§ Order for Second Reading read.
§ 3.53 p.m.
§ The Minister of Power (Mr. Richard Wood)
I beg to move, That the Bill be now read a Second time.
I hope that it will be convenient to the House if I try to divide what I have to say this afternoon into three rather unequal parts. The first will be, as it should, a brief explanation of the Bill and the general purpose behind it. Secondly, Mr. Speaker, with your permission, I should like to say all that I have to say about the Coal Industry Nationalisation (Borrowing Powers) Order, which the House will have before it tonight, to increase the annual borrowing above the present annual limit of £75 million for this year. Thirdly, I should like to undertake, as I think the House would expect me to do, a rather wide survey of the coal industry's problems and try to share with the House some of the conclusions which I have reached since I went to the Ministry of Power.
§ Mr. Speaker
Having heard the right hon. Gentleman, I imagine that it would be for the convenience of the House that he should refer to matters relevant to the Order at the same time.
§ Mr. Wood
Thank you, Mr. Speaker.
As to the first part, about the Bill, the Coal Industry Acts from 1946 to 1956 fix, as hon. Members know, certain limits to the borrowing powers of the National Coal Board and the last of these Acts, the 1956 Act, raised the total limit to £650 million and also raised the annual limit from £40 million to £75 million. The purpose of the Bill is to seek to raise the overall limit to £700 million which, after that, may be increased by an Order, or by Orders, up to a final limit of £750 million. The Bill, as hon. Members will have seen, also retains the existing annual limit of £75 million.
The Bill, which in itself is very simple—at least, I hope so—is inseparably connected with the Coal Board's "Revised Plan for Coal" for which plan the Bill aims to provide the finance.
43 Hon. Members will find the details of the Board's proposed capital expenditure in Chapter IV, pages 15 to 17, of the "Revised Plan for Coal". They will see that between 1960 and 1965, the Board estimates its capital expenditure at £511 million. From that should be subtracted the amount which the Board believes that it can raise from its internal resources, namely, £375 million, leaving the sum necessary to borrow at £136 million. The balance of the existing borrowing powers which will still remain to the Board at the end of the year is £60 million; the extra sum needed is £76 million.
I apologise to the House for having to give so many figures. I hope that it will not be necessary for me to give many more figures, but I cannot discharge my duty without them. The sum of £76 million has been rounded up in the Bill into two lots of £50 million, a total of £100 million, to cover contingencies and to cover other movements in working capital with, on the other hand, a saving in working capital by the hoped for reduction in the present level of stocks.
I was most anxious to try to discover means by which Parliament could be given adequate opportunities to discuss the changing situation in the industry. I considered whether the annual limit of £75 million was itself in the new circumstances sufficient. I came to the conclusion that that annual limit would not be likely to be sufficient in the future to ensure adequate parliamentary discussion and I decided that other methods must be found to ensure a fairly regular parliamentary review because, unless the unexpected happens, future borrowings look like being less than £75 million in any one year to which this plan refers. Therefore, I decided—and I hope that the House will agree—to adopt the method which is similar to that adopted in the Electricity Act of this year, which would limit the extra borrowing powers to £50 million without my coming again to Parliament either once or more in one or more Orders for part or all of the remaining £50 million above the figure of £700 million.
I understand that the Board's borrowing requirements during the next financial year are likely to be about £60 44 million and that the first limit set by the Bill, of £700 million, is likely to be reached in the financial year 1961–62. Therefore, a review by Parliament is almost certain in two years' time and it could take place in a year's time if the estimates that I am making and the Board has made are seriously wrong.
I hope that the House will agree that this method is the best not only in giving the Coal Board the necessary basis on which to plan ahead for the future, but also in securing an adequate degree of control by Parliament. That is all I wish to say at the moment about the Bill.
§ Mr. Bernard Taylor (Mansfield)
I am much obliged to the right hon. Gentleman for giving way. He has said quite a lot about borrowings by the Board. Will he make it clear to the House, so that there will be no misunderstanding either here or outside, that these are borrowings, not gifts or subsidies, which are repayable by the Board with interest?
§ Mr. Wood
I certainly have no objection to making that entirely clear. I am grateful to the hon. Gentleman for bringing it out.
I come now to my comments on the Order. As the House knows, the present annual limit of borrowings by the Coal Board, without an affirmative Resolution to increase that limit, is £75 million. The Order will increase that borrowing power for this year to £120 million. I wish to make it quite clear—no doubt the House is already clear about it—that the main reason that the Board wishes to have this higher limit for its annual borrowings this year, just as there was last year when there was another of these Orders, is the need it has to finance the present level of undistributed stocks. Stocks, no doubt, will be discussed a good deal during this debate, and I shall have something to say about them later.
Without the need to finance the stocks that the Board has at the moment, which will cost it about £50 million, the Board's current capital expenditure of £106 million could be met from its internal resources of £36 million and be well within, or, at any rate, within, the £75 million annual limit which is set by the Coal Industry Acts. Therefore, the main reason for the Order which I shall ask the House to approve is the need to 45 finance the higher level of stocks which, no doubt, we shall be discussing fairly widely today.
I come now to the main part of my speech, which is concerned directly with the industry. I believe that there is a need—and it would help me greatly if we could undertake it this afternoon—for a broad examination of the country's fuel and power position. I apologise for the details and figures which I have already inflicted upon the House. I cannot promise that there will be no more details and figures, but I shall try to keep them to a minimum. During the month which I have spent at the Ministry of Power I have already had the benefit of a great deal of advice. I am anxious to share with the House the conclusions I have, so far, reached, and I shall listen with very real interest to the views which right hon. and hon. Members express today.
I had no sooner discovered the way to my office at Thames House when I found that the cries for a national fuel policy became almost deafening. I therefore took immediate pains to try to make myself clear about exactly what "a national fuel policy" means. Hon Members may think that they are more clear than I am on this point, but I understand that this expression, a national fuel policy, has been used a good deal in the last twenty or thirty years, and the peculiar thing is that it happens to have meant different things to different people at different times.
The thread which seems to run through the meaning of the phrase is that it has generally been taken to mean a demand for Government intervention from time to time in favour of one fuel and against another. There are examples I could give the House of that thread. During the years after the war, it was a demand for Government intervention, to try to compel greater efficiency in fuel use. Hon. Members will remember that that demand led to the setting up of the Ridley Committee, to whose Report I shall refer in a few moments.
The present advocates of a national fuel policy are concerned, not unnaturally, with the difficulties, or the likely supposed future difficulties, of the coal mining industry. Therefore, it has been suggested to me, with variations, that the fuel policy today should be some- 46 thing on these lines. It the total fuel requirements of the nation are so many tons of coal equivalent, the Government should themselves make plans to ensure that a certain proportion of these requirements are met by coal and certain smaller proportions are met by oil and nuclear power.
I have studied this very carefully. I have come to the conclusion that there is one major difficulty in the way of this national fuel policy, the difficulty being, as I am sure the House will agree, that fuel needs vary not only from industry to industry but from one consumer to another. It is quite impossible to lay down a simple guide about what fuel is the most economical for general use. It is impossible to escape the conclusion that Government intervention in this matter would impose upon consumers costs about which the Government, when they were imposing them, would have no idea whatever, because it is quite impossible to see exactly where this policy of guaranteeing certain shares for certain fuels would impinge on individual fuel users.
There is the further important point that the denial of freedom of choice to consumers and the compulsion to use certain fuels rather than others is not only industrially undesirable, but it is also humanly immeasurable and indefinable. I feel that the discouragement which that policy would involve would be very great indeed.
I have discovered that one of my duties under Section 1 (1) of the Ministry of Fuel and Power Act, 1945, is to promoteeconomy and efficiency in the supply, distribution, use and consumption of fuel and power.That is a rather formidable task. When I find that, over the years, different fuel policies have been successively, if not successfully, urged on the Government, I feel that it is certainly natural, and probably right, to be extremely cautious in case an expedient which might bring relief today would do unforeseen harm in the years ahead.
I was not given much time after I arrived at the Ministry of Power before I was asked to define—I make no complaint about it; one of a Minister's duties is to answer Questions—what the 47 Government's fuel policy was. I suggested that the Government's fuel policy should be to meet the needs of consumersefficiently and art the lowest cost, with due regard to all relevant social and economic factors."—[OFFICIAL REPORT, 9th November, 1959; Vol. 613, c. 21.]As I am now, perhaps, given an opportunity of expanding a little on that Answer, I will say, for the benefit of the House, that I intended to convey that, in the country's search for the cheapest sources of power, we could not afford to disregard certain wider economic considerations and still less could we ride roughshod over certain human difficulties, which, no doubt, will be much in our minds and which, as the House knows, I regard with the greatest sympathy.
I am supported in my choice of what I call a competitive fuel policy by the recommendations of the Ridley Report. I am quite prepared to agree, as it may be pointed out in the course of the debate, that the Ridley Committee's recommendations were framed in wholly different economic circumstances from the present time. They were certainly framed in circumstances that were very different for the coal industry. I would, however, make the point, because it is an important one, that the Ridley Committee's support for co-ordination, which in a very short time I have often had urged upon me, has absolutely nothing to do with the freezing of the fuel pattern, with which it often seems to be mistaken.
I ought to remind the House of the actual words of the Ridley Committee which bear on this question of the fuel policy. The Ridley Committee said:In our view, the right policy, and indeed the only practicable one, is to leave the pattern of fuel use to be determined by the consumers' own choice between competing services.
§ Mr. Harold Neal (Bolsover)
That recommendation related, of course, to gas, electricity and coal and not to the competing industries of oil and atomic energy.
§ Mr. Wood
The Ridley Committee was asked to report upon the whole question of the country's fuel needs and it produced that recommendation. Perhaps, however, it would be easiest for the smoothness of our proceedings if the 48 hon. Member, with his great experience, makes his points, as I am sure he will, and no doubt my hon. Friend the Parliamentary Secretary will have the chance to comment on them at the end of the debate.
Having said what I have about the Ridley Committee, I should add that there was certainly the plea which that Committee made for closer co-ordination on projects in which, as the hon. Member for Bolsover (Mr. Neal) suggested, the National Coal Board and the Electricity and Gas Councils might jointly be interested, and, indeed, many projects in which they are jointly interested.
I have been trying closely to examine the methods of co-ordination in this sense and perhaps this bears a little on what the hon. Member said. I found—and I think that this is right—that the greater part of my Department's activities are directed precisely to the aim of co-ordination of the fuel and power industries, co-ordination used in the right sense. The principal function of the Minister under the Ministry of Fuel and Power Act 1945, is to secure this co-ordination.
I give two examples of action which recently has been taken by my predecessor. One was the appointment of the Wilson Committee to investigate the further uses for coal and the other was the appointment of the Weir Committee last year, which reported early this year and which was specifically asked to deal with the question of co-operation between the electricity and gas industries. Obviously, however, my best means of co-ordination concerning the industries is the regular meetings which my predecessors held, and which I certainly intend to continue, with the chairmen of the boards and the councils and also in the co-ordinating committee, of which the House knows, which I intend to call as frequently as it appears to be necessary.
§ Mr. Roy Mason (Barnsley)
Does the Minister not consider it most important to have a meeting immediately, in view of the level of the industry and especially having regard to the large-scale imports of oil and the possible large-scale imports of liquid methane? Should he not call together the chairmen of the gas, coal and atomic energy industries and, 49 possibly, electricity, as well as the oil industry, and ask them to use their fuel and power resources in the best interests of the nation before we become too dependent upon imports of oil and liquid methane?
§ Mr. Wood
As I said, I shall certainly call the chairmen together if I believe that is necessary. I have, in fact, had meetings with them individually and I have been able to discuss with one chairman problems of his industry as it concerns another. I have not tried the other method yet—probably I shall try it later—but I believe that the individual discussions which I shall regularly have with the chairmen are likely to be the best way to proceed.
We are concerned with a fall in demand for coal during the last three years which certainly was not confined to this country but has been common to a great many industrial areas of the world. For instance, in the countries of the European Coal and Steel Community, in 1956 the demand was 280 million tons. In 1958, it had dropped to 250 million tons. There has also been a fall in coal deliveries in the United States. Therefore, I am not surprised by the anxiety, which is clearly being expressed and will be expressed in the House today, about the likely state of the coal market during the next few years.
Our own consumption has fallen by 33 million tons since 1956, but the Coal Board's estimate in its "Revised Plan for Coal" puts the demand in 1965 at between 200 and 215 million tons. I would like to make it entirely clear that my Department has co-operated in the making of this estimate and that the Government have accepted it as a reasonable basis for planning.
§ Mr. Wood
Perhaps I can stop the hon. Member from shaking his head by pointing out that the total estimate was arrived at after close consultation with fuel users. If any hon. Member would like to make further researches, the whole situation is explained in detail in Chapter II of the "Revised Plan for 50 Coal". I cannot think of any reason why these coal users, if they did not believe it, should have consistently overestimated their coal demands in 1965.
§ Mr. Taylor
Since the Minister has referred to me, may I put to him the question which I put at Question Time? As, for the first 42 weeks of this year, annual demand is now running at only 180 million tons, if the demand continues to fall does the Minister not think that the estimated demand of 195 million tons in 1960 is excessive?
§ Mr. Wood
I hope that if the hon. Member listens for about another five minutes he will find that all his questions are satisfactorily answered. I will certainly do my best.
There are other reasons, beyond the estimates to which I have referred that coal users have been making of their likely requirements in 1965, which have convinced the Coal Board—in consultation, I repeat, with my Department—that the recent rate of fall is unlikely to continue. I have been talking about the decline of demand for coal of 33 million tons between 1956 and 1959. There are a number of factors about those two years, the beginning and the end of the period, which, in my belief and in the Board's belief, are unlikely to recur.
I suppose that I had better start with the weather. We all know about the weather this summer. Indeed, we remember to our distress the very different weather that we had at the beginning of the period. That itself has accounted for a considerable drop and a considerable proportion—
§ Mr. Wood
Six million tons, I think, between 1956 and 1959.
There has then been a fall, which has now reached a very low level, from which some hope of recovery can be expected, in exports and bunkers. Indeed, the Coal Board put its export target at about 10 million tons. During this period, there has also been an increased use, as I have had pointed out to me on several occasions, by the power stations of fuel oil. As the House knows, the Government have secured the renegotiation of some of the contracts and the result of the renegotiation will be substantially to reduce the share of oil compared with the previous plan.
51 Lastly, I would point out what is perhaps the most important change of all. It is that for most of this period during which a demand has been dropping very sharply the growth in the country's consumption and greater fuel efficiency, which is a very considerable item in it, has not been offset by increasing industrial activity. As hon. Gentlemen very well know, there has been especially a low level in steel activity, and there does not seem likely in the future to be either that low degree of industrial activity or the low level of steel activity which has had a very great effect on the coal industry.
On the other hand, I should like to be entirely fair, because I have no desire to mislead the House I would enter this warning. Although the industrial expansion which we hoped for is now taking place its effects on the market for coal have been slower than I anticipated, and there are two reasons for that. The first is the increase, which I mentioned just now, in fuel efficiency, and, certainly, at first, as industrial expansion began, the fact that a great deal of it was concentrated among the lighter fuel-using industries.
I should like to add that it is most important for industrial costs generally—and I am sure that I carry right hon. and hon. Gentlemen with me here—that consumers who may be contemplating a switch to oil should not base their decisions on a comparison between the existing obsolete coal plant which they happen to have and the latest oil-burning plant which they may have in the future. I am quite convinced that they have not considered the very real advantages in labour saving, cleanliness and low cost of the latest coal-fired equipment. I hope that hon. Members will take the opportunity, if they can, this afternoon of corroborating this, because I am quite certain that it is true. I am convinced that for a large part of our industrial activity coal remains, and is likely to remain, the best economic proposition in industry's own interests and in the ultimate interests of consumers. I hope that that will not be overlooked.
I have so far talked about the question of production and demand. I should now like to go into the question 52 of stocks. Much concern has already been expressed about the present high level of coal stocks in the country. It is important that we should realise at the outset that, without the Coal Board's present stocking policy, a number of thousands of miners would have lost their jobs. None of us should be in any doubt about that. Without that stocking policy, the necessary adjustment of production which is now being undertaken by the industry would have been squeezed into a very short period and would have caused a great deal of misery and dislocation.
I have had the fear expressed to me several times in the last month that this period is comparable with the 1930s, and that the possible results of economic development in the next few years are likely to plunge the country into the misery and unhappiness of the 1930s. Therefore, I made a comparison this morning between the fall in demand between 1929 and 1932 and the fall in demand which I have just been describing to the House, and the comparative figures of the unemployment caused between 1929 and 1932.
