HC Deb 15 July 1957 vol 573 cc731-45
4. Mr. Hamilton

asked the Paymaster-General whether, in order to achieve a measure of stabilisation of coal prices, he will give a general direction to the National Coal Board to ensure that industrial purchasers in all cases pay the full economic price for the particular grades of coal demanded.

Mr. Maudling

The same pricing principles apply to all coal sold by the National Coal Board irrespective of the user.

Mr. Hamilton

Is the right hon. Gentleman aware that that answer has been given several times in this House but that it gets us no further so far as the steel industry is concerned? Can the right hon. Gentleman tell the House what price per ton the steel industry now pays for coking coal, and the difference between the price it pays and the economic cost of production of that coal?

Mr. Maudling

The fact that the same answer has been given to many Questions by the hon. Member on this point means that it is the true answer in each case. Without notice, I could not give the exact price for various coking coals, but I can assure the hon. Member that an economic price is certainly charged to the industry.

Mr. Jay

Is it not true that coal is being sold to British industry at 30s. or 40s. a ton below the European price? Is it not high time that private industry paid the economic price and was no longer subsidised by the National Coal Board?

Mr. Maudling

In so far as there is a subsidy, it is more to the domestic consumer than to industry, because the subsidy arises mainly on imported coal, which is sold below the imported price, and the majority of that goes to the domestic consumer.

Mr. Jay

Does the right hon. Gentleman deny that the price of coal for industry in this country is below the European price?

Mr. Maudling

I certainly do not deny that, but the fact that a product is cheaper in this country than elsewhere does not necessarily mean that it is subsidised.

6. Mr. Peyton

asked the Paymaster-General on how many occasions the price of Group 2 domestic coal has been raised in the West of England since nationalisation; by how much on each occasion; and what was the major contributory factor on each occasion.

Mr. Maudling

Since the Answer contains a number of figures, I will, with permission, circulate it in the OFFICIAL REPORT.

Mr. Peyton

My right hon. Friend will realise that it is with the greatest reluctance that I agree to his circulating the details in the OFFICIAL REPORT, but does he not agree that the time has come when we should face the re-organisation of the coal industry? There is grave and widespread doubt in the country whether the industry, on its present nationalised basis, can render an essential contribution to the country's welfare. Will my right hon. Friend agree that the crux of the whole position is that this dangerous and quite self-defeating process of demanding more for doing less, if continued, can only bring disaster to the industry and the country?

Mr. Maudling

My hon. Friend has raised as questions some very important issues which are really too wide to go into in answer to supplementary questions.

Mr. Robens

As the Question referred to the domestic price of coal and the hon. Member for Yeovil (Mr. Peyton) suggested some re-organisation, may I ask if the right hon. Gentleman is aware that we on this side of the House will be very happy to see a re-organisation of the distributive trade in the coal industry?

