HC Deb 22 December 1932 vol 273 cc1327-40

4.15 p.m.

Commander COCHRANE

I wish to invite the House to turn its attention to another subject, and that is the question of the export of coal. In view of the time at my disposal, I propose to be very brief and to confine my remarks entirely to the question of the Quota as it affects the export of coal. I think that the question of minimum prices in regard to export really requires no argument. It must be generally agreed that to try to fix a minimum price below which you may not sell in competition with the foreigner is quite indefensible. With regard to the Quota, I suppose that if we now had a condition of dwindling trade the question of a quota would be arguable, but I wish to confine myself to events as they are today. There is no doubt that, as a result of the recent policy of the Government, there is a very good opportunity of having increased trade with Scandinavia. We have had a remarkably successful exhibition at Copenhagen, and we know that the President of the Board of Trade is now carrying out negotiations with various Scandinavian countries with a view to coming to satisfactory reciprocal trading arrangements. It is in these circumstances that I wish to ask my hon. Friend the Secretary for Mines the effect of quota restrictions. It is clear that if the coal trade is to get the benefit of the improved trade with Scandinavian countries, we shall have in the near future either new customers, or coming back to us old customers who have not had their requirements from this country for some time past. If we are to gain the benefit of that trade, we must be able to make contracts over a considerable period. It is in that connection—with the long-term contracts—that the Quota of export is least defensible.

I know that my hon. Friend the Secretary for Mines has stated in replies to questions recently that the Quota has been increased for the present quarter. The figure has been stated of an increase in the case of Scotland of 150,000 tons in the quarter. That is cold comfort for the miners of Scotland who may be working only three or four days a week, representing as it does the output of only two days or so. The real point of importance in the circumstances of to-day, when we are hoping to get an increased export trade, is, Will this increase of Quota be available next quarter, will it be available for six months, or will it be available for 12 months? That is a question of importance, and it is clear that unless the coal producers in this country have a certainty that they will have this increased Quota in the future, it will be impossible for them to take advantage of all the opportunities for an increased trade which may come their way. The suggestion that foreigners will come here, and continue to come here to get their requirements of coal, despite whatever obstacles there may be, appears to me to be fantastic. Surely, we must agree that, if we get a foreign buyer coming over to this country for his requirements of coal, it may be the result of some general agreement arrived at between the Government, or for the more usual reason that he thinks he can get a better quality of coal over here at a price which suits him. If he does come here and meets with any difficulty whatever in getting his necessary requirements satisfied there is always standing at his elbow someone who whispers in his ear that he can get the same coal in Silesia, or the Sahr, or elsewhere, and that he can get the whole of his requirements satisfied without any impediment or hitch. I cannot understand the suggestion which appears to me sometimes to be made that there is a sort of queue of foreign buyers waiting to be supplied with our coal. I have heard it said, when some complaints have been made that some pits have been unable to fulfil a foreign order, due to the question of quota: "It does not matter. If the order did not go to one place, it went somewhere else." That is a fantastic view of the way in which the selling of coal or any other article is carried on. We cannot expect to maintain our export trade if there is the slightest obstacle in the way of the foreigner getting the coal which he requires.

I am limiting myself to-day to the question of export, but that, does not mean that the export of coal can be separated from the inland sale. It is clear that in the ordinary case the requirements of the foreigner will be for some special size or type of coal which probably cannot be produced without the reduction of some other size from the same pit. Therefore, these two things, the quota for home trade and the quota for export trade are very closely linked together, but I am content to limit myself this afternoon to the question of export. To-day, we have a chance of an expanding market. The only way in which the quota can fail to be obstructive to that market is to get it out of the way. If that quota on an expanding market is to mean that there is a threat of a quota next quarter or in six months time, it is bound to make more difficult the sale of coal in foreign markets. It is to that aspect of the question that I would ask the Secretary of Mines to be good enough to give some information to the House, and, if he can, to give an assurance that he is hoping, as we are all hoping that we are going to get an improvement in the export of coal, that the question of quota or of minimum price shall not be allowed to stand in the way, and that the coal producers shall have every opportunity of taking advantage of the increase of trade which the policy of the Government may bring to them.

4.24 p.m.


