HC Deb 19 May 1949 vol 465 cc622-83

3.49 p.m.

Mr. Brendan Bracken (Bournemouth)

The Opposition has many reasons for seeking this Debate. The first is that we believe, despite the Chancellor, that a fierce gale of competition in the export markets will strike this country soon, and strike it hard. The Chancellor has recently been praising the delicious food of Italy. To that, I suppose, we owe the rosy speech of last night. Let me say that from the point of view of the Opposition we are delighted by the Chancellor's well-deserved repasts, but I have profound views about the wisdom of the speech he made last night. However, I have often said ditto in this House and elsewhere to the praises given by the Chancellor of the Exchequer, by the Lord President of the Council, by the Minister of Fuel and Power and many other Ministers to all who have helped us in our stern effort to restore solvency to Britain.

But let us remember, in the light of the Chancellor's speech last night, that we are in the middle of a long and rough road which we must tread uphill for many years. I am certain that this country will be animated by the spirit of Sir Harry Lauder's famous song, "Keep right on to the end of the road." I believe that there is no division between parties in this Committee on the necessity of following Sir Harry Lauder's advice. We can, I believe, keep right on to the end of the road unless we are weakened by false optimism or unless by extravagance and maladministration, we overburden the shoulders of John Bull. It is because I am unhappy about the drafts now being made on our scanty reserves of gold and dollars that I am making an appeal to the right hon. Gentleman the Minister of Fuel and Power to recognise that there are great dangers ahead.

Of course, if we were Americans we could derive great benefits from trying to spend our way to prosperity. But we are in the unfortunate position that we must buy 45 per cent. of our food and almost all our raw materials in the markets of the world, and the right hon. Lady the Parliamentary Secretary to the Ministry of Food knows that that is a difficult task. To do this—to try to spend our way back to prosperity—would, of course, quickly exhaust our resources of dollars and gold. Let me repeat that I am most profoundly disturbed by these drafts on our reserves at present. I would have wished that the Chancellor last night had called attention to this extremely sad development.

I aver with sorrow that we are entering into times of depression. How deep that depression will be I know not. But here I again address an appeal to the Minister of Fuel. The Minister's responsibilities, heavy as they now are, may become overwhelming. The right hon. Gentleman has so many tasks set him that in some ways I believe it is almost impossible to discharge his office with success. I am perfectly certain that from time to time, whilst he is lying in his bath or enjoying himself in the country—and he gets rare occasions for that—he will agree with that remark. I disagree with many of his policies; he need not be a Sherlock Holmes to have discovered that during the course of the last few years. I care little for most of his appointments, but I must also recognise that he works with all his might and that he has many disappointments, some undeserved, others well deserved. We of the Opposition share many of his disappointments. The future of the country is all in all to us and, when it is threatened, party differences are of no account whatever.

The Ministry of Fuel and Power is one of the tightest monopolies in the world. The old Standard Oil Company in the United States was an amateur Heath Robinson affair by comparison with the Minister's Department. That is not to say that his Department is not also a Heath Robinson affair, but it can cripple the competitive power of many thousands of exporting firms in Britain. It plays a large part in maintaining the high prices that are now causing deep unrest in industry and plague almost every household in the land. I think so far, on the whole. I have carried the Minister with me.

Of all the responsibilities of the Minister coal is, of course, the greatest. We are very anxious about the happenings in that industry during the first quarter of this year. Our thoughts, let me tell hon. Gentlemen opposite, about the coal industry are not infected by political prejudice. We know that the miner's calling is hard, dirty and dangerous. We also know the sombre background of the industry in the past.

Mr. Shurmer (Birmingham, Sparkbrook)

In the past the party opposite treated them rottenly.

Mr. Bracken

That is what the Fabian Society are saying about what the Coal Board are doing at present. I do not believe the hon. Gentleman's statement, nor do I believe in the Fabian Society's accusation against the Coal Board.

Miss Jennie Lee (Cannock)

On a point of correction. Reference has been made to the Fabian Society. I hope it is clear to the right hon. Gentleman that their objection is that there is too much Conservatism in high quarters in the Coal Board.

Mr. Bracken

I must say that the hon. Member's attack on Mr. Ebby Edwards will be resented everywhere.

In the past, the coal industry has been convulsed by the efforts of political agitators and also, and perhaps what is more important, by extravagant political promisers—

Mr. Scollan (Renfrew, Western)

Political owners.

Mr. Bracken

—who led the miners to believe that nationalisation and syndicalism would run well together. I have already referred to the Fabian pamphlet. It confirms my opinion that today many miners are deeply disillusioned, not to say bitterly cynical. Hon. Gentlemen opposite should join with us in deploring that development. We want to try to get the best possible spirit in the mines. I am merely recording that there is bitter and deep cynicism among the miners. I hope that this will be removed by better public relations from the Coal Board and by the co-operation of all parties in this Committee. Let us say nothing by way of exhortation or unfair criticism that will add to the cynicism of the miners.

Mr. James Glanville (Consett)

May I ask the right hon. Gentleman by what right he speaks on behalf of the miners? How many are there in his constituency?

Mr. Bracken

That is a rather irrelevant interruption. I know my constituency contains no miners, but let me remind—

Several Hon. Members


Mr. Bracken

I really must be allowed to finish my sentence. Let me remind the interrupter that, despite the demerits of my constituency, the Socialist Party is constantly taking every opportunity to hold their annual conference in the borough of Bournemouth.

Miss Lee

The miners and others have a great sense of fun, and I should like to invite the right hon. Gentleman to come to my own constituency and attend a meeting of miners, when he might get to know something about the subject which he is discussing.

Mr. Bracken

I should be only too delighted, as I believe that one of the great Tory victories of the next General Election will be in the hon. Lady's constituency.

Miss Lee

Are you coming?

Mr. Bracken

Let me say that, while it is quite true that I have no experience of mining here, I have in my amateur way a fairly wide experience of mining in various parts of the world, but I would not claim to be an authority on mining.

Let me go back to what I have just said. Both sides of this Committee must do their very best to get rid of the disillusionment and cynicism in the coalfields, and so, for that reason, I am not going to prescribe another brand of politics for those who serve the coal industry, not that they are likely to call me in. Nevertheless, in so far as I can, I am most anxious to keep the coal industry out of politics, because politics have bedevilled the industry in the past.

Mr. Tom Brown (Ince)

I am much obliged to the right hon. Gentleman for giving way to me, because I should like to ask him a rather serious question, and to leave this hilarious atmosphere which he has created. He has made the rather sad statement that there is disillusionment among the mining fraternity. Will he give some evidence to this House of the disillusionment to which he has just referred?

Mr. Bracken

I am not at the moment going to talk about strikes or anything else, and shall deal with that later, but may I say to the hon. Gentleman that he should read a book by a gentleman who is not fully employed by Lord Woolton—a gentleman called Mr. Gollancz, who has published a book called "Men and the Pits," which is a very remarkable book. Secondly, I beg him to read the Fabian pamphlet, because it is very much in confirmation of what I have been saying.

Now let me get off controversial matters, although I have not raised any so far and the interrupters have. Here I think I can express a generality or platitude; I am not quite sure. The nationalisation of the coal industry without any carefully prepared policy was a colossal risk, not to say a gamble. We on this side of the Committee have many times expressed our doubts about the strange system of organisation established by the National Coal Board. I shall not say much today about this faulty organisation—I shall say a few things, but not much—save that it is appropriate and very necessary that, at the first possible opportunity, we should be given a day to discuss the Report of the National Coal Board. Last year, the Minister was not entirely wise in withholding this from us, but I am perfectly certain that, in order to discuss the coal industry today, we must have an opportunity to consider the Board's second Report.

I have already said that we are anxious about happenings in the coal industry during the first quarter of this year. Absenteeism, most regrettably, has greatly increased. I am fully aware that absenteeism is a word that can be interpreted in a different way by hon. Members on both sides of the Committee, but I am equally certain that mining Members here deplore the fact that, in the first quarter of the year, absenteeism has exceeded 15 per cent. The Lancashire strike was the worst for many years; it is probably the worst since 1926, and if I am wrong perhaps hon. Gentlemen opposite will correct me. I was truly delighted at the news that that strike had been settled, because it is of the highest possible importance to the country that Lancashire should make its due contribution to our coal production. Now, however, I get the grievous news that the strike may recur, and hon. Gentlemen on both sides will agree with me, therefore, that this is not the time to comment on the strike or to say anything that will exacerbate feelings or make it impossible for a settlement to be reached.

Now I turn to the Government's targets for coal production, and I am greatly grieved that they have not been achieved; in fact, they have been very much missed, though the T.U.C., which includes a number of miners, though not a majority, declared that the targets set by the Government were much too low. In the most friendly way, may I remind the Parliamentary Secretary of a speech which he made at Oxford last year? I must also remind him that I am quoting a metaphor which can only be described as very confused. He said that the target set by his Ministry was "not a theoretical figure, but an absolute minimum."

We all know that that target has been missed, and we also regret it, and hon. Gentlemen opposite will join with my hon. Friends on this side in saying that scarce, bad and costly coal is still a great burden on Britain. Despite many promises of improvement, little has been achieved. The Minister will have his opportunity of saying what has been achieved, but he would not, generally speaking, deny what I have said. We are greatly disappointed by the bad, scarce and costly coal which afflicts communities today.

I shall say nothing very much about opencast coal, because my hon. and gallant Friend the Member for Fylde (Colonel Lancaster)—whose constituency has been bisected but who will still be the Member after the next General Election—will out of his great knowledge deal with that matter. I must say in passing, however, that the amenities of the countryside and good land which must be greatly prized by the Minister of Agriculture, are being ruined to provide opencast coal. As the Minister has to make a speech, he may welcome some questions, and my first one is this: Is there any truth in the suggestion that a large part of this opencast coal is unsaleable? I should be glad to have an answer to that question. Deeply disappointing are the results of the first quarter of coal production in Britain during 1949, and we take no joy in these developments. We deplore them as much as the Minister does, and we very much hope that the production of coal will greatly increase during the present year, because it is of the most vital importance, both to the industry and to the country, that such a development should come to pass.

I have spoken about the consequences of bad, dear, and scarce coal to British industries. May I now make an appeal to the mining Members opposite to consider carefully what I am about to say to them? Do they not recognise that in the next vital 12 months, in a buyers' market, great dangers face the coal industry in Britain, dangers that may cause unemployment with its consequence of social misery? I am sorry to say, from the point of view of Britain, that coal scarcity is ending, because I look upon coal as the true begetter of England's industrial greatness, and I am very sorry today to have to say that coals are no longer the black diamonds they were during the last four years. Fierce competition faces us now.

Poland is most active in her attempts to develop export markets. Germany will certainly come into the export markets in a big way, and will make a great endeavour to cut prices in order to secure markets which we have hitherto enjoyed. South Africa, a country that did not really bother very much about its coal before the war, is now an important coal-producing country and is a competitor with us in many markets. Of course, the United States intends to try to export coal in a big way for cash. She is exporting coal at the present time for nothing, but the Americans greatly desire to get into our export markets, and we shall find ourselves up against great competition there, because the price of coal in the United States is very much below the price of coal here.

I have read speeches by politicians, both on platforms and in another part of this building, which I can only describe as silly attacks on those British exporters who provided Polish coal to Ireland. The simple reply to those attacks is that the National Coal Board could not fulfil its obligations. Therefore, I think that the Government of Ireland were perfectly entitled to make their arrangements elsewhere and to ask their British exporter friends to help them. But, of course, British exporters have been exporting American coal with the full knowledge of Lord Hyndley, the National Coal Board and the Chancellor of the Exchequer. They have been exporting coal to many countries, to France, to Italy and to the Scandinavian countries. They would, of course, like to sell British coal. Alas, it is not available.

There is nothing wrong in British exporters selling foreign coal when they cannot get British coal. After all, with the fullest approbation of His Majesty's Government, the British shipping companies are earning large profits for Britain by transporting foreign goods to markets in which we are anxious to compete, and long may they continue to do so and swell our hard currency revenues. Believe me, they need swelling at the present time. I have been watching with considerable anxiety messages sent to me from correspondents connected with the business for which I have some responsibility, who say that there is a great desire among certain countries in Europe and the Middle East to obtain more gold from Britain, or rather to put great drafts on our very small reserves.

Mr. Scollan

Would the right hon. Gentleman explain the point he made with regard to exporters in this country sending American coal to Ireland?

Mr. Bracken

Polish coal.

Mr. Scollan

The right hon. Gentleman said American as well as Polish coal.

