HC Deb 30 March 1938 vol 333 cc2100-8
Captain Crookshank

I beg to move, in page 14, line 3, after "longer," to insert "as regards the coal comprised therein."

I would like to deal with this Amendment and the following Amendment at the same time. The Clause with which we are now dealing concerns the right of the freeholder in possession to be granted a lease—what is called the working proprietor's right to get the lease for the coal which is his. As the Clause now stands, the lease would be granted to him for such a term, commencing on the vesting date, as he might require, because he has the right to ask for it, subject to an overriding maximum: not being longer than may be reasonably requisite for enabling the coal comprised therein to be worked out. It is quite possible that the property in question might—I do not say it would—comprise two things: first, freehold coal, for which he would have the right to secure a lease to work, and secondly, a freehold mine of coal. Hon. Members will remember that under the definition, a mine of coal is not the coal itself, but is the space which is occupied by coal or which has been excavated underground for a coalmining purpose, and includes a shaft and an adit made for a coal-mining purpose. The individual I have in mind might be working from the same shaft some coal which he owns and also some which he has leased. Under the Clause as it is, he gets the lease long enough to work the freehold coal, if he wants it, and we are making it possible, when that is exhausted, for him still to have the right to use the shaft for any leasehold coal which he is working from the same shaft. The point has been brought to our notice as a practical one, it occurs in certain instances, and we think it is right that it should be covered.

Amendment agreed to.

Further Amendment made: In page 14, line 4, leave out "the coal comprised therein" and insert "that coal."—[Captain Crookshank.]

8.35 p.m.

Mr. Stanley

I beg to move, in page 14, line 5, to leave out "such."

This Amendment and the following Amendment on the Paper, deal with a point which was raised during the discussions in Committee. An Amendment was then moved by my hon. Friend the Member for North Leeds (Mr. Peake) to deal with the position of the working proprietor. The effect of his Amendment was not to remove the working proprietor from the whole scheme, that is to say, not to prevent the coal which the working proprietor owns from vesting in the Commission, but to remove the working proprietor from the scheme of compensation. The idea was that he should get no compensation but that he should be entitled to a lease at a peppercorn rent. I explained at that time the reasons why the Government felt it impossible to accept an Amendment of that kind, or to draw that distinction between the ordinary royalty owner and the working proprietor. I pointed out the effect which such an Amendment would have on the valuation and on the finance of the scheme as a whole. But I think there was general agreement that, in some respects, the working proprietor stands in a position different from that of the ordinary royalty owner.

The working proprietor in many cases has bought his coal as a sort of raw' material for his factory. He has been encouraged to do so in many public speeches, on the ground that the ownership and the working of coal should go together, and it has been generally regarded as an economic and thoughtful action on the part of these undertakings. I certainly do not want the application of Part I of the Measure—which is intended, wherever possible, to help the operation of colliery undertakings, both as regards profits and employment to start with the infliction of a definite hardship or setback on particular undertakings. When I told the House in Committee that I was unable to accept any Amendment of that kind, I also said I would consider whether it was possible to give the Coal Commission discretion to take into account hard cases where substantial financial loss might be caused, and to meet those cases, not in the way suggested by my hon. Friend's Amendment but in the way of granting more favourable terms.

The effect therefore of this Amendment is that instead of the Commission being bound to give the working proprietor a new lease on the customary terms, or if there are no customary terms on terms that might be considered reasonable, they can take into account all the circumstances, such as the compensation which has been paid and the customary rent which would otherwise be paid and they are given discretion to grant a lease on terms lower than the customary terms. I wish to make it plain that this is purely a matter of discretion. No right whatever is given to the working proprietor to claim, in any circumstances, a lower rent. But the Amendment gives the Commission, in cases of hardship which, in their opinion, some steps should be taken to mitigate, power to grant a lease on terms lower than those which are customarily given.

8.40 p.m.

