Orders of the Day — Commission for Industry and Manpower Bill

Part of the debate – in the House of Commons at 12:00 am on 8th April 1970.

Alert me about debates like this

Photo of Mrs Barbara Castle Mrs Barbara Castle , Blackburn 12:00 am, 8th April 1970

I beg to move, That the Bill be now read a Second time.

The Bill sets up a new body—the Commission for Industry and Manpower—which will take over and develop the work of the Prices and Incomes Board and the Monopolies Commission. In doing so, it will strengthen the powers of public scrutiny not only over monopolies, but over the increasing concentration of market power in the hands of fewer and fewer firms. It will continue the vigilance of the Monopolies Commission in the field of mergers, while giving the Commission the opportunity, where the Government think it appropriate, to have a look retrospectively at how a merger has worked out in practice so that we can see whether the benefits anticipated have in fact been achieved.

It provides for the disclosure, where desirable in the public interest, of fuller information about a company's accounts, as recommended by the Monopolies Commission. It continues the invaluable work of the Prices and Incomes Board in scrutinising archaic pay structures, inflationary pay settlements, and all forms of the inefficient use of labour, while abandoning the statutory control of incomes to which the Opposition objected so vociferously.

In all this, the new body will be the ally of industry in protecting industrial users against discriminatory practices. It will be the stimulant of efficiency in both the public and private sectors, and the watchdog of the consumer against unjustified price increases. It will also rationalise the work of two bodies whose field of inquiry has tended increasingly to overlap—a rationalisation which has been recognised in objective quarters as an overdue, commonsense piece of streamlining.

It would, therefore, appear that the purposes of the new body, are common to all of us, and yet we have been warned that the Bill will be one of the most fiercely contested in the lifetime of this Parliament; that the Opposition will denounce it as a blow against industry, with the same fury as they once denounced the Industrial Expansion Act. I think that it is worth spending a little time examining why this should be so.

The House has always been united, in words at any rate, in the view that society needs protection against the abuse of market power through monopoly practices. It was a Labour Government who introduced the first Monopolies Act in 1948, and since then the legislation has gone through various modifications. But, in fact, from the very beginning, there has been a marked difference of approach between the two sides of the House. Hon. Gentlemen opposite have always been, in theory, the party of "competition"—and the right hon. Member for Leeds, North-East (Sir K. Joseph) has been making great play with this theme recently in a series of "keynote" speeches to which we have been treated in the last few weeks.

But, in fact, their attitude to concentrations of market power has always been "half-hearted and schizophrenic", to turn the right hon. Gentleman's own words of a year ago against him, because their instinct has always been to do too little too late.

Of course, the Opposition are always telling us that they struck great blows for competition when they set up the Restrictive Practices Court and took measures which effectively ended resale price maintenance, and these measures certainly were of real value to consumers, but, as these abuses were eliminated, firms sought other ways of reducing the impact of competitive forces and of consolidating their market power.

As the right hon. Member for Leeds, North-East has himself admitted, competition is not the natural state of industry—it is not a miracle ingredient running through private enterprise, making all its transactions dazzlingly white. On the contrary, when one line of defence against competition is removed from industry, it promptly develops another.

In saying that, I am not indulging in a piece of Socialist prejudice. The right hon. Member for Leeds, North-East himself admitted it to the Financial Times the other day, in an interview outlining Conservative policy towards industry and how life would be tougher under the Tories.

Having begun by making the routine obeisance to the achievements of the Restrictive Trade Practices Act and the abolition of resale price maintenance, he went on: Now some industries have retreated to more subtle operations, much harder to get at. Price leadership; very difficult to get at. Of course, he is right, and industry has adopted other devices, too, such as collusive tendering. When restrictive agreements had to be registered, we saw the emergnce of information agreements in their place—a development which we took power to control in our Restrictive Trades Practices Act, 1968. With the ending of resale price maintenance, a new practice has grown up among manufacturers of recommending resale prices, a practice which we are taking power to deal with in Clause 13 of the Bill, again as advocated by the Monopolies Commission. Again, the ending of restrictive agreements has undoubtedly stimulated the growth of mergers.

The price of competition is eternal vigilance by the Government. I could not put it better than the right hon. Gentleman the Member for Leeds, North-East himself did in a recent speech: Left to themselves, most businessmen would share the market and keep newcomers out. To maintain competition calls for determined, tireless Government action". Yet Her Majesty's Opposition intend to oppose the Bill on the grounds that it embodies too much Government action. Very odd! Apparently, their enthusiasm for competition is limited to speechmaking; their will to act has been exhausted by those two measures we hear so much about. They have shot their bolt.

The truth is, of course, that the Opposition have never had any great enthusiasm for the work of the Monopolies Commission. When they set up the Restrictive Practices Court in 1956, they cut the membership of the Commission down to a mere 10—all of whom except the chairman were part-time, with the result that its inquiries took years. On average, it took 4½ years to produce a report. The flow of references was reduced to a mere trickle, and it was not until the General Election of 1964 was imminent that they talked of reviving its work again.

Once again, it was left to a Labour Government to act, to enlarge the Commission, increase the number of references sixfold and halve the average time taken to report. But here again, the approach of the Opposition was a half-hearted one. They did not like our proposal to subject to the scrutiny of the Commission not only mergers leading to the creation of a technical monopoly—that is, control of one-third or more of the supply of any product or service—but also mergers involving firms of a certain size—that is, where assets of over £5 million were being transferred.

The Opposition liked it even less when we took power to hold up a merger pending an investigation by the Monopolies Commission; that sounded too much like effective action to them. And now, over this Bill, they are being equally equivocal. Apparently, they want to put yet another body between industry and Parliament. They want to set up a registrar of monopolies who would investigate the need for an investigation before a matter was referred to the Commission.