Mr. Bracken

If I did, I was in error. I have already mentioned Polish coal, and I have also said that American coal is being exported through British agencies to Scandinavia, to France and to Italy.

Mr. Scollan

May I point out to the right hon. Gentleman that if British exporters were to buy American coal, they would have to pay for it either in gold or hard currency and to export it to a soft currency area, which would mean a loss in our dollar exchange. Consequently, it cannot be done.

Mr. Bracken

Apparently the hon. Gentleman has not heard of Marshall Aid. I do not blame him because he is so constantly interrupting in this House that he can barely have time to listen to what is said or to read the newspapers.

I once again return to the defence of these exporters because, of course, much of Britain's prosperity has been created by the enterprise and energy of merchants, shippers, bankers, and insurance companies who have provided services unequalled by any other nation. I am sure that the Minister does not disagree with that. In his days as a lecturer on political economy he must have repeated these platitudes to thousands of students. However, that was before this period of Government-controlled trading. We need a serious reminder that unilateral trade is a return to primitive bartering, but before departing from this subject of coal I wish to put a few more questions to the Minister.

Does the right hon. Gentleman accept the statement of Lord Balfour—there are many Lord Balfours, but the one to whom I am referring is the chairman of the Scottish Regional Control Board—about prices, because Lord Balfour recently declared that we might possibly expect a reduction of less than 5s. in the price of coal in 1965. What a prospect! Vast sums of money are being expended today on providing new machinery for the pits, and I regard that expenditure as wholly desirable. But I must ask the Minister, in the light of what has been happening at Grimethorpe, whether he has secured the union's agreement that restrictionists will not be allowed to prevent the utmost use of that new machinery. That machinery is being paid for by the British taxpayer, and the sums involved are immense. We require some assurance from the Minister that when the machinery is installed the restrictionists will not be allowed to destroy its utility. I often wish that we could all put it across to the miners and, indeed, to many other people in this country, including employers, that the machine is not the enemy of the employer and worker or of the miner; in fact, bleak indeed would be the future of the miner, without machinery.

When I was a Minister during the war it was one of my duties to have close contact with American generals. The Ministry of Information had the responsibility of looking after the welfare of American troops in England and of keeping a close contact between the Cabinet at that time and the generals of the American Army and Air Force. I was very much impressed one day when I went into the office of one of the brightest of all the young generals. He had a placard on the wall, a placard which had been distributed all round the barracks over which he had authority, and the words of that placard ought to be repeated, and indeed printed, by the National Coal Board and circulated extensively in every mining area in Britain. Here they are: Always strive to find a machine that will replace human toil, and use it to the full. I greatly hope that the Minister has a clear understanding with the great union responsible, that these costly machines, some of which are imported from the United States and some of which are being built here to the disadvantage of our export trade, will be used all-out; and if there is any help which can be given by my party in this attempt to persuade the miners that the machine is the friend of man, I hope very much that we shall be called in. We may not be asked to prescribe, but this is a point of great importance. I do not want to say very much more about this matter of restrictionism, save to say that the body of Captain Ludd has long since mouldered in the grave but his ideas still march on in Britain and I regard this new Luddism as a fatal barrier to our recovery. As I say, we should give up a whole day, doing our public duty with such competence as we possess, to the National Coal Board's second report.

Let me turn to this question of electricity, which is causing so much excitement in various parts of the country. It is not required of me to go into the history of this industry under nationalisation. After all, it has not been nationalised for very long. This compliment I must pay to the British Electricity Authority, however; they are well fulfilling the tradition of the nationalisers. I hoped I should get a cheer from the other side for that. They are well fulfilling it because the first act they perpetrated when they took over their responsibilities was to raise the price of electricity. This has imposed the harshest of burdens on millions of people, particularly those who live in all-electric houses. Some hon. Members may be under the illusion that the only people who can afford to live in all-electric houses are Sir John Ellerman and a few other great millionaires, but in point of fact many local authorities in the great cities have built houses and flats and have attracted people to take them on the grounds that they were all-electric. I think I am right in saying, therefore, that the recent increase in the price of electricity has been a very harsh burden on the dwellers in those houses.

I should like to ask a question of the Minister. I am asking him a lot of questions this afternoon, and I am sorry to say that I intend to ask him a lot more. How much electricity was actually saved by what is called—and I apologise for this Whitehallese—the "Clow differential charge" imposed last winter? The British Electricity Authority must have profited greatly by this heavy impost, but it has deeply worried people of small means. In fact, from some correspondence which I have received, I do not think it is an exaggeration to say that it has worried them to distraction. I regard it as a prize example of the planners' inhumanity to man. Leaving out their inhumanity, I want to say something about their intelligence—that is, of the planners responsible for generating plant. In 1948, these gentlemen cut their 1947 plans by a half. Hon. Members will remember the tremendous praise given to the planners for their great scheme for providing more generators in 1947. If blue-prints could provide more electricity, then electricity would be in excess in Britain. But these planners have not got very much further than their 1947 blue-prints which, of course, are now fly-blown, for in 1949 they cut their 1947 plans—these new plans that were going to be of such service to all of us—by one-third.

We all know that the war prevented the building of many much-needed generating stations. They are of the most vital importance to industry. The right hon. Gentleman will perhaps forgive me for saying that Ministerial muddles have played a very considerable part in the disappointment we feel because of the lack of more generators, but there is also one thing I must tell him. In doing so I am not attacking him personally; I am attacking quite a number of his colleagues who played a great part in the disillusionment which has come to the public.

In October last year the Minister of Supply announced that generating plant was ready. Their public relations officers went all round Fleet Street saying, "Generating plants are ready." But they also said that they must be stored because the buildings to contain them were not ready. I think that public relations officers of the Ministry of Supply have no right to start criticism of the right hon. Gentleman the Minister of Works. I have no doubt the right hon. Gentleman will try to deal with them, but my long experience of public relations officers makes me feel that nobody can keep them under control and that a strait-waistcoat is the only remedy.

I ask the Minister, what is the position now? This matter is of high consequence. I am told that one of the reasons we have not more generating plant is that the efforts of the Minister's colleagues have been frustrated by endless form-filling, and we all know there have been many reversals of policy. We also regret to note that the time now taken to build a big power station is twice as much as it was in pre-war days. The only explanation of that is that there seems to be no drive or efficiency among the many Departments responsible for building new power stations.

Another word about the British Electricity Authority, I must say the Board's policies are disconcerting, to put it mildly. Its administrative machine seems enormously unwieldy. How we look forward to getting the first report of that Authority in Parliament, and discovering the numbers of persons employed at what is called the top. Here, in passing, I must say something about the unfair methods of trading adopted by the B.E.A. or its subordinates in the provinces. Its area boards are now advertising goods on hire-purchase terms, while the Bank of England is requesting or directing the joint stock banks to discourage hire purchase. Of course, that Bank of England directive is formed after confabulations with the Treasury. The Minister will be glad to hear that we share his joy in examining into the first report of the B.E.A.

Now I turn to the subject of gas. The Minister and I have some amateurish experience of that industry, but neither of us is prepared to draw upon it today. You will not be surprised to hear, Major Milner, that, following the good old nationalisation tradition, the day gas was nationalised an arrangement was made to increase prices. I must say that the only thread of consistency in the present Government's policies in that when they nationalise they increase prices.

Mr. Oliver (Ilkeston)

Were the increases justified on the facts?

Mr. Bracken

It is hard to say, and I shall tell why; because we read criticisms of the local authorities, and we are told that some of the local authorities were so wicked as not to charge the consumer the real cost of the gas he used. So I looked at that argument. What did I find? That the attack is, generally speaking, directed against Socialist municipal authorities. At least, they were Socialist until the electoral disaster of last week. I think it is wrong to blame the local authorities for this matter. If they believe in providing a cheap service to the public, we should applaud that belief.

But I want to complain about something which is, perhaps, of lesser importance. It is about that most squalid example of political jobbery that has been set by the newly-appointed chairman of the North-Eastern Board. I do not know whether he is a constituent of the right hon. Gentleman; I do not know whether he has that advantage or not; but he is certainly a citizen of Leeds. This gentleman was until recently a director of the Co-operative Wholesale Society Bank, and almost his first act as chairman of the North-Eastern Board was to order the transfer of the banking accounts of 76 companies in the area to the Co-operative Wholesale Society's Bank.

Mr. Kirkwood (Dumbarton Burghs)

Hear, hear.

Mr. Percy Wells (Faversham)

How much money was saved thereby?

Mr. Bracken

That is a very interesting question. I am going to deal with it. I am most grateful to the hon. Gentleman. First of all, as he perhaps knows, the Co-operative Wholesale Society's Bank is not equipped to deal with these accounts. It is not in the Clearing House. It has no adequate branches. Therefore, I am told that the Co-operative Wholesale Society's Bank will do a deal with the joint stock banks that have done the work in the past, and will be required to do the work in the future. Somebody must pay for that deal. Let me assure hon. Gentlemen that there is no economy in this business. The Co-operative Wholesale Society does not work for nothing, and so will get its commission, and I forecast that the person who will pay for this dirty deal is the unfortunate consumer—as he does all the time. I know that the Minister, in Committee, promised us time after time, that there would be no politics in the gas industry. I am furthermore prepared to believe that the Minister feels today that there should be no politics in the gas industry. I, therefore, feel it is his duty to remind the new chairman of the North-Eastern Board that his loyalties should be given to the State and not to the Co-operative Wholesale Society's Bank.

Mr. Kirkwood

Send him back to the bank.

Mr. Bracken

An hon. Member suggests that we should send him back to the C.W.S. bank. I am a man of genial, generous disposition, and I would not send him back to the bank, where he probably received a salary of £1,000 a year, whereas now he must be receiving something like £4,000 from his beneficent Member in Leeds.

Mr. Kirkwood

Santa Claus.

Mr. Bracken

The hon. Gentleman has no right to call him Santa Claus. It is, in fact, out of Order. I am only suggesting that the chairman of the North-Eastern Gas Board came from Leeds, and I hope he has the happiness of being represented in Parliament by the right hon. Gentleman.

Now let me turn to oil. Oil is a subject which interests all Members, and is likely to interest them very much more during the next few months. I hope I shall get some support from hon. Gentlemen opposite in describing the Government's handling of oil as being very rough in relation to the public. I say that the public have been very roughly handled by the oil department of the right hon. Gentleman's Ministry. The Government do not seem to like motorists very much. The Secretary of State for Scotland has declared that motorists are the most selfish people in the community. I have never seen the Secretary of State either hiking or bicycling, but I do think that that is a pretty wounding remark. The Government not only seem to think that the motorists are selfish, but that they are very gullible. Here are some of the justifications given for petrol rationing.

One is the Berlin airlift. I have seen the most wonderful descriptions—not from the Minister, but from some of his colleagues—in answers to Questions when we have tried to find out the Government's policy, and to get answers to the question why the public could not get more petrol. It naturally occurred to his colleagues to say that the answer was the Berlin airlift. But his colleagues were let down in a harsh way the other day by the Secretary of State for Air, because he told us that the petrol used in the Berlin airlift was only a drop in the bucket. We are told again that one of the reasons we cannot get more petrol is that there is a shortage of rubber. I must say that that tale should be told to the most senile of all marines.

The Minister of Fuel and Power (Mr. Gaitskell)

Where did that idea come from?

Mr. Bracken

The right hon. Gentleman's own propagandists.

Mr. Gaitskell

Cannot we have the quotation, please?

Mr. Bracken

I should be very glad to give the right hon. Gentleman the quotation, but I have not carried it with me. However, does the right hon. Gentleman deny that it has been stated that the shortage of rubber was one of the reasons?

Mr. Gaitskell

I have never heard of it.

Mr. Bracken

Only a couple of years ago it would have been a quite good justification. It is merely not up-to-date. If the right hon. Gentleman is looking for authorities from me, I will give him one on another aspect of the Ministry's apolooia—the shortage of tankers. The right hon. Gentleman has made many speeches about the shortage of tankers. Is it not a fact that an order given for some large tankers has recently been cancelled? I should like an answer to that question. Furthermore, I should like to know from the Minister what are our present stocks of petrol. What is the necessity for silly secrecy about this matter? Does anyone believe that our country's fortunes will be imperilled because the Minister gives us the figures of his petrol stocks? A few months ago hair-raising stories were being told to us about the world shortage of oil. Our American friends were not backward in circulating those stories; but the truth is that today Americans are cutting prices at home for petrol but they are not cutting any of the prices of the petrol they are selling here, nor do I think that they would be allowed to do so by some of the controllers of prices employed by the Ministry.

Mr. Harold Davies (Leek)

They cannot do anything about prices.

