§ Order for Second Reading read.
§ Sir F. BANBURY
I desire to ask your ruling, Mr. Speaker, upon a point of Order connected with this Bill. I wish to ask you whether this Bill should not have been founded upon a Resolution in Committee of Ways and Means? The Bill provides that all profits over 1s. 2d. a ton should be handed over to the Commissioners of Inland Revenue. This is called a coal levy. The Commissioners are given powers to assess and collect this levy. My first question is, Is not this a tax? It is true that this levy is not to be paid into the Exchequer, but it is intercepted, so to speak, and paid to the Commissioners of Inland Revenue, but does not that still make it a tax If the practice of interception is admitted, would it not be possible to say that, after Income Tax and Super-tax have been paid, a proportion of the profits of all business should be handed over to the National Debt Commissioners or to some other Department, thus avoiding the safeguards which have been invariably followed when taxation is imposed?
§ Mr. SPEAKER
I do not think that this Bill imposes any tax, and, therefore, it need not originate in Committee of Ways and Means. There is no provision for applying any moneys to the service of the Crown or to any public purpose. The coal industry is dealt with as a whole. Owners who are making a profit in excess of 1s. 2d. per ton of output pay the excess into a pool, out of which the owners who are not so fortunate have their deficits made up. The Bill, although it repeals one Clause of the Coal Agreement of 1918, is framed upon the same principle as the Act which was founded on that Agreement. There is also a precedent in the Licensing Act, which provides compensation for the extinction of licences, and in the Munitions Levy in 1915.
§ The PRESIDENT of the BOARD of TRADE (Sir Auckland Geddes)
I beg to move, "That the Bill be now read a second time."
1668 This Bill is one for which it would be difficult to find a single enthusiastic supporter in this House. Its justification lies in its history and in the emergency which existed earlier in this year, and the emergency which exists to-day in connection with the coal industry. It would be a waste of time for me in this House to recount the incidents which led up to the Commission under Mr. Justice Sankey. It would be a still further waste of time if I were to recount the findings of that Commission which they gave in the interim Report. These are common knowledge. It is common knowledge that in that Report it w as suggested that the arrangements to finance the industry should be on these lines: That there should be a limitation imposed upon the profits of the owners as a whole, and that that limitation should be calculated on the basis of 1s. 2d. per ton of output. This Bill follows almost automatically, I might say, upon the Government's acceptance of that Report. It is, indeed, necessary to complete the action which has been taken by the Government since the 20th March, the day upon which the Sankey Interim Report was accepted by the Government, and the day upon which that acceptance was notified to the House. The Bill is complicated, and highly technical. It is clear from the criticisms which have coins to my knowledge that it is not completely understood. Taking, first of all, the side which were particularly interested in the Sankey Commission namely, the miners—one finds or one meets with the most extraordinary misapprehension with regard to this Bill in the minds of some of them. It has been said that this Bill is designed to end the Sankey wage on the 31st March next. Of course, that is clearly a misunderstanding. That is not the case at all. It has been said it was said to me yesterday—that this Bill did something which it did not appear to do; that, in effect, under this Bill the owners would get 6s. per ton instead of the 1s. 2d. which they appear to get. That, of course, is entirely wrong. Yet these misapprehensions are, I am told, fairly widely spread and widely shared.
Then we have, on the other side, the coal-owners. The circular which has been issued, I understand, by the Mining Association gives a picture of the effect of the Bill which is entirely divorced from the real meaning of the Bill. The circular, of which, I am sure, every Member of this 1669 House has had at least one copy, has been circulated broadcast. It has created a great deal of distress in the minds of shareholders in coal-mining companies. One regrets that so inaccurate a statement should have been circulated by so responsible a body. For instance, it says in the circular:The pre-war profits of the coal trade were £25,000,000.That is a sheer hallucination. A sum not far from £25,000,000—about £4,500,000—was the sum of the standard when profits arising from coke ovens and other subsidiary undertakings were included. The sum of the standard was arrived at by taking the best two years out of three, or the best four years out of six in certain instances, before the War. So that every undertaking in the coal industry had peak profits for its standard, the same as other industries. But these profits added together, and other things thrown in, are set down in this circular as if they were the normal average profits of the coal-mining industry. The real figure comparable to that—the figure which would have been a fair figure to take, the average profit for the five years before the War—is almost exactly half the figure set down. Instead of being £25,000,000, it was £12,800,000. So that we start in this circular with a statement which is wildly inaccurate.
The next figure given in the circular refers to 1s. 2d. multiplied by 225,000,000 tons, and that is worked out at £13,151,000. Then the circular goes on to say out of this £13,000,000 all sorts of charges have to be met. It finishes up with a sentence which must have alarmed the shareholders in colliery companies in the most deplorable way:In some instances under the Government proposal the reduced profit will only be sufficient to pay interest on the debentures and preference shares. It will not be sufficient to pay interest on the ordinary shares.They quite ignore the fact that under the Bill, in accordance with the provisions of the Finance Act, the interest on debentures, in common with the interest on overdrafts and loans from the bank, comes altogether outside the 2d., and is a charge against the undertaking. So that it is quite clear on both sides—both where it is said that this Bill is giving them enormous sums and where it is indicated that the majority of the mine-owners, and the holders of ordinary shares can hope for no dividends under this scheme—there is a misunderstanding. So perhaps I 1670 shall be excused if I try to explain exactly what the Bill does. The first thing it, does is to separate out those parts of every undertaking concerned with coal mining which are really coal-getting parts. That is necessary in order to bring all the undertakings to the same common denominator. It reduces every undertaking to the same level, that it should be an undertaking which is solely concerned with the getting of coal, and if in an undertaking there is another part which is concerned with something else — coke ovens, brickmaking, farming, the running of wagons, whatever it may be—that is excluded and has nothing whatever to do with the matter. We have this reduction to a common denominator, so that every undertaking affected by this Bill shall be an undertaking which is concerned with getting coal out of the ground and on to the surface. That having been done, it says this series of undertakings shall have their profits limited in respect just of that bit which is cut out, the coal-getting, and the limitation of profits will be fixed in this way. The output of the industry as a whole, in tons, multiplied by 1s. 2d., will give a figure which is the amount of the fund to be distributed in profits on the undertakings which are solely concerned with coal-getting. Then it says the method of distribution of this fund shall be this: The fund will be divided up between the various undertakings, in proportion to the real standard of profits of the coal-getting undertaking which is affected. Then it goes on and says this year in which this limitation is imposed shall be treated specially from the point of view of Income Tax. No averaging will be brought in. The year will stand by itself, so that if there is a reduction in the amount of income the undertaking will pay Income Tax on the income which it has actually got.
That may seem very complicated, and in some sense it is, but at present the coal industry is in such a position that it is absolutely necessary that something should be done. The coal industry has now for years been under control, and certain pits have been allowed to export and certain pits have not been allowed to export coal or to supply bunkers. So that there has been introduced into the coal industry, as the result of the working of control, a differentiation between pit and pit which, because it has been in a sense arbitrary, dealt very hardly with those undertakings which were compelled by the 1671 working of control to supply all their output of coal inland. So that something would have to be done in any case. If nothing were done, and if we went on dither under the old agreement, or if control were suddenly dropped, there would be absolute and complete chaos in the mining industry. For a whole year, this last year, arrangements have been made upon the supposition that this limitation of profits would be operative. The whole basis of the finance is that there shall be a limitation of profits, and that limitation will be worked out on this basis of 1s. 2d. multiplied by the total output of coal in the country, and that will be the sum total of the profits to be distributed in respect of actual coal-getting.
With that position existing, it is clearly necessary that we should have some power to prevent the industry falling into chaos, and because of the undertaking which was given by the Government in March that the profit would be limited to 1s. 2d. a ton we have devised this measure. If we had not given that undertaking the measure would clearly have taken a different form, but some measure would have been absolutely necessary. If we had had no coal control the price of inland coal would have gone to the world-level. The demand for coal from outside would push prices up, and some control would have had to be re-imposed even if the existing one had been removed. Some control was inevitable this year, and, with our transport difficulties, it was inevitable again that the inland collieries should supply inland coal, and the collieries near the coast, near the exporting ports, should supply coal for export. Physical conditions impose that without any chance of escape, however much we wish to struggle against it. So that we are caught in a difficulty which arises directly out of the emergency of the War, and, arising out of the emergency of the War, we regard this purely as an emergency measure which embodies no principle of general application, but merely provides machinery for dealing with the difficulty which exists and we limit its application in this Bill to the period of the financial year. The Government does not regard this as a sound principle. It is absolutely opposed to this method of dealing with industry in normal times, but in an acute emergency things have to be done now, as they were during the War, which would not be done in normal times, and during the War we 1672 have established from time to time control, and with control limitation of profit. The coal industry itself for years has been working under an agreement which did limit profit.
§ Sir A. GEDDES
During the War, and also guarantees and fixed prices. What we are doing now is to introduce no new principle. We are merely adjusting an emergency arrangement to a new emergency because the type of emergency changed during the year. That is all that the Bill is designed to do, to adjust certain controls which existed under certain governing conditions to the situation which has arisen. It has been said that the Bill is setting a precedent, is establishing some new principle, and is differentiating against one industry. It is not really a principle at all. It is simply an isolated Act to meet an emergency, just as the action taken under the Munitions of War Act was an isolated act to meet an emergency and did not embody any principle of general application. The thing is quite clear to my mind, that you can distinguish between these acts which are taken in an emergency to meet the emergency, and a general principle which we may lay down as suitable for application in normal times. If hon. Members think that because a thing is done at an abnormal moment, therefore you are establishing a precedent for action in normal times, I disagree with them. That being the Government's position in regard to this Bill, that we look upon it as an emergency measure to meet an emergency which has arisen, we deal in this Bill only with that industry and those parts of the undertaking which are at work in the industry of getting coal out of the ground to the surface, and we leave on one side all other industries and all other parts of the industries which are linked with coal getting. [HON. MEMBERS: "Every industry is linked with coal getting!] Not linked in the same intimate way as certain other industries are linked with coal-getting. We have coal-getting and coke ovens linked together; coal-getting and brickmaking linked together, coal-getting and steel linked together. Then you have coal-getting and the coal merchant's business linked together, or coal getting and the running of coal wagons linked together. We cut out all these parts and say that this Bill does not apply to them. The 1s. 2d. which was 1673 suggested as the rate of profit by Mr. Justice Sankey does not include the profits arising in these other parts of the undertakings. That is a very important point, because it is quite clear that the coal owner must have believed that this is. 2d. covered every part of every undertaking which concerned the getting of coal, otherwise nothing like the figures which they have down on this Paper could have been arrived at. If I take some minutes to elaborate this point it is because on this point a case has been built up directly to prove that this was going to prevent the shareholders in these various undertakings from receiving any dividends at all. The truth is that 1s. 2d. a ton on the average over the whole industry, when you limit it entirely to the coal getting, is a considerably bigger profit than in any average period before the War was ever earned by the coal mining industry. That was recognised by Mr. Justice Sankey at the time when he was laying down a larger sum per ton as the amount of profit which was to be paid on the average—a larger sum than had been earned before.
If it be agreed that this will be the effect of the Bill if it becomes law, we may turn to see what other profits there are which will pass to those concerns which are engaged in coal-getting as well as in other activities. We have to recognise that there will be considerable profit which will also pass to these undertakings, which, when it comes to a question of dividends, will have to be added to the earnings of the coal industry as a whole—profits arising from coke, brick, wagons, etc. Then, under the Finance Act there are allowances for capital which has been put into the industry since the standard was fixed, and over and above that there is allowance for interest on debentures, and there is an allowance for amortisation. These allowances make this emergency measure, in my opinion, a fair measure; fair from the point of view of those who have to consume the coal and fair from the point of view of those whose money is invested in coal-getting.
§ Mr. HARTSHORN
Can the right hon. Gentleman give us some figure as to the total of these additions?
