HC Deb 30 May 1951 vol 488 cc294-361

7.28 p.m.

Mr. Raikes (Liverpool, Garston)

I beg to move, page 1, line 18, to leave out "three hundred," and to insert "two hundred and fifty."

This is an exploratory Amendment and I hasten to say that we on this side of the Committee realise that in a Measure of this sort there must be a reasonable amount of borrowing facilities given to the Minister whoever the Minister may be. Realising, as we do, that the life of Government is so uncertain and that Ministers may change, this Amendment could apply quite as strongly to a Minister of Fuel and Power who came from this side as to one from the other side of the Committee.

Under the Bill, the Minister is asking for £300 million now as a sum that may be outstanding at any one time and be borrowed by him without reference to Parliament. That is a big sum and we on this side of the Committee feel, and I think that on all sides it is felt—I do not want to be controversial at this stage—that a figure of that sort needs very careful consideration before it is agreed to, in view of the very large figure involved. During the last five years, when the maximum borrowing power was £150 million, the Minister found it necessary to borrow only £33 million net. We are now faced, between 1946 and 1951, with a figure of £300 million instead of £150 million.

7.30 p.m.

If in any figures I quote I misrepresent the Minister in any way, which I do not intend to do, in respect of the case which he put forward on Second Reading, I hope that he will interrupt me at any moment, because obviously if we go wrong on the actual arguments that have made the Minister ask for £300 million, we shall vitiate from beginning to end the whole argument in respect of this Amendment. Owing to an accident, I was unfortunately unable to be present at the Second Reading debate, but I have studied it closely. I understand that the Minister's justification for asking for £300 million is first that under the National Coal Plan a figure of £635 million is envisaged, of which it is considered that three-quarters should be found by the industry through depreciation. That means that the Ministry have to find £160 million apart from the other expenditure to which I shall shortly refer. So, under the Plan, they have to find £160 million.

I will now deal with the other figures which turn £160 million into £300 million. The Minister pointed out that first he must repay the moneys which were borrowed from sums which were set aside for future liabilities connected with workmen's compensation. We ought to know a little more about that. I think I am right in saying that the Minister gave a rough estimate of £21 million for repayments in respect of these future contingencies, but he gave it only as a very rough figure. I think we have a right to know precisely how that £21 million should be split up.

That is not all, because beyond that the Minister, in his Second Reading speech, also said that an additional sum of money would be needed for working capital. I leave that aspect for a moment in order to deal with the figures on which he has been precise. We have the figure of £160 million. We have the Minister's figure of £21 million for future contingencies in respect of workmen's compensation, etc., which makes £181 million. Let us take the other figures which the right hon. Gentleman gave. He said that the £33 million already borrowed had to be repaid. I do not think that anyone would disagree with that. He said that on top of that, owing to the possibilities of inflation and rising costs, etc., although his precise figure would be £268 million, he wished to leave £32 million in hand in case there were rising costs. I shall deal later with the aspect of rising costs.

If these are his figures—£160 million on the Coal Plan plus £21 million in respect of workmen's compensation, plus £33 million which he has already had to borrow, the total comes to £214 million plus another £32 million for contingencies. That leaves £54 million for which the Minister is asking apparently for working capital. I do not know what the position is about that, but I do know that on the 1946 figures £24 million then appeared to be a reasonable figure for working capital. I know that prices have risen and that the pound has since then been devalued by His Majesty's Government, but I never like to exaggerate a case against His Majesty's Government. In fact, I prefer to understate it.

I do not think that the right hon. Gentleman will consider it unfair, however, if I say that the value of the pound in comparison with 1946 has depreciated to about 16s. in 1951. I put it very moderately. That is to say that the £24 million required for working capital in 1946 will presumably be represented by a figure of about £30 million now. But why is the right hon. Gentleman asking for £54 million on working capital? He gave no explanation on Second Reading. There maybe some mysterious reason that may have arisen in the meantime. My first two points are that we want to know how the figure of £21 million in regard to workmen's compensation liability in the future is obtained; and why we have so large a figure, apparently, as £54 million for working capital.

That is unfortunately not the whole story, because this figure of £300 million appears to us on this side of the Committee—and I do not think only to us on this side—to be very large, and for three reasons. I have already touched on the first, which is that during the last six years, while the Minister had power to borrow up to £150 million, he has borrowed only to the extent of £33 million net. But the other two reasons which I propose to adduce to the Committee are more important than the first one.

The second reason is that in the last year the general international situation has altered very greatly, and as a result of the alteration—[Interruption.]—my hon. Friend must not tempt me to deal with the international situation, or I shall make a very violent speech, which I do not intend to do. It seems to be extraordinarily difficult for the Minister to have any idea of the amount of steel which he is likely to obtain under present conditions for the requirements of the Coal Plan. What has happened during the last year or 18 months has knocked the National Coal Plan completely out of date.

We were told only two or three months ago by the Minister of Supply that there may be a shortage of steel during the next 12 months as a result of the rearmament programme. I think there will be. Added to that, steel has been nationalised in the meantime—but I must not be controversial; I merely state facts. While it would be improper for me to go into the matter, it is nevertheless the case that the Colombo plan, which we all welcome, means a further drain upon our steel resources. So we we are faced with the fact that what might have been obtained in the way of steel for the National Coal Board a year, eighteen months or two years ago, becomes extremely unlikely to be obtained in the years which lie ahead.

The Minister envisages soaring prices, and that is why he has allowed himself that £32 million over and above the £268 million he had in mind. Rising prices, resulting from devaluation and the additional cost of re-armament, are surely almost impossible to calculate at the present time—in fact, I would say they are quite impossible to calculate. We are therefore faced with the situation that the figures which, without soaring prices and without re-armament, might have appeared not unreasonable for the National Coal Plan over the next 10 years, are today completely vitiated. In view of that, we are entitled to ask the Minister to answer a number of questions before he endeavours to borrow on so very large a scale.

I touched on steel. What, under rearmament, is to be the priority for steel for the mines? I question whether even the persuasiveness of the right hon. Gentleman—and he is very persuasive—will result in his finding that the steel needed for sinking new shafts, and so on, is very high on the priority list; and if it is not, the whole set-up of this Coal Industry Bill is knocked endways. The argument has been that the Minister must have power to borrow the £300 million in view of the fact that he needs to borrow rapidly. But if we are not to get the steel, the argument that he has to borrow big sums very rapidly disappears. It is a deplorable thing that it should be so, but we have to be realistic and we have to face the world situation as it is at present.

It is important that the Minister should give us a little further information regarding the sinking of new pits. If prices are to continue to rise at the rate at which they are rising at the present time, the right hon. Gentleman might not find it economical to sink anywhere near the number of new shafts which the Coal Plan envisaged. I know as well as he does that one of the vital essentials in the Reid Report was the sinking of new pits. I should be the last person to disagree with that, but the fact remains that even during the last five years the number of new shafts has not been enormous. I am not being controversial about it. I know it is said by hon. Members opposite that, after all, we may not have sunk as many new shafts as might have been expected but, at the same time, we have not been closing down pits, and so on. But that is irrelevant to the argument which I am putting forward.

It was stated by my hon. and gallant Friend the Member for Fylde, South (Colonel Lancaster), on Second Reading that if we compared the number of new shafts sunk between 1946 and 1951 with the number sunk in the 20 years between the wars, the figure would be somewhere about one-third. I do not know whether he was right or not, but I think the right hon. Gentleman should give us some indication of the proportion, because it would give us some idea as to the comprehensive plan of the Government in spending money in the sinking of new shafts in the years that lie ahead. If my hon. and gallant Friend is right, and the figure is about one-third of the average pre-war figure, it is likely that that figure will be reduced rather than increased.

7.45 p.m.

If we are not to have new shafts or the steel, what is the argument for increasing the £150 million to £300 million at the present time? My hon. and gallant Friend the Member for East Grinstead (Colonel Clarke) was rather mocked at when he suggested on Second Reading that before a very large additional figure was embarked upon, the National Coal Board should consider disposing of a certain number of the non-coal assets which they had bought. He pointed out that the coal industry is nearly the biggest agricultural landlord in Britain. The figure of the Board's acreage is about 60,000.

Hon. Members opposite pointed out—and I always think we should consider arguments from both sides—that a good deal of this agricultural land was necessary for the Coal Board in order that they should avoid the payment of compensation for subsidence. I quite realise that the National Coal Board have to keep a good bit of agricultural land in the neighbourhood of pits for that purpose, but can it be said that it is necessary for the Board to become practically the largest landowner in the United Kingdom in order to do that?

I suggest to the right hon. Gentleman, in the most friendly spirit, that by disposing of a reasonable proportion of the farms he possesses, amounting to some 18,000 or so, he could raise a few million towards his borrowings. I suggest also that where the question of subsidence does not arise, if the National Coal Board—who are not terribly interested in agriculture except as a by-product—were to get rid of a good deal of the territory they own, it is conceivable that not only would they get money to put towards part of their borrowings, but that the land might be worked a little better than it is at the present time and a little more money put into it.

Having put forward those bald arguments which need answering, I would say that we have moved this Amendment in a very moderate way. We realise that borrowing has to be done on a considerable scale, in spite of difficulties over steel and increasing prices; but we suggest that the figure should be £250 million, and if the Minister goes above that figure he should have to come before Parliament to explain why it is necessary to go above a figure which is £100 million higher than the original figure of £150 million on which he borrowed only £33 million between 1946 and 1951. That would give us an opportunity of discovering whether, in fact, the extra borrowing was due to soaring prices, or whether there had perhaps been a little improvidence in the Ministry itself.

After all, we have learned over a period of time that no Ministers are entirely perfect. Supposing the right hon. Gentleman got drawn away by certain of his colleagues to expend the money, having got it with a blank cheque—because this is a blank cheque up to £300 million—

Mr. James Glanville (Consett)

A lot of this money would not be required today if the private owners had done their duty in the past.

Mr. Raikes

I understood that one of the great advantages of nationalisation was that we were going to improve vastly upon the sort of thing done by the private owners. Surely, the hon. Gentleman is not going to criticise me for endeavouring maybe to improve on the situation that existed before nationalisation, and to ensure that his Minister should be kept under closer control than was the case in past days?

I am not being controversial—at least, not more controversial than I can help—but if the Minister goes beyond the £250 million and has to come to Parliament to ask for more, we shall only re-establish the principle of Parliamentary control over big sums. We are giving him a pretty big sum when we allow him £250 million at any one time before having to come to Parliament for more. Someone might whisper to him, "If you cannot get the steel, why not try an egg scheme, not in Gambia, but somewhere else?" Supposing he were allowed to try to do that without having to come to Parliament, would anyone consider that a good thing?

I suggest that in view of the present condition of the world, we are right to try to limit high borrowing, without, at any rate, some Parliamentary control which would ensure that if there were real improvidence it might be checked before it became disastrous. Such control would not be of a nature that would hamper a Minister, whether he came from the other side of the Committee or from this side.

Mr. Blyton (Houghton-le-Spring)

I listened to the speech of the hon. Member for Garston (Mr. Raikes) with great interest, and to his argument about Parliamentary control with particular interest. I wish he would address that argument to some of his friends who were recently at Strasbourg with me and who wanted to hand over the coal and steel industries of this country to a supranational Continental authority. Those same people are now arguing about one or two million pounds when, if they could have had their way, they would have handed the industry over to alien hands.

This Bill deals with the second part of the programme for the nationalised coal industry. It is as well to remember that it was brought in after the issue of the Report of the Committee under the chairmanship of Sir Charles Reid. The members of that Committee are well-known engineers, but they are not Socialists. I know one of them very well. We had many arguments with him as a coalowner. He was a good engineer, but he was not a Socialist. I will read an extract from that Report concerning capital expenditure. I think it ought to be read, because it gives some indication of what the friends of the Tory Party thought the cost of this would be in relation to capital expenditure. On page 120, it says: It is quite evident to us, from our study of the recent history of the industry, that a general failure to plan far enough ahead has, indeed, been one of the most obvious handicaps to which the British coal industry has been subjected. A vast programme of reconstruction of existing mines and the sinking of a number of new ones is now required, and the importance of avoiding the mistakes of the past, and of providing for the efficient lay-out of the underground workings and the orderly disposition of surface buildings, should need no emphasis. In the words of that Report, we have got to plan far enough ahead in the British mining industry if we are to run that industry successfully.

Referring to capital expenditure, which is the issue we are debating tonight, the Report says: For these reasons we do not consider that the information we have available is adequate to warrant an assessment of the total cost of reconstruction of the industry on the lines we have suggested in this Report; and we do not believe that the estimates which have appeared from time to time in the Press, and which have ranged from one hundred to three hundred million pounds, are capable of verification without a great deal of detailed work, and accurate information on a number of important factors which is not at present available. It then proceeds to say: All we feel justified in stating, therefore, is that the total cost will necessarily be very heavy, but that, on the other hand, it will be spread over a considerable number of years. We are told by mining experts—and the Conservative Party have always regarded Sir Charles Reid as one of the most eminent—that unless we embark on huge capital expenditure, regarding which they could not define a figure, this industry could not be rebuilt. We are asking today that the borrowing power should be up to £300 million. Since the estimated figure given by the Press was published—a figure which Sir Charles Reid could not define—the cost of raw materials and mining machinery has enormously increased. That being so, we must agree to a reasonable figure of capital expenditure to cover that cost.

The hon. Member for Garston talked about £21 million for miners' compensation. Surely that sum is entitled to be paid over. After all, we took over the liabilities of the coalowners regarding the men injured in pre-nationalisation days and who were still disabled. Are they not entitled to their compensation?