The demand for coal fell by 50 million tons, and the unemployment increased by 150,000 then, and between 1956 and 1959, the demand fell by 33 million tons, which is a little over half the other figure, and, when compared with the increase in unemployment in the early 'thirties of 150,000, the increase in the last few years is just under 6,000. That does not show the whole picture, because added to the extra unemployment in the 'thirties there was also widespread short time, as hon. Members remember, and very low earnings.
Nevertheless, having said what I have said about the effect of the stocking policy on unemployment, the existence of 36 million tons of coal in stock, the written down value of which is about £140 million, must clearly cause concern, and not only on one side of the House. I think that we are all deeply concerned by it. I have been told that putting coal into stock for one year costs £1 per ton, and that if it remains in stock—and here I think I ought to correct in a small way a figure which I gave the other day—it is likely to cost a further 4s. per ton for every year which it remains. Therefore, for the first year it 53 costs £1, for the second year an aggregate of 24s., for the third year an aggregate of 28s., and so on.
Quite apart from the cost of stocking this coal, the Coal Board is also having very great difficulty in making available convenient and sufficient sites for the stocking of coal. There is no doubt at all about the anxiety of the Board to end stock-building, and, certainly, the Board would be the first to say that it has not been short of advice. It has received a very great deal of advice, particularly in the last week or two, and I expect that it will be given more advice this afternoon.
The Coal Board has recently been insistently advised to clear the stocks by holding a kind of bargain sale and selling them at bargain prices. I have no wish at all to pour cold water on any suggestion that is supposed to be helpful, but I am concerned in trying to explain to those who make the suggestions that perhaps the suggestions are not quite so helpful as they think they are. These bargain sales can certainly be held, and are held, in many businesses without affecting the sale of current production, and such businesses as hold the sales are no doubt right to do so, because they think that they are a wise commercial transaction. The Board has studied this matter very carefully, and I am convinced that there are most important differences.
The first main difference is that the consumer's need for any grade of coal can be satisfied from stocked coal as easily as from current output, and, therefore, if the prices of stocks are reduced now, and the Board had a sale of some part of the stocks which it held above ground, that coal would be bought from stock and not from current production, which itself would then pass into stock. Perhaps I ought to go a little further. Let us suppose that the Coal Board made a general reduction in the price of all coal, and not simply in the price of stocks. Again, it is hard to see how this would help. I have already mentioned the costs of stocking. Let us suppose that this coal at present held above ground remains in stock for two or three years. I estimate, and it is very difficult to make an exact estimate, that it would cost the Board about £7 million per annum for that stock on the ground.
54 Therefore, it may well be asked, "Why not spend this sum on price concessions and still make no greater loss than the cost of stocking would have involved?" The difficulty here is that, spread over the whole of its sales, which amount to about £850 million a year, this would only permit an average reduction in the price of coal of 1 per cent. or 2 per cent.—of 9d. or 1s. 6d. per ton. The demand for coal is, in any case, notoriously inelastic, and such an insignificant reduction in prices would not achieve the increased sales which would be necessary if the sale was to be a worthwhile commercial transaction.
There is a third difficulty, namely, that many consumers, particularly the electricity industry, would buy no more coal if the price were cut, and others on the verge of installing new plant would not be ready to invest their money in this way unless they were convinced that it was a lasting price reduction and not merely a temporary cut.
§ Sir Peter Roberts (Sheffield, Heeley)
Before leaving that point, will my right hon. Friend address himself to the possibility of selling the stocks at a cheaper price overseas?
§ Mr. Wood
I will certainly bear in mind any suggestions that are made in the debate and I hope that my hon. Friend will have a chance to elaborate his point.
If, on the other hand, we reject such expedients I am sure that the House will be anxious to re-examine carefully the Coal Board's forecasts of production and demand, which in themselves will determine the future level of stocks, whether it goes up or down or remains constant.
In 1959, the estimated production is likely to be 207 million tons and the addition to the undistributed stocks will be about 16 million tons. That is due to two reasons: first, the low level of consumption; and, secondly, the rundown in consumer stocks amounting to about 3 million tons. The Board's plans for next year are to reduce opencast production by 4 million tons and deep-mined production by about 7 million tons. Therefore, the expected production for which the Board plans next year, is 188 million tons of deep-mined coal and 7 million tons of opencast coal, a 55 total of 195 million tons, with an estimated demand of 196 million tons. If the Board is right in its estimate, it is clear that it will be able to begin a small stock lift.
Now, the plans which the Coal Board has made have not been based, as I hope I have shown, on economic to the exclusion of social considerations. There will be 170 pits closed between now and 1965 because the reserves are exhausted, because the pits are being merged with others or because they are no longer needed for manpower reserve. A number of other pits will be closed for economic reasons, the number depending on demand in the future. This, as I think hon. Members will agree, is no abnormal feature of the coal industry. May I repeat that the real service to the industry of the Coal Board's stocking policy is the greater gradualness of closures which this makes possible, and the consequent increase of opportunities for most displaced miners to be found other mining employment.
Perhaps I should say a word about manpower.
§ Mr. Gerald Nabarro (Kiddermister)
May I ask my right hon. Friend a question before he passes to manpower? The figures he gave us in connection with stacks postulate that next year the stock lift might amount to 1 million tons, which is the difference between 195 million and 196 million tons. Taking distributed and undistributed together, there is a total national stock of coal today of 53 million tons. Has the Minister no proposals of a substantial character to make for reducing this huge drug on the coal market other than 1 million tons?
§ Mr. Wood
It will readily occur to my hon. Friend that the faster the de-stocking takes place the less gradual can be the pit closures which the Coal Board plans. Therefore, a balance must be achieved; and I believe that the balance achieved by the revised plan for coal is the right one.
The plan envisaged by the Board for the next five years is that manpower, at present standing at 646,000, should be decreased according to whether the demand is at the high or low end of the range in 1965. If demand is at its lowest 56 manpower will be reduced to 587,000, that is, a reduction in about six years of 60,000 men in the pits. I do not believe that such a reduction—and remember that this is the reduction envisaged at the low end of the scale—should, generally speaking, cause serious unemployment difficulties. I have chosen my words carefully, because I am aware of the fact that there may be small pockets of unemployment in areas which are likely to be unattractive to other industries. I accept readily the responsibility that a number of Government Departments are concerned in this, particularly those of my right hon. Friends the Minister of Labour and the President of the Board of Trade, and I can assure the House that I will take the closest interest.
The Coal Board certainly does not take a faint-hearted view of the future. Its confidence is borne out in a continued bold investment programme. I am sure that only continued investment will make it possible to increase the competitiveness of the industry. By 1965, 80 per cent. of coal output is planned to come from new or modernised pits. When these changes have been made, and uneconomic pits have been closed, the ability of the coal industry to compete with other fuels—which is very much in hon. Members' minds this afternoon—added to modern production and energetic selling policies will be improved enormously.
I have been asked, and no doubt my hon. Friend will be asked when he winds up the debate this evening, about the obligations of the Government in this matter. I dare say that it will be suggested to us by hon. Gentlemen opposite—
§ Mr. Wood
And my hon. Friend—that the Government have considerable obligations. I agree that the Government have a considerable part to play, and I suggest to the House that there are many ways in which the Government mean to honour, and are honouring, their obligations to the industry. First, there is this Bill, which we may almost have forgotten but which we are discussing this afternoon, designed to enable the Coal Board to carry out the further necessary investment and reorganisation which it believes to be essential for the 57 future of the industry. The object of that investment and reorganisation is to increase the competitive power of the industry.
§ Mr. S. O. Davies (Methyr Tydvil)
Before the Minister leaves the point of the increasing competitive power of coal, has lie anything to tell us about its more extended use by the exploitation of the large number of useful and necessary by-products? Is that not largely how coal can achieve its full competitive power?
§ Mr. Wood
At the end of my speech I intend to mention the setting up by my predecessor of the Wilson Committee to examine that very question, the increasing number of uses of coal. Whether they are large or small I myself, lacking expert knowledge, would not know. I gather that certain of the hon. Gentleman's hon. Friends doubt whether the other uses at present not exploited are as great as he believes.
§ Mr. Wood
I have heard it said. Certainly, I think that the Wilson Committee's Report will be a positive document and will show that there are a number of potential uses of this raw material, and I hope that we shall take them into account.
The second way in which I suggest the Government are honouring their obligations is in the Order which we have before us today, and which makes possible the building of large stocks. If the House will forgive me for repeating it, its object is to allow the reorganisation of the industry to take place more gradually. I suggest to hon. Members, if they feel that the Government are not playing a part in this, that it would have been quite possible for a Government to take a very different decision and to hold that there was no justification for the stocking, and in that case, as the House will realise, the pit closures would, consequently, be greatly accelerated.
The third matter which I should mention is the initiative which the Government took in securing a renegotiation of the power stations' oil programme, which will make a significant addition to coal demand beyond what was expected in the next few years.
58 Fourthly, the Government have agreed with the Coal Board in its decision to close down opencast production as fast as its contractual commitments will allow. Production in 1960 will be half what it was in 1958, and I am glad to say that by 1965 it will be confined to only a few large sites. Obviously, one substantial reason for the abandonment of opencast mining is the avoidance of hardship to the mining community. One thing that I ought to mention is that until recently the Board was continuing a large-scale prospecting programme in case of future need. It has now decided that it must make big reductions in the programme, and I do not expect that there will be any need to enter new prospecting sites except for certain scarce coals, like anthracite in South Wales. Thus, except for those special coals, I hope that we shall be able to bring prospecting absolutely to an end by 1962.
§ Mr. James Griffiths (Llanelly)
Since anthracite is very scarce, do I gather that there will be no further closure of anthracite pits?
§ Colonel C. G. Lancaster (South Fylde)
Do I take it that my right hon. Friend's reference was to opencast coal and not to deep-mined coal?
§ Mr. Wood
That was my intention. I apologise if I did not make that clear.
The fifth thing which the Government are doing is to ensure the fullest discussion—this, I am sure, is of the greatest importance, because it has already been mentioned to me a good deal—between the Coal Board and the Gas Council to bring about the greatest co-operation between those two industries in the use of coal.
Lastly, I return to the matter to which the hon. Member for Merthyr Tydfil (Mr. S. O. Davies) drew my attention. The terms of reference of the Wilson Committee laid down that it was to review the work done in recent years on the development of processes in which coal was the basic raw material. 59 It is on that kind of line that the Committee is working, and I hope that it will report before very long and that the report will be a very positive affair.
It is exactly a month today since I went to the Ministry of Power, and it has not been very difficult for me to sense in a number of quarters some despondency about the future of the industry. There is the fear, which I would guess will be re-expressed this afternoon, that there will be a considerable collapse in demand. There is the fear, which I have had expressed before, of widespread unemployment in the industry. That is certainly not the view which I have been able to form in the short time in which I have been in the Department.
I see the future of this industry and, indeed, the future of all fuel industries in this country as accompanying an expansion of industry in the future when not only industry itself expands in size and production, but more industrial processes gradually become dependent on power. If that happens, as, I suppose, most of us would agree that it is likely to happen, then the total demand for energy in this country will increase, and I cannot see any doubt at all about the share of coal in that fuel requirement remaining very large.
For reasons which I have already given, I am convinced that it would be foolish for the Government—it would not only be foolish; it would be almost impossible—to try to decide exactly what the share of the coal industry should be. I am convinced that the size of the coal industry must depend on the choice which fuel users make and must ultimately depend on the ability of the coal industry, by its competitiveness, to influence the choice that consumers make.
With the continued investments which is made possible by the Bill with the increasing concentration of output from new or reconstructed pits, with an increase—which I was glad to see has been continuing very substantially over the last two years—in output per man shift, and with the new emphasis which the Coal Board has put on marketing, I cannot see any reason why the estimates made by the Board should not accurately represent the share that coal will have in the nation's future requirement.
60 I am convinced that the "Revised Plan for Coal" provides the best basis for the reorganisation and development of the coal industry in the years immediately ahead. I have had the pleasure of several meetings with Sir James Bowman and other members of the Coal Board, and I have absolute confidence in their determination to carry out the plan which they have set before themselves and the industry. I would, therefore, ask the House this afternoon to give a Second Reading to this Bill, which provides the necessary finance for the revised plan and which will give the Board, the industry and myself the necessary authority and ability to put the plan into operation.
§ 4.47 p.m.
§ Mr. Frederick Lee (Newton)
Unless I am greatly mistaken, this was the right hon. Gentleman's maiden speech on the subject of power, and we congratulate him most heartily upon it.
§ Mr. Lee
It must be unusual for the two Front Bench speeches to be maidens. The hon. Member for Kidderminster (Mr. Nabarro) suggests that the right hon. Gentleman's speech was hoary even if it was a maiden. However, it happens that the right hon. Gentleman's speech and mine are maidens on this subject.
I have tried to keep well abreast of industry in general. Because I have large numbers of coal miners in my constituency, and the administrative block of the Atomic Energy Authority there as well, I have tried to get a general knowledge of these important matters. In listening to the right hon. Gentleman, I felt a little consolation compared with what I feel on reading some of the utterances of former Ministers of Power and of the right hon. Gentleman who is now the President of the Board of Trade.
The right hon. Gentleman has told us broadly what his policy would be and he mentioned questions of relevant economic considerations. I thought that that was a big improvement on what one has heard from the present President of the Board of Trade, who defined his approach on 4th May, 1959, when he said:Our aim must be a cheap and abundant supply of fuel. Our policy is to obtain it by proper freedom of choice for the user and 61 competition between suppliers, and to encourage co-operation between suppliers when this is economically justifiable."—[OFFICIAL REPORT, 4th May, 1959; Vol. 605, c. 45.]I thought that the right hon. Gentleman went a lot further to meet that for which he was searching, a fuel policy. He quoted the Ridley Report, but he did not point out that the Ridley Committee also recommended the setting up of a joint planning board and tariff advisory committee. Those were very important recommendations of the Ridley Committee about which successive Tory Governments have refused to do anything.
The Opposition welcome the Bill. We accept the need for the Coal Board to be enabled to extend its borrowing powers, and, broadly, we accept the provisions of the Order to which the right hon. Gentleman referred. I have no criticism of the Bill to offer, but it must not be assumed from that that we do not have the heaviest criticisms of the Government's general power policy.
The right hon. Gentleman said that it was a month today that he had received his present commission. About two weeks ago today, I was asked to interest myself in the same problem. I, too, have been doing a little research to find out about same of the things—a great many of them—on which I was ignorant. Up to now, I have managed to take my researches far enough to realise how much about the subject there is that I do not know.
I began, as the right hon. Gentleman began his speech, by looking up the target figure. The present President of the Board of Trade told us that that figure was 300 million tons of coal equivalent, and the right hon. Gentleman mentioned that figure again today. Does that figure still stand? Is that the aim the Government have in view, and are the right hon. Gentleman and his hon. Friend confident that it can be achieved? I found the same difficulty when I was investigating the composition of that figure. I read several publications on the matter and in the Economist I found these words:The Ministry of Power has not yet form-ally retreated from the estimates of total fuel consumption in Britain in 1965 to which Mr. Maudling publicly committed it in April, 1957. … But, privately, the arithmetic is being revised, in Whitehall as elsewhere. … If one assumes that recovery has already begun 62 this year, and that national income may rise 3 per cent. annually until 1965 … one might revise the Government's last public guess that Britain will use about 300 million tons of coal equivalent by 1965 down to a little over 280 million tons.That is the view of the Economist.
§ Mr. Lee
I will give the hon. Gentleman the date later.
Are the Government convinced that they can adhere to that figure of 300 million tons of coal equivalent? If that is not the case, all of our calculations will immediately go awry.
Turning to the other side of the ledger, how that figure is to be made up, I did -a week of intense research trying to find out about the background of this subject and simply finding out how much I did not know. After a further week's research I made a striking advance—I now believe that Ministers do not know either. Indeed, because of Ministerial ditherings, the Coal Board has now been reduced to the point of planning a target for 1965 anywhere within a 15 million tons estimate. In other words, the Board cannot estimate within 40,000 to 50,000 miners the size of the labour force required and within 35 to 70 pits how many pits will have to close down. That is the very serious situation to which the Government have driven the Board.
I continue the quotation from the Economist:… the government is committed to supplying, in 1965, perhaps 8–12 million tons coal equivalent from nuclear generating stations. The oil industry reckons that it can sell in British fuel markets perhaps 45 million tons of oil, or just over 75 million tons coal equivalent. …That would leave the coal industry with a home market in 1965 for something over 190 million tons; allowing a margin for exports and bunkers, perhaps 195–200 million tons. Since one has to consider its huge stocks, it may be worth adding that this crude arithmetic suggests home demand will hardly exceed 195 million in any of the years from now until 1965. What this means, broadly, is that by 1965 the Coal Board may have a market for about as much coal as it may be producing say next year; but that to reduce its stocks substantially it would need, for a time, to cut output below consumption.If that is to be the picture—and we have no assurance that we are able to consume 300 million tons of coal equivadent by 1965—then the picture which 63 the right hon. Gentleman painted was wildly optimistic. No wonder that leaders and members of the National Union of Mineworkers are sick with apprehension about the future of the miners themselves.
