§ Order for Second Reading read.
§ 3.46 p.m.
§ The President of the Board of Trade (Mr. Oliver Stanley)
I beg to move, "That the Bill be now read a Second time."
A fortnight ago this House was discussing the Address in reply to the Gracious Speech from the Throne and, in the course of those discussions, an Amendment was moved from the Liberal benches which urged upon the Government the necessity to take action in advance to minimise what they called the approaching slump. In that Amendment, certain suggestions were made as to the things that could be done. It was suggested that steps could be taken to increase national trade, to encourage Empire migration, and to prepare a large programme of public works. In the course of my reply I suggested that from this list of possible steps which could be taken in advance of any recession of trade there was one notable omission. It was that when times were good we should try to organise individual industries so as to enable them to resist, with increased strength, any recession of trade that might come upon them. I cite this Bill as an example of that kind of action. I venture to suggest that that consideration is one which we must always have at the backs of our minds during the discussions of this Bill—that it is an attempt to strengthen the organisation of this all-important industry, not only in order to help it during good times, but even more to give it some protection when bad times come.
The Bill itself is, I am afraid, both long and complicated. We shall, of course, have ample opportunities, not only during the two days of the Second Reading Debate, but no doubt during many days in the subsequent stages of the Bill, to discuss it in detail. Therefore, on this occasion I propose to confine myself to a broad general survey of its main provisions. Even so, I fear that with a Bill so complicated it is impossible to explain it in a very abbreviated time, and I ask for the indulgence of the House, because if I were to allow myself to be 872 led away by questions into by-paths, however interesting, to deal with subjects however important—subjects which could well be dealt with in subsequent answering speeches—it would, I am afraid, make a task, which is already long, intolerable both to the House, and, I may say, to myself.
The Bill falls into four parts. One of those four parts consists of miscellaneous provisions important enough in themselves, but not affecting the main survey of the Bill. The other three parts are those which deal with the unification of royalties; with compulsory amalgamation, and with the continuance of Part I of the Act of 1930 which relates to the regulation of the production and sale of coal. I will, if I may, deal with all those three topics, which are quite separate in themselves, though, of course, there is a connection running through them, and I propose to deal with them in the inverse order and to start with some words upon Part III of the Bill, the Part which provides for the continuance of Part I of the Act of 1930. Hon. Members will recollect that the time when the Act of 1930 was introduced in this House was a time when coal prices were slumping badly. Already we began to see and to feel the first stages—indeed, more than the first stages—of the decline of the coal industry. That legislation was legislation which was hastily devised and introduced to meet that situation. It was an attempt to deal, not only with prices which were falling, necessarily because of over-production, because the potential supply was greater than the demand, but also to deal with a situation where prices were being forced unnecessarily low by the under-cutting which was going on between respective collieries in their competition for the shrinking market.
I do not pretend that Part I of the Act of 1930 was either a particularly good bit of legislation or that it worked particularly well. It provided for a system of quantitative regulation which was intended to bring production nearer the existing demand and for a system of minimum prices designed to prevent this uneconomic price-cutting which was going on between respective collieries. In the event it proved to be, as I said, not very satisfactory in its working out. There was considerable evasion of that part of the scheme which dealt with minimum prices, although, I think, it is true to say 873 that the provisions for the regulation of production did do something to steady the decline in prices. But whatever the criticisms of this Act of 1930 were at that time, whatever the defects. which appeared in its working, whatever arguments you could then use either for or against its continuance, to my mind the situation was radically altered in 1935.
Hon. Members will recollect that the autumn of 1935 was a period of very grave concern in the coal industry, and therefore it was a period of grave concern for the people as a whole. The owners at that time were faced with demands from the miners for an increase of wages. Those demands enlisted a great body of public support, coming from all quarters, and hon. Members will recollect that in this House the support for those demands was not confined to any one party or to any one side of the House. On the other hand, it was demonstrably true, to the miners themselves, that the proceeds of the industry on the then existing basis were not sufficient to meet the demands which they were making and in which they were being supported by public opinion generally. It appeared to most people that there was only one way out, and indeed it was a solution which was urged upon the parties to the potential dispute from all quarters, and it was urged in this House by all sections of opinion. It was that there should be a scheme to enable the proceeds of the industry to be put upon a better basis, to increase the price which was being received for the coal, so that out of that bigger price, out of those bigger proceeds, some part at any rate of the demand of the miners for increased wages could probably be met.
Accordingly, hon. Members will recollect that the colliery owners, as part of the settlement of what might have been a dispute with catastrophic consequences, gave an undertaking that they would set up an organisation which would give complete and effective control of the sale of coal in each coalmining district, and that there would, be coordination between districts through a central council. Those undertakings were carried out, and selling organisations were brought into operation by am amendment of the schemes which were already existing under Part I of the Act of 1930. Now that Act of 1930 is their sole statu 874 tory sanction; the life of those selling schemes depends upon the life of that Act. To my mind, to let them lapse, as in fact they would lapse if this Part of the Act of 1930 were not continued—first, as it is now, for a limited period under the Expiring Laws Continuance Act and, secondly, under the Bill the Second Reading of which I am now moving—would be a breach of faith, because there is no doubt that it was the promise of schemes such as these and the improvement which they could bring in the proceeds of the industry which were responsible for averting this disastrous stoppage in 1935.
It is quite true that conditions in 1937, to-day, when we are discussing this Bill, are quite different from the conditions of the autumn of 1935. The coal industry as a whole took a sudden and marked turn very shortly after that period. A marked improvement in the demand for coal set in, and what has been a period of great glut became very quickly a period almost of scarcity. That was naturally accompanied, as any such change must be, by a rise in the price of the commodity, a rise in the price of coal, and as this rise coincided to some extent with the introduction of these schemes, these schemes have in some quarters been blamed for the increase. I believe that to be quite unjust. My hon. and gallant Friend the Secretary for Mines last summer carried out and presented to Parliament a detailed investigation into the working of these schemes, and in that report he stated, as I believe to be the case, that the ordinary operations of supply and demand had had more effect on coal prices during the past few months than the organised selling schemes. My own view certainly is with regard not only to these schemes but to any schemes for the regulation of prices such as these, that in fact they have much more effect in minimising a slump than they do in exaggerating a boom. But, some people will say, if in fact to-day, whatever the cause may be, the price of coal has risen and the proceeds of the industry are on a more satisfactory basis, if it was possible out of them to pay the increased wages which the miners then demanded, why have we got to go on with these selling schemes and with the Act of 1930, which gives them their only sanction? My answer is because it is necessary, I believe, in the case of this all- 875 important industry, to think ahead and to prepare in more prosperous times for a possible recession, even if we hope that that recession will not take place.
I regard these schemes, even if they are not effective in times of rising prices such as we have seen in the past few months, as a real and valuable insurance against a time which may well come again, as it came before, a time when prices are not rising but falling. If we had not these schemes, if trade then weakened, you would see, I am sure, reproduced exactly the same conditions that you saw in 1930. You would see, first of all, an excess of productive capacity, then a struggle for markets, then internecine competition between the pits, and then prices forced even lower than was necessary, with the result that the proceeds would be insufficient to give an adequate return either to capital or to labour. I believe, therefore, the continuance of these schemes to be an essential part of any long-term policy for the coal industry. But still the Government are conscious that complaints have been made about the workings of these schemes and the effect of these schemes upon the consumer, and they are anxious to see that within the main purposes of these schemes nothing shall be done to prejudice the consumer, and that there shall be other machinery provided to see that justice is done to him. It was with that object that in this Bill, while seeking to continue Part I of the Act of 1930, at the same time the Government seek to amend it in order to strengthen the position of the consumer.
I will just detail briefly to the House what those Amendments are. Hon. Members will realise that under these schemes the chief safeguard of the consumer lies in the committees of investigation. Those committees consist of an independent chairman, as to half of members representative of the consumers, as to a quarter representative of the colliery owners, and a quarter representative of the mine workers. It is to these committees that appeals from the consumers go. We do not propose any change in the personnel of those committees, with this sole provision, that the chairman in future shall always be, as in fact by administrative action he now is, a member of the legal profession. We also propose that in any case where a committee is not 876 unanimous it shall be the chairman who will give the decision. It is most important that these decisions shall be given quickly and decisively.
That leads me to the next point, the question of delay. There have been a good many complaints as to the time taken for any application to be heard by these committees. That has very often been due to the difficulty there has been in securing the attendance, sometimes of the chairman or of particular members of the committees. We propose in future to have a panel of reserve chairmen and also that every member of a committee shall have a substitute member who will be able to sit if the permanent member is unable to be present. There is the question of publicity. Publicity in these cases is often more effective in itself than the decision which follows an application Hitherto all the meetings of these committees have been held in private. There has been a considerable amount of pressure, on behalf of those who represent the consumers, for public hearings. On the whole I think that that is right, although I recognise that there are cases where private hearing is necessary. We therefore provide that evidence shall he taken in public in future, except when it relates to the particulars of a particular business, or unless for some reason the committee itself decides otherwise. In any case all decisions are to be given in public.
Another cause of complaint from the consumers was that, as the machinery stood before, the complainant before a committee was not aware of the answer that was to be put in to his complaint; it was never made available to him, and he was not therefore in a position to counter any of the arguments that were used. Under the new machinery power will be given to the committees of investigation to disclose to the complainant himself the answer given to a complainant's case, excluding only information which relates to the details of a particular business.
Finally, we propose to set up a central appeal tribunal, to which appeals against the decisions of the committees of investigation can be taken. That Appeal Tribunal will consist of a chairman and two independent members, and its award will be final and binding on the parties. I believe that these Amendments will lead 877 to a definite strengthening of the machinery for the protection of the consumer, and that they will in fact give reasonable security against injustice under the scheme.
§ Mr. Stanley
Sometimes, of course, the committees divide themselves into the consumers on one side and the representatives of the industry on the other, and in these circumstances I thought it was more convenient that if unanimity cannot be secured it should be the chairman who should give the deciding vote.
Now I pass to Part II of the Bill, which deals with the provision for compulsory amalgamations. To my mind, just as the events of 1935 altered the situation with regard to the selling schemes, so the existence of those selling schemes has altered the situation with regard to compulsory amalgamations. I believe that the public, realising the objects of these schemes, approving the attempt to meet the miners' demand for increased wages, acquiesced and acquiesced readily in an attempt to raise and maintain the price of coal at a level sufficient to give a proper return; but the fact that they acquiesced only makes it, I believe, doubly necessary that we should see that that minimum which they are called upon to pay should not be unnecessarily raised by any possible defects in the organisation or administration of the industry, and it is just, at that point, to see that no remediable defects are allowed to go unremedied when these proposals are made.
It is said that there is no political proposal without a history. These proposals for compulsory amalgamation have had both a long and a stormy one. There are really two points that we have to consider: First of all the case for amalgamation, and then, if you think the case for amalgamation is made out, you have to consider whether it is sufficient to justify the use of compulsion. With regard to the question of amalgamation, its advantages and disadvantages have been argued in public and private ad nauseant for the past 20 years, and there is very little new that anyone can add to the arguments that have already been adduced. The Sankey Commission, the Samuel Commission, the Essendon Cornmittee, all discussed the matter, and all 878 of them were in favour of amalgamation in one form or another.
If I may I would summarise the reason which these various bodies gave for the conclusion at which they arrived. First of all they argued that with coal mining as with other industries there is a certain optimum size of unit, a size which is the best to secure economy of cost without at the same time being unwieldy. It is true, of course, that the coal mining industry is in a different position from most other industries, and that you cannot physically combine two units as you can combine two factories. It may mean, therefore, that the economies yolk can get are less, but it does not mean that they are non-existent. There are quite a lot of things ancillary to the working of the mines which can in fact be combined. It is impossible, of course, to dogmatise as to what is the optimum size of unit; it must vary with conditions. But all must acknowledge that in different conditions and in different areas there is such an optimum size at which one must aim.
The second point they make rests on the number of units. The number of independent units is nearly 1, 000. It is quite true that the coalowners in resisting any proposal for amalgamation point to the fact that, as they say, 77 per cent. of the output is concentrated in 129 undertakings. I think that in putting forward these figures they are rather apt to forget the strong argument for amalgamation provided by the converse of the figures that they themselves put forward. If it is true that 77 per cent. of the output is concentrated in 129 undertakings out of nearly 1,000, then it is equally true that over 800 of these undertakings are responsible for the production of only 23 per cent. of the total output of coal. It is quite clear that if you have those large numbers of units, the problem of securing common action for any purpose, except perhaps for a political one, becomes extremely difficult, and the existence of that 23 per cent. in those many hands is just enough to upset any common action which may be taken by the 77 per cent. in the fewer and stronger hands. It makes therefore the problem not only of securing but of maintaining any common action extremely precarious.
On this point I think that, perhaps, the Essendon Committee was the most interesting of all. As hon. Members will 879 recollect, that committee was set up with the terms of reference, "to consider selling methods in coal." It was not, therefore, directly asked to consider amalgamation at all. The committee came to the conclusion that, even looking at the industry from the point of view of selling, they were bound to consider and to urge amalgamation as being urgently necessary and desirable. If that is true as a necessary background to methods of selling at home, I believe it can be equally and even more true as a necessary background to improve methods of selling abroad and the measures for increasing our export trade.
Thirdly, a point which they all stress is this: the coal industry is an industry with a large potential excess capacity, and that it is only by the creation of these larger units that the industry can hope to adapt supply to demand, and by doing so secure the greatest economy in costs. Of course I know that other considerations than the purely economic one, social considerations ofttimes—they are raised in the Amendment to be moved by the right hon. Gentleman opposite—enter into this matter. It is only in a Fascist or Communist State that this economic theory can he carried to its logical limit, but if there are limitations upon the pure economics imposed by the social consideration, it does not follow that the industry should not at least organise its policy as far as those other considerations will permit it to go.
I think I can best sum up the case for amalgamation in the words of the Coal Mines Reorganisation Commission. This is not a sort of doctrinaire body, as some have imagined. It has on it two leading industrialists, and, as hon. Members know, a gentleman who is very prominent in mining trade union circles. In their report in 1933 they say:The crying need of the industry is for planned co-ordination in all its phases, development, production, treatment, marketing and research, and this can only be achieved by amalgamation in some form.I cannot help thinking on this first question, the question of whether amalgamation in itself is a good thing, that if there was no question of compulsion bound up with it there would be very little criticism of amalgamation. With many people it is the fear of being compelled to do something which is the 880 real reason for their disapproving it. The second part of the question deals with compulsion. That can be put quite simply. If the interests of the public demand that there should be no undue increase in prices owing to any defect in the machinery of the organisation of the industry. I believe that, whatever the quantity or magnitude of the defects, Parliament in the interests of the public is responsible for seeing that these remediable defects are not allowed to continue.
I know that the answer of the opponents of compulsory amalgamation would be that if there are any defects, the business men who are responsible for the running of the industry will be the first to see those defects and to remedy them voluntarily. To a large extent that is true, but it is not 100 per cent. true. Many hon. Members who may not be particularly conversant with the coal industry have knowledge of some industry or other, and I would ask them how often in the businesses which they know they have come across a case where some personal prejudice, some personal enmity of stupidity or cupidity have held up schemes which they believed to be demonstrably sound. In the case of ordinary industry it may not matter to Parliament if that is so, and it may be argued that it will, at any rate, bring its own punishment. It does matter to Pa rliament in the case of the coal mining industry where you have a selling organisation. which I have been describing, and where, if punishment follow s, it falls not on those who are responsible for the defects and not on those, therefore, who would deserve retribution, but, through the operation of the selling scheme, it is bound to fall upon the consumer and the public.
It is a long time ago since Parliament recognised the necessity for some element of compulsion in the question of amalgamation. Some hon. Members may forget that the first step in this direction was not taken by a Socialist Government or by the National Government, but by the purely Conservative Administration of 1924, which, by the Mining Industry Act, gave power to coalowners who desired amalgamation to force it upon other owners in the area who rejected it, subject, of course, to a decision by the Railway and Canal Commission upon two safeguards. These were that it was in 881 the national interest and was fair and equitable to all parties. That scheme recognised one fundamental principle of compulsory amalgamation, namely, that it is no good trying to amalgamate a number of people all of whom are hostile to the proposal for amalgamation. You do not want to devise merely a paper scheme; it has to be worked, and it cannot be worked unless there is in the area some measure of good will for amalgamation.
Although I believe that in theory the provisions of the Act of 1926 were right, they did not work out in practice, for a simple reason. That was the psychological reason that no coalowner, however desirable he might think amalgamation was, was ready to incur the personal odium which was bound to follow in the district if he were responsible for setting in motion these compulsory powers. It was, therefore, in 1930 that under the Socialist Government, with Liberal support, the scheme was amended, and powers which have been given to the owners were given to an outside body, namely, the Coal Mines Reorganisation Commission, to prepare and initiate schemes. Again, as in 1926, the Rail- way and Canal Commission had to decide on safeguards, of which there were now four—the national interest, the possibility of lowering the cost of production and disposal of coal, the scheme should not be financially injurious to any party, and it should be fair and equitable to all persons affected.
As in the case of the 1926 Act, the 1930 Act was largely inoperative. Many years were spend in trying to persuade owners to amalgamate voluntarily, and finally we had the case which is familiar to many hon. Members, namely, the West Yorkshire case. That is the first and only scheme which, under any of these proposals for compulsory amalgamation, has ever been referred to the Railway and Canal Commission. It is interesting to note that that was not a scheme forced on an unwilling area. As a matter of fact, it had the support of over 90 per cent. of the owners, representing over 80 per cent. of the output. In the end it was turned down, the actual ground being that it was not a real amalgamation. Yet the case in all its implications raised doubts whether any other case brought under the 1930 Act could hope 882 to succeed. My predecessor and the Government were advised that without, some amendment of the Act of 1930 it was impossible to expect successful, applications to the Railway and Canal Commission.
That was the reason for the Bill introduced by my predecessor last summer. The Bill was stillborn, if such an expression accurately describes what I recollect was a noisy afternoon. That Bill made an attempt to introduce machinery of a different character. I need not elaborate what the provisions were, but they were found unacceptable. in this Bill we return much more closely to the framework of the 1930 Act and try to amend the machinery in order to remove the defects which made that machinery unworkable, while retaining all the safeguards of the original Act. The chief alterations which we propose are these: First, the work under the Act will be transferred from the Coal Mines Reorganisation Commission to the new Coal Commission under Part I of this Bill. It is an old complaint against the Coal Mines Reorganisation Commission, and I believe an unjustifiable complaint, that these amalgamations were their only function; and it was said by some people that as their only function was to amalgamate, they must amalgamate in order to justify their existence. I do not believe that that was true. At any rate, it is an argument which it will not be possible to put forward against the new body, which will have many and responsible duties apart from the question of amalgamation.
The other alterations are in connection with the safeguards. The scheme of 1930 provided for four safeguards which were all treated on the same footing—as being capable of legal proof. As such they were left to the decision of a legal tribunal, the Railway and Canal Commission. I believe that to have been a mistake. Of the four, two of them—that the scheme should be fair and equitable, and that it should not: be financially injurious to anyone—are capable of legal proof and capable, therefore, of decision by a legal tribunal. The questions whether the scheme is in the national interest and is likely in future to lead to a lower cost of production of coal are not capable of legal proof and are not, therefore, capable of decision by a legal tribunal. We propose to divide these four safeguards, and to leave those which are 883 in essence matters of fact to the Railway and Canal Commission, and to leave those which are in essence matters of opinion to Parliament as the proper body for decision.
Under the new machinery a proposal for compulsory amalgamation will work like this. The Commission has first to decide that in a particular area no adequate progress has been made. This is reported to the Board of Trade, which, if the Board accepts the view of the Commission, must lay before Parliament a draft Order to the effect that in a particular area it is desirable to proceed with amalgamation. The area has to be so defined as far as practicable that Parliament may see what undertakings are likely to be affected by an amalgamation of this character. Parliament may then either pass a Resolution adverse to the Order, in which case the whole scheme is at an end, or, by refraining from doing so, give its implicit acquiescence to the scheme. There is no special reference in this decision by Parliament to either the national interest or of the lower cost of coal. They are, however, obviously two matters which, above all, will govern Parliament's judgment and they will, therefore, be implicit in its decision. It is only after that process and after a decision by Parliament that the Commission will prepare a scheme. The Board of Trade will submit it to the Railway and Canal Commission, and the Coal Commission will have to prove that the scheme is fair and equitable to all persons affected, is calculated to avoid financial injury to any constituent company, and is calculated to enable the amalgamated concern to be efficiently carried on. It is only if these three things are proved that the Railway and Canal Commission will approve the scheme.
Finally, there is provision for an interval of two years for the stages after the submission to Parliament and approval by Parliament to be carried out. My predecessor gave that pledge during the discussions upon the Bill of 1936, and we intend to carry out the pledge in the letter and spirit. That is the new machinery which we propose to deal with compulsory amalgamation. In essence all the old safeguards of the Act of 1930 are retained, and there will be no diminution of protection to the parties as the 884 machinery essentially will be capable of operating in cases where it is right and proper so to do.
I pass to Part I of the Bill, which deals with the unification of coal mining royalties. This Part gives effect to a promise which was contained in the National Government's programme for the election of 1935.
§ Mr. Stanley
No, I agree that we did not win on that. On the other hand, I know that that statement in that election programme was reproduced by me, as no doubt by many other hon. Members, in my election address at the time. I happen to remember, as I have pointed out before, that the autumn of 1935 was a period of very grave public concern about the condition of the mining industry and those engaged in it. Even in constituencies like mine, purely agricultural, far removed from any coalfield or any direct interest in the coal industry, I remember that I had to answer numerous questions as to what were the proposals of the Government for dealing with the coal industry, and certainly I used frequently the statement that part of the proposals for dealing with the industry was this unification of mining royalties, and I believe also that I used it effectively. As far as I am concerned, I regard that as a pledge which was given to the public in general, and to my own electors in particular, and a pledge that the time has now come to redeem.
This question of unification of mining royalties is another question with a very long history. Even in pre-war days the private ownership of minerals was already becoming a main grievance. Since the War the years have been studded with commissions and commttees of inquiry into the coal industry. All these commissions and inquiries have considered this particular question, and all of them have reported in favour of some form of statutory acquisition. The Sankey Commission in 1919 disagreed on practically everything, but they were unanimously in favour of a proposal for the unification of coal royalties. The Samuel Commission in 1926 reviewed the question and came to the same conclusion, and they gave as their reasons, first, the 885 psychological effect of the grievance to which I have already referred, and, secondly, that the private ownership, and therefore the individual and scattered ownership, of minerals was wrong from the point of view of economical working.
Since that time other sources, too numerous to quote, but suitable for all tastes, have urged this proposal. The right hon. Member for Carnarvon Boroughs (Mr. Lloyd George), in the spring of last year, or perhaps two years ago, issued a number of proposals for dealing with the condition of industry, and unification of royalties found its place among them. On the other hand, my hon. Friend the Parliamentary Secretary to the Board of Trade, who went up to investigate conditions on the North-East Coast, and made a report upon the depressed area there which earned favourable attention from all sides of the House, included the unification of royalties among the proposals which he made. I can quote a number of statements in support of it, one a rather surprising one in view of a letter which appeared in the "Daily Telegraph" last Saturday from Lord Gainford on behalf of the coalowners, because in 1934 he stated:The antiquated provisions in many of the royalty leases ought no longer to exist, as they prevent the working of coal underground to the best advantage. Possibly it would he better if royalties were nationalised, or at any rate in the hands of one body, by whom the best terms could be given so as to secure the best underground working conditions and the most economical production.I have another quotation from Sir Adam Nimmo, who has never been looked upon as being very "Left." He said that as a member of the Sankey Commission he had reported in favour of the State acquiring the coal and other minerals of the country, and that he still believed that the problems of reconstruction would become progressively easier to dispose of if the minerals belonged to the State. I have quotations, too, from hon. Members in this House, who sit behind me and who are listened to, certainly by my hon. Friends, with very great attention on all matters connected with the coal industry. There is a letter from the hon. Member for North Leeds (Mr. Peake) and the Noble Lord the Member for County Down Viscount Castlereagh) in which they state that the first step in internal reorganisa- 886 tion of the coal industry is, and will remain the unification of mineral ownership. Finally, if I may leave the best to the last, I should like to quote a passage from my hon. Friend the Member for Ecclesall (Sir G. Ellis) who, in an article, set out the arguments for the unification of coal royalties more succinctly and better than I have seen it done before. He said:It will be generally agreed that some form of royalty unification is long overdue and that, to assure regular production from the best seams, the most easily marketable royalties must be in one ownership. In this way only can production be arranged on the basis of efficiency rather than the chances of varied private gain. The unified control of royalties will direct development where it can be most efficiently and cheaply carried out, by a means of equalising the many uneven, and even unjust, charges, and render it far easier to bring about those amalgamations which are naturally indicated.I could not myself sum up better the arguments in favour of the unification of royalties, and I can, therefore, count with confidence upon the support of my hon. Friend. There is only one other quotation which I should like to make; in view of the statements issued by the mineowners last week it is, I think, rather a significant one. It may perhaps contain some clue as to their recent change of front. It is a statement which occurs in a memorandum sent by the mineowners to the Reorganisation Commission in March, 1933:Difficulties in connection with mineral rights prove an insuperable obstacle to a policy of compulsory amalgamation.It may, therefore, be not unconnected with their desire to see that insuperable obstacle still remain that they have slightly altered their position as regards the acquisition of royalties. But, in fact, for many years there has been virtual unanimity in principle that in some form or other these royalties should be acquired by one single body and held in one single hand, although there has been considerable divergence in practice as to how it is to be carried out. The reasons are easily summarised. First, there is the psychological one, the fact that private ownership does represent a long-standing grievance in the industry. Secondly, it is a real obstacle to economical working that where a pit is subject: to a number of leases, some of which may contain terms for a minimum rent, it is the lease position that has to be considered in regard to which seams you are going to work rather than purely economic considerations.