Mr. Raikes

The hon. Gentleman must know, if he listened to my speech, that I never suggested that the £21 million should not be repaid. All I said about that sum was that it was given as rather a vague estimate by the Minister in his Second Reading speech on future contingencies which had been borrowed on for miners' compensation and other matters. I suggested it would be advisable that we should have quite clearly from the Minister the precise amount which had been borrowed for the future contingencies of miners' compensation and other matters. I never suggested it should not be paid, and I do not suggest that now.

Mr. Blyton

I was about to suggest that we on this side of the Committee would like to have a detailed report of the compensation paid to the coalowners. It is a charge on the industry. We have paid millions for mines that are now out of existence and for some shoddy stuff in various parts of the country. Therefore, it ill becomes the Opposition to argue about the question of £21 million in connection with workmen's compensation.

8.0 p.m.

Colonel Crosthwaite-Eyre (New Forest)

I think the hon. Member is misleading the Committee. The point is that the Minister of Fuel and Power has taken this £21 million which was available for National Coal Board workmen's compensation and has used it for other purposes. He had no authority to do so and now is seeking authority to retain it.

The Minister of Fuel and Power (Mr. Philip Noel-Baker)

I must make a correction. As I said on Second Reading, I have done nothing about it. This fund for workmen's compensation belongs to the Board. They have used it temporarily and, later, will themselves have to replace it. I have no authority in the matter. They have used it for capital investment, I think very rightly in the interest of the nation; they should use such internal resources as they have to finance themselves without adding to their borrowing.

Colonel Crosthwaite-Eyre

Surely the Minister, before he authorises repayment of this money, will ask the Board under what authority they spent it for capital development.

Mr. Noel-Baker

We must make sure they are going to repay it to the compensation fund but I cannot think what they did was very improper in any way whatever; rather on the contrary. It was their money.

Mr. Blyton

We, the miners, are entitled to say that our people who were maimed and lamed in the days of private enterprise are to get compensation. If there is to be any dissection I suggest then that the compensation to the owners should be dissected as well.

Mr. Brendan Bracken (Bournemouth, East and Christchurch)

It is not worthy of the hon. Member to say people were killed under private enterprise, in the light of the terrible tragedy we have seen under the nationalised coal industry. Let us forget these dirty jeers about private enterprise.

Mr. Blyton

I do not want to get into controversy. Had not the question of workmen's compensation been raised by hon. Members opposite I would not have mentioned it. I advise hon. Members to go into the coalfields and find what the men said about the coal owners compensation committees in the old days of the Act dealing with compensation which was passed by the party opposite in 1924.

I want to impress upon the Minister that it is essential the Cabinet should recognise that whatever may be the claims of re-armament we cannot re-arm unless we get a sufficiency of coal to ensure that we obtain the weapons we need. When we took over the coal industry we had to face the fact that we were carrying uneconomic pits which were losing at the pithead. We took those over from private enterprise. They cannot be carried for ever, even under nationalisation. We must have new sinkings so that we can close uneconomic pits and can concentrate mining and re-organise it to secure all the coal to meet the needs of the nation.

As logically as I can, I press the Minister to make it understood to the Cabinet that if we are to have a successful re-armament policy we cannot do it at the expense of neglecting the mines and depriving them of the machinery needed to ensure the required coal production. During the last war the Government had to undertake capital expenditure to obtain machinery from America. Any amount of American machinery was brought in to help in that war. In the present serious international situation when we have had to adopt a re-armament policy it is essential that the mining industry should obtain the spare parts and machinery to maintain output in the days ahead.

We ought to give the powers asked for in this Bill. We are asked to authorise the Coal Board to spend up to £300 million. In a long-term plan it is necessary that the National Coal Board should have capital to develop and modernise the pits. We need cleaning plants by the score and we need new sinkings. That means we must have new mining villages and houses. Therefore, a huge expenditure is involved in this national plan. The Reid Report says it was because the industry was denuded of capital in the inter-war years that British mining did not reach the level of technical efficiency which existed on the Continent. I ask tonight that we should not get back to those days and that we should give the Coal Board a sufficiency of capital to ensure the development of this industry in the days ahead.

Colonel Lancaster (South Fylde)

If I may say so, I think that in the speech of the hon. Member for Houghton-le-Spring (Mr. Blyton) there was a mixture of rather wide rambling and a good deal of common sense. I do not think it is necessary to bring in the Schuman Plan or to make a point about the global sum of compensation. Not a fraction of that sum has been paid up and we are getting towards the fifth year of the period.

When the hon. Member got to the point of saying that in the light of re-armament requirements he hoped the industry would have a high priority, he was talking very good sense of course. But unless we as a Committee hear from the Minister that, in fact, he has that high priority and he can be assured of the steel and machinery required to carry out this capital expenditure I cannot see that the arguments put forward by my hon. Friend the Member for Garston (Mr. Raikes) in moving this Amendment are not germane. It is asking more than that to which the Committee should be prepared to agree to ask that we should give the Minister a blank cheque to spend this very large sum of money without any assurance that he has any reasonable possibility of spending it in the near future or during the decade that lies ahead.

I cannot claim to have the ability to assess this matter as precisely as the hon. Member for Houghton-le-Spring claimed to be able to do. Three hundred million pounds is a very large sum of money. Whether the capital requirements may or may not amount to that, what we are concerned with is whether there is necessity for a blank cheque up to that amount straight, away at this moment. We feel very strongly that there is not that necessity, that Parliament should carry out its duties in this matter and that we should give what we consider a reasonable amount. No one can say that £250 million is not reasonable.

If the Minister finds he can spend at the rate of £300 million—and we all hope he can—then he can come back to Parliament to say, "Despite the doubts in the minds of hon. Members opposite when the matter was debated, I have had the priority and have been able to obtain the steel and machinery and the various requirements to make this capital expenditure a practical possibility. Therefore, I want the capital advance now to pay for this very large development and reconstruction plan."

I am certain that we on this side of the Committee would be only too anxious to meet the Minister in his reasonable requirements, but we are by no means satisfied that as the matter now stands a case has been made out for this very large amount. In consequence I strongly support my hon. Friend in his reasonable suggestion that we should cut this amount to a round figure of £250 million, with the assurance that if more is required the Minister should return to Parliament and make his claim which, as I say, I feel certain will be met by both sides of the House.

Mr. Ellis Smith (Stoke-on-Trent, South)

I hope that this Amendment will not be accepted. In the area which I have the privilege to represent I have never known the relationship between all sections of the mining industry to be better than it is today. Output is better than ever, and records are being made by pit after pit. I hope that uncertainty will not be introduced into an industry that has now proved itself. The nationalisation of the mining industry has already been proved an overwhelming success by the concrete results that have been produced.

Mr. Nabarro (Kidderminster)

Did the hon. Member say "concrete"?

Mr. Smith

Yes. In our area large capital expenditure is at last taking place. New shafts are being sunk, and the mechanisation of other pits is being carried out. New machinery of all kinds is being introduced, resulting in a dynamic atmosphere that has never been known in the industry before.

Relatively speaking, the output of this area will have to increase at a greater rate than in any other area in the country. It will, therefore, be understood why I, for one, am very concerned at any proposal which introduces uncertainty. It is necessary that there should be the most complete and maximum confidence in the industry, and also that this industry that is now giving such good results should have the wholehearted support of every section of the community. Britain's success, in the main, is based upon the output of its mining industry. Up to now, although science has made great progress, we have not yet eliminated the need for using coal as the principal motive power in our country.

If we are to bring about an enormous increase in production, as some are hoping, so that we can maintain and even improve our standard of living, it is necessary that the maximum amount of capital should be sunk in the mining industry to secure the desired results by means of science and mechanisation instead of by the expenditure of human energy as has been the case in the past. Therefore, it would have been wrong for those of us who represent mining areas to have accepted proposals for introducing uncertainty into this industry.

8.15 p.m.

There is another aspect about which we are bound to be concerned. Anyone who has studied the national plan must realise that old shafts and old pits will have to be closed when it is no longer a business proposition to operate those shafts or when men can be better employed elsewhere using their skill and energy to obtain better results. It is calculated that within the next 10 years at least 3,000 face workers will be required in our area. In addition, it has been found as a result of the survey that while other areas will get worked out in regard to specialised coal, like coking coal, there are large amounts of it in the North Staffordshire area, which means there will have to be large capital expenditure in that area in order that we cannot only extract the coal but change the coal so that it can be used in the manufacture of steel.

In addition, the steel industry of Canada is to be developed, and they are looking to North Staffordshire and other places to supply them more regularly, so that oil and other freightage comes one way and coking coal will go the other way. It would, therefore, be wrong to reduce by a penny the proposed amount that the Minister has the right to use in the way that the Bill indicates.

My only doubt is whether the amount is enough. I am supported in that doubt by several very informative articles that have appeared in "The Times," especially in the financial columns of that newspaper. The financial editor of "The Times" has on several occasions, when making an analysis of the proposed capital expenditure in the mining industry, expressed doubt as to whether that sum is enough, having regard to the fact that the coal plan is available for us to study and bearing in mind that it is proposed that within 10 years an enormous increase in output should be brought about. Doubt has been expressed whether the amount at the disposal of the Minister is sufficient to enable this plan to be carried out.

While it is only right that we should use our democratic rights for the purpose of bringing out ideas, making our various contributions and providing the Minister with an opportunity of making statements, at the same time I hope that no speeches will be made that will introduce any uncertainty into the mining industry, because that industry, with the magnificent contribution it is making to Britain's economic recovery and the Herculean efforts which are made by the miners particularly during weekends, deserves the wholehearted support of us all, and I hope that no uncertainty will be brought about which will cause concern among those who are rendering such great service.

Mr. Nabarro

The hon. Members for Stoke-on-Trent, South (Mr. Ellis Smith), and Houghton-le-Spring (Mr. Blyton) seem to have confused the meaning of the word "uncertainty" with the words "public accountability." There is no intention on the part of any Member on this side of the Committee to introduce any element of uncertainty in regard to capital advances to the coal industry. I think there is almost unanimity in all quarters of the Committee that a measure of increased capital is required in the coal industry in accordance with the National Coal Plan, but surely when that new capital is provided it should be subject to the closest public scrutiny and the highest degree of accountability that any Member on either side of the Committee can give it.

Mr. Ellis Smith

I accept that, but why is it proposed to reduce the amount?

Mr. Glanville

Hear, hear.

Mr. Nabarro

I am glad the hon. Member says "Hear, hear," because, I repeat, it indicates that many hon. Members opposite seem to misunderstand the inference of this Amendment. The inference and the importance of the Amendment is that by reducing the sum by £50 million it automatically reduces the period during which public accountability can be given to Parliament. That means that we can review the sum of money expended on capital account by the National Coal Board at shorter intervals. I believe that is important.

Mr. William Ross (Kilmarnock)

Why £50 million?

Mr. Nabarro

If the hon. Gentleman will permit me, I shall pass to a few general remarks on the sum which has been chosen by the Minister in this Bill—the sum of £300 million, representing a doubling of the sums he was permitted to advance to the National Coal Board under the Coal Act of 1946. In the Second Reading debate, as reported in column 915 of HANSARD, I asked the Minister if he would give me further details of what part of the £150 million was attributable to increased costs of equipment and operation by the Coal Board and what part of the extra £150 million was attributable to capital development under the Coal Plan. I am sorry to say that the right hon. Gentleman side-stepped and evaded me question and gave no answer at all. I shall quote phrase by phrase and word by word what he said, and when he replies to this Amendment I hope he will be a little more specific and will make a real endeavour to answer my question, which is a very important question. The right hon. Gentleman said: The sums in this Bill are calculated on the basis of the sums to be invested under the National Coal Plan—£635 million. Nobody will quarrel with that, and all of us have read the Coal Plan. The hon. Gentleman continued: That real investment, real equipment, machinery, and so on, is based on 1949 prices. Nobody will quarrel with that; it is a reasonable yard-stick to take the prices of the year before last. The hon. Gentleman went on: As I explained in my original speech, that would probably require—it is all a matter of judgment and forecast, advances from me to the Board of up to £268 million. Therefore the limit of £300 million allows a margin for rising costs."—[OFFICIAL REPORT, 30th April, 1951; Vol. 487, c. 915.] But he does not answer the question—how much out of the £300 million is inflation in the cost of equipment and operation and how much is development. I hope that when he replies to this Amendment he will make an effort to answer.

I want to compare that figure of £268 million with what the Coal Plan itself says about it. If the right hon. Gentleman has a copy of the Coal Plan readily available, would he please turn to Section 19 where it says that out of the £635 million to be spent over 16 years at the rate of £40 million a year, three-quarters will be supplied by the Board's depreciation provisions, but a quarter will need to come out of borrowings from the Minister of Fuel and Power. Therefore, out of the £635 million, roughly £160 million only is to be borrowed by the Coal Board from the Minister. According to the Coal Plan it is £160 million over a period of 16 years.

But in this Bill, the Minister is providing £150 million of additional borrowing facilities, so that it follows that under the Bill he is providing sufficient finance for capital development under the Coal Plan for the whole industry for 16 years ahead. Surely that is giving him far too wide a measure of jurisdiction. In this year of grace 1951, I do not want to try to legislate for what that Minister of Fuel and Power or any other Minister of Fuel and Power may deem is necessary for the coal industry in the year 1964. I want public accountability at intervals of two years at the very most, and I do not think this Committee should vote to the Coal Board, in legislation which they pass, any sum of money which covers more than a two-year measure of control of the sums required for capital development. I hope the Minister will deal with that point when he replies to the Amendment.

May I pass to just one other point—the question of the £21 million of workmen's compensation. The hon. Member for Houghton-le-Spring seems to think that my hon. Friend the Member for Garston (Mr. Raikes), who referred to the sum of workmen's compensation used by the Coal Board for development purposes, was making an attack on the principle of workmen's compensation. He did nothing of the sort.