GROUP 2 HOUSE COAL SINCE 1ST JUNE, 1951, AND COMPARABLE COAL FROM 1ST JANUARY, 1947, TO 31st MAY, 1951—YEOVIL
Changes in Price
(The National House Coal Groups were instituted on 1st June, 1951, and there is no exact comparison with earlier descriptions)
Date Increase Reason Retail Price
s. d. s. d.
1st January, 1947 — — 84 10
5th March 1947 1 8 Merchant's Margin 86 6
1st September 1947 4 0 Pit 90 6
1st October 1947 4 8 Rail Freight 95 2
1st January, 1948 2 6 Pit 97 8
26th January 1948 4 Merchant's Margin 98 0
21st February, 1949 7 Merchant's Margin 98 7
30th May, 1949 6 6 Pit and Reclassification of Coals 105 1
15th May, 1950 4 5 Rail Freight and Merchant's Margin (5d.) 109 6
12th June, 1950 1 10 Merchant's Margin 111 4
12th February, 1951 4 2 Pit 115 6
16th April, 1951 2 10 Rail Freight 118 4
1st June, 1951 Net decrease Reclassification of house coals into National Groups, and Merchant's Margin Increase (2s. 3d.). 109 5
8 11
1st October, 1951 6 Merchant's Margin 109 11
31st December, 1951 8 4 Pit (5s. 8d.) and Railway Freight 118 3
1st April, 1952 4 Merchant's Margin 118 7
21st May, 1952 5 Merchant's Margin 119 0
18th September, 1952 4 Merchant's Margin 119 4
1st December, 1952 1 4 Rail Freight 120 8
2nd March, 1953 7 0 Pit 127 8
8th July, 1953 4 8 Pit 132 4
10th September, 1953 3 Merchant's Margin 132 7
16th November, 1953 1 11 Merchant's Margin 134 6
8th February, 1954 6 Merchant's Margin 135 0
1st March, 1954 2 11 Rail Freight 137 11
3rd May, 1954 13 0 Pit 150 11
6th January, 1955 6 Merchant's Margin 151 5
25th April, 1955 1 6 Merchant's Margin 152 11
5th June, 1955 2 6 Rail Freight 155 5
18th July, 1955 16 7 Pit 172 0
23rd April, 1956 1 11 Merchant's Margin 175 8
1 9 Rail Freight
1st June, 1956 8 9 Pit 184 5
17th December, 1956 8 Merchant's Margin 185 1
29th April, 1957 Reduction Merchant's Margin 184 7
6
9th June, 1957 6 Merchant's Margin 185 1
1st July, 1957 7 Merchant's Margin 195 8
10 0 Pit
NOTE: The "Merchant's Margin" covers the whole cost of distribution from railway depot to consumer.
7. Mr. Peyton

asked the Paymaster-General whether he will give an estimate of the proportion of the increase in the price of domestic coal since 1945 which is attributable to higher freight charges.

Mr. Maudling

For Yeovil, nearly one-quarter on Group 4 coal.

Mr. Maudling

I had an impression that a former Minister of Fuel and Power set up a Committee to inquire into that. That examination is still going on.

The following is the answer:

Mr. Peyton

While one expects the two figures to go together, does not my right hon. Friend think this proportion is really excessive? Will he draw the attention of the Board and the Transport Commission to this fact so that they can produce a more sensible solution?

Mr. Maudling

It is a little difficult to follow the argument of my hon. Friend. The point is that of the increases in coal prices which have taken place in his area about one-quarter has been due to increased freight charges. I think it would be very difficult to draw any useful conclusions from that without going into considerable detail.

10 and 11. Dame Irene Ward

asked the Paymaster-General (1) whether he will place in the Library of the House the record of the proceedings between the Domestic Coal Consumers' Council and the Industrial Coal Consumers' Council prior to their agreement to an increase in the price of coal;

(2) what procedure was followed by the National Coal Board in its presentation of the proposed increase in the cost of coal to the Domestic Coal Consumers' Council; what deliberations took place and between whom; how long were the facts under discussion; how detailed was the information provided; and how often did the Domestic Coal Consumers' Council meet to analyse the position before agreeing to the National Coal Board's recommendations.

Mr. Maudling

It is for the Councils themselves to decide whether or not to disclose their proceedings. I am informed, however, that both the Industrial and the Domestic Councils have always kept their proceedings private on the grounds that frank discussion might otherwise be inhibited.

Dame Irene Ward

Would my right hon. Friend bear in mind that I do not think, nor do a lot of other people, that the Domestic Coal Consumers' Council is technically sufficiently well informed to advise the National Coal Board on whether there should be an increase of price or not? Is my right hon. Friend aware that, in the opinion of most people, the Domestic Coal Consumers' Council and the Industrial Consumers' Council had no more opportunity of restraining the National Coal Board from increasing prices than Adam had of refusing the advances made by Eve?

Mr. Maudling

I think both Councils as at present constituted are well suited to represent the point of view of the industrial consumer and the domestic consumer, but if my hon. Friend has any suggestions to make as to improving the representation, I am sure my noble Friend would be glad to consider them.

