HC Deb 15 April 1953 vol 514 cc331-42

Motion made, and Question proposed, "That this House do now adjourn."— [Mr. Redmayne.]

10.6 p.m.

Mr. Gerald Nabarro (Kidderminster)

I intend in a short speech to make reference to one aspect of the coal situation alluded to in a different context by the hon. Member for Gloucestershire, South (Mr. Crosland) a few moments ago. I intend to draw attention to three aspects of the house coal situation; namely, the price, the quality and the rationing system, which has now been in force for 10 years or more. There is a general feeling that the price of house coal is too high, that the quality is too low, and many members of the general public question whether the existing rationing system should now be continued.

Before I pass in some detail to those issues I wish to say something about the trends in use of the various forms of fuel in the household during the post-war period. The Minister of Fuel and Power has said on several occasions in the lifetime of this Parliament that it is the policy of Her Majesty's Government to encourage free competition between the nationalised industries in the sale of the various forms of fuel. I have on previous occasions questioned the wisdom of that policy in existing circumstances. It is an undeniable fact that, whereas today electricity and gas remain unrationed and both are used for household heating purposes, solid fuel in the form of coal and coke is severely rationed, and the tendency has, therefore, been during the past few years, particularly since 1945, for an artificial demand to be created for electricity and gas due to the shortage of house coal and coke for domestic space heating.

There is ample statistical evidence of the rise in consumption of domestic electricity between 1945 and 1950. The amount of electricity used in the households of this country increased by 70 per cent. in that span of five to six years. I would not suggest for one moment that all of that was on account of domestic space heating. There has, of course, been a great and very desirable increase in the use of electrical appliances other than heaters and all of us support that, but a very large part of the increase in the domestic use of electricity has been on account of domestic space heating, a purpose for which, in my view, electricity is not particularly efficient.

The figure of 70 per cent. compares rather unfavourably with the increased use of electricity for industrial purposes. In the same period of five to six years industrial electricity consumption increased by only 18 per cent. In other words, consumption of domestic electicity increased by nearly four times as much as industrial electricity and that at a time when all of us should have been concerned primarily with increasing the electric power available to the elbow of every workman in every workshop in Britain. I believe, with good cause from those figures, that industrial power development in this country in the post-war period has been mortgaged and jeopardised very largely by the demand for domestic electricity, notably for space heating. However, that is only a general background to the post-war period.

Let me now deal specifically with the three issues in connection with house coal. I said that the first is the price of house coal. Taking an average grade, it is approximately £5 a ton near the coalfields, goes up to more than £6 a ton in London and ranges as high as £7 15s. a ton in Cornwall and other remote parts of the United Kingdom. House coal is severely rationed. North of a line from approximately the Wash to Bristol a householder can have 50 cwt. of coal a year, but south of the line he can have only 34 cwt. a year.

Today, the situation has arisen that one in four households are unable to afford to buy more than the existing ration of house coal. That is not a surmise on my part, but has been brought out very clearly and graphically by a recent survey conducted by the Coal Utilisation Council, which was published only a few weeks ago. Careful inquiries were made in 2,000 households in all parts of the country, and that statement of one in four who cannot afford more household coal was before the recent increase of 5s. 6d. per ton in the price of coal. It follows, therefore, that the percentage who cannot afford more household coal is probably greater as a result of the increased price.

I should like to pause here to say that many hon. Members of this House and of the general public are somewhat mystified to know exactly how the 5s. 6d. per ton for coal increase in price has been made up. Only a few pence per ton is on account of miners' wages. We know part of it is for the loss made by the Coal Board last year, we know that there is an allowance for export losses, and we know that certain excess depreciation factors for plant and equipment enter into consideration.

What I am concerned with at the moment is the future trend in the price of coal, because whereas 5s. 6d. per ton was only put on a few weeks ago it was substantially to make good the loss down to the end of 1952. Last year, the National Coal Board succeeded in selling in Europe about 8 million to 9 million tons of coal at a substantial export differential, which brought them in 15s. to 25s. per ton more than for the price of coal sold in this country.

Today, the export markets are hardening against us. American high grade coking coal is being sold in Rotterdam on a c.i.f. basis at a lower price than British coal of approximately equivalent quality and the American coal has 2 per cent. less ash content than the British equivalent. The concomitant of this is that with hardening export markets we shall find it infinitely harder in 1953 to maintain our export differential, and as the export differential wanes, so the National Coal Board will have to make good the loss in respect of the differential, by adding it to the home price of coal.