887 Thirdly, with favourable finance it should be possible to remove those inequalities, to have more and more money available for production and, in the end, to bring about the final extinction of royalties as a charge on the industry. Fourthly, and most important of all, it is an attempt to deal with the new conditions which now face the mining industry.
The nineteenth century was a period of rapid and continuous expansion of the mining industry. It did not matter what new pits were opened, what new seams were worked, however uneconomic, however unwanted at the time, because this great wave of increase sooner or later took up the slack; but can any of us really look forward to those conditions of the nineteenth century recurring? With all the many competitors, with all the new sources of power, can we ever hope to see again that tremendous expansion of the nineteenth century? To my mind, therefore, there is real need in the industry now, such as there never was in the nineteenth century, for orderly development, for only developing new sources in order to meet an existing demand. I believe that orderly development of that kind is only possible if the ownership of the minerals, and therefore the right to allow the working of those minerals, is in one hand, under one body, which can be responsible for that development. That is why I believe in the policy of the acquisition of mining royalties.
Now let me come from the "why" to the "how," to explain how, under this Bill, we propose to do it. The question obviously will be asked, "If these royalties are to be bought, who is to buy them; for how much are they to be bought; what are the conditions of sale; how are the vendors to receive their purchase price; and what are the finances of the scheme?" As regards the first question, in Clauses r and 2 we set up a new statutory body called the Coal Commission. That body will be subject to the general direction of the Board of Trade in relation to matters which affect the national interest and in particular the safety of the working of coal. That means to say that Parliament, through the Board of Trade, through my Estimates, will preserve a hold on the general national policy adopted by this Coal Commission; but in the day-to-day conduct of their business, in the ordinary 888 work of granting new leases or amending existing ones, they will be an independent body. The composition of the Commission is set out in the First Schedule. It will consist of a chairman and four members appointed by the Board of Trade, none of whom is to have a financial connection with the coal industry. In addition, we transfer to this new Commission, as I said before, the powers and the duties of the Coal Mines Reorganisation Commission, and it also takes over the functions which were allotted to the Board of Trade under the Registration Act which we passed last July.
As far as the cost of this Commission is concerned, that part of its work which deals with compulsory amalgamation will continue, as now, to be borne on the Votes of the Board of Trade; otherwise the cost will be met out of the proceeds which the Commission will receive from the property which is transferred to it. The second question is, "For what sum are these royalties to be acquired?" The global sum to be paid for royalties is specified in Clause 6, and amounts to £66,450,000. The House would probably like some short account of how that figure was arrived at. The method of purchase is one which was suggested by the royalty owners themselves, that is to say, the fixing of a global sum for all the rights and properties which are to be taken over, leaving it afterwards to be determined what is to be the particular share of the individual owner of that global sum. That was suggested to the Government as the method which the royalty owners themselves prefer, and, as I myself think, it is the only one which it would be possible to carry through within any limited period of time.
§ Mr. Stanley
I am sure the hon. Member can raise that point in the Debate. I do not think it is relevant to this exposition of the machinery. In the first place, the determination of this global sum was left to negotiations between the Government and the royalty owners. These negotiations proved abortive and it was impossible for the two sides to agree upon a figure. It was therefore agreed between the representatives of the royalty 889 owners and the Government that this matter of the global sum should be referred to a tribunal consisting of the Master of the Rolls, Mr. Justice Clauson and Lord Plender—not, I think, a body which could be accused of partiality, of lack of knowledge or of lack of ability. The composition, of course, of this tribunal was also agreed between the royalty owners and the Government. It was also agreed that the matters to be referred to this tribunal for its decision should be as follows: First of all, the net annual return to the royalty owners was agreed between the Government and the royalty owners at a sum of £4,430,000, and the tribunal was to be asked upon that basis to determine the value of the whole property, assuming that it was to be a sale in the open market by willing sellers.
So the reference to the tribunal was agreed with the royalty owners, and the composition of the tribunal was agreed with the royalty owners; the exact terms of reference were agreed with them and, finally, the mineral owners agreed to accept the decision of the tribunal, whatever it be. It was on that basis of agreed net revenue that this tribunal came to the decision that the purchase price of the property as a whole should be this global sum of £66,450,000. For that sum, this new commission will acquire all coal, whether it is being worked or not and whether it is now known or not, and all the ancillary rights of working which are attached to the coal; but that purchase price does not include associated minerals being got with the coal. The new commission have the right to acquire these associated minerals at a price, if they so wish, but for a price additional to the global figure which has been fixed.
§ Sir Arthur Salter
May I ask whether the rights which were assessed by the tribunal are precisely the same as those which are being transferred under this Bill? I ask the question for information only, and not because I take the view that they are different.
§ Mr. Stanley
They are precisely the same.
Now I pass to the conditions of sale. This great transaction is one of immense complication and unique difficulty. I have told the House the method by which the global sum has been decided. As far as the Commission are concerned, their total liability for the purchase of 890 these properties is already settled. Hon. Members will appreciate the complicated valuations and the lengthy processes which must be gone through before the appropriate share of that global sum, which is all that the Commission have to pay, can find its way in the appropriate amount into the pockets of the individual owner. On the one hand, if we took no steps to bring these complicated processes of valuation to a finish until the individual shares had been determined and the Commission were in a position to hand each individual his cheque, these processes would be so spun out that the bringing of this scheme into effect would be postponed to the Greek Kalends. On the other hand, it would be an obvious injustice, in a case like this of compulsory acquisition of property, to take over the property some years before you are, in fact, to be in a position to pay the individual the compensation for the property which you are compulsorily acquiring from him.
The scheme of the Government is designed to meet those two difficulties, and I believe it to be fair to both parties, both to the new Commission and to the mineral owner. Under Clause 3, 1st January, 1939, is fixed as the valuation day and, as that name implies, that is the day as on which individual properties will be valued. Furthermore, as from that day, the properties to be acquired, though they will still be held by their present owners, will be held by them as though they had entered into a contract of sale with provision for completion at a future date. It is expressely provided in the Bill that the general rules of law and equity which govern such a situation, and which are well known by practice and precedent, should apply to this position. There are also certain specific instances which are quoted in the Bill. Hon. and learned Members of this House, being lawyers, will describe more exactly what the effect of this provision is, but, in general terms, I can say that it means that, during this transitional period, the mineral owners will be left in the possession of the property and in enjoyment of the rights, but during that period they must do nothing to depreciate the property which they have contracted to sell. In Clause 9, hon. Members will find a special provision as to the procedure to be carried out, if, during that period, 891 leases fall in, and the owner position to give a new lease.
Further, in Clause II, we make one quite exceptional provision, in circumstances of this kind. Despite the fact that the property still remains with the mineral owner, we give the Commission power, by agreement with the lessee, to consolidate the leases of a particular undertaking. That will enable the Commission, even during this transitional period, to deal with what I have already described as one of the greatest difficulties of the present situation. That, of course, is subject to the compensation of the mineral owner whose lease they compulsorily alter. The transitional period comes to an end on the vesting date, 1st July, 1942. On that day all property will vest in the Commission. We believe that by that date, the valuations will be sufficiently far advanced to pay, if not all, by far the greater part of the compensation to the individual owners.
I next come to the question of the payment to the individual owner. In the global figure we have found the total liability of the Commission, but the difficulty which remains is to assess the appropriate share of each individual owner in that global figure. The House will realise that, in one way, that question is no concern of the Commission or of the Government; all that we are concerned with is that whatever scheme is adopted should be speedy and should be fair. Hon. Members will find in the Bill an elaborate scheme of valuation, and I understand it is a scheme which has the agreement of the mineral owners themselves as the most expeditious and the fairest way of splitting up among their members the sum which the Commission make available for total purchases. There is first to be set up a central valuation board that will consist, in the first instance, of a legal chairman with two independent persons. Its first duty will be to divide the country into valuation regions. For that purpose, the Board of Trade may temporarily add persons of experience in the management of mineral estates. When once these valuation regions are fixed, these temporary people appointed by the Board of Trade will drop out, and there will be added to the board 892 one member for each regional valuation board. Having decided these regions, it will be the duty of this central valuation board then to allocate to each region its appropriate share of the global sum. The method is not laid down by which they are to proceed; it is for them to decide, but clearly there must be some analogy with the method adopted by the Greene Committee in arriving at the global sum.
Now we come to the regions, to each of which the central board will have allocated its respective share of the global sum. In each region there will be a regional valuation committee, consisting of an independent legal chairman and persons in the area who have been engaged in the management of mineral estates or who are experienced valuers of mineral properties. Their duty will be to value each individual holding in the region, and their decision as to the value of a particular holding will be the subject of appeal. The applicant who is dissatisfied may appeal, and his appeal will be heard by a referee nominated by the central board. Hon. Members will understand that when this regional valuation committee has completed its work of valuing each individual holding, there will be two figures. There will be, first of all, the total of the values of the individual holdings in the region, as valued by the regional board and, secondly, there will be the share of compensation which has been awarded by the central board to the regional board. Each individual holder will receive that proportion of his valuation which the total valuation of the region bears to the total allotted to the region. [Interruption.] If I have not made that quite clear, let me illustrate what I said. First of all, you will have a region chosen, and the central board allots to that region, say, £10,000,000.
§ Mr. Stanley
I have already described it. [HON. MEMBERS: "No."] I have explained to hon. Members that although the Bill does not lay down the method by which the central board must proceed, there is the obvious analogy of the way in which the Greene tribunal, before the individual valuations were made, managed to arrive at a global sum to be paid. Let me give this example: If to this particular region there has been allocated a sum of £10.000,000, and the 893 regional valuation board, having valued every property inside the region and added up those valuations, arrive at the total of say, £12,000,000, each one of the individual holdings will receive the proportion which 10 bears to in, which is five-sixths. [Horn. MEMBERS: Hear, hear."] I am glad that my explanation is not obscure. The cost of these valuations, subject to certain conditions and exceptions, will be borne by the Commission. I believe it is only fair in these things that the cost should be so borne, because this case is quite different from the ordinary case of the acquisition of, say, land, wherein the Government are in a position immediately to offer to the individual owner for his bit of land a sum which they consider the right value of his land; but in this case—
§ Mr. George Griffiths
Suppose the figures were reversed and, while £10,000,000 had been allotted to the region, the total valuations amounted to £9,000,000. What are you going to do with the other million?
§ Mr. Stanley
The sum is just the reverse. Whereas in the one case a man gets the proportion which 10 bears to 12, in the other case he gets the proportion which 12 bears to 10.
§ Mr. Stanley
I was taking the converse of the example that I gave. If the total valuation comes to less than the sum allocated to the region, the valuation, of course, will be scaled up in order that all may take their fair share of that particular sum. I was dealing with the question of costs, and was saying that this was quite different from the ordinary case of the acquisition of land. In that case the State or the local authority knows the value of the particular bit it is taking over, and is in a position to make a specific offer for that bit:; but in this case, of course, the State is not in a position to make a definite offer to the individual owner, and, therefore, I think it is only right that the individual owner should not be called upon to bear the cost of finding out what that definite sum should be.
There only remains the question of finance. The Commission is empowered to borrow this global sum of £66,450,000, and an additional £10,000,000 above that.
894 I want to make it plain to the House that that £10,000,000 is not an estimate of the additional money that is going to be spent; it is an outside limit up to and not beyond which the Commission may borrow. These loans may be guaranteed by the Treasury, and hon. Members will see set out in the Financial Memorandum prefacing the Bill the purposes for which the money can be expended.
§ Sir Stafford Cripps
Supposing that the amount of the subsidiary rights, as arrived at by the valuation committee, exceeds £10,000,000, what is then to happen?
§ Mr. Stanley
Of course, if it should be necessary to exceed the £10,000,000, the Government would have to come back to the House and ask for a further sum. The only point I wanted to make was that the £10,000,000 is not put in as being what the Government would consider an estimate of the expenditure that the Commission will incur, but as what they believe to be the outside limit that in any conceivable circumstances they could be called upon to expend.
§ Mr. MacLaren
Have the Government, in fixing the £10,000,000, taken into account any possible surface liabilities and damage that may be incurred when the Commissioners are in full control of the mines?
§ Mr. Stanley
When the Commissioners are in full control of the mines, any expenses that fall on them will be paid out of the proceeds of the royalties they receive. If the hon. Member will study the purposes other than the payment of the global sum for which this borrowing is authorised, he will see that, with the exception of the acquisition of the associated rights—" subsidiary coal hereditaments, "as they are called in the Bill—all the purposes are connected with the period before the Commission acquires full possession of the royalties.
§ Mr. Stanley
I think the hon. Member will be able to work it out. I have already answered his question.
§ Mr. MacLaren
I want to know whether the Government are taking into account all the surface liabilities, such as letting down 895 the land, as the result of mining operations? Are the Government covering themselves as regards the cost of that?
§ Mr. Stanley
I have already answered that question. That is a position which will arise after the vesting date. After the vesting date, the expenses of the Commission will be met from the proceeds.
Hon. Members will find set out in Clauses 19 to 26, which deal with finance, how the balance of any sum which remains after the service of the loan, the formation of the reserve which is there described, and the administrative charges of the Commission, are met, is to be divided. It is to be devoted, in the first place, to the abolition of underground wayleaves; in the second place, to removing anomalies between individual undertakings in a particular district; and, in the third place, to removing anomalies between the various districts themselves. Finally, when the stage is reached where the reserve and sinking fund are leaving more and more money available, after these three objects have been satisfied, the Board of Trade, by a permissive Order passed by this House, may authorise a general reduction of rents. It is difficult, of course, to make any estimate at the present moment of how and when these sums will become available for the purposes which I have described. Any estimate must depend on many factors. It depends upon the terms on which the money can be borrowed; and it depends, of course, in future years, upon the amount of royalties which come in. All I can say is that, if the conditions, both as to the possible charges on the Commission and the probable income of the Commission, are as they are to-day, there will be a substantial sum available to be used in the reduction of these royalties as I have described.
I must apologise to the House for the length at which I have spoken, but I have tried to make plain both the reasons for the provisions of this Bill and the methods which are being adopted. I can only close as I began, by urging their acceptance on the House as a definite and, I believe, an important contribution to the stability and the prosperity of the coal industry. They provide some effective insurance against the kind of blizzard which struck the industry a few years 896 ago. That they are being discussed in times of comparative prosperity in the industry is, I believe, all to the good. I do not believe that there is any legislation which is likely to be so ill-conceived or so ineffective as that which is hurriedly passed in a time of crisis, in answer to the appeals of an industry to the Government to do something. I would rather, by sound methods when times are good, try to prepare the industry to meet that deterioration which we need not regard as inevitable, but against which, as prudent men, we ought to be prepared. It is because I believe that this Bill will go a long way towards that preparation that I commend its passage to the House.
§ 5.10 p.m.
§ Mr. Arthur Greenwood
I beg to move, to leave out from the word "That," to the end of the Question, and to add instead thereof:this House, recognising the importance of coal mining as a basic industry upon which the prosperity of the nation largely depends, is dissatisfied with the policy of amalgamating mining undertakings regardless of the effect upon the life of the local community, and being of opinion that in the national interest, which includes the safety and wellbeing of mine workers, it is essential' that there should be unified control of the whole industry under public ownership, cannot assent to the Second Reading of a Measure which, whilst conceding the principle of public ownership of coal, leaves this national asset to be exploited by private interests for their own gain.I feel that the right hon. Gentleman has had a very difficult task this afternoon. He has had to explain, and he has done so very lucidly, the major provisions of this Measure, and, at the same time, he has had to try to satisfy the dissident elements on the other side of the House, to prove to them that the proposals of the Bill are essentially reasonable, to try to persuade the royalty owners and their friends that they are being given a square deal, and to try to convince the mineowners, who are difficult to persuade about anything, that compulsory amalgamation may be a very good thing. Therefore, I sympathise with him in the difficulty of the task he has had to undertake. I, like him, must confine myself to a broad and general survey.
There have been many subconsciously controversial notes struck by the right hon. Gentleman, but I am interested in his opening sentences and in his closing 897 sentences. I, as a political innocent, and as a man with no kind of economic knowledge at all, happened to say that within the next three years what the right hon. Gentleman calls an economic blizzard is likely to afflict this country; and the Prime Minister, in the Debate on the Address, the Chancellor of the Exchequer, the Home Secretary, the Minister of Health, and Uncle Tom Cobley, so far as I know, on that side of the House, said that everything in the garden is lovely. Now I gather that the primary justification of this Bill is for the right hon. Gentleman to turn down his own Prime Minister and his own colleagues and to take one heroic step to prevent the coming slump. Well, we are very grateful for that admission, but let me say that, if this is the first example of the anti-slump policy, I do not think very much of it.
The right hon. Gentleman was historical. I shall be a little historical, but my history is not the right hon. Gentleman's history. I remember a Master of Balliol who once said to me, "When anybody comes and says to me, 'History teaches that it is so-and-so,' I say to myself "—if I may be allowed to repeat it in this House—' that is a damned lie.' "I have no doubt that the right hon. Gentleman has said the same thing about my history, and I do not think much of his either. Nor do I agree with his interpretation of history which is, in a way, a far more fundamental problem. The right hon. Gentleman chose, at one stage of his speech, to start his history in the year 1930. I prefer to go back to that period during the War when the trouble in the mining industry really started. I recall, and no doubt many Members of this House will recall, the patience and forbearance of the miners during that great struggle, and it was as a result of their postponement of their demands—because they did not exploit the economic situation—that in the end the Sankey Commission was appointed. Time went on, and another commission was appointed, the Samuel Commission. Before those commissions, constructive proposals for the industry were put forward in the name of the organised miners of this country, but to those two commissions no constructive proposal was ever made either by the royalty owners or by the mineowners.
898 The right hon. Gentleman referred to the Act of 1930, an Act passed by a minority Government and emasculated by the House of Lords. Some of the criticisms which the right hon. Gentleman made to-day were the result of Amendments forced upon the Government in the House of Lords, and I hope, when he is in trouble over this Bill, he will remember us, and remember us a little more kindly than he does to-day. Last year we had the disastrous Runciman Bill, dealing not with the whole of the contents of the Bill now before us, but with part of it. Then the Government ran away from their own proposals. After they had fully considered their Bill, after they had handed it out to Members of this House, within a day or two of the Debate on the Second Reading, over the week-end, Mr. Runciman had run away. So far as I know, he ran away so far that nobody ever saw him again on this problem. He ran away from the House of Commons and failed to produce any alternative measure. In that Session we were promised this unification of royalties, which was one of the soul-stirring appeals the President of the Board of Trade made in the 1935 election. It was a little long in maturing, but we have it now.
I wish to look at the position of the three parties: the royalty owners, the mineowners and the people who work in and about the mines. First, let me say something about the royalty owners, who toil not neither do they spin. They are a sort of hooded men of the industry, engaged in a conspiracy for their own ends. They have reaped enormous gains. Their policy has always been the policy of the highwayman:" Stand and deliver! "They are not Robin Hoods, despoiling the rich in order to help the poor; they are making people stand and deliver in order to help themselves. It was in the time of Queen Elizabeth that this principle was established. A lot lies on the head of Queen Elizabeth; the Poor Law system, and that means test which I am accused of having invented, or resuscitated. It was in the time of Queen Elizabeth that it was made the law of the land that, apart from gold and silver, all minerals are the property of the landlords; in other words, it was declared, and it has continued to be until to-day, that those who own the crust of the globe own the whole of it. I believe I am right in saying that only in this country and the United States 899 in this principle of the landlords' rights accepted at the present time.
On details of the law I may be wrong—if I am I hope the Chancellor of the Exchequer will put me right to-morrowbut my point is that the law on this subject goes back to the day when coal was a virtually unknown and unimportant commodity, its use negligible, its possibilities unrealised. Yet, since the industrial revolution, for a century and a half now, since the time when steam derived from coal became the motive power of new methods of production in industry, the owners of royalties, through royalties, wayleaves and what not, have extorted an annual tribute from those actually producing the coal which was the life-blood of British industry. And having, for all this period, shamefully exploited the nation's asset, the royalty owners now feel a grievance. Although every post-war inquiry has come to the conclusion that this complicated system of private ownership of coal was indefensible, I propose to show how generously these aggrieved persons have been treated.
Secondly, there are the mineowners. There are individuals who have been better than their organised brethren, but the mineowners, organised in their own association, have always been implacably opposed to every proposal and every demand made by the miners. If there w as ever a case of man's ingratitude to man, it is that of the mineowners to the miners. I remember that in 1921, when there was a serious national stoppage in the coal industry, I went to see Lord Haldane on a matter affecting the dispute, and he said to me: "I have to-day seen a Member of the Cabinet"—I do not think I need mention his name; he has passed from us—" and this Member of the Cabinet said to me, I have seen the mineowners for the first time to-day, and they are not fit to run small industries'. "I think that that, coming from a man of great experience in affairs, was a judgment which has been justified subsequently. The mineowners are like the Bourbons; they never remember and they never forget, in great contradistinction to other employers. [Interruption.] My quotation was wrong.
If you take certain other bodies of employers in industry, they have shown 900 a desire to co-operate with their work-people which is unknown among the mineowners. These have always adopted a dog-in-the-manger policy. They have done it on this Bill in a most curious way. I do not want to waste the time of the House with the document which they put in the Press this morning, but I will just observe that they have no objection in principle to the nationalisation of royalties, although they do not see how it can work, apart from the management of mines. I think it is extraordinary, because I accept their case; the nationalisation of royalties is no good apart from the nationalisation of land. I do not think that they have seen the light; I think they w ant to find an excuse. Then they put forward again their unalterable opposition to compulsory amalgamation, and the right hon. Gentleman has done his best to pour oil on troubled waters.
The third factor in this problem is the miners and those engaged in the mining industry. There are others besides miners engaged in the industry, and the case I make is on behalf of all of them. They are perhaps the most tragic section of workers in this country to-clay. They are the victims of the short-sightedness of the coalowners, the victims of the forcible return to the Gold Standard in 1925 by the right hon. Gentleman the Member for Epping (Mr. Churchill), who I am sorry is not here, and they are the victims of this continual process of mechanisation and rationalisation. I took the trouble to look at the figures with regard to deaths in the mining industry. In the 60 years from 1873 to the end of 1932, there were 67,730 deaths of miners as a result of their carrying out their duties. From the beginning of 1933 up to the end of September, there were 4,000 other deaths, bringing, in the span of one lifetime, this total murder to nearly 72,000. In more recent years, from 1920 to the end of 1936, there were over 2,500,000 non-fatal accidents. I think of the inadequate pay of the miners, I think of the unemployment to-day amongst the miners, I think of the misery in the households of miners, I think of the insecurity of life of miners to-day and of the hopelessness of their outlook, and I compare that with the lot of the royalty owners and the mine-owners.