Mr. Bracken

What are we doing, may I ask the Minister, with the large production of oil in the sterling area? Is there any truth in the statement that large quantities of oil have been sent to China—China of all countries? How much petrol has been sent to Scandinavian countries, and has petrol sent to China and Scandinavian countries been paid for in dollars? These are serious questions and deserve a full reply. Again, let me ask a question to scotch a rumour. The only person who can scotch it is the Minister, not a much-despised Member of the Opposition. Do the Govern- ment give instructions to the Anglo-Persian Oil Company about the disposal of their products?

I throw the suggestion out to the Minister—and it is a very helpful one if he will take note of it—has any approach been made to the great American oil companies to keep a part of the enormous profits which they are making here at the present time in sterling instead of turning them into dollars? I know that they have a right to turn them into dollars, but has any approach been made to them to keep most of these profits in sterling for the time being? I am no bear of sterling. I think that sterling is one of the best currencies in the world. I think that as the years go on and we have a change of Government, it will be one of the hardest.

The American oil magnates seem more lucky than the film magnates in Britain. Hon. Gentlemen opposite know that for many years the American oil companies have made immense profits here. They got into this market before the British really woke up to the future of petrol. [An HON. MEMBER: "What Government were in power then?"] It was the Liberals on that occasion. They have built up tremendous profits here in Britain, and to their credit, much to their profit, they have large plants here, and other installations of immense value. I believe that the American oil magnates recognise that they have a big stake in Britain. Again, I ask the right hon. Gentleman, has any approach been made to the heads of the American oil companies to keep most of their profits in sterling and keep them here for a few years?

Mr. S. N. Evans (Wednesbury)

Is it not a fact that Royal Dutch Shell have very large concerns in the Western Hemisphere which in turn serve this country very well? I accept that there is an adverse dollar balance at the moment, but I am asking the right hon. Gentleman if it is not a fact that the company I have named does enjoy a very large dollar income from sales in the Western Hemisphere, which of course, in turn, benefits the sterling area.

Mr. Bracken

If the Dutch are in this transaction to which the hon. Gentleman referred, I must remind him of an old poem, actually composed by a Prime Minister, one of the few who could write reasonable poetry—not that this an outstanding example in poetry In matters of commerce, the fault of the Dutch Is offering too little and asking too much. I am not talking at the moment of the Dutch; I am talking of the great American oil companies. [Interruption.] I know perfectly well the relationship between Shell here and the Shell interests overseas, but that would not help the Minister much, as he knows. What I might call the installations here—the petrol pumps all over the country—are largely controlled by the Americans. As I have already stated, they have a large stake in the country, and I think that they ought to stand by this country at the present time. Furthermore, as I must repeat myself, they ought to have faith in sterling. If the installations and the very valuable plant which they possess here are worth anything, they ought to show more faith in this country. I am not suggesting for a moment that the Americans have done anything that is not absolutely within their rights. I think that the Americans can say to us, "You must honour agreements to enable us to convert our sterling takings into dollars"; but I think one could go a little beyond agreements by a personal appeal—and only a personal appeal—to keep some sterling here; and if they do not agree, that is the end.

I know some of the heads of the American oil business. They are tough, but they are also generous men. They know that it would be well worth their while to earn the good will of millions of British motorists by meeting us in the way I have suggested. Nothing that I have suggested has anything to do with the repudiation of agreements. I merely ask the Government to put it up to, say, the Standard Oil Company, whose subsidiary here is probably the biggest of all distributors, that it would not do them any harm financially to keep their earnings here in sterling for a few years, and the public would be grateful to them if they would do so.

Mr. Scollan

By increasing the supply of petrol?

Mr. Bracken

Now that the supply of petrol has greatly increased, surely the Minister can deal generously with British motorists? I appeal to him to take a risk in this spring time and give the public an opportunity of a happy holiday in the summer. If the risk goes wrong, the right hon. Gentleman will certainly not be blamed from this side. I do not think that he will be taking any very great risk because oil now is very much in the buyers' market, and I cannot believe, unless the Minister contradicts me, that we have not very large stocks of petrol or of oil.

I have said that the Government have treated motorists in this country roughly, but what can be said of the treatment meted out to the industrialists by the late Minister of Fuel and Power, so happily translated to the War Office? That gentleman, in a panic, called on British industrialists to convert their plant from coal to oil. Vast sums were spent by industrialists in achieving that conversion. In December, 1947, it was estimated that nearly 1,300 industrial firms had converted from coal to oil. Then they were suddenly told that oil would not be available and that they must go back to coal. Poor "tinkers' cusses"! Enormous waste resulted. I have seen plant, now rusting in various parts of the country, which was bought because the former Minister of Fuel and Power ordered, or directed, industrialists to convert from coal to oil. He may not have had any power of giving them a command which would have the force of law, but he could always deprive them of their raw materials if they did not fulfil his instructions. That is another example of planning in the Ministry of Fuel and Power, but again I must say that the present Minister had no responsibility whatever for that policy, because a Parliamentary Secretary has no responsibility for the policy of a Department; nowadays it is only the Minister and, apparently, the Parliamentary Private Secretary who take the rap.

Nobody in industry today seems to understand the Government's refining policy. If the right hon. Gentleman does, I hope he will give us the benefit of his information. I do not want to press him if he has not the information; he cannot come along here with every detail of his Department's work, any more than I could come along with the small quotations required by his ever-bubbling Man Friday; but it would be a great advantage to the country if the Minister could give us some information about the refining policy and the plans of the Government to increase the refining capacity of the country. The war held up all sorts of hopeful schemes for building great refineries here, and it would be an advantage if the Minister could tell us when those plans are likely to be fulfilled, because it is no use for us to get blue-prints of the refineries of the future until we know that. We have had that one before, and we are now looking for a carefully prepared time schedule.

I think every hon. Member on this side of the Committee—and for once I think I can speak for the other side—will join with me in saying that we are all in favour of increasing our refinery capacity, because we can create many new industries out of the by-products of oil. I have always taken the view that in the end the chemist would probably save Britain, and I am all in favour of the establishment of adequate refining resources here. I hope the Minister will cheer me up by telling me that he has that very much in mind, and by giving us some indications of his plans.

I am sorry to have taken up so much time. Of course, I did afford interrupting hon. Members opposite an opportunity of participating for at least a few minutes in this Debate in case they could not catch your eye, Major Milner. I have no complaint to make of that, because I think that one of the best things in the House of Commons is for a speaker to give way to reasonable, or even unreasonable, interruptors.

Some hon. Members opposite seem to doubt my statement that our export industries must soon face a depression. Now, "depression" is an unfashionable word. When I was very young I had an opportunity of witnessing the great slump in the United States, and nobody objected to that being called a depression. But in the middle thirties America was afflicted by another great weakening in sales, and the politicians, who had to win elections, declared that this sad development could not be called a depression. They said, "Anyone who calls this new development, the falling off of sales, a depression is foolish. He is the sort of man who will neither believe in Moses nor the prophets." Then, of course, Americans had to invent a new name, and they called the depression of the middle 'thirties a "recession." Today, the Americans have found a new name for the decline in sales—and, let me remind the Minister, a heavy decline in oil sales. They are not willing to call it a depression, and I must say that their new name is a very attractive one: they call it "a slide." I do not know whether or not it will be a toboggan slide. I greatly hope that it will not be, because a great depression in the United States would be one of the greatest tragedies that could afflict the world.

I say to the right hon. Gentleman that we too must prepare against a slide, and the Minister of Fuel and Power can greatly help us to do so by cutting some of the extravagant overhead charges for which his Ministry is responsible. I am not suggesting that the Minister has too many civil servants. I get very bored from time to time by these attacks on the civil servants, and the civil servants are not merely bored but are afflicted by frenzy when they have a look at the vast multitude of gentlemen who serve these new national boards, and who are loosely described by the public as civil servants. Most of them certainly would not have passed a Civil Service examination, although they might get through "Cissbe."

Mr. Glanville

What is "Cissbe"?

Mr. Bracken

"Cissbe" is an establishment set up by the Foreign Office to judge of the manners and general habits of young gentlemen who wish to join the Foreign Service. I hope the hon. Gentleman is satisfied with that explanation.

If the Minister does not face up to this responsibility, he will be doing a very great disservice to Britain. Now, I am not asking hon. Members to accept my view of the dangers ahead to Britain. I want to make a quotation from the chairman of the Cunard Line. I do not know whether he is a Conservative or a Liberal; for all I know he might even be a member of the party opposite; or he might be one of the many sensible people in England who do not belong to any political party. This is what he said only a few weeks ago: Under the new National Coal Board British shipping and shipbuilding have lost the benefit of home-mixed coal at world prices. Bunker coal in New York at 61s. 2d. and in London at 98s. per ton tells its own tale. It is fortunate for British shipping that as British coal prices itself out of overseas markets and bunker deposits, other and cheaper supplies of coal and oil in fields abroad are being developed in its place. I see present many hon. Members opposite who represent mining constituencies, and I beg of them to take note of that remark. We really are pricing ourselves out of many markets, and the effect will be catastrophic to the mining community. That is the reason why I have asked the Minister to face up to this problem. I am not throwing the whole burden of responsibility on him, but in my judgment he alone can make the necessary economies in overheads in some of the nationalised industries. But, of course, as he well knows, economies are trivial by comparison with the fact that the only sure way of getting out of our troubles is by increased production. Alas! as I have said before, we are the only great industrial Power in the world who must import nearly half our food and almost all our raw materials. In a world slump we shall suffer much more than any of our competitors. Whatever our critics may say, there are few people in the world who doubt the quality of our goods, but many buyers today are resisting our prices. Our worst danger lies in the ghastly rigidity of our economy, and I beg the Minister to play his part in reducing that rigidity.

5.1 p.m.

The Minister of Fuel and Power (Mr. Gaitskell)

This is the first Supply Day connected with my Ministry that we have had since last summer. In the circumstances, it was quite natural that the right hon. Gentleman the Member for Bournemouth (Mr. Bracken) should have covered a very wide field and inevitably taken rather a long time in doing so, although we on this side have no objections whatever to that. It devolves upon me to present a report of my stewardship for a period covering almost a whole year, and I, too, shall have to cover a rather wide field. I shall be as quick as I can, but I apologise in advance if Members should feel that I am taking up a little too much time.

Mr. Harold Davies

We shall only have time for about two more speeches.

Mr. Gaitskell

I realise the difficulty, but the Opposition have put down a lot of Votes and have asked many questions.

I should like to begin by saying something about the petrol and oil situation, with which the right hon. Gentleman dealt towards the end of his speech. It is, of course, one of the major responsibilities of my Department, and as far as the public are concerned the main issue no doubt is petrol rationing. I have not really a great deal to say about petrol rationing as such, except that it is an extremely difficult job, that we do our best to do it fairly, and that we have to have rules, otherwise there would be chaos, and at the same time restrain consumption, otherwise the purpose of rationing would not be achieved. I suppose that a good many people, and perhaps some Members, may be asking why we have to have rationing at all. The right hon. Gentleman referred to a number of different reasons which, as he said, have been given as answers. I must say that I have not heard anyone really suggest that the Berlin Air Lift was the reason for continuing rationing. No doubt it was suggested by some people that the Berlin Air Lift consumed petrol which might otherwise have been available for British motorists; but we know that it is a very small amount, that it is aviation spirit and that a certain amount would be consumed by the R.A.F. in their ordinary training operations anyway. As for the rubber story, we have very little to go on, and if any Member can produce any evidence my hon. Friend the Parliamentary Secretary will go into it.

Mr. Bracken

I was talking about tyres.

Mr. Gaitskell

The right hon. Gentleman did not give us the connection. I have not heard of it, and in any case it is not true. The direct answer to why there is petrol rationing is that without it, motoring would be an extremely uncertain affair, much more uncertain even than buying sweets. It would be most awkward, if rationing were abandoned and nothing was done about petrol supplies, for motorists to find themselves stranded in different parts of the country.

The real question is not why we have rationing, but why we cannot increase our imports of petrol so that we can do away with rationing. The first answer is that imports, from whatever source they come, have to be paid for. Sometimes all of us are inclined to speak as if imports from certain parts of the world, particularly from sterling areas, come into this country in some mysterious way without having to be paid for. That is absurd. It is true, of course, that the problem of finding means of payment in dollars is much greater than in the case of sterling, but the means have to be found from wherever the petrol comes.

