§ On and after the vesting date the following provisions shall apply to all leases of coal or mines in force at that date notwithstanding any provisions in any such lease to the contrary:
- (1) No minimum or dead rent shall be payable, but the right of the lessee under any such lease to recoupment of any overpayment in respect of past short workings shall not be affected;
- (2) If the lessee gives notice in writing to the Commission of his desire to renew a lease not less than six months before the date of determination prescribed therein, the consent of the Commission to such renewal on reasonable terms and conditions shall not be unreasonably withheld, and any question whether such consent is being unreasonably withheld, or whether the proposed terms and conditions or any of them are reasonable and what other terms and conditions are reasonable, shall, if the lessee so require, be referred to arbitration, and the lessee shall be entitled to a renewal of his lease on such terms and conditions as may be found by the arbitrator to be reasonable.—[Mr. Peake.]
§ Brought up, and read the First time.
904§ The ChairmanThis proposed new Clause and the next one on the Paper, also in the name of the hon. Member for North Leeds (Mr. Peake)—(Certain provision of new leases)—seem to deal with the same point, the one in the case of existing leases, the other in the case of new leases. I suggest that they should be dealt with in one discussion, and that the second proposed new Clause should be called only for the purpose of being put to the Committee for their decision.
§ 5.8 p.m.
§ Mr. PeakeI beg to move, "That the Clause be read a Second time."
I fully appreciate the suggestion that these two new Clauses should be discussed together. As you have said, Sir Dennis, they raise precisely the same point, but the first deals with existing leases and the second with future leases to be granted by the Commission. I hope that hon. 905 Members in all quarters of the Committee will be able to understand the meaning of these new Clauses better than I was able to understand the meaning of the last new Clause which we discussed. The first new Clause, the Second Reading of which I now move, is divided into two parts. Sub-section (2) is intended to indicate that there should be a bias in future on the part of the Commission in granting renewals of existing leases, in favour of the party who has been the leaseholder previously. In many parts of the coalfields considerable sums have been sunk in developing mines where there are large quantities of coal still to be worked, but where the lease may only have a few years to run. The colliery owner hitherto has been fully safeguarded by the fact that he could go to the Railway and Canal Commission under the Mines (Working Facilities and Support) Act for an order for the extension of the lease. But that Act as far as it affects coal, is swept away by Clause 18 of the Bill and the security which the colliery owner has hitherto enjoyed, in being able to get a renewal of his lease, may be prejudiced. This Sub-section goes no further than to suggest that there should be a certain bias on the part of the Commission in favour of granting renewals to existing leaseholders rather than new leases to persons who have not been interested in the coalfield previously.
I do not, however, attach tremendous importance to that part of the new Clause because in many cases it is still possible to extend the duration of leases before the valuation date. The important part of the Clause is Sub-section (1). Hon. Members who understand mining matters are well aware of the evils of the minimum rent system. For many years past I have urged the unification of coalmining royalties, not on any theoretical ground of public advantage, but on the purely practical ground that the working and development of collieries would be made much simpler and could be greatly improved if the colliery proprietor were free to work the parts of the coalfield which could most economically be worked, irrespective of the ownership of the surface and the dead rent payable to each individual surface owner. There is nothing in the Bill to indicate that this very important question of minimum rents will be dealt with by the Commission. In fact, from Clause 21, which lays down what 906 rents may be reduced and at what time they may be reduced, it appears that this question of minimum rents is going to be put on one side and lost sight of altogether. I find nothing in the Bill to indicate that it is the intention of the Commission to deal with this question from the point of view of the working of the coal mines.
It is a matter of great practical importance. It affects the amount of travelling which men have to do underground. It affects the lay-out of the pits, the ventilation, and, to some extent, the question of safety. If colliery proprietors knew to-day that in future they could develop their coalfields upon the best practical lines, irrespective of this question of minimum rents which has hampered the industry in the past, the public advantage would be greatly served. I have put down this new Clause in the form of a proposal for the abolition of minimum rents, but it would serve my purpose equally will if minimum rents were merged at each individual undertaking into a single minimum rent for that undertaking. It seems to make very little difference whether you abolish minimum rents, or whether they are so merged at each undertaking as to give freedom to the colliery concerned to work the coal to the best advantage.
