HC Deb 14 December 1937 vol 330 cc1069-93

8.5 p.m.

Mr. Shinwell

I beg to move, in page 13, line 41, to leave out "person entitled to the lease may require," and to insert: Commission may decide to be in accordance with the best interests of the industry as a whole. I hope the hon. and gallant Gentleman can see his way to accept this very modest, and, I believe, very desirable Amendment. Perhaps I had better explain what its purpose is. The Clause under review is one which provides for the provision of a lease to a freeholder, or leases to freeholders, as the case may be. In effect it means that a person being a freeholder who is in the ownership of coal may be granted a lease by the Commission if he is not in possession of a lease before the vesting date. There does not appear to be any substantial reason why a freeholder who has been compensated for his rights in coal should be entitled to a lease at all, but there may be circumstances which justify a lease and, if so, it is our submission that the right to such a lease should be limited in time. We are particularly concerned with Subsection (2) which says: A lease granted under this Section shall be granted for such a time, commencing on the vesting date "— and I direct attention to the following words— as the person entitled to the lease may require. These words are much too wide in character, and I cannot understand at all, although there is possibly a satisfactory explanation, why the Government allow these words to be inserted. The words we propose are: Commission may decide to be in accordance with the best interests of the industry as a whole. As this is a Bill where very wide powers are vested in the Commission in the interest of efficiency in the industry, it does appear to me that these words are more appropriate than the words in the Clause. At any rate, I am unable to comprehend why a freeholder, if granted a lease, having been compensated for his royalties, should be entitled to the lease as long as he may require. That may mean 100 years. Surely circumstances might arise where the Commission might wish to step in and interfere and revise the terms of the lease in the interests of the industry, or, to use the words of the Bill, "in the national interest." My interpretation of this Sub-section is that the Commission would be debarred from exercising such powers. There may be provision in some other part of the Measure which overrides this, but that is how I see it. I hope the Secretary for Mines will accept the words which I am moving. Unless the words are acceptable to the hon. and gallant Gentleman, I should be entitled to suspect that they intend to leave too much power in the hands of private interests. I hope I am wrong in that interpretation, but that is how it strikes me. Subject to any explanation the hon. and gallant Gentleman cares to offer, I move my Amendment.

8.12 p.m.

Captain Crookshank

I think the hon. Gentleman has overlooked the fact that in Clause 5 we have already decided not to interfere in any way with the existing leases. The leaseholders' position is safeguarded. Anyone who has a lease is entitled to work it until the end of his lease. It is a retained interest under Clause 5. That being so, the effect of this Clause is to adopt the same principle in the case where the working proprietor has bought the freehold and, because he has bought it, is not subject to a lease at all. I cannot see why he should be put in a worse position than a man who is working the coal as a result of a lease. I should have thought that the hon. Gentleman would have seen some merit in a working proprietor of a colliery undertaking looking to the future and saying, "For the better running of my undertaking I will buy the freehold of the coal, and I shall then have control over it." That is a commendable thing to do rather than a bad thing, and, if so, it seems to me very bad that he should be put in any worse position when the Bill came into operation; that although a man who has a lease is entitled to go on holding it, the other man who has sunk a lot of capital in his undertaking and has taken the initiative some time ago before there was any thought of a Bill, should not have the same rights.

Mr. G. Hall

How long is it to go on?

Captain Crookshank

I am merely dealing with a point as to why he should be in a position to be entitled to a lease. He purchased the freehold, and he ought to be entitled to work it. The Bill safeguards the position of a man with an existing lease, and the corresponding principle seems to us to apply to the working proprietor. We ought to say to him, "Yes, you ought to be entitled to a lease for such period as is reasonably necessary for enabling the coal to be worked out." That is the term of the period, not being longer than may be reasonably requisite for enabling the coal comprised therein to be worked out. The word "reasonably" would obviously mean, I should think, from the point of view of the Commission, not necessarily a lease for ever and ever, but sufficient time having regard to what is requisite to bring out the coal.

8.15 p.m.

Mr. Shinwell

I am very much obliged to the hon. and gallant Gentleman for his explanation. Can he say, in view of what he has just said, about the words: not being longer than may be reasonably requisite, why it is necessary to put in, as the person entitled to the lease may require.

Captain Crookshank

These words are necessary. The person would say, "I want a lease to work my coal," and the Commission might say in reply, "You can have the lease long enough to enable you to work out the coal, provided you do not ask for a term which is completely unreasonable."

Mr. Shinwell

Does not this mean that the Commission has no power at all in the matter and that once the lease has been granted it will be for as long as the person entitled to the lease may require it? It may be any period of years. There is no fixed point. In spite of the conditional words, not being longer than may be reasonably requisite for enabling the coal comprised therein to be worked out, does it not mean, in effect, that the Commission, once having granted the lease, has no power to terminate it? The Commission ought to be protected in this matter. I rather detected in the speech of the hon. and gallant Gentleman some little doubt as to the point he was making. If my assumption be correct, perhaps he would like to reconsider the matter.

8.17 p.m.

Mr. E. Evans

This is a small point which boils down to the question, on whom should be put the onus of establishing what term of years is the proper one? Under the Clause as it stands, if the applicant for the lease prepares a statement for the Commission, and says that he wants the lease for 99 years and that that is the term which he will require under the provisions of this Bill, he will not have to do any more. Then there is to be imposed on the Commission the onus of disproving his statement that the 99 years' lease is a proper term. It seems to me that the onus should be put upon the applicant to satisfy the Commission that the term of years for which he is applying is the proper term. I do not think there is very much in it, but, on the whole, it is the sort of principle on which

we act in legal matters, and it would be better to shift the onus.

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

The Committee divided: Ayes, 200; Noes, 122.

