HC Deb 02 July 1934 vol 291 cc1569-623

3.30 p.m.


I beg to move, in page 1, line 6, to leave out from the beginning to the end of line 10, and to insert: His Majesty shall henceforth have the exclusive right of searching and boring for, and getting, and appropriating petroleum existing in its natural state in strata in Great Britain, and no person other than a person holding a licence under this Act for the purpose shall search or bore for such petroleum, and any such petroleum gotten or appropriated otherwise than by a person holding and in accordance with the provisions of such a licence shall be forfeited to His Majesty. In my view the opening words of the Clause are based on an untrue view of the law. They are based on the theory that private property exists in petroleum and gas under the earth in its natural state, and that, therefore, there is some property which can be vested in His Majesty, and that the effect of vesting that private property in His Majesty is to divest the individual private owner of property in that same petroleum and natural gas. That theory is based on the well-known theory of law that the owner of the surface is entitled to be regarded as the owner of everything that exists under the surface down to the centre of the earth, but I would remind the Committee that it has long been established in our English law, in respect of mineral substances, that there are exceptions to that theory. First of all, as regards solid minerals, the Crown has long claimed the right of its prerogative to property in gold and silver; no owner of the surface has any right at all in any gold or silver which happens to exist underneath the particular piece of surface of which he is owner.

There are also other well-established exceptions in the case of non-solid minerals, minerals in a fluid condition, of which the best known are water percolating through minerals, water percolating underneath the soil in unknown channels, and brine in the big brine baths of the country. English law has recognised, since the middle of the last century as regards water, and since 1906 as regards brine, that there is no private property in these non-solid minerals unless and until the owner of the surface does some act by which he is able to appropriate these minerals and make them his own. Private property arises in these minerals for the first time when he manages to load these minerals into a bucket or can, and takes possession of them in that captured state. I admit, of course, that the question has only arisen for decision in this country as regards petroleum, but I suggest to the Committee that so far as English law at present is concerned there is an equal chance, indeed it is much more likely, that the courts of this country will hold that there is no private property whatever in petroleum and petroleum gas in its natural state under the surface.

I am confirmed in that view by making a study of the way in which the law has developed in the United States of America, where, of course, since the end of last century they have had to deal practically with the existence of petroleum under the surface. It is a fact that in a number of States, particularly those States in which the influence of English law has been greater than in others, the American doctrine is that the same law applies to petroleum and petroleum gas in its natural state as applies to water percolating under the soil, namely, that there is no private property, and that no private property exists in it unless and until some person has in fact done something to reduce it into possession and to appropriate it for himself, and that then and then only for the first time arise any private rights of property which can be confiscated without compensation or can otherwise be dealt with.

Therefore, I suggest to the Committee that it is clear beyond a shadow of doubt that there are two alternative theories of law, one of which could be adopted by the Legislature for the first time in this country in respect of petroleum: We can either give legislative sanction to the theory that there is exactly the same property under the surface in petroleum and petroleum gas in its natural state as there is in coal and stone and other minerals of that description; or we can adopt and give legislative sanction for the theory, which I submit is the more likely theory to be adopted by the courts, that there is no private property at all in petroleum and petroleum gas in their natural state unless and until someone is able to capture them and appropriate them for himself. That is much the more commonsense view of the law when you are dealing with a property which may in fact be here to-day and gone tomorrow, if a fissure appears in the limestone, or indeed if your neighbour sets to work and bores a hole next door.

It seems to be a fact well established that one single bore-hole can draw off all the petroleum which is percolating or lying or oozing under a very large area of country, and if the true theory of law be that every owner of soil has a right of property in the petroleum which lies under the surface, then if this Bill were not passed the position would be that a person who sank a bore-hole and drew off all the petroleum over a large area of property would be taking his neighbour's property and making it his own, and if that be the true view should have to pay substantial compensation and damages to his neighbour for doing so. We have long recognised that difficulty as regards running water and brine, and we have held the view that each person has got the right, if he thinks fit, to sink a well on his own property and to appropriate all the water or the brine that he can get out of that well, and his neighbour then has a right on his boundary to sink his well and see if he cannot dry up the other man's well. So it goes on and is going on to-day in the City of London. Wells are being sunk on private property in the City of London with a view to avoiding the high rates for water in the City.

If there be this choice of the theory of law on which this Bill should be based, I suggest to the Committee that there is every reason for adopting the view that there is no private property in petroleum and natural gas under the soil unless and until it is made one's own or appropriated by the owner of the surface, and that the private right which this Bill is interfering with is not the right of property at all in the petroleum, but the right of developing your land by digging wells and sinking bore-holes for the purpose, if you can, of capturing all the petroleum which happens to be either under or passing under your land and the land of your neighbours.

If the Committee will think that out they will see that it is a much less serious interference with the rights of private property than to adopt the theory that there is private property in petroleum as it exists to-day under the soil, and to vest that in the Crown. In the one case you are, as many hon. Members have said, confiscating private property without compensation, and on the other theory you are merely preventing an owner developing his property in the way he desires to develop it. It is a no more serious interference with that right, to prevent him sinking bore-holes where and how he wishes and irrespective of the amenities and his neighbours' rights and so forth, than it is under the Town Planning Act or any other housing Act to prevent him building the type of house that he wants on his own particular type of surface. Therefore I suggest, on the ground of the legal principle involved, which I admit is doubtful, the Committee should make a choice which course they are going to adopt. I suggest that on that ground and on the ground of expediency it is far better that we should merely interfere with the right of user of the surface rather than attempt here and now to pass an Act confiscating property belonging to individuals, and to do so without compensation.

3.40 p.m.


I do not propose to speak at length because I fully explained my view of the law on the Second Beading of the Bill, and my view is entirely in agreement with that of my hon. and learned Friend the Member for Ashford (Mr. Spens), who moved the Amendment. I venture to suggest to the Government that this is an Amendment which ought to be accepted. It does not interfere with the object which the Government have in view, and it avoids creating a precedent which might be used in future to justify Acts of Parliament confiscating private property without compensation. It cannot be denied that the Bill is drawn on the assumption that the law is that there is private property in petroleum, and my hon. and learned Friend has shown that there is at any rate grave doubt as to the accuracy of that view. In those circumstances, why should the Government resist the Amendment? Why-should they base this Bill on what is, I think, generally regarded as a wrong view of the law, with the additional disadvantage of creating an awkward precedent which may be used in the future in the way I have suggested? When the Bill was introduced hon. Members opposite gloated over what they regarded as the precedent which it involved. In my view they are mistaken in their view of the law, and if they are barking up the wrong tree, why should the Government bark with them? The Bill will work equally well if this Amendment is adopted; it will be in conformity with what I believe to be the correct view of the existing law, and will as I say avoid an awkward precedent.

3.42 p.m.

The SOLICITOR - GENERAL (Sir Donald Somervell)

The Amendment moved by my hon. and learned Friend the Member for Ashford (Mr. Spens), and supported by my hon. and learned Friend the Member for Down (Mr. D. Reid) is an academic Amendment. I am not saying that it is not important, but it is not directed in any way to the substance of the Bill. If it were adopted, any owner of land under whose land petroleum might be found, would get no more and no less than he would under the Bill as it is now drafted. It is put forward on this ground and this ground only—that on a certain view of the law the words suggested in the Amendment would be more appropriate than the words in the Bill, or to put it in another way, that the words used in the Bill suggest a legal position which my hon. and learned Friend says may be wrong though he does not say definitely that it is wrong. The two legal positions are these: One view is that if a man owns property he can dig down to the centre of the earth, and that he would be entitled to claim all contained in that cone of soil including any petroleum as his property. The other view is that he might not be able to claim that, but that he could sink a hole in the surface of which he was the owner, and draw up through a pipe anything that happened to come up through that pipe, and, subject of course to such statutory regulations as might exist, he could sell what he got out of the pipe just as he could sell the gravel off the surface.

I suggest to the Committee that it is not quite correct, even on that view of the matter, to say that no property exists in petroleum. It is not an actual property; it is more a potential property. It is a property when you can catch it and put it in a bucket, but I do not think it is right to say—and this is the view on which my hon. and learned Friend based the Amendment—that there is no private property in petroleum. Everyone appreciates the distinction between the view which clearly applies to immovables, that you can take what is actually in the soil, and the view which may apply to liquids. My hon. and learned Friend gave the examples of water and brine. When I first read the Amendment I was not quite sure as to what night be its intention, but my hon. and learned Friend has made it quite clear. He speaks in the Amendment of His Majesty henceforth having the exclusive right of searching and boring for, and getting and appropriating petroleum. Therefore, it is the intention of the Amendment that the Crown shall have exactly the same rights over petroleum as those which are Conferred by the Bill. It may be suggested that anybody below whose land petroleum runs should be able to pump for it and sell it as an ordinary member of the public. It is not intended by this Amendment that that right should be vested in a private person. I want to be as brief as I may be in dealing with this Amendment, but I hope I am doing it full justice. My hon. and learned Friend has admitted frankly that there may be some doubt about it. We do not want to use any words which may leave any doubt in existence, and on which arguments may be put forward or suggestions made which are not consistent with our purpose. I have already suggested that even on my hon. and learned Friend's view the words in the Bill are not inappropriate, and we think that the proper and straightforward course is to use words as to which there can be no doubt, and to say that it is the intention of the Bill, whether it is regarded in the light of the one theory or the other, that this property shall be and is hereby vested in His Majesty. While appreciating the considerations advanced and the very interesting position stated quite accurately by both my hon. and learned Friends, I would ask them to withdraw the Amendment.

3.47 p.m.

Marquess of HARTINGTON

I am sorry that the Government have not seen their way to accept the Amendment, because I regard these words as preferable to the words in the Bill in spite of the fact—and I am guilty of some temerity in differing from my hon. and learned Friends on this point—that I believe the Amendment to be based on thoroughly bad law. I think it is based on a view of the law which has long gone by the board. It is right that the Committee should know that there is a precedent which I humbly submit covers the matter. I do not think I told the House of Commons the full history of the petroleum well of which I am now the licensee when I dealt with this matter on the Second Reading of the Bill. Even before the War we had begun to suspect the existence of petroleum beneath our property and we had protracted negotiations with Mr. Pearson, with a view to its exploitation. Those negotiations took a long time. I have the draft lease here and hon. Members will see that it is a bulky document. This was a new thing in this country at the time and the negotiations took a long time. But the negotiations were practically completed when the Government came gate-crashing in, and as anyone with a knowledge of Government interference in these matters would expect they spent a great deal of public money and made a hash of the whole business.

The Government came in under the Defence of the Realm Regulations, and appropriated quantities of oil. The quantities were not enormous, but the values at that time were very high. They sold 500 tons of the oil at £22 10s. a ton, and another 500 tons at £14 a ton. That was during the War and the oil was needed for national purposes. After the War we were proceeding in the courts against the Government for taking this oil to which we maintained they had no right, and the Government after considerable negotiation came to the conclusion that they would lose their case, and that there was, in fact, property in the oil. Finally, there was a compromise by which it was agreed that the Government should keep the cash which they had received for the oil and hand over to us the well, derrick, tools and licence as a going concern. On a rough valuation, the values were about the same, and we decided to enter into that arrangement.

I think that confirms my view that in the opinion of the Law Officers of the Crown at that time there was undoubtedly property in petroleum, and I believe there is no doubt that property in petroleum does exist. The analogy with water is false, because water is flowing and is constantly renewed from above, otherwise it would cease to exist, but petroleum is not flowing, and it is a false view to maintain, that petroleum can be extracted from any great distance. There are exceptional conditions in which petroleum can be got from some little distance, but, broadly speaking, it cannot be extracted from any very considerable distance. It flows through the interstices of rocks, many of which are as dense as that on which this House is built. Gas pressure extends over a wide area, but it is not the case that oil can be extracted from any great area. Therefore, I think the doctrine of my hon. and learned Friend is wrong, and I am sorry the Government cannot accept the Amendment. I hope I may be allowed to ask a few questions, which I indicated to some extent during the Second Reading Debate, but to which I have had no reply so far. Answers to them will tend to enlighten our minds and to shorten the Debate to a considerable extent. The first question is: On whose advice has this Bill been drafted and brought in? We have received very little information on that point. We know that it has not come from any pressure within the ranks of our own party.


