§ Motion made, and Question proposed, That this House do now adjourn.—[Colonel J. H. Harrison.]
§ 10.1 p.m.
§ Mr. Gerald Nabarro (Kidderminster)
In April, 1953, and again in May, 1954, I was fortunate in having an opportunity on the Adjournment debate of raising the question of domestic coal supplies, and I sought your permission, Mr. Speaker, to raise this question again shortly before the last General Election. The Election intervened, and I have taken a very early opportunity in the lifetime of this Parliament to raise the same issue, because I think that there is grave concern in all parts of the House as to our coal position, and particularly the prospects for next winter's domestic fuel supplies.
I believe that during the course of the next two or three weeks, judging by the tenor of the reply of the Leader of the House to me today on the question of business, we may have a full opportunity of debating the coal position and the last Annual Report of the National Coal Board, which was published only the day before yesterday. This evening I seek the opportunity to deal with only one aspect of the coal position, but it is one which, for obvious reasons, is of special interest to all householders, namely, the question of domestic coal supplies for next winter.
Our position appears to be rather perilous. I think it would be no exaggeration to say that the general coal position, at this moment is worse than it has been at any time since the great close-down and freeze-up, in 1947. In support of that statement, I think that I ought to say something about the general coal supply position and then pass on to the more special aspect of domestic and household supplies.
Most people are realising now, that although general industry in this country has continued steadily to expand production during the last three or four years, the coal industry has remained practically static in output, and during the first five months of this year coal production has actually been falling steadily. When I say "static" I am not being disparaging in any way, and I am stating the statistical facts as they have been published from time to time.
1640 In 1952, the output of the coal industry was about 224.9 million tons. In the following year, 1953, the output was about 224.5 million tons. Last year, it was about 224.75 million tons. There has been hardly any variation at all. A further serious aspect, of course, is the fact that out of these figures about 24 million tons per annum is extremely vulnerable in that it represents the output of the Saturday shifts in the pits and opencast working. If anyone feels inclined to criticise the miner, I would at last say in his defence that the miners are at present the only organised body of workers in the country which is regularly working Saturday shifts, except, of course, the steel workers who, for many years, have been engaged in continuous shift-working. The other vulnerable aspect of our coal output is that we are still deriving 10 million or 11 million tons a year from opencast sources much of which is at the expense of good agricultural land.
In this year, since 1st January, coal production has not even been static; it has been declining. In the first 24 weeks of this year coal output, according to the published figures up to 18th June, is 104.6 million tons compared with the corresponding figure last year of 107.2 million tons, a decline of 2.6 million tons in 24 weeks which, pro rata for a full year, is a very serious matter and shows a decline of about 5 million tons. Out of that some 2 million tons already have been lost this year through unofficial strikes and disputes. I am sorry that earlier today, in our other debate, there was little attention paid to the very serious effect upon the country's economy of that loss of 2 million tons through disputes in the coal industry.
The Chancellor of the Exchequer is becoming increasingly anxious about this position. I think it was the right hon. Gentleman the Member for Ebbw Vale (Mr. Bevan) who said, in a moment of special ebullience a few years ago, that only a genius could produce a shortage of coal in this country. Last year our shortage was so grave that we had to import 4 million tons of coal at a cost of £25 million. This year we shall have to import 12 million tons of coal at a cost of £80 million, a very serious matter for our balance of payments.
I make this confident prediction, that next year, in 1956, if general industrial 1641 production continues to expand in the way it has been expanding in the last three or four years, we shall have to double our import of coal compared with that of this year, and probably bring in the stupendous amount of 25 million tons of coal at a cost of about £170 million to our balance of payments. A large part of that sum, at least 40 per cent. of it, will have to be paid in dollars.
All of this has, of course, deranged the finances of the National Coal Board. It had an accumulated deficit of about £18 million up to the end of last year, but on every ton of coal it sells which comes from foreign sources it loses £2, and that means that this year, on imports alone, it will have to face a re-selling loss of about £24 million to swell its accumulated deficit to date.
