid the Monopoly Com- mission's approval of r.p.m. in cigarettes as recently as 1961. To allow the Court to judge what is in the very nebulous "public interest" would be to permit further blurring of the distinction between economic policy which should be decided in Parliament and the administration of justice.

Before leaving this point, I want to quote again from what the right hon. Member for Thirsk and Malton said last night: In particular, I hope that I have shown that the net book agreement could not succeed unless we widen the gateways. The Minister has not really dealt with the question of safety, and the present gateways mean that pharmaceutical goods, for instance, would not really be covered by the existing three narrow gateways."—[OFFICIAL REPORT, 21st April, 1964; Vol. 693, c. 1249.] I was interested to hear him say that because many hon. Members—certainly most of my hon. Friends and the steering committee on this side of the Committee were largely moved to support Amendment No. 17 on grounds of safety.

Photo of Mr Tom Iremonger Mr Tom Iremonger , Ilford North

Will the hon. Member say precisely to what steering committee he is referring?

Photo of Mr Patrick Duffy Mr Patrick Duffy , Colne Valley

If that is a serious error, I marvel that I have not committed it before in my 13 months in this House.

Photo of Mr Ellis Smith Mr Ellis Smith , Stoke-on-Trent South

Hear, hear. And that is my hon. Friend's reply.

Photo of Mr Patrick Duffy Mr Patrick Duffy , Colne Valley

If the right hon. Member for Thirsk and Malton was so concerned for safety, given the motive which moved most hon. Members on this side of the Committee to support Amendment No. 17, why did ho not join with them and with some of his hon. Friends in supporting that Amendment? Why did he go into the Lobby in opposition to Amendment No. 17?

Photo of Mr Robin Turton Mr Robin Turton , Thirsk and Malton

These matters should be left to the Court to decide and not to the House of Commons. That is why I supported my right hon. Friend on that Amendment.

Photo of Mr Patrick Duffy Mr Patrick Duffy , Colne Valley

I hope that the right hon. Gentleman will support our further Amendment on safety and our other Amendments to Clause 5.

Photo of Mr John Arbuthnot Mr John Arbuthnot , Dover

I think that the hon. Member ought to come back to the Clause.

Photo of Mr Patrick Duffy Mr Patrick Duffy , Colne Valley

Despite what I have said about the net book agreement, I want to say how much I share the concern expressed last night by my hon. Friend the Member for Ebbw Vale. I am both to broaden the provision for exemptions in the Bill. I want to restrict the criteria to the three provided for in the Bill. However, I can see the case for an exemption in respect of books. Where, as I have said previously in Committee, Gresham's Law begins to operate, the bad threatens to drive out the good, and where the texture of our life and the quality of society is threatened, then I think an exemption should be granted. But this is not an economic argument.

It is difficult to imagine what experience, for example, the Restrictive Practices Court will expect to summon to its aid in order to judge what is believed by it to be economic policy and what is believed by it to be in the public interest. That is why I hope that we shall restrict the criteria to three, and I wish to say briefly why. To make the first, I cannot conceive that in the absence of resale price maintenance the quality of merchandise will suffer. Manufacturers will have a reputation to maintain with reputation and consumers, as an hon. Member observed a little while ago.

As for the second gateway, much will depend on what interpretation will he placed on "substantially reduced". Unless this gateway reduces substantially the number of shops then the object of the Bill will be clearly defeated. Consideration of the third ground for exemption must give due weight to the freedom of choice and must allow for the distinct possibility that some consumers may prefer lower prices to additional after-sales services.

I can readily imagine that more competitive conditions may stimulate retailers to give a higher standard of after-sales service than they do at present. That is already the tendency in America, where manufacturers, rather than retailers, are now making themselves responsible for it, especially in the field of electrical appliances. I think that everything points to this going much further.

The crux of the Bill, I would say, in conclusion, is the condition on which exemptions may be claimed from the general ban or abolition. The effectiveness of abolition is going to depend also on the speed of decision, and speed of decision has not been one of the virtues of the Court—the speed with which cases for exemption are heard and how the judiciary interprets the three main grounds on which exemption may be granted, and also the character of early decisions.

That being so, I see again the need for speed, the need for the Court to address itself to the Bill when it becomes an Act and to its wording and not to economic policy. I hope that the right hon. Gentleman the Minister will resist all the pressures to which he has clearly been exposed this week and will confine the criteria for exemption to the absolute minimum.

Photo of Sir Charles Mott-Radclyffe Sir Charles Mott-Radclyffe , Windsor

The hon. Member for Colne Valley (Mr. Duffy) inadvertently lifted the veil for a second by referring to a steering committee upstairs which discussed this and other Amendments, a veil which the hon. Member for Ebbw Vale (Mr. M. Foot) was most careful not to lift last night. Could it be that upstairs the hon. Member and some of his hon. Friends were discussing whether to put down this, that or the other Amendment, or whether to support or not to support Amendments put down by hon. Members on this side of the Committee?

Photo of Mr Patrick Duffy Mr Patrick Duffy , Colne Valley

I am grateful to the hon. Member for giving way. As I was responsible for this, I would like to assure him that there was no one present at the meeting to which I referred who had responsibility for the Bill.

Photo of Mr Edward Heath Mr Edward Heath , Bexley

In fairness, the hon. Member ought to inform the Committee that no one responsible for the Bill was invited.

Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North

I can assure the right hon. Gentleman that so far as I know no meeting took place upstairs at all.

Photo of Sir Charles Mott-Radclyffe Sir Charles Mott-Radclyffe , Windsor

Naturally, I am grateful for that reassurance.

For my part, I was only intending to express sympathy for the hon. Member for Ebbw Vale at being excluded from these select gatherings upstairs in which some of his hon. Friends took part—a steering committee, considering, in a remote way, our discussions this afternoon, but apparently in no way connected with the Bill.

I feel a little diffident about intervening in this discussion, because I am neither a solicitor, a barrister, a wholesaler or a retailer. I rise to support the appeal made by my hon. and learned Friend the Member for Surrey, East (Mr. Doughty) to my right hon. Friend the Secretary of State in regard to his reactions to this Amendment. Of course, Amendment No. 69 is an Amendment of considerable substance. Nobody who listened to the speech of my right hon. Friend the Member for Thirsk and Malton (Mr. Turton), who moved the Amendment last night, or to the speech of my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith), who supported it with such technical detail this afternoon, could fail to appreciate that it is an important Amendment of some substance.

None the less, I entirely agree with my right hon. and learned Friend the Member for Hertfordshire, East that this is not a wrecking Amendment. It is not an Amendment of tremendous principle at all. In a sense, it is really a technical Amendment of very considerable substance which, somehow, has to be translated into the Bill in a practical corm. I quite see the difficulty, of course, that the gateway under the 1956 Act is a good deal wider in a great many respects than the three gateways under this Bill.. I also see, of course, that it could be argued that the circumstances with which the 1956 Act were designed to deal were not quite the same in context or content as the circumstances which this Bill is intended to deal. Therefore, there is an essential difference between the two.

As a layman, I am not quite certain whether the different requirements of the two are really quite as wide as would appear from the difference between the gateway under the 1956 Act and the three narrow gateways under the Bill. I very much hope that my right hon. Friend the Secretary of State will listen to appeals made to him from both sides of the Committee between now and Report and will succeed in devising a form of words which take into account a number of, I think, important conditions, not in the three narrow gateways of the Bill. The three narrow gateways o' the Bill do not include anything to do with prices, as has been pointed out. No reference is made to the general service rendered by the retailer. It also excludes safety, though this, I think, comes into another later Amendment. Some of these matters are really quite, important and the Court ought to hate regard to them.

5.30 p.m.

It is one thing for us in this Committee to put our own interpretation on what we think a Clause in a Bill may mean, but, of course, ultimately it is not for us but for the courts to decide what an Act means when it gets upon the Statute Book. Therefore, I urge my right hon. Friend the Secretary of State to see whether he can devise some form of words which, while not going as wide as the gate way in the 1956 Act, does go rather wider than the three narrow gateways in the Bill, in an attempt to define, in z rather more elastic way, several of what I think are rather important matters under the general heading of public interest.

Photo of Mr Donald Wade Mr Donald Wade , Huddersfield West

I think there are serious practical objections to adding to the number of criteria, but the arguments which have been deployed in this debate add, I think, to some of the observations I made yesterday.

The Committee has decided that these applications should go before the Restrictive Practices Court, and legal interpretation will, therefore, be placed upon the wording of this Clause 5, but I think that the Court will be faced with a dilemma, because it will have to decide, after considering the three gateways, whether or not there is detriment to the public, and whether, on balance, it is in favour of the abolition of r.p.m. or not, but there is no definition of public interest, and that is my reason for rising now.

It would seem to me that safety and health are excluded, but I am not absolutely certain that that is so. It is not quite clear to me whether an applicant may not bring in the subject of safety and health in arguing the case of detriment to the public. I know that the Secretary of State has contended that safety and health are quite separate matters. I refer to his remarks yesterday. Surely, if we are to consider public interest, it would be very difficult to avoid some consideration of safety and health. I agree that such subjects as safety and health should be dealt with by separate legislation. That is true. I also believe that some of the objections to removing resale price maintenance could best be dealt with by better consumer protection, by more information, by consumer education, but that, it seems to me, does not remove the present dilemma. It is only to draw attention to that that I rise now.

It seems to me that on the subject of detriment to the public the Court will either decide that such matters as safety and health are excluded by the way in which this Clause is drawn, or take a rather wider view and decide that it can hear arguments on the subject of safety and health as being in some way in the public interest, but there is no power for the Court to make any recommendation. There is no power for the Court to make a deferred order. The Court will not be able to say, "We think that there is a serious matter of public interest, but we think that it goes outside the definition. We will make a deferred order till this has been looked into by the Government." There is no power to do that under the Bill. The Court will have either to make an order or not; it will say either "Yes" or "No".

It seems to me that Parliament is evading its responsibilities and throwing too much upon the Court. I think that this Amendment is too wide, but that there is a case for a clearer definition. Certainly, before we leave the Clause I think that it must be made abundantly clear whether Parliament intends such matters as safety and health to come within the purview of the Court's consideration or not.

Photo of Mr William Rees-Davies Mr William Rees-Davies , Isle of Thanet

I shall be brief, but I rise to say that, on the Amendment as it stands, I am entirely behind the Government, and to dissent from the view of the Amendment and the sense of the extremely able point of view which was expressed by my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) and also by my colleague the hon. and learned Member for Surrey, East (Mr. Doughty), and to say that I think this is right, albeit I prefer the Clause as it stands, or substantially as it stands. I do not say that it is not capable of improvement or that it would not be right to have another look at it, but I think that the Government have done an extraordinarily good job in drafting this subsection (2). Obviously, it caused them a great deal of difficulty in trying to arrive at the determination of the appropriate factors.

Let me start by saying why I favour it as it stands. First, I think that there is no body of men more unsuited to decide what is the public interest as such than a body of Her Majesty's judges. It is not for them, and they would be the last persons to say that it is. It is not their task. Their task is to arrive at a determination in these cases as brought before them, not on policy but on the facts, and the criteria provided and clearly laid down by Parliament.

I think that the Amendment, meritorious as its aims may be, is incapable of giving the judges, who have to do a logical job, a system for determining in these cases. There are not sufficient criteria on which they can work, and for that reason I am not prepared to amend this, because here we are in a very difficult field. Not all the cases have been put before the Committee; they have not all been dreamt up.

Nor do I think that we can draw a direct precedent between the Bill before us and the Act of 1956. Nor do I think that the 1956 Act has worked at all well. I think that it would be far better to look at the matter anew in the light of the year 1964.

Having said that, which is quite a mouthful, I turn to look at—

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

Before he does that, may I ask my hon. Friend a question? He says that this would impose a duty on the Restrictive Practices Court to decide what is in the public interest and that it needs to be strengthened, but if he looks at the Restrictive Trade Practices Act, 1956, he will see, in Section 21(1,b), the words other specific and substantial benefits". My hon. Friend knows quite well that those words have been applied and construed with great care in a very large number of cases, although he may not think that the Act has not worked well.

Photo of Mr William Rees-Davies Mr William Rees-Davies , Isle of Thanet

I agree with that part of the definition. I agree with that, but the earlier part of the Amendment talks of some specific and substantial benefit or advantage enjoyed or likely to be enjoyed by them… I am on that part of the Amendment, which is the substance of the Amendment. I think that this is a very difficult matter to determine in the case of resale price maintenance, and that is the burden of what I really want to say.

I want to see whether the gateways in subsection (2,a,b,c) of the Clause are, first, wide enough criteria. I should like to see whether some of the particular cases which we know will apply will fit these gateways. Let us take a look, first, at quality and varieties. Secondly, we get the question of the outlets, and quantity. Thirdly, we get the question of services. These three seem to cover all the cases of those who will be applying for exemption.

I share the view of the hon. Member for Ebbw Vale (Mr. M. Foot) in one respect; I do not want to see newspapers and ordinary publications—such as Woman's Own, and things of that kind; my wife's favourite hobby—on any other basis but r.p.m. It is clear that they will be able to argue their case under both paragraphs (a) and (b) of the Clause. Part of the case of the selling of newspapers is the need for a wide number of establishments to enable them to be sold by retail and it would be unfortunately they were reduced to the detriment of the public. The same with cigarettes. We know that people are willing to pay a little higher mark-up on them to ensure that they are available almost everywhere.

Certain cases come to mind when considering the types of goods and industries which will be able to be argued before the Court. Consider the nursing trade, for example, and the question of peram- bulators, which are the subject of r.p.m. The perambulator sellers may say, "The quality of cur goods is very important". They may also say, "We give a service before the sale as well as after it"—in other words, during pregnancy the perambulator may be purchased, although it will be looked after until it is needed, when an after-sales service will also be provided. I have no doubt that the perambulator sellers will argue that they ate giving a necessary service as well as providing an after—sales service for their goods.

It may be that both the consumer and the user—although in the case I have just given I suppose that the consumer is the mother and the user is ultimately the baby—will have to consider whether, on balance, what is provided by way of service is essential. From that, the view might be to ken by the Court that the best benefit to the public would lie in cheaper perambulators being available, perhaps without the service and quality being provided. Or the Court might take the opposite view and rule the other way round.

The best way to consider this matter is for hon. Members to take any one of the resale price maintained cases they can think of—perhaps not the most obvious ones, such as newsagents, tobacconists and pharmacists; although the pharmacy trade may be one of the easiest to consider because it will achieve exactly what the Committee wants—and consider what will happen and what will be argued. In the case of the really serious health and pharmacy go this, the representatives there will be able o argue under the first loophole on the quality and variety of the goods, but in that case, of course, the quality of the goods will be the main point of consideration.

5.45 p.m.

When we come to things like cosmetics and lipsticks, I should imagine that it will be difficult to argue that such things as scents and. perfumes can come under any of the loopholes, and I do not believe that the Committee wants them to. I would rather see cosmetics and perfumes effectively prevented. I do not want to see the loopholes so wide that when the Court comes to determine items it will say, "Those men in Parliament did not know what they were doing. They have left the thing so wide that they have let it to us, the judges, to decide, without having given us an idea of what they wanted".

Those are the principles of the matter with which we are concerned. I wonder whether what I have said will carry any weight with hon. Members, recognising that my right hon. and learned Friend the Member for Hertfordshire, East probably carries more weight in the Committee than I do. This only shows how difficult this matter is. If it is difficult for us to determine a matter of this kind, how much more difficult will it be for the judges? I have intended no disrespect to Her Majesty's judges when I have referred to them having to decide what is in the public interest without having the fullest and clearest possible criteria.

If the Secretary of State is to be asked to take this matter back and consider it again, all well and good, but unless he can be given cogent reasons why he should make additions to the loopholes, I would prefer to see the Clause remain as it stands. I consider the safety arguments to be irrelevant.

It may be that pharmacists will argue before the Court that the quality of some of their goods is of a very high healthgiving ratio. They may equally argue that the cost of research into these items for the benefit of the public is a relevant factor. Those arguments would come within the Clause. They may also say that the production of, say, penicillin is such that it would be beneficial to have a standard price for that product because of the high cost factor involved in the research and that, ultimately, it must be a branded product.

I have not yet been persuaded by the arguments so far adduced that there is any need or that it is possible to widen the gateways without, at the same time, breaking down some of the power and teeth of the Clause. Had I thought it too narrow—perhaps so that the tobacconists, newsagents and other what I might call professional wings of the pharmaceutical industry, true pharmacy, could not argue their cases—I might have taken another view. Had I thought that even the safety appliance manufacturers and others would not be able to fairly put their cases I would have shared the view that the Government should reconsider this matter. However, as I see it the Government have done their best in this difficult sector.

I do not see that there is any great or violent difference of opinion on the principles involved. The principle here is how we should best assist the Court. We all agree on the value of r.p.m. and its abolition without having to come to blows, as it were, on an Amendment of this kind.

Photo of Dr Alan Thompson Dr Alan Thompson , Dunfermline Burghs

I had hoped earlier that the cross-talk between the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith) and my hon. Friend the Member for Grimsby (Mr. Crosland) would have continued. I am sure that the results would have been rewarding.

As I understand it, the point at issue was that the right hon. and learned Member was dealing with case law into which he had gone by making an imposing analysis of several thousands of cases while my hon. Friend wanted to know whether the complexity of the case law was, nevertheless, covered by the provisions in (a), (b) and (c). My hon. Friend wondered whether rather special reasons could be given in the cases with which we are concerned or whether they would have been covered by the provisions I have mentioned had the Bill been in operation at that time.

This aroused my interest, because I wondered just how the Minister's Department had, in actual fact, first arrived at these three paragraphs. Had it proceeded inductively, to use a scholarly word, and gone through the case law as it has been built up, looked at the arguments used, and said, "From this experiment in monopoly legislation that has been launched over the last few years"—and it has been most interesting and often fruitful legislation and has developed powers and gone in directions not always envisaged by lawyers and economists—"we can find the three ingredients covered by (a), (b) and (c)"? Or did the Department start deductingly, by abstract analysis, and say, "We believe that these are the only three exemptions in our theory of economic activity and competition which in some way maximises efficiency"?

My hon. and learned Friend the Member for Liverpool, Edge Hill (Mr. A. J. Irvine) started by talking of the basic assumption underlying this Clause that a maintained price is against the public interest. I believe this to be true. I think that if the Minister were asked to justify this, he would say, "I do not believe in maintained prices, because if we abolish them we get more competition; if we get more competition we improve business performance, and in that way we get more economical production, better choice of quality and types of goods. We get the development of new and improved products. We get all these things from increased competition, so I will devise a Bill to intensify competition. I will devise one that will as far as possible do away with price maintenance."

Some of those points are open to argument. It will certainly be held by a lot of economists that competition in this way exposes industry to change and development and new ideas, but in doing so it creates inconveniences and uncertainties in all branches of the industries and trades concerned. The problem is how far to prevent individual interests putting forward these inconveniences and uncertainties as reasons for being exempted from the provisions of the Bill.

Any Bill like this must create uncertainty in trades and industries; I do not see how that can be avoided. We have, somehow, to disentangle the uncertainties that arise from necessary changes from those that are unnecessary and deleterious, and that is a difficult problem. On the general proposition, I think that there is something to be said for the argument that uncertainty is a stimulus to improvement. After all, Prime Ministers act on that assumption in appointing Ministers or in deciding whether or not to sack them. It may be that the uncertainty of Ministers' tenures of office is conducive to their efficiency. In every walk of life—in the teaching profession, law and in other professions as well as in business—some uncertainty spurs us to greater efforts. Against that, one must agree that too much uncertainty inhibits progress.

One can always make a case—and this is the problem that we have to face—against being subjected to general propositions of the kind set out in the Bill. We all know the number of representations we have had on the Bill from vested interests. We all know the number of green cards we have had from the various pressure groups, but no one ever sees a green card stating "Mrs. Smiths consumer". That is the problem. Yet, if the House of Commons is about anything at all it is the attempt to reconcile the many vocal private interests with its general responsibility to the public at large.

In this argument the consumer often goes neglected. The consumer is not organised as the seller is. Consumers of a product are a number of people accidentally collected together at moments in time and buying the same thing. In the "pub" at light there are 50 consumers of beer, all there for different reasons; some to get away from wives, some to get drunk, some to watch television. They are not organised. They are an incoherent group, politically speaking—

Photo of Mr Thomas Steele Mr Thomas Steele , Dunbartonshire West

I think that my hon. Friend forgets the Housewives' League, which disappeared only in 1951 and will probably come back again.

Photo of Dr Alan Thompson Dr Alan Thompson , Dunfermline Burghs

I thank my hon. Friend for that remark—

Photo of Mr John Arbuthnot Mr John Arbuthnot , Dover

Order. I think that the hon. Member for Dunfermline Burghs (Dr. A. Thompson) was getting a little far from the Amendment.

