§ Order read for resuming Adjourned Debate on Amendment to Question [8th November], "That the Bill be now read a second time."
§ Which Amendment was, to leave out the word "now," and at the end of the Question to add the words "upon this day three months."—[Sir J. Walton.]
§ Question again proposed, "That the word 'now' stand part of the Question."
§ Mr. HERBERT SAMUEL
On a point of Order. I make no apology for referring again to a point of Order on the financial aspects of this Bill, because fresh light has been thrown upon the matter which was raised last Thursday by some statements made by Ministers in the Debate on the Second Reading of the Bill, and also because of the great importance of the matter from the point of view of precedent. The fourth clause of the agreement which is embodied in the Schedule of the Bill imposes on a public officer, the Coal Controller, the duty of paying certain sums by way of profits to certain coal-owners. My right hon. Friend the Member for Dewsbury (Mr. Runciman) on 7th November asked the Chancellor of the Exchequer:Whether, in any eventuality, the guarantee of profits contained in paragraph 4 of the Schedule of the Coal Mines Control of Agreement (Confirmation) Bill may impose a charge upon the Exchequer?The Home Secretary, answering on behalf of the Chancellor of the Exchequer, said:No, Sir; the Government are advised that the guarantee referred to cannot in any circumstances impose a charge upon the Exchequer"[OFFICIAL, REPORT, 7th November, 1917, col. 215o, Vol. XCVIII.]But in debate upon the Bill the President of the Board of Trade, the Minister in charge of the Bill (Sir A. Stanley), said:It is expected, as far as anybody can forecast in a matter of this magnitude, that the sum received from the excess profits will be at least sufficient to compensate those whose profits have fallen, but if that amount is not sufficient, then it will be necessary for us to come to Parliament and ask that the deficit be made good either by a Vote of Credit or in some other way as may be agreed upon."[OFFICIAL REPORT, 8th November, 1917. col. 24[...]6, Vol. XCVIII]That is to say, in the opinion of the Board of Trade, that guarantee may in certain eventualities impose a charge upon the Exchequer. The Parliamentary Secretary to the Board of Trade (Mr. Wardle), 68 speaking also on the Second Reading, said:If there is a deficit then, having ratified this agreement, the House of Commons would be responsible to the Coal Controller for the money."—[OFFICIAL REPORT, 8th November, 1917, cols. 2463–4, Vol XCVIII.]And he developed that point. My point is that there is implied in this Bill a contingent guarantee, and that in certain circumstances the Exchequer must be called upon to provide certain funds. It is not proper that guarantee should be merely implied in the Bill. It ought to be put explicitly in a Clause of the Bill. There ought properly to be a Clause printed in italics, not of course in the Schedule, but in the Bill itself, providing, if the funds in the hands of the Coal Controller are not adequate to furnish the guarantee under the agreement, that the necessary funds needed to meet that deficiency will be made good by Parliament. I do not suggest that it is necessary that a Financial Resolution should be moved at this stage before the Second Reading, but I do suggest, with all respect, that the Bill will not be a complete measure in Committee unless a Clause of that kind is inserted, and unless before the Committee stage is concluded a financial Resolution is passed authorising such a Clause in Committee of Ways and Means.
§ Mr. SPEAKER
I have no reason to doubt the accuracy of what the right hon. Gentleman has said, but it does not seem to be a matter for me. It is a matter for the draftsman and the promoters of the Bill. If they think that the chances of the guarantor being called upon are so infinitesimally small that they are really negligible, there does not seem to be any necessity for a Resolution in Committee of Ways and Means. If, on the other hand, there is a possibility or a probability that the guarantor will be called upon, of course, the measure would be more complete if the contents of it were such as the right hon. Gentleman has suggested. I have no inside knowledge of what this fund is likely to be, or what the drain upon it is likely to be. It seems to me a matter which must be left entirely with those who have that knowledge and are, therefore, in a better position to judge of the likelihood of the guarantor ever being called upon.
§ Sir F. BANBURY
Might I ask you very respectfully a question upon another Clause in the same direction? Paragraph 3 directs that the money shall be paid to 69 the Commissioners of Inland Revenue, but there is nothing in the Bill which directs the Commissioners of Inland Revenue to do anything with it. I have looked up the Exchequer and Audit Act of 1866, and I believe under it the Commissioners of Inland Revenue are bound to pay the money so received into the Consolidated Fund.
§ Mr. SPEAKER
I have also looked up that Section, and I think the right hon. Baronet would have quoted it if there had been anything in his point. If he looks at it a little more closely he will find, I think, that it does not require the money to be paid ino the Consolidated Fund.
§ 4.0 P.M.
§ Mr. PRINGLE
The Bill was under discussion for some time on Thursday, and the few hon. Members who were then present were in a position to judge how unsatisfactory was the information which was at the disposal of the House. We had two Ministerial statements. We had a statement from the President of the Board of Trade (Sir A. Stanley) and at the conclusion of the Debate we had a statement from the Parliamentary Secretary (Mr. Wardle), but the explanations of these two Ministers were so conflicting that it was obviously necessary, before giving a Second Reading to this important Bill, that the House should be better advised on the matter, and it is fortunate that on such a complex and technical matter the House should now have the advantage of the services of the Solicitor-General. This Bill raises extremely important points, both with reference to this House and with reference to the interests of the whole of the community. In its present form it purports to be a Bill confirming an agreement between certain parties which is to bind the whole of the coal industry in this country, but when it is examined it is found that it is an abuse of terms to describe it as an agreement which binds the industry. It is an agreement signed by two persons representing on the one hand the Mining Association and what is called the Consultative Committee, and on the other hand the Coal Controller, but neither of the two first-mentioned have any authority whatever to bind the coal industry of this country. It has been stated more than once in Debate that a very large proportion of those who are interested in this industry and who are affected by this Bill were not consulted in relation to the agreement, and were, indeed very 70 imperfectly informed regarding it. One of the associations was quoted by the hon. Member for Sheffield (Sir S. Roberts) as giving its consent, although it did not understand the agreement, and I have information from Scotland that a very large proportion of the coal masters there had no knowledge of the agreement whatever at the time it was concluded. Consequently, it is an abuse of terms to describe this as a Bill confirming an agreement, and to legislate regarding it by the method of placing it as a Schedule in the Bill. The real object of this Bill is to apply the terms of an agreement of other people who are not bound by it. If that is the object, the Government has no right to place this agreement in the Schedule. It ought to include the terms of the agreement in the body of the Bill itself, so that the House may have an opportunity of considering all the provisions individually and amending them, if it so desires. What is the situation? In its present form the agreement is the Schedule to the Bill, and this Schedule cannot be amended, as has been ruled from the Chair; indeed, Mr. Speaker has said that this agreement is similar to a treaty between this country and another foreign State, and that the House is bound to either accept or reject it. In the course of further Debate it was admitted that the only course open to the House, if it desired to amend this Bill, was to introduce Amendments in the body of the Bill itself with reference to the individual paragraphs of the agreement. Obviously, such a course is in the highest degree inconvenient. You will have a series of new Clauses proposed in the Committee stage suggesting that particular paragraphs of the agreement should be withdrawn and other paragraphs substituted in their place, or Amendments to the effect that certain words are to be omitted from certain paragraphs and other words substituted for them. Consequently, you will have the most perplexing system of cross-references imaginable if this agreement is to be amended, as I believe it is necessary to amend it, if it is to pass this House in a satisfactory form. The consequence of this procedure will be that you will have the most perplexing form of legislation it is possible to devise. I do not believe that in relation to any Public Bill there is any precedent for this method of procedure.
It is true that in the course of the War we have had other cases in which Bills intro- 71 duced into this House have been founded upon negotiations. That was so in the case of the original Munitions of War Act, but in that case the terms of the negotiated agreement were embodied in the Bill itself, so that the House had a perfectly free hand in a clear and straight forward way to amend that agreement. That was an agreement made with representatives of different interests. It did not profess to bind the whole of the interests. The Government desire to have this agreement in the form of legislation so that all the interests concerned shall be bound. Why do they not, in the present case, adopt the same procedure and present this agreement in such a form that the House would have complete control over it, and would be able to amend it in an intelligible way? The only reason I can see for the failure to do this is that the Government, by this Agreement, sought to conceal from the House and from the country what they were actually doing. What are they actually doing? They are providing under this Bill for the imposition of additional taxation upon those coal-owners who earn excess profits, in order to secure the payment out of this fund to other coal-owners of sums which will either entirely or partially make up the losses which those coal-owners will incur as a result of the control exercised by the Government. That is the object. But the Agreement is so framed as to conceal from the House the fact that it is imposing additional taxation. In effect, here we are increasing on one interest the Excess Profits Duty under the Budget by 15 per cent. Whatever form that takes, no matter whether technically it is outside Standing Order 71, which deals with taxing measures and renders it necessary to introduce them by a Resolution in Committee of Ways and Means, the House should scrutinise any such proposal with the greatest care. It is true that in this Bill you have no mention whatever of a tax, a charge, or even of a levy. Paragraph 3 of the Schedule is drawn with the utmost skill in order to conceal this fact, and that is why I think that paragraph beats the record as a model of legislative obscurity. I should like to read it to the House. It says:The owner of an undertaking—that is a coal mine—shall be entitled to retain the profits thereof.72 That is the leading Clause. Then it goes on to say that he shall not,except that if in any accounting period the profits exceed the profits standard by more than the amount mentioned in Section thirty-eight (1) of the Act, the owner shall be entitled to, retain only so much of those profits as is equal to the amount of the profits standard plus the amount so mentioned,. with the addition thereto of an amount equal to one-fourth part of such excess remaining after the deduction there from of a percentage equal to the rate of Excess Profits Duty for the time being in force, and the balance of the profits, less the amount paid or payable for Excess Profits Duty in respect of the accounting period in question, without deduction there from of any set off in respect of any other period, shall be paid by the owner to the Commissioners of Inland Revenue as hereinafter provided, and the sums so payable by the owner are in this Agreement referred to as 'coal mines excess payments.'The effect of this paragraph is, in the case of owners of coal mines who earn excess profits, that instead of their being able to retain 20 per cent. of the excess profits they will be able to retain only 5 per cent. If the draftsman of that paragraph had desired to make clear what he intended to do he would never have chosen. the phraseology I have just quoted. Indeed, the only possible justification for that phraseology is that he intended to conceal from the House of Commons, when it came to deal with the agreement, what actually was being done and to keep it outside the Standing Order. He has, indeed, kept it outside of the Standing Order, but if it is outside the Standing Order it necessarily behoves us here to see that an expedient of this kind, which is, as it were, driving a coach and four through the Rules of Procedure of this House, receives the closest scrutiny, because this draftsman has invented a method under which any private Member of this House can impose taxation.
§ Mr. PRINGLE
Yes, he can. He has only to follow this example and he can impose a charge on any industry by means of a Private Bill in this House. It will be very useful, when the piping times of 73 peace come again, to those of us who sit on the Back Benches to be able to deal with finance in a freer way than was possible before the War. That undoubtedly is the effect of the method followed. It is possible now, by Amendment in Committee, to provide that the whole of the 20 per cent. shall be taken and not the 15 per cent. That is the condition to which the astute Government draftsman has reduced the financial forms of this House. When you have a result of this kind the House of Commons should examine what is being done in the most careful way. I go on to examine the subject matter of this legislation. I do not desire to discuss this Bill from the point of view of the interests of the coal-owners. That is the least important aspect, although, as a matter of fairness and justice, those representing the coal-owners here are entitled to complain that taxation is imposed upon them in respect of excess profits far exceeding that imposed on other classes of the community, with the single exception of shipping. They are entitled to ask for justice and to say that if the 80 per cent. duty imposed by the Chancellor of the Exchequer upon excess profits—which the House only recently adopted as a fair measure of taxation of excess profits—is to be discarded in relation to them, they have strong grounds for asking why they should be selected for this penal taxation, and why, if 90 per cent. is a fair measure of taxation in their case, others are to be exempted from it? Not least, they have a right to ask why this treatment should be meted out to them, when those who are supplying a large part of their raw material are going scot-free from all Excess Profits taxation? We know, for example, that one thing which has contributed, perhaps more than anything else, to the increased cost of coal to the consumers of this country has been the increased cost of the materials that are used in that industry. Let me take pit wood as an example. The cost of pit wood has gone up since the beginning of the War by 700 per cent., yet those owners of woods in this country, who are reaping the benefit of these monstrously inflated prices for pit wood, are escaping excess profits taxation altogether. We are entitled to ask that this injustice and this inequality should be rectified when these, exorbitant terms are being placed upon, the industry.