I have quoted a reference to nuclear energy, another subject which I have investigated. At one stage, I thought that I had found a figure of 14 million tons of coal equivalent for 1965, but, as with coal, I found all sorts of statements casting considerable doubt on that figure. Will the Parliamentary Secretary give us any firm estimates? We are now getting to the point where, if we are to build up the league table, as it were, and find out what various types of fuel are to contribute, we should have a very clear picture of what we are to get from nuclear energy by 1965.
From the research I have done, the nearest I could get to understanding Government policy was the belief that the Government were working to a theory of encouraging as high a figure as possible of imports of foreign fuel oils, with the margin between that and the 300 million tons made up by home-refined petrol by-products, nuclear power and coal—and that is a sad situation for indigenous fuels. The first advice I tender to the Minister is that he should pull up some of his colleagues by their bootlaces. The proof of the statesmanship of some of them in the past few years has been their ability to restrict industrial development and production.
It may be deemed a blinding flash of the obvious, but it is clear that a power programme cannot be planned in a vacuum, and I commend to the right hon. Gentleman the thought that there has to be a very close relationship between the programme and the rate of consumption. It has been said in all parts of the House that our objective is a continually increasing living standard for everyone. We had it from the Home Secretary that we could double living standards in twenty-five years, and that statement has often been quoted. The Opposition are dedicated to the proposition of vastly increasing living standards.
The most essential element in doing this is to increase the supply of power at the elbow of every one of our industrial workers. Yet, with that as a prime 64 condition for reaching our objective, we are invited to enter into heavy mourning about the alleged surplus of coal which is the greatest source of indigenous power for the foreseeable future.
It may be one more illustration of the fact that we live in an age of paradox, but for a generation the Coal Board and the miners were in the dock for not providing sufficient coal. Indeed, that was often quoted as proof of the failure of public ownership. The Government now having compelled them to produce less, they are still in the dock, this time for producing too much. For years the miners were given more newspaper space than film stars. Absentee stories were best sellers. Now the same papers are getting close to charging them with antisocial activities for winning so much coal.
The answer is not that we need less energy, but that we need to increase our power to consume more. We should not condemn the coal industry for being too effective in producing power. We should be demanding more efforts from those who are failing to modernise the manufacturing industries to the point at which they could absorb the energy that we now have at our disposal.
The first requirement of a successful fuel policy is an efficient, modern, machine tool industry capable of modernising our energy-using industries, and, of course, a Government which does not monkey about with high interest rates and credit squeezes if the nation seems in danger of doing what we set out to do, that is, producing more wealth.
I have heard and read criticisms of the Bill. Almost all the criticisms have been from people who cheerfully accept the principle of granting ever-increasing doles of public money to private industry. Apparently they object to the nation increasing its investments in nationally—owned industries-investment from which we draw substantial rates of interest.
The right hon. Gentleman painted his picture of the coal industry.
§ Mr. Nabarro
The hon. Gentleman referred to critics of the coal industry. I wonder whether he would name them? I hope that the hon. Gentleman is not including me.
§ Mr. Lee
I reserve my comment. I would like notice of that observation.
If one talks about the coal industry today, what one says depends very largely on whether one looks at it from the outside or from within. The interested outsider who has looked up all the facts sees an industry which has rapidly modernised and streamlined itself to a very high state of efficiency. That efficiency is now showing itself in new records of output per manshift. It is also showing itself in the reorganisation which will ensure that by 1965 about 80 per cent of the coal produced will be coming from reconstructed or new pits, to a target figure of between 200 million and 215 million tons a year of better and more consistent quality coal. When we remember that only a short three years ago the Government were still demanding coal almost without regard to price, and that to meet this the Board had to maintain large numbers of uneconomic pits, the transformation is even more remarkable.
That is not the picture of an industry which belongs to the past, as so many people seem to think. It is the picture of an industry with a great future as Britain's most effective producer of our frost vital fuel.
If we look at the picture from the inside, it looks very different indeed. The miners have seen the 1950 and 1955 plans, basing themselves on 240 million tons of coal annually, scrapped. They have seen the new estimate of 200 million to 215 million itself causing very great hardship in many of our coalfields. Worst of all, they are now viewing such plans as something to be taken with the proverbial pinch of salt. That is not because they lack confidence in the very able men in charge of the industry, but because they are convinced that the Gov- 66 ernment are paying lip-service to the requirements of the industry while pursuing policies which are bound to lead to further contraction and unemployment. During 1958, manpower in the industry fell by 22,500. During 1959 a further reduction of 30,000 has taken place, and, as we see the plan now, we know that in the very near future more miners will have to leave the industry.
I have already pointed out the Government's complete lack of a fuel policy. The Government's belief in a free-for-all competition has caused the Board to adopt a range of between 200 million and 215 million tons for 1965 instead of having a firm estimate on which to work. We know, as the right hon. Gentleman reminded us, that exhaustion and other causes will result in the closing of about 170 pits in any case, but, depending on whether 215 million or 200 million tons are required, the number of miners required will be reduced by between 40,000 and 50,000.
With all that, how does one plan an industry on a basis of that type? Whether the right hon. Gentleman believes in a national fuel policy or not, I suggest that we need a long-term policy for the production of fuel, viewing the fuel industries as a whole. Within that, the coal industry must be given a firm output figure around which to plan.
In the debate on 4th May of this year my right hon. Friend the Member for Blyth (Mr. Robens) said:Our fuel policy should be based upon the first priority of the use of indigenous coal. The second priority should be to use the oil products from the United Kingdom refineries and the third priority should be a reliance upon the oil products from the foreign refineries."—[OFFICIAL REPORT, 4th May, 1959; Vol. 605, c. 40]Priorities were decided when my right hon. Friend was making that suggestion, but they are even more vital now. My right hon. Friend's third priority must be looked at very closely indeed.
As a principle, I would argue that imports of fuel oil should be used purely as a balancing factor as between coal supply, nuclear power, and fuel oil from our own refineries on the one hand, and the overall target at which we are aiming in any particular year. The Government's free-for-all policy on this matter fails to take into account the fact that fuel oil is sold at below the price of 67 crude oil because it is merely a by-product of petrol. Between 1953 and 1958 fuel oil consumption increased by 11½ million tons of coal equivalent, or by 1¾ times what it had been. Let us look at the sources. United Kingdom oil production increased by 22 per cent., the reduction of United Kingdom exports amounted to 16 per cent. and increased imports to 66 per cent. Whereas some European countries protect their coal industries from this kind of thing, the Government have refused point blank to do anything about it.
I am not asking for special treatment for the coal industry. I contrast the treatment which the coal industry is receiving with that which the House is considering for horticulture. We have a Bill before us now for horticulture, an industry which is already protected by tariffs, yet the Government are handing out a subsidy of £7½ million. We do not object to that. We believe that there is something to be said for it, but how, in heaven's name, can one justify the sort of treatment which the coal industry is receiving at the hands of the Government when we see the huge subsidies that are being paid to agriculture, and when we are even now engaged on extending those subsidies to cover the horticultural industry?
§ Mr. Lee
We hear talk about consumer's choice. Was the Electricity Authority given consumer's choice when it was instructed to go from coal to oil in its power stations?
During the coal shortage the National Coal Board was forced to import dear foreign coal which it sold at low British prices. The total loss on this since 1955 has been £45 million. However, having aided the nation in this way, in matters which no private industry is ever expected to do, the Board has now received this disgraceful approach from the Government itself.
No matter how the right hon. Gentleman views the question of oil he will have to face the fact that, now that we have barriers to its going into many European countries, this country will be the dumping ground for foreign fuel oil, unless we do something about it. We 68 used to have a slogan—"Buy British". Will the Government cease their anti-British activities and live up to that slogan? I cannot believe that they will carry party politics to the point of preferring to support foreign private enterprise rather than British nationalised industries.
The Government estimated that the country's requirements, in terms of coal equivalent, would rise by 2 per cent. a year, from 250 million tons in 1955 to 300 million tons in 1965. This assumes an annual increase in industrial production of 3½ per cent.—a figure which I regard as ridiculously low. A variation of even ½ per cent. in our annual increase of production corresponds to 8 million tons of coal equivalent. We can see what a revolutionary effect a real drive for productive increases would bring in our fuel position.
This is one of the reasons why I suggested to the right hon. Gentleman that the finest way of supporting our fuel policy would be to create a modern machine-tool industry. If we achieved the sort of increases in production which are now taking place in the United States, the Soviet Union and other countries—increases ranging from 5 per cent. up to 10 per cent. per annum—and used the formula of priorities which I have suggested, the problems of the mining industry and the fears of the miners would be at an end.
Between 1948 and 1956 the consumption of oil increased by 100 per cent. while that of coal increased by only 12 per cent. In 1948, out of a total energy requirement of 212 million tons, coal supplied 91 per cent. and oil 9 per cent. In 1956, out of a total energy requirement of 254 million tons, coal supplied only 85 per cent. and oil 15 per cent. Up to that point, although coal was supplying a smaller proportion of the total energy requirements than in 1948, the amount of coal consumed had increased from 192 million tons to 215 million tons.
Then we had a very dramatic change. Between 1956 and 1958, because of Government-provoked industrial stagnation, the total energy requirement fell. Coal consumption was down by 20 million tons, made up of a fall of 7 million tons in 1957 and over 13 million tons in 1958. In the first six months of 69 1959, coal is again down by 10 million tons as compared with the first six months of 1958. While this has been happening to coal, oil consumption has risen. In 1958 it was 50 per cent. higher than in 1957, and in the first half of 1959 it was one-third higher than in the first half of 1958.
In other words, although up to three years ago oil was supplementing coal, since then it has been replacing it. So we emerged from 1958 with a total energy requirement of 248 million tons, a coal-equivalent consumption of 199 million tons, or 80 per cent., and an oil consumption of 47 million tons, or 20 per cent. That cannot provide the mining industry with the prospects which the right hon. Gentleman was suggesting. He told us that although some miners were bound to leave the industry—and he mentioned a figure of 60,000—he still felt that it would remain a healthy industry.
Has he ever considered the effect on recruitment of the figures that I have given? Who, in heaven's name, will send a boy into an industry which is declining in this way? I have given the figures to illustrate the fact that there is a gradual reduction in the coal percentage of our fuel and an increase in the oil percentage. I defy anybody to show me why that graph should not continue to go down for coal and up for oil, with the present Government's fuel policy. The right hon. Gentleman will never be able to recruit the type of boy he wants so long as that is the picture of the industry.
In his speech on 3rd November, 1959, the Home Secretary said that the Government would re-examine the power stations' oil contracts,which will lead to an extra 1.7 million tons of coal consumption next year and 3.9 million tons in 1965–66.I was rather surprised that the right hon. Gentleman did not give us more information about this today. What did the Home Secretary mean? Did he mean that some dual-firing stations would revert from oil to coal? What are we to infer from what the Home Secretary said? Hon. Members will recall that he was replying to my right hon. Friend the Leader of the Opposition, who had mentioned this question in his speech. The Home Secretary did not dwell upon the 70 figures; he merely told us, in the bare terms that I have quoted, what the Government were going to do, and we would like the Parliamentary Secretary to give us an analysis of what that statement means.
§ Mr. Lee
If it means that some station,, are to go back to coal burning it will be very welcome news. If that is so, perhaps the Parliamentary Secretary will name those stations which are to revert.
Further, the Home Secretary made the point that the Government wouldprovide finance to help enable the stocks of coal and coke … to be held."—[OFFICIAL REPORT, 3rd November, 1959; Vol. 612, c. 977.]The Minister dwelt a little on that point, but I would point out that the words "provide finance" may be misunderstood. I am sure that the Home Secretary would be most distressed if they were. He would not want to feel that the country interpreted his statement as meaning that the Government were going to give the National Coal Board certain amounts of money. What he was saying was that the Bill was going to come before the House, and that the Government were merely going to increase the Board's borrowing powers. He could have pointed out that the Board would operate at the usual interest rates, and would receive no subsidies or public money of any kind.
In this connection, it is interesting to note that between vesting day and the end of 1958 the Board had repaid to the Treasury about £240 million in interest on money borrowed, and I estimate that a further £30 million will be paid during 1959. As the right hon. Gentleman pointed out, the focal point of criticism has concerned the holding of stocks, and suggestions have been made that they should be sold at cheap rates. The Board and the miners are making a contribution towards running down the stocks. The Board has announced that no further stocking will take place after this year, a considerable programme of pit closures will take place, and opencast production will be curtailed next year by 4 million tons.
I join with the right hon. Gentleman in posing one or two questions to the critics, having absolved myself of the 71 charge of numbering the hon. Member for Kidderminster (Mr. Nabarro) among those critics.
§ Mr. Nabarro
The hon. Member has referred to pit closures. Last Monday my right hon. Friend said that the effect of next year's closures of forty-six pits would reduce deep-mined coal output by 4.8 million tons in the year. Is it not a fact, however, that demand is still likely to fall at a faster rate than the rate of pit closures? If that estimate is wrong, will my hon. Friend the Parliamentary Secretary deal with the point?
§ Mr. Lee
Absolutely. That is why I say that we cannot have a proper fuel policy unless we consider the global demands of the economy. I am grateful for the hon. Member's intervention, which helps me considerably in what I am saying.
I wonder whether the critics of stocking realise that there is now some eight weeks' production in stock. Is it really suggested that we should close down the coal industry for eight weeks in order completely to eliminate stocks? Another thing which I do not think they take into account is the fact that the usual stock margin at the end of December is generally of the order of 20 million tons distributed and some 10 million tons undistributed stocks still with the Board.
The present agitation, it seems to me, presupposes that either no stocks or very small stocks are carried at this period of the year. It is quite true, of course, that the present undistributed stocks are much larger than usual. This year some 15 million tons have been added and their cost is very heavy. I agree that the cost is about £1 per ton. It is worth noting that, indeed, the Board would have made a very considerable profit both last year and this had it not carried these stocks.
Fifteen million tons of coal represents the output of 50,000 miners. Had the Board not stocked this coal these men would be unemployed and drawing unemployment benefit. Thus the Board, while placing itself in a sounder financial 72 position, would have thrown men on to the National Insurance Fund and many of their families on to National Assistance. If we look at the matter in this way we see that the industry is not only not being subsidised by the Government but is, in fact, subsidising the Government.
Regarding the suggestion for selling stocks cheaply, let us look at the position of the stocks. I calculate that about 2.6 million tons are in large coal. If we wanted to find a way of running that stock down quickly and if the Government felt inclined to act like Father Christmas, I have no doubt that many old-age pensioners would be very happy to benefit from a couple of bags of that coal at the Government's expense. That would be a contribution. There are 4 million tons of graded coal, 18.3 million tons of small coal, 7.7 million tons of unscreened coal and some 600,000 tons of anthracite. In other words, the vast majority is industrial fuel.
If hon. Members will look at the list on page 8 of the "Revised Plan for Coal", a list of the National Coal Board's customers, and then pose to themselves which of those customers would buy more coal if rates were reduced, I think they will realise that there is precious little in the argument that to reduce the price would result in getting rid of stocks more rapidly. I think the Minister was right when he said that all that would happen would be that the customers would take that coal at the reduced price and that the new coal would merely go back into stock to replace that which had been moved.
While on the question of stocks, I wish to ask the Parliamentary Secretary another question. I noticed that on 4th May the Paymaster-General said:What I would say in answer to that is that we make provision against temporary interruptions, as we are doing by a substantial stockpiling, in which the oil companies have been playing a large part."—[OFFICIAL REPORT, 4th May, 1959; Vol. 605, c. 47.]In other words, there are now pretty vast stocks of oil in this country. I ask the Parliamentary Secretary to tell us the size of those oil stocks. What is the coal equivalent of these stocks and how much does it cost the taxpayers of this country to stockpile that oil in contradistinction to the fact that it does not cost 73 the taxpayers a single penny to stockpile the coal about which we have heard so much?
Methane gas has been mentioned.
§ Mr. Lee
I sometimes wonder why the veil of secrecy seems to be drawn over this particular operation. I noticed that on 17th November last the Financial Times gave one or two points of information which are worth having. It spoke about experiments and said:Most spectacular of these experiments is the importation of natural gas in liquid form. And the success of the five trial voyages which have already taken place is a tribute to the technical skill and initiative of those engineers and others who have been responsible for the project. It is clear that, from the technical point of view, the importation could be carried out on a large scale. The economics of the project are being further examined. Tankers capable of carrying at least 10,000 tons of the liquid (as against the 2,000 carried by the trial ship "Methane Pioneer") would be required to gain the full advantage of this method of gas supply. Although this experiment has attracted the interest of the world, it may not, in the long run, be the most significant of our projects.In other words, the Financial Times seems to know quite a bit about what is going on regarding the importation of methane gas.