Photo of Dr Alan Thompson Dr Alan Thompson , Dunfermline Burghs

My point is that the interests behind these exemptions are articulate interests—we might call them vested interests, or private interests. The interests against the exemptions very often are not articulate, and unless this House speaks for them no one else will. That is why I intend to watch very closely the gateways or loopholes by which escape may be afforded.

Even such very important considerations as safety and health, which are wrapped up in the general concept of public interest, may, if analysed, be seen to be disguising, although having a certain amount of validity, a self-interest, or a reluctance to change methods, or to face changes in technology or in economic development. They are nice, impressive words, but I think of the pharmaceutical pressure that exists.

I acknowledge the fact that the pharmaceutical industry has made great strides. Mc progress made in drugs is such that now, if my child gets pneu- monia, the nearest G.P. can probably cure it, whereas 20 years ago the most expensive Harley Street consultant might well have confessed himself defeated. The fact remains, however, that a great deal of the propaganda of the pharmaceutical industry is about health and suffering children, and not so much about profits.

As soon as we get loopholes which seem to disguise certain self-interests under slogans, there is danger. We may have to re-adapt Voltaire, and say "Public interest can be the last refuge of the scoundrel"—

Photo of Dr Alan Thompson Dr Alan Thompson , Dunfermline Burghs

Dr. Johnson—I am much obliged. I would not be surprised, however, if Voltaire said it as well.

If the target in all this is to be that stated in the 1944 White Paper, that business must seek the rewards of enterprise and good management, not in higher prices but in larger output, the House must devise machinery by which that can be enforced. It will sometimes be difficult machinery, sometimes it will be unpopular machinery, but we must not run the risk of overloading the Bill with too many extraneous public objectives, however desirable they may be in themselves. These may be good health regulations, good safety regulations—even an employment policy, which is a proper responsibility of any Government—

Photo of Mr John Arbuthnot Mr John Arbuthnot , Dover

Order I cannot see what this has to do with the Amendment.

Photo of Dr Alan Thompson Dr Alan Thompson , Dunfermline Burghs

I think that it could be argued that an employment policy could he—and I expect would be—read with the lines laid down. I certainly know that many of my hon. Friends, and I myself, in certain circumstances, would read employment into one of the public matters. We certainly must have safeguards for employment and we must have them particularly in the distributive trades, where standards and conditions must be watched.

But the wider objectives of employment must be looked for in more effective legislation elsewhere. I would be very pessimistic and sad if the Bill were to be in any way regarded as an employment Bill. It is a prices Bill. It has to do with economic organisation and efficiency. In certain extreme circumstances, we can, under the exemptions suggested, consider broader public policies, but I would rather see those broader public policies dealt with in other legislation—

Photo of Mr John Arbuthnot Mr John Arbuthnot , Dover

Order. The hon. Member must not do it on this Amendment.

Photo of Dr Alan Thompson Dr Alan Thompson , Dunfermline Burghs

I am trying to explain why, in other circumstances, I might have supported the Amendment, but I find it difficult to support it because I can see better and alternative methods.

The quality of the speeches in the debate has been so high that, having said a1l that I have said. I am still left with residual doubts. I should still like to have a closer look at the case law on restrictive practices. It may be that lawyers and economists have thought that they have exhausted all the arguments, but I should like the Minister to promise to do a great deal of inductive study of the case law which has been built up over recent years—and perhaps in other countries—because new problems arise and economists are not always right. We must, for these reasons, somehow match our thinking on specific economic objectives with some humility in ourselves. We take great care in devising these legislative instruments, but conditions are continually changing and we must keep our minds open to the changes.

6.0 p.m.

Photo of Sir Lionel Heald Sir Lionel Heald , Chertsey

While I cannot support the Amendment, I have considerable sympathy with those who have proposed it and I want to give some possibly qualified support to my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith). The main reason why I cannot support the Amendment is that the form of it is wrong. I believe that the proper method is that which has been adopted in paragraphs (a), (b) and (c), because I believe that that produces a much more justiciable issue—the matter which we discussed when we dealt with the Restrictive Practices Act—than any kind of generality.

I believe particularly that the words "specific and substantial" are objectionable words. They certainly have been found in practice in the Restrictive Practices Court to cause the greatest difficulty. They have been the cause of several cases being refused where I believe that on the merits they might well have been allowed. This was because the Court came to the conclusion that it could not say that the matter was specific, and now neither paragraphs (a) or (b) or (c) could be regarded as a specific matter. The form, therefore, is unfortunate, but the requirement of something more than these paragraphs is a matter for us to consider very seriously.

The hon. Member for Dunfermline, Burghs (Dr. A. Thompson) queried how these paragraphs came to be constructed. My recollection is that my right hon. Friend said on Second Reading that these were based upon representations which he had received from traders who said that they thought that these were the things which they could prove. I believe that that has been widely accepted, but the question is whether they are sufficiently comprehensive.

I feel that my right hon. and learned Friend the Member for Hertfordshire, East was right in approaching the matter not from a narrow and meticulous point of view but, at any rate as a guide, by taking cases which have gone through the Restrictive Practices Court and have got through the loophole. He dealt with the book case. The conclusion on the book case is that it could just get through on the quality. I think that it could not get through on the other points which the Restrictive Practices Court found in its favour.

My right hon. and learned Friend took some other cases. I could fit some of them into the present framework, but not all. In the permanent magnet case the technical cooperation and resulting advantages could come in under "quality". In the tile case the benefits of standardisation would again be a question of quality, but the metal window case was a rather striking case where it was found that exchange of costings and the employment of single accounting had resulted in keeping down the cost.

I have followed these debates closely. I have seen how careful people have been in their approach to this matter and I cannot see how that case would get in and her paragraphs (a), (b) and (c). This is the point on which I differ from my hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davies), who is not now present, in ruling out any question of price on the ground that that is not a matter which the Court has to consider. Of course it is, because, as my hon. and learned Friend the Member for Surrey, East (Mr. Doughty) pointed out, the B 11 does not contemplate the abolition of price maintenance. It says that the Court is there to decide whether it should continue or not. To say that consideration of price is not relevant seems to there difficult to swallow.

I find myself in the position that, while I honestly and genuinely object to the specific and substantial form of the Amencement, I feel that there is a question of whether paragraphs (a), (b) and (c) will cover all the ground. It is a very difficult thing if one is not to have any gathering-up Clause. I am not at all sure that some gathering-up Clause is not the way to do this. I believe that tie hon. and learned Member for Liverpool, Edge Hill (Mr. A. J. Irvine) suggested that something might be done by the tailpiece being amended. That is a possible way of doing it.

Surely the debate has shown that there is widespread agreement about the difficulty of the matter and the necessity for not torpedoing the principles of the Bill and yet at the same time agreeing to what those of us who supported the Second Reading—said as I certainly did—when we wanted to give those who had a genuine case an opportunity of putting it. If we are not careful, we shall find that there will be people who have a case to put but who are shut out because they cannot come in under paragraphs (a), (b) and (c). If my right hon. Friend was prepared to consider the matter before the Court from that point of view I feel that a great deal of the difficulty would disappear.

Photo of Mr Thomas Steele Mr Thomas Steele , Dunbartonshire West

It seems to me that both sides of the Committee generally are now coming to the conclusion which the right hon. and learned Member for Chertsey (Sir L. Heald) came to in the course of his speech, namely that while they are not agreeing in substance with the Amendment, because they object to its form, or its words or because it does this or that, they are agreeing that there is some point to what was said last night and that this is something which should be looked at.

I have been rather astounded by some of the speeches made by hon. Members opposite today in connection with the interpretation of the Amendment and of the three gateways. In the early part of the debate hon. Members tended to deal with the broad principles of the gateways but latterly we have been much more realistic when hon. Members have been dealing with the cases themselves and asking how they would be affected by the gateways. This is the important approach. Those hon. Members opposite who said that this was a matter for the Court to decide are right, but surely the Minister did not present the Bill to the House of Commons without first saying that he wanted to put something in the Bill—and this is what he wanted. Surely this is the first point to consider, and I should like the right hon. Gentleman when he replies to apply himself to it.

The latter part of the debate has clearly centred around the interpretation of the three gateways and on how the Court will decide. Surely the right hon. Gentleman or the Solicitor—General or some of the legal advisers can tell us what they mean. With many Measures which come before us we may argue about the meaning of the provisions, and though the Law Officers will give us their interpretation, we can have no real knowledge of the meaning of the words until they have gone before the courts.

Here we have the advantage of the case law that has already been built up, and it seems to me that the Minister ought to be able to tell us, in the case of newsagents and books, whether they come within the three gateways. In effect, the Minister has these three gateways. He has had representations from the newsagents and booksellers, and the right hon. Gentleman told us that these three gateways were based upon the representations which he had received. He has also had the report, already published, which was quoted extensively this afternoon, on what happened when the case went before the Restrictive Practices Court relating to books. Surely, with all that knowledge, the right hon. Gentleman ought to be able to tell us whether it is his intention, and whether the words in the Bill express that intention, that newsagents and booksellers will be able to get this exemption.

It is only fair that the Minister should tell us. It is not good enough for him to say, "These are the broad principles on which we work and we will leave it to the Court to give a decision." He ought to be able to tell us, "With the knowledge and information that the Government already possess, there are certain things which we now believe should be in the public interest and, therefore, our Bill has been framed to enable this to be done." The speeches during the latter part of the debate have shown that the Committee is not sure that this intention has been implemented.

If the right hon. Gentleman is able to assure his right hon. Friend the Member for Thirsk and Malton (Mr. Turton) that the three gateways enable those particular interests to receive this exception, or if between now and Report the arguments are such that there is doubt as to what should be done and the right hon. Gentleman is not able to give that assurance, I for one, having listened to the debate, will be prepared to support the right hon. Gentleman in the Lobby.

6.15 p.m.

Photo of Mr Robin Maxwell-Hyslop Mr Robin Maxwell-Hyslop , Tiverton

There are three aspects to which I should like to allude. The first, as has often been mentioned, is the question of price. But some surprise was expressed that circumstances could arise whereby prices could increase or, to be more accurate, retail margins could increase, because prices can go up for a number of reasons of which the abolition of r.p.m. may not be one.

The three characteristics of commodities where this is likely to happen are fashion, novelty and deterioration. The margin which the retailer is likely to apply to his merchandise is likely to increase—and I think this is true as a general proposition—where the risk of stock obsolescence increases or where the danger to his merchandise is the greater. One example, I believe, is on the Stock Exchange where in times of uncertainty the margin between the buying and selling price tends to widen. This also happens with retail merchandise, in that where the element of risk to the retailer's stock is increased, he then needs a greater margin to cover it.

The book case, which has already been mentioned, is obviously one of novelty in that once a title has been out for some time it does not sell so quickly, and the demand for it is not so great as when it first appears on the market. Therefore, if bookshops stock up with titles and somebody who is not normally a bookseller takes to selling a certain book while the market is right, the normal bookshops may be left with an unsaleable stock on their hands.

I now come to the matter of perishability. I am not thinking of articles like vegetables because, not being branded goods, they are not covered by the provisions of this Bill. A good example of perishability is a roll of film on which is stamped a date after which the manufacturer does not consider that it will be reliable; or, curiously, the other extreme, a. brand new Bentley motor car which the High Court ruled to be a highly perishable commodity in that, once it has been sold, its value can depreciate very quickly indeed.

There is then the characteristic of fashion. It is not that goods shrink or that their colours become bleached from being in the shop window. It is just that, shopkeepers having stocked up with goods which are subject to fashion, if people who are not normally engaged in that trade come in and out of the trade just to scoop the market, the risk to the retailers of stock obsolescence is increased, and as a general principle if this were to happen regularly we would expect to find them increasing their margin to cover themselves. This point can be overstressed, but I mention those three characteristics as being important in this context of price.

Another circumstance which we should consider, which is not covered by paragraphs (a), (b) or (c), again from the point of view of the consumer, is the question of location, which again could be considered to be a specific and substantial benefit or advantage enjoyed or likely to be enjoyed by the purchasers, consumers or users. It is true that the number of establishments in which goods are sold by retail will be substantially reduced if that contingency is covered by gateway (b), but if the number throughout the country remains basically unaltered but the distribution of them becomes radically altered, this could cause severe inconvenience of hardship to the consumers, and that is not covered by paragraph (b), as I am sure my right hon. Friend will agree. Therefore, here we have a case where severe hardship, or at any rate inconvenience, to the consumer or purchaser could arise and it could not be pleaded in court because there is not a gateway which comprehends it.

Lastly, the inter-reaction between different con modifies sold through the same retail outlet needs to be considered. To take the example of the newsagent, to which the hon. Member for Ebbw Vale (Mr. M. Foot) referred last night, it is undoubtedly true that in many circumstances newsagents are subsidising, to use that expression, their delivery services out of profits made other than on the sale of newspapers and periodicals, particularly, of course, on the sale of tobacco and stationery. But one cannot plead through any of these gateways the effect on the necessary services provided in connection with or after the sale of newspapers as a ground for continuing resale price maintenance on tobacco or stationery. This is an important point because, although gateway (c) purports to cover the case where the consumer might suffer a lack of necessary services, it does so only in isolation, with reference to the specific commodity, and it does not do so with reference to cases in which a number of commodities are interrelated through a common retail outlet.

The Amendment could encompass such a case and would permit it to be argued before the Court. Of course, the Court would accept such an argument only if it considered that it had considerable merit and also—contrary to what appeared in at least one newspaper this morning— if the resulting detriment would outweigh any detriment to the public as consumers or users of the goods in question (whether by the restriction of competition or otherwise) resulting from the maintenance of minimum resale prices in respect of the goods. In other words, the Amendment does not stand on its own as a gateway any more than any other gateway stands on its own. These gateways are all subsidiary in the Bill to the primary consideration which I have just quoted.

Because we have had no indication that these other specific gateways, the desirability of which I have endeavoured to emphasise, are likely to be embodied specifically in the Bill, the desirability of a more general provision of this kind appears. If these gateways were supplied as specific gateways, the case for a general provision would be greatly reduced. If they are not to be provided in the general Clause or in the specific provisions referring to each, then, I suggest, there will be cases which the Court, to put it no higher, might consider were of sufficient merit, if it were allowed to do so, to justify a finding in favour of continuing resale price maintenance in a given case, although without these gateways, either specific or general, it would not be able so to find.

Photo of Mr Cyril Bence Mr Cyril Bence , Dunbartonshire East

I support my hon. Friend the Member for Dunbartonshire, West (Mr. Steele). I am prepared to go with him into the Lobby in support of the Amendment moved by the right hon. Member for Thirsk and Malton (Mr. Turton). We are discussing a very important principle. Having tried to follow closely all the discussions on the Bill from the very beginning, I take the view that it is no longer a Bill to abolish resale price maintenance but a Bill to legalise and regularise it where the Restrictive Practices Court can justify it.

Photo of Mr Tom Iremonger Mr Tom Iremonger , Ilford North

If the hon. Gentleman looks at the Long Title he will see that it says nothing about it being a Bill to abolish resale price maintenance. It is a Bill to restrict it.

Photo of Mr Cyril Bence Mr Cyril Bence , Dunbartonshire East

When the Bill was first printed, the Long Title was drawn in that way, but there has been a great deal of discussion in various places and a lot of heartburning about it. Serious difficulties have been raised and suggestions have been introduced so that the whole nature of the Bill has been progressively changed. If sufficient people, after studying this Amendment and the Clause we are now considering, come to a certain view, we shall, once again, introduce an Amendment which will change the character of the Bill.

It is to this Amendment that I wish to direct myself. It raises the question of services and quite specific benefits which can be gained by resale price maintenance but which may be lost by its abolition. There was a time when many consumer durables, even motor cars and all sorts of mechanical devices, were sold not at fixed prices but at competitive prices in the shops. I remember very well the early days of the refrigerator when this was certainly the rule. One bought a refrigerator or some other product and, if anything went wrong with it, it was no good taking it back to the dealer because he knew nothing about it. He was just the salesman who sold it. In the small towns there were one-man businesses run by mechanics who would service such appliances and charge for the repair. This was the old system which existed for many consumer durables until the early 1930s.

Gradually, because of the failure of one-man businesses and service mechanics in small places to keep abreast of rapid technical changes, manufacturers found it desirable not only in their own interests but in the interests of the users of their products to establish the agency system and train people in the retail outlets to be able to do the servicing. This was the background to the development of the agency system from the engineer's point of view.

I am surprised when I hear some of my hon. Friends and others talking about a lack of competition. As far as my experience goes, competition in consumer durables in this country is as strong as it ever was, but it is competition between alternatives, competition between different designs. This is the great competition, not—

Photo of Mr John Arbuthnot Mr John Arbuthnot , Dover

Order. Will the hon. Gentleman please get back to the Amendment?

Photo of Mr Cyril Bence Mr Cyril Bence , Dunbartonshire East

It has been said, Sir John, that there is a lack of competition. There have been references to the Amendment as a wrecking Amendment to destroy the purpose of the Bill, the purpose of the Bill being to create more competition. This has been said by several hon. Members, and I am making the point that we overdo these references to a lack of competition in British industry. There is a good deal of competition between many branches of industry. Although there may be some where competition is limited, the situation generally, I believe, is as I have stated it.

I return now to the question of services with which the Amendment and the Clause are concerned. What is the substantial advantage which may be lost by the abolition of resale price maintenance? I have discussed the Clause and the Amendment with a business acquaintance who is a dealer in consumer ambasand rabies, selling a vast range of them. He wants the Bill to go through. He wants the abolition of resale price maintenance. He does not accept these gateways at all. He is quite prepared to cut his prices and sell, letting people get the service they want wherever they can. Thais is his argument—"I am not interested in servicing machines. I do not want to train or employ mechanics. Let someone else do it".

This is all right from his point of view, but the person who buys from him may have a lot of trouble in finding a service station within 20 miles. Is this in the interest of the purchaser of the product? Can it be in the general public interest of users and consumers if the number of service stations for the products they have bought is progressively reduced? No matter whether it be a washing machine, a refrigerator, a television set or any other consumer durable, it is surely better that every dealer should be able to do some servicing. It is a good thing to have competition in the various forms of service available, and it is far better that the user of the product should have more points of purchase and more points of service today than he ever had before.

6.30 p.m.

Photo of Mr George Proudfoot Mr George Proudfoot , Cleveland

The hon. Gentleman would admit that that might work against the consumer, since it would cost more and more if the retail outlets and servicing points were multiplied.

Photo of Mr Cyril Bence Mr Cyril Bence , Dunbartonshire East

Hon. Members have heard me say this often before, and no doubt they get weary of hearing it, but all my life I have been on the production side. Twenty commodities are being produced today where one was produced 40 years ago. The great economy which results through manufacturers being able to do that should be partly taken up by providing greater facilities to the consumer for servicing the product.

What has been suggested many times during discussions on the Bill is that we should drive towards having so much price competition that we cut down the points of service. This is wrong, I should like to see the points of service increased and more people employed in servicing the things which people in a modern civilisation use. I should have thought that that was a logical and justifiable attitude in a technological and scientific age.

The Clause states that consideration will be giver to those using various consumer durables, such as the motor car. It is a great advantage to the user of the motor car and to the independent salesman who travels the country selling various products to know, for example, that the estate wagon which he is driving can be serviced at a regular charge in whatever part of the country he may be. He can buy spare parts at a fixed price in any part of the country.

I dare say that many hon. Members who travel on the Continent have taken advantage of the facilities offered by British motor firms, which are far more alive to motorists' needs than any Continental firm. One can go to the agent of any British manufacturer on the Continent and buy a package of components to replace components which are likely to break down. If one does not use. it, one returns it. British manufacturers started this years ago. One can buy f5 of £10 worth of components and put them in oneself or get a mechanic in a French garage to put them in. One pays only for the components which one uses and a handling charge. Even if one could get this facility through a Continental dealer, one would have to pay much highe7 prices than the British firms' prices.

It is a great advantage to users of motor cars in this country to know that they can go to a service station in any part of the country and get whatever they want done at a fixed price. They know this when they leave home. If one is going to the north of Scotland, it is a great advantage to know what the price of a certain thing will be. If this were not the case, one would have to obtain perhaps half a dozen travellers' cheques, in case something happened. This is a tremendous consideration which should be put before the Restrictive Practices Court.

Photo of Mr Ellis Smith Mr Ellis Smith , Stoke-on-Trent South

My hon. Friend has carried me with him on what he has been saying about servicing. He has made a very reasoned case. But will he explain the advantage of the Amendment over the Clause in that respect?