I cannot say now what would or would not be in order on the Motion, "That the Clause stand part of the Bill," but the questions of the Noble Lord are beyond the scope of this Amendment; at any rate, his first question is.

Marquess of HARTINGTON

The questions are all based on the question why it is necessary to appropriate oil. The Government's case is that they must appropriate the property, and I am not clear why it is considered necessary to do so.


I think the questions would come better on the Motion, "That the Clause stand part of the Bill." It is admitted by the Noble Lord that the Amendment does not (make any actual difference with regard to the question as to property.

3.54 p.m.

Lieut.-Colonel ACLAND-TROYTE

I am surprised that the Government have not accepted the Amendment and shown more sympathy with the gallant effort of my hon. and learned Friend the Member for Ashford (Mr. Spens) to get them out of the very nasty hole in which they find themselves. It shows, however, that the Government have a, certain amount of pluck; they realise that they are nationalising petroleum and confiscating the property of other people, and they are prepared to stand up to it. My hon. and learned Friend has done his best to get them out of that difficulty and to make it easier for Conservatives to support the Government, but the fact that they admit that they are nationalising property gives an excellent opportunity to hon. Members opposite. Hon. Members who support the Government will find it very hard to argue again proposals for nationalisation that may be put forward by the Socialists, and, in our view, only by fighting this Bill can we reasonably fight nationalisation in the future.

3.55 p.m.


I am sorry the learned Solicitor-General has not accepted the Amendment, but not for the same reason as the last speaker. I am very glad the Government are not allowing any doubt about the fact that property in petroleum is to vest in the Crown, whether it vests at present in private individuals or whether it does not, but I cannot quite agree that because this is an academic question, it is therefore without importance. It is not impossible to contemplate some time in the future when the question might arise whether all minerals vest in the owner of the surface or in the Crown. Many people think the decision in the case of Northumberland against the Queen, in Queen Elizabeth's reign, was wrongly come to, and that royalties ought in law always to belong to the Crown. If I understand the Solicitor-General rightly, he is not contending that the view of the law put forward by my hon. and learned Friend the Member for Ashford (Mr. Spens) is wrong, but I would suggest to him that the Amendment would apply equally, whichever view of the law might prove to be accurate, whereas in the case of the Bill as put forward it definitely assumes that at present petroleum vests in the owner of the soil. I have put in a manuscript Amendment to delete the word "hereby," so that, without asking the Government to depart from the draft which they have put forward, by deleting the word "hereby" one would avoid the disadvantage of Parliament expressing, for what it may be worth, the opinion that at present property in petroleum vests in the individual.


I cannot call the hon. Member's manuscript Amendment in any event, because, of course, the form in which the Question has already been put involves words beyond the word "hereby" standing part of the Clause. Moreover, I think the Amendment is misconceived. So far as I have followed the discussion hitherto, it is not suggested that petroleum is already vested in the Crown.

3.57 p.m.


This is not an academic Amendment at all; it is a matter of very considerable substance. I do not know whether to be glad or sorry about the attitude of the Government, but this was an attempt—and I am not qualified to say whether the exposition of the law given by my hon. and learned Friend was right or not, though the information that I have been able to obtain on the subject leads me to believe it is not—to change this Bill from sheer and undiluted confiscation of an existing right to a mere statement as to whom a doubtful property belongs. My hon. Friends and myself who oppose this Bill dislike both views. We think it is an unjustifiable interference, but we like the statement suggested by my hon. and learned Friend very much more than the sheer bald-faced confiscation without compensation which the Government propose; and we propose to divide in favour of the Amendment in order to show that our dislike of confiscation is even greater than our dislike of the principles of the Bill.

3.59 p.m.


I think the opposition to this Bill is conceived on a misunderstanding. I do not think this is the nationalisation of an asset that belongs to individuals, because I think that petroleum in the ground is, like the air above the ground, incapable of being taken possession of and becoming a thing of private property. I do not think it can scientifically be done. This Bill is making use of what the Crown has always claimed, because the foundation of the ownership of the land of this country is that all the land belongs to the Crown, and there are such things as estates in land belonging to His Majesty's vassals who have all the property rights, but the land comes back to the Crown, and the only people who are actually independent of the Crown are the Udallers of Orkney. All the rest are His Majesty's vassals. I think that that is sound law.

What is the position of this petroleum? It is under the ground floating about, and can come to any part of the sub-strata. Nobody knows where it is, or from what ground it comes. You can bore anywhere. That is one of the causes of over-production in the United States where, no matter how wide the oilfield is, everyone wishes to bore and to take out as much oil as possible before the other fellow has sucked it away. I have seen in Rhodesia a farmer put down a well a little bit deeper than another man's well, perhaps a mile away, and get his water. The same thing happens with oil. It is not capable of being made private property. The law says that the landowner owns the property in the land as high as heaven and as low as hell, and, therefore, it was illegal to fly an aeroplane over a house. There is nobody who can either work or take possession of the oil except the Crown. Therefore, I submit that this Bill is not nationalisation at all. It is simply stating that the Crown alone can make a job of this thing, but personally I do not think it knows how to make use of it. Therefore, I think we are perfectly right in giving the Minister of Mines the right to carry this into operation so that those who have sown and incurred all the expense and trouble will reap the benefit.

4.3 p.m.


It seems to me that the whole case which the Government put up against this Amendment is the same case that they put up in favour of the Bill, and that they rely, as far as I can grasp, on geological facts. I am not a geologist, and have no expert knowledge of the subject, but I have heard it stated on reliable authority that this oil does not travel more than a very limited distance. I have also heard it stated by the Government spokesman that the oil does travel a very considerable distance. I want to know what is the truth about that. It cannot be merely an opinion; it must be a fact one way or the other. Therefore, I want to ask the Government spokesman on whose advice he is relying in saying that this oil travels for long distances? Before coming to any decision about this myself, being admittedly totally inexpert, I should very much value some definite expert opinion on the subject of the distance which oil is likely to travel underground.

4.5 p.m.


The hon. and learned Member for Argyllshire (Mr. Macquisten) was rather unfortunate when he announced that one could not have private property in air. It is now perfectly possible—and it is being done all the time—to extract from it various valuable chemicals both for agriculture and for war purposes. So that I think that argument goes by the board. Secondly, the hon. and learned Member could not see how anyone could have private property in oil. Of course, if oil happened to exist where there was a number of smallholdings on the surface, it might be rather difficult to determine who should have that oil, but surely if it happened to exist under a large estate, as, I imagine, in the case of my Noble Friend the Member for West Derbyshire (Marquess of Hartington), it is quite likely that the whole of the oil could be extracted from private land in single ownership. Oil does not travel more than a few hundred yards, and I would most emphatically support the demand for a reply from the Minister as to what sources of information he has to make anyone suppose that oil travels more than a very short distance.

Finally, in regard to the point as to there being ownership of oil invested in private persons at the present time, as the law stands to-day I think we may take it as being pretty well established that such private property does exist, because it may be taken for granted that the Crown never lets go of anything that it once gets its hand on. We were told at Question Time that the opinion of the Law Officers of the Crown was confidential, but I have no doubt that the Law Officers at an earlier date repre- sented that there was private property in oil; otherwise, my Noble Friend's family would never have had their property restored. I agree that, bad as this Bill is from beginning to end, it would be slightly more innocuous if the Amendment were accepted. I would, therefore, urge the Minister to accept the Amendment, and also to give an answer to the question with regard to the distance that oil can travel underground.

4.8 p.m.


I wish to express satisfaction with the view stated by the learned Solicitor-General. The Committee is asked to declare in this Bill that property in oil should vest in the Crown. The Committee may bear in mind the statement of probably the greatest master of the law of our Constitution, that Parliament can do anything except change a man into a woman. That was the opinion of Professor Dicey. The issue here is whether we stand by the Government in the declaration in the Bill that property in petroleum should be vested in the Crown. I, myself, take that view, and would enlarge the view in regard to other natural products which may be hereafter found underground. I congratulate the Government upon taking this stand. I think they are doing the right thing as a National Government. They are justified in protecting the economic resources of the country so that they can be applied to public purposes. If it be the case that by scientific investigation there are valuable deposits of petroleum or other natural products in the soil, then, in the view of many of us, it is right that the Government should take steps to vest such discovered properties in the Crown. I express again my satisfaction at the stand which the Government have taken.


Are we to have no reply from the Front Bench as to the advice on which they base their statement that oil is a travelling commodity? It really is a very important point.

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


The next Amendment—to leave out Sub-section (1)—I do not select. The following Amendment in the name of the hon. and gallant Member for South Leicester (Captain Waterhouse) is one of a group of Amendments which would have the effect of vesting petroleum in a board established with a view to dividing royalties among the owners of the soil. Those Amendments are out of Order, because they would be very clearly outside the scope of the Bill, and, indeed, would be such that, if they were made, the Bill would be a totally different Bill from that which was read a Second time.

4.11 p.m.


May I point out that the Title of this Bill starts off by saying that it is a Bill to vest in the Crown, and goes on to say that it is to make provision with respect to the searching and boring for and getting of petroleum and natural gas, and for purposes connected with the matters aforesaid. I submit that in the last sentence the real essence of the Bill lies. If the Bill is mainly to nationalise, and not to rationalise, I think we have been misled; but if it is to rationalise, and to nationalise only as an incident, I submit, with great respect, that my Amendment is a better method of rationalisation, and, therefore, comes properly within the scope of the Measure.


There are only two observations I would make upon that. If one accepts that the Bill is dealing with two particular matters, one vesting the property and the other rationalising, I should still have to rule this Amendment out of order as being entirely contrary to and outside the scope of the Bill. I would remind the hon. and gallant Member that I am not ruling the Amendment out of order as being outside the Title of the Bill, but outside the scope, because an Amendment may be quite in order and yet be outside the Title of the Bill if it be within the scope of the Bill. In the circumstances, however, I have no doubt whatever that this particular Amendment is entirely outside the scope of the Bill.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

4.14 p.m.

Marquess of HARTINGTON

I am very grateful to you. Sir Dennis, for indicating at an earlier stage that I might now ask my hon. Friend those questions which he showed such an amount of reluctance to answer during the Second Reading. They are questions to which the Committee must have answers before it can really discuss the Bill. The first question is, on whose advice really the Bill was brought in? There, is no difference of opinion that the searching for petroleum ought to be properly controlled by the Government to avoid wasteful exploitation such as has happened in America, but why this necessity for its expropriation? I ask my hon. Friend, therefore, on whose advice he has brought in this Bill? There are, after all, readily accessible and very reliable authorities who might be consulted. When I pressed my hon. Friend last time, he adopted a military formula, and said that they had taken advice in every shape and form, and had surveyed the whole field. "Any shape or form" is a convenient formula. What does the Minister mean by it?

Has the hon. Gentleman consulted the Geological Society of London, a very reliable body of immense weight in geological matters? Has he consulted the Institute of Petroleum Technologists? I shall not mind if my hon. Friend interrupts my speech, and says "yes" or "no" to my questions as I proceed. If that makes too grave a breach in his Parliamentary docorum, he can make an affirmative or negative movement of his head. Has he consulted these reputable bodies whose advice one would expect to be taken in a matter of this kind? My hon. Friend does not seem disposed to answer. Has he consulted the Institute of Fuel, whom one would expect he would have consulted if, as he said, he has taken advice from every quarter? Has he consulted the Institute of Mining Engineers? My hon. Friend shows no sign of answering. I was rather struck to see in the papers yesterday, among the more interesting news, that at 2.30 to-day there is being held in Regents Park a show of donkeys and ponies under the auspices of our Dumb Friends League. In view of the attitude he has taken up, the Minister for Mines would be more useful at that show than he is here, and it might well be that he would win a prize. Has he consulted the Institute of Mining Metallurgists? I press my hon. Friend for an answer to these questions. They can all be answered very easily and quickly. If he will not answer now, he is entitled to answer later on. Has he consulted the five applicants whose licences have been held up by the introduction of this Bill? Has he consulted any of the existing licensees? I can answer that one for him. He consulted me and I told him that this was a darned rotten silly Bill.

