COAL MINES BILL.

HC Deb 28 March 1934 vol 287 cc1986-2038

Order for Second Reading read.

3.27 p.m.

The SECRETARY for MINES (Mr. Ernest Brown)

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

The Bill to which I have the honour to ask the House to afford a Second Reading has two modest but none the less important proposals. It proposes to amend Part I of the Coal Mines Act of 1930 in two respects—with regard to export coal and to minimum prices. May I make clear to the House that the Bill is not intended to deal with all the flaws discovered in the working of Part I of the Act of 1930, nor is it intended to reopen the main question covered by Part I of that Act? I will, if the House will allow me, state in a sentence or two the problem which is at the root of these schemes of regulation; it is a problem which is being faced in many primary industries, not only in this country but all over the world. I do not think that I can do better than read to the House an analysis made by an important body without particular reference to our own British coal problem, but in reference to the international coal problem as a whole, and as seen by the League of Nations Economic Committee on Coal in 1932. They state the problem in these terms: It is this great disequilibrium between demand and immediately available productive capacity—not between demand and production—that is at once the cause and the measure of the problem. Actual production is never likely to exceed demand by a very large margin. A slight proportionate excess is enough.…to depress prices below a remunerative level, to bring about an accumulation of stocks which will force this tendency further and cause crises and stoppages. But if there were not behind any given excess of production a much larger excess of productive capacity the situation would cure itself by the growth of demand even at the slow rate of the post-War period. It is the fact that there is a large surplus capacity beyond what is being utilised, represented by mines, incurring expenses and ready to work, waiting to absorb and fight for any business new or old, a surplus which it is in the interest of each individual producer to exploit, and to the detriment of producers as a whole to have exploited that is the present source of weakness. Some margin of actual supplies, and of capacity, too, is indeed normal and is required to meet any sudden boom in trade. It is the exag- geration of the margin that has given rise to this problem, and made it so difficult of solution. These words were intended to apply to the general world situation, but they can be applied equally well in particular to the British coal situation, and also can be applied to other primary industries at the present time. The experience of the last three years in working the scheme of the Act of 1930 has brought to light a number of difficulties and flaws. May I detain the House for a moment or two to recall history? It will be remembered that, before the Act of 1932 was passed, the Government invited the views of the Mining Association of Great Britain, of the Miners' Federation of Great Britain, and of coal merchants and others interested in the trade, as to what should be done. It was generally agreed that the schemes of regulation should be continued, with amendments. The Miners' Federation made a list of specific amendments; the Mining Association were quite clear that the Act should be continued, and they set up a committee to consider what amendments were desirable and possible. The situation from the point of view of the Government was stated by my right hon. Friend the President of the Board of Trade on the 30th May, 1932, in these words: One of the reasons why we are proposing to Parliament that Part I should be re-enacted for five years is that for the five-year period it will be possible within the coal trade for due discipline to be exercised, and for some of these irregularities to be brought to an end. The longer the period, the less likelihood there is of these irregularities being tolerated, and the more hope of the industry itself taking a firm hand with the delinquents."—[OFFICIAL REPORT, 30th May, 1932; col. 857, Vol. 266.] Since that time the Central Council have made many efforts in order to deal with some of the admitted difficulties, and their deliberations have made it quite clear that two problems stand out. The first is the problem of prices as between one district and another, and, indeed, as between one pit and another in the same district. The other problem is the problem of the export trade, not merely as export trade, but in its relation to the inland trade. As the House is aware, the Act of 1930 gives to the Central Council of Colliery Owners certain powers with regard to amendments. They may make recommendations to the Government if they think amendments are necessary by a majority, but, in order that such amendments, if approved by the Government, may receive the force of law, it is necessary for them to obtain a majority of 85 per cent. in the Central Council. That is provided for in Clause 16 of the central scheme, and it should be noted that each executive board has one vote for every ton of annual output of the district. I need not trouble or weary the House with a long discussion of the various attempts that have been made, or with the reasons for the failure to reach agreement at the moment. Suffice it to say for the moment that the President of the Board of Trade, on the 23rd March of last year, stated that: In the view of the Government it is essential that the central scheme under the Coal Mines Act, 1930, shall be amended so as to provide for separate inland and export allocations, and for inter-district coordination of minimum prices. I am informed that the Central Council have prepared certain proposals on these lines, and that these are now before the District Executive boards for their consideration.…but, failing satisfactory assurances from the Council, the Government will take the earliest opportunity of proposing legislation to give the Board of Trade general powers to amend the central scheme in order that these two amendments may be made."—[OFFICIAL REPORT, 23rd March, 1933, cols. 497–8; Vol. 276.] After that statement, the industry asked for a further extension of time, but it has become obvious in recent months that there was little likelihood of agreement being reached. I think that a fair verdict on two years of effort on the part of the central council to obtain agreement on amendments admitted by a majority in the industry to be necessary would be in these terms:

Of all the many proposals discussed for so long with so much patience and ability and so much disagreement by the central council of colliery owners, it can be said that a number of points of objection to the proposals were raised, and therefore the council were not able to recommend the proposals as possible of immediate application.

That could be said of all the varying proposals that have come from varying districts and from varying owners, I think almost without exception. That is due, of course, to varying views—sometimes views varying inside a district, but the main problem is the variation of interests and conditions and views as between the inland districts on the one hand and the exporting districts on the other. Both these sets of districts put their views before me in long memoranda, and they showed quite clearly a conflict of interests and conditions which indicated that there were two problems which were vitally connected—that of the separation of allocations of inland and export tonnage on the one hand, and that of the necessity for a firmer control of prices in the inland market on the other. The problem stated in its simplest terms is that of securing full provision for increased exports without injuring the inland market. Two considerations have overshadowed all others—first, the necessity for making adequate provision for increased exports, through the trade agreements and otherwise, without flooding the inland market; and, secondly, the necessity for a firmer control of the inland tonnage position, to facilitate the co-ordination of minimum prices and consequently to lessen the incentive to evasions. That is the problem as the Government have seen it.

Might I ask the House to direct attention for a minute or two to the reasons why amendments of the Act on these lines are necessary? The first reason is that the schemes under Part I have not been used by the industry to the best advantage; and, in the second place, there is the problem of output regulation in relation to coal for export, which is a very serious one, because it is not merely a problem whether or not there should be sufficient coal for export—it has always been the purpose and intention of the Central Council to allocate sufficient for that; the problem is that no one can guarantee, when an allocation is given for export purposes, that in deed and in fact that allocation will be used for export purposes. The knot of the problem, therefore, is really to be able to secure freedom, or greater elasticity, for export, separation in one form or another of the inland and the export allocations, and a plan which will secure that the inland tonnage is used in the inland market, so that the incentive which now arises to evasions of price—because the inland price is normally higher than the export price—will be lessened. There is, of course, also the basic fact that the home market is more lucrative, as I have hinted, than the export market, and these temptations to evasions arise.

Part I of the Coal Mines Act, 1930, conferred on the coal industry unique powers, which should have been used to improve the financial position of the industry. A day or two back I was rereading the speech of my right hon. Friend the Member for Darwen (Sir H. Samuel) on the Second Reading of the original Bill, and I noticed the very confident prophecy on his part that the result of the Bill would be a rise in the price of coal. That has not happened. The most that it can be said has happened is that a fall in the price of coal has been prevented—no mean advantage to the industry as a whole and especially to the men in the industry—but the confident prophecy that it would lead to a rise in price has not, in fact, been made good by the experience of the last three years.

The fact is that these powers have not been used as wisely as they should have been in the interest of the industry as a whole. Instead of improving the condition of the industry, they have, up to the present, only served to prevent its financial position from becoming worse. While to some extent the colliery owners have been at fault in their administration of the schemes, some owners have evaded its provisions. A year ago I gave a long list of these evasions. I notice that in a pamphlet by the Miners' Federation they have taken the list without acknowledging the source. I am, therefore, flattered. [An HON. MEMBER: "The list was not original!"] The composition was quite original. It has never been made before in that form. The hon. Member might as well say that a new novel casting old facts in a new form is not original, but he is in error there. Some owners have evaded its provisions, but it is only fair to admit that in part the trouble has been due to imperfections in the schemes themselves. Part I was surprising and experimental legislation with politics, economics and industry interrelated. This Act is an illustration, in fact, of the new forces to be met and conquered in the 20th century. Politics, economics and industry cannot be separated to-day into watertight compartments and some risks have to be undertaken in the new situation. The mind which evolves easy generalisations has a simple task, the critical mind has a harder task, the constructive mind applying practical remedies has the real task, and it is no wonder that schemes of this kind giving a body of colliery owners at the centre major power over the industry, schemes drawn up in terms of every district or amalgamation of districts and to meet the particular and peculiar conditions of those districts, should on examination reveal flaws. Only experience could disclose the respects in which the schemes were faulty or reveal the measure in which varying needs and interests would react on their administration.