Photo of Mr Cyril Bence Mr Cyril Bence , Dunbartonshire East

Some of the points which I have been making are dealt with in more specific terms in subsection (3). The Amendment refers to the public as purchasers, consumers or users of any goods who would be deprived of some specific and substantial benefit… I am not sure what "any necessary services" means in subsection (2,c). Some people may not judge a certain service to be "necessary". I am referring to services which are in the general interests of the user. I support the Amendment because I like the phrase some specific and substantial benefit or advantage to the user or consumer. I am concerned with the man using the motor car in business or trade. That is the principle reason why I support the Amendment.

Photo of Mr Anthony Bourne-Arton Mr Anthony Bourne-Arton , Darlington

follow the hon. Member's example of the motorist to whom, he says, it is of advantage to know what the service charge will be in the north of Scotland. Presumably, service charges in remote places, such as the north of Scotland, are likely to be higher, because the cost of running a garage might be higher. Is it a greater advantage to have standard costs than to have to pay more to cover the cost in the most expensive places and, therefore, pay a higher cost possibly in cheaper and more populated parts of the country? I realise that that is a rather involved question.

Photo of Mr Cyril Bence Mr Cyril Bence , Dunbartonshire East

I cannot quite grasp that question. It is a little too complicated for me as an engineer. All motor manufacturers have standard charges for servicing or fitting any component to their motor cars in any part of the United Kingdom. These are fixed charges. I declare a very minor interest in the motor industry.

Photo of Mr George Proudfoot Mr George Proudfoot , Cleveland

Surely the hon. Member knows that under this Bill the manufacturer of the spares can still say what the maximum price shall be. Therefore, his argument falls to the ground.

Photo of Mr Cyril Bence Mr Cyril Bence , Dunbartonshire East

If one takes away the right of the manufacturer to fix a maximum price, he will have to fix a maximum price which will—

Photo of Mr George Proudfoot Mr George Proudfoot , Cleveland

That does not stop anybody cutting the price.

Photo of Mr Cyril Bence Mr Cyril Bence , Dunbartonshire East

Yes, it does. A manufacturer has to assess the products in the market which are alternatives to his own products. He must consider how they are selling and where they are selling. The manufacturer will put a price on his product so that sales can be stopped in an area where the turnover is likely to be very low.

I realise that people in the most populous parts of the country pay a higher price for a certain product to allow people in the remote parts to pay the same price. This is what happens with letters. I pay 3d. to send a letter to Finchley and 3d. to send a letter to Harris in the Western Isles. No doubt the delivery of the letter in London costs only id., whereas the delivery of the letter to the Western Isles costs about £2. The same is done by the marketing departments in the motor industry.

If the Restrictive Practices Court does not take into consideration the point that I propose to make now as a specific benefit, it may well be that the system which exists in the motor trade will collapse. If the present system does collapse, motor dealers will be selling cars but not servicing them, and servicing may become more concentrated, as is now becoming the case with selling. There may be greater competition in the selling of motor cars, but more reluctance to service them.

Servicing a motor car is not an easy business. Mass production has led to a lack of consideration for the people who have to service them, as anyone who has tried to take a motor car to pieces knows.

Photo of Mr Robert Mellish Mr Robert Mellish , Bermondsey

Servicing a car is very expensive.

Photo of Mr Cyril Bence Mr Cyril Bence , Dunbartonshire East

Some of the motor agents say that they lose money on servicing a car. If the system of servicing motor cars breaks down, servicing will become very expensive. But it will also become localised and there will be many areas where servicing mechanics will not be found. That was the situation in the 1920s before the agency system was introduced and before r.p.m. came in. I can remember that in the 1920s in the Welsh valleys one could see people who had made a bit of money in the First World War and who had bought a motor car with wooden wheels and solid tyres. One could go out on a Sunday and see half a dozen of these cars broken down. Nobody knew what to do with them and someone had to get a horse to tow them away. In the 1920s, it was not safe to go 100 miles in a motor car unless one had a horse with one, or went somewhere where there were horses. The reason was that there were no service stations.

I hope that the Secretary of State will at least seriously consider the Amendment, even if he does not accept it. It is absolutely vital not only to the interests of the industry concerned but to the users of all consumer durables that they can get good service, not from a particular dealer or a particular business but from competitive servicing, perhaps competitive garages. I believe that competition in servicing garages will disappear within a decade if the present system breaks down, and it is already beginning to crack. It is already possible to go for miles without finding a servicing station. One can find a petrol station, but not one to service a car. This is a dangerous trend and we lose much of the advantage of the quality product if there is not adequate servicing.

I hope that we shall never again have to rely on the horse and I hope that at the conclusion of the debate hon. Members will go into the Lobby in support of the Amendment.

6.45 p.m.

Photo of Sir Frederick Burden Sir Frederick Burden , Gillingham

I hope that the hon. Member for Dunbartonshire, East (Mr. Bence) will forgive me if I do not attempt to follow his remarks, but I intend to be brief.

As originally drawn, the Bill was intended to effect certain advantages to the general public, one of which was, it was claimed, the lowering of prices now subject to resale price maintenance. It therefore seems absolutely logical—and here I follow the argument of my right hon. and lei reed Friend the Member for Chertsey (Sir L. Heald)—that the question of price should come into the gateways, and that if the gateways do not provide for the Restrictive Practices Court to consider price, the Court should be empowered so to do.

It would be reasonable to accept that if, as has been threatened, some very big retail firms on the abolition of resale price maintenance discontinue their purchase of nationally advertised brands, replacing them with their own branded lines, the national advertising of the owner of the original branded line would be likely to cost much more per unit of article sold than when it originally encompassed a much bigger trade before the introduction of the owner-branded lines by retairs. It is likely that manufacturers and owners of nationally owned branded lines would be able to show to the Court that there was a strong likelihood that the prices of their articles would increase as a result of the abolition of the resale price maintenance of their lines and the reduction in sales.

If that is so, the public would be deprived of some specific and substantial benefit. As the price of the article is of tremendous importance in the Bill, certainly to -he public, the Court should be able to consider the effect of abolition of r.p.m. on the price of the article.

I draw my right hon. Friend's attention to the subject of services. As the Clause is now drawn, it is possible for the Court to consider as necessary services only those which are required to guard against the risk of injury to person or premises. But this provision is not as wide as it should be. Many services provided when goods are purchased are beneficial and desirable. Although many may not be services which prevent injury or damage, they are seriously considered by the consumer at the time of purchase. Many should be retained and this gateway should be enlarged so as to conform to the provision in the Amendment which says that the public should not be deprived of some specific and substantial benefit.

I refer my right hon. Friend to what is now happening in Canada. I have recently received from Canada a financial and trade paper, which my right hon. Friend might like to consider, which states that in the last year there has been a complete reversal in the trend of retail trading in Canada after the removal of retail price maintenance. It says that many of the high-turnover low-profit discount stores in Canada have closed down, have gone completely out of business, and that the influence of retail trading in Canada has returned to the demand for quality and service and that in Canada these are now more important than price. It is considerations of this sort which my right hon. Friend must now keep in mind when he is deciding whether he will give some relaxation so as to widen the gateways and make these considerations more flexible.

Photo of Mr Anthony Crosland Mr Anthony Crosland , Grimsby

I hope that I shall not be thought discourteous if I speak briefly for a few moments, having, alas, not been present during the last hour and a half because I was attending a meeting upstairs. What is even worse is that I shall have to leave in about five minutes' time to attend another meeting. I can only say in self-defence that I have sat through the greater part of the Committee stage.

I should like to make one or two remarks concerning the Amendment. Three basic points are at issue. The first is that which was raised in a clear and cogent speech by the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith) when comparing the gateways in the Bill with those in the 1956 Act. The right hon. and learned Gentleman rightly pointed out that the gateways in the Act were both more numerous and included a much broader gateway than appear in the Bill. He pleaded for us to go back from the example set in the Bill to that set in the 1956 Act. I regard the fact that there are fewer and narrower gateways in the Bill as a major and positive advantage of the Bill over the 1956 Act.

A great number of hon. Members, on both sides, are uneasy in any event about Parliament transferring to either the Restrictive Practices Court or to the Monopolies Commission the ultimate decision as to whether certain restrictive practices are good or bad. Most of us are only willing to accept that it should be not Parliament but the Court which decides these things provided, and only provided, that Parliament lays down detailed and specific criteria which must be fulfilled. It was a strong and important criticism of the 1956 Act that its definition of the public interest was drawn so widely, and the task of defining what in another context was called the burden of deciding on major political and economic decisions was laid upon the Court with only the vaguest possible direction from Parliament.

I therefore regard the Bill as being much less liable to that criticism, because it lays down a small number of much more definite and specific criteria than were laid down in the 1956 Act. Therefore, in general terms and on principle, I should be much opposed to our including in the Bill the broad gateway, as it has been called, derived from the 1956 Act.

The second point which has been made relates to services. It seems to me that the argument has gone very much off the beam. I disagree here with my hon. Friend for Dunbartonshire, East (Mr. Bence). I agree with him in one respect only, and that is about motor cars breaking down and the necessity for horses. This is not confined to what happened 30 or 40 years ago in the Welsh Valleys. Most hon. Members who have motor cars which go wrong wish that they had horses to pull them because of the difficulty of getting speedy and efficient repairs from the motor industry, which is, surely, one of the most inefficient trades or industries. The whole question of services has got totally out of proportion.

It can be said that after-sales service on goods like motor cars or complicated electrical items is important, and that is a proposition which nobody would deny. The question is whether, to preserve after-sales service, we should at the same time preserve resale price maintenance. This is a separate and different proposition which I wholly deny.

We come back here to the old argument that some consumers want services and others do not. The case for abolishing r.p.m. is to give the consumer a choice between paying a higher price and having the service, or paying a lower price and not having the service. We must take our stand on this simple principle of free consumer choice between higher prices plus services or lower prices without them.

The whole tenor of the argument of many hon. Members who have spoken about services is in the direction of depriving the consumer of that choice by maintaining r.p.m. plus services, which the consumer may or may not want and which, therefore, should not be forced upon him. None of those whom I have heard in this debate has referred to the Report of the Monopolies Commission on electrical goods equipment which discussed the whole question of services in relation to free choice for motor vehicles and other items. The Commission went into the matter in great detail and decided that the case for r.p.m. was not made out on grounds of after-sales service. I have not heard any of those who have made the services argument today answer in detail that specific conclusion of the Report of the Monopolies Commission.

My third point is the question of prices. A number of hon. Members who support the Amendment, particularly the right hon. and learned Member for Hertfordshire, East, have supported it on the ground that one possible deleterious result of abolishing r.p.m. might be an increase in prices and that, therefore, the proposal contained in the Amendment should be included as an additional gateway. I have a number of feelings about the prices argument. As I said in an interruption during the right hon. and learned Gentleman's speech, I find it hard to envisage circumstances in which prices could increase as a result of the abolition of r.p.m. or to find any reason why they could increase which is not already covered by the existing gateways in the Bill.

It is clear that prices might increase if the abolition of r.p.m. led to a large reduction in retail outlets. This was what the net book agreement was about. The concern of the Court, as quoted by the right hon. and learned Gentleman, was that in consequence of the abolition of r.p.m. there would be a sharp drop in the number of retail outlets, thus greatly reducing the demand for books and the consequences upon the costs of book publishers being such as to put up the price.

That case is totally covered by one of the existing gateways in the Bill. I still have to hear of any way in which prices could rise as a result of abolishing r.p.m. which is not covered by the three gateways pr)vided in the Bill.

Photo of Sir Frederick Burden Sir Frederick Burden , Gillingham

This is merely trying to do that which the hon. Gentleman said was essential. He said that Parliament must be specific if we leave the Court to administer the Bill. This is a question of price, which is very important. What is wrong with being specific about it?

Photo of Mr Anthony Crosland Mr Anthony Crosland , Grimsby

What is wrong is that I cannot envisage any circumstances in which prices could possibly rise which is not already covered in the Bill.

I should like to go further on the question of prices and come to the point concerning Canada, which was mentioned by the hon. Member for Gillingham (Mr. Burden). We have had a lot of argument about prices allegedly rising in different countries as a result of the abolition of r.p.m. We have all been circulated with the famous pamphlet to which reference has already been made, a highly inaccurate pamphlet published by the Resale Price Maintenance Co-ordinating Committee. It purportec to show that prices have risen in various countries, not after the abolition of r.p.m., but in consequence of its abolition. Not one of those cases, however, stands up to examination. In every case, in countries such as Canada and Sweden, where prices allegedly rose a year or so after the abolition of r.p.m., all kinds of other things have shown an increase. Wages, import costs and indirect taxation have risen. There are 101 reasons why prices go up which have nothing to do with the abolition of r.p.m. It is impossible to prove, and ludicrous to suggest, that the price increases in any of those countries have anything to do with r.p.m. This point was made strongly in a notable leading article entitled, "Let us have honest statistics", in the Financial Times the day after the publication of the booklet to which I have referred.

One other alleged reason why prices might go up after the abolition of r.p.m. is the suggestion, which is made strongly in the pamphlet and which has been made in one or two speeches in Committee on the Bill, that margins have gone up in certain countries after r.p.m. has been abolished. The booklet quotes 13 trades in Canada and purports to show what happened to margins in those trades in the five years or so following the abolition of r.p.m.

On examining that curious set of figures, one finds to begin with that the booklet does not specify which of the 13 trades had r.p.m. in what might be called year one and which trades did not. It shows certain movements of margins, many of them in an upward direction, but as it did not mention the simple and essential facts of which services had r.p.m. before and those which did not, no finding could possibly be deduced from the figures. I have looked into the figures in detail and I find that the largest increases in margins which occurred in Canada in the five years after r.p.m. was abolished were in trades in which r.p.m. did not exist before. Again, this simply shows that the figures have no validity whatever.

It is argued about the British grocery trades that margins have increased during the last five years since the abolition of r.p.m., and that is true. This, however, has nothing to do with the abolition of r.p.m. but is due to the fact that during the last five years—I may be corrected on this by the hon. Member for Cleveland (Mr. Proudfoot), but I do not think so—in the grocery trades there has been an enormous expansion of voluntary chains, joint resale wholesale chains and the rest. One consequence of that has been that retailers in the grocery trades have taken over a substantial element of the wholesaling functions. This tendency has occurred not only in the grocery trades, but in many others.

7.0 p.m.

The result of the tendency in many retail trades for the retailer to take over more and more of the wholesaling function is that increasingly his margin begins to include an element of the wholesale margin as well as the retail margin, and that is why the margin has gone up in the last five years.

Photo of Sir Frederick Burden Sir Frederick Burden , Gillingham

That is an extremely interesting point, but I have talked to the manager of a large Canadian group of stores and to the manager of an American store in New York. They tell me specifically that their margins are set for them by their store managements, who in turn are told by their accountants what margins they must make. Their margins have not gone down, they have gone up.

If an article is subject to r.p.m., and the profit falls below the margins which they have been set, they balance or average out their margins on other commodities. The hon. Gentleman's argument is interesting, but it is academic, because if a store manager is told that he must make a certain margin in his department and he cannot make it on one article, he increases the price of other articles to produce the desired result.

Photo of Mr Anthony Crosland Mr Anthony Crosland , Grimsby

y hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) is connected with one of our most efficient groups of stores, and he will no doubt answer that point. It has no particular relevance to the point that I am making. I am not making a point that the abolition of r.p.m. will necessarily reduce margins. I think that it may, but that is not my point. I am making the point that the increase in margins in the British grocery trades in the last few years has been due to a process of vertical integration in these trades, and that this can be seen in other trades, too.

I am now two minutes late for my second meeting, and I again apologise to the Committee for my brief appearance here. I conclude by saying that, in spite of what has been said, I consider that this Amendment would destroy a large part of the intention of the Bill. I am utterly unconvinced on the arguments about the 1956 Act, or about services, or about prices, and in spite of everything that I have heard, I should feel uneasy about going into the Lobby to support the Amendment.

Photo of Mr Graham Page Mr Graham Page , Crosby

Before the hon. Member for Grimsby (Mr. Crosland) runs away to his steering committee, or whatever it may be, perhaps I might put this point to him. As I understood it, he supported the Clause as it stood, but he then opposed the Amendment on the ground that the Bill gives definite and specific criteria for the public interest. It gives definite and specific criteria, when looked at from one point of view, in paragraphs (a), (b) and (c), but when one gets to the tailpiece, or proviso, it leaves the public interest at large, by definition. Now that I have finished with the hon. Member for Grimsby, he can run away to his steering committee.

When the debate on these Amendments started last night, the occupant of the Chair indicated that with this Amendment we might discuss also Amendment No. 71. I propose to address my remarks to the latter Amendment, although they apply to the former one, too.

I claim that Amendment No. 71 has the merit of simplicity and is easily understood. The particular features of this Amendment compare with the Clause as it stands are threefold. It mentions purchasers—it takes into account the interest of purchasers—it mentions those engaged in the manufacture or distribution of goods, and it uses the phrase "public interest" without specific definition.

I deal, first, with purchasers. There can be no doubt that "consumers or users" must include retail purchasers. One has the extreme example of baby food. A mother buys it for her baby. Is she a consumer, or a user, or just a purchaser? Undoubtedly the retail purchaser of that sort must be included in the phrase "consumer or user", but consumer or user does not include the wholesaler who purchases it from the manufacturer, or the retailer who purchases it from the wholesaler.

If one introduces the word "purchaser" into the Clause, one includes the wholesaler and the retailer. Why should not the interests of those people be considered? I am not suggesting that they should be considered as paramount; that does not follow. If they are considered under paragraphs (a), (b) and (c)—under the gateways—the Court still has to consider the tailpiece; it has to consider whether the general interest of the public outweighs any interests of those sections of the community. I see no reason why we should preclude the Court from considering the interests of those who deal wholesale with goods and those who deal retail with them.

I deal next with those engaged in the manufacture and distribution of the goods. Why should we preclude the Court from considering the interests and concern of those who are engaged either as principals or as employees in the manufacture or distribution of the goods in question? This need not be paramount. We are merely saying that the Court should take this into account and balance it against the general interest of the public. It may be taken into account to some extent under the gateways in the Clause as it stands, because subsection (2,b) refers to the number of establishments, and if the number of establishments is reduced that will affect both principals and employees in the distributive trades.

Under paragraph (c) "any necessary services" must, of course, affect the interests of both principals and employees in the distributive trades. Those engaged in the manufacture or distribution of the goods were specifically mentioned in those words in the 1956 Act. Under that Act we have to take into account the people engaged in the trade and their interests.

I deal next with public interest. It is described merely as public interest, without any limiting words. The Clause specifies in paragraphs (a), (b) and (c) certain case.; in which the public interest will suffer, but there may be other cases in which the public interest will suffer, and which, by the mention of the specific ones, will le excluded.

During the debate reference has been made to the standard price point. It seems strange that the word "price" does not occur in the Clause. Prices are not mentioned. The Court could not take into account stockholding. It could not make into account services, unless they were necessary services, and one could multiply the instances in which the interests of the public may well be affected but which would be outside the consideration of the Court when it was considering this part of the Clause.

The purpose of the Bill is to protect the public interest. It is true that there is no definition of the public interest as such in the Bill, but I do not think that any Statute has ever tried to do that. It is not new to the courts to consider what is in the public interest. For centuries the courts have had to consider what is public policy and what is not, and they have decided cases on that basis. It is nothing new to ask the courts to decide what is in the public interest. But subsection (2) tries to blow hot and cold on this.

In the first part of the Clause limitations are imposed in respect of what we are to consider as the public interest, but in the tailpiece, or proviso, the consideration of public interest is left quite at large. The Restrictive Practices Court will have to discover the interest of the public as consumers or users, and the extent to which that very general public interest is harmed by resale price maintenance in the case of the goods in question.

If we ask the Court to consider the public interest at large we should not prevent it from considering the public interest in respect of the removal of resale price maintenance.

Photo of Mr Tom Iremonger Mr Tom Iremonger , Ilford North

I do not think that my hon. Friend is right. The tailpiece provides that in any such case it is necessary first to get through the gateways.

Photo of Mr Graham Page Mr Graham Page , Crosby

The Court must consider the gateways first, but having considered them it goes on to consider the interest of the public as consumers or users resulting from the maintenance of a minimum resale price. The Court is set the problem of weighing up the harm done to the interest of the public as consumers without resale price maintenance against the harm done to the interests of the public with resale price maintenance, but the former consideration is limited to the question of the harm created by the factors set out in paragraphs (a), (b) and (c), namely, lack of quality, lack of variety and lack of sufficient establishments, whereas when considering the harm caused by the maintenance of resale prices the question of the public interest is left at large. In my submission, it should be left at large, as I have provided in paragraph (b) of Amendment No. 71, whichever side of the question is being considered.

I submit that my Amendment is fair, neat, logical and entirely intelligible.

Photo of Mr William Shepherd Mr William Shepherd , Cheadle

We have had a fairly exhaustive debate on this subject, and I am sure that few Members would take the view that it had not been worth discussion. However we may regard those who wish to frustrate the processes of competition in the distributive trade, no one would take the view that all the aspects from which they might defend their actions should not be open to them before the Restrictive Practices Court.

