§ 10.11 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, 1955, a copy of which was laid before this House on 21st June, be approved.This Order was reported by the Statutory Instruments Committee without comment.
At the end of last year I moved a similar Order for 1954, and at that time I explained very fully to the House the statutory reasons for which it was necessary for the National Coal Board to have an Order moved on its behalf by the Minister in the event of the Board anticipating that it would require to borrow more than £40 million in any one year. The House may therefore not wish me to go into that detail again.
The House will probably agree that we have discussed the industry's needs for money fairly fully during the earlier part of the day and it may not be desirable or necessary for me to go into much detail about that aspect. The figure which appears in the Order stems from that contained in the Financial Return laid before the House in connection with the Budget in the usual way, when it was anticipated that for coal nationalisation, working capital etc., some £95 million would be required. That is the net amount referred to in the Order.
The National Coal Board is likely to require in all about £105 million during the year for capital expenditure on its collieries, coke ovens, and so on, about £3 million for the Coal Industry Housing Association in connection with the building of new houses, and about £27 million 506 for working capital. That makes a total of £135 million, of which the Board will find, as usual, about £40 million from its internal resources as a result of depreciation allowances and so forth. That leaves the net sum of £95 million, which is the subject matter of this Order.
I do not propose at this hour to introduce the subject at further length, in view of the debate we have had, but, in the event of any right hon. or hon. Member wanting more detailed examination of the matters involved, I shall be very happy to comply in replying to any questions they may ask.
§ 10.15 p.m.
§ Mr. Harold Neal (Bolsover)
I do not intend to detain the House for very long in speaking on this Order. I shall endeavour to be as brief as is consistent with clearness in what I have to say.
The conclusion might be drawn from some of the speeches which we have heard today that some hon. Members believe that the coal industry is no longer an important factor in our economy. Because we do not share that view, because we do not believe that this industry is dead and done for, because we believe that it still has an important contribution to make to the economic life of this country, I am glad to announce Opposition support for this Order.
The ceiling of borrowing powers authorised by the Coal Industry Nationalisation Act, 1946 had to be raised in 1951 to meet increasing expenditure. Without lapsing too much into reminiscent mood, I cannot forbear to mention that it is passing strange how the responsibilities of office change opinions. When the borrowing powers for the National Coal Board were increased in 1951 the present Minister of Fuel and Power assisted some of his colleagues—and, incidentally, some of those who have been his bitterest critics in the past few weeks—in an attempt to resist the Labour Government in increasing those borrowing powers. The speeches which the Minister made when 507 on this side of the House must make strange reading to him today. The humblest moments of his life must be when he compares those speeches with what he has said today. However, we shall give him credit for having adjusted his opinions to reality.
Since the enactment of 1951, the development plans of the Coal Board have rendered the £40 million to which the Parliamentary Secretary referred totally inadequate if the industry is to increase, or even to maintain, its present production. We have heard a great deal today about manpower. I am not very sanguine about any immediate improvement in the manpower position, but the only alternative to another 50,000 recruits to this industry is the speedy introduction of more mechanical power to assist the miners in getting the coal which the country so badly needs. Reorganisation of existing collieries, the sinking of new shafts, the erection of coke ovens and coal preparation plants, all represent a formidable programme which the Coal Board contemplates in its capital expenditure.
In addition, the Coal Board has accepted increased obligations to the Coal Industry Housing Association. Whatever views there may be about whether the Coal Board or local authorities should do that job, the fact remains that houses for miners will provide an acceleration to the manpower for the industry and to the output of coal. Most of all—this is not properly appreciated by critics of the industry, and in this connection I dissent from what was said by the hon. and gallant Member for South Fylde (Colonel Lancaster)—the geological abnormalities with which the Coal Board and the industry are today confronted are greater than at any time since coal became the main source of heat and energy in this country. In view of all these considerations, the case in support of this Order is overwhelming.