If the hon. Member for Houghton-le-Spring had any experience at all of good business and accounting practice, he would Know that the best private and public companies preparing their accounts have one separate banking account which deals with day-to-day general requirements, another banking account into which they place the sums deducted from employees' wages for P.A.Y.E. so that that sum of money is always sacrosanct, and another banking account into which is paid the sums provided for holidays with pay, and so on, and the Coal Board ought to regard as completely sacrosanct sums of money which are set on one side for workmen's compensation purposes. This fact has emerged from the Second Reading of the Bill.

I say—and I hope I shall not give offence to the Minister, for he is primarily responsible—that I regard it as highly immoral that workmen's compensation moneys should be used by the Coal Board for capital development. It is no use the hon. Member for Houghton-le-Spring grinning.

Mr. Blyton

Perhaps I may inform the hon. Gentleman that the old Coal Owners' Association always invested the capital of the compensation when they ran the Compensation Act.

Mr. Nabarro

Surely the hon. Gentleman understands the difference between investment and appropriation. It is wise to take any sum of money lying idle on any account and to invest so that it may earn income, but it is quite another thing for the undertaking to use that sum of money for capital development purposes. [HON. MEMBERS: "It is an investment."] It is not an investment; it is a case of using that money for a purpose for which it was not provided, and I believe that is a highly immoral form of accounting and that the National Coal Board should not be allowed to conduct their finances on that basis. I hope in his reply the Minister will at least give us a more satisfactory explanation of these matters than that which he provided on Second Reading of the Bill.

The Parliamentary Secretary to the Ministry of Fuel and Power (Mr. Neal)

I should be insincere if I did not acknowledge the genuine but somewhat unsuccessful attempt of the hon. Member for Liverpool, Garston (Mr. Raikes) to be uncontroversial in moving the Amendment, but I can assure the House that I shall attempt to reciprocate that feeling in the reply I am about to make. First, we must remember that in dealing with the question before us we are dealing with something which will be vital to the economy of this country for many years to come. Unless we can achieve the maximum output of coal over the next 10 to 15 years, the economic outlook will indeed be disastrous. That is the real reason these borrowing powers are necessary for the stated amounts.

In the course of the Second Reading debate, my right hon. Friend said that the figure of £300 million represents the capital advances that will be needed by the National Coal Board if they are to implement their National Plan for Coal in the next 15 years. He explained in some detail how this figure was related to the proposed capital expenditure of £635 million by the Board over that period. There can be no doubt that £300 million is in fact a modest limit to the Board's borrowing powers if they are to achieve the aims they have set out in the Coal Plan. Any reduction in the figure will inevitably jeopardise its success. [HON. MEMBERS: "Why?"] I will explain later.

8.30 p.m.

In proposing such a reduction, hon. Members are, in effect, asking the Government to run the risk of failing to maintain our major national industry at the level of production that the country's economy is expected to require. Hon. Members do not, I know, question the need for a long-term plan, but, as my right hon. Friend said in the Second Reading debate, it must be a long-term plan, and we cannot have a plan in "five-yearly packets." All businesses, like the National Coal Board, have to look ahead and try to arrange in advance to meet customer's demands in the future, and in coal mining the need for taking the long view has always been specially important.

Here I come to some of the points raised by the hon. Member for Garston. He asked how many new pits the National Coal Board had sunk since nationalisation. The answer is that one pit has been sunk; and we have, of course, continued the pre-nationalisation projects of new sinkings. But I would remind him, when he is making comparisons, and quoting the hon. and gallant Member for Fylde, South (Colonel Lancaster) about the sinkings that were made before the war, that, to the best of my recollection, in the 15 years before nationalisation only one pit was sunk by private enterprise. [Interruption.] It is true. If the right hon. Gentleman the Member for Bournemouth, East and Christchurch (Mr. Bracken) says it is not true, let him controvert that by presenting me with the names of collieries that were sunk in the last 15 years.

Mr. Bracken

Pits are not the same as collieries.

Colonel Lancaster

May I interrupt? I sank four shafts myself during that period. I cannot, with the best will in the world, turn four into two, and that is twice what the hon. Gentleman has mentioned; and there must have been a few more apart from those.

Mr. Neal

We all know that a shaft is not necessarily a colliery. Under the National Coal Board's plan the National Coal Board is intending to sink 22 new pits.

Mr. Pickthorn (Carlton)

In what period?

Mr. Neal

In the next 10 or 15 years. The Board's Plan envisages only the next 10 or 15 years. Pits of the nature and type it is intending to sink will cost considerably more than they did in the pre-war period. I believe it is correct to say that pits were sunk in pre-war days for about £1 million, but pits of the type and size that the National Coal Board envisages in its Plan will doubtless cost £5 million.

It will take sometimes up to 10 years to sink a shaft and to get a pit into full production. Sinking pits, as those hon. and right hon. Gentlemen who are familiar with the coal industry will know, is not like opening a shop or opening a factory. One cannot put the goods on the shelf and immediately ask the customers to buy. To some extent we have suffered in the past from lack of planning in new sinkings and extending coalfields.

I think that it will be generally agreed that in the years of bad trade before the war, many colliery companies just had not the money to do the things which they would have liked to have done to put the mines in a position to meet all the demands that are before them today. The Report of the Reid Committee in 1945 showed how badly we had fallen behind other coal-producing countries in the race of technical progress, and how great was the need for an extensive programme of reconstruction and modernisation in the mines of Britain. "There is no time to be lost," they said.

The annual Reports of the National Coal Board show that they have not indeed been letting the grass grow under their feet in the early years of nationalisation while waiting for a national plan to formulate. They have gone ahead with a heavy programme of investment. I wish I had the time and that it was considered relevant to this debate to tell the Committee of so many of the things the National Coal Board have done in reorganising the pits in the different coalfields. Over £100 million has been invested in the first four years of nationalisation, and projects costing another £68 million had been approved up to the end of 1950; but all these projects will be needed simply to prevent the output of coal in the various coalfields from dwindling below minimum needs and to prevent costs from rising.

Each year, coal has to be taken from deeper, thinner and more difficult seams. Now, however, the Board are getting to a point where more doubtful projects have to be considered. It might pay the country better if they were sited in one coalfield rather than in another, and that is where the need for the National Plan comes in. Costs of production, as well as costs of transport to markets, vary from place to place, and so do the qualities and kinds of coal produced, and these factors must be weighed up and a careful balance struck.

The Plan suggests the need in the next 10 or 15 years for a very heavy capital investment in the mines and associated industries of £635 million at 1949 prices. The Plan is now under consideration by the Government, and it may yet be modified, but there is little doubt that the investment in the coal industry will need to be of this order. In large part, as my right hon. Friend explained in the Second Reading debate, the money will be found out of the Board's own revenues from the provision made each year for depreciation. Part of the money, however, will come from money borrowed from the Government.

The Board's Plan suggests how much of the total sum shall be spent in each coalfield and what should be the annual output of coal from each. In all, the Board expect that 240 million tons a year will be needed from deep mines. Last year, the deep mines produced about 204 million tons of coal, and some 12 million tons were produced from the Government's opencast sites. Opencast mining will, of course, disappear as the National Coal Plan matures, so that the Board are planning to expand output by one-fifth. I do not think that hon. Members opposite will say that that is too high a target to set.

The Board's task would have been much easier, and they would have been able to show much bigger reductions in costs, if they were planning to keep the industry at its present size. The bigger the industry, the more of the difficult and less accessible seams of coal have to be worked, but the Board's task is to try to foresee that the nation's demands will be met, and do their best to meet them. In that respect, I want to stress the point that we are discussing tonight—essential investment in Britain's major industry, investment that is necessary to ensure that this great industry can play its proper part in the Nation's economy. On such an issue, it would be irresponsible to risk not meeting the country's minimum requirements.

Let me say a word or two about the results of the Coal Board's Plan. The Board have estimated that the measures associated with the Plan, and they alone, should lead to a saving of 7s. per ton on 1949 values. This, of course, makes no allowance for any changes in the value of money which may occur. That 7s. will represent between £70 and £80 million a year, but the Board look forward even to further improvements from measures outside the Plan. It would be less than fair to the industry to suggest that this will be an easy task.

Great inventions in machinery and revolutions in technique of timing have taken place in the past, but always it has taken a long time to apply them on a wide scale in the mining industry, and often their scope has been limited to particular seams in particular places. But hon. Members can be assured that the Board are set, not only on securing the production that the country requires, but on doing so by the most efficient and economical means.

The Plan aims to secure the increase in output mainly in parts of Scotland, East Durham, Yorkshire, East Midlands, North Staffordshire, South Wales and the small coalfields of Kent. It does not seem possible, unfortunately, to avoid the decline in the central coalfields of Scotland, in West Durham, the older parts of Cannock Chase and the small coalfields in the Forest of Dean and Somerset. This plan which the Board have drawn up is a flexible one. It will, of course, be repeatedly revised in its details as more becomes known about reserves of coal, as new developments occur in mining techniques, as new inventions prove themselves, and as trends in demand and in manpower declare themselves unmistakably.

The investment, therefore, of £635 million over 15 years, which is what the figure of £300 million confirms, does not commit the Board to a set line of development. The Clause before us does not say that £300 million shall be advanced to the Board, but only that it may be advanced to the Board. What it does do, and what must indeed be done, is to ensure that the Board can borrow the amount that seems necessary, on any sober calculation, if we are to achieve the coal production required. That is why we must offer opposition to this Amendment.

The reduction in the Board's borrowing powers of one-sixth obviously must create a reduction of one-sixth in the calculated output by 1960. [HON. MEMBERS: "Why?"] If we have a given amount of money to be used for the specific purpose of raising coal by 40 million tons in 15 years, and we want more money to develop it, it is fairly obvious that the amount of coal is going to be reduced.

I am really surprised at the alarm which the Opposition appear to create when they describe this as a staggering sum of £300 million. When I first entered this House, I can recollect being invited by a Member of the Opposition, who was then and is now considered to be an expert mining engineer, together with other of my mining colleagues, to support a proposal to borrow £300 million from the Government for the development of one county coalfield. Here is a plan of £300 million for the entire British coalfields.

The right hon. Member for Bournemouth, East and Christchurch, in one of his isolated moments of clarity on the Second Reading debate of this Bill, used these words: In my judgment Britain rose to greatness through coal and, through coal, Britain will return to prosperity."—[OFFICIAL REPORT, 30th April, 1951; Vol. 487, c. 873.] I heartily concur with those sentiments. I think that they were never more true than they are at the present time. Coal is the only raw material that we have in great quantities. Either we provide enough money to maintain and expand output, or we can speedily contemplate a lessening of production in our main industries and a lessening of our standard of life. It is for these reasons that we cannot accept the Amendment.

Mr. Bracken

I think that I can retort in a kind of way to the rather crude remarks made by the Parliamentary Secretary in his not particularly well-read Departmental brief. There were no isolated moments of clarity in the hon. Gentleman's speech because he could not even read out the impeccable language of his civil servants. He has treated the Committee tonight with great contempt. He asks hon. Gentlemen behind him, as he asks us, to think of a number. That is his form of mathematics.

Mr. Emrys Hughes (South Ayrshire)

That is the right hon. Gentleman's Amendment.

8.45 p.m.

Mr. Bracken

The hon. Member for Ayrshire, South (Mr. Emrys Hughes), has told me that he is going to speak later. I am looking forward to the speech of the archdruid of Scotland, but, meanwhile, I hope that he will not interrupt. There were two quite interesting speeches this evening, and I am looking forward to the reaction from Mr. Homer tomorrow. The hon. Member for Houghton-le-Spring (Mr. Blyton) and the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith) will cause some quarrels amongst their Socialist colleagues about the closing of uneconomic pits.

Mr. Blyton

We can deal with that.

Mr. Bracken

That may be, but will hon. Members from South Wales agree with it and is it Government policy? I should like to know, because it raises an issue of the highest possible importance. Some pits should be closed at the present time, but owing to political pressure they are not. Hon. Members opposite have some responsibility for that. The only clear thing that emerged from the Parliamentary Secretary's reading of his brief was that the Coal Board are to sink 15 new pits in the next 10 years.

Mr. Neal indicated dissent.

Mr. Bracken

It is no good the hon. Member shaking his head. That is what he said. He may not have read his brief before he read it to us, but I can assure him that that was in it.

I would ask hon. Members who represent coal mining areas to ponder that remark. Does anyone believe it is possible to sink 15 pits or create 15 new mines in the next 10 years with the sort of priorities allocated to the Coal Board? I notice that the Minister himself is taking some notes. I am hoping he will tell us exactly what priorities the Coal Board get. I will sit down if the Minister will tell us that now. We also want a specific answer to this question: Does he agree that the Coal Board are to sink 15 new pits or even 10 new pits in the next 10 years? It is an extraordinary story, because they cannot. They have not been given the priorities in steel or any of the other necessities. [Interruption.] If the Minister would not rebuke his colleague in public, I should like to develop my argument.

I want the Minister to give us an assurance about the opening of these pits by the Coal Board? Has the Board, in fact, the necessary priorities for the raw materials? That is a question that must be answered, otherwise the country is being grossly misled. My own belief is that the Coal Board's requirements will not be met. We are being asked to vote large sums of money which cannot be spent; they may lend it, but not spend it. We are asked to vote the money blindly.

In the days when the House of Commons could influence the Executive it always boasted about its control of the public purse. But this squalid Socialist Government has turned it into a sieve. There is no sort of control. The Parliamentary Secretary spoke about the wonderful plan, which the Coal Board has, and he referred to the days of private enterprise as those backward days when the coal industry was run by a troop of troglodytes, adding that there was no possibility of progress then. But in those days we were not importing coal and paying dollars for it.

Mr. Blyton

In those days the people were getting coal for nothing, because there were cheap miners.

Mr. Bracken

At present we are getting slate at £7 a ton.

Mr. Blyton

May I remind the right hon. Gentleman that 82 men are entombed underground who, he says, were getting slate?

