HC Deb 02 July 1934 vol 291 cc1623-85

6.31 p.m.


I beg to move, in page 2, line 3, to leave out "Board of Trade," and to insert: Coal Mines Re-organisation Commission (hereinafter called the Commission '). Now that we have decided the vexed question, "In whom is the ownership of the mineral oil to be vested?" we come to a Clause which is a good deal less controversial. The scheme under the Bill is that the property in the oil is vested in the Crown, but neither the Crown nor the Board of Trade are going to search for or develop the oil. They are going to grant licences to private individuals, and I think most of us, with the exception of those hon. Members who sit on the Socialist Benches, agree that that is a wise policy. Under Clause 2 the licensing authority is to be the Board of Trade and my Amendment is to leave out the Board of Trade and to put in its place the Coal Mines Reorganisation Commission. It may seem strange to hon. Members that I should choose the Coal Mines Reorganisation Commission for this purpose. I should like to make it clear in the first place that what I am seeking to do is to transfer the duty of managing the development of mineral to a body which is permanent, which is expert and which is completely independent of political influence. In the second place, although I might have moved an Amendment proposing a completely new Commission to deal with the ownership of oil, I could not have done so in such a way as to ensure that that commission would be paid as well as a commission of this kind ought to be paid. It would obviously be out of order to put down Amendments which would throw a new charge on the Exchequer.

The Coal Mines Reorganisation Commission possesses the main features of the sort of body which, in my opinion, ought to have the duty of granting licences to search for and obtain petroleum oil. It is independent; it is well paid and it is presided over by a man whom nobody could possibly imagine to be susceptible to the sort of influences which some of my hon. Friends seem to fear. It has the power of taking evidence on commission, and of securing expert advice. I wish to divide my argument into two parts. First I contend that the Board of Trade is a bad authority for dealing with these important and onerous duties. Under Clause 8 of the Bill it is provided that the duties and powers of the Board of Trade under the Act are to be exercised through the Secretary for Mines. I have the greatest confidence in my hon. Friend the Secretary for Mines but I have not such great confidence in his successor whoever that successor may be. One of the great objections to handing over these important duties to the Secretary for Mines is that we cannot get any real continuity of control because Secretaries for Mines are here to-day and gone to-morrow: The evil that they do lives after them; The good is oft interred with their bones. We shall, obviously, have a completely different outlook upon this question of mineral development when my hon. Friend the Secretary for Mines leaves his present office and is moved up higher. I wish the Committee to understand how important the duties, of the licensing authority will be. This is not a matter of issuing a licence to keep a dog or a wireless set or to kill game. These licences, in fact, will be huge concessions. They will be analogous to existing mineral leases containing hundreds of clauses and conditions and each of those clauses and conditions will be the subject of long negotiation. There will be questions as to the duration of the licence or lease, how it is to be terminated, whether there is to be a minimum sum payable even if oil should not be obtained and so forth. There will be questions of royalties, and whether a licensee is to pay a deposit or give security that he is going to take steps to develop the mineral. With all respect to my hon. Friend the Secretary for Mines, the Board of Trade and the Mines Department have no experience of the ownership of minerals. Personally, I should like to see a special commission for this purpose presided over by my noble Friend the Member for West Derbyshire (Marquess of Hartington) at a good substantial salary. You must have continuity of policy if the industry is to be properly planned and developed and you must have independence of political influence.

I think our experience this afternoon and during the Second Reading Debate shows how important it is that we should get a body to grant these licences whose representative would not have to answer questions at the Table of the House of Commons. I do not see how it will be possible for these concessions to be given to the people who are most suitable, if questions are to be addressed to the responsible Minister during the negotiations for a licence which I should imagine—and I have had some experience of negotiating mineral leases—will last for months and possibly years before the terms are finally settled. I do not see how it will be possible for the Secretary for Mines to negotiate with great commercial interests on these matters if at various stages of the negotiations he has to answer in this House the sort of questions which have been put to him during these Debates. Who has applied for a licence? Did Jones apply before Smith or Smith before Brown? What is the state of the negotiations? It is possible that we shall each have a constituent sending us questions to be put to the Minister as to why his application has been turned down.

I do not suppose for a moment that the Noble Lord the Member for West Derbyshire would be prepared in regard to his mineral estates, to state in public the names of the applicants for leases or the reasons why some of them were being turned down. If the State is to be the owner of the mineral oil, I do not see why the State should be put at a greater disadvantage than the private individual in negotiations of this kind. I want the Bill to be a success. It is an experiment. Some of my hon. Friends call it a Socialist experiment, but I am sufficient of a realist to wish to make the Bill a success, and I do not think it fair to allow the State to take over the mineral oils and then to fetter it as it is going to be fettered if the Board of Trade is to be the licensing authority.

Having stated the reasons why I think the Board of Trade would be a bad authority for granting these enormous concessions, I wish shortly to point out why a body like the Coal Mines Reorganisation Commission would be more suitable. You can get for a commission of that kind a chairman who is above all suspicion of party interests or of being "got at" by anybody. You would get continuity of policy and what is more you could dispense with all the ridiculous regulations which are provided for in Clause 6 of the Bill. Whenever a Government Department starts to run anything its first step is to issue a lot of regulations. Under Clause 6, regulations first have to be drawn up as to the manner in which the applications are to be made. A form has to be filled in and the regulations are also to cover the question of fees—

The DEPUTY-CHAIRMAN (Captain Bourne)

I think we had better leave the details of the regulations until we reach the Clause which deals with them.


Perhaps I was going a little too far. My point is that we could give a Commission such as I suggest an absolutely free hand and there would be no need to fetter it with the masses of red tape which are, apparently, necessary to keep a Government Department from overstepping the limits of discretion. I think I have said enough to show that there is sound reason for taking this important duty away from the Board of Trade and handing it over to a body such as the Coal Mines Reorganisation Commission. There is also this advantage in such a course. At the beginning there obviously will not be a great deal of work for such a body to do in this connection. If the oil industry develops its work will grow, and it might then be necessary to set up a completely independent body, but there would be a saving of money if, in the first place, this duty were handed over to the Coal Mines Reorganisation Commission.

6.43 p.m.

The SECRETARY for MINES (Mr. Ernest Brown)

I have listened with very great interest to the speeches of the hon. Member for North Leeds (Mr. Osbert Peake) this evening and on the Second Reading, when he made some more general observations about his desire for an independent and wider organisation, not only for this purpose but for other purposes in connection with fuel. The Committee will have observed that he moved this Amendment to substitute the Coal Mines Reorganisation Commission for the Board of Trade, as the licensing authority under this Measure, on several grounds. First he says that the commission is permanent. That remark applies equally to the Board of Trade.


The Secretary for Mines is not permanent.


That may be so, but the Board of Trade is permanent. Then the hon. Member says he wants expert knowledge in connection with the licensing authority. I have no desire to cast the slightest doubt upon the capacity of the Coal Mines Reorganisation Commission, which is a very able body, but it is a body which is concerned solely with coal and with certain aspects of the coal question only. At the same time I would point out that there is in the Board of Trade at the moment a small but very competent department called the Petroleum Department which has much expert knowledge on this subject at its disposal, and which has been for years advising British Administrations on these matters, and, indeed, giving advice in cases arising all over the world on this very subject. Therefore, if what my hon. Friend desires is expert knowledge, I think he will agree on reflection that he had better leave the Board of Trade as the Department concerned. There are a number of Members who desire, in the early stages at least of the development of this policy, that there should be constructive Parliamentary control. That can only be exercised in two ways: first of all by Parliament having the power in general over the regulations, and secondly by having direct power through the Minister who is responsible at the Board of Trade and who can be called upon to answer for his actions at any time under our Rules. That is not the case with the Reorganisation Commission, which was made by this House an independent body, and, as a matter of fact, the Minister for Mines can only give information as to its operations to this House by courtesy of the commission.

I think, on reflection, my hon. Friend will agree with me that if he desires to get an independent body because he does not want political influence, that desire would be outweighed by the desire in the early stages of development to see that this House has the completest possible control, and that control can be got through a Minister who answers for the Department on the Floor of the House. It cannot be said that the Reorganisation Commission have on this matter any technical or expert knowledge, although it is a very able body on its own subject. Although my hon. Friend in his Second Reading speech was taking a wider view that this, I am now concerned with this problem only, and on consideration of all the issues involved I think the Committee will agree with the Government that in the early stages of the development of policy the granting of the licences should be in the hands of the Board of Trade and of a Minister responsible to Parliament for his actions. I regret, therefore, that I cannot accept the Amendment.

6.48 p.m.


Had it not been for the interjection of the hon. Member for North Leeds (Mr. O. Peake) a moment ago, I do not think I should have spoken on this Amendment, but when the hon. Member interjected that the Mines Department was not there—


I said the Secretary for Mines.


The Board of Trade is there, and the Mines Department is there, and we want it to remain there. The Mines Department on more than one occasion has been threatened—


I think the hon. Member has misunderstood the point. My hon. Friend said that a particular Minister would not be there.


I heard the compliments that were paid to the Secretary of Mines beforehand, but what I am concerned about is not that we should take power away from the Secretary for Mines, but that he should have more power. Those of us who come from mining constituencies believe that we have been and are connected with an industry of sufficient importance to have a Minister and a Department of its own, but it has not got that. The Mines Department is a Department of the Board of Trade, and as such it will have to administer this Bill, and I think I am safe in saying that our party would agree that it is the proper Department to do it. I am rather surprised at the hon. Member for North Leeds wanting to spend money. This is an economy Government, a Government that was going to save money in all directions, and there has been more criticism of the Chairman of the Coal Mines Reorganisation Commission that almost any other individual that I know during the last two or three years.


I am giving him some extra work.


There are doubts about that, as to whether there will be extra work, and it is not always those who do the most work who get the most pay. It is usually the man who does not take off his jacket who gets more money than the man who takes off his shirt, and I am afraid that would apply very much in this case. If this work were added, someone would come along with a desire to give him a largely increased salary because of the imaginary duties which were being put upon him. We should prefer that it remained under the Board of Trade and particularly under the Mines Department, which we want to see remain alive and become stronger, rather than that it should go to an outside body. There is the other point too, with regard to Parliamentary control. After all, in this Parliament we have done a good deal to remove from the rights of Members of this House the power to interfere in matters concerning the people of this country, and I am not inclined to take too much away from the control of the elected representatives of the people. In matters where money is found by the people, the people ought to have some control over it, and so, per- sonally, and I think I can say it for this party also, we oppose this Amendment. We think there will be nothing lost to the nation and to the individual who desires to bore for oil in this country if the matter is put under the Board of Trade, and if I, as a Member of Parliament, and other hon. Members are able to ask questions and know something about what is transpiring in this industry, if it is to be one, in the future. We may become more independent of foreign countries by having a new industry in our own land.

6.51 p.m.


I am glad my hon. Friend the Member for North Leeds (Mr. O. Peake) has brought forward this matter, because it raises a point of rather more substance than the Minister was inclined to concede. It is clear that if we are to embark upon a new policy of State-ownership of mineral oils, there are questions involved as to the best method of the exploitation of this property which is to become national property. There is a widespread feeling that there may be a more efficient exploitation of the property by an ad hoc independent body than by an ordinary Department of State which is formed mainly for administrative purposes. Supposing this House embarks upon a policy for the vesting in the Crown of mineral rights, I do not think this House would wish to allow the Ministry of Mines to be the Department that should administer so vast an undertaking. It would probably feel that we should follow the parallel of some of our recent legislation and set up an ad hoc body for that purpose, perhaps drawing a great deal of its information and expert opinion from the Ministry of Mines, but having some other factors of permanence which are of value. Although I see that in the initial stages there is not likely to be very much done in this matter, this really raises the rather important point for the future, that we should embark upon a sound technique, and there is a great deal in the idea, if the industry develops at all, that the care and granting of leases and the general control of this property, which is now to be vested in the nation, should be carried on by an ad hoc body appointed for the purpose and not by a Ministry that serves the ordinary administrative purposes of a Government Department. Therefore, I hope the Minister will bear in mind the importance of the point made by my hon. and gallant Friend, if he cannot accept the Amendment.

6.53 p.m.


I am sure the Minister will be alarmed to know that in his attitude towards this Amendment he has my whole-hearted support. If this industry is going to develop and if we are going to have oil wells and oil production plants all over the country, I think it is absolutely essential that the licensing of them should be in the hands of someone over whom we have some measure of control. I cannot imagine any worse body, if I may say so without any disrespect to them at all, than the Coal Mines Reorganisation Commission, whose only interest is a mineral interest and who, with all their expert knowledge, are bound to take that view of the question. In considering the granting of these licences, the exploring for this oil, who are the right people to do it, where the licences they are to be given, it is essential to take many factors into consideration, and it is essential that this House should have an avenue for raising its protest if the development of this industry does not go in the way that it likes. Therefore, I am very glad to learn that the Government propose to keep the granting of licences and control over the development of this important industry and over the very drastic powers which they are taking in hands which Parliament is competent to criticise.

6.55 p.m.

Captain M. J. HUNTER

I should like to support very strongly the objection raised by my hon. Friend the Member for North Leeds (Mr. O. Peake) against this matter being put into the hands of a Government Department, but I cannot agree with him that the Coal Mines Reorganisation Commission is the ideal body for the purpose. I would very much rather agree with the hon. Member for Stockton-on-Tees (Mr. Macmillan) that the ideal is an ad hoc body set up for the purpose, and I feel very strongly that dealing with licences and regulations and the whole of what may be a large and growing industry, and a very valuable one to the country, should be outside political hands.