I would add one reservation. The Plan for Coal envisaged production over fifteen years. That plan ought to be reexamined every year. We need a one-year plan concomitant with the 15-year plan. I beg the Minister not to think too much of making good the gap in coal supplies by the use of oil. We ought to try our very best to fill the gap with coal produced and coal saved.
508 One further point requires elucidation. I gather, from what the Parliamentary Secretary said, that in 1955–56 the Coal Board requires £135 million, £95 million of which is provided for in the Order, and that £40 million is expected to be available from internal resources. I should be glad if the Minister would explain how this optimistic figure has been arrived at by the financial pundits of the Coal Board. The present trends in the industry do not seem to me to indicate that anything like this figure will be available from internal resources. We ought to be certain that this Order will be sufficient without the House having to be asked for further consideration. With these reservations, we welcome the Order, which, if it were necessary, we would support in the Division Lobby.
§ 10.21 p.m.
§ Dame Irene Ward (Tynemouth)
I do not want to detain the House for very long but there are one or two points on which I should like elucidation. I have listened to most of the debate today and I should have liked, Mr. Speaker, to have caught your eye and to have taken part in the general discussion. It is rather interesting that when we deal with borrowing powers and providing money for the Board, the general heat of the debate having subsided, there seems to be a disinclination to discuss in detail what we are to get for our money.
I come from very near the Border, and I like to have value for money. During the whole of the speeches I have heard and from a fairly detailed reading of the Annual Report and Statement of Accounts of the Coal Board, I do not seem to have heard or read anything concerning the quality of the coal which is produced. I am very surprised about that. The past is past, but we are now concerned with money for the future, and I want to know whether we can expect an improvement in the quality of the coal for the money we are spending. I also want to know if there is any likelihood of an increase in the calorific value.
Over a long period of years, I have taken a real interest in the progress of the mining industry. When we began, after the war, a major increase in mechanisation, we were always told that in the early stages of the provision of the machinery for washing and grading and dealing with the new type of coal 509 which was produced as a result of the introduction of the mechanical cutters and so on, it was impossible to provide both the mechanical cutters and the machinery to produce a finished commodity which would be more acceptable both to the domestic consumer and to the industrialist.
We were told that in due course a great deal of the outlay following mechanisation would be used in developing coal-washing machines and the like, and that in due course we should see an improvement in the quality of coal. Now, some years later, all the idea of improved quality seems to have gone by the board. That is not meant to be a pun on the Coal Board. That idea of improved quality has disappeared, and if we are going to spend this vast sum I want to know what we are to have in return, and whether the domestic consumer may expect better quality coal. The domestic consumer was hardly discussed in the debate today.
§ Dame Irene Ward
I mean cleaner coal and better quality coal of a higher calorific value, and not an increased price for coal which consists of a lot of coal and dirt.
I have been examining this great volume, the Annual Report and Statement of Accounts of the National Coal Board, in some detail. No doubt, Mr. Deputy-Speaker, you will be pleased to hear that I shall not read out every detail, but I was very interested in some of the items in the summary of major capital schemes for 1954. I see that in the Northern Division money has been spent on a new surface mine, on the reorganisation of the Rising Sun Colliery, on the reorganisation of the colliery at Weetslade, on a new central coal preparation plant at Weetslade, on reorganisation at Bates Colliery, on extensions to the Ashington internal railway, on new area workshops and stores in Northumberland, on the reorganisation of Ellington and Linton Collieries, on a new surface mine at Longhirst Drift Colliery, on the reorganisation of Lynemouth Colliery and on a new central coal preparation plant there, and on reorganisation at Shilbottle Colliery in Northumberalnd and Solway Colliery in Cumberland.
