§ Mr. ALLEN PARKINSON
I beg to Move,That, in the interests of the coal-mining industry and of coal consumers, it should he the duty of the Mines Depart- 1690 ment to promote a system of co-operative agencies for the sale of coal.In moving this Motion, I desire to call attention to the Report of the Departmental Committee on Co-operative Selling in the Coal-mining Industry. It has been the recommendation, not only of that Committee, but of the Sankey Commission in 1919, that co-operative selling should be adopted in connection with this great industry. I know that it has not been received with favour by many people, but still, if we have the idea and the desire that this great industry should he re-established, that we should get the best out of the industry, it is necessary that we should take this matter in hand. The Samuel Commission on the Coal Industry, in 1926, stated that the present system of selling appears to carry competition to excess, and that the collieries would be well advised to establish selling associations. They say, on page 93 of their Report:For the rest, we are strongly of opinion that the collieries would be well advised to establish co-operative selling associations, The creation in the future of the larger undertakings which we envisage would make this easier.1691 And also, on page 94:In the exporting districts, the associations are especially needed. Their function would be to maintain prices at a remunerative level in those foreign markets where the competition is not so much between British and foreign exporters as among the British exporters themselves.Then they summarise their recommendations as follow:The industry as a whole has so far failed to realise the benefits to be obtained by a readiness to co-operate. Large financial advantages might be gained by the formation, in particular, of co-operative selling agencies. They are specially needed in the export trade.I presume—indeed, it is so—that it was on these recommendations that the Prime Minister or the Government set up the Committee which has been dealing with the question of co-operative selling in connection with the coal mining industry. While we agree, from our point of view that this ought to have been adopted following the Sankey Commission of 1919, we regret that it has taken seven years to get a move on in that direction. With reference to the question of cooperative and competitive selling, we have very little material to work upon, and it is rather difficult for us to find the evidence that it would be successful which it would probably be necessary to lay before the House. But, whether we are prepared and are able to find the necessary evidence or not, it does go without saying that the method of selling coal during the existence of the coal-mining industry has not commended itself to a large body of right-thinking people. It may have commended itself to the coalowners as a body, but I am not quite sure that it has done that, because, if my recollection serves me, I believe that two or three coalowners, in the evidence they gave before the Sankey Commission, themselves recommended that the co-operative selling of coal should take place.
What I have in mind now is the question of directly dealing, by an organised association, with the people who are going to buy coal. We have in mind the home market, which is a very difficult thing indeed. We have not in mind the idea exactly of only buying and selling through co-operative societies or through factors, but we have in mind the idea of setting up an organisation which will take 1692 the whole of the coal from the collieries, if that can be organised and agreed to by the coalowners, so as to dispense with factors and merchants and only employ that organisation. It is not only with the idea of doing away, with these people that we make this proposal. What we really want is a scheme applied by the industry itself. In the export market it is well known that, a multiplicity of sellers gives many and large advantages to the buyers. There is no organisation in the export trade of the country which would be able to get the best out of the selling of coal, and, where there is a multiplicity of sellers and would-be sellers, whether coal exporters or factors, it tends to undercutting and to giving the advantage in bargaining always to the buyer. Perhaps I may repeat a statement in the Report of Mr. Justice Sankey on this particular matter. He said:The export trade in coal has greatly increased, and the system of competition between many private colliery owners and exporters to obtain orders frequently prevents the industry from getting the full value of the article.He went on to say:The inland trade in coal has greatly increased, and the system of distribution through the hands of many private individuals prevents the consumer from getting the article as cheaply as he should do. It has been estimated that there are 28,000 coal distributors in the United Kingdom.In other words, there is underselling in the export trade, and overlapping in the inland trade. We have to realise that the difficulty under which we are suffering is one on which, as I have said, we lack experimental evidence to lay before the House, but we are quite certain of one thing, namely, that, while we lack that evidence, we have every evidence that the marketing side of this great industry has been prostituted to such an extent that the buyers of the commodity have been doing much better, and the sellers also have been doing much better, than the people who are directly concerned, either in the capitalist, the financial or the working part of the industry. The selling and the competition have been haphazard and of such a character and nature that they could hardly have been followed by anyone who was not very closely associated with the industry from the inside. While we believe that the existing organisations have lamentably failed in their particular work, we see at 1693 the moment that, in dealing with this matter without any direct and proper organisation, the price regulation for the commodity is of such a character that it is creating, not only discontent, but, shall I say, newspaper controversy. Day by day one sees articles pointing out the price which has to be paid for the commodity. The prices to the consumer are, in my opinion, scandalous. An attempt may be made to justify the charges that are being put upon the commodity, but I think that, if the accounts were closely gone into, it would be found very difficult to prove the case. In reference to the London prices to the consumer, we may take one concrete case and that is the case of the best Welsh steam coal. Only last week this coal was being placed in the docks at 22s. to 23s. per ton for export. When I say that it is possible to export this coal as far away as Port Said and sell it there at about half the price they are charging on the London markets, it reveals a conditions of affairs which really ought to be dealt with.
The price the hon. Member quoted was not the price at Port Said, but the price at Cardiff.
§ Mr. PARKINSON
If the hon. Member had waited, I would have given the particulars. The freightage to Antwerp is 3s. 9½d., and they can put the best Welsh steam coal at Antwerp at £1 6s. 3d. a ton. At Algiers they can put it, with freightage paid, at £1 12s. 4d. a ton. In the west of Italy they can put it at £1 12s. 6d. a ton, and they can deliver it at Port Said at 33s. 5d. When we can have this kind of thing done so many miles away, and particularly with the best class of coal that we have for steam purposes, and we find in London it is selling to the consumer at over 60s., there is certainly plenty of room for inquiry. [An HON. MEMBER: "Not Welsh steam!"]
§ Mr. PARKINSON
Output regulation is one of the things that must be considered. Output regulation has so little interfered in the conduct of the industry because the great amount of coal they can get out has always been rather a boast of the employers. While they say a greater output is needed we say it is not needed. The Eight Hours 1694 Act has come into operation. There is bound to be a greater production of coal, and you will see in the latest reports that the output per head of the people working in the mines is gradually on the increase. The allocation of markets is another difficult problem. I do not know to what extent the Committee has probed that particular part, but it is one of those things that are difficult to imagine unless we have the organisation to go into that part of the business. It would more or less be a matter for the Commission to arrange provided a co-operative selling association was formed.
We know very well in the mining areas the great difference that exists between colliery and colliery. It is no uncommon thing to find collieries in the same district working half the time that others are working. It is quite common for some collieries to be working four or five days a week while there are others in the same district working three days a week. That may be brought about by many causes. It may be that they are overburdened with capital or have greater difficulties in working the seam. There may be many causes for it, but we cannot get away from the fact that we ought really to understand that a co-operative selling association would do something to equalise and to bring about a condition of affairs which would be more acceptable both to employers and workmen. Competition in selling is one of the things we have always been up against, and while we have it, they say, "We cannot help ourselves, we must sell at the best price we can secure." On that also we have the evidence of experience to work upon because collieries normally sell direct to the consumer or the factor or the shipper, employing their own particular salesmen. There is in the South Yorkshire area something that may be called an agency for co-operative selling. In 1924, out of 170,000,000 tons sold, only 20,000,000 were disposed of by selling agencies, and in those selling agencies it is understood that the colliery undertakings and some of their directors were directly interested and had a direct and substantial financial interest. There is a fair amount of coal sold through the anthracite co-operative agency in South Wales, but it is a very small amount as compared with the output of the collieries. The one outstanding feature is 1695 the one in South Yorkshire. The Doncaster Collieries' Association, I understand, is financed by about four colliery companies who sell their coal at a commission of 6d. a ton. That is an excessive price according to the statement made with respect to the Westphalian Wholesale Syndicate. They sell their coal at something like a rate of ld. a ton, and if it takes six times the amount of money to sell coal in this country as compared with Germany, we must understand that there is a very wide leakage or there are very excessive profits made somewhere.