Three years have shown us these two principal defects, first that a certain amount of elasticity and freedom in the regulation of output as far as the export trade is concerned is necessary; secondly, that there is a lack of power for the Central Council to co-ordinate the minimum prices fixed in the several districts. The conclusion of the recent trade agreements, with their advantage to the exporting districts, especially in Scotland and on the North Fast coast, has raised the issue in an urgent form, for it is provided in those agreements that, to the extent that Scandinavian consumers can prove that they are unable to obtain supplies of British coal, the guarantees are to be reduced. It is, therefore, more necessary than ever before to secure that there are no shortages of coal owing to the quota system. There have been alleged shortages of course, but of many complaints made to me very few have really been proved. [Interruption.] I should not like to say that, but what has been found in recent months, since the new trade agreements, is a number of cases of delay, and delay is sometimes inimical to the well being of a colliery. Nevertheless, under the present scheme any additional allocation given in respect of export trade must be distributed in the districts by applying a uniform quota to the existing standard tonnage. There is, however, no guarantee that an additional allocation will be used for that purpose. The difference in realisable prices emphasises the need for action in this matter. So long as there is a single allocation which covers even a portion of the export requirements, there will always be a throw back of export coal on the inland market, and the inland price will continue to be depressed so long as the potential output is in excess of the demand, as it must inevitably be in existing circumstances. I need not add that low coastwise freights have accentuated this problem.

With regard to the inter-district co-ordination of minimum prices, up to the present the price provisions of the district schemes have been robbed of much of their value. This has been due in part to the tendency of export coal to seek markets inland by the low level of inland minimum prices adopted by some districts, and in part to ever increasing evasion of minimum prices. The primary purpose for which the schemes were established was the attainment and maintenance of an economic level of prices for coal so far as this could be secured by action within the control of the colliery owners. Price regulation has achieved much but it has been largely unsuccessful in achieving this first aim, mainly because of the inability, under the present scheme, of the Central Council to take any part, first in seeing that the level of minimum prices in the several districts is reasonably uniform and, secondly, in exercising any supervisory functions over the administration of the price provisions of the district schemes. I believe those causes lie at the root of our problem. In fairness to the present executive boards in the districts, I want to say that many of them have been anxious to deal with the problem of evasions, but difficulty arises from the fact that they are unwilling to take isolated action as they fear that other districts may not follow suit. It is difficult for an executive board to maintain its authority when its members know that by reason of their observance of minimum prices they are being under-cut by another district whose minimum prices have been fixed at an unduly low level. At present there is no effective redress against a district which adopts this course. By giving the Central Council, as we propose in the Bill, power to co-ordinate the minimum prices of the various districts and to penalise the non-observance of its rulings much of the suspicion that now exists will disappear, and with its disappearance much of the incentive to evade.

Our problem, then, in the twentieth century as compared with the nineteenth arises in this form. The difficulties that have arisen in the administration of the schemes arise from a fact which can be stated in simple terms. The industry found it easier to exercise self-expression in the nineteenth century than to achieve self subordination in the twentieth. It is a simple statement but it is rooted in a tangle of varying conditions, interests and personal and district relations. I see the hon. Member for Ince (Mr. G. Macdonald) smile. He is, doubtless, thinking that, if you had not competitive private interests, the varying conditions would disappear, but I think he is making a very easy assumption. My own conviction about it is that what you would do if you had a scheme of unification such as is in his mind would be to transfer the apple of discord from the council of colliery owners to the council of the Miners' Federation, because it will not please the miner in Leicestershire to be told that under some allocation made either by a State official or by a public corporation or by some, system of uniform control Northumberland is allowed to send its coal unfairly to the London market and so deprive the Leicestershire miner of what he has looked upon as his normal market. In my judgment it is much too easy and glib an assumption to make that merely by getting rid of private enterprise you will get rid of the varying conditions in the various districts, for there are as grave differences of view in different districts of the Miners' Federation as there are in the different districts of the colliery owners, either in the Central Council or the Mining Association.

Since this Bill received its First Reading I am informed that renewed efforts have been made by the Central Council of colliery owners to secure agreement in the industry to amendments of the central and district schemes to cover the points dealt with in the Bill. I am very glad to hear this. I hope that their efforts will be successful, but, having waited for 23 months to give the industry the opportunity of agreeing, the Government will not face further delay. The Bill must proceed through its various stages in the House of Commons, and with the assent of the House, in the normal way, but I repeat what has been said before on behalf of the Government, that if the industry can produce an agreed scheme adequately to deal with the matters contained in the Bill, the Government will give effect to such an agreement under the Act of 1930, by Order, and withdraw the Bill which is now being considered by the House. But mean- while, and until full assurances can be given by the industry, the Bill must proceed.

Mr. DAVID GRENFELL

On a point of Order. Are the Government quite in earnest over this Bill now? Does the hon. Gentleman address his remarks to the House or to the owners in what he is saying? Why not issue an invitation to the coalowners?

Mr. BROWN

In reply to the point put as a point of Order, I am addressing my remarks to the House, and all remarks addressed to the House are addressed to the country as a whole and to all concerned. The fact is that this statement has been made by the President of the Board of Trade more than once from this Box during the last two years. If the hon. Gentleman reads my statement carefully in the morning he will find that it means what it says, that the Government are in dead earnest in their approach to these two very difficult and complicated problems.

May I ask the House for a minute or two to look at the Bill itself to see what the Bill does and what it does not do. The Bill proposes, first of all, to remove all restrictions on the production of coal for export with regard to quantity, and it then proposes to confer on the Central Council power to co-ordinate the minimum prices fixed in the several districts. In my experience of the last 18 months I have found a great deal of misunderstanding as to the various terms used in the working of the scheme. There is misunderstanding about allocations, standard tonnages, and quotas, and misunderstanding in quarters where it might not have been expected. The House will pardon me if, for a moment or two, as I shall have to refer at some length to allocations, standard tonnages and quotas, if I define them as clearly as I can. Allocation is the amount of production allotted each quarter to each district by the Central Council after consultation with the district executive board in the light of its trade prospects. Standard tonnage is the amount of capacity awarded to each pit or undertaking in a district after past performances and special circumstances have been taken into account. Standard tonnage determines the relation between one pit and another in the same district. Quota is the proportion between allocation and standard tonnage. If the uniform quota for the district, in a quarter, is 80 per cent., and the standard tonnage of a given pit or undertaking is 500,000 tons, its permitted output will be 400,000 tons. The allocation determines the total amount which each district can produce. The standard tonnage decides the share which each pit will have. I make that statement because a number of Members have written to me about the basis of the three years, and the assumption underlying their letters is that the basis of the three years laid down in the Bill with regard to the arithmetical calculation determines the amount of allocation. That is not so.

Clause 1 (1, a) provides for the removal of restrictions on the production of coal for export. Clause 1 as a whole provides for the amendment first of the central scheme. Members will find that Sub-section (1) (a) and (b) deals with the points affecting the central scheme, and Sub-section (2), with its succeeding Sub-sections, deals with the necessary amendments to carry out its purpose of varying district schemes. It will be understood that when the Bill becomes an Act of Parliament the central scheme itself and every district scheme will need amendment. In order to comply with the terms of the Bill the central council will require in future to determine from time to time not the maximum output of the district, but the maximum quantity of coal produced in the district that may be supplied for inland consumption. The central council has no control whatever over the quantity of coal exported by any district. The allocation by the central council for inland purposes must be determined in the same manner as the output allocations are at present made by the council. That is to say—and it is important in considering the Bill—that the inland allocation to a district, after consultation with the executive board for the district, must be determined at such times and for such purposes as the council think fit. But the council must amend the allocation during any period if it is satisfied upon the representations of the executive board for the district that it is necessary to do so in order to meet an increased demand for coal or for any class of coal.