I wish the hon. Gentleman would give us some more information on these points. It is hard work to get on unless we are in possession of these facts. The Government are making very far-reaching alterations of the law of England and the House was entitled to expect that on Second Reading of a Bill of this kind it would be told very much more than it has been. Neither the President of the Board of Trade in his opening speech nor the Minister for Mines, in replying to Debate, gave the information, and we are entitled to have it on the Commitee stage.

The second question is: Why has it been thought necessary to introduce this Bill just at a period when there were already signs that interest was being taken in the question of petroleum and when licences to bore were actually before the Department? There were five applications before the Ministry when the Government decided to introduce this Bill. The applications were held up, and there might have been oil being got now, but it cannot be got because the Government will not let anybody look for it.

The third question is: What grounds have the Government for believing that if this Bill becomes law search will be made for oil which would not have been made unless this legislation had been introduced? The Committee is entitled to hear from the Minister what grounds he has for believing that if the Bill becomes law search will be made. Has he any guarantee that money will be spent, that wells will be sunk, and that scientific exploration will be made? Has he in mind to grant the licences which are held up if the Bill becomes law? Has he any reason to believe that other applicants will be more willing to come forward if this Bill becomes law? All these are questions to which the Committee is entitled to an answer before we proceed to a discussion of the further Clauses. We have had an extraordinary dearth of information so far, and we are entitled to have answers to these questions before we go on.

I come to the question of the expropriation of petroleum which is provided for in Clause 1. Oil is spread widely over different parts of the world, and in spite of private ownership it can be produced cheaply. That system has in some cases led to faulty development, and, as my hon. and gallant Friend the Member for Hitchin (Sir A. Wilson) told the House during the Second Reading Debate, it has in some cases led to the principle of off-setting, that is, drililng the wells with regard to controlled ownership rather than to the natural form of the oil pools. The licensing system could get over that difficulty, and with one or two small modifications all that is necessary could be done by the existing licensing system. Over the greater part of the world private rights in petroleum exist, and where they have been taken away, as they have been in some cases, by Governments, the result has usually been disastrous.

The Committee is no doubt aware that over the whole of North America complete property rights in petroleum exist. In a paper read to the Institute of Petroleum Technologists, my hon. and gallant Friend the Member for Hitchin said: In Bolivia, Chile, Colombia, Ecuador, Guatemala and Peru there is a disposition to hold that deposits of petroleum wherever found, are the property, not of the surface owner, but of the State. In some cases the State has complete rights, and in others the rights may be expropriated by the passing of something in the nature of an Order in Council. It is of some interest that: In Mexico the Central Government retains the ownership of mineral resources. Formerly it conceded the landowner the rights to coal and oil in his lands, but reclaimed these in 1917 with effects temporarily disastrous to the oil industry and to the country's finances. In this country development has not sufficiently advanced for anything that the Government can do to be disastrous, but it is an interesting fact that in 1917 the action of the Mexican Government was disastrous to a whole industry and to the country's finances. That is enough to show that petroleum can be and has been got without this system of expropriation which the National Government are now advocating. Oil is got in large quantities in America, and one has heard of people like Rockefeller, for instance, who have made decent competencies by prospecting for oil. I would remind the Committee that we in this country hardly know what royalties are. We have to go to places like Texas to see royalties on a magnificent scale.


Or go to South Wales.

Marquess of HARTINGTON

I do not think there is any case in this country where they get one-sixth of the value of the coal extracted. Royalties in America exceed anything we have ever contemplated in this country. When we were speaking of this question on the Second Reading an hon. Member interrupted me and said that in the Forest of Dean there were no royalties. There are, however, and the colliery company gets off no cheaper there. The royalty owners are a Government Department, and, instead of the money going to the owners of surrounding coalfields, it goes to Whitehall. They are heavier than those charged by many private owners. We ought to have an explanation why the existing licensing system will not break down. We are all agreed that oil should be controlled, and we want to get unity of development over the whole field. If we are able to start the industry in England it would be a thousand pities to have the dissipation of energy which is seen in the unrestricted private ownership and enterprise which is allowed in America. My submission is that that object can be perfectly well attained without this measure of expropriation. The licensing system gives a complete monopoly and the right to bore in any area to a single company, and more than that, it seems to me, is unnecessary. The licence can be issued to cover any area which the Government think fit and on any terms which the Government think fit. It may be issued to cover the whole of what may be supposed to be an oilfield of two or three counties.

There are no limits to the power of the Government in the granting of licences. That seems to do away completely with the necessity for this expropriation. There are, I think, certain conditions which would be required under the licensing system. You would want to grant anciliary rights and compulsory powers similar to those in the Mines (Working Facilities) Act, which was passed by a Conservative Government without demur, certainly without any demur from me. The licensing system does make a considerable interference with property rights, but it is an interference which I, who am something of a stickler for property rights, have never boggled at for a moment, because I realise it is necessary. If an owner who may have vegetable oil under his land which a licensee who is a monopolist might not think it desirable to get, the owner has no remedy. The Committee may think that is hard on him. He might want to enter into some such pooling arrangement as my hon. and gallant Friend the Member for South Leicester (Captain Waterhouse) has endeavoured without success to move. Suppose an owner under the existing law believes he can get oil and the company which has been given the licence in his area is not disposed to get that oil, he has no remedy in law or remedy of any sort. Why it should be necessary to go beyond that I cannot imagine. If the Committee decide to go into the question of compensation to an owner in these circumstances it will have no great difficulty. I do not know that the Government need bother about that.

The difficulty is not so great here because the actua loil does not flow any great distance. It may in some instances flow for a considerable distance, perhaps up to a maximum of a thousand yards, only under exceptional conditions. What does travel over wide areas is the gas pressure, and that is why it is necessary to have direct control over the getting of oil. By tapping the oil structure at the top the gas can be released from the whole of the oil pool and the rest of the oil will thereupon give off gas to replace that which has been drawn off. Ultimately the gas on the whole of that field extending over a considerable area will become a thickened heavy treacly fluid and refuse to flow through the rock. It is necessary, therefore, to have this control in order to stop the getting of oil where it should not be got. It is undesirable to drill on the top of the structure where the gas is and still more undesirable to drill on top of the oil where it is heavily charged with gas. I agree that there might be a considerable interference of property rights with a measure of control. I say once more there is no necessity for the extension of Government interference which is entailed by this complete expropriation.

Another point which arises on this question of expropriation has been referred to in connection with coal. Some hon. Members take the view that it would have been far better if all minerals had remained vested in the Crown. [HON. MEMBERS: "Hear, hear."] Hon. Members opposite are quite entitled to then-point of view and to cheer that view they are Socialists; but we on this side of the House are—most of us—not Socialists. We were elected to Parliament because of the almost irreparable damage which had been done to the finances of the country by the party opposite putting their view into practice when they were in office, and I am sorry to see the spectacle of a National Government introducing this legislation, with those two dogs there returning to their vomit. It seems to me a pity that a Government which was definitely elected to put right the harm which the Socialist Government did should at the dictation of some advisers, introduce more Socialist legislation. The question of coal is strictly relevant to the question of oil, and I directly join issue with those Members who believe that coal could have been worked to greater advantage if there had been no private property rights in it. The hon. Member for North Leeds (Mr. Peake) dealt with that question on the Second Reading. He said that at this moment great difficulties are arising from the private ownership of coal, but they are difficulties which I think are capable of being put right with no great trouble. I do not fully share his views about the desirability of closing certain coal mines That prosperity for the coal industry is to be attained by restricting the output of coal, in order to keep up the price, is not an argument which, in the long view, is a sound one. However, that may be an arguable proposition.

I wonder whether my hon. and gallant Friend the Member for North Leeds believes that if the Government were the sole owner of the coal things would be very much easier. He says that anyone who wants to close a coal mine has to pay compensation to the landowner. If a lease is granted by a landowner to a colliery company for the purpose of working the coal on his land, there is an obligation upon the colliery company to get that coal, and if it does not it has broken its lease and becomes liable to pay compensation. What leads the hon. Member for North Leeds to believe that a Government Department would be an easier landlord than an existing landlord? The Regent Street leases, and other cases, show that a Government Department would be no more lenient than a private individual. Nor do I believe that if colliery companies had to negotiate leases with a Government Department there would have been a greater development of the coal industry in this country.

There have been certain difficulties but, on the whole, colliery companies have found landlords eager to assist them in every possible way, and for a very good reason, namely, that every ton of coal which is mined means 3d., 4d., 5d. or 6d. in the pockets of the landlords. If the coal had always belonged to the Government, I believe the colliery companies, instead of having the active and willing co-operation of the landowners, would have had to fight nearly every inch of the way. Landowners would not have been anxious to see their land spoiled and the air in the neighbourhood blackened by collieries. So far from its being the case that the coal industry would have gone ahead more easily if there had never been private ownership, I believe the position of affairs would have been definitely the reverse if colliery owners had had to deal with a Gevornment Department instead of a private owner, and had encountered the hostility of a whole neighbourhood instead of getting active and willing cooperation.


Look at the present plight of the coal industry.

Marquess of HARTINGTON

I hope those who say that will remember what they did in 1926.


I think a reference to coal by way of comparison is quite in order up to a certain point, but I must ask hon. Members on both sides not to let this develop into a discussion on coal.

Marquess of HARTINGTON

I have really finished my point about coal. It is not the case that coal would have been better developed if there had been no private property in coal, and it is not the case that oil will be better developed if there is no private property in oil. There is not one Clause in this Bill which will diminish by one the number of landlords with whom anyone who wants to search for oil will have to negotiate.


Will it be in order to ask whether the Noble Lord will explain why every Commission which has inquired into the mining industry has in its report taken an entirely opposite view from that which he is putting forward?


I think that proves the point I made just now—that we must not let this develop into a discussion on coal.

Marquess of HARTINGTON

The answer to that is obvious—because they were all set up by Radicals or Socialists. Rut I will leave the question of coal, which we cannot discuss without engendering a certain amount of heat, and turn to another aspect of my argument, and that is the effect this Measure of expropriation will have on the general question of the security of property. In his Second Reading speech my hon. and gallant Friend the Member for North Leeds rather misunderstood the point I made about the effect of this Bill upon agriculture values. Of course, no land, or little or no land, has up to now been sold because of petroleum rights, but undoubtedly that land has enjoyed a value arising from the fact that the ownership of it was complete, and because there was always a possibility of enjoying incomings as well as the liability to pay outgoings. This Measure will be taken as a precedent for expropriating all forms of increment which may arise in the future. If we destroy the sense of security attaching to the ownership of land, so that an owner feels that any bit of luck which may come his way is not to be his, we shall find a disastrous, flight of capital from the land, which will do great damage to agriculture and house building.

Hon. Members will recall the effect which the creation of a feeling of insecurity in the ownership of land can have by recalling what happened after the Budget of 1909. The number of houses built dropped by more than a half a year or two after that legislation, which was really designed to increase the number of houses to be built. It is a very serious thing to diminish the sense of security attaching to rights in property. This House has in the past been rightly jealous of interference with the rights of property, because they are essential to the very existence of any community such as ours. It is noteworthy that in any pioneer community a far more serious view is taken of crimes against property than of crimes against the person. In a pioneer community if two men fall out over a game of cards or a girl and they shoot one another, the view taken is, "Well, boys will be boys." A very different view is taken of, say, the stealing of gold dust. In my own county of Derbyshire, where we had ancient mining laws, a very lenient view was taken of any fighting among the independent bands of miners, but anyone caught stealing lead, which of necessity had to be left lying about, was liable to have hands nailed to the winding gear and to be left there until he was dead. A serious view of crimes against property is necessarily taken, because ordered commercial development is impossible unless the security of property is absolute. This Measure is a considerable infringement of the security of property rights, and a Government which was returned for the special purpose of restoring the feeling of confidence in the community is exceedingly ill-advised to bring it in. My hon. Friends and I must divide the Committee on this question of the Clause standing part of the Bill, and in doing so we feel that we are dividing the Committee on an issue which is much more serious than many hon. Members have realised.

