BRITISH HYDROCARBON OILS PRODUCTION BILL.

HC Deb 08 February 1934 vol 285 cc1333-97

Order for Second Reading read.

4.7 p.m.

The SECRETARY for MINES (Mr. Ernest Brown)

I beg to move, "That the Bill be now read a Second time."

This Bill arises from an announcement made by the Prime Minister on 17th July last that the Government had decided to give a preference of not less than 4d. per gallon on oil derived from certain indigenous products, coal, peat, shale and the derivatives thereof. On 25th July we had a Debate on the Mines Department Estimates which was practically a Second Reading of this Bill. I think, therefore, that I shall be consulting the convenience of the House if I take the general principles there debated for granted, and content myself to-day, first of all, with informing the House what has happened since the announcement was made, analysing the Bill and giving the House such information as I have as to how the suggestions then made are working out in practice.

As points arise in the subsequent Debate, by the leave of the House and your leave, Sir, I will take the opportunity to reply to such points in addition to those put in the Debate of 25th July. This Bill, as the House knows, arises from the Prime Minister's announcement, and I think I may say that its purpose seemed to be generally approved. By that, I mean to say that hydrogenation and low temperature carbonisation of coal in order to obtain oil has in past years been the staff of all political parties. They have all desired something to be done in the matter, and, as I said in the Debate on 25th July, it seemed to me that the objections were not so much to the purpose of the announced policy, as, first of all, to the method adopted, and, secondly, some Members expressed some dubiety about the finance that might or might not be involved thereon.

It is not very often that, following a Government announcement of policy, the Minister responsible for that policy is able to report quick results, but in the present case this Bill, which is designed to give legislative effect to the decision of the Government, has already brought certain striking results. Immediately following the Government announcement, Imperial Chemical Industries, Ltd. issued an official statement that they proposed to proceed at once with the steps which were necessary for the erection of a plant at Billingham. This plant was designed to produce 100,000 tons, or 30,000,000 gallons, of motor spirit by the hydrogenation of coal. Secondly, provisional figures have just become available which indicate a fairly substantial increase in the quantity of benzol obtained last year from gas works and coke ovens. Thirdly, there was some increase in the quantity of motor spirit obtained from shale oil, and the same is true of low temperature carbonisation processes. The Chairman of Low Temperature Carbonisation, Ltd. has recently announced that it is the intention of his company to erect two further plants, and this decision is partly due to the increased demand for oil products obtained in that process. These developments, I think, will be viewed by the House with satisfaction.

Now may I analyse the Bill which is before us this afternoon. It is a Bill which is, of course, in its three Clauses complicated in form, although it is simple in essence. Clause 1 provides for a preerence for home produced light oils, that is for light hydrocarbon oils manufactured in the United Kingdom from coal, shale, or peat indigenous to the United Kingdom, or from products produced from those substances, and the preference will not be less than 4d. per gallon. Clause 1 (2) defines "preference" and hon. Members will find a double definition. First "preference" is defined as the amount of the Customs duty payable on light hydrocarbon oils if no Excise duty is payable; and, secondly, as the difference between such Customs duty and any Excise duty, if an Excise duty is payable. By adopting the definition of "light hydrocarbon oils" prescribed by Section 2 of the Finance Act, 1928, the preference is limited to what is popularly known as motor spirit. Clause 2 provides for information. It gives the Board of Trade power to collect information relating to the quantities of light oils produced, and the types and quantities of the materials used. This will enable the Mines Department to secure information which will enable it to follow the degree of development of all processes to which the guarantee applies. The second Sub-section of Clause 2 is the usual provision to safeguard the disclosure of information relating to individual undertakings.

Clause 3 is the short Title and the duration. Here I have to trouble the House with an explanation of a formula. The formula is the relation of a rate to a date. It covers the period during which the preference will continue. As the House will remember, the Prime Minister announced that it would be for a period of 10 years from 1st April, 1934, but if the preference in any period after 1st April, 1935, exceeded 4d. a gallon, the period of 10 years would be reduced by the equivalent of the excess. The Clause, therefore, provides that the preference will continue until 31st March, 1944, with a proviso which deals with the reduction of the period if the preference exceeds 4d. a gallon. The period is to be reduced by adjustment if that excess preference occurs in respect of the half-year beginning 1st April, 1935, and each subsequent half year.

On the basis of 4d. a gallon, the total preference during the period 1st April, 1935, to 31st March, 1944, is 36 "pence-years." I remember my hon. Friend the Member for West Middlesbrough (Mr. K. Griffith) complaining to the House once that the Ministry of Labour produced a Bill concerned with "man-years," and said he did not like these hybrids, and I agreed with him. I remember that he pointed out that a man might be in a boat which was very leaky, and he might be baling out so many pints an hour, but that, although he might achieve a most impressive total of pint-hours, yet the boat might sink. I am, therefore, sorry to trouble the House with a formula based on a hybrid, but, as the formula is concerned with the relation of a rate to a date, I do not see how it could be avoided. Perhaps I might put it in this way. It means nine years at the rate of 4d., and the proviso sets out the method of assessing the preference every half-year, in order that it may be terminated when it has amounted to a total of 36 pence-years. In working out the details of the proposal it was considered desirable for practical reasons to review the position each half-year, and the Bill provides, in the last proviso to Clause 3, for the full amount of the preference announced.

Turning to the formula, it sounds complicated but is really simple. A formula is a kind of jargon; it is a method of language used by experts to make simple things sound mysterious. In this case it sounds complicated because it is elastic. The points that I want to put before the House are these: First of all, the Government is always in control of the formula. The preference may be 8d. for 4½ years, or 4d. for nine years from the 1st April, 1935, or for 10 years from the 1st April, 1934, or for some intermediate period, as the circumstances demand. If the Customs duty is lowered, or an Excise duty is levied, or both are operative, then the period will be shorter or longer according to the amount of the preference, whether that be 8d., or 6d., or 4d., in terms of the total pence-years; but in the end, whatever the particular rate of duty, Customs or Excise, may be in any particular half-year, the full preference of 36 pence-years must in the end work out.

Perhaps I may give the House one or two illustrations. The Treasury will calculate, to three places of decimals—I hope that that will satisfy the hon. Member for Central Southwark (Mr. Horobin) that the Treasury are looking after the national interests in this matter—as soon as possible after the 30th September, 1935, and at the end of each succeeding half-year, the amount of the preference during the half-year then ended; and if the amount of the preference exceeds 4d. per gallon, the period of the preference will be reduced by 46 days, that is to say, one-quarter of a half-year, for each 1d. of excess and at the same rate for any fraction of 1d. excess. Hon. Members who do the multiplication will find that on that basis the year works out at 368 days, but they will also find that if they try any other figure they will not get as near to 365 as 368 is. The relation will be that for each extra 1d. of preference in each half-year the period will be reduced by 46 days. When the figure has been worked out, the reduction of the period will be made formally by Order.

Let me give one or two examples. If the import duty of 8d. per gallon remains in force during the half-year from the 1st April to the 30th September, 1935, and no Excise duty is imposed, the preference will be 8d. per gallon, that is to say, an excess of 4d. over the guarantee. The Treasury will thereupon by Order announce that the period will be reduced by four times 46, that is to say, 184 days, and will accordingly expire on the 29th September, 1943. Again, supposing that during the next six months the import duty is reduced on the 1st December, 1935, that is to say, two months after the half-year starts, to 7d. per gallon, and an Excise duty of 1d. per gallon is imposed on the same day, the average rate of preference will then be calculated to three places of decimals, and the result will be 6.666 pence. This, as hon. Members will see, is an excess of 2.666d. over the 4d., and the period of the guarantee will accordingly be reduced by 2.666 times 46, or 123 days, and the date of expiry will be brought forward from 29th September, 1943, to 29th May, 1943. This procedure will be continued until the equivalent of 36 pence-years has been granted.

Mr. D. G. SOMERVILLE

Is a special department to be set up to make these calculations?

Mr. BROWN

I think that, if my hon. Friend will follow this in the OFFICIAL REPORT, he will see that it is by no means as complicated as it looks. At the end of the period a certificate will be issued by the Treasury to that effect. May I put it in another way? Taking the same example, and supposing that on the 1st December, 1935, the import duty is reduced to 7d. per gallon and an Excise duty of 1d. per gallon is imposed on the same day, the preference will then have been two months at 8d., that is to say, 16d., and four months at 6d., that is to say, 24d., or a total of 40d., and if hon. Members will divide the 40d. by six they will arrive at the same figure. I may say, however, that the actual calculations will not be done by months, but by days. The House will realise that the basis of the formula is a preference of 4d., and the period in relation to that basis is 46 days for every 1d. of preference; so that, taking the tax of 8d. per gallon which is in existence now, and the preference of 4d., it means that, if the tax remains at 8d. the period will be 4½ years, whereas if, whether by reduction of the tax or by the imposition of an Excise duty, the preference is reduced to 4d., then the period of the preference of 4d. will be nine years.

Mr. MOLSON

Has the Government Actuary checked all these figures?

Mr. BROWN

I do not think there will be any need for that. My hon. Friend may rest assured that this has been checked, and that it carries out to three places of decimals the undertaking which was given; and that is the basis on which the operations to which I have referred will go forward.

Mr. LAWSON

It is going to be 9d. for 4d.

Mr. BROWN

The hon. Member for Chester-le-Street (Mr. Lawson) is not displaying quite his usual accuracy in saying that. It is nine years at 4d., or 4½ years at 8d.

Mr. LAWSON

It sounds like 9d. for 4d.

Mr. BROWN

Perhaps I ought to say that it is nine years at 4d., or 4½ years at 8d., or any intermediate period related to any particular rate of preference. Let me make one other point. Let me call hon. Members' attention to the last part of Clause 3, which provides that This Act shall continue in operation until it is certified by the Treasury that the preference thereby provided for has been equivalent to fourpence per gallon for nine years, and shall expire upon such a certificate being given. That is the proviso to which I have referred, making it quite sure that the preference shall operate for the full 36 pence-years. Let me give the House one or two more facts. As the House is aware, in anticipation of this Measure there has been an outstanding development in the proposal to erect a plant at Billingham. Billingham is, of course, in one of the most distressed of our areas. Plant is to be erected there for the manufacture of motor spirit by the hydrogenation of coal, and the House will expect me to give the most recent particulars. At the end of January the number of men employed at Billingham or by manufacturers engaged directly on the manufacture of the Billingham hydrogenation plant was 10,400, and I understand that the peak employment has not yet been reached. Up to the same date the orders placed for machinery and equipment amounted in value to £1,100,000, of which £360,000 represented the value of orders placed on the North-East Coast. Already between £500,000 and £600,000 has been spent by Imperial Chemical Industries directly, and by outside manufacturers; and between now and the spring of next year, when it is hoped that the plant will be completed, further large sums will be paid out in wages and for equipment. A large proportion of the money spent is aiding the iron and steel industry, and therefore, of course, the coal industry. Good progress has been made on the site, and the actual erection of the plant has begun. Those who were so concerned to stress the potential loss to the Exchequer which the preference involves will perhaps be willing to take note of these particulars, and bear in mind the fact that, as a result, a substantial sum will have been placed to the credit side of the account before any loss to the Exchequer can possibly arise.

I stated on the 25th July that there was every indication that the consumption of petrol in this country during 1933 would show a substantial increase over that in 1932—itself a record year. The final figures are not yet available, but it may be stated now that the increase will be not less than three times the quantity of motor spirit which the Billingham plant is designed to produce annually. Those who are making calculations without regard to all the facts might note this. I believe that the announcement of the 17th July last, quiet though it was, may well prove to have been one of historic importance. I see that a Motion for the rejection of the Bill has been put down, but that relates, I understand, not so much to the purpose as to the method adopted. I will only add one thing to what I was able to say on that subject on the 25th July. It is that calling for control in this matter is one thing, that coining a slogan is another thing, but that carrying out negotiations to a practical conclusion is a very different thing. In my judgment, if the policy outlined in the Motion for rejection had been adopted, no Minister would have stood at this Box to announce this very important development.

Mr. BATEY

Of course he would.

Mr. BROWN

The hon. Member is always quite sure about this matter, but I have given my opinion as to what would be the position if that policy were adopted. If the point is further alluded to, I shall be able to give other facts in addition to those which I have already given. I only lay stress on this point at the moment, that the method that we have adopted has not been any direct subvention from the Exchequer at all. Those who are trying to draw comparisons between one and the other are basing them on a fallacious foundation. It gives those who have planned ahead in this great development an assurance that they will have this preference of at least 4d. for nine years, and on that basis they are prepared to go forward. I do not believe, in the light of the public expressions of opinion which have been made since the announcement of 17th July and the Debate of 25th July, that this House will do other than give an overwhelming majority for the carrying out of this policy. I have great pleasure in moving the Second Reading of the Bill which, like the announcement, might quite well become historic.

4.31 p.m.

Mr. GEORGE HALL

I beg to move to leave out from "That" to the end of the Question, and to add instead thereof: this House, realising that the coal-mining industry and any developments therefrom are a national interest, declines to assent to the Second Reading of a Bill which fails to ensure through public ownership and control that the researches of science shall benefit the community and not be exploited for private profit. I feel sure that everyone, like myself, understands the Minister's explanation of his Bill. He must have lived with hydrocarbons for the last six months to be able to deal with that very complicated formula. We are talking about hydrogenation and low temperature carbonisation, and we might go on to pulverisation and colloidal fuel. I can understand anyone who has lived, as the hon. Gentleman has lived, with those terms for the last two or three years being able to explain the formula as he has done. This may be described as a small Bill, but it is a very important one, because in it there is the possibility of laying the foundation of a very important industry. We on this side are concerned to see that the founda- tion shall be well and truly laid. The Minister for Mines has said, not only to-day but previously, that if my friends sat on that side of the House they would not have the very great pleasure of introducing a scheme of this kind. We think we should have had not only the pleasure but the very great honour of laying the foundation for this new industry upon a very much sounder basis. The hon. Gentleman did not to-day, nor did he on 25th July, deal with any agreement or arrangement between the Government and Imperial Chemical Industries Limited. Are we to understand that there is no agreement outside the promise of the preference which is contained in the Bill, and that Imperial Chemical Industries are to go on in their own way under the shelter of this preference? Is there any agreement as to future developments? Can the output, if the industry is successful, exceed 30,000,000 gallons per annum for each of the nine years during the time that the preference is in existence, or the four and a half years if the preference continues at 8d.?