12 and 13. Mr. Gower

asked the Paymaster-General (1) by how much per ton the retail price of Group 2 house coal has increased since 1947 in South Wales; what percentage increase in cost this represents; what steps he now proposes to prevent further burdens on consumers in the South Wales area; and if he will make a statement;

(2) for how long he anticipates that the recently authorised increases in the retail price of coal will provide sufficient revenue for the National Coal Board; and what proposals he has for delaying any further increase in price.

Mr. Maudling

Group 2 house coal is not sold in. South Wales, but for Group 3 the increase since 1947 has been about 90s. per ton, or 125 per cent.

For the future, whether any further increases in the pithead price of coal will be needed must depend upon the trend of costs, including wages and salary levels in the industry, and the cost of outside purchases by the National Coal Board, both of which are affected by the general level of prices, and on the extent to which rising costs, should they persist, can be offset by increases in productivity. The main contributions that can be made to holding down the price of coal are: more mechanisation, improved techniques and more regular attendance. These are the problems on which the National Coal Board are particularly concentrating their attention.

Mr. J. Griffiths

Does the right hon. Gentleman realise that Questions such as this, particularly coming from South Wales, are used by his hon. Friends only to cover up the fact that what they are hearing about this week is not the price of coal but the implementation of the Rent Act?

Mr. Maudling

I think the right hon. Gentleman is quite wrong in that. I am sure that my hon. Friends who have these Questions on the Order Paper are concerned, as I am sure the whole House and the country are concerned, about the recent substantial rise in the price of coal.

Lieut. -Colonel Bromley - Davenport

Arising out of the Questions and my right hon. Friend's reply, may I ask whether it is not a fact that one miner in fourteen is now taking an unofficial day off each week as compared with one in twenty-five a year ago? Is not this due to the new bonus shift system, and did not Mr. Arthur Horner pledge the honour of his union that absenteeism would not increase? Is not this costing the country 500,000 tons of coal a week?

Mr. Maudling

I could not accept my hon. and gallant Friend's figures as being accurate, but this is a very important matter. There is no doubt that since the abolition of the bonus shift conditions output has taken a nasty fall. This is bound to give rise to much concern. I saw that at the recent conference of the National Union of Mineworkers Mr. Arthur Horner said that when the Board agreed to abolish the bonus shift system the union had staked its honour that the miners would not take advantage of the concession. He said that it was too early to judge the tendency, and I agree that it is too early to judge, but I know that leading members of the National Union of Mineworkers are very determined about this and that they and the Board together are determined to do all they can to ensure that we do not lose production, because it would be very bad for the nation if we did.

Mr. J. Griffiths

Would not the Minister agree that, in the circumstances, since the end of the war, and bearing in mind the experience of the miners between the wars, the leaders of the National Union of Mineworkers have shown a real sense of national responsibility?

Mr. Maudling

The leaders of the mineworkers are doing an extremely good job in trying to persuade the members of their union on various important points. I think we all wish them success in their efforts.

Mr. Dudley Williams

While accepting my right hon. Friend's statement that the National Union of Mineworkers is concerned, can he tell the House whether any concern is being shown by the National Coal Board about this matter?

Mr. Maudling

Of course.

Mr. Blyton

Is the Minister aware that only the, nationalised industries stabilised their prices in 1956 and 1957, while private enterprise increased its prices? Is he further aware that the steel industry put up its prices by 6 per cent. in January and that there was not one voice from the Government side of the House in opposition? Is it not about time that they gave the nationalised boards a square deal instead of blaming them for the faults of private enterprise?

Mr. Maudling

The hon. Member is mistaken. A very wide range of private industry carried out the same stabilisation.

Mr. Gower

While appreciating the difficulties of the coal industry, may I ask whether my right hon. Friend does not agree that this problem has to be viewed with particular urgency because the repercussions of an increase in the price of coal are necessarily so widespread and have such an effect on so many people and industries throughout the country?

Mr. Maudling

I quite agree with that.

14. Mr. Gower

asked the Paymaster-General what arrangements will be made to prevent further increases in the retail price of coal which will arise from increased freight rates consequent upon the recently authorised increase in coal prices; and if he will make a statement.

