Monopolies, Mergers and Restrictive Practices

Part of the debate – in the House of Commons at 12:00 am on 6 July 1964.

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Photo of Mr Edward Du Cann Mr Edward Du Cann , Taunton 12:00, 6 July 1964

My right hon. Friend said in his opening speech that this idea was worth consideration, and he will be replying to the T.U.C. in due course.

The hon. Member for Edmonton (Mr. Albu), in his very interesting speech, raised a number of points partly on this matter and partly on others. I make two points about the proposal to have a Registrar. The proposal has two advantages additional to those of speed and effectiveness which I have already mentioned. The first is that it removes as far as possible from the political arena the invidious task of selecting subjects for inquiry. I was interested in the comments of my right hon. Friend the Member for Reigate on this aspect of the matter. Second, it separates the factual stage of the inquiry from that of adjudication on the public interest and, therefore, meets the criticism that the Commission is at present both judge and prosecutor. In sum, there is no doubt that our proposals will be valuable and effective.

I come now to the question of action on the Reports of the Commission. Our usual and preferred method of acting on Reports is by seeking undertakings from the firms concerned. It would be quite wrong to suggest, as the right hon. Member for Battersea, North did, that because only two orders have been made under the 1948 Act all recommendations but two have been ignored. Nothing could be further from the truth. The Government have the responsibility of implementation. The Commission is an advisory body, and the Government have a duty thoroughly to study the recommendations made by the Commission. Our view is that, in general, action should be taken on the Commission's recommendations unless there are strong over-riding considerations to the contrary.

The two recent Reports about which my right hon. Friend has been quite unjustifiably criticised contained a total of eight recommendations. One is covered by the White Paper, one my right hon. Friend has under consideration, three are under discussion with the industry and three have already been implemented by Government action. It is quite wrong and improper to suggest that we have been inactive. I thought that the right hon. Gentleman's comments on the Restrictive Trade Practices Act, 1956, were particularly inappropriate. The number of agreements registered is 2,340. Of that enormous mass of agreements, a balance of only 430 are left undealt with; 1,505 have been com- pletely disposed of and the agreements terminated—a record of good and constructive progress.

I turn to the point about why we do not have earlier legislation, which is brought out very clearly in the Amendment. I suggest that criticism of the 1956 Act is about as relevant as a complaint that the 1948 Act should have looked 16 years ahead. The truth is that hindsight is very easy, but it is equally attractive whether it is made by people outside or inside the House. The history of this matter shows that we have acted, and acted steadily and sensibly. Indeed, the 1956 Act was the most far-reaching attack on restrictive trade practices made by any Government.

The hon. Members for Edmonton and Huddersfield, West asked why there should not be legislation during this Session. A short, simple Bill to enlarge the Commission, or to give it power to work in groups, would certainly have been feasible. But a Bill including more effective powers to remedy the mischiefs revealed in the Commission's Reports—to set up the new process of the Registrar, to deal with mergers and services—would be a very different matter. This new legislation will be comprehensive, lengthy and complicated following, as it will, the lines of the White Paper. But we shall certainly give it high priority in the next Parliament—and I repeat "we".

The major part of the debate has been about mergers. The hon. Member for Hillsborough referred to them in particular. This is a subject much clouded by emotion. Many people outside the House feel that there is something sinister about the whole business, largely because it is much misunderstood. The I.C.I.—Courtaulds affair received great publicity and was debated in this House. Many other mergers have aroused public interest—for example, the Daily Mirror's designs on Odhams Press. The fact is that there may be many good reasons for mergers, as was pointed out by the hon. Member for Edmonton and by my hon. Friends the Members for Worcester and for Bournemouth, West (Sir J. Eden). I do not disagree with the catalogue of good reasons for mergers suggested by the Leader of the Opposition on 29th June, 1959—as he is so fond of dates—in this House.

Mergers are only one way in which industry is adapting itself to technological changes and changes in demand. We cannot make a simple judgment, as the hon. Member for Blyth did, that all mergers are good or, as he preferred, bad. I say to my hon. Friend the Member for Bournemouth, West that the majority of them are highly desirable if the economy is to develop and to grow. But there may be a minority which are, or which could be, harmful—those that create monopolies, those that strengthen them and those which are designed substantially to reduce competition. Therefore, in our view, there should be powers of investigation by the Monopolies Commission at the direction and discretion of the Board of Trade. As my right hon. Friend said we should welcome prediscussion with the Board of Trade or, additionally or alternatively, with the Registrar. We shall closely and carefully define the conditions which the Commission should bear in mind in assessing where the public interest lies and its evaluation.