I beg to ask leave to withdraw the Amendment. I should like to have had a more satisfactory reply, and I hope the Minister will consider the matter further before the Report stage.

Amendment, by leave, withdrawn.


The next Amendment which I have considered selecting is that in the name of the hon. and gallant Member for South Leicester (Captain Waterhouse)—in page 2, line 4, after "power," to insert "after consultation with the Treasury and the Minister of Health"—but I should like an explanation of the purpose of the Amendment before deciding whether to select it or not.

6.59 p.m.


This Amendment has nothing to do with the series of Amendments that I put down on Clause 1. It is merely designed to give some consultation with some outside person before these licences are granted. As the Bill stands, the power of the Board of Trade is absolute. The Minister for Mines has told us that there is at the Board of Trade a small Department who are experts in petroleum. I presume that that part of the Department will be transferred to the Ministry of Mines under Clause 8.


It is there.


I am glad to have that statement from the Department. At this moment, as the Bill stands, the Ministry of Mines have an absolute uower to grant a licence under any condition that they like, providing they comply with the Regulations laid down under this Bill, and they have so far—I hope they will not maintain the attitude to the end of the discussion—resolutely refused to admit anybody else to their counsels.


I think I have seized the hon. and gallant Member's point. He wishes to ensure that there shall be consultation with somebody before the licences are granted.


Consultation with one or more Departments.


In that case, I will select the Amendment, but I hope the hon. and gallant Gentleman will keep clear of amenities which arise on a later Amendment.


I beg to move, in page 2, line 4, after "power," to insert "after consultation with the Treasury and the Minister of Health."

I think the point is one of some substance, but it is in no way one of hostility to the Bill. My hostility to this Bill arises on Clause 1, and if the Bill is to be forced on us at all, my object is to improve the remaining Clauses rather than make them unworkable. The Board of Trade are to have the decision as to the granting of licences in their own hands, and be ruled and guided by any considerations which they think should guide them. In taking these powers to themselves, I suggest that they are assuming a very grave responsibility. In the first place, these licences once granted are, as the Bill stands, irrevocable. The Minister will tell me if I am wrong, but I do not think there is any power of ending a licence. It is a tremendous power for one Department to have for all time the right to say that in one district there shall or shall not be the power of prospecting for oil, and, if oil be found, how it shall be developed in that district. No local authority has any right to appear before my hon. Friend before the issue of a licence. When a licence is under consideration, nobody has any access to the Ministry. In the secrecy of his office, the Minister can decide the whole issue. I do not mean to say that the Treasury will not find some means of getting there. From what little I know of Departmental work, I think the Treasury have their scouts everywhere, and a finger in every pie, and if they think anybody is going too far, they put on a thumb-screw and get their way in the long run.

The Minister of Health, however, has no such power. However much one may resent some of the Minister's activities, there are times when he can fulfil a useful function. My right hon. Friends and I had the privilege a few years ago of discussing a Bill, now an Act—the Town and Country Planning Act—under which we allowed the local authorities to plan vast areas. Such areas have been planned, are being planned and will be planned. Moreover, the county councils, county boroughs and local authorities of all sorts have been scheduling areas within their own administrative areas. Some are scheduled for industrial purposes and others for educational purposes. These are matters known to the Minister of Health, and completely outside the ken of my hon. Friend, and I think it is not unreasonable that before we allow him to start away with these very large powers he should give us an assurance that in using them he is going to consult the Ministry of Health. I hope he will not say in reply that it is not necessary, that he has had the power to issue licences since 1918, and has done nothing and is not likely to do anything in the future. If the Bill means anything, and we have not been completely deceived from start to finish, it is going to be used, and we may expect some practical results and some licences to be issued. Let him remember that he has to-day taken away the power of landlords and of local authorities to say anything about the getting of oil in their land. Therefore, I hope he will not say that the provisions of the 1918 Act are sufficient, but will think in his wisdom that it is worth while to consult his right hon. colleague of the Ministry of Health on this point.

7.7 p.m.


I will not conceal from my hon. and gallant Friend that I did get a little amusement on Friday morning when I saw this Amendment in his name, and, reflecting on the past, I wondered why he should select the Minister of Health. I came to the conclusion that he was concerned with amenities which arise, as you, Captain Bourne, rightly said on other Amendments. He also raised two points, with one of which I must ask to be excused from dealing at the moment, because it arises again in a precise form, as to the action concerning publication before the issue of a licence. The real point the hon. and gallant Gentleman makes is that some other department ought to be consulted about the issue of licences. I find some difficulty in following his argument. It will be essential that the Board of Trade shall consult with the Treasury, because under the structure of the Bill the consent of the Treasury is necessary to the financial terms of any licence. That being so, I should have thought my hon. Friend would have had complete confidence in the operations of the two departments together. He brings in the Ministry of Health, but I am afraid he did not make it very clear to me why he selected it, because, unless it has to do with the surface of land and amenities, I do not see what knowledge that Ministry could bring to the problem.

The issue of licences gives no power to enter the land or to work it, but to enter into negotiations with the holder of the surface rights, and, if no agreement is come to, to go to the Court, who will have to take into consideration the very facts he now mentions, the permission to prospect and the over-riding consideration as to whether the grant of a particular right by compulsion is in the national interest. I cannot conceive a clearer-cut draft, designed to secure the very interest my hon. and gallant Friend desires. The Government cannot see that anything more is necessary for the issue of licences than consultation of the Department directly responsible with the Treasury who are responsible for consent to the financial terms. I, therefore, regret that I am not able to accept the Amendment.


In view of the explanation of the Minister, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

7.11 p.m.


I beg to move, in page 2, line 4, to leave out, to grant to such persons as they think fit licences. This Amendment goes to the heart of the Clause. I want hon. Members to realise what we propose to do. We agree that Clause 1 is a practical instalment of Socialism, but it does not go the whole way, and I want to remove any doubt about what Socialism will mean under this Bill. Clause 1 takes powers from one person to hand them over to another. We may as well, while we are dealing with this Bill, ask ourselves whether the people to whom we propose to hand them over have any right to them. I heard the hon. Member for Aylesbury (Mr. M. Beaumont) making statements about what is being said not merely in this House but in other places where he knocks about. If there is any doubt in the minds of hon. Members as to what the Bill means, we should try to settle it, and, seeing that Clause 1 is accepted, we must try to put into the hands of the Board of Trade full power to deal with the whole problem. The Secretary for Mines, replying to the Debate on 19th June, said that the Bill was not Socialism, but was handing over to private enterprise certain conditions by which they could exploit the minerals found. I do not agree with that, because I do not think that we should hand over to any set of people the rights of the community. It is a grave injustice, and we on these benches are fighting for the recognition of the rights of the people. We say that no private individual ought to stand in the way of those rights.

Licences are to be issued in certain conditions. I do not know 'What the conditions will be; we have not been told. Probably they will be explained later. We are to give to a body of people the right to search for a doubtful quantity of oil that may or may not exist. The President of the Board of Trade has told us that to put down a bore-hole of any extent may cost from £30,000 to £35,000. Can we expect that anybody will take out a licence and be called upon to expend that amount of money without some guarantee that, if there is any prospect of losing, they can look forward to the State to help them out? It would be wrong to ask any set of people to search for a certain thing of which there is doubt and to put down a large expenditure of money, and then to expect them to stand to lose on the transaction. One can imagine them coming to the House of Commons later and saying, "We have taken on this proposition, we have failed to find oil, we have spent a certain amount of money, and we want to know what the State is going to do with us?" I can imagine that we shall have trotted out the usual story about poor widows and others who have put their small amount of money into the undertaking believing it was a Government concern, and we shall have to recognise that there is something in that argument, but that is only one side of the picture. When we give out these licences, we shall be expected to see that the people who interest themselves in them do not lose anything.

Suppose, on the other hand, the concern is a huge success. The benefit which ought to come to the community will then largely go into the hands of profiteers.

As the Bill is drawn, we stand to lose in either case. If it be a financial failure, we shall be expected to find money, just as we were for sugar-beet, which among others things, the State has had to back. If the petroleum undertakings are a failure, the State will have to find the money, and, if they succeed and make huge profits, the State will get nothing out of it. We say that the State ought to have the profits. As under Clause 1 we have decided that the State shall take over the mineral rights and that the landowners have no cause to say that they belong to them, we should now take a further step and let the State take full control and work these mineral rights. I cannot understand hon. Members opposite always contending that things that come under a Government Department will fail and putting forward the argument that there is lack of incentive and initiative when an undertaking gets into Government hands. Whenever I hear that argument I wonder why hon. Members put any trust at all in any of the Government Departments. I believe that State officials give their very best to the State and that if we put anything into the hands of a State Department to work it will be worked as well as private enterprise can work it. I believe that State officials give the whole of their abilities to the benefit of the State.

If my Amendment be carried, we shall put into the hands of the State full control of both the ownership and the working of this mineral wealth. In Clause 1 we have taken a step never before taken by the House of Commons and have given the State power to claim the mineral rights of any landowner. We are doing that because we see the signs of the times and the needs of the future. Members of the other House must have recognised that what has happened in the past cannot be allowed to happen in the future, and so they have taken this step forward. We have built a portion of the bridge. It is not yet complete. It has to be completed, but it will not be completed in this Parliament. It will not be completed until we are driven further, until private enterprise stumbles a little more than it has done; and, when we are faced with its utter failure, even this Parliament might do something. By moving this Amendment, we are pointing out to the House of Commons what will have to be done.

Things which are essential to the State cannot in future be left in the hands of private enterprise. Hon. Members opposite have expressed some doubt as to the pressure that may be behind a State Department in bringing in this Bill. I will say for the President of the Board of Trade and those who are associated with him in this Bill that I do not believe there has been any pressure of an underhand kind behind this Bill. I would remove any doubts that hon. Members may still have by saying that the State intends to work this mineral and will not leave it to private people to do it. We have an opportunity here to let the State take a big step forward and to take full control of the oil industry in this country, which I think will operate later on, and so obviate the State being faced with claims for rights where licences have been granted. We are giving the Government the opportunity to-day to do what will later come from a Socialist Government if they do not do it.

7.21 p.m.


I wish to support the Amendment. We on this side have been in entire agreement with the Government up to this point in the Bill, but I am afraid we shall find ourselves in different Lobbies when the Division is taken on this Amendment. Hon. Members opposite want to leave in private hands mineral wealth so far as oil is concerned, and we supported the Government in resisting that contention. We have established the principle that the wealth in petroleum shall be vested in the State. We are now discussing a Clause which suggests that licences shall be given to people who are willing to exploit petroleum. If the President of the Board of Trade will permit me to say this, I was rather astonished at some of the things he said earlier in the Debate. He said that we did not want to scare investors away and that we wanted to encourage people to apply for licences, to bore holes, and to work for petroleum. He then went on to say that in his opinion private enterprise could always deal with commercial subjects better than the State. [HON. MEMBERS: "Hear, hear!"] I knew that would bring forth applause. Hon. Members opposite rather belittle the State enterprises which we have in this country, and I could not help but reflect, when the President said that, on the state of industry in the country under private enterprise. Anyone would think that the coalmining industry was a paying proposition and that shipping was in a flourishing condition.

It appears to be all right for private enterprise to control the basic industries, but the moment they get into difficulties they come along to the State and ask for the taxpayers' money to help them out. We have some of the finest State enterprises in the world in this country. Will anybody deny that the Post Office system in this country is the best in the world. Nobody would deny that except the Noble Lord the Member for Alder-shot (Viscount Wolmer), who wants to hand it over to private enterprise. It could not run the Post Office as well as it is run to-day. If you purchase a railway ticket under private enterprise you are charged in accordance with the distance you travel. The same applies to a tram itcket, but under our excellent postal service we are charged 1½d. for a letter from London to Aberdeen, exactly the same if it goes from London to a place near by. That shows the difference between private enterprise and a State organisation of which I am proud. The Post Office will stand comparison with any in the world for excellence of service and for yielding a substantial surplus at the end of the year.


Is the hon. Member trying to establish that we should be able to get a railway ticket to Aberdeen for the same price as to Charing Cross?


I could see a lot of Scotsmen going to Scotland if they could. There is some virtue in certain of our State enterprises. Hon. Members and ourselves differ on this point. They conscientiously believe in private enterprise, while we believe that certain services should be State owned; and I am giving the postal service as an illustration of successful State enterprise. The Noble Lord the Member for West Derbyshire (Marquess of Hartington), earlier in the Debate, said that if the State had owned the mineral wealth of this country since 1658 the mining industry would not have flourished as it has done during the last 50 years. I should like to cross swords with him on that point. The right to owenship of coal royalties in this country has literally wasted thousands of acres—


We had better not pursue that subject on this Amendment, which is limited in its scope.