The House will take special note of the fact that the Bill does not prescribe in any way the basis on which the inland allocations are to be made. This is a matter of prime importance to the various districts. The export districts which have developed inland connections will naturally desire that their inland allocation shall be of such proportions that those connections are not disturbed. Moreover, they will desire to develop their inland trade still further. The inland districts will doubtless wish to curb future incursions of the exporting districts into the inland markets, if not to reduce the inroads already made. This difficult question is left by the Bill for settlement by the industry itself in accordance with the principles embodied in the original Act. The central scheme Clause 10 (7) provides that: In determining the district allocation the council shall on every occasion have regard to all relevant circumstances affecting the several districts, not excluding the relative position of such districts prior to the War. The procedure, when the Bill becomes law, will be that the industry will have an opportunity of putting forward those amendments of the central scheme which are necessary to give effect to the provisions of the new Act. The industry then can either adopt the existing wording of Clause 10 (7) of its central scheme, leaving the exact basis and amount of the allocations to be determined ad hoc on each occasion, or it can provide for some definite basis of allocations in the light of past performance. It is at the option of the industry itself which course is taken. The Government have made no attempt to dictate—to use the modern jargon—a basis, and it is only in the event of amendment of the central scheme not being forthcoming that the Board of Trade has to amend that scheme.

I should, however, like to call the attention of Members to the fact that if any district should be aggrieved with regard to the determination of the inland allocation by the Central Council, it has a right under the 1930 Act, which is left unimpaired by the present Bill, to refer the matter to independent arbitration. Under the provisions of paragraph 10 of the Schedule to the central scheme the arbitrators must give their award within five days of the Council meeting at which reference to arbitration is claimed, so that there can be no delay in dealing with the matter. In future, allocations will be in respect of inland trade only—that is in Clause 1 (2)—and it will, therefore, be necessary for every coal mine or undertaking to have a standard tonnage in respect of coal supplied for use in Great Britain, that is, inland coal, in place of its existing general standard tonnage. Sub-section (2) of Clause 1 provides for the necessary amendments of the district schemes to give effect to this. In order to minimise as far as possible the work that will devolve upon the executive boards in bringing the new system into operation, the existing standard tonnages have been selected as the jumping-off point—not more than that—for the determination of inland standard tonnages.

Clause 1 (2, b) provides that the existing standard tonnages shall be divided into inland and export standard tonnages, so that these two classes bear the same proportion to one another as the quantity of coal supplied for inland use produced by the undertaking during the years in which the Coal Mines Act, 1930, has been in force, namely, 1931 to 1933 inclusive, bore to the quantity of coal supplied for export by the mine during the same three years. It has been suggested that the effect of this is to tie a district's inland trade down to the same amount as it was in 1931–33. This is not so. Standard tonnages serve to determine the relation of pits to one another in a district. They do not determine what is the allocation to the district.

It has been brought to my notice that some colliery owners regard the division of the existing standard tonnage of their mines on the basis of disposals for the years 1931–33 as unfair. The principal illustration used is that there was during those three years great depression in the iron and steel industries, and collieries sought markets abroad for their coking coal. Owing to the improvement in the iron and steel industry there will be relatively to export a greater inland demand for coking coal than in the years 1931–33. There may be other special circumstances which the colliery owner considers should be taken into account in assessing his inland tonnage. Clause 1 (2, c) provides that on any determination of inland and export standard tonnages after the arithmetical division the method of determination shall he such as is provided in the principal Act. In other words, the determination must be in accordance with Section 3 (2, c) of the 1930 Act, and it must have regard to the special circumstances of the mine or undertaking. In order to make clear beyond all doubt that a colliery owner has the right to refer the result of the arithmetical calculation of standard tonnage to the executive board, or to the independent arbitrator, Clause 1 (2, c) provides that within such time limit as may be provided in the scheme, he may apply for a re-determination of his standard tonnage as so calculated. In the re-determination, as provided in the opening words of the Clause, the special circumstances of the mine or undertaking must be taken into consideration. Let me call the special attention of the House and of the industry to the words at the end of Clause 1 (2, c): Notwithstanding any provision of the scheme to the contrary. These words have been specially put in to meet the case of a coalowner in a district such as Durham, where it is provided, under the existing scheme in Clause 44, that an owner may at intervals of not less than three months apply for a revision of his standard tonnage. If a coalowner had had the standard tonnage of his mine revised just before the provisions of the Bill became operative, he would have to wait for the expiration of three months before he could appeal against the arithmetical calculation. This would be unfair, and the words give him the right to appeal at once.

I have stressed these points because even so knowledgeable a man as the Secretary of the South Wales Coalowners' Association has suggested in the Press that the effect of Clause 1 will tie down a district's inland allocation to the basis of the years 1931, 1932 and 1033. As I have explained, the Bill does nothing of the kind. It is, I repeat, for the Central Council in submitting amendments to the central scheme to bring it into line with this Bill, to lay down in the scheme how the inland allocations are to be determined. The Government have deliberately left to the industry itself the solution of the vexed problem of the basis on which inland allocations are to be made. They are not made with reference to the standard tonnages of the district, and the method of determination of inland allo- cations is purely a matter for the Central Council. It must be remembered that the principle adopted in the 1930 Act for the determination of standard tonnage was performance in a recent past period.

May I sum up the arguments for the adoption of this practical basis? They are three in number: First, taking it by and large, although of course there are individual coalowners who think arbitration has not given them what they think is justice, taking it by and large, it may be said that during the last three years appeals to the executive boards on the one hand, and appeals to the independent arbitrator on the other, have taken into consideration past performance, and any special circumstances existing up to the present. The basis we have adopted, therefore, takes that into account and has been allowed for, and we can think of no fairer practical basis than an average of the years during which the Act has been administered. It has this other advantage. In future, hypothetically it does not admit of any legal arguments or legal disputes in determining standard tonnages. It is a practical basis, a basis of fact, and since the rights of appeal are carefully safeguarded in the Bill, so that special circumstances, as I said a moment ago, must be reviewed if an owner thinks himself aggrieved through the operation of new special circumstances, it will be seen at once that this simple basis of arithmetical calculation for standard tonnage for those three years will dispose at once of the great majority of cases, and leave only a minimum number of cases to be taken to appeal when the Act becomes law.

I think that the House will find those arguments very powerful arguments in favour of this basis, and moreover, existing standard tonnages cover all production, whereas in future, since export coal will be free from output regulation, only inland standard tonnages will be of practical effect. My problem, therefore, was to find a speedy and effectual method of determining inland standard tonnage which would dispose quickly of the greater number of cases, leaving only the minority of pits in respect of which adjustment was necessary. The Government, therefore, considered that if this basis were adopted, the circumstances of the majority of pits would be met speedily.

May I deal with one other point? There is a fear that administration of the district schemes will prevent some coalowners securing a revision of this arithmetical calculation, since the point at issue will not be that their mine is expanding, but that the basis years are unfair to them. After mature and careful consideration, we are satisfied that they need have no fears on that score. It does not matter what are the existing provisions of the district schemes; those provisions must be amended to conform with the new Bill when it becomes law, and must provide that every coalowner will have the right of appeal against any arithmetical calculation in the light of any special circumstances which he thinks attaches to his coal mine or undertaking. If it is suggested that the procedure of appealing against the arithmetical calculation will involve time and trouble, the answer surely is that whatever method is adopted time and trouble are bound to ensue, and I would argue in favour of this practical method that it means the minimum of time and trouble to all concerned, and provides a fair jumping-off stage. Our desire was to evolve a method which would lead to the smallest number of appeals, and, at the same time, enable the inland allocations to be made operative with all speed. This, I believe, we have done.

Clause I (2, d) provides for the determination of inland quotas, and is the only determination to be made in terms of quotas, so that the inland allocations made by the Central Council may become operative in the districts. The determination of export quotas is specifically prohibited so that the export standard tonnages cease, in practice, to have any effect. Let me give an illustration of how this will work out in practice on a hypothetical mine. Suppose a colliery has had, up to the present, a standard tonnage of 400,000, 200,000 of which has been the average export during 1931–33. Its inland standard tonnage will be 200,000 tons, subject to all the rights of appeal under the 1930 Act, and to any special circumstances that may have arisen or may arise. There will be an allocation for inland trade only. There will be no allocation for export. There will be a quota for inland trade only. There will be no quota for the export trade, which will therefore be free from quantitative control. Sub-section (3) of Clause I defines export coal to include foreign bunkers and bunkers for fishing vessels. Sub-section (4) makes it clear beyond doubt that the powers already existing by virtue of the 1930 Act to determine standard tonnage and quotas on a class basis, such as for anthracite coal, on the one hand, or coking coal on the other, are not impaired by the Bill.