4.40 p.m.


On the general question of resisting an attack on the rights of property, I should certainly join with the Noble Lord; but we are dealing here with a type of property which, so far as I am advised—and I have had occasion to go into geological matters in the last two years in connection with litigation—ought to be vested in the Crown, because it is not a suitable property for private interests. At one time land was not regarded as a suitable subject for private ownership. We had a sort of communal system of land all through the country. But that led to abuse; the land was neglected and wasted, because it belonged to everybody, just as it would be to-day if those conditions prevailed. We had to depart from that system in Elizabethan and pre-Elizabethan times. The commons were enclosed because the land was neglected and was not producing the food which it ought to have grown. Everybody was doing his utmost to get as much as possible out of the land and putting as little as possible into it. We had to have private ownership to get something out of the land. Now the tendency is more and more to leave things to private ownership with a view to their improvement, because as long as every member of the community is, in an upright, honest and fair fashion, doing the best for himself, he is also doing the best for the whole community. That is one of the laws of our being, that is the principle of righteousness, which Providence has provided for the guidance of human society. That is the principle of Kant, the German philosopher—to act in such a manner that one's action is capable of being a universal law to mankind.

We had to abandon the system of communal property because what belongs to two or three people is allowed to go more or less to rack and ruin. That is why, when people have a responsibility put upon them, they appoint a committee—because no single man 'Wants to take the responsibility for any act of wrongdoing. Each wants to blame the other. In the case of oil, however, we are dealing with a commodity which is buried in the bowels of the earth. It may have formed into a small pool in one place, but in another place it may have spread over practically any distance. It all depends on the strata and the cracks in the rocks. The Noble Lord has told us that once the gas is let out one cannot get the oil out, because the pressure is taken away. That shows that oil-bearing land is something which needs to be treated as a unit. The Noble Lord hoped the Government had had the best scienific advice, and I hope they have. They must have some advisers, some geologists whose names will stand scrutiny. I have not always the most profound faith in geologists, for they have contradicted each other from generation to generation, like the theologians. In Scott's book, "St. Ronan's Well," Meg Dodd describes geologists as "men who go aboot wi' wappin' hammers trying to find oot how the world was made." Still, on these matters, there is sure to be sufficient evidence, even if it is got from geologists from America. In scientific matters they are probably more reliable than Americans are in political matters.

I wish the Government could have accepted the hon. Member's Amendment, which was not such a plain, blunt declaration. With it we might have arrived at much the same result, without offending susceptibilities about the rights of property. They are rights which must not be abused. Everyone must regard private property as a trust. Landowning ought never to have been commercialised. The possession of land should have been looked upon as a trust and the best landowners are those who regard the land as a trust. That is why the land system in this country, especially agricultural land, has been successful. I demur entirely to the idea of doing anything against the rights of private property. We know that it used to be that whatsoever a man soweth that shall he also reap but to-day that which he has earned shall be taken away from him by taxation. I support this Bill, not because it does anything in the nature of nationalisation, but because it is a businesslike effort to see if there is oil in our earth, of which I have very grave doubts.

4.46 p.m.


I do not propose to go into questions as to the rights of private property, or to discuss the principle behind the Bill. My view was amply discussed on Second Reading, when the House gave a most emphatic vote. The Noble Lord the Member for West Derbyshire (Marquess of Hartington) presented a series of queries and tried to cross-examine the Secretary for Mines. I do not know whether there was anything behind those questions. I say in all seriousness that it is just as well to clear the air of rumour. I did not attach any significance to the rumours, but it is undoubted that, during the Second Reading Debate, there were constant lobby statements that outside influences were behind the Bill. Once you start that kind of thing, it is difficult to keep pace with it. It would be just as well if the Minister told us that this Bill has been undertaken by the Government Department concerned, after ordinary technical advice, merely to regularise a very unsatisfactory position. It is as well on an occasion like this not to mince words. It has been constantly stated that one of the big oil monopolies is behind the proposal, but other statements have been made. The right hon. Gentleman will know better than I do what a lot of mischief can be done by this kind of statement, and I have risen to ask him to give a denial to all these insinuations, to which I hope he will not think I give any countenance. I am, on the contrary, satisfied that a Bill in his hands would not come forward as the result of pressure. It would be unfortunate if a most important piece of legislation for the proper and ordered expansion of any possible oil resources should be allowed to create a story of this kind. I hope the Committee will feel that I am justified in making this request.

4.48 p.m.


I am sure that the President of the Board of Trade will be gratified at the unsolicited testimonial he has received from the hon. Member for South-West Bethnal Green (Sir P. Harris). The hon. and learned Member for Argyllshire (Mr. Macquisten), will probably find himself in the Lobby with us, because he is very close to us now. He knows that these proposals are wrong, and that they are confiscation proposals, but, being a good Tory, he is trying to find reasons for supporting the Government. He says that the land belongs to the Crown, and that the Crown made grants of land. That is perfectly true, but if the hon. and learned Member presented me with a piece of land and three or four years later tried to reclaim the present, he would be confiscating what had become my property. The same position arises with regard to oil. The Crown, in granting land, made over the mineral rights with the exception of rights in gold and silver. That was decided in the case Northumberland versus The Crown in 1568.

I listened to the speech of the Minister on the Second Reading when he laid out his points so lucidly and clearly, that one felt, as always, that the speech must carry conviction. I read his speech afterwards with the greatest care to make sure that I had not been mistaken in the attitude which I am taking upon this Bill, and found that one must correct the impression which one formed upon hearing it in the House. The first part of the speech is a general disquisition on the importance of oil in our economic structure, and upon oil rights. It is beyond denial that that is a matter of general agreement. When he came to the second point he was obviously batting on a bad wicket, which he did not like at all; he was obviously turning from one argument to another, and at the end he left one in doubt as to which horse he was to back. Hon. Members will appreciate that the right hon. Gentleman was in doubt whether he was playing cricket or was horse-racing. He was careful to say: As far as we know, there are very small petroleum rights to be found anywhere in the United Kingdom. He went on to say, a little later: If petroleum were found in any area or under any land or site, I am sure it would only be in rare instances, and they are provided for in the Schedule to the Bill, and it would come as a great surprise to the landowner. I am not quite sure what the final sentence means. I can assure the right hon. Gentleman that after this Bill nothing will come as a surprise to any landowner. Obviously, his speech has not been quite accurately reported, but I do not want to stress the inaccuracy. He develops this theme, and he goes on: In the first place, we hold the view that these rights, if they exist at all, are purely imaginary and have no practical value, and never have had any practical value. The only method by which these multifarious problematical rights can be brought into some sort of businesslike uniformity is by vesting the rights in the Crown. Finally, he says: There is only one new departure, and that is in the transfer of these royalty rights to the Crown."—[OFFICIAL REPORT, 19th June, 1934: cols. 213, 214 and 215, Vol. 291.] The right hon. Gentleman cannot have it both ways. He cannot say that the rights are imaginary and that there are no rights at all, and then say that he proposes to transfer them to the Crown. Either there are rights or there are no rights. If there are, this Bill is proposing to confiscate them.

The right hon. Gentleman put forward a novel argument to support his claim. He said that the value of the rights was not known, and that if anybody who had property the value of which was not known, it ought to be confiscated. If anybody buys stock upon which he gets a fixed annual income, and there is suddenly a capital increment, as the result of which he doubles his income, the right hon. Gentleman does not for one moment suggest that that increment should be taken by the State. If the right hon. Gentleman proposes to hang in his dining room a picture for which he has paid £1,000, and he invites me to see it, and I say "That's a very nice Rembrandt you have," and then he finds that the picture is worth £3,000, he would not suggest handing over the £2,000 to the State. The picture is his; he bought it for better or worse. Let us imagine that the Secretary for Mines has a fancy to do a little hunting in Leicestershire, and that he buys a hunter for £200. He enjoys himself for a considerable time. Then the Solicitor-General comes along and says, "That's a nice horse. Let me see if I can do anything over the sticks with it," and he puts the horse in training and wins the Grand National with it. According to the right hon. Gentleman, the extra value of that horse ought to be confiscated by the State. If the Solicitor-General said to the Secretary for Mines, "I have taken away your hunter for which you paid £200, and I will be very generous and pay you £250 for it," the reply of the Secretary for Mines would be, "I do not want your £250; I want my hunter back. You ruined my hunter when you allowed it to be put into training." The Committee will agree that this is not a very generous proposal. If that be the generosity of His Majesty's Government, I do not think that it will appeal to many hon. Members. If the right hon. Gentleman is going to confiscate the increment that one gets in land, he ought to give compensation for the very much more frequent and equally unexpected losses that are incurred in the purchase of land. He went on to say in his Second Reading speech: The Government have considered every alternative that has been before a Royal Commission or a Committee or before Parliament in any Session in the past."—[OFFICIAL REPORT, 19th June, 1934; col. 216, Vol. 291.] There has never been a Royal Commission which has considered those points, and that argument is therefore answered at once. The matter has not been discussed since 1918. Immediately after the War, a number of scatter-brained schemes were brought forward with the idea. The Minister eulogised the Civil Service, and I agree that in that Service we have the finest body of experts that any country has ever had at its dis- posal. Will the right hon. Gentleman or the Secretary for Mines say to the House, "We asked our experts to pro vide us with an alternative scheme, and they have had to say, 'We are sorry, but we can think of nothing to take the place of confiscation'"? I do not believe that that is the case at all. I do not believe that the Government ever went into any alternative to confiscation. They thought that confiscation was easy; they liked what they call a clear cut; and they just made inquiries, accepted what was to their hands, and served it up as a most unpalatable dish to many of us on this side of the House. I am not going to deal at length with what my hon. and learned Friend said about the ownership of oil minerals. To do so would be an impertinence on my part. But I submit that, strong as his case was, there are arguments and cases which could be quoted proving quite conclusively that the ownership is in the hands of the owner of the surface.

My Noble Friend the Member for Hastings (Lord E. Percy) made what was perhaps the most telling speech, other than those from the Front Bench, on the Second Reading. He dealt with the convenience of this Measure. He said that it was so very much more convenient to keep oil minerals in the hands of the Crown, and he put forward the rather dangerous argument that when a large tract was owned by one person it could be quite simply worked, but that now, with a number of smaller landowners, it was very difficult to work, and, therefore, it was less desirable to stick to the exact letter of the law with regard to property. That is an argument which I completely resist. I believe that the whole of our civilisation is built on the basis of property rights. The fact that anybody, by a life of work, can acquire property, which heretofore has always been protected by the State, is perhaps the greatest asset that we have in this country. If we are now going to say that because a man is merely a small owner, and because the allocation of these rights may be awkward, therefore the defence of these rights is not necessary, we are starting on a slippery slope which may land us in difficulties which we cannot guess at this moment.

I am sorry. Sir Dennis, that you were not able to allow me to move my Amendment to set up a pool, because I believe that by some scheme of that sort—I do not want to deal with my Amendment—the Government could, if they wished, have avoided this controversial issue altogether; they could have given, their board the power to take dues for the benefit of His Majesty or of the State if they thought that that was proper or necessary, and provision could have been made for the charging of expenses. It cannot be possible for the Government now to say that it is impossible to unify this industry in this country by any means other than nationalisation; it is absolutely against the expert opinion on the subject. I have here a paper read by Dr. J. B. Umpleby before the World Petroleum Congress last year, on the position of petroleum in America, in which he said: In a recent case all operators and about 70 per cent. of the royalty owners agreed in principle to unitise a semi-flush field, urged on by the fact that the edge water was rapidly encroaching and the gas cap was rapidly spreading. Agreement was reached on the limits of the producing structure, the rock pressure in different parts of the pool, and many other vital factors. He concluded by saying: If the conservations commissions were prohibited by law to grant drilling permits in new areas except on unitised blocks, there can be little doubt that both lessees and lessors would get together on a workable unit plan. That is not the opinion of a Government Department; it is not the opinion of a politician either for or against a Bill; it is the opinion of a practical expert. If the right hon. Gentleman is going to reply, I hope he will say exactly what steps were taken and who was consulted in order to try to find a means for forcing upon this House a Measure such as this, with the principle of which so many of us completely disagree. Will the right hon. Gentleman tell us whether or not he has made efforts, and, if he has made efforts, what efforts? Will he tell us whether he has made inquiries, and, if he has made inquiries, from whom he has made inquiries, as to the practicability of a scheme of unification without nationalisation?

