SALT WORKS (COAL PRICES) (Hansard, 1 November 1949)

§ Mr. John Foster (Northwich)
I want to raise tonight a matter of some importance to the salt works of this country, and more particularly to those in the neighbourhood of Middlewich, Northwich and the Potteries. I raise it in connection with the service charge which has fairly recently been imposed by the National Coal Board.
I take as a typical example the case of the salt works known as Seddon's, Middlewich. It is fairly typical of the other works in the district, and is also typical of the effect this charge has upon them. In Middlewich Messrs. Seddon's works are adapted for taking coal by canal. Two works out of three are only adapted for canal-borne coal and the railway station is three-quarters of a mile away. In spite of the general assurance that the prices of fuel would not be raised this year by the Board, the fact is that in May two grades of coal which they use almost exclusively were raised by quite a considerable amount.
362 They depend for their supply on two Staffordshire collieries. Colliery "A" raised the price of fuel from 43s. 11d. to 46s. 3d. and colliery "B" from 41s. 11d. to 43s. 9d. This is apart from the service charge. In addition they were charged this so-called service charge of half-a-crown for road transport, 1s. 6d. for canal transport and 4d. if the fuel went by rail, thus making a total increase from the first colliery of 4s. 10d. to 2s. 8d. and of 4s. 4d. to 2s. 2d. from colliery "B." One should note that the canal charge was at first one of 2s., and the Coal Board at first maintained that the 2s was a necessary charge because it covered the actual cost but later they reduced it by 6d. Evidently this actual cost was not correct because there is no evidence that the actual cost did go down by 6d. during the time the complaint was made.
Previously pithead prices had not had any separate service charge and the National Coal Board had not provided any extra facilities since they were instituted. Therefore, the salt works maintain that, pithead prices having covered these facilities before, they should cover them now, because if a service charge is imposed it is an indirect way of raising the price of coal. There has been a meeting recently at which a good deal of confusion developed, because the National Coal Board seems to have stated at that meeting that the rail charge of 4d. was not really a service charge but was to cover the cost of answering complaints. They called it a distributive charge for general 363 services—invoicing, attending to complaints, etc. It was explained that the charges of 1s. 6d. for canal and 2s. 6d. for road included this 4d. distributive charge.
That is an extra complication, but it does emerge from this that if coal is taken by rail there is a considerable advantage. It can be got for 2s. 2d. a ton cheaper than if taken by road and for 1s. 2d. a ton cheaper than if taken by canal. But what is a works to do if it is only adapted for canal?
Again the National Coal Board have said that this is an intermediate step and that they are likely to change it. So that all that has to be done is to change the layout of the works and adapt it for road or rail and the charge of 1s. 6d. will be taken from the canal and put on the rail charges.
My only reason for raising this matter tonight is that I want the Parliamentary Secretary to the Ministry of Fuel and Power to explain why this service charge is imposed, what is the justificaition for it, and what extra service the National Coal Board are giving, which previously collieries did not give. I hope the hon. Gentleman will also remember in this connection that the salt trade has made a voluntary reduction in the price of salt. I mean by this that it could have got a higher price if it had wanted, but, in order to help the consumers of salt, it deliberately forwent a profit it could have made. I hope that it kept the export price up. In the light of this, it is unfortunate that there should have been this double increase later in the year—the increase in the price of fuel at the pithead, and then the addition of this service charge.
I appeal to the hon. Gentleman to look into this matter so that this burden on the salt trade may be alleviated. It is a trade which flourishes in my constituency, and has flourished there for many years. It deserves well of the country, for it is an export trade and a vigorous industry. We have a grievance that the men employed in it do not get enough to eat. They work hard and do not draw extra rations. That is a matter for the right hon. Gentleman the Minister of Food, but when one sees them shift eight tons of salt through four operations in 364 eight hours, and then move seven and a half tons of coal—which they have to go outside to do—it makes one wish they could get enough to eat. Coal prices affect the production of salt, and therefore I hope the hon. Gentleman will answer these questions.