The prospects of the mining community of this country, and especially under this 901 Bill, are indeed bleak. Disregarded by Governments, the miners have become the forgotten soldiers of peace, as many maimed men to-day are the forgotten soldiers of the last Great War. Those are facts which cannot be denied. And that brings me to the Bill. [Horn. MEMBERS: "Hear, hear!"] Like the right hon. Gentleman I am entitled to go into the facts of history. I was going to say that that is the main reason for this reasoned Amendment. There is riot one word about the miners. I am glad the right hon. Gentleman has introduced this Bill. I remember hon. Members on that side gibing at the phrase of Lord Passfield my old friend, Sidney Webb—when he talked about "the inevitability of gradualness." This Bill, at any rate, illustrates the gradualness of inevitability. The Government, at least, have realised the necessity, for once, of the nationalisation of royalties. And what a story it is.
The royalty owners in the first instance put up a modest demand for £150,000,000. Then they realised that that, perhaps, was a little extravagant, and they reduced their demand to £112,000,000. These are astronomical figures. They were faced even by this time with a statement that £75,000,000 was the final amount. It was the amount that was not accepted by the royalty owners before they went to arbitration. If the Government did not suggest during last year about £75,000,000, I shall be glad to know, because I am going to prove that they are not living up to that £75,000,000 to-day, but are exceeding it. The arbitration arrived at this global sum—I am thankful for that word—of £66,450,000, but in addition—as the right hon. Gentleman, with his unfailing honesty, pointed out towards the end of his speech—they will draw their royalties until 1st July, 1942. This now is a slow-motion picture. I do not know whether hon. Members of this House, in such periods of respite as they get, have ever been to the Palladium and seen Nervo and Knox in their great slow-motion picture—well, there -are the President of the Board of Trade and the Secretary for Mines, the Nervo and Knox of this Bill. They are in a slow-motion picture. I put it to the House that though the details of valuations are very complicated and may take a very considerable time to assess, and, finally, to determine, the principle of 902 assuming ownership could have been operated from the passage of this Bill. Therefore, as a compromise, it might have operated from the valuation date, 1st January, 1939, because that is really the date in this slow-motion picture; it is the caption such as is put up in picture-houses.
As the Bill now stands not only will the royalty owners get their reward of nearly £66,500,000, but they will receive royalties for another 41 years, which is the equivalent of nearly £20,000,000 further toll on this industry. It means that the royalty owners are to get, before any other kinds of perquisites come to them, with which I will deal in a moment, something like £85,000,000 or £86,000,000, for what an independent tribunal thought was worth £66,500,000. But this is not all. There is this mysterious sum of £10,000,000. Being of a suspicious mind where the National Government are concerned, I want to know how this £10,000,000 is to be spent, and I find that the costs of registration and valuation of properties of royalty owners are to be paid by the Commission. It is rather like the plaintiff having to pay the costs of the defendent when the defendant has lost his case. I am not a lawyer, but the idea that when you acquire this property, out of which these people have done well, you should give them another little sop and pay all the costs of handing them over a gilt-edged security for ever, seems to me to be a fantastic act of generosity on the part of the Government.
Not only so, the royalty owners, as the right hon. Gentleman explained, are to be additionally compensated in respect of subsidiary coal hereditaments, that is to say, the minerals to be acquired other than coal and surplus servitudes. I am not a legal expert, but if there are any surplus servitudes in this industry, they are the mines. These wonderful subsidiary coal hereditaments and servitudes are to be a matter for further compensation. As I understand the right hon. Gentleman, he tried to make out that £10,000,000 was all that they meant to pay, and went on to say that, if they had to spend any more, they would have to come back to Parliament. It is perfectly clear from the Financial Resolution that it is the amount which the Commission is empowered to borrow, and it is the maximum amount estimated, but there are no very elaborate regulations governing what is to be paid 903 for these subsidiary coal hereditaments. It might be £20,000,000 or £50,000,000, and the President of the Board of Trade would come back and talk about equity and justice, and say that "It has been proved to us that these subsidiary hereditaments are worth far more than we estimated, and "—these various regional valuation boards being composed in such a way as to give the maximum value to the royalty owners concerned—" we feel that we have got to get more out of you."
What is to be the end of it I do not know, but after having boosted up all that the royalty owners are going to get, they are to be given a gilt-edged security, something that people who work in the industry have never had, and they are going to rest at ease. There will be no fear in their hearts of the flooding of pits, no worry about the closing down of pits, and not a thought about the amalgamation of pits. They will sit back from now onward, having been handsomely recompensed by the community which they have fleeced for so long. A global figure! Why, this is a solar system figure which is being claimed. It is a capital sum, with a security which is given to nobody, neither miner nor mineowner, in the industry under this Bill. I should imagine that, in spite of their protests, the royalty owners must have gone down upon their knees and thanked Providence for this Bill.
The whole of these payments are not due to the generosity of the State. They will come out of the industry, and because of the heavy proportion which wages bear to total costs in the industry, and because of the method of calculating wages, in the long run, the greater proportion of this money will be a charge upon the wages of the miner. I do not want to put it too high. It may be argued that, in the last resort, it all comes from wages, but I am trying to substantiate the fact that the primary contributors to this fund will be the miners of this country.
There is one Clause in Part I of the Bill which interests me very much—Clause 21. It explains how the surplus in the hands of the Commission may be dealt with. It may be dealt with primarily to reduce rents to mineowners, or at least a proportion of it, a solicitude for rent-payers, which, I notice, the Government do not show in the case of householders.
904 I object to this enormous sum being paid by the industry at all. Coal in the past has been largely responsible for making modern British industry, and it would have been a magnificent gesture of patriotism on the part of the industries which are now enjoying this great prosperity that we have heard about, if they had had a subscription list and presented the nation's coal to the nation. But I cannot expect them to do that. Alternatively, it might have been a present by the nation to the industry and put on the National Debt. It would have been as honourable as any other part of the National Debt, and would at least have represented a national asset. If the Government insist upon throwing this burden upon the industry what about the miners? What about the administrative work, and what about the mining engineers who are to lose their professions as the result of amalgamations under this Bill? Why in the interests of our common humanity should not the disposable surplus be devoted to them and to those who have been displaced from the industry in past years and to those who can look forward to no security in the future?
I am not going to argue against amalgamations as such. I am in favour of one amalgamation underpublic ownership, and, therefore, it would not become me to argue against amalgamations as such, but I am bound to say that I have a good deal to comment upon regarding the proposals of the Government for amalgamations because of the extent to which they ignore many very important factors in the situation. As far as I see the new Commission, it is being made a mine-owners' protection society; it does not seem that it is to perform any other function. The mineowners in their manifesto boast of what they have done in the way of amalgamations by voluntary effort. It is the duty of the Commission to reduce the number of undertakings necessary to efficiency in the industry, but there is not a word about the requirement of technical efficiency in the industry. A mine can continue to be run badly, but it does not matter if, from the point of view of profit, it can be successfully amalgamated with another mine, and it is the duty of the Commission to consider that fact.
There is no regard whatever in Clause 40, which deals primarily with the powers and the duties of the Commission, for the 905 interests of those employed in the industry. There is no regard taken in that Clause for wider social interests. I mention just a small point in passing because I want to deal with these three points separately. They will still be allowed, as far as the duties of the Commission are concerned, to go on scarring our countryside with pit heaps, a challenge to the sense of beauty of all the people of this country. I regard that, a small point, as an absence of consideration for any other factor except narrow material issues. There is a case for the displaced workers in this industry. They are the victims of this process of amalgamation and rationalisation. Royalty owners are being handsomely recompensed. Why should not miners who are deprived not of material capital, but of their life interest, miners who find it so hard to obtain a foothold in the industry, be recompensed as has been recognised in electricity undertakings in this country by the law of the land?
Is there not a case in the interests of true industrial and social efficiency for improved conditions of employment being a sine qua non of amalgamation? That is to say, that amalgamations shall not be permitted until reasonable standards of employment are vouchsafed to the worker. Then there is the case of the local authorities and the position of the people who are placed in very difficult circumstances, namely, the Commissioners for the distressed areas. Are the Commissioners for the distressed areas and the local authorities to be overlooked in this matter? Have they no rights? Are amalgamations to be carried through without any reference whatever to the Commissioners, who are showing a human interest, with all their limited powers, in the communities they serve, and without reference to the local authorities which have been created by the industries in the mining areas?
The term used in the Bill "the economical and efficient working of coal" is not the final criterion. We have to consider the people employed in the industry and the areas in which those industries have been established. In the wild scramble for wealth 150 years ago mines were opened here and there, people were carried there in search of work, communities were created, local authorities were established, and those local authorities have had to carry the burden 906 for 100 years. Voluntary effort through our churches and other organisations converted the forefathers of the present mining population into communities. Our local authorities, by means of roads, street lighting, sewers, main drainage, refuse disposal, schools, clinics, hospitals, parks and the thousand and one services, have provided all the apparatus, all the amenities of civilised life for these people at tremendous expense to the public. I am told, and I accept the estimate, that in the mining areas the social capital invested by the local authorities is three times the amount of the industrial capital. Is this contribution to our civilisation to be allowed to go derelict? Is the community to be called upon in the interests of profit-mongers to create new communities elsewhere?
This is a very fundamental question with which the House is faced. Industry as a whole has always been a burden on the State and the local authorities. One may well criticise the miserable contribution that it makes to the upkeep of the State. It is all very well for hon. Members opposite to treat this as if it were a minor question, but it is a fundamental question. It is because the whole of our national life is involved in this problem that we cannot agree to Part II of the Bill, which measures the justifiability of amalgamations merely by the standard of profit and without regard to the people employed in the industry and the communities which have grown up in the mining areas. We have suggested in our reasoned Amendment how we think this problem ought to be tackled.
The right hon. Gentleman, dealing with three parts of the B ill in the ascending order of their importance, put amalgamations second and royalties third. I am glad that the Government have agreed to the nationalisation of royalties, at long last. It is a necessary step, but in itself it is a step of comparatively little importance. This Bill really gives us the Government's idea of how to maintain the mineowner's position. The rnineowners do not agree about it. They never do agree about anything. This is only part of the policy that I have seen developing for the last six years. Every Socialist approach by the National Government to any big problem is an attempt on their part to safeguard what is left of private enterprise and to establish its security.
907 Nationalisation of royalties in the hands of the proposed Commission means nothing whatever to us. We must march on logically. Coal still remains one of our national assets. I remember the time when pundits of the British Association at their annual conference in September, used to read learned speeches about our coal resources rapidly becoming exhausted. Those days have gone. We have not an illimitable supply of coal but we have supplies which will last us long after the petrol supplies and oil supplies of the world have petered out. It is fantastic for the Government to ignore this vast national asset and to say that the nation shall own the coal but that the Commission shall not be allowed to work it. In other words, they are going to allow a national asset to be misused, to the degradation of hundreds of thousands of people, as it has been in the past.
Our proposal is a perfectly logical one, that in the national interests, in the interests of the people employed in the industry, in the interests of our local government institutions and our system of local government generally, in the interests of the State, coal should not only be owned but should be mined and, if the State thinks fit, be subjected to treatment under State auspices, in the hands of the nation. This Bill does not in any way get us out of the economics of the jungle. The jungle economics still remain. It is a sort of all-in wrestling that we have in industry to-day. That is a system which we cannot continue to tolerate. This nation cannot have narrow economic efficiency at the expense of the people of this country, and it is primarily on those grounds that we have put forward our alternative proposal, because this Bill really perpetuates a system under which human and social considerations are invariably subordinated to material profits.
These new principles arc essential. They are essential if the spirit of democracy, which is threatened to-day and which the vast majority of our people wish to retain and strengthen, is to be made a reality. Helotry and democracy are incompatible terms. You cannot have mine workers, all the grades of our miners down the pits, the surface workers or the professional and administrative workers, ruthlessly sacrificed to purely material interests. These people are not chattels; they are citizens, who have a 908 right to be so regarded. Democracy will survive not through the Government's considered policy of retreat but by proving itself to be the great constructive and active agency for the national well-being, not only in politics but in our social life and in the field of economic effort.
I do not want to enlarge upon this theme, but I would point out that the breakdown of democracy in other countries is because there was the facade of political democracy with no economic or social democracy behind it. The political democracy which shirks the implications of its creed may keep its democratic framework, but it will lose its power and moral authority in this country and in the world, if this rot of servitude, insecurity and selfishness is allowed to sap the strength of democratic principles. The basis of our Amendment is that social and economic justice must be the keystone of the democratic State. The Bill ignores these major issues. It disregards the fundamental human issues. We on these benches after this cut and thrust Debate—it is often the cut and run of Debate; we do not get the thrust on this side—shall wholeheartedly support our Amendment, and we shall live to see the day when coal is not only made a national asset, which we see at long last after a generation of propaganda, but when we shall see the whole coal industry of this country made a national possession and used as an instrument for the prosperity and happiness of our people.
§ 5.59 p.m.
§ Mr. Ernest Evans
This Bill is of great interest to many people other than those who are directly concerned with the coal industry. It will increase the responsibility of all of us in the direction of the very healthy policy of keeping the home fires burning and making sure that the scuttle is a little fuller than possibly it has been in many cases in the past. In presenting the Bill the President of the Board of Trade reserved to the last part of his speech what I consider to be the most important part, namely Part I, which deals with the future of the royalties in regard to coal. Part I represents a policy which has been advocated for many years by a large number of people who have tried to take an intelligent interest in the coal industry. The pioneers of that policy were called wild people with 909 revolutionary tendencies, and their successors in more recent years as being engaged in a rather futile political undertaking. Now we find this policy is being proposed by a Conservative Minister. Of course, we do not call it nationalisation. The last thing this National Government would do would be to nationalise anything, and, therefore, we have to accept the much more respectable term. of "the unification of royalties." As long as the same result is achieved, I do not think it matters very much whether we call it by one name or the other.
But it is interesting to notice that a Conservative Minister in a National Government has been driven to an acceptance of this policy by the sheer force of economic circumstances. There is no other explanation for the introduction of the Bill. I am not surprised. In the existing condition of the coal industry everybody is dissatisfied. The royalty owners are dissatisfied. The whole position affecting royalty owners is most peculiar; it has grown up in a most haphazard fashion. I saw in the "News Chronicle" the other day that some farmers in Glamorganshire, in the Rhondda Valley in particular, who owned some land, thought that they were doing a good stroke of business when they gave: a lease to people who wished to work a mine for a rent of 140 a year. and the manure from the stables of the colliery. They were simple Welsh farmers, people who are always open to be done by cleverer people. But that was very different from the bulk of the people whom we now call royalty owners, who were not slow to realise the possibilities which were available in the land, and who embarked on a process of negotiation and bargaining which led to very different results. But even the royalty owners are dissatisfied. They said we have so much, and we might have asked for a little more. I remember hearing of a maid who was engaged by a lady for a large number of years. She was really satisfied with her life, but said, "I ought to put something by. If I could only have £10 of my own I should be perfectly satisfied." At last she plucked up heart and went to her employer who, noticing that she was dissatisfied, asked, "What is worrying you? "She said," If I only had £15 of my own I would have no troubles left in the world. "Her employer said," Are you quite certain 910 that if I gave you 115 you would have no more worries,"and the maid said, "Yes." Her employer said, "I will give you the £5," and she went away perfectly satisfied, so her employer thought. But she overheard her say in the kitchen, "I wish I had asked for 20,"
That is the position of a good many royalty owners. They have always thought that they should have asked for a little more. The dissatisfaction of colliery owners is perfectly understandable, in face of the difficulties of getting leases, wayleaves, surface rights, the terms and conditions of which are most exorbitant in many respects, and exasperating in others. They were not free bargainers. And the miners are not satisfied. It has always been a sore point among the workers engaged in the industry, because they have always felt that the royalty owners were imposing on the industry a heavy burden, rendering no personal service and taking no personal risks, while they, the miners, were subjected to the toil and hazards of a perilous occupation and were receiving a return which was comparatively insignificant to that of the royalty owners. Everybody was dissatisfied. The right hon. Member for Wakefield (Mr. Greenwood) spoke about three parties being concerned in this matter. There is a fourth party—the public. They have also been dissatisfied. While they were willing that everyone engaged in the industry should have a fair return for his contribution, they were anxious in particular that the miners should have a fair return for their contribution. As soon as they came to know of the conditions obtaining in regard to the royalty owners, the public felt that some injustice was being done to the miners, while they themselves were being imposed on. That applies also to industrial consumers who are dependent on coal for the necessary supplies for their industries, and also to the home consumer.
At last this policy of nationalising coal is being undertaken. [HON. MEMBERS: "No."] I think the Bill shows to a good many people, at any rate, how easy the nationalisation of a national product can be accomplished, and it provides a lesson which they will bear in mind. To us in the House of Commons one of the first things to which we have to direct our 911 attention is the way in which it is going to be done; it is important to see that the costs shall be reasonable and fair. In regard to the main part of the costs, the sum of £66,450,000, that is the result of an award made by a tribunal consisting of very distinguished and experienced men, and I think the amount is generally acceptable. It is true that some people think it is too little.
§ Mr. Evans
Yes, I know. Let me deal with them in turn. Some people say it is too little. To them I would say that if they are going to challenge this sum on the basis that it is too little, they are embarking on a very dangerous undertaking. The amount was fixed by an experienced tribunal, and there is only one way in which they can successfully challenge it, and that is by defeating the Bill on this point. If they do that, they will find that the House of Commons will not undertake the responsibility of increasing this amount of £6,000,000, but will decrease it by a considerable sum. There are some who say it is too much. To them I would say that this is a first experiment in nationalising a product of this kind, and we can perhaps pay a little more than we think might be the proper amount to be paid. As far as the Government are concerned, as the amount is that fixed by an experienced tribunal, I do not think they have any option but to accept it as the amount to be paid.
But there is another amount involved of £10,000,000 and I should like to make further inquiries into it, and, in the meantime, to point out that the larger amount is an amount that has to be paid in cash. It is not an amount which is to be given to the royalty owners in the form of any security which would depend on the prosperity of the industry in the future. It is an amount to be paid in cash. The State is undertaking the liability to pay this amount in cash to the royalty owners. And they will in future have an amount of money which they can invest in a way which will not involve them in any of the perils, hazards, dangers and responsibilities of the coal industry, which they themselves in the past have used as reasons for the burdens which they themselves have imposed on the colliery owners. This is 912 called compensation. It is not compensation at all. It is a payment to a limited number of people for what they have now got, and for what many people thought they ought never to have had. It is not compensation in the true sense of the word. We are not compensating them for services they have rendered. We are paying them for disservices which they have inflicted on the industry. Nor is it compensation in the sense of indemnifying them against the injuries they have sustained arising out of and in the course of their employment. We are paying them for injuries they have inflicted on the industry, from which we are now trying to secure relief. It is like the position in which most of us have been at some time or another when a street musician appears in front of our house and we pay him money, not to encourage his playing, but in order to induce him to proceed to another part of the neighbourhood.
There are two or three questions that I would like to put to the Minister who is to reply. The Financial Memorandum to the Bill sets out five of the purposes to which this additional sum of £10,000,000 is to be devoted. As to four out of the five purposes, I imagine that the amount that will be involved will be comparatively small, and I gather that it is expected that the bulk of the sum of £10,000,000 will be required for the first of the purposes, which is,compensation in respect of subsidiary coal hereditaments (i.e., minerals to be acquired other than coal, and surface servitudes).I understand from the speech of the right hon. Gentleman the President of the Board of Trade that the sum of £10,000,000 is to be regarded by the House as the outside limit of the financial responsibility which the Government will be called upon to bear. I accept his statement in that sense; but I would like to ask whether any sort of survey has been made as to what is involved in these subsidiary coal hereditaments and whether any estimate has been made as to what the compensation for those hereditaments is likely to be. Frankly, I do not like to think of the disposal of a comparatively large sum being left vaguely in the air. From statements in the Press during the last two or three days, I have noticed that there is already talk on the part of both mineowners and coalowners of the great difficulties that are likely to 913 be encountered in putting the Bill, if it becomes an Act, into operation, and I am wondering whether they are looking forward to the possibility of getting some of this £10,000,000. I wish to be assured that the amount of £10,000,000 will not be available for any such purpose, and that it will not be used to create new vested interests between the first date and the second date provided in the Bill.
The next question I would like to ask is why there is to be the delay in putting the Bill into operation? The procedure of having one date fixed for a contract and another date fixed for its completion is one that is very common in commercial and legal circles in this country. This Bill accepts in its ordinary meaning the principle which is commonly applicable, and in Clause 8 it applies to the intervening period the ordinary rules of law and equity which prevail. I wonder why in this Bill the Government have fixed such a long period? As far as I can see, there is nothing in the clauses dealing with the transitional period which calls for the long delay. I agree that the question of the division of the spoils, if I may so put it in no unpleasant sense—the splitting up of the compensation among the various individual owners—is one that will involve inquiry, but I cannot see that that in itself is a reason for postponing the coming into operation of the Bill for such a long period as 2½ years.
If it were only a question of fixing the compensation and dividing it up, it seems to me that the difficulty could be got over by paying something on account and leaving the final adjustment until a later date. The President of the Board of Trade said that although he thought the valuation would be very far advanced by 1942, he did not think it would be sufficiently far advanced in the intervening period, for the compensation to be paid. I cannot see that that is a reason for such a long postponement. What I am afraid of is that in the meantime all kinds of interests will be given further opportunities for developing the sort of difficulties which are already being adumbrated in regard to the putting into operation of the provisions of the Bill, and that the result may be that the obstructionists of the Bill will be given greater opportunities than they would otherwise have had.
914 My hon. Friends and I have not put down an Amendment on the Second Reading because we feel, in regard to Part I of the Bill, that it incorporates a principle with which we are in general agreement, particularly because it is not likely to involve any cost to the Exchequer. If I understand the finance of the Bill correctly, the State will receive an income of roughly £4,500,000. In interest on the loan, it will incur a liability—I would like to have this figure checked—of about £2,325,000, and in addition, there will be other liabilities in regard to the paying off of the loan. The net result will be that the State ought to have an excess of income of about £1,500,000 out of the transaction, and I think that is a conservative estimate. The State has already lost by not putting this policy into operation some years ago. It is a policy that was recommended in 1919 by the Sankey Commission and in 1925 by the Samuel Commission, and the financial provisions that were in the minds of the authors of the Sankey Report and the Samuel Report are not challenged by the financial arrangements of this Bill. The net result is that the State has lost the benefit of an income of at least £1,500,000 since 1919 or 1925.
§ Mr. Denman
The hon. Member must not forget that the Samuel Commission recommended a figure of £100,000,000.
§ Mr. Evans
We have now proceeded from the Samuel Commission to another Commission. Does the hon. Member wish to challenge the amount which we are considering at present? The Samuel Commission estimated that the transaction would cost roughly £100,000,000. Some people have estimated £70,000,000, and others £60,000,000. Let it be remembered that the figure now before us was adopted by a tribunal with which the Government agreed and the owners agreed; and not only that—it is a tribunal to the acceptance of whose award both sides agreed.
§ Mr. Denman
I did not object to the figure. I was objecting to the hon. Member's argument that we had lost this sum by not nationalising royalties many years ago. If it had been done after the Samuel Report, the State would have paid £100,000,000.
§ Mr. Evans
That is not so. That figure was an estimate, included in the Samuel 915 Commission's Report, of what was likely to be the value that might be put upon the property involved, but as far as I am aware, it was never suggested that that sum should be accepted as the sum which the State should pay.
§ Mr. Mabane
Does that estimate not depend upon the different rate of interest? Does not the lower figure now depend upon the possibility of the Government being able to borrow at a lower rate of interest?
§ Mr. Evans
Let us deal with the facts as they are. Undoubtedly there is at the moment the prospect of the State making a profit of £1,500,000 out of this proposal. It is no good putting those previous figures to me now, and in any case, I was not in the Government in 1919 or in 1925. If the Government in 1919 or in 1925 had carried out this policy, probably, in view of the conditions obtaining in the country then, they could have made a better bargain than is possible now. We are now concerned to consider the bargain which is presented to us by the Government. When we are engaged in such a big operation as this, there are interests which have to be considered. The royalty owner is dealt with fairly, and the colliery owner will get a benefit, for he will have the chance of getting rid of conditions affecting the working of his industry which have hampered and hindered him in the past, and this will enable him to make a much more economic and scientific use of his property in the future.