510 All the capital amounts involved and the amount of expenditure up to date are included in the annual Accounts, but I have searched from cover to cover in the Report to find the actual result, either in production or quality of coal, from this detailed expenditure, colliery by colliery. I ask my hon. Friend the Parliamentary Secretary to the Ministry of Fuel and Power what will happen when we have a similar debate next year and the money which it is proposed we should vote tonight for carrying out the Coal Board's operations has been spent and the next annual Accounts are produced and the detail of capital expenditure colliery by colliery is embodied in that report.
I ask whether we can carry the analysis a little further so that we may know whether we have an increased output per man-shift per colliery and whether the quality of the coal produced as a result of this reorganisation is better. It would be of very great interest to all of us who want to see our mining industry prosper if we had a very much more detailed account of the result from the money spent.
§ Mr. Deputy-Speaker (Sir Charles MacAndrew)
That would be very interesting but it would not relate to this Order, which is concerned with the aggregate amount of the advances in the financial year ending on 21st March, 1956.
§ Dame Irene Ward
I ask for the future whether it is the intention of the Parliamentary Secretary, in consultation with the National Coal Board, to let us know the result of the expenditure, colliery by colliery. Is it his intention to let us know whether the collieries on which we have spent money show an improvement in production compared with the production of collieries on which we have not spent money, and whether the kind of coal produced from the collieries on which we have spent money is better than that obtained from those on which we have not spent money? It seems to me that if we are to be faced with a permanent decline in manpower in the mining industry it is questionable whether we are wise to spend vast sums of money which in future may produce no return.
The other point I wish to raise, and which I think will be in order because the National Coal Board capital account 511 is mentioned in the Explanatory Note to the Order, is that I am in favour of giving the mining community the best possible type of house, but I find, when application is made to the National Coal Board for houses for certain colliery undertakings, that houses can only be built if the colliery has a reasonably long life before it.
That may be very well for the new collieries that we are busy developing, but I think it is equally important that miners working in the less attractive pits should also have proper amenities and proper housing conditions. When a colliery is worked out there seems to be no reason why the National Coal Board cannot then sell the houses to the local authorities to be included in the local authority housing pool.
I very much resent having to vote money for houses for miners if the miners who live in my constituency are precluded from sharing in those new houses. I should like to receive an undertaking from my hon. Friend that he will have a word with the National Coal Board so as to ensure that all the miners, particularly those working in the older coal fields, will have an equal opportunity to have these houses. I come from Northumberland, where we have a very old tradition of colliery working. Everybody is conversant with the term "carrying coal to Newcastle." We have a long tradition, and many references were made to it in the previous debate. I should like that long historical tradition to be recognised by the Coal Board in order that the miners in Northumberland should also have good housing conditions.
Before I agree to voting money which is raised from people all over the country and is to be used for amenities for colliery undertakings, I want to know that something can be done for my part of the world. That is all I have to say, though I regret that, because of the rules of order, I cannot say a great deal more of what I think about the mining industry in general.
§ 10.33 p.m.
§ Mr. Arthur Holt (Bolton, West)
We are being asked tonight to pass this Coal Industry Nationalisation (Borrowing Powers) Order, and in the context of the debate which has just concluded I think it is extraordinary that we should be 512 asked to do so. Every hon. Member who spoke in that debate was most concerned about the present fuel shortage, and various suggestions were made to try to deal with that problem. I do not feel that the House can be certain that, in fact, the problem is going to be dealt with. Indeed everybody, including the Minister, is bound to be worried for quite a long time about the coal shortage.
The Minister made a very important statement early in the speech with which he opened the debate on the National Coal Board's Report and Statement of Accounts. I hoped that he was going to follow it up by an even more important announcement, but as I had received answers from him on the same issue, I expected to be disappointed—and I was. He said that the most powerful blow for coal economy since the war was, in fact, the recent price increase. If we cannot produce more coal by one means or another, there is still one thing we can do, and that is put the price up still further.