§ Sir A. GEDDES
It is not possible to give a figure which would be accurate until after the end of the financial year. It is not possible until the various standards have been worked out and until the 1674 various capital on which allowances have to be made has been worked out. It is not possible to give a figure which will be at all accurate or a safe guide at the present moment. Quite apart from the question of the financial effect of the Bill, there seems to me a far bigger question involved. It is within the knowledge of the House that in March last the Government announced that it accepted the Sankey Report, and in accepting that it accepted this limitation of profits. Throughout the year and throughout the period of the War, when we have had from time to time industrial disturbances, the Government have told the men who had struck, "You have broken an agreement which was entered into by your leaders. You did not repudiate it at the time, and we require you to stand by that agreement and to continue working under it." It seems to me that in this matter we are very much in the same position. The Government undertook to accept the Sankey Interim Report. As a result of that acceptation we gained peace in the coal fields. There is no doubt that if we had not accepted the Sankey Report there would not have been peace in the coalfields in the spring of this year. There was, in fact, no protest made in this House against the acceptation of that Report. [HON. MEMBERS: "We had no chance!"] There was no protest made by Members of this House then or later. We have had numerous opportunities in this House when this agreement could have been disputed. The whole finance of the coal industry has been discussed here many times, and invariably upon the basis that coal-owners' profits were going to be limited to 1s. 2d. a ton. Was there in any single Debate a challenge of that acceptation on that basis? I do not think so. I have searched the OFFICTAL REPORT to see if there was a single challenge in any one of these Debates, and I cannot find one. If at any time the House had disagreed with the Government's acceptation of this limitation, occasion could have been found for discussion of it. But I do not think any Member of this House felt that the Government had acted otherwise than correctly and rightly in accepting the Sankey Report.
§ Sir A. GEDDES
I do not know of any deputation which came to lodge a protest against this acceptation of the Report.
§ Sir C. CORY
A deputation from the coal-owners met the Leader of the House and yourself and the Coal Controller on the 22nd of March and protested strongly against the acceptance of the Sankey award. The right hon. Gentleman was there, and I was there myself. Later we had a very much larger deputation, which met at the Board of Trade the President of the Board of Trade and the Coal Controller. I have the Report here, and I made some rather strong remarks. The right hon. Gentleman asked us to form a sub-committee to work out the details, and I said, "You are really asking us to aid you to advance a scheme of confiscation which will affect the coal trade, whereas if nationalisation comes about in a month or two the scheme will be quite unnecessary." I then went on to say, "Do not ask us to help you, because we do not want to help you to draw up any such scheme. I will not be a party to appointing a sub-committee for such a purpose. It is confiscation." That was at the Board of Trade on the 10th of April last, and it was because the Government was asking the coal-owners to appoint a sub-committee to discuss terms with you to carry out the Sankey award.
§ Sir A. GEDDES
The hon. Member is dealing with quite a different point than the point with which I was dealing. There is the greatest difference between my meeting a deputation of coal-owners—which I did and which I was going to refer to, because I have the actual extracts before me now—and what was done in this house.
§ Sir A. GEDDES
Indeed there is. Surely it would be a strange doctrine if the Mining Association and the House of Commons were to be regarded as the same body. There is the greatest possible difference. The point I am making now is this: Was there in this House from any considerable body or section of the House a refusal to associate itself or to allow itself to be associated with the Government in the acceptation of the Sankey Report? There was no such dissociation, and if an undertaking given by the Leader of the House has any binding effect upon us the present course follows his acceptance of the Sankey Report on behalf of the Government. I am not suggesting that the House pledged itself, but I am saying that the Government was not notified by any 1676 considerable section of the House that it disagreed with the Government's acceptation of the Interim Report of the Sankey Committee. That is a perfectly fair declaration of the position. Just as in dealing with trade unions and in entering into an agreement with the leaders of the unions we expect, unless we hear within a reasonable time to the contrary, the individual members of that union to stand by the agreement, so I think the other party to this discussion, which is the Miners' Federation of Great Britain and Ireland, may quite legitimately say, "Well, the Government accepted this; they never dissociated themselves from the Government, and we honestly believed that they had accepted the Government's decision." What seems to me the most serious thing about the whole position from the political point of view, not from the coal-owners' point of view, is this: that if the Government's acceptation of the Sankey Report was not supported, that a blow would be struck at all collective bargaining that has gone on in connection with industries, and the collective bargaining upon which we have based, in the main successfully, the industrial peace of this country.
That is to me the serious side of the position in which we find ourselves to-day. It was not only then, but during the progress of the Bill as to the price of coal and during the whole of the Session, that the assurance was given that this limitation was to be imposed, and therefore I am authorised to say that the Government regards itself as absolutely pledged to do its utmost to carry out the undertaking which it gave in good faith, on the 20th March—an undertaking the giving of which had the effect of securing industrial peace at a time when the strain in the industrial world was much more intense than it is now. We stand by that undertaking then given, and we think that the Miners' Federation would have good cause to say to their supporters that the Government had accepted the Report. The coal-owners, or a certain section of them, throughout have quite clearly and definitely said that they dislike the principle. As I say, I do not think that there is any principle. It simply is devoid of principle. The question of principle does not arise. It simply is not there. There are obviously two meanings. It is merely a question of expediency as to the best way of meeting an emergency, so that when 1677 the coal-owners say that they do not like the principle, I say I am not dealing with the principle. I am dealing with an emergency Act to meet an emergency situation.
When they say that this is introducing something new into Government relations with industry I say that I do not think it is. We have had it throughout the War because of emergency. We had, especially in the Munitions of War Act, very much the same thing as this, and in distant times similar action was taken because of emergency. There are records of the fixation of prices hundreds of years ago. From time to time, as emergencies have arisen in this country, emergency action of this kind has been taken, and therefore merely as an emergency Act to meet an emergency situation, an Act to which we were pledged in March, which we must carry out because of that pledge, and to keep faith with the Miners' Federation—on that basis we bring this Bill before the House and we lay down definitely in the Bill that this arrangement is to be limited to one financial year, a year which has only four months to run. And after that time we shall have to have, until we have returned absolutely to the full normal level, whatever that may be, some form—I hope quite a different form, but still probably some, form—of regulation of the distribution of coal. But as soon as you come to regulate the distribution of coal you are brought into a position in which you have to regulate in some way also the profits of individual undertakings, and one can say most whole-heartedly that one looks forward with anxiety to the day when the regulation of the distribution of coal can pass out of the hands of a Government Department into the hands of those who are directly responsible for industry through being engaged in it, and though the future policy with regard to coal is not touched upon in this Bill at all, there will have to be, after the close of this financial year, some other system for dealing with the coal industry until, as I have said, we have reached a position of full normality.
§ Lord R. CECIL
As the statement which the right hon. Gentleman has just made is one of immense importance, I think that the House would like to have it made quite clear whether it means that the policy of the Government is to continue, even after the 31st March next, some regulation of the price, of coal?
§ Sir A. GEDDES
That may be necessary, but I say quite clearly and distinctly that the Government does not intend to continue a limitation of profits in anything like the form which we have got in this Bill. So long as there is a regulation of prices, which might be necessary, there is an indirect limitation of profits, and it is only in that sense that I speak of any future limitation of profits. I hope, at all events, that what I have said is sufficient to make it quite clear that this Bill deals only with those parts of undertakings winch are concerned with getting the coal out of the mines, that it does not touch other parts of industry, that this is a temporary measure, that it is an emergency proposal designed to meet an emergency situation and that we regard this Bill as the final Bill under which this sort of control of profits will exist up to the time to which it is to continue.
§ Mr. L. SCOTT
I beg to move to leave out the word "now," and at the end of the Question to add the words "upon this day three months."
The speech to which we have just listened has no doubt elicited the sympathy of the House for the right hon. Gentleman in his extraordinarily unattractive task. While relieving the House on some points the speech left us with difficulty and anxiety on others. Perhaps my right hon. Friend would not object to my summing up the position by saying that while we admit that he is not an unprincipled man, we regard him rather as devoid of principle. It is important on this occasion that the House should have an undertaking from the Government, in connection with this Bill in an absolutely explicit and unambiguous form. The Bill is in my view a bad Bill. If we were merely to act on the memorandum with which it is prefaced I feel certain that the majority of this House would vote against it. The former practice of this House was, when a Bill was introduced to meet any particular mischief or to deal with any particular emergency, to insert in the Preamble of the Bill a recital of what the mischief or emergency was. The advantage of that practice over the modern practice of a memorandum, which does not become part of the Bill, was that always afterwards the Preamble remained as a statement of why the Bill was introduced by 1679 which it would be always possible to see the exact application of the proposals of the Bill and prevent misconception.
Every Member of this House has no doubt been deluged with resolutions by almost every industry in this country objecting to the Bill on the very ground that it is likely to give a precedent for other Bills in the future because of the principle which it applies, and I ask the Government, on the assumption that the Bill may be read by a majority of this House a second time, to agree that in Committee they would put the salient points of the memorandum into a Preamble in order that there may be no possibility of somebody in future saying, "Here is an Act of Parliament. It embodies certain principles. We do not know what the precise circumstances were in which the Act was passed." It stands as a record of the view of Parliament for all time. A statement in the Preamble of the immediate purpose and the emergency character of the measure would prevent that particular misconception. The whole Bill depends entirely on the question of the pledge which the Government gave. To me there seems to be no justification at all for the Bill, apart from the pledge. For that reason I will ask the House to allow me to go a little closely into the pledge.
We all to-day, as the right hon. Gentleman said, feel easier in our minds as to the industrial position in this country than we did on the 20th March. But in judging this pledge we must put ourselves back to the 20th March. The Coal Industry Commission had been appointed by Act of Parliament for the express purpose of preventing a strike in the mining industry. The first report was made on the very day when the Leader of the House gave the pledge which he did give to the miners of the country. It had only just come into the hands of Members when the right hon. Gentleman was speaking, and they had not had time to read it and did not know its terms. But in the course of his statement the right hon. Gentleman did say:one of the proposals in this Report is that the profits of the coal masters shall be limited to 1s. 2d. per ton.And later on he said: "In regard to this whole Report, we have had a discussion in the Government this afternoon, and I say now, on behalf of the Government, that we 1680 propose to adopt the Report itself, and to take all the necessary steps to carry out its recommendations without delay." I agree that that is a word of importance, because if you look at the Report you will see that among the recommendations there is nothing about the 1s. 2d. It is in the body of the Report that the suggestion about the 1s. 2d. appears; but, for all that, the right hon. Gentleman did say in this House that one of the proposals of the Report was the 1s. 2d., and he did use the expression I have just quoted at the end of his statement. Looking back to that night, I do not think there is a Member of this House who would say for a moment that what the right hon. Gentleman then said was not addressed by him as Leader of this House to the Miners' Federation.
§ Mr. SCOTT
As a promise. I am not referring to an incident which took place that evening. It Was a promise that if they would not strike the Government would carry out the Sankey Report. I observe that the hon. Member opposite, who represents the miners with such great ability in this House, seems to shake his head at the idea that it was a promise to the miners. I imagine that if the miners do not want it, the hon. Gentleman will inform the House now or later.
§ Mr. HARTSHORN
My only point was this: We were not content with the Sankey Award. We asked for 30 per cent. and got 20; we asked for six hours and got seven; and the Leader of the House, in proclaiming the decision of the Government that they were going to stand by that award was not making a promise at all, but giving us an intimation that, if needs be, they were prepared to fight us in defence of the Report.