I venture to ask for the indulgence which is accorded by hon. Members to one who addresses the House for the first time. At this late stage and with the time so limited I shall compress what I have to say into as brief a space as possible. I desire to support the views which have been expressed by the hon. and gallant Member who has just spoken, and I do so with special reference not only to Scotland but the constituency which I represent. There is no doubt that in the case of Scotland, and particularly Fifeshire, a great deal of the trade consists in coals which are produced there for export. There is Fifeshire on the one hand and the Lothians on the other, and I wish to voice a grievance which has been felt by many of my constituents who work in the mines in Fifeshire. During the last quarter the district allocation by the central council in regard to Scotland was considerably reduced. That happened to coincide with a sudden increase in the demand from foreign countries, and the result was that, although the machinery which exists for granting an increased allocation was set in operation, in spite of that, the particular company, by whom many of my constituents are employed, was compelled to shut down by suspending 550 of their workers at the beginning of the quarter, and by the 24th of this month, in the last week of the quarter, they will have to suspend entirely their operations, which will have the result of depriving 4,900 men, who would have been employed had they been allowed to continue at work, of a week's wages.

It is unnecessary to emphasise the deplorable results of a policy which deprives men of work. These men lose their wages, and the country loses the purchasing power which these men would have had. The export of the coal which they could have produced, and of which their employers could have disposed abroad, would have helped to redress the balance of trade so far as visible imports and exports are concerned. The resounding effect of this loss of spending power will be felt in the reduced takings of shopkeepers, and, in addition, there is also the fact that the country has to pay them unemployment benefit, when the company are able to show that if they had been allowed to produce the output they could have produced, they could have disposed of it abroad to foreign countries. Scandinavia, particularly, has been a very forward market during the last quarter, and also other countries in Europe and some of our Colonies. I have here a list showing exactly how this company could have disposed of its output had it not been for the quota restriction and the machinery under which the quota is regulated, which prevented the coal from being produced. The matter is one which excites great apprehension in the district. Let me quote a resolution passed by the Town Council of Buck-haven, one of the ports on the seaboard, where a number of the miners reside. It was passed on the 12th of this month and is to this effect:— They view with concern the notices posted by the Wemyss Colliery Company terminating contracts on 22nd instant, notices which would affect 5,000 men, owing to the operations of the Scottish District Mining Scheme, and resolve to petition the Secretary for Mines to adopt measures which would enable the company to withdraw the notices. Since that date a further allocation has been given to Scotland of 150,000 tons. If the quota is to be kept on, is it reasonable machinery suddenly to take a step on 14th December, within a fortnight of the end of the period, and to say that there is another 150,000 tons which you can produce? Surely there is something wrong with, machinery which delays the additional grant of quotas when the Central Council have been asked to grant a further allowance and have not given enough. It is a tragic situation when men and women understand that but for the operation of the quota that coal could be produced and their work could be safeguarded, and when the employers are in a position to demonstrate that, given leave to produce that coal, they have a market for it abroad. What possible justification can there be for allowing the machinery by which this scheme is regulated, to bring about results like that? I most earnestly urge the Minister to do what be can by administrative action to accelerate the machinery, not to have a regulation of output which comes to be a strangling of output where export is concerned, but to have special regard to the export trade which it is the policy of the Government to encourage just now.

There are other points that I would have liked to have touched upon, such as the purchase of a quota, which is a very poor equivalent indeed for the purchaser who has a market abroad for his coal. I have given one example of the working of the quota in my own constituency. I know there are others on the other side of the Border. There is just now a decided tendency for the export trade to improve, but that improvement is being thwarted and prevented by the restrictions of the quota.

4.32 p.m.


May I tender to my hon. and learned Friend congratulations on his maiden speech? He has undoubtedly made a most valuable contribution to this House, to Scotland and to his constituency, and I only regret that he had not longer time to develop his argument. I hope we may hear from him again on an occasion when there will be more time for him to speak. The importance of the subject under discussion bears no relation whatever to the time that has been left to discuss it, nor indeed to the discussions that have gone before it, and I think that many people who are interested in the coal trade, when they read their newspapers, will say unpleasant things about the machinery of the House of Commons when it does not allow fuller discussion of this most important topic.

I would like to develop the argument of my hon. and learned Friend and give a further instance of the way in which the quota is strangling our export trade in coal. It is an instance drawn from my own constituency. We applied as soon as we could for an extra allocation of quota. We could not get an answer, and there were delays. Finally, though we had applied for 450,000 tons, we received an allocation of merely 300,000 tons. After a considerable agitation and a visit to Scotland, the Minister saw the firm, who had undertaken to supply this coal to Scandinavia. They had not only to cancel the order while their men were standing idle at the pits in the Lothians, but they had to pay an indemnity for the cancellation of the order. It was proved that at least a portion of that order went to Poland. Those of us who endeavoured a year ago to prevent the Act from being continued in its present form prophesied that this sort of thing was bound to happen, and it has happened not only in this particular county but in several others.