Mr. Bracken

I have said before that hon. Gentlemen opposite ought not to bring these great tragedies into party politics. I am sure that decent miners will repudiate it.

We must not become too controversial about these matters. We have had from the Parliamentary Secretary a statement. I see a former Secretary for Mines in this Committee, one of the best respected Members of the House of Commons. I wish he had remained at that Ministry, because he was the only sensible person I have seen there from the Socialist Party for many a year.

The Minister himself must tell us tonight something about these wonderful plans of the National Coal Board. We have had no clear description of them from the Parliamentary Secretary, who said that the Coal Board had a flexible plan. [Interruption.] I think that was what the hon. Gentleman read out. "If it is a flexible plan, why does it need fixed capital?" The Minister ought to apply his mind to these matters. If the plan is flexible, why should we be asked to vote this immense sum of money?

I think that most hon. Gentlemen opposite who have served in this House for a long period will agree that we have listened to one of the most lamentable explanations that we have ever received from a Minister about the expenditure of a large sum of public money. If the Minister is to command the support of those who sit behind him and is to receive some acquiescence from this side of the Committee, he should give us a clear indication of how this money will be spent. We have had absolutely nothing from the Parliamentary Secretary, who is a most amiable Member, but is obviously ill-placed in his present post. [HON. MEMBERS: "No."] The Chief Whip, the Patronage Secretary, says "No."

The Parliamentary Secretary to the Treasury (Mr. William Whiteley)

I said, "Order."

Mr. Bracken

I was trying to keep in order until I was interrupted. The right hon. Gentleman must not be so touchy.

I say that we have had a most inadequate explanation from him. I appeal to the Minister to tell us what is to be done with this vast sum of public money. I hope the Minister will do so. Then we on this side of the Committee may be able to turn to other Amendments which are on the Order Paper in our names. That would be a convenience to the Chief Whip. We are always anxious to speed up public business. It will be helpful to everyone if the Minister will make an explanation now. [Interruption.] It is impossible for me to remember my peroration with the Secretary of State for Scotland interrupting me. We want a statement from the Minister, because we have been given none whatever, about the intentions of the Government about the financial scheme devised by them to expend this vast sum of money. To turn this Committee into a Council of State I invite the Minister to offer us that explanation now.

Mr. Emrys Hughes

I have often wondered why the right hon. Gentleman the Member for Bournemouth, East and Christchurch (Mr. Bracken) is chosen by the Opposition to speak on a serious subject like coal. He has no practical experience of coal mining or the serious economic problems which lie behind the debate. He referred to me as the arch-druid of Scotland. He looks more like my conception of an arch-druid than I do; but I should not connect him with anything remotely as spiritual as an arch-druid, because his spiritual communion is obviously with a gentleman who used to give dexterous performances at Barnum and Bailey's Circus.

He referred in a rather deprecating and churlish way to the Parliamentary Secretary, who has made his first appearance at the Despatch Box. I thought that my hon. Friend's speech contained a very reasoned argument in reply to the points which had been raised. If it was read from a brief, I wish the Opposition had supplied the right hon. Member for Bournemouth, East and Christchurch, with a brief, and then we might have had a reasonable, relevant, intelligent and serious argument from him.

The Opposition ask that we should substitute £250 million for the £300 million which is the estimated amount of capital expenditure involved. I think the Ministry have been rather moderate in their estimates, and I agree with what has been said by one of my hon. Friends in that respect. We must remember that the capital expenditure estimated in the Coal Plan was, as the Parliamentary Secretary said, based on 1949 prices and that in 1951 those prices have become almost irrelevant. Hon. Members have said that it has to do with devaluation and others have said that it is due to rearmament and the international situation. Certainly there has been, and there will be, a very sensational rise in the prices of machinery and raw materials and everything else owing to the international situation and the international policy of re-armament and inflation, of which hon. Members opposite are the greatest supporters. [Interruption.] This is my speech, is it not? The right hon. Member for Bournemouth, East and Christchurch, has had his knockabout performance.

I am arguing that we have to face the financial and economic consequences of re-armament and that when Ministers have come forward with proposals to spend very large sums of money, immensely larger than the £300 million, there has been no demand from the Opposition for meticulous examination of the expenditure. They have said to the Minister of Defence and the Secretary of State for War, "Go ahead. Spend millions more." The amount for which we are asked to develop the coalmining industry is comparatively small compared with the astronomical sums which the Opposition have been urging the Government to spend during the last 12 months.

9.0 p.m.

Scotland is one of the districts vitally concerned with this expenditure of £300 million. The whole of our industrial and economic life in the West of Scotland depends upon the transference of the base of the mining industry from Lanarkshire into Fifeshire and Ayrshire. If this capital expenditure is not approved, it means completely hamstringing the economic development of the West of Scotland, and especially the change in the coalmining structure underlying the heavy industries of the West of Scotland.

I had the privilege of taking the Minister of Fuel and Power down one of the big mines in Ayrshire, which is very much affected by this capital expenditure. I view with very great alarm indeed the rise in prices. This programme of capital development in the mining industry will, as the more serious Member for Liverpool, Garston (Mr. Raikes), who opened for the Opposition, remarked, be crippled by a shortage of machinery and of steel and by innumerable other factors. When the Opposition come along and say, "Reduce this figure from £300 million to £250 million," lopping off £50 million as a gesture, they are talking absolutely irresponsibly about the future of the mining industry.

It is quite true that re-armament will bring immense problems. I do not believe that if we carry on with the re-armament programme, and the rise in the price of steel continues in the next year or two, the sum which we are discussing will be anything like the amount required for the long-term plan in the coalmining industry. As the hon. Member for Garston quite rightly asked, how are we to sink new shafts if we do not have the steel?

Mr. Raikes

It cannot be done.

Mr. Hughes

And how are we to get the steel if we do not have the coal? That is the economic problem of rearmament. Hon. Members can talk as they like about the long-term plan for steel fitting in with the long-term plan for coal, but already the whole perspective of the Coal Plan has been completely altered by the shortage of steel. Representing a mining area, I believe that the re-armament programme has already broken down and will have disastrous economic consequences upon the future of the coalmining industry.

The Government are asking for a comparatively small sum and the only difference between the Opposition and the Government is £50 million. Instead of the Opposition bringing forward any constructive proposal for dealing with this serious problem—because it is a serious problem; it will develop into unemployment and economic crises, both in steel and in coal—apart from the hon. Member for Garston, who opened the debate and attempted to outline a certain amount of constructive suggestion, all we have heard is that we should cut the £300 million to £250 million. We have had no explanation of how or where it is to be done and what part of the coal industry is likely to be affected. If the pre-war figure of £1 million for sinking a shaft has already gone up, on 1949 prices, to £5 million, what will it be like in 1951 and 1952 if the economic crisis develops?

The Opposition have not a constructive solution but are pledged to the contradiction of re-armament which makes this economic problem impossible to solve. To suggest that they would perform a useful purpose by lopping off £50 million from £300 million is playing with the economic crisis which is looming as the re-armament programme proceeds.

Mr. Peter Roberts (Sheffield, Heeley)

On Second Reading the Minister referred to ancillary property and there is a point on that which I should like him to clear up. The question put to him was: In the working out of the amount of borrowings of the National Coal Board, has any account been taken of the sale of certain assets which might be able to finance the new plan? He was referred to houses and land and his answer was that in the past these houses were bought for good business reasons and there was no reason why the Coal Board should change their policy.

The point I should like to put to the right hon. Gentleman is that one of the reasons why the houses were bought was that if the colliery, by subsidence, let these houses down, they would be responsible for repair. Now a new Act has been passed, and compensation has to be paid by the Coal Board for houses which suffer through such subsidence, whether they own them or not. Surely that fact must alter the business aspect of the problem. If the Coal Board now owns houses bought for the specific purpose of saving the cost of subsidence and now, in any event, they have to pay that cost, the need to hold these houses ceases and the Minister might well give a direction to the National Coal Board to look through their properties to see whether many of them might be sold if they were bought purely to save the cost of repair work. I hope he will say whether he has considered that point and whether there might be a saving.

The second matter I would put to the right hon. Gentleman is the question of steel priorities, which I think is even more important. Can he say definitely whether there are any steel priorities being operated by the Steel Board, or the Minister of Supply? It would be very interesting to know. If so, has the Coal Board any such priority? I suggest that at the moment there are no such official priorities. Therefore, I was surprised that in his last speech the Minister said he was going to create priorities. I think he must tell the Committee what steps he has taken, or proposes to take, to get allocation of steel at present. This not only affects the industry of coal, but affects all other industries, including steel itself.

Mr. P. Noel-Baker

The Bill proposes several changes in the provisions of the original Act. It abolishes the time limit, it abolishes the previous stipulation that advances which were repaid must nevertheless be counted towards the total outstanding and it seeks to increase the total from £150 million to £300 million.

I am very glad that hon. Members opposite accept the principle of all these changes. The only difference between us is that they think that the upper limit ought to be £250 million instead of £300 million. I say at once that I think it just possible, if certain things happen over the next 15 years, that we might be able to get through with the National Coal Plan with an upper limit of £250 million. We might be able to fulfil the purposes of the Bill, but I think it extremely unlikely. I therefore believe that the Committee would make a great mistake if they accepted the reduction which is proposed and I hope to induce hon. and right hon. Members opposite to agree.

The purpose of the Bill is to enable the Coal Board to make plans for capital development for 15 years ahead, to carry out their Coal Plan and to be sure from the start that they will have the capital they need when it is needed. Why do we think that £300 million is the minimum figure we ought to put in the Bill? I shall deal a little later with the question of how that amount is made up. Before I do so I might perhaps answer some of the questions and arguments that have been put to me in the course of our agreeable debate.

The hon. Member for Kidderminster (Mr. Nabarro) asked me how much of the £300 million is allowed for inflation, for rising prices, and how much for real investment. He read out what I said on Second Reading, and if I may with modesty say so, when I heard what I had said I thought that it was crystal clear. The estimate of the investment of the £635 million required is made at 1949 prices. If, when the plans are carried out, prices have risen and more money is needed the only margin in the £300 million is the £32 million, which I will discuss a little later, and which I explained on Second Reading. That is my answer to the hon. Member tonight, as it was then.

I was asked by the hon. Member for Garston (Mr. Raikes), who moved the Amendment, whether we can spend the £300 million, and other Members, including some of my hon. Friends and the right hon. Member for Bournemouth. East and Christchurch (Mr. Bracken), have asked whether the international situation has not so altered that it is certain that we cannot get the steel we need. The answer has been given by my hon. Friend. Without coal we cannot get steel; without coal we cannot get armaments; without coal we cannot play our part in the Colombo Plan. Coal is the foundation of our economic prosperity and of our strength in peace and war. If we had war tomorrow we should direct the miners to the pits. Surely it follows that we must get the steel. We are getting it. No production has been held up for want of steel anywhere, and we shall continue to get it. We must get the coal for our own national needs and the needs of our European Allies.

Mr. Bracken

Is the Minister now telling us that the Coal Board are absolutely satisfied that they have the raw materials, whether steel, engines or all manner of things necessary to carry out the Coal Plan? The Minister is now making a statement that the Coal Board have a priority which will enable them to have the steel, say, for opening up the 10 pits mentioned by the Parliamentary Secretary. I see the Minister of Supply sitting there. I think he ought to help his Ministerial friend in this matter.

Mr. Noel-Baker

The Minister of Supply is in full agreement with me. We must have the coal.

Mr. Bracken

Is the right hon. Gentleman getting the steel?

Mr. Noel-Baker

Yes, certainly, and we shall continue to get it.

Mr. P. Roberts

This is very important. The Minister says he is getting the steel. Other people are not. Is he getting it on some basis of priority or not?

Mr. Noel-Baker

We are getting the steel and we shall continue to get it. That is a full and sufficient answer to the doubts which have been expressed. We shall get it.

That leads me to what was said by the right hon. Gentleman and others about the closing of pits. I say with great confidence that the Coal Board have closed fewer pits than were closed in the past. They have kept what are called uneconomic pits open. They have been able to do so because of nationalisation, the reason being that the nation needed the coal. I know that they have never closed a pit without consultation with the National Union of Mineworkers, and the right hon. Gentleman will not say that that is wrong; of course it is not. They have never closed a pit unless, as a result, they got more coal by putting the workers elsewhere. There has been no closure which has not resulted in an increase in the output of coal.

The right hon. Gentleman asked whether we shall open the pits provided for in the Coal Plan, and he asked what they were. If he had listened to what was said by the Parliamentary Secretary, it was that 22 new pits are provided for in the Plan. Also 50 new drift mines; drastic reconstruction, reorganisation and re-equipment of 250 other pits. In addition, many pits which were previously separated are to be joined up and will be worked from a single shaft. The right hon. Gentleman has had the Coal Plan since last autumn. He knows perfectly well what it contains and I am now saying to him that it is to be carried out. We shall make it a reality.

9.15 p.m.

The hon. Member for Garston (Mr. Raikes) chided me gently for mocking at the hon. and gallant Member for East Grinstead (Colonel Clarke) because, on Second Reading, he proposed alternative methods by which capital could be raised. I hope I never mock at anybody and certainly I never mocked the hon. and gallant Member. I would not dream of doing so. He made a very serious and constructive contribution to our Second Reading debate, although I do not agree with the proposals he put forward. He suggested that the Coal Board should dispose of a number of their assets—brick works, tile-making plant, and so on. He said they might possibly get £2½ million of capital from that. He said they might dispose of their farms and that on an estimated value of the land that might bring in £4½ million. Another hon. Member suggested the Coal Board might sell their houses. It was good business for the original owners to acquire them, and if it was right for the original owners to have them I think it right that the Coal Board should retain them.

