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Clause 2

Volume 982: debated on Tuesday 1 April 1980

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ANTI-COMPETITIVE PRACTICES

Lords amendment: No. 1, in page 3, line 29, at end insert—

"(7) In this section ' the supply or securing of services ' includes providing a place or securing that a place is provided other than on a highway, or in Scotland a public right of way, for the parking of a motor vehicle (within the meaning of the Road Traffic Act 1972)."

10.20 pm

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

With this it will be convenient to take Lords amendment No. 37, after clause 21, in page 25, line 12, at end insert new clause B—

"B. In section 137(3) of the Fair Trading Act 1973 (definition of ' the supply of services') there shall be inserted after paragraph
(b) the following words:
'and
(c) includes the making of arrangements for a person to put or keep on land a caravan (within the meaning of Part I of the Caravan Sites and Control of Development Act 1960) other than arrangements by virtue of which the person may occupy the caravan as his only or main residence '."

These amendments cover an area of widespread concern among consumers using holiday caravan sites—a concern that has been echoed by hon. Members on both sides of the House.

The amendments were introduced by the Government to fulfil assurances given during proceedings in this House. In one respect, however, we have gone slightly further than our assurances require.

In the case of holiday caravan sites we have extended the provisions not only of the Bill but also of the Fair Trading Act to allow matters concerning holiday caravan sites to be considered by the Director General of Fair Trading. We have done that because we thought it at least as important that the Director General should be able to exercise his consumer affairs functions in that area as that he should exercise his new powers under the Bill.

The Director General will now be required to monitor practices in the holiday caravan industry in the same way as he monitors practices in the supply of consumer services. He will also be able to encourage the preparation of codes of practice in the industry and continue the work that I have begun in that area.

We have not made the same provision in relation to car parks, as we believe that that would have implications for local authorities that need to be more carefully considered. We shall, however, keep in mind the possibility of such action in future legislation.

Having pressed for amendment in the law to protect holiday caravan owners, I am glad to see these amendments appearing from another place.

It might shorten debates on other matters if I put a couple of general questions to the right hon. Lady that do not strictly arise out of the amendments.

First, when will the Act come into force? I believe that most of the measures will come into force as a result of the commencement order that the right hon. Lady will make. It will be helpful to the House if she gives an idea of when all the provisions will come into force.

Secondly, how does the right hon. Lady intend to respond to problems raised by hon. Members? The Bill gives almost all the initiative to the Director General of Fair Trading. It would be unsatisfactory if the right hon. Lady were to tell us, as she has done on occasions in the past, that these are matters for the Director General. I appreciate that, for example, a reference on investigation of a practice undertaken by a car park or a particular caravan site owner will have to be initiated by the Director General. However, it would be extremely naive to fail to understand that it is possible for a Minister to raise matters with the Director General and make known to him the concern of hon. Members about whether a subject should be investigated. It would be unsatisfactory if the Minister said that the matter was entirely within the province of the Director General.

Can the right hon. Lady assure us that she will be willing to discuss these matters in the House and convey to the Director General the feeling of hon. Members if there is a subject that we wish to press? It is a weakness of the Bill that there is no ministerial initiative. I am suggesting the next best thing.

The caravan amendment is welcome. It not only enables the Director General to investigate practices on a holiday caravan site as being anti-competitive; as I understand it, it considerably widens the powers of the Director General to deal with holiday caravans under the substantial provisions of the Fair Trading Act 1973. He will be able to deal with unfair practice and can, for the first time, refer the case of a caravan site to the Monopolies and Mergers Commission, which he has not been able to do until now. If the right hon. Lady confirms that, it will be welcome. I see almost every holiday caravan site as being a mini-monopoly. For those on the site it is a monopoly. In practice, there is nowhere else that they can go. They are faced with a de facto monopoly position.

It would be a powerful aid to holiday caravan owners if there were an assurance that the Director General would be willing to refer, if need be, one caravan site as a mini-monopoly position.

My hon. Friend will remember that when he held responsibility for these matters we had long discussions about our constituents and the treatment that they were receiving. Is he aware that the exact definition of a monopoly is absolutely crucial to our constituents who, in certain cases which have not been isolated, have been badly treated? Will he press the point that, in our opinion, if a single owner is behaving in an unacceptable manner it is a matter that is proper for the Monopolies and Mergers Commission?

I agree with my hon. Friend. I hope that the Minister will agree. When these amendments are passed, it will be possible for the Director General to say that he will refer the position of a single caravan site to the commission for investigation. Even though it is a limited local monopoly, it is a monopoly and his powers of reference exist.