§ Mr. SCOTT
The next time I offer my hon. Friend half a loaf I suppose he will say it was not an offer because it was not the whole loaf. I think the hon. Member will agree that it was a promise made to the miners at the time, and that it was acted upon by the miners. That is the important aspect of the case. In consequence of that statement, the miners' strike was called off. That being so, I venture to think that this House must consider what its position is in relation to a promise so given by the Leader of the Government of the day. It is quite true that 1681 we had really no opportunity of discussing the statement of the right hon. Gentleman, because we did not know the contents of the Sankey Report. Nevertheless, in a crisis of that kind, if this House says, We are content to let the matter be settled to-night and not to insist upon discussing the matter to-morrow or the next day, when we have had time to think it over," then, in my view, the House must be taken to have stood by and to have accepted what was said on behalf of the Government; and it might be, in spite of what the President of the Board of Trade said just now, that the House of Commons, under such circumstances, is just as much bound as the Government. [HON. MEMBERS: "No"] I hear murmers of dissent, but I think this is a question of vital importance to the constitutional government of this country. What is the excuse put forward in the country by those Labour leaders who are in favour of direct action, as it is called, as against constitutional action? It is just this, that by constitutional action they cannot get what they want. Why? Because they say they cannot trust Governments. The only answer to the direct actionists is to maintain the honour of Parliament absolutely. Governments fall from one cause or another. May quote a verse of the fifteenth psalm—He that sweareth to his own hurt and changeth not … shall never be moved.That is true of Governments as well as of men, and it is true of this House that we have to uphold the honour of constitutional government by carrying out pledges when they are given to any section of the community, even though the performance of the pledge may, as I think this does, involve a pecuniary sacrifice of a considerable character to the community at large. It is only if we uphold as almost the strongest principle of the British Constitution the absolute performance of pledges given under such circumstances, that we can maintain constitutional government in this country.
I think it is equally important to see that when a pledge is given of a character that in the event proves unfortunate, the Government should not go beyond its pledge in carrying it out. They have said, quite frankly, to-day, that the principle of this Bill is bad, but that, having made a bad bargain, we must stick to it. With that I agree. I want to make quite certain, however, that before we let this Bill through to-day on the Second Read- 1682 ing, we get such undertakings from the Government as will make certain that it does not go one whit beyond the pledge then given. In order to ensure that position, I think it is necessary to see exactly what the Sankey Report proposed, and what the Government pledged themselves to carry out. The Commission was appointed to consider, first of all, hours and wages, and it is to be observed that the coal-owners gave no evidence at all on any question of profit at that first inquiry. Mr. Justice Sankey and his co-signatories, came to the conclusion that the proposals then made would cost the industry as a whole £43,000,000. But, he said in effect, that, owing to the pledge given by the Government, the coal mines agreement should not cost the Exchequer anything, but that all payments made thereunder should be paid by the industry out of its own earnings, evidence as to which was given by Sir Arthur Lowes Dickinson before the Commission (Question 148) on the lines of the pledge given by the Leader of the House on the Second Reading of the Bill on 12th November, 1917 (column 123, OFFICIAL REPORT). That being so, Mr. Justice Sankey had to find a means by which the expense to the industry of the proposed changes could be met out of the industry for that year.
If hon. Members will look closely at the Report they will see that he was limiting himself purely to that year, as is correctly stated on the face of the Memorandum attached to the Bill. It was only in order to balance the account for that year, without regard to principle at all, that the Commission proposed to limit profits to.1s 2d. I think, to quote the right hon. Gentleman, it is perfectly fair to say that in suggesting the 1s. 2d. limitation there was no idea of principle at all. That being so, I think we may properly accept the statement made by the President of the Board of Trade to-day, that in seeking to, carry out a pledge by means of this Bill the Government are not seeking to introduce any new principle. Although we may accept that statement, I think we want something more than a statement in that form. I want the Government to make it clear that that is so in considered and definite undertakings in regard to, the Bill, as a condition, as far as I am concerned, of not dividing against the Bill. Unless the undertakings given by the Government are satisfactory, the House, ought to divide against the Bill.
1683 It has been objected by some that carrying out this pledge to the miners means the breaking of a pledge to the coal-owners by the repealing of the Coal Mines Control Agreement. I venture to think there is nothing in that. The Government have the right to determine that agreement at any time, and I do not think that the position of the coal-owners is any worse for this year under the terms of this Bill than it is under the terms of the Coal Mines Control Agreement. I should not be a party to any charge against the Government based upon the accusation that they were treating the industry unfairly by the terms of this Bill as compared with the Coal Mines Control Agreement. I submit very earnestly that the decision of the House on his matter ought not to turn on that question at all, but simply and solely on the question as to whether the Government state in satisfactory terms that their view of the principle of limitation of profit is utterly wrong, and give a satisfactory promise to prevent its repetition in the coal industry and its application to any other. The right hon. Gentleman who moved the Second Reading said that there was no new principle in this Bill. In one sense that is true, but in another it is utterly untrue. We have never before, so far as I know, had any Bill proposed in Parliament by which it was suggested that profits as profits should be limited. It removes all incentive, it destroys all initiative, and it is utterly different in its character from a limitation of prices or from taxation of profits. The real and fundamental difference between a limitation of profits and a limitation of prices should be understood, so that we can make certain that the undertakings we are asking for are in the right form. A limitation of prices may have the effect of reducing profits, but it does not affect incentive or initiative. You may fix the price, but the man is still left to take the fullest advantage of every economy that he can effect in his business and every new addition to the efficiency of its administration. The same is true of the taxation of profits.
Under the Coal Mines Control Agreement it is quite true that the profits of the coal-owners were taxed to the extent of 95 per cent, of the excess profits over the pre-war standard. But, none the less, it was not because the principle of the agreement was wrong that that was the 1684 result, but merely because the taxation was made so high. This Bill, by professing to limit profits, introduces into British legislation a. new principle in regard to the application of legislation to industry. As this Bill stands, there is no incentive at all for any colliery to do anything either to maintain output or to earn profits. If an industry makes a profit during the current year which exceeds its pre-war profit, it gets no advantage, because the balance is taken away. If it makes less than its pre-war profits, it loses nothing because it has the difference made up to it.
§ Mr. SCOTT
I appreciate that during the War shipowners suffered in a certain way, and I notice that the House is in sympathy with the hon. Member's view. The big point is that this Bill for the first time in English history proposes to limit profits as such and destroy initiative. The point is one upon which I believe practically every Member of this House except certain members of the Labour party are all agreed, that to limit profits in an industry destroys all that incentive upon which, human nature being what it is, the success of all industry in this country depends. I read with the greatest interest, and if I may say so with complete agreement, a passage in the Prime Minister's speech at Manchester last Saturday, and in that speech there is, I think, a statement of the soundest possible character as to trade and industry. The Prime Minister said:There is a new challenge to civilisation. What is it? It is fundamental. It affects the whole fabric of society as we know it: its commerce, its trade, its industry, its finance, its social order; all are involved in it. There are those who maintain that the prosperity and strength of the country have been built up by the stimulating and invigorating appeal to individual impulse, to individual action. That is one view. The State must educate; the State must assist where necessary; the State must control where necessary; the. State must shield the weak against the arrogance of the strong; but the life springs from individual impulse and energy. That is one view. What is the other? That private enterprise is a failure tried and found wanting, a complete failure, a cruel failure. It must be rooted out and the community must take charge as a community; to produce, to distribute, as well as to control.In my view, that is the big political cleavage in the new political world since the War, and the Government ranges itself on the side of the Prime Minister in this 1685 matter. Are we to get an undertaking in this House to-day that that policy will be followed by the Government in the policy of this Bill and for the future? Since the Government gave a pledge, and since that pledge must have been understood by the miners, according to the language of the statement of the Leader of the House that he gave a pledge, and since in that statement he referred to the proposal to limit profits for this year to 1s. 2d., in my view, we are bound to carry out that pledge, if the Government limit the Bill to the performance of that pledge strictly and by giving us the undertaking I ask for, make it clear for the future, and to prevent this Bill in the future being used as a precedent to the injury of British industry. What I ask the Government to state to-day are these points: (1) That the principle of the Bill is wrong and if again applied, except as a war measure, will be fatal to British industry—does the right hon. Gentleman agree to that? (2) and that under no circumstances shall the Bill be renewed or any limitation of profits applied to the coal industry after the 31st of March next; and (3) that the principle of this Bill, that is, limitation of profits, shall not be applied to any other industry whatever. Does the right hon. Gentleman agree to those points, and perhaps he would say so before I sit down?
§ Mr. BONAR LAW (Leader of the House)
If the House accept that as my speech, I shall be very glad. [HON. MEMBERS: "No, no!"] Then I would rather give my explanation in my speech.
§ Mr. SCOTT
In view of that statement of what the right hon. Gentleman is going to say, I, for one, think that the House ought to stand by the Government and its pledge of the 20th of March last, and, bad as this Bill is, pass it rather than repudiate that. If the Government do make that pledge, I shall net press the Bill to a Division so far as I am concerned, but for the time being I move that the Bill be read this day three months.
§ Sir HENRY NORMAN
I beg to second the Amendment for the time being.
It has become abundantly evident, as the President of the Board of Trade said in his speech, that this Bill was not introduced because anybody liked it nor has it been introduced because it will do anything to clear up the chaotic state in which the coal industry finds itself. On the contrary it has not a friend in the House, and 1686 it is quite clear that many hon. Members who may vote for it in the Lobby will do so for reasons totally different from any affection for it. It is an exception to the natural law that parents admire their own offspring. I have never heard during the eighteen years or more I have been a Member of this House a Bill introduced in such a series of excuses. The apologies of my right hon. Friend when introducing and fathering this Bill were almost abject in their humility. The matter is too serious in my opinion to be left where it has been left by the speech of the President of the Board, and even by the able speech of my hon. and learned Friend who moved the rejection for the time being.
Very few people understand this Bill. Even to-day and even after the speech of the President of the Board of Trade this 1s, 2d. per ton of coal from the time Mr. Justice Sankey proposed it, without appreciating what he meant by it, down to the memorandum in one of the Clauses of the Bill has really been a puzzle equal to Professor Einstein's theory that time is really a dimension of space. Nobody understands it. For months the greatest coal experts in the country have differed constantly in their interpretation of this 1s. 2d. Most people believed that it meant that for every ton of coal 1s. 2d. should be paid to the coal-owner, and probably many people still believe that. Of course, it means nothing of the kind. Many people, I am sure, do not realise that under this 1s. 2d. restriction some coal-owners may get 3s. per ton, and other coal-owners may get 3d. per ton. Nobody knows how much they are going to get. The mystery is deepened by this Bill. Hitherto we have all believed that the coal-owners would be paid upon their individual output, and that each undertaking was to dip into a pool in proportion to output. That statement was recently made in this House and in the House of Lords. Heaven knows, that would have been bad enough, for if the total output was 225,000,000 tons for each 1,000 tons of increased output the colliery-owners would get one two hundred and twenty-five thousandth part of the pool, but this Bill, if I understand it, and I shall be corrected if I am wrong, now drops output altogether as the basis on which the coal-owner is to be paid. Every colliery has, of course, a standard, either a pre-war standard or a substituted standard, or a percentage standard, and the owners of the standard are to be paid, according to para- 1687 graph 2 of the memorandum and Clause 1 (1) of the Bill, upon the proportion of his standard to the aggregate of all the standards. There is nothing about being paid on output. That method of assessing profits might delight Professor Einstein, but it is a puzzle to most of us. No one can possibly know how much he will get. This I venture, subject to correction, to assert, that in many cases the owner's remuneration must be in inverse proportion to his output, because the standard remains fixed while the output may vary. If within a given period his output falls by ten thousand tons, he will practically get the same as if it had not fallen, and thus in that instance the less coal he gets the greater will be his profit per ton. Am I not right, therefore, in saying that this Bill cannot have been introduced because it would do anything to clear up the chaos in which the coal industry finds itself. No, Sir, of course the Bill has been introduced, as we all know, because the Leader of the House feels it to be necessary to redeem the pledge he gave on behalf of the Government in March last. This point has been very fully dealt with by my hon. Friend who preceded me, and so I have very few words to say about it. We all admit that a pledge is a pledge, and honourable men must redeem it. It is not necessary again to dwell on the difficult and painful circumstances in which the pledge was given. We all remember them only too well. But surely it can be shown that the pledge has already been fully kept. The pled0067e was, and these are the substantive words, by the Leader of the House on 20th March:I say now on behalf of the Government that we are prepared to arms the Report in the spirit as well as in the letter and to take all the necessary steps to carry out its recommendations without delay.The recommendations were, great reduction of hours of the miners and great increase of wages, and those two have been fully carried out. One shilling and two-pence per ton was not a recommendation. It is referred to only twice in the recommendations, and first in Section 6 of Mr. Justice Sankey's Interim Report in these words:It is thought that these results may be obtained as explained in our Report without raising the price of coal to the consumer.And again, in paragraph 8 of the Report, we find these words:To meet this (that is the deficit) it is proposed … to allow the coal-owners to retain is. 2d.1688 Therefore the 1s. 2d. was a proposal of financial machinery and not a recommendation. Any other financial machinery to meet the necessities of the case would be an equally good fulfilment of the pledge. So I claim to have shown that this Bill is not needed to fulfil the right hon. Gentleman's pledge either in the letter or in the spirit. The pledge was undoubtedly given, if not to the miners then to Labour generally. Labour is very largely and ably and responsibly represented in this House, and if Labour as so represented here repudiates this Bill, surely that again relieves the right hon. Gentleman from his pledge. If the people to whom the pledge was given do not want it to be fulfilled, whoever does? Moreover, the estimates upon which Mr. Justice Sankey based his proposal have been falsified by events. The price of coal for export has not fallen, as he said it would; it has risen, and instead of a deficit of £9,000,000 at this point, there is a profit of £16,000,000.