I do not think it is anything to do with avoiding the cost of repair. The Coal Board will repair their own houses. They will not allow them to fall to pieces about the ears of their workers. They need the houses to house miners, officials and other people important to the conduct of their industry. In point of fact I discussed this with the Coal Board before the Second Reading debate, before the hon. and gallant Member made his proposals. I discussed every point with the Coal Board at considerable length and on a number of occasions. I am satisfied after those discussions that we should make a mistake if we urged the Board to dispose of these assets for what, after all, would not be a very large capital sum.

Now let me deal with what was said by the hon. Member for Kidderminster (Mr. Nabarro) about the use by the Board of their workmen's compensation funds. Is it immoral for the Coal Board to invest them in the industry? For the life of me I cannot see that it is in any way immoral. What is necessary, what is essential, what we must safeguard, is that the Coal Board can be certain of paying to their workmen the sums due to them at the proper date. Under this arrangement that is absolutely certain, because, by investing these sums in their own business, they can call on the Minister for advances under the Act which will enable them to pay their workmen. As I said before, I am sure that this is a perfectly proper thing to do and greatly to the advantage both of the Board and the nation.

The use of these funds by the Board was discussed in the Public Accounts Committee. It is shown quite plainly in the accounts of the Board that they have been invested in the industry itself. No one, no technical expert outside, no one in the House, no one in the Public Accounts Committee, has ever questioned or challenged the propriety of this policy until now; and I think that this Committee would be quite wrong if they condemned it.

Let me come to the main point in the debate and the main difference between the hon. Member who moved the Amendment and me. It is really a matter of arithmetic. How is the £300 million made up? He said £160 million for investment in capital assets; £21 million for repayment of workmen's compensation funds which have been invested; £33 million for outstanding advances; £32 million for working capital—a total of £246 million. Therefore, in the £300 million, we have an additional £54 million for extra working capital or for other things, and that is altogether too big a margin. But that is not, in fact, quite a complete account of what I said on Second Reading.

Mr. Raikes

The right hon. Gentleman will agree, I am sure, that I put those figures forward for the purpose of getting an explanation of them.

Mr. Noel-Baker

I agree that the hon. Gentleman was not at all controversial about it. I am trying to explain that I did not make it perfectly clear on Second Reading. On reading again, since he spoke, what I said on that occasion, I think I might have put it more plainly. Therefore, I will put it in another way which, I hope, will carry conviction.

The total to be raised over the next 15 years is £635 million. The National Coal Board estimate that in these 15 years the depreciation sums will amount to £475 million. But not all that £475 million will be available for investment. The sum of £75 million will be needed to repay sums which they have now used for investment, but which they must later replace to meet the liabilities which, in due course, they will incur. Of that £75 million, not £21 million, but £15 million is for the workmen's compensation fund.

I do not know where the figure of £21 million came from; I could not find it in my speech. In fact, the figure is £15 million, and that leaves £60 million for repayment to the previous owners. I think that is the item which the hon. Gentleman missed. As I say, I think it was my fault for not having explained it quite clearly on Second Reading, but, at any rate, there is that £60 million for repayment to the previous owners. That means not £475 million, but £400 million only will be available for capital investment in the National Coal Plan. That leaves £235 million to be found from advances by the Minister. To that we have to add the £33 million of the outstanding advances which we have today—£268 million. That only gives a margin of £32 million for working capital and for rising prices. It is really a very modest margin indeed, and I hope that, in the light of this explanation, the Opposition may agree to this Clause being adopted.

Colonel Lancaster

The Minister has made a very important announcement, but I am sure he will agree that the major work of reconstruction has not been done by the Ministry of Fuel and Power, or, indeed, by the Coal Board, but by firms supplying plant for this purpose, who have been told during the last few months, both by divisional supply officers and by Coal Board supply officers, that steel is not available for their purposes. The Minister has said this evening that all the steel required is available. In the light of that statement, will the right hon. Gentleman now give instructions, both to divisional supply officers and to the Coal Board's supply officers, that the steel is not only available in theory, but will be available in practice to the firms supplying the necessary plant, and who are at this moment held up because they cannot get the steel, or the necessary allocation, without which the whole of this Coal Plan will fall to the ground?

Mr. Noel-Baker

I have not the detailed information about those instructions which the hon. and gallant Gentleman has. I say to him again that we are to get the steel that is needed to carry out the Coal Plan. To get the coal we must have it.

Mr. Bracken

The right hon. Gentleman was asked a specific question by my hon. and gallant Friend. Why do the right hon. Gentleman's divisional officers, or the divisional officers of the Government engaged in steel and other nationalised industries, declare that the steel is not available, and will not be available for the machinery required by the mining industry? The Minister tells us, in a boastful sort of way, that we shall get the steel. Is there a definite priority for the coalmining industry and for those firms who provide the equipment necessary for the production of coal?

The Minister made a most interesting speech at a rather considerable length but all the way through, when he was talking about the coal situation and rather basking in glory, he forgot that at present we are still ordering coal in the United States and that no one in the coal industry at the moment has any real assurance that steel will be available to get on with the Coal Plan mentioned in the Bill.

Mr. Noel-Baker

I know nothing of the declarations to which the right hon. Gentleman referred. I say that if there is any difficulty about this it is to be referred to me and I have not heard of the difficulties.

Several Hon. Members rose

Hon. Members


The Deputy-Chairman (Colonel Sir Charles MacAndrew)

Hon. Members should sit down when I stand up. We have had two hours' discussion on this Amendment and I hope the Committee will come to a decision.

Mr. Raikes

After the long and interesting debate we have had upon the Amendment which I moved, and in view of what the Minister has said—without, of course, necessarily agreeing with everything he said—on behalf of my hon. and right hon. Friends and myself I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Colonel Crosthwaite-Eyre

I beg to move, in page 1, line 18, at the end, to insert: Provided also that the Minister shall not in any year make advances to the Board exceeding thirty million pounds save in pursuance of an order, which the Minister is hereby empowered to make, which shall specify the excess over thirty million pounds which is authorised in respect of that year. In moving this Amendment, I hope it will be convenient to you, Major Milner, if we take with it the later Amendment in my name and the names of my hon. and right hon. Friends, in page 1, line 18, at the end, to insert: (2) The power conferred upon the Minister by the section so substituted to make orders shall be exercisable by statutory instrument and no such order shall be made unless a draft thereof has been laid before Parliament and has been approved by resolution of each House of Parliament. Any such order may be varied or revoked by a subsequent order made in like manner and subject to the like conditions. I hope we shall not take as long over this Amendment as we have done over the previous one. The Minister, in his reply on the previous Amendment, said that he could scrape through if he had the £250 million suggested in that Amendment. He said he would not have liked it but he thought it was possible.

Mr. Noel-Baker

We might scrape through if certain things happened, including a fall in prices.

Mr. Bracken

And a change in Government.

Colonel Crosthwaite-Eyre

The Minister was prepared to say that under the previous Amendment the figures were tenable on a logical argument. In the case of the present Amendment the figure we propose is more than tenable. The Minister said he needed £460 million over a period of 15 years for the purpose of capital development. I think it is fair to say that the Minister himself does not expect to expend more than something of the order of £20 million each year. We on this side of the Committee feel that where these great sums are granted to Government Departments, we must have Parliamentary control. I think that the Minister, if he were on this side, would be equally desirous of seeing that there was proper Parliamentary control where great sums of money were required.

9.30 p.m.

In his Second Reading speech, I thought the Minister made a rather innocent statement, with of course that charming smile of his, that he and the Chancellor of the Exchequer were always immediately accountable to the House of Commons and that a debate could always be demanded and their conduct and administration criticised. Money spent in January of this year will not be reported to this House until we get the National Coal Board's Report which will come out in July next year—something like 18 months after that money has been spent.

I agree that it would not be right every time a minor project is put forward for us to ask that the Coal Board should tell us about it or that it should be subject to detailed examination in Parliament, but what we do say is that where large sums of money are concerned we should try to set a figure which will allow the Coal Board full scope for its own day-to-day development but yet at the same time will ensure that when they desire to spend any extra large sum they must come to Parliament and, through the Minister, tell us why they want that sum.

It will be noted that the two Amendments are designed purely to that end. In no sense are they frustrating the Coal Board. In these Amendments we say that when they want more than £30 million they must tell the Minister to come to the House and lay an order before the House saying what is this sum over and above £30 million that he needs and why it is required. It may be that when he makes a short speech saying why he wants that money, no Member will wish to argue because the House will be convinced by the Minister's statement.

On the other hand, it may be that, whatever party is in office, there may be an excess of expenditure which, in the interest of Parliamentary control, should be discussed. By putting down this figure, I think we have ensured that, on the one side, the Coal Board should not be hampered in its day-to-day work and, on the other side, that Parliament should retain proper control over moneys that it votes for a particular purpose.

I hope the Minister will not say that £30 million is too low, because on the figures which have been given in his Department's Estimates it is equivalent to the average sum which he has to spend over two years. Equally I hope he will realise that when he wants to spend more than £30 million the least he can do for himself, his successors and Parliament, which he serves, is to ensure that if such a sum is necessary he should have the right to explain and that Parliament should have the chance to discuss the matter and authorise it if they think fit.

Colonel Clarke (East Grinstead)

I want briefly to support this Amendment. I think it is a very moderate Amendment. We have been speaking in big figures in this debate, but I think that £30 million is a big figure in itself. I have not worked it out, but I believe it represents something between 2d. and 3d. on the Income Tax. We are suggesting that in any year that amount should be spent without reference to this House, but that if more than that is desired to be spent then reference must be made to Parliament. I think that is fair.

In the course of the debate the Parliamentary Secretary said that it might be that plans would be modified, and that if they were modified higher expenditure might be entailed. If plans are modified Parliament should be informed and should have an opportunity to discuss the matter. It is only right from the point of view of the industry, and we should show that we in Parliament are taking an intest in such changes. This is a most moderate Amendment, which seems to meet a good many of the arguments which were adduced against the last Amendment. Therefore, I hope it will meet with the approval of the Committee.

Mr. W. Robson-Brown (Esher)

In supporting the Amendment I wish to say that I do not believe there is a reasonable person in this Committee or, indeed, in the country who would withhold from the Coal Board a single pound necessary to put the coal industry in its right and proper position. But what I think the country requires us in Parliament to do is to satisfy ourselves that the money which is spent is spent in the right way and at the right time, having regard to the circumstances at that time.

The accountability of Parliament for the expenditure of huge sums of money is very necessary. I say to mining Members on the other side of the Committee that if any of this money were wasted I doubt whether like sums would be available a second time. We have to be satisfied that the money is used in the proper way and at the proper time. I am also satisfied that if this money is wisely spent, then long before the end of the Coal Plan it will lift not only the efficiency of the industry but, what is dear to the hearts of all hon. Members the standards of life of the miners themselves, and it will not be too long a time before they become technicians, labouring more with the skill of their hands and less with the sweat of their brows.

I and many others have studied the Coal Plan very carefully and I suggest that it should have been submitted by the Minister to this House as a Report. It should have been submitted by him for debate on the Floor of the House and it should have been accompanied by a full and detailed review of the moneys he required and the ways in which he proposed to spend it. If that had been done, a good deal of today's debate would have been avoided.

The Bill provides the finances which it is anticipated will be required under the Coal Plan, but I gravely suspect that, with costs rising as they are, by the end of the Plan, whether it is 10 or 15 years, the sums required will be very much greater than we have envisaged today. On the question of shortage of supplies of steel, if this debate has done nothing else it has brought an assurance from the Minister that if steel is not being properly provided at the moment, as from tomorrow he will see that it is.

This Amendment does not seek to put any obstacle in the way of right and justifiable expenditure on the part of the Board, but it rightly seeks to impose a restraint upon uncontrolled expenditure and, to have it reviewed year by year. We do not seek to reduce the annual amount, but what we ask is that for sums over £30 million or £40 million the House shall have an opportunity of studying how the money is to be spent in the year before us and to review what has been done in the year gone by. It seeks to establish an annual accountability by the Board, through the Minister, to Parliament. I feel that more of such accountability is necessary for the nationalised industries than many hon. Members have realised.

I would go further and say that any responsible and prudent Minister of Fuel and Power would require and expect that such an arrangement would be made, because it means that he would be placing before Parliament every year a comprehensive plan for the next year's development of the coal industry. We could follow it with interest, give him advice and give him the encouragement which he required, because there is no industry in this country today which has so much upon it the searchlight of public opinion as has the coal industry. The reasons for that are obvious. The coal industry is the key to our prosperity in peace and to our survival in war; and may I say this to the hon. Member for Ayrshire, South (Mr. Emrys Hughes), the sincerity of whose opposition to re-armament I do not doubt: without proper re-armament we shall not have a coal industry to develop.

The coal industry not only controls the interests of the miners themselves and of householders, and the interests of industry, but upon it depends the welfare of the nation. Yet there is no industry within which there is such a closed shop about information. The Opposition have to probe and probe, to question and question, and to take whatever opportunity they can at very wide intervals to obtain information about the operation of the industry. May I give a simple example? In this Coal Plan, what allocations of money have been made, and what is the proposal, for the long-term programme of modernisation of coke ovens?

One hon. Member on the Government side pointed out, quite rightly, that if we do not have coke ovens we shall not have pig iron and that if we do not have pig iron we shall not have steel. We have not only to win the coal, but we have also got to convert the coal into suitable coke. There is no information anywhere on this one vital item. There is a statement, it is true, by the Minister that we are to spend £115 million on coke ovens, ancillary plant, briquettes, and the like, but we do not want global figures only. How far has the Board got with the national wages policy?

The Chairman

The hon. Gentleman is going too far. This is not the occasion for a general disquisition on the proceedings or policy of the Board. The question is simply whether an advance should be made in a certain sum in any one year.

Mr. Emrys Hughes

Is it not relevant, Major Milner, to discuss wages, because on the amount of wages will depend the amount of money available for capital development?