74 I said that I was not going to deal with the Bill specially from the point of view of the mine-owners. The real question we have to consider is, what is the effect of this Bill upon the industry as a whole, and particularly upon the interests of the consuming public? The main question before us in this House is how will it affect the production of coal. We are told now and again that one factor is the vital factor, that one industry is the jugular vein, that food is the most important factor in the War, and so on. If we regard this War, as we are bound to regard it, as a war of machinery, it is obvious that the production of coal is hardly second to any other factor bearing upon the successful prosecution of the War on the part of the Allies. The main contention I am going to put forward is that this Bill is going to decrease the production of coal, and, by decreasing the production of coal, is going to affect adversely every individual consumer in this country, and, at the same time, affect adversely both our own national effort and the whole of the Allied effort in the War. The President of the Board of Trade, in the course of his speech on Thursday night, said that as a result of the control there was more coal available in London at the present time than last year. That seemed to most people a very remarkable statement. I have heard it questioned by some who ought to know something about it. There is no doubt, whatever may be the actual fact regarding London, that at the present time, in many centres the coal available for distribution is by no means equal to what it was at this time last year.
It is obviously perfectly natural that such a state of things should arise out of the arrangements which we are asked to sanction in this Bill. You, indeed, make it, no one's interest to produce coal. You really discourage production. You are placing a bonus upon the unprofitable management of coal mines. An hon. Member who can speak with greater authority upon the production of coal than I can pointed out on Thursday that that would inevitably be the result, because under this Bill there is going to be no profit accruing to any owner for the careful and productive management of his mine. He might not object to that if this deprivation of profit was going to mean that more money was going to the Exchequer, but it is simply for the purpose of a guarantee fund for other people. The likelihood, in view of human nature, is 75 that under such conditions the great majority of mines will be less productively managed than they have been in the past. I have been told by some who ought to know that this result is actually occurring and that there has been a marked deterioration in the quality of the coal produced. That is a very serious matter. I am told by those who ought to know that the quality of coal which is now available for London is far lower than it was at the same time last year. Indeed, I have been told that one Government Department has lodged a complaint with the retailer from whom it purchased as to the quality of the coal, and the retailer simply referred the Department to the Controller, and said he could only obtain the coal which the Controller placed at his service. When you hear complaints of that kind from Government Departments it is perfectly obvious that the effect is being produced which one would naturally expect, first of all that you have not the same economical management of the pits, and, secondly, that there is a deterioration of the quality of the coal which is produced.
That is the most public interest affected. It affects every consumer and every industry in the country, and those who are inclined to criticise this arrangement have been driven to criticise it very largely on account of the acting of certain local control committees, because, after all, it is in the light of the acting of these committees that one can appreciate the effect of this agreement. I can say, on information on which I can rely, with regard to Scotland, that there the coal control committees are in the hands of the large producers, and that the members of the committees are receiving preferential treatment as compared with coal-owners who are outside these committees. In other. words, the effect of this Government control, acting through the coal control committees, is to drive the industry into monopoly conditions. You are, in fact, freezing out the small man. I can give an example of it. Shipment sales are now practically exclusively in the hands of members of the coal control committees, whereas land sales, upon which the price is lower, are only left, under certain very grievous restrictions, to those who are outside the ranks of the committees. That obviously means that those who are on the coal control committees are getting the more profitable part of the trade, and as the 76 others have to sell only for land sale many of them are unable to work their undertakings at a profit at all, and in consequence they will be driven to close up their mines. The fact has already occurred For example, I am told that in one district in Fifeshire there has been so much unemployment that the miners have had to go for relief to the county council, and similar conditions are arising in other parts of the country. Apart altogether from this. tendency towards monopoly, it is obviously, therefore, not in the interests of the men who work the mines to have this system, which is to be confirmed in this Bill, put into force. We are told that these arrangements are made on account of the necessities of transport, but some of the arrangements of which I have been told are such as cannot be justified by such considerations at all and can only be explained by the working of the control by the control committee for the benefit of the members of the committee. The case of one contract was given me where before the control the contract was held by a mine within fourteen miles of Glasgow. It was put an end to by the control committee and the coal is now being brought to Glasgow from a distance of forty-four miles. Obviously that cannot be justified on the ground of economy of transport.
That all bears out my argument that under this arrangement the larger coal-owners are going to secure a monopoly of the industry, and for that monopoly they are quite prepared to pay, and have agreed to pay the extra taxation. Probably in the immediate future it will not amount to very much, but they are going to secure that many of their competitors are going to be closed down and it is interesting, therefore, to ascertain what is to be the fate of these competitors in terms of this agreement. Has any adequate provision been made under this agreement for these conditions? Apart from this Bill, of course any man who has to close his undertaking as a result of the action of the Coal Controller has certain remedies. He may go to law, as certain shipowners have done in regard to shipping control, and the question is now being settled in the Courts. Or he may go to the War Losses Commission. Consequently, apart from this Bill altogether, there is a charge upon the Exchequer as a result of the action of the Coal Controller whenever an undertaking is adversely affected. But under this agreement 77 the owner of an undertaking which is closed is going to be in a worse position than if he were only left to his legal remedy. There is no provision for what is called the guaranteed standard. That is partly in Clause 7 and partly in Clause 10. That is one of the great defects of this agreement, that there is hardly a single Clause that has not a cross-reference to another Clause.The expression 'the guaranteed standard' means—
I do not think there can be any complaint regarding that.
- (a) When the output of the undertaking in any accounting period is not less than the standard output, the profits standard."
That was very clearly explained by the President of the Board of Trade on Thursday, and it is a very fair provision. It is when we come to those whose output is reduced by more than 65 per cent. that we find this agreement extremely vague and indefinite, and we find further ground for belief that these owners are going to have their legal rights seriously prejudiced.
- "(b) Where the output of the undertaking in any accounting period is less than the standard output, but amounts to at least 65 per cent. thereof, the profits standard reduced by a percentage thereof equal to three-fourths of the percentage of the reduction of output."
I turn to Clause 10—it might quite well have been included in Clause 7 if it had not been the intention to confuse the reader.
- "(c) Where the output of the undertaking in any accounting period is less than 65 per cent, of the standard output, the profits standard subject to such reduction as may be fixed under Clause 10."
Here are the very vague and indefinite rules laid down for the man who is in this very important position, namely, the man who is likely to lose most. 78
- "If the output of the undertaking in any accounting period is less than 65 per cent. of the standard output, the guaranteed standard shall be the profits standard, subject to such reduction as the Controller may fix, and may be a sum varying according to the output."
What that means I do not understand, and I have not found anyone who can explain exactly what it means—
- "(a) So far as the decrease in output is due to action by the Controller not common to the whole of the coal industry under his control, the guaranteed standard shall be calculated at a rate per ton of output, regard being had only to the tonnage which would have been raised and the comparative cost of raising it had there been no such action by the Controller."
In other words, the only definite thing in this Clause is that in no case where the reduction of output is 65 per cent. will the profits be up to the amount which they would have been had the reduction only been 35 per cent. That is the only definite statement. Otherwise the owner, who desires to find out what his position is, if left completely in the dark. He may be perfectly sure that he will not get up to the 65 per cent. standard, but that is all. Then—
- "and shall be greater than that which Would be fixed if the rule for ascertaining the guaranteed standard in the case of an undertaking where the reduction of output was 35 per cent. or less applied, so however that the guaranteed standard shall in no such case exceed the amount which would have been the guaranteed standard if the reduction of output had been 35 per cent."
I think the reading of these Clauses is sufficient to show how absolutely impossible is the position of the man who is really going to be prejudiced under this agreement. Then we have this further provision:
- "(b) So far as the decrease in output is due to any other cause, the guaranteed standard shall be less than would have been fixed if the said rule applied, and shall be calculated at a rate per ton of output, regard being had only to the tonnage raised and what it would have cost to raise such tonnage in the standard period."
79 In other words, in mines which make water there is going to be no provision whatever for the expenditure to which the owner will be put in keeping his mine free of water—a very heavy charge indeed. Surely if that is left as it stands, the situation is that the man may be absolutely ruined and it may be possible for his competitors at a later period to take over the undertaking at a scrap price. Indeed, the greater part of the machinery may be thrown into the market at scrap price. Surely that is an intolerable situation. If this man were left to his ordinary rights at common law, or even if he took the alternative remedy of the Defence of the Realm Losses Commission, I am sure he would be in a far better position than if he were left to these alleged guaranteed prices. There is another provision to which some allusion has been made, and it is the most amusing, and I think the most absurd, provision of all. It is Clause 21. The framers of this Bill saw that there is some ground for the view that there is no provision offered for dealing with the case of the man who does not receive anything for the expenses of maintaining the mine —rent, royalties, and so forth—and so they make provision under Clause 21. The provision there is that the owners in a particular district may, out of the goodness of their hearts, meet together and agree to make a voluntary levy on behalf of any unfortunate man whose mine is closed. That is in addition to the 95 per cent. It is very interesting to notice the different way in which this voluntary levy is treated from the 15 per cent. Under the agreement the 15 per cent. levy is treated as taxation for the purposes of Income Tax. It is treated in exactly the same way as Excess Profits Duty under Section 35 of the Finance Act, 1915. This voluntary levy is not treated as taxation; therefore it obviously shows, whatever may be the technicalities of the agreement, that the main charge in this agreement is taxation. This voluntary levy, being a different thing, is paid to the Coal Controller and not to the Commissioners of Inland Revenue, and is not taxation at all. Clause 21 stipulates that:
- "(c) In either case, if a mine is closed, the guaranteed standard shall not include any sum in respect of the cost of maintaining the mine in a state of repair or of reopening it, or any rent, royalties, way leaves, management, or other similar charges, in respect thereof."…the Controller shall from time to time, on the application of any association of colliery owners in any district, or of any group of such associations in several districts, cause a levy 80 to be made on the owners of all undertakings under his control, in such district or districts at such rate per ton on the output as may be specified in such application, and every such owner shall pay the amount due by him under such levy.The proceeds of such levy shall be paid into a fund under the control of the Controller.This is very different from the vague provision in the other parts of the Bill regarding the payment to the Commissioners of Inland Revenue. There the payment is to be made to the Commissioners of Inland Revenue, but there is nothing in the agreement to show that the Commissioners of Inland Revenue are to pay it over to the Coal Controller at all. This is a totally inadequate protection for the small man who is probably going to be ruined as a result of the action of the Coal Controller. What he is to receive under Clause 10 from the guarantee fund is totally inadequate, and it is admittedly inadequate, because under Clause 21 the agreement seeks to make further provision. Under these circumstances it is obviously the duty of this House to ascertain whether under Clause 21 of the agreement there is the slightest chance of the small man who may be ruined having his losses recouped under the voluntary levy. I put it to any hon. Member whether he thinks there is the slightest likelihood that in future, where in any district one or two mines belonging to the smaller owners are closed down, that their richer competitors, to whose action in some cases this has been due, are likely to meet together and to impose upon themselves a voluntary levy in order to recoup their ruined competitor. I do not think that any such thing has ever appeared in any legislation in this House before, and I do not think that anybody in this House believes that any effect will be given to this provision. It is simply an attempt to deceive these poor men into the belief that some provision is being made for them.
The Secretary to the Board of Trade said that this was a Bill to enable the strong to help the weak. If there had been complete provision from the guarantee fund I would have said there was some fairness in his contention, but as on the face of the agreement there is no such provision, and as under Clause 21 81 the small man is left entirely to the tender mercies of his bigger competitors and to their voluntary action, and as he has no legal provision whatever, it is not the duty of this House to pass an agreement which deprives that man of his legal rights, both at Common Law and under the Defence of the Realm Act without seeing that some general provision is made in substitution of his Common Law rights. These, I think, are strong reasons for looking not only narrowly at this Bill, but even for rejecting it upon Second Reading. The House will have no further opportunity of discussing this measure in detail. If the agreement had been embodied in the Bill it might have been fairly said that you could amend it properly in Committee, but, as I have pointed out, it is impossible to amend the Bill in Committee, and it is impossible to amend the agreement in Committee. If you do seek to amend it, you are going to introduce so much confusion and complexity that, unintelligible as the agreement now is, its unintelligibility will be multiplied many-fold in its amended form. That is a very good reason for the rejection of the Bill. Another reason is that the experience we already have of the control is such as to show that there is going to be a falling off in production, and the longer this system obtains you are likely to have a greater falling off. When you remove any inducement to increased production you are likely to diminish production, and as there is no inducement to economical management and the production of the best coal, you must inevitably have uneconomical management and the production of inferior coal, such as the only coal which is available to the consumers in London.
