HC Deb 27 October 1919 vol 120 cc431-40

Whereupon Mr. SPEAKER, pursuant to the Order of the House of 22nd October, proposed the Question, "That this House do now adjourn."


I want to ask the President of the Board of Trade whether the time has not arrived when the price of coal in this country may be reduced. The House will remember that in July the right hon. Gentleman produced a White Paper which, in his opinion, justified his raising the price of coal by 6s. per ton. He arrived at his figures by taking the quarter ending 30th September, 1918, and showing that on the figures thus produced a profit of £40,000,000 a year might be made on coal. He then pointed out that additional charges by way of increased wages and so on to the extent of £86,600,000 had been incurred, and that consequently there would be a deficiency of £46,600,000, and [...]that deficiency it was necessary to raise the price of coal by 6s. per ton. On the occasion, when we debated that matter in the House, I ventured to call attention to three points on which the White Paper appeared to me to be inaccurate. In the first place, I pointed out that the President had not taken into account the fact that the colliery companies of the country had been allowed for five years to reserve year by year a certain sum to provide for further repairs, for reopening districts which they had closed during the War, and for driving in post-wartime hard headings which they were unable 'to tackle through shortage of labour. The colliery companies are doing this work at the present time, and they are employing thousands of men on it. Then have in hand the money to pay the wages and the cost of materials required for reopening districts, driving hard headings, and for repairing, and therefore the sums being paid out weekly for materials and wages for this work by the colliery companies should not be charged up against the estimated expenses of the year in arriving at the deficiency of £46,600,000.

In the second place, I ventured to suggest that there was a miscalculation with regard to the profit which would be made in this present year in respect to export and bunker coal. The Coal Controller had estimated that we should only be able to sell 23,000,000 tons in the coming year, instead of 34,000,000 for export. That would be a loss of 11,000,000 tons. He estimated that we should lose, therefore, a profit of £1 per ton. In what I may call the standard period, on which this whole calculation was based, that is the quarter ending 30th September, 1918, the profit on the export of coal was not £1 per ton but 10s. 0.38d. The calculation, therefore, was £5,500,000 wrong in that respect alone. But, the position with regard to the export of coal, that we should only make during this present year 10s. a ton, is altogether wrong now. I will deal with that point in a moment. The third point upon which I ventured to criticise the figures was that the President of the Board of Trade had reserved 1s. 2d. per ton for the coal-owners. This was in accordance with tile Sankey Report, but the Sankey Report said that the coal-owners were to have is. 2d. per ton, including all profits on coke and by-products. In the standard period the £40,000,000 profit, which was the rate during the quarter ending 30th September, 1918, includes the profit on coal only and not the profit on by products and coke. Therefore, in making your calculation for the present year, if the Government are going to accept the Sankey Report, and allow the coal-owners 1s. 2d. per ton, including coke and byproducts, you must deduct from your figures the profits on coke and byproducts. Those were the three points which I ventured to criticise at the beginning of July, when the matter was debated. In the White Paper it was calculated that we should have during the present year an output of 217,000,000 tons of coal. What is the present position? The miners have not adopted a "Ca' canny" policy. When the seven-hour day commenced there was, unfortunately, a strike in Yorkshire, so we did not get a normal output forthwith. During the four weeks ending 27th September we had an output which is at the rate of 234,000,000 tons a year. It has dropped again owing to the railway strike. But that month was a test month, which showed conclusively that, even allowing for the unfortunate stoppage in Yorkshire during July, allowing for the effect of the railway strike, and allowing, if you like, for another disturbance of some sort or other before next July, we can look forward to getting much More than the estimate of 217,000,000 tons which the President put clown in his White Paper. We must also remember that while there was a loss of output in Yorkshire during July owing to the strike, on the other side of the account the coal-owners did not have to pay any wages to the miners.

The new point, the important point, is this: That we are able to do an export trade in coal far beyond the estimate of the White Paper. The President estimated 23,000,000 tons for the next twelve months. He gave me this afternoon, in reply to a question, the amount of exports for August and September, and they are at the rate of over 30,000,000 tons per annum. So there is no doubt we [...]be able to continue our export,[...]satisfactorily. But the profits [...] making on the export trade are beyond all anticipation. The President said this afternoon that he could not state what the prices of export coal were at present. I can tell him that the colliery companies which are able to do a large export trade—all collieries are not able to do it—are making profits not only far greater than was anticipated, but absolutely beyond all imagination. These records should by this time be in the Coal Controller's office, because he has monthly returns from all colliery companies.