I believe, therefore, from a very careful study of these price trends, that before 1953 is out we shall witness a further increase in the price of coal which may be to the householder and to industry anything from 5s. to 7s. per ton. That will have the effect, of course, of making it even more difficult for those householders who cannot afford to buy their full ration of house-coal.

Mr. W. R. Rees-Davies (Isle of Thanet)

Perhaps my hon. Friend will deal with a matter which arises from the price of coal, the astonishing anomaly which exists at present in some towns and of which my hon. Friend may be aware. May I draw the attention of the House to the fact that there is an Act of Parliament, dated 1792, which affects some towns and which, in particular, affects towns in my constituency. It is a remarkable fact that today, in the town of Ramsgate, for example, the price of coal is 2s. more per ton, as it is on all solid fuel, than the price which exists in other towns.

Mr. Speaker rose—

Mr. Rees-Davies

In the case of—

Mr. Speaker

Perhaps the hon. Member does not know that he should sit down when I rise. He is new to the House. This is a rather long incursion into the very limited time that the hon. Member for Kidderminster (Mr. Nabarro) has at his disposal.

Mr. Nabarro

I am deeply sympathetic with the local problem to which my hon. Friend has drawn attention, and I am sure that the Parliamentary Secretary will use his utmost influence with the Coal Board and their Marketing Director to have the anomaly speedily removed.

I pass from this question of price to the equally difficult problem of the quality of house coal, about which there is widespread complaint. I do not deny for one moment that the Coal Board must perforce, in present circumstances, work seams at greater depth, or which are more difficult, thinner or more remote, and are often dirtier, but the consumer ought to be protected against the depredations of a malignant monopoly, because he has no alternative source of coal supplies.

In the course of the last few years the Coal Board have been investing, rightly, large sums of money in mechanical development in the pits. They have invested a larger percentage of their money in cutting and underground transport equipment, largely to the detriment of cleaning and washing equipment at the pithead, and the development between these two classes of equipment has evidently got out of balance.

I hope that my hon. Friend the Parliamentary Secretary will deal with this point in some detail when he replies, because it is very necessary, if the householder is to be called upon to pay still higher prices, that he should get good coal, and not brickbats, rubbish, bits of conveyor belt, and so on; malpractices against which he has little or no protection. There should be an increased capital allocation for cleaning and washing plants to overcome this difficulty

Now I pass to the third point, the continuance or otherwise of the house coal rationing system, which springs from the Coal Distribution Order, 1943. The householders are now taking about 32 million tons of coal per year. In pre-war years they took 43 million tons, and the difference is the decrease in domestic consumption, which has thus dropped by approximately 25 per cent. The Coal Utilisation Council's Survey, published in February of this year, speaking about the additional demand which might arise if house coal were derationed, said: Forty-four per cent. of households claim to have needed more solid fuel than they got and each said they would like an average of an additional 14 cwts This is equivalent to about 6 cwts. [per annum] for every household throughout the country, or a total of approximately 4½ million tons, a figure which is remarkably close to the Ridley Committee's estimate that the current unsatisfied domestic demand for coal is about 5 million tons a year. Thirty-nine per cent. of families would definitely buy more coal if they could, and 11 per cent. would possibly buy more. About one out of two coke users would buy more. They continue: In other words 24 per cent. of all housewives cannot afford more coal at present prices even if they need more. That was before the increase of 5s. 6d. per ton.

House coal today is rationed by the purse. If a free market were restored in house coal there would not, I believe, be any very great increase in the demand for it. I estimate that more than two families in five cannot afford to pay the greatly increased price for house coal. I am a firm believer that if house coal were placed on a free market and rationing were ended, there would be a substantial diminution in the use of electricity and gas for space heating. The hon. Member for Cleveland (Mr. Palmer) nods his head—

Mr. Arthur Palmer (Cleveland)

I shook my head.

Mr. Nabarro

I imagined that the hon. Gentleman was indicating dissent. I will send him a copy tomorrow of the Survey into the Domestic Use of Solid Fuel, issued by the Coal Utilisation Council.

Mr. Jack Jones (Rotherham)

Send us all one.

Mr. Nabarro

There is this rather significant statement in it—that if coal were derationed, much less consumption of gas and electricity for domestic use, notably electrical space and water heating for which purposes electricity is most wasteful, would accrue. About 15 per cent. of all homes would save electricity and 13 per cent. would save gas.