You have, in addition to that, the position of those who have to work in the mines, which ought not to be left out of account. By this measure of diminishing the working of some mines and of closing down others, you are going to produce irregularity of employment in some places and total unemployment in others. I have been told that in one district during the past few months tens of thousands of pounds have had to be paid in unemployment benefit. I have named Fifeshire where the county council has had to be applied to for relief on account of unemployment. The provisions in this Control agreement are likely to aggravate every one of the causes which are producing these effects to-day, and as they are likely 82 to aggravate these causes I think it is the duty of this House to insist on the rejection of the Bill and to call upon the Government to substitute some alternative for it. This is not merely a suggestion that the control should be withdrawn. I do not think it is possible at this time of day to withdraw the control. The control in the first place was introduced in regard to South Wales, when my right hon. Friend the Member for Dewsbury (Mr. Runciman) was at the Board of Trade. That step was taken on quite intelligible grounds, because of labour difficulties there which were so aggravated that it was absolutely necessary for the Government to intervene. This control was extended to the mines of the country in the month of February, although no case was made out for the extension of the control to the other mines. We were informed by the Prime Minister in the speech which he made in this House in December that the control of all the mines was going to take place, but in that speech he alleged no reason whatever for it, and the only ground we can ascertain for the extension of the control to all the mines of the country is the celebrated bargain which took place at the War Office when the Labour party met him on the eve of the formation of his Government, and that body performed a commercial transaction with the Prime Minister.
Apart from these considerations, I agree that now the control cannot be withdrawn; but if you are going to continue the control, it is surely essential that all the interests concerned, the competing interests of the different owners, the interests of the workmen and the interests of the community as a whole should be equally safeguarded. In this agreement there is no proper safeguard, there is no fairness as between one set of coal-owners and another, there is no safeguard for the maintenance of the production of coal, and there is no safeguard for the even employment of labour. An alternative scheme has been put before the Board of Trade by men who have been engaged in the industry, and I think it deserves some consideration, because it is produced by men who are engaged in the industry, and who are, unlike the Coal Controller, who has only come into the industry recently from railway management. That alternative scheme does not ask for greater profit for any branch of the coal industry, but it would secure that no attempt shall be 83 made under cover of control to prejudice the small men in favour of the greater monopolists. If that can be done, I think it is the duty of the Government to consider it. There is another reason why we should have a longer period for deliberation on this matter. Not only are the coal industries affected by this Bill, and, as I have shown, they are imperfectly informed both in regard to the meaning and the effect of the agreement, but the whole trading community of this country are equally interested in the production of coal. It was only to-day, or at the end of last week, that many of the Chambers of Commerce of this country have become aware that such an arrangement has been carried through and is now under the consideration of this House, and several of these Chambers of Commerce have passed resolutions asking for the progress of this Bill to be delayed in order to give them time to see how the arrangement is going to affect the whole trading community. Surely that is a reasonable request to make. In all the circumstances I think the Government would be well advised if, instead of insisting on the Second Reading of this Bill to-day, they postponed its further consideration, because I believe if they did that, they would be driven inevitably to withdraw it, and to substitute something more equitable and more workable in its place.
§ Mr. PRINGLE
If they do not consent to this proposal—if they are going to put upon the coal industry of this country an agreement which the great majority of them do not understand, and which even the Solicitor-General will find some difficulty in making intelligible, an agreement which has been constructed in the interests of a certain section of that industry, and which has not been concerned with the interests of the industry as a whole, and which has left out of sight almost entirely the interests of the community—it will be our duty to divide against the Second Reading.
The PARLIAMENTARY SECRETARY to the LOCAL GOVERNMENT BOARD (Mr. Walsh)
I have listened to the whole of the Debate on this Bill, both on Thursday night and to-night. The hon. Gentleman who has just spoken (Mr. Pringle) in his concluding words said the Bill was being promoted by and in the 84 interests of a section only of the industry who were not considering the industry as a whole. I wonder how far such a statement can be justified? My memory of coal-mining legislation goes back for well over forty years, and I know of no country in the world which during the last thirty years has placed on the Statute book such an output of mining legislation as has the Parliament of Great Britain from 1887 down to the present time. There was a great Coal Mines Regulation Act in the year I have named. Two or three years later we had an Amendment of the Truck Act, and a few years later the first great Compensation Act—that was in 1897. In 1906 there was a second Compensation Act extending the first. In 1907 there was a comprehensive Coal Mines Regulation Act; in 1912 there was a Coal Mines Minimum Wage Act, and in the present year, only two months ago, there was the Workmen's Compensation (War Conditions) Act passed. I could go further back than that if necessary, but what I want to point out is that during these thirty years the one association, the one representative authority, the one body which has spoken for the coal-owners of Great Britain, has been the Mining Association of Great Britain, and during the whole of that time there has never been a whisper in this House that that body did not represent the coal-owners of Great Britain. During the last thirty years the most comprehensive volume of mining and general industrial legislation has been passed which the world has ever known. There have been deputations from the association to Ministers by the score, and Ministers have accepted proposals put forward by this great association. Much of the coal-mining legislation has been the result of definite proposals and of the brain work of this association. Now, forsooth, we are told that this association only represents a section, and that the people who really are speaking for the coal-owners of Great Britain are the two or three malcontents in this House.
You say so, but I reply that there is no more representative body of employers, and it is rather late in the day for hon. Members now to raise the point that, after all this long period, the Mining Association of Great Britain is not representative of the coal-owners.
§ Sir CLIFFORD CORY
May I interrupt the hon. Gentleman? The fact that the Mining Association of Great Britain has spoken for the coal-owners in the past does not empower them to negotiate for the people.
I have been trying to point out the representative character of this association. Indeed, one of the complaints of the workmen's representatives is that it is altogether too powerful as an association, and that the very intimate knowledge and great powers of this vast body places the workmen at a very serious disadvantage. But we have never even hinted that they do not most comprehensively represent the great coal-owning interest of Great Britain. What is it we have to think about? There were two or three points submitted by my hon. and gallant Friend the Member for Newcastle-under-Lyme (Commander Wedgwood). He stated that there were three special points in the Bill to which he objected, and one was that new taxation was involved. But there is not a word about taxation in the Bill. The hon. Member also suggested that a new department was being set up. As a matter of fact, the department which is to work the Bill was set up away back in December, 1916, when it took over the coal-mines of South Wales, and in March this year when it took over the mines in the rest of the United Kingdom. The department, therefore, is already in existence, and has been working for a long time. There is one question on which we will all agree, and that is what is to the advantage of the nation, and where does it come in? In considering problems affecting this great industry we must put the national interest first, and after that the rest. Is it possible that in this great industry we can make arrangements with all the individual colliery owners in the kingdom? It was thought, and, indeed, it was known, that the men in the mines were becoming very restive. They complained that although they were working every day in the week in response to the appeals put forward by the Prime Minister of this country and by the late Home Secretary, but although they were doing their best in the mines other people were profiteering at their expense. That was the modicum of truth in the theory that it was necessary for the State to step in. Think for a few moments what would be the condition of things if the great coal- 86 mining industry were to be dislocated. I remember only too clearly, with feelings of sadness, what happened in 1912. The conditions, bad as they were then, were nothing at all to what they would be in comparison if the coal-mining industry were to become dislocated to-day. It was under these circumstances that the Controller was compelled, under the powers already granted to him, to take over the control of the mines, and, since then, greatly to the credit of that Department, there has been less trouble in that vast industry than in industries not one-hundredth part so powerful. The coal industry has worked with comparative smoothness, the men have been in a state of decent content, there has been less dissatisfaction, and there have been hardly any strikes. I do not think one-thousandth part of the men have been out on strike, because of the feeling of satisfaction that has been created by the setting up of this Department. But it was clear that satisfaction must extend to the coal-owners as well as to the men. How is satisfaction to be given to them except by treating the industry as a whole? It is. surprising that the hon. Member fir North-West Lanark (Mr. Pringle), should make so much of the poor colliery-owner, who, he says, is going to be squeezed out. Are the poor colliery-owners represented in this House?
I simply say I deny your credentials. I certainly do not think my hon. Friend the Member for Barnsley (Sir J. Walton) represents the poor colliery-owners, neither do I think the hon. Baronet who spoke for South Wales has been putting forward the grievances of those particular owners. They have been putting forward their own grievances because, like Oliver Twist, they want more than they have been able to obtain.
I understood the hon. Gentleman to say that he wanted the 6s. 6d. which his hon. Friend from South Wales has got. He gave the House to understand that if he could get the 6s. 6d. per ton which the hon. Baronet was receiving he would be in a very much more 87 amiable frame of mind. I would submit to both hon. Members that it is utterly impossible to get equality at this stage. You can hardly deal with this vast industry, which in times of peace it is of the utmost possible importance to maintain in continuous working order and which in time of war like the present it is vital to the life of the nation to continue, carry on this work continuously and unbroken—I say you can only deal with this vast industry as a whole. You can only deal with it on broad and comprehensive lines; you cannot consider these pettifogging small points, but you must deal with it as a whole on broad lines, and that is what this Bill proposes to do. In regard to the taxation that may come upon the country later on, surely there is no difference in principle between the setting up of the War Losses Commission under the presidency of Sir James Woodhouse and this Department. If, sooner or later, there is a loss, in either case the House will be called upon to make it good in exactly the same way. There will have to be a vote in this House and it will be subject to discussion. There can be no objection to that. We are in this Bill dealing with the industry as a whole and that is the only way in which we can maintain the unbroken and regular working of an occupation upon which almost everything depends. I do not think that more need be said on that point. How else could this industry be dealt with? The hon. Baronet said he wanted perfect freedom of contract. But this Bill does not interfere with freedom of contract any more than did the Coal (Minimum Prices) Act which was passed in 1915. The whole country was in a state of turmoil in that year because prices had soared so high that poor people were utterly unable to obtain coal.
That may be so, but as the result of the passing of that Act any drastic increase in the selling price of coal has been prevented. I am chairman on the workman's side of a conciliation board for a Federated Area which controls more than one half of the total output, and I tell the House that from January, 1916, until now the selling price at the pit head has increased little more than 1s. per ton. It will therefore be seen that there has been a very drastic limitation, and very properly so, of coal prices.
88 The whole country has benefited. There has been no serious set-back to the profits in the mines, the working people have been contented, and everybody is satisfied, for profiteering in this respect has practically disappeared.
§ 5.0 P.M.
This Bill will not prevent them getting it and it is to be hoped that, sooner or later, there will be better machinery devised for the distribution of coal. I was speaking on the point made by the hon. Member for Barnsley when he said that if he could have had freedom of trade and freedom of contract he could have made a profit. Really, it is altogether too late for Members of this House to begin to talk about perfect freedom of trade and perfect freedom of contract in the fourth year of the most horrible war the world has ever known. Those are small arguments on which to found opposition to this Bill. Hon. Members really must take into consideration the credentials of the association that has negotiated this agreement. They are not here to speak for themselves, but every person must know who has any knowledge of the social and industrial history of the last thirty years that this association represents more closely and with greater authority, I think, than any other body of employers in the country. The hon. Member for Sheffield (Sir S: Roberts) gave us on Thursday night a very full description of the reports coming from all parts of the country, and from nearly every district in the country. Great play was made by the hon. Member for North-West Lanark with the fact that one of the small districts, West Yorkshire, said that they did not understand the agreement, but were prepared to vote for it. They are prepared to back their representatives, and, of course, that is perfectly understandable. Does every Member of this House understand one-fifth part of the Clauses of a Bill that first comes into the House? That would be too, great a drain on the intellect even of Members of this House.
No; but men who have made it their business all their lives to understand how their mining interests are 89 affected have formed themselves into a committee, and during months of negotiations and consultations with the Coal Controller himself, day by day and week by week, they went into these Clauses. These men, under such conditions, are presumed to understand what they are about. It is in these circumstances, not of a temporary or a fleeting hold of the Bill and looking at it, but of months of protracted consultation of the Consultative Committee, of men who are at the head of some of the largest firms in the kingdom, with the Coal Controller himself, that I think we can admit this has been thoroughly discussed, and that this House is incurring no danger in accepting the result of their mature deliberations. I think these points should be taken into consideration by the House, but I do ask them in particular to consider this one point. The safeguarding of the very life of the State falls on this industry. If the Bill is rejected we shall have in a very short time the same fear of profiteering that we thought we had safely laid. That may be right or it may be wrong, but it may have the most injurious effect on the minds of the people engaged in the mining industry, and if in consequence of any action of this House the industry is dislocated, and bad blood is infused once more, the nation in its highest interests is bound to suffer. It is because of that I ask the House to take this into most serious consideration, and not to adopt the suicidal policy of rejecting this Bill on its Second Reading.
