Capital Expenditure

HC Deb 04 July 1955 vol 543 cc761-2

36 and 37. Mr. Grimond

asked the Minister of Fuel and Power (1) how it is intended to finance the capital programme of the National Coal Board over the next five years; and how the Board's account stands at present with his Department and the banks; and

(2) what is the estimated capital expenditure by the Coal Board on major productive schemes over the next five years.

Mr. Geoffrey Lloyd

The Board's future capital expenditure programme is at present under review but is expected to include expenditure of about £100 million a year on collieries and associated activities. It will be financed as hitherto from the Board's internal resources and by advances from me which now amount to approximately £200 million. No borrowings have been made from the banks.

Mr. Grimond

Does not the Minister think that this is a rather unsatisfactory method of financing a very large capital programme? Would he not consider having some examination made of the methods of providing capital for all the nationalised industries so that some comparison could be made between them and we can see how the amount placed to the coal industry compares with that to atomic energy, for instance, or to other comparable industries?

Mr. Lloyd

I will see whether such a statement could be prepared.

Dame Irene Ward

Would it not be a good idea, before embarking on additional capital expenditure, to know whether we shall get a return on our capital? Is it not a fact that we are getting into an awful muddle in the coal industry and that something ought to be done about it?

Mr. Lloyd

I would point out to my hon. Friend that in the original plan for coal it was always understood that about two-thirds of all the capital expenditure under that plan would be necessary to make up for the running out of facilities, which is inevitable in an extractive industry.

Dame Irene Ward

Would the Minister explain how it is that we have been spending large sums on capital re-equipment for years without adequate results?

Mr. Lloyd

In fairness to the coal industry, it must be remembered that the sinking of new mines takes up to ten years and major reconstructions of pits takes between five and eight years. The results which we are now getting therefore depend fundamentally on the capital expenditure on major reconstructions which took place seven or eight years ago. We have increased the rate of capital expenditure nearly three-fold since we came into office, but we shall not get the benefit of that until a number of years have passed.

Mr. B. Taylor

Is the Minister aware that output at the face and overall output in 1954 continued to increase and that one of the main problems in the industry is lack of manpower?