Clause 2 deals with the inter-district co-ordination of minimum prices. Complaint is made that no attempt is made to deal with evasions. I think that probably arises from a misunderstanding of the intention of the Bill, which provides against evasion in two ways, first, by giving the Central Council power which it does not now possess under the present Act of acting on a complaint by one district against another, hearing the complaint, hearing the evidence and making a decision as to price, and then imposing penalties in default. I think it must be a misunderstanding of the meaning of the Bill that led to one particular phrase in the Amendment on the Order Paper. To make it clear, I would say that it is not proposed to take away from the district executive boards the powers they now possess for fixing minimum prices, nor is it proposed to take away from them the duties of ensuring that minimum prices are observed. The powers that the Bill proposes to confer on the Central Council are designed to strengthen the existing methods of price regulation in the districts. The proposal is that the Central Council shall be enabled to deal with disputes between districts with regard to minimum price matters. May I say that that applies equally in disputes between one exporting district and another and between one inland district and another. It must be understood that price control remains over export coal as well as over inland coal.

Mr. DUNCAN GRAHAM

What is the distinction between export and inland districts?

Mr. BROWN

There is no need to draw a hard-and-fast distinction, but the hon. Member will know that there are some districts that are both. Normally, for our purpose, we regard inland districts as those which have a preponderating inland tonnage. That is the best compari- son I can give for practical purposes. I could name some districts which, obviously, are mainly exporting districts, but the fact applies all round, whether the district is an exporting district or an inland district, that if complaints are made by one district against another, the Central Council have power to hear their complaints, to make decisions and to impose penalties in order to ensure that a fair price level is maintained. The Council will be able to do more than deal with a complaint by one district that the minimum prices fixed by another district are unfair. Should one district fail to take the necessary steps to enforce its minimum prices, should it neglect to impose penalties on any colliery owners in the district who evade the ruling minimum prices, then the dispute can be referred to the Central Council. The Central Council will be able to issue directions as to minimum prices, but unless an executive board sees that those directions are carried out, if they do not penalise the offending coalowners, the directions might as well not have been issued.

The machinery laid down in Clause 2 will work in the following way. On receipt of a complaint from one district regarding minimum price determination in another district, the Central Council will notify every executive board that an inquiry will be held by the council into the complaint, so that the executive board may be represented if they desire. The council, after holding its inquiry, will issue its directions in the matter. It is possible that these directions will apply not only to the district complained of, but consequentially to another district. In order to secure compliance with its directions, the council will be empowered to inflict monetary penalties, and so we hope not merely to lessen the incentive to evasions, but to provide machinery under which the council can undertake to solve this very difficult, tangled and complicated problem, namely, that of coordinating the minimum prices in the districts. If I am asked as to the amount of these penalties, I would say that they will be in accordance with the precedent of the principal Act. They will be laid down in the central scheme, and will be applied to any executive board which fails to carry them out.

There is only one other small point on Clause 2. and that is with regard to paragraph (d). In the absence of any pro- vision to the contrary, the directions, to which I have referred, issued by the Central Council in any particular case, would remain in force for all time. Circumstances may, of course, change, and it is therefore provided in paragraph (d) that the directions issued may be varied as the council thinks fit if representations are made to it by an executive board, but before varying any of its directions the Central Council must first consult the other executive boards and consider their representations in the matter. On Clause 3 I need not detain the House at length. It provides machinery for bringing the amendments of the scheme into force. It follows in general terms the machinery of the principal Act.

There will be two conflicting lines of criticism as to prices of coal produced for export. One body of opinion will, as is foreshadowed in the Amendment on the Order Paper, fear that a drop in export prices may ensue, and the other will urge that price control should also have been removed from the export trade. It will be interesting to compare the arguments of both sides and I will do no more at the moment than say that I do not see a great deal of reason to believe under the terms of the Bill that the new arrangement will mean a heavy drop, if the Bill is worked to advantage by the exporting districts, but I see many good reasons for retaining the control of prices. May I say a few words about the Amendment? The first thing that one has to do is to find out whether or not it represents the views of the party as a whole or whether it is an expression of the opinions of the hon. Members whose names are attached to it. I was rather surprised, and I think the House will be surprised, at the terms of the Amendment: That this House recognises the futility of legislation dealing with the coal industry, the administration of which is vested solely in coalowners. That is a very remarkable statement and I cannot think that it can possbily be pressed by the official Opposition in the Division Lobby. The Act of 1930, which put the administration of these schemes in the hands of the owners, was their Act. I remember very well the surprise with which I read for the first time the title of that Bill. It is graven on my memory: A Bill to facilitate the production, supply and sale of coal by the owners of coal mines. If hon. Members will look at the present Bill they will only find the word "owner" once. It was not necessary to put the word "owner" in the Bill, because it appeared 24 times in the original Act. I do not think the Labour Opposition can seriously mean the Amendment on the Order Paper. Therefore I am assuming that it does not represent their solid official view but rather reflects the opinions of the individual Members whose names are attached to it, who, incidentally, are from districts which are generally known as exporting districts, although in the strict sense of the word the hon. Member for Hamilton (Mr. D. Graham) will consider perhaps that Scotland is an inland district rather than an exporting one. That four years after the passing of the Act the Labour party should call attention to the futility of it is too much to ask the House to take seriously, and I do not expect to hear it seriously argued. The fact is that the Act was given on the volition of the Labour party, to those who were responsible financially and otherwise for working the industry and I shall be interested to hear what there is to be said about it.

I will say little or nothing about the transfer of quotas, but I would remind hon. Members that there is on record a very powerful speech by the late Mr. William Graham in favour of the transfer of quotas. I think the Amendment is misleading in what it says about the transfer of quotas. When it speaks about eradicating evils, it seems to suggest that the transfer of quotas is a wholly evil thing; but that is not so. It was put in the original Act for the one purpose of allowing elasticity between pit and pit and that has been valuable in the working of the Act. There have been evils but they have not been as widespread as the Amendment would have the House believe.

Mr. GORDON MACDONALD

It only means what it says.

Mr. BROWN

Then I take it as agreed between us that it is not meant as a general attack on the Act.

Mr. MACDONALD

indicated assent.

Mr. BROWN

It was a misapprehension on my part, but when I read the Amendment that is how I took it. Whereas in some districts payment for quotas has been excessive, on the whole, if hon. Members will look at the answer which I gave some time ago to the hon. Member for Peebles (Captain A. Ramsay) they will see that the arrangements in many districts are very fair as between one interest and another. I do not know what particular importance the Opposition attach to that. In regard to the question of prices I shall be interested to hear what the Opposition have to say, but in my reply on the points raised in the Debate I shall try to allay their fears that there need be any drastic drop in export prices because of freedom from regulations. We hear a great deal nowadays about planning. This has been a small plan, an interesting plan but a difficult plan. It is one thing to talk about planning, another thing to draw up a practical plan and another thing to get agreement upon it among those who will have the responsibility of working it, and gaining or losing by it. It is yet another thing to apply it successfully in a series of undertakings which although grouped together under one heading as "coal" are in fact greatly diversified in their products and their markets.

We are often told about the stupidity of the leaders in this industry on the men's side and the owners' side. When people talk about the coal trade, about a coal Bill, or about coal problems or coal disputes, the first thing they talk about is the stupidity of the owners and the men. [An HON. MEMBER: "And of the Government."] No, they will not talk of the stupidity of the Government but of the owners and the men. Let me say a word about that, in fairness to the industry as a whole. The trouble in the industry is not stupidity nor is it any special strain of original sin. The trouble in the industry arises from the fact that there is a conflict of interest there between district and district, between pits in a district and between persons in districts. Those who lead the industry, judging from my short experience, are like any other body of men—Members of Parliament, secretaries, lawyers, tinkers, tailors, soldiers, sailors—good, bad and indifferent. Some are sitting in the offices of their own particular undertaking and acting as if their coal heap is the world. Some of the shrewdest men in the industry are keen to wrest advantage out of any regulation and welcome the subordination of their neighbours' interests but unwilling to subordinate their own. Some of the leaders, however, many of them, are far-sighted men willing to subordinate any particular interest, including their own, to the common good, and they are I think at the moment in a majority.

The leaders of the industry have been conducting the politics of the coal trade in the grip of the economics of glut for some years and I can believe that they have a good deal more sympathy with the problems of statesmen who have to conduct these problems with consent and good will than they might have had in the days before they had the opportunity to run the industry through the machinery of this Act. We cannot isolate this problem. We cannot regard it merely as a question of coal. It is one of a series of attempts by trial and error to face the world problem of the disequilibrium between excess productive capacity and present demands. It has in the background the vast and intricate problems which are raised by any consideration of the position of the primary producers of the world not merely as producers but as consumers in this modern twentieth century of world economy. The modest hope of this little Bill is that it may lessen the temptation to evasions, remove one of the main excuses for evasions, lead to a fair deal between districts, help the finance of the industry in an upward way, and remove the difficulties that stand in the way of fulfilling our trade agreements to the full. It is in that modest hope that I move the Second Reading.