Sir S. Cripps

I think we must give this proposal the prize for involved draftsmanship so far in this Bill. If what the right hon. Gentleman desires is to alter the Clause in the way he has indicated why not insert the words subject to such conditions as may in the circumstances seem reasonable to the Commission. Let me read the words which it is proposed by the next Amendment to insert: not more onerous than the conditions customary in the district or, where there are no customary conditions or the customary conditions are not applicable, than the conditions to which a person not entitled to the benefit of this section might reasonably have been expected to agree, and the Commission may grant a lease to the person entitled on conditions less onerous than the conditions aforesaid where it appears to them that the situation of that person in respect of the business of coal-mining carried on by him would otherwise be unduly unfavourable as compared with his situation in that respect as owner of the fee simple in the premises. It is perfectly impossible to operate or even to translate that. First of all, instead of deciding—as under the old Clause—what conditions are reasonable the Commission have to decide on the conditions, to which: a person not entitled to the benefit of this section might reasonably have been expected to agree. I have never known words of that kind in an Act of Parliament. I know what a reasonable man might be expected to do but what a person "might reasonably be expected to agree to," I have not any idea at all. I do not think that any court would ever decide such a point, and this is a matter which, presumably, would have to be decided by the courts in every case. [HON. MEMBERS: "No."] Supposing somebody challenges the Commission as to whether they are acting in accordance with their duty or not.

Mr. Peake

It goes to arbitration.

Sir S. Cripps

It does not make any difference whether it is a court or an arbitrator. It has to be decided judicially. Then the proposed wording goes on— The Commission may grant a lease to the person entitled on conditions less onerous"— Less onerous to whom? To the Commission or to the person?— than the conditions aforesaid where it appears to them that the situation of that person in respect of the business of coal-mining carried on by him would otherwise be unduly unfavourable"— What does "otherwise" mean, unless they give him the benefit of better conditions?— as compared with his situation in that respect as owner of the fee simple in the premises. What premises? The coal mine? But I thought the right hon. Gentleman spoke about some premises which were attached to the coal mine. Otherwise I do not understand the point. Why not make it "his fee simple." I thought the right hon. Gentleman was referring to a case in which a man had a factory or works close to a coal mine and where there were particular advantages—or disadvantages—in having the coal mine there in his own possession and where he was encouraged to have it. Surely, we ought to legislate on these matters with a view to clarifying the position, instead of obfuscating it. It would be far better to say here subject to such conditions as may, in the circumstances, be reasonable in the opinion of the Commission. That covers everything and is easy to understand and would be much better than the proposed form of words.

8.45 p.m.

Mr. J. Griffiths

It is very difficult to follow this wording, but I gather that the Clause proposes to deal with the colliery owner who is also the owner of a forge or other works, I understand the right hon. Gentleman proposes to insert words which would have the effect of giving the Commission power to grant leases over coal which was hitherto not leasehold but which is now to be taken over by the Commission. I do not think there ought to be a great deal of difficulty about it. We already have in the industry a method of assessing the royalty value of coal owned by a colliery owner. Royalty is part of the cost of production in the ascertainment, which eventually determines wages, and there is provision already made by which the royalty owner charges up the royalty which he does not pay in his own accounts. That is easily ascertainable. Ever since 1921 every owner who owns his own coal and has been working it has been charging up, every quarter or whatever the term may be, an assumed royalty payment, and therefore there is a fixed sum of so much per ton—4d., 6d., or 8d., as the case may be—which he himself has charged and which has been agreed by the owners' auditors and the workmen's auditors. Generally the provision is that owners of such property have charged in their accounts the average royalty for the district. If since 1921 they have thought they were entitled to charge in their accounts the average royalty for the district, surely there would be no hardship in accepting their own assessment. I agree that they ought to be protected, that they ought to have new leases, and that they ought not to be placed in a more unfavourable position than any other owner, but neither should they be placed in a more favourable position, and I think there is good ground for stating that their own assessment ought now to be accepted and that they ought to be granted a lease upon the terms which they have themselves fixed and had accepted by the auditors ever since 1921.

There is another point. In assessing the global sum, I presume the value of these freehold royalties is taken on the basis which the owners have themselves fixed. Suppose a royalty owner works his own coal and will now take part of this global sum, the share of the sum which he will get will be related to the amount of royalty which is already fixed and has been since 1921, and it seems to me, therefore, that there is no need for this Amendment. Granting that these working proprietors, as they are called, ought to be given a lease to enable them to continue in production as they are now, I do not see any difficulty whatsoever in the way. I think it is a fair proposition to make that the Commission should grant them a lease to work their coal in future, and that the royalty charged should be the same as they have actually been charging into their accounts since 1921.

8.49 p.m.