I hope the miners will get some benefit. Some part of the benefit which will be derived from the provisions of this Bill ought to be passed on to the miners, and some part of it ought to be passed on to the ordinary consumers. I do not argue that the State should make a profit under this Bill; I am willing that the bulk of the profit should be passed on to the industry. But I think people in general are very much interested in what is to 916 happen. They are interested not merely as consumers of coal, but as ordinary citizens concerned in the success, happiness and prosperity of an industry which is vital to the prosperity of this country. I would like to feel that some consideration was being given to the use of this opportunity of helping in that direction. Moreover, scientific research in this country has been of great value to the mining industry, and I would like to feel that further assistance could be given to it. Scientific research with the assistance of the State for the improvement of the efficiency of the industry—I should like to feel that that could be done. I should like also to feel that something could be done for the housing conditions of the mining population. And I should like to feel that something was being done in the way of insurance against what may happen, in the event of the amlgamation proposals being successful. I doubt whether they will be successful, but, in the event of their success, they may have the result, that a large number of people now engaged in the industry will be thrown out of employment.
I remember what happened when a large industry in South Wales closed down recently. Great pressure was brought to bear on the Government, and the argument was used, with which I had a great deal of sympathy, that if a large industrial undertaking establishes a community in any area, it is responsible for the social conditions which obtain there, and must accept some responsibility for the devastation caused by the removal of its operations to another part of the country. Should these amalgamation proposals succeed, they may lead to derelict pits and derelict areas in the coalfields of this country. When we are dealing with such a large sum as £75,000,000 I should like to feel that those matters are receiving consideration. It may be that we are too late to get anything out of the £75,000,000. It may be too late to get anything out of the £10,000,000. But I press on the Government the fact that the Coal Commission in the future will have an opportunity of contributing towards the objects I have indicated by the terms on which they grant leases. Let them say, in settling the terms of new leases, that they have graded the royalties in such a way as to minimise the difference between the rich and the poor coal districts.
917 I do not propose to go into details of the amalgamation proposals. The principle is one to which we on these benches have several times given our support. It is a principle which represents the incorporation of that rare quality which we call commonsense, but its practical application depends very much on the conditions which obtain, and I think the present conditions will have to undergo a considerable change if it is to be successfully applied. The conditions now are different from what they were when we were advocating the principle. In the days when we were pressing for that principle, the Government did not seem to be so enthusiastic in favour of it as they seem to be now. If they are really anxious to support the principle of amalgamation, then I do not believe that the provisions of this Bill will enable any compulsory amalgamation to take place for a very long time. The conditions to-day are such that I think it very unlikely that successful results will be obtained by these proposals. As I say, we have not put down an Amendment to the Second Reading of the F ill. We agree with it in principle. I can only hope that it will do something to remedy the crazy structure of the coal industry as it has existed in the past—crazy not only as regards the upper storey, but also as regards the foundations. I hope, also, that the Bill will enable the Stale to make some contribution towards the efficiency of the industry, towards the improvement of the lot of the workers engaged in it, and towards the comfort and the amenities of the people in general.
§ 6.35 p.m.
§ Sir Geoffrey Ellis
As one who has been pretty closely in contact with the royalty owners, there are one or two points arising out of this Debate with which I should like to deal. Arguments have been adduced purporting to show that the royalty owners are not only profiteers, but are entirely different from every other kind of profiteer, and that they deserve special condemnation. It seems to have been forgotten that once any form of property has been recognised by the State, it becomes transferable; and totally different considerations then arise when we are dealing with it. We are not dealing here with the people who originally did those unconscionable things of which we have heard. We are dealing with a form of property which 918 has been transferred from hand to hand, which is recognised as transferable property, and which is just as capable of transference as, for instance, a house in a case where a person owns two houses, and lives in one and wants to sell the other. That is the position which we have to face.
All that is being done here in that respect, is that the State, after a perfectly fair hearing, by a tribunal agreed to by both sides to assess the value of the property, is stepping in and taking over that property from individuals. I do not mind whether it is called nationalisation or unification. The word does not matter. The substance is what matters, and the substance of the whole thing is that it is desired to put this property eventually, as a single unit, so to speak, in the hands of the State. When, some day, it is in the hands of the State, as a single unit, the State will then be able to deal with it as a whole in relation to the industry as a whole, in a way that would not be possible with a number of royalty owners and a number of colliery owners. Obviously, they will be able to get rid of a great many of the difficulties from which the coal industry has suffered in the past, and is to some extent still suffering.
There are one or two small points which cannot, I think, altogether be regarded as Committee points and with which, I hope, I may be allowed to deal. A large number of colliery owners have had the prevision to buy land in the neighbourhood of their pits, and even to prove coal in that land. It is surely the highest form of efficiency in any undertaking to provide, as far as you can, for the future supply of your raw materials. But under this Bill, apparently, those colliery owners, in the name of efficiency, are to be penalised for efficiency. Obviously, a good deal of that coal which is not being worked to-day, which is not the subject of any lease, and is probably not required for about 30 or 40 years, will be valued on a basis which may, in the end, give to the owners a little less than they have paid for it, not including any interest on the purchase price which is being lost in the interim. I hope the Minister's Department will give some consideration to that point. I believe it will take a considerable time to get the arrangements for dealing with these leases into such an orderly form as will enable us to say that things are working smoothly.
919 That, however, cannot be helped When a large quantity of property is taken over in this way, one always finds that a considerable amount of it is subject to leases, covenants and arrangements which, obviously, cannot be interfered with, and which, again, have become subjects of transference. That is only fair.
It has been said that it is unreasonable on the part of the Government to have put off the day of payment—I think that was the expression used—for 4½ years. It has been said that it gives the royalty owners what is, in effect 4 ½ more years more purchase than the sum awarded. Reference was made just now to the fact that the Samuel Commission had recommended £100,000,000 as the right amount, but whether that would have been accepted or not is, of course, another question. Under the recent decision, what the royalty owners have had to take, and what they agreed to take, is very much less; and that is a fact which must be borne in mind. It seems to me that it is going to take a considerable time to sort out the various interests with which royalty-owning is concerned. I am not sure that the Commission, or even the valuers, will be able to do it; and probably, as in many similar cases, the Courts of Chancery will eventually have to decide between the various interests concerned in many of these leases, some of which are charged with annuities and other debits which will have to be met. But long as the time may be, in the view of some people who are in a hurry to see new things in the way of nationalisation, I believe that the change-over will in the long run be of the greatest possible benefit to the industry. I am sure it will give the State this opportunity—and I am not afraid of the implications of it—that it will be able to keep a control over the general management of the coal industry which it never would have been able to get or to keep, had royalties not been dealt with in the way they have been dealt with.
One can only look a certain distance ahead. It may be that 16 or 20 years hence the industry will be treated in a different way from the way in which it is being treated now. Hon. and right hon. Gentlemen above the Gangway ought to be the last to complain. At any rate, the industry will be in such a position that the Government of the day can deal with 920 it practically as it likes. If, in the future, one Government or another, chooses to take one line or the other, then that Government will have the opportunity of putting its policy into force without any delay or any trouble. I do not withdraw one word of what I wrote previously, from which my right hon. Friend quoted a little time ago. I held those views then, and so did some of my hon. Friends when unification or nationalisation of royalties was an unfashionable thing, and the majority of people who believed then that the practical results would be good take the same view now. Difficulties undoubtedly there will be, but because there will be difficulties, it cannot be said that we should not have the courage to face them and try to get over them.
There is one other question which appeals more particularly to those of us who are colliery owners rather than royalty owners, and that is the question of amalgamations. I do not understand, and have never understood, the insistence of some people to-day on amalgamation in the mass, so to speak, as a cure for all the evils to which industry is liable. Indeed, after some of the experiences that certain great undertakings have had, I should have thought that there would have been a little hesitancy on the part of this Government or of any Government to accept amalgamations as a cure for all the ailments that industry is heir to. There are many industries—I am not going to mention any of them, but they are well known to my right hon. Friend—in which some of the big concerns which have grown up as a result of amalgamations in industry in this country and particularly in industry abroad, would be in a far better position to-day, from the point of view of both capital and management, if they had remained on a smaller basis. The real answer to the problem, I think, is one that has often been given in this House, though latterly little attention has been paid to it. It is an answer which some of us with experience in the management of industry would put in this way, that your limit of control in any undertaking eventually must be the control that one man can keep under his own hand. If you go beyond that, you then run into a system of administration which can work only by means of very difficult mechanical arrangements; and you are faced with this final difficulty, that the moment you rely on mechanical arrange- 921 ments, you can easily then get into the position of being unable properly to follow everything that is going on.
That, it may be said, is only a general objection to amalgamations of any kind, and that is true. In particular, in the coal industry, a good deal of amalgamation has gone on. I noticed that my right hon. Friend said that there was still a number of small units which might be amalgamated. Those were not his exact words, but that was the purport of his remark. I think that is true, but there is a corollary too to that. There is still a number of small units that might, for the benefit of the industry, be exterminated, and not amalgamated; and if those units consider that they have any value at all, then, I think, power should have been given in this Bill for them to sell the goodwill that they possess in the way of quota and so take themselves out of the Bill altogether and allow the development of coal in other districts, or, rather, in other units of the district, where it could be better carried on.
I know that many of my hon. Friends here will say, "If you do that, if, in fact, you stop down any single unit "and I think logically you would be beaten to that point—" you will then run a danger of destroying the social overhead of the district, or, alternatively, if you decide to destroy the unit, some provision should be made for the people whom you may displace. "That is a perfectly logical argument, and I think it is a sound one. But in the last five or to years, particularly in the last five or six years perhaps, the advance of transport has really to a large extent insured employment and annihilated distance, to the extent at any rate of six, seven, or eight miles, and that in the case of men who to-day are living in villages where there is only one pit, or in districts where there are other pits within a distance of three, five, or six miles, it can no longer be said that if one small pit is shut down, they will be unable to find alternative employment in the district concerned. To that extent it has obviated a difficulty which may come in that way. Incidentally, it might be said to those of us who like the country in small rather than in large units, that it preserves possibly the village and the village life and all that that life means. That to some extent is certainly what a lot of us wish to do.
922 But I am not sure—I should like to think it was so—that the means that the Government have adopted to get through these compulsory amalgamations will get them where they want to be. I am quite sure of one thing in the process, that the idea of bringing to this House a general kind of statement that it is desirable to do something in any given area, without giving the House any details, is not a reality at all. If the system is more or less to be held in the Bill, I think the Government might consider this: The whole basis of whether you will or will not in this House accept an amalgamation depends on many more factors than that preliminary survey could possibly give the House, and if what the House ought to have is to be given it, then you are met with this difficulty, that this House, as it is constituted and as it works, is not the place to consider details of this sort on the Floor of the House. But that does not mean that the House cannot consider these questions by reference. It can consider a definite question put to it, in the form perhaps of some kind of Committee, even a Joint Committee of both Houses, to go into the question—a Special Committee—just as it considers detailed, small questions connected with local government matters in this country, details which Members of both Houses are perfectly competent to go into and to assess properly; and unless those details are given to the House, there will be no real assessment and, therefore, no real assent by this House in any question of compulsory amalgamation.
If the Government have decided to go on with compulsory amalgamations, I want the Minister to consider whether he should not give this House a real opportunity and not what I must say, at present seems to be merely the facade of an opportunity, in passing a decision on this question. I believe that to some extent the selling organisations which we have to-day in the coal trade have almost obviated the necessity for a good many future amalgamations; and I hope that in any consideration which the new Commission may have of these matters, they will take into full account the possibility of dealing with the question from the point of view of the selling organisations rather than taking compulsory amalgamation almost as a parti pris which prevents them from dealing with any other point 923 of view and any other method which would do just as well.
In conclusion, may I say one thing about the relations of the colliery owners to the public? In all these questions it is always the colliery owner who gets the backwash of the difference between the pit price and the price sold to the consumer in the house. I do not think it is sufficiently appreciated to-day what an enormous amount of the cost of every article is added to it because of the charges of distribution, and those charges are going up day by day, because of the increase in the cost of social services and social administration. This increase in cost has almost followed the increase in local charges, so far as distribution and transport rates are concerned.
But that is not the only thing. It is said that because the colliery owners working with the men have raised the price of coal, they have not taken sufficient consideration for great undertakings like the electricity and gas undertakings and so on. I am inclined to say very often to those undertakings, "You have had your opportunity; in the past you have had a price which has been economic to nobody and very hard on the people in the industry, and to-day you, who work your industry under a system of wages based on sheltered trades, are the last to come and say to us that we should not ask a price which enables us to pay our men a fair wage and to give our investors a fair return on their capital. "I think the provisions made, especially those adumbrated by the right hon. Gentleman for getting a better understanding of what cost means and the relations between the producer and the consumer, will help a good deal, and I hope that in all those considerations it may be borne in mind that you can never take a single industry by itself to deal alone with its costs and wages; you have to admit that they are all related, and the moment you make that admission, then the coal industry, like any other, is justified in paying decent wages and getting a reasonable return on its capital.
§ 6.55 p.m.
§ Mr. J. Griffiths
Most of the speakers in the Debate so far seem to have been driven back to the history books. The last speaker is the only one who has not 924 referred to the history of this industry, and I am afraid I shall fall under the temptation. I have discovered, from reference to the history of the industry with which I, like so many of my hon. Friends, have been associated all my life, that since 1860 there have been nine Royal Commissions, 30 Committees of Inquiry, and over 30 Acts of Parliament passed, all dealing with the mining industry. What a commentary it is upon private ownership and upon capitalism, what evidence of sickness in an industry, that over a period of two or three generations there have been nine Royal Commissions, each one spending a great deal of time and care in trying to find out what was wrong with the industry, an industry which, since 1860, has been so continuously sick that there has scarcely been a time when there has not been either a committee or a commission of inquiry or an Act of Parliament being passed. Therefore, my first word to-night is this: Here we are once more, in 1937, passing another Act of Parliament, another pill, again tinkering with the problem, and I want to support very strongly the Amendment which is on the Paper in the names of my hon. and right hon. Friends, that eventually this nation must come to the only real solution of this problem, namely, to transform this industry into a real public service.
I am not going to speak at length about royalties, because, quite frankly, if we are to buy out royalties, if this so-called compensation and all this method are essential for the purpose of securing real advantages to the men in the industry, then it is 20 years too late. I listened with great interest to the hon. and learned Member for the University of Wales (Mr. E. Evans) telling us how the Government of 1919 missed the boat. I do not think he was a member of that Government, but if my political memory does not fail me, he was one of its most perfervid supporters in Wales, and I thought therefore that it was a real case of Satan rebuking sin for the hon. and learned Member to come here, in 1937, and say what a glorious chance the Government of 1919 missed, when he himself at that time went around the country, or at least around Wales, to tell us that the members of that Government were the heaven-sent leaders of the nation who would restore the country to a marvellous condition.
§ Mr. Griffiths
That may be, but I have a recollection of a certain by-election in 1920 in which the hon. and learned Gentleman was concerned. Anyhow, in 1919 the Sankey Commission was set up by the Government, with a promise given to the miners of the country, who were determined that they would improve their conditions. They had become convinced, and are still convinced now, that, the only way in which the conditions which they desire could be obtained was by nationalising the industry, and they made that one of their claims. The Government of that day, headed by the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George), said to the miners, "Do not strike; stay at work; we will appoint a Royal Commission; we will choose an admirable man, well qualified, legally trained, who has spent years of his life in the legal profession in South Wales and who has learned the coal industry; we will have the best man as chairman of that Commission, namely, Mr. Justice Sankey. We will appoint representatives: the Miners' Federation shall appoint a number, the coalowners shall appoint a number, there will be some to represent other employers, and some to represent consumers, and we will refer the whole of this problem to it. First there is the problem of wages; secondly, the problem of hours of work; and, thirdly, and fundamentally, the problem of what shall be the form of ownership of this industry in the fixture."
The findings of that Commission, set up by the Government in "919 and accepted by the miners under the pledge that we would stay at work if we would give up the suggested strike, were accepted by the Government. Evidence had been submitted by the miners, the mineowners and by the royalty owners—who will ever forget the cross-examination of the royalty owners by Mr. Robert Smillie? And having heard all the evidence of all the parties concerned—the owners, the miners, the royalty owners, the public generally, and all kinds of consumers—that Commission came to a majority finding, first, that the system of private ownership in the mining industry stood condemned. Does anybody deny that? If anybody denies that the present system stands condemned, 926 why do you want this Bill? This Bill is a condemnation of it. If the present system of working and controlling the mines is admirable, why all these nine Commissions, these 30 committees of inquiry and these 30 Acts of Parliament? That is a clear indication that the present system of ownership has broken down. Now we are to have another Bill which will become another Act of Parliament to-morrow night. I do not know what the hon. and learned Gentleman is laughing at.
§ The Attorney-General (Sir Donald Somervell)
The hon. Gentleman said it would be an Act to-morrow night. It will only be the Second Reading.
§ Mr. Griffiths
We know enough of this Government and its methods to be certain that when the Second Reading is over to-morrow night the Bill will become an Act, and my experience leads me to believe that a Bill of this nature will pass into law very much as it leaves the House to-morrow night.
The second finding of that Commission was that the only possible alternative was to nationalise the industry, to make it public property, to transform it into a great public service. And here we are now, 20 years afterwards, just beginning merely by unifying royalties. I have not much to say to-night about the royalty owners. I would not myself pay them a penny. I believe that if the State or an individual purchases something from a man or a corporation which has produced that thing, compensation is due. Compensation should only take place when a man or a body of men sells something which they have produced to somebody else. The royalty owners have not produced the coal. They have no moral claim to it. They have no social claim to it. I make no bones about it. What we would like is a Bill saying that on and after a certain date the coal would revert to its real owners, the nation. It is the property of the nation; it ought to belong to the nation. It only came to the royalty owners by a fluke decision in the Courts. Prior 10 that it did belong to the nation. I am sure that all the miners of the country would be prepared to say that on and after a certain date the coal which is the treasure of the nation should revert to its real and moral owners, and we should put in a claim for 927 compensation to those who have wrongfully held it for the last two centuries.
I should like now to come to Part II of the Bill, because I look upon it from the point of view of the people I represent in this House, the people with whom I work, the people of whom I am one. I have, therefore, examined with a great deal of care these proposals for the setting up of a permanent Commission, which is to be given the task of amalgamating coal mines. The word that is used is "reorganisation," but when we look into that reorganisation we find eventually that what reorganisation means is that the number of undertakings is to be reduced, and reduced to achieve a purpose, and the purpose is to secure a more efficient and more economical working of the industry. I want to brush away all that legal verbiage, and come down to what is really meant by more efficient and more economical working. I want to try to give to the House some idea of what creating efficiency in a coal mine might mean to the miners unless they are protected. These amalgamations which are to take place after 1942 will not be essentially different from the amalgamations that have taken place in the last few years in the coalfield from which I come. The only difference in the future will be that the amalgamations may be imposed upon certain people, whereas for the last 20 years they have been either voluntary amalgamations or amalgamations imposed by financiers and banks. But in any case the only difference will be the method by which amalgamations are achieved.
When we on these benches speak about amalgamations and what they are going to do we are not speaking of something of which we do not know. In the coalfield I come from they have amalgamated to a point beyond even the dreams of the Secretary for Mines. If amalgamations are a solution to all our problems, South Wales ought to be one of the best coalfields in this country. Does anyone deny that? Eighty per cent. of the anthracite output of South Wales is in the possession of one company; 75 per cent. of all coal produced in South Wales is produced by four companies. Therefore, if amalgamation is a remedy, what do you hope that amalgamations will do in Yorkshire, Durham and Northumberland that they have not 928 done in South Wales? I think we are entitled in the name of the miners and of the nation to ask for a reply to that question.
And what have they done in South Wales? Have they brought a remedy? Have they improved the condition of the miners; have they improved the safety of the miners; have they improved the service of the industry to the nation? All they have done is to tie round the neck of industry a financial octopus which is ruining it. If I may cite one company, it is in this position. It has debenture stock, it has funding certificates, it has preference capital, it has ordinary capital, and in order to meet its fixed obligations and to pay 5 per cent. on its ordinary capital, it must make a profit of 25. 9d. a ton. Is that the way in which the industry is going to be restored to prosperity? Is that the kind of amalgamation contemplated? Is it these financial arrangements, is it this linking together of people for the profit of underwriters, is it handing over the industry to inhuman corporations—is that the way in which the industry is going to be cured of its ills? If it is, before you promise to revive the mining industry by reorganisation, I ask you to look upon what reorganisation has done in South Wales.
With regard to economic working, if you say, "Here are a number of collieries that must be amalgamated because they will then eventually be more efficiently run," what do you mean by "efficiently run "? Do you mean that they will produce coal at a lower cost? Is not that what it means—a lower cost of production? Therefore, the purpose of amalgamation is to create efficiency, and you agree that by efficiency you mean to reduce the cost of production, and the assumption is that that will cure the mining industry's evils. Most of the evils of the mining industry in the last few years have been produced by this very process. I was a member of the Conciliation Board in South Wales, and at the end of the 1926 strike we met the owners in Cardiff. Leading our side was a man whom the miners in this country will always hold in reverence, the late Tom Richards. I can hear him saying to the President of the South Wales Coalowners on that day: "Now you have won the battle. You can make our men work eight hours per day; you can cut their wages. If my estimate is right the total 929 effect of all the gains you will get from your great victory will be to reduce costs by 4s. per ton. I warn you now at the end of 12 months you will come back here and tell us Gentlemen, we are still losing money,' because the way to revive this industry is not to concentrate upon costs of production but to busy yourself with the price at the other end." I think that everything that has happened in the mining industry since then has proved the truth of that.
Suppose you have a number of collieries amalgamated—two, three, four or five. They are amalgamated in order to make them more efficient, which in pit language will be converted into, "You must produce coal at a lower cost." Will hon. Members please visualise what that means to the manager under this new kind of organisation when the big man at the head gets the costings sheet on Monday, and finds that the costs of a colliery are a penny a ton higher than a week ago, and the order goes out that that penny must come off next week? The poor manager is in many ways the worst driven of any employé, of the mines. The manager finds himself with the ultimatum, "Reduce the cost by a penny next week or "you do not need to say anything after" or, "he knows what follows. And the whole purpose of this amalgamation under private ownership is to throw the whole emphasis on the cost of production in the pits. Throwing the emphasis on the cost of production in the pits means intensified labour. From 1928 up to this year the proportion of output mechanically produced in this country has doubled. In 1937 we have once more reached a level of production of 5,000,000 tons a week—the first time we have reached it since 1929, but with this difference, that in 1929 5,000,000 tons a week was produced with an eight-hour day, whereas in 1937 5,000,000 tons is produced in 71 hours by 176,000 fewer men. In that period of eight years a coalfield bigger than the whole of South Wales has been wiped out owing to the condition of the industry.
I say, therefore, that all this emphasis upon the cost of production and efficient working enhances the pressure on the working of the colliery. I will ask hon. Members to bear in mind some figures I have which were given to me by the 930 Secretary for Mines in answer to a question. They ought to make us all feel guilty and ashamed. Since 1921 there have been 1,036 separate explosions from firedamp or coal damp in this country, an average of over one explosion per week. They have not all been Gresfords, but that is a matter of luck. The number of people who are killed and injured in an explosion is a matter of luck and time. Compare that with other countries. In Holland a new coal mining industry has developed, largely since the War, in which the mines are owned by a State corporation, not by a commission of the kind proposed in this Bill. The fatal accident rate in the Dutch mines last year was half that of the privately-owned mines of Great Britain. Therefore, I want to urge upon the House and the Government that in passing this Bill they are throwing all the emphasis upon cost of production, the lowering of costs, and the speeding up of labour, all of which add to the risks, so that in the end efficiency may be paid for in the blood and tears of the miners.
