Clause 7. — (Application of General Provisions About Mergers.)

Orders of the Day — Monopolies and Mergers Bill – in the House of Commons at 12:00 am on 2nd August 1965.

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Lords Amendment No. 6: In page 13, line 36, leave out "the principal" and insert "this".

Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North

I beg to move, That this House doth agree with the Lords in the said Amendment.

It would be convenient to consider at the same time Lords Amendments Nos. 7, 8 and 9.

Mr. Deputy-Speaker:

If the House so pleases.

Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North

These Amendments are purely drafting. They correct verbal imperfections in the Bill which arose from the fact that a number of Amendments were made during the proceedings in this House, and that not all the consequential verbal Amendments had been fully tracked down by the time the Bill left this House. This is an occasion when the other place has performed a useful service in giving us time to effect these verbal Amendments.

Question put and agreed to.

Subsequent Lords Amendments agreed to.

Lords Amendment No. 10: In page 15, line 25, at end insert: ( ) In considering for the purposes of section 6(2) above whether the fact of enterprises having ceased to be distinct enterprises operates or may be expected to operate against the public interest, the Commission shall take into account all matters which appear in the particular circumstances to be relevant and have regard (amongst other things) to any matters to which the Board may from time to time direct them to have regard; and the Board shall publish any direction under this subsection in such manner as they think fit.

Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North

I beg to move, That this House doth agree with the Lords in the said Amendment.

This Amendment contains a little more substance than the previous one. It gives the Board of Trade power, if it wishes, to give directions to the Commission indicating what should be the criteria according to which it should judge whether a merger was contrary to the public interest or not. Of course, this has never been done previously by the House, or the Board of Trade empowered by the House, in the matter of the examination of monopolies by the Monopolies Commission. The Commission has been called upon to ascertain certain facts and then, in the light of its own understanding and wisdom, to judge whether things done and actions taken by the firms in question have been in accordance with the public interest. It has interpreted that entirely at its own discretion.

It has now been suggested, and it was argued in the course of proceedings on the Bill, that we ought not to follow that precedent, but should move further towards the precedent of the Restrictive Practices Act, in which Parliament laid down for the courts certain precisely defined "gateways", as they are called, according to which the court should judge.

Our original view was that the Commission should follow the precedents which had previously applied to it. However, a compromise has been evolved in another place by which the House would not lay down hard and fast criteria for the Commission, but power to do so would be given to the Board of Trade if, in the light of experience and knowledge of mergers, not of monopolies, it was thought desirable to lay down criteria.

Photo of Sir Peter Emery Sir Peter Emery , Reading

The right hon. Gentleman was right to say that during the proceedings on the Bill we had considerable discussion about criteria, or "gateways" or possible directions by the Board of Trade to the Monopolies Commission on the way in which to deal with relevant facts which might arise. I am quite clear about what I would regard as being the criteria or gateways which might be necessary or which might arise, but one thing we have not had from the Board of Trade—and I am not now trying to be difficult—is what it regards as necessary. We do not have any idea of the criteria or gateways which the Board of Trade has in mind.

Before we pass from the Amendments, therefore, I hope that the right hon. Gentleman can tell the House what criteria or gateways he has in mind, because we should very much like to know what the Government have in mind and what they envisage as being possibly necessary and being the sort of cases in which these powers would be used.

Photo of Sir Harmar Nicholls Sir Harmar Nicholls , Peterborough

If the Board of Trade took power to suggest criteria, who would have the last word? Would the last word be with the Board of Trade if it chose to intervene and would its criteria have to be accepted by the Monopolies Commission, or could the Commission take into account what the Board of Trade said, but still please itself if it thought differently?

Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North

By leave of the House; the answer to that last question is that if the Board of Trade chose to act in this way, the last word would be with the Board of Trade. It would give a direction to the Commission which the Commission would not statutorily be able to disregard.