I think that the reform is long overdue. In the past, the Fair Trades Act 1973 prohibited the Monopolies and Mergers Commission from considering matters of land rather than the supply of goods and services. In my experience as a Minister and from my dealings with constituents and hon. Members. I have found that often a caravan site that should be a haven and a pleasure is nothing but a pool for the operation of sharks.

I shall give one or two examples of the matters that I would like to be considered. There is the anti-competitive practice of preventing a caravan owner from selling his caravans, restricting the market, and allowing no sale on the site. There is the unfair practice of evicting people from sites in a matter of weeks or days. That must be unfair in a mono poly position. People deserve some redress.

There is the tied sale, where a person can buy a caravan only from the site owner. That must be an anti-competitive practice, especially when a condition of the sale is the payment of the maker's recommended price. Everybody knows that makers' recommended prices are well above the true market price. I have seen gross incursions on people's rights, in cases where they are compelled to let their caravans during the summer to someone nominated by the site owner. I have given four examples, but I could cite many more.

The amendment is welcome. I hope that the Minister will confirm my understanding that she is opening up not only an investigation into the Competition Bill but a mini-monopoly reference.

Those are the only questions that I wish to put to the Minister, except for those at the beginning of my speech about the way in which she will respond to matters that could be the subject of competition references and investigations. Will the right hon. Lady give us some idea of when the Act will come into force?

I shall not detain the House for more than a few seconds. I wish to emphasise the points made by my hon. Friend.

A number of my constituents with holiday caravans have been subjected to the most appalling exploitation. They found themselves quite unable to find any redress. I rarely find myself in a position in which I can congratulate the Conservative Government on their actions. However, the action to make holiday caravans amenable to the Director General and the Monopolies and Mergers Commission is a real step forward.

The scope of the commission in intervening in this area is crucial. Some holiday caravan operators are the most disreputable people in Britain. It is an area in which the quickest buck is available. Consumers deserve far more protection than they have received in the past. I hope that when the right hon. Lady replies she will give my constituents, and those of many other hon. Members, a reasonable assurance that they will be given real and not phoney protection.

10.30 pm

The Department of Prices and Consumer Protection was absorbed by the Department of Trade. We are considering monopoly practices that, presumably, will be the responsibility of the Department of Trade, as well as of the Director General of Fair Trading. When the Bill receives Royal Assent, what will be the position of hon. Members who wish to question the Department on the retail price index and prices generally? It is important for us to know before the Bill is enacted. It is a question that has been asked on a number of occasions and there has been an element of evasion.

I am sure that the Government and Conservative Members are aware that inflation is one of the issues that concern the general public. If we are to have a Minister for Consumer Affairs, the public should be given some protection from price increases. If that Minister is to be in a Department in which someone else deals with prices, the public will feel sadly let down.

I underwrite the comments of my hon. Friend the Member for Norwood (Mr. Fraser). My hon. Friend said in Committee that it would be too easy for the Minister for Consumer Affairs to field questions on the activities of the Director General of Fair Trading by saying that the answers to questions raised by Labour Members were within the Director General's orbit and not to be responded to by the Minister. I hope that the right hon. Lady will tell us that she will endeavour to be helpful at the Dispatch Box when questions are raised on individual references that are causing concern and that cause hon. Members to hope that a Government Department will move in to take action to resolve the area of concern.

Yesterday at Question Time my hon. Friend the Member for Cannock (Mr. Roberts) asked the Secretary of State for Trade
"when he expects the Director General of Fair Trading to come to a decision on alleged resale price maintenance referred to in questions to the Minister of State, Official Report, 28 January, c. 526."
The right hon. Lady replied:
"This is a matter for the Director General of Fair Trading, who will no doubt be reaching a view in due course."—[Official Report, 31 March 1980; Vol. 982, c. 5.]
It may be a matter for the Director General, but there is a duty on the Minister to be far more communicative and to tell the House when it can expect a response to cases that have been drawn to her attention and to which public attention has been drawn. It would be unfair to put hon. Members in a position in which they had to tell their constituents that the only answer they could obtain from a Government Minister was that the matter was being dealt with by an outside body, perhaps even unaccountable to the House of Commons.

I am saddened by the fact that the Lords amendments include only references to caravan sites. I made what I believed to be a strong case in Committee and again on Third Reading on the question of the leases of property companies in retail precincts. I had hoped that the noble Lords would raise the matter, because there is concern among a number of people. That did not happen. I hope that when the right hon. Lady returns to the House in a few months' time with further competition legislation, as she promised in Committee, she will bring forward a Bill that can lead to action being taken in this important area.