§ Mr. Lee
I am saying that the country is not being told what are the long-term projects of the Gas Board so far as the importation of methane gas is concerned. Indeed, when Questions are asked in the House about the ships necessary to import the gas we can never get clear answers as to whether there are under construction the sort of ships necessary for the importation of larger quantities of the gas. I believe that we are entitled to know whether the Gas Board, in particular, intends to extend its importation of methane gas. If it does, I would pose a straight question. What happens to Durham, one of the areas which, if this gas were to become a prime method for the Gas Board to employ instead of Durham's coal, would be in very great danger indeed? Also, what is to happen in this respect so far as the Local Employment Bill is concerned?
74 We all know that the boundaries to be fixed for the new Development Areas are unknown to anyone outside the Board of Trade. Many of us have tried very hard—my right hon. Friend and myself in particular—to get to know the intentions of the Government about the Development Areas. Is any consideration being given to what could happen to the coal areas? I mention Durham in particular because I am talking about methane gas, but what would be the plight of great counties of that type if consideration is not given to what could happen in the coal areas if methane and liquid gas are to replace our indigenous coal products?
We see that the Board estimates to export 10 million tons of coal. We all know what the problem is in the export market. The hon. Member for Sheffield, Heeley (Sir P. Roberts) asked why we did not export the cheap coal. We know that coal is piling up in many European countries. The greatest problem which faces our coal industry in attempting to increase its exports is the position of Poland where we know that dumping is taking place and where coal is being sold below the price of production and the cost of transport in order to get markets. What are we to do? Are we to enter into this cut-throat competition? We did that once and we saw the results of that.
§ Mr. Lee
Are we to enter into that form of competition which can never do any good either to the British people or to the British coal industry, or, indeed, in the last analysis, to the Poles themselves? We know perfectly well that the Poles are doing this because they are desperately short of foreign currency. That is the real reason. Before we get to the extreme position of cutting each others throats, surely the Government should enter into negotiations with the Polish Government for proper credit arrangements to be extended to Poland in order to help her out of her difficulties and to give us a far better chance of improving our coal exports.
One could say much more on this subject. I have tried to show the basis on which we on this side of the House feel that we can solve the present fuel problems and increase the living standards of our people at the same time. We commend our list of priorities. For the 75 Government to refuse to accept the imports of foreign oil purely as a balancing factor, which is our big point, is to continue to preserve a position that is bound to result in even greater chaos to the whole of our fuel industry than we have yet seen. While we accept this Bill as necessary under present conditions, we believe that it is not good enough for the Government to stand away and say that these are the responsibilities of the Board and not of themselves.
In this day and age the economic policies of a Government determine what great enterprises like the National Coal Board are bound to do. I put it to the House and the country that we have now invested perhaps thousands of millions of pounds in one of the most efficient coal industries in the world. There are great numbers of men in villages throughout Britain who have invested even more—they have invested their lives. It is not good enough for the Government to stand back and to allow fuel oil imported from abroad to be dumped into this country at a price lower than that of crude oil. To allow that kind of thing to happen presents a great danger to our coal industry, which is something that must not be allowed. We demand a complete alteration in Government policy and if we do not get it, we shall agitate throughout Britain until we do.
§ 5.31 p.m.
§ Viscount Lambton (Berwick-on-Tweed)
I do not intend to follow some of the arguments advanced by the hon. Member for Newton (Mr. Lee), but there is one thing which I wish to call particularly to the attention of the House. It is the marked and great change in the approach to the problems of the coalfields by right hon. Members opposite during the last few years. Ever since 1945 I have been interested in politics and I have followed all the arguments advanced by the party opposite. The other day I was reading the arguments put forward by hon. Members before the war. Again and again hon. Members opposite, particularly those representing constituencies in the County of Durham, in South Wales and elsewhere, did everything in their power to undermine the stability of the deep-coal mining industry—
§ Viscount Lambton
They did it by giving personal examples. One hon. Member who is not present in the Chamber today has given to the House four times an example of the disastrous and unpleasant consequences of working in the coalfields. Again and again it was said by hon. Members of the party opposite that the sooner there were less people working in the coalfields the better. One hon. Member said that it would be a happy day for him were there no longer any miners, because of the unpleasant consequences of working underground.
What do we hear now, when there is a threat to the political future of a great many hon. Members of the Labour Party and that of a strong supporting section of the Labour Party? Suddenly we hear from hon. Members opposite the expression of an intense desire for as many people as ever to continue to work in the coalfields under conditions which they once said were so unpleasant that they should not be allowed to continue.
§ Mr. Alan Fitch (Wigan)
Is the hon. Member suggesting that in order to continue their political careers, hon. Members on this side of the House wish to keep miners underground?
§ Viscount Lambton
That suggestion is contained in the words of the hon. Member for Wigan (Mr. Fitch). I did not say that. I am saying that up to the present hon. Members opposite have done nothing but say how unpleasant were working conditions underground.
§ Viscount Lambton
Now we hear hon. Members opposite voicing an intense desire that miners should continue to work underground. They are condemned by their past words. It seems to me that they wish to continue this form of employment and to allow men to continue to work underground in order to protect their own political power.
§ Mr. Joseph Slater (Sedgefield)
The hon. Member has made a direct attack on the Durham area from which he comes. I should like him to read the 77 history of the Durham Miners' Association and the conditions prevailing since 1939 before the National Coal Board took over. It is true that hon. Members who represent coal mining constituencies have no desire for their people to remain in the pits, if this Government are prepared to provide other employment.
§ Viscount Lambton
I am very pleased to hear that. It supports the argument which I hoped to develop later in my speech. I am grateful to the hon. Gentleman.
I, and many of my hon. Friends are against a continuation of the uneconomic employment underground of large numbers of people in order to maintain a certain number of people in power politically. I agree with the hon. Member for Sedgefield (Mr. Slater) that conditions underground are unpleasant. Anyone who has been down a mine, as I have, will realise how unpleasant they are. I should have thought that the sooner there were fewer people working underground, and more working on top, the better.
I think it only fair to ask my hon. Friend the Parliamentary Secretary to the Ministy of Power what is to be the future policy of the Government. If we are to have the policy, advocated by many people, of a closure of uneconomic pits so that the coal industry may be made economically sound and able to compete with other forms of fuel, it will be necessary to throw numbers of men out of employment. We have not heard enough from the Minister about this problem, but he said something which I am quite sure represents the key to the situation. My right hon. Friend said teat this is not a problem which he can face alone. It must be shared by my right hon. Friends the Minister of Labour and the President of the Board of Trade.
It is not right that we should pursue a policy of making coal an economic fuel unless at the same time we see that the large number of people who will be unemployed as a result of such a policy have the opportunity to find work in other types of industry. For the sake of the economy of this country and of our industry, it is essential that coal should be made an economic fuel and I do not think that can be achieved without closing some pits. Such closures will result in unemployment, but that unem- 78 ployment cannot be allowed to exist in areas where there is no alternative employment to offer to the people who have lost their jobs.
I suggest that there should be a national policy and consultation at the highest level between the Minister of Power, the Minister of Labour and the President of the Board of Trade, with two purposes as its aims. The first would be to see that coal is made an economic fuel, and the second to see that, as a result, those people who will be thrown out of employment should have alternative methods of living offered them. By that, two purposes would be achieved: first, the coalfields would be put on a sound financial basis and, secondly, those thrown out of work would not be without a livelihood.
§ 5.40 p.m.
§ Mr. William Stones (Consett)
I wish to speak in support of the Bill for the very reasons which were advanced by the Minister of Power. I hope to show quite clearly that if there is anything that can be done by the Government and this House to help the coal industry during the present critical period, that will be in the interests of the nation as a whole.
I should, perhaps, declare my interest in speaking in this debate as a fully paid-up member of the Mineworkers' Union. Both the Minister and my hon. Friend the Member for Newton (Mr. Lee) apologised for their use of statistics. I believe that hon. Members on both sides of the House by now will have had as much in the way of statistics as can be readily digested. Therefore, I shall refrain as much as I can from imposing on the House in that respect. It will be necessary, however, in order to emphasise certain points I make, to resort to figures. I ask for forbearance to be shown in that respect.
Because I worked for so many years in the mines of Durham and because I have the honour to represent a great mining constituency, I may be permitted to make certain specific references to that part of the country and to put what I consider to be the views of the majority of my constituents. In my constituency, there are many thousands of miners. I am glad that the remarks of my hon. Friend the Member for Newton have given me a lead into that aspect of the subject, and I shall have 79 the opportunity of making certain replies to the hon. Member for Berwick-upon-Tweed (Viscount Lambton). County Durham has a very long history in mining. I think I can say with sincerity that it has played a very honourable part in the building up of our great industrial nation. The men of Durham, in peace and war, have played a big and honourable part and have done their bit. That is all I claim for them. On that account alone, we should not overlook the Durham Division of the National Coal Board in our deliberations today, for the immediate future of our county is to be determined largely by what takes place in the mining industry, particularly in the Durham Division.
Time and time again, in this House, we have been told of the enormous tasks which confronted the National Coal Board in the years immediately after the war when manpower and output were far below the pre-war level. The Reid Report on the mining industry, just before nationalisation, summed up the effects of the war and the years of depression, and made quite clear what an enormous job there was to be done. It is to the credit of the National Coal Board and everyone concerned with the task of reorganisation and reconstruction and improvement in mining technique that the resultant increase in the output per manshift was tackled with enthusiasm and vigour to the advantage of the nation as a whole. I mention this because I believe the nation owes a debt of gratitude to the men on both sides of the industry who worked so hard and incessantly on our behalf. I say to hon. Members that we shall fail in our duty here if we ever forget that.
I want to make quite clear that when I talk in this strain I am not asking for sympathy or pity when the claims of the miners are put forward. I ask only for justice, to which I think we are all morally entitled. It is true that many men in the industry were attracted to it as a result of improved wages and conditions—long overdue—and by the economic security which was promised them. Quite a number of others were compelled to go back into the industry during the war years. They were directed there. Many of them had very congenial, lucrative jobs, but they were 80 compelled to go into what was then, and still is, a very unpleasant task. Many of them are still there.
As has been pointed out, until recently the cry has been for more coal and more men. A great and determined drive to achieve maximum output was required to meet the ever-increasing demands as industry expanded. Our mining men responded on the basis that there was no danger of becoming unemployed in the foreseeable future. At this moment, these same men who worked so hard to achieve what was asked of them are in dread of what the future has to offer, having regard to the situation in the industry at present.
The miners, having increased productivity and output, now see great stocks of coal piling up and wonder whether by hard work they have endangered their livelihood as miners. I do not need to dwell on the evils of unemployment, the frustration and poverty and moral degradation. Men who are fit and able to work but are denied the right to work cannot he expected to remain still. Is there any wonder that there is concern at the situation? The noble Lord, the predecessor of the present Minister of Power, a few months ago in another place said that he was very anxious about the industry. The same statement has been made by prominent spokesmen on both sides of the House. Our men are more than anxious, they are afraid. I hear these fears now being expressed in Durham, and the latest reports and plans of the National Coal Board do little to allay such fears.
I have a letter from the clerk to Consett Urban District Council expressing the views of his council. I do not intend to read its full contents, for they are not all relevant, but there is a very important passage which I propose to read:It is felt that future redundancy in the mines must be accepted but there should be a greatly improved intake by industry to absorb this redundancy and this should not in any way be met by migration from the area.It goes on:All the Authorities in North-West Durham will be affected by the reduction in coal production and the complete closure of a coal mine can subsequently affect the employment 81 position much more quickly than other industries can provide jobs. It is too late to wait until the mines are closed before action is taken.This morning, as I was travelling from my home town to Newcastle railway station, some miners boarded the bus and began to talk. I will not attempt to speak in their dialect or to use the terms which they used. I will simply say that one said to the other, "I hear that 169 men are to finish at our pit." Incidentally, this pit was scheduled as a receiving pit only a few months ago. "Aye", the other said, "an' if things gan on we'll aal be finished." I am not of the same opinion, but that gives some idea of what is in the minds of the men in Durham. There is apprehension. I hope that it is misapprehension.
§ Mr. Stones
I had hoped that the hon. Member had met so many Durham miners in the Army that he would be able to understand. It simply meant that if something was not done about the mining industry they would all be flushed at the colliery. That is all.
Instead of a call for more coal, we are told that the National Coal Board had to take deliberate measures to contract output. This is a euphemistic way of saying that it had to close the pits. It is very simple. We are producing more coal than we have demand for coal. Falling demand at home and abroad, coupled with increased output, have achieved a complete reversal of the situation, with the result that we are having to close mines and reduce our manpower.
I do not wish to take on myself the mantle of a prophet, especially a prophet of woe, but already competent people are predicting heavy reductions in manpower, greater than are expected, next year. I am not blaming, nor do I think we can blame, the National Coal Board for the measures taken to contract the industry and to curtail output. This includes the closure of pits. We must face the facts. Indeed, I believe that Sir. James Bowman and his colleagues of the National Coal Board, in consultation with the National Union of Mineworkers, have cushioned what could have been a great impact on the mining communities. I am sure that this will continue, in so far as it is humanly possible.
82 I believe that the Government must take a share in the blame for the changed circumstances. I realise that hon. Members opposite will strenuously deny this, but I sincerely believe that the Government are largely responsible. I believe there to be no doubt that the fall in the demand for coal in the home market resulted from the measures taken by the Government, which deliberately brought about a recession in industry. Over the ten years before 1957 the inland consumption rose by 30 million tons, an average of 3 millions tons a year. In 1957 consumption fell by 5 million tons.
It is admitted that the climatic conditions could have played a part. They do play a great part. In addition, there has been greater efficiency in the use of coal in industry, as I know the hon. Member for Kidderminster (Mr. Nabarro) will agree. Nevertheless, it is a fact that stagnation played a considerable part. In 1956, the iron and steel, engineering and other industries consumed 5.8 million tons of coal more than in 1958. My hon. Friend the Member for Newton said that there had been a reduction by 20 million tons on the 1958 figures. I have different figures, but I am not prepared to contradict my hon. Friend.
I am not so much concerned, however, with the past as with the future. So are the people in my constituency. Indeed, the whole of the county is concerned about the future. This is one of our major concerns. The ever-growing use of oil is seriously affecting our traditional trade. A greater part of the production of the Durham Division goes to coke and gas making. We have always been noted for the great qualities of our coal in this respect. If the present trend is allowed to continue—more oil, less coal—there is no doubt that Durham will feel the draught. The noble Lord the Member for Berwick-upon-Tweed talked about the manpower in Durham. Since 1947, the manpower in our mining industry has dropped by between 14,000 and 15,000, and, according to the figures in the "Revised Plan for Coal", we can expect a reduction of another 15,000 by 1965. I agree that there has been no abrupt displacement of the men. Natural wastage and curtailment of recruitment have let us down lightly. Nevertheless, we have that many fewer jobs in Durham.
83 A fortnight ago, my right hon. Friend the Member for Llanelly (Mr. J. Griffiths) told the House that, between 1951 and 1957, 19,000 people had left the north of England to come south. That means less manpower. They have moved into areas which are more profitable for industries.
§ Viscount Lambton
The hon. Member referred to me. He may not have heard what I said, and I can put it to him in the shape of a question. Does he not think that it would be better to offer miners the choice of alternative, economic, above-ground employment than to keep them uneconomically employed below ground?
§ Mr. Stones
If the hon. Member exercises a little patience, I have a reply to make to that question which he has put directly to me and which he put as a suggestion in his speech.
In the same debate, my hon. Friend the Member for Chester-le-Street (Mr. Pentland) told the House that, in Durham, unemployment had increased by over 27 per cent. between September, 1958, and September, 1959.
§ Mr. Stones
Oil has been replacing coal in the electricity and gas industries and in other fuel-burning installations. A number of pits in Durham have been closed, some completely and others partly. This will be a major disaster for our country. Many years of effort, time and money have gone into building our county. We experienced the years of depression between the wars, and we have been told that they will not happen again. We must see that they do not happen again. Prevention is better than cure.
Those of us having the interests of the mining community at heart make no bones about it. We shall not spare ourselves in an effort to ensure that never again will villages and communities become derelict as a result of pit closures. We know that there is no point in trying to stem the tide of progress. In 84 any case, our efforts, like those of Canute, would be futile. Nuclear energy, oil and natural gases will play an increasingly greater part in our industries and homes, but the rate of increase should be regulated by a pre-determined plan. It is foolish to set the sky as the limit in the use of alternative fuels if such a policy will throw thousands of miners out of work in a short time.