Division No. 59.] AYES. [8.18 p.m.
Acland-Troyte, Lt.-Col. G. J. Ganzoni, Sir J. Peaks, O.
Agnew, Lieut.-Comdr. P. G. Gledhill, G. Perkins, W. R. D.
Allen, Lt.-Col. Sir W. J. (Armagh) Gluckstein, L. H. Petherick, M.
Anderton, Sir A. Garrett (C. of Ldn.) Gower, Sir R. V. Plugge, Capt. L. F.
Anstruther-Gray, W. J. Greene, W. P. C. (Worcester) Pownall, Lt.-Col. Sir Assheton
Aske, Sir Ft. W. Grimston, R. V. Radford, E. A.
Assheton, R. Gritten, W. G. Howard Raikes, H. V. A. M.
Baldwin-Webb, Col. J. Guest, Maj. Hon. O. (C'mb'rw'll, N. W.) Rathbone, J. R. (Bodmin)
Balfour, Capt. H. H. (Isle of Thanet) Guinness, T. L. E. B. Reed, A. C. (Exeter)
Balniel, Lord Gunston, Capt. D. W. Reid, Sir D. D. (Down)
Beaumont, Hon. R. E. B. (Portsm'h) Hannah, I. C. Reid, J. S. C. (Hillhead)
Beechman, N. A. Hannon, Sir P. J. H. Reid, W. Allan (Derby)
Birchall, Sir J. D. Harbord, A. Rickards, G. W. (Skipton)
Boulton, W. W. Haslam, Sir J. (Bolton) Ropner, Colonel L.
Bowater, Col. Sir T. Vansittart Heilgers, Captain F. F. A. Ross, Major Sir R. D. (Londonderry)
Boyce, H. Leslie Hely-Hutchinson, M. R. Rowlands, G.
Brass, Sir W. Hepburn, P. G. T. Buchan- Royds, Admiral P. M. R.
Briscoe, Capt. R. G. Hepworth, J. Ruggles-Brise, Colonel Sir E. A.
Brocklebank, Sir Edmund Higgs, W. F. Russell, R. J. (Eddisbury)
Brown, Col. D. C. (Hexham) Holmes, J. S. Salmon, Sir I.
Brown, Rt. Hon. E. (Leith) Hope, Captain Hon. A. O. J. Salt, E. W.
Brown, Brig.-Gen. H. C. (Newbury) Hopkinson, A. Samuel, M. R. A.
Burgin, Rt. Hon. E. L. Horsbrugh, Florence Sanderson, Sir F. B.
Campbell, Sir E. T. Hudson, Capt. A. U. M. (Haek., N.) Savery, Sir Servington
Cartland, J. R. H. Hulbert, N. J. Selley, H. R.
Gary, R. A. Hunter, T. Shaw, Captain W. T. (Forfar)
Cayzer, Sir H. R. (Portsmouth, S.) James, Wing-Commander A. W. H. Shepperson, Sir E. W.
Cazalet, Thelma (Islington, E.) Jarvis, Sir J. J. Simmonds, O. E.
Chamberlain, Rt. Hn. N. (Edgb't'n) Jones, Sir G. W. H. (S'k N'w'gt'n) Smith, Bracewell (Dulwich)
Channon, H. Jones, L. (Swansea W.) Smith, L. W. (Hallam)
Christie, J. A. Keeling, E. H. Somervell, Sir D. B. (Crewe)
Clarke, Lt.-Col. R. S. (E. Grinstead) Kerr, Colonel C. I. (Montrose) Somerville, A. A. (Windsor)
Clarry, Sir Reginald Kerr, H. W. (Oldham) Southby, Commander Sir A. R. J.
Colfox, Major W. P. Kimball, L. Spens, W. P.
Conant, Captain R. J. E. Lamb, Sir J. Q. Stanley, Rt. Hon. Oliver (W'm'l'd)
Cook, Sir T. R. A. M. (Norfolk, N.) Law, R. K. (Hull, S. W.) Stewart, J. Henderson (Fife, E.)
Cooke, J. O. (Hammersmith, S.) Lees-Jones, J. Stourton, Major Hon. J. J.
Cooper, Rt. Hn. T. M. (E'nburgh, W.) Levy, T. Strauss, H. G. (Norwich)
Craven-Ellis, W. Lewis, O. Strickland, Captain W. F.
Crooke, J. S. Liddall, W. S. Stuart, Hon. J. (Moray and Nairn)
Crookshank, Capt. H. F. C. Loftus, P. C. Sueter, Rear-Admiral Sir M. F.
Croom-Johnson, R. P. Lyons, A. M. Sutcliffe, H.
Cross, R. H. Mabane, W. (Huddersfield) Tasker, Sir R. I.
Crossley, A. C. MacAndrew, Colonel Sir C. G. Taylor, C. S. (Eastbourne)
Crowder, J. F. E. MacDonald, Rt. Hon. M. (Ross) Taylor, Vice-Adm. E. A. (Padd., S.)
Culverwell, C. T. Macdonald, Capt. P. (Isle of Wight) Thomas, J. P. L.
Davies, Major Sir G. F. (Yeovil) Maclay, Hon. J. P. Thomson, Sir J. D. W.
Denman, Hon. R. D. Magnay, T. Touche, G. C.
Denville, Alfred Maitland, A. Turton, R. H.
Roland, G. F. Makins, Brig.-Gen. E. Wakefield, W. W.
Dorman-Smith, Major Sir R. H. Margesson, Capt. Rt. Hon. H. D. R. Walker-Smith, Sir J.