15. Mr. Nabarro

asked the Paymaster-General what part of the price increase of 6s. 6d. per ton in the pithead price of coal on 1st July, 1957, yielding £66 million in additional revenue to the National Coal Board in the full year, is designed to make provision for capital development requirements and to what extent for reimbursement of National Coal Board losses on current account or prospective losses; and what steps he is now taking to prevent further increases in the price of coal to the consumer, following the British Transport Commission's increase of 10 per cent. in rail freights consequent upon the 6s. 6d. per ton increase in coal prices.

Mr. Maudling

The recent coal price increase was intended to cover increases in costs falling on the National Coal Board during the current year and to provide a small revenue surplus. On present estimates, the increase should provide a similar surplus in 1958, and any revenue surplus which may be earned in either year will directly reduce the advances from the Minister for capital purposes.

The recent coal price increase added about £5 million per annum to the costs of the British Transport Commission, which is equivalent to about 1 per cent. of railway traffic receipts. A 1 per cent. increase in the cost of carrying coal by rail would add about 3d. per ton to the average retail price. The 10 per cent. increase announced will lead to an increase by an average of about 2s. 6d. per ton from 1st August, though the exact figure in different districts will vary according to their distance from the pithead.

Mr. Gower

Is not my right hon. Friend particularly disturbed by this dog-chasingits-tail policy? Does he not think that some extraordinary remedy or approach is needed? Could he not arrange for the Minister of Power and the Minister of Transport, together with the heads of the National Coal Board and British transport industry, to get together and consider the whole problem?

Mr. Maudling

I doubt whether much could be achieved by mutual price cutting between the two nationalised boards because, except as far as they can be reduced by greater efficiency, the increased costs must eventually be carried by the consumer, be he a consumer of transport or a consumer of coal.

Mr. Nabarro

My right hon. Friend used the words "greater efficiency". Can he say what contribution was made by greater efficiency towards reducing the increased costs of the National Coal Board? Is it not a fact that the whole of the £66 million revenue from increased prices, which the Board is levying for the current year, has been put on the backs of the consumers and that no regard has been paid to increase in efficiency? Will he not approach the members of the National Coal Board and try to knock out of their heads some of this cost-plus mentality?

Mr. Maudling

I do not know what my hon. Friend means by the "cost-plus mentality". A large proportion of the increase in coal costs arises from decisions of this House in the Mines and Quarries Act and the Coal Mining (Subsidence) Bill. I suppose that of the remaining increased costs, wages are the largest element. The only way in which one can mitigate that is by increasing productivity. It is a matter for very great concern that despite increased mechanisation and increased investment, and owing to poorer attendances and sometimes more disputes, production in 1956 has not risen by comparison with that in 1951. I think that is the basis of the matter.

Mr. Robens

Is it not the case that the series of Questions we have just had are an attack upon the miners' wages? Is it not the case that unless miners are paid good wages and enjoy good conditions fewer men will go into the pits and, as a consequence, coal will be substantially dearer?

Mr. Maudling

I think the right hon. Gentleman is wrong. I do not think there is any question of an attack upon the level of mineworkers' wages. I agree with what he said about that. My hon. Friends are concerned—and I share their concern—about the fact that productivity has not been rising as it should.

17. Mr. Nabarro

asked the Paymaster-General what estimate he has made of the effects of further increased prices for house coal after 1st July, 1957, upon demand next winter from house-holders; what changes he now proposes to make in the allocation of 34 cwts. of coal to each house-holder in the South and 50 cwts. in the North; and whether house coal supplies, excluding imports, are adequate to meet the estimate he has made of demand.

Mr. Maudling

We cannot assume that the price increases recently announced will materially affect demand next winter, and, therefore, no change in the domestic allocations is contemplated at present on that account. Supplies of large coal will not be adequate to meet estimated demand without help from imports, but the small sizes are in better supply and should be used wherever possible.