That being so, having regard to the fact that this Gs. rise was only justified in the main by saying we were going to lose £11,000,000 on the export of coal, and that the amount of export of coal is not reduced, and the profits which we are getting from the export of coal are far beyond all anticipation, there is surely good ground for saying that the 6s. increase in the price of coal should not be continued. I should like the right hon. Gentleman to tell me how much coal the Admiralty arc having at present as compared with this time last year. This time last year we were still in a position of war. Perhaps I should take the quarter ending September, 1918, which is the standard period for this calculation. The submarine campaign was in full swing. The Admiralty must have been using an enormous amount of coal. They were getting it at a cheap price. The Admiralty have never paid a real profit to the coal-owners; they have always been far below the market price. At present they must be getting far less coal than in the standard period; that leaves far more coal to sell to other people at a larger profit, and it should be taken in in this calculation. The points I want to put to the President of the Board of Trade are these. If he will remember the White Paper, and in the first place allow for all the money held by the colliery companies for deferred repairs, for driving hard headings, reopening districts, which they are now doing, and which should not be charged against the profit and loss account of the present year, that he will allow the increased profit beyond anticipation which is being made on the coal that we are selling for export and for bunker purposes (for we are also selling more coal for bunkers than was anticipated); in the third place, that he will take into account the fact that the coal-owners are to have 1s. 2d. a ton of all profits, including those on coke and by-products, whereas in his calculation he only included the profits on coal; and further, if he will take into account the tonnage which the Admiralty is using as compared with the standard period, and so allowing more coal to be sold profitably outside. After taking into account all these considerations, does he still maintain that the rise of Gs. a ton is justifiable?

11.0 P.M.

The PRESIDENT of the BOARD of TRADE (Sir Auckland Geddes)

The hon. Member has ranged rather beyond the area which I had expected him to cover from the notice he gave earlier in the day. I therefore am not prepared at the moment to follow him into some of the points he has raised with regard to figures, as to which I should have to rely on a recollection now some weeks old. The facts broadly are these. At the time when the 6s. increase was made in the price of coal we estimated that the output for the year beginning in the middle of July would be at the rate of 217,000,000 tons for all purposes. Quarter of that year is gone. The actual ascertained output—I admit the disturbing circumstances— is at the rate not of 217,000,000 tons a year, but of something under 203,000,000 tons. I think it is 198,000,000 tons. It is quite true that the profits being made at tie present time upon the export of coal are high. We always believed they would be high in the first quarter of the year. It is quit e true that the profits made on bunkers is high. We always believed they would be high in the first quarter of the year. There is no real, new fact in the situation except this that in spite of the improvement of coal output in some places the actual ascertained output for the first quarter of the year is at a lower rate than we estimated. We have a loss on the coal control arrangement at the present moment which is being borne by the Treasury—a cumulative loss, not cumulative in the last three months because about that I have no accurate information—of £22,000,000. There is no great profit being made out of the coal control. I think it is known to my hon. Friend who, I am sure, is in a position to know, that the arrangement with regard to the accounts of collieries, which have been in force for some time, is that the accounts for a quarter are sent in two months after the quarter ends, that is when they are clue. It is true that a few come in at the end of the month after the close of the quarter. They dribble in during the second month, but experience shows that the majority of the collieries are late, and run a few days into the third months. It is, therefore, quite impossible of the present moment—as I told my hon. Friend earlier in the day—to say exactly what the profits are that are being made. I know quite well that the profits in a few collieries are very great, but when those profits are reduced to is. 2d. per ton, and when the surplus profit of these collieries is taken to make up the deficiency at the other collieries this great appearance of profit-making will, at all events, to a large extent, disappear. The hon. Member seemed to think that the Board of Trade or the President of the Board of Trade took some malignant delight in having coal at a high price. There is absolutely no truth in that. From the official point of view and the point of view of my office, there is nothing that I long for more than to see the price of coal down. It is of great importance to the whole country. I would like to see the price of coal down, for bunkers especially. The charge for bunkers is now very high. That is adding to the cost of everything that is imported. It is keeping up freights, and we are at present working on such estimates as we have got, seeing what can be done without calling upon the Treasury for a further subsidy, to reduce the price of bunker coal.