Drewe, C. Markham, S. F. Ward, Lieut.-Col. Sir A. L. (Hull)
Duckworth, Arthur (Shrewsbury) Marsden, Commander A. Wardlaw-Milne, Sir J. S.
Duckworth, W. R. (Moss Side) Mayhew, Lt.-Col. J. Warrender, Sir V.
Dugdale, Captain T. L Mellor, Sir J. S. P. (Tamworth) Waterhouse, Captain C.
Duncan, J. A. L. Mills, Sir F. (Leyton, E.) Wedderburn, H. J. S.
Eastwood, J. F. Mills, Major J. D. (New Forest) Welts, S. R.
Ellis, Sir G. Mitcheson, Sir G. G. Whiteley, Major J. P. (Buckingham)
Ellistion, Capt. G. S. Moore, Lieut.-Col. Sir T. C. R. Willoughby de Eresby, Lord
Emery, J. F. Morrison, G. A. (Scottish Univ's.) Wise, A. R.
Emrys-Evans, P. V. Munro, P. Withers, Sir J. J.
Entwistle, Sir C. F. Nall, Sir J. Wood, Hon. C. I. C.
Everard, W. L. Neven-Spence, Major B. H. H. Wragg, H.
Fildes, Sir H. Nicholson, G. (Farnham) Wright, Wing-Commander J. A. C.
Fleming, E. L. Nicholson, Hon H. G.
Fox, Sir G. W. G. O'Connor, Sir Terence J. TELLERS FOR THE AYES.
Furness, S. N. O'Neill, Rt. Hon. Sir Hugh Major Sir James Edmondson
Fyfe, D. P. M. Orr-Ewing, I. L. and Major Herbert.
Adams, D. (Consett) Griffith, F. Kingsley (M'ddl'sbro, W.) Oliver, G. H.
Adams, D. M. (Poplar, S.) Griffiths, G. A. (Hemsworth) Paling, W.
Alexander, Rt. Hon. A. V. (H'lsbr.) Hall, G. H. (Aberdare) Parker, J.
Ammon, C. G. Hall, J. H. (Whitechapel) Price, M. P.
Attlee, Rt. Hon. C. R. Hardie, Agnes Richards, R. (Wrexham)
Banfield, J. W. Harris, Sir P. A. Ridley, G.
Barnes, A. J. Harvey, T. E. (Eng. Univ's.) Riley, B.
Batey, J. Hayday, A. Ritson, J.
Bellenger, F. J. Henderson, A. (Kingswinford) Roberts, Rt. Hon. F. O. (W. Brom.)
Bevan, A. Henderson, J. (Ardwick) Roberts, W. (Cumberland, N.)
Broad, F. A. Henderson, T. (Tradeston) Salter, Dr. A. (Bermondsey)
Bromfield, W. Hicks, E. G. Seely, Sir H. M.
Brown, C. (Mansfield) Hills, A. (Pontefract) Sexton. T. M.
Brown, Rt. Hon. J. (S. Ayrshire) Holdsworth, H. Shinwell, E.
Buchanan, G. Hollins, A. Short, A.
Burke, W. A. Jagger, J. Silkin, L.
Cape, T. Jenkins, A. (Pontypool) Silverman, S. S.
Charleton, H. C. Johnston, Rt. Hon. T. Sinclair, Rt. Hon. Sir A. (C'thn's)
Chater, D. Jones, A. C. (Shipley) Smith, E. (Stoke)
Cluse, W. S. Jones, Sir H. Haydn (Merioneth) Smith, Rt. Hon. H. B. Lees- (K'ly)
Clynes, Rt. Hon. J. R. Kelly, W. T. Smith, T. (Normanton)
Cove, W. G. Kennedy, Rt. Hon. T. Stephen, C.
Cripps. Hon. Sir Stafford Kirkwood, D. Stewart, W. J. (H'ght'n-le-Sp'ng)
Dalton, H. Lawson, J. J. Taylor, R. J. (Morpeth)
Davidson, J. J. (Maryhill) Leach, W. Thorne, W.
Davies, R. J. (Westhoughton) Lee, F. Thurtle, E.
Davies, S. O. (Merthyr) Leonard, W. Tinker, J. J.
Day, H. Leslie, J. R. Walkden, A. G.
Dobbie, W. Logan, D. G. Walker, J.
Dunn, E. (Rother Valley) Macdonald, G. (Ince) Watkins, F. C.
Ede, J. C. McGhee, H. G. Watson, W. McL.
Edwards, A. (Middlesbrough E.) MacLaren, A Wedgwood, Rt. Hon. J. C.
Edwards, Sir C. (Bedwellty) Mainwaring, W. H. Westwood, J.
Evans, E. (Univ. of Wales) Mathers, G. Williams, E. J. (Ogmore)
Fletcher, Lt.-Comdr. R. T. H. Maxton, J. Williams, T. (Don Valley)
Gallacher, W. Messer, F. Wilson, C. H. (Attercliffe)
Gardner, B. W Milner, Major J. Windsor, W. (Hull, C.)
Garro Jones, G. M. Montague, F. Woods, G. S. (Finsbury)
George, Megan Lloyd (Anglesey) Morrison, Rt. Hon. H. (Hackney, S.)
Green, W. H. (Deptford) Muff, G. TELLERS FOR THE NOES.
Greenwood, Rt. Hon. A. Nathan, Colonel H. L. Mr. Whiteley and Mr. Adamson.
Grenfell, D. R. Noel-Baker, P. J.