From this, and, of course, from the steady increase in miners' wages and the continuing short-fall in mining output, it becomes inescapable that during the next 14 to 21 clays the price of coal at an average will rise from 10s. to 12s. per ton, placing additional burdens on the shoulders of competitive industry, hastening inflation, because it will lead at once to increased prices for electricity, for gas, for steel and for transport, and causing difficulties also for those fixed-income groups, the old-age pensioners and others living on limited incomes, through the increased price of one of the necessities of life.
§ Mr. Nabarro
An increase of from 10s. to 12s. a ton in the price of coal will not be the end if this trend of falling production and increasing demand and greater reliance upon foreign coal continues. I believe that in the present state of affairs it is unlikely that we shall get more coal from our own pits, and, therefore, that we shall have to continue to import larger quantities of our general manufacturing industry continues to expand.
There is the background. Now I want to come to what is among the groups or classes of coal consumers, one of the smallest but, in many respects, one of the most important, namely, the householders. Out of the 224 million tons of coal produced in this country in each of the last three full years, the domestic 1642 market took, each year, just 32 million tons, or one-seventh, but the domestic coal consumer is the only consumer who is rationed, and he is rationed very stringently, very unfairly and very inequitably, based on a system introduced in the coal distribution Orders of 1943. These Orders have been amended from time to time by the Minister of Fuel and Power, but they lead today to the consumer in the South of England having only 34 cwt. of coal a year and the consumer in the North of England 50 cwt. a year.
§ Mr. Nabarro
I quite agree with the hon. Member.
The aggregate consumption of house coal last year was 32 million tons. The interesting point is that if we got rid of the last of the major rationing systems and we ended house coal rationing, it would only result in an increased demand of 2 million tons of coal a year. That is not my figure, but that which the Minister of Fuel and Power gave to me in reply to a supplementary question shortly before the General Election. The 2 million tons of coal a year extra is required on top of the 32 million tons of house coal consumption per annum in order to do away with this wretched rationing system.
May I put that in correct perspective? We are importing 12 million tons of coal at a cost of £80 million. Is it really beyond our capacity to buy 2 million tons more from European or other sources at an additional cost of £12 million in order to end this wretched rationing system, to dispense with the services of nearly 1,000 fuel overseers and to save the taxpayer £1 million, a not inconsiderable sum, in administrative costs in a full year? I believe that it is possible so to do and that we ought to do it, that we ought to end house coal rationing, and that £12 million in terms of our balance of payments is a relatively insignificant sum.
Let me put the matter again in its correct perspective. A sum of £12 million for an extra 2 million tons of coal. What do we spend on oil? We bring in £360 million worth of oil a year for all purposes. I am asking that we should spend £12 million extra on house coal to end rationing—one-thirtieth of the value of our oil imports in the current year. Surely 1643 this argument cannot be invalid. It was the Minister of Fuel who initiated, in the last Parliament, the major policy of switching from coal to oil, and if we are to spend £360 million this year in terms of oil imports surely we could spend £12 million on that extra 2 million tons of house coal to end rationing.
But there is another powerful argument which may not be directly within the province of my hon. Friend the Parliamentary Secretary to the Ministry of Fuel and Power, who is to reply to the debate, but of which the Treasury officials might take careful note. A few days ago, the Chancellor of the Exchequer inspired a statement to the effect that 90 per cent. of our trade is now liberalised.
§ Mr. Nabarro
No, it is a small "I."
That means that every manner of so-called inessential goods flow into the country free from restrictions, for instance, peaches, pears, plums, pomegranates and paw-paw under open general licence. You, Mr. Speaker, pulled me up very sharply for using all those "ps" in a supplementary question, because you said that it had nothing to do with coal. But in the matter of trade liberalisation it is, in my view, manifestly more important that this nation imports coal, if it has to import the means of providing energy that is fundamental to all forms of industrial production, than that it should import a great deal of inessential fruit and foodstuffs. Why do we liberalise paw-paw and keep restrictions on coal? It seems absolutely ludicrous. We now have this opportunity of bringing in this extra coal to end house coal rationing.