Then, if there is an understanding that the industry can be developed, and a very large increase in the commodity can be produced from coal, additional plant will be required? Is there any understanding as to where these plants are to be placed? Is that a matter to be decided by Imperial Chemical Industries without thought of the distress or the difficulties with which the coal industry is confronted? Then we might ask about the price of petrol. It is reported that petrol can be produced from coal by this process at something like 7d. a gallon. That is the figure that has been talked about for some time and I think the figure that appeared in the Press. The price of petrol at the Thames side has been low for the last two or three years, but in 1927 it was even higher than the price at which it is estimated it can be produced from coal by this process. Is there any understanding between the Government and the Company which is going to develop this process that, in the event of the price of petrol increasing, the preference shall be reduced?

I think the Bill is understood by every Member in the House. We had what may be regarded as a Second Reading speech on it when the announcement was made in July. We on this side are defi- nitely of the opinion that the basis of a very important industry is now being laid. As far back as 1925 the Lord President of the Council, referring to the production of oil from coal, said: The time has not come yet when a commercial process has been successfully devised. It will come. It may come soon, it may be in a few years, but it is as certain as that we are standing and sitting in this House this afternoon that what has proved successful in the laboratory will be proved successful commercially, and, when that day comes, although what is discovered in the laboratories must be the common property of the science of the whole world, yet it will give to this country probably the greatest push forward and development that it has had since the discovery of steam. That is not the prophecy of one who can be described as a wild man. We know how careful the right hon. Gentleman is in choosing his words, and we know that he does not often prophesy, but not only has this phophecy come from him, but reference is made in the report of the Samuel Commission to the possibility of this development. The National Power and Fuel Committee, appointed by the then Conservative Government, reported in 1928 that we were getting near the time when this development was likely to take place and that the country ought to be made independent of the increasing importation of fuel. The development has taken place to a very much greater extent in Germany than in this country. We read in a report in the "Times" in December that they are producing 100,000 tons of oil from coal, very largely as the result of this process, and are laying down plans for increasing that amount by something like four times. That indicates that the attitude adopted by my hon. Friends and myself is a correct one. The Minister referred to the fact that during last year there had been an increase in the output of benzol and oil from low temperature plant and that there had been an increase in the amount of petrol used in the country. The increase in the amount of petrol motor spirit is startling. He gave figures in July to the effect that in 1927 the amount of motor spirit imported was about 680,000,000 gallons. Last year it had increased to nearly 1,100,000,000 gallons. For the first time in the country's history it can rightly be said that more than 2,000,000,000 gallons of oil of all kinds were imported, and that is competing day by day with the home-produced fuel on which the country has been so dependent for a number of years.

The tendency is that the dependence upon oil is going to increase considerably. The number of motor cars is increasing year by year. The proportion of new shipping using oil is very much larger. Last year something like 70 per cent. of the new shipping constructed was oil-and not coal-consuming. During the last three or four months we have frequently heard the wish expressed that we should build more and larger aeroplanes, and in that direction there is going to be a considerable extension. Motor vehicles, ships and aeroplanes are dependent upon imported oil. The coal industry has to watch very carefully the development that is taking place on the railways. They consume something like 13,000,000 tons of coal a year. Last year the consumption was down to about 11,500,000 tons. I saw a report of the speech by Sir John Cadman some time ago that, if the railways were turned over to oil-electric engines, the power which it now takes from 11,500,000 to 12,000,000 tons of coal to produce can be produced with something like 1,500,000 tons of oil. If oil is going to be used to the extent that we think it is, and if oil can be produced from coal, we say that the coal in this country should be used for the purpose. Although there has been this increase in the use of oil, there has been a further decline in the production of coal in this country during the past year. The coal produced during last year was about 2,000,000 tons less than it was the year before, and the actual consumption of coal in this country was down by 1,500,000 tons.

I do not intend to go into the economics of this process. The hon. Member rightly said that as far as we were concerned, although we wanted to see the process established, we thought that the method of approach by the Government was wrong. Here is an opportunity, in our opinion, for this new industry to be definitely linked up to coal, and the whole of the benefit likely to accrue from the development of this industry should come back to the mining industry. The Bill proves that neither the Government nor the mineowners will have anything to do with the organising of the production of oil from coal under this process. All the Government are to do is to maintain a ringed fence, in the shape of an import duty within which private enterprise is left to act as it chooses. That is the understanding or agreement of the Government with Imperial Chemical Industries, who, I take it, will, when given this guarantee, develop the process only if they can make a profit out of it. We are told that the development which will take place will represent a very small increase of those who will be permanently employed. We were very pleased to hear the Secretary for Mines announce the fact that at the present time there are something like 10,000 persons employed on the whole of the necessary work for the purpose of the construction of this process, and that when the process is in full swing something like 350,000 tons of coal will be required, representing the output of a fairly large colliery. Every addition to the volume of employment is in itself very welcome, especially to the coal industry.

As has been said, our criticism of the scheme is not based upon the small effect upon unemployment but upon the completely wrong approach to the whole subject. The Government by their action recognise the possibility of producing motor spirit and oils of various kinds from coal by these modern methods. We are definitely of the opinion that such processes will not stay where they are, but will extend and produce more and more of these commodities which are so vital to the nation. We believe that new industries will develop from the method of treating coal. The hon. Member referred to the fact that the plant at Billingham is to be established in a depressed area—a coalfield which has suffered very considerably as a result of the falling off in the demand for coal and through loss in the export market. I hope that the plant will be as near the coalfield as possible. I do not know the situation of Billingham and how near it is to the coalfield proper. We see the possibility to serve the depressed areas in this country by the development of these plants, and if they are put into these areas work will be created for people who have almost given up in despair. The establishment of these works will, in a small way, compensate for the loss of work at the collieries by the falling off in the use of coal.

As far as we can see, it is not the intention of the Mines Department or the Government to do anything to ensure the development of this industry upon planned lines. There is nothing in the Bill to safeguard the interests of the coal industry or the public. It should be common ground among all parties that the nation cannot afford to allow a new industry such as this to grow up in a higgledy-piggledy sort of manner with its path strewn with blunders and chaos. One would have thought that there had been sufficient experience in the last 20 years to have prevented a repetition of what was given to us, for instance, in the electrical industry, but the Government have not learnt their lesson and are quite prepared for another industry to develop in the same manner as did not only the electrical industry but the coal industry. Our Amendment calls for the treatment of coal to be organised under public control in order to link it definitely with the coal industry. When the Secretary for Mines introduced the Bill this afternoon he referred, as he did on 25th July last, to the fact that if a Socialist Government had been in power in this country they would not, he almost indicated, be allowed to introduce a scheme of this kind.

Mr. E. BROWN

indicated dissent.

Mr. HALL

That was the impression which the hon. Member gave me. On 25th July he indicated that it would not be an easy matter for a Socialist Government to get agreement on this matter.

Mr. BROWN

On those lines.

Mr. HALL

He said that the main process in which the country is interested was not invented in this country, and it might not have been as easy as hon. Members opposite suggest to get an agreement as to joint control, joint ownership, or joint working of the process."—[OFFICIAL REPORT, 25th July, 1933; col. 2494, Vol. 280.] Upon what does the hon. Member base that opinion? Is he aware that it was the Government of 1927 which assisted in approving of the process in this country? I understand that the Government of this country at that time had the opportunity of purchasing the process and the rights for the exploitation of the process in this country, and it was only as a result of the spending of a considerable sum of money by Brunner, Mond & Co. at that time that that firm were able to control not only the British rights but the British Empire rights, and from 1928 up to the present time the control has been in their hands. The hon. Member has not given any information to the House as to how or who makes up the international company to which he refers. I take it that he was referring to the International Hydrogenation Patents, Ltd. Have the Government taken the trouble to ascertain the nature of the agreement between the Imperial Chemical Industries and this international company? How far can the international company interfere with the process in this country? Is it a company made up of other companies similar to Imperial Chemical Industries, who are anxious to exploit this process of producing oil from coal? Perhaps the hon. Member can give us an answer? Or does he know that two out of the four partners in this company are the Shell Mex Oil Co. and the Standard Oil Co.? These two companies control the largest oil companies in the world, and, as far as we know, seeing that the oil market in this country is the second largest in the world, it is questionable whether—and I want to qualify it—if this international company has anything in the nature of control over this process in this country, very much progress will be made. That is one of the things about which we on this side of the House are somewhat concerned. The hon. Member is not quite justified in inferring that the only Government who could introduce a scheme of this kind and lay the basis for the development of the process is a government such as the Conservative Government of which he is a member.

As a nation nature has provided us with an abundance of coal which is of excellent quality and well placed, and we have been using it very badly in the past. For some years past, difficult as the task has been, there is no doubt that progress in fuel research has been made, and I pay my tribute to the men who have worked in connection with the Fuel Research Station. They are among the most competent scientists and technicians that we have in this country. I think that if they had been given an opportunity, not only would they have desired to make tests at the Fuel Research Station but they would have been as interested in the development of this process as they would have been in making the tests. They would have been as keenly interested in the laying down of the basis for a new industry as were those technicians employed by private enterprise. Motor spirit can be produced from coal. The test is not only whether it can be produced, but whether it is a satisfactory fuel. The Secretary for Mines and Members of the House know that it has been proved by tests made by the Admiralty in fuel oil produced from coal, that a satisfactory fuel can be produced. In regard to petrol or aerial spirit used in aeroplanes by the Royal Air Force, it is said that they get results from petrol produced from coal equal to the results of petrol produced from oil taken from the oil wells. We say definitely that if this can be done, there is no reason in the world why there could not be a very much greater expansion than is provided for in the Bill which is before us this afternoon. We complain that the mine-owners of this country have not interested themselves in this matter as much as they should do. I do not wish to emphasise the point, but I was very interested in reading a speech which was delivered by no less a fuel authority than Sir John Cadman at the Institute of Fuel in October of last year. He said: It appears to me, moreover, that the coal industry under-rates the merits of the fuel it produces, and I believe that the present and future of coal would be very different if that industry had adopted a different attitude. I hope I may be excused from labouring this point to which I have already alluded, but it seems to be fundamental. In the past, and, to a great extent, even in the present, the coal industry has concerned itself solely with the production of coal and its sale in the solid mass at the pit-head. Thereafter, the industry ceases generally to be interested in its product; and it too often happens that whatever scientific or commercial progress the coal industry makes results not from anticipation of the needs of customers, but from pressure by them to compel the industry to adapt its products to their requirements. Take the case of hydrogenation: Whatever the merits of that process may be, it is surely a matter of the first interest to the coal industry that it should be tested. Instead, however, of the testing being done by coalowners, it is the chemical industry which has adopted hydrogenation; and, if that process should succeed, it will no doubt be the chemical industry which would mainly benefit. Again, coal will have lost an opportunity. Speaking at Cardiff, recently, he said: The hydrogenation of coal, if successful, could only benefit the people who were operating the process. The coal industry virtually gave away its coal to such secondary industries, and could not, therefore, derive much benefit from such activities as hydrogenation. That is the position. The Government have employed experts of the highest technical qualifications to deal with this matter. In our opinion they should have had the necessary imagination to set the work on foot. We claim that this development should be so planned that the treatment of coal should be linked up with the production of coal. That is not alone the view of those who sit on this side of the House. I read with considerable interest a statement which appeared in a newspaper which certainly does not usually advocate the points of view of those who sit on this side of the House, "The Sunday Times," just after the announcement was made by the Prime Minister in July, in a statement written by "Scrutator," followed exactly the same lines: The ideal would he that those who undergo the physical moil and danger of extracting the coal should also enjoy some of the reflected warmth from the more profitable by-products. The whole process from the hewing of coal to the manufacture of petrol should ideally be one trade, whose profits are equally diffused throughout. That is our case. The steady increase in the importation of foreign oil to this country is taking away the livelihood of some of the best of our people. For over 10 years the population in our mining areas have suffered from terrible unemployment. In some districts, especially in South Wales, the conditions are becoming worse. We do not suggest that if all the oil and petrol used in this country were produced from coal, that that would be an end of the difficulties with which the coal industry is confronted; it would not, but it certainly would give a fillip to the coal industry. It would revitalise the industry at a time when it requires it, and it would give hope to the men who are employed or unemployed and the women and children who are so dependent upon the coal industry.

Anything that can be done to assist the great coal industry should be done. Our complaint is that it is to be developed not in the interests of the coal industry but in the interests of Imperial Chemical Industries, Limited. They are getting a preference and they will get the profit if the process proves successful. In our Amendment we ask for a thorough planning of this great fuel and power industry. The Secretary for Mines, on the 25th July, said that if the miners had a plan why did they not submit it. The miners did submit their plan for dealing with this matter to the Samuel Commission. They laid the basis for the planning of the power-producing industries of the country. That is where we on this side of the House stand in connection with the question, and it is for those reasons that I move the Amendment.

5.5 p.m.

Mr. MALLALIEU

I am afraid that I cannot compete either with the charm of manner or with the lucidity of expression with which the Secretary for the Mines Department treated the House when he introduced the Bill. I hope, however, at a later stage to be able to compete with some of his logic. He divided 40 pence by six months with an agility which is characteristic of him. With that, again, I cannot compete, but I have this merit that, at least, I shall be very short. The proposal which underlies this Bill is most attractive, namely, to produce much-needed and much-consumed fuel, petrol, from what is the greatest potential source of our national wealth, coal. At this particular moment it is about the most attractive proposal that could be put before the eyes of our fellow countrymen, because the last few years of depression in the coal industry have made them fear that the future of that industry is by no means secure and that, therefore, the greatness of a country based upon it is by no means secure.

When the proposals were first brought before the country anyone who dared to question their wisdom was looked upon rather as an enemy to the country in some quarters, indeed, almost treated with that hysteria which is generally reserved for those who differ from the majority in times of war. But I think that people have been waking up to the dangers which underlie the proposals. I will not put the word any higher than that at the moment. There have been welcome signs that people are more alive now to the dangers underlying the proposal. Obviously, if it can be carried out at a reasonable cost and in a reasonable time any scheme which would set on its feet a new industry in this country and which would give renewed prosperity to the coal industry and render us independent of other countries for a fuel which is just as essential to our industries as it is to our Fleet, no sane man would object to an experiment being set on foot which had that for its object. So obvious, indeed, are the advantages which would flow from a scheme of that sort, if successful, that it behoves Members of the House of Commons to examine with the very greatest care all the available data, in order to be quite certain that our hopes in this matter have not carried us away and led us into thinking that we need not make any prudent study of, or take warning from, what available data there is.