8.26 p.m.

Mr. Peake

I beg to move, in page 14, line 5, at the end, to insert: Provided that the person entitled to the lease shall have the right on making application in writing in that behalf on or before the vesting date to the Commission to surrender to the Commission the compensation as existing owner to which he was held entitled under this Part of this Act and to a grant from the Commission of a coalmining lease for a term and subject to the conditions mentioned in this Sub-section save that the rent payable thereunder shall be a peppercorn rent. This is a modest but in no sense of the word a fundamental Amendment as to the position of the working proprietor of coal, the colliery concern which owns its own minerals which it is either working or going to work in the future. I think it is estimated that somewhere between one-sixth and one-eighth of the total area of minerals or royalties is comprised in minerals or royalties owned by working proprietors. In almost every case these minerals have been purchased for cash, and they have been purchased principally in the last 15 or 20 years, since the large landed estates began to be broken up; and, as the Secretary for Mines said on a previous Amendment, they have been purchased through the enterprise, energy and foresight of colliery concerns. The proposal in the Bill is that these colliery concerns should draw compensation for those mineral areas out of the £66,000,000, and under the Clause we are discussing they are to have the right to a grant from the Commission of the coal-mining leases for such a term … as the person entitled to the lease may require … and subject to such conditions with respect to rent and otherwise as are customary in the district. There is also a provision that if the colliery concerns cannot agree with the Coal Commission as to the terms of the lease, there shall be a reference to arbitration. The proposal in the Amendment is exactly similar so far as the machinery is concerned, but there is to be no transfer of money in either direction; that is to say, the mineral owner shall be entitled to surrender to the Commission the compensation to which he was held entitled under this Part of the Bill, and to a grant from the Commission of a coalmining lease, for a term and subject to the conditions mentioned in the Subsection, at a peppercorn rent. The machinery is precisely the same, the terms of the lease will be precisely the same, the ownership will be transferred to the Commission in exactly the same way, but under my proposal no money will pass from the Commission to the mineral owner by way of compensation, and no money will pass from the colliery tenant to the Commission by way of royalties. The financial transactions cancel each other out.

Mr. Shinwell

Will the hon. Member tell us why he is asking for the acceptance of this Amendment?

Mr. Peake

If my hon. Friend will show a little more patience he will find that I am coming to the reason. I do not put this Amendment forward on the grounds of injustice under the Bill to colliery concerns which own their own royalties. I think that on two assumptions under the Bill there is no injustice to the mineral owners. The first assumption is that the £66,000,000 is a fair figure for the royalties as a whole. If that figure is too small then we—and by "we" I mean colliery concerns which own their royalties—will suffer in exactly the same way as the other mineral owners will suffer; but if, on the other hand, as hon. Members opposite contend, the £66,000,000 is too big a figure, then nobody will suffer through our declining to take our share of the compensation. We shall be refusing what is, according to hon. Members opposite, a too generous offer on the part of the Commission.

The second assumption which we have to make in suggesting that there will be no injustice in the proposals under the Bill is that we shall be able to convince the regional valuation boards that minerals owned by colliery concerns are ipso facto more valuable than minerals owned by other people. It seems to me obvious that if there is a colliery linked to a mineral area, the two taken together are more valuable in the hands of a single owner than they would be if they were valued separately. If you own both a horse and a cart you are in a better position than if one person owns the horse and the other the cart. We shall, therefore, have to convince the regional valuation boards of the fact that these minerals, through being owned by colliery concerns, are more valuable than they would be in the hands of the ordinary mineral owner. If we can do that we shall suffer no injustice whatever under the proposals contained in the Bill; but I must confess that I am a little doubtful, in view of the constitution of these regional valuation boards, that we shall be able to convince them of the second proposition.

I am not putting this Amendment before the Committee on the grounds that the procedure in the Bill will inflict grievous injustice on the colliery concerns. I do not think it will do that. In fact, I think the only case where there will be any injustice under the proposal in the Bill will be at the hands of the Commission itself; and if I can explain that point to hon. Members who understand the difficulties about royalties and Mineral Rights Duty, I will do so. If these colliery-owned royalties are taken over by the Commission and immediately a loss has to be made, there will be a minimum rent reserved under the lease. There will be such a rent because it is one of the terms customary in the district. The colliery concern will not be any the worse off because it has to pay a minimum rent. It will have received a capital sum by way of compensation, and the interest on the capital will, obviously, be as much as, if not more than, the minimum rent which it will have to pay.

A minimum rent will became payable straight away, and the Commission, receiving a minimum rent, will become liable to hand over to the Exchequer the Mineral Rights Duty on the amount of the minimum rent. The working proprietor does not begin to pay Mineral Rights Duty until such time as he actually works the coal. Hon. Members will see that the Commission will, by the procedure proposed in the Bill, have to make three payments of Mineral Rights Duty, assessed on the minerals, and that these would not be payable if the minerals remained in the hands of the working proprietor. It seems to me that the only element of injustice in the proposal in the Bill is at the expense of the Commission.

The real reason why I am laying this Amendment before the Committee is that it will simplify and limit the scope of the financial operations of the Commission. It will be for the general convenience of the Treasury, if, instead of having to borrow £66,000,000, it has to borrow only £55,000,000. Obviously, the interest and the sinking fund charges upon £55,000,000 are smaller than upon £66,000,000. The costs of administration by the Commission will be smaller if it does not have to measure the amount of coal worked in these colliery-owned freehold areas. A great deal of the expense connected with the collection of royalties is taken up in underground surveys. If there is a lease in these areas owned by colliery concerns, these areas will have to be measured for the purpose of finding out how much royalty is payable. Under my proposal, by which no compensation is drawn on the one hand, and no royalty is payable on the other; all the expense and trouble in measuring up the areas worked in those places will be saved and be recouped to the Commission. The amount of the sinking fund and interest is reduced by one-sixth or one-eighth, and the costs of administration are reduced by a similar amount.

Mr. Gallacher

This proposal will abolish the Bill.

Mr. Peake

Not at all. The amount of the surplus will be reduced by a similar proportion. On the other hand, the area over which reductions of royalty have to be spread under the Bill, because of the savings which may be effected and which have to go back to the colliery industry, will be reduced by an exactly similar proportion. This proposal will save the trouble and expense of valuation and collection of royalty afterwards, and it will save the Chancellor of the Exchequer from having to issue a loan for £66,000,000 when he need issue one for only £55,000,000. For all these reasons I commend this Amendment to the Committee.

8.40 p.m.

Mr. T. Smith

I hold no brief for the coalowners, but I happen to have in my constituency a colliery company which is directly affected by this Amendment. I need not mention its name. This company has acquired 1,000 acres of freehold land, and is joint owner in an estate of 4,000 acres. These people are concerned about their position when the Bill becomes law. I quite understand what the Clause states. The position would be that this freehold land, this mineral estate, would be taken over by the Commission. Then there would be the granting to the colliery company of a lease. I am not voicing my own opinion in these matters. The colliery company wants to know how it stands, and it has as much right to use its Parliamentary representative for the purpose of knowing where it stands as has the miners' organisation.