§ Mr. A. JenkinsWhat does the hon. Member mean by merging? Does he mean merging them in the royalties?
§ Mr. PeakeNo. A colliery at present has, on the average, five or six different mineral lessors. To each of those a separate minimum rent has to be paid whether any part of his coal is worked or not. What I am suggesting is that you should merge these several minimum rents into a single minimum rent payable over the whole area of that particular colliery. That would give freedom to work the coal in whatever part of the area it could be most economically developed. This question has assumed additional importance since machine mining came in. In the old days, faces were extended over very wide areas, and it was no inconvenience to get quantities of coal under different surface areas; but with mechanised mining, and the resulting concentration of work underground, this question of minimum rents has become rather an acute one. In fact, it represents the sole 907 immediate practical advantage of any magnitude to be gained from Part I of the Bill.
I am fully aware that it is impossible for a private Member to draft any Amendment that will get through the very fine sieve of Departmental and technical criticism, and all that I am asking of the Minister on this Clause is that he shall give some declaration of policy as regards what the Commission is going to do about this matter. We have to plan the development of our mines many years ahead. We are considering to-day what seams are going to be worked in 15 or 20 years' time, and the development of a pit, once settled, is, as hon. Members opposite know, settled very often for all time. Important decisions are being taken every day at collieries as to the future planning of the coal mines. If we could have a declaration that it is the intention of the Commission to merge these minimum rates and treat them in such a way that we shall not be penalised, and if we could henceforth develop our mines on the assumption that these minimum rents will be merged, that would be a great practical immediate help to the coal industry, and I very much hope that the Minister will be able to give us some statement on the lines I have indicated.
§ 5.18 p.m.
§ Captain CrookshankIt is very difficult to say in advance what may or may not be the policy of the Commission when it comes into being; and I cannot possibly give any firm answer to a question of that kind. I understand that we are discussing my hon. Friend's two proposed new-Clauses together, and that he wishes for some indication that in future there will be a bias towards granting renewals to previous leaseholders instead of to other people. The Clauses deal with three quite different points; while my hon. Friend has attached most importance to the question of minimum rents, they raise other issues. On the question whether in the future there should be a bias in favour of the existing lessee in renewing a lease, I should imagine that the Commission would act, as I said before, as the best possible landlord, and would doubtless have regard to what might be the customary practice in these matters. But, while my hon. Friend suggests that there should be a bias in that direction because 908 the mining facilities legislation will be swept away by the Bill, it is important to remember how the mining facilities legislation acted. As I understand it, what the Railway and Canal Commission had to consider, if there was a dispute on this question, was whether it was in the national interest that such-and-such a lease should be renewed. The criterion was the national interest.
The reason why that has disappeared is that, while the mining facilities legislation was introduced as a step which was thought desirable at that time, when Parliament and the country did not wish to advance as far as we are advancing now, there is now to be a statutory Commission, which is to have regard to the general interests and efficiency of the industry, and also to any general directions which the Minister may give in the national interest. Therefore, it is obviously anomalous to have recourse to the Railway and Canal Commission on a matter of public interest which clearly comes within the functions of the stautory Commission. My hon. Friend points out the great advantage that would follow in his view, firstly, if minimum rents were abolished altogether, or, secondly, if they were all merged. But, on the other hand, he suggests that the right of recoupment should be continued—a very valuable right, it seems to me—without any obligation on the part of the lessee to carry out the terms of the contract into which he has entered. In fact, I think that the benefit of this retention of the recoupment without any obligation as regards minimum rent would mean an immediate remission of something like £400,000 out of the estimated revenue which the Commission would have reason to anticipate as the result of the abolition of royalties.
§ Mr. PeakeMy hon. and gallant Friend will, of course, remember that, in valuing the royalties at £66,000,000, the fact that there was this liability to repay to the lessees these overpayments of minimum rent was taken into account.