It was truly said in a leading article on this subject in the "Times" newspaper on the 29th January of this year: At the same time the disquieting reflection arises that almost exactly the same considerations prevailed, and the same hopes were entertained, when the experiment of growing beet sugar was launched in 1924, The course and the cost of that experiment must not be repeated, and the years of the operation of the original scheme ought to be used to make sure that, when the trial period is over, the taxpayer will not be faced with the alternatives of continuing unaltered a scheme which by that time may involve a very much higher subvention or of allowing a considerable new industry to perish. That goes to the very root of the whole matter, and we in the House of Commons should scrutinise very carefully all the ascertained facts. As the Secretary for the Mines Department has set it before us, the proposal is that there should be a preference of not less than 4d. a gallon on light hydrocarbon oils produced from indigenous coal, shale or peat. The present position is that all imported petrol pays a duty of 8d. a gallon. I do not think it is unfair to go further and to draw the conclusion from these facts that every gallon of petrol produced in this country will, therefore, involve the Exchequer in a loss of 8d. so long as there is no countervailing Excise duty. No limit has been set on the amount of petrol which can take advantage of this proposal, but there is a limit as to the time, which the Secretary for Mines was at some pains to describe by means of figures. Apparently, the Government have in view directly one hydrogenation plant, though, of course, I suppose they would not object if any other plant sprang into existence.

The one plant is that of Imperial Chemical Industries at Billingham, from which it is proposed to produce 100,000 tons of petrol per annum, which is equivalent to 30,000,000 gallons. Thirty million gallons of petrol at 8d. a gallon will mean a loss to the Exchequer of £1,000,000 per annum. That is the loss which the Exchequer will, prima facie, suffer. That is the burden which will be placed upon the taxpayer. I know that there are certain offsets to this loss, because assuming that all the miners put into work under the scheme—I do not deny that there will be some—came from the unemployed, the Government's contribution in respect of unemployment pay would be saved; but I am afraid that when we have put such items to the credit side we shall not get the £1,000,000 loss appreciably lower. It is estimated that the plant at Billingham will find employment for 1,280 men in the course of the year. I am not dealing with the number of men who will be taken on to erect the plant but merely with the men who will be necessary to work the plant when once it is erected. That plant, requiring some 350,000 tons of coal a year will, I suppose, be able to employ 1,200 miners, since the average output of a miner is generally supposed to be 300 tons of coal a year. Therefore, we come to this rather arresting conclusion that the Exchequer will be spending—

Mr. E. BROWN

indicated dissent.

Mr. MALLALIEU

The Secretary for the Mines Department shakes his head. It is strictly true that we shall not be spending, but the taxpayer will have a direct burden put upon his shoulders of £1,000,000 per annum, and it seems to me that that comes to pretty much the same thing as saying that the taxpayer is going to spend £1,000,000 a year. That £1,000,000 is being spent in order to put 2,480 men into employment, or rather more than £400 per year per man; an exceedingly high figure. It is a coincidence that this figure is almost the same as the amount of the burden put upon the taxpayer at one time by the sugar-beet experiment. It is another sinister similarity between these proposals and the beet-sugar proposals of ill fame. Again, if all the petrol consumed in this country is to be produced, then, on the present basis of calculation—which I should like the hon. Member to criticise at a later stage if it is incorrect—the loss to the Exchequer would be no less than £35,000,000 per annum, and the amount of coal consumed about two and a-half weeks' output of the British industry. I can think of several ways in which unemployed men might be put into work in or about the coalfields; for instance, they might all be put into the mines to bring out coal which could be burned in dumps at the pit-heads. The only question the House would have to decide is, is it a remunerative expenditure, is it the sort of thing which benefits the nation as a whole. That is what we have to consider here.

As to the actual cost of the production of oil by the method of hydrogenation, the latest estimate I have is that it is about 5d. per gallon, and to that you must add a sum covering interest upon capital and depreciation. If 5 per cent. is allowed for interest on capital and 5 per cent. on half the plant for depreciation and 10 per cent. on the rest—no one will consider that outrageous—it would add another 3d. to the 5d. at which we have already arrived, which gives us the figure of 8d. per gallon at the works. In 1933 the average c.i.f. price of imported petrol was slightly under 4d. per gallon, so that the minimum preference of 4d. mooted in the Bill is one which is never likely to come into operation, because petrol could not be produced commercially if that were the only preference granted. The Government will therefore be tempted, if not compelled, to maintain the preference at a higher level, to the great detriment of oil users in this country who would otherwise benefit from a reduction in the duty. I should have thought that the German experience in hydrogenation would have rendered the Government chary of experimenting on this line in this country. Hydrogenation has been going on in Germany for many years and even now the production of petrol estimated for 1933 is less than the amount which it is proposed to produce in this country under this scheme. If it had been commercially successful in Germany surely the results would have been much more satisfactory as German producers of petrol by hydrogenation enjoy a preference of 9d. per gallon at par and other advantages, such as reduced railway freights, and one further immense advantage, in that they use for the main part lignite, which at 3s. per ton compares very favourably with 13s. 8d. per ton which British producers will have to spend on their raw material, coal. I know that more lignite than coal is required to produce a given amount of petrol, but allowing for that it appears that the raw material of German producers is much less expensive than will be the raw material of English producers. Germany also more than any other is a country which can turn chemistry to commercial success, but there is no ground in the German experience for believing that the experiment here will prove that petrol can be produced on a commercial basis.

I submit that in this matter the Government are being a little too clever. They believe that as they can alter man-made laws with their tremendous majority they can also alter natural laws. They are like King Canute, attempting to alter fundamental laws which are not susceptible of alteration by any human agency. The President of the Board of Trade did his little quota towards the destruction of a very promising line of progress at the World Economic Conference, by his statement that whatever anyone else did this country would have nothing to do with public works. It seems that the only works of which the right hon. Gentleman was thinking were remunerative works, and that if only works are unremunerative enough the Government are prepared to give them a chance. What a pity it is that the Department of Mines is no longer dominated by the spirit of Cromwell. They have substituted for Cromwell's common sense the spirit of poor stupid Canute. The only hope for the commercial success of hydrogenation in this country is a substantial rise in the price of petrol imported. What chance is there of that? Oil is more plentiful to-day than ever; there is more oil in sight than ever in the history of the world so that an exhaustion of world supplies need not be considered by anyone who is now living.

Sir ADRIAN BAILLIE

Can the hon. Member give us any figures, to show the known sources of oil supplies in the world, and how long they will last?

Mr. MALLALIEU

I have no figures, but my information is that there is abso- lutely no prospect that in the near future the oil supplies will become embarrassingly small.

Sir A. BAILLIE

Surely the fact is that it is impossible for any geologist or anybody else to forecast the oil resources of the world. It is no good saying that they will last 10 or 20 years; no geologist knows.

Mr. MALLALIEU

We have to make the best of what knowledge we have, and I am told that it will be a considerable time before we need fear any shortage. There are also economic reasons why hydrogenation cannot be a success in this country. Consider what you have to do. To obtain oil in the normal manner all you have to do is to bore a hole in the earth and the oil gushes out. Here you have to go through three expensive processes. The coal has to be mined and crushed and then made into a paste. You have to heat it under pressure, make your hydrogen, put it into a reaction chamber; all very expensive processes. How can this cumbersome and inefficient method be expected to compete with the simplicity of the other and more natural method? We on these benches do not wish to appear to be giving countenance to the Amendment that has been moved. We have no sympathy with nationalisation as such, but we do think that no Government which was not hysterically nationalist or else entirely oblivious to economic good sense, or to both, could countenance for one moment the underlying proposals of this Measure, which are in the nature of encouraging senseless inefficiency and a waste of national wealth and effort.

5.26 p.m.

Mr. CONANT

Not being a great mathematician I could not follow the arguments of the hon. Member for Colne Valley (Mr. Mallalieu). He claims that the Bill will be extremely expensive but recognises the need for the development of our own fuel resources. He suggests that the best method of doing this is to immediately remove the Customs Duty upon imported fuel. I do not agree. I think that the protection which has been given, and which will be given by this Bill, will secure some development of one very useful fuel in this country. The hon. Member for Aberdare (Mr. G. Hall) in his interesting speech expressed a different point of view. He expressed a desire to secure the development of our own fuel resources. There are not many hon. Members who do not agree as to the urgency for developing the fuel resources of this country. When we have become dependent to such an amazing extent for our fuel upon others, there are few people with any sense of responsibility who can afford to disregard the effects which must follow, not only upon our requirements for defence but also the ultimate effect on British industries. The only objection the official Opposition have is really a question of the method, and I listened most carefully to the hon. Member for Aberdare to find out what was their alternative suggestion. I recognise that there was no need for him to put forward any alternative, he is entitled to criticise without doing so, but nevertheless the Amendment for rejection does suggest an alternative and I had hoped that he would have told us something about it.

It is all very well to speak in vague language. Does the hon. Member opposite suggest that the Government ought to take over from the shareholders of Imperial Chemical Industries, and other fuel producing concerns, the right to produce fuel and petrol? If so, is it proposed that compensation should be paid, and on what basis? If that is the case, one ought to remember that the hon. Member for Ebbw Vale (Mr. A. Bevan)—I think it was he—expressed the view in July that this experiment would very likely lose money. Surely if the taxpayers of the country are to be compelled to take over a concern which, in the view of those who advocate its taking over, is going to lose money, the taxpayers ought to have some say in the matter? Surely it is better that those people who have voluntarily taken a risk, who have lent their savings in order that research may be carried out and in order that this experiment may be conducted, should be allowed to take that risk rather than that the community as a whole should be compelled to do so, whether they wish it or not?

Let me say a few words about the Bill as it affects my constituency. Both hon. Members who have spoken from the Opposition Benches rather assume that the Bill is going to affect Imperial Chemical Industries alone and confers a monopoly upon them. That, of course, is not the case. Imperial Chemical Industries is a very large concern, but it is only one of a great many concerns which are going to be affected by a stimulus to the production of oil. In my constituency a great deal of benzole is produced from coal, and this process will be directly assisted by the provisions of the Bill and the guarantee of a preference. While the Bill guarantees a preference to the production of petrol it also seems to me to assist the production of all other forms of British fuel, because in effect it guarantees a minimum Customs duty of 4d. per gallon on imported oil; it guarantees the difference of 4d. between Customs and Excise duty for nine years from next April, and the effect will be that the Customs duty must be at least 4d. Therefore it seems to me that the production of all fuels in this country will indirectly be assisted.

Of course there are many other fuels that can be developed in this country from coal. It would be most unwise now to attempt to say what will be the most economical and the most efficient fuel for British industries in the future. Personally I hold the view that oil produced from coal will not be the fuel of the future. Production is expensive and elaborate. I do not know whether hon. Members know that there is an oil well in this country, not far from my constituency. It was sunk in 1918 and is still producing oil. Therefore, while I agree that this production of oil from coal is very well worth stimulating for many years to come, I do not believe this fuel is necessarily going to be the most efficient fuel for British industry in the future. My view is that coal gas is much more likely to be the fuel of the time to come. Great developments have been going on in the last few years. In my constituency heavy motor cars are now being driven by coal gas. Owing to the fact that a new kind of steel has been developed which can contain coal gas under pressure, it is now possible to carry sufficient gas for a range of 70 to 80 miles. It has, I believe, a great future before it.

While the Bill undoubtedly assists all home produced fuels, it guarantees to oil a difference of 4d. between the Excise and the Customs Duty, but gives no such guarantee to gas or other fuels. I hope, therefore, that other methods may be found to stimulate the production of coal gas. It is too early yet to discriminate as to what is to be the fuel of the future. I hope that this Bill will be regarded, not as an end in itself of the fuel legislation of this country, but as a first step towards securing some measure of independence in the matter of fuel supplies for industry.

5.37 p.m.

Major OWEN

I have no intention of covering the ground which I covered in an earlier speech on this subject. I shall confine my remarks to a very small compass. I am in full agreement with what the hon. Member for Colne Valley (Mr. Mallalieu) has said with regard to this expensive method of producing petrol from coal, and I have very serious doubts in my mind as to whether the method will prove commercially profitable. There are one or two things I want to say regarding the statement of my hon. Friend the Member for Aberdare (Mr. G. Hall). He stated that oil was the greatest competitor that coal had had to contend with in recent years. That statement is frequently made by those who are anxious to see a resuscitation of the coal industry. But the statement requires very close examination. I have been looking into the matter, and I find that instead of taking away the livelihood of many of our best people, as the hon. Member for Aberdare said, the truth is that the advent of the petrol age has helped the coal industry during the most distressing years of its history. Ever since the War the use of petrol in this country has increased to a very great extent. In 1920 the consumption of petrol was only 181,000,000 gallons. In 1932 it had risen to 1,075,000,000 gallons. That is a big rise. In that era it is quite true that the production of coal went down very considerably, but my contention is that coal production would have decreased very much more had it not been for the help obtained from the petrol industry.

Take some of the figures that I have been able to get. Since 1918, 425 tankers have been built in the United Kingdom, requiring 1,876,000 tons of steel. In addition, storage and general service tanks have been erected here and have also been sent abroad for the purpose of this industry. At a moderate estimate that has taken up another 1,000,000 tons of steel. Then there are pipe lines and well casings. They required a minimum of 500,000 tons. The refineries, the steel required on the fields and for distribution purposes, rail and road tank cars, tin plates for home and abroad, and kerb-side pumps have required a minimum of 6,000,000 tons of steel. Then take the new industry which has arisen as a result of the petrol era—the motor industry. At a very low computation the motor industry has used at least 4,000,000 tons of steel during that period. If we take all the other items in connection with the petrol industry, the machinery that is required in all directions, we can easily add another 25 per cent. But for the moment I prefer to leave that out of consideration, and the quantities of steel that I have mentioned as having been required for the purposes of this industry amount to a total of 13,375,000 tons of steel.

I know that there is in these days a great deal of discussion as to how many tons of coal are required to produce a ton of steel. It is said that as a result of the better utilisation of coal we can now produce a ton of steel with two-and-a-half tons of coal. But that is only the raw steel. A further one-and-a-half tons is a very moderate estimate of what is required in order to fabricate that steel into articles required for this industry. We can therefore fairly take four tons as being the amount of coal used for every ton of the 13,375,000 tons of steel. That gives a total of coal directly used in connection with this industry in the last 15 years of 53,500,000 tons, and an average of 3,570,000 tons of coal. The consumption of petrol for the same period just exceeded 21,000,000 tons, or an average per annum of 1.4 millions.