I come now to the point made by the noble Lord about offering alternative employment. If by some miraculous action we could guarantee a constant and adequate supply of all our fuel requirements, if at the same time we could place all miners in other jobs and if our economy was never to suffer, either in the immediate or the distant future, I would say "close the pits". I would think that to be a no more hard or hazardous or unpleasant task than mining is even in the improved conditions of the mining industry today. All hon. Members will agree that the age of miracles has passed. I am afraid that no such guarantee can be given. Consequently, we must press on with the mining industry.
Although I am not too pessimistic about the mining industry in general, I am apprehensive about Durham. This country will need coal for many years, and the mining industry will continue to play its part. If the present trend continues, Durham will probably suffer more than any other division. My hon. Friend the Member for Newton made that point and referred to liquid methane. I read a report in Lloyd's List & Shipping Gazette, on 30th June, that negotiations were taking place between a Japanese shipbuilding firm and Constock International Methane Limited, an American firm, for a contract to build two methane-carrying ships of 30.000 tons each. There were Japanese engineers in this country studying the design and construction of "Methane Pioneer," a former liberty ship of just over 5,000 tons which has brought five cargoes of liquid methane to this country. They were studying the construction of that ship for reference in the designing of the new ships which, according to the report, are scheduled to be built in 1961. If the negotiations are successful, Constock International Methane Limited and another American firm will have those ships built in the 85 expectation of them being chartered by the British Gas Council. Why should we have ships built abroad to carry methane to this country when employees in the shipbuilding industry are idle?
As my hon. Friends have advocated repeatedly, there should be a plan to regulate the consumption and supply of the various forms of fuel. Hon. Members opposite say that such a plan may impose physical and financial controls. Such talk raised the ire of hon. Members opposite. Had the pits still been in private ownership hon. Members opposite would have clamoured for protective measures. In any case, the logical result of a free-for-all economy advocated by hon. Members opposite would be that everything that could be brought from abroad more cheaply than could be produced in this country would be bought from abroad. Hon. Members opposite do not make any effort to show us how such produce can be brought from abroad and paid for abroad if we cease to mine coal.
§ Mr. Stones
It is wrong to be buying fuel abroad if our own resources can provide the necessary fuels for heat and power. It may be that oil firing is easier and cleaner than coal in present coal-burning installations. Some doubts have been expressed about the economics, and I am glad that the right hon. Gentleman referred to this. I am told by experts that the newer coal-burning installations with specially prepared fuels can be just as clean and easy to operate. If that is right, there is no real reason why we should be turning more and more to oil, especially if these other installations compare favourably in other respects.
I wish to pay tribute to that band of men at Stoke Orchard who are so very enthusiastically carrying on this research with limited resources It is easy to talk in high falutin terms of freedom and the right of coal consumers to buy in the cheapest market. It is natural for consumers to want to do that. However, many considerations have to be balanced. It is sometimes very bad policy, as some business men opposite will agree, to jump at the immediate benefit. If our mines were to be closed and our manpower to be thrown out of work with 86 no alternative employment, the cost to the nation in unemployment benefit alone would be staggering.
There is general agreement that some contraction of the industry is inevitable, but it should be governed and regulated in order to avoid disastrous unemployment and other evils likely to follow in its wake. The Government should consult representatives of nationalised and other industries to persuade them to use a larger amount of fuel. The consumption of coal, oil, gas, electricity, hydroelectric power and atomic energy should be co-ordinated. This would produce results much better than the bargain prices which have been suggested from time to time. When people talk about prices in that way, they must think of coal in the same terms as ladies' hats, which change with fashion. The coal lying on the ground is there as a result of the blood and sweat of miners. It cannot be given away. I have a shrewd suspicion that a number of articles which we buy at reduced prices in bargain sales are even then being sold at a greater price than the cost of production. Goodness knows how much those stocks are sold at, but we cannot sell this coal at a less price.
As miners, we do not expect all other sections of industry to accept sanctions to safeguard ourselves alone, but we are entitled to press for a policy that is in the interests of the country's economic well-being. The miners have asked for financial help to cover these stocks. It is true that this Bill gives some financial help, but other costs arise in meeting redundancy payments, the cost of moving, etc. The miners are reasonable in asking for financial help for that.
Nobody would disagree with the idea of providing alternative industries in the affected areas. I would only emphasise the fact that, if the industry's manpower is to be cut, the Government must accept the responsibility for providing alternative employment. The Local Employment Bill gives certain powers in this respect, and those powers should be applied to the coal industry.
There must be no question of mass migration. I have already given the migration figures for County Durham The noble Lord the Member for Dorset, South (Viscount Hinchingbrooke)—I am 87 sorry not to see him in his place—suggested a fortnight ago that, with motoring as it is, there would be no difficulty in men travelling twenty or thirty miles to another job. Well, there are many thousands of cars and there are millions of workers—and not every worker has a car.
Has the noble Lord, or any other hon. Gentleman opposite, ever appreciated that a twenty-mile or thirty-mile bus journey to and from work adds two and sometimes even three hours to the working day of the ordinary worker? It has been suggested that there is to be a greater cut in opencast production, and I hope that this and arrangements for the payment of compensation and the like will be proceeded with as quickly as possible.
There is nothing wrong in asking for the re-examination of our atomic energy plans. I understand that the atomic energy now being provided costs much more than energy provided by alternative means. We also ask for a reduction in the use of oil in electricity undertakings. We were told by the former Paymaster-General, now the President of the Board of Trade, that there is no saving shown by the use of oil in those undertakings, and I hope that the Government will bear that in mind.
We ask, too, for increased use of coal in the gas industry, and that means restricting the importation of liquid methane. The millions of pounds that have been spent on the building of methane-carrying ships and shore installations would have been better spent on financial inducements to fuel users to install the newer coal-burning appliances.
I return to the subject of migration. We do not want to see greater concentrations of industry. We must recognise that to take people from their mining villages and put them in the great industrial cities at once creates housing difficulties. Again, we are all concerned about traffic problems. If we concentrate industry still further, then, with more and more heavy lorries centred there and more and more cars taking people to and from their work, the traffic problem will be greatly aggravated. If there is to be unemployment in the mining areas, work must be provided where the labour is available
88 I should like to conclude by asking the Government one or two questions. First, having regard to their policy of free consumer choice, at what point do they intend to stop making our economy dependent on imported fuel? Is it not likely that their fuel and power policy will result in lost mining capacity and manpower which, in certain international circumstances, could ruin our whole economy? Is it not a fact that the nation is being weakened strategically by the Government's present policy? The Government have a great responsibility to the coal industry, and I ask them not to cast away the substance for the shadow.
§ 6.15 p.m.
§ Colonel C. G. Lancaster (South Fylde)
On my part, I hope I shall not be considered patronising if I congratulate my right hon. Friend and the hon. Member for Newton (Mr. Lee) on their maiden speeches in their respective rôles. It is true that they were rather lengthy maiden speeches, but they had to cover a very wide and complicated subject. I want to limit myself to the two matters which are the subject of the requirements that we are now considering.
Nobody on this side any more than on the other side of the House would wish to withhold from the Government the money for which they now ask, but we are entitled to look critically at the two reasons for this additional borrowing and, as far as we can, to offer some suggestions.
First, there is the matter of stocks. I would like to go back a little, because the background is not altogether a healthy one. There was a stage about three years ago when we were mining coal very wastefully by producing a plethora of smalls, partly as a result of shot firing getting almost out of control and by a lowering of pit discipline. We were also using a number of power loaders of a particularly wasteful type. There was degradation at innumerable points, both underground and on the surface, which all contributed to an imbalance in production and formed some of the background to these very heavy stocks of industrial smalls which we are carrying at the present moment.
Moreover, the National Coal Board was a little slow in anticipating the recession that was coming along in the coal 89 industry, not only here but throughout Europe. From the aspect of additional stocks of smalls, we started from a very unsatisfactory background. From then onwards, of course, nothing could be done. I agree wholeheartedly that it would have been altogether wrong had we thrown more men out of employment by closing down more pits rather than, for a period anyhow, enduring this very wide stocking programme.
Why I have never been altogether happy about this stocking programme is that I think that, in spite of the very reasonable financial allowances for putting the coal down and picking it up and some losses from degradation—and, of course, its financing—despite those allowances, which I believe my right hon. Friend put at 20s. per ton per year, to be followed by an additional 4s. a year, when we come to pick up this stock we shall find the losses to be considerable. The calorific value of the coal due to chemical processes will have depreciated in many cases, and we would be wise to write down the value of these new stocks steadily, otherwise we shall wake up one morning to find ourselves faced with a very large book loss which will take a good deal of explaining away.
Having said that, I very much hope that my right hon. Friend is right when he says that we are coming to the end of this stocking programme, and can look forward to some small diminution over a period of years. I would not be altogether sanguine at the fact that, because industrialists and users say that they will take a certain tonnage of coal, that is necessarily what they will, in fact, take. It would be a very unwise user who put his requirements low. That would militate against his own interests. The tendency naturally is to put the figure fairly high. To that extent, I think my right hon. Friend would be wise to form his own reservations about what may be required.
There has been a tendency this afternoon to ignore the two ways in which some improvement in the stocking position can be brought about. I agree that we cannot take this stock in isolation and price it down, nor can we in great measure bring in a level of prices throughout the whole range of coal appreciably lower than the present one. Nevertheless, if that could be done to 90 any reasonable extent, we must not ignore the competitive benefit which thereby would accrue.
For very many years, I was on the Coal Utilisation Council. The Council's main task was to ensure that coal was preferred, wherever possible, to oil. In those days, the difference between the value of the two fuels was considerable. Oil was about three times as expensive as coal, but it was borne in on me that, within measure, an industrialist will take his power requirements so far as he can from the cheapest market. If we can bring about a reasonable cheapening of coal, I am not unhopeful about its future. I believe that it can in many cases compete with oil.
As the hon. Member for Consett (Mr. Stones) said, with the new developments in the methods of coal firing, coal can be handled very cleanly without great manpower requirements, and coal can be definitely a competitive fuel with oil. However, I do not believe that it is at its present level. The National Coal Board, together with my right hon. Friend, will have to consider whether it would not be wise in the long run to bring the price down competitively with alternative fuels.
§ Mr. B. Taylor
We all know the hon. and gallant Member's specialised knowledge of the industry. I agree with his argument about the production of small coal, not only since nationalisation but during the war. Is it not the case that the National Coal Board was urged to do this because the Government wanted every possible ton of coal which they could get to meet the national requirements? It was a question of scraping the barrel. The Coal Board is not to blame for the large percentage of small coal during the period to which the hon. and gallant Gentleman refers. It was a question of Government policy—"Let us have more and more production. It does not matter about the size or even the quality."
§ Colonel Lancaster
If the demand is for coal at any cost and in any quantity, I know that it is very easy to be somewhat lax in one's methods and, as a result, to produce a larger proportion of fines and small coal. It is not, however, altogether a wise thing to do. Even when coal was required in large amounts, there was still a demand for large coal. 91 We reached a position where there was a definite shortage of round coal, both for use in this country and for our export trade.
I should like to say one thing about the export trade. I know that this is a very difficult problem. I know, as has been said, that the Polish coalfields are prepared at any moment to dump large quantities of coal, and I know that the six countries have their own problems about the stocking of coal at the pitheads and elsewhere, but there are our old traditional markets in the Mediterranean and South America, to which, I hope, before long we shall return. It may possibly take the form of a process of buying ourselves back into those markets, but it is absolutely essential that we should resume our export trade on a reasonably massive scale. It is the only means by which we shall get rid of stocks in any great degree, and by which this industry will substantially contribute to our export trade. As so many of my hon. Friends have wished to do, I urge my right hon. Friend, as was urged on his predecessor the Paymaster-General, that every effort should be made to do everything possible, at whatever cost, to get back into the export market.
I should now like to deal with the "Revised Plan for Coal". I should like to revert to the first plan, the "Plan for Coal," in 1950, which, I think, was rather unreasonably criticised in later years. In fact, it was a first effort. There was no background on which to form the basis on which the plan was eventually formulated. It was, on the whole, a good plan. It fell down because the scheme for the organisation of the coal industry which the right hon. Member for Easington (Mr. Shinwell) and Sir Arthur Street adopted made it inevitable that the very men who should have been responsible for the schemes of reconstruction and development were removed from the pits and from the areas and found themselves at divisional and national level. As a result, there was a hiatus of schemes coming forward. The first "Plan for Coal" lived pretty well on the fat of the past, and very little original development in those first four or five years was forthcoming. The tragedy was that whereas within two or three years it was evident that the plan had failed, or at least was 92 falling down, despite the requests which we made time and again to the then Minister, nothing was done to scrap the plan and to get on with the next one.
In 1955, we had the second plan, "Investing in Coal", which had the advantage of both the experience gained from the first plan and, by then, of an industry which had time to organise itself properly. Despite that, the second plan was little more successful than the first. Admittedly, it suffered from the recommendation of the Fleck Committee, which, in effect, made a very rigid condition rather more rigid and less flexible. Nevertheless, by February, 1958, it was evident that the second plan was as far behind at that moment as the first plan had been at a similar date.
In the proceedings of the Select Committee upstairs, I put that very question to representatives of the National Coal Board. I asked whether it was not a fact that at that moment "Investing in Coal" had fallen down as completely as the first. The answer was very strange. I was told: yes, perhaps it had, but the Coal Board was confident that by 1960 it would have recovered and would be in the position which the plan envisaged. That was, of course, complete nonsense. There was not the remotest chance of recovery at that moment, and I was glad to see that that plan, in turn, was scrapped.
We now have what is called the "Revised Plan for Coal". We wish it well. We hope that it has a happier and more successful time than the two previous plans. Of course, it is in many ways a very drastic plan. It involves closing many pits and putting out of work many men, but we recognise that to be inevitable, and no one can complain of the Coal Board in that direction.
What seems to be the essential at this stage is that this last plan for coal should be carried out in circumstances that were referred to by my right hon. Friend the Leader of the House in his speech on the Address, the implications of which I am sure have not been lost on my right hon. Friend.
§ 6.30 p.m.
§ Mr. Thomas Swain (Derbyshire, North-East)
In rising to address the House for the first time, I trust that right hon. 93 and hon. Members on both sides will accord me the indulgence which is customary when a new Member makes his maiden speech.
Nine weeks ago I was working at the point of production, at the coal face. It is a unique experience for me to come direct from the coal face to the House of Commons. I am very pleased to have the honour of following the hon. and gallant Member for South Fylde (Colonel Lancaster) in the debate. It proves beyond doubt that democracy works sometimes, because the pageboy is following the baron.
As my friend Mr. Harry White, my predecessor in the North-East Derbyshire constituency, would say, "In making your maiden speech you should be very short and non-controversial." Mr. White told me only yesterday that the art of making a maiden speech is to get up, speak up and shut up; and I will do that.
I represent mainly a heavy industrial constituency. There are 54 opencast sites—something which we in North-East Derbyshire consider to be a sin not only against tie landscape, but against the mining industry as a whole. You will notice, Mr. Speaker, that I mentioned the opencast sites first. I do so because when I used to go to Sunday school treats we were always made to eat the bread and margarine first and keep the cake till last. There are also 14 deep mines in my constituency, mining, on an average, 140,000 tons of coal per week, so it will be seen that the ramifications of the mining industry play a great part in the lives of the people in my constituency.
We also have on the west side of Derbyshire a large acreage of some of the most beautiful scenery in the whole of the British Isles, namely, the Ashover area, which was well renowned years ago for its lead production. On the north side we have an area which is at the moment catering for the Sheffield overspill. As one hon. Member opposite foolishly remarked in an article in the local Press during the weekend—I imagine that all new Members of Parliament are supposed to write an article for the local Press—he could not understand why people in Hackenthorpe and Gleadless, although living in Derbyshire and working in Sheffield, were having to pay 94 rates in Derbyshire and not in Sheffield. According to the hon. Member who wrote that article, I should, presumably, be paying my rates in Westminster and not in Staveley, where I live.
In the coal debate in July, 1958, the hon. Gentleman who was then the Parliamentary Secretary to the Ministry of Fuel and Power, and who is not now a Member of the House—for which the whole mining industry thanks the electors of Oldham, East—said that the future of the whole British mining industry depended on the health of the coal industry. He also said that stocks of coal wouldvanish very quickly as soon as the industry revives, as indeed it will."—[OFFICIAL REPORT, 14th July, 1958; Vol. 591, c. 836.]I suggest that the hon. Gentleman was either a bad prophet or a bad Parliamentary Secretary to a bad Minister of Fuel and Power. I say that with respect to all Members present.