It is said there is no need for such an organisation. [HON. MEMBERS: "Hear, hear!"] I can understand some hon. Members saying "Hear, hear," because they have held that opinion and will never remove themselves from it, but if this nation desires to do the best it possibly can for its citizens and its great industries, it must begin to realise that there is something in organisation. If there had been nothing in organisation, why should so many of the greater and heavier industries have organised their selling and buying as they have done in the past few years? That proves that there is more in this question than meets the eye. The Committee which has been sitting on co-operative selling, makes this statement on page 23:Organised marketing is increasingly recognised as an effective method of avoiding excessive competition, of achieving economies and improvements in marketing and of helping to stabilise an industry. In one form or another it has been widely adopted in many other industries in this country and in the coal mining industry of Germany. It seems to us clear that the British coal mining industry also could make effective use of it.I do not think we could have any better evidence that that because this is the evidence of a committee directly set up to investigate the matter. But that is not the only paragraph in which they refer to organised marketing. They say on page 20:We believe that the organisation of its marketing would help the coal mining industry to regain its stability and would be an important contribution towards the foundations of a lasting peace in the industry.On the same page they say:Regulation of output does not necessarily mean contraction of output. There 1696 would be nothing to prevent a marketing organisation from following a normal policy of a freely expanding output so long as marketing conditions permitted.There is the other point which will be raised. With that method of organised selling, how would they be able to secure the capital for the industry? Capital for the industry has been at least secured during the whole of these years, and whether we like it or not it will always be forthcoming because it has always been a speculative investment and it has always carried to the investors a good percentage of return. We cannot get away from the fact that it has been one of the most lucrative in the whole of Great Britain, though it has been passing through hard times in the last few years. If we can do anything at all to restore prosperity, it will be better both for employers and workmen and for the nation as a whole. While it may be argued that it will affect the capital brought into the industry, I do not believe for one moment that the co-operative organisation of sales will stem the tide of capital investment; I think it, would rather help to bring in more capital. Another statement which the Committee have made in their report is at the bottom of page 12:The greater uniformity of prices, it is suggested, would tend to stabilise the proceeds of the industry, and this in turn would lessen fluctuations in wages, whether they are regulated by a system of ascertainments similar to that set up in 1921, or on the pre-War basis of a sliding scale of selling prices. To maintain wages at a more uniform level would, in itself, be a powerful aid towards establishing better relations between Capital and Labour in the industry.The point I want to raise is, that the stabilisation of prices would also be an encouragement for people to purchase their supplies for lengthy periods, which would be for the benefit of the colliery industry and of the large consumers. I do not think it is necessary for me to say much more about the question of organisation. I believe the suggested organisation would do away with the haphazard method of selling carried on at the moment, and would eliminate that particular section of people who are nothing but a burden upon the industry as a whole.
With respect to the export trade, the competition of other countries is an important factor; so far as my knowledge 1697 goes we have never had any organisation to deal with the export trade. I am not giving away anything on that point because I believe that if we had a expert commission to deal with the question, we should probably get better returns in our export trade by means of an organised method of selling, in place of the present haphazard one. Competition by British exporting areas is also a factor, and this might be largely avoided by organisation. It is necessary to have some sort of national organisation capable of entering into agreements with other countries. In this direction, in other industries, important developments are taking place. In page 13 of the Report, the Committee say:It is claimed from general knowledge of the trade, that export prices are depressed not only by foreign competition, but also by competition of different British exporting areas against each other in the same export market, and by competition among colliery companies in the same exporting area and among exporters. This unnecessary competition could be eliminated by a marketing organisation.I do not think it is necessary to carry that point further, because time is pressing. On the other hand, it may be argued that the setting up of a co-operative selling agency might bring about a monopoly. My opinion is that public opinion will prevent the growth of any further monopolies, and will tend in the direction of rising against the present monopolies in other businesses and trades.
With regard to the cost, the only association to which we can turn for practical advice is that of the Rhenish Westphalian Coal Syndicate. That syndicate have operated for a number of years in such a manner as to give to that country and the miners there very great benefit, which has not been secured to the miners in this country. The German Syndicate in its early days had to go through a very trying and unpleasant experience., but by the continuance of their efforts they overcame the difficulties with which they were faced, and it is gratifying to know that, as a result of their experience, the German Government since the War have decided to make it a compulsory organisation over the coal producing districts. The syndicate claim that distribution costs have been cut to the lowest possible point; that all inter- 1698 mediaries who made profit formerly without contributing real service, have been eliminated; that only those merchants are retained who are essential for distribution, and that their profit is strictly limited. I do not think there is anything wrong in any country doing that, because, truly speaking, the coal industry has been too much the happy hunting ground of the man who is always ready and willing to make a few shillings out of nothing. We do not want that to continue. We think we ought to get a price which is lucrative, which would pay the employers and give the miners a proper standard of life, and we think we are right in pressing forward the idea of getting cooperative selling on the basis expressed by the Committee who have been investigating the matter.
The Westphalian Coal syndicate further claimed that the curve of price fluctuation has been straightened out to a remarkable extent since the syndicate became effective. That is something to be proud about. They further claim that the manufacturers have had more stability and could calculate fuel costs for a long time ahead in making contracts. In boom periods, they say, prices have been kept below the point to which they would have soared but for control, and in times of depression they have not sunk to the point to which cut-throat competition would have carried them. The syndicate further say:Over a series of years the balance of advantage has been with the consumer, and the rapid progress of the German steel industry before it became so closely associated with colliery undertakings is attributed with authority to this stabilisation of coal and coke prices by the Syndicate. The miners' union leaders declare emphatically that the system has been beneficial to the workers. By stabilising prices it has helped to, stabilise wages, and this has been especially noticeable during the difficult period since the War.It has been proved without doubt that the Westphalian Syndicate have been able to sell their coal better than we have been able to sell ours, that they have been able to maintain their markets at the more even level, and by doing so, they have been able to justify and guarantee continuity of employment for their people. Moreover, their costs on their organisation only amounts to, about one penny per ton, as compared with the amount in the Doncaster area of sixpence per ton.
1699 In their report, the Committee are agreed that co-operative selling ought to be compulsory, in a sense. In setting up this organisation it will take a long time before it becomes anything like a perfect organisation, but if we are struggling upward and onward and consolidating the industry, getting better returns, better wages and better profits, that is what we have been struggling for for the last seven or eight years. It may be found possible for the colliery owners themselves to try to organise this kind of thing. If they took it upon themselves to organise it, it would require some time before they would be able to get the percentage of people agreeing upon the organisation that would be necessary to make it national. It might take a period of one or two years. I would be quite willing even if the Government adopted it to say that they should not make it compulsory for at least two years and that, in the meantime, the employers and the people associated wish the coal mining industry ought, at least, to take what action it is possible for them to take.
The Committee recommend the development of local marketing arrangements and the organisation of local selling pools as in South Yorkshire. I do not know exactly what they mean, but it appears to me that they are suggesting that there should be district organisations, splitting the coal areas into sections at the beginning. Whether they mean that or whether they mean that the 'South Yorkshire Selling Association shall be the model upon which they ought to build, perhaps some member of the Committee can express an opinion. In the district marketing organisation which the Committee recommend, they suggest that when 75 per cent. or more of the product on a tonnage basis are favourable to district organisation, the other 25 per cent. or less may be compelled by law to give in, subject to various safeguards. They also recommend later coordination of district organisations. With respect to the export trade, they recommend local selling pools by exporting colliery companies.
Government action on the lines of the Report would be very desirable and acceptable, but we must have a limit to the voluntary period. I ask whether this great question ought not to be taken 1700 outside the political arena. It should be really a national desire to bring prosperity to this great industry, to as large an extent as possible. That we can improve it there is no doubt. There are many opportunities by which this great industry can be put on its feet, if we only have the incentive and the desire, and there is a determination on the part of the employers at least to make everything as efficient as possible. And if they do that they will have the full support of the whole working mining community. To give the miners a: decent standard of life, to raise the standard of life of these people, give them conditions of decency and comfort, should be our desire and our aim. There is no hon. Member in this House who will say that the mining community at the moment are not living under the most depressed conditions. It the Government would take up this matter they could make it a success; and I think a strong Government would do this.