§ Mr. Peter Roberts (Sheffield, Ecclesall)
I am very glad that my hon. Friend has raised this subject, because it is worrying people not only in the salt trade, but all over the country. The Minister has replied that these charges are made where the Coal Board are supplying coal not through a merchant. It is said that if the consumer went to a merchant he would be charged for this service, and consequently they are entitled to make a service charge. But there seems to be no co-ordination in this matter. It seems to be left entirely to the discretion of the sales officers of the National Coal Board. I have a case of a charge not of 2s. 6d. or 4s. 4d. a ton, but 5s., and that charge is authorised by the Minister of Fuel and Power.
There should be some arrangement whereby certain charges for putting a label on a truck or covering normal risks would be on a uniform scale. In the old days it was never more than 3d. or 6d. The National Coal Board cannot substantiate a charge of 5s.; it is really fantastic. What has happened is that the Minister has had the point brought to his notice that certain companies were getting coal without merchants' charge and that a service charge should be put on but it was not properly regulated and now the sales officers are putting on charges up to 5s. There is a complete lack of responsibility which the Minister should check. I hope these prices will be looked into and regulated all over the country. As far as possible, they should not exceed the actual charges for which the Coal Board are responsible.

§ The Parliamentary Secretary to the Ministry, of Fuel and Power (Mr. Robens)
There is a great deal of misunderstanding about these charges. If only for the reason that it gives me an opportunity of explaining to the House precisely what has happened during the last few months in relation to the sale of coal from the pithead, I think this Debate is worth while.
365 May I explain that up to 30th May of this year, colliery disposals were only done through the recognised channels. In other words, there might be a particular agent with sole rights for the disposal of a particular colliery's output. It might be that more than one agent had the right of disposal. But at all events up to 30th May the commercial channels that had been available were used. On 30th May there was a change, and the change was to give complete freedom to all purchasers of coal of over 100 tons a year to buy their coal direct from the National Coal Board, to buy it through a factor or handle their purchases themselves. There was complete freedom, and the sole agency arrangements were abolished. At the same time the pithead price was fixed. In consideration of that price, the Coal Board had to load the coal into railway wagons, weigh them, label them, hand them over to the railways for disposal, and advise the purchaser of having done so.

§ Mr. Foster
There is nothing new about that.

§ Mr. Robens
Of course there is not, but I am explaining what takes place. If the hon. Gentleman were a purchaser, he could, if he so desired, pay the pithead price and have those services rendered by the National Coal Board. If he did not take advantage of the services of the Board, he would either himself get in touch with the railways to move his coal from the pithead, follow the traffic, arrange for certain wagons to go to one place and others to another, check up with the Coal Board or colliery any weight shortages or things of that character, and, indeed, see his coal safely from pit to wherever he wanted it delivered. Presumably that would cost him something. How much it would cost him would depend on the circumstances of the particular transaction. It would be impossible for each to be uniform.
He might not want to do that for himself, and therefore he might get a factor to do it for him. The factor would do it willingly and charge him so much a ton for services rendered in taking up the coal and delivering it in the required quantities wherever it was wanted. Perhaps the purchaser would not want to go to a factor because, in his opinion, the factor's price was too high, and perhaps also he would not want to do the job himself. He 366 could then go to the National Coal Board and ask them to perform this service for him. The Coal Board would then tell him they would do it and the charge would be x pence per ton.

§ Mr. P. Roberts
How do they arrive at that charge?

§ Mr. Robens
The answer is that the National Coal Board will determine that charge in the ordinary commercial way as between the purchaser of the coal and the Coal Board delivering. After all, hon. Gentlemen opposite, in Debates in this House in which I have been privileged to take part, have been constantly telling me of the benefits of competition. Well, here it is. If a purchaser does not like the Coal Board's charges, he can get a factor to do it, or he can do it himself. There is free competition.

§ Mr. Roberts
That is a quite fantastic argument. In the case of the great contracts which have been in existence for many years without this service charge, the Parliamentary Secretary is now saying that the costs of the producing company must be raised because of the use of a factor or the National Coal Board. That is ridiculous.

§ Mr. Robens
I am surprised that the hon. Gentleman, who knows something about the coal industry, should imagine that at any time in the history of the industry it has been possible to convey coal from A to B at a cost of nothing at all. It must cost something somewhere. Whether it is paid at the pithead or shown under two or three separate items, it must be paid somewhere, and the new structure is that the pithead price has been fixed.

§ Mr. Roberts
It has been raised.

§ Mr. Robens
In certain qualities it has been lowered and in others raised. If we take those which have been lowered and those which have been raised, there is no gain to the National Coal Board. The increases and lowerings of prices were based on the fact that an increase in the price of coal in a lump sum on all qualities means that the cost of various qualities get out of balance.