I should be delighted to enter into the discussion of criteria which the hon. Member for Reading (Mr. Peter Emery) opened, and I can think of a number of considerations. However, it would be unwise to give them off the cuff at this stage of these debates. The whole purpose of the Amendment is to enable experience to be gained by the House, the Commission and the Board of Trade of the workings of these provisions. In the light of that experience, it may emerge that criteria A, B and C, or X, Y and Z, are appropriate for one sort of investigation. That is the purpose of the change. However, if I were to mention A, B and C, that would immediately imply that other possible criteria were excluded. I think it would be unwise to do that and therefore, while I understand the hon. Gentleman asking the question, I think it would be better to leave it at that at the moment. Clearly the Board of Trade would announce these criteria publicly, and they would be known to the House when this power was used on any future occasion.

10.30 p.m.

Photo of Mr Patrick Jenkin Mr Patrick Jenkin , Wanstead and Woodford

I intervene only to query whether the right hon. Gentleman the President of the Board of Trade was right in the answer he gave to my hon. Friend the Member for Peterborough (Sir Harmar Nicholls). The words of the Amendment, which it is sought to insert into the Bill say: … the Commission shall take into account all matters which appear in the particular circumstances to be relevant and have regard (amongst other things) to any matters to which the Board may from time to time direct them to have regard. … It does not seem to me that this is, in any sense, exclusive, that in that sense the Board of Trade has the last word. It is merely that the Board of Trade has the power, if the Amendment is accepted, to direct the Commission's attention to particular circumstances, particular facts which appear to the Board of Trade to be relevant at the time. In those circumstances, it would not seem to preclude the Commission saying, "All right, we will have regard to this, but having examined the facts, it seems that these are relatively minor factors, compared with X, Y and Z, which may appear to be more important, and on these grounds we make our recommendations."

I wonder whether, in those circumstances the President of the Board of Trade might be prepared to consider the point raised by my hon. Friend the Member for Peterborough, because it does not seem that he covered that quite correctly in his reply.

Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North

With the leave of the House, I should like to say that I think there is a misunderstanding. I did not say that the Board of Trade would, by giving such a direction, prevent the Commission from having regard to other factors. I was asked by the hon. Gentleman the Member for Peterborough (Sir Harmar Nicholls) whether the Board of Trade would have the last word. It would have the last word in this, since, if it directed the Commission to have regard to factors A, B and C, then the Commission would have to have regard to those factors and could not ignore them. It does not mean that it would be outside their power to have regard to factors X, Y and Z also. I think that is clear from the Amendment, and that is what I intended to convey.

Photo of Sir Harmar Nicholls Sir Harmar Nicholls , Peterborough

The right hon. Gentleman said that the criteria would be known to Parliament before the Commission could take the factors into account. Would Parliament have a chance of amending that point of view before it was passed on to the Monopolies Commission?

Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North

No, Sir. It was not provided in this particular case that the Order should be laid before Parliament. The words of the Amendment are: … and the Board shall publish any direction under this subsection in such manner as they think fit. It would, therefore, be published, and Parliament could take any action it wished.

Photo of Sir Peter Emery Sir Peter Emery , Reading

I have slightly misunderstood the President of the Board of Trade, because it seemed to me that he said that this would be announced to Parliament. I should like to press him on this. I think that this ought to be announced to Parliament because it will be quite a major point and we are stumbling over something which is in the mind of the Board of Trade.

Photo of Sir Peter Emery Sir Peter Emery , Reading

I see by the nods of the Minister of State that I am right on this. It would have been the intention of the Board of Trade to let Parliament know about this Order. I believe that the powers are being left with the Board of Trade—I think we were able to debate it. I would urge upon the President of the Board of Trade that it is essential that Parliament should be informed.

Photo of Mr Douglas Jay Mr Douglas Jay , Battersea North

Certainly that would be done at the most convenient moment.

Question put and agreed to.