§ Mr. VARLEY
I beg to second the Motion.
I am pleased to have an opportunity of doing so in-as-much as it affords to this House an opportunity of implementing the recommendations of the Samuel Commission. I hope the attendance in the House at the present moment is not an indication of the amount of interest still remaining in the coal question. If we compare the attendance now with what it was a few months ago it indicates the fact that it is only in periods of great national distress that we are able to stimulate the interest of this House in the affairs of a great industry. Up to date for our £23,000,000, and our seven months stoppage, all that the country has to show is a result of the labours of the Samuel Commission is that by an Act of Parliament 10 per cent. is being taken from the royalty rents and devoted to the sacred cause of washing the miners. I hope something more substantial than that is going to emerge. It is true that a Committee has just been set up to deal with the wagons problem. That problem will automatically evolve itself in the course of the next few months, and we may expect that the Wagons Committee will then fell us how it should be done.
Whatever arguments are brought forward by hon. Members opposite against 1701 the Motion, I hope we shall not have the cry that because it is promoted by the Labour party it is in essence and in fact a Socialistic Measure. I hope the hon. Member for Mossley (Mr. A. Hopkinson) will bear in mind some of the things which the Mover of the Resolution has said, and also that the Samuel Commission itself said things about the necessity for selling organisations. The members of that Commission were not Socialists. There ought to be no question about the bona fides of men like Sir Herbert Samuel and Sir William Beveridge, while General Sir Herbert Lawrence would resent the implication that he is a Socialist. The right hon. Member for Ogmore (Mr. Hartshorn) and myself might be deemed to be interested parties, but men like Mr. Kenneth Lee and other members of the Commission ought to be credited with a sincere desire o do something towards solving the problems which have beset the coal industry, and their views are therefore entitled to the careful consideration of this House. On page 5 of their Report the Committee include a paragraph which is perhaps the most unanimous thing in the Report. We had to inquire from the Mines Department whether we were expected to report on co-operative selling agencies from the point of view of what they would do for the coal industry or for the nation, and we were told that we were to consider what co-operative selling industries could do for the coal industry. This is what we say in the Report:We have accordingly limited our inquiry and have not sought information except from within the coal mining industry, hut our conclusions are based on the obvious fart that the well-being of the coal mining industry and the well-being of the nation go hand in hand, and that the coal mining industry cannot exploit the consumer without, in the long run, harming the nation and harming itself.That is a paragraph to which I more than heartily subscribe, and I am not going to apologise if I treat the welfare of the mining industry and the welfare of the nation as being more or less synonymous terms. What are the alleged gains which those who advocate co-operative selling hope to secure? The hon. Member who has moved the Resolution has said that we hope ultimately to obtain regulation of output. There are opponents of the proposal who say that regulation necessarily means restriction. It might, and if 1702 by restriction of output we do secure more money coming into the mining industry and an increased standard of life for the parties engaged in it, if we can bring order out of the chaos which now exists, I am not at all frightened by the word. The coal-mining industry will have to face in the near future such a competition as it has never known because of the increased production on the Continent and the use of substitutes for power. In my opinion we cannot hope to secure the proportion of the world's coal markets which we formerly had, and, if we do, or if we attempt it, we can only do so at the price of ruining the coal mines of this country and having a population working practically under slave conditions. There are those of us who would far rather tackle the question of regulating the output of coal than contemplate conditions such as this.
We hope, starting from small beginnings, that ultimately we shall have in the coal industry of this country a regulation of output. We hope, secondly, to eliminate unnecessary competition. Against this it is alleged that there is no unnecessary competition, that competition in the main is healthy. Perhaps we would agree, but there are those of us whose duty it has been to listen to what has been told us by the coalowners—and that is all we know about it. The hon. Member for Mossley will probably tell us that we know nothing about it, hut we have never been allowed to know anything about the commercial side of the industry, and when we have had to sit and listen to what we have been told we have seen evidences all around us of unnecessary competition. In the early part of 1926 anyone who was there would know that from the County of Nottinghamshire hundreds of thousands of tons of Top Hard slack was leaving our pits at 4s. a ton, for the simple reason that in that particular seam, one of the best scams in the world, we have 27 per cent. of small coal, and when there is a good market for all kinds of coal slack becomes a drag and it must be got rid of somehow. The sales agents were told to sell it for any old price. That coal was bought because it was wanted for use. Coal is a purely utilitarian article, and people do not even buy slack to save it up against a rainy day, or to put it on the parlour mantel-shelf. They buy it because they want to 1703 use it. The simple fact of that coal being sold at that ridiculous price simply means that some other man who previously supplied that market, lost the market, and e had to accept ridiculously low prices.
Our interest as colliers in this matter lies in the fact that about 70 per cent. of the realised price of the commodity sold has to form our wage fund. When people mouth co-operation they should remember that though in the principles of the 1921 agreement, which received the laudation of the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) and lesser lights, our wages are dependent absolutely on the realised price of the commodity, yet we have neither part or lot in the determination of this price. We have seen rich and powerful colliery companies who think that it pays better to have high output and reduce overhead charges, rather than work your pit on short time. We have seen those people constantly breaking the market, and whereas from their own particular pecuniary point of view it might pay them to do that, they have been giving away the livelihood of our men. Selling agencies would eliminate that portion of the competition which, in our opinion, is unnecessary. We think selling agencies are necessary to create more confidence. I have just instanced the fact that, although we have been alleged to be partners in the industry, we have had nothing to do with the selling of the commodity. The employer in the coal industry, even in 1927, adopts the attitude, "Well, I will lend you my money. You dig a hole. What we find at the bottom of that hole has nothing to do with you. How it is brought to the top, to whom it shall be sold, or for what purpose has nothing to do with you. We recognise your right to say what is the worth of your services, but "if we disagree" we reserve the right to put the lid on the pit for seven months and when you come back in a less reasonable attitude, perhaps we will let you work again."
We think that even the establishment of selling agencies might do something to mitigate the feeling that that spirit engenders. I am speaking personally here. I want the institution of selling agencies to bring more money into the coal industry, and I do not apologise for it. I say, quite designedly, that the 1704 time has gone by when the basic industry of this country should continue to be the milch cow for all the others. I was a collier for 20 years, and it is no satisfaction to me to be told that cheap coal is necessary for the prosperity of the railways or any other industry. Cheap coal is the slogan of the day. I thought we had heard the last of slogans for a long time, hut there are people who adopt slogans when it suits their purpose. But if cheap coal means the degradation of the standard of life of the people I represent, I do not necessarily want cheap coal. Consequently, one of the things that I look forward to as being for the real good of the mining industry by the adoption of selling agencies is that it will bring more money into the industry.
There are two Amendments on the Paper, one of which says it is not proper to force on the employers compulsory selling arrangements. The other with the customary sardonic humour of the hon. Member for Mossley (Mr. Hopkinson), says that the industry should be given sufficient time to recover from unwise legislation of the past. He does not particularise what. Perhaps he will do so when he gets up. These Amendments would give the impression that in the mind of the hon. Member the industry is all right and should be left alone, but in the mind of the other hon. Members that, if left alone, it will heal itself. To begin with the position is that there are nearly 200,000 men unemployed. The figure is not my calculation. It is approaching 200,000 men who were at some time winners of coal. On the other hand, output is rapidly approaching normal. It is rapidly approaching the figure which I estimate to be the maximum quantity we are going to sell at any rate in the years lying immediately ahead. The last figures I saw were a weekly output of 5,288,000 tons; about a quarter of a million tons less than the maximum output of any period. That must mean that more coal is being produced for less wages. The men, with the exception of one or two districts, are on the minimum wage—a wage in some eases less than that which they were receiving last April—and they are working half an hour longer for it. Short time is the order of the day in some districts. Prices are falling, and there is not the least doubt whatever, if 1705 the slogan of "cheap coal" is universally adopted by the nation, if all we have got to do is to win back our markets at any old price, the position will have to grow considerably worse before it can mend. That is not a position in which this country can be expected to recover, and left to heal itself. I have said that short-time in some districts is the order to-day. Perhaps hon. Members might find that difficult to believe, having regard to the fact that there are 200,000 unemployed men.