I only mentioned that because it had been dealt with earlier in the Debate. There is another side to the question of public ownership. Have hon. Members forgotten the experience of wartime, when the Ministry of Munitions had to be set up because private enterprise was exploiting the State? Hon. Members do not do themselves justice when they criticise the undertakings that are owned by the State. Here is a chance for the State to do something. We have here what is comparatively a new venture. Nobody knows to what extent there is petroleum in this country. There is no question of nationalising a concern, because there is not one in existence, but here we have a chance to set up the machinery to exploit petroleum. We think that will be advantageous to all concerned. On the Second Reading the President of the Board of Trade dealt with the small amount of oil there is in this country and in the Empire. Those hon. Members who have expressed doubts as to why this Bill has been brought in cannot, I think, see as far into the future as the President of the Board of Trade. I believe that sooner or later we shall have to exploit our petroleum resources, and that it will be much better to do it as a State concern. I can see the possibility of a number of companies being set up for speculation—because that 13 what it means—in the working of petroleum, and when they find they have made a bad bargain they may come to the House to ask for a subsidy. I can foresee a number of competing units in operation. The very fact of their being in competition may be disadvantageous and defeat the very object of the Government in bringing in this Bill. We say the Government now have an opportunity, which they ought not to miss, of setting up the machinery to exploit the production of petroleum in the national interest.

7.31 p.m.


I am sure that my two hon. Friends opposite will not expect me to accept this Amendment. It would very much surprise me if that were their expectation. I have no intention of falling into temptation. They think that the nationalisation of the working of oil ought to follow on the nationalisation of the royalties on oil. The two things are entirely different. In the first place, oil is produced and sold in competition with similar fuel from all over the world. My hon. Friend the Member for Normanton (Mr. T. Smith) was very anxious to draw a parallel between the oil business and the Post Office. I would remind him that the Post Office is a monopoly. It has not had to meet competition, especially from outside the country. When he tried to draw a distinction between the way in which we assess postal charges and the cost of railway tickets he was going a little outside the limits of the logic of which he is usually a victim. He wanted to make a comparison between the present charges for railway tickets, which vary according to the distance travelled, and what would happen under a Socialist State, when one would take a ticket like a stamp, and go as far as one pleased for as long as one pleased.




Then why did the hon. Member make the comparison?


I was trying to point out that we have at least one service run by the State which is efficient.


Yes, but my hon. Friend said that he disapproved of the way in which we charge for railway tickets, which vary in cost according to the distance travelled, but he overlooked the fact that Post Office charges vary according to weight. That does not seem to draw a distinction which would justify anybody in embarking upon a State enterprise. My hon. Friend was also very anxious that we should make an experiment with oil. He could not have chosen a more complicated business for the experiment. If it is to be tried at all let it be done in a sphere where it will have some chance of being tried out without too many complications. One of the worst complications is that most of the oil comes from abroad, and that there is very keen competition in the selling and distribution of oil, and as a consumer of oil I am delighted that that should remain so. It is only when we get into the region of monopolies that there can be even an arguable case for Socialism, and we have not yet reached that region in oil, and I doubt whether we ever shall. The Government cannot accept the Amendment, and my hon. Friends I am sure do not expect that we should. All I would say is that I hope they will rest content with having hoisted the flag—we do not ask them to pull it down—and let us pass on to other business.

7.35 p.m.


I am sure the Committee are glad to hear that the right hon. Gentleman still believes in keen competition from abroad in the sale of articles in this country. We are Very glad that he has come back to his Free Trade opinions, because many of us thought he was deserting them even as regards meat, wheat, and products of that sort, and beginning to think that free competition from abroad was not the ideal state of affairs. We shall note those views with great pleasure, and quote them to the Minister of Agriculture next time he is putting forward one of his propositions from the Treasury Bench. The more complex the position is the more necessary it is to have nationalisation. The right hon. Gentleman has been responsible for a scheme for getting oil from coal. In that case has he maintained this free competition in which he so much delights, in order that the oil from coal may meet the free competition of the oil from other places? He has had to make special arrangements in order that that oil can be produced by private enterprise. He has had to pass a special Act of Parliament to give all sorts of guarantees in order to try to induce someone to undertake that work. If it turns out to be a success the profits will not go to the State, who put up the inducement, but to the private capitalists who put up the capital. They put up the buildings, but the State had to put up the fence which was necessary to enable the enterprise to carry on.

As regards the production of oil, how is the private individual going to correlate the price of oil with the price of coal in this country, or with the price of oil from coal in this country? Is the State to stand aside and say, "You compete as much as you like with coal, we are uninterested in the competition between coal and oil in this country, so long as they are both produced here"? Or is the State going to say, "We must control competition between the two commodities. We do not desire to have a great quantity of oil produced and find the coal industry is suffering. We have to keep a balance. We have to see that the oil does not decrease the output of coal but only decreases the amount of oil imported." If the State is to do that it will be a most complicated arrangement as regards duties, price arrangements, price fixation, and all the other matters which necessarily come in when anyone is trying to correlate two commodities which are competitive but not identical in nature. The right hon. Gentleman likes free competition. I do not know in what functional capacity it delights him, but I presume as a consumer and not as a legislator.

If we are to allow an infant industry to spring up, the argument is all in favour of the State taking that industry into its own hands, because in any case the State will have to exert a great number of controls. The question is, Will those controls be exerted so as to produce a profit for the people who are producing the product, the oil, or will they be exerted so as to get the maximum planned consumption of the commodity? There are two rival theories. The right hon. Gentleman says, "I am prepared to step in at this stage and to put on a tariff in order to see that a certain firm to whom I give a licence make a profit. I have to do that because if they do not get a profit production ceases, and I do not get the oil. So I have to plan my legislation to give them a profit." We say, "We do not want you to plan legislation to give people a profit, but to plan legislation to get the production of oil which you desire as a wise planner, having regard to the coal problem and all the problems of the fuel consumption of different industries. If you are going to put this production into the hands of private enterprise you will not be able to do that, because the very fact that you have to plan for profit will deprive you of the power to plan from the other aspect." That is the vital difference between ourselves and the right hon. Gentleman.

There is one other aspect of this controversy on which I have to touch. This Bill is the culmination of the contest which has gone on in this conntry be- tween the industrialists and the land owners since 1834. By gradual stages we have seen a diminution of the power of the landowner and the growing power of the industrialist, and now we have reached the point when, after legislation like the Mining Facilities Act, not even the other place is prepared to stand up for the landowner when the industralist believes that it is in his interest to con fiscate something which the landowner thinks belong to him. In this assembly there are some 29 or 30 Members who still stand in the early nineteenth century—


I hardly think that question arises on this Amendment.


I was just coming to the point. They still stand in the nineteenth century position of believing that the landowner has a right not only to own but also to produce the particular commodity. This Bill contemplates the taking away, the confiscation of the landowners right to own, and the handing over to the industrialist of the right to produce, which is taken away from the landowner, his ownership having been transferred to the State. What we ought to do is not to take a partisan view, and give this right to one class rather than to another class, but to say that, having taken the very wise step of confiscating the landowner's right to own property, we shall put into the hands of the whole community the right to produce and the right to distribute this particular commodity.

Unless one be so blind to the circumstances of the present day as to believe that the profit-earning system is successful, which I do not think anyone can really believe, seeing the vast excess of goods in contrast with conditions almost of starvation, certainly of extreme need, among the people, no one can suggest that it is desirable that a new industry like this should be handed over to the tender mercies of a system which has proved so wholly inefficient in other matters. Here is an opportunity which, but for the lack of flexibility of mind which marks the Treasury Bench, would lead them, would lead any sensible congregation of people, to say, "Having taken the step of confiscation we must logically produce for the benefit of the whole community, and not hand over production to one class for profit."

7.44 p.m.


The Mover of this Amendment and the last speaker have argued that Clause 1 confiscates something from private individuals. I was not present when the hon. Member for Ashford (Mr. Spens) delivered his speech, but he told me something about it. There is no more property in oil under the surface of this country than there is in water under the surface, and there never has been, and therefore if the law declares that the State is to have the title to the oil under the surface the State is taking nothing from anybody, and there is no confiscation. I admit that the Clause is clumsily and crudely drawn. It could have been worded much more delicately, and not in a way that has given opportunity for my hon. Friends to scoff at the Government for having landed us, through that crudeness of statement, into a position in which it is made out that we are engaged in an act of confiscation. I do not want to touch on the comparison with the Post Office, but would merely point out that the President of the Board of Trade summed up the matter at once when he said that the Post Office was a monopoly. I have no hesitation in saying that if it were run by private enterprise proper provision would have been made for the penny post long ago and you could have got a telephone in Glasgow for 25s., whereas it cost me nearly £25. Under private enterprise, 25s. would have enabled the payment of a good dividend. The Government of the day waited until they saw that the telephone service was a sound enterprise. They let private enterprise do the pioneering and spend the money, and then they seized the telephones—for a fairly adequate compensation—and I and other telephone subscribers have been paying ever since. It is the most costly way of running anything.

I sympathise with the hon. Member for Leigh (Mr. Tinker) when he suggests that if private enterprise fails over the production of oil, it will come back to this House and ask for a subsidy or for some of the money which it will have lost. In that case, there will be no stouter opponent than myself, because that is private enterprise ceasing to be private enterprise. The case which the hon. Gentleman put of shipping is quite different. Shipping is fighting foreign Governments who are subsidising, but British shipping is prepared to fight all the mercantile navies in the world on a fair—


I think the hon. and learned Member had better not go into that. I suggest that he keeps to the Amendment.


I would remind the hon. Gentleman that we even had private enterprise in a war, because the most successful naval engagement was that which defeated the Spanish Armada, and it was done by private enterprise. Oil is a very difficult, delicate and skilled enterprise. Even if we got the most skilled civil servants to undertake it, what could they do? They could only employ an oil firm. If private enterprise embarks upon an enterprise of this kind, you must give private enterprise a chance of making a profit. The hon. Member for Leigh suggested that private enterprise would come here for a subsidy or grant if it lost money; I do not believe it for one moment, but if it does, it will not get sixpence of the country's money. The whole difference between private enterprise and State enterprise is that private enterprise riks losing its money. I object to State enterprise, because, if the State goes into a venture and loses money, it says, "What does it matter? We will just put more money on the back of the taxpayer." The shadow of bankruptcy hangs over every private enterprise. That is what stimulates it to economy and to thrift. The difference between private enterprise and State enterprise is that private enterprise hates to give a man the sack, but it always does it when it has to, whereas public enterprise never gives a man the sack, says Professor Peacock, the Canadian economist. That is why private enterprise can make a success and State enterprise will incur the heaviest losses. It is all very well to say, "Take the sugar subsidy," but that is only a relief of taxation. There is no instance of greater wealth and greater skill than in the great oil companies. They are doing the most wonderfully skilled work in the world and they sell their commodity at the cheapest price. Just imagine; you can get a gallon of petrol for Is. 4d., and 8d. of that is tax. There has never been as cheap a means of power as oil, and that is largely due to the immense skill and powers of distribution possessed by the oil companies. Why should we take a risk which may put a new charge on the already heavily burdened taxpayer? Let the men with illimitable resources take the risk.

The State is always saying, "Tails we win, heads you lose, to private enterprise. Take the whisky trade. The senior partner in the whisky trade is the State, Private enterprise takes the loss and the State takes the profit. There is not the lightest reason why any Government, Labour or Conservative, should, if a loss occurs, rob the till of the taxpayer in order to give something to people who will go into this venture with their eyes open, with the knowledge that there is a great risk and that they might lose their money. They ought not to come to the Treasury and say, "We want you to make good our losses." We can pledge ourselves, if there be any lucidity or logic in our understanding, that we shall certainly turn a deaf ear against any suggestion of making good that money. We shall say, "You willingly took this risk and you must abide by the consequences."

7.52 p.m.


I conclude that there is only one reason for this Bill, which is that some time in the future the country may be landed in war and it may be necessary for the Government to take control of the fuel resources in order that they may be used fully to prosecute the war successfully. In this Bill, there is some indication of Socialism, but I do not believe that the Government have any Socialist tendencies. They realise that if a war breaks out it is essential that all the national resources should be controlled in the national interests, and that petroleum, in such an emergency, would play a prominent part. There may be some substance, therefore, in what was said by my hon. and learned Friend the Member for East Bristol (Sir S. Cripps), that the industrialists may be winning the battle which they have fought for the last 100 years over the landlords. That may be the main reason why the Government are bringing in this Bill. They realise that, in the event of war, external supplies of oil may be cut off and it may be necessary to make borings to find out whether we have any petroleum resources. If I am correct in that deduction, the Government should declare that the production of the oil should remain in State hands. The Government have a ready market to hand in the Navy, which is consuming oil. There is no reason why the Government should not consume their own product.

I shall not take up the argument of the hon. and learned Member for Argyllshire (Mr. Macquisten) as to the success of private enterprise, except to say that I am amazed that anyone can talk about the success of private enterprise in this country. Look at Germany, France, or the United States, and at every staple industry in this country. It is patent that the system is breaking from top to bottom. It is a stark fact that private enterprise is crumbling before our very eyes. The Government are obliged by tariffs, restrictions, quotas and trade agreements, and by subsidies of all kinds, to help it to keep on its feet. Nearly every Bill that the Government have brought in has been for the purpose of preventing the collapse of the system.

The Minister has said that we did not expect him to accept this Amendment, but I should have thought that he would do so in order to carry out the logic of the Bill. Oil is now in competition with coal. There is an oil from coal movement in this country. There is no reason why the power resources of the country should not be properly co-ordinated, whether oil, coal, gas or electricity, so that the power problem may be properly assessed. We shall never be able to solve the coal problem until it is treated as a power problem. Only in so far as the State is prepared to establish machinery to deal with the sources of power shall we be able properly to assess the domestic and industrial need for power and to relate it to the productive capacity of power in this country, and to solve the power problem.