We are here being asked to allow the National Coal Board to borrow more money. Is this not ridiculous with British coal in short supply and at a lower price than coal anywhere else in Europe? It is not the market price; it is an uneconomic price. This has been attacked by several hon. Members. I am disappointed that the right hon. Member for Battersea, North (Mr. Jay) is not here. On 11th July he asked the Minister to give a general direction to the Board to sell coal to industry in the United Kingdom at world prices—
§ Mr. Holt
I am sorry if I was out of order, Mr. Deputy-Speaker. I was merely trying to develop the argument that the Order would be unnecessary and the Minister would not have to ask the House to sanction increased borrowing if he raised the price of coal still further, and that would help to solve some of his other problems. I should have thought that that argument was in order because its line is that we should reject the Order because the Minister has not pursued a different policy in another direction.
§ Mr. A. G. Bottomley (Rochester and Chatham)
In view of your Ruling, Mr. Deputy-Speaker, the matter need not be 513 pursued, but perhaps you will permit me to point out to the hon. Member for Bolton, West (Mr. Holt) that my right hon. Friend the Member for Battersea, North (Mr. Jay) is in the Library, and can attend here if required.
§ Mr. Holt
I am sorry. I did not mean any personal reflection. It was merely that I regretted that the right hon. Gentleman was not here because he had previously made a remark which was relevant. The hon. Member for Bolsover (Mr. Neal) said he supported approval of the Order, and I thought that was rather in contradiction of the line taken by the right hon. Member for Battersea, North.
I feel that we should begin to take a more realistic attitude towards the price of coal, however unpleasant that may be. I do not like suggesting that the price should be further increased. I do not wish to pay more for coal, and I do not want my constituents to have to do so, but the fact is that when coal is in short supply—
§ Mr. Deputy-Speaker
We are concerned with capital expenditure and not the price of coal. I cannot allow the hon. Gentleman to pursue that line of argument.
§ Mr. L. M. Lever (Manchester, Ardwick)
Is the hon. Member for Bolton, West (Mr. Holt) suggesting that old-age pensioners should be included among the users of coal who ought to provide the capital expenditure?
§ 10.39 p.m.
§ Sir Victor Raikes (Liverpool, Garston)
I wish to detain the House for only a moment or two, and I shall do my utmost to keep in order.
514 The hon. Member for Bolsover (Mr. Neal) made an observation which should be contradicted. He suggested that there were hon. Members on this side of the House who might be opposed to the Order because we regard the coal industry as being a dying one. That is not the view of any hon. Member on either side of the House. Whatever borrowing powers may be granted, the greatest danger—it is something of which I am afraid sometimes—is any suggestion that alternatives will take the place of coal. If that suggestion is rubbed in too much, we shall get no recruitment at all to the coal industry.
§ Sir V. Raikes
I can assure the hon. Gentleman that I have read my own speeches, and his—and mine are a good deal better. I will leave it at that.
I wish to support all that was said by my hon. Friend the Member for Tyne-mouth (Dame Irene Ward). She managed to keep in order, as I am endeavouring to do. If I say that every point she raised was not only relevant to this discussion but to the previous debate—and of value—I think that I shall still be in order. My main point is that it is all very well for us calmly to say that we are prepared, on the recommendation of the Coal Board, to give these extra powers. But I want the Government to take at any rate some steps to ensure that in the future we get rather more reliable forecasts from the leaders of the Coal Board than in the past regarding prices, production and manpower. Unless we are satisfied that the forecasts of the Board are broadly correct, the House may find itself in grave difficulties by giving borrowing powers to a body whose views have been so falsified in the past few years.