Mr. Peake

I am obliged to my right hon. Friend for having tried to put into words the principle, which I think was agreed in all parts of the House during the Committee stage, that the position of a colliery owner should not be made worse owing to the fact that he had purchased the coal which his colliery was working. My right hon. Friend's Amendment is an attempt to embody that principle in words, but I must confess that I was in a large measure of accord with the hon. and learned Member for East Bristol (Sir S. Cripps) as regards the phraseology of the Amendment. In particular, I think it will be exceedingly difficult for an arbitrator to decide what is the meaning of the words "unduly unfavourable." Obviously circumstances may be unfavourable or favourable, but when you qualify that by the word "unduly," it seems to me that the arbitrator or the court will be confronted with a very difficult problem. I think the problem which my right hon. Friend had to solve could have been solved in a very much easier way, by inserting in the Bill words to the effect that the conditions of the new lease should be fair and equitable to all the parties, having regard to all the circumstances of the case. At the same time, I am thankful to my right hon. Friend for small mercies, and I shall support his Amendment.

Mr. J. Griffiths

Does the hon. Member see any justification for such a proprietor getting more favourable terms than the amount of royalty which he has been charging in the accounts since 1921?

Mr. Peake

Obviously, until all the valuations are completed, which will take three or four years, it is impossible to say, as regards any particular proprietor, whether or not he will suffer as a result of the proposals in the Bill. It is not until after the valuation has been made that one will be able to decide whether the terms of the new lease ought to be less onerous.

8.52 p.m.

Mr. Shinwell

This is what comes of making concessions to the owners, as a result of which we find ourselves in a hopeless muddle, because no one knows what the meaning of this Amendment is. Even the hon. Member for North Leeds (Mr. Peake), who himself asked for this concession, is quite unable to comprehend it, and while he thanks the right hon. Gentleman for what he regards as a concession, he really thinks it is no concession at all. I suggest that the Attorney-General might favour us with a few words on this subject in order to clarify our minds. We ought to assure ourselves that what we are accepting is at least understood, so that there should be justice dispensed in the proper quarters. I must confess myself to be even more befogged than was my hon. and learned Friend the Member for East Bristol (Sir S. Cripps). He understands legal phraseology, but I do not pretend to understand it at all. After all, we are legislating for common people, some of them very common people, and we ought to use language that is really understood by them. I hope the Government can satisfy us on that head.

8.54 p.m.

Mr. Stanley

I frankly own that I am not wedded to the actual wording of the Amendment. The double negative "unduly unfavourable" is rather difficult to follow, but I hope that between now and the various stages through which this Bill has to go, when we may have more leisure than there has been, in view of the immense amount of drafting that has had to be done since the Committee stage, we shall be able to improve the wording. It is not quite as simple as the hon. and learned Member for East Bristol (Sir S. Cripps) stated, for this reason: I do not want to leave my hon. Friend the Member for North Leeds (Mr. Peake) under any misapprehension. Whereas, of course, there was the right of the working proprietor to a lease on the customary terms, if he does not think he is getting what are really the customary terms, the discretion of the Commission to remedy what they think is a hardship, by granting terms less onerous, is their sole discretion and not a right conferred upon the colliery proprietor and not, therefore, subject to arbitration. It is to some extent with the idea of making that distinction that the Clause has been drafted in this rather cumbrous form. The hon. Member for Llanelly (Mr. J. Griffiths) made an interesting point, but I think that to some extent he was answered by my hon. Friend. It will not be known whether there are any cases of hardship until the compensation has been determined and the customary rent is known, but I certainly agree that the notional royalty which the company has hitherto charged itself would obviously be an important factor in the decision of the Commission on whether it was a case in which they should use their discretion or not. I will look into the wording of this Clause and see whether at a subsequent stage we cannot make it both shorter and simpler.

Mr. J. Griffiths

In fixing the global sum when the coal was assessed in value, was not the notional royalty the actual royalty used to assess the value of the coal, and, therefore, has it not already been accepted in that connection?

Amendment agreed to.

Further Amendment made: In page 14, line 6, leave out from "otherwise," to the end of the Sub-section, and insert: not more onerous to the lessee than the conditions customary in the district or, where there are no customary conditions or the customary conditions are not applicable, than the conditions to which a person not entitled to the benefit of this Section might reasonably have been expected to agree, and the Commission may grant a lease to the person entitled on conditions less onerous than the conditions aforesaid where it appears to them that the situation of that person in respect of the business of coal-mining carried on by him would otherwise be unduly unfavourable as compared with his situation in that respect as owner of the fee simple in the premises."—[Mr. Stanley.]