Hon. Members


Mr. Robson-Brown

I stand corrected by you, Major Milner, and I will not make any further reference to a general wages policy, except to say this—[Laughter.] I shall be in order—that in the development, area by area, of the Plan itself conditions of every kind will have a great part to play in the results of the activities in those areas. In this Plan, in the annual statements, but particularly the Plan, the Minister and his advisers should indicate to Parliament how he allocates the global sums area by area, so that we can follow the expenditure, and so that the men and the managements in those areas will have confidence and know the money is available to them in those particular areas.

Mr. Ellis Smith

The hon. Gentleman is very familiar with the steel industry. Is it not a fact that in the next few years one of the bottlenecks of British industry may be the lack of supply of coking coal? If so, is it not necessary to remove all uncertainty in the mining industry, so that the industry can carry out this Plan on the basis of maximum confidence that it will not be interfered with in proposals of this kind?

Mr. Robson-Brown

I thank the hon. Member for his intervention. He is supporting my own argument. I was surprised that it was he who mentioned the development of increasing production of coking coal to send to the United States.

Mr. Smith

To send to Canada.

Mr. Robson-Brown

To Canada. I beg the hon. Member's pardon. To Canada or the United States. It would be a relief to those of us on this side of the Committee to know that coal was going the other way for a change. However, it is no relief to me to know that it is contemplated that coking coal should make its way out of this country to Canada or elsewhere until the needs of our own home steel industry have been fully met. Extend our coke production by all means, and export any surplus coke, but not good coking coal.

Mr. Smith

The hon. Member is now not being fair to himself. He is better informed, and ought not to make a statement of that character. He knows that the object of the Plan is to bring about an enormous increase in the output of coal. We cannot do that without large-scale capital expenditure. At the same time, we are to have an enormous increase in steel from Canada. Canada has not got the coking coal, and, therefore, requires it from this country. So we import from there an increased amount of steel, which is necessary in this country and in Europe.

Mr. Robson-Brown

I do not want to get into an involved argument with the hon. Member. If Canada is to send steel to us in considerable quantities and to Europe—and the hon. Member was bringing in Europe—we shall get into an international re-distribution of supplies. I heard somebody on the other side complaining about Strasbourg. I was not at Strasbourg. I know nothing about it.

The Chairman

The hon. Member must confine himself more closely to the precise purpose of the Amendment, which deals with advances for capital expenditure.

9.45 p.m.

Mr. Robson-Brown

May I be allowed to answer one point regarding the development plan and the production of increased tonnages of coking coal? I can assure the hon. Member that very large tonnages of coking coal in this country are not entirely satisfactory for making coke. There is a tremendous amount of capital expenditure required at the coke ovens of the National Coal Board in order to make suitable coke at the present time, and that is involved in this particular Bill.

Finally, whatever money is required for the coal industry, it must be found. That is absolutely vital, but what is none the less vital is that we must be satisfied that it is well spent, and, judging by the records of the Government in some of their ventures, we cannot be too confident that it will be spent in the wisest way. Therefore, it is necessary for us—and this is the purpose of this Amendment—to see that annually we can keep an eye on what they are doing.

Colonel Lancaster

One of the doubts which has arisen in our minds throughout this discussion this evening concerns the question whether the Minister would have the steel and the other requirements with which to carry out the capital development Plan for the period we are discussing. Both in the earlier Amendment and in a more recent one, that has been the factor which has actuated hon. Members on this side of the Committee, most particularly in regard to the amount for which we thought it was reasonable for the Minister to ask at this stage.

All our doubts have now been set at rest. The Minister has made a most important announcement; in fact, he has made two announcements. He has announced that all the steel that is required will be available, and he also made what is, to my way of thinking, an even more peculiar announcement, when he said that he was unaware that the Supplies Officer of the National Coal Board had indicated quite definitely within the last two weeks that there is no sufficient allocation of steel and that he could not promise the steel which was required.

I pointed out to the Minister that the overwhelming majority of the capital constructional programme which will be carried out will be done by outside contractors. Headgear, surface plants, washing plants and the like are not being produced by the Coal Board or by the Ministry of Fuel and Power, but by the operations of large contractors up and down the country who are making this plant and supplying it in accordance with this National Plan for Coal. I assure the Minister that these very large suppliers of capital plant are at this moment short, not of specialised steel, but of ordinary sectional steel of the most common nature. They cannot get any certainty of delivery; in fact, they are going short of their current requirements.

On the other hand, the Minister says that this is a danger of which he can easily dispose, that there is all the steel necessary, and presumably these firms will have steel allocated to them straight away under that assurance. I cannot believe that the Minister has given this matter a great deal of thought. He said that I was talking about a particular matter of which he has no knowledge, but is the Committee really to take it that, on a matter as important as the supply of steel—

The Chairman

The hon. and gallant Gentleman has had a great deal of latitude. The purpose of this Amendment is perfectly clear. The Amendment deals with the amount that can be advanced in any one year, and has no relation to the form of the capital expenditure. The hon. and gallant Gentleman, or any other hon. Gentleman, is only entitled to take up the question whether the amount of the advance shall be limited to £30 million, and the explanation to be made of any excess over that amount. That is the sole question before the Committee. Other general questions are not now before the Committee.

Colonel Lancaster

I appreciate that. The point is that even this expenditure is conditioned by the plant, the steel and other things which are available, and on which this expansion can be made. As I have said, hon. Members on this side of the Committee doubt whether in fact there will be this steel and these other materials available on which this £30 million would be spent. If the Minister can now assure us that they will be available, our doubts will disappear, and the purpose of putting forward these Amendments disappear with it. I cannot believe that the Minister was speaking with full knowledge before him, and perhaps he will take a further opportunity in the course of the evening of elucidating this very important point and making it clear whether in fact his statement was quite the same as a definite promise that these requirements will be available.

Mr. Noel-Baker

The hon. Member for Esher (Mr. Robson-Brown) has said, I think very rightly, that no one in the Committee grudges the investment funds that are required by the Coal Board. We want that investment to go forward as rapidly as possible. I am sure that everyone here will agree that if it could be done efficiently it would be desirable that the whole of the National Coal Plan should be carried out in five years instead of 15.

The purpose of the Amendment, as I understand it, is to secure some additional measure of Parliamentary control. With respect, I do not believe that that is either necessary or desirable. As the mover of the Amendment said, £30 million is, of course, much above the average of the sums that will be advanced over the next 15 years. Indeed, it will only be a very exceptional year when as much as £30 million will be advanced by the Minister. It would only be in some year, for example, when some of the deferred liabilities may mature—the capital repayments to the owners or the workmen's compensation fund—when it would be necessary for that money to be found and also the money for normal investment.

The point which I am making is that since this would be only in an exceptional year, this Amendment would provide a very spasmodic addition to the Parliamentary control which we now possess. Indeed, I do not believe that it would add anything of value to that control. Let me recite, as briefly as I can, what the controls are now. There are limits to the borrowing set up in the Bill when it becomes an Act, and the accountability of the Minister to Parliament for everything that he does. He has, under the Act, to approve the programme of capital investment; he has to make advances from the Consolidated Fund and for the various capital borrowings under Section 27. Parliament can call him to account on the way in which he exercises any of these powers. Parliament receives, and debates when it desires to do so, the annual reports and accounts presented by the Board. The Public Accounts Committee examine the annual return which the Minister has to make showing his transactions with the Board—that is to say, on everything covered by the Bill—and the return by the Minister is examined by the Comptroller and Auditor-General before it goes to the Public Accounts Committee. That Committee also examined the representatives of the Board and the Board's accounts. I think that that is a very effective chain of Parliamentary control.

The hon. and gallant Member who moved the Amendment said that this is really weak and ineffective, because it all comes too late; the Report and the accounts are only available six months or more after the end of the year to which they apply. I submit that Parliament, in fact, is exceptionally well-informed on the affairs and transactions of the Coal Board. It is true that the annual Report is only made annually and that the accounts come only once a year, but annual accounts are the standard practice of the Government and throughout the commercial world.

The Coal Board accounts do not come substantially later than those of private commercial undertakings of a large size. Last year I.C.I. put in their report on 23rd May. This year the Coal Board's Report will be available to hon. Members on 5th June. Last year the date of the report of Unilever and Lever Bros, was July, 1950, nearly seven months after the end of the year. The British-American Tobacco Company and the P. & O. Steamship Company were seven and eight months, respectively. I do not think there is any undue delay in the issue of the Annual Report, and everybody agrees that the Report and accounts give a very full and clear picture of everything that the Board is doing.

I quote the "Financial Times," because on this matter it is a very high authority. Dealing with the Report for 1949 it says that it is a statistical exercise and factual record which is a monumental achievement. Its coverage of the Board's activities is complete and exhaustive. That is very high praise from that source. Such a Report and such accounts are a great factor in public accountability.

In addition, the Coal Board publish the quarterly statement of costs and receipts analysed by divisions and for the country as a whole through a provisional trading account, which gives the latest information on the Board's financial position, which has hardly a parallel in any big industry of which I am aware. It is true that the quarterly statement does not contain information about capital investment but—and this is relevant to the purpose of this Bill—it is widely reported in the financial and technical Press. Therefore, it has considerable effect in public accountability and in the control which the House can exercise.

Moreover—and this affects more closely the Bill that we are now concerned with—every issue made out of the Consolidated Fund to the Coal Board is reported each week in the "London Gazette," in the statement of receipts and issues out of the Exchequer. That is an official publication, but the information is repeated, reported on, and summarised in the financial and technical Press, and, indeed, in the general Press. If any exceptional advances are made by the Ministry and if there are any apparently abnormal transactions between the Minister and the Board, they go immediately into this return and are brought to the notice of hon. Members, who can ask Questions about them.

On the Second Reading of the Bill the right hon. Member for Bournemouth, East, and Christchurch (Mr. Bracken), disputed my assertion that we had to account for these transactions. Hon. Members can ask Questions about the information published in the return. They have done so and they are on record in the OFFICIAL REPORT. Hon. Members, if they want to follow up the question on any transaction by asking about capital investment itself, can do so about schemes for which money is intended, and answers would be given. In fact, they have a great deal of information on which they can base questions about capital schemes.

In the annual Report there are two appendices which deal with capital investment. One sets out the full details of every scheme over £100,000 and the other what additions have been made or sales made of fixed assets. If the right hon. Gentleman looks at page 207 of the annual Report for 1947, he will find that it shows not only what has actually been spent on capital investment schemes of £100,000 value or more, but also what has been spent and what has been authorised. The total of what has been spent is there shown at the end of 1949 as £17 million and what has been authorised to be spent as £44 million. In other words, hon. Members have a great deal of information at a very early date.

10.0 p.m.

I know that hon. Members may ask, "What control has the Minister over the demands made by the Board for advances?" I reply that under Section 30 of the Act the Minister must approve the general programme of reorganisation and capital development. The Board makes a quarterly return showing its capital expenditure and commitments. It makes six-monthly statements of its cash requirements, and the banking arrangements, which I explained on the Second Reading ensure a full disclosure of the Board's financial position from day to day. They ensure that if at any moment the Minister has any doubt about any exceptional transfer or advance for which the Board may be asking he can make inquiries, and that he has complete control. The House of Commons can ask questions about it and can debate his answers if they think it worth while.

Colonel Crosthwaite-Eyre

How does the House of Commons know about any of the facts contained in the statement?

Mr. Noel-Baker

I said, when the hon. and gallant Gentlman was not here, that the advances are all shown in a weekly return published in the "London Gazette."

Mr. Bracken

They are not all shown. Only those out of the Consolidated Fund.

Mr. Noel-Baker

Yes, but the advances are out of the Consolidated Fund.

Mr. Bracken

Not all of them.

Mr. Noel-Baker

The Bill is concerned with the Consolidated Fund. The temporary advances come under another Amendment. I have been trying to show that there is a complete chain of Parliamentary control. The limit of £30 million might hamper the Coal Board in some year and restrict its freedom in planning in a way in which we do not now foresee. It may frustrate its purposes by making it not so easy for the Board to get on with its investments. I do not think that it would add to the real control which Parliament possesses.

I hope therefore that the hon. and gallant Gentleman and his colleagues will not press this Amendment. I add that if they feel very strongly about it I will consider it again before the Report stage. [HON. MEMBERS: "Hear, hear."] I cannot make any commitments now to accept it, but I should like to look at it again. It might have the disadvantages which I have sketched. I would like it best if the promoters of the Amendment said that they would give it up but, if they do not feel able to do that. I will, as I said, consider it again.

Mr. Bracken

We are very grateful to the Minister for his reasonable offer to us. We know that he cannot commit himself finally and we are glad that he recognises the strength of the argument put forward from this side of the Committee. When the Minister has had an opportunity to consider this whole question, he will probably accept our Amendment. I hope he will.

He has, in the best and most amiable professorial way, given us a lecture about how the House of Commons can control expenditure by Ministers. The Minister should recognise that it is actually possible for the National Coal Board to spend a great deal of money and for us to know nothing about it for 18 months. A Parliamentary control which can be exercised only 18 months after the event is not very effective, as the hon. Member for Chesterfield (Mr. Benson) well knows. He is one of the last surviving financial purists in the House of Commons. I noticed that he very shocked when the Minister was giving us a little essay about House of Commons control of finance.

The Minister preened himself on the statistics produced by the Coal Board. He quoted an article from a paper which I occasionally read, called the "Financial Times," which praised the admirable statistics of the Coal Board. Nobody has ever cast any doubt about the Coal Board's capacity to produce statistics, but we all very much deplore their incapacity to produce coal. The Coal Board produce more statistics than coal, and, in my judgment, more slate than coke. However, when we have a generous offer by a Minister, we must accept it. [Interruption.] The hon. Member for Ealing, North (Mr. J. Hudson), has a reputation for sobriety which is in no way exemplified by his conduct in this House. The potency of ginger ale seems to be worse than that of stronger liquor.