I do not think that I shall be out of order if I quote one example. Of course, if Mr. Deputy-Speaker says that 1 am out of order, I shall be, but I think I am safe in making this point. In 1954 the chairman of the Coal Board made a definite statement that the effects of the capital development and reconstruction programme would be seen by 1956. But on 24th June this year he made another statement in which he said that we shall 515 see no effects from that programme until the autumn of 1957. If within twelve months the chairman of the Coal Board can alter his own forecast by no less than eighteen months, it is conceivably possible that the advice given to my right hon. Friend about the borrowing powers needed in 1956 may be as "cockeyed" as the conflicting advice given between 1954 and 1955 by Sir Hubert Houldsworth. I should probably get into trouble if I went into detail about the conflict—
§ Mr. A. Roberts
If the Chairman of the Coal Board does not do so, or the Minister, I invite the hon. Member to visit a colliery close to where I live which was closed in 1941 and reopened by the Coal Board in 1948. In company with the Minister, I visited that mine three weeks ago. The £500,000 spent on it has been repaid. and the pit is showing a handsome dividend.
§ Sir V. Raikes
I accept what the hon. Gentleman says, but I do not know what it has to do with the observations I was making. I have never suggested that reconstruction is not of vital importance. I have never suggested that efforts—and successful efforts—have not been made to open collieries which have been closed down, and so on. The point which I wish to make, however, and which I am afraid the intervention of the hon. Member will force me to repeat, is that the chairman of the National Coal Board solemnly states, with all the authority at his command, in 1954, that we shall see the beginning of results from capital reconstruction by the beginning of 1956, and then says, this year, that we shall see no real results until the autumn of 1957. We are getting statements which make one a little alarmed about the accuracy of many of the statements made on behalf of the National Coal Board.
I think that, perhaps, Mr. Deputy-Speaker, you may rule me out of order, but I should like to say that every statement of Sir Hubert Houldsworth has generally been falsified within six months; every statement relating to production which has been made by the chairman of the Board has generally been amended or withdrawn within nine months, and so far as manpower is concerned—to which the hon. Member for Bolsover referred—the chairman stated at one 516 Press conference that lack of manpower was not the difficulty at all—that was in June last year—while by January of this year he said that it was "a vital question." It is not for me to go into details about these statements, but in view of the conflicting announcements in the last year or two which have come from official quarters, I think that I can ask the Government, once again, to try to ensure that there is a little more accuracy in the forecasts made by whoever may be the chairman of the Coal Board in the years ahead.
§ 10.48 p.m.
§ Mr. John McKay (Wallsend)
I did not expect to speak today, but we now come to the concluding part of our debate on the coal situation. This seems to be another sort of coal debate, arising out of the discussion which has just taken place, and I thought it necessary for me to show an interest in some of the collieries which were mentioned by the hon. Lady the Member for Tynemouth (Dame Irene Ward). I agree, in the main, with her theme and her desire; namely, that there are still many houses in which miners live, largely in my constituency, and I think that the Coal Board ought to look round Northumberland as part of its operations for providing better houses for the miners.
This is an innovation, this investing of money for the provision of miners' houses, so far as the Coal Board is concerned, although it is a system which is old in Northumberland and Durham. Houses were provided even under private enterprise; but the houses built under that system are absolutely out of date. Some efforts have been made to modernise them, but there is a great need to build new houses in the mining villages of Northumberland.
If the debate today has emphasised anything it is that we have now reached a stage when, instead of discouraging miners and their sons from working in the pits we must attract them by concentrating on supplying amenities for their villages and providing modern houses. It is useful, I admit, to concentrate our housing efforts in the developing areas so as to induce the men to settle there, but good housing conditions are just as important in the other, older districts.
I want to mention Wallsend, in particular. The hon. Lady the Member for 517 Tynemouth has already referred to the Rising Sun colliery in my constituency. It is a big colliery and it is expanding, but little effort is being made to provide houses for those men who are now forced to travel from the Throckley pits—10 miles away—to work at the Rising Sun. The houses are needed there, and for the last three years I have been trying to use my influence to get the coal trade in the north to do something about it.
§ Mr. Deputy-Speaker
Order. I do not think that the hon. Member can refer to particular pits. The Order is concerned with general capital expenditure, and we cannot deal with housing at particular pits.