§ Mr. LOUGH
My hon. Friend who has just sat down always makes most successful appeals in this House, and I congratulate him on a most successful speech. If the House will just think of it for one moment, however, I think they will feel that the hon. Member covered a very small portion of the ground. For instance, he gave us a recital of the beneficent legislation on behalf of the country which this House has passed. True. He also made out this strong point, that during all this period the Mine-owner's Association has been representative of the colliery owners. That does not give the association a status which warrants it in entering into an agreement of this kind. The point made by the hon. Baronet (Sir C. Cory), and the point which I now desire to make, is that the agreement, as an agreement by the Mine-owners' Association, is ultra vires. They had no right to make such an agreement. 90 They are like all the other associations concerned in these matters. I feel indebted to my hon. Friend, who called attention to one or two of the broader aspects of the Bill, and I will ask the House to look at this question from a larger point of view. I have been associated with a few Members of this House who have been greatly struck at the great discontent arising in the country about these controls of vast industries, which are suddenly imposed by the Government; and an agitation of most gigantic proportions is spreading all over the country which must seriously interfere with the progress of the War at its most critical stage if the Government do not do something to assuage it.
I was at a meeting the other day at the Cannon Street Hotel, and I think it was the most extraordinary meeting I have ever attended. It was not like one arranged by the Government, who had to spend about £3,000 in order to get a successul meeting. This meeting was called by the business men of the country. In a little gallery at the top of the building, usually reserved, I believe, for musicians, I suddenly saw a light turned up, and then it became crowded with people, while all the gangways were similarly crowded. The meeting was dealing with this question of the Government interfering with business men in the discharge of their duties at this critical time. An attempt has been made to discount this agitation, and to assert that the whole thing is a question of profiteering. That is a question which has been dealt with in this House. It was referred to a Committee for Report, and the Committee found no evidence in favour of profiteering at all. The phrase has never been defined and the complaint has never been proved. I was greatly struck in attending that meeting with the fact that I could discover no selfish interest and no selfish note at all in the speeches. made dealing with these great industries. There were timber, iron, tin, copper, tea, sugar, currants, dried fruits, and green fruits, with all of which the Government is interfering, represented. The speakers all complained of a common experience, that the effect of the Government control was to make a thing scarce to the verge of famine, and far dearer than it was before. The view of the business men—and I think it was a most patriotic view—was that in this emergency they, like everybody else, wanted to help the country, but were not allowed to do so, being swept aside and 91 clerks who only had experience in Whitehall being put into these most serious businesses. The Bill before us is an example, and the first this House has had to deal with, of this proceeding. I would ask the House to look at it from the broad, national point of view, because no attempt has been made to do that up to the present. This Bill is so peculiar and so cunning that it attracts people like my hon. Friend the Member for North-West Lanark (Mr. Pringle), who made a rather long speech earlier in the Debate, but I would like to deal with it from a broad point of view.
What I complain of is that the Government have not given us any sufficient account of the origin of the Bill. They simply commence a recital of the fact that the Government had controlled the mines in 1916, and that now it is necessary to have a Bill. Why is it necessary? My hon. Friend who has just sat down made the point that since 1916 the control has been maintained. Why not let it go on? Why do we want this Bill ten months afterwards? The control was established—and I am here to admit that during a time of war I am not going to deny the necessity of control—but where the Government breaks down is that they do not define the limits of control, do not say what its aims should be or where it should stop. I think in the coal trade we have a sufficient Bill in the measure referred to by my hon. Friend, the Limitations of Coal Prices Bill, which was passed two years ago. Why is he not satisfied with that Bill? Then we had the Controller set up in 1916, and working, as my hon. Friend says, excellently ever since. Why, then, is it necessary to go on with this Bill and the peculiar aspects of it to which the House is giving so much attention? Where I think the Government are making a mistake, and where I think a great many of the people who are dealing with these business methods in Whitehall are making a mistake, is that they do not recognise the vast interests connected with each of these commodities. They do not realise the number of people who depend for their livelihood upon them, the place they occupy in the crisis through which the country is passing; and the Government deal in an offhanded and unsatisfactory manner with a matter of the greatest national importance.
92 Let us take this coal business for one. We have been told casually in Debate, without sufficient attention being given to the facts, that there are 1,500 great firms in the country carrying on the business. We know that 250,000,000 tons of coal are turned out every year, and we know that that vast industry has been built up and carried on in its present proportions by the enterprise of the individuals who are conducting it. Suddenly, we get an enterprising individual and give him a title—the "Coal Controller," of whom people had never heard before. He draws up his complicated, and I call it flagrant, agreement upon which criticism of every kind has been poured contemptuously ever since it was brought before the House. He sets himself up, and says, "I can sweep you aside, and deal with this vast national industry myself" It seems to me a terrible thing that this British House of Commons, with its old tradition of business men and trained statesmen, should submit to an argument like that without the most serious examination. I said that we ought to look at the business from the public point of view. What is the public interest in this matter? It resolves itself under only two heads. The first, that there should be plenty of coal, and the second that the prices should be moderate. The public does not want to back up this ingenious Controller in teasing and tormenting the mine-owners, and I see nothing in the agreement that will give us plenty of coal—on the contrary, the argument has been put that it will tend to limit the supply.
§ Mr. LOUGH
Because of the worrying nature of the agreement. The Solicitor-General treats that with contempt. That is the way lawyers do with all these business matters. They do not know how difficult it is in these days to carry on a large business, and when you get a Bill like this —I will answer him in a minute as to why it will put great difficulties in the way, although I think the reasons have been stated by every speaker up to the present —I am entitled to put it to the House that friction will be created instead of smooth working, and that that will interfere with the supply. Before I come to the Bill I have one other general remark. My objection to the Bill is I have a shrewd suspicion that it is a political fraud. At the Trade Union Congress, at which my hon. Friend who 93 has just sat down always attends regularly, a resolution is passed every year expressing a pious opinion in favour of the nationalisation of the great systems of supply in this country and of communication. My belief is that the Government wants to pretend that it is doing something in the direction of that resolution, and from that point of view the Bill is a fraud. The resolution asserts the right of the nation to take over these industries. I have no objection, on proper terms, and at the right time. I think that the State might very well, in its own interest, take over any industry it thought right; but is this the time, in the midst of a war of this kind? Have the terms ever been discussed? No. And from this point of view I think that the Bill, with all the friction to which it must lead, is a Bill to throw dust in the eyes of a section of the people, and to make them think that the Government is taking some step in favour of nationalisaion. The time has come when this House ought to demand more business treatment of serious subjects from the Government. My right hon. Friend asked why should this Bill cause friction?
§ Sir G. HEWART
That is not the question which I asked. I understood it was said that this Bill was bound to discourage production, and I asked why, not in a spirit of contempt, but in a spirit of modest inquiry.
§ Mr. LOUGH
My right. hon. Friend is always modest, and I will answer his question. What is the main principle of this Bill? It has not been sufficiently brought to the attention of the House. Clause 22 declares that no dividends shall be paid and no loans repaid in carrying on this industry without the consent of this precious Coal Controller. On what ground of equity should these gentlemen who have established these mines and provided the capital have to come cap in hand to the Controller to ask leave to pay a dividend? It is the most monstrous provision that I have ever seen embodied in any Bill. These mines are exceptional business concerns, if they have not borrowed money and undertaken to repay the money on a certain date. In comes the Coal Controller and he says, "I will make you a bankrupt. I will not let you repay your loan until it is my will and pleasure." My right hon. Friend (Sir F. Banbury) points out that if they are prevented from repaying these loans they will not be able 94 to borrow more money. Will not every lender say, "It is all very well to come to borrow this money, but you are no longer your own masters; you have got a Controller over you who may come in and take a technical objection and may hang up our money for six or twelve months"? I think that I have given a very good answer to my right hon. Friend.
The Bill, which is so cunningly drawn, deals with two points. One of them is this payment of no dividends. This House is asked to give by Statute an employé of the Board of Trade the right to say to people who have invested their money in most successful businesses, "You shall not receive any dividend until we please."I want to put this on the ground of right. Why should not the people who own this property be allowed to pay the dividends which they have earned? My second objection to the Bill is, it treats one of the great industries unequally. The Bill is really not a Coal Control Bill. It is a Finance Bill. For a legitimate control the Government have all the power they want already. That is proved by the fact that they have organised distribution in London without this Bill. They can regulate prices under the Bill of 1915. My right hon. Friend (Sir A. Stanley) shakes his head. I have had to deal with him in his absence. In his opening speech he kept his remarks so restricted that he did not give any justification for the Bill, but the case was rather given away by the hon. Gentleman who spoke just before me, and who said, "Look at the advantages we have had under control during the last ten months."I say be satisfied with those advantages. Do not impose these severe, unique restrictions on one particular industry. The House ought to say, "If this is a Finance Bill, if it imposes a taxation on any section of the people, the Chancellor of the Exchequer ought to bring it in, and it ought not to be hustled in here by the President of the Board of Trade in a hurry." It is founded on Section 28 of the Act of 1915. It is a development of that Act to add 15 per cent. to the Excess Profits Tax. It may be right or it may be wrong, but it singles out one industry over all the rest, and in putting on this heavy tax tends to discourage the industry. I would ask my right hon. Friend to deal with that particular point.
The House and the country have no idea of what these Controllers are, doing. The business world is commencing to hear, 95 about it and they are beginning to make their views heard. Clause 17 of the Schedule says:The owner of every undertaking shall keep and furnish to the Controller at such times and in such form as the Controller may determine such cost accounts, trading accounts, and balance sheets and other accounts as the Controller may require, audited and verified in such manner as he may direct, and if part only of the undertaking is under the control of the Controller, entirely separate accounts of the portion of the undertaking under such control shall be kept, and the price charged on Departmental transactions between the controlled portion of the undertaking and any other portion thereof shall be on a commercial basis, and such as may from time to time be approved by the Controller.A more intricate, horrible and impracticable Clause for the business man trying to work a commercial enterprise for the benefit of the people could not be imagined. The forms which we are all getting in the few controlled trades now are a daily terror to the business man. My hon. Friend (Sir J. Harmood-Banner), who supported the Bill in one of the most humorous speeches perhaps to which this House has listened for a long time, said that it was not very often he differed from his hon. Friend the Member for St. Ives, and then he proceeded to denounce the Bill. He said that they were pressed very hardly and he gave a picture of the troubles of filling up the forms. I go into my room. I have a form on the sofa and another on the piano and another somewhere else, all to be filled up. That was the complaint of my hon. Friend. So that although he was put up to bless the Bill he rather cursed it. There was scarcely a fault which had been pointed out by other hon. Members that my hon. Friend did not refer to. In short, nobody is satisfied with the Bill. For instance, these Gentlemen who think that it tends in the direction of the nationalisation of industries have no reason to be satisfied. There is a newspaper which I always read, though I do not always agree with it, the "New Statesman, "which deals with labour questions, and it says that this is a preposterous measure and that Parliament should throw it out.
A great deal has been made of the point that the Bill is an agreement. I am sorry 96 to say that these details of business are very uninteresting, but the House will have to look into them because so much has been done under them. What is the reason, we have not had this Bill for ten months? It is because the Controller has been feretting about in all parts of the country to try to get this agreement made. It has taken him ten months to get this precious agreement, and if the people who made it had any commonsense, he would not have succeeded. The Resolution, which is in the Bill, in which this agreement was dealt with by the Mining Association of Great Britain records the view that the terms of the agreement with the Controller of Coal Mines should be further modified. They are not further modified, and we find on all sides pressure as to the steps by which this agreement was secured. The hon. Member for Barnsley (Sir J. Walton) made a very eloquent speech on this point dealing with the question of the Coal Controller. He told us exactly what takes place in all the other trades. Whenever the Government want to get hold of a business they go down and get hold of one whom we call in business "a tame rat"— the term is not unknown in this House—with some name in the business and they say, "Look here, we are going to have an agreement entered into with you," and if there is any objection they say, "We are at war and therefore must agree to things we would not agree to in time of peace," and so the most impracticable proposals are worked through. My hon. Friend explained that a meeting of the Mining Association was held on the 21st of June, and the Chairman of the Association, who was expected to look after their interests, has been nobbled by the Coal Controller.
§ Sir J. WALTON
I must point out that the right hon. Gentleman is referring to the speech of the hon. Member for St. Ives. (Sir C. Cory), though I very largely endorse what he said.