There is an argument which would appeal at once to hon. Members opposite who represent mining constituencies. They feel very strongly that the National Coal Board should not be called upon to bear a loss of £2 per ton when each ton of foreign coal is resold in this country by the Board. Why should the Coal Board lose that money? I do not want the Board to import foreign coal anyway. I believe that any industrialist or any merchant in this country selling in the house coal market who wishes to buy foreign coal—subject to it not involving dollar expenditure, and most of 1644 it does not, because it is a surplus in Europe—should be allowed to go to Europe, buy the coal under private contract, import it into this country free of licensing restrictions and resell the coal in this country.
For instance, let us suppose that I am an industrialist in Birmingham, and that my coal consumption is 5,000 tons a year. I do not like the coal which the Coal Board gives me, and I decide that Silesian coal has a greater calorific value and is better for my plant than British coal—often dirty, hard to come by, late in delivery—which comes to me from the Staffordshire, Warwickshire, South Yorkshire or other coal fields. I decide to buy Silesian coal in the interests of increased production and improved efficiency. I am denied the opportunity of doing so, because my right hon. Friend says, "Oh, no; the Coal Board must import this coal, and lose £2 a ton on reselling it," but I, as an industrialist, will not lose that £2, because perhaps I shall recover more than £2 a ton by using coal of special quality or type in preference to coals available to me in this country.
I say that continued coal rationing for the domestic market in present circumstances is indefensible. It ought to be ended as soon as possible. It cannot be defended on balance of payments grounds, nor can it be defended on grounds of equity. I would only enter a caveat to my hon. Friend the Parliamentary Secretary, in case he takes my advice and ends domestic coal rationing. He must do it in the summer months, and not wait until the winter.
Secondly, I do not mind his keeping a general price control for domestic coal. That is the second caveat. The third, and this is the most important of them all—for I do not want to be accused by any hon. Gentleman on the Socialist benches of creating a situation whereby the rich can buy coal and the poor cannot—is that the Coal Board must be instructed by my right hon. Friend—and he has adequate powers of direction under the appropriate Statute—to put 35 million tons of coal on the domestic market for householders in the United Kingdom, per annum.
That figure is arrived at by taking the 32 million tons under the restricted or rationed consumption of house coal, 1645 adding to it the unfulfilled demand of 2 million tons, to which I have referred as the amount required to end rationing, and adding 1 million tons of coal for good measure and in case of a bad winter, making a total of 35 million tons.
I end on this note. Last winter was the coldest one, on the average, excepting that of 1947, since pre-war days, and we still consumed only 32 million tons of house coal. Add to that the unfulfilled demand of 2 million tons, making 34 million tons, and 1 million tons for good measure, and import the extra 2 million tons necessary to end what I believe to be a hang-over of Socialism—I said so at Question Time the other day—and we should then give everybody an opportunity of genuine and welcome freedom of choice of the fuel that they wish to burn in their homes.
§ 10.19 p.m.
§ The Parliamentary Secretary to the Ministry of Fuel and Power (Mr. L. W. Joynson-Hicks)
I should like to congratulate my hon. Friend the Member for Kidderminster (Mr. Nabarro) on this annual fixture, to which he has returned tonight. I feel that I am just about to open my third innings on this subject. As my hon. Friend pointed out, this short debate is an annual fixture which we have had, and I am very grateful to him for the opportunity which he has given me because, so far, in minutes at any rate, his score in these annual debates has been 62, and my score in minutes, up to opening my third innings, is 17. This evening, my hon. Friend has given me a minute or two more, but I was going to suggest that next year, if he seeks to repeat this fixture, I might claim the follow-on and open the batting myself.
I will first deal with one or two points to which my hon. Friend referred towards the end of his speech. If his industrial friend in Birmingham thinks it worth while to import 5,000 tons of Silesian coal and is prepared to pay the price of bringing it from the port to Birmingham, which may be considerable, there is nothing to prevent him from applying for a licence to the Board of Trade. From the reply which my right hon. Friend the President of the Board of Trade gave not long ago, he would have a very reasonable chance of being able to obtain that licence. There is no monopoly on the part of the National Coal Board in 1646 the import of coal. It is simply a matter of anyone who thinks it worth while and wants to do it applying for a licence.