5.8 p.m.


Both my hon. and gallant Friend the Member for South Leicester (Captain Waterhouse) and my Noble Friend the Member for West Derbyshire (Marquess of Hartington) have great technical knowledge of this subject, which I cannot claim, but I would like to support my Noble Friend in the plea which he has made to the Government to answer one or two questions on the subject of this Bill. I think we ought to know why the Bill has been brought in. I know that we had an answer on this question from the Secretary for Mines on the Second Reading. He said that the Bill had been brought in: For no other reason than this, that the Government, surveying the situation and the needs of the present time, having had indications of renewed interest in the search for oil, have surveyed the whole ground, have taken the best advice, have exhaustively examined all possible alternatives, and have produced this Bill for the assent of both Houses of Parliament and of the country."—[OFFICIAL REPORT, 19th June, 1934; col. 307, Vol. 291.] That is a magnificent sentence, and we all congratulate my hon. Friend upon it, but it really does not take us any further. He says: surveying the situation and the needs of the present time. That is exactly what everybody wants to know—what the situation is, and what in the opinion of the Government are the needs of the present time. At the end of the sentence we are exactly where we were at the beginning. The President of the Board of Trade says that there is really no great urgency about the question. I think that other speakers have already quoted the passage in his Second Reading speech in which he said: As far as we know there are very small petroleum rights to be found anywhere in the United Kingdom."—[OFFICIAL RFPORT, 19th June, 1934; col. 213, Vol. 291. Why, then, are the Government bringing in the Bill, if this is not a practical proposition at the present time? Surely it cannot be because they have nothing else to do? They have unemployment, housing, and questions of foreign policy, which might well occupy the time of the House. I cannot believe that they would have taken this action unless there were some practical and urgent reason for it, and I think that the House of Commons ought to be told what it is.

That brings me to my second question, as to what consultation preceded this Bill. Whom did the Government consult, and why? I know that the Secretary for Mines, during the Second Reading Debate, said that there had been an appeal to suspicion, but I would assure him that that is not so so far as I am concerned, and I am sure it is not so in the case of my hon. Friends who have spoken in this Debate. We do not think that there is a Stavisky standing behind the right hon. Gentleman at the present moment; we have the highest respect for his personal character, and we assure him of that at once; but, at the same time, we would like to know the facts as to who was consulted. We have no ulterior moment; we simply want to know. The President of the Board of Trade used a number of abstract arguments. He said, and it is quite true, that in this country we have not very much petroleum, that we might need it in case of war, and that therefore it was very important that it should be developed here wherever that was possible. He went on to say that those who at present might hope to find oil on their property had done little or nothing in the way of exploration. I take it that the implication of those two statements is that the Government are going to do rather more in the way of exploration, and, therefore, we should like to know what steps they propose to take in the way of consultation. I noticed that the Secretary for Mines, answering my Noble Friend the Membr for West Derbyshire (Marquess of Harrington) at the end of the Debate, said that: The Government, of course, have done what any Government must do; they have taken advice of every kind and form to survey the whole field."—[OFFICIAL REPORT, 19th June, 1934; col. 314, Vol. 291.] I think they are quite right in doing that, but do let them tell the House of Commons exactly what they did. Then we should be quite satisfied. This Bill is, after all, a very far-reaching Measure, and I think that the questions we are asking are very reasonable ones. The Government, however strongly we support them, cannot expect us to support legislation of this kind unless we know the motive that inspired it, and I am afraid that, unless satisfactory answers can be given on this question, I and a good many other strong and devoted supporters of the Government will be obliged to go into the Lobby against them.

5.12 p.m.


I want to join in the appeal which has been made to the Government to give us a really compre- hensive explanation of the need for this Measure, and, above all, of the need for this Clause. The speeches of those who have supported and those who have opposed the Clause have shown little fundamental difference of opinion. The hon. and learned Member for Argyllshire (Mr. Macquisten) made an impassioned speech, but really the only thing he had to say in favour of the Clause was that it would give the Government control. My Noble Friend the Member for West Derbyshire (Marquess of Hartington) wants exactly the same, namely, control. Where we differ is as to how far the Clause is necessary or fair in ensuring control. We think that our interpretation of the law is right, and that the Clause involves a new principle, and one of extreme danger. I do not wish to labour the question of interpretation of the law, but, if the interpretation which was put upon it by my hon. and learned Friend the Member for Ashford (Mr. Spens) is correct, this Clause is really quite un necessary, because all that it does is to give the Crown the right to levy royalties, and I would point out to hon. Members opposite, who have greeted this proposal with glee, that, if that interpretation be correct, it does not abolish royalties, but, on the contrary, it imposes them. A royalty will be payable to the Crown in stead of, as my hon. and learned Friend says is the present state of the law, the oil belonging to anyone who actually gets it. If that interpretation be correct—


I would point out to the hon. Member that the Question now before the Committee is, "That the Clause stand part of the Bill."


I beg pardon. The ownership of the oil will be vested in the Crown, and presumably the producer will have to pay something for it. I cannot for the life of me see why the Crown should want to possess the oil simply for the sake of getting control when in point of fact they can have control by the licensing provisions of the Bill, and, indeed, under the existing system, for they can charge people what they like for these licences. We have been told that the object is to ensure rationalisation of oil production, but, if our interpretation of the law be correct, and if in fact the oil does at present belong to the surface owner of the land, there is no question whatever that this Bill is pure and undiluted confiscation without compensation. I believe I am right in saying that this is the first time that that has been done by any party, and it is a principle to which a great many of us are resolutely and determinedly opposed. I am modern and progressive enough to realise and to agree that the interest of the State must be paramount, and that, in case, not of convenience, but of need—I wish to stress that point—confiscation would be justified; but we have been given no evidence of need. We have been told that this is the simplest way of doing it, and that in the opinion of the Government it is necessary, but we have not been given one single argument to support that, or one single technical opinion to back it.

When you are embarking on a question of confiscation without compensation, a very vital principle and a new one, it is essential that you should have the clearest evidence that such action is vitally necessary. No such assurance has been given. Many hon. Members suggest that there is not any oil there, and they might just as well support the Bill but, when an injustice is going to be done, it is no excuse, like the celebrated baby in "Midshipman Easy," to say, "It is only a little one." If this thing be wrong in principle, it should not be done except under the most drastic necessity. If there be any oil, there will be a very considerable hardship. The Bill does not confer any considerable pecuniary advantage on the getter of the oil. It does not reduce by one man the number of people with whom he will have to deal. He will have to deal with the landowners, with the Crown and, if necessary, with the Railway and Canal Commission just as much as before. The only difference it will make is that, whereas in his dealings with the landowners there was some reasonable hope of getting to an agreement, he will have every landowner against him who does not want his property ruined.

Not enough attention has been paid to my Noble Friend's point about the attack on the security of agricultural land. The value that has been paid for oil rights under the land is negligible, if it exists at all, and if the effect of the Bill were to stop gambling in land because of oil values it would be a good thing.

The disadvantage of the Bill is that it adds one more insecurity to the position of the agricultural landowner. He never knows when someone may come in and acquire a licence from the Government to damage his property and make it untenable. The hon. and gallant Gentleman the Member for Hitchin (Sir A. Wilson) the other day said it was the practice in the oil districts that he knew for the concessionaires to buy the whole of an estate. That may or may not be the practice but it is not in the Bill, and there is nothing in the world to stop them getting a small portion of an estate and completely ruining the rest, paying only the agricultural value of the small portion that they have to buy plus 10 per cent. That is a very serious danger indeed.

It is no use saying that these rights are of no importance, because they do not happen to have been previously exploited or even suspected. The Noble Lord the Member for Aldershot (Viscount Wolmer) stated on the Second Reading a precise analogy. Lord Snowden said he would nationalise all property without injustice by saying that everyone born, after the passage of the Bill should inherit nothing, and he would not lose anything because he had never had it and he would have no expectations. That might commend itself to hon. Members opposite, but not to many on this side. The effect of these oil fields, if such there be, on agricultural land may be extremely disastrous. We all know what the effect of coal seams under the land in many districts has been. The house in which my family have lived for 600 years has been rendered uninhabitable by coal seams underneath it. It has nothing to do with me personally. I am only citing it as an example that comes within my knowledge. Does the House really think that adequate compensation for that property will be the agricultural value of the land plus 10 per cent? I do not seriously believe there is any member of the Conservative party, or indeed any supporter of the National Government, who would suggest that that was indeed equity and justice. The Clause is not an integral part of the Bill, and this is not a wrecking Amendment. If the Clause be a gross injustice and sets up a principle which is inherently wrong, we are right to divide against it.

5.22 p.m.


Whatever may be the legal position at present in regard to the ownership of oil, there will be no doubt about it if we pass this Clause, because the first Sub-section says: The property in securing petroleum existing in its natural condition in strata in Great Britain is hereby vested in His Majesty and His Majesty shall have the exclusive right of searching and boring for and getting such petroleum. That is to say, we have a frank and avowed transference of private rights to the State. That is nationalisation, and nationalisation is practically the main if not the only plank that Socialism has. The vast majority of Members on this side of the House have not forgotten that they were returned on a programme the main feature of which was the utter demolition of the Socialist party and all its works. I gave only one pledge in the whole course of the election, and that was that I would resist Socialist legislation even if introduced by the National Government. That is my position to-day. Most of us still realise that those were the votes that put us into this House—the votes of people who were disgusted with Socialism. Some have forgotten it. There is, for instance, the hon. and learned Gentleman the Member for South Notts (Mr. Knight).


The view that I put forward is the view that I have put forward on every opportunity since the Government were returned. It is the view which I put before my constituents and which they approved. That view is that this National Government is commissioned to collect the economic resources of the country and apply them for public purposes. I apply that test to this Bill.


The hon. and learned Gentleman has not forgotten his early training in the Liberal and Socialist parties from the glib way in which he can produce a formula to suit every case. To proceed to more serious matters, we who remember the pledge that we gave, a pledge which the hon. and learned Gentleman himself must have given, or the House would never have seen him back again, protest emphatically against the introduction of the Bill, and of all the Bill the first Clause is the most objectionable feature. It is definitely a transfer to the Government of private property. No one has yet attempted to make a reasoned defence of it. We hope that the Minister for Mines or the President of the Board of Trade will at least do the House the elementary courtesy of explaining why the Bill was introduced. We have had requests for this information from all sides, even from the Liberal benches. It is rather strange, considering how the Liberals stand up for the rights of private property when they are objecting to the action of the Minister of Agriculture, apparently welcome this Socialistic Bill which so affects the rights of private property. However, there is no saying what a Liberal will do to-day. We must really ask the hon. Gentleman if he will give us an explanation of the introduction of the Bill. There have been rumours going about that recent geological investigations have shown the potentiality of great quantities of oil, but we should like to have a little more information on the subject. We naturally do not expect the hon. Gentleman to tell us the exact parts in which these formations are, but he might tell us roughly the square mileage on which they are expected to occur and whether they are in any way comparable with the geological areas in America in which oil has been found, on whose advice the Bill has been introduced, and how it is intended to administer it. If he can give us this assurance, some of us may dislike it a, little less, but we cannot promise other than a vigorous resistance to the Bill in all its stages.

5.27 p.m.