What the net overall economy would be is imponderable, but it is undeniable that, if house coal were derationed, there would be a compensating coal economy at electricity power houses and at the gas works in respect of coal at present consumed there for the production of those services. There is the additional consideration that year by year now, we are putting into the homes of this country 1½ million or more modern solid fuel-burning appliances which economise in the use of coal. They bum smaller and poorer grades of coal than we have been accustomed to hitherto. I have always regarded as the counterpart of mechanisation in the pits a necessity to introduce into our homes the maximum possible number of improved modern appliances in order that smaller and lower quality grades of coal can be employed without loss of comfort to British households. It leads also, of course, to a decline in house coal demand if those trends continue.

My final point in this section is in connection with the administrative costs of household rationing. My right hon. Friend informed me recently, in reply to Parliamentary Questions, that we are at present employing 1,100 part-time fuel overseers and 350 full-time fuel overseers, a total of 1,450 persons in all parts of the United Kingdom for the purpose of carrying out the domestic rationing of coal and coke. The cost to the taxpayer is £1½ million a year. Therefore, it would mean a significant economy if house coal rationing were abandoned at a fairly early date.

We can argue indefinitely that because of the overall shortage of coal, house coal rationing cannot be ended. That argument can be made in every year and in any circumstance to suit the economic climate of the moment. What is quite certain is that if we decided to abandon house coal rationing, for many of the powerful reasons I have advanced this evening, it must be done in the springtime and not at the beginning of the coal winter, that is, at the end of October. If we do it in the springtime, we give all householders an opportunity to stock up with solid fuel, as far as they are able. during the summer months.

Summarising what I have said, I believe that it might be possible, in the course of the next few weeks to abandon house coal rationing. It is already rationed, in degree by its high price and that will be accentuated in the course of the next few months for the reasons I have given. Any increased demand that resulted from derationing would, in large measure, be offset by compensating economies at electricity power houses and at the gas works.

There is an increased and increasing flow of domestic modern solid fuel burning appliances which would limit any immediate upsurge in demand for house coal. Finally, in conformity with the policy of Her Majesty's Government— and we are talking in the Budget period —it is desirable to try to save that £1½ million in administrative costs, if we can possibly do so, and economise with the labour of 1,450 persons.

I hope that my hon. Friend will deal with these arguments shortly, under the three headings: the price of house coal, the quality of house coal, and the future of the rationing scheme. Although he may not be able to meet me in full measure tonight, I hope that in the course of the next few months he will view my supplications with a good deal of generosity.

10.25 p.m.

The Parliamentary Secretary to the Ministry of Fuel and Power (Mr. L. W. Joynson-Hicks)

My hon. Friend the Member for Kidderminster (Mr. Nabarro) has given us, as usual, a good deal to talk about in rather a short time. I should like very much to be able to follow him right through the speech which he made, but I assure him first and foremost that any matters which he puts before us will always be considered with, I hope, generosity. Secondly, I assure my hon. Friend that we are in the deepest sympathy with his desire to save £1,500,000 of the taxpayers' money, whether it be by the revocation of the Coal Distribution Order, 1943, or in any other practicable way that we can find.

The point which my hon. Friend particularly stressed tonight is his desire for the derationing of house coal. That links up, of course, with the revocation of the Coal Distribution Order. That is a desirable project, and my hon. Friend indicated that, in his view, it would not lead, immediately at any rate, to any appreciable increase in the consumption of household coal. Against that, however, he also quoted the opinion which was expressed by the Ridley Committee very recently, that there was an unsatisfied demand of 5 million tons of household coal. He also quoted the survey of the Coal Utilisation Council, which is of still more recent date, who estimated as a result of this survey that there is an unsatisfied demand of 4,500,000 tons. Therefore, I do not think it would be possible to embark upon any scheme which would result in doing away with the allocation system for household coal unless there were adequate supplies—

Mr. Jack Jones

Hear, hear.

Mr. Joynson-Hicks

—which could be used to ensure that people were able to get their needs.

Mr. Jones

Some of the poorer people.

Mr. Joynson-Hicks

I quite agree that poor and rich should be treated alike in that respect.

My hon. Friend has studied this matter with great thoroughness and has been good enough to be in communication both with myself and with my right hon. Friend as to the possibilities of being able to divert coal suitable for the household market from other sources. It has been suggested from time to time, though not tonight, that the electricity industry, among the very large quantities of coal which it consumes, is consuming coal which is suitable for the household market. I have investigated that and I find that it only has 14,000 tons a year, which really is an insignificant figure.

Is it possible to divert from the gas industry coal which is suitable for the household market? The difficulty is that gas coal is itself in short supply. It is difficult to get sufficient coal for the gas industry to begin with, but if we reduce the amount of coal available to it, consequently we reduce the amount of coke which is available also for the household market and this coke is eminently suitable for burning in the improved appliances to which my hon. Friend has referred; and so we cannot go there.