The petrol comes at the moment partly from United States companies, and therefore costs dollars—that is the basis on which American companies trade. The right hon. Gentleman suggested that they might be prepared to leave their sterling balances here, and I think it is only fair to tell the House that some American companies have quite considerable plans for the construction of refineries in this country—I am sure we all welcome that development and the investments that will be made in this country. It is often said, "Why bother to get petrol from American companies? Why not get it from British companies?" One newspaper quite recently asked why we should not make the American companies, even if they distribute here, get their oil from British companies. I should like, if Members will bear with me, to explain in some detail what is the answer to this question. The first thing to remember is that the so-called British companies are not wholly British. The Anglo-Iranian Oil Company can certainly be described as wholly British, although there are some foreign shareholders, but the Royal Dutch Shell Company is 60 per cent. Dutch-owned and only 40 per cent. British-owned; it is true, of course, that we have a controlling interest, and that the management is primarily in British hands and situated in London, but it is not wholly a British company.

The second point is that these sterling companies do not produce very much oil in the British Commonwealth. I think the figure is about 10 per cent. of their total production. For the rest of the sterling area we might add another 5 per cent., and so say that 15 per cent. comes from the British Commonwealth and sterling areas. Although they may accept payments in sterling for the imports into the United Kingdom, we must not overlook the fact that they have pretty heavy dollar expenses. They have to buy some dollar equipment, although I am glad to see that British equipment for oil production and maintenance has gone up a good deal. They have to pay pretty heavy royalties in Persia and Venezuela. Although these may not be paid directly in gold or dollars, the fact that the companies have all these expenses, as well as the expenses of production and refinery, places our balances with these countries in such a condition that we have to pay in gold or dollars, and so as a result of these companies producing in these areas dollar and gold payments are certainly involved. These sterling companies sell their output of oil, petrol and motor spirit all over the world, and they sell it, Shell in particular, in dollar markets as well as in other markets in the sterling area.

The direct answer to the question, "Why not get more motor spirit from British companies and pay sterling for it?" is that at the moment these companies, in order to meet the demands for their products, have to purchase additional motor spirit from the United States companies. In other words, they have to do exactly what it is suggested we should make the American companies do, and the reason they do this is because what they can produce from their refineries is not as great as the total demand they have to supply. Therefore, it follows that if tomorrow you, Major Milner, were to say to me that it really is time we had some more petrol for Summer motoring—and I sure you will be only too glad if I could say "Yes"—I should be bound to reply, "If that is to be done, then the only way to obtain it is either to pay dollars for the whole of it by making the British companies buy some more dollar petrol, or by the British companies giving up some of their other markets." Those other markets are predominantly in the sterling area, and obviously, if the companies gave up these markets, the inevitable result would be that the sterling areas would come along and say, "We must have dollars to buy petrol to take the place of the petrol you are no longer supplying." If it was a case of taking the petrol from a dollar market, there again we should be losing dollars.

There remain the other countries. Some of these—indeed, most of the rest of them—would be countries in the Western Union, in the O.E.E.C. scheme, who we supply with petrol as part of the whole arrangement under Marshall Aid. One must not assume that there is a vast number of soft currency markets where we can simply cut off supplies at a moment's notice. The position, as I expect hon. Members will agree, is changing all the time. Some six months ago a country may have been a soft currency country, and it may now have become hard currency; later it may change round the other way. However, we keep under review all the time the question of whether the oil companies are putting just a little too much into one country or another.

Mr. Bracken


Mr. Gaitskell

I think I know what the right hon. Gentleman wants to ask. We do not direct the oil companies, in any direct sense, and I should say to the House that it is very doubtful exactly what powers in any direct sense we should have. One must remember that these products are not produced here and subject to export licensing, or anything of that kind. They are produced in different parts of the world, the oil companies being international concerns. That is the short answer to the question. This is essentially a dollar problem.

Mr. Bracken

The British Government is the principal shareholder in the Anglo-Iranian Oil Company and might be entitled to direct them. However, I wanted to ask a question about China. Has petrol been sent to China, and have dollars been received for the despatch of that petrol? Also what sort of compensation did we get if we sent oil or petrol to Scandinavian countries?

Mr. Gaitskell

I am afraid I cannot answer that question without notice. It would depend, so far as both countries are concerned, on the general payments arrangements with them. I am afraid I have not got the information available at the moment.

Mr. R. S. Hudson (Southport)

I presume the Parliamentary Secretary will have time to get the information between now and when he replies?

Mr. Gaitskell

We must understand first of all, even so far as concerns the Anglo-Iranian Company, that in relation to commercial policy the Government have not the power to intervene. There was an arrangement made with the Treasury when the shares were originally purchased, which gives the Government certain powers in relation to strategic matters, but not in relation to commercial policy. These are arrangements concerning a private company and I shall have to consider whether we can disclose them.

Mr. Bracken

Of course, if the arrangements were made by a private company the Minister could not give the information, but my information is that the petrol was sent to China by direct orders of the British Government.

Mr. Gaitskell

We will certainly inquire before this evening. If there is no reason why we should not disclose the information, we shall certainly disclose what we know about it.

I can well understand the right hon. Gentleman saying, "Yes, we appreciate that at the moment British companies have only got so much petrol available and, therefore, if we were to have more here it would mean cutting the supplies down to somewhere else. It would mean directly or indirectly losing dollars or some other valuable commodity which we need if oil supplies play a considerable part in the various trade negotiations. But surely there has been a large expansion in the production of these British companies?" That is perfectly true. I am glad to say that there has been. I suppose one should say that primarily there has been an increase in production of crude oil from the Middle East, but there has also been some increase in refinery output. For example, we expect that this year the output of motor spirit by the sterling companies will be about half a million tons above what it was in 1948—not a very big increase, but still it is an increase.

But the point is that while production has gone up, consumption has increased as well, not only in the sterling area and not only in other markets, including dollar markets, but also in the United Kingdom. Perhaps it is natural for the public to assume that we have kept petrol consumption rigidly down to the level that it was two or three years ago. That is not at all the case. There has been an increased consumption by goods vehicles and industry, and I may say that owing to the increase in the number of cars on the roads and the needs of individual applicants—or perhaps it would be fairer to say, the needs of individual applicants becoming known to us—supplementary petrol allowances this year are running at an annual rate of about 150,000 tons more than last year. We do our best, and it is our duty, to keep these down, but we also wish to administer the petrol rationing scheme in the fairest way we can. Hon. Members in all quarters of the House are pressing me to give more to this or that constituent, but I must warn them that the demand is going up all the time and we have to keep a check on it.

What is true of motor spirit is also broadly true of most other petroleum products, with the exception of fuel oil on which I will touch in a moment. That is to say, if we need more we have to pay in dollars and we have to pay for the whole of it in dollars. I am not saying for a moment that this will always be so. On the contrary, as the output of the sterling companies increases we should certainly benefit. We should certainly get quite an improvement as a result of the construction of refineries in this country. The right hon. Gentleman asked me how we were getting on. The latest information I have got is that this year we hope that the through-put of the refineries here will be over 6 million tons compared with about 3,500,000 tons in 1948, which is a pretty substantial increase. As I think hon. Members know, we hope that in the course of the next two, three or four years the output will rise to about 20 million tons. That is the refinery programme.

I was interested to hear the right hon. Gentleman refer to the plans that were made before the war and so on, but, as I recollect it, the policy of the Conservative Government before the war was not at all in favour of home refining. On the contrary, it was pressed from time to time and turned down. The Government then in office accepted the Report of the Falmouth Committee which was opposed to home refining. I feel that that was a mistake; I am glad that we have put the matter right and, of course, I am also glad to hear the right hon. Gentleman supporting us. He is always ready to change his mind, and one of these days we shall have him crossing the Floor of the House.

Mr. Bracken

That will sink you.

Mr. Gaitskell

I must, however, issue one further word of warning and damp down any feelings that hon. Members may have that as refinery output goes up here and in the Middle East we shall be able at a moment's notice to get rid of petrol rationing altogether. The reason is this. Even when output has gone up, we shall not altogether have got rid of the dollar element in oil. To begin with, even when British companies give up having to purchase petrol or other petroleum products from American companies, there is still the fact that we import direct from American companies quite a lot of oil both here and in the sterling area. Secondly, our own companies, as I have said, have a good deal of dollar expenditure as well.

What we hope is that steadily over the next few years as the new refineries are completed, we shall be able to achieve quite a substantial reduction in the net dollar deficit of the sterling area as a whole. That is still pretty large as far as we can make out, and it certainly imposes a very heavy burden on our dollar resources; but so long as there is a dollar shortage—and my right hon. and learned Friend the Chancellor of the Exchequer is tireless in his warnings to the people of this country that we must still face this extraordinarily difficult problem—we have to watch consumption here and we have to keep it under control. It is, therefore, not just a matter of whether we can produce more oil. It is a matter of whether we can afford the dollars or whether we can afford not to save dollars which may still be a very important issue for us even when our oil production has gone up.

The right hon. Member for Bournemouth referred to the coal-oil conversion question, and I must reply briefly to that. In 1946, the output of coal in this country was very low, although it had gone up a little from the lowest level of all, in 1945. The state of the coal industry when we came into power was extremely parlous, and we all know that as a result of that, and the steady decline in stocks during the last few years of the war, we were faced with, and eventually ran into, a fuel crisis. It was because of the prospect of that crisis that the Government decided to encourage industrial firms to convert from coal to oil. In that we had the full support of the Opposition. Yes, it is no good the right hon. Gentleman shaking his head, especially the right hon. Member for Southport (Mr. R. S. Hudson), who took part in many Debates at that time, when we were attacked for not going fast enough with coal-oil conversion.

Having left the coal industry in the condition in which they did leave it, and having supported the policy of coal-oil conversion, the Opposition now criticise us for carrying out that policy. It is true, of course, that conversion schemes did not go as smoothly as one would have liked. What was the reason? When the plan was first drawn up the oil companies were of the opinion, that they would be able to supply without difficulty an extra 5 or 6 million tons of fuel oil. At that time it was residual oil; they were unable to dispose of it, and it would have been comparatively easy to obtain. It is also true that they would have had to obtain some from the American companies because the Petroleum Board was still in existence, and pre-war quotas were still being maintained.

The Chairman

I am not clear whether what the right hon. Gentleman is now saying has any reference to locomotives which I think are not included in the Estimates for 1949–50.

Mr. Gaitskell

I think so, Major Milner. I was not referring to locomotives, and especially in view of what you have just said I shall not do so. I was replying to the right hon. Member for Bournemouth.

The Chairman

It would not be in Order to deal with the question of locomotives, which I have seen mentioned in the Press, because that would not come under the Estimates for the present financial year.

Mr. Bracken

Through the kindness of some advisers I was told to "lay-off" the subject of locomotives, and I challenged the Minister about the 13,000 private companies who accepted his predecessor's instruction to convert.

Mr. Gaitskell

I think I can show that this falls within the activities of my Ministry and that some part of the time of my officials was taken up with some part of the conversion programme.

Mr. R. S. Hudson

May I draw your attention, Major Milner, to the fact that we have tried to ensure that our criticisms of the Government would be in Order?

The Chairman

I am obliged to the right hon. Gentleman. All these classes of Votes refer to estimates for the present financial year. It would be in Order to relate any matter to these Estimates, if included in them.

Mr. Gaitskell

I was saying that conversion schemes did not proceed too quickly to start with, but after the fuel crisis there was a rush and we had to find something like 5 or 6 million tons of extra oil by the Spring or early Summer of 1947. There then followed a striking increase in the United States' consumption of fuel. I would remind the Committee that the United States' consumption is two-thirds of the world's total consumption, and that in 1947 the total increase in all forms of oil consumption in America was more than the whole of our annual consumption.

In those circumstances it was inevitable that a shortage should occur. Incidentally, there was a shortage of tankers at that time. It is true to say that there was a shortage of tankers then, but there is not now, as my hon. Friend the Parliamentary Secretary made clear in the Debate last year. On the other hand, at the time this shortage occurred, just after I became Minister, I felt it was unlikely that it would continue indefinitely. Nevertheless we had to say to the firms in process of converting, "Do not complete conversion, because we cannot be sure that the oil companies will be able to provide oil." If we had not done that we should have been open to severe criticism.

As it happened, the fuel oil position changed again very rapidly and in 1948, almost exactly a year after that warning was given, I was able, in effect, to lift the ban on the completion of conversion schemes, so that those on the deferred list who wished could go ahead. It is entirely for them to decide whether or not they will convert to oil. The right hon. Member for Bournemouth says they cannot go back to coal, but that is not so. In my view there is no reason why the Government should be apologetic about this matter. We took essential action before the fuel crisis. The oil is available now, and those who want to complete conversion can do so.