I am not yet in a position to say whether it will be possible or not, but I am sure that all those who have looked into this matter will agree that the reduction of bunker coal is an urgent matter. The prices are very high. For freights from London in some cases the price is over 100s. per ton, and when you think of what that means, 1,500 tons being put on board, you realise what the bunker bill will be of a boat sailing from the Port of London. Say a steamer is bound to Australia, with no great cargo going outwards, to bring home food—meat or wheat—from Australia. The whole of that price of coal has to be borne by the food. That is one of the reasons for the high prices of imported food at the present moment—one of many reasons. Perhaps it would be more accurate to say that it is one of the contributory causes for the rise in the prices of imported food. So I can assure the House that the Loam d of Trade is most anxious that the price of coal should be brought down at the earliest possible moment consistent with avoiding adding to the subsidies which the Treasury has had to give for coal. There is perhaps one main point that I must refer to. That is the point made by the hon. Member when he said that the profits of coke ovens and by-products were included in the 1s. 2d. per ton. That is [...] the Sankey Report. At all events I can [...] him that there is a misunderstanding.


That is in his own version which has been transcribed from the shorthand notes.


I am afraid that I do not quite understand what the point is.


The right hon. Gentleman met the coal-owners last April and told them that his version of the Sankey Report was that the 1s. 2d. per ton included the profits on the coke ovens and the by-products. I have got a copy of that.


Yes; but the hon. Member is mixing up two completely different things. There have been a great many discussions carried on, and a great many interpretations have been received of the Sankey Report, including one by Mr. Justice Sankey, if my recollection serves me aright, and it was my perfectly honest understanding of the Sankey Report, and after that, when Mr. Justice Sankey showed that it was not exactly what this Report meant, we accepted his ruling.


The fact had not been made public. I wanted the right hon. Gentleman to announce it to-night, and I am quite satisfied.


That point, then, is cleared up. That was the final point I wished to make. If this discussion has served no other purpose, perhaps it has served the useful function of clearing up that particular point, which, I think, is quite well-known to the coal-owners' associations. There is nothing further I can add except once again to assure the House that at the earliest possible moment we will bring down the price of coal, provided that bringing down that price does not mean a further subsidy from the Treasury. The Government stands by the assurance I was authorised to give at the time we debated this question, that if, as the result of increased output it is possible, we will reduce the price by a few pence—by 6d. or 1s.—we will not wait until July.

Lieut.-Commander KENWORTHY

Without touching in any way on the actual figures quoted by my right hon. Friend and the hon. Member (Mr. Holmes), I may say that this question of the price of coal is by general consent of immense importance to the industry of the country. The right hon. Gentleman says that nothing can be done in the way of subsidy to put the coal on the market at a lower price. Has that matter been fully explored? If coal could be put on the market now at a reduction of, say, 15s. a ton for twelve months, would it be possible by that means to give our trade and industry such a fillip as would be well worth while? The extra subsidy would then be recoverable in the extra taxation ‡available in the Excess Profits Tax and die other sources of revenue provided by increased trade. I throw out this suggestion with the greatest deference possible. We are in a vicious circle of rising prices, rising wages, and rising prices again, and we are having great difficulty in getting our trade and commerce going again. Would it not be statesmanlike to break the vicious circle by deliberately putting coal on the market at less than cost price? I think the matter is worthy of most careful consideration.


Can the right hon. Gentleman tell us whether, in regard to the reduction of the Excess Profits Duty from 80 per cent. to 40 per cent. that 40 per cent. has gone to the coal-owners, or whether the Government retain it? I gather that where a colliery has been making more than 1s. 2d. per ton the surplus is taken from it and given to less fortunate collieries. Is it the fact that no colliery is ultimately getting more than 1s. 2d. per ton profit?


With regard to the last part of the question, that would not be the correct view. Its share of what I may call the Profit Fund is arrived at by allowing 1s. 2d. per ton on the coal raised, and the fund is then divided between the various collieries in proportion to the profits allowed.


Is it correct to say that some collieries are making 5s. a ton?


I could not answer the particular point of what they will make when the 2d. arrangement is carried out. There will be some collieries making a dead loss. One cannot answer questions of that sort until the whole thing is squared up. I should not put it outside the range of possibility that seine collieries would get 5s. a ton. With regard to the point raised by the hon. Member for Hull (Lieut.-Commander Kenworthy) of putting subsidised coal on the market in order to help industry and lower prices, I would like to assure him that that proposal has been very fully examined, and the effects of that proposal worked out fully. The best economic opinion is that it would not help, but would have the opposite effect to that which the hon. Member anticipates and that instead of sending prices down it would mean in- [...]prices for internal consumption. [...] at present I think it is wiser to try [...]get rid permanently of any subsidy on coal and get prices clown on the merits.


May I have an answer as to the point about excess profits?


I cannot answer it. Question put, and agreed to.

Adjourned accordingly at Seventeen minutes after Eleven o'clock.