It is clear, therefore, that during the last 15 years every ton of petrol used in this country has demanded the consumption of 2½ tons of British coal. Instead of proving a handicap to the coal industry, the petrol industry has been its greatest ally during a period of severe depression. Let me give as an example the sort of thing that really has happened. As we go around the country we see petrol pumps all over the place. I wonder how many Members of this House know the number of those pumps. There are over 100,000. In the production of each one of those there has been used a ton of coal and five hundred-weight of steel, and employment has been given to four other artisans. At no time has the petrol industry decreased employment. Rather has it improved it.

Mr. G. HALL

It is not usual for two Members who sit on the Front Opposition Bench to interrupt one another, though they may disagree privately amongst themselves. I am afraid that my hon. Friend has not taken into consideration the displacement of coal by fuel oil. He has given some figures regarding tankers and pipes and that kind of thing, but if he will look further he will see that there has been a loss of bunkers and of the coal export trade from this country. The loss of these markets to the coal industry really outdid all the figures which the hon. Member has quoted.

Major OWEN

I am very glad my hon. Friend has interrupted me on that point because I wish to give him a few figures in regard to it. No one realises better than I do that there has been a great decrease in coal exports in the last few years. There has also been a decrease in coal for bunkers. I am prepared to admit that in 1914 coal was used by 96.6 per cent. of the world's shipping and oil by only 3.4 per cent., whereas, in 1933, coal was used by 54.6 of the world's shipping and oil by 45.4 per cent. But here is my point. In 1929 the amount of coal shipped as bunkers in foreign-going steamers was 16,394,000 tons and in 1932 that figure had declined to 14,209,000 tons. Those are the figures of the Secretary for Mines.

Mr. HALL

Has the hon. and gallant Member the figures for 1930?

Major OWEN

Yes, in that year coal for bunkers was 21,030,000 tons. As I say, in 1932 that figure had decreased to 14,209,000 tons. But I am making the comparison with the year 1929 for a definite purpose. It was during those years that the great depression in trade and industry took place. What was the record in regard to oil bunkers in that period? In 1929, 1,000,000 tons of oil were shipped as bunkers in foreign-going steamers and, in 1932, only 739,000 tons were shipped. Coal bunkers in that period declined by 13 per cent. while oil bunkers decreased by 26 per cent. so that the actual decrease in the consumption of oil bunkers was twice the decrease in the consumption of coal bunkers.

Mr. CLARRY

Will the hon. and gallant Member give us figures to show what is the oil equivalent to a ton of coal? He is giving us coal tonnage and is then dealing with oil tonnage without explaining how the figures are to be related to each other for purposes of comparison.

Major OWEN

About two tons of coal would be equivalent to one ton of oil, so that the competition in that respect has been really very small. According to the Coal Utilisation Society themselves, oil has only displaced 2,250,000 tons of coal in this country but the drop in the consumption of coal, even in the home consumption of coal, has been 34,000,000 tons. Therefore the effect on the coal industry has not been due to the petrol era but to other causes which the coal industry will have to put right for themselves. We know that during the War coal was produced in places where it had not been produced before. Then there is the development of hydro-electrical power in Italy and Scandinavia which has displaced our coal and, where we used to export 4,000,000 tons of coal to Russia we are now only exporting 1,000,000 tons or practically none.

Here we have a huge plant being erected at Billingham and supported—whatever the Secretary for Mines may say—by what is equivalent to a subsidy from the Treasury. We build this plant when actually the end of the petrol era is in sight. In 1928 at Olympia there were only two motor vehicles which used heavy oil. The rest were driven by petrol. In the last exhibition at Olympia there were 3,000 motor vehicles driven by heavy oil. Gradually, all over the country, the light oil driven engine is being displaced by the heavy oil engine of the Diesel type, but here we are to-day calmly voting for 4½ years a sum of at least £1,000,000—because that is what it will amount to if these people are able to produce what they say they can produce. So far, they have only been working on a small plant which consumes about 10 to 20 tons of coal. There is no certainty that it is going to prove possible to produce a 100,000 tons of petrol when they proceed to work on a large scale. They cannot tell us themselves. The chief experts of Imperial Chemical Industries cannot to-day give any guarantee that they will produce 100,000 tons of petrol by means of the plant which is being established.

Let us consider one other point. I notice that one of the members of the Coal Utilisation Society said the other day that you can get out of coal everything necessary for fuel purposes. But there is one thing which you cannot get out of it and that is lubricating oil. I understand that our Air Force is seeking all over the world for an oil that can produce a satisfactory lubricating oil to be used in our aeroplanes. The Secretary for Mines might convey to the Air Ministry a message to the effect that there is a Colony belonging to the British Empire which is named Trinidad; that that Colony produces oil in a natural state and that that oil has been proved to contain about 25 per cent. of excellent lubricating oil. Yet we are told that we have to go to Russia to get oil for our aeroplanes. We are told that there is no oil in the British Empire. There is, but it has never received any encouragement. We know that one of the leading oil companies of this country is bringing oil from a foreign country, in South America, and putting up a refinery, not to produce petrol but to produce lubricating oil. If the Government really want good lubricating oil they can find it within the confines of the British Empire.

I feel as Sir John Cadman said the other day in an address at Cardiff that there is no use turning black diamonds into white elephants. I fear that is what is going to happen in this case. We are putting up a white elephant at Billingham. Even if we produced in this country the whole of the petrol consumed in this country in one year it would only give employment to about 50,000 miners. What is that compared with the 300,000 who have been out of work for years? I know that my hon. Friend the Member for Aberdare does not care what expense is involved so long as he puts one man into employment but that is not how we ought to regard it. We ought to con- sider what it costs to put a man into employment and, if we can keep—as we do—seven families of four members each on the amount which it would cost to put one of these men into employment at Billingham, then I think we ought to look for a better way of employing our people than this extravagant and fantastic scheme.

5.55 p.m.

Mr. RAIKES

I rise to support this scheme. I think that the Secretary for Mines is making a definite effort by this Bill to assist the development of a young industry—a young industry which is very largely dependent upon the old and somewhat unhappy coal industry—and also to assist in making this country more self-supporting. I have listened to the various arguments advanced on the other side and I am interested to note that there is a great gulf between the Labour party and the Liberal party in regard to this matter. The hon. Member for Aberdare (Mr. Hall) did not oppose the principle of the Bill itself. He opposed it mainly on the ground that it was not setting up some form of monopoly. The Labour party talk of Government experiments in matters of this kind but the trouble is that one never knows beforehand whether a scheme is going to be successful or not. If you work a scheme from the start on the lines of nationalisation, and if it fails, the State, of course, has to bear the whole burden. On the other hand, if you work it on the lines of providing a minimum of the taxpayers' money to assist the scheme at the outset, then, in the event of failure, there is a minimum loss to the taxpayer. If, on the other hand, the scheme is successful and assists employment you do not grudge a certain degree of profit to those who have been prepared to develop the scheme and who have used their wisdom in so doing. [HON. MEMBERS: "Beet sugar."] The case of beet sugar admittedly is one in which we were singularly unsuccessful.

The hon. Member for Colne Valley (Mr. Mallalieu) quoted a certain part of a certain leading article which appeared in the "Times" newspaper on this subject and which, he said, went to the root of the matter. But he did not add that that leading article supported the scheme as a whole and that all there was in it by way of criticism was a warning to the Government to be careful. It asked the Govern- ment to try to steer a course between Scylla and Charybdis—on the one hand not to desert the industry, on the other hand not to involve the taxpayer in too heavy a sum in the future. If that is "going to the root of the matter," then I think the scheme still remains fairly safe as an experiment in spite of what has been said by the hon. Member opposite. He went on to picture the Government sitting by the waterside like Canute of old but I would remind him that Canute followed the old Liberal policy of "wait and see." The Government to-day are experimenting and dealing with new suggestions. That is the difference between the Tory mentality and the Liberal mentality but that, of course, is merely a matter of opinion.

There is one further point on which I should like to touch, and that is in regard to the speech made by the hon. and gallant Member for Carnarvon (Major Owen), who made great play with the fact that petrol had helped the coal trade during difficult years. That may be so, but it cuts both ways. In part, of course, oil has displaced coal, and in part petrol has stimulated the use of coal, but we are seeking to make oil help the coal trade more than it does to-day and to avoid as far as we can the difficulties of the past by using home-produced oil extracted from British coal instead of imported oil for commercial purposes. I suggest that you are not injuring the production of petrol but merely harnessing it to help the coal trade completely instead of only to a partial degree.

No one yet has raised the problem of national defence, but there again I suggest that it is an advantage if you can become as self-supporting in your oil supplies as possible, in view of the possibility at some time of being engaged in war. It might be suggested that it is very easy, if there is a danger of war, to purchase large quantities of cheap oil from outside and store it. So you can, but, on the other hand, supposing you approach a critical state of affairs and feel that you may want to increase your oil supplies for defensive purposes, and suddenly you start buying large quantities of oil in the open market, that will be just the thing to increase the anxiety and perhaps to turn a doubtful crisis into a first-rate crisis, because people will say that Great Britain is obviously preparing for war.

Mr. BOOTHBY

The hon. Member surely realises that we have at the present moment very large supplies of oil in the country, or at any rate, if we have not, we ought to have. I do not think there is any question about that, and it is surely an axiom of our naval policy to see that there are permanently in this country sufficient stocks of oil to maintain the fleet under any conditions for a very considerable period of time.

Mr. RAIKES

I quite appreciate my hon. Friend's point, but at the same time in a certain memorandum that was sent to Members of this House criticising the present scheme, it was laid down as an argument, I think I am correct in saying, that you could buy large quantities of foreign oil and store them up if there was any danger of a shortage in regard to oil for defensive purposes. It is because I have heard that argument raised, both upstairs and in the Memorandum, in favour of purchasing further quantities of foreign oil, that I feel justified in using the alternative argument that you would be far safer if you had a plant so that you could develop still further your supplies of oil.

Beyond that, supposing you drive the whole problem of cheapness to its logical conclusion, which my hon. Friends on the Liberal benches do, although my hon. Friends on the Labour benches do not, and that is why some of us who are Tories have a good deal more in common with many of the arguments that we hear from the official Opposition, because we believe the official Opposition understand to some extent the producer's point of view. The mere argument of cheapness, that whatever happens you must sacrifice everything in order to get the cheapest possible commodity, envisages all the time that the consumer is a consumer and that he is not a producer as well. I think we have all learned in the course of the last few years that the consumer is in fact also a producer, and however cheap your goods may be, if you get those goods too cheap, it is apt to displace the producer at home, who reaches the stage where it is impossible for him to purchase things, however cheap they may be, because he is out of work and has not the wages with which to purchase anything at all. That is why I feel in favour of this Bill. Even if it means indirectly that the producer may be obliged, through taxation, to find something towards fostering this new in- dustry, it is far better to go on those lines than simply to say that to-day we can get cheaper oil abroad, so we will not consider the development of an industry which we hope will give employment in the subsidiary trades and in the coal trade.

In regard to the coal trade itself, we have had many figures given to us, particularly by the hon. and gallant Member for Carnarvon, pointing out how the production of coal has fallen, and fallen since the War, through causes that are unlikely to be able to be checked, and that we are unlikely to be able to get back many of our export markets and our home market to the same degree as formerly. Unfortunately, I would remind my hon. Friends opposite, the general strike taught a good many household consumers to be far more economical in the use of coal than they had been. It may be that although the iron and steel trade is picking up, and that that will do something to increase coal production, we are likely to be definitely down, and if the coal trade is not to collapse still further we must be prepared to experiment with any measures that are likely gradually to make it possible to secure greater employment in the coal industry than there is at the present time. There is nothing more disheartening than the way in which one finds populations gradually losing their work through the collapse of collieries, and not only losing their work, but losing all the capital invested in their own houses, subsidiary trades, shops, and so on, that have been built up around a great mining community. We may not be able to save it all, but I think the Government are right to try to check this continual decline and to find methods by which you can put more men into work in the coal trade, so as to save great communities which are drifting down from drifting still further.

My last word is this: If there is one thing which ought to be considered more than all else, it is that, although the Government are prepared to make it possible for these experiments to be made, that should not be made an excuse, when the trial period is over, for great vested interests to shelter themselves for ever behind the great wall of protection and at the same time pay profits to themselves. That has got to be watched, but bearing in mind that that is watched and that the interests of the consumer and of the nation as a whole are protected, I welcome this Bill and wish it all success.

6.8 p.m.

Mr. TINKER

The Debate has taken a curious form, because we find ourselves enjoying the opposition to the Bill while we do not agree with it. Two speakers have said that they are going to vote against the Government, and yet they criticise both points of view that we put forward. They criticise our support of this method of producing oil in this country, and they criticise us because we want to socialise the industry. Really, they will be in a very difficult position in this matter in following us in the Lobby. We have to justify ourselves on the two points, because we agree with the Government in regard to producing oil from coal, and one can give reasons for that which I think will satisfy an assembly such as this.

Let me give some figures in regard to world power. In 1913 90 per cent. of power production came direct from coal and 10 per cent. from other sources, but at the present time less than 70 per cent. of the world's power comes from coal and over 30 per cent. from other sources. It is true that coal is losing the attraction it formerly had. Take the production of coal. We occupied in 1913 a pre-eminent position in this matter. We produced 287,000,000 tons of coal, but in 1932 our production had fallen to 209,000,000 tons, a reduction of 78,000,000 tons. It may be argued that other coal-producing countries have fallen also, and that is quite true, but not to the same extent as we have, and we find that in that interval oil fuel has been imported amounting now to 1,260,000 tons, which is a far higher proportion than ever came in before. It is supplanting the use of coal. We also find that in the coal industry there has been a decline in employment from 1,200,000 to 800,000, a decline of over 400,000 men. Something must be done to find out the reason for this, and it is certain that political reasons have lost us some of our coal trade. Take, for instance, the Irish Free State. In 1931 they had from us 2,424,699 tons of coal, but that has fallen this year to 1,255,472 tons.