If war breaks out, the Government will be compelled to take control, not only of the oil resources, as they propose in the Bill, but of the productive plant that may be established meanwhile, in the same way as during the last War. The Government of the day were obliged to take control of the coal trade and to fix a definite price beyond which industrial coal should not be sold in this country. They placed it under the Coal Control Board.

Marquess of HARTINGTON

They lost the country £40,000,000.


It does not matter. The Government said that we had to accept it and we won the War. We lost £7,800,000,000 in prosecuting the War. We lost £40,000,000 in shipping. We lost £7,000,000 per day in blowing to atoms not only humanity but the production of this country. When we talk of nationalisation, the rentiers are prepared to say that the National Debt shall be a national matter—


If they lent the money, surely they are entitled to it?


One knows that, in commodity value, the investment in the National Debt to-day represents about three times the sterling value of the investment at the time it was made, and they are prepared to take it. That has a great deal to do with the fact that so many of our staple industries are faced with collapse; they cannot maintain these high interest charges and sell commodities at low prices.


I think that the hon. Member is now wandering rather far from the Amendment.


I appreciate that, but I think you will realise that I have been led away by some of the speeches that have been made and by the interruptions that have occurred. At present we have in our Navy an available margin for the consumption of any oil that may be produced here. Obviously the Navy, the Army and the Air Force are national institutions and, having at hand a national institution in the Navy, where there is a ready market, I should have thought that we should have been prepared, in accordance with this Amendment, not only to say to landlords, by virtue of certain enactments, that any petroleum found under their land should become national property, but also to be logical and say that the oil found there should be produced first for the Navy and for any other industrial purposes, and should be properly co-ordinated into the fuel problem of this country. We do not believe, that after the State has entered into a venture of this kind, when plants have been established and they have been found to fail, the State should subsidise those plants as it has subsidised the failures of private enterprise in the case of sugar beet and so on. If any profit is to be made on the plants that may be established, we trust that the profit will go to the State through the State taking complete control of any licences that may be issued for the extraction of oil, in order that the oil may be used for the purposes of the State. For these reasons I support the Amendment.

8.3 p.m.

Lieut.-Colonel ACLAND-TROYTE

It is not often that I agree with anything that is said by the hon. and learned Member for East Bristol (Sir S. Gripps), but I feel that it would be ungenerous if I did not thank him for what he has said in this connection. He has dotted the t's and crossed the t's of a great deal that I and some of my hon. Friends

who oppose this Bill have been saying this afternoon. He has pointed out very clearly that the Government put it on to confiscate the property of certain landowners and to confiscate it without compensation. Socialism means nationalisation and confiscation and that is what this Bill does. That is why we oppose it and hon. Members opposite support it. I should like to ask the Minister if he can tell us how many licences he expects to grant before Christmas. Will it be one, or will it be 100? If he can tell us that, it will give us some idea as to whether there is any good reason for introducing the Bill at this time.

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

The Committee divided: Ayes, 194; Noes, 31.

Division No. 314.] AYES. [8.5 p.m.
Acland-Troyte, Lieut.-Colonel Emrys-Evans, P. V. Llawellin, Major John J.
Albery, Irving James Essenhigh, Reginald Clare Loftus, Pierce C.
Applin, Lieut.-Col. Reginald V. K. Evans, David Owen (Cardigan) Lumley, Captain Lawrence R.
Aske, Sir Robert William Fielden, Edward Brocklehurst Mabane, William
Astor, Viscountess (Plymouth, Sutton) Foot, Dingle (Dundee) MacAndrew, Lieut.-Col. C. G. (Partick)
Baldwin, Rt. Hon. Stanley Foot, Isaac (Cornwall, Bodmin) MacAndrew, Capt. J. O. (Ayr)
Balfour, George (Hampstead) Ford, Sir Patrick J. Macquisten, Frederick Alexander
Barclay-Harvey, C. M. Fraser, Captain Sir Ian Magnay, Thomas
Barrie, Sir Charles Coupar Fremantle, Sir Francis Maitland, Adam
Beaumont, M. W. (Bucks., Aylesbury) Ganzoni, Sir John Makins, Brigadier-General Ernest
Beaumont, Hon. R.E.B. (Portsm'th, C.) Gillett, Sir George Masterman Manningham-Buller, Lt.-Col. Sir M.
Bennett, Capt. Sir Ernest Nathaniel Gluckstoin, Louis Halle Margesson, Capt. Rt. Hon. H. D. R.
Bernays, Robert Goodman, Colonel Albert W. Mason, Col. Glyn K. (Croydon, N.)
Blindell, James Graham, Sir F. Fergus (C'mb'rl'd, N.) Mayhew, Lieut.-Colonel John
Borodale, Viscount Grattan-Doyle, Sir Nicholas Mills, Major J. D. (New Forest)
Boulton, W. W. Greaves-Lord. Sir Walter Morrison, G. A. (Scottish Univer'ties)
Bower, Commander Robert Tatton Greene, William P. C. Morrison, William Shephard
Bowyer, Capt. Sir George E. W. Grimston, R. V. Munro, Patrick
Braithwaite, J. G. (Hillsborough) Guest, Capt. Rt. Hon. F. E. Nation, Brigadier-General J. J. H.
Brass, Captain Sir William Gunston, Captain D. W. Nicholson, Godfrey (Morpeth)
Broadbent, Colonel John Hales, Harold K. O'Neill, Rt. Hon. Sir Hugh
Brocklebank, C. E. R. Hamilton, Sir George (Ilford) Orr Ewing, I. L.
Brown, Ernest (Leith) Hamilton, Sir R. W. (Orkney & Zetl'nd) Palmer, Francis Noel
Buchan-Hepburn, P. G. T. Hammersley, Samuel S. Peake, Osbert
Burgin, Dr. Edward Leslie Hartington, Marquess of Pearson, William G.
Burnett, John George Harvey, George (Lambeth, Kenn'gt'n) Perkins, Walter R. D.
Campbell, Sir Edward Taswell (Brmly) Haslam, Henry (Horncastle) Peters, Dr. Sidney John
Campbell-Johnston, Malcolm Haslam, Sir John (Bolton) Petherick, M.
Caporn, Arthur Cecil Herbert, Major J. A. (Monmouth) Peto, Geoffrey K. (W'verh'pt'n, Bilston)
Carver, Major William H. Holdsworth, Herbert Pickering, Ernest H.
Cassels, James Dale Hornby, Frank Powell, Lieut.-Col. Evelyn G. H.
Cazalet, Thelma (Islington, E.) Horsbrugh, Florence Pybus, Sir Percy John
Cobb, Sir Cyril Hudson, Capt. A. U. M. (Hackney, N.) Ramsay, T. B. W. (Western Isles)
Colfox, Major William Philip Hume, Sir George Hopwood Ramsbotham, Herwald
Conant, R. J. E. Hunter, Capt. M. J. (Brigg) Rankin, Robert
Cook, Thomas A. James, Wing.-Com. A. W. H. Rawson, Sir Cooper
Courthope, Colonel Sir George L. Joel, Dudley J. Barnato Ray, Sir William
Crooke, J. Smedley Jones, Sir G. W. H. (Stoke New'gton) Reed, Arthur C. (Exeter)
Crookshank, Col. C. de Windt (Bootle) Jones, Henry Haydn (Merioneth) Reid, David D. (County Down)
Cruddas, Lieut.-Colonel Bernard Kerr, Lieut.-Col. Charles (Montrose) Reid, James S. C. (Stirling)
Davies, Maj. Geo. F. (Somerset, Yeovil) Kerr, Hamilton W. Remer, John R.
Denman, Hon. R D. Lamb, Sir Joseph Quinton Rhys, Hon. Charles Arthur U.
Denville, Alfred Law Sir Alfred Rickards, George William
Dickie, John p. Leech, Dr. J. W. Robinson, John Roland
Dugdale, Captain Thomas Lionel Lennox-Boyd, A. T. Ropner, Colonel L.
Duncan, James A. L. (Kensington, N.) Levy, Thomas Rosbotham, Sir Thomas
Edmondson, Major Sir James Lewis, Oswald Ross, Ronald D.
Elliston, Captain George Sampson Liddall, Walter S. Ross Taylor, Walter (Woodbridge)
Elmley, Viscount Lindsay, Noel Ker Runciman, Rt. Hon. Walter
Emmott, Charles E. G. C. Little, Graham-. Sir Ernest Runge, Norah Cecil
Russell, Hamer Field (Sheffield, B'tslde) Smith, Sir J. Walker- (Barrow-in-F.) Tufnell, Lieut.-Commander R. L.
Rutherford, John (Edmonton) Somervell, Sir Donald Wallace, Captain D. E. (Hornsey)
Rutherford, Sir John Hugo (Liverp'l) Somerville, Annesley A. (Windsor) Wallace, John (Dunfermilne)
Salmon, Sir Isidore. Somerville, D. G. (Willesden, East) Ward, Lt.-Col. Sir A. L. (Hull)
Salt, Edward W. Southby, Commander Archibald R. J. Waterhouse, Captain Charles
Sandeman, Sir A. N. Stewart Spencer, Captain Richard A. Wedderburn, Henry James Scrymgeour-
Sanderton, Sir Frank Barnard Spens, William Patrick Whiteside, Borras Noel H.
Scone, Lord Stevenson, James Whyte, Jardine Bell
Selley, Harry R. Strauss, Edward A. Williams, Herbert G. (Croydon, S.)
Shakespeare, Geoffrey H. Strickland, Captain W. F. Willoughby de Eresby, Lord
Shaw, Helen B. (Lanark, Bothwell) Sugden, Sir Wilfrid Hart Wise, Alfred R.
Shepperson, Sir Ernest W. Thomson, Sir Frederick Charles Withers, Sir John James
Shute, Colonel J. J. Thorp, Linton Theodore Wolmer, Rt. Hon. Viscount
Simmonds, Oliver Edwin Todd, A. L. S. (Kingswinford)
Skelton, Archibald Noel Touche, Gordon Cosmo TELLERS FOR THE AYES.—
Smiles, Lieut.-Col. Sir Walter D. Train, John Sir Walter Womersley and Dr. Morris-Jones.
Attlee, Clement Richard Grenfell, David Rees (Glamorgan) Mainwaring, William Henry
Banfield, John William Griffiths, George A. (Yorks, W. Riding) Salter, Dr. Alfred
Batey, Joseph Hall, George H. (Merthyr Tydvil) Smith, Tom (Normanton)
Cocks, Frederick Seymour Jenkins, Sir William Thorne, William James
Cripps, Sir Stafford Jones, Morgan (Caerphilly) Tinker, John Joseph
Daggar, George Lawson, John James Williams, Edward John (Ogmore)
Davies, David L. (Pontypridd) Leonard, William Williams, Dr. John H. (Llanelly)
Davies, Rhys John (Westhoughton) Logan, David Gilbert Williams, Thomas (York, Don Valley)
Edwards, Charles Lunn, William Wilmot, John
Gardner, Benjamin Walter McEntee, Valentine L.
Graham, D. M. (Lanark, Hamilton) Maclean, Nell (Glasgow, Govan) TELLERS FOR THE NOES.—
Mr. G. Macdonald and Mr. Groves.

Amendment made: In page 2, line 6, at the end, insert: (2) Any such licence shall be granted for such consideration (whether by way of royalty or otherwise as the Board of Trade with the consent of the Treasury may determine, and upon such other terms and conditions as the Board of Trade think fit."—[Mr. E. Brown.]

8.13 p.m.

Marquess of HARTINGTON

I beg to move, in page 2, line 11, at the end, to insert: Provided that no royalty reserved by way of consideration shall in respect of any year or other period exceed ten per centum of the value in the open market for the time being of the nett production of oil during that year or other period. If the Government had not already conceded the principle that all oil found in this country should be the property of the Crown, no such Amendment as this would be necessary, because any oil that might be found would be reasonably dealt with, as is the case with other minerals, and the oil companies would be able to negotiate on reasonable terms. Now, however, that the Government have acquired for themselves a monopoly in oil, I can see a risk that the grasping policy which has been so often pursued by the Crown in the past might be pursued in this case, and that so high a royalty might be charged as to make impossible the commercial development of our oil resources, the development of which is agreed to be desirable. The President of the Board of Trade and the Secretary for Mines are, of course, familiar with what is happening to-day in the case, for instance, of Regent Street, where the Crown, as the landlord, is behaving as no individual landlord would ever dare to behave. If any London ground landlord thought of rack-renting as the Crown is doing in Regent Street, there would be such an outcry as would make the position impossible. It will be agreed that the Crown as a landlord is almost invariably an unconscionable and harsh landlord.

We think that the figure of 10 per cent., which has been inserted in the Amendment, is a reasonable figure. It is the figure which obtains in most cases in the British Empire where the Crown is the owner of oil, and it is lower than that which commonly obtains in America, where the surface owner receives anything between one-sixth and one-eighth, or occasionally one-tenth, of the value of the oil extracted. Ten per cent. is a reasonable figure which the oil companies can well afford to pay, and we consider that its inclusion in the Bill will ensure that the Government shall not charge so high a royalty as to make the exploitation of oil impossible, while at the same time ensuring that the Crown shall not make a bad bargain.