In the first place, this system is a handicap to administration. In tendering for contracts and in regard to applications for re-sale quota and in other respects there are delays and uncertainties. A new type of middleman has been introduced who trades and deals in quotas. Secondly, there are the financial burdens involved. Thousands of pounds are paid yearly by the best concerns in buying quota. The colliery to which I have just referred has paid £8,000 or £10,000 in the last two years in buying quota. No services have been rendered for that money. On the other hand we find concerns which cannot raise their own coal but are given the right to raise coal. These concerns can sell that right at the rate of 1s. 6d. or 1s. 9d. a ton. The result is that a firm which merely signs a paper and lets to another its right to produce coal, for 1s. 6d. or 1s. 9d. a ton, makes a better profit in most cases than the firm which actually raises the coal. The profit of the firm which raises the coal may be only 3d. a ton. They may even incur a dead loss.

Apart from the effects upon administration and the financial burden, we have also the check on development. A colliery is unable to develop expanding seams. A man told me the other day that he could build a thousand extra houses in a particular area in the next two years if he could get his development. Then take this case. We find that 150,000 extra tons were allotted to the Scottish district. To those pits in the Lothians which are being put on half time—and it is a most unfortunate period at which to put miners on half time—this extra allocation merely means one and a half days extra work. It means an, extra allocation of quota to pits which had no orders, yet at the same time in order to keep the men working up to the end of the year a colliery which I have in mind has had to spend 21,800 in buying quota to keep the men at work and complete their orders.

There is a, further anomaly. There is the difficulty of differentiating between export and inland coal. The Minister in reply to a question the other day said that under the Act it was possible to make that differentiation. I was very glad to hear that remark and we only wish that he or his predecessors had given effect to such a possibility before. I have consulted with several leading experts in Scotland and they have assured me that it is impossible for practical purposes to make such a differentiation. It may be done on paper but in the actual practice of coal-mining, they say, it is impossible to differentiate between export and inland coal. I am not going into that argument now, but if the Minister finds it practic- able to put that differentiation into effect we shall have gone a step forward towards solving the problem.

As regards the export trade, I am content to say that at a time when there are possibilities of expanding our export trade, when for the first time there is a depreciated exchange, when considerable advances are being made in the industrial uses of gas, meaning extra coal consumption in many countries—at this time we have chosen deliberately to place on the export trade the burden of allowing uneconomic pits to prolong their lives and have handicapped the pits upon which depend our chances of success in international markets. We know of many examples of international contests in which other countries subsidise their representatives and we do not subsidise ours. We have the example of foreign Olympic teams which are subsidised by their countries. This is an Olympic contest, a chariot race, and we have decided that we will not run our best horses, but that we will mix up the old crocks and the best horses together in teams of four, and, further, that we will make the traces of the best horses shorter so that they will have to carry the whole weight of the chariot and of the crocks as well.

I believe that there are further powers under the Act which have not yet been put fully into execution. I believe that there are also further powers at the disposal of the Minister, but of that I am not quite sure. Whatever powers there may be under the present Act that have not yet been put into execution, if they are capable of being used to set right this intolerable situation of burden on the best export pits, of men standing idle while there are orders to fulfil, although personally I am not one of those who believe these powers are effective, or that they could be used, I am sure that we are all more than glad to trust the Minister to use them to the fullest extent during the next few weeks and months. If he should find that he, or those in the central councils, are unable to give effective expression to these powers, I hope he will come to the House and ask for further powers.

4.42 p.m.


I cannot follow the hon. and gallant Member for Midlothian (Captain Ramsay). I would like to ask why it is that from Scotland mainly this attack on the Act has come? In my own county there is no weight of opinion such as seems to exist in Scotland. I am tempted to ask who represents Scotland on the central council, why do their representatives not obtain adequate treatment from the central council or the district board, and why cannot the district board not allocate the surplus allocation which has always been available to those pits which really have the orders? Scotland compares rather badly with other districts, for, according to the figures, in the September quarter this year the percentage of deficiency compared with allocation was 10.7.

Commander COCHRANE

Will the hon. Member explain how you can fill an order for 50,000 tons when we only have a surplus of 30,000 tons?