The colliery company say that they would be quite willing to hand back to the Commission the whole of the compensation, if they could be satisfied that they would be granted power to work that land in perpetuity at practically no cost but a nominal rent. While they do not argue their case on the ground of injustice, they say that if the freehold were taken away from them they would feel that the action was unfair to them. I am raising this matter in the hope that the President of the Board of Trade will be able to make clear exactly what the position of the company will be when the Bill becomes law, and what his attitude is towards the Amendment.

8.42 p.m.

Mr. Shinwell

The hon. Member for North Leeds (Mr. Peake) has presented to the Committee a very ingenious theory. While nothing can be said against it on the ground of its ingenuity, we can say a good deal about it on the ground of practicability. The first thing is that it appears to me to be an attempt to contract out of the Bill. I think I state the position correctly that one-eighth of the coal in the country is in the possession of mining undertakings. The amount concerned in this proposal would, therefore, be comparatively small, but, as against that, there are two considerations. One is that we are concerned here with a very important section of the industry, that may be operating when many other parts of the country are no longer operating.

There is a much more substantial reason. Under the Bill there is power, as I see the matter, for colliery undertakings to purchase the royalty rights between the present date and the valuation date. They are not denied that power; that was, indeed, referred to on previous stages of the Bill. If colliery undertakings, looking ahead and thinking in the terms expressed by the hon. Member for North Leeds, decided to purchase coal royalties, there would not be only one-eighth of the coal in then-possession, but something like 50 per cent., or indeed more. What would then be the use of the Bill? The Commission would be left with a very small margin with which to deal financially.

Mr. Peake

I should be prepared to agree to a modification to limit the proposal to purchases made before, say, 1st November, 1935, to meet the point made by the hon. Gentleman.

Mr. Shinwell

I would remind the hon. Member that the proposal which he now makes is on all fours with one that we made from these benches yesterday, when it was suggested that certain rights exercisable under this Bill should only apply as from the date of the announcement of the Government's intentions in 1935. The hon. Member has now fallen for that suggestion, if I may use a commonplace expression. It is all very well for hon. Members who are concerned with colliery interests to accept proposals of that kind when their own interests are affected, but when the general national interests are concerned they rule them out. Even with the limitation that the hon. Member now proposes, the proposal, in my view, is most unsatisfactory, and I am inclined to think it will be most unsatisfactory from the standpoint of the Government; at least, I hope it will. I cannot imagine the Government agreeing to a proposal of this kind to stand out of the Bill—that is the first objection—and not only that, but to leave the road open for the operation of the same process by a very large section of the industry. That is a most objectionable proposal, and I am surprised that the hon. Member for North Leeds, who is usually so amiable and benevolently minded, should make it. I hope that the Government will not countenance for a single moment a proposal of this kind.

8.48 p.m.

Sir H. Seely

I am glad that the hon. Member for North Leeds (Mr. Peake) has brought forward this question, because, although I agree with much of what was said by the hon. Member for Seaham (Mr. Shinwell), the point is rather an important one from a colliery point of view. I agree with the hon. Member for Normanton (Mr. T. Smith) that we should like to hear the Minister's views upon it. Although it may appear to be merely contracting out, and to be likely to do damage in that way, it depends upon the view that is taken of what the idea of the Commission is going to be in the future. One hopes that the idea of the Commission is that eventually the royalty question will be liquidated altogether, but, if this Amendment be accepted, it will result in liquidating too early in one respect. People have been acquiring the freehold of their collieries in this way before the Bill came in. It has not been done in a sinister way, but merely with the intention, which many hon. Members feel should have been carried out before, of getting rid of the burden of the royalty owner. This proposal, however, would bring back those people into the position of having again to deal with royalty owners, who are to be slowly liquidated.

Although I admit that the hon. Member for North Leeds did not say there was any injustice, there are cases in which colliery owners have bought out their royalties at far higher rates than are being paid now. I myself have not done this except on a very small scale here and there, but in one case near to me the royalties were bought out for 34 years' purchase, whereas now only 15 years' purchase is being given. Those people will come back under the Commission, and will once more have to pay a royalty. I do not plead that there is injustice, because I do not think there is, but certainly they have not had the advantage to which they are entitled as a result of their policy, which is certainly for the betterment of the industry, of trying to wipe out the tie of the royalty owner. As many hon. Members know, a royalty owner can sometimes insist on your working certain parts of his royalty, perhaps to the detriment of the pit as a whole, because your lease is going to run out. You may have "shorts" in that district, and you may have to work out those "shorts" before the lease runs out. I hope it will not be thought that the people who have done this have done something that is sharp practice or wrong. They have really been trying to do what I think the Committee entirely agrees with, namely, to wipe out the difficulty of the royalty. I shall be very glad to hear what the Minister has to say on the subject.

8.51 p.m.

Mr. Jenkins

I think there cannot be the slightest doubt that this proposal would enable certain collieries to contract out of the Bill. The risks involved in the Measure are already great enough. We must remember that these mining royalties are being purchased, not by the State, but by the industry. It is true that they will not belong to the industry after it has purchased them, but nevertheless it is the industry that will be purchasing them. Let us assume—I hope it will not happen—that in the course of the next five or ten years there is a contraction of 20 per cent. in the industry. What then will become of the finances of the Commission? Surely they will be in a very strained condition. If we are to allow certain collieries to contract out of the Measure, the risk of difficulties arising in connection with the Commission's finances are pretty obvious. There can be no doubt that the collieries which own their royalties are, in the main, the better off collieries. They are the collieries which have been financially strong and have been able to purchase their royalties.