§ Mr. Roberts
But surely where the previous pithead price included this cost, there has been a real increase, because obviously if it cost £100 at the pithead 367 before and it is £100 plus now, the addition must be the service charge.

§ Mr. Robens
Not necessarily so. The hon. Gentleman referred to the fact that certain coals were increased in price. I am now saying that certain coals were decreased in price.

§ Mr. Foster
Only the qualities we used were increased.

§ Mr. Robens
It is not being disputed that the price of certain coals has been decreased?

§ Mr. Roberts
The coal prices which have been decreased are those for very poor slacks which would accumulate in stock and would not otherwise be disposed of.

§ Mr. Robens
With respect, I say the Board are doing nothing of the kind. Stocks accumulate and are disposed of from time to time. There is nothing in relation to stocks being held which gives anybody cause for worry. The fact is that prices got out of balance during the war, because of flat increases in prices, and no one knows that better than the hon. Member for Ecclesall (Mr. P. Roberts). Obviously, certain high quality coals are out of balance with low quality coals. Of course, that is right. Now, we are putting that into line by raising the price of certain coals and decreasing the price of others.
We are now stopping the sole sales arrangement and allowing anybody buying over 100 tons of coal a year to buy it at pithead prices. They need not get the National Coal Board to service this coal at all. They can have a factor, or do it themselves. But the fact is that there are pithead prices. There is now competition between the Coal Boards, the factors and the individuals themselves in relation to the servicing of the coal from the pithead. I do not see anything wrong in that. It seems to me to be a good and sensible thing to do, and for the life of me I do not understand the complaints that are being made. If the charge by the National Coal Board is too high, do not get the Coal Board to do the job, get somebody else.

§ Mr. Foster
The complaint is that if the charge was 100 before nationalisation 368 for the pithead price with servicing, and the present charge is 100, the pithead price has been increased, because the service charge is put on top.

§ Mr. Robens
No, it is not so at all. The increases in the cost of coal have been occasioned more by the fact that wages and other things have increased than by any other reason. In the first year of nationalisation something like £63 million of increased benefits were given to the men who work in the industry. It is not a question of service charges being additional. All we have done is to fix the pithead price of coal. We leave it quite free for the purchaser to choose the individual to render him the service of taking that coal from the pithead to the place where he wants it. If he does not like what the Coal Board are charging, he does not need to get them to do it. He can get a factor or do it himself.
One point I must take up with the hon. Gentleman—and one admires his power of argument, in which he is well skilled—is that it does not follow, because it is 2s. 6d. a ton by road, 1s. 6d. by canal barge, and 4d. by rail, that the price when it gets to the delivery spot is more per ton by road than by rail. It all depends, does it not, on the cost of freight? Of course, it does. So that is rather a bad argument to make in relation to the instance to which the hon. Gentleman referred, that some salt factories were worse off than others because they had their coal delivered by road or canal as against coal with service charges at a lower rate per ton. It is the delivered price that counts, and many factors come into that. I hope I have explained this fairly clearly.

§ Mr. Roberts
What worries me is that the sales officers are given these powers and there may be grave abuses, with charges up to 5s. a ton or more, unless the Minister is prepared to do something about it.

§ Mr. Robens
That is interesting to me, because I know that hon. Gentlemen believe in competition as a means of putting a fair price against a service. If a sales officer of the Coal Board says to a purchaser that the service charge is 5s. a ton, all the purchaser has to say is "Do not give me this service. I do not want it. I am going to get a factor to do it more cheaply."

§ Mr. Roberts
He will charge the same price.

§ Mr. Robens
Well, let the purchaser do it himself. The fact is that there are plenty of opportunities for it. If the Coal Board prices are too high for servicing, let him do it himself. I do not know what the hon. Gentleman wants.
With reference to the specific points which the hon. Member has raised, obviously arrangements between one undertaking, which is purchasing, and the Coal Board, are matters of day-to-day administration. I am advised, however, that the West Midlands Region is at this moment discussing in the ordinary commercial way the charges with the salt federation concerned. I am certain that as business men on both sides, acting perfectly freely, 370 the salt people not being tied to the Coal Board, they will arrive at some reasonable arrangement in relation to prices. Therefore, I cannot see why this should be a matter of consternation to the hon. Gentleman. I should have thought that he would have come to this House and complimented us upon doing a useful piece of work, and upon letting this free competition flow along proper channels and so helping this industry and the people who purchase the coal to do some of the jobs for themselves if they do not like what the Coal Board are doing for them.