§ Mr. VARLEY
If the hon. Member will rest his soul in patience, I was just coining to that. It is the most convenient way which the coalowners from the districts from which the hen, Member comes find to smooth over this question. The probability is that transport difficulties have played their part in the short time, apart from other causes. Let me suggest to the hon. Member and to the House that. London draws the majority of its coal supply from Nottingham, Derbyshire, Leicestershire and Warwickshire, and that in those four Midland counties the wage is slightly higher in some of those districts, and in two of them very much higher, than the average of the country, and that the coalowners of those districts do not want to give away the advantage they enjoy by the fact that their men returned to work before the other men. They are not frightfully anxious to sell coal except on their own terms. The terms charged in those counties are perhaps in excess of the price charged throughout the country. Not that I blame them for that.
§ Mr. VARLEY
I would allow the hon. Member sufficient perspicacity and business ability to grant him the fact that he will sell anything that he can make a profit on and so will I, but he will not sell if he is going to make a loss.
But that short time which is being worked is by no means uniform. In Nottinghamshire to-day at one colliery they are working 2¼ shifts in the mornings and the night shifts do not work at all. It is pretty much the same 1706 at many other collieries, one of which employs 4,000 men. At others the men are working full time all the time. Why? Is it a question of wagons? Is it because the railway companies discriminate in the supply of wagons to one colliery as against another? Not a bit of it. It is a question of price. It is simply because one colliery company made a fortune from August to Christmas of lost year, and they are now, as at all times, able to offer terms to their customers and rig the market as against everybody else. This precious colliery company in Nottinghamshire, which in the early days of the dispute came out with the declaration that if the pits stood idle for three years, work could not be resumed except on a longer day—this company, according to last Thursday morning's newspaper, declared a dividend of 15 per cent., free of Income Tax. Yet it has been turning out coal seven months out of the 12 only. It is carrying forward £107,000 to reserve. That is a direct example of the fact that the selling arrangements of to-day do lend themselves not only to the giving away of the livelihood of the men, but to this discrimination in the amount of time worked by the men, as also to the detriment of the competing colliery companies.
There are several reports which this House will consider to-night. There is a minority report. There are the objectors to the principle of co-operative selling. Having regard to the facts that we confined our attention to the coal mining industry and took evidence only From it, and only from those who have the largest share in it, we found that the objectors mainly were the vested interests—the coal merchants and the coal exporters. They are not likely to look very kindly upon any system of cooperative selling, for it is by the competitive system that they have their wealth, Therefore we never expected—at any rate, I did not—that we were going to get much support from such evidence as we called. It is perfectly true also that there is a minority report signed by three coalowner representatives on the Committee. But it is to be remembered of those three. coalowner representatives that each of them represented large and powerful corporations which are in the same position as 1707 Bolsover, and can at any rate, and do all the time if necessary, crush out of existence their less fortunate brethren.
These people like the competitive system. They want to reserve to themselves the right at any time to rig the market. I am not imputing motives to these men. I am not saying that if I were in their position I would differ in the slightest degree from the opinions they have expressed, human nature being what it is, but I want their contribution to be discounted, at any rate to that extent. However, many of the smaller men in the business are not so hostile to this principle as the three coal-owner representatives on the Committee were. We found that, so far as the Forest of Dean and South Derbyshire were concerned, and smaller districts of that kind, a large measure of support was given to the idea. That was so in regard to my own district and the smaller people in it. But there is at any rate one man with fairly large interests who subscribes to the point of view which we hold. I have here the Trade Supplement of the "Yorkshire Post" of the 30th January last, in which there is an article on the coal industry by Mr. A. W. Archer, who happens to be the managing director of South Kirkby, Featherstone and Acton Hall Collieries, a concern which has now taken in another company and is a very large corporation. He says:During the controversy of the last 12 months much has been said about economic wages and the right of workmen to such wages as the industry can afford. These so-called economic axioms may be only half truths. If the rule of the economic wage is to be upheld, then the rule of the economic selling price should also be upheld. Wages and selling prices must be in intimate relationship. It is absurd to argue that the products of the mines should be disposed of at ridiculous prices if out of sale proceeds alone wages are to be paid, and those wages reduce a large part of our population to comparative poverty.Later on he says, in commenting on the Reports which are the subject of Debate in this House to-night, and particularly in commenting on the report of his fellow coalowners:The minority report was signed by three gentlemen largely concerned in the coal industry, but it is necessary to point out that the interest of coal exporters and coal exporting collieries may not be identical. I regard the minority report as a reactionary and futile document. Whether its 1708 signatories have learned anything since 1912 is difficult to say.Therefore there is not that unanimity among the coal-owners themselves which the signatures of three of the most prominent members who signed that Report seem to imply. The writer goes on to support the contention which I am advancing, that in the industry's own interest and in the national interest some form of co-operation will have to take the place of the present competitive chaos. He says:Coalowners will be driven by sheer force of circumstances to take more interest in skilful and scientific salesmanship and to act more closely together, if the great evil of excessive competition is to be mitigated. To suggest, as the minority report does, that things are all right and should continue without improvement is pure obscurantism. Is there any industry in the country in which so little administrative change has taken place for a generation, or which would be bold enough to plead for a perpetuation of existing methods.If that be the view of one of the largest coalowners in Yorkshire, I sincerely hope that this House will give some consideration to his point of view as representing, in contradistinction to the signatories of the minority report, a considerable section of those who get coal. The Mover of this Motion gave as an illustration the fact that at a certain colliery something of the kind had been attempted. I had proposed to read the whole of this document, but I will just say what they themselves record as being the advantages they have derived from this little experiment. They say that they have achieved the elimination of inter-competition. That is an admission that there was inter-competition, which the coalowner representative on our committee denied. They say that one of the advantages is, for example, that the loading of a 10,000-ton vessel with steam coal presents no difficulty at all. They have achieved the pooling of wagons. All the wagons belonging to these four colliery companies are in common user, so far as the trade with the Port of Hull is concerned, and considerable economies have been effected. The Association guarantee the collieries against all bad debts and, if I were a coalowner, that would be a very attractive proposition to me, The size and grading of the coal from these collieries are as far as possible standardised. It is also suggested that to some extent prices can be regulated particularly 1709 when the demand for coal is close to the supply. But they say it must be remembered that the Doncaster Collieries Association is subject to competition from many neighbouring collieries. I need not deal with that any further. At any rate it is an indication that there is nothing inherent in the British coal industry which makes co-operation impossible. We are led to believe by the opponents of this Motion that there is something in the British coal industry which you will not find in any other industry in the world, but the people to whom I refer have tackled it and, to, their own satisfaction at all events, have achieved something.
I am not sufficiently optimistic to believe that the coalowners of Britain will voluntarily act in this matter. I know that the people who control the Mining Association of Great Britain and who are in a measure I suppose those who decide who shall sit on these committees, are, in the main, men belonging to corporations which are sufficiently strong to look after themselves and they will do it. The Mover said that one of the objections to the adoption of the Motion would be that it was likely to create a monopoly. I have no great objection to that, if it is a monopoly beneficent to the coal industry, and I cannot for the life of me conceive any boards of directors, if they had a selling agency, getting together for the sole purpose of presenting to the foreigner the whole or any part of their export trade or cutting off any of the considerable home consumers of coal. Therefore, even though there should be a monopoly, I can conceive that in certain circumstances it might be an advantage to the home consumer to have that monopoly, if, as a price of the monopoly, he could get anything in the nature of a guarantee of a constant and regular supply. Even while the Committee was sitting, I was in conversation with a man whose coal bill as a result of the late unhappy dispute, was up by £800 a week, and as he had to carry on for many weeks he calculated that his loss owing to the dispute was more than £l0,000. The proposition was put to him that if the institution of a selling agency ensured peace in industry and gave him the right to expect normal and regular supplies of coal without stoppages and without having to pay high prices in times of crises, it would be 1710 worth while paying a few extra pence per ton, and he said, "Certainly." We heard in this House last week that in a small thing like the paper supply to this House, the fluctuations in price as a result of the coal dispute, led to an increased charge of £35,000. At the annual meeting of the Southern Railway Company yesterday it was announced that the extra cost of coal to that one company ran to £500,000.