Mr. Hudson

I take it that we shall be in Order if we traverse the whole of this history, Major Milner?

The Chairman

Certainly. The Minister has assured me that some part of the administration of his Department in relation to this matter comes within this year's Estimates.

Mr. Gaitskell

Some part of the time of some of my officials is certainly spent in dealing with the tail end of the conversion programme.

I should like next to turn to the question of electricity. The major problem is the shortage of generating capacity. I need not weary the Committee with the reasons for it, of which we are all aware, but we know there was a sharp increase in peak demand in the period 1938 to 1947, and that capacity could not be increased during the war to meet that demand. Inevitably, the result—as those concerned realised—was that if there was a cold winter there would be a great deal of load shedding. Since then we have attempted to deal with this problem, on a temporary basis, by operating various schemes for load spreading, in which we have had the assistance, and have been grateful for it, of both sides of industry. We have tried by every means to hold down demand while doing everything we can to expand generating capacity.

The right hon. Gentleman made some criticisms of the so-called Clow differential. Following the very severe winter of 1946–47 we were faced with a very difficult problem. Many industrialists and trade unionists felt that the domestic consumer was not playing his part. They knew perfectly well that there was a big increase in domestic consumption, and they took the view that steps should be taken to restrain that increase. There was the real danger that if nothing were done they would decide not to go on with the load spreading schemes. We would have been criticised had we done nothing about it.

So first of all I appointed a committee under the chairmanship of Sir Andrew Clow to see what could be done. The only proposal they made which could be put into effect in time to affect the problems last winter was the differential tariff. There was nothing particularly new about this. The industry had had a differential tariff previously. True, it was introduced with the object of increasing the consumption of electricity, but the point is that in certain areas and districts they had this differentiation in winter and summer tariffs, the summer tariff being lower than the winter.

What the Clow Committee recommended was that this system should be introduced, giving a higher tariff in the winter and a lower one in the summer. I asked the British Electricity Authority and the Area Boards to apply the scheme. I did not tell them by how much they should put the tariff up in the winter or down in the summer. They decided to put it up by 35 of a penny in the three winter months and reduce it by 1 of a penny for the rest of the year. I realise that this was an unpopular measure. One could not be Minister of Fuel and Power without knowing it, but I must point out that it would have been an extremely unpopular thing if there had been heavy load shedding last winter and a lot of unemployment as a result. That is what we had to reckon with.

The right hon. Gentleman asked me how much we had saved by introducing the differential. It is impossible to prove how much has been saved. I can say fairly it was probably one of the factors which limited the expansion of demand and enabled us, with the mild weather, to get through last winter much more easily than we anticipated. I cannot prove that it has saved anything, nor can the right hon. Gentleman prove that it has not saved a great deal, because we do not know what the position would have been if the system had not been in operation.

Mr. Bracken

But we know that the poor public had to pay the bill.

Mr. Gaitskell

Let us be clear about this. There was never any intention that the B.E.A. or the Area Boards would gain anything by it. Consumers would pay more at one time in the year and at another they would pay less. It was made clear by the British Electricity Authority when they announced the scheme that if they made out of it the money would go back to the consumers later on. Indeed, it could not go anywhere else. The industry is nationalised, and it does not have to go into the pockets of private shareholders. The money is bound eventually to come back to the consumer if a profit is made out of the scheme.

Mr. John Foster (Northwich)


Mr. Gaitskell

I cannot give way. I have been interrupted a great deal.

Mr. Foster

We gave way on this side.

Mr. Gaitskell

I have already given way a good many times. I must get on. It is not my fault that we are trying to discuss so much in one day, but the Opposition have chosen to spread the Debate very wide and there it is.

Let me say one or two words about the generating programme. The facts are that we must expect an increase in demand each year of something like 700 to 800 megowatts. I am afraid that we shall not be able to add, on balance, to our generating capacity more than this during the coming year. In other words, the additional capacity that we instal this year will probably do no more than take care of the increased demand.

There is one other factor which I should mention. It is of great importance how much a plant is out for breakdown or repair during the Winter months, and I must say that the paper with which the right hon. Gentleman is connected was very fair and reasonable, and, indeed, full of praise for the British Electricity Authority's achievement last winter in this matter, because they reduced the amount of plant out from 15 per cent. capacity that was expected to just over 11 per cent., which made a difference of 400 megowatts—an extremely valuable contribution. This may be described as a feat of the engineers, but it is a feat which could not have been achieved except under nationalisation, because the only way in which it was done was by sending round expert repair squads from one power station to another which could never have been done if we had not brought the power stations under one control. There is no doubt about that, and if hon. Members choose to ask any electricity engineers about the matter they would confirm what I say.

Of course, I realise that what we are all concerned with is to get on faster with the generating programme, but we must remember some of the difficulties with which we have been faced. Most of the plant manufacturers were engaged on war work, and took some considerable time to get on to a peace-time footing. Taking the years 1945, 1946 and 1947 together, the total new plant commissioned was only 800 megowatts, not much more than the highest figure reached, namely, 759, in one year in the pre-war period of 1938. Last year there was a considerable achievement with a substantial improvement to 566 megowatts. I have no doubt we shall do a great deal better than that this year, although I am not making promises or commitments as to what we shall achieve.

In the second place, one must remember that these firms were engaged on war production and took time to switch back. Then, of course, they are exporting and rightly so, because it is a very important part of our export trade and we cannot afford just to say to them, "You must stop exporting altogether." The right hon. Member for Bournemouth knows the repercussions of that will be serious, because from the point of view of exporting this capital equipment we improve the industrial output of the sterling area in particular, and indirectly help ourselves by raising the standard of production and living in those countries.

The scale of our programme nevertheless is very large indeed. There are no fewer than 55 new power stations or extensions to existing power stations being constructed at the moment, and the expenditure this year on plant and buildings alone is something like £115 million, which involves half a million tons of steel, so that nobody can say we are not putting a great deal into this generating programme, although the demand is also going up very rapidly. The right hon. Gentleman referred to the allegations that generators were being made for which no building had been completed. I think he said that that was one of the—

Mr. Bracken

I was merely quoting the Minister of Supply. He may have been wrong; I can well believe it.

Mr. Gaitskell

I want to clear the matter up and give the facts. It is perfectly true in one or two instances turbo-alternators have gone ahead of building. It is a difficult thing to match precisely every bit of building that is erected with a piece of machinery. It is not a question of planning by the Government here. It is a question of taking over the plans of a great many different separate undertakings in the past. It is not at all serious, and the main bottlenecks which affect us now are not building but far more in the boiler making side than anywhere else. One firm of boiler makers has seven years' orders on its books, and another is similarly overloaded for pipe work, which is one of our special difficulties.

But the whole transition from a number of undertakings to a single authority has gone very smoothly. Subject to the overriding need of getting on with the export programme, the country can be assured we shall do all we can as fast as we can in the way of new equipment. The right hon. Gentleman said how much he was in favour of the miners. If he wants to continue the friendship, to hold out the olive branch that he is offering, it is a mistake to accuse the miners of being political agitators.

Mr. Bracken

I never did that.

Mr. Gaitskell

Or to say that the coal industry was ruined by political agitators in the inter-war years.

Mr. Bracken

That is more correct.

Mr. Gaitskell

That shows no great knowledge or insight into what was really wrong with this industry in the inter-war years. If we turn, as I think we should, first of all to the results, I cannot agree with the right hon. Gentleman that those results are quite as bad as he makes out.

What are the facts? Let us take 1948 since we have not had a Supply Day Debate on coal since that year ended. In that year, the increased output was nearly twice as great as in the previous years. There was an increase of 12 million tons to 209 million tons. I am speaking of the calendar year. Twelve million tons has to be compared with an increase of 7 million approximately in the two previous years.

Colonel Lancaster (Fylde)

Does that figure include opencast coal?

Mr. Gaitskell

Yes, it covers both. The increase in deep-mined coal was about 10½ million tons and the increase in opencast coal was 1½ million tons. One must also notice that consumption rose by about 9 million tons in that same year. Nevertheless, with the help of roughly 1,000,000 tons which we took from stock we were able to export 16 million tons which, incidentally, was above what we had originally indicated to the O.E.E.C. that we thought we would be able to do that year.

It is worth noting that in the three years, 1946, 1947 and 1948, deep-mined coal output has increased by 23 million tons and opencast coal by 3½ million tons, or 26½ million tons altogether. At the same time, we have increased our output per man-shift, which is the productivity index, by 11 per cent. This year we hope, taking the year as a whole—I think it is a fairly safe hope—that, first of all the European countries, we shall be back to the pre-war level for output per man-shift.

Mr. Bracken

Not per year?

Mr. Gaitskell

No, I am talking about output per man-shift.

Mr. Bracken

Per year is the only safe criterion.

Mr. Gaitskell

No, I would not agree. We need not get on to the argument about what the term "productivity" means. These figures are not relevant to productivity. It may be relevant to total production. We must note that in the same year consumption has also increased by nearly 15 million tons which is a fairly surprising and impressive increase. As a consequence, or partly as a consequence of the war, exports were still only about one-third of the pre-war level.

The right hon. Gentleman made some surprising statements in his speech about the opposition which he seems to think there is on the part of the miners to the installation of new machinery. I am bound to say that I think he is on a completely wrong track. Honestly, I very rarely come across any cases of opposition to new machinery in the pits. What we find quite often, and my hon. Friends will understand this very well, is that there is sometimes an argument about new price lists as a result of new machinery being introduced. It is hardly conceivable that there could have been all this opposition if, as in fact has happened, the installation of new machinery has increased as much as it has. If there were more time I could give figures, but the Committee and the right hon. Gentleman may take my word for it that there has been a steady increase. The right hon. Gentleman need not have any anxiety about that matter. The dispute at Grimethorpe was not concerned with the introduction of machinery at all but with the length of the stint.

What about the prospect for 1949? Although the 1948 figures are, in my view, quite good, it was clear to me and I think to everybody else, that we could not expect quite such favourable results in 1949, for one very obvious reason. In 1948, the extended hours were being worked. It was at the end of 1947 that the Saturday working in some districts and the extra half hour in others were introduced, and that output really began to rise rapidly. It has been estimated that as much as 7,000,000 tons was obtained in 1948 from Saturday working and the extended hours. I would not myself say that it was necessarily as high as that but it might certainly be of that order. It might be 5,000,000 tons. Clearly, we cannot get another gain of that kind this year. We may be able to sustain the figure, but we cannot look for a further increase. I did not expect that in 1949 we were going to be able to increase output as much as we had done in 1948. Indeed, as I feared, when we came to last November, the increase over the previous year which was running at about a quarter of a million tons per week, dropped to 50,000 or 100,000 tons per week. We had got to the period when we were comparing the output with the time when the extended hours were introduced.

Let me give the figures for the first 17 weeks of this year. For deep-mined output, the figure is just over 2 million tons above that of last year and about 3 per cent. on the average or about 100,000 to 150,000 tons per week. It is rather better than I had at one time feared. It has come about almost wholly as a result of the increased productivity in output per man-shift. There we have an increase of 4½ per cent. which is a very good increase. On the technical side very considerable progress has been made. There was a small increase in man-power, but there has been a 2 per cent. decline in the average number of shifts worked. I do not for one moment dispute what has been said that that is the weak spot in the situation. One could put it in another way and say that there has been 2 per cent. more face workers each producing 3 per cent. more, but on average each working 2 per cent. shifts per week less.

I must mention one other figure in this connection. Some of my hon. Friends may ask for the explanation of the decline in the number of shifts worked. It is not due to increased voluntary but to increased involuntary absenteeism. That is a rather worrying phenomenon. For example, if I may quote figures for face work absenteeism to which I think the right hon. Gentleman was referring, those figures showed that whereas last year voluntary absenteeism was 7.7 per cent. this year it is 7.25 per cent. Involuntary absenteeism was 6.16 per cent. whereas it is now 8.12 per cent. As I say, it is rather a worrying phenomenon and we are going into it. It is only fair to say that in voluntary absenteeism there has been an improvement. As to consumption figures in 1949, there has been an increase in the first 17 weeks by two million tons above last year. We have exported one and a half million tons more than we did last year but we have done it only by de-stocking.

The prospect for the year as a whole is, I think, roughly as follows: In the Economic Survey we said that we estimated production somewhere between 215 million and 220 million tons. Consumption was put at 198 million to 200 million tons, leaving exports at 17 million to 20 million tons. I must make it clear that at present rates of production in relation to last year we are too near the bottom in that scale. We are, it is true producing at a rate just over the 215 million—getting to 216 million tons. It is clear that we shall have, unless the output trend improves, a very hard struggle both to improve the level of consumption, which we expect will take place within the country, and to export within our commitments.