The discussion has hinged upon two points—first, services and, secondly, the question whether the criteria laid down in the Bill are too narrow for the purposes that we have in mind. There was a very interesting divergence of opinion between two hon. Members opposite. To one the question of services was the Mecca to which he wished to proceed, but his hon. Friend took a bitterly cynical view of the value of services offered by manufacturers or retailers. On the whole, I preferred the cynicism of the one to the rather coy naivety of the other.

7.15 p.m.

First, I want to deal with the narrowness of the gateways. I am sorry that my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) is not here, because I must criticise him to some extent in respect of his presentation of the case. He was intimately connected with the gestation period of the 1956 Act, and he therefore must have been more aware than he led the Committee to believe of the reasons why it was essential to have less diverse criteria in this Bill than were incorporated in the 1956 Act.

The 1956 Measure dealt with practices which were fundamental to the structure of British industry. In that case the criteria had to be drawn very wide, and questions of broad public interest had to be taken into consideration. But in considering the requirements of this Bill we are faced with an entirely different set of circumstances. We are not concerned with a vast conspiracy to fasten upon a section of British industry an uneconomic plan. We are concerned with the question whether Mr. Bloggs's 5s. socks should be sold for 4s. 6d. This is a much narrower issue, and my right hon. and learned Friend was not being quite fair when he failed to point out the effect of incorporating in the Bill criteria of a width which was considered quite proper in 1956.

The effect would be to render these not justiciable issues. If, on these very narrow points, we require a judge to take cognisance of the widest issues affecting the economy of the nation, the whole thing ceases to be a justiciable issue. If my right hon. Friend's Amendment were accepted this would not be a justiciable issue. It is not a question of making a simple and naive comparison between the 1956 Act and the present Bill; it is a question of realising the immensely different character of the issues which are to be dealt with. I hope that we shall not be under any illusions as to the dangerous step that we should be taking if we sought to impose upon the Restrictive Practices Court the consideration of issues based upon criteria which rendered them no longer justiciable.

I turn now to the question of services. I cannot understand why some hon. Members talk about services in such a glorified way. As far as I am aware, it is in the area of services, or of goods with which services are associated, that the greatest measure of public discontent exists. I am involved in one or two different kinds of business, and I have not been aware of any great enthusiasm among the public for the various services which are proffered.

I wish to point out the real danger of allowing the question of services to be used to frustrate the purposes of the Bill. If we accept my right hon. Friend's Amendment, nothing will be easier than for those who are seeking to obtain permission to maintain their prices to come before the Court and say, "We are providing services", and get away with that practice on the basis of so providing.

Very often it is the operation of restrictive practices in respect of price maintenance which enables a wholly undesirable structure of manufacture and distribution to be imposed. Let the Committee consider the question of car batteries. Car batteries which cost about £2 5s. to make in the factory are sold to the public by well-known manufacturers et £10. These are rough figures, but they are accurate enough to bear scrutiny. How is it that this situation perpetuates'? It is simply because of the existence—or it is partly or substantally because of the existence—of resale price maintenance.

If, as a garage man, I sell a car battery and get the same profit on it as on a lower priced battery, I am still making a great deal more money. If I make a profit of 40 per cent. on a £10 article instead of making a profit of 40 per cent. on a £5 article I have doubled the money in my pocket. Resale price maintenance helps to keen this unhealthy profit-loaded structure in existence. If we could prevent the maintenance of prices in this way we should do something to collapse this unhealthy structure.

One must look at the question of services not merely from the point of view of whether they convey an advantage or a disadvantage to the consumer but from the point or view of the extent to which they may be used by manufacturers when pleading a case or advancing an excuse for he maintenance of the price structure which I believe to be utterly and wholly unreasonable.

I hope, therefore, that the Committee will think carefully about the desirability of imposing on the Restrictive Practices Court a criteria which is not justiciable and, secondly, that it will consider carefully whether any widening of the gate way to admit services will enable manufacturers to use this as an excuse for continuing a structure of price and profit which I believe to be strongly against the public interest.

Photo of Sir Isaac Pitman Sir Isaac Pitman , Bath

I have an Amendment, No. 191, which I understand, I may speak to. For me, it involves a constituency matter. The hon. Member for Ebbw Vale (Mr. M. Foot) is sympathe tic to the Amendment and has put down his name in support of it. The Amendment has to do with health and is largely of an exploratory nature. It may be that the words, "any necessary services", in subsection (2,c), are of importance in respect of the sale of shoes, and my constituents make a large number of shoes.

In the fitting of shoes for children a very wide range of fittings as well as of sizes is involved and there is a degree of conscientiousness on the part of the salesmen and a degree of variety. I believe that the variety is well covered in subsection (1,a), but I am not sure that the provisions in subsection (2,c) meet the desire of the manufacturer to control the outlets for his shoes, so that they go only to retailers with a profit margin adequate to pay salesmen who will give a conscientious service to the mothers of children requiring the shoes.

We are concerned that cut prices might lead to a desire to sell shoes—particularly to ignorant mothers—which would be harmful to the health of children required to wear them. We wish to know whether it is, in the words of the subsection, among the "necessary services" that when buying shoes the purchaser should be advised by a competent sales assistant. This may pose a moot point, and that is why I wish to ask the Minister whether that sort of consideration is covered.

This applies also to the pharmaceutical trade. On the whole, we should like medicines to be sold to the public by people who are in a position to give advice to the purchaser at the time of the sale. Is that necessary? I suspect that it could be argued that if a customer goes to a grocer to buy medicine it is not necessary that the grocer's assistant should be able to give information about the article purchased. It is a service which is desirable although perhaps not absolutely necessary.

I should like the Minister to say whether, in the shoe trade and in the pharmacy trade, the word "necessary" has the necessarily wide meaning to cover "desirability".

Photo of Mr John Temple Mr John Temple , City of Chester

I am concerned about one aspect of the retail trade not covered by the Bill as drafted, and I think that it would be helped by this Amendment. I refer to new shops on new housing estates. The gateways are concerned mainly with the status quo. The Amendment refers significantly to …the benefit or advantage enjoyed or likely to be enjoyed.… In other words, it refers to benefits which a consumer is likely to enjoy in the future.

My right hon. Friend has had a good deal to do with the South East Study which envisages an increase in population in the south-east of England of 31 million. I have visited a great number of housing estates in the last few years. Many of the new private housing estates are deficient in shopping facilities. The corner shop is a normal feature of the older parts of our towns, but it is not easy to establish a new corner shop on a new housing estate.

I respectfully submit to the Committee that a few r.p.m. lines are just what are wanted to encourage the establishment of new shops on new housing estates. I have walked around housing estates and found difficulty in buying a newspaper. I had to walk a great distance. Elderly people have asked me whether shops could be provided closer to their homes, because old and very young people are not able to go great distances to the larger shopping centres.

As I see it, this will militate against the establishing of smaller shops. The Bill refers to the number of shops being substantially reduced. Were that so, there would be a case for the retention of r.p.m. Nothing is said about helping where there is a danger of the non-establishment of these shops. The aspect of the Amendment which looks to the future appeals to me and that is a feature which I hope will be dealt with by my right hon. Friend.

Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North

I have some doubts whether the point raised by the hon. Member arises on this Amendment, but it is covered in Amendment No. 200.

Photo of Mr John Temple Mr John Temple , City of Chester

I am obliged to the right hon. Gentleman. This aspect does occur in relation to this Amendment, because there is a reference to the future, and I thought this an appropriate time to seek the views of my right hon. Friend.

7.30 p.m.

Photo of Captain Walter Elliot Captain Walter Elliot , Carshalton

I wish to support the Amendment. According to newspaper and television references, our deliberations on the Bill appear to be very much larger than life. I hope, therefore, that in simply rising to support the Amendment I shall not be labelled as a "rebel", and I do not think that my hon. Friends who do not rise to speak should be regarded as cringing under the lash of the Whips. I am quite sure that that is not the case.

We have heard a great deal of argument about what my right hon. Friend the Secretary of State for Industry and Trade has or has not given away during the passage of the Bill. It seems to me that he has stated clearly that he is not compromising on any of his basic principles. I am glad that he has said so, and I should not expect anything less.

I do not know what rights a back bencher has other than those that he carves out for himself, but, at least, he has the right to expect that when the Government produce a Bill they have thought it out thoroughly and are quite determined to stick to its basic principles. My right hon. Friend has said that he is willing to look at anomalies and any improvements that we might be able to bring forward, and he has already shown considerable courtesy in doing this. We are very appreciative that he has spent so much time here tonight and allowed us all an opportunity to say what we have to say.

As I see it, the main purpose of the Bill is to benefit the consumer, to enable him to take maximum advantage of new retailing developments, and, if possible, to bring a breath of competition to the manufacturers, again to benefit the consumer. But the Bill also recognises, by its gateways and by its Title, that, in certain circumstances, r.p.m. acts to the advantage of the consumer, and I believe that this Amendment, brought forward by my right hon. Friend, supports that recognition. To my mind, it is anything, when we read the wording, but a wrecking Amendment. It aims to improve and strengthen the Bill in so far as the Bill benefits the consumer. It is quite the reverse to an attack on the basic principles.

We had a spirited discussion last night about the net book agreement, and I agree with my hon. Friend the Member for Stratford-on-Avon (Mr. Maude) that the public interest is the test in deciding whether a pricing agreement is to remain in operation. I would not agree with the hon. Member for Ebbw Vale (Mr. M. Foot) that we could settle an issue like tint in this Committee. The significance of the ruling of the net book agreement, believe, was that an independent tribunal ruled that its maintenance was not against the public interest. Here I agree with the hon. Member for Ebbw Vale that the present gateway in, he Bill would not allow the net book agreement through. It illustrates to me, and this is my criticism of the Clause, the dangers of trying to be too precise n the Bill.

My right hon. Friend the Member for Thirsk and Malton (Mr. Turton) also mentioned tie cement agreement. I do not know the details of it, but, as I understood it, it was argued that if price maintenance went then prices would or might rise. I am quite certain that that sort of thing is not the intention of my right hon. Friend the Minister. I was very surprised when my hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davies) advanced the argument that judges were not in a position to rule, or would find it very difficult to rule, on prices. I should have thought that prices were no more difficult to rule on than the quality of goods.

I should like to give another example; it is not a very big one, but it might illustrate the unexpected effects that this Clause might have. I take the case of the inventor who patents his invention. As I expect many hon. Members know, he can impose conditions about the price at which the article invented is sold. He can impose them on the people licensed to make and sell the article. Under the law, also, an inventor has a monopoly of 16 years on his invention, and at present, no doubt, resale price maintenance can also be imposed.

Here, there is a difference between goods controlled by a person who invented them and those which are not controlled, because in the passage of years the monopoly has lapsed under the law. We want to encourage the inventor. He has spent time and money on research. He hopes that he will be recompensed, and we hope that the nation will benefit as a result of his work. I believe that it is right that he should be encouraged. If he has invented something, it is at least arguable that he should be able to maintain some sort of control over the price, at least during the years of monopoly. I believe that this could be a special incentive in the case of the inventor. It is not a big point, but it illustrates the danger of trying to lay down conditions too precisely in the Bill.

There may well be other unexpected results that we do not know about as new inventions come about. This Amendment is designed to avoid those dangers. I do not believe that it strikes at the principles of the Bill, and I sincerely hope that my right hon. Friend will look at it and consider it very carefully.

Photo of Mr Norman Cole Mr Norman Cole , Bedfordshire South

I hope that my right hon. Friend will think about this Amendment, in its actual terms and what is sought to do by it. It has been said several times in this debate that the Title of the Bill is the restriction of the maintenance of minimum resale prices. Unlike the Socialist Private Member's Bill, which came forward in January, it does not include the word "abolition" in its Title. It merely uses the words "resale prices". As such, I am sure that my right hon. Friend the Secretary of State and the Government had it in mind to consider the public interest as a whole. In this, it is completely on all fours with the Act of 1956, which was also designed, as, indeed, all legislation is designed, in the interests of all sections of the public.

The word "public" is a comprehensive and entirely covering term not only of people who make, consume, buy or distribute—it is everybody. It refers to no one particular section of our community. It is on those lines that I should like to address my remarks. The first thing that I note about the Amendment is that in its first few words it talks about the public, and, therefore, it commends itself to me, apart from what follows. I have personally tried, during the debate on the Bill, and I shall continue to do so, to say what I felt would be good for the public as a whole. That is what I shall support; and what would not be good for the public as a whole I shall oppose.

My right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) and various other hon. Members have used the term "broad" in speaking of this proposed Amendment. That is a dangerous term to use and might make my right hon. Friend and the Government look more warily at the Amendment than they would otherwise do. I do not think it is all that broad. It is very specific when it talks of some specific and substantial benefit or advantage enjoyed". I should not have called it broad so much as trying—as we ought—to cover other eventualities which may develop, as a sort of guidance to the Restrictive Practices Court on what we intend it to do. Once the Bill has been passed, and has become an Act, it will be too late to have second thoughts about protecting the public. I think it right to put in something to help the Court in this matter.

The hon. Member for Come Valley (Mr. Duffy) pointed out that the Court has been rather more severe in recent years in its judgments under the 1956 Act.

Photo of Mr Norman Cole Mr Norman Cole , Bedfordshire South

I thought that I heard the hon. Member say that the Court was more determined in its work. If I have misunderstood him I am sorry. However that may be, we should be in a position to guide the Court on exactly what we have in mind. We are the body which must lay down the lines on which we wish the Bill to work. The Court will have no regard to what Parliament meant by these words.

I wish to ask my right hon. Friend the Secretary of State a specific question. Ts the fact that the wider or other gateway covered by this Amendment, which was fathered by the 1956 Act, is not included in the Bill deliberate? Does he wish it to be left out, or is it left out because it is not considered necessary in this Bill? I hone that he will give a quick answer on that so that we may know where we are in regard to the revision of policy, from the 1956 Act onwards. That is all-important to us in considering what action to take on this Amendment.

Photo of Mr Edward Heath Mr Edward Heath , Bexley

I am sorry to interrupt my hon. Friend, but I was not quite clear about the point he was putting to me which he said was so important

Photo of Mr Norman Cole Mr Norman Cole , Bedfordshire South

I will try to make it clear.

Amendment No. 59 contains almost a copy of the gateway provided in the 1956 Restrictive Practices Act. I cannot believe that it is by mistake that that does not appear in the Bill. I should like my right hon. Friend to tell us whether that was a deliberate part of policy based on experience, or that it was felt that the Bill did not need a vehicle of that kind. I want to know why it is not there, to put it in simple language in the simplest and most respectful way of asking.

Behind each of these gateways, (a), (b) and (c) and the new one we are seeking to import to the Bill, is one more guide that in my opinion would be a bigger guide than any other. We must not underrate the importance of the tailpiece to the subsection. Suppose one has been through (a), (b) and (c) and this one, the opposite point in the purpose is for the Court to assess what would be the detriment to a person if resale price maintenance went on. That is an astute thing to ask the Court to do. I think it not impossible that members of a Court might be coloured in their thinking by the fact that we have brought forward a Bill which at the least seeks to restrict resale price maintenance.

This is an overt initiative on the part of the Government in 1964. That being so the Court, however unbiased it must and will be to start with, will be imbued with the thought that the Government, representing the country as a whole and with the support of the other two parties, wishes generally to see resale price maintenance abolished. That being so, if its retention has to be brought against the gateways those gateways will have to be strongly argued, pleaded, and proved to disabuse the minds of the Court of the initial idea that generally resale price maintenance should not be maintained.

It is very possible that at least two of these gateways may be needed to overcome this other fault. We may need (a), (b) or (c) and the one which my right hon. Friend the Member for Thirsk and Malton (Mr. Turton) seeks to put in. That is why we should make these gateways as open, clear and comprehensive as we can. I hope we shall not forget—I do not think that we shall—that in seeking to do justice to the public we also have a duty to sections of the public, those who serve the public generally. I am not talking of services, but of service as a whole. Justice has two sides. It does not only deal with prices or services to the public, but with livelihood and continued livelihood. It deals with all that goes to make up the life of the people distributing goods and services.

For these reasons, I hope that my right hon. Friend will give some consideration to importing the thought of this Amendment into Clause 5.

7.45 p.m.

Photo of Mr Edward Heath Mr Edward Heath , Bexley

We have had a long and, I think the Committee will agree, an extremely interesting debate. It has been one of great importance. I think that the Committee will also agree that hon. Members have responded to the request of my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) when he spoke earlier today.

My right hon. and learned Friend asked that we should look at these matters as impartially end as carefully as we can, weigh them and give them the fullest consideration, because we wanted to obtain the right answer to the questions with which eve were faced. Of course, I welcome this approach and I am, naturally, anxious to respond to it to the fullest possible extent. I hope that the Committee will agree that I have not only listened to a very great deal of these proceelings, but have also given careful consideration to the points which have been raised. Already, we have been able to take account of points raised on both side s of the Committee, and I wish to continue to do that in this debate.

Perhaps I can begin by dealing with three particular points which have been raised by some of my hon. Friends. I promise my -ion. Friend the Member for Bedfordshire. South (Mr. Cole) that during my remarks I shall explain to him very fully how the present gateways in the Bill came to be framed. I can assure him that it was through no oversight that Section 21(b) was not moved intact from the 1956 Act and transposed, or translated, to the Bill. We have framed Clause 5 in this way quite deliberately.

My hon. Friend the Member for City of Chester (Mr. Temple) emphasised the very difficult problem of shops on new housing estates. Many hon. Members have experience of this; some of us have them in our constituencies. My hon. Friend suggested that resale price maintenance on a few items would be the answer to this in encouraging shops to go to new housing estates. The position with which we are faced is that we have resale price maintenance on a considerable number of articles and this does not induce shops to go to new housing estates. There is thus a regrettable situation at the moment even with resale price maintenance. Therefore, with the sympathy we have for my hon. Friend and others, it is necessary to look for the answer in some other direction.

My hon. Friend the Member for Bath (Sir J. Pitman) referred to his Amendment, No. 191, which is being discussed in this general group of Amendments. I can give him the assurance that we have examined this Amendment in connection with the third gateway provided in paragraph (b) as drafted. This deals with the cessation or substantial reduction of necessary services. My hon. Friend will see that these are defined by subsection (3) as services required to guard against the risk of injury. My advice is that his Amendment, dealing with services necessary for the health of the public, would fall within the definition already in the Clause. I therefore hope he will feel that the objective he was trying to obtain is already covered in the drafting which we have at present.

Now I deal with Amendment No. 69, which was moved last night by my right hon. Friend the Member for Thirsk and Malton (Mr. Turton) and, connected with it, the major Amendment No. 71, which has been spoken to by my hon. Friend the Member for Crosby (Mr. Graham Page). Amendment No. 71 reorganises the whole framework of the Clause, as he told us. It does, in fact, widen the approach very considerably. Indeed, I rather doubt whether, in its present form it is a justiciable issue, so wide is it, to put before the Court. But I will deal, if I may, in more detail with these points with Amendment No. 69, which is the one immediately before the Committee.

This Clause deals with the questions of the criteria on which the Restrictive Practices Court shall make its judgment in the cases which come before it, and I think the question with which the Committee is posed is: how should we reach those criteria? The hon. Member for Ebbw Vale (Mr. M. Foot) dealt with this very difficulty last night, and in some ways I have great sympathy with what he says. What he was asking—it was almost repeated today by the hon. Member for Dunbartonshire, East (Mr. Bence)—was, "Will you say specifically whether such and such an article would get through the Court?" The hon. Member for Ebbw Vale took the case of the net book agreement, or books themselves, and the other hon. Member mentioned newspapers. I was asked that specific question.

Newspapers, on which my hon. Friend the Member for Harrow, Central (Sir P. Bishop) is an authority, are not covered by resale price maintenance, so these questions do not arise, but we will take the question of books. It would be easier if we were to say that such and such goods will get through, that such and such goods will not get through. But then, in that case, what is the purpose of having the Court?

This is really the point to which the logic of the hon. Member for Ebbw Vale leads, that it would be better if the Minister, or the House, by Order or by some other means, were to decide which goods would be covered and which would not. Indeed, this was the general thesis of the case we discussed yesterday on an Amendment tabled by the Leader of the Liberal Party and his hon. Friends. It leads to this general question, but the Bill, which was given its Second Reading, was adopting a judicial procedure.

I would suggest to the hon. Gentleman that what we ought to do is to set out the grounds on which exemption may be granted. Whether or not goods get through is a matter for the Court to decide. When we are dealing with cases which have already been dealt with by the Restrictive Practices Court it may be possible to make certain deductions. In that I would agree with the hon. Member. Indeed, several of my right hon. and hon. Friends have drawn deductions in this debate. However, I do not think that it is possible. I would suggest that the task of the Committee is to set out the grounds on which applications may be made, on which cases may be argued, and that it is for the Court to decide, on the facts put before it, whether they should be granted or not.