I intend to make a short speech, but, as everyone will understand, it is a dickens of a job making a non-controversial speech in a coal debate when one has come straight from the coal pit. If I were to make a non-controversial speech today, it would be the first that I had made in my life. Let us consider the stocks of coal in my own area, about which I know most. I do not intend to bore the House with figures, but I suggest that the figures relating to my area are very significant, particularly if they are representative of figures for the whole country.
In the No. 1 area of the East Midlands Coal Board, which embraces nearly all of my division, last year, in the 43 weeks ended 23rd October, we mined in saleable coal 6,293,798 tons, of which we stocked 124,435 tons. In the 43 weeks ended 21st October, 1959, we mined 6,486,032 tons, of which we stocked 453,014 tons. It will, therefore, be seen that the harder we worked at the coal face the more coal was being stocked on the ground. In consequence, we in the North Derbyshire area, a highly productive and profitable area, were in danger of working ourselves out of a job. This is a very significant point which has not been catered for in the "Revised Plan for Coal."
I, as a new Member of the House, have no more faith in the new plan for 95 coal than I had in the old one. I say with all respect that there is as much difference between the figures in the different plans that we have had as there is between Jayne Mansfield's figure and my own. We in the mining industry have not a good deal of faith in the new plan. The reason is that this plan caters for specific targets. In the first ten months of 1958 the output per man-shift was 29.9 cwt. and it has increased to 32.3 cwt. in the corresponding period this year.
Therefore, assuming that all things are equal in the industry, that we are breaking even with no profit and no loss, if the targets are fixed, as they inevitably will be once the industry has reorganised itself, we shall be mining the quantity of coal that this country requires with 450,000 men instead of the 750,000 who were employed not very long ago. When the House realises that in 1913, which is within the living memory of many of us in this Chamber, there were 1,300,000 men in the mining industry, and that today we are catering for about 500,000 under a new plan for coal, we can see the social problems which have been and will be created in the mining areas, especially in those areas which have had to bear the brunt of the troubles of the boom and slump economy of the Governments of the day.
We have increased our square yards of stocking ground in No. 1 area over the past ten months by 164,289, which means the stocking of coal on the basis of 2 tons per sq. yd. No more can be put on because of the fire hazard which is always present when stocking indigenous fuel. Good agricultural ground has been sterilised by the stocking of coal in No. 1 area. If we multiply that six times in the East Midland division—and I do not know how many times for the rest of the country—we find that this is not only a problem for the Minister of Power but a problem for the Minister of Agriculture, Fisheries and Food as well. These are points which have not been brought out in the debate too vividly today.
At the moment, 50 per cent. of the coal in my area is mined by mechanisation and we are reaching the output per man-shift which I have already quoted. The aims and objects of the Coal Board, 96 quite rightly, are that in the not too distant future 70 per cent. of the coal should be mined by mechanisation, which, inevitably, means that the output per manshift will grow and that the cost per ton will be reduced and the No. 1 area will be producing coal and having to stock it and dissipate its profits in the process of stocking.
These are the problems which are worrying the men who work in and around the pits in my area. We welcome mechanisation in the industry for the obvious reason that the pick and the shovel are the most soul-destroying instruments ever invented by the mind of man. The sooner we are able to mine every ton of coal without the pick and shovel the better it will be for everyone in the industry. Therefore, along with everyone else, I welcome mechanisation as fast as the Coal Board can give it to us.
In this very highly productive No. I area during the past ten months—a very significant period—there have been five transfer schemes. The Coal Board has adopted the Parliamentary word "transfer" instead of "redundancy"—the transfer of some of the men to other pits and some of them on to the dole. About 400 men have been involved in the transfer from one pit to another and in the not too distant future the receiving pits will have reached the point of saturation.
Consequently, it will be in the hands of the production people at area and divisional level, and perhaps down to sub-area level, to see that in the event of getting a cross-sectional displacement in a particular seam production by mechanical means will become impossible and production by hand will become economical. The men working in that particular section of the pit, although it had a very high O.M.S. and high profit, will be redundant and have to be transferred elsewhere.
The question in the minds of the men in my area is, where will they go when that point of saturation is reached? Will the Coal Board or the local authorities be able to provide housing and accommodation for their families wherever they go and, if not, what is to become of them? It is a paramount problem and one which I hope will be faced very seriously not only by the Coal Board, but by the 97 local authorities and the Government, in turn, and that some answers will be forthcoming in the not too distant future.
Turning to the Bill, I consider, first—and this is where I may slip into die shallow waters of controversy—that the Bill is foolish. I say that with all due respect to every Member in the House. In my opinion, it is foolish for this reason. By lending this money to the Coal Board we are only increasing the heavy financial burden which this industry is having to bear and has had to bear since 1947. I feel that some relief should be given to the industry so that the burden will not be increased and the industry will be able to carry it more easily than it has done in the past.
I also consider that the Bill is vindictive in the sense that each time a Bill like this comes before the House, the effect of the publication of the Bill is to turn non-thinking people who have been prejudiced against the miners for some considerable time even more in their disfavour than they have been in the past. We in this industry believe that it is a preconceived plan of hon. Members opposite to bring discredit on this great industry of ours.
I have two suggestions to make. Before I do so, however, I should like to say that this industry has borne some very heavy burdens in the past. The Government should take over responsibility from the Coal Board for the money it is still having to pay to the coal owners as compensation for a bankrupt industry and also take over from the Coal Board the burden of the compensation which it is having to pay to the local authorities and property owners under the Coal Mining (Subsidence) Compensation Act. I think that the Government would, in that way, he taking a practical step in helping to revive the industry of which we are all so proud.
Another great burden which the industry is having to face and has had to face has not been brought to the notice of the general public. That is the burden brought about by the implementation of the 1954 regulations which I say, as a recently working miner, were long overdue. The pits got into such a state up to 1947 that it was inevitable that new regulations had to be compiled and put on the Statute Book to make the industry more safe for the men working 98 in it. We in the mining industry welcomed with open arms the implementations of the 1954 regulations, in the preparation of which many of my colleagues, with practical experience, played a great part. The implementation of these regulations places on the shoulders of the Coal Board a very heavy burden indeed.
If we get automation or overproduction in any industry the answer is shorter hours for the people employed in it. Some time ago, we were negotiating with the Coal Board in London with a view to having a 7-hour day in the industry. Incidentally, when I started working in the pits—I am only 48 now—we had a 7-hour day, until the powers that be took it away from us in 1926. All we ask for now is the reintroduction of that condition which applied at that particular time, namely, a 7-hour working day.
We have another suggestion as an answer to over-production which, again, would involve no breach of faith with the industry. It would, indeed, be no more than repayment of a debt which the nation owes to the miners after the fifteen years during which mining has been the foundation stone of our economy. We suggest that the miners and working men in the industry should have three weeks' holiday with pay.
I think that the suggestions I have made have been practical and I thank right hon. and hon. Members for listening so patiently to what has been, perhaps, not a non-controversial speech from a maiden speaker.
§ 6.51 p.m.
§ Mr. Gordon Matthews (Meriden)
As a new Member myself from another mining constituency, I regard it as a privilege to be able to congratulate the hon. Member for Derbyshire, North-East (Mr. Swain) on a fighting speech, delivered with great confidence. I hope that in my speech, which is not intended to be so controversial as his, I shall be given the same indulgence by right hon. and hon. Members opposite as we on this side gave to him.
In my constituency, in and around the district of Polesworth, there is very strong feeling on the subject of opencast mining. I should be the first to welcome the discontinuance of opencast mining within the next five years. The question will then arise: what are we to do with the redundant workers and the expensive 99 equipment which they have accumulated during the last few years?
The opencast mining industry has amassed a vast wealth of experience in removing vast quantities of rock and soil, in restoring excavations and in landscaping operations. It seems to me that it is in the national interest that we should utilise this experience and also the expensive equipment which has been accumulated. There is here an unparalleled opportunity to counteract or to reinstate the dreadful devastation which has occurred in large areas of our countryside during the last century or so of industrial development, to make these areas more attractive to live in and to work in, and to render them attractive to the new industries which we all constantly hope will be set up in some of them.
In other words, cannot the skill and equipment now available to the opencast mining industry be used to rid the country of some of the depressing features of the environment in which our miners have to live? We have the chance to reclaim huge areas of slag heaps, disused quarries, gravel pits, abandoned mines and dumps, stagnant watercourses and pools, and, incidentally, in other parts of the country, disused airfields as well.
At present, as we all know, large areas of our land are unusable, unsightly and unhealthy. Can we not replace a great deal of the land which is being lost to agriculture? Much valuable land is being lost through necessary urban development, through the building of large motorways which take many acres, and through the construction of power stations. Cannot a great deal of this valuable agricultural land be replaced by removing the topsoil from the sites of roads, power stations and other such constructions and using it to make a fertile surface for the reclaimed areas in some of our mining districts?
We are, in considering the Bill, concerned with cost. The cost of a scheme such as I suggest would be too large, of course, for the local authorities to bear, but it would be easily carried by the national economy. The subsequent appreciation in the value of the land reclaimed would, in the years to come, make the scheme self-supporting.
100 We have a ready-made organisation to administer such a scheme, namely, the Opencast Division of the National Coal Board. It seems to me that a scheme of this kind would be of immense benefit to the nation. It would rid us of areas which are a disgrace to our national heritage, and it would provide useful building or agricultural land and also land for recreational use. Moreover, it would help to obviate the problem of unemployment among opencast mine workers.
§ 6.55 p.m.
§ Mr. Woodrow Wyatt (Bosworth)
I find it a little strange to be congratulating two maiden speakers, my hon. Friend the Member for Derbyshire, North-East (Mr. Swain) and the hon. Member for Meriden (Mr. Matthews), after having been away from the House for so long myself, but I should like to say how impressed I was by the very thoughtful and carefully worked out speech of the hon. Member for Meriden and how very much I and, I think, everyone in the House, enjoyed the speech of my hon. Friend the Member for Derbyshire, North-East, a speech which was full of humour and knowledge, robustly and pungently delivered. I am sure that further contributions from both the speakers we have just heard will be awaited with considerable interest.
My stimulus to speak in this debate is that I now represent a constituency in which there are between 8,000 and 10,000 miners. If it were not for those 8,000 to 10,000 miners, I should not be here this evening. This debate, however, has more than just an interest for the miners in my constituency or in other constituencies in the country, because the subject we are discussing is a national matter. It is more than a matter of concern to people representing mining interests of one sort or another.
I have been staggered by the irresponsibility of the Government over the whole subject of fuel. I suppose that I should not have been staggered, but I have been away for four and half years and I had forgotten how complacent and indifferent they were to any sort of planning. The Government do not want a fuel policy. They do not want to stop the inflow of imported oil to this country. They are quite willing to let the whole thing be 101 settled by the free choice of the consumer, without giving any guidance at all. They are prepared to see 300 years' supply of coal wasted and, to some extent, lost because they think everything will work itself out somehow.
The Government are blinded by a smattering of science which they do not understand and by the propaganda of the oil companies. They believe that they can more safely rely on the miracle of nuclear energy and cheap supplies of oil than on the vast quantities of natural carbon deposits below our feet. They are really like a gathering of monkeys sitting on a heap of coconuts who decide to import coconut oil because they cannot be bothered to open their own coconuts. The theory is that, as oil and nuclear energy are new. and as the coal industry is old, we can abandon She old and apply ourselves to the new. This is rather like deciding to give up drinking milk because somebody has invented Coco-Cola.
How safe will it be to reduce our coal production? At the Second International Conference on Atomic Energy at Geneva last year, it was agreed that, by 1970, atomic energy would supply less than 1 per cent. of the world's power needs, only a fraction of the world's requirements and our own. It may be thirty years before atomic energy can be relied upon to provide any substantial load of power. Meanwhile, oil is running out fast. This is something which the oil companies do not tell potential customers when they are buying oil-burning appliances.
The consumption of oil in the world is going up by 7 per cent. a year. In ten years, we shall be using double the amount of oil we use today. In twenty years, the world will be using four times the amount of oil it uses today. That may be an underestimate of the increased rate of consumption of oil year by year. At the moment, in South-East Asia, people are using 5 gallons of oil per head of the population per year. In China they are using only I gallon per head of the population per year. In Britain, on the other hand, we use 122 gallons of oil per head per year and in America the figure is 600 gallons. It is very unlikely that this tremendous disparity between ourselves and the underdeveloped countries in the use of oil will continue much longer In twenty 102 years, there will almost certainly be a major oil crisis in the world.
The proved reserves today are only 40,000 million tons; and even the wildest estimates of future discoveries do not put the total amount of oil in the world at more than 200,000 million tons A good deal of that is in areas which it is extremely difficult to drill and exploit.
In twenty years' time, the oil companies will be down to about the last thirty years of their supply at the rate of consumption which will then have been reached in the world as a whole. If that rate of consumption increases beyond the next twenty years, it will be much less than thirty years' supply that they will have left. Several consequences will flow from that. The oil companies may reduce their exploitation of new fields because they will not be able to see the necessary return for their capital outlay in exploiting those new fields, and they will certainly have to charge a great deal more for the oil that they will then be producing. All those people who have now fallen for the oil companies' propaganda and have installed oil-burning equipment will be in serious difficulties.
Of the big three countries—Russia, America and Britain—we are the most vulnerable, because America and Russia have the largest internal deposits of oil and our supplies come mainly from the Middle East. Even in America, the situation is not very healthy, because the Americans regard themselves increasingly as major importers of oil. Even if the Government have not dislocated our oil supplies from the Middle East by another Suez adventure, the Middle East oil countries will be reluctant to go on supplying us with unlimited quantities of oil, because they and the other underdeveloped countries will want to use some of it themselves.
Even on the short-term view, however, is oil likely to continue to be cheap? As has been said during the debate today, the price structure of fuel oil is completely artificial. It depends entirely on a balance between the amount of petrol consumed in motor transport and the amount of the residual product which is then sold as fuel oil, because fuel oil is a joint product with petrol. At the moment, the motorist is quite unwittingly subsidising the destruction of our basic industry, coal.
§ Mr. Nabarro
Listening to the hon. Member's fallacious argument, one would imagine that there are only two products of crude oil—motor spirit, on the one hand, and fuel oil, on the other hand. Has he neglected to observe about thirty other petroleum products derived from crude oil, all of which must be equated with fuel oil and motor spirit to the original basic product?
§ Mr. Wyatt
I am glad to hear from the hon. Member for Kidderminster (Mr. Nabarro) that my argument is fallacious. That reassures me that it must have been right. Certainly, everybody knows that there are many other by-products, but the main by-product which the oil companies must get rid of is the fuel oil. Fuel oil prices are adjusted entirely on the ratio between petrol and the fuel oil which is left over after the petrol is produced. If this is not so, why should there be a vast surplus of fuel oil left in Germany following on the fact that a tax has been imposed on fuel oil and the rate of petrol production is now far too high to maintain the correct ratio between the production of petrol and fuel oil?
One needs only a small change in this ratio for the price of petrol or of fuel oil to have to go up. In fact, the very success of the oil companies in persuading more and more factories and people to install oil-burning equipment will eventually put up the price of fuel oil unless the number of motorists increases at the same pace, which is extremely unlikely.
We have the additional absurdity that we are spending £400 million a year on imported oil and, presumably, this must have some effect on our balance of payments. Yet when, a few years ago, the Coal Board, at the request of the Government, had to import a few million tons of coal, the Government behaved as though the whole economic structure of 104 the country was being destroyed. They face with considerable equanimity, however, the fact that we are spending £400 million a year on oil imports.
It is generally assumed that the demand for primary energy will go on increasing by about 2 per cent. a year, which is what it has been doing for the last hundred years. This figure is taken from the O.E.E.C. Report of May, 1956. That means that by 1975, we shall be using the equivalent of 390 million tons of coal a year.
When that report was prepared, it was felt that we could get about 40 million tons equivalent of energy from nuclear power stations, although everyone now agrees that this was a gross overestimate of what we are likely to be able to get from nuclear power stations by 1975. It was thought then that we would get 100 million tons from oil and coal imports and that the remaining 250 million tons would come from our own coal production. Do the Government now think that our primary energy needs will not continue to go up, as they have done for the last hundred years, by 2 per cent. a year? Otherwise, it is extraordinary that the Government now contemplate a coal production of only 200 million tons by 1965.
Everybody would agree that, without increased supplies of energy, our industry and our standard of living will stagnate and we certainly will not be able, as the party opposite has promised us, to double our standard of living in twenty-five years' time.