8.15 p.m.


I am sorry that I cannot accept the Amendment. The Noble Lord will see that the financial consideration that is laid down ought to be a matter for negotiation between the Board of Trade and the licensees and there are objections, especially in the early stages, to fixing the sum. Ten per cent. may be too low in some cases and too high in others. The Department concerned must have regard to the effect that the rate of royalty is likely to have on the development of the oil. With regard to other parts of the Empire, I am advised that difficulties have arisen in relating the rate of royalty to conditions in the open market, because there are cases in which there may be no open market value. This has certainly been the case in Trinidad, where a somewhat similar arrangement obtained at one time. The practice, of course, varies in different countries, and the experience is bound to vary from place to place. Although the Noble Lord has grave objections to the attitude taken by some Government Departments—he will not expect me to be drawn into that discussion to-night—it will be to the interest of all concerned to act in a reasonable manner. It would not be to the advantage either of the licensee or of the Government to fix this rate and to make it depend on the open market value.

8.18 p.m.


The hon. Gentleman must have failed to read the Amendment, or he has misunderstood it. There is no question of fixing the amount. This is a maximum. If he will not accept the Amendment, is he really thinking of charging more than 10 per cent.? Is he going to lay down the principle that above 10 per cent. is a reasonable royalty to be charged either by the State or by a private individual?


The Government are not proposing to charge 10 per cent. It is the Amendment that proposes to do that.


The Amendment does nothing of the sort. There is no question of fixing it. It fixes a maximum. I presume, if the hon. Gentleman is not prepared to accept the maximum, he has it in mind to charge more than the maximum. If he is going to charge more, does he think that it is a legitimate thing for a Government Department to do? Does he really propose, as the Minister responsible for the Department having the control of the greatest mineral products in these islands, to say that a maximum of 10 per cent. is not a sufficient royalty? Surely hon. Members opposite will not sit silent under a suggestion of that sort. It may lead anywhere. If he has any real reasons why he will not accept 10 per cent., they ought to be stated, because the argument that he has just put out can only lead to one conclusion, that he has it in mind that more than 10 per cent. could be charged and that he has a right to charge it. I urge him to reconsider his decision.


The hon. and gallant Gentleman is putting words into my mouth. I made no such statement. I say I am against fixing a maximum of 10 per cent. It is not to be supposed that we have 10 per cent. in our mind until the licences have been drafted and negotiations have taken place.


The hon. Gentleman said that 10 per cent. might be too high or it might be too low. If words have any meaning, when he says it may be too low it means that in certain circumstances he may be charging more than 10 per cent. I should like to know what those circumstances are and what he has in mind. What possible licensed area could deserve more than 10 per cent.? We ought to have a much more categorical answer to the point than has been given.

8.21 p.m.


I think we might ask the hon. Gentleman for a little more lucid explanation why more than 10 per cent. royalty can possibly be considered a proper royalty to charge in present circumstances. After all, if we are nationalising this mineral, it is not unreasonable to ask that the State should set an example to private owners, and more than 10 per cent. royalty seems to me an outrageous charge for the State to contemplate. I think the hon. Gentleman has not fully appreciated that the Amendment limits the amount to 10 per cent. It does not say that 10 per cent. is necessarily the amount that should be charged. I do not think we should allow it to go out that a Government Department considers that it might be reasonable to charge a royalty of more than 10 per cent.

8.22 p.m.


I am very disappointed at the attitude of the Government. No private owner would be able to contemplate a royalty of this nature. One of the dangers that we see in this monopoly is that the Government, having confiscated the rights of the unfortunate landowner, will be able to exploit them for their own benefit. Anyone who has had experience of Crown ownership knows that they are unconscionably harsh and unreasonable. They are the worst landowners in the country. We wish, since these rights are to be taken over by them without compensation, to see that at least they shall be used for the proper development of oil and not merely to obtain increased royalties which private ownership would not be entitled to charge. We do not think it unreasonable, with the knowledge that we have of the way Government Departments work, to ask that some maximum should be put to the royalties that they are capable of charging. I am not even prepared to lay down that it should necessarily be 10 per cent. I do not think, in view of the justifiable anxiety that has been expressed by various people in connection with the Bill, that it is unreasonable that we should demand that the Crown should not lay itself open to the charge of exploitation. We press the Government to reconsider their decision, not necessarily to accept this particular Amendment, but to admit the general principle of fixing a reasonable maximum beyond which the State shall not charge.

8.25 p.m.


I hoped that I had made it clear that that is exactly what the Government have in mind. All that I object to is fixing any definite sum in the Bill. The Government have no figure in mind at this stage at all. I regret if I expressed myself clumsily, and hon. Members did not find my explanation clear. But I object to being told that the Government have been considering the question of 10 per cent. The question of 10 per cent. only arises because it is mentioned in the Amendment.

8.26 p.m.


What my hon. Friend the Secretary for Mines has said does not in the least prevent him from accepting the Amendment. No one will deny that a royalty of 10 per cent. is extrtmely high. The Bill sets up remarkable and dangerous precedents. Having deprived the landowner of any interest in this mineral, the Government now proceed to provide themselves with the right to exploit the licensee. This is a reasonable Amendment, and one which might very well be accepted by the Government.

8.27 p.m.

Marquess of HARTINGTON

My hon. Friend's attitude compels me to press the Amendment. I put in the figure of 10 per cent. in what was intended to be a spirit of sweet reasonableness as the maximum royalty which Parliament would ever contemplate. I do not know whether my hon. Friend knows the facts, but I went into the past history of the thing. In 1917 a Bill somewhat similar to the present one providing for control and not for exploitation was before Parliament. That Bill proposed a royalty of 9d. per ton to be payable into a pool and divided up among the owners of land who were supposed to be interested in oil. The 9d. a ton was less than the 10 per cent. contemplate din this Amendment. I regard 10 per cent. as a very high royalty and as the maximum charge if the new industry in this country is to have any hope of succeeding. My hon. Friend hopes, for reasons not explained to the House, that when the Bill becomes law this provision will help us. I cannot say that it will. You have a Government Department to deal with as well as the landowner. I cannot see his argument. If he is to have the power to charge more than 10 per cent. and he is unwilling to accept a maximum of 10 per cent. the hope of getting this industry started is about doomed. I shall feel bound to press the Amendment.

The hon. Gentleman said that we could rely on the Government department concerned to take a reasonable line. With all respect to the Civil Service—and I have every admiration for it—that is just what we cannot rely upon. An exploiting company wants to get the oil, and the landowner wants it to be got because he is to have some little consideration in return. The civil servant is not going to get anything, and there is no particular reason why he should desire to do business. He has not the imagination and self-interest which I am unrepenrant in believing, is the best basis of all business transactions. We cannot rely upon a Government department taking a reasonable line. It cannot be done. That is the reason I have put forward 10 per cent. as the maximum royalty the Government should charge if there is to be any hope of getting the oil industry developed. If my hon. Friend thinks that that is not enough, I am willing to amend the Amendment and to accept 12½ per cent., although I should regard that as an unreasonably high royalty to charge where you have a new industry and no one knows for certain whether there is

any oil at all and where you may incur great risks when starting to sink the drill hole. Unless my hon. Friend is prepared to accept the figure of 12½ per cent., I shall feel bound to press the Amendment to a Division, because I believe that 10 per cent. of the value in the open market of the net production is an extremely high royalty and one which the Crown could not be justified in accepting.

Question put, "That those words be there inserted."

The Committee divided: Ayes, 22; Noes, 176.

Division No. 315.] AYES. [8.31 p.m.
Acland-Troyte, Lieut.-Colonel O'Neill, Rt. Hon. Sir Hugh Scone, Lord
Applin, Lieut.-Col. Reginald V. K. Perkins, Walter B. D. Somerville, Annesley A (Windsor)
Beaumont, M. W. (Bucks., Aylesbury) Rawson, Sir Cooper Williams, Herbert G. (Croydon, S.)
Colfox, Major William Philip Ray, Sir William Wise, Alfred R.
Courthope, Colonel Sir George L. Renter, John R.
Emmott, Charles E. G. C. Rhys, Hon. Charles Arthur U. TELLERS FOR THE AYES.—
Greene, William P. C. Rutherford, John (Edmonton) Marquess of Hartington and
Hunter, Capt. M. J. (Brigg) Salt, Edward W. Captain Waterhouse.
Lennox-Boyd, A. T. Sandeman, Sir A. N. Stewart
Albery, Irving James Gardner, Benjamin Walter Logan, David Gilbert
Aske, Sir Robert William George, Major G. Lloyd (Pembroke) Lumley, Captain Lawrence R.
Baldwin, Rt. Hon. Stanley George, Megan A. Lloyd (Anglesea) Lunn, William
Banfield, John William Gillett, Sir George Masterman Mabane, William
Barclay-Harvey, C. M. Gluckstein, Louis Halle MacAndrew, Lieut.-Col. C. G. (Partick)
Barrie, Sir Charles Coupar Goodman, Colonel Albert W. Maclean, Nell (Glasgow, Govan)
Batey, Joseph Graham, D. M. (Lanark, Hamilton) Macquisten, Frederick Alexander
Bennett, Capt. Sir Ernest Nathaniel Graham, Sir F. Fergus (C'mb'rl'd, N.) Magnay, Thomas
Blindell, James Grattan-Doyle, Sir Nicholas Mainwaring, William Henry
Boulton, W. W. Greaves-Lord. Sir Walter Makins, Brigadier-General Ernest
Bower, Commander Robert Tatton Greenwood, Rt. Hon. Arthur Mander, Geoffrey le M.
Bowyer, Capt. Sir George E. W. Grenfell, David Rees (Glamorgan) Manningham-Buller, Lt.-Col. Sir M.
Boyd-Carpenter, Sir Archibald Griffiths, George A. (Yorks, W. Riding) Margesson, Capt. Rt. Hon. H. D. R.
Braithwaite, J. G. (Hillsborough) Grimston, R. V. Mason, Col. Glyn K. (Croydon, N.)
Broadbent, Colonel John Groves, Thomas E. Mayhew, Lieut.-Colonel John
Brown, Ernest (Leith) Gunston, Captain D. W. Mills, Major J. D. (New Forest)
Buchan-Hepburn, P. G. T. Hall, George H. (Merthyr Tydvil) Morrison, G. A. (Scottish Univer'ties)
Burnett, John George Hamilton, Sir George (Ilford) Morrison, William Shephard
Campbell, Sir Edward Taswell (Brmly) Hamilton, Sir R. W.(Orkney & Zetl'nd) Muirhead, Lieut.-Colonel A. J.
Caporn, Arthur Cecil Hammersley, Samuel S. Munro, Patrick
Carver, Major William H. Haslam, Henry (Horncastle) Nation, Brigadier-General J. J. H.
Cassels, James Dale Haslam, Sir John (Bolton) Nicholson, Godfrey (Morpeth)
Cazalet, Thelma (Islington, E.) Herbert, Major J. A. (Monmouth) O'Donovan, Dr. William James
Cobb, Sir Cyril Holdsworth, Herbert Orr Ewing, I. L.
Conant, R. J. E. Hornby, Frank Owen, Major Goronwy
Cook, Thomas A. Horsbrugh, Florence Palmer, Francis Noel
Cripps, Sir Stafford Howard, Tom Forrest Pearson, William G.
Crooke, J. Smedlay Hudson, Capt. A. U. M. (Hackney, N.) Peters, Dr. Sidney John
Crossley, A. C. Hume, Sir George Hopwood Petherick, M.
Cruddas, Lieut.-Colonel Bernard James, Wing.-Com. A. W. H. Peto, Geoffrey K.(W'verh'pt'n, Bilston)
Daggar, George Jenkins, Sir William Powell, Lieut.-Col. Evelyn G. H.
Davies, David L. (Pontypridd) Joel, Dudley J. Barnato Pybus, Sir Percy John
Davies, Maj. Geo. F.(Somerset, Yeovil) Jones, Sir G. W. H. (Stoke New'gton) Ramsay, T. B. W. (Western Isles)
Denman, Hon. R. D. Jones, Henry Haydn (Merioneth) Ramsbotham, Herwald
Denville, Alfred Jones, Morgan (Caerphilly) Ramsden, Sir Eugene
Dickie, John P. Kerr, Lieut.-Col. Charles (Montrose) Rankin, Robert
Duncan, James A. L.(Kensington, N.) Kerr, Hamilton W. Reed, Arthur C. (Exeter)
Edmondson, Major Sir James Lamb, Sir Joseph Quinton Reid, James S. C. (Stirling)
Edwards, Charles Law, Sir Alfred Rickards, George William
Elliston, Captain George Sampson Lawson, John James Robinson, John Roland
Elmley, Viscount Leech, Dr. J. W. Ropner, Colonel L.
Emrys- Evans, P. V. Lees-Jones, John Rosbotham, Sir Thomas
Essenhigh, Reginald Clare Levy, Thomas Ross Taylor, Walter (Woodbridge)
Evans, David Owen (Cardigan) Lewis, Oswald Runge, Norah Cecil
Foot, Dingle (Dundee) Liddall, Walter S. Russell, Hamer Field (Shef'ld, B'tslde)
Foot, Isaac (Cornwall, Bodmin) Lindsay, Noel Ker Rutherford, Sir John Hugo (Liverp'l)
Fraser, Captain Sir Ian Llewellin, Major John J. Salter, Dr. Alfred
Fremantle, Sir Francis Loftus, Pierce C. Sanderson, Sir Frank Barnard
Selley, Harry R. Spens, William Patrick Wallace, John (Dunfermilne)
Shaw, Helen B. (Lanark, Bothwell) Storey, Samuel Ward, Lt.-Col. Sir A. L. (Hull)
Shepperson, Sir Ernest W. Strauss, Edward A. Wedderburn, Henry James Scrymgeour-
Shute, Colonel J. J. Strickland, Captain W. F. Whiteside, Borras Noel H.
Simmonds, Oliver Edwin Sugden, Sir Wilfrid Hart Whyte, Jardine Bell
Smiles, Lieut.-Col. Sir Walter D. Thorne, William James Williams, Edward John (Ogmore)
Smith, Sir J. Walker- (Barrow-in-F.) Thorp, Linton Theodore Williams, Thomas (York, Don Valley)
Smith, Tom (Normanton) Tinker, John Joseph Withers, Sir John James
Somervell, Sir Donald Todd, A. L. S. (Kingewinford)
Somerville, D. G. (Willesden, East) Touche, Gordon Cosmo TELLERS FOR THE NOES.—
Southby, Commander Archibald R. J. Tufnell, Lieut.-Commander R. L. Sir Frederick Thomson and Sir
Spencer, Captain Richard A. Wallace, Captain D. E. (Hornsey) Walter Womersley.