4.25 p.m.

Mr. MAINWARING

I beg to move to leave out from "That" to the end of the Question, and to add instead thereof: this House recognises the futility of legislation dealing with the coal industry, the administration of which is vested solely in coalowners, and cannot assent to the Second Heading of a Bill which fails to deal effectively with the co-ordination of prices, to check the wholesale evasion of the existing law, or to eradicate the evils resulting from the sale and purchase of colliery quotas, and which, in the proposal to remove restrictions on the production of coal for export, will seriously limit the advantages intended for the industry as a whole under Part I of the Coal Mines Act, 1930. Past discussions of the problems of the coal industry as well as the Debate upon which we are entering will have been sufficient to indicate generally to hon. Members that in this industry there is a vast area of technical detail which is likely to create pardonable confusion in the minds of those unacquainted with the industry. The House is indebted to the Minister for having so kindly endeavoured to make clear some of the technical details involved in these problems. I think his effort to explain some of the conditions reflects great credit upon him, as one who has recently come into the industry. We who have spent our lives in it and have grown up with these problems and understand them appreciate the difficulties that other people find in becoming acquainted with them.

Lest there should be any doubt about the intention of our party in moving the rejection of the Bill I want to say that we stand definitely by every word in the Motion for rejection. We ask the House to recognise the futility of legislation dealing with the coal industry on the grounds set out in our Amendment. If any justification were required for moving the rejection of the Bill in these terms it was contained, if I may say so with respect, in the speech of the Minister of Mines. He has explained fully and clearly every word that need be uttered in justification of our attitude. We who are directly interested in the industry and the hundreds of thousands of workmen who are employed in it, together with their families, all of whom are concerned in the welfare or the ill-fare of the industry, ask that the Bill be rejected. We are not doing it simply because we happen to form the Opposition. It is not merely that it is expected of us to abuse or under-value anything that may be put forward by the Government of the day. It is not that consideration which impels us to bring forward our Resolution. We do it purely on the merits of the proposals put forward for dealing with the problems in the industry.

In face of the terrible conditions which prevail in the industry no party would be justified in refusing any Measure, however unlikely it might be really to improve the industry, if that Measure were brought forward with a serious intention of improving the industry. There is far too much at stake for our men for us to deal, lightly with any proposal dealing with the industry. The ghastly experience of the miners of this country during the last 14 years gives us strong and deep reasons for examining and in- vestigating any proposal affecting the industry and not turning aside anything suggested with that end in view. We are linked up with the industry directly even on its business side. The principle of co-partnership which underlies the wages agreements throughout the industry makes it of immense importance to the miners that we should examine whatever proposals are made. We are also directly interested in the revenue of the industry. Any proposal which might tend to raise the revenue would be of as much benefit to the miner as to the mineowner. Equally, any proposal which is likely to have the effect of reducing the levy is going to affect miners and mineowners.

We are moving the rejection of the Bill because the very intensity of our desire to see things improved convinces us that there is nothing in this Bill likely to bring about that desired end. It is utterly inadequate in one respect, and positively dangerous in another. Nor are we proposing the rejection with any intention of raising a discussion on the academic problem of nationalisation as against private ownership. We are dealing with a Bill which seeks to improve the position which exists in the mining industry at the moment, and we are condemning it because it cannot, and will not in any shape or form, mitigate the evils which exist under private ownership to-day. What has been our general experience of the industry during the last 14 years? On the one side, the owning side, the managerial side, there has been stagnation; prices have been falling, competition has been intensified again and again, profits also have been falling, have disappeared altogether in some cases, and there has been widespread losses and bankruptcy. That is on one side.

On the other side, the workmen's side, we have seen under employment, unemployment, reductions in wages, intensification of work, an increase in the hours of labour and a general worsening of the conditions. This has taken place not only in this country but upon an international scale, every coal producing country in Europe has shared in this terrible experience, and when we express our feelings in this House we are not speaking merely on behalf of the miners of Great Britain, but expressing also the feeling and conviction of every miner in Europe because we are all sharing and suffering the same fate.

In this and in other countries inquiries have been held; many people have applied their minds to the difficult problems of the industry. They have been investigated again and again. Reports have been published dealing with the productive side and with the commercial side, and in both cases there have been numerous instances of failure to organise to meet existing conditions of production and marketing of the product. Where an organised effort ought to exist, where it is called for, we have been offered simply competition and conflict. The Secretary for Mines said quite truly that the coalowners compete as individuals, as neighbourly individuals, in districts. They also compete as organised coalowners in a district against those in another district. They compete also as coalowners organised within the boundaries of the country with other coalowners organised within the boundaries of other countries.

Therefore, as individual pits, as groups of pits, as organised coalowners in a district, and as organised coalowners in a country, we have these several grades of competition going on at the same time, and the miner suffers from each of these in his own peculiar way. All these forms of competition differ from one another. The competition between individual coalowners in South Wales is not the same type of competition and has not the same effect as the competition between South Wales coalowners and coalowners of the Midland Federation. Nor again is the competition between individual coalowners within a district and coalowners in another district the same as the competition of the coalowners of Britain against say the coalowners of Poland. But they all have a most disastrous effect on the miner.

Year after year, indeed one might say week after week, during the last 14 years, demands have been made by individual coalowners in this country for increasing sacrifices from their workmen in order to keep them going. Hon. Members can readily appreciate the effect upon miners of a general wage agreement in which certain reductions are imposed, anybody can estimate the effect of the wage agreement of 1926, and the wage agreement of 1931 as to the loss in wages to the miners, but who can estimate the cumulative effect of the daily and weekly sacrifices which they have been and are being called upon to make in every district? The reports which have been issued and the inquiries which have been made indicate clearly that in this industry, particularly on the productive side, waste of resources has been carried to a point of almost criminal expenditure in a vain effort to maintain an obsolete system of organisation and administration of the industry. It is not altogether miners who say this. There are representative coal owners in this country who feel as strongly as the miners themselves who have uttered words condemning the existing organisation on the productive and distributive sides, with separate administration staffs, separate purchasing agents for materials, separate rolling stocks for every undertaking, an uneconomic division of coal areas, and a hundred and one other factors arising out of the exploitation of coal resources by independent units.

On the commercial side, equally, they condemn restrictive and injurious practices with their immense disadvantage to the industry as a whole. On the commercial side you find each individual unit, and there are large numbers of them, who are bent upon doing the utmost possible to reduce the revenues of the industry. To any suggestion that an organised effort might displace the anarchic competition which exists they turn a deaf ear. These men think only in terms of their own past, in terms of the 19th century liberal individualism, which has long since been dead so far as the economic life of the country is concerned. It still exists, however, in the minds of some of these antediluvian representatives of the mining industry. These men on the commercial side have cut down prices and the revenues of the industry. We have seen them, force down wages and the conditions of work; we have seen them provoking strikes, and initiating lock-outs; we have seen them intensifying the competition at home and abroad. In fact, these men by persisting in retaining obsolete methods of carrying on the industry have spread stagnation and ruin everywhere.

That is the indictment we make against the coalowners, and it is an indictment in which we have been joined by repre- sentative coalowners. It is also the indictment which we level against the Government itself. The Government must now accept responsibility for continuing this method of industrial administration. Whatever may be the effect of competition in normal conditions, we must at least realise that the effect of a competitive struggle is multiplied a thousandfold when we are plunged into a period of depression such as that which we have to face now. If you want to see the effect of this competition in all its naked horror you must consider its effect on the Cinderella amongst industries, the mining industry. There, if you want to see it in all its terrible consequences, is the place to investigate it. We have heard the Minister of Labour, with pardonable satisfaction to himself, on occasions say that only a small percentage of the total unemployed are relatively upon the Exchanges for any length of time. That is a gratifying thing to us on these benches. It seems to indicate that generally in industry those who are fated to be unemployed can estimate their period of unemployment at the most in terms of weeks or months. In the mining industry that is not the case. In the mining industry men estimate their periods of unemployment in years. I know scores of the best type of workmen this country has ever produced who have been unemployed for 10 years. The Tony-pandy Exchange has over 5,000 men signing on each week, and I am satisfied that I am stating the facts correctly when I say that 30 or 40 per cent. of these men have been unemployed for over three years, and from three years up to 10 years. Similar conditions exist in the neighbouring places of Porth, Ferndale and Treorchy. They estimate their periods of unemployment in years.

