§ 9.59 p.m.
§ The Parliamentary Secretary to the Ministry of Fuel and Power (Mr. L. W. Joynson-Hicks)
I beg to move,That the Draft Coal Industry Nationalisation (Borrowing Powers) Order, 1954, a copy of which was laid before this House on 19th October, be approved.The House will know that this Order was reported by the Statutory Instruments Committee without any comment. The Order stems from the Coal Industry Act, 1951, by which Act the borrowing powers of the National Coal Board for their expenditure on capital account and for working capital were raised to the total of £300 million. Of that total, £152.7 million has so far been borrowed by the Board, which is, therefore, well within the overall limit of its total borrowing powers. The Act of 1951 also limited the annual amount which the Board could borrow in any one year to a maximum sum of £40 million or such greater amount as might be specified in an Order made by the Minister.
The time has now arrived when it is apparent that the needs of the Coal Board for further capital expenditure and working capital in this financial year are likely to exceed £40 million, and it is for that reason that my right hon. Friend has laid before the House the Order for which we now seek the approval of the House.
If I may, I will outline to the House the budget, which I think hon. Members will wish to hear, as to the need for this money. Perhaps I should explain that, if any hon. Members seek to compare the exact figures which I quote with any which may have been quoted in the debate last Monday, they may find themselves in a difficulty. Last Monday's debate was upon the National Coal Board's Annual Report, and dealt with the figures in the National Coal Board year, which is from 1st January to 31st December. Tonight, we are dealing with the provisions of the Coal Industry Act, which deal with the nation's financial year, which is from 1st April to 31st March. Consequently there is necessarily a certain slight discrepancy when one is 337 dealing with figures covering a period of a year.
For this purpose, for the year from 1st April, 1954, to 31st March, 1955, the National Coal Board estimates that it will require to borrow for capital investment and working capital the following sums: expenses on collieries, that is to say, actual capital development in the collieries themselves, coal preparation plants, pithead baths, coke ovens and matters of that sort, the sum of £85 million; for the financing of the Coal Industry Housing Association, the Board reckons that it will spend £15 million; for working capital it will require, owing to increased costs, expenses and expansion of business, an additional £5 million.
We have felt that, as these sums are purely estimates, and as it is exceedingly difficult in the fluctuating circumstances of the time and of the business to be able to estimate with exactitude, it is desirable to add to that total a marginal figure of £5 million, so as to avoid the possibility at the end of the year of the Board being held up on some project which it is anxious and able to initiate, because it has not got the necessary borrowing powers. The House will appreciate that because it has the borrowing powers does not mean that the Board will get the money, but it cannot apply to my right hon. Friend for sanction to borrow unless it has the power to do it.
Against that total of £110 million the Board estimates that it will find by means of depreciation and so forth, out of its internal resources, £35 million. This leaves a balance of £75 million, which is the sum in the Order which the Board will have power to borrow. I do not think that the House will wish me to elaborate further on the details of the work which the Board is doing and which requires this expansion of capital expenditure. They are contained in Schedule I (b) of the Annual Report of the National Coal Board.
We had a very full summary on Monday last of the additional capital expenditure of the Board. My right hon. Friend was somewhat prophetic when, at the conclusion of a substantial portion of his speech which dealt with the subject of capital expenditure, he said:The estimate for this year is £75 million."—[OFFICIAL REPORT, 25th October, 1954; Vol. 531, c. 1623.]338 That is the sum for which we ask the leave of the House for the Board to borrow.
§ 10.7 p.m.
§ Mr. Philip Noel-Baker (Derby, South)
I rise for only a few moments to say that we are in favour of this Order and shall vote for it. It was shown in the debate on Monday last that one of the overriding needs of our national economy in 1954 is the greatest possible investment in our coal mines. We cannot get too much coal in the next 20 years. We need to get the maximum which it is technically and geologically possible to carry out, by way of investment in the sinking of new pits and the reconstruction of existing pits.
The Minister of Fuel and Power and other hon. Members with knowledge of the industry gave a review on Monday last of the great difficulties which the National Coal Board has had, and still have, to face in carrying out this new investment policy. There are engineering difficulties; there is the shortage of engineers, which has not yet been overcome. The building up of the planning teams is not at all a simple matter, even if we had the engineers.
There is one other matter which I had in my notes to mention last week, but which I spared the House, because I did not wish to speak for too long. It is not generally realised, even in the industry, that the Board is doing major reconstruction work in the mines, such as driving new level roads measuring 14 feet by 10 feet or 12 feet, and that owing to that and the fact that many of the seams have much more dirt than they used to have, while there are many fewer seams than 15 years ago which are wholly free of dirt, the discard of dirt and stone with which the Board has to deal, owing to no fault of its own but owing to the fundamental geological facts of the situation, is 17 million tons greater than it was in 1938. That shows that there is a tremendous extra burden on the industry and that we need every modern device and mechanical help that we can get to obtain more coal.
The Parliamentary Secretary spoke of the housing schemes on which large sums of money are being spent. I believe that we could with advantage spend still more. We wish to encourage the Govern- 339 ment in all these developments, and we are very glad to vote for this Order.
§ Question put, and agreed to.
That the Draft Coal Industry Nationalisation (Borrowing Powers) Order, 1954, a copy of which was laid before this House on 19th October, be approved.