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

8.38 p.m.


I beg to move, in page 2, line 11, at the end, to insert: ( ) (a) Every such licence shall contain provisions enabling the Board of Trade to revoke the same (either with respect to the whole of the area to which it relates or any part or parts thereof) if the person holding the licence shall have, in the opinion of the Board, either—

  1. (i) within such period as the board deem reasonable after the grant of the licence failed to take adequate steps (including adequate drilling operations) to search for petroleum in exercise of the rights granted thereby; or
  2. (ii) within such period as the Board deem reasonable after gettable petroleum shall have been found either—
    1. (a) failed substantially to commence the works necessary to bore for and get the petroleum so found; or
    2. (b) in a case where it is necessary for such person in order to exercise the rights granted by the licence to acquire ancillary Tights failed to make application for such rights under section three of this Act.
(b) In this sub-section 'gettable petroleum' means petroleum proved to exist in the area to which the rights granted by the licence extend in such quantities and in such circumstances as to render the same in the opinion of the Board of Trade capable of being got upon economic terms. I hope that this Amendment may be accepted without the heat that has been engendered in some of our previous discussions, because this cannot be described as an attack on Ministers or on Government Departments. On the contrary, it gives them additional powers. As I understand the Bill, once a licence has been given, it is given for always. The object of the Amendment is to give the Board of Trade power, under certain conditions, to revoke licences which have been granted. It is obviously undesirable that if an undertaking believes that there is oil on a site and it obtains a licence and tries to exploit the oil but fails to do so, it is undesirable that they should have a permanent lien on that particular area. The Amendment would give the Board of Trade power in those cases to revoke the licence if within a specified time set by the Board of Trade they do not take steps to exploit the oil, after obtaining the licence, or they fail to get it in sufficient quantities to make it a reasonable business proposition. Then the board should have power to revoke the licence and to grant it if they so desire to other undertakers who may be more competent or more lucky in obtaining oil. It is undesirable that the licence should be held permanently and not exercised either in the interests of the enterprise or of the State interest.

8.40 p.m.


I do not think that there will be any difference of opinion about most of what has been said by the hon. Member. The difference of opinion will be whether we ought to put the proposed words in the Act or whether the matter would not be more properly covered by the regulations to be drawn up. It is the opinion of the Government, after considering the Amendment very carefully, that matters of this kind are much more likely to be effective and to be flexible enough to meet the varying conditions if they are put in the regulations instead of in the Act. It is clear that there will have to be conditions in the licences enabling the board to terminate them if the conditions of the licence are not fulfilled. There will have to be provisions which will require the licensee to take proper steps to carry on the work. In some countries a certain amount of drilling is required to be undertaken or an annual payment made of a sufficient amount to ensure work being done, or there might be a combination of the two. My hon. Friends may rest assured that this point will not be overlooked in the drafting of the regulations, and since the regulations are to come before the House before a licence is granted and the House will be able to express its opinion, I hope they will agree that it is not necessary to put the proposed form of words in the Bill.


May we take it as a definite assurance that the regulations will contain words to this effect?


It is clear that there will have to he conditions in the licences to enable the board to terminate them if the conditions of the licence are not fulfilled, and the points to which I have alluded will be amongst those conditions.


Frankly, my preference is to have these things in the Bill, and then you know where you are, but in view of what the Minister has said I do not propose to press the Amendment, and I beg leave to withdraw it.

Amendment, by leave, withdrawn.

Marquess of HARTINGTON

I beg to move, in page 2, line 12, to leave out "as soon as may be after," and to insert, "before."

This is an Amendment of some considerable importance. It deals with the secrecy with which, under the procedure contemplated by the Bill, these matters will be conducted. As the Bill stands, the negotiations will be conducted in complete secrecy until after a licence has been granted. The object of the Amendment is to make sure that the negotiations shall not be conducted in conditions of complete secrecy, but that neither Parliament, nor the would-be oil developers, nor other persons who are interested, nor the local authorities who may be vitally concerned, shall be in the dark until they are confronted with the fait accompli. Therefore, I move this Amendment and the subsequent ones which depend upon it. It might well be that if Parliament had decided to leave the oil in private hands, the would-be concessionaires would have strong interests and might be deterred from coming forward except under conditions of secrecy. I need not labour that point.

It is obvious that if various owners hold potential oil-bearing land it might be desirable to keep quiet. The company might want the negotiations kept secret because of the risk that another oil company may get to know of them and offer to pay higher royalties, thereby preventing them getting control of the oil fields. But once you have a complete unified control of all the oil in the country which the Bill gives to the Government then nothing whatever is gained by secrecy during the early stages. The whole nation is equally concerned, and it seems to me that there is nothing to be lost by securing the fullest publicity and having the oil put up to the highest bidder, attracting the largest number of applications you can get, and then choose the best. There would be a case for secrecy if oil was not nationally owned, it might act as a deterrent to would-be prospectors; but once oil is nationally controlled it is in the highest degree essential that there should be no secrecy and that the whole matter should be conducted in the light of day. It is in the public interest that the Department which has to grant licences should have the widest possible area of choice and be able to grant a licence to the best person and the best company. I hope the Government will accept the Amendment. I can conceive of no conceivable reason why they should not.

8.47 p.m.


I should like to add one or two arguments to those which have been so ably advanced by my Noble Friend. The only reason why this Amendment might be undesirable would be if the Government have already decided to whom they are going to give these licences, but we have had an assurance from the Secretary for Mines and from the President of the Board of Trade, that no such decision has, in fact, been taken, that they are in the open market If that is the case then surely the more people who know about the matter the more likely you are to get the best terms. If the object of the Government is to safeguard the interests of the State, it is our desire as well, then surely they should try to get the best terms they can. In his Second Reading speech the President of the Board of Trade was most careful to say that he did not want any hole-and-corner business. He said: We do not provide for any hole-and-corner business. If that be so, why does he not give notification? The right hon. Gentleman went on to say: I can imagine no authorities more likely to be trustworthy than those to be found in the principal Departments of State."— [OFFICIAL REPORT. 19th June. 1934; col. 215, Vol. 291.] That is all very well. We all trust the Departments, but when you have new work to do then I think an element of risk enters into it. I should like to read a quotation from a letter written by Mr. Cunningham Craig in 1918, it seems like ancient history, but 1918 is a date very relative to the present discussion because it was just after the passing of an Act granting licences for the prospecting of oil. Mr. Craig was an expert employed by the Research Department of the Ministry of Munitions, and on the subject of petroleum production he said: Unfortunately the Production Department was put into the hands of officials with a very meagre knowledge of the subject, and to that alone the whole mess and muddle is due. I remember the answer which my Noble Friend got this afternoon, when the President of the Board of Trade said that he bad not consulted any of his technical department: Possibly resenting the necessary control by research, possibly from mere ignorance, the production department threw itself into the hands of certain interests, which, rightly or wrongly, believed that the development of a British oil industry would affect them adversely. Representatives of some of these interests co-operated with, or were actually employed by, the Controller of Production, and instead of carrying out the recommendations forwarded to them the officials attempted research work themselves and commenced a course of criticism and obstruction which has lasted almost up to the present. Colliery owners and others who were willing to produce oil by distillation, and were willing to risk their own money for that end, were discouraged or oven deliberately prevented from getting to work. This state of affairs caused great dissatisfaction in many quarters, while precious time was slipping away, and the dissatisfaction was not inarticulate. But something like a conspiracy of silence seems to have been deliberately engineered, possibly to save the reputation of certain incompetent officials, possibly in the interests of established industries that objected to the development of an oil industry not within their control. He proceeds to speak of the very irrelevant answers given to questions in another place on this subject, and says: This obstruction has continued up to the present time. Latterly the excuse given was that intended legislation rendered it undesirable to grant any more licences than had already been granted under the Defence of the Realm Act Regulation. That shows that Government Departments are not infallible. In this case we are starting a new branch, and how does my hon. Friend know that the Department is able to form an opinion as between man and man and company and company? Surely the Amendment is reasonable, and I hope he will be able to see his way to make some concession on this point.

8.53 p.m.


I desire to support the Amendment. On the Second Reading the President of the Board of Trade said: It has been asked that there should be as much publicity as possible given to the issue of these licences. I would point out that of course it is not practicable that there should be publicity before the licences are actually granted. That would lead to all sorts of transactions which would not be fair to the prospective licensee. But immediately the licences have been granted we are prepared to give publicity in the usual way."—[OFFICIAL REPORT, 19th June, 1934; col. 215, Vol. 291.] In the course of this Debate reference has been made to the power which the Board of Trade is taking to entirely override all local authorities in their town planning schemes. There appears in the "Times" this morning a remarkable letter from Lord Rankeillour, who was formerly Mr. James Hope, Chairman of Committees in this House, and in case any hon. Member has overlooked that letter it is worth making a short quotation from it: Secondly, there is no proper provision for the protection either of the local public or individual residents whose amenities and assets may be gravely injured. If once the concessionaires can make terms with the surface-owners, the neighbours will not have a chance of protest. Individuals may, indeed, try their luck at common law in proving specific damage after the event; but the local authority will have no opportunity whatever to fight for their rateable value or the amenities of their area. This is in glaring contrast to the meticulous care taken to give everyone a chance who can show any sort of case of likely injury before a Parliamentary Committee. A very strong case would have to be made out as to why people who live in a certain neighbourhood, individuals and public authorities, are not to have any say before these licences are granted. I have a later Amendment which deals with the question of ratification of the granting of licences, but it may be that the damage will then have been done. There is a very strong case indeed for some opportunity to be given to public bodies and individuals to state their case in this matter. An oil well may irretrievably damage property in its immediate neighbourhood. That may be necessary and inevitable, if you are to have an oil industry, but I cannot but think that in common justice the State should give individual citizens the right of presenting any suggestion as to the way in which this may best be carried out. The prospective licensee is not the only person who is entitled to fair treatment.

8.58 p.m.


I oppose the Amendment, and I hope the Minister will not accept such an unpractical suggestion. As one who has some knowledge of business, I realise that it is impossible for the State or anyone else to carry on any business of this kind if it is to be done in the open. [HON. MEMBERS: "No, no!"] I repeat that you cannot carry on business transactions of this kind in face of the whole world. We shall all require the necessary publicity when the Government have come to a decision, but anyone who has any experience of business will realise that it is quite impossible to do business, to buy or sell or make arrangements in business, if other parties and the whole world are aware of what is taking place.

8.59 p.m.

Lieut.-Colonel ACLAND-TROYTE

I regard the Amendment as of very great importance. I was rather horrified at the remarks of the last speaker, that no business can be carried on in the open, that it is impossible to carry on negotiations with the Government if other people know what is going on. That is the most damning assertion against the proposal of the Bill that has been made. I should be sorry to think that our business men could not carry on their business in a straightforward manner, but have to resort to these methods of secrecy. It must also be remembered that this is the granting of a monopoly. During the Second Reading Debate the Minister was interrupted on this point, and he said: The answer must be obvious in the nature of the problem. I suggest that only prejudice can fail to appreciate that answer."—[OFFICIAL REPORT, 19th June, 1934; col. 307, Vol. 291.] I may be very thick-headed, but I completely fail to see why secrecy should be observed. Surely it is to the advantage of the locality that publication should take place, and it is of advantage to the State. The State has to make the best bargain it can out of what it has to sell. The State has now confiscated the property of the landowner without giving any compensation. Out of that confiscated property it proposes to make a certain amount of money by royalties. We have now to accept that fact, and naturally we want to see the State make the best thing out of it in order to help the taxpayer. We do not want to see these valuable licences given away to the first comer. Therefore publicity is desirable.

9.1 p.m.