As the hon. Member for Hillsborough said, there has been great discussion during the debate about paragraph 25 of the White Paper. I agree with my right hon. Friend the Member for Reigate that our view of the matter is the most practical view, because any pre-merger registration system would involve great delays. Of that there is no doubt. It is not our intention to hold up mergers which may well be in the public interest.

Therefore, if mergers go through and are judged to be against the public interest, we shall certainly take power either to hold them up, if they have not yet fully gone through, or, if they have gone through, to unscramble them if they are proved to be against the public interest. As my hon. Friend the Member for Cheadle said, anything that the United States or any other country can do, we can do as well, if not better, in the United Kingdom.

The object of the Government in that regard and in regard to the publication of the White Paper is to stimulate competition and efficiency, without which our country, as one of the greatest trading nations of the world, cannot survive economically. This is the only way, as my hon. Friend the Member for Cheadle said, by which we can pay for social advance.

We are against malpractices or exploitation where they exist in industry and where they are not in the public interest. This is a complex subject. Even the definition of monopoly, particularly viewed, as I suggest that it should be, in international terms is problematical. It is for reasons such as these that we state, in paragraph 8 of the White Paper, our view that it would be wrong to introduce into the law any presumption that monopoly is in itself undesirable, without regard to the conditions under which it operates, or to the manner in which it conducts its business. It is true that improvements in the Act are required—for example, in the case of monopolies, strengthening the Government's powers to implement the Commission's recommendations or to deal with mergers and services. We want to deal with registration and, indeed, the enlargement of the Commission.

Similarly, however, the Restrictive Trade Practices Act, 1956, provides specific grounds on which the parties can plead that a restrictive practice is justified. We do not believe that as an instrument the Act requires a fundamental change of approach. It has secured the termination, as I have demonstrated, of many restrictive agreements. We believe that it has thereby promoted more effective trading conditions. Again, however, improvements are required—to deal with information agreements, for example, although there will be a procedure to clear quickly the trivial agreements, to deal with bilateral agreements and with agreements to like effect.

The White Paper is not in any way an exhaustive document. There is, therefore, no change of attitude by the Government either to monopoly or to restrictive practices. We shall seek to curtail or to prevent either when they militate against the general well-being of the economy We are after competition and efficiency. We recognise it is our clear duty to provide the economic conditions and the legislative framework in which both can flourish.

Our objectives are twofold: to ensure, again in the language of the White Paper, that the resources at the disposal of the nation can be used in the most effective way and to create a climate of opinion which, by effective sanctions, will refuse to tolerate restrictions on competition or curbs on innovation or efficiency. I only wish that I could say the same for Her Majesty's. Opposition.

When one reads the Amendment, which is signed by the leaders of the Opposition—the elders, as one might say, and some of them very elderly—it is difficult to believe that one is not in wonderland. This debate is an accusation that the Government are not strong or firm enough in dealing with monopoly—an Alice in Wonderland situation. The monopolists in this House are on the benches opposite.

They are the ones who would make it an almost criminal offence to compete. The most unsatisfactory monopoly of all, as my hon. Friend the Member for Hendon, North—[HON. MEMBERS: "Not Cheadle?"]—and as my hon. Friend the Member for Cheadle—[HON. MEMBERS: "Hear, hear."]—said, is a monopoly State buying enterprise, set up by hon. Members opposite.

The truth of the matter is simply this, that the Government are making good progress, have made good progress, and will continue to make it. I am sorry that the right hon. Gentleman the Leader of the Opposition is not here, because—[HON. MEMBERS: "Where is the Prime Minister?"]—because one of the questions asked was why the Government had only produced a White Paper. We published a White Paper on the whole of this subject, and we were right to do so, to define the subject, to take the view of the House as a whole—but I recall that the right hon. Gentleman was responsible—was he not?—or had some responsibility at the Board of Trade for publishing a White Paper on resale prices. Yet the Opposition had not the courage of their convictions in the Lobby a few weeks ago.

On the other hand, I must say that in a way I am quite glad the right hon. Gentleman is not here, because one never