Therefore, although this year, on the least favourable assumption, we shall probably be producing 33 million tons above the 1945 figure—which is no mean achievement in itself and we must give those concerned some encouragement for doing it—nevertheless, it is perfectly obvious that unless we can get a further improvement during the rest of the year we shall be in difficulties, we shall certainly need all the coal we can get and, that indeed, we cannot afford not to get it. The Committee will agree with me therefore that I was justified in telling the National Union of Mineworkers, who came to see me about the problem of extended hours, that it would be disastrous for us if the extended hours system were not to be continued. I am very glad to say that, despite certain difficulties which had arisen, when they heard my explanation they very readily agreed to carry on.

However, I must say that I consider that I was equally justified in insisting that the opencast programme should go on. The right hon. Member for Bournemouth talked about difficulties in selling coal. All I can say is that at the moment we have not reached that stage. We certainly need all the coal we can get and we cannot afford to give up any method of getting it.

I now want to say a word or two about opencast coal. So far this year output has actually been slightly below that of last year, and that does not look too good, but closer examination dispels what might otherwise be an anxiety. For various reasons output during the first months of last year was exceptionally high and then it tailed off. I feel fairly confident that it will continue to rise steadily this year. We have put down 13 million tons as our estimate for the year, and I do not think that we shall be very much below it.

It is worth referring briefly to the anthracite position. Last year the opencast output was 223,000 tons. This year we hope to get no less than 600,000 tons, and we are now producing at the rate of 16,000 tons a week. We hope to go up next month to 20,000 tons. This is a rate of 1 million tons of opencast anthracite a year. I am glad to say that this has enabled us to double our exports to Canada compared with last year, although we would certainly like them to be higher still. I hope that we shall also be able to increase our exports to other hard currency markets in Europe.

I do not propose to say very much about the Select Committee's Report. For my part, I welcome the investigation they made into the whole problem. It has been a somewhat controversial affair. I know that a lot of hon. Members are very naturally troubled about what happens in their constituencies. On the other hand I have my responsibilities for coal as a whole and I think that the report and the minutes of evidence—I hope that hon. Members will read them—give an extraordinarily clear picture of how the whole operation is carried out. I would also claim, I think not unfairly, that it justifies our contract system. No serious criticisms of that emerged. It shows that there is very good co-operation between the many different people who are concerned with this, and it shows that a great many improvements have been made, for instance, in the practice of restoration. I know that some hon. Members object to opencast working but if one reads the evidence there is no doubt that that is the conclusion.

Mr. Bracken

We only hope that hell is paved with opencast coal.

Mr. Gaitskell

Even on that, the right hon. Gentleman is wrong. There is essentially very little difference in the quality of opencast coal except that it is a little more friable and a little less volatile. We are accused in some places, not by the committee, of incurring heavy losses. That is a most unfair and absurd accusation. If hon. Members will look at the table at the end of the report, they will see just how the costs of production have gone down. They have gone down by 10s. a ton in the past five or six years, and that is no mean achievement at a time when most costs have gone up substantially. Let those who accuse us of heavy losses which should not have been incurred answer these questions. Where should we be today if we were not getting the opencast coal? Which consumers should we have to deprive of the coal?

Mr. R. S. Hudson

That is not the alternative.

Mr. Gaitskell

It is the alternative. As I have tried to explain, we must have as much coal as we can produce, and therefore we cannot afford to cut down production. Anybody who says that we must cut down opencast production ought to say whether they would cut domestic coal, industrial coal, coal for the power stations or coal for export. They cannot make these accusations without putting forward their proposals.

Mr. Hudson

That is not the accusation we make. It is that the costs were originally, and always have been since, much too high.

Mr. Gaitskell

That is the kind of easy statement anybody can make. If the right hon. Gentleman has suggestions to make as to how we can reduce costs further. I shall be glad to hear them.

Mr. Hudson

The right hon. Gentleman shall hear them.

Mr. Gaitskell

It is interesting that the right hon. Gentleman refers to that. The question was asked by members of the Select Committee of a great many different witnesses who came to them, including the contractors. I think in every case the main answer which the contractors gave was, "We could reduce costs if we had a longer programme."

However, we are being attacked—I wait to see what the right hon. Gentleman has to say; he had better be careful—in some quarters for having this programme. If we had not had a programme that went on until 1951 we could not have got the cost of production as low as it is now, and probably we should not be getting the coal either. We cannot expect the contractors to invest in machinery and go in for this business seriously unless they have a reasonable degree of certainty that the programme will go on for a time. We cannot have it both ways. It may be a disagreeable thing, and I appreciate that it may be tiresome for local people who are affected, but there is no doubt whatever that the opencast programme has been a blessing to the community. If we were not producing at the present high rate, right hon. Gentlemen opposite would be failing in their duty if they did not criticise the Government about it; and we know perfectly well that they would do that.

I want to say a word or two about the problem of the different grades and quality of coal. Although it is clear that we shall be hard put to it to meet our over-all requirements this year, we face a particularly difficult problem in the field of what is known as large coal. There we have particular shortages in contrast to the smaller types of coal of which supplies are, relatively speaking, easier. There are two reasons for this. The first is that we are getting a decreasing proportion of large coal from deep-mined production. I suspect the reason for that to be the increased number of shots fired. We have taken steps with the Coal Board to try to put that right. Whether it is that, or machine mining, or both, it certainly is taking place, and it is, of course, fair to say that opencast production involves a rather smaller proportion of large coal than deep-mining does.

The second reason for the difficulty is that there is an exceptionally strong export demand for large coal, and to a certain extent, if we want to sell our smaller coal, we have to offer some large coal too. It would not be reasonable to expect our customers to take only the smaller coal. I am sure that the right policy is not to cut down total production and to stop opencast production or anything of that kind, which would mean losing some large coal as well as some small coal, but, first of all, to change the proportions in production as far as we can in order to get more large coal relatively to small coal, and, secondly, to switch consumption from large to small coal. That is exactly what we are trying to do.

In the case of opencast we have offered a quality bonus to get a higher proportion of large coal. We have done various other things with which I need not trouble the Committee, and I have already mentioned that the Coal Board are concerned over this. We have brought in the price mechanism, so far as possible, to encourage consumers to take the small instead of the large coal. Indirectly, in some advice that I gave the other day, and which I will repeat, it is a benefit to the country at the moment that people in off-peak electricity periods should use electricity rather than house coal, because electricity stations are mostly powered on small coal of which the supply is relatively plentiful.

The fact remains that we shall be tight as far as large coal is concerned. We have to try to balance it out as fairly as we can between exports, the railways and the domestic consumers. However, try as we may. I am afraid the prospects for the domestic consumer cannot be bright so far as large coal is concerned. Indeed, we must admit that whereas consumption will have increased by the end of this year by about 20 million tons since 1945, the domestic consumers are getting not much, if any, more than in 1945. They are, of course, consuming a lot more gas and electricity, but they are not getting much more solid fuel.

The reason is partly the shortage and partly that the need to export must be paramount. Scarcely a trade negotiation takes place in which coal is involved where it does not become one, if not the dominating factor. The negotiations turn on whether we can or cannot supply the extra coal. Naturally, as the Minister concerned, I am continually pressed to raise the amount of coal required for the various export trade negotiations. We have to recognise that in this matter it is a question of food and employment coming in advance of extra comfort from solid fuel in the heating of our homes. Of course we make relaxations wherever we can, and I am glad to say that about half a million tons of off the ration coal has been sold in the last year, and we have been able to relax restrictions on coke as well. I have spoken for a long time but it is difficult to cover such an enormous field, particularly if one has to reply from time to time to interjections, as one must.

I want now to refer to the things that are said about the Coal Board: I am glad to see the right hon. Member for Bournemouth (Mr. Bracken) getting interested in the Fabian Society, and I am also glad for his sake that it has secured him an invitation from my hon. Friend the Member for Cannock (Miss Lee). I am sure that if he will accept it, he will learn a good deal more from talking directly to the miners in her constituency than he will even from the Fabian pamphlet. I do not want to go into this matter in detail but I must say that I do not think that sending questionnaires to 88 people, of whom only 24 are working miners, out of the 700,000 people in the industry, is likely to give an accurate picture of the position. It would probably be wiser to consult a larger sample of persons. Indeed, if they had come to the miners' group in this House and had a thorough chat, we could have settled the matter quite quickly.

Some of the things that are said in that pamphlet seem to me to be rather silly. For instance, I wonder whether it really is so important that every working miner should know the names and qualifications of all the members of the National Coal Board? I realise that at first sight it sounds as though it were the natural thing to do, but if one thinks about it for a moment, I wonder how many members of the population know the names and qualifications of, for instance, the Government though they certainly get more publicity than the members of the Coal Board.

Mr. Bracken

Names, yes, qualifications, no.

Mr. Gaitskell

As for the leaders of the Opposition, no one has heard of them at all, so it does not matter. However, I do not blame them, they do not get enough publicity, poor things—even the right hon. Member for Bournemouth, who does not do too badly in that way. Equally in industry I should be surprised to find that all the employees of Unilevers, for example, knew the names of the 24 directors and their qualifications, and I do not feel that is a serious thing.

What really matters is what their relations are with the people immediately above them and on that, quite frankly, little light is thrown by the pamphlet. There is, of course the usual complaint from those questioned that there are too many of the old brigade there. That is a difficulty, we have always said it was a difficulty, but what can be done about it? We take over the industry, we must have men with technical qualifications—every miner in this House knows that—and we cannot displace all the men employed 6y the previous owners. And if there is not opposition to the old brigade, there is opposition to outsiders being brought in. I think that the Coal Board were absolutely right in making those appointments, but if people say, We do not want the old brigade. "We do not want outsiders," one naturally asks, "Who do you want?" The answer might be—

Mr. McGhee (Penistone)

What about the right hon. Member for Bournemouth (Mr. Bracken).

Mr. Gaitskell

Not yet. When he has been down to Cannock the right hon. Gentleman might get elected, but not before. No, the obvious comment is, "We should like to see more of our own people." I am bound to say that a good deal of the actual criticism of appointments has been made about persons who were working in the pits before. We must recognise that and be frank about it. Inevitably there are jealousies in this matter. The man who sees somebody promoted whom he has known as one of his fellow workers before, does not always take to it kindly. My own feeling about all this is that it is really superficial. I do not believe it represents fundamentally the attitude of the men in the pits, and I certainly would not take it nearly so seriously as the authors of the pamphlet seem to do.

Miss Lee

Is the Minister satisfied that the miners do not sometimes have a shutout feeling, and that there are facts relating to the industry, particularly as to the working of their pits, that they could quite legitimately know, and yet they are told, "This is none of your business," or "It is on the secret list." Is the Minister satisfied that there is a substantial reason for every piece of information to be withheld from the miners?

Mr. Gaitskell

No, I certainly am not satisfied. What I have said so far relates simply to the question of appointments and to the persons who fill them. I will say a word about that later. I think the pamphlet is grotesquely unfair to the Coal Board, when it says that there is no evidence that the Board were taking training and education seriously, I say that the authors cannot have read the report of the National Coal Board last year or they would have been familiar with the scholarship schemes introduced by the Board, with the appenticeship of tradesmen, with the release of employees for part-time education, with visits to foreign coalfields, with Summer schools. At one point they mention the desirability of having week-end schools which were occurring in only one division—I think they were referring to the Northern division. In fact in every division, either one day or week-end schools are taking place. It was a pity they did not find out the facts.

Here I come to the point to which my hon. Friend the Member for Cannock referred. I would not deny for one moment that it is most desirable that more should be done to bring the ordinary miner into the picture, for instance, when it comes to development plans. I have been round a good many coalfields and in the course of those visits I generally incidentally address conferences of managers and deputies; and one of the things I make a point of saying to them always is precisely that. One of the features of a miner is that he is interested in the development of his pit. I generally advise the managers concerned to get themselves invited to the local lodge. If there is difficulty about that I tell them to take the local village hall—and there have been cases where managers have done this. But we must remember that as yet this procedure is a little new. At first sight it seems a formidable proposition for a man who in the old days was on the other side of the fence to come along and handle the whole thing quite differently. I can assure my hon. Friend, however, that that kind of approach is continually being encouraged to the utmost by the National Coal Board.

It is late for me to embark now upon the matter of consultation in the wider sense, but I will ask my hon. Friend the Parliamentary Secretary to speak about that. All I shall say is that in my view it is not as simple an issue as the Fabian Group seem to think. It is not simply a question of saying, "Let us all be partners in the industry together. Let us share the management decisions." The National Union of Mineworkers have, in fact, definitely declared against that conception. They have said they do not want to share the responsibility of management. They are prepared to help and to co-operate as much as they can, but they do not want to get into the position of taking over management.