What about general industry? Ever since 1943, long before nationalisation, a very real effort has been made, both by the Ministry and through the trade, to ensure that supplies of large coal suitable for the household market were not used in industry if it was possibly avoidable. There are, however, certain industries which need those supplies. If they did not need them, it is almost inconceivable that they would use them, because there is a very strong price incentive for them to use the smaller, cheaper coals.

The iron and steel and sugar beet industries all need quite a lot of coal in their locomotive engines. The engineering industry, as the hon. Member for Rotherham (Mr. Jack Jones) knows full well, uses it for annealing furnaces, and must have large coal for that purpose. There are many hand-fired vertical boilers, as my hon. Friend will be well aware, which need large coal throughout industry.

Mr. Jack Jones

Too many.

Mr. Joynson-Hicks

I agree. There are many hospitals and institutions, as well as Service Departments and hotels, which also need large coal for open fires; but it is not technically called house coal because it does not come into the house coal category in the ordinary way, but is large coal which appears in the industrial allocations. There is also the large coal which is necessary and essential for us to send to Northern Ireland and to the Channel Islands, and for coastwise bunkering and matters of that sort.

The only possible source, and one well known to my hon. Friend though he did not mention it particularly tonight, is the railways. I was interested last week to learn that Germany, efficient as we believe them to be, certainly seemed to be no more efficient in their coal utilisation on the railways than we are. But that is not saying very much. I do think that there is still an urgent need for the Transport Commission to reconsider this matter of their use of large coal before the supplies of large coal cease to be available for them. It is no good them coming along at a time when, as my hon. Friend has warned us, the available supplies of large coal are diminishing, and saying, "We have no alternative on which to run the railways; we must have large coal."

Where does all this lead us? If we were to assume that there was the large coal available to deration—and it is a very big assumption and one which I cannot accept myself—I would ask my hon. Friend to turn back to his Coal Utilisation Council's survey and consider table 14, because there we have a very interesting point. My hon. Friend is well known to the whole House to be the prime advocate of fuel efficiency. Yet in table 14 we read that, according to the survey, 95 per cent. of the people met with would not at present consider installing an open grate with a back boiler; 83 per cent. would not consider installing a continuous burning fire, and, in fact, over 90 per cent. would not consider installing any form of improved appliance at all.

What my hon. Friend is really advocating is that we should divert an estimated amount of about 5 million tons of coal to the house coal category to be consumed in the most inefficient way known to the fuel efficiency experts at the present time, and divert it at the expense of electricity and gas which are admittedly efficient methods of consumption.

Mr. Nabarro

I am sure that my hon. Friend would not wish to misquote me. I do not admit that the unsatisfied demand, taking into account all the factors mentioned, is anything like 5 million tons.

Mr. Joynson-Hicks

I appreciate that my hon. Friend does not admit it, but there must be some form of unsatisfied demand, and that is the effect which it would have.

May I add one word about the question of the possible rise in coal price to which my hon. Friend referred? If I heard him aright—and I may not have done so—I think he said that the recent rise of 5s. 6d. was to cover the loss in 1952.

Mr. Nabarro

Substantially.

Mr. Joynson-Hicks

Well, that is not so. My hon. Friend is in error there. It was specifically to prevent a loss in 1953. If I may refer my hon. Friend to the statement issued by the National Coal Board on 21st February last, it said then that the pit-head price of coal must be increased by 10 per cent. in order that the Board may avoid incurring a further loss in 1953; it added that it will, however, cover the anticipated rate of loss during 1953. In addition to that, I would remind him that the Chairman of the National Coal Board, in his "Face the Facts" conferences that he has been holding, has repeatedly emphasised that we have reached the limit of increased coal prices. On top of that I would remind the House that the Secretary to the National Union of Mineworkers, with his colleagues co-operating in the "Face the Facts" conferences, is quoted as having stated that the reforms which he is, naturally, advocating—a genuine five-day week, and increases in wages and pensions —all depend on increased efficiency within the industry, and there is no suggestion that they are to come out of any increase in the price of coal, at any rate during this year. I wish to emphasise that in case of any erroneous impression which my hon. Friend's words may have caused.

In conclusion, and wishing I had the time in which to deal with other points my hon. Friend raised, I would simply say that I am entirely in agreement with him as to the desirability of revoking the Coal Distribution Order of 1943 as early as possible—

The Question having been proposed after Ten o'Clock, and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at Twenty-four Minutes to Eleven o'Clock.