The other remedy which is put forward under this Bill is to close some collieries which are called uneconomic pits. Sometimes hon. Friends who have experience of mines hear hon. Members who have no experience speaking of uneconomic pits, and it is hard to sit down and listen to them. Conditions in a pit are not determined by man, but by nature. What is an uneconomic pit to-day may be the best and most economic next year. That question apparently is to be decided by a Commission sitting in London. I do not know who the members may be, but they may not even be able to understand what a geological disturbance is. They are to sit in London and say, "Here is a colliery whose cost of production is going up, and it must be closed." If the closing of the pits as such and reducing the number of undertakings is a remedy for the mining industry, we should not be discussing it to-night. Look at the figures of pits closed which were given by the Secretary for Mines. We sometimes ask him questions and he gets angry, and the replies are sometimes very inadequate, but, inadequate as they are, he will find some difficulty in relating them to this Bill. He has told us that since 1924, 1,390 pits have been closed in this country. They 931 employed in the aggregate 201,244 men. Defenders of private enterprise tell us that this industry can be put on its feet by destroying the uneconomic undertakings. How many more will it be necessary to shut before the industry can be regarded as efficient? Shall we be told later on that there will be another hundred or two closed? All this shows the hollowness of the proposal as a substantial or serious contribution to the problem of the mining industry.
In what I am about to say I do not want to be sentimental or emotional. I recently read the War memoirs of the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George). In one chapter he speaks of how they were getting trouble at one time in the industrial life of this country, and there is one page in which he talks about the soldier. He said that the soldier was risking his life for his country, and that whenever anybody from France spoke to him he was told that what caused the most damage to the morale of the men was the thought that while they were risking their lives there were others who were making profits at home. Let us apply that to the mining industry because there we touch the psychology of this problem. When these men leave their homes every morning and say "Good-bye" to their families, they do not know whether they are coming back again. They risk their lives every day, and, speaking on behalf of the miners, I can say that we shall never get men to take that risk or to go down the pits and put their best into their work unless we deal in a different way with the industry. With all the Acts of Parliament and Commissions, the fundamental success of the industry will depend on the spirit in which the men go to work. As long as there are royalty owners drawing 8d. a ton—and all the Bill does is to change the name, for in future the industry will pay interest instead of royalties—and as long as there are debenture holders drawing 6d. per ton of the coal produced, a miner will have to pay Is. 2d. for every ton he produces to the parasites on the industry.
You will never get real peace in the industry until it is transferred into a public service. If you nationalise it and make it a great public service, you will invoke all the experience and knowledge of the 932 men in it. The industry would utilise what it does not now, the marvellous fund of knowledge which exists among the men who are now shut outside and who have a great contribution to make to the running of the industry and to making it really efficient. Whether this Bill is passed or not, some time—I hope it may be soon—the House and the nation will have to come back to the Amendment which has been moved. The industry will never be run successfully until the miners when they go down to the pit in the morning do so with at least the consolation that there is no parasite of any kind battening on his labour, and that if he risks his life he is risking it in the service of the people and the nation.
§ 7.24 p.m.
§ Mr. Clement Davies
The sincerity and eloquence of the speech to which we have just listened deeply impressed us. I wish I could congratulate the hon. Gentleman upon the logic of his argument, as I do upon his eloquence and sincerity. I tried my best to follow what was passing through his mind while he was dealing with amalgamation. He condemned amalgamation as such and then ended his speech with an eloquent appeal for one amalgamation. Does not the hon. Gentleman see that the two things are incompatible? It is a form of logic I cannot understand.
§ Mr. J. Griffiths
The whole purpose of my argument was to prove that if amalgamation was a remedy, we should not have many of the evils from which we suffer because we have had amalgamations for many years; and that the real remedy was that outlined in the Amendment.
§ Mr. Davies
I believe that the amalgamations we have had hitherto are not such as I have ever had in mind, and I do not think that they have added to the welfare of the industry. Like the hon. Member, I have been spending the last few days searching into history. It is extraordinary, as he reminded the House, when we see the number of inquiries that have been made and the number of reports issued, and the Acts of Parliaments that have had to be passed, and when we realise that even this Bill is overdue. One cannot help asking what is the reason this question has been troubling generation after generation for the last Too years. I think it will be found in the 933 pecularity of the coal industry itself. Coal is essential for every industry and necessary to every household. It differs from every other commodity in that, as a general rule, other commodities, which are specially manufactured commodities, follow the population. People have to go to the coal itself in order to get it. If a factory is burned down it is not necessary to rebuild it in the same place. Very often, because of changed circumstances and methods and of change in population, the factory is abandoned. A new invention may alter the whole circumstances. It is not so with regard to coal. Nature has put it down in the earth and man must go after it to win and dig it from the bowels of the earth.
Unfortunately, the laws of this country had no regard to economics. The ownership of coal has not been dictated by economic reasons at all. It has been dictated partly by historical reasons and partly by personal reasons. The law with regard to the transfer of property, and especially with regard to testamentary dispositions, has determined the position. The result is that the industry started in a haphazard sort of way. There has never been any planning. Somebody has come along at some time or another. He has either had capital or has asked for the capital to be subscribed, and has gone to an owner of land who was a surface owner, has made a bargain with him, and started to sink the mine shaft. That shaft may not be in the best place for winning the coal, may not even touch the seam, but that is the shaft, if he does reach the seam, which will be worked, because the expense of putting another shaft in a better place is so great that it is better to keep on working. There never has been any plan, and because of the fact that economic laws found themselves at variance with the ordinary law of ownership of property, because there has been a complete lack of planning, there have been these continuous disputes and the efforts made to settle them. It is interesting to look at the reports of the Sankey Commission, the Samuel Commission, and the Lewis Committee. I know of no commission the members of which were so much at variance with one another as was the case with the Sankey Commission. There was no unanimity about anything, apparently, except that they should disagree. Even on royalties they did not agree.
§ Mr. Davies
Well, the majority were in favour of the nationalisation of royalties or the State purchase of coal. The Samuel Commission were in favour of this, and the Lewis Committee, as the President of the Board of Trade pointed out, although they had not to deal with this question but were dealing only with markets, came to the conclusion that there would have to be amalgamation; and that was possibly at the back of the mind of those who made the recommendation of the Samuel Commission. When one looks at the Samuel Commission Report and examines carefully some of the reasons advanced by the Sankey Commission it is realised that they were in favour of the nationalisation of royalties because they thought it was the only way in which to start planning for reorganisation. Sir Herbert Samuel, as he then was, said definitely that his reason for recommending the nationalisation of coal and royalties was that it would lead to reorganisation. Once that had been done, he said, they could begin reorganisation.
Apparently that is the view taken by the Government of the day. I am sorry, but I disagree with them. Contrary to the hon. Member for Llanelly (Mr. J. Griffiths), I am in favour of reorganisation, but reorganisation carried to its logical conclusion. He pointed to a number of amalgamations which have already taken place. The bulk of those amalgamations, certainly the earlier ones, were not dictated by economic reasons in the sense of working the mine economically, but were dictated by the financial reasons of somebody or other. To such an extent were they so dictated that I rather feel, as Sir Herbert Samuel said on one occasion, that a pump to pump out the watered capital of those companies was more essential than a pump to pump out the flood water in the mines. That is what I visualised in January, 1930, when the late Mr. William Graham was proposing his method of dealing with this situation. His method was quotas and standards for production in the various mines. The method that we visualised, on the other hand, was the establishment of a commission which would inquire into the whole of the industry and into the whole of the coal-fields.
§ Mr. Davies
Perhaps with the complete agreement of the right hon. Gentleman who then occupied the Treasury Bench. Long before the Amendments with regard to amalgamations were introduced Mr. William Graham, in the very first speech he made on the Bill, said:I realise that I may have to consider amalgamations and reorganisation. I am not going to do it in this Bill, because this is an urgent Measure to deal with an urgent situation which has arisen, but I promise that before long I shall be dealing with them.On the next day he was followed, in the winding-up speech, by the then Prime Minister, who repeated that promise—repeated that proposals for amalgamations would he introduced forthwith and would become law at the same time as, he hoped, the Bill dealing with quotas would become law. As it happened, Mr. Graham himself later put in his own Amendment introducing amalgamations into his quota Bill. That is how the thing arose.
In 1930, when this Reorganisation Commission was suggested, I personally was hoping for much better things than have been attained. The President of the Board of Trade has to-day expressed his disappointment, and I share it. The Commission have really done nothing worth doing. I had hoped that they would have made a survey of the whole of the country, of all the coal seams, of all the undertakings, of all the villages, of the conditions of the miners, and everything else, so that they would have in their minds a complete picture of the industry from John o' Groats to Land's End. I should also have liked them to have had a complete picture of the markets, of where the coal went, a complete picture of transport, and a still more complete picture of new methods of utilising coal, especially at the pit-head. When they had gathered that information together they would have been able to suggest 936 what areas could be properly amalgamated, without any watered capital of any description.
I should like to know how this Bill is going to deal with problems such as the Amalgamated Anthracite Company. The average capital of coal companies is approximately i a ton, but in the case of the Amalgamated Anthracite Collieries, Limited, it is approximately 3 10s. a ton. How is that problem going to be dealt with?
§ Mr. Davies
That will depend upon this Commission. It is not a Commission to which I am very favourable. We have had the experience of the Commission of 1930. I have been telling the House what I had hoped that Commission would do. It would have dealt with the Amalgamated Anthracite Company exactly as it would have dealt with anything else, and said, "If you are going to come into this area you will come in at your true worth as a going concern, at your value as between a willing seller and a willing buyer. "That is what I had hoped for—that amalgamations of that kind would have covered the whole area.
Once that had been done, what was to happen with regard to the coal? The Sankey Commission, the Samuel Commission and now the Government say that the State will purchase the coal and then let it to the amalgamated groups. Why? Because they say that after you have bought out the coal it will be easier to settle the areas. Under this Bill we are going to compel units coming in to become parts of new amalgamations. They still will have to run their risks, they will still have to find the money, but what about the coal? The actual owners of the coal will retire from the scene altogether with £66,450,000. Why should they be the pampered darlings of Commission after Commission, and now the pampered darlings of the Government? Throughout the last century and a half the public have risked their money and the miners have risked more—they have risked their lives—but the owner of the coal has risked nothing, nor contributed anything at any time. He has been fortunate in having the coal. He has made his bargain with the coal-worker, who has had to get public money to sink a shaft. It costs £1,000,000 to sink a shaft, and even then it may not reach 937 the coal. In that case the money is lost and people have risked their lives for nothing, but all the time the owner of the coal has been drawing his dead rent, and all the time is better off, because he is nearer the coal and can make an even better bargain with a newcomer. Now we say to these owners of the coal, "We will give you £66,000,000 in gold and leave the others to run the risk."
Why could not we have done with the owner of the coal exactly what we are doing in the case of the operating units? We are going to force operating units into an amalgamation, giving them shares in the amalgamated concern. They will have to run the risk of good trade or bad trade. They will have to face depressions. They may lose their all. But the owner of the coal is absolutely safe. My suggestion, which is the suggestion I have made all along since 1930, is that the owners of the coal should not be placed in a better position than those who are actually working the coal, that once an amalgamated company has been formed and has been given the area which it is to work we should turn to the owner of the coal and say, "You also will become a party to that company, and in return for the coal and the lard which you are handing over you will get shares in the amalgamated company, no more and no less." The coal boat will still have to face storms and the crew will have to be listening for news of depressions—as an hon. Member says, the boat may even become overloaded—but the owner of the coal will be safely left on land with more than 60,000,000 to comfort him after taking no part in the struggle. I regard that as a wanton bargain, and I can be no party to it whatsoever.
§ 7.45 p.m.
§ Mr. T. Smith
The Bill shows in many respects what change has come over the House in the last two or three years. Take the continuance of Part I of the 1430 Act. Here we have a Government proposing that that Part shall be extended, with slight Amendments, for a number of years. I remember very vividly a discussion in this House in 1930, when Part I, introduced by the Labour Government, was under discussion, and when many supporters of the present Government were almost foaming at the mouth 938 at the proposals contained in that part of the 1930 Act. Although we did not regard that legislation in 1930 as perfect—and we do not to-day regard it as perfect—we looked upon it as one-sided in character and capable of amendment in two or three ways. I wish the hon. Member for Ecclesall (Sir G. Ellis) were in his place, because he speaks in this House on mining matters largely from the point of view of the coalowner. I do not; I speak as one representing a mining constituency who puts the point of view of what may be termed the average organised miner.
I agree straightaway that restriction of output, more or less in relation to demand, was necessary, in view of the huge production at that time and the cut-throat competition which was taking place, and with regard to the fixing of the minimum wage at the pit-head but I never believed that the administration of the 1930 Act should be one-sided. We of the Miners' Federation asked, and ask now, that there should be some miners' representative on the central council and on the executive board in the various districts. If we had had that workmen's representative there, from the working of the Act in 1931 up to date, there would not have been as many evasions of minimum selling prices and as much jiggery-pokery in the industry as there is to-day. When coalowners say that the backwash of public criticism on account of high prices falls on their shoulders, I say in most cases they are justified. What have we to-day? Coalowners are not merely coalowners; some I could mention are interested in electricity and in finance. You do not know where their interests lie. There are colliery companies to-day not content merely with producing coal; they have a number of subsidiary companies running alongside the parent company, privately owned and arousing a great deal of suspicion because not a penny piece of the profits they make in the private companies comes back into the pool out of which the wages are paid on the ascertainments. That is why we ask for representation on the executive council and on the central board. believe that while we have private ownership of the mining industry the price of coal at the pithead should be such as to pay a decent wage to the workers and a decent return on the capital invested.
939 We honestly believe that. We say that if the wages of the workers are to be based on the selling price of coal those whose wages are paid ought to have some say as to what those prices should be.
As regards the other part of the Bill for the taking over of mining royalties, I want to speak quite frankly and fairly. I never thought I should live to see a National Government, largely Conservative, nationalising mining royalties. I did believe in pre-war days that I should see a Liberal Government do it. We make no mistake about why the Government are doing it. They are not doing it because they have suddenly turned Socialist, but because they have found that the private ownership of minerals has prevented the proper economic planning of the basic industry of mining. What would have happened to this country if we had been wise enough to nationalise mining royalties years ago is hardly calculable. A good many students of history have spoken. I spent a few hours yesterday getting back to 1568, and I do not mind saying that the 1568 decision of the courts was a rather useful one to the landlord. It said, in effect, that all minerals, except gold and silver, belonged to the owner of the land. As there does not appear to be much gold and silver in the country, that decision does not benefit the Crown, but it has certainly benefited the landowners.
I want those hon. Members who are interested in mining royalties to believe that we feel strongly on the point. In my researches I found plenty of evidence to show how much coal had been wasted to the nation because of the private ownership of minerals, and I found that a very eminent mining engineer, whose name is well known, estimating that over 4,000,000,000 tons of coal have been lost to the nation because of private ownership. I go further than that and say—and if any hon. Member challenges me I will give him facts and figures—that private ownership of the mineral wealth of this country has caused loss of life to underground workers. I am not quite convinced that we are doing the right thing in paying £66,450,000 for that coal. I was interested when the President of the Board of Trade said that there was a psychological factor in this question. So there is. I do not mind confessing that in my 16 years underground as a mine 940 worker, when we used to thrash the coal face with a pick before mechanisation came in and we were knocking coal off the coal face at 1s. 7d. per ton, we used to calculate on nearly every shift we worked how much the royalty owner was taking out of that pit. We know what actually took place.
In dealing with the question of compensation one must have some regard to the service of the industry. I hope the noble Lord the Member for Newark (Marquess of Titchfield) will not contradict me when I say that. A company wants to sink a pit, and the first thing they have to do is approach the landowner and make an arrangement about the working of the minerals. The landowner risks no capital; the company risks the capital. The history of the coalmining industry during the last 50 years shows that the landowners have been the Dick Turpins of the mining industry, demanding their royalties from coal mines, even when shareholders got no return on their invested capital and when the miners were working hard in dangerous conditions for a starvation pittance. The Chancellor of the Exchequer may recall very vividly the Debates in this House in 1909, when there were men like Sir Arthur Markham, a man well known in the coalfield, speaking in this House. He gave one instance in which he said that he knew a certain landowner who was charging £800 a year for way-leaves of coal carried across a narrow strip of land no larger than the Floor of the House of Commons, and that he could multiply that instance by thousands. I will tell the House two things. On the Petroleum Bill a few years ago I had an altercation with a certain Noble Lord who represents a Derbyshire constituency, on the question of the royalty owner, and, as a result of the publicity given to that argument, I was astonished at the amount of information sent to me, even by coalowners and employers of labour, about the exploitation of the private ownership of minerals. One which I will quote is:I know a pit that paid more than £40,000 in 59 years to a certain coalowner, and the value of the coal that was taken out of that pit for 59 years was less than £1,000. They had to go on paying because they were carrying coal across a narrow strip of land.There is a psychological factor, but I make a differentiation. Land is acquired in two ways, either by purchase or inheritance. Where there has been a legiti- 941 mate purchase, I would pay proper compensation, but where there has been inheritance I would not pay as much. The policy of the Miners' Federation on this point has for years been that they would differentiate and they would not pay to those who had inherited land, except on compassionate grounds. I have read "Our old Nobility," and I refreshed my memory of it during the week-end. I know how some of the land was acquired in days gone by, and that is why I differentiate.
We are going to pay on a 15-year basis. There is no set standard for this purchase price. The only way to assess it is according to what is fair, having regard to the circumstances. There is nothing more sacrosanct about 15 years than about 12½ or 10. We are to give £66,450,000 in a few years to about 3,800 royalty owners—that is the number according to the evidence given before the Samuel Commission. We on these benches who have worked in the industry for our living feel and speak strongly on the point. I want to make one contrast. The average working life of the miner in this country to-day, leaving school at 14 and dying at the average age of 54, is about 40 years. In that time he will not earn more than £4,000. In pre-war days the wage was 6s. 5d. a shift; the average to-day is about 51s. per week, reckoning holidays, breakdowns and the rest. The £4,000 is as much as he will earn in a lifetime of 40 years; yet the Government are here proposing to give £66,450,000 to only 3,800 people.
I want to give another contrast. On Friday last, this House, to its shame, refused to give to the injured people in industry a better Compensation Act than they have, and 205 Government supporters said, in effect, that 30s. was sufficient for a man so maimed. To-night they will vote for £66,000,000 without any regard to the contrast. One or two contrasts have already been given. In the last 19 years, 19,250 lives were lost in the mining industry, and the total compensation paid in that period is just equal to two years' royalty, £5,222,968. I therefore say that it is about time that something different took place in the mining industry. These standards of valuation are wrong. I was brought up in a colliery village. I went into the pit after my parents died, and I lived with people who had lived in the same locality 942 for 87 years, on the same landed estates. What was our lot in life? Off to the pit at 5 o'clock in the morning, for 15s. or 16s. a week, and working eight hours a day for six days a week. What did we find? Pit heaps all round the village. Nearly every mineral owner in the county was then living in a castle. Is there any fairness in conditions like that? If we are opposed to paying a large amount of money it is because there has been too much exploitation of the miners. We have lived to see the day when a Conservative Government are prepared to bring such a proposal forward.
I shall not argue at length on the question of amalgamation, but I shall say that on this side of the House we are naturally suspicious of any proposal for working a fewer number of undertakings in the mining industry. We know that it means fewer men employed, that it means derelict districts. The hon. Member for Ecclesall need not say that men to-day can move from one pit to another with the certainty of getting a job. They cannot. There are only 770,000 employes in the industry to-day, as against over 1,200,000 10 years ago, and we have to watch with care any proposal which comes before this House still further to reduce the number of undertakings in the mining industry.
I know the argument of the Mines Department. They say in effect, as they said a few years ago, that what is necessary in the mining industry of this country is a surgical operation. But there is the social problem that is left behind, and it is the social problem that we on these benches have to keep in mind. If there is to be still further amalgamation, there ought to be some safeguard that the men who are displaced are not going to be thrown on the scrap-heap. There ought to be proposals for a reduction of hours in order to absorb still further the younger men in the industry, and some of this surplus money ought to be used to provide a decent pension scheme for the aged and displaced workers. If these concessions could be obtained, we should at least look with a more kindly eye on the Bill than we can at the present time. We believe that, just as the Government have been driven to nationalise mining royalties, so the economic position of the mining industry will drive either this Government or some other Government to nationalise the mines and the ancillary industries. I say with- 943 out reservation that we on these benches will go into the Lobby and support the Amendment, believing that we are doing it in the best interests of the industry and of the nation generally.
§ 8.3 p.m.
§ Lieut.-Colonel The Marquess of Titchfield
I have been rather wondering, Mr. Speaker, whether it would be right and proper for me to try to catch your eye, because, as many hon. Members know, I am directly financially interested in this Bill. But, as this Bill is a matter of general importance, and as I do not intend to take part in the Division to-morrow night, I feel that hon. Members will agree with me in thinking that it is right and proper that I might say a few words now. Those few words will be confined to trying to tell my hon. and gallant Friend the Minister for Mines how the Bill can be made better, and how certain blemishes in it can be obliterated.
I want to say a word on Clause 9. It is only a small point, but, if someone wants to grant a colliery company a new lease, he must supply the Commission with a copy of the proposed lease at his own expense. As I say, it is only a small point, but it is surely unfair to force people to incur extra expense if other people are going to get the advantage of it. I should also like to say a word on Clause 13, which is really on all fours with what I have just said. Sub-section (z) of Clause 13 says that certain documents relating to the management of coal shall be handed over to the Commission. I think that these documents should be paid for by the Commission. In many cases they have cost a great deal of money to prepare, sometimes £500 or £600, and I think it is only right that, if the Commission are going to get the advantage of these valuable documents, the original owner should be compensated, at least to the extent of the original cost.
There are various questions that I should like to ask my right hon. Friend. The first is whether Clause 14 will prevent a surface owner from getting compensation for damage to sewers and deep drains. I am not certain whether the Clause will prevent that. My second question relates to Part II of the Second Schedule, paragraph 6 (2) of which says that the compensation,shall be limited to damage which could not have been avoided by reasonable and proper 944 precautions taken in the design and construction of the buildings or works to minimise damage in the event of subsidence.If this is the case, I think it is very unfair to the surface owner, because it will increase his cost of building enormously. I should also like to point out, while I am on that subject, that in the Bill there is no reference to compensation for crops, stock and water supplies.
Turning to the Third Schedule, I should like to ask my right hon. Friend whether a copyholder is entitled to compensation out of the £66,000,000. I understand that that is a very difficult point of law, but, if a copyholder is entitled to compensation out of the £66,000,000, I understand that some 500,000 or 600,000 people will be involved, and, if as many people as that are involved, it will mean that the £66,000,000 will not go round very far. There is just one more question that I would like to ask. It relates to Subsection (3) of Clause 18, which deals with working facilities. Does this Clause mean that the surface owner will only get the rent that he has charged heretofore? If that be so, I think it is unfair. The owner might easily let the surface for a much lower rent than the surface is worth, for some reason or other, and, when the Commission seek working facilities, I think the compensation should be paid, not on the actual rent charged, but on the true value of the land.
That is all that I wish to say, except that I want to make a plea for a very excellent body of men, the mineral agents. Under this Bill the mineral agents are to get no compensation whatsoever. [Interruption.] They are a very admirable body of men. Hon. Members opposite are always talking about compensating miners and I should like to see miners get compensation, too, if possible. Why hon. Members should laugh because I refer to the distress of a very admirable body of men, I do not know. I should like to see some compensation given to these mineral agents. How much and in what manner I do not know; that is a matter for the Mineral Agents' Association and my right hon. Friend. I hope that my right hon. Friend, before the Committee stage of the Bill, will look into that matter, and, if he will do so, I shall be very grateful. I apologise to him for having brought "forward what are purely Committee points, but there will 945 be many unfairnesses under the Bill as it stands, and, if my right hon. Friend would just look into these matters before the Committee stage, I am sure that the Bill, when it comes back to us for Third Reading, will be much better in form than it is now.
§ 8.12 p.m.
§ Mr. Denman
The Minister will, I think, have no cause for complaint as to the course that the Debate has hitherto taken. The last speech from the Labour benches struck me as a speech of satisfaction rather than of complaint. The hon. Member was pleased, as all Labour Members must be, that unworked coal is at last to be nationalised. I hesitate to express an excess of enthusiasm for the Bill, partly because I know that it occasions sorrow to some colleagues of mine, and it is not very good manners to show undue elation at something which does not cause elation to one's friends. Moreover, I am an Ecclesiastical Commissioner, and the House will be under no illusion as to the fact that this Bill means a serious loss of income to the Ecclesiastical Commission. Of course. we cannot tell, until the final valuations are completed, how the Measure is going to work out in any individual case, but, on the best estimate we have been able to form, it is going to cost us about £140,000 a year. That information may give pleasure to hon. Members opposite, but they will also realise that it is a very substantial loss of income—perhaps about half our income from coal.