§ Sir A. GEDDES
I do not know about that profit of £16,000,000. This is one of those myths that is rapidly growing, and I would like to check it if possible. In the Debate on Friday week, I think it was. I said that if things went on as they were as regards sales, and if the price was not altered, the forecast was that at the end of the financial year there would be a profit of £17,000,000. That is quite different from saying there is a profit or £16,000,000 now.
§ Sir H. NORMAN
I am willing to modify my statement to any extent that may be necessary because of my right hon. Friend's interruption, but I venture to suggest that my statement need not be modified in any substantial degree. There is in all probability a profit—
§ Sir A. GEDDES
Oh, no! That is the whole, point. Prices have been changed, and therefore there will be no profit.
§ Sir H. NORMAN
I can only say I wish I had the subtlety of mind of Einstein without his nationality, because I find it very difficult to follow the constant changes of calculation. However, I pass over that.
§ Sir A. GEDDES
Will the right hon. Gentleman excuse me? This is a thing that has got wrong somehow, and is being represented quite differently from what will be found in the OFFICIAL REPORT. There has been no change of calculation 1689 in connection with that matter at all. The statement was quite clear at the time that this possibility of a profit made it possible to do another thing, which was done, but there is no profit.
§ Sir H. NORMAN
Very well, then, in that case the House will take the facts upon that point put as my right hon. Friend states them, and not as I believed them to be. But there is the other point, in regard to Mr. Justice Sankey's Report, that the output of the year will not be 250,000,000 tons; probably it cannot be more than 225,000,000 tons, which again alters the calculation. Thirdly, the 1s. 2d. per ton in the Bill does not benefit the miners by a halfpenny, and the consumer can be safeguarded, it seems to many of us, in infinitely less objectionable ways. Thus, if there is any cogency at all in these arguments, it shows that from every point of view this Bill is not required.
What is it precisely that we find so extremely objectionable in the Bill? It relates, I contend, in spite of all that has fallen from my right hon. Friend, to principles and profits. Let me take the latter first as the least important. In regard to the use of the word "coal-owners," no doubt many people think the word means a few rich men who have made large fortunes out of the coal trade, but those men are very few in number, and it must, in fairness, be said that their fortunes, to a large extent, have been re-invested in the coal trade. The real coal-owners are not the few, but the many, and they are the shareholders. Most of them are men with very small holdings in shares, and they are the men that those of us who are directors of mines see coming to meet us and demand an account of our stewardship at the annual meetings of colliery companies. Nobody who ever looks at an annual meeting of a colliery company will think he has an assembly of capitalists before him. Many of them have invested all their lifelong savings in the coal industry. If the Bill becomes law, and if the figures of the Inland Revenue are correct, there is every reason to fear that these people of small means will lose an important part of the capital value of their investments. I will not put it higher than this, and I am not responsible in the slightest degree for the statement issued by the Mining Association. I have considered this matter as closely as I can, and I am profoundly convinced of that, that they may lose an important part of the capital value of their investments. 1690 Those, therefore, who support this Bill to hit the capitalists are really striking 100,000 or 150,000 people in the small savings of years of hard work. It may be urged—indeed, it has been urged by my right hon. Friend—that these Inland Revenue figures are based upon a few boom years.
§ Sir A. GEDDES
The standards were the two best or the four best out of the three or the six years, or they were percentage standards, so that right through the whole industry each undertaking was put at its high water-mark, and therefore the correct standard is the sum of individual high water-marks and not a reproduction of anything that ever happened in any year.
§ Sir H. NORMAN
I will adopt with pleasure my right hon. Friend's word, and I will not say the boom years, but the high water-mark years. I admit fully that the omission of coke and other ancillary enterprises makes the shareholders' position much better, but that apart, I venture with great respect to submit that that argument would really hardly be used by anybody who is familiar with the coal trade. It is precisely by those boom years, it is precisely by those high water-mark years, that the average colliery dividend is maintained. It is common knowledge that a large number of collieries work at a loss or for trifling dividends for several years, sometimes seven or eight, in anticipation of two or three years' boom. During the last fifty years that boom has generally occurred something like every ten or twelve years. To give an example from my personal knowledge, in the case of a colliery which has been working for a little over fifty years, for several years in succession it paid a dividend of 20 per cent., and for some other years 15 per cent. Someone may say, "What outrageous profits to take out of the coal consumers' pockets!" Yes; but for the fourth, fourteenth, fifteenth, sixteenth, eighteenth, nineteenth, twentieth, twenty-first, twenty-second, twenty-third, and twenty-fourth years it did not pay a halfpenny of dividend at all, and for six years it paid dividends of 3 per cent. or under. So if for four years it paid 20 per cent. and for six years 15 per cent., it was precisely for those years that the money had been originally invested, and its average of fifty-four years was under 7½ per cent. Does anybody suppose that a speculative enterprise like coal-getting and coal- 1691 selling will attract money with a dividend averaging less that 7½ per cent.? That is true of one of the best collieries, and best managed, in the United Kingdom. With regard to the limitation of profits to a fixed sum, collieries of this class will certainly not continue to operate at a loss for many years; they will either go into the Bankruptcy Court, or they will close down as the wiser policy. I am not defending capitalists' excessive profits. I have long held that there cannot be industrial peace and justice until capitalists' profits are shared with the men who help to make them. I am only pointing out how grave will be the effect of the proposals of this Bill upon the coal industry and how bitterly unjust to the real coal-owners, namely, the 100,000 or 150,000 small shareholders in colliery companies. The, great recent drop in the price of colliery shares shows this, and the almost complete stoppage of development, for which, by the way, this Bill does nothing. In Yorkshire alone developments requiring £12,500,000 to finance them are absolutely in abeyance.
But even graver still are the principles involved in this Bill, and I cannot for a moment admit that there are not principles at stake in this measure. The first of them is the limitation of profits, regardless of cost or price, to a fixed sum or a fixed percentage. It is not restriction of price; that is totally different. It is not taxation of excess profits; that, again, is totally different. It is saying, "However wise the choice of your business, however efficient has been your management, however hard you may have worked, you shall not make a profit of more than so much per unit of production." It is perfectly obvious that this is a death blow to initiative and individual effort, that it puts a premium upon extravagance in management, and that one of its certain results will be to increase the price to the consumer. But it is doubly indefensible to apply this principle to one industry alone. If coal, why not iron, why not shipping, why not cotton? There is no answer. Obviously, the limitation of profit in this sense, right or wrong, imposed upon one business, must be imposed upon all businesses alike. And which industry has been selected for this destructive blow? The basic industry of the nation, the industry which is the very foundation of our commercial and industrial existence, a highly speculative business, a pioneering business.
1692 I submit to the House that these principles embodied in it utterly condemn the present Bill. It seems to me no economist, no student of industrial conditions, no simple man of business can possibly support it. The right hon. Gentleman the Leader of the House, when he comes to speak, may repeat, in even stronger words, what the President of the Board of Trade has already said, that it is "only for a short time." But if the principle is adopted, it is adopted, whether it is for an hour or whether it is for an age. I recollect my right hon. Friend saying in a subsequent remark that this limitation of profits would not be done again "in anything like this form." That leaves a very wide open door. But, in the second place, the Leader of the House has said, and may say again, that it is "not to be a precedent." No, Sir, not for him, but it will be a precedent for others. He will even admit that it is not a sound principle, that it is a vicious principle, but in that case he will have had the responsibility of putting a vicious principle upon the Statute Book. The hideous muddle—these are not exaggerated words—into which the coal trade and the coal interests in the widest sense have been allowed to drift, will never be cleared up until there has been a really competent and independent inquiry into the whole question of the coal industry and its relations to the public.
I earnestly ask the Government to withdraw tins Bill and institute such an inquiry. The Sankey Commission will never be accepted as a satisfactory investigation. Without going so far as to say, with Professor Bone, that it was a mixture of punch and judy show and trial scene in "Alice in Wonderland," it was unsatisfactory for many reasons. In the first place, it was working against time. In the next place, it was not a fair tribunal. Again, it was a tribunal in which the judges became witnesses, went into the witness box, and then came back and took their scats on the bench and adjudicated on their own evidence. The witnesses there were browbeaten and irrelevancies almost innumerable were committed. It reported on certain matters without having heard the evidence upon them. The Chairman's Report was signed even before it was discussed by the Commission. For many months nobody knew what its Report meant. I wish the Government would institute a real inquiry. 1693 What they are doing now is to introduce indefensible principles into legislation; to inflict a grave injury upon a very large body of people, to imperil the development of our basic industry. They may be helping a lame dog over a stile, but at the same time they are hobbling a sound dog. They are fettering efficiency, and they are offering crutches to incompetence. They talk about protecting minor key industries from attacks abroad. I submit that they would be better occupied in defending the great key industry upon which our industrial and commercial existence rests against attacks at home.
§ Mr. ADAMSON
The President of the Board of Trade, in moving the Second Reading of the Bill this afternoon, told us that its terms were very much misunderstood, and that he did not think it had many friends in the House. I venture to suggest to him that if its terms were very much misunderstood, we did not in the course of his speech get very much enlightenment as to some of the leading provisions in the Bill. The Bill is one of the most important and far-reaching that has come before the present Parliament. As the hon. Gentleman who has just addressed the House has said, it deals with an industry on which the future of our industrial prosperity, as a nation, entirely depends. Not only is the future of 1,200,000 persons engaged in tile industry involved, but the future of the whole of our people is bound up in the industry with which this measure seeks to deal. Therefore, it is of the utmost importance that the House and the country should give close and careful attention to this measure, which, if placed on the Statute Book in anything like its present form, will undoubtedly create a serious condition of things in the mining industry in this country. The President of the Board of Trade told us that it was a highly technical Bill. I would rather be inclined to say that it is a craftily drawn Bill, because, while it pretends to deal principally with the limitation of coal-owners' profits to 1s. 2d. a ton, from the explanations that we got, we are in a position to draw our own deduction as to whether the figure named as the figure to which profits are to be limited is a correct one or not. For instance, the President told us that by-products did not come within the terms of this Bill. But I think, if my memory serves me right, we had the information given in connection with the 1694 Commission that if the profits made from by-products were spread over the whole industry, it would add something like 6d. a ton to the profits earned by the owners. Then he told us that loans and debentures were outside, and that certain charges would be permissible for redeeming the capital that was sunk in certain parts of the industry.
So that, from the information he has given us, while one cannot just correctly assess the profits that will be made, it is certainly a profit of much more than 1s. 2d. a ton. There have been rumours going round that deputations have been waiting upon certain members of the Government, and that these deputations have been getting assurance that the profits which would accrue to the trade in terms of this Bill, if it is passed in its present form, would be possibly double the amount that is mentioned in the Bill, namely, the sum of 1s. 2d. If this Bill is given effect to, it will create, in our opinion, a serious condition of affairs in the coal trade of the country. The President, in the course of his remarks, told us he was of opinion that there was less industrial trouble in the coal trade at the moment that we had in the spring of the present year, when the Commission sat, and when effect was given to certain of the Commission's findings. In my opinion, if this Bill were given effect to in its present form, it would simply mean the return of that industrial trouble that was apparent in the spring of the present year.