I rise to express the hope that the Government listened with attention to the words of the hon. Member for North Bradford (Sir E. Ramsden). If it be necessary that this sort of business should be carried on in the atmosphere of dark secrecy, where the interests involved on either side may be able to carry on their intrigue or bargain without the full light of publicity on them, I hope the Government will remember that they themselves are shareholders in one of the largest of the vested interests which may be concerned, and that their action in refusing the light of publicity may very well be misinterpreted by the country at large. Although as taxpayers we should all be very glad if the Government were to make a good deal for the State by advancing the value of the shares held by the State, we should as decent citizens regret the unfortunate fact that they were able to put through such a deal because they excluded the light of inquiry from their negotiations in order to secure what they were after. There is already a very considerable amount of suspicion as to the object and intentions of the Bill. It would be most unfortunate if those suspicions were aggravated by the thought that an interested party wished to exclude the fullest investigation from its efforts to confiscate the property of citizens of this country.

If we are to have this confiscation at all, it is essential that the confiscation be undertaken for the benefit of the best possible vested interests concerned, although in any case the confiscation is bad. Unless the full details are published before the confiscation takes place, before a licence is granted, it seems to me that many avenues of proper development of the oil supplies of this country will be excluded. It does not seem fair that suddenly, out of the blue, without consulting possible competing interests, without consulting the local authorities, without consulting nearby landowners whose property may be very adversely affected, a licence can be granted. If due publicity is given there is some chance that some of the worst evils of this Bill may be mitigated —there is not much chance, but there is some. I hope that in view of the remarks of the hon. Member for North Bradford, which not only reflect adversely on His Majesty's Government, but reflect ex traordinarily adversely on the general method of conducting business—


I do not wish to intervene again, but apparently the hon. Member has not the remotest idea of how ordinary business transactions are carried out. If he thinks that any transaction, whatever it may be, whether it be the leasing of a right or the sale of goods, can be conducted in the presence of every person who may be curious or may have an interest, he is entirely wrong. It would be impossible to do business under those conditions, and, if the hon. Member had any practical experience of business, he would realise that fact.


I can only reply, first, that this is not ordinary business but a question of granting a monopoly, and, secondly, that if the remarks we have just heard are true I am profoundly thankful that I have no experience of business. But I hope that it may be possible for the Government to set a precedent as regards business transactions in the future and, if those transactions have not been properly conducted in the past—and I should regret to think that such was the case—that they shall in future be conducted at least with what ordinary politicians would regard as common honesty.

9.6 p.m.


I am inclined to support this Amendment especially after the remarks of the hon. Member for North Bradford (Sir E. Ramsden). Listening to this Debate I wondered where it was going to lead us. The Mover of the Amendment and his friends want to destroy the Bill altogether. I only want to destroy Clause 2 and thus we meet on common ground. I hold that whatever is done by the Board of Trade in connection with this matter ought to receive the full light of publicity. It seems to me that under this Clause certian business may be done of which we shall only know when it has been completed. We shall not then be able to do anything to stop a licence whatever conditions may have been attached to it. I am in favour of the light of publicity shining on all these things and especially on the work of 'Parliament and I think that this Amendment is justified. If there is no question of any underhand dealing, such as has been suggested in some of the remarks made by the opponents of Clause 1, we shall be able to see that fact for ourselves. It will be possible to test what is in those statements and I suggest to the President of the Board of Trade that there could be no harm in accepting this Amendment. If a bargain is a fair bargain I cannot see the House of Commons doing anything to upset it. If everything is above board there is no reason why these transactions should be hidden. The public should know what is being done; they should know for themselves that everything is fair and for that reason I shall vote for the Amendment, if it is pressed to a Division.

9.8 p.m.


I want to support my hon. Friend the Member for North Bradford (Sir E. Ramsden). There is no purpose, I suggest, in misrepresenting what he said. The Noble Lord the Member for West Derbyshire (Marquess of Hartington), speaking on another Amendment, declared that one of the things which he wanted to see was the proper and efficient development of this industry and that statement has been reiterated during the discussion. The Noble Lord wanted to know why certain applications for licences had been refused and I think the President of the Board of Trade more than satisfied him on that point. He asked why there had been delay and what encouragement had been given to people to apply for licences. I ask the Noble Lord and the other supporters of this Amendment: Do they think there will be any applications for licences if the public are to know every turn of the negotiations which take place before the licence is granted?


If the hon. Member reads the Amendment he will find that it merely ask that a notification shall be published to the effect that a licence has been applied for and there is no suggestion that the terms of the negotiations should be made public.


That does not meet my argument. The argument of the supporters of the Amendment is that the public should know beforehand, the person who is applying for a licence. If it is proposed to give to the public all round the news that A is applying for a licence, it means that others will get busy to compete against him. My own opinion is that the hon. Member for North Bradford is perfectly correct in what he has said. Even the hon. Member for Smethwick (Mr. Wise) does not invite the public gaze on everything that he does however honourable his actions may be and in business it is obvious that you cannot display to everybody the terms on which you are conducting negotiations on particular transactions. I am surprised at the attitude which is being taken up by hon. Members who have supported so many Government regulations with regard to marketing boards and so forth. Why can they not trust the Board of Trade to conduct these negotiations? When the licence is granted the orders and regulations have to come before Parliament and I suggest to hon. Members opposite that, if they do want to see the efficient development of this industry, they must leave it to the department to negotiate with the best people knowing that there will be every regard for ordinary common decency in the consideration of the applications. There is nothing in the Bill to prevent any person who wants to do so applying for a licence. I resent the misrepresentation which has been made of my hon. Friend's remarks so as to suggest that business is conducted in a hole-and-corner manner or that there is something dirty about it. Everybody with business experience knows that it is impossible to conduct business and at the same time advertise to the world the terms on which it is being conducted.

9.12 p.m.


It appears obvious after the speech of my right hon. Friend the President of the Board of Trade that he will induce the Government to accept this Amendment because, in reply to my Noble Friend the Member for West Derbyshire (Marquess of Hartington), he made great play with the fact that persons had applied for licences who were not at all suitable. If notice is to be given in the "London Gazette" of the names of persons who are applying for licences, at any rate it will ensure that we shall not have crooked solicitors who are liable to be sent to prison holding these licences.

9.13 p.m.


I had no intention of intervening in this Debate until I heard the remarks of the hon. Members for North Bradford (Sir E. Ramsden) and South Bradford (Mr. Holdsworth). I have been in business and my experience in business has been that when you are buying you keep the transaction as dark as possible but when you are selling you blazon it abroad so as to get competition. Evidently things are now conducted differently in Bradford. I found, however, in my experience that Bradford people were extremely able at both buying and selling, and they never talked very much unless they had a lot to sell. But in this case what the Government have to sell is something in the nature of a monopoly. The Government are the only sellers of it. Would that some of the people in Bradford were in that position. They would probably get better prices.

But in this case what the Board of Trade have to do is to get all the competition they possibly can, and they can only get competition by advertising what they have for sale. From the business point of view they should advertise it as widely as possible instead of having hole and corner dealings with someone or other who happens to turn up. They will not succeed in that way unless some "genial juggins" turns up, who is prepared to listen to the sweet-tongued Ministers and pay too much. I think such people will be hard to find. My experience of the oil people is that they are pretty well able to look after themselves. Why not open this to competition? Let all concerned know that there is a wonderful oilfield going, and let them all bid for it. Let it go to the highest bidder. It may do something to take another sixpence off the Income Tax, which people who are being defrauded of their rights would be very pleased to have.

9.15 p.m.


I think the hon. Members for North Bradford (Sir E. Ramsden) and South Bradford (Mr. Holds worth) have not the faintest idea what the Amendment does, and their speeches were totally irrelevant. The Amendment suggests that before a licence is granted it shall be made public. There is nothing in it to suggest that all the negotiations may not be carried through in as secret and hole-and-corner a manner as even the hon. Members for Bradford could wish. It is suggested by the Amendment that as this is a monopoly and a matter which affects not only the buyers and sellers but all the people around, before the final step is taken the other people affected, not in a commercial way, but through amenities and so on, should have the right to put in an objection. I am thankful, after hearing the speeches of the hon. Members for Bradford, that I have not had any connection with business, but in such connection as I have had with it in dealing with land, I have not had the least objection to there being the widest possible publicity. But that has no bearing on this Amendment. We ask that the Board of Trade should arrange their negotiations by any means they like. We are willing to agree that they should adopt the soundest and best methods and make the best bargain they like, but before the thing is fixed and irrevocable, let the other people affected have some chance at least to put in their objections. I do not mean that rival organisations should put in other claims. Let them be ruled out beforehand if the Committee like, but we want the other people who are going to be adversely affected by the development of the industry in the area to have a chance to raise their objections before it is too late.

9.18 p.m.


All that a licence under this Bill is going to confer on an individual or firm is the right to go to a landowner to make arrangements voluntarily. If the landowner and he cannot come to an arrangement, he can make an application to the Railway and Canal Commission, and all persons interested will then automatically be given an opportunity of appearing before the court, and he will have to pay compensation to everybody affected, in accordance with the provisions of the Act. I may be wrong, but I am a little anxious over one thing, and one thing only, and that is whether it is not possible, under Clause 2, under which the Board of Trade will make its own arrangements in selecting the licensee, which will include, I apprehend, what royalty, if any, the licensee is to pay for the property now vested in the Crown, if there be any such property—I am anxious that, that having been done, it may be possible under Clause 2 and Part 1 of the Coal Mines Facilities Act for that licensee then to go to a landowner and enter into a voluntary arrangement for the working of the surface which would not afford an opportunity for those persons in the neighbourhood whose amenities would be affected to come into the bargain at all. I agree that if the landowner refuses and the application has to be made to the court, then the court always gives opportunities for everybody affected to state their objections, and compensation has to be paid, but I do not want to let this Clause pass without making sure that the point that I have mentioned is covered.


It is true that this only gives the right to negotiate, and subsequently to apply to the Railway and Canal Commission, but can the Commission then turn the licence down altogether if they want to?


The first thing that the licensee has to prove to the Railway and Canal Commission is that it is in the national interest that a right should be given to him, and he will not be heard until he has established that particular matter, and unless the Commission comes to the conclusion that it is in the national interest that that licensee should be allowed to make a bargain against the wishes of the landowner, he will get no further, except that he will have the pleasure of being required to pay the cost of the application.

9.21 p.m.


My hon. Friends are very concerned about publicity, but there was no issue to which as much attention was given in another place as this particular issue, and I was rather surprised that the hon. Member for Guildford (Mr. Rhys) should have quoted the letter from Lord Rankeillour. I have no opportunity to quote the speeches made in another place in reply to the Noble Lord. He put his case three times and was answered in another place, and their Lordships' House did not agree with him. Therefore, I was rather surprised to have that letter raised in this Debate. My hon. Friend the Member for Aylesbury (Mr. M. Beaumont) was rather inclined to say that the hon. Members for Bradford had not read the Amendment, and he then proceeded himself to make a speech and to raise an issue that had nothing whatever to do with the Amendment. He talked about amenities and services, which have nothing to do with the Amendment. The issue is perfectly simple. The Government want, as far as they can, to meet the general desire that at the earliest possible moment two things should be known, namely, the name of the licensee and the area affected by the granting of a licence. That is what this Clause does. It provides that as soon as the licence has been granted those two things shall be published in the "London Gazette" and, if Scotland be affected, also in the "Edinburgh Gazette."

Surely it cannot be argued that the Government's intention, which is to secure conditions in which competent and capable persons able to give a unified development to any oil that may be found, to search for it, bore for it, and develop it, would be encouraged to come forward, would be secured if, the moment they came to the Government about a particular area, the name of the licensee on the one hand and of the area on the other were to be blazoned forth to the whole world. As I said in reply to the Noble Lord, the Member for Aldershot (Viscount Wolmer) on the Second Reading, only prejudice could fail to appreciate the difficulty. It is not a question, in searching and boring for oil, in which anybody can go and dig in his back garden; it is a question of whether you will have people coming forward who will have reason to suspect, because they have geological knowledge, after examination of an area, that they would be justified in asking for a licence to develop it. They are getting an opportunity to develop, and that is all that they are getting, when they get a licence. Is it to be supposed that competent and capable persons will be willing to come forward, if this Amendment be carried, and they know that the moment they make their application about a particular area, which their special technical knowledge leads them to believe may have oil underneath it—technical knowledge which they have acquired because they have with them men of great skill in geology, and which they may have spent great sums of money to acquire—is it to be supposed that they will come to let that information be known to the Government, knowing that their names and the area affected will at once be made public? Only prejudice could fail to see that in those conditions you are not likely to get competent and capable persons with real knowledge coming forward to apply for a licence.

The dangers can be put in a sentence or two. The moment the information was published what would happen? The Department would be overwhelmed with applications from people in that area who up to that moment may never have suspected that there was oil within miles, and the Government would be faced with a problem that would be almost insoluble. There would be the danger, which was referred to by the hon. and gallant Member for Hitchin (Sir A. Wilson) in a striking speech on the Second Reading, the danger of offsetting and of speculation, because directly the area was published all kinds of people who might see an opportunity for personal advantage would be seeking to use the machinery of the Bill and to take advantage of the knowledge gained. The Government have considered this very fully and paid attention to everything that has been said and written on the subject and have given it anxious care, and they are quite sure that their fundamental purpose, which is to get the development of such oil as may be in the soil by creditable persons, will not be carried out if publication be insisted on in advance of the licence being granted. They believe that they have gone as far as any possible public or private interest can demand in arranging that publication of name and area shall take place the moment the licence has been granted. For these reasons, the Government cannot accept the Amendment.