§ Captain CrookshankNevertheless, it would still be a very great financial advantage to the lessees generally if this provision were made, and that raises the question whether, if there were any remissions of one kind or another, this is a form of remission which would be most valuable, not to the lessees alone, but to the industry generally. I think we must 909 bear in mind the effect of Clause 21, which we have already passed, and which indicates the kind of considerations which should be borne in mind in any planned relief by the Commission. In general terms, if one colliery is paying more than another, or one district is paying more than another, ways are laid down in Clause 21 by which it may be desirable to reduce its payments. The Commission would consider, in the case of colliery A, B or C, what its all-in obligation amounts to—whether it is rent, or minimum rent, or royalty payments, or wayleaves—and how the obligation of A compares as a whole with the obligation of B, rather than, as in this case, singling out the minimum rent proposal as the one that should have priority. In the same way, when a proposal was made that royalties should be the first consideration, that proposal was rejected by the Committee. I think the Commission would bear in mind the general burden, say per ton, which any particular lessee found himself having to pay.
If we were now to abolish all minimum rents as such straight away, it seems to me that it would be contrary to the implication of Sub-section (2) of Clause 21, and it would also be contrary to the first part of that Clause, which expressly says that any planned reduction should be made when there is a revenue surplus foreseeable, that is to say, when it becomes clear in figures that there is a surplus to distribute and that the Commission can afford it. That seems to me to be the answer, as far as I can give it, to the general question that my hon. Friend asked. I know it does not carry one very far, because I am not the Commission, and we cannot know by what motive they will be actuated. But if they act as a good landlord, trying in the interests of the industry to reduce burdens where they are excessive, I think they will probably take all these factors into account.
As to whether they should consider merging all the minimum rents of one undertaking at any given moment, I should have thought that that question would arise rather in regard to the powers of the Commission to consolidate leases, and that they would be able to do the merging there. But, at the end of that, presumably, there would still have to be some form of minimum rent. I do not believe it would be possible ever to get 910 away from that, because otherwise there would be no kind of obligation on the lessee at all. Such an obligation was envisaged in the fairly recent legislation with regard to petroleum, where a minimum obligation was laid down. I think we must always have at the back of the lease some form—I do not say exactly what—of obligation, and that obligation has been brought down by the practice of many years to what is called minimum rent. My hon. Friend did not deal with the other parts of his proposed new Clause; I do not know whether he wants me to do so in advance.
§ Mr. PeakeI must ask my hon. and gallant Friend to forgive me. I forgot to say a few words on the question of the arbitration Clause in the new leases. That is a matter to which the industry attaches very considerable importance. All leases hitherto have contained an arbitration clause, and that has worked to the advantage of both parties. In the vast majority of disputes between a colliery lessee and the mineral landlord, the question has been settled without going to law or involving the processes of the courts. We should like to see in any new leases granted by the Commission provisions included with this object.
§ 5.30 p.m.
§ Captain CrookshankThere are two questions here which might be referred to arbitration. The first is where a lease is being withheld. There is another later on, about refusal to grant a lease. The first question is whether there should be arbitration because renewal has been withheld, and the second is a very much smaller matter, relating to disputes with regard to the provisions of a lease. As the hon. Gentleman said, it is the general practice to have some sort of clause of that kind in a lease. We must assume that, as the Commission would wish to act as a good landlord—indeed as the best possible landlord—it would not be likely to throw aside a practice which all good landlords have made customary. I do not think anyone could lay down in an Act of Parliament what a lease should or should not contain. As to whether there should be arbitration because a lease has been withheld, that is quite another matter. If it is reasonable for a lease to be continued, no doubt the Commission will continue it, but if you are going to expect the Commission to act as 911 a good landlord they must be the ultimate arbitrators as to whether they shall grant a lease, because, if not, the Commission's functions in that direction must be almost nugatory. Whether that is the answer the hon. Member expected or not, I do not know; but that is the answer that must be given. If there are any further points which arise I will try to deal with them as they come up.
§ Mr. PeatAm I right in understanding that when the Commission take over the leases, they do not take over any liability for dead rents, or for allowing those dead rents to be worked off, although they have received £400,000 on account of those dead rents?
§ Captain CrookshankI do not think that, unless something was specifically put into the Bill about it, it could affect the terms of a lease at all. The terms of the lease go on.