On the other hand, we must not ignore, and I have no desire to do so, the losses of the other partner in the industry. It is true that immense sums of capital have had to be sacrificed during the same period of years. I am certain that no one on this side of the House desires to hide that fact; we admit it, because it is only by so doing that we can fill up the full picture of horror. We were discussing the other day one aspect in which large bodies of workmen were suffering because capital had to be sacrificed and thousands of injured workmen had to suffer in a special way as a result of that misfortune. The state of the industry is condemned by everybody. The present organisation of the industry to meet existing conditions is condemned by us, by representative coalowners, and by commissioners appointed by this House. They all agree that existing methods on the productive and commercial side are almost wholly lacking in the essential conditions for a successful operation of the industry. But in modern times obsolete and worn-out methods are no longer capable of meeting the situation. In 1930 it was deemed necessary to make at least a first attempt to enforce new conditions upon the industry. It was realised that unrestricted competition would have to be recognised as an evil no longer to be endured, that provision would have to be laid down to limit antagonisms between individual coalowners, and that the different units of the industry must begin the task of co-ordination. So the Act of 1930 contained provisions for that purpose. Since then we have had an opportunity of seeing to what extent coalowners are capable of adjusting themselves to, and of applying the provisions of, that Act. Anyone who has studied the problem, anyone who heard the Secretary for Mines to-day, must have realised how vain it is to expect coalowners to modernise themselves and their undertakings on these lines voluntarily.

The country and Members of this House must realise that without the principle of compulsion there can be no salvation. As a matter of fact, what element in the mining industry objects to the proposals contained in the Bill? I suggest that it is the most progressive element among the coalowners who will object to the conditions in this Bill, because the proposals of the Bill ask them to go backward, and the more progressive elements amongst the coalowners object to going backward. If we seriously intend to raise this industry from the condition in which it has been suffering for so many years we have to realise that Parliament must provide a new law. Whether we will or not, those engaged in the industry on the owners' side and the workmen's side must be governed by law. In the absence of effective law passed by this House the industry will be governed by unrestricted economic law, and we have seen what the effect of that has been during the last 12 or 15 years. That economic law will continue to operate unrestrictedly until this House chooses to mitigate its effect by legislation.

The 1930 Act laid down provisions which were expected to bring about three ends. First of all they were expected to regulate output and prices. Secondly, they were expected to limit competition amongst coalowners within and between districts. Thirdly, they were expected to secure for the industry the highest possible revenue consistent with the existing condition of the market. What have been the results? They have been explained this afternoon by the Secretary for Mines. The provisions of the Act have been found to be defective and all manner of evasions have been practised by the owners. I think the Secretary for Mines is entitled to credit for having tabulated those efforts at evasion and those malpractices in the striking manner that he did. With his permission, I will enumerate them again, so that once more they may be included in the reports of to-day. They were

1. (a) The formation of subsidiary companies to which coal is sold at the statutory minimum price, the subsidiary companies in turn selling it at less than the minimum price and their losses being borne by the parent company.
2. (b) Selling coal at prices below the minimum prices ruling.
3. (c) Selling more than one kind of coal at a time to one consumer, one kind at the minimum price and the other as a discount.
4. (d) Selling a parcel of coal to a customer, the greater part at the minimum price and the balance invoiced at a nominal price of a few pence per ton.
5. (e) Payment of exorbitant remuneration to selling agents whose functions are purely nominal, to sell at prices below the minimum, making good their losses from their remuneration.
6. (f) The purchase of stores from customers at inflated prices.
7. (g) Selling coal and coke together, the former at a minimum price, the latter at a substantial discount on the current market rate.

Coke is outside Part I. There is an indictment of coalowners; there is an estimate of the extent to which one can depend upon these people honourably to observe the conditions of an Act of Parliament. It is on just those people apparently that in this Bill we are asked to rely, and to whom we are to give greater power of evasion than they have at the present time. The defective character of the machinery of the 1930 Act is admitted by ourselves. The Secretary for Mines pointed out that it was the party on this side that was responsible for introducing the existing law and for laying down that it should be in the sole control of the mineowners. That, however, does not take away from us to-day the right to say that it was a mistake. We are entitled to say that experience has clearly demonstrated the folly of allowing the sole control and discretion of the coalowners to administer the Act. In the interest of the country, apart from those of the miners, the time has arrived when these matters ought to be brought under the general public control of the country.

The quotations and extracts from the statement of the Secretary for Mines indicate how these coalowners may be expected to react to the proposals of this Bill. The Secretary for Mines has long enough been aware of the attitude that the miners have been taking. He has informed himself at every stage of every expression of opinion by the Miners' Federation on these matters. I am certain that he has been as closely in touch with the expressed views of the Miners' Federation as have been the miners themselves. What is my own opinion of the attitude taken up by the miners? It is that the experience of the Federation and the Federation's demand have somehow found good soil in the minds of the Government.

The question now is, to what extent have the Government proceeded to act upon the conviction arising from the case made out by the Miners' Federation? The failure of the owners and the defective or inadequate machinery of the 1930 Act demand that we proceed further in the direction of controlling this industry. What do the Government propose to meet that situation and to remove the evils of the past 14 years? Is it to strengthen the element of control and organisation? Is it to recognise that 1930 did mark a new era, and is it an attempt to introduce methods of production and of commercial organisa- tion in harmony with modern conditions? Is it that? Oh no; quite the contrary. As a matter of fact, stripped of the mass of detail which inevitably surrounds this very simple Bill, the proposal is to re-introduce all the worst features or the last few years; it is really to usher in again a new age of anarchy. It is proposing a change which will have the effect of commencing again in the coal markets of Europe a new and disturbing and intensified competition between coal-producing nations. It will mean a reduction in prices once again. It will mean a possible increase in the hours of labour, if not in this country in some other. It will mean further additional subsidies and bounties operative as between some of the countries of Europe. It will bring the mining communities in this and every other country to an even lower standard of living than that under which they are suffering now.

It is true that the scope of the Bill is limited. All that it aims at is, first of all, to affect a greater co-ordination of prices between districts; secondly, to free all individual coalowners from restrictions upon output for export; thirdly, to amend the district schemes in any way necessary, consequent upon those two changes. That is the Bill in broad outline. It has those three simple ends. Where is the demand for a Bill in those terms? It exists certainly in a complaint that districts are invading each other's territory with lower prices. That complaint is there and the Secretary for Mines has referred to it in broad terms. But nowhere else in the country is there anything approaching justification for the Bill. There is simply that one complaint that the coalowners of one area are invading another below its agreed minimum prices, and upon that basis alone is there justification for the Bill. What are we to expect to follow from this removal of the restrictions which exist upon production for export? I do not know why the Secretary for Mines placed such importance upon the explanation which he gave of the distinction between productive capacity and actual output. There is nothing in it in relation to these problems. At present there are something less than 700,000 men, I think, employed in the industry.

Mr. E. BROWN

There are 790,000.

Mr. MAINWARING

The output of coal from the industry could be increased by 25 per cent. without adding a single man to the number employed. That is one aspect of the unemployment problem which hon. Members fail to realise. This industry has to be re-established upon a very high level of prosperity much higher than it has to-day before there is any hope of miners being returned to employment. The allocations at the present time are not being filled. That fact is published in the report of the Department itself. If the present allocations of the districts are not being filled, what earthly purpose is there in saying to any one of these districts or to all of them, "You cannot fill your allocations, but we are going to remove even that disability from you, so that somehow, somewhere, you are going to be free to sell coal."

The coalowners at the present time must be selling every ton of coal that they can sell. That, surely, must be accepted as a statement of fact. If it is the case that the coalowners are selling at their present minimum prices every ton that they can sell, one must assume that in the European coal market a sort of balance of competitive power has been attained between the coal-producing countries. What with subsidies and bounties of one kind and another, one country granting cheap transport facilities, another giving a direct subsidy, others employing a mixture of both and many other forms of assistance, one must assume that in the European market to-day there is some rough-and-ready method of division, which might be indicated, between Great Britain, France, Germany, Poland and Czechoslovakia and so on and that each of these countries holds on some basis, secure or insecure, a part of that market. At the present time we must assume that within the markets to which we have access, British exporters are selling every ton they can. What is to be gained by removing from the industry this alleged restriction upon output for export? To make this new freedom effective it must be supplemented by a reduction in prices. Once the British coalowner says to the Polish coalowner, for example, as one of his most bitter competitors in this respect, that it is proposed to reduce prices, what will be the result? Once the British coalowners in response to this new-found freedom, reduce the export price by 1s. a ton, what will the Polish owners do, what will each Continental group of owners do, but reduce their prices also and each of them in turn will again seek, as they have sought in the past, some concession from their own workmen to enable them to carry on the struggle. So the process will go on from country to country.