Photo of Mr Michael Foot Mr Michael Foot , Ebbw Vale

What I argued was—and many hon. Members have agreed with me today, although they derided me yesterday about it—was that we can only judge the efficacy of the gateway by practical examples, trying to consider which ones will get through. I am not asking the right hon. Gentleman to decide this matter on the Floor of the House. I was asking his opinion, whether he thought the book agreement would get through. We have the opinion of the right hon. and learned Gentleman the Member for Chertsey (Sir L. Heald), who tells us that he thinks it is highly dubious that the book agreement would get through. I should like to know what the opinion of the Secretary of State is on that matter. If the right hon. and learned Gentleman, a former Attorney-General, can give us his opinion, let the Secretary of State who is in charge of the Bill tell us his.

Photo of Mr Edward Heath Mr Edward Heath , Bexley

On the question of particular items which have already been before the Restrictive Practices Court, it may be possible to make deductions, but I think that the hon. Gentleman himself would agree that there are very few hon. Members who would claim to have all the facts and figures about a particular item—as to the extent of it, the variety or quality which might be affected, or the services affected. There would be few hon. Members who would presume now to make a judgment on this matter. I do not think that on any item, apart from the net book agreement which has been before the Court, there is any suggestion that we could do it.

I come to the question how we should settle the procedure. I think it is agreed that we should not try to say in advance that we want certain items to get through. Therefore, we must settle the criteria. We can set out what the criteria ought to be, and then it would be for the Court to decide the extent to which any particular item of goods matches up to those criteria. That, I think, is the way we should approach it.

We decided that the Court should have this task in order to give confidence to the decisions which it makes, and it should have all the information, weigh all the evidence and reach conclusions.

I should now like to deal with some of the points brought forward by my right hon. and learned Friend the Member for Hertfordshire, East.

Photo of Mr Norman Cole Mr Norman Cole , Bedfordshire South

I am sure that my right hon. Friend will address his mind to what would be the position if a certain trade or industry which got through the Court under the 1956 Act were turned down because of the Bill.

Photo of Mr Edward Heath Mr Edward Heath , Bexley

Yes, of course we have addressed our minds to that. This is a particular problem which arises, and there are various ways of dealing with it, but it doe s not arise on this particular Amendment because it does not come under this particular Clause.

My right hon. and learned Friend the Member for Hertfordshire, East asked, first, what particular things we were afraid might be taken into account if this Clause were amended as proposed, as well as dealing with some of the other point. With great respect to him, I do not think that that is really a point which is at issue. I should like to deal with this by explaining the approach which we have so far taken in forming the Bill.

The Amendment, as my right hon. Friend the Member for Thirsk and Mahon said, is moulded on Section 21(1,b) of the 1956 Act. There was a particular reason why that provision was put into the Act, as I think my right hon. Friend knows. When the criteria were being set out in Section 21 the majority of them were set out to meet particular, peculiar circumstances, but the Act itself was covering a very wide variety of restrictive agreements. There had been an inquiry into restrictive agreements generally, but no one knew exactly how many different types of agreement there were or what might be produced once registration had taken place, and it was, therefore, necessary to have a gateway—to use this phrase—in the Act to deal with any sort or variety of agreement which was produced. This was the essential reason why it was put in. It was also put in to cover the particular problem of research, and this was commented upon by my right hon. Friend the present Minister of Defence in that debate.

I refer the Committee to Section 6(1) and the restrictions in relation to various matters with which it has to deal. There are five different sets of restrictions set out, and they are very elaborate. They are set out in five paragraphs: (a) the prices to be charged, quoted or paid for goods supplied, offered or acquired, or for the application of any process of manufacture to goods; (b) the terms or conditions on or subject to which goods are to be supplied or acquired or any such process is to be applied to goods; (c) the quantities or descriptions of goods to be produced, supplied or acquired; (d) the processes of manufacture to be applied…or the quantities or descriptions of goods…(e) the persons or classes of persons… This is a very comprehensive range with which the Act had to deal, and with which Section 21(1,b), on which this present Amendment is moulded, also has to deal; but, of course, only one of those, paragraph (a), and only part of paragraph (a), was concerned with resale price maintenance. It is suggested that in moulding this Amendment on Section 21(1,b) of the Act we are almost repeating something which was required and covered. But a very wide range of activities was set out in Section 6 of the Act. As a result it was not possible to be specific or particular in dealing with each of the items set out in that Section of the Act—whereas when dealing with r.p.m. we are dealing with only one type of restrictive practice, a very clear, simple and straightforward type.

8.0 p.m.

All r.p.m. consists of this one type and there is a great deal of information in existence about it. It has been carefully studied for a long time. Committees, including committees of officials, have considered it and, as I say, there is much information on which to form a judgment. It is, therefore, different in this respect from the situation which existed when we were dealing with the 1956 Act.

It is natural that when the phraseology of one Measure designed to deal with the sort of situation I have described is transferred to a different Measure, which is designed to deal with a different set of circumstances, certain difficulties should arise. Two such diffi- culties have been referred to and these may or may not have been recognised when the Amendment was drafted. First, the phrase "any goods" in the Amendment was, I think, natural and necessary when dealing with restrictive practices of the broad variety under the 1956 Act. However, when put into the Bill it has a special significance because it means that the Court would have to take account not only of the goods which had been brought before it by the Registrar, but any other goods as well.

This widens the whole thing over the whole sphere and brings in the question of the r.p.m. of goods beyond the goods being dealt with. This is a matter on which there may be two views, both of which have been expressed today. It is commonly put in this form; that a retailer may want to take the profits from one lot of goods in order to subsidise something else which he is selling. It is true that if he does this through maintaining the prices of those goods, the consumers buying them in other shops will still have to pay the maintained price.

Economically, I believe that it is right that the goods should, so to speak, stand on their own feet and that one should pay the price which is justified by the goods themselves—and that the consumer should not have his element of choice removed from him. If the consumer is paying a higher price than is necessary for that one lot of goods than he would otherwise pay in a shop in which they are not being subsidised, this removes the choice from the consumer and this is what would occur under the Amendment if "any goods" was included.

The next difficulty which arises is the use of the word "purchasers". This is not only connected with this Amendment, but with several others in the group which desire to insert the word "purchasers". Again, this is taken from Section 21 of the 1956 Act. It may in some cases have been included in some of the Amendments without full account having been taken of its implication or, perhaps—as some hon. Members opposite have suggested—that hon. Members want it put in for certain purposes.

Let us consider the situation. In the 1956 Act the restrictive practices with which that Measure was dealing were concerned with manufacturers. Thus, when the Court was judging a case the interests of the manufacturers were excluded. It was the consumer, as the purchaser or user, who had to be considered by the Court, and it was the benefit or detriment in those particular cases which had to be weighed up.

In the Bill what is comparable to the manufacturer is, in fact, the manufacturer, the wholesaler and the retailer because they are all concerned in the restrictive practice, which is r.p.m. Therefore, the people with whom the Court has to deal in deciding benefit or detriment are those beyond that situation, who are the consumers. As many hon. Members have emphasised, the purpose of the Bill is to secure greater competition and better use of resources in the interests of the consumer and it is in that interest that production and distribution takes place.

In this respect, therefore, it is those beyond parties to the restrictive practice—the manufacturer, supplier, wholesaler and retailer—with whom the Court is concerned. If we include the word "purchasers" we shall be including the wholesaler, retailer and all concerned in the distributive trade.

Photo of Mr Robin Turton Mr Robin Turton , Thirsk and Malton

The wording in the Amendment is the public as purchasers", and the consumers…of…goods. Is my right hon. Friend now suggesting that a party to the agreement who was a wholesaler or retailer could be brought within the definition of "the public as purchasers"?

Photo of Mr Edward Heath Mr Edward Heath , Bexley

Yes. That is our view and the advice I have received. I am told that wholesalers and retailers are members of the public. On the other hand, if my right hon. and hon. Friends wish to exclude wholesalers and retailers and to carry on the process I have described beyond that, then, in our view, "consumer" and "user" deals with that situation, because we have not been able to think of a case in this respect which would not be covered by "consumer" and user".

I understand that the question of public libraries has been raised but that, too, would be covered by "the public use". Incidentally, the question of baby food has been mentioned, but it may be that the baby consumes the food whereas the user is. the parent who obtains it and uses it for the purpose of feeding the baby. [Laughter.] This is a rather delicate matter for me.

If hon. Members can suggest other cases in which they feel that the definition is lacking, we will certainly consider it fully, but having gone over the ground, and having received representations from various people outside the Committee, we have not been able to find a case which would not be covered by the definition of "consumer" and "user". It any hon. Member opposite wants to bring in the whole of the distributive trade, that is a different consideration and must be argued on its merits.

I have spoken about particular difficulties which arise, but they could be dealt with in a technical form. The main question in the Amendment is the approach to the subject of setting out the criteria on which the Court should judge. I suggest that our main task is to give the Court specific criteria on which it can form it> judgment. I believe that this would be accepted as a general principle of Legislation; that Parliament, when passing legislation, should be as specific as possible. It is for the Court to make its judgment on specific criteria, wherever these can be obtained and provided by Parliament.

I was, therefore, encouraged by the remarks of my right hon. and learned Friend the Member for Hertfordshire, East in which he broadly accepted this view that when passing legislation we should be as specific as possible. However, my right hon. and learned Friend went on to say that in the circumstances, it was important to ensure that the different circumstances were covered by broad criteria—and in this matter I entirely agree, with him.

This point was emphasised by my right hon. and learned Friend the Member for Chertsey (Sir L. Heald), a former Attorney-General, and my hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davies). They believe that the criteria should be specific or particular, but that, at the same time, we should see that as far as possible the whole field is covered. Indeed, where there has been criticism, either in Committee or in the Press about the fact that we are using the machinery of a judicial tribunal to deal with this, the criticism has usually been that far too much was being left to the Court's judgment. I hope that it will be generally accepted that Parliament should try to make the task as clear as possible by setting out particular criteria. So it is this, more than asking what was likely to arise on the general base, that has led us to construct the Bill in this instance on particular criteria.

It has sometimes been said that it was Section 21(1,b) of the 1956 Act, on which these cases were referred, which involved resale price maintenance. But perhaps I might say that no individual criteria were set out in the 1956 Act for individual retail price maintenance because, as has been mentioned, and was pointed out again yesterday by the right hon. Member for Battersea, North (Mr. Jay), resale price maintenance was authorised under Section 25 of the 1956 Act and there were, therefore, no criteria in Section 21(1,b) to deal with resale price maintenance.

Where the Court was dealing with collective agreements, and passed a view on resale price maintenance, it did so under either Section 21(1,b) or 21(1,g), where it was necessary to support a collective agreement. I therefore suggest that it is for Parliament to define the field in which exemption may be set, and it is for the Court to exercise its responsibility in determining individual exemptions.

We have set out in Clause 5 what have been commonly described as the individual gateways or the particular criteria. They have often been mentioned, but I believe that they are very fairly set out. There has been considerable discussion about the gateways being broad, in the terms of the Amendment, or narrow in the terms of Clause 5. I suggest that these are not really suitable terms in which to examine the approach either of the Amendment or of the particular cases set out in the Clause. It is not a difference between broad and narrow, but a difference between a particular or a general approach. As I have said, I believe that the particular approach is desirable from the point of view of the court.

As my right hon. and learned Friend the Member for Chertsey said, when we drew up these criteria they were based on the arguments put forward by those who were in favour of retaining resale price maintenance. These were arguments that had been often examined and discussed—the question of quality and variety of goods, the number of establishments and services. It is absolutely right that we should also examine any other arguments that are put forward as being reasons why they should be included in the gateways in justification of resale price maintenance. That, I fully accept. It is a procedure we have already followed, so we should carefully examine all the arguments on the gateways put forward in the Committee or from any other source.

My right hon. Friend the Member for Thirsk and Malton and my right hon. and learned Friend the Member for Hertfordshire, East looked at the net book agreement from this point of view. My right hon. and learned Friend pointed out that seven cases had been based on Section 21(1,b), three of them being concerned with resale price maintenance. He spoke of two of these in which r.p.m. was involved. Only one, of course, was directly concerned with resale price maintenance, and that was the one in the net book agreement. The other was on cement, which was dealt with under Section 21(1,g), in support of a collective agreement that was approved by the Court.

My right hon. and learned Friend drew our attention to the views of the Court on the net book agreement. As he rightly pointed out, the Court said that there would be fewer and less well-equipped book-holding bookshops. This is a case that can be argued under Clause 5(2,b), because that deals with the number of retail outlets, and a book-holding shop is a retail outlet. It was also said that there would be fewer titles, and that can be argued under Clause 5(2,a)—variety and quality of books. In both cases, therefore, there are gateways under which those two points can be argued—

8.15 p.m.

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

Is that quite right? The argument there rested largely, if not mainly, on calculations about the size of printing orders. There was no suggestion, as I understand, that it would necessarily involve a diminution in the number of retail outlets, which is the matter raised in subsection (2,b). Subsection (2,a) deals with quality and variety. But suppose we have no diminution in the quality or in the variety, but merely in the number—which, as I understand it, was the apprehension entertained in the net book agreement—that would not appear to come within the Bill as drafted.

Photo of Mr Edward Heath Mr Edward Heath , Bexley

I think that the argument was that there would be fewer titles as a result of this, and this, indeed, deals with the question of variety.

I agree that, as far as my right hon. and learned Friend has mentioned it, his other point is not covered by either of those two gateways, but the two points I have mentioned are both covered in the Bill—

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

I apologise to my right hon. Friend—I dislike interrupting hint again—but he will remember that I drew attention to the passage in the judgment which set out the three matters that arose before the Court. Two of the matters were that there would be fewer and less well-equipped bookshops and fewer published titles. but the third matter is that of more expensive books, and the matter of more expensive books arose because of the increased cost of production resulting from a change in printing, and so on. It is that matter that I, at any rate at present, find it a little difficult to see could successfully be upset in argument under the Bill as drafted.

Photo of Mr Edward Heath Mr Edward Heath , Bexley

I fully accept that from my right hon. and learned Friend. I was only pointing out that the first two cases can be argued under the Bill as drafted. If the facts were the same, I have no doubt that the Court would find in the same way. What is more, it is only necessary to find on one gateway for the case to be exempted.

But the third point was on the question of services, which my right hon. Friend the Member for Thirsk and Malton mentioned last night. Services can equally be argued under subsection (2,c), but in this particular case the Court rejected the argument put forward in the net book agreement. That does not after the fact that it could have been put forward under the Bill.

I agree with my right hon. Friend that on the fourth point—the question of price, stockholding bookshops, and so on—it would not have been possible to argue under these counts. There are the three points on which they could argue, without going into the merits of the other. It may have been difficult to put it forward there.

The cement agreement case was brought under Section 21(1,g), and the argument was that the collective agreement would enable, in a sellers' market—and it is important to recognise that—prices to be kept down and that, therefore, resale price maintenance was necessary. There is, of course, the other fact that under the Bill maximum prices can still be enforced. This, presumably, would have a bearing on such agreements as the cement agreement, whereas I think that it would not apply to the point raised by my right hon. and learned Friend the Member for Hertfordsh re, West in the net book agreement.

Among other points raised by my right hon. Friend the Member for Thirsk and Malton and others, was a point of omission that he thought would be covered by his own Amendment—the question o goods that might be sold which proved to be to the danger of public health. That point has been emphasised by a number of hon. Members opposite, including the hon. Member for Hudersfield, West (Mr. Wade). It is true that this is not covered as one of the Eastways in the Bill, but when we discussed this subject on Clause I it was pointed out that in the particular case of the chemist there was another way of dealing with it, though some hon. Members suggested that it did not cover the case completely.

The argument has been put forward that the proper way to deal with that is through legislation that covers it. I agree with that, and the Committee as a whole would probably accept that legislation should deal with the question of danger to public health. But it may be that there is a gap here which ought to be dealt with in this present Clause.

Photo of Mr Donald Wade Mr Donald Wade , Huddersfield West

When the right hon. Gentleman says that there may be a gap, are we to gather from that that an Amendment is to be tabled on Report?

Photo of Mr Edward Heath Mr Edward Heath , Bexley

The hon. Member is advancing very fast. If I may continue, at a fairly steady pace, to cover the ground, perhaps I could comment on that a little later.

I want to deal with the next point which has been discussed by a number of hon. Members, and that is the question of necessary services. It will be seen that the second part of Clause 5 (3), which has not always been quoted in full, says that 'necessary services', in relation to goods, means services which, having regard to the character of the goods, are required to guard against the risk of injury, whether to persons or to premises. in connection with the consumption, installations or use of the goods,". That is the part which has been quoted quite frequently, but it goes on to say: or are otherwise reasonably necessary for the benefit of consumers or users— This, therefore, covers a wide field of services. My hon. Friend the Member for Gillingham (Mr. Burden) mentioned the point. The second part deals with the first part of his point about a wider field, but I suggest to the Committee that it is not only a question of injury, and so on, but of services which otherwise are reasonably necessary for the benefit of the consumers or users. This is a very fair approach to the question.

We then move to the other point—whether the word "necessary" should be omitted and whether this matter should be dealt with merely in terms of service. This broadens the whole field again and some hon. Members have pointed out the difficulty that arises from it. If the services are not necessary, I suggest that this is the point where the consumer ought to have the right of choice and should not have to pay for them. Although they may be nice he may not want them and he should not have to pay for them through r.p.m. If r.p.m. is removed he has the opportunity either of buying his goods without the services, presumably at a cheaper rate, or of buying the goods at a shop which gives the services but charges for them. This is the element of choice to the consumer.

Where the services are necessary or "reasonably necessary" for the benefit of the consumer, well and good; or if the retailer likes to provide them at his own expense, well and good. But, in general, the consumer ought to have the right of choice where the services are neither necessary nor reasonably necessary for his benefit. This is why I suggest that we ought not to delete the words "necessary" or "reasonably necessary".

I hope that I have commented on the main questions raised in connection with the Clause and the particular points raised on it about health and safety, price, and the necessary services. I suggest to the Committee that the conclusion to be drawn from this is that we are right to give the Court particular criteria on which to judge the issues that come before it as far as we possibly can. We have adopted this procedure, for the reasons which I have given to the Committee and I hope that the Committee will support us in this. At the same time, we should look carefully at the particular criteria which we have adopted to see that the right aspects are in them to put before the Court.

These judgments being made by the Committee are economic, social and political judgments, but Parliament is the right place for them to be made and then it is for the Court to take evidence and reach conclusions accordingly. I hope that the Committee will agree with that. As for the criteria, I have studied the Notice Paper while it has been compiled and Amendments have been tabled and it is extremely interesting to see how few specific points have been made for additional criteria under Clause 5. We have considered them and I have listened carefully to everything that has been said today.

The first of the two points which have been mentioned for the most part is the question of the danger to public health. This has been mentioned not only on Clause 1, but again today. I have explained that it may be that here is an area not covered by other legislation and other means. It may be that some fears have been exaggerated. I know that some hon. Members sincerely hold that view. They do not believe that some goods sold outside chemists' shops have ever been a danger to health. Others think that they may be. Therefore, there is here an area which we feel justified in covering.

We feel justified in believing that the Court should hear evidence on this point then it is judging the criteria. There are later Amendments which deal with this point. There is one which I might find possible to accept, judging from its wording, to deal with the specific question of danger to health and to make that a specific criterion to be added w the three which we have at present.

The second point is the question of price. I have listened with care to everything said about this. The hon. Member for Grimsby (Mr. Crosland) said that he found it difficult to visualise another case besides the net book case in which this would happen. As has been pointed out, this particular case has been clearly set out and the view of the Court has been expressed. I have heard an argument about another case of a similar type to the book case. It is not for me to try to judge one way or the other, but in these circumstances and with the other anxieties which hon. Members have expressed about the development of the retail distribution system after the removal of r.p.m., we ought to consider this very carefully.

I remember that the hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) made an interesting speech on Clause 1 in which he analysed the possible development of individual monopoly as a result of the removal of r.p.m. The conclusion to which he came was that it was most unlikely to arise and that it would be difficult to show that this was a likely element in the situation. Others of my right hon. and hon. Friends have expressed anxieties that these proposals would lead to a situation in which individual monopoly would develop. My own views are that this is most unlikely, but we have had one case which has been described very fully.

I feel that we ought to give full consideration to the question of including an item about prices among the criteria. I do not find anything on the Notice Paper the wording of which is in a form which we could accept for Clause 5, but this is a matter that can be arranged between row and Report. [HON. MEMBERS: "Upstairs."] We are doing everything on the Floor of the House today, except for right hon. and hon. Members opposite, who seem to be dashing upstairs at every possible opportunity.