If any monopoly would relieve the coal consumers of irregularities such as that—in some cases catastrophes—I imagine they would not boggle at that monopoly because they had to pay a few pence per ton more for their coal. I am not outlining a scheme under which selling agencies would work, because the attitude of the coal owners is that they will not admit the desirability of the scheme and it is no use going into the details of the scheme until, either voluntarily or by compulsion from this House, they have adopted the principle. However, scheme galore have been submitted and whilst I admit that it would be difficult to put them into operation, the difficulties are not insuperable. I am now coming to the end of my time and other Members wish to speak. [Interruption.] Well, this is a question which is being debated for the first time in this House, and whether or not it is a matter of any moment to hon. Members opposite, it is a matter of great moment to some of us. If there are any arguments which can be adduced in favour of this proposal, they certainly ought to be adduced here, but in deference to the feeling on the Benches opposite, I will content myself with a very few words in conclusion. The right hon. Gentleman the Member for Ogmore (Mr. Hartshorn) and myself have signed a reservation to the Majority Report in regard to the point that two years should be given for the recommendation of the majority to be put into operation voluntarily by the coalowners. We have no faith in such voluntary action and we felt compelled to put in a reservation on that point. This Motion brings forward the compulsory method, but, if the Government can assure us that on this particular question and as regards this particular part of the report of the Samuel Commission, they are endeavouring by any means within their power to induce the coal owners to take some action, then I know the difficulties which 1711 surround the question are such that hurry would perhaps be fatal. But I earnestly beg the House to adopt the Motion. Whether the Government find time afterwards for acting upon it or not, is an entirely different matter but I hope by their Vote to-night the House will let the coalowners see that the recommendations of the Samuel Commission are not to be lost in the limbo of oblivion and that so far as this particular aspect of the question is concerned, we expect something to emerge from those recommendations.
§ Mr. STORRY DEANS
I beg to move, to leave out from the word "That" to the end of the Question, and to add instead thereof the wordsthis House holds that it is not proper that Parliament should intervene to force selling combinations on particular industries.I would like to assure the hon. Member for the Mansfield Division of Nottingham (Mr. Varley) and the hon. Member who moved this Motion, and also to assure the House generally, that the Amendment is not one which is, or is intended to be moved in the interests of the coalowners or in the interests of anybody except the general public of this country. I may also reassure the hon. Member for Mansfield that I shall not criticise this as a Socialistic Measure, neither shall I impugn the sincerity or even the knowledge of any of the gentlemen who have signed any of these numerous reports. But I would point out to the hon. Member that when one tries to get at the gist of his argument, that argument seems a little odd. The gist of it is that if you have this cooperative selling, you will, as he puts it, get more money into the industry. That is to say, you will then be able to control prices in a way which you cannot now do, and you will therefore be able to charge more for the coal to the people who consume it. I find that a very strange argument coming from those benches where Member after Member has arisen in the last month to ask why the Government do not stop people charging so much for coal. The next point of the hon. Member is that the coal industry will be able to restrict output, and yet he is complaining that already 200,000 men are out of work and many others on short time. If he restricts output, is 1712 he going to put back any of those 200,000 men into work, or the men who are now on part time on to whole time?
§ Mr. VARLEY
The hon. Member will do me the justice to remember that I said that restriction and regulation are not necessarily the same thing.
§ Mr. DEANS
I remember the phrase in his speech that restriction and regulation are not the same thing, but I can only think that it is a distinction without a difference. If there is a distinction, the words are different, but I think the hon. Member will find in practice that the two things are the same, and that in all these questions where rings and trusts and cartels have acted and have talked about the regulation of output, what they have meant is the restriction of output, so that there shall not be so much competition between the producers of the goods in question. If, as I believe, the regulation or the restriction of output would cause rather a diminution in employment in the coalfields than an increase, surely that diminution of employment would worsen the position of the men in the coalfields, for whom I am very much concerned. [HON. MEMBER "So are we!"] I do not deny, indeed, I know that both the hon. Members and many other hon. Members on the benches opposite are also concerned. For hundreds of years it has been the policy of this House and the policy of the law of England that monopolies should not be encouraged.
§ Mr. DEANS
I do not complain of interruptions, but I do not encourage them. I was saying that, for hundreds of years, the policy of the law and of this House has been against monopolies and against restraints of trade, and although restraints of trade are not punishable nowadays as criminal offences—they used to be punishable actions—yet no contract can be enforced which is in restraint of trade, and you cannot have one of these co-operative agreements 1713 which is a compulsory one binding upon the people who are in the coal trade unless you alter the law about restraint of trade. That is seen by the gentle, men who sign the Report.
They recommend that there shall be a revision of the law on restraint of trade, and I ask the House to think a very long time before tinkering with that law. You cannot, if you are going to alter the law about cartels and trusts and rings, alter it merely for the coal trade and leave other people out. And then, what happens? If you are going to make an agreement of this sort, an agreement in restraint of trade, binding in law upon the people who enter into it, you will have people induced or sometimes forced by pressure to enter into one of these arrangements, and when they have done that, their hands will be absolutely bound. It may be an arrangement for a long terms of years, and they can easily draw the agreement so that they could obtain an injunction to restrain the parties to it from breaking it, so that a man, although he might think he was not getting his fair share of the market and that unscrupulous and powerful members of the cartel were depriving him of his share, would be quite unable to escape from the agreement. I know that these rings and trusts do exist to-day, but the protection of the consumer and of the public is this, that they are not legally binding, and that anyone who has entered into one of these agreements, if he finds that he is not being fairly treated, or if he thinks that the cartel, ring or trust is going too far, can at once break his agreement, because there is no law which will enforce it.
§ Mr. A. V. ALEXANDER
Has the hon. Member read a summary of the Balfour Report on cartels and combines, in which they quote cases in the Courts?
§ Mr. DEANS
If the Balfour Committee say that under the present law of England it is possible, as between mem- 1714 bers of cartels or rings, to enforce the agreement, I respectfully say that the Balfour Committee are wrong. We have heard many most interesting statements—at least, they interested me—from both the Mover and Seconder of the Resolution, but it seems to me that all their talk has been absolutely beside the mark. it is all very well to say that you will get more money in the coal industry and thus benefit the people concerned in it—that is, that you will enable them to make more profits in the industry, because that is what it comes to—bat somebody has got to pay them, and who is going to pay them? It is not the business of Parliament to put money into the pockets of one industry at the expense of other industries. What would become of the steel industry and of all the other industries which depend for their very life on coal? And if you have a policy adopted by Parliament that will compel people to enter into agreements as to the prices at which they will sell the commodities which they produce—and that, not with a view to protecting the public, but with a view to increasing the price to the public—I say that that is a vicious principle. It is for that reason that I have moved the Amendment in the form that I have moved it, that it is not proper for this House to force selling combinations upon any industry.
§ Mr. LLOYD
I beg to second the Amendment.
This Amendment might very well have been moved in an alternative form, to this effect: "That this House expresses its surprise at the recommendation of the Labour party for the complete trustification of one of the great industries of this country." Certainly that is the most astonishing line for the party opposite to take, and the strangeness of it is only equalled by the extraordinarily contradictory nature of the arguments which have been put up in support of the Motion. First of all, we find emanating from the distinguished representatives of the coal industry on the benches opposite a sudden and violent enthusiasm for the Samuel Report, which was not at all in evidence last summer. We welcome, this rather tardy repentance, but I think it would have been very much better if this enthusiasm had found expression last summer. Again there was on the part of the hon. Member for Mansfield (Mr. 1715 Varley) an honest and courageous declaration in favour of raising prices in order to improve the standard of living. That is a recommendation which many of us on this side welcome, but it comes rather strangely from benches from which repeated and fierce opposition has constantly come whenever the idea of safeguarding British industries and the livelihood of British workers in these industries has been debated in this House.