The main reason is the change in producing power, and consequently we on these benches must try to find out how we can meet that situation. I am satis- fied more than ever that we have to turn to the most scientific forms of production, and I believe that it is in the way of producing oil from coal that we shall find a solution of the problem. That is admitted on these benches. We cannot look on and allow imported oil fuel to come into this country and supplant the use of coal without taking some action to try to prevent it, or seeing if we cannot find some means by which we can get from our coal supplies the motive power that is necessary to carry on the means of production. That is why we support the Government in their first attempt at securing the utilisation of our coal resources in the way of producing oil fuel. Where we differ from the Government is in handing the work over to private enterprise. We think that the lessons of the past ought to warn the Government that that is not the way to do it.

Mention has been made—I only make a passing reference to it—of sugar beet, and every speaker attacking the Government uses sugar beet as an illustration of the Government's failure in this direction, but we object, believing, as we do, that oil must be produced from coal and that that is going to be the thing of the future, to the Government handing over the means of producing it or giving the preference to private enterprise to do it. We say to the Government that now is the time, if ever, for the Government to take control of all this kind of thing. We have had a Fuel Research Board. The Government put that in hand and found the money for that purpose, and we say that now is the time for the Government to take over the control of the means of producing the oil that we require. In place of that they think of putting a preference on and giving to private concerns the idea that they must go on producing this oil.

I cannot imagine how, later on, when this plant is put up for the purpose of producing oil, the Government, having given the invitation to these people to set up this plant can turn aside. It may be all very well to say, "We are just giving the idea to them. If they are not able to carry on after the period of the preference and are not able to make it a financial proposition, we will withdraw whatever support we have given." That would be an impossible proposition, and the industry would be justified in saying, "We were led on by the Government. It was a venture and the Government gave us sanction to go on with it. We have made a tremendous outlay in plant which has not matured, as it ought to have done. The preference given has not been enough. Are you willing that these poor shareholders should lose all their money?" I cannot imagine any Government being so hard as to say that they must lose all their money. Although I believe in the socialisation of the means of life, I would have some sympathy with them if I thought the industry was being led on in that way.

I warn the Government that it is not right to invite these people to spend huge sums of money in putting up plant by the offer that for a certain time they will be watched over by the Government, and that in the end they will be cast aside. That is not a fair proposition. If this process is worth tackling at all as I believe it is, the Government ought to take over the whole control. Hon. Members on the other side have asked if it is worth while spending all this money. I believe that it is. Anything that will improve the technique of the coalmining industry is worth spending money on, but I want the Government to have control of it. I do not want it to be left in private hands. Hon. Members have asked us if it is possible for the Government to make it a success. I believe that it is, for it would have the backing of the State and be carried on by men who understand the work. I always claim when advocating Socialism that the same men, the same experts who now have charge of industrial processes, would, under the control of the Government, give the same ability and the same attention as they are giving to private concerns now.

Mr. CAPORN

Under the Hastings resolutions the industries would have to be run by 50 per cent. Socialists and 50 per cent. trade unionists, and no experts at all.

Mr. TINKER

I am not clear to what the hon. Member is referring, but under Socialism there will be 100 per cent. experts. It is often objected that men would have no drive if there were no gain attached to their work, but I believe we are getting beyond that. The State stands for greater things than gain, and the people who work for the State will not betray it. Human nature will respond to the call if given the opportunity. I would point out to hon. Members opposite that in the method proposed in this Measure they have departed entirely from what is recognised as private enterprise pure and simple. I remember a Debate in 1923 on the question of Socialism, when the late Lord Melchett, then Sir Alfred Mond, argued that private enterprise could only survive if it was carried on by its own resources and initiative. The Government are departing from that in this proposal, for they are giving private enterprise protection and a preference, and helping them in what I claim is a national concern.

We agree with the Government that the time has come when the State must take some action in the scientific production of power from coal, seeing that we are failing in the world markets for coal, because development is now in that direction. We are satisfied that development must go along those lines, but we argue that the Government ought not to hand over to private enterprise the means of exploiting it. It should be vested in the Government. We were asked whether we would buy these people out. We would, for we do not believe in confiscation.

HON. MEMBERS

Oh!

Mr. BOOTHBY

What about the hon. and learned Member for East Bristol (Sir S. Cripps)?

Mr. TINKER

I challenge that suggestion, and I hope that hon. Members who follow me will, if they can, quote from any Member of the Labour party to show that that party stands for confiscation. I have followed all their resolutions and they have agreed that there should not be confiscation, and that whatever industry is taken over should be paid for according to an expert valuation. If we took over plant that was in operation, we should pay the price that was laid upon it. The people who will get the preference under this Measure will set up costly plant, and the time will come when the State will have to take it over. We shall then have to pay them all the money they have invested in the industry, and probably by the time the State takes it over the industry will have made immense fortunes in the exploitation of public needs. We ask that the State should undertake this enterprise before it is too late. We put our case in two ways. We agree, in the first place, with the Government in the method of producing oil from coal, for we think that it is essential for us to recover our position. We then, however, depart from the Government, for we consider that this process should be undertaken under the control of the Government so that whatever benefit accrues should go to the State.

6.25 p.m.

Mr. DICKIE

I do not propose to follow the Secretary for Mines in his pursuit of the recurring decimal nor into the formula, the meaning of which, I take it, is now clear to the House. Some calculations have been made across the Floor of the House which I confess, even at the risk of being accused of stupidity, I am unable to follow. As a representative of a mining constituency, and as a Member who on more than one occasion has criticised severely the general policy of the Government on the mining industry, I desire to extend to the Government my cordial congratulations on the introduction of this Measure. The production of oil from coal has been the vision, and the hope and expectation of those engaged in the mining industry for many years. The advantages to be derived from the successful exploitation of any of the processes—I say any of the processes on account of what has been said in the Debate and about which I sall say a word later—are so manifold and far-reaching in their effect upon our economic life, that they can hardly be exaggerated. They have been so admirably stated in both the last Debate and this that I do not propose to weary the House with a repetition of them. I agree with the hon. Member for Aberdare (Mr. G. Hall) that one caution is necessary; we must not expect too much in the way of an improvement in direct employment in the mining industry at once from these proposals, but in the slump of the depression in the industry we are grateful for the smallest mercy. The amount of raw coal required in these processes will doubtless be a very considerable help to the industry.

Reference has been made by more than one speaker to the other effects of these proposals, and I attach enormous import- ance to the advantages that are to be derived in the production of oil by the ancillary trades, such as transport, from the elimination of our almost complete dependence on foreign supplies, and particularly from the effect of the production of this oil on the balance of payments in international trade. Those who are opposed to the proposals of the Government continually refer to them as if the Government were setting up a mopopoly. They talk about the Imperial Chemical Industries as if they alone were concerned, and as if hydrogenation were the only process. The proposals of the Government give the right to anyone to conduct any process—hydrogenation, high temperature carbonisation, or low temperature carbonisation. It is open to any individual or group of individuals, to any company or association of individuals, to combine and to take advantage of the preference which has been given by the Government. I expect to open the paper some morning and find in the City columns a prospectus issued by a new company—shall we say, Batey, Lawson and Cripps—for the extraction of oil from coal by their well-known hot-air process. It is open to anybody to associate and utilise any process they like in order to take advantage of the opportunity given them by the Government.

The hon. Member for Aberdare, in a little cross-talk with the Secretary for Mines, referred to the fact that the Socialist Government had not introduced proposals of this character. It is difficult to understand why they did not, at any rate, attempt something on these lines. I remember that in the Socialist Parliament of 1924, Mr. Frank Hodges, then secretary of the Miners' Federation, made his maiden speech on this subject, and the amount of knowledge which has accumulated since gave a golden opportunity to the Socialist Government of 1929 to embark on some experiment of this character, but nothing was done.

Mr. TINKER

We were dependent on the Liberal party for a majority, and where would the Liberal party have been found on a question of Socialism?

Mr. DICKIE

We are thoroughly accustomed to that kind of answer. There is nothing in that answer to justify the Socialist Government having not even laid proposals on the Table of this House. If they had had any serious desire to help the mining industry in this direction, it would have been the easiest thing in the world for them to produce proposals and submit them to the judgment of this House.

Next, I wish to say a word on the Amendment. Hon. and right hon. Members opposite approve of the object of this Bill, but dislike the method. They demand public ownership and public control. They continually ask for that, and, like the small boy in the advertisement, I suppose they will not be happy until they get it. But they forget one thing which we on these benches are determined not to forget. Some of us have had experience of public ownership and public control in the mining industry. We had State control of the mining industry, practically nationalisation, during the War and in the period after the War, and the result was so disastrous that I, for one, have no desire ever to see it introduced again.

The result here was the same as it has been in every part of the world where the nationalisation of a competitive industry has been tried. There was the same waste, the same mismanagement, the same uneconomic production. It was carried to such an extent in the mining industry here that while the number of men in the industry increased by 97,000, the production of coal declined by no less than 47,000,000 tons a year. That is what happened during the virtual nationalisation of the mines, and the loss became so colossal that even the Coalition Government of that period, which was accustomed to spending £7,000,000 a day, could not stand up against it. The right hon. Member for Carnarvon Boroughs (Mr. Lloyd George), then Prime Minister, was forced to decontrol the mines, because they were losing money for the State at the rate of no less than £5,000,000 per month.

Even now we have a form of State control, but it is control without any State responsibility, and while I admit that some measure of State control is essential in this basic industry, I believe that not only has it already gone too far but that in some ways it has gone in the wrong direction. I feel that what the industry needs to-day is not more State control but less, and a little greater freedom. I would commend to hon. and right hon. Members opposite a very informative article which appeared recently in the columns of one of our greatest London newspapers, by one of the greatest authorities on the mining industry in this country. After a very able analysis of the situation in the industry, the article ended with a condemnation of the artificial restrictions which are imposed on the industry by the Act of 1930, and the writer concluded with this reference to nationalisation: What are the remedies for the declining market? They must be considered under two headings, economic and scientific. There are two economic alternatives, the unshackling of private enterprise by the removal of the artificial restrictions which impede freedom of action and of expansion, or nationalisation of the mines. There is no half way. I regard nationalisation as a leap in the dark, and my own firm belief is that the hope of the coal trade lies in the removal of artificial barriers to control and expansion and in the intensification of technical research. To the need for scientific salvation there is neither argument nor alternative. That is the judgment of one of the greatest authorities in the mining industry, Sir Richard Redmayne. For the edification of hon. and right hon. Members opposite I will add that the newspaper in which the article appeared is one in which very useful and informative articles on labour and industrial conditions are frequently to be found, the "Daily Herald." I submit to the House that we cannot afford this leap in the dark, and also that this authoritative announcement effectually disposes of the argument so far as the whole of the industry is concerned, and I submit that if it applies to the whole of the industry it is applicable to this part of it. There is neither merit nor substance in this Amendment, and I regard it as merely a face-saving device on the part of the Opposition. So far as I am able to see, the method adopted by the Government is not only a vastly superior one to that which is proposed by the Opposition, but is the only method whereby the State can insure that in this sphere of industrial activity it will get the best results from the efficiency, enterprise and capacity of its individual citizens; and for that reason, and for others, I shall have the greatest pleasure in supporting the Measure.

6.38 p.m.

Mr. LEWIS

The two questions most debated this afternoon have been, first, the importance of finding new uses for our coal, and, second, whether this Bill is a good method of attaining that object. I suppose it would be true to say that our rise to industrial greatness was very largely due to the use which we made of our coal resources, and that it would probably be equally true to say that our future industrial greatness very largely depends upon the uses to which we put our coal resources in the years to come. Other countries have developed alternative sources of energy—oil obtained from wells, for example, or electric current obtained from water power; but for us coal still remains by far the most important potential source of energy, with the difference that, owing to the developments of applied science, the old methods of using that coal no longer serve their purpose. For modern industrial purposes it would seem to be necessary to convert the latent energy in that coal into some other form before it is used—either into gas, electric current or oil. The Bill is concerned with one method of conversion, the extraction of light oil from coal. Having listened to the whole of the Debate, I think I am justified in saying that a very large majority of hon. Members, comprising most shades of opinion, are agreed that the object in itself is a highly desirable one.

The Bill seeks to attain that object by means of a protective duty. Though I sit on this side of the House, I am not one of those who are prepared to make extravagant claims as to the benefits of protective duties. I have always held the view that the best that can be said for any protective duty is that it is a necessary evil. The House will observe that this particular duty is qualified in two ways, being limited in amount and limited in time. The Secretary for Mines has given us a series of calculations to show exactly how it will work out but it is sufficient for us now to remember that, whatever happens, 10 years is the extreme limit during which the duty can be applied. Having regard to the object of the Bill and to present day circumstances I hardly expected any objection to the Bill on the ground of Protection only, even from hon. Members who follow the right hon. Member for Darwen (Sir H. Samuel) whose views on these tariff questions are, if I may say so with respect, almost of more interest to an antiquarian than to anyone concerned with present-day problems.

I must confess that I was never prepared for the speech which we had from the hon. Member for Colne Valley (Mr. Mallalieu), because he used a most surprising argument. He told us that if an article is produced in this country and, in consequence, a similar article is not imported, and the duty on that imported article is not received, that it is the same thing as placing a burden of that amount on the taxpayer. [HON. MEMBERS: "Hear, hear!"] I am glad to see that I have interpreted his view correctly. If we place a burden on the taxpayer by producing an article in this country which might have been imported from abroad, and would have paid duty, what a colossal burden the hon. Member and his Free Trade friends would seek to impose on the taxpayers of this country by doing away with import duties altogether. I never expected to hear, at any rate from the lips of a Free Trader, such an argument used in this country.

When we consider the conclusion at which he arrived, which was—if I heard him correctly—that a burden of £1,000,000 would, in certain circumstances, be placed, as a result of this Bill, upon the taxpayer, in order that, roughly, 2,500 extra persons might be employed, it seemed to me that that was equally false. The purpose of the Bill is not, by forgoing a duty for a given period, to place a certain number of people into employment, but to assist in establishing a new industry, with all the implications that follow from that. If the object of the Bill be achieved and a new industry be started, neither the hon. Member for Colne Valley nor any other hon. Member can estimate the benefits that will ultimately accrue from the foregoing of that £1,000,000.