We will give careful consideration to the framing of the wording in order to deal with the question of price. I would not think that a standard price is a question which should come into this. The argument put forward is that the public likes a standard price, but the general view now is that the public's attitude has changed. Whereas, 10 years ago, the public liked standard prices, all the organisations concerned advise today that the housewife and the shopper like to choose the price according to the goods and the services which they get with them. I am not suggesting that this is a question of standard price. It is a question of a permanent rise in prices which some hon. Members fear would he the result of the abolition of r.p.m. It is to this point that we should give attention between now and Report.

8.30 p.m.

Photo of Mr John Eden Mr John Eden , Bournemouth West

Can the matter be related to some form of time scale? Might not the immediate short-term impact over quite a wide range of gods as that be an increase in price which would soon afterwards work itself out and that prices would be reduced'.

Photo of Mr Edward Heath Mr Edward Heath , Bexley

I think that my hon. Friend is quite right. This is one of the factors Which have to be taken into consideration in the wording. One cannot base an exemption or a criterion of this kind on something which is purely a short-term fluctuation. It has got to be something which is shown to be of a permanent and significant nature in accordance with the standards of the criteria what we already have under Clause 5.

Photo of Sir Frederick Burden Sir Frederick Burden , Gillingham

Would not the reverse be the case? If there is to be any price cutting of any considerable danger, it will be when the branded articles have the manufacturer's price on them. Then people would cut the price very largely during the first few weeks or months. After that tie prices would be likely to rise—not in the first instance, but later. Surely the argument is the wrong way round.

Photo of Mr Edward Heath Mr Edward Heath , Bexley

I do not altogether accept my hon. Friend's argument, though I do not think that this is the moment to enter into arguments between him and my hon. Friend the Member for Bournemouth, West (Sir J. Eden).

Now is the moment to say to the Committee that we should adhere to the procedure which we have hitherto adopted in the Bill, setting out particular criteria for the Court. We shall examine the various arguments which have been put forward in the debate, but I suggest that it may later be possible to accept words from the Notice Paper to deal with the question of danger to public health, and that, between now and Report, we can deal with the question of prices.

I hope, therefore, that my right hon. Friend the Member for Thirsk and Malton will feel able to withdraw the Amendment, if he is permitted to do so, and will accept that we should move according to the present structure of the Bill, with the changes which I have indicated, to ensure that we cover the two essential items for the court to consider.

Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North

The Secretary of State has come some way to meet the Committee on the points where a real case has been made out. I, for my part, am glad that he has approached the problem in this way and has not accepted this Amendment wholly.

I should like, in courtesy to the right hon. Member for Thirsk and Malton (Mr. Turton), to thank him for the compliment he paid to this side of the Committee when he said that we were taking the same attitude on this issue as we did in 1956, even though he said that before we had declared our attitude and had heard the arguments. I thought this was particularly generous of him, because not only did the Minister give his support to the 1956 Act in an opposite sense but his right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) not merely supported it but introduced it and advocated it in this House.

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

Does the right hon. Member for Battersea, North (Mr. Jay) find anything inconsistent in the fact that, having had a share, as he says, in putting the 1956 Act on the Statute Book, it provides a good precedent? Does he find that an inconsistent approach?

Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North

I only noted the fact that the right hon. and learned Gentleman supports the repeal by Clause 1 of Section 25 of the 1956 Act. However, we should not pursue that any further because we are concerned with this Amendment.

I think that the essential words in the Amendment are: …by virtue of any arrangements or operations resulting therefrom which he would seek to introduce into this Clause. I say straight away, particularly to the right hon. and learned Member for Hertfordshire, East and to the right hon. Member for Thirsk and Malton, that we are not satisfied with Clause 5 and with the so-called gateways as they stand. We have, as the Minister pointed out, quite a number of other Amendments on the Paper, the case for which I think has been even further strengthened by the debate and, indeed, by the Minister's last remarks. About those I will not speak now. We shall, of course, press them strongly later on. We are not satisfied, however, that the right hon. Gentleman's method of amending the Clause, though it may be the right thing in some respects, would in its totality produce the right effect.

What exactly would the Amendment do? As we all know, this Clause already includes the criteria of quality and variety. Secondly, it includes the criterion of the possible reduction of the number of establishments. I say in passing that while agreeing that we do not want to take decisions about particular industries—far from it—I would be inclined to agree with the right hon. Gentleman that the book publishers would at least have a considerable case to argue under both these heads.

I would also say in passing that I feel that those of us who have a vested interest in writing articles and even writing books—I declare my interest—have to be a little sceptical about the argument that books and newspapers are somehow different from everything else. I do not say that there is not a case, but I think we have to be a little sceptical in examining it.

However, the third criterion, as the Minister pointed out—and it has not been mentioned much this afternoon—is the phrase: service,…necessary for the benefit of consumers —not confined to risk of health but services of any kind necessary for the benefit of consumers. I took that to mean that the operative word here is "necessary". That is to say, as the Bill stands, if it can be established to the Court that certain services necessary to the consumers would be less without resale price maintenance, then there is a very good case to argue; but that if the services are not necessary but are, in the opinion of the Court or of the traders, merely desirable, then the case would not qualify.

The essential point in the Amendment is that services which were not strictly necessary but were, in the opinion of somebody other than the consumers, desirable, would nevertheless constitute a good case. The right hon. Gentleman wants to add the words "arrangements or operations resulting" from the practice of resale price maintenance. His first argument is that, as the Minister said, this would enable the Court to take account of the case where it was argued, on the subject of price, either that the public would prefer standard prices to changing competitive prices, or, alternatively, the case several times quoted today, that the effect of the abandonment of resale price maintenance would actually be higher prices rather than lower. I agree with the right hon. Gentleman and with the Minister in thinking that we must consider further whether we can amend the Bill at a later stage in such a way as to make it possible to take this into account.

It is a matter of opinion, but I am inclined to agree with my hon. Friend the Member for Grimsby (Mr. Crosland) that the number of actual cases in which the abandonment of resale price maintenance would lead to a rise in prices which would not result from the operation of one of these gateways would be few, but I do not think that any of us can say that there will be none. We have not solved the problem yet, and I hope that we shall return to it later. I promise the Minister that we shall take a hand in drafting a solution.

The Amendment, as I understand it, would not merely enable this question of price to be taken into account but would also, as I was saying, enable the manufacturer or whoever it might be to argue that he should be allowed to continue resale price maintenance because he was offering certain services to the consumer which were not necessary services but which were in his opinion desirable. I think that this is the major issue which the Amendment raises. Here, it seems to me that what the right hon. Gentleman is doing is seeking to take out of the hands of the consumer, or, rather, out of the mind of the consumer, the power to choose whether he or she prefers to have the g cods at higher prices with the services or at, perhaps, lower prices without the services.

There is certainly a choice there. It may well be that, in some cases, the housewife in, by paying more, have her goods delivered to the door, whereas, if she pays lies, she has to go and fetch them herself. It may be that, if a petrol station cleans the windscreen, washes one's car or reflates the tyres, one will pay Id. a gallon more for petrol. Here is a real choice, but the issue before the Committee is not whether the services are better or more valuable or whether a lower price is more valuable. The issue before us is: should the decision be taken by the consumer or should it be taken by the traders or, conceivably, by the Court?

Here, I take my stand with those who say that it is the consumer who should make the decision. I do not see how anyone other than the consumer could know better than the consumer whether he or she prefers a lower price or more services. I make a distinction here, which is, I think, crucial to the whole consideration of the Clause, between those issues which the consumer can decide because she has the necessary knowledge at her disposal and the limited number of issues which she cannot. This is why, if I may mention it in passing, we have an Amendment down to include the word "safety" in the Clause. I say this in order to elucidate my present argument.

If a housewife were purchasing an oil stove and she were told that one particular stove was 17s. 6d. cheaper, it might be that that stove was dangerous for some technical reason which she could not possibly judge. It is fair to say then that someone else, the Court or Parliament, should step in and protect her against a mistake. Indeed, this is the whole basis of our legislation on weights and measures, food and drugs, and the rest. But where the consumer can perfectly well judge, where it is a choice between some form of service which she can see and understand and a lower price which she can understand, I do not see why we should imagine that any court of law, still less any body of traders, can decide better than the consumer what the consumer's real choice is.

Here the maximum free consumer choice, in the sense I have given of intelligent consumer choice, is something of great value. It is valuable to the standard of living because our standard of living depends not only upon getting a lot of goods and services but on getting the goods and services we want. It is valuable also from the point of view of ordinary civil liberty and personal freedom. Therefore, I take my stand on the central issue that, where the consumer can choose, Parliament should say that it is the consumer who should choose, not the Court or the trader.

Having listened to practically every speech today, I am unshaken in this view, which I fully admit to the right hon. Member for Thirsk and Malton I held before the debate began. This being so, and in view of the undertakings the Minister has given, and the subsequent Amendments which we have to move—for which, I am confident, we shall have the support of both the right hon. Member for Thirk and Malton and the right hon. and learned Member for Hertfordshire, East and a number of other hon. Members opposite—it would not be my advice to the Committee to support the Amendment as it stands. However, as I said before, I think that this gateway needs a lot of improvement, and I hope that the Minister, in his now more receptive mood, will listen to the arguments which we propose to advance later this evening and tomorrow.

8.45 p.m.

Photo of Mr Michael Foot Mr Michael Foot , Ebbw Vale

I do not propose to traverse all the arguments which the Committee has gone over since about 11 o'clock last night, but there are two or three brief comments which I should like to make. I have sat listening to this debate as long as the Minister and therefore I think that I am perfectly entitled to make them—for that reason, among others.

First, it is most regrettable that this debate on a major part of the Bill should have started last night at a very late hour. It would have been much better and more convenient to the Committee if the right hon. Member for Thirsk and Malton (Mr. Turton) had been able to move his important Amendment at the beginning of the day. Then all those who have participated in the debate would have had the advantage of hearing him and even those who had not been able to hear him would not have been deprived of HANSARD in which they could have read what he said. It would have been better if the right hon. Gentleman had agreed yesterday to arrange the proceedings with that result in view.

One of the main matters about which I have been concerned under the proposed gateways is the effect on the book trade. My right hon. Friend the Member for Battersea, North (Mr. Jay) said he thought that those of us who are concerned with writing books, or reading books, should not over-emphasise our case and that we should remember that there are other things which have strong claims as well as books. I understand his point, but I am not prepared to put books in the same category as cement or soap or, as the hon. Member for Stratford-on-Avon (Mr. Maude) mentioned last night, clothes pegs. I should have thought that the hon. Member would have represented cultural issues in this Committee a bit more meticulously, especially this year.

Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North

My hon. Friend will agree that there are books and books.

Photo of Mr Michael Foot Mr Michael Foot , Ebbw Vale

One has to take the rough with the smooth.

One of the main issues with which we have been concerned in the debate is how the book trade would be affected. It we were to take any action in this Committee under the Bill, or any other Bill, to interfere with the book trade and to injure the publishing trade and reduce the number of publishers, it would be an act of barbarism. Before I agree to this Clause or Bill, I want to make sure that we are not doing any such thing. We have, therefore, examined the matter very carefully.

The evidence given by the Secretary of State is that we are injuring slightly the possibility that the book trade will be able to maintain its system of resale price maintenance, which it thinks can be of the greatest importance to it. I am not misinterpreting what the right hon. Gentleman said. He was not prepared to give his opinion on whether the book trade would be able to get through one of these gateways, or the two gateways. He said he thought it likely that it would. That was his opinion. That was what I was asking him for last night, and he got very testy when I went on asking him for it. Now he has said that the book trade has a good chance of going through these two gateways. The impression which he has given it that it would be likely to succeed in maintaining its system of resale price maintenance. That is the right hon. Gentleman's view. I have a great respect for his view. I am sorry that I took such a long time in extorting it.

The right hon. and learned Member for Cherisey (Sir L. Heald), who is a very eminent lawyer, takes a very different view from the Secretary of State. We all heard what he said. He is extremely dubious about whether the book trade will be able to maintain its system of resale price maintenance. Therefore, this matter is in considerable doubt. That is one of the reasons why I am sympathetic to the Amendment moved by the right hon. Member for Thirsk and Malton. He is trying to remove that doubt.

Although the Secretary of State has treated the Committee with the utmost patience and courtesy and has gone into every detail, he has not removed this doubt. I do not think that he can very well do so under the procedure which he has devised. Unfortunately, neither of the two small niggardly concessions which he has made—one referring to health matters and the other to price—deals with this matter.

Photo of Mr Edward Heath Mr Edward Heath , Bexley

The one concerned with price deals specifically with the point raised by my right hon. Friends. It is the point which was discussed at great length a: the beginning of my speech.

Photo of Mr Michael Foot Mr Michael Foot , Ebbw Vale

If I have got it wrong—I sometimes do, but certainly not always—I am apologetic, but I doubt whether I have got it wrong in this case.

I doubt very much whether the concession that the right hon. Gentleman has made affects the possibility of whether qui book trade will be able to maintain is system of r.p.m. If the concession which the right hon. Gentleman was making dealt with this, why did he not say so in his speech? Why did he not underline the fact that he was making a concession which dealt with one of the major items of the debate? I am, therefore, still extremely dubious whether the right hon. Gentleman has made a ccncession which substantially helps the book trade.

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

May I help the hon. Member? The point about price appears to be the only matter raised in the net book agreement case under the broader criterion of Section 21(1,b) which could not be raised under the three specific criteria in this case. It is, therefore, a fact that that concession would assist the book trade in the way that my right hon. Friend said.

Photo of Mr Michael Foot Mr Michael Foot , Ebbw Vale

The right hon. and learned Gentleman is easily satisfied. When he interrupted his right hon. Friend specifically on:he point, that was not the answer which he received.

Photo of Mr Derek Walker-Smith Mr Derek Walker-Smith , Hertfordshire East

That was before my right hon. Friend announced that he was making his concession.

Photo of Mr Michael Foot Mr Michael Foot , Ebbw Vale

If the concession referred to the point that the right hon. and learned Gentleman had raised, why did not the Minister say so in his reply? I am extremely doubtful, but, as I have said—

Photo of Mr Edward Heath Mr Edward Heath , Bexley

I said that there were two grounds on which I found anxieties in the Committee on the question of price. One was on the specific point raised by both my right hon. Friends which was raised in t le net book agreement and the other was the general one which had been raised by my hon. Friend the Member for Gillingham (Mr. Burden) and by the hon. Member for Grimsby (Mr. Crosland) and which had been discussed by the hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) and others about what would happen to prices when r.p.m. was removed on other goods. I specifically cited both those grounds.

Photo of Mr Michael Foot Mr Michael Foot , Ebbw Vale

If I am wrong, I apologise to the right hon. Gentleman, but I am still extremely doubtful on the matter. Fortunately for the House there will be many future occasions when we will be able to examine this matter afresh. We will be able to do it on the Question, "That the Clause stand part of the Bill", and, no doubt, we will be able to do it on the other Clauses to which my right hon. Friend the Member for Battersea, North has referred. Some hon. Members are eager to believe that the Government are giving concessions. I am not quite as gullible as some of them. We must see in the end who is right. If I am wrong in this matter I will be eager to apologise.

There is, however, one matter on which I am certainly not surprised. I do not believe that the right hon. Gentleman has made any substantial concessions. Indeed, yesterday, in response to a speech which I was making, he insisted that The Times was right in saying that he had agreed only to minor changes. He said that The Times did not show any prescience in publishing this fact because that was all he would agree to do.

Therefore, when the right hon. Gentleman said a few minues ago that he was not making any substantial concessions to his right hon. Friend the Member for Thirsk and Malton, I was not in the least surprised. Nobody was in the least surprised. This was the dullest piece of news of the year, because we had all read it in The Times yesterday following the private discussions which the right hon. Gentleman had had with his select band of followers on the Monday night. I may, possibly, have been wrong about the previous matter, but I am dead right in saying that the right hon. Gentleman has now confirmed by deeds what The Times published yesterday morning. He might have been a bit more gracious about it.

We have had many jeers and cheers from both sides of the Committee about the question of a steering committee on this side of the Committee. When he heard that there was a steering committee on this side of the Committee, the right hon. Gentleman almost laughed his head off. It was the funniest thing that he had ever known. I have not been in charge of that steering committee or he would have been nearer in the ditch than he is already. But he must not confuse things. I have never made any suggestion that there was anything wrong or improper in hon. Members on either side of the Committee meeting together to discuss their general attitude towards proposals put forward by the Government, or their general attitude towards Amendments. That is bound to go on.

What I said was wrong—and the right hon. Gentleman knows it very well—and what is unconstitutional, showing a disrespect for the House of Commons, is that a Minister in charge of a Bill should go to private meetings of his back benchers and indicate to them in advance exactly which Amendments he will accept and which reject. When I accused the right hon. Gentleman of this last night, I asked him to tell us whether the report in The Times was correct. I said that if it was incorrect, I would unhesitatingly accept what he had to say, but that if it was correct, I renewed my charge that he had behaved improperly.

It was very interesting that when I made the accusation hon. Members opposite reacted in two different ways. Some said that I had not understood what the right hon. Gentleman had said to his select band of followers and that it would have been shocking if he had said anything of the kind that I was suggesting. Others said that everybody knew that Ministers made statements of this kind to their back benchers. So they were confused.

The right hon. Gentleman has not answered the question yet and the obvious reason why he has not answered is that on Monday night he did to his select band of followers exactly what the political correspondent of The Times said he had done—he told that private body in a few minutes what he has taken an hour to tell the Committee.

Photo of Mr William Shepherd Mr William Shepherd , Cheadle

On a point of order. Am I not right in assuming that the hon. Gentleman went over this matter at great length last night? Is it in order, Mr. Blackburn, that he should continue with this tedious repetition?

Photo of Mr Fred Blackburn Mr Fred Blackburn , Stalybridge and Hyde

I was not in the Chair last night and therefore did not hear it. I understand that the matter has been referred to again today. Consequently, I have felt that I was prohibited from stopping the hon. Member for Ebbw Vale (Mr. M. Foot) as other hon. Members had referred to the subject. I felt that I could not call the hon. Member to order.

Photo of Mr Michael Foot Mr Michael Foot , Ebbw Vale

I am sure that you are right in that, Mr. Blackburn. It is true, as the hon. Member for Cheadle (Mr. Shepherd) has said, that I put these questions to the Minister last night. The reason I have raised the matter again today is that the Minister did not answer them.

Photo of Mr Fred Blackburn Mr Fred Blackburn , Stalybridge and Hyde

Order. Perhaps the hon. Member had better not stress that he has made the speech before.

Photo of Mr Michael Foot Mr Michael Foot , Ebbw Vale

I am sure that you will understand very well, Mr. Blackburn, that in the House of Commons it is often necessary to put questions once or twice, or even three times, because Ministers are sometimes very deaf, and we have to use different forms of instruments to extort answers. The right hon. Gentleman complained earlier that I had used a rapier to deal with the Government and afterwards he said that I was using a bludgeon. It may be that the instruments have changed. I think that it was Jonathan Swift who said that one should not try to hew blocks with razors. When dealing with Ministers one often has to use very blunt instruments.

I hope that what we have said will prevent the right hon. Gentleman from doing in future what he did on Monday night and what he has done on a whole series of occasions throughout the Bill—trying to fix outside the House of Commons what should be settled only inside.

9.0 p.m.

Photo of Mr Robin Turton Mr Robin Turton , Thirsk and Malton

My right hon. and hon. Friends and I put down this Amendment because we were concerned that the criterion of public interest was too narrowly drawn. We suggested using the definition of public interest in the 1956 Act. My right hon. Friend has gone a long way to define public interest more widely by adding danger to health and by adding the question of price. In view of that, I believe that public interest has been more adequately defined, and I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Photo of Mr Peter Roberts Mr Peter Roberts , Sheffield, Heeley

I beg to move, Amendment No. 187 in page 5, line 7, at the end to insert: (a) there would be a reduction in the volume or net earnings of the export business in goods of that class which would be substantial either in relation to the whole export business of the United Kingdom or in relation to the whole business (including export business) in goods of that class; or.

Photo of Mr Fred Blackburn Mr Fred Blackburn , Stalybridge and Hyde

I think that with that Amendment we can consider Amendment No. 186, in page 5, line 20, at the end to insert: or(d) there should be a reduction in the volume or not earnings of the export business in goods of that class which would be substantial either in relation to the whole export business of the United Kingdom or in relation to the whole business (including export business) in goods of that class".

Photo of Mr Peter Roberts Mr Peter Roberts , Sheffield, Heeley

The Amendment deals with the question of exports.

Photo of Mr Fred Blackburn Mr Fred Blackburn , Stalybridge and Hyde

Order. I think than if there is less noise in the Chamber it will be much easier for us all to hear what the hon. Member is saying.

Photo of Mr Peter Roberts Mr Peter Roberts , Sheffield, Heeley

I am obliged to you, Mr. Blackburn.