§ Mr. VARLEY
I hope the hon. Gentleman will not identify this party with what I said on that matter, because I sand that I was speaking purely for myself.
§ Mr. LLOYD
Again, there was an expression, which I think also came from the hon. Member for Mansfield, that the consumers will benefit by this move, apparently in the sense of having to undertake an altogether altruistic attitude of congratulation to the merchants on having achieved and established higher prices. I do not quite see the consumers functioning in that capacity, but that seemed to be the trend of the argument. Finally, he set up, or it seemed to me he set up, speaking with all deference, the illusion of an idea that certain collieries, I think he said in a Yorkshire district, were endeavouring to restrict output with the idea of improving prices—an idea which, it seems to me, actually underlies his Motion. And he seems to blame another colliery in the same district for undermining that very thing, which apparently is the objective of his Motion. He suggested that there was no organisation in the export trade, and his colleague the Seconder expressed the view that the intense competition brought a greater profit to the export merchant. These again are views which I find great difficulty in bringing into accord, and they seem to me to counteract each other.
I want to deal with one point which was raised by the hon. Member for Wigan (Mr. Parkinson) and that was the question of London prices. I do not know why the collieries which, after all, have their work cut out to organise the production of coal, shout I be the target of blame for prices which are charged by merchants in London. The collieries have absolutely no concern in the prices, and 1716 the hon. Member might just as well blame, we will say, the cloth merchants because one of the Oxford Street stores charges his wife 100 per cent, profit when she buys a dress. He mentioned the price of Welsh coal in relation to the f.o.b. price for sales abroad, and I think he dealt with it on the basis of 22s. a ton. If I may again adopt an Oxford Street simile, there is great virtue in quantity, and I saw the statement of an Oxford Street store manager yesterday, to the effect that if anyone will buy three socks instead of two, he might get them cheaper. It is just the came with coal. If the hon. Member went into the South Wales district, brandishing an order for 20,000 tons to be delivered to London, he would probably find that the price he has named for delivery somewhere else was very much on the same plane.
Is the hon. Gentleman aware that the same colliery company which produces coal from the Rhondda Valley, and delivers it f.o.b. at Cardiff at 22s. a ton, are selling it in London at 62s. 6d. a ton?
§ Lieut.-Colonel WATTS-MORGAN rose—
§ Mr. SPEAKER
The hon. and gallant Gentleman can only address the House if the hon. Member who is in possession gives way.
§ Mr. LLOYD
The Motion is drawn in an extraordinarily clumsy way. There are many of us on these benches who are anxious to see an advance made in the organisation of the coal industry. We yield to no one in our desire for that, but the suggestion in the Resolution is extraordinary in two respects. First of all, it suggests that this co-operative selling agency would be in the interests of the coal consumers. It does strike me that they would be about the last people to benefit by the in crease of trust operations in that industry, and certainly many of us who are large consumers would very much resent development on those 1717 lines. Secondly—and this seems to me even more serious—the Resolution puts this duty on the Department of the Secretary for Mines. Those gentlemen who have any recollection of the commercial operations of Governments during the War, and their efforts to establish buying and selling departments, will realise, that whatever saving there was in the distribution of coal would be very much more than swallowed up by the multiplication of staffs created to deal with them. Many of us, I believe, have extraordinary recollections of the actual manipulation of coal itself under control during the War, and to put on the Department of the Secretary for Mines the duty of organising an enormous trade like this, seems to me an utterly foolish idea. You might as well ask a master of foxhounds to run a girls' school. It is not because we do not wish to see increased organisation within the industry, but because we do not want to see increased political and Government interference in that industry that we oppose the Motion, and I beg to second the Amendment.
§ The PRESIDENT of the BOARD of TRADE (Sir Philip Cunliffe-Lister)
It would probably be convenient at this stage that I should state the position of the Government on this Motion. Whatever view may be taken as to the merits of the Motion in any quarter of the House, the whole House is under an obligation to the hon. Member for Wigan (Mr. Parkinson) for bringing this matter forward to-night. When an important Committee has made a Report on a, matter of general interest and practical importance, it obviously is desirable that the Government should state their view on the Report, and that the House should have an opportunity of expressing its view as early as possible. The hon. Gentleman has given us this opportunity, and, if I may say so, he has put his case before the House in a very interesting, very temperate and closely reasoned speech. There are three propositions before the House. The first is the Motion of the hon. Member for Wigan, which proposes that the Government themselves should promote a system of co-operative agencies for the sale of coal. That makes the Government the active agent from the very start. Then there is the majority report of what I may call the Lewis Committee. That is different from the pro- 1718 posal of the hon. Member. The majority report laid it down that this is a matter which, in the first instance, must be decided by the industry itself, and that unless there was a strong movement on the part of the industry for co-operative selling, no further action was practicable. As time is short, I will not quote the exact passage, but the hon. Member will recall that that is their statement on page 5. They were against any form of compulsion unless the bulk of the industry was in favour of it. It is true that they went on to say that if in any district 75 per cent. of the coalowners were in favour of a co-operative scheme, power should be taken to compel the dissenting minority to join an organisation, but that is less than the hon. Member proposes. Thirdly, there is the proposal of my hon. Friend the Member for the Park Division of Sheffield (Mr. Deans), which says that it is not the business of the Government to coerce any industry into combination.
What we are asked to express our opinion upon is not whether it is in the interests of the mining industry that there should be selling agencies on a large scale. That is not the issue. I say quite frankly that, if I were asked purely from the point of view of the mining industry whether I thought the recommendations of the Lewis Committee were sound on the whole, I think they are; but that is a very different proposition from saying that it is the business of this House or of any Government to coerce an unwilling industry into conducting its business in a particular way, and it is upon that point that we have to decide. The Government have given very careful consideration to the Report of the Committee, and are grateful to the Committee for the work they put into the Report and the time they gave up, and it is only fair to say that the question put to them was a very limited one. It was, What is the interest of the mining industry in this matter? They were not invited to consider the much wider question of what would be the effect upon the general community or upon the State. If they had been, I think that probably they would have made a more qualified Report.
I want to put to the House the reasons why, in the view of the Government, we ought not to adopt the proposal for compulsion. In the first place, in a case of 1719 this kind the onus is surely on those who claim compulsion to prove their case up to the hilt. It is a very strong thing to ask the House to force an industry against its will into a particular line of action,' and I do not think the House would be ready to accept such a proposal unless the case were unanswerable.
In the second place, let the House observe what is proposed. This is not a case where some form of regulation or restriction is considered necessary in the public interest or for the safety of those engaged in the industry. [Interruption.] I have listened carefully for over an hour to the speeches made upon this Motion, and perhaps the hon. Member for East Rhondda (Lieut.-Colonel Watts-Morgan) will allow me to continue my speech without interruption. I quite agree with what was said by the hon. Member for Wigan that what is dealt with here is exactly the kind of case with a practical issue which ought to be debated without heat and without prejudice. We are not being asked to regulate an industry, but we are invited to force an industry to conduct its business in a particular way because some people suppose that what is suggested is a better way of conducting that particular industry, and that is a very novel proposition.