Mr. Nabarro

Notwithstanding my right hon. Friend's refutation of the dear coal policy, is it not a fact that coal for the domestic consumer, particularly in the South of England, is extraordinarily dear? Is he aware that those living on relatively modest incomes are today faced with a situation in which they cannot afford to buy the ration? As coal is now rationed by price, why keep all this clumsy abracadabra of bureaucracy in being for a shortage that no longer exists?

Mr. Maudling

On all the evidence that we have, it is fairly clear that, taking the country as a whole, the demand for domestic coal is still higher than the prospective supply. In those circumstances, I do not see how, at the moment, we can remove rationing, though my noble Friend is very anxious to do so as soon as possible.

Mr. Slater

In view of the reply that the Minister has given to his hon. Friend the Member for Kidderminster (Mr. Nabarro), will he tell the House what is the average pithead price of coal at the moment, and what is the difference between the pithead price and the price after bringing it into the south of England? Further, will he organise a visit of some of his hon. Friends to the pits in the industrial area so that they can go down the mines and see the conditions in which these people are expected to work in a basic industry which his hon. Friends are criticising so much?

Mr. Maudling

I should be glad to organise a visit of that character for hon. Members on either side of the House. As regards the cost of coal, it is, of course, dearer in the South. The further regions are from the pithead the greater the effect of rising transport charges is felt in those regions.

20. Mr. Jennings

asked the Paymaster-General by how much the retail price of Group 2 house coal, in terms of money and percentage, has risen in Burton-on-Trent since 1st January, 1947.

Mr. Maudling

About 99s. a ton, or 150 per cent.

Mr. Jennings

Does not my right hon. Friend agree that the recurrent increases in the price of coal are the prime factor in the inflationary spiral? Is he aware that these recurrent increases press most hardly on the fixed income groups, such as old-age pensioners and retirement pensioners? Is he further aware that these people in my constituency are distressed in mind and in purse, and will he consult his right hon. Friends the Chancellor of the Exchequer and the Minister of Pensions and National Insurance to see if it is possible to alleviate the hardship inflicted on these people by these increases by an immediate increase in pension, or by some scheme of concession?

Mr. Speaker

Supplementary questions today have been of an inordinate length. If hon. Members would ask their questions succinctly, we could get on much quicker.

Mr. Maudling

The Question whether rising prices cause inflation or inflation causes rising prices is one to leave, I think, to economists, but I will certainly repeat that the recent increase in the price of coal is a matter of very serious concern to industry, to the domestic consumer and to people on fixed incomes. But I must ask my hon. Friend to address any questions about pensions to my right hon. Friend the Minister of Pensions.

21. Mr. Dudley Williams

asked the Paymaster-General, in view of the 6s. 6d. a ton pithead increase in coal announced on 1st July, 1957, and the 10 per cent. increase in rail freights, what will be the increase in retail prices for house coal in Devonshire.

Mr. Maudling

The increases in retail prices in Devon on 1st July, 1957, varied from 5s. a ton for Group 7 coal to 11s. 8d. a ton for Group 1. The proposed increase in rail freights will increase retail prices of all grades of coal in Devon by about 5s.

Mr. Dudley Williams

In view of that deplorable statement, does not my right hon. Friend think that he should make immediate representations to the Chairman of the National Coal Board with a view to re-introducing the bonus shift conditions?

Mr. Maudling

No. I think that negotiations between the National Coal Board and the National Union of Mineworkers on wages and conditions of employment are matters to be left to the discretion of the National Coal Board. But I can assure my hon. Friend that the National Coal Board weighed very carefully indeed the conflicting elements in the decision before agreeing to this abolition of the bonus shift conditions. I would refer again to what the leaders of the National Union of Mineworkers have said; that they regard themselves as having made a pledge. I hope very much that they prove that in practice they can carry it out.

Mr. Jay

Can the right hon. Gentleman say by how much rents have increased in Devonshire in the past two weeks?

Mr. Maudling

I think that, with adequate notice, my right hon. Friend the Minister of Housing and Local Government could do so.