The question of the advantage or disadvantage of a protective duty as such, has been discussed by only one or two hon. Members; the principal objection and attack upon the Bill has taken the form of an Amendment on the Paper in the name of the hon. Member for Limehouse (Mr. Attlee), but which was moved by the hon. Member for Aberdare (Mr. G. Hall). I shall not be doing those who support that Amendment an injustice by saying that the real purport of it is that, in their view, the wrong people would get the benefit of the Bill. Let us consider for a moment who will, in fact, get the benefit of the protection proposed in the Bill. First of all there are the workers who will be employed directly, in the industry itself. They will get an advantage. Secondly, there are the workers who will be employed in ancillary trades, for example, in the construction of the works, and so forth. Thirdly, there are the workers employed in the coal mines. Only after all those have received the benefit of employment through this experiment, will the question of profit arise. When the question of profit does arise, some three-quarters of that profit will go to those whose brains and capital made the enterprise possible and successful, and somewhere about one-quarter will go to the State which, under our present Income Tax law, is a sort of sleeping partner in all the industries of the country. If those considerations be borne in mind, it can hardly be said that the proposal put before us by the Secretary for Mines is in any way an anti-social one, so far as the question raised by the Amendment is concerned, namely, as to who will get the benefit of the protection.

An alternative is proposed in the Amendment. We are told that the proper way to achieve the object set out in the Bill is by means of public ownership and control. However strong a case can be made out for the control, direct or indirect, by some public body, of an industry which has reached a highly developed stage and which is of a monopolistic character, as for example a gas works or a tramway undertaking, similar arguments cannot be brought forward to justify control by the State of an industry which is young, experimental and highly competitive. When the hon. Member for Aberdare expresses the fear that under the Bill the industry would grow up in what he described as a higgledy-piggledy fashion, the answer is that under the scheme proposed in the Amendment the industry would never grow up at all. We need only consider the type of mind and the kind of ability which make for success in the public service to see that that must be so. In the public service, if a man can only avoid making mistakes, seniority will do the rest for him in due time. That is the extreme opposite of the qualities which the successful entrepreneur must possess.

It cannot seriously be challenged that of all industries the nationalisation of which might be contemplated, this is the kind of industry for which nationalisation would be least suitable. Therefore, in my view, the Bill is desirable, first, because of the object which it sets out to achieve, the encouragement of one process for converting the latent energy of coal; secondly, because of the very moderate price which the Government propose to pay for the benefit which they hope to achieve, which is a protective duty severely limited in amount and in time; and, thirdly, because the only alternative that has been placed before us is that of State ownership and control, for which the industry in question is perhaps less fitted than almost any other industry.

6.53 p.m.

Mr. CAPE

I listened to the hon. Member for Colchester (Mr. Lewis), and some parts of his speech were very instructive and helpful, but the dissertation which he gave us upon the morality of the human race was rather disappointing. According to what he believes, there is not the slightest shadow of hope of realising the nationalisation of industry, any more than there was three or four hundred years ago. It seems also that he has come to the conclusion that the human race are simply out for gain in everything they do. I understand from the constitution of this House that we are not likely to get any Socialistic legislation from hon. Members on the Government Benches, but I have a respect for my colleagues in every part of the House, and I know that they do many things for which they know perfectly well that there will be no gain, so far as personal wealth is concerned.

In regard to the Bill, it has already been pointed out by my hon. Friends that we are not really opposed to its general principle as regard the utilisation of coal, but because it puts an entirely new industry, which ought to be a flourishing one, under the control of private enterprise alone. It cannot be denied, and I do not think the Secretary for Mines will deny it, that the Government during the last 10 or 12 years, or probably longer, have spent a large amount of public money upon research work in order to find out as far as possible how coal could be utilised for the extraction of oil and a variety of chemicals. Every worker in the experimental station has been giving the best of which he was capable in the effort to find out something that would be of benefit to the State. We have gone a long way in the direction of finding out what can be done with coal, and have reached the stage where the process can become a commercial undertaking. Now we are simply handing it over for exploitation by private enterprise. Some people have big ideas as to what can be done in regard to the utilisation of coal, and a good many of them believe that there will be more employment as a result. I am a little doubtful about that. A few additional miners may be employed, but I do not think that this scheme will afford any relief to some of the badly hit mining districts, such as that from which I come.

I cannot see that the Bill will do much in the direction of increasing the wages of the miners. Under these protection proposals, I do not see how they can get it. They will be the chaps who will produce the fundamental article for the extraction of oil, but the wages of the miners in this country depend upon the revenue derived from the selling price of the raw coal. In many districts where low temperature carbonisation plant exists, the plant very often belongs to the coalowners, who sell their own coal to themselves, with the result that that is included when calculations are made at the end of a given period in order to find out what revenue there is for wages. An aggregation is taken of all such activities, and wages are paid upon the result. Therefore, if I could see in this Bill some hope that some of the grist would go to those who are responsible for producing the necessary article, much as I believe in the Socialisation of industry and in the State control of mines, I should have to give serious consideration to what such a proposal would mean to my own neighbourhood. Knowing that I live in a capitalistic age and under capitalistic conditions might lead me to have a better opinion of the Bill than I have at the present moment.

I want to impress upon the House the point made by my hon. Friend the Mem- ber for Leigh (Mr. Tinker). This preference is to be given to this company in the shape of a preference of 4d. a gallon for nine years. I put it to the hon. Gentleman the Secretary for Mines that whatever Government may be in power at the end of that period, if this company gets this preference and there are signs of the industry going up, the Government cannot let the company down. We shall therefore eventually find that industry getting a considerable amount of State aid in less than 10 years' time. In those circumstances my hon. Friends will have no hesitation in going into the Lobby against the Bill, and I shall have no objection to voting for the Amendment.

7.1 p.m.

Mr. BOOTHBY

I should like to put one or two specific questions to my hon. Friend the Secretary for Mines, but before I do that I want to say one word about the principle, or lack of principle, underlying this Bill and the Amendment which has been moved to it by the official Socialist Opposition. For a long time past successive Governments have been legislating in regard to industry in a most haphazard manner. They interfere, now here, now there, for a reason that may seem good to them at any particular moment but on no principle and on no specific terms which could be laid down to apply to industry as a whole. I feel that when we are considering a Measure of this kind we should make an urgent appeal to the Government to reconsider the whole question of the relationship between the State and industry in the modern age.

We are in a terrible muddle at the present moment on both sides of the House. We hear a great deal about Socialisation from the official Socialist Opposition. They are always talking about the Socialisation of industry. I have been invited to go down and debate at the Oxford Union with my hon. Friend the Member for Ebbw Vale (Mr. A. Bevan) on that topic, and the motion upon which we are asked to speak is: That the application of modern Socialism would not be a good thing in this country. I wrote saying that if anybody could tell me what modern Socialism was, I might be able to debate that issue. I do not, however, believe that anybody knows. I would remind hon. Members above the Gangway on the Opposition side of the House that they disagree with one another in regard to these questions. The hon. and learned Member for East Bristol (Sir S. Cripps), for example, holds views which differ sharply from those of some of his colleagues. The Prime Minister himself is, I suppose, still a Socialist—whether modern or not, I do not know—but I have been investigating some of his recent observations upon the subject of economics, and I find that perhaps the clearest and most forcible piece of guidance which he has given to the people of this country during the last 10 years was when he told us that as at present organised the capitalist system was breaking down, and was bound to break down, because of its own inherent defects. That is the view of the Prime Minister now, and that is also the view of many hon. Members on the Opposition side of the House. But the Conservative party is in almost as great a confusion as hon. Members opposite. Instead of socialisation, we talk about plans. But what is to be planned, how it is to be planned, and who is to plan it, I do not feel sure at all.

I want to plead with the Government to consider whether it is not possible, before long to give us some guiding principles in this matter of the relationship between the State and industry, and to tell us roughly for what purpose and at what time they think it necessary to intervene in the affairs of an industry. Some hon. Members of my own party have been pleading for the return of complete individualism in the coal industry. For my own part, I do not believe that can ever come again. I do not believe that this House or any Government in this country would ever permit the coalowners to engage once again in a suicidal race of price-cutting—

Notice taken that 40 Members were not present; House counted, and 40 Members being present—

Mr. BOOTHBY

I should like to express my profound gratitude to my right hon. Friend the Member for Epping (Mr. Churchill) for so substantially increasing the size of my audience. In self-defence I would say to any hon. Member who may have just come in that I was addressing the largest audience that has been ad- dressed by any speaker in the course of the afternoon except the Secretary for Mines himself. There have never been more than half a dozen hon. Members here.

I was appealing to the Secretary for Mines to appeal in his turn to the Prime Minister to lay down some guiding principles in this matter of the relationship between the State and industry. The real complaint at the present moment in the country as a whole against the present Government is that they have now no theme of any sort or kind in dealing with these large and vitally important matters concerning industries like coal-mining and agriculture; that, like many of their predecessors, they are actuated in a haphazard sort of way, and act on no particular set of principles. I would appeal to my hon. Friend to invite the Prime Minister, for our guidance, to lay down in general terms his industrial and economic policy and the principles which in the future are going to actuate it.

Take this particular Measure. I do not think that any hon. Member of this House can feel quite satisfied, after what has been said, that it is altogether an advisable thing to subsidise the production, by the process of hydrogenation, of oil from coal. Whatever the Secretary for Mines may say, you cannot get away from the fact that it is a plain, straightforward subsidy, and the path of direct subsidies to individual industries is a perilous path to tread. I do not feel sufficiently confident that the scheme is a bad one to vote against the Bill, but I think that it is a dangerous precedent. The Secretary for Mines, in his opening remarks, admirable and lucid as they were, gave us no principle with which to justify the importance of this step.

I want to ask the Secretary for Mines this direct question. Is he quite satisfied that fuel oil from coal is going to be the main fuel, or even an important fuel, of the future? Is gas or pulverised coal not perhaps going to be more important? If he is not quite sure, has he any right to come down to this House and ask for a substantial subsidy for this process? I will put a further direct question to the Secretary for Mines: Is it a fact that fuel oil costs 8d. a gallon to produce from coal, including interest und depreciation, by this process of hydrogenation? I believe that to be true, and, if it is a fact, I would remind the hon. Gentleman that fuel oil at the ports costs 4d., and is there more accessible for the general consumer of fuel. I do not think, therefore, that a guarantee of 4d. a gallon would be likely to make this a commercial proposition. I have had some carefully-prepared figures submitted to me which go to prove that it will cost 8d. per gallon to produce petrol by these elaborate and expensive methods, and I doubt whether, even with the subsidy, it will prove in the long run to be a commercial proposition.

The cost to the public of producing 100,000 tons of this oil will be £1,000,000 sterling. If we deduct a maximum of £120,000 for unemployment insurance benefit, it will cost the British public, through the Treasury, about £900,000, or £9 per ton, to produce this fuel. I do not think that the figures can be challenged; they have been very carefully worked out. Assuming that you can produce 100,000 tons at Billingham, only £245,000 of the subsidy will be used on the production of coal, which is half a day's employment throughout the whole year for the whole coal industry. You would do more good to the coal industry, and it would be cheaper to buy the coal outright and burn it as fuel. This scheme will cost £350 for every man employed directly. That is the estimate I have been able to work out as a result of the most careful inquiries during the past 10 days. I beg the hon. Gentleman earnestly to address himself to these actual figures of the production of fuel oil from coal by this process. We have to ask ourselves, can we at this moment, when we are refusing to raise the dependent children's allowance by one shilling, when we are refusing to make any concessions in the cuts to the unemployed, the teachers or anybody else, justify to our constituencies an expenditure by way of a subsidy to this particular industry which will cost about £350 in respect of every man employed? If these figures are true, I submit that they are very serious figures indeed. I cannot conscientiously vote against this Bill, because I cannot tell in my own mind whether what the Secretary for Mines said in his opening speech will not turn out to be true: that this is an historic date, that the Bill is the foundation of a new development in the coal industry, and that fuel oil from coal will prove to be the fuel of the country. On the other hand, I very much doubt whether the available evidence is sufficient to justify the Government and the Secretary for Mines in the serious step that they are asking the House to take under the very stringent financial conditions of the present time.

I would ask a final question. If the scheme does not prove to be self-supporting, will it stop? We have an appalling precedent in the beet-sugar industry, which we were told over and over again would prove to be one of the great new industries. I am sure that the Minister of Agriculture, when he introduced the beet-sugar subsidy, said that it was an historic date for the House and for the country. Historic it at once proved to be, but not quite in the sense in which he meant it. We do not want to be landed with another historic beet-sugar subsidy, and we should ask for future reference that, if we vote for this Bill, we shall have the categorical assurance of the appropriate Minister that if the scheme proves not to be a commercial proposition—which, as the evidence shows, is quite likely to happen—it will in fact stop. Under private enterprise and the capitalist system, the only test is, does it pay? If it does not, the State is not justified in any circumstances in continuing to give it a subsidy. From that point of view, I appreciate the argument of the Socialist party, and ask my hon. Friend to give us that assurance.

7.15 p.m.

Mr. E. BROWN

The categorical statement which my hon. Friend has just made might in turn be applied in Aberdeen in terms of oats, and I am wondering whether in that case my hon. Friend would use in his constituency the same argument in the same way. This Debate has been very interesting. It has ranged around four or five main points, the principal one of which, of course, is contained in the Amendment which has been moved by the hon. Member for Aberdare (Mr. G. Hall), who has worked very hard at this problem and taken a great interest in it, whether he was in office or out of office. I am not quite sure, after the speeches of his colleagues, whether he proposes to carry the Amendment to a Division or not, because it seemed to me that at one moment he was hot and at another cold. The issue is this, that while we are told in the Amendment that we ought not to pass this Bill because it fails to ensure through public ownership and control that the researches of science shall benefit the community and not be exploited for private profit, we are not told what that means. This is a slogan, just as the word of which my hon. Friend the Member for East Aberdeen (Mr. Boothby) is so fond, namely, "planning," is a slogan. The problem with all slogans is that they leave out too much. You can talk on platforms in terms of slogans; you can write articles in terms of slogans; but, when you come to deal with complicated and difficult practical problems on the ground, the slogan, while it may serve as a general guide, will not help you to solve the practical difficulties of the problem, and the answer is the same to my hon. Friend the Member for East Aberdeen as it is to the hon. Gentleman opposite.