There are several questions in connection with this bill that I would like to put to the President, or whoever is to reply later on to the criticisms that may be levelled against the Bill. He has told us that, so far as profits are concerned, the-provision will end on the 31st March next, and one of the questions I would like to put to him is this: Will the control of the coal trade be removed on that date? And if it is to be removed, if the Government are to cease to take any hand in controlling the industry after the 31st March, what system do they propose to put in the place of the present one? I would remind the right hon. Gentleman that, according to the Interim Report of Mr. Justice Sankey and his colleagues who signed it, upon the evidence that had been given during the first inquiry, the present system of ownership and working in the coal industry stands condemned, and that some other system must be substituted for it. We have not had any clear indication up 1695 to now of the nature of the system that the Government intend putting in the place of the present one, if control is to be completely removed after 31st March. Undoubtedly, some system will be required to take the place of the present one. As I have already pointed out, Mr Justice Sankey says that the present system stands condemned. Does the Government, or the House, or the country believe that in these circumstances the leaders of the Miners' Federation can advise their members in the various parts of the British coal field to return to a system that already stands condemned in the opinion of the Commission that was set up to go into the matter?
§ Mr. BONAR LAW
I just heard, as I entered, what my right hon. Friend said. Undoubtedly the main reason for this Bill is the fulfilment of the pledge. We are, obviously, no longer bound by that pledge if those to whom we make it relieve us of it—if, on behalf of the Miners' Federation, the right hon. Gentleman is prepared to say, "We do not wish you to fulfil that pledge by passing this Bill!"
§ Mr. BRACE
If my right hon. Friend is putting that by way of direct question, it is necessary really for us to say that at the executive meeting to-day a specific resolution was carried objecting to the Bill upon entirely different grounds. We say that we want the Government to carry out their pledge, and they are not attempting to carry out their pledge in the way we think they ought to do.
§ Mr. ADAMSON
I have no objection to the interruption of the right hon. Gentleman, but I do not think he was present when I put the question that I was confirming at the moment of his entrance. I had just put a question to the President of the Board of Trade, and I want to put it to the Leader of the House if he is to reply later. Does the present system of Government control end on 31st March as well as the limitation of profits? As I asked the President, I now ask the Leader of the House, if the present system of control is to end, what system do you intend to take its place? You cannot go back to the old system. It stands condemned in the terms of the Report which you in this House pledged yourselves to give effect to 1696 in the spirit and in the letter. We have seen some indication that the Government are more favourably disposed to adopt the plan suggested in the Report of Sir Arthur Duckham, a member of the Commission. If his system were put into operation it would mean setting up in the British coal fields a number of trusts. It would mean the establishment of some very big combines in the mining industry of the country.
§ Mr. ADAMSON
The hon. and gallant Gentleman had better let me deal with the subject in my own way. If what I say is the Government's idea, if that is the plan they intend to adopt in the place of the present system, I can tell them that the miners would rather continue under the old system than accept one of that character until they are able to secure the nationalisation of the mines. Not only are the miners up against the establishment of a system of the kind that is outlined in Sir Arthur Duckham's Report, but the coal-owners are as greatly opposed to it as the miners can be, because they say: "If you are to establish a system of that kind in the mining industry, we would rather that you faced now the question of nationalisation." The President of the Board of Trade gave us a very careful explanation of the manner in which profits are dealt with in this Bill. He did not condescend to state the figure. He told us that the Government would not be in a position to name the correct figure until the end of the financial year in March. Before the Leader of the House came in I pointed out that rumour had it that deputations of coal-owners had been waiting upon some of the leading members of the Government recently, and that they were reputed to have put the profit per ton at 2s. 4d. instead of 1s. 2d., and that that information was given to them with the view of modifying the opposition that was likely to be given to this Bill. We certainly do know from the limited amount of information which we have been able to get out of the President of the Board of Trade this afternoon, the profits that will accrue to the coal-owners under the terms of this Bill if passed. This Bill only limit the profits to one year, to 31st March next. I ask the Leader of the House if that was the idea in the mind of Mr. Justice Sankey at the time he issued his Report?
§ Mr. ADAMSON
Limited for one year? If the position be examined from the point of view of the two Reports, I think it will be found that the period of time that was running in Mr. Justice Sankey's mind was three years—until the question of nationalisation could be arranged.
§ Mr. BONAR LAW
I could not give a pledge about a Report which came out three or four months afterwards.
§ Mr. ADAMSON
When the Leader of the House was dealing with the first Report he told us that he would give effect to it in the spirit and in the letter. He made a very careful explanation of what would be the future proceedings of the Commission. He certainly created the idea in our minds that as future Reports came along they would be favourably considered.
§ Mr. ADAMSON
The Government, we were informed, does not approve of the limitation of profits. That was one of the things that the President in the course of his remarks this afternoon made perfectly clear.
§ Mr. ADAMSON
I was going to ask how the Government intended to give effect to the numerous pledges if that was the decision: how they were going to be able to give effect to these pledges given to the working classes, who in recent years have again and again been told that they were entitled to a greater share of the wealth earned by the united energies of the people than they have been able to secure up till now. How are they going to get that unless you have limitation of profits, not only in the mining industry, but in all the other parts of the industrial system? If we are to give to the working classes a higher standard of life than hitherto they have been able to obtain it can only be done by a limitation being placed on the profits of the employers.
The next point I want to put to the President, or the Leader of the House 1698 is, will there be any limitation of prices placed upon the coal-owners after 31st March next? Will the Government's responsibility for the payment of the Sankey wage to the men, the increase of 2s. per day, cease after 31st March? The wages of the men can only be protected on their present basis through some system of pooling the profits. Under present conditions you have higher prices obtaining in the export part of the trade than in the home trade; you have higher classes of coal commanding higher prices in some districts of the home trade than you have in others. Unless there is some system of pooling we will be unable to protect the wages of the men on their present basis. Does the Government, or the House, expect the Miners' Federation, at the end of March to be prepared to enter into a series of fights in order to protect the wages of their members in the various districts with the variations that exist? No, Sir; I do not believe they will. I do not believe the Miners' Federation will be consenting parties to being attacked singly and overcome in detail. If they are to have a struggle, a fight, to protect the interests of the men, it will be a fight for protecting the wages of the whole of the men. It will not be conducted in any sectional manner
This Bill pretends to give effect, as I have already pointed out, to the Interim Report of Mr. Justice Sankey. Where, however, it gives effect to it on the one hand, in our opinion it takes away with the other. To give effect to it in that way is not carrying out the proposal in the spirit of the letter. We do not believe that Mr. Justice Sankey intended that the limitation of profit and prices and the present wages and the control of the industry was to end in one year. The settlement proposed in this Bill under those circumstances would be no settlement at all, and it would simply mean that you would have the fight renewed within the next three months. Therefore, I think we had better give more serious consideration to the matter when we are dealing with this Bill. I hope when the Leader of the House replies he will give us an answer to the following questions: Does this Bill end Government control of the industry on the 31st of March next, and, if so, will the right hon. Gentleman say in specific and plain terms what system the Government intend to put in place of the present one? Does the limitation apply to prices after the 31st of March as well as to profits, 1699 and does the 31st March end the Government's responsibility to the men for the payment of wages under the Sankey award? These are important matters so far as the mining section of the community are concerned, and so far as the Labour party in this House is concerned? Therefore, we would like before the discussion ends to have an answer in plain specific terms to the questions I have put. The Leader of the House has asked whether we want this Bill or not. I understand him to mean by that question if we do not want the Bill he will be prepared to withdraw it. I say frankly in reply to the question as to whether we want it or not it depends upon the nature of the answers which are given to the questions which I have put on behalf of the mining industry and the Labour party. We shall hear the right hon. Gentleman's reply, and then we shall quite frankly tell him what the attitude of the miners and the Labour party will be in regard to this Bill.
§ Lord R. CECIL
There is one observation made by the right hon. Gentleman who has just sat down to which I find myself altogether out of agreement, and it is his statement that the position of the workmen could not be improved unless you limited the profits of the coal-owners. I respectfully express an entirely different opinion, and I even go so far as to say that as long as you preserve the present system you cannot improve the position of the workmen if you limit the profits. I did not, however, rise to enter into an economic discussion on this question, but I did so because I think the situation has been entirely changed by the speech of the President of the Board of Trade and by the information which has reached many hon. Members from other sources, namely, that the Labour party have resolved to vote against this Bill, and they have done so with the assent and approval of the Executive of the Miners' Federation. That may not be true, but that is the rumour going through the Lobby at the present moment. That leaves unofficial Members of this House in a very astonishing position, and certainly the Government are to be commiserated with in connection with the coal question, as they do not seem even by accident to hit upon the right thing to do. I was not in this country when the great coal crisis arose. I understand it was very urgent and the Government decided to deal with it by a Commission, over which they asked a 1700 learned judge to preside. I think that was a profound mistake. When a learned judge is asked to decide a dispute between two parties no doubt he does it as well as any man could do it, but it is quite a different matter to asking him to lay down a policy for the organisation and management of a great industry like the coal industry.
The next great crisis arose over the increase in the price. I do not pretend to understand why the increase in price was made in that particular way. It certainly was a very strange proceeding, as subsequent events appear to have shown. Then came a declaration by the Government against all subsidies, and almost immediately afterwards 10s. per ton was taken off the price of coal. I do not know whether that had anything to do with the pending election. Now comes this Bill. As for the merits of this measure, there is no dispute in any part of the House, for it is universally agreed that it is a thoroughly bad Bill. The principle of the limitation of profits is rejected by everyone who has spoken except the right hon. Gentleman who has just sat down (Mr. Adamson). Almost the most decisive effect of the Bill is in Clauses 4 and 5, which prevent any mine-owner doing anything to develop his mine without the consent of the Coal Controller. I cannot conceive of anything more destructive to the industry than that. No condemnation could be more whole-hearted than that which fell from the President of the Board of Trade, for he condemns the Bill most fully.
I agree very much with what has been said as to the great difficulty of the Government dealing with this question without having any really comprehensive policy. Ever since March last we have known that there is a very great crisis in this industry, and the Government have had a variety of proposals put forward for meeting it, but they have never decided exactly what they are going to do. Some of us asked repeatedly in the summer what the policy was going to be, but the Government declined to tell us, and just before we adjourned the Prime Minister made a comprehensive speech, to which we had constantly been referred as the declaration of the policy of the Government, and when the Prime Minister had finished, my impression of what the Government intended to do was still very far from concise, and we had no indication from the President of the Board of Trade as to what is to happen when this Bill 1701 comes to an end on the 31st of March. The Leader of the Labour party said it is all very well to pass this as a makeshift, but unless you have a policy to deal with the situation you are only putting off the crisis, and it will arise again on the 31st of March.
There is only too much reason to think that the economic situation in Europe generally and also in this country may be even more grave and difficult in March than it is now. Why are we to put off a settlement until that date, because at that time we may be in even a more difficult position than we are at the present time? I understand the nationalisation policy, but I do not agree with it, because it means State management, and that I dislike most profoundly. [HON. MEMBERS: "NO!"] I am not sure what hon. Members mean by nationalisation. If you are going to bring the State in and make the State finance the mines in this country then you must have State management. If you are going to allow the Treasury to finance the mines you will have to put yourselves under the bureaucracy of Whitehall. [HON. MEMBERS: "No!"] I think you will find in practice that that is the way it will work out if you ever get your way. Something has been said about pooling the profits, and a reference was also made to the pledge given by the Leader of the House on the 15th of March. I admit most fully the strength of that argument, although I do not go so far as the President of the Board of Trade. I cannot, however, admit that a statement by the Government binds the House of Commons. I cannot admit the analogy which the right hon. Gentleman drew between the leaders of a trade union, the members of the Government, and the Members of the House of Commons, because each Member of the House of Commons comes here charged with a public duty to do what he thinks right, in the first instance in the interests of his constituency, and in the second place in the interests of the country as a whole—or perhaps it is the other way round. [HON. MEMBERS: "Hear, hear!"] Perhaps the latter view is the one more generally accepted, and for that reason I cannot admit that the mere statement of a member of the Government is binding on the House of Commons.