My hon. Friend also stated he wanted to see a certain amount of liberalisation of trade. We like to liberalise trade, and we like to pursue a policy which we are advocating ourselves, still more so when it coincides with suggestions made by my hon. Friend. He will, therefore, be glad to know that since last night coal can be imported on an open general licence from anywhere in the sterling area. That is the liberalisation process, for what it is worth. My hon. Friend will not be able to find much coal available in the sterling area, but it shows the good intention that we have. We have liberalised the import of coal from the sterling area to the extent that there is no necessity for any import licence for it.
§ Mr. Joynson-Hicks
I should like to be able to agree with that, but I am afraid the matter was one which was under consideration some time before.
What my hon. Friend has said, in substance—and I must ask him to forgive me for oversimplification because time does not permit me to do justice to his speech in full—was a plea for a derestriction of house coal. He will accept the fact from me and from the debates that we have had in the past that my right hon. Friend and I, and the Government, too, share to the full his desire to see house coal derestricted. If we agree on that point, and if my hon. Friend will accept that premise, then we need not discuss the desirability any further but come straight to the question of why we do not do what we want to do.
If I may put the matter in this way, it is not only a question of the shortage of coal in this country. That is the first point, but there is the second point that it is due in part to a shortage of large coal here. I think that one can see the effect of that in this way—my hon. Friend has quoted various figures which I think substantially agree with this. The production of coal as a whole in this country, large and small, rose in 1954 over 1951 by roughly speaking, only 1½ million tons. The consumption of coal 1647 in this country in 1954 over the consumption in 1951 rose by very much more, namely, about 4½ million tons.
My hon. Friend is now asking us to import nearly half that amount of increased consumption over the four-year period 1951–54, and to do that annually and to continue to do it. But although between those years there was an increase in coal production, there was a decline in the production of large coal of more than 5 million tons in all. It is large coal, of course, which is primarily and substantially required for the household market.
Therefore it is a problem of large coal as well as an over-all problem of coal. But the large coal can also be imported, although naturally the import of large coal is much more unprofitable than the import of small coal, because of the degradation of the coal in transit and to its becoming, to some extent, small coal in the course of transit. My hon. Friend asked why, if we were already importing coal, should we not import an additional 2 million tons of large coal to be able to get rid of the restriction. My hon. Friend has himself referred to the economic difficulties, the difficulties of the balance of payments, and these are well known and recognised.
However, there are also practical difficulties, and it is the practical difficulties which I want to stress in the remaining minutes of the debate. In 1952 and 1953 we began to reverse the traditional trend of this country as a coal exporting country. In those two years we imported marginal quantities of coal. In 1954 we had to import 3 million tons of coal, and in the first five months of this year we have imported 4½ million tons of coal. The effect of this is that the flow of coal is beginning to be reversed, and this is creating considerable distribution problems.
When traditionally one has one's coal flowing from one's coal fields to one's points of consumption, it is a major 1648 operation when one seeks to distribute substantial quantities of coal, which is an inert, heavy and bulky commodity, from the ports to the points of consumption. That is one practical aspect of the problem. Another is that of shipping. The pressure on shipping freight rates which the import of coal is creating has been indicated on previous occasions. There is also the problem of where to get the coal from.
My hon. Friend has spoken of Europe, but there is already a great stringency of coal supplies in Europe. Europe itself is increasing its imports of coal from America, and so are we. We are increasing our imports from America. All these additional 2 million tons of coal to meet the needs of derestricting coal for the house-coal market would, in fact, have to come from America, because, as I have already stated, already to obtain the essential imports of coal we are having to get a substantial pro- portion from America. The problem which we have to face is not the problem of finding, paying for and transporting 2 million tons of coal, but an additional 2 million tons over and above the rest of the imports which we shall already have to make this year. It is that, superimposed on the previous amount, which creates the great difficulty.
Finally, I ask my hon. Friend if he is prepared to take the risk of derestricting house coal upon a marginal amount of this sort. He spoke cheerfully of importing 25 million tons next year, but the problem we have to face is, when we are having to import greater quantities of coal than ever before, whether we dare take the risk of derestricting coal, abolishing the whole of the restriction machinery, which cannot be replaced at short notice, and risk landing the domestic householder in fuel chaos in another year.
§ Question put and agreed to.
§ Adjourned accordingly at half-past Ten o'clock.