The Amendment deals with the question of exports as one of the gateways in the Clause. I listened with great interest to my right hon. Friend when he was discussing the principle of the gateways and referred to various other specific arguments which have been put up. At that stage we had not discussed the impact 3f the abolition of r.p.m. on our export trade and I think that that matter should be clarified.

A similar Amendment was made to the 1956 Bill when it was considered in Committee. No arguments were advanced in favour of it, nor were any advanced against it. The Amendment was merely made. That might have been a good precedent for the debate that we have just had. That Amendment was made to the 1956 Act, and I think that my right hon. Friend ought to explain why a similar provision has not been included in the Bill.

I agree that the wording of the first half of the Amendment is so narrow that it might not be applicable, but I draw the attention of the Committee to the second half of it. There are two questions which I should like my right hon. Friend to answer. First, with his experience of his Department, does he think that there might be a deterioration in export business as a result of the abolition of r.p.m.? In considering that point, I draw my right hon. Friend's attention to an industry in Sheffield, a part of which I have the honour to represent. The hand tools industry is based mainly on Sheffield, and on Sheffield steel. Thirty-six percent. of that industry's total output is exported. Therefore, it ranks very high in our export trade in proportion to home production. Secondly, this trade has been built up overseas for 50 years or more by named brands which are also sold at home, and which, emanating from Sheffield, are known all over the world.

An overseas market of this kind must be based upon a substantial and firm home market. In the hand tool trade there has been a branded name—a quality of service—which has been tied to resale price maintenance agreements. I should like to know whether my right hon. Friend thinks that by the abolition of r.p.m. in the home market there will be a deterioration in the export business of firms engaged in the manufacture and distribution of hand tools.

Sheffield prides itself upon the quality of service that it gives in these hand tools, and if there is likely to be a deterioration in export business as a result of the abolition of r.p.m. the Minister will have a certain amount of explaining to do. I have given one example, but there are others. I am sure that the hon. Member for Sheffield, Hillsborough (Mr. Darling) knows of some. There is the magnet class of goods, and certain classes of machine tools which are sold under branded names, besides certain parts and components of motor cars, to which this consideration might apply.

All these goods are part of the great steel complex which comes out of Sheffield, and they are sold under r.p.m. arrangements. If the Minister says that from the experience he has had and from inquiries he has made it is not likely that the abolition of r.p.m. will reduce these exports, I shall be very happy. On the other hand, he may say that it is possible—and some people who are engaged in these trades advise me that it is—that they will lose some of their export market because they will not have a firm basis at home from which to prosecute it, but that even if there is such a deterioration the gateways which already exist in the Clause are sufficient for the purpose.

That may be so, but I see that the Clause relates to the detriment of the United Kingdom public as consumers or users of goods. That applies to all three gateways. It is, therefore, rather difficult to see how an industry could claim that it could use any of those three exceptions for the protection of its export business, since all three exceptions are confined to users and consumers.

Photo of Mr Fred Mulley Mr Fred Mulley , Sheffield Park

The hon. Gentleman has made an extremely strong case, but he seemed to indicate that if the Minister said that there would be no detriment to the export trade he would withdraw the Amendment. I hope that he will not do so. By his Amendment he is trying to provide that this very important question of export business will rank as one of the criteria, in which case people can use this argument before the Court. In my opinion, it should be put before the Court. It should not be a question of the Minister's saying that he does not think that the Sheffield tool trade will lose some of its export business as a result of the abolition of r.p.m.

Photo of Mr Peter Roberts Mr Peter Roberts , Sheffield, Heeley

I am obliged to the hon. Member. No doubt he will be able to contribute to the debate later on. I said that I put down the Amendment because it seemed extraordinary that the question of exports, as a gateway, shoulil have been omitted from the Bill when it was included in the Restrictive Trade Practices Act. I am asking what was the reason for that omission.

I should have thought the main reason which the Minister might give was that no harm would be done. I have given various examples—it may be that there are others—where, if we can show that it is possible that substantial harm may be done to the export trade by the abolition of resale price maintenance, the Amendment should be accepted. I am quite certain that my right hon. Friend has more information on this subject than I have, and so I should like to know whether he thinks there is likely to be any deterioration in the export business because of the provisions in this Bill.

My right hon. Friend may say that even if there is likely to be deterioration, the Bill is drawn in such a manner that any manufacturing company would be able to argue the question before the Court. That is the point I was discussing when I was interrupted. It seems to me that there is no provision in Clause 5 which would allow a firm, an association or an industry which was losing exports to use that as an argument before the Court. There is merely a reference to the public as consumers or users. It may be that the Minister will argue that "public" means overseas customers, but I do not know. If his answer is that he expects a deterioration, we must ask him to consider accepting the Amendment so that some form of protection may be inserted in this Measure as in the Restrictive Trade Practices Act.

I have not been able to discover that the gateway in the Restrictive Trade Practices Act which deals with exports has ever been used, and I should like to know whether it has, because the answer to that question would affect my decision about what action to take. The Section of the 1956 Act was inserted without any argument and I should like to know whether its provisions have been used during the last five years. If so, I think that a further argument in favour of accepting the Amendment. If they have not, I think that would show that the Section is a difficult one to operate.

This is an exploratory Amendment to discover the reason for the omission of exports from the provisions and to find out whether the Minister thinks that there will be any deterioration in exports as a result of the provisions in this Bill, and whether the existing gateways are sufficient to cover the point which I have made.

The Government, the Board of Trade, the Prime Minister—all of us—know the vital importance of exports to our country. I was a member of a panel which, upon instructions from the Board of Trade, visited various firms in and around Sheffield to congratulate them on their export record, and I was proud to be able to do so. We do not want to do anything to dampen the enthusiasm, drive or initiative of firms competing in the world export markets where competition is very fierce.

The omission of a gateway in the Bill to deal with this aspect seems to me something which should be corrected in order to indicate the determination of the Government not to do anything to detract fro n the efforts made by manufacturers is the export markets. This Amendment is in no way critical. It is exploratory, and I am sure that my right hon. Friend, with the experience gained by his Department, will be able to give me more facts than I have at the moment.

9.15 p.m.

Photo of Mr George Darling Mr George Darling , Sheffield, Hillsborough

The hon. Member for Sheffield, Heeley (Sir P. Roberts) does not seem to be aware that there are two Amendments on the Notice Paper in precisely the same words, and that his was the second to be put down. I can assure hip that our Amendment No. 186, in precisely the same words, is not an exploretory Amendment—we mean it, and we are going to press it upon the Government.

I can also assure the hon. Member for Heeley that, whatever the Secretary of State may say in reply to the first question—whether the Secretary of State can give an. assurance that in his view there will t e no deterioration of exports as a result of the operations of this Bill—we cannot take that into consideration, because I think that he would agree that, assuming that this exports gateway is accepted, it is for the Court to decide whether there will be deterioration, on the facts presented by the exporters who want exemption from the terms of the Bill. This is not an assurance, n the terms nut in the question by the hon. Member for Heeley, that we think that the Secretary of State can provide.

In our view, this is an Amendment in the wrong place on the Notice Paper, because, if there is to be an export gateway, we do not think that it should come first in the order of priorities. I think that our Amendment is in the proper place. In any case, the hon. Member for Heeley and ourselves are after the same thing. Both Amendments came from the same source, from representations made to us by exporters in what are known to us as the Sheffield trades—cutlery, manufacturers, tool makers, implement makers, and so on.

As the hon. Member for Heeley has said, the wording is familiar. It is in Section 21 (1,a) of the 1956 Act. There is some virtue in consistency here, if we can get it, especially in the terms of reference to a court of law, and it would be a good thing if we could treat export trading in much the same manner in regard to both collective and individual price-fixing agreements. I am not sure, however, whether it can be done precisely in that way. I, too, am not altogether happy about the wording of the Amendment, though we shall insist on the principle of it being put to the Government. We all know that collective agreements in the export trade were excluded from the 1956 Act. In the presumptions as to public interest in Section 21, note is taken of what the effects on export trade would be if a collective agreement were prohibited. In our view there is a case for giving the same consideration to the effect on exports if individual price fixing were banned.

The same arguments apply to firms engaged in different industries in other parts of the country. Some of the firms which enter substantially into overseas trade have argued to us that they take export sales and prices into consideration when they fix retail prices of products for the home market in r.p.m. arrangements. They argue—I think there is some substance in this—that home consumers benefit from this arrangement when firms have a big export trade. They say that if they had to contend with price cutting in the home market, there would be consequent pressure upon them to reduce factory and wholesale prices for the home market and there would be difficulty in maintaining their level of export prices.

I am not saying whether there is anything substantial in the arguments they put forward. I agree with the hon. Member for Heeley that export prices in the circumstances of today must be highly competitive. To raise them, whatever the circumstances may be which bring forward pressure to raise prices in the export market, would be a quick and easy way of losing trade in these days. To lose exports would not only be detrimental to the firms concerned, but, as I am sure the Secretary of State would agree, it would be detrimental to the national interest.

Photo of Mr Edward Heath Mr Edward Heath , Bexley

I am following the argument of the hon. Member closely. He said that if manufacturers were under pressure to reduce prices they would have difficulty in maintaining their export prices. Can he clarify that statement?

Photo of Mr George Darling Mr George Darling , Sheffield, Hillsborough

If, as the situation is now, they have to balance home and export prices so that they get a reasonable return and the pressure on the home market is such that they have to increase factory prices, they will have to increase export prices. It would be difficult for them to carry out that operation. What the consequences will be I am not prepared to argue, but there certainly would be pressure. At least the argument is put to us that there would be pressure on them to increase export prices to counterbalance reductions they were called upon to make in the home market.

Some firms have told us that because of the nature of their trade they may be in this difficult position over price arrangements for the home and the export markets. If they were compelled because of this to have two levels of price, one for the home market and one for exports, they might be accused by overseas competitors of dumping.

As I say, I am not arguing their case for them. I am merely saying to the Secretary of State that the representations we have received have come quite sincerely from many manufacturers who fear that they are going to be in difficulties in regard to their exports if they have to prohibit resale price arrangements. If they sincerely believe that their overseas trade will be adversely affected by the terms of this Bill, they should have a right to go before the Court to present their case, to present the facts on which the case is based and to ask the Court on a proper assessment of these facts to give them the exemption they seek if they can prove their case.

In considering the public interest we cannot take a narrow view and merely assess the advantage of ending price-fixing arrangements and the effect on products in the home market. I do not need to argue this case to the Secretary of State because he is involved in his Ministry with the export trades. He has to expand exports. As we discussed in the debate on Friday, he has the job of finding means of increasing exports and getting a continuous expansion in exports.

There are no Liberals present in the Committee tonight. There were no Liberals present on Friday. It might have pleased them to know that the Minister of State and I were in complete agreement on Friday on the need to increase exports. We stated that unless we can go on expanding exports the trade, the living conditions and the social welfare of the country will be at stake. All our hopes of improving living conditions depend on the expansion of exports.

This is where the real interests of the home consumer come in. He may be immediately better off if fixed prices are abolished and prices are reduced as a result on the particular commodities about which we are talking which enter in a big way into the export trade. If, however, as a result of this immediate advantage here to the home consumer the export trades were to be adversely affected, it might be, not only in the long run but fairly quickly, that the home consumer would be no better off. He might be worse off.

If the Secretary of State, as I am sure he did, read the speech which the Minister made on Friday, a speech making a passionate plea, which I fully supported, in the interests of exports, he will find it very difficult, I think, without disowning his hon. Friend, to reject this Amendment. It would not, in our view, weaken the Bill in any way, because no exporter will be exempted from the abolition of price fixing unless he can prove that the abolition will seriously affect his exports. We do not regard this Amendment merely as a probing Amendment. We think that it is a responsible proposal, and I hope, therefore, that the Secretary of State will accept it.

Photo of Mr John Osborn Mr John Osborn , Sheffield, Hallam

I willingly join my hon. Friend the Member for Sheffield, Heeley (Sir P. Roberts) and support this Amendment. For me, it is a little more than a probing Amendment. The hon. Member for Ebbw Vale (Mr. M. Foot) declared his interest in the publishing industry. I, too, have an interest to declare—as well as in steel, which is a Sheffield industry, as the hon. Member for Sheffield, Hillsborough (Mr. Darling) and the hon. Member for Sheffield, Park (Mr. Mulley) are aware, in some of the smaller tool industries. I have a direct and an indirect interest in this.

The point is that some firms have certain types of export arrangements for their goods, and those export arrangements depend on a firm and stable home market. These firms have approached me, some collectively, some individually, pointing oat that there are various difficulties in their home market if they are severely affected. They have additional promotional costs, and sometimes other difficulties, which have already been pointed of the in selling. In one industry there are some firms which would be affected by a collapse of their home market or a collapse of r.p.m. on the home market. There are others which would not be so greatly affected. Those which are affected have approached me and pointed out what their position is when they are certain that they would be influenced in this particular way.

As has been pointed out, we in Parliament have to define the field in which exemption should be sought; each particular case must be put before the Court. I should like to support my hon. Friend the Member for Heeley in his plea for exports. There are certain features which ought to be looked at by the Court. Because and hour is getting late I want to be reasonably brief, and so I ask the Secretary of State very carefully to look into the points which have already been raised.

Photo of Mr Fred Mulley Mr Fred Mulley , Sheffield Park

I am very glad to be the fourth Sheffield Member to speak in this short debate and to show that we are unanimous in trying, on the one band, to support the export trade and, on the other, to put the case which is put to us by the manufacturers in our several constituencies in Sheffield.

I though that the hon. Member for Sheffield, Heeley (Sir P. Roberts) made an excellent case for including this gateway, as he called it, in the Bill, but I was rather alarmed about the way he framed his proposal. He seemed to me to be creating for himself a gateway through which to avoid supporting the Amendment when, Mr. Blackburn, you put the Question later. I hope I have misjudged him, because I never thought that he would allow the Government Whips to prevent him from taking the action which the City of Sheffield and the interests of that city demand. Unless the Minister can give an absolute assurance that the point will be met I hope that all hon. Members for the City of Sheffield will join in registering the city's voice in the Division Lobby.

9.30 p.m.

Photo of Mr John Osborn Mr John Osborn , Sheffield, Hallam

I must emphasise that these industries are not confined to Sheffield. They are trade associations concerned with companies not necessarily based on Sheffield but situated in various parts of the country.

Photo of Mr Fred Mulley Mr Fred Mulley , Sheffield Park

I was not denying that. I was merely saying, on the Sheffield issue, that hon. Members opposite who represent Sheffield constituencies have, like my hon. Friends and myself, received representations from a number of trade associations in Sheffield. Indeed, it would be to the credit of hon. Members opposite if they were to come into the Lobby to support the Amendment. I referred specifically to hon. Members who represent Sheffield because they have had the benefit of the great thought which has been given to this subject by the trade associations in the area.

The people of Sheffield want to hear from the Minister not merely an answer to the question posed by the hon. Member for Heeley about whether the Clause might be detrimental to the export trade. They want a clear acceptance of the Amendment or an unequivocal assurance to meet the principle underlying it. In other words, we want an assurance that the Government accept the principle involved and, to implement it, will table an Amendment later. Anything less than that will be unacceptable to the people of Sheffield and should be unacceptable to all hon. Members who represent the city.

The Board of Trade cannot go round the country exhorting firms to increase their export effort—which is a national necessity and a matter of vital public interest—if when it comes to a question of considering the criteria to be adopted when the Court considers cases of r.p.m. it will not be possible for those firms and industries to know that their representatives will be able to argue before the Court that they should be favourably considered. We are not tonight asking the Minister to decide this issue—to say that a firm which exports should automatically not come within the ambit of the Bill. All we require is an assurance that such firms will have an opportunity to present their cases to the Court to show the export consequences to them of losing their resale minimum prices. This seems an extremely reasonable proposition.

I was rather alarmed at the way in which the speech of the hon. Member for Heeley was couched, for while he appeared to be keen to know the Minister's attitude, he appeared almost willing to withdraw the Amendment. I did not like the "Whitehall knows best" attitude of his speech. I am sure that hon. Members opposite who represent Sheffield constituencies would criticise my hon. Friends and me for saying that Whitehall knows best and that they agree that the Court will presumably grant exemption if it considers that a case has been made. Equally, it will refuse to do so if a case has not been made. Manufacturers are entitled to put their cases to the Court.

It is particularly significant that the representations concerned with this matter, certainly in my constituency, should have come from trade associations in the hand tool and cutlery industries. A number of firms are now doing very important export business. There have always been some firms with a magnificent export trade, but I can remember 10 or 12 years ago meeting with not much support when I suggested that some of the smaller firms should enter the export trade and, perhaps by cooperative arrangements, try to push Sheffield's products. A great number of them have now made great efforts in the export trade.

I hope that I do not prejudge the Secretary of State's reply he may well accept the Amendment, which would be the sensible thing to do—but if he were to reject it, it would mean a great slap in the face for our export industries, because they could not bring this important part of their business before the Court when putting their case. It is an extremely reasonable case, and I hope that the right hon. Gentleman will give us a reasonable answer.

Photo of Mr Edward Heath Mr Edward Heath , Bexley

I do not think that anybody realises better than as well as the hon Members representing Sheffield who have spoken, the importance of exports to the country. The hon. Member for Sheffield, Hillsborough (Mr. Darling) has kindly paid tribute to what my hon. Friend the Minister of State had to say on the subject on Friday, and to his efforts to help exporters in various markets. I would be the first to pay tribute to the part that Sheffield plays in this trade. We know of the city's remarkable record. My hon. Friend the Member for Sheffield, Heeley (Sir P. Roberts) gave us some figures when moving the Amendment, and when I was his guest a few years ago at the Cutlers' Feast I had borne in upon me in many ways the importance of Sheffield and its exports. We are, therefore, agreed on the importance of our export trade, and the part that Sheffield plays in it.

The general proposition has been made that this trade should be included as a gateway in order to assist exporters with their case. I have expressed our general approach to gateways in the debate that has just concluded, but I think that the hon. Members for Hillsborough and for Sheffield, Park (Mr. Mulley) would accept that for a gateway to be placed before the Court there must at least be substantial argument that it is a matter of which regard should be taken. If that were not so, a very large number of gateways could be before the Court, which would be listening to arguments which were not of importance to the particular item of resale price maintenance. I therefore hope that we may agree that there should be substantial argument for dealing with this as a gateway, and not only that exporters would like to be able to use this particular argument.

My hon. Friend the Member for Heeley asked whether there would be a deterioratior, in export business as a result of the removal of resale price maintenance on goods. Hon. Members opposite representing Sheffield—and I am sorry to see any difference between Sheffield hon. Members on these points—said that they would not be very willing to accept my view, but I will give it for the benefit of my hon. Friends.

My view, and that of my Department, is that then will not be any deterioration in exports due to the removal of resale price maintenance, and I would like to exp Lain why. Before I do so, however, I might mention that these points have been put by hon. Members for Shefield—in this they are well looking after the interests of their constituents—but I know that British industry as a whole has given great and careful attention' to them and has come to the conclusion that there will not be any deterioration in British exports because of the removal of resale price maintenance. Had it come to a contrary conclusion, I think that we would have had a large number of hon. Members taking part in a debate like this—

Photo of Mr Edward Heath Mr Edward Heath , Bexley

Yes. I suggest that hon. Members opposite should not only take my view but should recognise that British industry has considered this matter very carefully, and does not see any danger in this point.

Photo of Mr Fred Mulley Mr Fred Mulley , Sheffield Park

I am sorry if the right hon. Gentleman misunderstood me. I did not say, or I certainly did not intend to convey the impression that I believed, that there would be substantial deterioration either individually or taking exports as a whole. I hope that that will not be the case. My point was that an association would feel that it ought not to be denied the opportunity of putting hat view of its case to the Court even if the Court did not accept it.

Photo of Mr Edward Heath Mr Edward Heath , Bexley

I fully understand that the hon. Member does not suggest that there would be deterioration, but on his second point it is not enough that those concerned should put the point. We have to have substantial reasons for thinking the point to be important before we put it as a criterion in the Clause.

There is perhaps outside the House of Commons an idea that in fixing prices in this way the manufacturer receives more money with which he can improve his exports overseas, either by reducing prices or by using the money to spend on exports. This is perhaps a common misunderstanding because the additional money, if it is such, which comes from r.p.m. is the difference between the manufacturer's price and the retailer's price and this does not benefit the manufacturer but the distributive chain. The abolition of r.p.m. in that way will not remove revenue from the manufacturer which he uses to improve his exports.

Photo of Sir Douglas Glover Sir Douglas Glover , Ormskirk

I do not think that that is absolutely the case. Some manufacturers may give a limited mark-up to the retailer which may allow the manufacturer to get a higher price than he would otherwise have without r.p.m. It is not always the retailer who gets the benefit.