§ Lord R. CECIL
I do not think the distinction drawn between the supporters of the Government and the House of Commons and the House of Commons itself is a very practical one, but I do not wish to go into too much subtlety over this matter. I only enter that caveat because I think it is a sound doctrine that the House of Commons can be bound only after it has been consulted and has had an opportunity of expressing its opinions. Therefore, I wish to make that reservation. I am so far in agreement with my right hon. Friend, however, that I think, after the Government had made that very specific statement, and it had been assumed that something would be done, it would have been a very serious thing if they had not made an attempt to carry out their pledge. It would have led the miners to say, and to say with some truth, "That is what we say about the governing classes; they never can be trusted; they play fast and loose," and all the rest of it. It is very unfortunate the Government did not produce their legislation immediately afterwards, when the whole matter was fresh in the minds of the House of Commons. Therefore, although I do not think that I could have ever brought myself to vote for this Bill—it seems to me so bad—I do not think that I would have voted against it if the situation remained as is was when the Debate began.
Now comes a very different state of things We have had a positive statement from the Leader of the Labour party today that he does not regard this Bill as a fulfilment of the pledge, and that he cannot accept it as such. He went on to say, with my concurrence, at any rate, and I believe with the concurrence of an enormous number of the Members of the House, that he thought it was a very bad Bill. It did no good, and only postponed matters. He used arguments which were very well founded. What, then, becomes of my right hon. Friend's case? Why should we now vote for a Bill which we all believe to be a thoroughly bad Bill in order to fulfil a pledge given by the Government, when the other party to the pledge says, "We do not regard this as a fulfilment at all"? That is carrying Parliamentary prudery, I was going to say, to an extreme. Surely if the other party do not wish this Bill to be made law, there is only one course open to the Government, and that is to withdraw it. I quite admit that the position is very difficult, and it 1703 may well be—I merely throw this out as a suggestion—that the best course would be to adjourn the Debate. We entered upon this Debate in one sense, and now an entirely new state of things has arisen. We ought to know fully what that new state of things really is, so as to enable us to consider the matter afresh. The House, I understand, sat till 6.30 this morning, and hon. Members would not be altogether sorry for a short Sitting to-day. There are other Orders, but I am not so sure that the Government might not have an access of generosity even at this moment. I do not want, however, to speak lightly. It is a very serious matter, and I venture to ask my right hon. Friend whether he does not think that the proper course would be to adjourn the Debate. I feel quite sure, if the Government insists upon going on in the present state of things, that a very large number of their supporters will find their consciences very severely strained if they have to vote for this Bill, which is not wanted by the miners, and which they themselves, every one of them, think a thoroughly unsound and disastrous measure.
§ Mr. HARTSHORN
Everyone who has listened to the Debate must have realised that we are getting into quite an interesting position. It has been suggested that this proposal to limit profits to 1s. 2d. a ton is in some way part of the miners' proposal. I cannot understand from where that idea comes. The Sankey award which was accepted by the Government and which they said they would carry into effect in letter and in spirit was not signed by a single representative of the miners who sat on that Commission. As a matter of fact, our representatives in their Interim Report went strongly, not for a limitation of profits, but for the nationalisation of the mines. We were on entirely different ground. In the second Report, Mr. Justice Sankey recommended that the 1s. 2d. should be continued for the three years which he suggested should run before State purchase took place. Our representatives on the Commission gave a very general assent to the terms contained in Mr. Justice Sankey's second Report, but on this particular question they said:As we are in substantial agreement with the Chairman's Report, we think it unnecessary to 1704 set forth any separate statement of our views, but in assenting to that Report we wish to emphasise the following points.They then enumerated them, and on this particular question of the 1s. 2d. they said:We think it important that whatever payment is made to the owners, nending the general acquisition of the mines, should not be computed upon the tonnage got.Therefore, so far as our representatives who sat on the Commission and made a Report were concerned, not only did they not sign a Report in favour of this 1s. 2d., but they reported against this method of solving this part of the question. Whatever may be said for or against the proposal contained in the Report of Mr. Justice Sankey, it is not our Report, and it is not what we asked. We have asked for an entirely different thing, and we are to-day in precisely the same position as we have been all along. I do not understand what all the fury is about. I have heard statements made in this House that the coal-owners have been badly treated, and that they have not had such profits as they ought to have received. As far as I am able to judge from the statistics available, they have done very well indeed. On 1st December I asked a question in this House and received a reply. The question was:If the President of the Board of Trade state the total profits, including royalties, made by the British coal-mining industry in each of the years 1908 to 1918, inclusive, and during the first six months of the present year, and. if he will state for each year how the aggregate-profits were divided between royalty-owners, mine-owners and the Government respectively."—[OFFICIAL REPORT, 1st December, 1919, col. 119.]I received a reply from the Chancellor of the Exchequer. The figures contained in that reply are intensely interesting, and I should like to give them for the years before the War and the years during the War. We were told by witnesses who appeared before tire Commission that the five years ending 1913 were the best five years in the history of the industry and that the two years upon which the prewar profit standard is based were the best two years in the history of the industry. During those five years, 1909–13, the profits, including royalties and after allowing for wear and tear, were as follows: 1909, £14,700,000; 1910, £15,100,000; 1911, £13,140,000; 1912, £22,350,000; 1913, £26,980,000. During those five years the average profits, including royalties, amounted to £18,500.000 per annum. It was stated before the Commission, and it. 1705 is fairly well corroborated in this reply, that from that sum must be deducted £6,000,000 as belonging to the royalty-owners. Therefore, according to this reply, you have about,£12,500,000 as the average profits of the coal-owners during those five years. The figure given before the Commission was about £13,000,000; the figure given by the President of the Board of Trade yesterday was £12,800,000, and the figure given here is about £12,500,000, so that there is not much in it in any case. Let us now look what the profits were during the War: 1914, £18,960,000; 1915, £31,160,000; 1916, £46,590,000; and 1917–18, £34,210,000. During those four years, therefore, they got an average of £32,730,000 as against an average of £18,500,000 in the pre-war period. Surely they have not done badly during the War. In each case, you have to deduct £6,000,000 a year on account of royalties.
§ Major WHELER
Is it not a fact that the rise in the royalties proportionate to the increase in the price of coal is an infinitesimal amount?
§ Mr. HARTSHORN
I have not any figures to show how that was modified. I am simply giving the figures supplied to me by the Chancellor of the Exchequer, as being the figures the coal-owners themselves admit as their profits for the purposes of the Income Tax. I would like to give the figures after everything has been deducted. It is sometimes said, "It is true that they have had enormous profits, but the Excess Profits Duty has taken a big slice of them, there has been an increase in the Income Tax, and there has been the coal mines excess payments. All these items have taken so much from the coal-owners that they have been no better off and possibly worse off, during the War than they were before." This Return gives the actual profits received by the owners after deducting royalties, Mineral Rights Duty, Excess Profits Duty, Coal Mines Excess Payment, and Income Tax. In the last column you get the actual net profits of the coal-owners. Let us take the pre-war period and since. In 1909 their net profits were £8,591,000; in 1910, £8,846,000; in 1911, £6,571,005; 1912, £16,248,000; 1913, £20,464,000. During the War we got these figures, after making deductions for 1706 Income Tax and everything else: 1914, £12,364,000; 1915, £21,522,000; 1916, £28,590,000; and 1917, £15,473,000.
§ Brigadier-General CROFT
What does the hon. Gentleman allow for the fact that the sovereign is now worth only 9s. 6d.?
§ Mr. HARTSHORN
Every right hon. and hon. Gentleman will be able to put his own valuation on the figures I have given. But they show that the coal-owners have received per annum, during the four years of war, profits enormously in excess of anything they got before the War, after they had paid everything in the form of royalties, and every other item. Now I come to the real position as to 1913. In 1912–13 we had the best two years in the history of the industry. What happened? Under the Control Agreement, the coal-owners were entitled to take the average of the best two of the last three years. Naturally they took 1912 and 1913, and so they have taken their basis for pre-war standard profits, the best two years they have ever had in their history; consequently all through the War, before the Government have been able to take anything to assist the finances of the country, the coal-owners have been able to maintain the abnormally high standard of profits which they secured during those two particular years. How did they come to have these exceptional profits in those two years? Chiefly because the miners in nearly every coalfield in Great Britain had in their Wage Agreement what is called the minimum and the maximum. We had got standard rates, but on the top of these we were entitled to a minimum and maximum percentage, and it did not matter how high the price of coal went, we got no more than the maximum percentage. During this period, although the price of coal went up enormously, the miners got not one cent out of it; the whole of the surplus prices went into the pockets of the owners, and they were able to establish a standard of profits which is far above the normal state of the industry, and have been able to maintain it all through the War before ever the tax-collector could come upon them for a single penny.
I do not think the coal-owners are playing the game in kicking up all this fuss about this attempt on the part of the Government to carry out what they regard as the pledge they gave to the miners in relation to the Sankey Award. 1707 Surely everybody who was here in March last will know that that pledge was given not with a view to the limitation of profits at all, but with a view to coercing the miners. We had refused to accept the award. We had said we wanted 30 per cent. increase, and we were only offered 20 per cent. We had asked for a six-hour day and we were only offered a seven-hour day. Therefore we were not prepared to accept the Report. But that was not the only Report which was issued. There were three Interim Reports. The one the Government accepted was signed, I think, by only four members. There was another which was signed by six, and we said the Government had no right to set aside the Report of the six men and to pick and choose the one particular Report which suited them. The Leader of the House came down and said the Government were in a mess, that they had gone through Justice Sankey's Report, and they were going to stand by that Report against all comers, and in fact, if the miners would not accept it, let them put up a fight, and the Government were prepared to use all the resources of the State to compel them to accept it. We took a ballot vote of our members, and upon that vote we agreed to accept the Report, and to accept the Government decision. Why is it that the coal-owners, having regard to the very splendid time they have had all through the War, are kicking up this fuss at this moment because there is a proposal to limit their profits, not below what they were having before the War, but to fix a limitation at a substantially higher figure than they ever had before the War at any time in the history of the country, except one or two occasional years?
But that is not all. This is. 2d. is not all the profit that the coal-owners are being given. In the five pre-war years they got 1s. a ton profit. That was their average profit on the coal produced. But that 1s. a ton included all the profits they derived from coke and the by-products, and we were told in the evidence put before the Committee that the profits on coke and by-products were, at least, 6d. per ton, spread over the whole coal output of the country. If you take that basis, you are getting 1s. 2d. per ton plus, at least, 6d. per ton in the aggregate. But I am going to show that it is a much bigger sum, if you take the evidence put before 1708 the Commission. In any case, you get. 1s. 8d. per ton, as against 1s. per ton before the War. Then we have certain other concessions made in this Bill which add somewhat to the 1s. 2d., which is the nominal amount; so that, so far as we on these benches are concerned, we think Mr. Justice Sankey, in fixing 1s. 2d., was absolutely fair to the colliery owners. We are not objecting to the provisions of this Bill on the ground of that 1s. 2d., and we are not opposing this Bill on the ground that the Government are carrying out their pledge in this respect; but we are opposing for other reasons which, in as few words as possible, I will endeavour to explain to the House.