In return we receive a gilt-edged security, as it has been called. Hon. Members will perhaps believe me when I say, regarding the problem merely as one of economics, that I would far prefer to own coal rather than any paper security. A commodity like coal is of enduring value, but the value of any security that is dependent upon the value of money is certain to fluctuate, and is very likely to fall. The tendency of money for generations has always been to fall substantially in value. As property to be available generations hence, I would as soon own coal as I would gold. It seems to me to be a commodity of perpetual value. From the point of view of an enduring corporation like the Ecclesiastical Commission, there is no form of property that I would prefer to own, apart from political considerations, so that I cannot 946 be expected to feel great enthusiasm for the exchange of this sum of money for the income that we have enjoyed now for a long time. Although as an Ecclesiastical Commissioner—I am not, of course, speaking officially for the Ecclesiastical Commission this evening—I can derive no great satisfaction from the Bill, nevertheless, as a Member of the House of Commons, I regard it with great satisfaction. For long it has been common ground among all who have examined the coal problem that the ownership of coal should be unified, and public opinion has been so educated in these matters that it has come to accept without any dissent the old Labour proposition that this commodity should be owned and controlled by the State.
I should like to make one or two comments on the Bill itself. Those who own coal now cannot possibly object to the price that the Bill offers them; I think that that has been generally recognised in the course of this Debate. The exchange is undoubtedly an exceedingly favourable one to the State. The State will make an exceedingly good bargain, but the owners at every stage agreed to the procedure by which this figure was reached. Their disappointment is readily understood. They had had held up before them the specific figure of £100,000,000 that was suggested after very careful examination by the Samuel Commission, which consisted of people who had economic minds and who were as capable as anyone of judging fairly on a subject of that sort. Their figure of £100,000,000 was suggested at a time when Government money was worth about 41 per cent. which meant the owners would have got out of their money an income of 4,500,000. With the present figure of £66,000,000, we do not know what the value of money will be. At the present time it is worth 31 per cent., and that obviously means a very much reduced income. But they accepted the Tribunal as to personnel and terms of reference, and they are absolutely bound by the figure that that Tribunal arrived at.
One criticism that I would venture to make on Part I of this Bill is that the process is one of incomplete nationalisation. The benefit of the transfer is to inure, not to the State, but in the first place to the colliery owners. The scheme is that as the Commission realises its 947 profits, so the royalties paid by the colliery owners are to be reduced. I am not for a moment going to dogmatise as to who is to be the ultimate beneficiary of that reduction in royalties. It might be the miner, or the colliery owner, or the consumer, or all three, but, whoever it may be, this coal which is now being nationalised should be owned for the good of the State and not for the good of any section. I believe that this point of view would be clearer to us all if we ceased to think about the word "royalties," which has really injured clear thought on this subject from the beginning. What is being transferred is not royalties, but the unworked coal. Unworked coal, which will in future be owned by the State, is an exceedingly valuable form of property, and I suggest that there is no reason at all why the State should give away its coal cheap to anybody.
Let the House remember that the royalty is the only payment made by the consumer in respect to the raw material itself, for every other penny that is contained in the consumer's price represents the charge for wages, profits or services that is incurred in bringing the coal from the earth to the consumer. The royalty—6d., or whatever it is—is actually the only sum which the consumer pays for coal as a raw material. We all agree that coal is the foundation of British industrial prosperity and a diminishing asset. Why should the Government give it away, then? I suggest that this is not a problem that we can easily decide at this moment. It will be some time, of course, before it is possible to fulfil the aspirations of the President, that royalties should be completely abolished, but, when we are approaching that time, I hope the State will recollect that there is no reason why it should give its coal away, and it may find better methods of dealing with this valuable commodity than letting the colliery owners have it for nothing. Do hon. Members opposite, for example, want Mussolini to get the raw material free of charge? Let me put this with extreme precision. This Government proposal is precisely as if, when the block of Suez Canal shares was nationalised, all the growing profits of that transaction had been allocated to rebates on canal dues paid by our own ships. Disraeli wisely considered that 948 the profits of Suez Canal shares should be more widely enjoyed.
A point to which I must refer is that I do not understand why leases are uncontrolled until 1st January, 1939. I do suggest that there are dangers of collusive devices, by which either the Commission or the more reputable and honest coal-owners might suffer. I will give a couple of simple instances. Coalowners have been instructed by these events to think and act globally. Suppose they approach coalowners and say let us revise all our leases to our mutual advantage, so that the coalowners are paid a cash sum equivalent to eight years purchase and colliery owners in turn pay royalties at a reduced scale, descending to about one-tenth of the present figure. The coal-owners could themselves profitably provide the money for that transaction, and the effect would be that they would get away with another £33,000,000 and the Coal Commission when it came into its inheritance would find a very much reduced figure. Expressed globally the process is given an undue simplification which would not be realised in actual life, but I suggest that in principle it is quite possible for the coalowners to get a large payment down, to cut up the £66,000,000 melon in 1942, and leave the Coal Commission with a very much reduced income. That will not in fact happen, because everybody knows that the Government would have to step in and stop it, but is it wise to leave a gap in legislation because it is known that if folk walk through it a subsequent very prickly hedge will be erected later on. That is a case in which the Commission would suffer.
Let me put a case in which one coal-owner may get an advantage at the expense of the other coalowner. Take the case of the colliery owners who also own their coal. Those people are faced for the first time with the agreeable prospect of paying royalties as soon as the Commission takes over. Would it not be obviously prudent on their part to sell their coal to a subsidiary and accept from that subsidiary a long and costly lease, with all details worked out to their own satisfaction with a royalty, let us say, at the rate of is. in a district where the ordinary rate was 6d.? The subsidiary goes to the valuation board and says: "What a splendid lease; give me a high valuation figure." In a few years time the colliery would go to the Commission and say: 949 "Look at this grotesquely high rate of royalty. Under Section 21, I ask for an early reduction to the district rate of 6d." I only give examples of that kind because these are elementary and obvious ways which can be carried out to the advantage of individual cases. If such obvious devices occur to the uninstructed mind, one may suppose that ingenious minds would find far more subtle methods at arriving at the same result.
I suggest that the Minister should consider very seriously whether some form of control of leases is not essential from now until the valuation date. It, of course, would be in the interests of all those coal-owners who, like the Ecclesiastical Commissioners, are collaborating with the Government in working this scheme fairly. Why should their interests be jeopardised by other people taking advantage of openings in an Act of which they would not desire to avail themselves? There is another point in which the help of the Government may be needed to protect the just coalowner. I understand that there is a risk of a quite new phenomenon in our fiscal history, namely, an enthusiasm for Death Duties, rather an unexpected result of this Bill. It may he worth while an executor paying Death Duties on an inflated value, if that value is to serve as a basis of compensation. Here, again, the Ecclesiastical Commission, which has not the advantage of dying, might suffer.
I will finally mention a matter referred to by the Noble Lord—the case of the mining engineers and the mineral agents. I think the House always feels that people displaced owing to an Act, whether salaried or wage earners, deserve sympathy and consideration.
§ Mr. Denman
Perhaps some practical effect will be given to that sympathetic consideration. I understand the position in this case is that the cost of management was estimated at the figure of £221,000 per annum, equal to a capitalised figure of about 33 millions, and this was deducted from the amount to be paid in compensation to the owners. It seems that in that figure there is a fund that has been allocated to management expenses. I have no doubt, in fact, that the Commission will be able to effect economies both in the staff and in man- 950 agement expenses and though they will, no doubt, be able to employ a good many of those old workers in this very specialised and difficult job, there might be some thrown out whom the House would not like to feel were entirely neglected. "That is all that I have to comment "upon in this Bill, and I commend it, congratulating both the Minister and the Ministry upon their large-scale and memorable Bill, and say that we in our group wish it a prosperous passage through Parliament.
§ 8.30 p.m.
§ Mr. Batey
I listened carefully to-day to the speech of the President of the Board of Trade, who dealt very clearly with the Bill, but the one thing for which I was really listening was for the President to tell us how this Bill would benefit the miners. I judge all Bills that are brought into this House for dealing with coal by the one standard—Will they affect the miner? I judge this Bill by that standard, and in my belief it does nothing for the miners. The miners will not be the least bit better off under this Bill, but they may be immensely worse off. It is difficult to understand the President of the Board of Trade being in charge of the Bill. He built up his case on the nationalisation of royalties by referring to the fact that the Sankey Commission recommended the nationalisation of royalties. The Sankey Commission did so, but it was as only one small part of the whole. The Sankey Commission recommended not only the nationalisation of royalties, but the nationalisation of mines, and from 1919 to 1924 we did not hear anything of the nationalisation of royalties or anything else. In 1924 the Report on Coal and Power was issued. The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) was Chairman of the Committee that issued that Report, which suggested for the first time that royalties should be nationalised alone, and that collieries should be amalgamated. When the Samuel Commission came along in 1926 we found Sir Herbert Samuel lifting out of Coal and Power and putting into his Commission report the proposal to nationalise royalties arid to amalgamate mines. I saw the Chancellor of the Exchequer here, and I am sorry that he has now gone because one now suspects that the National Liberal members of the 951 Government have lifted those proposals from the Report of the Samuel Commission and succeeded in getting the Government to put them into this Bill.
I would remind the Secretary for Mines, who, no doubt, will speak in this Debate later, that on this question there are more than three interests. The Government, in framing their proposals, have thought of only three interests, those of the royalty owners, the coalowners and the large consumers. They have forgotten altogether that the miners have a real interest in the coal industry. Robert Smillie used to say that the miners invested their lives in the industry, and that is as true to-day as when he used to say it, but somehow or other this Government never bring along any proposal to benefit the miners, though they are prepared to help the other sections in the industry as much as they possibly can. In this case they are not only helping the royalty owners, and the coal-owners by the re-organisation of the pits, but they are helping the big consumers like the electricity industries to go before the investigation committee and plead for cheap coal. They look after those interests, but there is nothing in the Bill to protect the interests of the miners. They forget that there is such a thing as a miner.
Under the Bill the Coal Commission are given tremendous powers. They are given power to nationalise royalties, to grant leases for the working of coal and to amalgamate collieries. To put the coal industry so completely in the hands of five men is a most dangerous experiment. Not only will the coal industry be in the hands of these men, but over 750,000 miners, with their wives and families, will be in the hands and subject to the whims of these men.
I want to deal with the question of amalgamation, which is the most dangerous part of the Bill. Amalgamations, like rationalisation, have been in the air before. It is one thing to amalgamate the railways and an entirely different thing to amalgamate collieries, large and small. It cannot be argued from the precedent of the railways that because they were amalgamated collieries can be amalgamated and be a success. In the nationalisation Bill which I had the honour and privilege of moving last February, we on these benches suggested that royalties 952 should be nationalised and that the coal industry should be one unit. In the Government's proposals for amalgamation there is no suggestion that the coal industry should be amalgamated as one unit or as one unit in a district. The Money Resolution shows how far the Government think they can go in regard to amalgamation. The Resolution says:For empowering the Commission to promote a reduction in the number of coal-mining undertakings.That seems to limit the Government's expectations, that amalgamations should take place for the purpose of promoting the reduction of coal-mining undertakings. If that is all that the Government are proposing, we had far better remain as we are than be told that amalgamations will do something for the coal industry, and then to find that it means that there will be two or three big amalgamations undertaken. We have had experience and it has not been a happy one. I come from a district where we contemplate the amalgamation of two or three colliery companies into one, and we look upon the amalgamation of those companies with fear. In the North West of Durham we have nothing but small collieries. We shall have large collieries amalgamating and leaving the small collieries in the cold. In South West Durham we have succeeded in getting three small collieries started by the help of the Nuffield Trust, and now steps are proposed that will close those pits, which means so very much for our districts.
The Secretary for Mines told us in April this year that in the County of Durham in 1920 there were 256 mines producing coal and employing 171,600 men and boys. In April this year that number had been reduced to 199 collieries, employing 112.800 men and boys, a reduction of 57 mines and of 58,800 men and boys employed. Therefore, we do not want to take steps that will close other mines. The Secretary for Mines in answer to one of my colleagues said that since 1930 51 pits have been closed in the County of Durham. With that experience before us we are not anxious to take any steps that will mean the closing down of more collieries. If amalgamation meant the amalgamation of the coal industry into one unit, we should welcome it, or if it meant the amalgamation of every colliery working in a district we might look more favourably upon it, 953 but to go on the lines laid down in the Bill in such a danger that it would be far better for us to do without these proposals. On that ground alone, I shall gladly go into the Lobby to vote against the Bill.
There is nothing in the Bill to provide that when amalgamations take place there shall be compensation for the men who are working at the small collieries which may be closed. If the Government propose to compensate those men if they were left high and dry because of amalgamation, we might change our minds, but as things stand at present we object to the Bill because it makes no provision for compensation for the displaced miners. There is compensation for the royalty owners. We say that before the coal-owners or the Ecclesiastical Commissioners are considered, if there is to be closing of pits, the first people in the industry who should be compensated are the miners.
Part I of the Bill continues the Act that was passed by the Labour Government in 1930, and carries it on until 1942. The Government have had seven years' experience of the working of the Act of 1930, but they come forward simply with a proposal to carry on that part of the 1930 Act, with one important alteration. The committee of investigation consists of nine members—the chairman, four representatives of the consumers, two representatives of the Miners' Federation and two representing the coalowners. In this Bill the Government are making it possible for big corporations and the utility concerns to go before the committee of investigation and make out a case for reduction in the price of coal.
One of the strangest things in the Bill is that in order that these big concerns may succeed, the Government are altering the powers of the committee of investigation in order to help them to get coal cheap. Up to the present questions in the committee of investigation have been decided by the majority. A majority decision is the decision of the committee. In the Bill the Government say that this will not do for the future, and they propose to give power to the chairman to make a decision if the committee are not unanimous. It is not a question of lour on one side and four on the other and the chairman having a casting vote. If 954 the committee are not unanimous the chairman is to have power to make a decision. It means that if you have seven members of the committee who agree on what shall be done and one who disagrees, the chairman is to have power to make a decision, and it may be a decision on the line of the one who disagrees with the other seven. I have never heard such a proposal. It is putting the chairman in the position of a dictator.
I submit to the Government that although they have made no serious amendments in this part of the Bill except the one I have mentioned, there are two Amendments which should have been made. One is that on the central board and district committees which fix the price of coal the miners ought to be represented. We felt this strongly in 1930. We felt that the Labour Government did not go as far as they should have gone in insisting that the miners should be represented. A mistake was made then, but that is no reason why the mistake should be continued. The late Secretary for Mines announced a list of evasions which ought in itself to have been sufficient for the Government to say that as they were making this alteration in the committee of investigation they would also make this other alteration on the central and district committees and give the miners representation. I hope the Government will take this into serious consideration, because we shall have to fight the matter when the Bill is in Committee. Since 1930 experience has taught us that a quota is given not to a colliery but to an undertaking, with the result that if the men in a particular pit have a dispute with the owners and it leads to stopping that particular pit, the owners can afford to let the colliery stand idle because they can supply their quota from the rest of their collieries. That is putting the men in such collieries in an unfair position. They are at an enormous disadvantage with the colliery owner, who can simply allow the colliery to stand idle and supply his trade from other collieries. I think we should have an amendment to the effect that where there is a dispute at a colliery the amount of coal that the colliery is producing shall not be supplied by the company or the undertaking from any of their other collieries. I think also that it is time we had another report as to the working of 955 the schemes for which the central and district committees are responsible.
Let me say a word or two about royalties. We have made our position perfectly clear. If the Government believe that this £66,500,000 shall be given to royalty owners they should not debit that against the industry but find the money themselves. I do not think royalty owners should receive a penny from the Government or from the industry. We might have had the coal industry nationalised after the Sankey Commission in 1919. Since that time there has been paid to the royalty owners nearly £90,000,000. If we had had nationalisation then we should have saved that amount of money. As they have had this £90,000,000 I do not think the royalty owners are entitled to this further sum. We might agree that they should have two years compensation. That would have been abundance to royalty owners who have been taking so much from our coal mines when the miners have scarcely had enough on which to live.
If these proposals were taken from the Samuel Commission or not, I think it would be worth while for the Government to look at the Samuel Commission Report, which proposed that whilst royalties should be nationalised one of the conditions should be that power should be given to the Coal Commission to insist on better housing for the miners when granting new business. They also suggested in 1926 holidays with pay for the miners, and that free coal should be given to the miners and to the widows of miners. I suggest that the Government should look at this Samuel Commission's Report and bring forward the proposals, because they would do something to sugar the pill and make it less bitter. If some of these proposals were in the Bill it would not taste so bad as it does to the miners. Then there is the question of wayleaves. I understood the President of the Board of Trade to say that the £10,000,000 is to buy the wayleaves underground. Is there anything in the Bill to deal with wayleaves under the ground and also wayleaves above ground? In previous Debates in the House, I have dealt with the question of wayleaves. For instance, a colliery company in the County of Durham was dissatisfied with the amount 956 it had to pay on account of a wayleave. The company satisfied the Railway and Canal Commissioners that it was being overcharged for the wayleave, and its request was granted, but the case was taken to the Court of Appeal, and on 15th March, 1935, the judges, by a majority, granted the appeal and the colliery company was no better off.
I would like to give the Attorney-General an idea of what that wayleave meant. The company in question was the Consett Iron Company. The railway was made by the colliery company and was maintained and worked by it. There was no other way of getting coal from its collieries except by means of the way-leave lands. The lands belonging to the lessors were about 27 acres, and were worth at a full letting value, plus allowances for disturbance, less than £5 per acre per annum. The colliery company endeavoured to buy the lands and offered a high price, but the lessors refused to sell. The colliery company paid, during the period from 1st January, 1890, to 31st December, 1931, to one lessor a total of £97,872, and to the other lessors, for the same period, £66,601, making a total of £164,473. That, divided between 27 acres, was a total of £6,062 per acre, without interest. As long as the colliery company continued working, those payments (at the present time about £6,000 per annum) would have to be made, unless the relief sought could be obtained. I submit that that in itself is sufficient to teach the House that the Government, when dealing with royalties, should deal with wayleaves, under ground and above ground. If the Government intend simply to push this Bill through for the purpose of shoving several millions of pounds into the pockets of the royalty owners, without making other necessary Amendments in it, I shall be extremely glad to go into the Division Lobby against the Bill.
§ 8.58 p.m.
§ Mr. Spens
I have listened to the Debate for several hours, as one who knows not much about the mining industry as an industry or about the lives of the miners, but who has had to deal frequently in his professional capacity with mining leases and conflicts relating to mining problems. This afternoon I have been listening as an ordinary Conservative back-bencher, who is being asked, in this Bill, to vote in favour of 957 what, in my view, is the greatest measure of compulsory expropriation of private property that Parliament has ever been asked to pass in our history, in order to hear whether or not there were any good grounds on which the party opposite could oppose the Bill. I should have thought that prima facie the official Opposition would have leaped at the opportunity of getting through Parliament a Bill of this description.
I must say that I have been comforted by a good deal of what I have heard this afternoon. One hon. Member, for whose opinion I always have the very greatest respect, said that he was proud that he had lived to see the day when a Measure such as this came from these benches. That indicated to me that the grounds on which I propose to vote for the Bill do, in fact, exist. Every hon. Member on both sides of the House knows that by this Bill we are going to do something to try to improve the lot of the mining industry and the future of the miners. Unless I was satisfied of that, nothing would induce me to vote for the Bill. What we are faced with, on these benches, is not only report after report during the last generation or so, but constant demands by hon. Gentlemen opposite, both in the House and outside, that, as a first measure for dealing with the troubles of the mining industry, mining royalties should be unified. Here we have a Measure which proposes to do that.
Of course, I can well understand the attitude of certain hon. Gentlemen opposite who say that the terms on which this is being done are too generous to the owners of the coal or that, in addition to unifying the royalties, a great deal more ought to be done at the same time. The hon. Member for Spennymoor (Mr. Batey) wanted an amalgamation scheme, which would turn every colliery company in the country into part and parcel of one unit. That I understand, 'but from my point of view, I have had to consider whether or not we would really assist the miners and the mining industry by passing the Bill. The Bill deals with a vast mass of private property which, for over 300 years, has been recognised as private property, and thousands of people—not only rich people who live in castles—exist to-day and fashion their lives on the basis of those royalties being private property. This Bill will expropriate 958 them at a figure which will almost halve the income which every one of them is deriving from that source. The House and the country ought to realise that this is one of the greatest Measures of expropriation that has ever been proposed in this country.
The suggestion is that the unworked coal of this country is in the hands, not of hundreds, but of thousands of individuals, that when it comes to be worked, the company or the individual who wants to work it constantly has to acquire the right to work it from a number of individuals, that very often the leases under which the coal is worked have conflicting and differing provisions, and that the result, which has been proved time after time, as every lawyer in the House knows fully, is that the existence of this dissipated private ownership of coal and the numerous different titles that have to be acquired to work it inevitably leads to a great deal of inconvenience and uneconomic working of the coal in the country. Anything that leads to uneconomic working of coal leads to a worsening of the conditions of the miners. In order to carry out the transfer, there will have to be a highly complicated and cumbrous legal process, a process which will be of very great expense to everybody involved in it. No only have the owners of the coal to register and put in their claims, but the units have then to be defined and valued, the compensation has to be broken up, and, finally, the persons to whom the compensation is payable have to be found. All through, an expensive legal process is necessary, having regard to the nature of the article which is being dealt with, and no short cut can possibly be devised.
In the end, what is to be the result? A sum of £66,000,000 odd is to be paid to the coalowners. The royalties or rents are to continue to be paid into the Commission's fund. At first sight it would appear that if all that is to happen is that the rents, instead of being paid to the royalty owners are to be paid into the Commission, and if the same rents are to continue, there is not going to be any very obvious advantage to the industry. The ultimate benefit to the miners, of course, lies in this fact. If one works out the financial provisions of the Bill one realises that, ultimately, the State will have made a very good bargain and that the Commission will have a surplus income to 959 apply to the benefit of the industry. We know that the Commission are taking very new and strong powers to interfere with existing leases in every conceivable way that may be necessary to enable them, once they are in the saddle, to work the coal in any particular locality in the most economic way. We know that the anticipated surplus is to be used for the reduction of rents.
As my right hon. Friend has said, we look forward to the gradual reduction of these rents until we finally get rid of them altogether, so that the question of royalties will pass out of the coal industry altogether and become a matter of history. That is the main object of the Bill. If the machinery of the Bill is effective for that purpose, and I believe it is, then one can see that a tremendous step, and one notable in our history, is being taken which in the end will result, not in direct but in indirect benefit to all the miners in this country. The miners will get what they have so long cried for, namely, the removal of the payment of royalties from the industry. I entirely dissociate myself from the remarks of the hon. Member who expressed the hope that the Commission would hesitate long, even when they were in a position to do so, about ceasing to charge rents. I hope that that result will come as soon as the finances of the scheme justify it.
I wish to deal, in passing, with the question of wayleaves. Under the powers which the Commission will take to consolidate leases and to bring the coal underground into a common ownership, one of the first things they will be able to do will be to get rid of underground wayleaves, that is the wayleaves which are now necessary where the coal of one owner has to be carried through the property of another. The moment common ownership is vested in the Commission they will be able to get rid of those underground wayleaves which are now such a burden on the industry. Surface rights are dealt with differently. What are called surface servitudes are not, in the normal case, as I understand the Bill, to pass with the coal. They are to pass but they are to be subject to that additional compensation for which, among other things, power has been taken to borrow £10,000,000. In addition to that, as I read the Bill, once the 960 coal is vested in the Commission and the Commission proceeds to work it, if they want some surface right in order to work the coal more economically, there exists in the Bill, by the continuation of the appropriate section of the Mines (Working Facilities) Act, the right to get that necessary purchase right on payment of compensation to the surface owner on whatever terms the court lays down when application is made to it.