We do not look a gift horse in the mouth. We are grateful to the Minister and we are sure that he will accept the Amendment when he has had a better opportunity to consider it. I am sure that my hon. and gallant Friend will be delighted to ask leave to withdraw the Amendment, and we all hope that we shall shortly have an opportunity to congratulate the Minister on accepting this most prudent Amendment.

Mr. Godfrey Nicholson (Farnham)

Before my hon. and gallant Friend asks leave to withdraw the Amendment, I want to make a few remarks on the amazing deduction drawn by the Minister from the catalogue of what he calls "Parliamentary control" which he claims is exercised by the House of Commons. He gave the House to understand that he had persuaded himself that adequate Parliamentary control was exercised over the activities of the National Coal Board. He said, for instance, that the accounts of the Board were examined by the Public Accounts Committee. Nothing useful could possible eventuate from that because the Comptroller and Auditor-General has no access to the books of the Board. The Minister did not claim that he had; he just left it at that.

Mr. Noel-Baker

They have the report of the auditors of the Coal Board. It has been said in public by the President of the Incorporated Society of Chartered Accountants that it is a great advantage that the accounts of a nationalised industry should be examined by independent professional auditors who are quite free from any Government influence.

Mr. Nicholson

I know that the right hon. Gentleman is incapable of any mental dishonesty and I can only say he is displaying considerable ignorance. He shows that he does not remotely understand what the Public Accounts Committee do, or what they are meant to do, in an ordinary Government Department.

The Chairman

I am sorry, but we cannot have a disquisition on the powers and authority of the Public Accounts Committee. I allowed the mover of the Amendment considerable scope and I have also allowed the Minister to reply at some length, but we cannot go into these detailed questions of accountancy. That is much wider than the Amendment, which is quite a simple one and relates to the question of advances alone.

Mr. Nicholson

The Minister criticised the Amendment and, in support of his arguments, he adduced certain measures of control, as he called them, which Parliament can exercise over the National Coal Board and its borrowings. One of the examples which he cited was that the accounts of the Board were subject to the scrutiny of the Public Accounts Committee. As you have allowed the Minister to say that, Major Milner, I feel that I am entitled to point out to the Minister what the true position is.

The Chairman

The matter now before the Committee does not relate to the National Coal Board but to the advances from the Consolidated Fund to the Board. It is simply a question of what the amounts advanced by the Fund shall be, and any excess thereof.

Mr. Nicholson

If the Minister is allowed to produce certain facts or alleged facts as the argument in support of his case, surely, Major Milner, I am entitled to contradict them.

Mr. Geoffrey Lloyd (Birmingham, King's Norton)

Further to that point of order. Was it not the fact that, in originally presenting the case for the Amendment—and that point was accepted by the Minister—we said that the question of Parliamentary control over the funds was very much the whole basis of the Amendment? It was no doubt for that reason that the Minister adduced the other methods of control that he considered to be adequate, whereas we have considered that they were not adequate; and that was the reason we put forward the Amendment. I would therefore suggest that, without going too much into great detail in that matter, it is clearly relevant for us to argue that when the Minister says that the other methods of control are sufficient—in this particular instance he referred to the Public Accounts Committee—we are entitled to rebut his evidence on this point.

The Chairman

The debate is limited to the question of control by Parliament of advances. I am entirely in the hands of the Committee, but I cannot allow a wide discussion on the procedure or the operations of the National Coal Board itself, which is what the debate is developing into.

Mr. Nicholson

I shall deal with this point as briefly as I can, as the right hon. Gentleman dealt with it. I say that any reference to the accounts of the National Coal Board as being an adequate safeguard in the way of Parliamentary control is nonsense.

The Public Accounts Committee, which represents the House of Commons, cannot get anything out of its examination of the accounts of the National Coal Board because the Comptroller and Auditor-General does not have access to them, and the rôle of the accountants who are employed by the National Coal Board, and not by the Public Accounts Committee, is in no way parallel to the work of the Comptroller and Auditor-General. I hope that the Minister will accept that from me as a Member of the Public Accounts Committee, and that the absence of the invaluable assistance of the Comptroller and Auditor-General renders the examination of the Coal Board's accounts by the Public Accounts Committee of very little value indeed. I will leave it at that.

I am convinced that we are at the core of the problem underlying the whole Bill when we are considering the degree of Parliamentary control and scrutiny which can be exercised over these advances and the way in which they are spent. Here we have a great chunk of the national economy—the most important chunk of all, if I may put it rather colloquially. We are asked by the Bill to invest immense sums in the mining industry. We are asked to become shareholders, to plunge even more heavily into this investment—and a most essential investment it is. We are asked to do so with very meagre accountability as far as the actual making of the investment is concerned, and no accountability at all so far as the management of that money is concerned once it has been invested.

I see your eye on me, Major Milner, and I do not want to go too far, but I ask the Minister this: If he rejects this exceedingly modest Amendment, what does he propose in its place? It is no good his deluding himself with the vague remarks which he made that the Minister was always there to answer questions, and how Parliament had complete access through Select Committees to all the activities of the industry—that will not do. I venture to say that there is no side of our life where Parliament—in this case we are the shareholders—have less control over either the making of our investment or the running of it than in this particular industry. The Minister and the Government will hear a great deal more about it later on.

10.15 p.m.

Mr. I. J. Pitman (Bath)

The Minister has very kindly said that he will consider this again between now and Report stage and has raised two particular difficulties which he says are in his mind. The first is the difficulty that this would limit the Coal Board in their expenditure and in carrying out the Plan and it is generally agreed on all sides, as my hon. Friend the Member for Esher (Mr. Robson-Brown) said, that we do not wish to limit the Coal Board in any way, or to stop a good plan being developed. The other point the Minister raised was that it is the desire of the House to exercise control.

On the first of those points, the question of limitation, the Minister pointed out what a very large sum £30 million was in this respect and that it was not, in fact, likely to limit the Coal Board. I would point out, in addition, that there will be the annual depreciation of the whole coal industry: a very big sum in cash for this purpose. Secondly, there is the ability of the Coal Board to switch its pension investments into investments of this kind. With these two together the amount which this limitation is imposing is, in point of fact, very much less than the apparent £30 million. It will give a limit of about £50 million. That is as good a guess as anyone can make at this stage.

I ask him to bear in mind that this would not be frustrating or limiting the Coal Board in carrying out any but a major development by sinking a large new pit. Minor developments will not be held up at all, but what will be raised for accountability—the issue that my hon. Friend the Member for Farnham (Mr. Nicholson) has mentioned—is a major development, the sinking of a very large sum of money in a big new coalfield.

I think the Minister is making a grave mistake if he does not wish to implicate the House in the investment of such very large' sums. I agree entirely with my hon. Friend the Member for Farnham What the right hon. Gentleman has brought forward is a whole lot of arguments about accountability of water that is already over the dam. What we want in investment of big sums of money of this kind is to have control of it before it is invested. The real trouble with nationalised and semi-nationalised industries is that it is no good after a Gambia scheme or a groundnut scheme to say, "Right, we will look at the water over the dam" after it has flowed—

Mr. Bracken

Down the drain.

Mr. Pitman

The important thing is to have a good look at the investment before it is made. The Minister would be very wise to bring Parliament in to share responsibility with him for any such major investment before it is made. He says that before an investment is made the Coal Board discusses with him.

The Chairman

I am anxious to expedite the proceedings, but the question of the expenditure of the Coal Board has nothing whatever to do with the Amendment before the Committee, which has to do with advances to the Coal Board from the Consolidated Fund.

Mr. Pitman

With respect, those advances are to be spent under the terms of this Bill for the carrying out of the Coal Plan.

The Chairman

The hon. Member will forgive me. We are not dealing with the Bill; we are dealing with an Amendment and the debate must be limited to the terms of that Amendment and not extend to the Bill.

Mr. Pitman

With great respect, Major Milner, the figure of £30 million which is mentioned in the Amendment is the sum to be provided out of the Consolidated Fund for expenditure of a capital nature in carrying out the Coal Plan. The Minister has said that he proposes to consider between now and the Report stage whether he will either accept this Amendment or introduce a fresh Amendment which will give the House some control over an investment before that investment is permitted.

The point I am making is that the conversations which the Minister has as to the expenditure of money in an investment of this kind are carried on behind the scenes with the representatives of the Coal Board. They decide that they will sink a new shaft and develop a new coal-field at some place. I would have said that we should have a far more thorough investigation if the Minister knew that he was to be held responsible if that investment turned out, as it might do, to be as big a flop as the Gambia egg scheme or the groundnuts scheme.

The Coal Board consult with the Minister as to what this money from the Consolidated Fund should be spent on. If the Minister has to come to the House and justify it here I would say that there is a far greater degree of consideration and control because of the far greater responsibility of the Minister in that investment. If we leave the position as it is at present the Minister will go away and say it is the Coal Board that is to blame, if the thing goes wrong, and because the Coal Board have no real sense of responsibility either, the result is a complete blurring of the responsibility for an investment. The investment of large sums of money on ventures of this kind ought to be carried on under conditions in which responsibility is closely and precisely pinned down, and in which the House knows the man who is responsible for the success or failure of that particular venture.

Colonel Crosthwaite-Eyre

In view of what the Minister has said, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

The Chairman

Is not the next Amendment, in page 1, line 18, consequential?

Mr. Bracken

It looks as if it were. Major Milner, but like all Parliamentary or legal jargon it is more subtle than appears from the words. My hon. Friend the Member for Heeley (Mr. P. Roberts) has some powerful points to put in relation to it, which he will put with brevity and clarity if called.

Mr. P. Roberts

I beg to move, in page 1, line 18, at the end, to insert: Provided also that the aggregate amount of the principal outstanding in respect of advances under this section for the provision of working capital shall not at any time exceed forty million pounds. I shall endeavour to be brief and clear. I do not think that this is any way a consequential Amendment. It deals with a new point which we are trying to bring to the attention of the Minister. Admittedly it deals with public accounting and also control, but it is a different point to that which we have been discussing. This Amendment seeks to divide the £300 million which the Committee has decided shall be the amount which the Coal Board can borrow. We say that this money is to be spent on a variety of subjects and that it can be divided into two portions—one for capital plant which earns money, the other being working capital which is necessary for the business but which only greases the wheels.

One of the methods of proving the efficiency or inefficiency of an undertaking is the amount of working capital that it has. We consider that in this case it is necessary, for the control of the House, to be able to see how much of this £300 million is to be spent in projects which will produce coal and how much is merely to be used as working capital. If too much money is spent in working capital that is not running the industry efficiently.

I hope I have made that point, because for instance in the area division of Yorkshire recently, the Board tightened up the collection of accounts. It has made money flow into their account more quickly and is, therefore, a laudable system of getting in their money. That has reduced their working capital and it is an efficient way of doing it. The point we are putting forward is that we would like to see the working capital as low as possible and the capital used in development as high as possible. We therefore say that at no time should the working capital be more than £40 million without the Minister coming before the House.

How did we decide on the figure of £40 million? It has been a difficult point to decide exactly where the line should be drawn. It is generally agreed in practice that 2s. a ton is a reasonable amount for working capital, and that amounts roughly to £20 million on the present output. But that excludes stocks and stores, and if we allow for increase in the price of stocks and stores it brings the figure up to the £40 million to which the Minister referred in his Second Reading speech when he said that the working capital needed was over £40 million more. So he referred to the figure of £40 million which we have taken.

Tonight the Minister has given us some new figures on this question of working capital. The figures which we got from his previous statement amounted to £54 million. He has now given us a new statement which I do not follow and I would be obliged if he could give us some more information, because it is relevant to this point. He has said that the figure of £75 million he referred to before, in which he included the £40 million, is now £60 million capital repayment to owners. I think we should get this clear. What I think he is referring to is payment for stocks and stores. I should like to know exactly what that £60 million is.

Mr. P. Noel-Baker

The Coal Board have over the next 15 years the liability to make payments to the Government for meeting repayment of compensation given to the previous owners of the collieries. The £60 million is that. It has nothing to do with working capital at all.

Mr. Roberts

What I do not follow is why the figure is £60 million. Why is that arbitrary figure taken? It must be a much vaster sum.

Mr. Noel-Baker

That is the amount the Coal Board think they will have to pay from their depreciation fund for this purpose.

Mr. Roberts

In other words, they are going to write off this sum over a large number of years. That is what is comes to, and it would sound like a very large number of years. I now follow that and I am obliged.

Having accepted the principle and divided the £300 million into capital expenditure and working capital, we come to the question of how much it should be. We consider that £40 million is a reasonable amount. If one looks at the working capital at present shown in the latest accounts, which are 18 months out of date, the working capital, excluding stocks and stores, amounts to £40 million. Of that sum £22 million has been repaid to the Minister. In other words, the working capital at the moment is only £20 million. Therefore, when we suggest £40 million we consider that is a reasonable figure. I think my hon. Friends would be open to argument on the exact amount, but the principle we are endeavouring to put forward is that it is a good think for public accounting to know at easily recognisable dates what is the working capital in the business. Despite the argument which the Minister gave on the last Amendment, the actual amount of working capital cannot be ascertained until a balance sheet is produced which in the present case is 18 months out of date.

10.30 p.m.

I think this is a reasonable suggestion to put before the Minister. He has thrown a kindly light on the previous Amendment; I hope he will do the same with this. Otherwise, it means that we are giving the Coal Board the power to increase their working capital, by calling in their debts, by running up heavy accounts, and so on, which, in the normal course, is bad business. The only reason why the Minister might oppose this Amendment is that he does not want this light to be cast on the Coal Board. If the Coal Board have been running efficiently, and have in the last year reduced their debtors by £20 million, which obviously means they have been calling in their accounts much more quickly, surely they should not fear that light. I imagine the only person who would not like it, would be someone who is inefficient. I hope the Minister will look kindly on the Amendment which has been put down to try to assist him and the Committee in their deliberations on this matter.