One is entitled to assume, indeed one must assume that a proposal to reduce minimum prices would be regarded by the Board of Trade under this Bill as consequential. In the Bill it is provided that each district shall, after the passing of this Measure, proceed to amend its own district agreements and rules in any manner which it thinks necessary and any such proposal which may be deemed to be consequential will receive the approval of the Board of Trade. Obviously there must be in the mind of the Board of Trade the intention to sell more coal and if the coalowners in one district or in all districts, agree that, having got this newfound freedom, it is necessary to reduce prices in order to make it effective who is there to say them nay? The thing must become effective at once, all of which means, as I have said, the reintroduction of the reign of anarchy.

In what respects is it assumed according to the Bill that the coalowners of this country have failed? Obviously one thing in which the coalowners have failed according to this Bill, is that they have not sold enough coal abroad. That is the failure contemplated by the Bill. They should have sold greater quantities of coal abroad and consequently, in the opinion of the Government, it is necessary now that that defect should be remedied. The Bill being the measure of what the Government deem necessary, it must also be regarded as the measure of what the Government would like the coalowners voluntarily to agree to among themselves. In other words, we are entitled, on the basis of this Bill and the declaration which we have heard to-day, to assume that the present Government would be perfectly satisfied with the condition of the industry if the coalowners themselves would agree to do what the Government now ask them to do, namely, organise to reduce prices for export purposes. We are, therefore, between the devil and the deep sea—on the one side a Government whose only proposal is to make things worse and on the other side groups of coalowners who are tradition- ally incapable of introducing any social outlook into their line of thought or action.

On the face of things there can be no purpose in the export proposal unless it leads to a reduction of prices. That is the considered view of the most progressive and representative coalowners in this country. If the Government choose to regard as irresponsible the statements of miners or Members of the Labour party they cannot regard as irresponsible the declared views of Sir Adam Nimmo and other representative coalowners who have said there can be no purpose in the proposal unless prices are reduced. That is the first point. Secondly, a reduction in export prices will inevitably bring about a similar tendency in inland prices. Thirdly, the revenue of the industry will be reduced relatively, and, ultimately, absolutely. Fourthly, the already pauperised mass of miners will be further impoverished. I wonder if the House realises the extent to which the mining population has been degraded and pauperised. History provides us with examples here and there of small groups of workmen in some industries who have on occasion been compelled to have recourse to assistance from Poor Law authorities because their earnings were too low to support them. That has taken place in this country, fortunately a long time ago. But is the House aware that the mining industry of this country to-day is in that condition?

There is not a mining district in Britain in which the miners are able to live upon their wages. They receive pauper relief on top of the wages which they earn. It is true they do not get pauper relief from the Poor Law authorities. What difference does that make to workmen in the mines of Wales or England or Scotland, who work for a daily wage of 6s. and find when they have earned it that they cannot live upon it. Their own employers tell them, "I know you cannot live on 6s. a day, but that is the wage which I agreed to pay you; however, if you come along next Saturday I will give you 1s. on top of it, as relief." It makes no difference that the workman gets that relief from his own employer directly instead of from a public assistance authority. Every district in the mining industry of this country has to give a subsistence allowance on top of wages. In varying percentages, from district to dis- trict, anything up to 70 per cent. or 75 per cent. of the miners of this country are unable to live on the wages paid in the industry—a fact which is admitted by the owners themselves. This proposal means a reduction of the revenue of the industry making it still more difficult for the industry to pay even the wages which it now pays.

This is the result of proposals made by a Government which recently convinced itself that a halfpenny per ton welfare levy was going to spread ruin in the industry. Yet we are told by the Secretary for Mines to-day that he does not unduly fear that there will be heavy reductions in export prices. Would a shilling a ton be heavy? It would be 24 times the amount of the welfare levy. Would sixpence be heavy? What then is suggested as the reasonable reduction which might take place? The whole thing on the face of it stands condemned. If the suggested agreement among the coalowners becomes effective and the Secretary for Mines is able to withdraw this Bill, it would serve one purpose, that of saving the face of the Government. It would save them from the charge of utter incompetence. It is not merely the coalowners who are now, admittedly, incompetent to deal with this industry, because they have shown a complete failure to realise the nature and extent of the problems besetting the industry. Any sort of agreement among the owners, an agreement even to pursue this suicidal policy would place the Government under an eternal obligation to the coalowners, because it would obviate the necessity of the Government publicly announcing the extent of their mental poverty.

5.15 p.m.

Mr. BATEY

I beg to second the Amendment.

We have just listened to a most able speech by my hon. Friend the Member for East Rhondda (Mr. Mainwaring). The Minister invited the House to look at this Bill and to see what it does and does not do. I invite the House to look at one or two things that the Bill might have done but does not do. The Bill seeks to amend the Act of 1930 in only two respects, and we believe that that Act needs drastic amendment. The Minister did not resist the temptation—I do not blame him, and a lot more Members may be guilty of the same thing to-night—of having a gibe at those who sit on this side and reminding us that the 1930 Act was our Act. It was, and that Act has disappointed even its friends. There was one thing while that Act was going through that influenced most of us to support it, and that was the immense faith that the then President of the Board of Trade, the late Mr. William Graham, had in it. He had high hopes of it, and he once said of it: It is my earnest hope that the Coal Mines Bill…will at least do something to sustain pithead prices in the autumn and the winter months."—[OFFICIAL REPORT, 24th July, 1930; col. 2477, Vol. 241.] I remember one night when I had been criticising the Bill and Mr. Graham, I went out into the corridor and met the hon. and learned Member for Argyll (Mr. Macquisten), who said to me, "Batey, remember this: wherever you find an idealist, you will find a crook round the corner waiting to take advantage of him." Willie Graham was the idealist. I will not say who the crooks are, but there is no question that for more than three years that Act has been a failure. Its main purpose was to raise prices, but there has been no raising of prices. It may, as the Minister suggested, have prevented prices falling, but it has not succeeded in doing what we who supported it wanted it to do. The Minister now proposes to amend Part I of that Act, and I wish he had dealt drastically with the Act. Anyone who goes through it and pays any attention to the manner in which it has been administered must admit that far more than one part of the Act needs to be dealt with. The Minister has not done it, and I confess that he has my sympathy for not having done it. I do not blame him. I am prepared to give him this credit, that I believe he is anxious to do whatever he can to help the mining classes in this country, but one cannot forget that in the Cabinet to-day sit two coalowners. I believe that that is the cause of the meagreness of this Bill. I believe that that is the cause of all the mining legislation that we have had lately, that has done no good to the miners, and until the miners can get clear of those two coalowners in the Cabinet, and can get clear of this Government, there will be no betterment for the miners of this country.

I wish the Minister, when he looked at Part I of the 1930 Act, had looked at Part IV instead, because Part IV stands far more in need of amendment than does Part I. Part IV provides for the Coal Mines Industrial Board, but ever since the Act was passed, that Part of it has been a dead letter. Its purpose was to deal with wages and conditions, but the owners have refused to acknowledge it, and I want to read a Sub-section dealing with the powers given then, so that the House will see where that Sub-section fails. In the 1930 Act Sub-section (5) of Clause 15 reads as follows: Where there exists, or is apprehended, any dispute between the owners of and the workers employed in or about the coal mines in any district as to the terms of a proposed agreement between such owners and workers providing for the regulation of wages or other conditions of labour throughout the coal mines in the district, and there has been a failure to settle the dispute in accordance with the arrangements existing in the district for the settlement thereof, either the owners or the workers may refer the dispute to the National Board who shall thereupon inquire into the dispute and report thereon to the owners and workers concerned. All that that Sub-section needed was an alteration of the last two lines, and the Minister has failed to do it. He knows that the Miners' Federation has been pressing for a long time that the coalowners should be forced to agree to a National Board to regulate wages nationally, and the Minister had his opportunity, his chance, when bringing in this Bill to amend the 1930 Act and give to the Miners' Federation the one thing essential, namely, a National Board which the owners should be compelled to attend for the regulation of wages and conditions.

If the Minister did not want to deal with Part IV, he might have turned his attention to Part III, which badly needs to be amended. Part III fixes the hours at 7½ per day for the miners. It is difficult to understand, I confess, how a Labour Government ever agreed to that proposal. Sometimes I am amazed now to think how we did agree, because the Labour Government was pledged to a 7-hours day. But we did not know then how fast the Prime Minister was travelling towards the Tory party. Had we known then how fast the Prime Minister was travelling to the Tory camp, we should have understood the action of that Government. As a matter of fact, we need not have been surprised, for in 1924 I prophesied to some of my friends that within 10 years the Prime Minister would be in the Tory party. He was in long before 10 years had elapsed. I submit that there is far more need to amend Part III of the 1930 Act, dealing with hours, than Part I, because the 7½-hours day, bad as it is, is not respected by the coalowners. Overtime is rampant in this country, and we were told by the Minister, in answer to a question to-day, that there has been only one prosecution, with all the overtime that everybody knows to be a scandal in the coalmining industry to-day. Not only so, but the huge unemployment that my colleague has already depicted in the coalmining districts makes it essential that when the Government are bringing in amending legislation, they ought to face this question. In order to provide more work for miners, they ought to be prepared not only to reduce the hours of labour, but to reduce them drastically, and give us what we at one time hoped for, namely, a 6-hours day.