With the leave of the House, I shall reply to the questions that have been put. I am naturally pleased, but not surprised, that hon. Members on both sides of the House should have welcomed so warmly these amendments from the Government, which go not only as far as we were required to go by the assurances that we gave during proceedings in this House but a good deal further than any Government have ever gone to give protection to users of holiday caravan sites. I thought that I had made it clear, but I will reiterate it, that not only are we making it possible for the Director General of Fair Trading to investigate anti-competitive practices in relation to site operators; we are amending the Fair Trading Act so that the practices that operate can be dealt with in the same way as those of other suppliers of consumer goods under the Fair Trading Act. This means that in certain circumstances they could be pursued in the Restrictive Practices Court if a person, after being warned by the Director General, habitually offended.

I can confirm to the hon. Member for Norwood (Mr. Fraser) that monopoly references can be made in the way that he described. I can also confirm that it might be possible for a monopoly reference to be amended in the case of a single-site operator. The abolition of the Price Commission and provision for references of nationalised industries will come into effect immediately after Royal Assent. Most of the remaining provisions will come into effect on 1 May. The anticompetitive provisions will come into effect as soon as the exemption order is ready. This will not be long delayed.

Both the hon. Member for Norwood and the hon. Member for Workington (Mr. Campbell-Savours) were unfair in their remarks about any reticence on my part at Question Time yesterday or on previous occasions about communications that I was having with the Director General of Fair Trading. When a matter comes to me—from hon. Members or from outside—which I believe merits the attention of the Director General of Fair Trading, that is precisely what it gets. I am in touch with the Director General on these matters on a continuing basis. I am kept informed when he reaches a decision. Opposition Members would not expect him to give me a blow-by-blow description. In any case, some of the matters on which questions are raised may be sub judice.

The hon. Member for Workington gave the impression that his hon. Friend the Member for Cannock (Mr. Roberts) got a very short and abrupt answer at Question Time yesterday. His hon. Friend got an extremely long answer from me—almost as long as the hon. Member for Workington's supplementary question, which would no doubt fill a short novel.

I answer questions as fully as possible. Yesterday I went a good deal further than I needed about the practices that it is possible to look at and the practices that the Director General is examining which have been referred to him in letters from hon. Members and others. There is complete accountability.

I hope that I have satisfied Opposition Members on the issues that they raised. I shall not attempt to reply to the hon. Member for Aberdare (Mr. Evans) because I should be out of order.

Question put and agreed to.

Lords amendment: No. 2, in page 3, line 29, at end insert—

"(8) For the purposes of this Act any question whether, by pursuing any course of conduct in connection with the acquisition of goods or the securing of services by it, a local authority is engaging in an anti-competitive practice shall be determined as if the words 'in the course of business' were omitted from subsection (1) above; and in this subsection 'local authority' means
  • (a) in England and Wales, a local authority within the meaning of the Local Government Act 1972, the Common Council of the City of London or the Council of the Isles of Scilly,
  • (b) in Scotland, a local authority within the meaning of the Local Government (Scotland) Act 1973, and
  • (c) in Northern Ireland, a district council established under the Local Government Act (Northern Ireland) 1972."
  • I beg to move, That this House doth agree with the Lords in the said amendment.

    The amendment honours another commitment made in Committee to extend the Bill's scope to restrictions of competition arising in connection with the acquisition of goods and the securing of services by local authorities, whether or not such activity is carried out in the course of business.

    The intention is not that the amendment should undermine the widely recognised practice of selective tendering. The reasonable application of such procedures by local authorities offers real benefits to both authorities and their suppliers. However, the amendment offers the opportunity of an investigation and action where it is thought by the Director General that the selective lists may be unduly restrictive. That is a reasonable approach.

    The Government do not believe that it is appropriate to have investigations into tendering systems by local authorities when they are operated in accordance with principles accepted by the Government. However, under the amendment, any abuse of such procedures can be examined.

    I am grateful that the amendment has finally appeared. It represents an interesting example of the way in which democracy works. When the Bill was published, I had a casual conversation with someone who raised the problem. I promised to refer to it in Committee. The Minister responded, and the House of Lords has dealt with the matter. It is good that Parliament operates in such a way.

    Question put and agreed to.

    Lords amendments Nos. 3 to 54 agreed to.