The first thing I would like to mention is that one of the greatest objections which we have to this Bill is the period for which it is to run. This Bill comes to an end on the 31st March next. It does not in the least matter to us whether the 1s. 2d. is paid up to the end of March or not. That is too trivial to talk about. It leaves us cold. We are uninterested in it entirely, and if that is all that is meant by this part of the Sankey Award, as far as we are concerned, we have no interest in it. But we do not understand the Sankey Award to mean that, and I do not think, in view of what the Leader of the House said, that the award was to be accepted in spirit as well as in letter, that it is possible to read that interpretation into it. The Government take the opposite view. I am not going to find fault with them on that score, but we do say that if it is to be given this limitation we have no further interest in it. But we have other reasons for our attitude than the one that the 1s. 2d. is to come to an end then. The hon. Member for the Exchange Division of Liverpool (Mr. Leslie Scott) was very anxious to get an assurance from the Government that while the pledge is being carried out nothing more than the pledge shall be attempted in this legislation—that the Bill shall be limited to the pledge and nothing more. As far as we are concerned we are not very much troubled about the Bill not going beyond the pledge but we are anxious that the pledge should be redeemed. There is something more in the Sankey Award than the 1s. 2d., and I would like to read this paragraph:We recommend the continuance of the Coal Mines Control Agreement (Confirmation) Act, 1918, subject to certain suggestions indicated in our Report.1709 Do the President of the Board of Trade or the Leader of the House contend that that recommendation is carried out in this Bill? With that recommendation, that agreement goes on for six months after the War, but under this Bill, so far from continuing it it repeals it as from last April. That is one of the chief objections we have to this Bill. It is a vital objection. It is vital because we know that, once this Bill becomes an Act, when we reach the 31st of next March we shall have got into a state of chaos in this country which will be worse than anything ever experienced in the mining industry during the lifetime of any of us. It is for that that we are opposed to this Bill, and unless we can get some of these provisions changed, we shall certainly vote against the Bill.
During the War, we have had an entirely changed method of dealing with the wages system as compared with pre-war practice. Before the War every coalfield built up its own wage system on what might be termed the economics of the district. If you have got a district where an inferior quality coal is being worked at a high cost, experience has taught us that the wage for that district could not be nearly as high as that in some of the more profitable coalfields. And so we had a district system of wages built up. But during the War we have gone into federation. The coalfields of Britain have gone together, and have received a flat-rate advance. We have had 5s. a day, in the form of 3s. war wage and 2s. Sankey award. By this Bill control ceases, or at any rate the agreement which makes control effective comes to an end, on the 31st March. That places the colliery-owners of this country in the position of going back to where they were before the War. The colliery-owners in some of the coalfields of this country will be obliged to do one of two things under this system: they must either raise the price of coal or close their collieries. The President of the Board of Trade recently reduced the price of coal for inland domestic consumption by 10s. a ton, simply because he was able to use the surplus that came from the export districts in order to make up the deficit. But if we are going to abolish the Coal Control Agreement, and the export districts are to run the show on their own, and the home consumption concerns are to be worked on their own, what is going to happen? A very substantial increase in 1710 the price of coal is bound to take place in some of the home-consumption colliery districts, and we say that that means a very disastrous state of things as far as this country is concerned. But we know also that if you once abolish the policy of control, and get back to the old times, you will have in one part of Scotland an application from the owners for a reduction in wages, and from another part of Scotland an application—quite justifiable—for a very substantial advance in wages on prices alone. We can go down to South Wales to-morrow, on the selling price of export coal to-day, and demand a very substantial advance in wages. Before the War our wages have always been regulated according to the selling price of coal. To-day we see those miners who work in an exporting district exploiting the conditions that arise out of the War. Let us have a sort of general average, and let all the miners engaged in the industry have a little bit, instead of some having all and others none. We have gone on that basis for two or three years. If you attempt to revert on the 31st March, you will have applications for reductions in wages in some parts of the country, and you will have applications for advances in others. Of course, I do not believe at the moment that the Government intend to leave the mining industry where this Bill places it. The industry is in an impossible position under this Bill, but we want to know what is to follow. The right hon. Gentleman said that there will be certain Regulations after the 31st March. After the 31st of March is too late; whatever is done wants to be done before this Act terminates, otherwise we shall be in a very serious situation.
This matter was discussed this morning at the Miners' National Executive, and the feeling was that the Government had submitted to the pressure that has been exerted upon them, by the representatives of industry in this House, to abolish control, to get back to the old days of private ownership without any limitation of profits, and to put us back where we were before the War. I certainly think this Bill does that, in the absence of anything else, and we have nothing else before us. The executive certainly was bound to come to a decision as to this Bill with this Bill only before them. I think this House may take it—I do not say it as any sort of threat, and I hope it will not be taken in that spirit—that the conditions that will 1711 develop after the 31st March will be of such a character that the Miners' National Executive, no matter how well-intentioned they may be, will find it absolutely impossible to avoid chaos and a terrific eruption in the mining industry of this country, as the result of what will come into operation after this Bill comes to an end. That being the case, we say it is infinitely better that we should have a continuance of the Coal Control Agreement until such time as the Government have made up their minds as to some sort of policy, and let us know what their policy is to be. We, of course, stand for nationalisation, and do not hide it at all. We are prepared to do all that we possibly can to induce the nation and the Government to accept it. If they do not, then we shall get something, but in any case we shall get nowhere from this Bill.
With reference to Clauses 9 and 10 of this Bill, if hon. Members will read those Clauses they will find that they aim at continuing the fatal policy that has been pursued by the Board of Trade up to now—the policy of maintaining silence and secrecy, of hiding the facts of the industry, and not letting anybody know what is going on in the industry. Not only shall we not have the facts published, but we shall not even be allowed to go and talk about them or to see them until we have sworn a declaration of secrecy. That is the sort of idea that has dominated the Government's mind. I do not care what their future policy is to be; if they bring that kind of idea into it it will fail, whatever it is. May I just read what the Commissioners say about this in their second Report, after they have made a very exhaustive investigation of the whole situation? We have had four Reports, and it is remarkable what unanimity exists on this particular question. As far as this one point is concerned, there is no division of opinion among all the Commissioners. Mr. Justice Sankey says:The following statistics ought to be made public: The quarterly financial return from each district; the output from each district; the numbers of persons employed above and below ground; the cost per ton of getting and distributing coal, showing the proportions due to wages, material, management, interest and profit; the amount of coal produced per man per shift; and the amount of absenteeism.That is to say, the facts of the industry ought to be made public, and our representatives were in substantial agreement with the chairman as to that. Then we 1712 had another Report, signed by three colliery-owners and two other captains of industry, and they say this, in dealing with the scheme that was submitted by the Coal-owners' Association:The authors of the scheme contend that want of knowledge with respect to prices, costs, and profits, and the absence of machinery conferring upon the workers opportunities for obtaining information and influencing the conditions under which they work, have been to a great extent the cause of the existing discontent.The coal-owners themselves say:Machinery ought to be set up. This information ought to be made available,and yet we get in this Bill, "Keep it dark."
Then there is one other Report, and that appears to be the Report upon which the Government say they are going to build their policy. Let us see what that gentleman said about it—It is essential that there should be complete publicity as to the operations and financial results of the coal industry. The Ministry of Mines should be expressly charged with the duty of publishing, not less than once a year, figures showing the cost of getting coal in each of the districts of the country, and the proportions chargeable to material, wages, general expenses, interest, profits, and other general items.In other words, let the mine-owners, the miners and the general public know the facts relating to the mining industry. I want to say, as a Labour leader, and as one who has had a considerable experience of dealing with wage disputes, that I have on scores of occasions, told the general managers with whom I have done business, "You ought to let these facts be known to the workmen." If you only let the workmen know the facts you will get rid of much suspicion, and I am prepared to admit that there is a great deal of misunderstanding in the minds of the workmen, and also in the public mind, both as to the profits of the owners, the wages of the miners, the cost of production, and everything else. You sometimes hear it said, "There you are, the collieries get half-a-crown a ton, and we pay £2 10s. What is happening to the difference?" To a practical man the explanation is simple, but these facts are not made known as they ought to be, and this Bill says, "Oh, no, keep it dark." We have had enough trouble since last July on this score. Has anybody been able to get at the facts? Has anybody been able to ascertain what really are the facts of the mining industry? Nobody at 1713 all. And now we are told that it is to be come a closed box, and that nobody is to have any access to this information. We are anxious to see a settlement of the mining industry on terms that will enable us to get a very much larger output of coal, so that a filiip may be given to the industries of this country, and yet here is the Government coming on with another policy that is bound to lead to disaster. We are not being asked what we think about it, nor are the coal-owners; we are getting it dumped on us. We want to give a warning to the House and to the country. If this Bill passes, and the state of things materialises which it aims at setting up after the 31st March, an impossible position will have been created in this country such as none of us can control, and such as may have very fatal consequences.
§ Sir E. CARSON
I beg to move, "That the Debate be now adjourned."
I have not risen to discuss the main features of the speech of the hon. Member who has just sat down, nor, indeed, am I competent to do so, but I should like to know where the House stands at the present moment. I am one of those who approached the consideration of this Bill, when it, was printed, not from the point of view of the coal-owner, nor from the point of view of the employé, but from the general point of view of the community at large; and I am bound to say, frankly, that I thought it one of the most mischievous Bills that I had read for a long time. In the first place, I do not believe in this attempt to guard against Bills being precedents by statements in the Preamble or statements in this House. Every Bill creates a series of circumstances and results over which you have no control. It is the circumstances and the results, and not the statements in this House which will regulate whether a Bill is a precedent in the future or not. I also dislike it for this reason. I believe any such Bill as this inevitably leads to nationalisation. You cannot create these dual interests and these controls without it being said fit the end: "This is a vicious system, and we must get rid of it, and the only way to do that is to buy out the owners and nationalise the industry."
On the other hand, when I read the memorandum attached to the Bill I found that the Government had given a pledge. Of course it is a truism that the pledge does not bind the House, but for the 1714 Government to break the pledge, under the circumstances in which we are met above all things, is a matter to make one pause before you try to force them to break a pledge, and I should like hon. Members to consider what it would be if you had an agitation, which is at any time ready to break out, and one of the excuses was that the Government had made a pledge in a different atmosphere from what we have now, and had then gone back on it. I do not think even my objections to the Bill would have been strong enough in my own mind to enable me to vote against it and thus try to make the Government break their pledge. But as I look at the situation now I think that is entirely changed. Hon. Members opposite, whom I may call the other party to the arrangement, say this carries out no pledge as I understand it. The hon. Member (Mr. Hartshorn) has said the passing of this Bill will be disastrous. I should like to know under these circumstances where we stand. What is the good of our going on discussing this matter unless we know now what the effect of the different position is upon the intentions of the Government. What is the good of our arguing this, that, and the other about the Bill when we do not know whether the Government are affected by the fact that their attempt to fulfil what they believe to be a pledge has now been repudiated? I do not think you can carry on business under these circumstances, and I think at the earliest moment the House requires now the clearest guidance from the Government of how they view the situation and the clearest intimation how they view the fact of the fulfilment of their pledge being now repudiated by hon. Members opposite. In order that we may have an opportunity of hearing such an answer from the Government, though I should be prepared to withdraw it if one of the Government gets up, I beg to move that the Debate be now adjourned.
§ Mr. BONAR LAW
I am, like my right hon. Friend and others, in a difficulty, and if it were not for the near approach of the end of the Session I should have no hesitation whatever in moving that the Debate be adjourned till we see where we are, because what the hon. Member (Mr. Hartshorn) has said entirely alters the situation. He is a member of the Miners' Federation. It was to that Federation that we gave the pledge, and the fact that it cannot be broken by a decision of the Labour party 1715 is obvious for this reason, that it is not merely a pledge to the Miners' Federation. The miners took a ballot as to whether or not they would accept our proposal. The ballot decided that they would accept it, and, obviously, no decision of the Labour party, as a Labour party, can free us from the pledge we gave under those circumstances. But now that the hon. Member (Mr. Hartshorn) has said he prefers the continuation of the agreement—it is quite obvious that he is speaking for the Miners' Federation. I can take that as being the view of those to whom I gave the pledge?