Let me put a third point. You cannot take the coal industry by itself, because if this principle is right we must apply it throughout industry, and there is no reason why it should not be applied to other forms of combinations. Some of those combinations have been rightly criticised, but if this kind of combination in regard to selling prices is right to force upon the coal industry it is equally right to force it upon any other industry. Hon. Members from Lancashire have heard of a suggested price control in regard to yarns. There is much to be said for that proposal, but should be very much surprised if Lancashire was to say that while this is a business propostion in regard to 70 or 75 per cent. of the spindles, it is quite a different matter to put compulsion upon the other 25 per cent., and in regard to that I should be surprised if Lancashire put forward opposition to such a proposal seriously. If we gave compulsion to the mining industry what possible answer should we have to the case of 1720 the cotton industry and other industry. The hon. Member for Wigan, in a very persuasive speech, and the hon. Member for Mansfield (Mr. Varley) said that we wanted price associations in order to remove excessive distribution costs. I do not think he really put his ease high enough because the margin of one penny is very small indeed. I do not know where he got his figure from about the Westphalian Syndicate but the report of the Samuel Commission was that the margin is 62 pfennigs, and that covers more than the cost. If one says the general cost was 5d. that would be about the figure.
§ Sir P. CUNLIFFE-LISTER
The actual margin is 62 pfennigs. The claim that is really made for this proposal is not that you can save 2d. or 3d. on distribution costs, but it is that you will keep prices at a particular level. I think that is a sound propostion looked at from the point of view of the coal industry, although I think hon. Members would be well advised to consider maximum sales rather than small sales with a higher price because the export market depends entirely on the price. In regard to the home market and the domestic market, I think hon. Members will agree that the law of diminishing returns applies and the higher the price the less coal will be sold. If we are to be frank about this problem, it is not a question of saving a few pence on the distribution costs, but the claim made is that it is in the interest of the coal industry to stabilise prices and, if necessary, to keep prices up. That means that any Government adopting the proposal of compulsion to force everyone into a semi-ring of this kind, could scarcely avoid the charge that they were forcing dear coal upon the people.
Let me pursue that one stage further. This is not a proposal for one single combine. It is not a proposal, incidentally, to deal with the export trade, where it is much more necessary. The Samuel Commission, which was quoted to-night, laid stress upon the importance of combination to the export trade. Although they envisaged some combination in the internal trade, they took care to point out that that combination would not be 1721 on a scale which would eliminate competition. The House will observe what is likely to happen if everyone is forced into a district selling syndicate. Is it not likely that that syndicate may raise prices—stabilise prices, if you will, but raise prices, I think—just where prices ought to be kept down? If it is legitimate to charge high prices in the coal trade, it is legitimate to charge them against the big sheltered users—against the railway companies, against the large public utility companies. It is not justifiable to charge them against a competitive industry which has to sell its products in the markets of the world, or against the domestic consumer. But in a district organisation it is just in the case of the consumer and the competitive industry, in a particular area where the coal-owner gets quasi protection in railway rates, that the price is raised. If the district association raises the price to the railway company, the railway company can say, "I am not going to buy from you, but will buy from another county association which is also on my line," and the great sheltered organisation would be able to play off one district against another. The persons who could not face that would be the domestic consumer in the particular locality and I he smaller industry in that locality; and t hat is exactly that does happen in Germany. In Germany, as anyone who reads the reports of the Westphalian Syndicate, and the history of it to which the hon. Gentleman referred, will see, it sells cheapest in the foreign market, but the people who have to buy dearly, and against whom prices are put up, are the domestic consumers and the industries lying close to the site of the syndicate, who cannot buy coal from other sources in competition. That is stated quite clearly in the history of the Westphalian Syndicate in the Appendix to the Lewis Report.
§ Mr. VARLEY
The right hon. Gentleman will agree that that is exactly what happens now in competition.
§ Sir P. CUNLIFFE-LISTER
No, I do not think it does, but I think that that is what is quite certain to happen if you force everyone into a ring. We are asked, moreover, not to take the ordinary commercial risk in this matter, but to put on Government compulsion, and penal compulsion. I only want to 1722 take two other points, and they are these. If the coal industry itself enters into amalgamations it may be very sound, but it takes the responsibility of the finance and of the method on which it conducts its business, but what is the position of a Government which forces an industry to conduct its business in a particular way? Surely those who engage in the industry and who dissent from the action the Government is taking will say, "If you force us into this position, you become responsible for our success or our failure." That may easily land us into financial obligations. Any Minister who stands at this Box can say industry must look after itself. No industry is entitled to come on the taxpayer for assistance. But if the Government interfere with the conduct of the industry, and make it conduct its business in a particular way, they are not in a position to withstand the claim of the industry for financial support. But the Government assume another and an even more serious responsibility. They become directly responsible for the success of the industry and for the whole conduct of those engaged in it. If we have learned one lesson about control it is this—and it is agreed in by everyone who had responsibility for control during the War—that if you are to control you cannot do it in an arbitrary way, but you have to do it by having control of any article from start to finish. That really means taking over the whole of the industry. You have to choose between those two and I have no doubt on which side my choice lies.
But let me put another case, not at all in a controversial way. The hon. Member for Mansfield said, boldly and courageously, that what he was concerned with was that there should be more money coming into the coal industry so that there would be more for the coal-owner and more for the miners' wages. That is a frank statement. I think he, as a miner, and the coalowners are entitled to say, "We will enter into voluntary combinations in order to get the best we can." That is a perfectly reasonable proposition. But suppose the Government exercise coercion, what is the position? He and the coalowners will get together and come to the Government and say, "You have forced everyone into this ring." No one 1723 escapes. You put them in and they cannot get out. They then come together to the Government, for once united, and say "It is worth paying something to have the industry peaceful," and that is the argument the hon. Member used tonight. But observe the position into which the Government is then put. Miners and coalowners come together to the Government and say, "Put up the price to the domestic consumer 1s. or 2s. and you will have peace in the industry." That is an impossible position for any Government to be in.
This is my last observation. I believe in the general development there will be more combinations. These combinations are essential, and I have always maintained that it is idle to try to prevent them. But I have always said the safeguard of the public against a combination exploiting the public was that any member of the combine was free to leave it, and if he found prices were being raised against the consumer, it would be good business for one firm or another to come out of the combine and offer cheaper service. That is a much better safeguard than any unpractical, ineffective control. It is the one real safeguard. But what are you asking us to do? You are asking us to remove that safeguard. You are asking us to force everyone into the combine whether he is willing or not and to keep him there by an alteration of the law against his will. I ask the House to consider this, as it must be considered, in the light of what is in the interest of the mining industry itself. Any industry is free to do in its own interest what it thinks is for its benefit. The more efficiently it does that, on the whole, the better service shall we get. If it acts improperly, it may be necessary for the State to come in, but I believe that with combination and freedom, it will be unnecessary for the State very often to act. I am sure that it is an impossible position to put any Government in to ask them to compel an industry to abandon its freedom, to compel one industry. They would have no answer to the argument that you must compel all industries to abandon their freedom. That is an impossible proposition to put to any Government, and faced with that alternative T shall certainly vote for the Amendment.
§ Mr. MONTAGUE
The hon. Member who seconded the Motion introduced the question of wages and prices I am sorry that the question of wages and prices has been introduced into this discussion, because it has led a number of those who have taken part in the subsequent discussion into the very common fallacy, from my point of view, that values are determined by wages, and that in order to make conditions possible for wages to be maintained at a satisfactory level, all that it is necessary to do is to get some artificial arrangement, Government-supported or otherwise, in order to maintain an artificial price in the market. That seems to me to be an utter fallacy, because if there are the ordinary conditions of competition, the market determines the price at which the commodity is sold, and wages are not at all determined by what the market determines the price of the commodity shall be. I know, of course, that in the coal industry there are exceptional circumstances, and I know that the whole question is mixed up with the question of the importance of the export trade to that industry; but as a fundamental principal of economics I deny that wages have anything to do with the value at which the goods are sold upon the market. For that reason, it seems to me rather an. unfortunate thing that so much of the discussion has centred round this question of the artificial method of extending prices, of keeping prices up in order to maintain a wage level.