That provision has been taken by certain representatives of colliery companies, to be a flaw in the Bill. The suggestion is that if the coal is separated from the surface rights, it will make it more difficult for the Commission to develop their purchase to the best advantage of the community. In reply to that proposition, I suggest that the moment you get unified ownership of the coal you will cease to require anything like the surface rights which are required to-day. Under present conditions, if you want to develop coal you are bound in almost every case to try to acquire rights for the coal to pass over your neighbour's land. But once you have unified ownership, that necessity will not arise so frequently. Where such rights have to be acquired, machinery is there for the purpose. It involves, if there is no agreement, an application to the Railways and Canals Commission under the Mines (Working Facilities) Act and it would normally involve the payment of some compensation to the surface owner. In my view, the machinery under the present Bill is immensely better than that which now exists. As I say, I do not think anything like the same surface rights will be required, but the Commission will be able to get the necessary rights where they are required to enable it to develop its coal in the most economic manner and make the most beneficial use of it.
As regards amalgamation, the moment we in this House begin to discuss the rationalisation of any industry by amalgamation, we at once take different views according to the side of the House on which we sit. I say, frankly, that I always approach these rationalisation schemes with great anxiety because the experience of almost every industry has been, that when you put a rationalisation scheme into operation, you have to determine the contracts of service of numbers of employes, both workmen and also those engaged in offices, and so forth. Of course, the object of it is to be in a position to 961 obtain a similar output, with a lower overhead cost, to what two independent firms have produced before. The industry is in such a state that, if you allow uncontrolled competition to go on, you know very well that it will only be a question of time before both of them are in liquidation, in bankruptcy.
That is the whole point. You cannot keep firms alive competing against each other in this country in circumstances where really an amalgamation is the proper cure for the trouble, and what one sees in this Bill is that it does set up a machinery by which the interests of all parties will be most carefully considered. The Commission, in the first place, has to make up its mind that in a particular district certain amalgamations are desirable in the national interest. The Commission having persuaded the Board of Trade of that, the Board of Trade has to make a draft Order, which has to come before us here in this House. If in a particular case, for instance, hon. Members opposite thought that the interests of the employés were going to be adversely affected by a large increase in unemployment as a result of it, they would have their opportunity of taking the necessary Parliamentary action in respect of that draft Order, but assuming that all of us are satisfied and that no such action is taken in this House, even then the matter is not finished. It still has to go before the Railway and Canal Commission to see that all its details are worked out in fairness to all parties.
That is a very long machinery, a machinery which, if we are going to use it for rationalising industries in this country, everyone must at least admit gives ample opportunity for every single interest to have its case stated somewhere and to make certain that a minimum of damage occurs. Comparatively with the machinery which was proposed a year ago for a similar transaction, I infinitely prefer the machinery of this Bill. I believe the Government have gone out of their way to secure, by this somewhat long and cumbrous method, if you really think it out, that every interest shall have its chance to be fully stated and protected at some stage or other.
As I say, I believe that the machinery for the initial transaction of vesting this coal in the new Commission is effective. One has scrutinised it carefully to see 962 whether, in dealing with such a tricky and troublesome subject as coal, there has been any obvious mistake made in the methods proposed. I am comforted to think that the Bill has been published for over a fortnight now, and from the most learned quarters of Lincoln's Inn no suggestion has reached me that the machinery in the Bill for vesting the coal in the new Commission is in any way ineffective or that anything has been left out. But, of course, one has only to read and study the Schedules, even though one has had years of training as a conveyancer, as I had in my younger days, to realise what a frightfully complicated task there is ahead of the Government in order to get the coal properly vested in the new Commission in due course.
I would add to that that the machinery for the amalgamations is, in my view, infinitely preferable to the machinery which we had to deal with in last year's Bill. I believe that every interest is now protected by it. I believe that, as a result of this unification of the royalties, we shall rid the mining industry altogether of the payment of rents and reduce enormously the wayleaves. With amalgamation we shall, I hope, get more efficient working where more efficient working is required, arid by "efficient," I do not mean sweating the men, or shorter hours, or lower wages, but genuinely more efficient working. It is for those reasons that, although I realise that this is the greatest Measure, as I say, of compulsory expropriation that has taken place in this country, nevertheless I feel able to vote in favour of it.
§ 9.21 p.m.
§ Mr. Daggar
Upon several occasions, appropriate occasions, perhaps, in the opinion of hon. Members opposite, we have been accused of taking our orders from Transport House, which means from the Trades Union Congress, but I hope that after the introduction of this Bill we shall hear no more of that nonsense, because, as hon. Members know, this Measure is evidence that the Government are not deaf to the instructions of the Federation of British Industries, an association that openly prides itself on being able to influence the legislation of this House. The late President of the Board of Trade, no more honest, I think, than the present one, stated in this House when 963 the original Bill was introduced that it would be amendedfor the purpose of meeting the criticism stated in the resolution passed by the Federation of British Industries."—[OFFICIAL REPORT, 18th May, 1936; col. 859, Vol. 312.]Those Amendments took the form of the complete and entire withdrawal of the original Bill. One naturally expects such an influence from an organisation which claims to represent about 20,000 firms, with a combined capital of well over £5,000,000,000, and which has such capable and energetic representatives in this House, an organisation which, in my opinion, has been aptly described as "the gang behind the Government." An interesting and certainly not an irrelevant question would be whether the President of the Board of Trade is prepared to request the Coalowners Association, in conjunction with the Federation of British Industries, to undertake the drafting of all future Bills dealing with the mining industry. An answer to that question may be necessary in view of the anticipated new Mines Bill, to be introduced consequent upon the recommendations of the Royal Commission which is now sitting to inquire into the problem of safety in mines.
The Bill before the House, in my opinion, constitutes another indictment of the existing system of the private ownership of the production of coal, a system which, in the words of members of the Royal Commission of 1919, "stands condemned." That is a statement made, not by miners' representatives, but by Mr. Justice Sankey, Mr. Arthur Balfour, Sir Arthur Duckham and Sir Thomas Roy-den, a statement made 17 years ago. Whatever the Government might do, they will ultimately be compelled to take the medicine prescribed by that Commission. In the interim report of that Commission, these words appear:Even upon the evidence already given, the present system of ownership and working in the coal industry stands condemned, and some other system must be substituted for it, either nationalisation or a method of unification by national purchase and/or by joint control.The Amendment makes it clear which method we on these Benches approve. Personally, I see no future for the mining industry of this country without some measure of planning, but effective planning implies control, and control demands 964 ownership and social ownership in substitution of the existing private ownership of the industry.
While I propose to say something about amalgamation I am pleased to observe that the Government are ignoring the criticism of the coalowners. It has been said of the coalowners with a considerable degree of accuracy and truth that they "remember nothing, they learn nothing, and do nothing." It was stated in this House on 1st March, 1933, by the then Secretary for Mines, who is now the Minister of Labour, that the coalowners of Great Britain have adopted seven different methods of evading the provisions of the 1930 Act. In 1926 the "Daily News," which was not a paper under the control of the party of which I am a Member, declared that:the spectacle of folly, selfishness and stupidity presented at the present time by the directors of the British coal industry is the derision of the whole world.That is as true to-day as it was then. Whenever legislation is proposed to deal with this industry, we immediately hear the coalowners shouting about "political interference" with the industry. I have a report of a speech made by no less a person than Mr. Finlay Gibson who, as most Members of this House know, is the Secretary to the Monmouthshire and South Wales Coal Owners' Association. One has to be careful in giving it publicity, because it was made when many strange speeches are made, namely, after a dinner. He stated in relation, not to amalgamation of producing units, but to the question of controlling prices of coal, that the South Wales owners were strongly opposed to any further interference from the Government. But that observation was made after he had admitted that if there had been no control of prices in the coal trade, prices would have fallen and the amount would have been a direct gift to the foreign buyer. These are his exact words:Assuming that there had been free competition and the quantity of coal shipped had remained the same, I estimate that the loss of revenue for South Wales from 1st January, 1931, to 30th September, 1933, on coal for export alone would have been between 2,000,000 and 2,700,000. That is the amount of money which would have been withdrawn from circulation in this district,"—namely, South Wales. These gentlemen last week told us that, while they were not opposed to the principle of unification of coal mining royalties, they did not 965 believe the proposal would be of material benefit to the industry. Well, that is a strange and remarkable observation to be made by the coalowners of South Wales, who have been paying in royalties for a considerable number of years 2d. and 3d. per ton more than the royalties paid in any other district in Great Britain. If the royalties in South Wales had been at the same level as in other districts it would have been of some importance, especially when we appreciate the fact that the coalowners in South Wales particularly were anxious, in supporting the Government, to reduce the welfare levy from a miserable ½d. per ton to And now the same crowd are asking for a subsidy to support the export trade. The Federation of British Industries in the resolution to which. I have already referred, says:that the principle of compulsion should be applied to industry only in most exceptional cases, and subject to the most careful safeguards.The coalowners, the Federation of British Industries and this Government never hesitated to enforce their decision by compulsion without any safeguards upon the miners engaged in the industry. The Bill provides for taking over the rights of working the coal in this country. I want to admit that I agree with that proposal, but I am bitterly opposed to the amount that is proposed to compensate these parasites, who have robbed the industry of an average of £5,000,000 a year. The amount, I presume, has been fixed with some regard to the estimated purchase price made by the Chief Valuer of the Board of Inland Revenue submitted to the Royal Commission on the Coal Industry in 1925, although I note that the Government have not taken that figure, which was £92,000,000, but in order to cover contingencies, a final figure was reached of £100,000,000. The origin of the payment of royalties, as has been pointed out by previous speakers, appears to be shrouded in a considerable amount of mystery. And the question has often been the cause of considerable inquiry and discussion. The Bill is obviously, so far as this Part of it is concerned, based upon the recommendations of the Royal Commission of 1925. But it is strange that the Commission should advise compensation to the owners of royalties when its members agreed that, "royalties are a product of natural forces," and that, "such 966 property was conceded long ago to the surface owners." The Commission has also declared:It would have been very fortunate for the country if, three and a half centuries ago, when the judges decided that the minerals, other than gold and silver, belonged to the surface owner, the Legislature had reversed that decision and reserved the coal to the State.I imagine it is too much to expect this Government to reverse that decision. It would be the last thing for this Government to do to interfere with the system of the private ownership of land; but, without any discussion as to the imposition of a means test, 3,789 persons are to receive £66,450,000. This amount it is proposed to pay to individuals who, during the last 20 years, have taken from the mining industry over £120,000,000. The proposal means that a few thousand persons who have been permitted to exploit, if not rob, the industry of £5,000,000 a year are to be bought out, and the mine workers, men and boys, who have each contributed £6 a year to pay this sum, are to be called upon to pay their share of the £66,450,000. And if the same Bill, in the proposals for amalgamation, throws miners out of employment, they will receive, if they can prove their need, assistance from the Unemployment Assistance Board.
I observe that one of these owners already receives an amount annually in royalties equal to the wages of a miner if he worked for a thousand years: he will at least have sufficient money from the purchase price to keep him off the dole. Seven already impoverished Dukes and Lords, together with the Ecclesiastical Commissioners, will have about one-fifth of the compensation money. How true it is that the Tories look after their friends. This, be it remembered, is contained in a Bill which provides for compulsory amalgamation and it must have the effect of putting mine workers out of work. For them no provision is made in the Bill for compensation or for any other employment. They will get just an allowance if they show need of assistance. Some of us have evidence of what Disraeli meant when he described the Tory party as "organised hypocrisy." I want to say one or two words about amalgamation.
We have had many reference to speeches made by Members on these benches in 1930, and I want to read part 967 of a speech delivered by the late William Graham when the 1930 Act was under discussion.
I beg hon. Members also to remember that every colliery that is closed leaves either a village or a derelict community or a social problem behind. The House must recognise that every effort should be made to provide work in other occupations, but we all know in our hearts, whatever may be our party politics, the supreme difficulty of overtaking a task of that character, in view of foreign competition in the markets of the world, and changing conditions following the War and great burdens upon industry and commerce. That is the point regarding amalgamations."—[OFFICIAL REPORT, 17th December, 1929; col. 1266, Vol. 233.]It is useless for hon. Members to argue that amalgamations without compensation to those persons thrown out of employment is any other than a crime. That the process involves under the private ownership of the mines a displacement of labour cannot be contradicted. I represent a division in a part of which, as the result of amalgamation, no fewer than seven pits were closed in 1921. In the adjoining area another three were closed, so that in an area of less than three miles 10 pits were closed as the result of amalgamation. On 26th February, 1935, the hon. Member for East Rhondda (Mr. Mainwaring) put a question to the Secretary for Mines as to the number of pits closed in South Wales by the merger known as Powell Duffryn Associated Collieries. He was told that while there were 27 companies in 1920 there was only one in 1934. There were 121 pits working in 1920, and, after the merger in 1934, only 68. That means that, as the result of that one merger or amalgamation, no fewer than 53 pits were closed. The number of men employed in them in 1920 was 98,800. In 1934 the number was 39,300, a reduction as the result of the amalgamation in that merger alone of 59,500 men.
In a Bill which deal with so many varied subjects I would have thought it would have been appropriate to make some provision for those whose property is damaged by subsidence due to the working of coal. Those who live in areas where such subsidence has occurred know the extend to which the local authorities have been penalised, but no provision is made to meet it in this Bill. In my division there are a number of miners who own their own houses, and it is hard 968 to believe that within three doors of my home there is a miner who, when he is paid wages for producing coal, is engaged in undermining his own property. No compensation is made when the need for repairs arise. The royalty owner is receiving everything under this Measure. The miners receive nothing. This Bill, from many points of view, is unsatisfactory, and I shall vote for the Amendment.
§ 9.40 p.m.
§ Mr. Ross Taylor
When a Bill referring to the coal industry comes before the House we hear a great deal about the interest of colliery owners and of the mine workers, but comparatively little of the interests of the coal consumers. To-day has been no exception to the general rule, although we have had a good deal of discussion about the interests of the royalty owners. I wish to draw attention to the position in which coal consumers find themselves to-day under the Act of 1930, which this Bill proposes, with certain amendments, to retain in operation until 1942. It is unnecessary to remind the House that everyone in this country, man, woman and child, is dependent upon coal to a greater or a less degree. It is used, either in its raw state or after its transformation into gas or electricity, for an infinite number of industrial and domestic purposes. In the making of practically everything which is manufactured it plays an indispensable part.
It is obvious, therefore, that the price of coal is a matter of vital concern to the whole population and has an important bearing on the cost of living, about which we hear a great deal at the present time. In recent months, as we were reminded by my right hon. Friend who introduced the Bill, the price of coal has risen. He did not say that it had risen steeply, but most consumers consider that it has risen steeply and they see no indication of any cessation of the upward trend. The position to-day naturally causes them very considerable anxiety, and even alarm. Particularly is that true of those organisations which have to buy coal in large quantities and of a special kind to meet their requirements, such as big industries, public utilities, municipalities, and so on. At the same time, the voice of the individual consumer has undoubtedly been heard; he too has complaints to make about the 969 price of coal. The concern of these people is readily understandable when it is remembered that the selling of coal today is in the hands of the coalowners who now enjoy a virtually uncontrolled monopoly.
Under the 1930 Act and the recently amended district schemes, which were made under orders passed two years ago, coalowners through their selling organisations are in a position to charge what prices they choose for coal, to supply whatever kind of coal they please, to decline to afford a supply if they see fit, and to discriminate if they desire between one category of consumer and another. My right hon. Friend suggested that the rise in price which took place immediately after these amended Orders came into force had nothing to do with them. He attributed the rise to the improved demand. I do not think he will find many consumers to share that view. No doubt the rise may have been partially due to the increased demand, but I think there can be little doubt that the amended schemes had considerably more to do with it. The avowed object of the Act of 1930 was of course to raise the price of coal. That has been said over and over again, but as long as there was inter-colliery and inter-district competition the rise in prices was kept more or less in check. Now, as the result of these amended schemes, the element of competition has been entirely eliminated, and the monopoly is, as I have said, complete.
I have said that it is virtually an uncontrolled monopoly, and so it is from the point of view of the consumer, for the safeguards with which the Act purports to provide him have proved to be almost entirely worthless. The safeguards lie in the committees of investigation of which we have heard a certain amount during the course of this Debate. My hon. and gallant Friend the Secretary for Mines has pointed out from time to time that very little recourse has been had to these committees of investigation, and I think he has been disposed to argue from that that there is contentment with the system, but the real reason why so few of the great number of people who are aggrieved by the rise in prices have had recourse to these committees is that they realise that they can do nothing for them. The fault does not lie with the committees but in their absence of powers. The committees have no executive power and very 970 limited judicial powers. If, for example, they were to make recommendations for the lowering of coal prices they could not do anything to give effect to those recommendations.
The Eighth Schedule to the Bill proposes to make certain alterations in the law relating to these committees. It proposes also, as my right hon. Friend told us, to set up a central tribunal of appeal, to which aggrieved consumers can go if they are not satisfied with the findings of the committees of investigation. My right hon. Friend appeared to be optimistic enough to think that the safeguards for consumers would be greatly strengthened by the changes which are proposed, and that their grievances would cease to exist. I can assure him that that optimism is by no means shared by those who are prejudiced at present by the level of coal prices and fear they may be still further prejudiced in future. The proposed changes in the committees' powers relate not really to their powers but to their personnel, to their constitution and their procedure. The hon. Member for Spennymoor (Mr. Batey) appeared to think the changes were all in favour of the consumers. I can assure him that the consumers do not think so at all. They have no new powers given to them to deal with price questions; and the same thing is true of the proposed tribunal of appeal. Without such powers there is no doubt that the safeguarding machinery must remain ineffectual.
Parliament has on a great many occasions given limited monopolies to those—companies or rnunicipalities—responsible for supplying essential services to the public. The most familiar cases are those of water, gas and electricity, but in all those cases pains have been taken to see to it that the public whom the undertakings supply are safeguarded. When we come to coal, which is a commodity almost as indispensable to the public as water, we find the safeguards are totally inadequate. May I remind my right hon. Friend the President of the Board of Trade that while he presides over the destinies of the coal industry he also presides over the destinies of the gas industry, and is, no doubt, very well aware of the care with which his Department watches over the interests of gas consumers. He knows, no doubt, of the sliding scale system and its variations which prevails in that industry, whereby 971 if the price of the commodity is put up the amount of dividend paid by the company must go down. Is it not possible to apply some system analogous to that to the coal industry? No sensible person wants to deny the colliery companies the right to make a reasonable profit, or to deny to the mineworker the right to a reasonable reward for his labour, but surely there should be some limitation to profits.
There is not the slightest doubt that in many quarters there is grave dissatisfaction with the situation as it is, and I sincerely hope that my right hon. Friend will consider, between now and the Committee stage of the Bill whether he cannot insert some provisions which will give adequate protection to coal consumers. I noticed that when he was speaking about amalgamations he said that he was desirous of remedying any cause of injury to the consumer which admitted of remedy, and if he can put into the Bill something which will give the assurance to the coal consumer that he will not be exploited he will be introducing a remedy which will be very much appreciated.
§ 9.53 p.m.
§ Mr. George Hall
The President of the Board of Trade cannot complain about the reception which this Bill has had from the hon. Members who sit behind him. Those of us who were present when his predecessor introduced the Bill which was afterwards withdrawn can see quite a contrast not only in the reception accorded to the Bill, but in the attendance of hon. and right hon. Members on the benches opposite. We have not heard from the other side a single word in opposition to this Bill. So docile have hon. Members been about it that the case before the House is the Amendment which was moved by my right hon. Friend the Member for Wakefield (Mr. Greenwood). The case which he and some of my hon. Friends have put up has really not been answered, very largely because there is no answer to it.
Even the hon. Member for Woodbridge (Mr. Ross Taylor) confines his remarks, and rightly so from his point of view, to the safeguarding of coal consumers against high prices. I would like to inform the hon. Member that the large consumers are quite capable of taking care of themselves. It can be said that the 972 Amendment to Part I of the 1930 Act proposed in the Bill very largely results from representations made by the large consumers. I do not suggest that there is not some justification for complaining about the price of coal to domestic consumers, but those who complain should compare the price of coal to domestic consumers with the pithead price of coal, and they would then complain about the intermediaries who are between the producers and the consumers. The hon. Member supports a Government which believes in raising prices.
§ Mr. Hall
It is a question of what would be regarded as reasonable. I would ask him and all who complain about the price paid for coal by the domestic consumer to compare that price with the pithead price.
The Bill, as the President of the Board of Trade has rightly said, is a long and complicated one, and one can deal only with the main principles of the Bill. Part I contains the only new principle. The other matters have been discussed ad nauseam in this House. Like my hon. Friend the Member for Llanelly (Mr. J. Griffiths) I shall not go into the history of royalties, except to say that this House has been used over a period of years to protect the royalty owner in a property which has come to him, as the hon. and learned Member for Ashford (Mr. Spens) admitted, through a fluke. For something like 400 years, royalties have been regarded, by a fluke, as private property. This House, the Legislature of this country, has not dared in any way to interfere with that fluke. It is interesting now to see Members sitting on the opposite benches who would have held up their hands in holy horror 10 years ago at the thought of nationalising coal royalties in this country. The strong and relentless force of economic facts have driven even the President of the Board of Trade to agree to the nationalisation of coal royalties. It is no use talking of unification; it is really nationalisation.
Very little has been said about this raw material, this national asset which has been of such great value to this nation. I wonder what would have been the position of this nation industrially had it not been for the discovery of the power 973 of coal. Coal has taken us through the first industrial revolution, and it can be said that, through its utilisation for gas, electricity and oil and with scientific treatment, coal will carry this nation through the next industrial revolution. While it might be said that coal is not produced in the same quantity as it used to be produced, the actual value of coal produced by modern methods, despite a reduction in output, is greater to-day than the value of the coal which we produced during the peak year of 1913. will not go into the uses to which coal is put. However glorious may be the hsitory of its use, coal is now opening out a new era for this nation.
I would ask hon. Members opposite to consider how royalty owners in this country have treated this valuable commodity. Their whole conception has been output, profits and income for themselves. I know of no more valuable product than the coal which has been wasted by the royalty owners and the coalowners in this country. At the Sankey Commission, Lord Gainford, who gave evidence on behalf of the Mining Association, stated that from 3,000,000,000 to 4,000,000,000 tons of coal had been left ungotten owing to unnecessary barriers. That is the national asset upon which the material wealth and the domestic comfort of the people of this country have depended for 150 years. Not only has the coal of this country been wasted as the result of unnecessary barriers, but those of us who have been employed underground realise how much of the seam is used. Where you have a seam seven feet thick it is very much easier to work at the top portion of the seam and to leave the lower portion below. Taking in the great wastage of small coal over a series of years, I should say that the figures given by Lord Gainford could easily be doubled. One is not far away from being accurate in stating that a wastage equivalent to no less than 30 years' output, at the present rate of output in this country, has been lost, largely as the result of the. neglect of those persons who waxed rich without taking into consideration the wastage of this very valuable commodity. Never was the name "black diamonds" truer of coal than it is to-day. One can see to-day, as right throughout the ages, that there can be no moral or economic justification for the private ownership of royalties.
974 The problem of royalties has always been a bone of contention in this country. I cannot forget when speaking of royalty owners that when women and children were working underground in shocking conditions for a miserable pittance, the owners of royalties, who were in their position by a whim of nature and had, in many cases, acquired the land by questionable means, were making huge fortunes, and did not give a thought to the conditions of the people who were responsible for their acquiring those fortunes. I read last week a speech given by a Member who represented the Rhondda in this House, and who was best known to those of us who represent the mining industry and the South Wales constituencies, as Mabon. In 1886 he said that in the Rhondda, then producing the finest coal in the world, the men whose representative he was received Is. a ton for cutting coal, and the royalty owner received an equivalent amount. Hon. Friends of mine on this side of the House, like myself, have cut thousands of tons of coal—I might almost say tens of thousands of tons of coal—and the first charge upon each ton of coal was royalty for the royalty owner.
I was very much surprised to hear the hon. Member for Central Leeds (Mr. Denman), when speaking as a representative of the Ecclesiastical Commissioners, deplore the fact that the income of the Ecclesiastical Commissioners is going to be reduced as a result of this Bill. If the income of the Church is going to depend very largely upon the sweating of miners and the work of women and children, as it has in the past, it would have been in the interests of the Church to have repudiated royalties many years ago, instead of complaining of a reduction in their royalties after they had received them over a series of years. My hon. Friend the Member for Abertillery (Mr. Daggar) referred to the income of many of the territorial magnates in this country, who for generations have received fabulous sums. The hon. Member for Ecclesall (Sir G. Ellis) referred i o the fact that the royalties had changed hands so much that you really could not get at the real villains of the piece. He did not use those words in quite that way, but that is what he meant. That may be so in the case of the smaller royalty owners, but in the main the large royalty owners still possess their royalties, and these are the people 975 who are going to benefit as a result of the purchase of these royalties.