I am afraid I am still unconvinced that there is any existing private property in petroleum and gas in its natural state. I am, therefore, entirely unconvinced that this Bill confiscates any private property in any shape or form. On the other hand, there seems to me no doubt that, the Committee having been against me on my Amendment and putting in these first words of the Clause, we are going to create in the Crown a property in petroleum and gas in its natural state by these words. It is a thing, of course, that the Legislature is perfectly entitled to do and, if I may take an analogy from the fish that come and go in the territorial waters around our coast, His Majesty has private property in whales and sturgeons caught within those waters and always has had. Other people have private property in such fish as they can make their own within those territorial waters. It would be competent for us to say, "We hereby vest all private property in every fish that is caught within those territorial waters in His Majesty." By these words we are doing something very analogous to that, if we thought fit to do it. We are creating a right of property in this petroleum and gas in the Crown, with the result that any person who in fact comes into possession of any petroleum or gas henceforward comes into possession of the private property of the Crown. It is obvious that in the course of mining or of sinking wells for water a landowner, with no intent at all to find petroleum or" gas, may come across it. That difficulty has been foreseen, and we find in Clause 10 (2): Nothing in this Act shall be construed as imposing any liability on any person where in the course of mining or other lawful operations petroleum is set free. That is a provision on which I shall have something to say later on. But the real objection to the Clause is this. At At present a person can apply under the Coal Mines Working Facilities Act for the right to work coal under someone's land—a right which to my mind is one of the greatest invasions of private property that this House has ever passed. If he makes his case before the Railway and Canal Commission, he says, "I have a right to get coal under any town in the country. I have to pay compensation. One of the reasons I have to pay compensation is the fact that the owner in that residential area is at law the owner of the coal which lies under that particular house." What we are saying by this Bill in its present form is that when a licensee, by arrangement or by application to the Commission, endeavours to obtains the terms upon which he is to be entitled to sink, search for and get petroleum, he shall not have to pay any compensation to the owners of the surface from under which he gets the petroleum, or that the only person to whom he shall have to pay compensation shall be the Crown. That is the difference which the wording of the Clause, as it is now proposed, really means. We are going to make it possible for a licensee to get exactly the same powers as if the Amendment in my name had been accepted, but there would have been no question to determine as to whether he would have to pay any compensation to the owner of the surface because in fact he was going to get petroleum from under that surface. He has to pay compensation for all disturbance of the surface, and presumably if, as a result of getting petroleum, a subsidence follows, I have no doubt that the same sort of thing would be in the Order as the Railway and Canal Commission put into Orders to-day when they deal with that kind of matter. The only difference the Bill is making is that there shall be no compensation payable to the owner of the surface for his theoretic ownership of the petroleum underneath.

In practice there is not very much in it, because I do not believe that it would be possible, in the case of petroleum, for any particular owner of the surface to prove that the petroleum came from under his particular surface. I believe that if you sunk a bore and petroleum came up, the owner of the surface could prove obviously that some petroleum came from under that surface, but as to the people all round from under whose land the petroleum was drawn into the bore hole, I do not believe any action could ever prove that in fact it was petroleum from under their land which was coming up through the bore. It would be one of the most difficult things for any owner of surface rights to start to prove. It is because of that difficulty that in the past we have had to legislate. As long ago as 1891 as regards brine we had to pass an Act by which there should be compensation awards to the owners of the surface in respect of subsidence caused by people taking brine from under their surface. It was a very complicated machinery, but it was in order to deal with the particular difficulty where, by well or bore hole, you get up something which is ascending in a fluid state from under each bit of surface, and where no owner of surface can possibly tell or prove that it has come from land under his control. These difficulties will be got rid of by this Bill. I am very sorry that the wording of my Amendment has not been accepted, because I feel that if it had been it would have been impossible for hon. Members to take up the attitude that the first words of the Clause confiscate private property and vest it in the Crown. I stick to my view, which is, that all this Bill is doing is to vest in future in the Crown property in all petroleum as soon as it is found, and, in those circumstances, I am not going to vote against the Clause.

5.36 p.m.


I am afraid that I shall have to vote against the Clause. On the Second Reading the Bill was well received by the Socialists and by the Liberals. There are only a few of them here at the moment so they cannot speak with a very unanimous voice, but I am certain that their battalions are waiting downstairs to rush to the aid of the Government in case the few Conservatives who are left here should win on this Clause. If the Bill had been brought in by the last Government there would have been a three-line Whip to the Conservative party. There would have been no question about it. There would have been a very different tone in the Smoking Room and in the House about "This accursed Bill the Socialists are bringing in." The word "confiscation" would have been used, and the Chief Whip would have been running round saying, "You cannot stay away. You will have to be here and vote against this Bill." I see no reason why, because the present Bill has been brought in by a National Government, I should change my principles, and I am afraid that I cannot do so. I look upon the Bill as entire confiscation. People in the old days used to buy land because it could not run away. Now if you have a drop of oil under it it may run—no one knows where. I should like to know from the Secretary for Mines, or the President of the Board of Trade, why the Bill has been brought in? We have asked in vain. What is the hurry for the Bill? Who is behind it, and what result do the Government expect to get out of it? Do they expect to get oil? Are they keeping something up their sleeve? That is the sort of information we want. We shall go into the Lobby because I do not believe we are going to be told. We ought to receive a little better treatment than those people who follow the Government nearly the whole time simply because something happened. I cannot see any reason why we should not be told. Is it a secret and something the Government are ashamed of telling us? I am certain that a great many people outside the House know it, and why should not we? I hope that we shall be given some information.

5.40 p.m.


I speak on this subject as a landowner and not as a Liberal, because I suppose that this is one of the subjects upon which Liberals have not had fixed principles, whatever they may be. I hope that the country will not judge all the landowners by the examples to which we have listened to-day. Speaking as a landowner, I think that the Bill is just, reasonable and perfectly fair, and I hope that it will go through.

5.41 p.m.


I am glad to hear the representative of the landowners, but I think that the Government, by their draftsmanship of the Bill, have themselves to blame for very much of the criticism which has been brought against them. I see no reason why it should have been so stated. Is it the case that if it had not been for crude oil they need not have stated the case so crudely as it is stated in the first sentence of Clause 1? I agree entirely with my hon. and learned Friend the Member for Ashford (Mr. Spens). I admit that there is at present no private proprietorship in oil any more than there is in the air. You extract nitrogen from the air, but it is not until you have done it that it can be private property, as in the case of the sea, salmon and whales belong to the Crown or private owners. It is very unfortunate that the position has been stated in the Bill in this way, and it looks as if there is to be some confiscation, but really it is not so. The hon. Member did not speak about this fact. The Crown have for hundreds of years granted estates in land. This position would be more analogous if the hon. Gentleman were to go to Moss Brothers and buy a secondhand coat and find a purse in it. It would not be his.

Here is a certain subject which, as far as we know, was never contemplated as existing. The Government propose to take the title to it, but I wish they had done this in a little more delicate and, perhaps, circumlocutory fashion. I think that hon. Gentlemen have a real grievance. It is one thing to say that there is nothing in it, but the fact that the Government should take the trouble to pass this Bill and dispose as lightly of the criticism of some of their supporters, makes one wonder what is at the back of it. Why are we not told? We all know—those of us who happen to possess Bibles and read them—the parable of the man who bought a field from another man with a great treasure in it. He knew all, but the seller did not, and while it was a fair price for the field, it was unfortunate the seller did not know anything about it. The buyer got the treasure. He might reasonably have thought that it was ordinary business, but I think that it was a bit sharp. Is there a pearl of great price in this particular Bill? Is there some enormous pool of petroleum which the Government want to find? All the Governments as landowners are the most harsh and cruel in all possible ways? There is nothing so wicked as Government Departments. You can deal with a commercial company, because you know that it is out to make money, and that is an ordinary aspiration with which one can deal on reasonable and logical grounds. You can say to them, "Do not press us too hard. You do not want to kill the goose that lays the golden egg." But a Government Departmust must have no bowels whatever, and no mercy.

Look at my hon. Friend who is smiling so pleasantly charging 2d. for a seat in the Government parks sublet to private contractors. There you have all the vices of nationalisation and all the evils of private enterprise joined together, and you pay 2d. if you sit down. For those who propose to exploit oil—if there is any—there can be no worse fate than the fact that they will have to deal with a Government Department. I do wish the right hon. Gentleman would take us into his confidence and tell us who is or what is behind this Bill. Whe are the people who are to get the oil? Who are going to be the oil lords, the Rockefellers of England? This Bill does excite alarm in the bosoms of loyal supporters of the Government and of innocent and upright landlords. The Government ought to tell us, for their own credit and because of the feeling in the country, what this Bill really means. I do not intend to vote against it, but I have the gravest possible feeling of concern that a Bill of this kind should be introduced, and we should not know really the reason for it.

5.46 p.m.

The DEPUTY PRESIDENT of the BOARD of TRADE (Mr. Runciman)

I beg leave to remind the Committee that we are dealing with a business proposition, and that one of the considerations in every business proposition is that we should not scare away from the area of business those on whom we may have to depend. Let me make it quite clear where the Government stand in this matter, and why they took up this question at all. It is not a new departure on our part. It comes in regular succession from other Measures of a somewhat kindred nature. The Bill itself has been known to the country now for three months, and during that time is has been debated at considerable length in the other place. It was conducted through the other place by one who will probably not be suspect by my Noble Friend the Member for West Derbyshire (Marquess of Hartington). He is not a member of the Liberal party and never has been. I refer to Lord Londonderry, who is as good a Conservative as my Noble Friend, and it was my Noble Friend Lord Londonderry who conducted the Bill through the House of Lords.

We have been asked: What lies behind the Bill? Who has inspired it? What is the conspiracy that is going on of which the Government have given us no information? There is nothing more of that nature to be found in the Bill than you find in the Budget of every year. Does any hon. Member who has been here for any length of time imagine that for one moment the Chancellor of the Exchequer would get up at this Box and say: "Before I altered the Sugar Duties, I consulted so-and-so. Before I altered the Silk Duties, I took the advice of the Silk organisation"?


He did not con-consult the distillers when he altered the whisky tax.


My right hon. Friend the Chancellor of the Exchequer would not give away even a distiller. Objection is taken, apparently, to our having obtained information from any source whatever, except from my Noble Friend and those who have some knowledge of the getting of oil. Why should we come here to the House and say: "We have been told by so-and-so; we have been approached by this company, that company and the other company. We have taken the advice which has been given to us by great corporations." One reason why we do not say that, is that it would not be true. We have not taken the advice of great corporations. We have not asked private individuals who have some knowledge of the getting of oil and the organisation of companies to draft this Bill for us. I say without the least reserve that nothing in the inception of this Bill need cause the most squeamish Member of this House a moment's loss of sleep. Everything has been perfectly straightforward and above-board, but I am not going to tell my hon. Friends, for their amusement, who may or may not have been consulted.

I noticed that my Noble Friend made reference to the fact that we had sought advice from him. Perhaps he will allow me to say that his advice was not very valuable, and that if we have had to go elsewhere for technical advice, it was his fault and not ours. He was not much guidance. What were the institutions from which we ought to have obtained guidance, according to my Noble Friend? I took down the names of some of them. He spoke them very rapidly and the list was long. The Geological Society of London. Had we consulted them? Had we consulted the Institute of Fuel, or the Institute of Mining Engineers, or the Institute of Mining Metallurgy?

Marquess of HARTINGTON

Or the Institute of Petroleum Technology.


So far as I know, we have not consulted any of them. We have many ways of getting information, but we did not think it necessary to go to these technical societies. I can tell my hon. Friends at once that we did not think it necessary to go to any one of them any more than the Chancellor of the Exchequer would have thought it necessary to go to the Statistical Society when he was considering altering the Income Tax, or to the Institute of Hygiene when he was dealing with the Sugar Duty. The fact is that the Government take complete responsibility for everything that appears in this Bill. If they have obtained information, they have obtained it from sources which they can trust. They have done so without any sacrifice of the national interest. I should like it clearly to be understood that, so far as I am concerned, I am old enough in business affairs to know that it never does, either in private or in public, to do anything that is fishy. There has been nothing fishy in regard to this Bill, and I hope that my hon. Friends will now realise that they have gone a little too far in making these hints. One of my hon. Friends has said that there have been discussions and rumours in the Lobby and the Smoke Room. It does not matter where it happened. Whoever makes that accusation ought to come on to the Floor of this House and substantiate it. There is not a word of truth in these suggestions of irregularity.

My Noble Friend also made reference to the delays which had been caused in the exploitation of the oil properties of this country by reason of the fact that we had delayed the final issue of licences. I think he said there were five cases of this kind. Full information was given on this subject, in answer to a question in the House, by my hon. Friend the Secretary for Mines, so that I am giving the Committee what it already knows, but it may be just as well that it should know once more the reasons why the Minister for Mines found it impossible in each of those five cases to tell them to go full speed ahead. I will take them one by one.

