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Printed for the Cabinet. October 1955
CONFIDENTIAL
C.P. (55) 163
24th October, 1955
CABINET
Copy No. 63
MONOPOLIES COMMISSION REPORT ON CALICO PRINTING
MEMORANDUM BY THE PRESIDENT OF THE BOARD OF TRADE
The question of action to carry out the recommendations of the Monopolies Commission on the restrictive practices in the Calico Printing trade has been before the Cabinet several times. The last occasion was in June this year when I reported (C.M. (55) 15th Conclusions, Minute 4 (c) and Conclusion 3) that I hoped to secure the voluntary acceptance by the Federation of the most important proposals in the report. This endeavour has failed, and I am therefore asking my colleagues' approval to action under Section 10 of the Monopolies Act, 1948.
2. The principal recommendations of the Monopolies Commission report were that three practices of the trade should be discontinued:-
(a) The Percentage Quantum scheme whereby, if any firm in the trade secures a share of the annual total turnover larger than an allocated percentage, it has to pay over a proportion of the proceeds into a fund from which the less successful firms are compensated;
(b) an arrangement linked with and in effect forming part of the same
agreement whereby minimum prices are fixed and enforced; and (c) a separate redundancy scheme embodying an agreement that, when any plant or premises are disposed of, this should be done only under restrictive covenants prohibiting their subsequent use (including water rights) for calico printing.
3. My final proposal to the Federation was that they should voluntarily implement the first two recommendations but that, in respect of the third, the existing scheme should run its course, provided that no further restrictive covenants were imposed under it.
4. This whole business has been going on a very long time. The reference to the Commission was made in April 1951, and the Report was dated November 1953 and published in April 1954. After discussions with the trade and the Cotton Board, both of whom opposed the Commission's recommendations, I announced in the House of Commons on the 23rd February this year the Government's acceptance of the Commission's conclusions and its general agreement with the recommendations. There followed further discussions with the Federation who made certain counter proposals which, however, left untouched the essential features of the Percentage Quantum scheme. The Calico Printers' Federation have throughout been, rather obviously, playing for time and their latest communication, in reply to the proposal described in paragraph 3 and put to them over three months ago, was received only within the last few days. It makes no advance on their
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previous proposals. It states, however, that they consider redundanciaga in
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