My hon. Friend the Member for Abertillery rightly said that, after this receiving of what may be regarded as ill-gotten money, compensation is going to be paid. The Ecclesiastical Commission, with two other royalty owners in this country, who have received nearly £600,000 a year between them over a series of years, will receive in compensation something like £9,000,000 under this Bill. They, at least, ought not to complain. My hon. Friend also referred to the fact that since 1920 nearly £100,000,000 has been paid in royalties. The hon. Member referred in the course of his speech to the recommendation of the Samuel Commission that £100,000,000 should be paid for the royalties, but he forgot that before the Samuel Commission even the mineowners themselves suggested that royalties should be nationalised, and they thought that a fair basis of payment for the royalties would be 15 years' purchase. Indeed, it can almost be said that the tribunal which sat recently to inquire into the value of these royalties did nothing but examine the work of the Samuel Commission and say, "What the coalowners suggested is good enough, and we will agree to the figure of 15 years' purchase," so that there we find their decision in this matter.
§ Mr. Denman
The hon. Member really must not represent the Ecclesiastical Commissioners as complaining of this. I was only pointing out the exact effect it was going to have, and it is right that that effect should be known. So far from complaining, I was supporting the Bill.
§ Mr. Hall
If the hon. Member will read his remarks in the OFFICIAL. REPORT, he will see that he divided himself into two parts. In the first portion of his speech he spoke of the plight of the Ecclesiastical Commission, and then he came back and represented his own views. When one hears certain remarks with regard to compensation for royalties, one would assume that it is only from the payment of royalties for coal underground that the landlord has benefited. I have a print showing the valley in which I live as it was 120 years ago. There were then five houses in that district. The royalty owner owns the surface. In that district 976 there is now a community of something like 20,000 people. Those 20,000 people have to live in houses, and almost all the houses are built on the land of the royalty owner. When I happened to be a member of the local authority, we went to the royalty owner and landowner, and asked him to sell us some land on which to build a school which could be attended by the children of the miners who were producing the royalty for him. He said, "I will sell you the land, but I must have £1,000 an acre for it. "We afterwards asked him for some land on which to build a hospital for miners who were injured at the colliery. He said," I will give you a quarter of an acre of land, upon which the actual buildings of the hospital will be situated, and I will charge you £400 an acre for the remainder. "We also asked him for land for a cemetery, and he said," I will sell you land for a cemetery, but you must pay me £800 an acre for it. "In that case it can be said that the descendants of the person who bought that property have received more in royalties every month for the last 50 years than it cost him to buy the whole of that land. How can one have sympathy with what may be regarded as a legal right, but what is by many of us regarded as nothing but robbery?
It is anticipated that the income of the Commission from royalties will exceed substantially the expenses. Of course it depends upon various things, which have been brought out in the Debate. It is estimated that the expenditure can hardly exceed £3,250,000, out of an income of something like £4,350,000 or £4,500,000. There will be a balance of £1,200,000. Out of this sum, of course, the expenses of the Commission will have to be met, and provision is made in the Bill for a sum to be placed to reserve—a minimum fund, but there is no mention of the amount. The Board of Trade has the right to fix the minimum amount. It would be very interesting if we could be told during the Debate the annual amount which the President of the Board of Trade has in mind for this minimum reserve. Then the balance is to be used for three purposes.
I would like to deal with one point which was not made quite clear by the President of the Board of Trade, and which perhaps the Attorney-General will 977 explain. I quite understand the allocation from the global sum to the various districts, but there is this anomaly in the charging of royalties in this country, that in some districts the average price paid for royalties is nearly twice that which is paid in other districts. I come from South Wales, where the average royalty is about Md. per ton, but in some cases the royalties, including wayleaves, are as high as is. gd. a ton. Indeed, I think it is true to say that in no part of the country is the amount of royalty so high as is paid in South Wales. I would like to ask whether, in the allocation from this global sum, the price paid for royalties will be based upon the value of the royalty received by the royalty owner?
Let us assume, for the sake of argument, that I was a royalty owner in South Wales and received is. a ton for my royalties, and that my hon. and learned Friend was a royalty owner in Yorkshire and received 6d. a ton. Does that mean, taking into consideration the difference in tonnage, that I shall have in compensation out of this twice as much for my royalty as he will get for his? T am one of those who argue for equalisation of royalties at once, because it would benefit us in South Wales—and when I say "us," I mean that it would benefit the miners, for it is a very strange coincidence that where you have the highest royalties paid you have the lowest wages paid to the miners, and where you have the lowest royalties paid you have the highest wages paid to the miners. That is a point on which I should like to have a reply, seeing that, after the interest and the sum for capital repayment, plus the reserve fund, plus the buying up of royalties, there is going to be some consideration given to the unequal royalties which are being paid. It must mean that, when that is being done, South Wales must be considered.
I do not know that I ought to take up much more time in dealing with royalties, other than to say that I agree with the point made by a number of my hon. Friends on this side of the House. There is no question that that is the point of view of the Mineworkers' Federation in this country. The Secretary for Mines was good enough to send to the executive of the Mineworkers' Federation a very long questionnaire, asking how they would deal with this, that and something 978 else connected with this Bill. He did not ask what was the point of view of the miners concerning the payment of compensation for royalties, but they did send him their considered view. They said:These particular matters, while highly important in their way, do not include the question in which the Federation is chiefly interested; namely, whether, under State ownership and control of minerals, any charge for royalties would continue to be imposed on the industry. We have pressed on the Government our view that the State ownership of minerals should result in entirely freeing the industry from any such burden, as we feel' that the enormous tribute already extracted from the industry and the immense sacrifices which have been made in providing the country with cheap coal give the industry an unanswerable case for entirely freeing it from this burden in the future.The Government promised to take this point of view into consideration. I could not put it clearer than that. There is no reason why the industry should continue to be charged with this burden. Everybody admits that coal is a national asset and that it should belong to the nation. If that is so, the miner ought not to be called upon to pay that compensation which the Government have agreed to pay, out of the wages they themselves would receive.
There is just another point that I would like to put to the Attorney-General. Have the Government taken into consideration the continuing payment for dead rents? In a number of cases, dead rents are being continued on exhausted mines or districts. I remember a person interested in coal royalties stating that, so far as he was concerned, these royalty owners who continued to receive dead rents on exhausted districts were persons who were living on immoral takings. The Government should deal with that matter, and also with the question of minimum rents. I could cite a number of cases where minimum rents are a real burden in many of these collieries. There is no need, seeing that no opposition has been put up against this Bill by anyone representing the Mining Association, to refer to the fact that the Mining Association themselves agreed, as far back as 1919, that it was necessary that the State should own the royalties, and, as I have already mentioned, they have recommended the amount that should be paid.
979 I need not take up very much time in dealing with the question of amalgamations, as I share the view which has been put by a number of my hon. Friends on this side of the House. My hon. Friend the Member for Abertillery referred to the effect of the largest amalgamation in this country. I think that it can be said that the Powell Duffryn Company is the largest coal combine probably in Europe. I have seen some of the effect which was referred to by my hon. Friend. Not only was the number of workmen reduced from 98,000 to 39,000, but from 1934 to 1936 there was a further reduction of another 4,000 men. I am not going to argue that in many cases, from the point of view of more efficient working, there is the possibility of increased production as the result of the application of machinery and an intensified system of mining with fewer men employed. The returns indicate that fact, but I have discovered—and I am not saying that it applies more to this combine than to any other combine—that we are losing much as the result of these huge combines. The hon. Member for Ecclesall referred to the loss of village life and of contact. The constituency which I have the honour to represent, with but one exception is completely owned by this combine. There seems to be a falling off of interest in many things, and the combine in many ways is regarded as being a soulless machine.
We are experiencing no end of difficulty in getting men, and particularly young persons, to work underground under a system of that kind. The combine seems to be a kind of blight over the industry. It is said that the workmen are receiving wages as high as, and in some cases higher wages than those which they received when the collieries were under separate companies, but there is just something that is lacking. If the whole of the country experience similar conditions to those which are being experienced in my constituency at the present time, it will be impossible, in the course of the next eight or ten years, to get men to work underground. In the early part of this year I spoke to someone representing an education authority in my constituency, and I was informed that out of 56 boys who left school in the old days easily 90 per cent. of them 980 would go to work underground, whereas nowadays only one out of 56 boys would say that he was going to work underground.
It is very largely this fear which exists in the minds of the men, who are not used to this big combine idea, this soulless machine in control, this mechanised and intensified mining, which is driving many young men out of the industry so that they will never come back again. If that is the kind of amalgamations we are going to see, then the quicker such amalgamations cease the better it will be for the industry. Not only that, but we should remember that the combines are not giving to the workers the increased wages which they were promised. I know that in some districts it is held that there has been an increase very much higher than there has been in South Wales. The hon. Member for Llanelly rightly said that South Wales was not only the home of combines, but that the coal industry in South Wales had had more amalgamations and larger amalgamations than any other coalfield, but when you look at the average wage paid you find that the average wage in the South Wales coalfield is very much lower than the average wage in many districts where these big combines are not operating.
There are one or two other points that I want to make, but I will give the Attorney-General the time for which he asks. The Bill continues Part I of the Act of 1930. I will not go into that question fully, because as far as we are concerned we want Part I of that Act continued. We shall not vote against the continuation of Part I because, as the right hon. Gentleman said, it has brought some stability of price to the coal industry. There are safeguards to be given to the large consumers of coal. We should like something to be done whereby the domestic consumer could be protected. It is the small man, or the person living in the cottage or in one room, who have to buy their coal in small quantities who need protection. I understand that the price paid for domestic coal in small quantities at the present time in London is 2s. 9d. a cwt. There is absolutely no justification for that price. The pithead price of coal for the 30th June, taking the average price on commercial deposits, was 15s. 6d. a ton. That is the average 981 for the country, and here are these poor people paying 2s. gd. for a cwt. of coal, or 15s. a ton. There is no justification for that.
That is why we say that this Bill is tinkering with the question of the coal industry. If we are going to bring to this nation the advantages of an abundance of coal, the coal industry must be completely reorganised. It is no use nationalising royalties unless you nationalise the coal industry, and it is no use nationalising the industry unless you deal with distribution. Well might the Secretary for Mines say, when he had this Bill in mind, speaking at Goole on 12th November, that the Bill did not attempt to deal with the human side of the problem and did not attempt to deal with wages, health or accidents. Of course, it does not. There is nothing in this Bill for the miners. The history of the normal conditions of life for the persons employed in the mining industry in this country has been unworthy of a great people and unworthy of this nation.
The Attorney-General is to follow me. I would remind him of the words of another very eminent member of his profession, who in the House of Lords in December, 1935, said:If I were a miner I would never be a willing worker under such conditions as the miners have to work under. Necessity might compel me for a time to accept that inadequate wage and existing conditions, but day in and day out, year after year, and by all lawful means I would protest arid agitate against conditions in the coalfield which I believe to be unjust to the individual, injurious to my country and a standing reproach to my business friends. If the question is asked, What is wrong with the coal industry?' my answer is that the system is wrong. I have no doubt what the remedy is, nationalisation of the mines. It is near, nearer than you think. It is bound to come.This is a step towards it, the nationalisation of coal royalties. As the relentless force of economic facts have driven the Government to nationalise coal royalties, so will the relentless force of economic facts compel a future Government of this country before very long to nationalise the coalmining industry.
§ 10.31 p.m.
§ The Attorney-General
My right hon. Friend the President of the Board of Trade and my hon. Friend the Secretary for Mines have every reason to be satisfied with the course which the Debate on this Bill has taken to-day and the reception it has received in all quarters of the 982 House. The hon. Member for Aberdare (Mr. G. Hall) has said that hon. Members on the Government side of the House 10 years ago would have been surprised to see my right hon. Friend introducing a Bill of this character. I think hon. Members opposite 10 years ago would have been somewhat surprised if they could in their mind's eye have seen their successors opposing a Bill of this kind. Although everyone appreciates the fact that this Bill does not contain a number of things which hon. Members opposite would like to see it contain, at any rate it does give effect to a proposal which has been advocated by many quarters, perhaps with the greatest vehemence and argument by hon. Members opposite and those who agree with them.
The Debate started with a wonderful view of history put forward by the right hon. Member for Wakefield (Mr. Greenwood), who was very shortly afterwards joined in the historical hunt by the hon. Member for Llanelly (Mr. Griffiths). The right hon. Member for Wakefield frankly admitted that in going back his history stopped at the Bourbons; he was not quite clear what they had done and what they had not done. I do not propose to join in that hunt. One hon. Member who took part in the discussion said that he always doubted anyone who started by saying "all history teaches." I agree. All history teaches that these historical controversies, although interesting academically, do not in themselves contribute to the efficiency of an industry or provide bread and butter for anybody.
The right hon. Gentleman the Member for Wakefield and other speakers from the benches opposite have said, with vigour, that this Bill contains nothing for the miners. I suggest that they are taking a narrow view. If all the Commissions and Committees which have considered this matter have been right in coming to the conclusion that this Measure is good for the industry, for its organisation, for its future and its efficiency, surely it must be good for all who take part in that industry, and in particular for the miners, whose livelihood and welfare depends upon the future conditions and flourishing of that industry. I will prove that by a reference to Clause 2. If hon. Members will look at that Clause and consider that the effect of Part I of this Measure will be to transfer property in coal from a 983 number of private hands to the Commission, who shall deal with it in such manneras they think best for promoting the interests, efficiency, and better organisation of the coal-mining industries,then I suggest that it is wrong to say that there is nothing for the miners in this Measure. The hon. Member for Spennymoor (Mr. Batey) referred somewhat contemptuously to the five men in the Commission, under the First Schedule. I ask him, although I do not invite him to give an answer now, whether he prefers the 5,000 men who at present control this form of property?
§ The Attorney-General
What would be the precise number, between five and 5,000 men, who would exactly discharge the management of coal under the hon. Member's scheme is a matter which perhaps we must leave unanswered for the moment. Many points have been made which I shall not be able to deal with in the time at my disposal to-night, but my right hon. Friend the Chancellor of the Exchequer and my hon. and gallant Friend the Secretary for Mines will be speaking to-morrow, and I will deal only with some of the points that have been raised this afternoon. The hon. Member for Aberdare asked whether the district allocations would be based on the ruling royalty rate in the district. The answer is "Yes," because the global sum in this sense was based on the existing royalty yield. Therefore, prima facie each unit will come before the valuation board with the figures which show the actual royalties it has been obtaining under existing leases. The board will be under no obligation to apply a cast-iron system to any particular unit, but I think it is right to say that the global sum being based on the royalties being received under existing leases, those are the figures from which the valuation boards will start.
§ Sir S. Cripps
Is not the hon. and learned Gentleman making a mistake? Surely, the allocation of these sums to the region is a matter entirely for the Central Valuation Board, as to which the Minister told us this afternoon there was nothing in the Bill to give them any direction, and that it is entirely within their discretion.
§ The Attorney-General
But my right hon. Friend went on to say that there was every reason to suppose that, having been faced with the division of a global sum arrived at on certain principles, they would obviously base themselves on those principles in making regional allocations.
§ Mr. J. Griffiths
If that is the case, will the hon. and learned Gentleman consider such an instance as this? This is a concrete case where at the moment the rate is 8¾d., as compared with 5d. on the average, that is about 3d. extra. If this sum is to be divided in the way indicated, will the rent charged by the Commission be related to the compensation paid, so that the rent would be in the same proportion as the 8d. to 5d. in the case I mention?
§ The Attorney-General
I was about to point out that the Commission take over subject to existing leases which, as the hon. Gentleman knows, fall in from time to time and, even apart from leases falling in, if he will look at Clause 21 dealing with reduction of rents by the Commission he will see that Subsection 2 (c) says:rents payable by lessees generally working coal in any district or part of a district which are, having regard to all the circumstances, more onerous than the average of the rents payable by lessees generally working coal under similar conditions in other districts or in another part of that district.One of the most important advantages which we believe will flow from this scheme is that it will enable the Commission to deal with those leases in those parts of the country where the rate is above the average, or is at such a height that it ought to be reduced, having regard to the general conditions over the country as a whole.
The hon. Member for Aberdare also asked a question with regard to dead rents. Again, that is a matter which will fall to be dealt with much in the way I have already indicated. The existing leases will primarily be taken over on the basis of their present terms, but one of the advantages of getting the matter into the hands of one body is that there will be the power of consolidation. As the hon. Gentleman knows, where you have one colliery working under a number of leases each of which has a dead rent, that hampers enormously the efficient working of that colliery company and that is one 985 of the reasons why under Clause I/ there is the power of consolidating leases and so getting rid of the hampering effects of a number of individual dead rents. That is a matter which the Commission can put in hand before the vesting date and is quite apart from their general power, once they get in the saddle and surpluses begin to arise, of removing from the picture any onerous dead rents or any dead rents which are impeding the proper and efficient working of the coal.
The right hon. Gentleman the Member for. Wakefield and the hon. and learned Member for the Welsh Universities (Mr. E. Evans) both referred to the question of the vesting date and the period between the valuation date and the vesting date. The reason for that period is that the valuation of the individual units and the final coming to a conclusion as to what A, B, C and D are to get, is going to be an extremely long and complicated process. The general principle on which the Bill proceeds, and which, I think, will commend itself, if not to everybody in the House, to Members in all parts of the House who have considered it, is that we should proceed on the lines that property should not be taken until round about the date when the price of it can be paid. That is the ordinary principle applied to ordinary purchases. Of course there may be occasions when a small departure from it is necessary one way or the other, but when you are dealing with the purchase of something the exact price of which cannot be determined, until after, say, three or three and a-half years, it would be contrary to all general principles to take the property some two or three years before the money could be paid.
The same facts provide the answer to the question also raised as to the payment of costs, which is referred to in the Financial Memorandum. This is not a case where the Commission is in a position to say to a vendor, "I can tell you at once what you are to receive." It cannot, because it is agreed that the only practicable method of arriving at that figure is by starting with the global sum and then going through the lists of individual valuations in order to arrive at what the individual vendor ought to get. Therefore, this being a problem which requires that complicated process before a fair price can be arrived at, we deem it right 986 that the cost of that should be borne by the Commission.
The hon. and learned Member for the Welsh Universities was afraid that the difficulties might be increased in the interim period, and my hon. Friend the Member for Central Leeds (Mr. Denman), I think it was, referred to a period up to 1st January. So far as that period is concerned, what he was afraid of was that there might be a re-negotiation of a lease on the basis of paying a higher royalty, and that having been done with a view to the payment of compensation, a colliery company might later come along and say, "Look here, we are paying a very high royalty, so you must reduce the price." I should like to give a most serious warning to any colliery company which might think of entering into that somewhat bogus transaction, because think their chances of getting a reduction on a figure negotiated after the Bill was introduced would be very small indeed, and they would be much better off if they allowed the status quo to remain. So far as the actual point put by the hon. and learned Member for the Welsh Universities is concerned, that difficulties might be increased in the period between 1st January and the later period of the vesting date, I would refer him to Clauses 8, 9 and II of the Bill, in which he will see that, in addition to the application of the general principle that the owner will be under the obligation of a vendor, under a contract for sale: for instance, he cannot grant a lease without the approval of the Commission.
The right hon. Gentleman who opened the Debate for the Opposition and other hon. Members referred to the question of the £10,000,000, which, as my right hon. Friend explained, is an outside figure, but one or two specific questions were asked about it. In particular, I was asked with regard to Sub-section (r), the compensation in respect of subsidiary coal hereditaments. There is an extra figure for the very simple reason that those subsidiary coal hereditaments, which will be found defined in Clause 6 (2) and also referred to in Clause 3 (4, b), were not included in the global sum and would therefore have to be separately valued.
§ The Attorney-General
987 Questions were asked with regard to wayleaves and in particular by the hon. Gentleman the Member for Spennymoor. Underground wayleaves under Clause 14 vest in the Commission, and I think that Clause will cover all material underground wavleaves. So far as surface wayleaves are concerned, surface wayleaves only vest in the Commission if they are inextricably annexed to the coal itself, and the wayleave, for instance, in the Consett case, like many of the wayleaves which we have in mind, being right through its existence quite separate from the coal—I mean a right of a kind which could exist quite apart from the coal being there—do not vest in the Commission. But that case, I think it will be agreed, was an exceptional case, and all I can say about it is that, in so far as these matters arise in the future—and in some cases they can be terminated by the termination of the lease—the wayleave can now be obtained on terms to be settled in default of agreement by the Railway and Canal Commission, therefore we shall not in the future I think have the sort of cases which hon. Gentlemen who raised this point had in mind. Another hon. Gentleman dealt with this matter, and pointed out that unified ownership will get rid of a lot of the difficulties of underground way-leaves.
I will say a word about amalgamations. The hon. Member for Montgomery (Mr. C. Davies) raised in this connection a point which the Secretary for Mines will deal with to-morrow, but the speeches of some hon. Gentlemen and right hon. Gentlemen opposite left me in some doubt as to whether they were in favour of amalgamations or not in favour of amalgamations. The hon. Member for Ecclesall (Sir G. Ellis) and indeed other hon. Gentlemen, including some hon. Gentlemen opposite, said that amalgamations may be all right, but do not be too blind in your pursuit of them. One hon. Gentleman opposite who spoke earlier in the Debate seemed to think that we regarded the principle of amalgamation in the same way as they regard Socialism, as something to be applied in season and out of season regardless of the particular circumstances of the case. We do not regard amalgamations in that way. We believe that they have served, and can serve, a useful purpose in benefiting industry and 988 putting it on a sounder basis. Many hon. Members have stressed the drawbacks that might ensue to local authorities and to the mine workers from amalgamations. All those drawbacks have been fully applicable to the voluntary amalgamations that have taken place to a considerable extent. Therefore this compulsory power, both in the 1930 Act and in this Act, has to be considered on a rather narrower basis. Nobody is proposing to prohibit amalgamations. All that we are doing here is to do what was done in the 1930 Act, and saying that there may be cases in which amalgamation is being held up by a recalcitrant minority—amalgamation which, on the whole, ought to go through. These matters in their effect on local authorities and on miners are particular matters which, I should have thought, were appropriate to the new procedure, under which it is this House and not the Railway and Canal Commission which has to consider the national interests as a condition precedent before the scheme goes before the court. I am conscious that there are matters connected with amalgamation with which I have not dealt. I want to make it clear that we do not regard it as a universal solution. Some hon. Gentlemen have said things contrary to amalgamation. One cannot altogether dismiss from one's mind that they are themselves in favour of what I may call the greater amalgamation which would be affected under nationalisation which they advocate so keenly. How a soulless combine of that kind would be worked and how far it would have a soul are things we hope we shall never live to find out.
This is an interim point in the Debate. The Bill and its general principles will be further discussed to-morrow, but, speaking as I do half-way through the Debate I cannot but believe that the general impression on the House will have been to confirm what my right hon. Friend said in opening, namely, that this is a Measure which will benefit the industry as a whole. It is, particularly in regard to Part I, a proposal which has a long history of recommendations behind it. It is a proposal which affects most particularly the royalty owners who are being expropriated. As my hon. and learned Friend the Member for Ashford (Mr. Spens) said, it is the biggest Measure of expropriation which has ever been set before the House. 989 There were attacks on royalty owners from hon. Gentlemen opposite, and I listened with pleasure to the defence by my hon. Friend the Member for Ecclesall who speaks in the intermediate position of one engaged in running a colliery. We appreciate that this Bill affects a big change in the financial position of the royalty owners. The hon. Member for Central Leeds and the Noble Lord the Member for Newark (Marquess of Titchfield) both spoke in the Debate and we welcome the temper in which they addressed their remarks to the House. We welcome their co-operation in putting as we believe, a great Measure for the coal industry through with, as far as may be, the common co-operation and good will of all the parties concerned.
§ Ordered, "That the Debate be now adjourned."—[Sir C. Edwards.]
§ Debate to be resumed To-morrow.