The O.E.E.C. estimate to which I have referred places much too great a dependence on imported oil for Britain in any event, but here we are embarking on a programme which does not allow for the expansion of coal production to 250 million tons by 1975. Incidentally, when the first coal plan was devised, that was originally thought to be about the right figure for 1965. This means a reduction from 250 million to about 200 million tons a year, yet today everybody accepts this lower figure as a matter of course, despite the fact that all the previous estimates have been based on the proposition of a 2 per cent. increase in the demand for primary energy every year, which would mean at least the supply of 250 million tons of coal a year by 1975.
105 We have a kind of love and hate relationship with the coal miner and the mines. The love part of the relationship says, "How awful it is for anybody to have to be a miner. How dreadful to be working down in the darkness all day long. We must stop mining if we can" All the miners whom I have met appear rather to enjoy it. This may be misguided of them, but a great many of them, apparently, enjoy the comradeship and like very much the sort of life they lead. I am not, of course, speaking against any of my hon. Friends who feel that mining is not as attractive as many other jobs.
The hate part of the theme says "After the war, the miners held us up to ransom for higher wages because we were short of coal. Now that we have cheap oil imports, we have got the miners by the throats, so let us close down what we call uneconomical pits and serve the miners jolly well right and put them in their place again." This is the sort of attitude which has been operating recently in Germany, where already 1,000 million tons of coal reserves have been lost for ever by the closing of mines which can never be opened again because they have become flooded. We have not done quite so badly here yet. All that we have done under our own "Revised Plan for Coal" is permanently to lose 100 million tons of our reserves, because the pits now being closed will never be able to be worked again because of flooding. This does not apply to all the pits being closed, but the amount of coal which is being permanently lost is about that figure.
It is argued that it is a good idea to close down uneconomic pits, to streamline the industry, to keep the cost of coal stable and even to reduce it. Obviously, there is something to be said for that argument. Under the new plan, we may even see an actual reduction in the price of coal. In the terms of the history of the nation, however, what is an uneconomic pit? Nobody really knows. Today, some of the best money spinners owned by the National Coal Board are pits that were closed twenty years ago by the then coal owners as being uneconomic. Therefore, what appears to be an uneconomic pit today may be a very economic pit in about twenty years' time.
106 In my view, what we want is a proper fuel policy. The Minister said today, "Oh, dear me. This is a difficult thing to decide, because I am told that so many different things are a fuel policy."
But it is really quite simple to devise a fuel policy and arrive at what it is. One decides it by deciding what figure of coal production it is unsafe for the country to go beneath and then ensuring that this production is achieved and maintained. It is about as simple as that The moment we contract our production below the normal exhaustion rate of our pits, we are losing reserves which can never be recovered for the nation as a whole because the pits may become unworkable. And once pits are closed, the mining community is dispersed, and we never get them back. People have lost their allegiance to the mines, have gone to new jobs, and do not want to go back. It is very much easier to stop a coal industry than to start one.
What I rather resent is the way in which throughout the debate so far Government speakers have spoken of the various things they have done as being a kind of humanitarian concession to the miners. A point at issue is the cessation and reduction of open-cast mining. The Government say, "Out of our kindness, we do not compel the National Coal Board to go on with opencast mining, because we do not want to displace miners in the deep mines." This is no kindness on the Government's part, but only common-sense. If we are reducing our production as much as the Government are doing, we shall never be able to step it up quickly when we want to if we have lost our opencast reserves by digging them up now. This is a practical common-sense policy, and has nothing to do with kindness to the miners, and let us not be hypocritical about it.
Having decided the figure of coal production needed year by year, how do we then see that it is maintained? I do not think it is difficult, if one tries. The trouble with the Government is that they have never tried. One of the things which we want to see is the co-ordination of the fuel activities of the main users, which has never been done, although I gathered from what the Minister said this afternoon that there may be a 107 Commitee which is to meet in a few months' time to consider how to co-ordinate the activities of our main users, who are, of course, the Gas Council, the Central Electricity Generating Board, the British Transport Commission and industry generally. This is the first thing to do, but there are some things which one ought not to do.
The first is that one should not allow power stations to go over to oil when it is neither cheaper nor more efficient than burning coal. In some ways, the burning of oil in power stations is a very bad thing to do, because it corrodes the furnaces in a way which coal does not. One should not pass a Clean Air Act giving automatic exemption to oil installations, but requiring manufacturers of coal-burning appliances to be dependent on the whims of innumerable local authority inspectors before they can get a certificate for the coal appliances. Naturally, they do not make them in large numbers until they know they can get a certificate. We should make plans for a high-pressure gas grid system for the whole of the industrial midlands. This is not a new idea, but it is one which has been canvassed for some time by Mr. Burns, chief engineer to the North Thames Gas Board, and has been taken up by Sir Harold Smith, the chairman of the Gas Council.
On a line between Manchester and London, within a thirty-five mile radius, are concentrated the most suitable coalfields for total gasification with very low production costs. If this were America and we had an enterprising Government, we would already have got a high-pressure gas grid system all over the country, but we have not, though it has been talked about with the Gas Council. If the Government were interested in a fuel policy, they would have done something about it long before now, because the cheapest way of getting fuel from coal is by turning it into gas at the source.
The next thing we should do is to make it clear that we are prepared to use the instrument of a fuel tax to protect the coal industry. The Government must make a statement about that, and say that if they feel that there is any danger at all about maintaining the present target for coal production, they will impose a fuel oil tax to see that the 108 balance is kept straight. As my hon. Friend the Member for Consett (Mr. Stones) said, the Government do not mind protecting other industries. As a matter of fact, they protect agriculture, the motor car industry; indeed, almost every other industry in the country is protected. The one industry which apparently is not to be protected is the coal industry, although it is our birthright, on which the power of Britain was originally based and which is now being squandered in accordance with the Government's philosophy.
Above all, the Government and the Coal Board must see to it that they now start using modern methods in selling their coal and in research into coal utilisation. It is a shocking thing that only now is the Coal Board beginning to recruit an adequate sales staff in trying to recover the years which they have lost to the propaganda of the oil companies, and sell the advantages on modern lines of all the various appliances, coal and so forth, on which the Coal Board depends, pointing out to the user the advantages of using coal. They have only just started recruiting an adequately qualified technical sales staff able to do it.
It was only on 5th October this year that the Coal Board began a national advertising campaign to point out the advantages of coal to big users of fuel, and that advertisement campaign is still on far too small a scale to make any impact against the inroads of the oil companies. This is really quite fantastic. After the Government had created the depression, which began about two years ago, the Coal Board have waited all this time before realising they no longer had a sellers' market, and had to do something about it.
On the point of research, the Coal Utilisation Research Association has a very small income of £430,000 a year, of which only £140,000 is provided by the Coal Board for research into new appliances, gasification plants and all the rest. I am told that if more money had been provided by the Coal Board or some other body to the Coal Utilisation Research Association it could by this time have developed an effective total gasification plant which could have been erected for a high-pressure gas grid system across the industrial belt of the Midlands down to London.
109 Nobody seems to know whose responsibility it is to spend money on research, and nobody seems to care. Mr. Wynn, the scientific member of the National Coal Board, has suggested that it is not the business of the Board to do research into the use of coal. The Electricity Board and the Gas Council have also stated that it is not their business. Whose business is it to provide adequate research facilities for our basic industry, which has a turnover of £900 million a year? On research on coal, only some £3 million is being spent all told as against the £8 million by the private oil companies.
No doubt, the Government would like to see the Coal Board fail. They think that that would prove that nationalisation does not work. In fact, the Board in many ways has done a magnificent job, with the aid of the miners and modern equipment, in producing coal which is rather cheaper when compared with the rest of Europe, in keeping down costs and developing as far as it can new coal-winning methods. But the Coal Board is fighting for its life. It should understand that it is right out in the open, attacked by business and not defended by the Government. Only the other day, a member of the Coal Board told me that until recently "commerce" was a dirty word at Hobart House. Well, it had better stop being a dirty word. The mining industry depends upon making itself efficient and a commercial success and it will not get much help from the Government. If it were a privately-owned industry, like the motor car industry, it would be getting the protection and stimulus of the Government that it needs if it is to thrive.
As things are, in a year or two's time, we shall doubtless be told that there is a re-revised plan for coal, that the target of 200 million tons a year cannot be reached, and that we are to put ourselves still more at the mercy of unreliable imported supplies of fuel, particularly as it has been disclosed this afternoon that it is very unlikely that the coal stocks we have got can be shifted very readily if the target for coal production is maintained at the same time.
In 1865 Mr. W. S. Jevons wrote a famous book called The Coal Question in which he wrote that it was—just possible that some sort of energy now unknown may be detected.110 He concluded that—if it happened, such a discovery would simply destroy our peculiar industrial supremacy.Since Mr. Jevons wrote his book, oil has been discovered, and this Government has acted to hasten the destruction of our peculiar industrial supremacy by allowing an unlimited flow of oil into this country, and heedlessly neglecting the preservation of our coal industry. Jevons also wrote in his book:With our coal, power must pass from us.In 1914 we produced 290 million tons of coal and exported 90 million tons of it, so much of our power has already passed from us. I do not think we can afford to lose any more. The party opposite used to pride itself—it no longer does—on being a patriotic party. Is it too late to urge right hon. and hon. Gentlemen opposite to drop their doctrinaire dislike of the coal miners and of nationalisation, and to step in to save the coal industry, because that is what is needed today. It is a rescue job that is required. This is not charity for the miners, it is for the benefit of the entire country.
§ 7.20 p.m.
§ Mr. Gerald Nabarro (Kidderminster)
My first duty, and a very pleasant one, is to congratulate most warmly a very old friend and political colleague, namely, my hon. Friend the Member for Meriden (Mr. Matthews), upon his outstanding maiden speech. I first met my hon. Friend in Birmingham, in 1945, at the end of the war, and we were close political colleagues in the Young Conservative movement in the six counties of the West Midlands throughout the period between 1945 and 1950. I was delighted to listen to him today, and I am sure hon. Members on both sides of the House will join with me when I say that we hope to hear him on diverse topics on many future occasions.
I will follow the pattern set by my right hon. Friend the Minister of Power and say a word or two in the first instance about the draft Statutory Instrument accompanying the Bill before the House. I hope this will be thought convenient for the Order is fundamental to this debate. My right hon. Friend will recall that, on 10th May, 1956, I was privileged to lead twenty-four other Conservative Members into the Lobby against the Government on the Coal 111 Industry Bill of that year. My reason for doing so was solely the accountability of the coal industry to Parliament, and it is instructive three years later to look at the terms of the Motion which I moved on that occasion and divided the House upon and which was seconded by Mr. Angus Maude, the then hon. Member for Ealing, South. I will quote the Amendment from the OFFICIAL REPORT:That this House, while welcoming any measure which would increase the economic production of coal, declines to give a Second Reading to a Bill which will extend the ability of the National Coal Board to borrow without adequate Parliamentary control, and which permits a large increase in public expenditure upon an undertaking which has made continual losses despite heavy capital investment." —[OFFICIAL REPORT, 10th May, 1956; Vol. 552, c. 1452.]I demanded in the course of my speech, supported from all quarters of the House, a Statutory Instrument once a year to enable this House to authorise the capital investment programme of the National Coal Board. As is so often the case, I did not receive everything for which I asked, but I did receive within a few weeks the assurance from my right hon. Friend, which has been carried into practice, that when the borrowings of the Board accumulatively exceeded by a sum of £75 million the borrowings in a preceding year, also judged accumulatively, a Statutory Instrument would be laid That is the Statutory Instrument we are debating today, and though I do not wish to dwell upon it at any length, I wish to draw the attention of my right hon. Friend to one aspect of the Explanatory Note on the Statutory Instrument for which I claim a certain paternalism.
§ Mr. Nabarro
I repeat that I claim a certain paternalism in connection with this document. [HON. MEMBERS: "No."] It was a poor joke anyway. The Explanatory Note reads:… to defray expenditure properly chargeable to capital account"—but my right hon. Friend did not adjudge that the borrowing powers under this Order are solely in respect of capital account. He confessed that they are largely for financing the huge increase in coal stocks. 112 I think, therefore, that when my hon. Friend winds up the debate he should draw a distinction and tell us how much of the increased borrowing powers we are sanctioning under the draft Statutory Instrument should properly be attributed to an increase in capital expenditure, and of that, how much is found from the National Coal Board's own resources, and the amount of the residual, which is for the purpose of financing the additional coal stocks. It is essential, from a financial point of view, that this should be fully explained before we pass the Second Reading of the Bill.
On the situation generally, there has been a remarkable transformation in the position of the coal industry since May, 1956, when twenty-four of my hon. Friends and myself divided the House against the Government. It is a remarkable transformation not only because of the total disappearance of the then massive coal imports, but also because of the large decline in the consumption of coal in Great Britain.
Hon. Members will recall that in 1956 we saw the end of a year when, for the first time in British history, the stupendous total of 12 million tons of coal had been brought to this country, mostly from North America, at a cost of no less than £80 million. That deranged our balance of payments. It so inflated North Atlantic freight rates as to have a widespread influence upon the cost of many other raw commodities including, notably, iron ore. Indeed, a first term of reference of the previous Minister of Power, now the Paymaster-General, was to eliminate coal imports. He did so singularly successfully, for coal imports ceased finally at the beginning of 1959, and the dreadful drain upon our balance of payments was thereby stopped.
Also between 1956 and 1959 a remarkable transformation occurred in the fuel-burning habits of the British nation. The political Rip van Winkle from Bosworth (Mr. Wyatt) has evidently been asleep for four and a half years and has entirely misconceived the purpose of the Clean Air Act, for it was passed through this House during his absence, and supported by as many of his hon. Friends as of mine from this side of the House.
§ Mr. Nabarro
There are plenty around ire now and many more supported me on that occasion. The hon. Gentleman evidently failed to perceive that one thing which has happened since 1956 is that there has been a dramatic increase in the efficiency with which fuel is burned in this country. He is approximately right in saying that 1,300,000 colliers in 1913 produced 292 million tons of coal, oat of which we exported 82 million tons of coal, and out of which we burned 210 million tons here at home, but we burned it about three times as wastefully as we do today. That was the reason for the profligate consumption of coal in those days.
Since 1956 there has been a dramatic increase in fuel efficiency which has contributed most largely to the declining consumption of coal here. I will quote figures which I have no doubt my right hon. Friend will readily confirm. In 1956, 218 million tons of coal were used for inland purposes in Great Britain. This year, according to Sir James Bowman, 196 million tons will be used, but Sir James is generally wrong in his arithmetic According to Nabarro it will be 191 million tons. I expect to be right on 31st December when the figures are looked at. [Laughter.] Yes, because I rely largely on my own acumen for a computation of the figures.
The point I am endeavouring to make is that in 1956 we consumed 218 million tons of coal, this year we shall consume 191 million tons of coal, so there has been a drop in consumption of 27 million tons of coal. This is due very largely to the great increase in efficiency with which fuel is burned in this country. It is due, secondly, to the inroads made by the electrification and dieselisation of our railway system. Thirdly, it is due to the onset of the nuclear energy programme. Fourthly, it is due to the fact that the competition from oil has been much more than dramatic; it has, in many instances torn the business for fuel sales from the National Coal Board, which so largely had a monopoly before, to oil in preference and as fuel oil is often much better suited to individual industrial and commercial requirements.
§ Mr. Nabarro
The hon. Gentleman uses the parrot-phrase "industrial stagnation". In fact, the level of industrial 114 production today is about 6 per cent. higher than last year, and last year it was about 2 per cent. higher than in 1956. Therefore, between 1956 and 1959 there has been an increase of about 8 per cent. in industrial production. The interesting thing is that the only industry which has not taken advantage of that increase is coal. [HON. MEMBERS: "Why?"] I respond happily to that question. The coal industry has become very unpopular with consumers. It has become unpopular because it has had a heritage over the last twelve years of supplying much poor quality material at a high price.
§ Mr. Slater
The hon. Member spoke of an increase of 6 per cent. in production. Does not he agree that it is not so much 6 per cent. for last year as 6 per cent. since 1954?
§ Mr. Nabarro
I would not agree with that at all. In any event, the general level of industrial production cannot be gauged as commensurate to an increase or otherwise in fuel consumption. It is impossible directly to relate the two. It depends entirely upon whether oil or coal is being applied to basic purposes and upon the efficiency to which that fuel is employed.
The hon. Member for Grimsby (Mr. Crosland)—I am delighted to see him in his place tonight—once sent me a copy of a book by a colleague of his, Professor D. M. Little. I would commend to the hon. Member for Sedgefield (Mr. Slater) and the hon. Member for Fife, West (Mr. W. Hamilton) that book by Professor Little, which precisely furnishes the answer which I am giving. If hon. Gentlemen will read the book, and, notably, the references in it, they will find that Professor Little refers at many points to my speeches and writings on this important topic of fuel efficiency and conservation.