§ Mr. LOUGH
That is splendid. Whenever I make a statement it generally occurs that I have twice the amount of support that I expected. It was the hon. Baronet who said it. Now we find that my hon. Friend agrees with him. We have not been carved up in the tea trade yet. We are going to be. The first step has been to single out a very popular member of the trade and to put him on as chairman of the Committee. He has now been nobbled, has been made director 97 of the tea supply, and can get hold of a whip to scourge us with. I do not know what may happen to these gentlemen who have been nobbled in the coal trade, but I suggest that a great interest like that deserves fair-play. I think the method by which this Bill has been introduced ought to secure its rejection. It is not a straight Bill. My right hon. Friend is a comparatively young member, and although he occupies such an exalted position as that of President of the Board of Trade he should learn to deal with a matter of this kind with more candour, and in a simpler way than is shown by this Bill. I notice that in the course of his speech he was asked whether his Department would have to account to the Treasury. The answer was, "No." Then the question was put, "To whom will it account?" and the reply was, "I will answer that question when the time arrives for dealing with it." That will be some distant date, perhaps, but I suggest my right hon. Friend should answer the questions which Members put to him. It is a very dodgy thing to have brought this Bill in without the money Resolution, and that is a point of Order which was taken here. I believe the best thing to do with the House of Commons, which represents the people, is to be perfectly open and candid with it, and do not try these dodgy ways of getting a Bill through. If the ordinary opportunity were given to the House with regard to the Bill, if the agreement were open and Amendments could be made, and the whole matter discussed, the House would agree that the Bill was totally unnecessary, that the necessary control could be obtained without the Bill, that this measure will help to strike a blow to a great national industry on which we all depend at the present time, and that to introduce it in the midst of a great war is a most disastrous policy to pursue.
I do not happen to be connected with the coal trade, as are some hon. Gentlemen, but I am absolutely impressed by what is going on, and by the manner in which these matters are dealt with in the House of Commons, for it is, in fact, the taking away of the whole position and locus standi of the House of Commons itself. The Coal Controller, like many other Controllers that have been appointed, is apparently to be a dictator in regard to what shall be done or what shall not be done in connection with the great coal industry of this 98 country. In these discussions which take place the bugbear of the profiteer is always brought in. Who are the profiteers at the present time? They are the Government represented by hon. and right hon. Gentlemen on that bench. We have had cases with regard to the shipping industry in which ships were chartered, say, at 7s. on the deadweight of tonnage and charged on the basis of £12 10s. per ton. Into whose pocket does that money go? Into the hands of the would-be profiteers, as is said of shipowners, or does it go into the pockets of the Government itself? I do not think the method of proceeding with this Bill will do, particularly when bringing it forward the point is made that it is for the purpose of stopping profiteering. So far as I have considered the Bill, I think it the most Socialistic measure ever brought into the House of Commons, and I want to enter my protest on the manner in which it is dealt with, for I feel convinced that what has been experienced in the shipping industry is now to be felt in the coal industry.
I should like to ask the President of the Board of Trade whether he has got in view any other Socialistic measure which he is likely to produce. If he has, I should like to say this to him, that the House of Commons has always been jealous of guarding its control in respect of Bills which are brought before it., During the time I have been a Member of this Assembly I have never heard any Bill which has been printed and distributed among Members that has been spoken of, irrespective of party or of industries in which hon. Members themselves may be interested, in such terms as have been applied to this Bill. The right hon. Member for Islington (Mr. Lough) said that an hon. Baronet who came to bless the Bill finished by, cursing it. There is not a single Clause in the agreement, which I have read, re-read, and re-read again, that anyone can understand. The hon. Gentleman representing the Government said, "We must accept these things exactly as they are; it does not signify what the measure is; it is brought into the House of Commons because we are in the middle of a great war, and we have got to accept it." That is what the business of, the House of Commons has come to. We have got to accept an undigested scheme, and I think that is among the most 99 extraordinary propositions ever put forward. There is one point to which I should particularly like to call the attention of the House. The hon. and learned Gentleman (Sir Gordon Hewart), who, I hope, will reply on the Debate will understand the case, and, with his knowledge and known courtesy, will perhaps be able to enlighten us on some of the questions that have been brought forward in the Debate. One thing I want to know—it has been referred to more than once, and I apoligise for mentioning it again, but I am desirous of asking the hon. and learned Gentleman about it—is it the intention in future Bills to confer power to tax the people through measures brought forward in this manner, because, according to the ordinary Rules and Regulations of this House, the question of each tax in the first place should come before the Committee of the Whole House. In that connection I will just refer to the ruling of Mr. Speaker in which he stated:What does 'a charge upon the people' mean? A charge upon the people, as I read it, means a charge which is made in the nature of a tax, which is paid to the Inland Revenue Commissioners, and which is paid by them to the Consolidated Fund and is available for all purposes for which the State may require it—the Army, Navy, Civil Service and what not.The President of the Board of Trade has not been in the House long, but all those who know him or have known him will, I am sure, be aware of the fact that before he answers a question he is very particular about his position and about what his reply should be. The Parliamentary Secretary to the Board of Trade (Mr. Wardle), who apparently has much more knowledge with regard to matters of finance than the President of the Board of Trade, took upon himself to answer the interruption by an hon. Member, "And the officials !" and he said, "That is a mere bagatelle; there is a surplus which we ask to be allowed to hand over to the House. The right hon. Baronet the Member for the City of London, looking carefully to the interests of this House, asked, "To the House?" to which the hon. Gentleman replied, "The right hon. Gentleman knows what I mean, to the National Exchequer." That is an acknowledgment that it is a new tax.
§ The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. Wardle)
The hon. Gentleman has entirely misquoted me. I said, "If there was a surplus."
Yes; I read what the hon. Gentleman said, "That is merely a bagatelle; there is a surplus which we ask to hand over to the House." My right hon. Friend the Member for the City said, "To the House?" and the hon. Gentleman, in his reply, said, "The right hon. Gentleman knows what I mean, to the National Exchequer." Then the hon. Member for Wolverhampton said, "Then you make it a tax," to which the hon. Gentleman replied, "Surely the hon. and gallant Gentleman knows very well that it is not a tax." I say it is a tax, if ever there was a tax imposed on any portion of the community in this country, and the hon. Gentleman acknowledged that it had to be paid into the Imperial Exchequer. On the ruling of Mr. Speaker himself, whose ruling, I am sure, the hon. Gentleman would not question, it is made perfectly plain that it is a new tax brought forward by this Government itself. I am averse to any special community of persons having any particuar form of taxation placed upon them. There was a sort of taunt made by the right hon. Gentleman the Member for South Lancashire this afternoon, which I was rather surprised to hear emanating from him, and that was that the coal-owners must be satisfied with the profits they made. I remember the hon. Member for Wolverhampton said that as far as they were concerned they might take the whole 100 per cent. if they treated all the same, and did not single out special industries to be dealt with in a special manner. Has this House ever before been asked to sanction a Bill under which the whole of the expenses have to be borne by one special part of the community, which, as far as I can make out, is the position of the coal-owners here? If the Government want more money I think the people connected with business would be perfectly prepared to say that they would, if the Government desired, increase the 80 per cent. excess tax, but that the Government must be satisfied that such a proposition is economically sound. I hope that the Government will be careful in future not to single out any special trade and to have it specially mulcted in extra taxation. Let taxation be clearly divided over the whole of the community. I have never come across anyone since the outbreak of war prepared to say, "I am not paying my fair share of taxation," and that is the feeling throughout the whole of the country. Distribute the cost fairly and equitably, and 101 if you do that the Bills you bring here will not meet with the criticism directed against this Bill.
I think it would be a great deal better for the Government to withdraw this Bill —first, because you are singling out a special community to tax; and, secondly, this is the first time any measure has been brought in by which taxation is imposed not through a Financial Resolution of the whole House. I am certain it is inadvisable that that method should be adopted. This House is very jealous of its rights in this matter, and, having regard to all the circumstances, I hope the Government will withdraw the Bill and take the usual steps by which measures relating to taxation are dealt with in this House. I would also ask them, in doing so, not to single out a special community, but deal with the matter more equitably. If the right hon. Gentleman does so, I am sure he will receive the same courtesy, and the same confidence will be reposed in him as has been the case with all other members of the Government since the outbreak of hostilities.
§ Mr. J. M. HENDERSON
At the beginning of this discussion the point was raised whether or not this Bill should have originated in Committee of Ways and Means. Mr. Speaker ruled that it was not necessary and referred in his speech to what took place in connection with the Munitions Levy which was raised in 1915. We always bow to the Speaker's ruling and to your own, Mr. Deputy-Speaker. As you are aware, it was I who raised that point in 1915, and the decision which was then given I have always held, and humbly held, to be quite wrong. I did not believe, and I do not believe, that it was right, or ever intended, that there should be any taxation levied, or anything in the nature of a levy left in the hands of any Department but the Treasury. What happened? The history of Section 5 of the Munitions Act is very interesting. The very next year, 1916, the Chancellor of the Exchequer, who is the head of the Treasury, was perfectly convinced that I was right and that there should be no levy through any other Department but the Treasury. What did he do? He merged the Munitions Levy in the 1916 Finance Act, and in the Finance Act of 1917 he repealed that particular Section. That is the history of the ruling on a tax charged by another Department other than the Treasury. There has been a good deal of fencing about this as 102 to whether it is a levy or a subscription or a tax. The original word, if I remember rightly, does not mention tax at all, but it is described as a Grant from the Sovereign. But whether you call it a levy, a contribution, a subscription, or a tax, if you compel a man to pay it, or compel him to allow it to be deducted, it is a tax, and not all the sophistry in the world can remove it from that position. We go a step further. When my hon. Friend spoke he tried a little bit of a device, but was pinned by the right hon. Baronet the Member for the City, who asked, "Where is the money to go?" He replied, "To the Exchequer"; and when asked, "Where is the money to come from if there is a deficit?" said, "Why, from the Exchequer." Therefore, the only man who ought to have anything to do with the levy is the Chancellor of the Exchequer.
It is a bad day for this House and a bad day for the country when you allow any Department or any Controller to impose anything in the way of imposition, contribution, levy or fine. There is only one Department in which that should be done, and that is the Exchequer. That is my point against this Bill. I am not a coal-owner and have nothing to do with coal, except to burn it when I can get it. I am only anxious to preserve the rights and duties of this House. There is no earthly reason why this Bill should be brought in now. Mr. Speaker ruled that we cannot correct any part of the agreement. That means that we have got to take the agreement on Second Reading and not correct a word of it in Committee. That is altogether wrong. Everyone knows, of course, that Parliament has over and over again passed Bills to enable a majority to coerce a minority. The company laws, the bankruptcy laws, and any number of other cases do that, but the condition precedent is that the conditions under which that pressure is to be put and coercion applied to the minority shall stand the test and be passed item by item in Committee of this House. If they fail to do that, then I call it an insult to bring in any Bill with that object. I am not interested in this matter in the very slightest, but let me refer to the plea put forward that this was war-time. Of course it is, but you do not require to do injustice because it is war-time and to flout this House and to bring measures before it which you do not allow the House to discuss, and say, "This is war-time; you must pass them." I really 103 cannot understand what it all means. You have got these men controlled. There is no earthly reason why you should not go on with that control, except that I think your control is proving to be a very expensive business to the country—there is no doubt about that. There is no reason why you should bring in this Bill, except to rid yourselves of a difficulty with regard to the compensation you are going to pay the coal-owners. Why not leave it alone and go on with the control, and, if you can, get the trade to agree, but, failing that, draw up your own terms, come to this House and ask that item by item should be passed, and I dare say they will be passed without very much difficulty? But to say to this House "Here is a Bill you cannot touch in Committee" is an insult to which I shall be no party, and I shall vote against it.
§ 6.0 P.M.