Mr. Noel-Baker

This Amendment would mean a fundamental change in the provisions of the Act of 1946. That Act provided one overall limit for capital purposes, both for working capital and for long-term investment. Now it is proposed to change that and have a separate maximum limit for working capital. Even after the lucid and persuasive speech of the hon. Member for Heeley (Mr. P. Roberts), I do not see that it would be of advantage or would increase Parliamentary control to adopt what he suggests. It may have very great disadvantages. Under the banking arrangements which I have described the Board are enabled to use their current resources all the time in the prosecution of their business. This is a very sensible economic plan, which reduces advances from the Ministry to the Board to the absolute minimum, and the advances of the Government as well.

The essential feature of it is that there should be daily cash adjustments between the accounts of the Board, the Government and the Bank of England. Those cash adjustments may, in part, reflect the variation in working capital. The hon. Gentleman asked me to say what the working capital is. It is a widely fluctuating amount from day to day and from week to week: £5 million every week for wages, payments from customers coming in in the middle of the month. There may be variations of £30 million within the space of every month in the total of working capital. I am assured that it would be quite impracticable to analyse the adjustment at the Bank of England day by day with the accuracy necessary to guarantee the observation of a statutory limitation, whether of £40 million or of any other amount.

If this Amendment were adopted, these bank arrangements would have to be abandoned and their great advantage lost. Instead, we would have to make separate bulk advances for each purpose—working capital on the one hand and long-term investments on the other. That would involve earlier advances from the Exchequer than are now made. That would mean that the Board would hold idle balances in their hands which would not be available, as they are now, to be used by the Government for other purposes. What advantages would it bring and what control would it gain? The Board must have the working capital they need, just as any other business, and were an arbitrary restriction to have any effect at all, it could only restrict the scope of the Board's transactions. In a given case, it might make it harder for the Board to get the coal we need. I do not think anybody would ever limit the working capital to more than is really required. This £40 million limit might work very much against the national interest.

Supposing that the Board had to build up war reserves of timber supplies. It might not be able to do it. Let us imagine that the limit was imposed. What would the Board in practice do? Would they contract their business? I do not think so. They would demand the full £40 million from the Minister, and they would keep their internal resources available; not put them into long-term investment but keep them available for use as working capital. It might be uneconomical for them to do so, and it might force them to take larger resources than they would need from the Minister for investment.

Mr. P. Roberts

This would be a matter of asking to borrow specific sums from the Minister. We are not talking about day to day administration of the Board, which can borrow from the banks sums to finance its wages or timber. This is a specific demand to the Minister to have so many millions for certain purposes.

Mr. Noel-Baker

It would be impossible to adhere to the £40 million limit, and probably disadvantageous to do so. Last year, I think it was, Mr. Lowe, when he gave evidence before the Public Accounts Committee on behalf of the Coal Board, mentioned that the working capital at a given moment was £44 million—that is above the £40 million—but I do not think anyone would argue that any disaster has happened because of that. If the Board came to the Minister and said, "We have to keep our internal resources for working capital, and we must have larger advances for long-term investment" that is, for schemes for long-term investment such as the Minister might approve, then he would have to make the advances.

I think that the limit proposed would have real disadvantages, and would not promote the objects which the hon. Gentleman and his colleagues have in mind, and I hope that they will not press it.

Mr. Bracken

The right hon. Gentleman preens himself on being a banker. He has many virtues. He is a champion long-distance runner—and his staying power as a speaker is even greater. We have listened to a long account by the Minister, who has been telling us of the banking functions he discharges. I do not think any hon. Gentlemen on either side of the Committee will want to turn Ministers into bankers. First of all, it is difficult to make such a transformation, and no sensible person is likely to trust his money to a politician. That being the generally accepted doctrine of the House, I think we ought to ask the Minister to reconsider his statement rejecting out of hand this Amendment which has been advanced in a most moderate and persuasive way by my hon. and gallant Friend the Member for Heeley (Mr. P. Roberts).

If the Minister has the opportunity, during the week-end, to look into the suggestion he might feel inclined to treat it as he did the last Amendment. I think he ought to try to understand something about banking before he asks us to put confidence in him as a banker. He talked about the Coal Board keeping its accounts at the Bank of England. It is not necessary for them to keep their accounts there. They could keep them at any bank. I expected some hon. Member representing the "Co-ops" to get up and speak for the C.W.S. Until the Minister is instructed in banking he is obviously ill-equipped to give lessons, but he has been courteous to us here this evening, the night is dark and we are far from home and if he will promise to reconsider this matter I think my hon. Friends can readily withdraw this Amendment.

Mr. P. Roberts

There is one other point which I should like to put to the Minister. I hope he realises that we are not talking here of the ordinary borrowing by the Coal Board for its working capital. What we are talking about is the Coal Board being able to say, "Of the extra money we want to borrow so much is to be set aside for working capital." It will not affect the working capital of the Board at any one time unless the amount rises so high that it comes to more than £40 million. I do not know whether the Minister has got that point. That does not arise if the Board want to buy timber or anything like that, but this is where the Coal Board come to the Minister and say, "We are going to borrow an extra £100 million and so much of that will be towards working capital."

At present the Coal Board actually are lending money to the Minister. In the present accounts the Board have lent the Minister £22 million, and, therefore, I do not see why he is so frightened of this. I hope he will think over what my right hon. Friend has said, because it is a point in which I think there is a great deal of substance. I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

10.45 p.m.

Colonel Clarke (East Grinstead)

I beg to move in page 2, line 17, to leave out "twenty" and to insert "fifteen."

Subsection 4 of this Clause deals with the temporary borrowing powers of the Board as laid down under Section 27 of the Coal Industry Nationalisation Act, 1947, which says: The Board may, with the consent of the Minister, or in accordance with the terms of any general authority given by him, borrow temporarily by way of overdraft or otherwise such sums as they may require for meeting their obligations and discharging their functions under this Act: Provided that the aggregate of amounts outstanding in respect of sums so borrowed shall not at any time exceed ten million pounds. In the Bill the Minister is asking that the £10 million should be increased to £20 million, which is doubling the sum. The purpose of this Amendment is to inquire in rather more detail why it is necessary to double the amount. We do not say that it is certain that £15 million will meet the Bill, but we are of opinion that rather more is being asked for than is necessary. It is much easier to raise this matter now than it was on Second Reading.

The Minister was not too clear in the explanation he gave when he raised this matter on Second Reading. He replied with great detail to a number of points outside those relating to finance, but about those on finance he was by no means altogether clear. I gather from his explanation that this is really a matter of short-term policy. Under the Act of 1946 the Coal Board must pay its way, but in some years there may be a deficit. In the first year there was a deficit of £20 million. The Minister hopes that such a deficit will not occur again, but apparently he is a little doubtful about it, which is rather the reason for my first question. It seems to be rather strange that after four years' experience of costs and operation of the industry, the Board should have difficulty in estimating what the possible loss may amount to. They control prices, and, as I have said, they have had four-and-a-half years of operating this industry.

I cannot, therefore, understand why there has to be this margin of error twice as bad as when they started. That is my first question to the Minister. In the past, I suppose, this difficulty has been got over by use of certain large sums which the Coal Board had in reserve. These were used to meet liability when it arose, but as the Minister himself has said, they may not always be able to use these funds. Then, the right hon. Gentleman said that this power will only be used with the control of the House; but how does he suggest that the House will really be able to exercise control over borrowing of this sort—borrowing, presumably, between the Board and the banks? That is my second question.

I presume that what has actually happened is that the original estimate of the working capital required was too low, and was made, presumably on what was necessary when the industry was operated by private enterprise. That tempts me to suggest that the corollary is that, apparently, the former owners could work with less capital, and run the industry more cheaply.

The Board, quite rightly, has made certain economies; one of which has already been referred to tonight. Before nationalisation, the general custom for rail-borne coal was to allow credit to the end of the month following the date of delivery; but now the Board only allows it to the 15th of the month following delivery. If some 150 million tons of rail-borne coal are handled, that is a turnover of about £450 million sterling, and this shortening of credit must achieve an economy of something like £10 million a year. If they have been able to achieve that economy, surely it is another reason for asking why there should be increased powers for borrowing. That is my third point.

But apart from that, it does seem that this rather stop-gap method of financing the industry is not a very good one. If it could be wound up, and the industry wholly financed from working capital, as most other industries are, I think it would be better. But the Bill does not suggest that this change should be made; in fact, it is being perpetuated, and the amount of money asked for in these short-term loans is to be doubled. In moving this Amendment, I ask the right hon. Gentleman if he would answer these three questions.

Mr. Noel-Baker

The hon. and gallant Gentleman asks me why the margin of error has increased since the original Act was passed; he refers to the £20 million, compared with the £10 million. This money, of course, which it is empowered to borrow, namely, from the banks by overdraft or otherwise, is to finance revenue deficits. The Act enjoins the Coal Board to pay its way on average good and bad years. In other words, in some years it may make a loss. In fact, in its first year, it did make a loss of £23 million and it was owing to the purely fortuitous circumstances that it had the other internal resources we have discussed tonight—the workmen's compensation fund, and so—that it was able to get through that period without passing this £10 million limit.

That is why really we think—it is experience which makes us think—we cannot foresee the future; we cannot expect the Board will not ever make a loss. We trust it will not, but it is conceivable it will and it is desirable that it should be empowered to meet it in this way. The hon. and gallant Member asked how can the Government exercise its control. The Minister has to give his consent to any such operation by the Board and they cannot do it until they have asked the Minister for leave to do so.

I think the real purpose of this Amendment is shown by what was said by the hon. and gallant Member for New Forest (Colonel Crosthwaite-Eyre). He said if we had to come to the House for extra powers for temporary borrowing above the £10 million allowed in the original Act the House would know at the earliest possible moment that things had gone wrong. With great respect, I think he will know things are going wrong with the Board long before the present limit of £10 million is reached. This temporary borrowing is to meet a revenue deficit, if the Board is losing money. If the Board is losing money, that appears at once in the quarterly statement of which I have spoken tonight. Anything mat hon. Members may wish to raise and which they think is unsatisfactory can be raised on this statement. To make us come and ask for legislation if there were a deficit of more than £10 million might hamper the Board very much but it might not add to the powers of Parliament to find out what is going wrong. We should know already.

I do not believe that this power is likely to be used. I can reveal something which may not be known. To date, no single borrowing has ever taken place under these provisions for £10 million. The Minister has never given consent because it has never been asked for up to date, but it might be in the future and it might be for more than £10 million. Past experience shows this will certainly not be abused, and therefore, the Committee can safely agree to what we ask. The Opposition, I see, propose an amount of £15 million instead of £10 million, but I hope they will make it £20 million.

Mr. Bracken

The Minister has given an explanation which has impinged, I think, on the authority of Mr. Speaker because he told us now that we can ask questions on the quarterly statement of the Coal Board, which has never been the ruling of the Chair before. He would not make such a statement without Mr. Speaker's permission to do so and we are much obliged to the right hon. Gentleman for obtaining this great Parliamentary reform which we have long sought.

As for the Minister's statement about the authority, as far as I understand the statement—it is rather prolix and to a certain extent confused—he says that the Coal Board need this extra margin, that is, the 50 per cent. margin, and the powers to borrow another £10 million. He explained to us carefully that they have never borrowed in the past but he fears that they may borrow in the future. But he tells us that through this new Parliamentary reform to which he has just referred—rather usurping the position of the Leader of the House, not to say that of the Speaker—that we have means of discovering any losses made by the Coal Board. We know that the Board have made very heavy losses over importing American coal and having to sell it at low prices. That is a heavy loss, but how can Parliament know about that?

Mr. Noel-Baker

I have already said repeatedly in the House, in answer to Questions which were accepted by the Table, that when the transactions were completed I would tell the House all about them.

Mr. Bracken

The Leader of the party to which I have the honour to belong is, I understand, attending loyally to certain sporting interests in the county so well represented as chairman of the council by the Home Secretary, but it is astonishing that the Minister should tell us that we can find out after the event—we certainly can after the horse has left the stable. But what we would like to do is to deal with these affairs in a reasonable time, and we are not allowed to do this.

The Minister says that the Coal Board never borrowed money before, but he thinks it wise that they should be able to borrow £20 million. That is twice the present borrowing power and it is not very reassuring, certainly not to a Caledonian. The Minister's explanation, like the peace of God, passeth all under- standing. On the other hand, I know he means well; there is no doubt about that. But I feel that from the point of view of flocculence no politician has ever equalled the right hon. Gentleman. [HON. MEMBERS: "What?"] Flocculence, to those educated at Harrow, means "woolly." I feel that if we cannot get any better explanation it is because he does not know anything about this. I think he realises that when my hon. and gallant Friend put down the Amendment it was not from a querulous or party point of view, but because we do not understand the necessity—

Mr. Glanville

Hon. Members over there do not understand it.

Mr. Bracken

Neither do hon. Members opposite. But it is strange that the Minister should double the amount. We are willing to take his explanation, inadequate as it is, for granted and I hope my hon. and gallant Friend will not press the Amendment because probably before we finish with the Bill the Minister will see that it is quite unnecessary to double the amount.

Colonel Clarke

I am not satisfied with the Minister's answer and when he reads his speech he will see that what he said earlier is almost exactly a rehash of what he said on Second Reading. We have had the same speech three times, but we are no further towards understanding why this sum should be doubled. My right hon. Friend has got an answer to one question and I am afraid I must abandon the other two to some later date. I beg to ask leave to withdraw the Amendment!

Amendment, by leave, withdrawn.

Clause ordered to stand part of the Bill.