Case 1. This was an application to search for natural gas. The conditions to be complied with by persons requiring licences were explained in a letter from the Department on 5th February, 1932. A copy of the latest licence granted was enclosed, but no reply was received. That explains the reason why that licence did not go forward.

Case 2. This was an application to drill for oil. In this case the applicant was acting in partnership with the owner of a small property consisting of a residence and three fields, and he asked for an area of about three square miles. The applicants were told that, subject to compliance with the Department's requirements, the licence would be issued. There were some correspondence and several interviews. At one of these, in June of last year, it was stated that the applicants did not wish to proceed for the present with the application. There was another interview in October of last year, when the applicant stated that the financial interests concerned with him had refused to do anything further until the results of some other investigations that were being made were available. That is the explanation of the second licence not having gone any further.

Case 3. This was an application for a licence over an area of about three square miles. The applicants had acquired rights of entry from the land owner by agreement over a small part of the area. The applicants were not prepared to undertake any drilling operations pending the results of some other investigations they were making. Until they were prepared to do this the Department was not willing to grant a licence—and quite properly. There has been no complaint made against the action of the Department by these applicants. Since then they have proceeded no further with the application.

Case 4. This was an application to drill for oil over two small areas. The applicants were originally informed in April, 1931, through their solicitor, who was also one of the applicants, that, subject to compliance with the requirements of the Department, the Secretary for Mines would be prepared to proceed to issue a licence to the syndicate. The undertaking was dependent upon the Department being satisfied that the syndicate had obtained rights of entry and a lease from the landowner in respect of a portion of the area applied for. We were protecting the interests of the landowner, please observe. The solicitor was subsequently sent to prison for fraud, but the application was renewed by the other applicants. No evidence has been furnished to the Department on the lines asked for, and nothing has been heard from the applicants for a considerable period. Finally, we come to Case 5. This represents a further application from the same applicants as in Case 4, except that this was made after the solicitor had been sentenced. The applicants were given an undertaking similar to that referred to in Case 4. Since February, 1933, nothing further has been heard from them.

That, I think, disposes finally of the five licences for the exploitation of oil in this country that have been held up. Let me now come back to the business proposition by which we are faced. The House will gather, even from the reading of that list of five applications, how difficult the whole question is. There are conditions to be complied with, which must of necessity be complied with if public and private interests are to be properly protected. Furthermore, there are not a very large number of people who are prepared to undertake drilling operations in this country or elsewhere. After all, with such measures as our drills would have to pass through, it is quite possible that as much as £30,000 or £35,000 may have to be spent on a single bore hole. I do not know how much has been spent on the bore holes at present in use in this country, but I should not be surprised to find, if you go down to anything like the maximum depth of 10,000 feet, that £30,000 would not see the operation through. There are very few companies or organisations that are prepared to undertake such an expensive adventure, and it is a great adventure. What we want, and what we hope to get, is a spirit of enterprise among those who will feel that they can safely embark upon expenditure of this nature and do it with prospect of making some profit in return.

I wish the Committee would realise how extraordinarily difficult it is to arouse any interest in anything of this kind, if all the time we are to be told that if we negotiate with an oil company we are doing something wrong. If the Department is to negotiate, it must be trusted by Parliament. If it is not trusted by Parliament, then there must be some change. It is certain that this is the only way in which the transaction can be carried through. If there is any oil, we wish to see it developed. I do not know whether the adventure will be undertaken. If it is undertaken, I do not know by whom it will be undertaken. We are open to receive applications, when this Bill has gone through, from any quarter, from anyone who has the resources, who will comply with the law and who will not only abide by the rulings of the Government Department but will protect the private interests which may be interfered with. I would remind the Committee that we have gone a long way in protecting private interests. Let the Committee look at Clause 3 and they will find on page 3 the most generous terms ever given by way of compensation in any Act of Parliament.


What sort of compensation?


Compensation for amenities and the acquisition of surface rights.


The right hon. Gentleman has not answered my point yet.


I was coming to the attack made upon me by the hon. and gallant Member. It was the kind of attack that I can remember, and if the hon. and gallant Member desires I will come to it at once. He asked how it was that we were giving way to this spirit of confiscation, and he seemed to think that it was entirely due to our political antecedents. Let me tell him that mine are just as honest as his. If I am here at this Box presenting this Bill, it is because I profoundly believe in it, just as much as the hon. and gallant Member believes it is wrong. He is asking for compensation for property which, in the opinion of his hon. and learned Friend the Member for Ashford (Mr. Spens), does not exist. Who on earth would be likely to give compensation for property in oil which does not exist? The hon. and gallant Member says that it is wrong not to give compensation for property which is to be taken away, which, according to the hon. and learned Member, does not exist. The hon. and gallant Member produced an illustration from the racecourse and another from the auction room. I will take the latter. He seemed to think that his illustration of a £200 picture would cover the case. Let me point out that under Clause 3, for the £200 picture, if there were any compensation to be paid, 10 per cent. would be added, and he would get £220; not a bad transaction. He would make a little profit. I do not grudge him the profit under Clause 3, because I think it is only right that the surface owner should be adequately protected, but when he asks that, in addition, we should give compensation for property which does not exist at all, then I say that is really throwing away public money.


Is the right hon. gentleman stating now that it is the definite view of the Government that the hon. and learned Member for Ashford is correct in his interpretation of the law?


I am prepared to accept a considerable amount of what the hon. and learned Member says, although not the whole, and that is the reason why I could not accept the Amendment. On this subject we accept the Bill as it stands and we stand by it; and we shall hope to get the support of the hon. and learned Member.

Lieut.-Colonel ACLAND-TROYTE

Do the Government accept the view that oil under the land does not belong to the owners of the land?


I am not going to be drawn into that discussion. I say emphatically that there is so much doubt about it that it was absolutely necessary to make it clear in this Bill. That is the reason for the Bill. It is because there is this doubt that we have not had more than a trivial number of applications for licences. I am anxious in the public interest that we should have a larger number of applications for the right to bore, and that whatever obstacles are in the way should be removed in the public interest. While safeguarding private rights, I am not prepared to say that public money should be given to individuals for rights which, on the best legal advice, we believe do not exist, and I am not going to do anything which will leave any doubt that as far as the future is concerned the rights of oil are vested in the Crown. I am not going to be led into a discussion on royalties or subjects of a general character, but I should like to say, in conclusion, that we are asking the Committee to pass this Clause, and the House to pass the Bill, because we wish to see the oil industry developed. We believe this is the first step necessary to clear the ground for that development. We wish to see exploration go forward, and, as far as we can, to induce anybody to undertake it, without accepting the invitation of some hon. Members that it should be done by the State. The commercial side of these undertakings can be done as well by private organisations, and the Bill aims at giving private adventure a chance which it has not got now. With that view I, who am not a Socialist and believe in the rights of property, recommend it to the Committee. The noble Lord the Member for West Derbyshire suggested that the Secretary for Mines and myself were, in his elegant phrase, returning like dogs to our vomit. I do not know exactly what he meant. It is not a phrase with which I am familiar, but if in this business we could import an element of dog sense, we should get the Measure through a great deal more rapidly.

6.6 p.m.


The argument of the President of the Board of Trade depends largely on the alleged fluidity of petroleum below the surface. The right hon. Gentleman had been asked a definite question on that point, and has not replied to it. The Government's ease is that petroleum is very fluid and can be drawn from long distances, but, on the other hand, it is said that it only travels short distances below the surface. Therefore, the statement on which the Government base their case is unreliable. Neither the right hon. Gentleman nor the Secretary for Mines is a technical expert on this subject, and when they advance the argument of the fluidity of petroleum, it is only reasonable to ask them to support that statement by telling us the advice upon which they rely for that view. They have been asked to do so, but have not replied. On the other hand, the Noble Lord the Member for West Derbyshire (Marquess of Hartington) has definitely stated that petroleum does not travel long distances, and that a well on one man's land cannot rob petroleum from another man's land for more than a limited area, if at all. If the statement of the Noble Lord is correct, the whole case, or at least nine-tenths of the case, of the Government in support of this Clause falls to the ground. Personally, I have no view as to whether petroleum travels under the surface or not, but we have these conflicting statements. The Government's case is that it does, but their case is not supported by any expert evidence, nor do we know the grounds upon which their opinion is based. I feel that the Government have no case, and I shall certainly vote against the Clause.

6.8 p.m.

Marquess of HARTINGTON

I am sorry to have to press the President of the Board of Trade. I was delighted to hear his explanation with regard to why the five applications have not been granted, and I am puzzled why the Secretary for Mines could not have given me that information months ago; it would have settled the question once and for all. I am delighted to have heard such a commonsense answer. But I received no reply to my question as to why this expropriation is necessary. A licensing system gives the Government full opportunities to exercise control over the development of an oilfield, and I feel bound to ask what is the reason far believing that a policy of expropriation is going to facilitate the search for oil. The licensee, the company, will still have to negotiate with every landowner on whose land it proposes to erect works or sink a well, or run a pipe line. The number of landowners with whom negotiations will be necessary is not diminished. Royalty, presumably, will be charged by the Government for the oil produced, and from my experience Government Departments will not err on the side of making too small a charge. Indeed, the Government will be in a position to charge a far higher royalty than the private owner. There is to be one monopoly for the whole of the oil in England; the Government are to be in the position of being able to charge a high royalty. I cannot understand why this expropriation is required. It will hinder rather than help the exploitation for oil. I do not know of any landowner who is rich enough to resist the development of oil on his land, if he receives a royalty. Without exception, landowners in England would be delighted to have an oil company to sink wells, if they have an interest in the oil, but without exception landowners will fight every inch of the way if they are to get the compensation suggested by the Bill, that is, to be recouped the actual financial loss they suffer plus 10 per cent. To that extent the position will be far worse than it is under the existing law. I do not know why a licensing system is not sufficient, and why the Government want these expropriation proposals. It would be desirable to make the licences terminable in certain conditions. That has been a defect in the past. It may be undesirable to grant a licence to a company of doubtful financial standing and thus tie up the production of potential oil supplies. In my view the Government have all the control which is necessary by a system of licences without requiring the expropriation measures of the Bill.

6.14 p.m.

Lieut.-Colonel ACLAND-TROYTE

So far the President of the Board of Trade has not given the real reason why the Bill has been brought in at this time. We are getting towards the end of the Session, and I can see no reason why the Measure should not have been brought in 12 months ago, or why it should not be brought in six months hence. There appear to be no prospects for the immediate future. The Government have had a certain number of applications, but there is no reason to suppose that there will be very many in the future. Can the right hon. Gentleman tell us why the Bill is brought in just now? Is it merely to waste the time of the House, or is it brought in in the hope that there will be more licences granted in the future for the right to bore for petroleum? As it is, the Bill is confiscation and nationalisation. I wish the Bill had been brought in by the Socialists. I see on the Front Bench the Minister of Health, the First Lord of the Admiralty, and the hon. and gallant Member for Yeovil (Major G. Davies). I can imagine how they would have opposed such a Bill. They would have wiped the floor with it.

I hope that the right hon. Gentleman the President of the Board of Trade is pleased with the reception that his Bill has received from the Socialist Opposition. The hon. Member for Aberdare (Mr. G. Hall) said he agreed with the principle of the Bill, and the hon. Member for South Bradford (Mr. Holdsworth) said the policy of the Bill was entirely a Liberal policy. It is nationalisation and confiscation, and as such it is a Socialist policy. I ask hon. Members who are here as Conservatives to realise that if they vote for the Bill they vote for confiscation and nationalisation. The lawyers of the House, most of whom are now absent, have been trying to get round that fact. They say it is not nationalisation, but they have tried to alter the wording of this Clause. No matter how they quibble about it, it is nationalisation and confiscation. Every Conservative ought to oppose the Bill.

6.16 p.m.