§ Mr. McKay
My reason for mentioning it is that it is in an immediate difficulty. I want the Minister to consider the situation in my constituency and to get in touch with the local chairman of the Coal Board so that something may be done. Certain houses which are leased under private lease to those in the mining industry are being sold, and I ask the Minister to use his influence to get those houses for the coal trade itself, rather than for the miners to continue as tenants of a private company.
I agree with what has been said by the hon. Lady the Member for Tynemouth about the cleaning of coal. There was a period when the coal was very dirty. It is better than it was, but anyone with practical knowledge knows that the new machine methods of coal production result in more dirt coming to the surface with the coal. Efforts are being made to improve the situation, and there is nothing that we can do at the moment, except to pass this Order.
We all want the mining industry to be improved, and we cannot make improvements in that industry unless we get the money. The Order is designed to give the mining industry the opportunity it requires, and, therefore, we cannot oppose it. We may ventilate certain points for the sake of advertisement, although, of course, we do not often do that, but we must agree with the Order so that every encouragement is given to the mining industry to get on with the job.
§ 10.56 p.m.
§ Mr. Cyril Bence (Dunbartonshire, East)
I notice that this Order enables the Minister to make advances to the Coal 518 Board. The hon. Member for Bolton, West (Mr. Holt) seemed to be under the impression that this Order enables the Board to go to the money market to obtain money. I do not think it does. It enables advances to be made from the Treasury. This is a form of capital advancement to the Board as a nationalised industry to enable it to undertake capital development, outside the money market.
The large sum of £95 million is going to the Board this year. I do not know what interest rates the Board will pay for it. I do not know whether this borrowing will be represented by scrip which will be redeemable in thirty or forty years, or whether it will be covered by gilt-edged securities backed by the Treasury.
What is the position of these vast capital sums which are being issued from time to time to the Board? In time to come it may be desired to write this capital down. That has been done in the steel industry from time to time, and many people have suffered in the steel industry from the writing down of capital advanced. It may not have been the directors who suffered, but certainly the shareholders did.
What is the position of these vast capital sums which are being expended on this extractive industry? An extractive industry in the long term is a dying industry. Coal extraction must die at some time. Coal may be extracted for another fifty or sixty years, or even for a century, but there will come a time when it will cease to be extracted any more. It looks as if we shall reach a period, perhaps in ten or twenty years' time, when the Treasury will have advanced, say, £1,000 million. I do not know what the rate of interest may be then, but it may be that the Government will have in mind the possibility of writing this amount off.
I cannot agree with the hon. Member for Bolton, West that a great industry, whether the steel industry or the coal industry, should create its capital for future development by levying the cost of that capital on the present consumers. It is asking the consumers to pay for the capital which will benefit a generation to come. Let the generation that is to come pay the cost of the capital that we subscribe in our lifetime.
§ Mr. Bence
In the matter of borrowing and lending capital, different individuals have different experiences in different industries. Some lenders of capital to private industry have had the experience of having their capital written down from time to time, and have suffered serious losses. Some investors in industry have seen their capital increase in value. Generally speaking, however, the provision of capital to industry has been by the process of borrowing, generally from the banks. I think everyone accepts that.
I want to ask a question about the terms of borrowing for the Board. What terms are they under? What are the terms of repayment? What are the interest rates?
§ 11.2 p.m.
§ Mr. Joynson-Hicks
In reply to the last question by the hon. Member for Dunbartonshire, East (Mr. Bence), this matter was fairly fully discussed last year, and that was why I did not go through it this year as well. The hon. Member will see from the Order which is before the House that the advances may be made by the Minister to the Board, and that the borrowing, in the first instance, takes place by the Board, under the authority of the Minister, from the Consolidated Fund. It is at the normal short-term Treasury rates. At the end of the year it is funded in 50-year annuities carrying the gilt-edged interest rates ruling at the time.