The point, surely, that is of importance in this discussion is whether or not the distributive side of the coal industry is worked upon efficient lines. If it is not worked upon efficient lines, then the coalowners and the colliery workers have a right to complain that the circumstances of the market exert pressure upon them and that they cannot maintain the profits that they need and desire so that wages may be paid. If that artificial condition is to be granted, that is the case for the Motion: the fact that there is inefficiency in the selling side of the coal industry. There is plenty of evidence available with regard to the inefficiency of the selling side of coal. Apart altogether from the evidence that has been given in more than one commission of inquiry, there is the obvious fact, that in this country we have the most productive mines in 1725 the whole of Europe, that we have a higher production per man-shift than any other country in Europe or in the world, with the exception of certain parts of America; and we have coal, too, that is superior to any other coal in the world. If with these advantages—higher production for a man per shift and a higher quality of coal—it is impossible to run the industry so as to give a decent wage and reasonable conditions of life for the workers concerned, it is ipso facto clear that in some part at least the industry is being run upon uneconomic and inefficient lines. That is the case for the Motion.
Something has been said about the productive side of the industry, but the difference between the price of coal at the pithead and to the consumer is, at any rate, a justification for our charge of inefficiency and incompetency, so far as the distributive side of the industry is concerned. If these arguments do not avail then I say that an industry which cannot provide a decent standard of life for those engaged in it is bankrupt, and no industry should be carried on in a bankrupt state. If the coal industry cannot provide decent conditions of life for its workers it should come to an end it ought to give way to the cultivation of our soil and to other methods of utilising the labour and ability of our people; and let ordinary economic laws take their course. It is idle to say that we have to keep a certain industry in being because we have to find some method of exporting coal in order to pay for the food which we require to import from foreign countries, if that industry does not provide a decent livelihood for its workers. Let us provide the food ourselves, and not be dependent on foreign countries. I appeal to the House to get down to the fundamental economies of the position. Any properly organised industry which justifies itself ought to provide a decent standard of life for its workers. H it does not, one of two things happen. We have no right to pretend that we can carry on an industry of that character, or else there is a prima facie case for our charge of incompetence and inefficiency. That I regard as the fundamental principle involved in the Motion.
When we consider the question of Government control, the point has been 1726 well made that the logic of the position is this, that if you control prices, if you establish a ring inside the coal industry, there is no reason why other industries, which are in as bad a way as the coal industry, the engineering industry and the metal industries, should not have a right to the same kind of Government interference. I admit that point. I admit also that mere control and interference is a bad thing in every industry. The logic of the position is that, so far as the basic industries are concerned, the nation ought to have the final word as to their management, because it depends upon them. The President of the Board of Trade says that we have had experience of Government control in the past. That is perfectly true, yet our experience during the War showed the value of control by the nation over the resources upon which we primarily depend.
§ Mr. MONTAGUE
The hon. and gallant Member may say "never again," but he stands for a principle in economics which differs from mine. Facts are facts, whether he likes to face them or not. The fact is that so efficient and valuable was Government control during the War period that even the present Chancellor of the Exchequer, when disposing of the services of his own Ministry, had to say that the advantages of Government control had almost made him a Socialist. Where there was under control during the War a disadvantage, where there was an avenue open to very considerable question, was not in the control itself or in the management of public necessities under conditions of emergency, but in the getting rid of them after the War, in the jobbery and corruption which took place after the War was over.
The Food Ministry, in spite of the jobbery and corruption that was proved, not of Socialism, not of the State, bat of private enterprise which got on to the public necessities when they got their chance: despite all that, the Food Ministry made a net profit for the nation of £6,000,000 and kept the price of food down by Government control. If that could be done during the War for food, wool and clothing and other necessities that were required because we were at war, then surely under the extreme conditions of 1727 the coal industry at the present time, this policy and principle of Government control is a valuable one and ought to be adopted so far as the question of the organised distribution of coal is concerned.
Time does not allow me to go into some of the details I would like to enlarge upon, and one can only touch upon subjects very superficially in an impromptu address to the House limited in time. I urge that this question shall be divorced from the bad economics suggesting that the reason why the coal workers can only get a bad wage is because the price of the commodity is not high enough to pay them a good one. That is not sound economics. The price of commodities is determined by the principles of the cost of production, and the cost of production includes the cost of the production of labour. That is perfectly true. Wages do not determine values. Values are determined by the market, and if the market does not provide sufficient profit to pay decent wages, then there is something wrong with the market, and if there is something wrong that is justification for the resolution before the House.
Mr. A. HOPKINSON
There is hardly time to go fully into all the arguments which have been adduced by hon. Gentlemen opposite in favour of this Motion. I should like to join with other speakers on this side in congratulating the Mover and Seconder in particular upon their very restrained speeches and upon the care with which they have gone into the whole subject and put it before the House. There are one or two points, however, which I cannot leave unanswered. The last speaker, and I think also the Mover of the Motion on the front bench opposite, seemed both to be of the opinion that the organisation of the selling of coal in this country somewhat on the lines of the Westphalian or Ruhr syndicates woufd result in very much better conditions for the workers. The average shift wage for coal getters in 1913 in Great Britain was 8s. 9d. and under the system of the syndicate in Germany was only 6s. 4d. during the same period. I have taken those figures from the Report of the Coal Commission, which was eminently in favour of the Westphalian system of syndicates for the 1728 industry. This is a case where the proof of the pudding is surely in the eating, and if a totally disorganised industry like the coal industry in Great Britain can pay very much higher wages than can the highly organised and immensely competent coal industry of Germany, then I think it would be rather a mistake to improve the efficiency of our industry.
There are other dangers which arise, and I am going now to make some quotations from the Report of the Departmental Committee on Co-operative selling to which reference has been made. The quotations are from an Appendix which was included with the assent of the majority as well as the minority. This Appendix, to which reference was made by the President of the Board of Trade, gives the history of the coal syndicate in Germany. I will quote one or two typical sentences showing what the German Government found was the effect of the syndicate on the coal industry. On Page 36 of the Report there is the following:In 1901 the Prussian Diet was apparently alarmed at the progress of the Syndicate's monopoly and its rising prices, and voted large sums of money to buy mines in the Ruhr, obviously with the intention of breaking down the monopoly. … The struggle between the Syndicate and the Government came to a head in the attempt of the Government to buy a company called the Hibernia Company, with an annual output of coal of over 5,000,000 tons. The Syndicate, however, raised capital from its members with the support of five large banks, and itself succeeded in gaining control of the Hibernia Company. Two years Inter, 1905. the Syndicate pushed its advantage further by purchasing large areas of proved but undeveloped coalfields so as to prevent possible competitors opening collieries there.… Government competition' seems at no time to have been effective in keeping down prices, owing to the cost of production being considerably higher in the State than in the Syndicate mines.There we have a case held up as an example to us where a Syndicate eventually came into direct conflict with the Government of the country and ultimately made the Government stand on one side. The Government attempted by various commercial means to break that monopoly, but the Syndicate being more clever than the German Government of the time succeeded in preventing that monopoly from being broken. That was the history of the German Coal Syndicate, as given in the Report of the Committee on Go-operative selling. What is the 1729 origin of these proposals for forming a selling ring in the coal industry of this country? It dates from the period when the Samuel Commission was sitting. On one occasion two of our bitterest competitors from Germany were received in a sort of private audience by the Coal Commission. Their evidence was entirely suppressed. We do not know to this day what evidence they gave. A memorandum was submitted by the right hon. Member for Carmarthen (Sir A. Mond) and signed also by the gentleman who is now the Secretary of the International Miners' Federation, Mr. Frank Hodges, and by Sir Hugo Hirst—a memorandum also of a secret nature. The result was that, without publication of evidence, the advice of our bitterest competitors abroad was accepted, and the Commission suggested that our export trade should tie its hands for the benefit of the Westphalian Syndicate, which had provided with the evidence. That is really the whole origin of this marvellous idea that we, for the benefit of the Westphalian and Ruhr Coal Syndicate who are our chief competitors abroad, should tie our hands in the export market and give them a chance which they will never get again of filching away from us the whole of our export trade. These facts I think the House should know, and they should cause the Rouse to give a determining vote against the proposal.
§ It being Eleven of the Clock, the Debate stood adjourned.
§ Debate to be resumed To-morrow.