I have covered a very wide field but even so I have not touched on a lot of things connected with the work of the Ministry—the research work, for instance, in which very interesting developments are taking place—but I must now conclude. Before I do so, however, let me say this. In the Ministry of Fuel and Power, as in other parts of the economic work of the Government, the whole scene is really dominated by the balance of payments problem and, above all, by the dollar balance. That is obviously true of oil; it is true also of electricity, because the plant shortage there is connected as much with the need to export as with anything else; it is true in the case of coal, because all the time we must keep the domestic consumer short so that we may export more. The lesson which we as a community must all learn is that we cannot have our higher standard of living until we have set ourselves free and made ourselves independent from foreign aid in any form whatever.

We have, of course, made very great progress. We started with extraordinary difficulties—we all know that—and I claim that in fuel and power we have made substantial progress after starting at an exceptionally low level in both coal and electricity. From time to time we can afford some relaxations; partly because we cannot get expansion exactly as we should like—so that we can have the lights on in Piccadilly Circus even though we would really rather have more coal in our homes—and partly for other reasons relaxations can be made. Nevertheless, basically the lesson everywhere is the same. We have made progress, but we cannot afford to sit back.

To get out of the position we are now in the one thing we must have above all else is higher productivity; and to get a higher standard of living and, in addition, to get out of what we may call debt, or being under obligations to foreign countries, we need a higher productivity still. That lesson must go out from all sides of the House. If I may put it this way, patience to the consumers, who very naturally would like more petrol and coal, and encouragement; but at the same time requests to the producers to give us of their best and to help the country to get quite free and independent again.

6.15 p.m.

Mr. John Foster (Northwich)

The right hon. Gentleman has ended his speech by making the extravagant claim that his Ministry has done well. He was minded to rest a lot of his case on the fact that there had been an increase in coal production since 1945. He was very careful, however, not to compare his figures with, say, 1941, even though that year was in the middle of the war. He sought to delude his hearers by pointing out that from 1945 to 1947 and 1948 there had been an increase of so many million tons. Of course there was. But when he said, "Look at the state of the industry left to us in 1945," he had forgotten about the war. He did not seem to think that the reason why the industry was producing less than before the war had something to do with Hitler.

I have never heard an answer from hon. or right hon. Gentleman opposite—perhaps the Parliamentary Secretary will tell us this, without going back into the fallacy of the increase over 1945—why it is that, in comparison with 1941, nine million tons less coal were produced in 1948; that although in 1941 there were 26,000 fewer workers, they produced nine million tons more coal. The output per man year in 1941 was 23 tons higher than in 1948. In addition, absenteeism increased from 1941 to 1948 by some 2.3 per cent. Furthermore, in 1941 there was much less mechanisation; mechanisation in all the deep mines has increased from about 66 to 80 per cent.

Why does not the right hon. Gentleman say quite frankly that 1945 was a low period because of the war; that although we have improved upon that we have not got back even to 1941—much less to 1938 or 1937—in the amount of coal produced. The reason lies in the fact that the right hon. Gentleman's Ministry covers a very large slice of nationalisation. He finds it impossible by treating the figures fairly to defend the effects of nationalisation. He has found it quite impossible to point to the figures for 1948 and say how they are an improvement under nationalisation compared with a fair year of private enterprise. Under private enterprise fewer men produced more coal, whether we take figures for man-years or for absolute production.

Mr. Glanville

There is a simple answer. The coal owners flogged the pit seams during the period they were in possession—[HON. MEMBERS: "Oh."] Yes, hon. Members can say "Oh," but they should have a go at it. They left us with the thin seams. That is what the miners are working now, seams 16 or 18 inches high.

Mr. Peter Roberts (Sheffield, Ecclesall)

The hon. Member should go to Doncaster.

Mr. Glanville

That is what they are working in the area I come from.

Mr. Foster

I have had that answer before. The only way of dealing with it is to say that the hon. Gentleman is completely incorrect. He is asking the Committee to believe that in 1945 all the large seams suddenly came to an end and the very unfortunate nationalised industry had to start working on the narrow seams, in spite of the fact that mechanisation has been increased to deal with these narrow seams. His answer simply is not believable and is, I am sorry to say, completely incorrect. Even the Minister has the grace not to advance that theory. Had he been able to do so, he would have been the first today to say, "Well, we are working under much more difficult conditions. We in nationalised industry have a very hard task. The coalowners were very clever. They calculated the reserves of the large seams so that as the day for nationalisation arrived all the large seams ran out."

Mr. Blyton (Houghton-le-Spring)

If the hon. Gentleman would compare the figures of 1938 with 1913 he would find that the figures diminished every year from 1913 to 1938.

Mr. Foster

What I am saying is that the figures diminished during the war and that before the war we had enough coal. In 1938 we exported 38 million tons, which was the amount we could sell abroad. Therefore, before the war all the coal we could sell was produced. Now, under nationalisation, not enough can be produced, and the Secretary of State for Foreign Affairs is hampered at every turn in his dealings with foreign countries because he cannot produce the coal. The President of the Board of Trade is similarly hampered in his negotiations and the Minister of Food, besides his incompetence, is hampered by the fact that he cannot exchange coal for food. That is the result of nationalisation, and the figures prove it. I challenge the Parliamentary Secretary to take the 1941 figures and show why fewer men produced more coal with less mechanisation.

Mr. D. J. Williams (Neath)

Is the hon. Member aware that the British miner is the only miner in Europe whose production has reached pre-war level.

Mr. Foster

Again it is not true. If I may be pardoned for going down a side alley, to this extent, the hon. Member will find that production in 1948 in England was 82 per cent. of what it was in 1937, while in Poland it was 109 per cent., in France 115 per cent. and in the Saar 101 percent. I shall not weary the Committee with further figures—

Mr. Williams

The hon. Member is quoting total output and not individual output per man-shift.

Mr. Foster

But that is the thing which matters. If the hon. Member ever Wants to eat some meat and has a microscope, the same applies. It is the total amount produced that matters. There is not enough meat or petrol and it is no good talking of some improvement in the production per man-shift over 1945 and saying that that is all right. I do not believe that if fewer men produced more coal in 1941, one can get any comfort whatever from the fact, if it be a fact that the figures per man-shift show an improvement in 1948. What matters is the amount of coal produced. If it be a fact that more man-shifts are worked now than in 1941 the promise of the Government that the five-day week would be made up has obviously not been fulfilled. The answer is that the man-shift production has to be improved to make it equal to what it was in a bad year, in the middle of the war, when we were at the bottom of our war fortunes.

I also wish to ask the Parliamentary Secretary if he would agree that there is a considerable amount of dissatisfaction among miners about the National Coal Board. We have heard the right hon. Gentleman putting the Fabian Society into the same class as Parliamentary Private Secretaries. His description of the Fabian Society pamphlet leads one to the conclusion that it was obviously a typical piece of Socialist propaganda, inaccurate, superficial—

Sir William Darling (Edinburgh, South)


Mr. Foster

Untrue, as my hon. Friend suggests, but even they sometimes hit the truth and the truth was hit by the Fabian Society in their pamphlet, "Miners and the Coal Board," when they pointed out that there is a great deal of dissatisfaction among miners with the Coal Board. I should have thought that hon. Members opposite would agree that the Government are building a bureaucratic machine far removed from those who toil in the bowels of the earth. There is no doubt about that. In expressing that opinion I am not expressing it as one guilty of praising 20 years of Tory misrule, but those are the words of Alderman J. Jones at a meeting of South Wales miners at Porthcawl on 6th May. I should have thought that was some evidence that he regarded the Coal Board as a top-heavy structure which was not kept in touch with the men.

Two inquiries have been demanded, one in South Wales—perhaps the Minister of Health might support that—and another in Yorkshire, for an immediate inquiry into the Coal Board. There is a resolution of the Stockton-on-Tees Labour Party saying that the Coal Board have too many posts at too high salaries and that the industry is unable to bear these high costs—

Mr. Blyton

They have no pits there.

Mr. Foster

The hon. Member seems to assume that anyone who has not some pits in his constituency has no right to speak about the policy.

Mr. Blyton

We are satisfied that hon. Members who do not belong to mining constituencies are quite prepared to accept any tittle tattle.

Mr. William Ross (Kilmarnock)

The hon. Member for Northwich (Mr. Foster) started by saying that there is dissatisfaction in the industry.

Mr. Foster

I also said there were two lots of miners, in South Wales and Yorkshire, who demanded an immediate inquiry into the industry and I quoted Alderman Jones who said this at Porthcawl. I should say that is a good deal of evidence of dissatisfaction in the industry. Then we have the Fabian Society pamphlet, which the right hon. Gentleman tried to discredit. Now I suppose it is to be the general staff of the new independent Labour Party, but until it becomes that, it is being the general staff of the Labour Party. I know the Minister of Health has the highest admiration for the Fabian Society and I am sorry he did not hear the right hon. Gentleman when he spent about 12 minutes of his speech attacking the pamphlet on the ground that it was inaccurate and superficial. [An HON. MEMBER: "The Minister of Health is here now."] Knowing the admiration of the Minister of Health for the Fabian Society I was very sorry he was not here a little time ago. He would have been very pained with his colleague.

The use of statistics made by the Minister of Fuel and Power will not bear examination. For instance, he used statistics very glibly when speaking of the Clow differential and said he could not answer my right hon. Friend as to what was the saving in electricity, but he went on to say that if the Electricity Board made any profit out of the matter they would immediately return it. How can he know what profit is made unless he knows what proportion of electricity to attribute to the differential? It is very easy when speaking like that to say that two and two make five and no one notices, but that is not the way to deal with a big industry. He ought to meet the criticisms that have been put forward from this side of the Committee by taking the figures for 1941. No doubt the Parliamentary Secretary will tell him the point I made while he was absent. I am sorry that the right hon. Gentleman was not present then. He should take the 1941 figures and explain why, with fewer men, more coal was produced in 1941. It is not the point of view of the Opposition about opencast coal that production should be diminished. All we say is that by more efficient organisation, and by having an organisation which was in touch with the miners, the Minister would at least have a chance of increasing production.

To revert to the Fabian Society, we remember how, when they were advocating nationalisation, the picture was held up of private enterprise being wasteful and of competition overlapping, and we were told that if only nationalisation and socialisation were adopted, there would be such a saving in overheads and a saving by means of stream-lined planning, that costs would go down and production would increase. It has not happened. In "Let us face the future" it was stated that under nationalisation one of the great advantages would be economies to the consumer. In none of the three sections of the nationalised industries which are covered by the Ministry of Fuel and Power has that happened. The prices of coal, gas and electricity have increased. Where, I ask the right hon. Gentleman, are the economies promised by the supporters of nationalisation?

6.31 p.m.

Mr. Harold Neal (Clay Cross)

I have heard nothing in this Debate dissimilar from any of the arguments adduced by the Opposition in former Debates on nationalised industries. Before an industry is nationalised we grow accustomed to the argument that it is making little profit and in any case the owners are running it for the benefit of the country. When it is scheduled for public ownership, private enterprise fights hard and manfully to retain it. If private enterprise cannot retain it, its supporters struggle as hard as they can to exact as much compensation as possible. After vesting day, it becomes a habit to ascribe all its ills to the wicked inefficiency of socialisation. It is the same story over and over again.

Some interest appears to have been taken in the Debate in gas and electricity. I wish to direct the attention of the Committee to the problem of coal. The problems of gas and electricity will be easy of solution if the coal industry is a success. If we can secure the raw product in sufficient quantities at reasonable prices the question of its distribution and utilisation will be solved easily. The problems facing the Minister of Fuel and Power today are precisely the same problems as those which faced his predecessor. They are, to put them simply, more coal, cheaper coal, cleaner coal.

In the matter of increased production, I wish to congratulate the Minister and the National Coal Board on the results which they have achieved. Despite delivery difficulties, there has been a considerable increase in mechanisation. In parenthesis, I should like to controvert what the right hon. Gentleman the Member for Bournemouth (Mr. Bracken) said regarding the opposition of miners to the introduction of new machines. I speak with the responsibility of an executive member of the National Union of Mineworkers. I do not know of any opposition in any part of the coalfield to the introduction of mechanisation. In fact, in the East Midlands district three million tons a year are at present being produced by power loader methods. That does not look as though the miners were opposing the introduction of machinery.