Photo of Mr Edward Heath Mr Edward Heath , Bexley

I was careful to use the phrase "the difference between the manufacturer's price and the retailer's price", which is fixed. I was not discussing the level of the manufacturer's price but I will deal with that because it was a point raised by the hon. Member for Hillsborough. He said that the argument put to him—he did not necessarily accept or reject it—was that if r.p.m. is abolished there would be pressure on manufacturers to reduce prices. This might well be the case. It would be part of the effect of increased competition on the industry as a whole.

The hon. Member went on to say that there would then be pressure to increase export prices. This would mean that the home prices which the manufacturer charges to the retailers were being used to subsidise export prices. There are two points about this. The first question is whether it is justifiable, if indeed it is happening. Secondly, if it is happening these are circumstances in which the manufacturer might be accused of dumping by people overseas. [HON. MEMBERS: "No."] Yes, because he is using the home price to subsidise the export price.

The case which the hon. Member for Hillsborough put to me was that if there is pressure on the manufacturer's prices here, his export prices will rise and that with two levels of prices he might be accused of dumping. But it is not in that situation that he is likely to be so accused, because his export prices are going up and his home prices are coming down. The situation in which he is likely to be accused of dumping is that where the home prices to distributors are higher than the export prices and he is using the home prices to subsidise the export prices. The argument which the hon. Member put to me ought to be reversed. If it were to happen that, as a result of lower manufacturers' prices at home, export prices would rise it would not be a question of dumping but the hon. Member might say that it would make it difficult for exports to be sold. If that were to happen it would be true.

Photo of Mr George Darling Mr George Darling , Sheffield, Hillsborough

I am afraid that I did not make myself clear. I was trying to say that where the present price-fixing arrangements in the home market have gone and the manufacturer is under great pressure in the export trade to bring down his prices, he might get out of the difficulty by raising manufacturers' prices in the home market, which he would be in a far better position to do then than before. In fact, as the right hon. Gentleman said, reversing the previous argument, he would be in a position of being accused of dumping.

Photo of Mr Edward Heath Mr Edward Heath , Bexley

I think the reverse is likely to happen. If r.p.m. goes on a particular line of goods, it has the effect of increasing competition among retailers, and creating pressure on the manufacturers to reduce their own prices at home. Far from damaging exports, this will lead to more competitive pressures, which will enable them to reduce their export prices overseas. This is the way in which I think it will work and it should, therefore, be beneficial to our exports as a result of the more competitive climate which would be introduced. I hope the hon. Gentleman will be able to reassure those who put forward this objection and will show them how this should help their exports.

My hon. Friend the Member for Heeley rightly talked about the importance of a firm home market. I think if one wanted to carry the case further and say that if the home market were to be badly shaken and disrupted, it would make it more difficult to sustain exports overseas, it is difficult to see that situation arising without also producing cases under the existing gateways. In other words, it is difficult to see disruption in the home market to the extent that it would affect exports without it also affecting the quality and the variety of goods in the home market or the number of retail outlets in the home market, and possibly the services being provided. Taking it to the more extreme case, to the need to secure our home market, if that were damaged it would affect the existing gateways under the Bill, and the firm would be able to bring an action in that respect. In that way the situation is safeguarded.

The last question which I was asked was whether the gateway for exports in the 1956 Act had ever been used. It has been used on six occasions. The items involved were carpets, transformers, linoleum, permanent magnets, net books and water-tube boilers. Of those six cases, the last succeeded in getting through the exports gateway. My hon. Friend asked for that factual information, and that is the situation under the 1956 Act.

I hope that those hon. Members who have taken part in the debate, particularly with the background of Sheffield, will feel that we have given careful consideration to this problem and that we have complete confidence that exports will not be affected by the removal of r.p.m. If the home market were to be disrupted to the extent of damaging the sound base for exports, it would undoubtedly come under the existing gateways in Clause 5 of the Bill and the firm would be able to argue its case before the Court on one of those gateways.

Photo of Mr Fred Mulley Mr Fred Mulley , Sheffield Park

With respect, I put to the right hon. Gentleman the proposition that he has sometimes been known to be wrong in his economic assessment of other matters, and, while one would like to accept his assurance that the exports of the City of Sheffield will not be affected adversely and may, in fact, be improved by the result of this legislation, we are not always prepared to take things on trust. I should like to ask him what possible harm could ensue from giving this gateway to such trade associations as may, on legal advice, think it important to bring a case if they were given the gateway?

Photo of Mr Edward Heath Mr Edward Heath , Bexley

I did say that industry as a whole has considered this matter. It is not only my personal view. As the hon. Gentleman indicated, my Department is always in close touch with industry, and industry as a whole takes the view that r.p.m. is a restrictive practice and that its removal would not damage the export industry. British industry is sufficiently keen on exports to take every possible action to safeguard them should they feel it necessary.

From the point of view of what damage it would do, I think it is justifiable, as the hon. Member for Grimsby (Mr. Crosland) said on an earlier Amendment, to insert gateways only if one believes there is a substantial justification for so doing, or if arguments support it. I hope the Committee will feel that in this case the arguments do not support the maintenance of this gateway and that exports will continue to flourish, notably those from Sheffield.

Photo of Mr George Darling Mr George Darling , Sheffield, Hillsborough

I agree with my hon. Friend the Member for Sheffield, Park (Mr. Mulley) that the Minister seems to have prejudged the case here, and I repeat what my hon. Friend said, that he may be wrong. If events prove that he is wrong, he will, by rejecting the Amendment, have prevented the Court from making any assessment of the situation.

9.45 p.m.

I cannot accept the Minister's view that there is no substantial argument for having a specific gateway for the export problem. There is a substantial argument for including exports among the gateways. When the Minister says that industry as a whole has considered this matter and is satisfied that there ought not to be a gateway for exports, I ask him again to read the debate we had on Friday. One of the arguments which came out then was that far too many firms and far too many trade associations are not paying sufficient attention to exports. It may be that industry as a whole is in this situation.

I cannot accept the evidence which the Secretary of State had adduced as conclusive that the Bill will not in any circumstances harm the export trades about which we have been talking. In the circumstances, since there are two Amendments down in precisely the same form, I have to say that we shall not allow the hon. Member for Sheffield, Heeley (Sir P. Roberts) to withdraw his Amendment but we shall press it to a Division.

Photo of Mr Peter Roberts Mr Peter Roberts , Sheffield, Heeley

If the hon. Member for Sheffield, Hillsborough (Mr. Darling) had pressed his Amendment, I could not have accepted it because it is grammatically incorrect and does not follow the proper form. So I come back to my own Amendment. I think that the hon. Gentleman anticipated what I should have to say, but he might have waited to hear me out.

I have listened very carefully to the arguments put by my right hon. Friend. Unlike the two hon. Members opposite who represent other parts of the City of Sheffield, the hon. Member for Hillsborough and the hon. Member for Park (Mr. Mulley), I am well aware that the problem here is not one of the retail price as opposed to the manufacturer's price. It is a question of the manufacturer's price, and this is why I asked my right hon. Friend whether he thought there would be any deterioration in the manufacturer's price.

I am well aware that it might be suggested—I am not suggesting it—that people put up their prices at home in order to subsidise their business overseas. I do not know whether the hon. Member for Sheffield, Park was suggesting

that this was done in Sheffield. I can tell him that it is not. We are far more sensible in our business affairs.

Photo of Mr Fred Mulley Mr Fred Mulley , Sheffield Park

If I recall aright—it can be checked in HANSARD tomorrow—I made no observations about prices at all. I made no suggestion about how manufacturers in Sheffield went about their export affairs. This is a figment of the hon. Gentleman's imagination. All I did was to make the perfectly proper suggestion that the views of these gentlemen in Sheffield ought to be considered by the Committee and that they would not be satisfied with the opinion of the Secretary of State.

Photo of Mr Peter Roberts Mr Peter Roberts , Sheffield, Heeley

If I should have referred to the argument of the hons. Member for Hillsborough, I apologise, but the argument certainly came from that side of the Committee.

I moved the Amendment in order to get an answer from the Minister on the question of the deterioration of the manufacturer's price if resale price maintenance were abolished. My right hon. Friend has given an answer which satisfies me. I am aware that the general run of industry also accepts this view. I thought that it was my duty to put this particular Sheffield point to my right hon. Friend in order to get a specific answer. This we have had, and I am satisfied.

I beg to ask leave to withdraw the Amendment.

Hon. Members:

No.

Question put, That those words be there inserted:—

The Committee divided: Ayes 159, Noes 228.

Division No. 79.]AYES[9.54 p.m.
Ainsley, WilliamCollick, PercyFernyhough, E.
Albu, AustenCorbet, Mrs. FredaFinch, Harold
Allaun, Frank (Salford, E.)Craddock, George (Bradford, S.)Fitch, Alan
Allen, Scholefield (Crewe)Crosland, AnthonyFletcher, Eric
Awbery, Stan (Bristol, Central)Grossman, R. H. S.Foley, Maurice
Bacon, Miss AliceCullen, Mrs. AliceFoot, Dingle (Ipswich)
Baxter, William (Stirlingshire, W.)Dalyell, TamFoot, Michael (Ebbw Vale)
Beaney, AlanDarling, GeorgeForman, J. C.
Bence, CyrilDavies, G. Elfed (Rhondda, E.)Fraser, Thomas (Hamilton)
Bennett, J. (Glasgow, Bridgeton)Davies, S. O. (Merthyr)Galpern, Sir Myer
Benson, Sir GeorgeDeGargy, HughGeorge, Lady Megan Lloyd (Crmrthn)
Blyton, WilliamDempsey, JamesGordon Walker, Rt. Hon. P. C.
Boardman, H.Diamond, JohnGourlay, Harry
Bottomley, Rt. Hon. A. G.Dodds, NormanGrey, Charles
Bowden, Rt. Hn. H. W. (Leics, S.W.)Doig, PeterGriffiths, David (Rothter Valley)
Bowles, FrankDuffy, A. E. P. (Colne Valley)Griffiths, Rt. Hon. James (Llanelly)
Bray, Dr. JeremyEdwards, Rt. Hon. Ness (Caerphilly)Griffiths, W. (Exchange)
Butler, Herbert (Hackney, C.)Edwards, Walter (Stepney)Hamilton, William (West Fife)
Carmichael, NeilEvans, AlbertHarper, Joseph
Hayman, F. H.Mapp, CharlesSlater, Mrs. Harriet (Stoke, N.)
Healey, DenisMason, RoySlater, Joseph (Sedgefield)
Henderson, Rt.Hn.Arthur(Rwly Regis)Mayhew, ChristopherSmall, William
Herbison, Miss MargaretMillan, BruceSmith, Ellis (Stoke, S.)
Holman, PercyMilne, EdwardSorensen, R. W.
Houghton, DouglasMitchison, G. R.Soskice, Rt. Hon. Sir Frank
Howell, Charles A. (Perry Barr)Morris, Charles (Openshaw)Spriggs, Leslie
Howie, W.Morris, John (Aberavon)Steele, Thomas
Hughes, Cledwyn (Anglesey)Mulley, FrederickStewart, Michael (Fulham)
Hughes, Hector (Aberdeen, N.)Neal, HaroldStones, William
Hunter, A. E.Noel-Baker,Rt.Hn.Philip(Derby,S.)Strauss, Rt. Hn. G. R. (Vauxhall)
Hynd, H. (Accrington)Oliver, G. H.Swain, Thomas
Hynd, John (Attercliffe)O'Malley, B. K.Taylor, Bernard (Mansfield)
Irvine, A. J. (Edge Hill)Oswald, ThomasThomas, George (Cardiff, W.)
Janner, Sir BarnettPadley, W. E.Thomas, Iorwerth (Rhondda, W.)
Jay, Rt. Hon. DouglasParker, JohnThompson, Dr. Alan (Dunfermline)
Jenkins, Roy (Stechford)Pavitt, LaurenceThomson, G. M. (Dundee, E.)
Jones, Dan (Burnley)Pearson, Arthur (Pontypridd)Thornton, Ernest
Jones, Elwyn (West Ham, S.)Pentland, NormanWainwright, Edwin
Jones, J. Idwal (Wrexham)Popplewell, ErnestWarbey, William
Jones, T, W. (Merioneth)Prentice, R. E.Watkins, Tudor
Kelley, RichardProbert, ArthurWeitzman, David
Kenyon, CliffordRankin, JohnWells, William (Walsall, N.)
King, Dr. HoraceRedhead, E. C.Wigg, George
Lee, Frederick (Newton)Reynolds, G. W.Wilkins, W. A.
Lever, L. M. (Ardwick)Rhodes, H.Willey, Frederick
Mabon, Dr. J. DicksonRoberts, Albert (Normanton)Williams, W. T. (Warrington)
McBride, N.Roberts, Goronwy (Caernarvon)Willis, E. G. (Edinburgh, E.)
McCann, JRobertson, John (Paisley)Wilson, Rt. Hon. Harold (Huyton)
McInnes, JamesRobinson, Kenneth (St. Pancras,N.)Winterbottom, R. E.
Mackie, John (Enfield, East)Ross, WilliamWoodburn, Rt. Hon. A.
MacMillan, Malcolm (Western Isles)Short, EdwardYates, Victor (Ladywood)
Mallalieu, E. L. (Brigg)Silkin, John
Mallalieu, J.P.W. (Huddersfield, E.)Silverman, Sydney (Nelson)TELLERS FOR THE AYES:
Manuel, ArchieSkeffington, ArthurMr. Lawson and
Mr. Ifor Davies.
NOES
Agnew, Sir PeterDance, JamesHolland, Philip
Allason, Jamesd'Avigdor-Goldsmid, Sir HenryHolt, Arthur
Amery, Rt. Hon. JulianDeedes, Rt. Hon. W. F.Hope, Rt. Hon. Lord John
Atkins, HumphreyDigby, Simon WingfieldHopkins, Alan
Awdry, Daniel (Chippenham)Doughty, CharlesHornby, R. P.
Balniel, LordDouglas-Home, Rt. Hon. Sir AlecHoward, Hon. G. R. (St. Ives)
Barber, Rt. Hon. AnthonyDrayson, G. B.Howard, John (Southampton, Test)
Barlow, Sir Johndu Cann, EdwardHughes Hallett, Vice-Admiral John
Barter, JohnEden, Sir JohnHughes-Young, Michael
Batsford, BrianElliot, Capt. Walter (Carshalton)Hutchison, Michael Clark
Bennett, F. M. (Torquay)Erroll, Rt. Hon. F. J.Iremonger, T. L.
Biffen, JohnFarey-Jones, F. W.Irvine, Bryant Godman (Rye)
Bingham, R. M.Farr, JohnJames, David
Birch, Rt. Hon. NigelFell, AnthonyJohnson, Eric (Blackley)
Bishop, Sir PatrickFinlay, GraemeJohnson Smith, Geoffrey
Black, Sir CyrilFisher, NigelJoseph, Rt. Hon. Sir Keith
Bourne-Arton, A.Foster, Sir JohnKaberry, Sir Donald
Bowen, Roderic (Cardigan)Fraser, Rt.Hn.Hugh(Stafford&Stone)Kershaw, Anthony
Box, DonaldFreeth, DenzilKirk, Peter
Boyd-Carpenter, Rt. Hon. JohnGalbraith, Hon. T. G. D.Kitson, Timothy
Boyle, Rt. Hon. Sir EdwardGammans, LadyLambton, Viscount
Braine, BernardGardner, EdwardLeavey, J. A.
Brewis, JohnGibson-Watt, DavidLegge-Bourke, Sir Harry
Brown, Alan (Tottenham)Gilmour, Sir John (East Fife)Lilley, F. J. P.
Bryan, PaulGlover, Sir DouglasLinstead, Sir Hugh
Buck, AntonyGlyn, Dr. Alan (Clapham)Lloyd, Rt. Hon. Selwyn (Wirral)
Bullard, DenysGodber, Rt. Hon. J. B.Longbottom, Charles
Campbell, GordonGoodhew, VictorLongden, Gilbert
Cary, Sir RobertGower, RaymondLoveys, Walter H.
Channon, H. P. G.Grant-Ferris, R.Lubbock, Eric
Chataway, ChristopherGreen, AlanLucas-Tooth, Sir Hugh
Clark, William (Nottingham, S.)Grosvenor, Lord RobertMcAdden, Sir Stephen
Cleaver, LeonardHall, John (Wycombe)McLaren, Martin
Cole, NormanHamilton, Michael (Wellingborough)Maclay, Rt. Hon. John
Cooke, RobertHarris, Frederic (Croydon, N.W.)Maclean, Sir Fitzroy(Bute & N.Ayrs)
Cooper, A. E.Harris, Reader (Heston)McLean, Neil (Inverness)
Cordeaux, Lt.-Col. J. K.Harrison, Col. Sir Harwood (Eye)Macleod, Rt. Hn. Iain (Enfield, W.)
Corfield, F. V.Harvey, John (Walthamstow, E.)McMaster Stanley R.
Coulson, MichaelHay, JohnMacmillan, Rt.Hn.Harold (Bromley)
Courtney, Cdr. AnthonyHeald, Rt. Hon. Sir LionelMaddan, Martin
Craddock, Sir Beresford (Spelthorne)Heath, Rt. Hon. EdwardMaginnis, John E.
Critchley, JulianHendry, ForbesMarples, Rt. Hon. Ernest
Cunningham, Sir KnoxHill, J. E. B. (S. Norfolk)Marten, Neil
Curran, CharlesHirst, GeoffreyMathew, Robert (Honiton)
Currie, G. B. H.Hobson, Rt. Hon. Sir JohnMawby, Ray
Dalkeith, Earl ofHocking, Philip N.Maxwell-Hyslop, R. J.
Maydon, Lt.-Cmdr. S. L. C.Rees, Hugh (Swansea, W.)Temple, John M.
Miscampbell, NormanRees-Davies, W. R. (Isle of Thanet)Thatcher, Mrs. Margaret
Montgomery, FergusRenton, Rt. Hon. DavidThomas, sir Leslie (Canterbury)
More, Jasper (Ludlow)Ridsdale, JulianThompson, Sir Richard (Croydon, S.)
Morrison, JohnRippon, Rt. Hon. GeoffreyThorneycroft, Rt. Hon. Peter
Mott-Radclyffe, Sir CharlesRoberts, Sir Peter (Heeley)Thornton-Kemsley, Sir Colin
Neave, AireyRobinson, Rt. Hn. Sir R. (B'pool, S.)Tilney, John (Wavertree)
Noble, Rt. Hon. MichaelRodgers, John (Sevenoaks)Touche, Rt. Hon. Sir Gordon
Nugent, Rt. Hon. Sir RichardRoots, WilliamTurner, Colin
Oakshott, Sir HendrieRopner, Col, Sir LeonardTurton, Rt. Hon. R. H.
Orr, Capt. L. P. S.Sandys, Rt. Hon. DuncanTweedsmuir, Lady
Orr-Ewing, Sir Ian (Hendon, North)Scott-Hopkins, Jamesvan Straubenzee, W. R.
Osborn, John (Hallam)Seymour, LeslieVane, W. M. F.
Osborne, Sir Cyril (Louth)Sharples, RichardVaughan-Morgan, Rt. Hon. Sir John
Page, John (Harrow, West)Shaw, M.Wade, Donald
Page, Graham (Crosby)Skeet, T. H. H.Walker, Peter
Pannell, Norman (Kirkdale)Smith, Dudley (Br'ntf'd & Chiswick)Walker-Smith, Rt. Hon. Sir Derek
Partridge, E.Soames, Rt. Hon. ChristopherWall, Patrick
Pearson, Frank (Clitheroe)Spearman, Sir AlexanderWatkinson, Rt. Hon. Harold
Percival, IanStainton, KeithWells, John (Maidstone)
Peyton, JohnStanley, Hon. RichardWhitelaw, William
Pickthorn, Sir KennethStevens, GeoffreyWilliams, Dudley (Exeter)
Pike, Miss MervynStodart, J. A.Wills, Sir Gerald (Bridgwater)
Pitman, Sir JamesStoddart-Scott, Col. Sir MalcolmWilson, Geoffrey (Truro)
Pounder, RaftonStorey, Sir SamuelWolrige-Gordon, Patrick
Price, David (Eastleigh)Studholme, Sir HenryWood, Rt. Hon. Richard
Proudfoot, WilfredSummers, Sir SpencerWoodhouse, C. M.
Pym, FrancisTapsell, PeterWoollam, John
Ramsden, Rt. Hon. JamesTaylor, Sir Charles (Eastbourne)
Rawlinson, Rt. Hon. Sir PeterTaylor, Edwin (Bolton, E.)TELLERS FOR THE NOES:
Redmayne, Rt. Hon, MartinTaylor, Sir William (Bradford, N.)Mr. Chichester-Clark and
Mr. R. W. Elliott.

It being after Ten o'clock, The CHAIRMAN left the Chair to report Progress and ask leave to sit again.

Committee report Progress.