It is in your own hands. The 10.7 per cent. represents 782,657 tons.


If you have got only 25,000 tons of quota left, and you have an order for 30,000 tons or nothing, how are you going to fill it? If you do not fill it, does that not account for the disparity between allocation and deficiency?


The few cases which have arisen during the last few months, and others which are hypothetical, cannot prove the case against this part of the Act. In Durham some of the pits are working full time and getting more than the minimum price for their coal. That is why I would like to ask the Minister to tell us something about the representation of Scotland. In a leading London newspaper to-day we have an interesting example of the sort of campaign that is being carried on against this part of the Act. In the "Daily Express" to-day there is an incredibly stupid front page article in which the amazing statement is made concerning this part of the Act, that the Northumberland owners are going to smash it by an action which, under the Act, is quite absurd. Perhaps the Minister can say whether he has seen that article himself.

The issue seems to be between co-operation and co-ordinated control and absolutely uncontrolled competition, and we must be very careful before we urge the Minister to take any steps to abolish a portion of this legislation. We must be very careful to find out whether it would not be a greater detriment to the industry as a whole if this part of the Act were abolished. It seems to me that there might be such a chaotic condition and such a, process of attrition set up that it would be far worse for the industry than the present irregularity, which is due more to the engineers operating the machine than to the machine itself. If one looks at the 1930 Act, one will find an answer there to every point that has been put forward by the last speaker. Every point in that speech can be covered by certain sections of the Act, and it can be shown that the machine is all right, but that the engineers who have the duty of operating the machine in their own interests are at fault. Perhaps the Minister could therefore give his views on the operation of the machinery in all exporting districts.

4.47 p.m.


I am sorry that hon. Members who desire to take part in this Debate cannot do so, but my task in replying is even harder than theirs. There is a diversity of opinion among those connected with the coal trade, and the diversity of opinion in this House again, namely, that the bulk of those who have spoken have spoken against the Act and only the minority in favour, is not comparable to the diversity of opinion outside in the coal trade. The majority of the coal trade outside would be in favour of the continuance of the Act. [Hon. MEMBERS: "No!"] I am making a statement of fact which can be proved. It is obvious that there is a division of opinion. Secondly, the whole House attaches great importance to the development of the export trade, and the Government attach the most urgent importance to it. Indeed, we have been spending the recent weeks in very grave endeavours to expand the export trade. It is also the policy of the Central Council operating the machine to do all that it can to facilitate the export trade in coal. My hon. and gallant Friend the Member for Dumbartonshire (Commander Cochrane) in one sentence hinted at the difficulty. He admitted that at the moment you could not isolate the inland from the export trade. That is not quite accurate. You can, but as it is administered now they are not isolated, and I should be very surprised to find that some of those who are most forward now in putting the export case would support a scheme of regulation which freed the export trade and divided the inland trade from it.

My hon. and gallant Friend the Member for Midlothian and South Peebles (Captain Ramsay), who has taken such a great interest in this matter, with other Scottish Members, these many weeks, says that it is extremely difficult. I would remind him that it is the same coal, and the difficulty is not in the coal; it is in the will to work the machine which is the Act. There is one other thing. Naturally, Scottish Members are very keen to prevent happenings like that in Fife or the Lothians. All those working the scheme would he keen to prevent any order being lost in a foreign market, but I would not like the House to adjourn with the impression that this has been the regular practice of the last two years. It is indeed the exception. I have said more than once, in answer to questions in this House, when we have had assertions that orders have been lost owing to the operation of the quota, that there is all the difference in the world between assertion and fact. The assertions are many, and the verifiable facts are very few indeed. It so happens that I was able to verify one of the facts having to do with exporters in my own constituency.

Let me consider the machinery concerned. My hon. and learned Friend the Member for Kirkcaldy (Mr. Albert Russell) made an admirable maiden speech which we enjoyed and appreciated, and I only regret that he was not able to put the case at greater length, but we hope to hear more from him on another occasion on this important issue. He will know, as I already informed him when he brought the matter to my notice many weeks ago, as did other hon. Members in Fife, that I could not to-day discuss the question of the Wemyss Colliery Company. He knows perfectly well that they applied for an extra allocation. It was refused, not in London, but by the Scottish Executive Board. The company appealed to independent arbitration. Independent arbitration may be either one person or two, one on each side—the executive board on one side and the coal-owner on the other. It also may consist of three persons. The demand of this company went to arbitration, and it was refused. Therefore, it must be obvious on the face of it that there is a great deal more to be said in this case than has been said in the propaganda on behalf of the company or in the comments that have been made in public. The case is sub judicenow because a particular consumer of coal who gets his coal from that firm has taken advantage of the machinery of the Act. Bodies of workmen can take advantage of that machinery, and it is significant that they have not done so. A consumer, however, has taken advantage of it, and at the present moment the case of the consumer as against the Scottish Executive Board is under investigation.