Moreover, in the great majority of instances where the collieries own their royalties, the charges have been rather low. I think it will be agreed that the average charge in the Northern coalfield is substantially below what it is in some other parts. In the days when these charges were fixed, South Wales was a highly prosperous coal-mining area, and, consequently, royalty charges there are at present, despite the acute and prolonged depression, at the rate of 8.6d. per ton, as compared with 5.6d. for the whole country, and as compared, in the case of certain better off collieries, with a charge of round about 3d. per ton. If the Commission is ever to be of any use to the mining industry, it will some day or other use its surplus to equalise the royalty charges. Are we never to expect any advantage? There are disadvantages enough under the Bill, but unless at some time or other the surplus in the hands of the Commission is such as to enable it to equalise royalties, there will be a continued measure of unfairness as between colliery and colliery. If we allow a sufficient number of the better off collieries to contract out of the Bill, as they would do, there is no hope at all of eliminating the disparities between royalty charges which exist at the present time. I think that this Amendment certainly ought not to be accepted. If it is accepted, it will make what I believe to be an already inadequate Measure for conferring betterment on the industry, still more inadequate. I think that as we have the Bill at present we must stand by the Clause as it is drawn, so that it includes the whole of the collieries.

8.56 p.m.

Mr. Wragg

I rise to support the Amendment, because it seems to me so simple that it ought to be accepted.

Mr. Gallacher

It may seem very simple to the hon. Member, but we are not very simple.

Mr. Wragg

I never thought the hon. Member was very simple; I think he is very dangerous. I support the Amendment, because I think that those colliery proprietors who have brought their minerals, and have paid, in many cases, probably more than they will receive under the Bill, and those who are taking a risk in working their own minerals, are on rather a different basis from those who do not work the minerals. I hope the Minister will recognise the difference between them, and accept the Amendment, which can really cause no hardship to the men employed in the industry. In fact, the ascertainment probably will result in an advantage to the men employed in the industry.

8.57 p.m.

Mr. Gallacher

When I listen to Debates here I get more and more astounded at the character of the arguments put up by hon. Members on the other side. I do not think anyone was ever exposed as was the hon. Member who moved this Amendment. I think it is especially important to direct the attention of the Committee and the country to the tenacity with which hon. Members on the other side fight for the interests of the big property owners and their utter disregard for the country as a whole, for the smaller people, or for industry as a whole. I said to the hon. Member, "Do you want to abolish the Bill?" He said that he did not want to abolish the Bill. But when the hon. Member for Seaham (Mr. Shin-well) showed how the Amendment could quite easily destroy the whole intention of the Bill, he admitted the force of the argument and made a jump to something which he had never been prepared to support before, namely, this proposal of, "Back to 1935." We are not saying there is an injustice but we remember what Hamlet said about the lady who "doth protest too much." Hon. Members would not keep on reiterating that there is not going to be any injustice, unless they had the feeling that there was going to be injustice.

If the right hon. Gentleman who was so sagely wagging his head just now is going to be of any use in delivering pulpit orations, he will have to know more about the operations of the human mind. These hon. Members want the Amendment because it will give an advantage to mineral owners. They suggest that between now and the valuation date another coalowner might buy the mineral rights; but what is the matter with that? The hon. Member said, "Cut him out; I am entitled to this, but he is not"; but if it is a desirable thing, why is it desirable for the hon. Member who moved the Amendment, and undesirable for another person who buys the mineral rights tomorrow? Can the hon. Member explain that?

Mr. Peake

I will. The hon. Member for Seaham (Mr. Shinwell) pointed out that if the Amendment were accepted as it stood, a collusive agreement might be made between now and the valuation date. It was the hon. Member's argument, not mine.

Mr. Gallacher

The hon. Member did not suggest anything about a collusive agreement. He suggested that between now and the valuation date a whole host of people might buy the mineral rights.

Mr. Peake

In collusion.

Mr. Gallacher

The hon. Member for Seaham did not say "in collusion." Are you suggesting that the whole lot of mineral owners are blackguards? If you say so, I will agree. But if it is a desirable thing, the particular date when the mineral rights are bought does not affect the matter. If it is a good and desirable thing for a certain proportion of the mineowners to carry it through, if it is going to be good for the industry, for the Treasury, and for the Commission, let some more people buy the mineral rights. This will be still better for the Treasury, easier for the Commission and better for the industry, but the peculiar feature about this very desirable thing is, that it is good for the hon. Member and the two or three companies that have mineral rights now, but he is prepared to take from every other mineowner the power to acquire royalties. I have listened to hon. Members here make appeals for getting rid of the royalties. Here is a Measure that is going to get rid of the royalties. For generations the miners, and the working classes generally supporting them, have been trying to get rid of royalties, but we have never got any support from hon. Members opposite. Certainly they are now going to help us. [Interruption.] I am not dangerous to the people of this country; it is the robber royalty owners and the robber mineowners.

I do not know at all whether the hon. Member who moved the Amendment is a good mineowner, but if he is, Heaven help the miners who work under bad mineowners. These are the men who are dangerous to the country, destroy whole areas of the country, and deprive the people of the right to the land, the right to work and the right to live. It is evident from the Amendment that we on this side cannot be too careful or too watchful of the tricks which the party opposite are prepared to play. The hon. Member wants to build a lifeboat for himself, and to knock the bottom out of the other life boat, so that the other mineowners shall not reach safety. The fact that he wishes to do that should dispel their readiness to support the Amendment.

9.7 p.m.