22. Mr. Braine

asked the Paymaster-General by how much the price of Group 2 house-hold coal has increased in the home counties and in south-east Essex, in particular, since nationalisation; and how many increases in price have been made during this period.

Mr. Maudling

In London by about 106s. a ton, and in south-east Essex by 114s. The number of price increases has been 31 and 34.

Mr. H. Hynd

Can the right hon. Gentleman say by how much less those prices might be increased if he could abolish the unfair system under which the National Coal Board has to bear the loss on imported coal?

Mr. Maudling

The loss on imported coal amounts to about 1s. 6d. per ton, speaking without reference to the book. The loss on imported coal is certainly a large item in the National Coal Board accounts, but the argument as to whether or not that should be borne by the Coal Board or by the taxpayer is much too big an argument for discussion at Question Time.

24. Mr. J. Eden

asked the Paymaster-General, by how much the retail price of Group 2 house coal delivered to Bournemouth has increased since 1947; and what percentage of this increase is due to transportation costs.

Mr. Maudling

About 123s., of which about 20 per cent. has been due to railway freight increases.

Mr. Eden

Now that railway freight costs will probably go up as a result of the recent coal price increase, can my right hon. Friend say when the next increase in the price of coal will take place as a result of the increased cost of transport?

Mr. Maudling

As I explained in answer to an earlier Question, the effect of the coal price increase is not likely to add more than ¼ per cent. to the delivered cost of coal to the consumer, so I think the effect of these two things one against the other can sometimes be exaggerated.

Mr. Darling

In order to get this increase in the price of coal into perspective, may I ask whether the right hon. Gentleman is aware that the cost of other things has gone up, including Kidderminster carpets, which are now about four times the pre-war price?

Mr. Maudling

If the hon. Member will look at the statistics and the price indices he will find that, compared with 1949, the price of coal has risen a good deal more than has the price of carpets.

Mr. Nabarro

A Kidderminster carpet is always cheap at the price.

25. Mr. J. Eden

asked the Paymaster-General what grades of domestic house coal are delivered to Bournemouth; and how many of these were available at cheap summer prices.

Mr. Maudling

As the responsibility for distributing the various qualities of house coal to merchants in different parts of the country is the National Coal Board's, I am asking the Chairman to provide my hon. Friend with this information.

I should like to take this opportunity of making it clear that the National Coal Board announcement to which I referred last Monday in answer to my hon. and gallant Friend the Member for Poole (Captain Pilkington), to the effect that householders in the South of England who placed orders on or before 8th June would get delivery at prices ruling at the date of the order, referred specifically to unconditional orders only.

Mr. Speaker

Mr. Emrys Hughes.

Mrs. Mann

On a point of order, Mr. Speaker. May I direct your attention to Questions on the Order Paper relating to Group 2 coal which appears to be sold all over Britain, according to those Questions, whereas in fact Group 2 coal represents only 10 per cent. of the whole output of the pits?

Mr. Speaker

That is not even near a point of order.

27. Mr. Palmer

asked the Paymaster-General the estimated total extra charge to industry brought about by the increased coal prices; and what approximate improvement in the efficiency of fuel utilisation by industry would offset the financial effect of the extra charge.

Mr. Maudling

About £29 million, including the direct effect on costs of electricity, gas and coke supplied to industry. It would be necessary to reduce industrial consumption of fuel, excluding oil, by 5 or 6 per cent. to offset this extra charge.

Mr. Palmer

Would not the paymaster-General agree that industry, if it made a real effort, could largely counteract the alleged inflationary effect of increased coal prices by fuel efficiency?

Mr. Maudling

Admittedly, it could use fuel much more efficiently. What the country needs is much more fuel efficiency and not more expensive coal.

Mr. Nicholson

Would not my right hon. Friend and the House agree that the difficulties which the country is facing are not primarily a criticism on the mining industry but are a criticism of successive Governments for failing to halt inflation?

Mr. Maudling

Once again, I would say that the effect of rising prices on inflation and of inflation on rising prices is a complicated question.