It is true that the 150,000 tons extra allocation to Scotland will only make work for 1½ or 2 days at the most. Nevertheless, it was known that there is machinery in the Act whereby if pits cannot use their share of the allocation, it may be purchased by others. That was put in the Act in order to make elasticity as great as possible. Scottish Members appear to think that Scotland has been unfairly treated by being dragged at the tail of England, but I think the facts are so startling that the House is entitled to have them, and Scotland is entitled to have them. I need not go into the major point that there has been an excess of allocation over output in every quarter since the Act started, for that is true except in two small coalfields. It is also true that in the December quarter last year there was a very narrow excess, and owing to the expansion, which was perhaps a forecast of what is going on in North-West Europe—for which I know hon. Members will not blame the Government—the allocation was lower than it might have been if that had been foreseen. The figures are that the highest allocation excess was in March, 1932, and that was 10,000,000 tons. The lowest excess was 2,100,000, that is to say, 15.7 per cent. and 4.4 per cent. That was for England. In Scotland the excess for the September quarter, 1932, was 10.7 per cent. I may point out that the allocations have nothing to do with the standard tonnage. That is an arrangement between pit and pit inside the district. The allocations are made by the Central Council, on estimates by the Executive Board, and, though it is true that Scotland did not get its original demand, it has now the maximum allocation that was asked for by the Scottish Board.

Those who think that Scotland has been unjustly treated ought to consider two sets of figures. The point made by the hon. Member for Dumbarton is a very important one. It is that there is a great relationship between the inland and the export trade. I can put the facts in two sentences. It is a very remarkable thing, in the case of the export trade during the last 10 months, that at a time when every other exporting district in Great Britain has had decreases, many of them heavy decreases, the only exporting district to increase its export was the East of Scotland. The West of Scotland shows a decrease, and so do Durham, Northumberland and South Wales, some of the decreases running up to 1,250,000 tons, whereas the East of Scotland has an increased export trade of 749,000 tons. That is not all. There is the coastwise traffic. Apart from two small ports in England, every district in England and Wales which takes part in the coastwise traffic shows a decrease for the last 10 months, but the East of Scotland shows an increased traffic of 336,000 tons and the West of Scotland over 100,000 tons. My Scottish friends will be on very dangerous ground if they attempt to argue that the Act as a whole is treating Scotland unfairly.

There are two other points. I can dismiss the article referred to by the hon. Member in two sentences. In the first place, the writer of it commits the gravest sin that any journalist can commit. He prints news which is eight days old. He says that the Central Council have decided to give full allocation. That was decided on the 14th December, and refers only to the current quarter. The rest of the article I will dismiss by saying that the statements are so inaccurate that I can only think the writer was born of romantic parents. Another point was raised by the hon. and gallant Member for South Midlothian (Captain Ramsay) as to whether or not it is possible to separate inland and export coal. It is possible. It is provided for in the scheme. Let me give the relevant quotation from the Act. Section 18 says: 'Class' in relation to coal, means a class determined according to the nature of the coal …or according to whether it he supplied for use in Great Britain or for export to any other country. The Northumberland scheme, the Durham scheme, the Scotch scheme, all provide that if the Northumberland Executive Board, the Durham Executive Board, or the Scottish Executive Board desire to free the export trade they can do it by determining that a class of coal shall be export coal, for export coal is a class of coal in the terms of Section 18. I am not the judge, nor the Central Council, which has no power in this matter. I am stating the facts. To say why they have not done so would require an hour's speech, and at 5 o'clock on the day of the Adjournment I am not able to give that hour's speech, and I will sit down with one more sentence. I beg to reassure the House that both the Government and the Central Council intend to do all that can be done—and much can be done inside the scheme—to see that the export of coal from this country is not hampered but is helped.

Question put, and agreed to.

Adjourned accordingly at One Minute before Five o'Clock until Tuesday, 7th February, 1933, pursuant to the Resolution of the House this day.