I would beg my hon. Friend to do me the honour of reading what I said on the 25th July. I do not know whether he was present at the beginning of the Debate to-day, but, if he was, he will remember that I excused myself from repeating to the House what had already been said in a previous Debate. I then dealt fully with the general issues involved and the principles underlying the policy, and, in a sentence or two at the end of what must be a brief speech, I will try to sum them up again. With regard to the wider issue, I will convey to the Prime Minister what my hon. Friend has said. He could not expect me, in connection with a narrow issue of this kind, on a Bill dealing with one subject, to debate the whole question. On the 25th July the hon. Member for Aberdare and myself were both agreed that this ought to be done, and, indeed, the miners are agreed that this ought to be done—for they speak about it with two voices also. Let me prove my words. The Miners' Federation have passed resolutions about this matter. They first of all said: While welcoming the decision to encourage the production of oil from British coal (a proposal which has long been advocated by the Federation), this Executive deplores the effect of the Government's proposal in so far as the 10 years' guarantee is granting a private monopoly and leaves the development of the new industry to separate private concerns with conflicting processes, policies and claims. That was on the 21st July. But since then, on the 22nd September, the National Executive of the Federation, by a substantial majority, adopted the following resolution as its policy, that is to say, its latest policy: The Miners' Federation of Great Britain views with great concern the increasing use of imported oil and petrol to the displacement of British coal, and urges our members, and especially miners' Members of Parliament, to use every effort to increase the use of coal as against the importation of foreign oil and petrol, not only as a means to the greater use of raw coal, but, in addition, to assist the development of processes to produce oil and petrol from British coal. There is no word there of national control; it is a categorical statement of policy, the policy to assist the development of processes to produce oil and petrol from British coal. I ventured to state in July, and I have repeated to-day, my belief that, if the policy outlined in the Amendment had been continued by the Labour party, there would have been no Minister standing at this Box to announce successful operations, at least with regard to hydrogenation. The House will have noticed that the hon. Member for Aberdare, with great charm and skill and in his usual cool and able way, gave us a very fine survey of the situation, but, as regards his policy, he contented himself with saying that it had been outlined. I have searched the whole of the published records available to me for any detailed outline, and have only found one, with which I will venture to trouble the House. This is an extract from a speech delivered by Mr. Tom Johnston, the Lord Privy Seal in the late Labour Government, at Bannockburn. It may be found in the "Iron and Coal Trades Review" for 30th October, 1931. In that speech he said this: The Labour Government had been negotiating with Imperial Chemical Industries, Limited, on the subject. The Government proposed that a public utility corporation should be formed, with the Government holding the majority of the shares and appointing the majority of the directors, and Imperial Chemical Industries bringing in their technical knowledge and skill. When the Labour Government left office, negotiations were still going on. That is not quite the same thing as the Amendment which has been moved to-day. The proposal then was that a public utility corporation should be formed, in which the Government would not be able to take the risk of a preference. Despite the observations of my hon. Friend the Member for East Aberdeen, I hold the view that this is not a subsidy in the strict sense of the word. It does not seem to have occurred to any hon. Member who has stressed the point of the preference—not even to the hon. Member for Colne Valley (Mr. Mallalieu)—that we have been giving a preference to all home-produced motor spirit from the moment that we imposed the first Petrol Duty of 4d. a gallon. Whether the duty has been 4d. or whether it has been 8d., every gallon of spirit produced from shale, every gallon of benzol, every gallon of spirit produced from peat or by low temperature carbonisation—40,000,000 gallons per annum on the average over the whole period—has had a preference, and no Member of this House in any party, as far as my examination of the records goes, has ever raised a word of protest against that. If I were to make up my financial balance sheet on the same principles as are adopted in oil propaganda and in some of the calculations which have been given to us by those who have outdone even the oil propagandists, I could easily make up a balance sheet to prove that, in the first year or two of the preference, the Chancellor of the Exchequer might, by adopting certain Excise duties, make a profit on this operation. I would not do that—

Mr. D. G. SOMERVILLE

In view of the hon. Gentleman's statement that a preference has been granted on oil produced in this country, may I ask how it is that no profit has ever been made on such production, and that the low temperature carbonisation undertakings have never paid a dividend?

Mr. BROWN

My hon. Friend is quite wrong. He will find, if he looks further into the matter, that the gas and coke oven companies have produced 30,000,000 gallons of benzol per annum, and, when he appreciates that fact, I think he will not be inclined so hastily to make a statement in those terms. The fact is that all our home-produced spirit from the beginning has had an effective preference, and not even the most—I was going to say—hysterical Free Trader, either in this House or outside, has raised any word of objection to it.

Mr. MALLALIEU

Did not the hon. Gentleman himself object at the time?

Mr. BROWN

I think my hon. Friend's memory is lacking. I did not make any protest against the preference. I may have made a protest against the taxation of raw materials in the early stages, but that is another issue altogether. I think my memory will be found to be more accurate than that of my hon. Friend. The issue between ourselves and the Labour party is this: They think that there should be some undefined method of public ownership and public control of what, after all, are mainly the results of the researches of private enterprise. The hon. Member talks about handing over the results of research to private enterprise. I do not wish to under-estimate the work of the Fuel Research Board at Greenwich, but the great bulk of the chemical research which is involved in the successful solution of these problems is not Government work, but the work of successful private enterprise. We are not handing over anything at all, and I fail to understand how that argument can be put forward in the constituencies in face of the fact that for 20 years or more members of the Labour party in this country have held out hopes to the miners of the country that one of the great methods of reversing the tendency of recent years towards a decline in coal production would be the successful production of oil from coal.

It is only natural, in view of the new process of hydrogenation, that the Debate should have turned mainly on the operations of Imperial Chemical Industries at Billingham, but this Bill does not propose a monopoly to anyone. If there is a monopoly, it is only a monoply due to the operation of the patents which are in the hands of people who have acquired them either by their technical skill or by the normal commercial process. Anyone in this country who produces motor spirit from coal, from shale, from peat, or from any derivative of those indigenous products, is entitled to the benefit of this preference from 1st April, 1935.

It is not for me to answer the question of the hon. Member for East Aberdeen as to the future of oil, gas, the low temperature carbonisation of coal, or the high temperature carbonisation of coal. I remember too well the prophecies that were made by experts, on the coming of electricity, as to the effects of electricity upon gas, to fall into so simple and easy a trap as making a prophecy of that kind. But I would say to my hon. Friend, to the House, and to the country that this problem has been technically solved to the satisfaction of the Government's technical advisers, and this great firm is ready to go forward, having taken the process from the laboratory stage to the commercial stage. I remember that cost figures like 26d. per gallon were frequently quoted in the early stages of the process. The hon. Member for East Aberdeen now quotes the figure of 8d., and he asks me what figure I would suggest. I would say 7d. The House will understand that there is all the difference as regards cost of production between the laboratory stage and the stage of the 15-ton a day plant which has been working at Billingham, and again between that and a large-scale plant. It has been found, during the work that has been done on this problem, that the small plant shows considerable reductions in costs as compared with the laboratory stage. Is it not reasonable to conclude that when they get, as they hope to do by the 1st April of next year, this 500-ton a day plant working, they will discover savings in cost of production which may bring the cost per gallon below the figure of 7d. to a figure which I will not venture now to mention?

This is a great step forward. It is a step which cannot be judged in nicely calculated terms, although we have tried to deal with it by means of the rate and date ratio according to which we are working. It is one thing to draw up a general policy, but it is quite another thing to apply it to one particular item in the balance sheet. I suggest, to those who have been throwing about the figure of £1,000,000, that they might go back to the statement made by the Treasury on behalf of the Government. Whether the figure be £100,000 or £1,000,000, I have never used the word "cost" in connection with this matter. It is not a question of cost. A subsidy means a direct subvention from the taxpayer, but this is not a subsidy; it is a preference. The preference will be absolutely in the control of the Government under this Bill, if the House passes it through all its stages.

The industry now, whether it be the low temperature carbonisation side, the benzol, shale, or any other side, or the hydrogenation process, has the assurance from 1st April, 1935, of a preference of 8d. for four and a-half years or 4d. for the nine years. When hon. Members make their next balance-sheet, they should pursue their researches and see what they can find to put on the credit side. I will give them the Treasury analysis of the factors that ought to be considered in trying to measure the finance of the matter. It is not possible to make a reliable estimate of any loss of revenue under the proposed guarantee, as this will depend on a number of uncertain factors, including the extent to which home-produced motor spirit displaces imported spirit, the quantity of spirit produced, the amount of preference and the length of the period over which the guarantee extends. As regards the cost to the Exchequer, further considerations, such as the relief of the burden of unemployment, have to be taken into account. Coal to the extent of 350,000 tons annually will be required, which will give additional employment to miners from 1st April next. This is not in the air. It is not in a Socialist resolution. It is not in the Amendment. It is now being prepared at Billingham, and if the hon. Member likes to go there next week, he will see the steel going up. The hon. Member for Aberdare (Mr. G. Hall) will not deny it.

Mr. HICKS

The hon. Gentleman means April, 1935, and not next April.

Mr. BROWN

It is estimated that the plant will be working by the spring of 1935. There is already direct and indirect employment for 10,400 men, and it is expected that the peak will be reached in a couple of months' time, which will bring it up to 12,000. That means a saving of unemployment pay of £200,000, with £900,000 in respect of temporary employment during the construction period. I am not putting this forward as my own opinion. I am only suggesting to those who are trying to draw up this one-sided balance-sheet that there is another side to it. The hon. Member for Colne Valley (Mr. Mallalieu) wishes the spirit of "Cromwell" were still sitting here as Secretary for Mines. He suggests that I am Canute. If Cromwell were still sitting here, as he was 18 months ago, he might by this time be standing here as Canute. The hon. Member was a little disingenuous. He entertained the House with a quotation from the "Times," but he might have started it three lines earlier. In fairness to the "Times" and the House I will begin the quotation where it ought to have begun. It was a warning: No Government that found that so promising an experiment could be launched at so small a cost would have been justified in preventing it. That is our case. I confidently ask the House to give a Second Reading to the Bill.

7.35 p.m.

Mr. CHARLES BROWN

We have had a very interesting Debate and many ingenuous speeches have been made. I can easily understand the hon. Gentleman's objection to our Amendment—I know he does not like Socialism—and I can easily understand the energy with which he has defended the proposals embodied in the Bill. The time for his attack on Socialist proposals, equally with the speech of the hon. Member for Consett (Mr. Dickie), in his passionate advocacy of private enterprise, is ill chosen. Does the hon. Member forget that we have 2,500,000 unemployed? Is he aware of the poverty of great masses of people, and can he in face of those facts seriously and conscientiously eulogise private enterprise? That applies in the same way to the defence of private enterprise by the Secretary for Mines in his reference to our Amendment. The hon. and gallant Gentleman the Member for Carnarvonshire (Major Owen) made one of the most ingenious speeches of all with his very elaborate argument that petrol was the friend of coal and had in no way done it any harm. He could make a case along those lines by suggesting that petrol is complementary to coal probably in the early stages of the process. When the steamship first came it was complementary to the sailing ship, but finally, for all practical purposes, it swept it from the seas. Petrol may in these early stages be complementary to coal, but it does not follow that in the long run it may more effectively displace it than the steamship has displaced the sailing ship. The argument was a very ingenuous one. I do not know if it convinced the hon. Member for Morpeth (Mr. G. Nicholson), but it was not all convincing to me.

I have risen to make a point which has only been referred to in one speech, that of the hon. Member for South East Essex (Mr. Raikes). I cannot understand the Bill unless I look at it against the background of possible war. I think the chances of it being of any great benefit to the mining community are very remote indeed. I do not think it is going to find work for very many miners for a long time to come. I do not think that is the dominating motive. I can easily understand the Secretary for Mines pressing that point, but even he has not held out any hope of any large number of miners being found work. The hon. Member for South East Essex stressed the vital necessity in certain circumstances of home supplies of oil. I have heard no argument which convinces me that that is not one of the primary purposes of the Bill, and, if that is the real reason, our Amendment ought to be accepted, and the supply ought to be under public and not private control. There is a strange relationship in my mind between this Bill and the Dyestuffs Bill, which continues the principle of only allowing dyestuffs to come into the country under licence. The purpose of that legislation was to build up a dyestuffs industry for defensive and not for commercial and industrial reasons. In criticising that Bill some weeks ago, I said the Government had no right to continue to protect the dyestuffs industry, which was now part of an international combine if the reason for setting up the industry was primarily defensive. I am going to say the same about this Bill. I cannot understand the fondness of the Government for Imperial Chemical Industries, which is an international combine.

Mr. E. BROWN

Why did the Labour Government approach Imperial Chemical Industries?

Mr. C. BROWN

I was not a member of the Labour Government, and I am entitled to criticise even their attitude, and I shall do so. International combines know nothing about patriotism. The one thing they are concerned about is profit. The background of this Bill is possible war, and it is completely wrong for the Government to introduce a Bill giving protection to an international combine which in this instance is going to get oil from coal which is likely to be used in certain eventualities; that is, if we are at war. Why should you put the control of this thing in the hands of an international combine? I shall have no hesitation whatever in voting for the Amendment, because, if you do anything along these lines at all, you ought to do it under social control and not place the matter in the hands of an international combine.

Sir JOHN PYBUS

As my hon. Friend the Member for South-East Essex (Mr. Raikes) is out of the House for a moment, I should like to say that I heard the whole of his speech, and a very small portion of it, quite an aside, was as to the importance of producing oil within the country in time of war. I hope the hon. Member will not allow the House and the country to think that the main motive of his speech was primarily concerned with that aspect. It was that he wished an important scientific experiment to be carried on and thoroughly tested out.

Mr. C. BROWN

I thought I made it quite clear by saying that the only Member who had referred to the matter that I wanted to stress was the hon. Member for South-East Essex. I said no more about his speech than that nor did I intend to convey anything else.

7.44 p.m.

Mr. BATEY

I was interested in the two speeches of the Secretary for Mines. He put a lot more fire into the second speech than into the first. He evidently thought this was really a very important Bill. He called it historic, and said it was a step forward. Every mother considers that her child is the best. The Secretary for Mines was introducing the Bill of the century. We have an historic Bill. I am rather sorry for the Secretary for Mines that the first Measure he has introduced should be this Bill, because in my opinion it is not worth a tinker's curse. The Minister in his second speech stated that in July the Miners' Federation passed a resolution in favour of the public control of the process of the extraction of oil from coal, but that you could not read such a qualification into the September resolution. That resolution simply stated that they wanted more coal to be used and oil to be extracted from coal. It did not in the least take away the position stated in July, and they still stood for the public ownership of the extraction of oil from coal. Every mining Member in this House and the members of the Miners' Federation Executive, and I might say almost every member of the Miners' Federation, stand for the nationalisation of the process. It seems as though the Minister cannot stand at that Box unless he throws at us the argument, "If it had depended upon you we should not have been in the position of coming to an arrangement for the extraction of oil from coal." There is no question that if Labour had occupied the benches opposite, a Labour Secretary for Mines would not have been allowed to have introduced such a Bill as the one before the House, and we should not have come to an arrangement with a private undertaking like Imperial Chemical Industries. We should have gone in for the starting of the new industry under State enterprise. If we could not have done so we should have let the matter alone.