§ Sir G. HEWART
I regret very much that I was absent from the House during the discussion of this Bill on Thursday last, and perhaps I may be allowed to explain that I was absent only for the reason that I was at the time discharging another public duty 200 miles away from London. I was glad, however, of the opportunity of reading the OFFICIAL REPORT of that Debate, and I have had the advantage, which is also the pleasure, of listening to the whole of the Debate to-day. May I say, with respect, that it seems a little important to observe the extremely limited character of the question which is really before the House? Judging from some of the speeches which have been delivered in the course of this Debate, both to-day and on the previous day, one might imagine that the House was engaged in an academic discussion of the advantages or disadvantages of State control. It is not even engaged in the far more limited discussion of the advantages and disadvantages of the State control of coal mines during an unexampled War. All those decisions have been taken, and taken long ago. May I remind the House of a Regulation that was made so long ago as 29th November of last year under the Defence of the Realm Act, 1914? It is a Regulation mentioned in one of the recitals of the present Bill. It provides as follows:Where the Board of Trade are of opinion that for securing the public safety and the Defence of the Realm, it 104 is expedient that this Regulation should be applied to any coal mines, the Board may by Order apply this Regulation, subject to any exceptions for which provision may be made in the Order, either generally to all coal mines or to coal mines in any special area, or in any special coalfields, or to any special coal mines.That is the first part of the Regulation, and the second part proceeds to point out the consequences which immediately follow if such an Order as that is made. The second part is this:Any coal mines to which this Regulation is so applied shall, by virtue of the Order, pass into the possession of the Board of Trade as from the date of the Order, or from any later date mentioned in the Order; and the owner, agent, and manager of every such mine and every officer thereof, and where the owner of the mine is a company every director of the company, shall comply with the directions of the Board of Trade as to the management and user of the mine, and if he fails to do so he shall be guilty of a summary offence against the Regulations.
§ Sir G. HEWART
If my hon. Friend will be good enough to indulge me for a moment or two, I will endeavour to answer his question. That was the Regulation made under the Defence of the Realm Act. It was made so long ago as November of last year. How idle, then, it is upon this Bill to discuss the question whether or not it is desirable to have a Coal Controller, or whether it is desirable that, as matters now stand, there should be control of coal mines. What follows? In the beginning, for reasons of which every Member of this House is perfectly well aware, the Government took control of the coal-fields in South Wales. No doubt one of the main causes of that action was a difficulty in connection with labour. A few months afterwards, that Order having been made on 29th November last, namely, on 22nd February, 1917, a further Order was made which extended the original Order to all coal mines in Great Britain and Ireland. There was good reason for that Order. It was because experience showed two things. The first was that special difficulties arose where 105 the State was in control of certain coal mines, and private owners were working certain others; the second was that, in consequence of difficulties that had arisen about transport, it was apparent that the transport of coal within the four corners of the United Kingdom, making as it did, and does, demands so continuous and so heavy upon the railway system, was a matter which must be dealt with, and it was apparent to those who looked into the matter that one could not effectively control distribution of coal without also controlling the output. If you do not control the output, you cannot control the distribution, because it is impossible for you to provide that the shortest journeys shall be taken. That was the position.
Accordingly by March of this year all the coal mines of the United Kingdom were under the control of the Board of Trade. Whatever may be said of the merits or the demerits of that system, it is, at any rate, a system which does not arise upon and is not in any sense whatever created by the Bill that is now before the House. When these steps had been taken there followed, as there was bound to follow, a further question. The mines were under the control of the Government. The managers and officers of the mines were under the direction of the Government. How were the coal-owners to be compensated? That was the problem which had to be faced. Their property had been taken. The Coal Controller was in possession. How were they to be compensated? In other words, how was payment to be made? The hon. and learned Gentleman the Member for West Aberdeen (Mr. J. Henderson) said, what was put a little more obscurely on Thursday last, that the proper course was to let things slide. "Why not?" he said, "leave the coal-owners alone to their remedy?" What does that mean? It means that by proceedings before the Defence of the Realm Losses Commission, or by proceedings in a Court of Law, each individual coal-owner should put his case forward in the way he thought fit, and obtain for himself a special individual remedy. I can imagine, at any rate, one class in the community that might have regarded that prospect with equanimity. I mean the lawyers. But could there be a plan more certain to produce delay, more certain to involve expense, or more certain to exhibit in the result a lack of uniformity? There was an alternative. The alternative method was to come to an agreement, 106 if you could, with the coal-owners. Of course, the merit of that method, if successfully pursued, would be that you would come to an agreement with the coal-owners as a unit. No doubt there were great difficulties in the way. The difficulties have been exaggerated. My right hon. Friend the Member for West Islington (Mr. Lough), in one of the more rhetorical passages in his speech, calculated that the progress of the matter from the beginning of March to 20th July lasted ten months. I do not make it quite so long.
In March, April, May, and June there were negotiations. There was correspondence between the Board of Trade and the Coal Controller on the one hand, and the Mining Association on the other. In regard to the Mining Association I am quite sure that I need not add one word to what has already been said by my hon. Friend the Member for the Ince Division (Mr. Walsh) as to the representative character which that association enjoys. From time to time reference has been made to the Coal Controller, as to whom it is no part of my duty to utter any compliments; but I may say that the Coal Controller is not a solitary individual exercising his own judgment without communication with others. The Coal Controller, amongst other things, has the great advantage of the skilled and unceasing advice of an advisory committee which is thoroughly representative, not only of the miners, but of the mine-owners. It was after, it may be, four months of careful negotiation between; those two parties, as representing all the parties interested, the draft agreement passing from hand to hand and being modelled and remodelled, that at length, upon 20th July, this agreement, which is in the Schedule of this Bill, was agreed to and executed. What remains? There was a body—the phrase is not my own, and I say it as in no way conveying an imputation—there was a body as to the dimensions of which we may not all agree, called the dissentient coal-owners. What was requisite was that that agreement, to which the assent of the great majority had voluntarily been given, should be assented to by the minority. Failing assent that minority should be required to accept the provisions of this agreement. With deference, that is the whole question which is before the House in this Bill. Control having been taken, the mines having passed long ago into the possession and control of the 107 Government, the agreement having, after careful discussion, been made between the Government on the one hand and the body which in a unique way represented the coal-owners on the other hand, the question is, whether by force of law, that agreement shall also be accepted by the dissentient coal-owners. Whatever may be one's view upon that question it is, as I have said, a strictly limited question, and it is a question which does not give rise to the many far-reaching topics which have been, at any rate, indicated in the course of this Debate.
May I say without complaint—because it is far from my desire or disposition to complain—that the critics of this Bill are really a little hard to please. On the one hand, it is said, "Did one ever see such a preamble to a Bill? Why, the recital sets out the whole long antecedent history of this matter." That is perfectly true. The Board of Trade, having to make the draft of this Bill, set out in detail, step by step, with dates and references the antecedent history. My hon. and learned Friend says the Government is not clear. He does not complain of history. He complains of mystery.
§ Sir G. HEWART
So far from complaining, as the first critic does, that we have set out the antecedents, he says we have diligently refused to disclose them. The right hon. Gentleman said in one part of his speech that even he failed to understand the provisions of the Bill. I was very glad. though not in the least surprised, to find when he came to what he described as a most difficult Clause, that is Clause 3, that he exhibited a remarkable understanding of it, and was prepared, apparently, in a sentence to give the gist of it. The critics cannot have it both ways. What this Bill has sought to do is, in truth and in fact, to explain the antecedent steps which led to the drafting of the Bill. Now I come to one or two of the specific provisions of the Bill and some of the criticisms which have been passed and some of the questions which have been put about it. May I say at once, with reference to the observation of my right hon. Friend the Member for West Islington (Mr. Lough) this afternoon, he thought it right—and, of course, he is the best judge—to say that this Bill was nothing less than a political fraud. He 108 permitted himself to say that this Bill was introduced for no other reason than that the Government desired falsely to create the impression that it was engaged upon the nationalisation of mines and minerals. If the right hon. Member can venture to say—and, therefore, I suppose, to believe —a thing like that it is a little difficult to address any expostulation to him. Does he not observe that this Bill is necessarily of a temporary kind? The whole power which lies behind this Bill is power derived from the Defence of the Realm Regulation which I have read. The potency of that Regulation is limited by the Defence of the Realm Act. That which is done must be for the safety and Defence of the Realm. Is it not perfectly obvious that the provisions of this Bill are limited, and strictly limited, by the period of the War and such additional period as may be strictly necessary for the purpose mentioned in the Act of 1914?
§ Sir G. HEWART
No, Sir; there is not. But that is because hon. Members who read this Bill and who see the Defence of the Realm Regulation mentioned, are supposed to be aware that the potency of that Regulation is limited by the Defence of the Realm Act. I gather from what is said by the hon. Baronet that if there had been a determining date in the Bill that part of his objection would be removed. Then, trust, the observations I am now endeavouring to make, if they are acceptable, will have the effect of meeting the hon. Member on that point.
§ Sir G. HEWART
I pass from that to say a word about the scheme of this agreement. Once the Government had directed itself to the task of dealing with the compensation of mine-owners by way of agreement, it became necessary to decide the basis upon which that agreement should proceed. And it was not merely the view of the Board of Trade; it was not merely the view of the Coal Controller and his Advisory Committee, that the coal trade in this matter should support itself; it was also the view—to its credit be it said—of the coal trade. It was never thought that the mine-owners, whose coal was not got, or was not got in 109 such quantities as might otherwise be expected, should be compensated at the hands of the general body of the public. It was never suggested that a coal-owner could have his coal in his mine and also have the profits paid to him out of the public purse. No such suggestion was ever put forward. But, on the other hand, when it was realised that the national control of output and of distribution involved that certain mines should be worked more, and that certain mines should be worked less than would otherwise be the case, there was bound to be some pecuniary adjustment, some balance, some give and take, and it was agreed that that adjustment, that balance, should be provided within the four corners of the trade itself. That, I submit, was a right and reasonable plan, and it is precisely because that is the plan upon which all parties agreed that this agreement became necessary, and is drawn in the form in which it is.
Now, with regard to the particular form and phrase of this agreement, I certainly am not going to criticise it. It has passed from hand to hand. It has undergone many revisions, and I am not suggesting that, as it stands, it is a perfect or ideal example of the draftsman's art. But neither is there any reason why it should be. It is well understood by those on both sides whose interests it affects, and in my submission it is well contrived for the end which it has in view. It was said by one of the critics, I think on Thursday, that its title is confusing. I should have thought it was exact. It is a Billto confirm and give effect to a certain Agreement relating to the compensation to be paid in respect of the Control of Coal Mines and other Matters arising out of such Control.That is exactly what the Bill does. The next complaint was that there were certain penalties imposed by the Bill, and that those penalties were retrospective. I cannot help thinking that that criticism also arises from a complete misapprehension. It is quite true that the agreement has been in force since 20th July. The penalty does not come into operation until the Bill is passed, and there is nothing in the Bill to make the penalty it imposes retrospective for the period which will have intervened between the time of the making of the agreement and the time of the passing of the Act. Then, it is said, that it is a great grievance that it is not in the power of this House to amend the 110 agreement, and with the impotence of this House in that respect there is contrasted the power of the Coal Controller. It is said that he can amend this agreement, but that the House of Commons cannot. I would ask, in all seriousness, what possible basis is there for that criticism? This agreement has already been made. It was made upon 20th July of this year. This House was not asked to make this agreement. The agreement had already been made. How could this House amend this agreement—a process which involves the presence and the consideration of all the parties concerned? The agreement has been made. The House is invited to ratify it, but it may be there are some minor points which require adjustment.
I say advisedly "minor points," because Clause 2 was inserted not because there would have to be any alteration of the real fabric of the agreement. What was felt was that there might be some minor point which had not been foreseen, and which might hereafter require revision. What, then, does Clause 2 do? Certainly not what is suggested—that the Coal Controller can make a new agreement. The Coal Controller cannot make a new agreement. It takes two to make an agreement, as it takes two to make a quarrel. What it says is this: "If the Controller of Coal Mines determines the said agreement, the agreement shall have effect," and so on, "and if a new agreement in substitution thereof is made such new agreement shall," etc. But if that new agreement were made, the persons who would make it would be the parties to the old agreement. There is not the slightest foundation for the suggestion that the Coal Controller, of his own initiative, and of his own power, could make a new agreement. The Coal Controller, plus the other party to the agreement, may amend the agreement. This House is not invited to amend the agreement, because the agreement has already been made, and an effective alteration of that agreement must come from the parties who have made it.
§ Brigadier-General HICKMAN
After what the hon. and learned Gentleman has just told us, are we to presume that there will be no objection en the part of the Board of Trade to our putting down Amendments which will make it quite clear that the penalty shall not be retrospective, and that the Controller shall not make a fresh agreement?