Lieut.-Colonel R. S. Clarke

I rise to support the Amendment, and I do not intend to say very much, as most of the more important points have been dealt with already. What I intend to say too will be in very general terms. As regards "contracting out," I should have thought that the last two lines in the Amendment, where it says: subject to the conditions mentioned in this Sub-section, referring, of course, to page 14, line 4 of the Bill, where it states that leases shall be granted subject to such conditions as may be reasonable would have covered the point. I have sometimes heard in the past criticisms that mine owners are not progressive and that they lack foresight. I do not believe that, and I believe that we have here an example showing the contrary. Here you have one-sixth of the mineowners of the country who have had the foresight to buy their royalties. They have forestalled the Government in this matter, having foreseen the benefit that they would enjoy by doing so. They have gone further than the Government propose to do, because they have wiped out for themselves the royalty rents altogether. They pay no royalty rents at all. When this Bill is passed, royalties will still be paid, but to different people. They will suffer as the Clause stands at present for their foresight, and that is discouraging to them and to those who control other industries who may think of doing the same thing and exercising foresight.

The object of the Government is, I believe, to try and do away with royalties. These companies have to a certain extent already done so. In a way the Government are proposing in their case to re-create them. They ceased to pay these rents, but here they are going to be asked to pay them again. Further, I do not think it is altogether right to say that they will not be losers at all financially. They may suffer actual loss in two ways. It is possible that the amount of the compensation that they are given will not be equal to what they have paid for these royalties perhaps in quite recent years. Again, I believe that when they come to spend the interest on the compensation which they get on fresh royalty rents, they may find that it will not meet them, and they will have to put in fresh money. I do not say that they have a grievance, but I feel that they may suffer a little as a result of this Clause.

The royalties which these collieries hold are somewhat different from those of the ordinary royalty owners. They have not bought them as an investment but as a company buys raw materials, so as to facilitate the work of its trade. I hope that that view will perhaps appeal to hon. Members opposite, who, of course, have different views with regard to royalties to what we have. For these reasons, I appeal to the Minister seriously to consider the Amendment.

9.12 p.m.

Mr. Mainwaring

The Amendment before the Committee has been described as an effort to contract out on the part of a little group of royalty owners, and hon. Members opposite have endeavoured to put it forward in the best possible light. One hon. Gentleman suggested that it really is going to benefit the miners. The hon. and gallant Gentleman the Member for East Grinstead (Lieut.-Colonel Clarke) said that they bought the royalties as raw material, he charged the Commission with abolishing royalties in order to re-introduce them, and he said that the companies bought royalties themselves in order to abolish them. Surely, that is rapidly becoming a fine example of the complications in the mining industry. What are the mineowners thinking of in regard to this matter? The mineowners and royalty owners and the Commission have been mentioned already; therefore, may I introduce the poor miner who would be very deeply affected if this Amendment were carried?

I do not suppose that any hon. Member opposite with coal-mining interests would care to suggest that, when they have bought the royalties, they should also withdraw the price of the royalties from the ascertainments. No one will suggest that they should withdraw the royalties from the industry. All that they do is to substitute themselves for the other royalty owners. The colliery companies in that case are not merely drawing profits as coalowners, but royalties as royalty owners also, and the ascertainments in their areas are not one penny less. If they proposed for the future to regard royalties as having been abolished altogether as a principle in their separate undertakings, and they regarded all the net surplus of the undertakings as available as dividends for the colliery shareholders alone, how would it affect the other collieries in this country? South Wales pays already an average of about 8d. per ton for royalties. They would then have to compete with collieries that have no royalties to pay at all. [An HON. MEMBER: "They have no capital sum given to them."] I know that, and we are not discussing it now. I am pointing out how this will react on wage conditions.

The object of the Bill is to relieve the industry in some way, but the net result of the Amendment would be to intensify competition within it, because collieries paying royalties to the Commission would have to compete with collieries which would pay no royalties at all. The whole thing is really ridiculous. It is an attempt by a few colliery owners who, for their own purpose, have bought their royalties to be relieved of paying royalties for ever. It is an attempt to consolidate the selfish interest of these few colliery owners, and I think it would reflect very little credit on the Government if they showed the slightest sympathy with a proposition of this kind. For my part, I think we need not wait longer than the terms already suggested for the valuation period for the House to be convinced that this Bill is utterly impracticable. We shall yet see how hopeless a proposition of this kind is. We need not wait five years for the Commission to declare themselves bankrupt under the financial proposals of the Measure, and to have to create stock which will be irredeemable. I oppose the Amendment on principle and not on account of the effect which it is likely to have on the industry.

9.17 p.m.

Mr. Wise

It is not often that I disagree with the hon. Member for North Leeds (Mr. Peake), but when he said that he regards the hon. Member for West Fife (Mr. Gallacher) or indeed any of those who have spoken against the Amendment as in any way dangerous, I profoundly disagree with him. If they present their case badly to the electors, they are not likely to be returned, and if the electors are prepared to swallow the sort of nonsense which we have heard, then they deserve everything that is coming to them. There are two or three main misconceptions in regard to this proposal. One is that it contains some idea of contracting out of the Bill. The idea of the Bill is to transfer the ownership of royalties from private individuals to the Coal Commission, and the Amendment does not propose to interfere with that in any way. The only difference is in the form of a book entry.

The other objection that has been put forward by hon. Members opposite is that in some mysterious way the coalowner is going to get a tremendous profit out of it. I do not know how they can square that with their previous utterances on the Bill. They have announced long, loudly, and with almost wearisome reiteration that the sum proposed as compensation for royalties is far too large—[HON. MEMBERS: "Yes"]—and they are still of that opinion. In that case it is a little ungracious for hon. Members opposite to denounce the wicked coalowner for refusing to take it and to waive this gross over-payment which hon. Members opposite denounce so much. We must have a certain consistency even among progressive minds.

Mr. George Griffiths

If no royalties are paid, will the coal owners then put the amount of their royalties into the ascertainment for wages?

Mr. Wise

I would remind hon. Members that I do not speak as an expert in the coal industry but merely as a private Member who has some idea of logic, which seems to be lacking in hon. Members opposite. The other point raised was that the Coal Commission would find great difficulty in meeting the interest payments to the owners of coal other than the coal covered by the Amendment, because they will not be able to draw royalties from the companies which are working their own coal. Surely it is fair to balance against that the fact that they would not have to pay interest to companies which are working their own coal, and if it is a fair sum, then the Coal Commission is going to be no worse off unless it is in the mind of hon. Members opposite that in the very unlikely event of their ever coming into power they are going to use the Coal Commission in order to exact unnecessary royalties from one set of coalowners to cover unnecessary differentiations on others.