I cannot let the observations of my hon. and gallant Friend the Member for Tiverton (Lieut.-Colonel Acland-Troyte) pass unnoticed. When I saw this Clause for the first time I confess that I did not much like the look of it, because those of us who were returned to this House to support the National Government had occasion to say many times on the platform very strong things about suggestions for nationalisation. But when we come to examine this Clause and when we examine the facts about this particular class of commodity, which we suspect is under the ground though we are not quite sure about it, and when we know that there is at least a grave doubt as to what the true legal position is with regard to this inchoate right of property, we have to consider whether we are really and truly doing something which, although it may be quite exceptional, is not giving service to the doctrine of nationalisation.

I confess that when I had heard the arguments during the Second Heading Debate I began to see that there was a great deal in this particular problem which necessitated exceptional treatment. That being so, I want to appeal in my turn to my hon. Friends who act with me in a great many of these matters, those members of my own party who came originally to a view of this Clause based on previous political leanings and orientation, to consider whether they are not now possibly being misled into voting against this Bill because their prejudices are rising superior to their examination of the facts and circumstances of the industry. I say that with great deference. I hope my hon. Friends have attempted

to pay the same attention to this problem as I have done. I shall regret it if, as a result of rival examinations by members of the same political school of thought, we ultimately find ourselves arriving at totally different conclusions. But, approaching this question with some independence of thought and with some fear lest the Government might be doing something which would drive a breach into those principles for which I was returned to this House, and having made my examination, it seems to me that the Government have come to a right conclusion. But perhaps it is just as well that it should be made plain to the Government by their supporters that, having come to that conclusion, we are anxious that it should be equally clear that we are dealing with this particular topic because it is an exceptional matter and not because we are being in the least forced either from our political views or the pledges which we gave to our constituents in the last election and the preceding election.

Question put, "That the Clause stand part of the Bill."

The Committee divided: Ayes, 243; Noes, 30.

Division No. 313.] AYES. [6.21 p.m.
Acland, Rt. Hon. Sir Francis Dyke Critchley, Brig.-General A. C. Grattan-Doyle. Sir Nicholas
Adams, D. M. (Poplar. South) Crooke, J. Smedley Greaves-Lord. Sir Walter
Adams, Samuel Vyvyan T. (Leeds, W.) Crookshank, Capt. H. C. (Galnsb'ro) Grenfell, David Rees (Glamorgan)
Agnew, Lieut.-Com. P. G. Croom-Johnson, H. P. Griffith, F. Kingsley (Middlesbro', W.)
Ainsworth, Lieut.-Colonel Charles Cross, R. H. Griffiths, George A. (Yorks, W. Riding)
Albery, Irving James Cruddas, Lieut.-Colonel Bernard Groves, Thomas E.
Allen, William (Stoke-on-Trent) Culverwell, Cyril Tom Gunston, Captain D. W.
Anstruther-Gray, W. J. Daggar, George Hacking, Rt. Hon. Douglas H.
Aske, Sir Robert William Davies, David L. (Pontypridd) Hales, Harold K.
Astor, Viscountess (Plymouth, Sutton) Davies, Rhys John (Westhoughton) Hall, George H. (Merthyr Tydvil)
Baldwin, Rt. Hon. Stanley Dawson, Sir Philip Hamilton, Sir H. W.(Orkney & Zetl'nd)
Banfield, John William Denville, Alfred Hammersley, Samuel S.
Barclay-Harvey, C. M. Despencer-Robertson, Major J. A. F. Hanbury, Cecil
Barrie, Sir Charles Coupar Dickie, John P. Harris, Sir Percy
Batey, Joseph Dugdale, Captain Thomas Lionel Harvey, George (Lambeth, Kenningt'n)
Beaumont, Hon. R.E.B. (Portsm'th, C.) Duggan, Hubert John Haslam, Henry (Horncastle)
Bennett, Capt. Sir Ernest Nathaniel Duncan, James A. L. (Kensington, N.) Haslam, Sir John (Bolton)
Blindell, James Edmondson, Major Sir James Heneage, Lieut.-Colonel Arthur P.
Boulton, W. W. Edwards, Charles Herbert, Major J. A. (Monmouth)
Bower, Commander Robert Tatton Entwistle, Cyril Fullard Hills, Major Rt. Hon. John Waller
Bowyer, Capt. Sir George E. W. Essenhigh, Reginald Clare Holdsworth, Herbert
Braithwaite, J. G. (Hillsborough) Evans, Capt. Arthur (Cardiff, S.) Horsbrugh, Florence
Brocklebank, C. E. R. Evans, David Owen (Cardigan) Hudson, Capt. A. U. M. (Hackney, N.)
Brown, Ernest (Leith) Foot, Isaac (Cornwall, Bodmin) Hume, Sir George Hopwood
Buchan, John Ford, Sir Patrick J. Hurst, Sir Gerald B.
Buchan-Hepburn, P. G. T. Fraser, Captain Sir Ian Inskip, Rt. Hon. Sir Thomas W. H.
Campbell, Sir Edward Taswell (Brmly) Fremantle, Sir Francis James, Wing.-Com. A. W. H.
Campbell-Johnston, Malcolm Galbraith, James Francis Wallace Janner, Barnett
Caporn, Arthur Cecil Ganzoni, Sir John Joel, Dudley J. Barnato
Cazalet, Thelma (Islington, E.) Gardner, Benjamin Walter Jones, Sir G. W. H. (Stoke New'gton)
Chamberlain, Rt. Hon. N. (Edgbaston) George, Major G. Lloyd (Pembroke) Jones, Henry Haydn (Merloneth)
Chorlton, Alan Ernest Leofric George, Megan A. Lloyd (Anglesea) Ker, J. Campbell
Clarry, Reginald George Gilmour, Lt.-Col. Rt. Hon. Sir John Kerr, Hamilton W.
Cochrane, Commander Hon A. D. Gluckstein, Louis Halle Keyes, Admiral Sir Roger
Colvllie, Lieut.-Colonel J. Goff, Sir Park Knight, Holford
Conant, R. J. E. Goodman, Colonel Albert W. Lamb, Sir Joseph Quinton
Cook, Thomas A. Gower, Sir Robert Law, Sir Alfred
Cooke, Douglas Graham, D. M. (Lanark, Hamilton) Lawson, John James
Copeland, Ida Graham, Sir F. Fergus (C'mb'rl'd, N.) Leech, Dr. J. W.
Cripps, Sir Stafford Granville, Edgar Leighton, Major B. E. P.
Leonard, William Morrison, William Shepherd Skelton, Archibald Noel
Levy, Thomas Muirhead, Lieut.-Colonel A. J. Smiles, Lieut.-Col. Sir Walter D.
Lewis, Oswald Munro, Patrick Smith, Sir J. Walker- (Barrow-in-F.)
Liddall, Walter S. Nation, Brigadier-General J. J. H. Smith, Sir Robert (Ab'd'n & K'dine, C.)
Lindsay, Noel Ker Nicholson, Godfrey (Morpeth) Smith, Tom (Normanton)
Lister, Rt. Hon. Sir Philip Cunliffe- North, Edward T. Somervell, Sir Donald
Little, Graham-, Sir Ernest Ormsby-Gore, Rt. Hon. William G. A. Southby, Commander Archibald R. J.
Llewellyn-Jones, Frederick Orr Ewing, I. L. Spender-Clay, Rt. Hon. Herbert H.
Lloyd, Geoffrey Owen, Major Goronwy Stanley, Rt. Hon. Lord (Fylde)
Loftus, Pierce C. Patrick, Colin M. Storey, Samuel
Logan, David Gilbert Peake, Osbert Strauss, Edward A.
Lumley, Captain Lawrence R. Pearson, William G Sugden, Sir Wilfrid Hart
Lunn, William Penny, Sir George Thomas, Rt. Hon. J. H. (Derby)
Mabane, William Perkins, Walter R. D. Thomas, James P. L. (Hereford)
MacAndrew, Lieut.-Col. C. G. (Partick) Peters, Dr. Sidney John Thomson, Sir Frederick Charles
Mac Andrew, Capt. J. O. (Ayr) Petherick, M. Thorne, William James
Macdonald, Gordon (Ince) Peto, Geoffrey K.(W'verh'pt'n, Bilston) Thorp, Linton Theodore
McEntee, Valentine L. Pickering, Ernest H. Tinker, John Joseph
McEwen, Captain J. H. F. Procter, Major Henry Adam Tree, Ronald
McLean, Major. Sir Alan Pybus, Sir Percy John Tufnell, Lieut.-Commander R. L.
McLean, Dr. W. H. (Tradeston) Ramsay, T. B. W. (Western Isles) Wallace, Captain D. E. (Hornsey)
Macmillan, Maurice Harold Ramsbotham, Herwald Wallace, John (Dunfermilne)
Magnay, Thomas Rathbone, Eleanor Ward, Lt.-Col. Sir A. L. (Hull)
Mainwaring, William Henry Rea, Walter Russell Ward, Irene Mary Bewick (Wallsend)
Maitland, Adam Reid, James S. C. (Stirling) Warrender, Sir Victor A. G.
Manningham-Buller, Lt.-Col. Sir M. Rickards, George William Watt, Captain George Steven H.
Margesson, Capt. Rt. Hon. H. D. R. Ropner, Colonel L. West, F. R.
Marsden, Commander Arthur Runciman, Rt. Hon. Walter Whiteside, Borras Noel H.
Martin, Thomas B. Russell, Alexander West (Tynemouth) Whyte, Jardine Bell
Mason, Col. Glyn K. (Croydon, N.) Russell, Hamer Field (Sheffield, B'tside) Williams, Charles (Devon, Torquay)
Mayhew, Lieut.-Colonel John Ruthorford, Sir John Hugo (Liverp'l) Williams, Edward John (Ogmore)
Meller, Sir Richard James Salmon, Sir Isldore Williams, Dr. John H. (Llanelly)
Mills, Sir Frederick (Leyton, E.) Salt, Edward W. Williams, Thomas (York, Don Valley)
Mills, Major J. D. (New Forest) Salter, Dr. Alfred Willoughby de Eresby, Lord
Mitchell, Harold P.(Br'tf'd & Chisw'k) Samuel, Sir Arthur Michael (F'nham) Wilmot, John
Mitchell, Sir W. Lane (Streatham) Sanderson, Sir Frank Barnard Wilson, G. H. A. (Cambridge U.)
Molson, A. Hugh Elsdale Savery, Samuel Servington Womersley, Sir Walter
Monsoll, Rt. Hon. Sir B. Eyres Selley, Harry R. Wood, Rt. Hon. Sir H. Kingsley
Moore, Lt.-Col. Thomas C. R. (Ayr) Shakespeare, Geoffrey H. Young, Rt. Hon. Sir Hilton (S'v'noaks)
Moore-Brabazon, Lieut.-Col. J. T. C. Shaw, Helen B. (Lanark, Bothwell)
Moreing, Adrian C. Shute, Colonel J. J. TELLERS FOR THE AYES.—
Morrison, G. A. (Scottish Univer'ties) Simon, Rt. Hon. Sir John Major George Davies and Dr.
Acland-Troyte, Lieut.-Colonel Fox, Sir Gilford Scone, Lord
Applin, Lieut.-Col. Reginald V. K. Hunter, Capt. M. J. (Brigg) Somerville, Annesley A (Windsor)
Balfour, George (Hampstead) Lees-Jones, John Touche, Gordon Cosmo
Bracken, Brendan Lennox-Boyd, A. T. Waterhouse, Captain Charles
Broadbent, Colonel John Nall-Caln, Hon. Ronald Williams, Herbert G. (Croydon, S.)
Brown, Brig. -Gen. H.C. (Berks., Newb'y) Nicholson, Rt. Hn. W. G. (Petersf'ld) Winterton, Rt. Hon. Earl
Clarke, Frank Rawson, Sir Cooper Wise, Alfred R.
Colfox, Major William Philip Ray, Sir William Wolmer, Rt. Hon. Viscount
Courthope, Colonel Sir George L. Remer, John R.
Crookshank, Col. C. de Windt (Bootle) Rutherford, John (Edmonton) TELLERS FOR THE NOES.—
Emmott, Charles E. G. C. Sandeman, Sir A. N. Stewart Marquess of Hartington and Mr. Michael Beaumont.