My hon. Friend the Member for Garston (Sir V. Raikes) asked particularly that he might be assured about the accuracy of forecasts of the Coal Board. Had he been here I was going to elaborate somewhat on the accuracy of the forecast of borrowing powers last year when I laid them before the House in the anticipation that there might be £70 million required by the Board during the year. But as it was difficult to estimate too closely the House was good enough to accede to the request to have another £5 million available, making a total of £75 million. The actual amount borrowed was £70,500,000, and I doubt whether my hon. Friend would want a 520 more accurate forecast than that. I hope that this year's forecast will prove to be the same.
My hon. Friend the Member for Tyne-mouth (Dame Irene Ward) and the hon. Member for Wallsend (Mr. McKay) raised the question of houses, particularly.
§ Mr. Joynson-Hicks
Houses in general is perhaps a fairer and more accurate description. What they did plead for was not, I am afraid, what is the purport of this Order. The object of this Order is to enable the Coal Industry Housing Association, on behalf of the industry, to provide houses as an incentive to miners to go to, and work in, the developing areas. It is not the purpose of this Order to provide money for rehousing in existing colliery areas. It is specifically for development purposes.
§ Mr. Joynson-Hicks
It may well be that in the circumstances which the hon. Member mentions, part of this money will be available there. That is nothing to do with the Government. It is entirely a matter for the decision of the Coal Industry Housing Association or for the Coal Board. I am merely endeavouring to outline the purpose for which the Board requires this sum.
§ Dame Irene Ward
Surely it is to do with this House that we are providing the money for the Coal Board, so that we are entitled to say what we hope the Board will do with the money; otherwise, we might withhold the money and it would not then have any to spend.
§ Mr. Joynson-Hicks
I entirely agree with my hon. Friend. I certainly was not trying to restrict her right of free speech or criticism in the House. Nothing would be further from my desires, and nothing would be more unsuccessful if I sought to do it.
My hon. Friend asked what we would get for our money. Within the scope of the Order, it is difficult to go into that in detail. My hon. Friend herself quoted 521 the progress which had been made in 1954 in the Northern Division as outlined in one of the schedules to the Board's Report. That indicates the type of work upon which this expenditure is used annually.
§ Mr. Joynson-Hicks
My hon. Friend asked what would be the result of this expenditure on production and the preparation of coal. She asked about quality—meaning the cleanliness of the coal—and how it could be improved. Part of the schedule to which she referred dealt with expenditure on a coal preparation plant. That increases the cleanliness of the coal, and it is by means of improved plant and machinery at the collieries that improved cleanliness will be obtained in regard to coal. So far as calorific value is concerned, I can only say that that is determined by Nature and there is nothing I can do about it.
I am grateful to the hon. Member for Bolsover (Mr. Neal) for welcoming the Order. He can be assured that progress in the development of the Plan for Coal, as it has been subsequently amended, is reviewed annually. It is on occasions like this, in preparation for the annual review of the capital expenditure, that progress comes under review and is taken into consideration.
The hon. Member asked how the £40 million, to which I referred as being the amount to be provided from the internal resources of the industry, would be found. I say frankly that that is an estimate. It is impossible to calculate it accurately because the figure depends upon output and the total amount of receipts and expenditure during the year. It is chiefly depreciation based on previous capital expenditure, but it is provided out of the profits and the profitability of the industry. It may well be that in the event of production not coming up to our expectations or for any other of a wide variety of circumstances, the industry might not be able to meet this contribution of £40 million from its own resources. In such circumstances, or if capital development is able to proceed at a greater speed than is anticipated, it would be necessary for us to come back to the House to ask for a further extension of the borrowing 522 powers if before the end of the year the amount for which we are now asking was in peril of being exceeded.
That, I think, answers the questions which have been specifically raised, and I hope that the House will now pass the Order.
That the Draft Coal Industry Nationalisation (Borrowing Powers) Order, 1955, a copy of which was laid before this House on 21st June, be approved.