§ 5.35 p.m.
§ Sir S. CrippsI congratulate the Government on a slight access of backbone. In the past, even an advertisement issued by the Mining Association has been enough to cause them to collapse. Perhaps the explanation is that this is a more rapacious demand than even the Mining Association should dare to put forward. The hon. Member for North Leeds (Mr. Peake) has Oliver Twist beaten to a frazzle. The more the mineowners get, the more they demand. I am only surprised that they do not say that no rent should be payable in respect of mining leases. Will the hon. Member remember that the Commission are paying on the basis of certain dead rents? How would he appreciate it if he were asked to purchase 12 houses on each of which a minimum rent of £50 a year had been placed, and then he had the condition thrown upon him that he must not charge the minimum rate in future, thereby destroying the value of the properties? That is what hon. Members are trying to do in this case. The truth is that dead rents have been a problem in the past, and they are a problem, no doubt, that the Commission will have to consider; but to deprive the Commission of that for which Parliament is compelling them to pay would be fantastic. The hon. Member for North Leeds mentioned a number of things, but one thing he forgot to mention was the property of 912 the mineowners, who would obviously benefit very largely if the burden of dead rents were removed from their shoulders. They would get the benefit, first, of the payment for dead rents, and, then, of the abolition of dead rents as well.
§ Mr. PeatI do not follow the right hon. Gentleman's reply to my very simple suggestion, which, as far as I could see, was that the Commission would take over the liability either to refund dead rents or allow them to be worked off against the new leases. The Commission have received a benefit, representing the liability to dead rents, and they are under an obligation to pass on the benefit so received.
§ Sir S. CrippsIt would be the least un-businesslike thing that the hon. Member and his friends have done under the Bill. If there is an existing lease, under which the coalowner is entitled to claim back the dead rent or minimum rent he has paid in the past against his future working, that arrangement will continue.
§ Sir S. CrippsIf it is not carried on, it will come to an end, just as it does to-day. The ordinary mineral owners will bring it to an end whenever it terminates. The same will happen with the Commission. On the question of arbitration, it is surely quite obvious that if one is setting up an authority, such as the Commission, to reorganise the coal industry, it will be no good substituting an arbitrator for that Commission, because if you do you ore making the arbitrator the person who is going to plan the industry, and not the Commission. I intervened to protect the Minister against further onslaughts by telling him that we will support him.
§ 5.42 p.m.
§ Colonel WedgwoodIf there were no dead rents there would be no check on obstructive tactics on the part of the Mining Association. If a mineowner, dealing with the Government in respect of new-leases, had no dead rent to pay on other leases, he would be able to go on strike. The object of dead rents is to ensure maximum production. It is the safeguard of the public. The dead rents are the exact parallel to the taxation or rating of land value. They are rents which are to be paid, year in and year out, whether the 913 land or the minerals are used or not. In so far as they fall on the mineowner to-day, they ensure the maximum production of coal. We want to ensure maximum production.
§ 5.43 p.m.
§ Mr. PeakeAlthough I understand from the speech to which we have just listened that the right hon. Gentleman wants to continue under public ownership all the disadvantages of the coal industry at present, I rather understand, from what my hon. Friend said, that the Government might consider the merging of mineral rents at some future date. On that understanding, I beg to ask leave to withdraw the Clause.
§ Motion and Clause, by leave, withdrawn.
§ The ChairmanDoes the same thing apply to the other Clause—(Certain provision of new leases)—that the hon. Member does not wish to move it?
§ The ChairmanIn calling the next Clause, I must do so with a caution to hon. Members, because I have had some difficulty in reconciling myself to regarding it as being in order. As the Debate proceeds, I may possibly decide to withdraw it from the Committee as not in order.
§ Sir S. CrippsOn that point, could you assist us, Sir Dennis, by indicating the ground for your doubt?
§ The ChairmanI rather think that perhaps hon. Members had better wait until I raise an objection to it.
§ Sir S. CrippsI am thinking that we do not want to waste the time of the Committee, and we might agree with you that it was not in order.
§ The ChairmanI should hesitate to suggest that any reason which might occur to me would not occur to the hon. and learned Member.