There is nothing sinister in the Amendment. It is a perfectly simple adjustment, and one which I think is more satisfactory than the idea of removing a man's property and paying him for it, and then charging him rent. Under the Amendment the property will pass as the Government intend it to pass under the Bill, and all that will happen is that the two sets of payments will balance out against each other. On the question of the ascertainment, I prefer that some hon. Member who is connected with the mining industry should reply, because I frankly admit that I have no interest in coal, and I am not an expert on the way in which ascertainments are made.

9.23 p.m.

Mr. Stanley

I am not going into some of the matters which have arisen in the course of the discussion. For instance, I am not going to discuss the comparative danger to the country of the hon. Member for West Fife (Mr. Gallacher) and the robber royalty owners. After all, the Amendment raises a comparatively narrow point, indeed, narrower than some hon. Members appear to realise, because when they talk of the Amendment enabling anyone to contract out of the Bill, that is not strictly true. The only thing it enables them to do is to contract out of the financial provisions of the Bill. I want to make the matter plain, because we should understand perfectly what the Amendment means. The Coal Commission will have exactly as much control over this coal as it has over other coal, and to that extent there will be no contracting out. No hon. Member as yet has met the Amendment and, perhaps, they will excuse what looks almost like impropriety on my part if I refer for a minute or two to the actual terms of the Amendment, because, quite apart from any question of principle, I must point out certain things in the Amendment which appear to me to be quite unacceptable.

The first point is that under this provision the working proprietor is to be given an option. He is to be able to choose whether he stands with the rest of the royalty owners under the Bill or whether he has the advantages, or disadvantages it may be, of the new proposal of my hon. Friend. That, clearly, is wrong. Either it is right that a working proprietor should not be subject to the same provisions as other royalty owners or, if it is right that one should be exempted, it is right that they should all be exempted. What is clearly wrong is that they shall have an option and be able to choose, if in some circumstances, as I believe, it is more beneficial to them to be under the operation of the Bill as it stands that they should have it, and in any other circumstances, where it may be to their advantage to have the new proposal, to have that. Whatever else may happen, they must all be treated equally.

The second point is that this asks for a peppercorn rent. That, clearly, is quite impossible. The hon. Member pointed out that the Commission has to assume now as a lessor the burden of the mineral duties and other taxation, and, therefore, it would mean not only that the Coal Commission could not gain, but it would be an actual loser by the transaction. The other extremely great difficulty, to which the hon. Member did not address himself, and in which, from the pure point of view of machinery, I see the utmost difficulty, is the question of valuation. It is clear that under this proposal or any proposal of a similar character, even if no money is to pass and the two sides are to cancel out, the property must be valued, because it is part of the £66,000,000, and we have to know what is the total valuation of all the properties, and by how much is the 66,000,000 to be reduced. The whole machinery of valuation in the Bill depends on the fact that the people who are to have a claim for compensation for a particular property have every incentive to press that claim to the full, and to make the best claim they can for the highest amount of compensation. If this proposal were accepted, the working proprietor would have no such incentive. It would not matter to him how big was the amount of compensation allotted to him, because, in fact, he would not be going to take it. It is quite possible, therefore, that out of kindness of heart to the other royalty owners in the district who are to be remunerated out of the global sum, he might be quite content not to press his own claim which, anyhow, he is not going to be paid, and to allow it to go by default. The result of that would be to inflate the compensation that would be received by the other royalty owners. That, too, is an obvious difficulty, even if it is only one of machinery, which up to now has not been dealt with.

But, quite apart from the Amendment, which I think the hon. Gentleman will himself see in its present form is quite unacceptable, let me deal with the principle involved. Quite frankly I am not impressed by some of the arguments which have been used from the other side. They seem to be based more on prejudice than on careful consideration of the Amendment, and I think some of them have been unfair. I think at any other time they would have been quite prepared to agree that the working proprietor has stood in quite a different relationship to the industry from the ordinary mining royalty owner. After all, he has been venturing his capital in the business. He has been performing a function in the business, and ownership of the royalties has been part of that function, whereas the criticism of hon. Members opposite is that the mining royalty owner has ventured no money and has been performing no function. Therefore, hon. Members would look on the working proprietor in a different light from the ordinary mining royalty owner. I certainly want to see that that man suffers no unfairness as the result of the Bill. But, of course, the hon. Gentleman who moved the Amendment did not say that any injustice was done. He did not make out a case of that character. The scheme of the Bill is drawn on the basis that all royalty owners should be treated alike. That is a scheme which could obviously only be abandoned, even in quite a small instance, if a very definite case of injustice or hardship could be made out.

There were, however, some parts of the hon. Gentleman's speech which I did not quite understand, and which I certainly should like to consider. First of all, he was frightened that in some way or other the working proprietor would not get a fair deal in the process of valuation, that not sufficient importance would be attached by the other mineral agents who were doing the valuation to the joint possession of the royalty and the mining undertaking. The other was whether the Coal Commission, in granting a lease to the working proprietor, would also take into consideration the particular circumstances under which he had come for a renewal of the lease. To suggest that we should see that in those two respects there is no injustice to the working proprietor is, of course, a very different matter from suggesting that we should take them out of the ordinary scope of the Bill. As I say, the Amendment is unacceptable, but I am prepared to consider whether there is anything that can be done to assist the case of the working proprietor before the valuation committee, or whether it would be right in any way to direct the Coal Commission, when they come to grant a lease to a working proprietor, to have any special regard to the circumstances in which he comes to ask for that new lease.

Amendment negatived.

Clause ordered to stand part of the Bill.