§ Mr. BONAR LAW
That really puts the matter in an entirely different position. The difficulty in which I stand is this: It is not my fault, nor I think anyone's fault. I think we are free to reconsider the position from the point of view of the pledge. I hope the representatives of the Miners' Federation will agree with me there. But all the finance of the year since 20th March has been based on this method of dealing with it. The result would be that if we went back to the Coal Mines Agreement we should get into a financial position which may mean an enormous loss to the Treasury. This whole question of control is not liked by anyone, and it got into such a position that the coal-masters are not allowed to sell their coal at a fixed price. Control is not confined to that. If one coal-master wants to sell coal at 60s. for export and his colliery is in such a situation that the Coal Controller says it is a waste of energy and of transport facilities to send it for export, and he must sell it inland at a price perhaps something like half what he could get by selling it for export, see what follows. Under the Coal Mines Agreement Act the individual coal-owner gets whatever profit he can make on the price at which he is permitted to sell, less the percentage which he gives for the Excess Profits Tax. Take, for instance, big colliery owners in Scotland or the North of England. They can sell and have been selling the whole of their output at these absolutely monopoly prices. They get into their own pockets all the advantage of this monopoly price, less what is taken from them by the Excess Profits Duty, which is now reduced to 40 per cent. On the other hand, the coal-masters in the inland areas, who have to sell to a particular market at 1716 fixed prices, are in many cases selling below what it absolutely costs them to produce the coal. See what that means. By the arrangement on which this has been financed it is all put into a pool. The coal-master who sells at the export prices does not get an advantage through the luck of his being allowed to choose that market, but it all goes into the pool, and all the coal-masters who are under dictation, and are not allowed to sell freely, are put on the same footing and get the same share of the profits. If you go back to the Coal Mines Agreement, this at once follows. The coal-owners who are making these enormous profits, which neither the Government nor the House nor the-country would have allowed them to make with these monopoly prices, will be-allowed to keep these profits, and the Treasury will be called upon to make good the losses which are incurred by the inland collieries.
§ Sir C. CORY
I think the right hon. Gentleman is under a misapprehension. Under the Coal Control Agreement they only got, before the Finance Act, 5 per cent. of the excess profits. Now, under the new arrangement with regard to excess profits, they only get 15 per cent.—that is, 10 per cent. more—and not the whole.
§ Mr. BONAR LAW
I never said they did get the whole. If you take a price twice that at which coal is selling inland, and allow the coal-owner who gets that price to have his pre-war standard, and, in addition, take 15 per cent, of the excess, he is obviously getting, at these absurd monopoly prices, in spite of that limitation, enormous profits.
§ Mr. BONAR LAW
No; certainly not. I am in this difficulty. I should at once adjourn the Debate if we had longer time, but the finance of the year must be allowed to be arranged. If we put this off till the House met again it would be very difficult to do it, and I am afraid in the interval the Treasury would be called upon to meet the losses incurred by these inland collieries. It is very difficult to agree to an Adjournment in these circumstances.
§ Mr. BONAR LAW
Once the Second Reading is passed everyone, mine-owners and men, will regard the principle as absolutely settled, and we shall get the money in from the Treasury. That is the position. I should be very glad if I had the opportunity to argue this on its merits, but I cannot do that. I must deal only with the Adjournment. In view of the change in the situation, which is created by the fact that the representatives of those to whom we gave the pledge say that they would prefer the Coal Mines Agreement, I do not think I could ask the House to give a Second Reading to the Bill now. What I wish to do, and I hope the House will assist us in this, is to have the exact financial effect of the change examined. Let us see exactly what going back to the agreement would mean from the point of view of fairness to the coal-owners and fairness to the Treasury. I hope it may be possible to do that between now and tomorrow. I am afraid that we cannot go back to the Coal Mines Agreement, and that we must have some other method of meeting the situation. What I am going to do now is to accept the Motion for Adjournment on this understanding, which I am sure the House will give, that if we find it necessary to ask for a Second Reading of this Bill to come on at a later stage, they will take into account the hours we have spent on it and try to reduce the discussion in consequence.
§ Mr. BONAR LAW
I think it is the right hon. Gentleman and his Friends who have got us into this difficulty.
§ Mr. BRACE
I wish I could take it to ourselves, as mere modest politicians, that we were able to get the Government into an awkward situation. We have not, I assure him. It will be a mistake for the Government to take the view that we are opposing this Bill because we are not in favour of the limitation of profits. We are most strongly in favour of the limitation of profits. I hope the House will pay us the compliment that we have some regard for the welfare of our country, and when we came to examine this Bill to-day we found a satiation created that really staggered us. Under Clause 13 the old order passes, and if this Bill 1718 was allowed to become law we should on 31st March, 1920, be faced with a condition of chaos, a condition of things in the, mining industry reaching a revolutionary atmosphere. Let that not be forgotten. That is the position. This Bill wipes away all the conditions of employment which exist now. What is the Government going to put in place of the present control? We shall have no system for regulating wages, no system for regulating profits, no system for managing the industries. The result would be that on 31st March, if we allowed this Bill to pass into law, we should have no system under which our workmen's wages would be regulated, and we should be faced with a general strike in the mining community. That is why we are opposing the Bill, not because we object to the limitation of profits. We say to the Government, "You ought not to live from hand to mouth in matters of this kind. You ought not to be operating your Parliamentary policy upon the principle or from the standard of expediency." The Government ought to have a clean-cut programme and proposal for dealing with the situation. If they want to abolish the control, if they want to abolish the old order, then they ought to come to the House with their new order. Under this Bill, automatically, the present arrangement comes to an end on 31st March, 1920, and there is nothing to take its place.
The War did much more than destroy Kings and Emperors. The War has created an absolutely new school of economic thought amongst the workmen of this country. They will not stand by, and see the old condition of things being continued, and they must be given to understand quite clearly where they stand and where the Government stands. If the Government comes down to the House with a Bill of this kind, they must also come down with a scheme to take the place of the present economic order which is in operation in the mining industry. If my right hon. Friend is going to take the Adjournment with a view to preparing the scheme which is to take the place of the existing order on 31st March, we agree to the Adjournment, and if he will come down and say, "At last, not because we like it, but because of the pressure of economic circumstances, we have been driven to adopt nationalisation," we shall think that the Adjournment will have been of great national value. In any ease, I must make it quite clear to my right hon Friend that whenever he comes 1719 down with this Bill, whether it is to-night, to-morrow, next week, or next Session, unless it is accompanied with a clean-cut, understandable scheme under with the mines of this country are to be conducted, we shall oppose this Bill upon these grounds. We dare not allow this Bill to become law. We dare not allow such a condition of things as I have described to be created, affecting the great mining community, with more than 1,000,000 resolute fighting men, and the conditions under which they work. These are the reasons why the Miners' Federation came to the -resolution they did. They say:The reason why we cannot accept this Bill is not because we are against limitation of profits by law, but because this Bill contains no provision for working the coal mines of the United Kingdom or regulating workmen's wages or limiting coal-owners profits after March. 1920.That is why we are opposing the Bill, and I should mislead my right hon. Friend if I allowed him to take the Adjournment under the impression that if he comes down to-morrow or next week with this Bill that we shall not oppose it. We shall relentlessly protest, under the opportunity which this Bill gives us, against allowing the old order to pass without the Government coming down with a clean-cut programme which will establish the new order in such a way that everybody will understand it. In saying this, I speak not only for the Miners' Federation but I speak for the Labour party, and I appeal to the Government to let us have some kind of understandable, clean-cut programme for the management of this great industry, which has reached a state of chaos and confusion that it is a danger to the State and it is becoming more dangerous day by day. It is no use simply to talk about this Bill as the redemption of a pledge. We ask the Government to redeem their pledge upon nationalisation. That is the- only redemption of a pledge that will meet the situation, in the opinion of the Labour party and of the Miners' Federation.
§ Mr. BILLING
Will the right hon. Gentleman not put this matter to the issue now? It seems to be perfectly clear from what the last speaker has said on behalf of the Labour party that they are ready to wreck this Bill now and at any other time. The essence of the economic and industrial situation at the present time is that we should have a clean-cut pro- 1720 gramme, and if the programme embodied in this Bill is the best that the Government have to offer, the sooner the issue is settled the better. I appeal to the right hon. Gentleman to press on with the Bill or scrap it, and not to postpone it. It is in the interest of getting something done that I appeal to the Government to stand by this Bill.
§ Mr. BONAR LAW
I would like to appeal to the House, now that we have agreed to the Adjournment, not to take tip further time by discussion. I want to point out to the hon. Member who spoke last that it is not so simple a matter as he seems to think. This Bill was really introduced purely as an interim measure. It is nothing else. It was brought in entirely in accordance with the pledge we have given. There is no object in pressing on with this Bill in this form unless it satisfies those to whom we gave the pledge on the one hand, or unless it, is necessary on account of our having worked so long on this system to do this for the sake of our financial arrangements. I should be very sorry to do that. It is not a case of having pressure put upon us by the industrial side, as was said by one hon. Gentleman. I do not think anyone, including hon. Gentlemen opposite, likes limitation of profits or limitation of the share which the owner gets which assumes a form which takes away all incentive. I cannot imagine anyone liking that, and we only agreed to it because it was to meet, an emergency. It is impossible that we could take an issue upon that as our policy. We had to get rid of our undertaking in regard to the Interim Report of the Sankey Committee before we could attempt to bring before the House a further policy for dealing with this industry. We have to do that in one way or another. I hope it may become possible, perhaps by some agreement with the coal-owners, since the Miners' Federation take no interest in the matter, to arrange the finance without going on with this Bill
§ Mr. BONAR LAW
I know they take an interest in the coal-owners not getting profiteering profits, but since they do not take any interest in the method I hope it may be possible by agreement to get our financial arrangements made without proceeding with this Bill. It would not be right for the House to go away with the impression that this Government or any 1721 conceivable Government, if the state of things in the coal market continues as it is to-day, is going to allow control to disappear on the 31st March. That is absolutely unthinkable.
§ Mr. BONAR LAW
It does, unless another Bill conies. It is no use having any disputes about that. What the House wants to know is the attitude of the Government on this point, and I say that that in the view of the Government is an unthinkable proposition. The price of coal to-day is a monopoly price, which is due directly to the War. If it was left to the free play of the market I do not think there is any doubt, in view of the fact that we must, if we have any money at all, buy coal, that the price of inland coal would rise to a figure which would make the whole nation rise in indignation. That is a matter with which we have got to deal apart from other considerations. It is easy to say, "Why have you not got some cut-and-dried scheme?" but that is not so easy. Here are conditions which are changing from week to week. We are blamed for the fact that we put on 6s. in one week and took off 10s.—though a different kind of 10s.—another week. My Noble Friend (Lord R. Cecil), however wicked he thinks we are, does not think that the head of the government is stupid in electioneering, and if the object of taking off the 10s. was electioneering, he would scarcely have done what he actually did—that is, after discussing for two or three days, coming to a decision after four by-elections had taken place. So I think that we may dismiss that. The whole of the difficulty is this: It is not the want of clearness of my right hon. Friend. He was told by his accounting authority that the 6s. was necessary in order to get a balance between profit and loss. He may have been right or wrong, but we offered the hon. Gentlemen opposite the appointment of a Committee. The Committee could have reported whether it was right or wrong. Then, owing largely to the American strike, the price of export coal rose to a figure that no one could have foreseen. You have got to deal with changing situations, and I can only say that not merely my right hon. Friend but the Government realise that we must try to get some stability in this matter, and I, for one, am thankful, and I think it was necessary, that there should be an interval 1722 at the end of the Session which will give us all some kind of chance to have time to think about these things and to have some proposals to give to the House of. Commons when we reassemble.
§ Sir C. CORY
I claim the indulgence of the House to correct what I think was an unintentional misleading of the House by the right hon. Gentleman as to the export profits of coal. The coal-exporting collieries do not get anything more than the pre-war standards.
§ Mr. HARTSHORN
I gather from the right hon. Gentleman that he is very firm about allowing these firms' profits to go into the coal-owners pockets, and he says that, since we do not take any interest in it, he will probably be able to make arrangements with the coal-owners themselves. Our case is that you can get all that under the Sankey award if you will apply the Sankey award. All that it requires to be done is this. Mr. Justice Sankey sayswe recommend the continuance of the Coal Mines Agreement Confirmation Act, 1918, subject to certain alterations indicated in our Report.The 1s. 2d. is one of the modifications, which he proposes in that agreement. We-say: Continue the agreement with that modification until you have got your coal policy determined upon. There is no reason why that should not be carried into, effect, and it is only because you are not carrying out the recommendations of the Sankey award and are discontinuing the agreement, against the recommendations, that we are opposing this Bill. If you are prepared to adopt the Sankey recommendations, you are out of your trouble and we will cease to oppose this Bill.
Question put, and agreed to.
Debate to be resumed To-morrow.