Before the hon. Gentleman resumes his seat, can I ask him if in addition to replying to points that have not been raised he will reply to the point raised by the hon. and learned Member for Ashford (Mr. Spens), which the Committee wants to hear cleared up?


I am much obliged, but I understood that point was to be raised on another Amendment, and, without any disrespect, I confined myself to the Major point.

9.28 p.m.


I understand that my hon. Friend the Member for Leigh (Mr. Tinker) indicated that he would support this Amendment. He was speaking I understand for himself. As far as I and those who are acting with me are concerned, we think the case made out in another place and by the Minister for Mines is such that we ought to support the Government and resist the Amendment. I think the Government are taking the right line in dealing with the matter.

9.29 p.m.


I think there is a great deal of substance not indeed in the speech of the Minister for Mines, but in the speech of the hon. and learned Member for Ashford (Mr. Spens), and for that reason we do not intend to press the Amendment to a Division. I would like respectfully to suggest to the Minister for Mines that he might remove the beam from his own eye before worrying about the mote in ours. He entirely misquoted the effect of the Amendment. He spoke with great vigour about people who would not come forward, but he knows that under the Amendment negotiations could go on perfectly well for a long time before it would be necessary to publish. I am sure he did not intentionally misrepresent us, but that was the effect. I appreciate what was said by the hon. and learned Member for Ashford concerning the right and duty of the Canal Commissioners which I had not fully appreciated.

Amendment, by leave, withdrawn.

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

9.30 p.m.


I moved an Amendment earlier which, if carried, would have defeated the purpose of the Clause, and I want to extend the point I made then. I am strengthened in my position by the discussion on the last Amendment. The Secretary for Mines said the negotiations for licences could not be made public because, if everybody knew what was happening, there would be many people clamouring for oil, thus proving that private interests will be watching all the time for what benefit they can get out of it. Anybody who can score at the expense of the Government will be ready to do so. That does support the Opposition point of view by showing that Clause 1 would lead to underhand dealings. When these licences are to be given out, it is not to be as open and above board as one would like. That brings me back to my point that the better thing would be for the State itself to have complete control and work the oil, never mind bringing in any outside influence. If the oil be necessary for the good of the nation—and that is the primary argument—why bother about letting it out to private enterprise? Why should not the State take it over and put it in the hands of the capable people they have at their call. If it be a failure, let the State stand the failure. They will know what they are doing.

The principle for which we stand, of the control and conduct of industry, should not allow us to let this pass without making a protest. If we are taking one step let us take the other, and realise that at some time or other we have to go on to State control of all our industries. This is only one step in that direction, and I raise my voice against this Clause hoping we shall make some impression on the other side. I should like to know what the Noble Lord the Member for West Derbyshire (Marquess of Harrington) will do if we press it to a Division. Is he going to sink his objection to Clause 1? Or will he agree with me and those who want to delete Clause 2 that, if the State takes one part of control, it should take the other? There is something in what has been said, that we are taking away from the landowner and allowing the exploitation to the industrialists who will have little or no risk and the protection of the State. If the commodity they find cannot compete with foreign sources, we shall have the President of the Board of Trade and the Secretary for Mines coming to tell us we must do something to protect the oil interests, that it is so necessary for the good of the nation and so essential for industry that we should have control of petroleum that we must protect this private interest. If there be any loss or gain, I argue that the State should have it. Whichever way it goes it belongs to us. I do not want to shirk my responsibility, but neither do I want to think that I am handing over to industrialists all the chance of making huge profits without any question of loss. Because of that, I am against Clause 2 of the Bill.

9.35 p.m.

Marquess of HARTINGTON

The hon. Member for Leigh (Mr. Tinker) has asked me how I am going to vote on the Clause. I was wondering about that, but, if the hon. Member is going to vote against it, I shall certainly vote for it. I believe, however, even conceding the principle of the Bill, that Clause 2 is a mistaken Clause. The Board of Trade is not a proper authority with which to entrust these enormous powers. I hope that the Committee realises that we are dealing here with very big matters. We propose to give powers to the Board of Trade to grant concessions, which may be of enormous importance, in conditions of complete secrecy, and I take the view very strongly that we are going to give the Government a monopoly of this oil. If we are to give these enormous powers of granting concessions, it ought at least to come before a Committee of Parliament before the concession is granted. We rightly insist on many matters coming before Committees of Parliament, and I believe that, although it is to some extent slow and expensive, the Private Bill procedure in the Committee rooms upstairs is almost an ideal procedure. It is public and it secures an absolutely fair, impartial and thorough examination. If anyone demurs on the ground of cost, I would remind him that we are dealing here with matters immensely more important than very many matters that, as the law stands now, have to go to Private Bill Committees. Borough extensions, extensions of water works, or of railways and canals, are really small change compared with the issues that may be involved in this question of the granting of licences.

I greatly regret that my right hon. Friend would not accept my Amendment to provide for more publicity. I still cannot see why. An hon. Member pointed out how impossible it is to do business in conditions of secrecy. I do a certain amount of the kind of business that the Government will have to do in this matter, that is, the disposing of minerals to the best of advantage, both in the way of leasing minerals and selling timber, and I have never found it necessary to preserve the complete secrecy that is suggested. On the contrary, I secure the widest publicity, and that is the way in which the Government, having something to sell, can get the best price. The Government, however, have decided against publicity, and I hope that before the Report stage they will reconsider redrafting this Clause so as to provide that these enormous powers shall not be vested in the Board of Trade but shall be vested in Parliament. By doing that, I believe that we can secure a really sound, impartial and fair investigation of applications for licences and we can make sure that the licences are granted in such a way as to secure that what is a national asset shall be developed on the widest national lines.

9.39 p.m.


I was pleased that the Noble Lord made the position clear that if my colleague went into the Lobby against the Clause he would vote in favour of it. That makes it easier for us to go into the Lobby against the Clause. It is a far more important Clause and raises a far more important question than the matter about which the Noble Lord spoke, because it raises the question of the granting of licences and the setting up of private enterprise for the production of petroleum. Sub-section (2) of the Clause seems to be very important, for it says: Any such licence shall be granted for such consideration (whether by way of royalty or otherwise) as the Board of Trade with the consent of the Treasury may determine, and upon such other terms and conditions as the Board of Trade think fit. I should like to ask the President of the Board of Trade what is in his mind with regard to the words "or otherwise." Some of us have had a long experience of royalties, and it makes us hate them and want to abolish them as quickly as possible. As we are in favour of abolishing royalties on coal, we do not want to set up royalties for petroleum. This Subsection gives far too much power to the Department. The safest course in connection with this Bill is not to grant any licences at all. An hon. Member opposite referred to the licences as granting a monopoly. We are opposed to any monopolies, and we are opposed to the granting of these licences which destroys the usefulness of the Bill. When it was first brought in we thought that here at last the Government were going to do something useful. We now find that the Bill will be very much like all the other Bills which have been brought in by the Mines Department; it will mean very little. It is not sufficient merely to own the petroleum; it is essential that the State should produce it. In saying that, one remembers that there are Members of the Government who are pledged in favour of minerals being owned by the State, and they have gone to the length of saying that they would even buy out the royalties on coal.

We are glad, at any rate, that the introduction of this Bill prevents the necessity of having to buy out any royalties on petroleum. I would like the President of the Board of Trade to tell us where petroleum is being produced at the present time. The Minister of Mines told us in answer to a question that in 1932, 91 tons of petroleum was produced in this country; in 1931, 87 tons; and in 1930, 60 tons. I am wondering where that has been produced. Will it mean that the Government will have to buy out the royalties or those who are producing this oil before this Bill can be put into force? Whatever the answer, we believe that this Clause gives us a chance of stating the position for Socialism. [HON. MEMBERS: "Oh!"] 'Make no mistake about that. As I have sat here to-day, I have admired the few hon. Members opposite who have put up a fight for private property. I wish that all people would fight as hard for Socialism as they have been fighting to-day for private property. This Clause gives us the opportunity of stating our Socialist principles and saying that we are opposed to the granting of licences that will allow private enterprise to produce oil.

Industry provides an abundance of lessons to warn the House against granting these licences. Private industry will not produce anything unless it can be produced at a profit. If there is no profit there is no production; and so we can take it that if there is going to be no profit when these licences are granted there is going to be no petroleum. The Government must have had some information, must have had something at the back of their minds, when they brought in this Bill. They must have believed that there is petroleum here, and in that case, I take it, they want petroleum produced. Will private enterprise produce that petroleum? What lesson has the extraction of oil from coal for us? That process has not been developed because private enterprise would not put up the capital. That is what we can expect in regard to the production of petroleum.

The President of the Board of Trade has told us that it would cost some £30,000 to sink a bore-hole, and hon. Members behind him said that it would cost much more. Is there any likelihood of private enterprise finding that amount of money for the sinking of a bore-hole unless it is absolutely certain that an enormous profit can be made? If the Government want petroleum, then the State ought to produce it. I submit that this Clause gives to the Department far too much power in the granting of licences, because the time will come, and it may be before many years are past, when there will be a majority in this House that will socialise all the minerals and give us State enterprise in the production of petroeum, coal and all the other minerals. The working classes, realising the failure of private enterprise, will say that the State must not only own but produce these things. I shall have the greatest pleasure in going into the Lobby against the Clause.

9.49 p.m.

Lieut.-Colonel ACLAND-TROYTE

The hon. Member for Spennymoor (Mr. Batey) seems to think that boring for petroleum is such a risky venture that it ought to be taken on by the Government and not by private enterprise. In that case the taxpayers would bear the losses. That is a very useful indication of what we may expect from Socialism. However, I did not rise to talk at large about Socialism and Nationalisation, but only to ask the right hon. Gentleman one question. We do want to know why this Bill has been introduced at the present time.


That question cannot possibly arise on Clause 2.

Lieut.-Colonel ACLAND-TROYTE

I was going to ask whether the right hon. Gentleman would say how many licences he expects to issue before Christmas, whether he expects to issue one or 100. That would show whether there is any real reason for this Clause to be passed or no reason, and whether the time of Parliament is being unnecessarily occupied.

9.50 p.m.


I rise to commend to the notice of the Committee the inexorable logic of the hon. Member for Leigh (Mr. Tinker), who quite reasonably and justly, from his own point of view, is opposing the inclusion of this Clause. As a sincere Socialist he sees no reason why this first instalment of Socialism should not be carried one stage further, but I think it is only fair that those on this side who disapprove of the Bill should make it quite clear that they are supporting—speakinfi, probably, only for myself—this Clause on the ground that if we are to have any instalment of Socialism in our time we prefer that it shall be as small an instalment as possible. Therefore we are not prepared to join with the hon. Member for Leigh, though we appreciate his motives and his logic, in voting against this Clause, because it is at least less Socialistic, though not very much less Socialistic, than what he has suggested.

One of the points raised by the hon. Member for Spennymoor (Mr. Batey) deserves a little examination before the Committee finally decide on this Clause. In Sub-section (2) it is stated that a licence shall be granted: For such consideration (whether by way of royalty or otherwise). I gather from the hon. Member that although he is opposed to royalties in principle he would like to make quite certain that if licences are granted the State shall at least get something, and that therefore some sort of royalty is essential. The words to which he objects are "or otherwise," and there I find myself in agreement with him. If we are handing out one landowner's property to a commercial concern without any compensation to the landowner other than for the disturbance of his site value, I think it is only fair that somebody should have something out of it other than the commercial concern, and if the landowner, who I think is really entitled to the royalty, is not to get it I would like to ensure that the State should get it.

I am not sure that the hon. Member will entirely agree with me when I put this point, because he reminded us that certain Members of the Government had pledged themselves to the total nationalisation or confiscation of all mineral rights in this country. That may be true, but it was tactless for the hon. Member to dig up past history in that way. If Members of Governments or of the Opposition are to be reminded of their utterances as far back as the year before last politics becomes an almost impossible profession, and I hope he will not press his point about the previous possibly injudicious utterances of Members of the Government, of which I am certain they have sincerely repented and which I am sure they will not repeat. I hope that he and the hon. Member for Leigh, although they were quite justified in dividing against the Clause, will check their passionate desire to push the Government further than they mean to go, if only out of consideration for those suporters of the Government, to whom he paid a very kindly tribute in his speech, who are endeavouring to hold them back. Undoubtedly there will be a time in the future—I hope in the very distant future—when the two hon. Members will be able to push the rock downhill as fast as they can push it. I appeal to them, in the meantime, not to press a Division on this Clause, because the Clause will be theirs to play with in due course. I beg they will not make efforts to play with it before that is absolutely necessary.

9.56 p.m.

Mr. D. D. REID

If you are proposing to give anybody a long lease, you have to give a free hand. If hon. Members opposite happened to be Members of a Socialist Government, they would find that the Minister who was exercising such powers would be very chary of doing so unless he were given a free hand. As for these unfortunate words, I suggest that the hon. Members are obsessed with leases, which are almost like royalties. There may be cases when it is thought more desirable to reserve payment for the lease in a certain number of gallons or drums of petroleum. That is not an unusual thing in a lease with regard to tin mines at the present moment.

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

The Committee proceeded to a Division.

Captain AUSTIN HUDSON and Major G. DAVIES were nominated as Tellers for the Ayes, but there being no Members willing to act as Tellers for the Noes, The CHAIRMAN declared that the Ayes had it.