CAB129-78 — Page 224

Printed for the Cabinet. December 1955

Page 224

SECRET

C.P. (55) 196

10th December, 1955

CABINET

Copy No. 63

LEGISLATION ON RESTRICTIVE PRACTICES

MEMORANDUM BY THE LORD CHANCELLOR

The report of the Monopolies Commission on Collective Boycott and Exclusive Dealings was published on 30th June. The Cabinet will recall that this report was one of great public interest and controversy, particularly since it contained, in majority and minority reports, contradictory views on whether restrictive practices involving collective discrimination should be prohibited, or whether they should be allowed to continue pending case by case examination under the existing arrangements.

2. The Government were under great pressure to give a clear indication of the principles on which they proposed to deal with the practices which were the subject of the report, and on 12th July the Cabinet approved the general line of policy which the Government speakers would follow in debates which were to take place in both Houses of Parliament (C.M. (55) 22nd Conclusions, Minute 6).

3. This course was, broadly, a compromise between the recommendations of the majority and those of the minority of the Commission. It is proposed that legislation should be introduced to require restrictive practices (not limited to collective discriminatory practices) to be registered, and for them then to be subject to case by case examination by some tribunal before which the onus of proving that the practice was not contrary to the public interest would be placed on the industrialist concerned.

4. The Committee of Ministers which was set up under my chairmanship to consider this report of the Monopolies Commission has since been working out the main lines of the legislation necessary to implement the Government's announced policy.

5. The statements of Government policy which were made in the debates in Parliament in July left open two crucial and related questions-

(i) The criteria by which restrictive practices were to be judged, or (in other words) how the justiciable issue which was to be put to whatever tribunal was chosen should be defined.

(ii) The nature of the tribunal which would have jurisdiction to examine

restrictive practices.

The guidance of the Cabinet on both of these issues is sought. (There may be other issues, such as a new procedure for enforcing the maintenance of resale prices fixed on an individual basis, which we shall need to bring to the notice of the Cabinet, at a later stage.)

Definition of the Justiciable Issue

6. The difficulty here is that, whatever the nature of the tribunal, it is not sufficient simply to ask it to decide whether a particular practice is, or is not, "contrary to the public interest" because such a question is too vague to answer. But when we try to define the issue to be put to the tribunal, it becomes clear that its decision must involve it in making judgments on questions of economic policy which (to use a fashionable term) are judgments of value and not of fact or law.

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