But the programme of mechanisation must be intensified. We can never hope to restore the manpower in the pits to the pre-war proportions. Even in a period of full employment, with all its advantages and inducements, we cannot get back to our pre-war manpower level. More and more we must depend on machines to increase the output of coal. I think it quite likely that in the next few years we shall have to accommodate ourselves to a complement of something like half a million men in the industry. Increased mechanisation, therefore, will prove one of the greatest factors in securing the necessary output. Reorganisation has had its beneficial results, but output is still far below what we require for the home market and for sale abroad.

It would, however, be a mistake to form a judgment on the industry, upon what has happened since 1st January, 1947. I notice that the hon. and gallant Member for Fylde (Colonel Lancaster) is not in his place, but I know that I should carry him with me in that contention. A short time ago I paid a visit to the Conservative Political Centre, and in a lapse of extravagance I invested 3d. in a pamphlet written by the hon. and gallant Member for Fylde.

Mr. Hugh Fraser (Stone)

It is 2d.

Mr. Neal

Then I have been done down, but the price is given on the cover as 3d. Incidentally I have never been able to make out why these pamphlets have a red cover. It might be some indication that the hon. and gallant Member is coming over to this side of the House. On page 11 of his pamphlet, the hon. and gallant Member for Fylde writes: It would be unwise to discuss the present coal problem without considering what has happened during the last 35 years. I heartily agree with that submission, because no one on this side of the Committee ever pretended that the troubles of the industry would be over in the first year or even the second year of nationalisation.

When the National Coal Board took over the industry, no fewer than 500 of the 1,500 pits which they took under the umbrella of nationalisation were regarded as uneconomic pits, primitive holes in the earth, with insufficient shaft capacity, inefficient haulage, and inadequate ventilation. One of my friends, who has a wealth of mining experience, visited one of these pits in Wales some time ago. Commenting upon it afterwards, he said, "It is not a pit, it is a pity." When I think of the £164 million which was paid in the global figure of compensation for this industry, I wonder whether some of those owners ought not, instead of being compensated, to have been penalised for wasting national assets. These uneconomic pits used to be described as "necessitous undertakings," and in the years 1942 to 1946 were subsidised to the extent of £27,500,000. I do not know what those pits have cost the Coal Board since they were taken over, but it must be a sizeable sum.

The hon. and gallant Member for Fylde says on page 14 of his pamphlet that the industry, for the second time in 30 years, is being heavily subsidised by the consumer. On this side of the Committee we claim that the industry is not being subsidised because any losses must be made up out of subequent profits. Hon. Members opposite may not agree with that contention, but the statement by the hon. and gallant Member for Fylde does confirm that the industry has previously been subsidised. The event which he has in mind is doubtless that which happened some 24 years ago. In 1925, when the coalowners were making demands on the miners for wage reductions, they were asking the Scottish miners to accept wages of 8s. a day and Northumberland miners to accept 6s. 11d. a day. The miners naturally resisted that demand. Fortunately, the Government stepped in at that time and provided assistance to the coalowners by granting a subsidy of £25 million. Commenting on this subsidy, Mr. Lloyd George said at that time that while it was ostensibly a subvention to aid wages, it was in reality a guarantee of certain profit for owners. The Chancellor of the Exchequer at that time was the right hon. Member for Woodford (Mr. Churchill) and he offered some advice which hon. Members opposite ought to note. On that occasion, when he was introducing the Supplementary Estimate for the £25 million subsidy, he said: There are issues which transcend all questions of profit and loss. There are issues besides which the sufferings of individuals and the convenience of the public cannot be allowed to count."—[OFFICIAL REPORT, 6th August, 1925; Vol. 187, c. 1688.] If that were true in 1925, it is a terminological inexactitude in 1949? Conditions in the early days under the National Coal Board were such that they had to keep open the pits to which I have referred. They could have cut their losses and convulsed the mining community by throwing men on to the unemployment market, but they preferred to keep these uneconomic pits open in order to maximise the output of coal Quality had to go by the board and quantity had to be considered. In those circumstances the National Coal Board were doing exactly what the right hon. Member for Woodford advocated. They were studying the convenience of the public and avoiding the suffering of the individual.

There are too many of these uneconomic pits still in operation, and I hope that the Minister will encourage the National Coal Board to speed up its programme of concentration. No amount of mechanisation, no amount of reorganisation, will make some of these pits worth while keeping open. I know the difficulties of my right hon. Friend when a decision is made to close a colliery and the invidious position in which he finds himself. There are protests from all the people in the area in which the colliery is situated. The Parliamentary representative for the area is called in and offers his services; and every amateur mining engineer puts forward suggestions for extending the life of the colliery. But there can be no good reason for keeping a pit open when the output is only 18 cwts. per manshift, and when there are adjoining collieries with plenty of face room available where men can secure an output of 25 cwts. to 30 cwts. per manshift.

We must abandon all these uneconomic pits as quickly as we can. It must, however, be done with as little social convulsion in the mining areas as possible, and here perhaps my right hon. Friend might confer with his colleague at the Ministry of Health to ensure that when men are transferred they will have somewhere to live. But however it is done, I urge the Minister to do it, because it will prove one of the greatest factors in reducing production costs in the industry. I noted an indication in the speech of the right hon. Member for Bournemouth that he would wish to see a reduction in wages in order to bring down the price of coal. I would emphasise that the day of cheap mines has cone. No longer can cheap coal be expected from cheap mines.

Before leaving the subject of output, I want to say a word about the extension of hours. Miners are very reasonable people; they have loaned back their five-day week to the Government and the country. Last week the National Union of Mineworkers, by a card vote of 631 to 39 votes, decided to extend the hours agreement for another 12 months. That will make a substantial contribution to the output of coal this year. The two districts dissenting from that agreement are Notts and Derbyshire. These two districts, in the third quarter of 1948, made between them a profit of £2,862,433. But when miners come to work on Saturdays in these two districts, they work for 2s. 8d. less than in other parts of the coalfield.

I hope the Minister will bring his influence to bear on those responsible for this anomaly, because it is one of the factors which is dissuading miners from accepting Saturday work in these two high-producing districts. In fact, a shorter Saturday in every part of the 'British collieries would be a further inducement to men working on Saturdays. Why should not the miner have the advantage of participating in his football, cricket or bowls just as any other citizen in the country? I hope the Minister will turn his attention to the points I have mentioned.

With regard to the question of cleaner coal, I do not accept the figure given by the hon. and gallant Member for Fylde in the pamphlet I have mentioned. He says that five million tons of coal were lost to the country because of inferior quality. There is no official figures to support that claim. It is just a guess, and I suppose he must think his guess is as good as anybody else's. Anybody with experience in the industry knows that before the war the quality of coal was depreciating, partly because the cleanest and best seams had been worked out and partly because cleaning and washery plants were in arrears in construction. Mechanisation has increased the problem of dirty coal. When men got coal by hand they were able to separate it and throw the dirt away. It may not be generally known, but in most pits in the country there were deductions imposed on those men who sent out dirty coal. The difficulty now is that machines cannot think; neither can they separate dirt from coal underground. What comes in the way of the power loader has to come to the surface, and it must be dealt with by cleaning plants when it gets there.

Instead of large coal, of which the Minister says he would prefer to see more, we are getting more small coal under mechanisation. If this small coal is to be made saleable, it must be made clean. I am interested in this for a particular reason. I congratulate the National Coal Board on beginning their export programme in the very first year of office. They are to be complimented in securing a footing in the export market on the Continent in 1947. But the difficulty now is that the United States of America, and some other countries, too, can offer washed smalls superior to the smalls we are sending out to the Continent; and we shall have difficulty in maintaining our foothold in the foreign market if we are not able to provide cleaner small coal. I hope the Minister will bring pressure to bear on his Cabinet colleagues to ensure that the necessary equipment is provided for the cleaning and washing of coal to a greater degree than at the present time.

I wish to say a word about opencast production, because I represent an area which has been riddled by opencast mining as much as any part of the country. I would remind hon. Members opposite who complain about opencast production that if the advice of my hon. Friend the Member for Gower (Mr. Grenfell) had been accepted, the opencast mining programme need never have begun. If the men had been recalled from the Forces at the time when my hon. Friend recommended doing so, there would have been no need to begin opencast mining. I hope it is not regarded as a permanent feature in our coal production, and I hope it will be terminated as early as possible.

I cannot conclude without paying a tribute to the members of the National Coal Board and the work they are doing. They are public-spirited men who have given their time, their health, their experience and their energy to the task of meeting the needs of the country's coal requirements, often under the lash of abusive criticism. They are in the unfortunate position that they cannot answer back. Their achievements in the past two years have been recognised everywhere except inside the Tory Party. Perhaps that is natural. The Tories have never accommodated themselves to the historic decision of the electorate in 1945 in mandating this Government to bring the mines under national ownership. It is a psychosis from which they will never recover.

Finally, I assure my right hon. Friend that the miners are behind him and the National Coal Board in the effort to rehabilitate this great industry. The miners sometimes are in turbulent mood, as it has been said they are in Lancashire at the moment, but they have not lost faith in nationalisation. The miners have never shirked the duties and responsibilities which their calling demands. They are justly proud of their contribution towards economic recovery. The Minister and his predecessor, together with the Coal Board, have laid the foundations of a successful industry. I say to the Minister and the Coal Board, "Continue the good work. You are not building for the moment; you are building for all time."

6.51 p.m.

Mr. Edgar Granville (Eye)

I listened with great interest to the hon. Member for Clay Cross (Mr. Neal). I am not sure that he answered the most able debating speech of the hon. Member for Northwich (Mr. J. Foster) who compared the 1941 figures with those for 1948. When the Parliamentary Secretary replies to the Debate, I shall be most interested if he will tell us what were the actual figures of production per man hour in 1941 as compared with those for the past year. I hope that this Debate will show that we are not continually living in the past. I hope that hon. Gentlemen who represent mining constituencies, with their great knowledge of this industry, gained in some cases at the coalface, will not allow themselves to succumb to the temptation of living too much in the past, however unfortunate it may have been. Let all of us of all parties, try to face the future and try to build up this industry into a highly competitive and efficient machine which can compete upon an international basis in the markets of the world.

I have no doubt that the Coal Board and the whole organisation for the getting of coal will undergo a good deal of reorganisation in the years ahead. I have no doubt that we can make our contribution if we adhere to the principle that the final control rests in the House of Commons. I understand that my hon. Friends in the Opposition, if they are returned to power, will not de-nationalise this industry. I think the term used by them is "decentralisation" or "provincialisation." I should have thought that it would prove inevitable that we should give more provincial authority in this great industry. If it be that some of these nationalisation omelettes are not to be "unscrambled," then it seems that many of the problems of the nationalised industries will go out of the sphere of party politics as has happened, for instance, in the case of such questions as the nationalisation of the water supply, and so on. I hope to see a number of provincial universities endowing chairs for the important study of what will be, in many respect, the entirely new technique which we shall have to apply in correction with some of our nationalised industries.

The right hon. Gentleman the Member for Bournemouth (Mr. Bracken), in opening the Debate, quoted the great song which Sir Harry Lauder used to sing and which was used to great effect during the war—"Keep right on to the end of the road." The right hon. Gentleman did that for an hour and ten minutes, and he was followed by the Minister, who occupied another 70 minutes. That does not give the back bencher very much opportunity to do anything but keep right on until the end of the road. I thought that the right hon. Member for Bournemouth was trying to steal the thunder from the mining M. Ps. Also he referred to the depression which is ahead. After explaining to us the various American terms, he called it a "slide." I agree with him that coal is the basis of our competitive power. Indeed he said in his peroration that the only way that we can surmount these problems in relation to our standard of living, is by higher productivity.

I wish to appeal to the Minister to reconsider the question of petrol for the motorists. I appeal to him to tackle again his right hon. and learned Friend the Chancellor of the Exchequer. I could not help feeling when the Minister was making his speech, that he was reflecting the views of the Chancellor on the dollar question. I believe he said that the accent today in our national economy in a buyers' market is upon salesmanship, organisation and design. These factors will matter more than anything else if we are to hold our own in the export market. I believe that there has been a shift in emphasis in our national economy. I think that it would pay to give more petrol now to those motorists engaged in export and home business. I should like to see the Minister make an experiment. Despite what he said about the stock piles, I believe that if he gave extra petrol to the ordinary motorists, the man in business, the designer and so on, it would have a useful effect.

It being Seven o' Clock, The CHAIRMAN left the Chair, further Proceeding standing postponed until after the consideration of Private Business set down by direction of The CHAIRMAN OF WAYS AND MEANS, under Standing Order No. 7.

Mr. SPEAKER resumed the Chair.