I would remind the Minister that the National Government always seem to forget that they are faced with a gigantic problem in the mining industy, not merely an economic but a human problem. At least 4,000,000 men, women and children in the mining industry need something to be done for them. They want more employment, better wages, clothes, food, and houses, and the Government say to the people in the distressed areas where men and women are starving, "Do not worry, we will give you a 4d. tax." The Government offer a 4d. tax in order to feed the miners and their families. They do not even come up to the level of Woolworths by offering 6d. I admit that we are indebted to the scientists, who have done their work extremely well. They have taken a piece of coal and have shown that it is possible to extract far more than heat—valuable by-products. But what have the Government done? The Government now come forward with something which they say is a solution of the problem of unemployment in the mining industry. They say: "This is our contribution." What can it do to solve unemployment in the mining industry if all that their proposal means is a 4d. tax? That is the extent to which the Government are prepared to go in their proposal to try and help the mining industry. The Bill means very little. The Government cannot bind any future Government. They may talk about a 4d. tax for nine years or for five years, but another Government coming into office need not be bound by what the present Government are doing. The National Government have not been bound by decisions of the previous Government, and another Government need not be bound by the decisions of the present Government.

The Government say, "We will guarantee to Imperial Chemical Industries a 4d. tax for 10 years or for five years." But it is well known—a blind man can almost see it—that is will be impossible for any Chancellor of the Exchequer to reduce the present tax below 8d. The present Chancellor of the Exchequer and any future Chancellor of the Exchequer will need the revenue which comes from the taxation of oil, and he will stick to the tax in order to retain his revenue, We who have been in the House for some years know that a Chancellor of the Exchequer strongly opposed to the drink trade could not do without the revenue which comes from the drink trade. He would have to be prepared to continue the tax upon strong drink in order to obtain his revenue, and the same may be said of the present Chancellor of the Exchequer or of any other Chancellor of the Exchequer. The 8d. tax is on now, and it will be on next year and in 10 years' time whether Imperial Chemical Industries start this new process or not. I admit that there are big possibilities in the hydrogenation process, and will go further and say that one of the remedies for the solution of the troubles in the coal industry lies in the extraction of oil from coal. At the same time, I have no hesitation in saying that the Government are starting on entirely wrong lines because the new industry is being put into private hands and is being started independently of the coal mines.

Labour Members for many years have been urging upon one Government after another that this process ought to have been developed, but we have always had in our minds its development in connection with our present coal pits. We desired it to be started at our coal pits, and not a long way from them. We believed that if we could get the new process started in connection with the collieries the revenue from the oil would help to make up the miners' wages fund and so guarantee to the miners better wages, just as in the North of England the revenue which came from coke used to go into the wages fund and provide better wages for the miners. We desired that the new process should be developed at the collieries so that the revenue from oil could be of some benefit to the miners.

The new process is to be started at Billingham. The Minister says that be believes that the cost will be 7d. per gallon, but it is well known that they are to start on the understanding that they will be able to get coal at not more than 13s. 8d. per ton; they believe that they can make a commercial success of the undertaking provided that they are able to get coal at that price. According to a statement of the Ministry of Mines the average selling price of coal in this country in September was 13s. 9d. per ton, and it means that Imperial Chemical Industries expect to get coal cheaper than the

average price in order to carry on this new undertaking. Miners' wages are low enough at the present time, and if the new industry is to be started on such lines it will mean reduced wages for the miners.

I am strongly in favour of the Amendment, which means Socialism. When the Prime Minister was at Seaham recently he met a deputation and was reported to have said, "Why do not you people preach Socialism which is the only way." I am going to accept his advice and intend to preach Socialism whenever I have a chance. This is a Socialist resolution. Private enterprise has completely failed to do the very things that we require, namely, to give employment and decent wages in order that people may live. Seeing that private enterprise has failed in the past, we do not want this new industry to start in private hands. Therefore, we submit our Amendment.

Question put, "That the words proposed to be left out stand part of the Question."

The House divided: Ayes, 217; Noes, 43.

Division No. 92.]	AYES.	[8.0 p.m.
Adams, Samuel Vyvyan T. (Leeds, W.)	Cranborne, Viscount	Guy, J. C. Morrison
Albery, Irving James	Craven-Ellis, William	Hamilton, Sir George (Ilford)
Anstruther-Gray, W. J.	Croom-Johnson, R. P.	Hanley, Dennis A.
Apsley, Lord	Crossley, A. C.	Harbord, Arthur
Aske, Sir Robert William	Culverwell, Cyril Tom	Hartland, George A.
Astbury, Lieut.-Com. Frederick Wolfe	Curry, A. C.	Haslam, Sir John (Bolton)
Astor, Viscountess (Plymouth, Sutton)	Davies, Maj. Geo. F.(Somerset,Yeovil)	Headlam, Lieut.-Col. Cuthbert M.
Baillie, Sir Adrian W. M.	Denman, Hon. R. D.	Heilgers, Captain F. F. A.
Baldwin, Rt. Hon. Stanley	Dickie, John P.	Henderson, Sir Vivian L. (Chelmsford)
Balniel, Lord	Dixey, Arthur C. N.	Hills, Major Rt. Hon. John Waller
Barclay-Harvey, C. M.	Dugdale, Captain Thomas Lionel	Hope, Capt. Hon. A. O. J. (Aston)
Benn. Sir Arthur Shirley	Duncan, James A. L. (Kensington, N.)	Hornby, Frank
Blindell, James	Eastwood, John Francis	Horsbrugh, Florence
Boulton, W. W.	Edge, Sir William	Howitt, Dr. Alfred B.
Bower, Lieut.-Com. Robert Tatton	Edmondson, Major A. J.	Hume, Sir George Hopwood
Bowyer, Capt. Sir George E. W.	Elmley, Viscount	Hunter, Dr. Joseph (Dumfries)
Brass, Captain Sir William	Emmott, Charles E. G. C.	James, Wing-Com. A. W. H.
Broadbent, Colonel John	Entwistle, Cyril Fullard	Jamieson, Douglas
Brocklebank, C. E. R.	Erskine, Lord (Weston-super-Mare)	Jennings, Roland
Brown, Col. D. C. (N'th'd., Hexham)	Erskine-Boist, Capt. C. C. (Blackpool)	Johnston, J. W. (Clackmannan)
Brown, Ernest (Leith)	Essenhigh, Reginald Clare	Jones, Sir G. W. H. (Stoke New'gton)
Browne, Captain A. C.	Evans, R. T. (Carmarthen)	Ker, J. Campbell
Buchan-Hepburn, P. G. T.	Everard, W. Lindsay	Kerr, Lieut.-Col. Charles (Montrose)
Burghley, Lord	Fielden, Edward Brocklehurst	Kerr, Hamilton W.
Burnett, John George	Fleming, Edward Lascelies	Lamb, Sir Joseph Quinton
Cadogan, Hon. Edward	Ford, Sir Patrick J.	Latham, Sir Herbert Paul
Campbell, Vice-Admiral G. (Burnley)	Fraser, Captain Ian	Law, Richard K. (Hull, S.W.)
Caporn, Arthur Cecil	Fremantle, Sir Francis	Lees-Jones, John
Carver, Major William H.	Fuller, Captain A. G.	Levy, Thomas
Castlereagh, Viscount	Gault, Lieut.-Col, A. Hamilton	Lewis, Oswald
Cazalet, Thelma (Islington, E.)	Gillett, Sir George Masterman	Lindsay, Noel Ker
Chapman, Col. R.(Houghton-le-Spring)	Gluckstein, Louis Halie	Loder, Captain J. de Vere
Chapman, Sir Samuel (Edinburgh, S.)	Glyn, Major Sir Ralph G. C.	Lovat-Fraser, James Alexander
Clarke, Frank	Gower, Sir Robert	Lyons, Abraham Montagu
Clarry, Reginald George	Graham, Sir F. Fergus (C'mb'fl'd, N.)	MacAndrew, Lieut.-Col. C. G. (Partick)
Clayton, Sir Christopher	Grattan-Doyle, Sir Nicholas	MacDonald, Rt. Hon. J. R. (Seaham)
Cochrane, Commander Hon. A. D.	Greene, William P. C.	McEwen, Captain J. H. F.
Colville, Lieut.-Colonel J.	Gretton, Colonel Rt. Hon. John	McKie, John Hamilton
Conant, R. J. E.	Griffith, F. Kingsley (Middiesbro', W.)	McLean, Major Sir Alan
Courthope, Colonel Sir George L.	Grigg, Sir Edward	McLean, Dr. W. H. (Tradeston)
Macquisten, Frederick Alexander	Pybus, Sir Percy John	Spens, William Patrick
Magnay, Thomas	Raikes, Henry V. A. M.	Stevenson, James
Makins, Brigadier-General Ernest	Ramsay, Capt. A. H. M. (Midlothian)	Stewart, J. H. (File, E.)
Manningham-Buller, Lt.-Col. Sir M.	Ramsay, T. B. W. (Western Isles)	Stones. James
Margesson, Capt. Rt. Hon. H. D. R.	Reed, Arthur C. (Exeter)	Stourton, Hon. John J.
Martin, Thomas B.	Remer, John R.	Strauss, Edward A.
Mayhew, Lieut.-Colonel John	Renwick, Major Gustav A.	Strickland, Captain W. F.
Mills, Sir Frederick (Leyton, E.)	Rhys, Hon. Charles Arthur U.	Stuart, Lord C. Crichton-
Mills, Major J. D. (New Forest)	Roberts, Sir Samuel (Ecclesall)	Sueter, Rear-Admiral Sir Murray F.
Milne, Charles	Ropner, Colonel L.	Sutcliffe, Harold
Molson, A. Hugh Elsdale	Rosbotham, Sir Thomas	Tate, Mavis Constance
Moreing, Adrian C.	Ross Taylor, Walter (Woodbridge)	Thomson, Sir Frederick Charles
Morris, Owen Temple (Cardiff, E.)	Runge, Norah Cecil	Thorp, Linton Theodore
Moss, Captain H. J.	Russell, Alexander West (Tynemouth)	Titchfield, Major the Marquess of
Nall, Sir Joseph	Russell, R. J. (Eddisbury)	Todd, Capt. A. J. K. (B'wick-on-T.)
Nation, Brigadier-General J. J. H.	Rutherford, John (Edmonton)	Tree, Ronald
Nicholson, Godfrey (Morpeth)	Rutherford, Sir John Hugo (Liverp'l)	Tryon, Rt. Hon. George Clement
Normand, Rt. Hon. Wilfrid	Sandeman, Sir A. N. Stewart	Wallace, Captain D. E. (Hornsey)
North, Edward T.	Savery, Samuel Servington	Wallace, John (Dunfermline)
Nunn, William	Shakespeare, Geoffrey H.	Ward, Lt.-Col. Sir A. L. (Hull)
Ormsby-Gore, Rt. Hon. William G. A.	Shaw, Helen B. (Lanark, Bothwell)	Ward, Irene Mary Bewick (Wallsend)
Palmer, Francis Noel	Shaw, Captain William T. (Forfar)	Wells, Sydney Richard
Peake Captain Osbert	Simmonds, Oliver Edwin	Williams, Charles (Devon, Torquay)
Pearson, William G.	Skelton, Archibald Noel	Williams, Herbert G. (Croydon, S.)
Peat, Charles U.	Smiles, Lieut.-Col. Sir Walter D.	Wills, Wilfrid D.
Penny, Sir George	Smith, Bracewell (Dulwich)	Wilson, Lt.-Cot. Sir Arnold (Hertf'd)
Percy, Lord Eustace	Smith, R. W. (Ab'rd'n & Kinc'dine, C.)	Wilson, Clyde T. (West Toxteth)
Perkins, Walter R. D.	Somervell, Sir Donald	Windsor-Clive, Lieut.-Colonel George
Peters, Dr. Sidney John	Somerville, Annesley A. (Windsor)	Withers, Sir John James
Petherick, M.	Somerville, D. G. (Willesden, East)	Young, Rt. Hon. Sir Hilton (S'v'noaks)
Peto, Geoffrey K. (W'verh'pt'n, Bilst'n)	Soper, Richard
Powell, Lieut.-Col. Evelyn G. H.	Southby, Commander Archibald R. J.	TELLERS FOR THE AYES.—
Procter, Major Henry Adam	Spencer, Captain Richard A.	Sir Victor Warrender and Captain Austin Hudson.
NOES.
Attlee, Clement Richard	Greenwood, Rt. Hon. Arthur	Maxton, James.
Batey, Joseph	Grenfell, David Rees (Glamorgan)	Owen, Major Goronwy
Bevan, Aneurin (Ebbw Vale)	Grunoy, Thomas W.	Paling, Wilfred
Brown, C. W. E. (Notts., Mansfield)	Hall, George H. (Merthyr Tydvil)	Parkinson, John Allen
Buchanan, George	Hicks, Ernest George	Price, Gabriel
Cape, Thomas	Jones, J. J. (West Ham, Silvertown)	Rea, Walter Russell
Cocks, Frederick Seymour	Jones, Morgan (Caerphilly)	Salter, Dr. Alfred
Cove, William G.	Kirkwood, David	Samuel, Rt. Hon. Sir H. (Darwen)
Cripps, Sir Stafford	Lawson, John James	Sinclair, Maj. Rt. Hn. Sir A. (C'thness)
Daggar, George	Lunn, William	Smith, Tom (Normanton)
Davies, Rhys John (Westhoughton)	Macdonald, Gordon (Ince)	Tinker, John Joseph
Edwards, Charles	McEntee, Valentine L.	White, Henry Graham
Foot, Dingle (Dundee)	Mainwaring, William Henry	Williams, Dr. John H. (Llanelly)
George, Megan A. Lloyd (Anglesea)	Mallalieu, Edward Lanceiot
Graham, D. M. (Lanark, Hamilton)	Mander, Geoffrey le M.	TELLERS FOR THE NOES.—
		Mr. John and Mr. Groves.

Bill read a Second time, and committed to a Standing Committee.