With regard to Part I, which the Minister proposes to amend, my colleague has dealt very fully, and very effectively too, with the removal of the quota from the export coal. My experience of collieries makes it difficult for me to understand how the separation between export coal and inland coal is going to take place, because there is scarcely a pit in the country that sells coal for export that does not also sell some coal inland. I remember that for 20 years I was employed at a colliery that was said to be an export colliery, a colliery that exported coal to Italy, and if anyone asked where the coal from that colliery went, they would say, "All the coal from this colliery is exported to Italy." While that was generally true, it was not absolutely true, because even that colliery sold a good deal of coal inland; and that applies to every colliery in this country, so that to remove the quota from export coal and to keep the quota on inland coal seems to me to be making one of those divisions that the Minister will find it is absolutely impossible to maintain. This is but the first step which the Government are taking to abandon the principle of the quota altogether. They are deserting one trench, and they will be forced to get out of the next one. Instead of settling down and keeping the quota upon inland coal, we shall find that within the next 12 months the Government will have to recede from the position they are now taking up. They are simply making an impossible position for maintaining the quota.

I did not altogether agree with the article in yesterday's "Times" by Sir Adam Nimmo, but on this question, he says something that is worth the attention of the House. He is speaking with a very long and big experience, and he says, on the quota: I may be pardoned for suggesting that in the Amending Bill just introduced the Government are likely to create evils greater than the defects of the. 1930 Act, which they are attempting to remedy. To free imports from quota regulation must undermine prices and jeopardise the financial benefits of the trade agreements. At the same time co-ordination of price (an outstanding feature of the Bill) must become more difficult, if not impracticable. The coal industry must either be entirely free or it must be 'planned.' Half-way houses are occupied only to be abandoned. Temporary expedients are soon exposed and found wanting. Planning must be adequate to the problems of the industry, and the powers conceded to the Central Body must make it possible to bend the whole, and every unit within it, to the general plan. Unless this is done failure is certain. For planning in the coal industry the quota system is fundamental. Co-ordination of prices is impracticable without it.

Mr. E. BROWN

The hon. Member will also remember that in the same article Sir Adam Nimmo points out the distinction between export quotas and inland quotas.

Mr. BATEY

He said some things in the article with which I do not agree, but I do agree with the passage I have read. Why do the Government take this step? The Minister did not tell us today. I should like him to tell us in his reply, why the Government have taken this step of freeing the export coal from the quota. So far as the Minister gave a reason to-day I understood it to be the Trade Agreements. If the Trade Agreements are the cause, we would have been better without them. They are not an unmixed blessing, and it is as well to keep in mind that they have been made with only small countries and that several of the big European countries are not under Trade Agreements. Experience is teaching us that what we are gaining under trade agreements we are losing in other markets. If as the result of the Trade Agreements this step has to be taken, I submit that we had better not have Trade Agreements.

Our Amendment points to what I believe to be the fatal mistake of the 1930 Act, namely, that the administration of the Act is invested solely in the coalowners. It is proved that the coalowners' administration has been a failure. My colleague read a long list of evasions which the Minister gave 12 months ago. These evasions were known when the Minister brought in this Bill. Why did he not take steps to make them impossible in future? It is ridiculous that coalowners should sell coal to themselves and then re-sell it at a less price. The report on the working of the scheme under Part I of the Act during 1933 issued by the Board of Trade deals with this question. Speaking of the amendment that had to be made to the Durham scheme in order to prevent these evasions, the report says: The provisions of the district scheme have been amended so as to give the executive board greater powers of investigation and control in regard to prices. In particular, these powers are designed to deal with evasions through subsidiary companies, by manipulation of freights in the case of coal seaborne in vessels owned or chartered by the coalowners themselves, and by the diversion of coal, sold for export, to the inland market. These evasions have been so bad that the Government ought to have taken steps in the Bill to make them impossible in future. They ought also to have taken steps to deal with owners who close pits in order to sell their quota. The Minister thought that the price charged for the sale of quotas was not very much. In Durham an owner is charged 6d. per ton for the sale of his quota. That is a big price, and the fact of owners closing pits so that they can have coal for sale in order that they may be able to sell their quota is one of the things that the Government ought to have dealt with in this Bill. Experience has taught that quotas have been fixed generally by the coalowners belonging to the big concerns without any respect for the small owners.

I had a case in my division at the end of the year of a small colliery where not more than 200 men are employed. That is in a district where unemployment is rampant. This small colliery was the only place where any work was being done at all, and the difficulty was for the owner to get his quota increased. He found it impossible because the quota is fixed on the last six months of 1929, and this colliery was not doing very much in that time. I will give one or two facts about this case because I want to urge upon the Minister that he ought to deal with this question in the Bill. During the period ending the 30th September last year the permissible output was 39,707 tons. The actual output was 52,859, a surplus of roughly 13,000 tons. This surplus tonnage has had to be purchased at varying prices. The owners have decided that, rather than pay the 6d. per ton, which they estimated would cost them £1,000 a year, to close the Harvey seam, which means the displacement of about 90 men and boys—and this in a district where unemployment is rampant. These men and boys were dismissed because the manager could not get the quota increased, and because he could not afford to buy the quota which he might have got. There are many cases like that of small owners who need to be protected against the big owners, and the Minister ought to have taken some power to deal with such cases.

I want to say one or two words about the central council, because it seems to me that it will have all the power under this Bill. The council ought to be revised so as to consist of a neutral chairman and equal numbers of coalowners and miners. The coalowners by themselves have been a failure during the last four years. The central council should be revised, therefore, so that the miners can have equal representation with them. A neutral chairman would be a guarantee to the public, which has to keep the victims of the coalowners' selfish policy. Moreover, the miners have an important interest in the industry which warrants them in having an equal voice with the owners in running the central council. I would remind the Minister of Mines what was said of the miners by the Sankey Commission. On a suggestion that the miners ought to have a voice in the management of the industry, which is a far greater thing than we are asking to-day, the Commission said: It is in the interests of the country that the colliery worker shall in the future have an effective voice in the direction of the mine. We are not asking for so drastic a step as that to-day. For a generation the colliery worker has been educated socially and technically. The result is a great national asset. Why not use it? I want to submit that this Bill will never be satisfactory to the miners so long as it leaves full control in the hands of the coalowners. We made a great mistake in 1930 in putting the whole power into the hands of the owners. We should not go on repeating the mistake, and therefore we claim that the Central Council, which will have so much power, should contain an equal number of miners and owners.

I would have liked to see the Minister deal with Section 9 of the Act, which concerns offences and penalties. Although it has been common knowledge that the Act has been a failure, and although everybody has known so much about the evasions, one had forgotten this Clause. It reads: If any person contravenes or fails to comply with the provision of this Part of this Act or of a scheme in force there-under, and no penalty for the contravention or failure is expressly provided by this Part of this Act or the scheme, he shall be liable on summary conviction to a fine not exceeding one hundred pounds, and to a further fine not exceeding twenty pounds for every day on which the contravention or failure occurs or continues. I would like to know how many fines have been inflicted and how many prosecutions have been undertaken. It is not within my memory that there has even been one prosecution or one fine. I understood the Minister to say that he proposed to give the power of imposing fines to the Central Council. If that be the case, there will be fewer fines than there have been during the past four years, if that be possible. We are rather disappointed with this Bill. It was a good opportunity to deal with the whole of the 1930 Act. The Government have not taken the opportunity, and it is because we on this side have such a big interest in so many people whose livelihood is at stake, that I have the greatest pleasure in seconding the Amendment.

5.45 p.m.

Mr. R. T. EVANS

I have listened to this discussion with a considerable amount of interest, because although I had given the Bill and the circumstances under which it has been introduced some attention I had failed completely to make up my mind how I should vote. After listening to the discussion I am still very much in that condition of indecision, and before I make up my mind I shall want quite a number of points clarified by the Minister. The speech he made in introducing the Bill was a powerful one in many ways and persuasive in many respects, but I must confess that—