§ Sir G. HEWART
I have not the slightest hesitation in saying that if Amendments are put on the Paper for the purpose of providing that the penalties shall not be retrospective, and for the purpose of providing that the Coal Controller, by himself, cannot make a new agreement, they will receive our most careful consideration. I would only point out that if the view of this matter which I have been submitting to the House is correct, they would be superfluous. May I pass to another point? It was said—and it has been repeated to-day—that there is no provision in the agreement that the moneys which under Clause 3 of the agreement are paid by the mine-owners to the Commissioners of Inland Revenue, under the name of coal mines excess payments, shall be under the control of the Coal Controller. To say that is to ignore a large part—and a most important part—of Clause 21 of the agreement. May I be forgiven if I read it to the House? "If the total net amount paid as coal mines excess payments under Clause 3 during the whole period of control is certified by the Controller on the termination of control to exceed the total amount paid by him under Clause 4, together with his administrative expenses, the surplus shall be applied by him in" such-and-such a way. Could, words more clearly show that the coal mines excess payments, which are paid to the Commissioners of Inland Revenue under Clause 3, are to be a fund from which the Coal Controller may draw, and will draw, in order to pay, if there be need to pay, moneys under the guarantee mentioned in Clause 4? Then it is said, to whom are the Commissioners to account? I suggest that if one reads Clauses 3, 4, and 21, it is plain that the Commissioners are to account to the Coal Controller; that is only another way of saying that the Commissioners are to account to the Board of Trade, by whom the Coal Controller is appointed. It is further said, "Suppose this 15 per cent, which is taken from the 20 per cent. that remains after the 80 per cent. Excess Profits Duty has been subtracted, is not sufficient in the hands of the Controller to discharge his guarantee under Clause 4? From what other source is that deficiency to be met, and who is to be responsible for the balance?" It is not to be supposed that this agreement, which is the result of so much care and negotiation, has been made without the most careful consideration of 112 the working of one part in relation to another. Clearly the agreement anticipates, does it not, that it will be self-contained, and that within its own four corners there will be provision made in every way for the expenses to be incurred. It is thought that 15 per cent. of the extra profits which are taken under Clause 3 from those concerned with the more prosperous workings will be sufficient for the guarantee given under Clause 4 to the concerns which are less successful.
§ Sir G. HEWART
My hon. Friend says that no estimates have been given. Does he imagine that this agreement has been made without consultation with chartered accountants of the greatest skill? Of course not. The agreement is the result of the most careful calculation.
§ Sir G. HEWART
My hon. Friend asks me, if my assumption is incorrect where will the money come from? Will he allow me to say it is not my assumption; it is the assumption of the agreement agreed upon on the one side and the other. What I am putting is that the agreement contemplates that the fund will be sufficient. If it is not, no doubt the question will arise, but the question does not arise until the fund has proved insufficient, and I will not take it upon myself to anticipate what course will be adopted if and when that should occur. In like manner I am not called upon to say what will happen if the contrary should be the case, and if instead of there being an insufficiency there proved to be a surplus. Some provision with regard to the surplus is made in Clause 21, but if surplus there be I do not imagine it will pass the wit of those concerned or of this House to find a suitable and proper channel for that surplus.
§ Mr. BILLING
Will it be dealt with in the manner described by the Under-Secretary for the Board of Trade?
§ Sir G. HEWART
I must respectfully decline to be drawn into making any premature predictions. One more word about Clause 21. My hon. and learned Friend has conjured up a picture of the prosperous coal-owners making a levy upon themselves in order to provide funds for those competitors whose mines have to be 113 closed. It may be surprising to him to know but I can assure him that it is the fact, as I am told, that this Clause in its present form was approved by all parties to this agreement.
§ Sir G. HEWART
There is a sufficient output amongst the prosperous coal-owners to make levy of this kind to provide the fund for the less prosperous. There it is, and it is a happy feature of this agreement.
§ Sir G. HEWART
That is a question to which I have not had my attention specially directed, and I hesitate to express an extempore opinion upon it. However, I see no reason, after carefully considering this agreement, to the contrary. The final criticism was that this agreement ends with a suggestion that it should be altered. I must ask whether that criticism is well founded. No doubt the end of this agreement is a little odd, but it is no worse for that reason; it does not follow the usual form, but in the circumstances which have arisen this particular ending is intended to show that after deliberation the agreement was in fact accepted by the Mining Association, and the way in which it is done is that the resolution of the 21st of June, 1917, asking and suggesting that further modification might be made is set out. But that resolution goes on to provide that the meeting leaves to the consultative committee 'full power to make a definite settlement on the best possible terms, and then there follows another statement which says that subsequently between the 21st of June and the 20th July a definite settlement in the terms of the foregoing agreement was arrived at between the Controller of coal mines and the Consultative Committee. How can it be said in these circumstances that the end is a suggestion that the terms should be altered and modified?
§ Sir C. CORY
The Mining Association of Great Britain is made up of a federation of associations and they appointed in the first place a committee. Subsequently a meeting was called of the chairmen and heads of firms, and 114 consequently the agreement was not ratified by the local associations or the Mining Association, but by those chairmen and heads of firms, there being a certain number dissenting. I cannot see how the Mining Association can be said to have any authority to pass this resolution.
§ Sir G. HEWART
I am much obliged to the hon. Baronet, but what he has said now is repeating what he has already said, and I pass from that part of the matter with the observation that I am no longer concerned to dwell upon the representative character of the Mining Association. I think it was said by the right hon. Gentleman the Member for West Islington (Mr. Lough) that the effect of this Bill and the agreement contained in it must be to diminish the production of coal, and to affect adversely every consumer of coal. I am quite sure he will be gratified to know that its effects have been quite the contrary. This agreement was made as is shown upon its face on the 20th July this year. There has been since that time a steady increase of output, and so far as all the evidence which is available to the President of the Board of Trade is concerned it goes to show that under this agreement there will be a great increase in the output of coal. It is said that the output will be diminished, and that production will be discouraged by the provisions which this Bill contains as to payment of dividends and loans. Whatever fault there may be there is very little in that criticism, and I am sure the right hon. Gentleman will be gratified to know that up to this time, at any rate, no such consequence has arisen.
§ Sir G. HEWART
I am not prepared to assert that, but anybody who looks at the agreement under Clause 22 will see that no dividends are to be paid and no loans are to be repaid without the consent of the Controller. The suggestion has been made that the Controller might be an unreasonable person whose consent would be unreasonably withheld. If experience proves that consent is unreasonably withheld a mode of dealing with it in the agreement has been provided. I refrain from pursuing further points because the Committee stage would be more appropriate for their consideration. One witnesses in this House as against this Bill a curious combination. There are mine owners who are asking for more—
§ Sir C. CORY
I beg to say that I never asked for more, but I did ask that certain things should be made clear in the Bill.
§ Sir J. WALTON
And it does not apply to me. My objection was that you should treat everybody alike.
§ Sir G. HEWART
There are mine-owners and land reformers, and those who for some reason are greatly interested in minute and doubtful points of constitutional law. This is an agreement made in an exceptional emergency to dispose of an unexampled problem, and it is a really honest and fair attempt to deal with it. I repeat the observation of my right hon. Friend when he moved the Second Reading. I do not pretend to assert that the agreement is specially favourable to the mine-owners, nor do I see any reason why it should be specially favourable to them. The point is that in the unprecedented circumstances of the time it is an honest endeavour to deal with a real difficulty. Many of the objections that have been. raised are really fanciful, and I trust this House will, with one accord, give to this Bill a Second Reading.
§ 7.0 P.M.
The hon. and learned Gentleman who has just recommended this Bill to the House has, I fear, missed the importance of the constitutional points which have been raised by hon. Members of this House during the last eight or ten days. The hon. and learned Gentleman refers to our interest in the financial procedure of this House as being matters of minute and doubtful constitutional questions, but I think he misapprehends altogether the basis from which we draw our conclusions, and the duty which is laid on us as the financial chamber in our constitution to watch with great care and to give sanction only after the closest examination to any financial proposals which may be brought before Parliament. I am in agreement with some of the things that the Solicitor-General has said, but I must at once join issue with him as to the method which has been adopted for validating this agreement. In the first place, we are under a debt of gratitude to you for the ruling that you have given, but we are also placed in considerable difficulty by it. We had always understood—I now speak purely as a layman—that no charge in the lay sense, and not in the strictly legal sense, could be laid 116 upon the people without the whole of our financial procedure being adopted. No Bill doing this could be introduced without a Resolution taken in Committee of Ways and Means and Reported to the whole House. Until all that stage has been passed never in previous Sessions of Parliament have we been asked to adopt proposals as large and far-reaching as these. Of course, no one would think of questioning your ruling, but I submit that by adopting this method of legalising the terms of the agreement the Government have avoided two stages which at least were customary, if not obligatory, and they have pro tanto reduced the control of this House over great financial transactions in which the State is concerned.
In the first place, if I am not complaining of what the Solicitor-General called a minute point, I would like to draw attention to the fact that the information which the House has been given on the financial operations which this Bill covers has not always been uniform, even from Ministers. In the absence of the Leader of the House, the Home Secretary informed me, when I put a question to him last Wednesday, that under no circumstances could a charge fall upon the Exchequer. The following day the President of the Board of Trade informed the House, and he was confirmed by the Parliamentary Secretary, that conditions were conceivable under which a charge might fall upon the Exchequer. It was not said that there was anything in this Bill to legalise that. All that was said by the President of the Board of Trade was that when the time came for that charge, if any, to be borne by the Exchequer, then would be the occasion to ask Parliament to sanction it. I should like to make the complaint that at that time Parliament will have been committed, the payments will have been made by the Coal Controller, it will be impossible to withdraw them from those who may have received them, and really the power of Parliament to deal with this charge will have been taken away, and we shall be asked to give sanction to monetary transactions which may have taken place months and months before, the money having changed hands, and some of the companies receiving it having been wound up. Under these circumstances, we are entitled to complain that the control of Parliament over these 117 transactions has, I will not say been evaded, but dealt with in a manner not customary in our financial legislation. I take it that the President of the Board of Trade was thoroughly well informed on the operations of this agreement, and his statement being the last that has been made I think we may take it that it is the basis, or one of the conditions, of the operation of this scheme. I would ask the Government, when they come to the Committee stage, to take the necessary steps before the Bill passes out of Committee to legalise in the Bill itself, as we cannot deal with the agreement, the whole of the transactions which are in contemplation and all the liabilities which the State may have to incur.
There are a number of small constitutional and financial points on which I do not wish to detain the House, as, for instance, the position and responsibility of the Commissioners of Inland Revenue. The right hon. and learned Gentleman the Solicitor-General before the Second Reading ought to have considered the position of the Commissioners of Inland Revenue. It is not sufficient to come down and tell us that the point has not been considered by him. The powers and duties of the Commissioners of Inland Revenue are governed by a long series of Statutes, one of the most distinguished of which is the Exchequer and Audit Act of 1866. Under that Act the Commissioners are bound to account from day to day, not from year to year, to the Comptroller and Auditor-General, who is an official of this House, and, as the Commissioners are bound to account from day to day for the gross revenue which they receive, so I would submit they should account for the funds which are to be put into their hands under this Bill. It is of great importance that transactions of this kind outside the ordinary range of our financial control should be legalised in whatever Statute is to give them authority. I am afraid that I can say little or nothing as to the terms of the control. They have been agreed to by the only body which has any authority to speak for the coal-owners in this country. Let it, however, be clearly understood that the contention is held by some members of the Mining Association that the Mining Association is acting ultra vires in committing its members. That may or may not be true. It is also asserted that there is a large number of coal-owners and colliery companies who are not members of or affiliated 118 to the Mining Association. From my own experience of dealing with mining matters when I had the honour of presiding over the Board of Trade, I know that there were coal-owners who were not even members of the Mining Association. This agreement, as it stood, and as it was signed by the President of the Mining Association and by the Secretary of the Consultative Committee, could not and did not bind them. To that extent the criticism which has been offered on the title of the Bill is justified.
This is a Bill not only to confirm an agreement only: it is a Bill to apply an agreement to a large number of persons, companies, and concerns which were not parties to it, and in so far as that is the case it differs from the Railway Bills to which we are accustomed in this House, where the agreement entered into between railway companies and persons and local authorities is put into the Schedule and cannot be dealt with, but which does, in fact, bind all the separate members of these concerns. It is not the case in regard to this agreement. I will put this point to the Leader of the House. Has the Government considered what is likely to be the effect on those colliery proprietors, whether companies or individuals, who are not members of any of the constituent associations and are in no way connected with the Mining Association? There is nothing in the Bill, as it now stands and as I read it, to make it applicable to those who are not members of the Mining Association. Unless the advice which I have received is wrong, and unless words are inserted to say that this agreement may be deemed to apply not only to those who have signed it, but to all coal-owners in the country, it may be held in the Courts that it only applies to those colliery companies or proprietors who are affiliated to the Mining Association. If that is not the case, then I would suggest that it certainly should be cleared up in Committee, because as the Bill stands at present there is doubt. I understood from the speech made by the President of the Board of Trade that it was the intention of the Government not only to confirm the agreement, but to apply it to all coal-owners irrespective of their membership of the Mining Association.
There are two financial sides of this transaction to which I should like to make reference. The first is the limitation in the repayment of loans. The control exercised over the payment of dividends 119 or the withholding of dividends under the control of the Coal Controller has led to considerable inconvenience in many quarters and to hardship in many cases, but what is important to us here is that by controlling the repayment of loans the Government are absolutely placing the banks who have lent to colliery companies in great difficulty. Can it be possible that the Government really intended this agreement, in so far as it covers the repayment of loans, to apply to all banks and finance companies when I venture to say they knew nothing whatever about it until it was printed and circulated ten days ago? Would it not have been as well that they should have consulted those who are involved in financing these great colliery concerns? As I read the agreement, repayment appears to be subject to the control of Sir Guy Calthorp, subject it may be to appeal. The terms under which the loans may be repaid and the times at which they may be repaid pass away from the parties to the agreement, the borrower and the lender, and for the first time in the whole history of banks comes under the control of an official who is not a member of the Treasury or a member of this House. That is a step which ought to have been taken with great caution and not without consulting the financial authorities.
The guarantee, such as it is, is for the benefit of the non-prosperous coal-owners, who have been rendered non-prosperous by the action of the Controller. The colliery proprietors, however, are not the only persons who are concerned. When I heard my hon Friend (Mr. S. Walsh) this afternoon make a very forcible speech in his usual convincing manner from that Table, he made no reference to the position of the miners. Some collieries now are working only two days, not by reason of any fault of those who control the collieries or of the miners who work them, but simply owing to the operation of the scheme of distribution and shortage of wagons. There are some districts which have distinctly suffered, although they might have sold their output and the miners might have worked in the pits and have earned their normal wages during this period of pressure. These miners get no guarantee. I do not know whether my hon. Friend had thought of that point or had discussed it in private, but I would venture to suggest that it is a curious step to give, the non-prosperous coal-owners a, 120 guarantee of their profits and at the same time leave these miners, who are working two days a week and in many cases suffering the pangs of poverty, entirely unprovided for. There is a precedent for dealing with cases of this kind, and it is to be found in the way in which the men engaged in the cotton trade were aided during a time of great shortage. Is it not possible for the Government now to provide not only for the non-prosperous concerns receiving their guarantee, but also for the miners who are suffering because of the control to be covered? Unemployment funds are being drawn upon and even private subscriptions are having to be obtained in one or two isolated cases. These cases of hardship ought not to occur if at the very time that they do occur you are relieving the colliery proprietors of the burdens which fall upon them. I know that is not a criticism against the Bill, but it is a matter that ought to have been under the consideration of the Government, for they are just as much charged to look after the interests of miners as of coal-owners. I hope that my right hon. Friend at some stage or other will be able to satisfy the House that the point will be met.
The criticisms that I have offered to the Bill, such as they are, deal mainly with the financial control of this House, and I do press once more upon the Government not to adopt this as a precedent for legislation in the future, because, as was pointed out by one of my hon. Friends on Thursday night, if they do, it will be open to the Government to deal with almost every industry in the same way—to take money from every industry and parcel it out amongst those whom they see fit in much the same way and to do it with the minimum of Parliamentary control. I am sure that cannot be the intention of a Government which has shown throughout great respect to the House of Commons, but I am equally certain that, if it were repeated, there would be rebellion in the House against that procedure, not on the merits of the proposal, but on the method by which the proposal was put forward. Control has come, and control throughout the War will have to stay. I differ from the Parliamentary Secretary to the Local Government Board in believing that control is responsible for the absence of labour troubles in many of the coalfields. From my experience of the Board of Trade I can say without the least hesitation that whether in the federated area, in the 121 north-east coast, or in Scotland, or in some smaller coalfields, there was no sign of labour trouble to give us any grave anxiety. Every dispute on wages was settled by arbitrators. The decisions were accepted. If there were negotiations, there was no conflict, and the only area where there was anything in the nature of evil or trouble was in South Wales. It was because of that trouble that I was responsible, at the end of November, for exercising control over the South Wales coalfields. I differ from my hon. Friend purely on that point, that control has not been responsible for peace in the different coalfields.
Since the right hon. Gentleman left the Board of Trade there have been serious troubles in Durham and in Scotland; indeed, there was trouble in Northumberland, which would have been aggravated if it had not been for the action of the Coal Controller.
I am not sure that the Coal Controller has acted in the matter of labour troubles in any way different from the course I should have adopted, and it is idle to prophesy.
My hon. Friend is not justified in saying that control means no labour trouble, and that the absence of control does. In South Wales there have been grave disputes and stoppages, one affecting the whole coalfield, even during the period of control. It may be necessary that we should have control to avoid labour troubles. I believe that in South Wales—it was the only way to avoid them —but it is not an omnipotent means of getting rid of trouble in the coal district. My hon. Friend, who has had large experience of arranging these things with his own men, will know that control is not likely to get rid of all the friction with labour. The real reason for this Bill is not to be found in labour control. Control could be and was in operation under the Defence of the Realm Act. The real reason for this Bill is the difficulty of railway transport. There is no other justification or necessity for it The difficulties of railway transport are really very great. For my part I am not prepared to say that control should now be negatived when I know how grave are the troubles of those who are regulating our railways. With the shortage of wagons and the much more serious shortage of locomotives, difficulties 122 on the lines are likely to increase rather than diminish. If control is likely to ease the difficulties in the various districts, control we must have, and it must continue.
I am prepared to support the President of the Board of Trade in such measures as he thinks necessary in order to carry out the proper administration of the railway lines and the coal mines. That does not mean that I support all the provisions of this Bill. When we come to the Committee stage it will be necessary to object to Clause 2, because we cannot agree to go so far as to say we will now give Parliamentary sanction to an agreement which we have never seen, which may never come into force, and which has been described, in colloquial language, as a pig in a poke, and the only safeguard left to us to modify its conditions is that the agreement is to be laid on the Table. That sort of legislation will not be palatable to the House. The Leader of the House must not be surprised if, when we come to the Committee stage, we have a number of Amendments to suggest, and, in particular, that we shall have to ask the Government to drop Clause 2 altogether. I hope I have said nothing which will add to the difficulties of the President of the Board of Trade, whose task, I know, has become increasingly difficult. What I suggest is that his legal advisers have led him in this matter into a line of action which is not consonant with the best traditions of this House. I hope the experiment made and the precedent now set up will not be followed in any future legislation of the Government.
§ The CHANCELLOR of the EXCHEQUER (Mr. Bonar Law)
I was quite ready to leave the case for the Second Reading as it was put by my right bon. Friends, but since the right hon. Gentleman (Mr. Runciman) has appealed to me, with the permission of the House I will say a few words only on the speech to which we have just listened. The right hon. Gentleman says that coal control will not of necessity prevent labour troubles. With that we are all agreed. Certainly my hon. Friend the Member for Ince (Mr. S. Walsh) never made any such claim. What he did claim—and I should have thought the experience of the right hon. Gentleman at the Board of Trade would have justified it—was that there is less likelihood of trouble when the miners know that there is State control and that in dealing with 123 them they are being dealt with from the point of view not of the interests of the employers, but in the interests of the State as a whole. The right hon. Gentleman will remember, when I recall it to him, that at the very time when he found it necessary to make that change in regard to South Wales it was freely discussed among his colleagues as to whether it ought not at that very time to be extended to the rest of the Kingdom, and we knew there was a general feeling that sooner or later it would have to be extended all round. I really have no complaint to make of the statement of the right hon. Gentleman, but I am inclined to think that, in a time like this, when we are dealing, as the Solicitor-General has said, with a problem of unexampled difficulty in every direction, at all events it is not too much to ask the House of Commons to extend a little more indulgence as to the method in which these things are done than would be extended in normal times.
Apart from that, I listened to the discussion on the points of Order, and I still am not convinced that the advice which was given to us that a Financial Resolution was not necessary was not correct. I will tell the House precisely why I make that statement. When the point of Order was raised again by the right hon. Gentleman the Member for Cleveland (Mr. H. Samuel), you, Sir, laid down the principle that if the charge on the State was so remote as to seen entirely unlikely, then a Financial Resolution was not necessary. I can assure the House, not from the point of view of the method in which the Bill was being introduced but from the point of view of the essence of the Bill, that that is the information which was given to us. Not only as a member of the Cabinet but as the Chancellor of the Exchequer, when my right hon. Friend brought these proposals to us, I made it perfectly plain to him that whatever the arrangement was to be, it must be an arrangement which would not mean a demand on the Exchequer in order to carry it out. He assured me that the arrangement was of that character. That being so, the conditions which you, Sir, laid down, are the exact conditions of this Bill. I can, however, assure the House that it was with no desire to save time or to take any short cuts in this matter that we adopted this course. We did it on the usual advice which is given to every Government in cases of this kind. I am ready to say to the House now that, if on further 124 consideration—and we will give it further consideration—we have any reason to believe that a Financial Resolution is proper in the circumstances, the Government will not hesitate for a moment to ask the House of Commons in Committee to pass such a Financial Resolution. We have a perfectly open mind with regard to that.
The right hon. Gentleman (Mr. Runciman) made another statement which surprised me. It is quite true that this agreement was made with the members of the Federation, and that it is made to apply to every coal-owner whether or not he belongs to the Federation. The right hon. Gentleman says it is doubtful whether it does so apply. I should not have thought there is any doubt. At any rate, our advisers told us there was none. Clearly, when we come to the Committee stage, it will be our duty to see that what was the intention of the Government is carried out, and that there is no doubt whatever that the powers we are now asking for apply to every mine-owner in the Kingdom. The objection in the speech of the right hon. Gentleman was almost entirely as to form. I ask the House to consider this Bill on the merits of what we are doing. I have heard a good deal about treating everybody with equality. I do not complain if coal-owners or any other interest think that they are not being treated in the same way as other people. That equality of treatment is what we should all like to see, but there is no man in this House who does not know that it is absolutely impossible, at a time like this, to secure equality of treatment all round. Take, for instance, a much more serious thing, in my judgment, than any tolls of profits—that is, a toll of the lives of men. It is quite obvious that if Conscription applies all round, the hardship in each case is entirely different. It is ten times more in one case than in another. All that the State can do is, so far as it possibly can, to make the conditions equal. The first consideration for any Government carrying on such a War as that in which we are engaged is to see that whatever is necessary for the conduct of the War is given Ito the State, and that must be our guide in these matters.
Apart from the example of the lives of men, every Member of the House is aware that every week more and more particular trades are being injured to a far greater extent than other trades. In some cases they are being absolutely destroyed by the Regulations we have found 125 it necessary to make. We cannot help that. The need of the State is the first call. No one can make a criticism of that kind against the Government unless they can show us a better method by which we can do what is being done. Look at this question. The President of the Board of Trade, in his opening speech, made it quite plain, as it seemed to me, that this control was absolutely necessary. The reason was obvious. The need of the railway communications, to which the right hon. Gentleman has referred, of necessity required that the coal mines which could be easily served by the railways should be used, and there should not be long transits, even if one colliery could turn out the coal more cheaply than another. That was essential. When my right hon. Friend came to me and the Cabinet one or two things were obvious. We could not do this in any case without making some provision for the mines which we were closing down to meet the convenience of the State. That had to be done. You had to make that provision. It must be made in one of two ways. It must be made either by way of a levy on the trade —treating the trade as a whole and as fairly as we could—or by way of a levy on the State. I put it to the House of Commons, Could any Government have come down to this House and suggested that we should make an allowance to a trade like the coal trade, which, on the whole, has profited by the War, when so many others have suffered, in order to carry out the arrangements we thought necessary? It could not be done. I venture to say that although, of course, this inflicts hardship upon particular coal-owners—as undoubtedly it does—all of them get at least their pre-war profits. When you take into account the number of business men all over the country who are not in that condition, I do not think it is an unfair arrangement to which the Government asks the House to agree. I hope the House of Commons will allow this to go through. This is becoming a very grave business. I do not think the country outside has much, or any, sympathy with sectional interests which feel that they are hurt, and I am convinced that the House of Commons will have the same feeling so long as they believe that in dealing with these difficult problems we have done our best to deal fairly to as great an extent as the exigencies of the State require.
§ Amendment negatived.
§ Main Question put, and agreed to.
§ Bill read a second time, and committed to Committee of the Whole House for To-morrow.—[Sir A. Stanley.]