The National Coal Board has steadily and progressively lost the goodwill of consumers during the last few years. The words which I wish to quote to the House now were written by an ex-senior civil servant of the Ministry of Fuel and Power, and they appeared in a well-known journal, Investors' Chronicle last Friday, 20th November. They exactly confirm the point I am endeavouring to 115 make to the House. These are the words:The Coal Board is reluctant to face the fact that it has lost the goodwill of millions of consumers of coal. It argues that it is merely a question of price, whereas it is much more than that. The goodwill has been lost because of the shabby treatment meted out to the coal consumer in the last ten years. This has been powerfully reinforced by changing habits and improved standards of cleanliness, which have made a dirty and unreliable commodity such as bituminous coal something to be avoided at all costs For instance, the domestic consumers in the area South of the line from Bristol to the Wash are taking less and less coal every year—because it does not fit in with their way of life and they are prepared to pay more for a fuel which is clean and reliable.Those words were written last Friday by Mr. Kelf-Cohen, formerly for many years, including the period of office of Socialist Ministers, the second civil servant at the Ministry of Fuel and Power, as it then was. I do not think he is a biassed judge in these matters.
§ Mr. Anthony Crosland (Grimsby)
I do not particularly wish to criticise Mr. Kelf-Cohen in the House, but six months ago he wrote a book on nationalisation which for bias can scarcely be exceeded by anything which might appear, in the eyes of the hon. Gentleman opposite, in the Daily Worker. He is notorious for extreme Right-wing bias.
§ Mr. Nabarro
That is a view which I should be happy to debate publicly with the hon. Gentleman. The book to which he is referring is "Nationalisation in Britain—the End of a Dogma", published in 1958, the first detailed treatise on nationalisation published in this country, and it did not appear to me to be unduly biassed. However, I would say that what Mr. Kelf-Cohen wrote last Friday is exactly my own opinion, because fuel oil is a resilient fuel, a clean fuel, a fuel which has a high calorific value and possesses many qualities which are not associated with coal. The sooner the Coal Board realises the virulence of the competition which it faces from fuel oil, the sooner will it begin to increase its own sales.
I return now to the arguments of the hon. Member for Bosworth. He has 10,000 coal miners in his constituency, and after an enforced absence of four-and-a-half years from this House he feels that he owes a small dividend to the coal 116 miners who voted for him at the 1959 General Election. The speech which he has made is the first he has ever delivered in this House on fuel—the hon. Gentleman does not rise to contradict me—and it bore all the signs of an amateur. Let me tell the hon. Member about crude oil, and fuel oil and other derivatives. Let me tell him something of the comparative investment in coal and in oil since the end of the war.
Between 1947 and 1965, a period of eighteen years—the figures are given on page 16 of the "Revised Plan for Coal" —it is postulated that the total investments in the collieries will be £1,397 million. My right hon. Friend looks surprised. If he will turn to page 16 he will find that £886 million has been spent up to the end of 1959 and that a further £511 million is to be spent in the period from 1960 to 1965, a total of £1,397 million.
But is it realised by the House that British investment in oil between 1946 and 1959, a period of thirteen years, has run to the stupendous figure of £2,050 million as an aggregation of investment in refineries in Britain, in British refineries abroad, in British tankers for conveying oil here and elsewhere—for it is an international trade—and the equipment that has gone into the refineries and into the pipelines? The British investment in oil dwarfs the British investment in coal—and it is all our British investment, a national investment.
Is it seriously suggested by Opposition Members, especially the hon. Member for Bosworth, that we should place some physical restriction on the user of fuel oil in this country or, as the National Union of Mineworkers wants, a fiscal impost by way of a discriminatory duty in order to restrict the user of fuel oil and to try to drive consumers back to the use of coal? Is that really the suggestion being made by the Opposition? I will give way quite willingly to the hon. Member for Bosworth. I am curious to find out exactly what he does want, a physical restriction on the use of fuel oil in Britain, by limitation of imports, perhaps, or some fiscal impost?
§ Mr. Wyatt
What I said, and what I will say again if the hon. Gentleman did not understand it the first time, was that I want the Government to say that 117 they are prepared to impose a tax on fuel oil if there is any danger of the present target of coal production not being reached, so that the unfair competition between coal and oil is, to some extent, redressed.
§ Mr. Nabarro
The hon. Member is markedly out of step with the Leicestershire miners whom he seeks to represent, for the National Union of Mineworkers wants a tax on fuel oil now. Only last Friday evening, in a debate, the ex-Communist president of the South Wales miners, Mr. Will Paynter, now the general secretary of that union, made it clear, as many other coal miner spokesmen have made it clear, that they want a duty imposed on fuel oil.
What would that do? Is it seriously suggested by the Opposition that that would have the effect of driving consumers back to coal? I suggest that it would be more likely to have exactly the opposite effect, because today people will buy the fuel of their choice according to efficiency, according to cleanliness, and according to price.
Now let me deal with the hon. Member's point about the origins of fuel oil. Does he not know—and if he does not know, he should read the speeches of the right hon. Member for Easington (Mr. Shin well) in the days of the 1945–50 Labour Government—that refinery production is a delicately balanced process? At British oil refineries from crude oil are produced aviation spirits, motor spirits, lubricants, greases and a huge range of derivatives and petro-chemicals. The balance of one to the other is a very delicate and economic process.
As I told my right hon. Friend the Minister of Power at Question Time this afternoon—he confessed that he did not have the figures on his cuff, but I hope that tonight the Parliamentary Secretary will confirm them, for they are fundamental to this debate—in 1958 the value of coal exports from Britain was £20 million. This year it will be much less. In 1958, the value of petroleum products exports from Britain was £104 million, 5¾ times as much as the value of coal exports. It would be folly of the worst order for this country to contemplate submitting to the blandishments of the National Union of Mineworkers, who evidently demand that some physical or 118 fiscal limitation should be put on the increased use of fuel oil.
§ Mr. Slater
Would it not be fair to the House if, when talking about oil, the hon. Member gave the reason why exports have not increased?
§ Mr. Nabarro
Coal exports since the war have been at a comparatively low level. The highest level was in 1955 when we actually succeeded in sending 12 million tons abroad. Last year we sent about 4 million tons abroad. The reason is not far to seek. There is a world glut of fuel and power at the present time. It is not a glut only in Western Europe. There is a surplus of bituminous coal in all the major producing countries. There is a surplus of oil and natural gas and a surplus of hydro-electric power. In circumstances of that kind, the most competitive fuel must be employed for our manufacturing purposes and though we struggle to recover our coal export trade, it is excessively difficult to achieve and something to which we have no divine right.
May I pass to the major point of this debate, other than the finances of the Board and the matters about which I have been talking, general fuel policy, to what we are to do with our stocks? Stocks of coal in this country are about 53 million tons, of which 37 million tons are undistributed, in the hands of the Board, and about 16 million tons are distributed. The 37 million tons have been shown in the accounts of the Coal Board at about £4 per ton. They are written into stock at an aggregate figure of about £150 million, which is a figure closely related to the pithead price.
As my right hon. Friend said, they will cost £1 a ton to stock in the first year, while 24s. will be the cumulative figure at the end of the second year and 28s. the figure for the end of the third year, and so on. The coal will also deteriorate—I am not in any doubt about that. For the most part it is smalls and fines and a very large part of it has a high ash content. I note that the hon. Member for Mansfield (Mr. B. Taylor) agrees with me. Those are words which may well be understood in every part of the House.
119 How are we to get rid of that coal? Surely it is not to be suggested that we will hold it indefinitely. I am sorry to quarrel with my right hon. Friend the Minister of Power. I do not like quarrelling with Ministers of Power, but on occasion I feel bound to do so. He said today that he estimated that in the calendar year 1960 he assessed that the consumption of coal would total 196 million tons and output would total 195 million tons. He proposes to reduce the existing coal stocks of 53 million tons by one million tons before 31st December, 1960.
In the meantime, those stocks are mounting. Last week they went up by slightly less than 300,000 tons, and it seems to me that they will go on mounting. My estimate is that if no drastic change in the proposals before the House, is made, the present level of 53 million tons will be 75 million tons, distributed and undistributed, by the end of the calendar year 1960.
My right hon. Friend can always quarrel with an estimate. I happened to be right in 1956 in prophesying the course of events and the then Minister of Fuel and Power happened to be wrong. I do not claim any credit for it, but what I do say is that if the Minister proposes to reduce those stocks by only one million tons in the next fourteen months whereas I say the stocks will continue to mount sharply, then there will be an insupportable burden for the Board and an insupportable burden for the taxpayer—and it is the taxpayers who are paying the cost under the Measure before the House today.
Why do I disagree so badly with my right hon. Friend about the immediate prospects? All we are closing next year in terms of coal output is 4.8 million tons in a full year. Forty-six collieries are to be shut, but the drop in output will be only 4.8 million tons, while 17,700 miners will be displaced. This year's output of coal will be 206 million tons. Supposing Sir James is correct and next year's output drops by that 4.8 million tons plus the opencast reduction of only 4 million tons and total production is thereby reduced to 196 million tons; this year's consumption of coal is likely to be 191 million tons and I estimate that next year's con- 120 sumption will be 185 million tons and for the year after that it may well be 180 million tons. I believe that by 1963 —and let the Minister write down this figure—consumption of coal will be down to a rate of 175 million tons per annum, due to the variety of causes which I have described.
It is, therefore, totally unrealistic for the Minister to bring to the House today a proposition to reduce these huge stocks by only 1 million tons in the course of the next year. What should the Minister do? He should take much more drastic action. Of course, we cannot sell off this coal by bargain basement methods. This is unrealistic, but the price of coal throughout the country is far too high.
I am sure that examples of the high price of coal for all purposes can be brought from every area. I wish to assure the House that the following example is one that I have sorted out from the large number of letters reaching me in the last few days. It happens to be a letter from a consumer in Liverpool who gets his supplies of coal from the Lancashire coalfields. He says:The big industrialists are going over to oil, due to the low quality slacks they get and the high prices they have to pay.As a guide, he quotes from the October 1959 price list:Washed Slack ⅝-in. down to zero 86s. per ton pit. Two inch Dry Slack down to zero 89s. per ton pit. Washed Doubles 2 in. x 1 in., 95s. per ton. All prices at pit-head. Railway rates to be added to these prices to consumers' premises. At these prices it is the easiest thing in the world for the oil boys to take the business. Slacks to industry are too dear and that is why the stocks are accumulating.I hope the hon. Member for Houghton-le-Spring (Mr. Blyton) will forgive me for repeating this. The lowest grade of bituminous coal may be burned smokelessly in a modern boilerhouse providing the proper kind of chain grate mechanical stoker is in use. For the most part these are low-grade coals that we have in stock. They are all capable of being used, but not at these prices. My proposition to the Minister is therefore this, that a reduction of 1 million tons in these stocks next year is futile and nugatory—futile and nugatory. [HON. MEMBERS: "Say it again."] Futile and nugatory.
§ Mr. Nabarro
My hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) is nodding his agreement, so I am sure that I am on good ground with my pronunciation.
What my right hon. Friend should have done in the House today was to say that his objective was to reduce this drug on the market, these huge stocks, by 20 million tons before the end of next year, and that to do so he proposed to bring about by negotiation with the National Coal Board an overall reduction in industrial and commercial coal prices.
Hon. Members might rightly say that that would mean losses. It means losses, but those losses must be considered against huge losses arising from stocking. They must be balanced against a continuance of opencast coal mining. The maiden speech of the hon. Member for Derbyshire, North-East (Mr. Swain) appealed to me immensely. I would like the House to listen to this quotation about what is going on in Derbyshire today and aggravating these stocks:Today the idiotic position in Derbyshire is that fresh opencast mining goes on in the East while in the West worked out limestone quarries are filled up with coal that the Coal Board cannot sell.
§ Mr. Nabarro
I wish that the hon. Member for Fife, West would not jab an accusing finger at my right hon. Friend. The Coal Board is the responsible body and I am endeavouring to enunciate what I think ought to be done in the next twelve months.
The first thing is that there ought to be an objective and calculated reduction of 20 million tons of these stocks by a general reduction in industrial and commercial coal prices. The 2,600,000 tons of large coal should be sold to domestic consumers at a realistic price, which is about £2 per ton lower than the price they are paying for household coal at the present time. Even then the loss would be less than continuing to stock this huge quantity of coal with the inevitable depreciation due to deterioration.
I believe that in business there comes a time—and I have not been unsuccessful 122 in my business life, and perhaps the hon. Member for Bosworth would observe this—when one has to cut one's losses. This is an occasion on which the Coal Board should cut its losses. In addition to what I say about prices for surplus stocks, I do not believe the story that it is not possible to reduce opencast coal mining below certain figures.
§ Mr. Slater
How does the hon. Gentleman propose to ensure that price reductions are to the benefit of the consumer at home when retail prices have been decontrolled by his Government?
§ Mr. Nabarro
It is, of course, a matter for negotiation. The hon. Gentleman evidently is not familiar—I will not be more unkind to him than that—with the pattern of coal distribution in this country. If the hon. Gentleman cares to consult me after the debate I shall point out the facts to him. I am going to Loughborough again in July of next year at the invitation of the Co-operative coal managers to give them a speech on coal distribution. It is a regular engagement of mine. They often invite me there. I wonder why?
§ Mr. Nabarro
There is a Socialist confessing that the Co-operatives know no better, but the Co-operatives happen to be one of the largest distributors in the country of domestic coal, and the National Coal Board itself distributes direct to consumers quite large quantities of house coal. These discussions could no doubt be initiated by my right hon. Friend. I am endeavouring to enunciate the principle. I do not want bargain basement prices, but I want a general reduction of coal prices not only to ease by 20 million tons the coal stocks but also to make coal more truly competitive with oil, and the sort of competition it has to face from elsewhere.
§ Mr. Edwin Wainwright (Dearne Valley)
If we sold 180 million tons of 123 coal a year, a reduction of £1 a ton would mean that we lost £180 million. If we sold 20 million tons of coal at £4 a ton, it would be £80 million. That is all right for one year, but what would happen in the second and third years at such a low figure?
§ Mr. Nabarro
The hon. Gentleman should refer to the analysis of costs, profits and losses from the Annual Accounts of the National Coal Board for the last ten years. He will observe that the 30-odd pits shut down in 1958 and 1959, and the 46 pits to be shut down next year, are all the high price and uneconomic pits which have been losing large sums of money. That burden will be off the Coal Board's shoulders very shortly. The Board will then concentrate on the good and economic pits and I believe that if we eliminate units on which the Board is losing heavily this would contribute to the general reduction of prices.
Moreover, I am endeavouring to say that it should be possible to end opencast coal mining at a much earlier date. It would be cheaper to pay compensation for rupture of contracts than to go on mining opencast coal which has to be put into disused quarries at high cost, for long periods.
If not today, will my right hon. Friend between now and Christmas—and I shall press him on this matter by means of Questions—give us the opencast facts and figures? He says that he will reduce opencast coal mining to 7 million tons in 1960. What will be the cost of the outright cancellation of those contracts? In my opinion, the figure would be substantially less than the losses entailed in the opencast mining of that coal, and protracted stocking of it.
I have made my suggestions objectively to my right hon. Friend. So far I have refrained from congratulating him upon his appointment as Minister of Power. I wish to do so now. The back benches on this side of the House are littered with the corpses of former Ministers of Fuel and Power. My right hon. Friend the Member for Sutton Cold-field (Mr. G. Lloyd), has returned to the back benches; my right hon. Friend the Member for Hall Green (Mr. Aubrey Jones) has returned to the back benches, and the third post-war Conservative 124 Minister of Power to sit in this House is my right hon. Friend. I wish him greater joy and greater success than either of his predecessors, who are now my colleagues on the back benches.
§ 8.0 p.m.
§ Mr. S. O. Davies (Merthyr Tydvil)
I dare not attempt to follow the arguments of the hon. Member for Kidderminster (Mr. Nabarro), but in the course of my own speech I shall possibly throw some light on certain aspects of the speech with which he has entertained us. I was more interested in the Minister's speech. I can only say that it was heroically optimistic. Whether that optimism can be sustained by the attitude towards the mining industry that the Minister adopted this afternoon. I have my doubts. He gave me very little encouragement. He is where his predecessors were—tied to the myth of free economy, within which coal must find its own place.
In questions concerning the coal industry many of us have memories almost as long as, if not longer than, that of the hon. Member for Kidderminster. Since coal mining became nationalised the Government have prevented the Coal Board from exploiting the scarcity market in coal in earlier days. In those days, in fair competition with other forms of fuel, the Board could have made very large profits. The hon. Member for Kidderminster has forgotten that for years the Coal Board has supplied industry with coal at a cost far below its market price. I hold the Government responsible for that. In many instances the price has even been below the pithead cost of the coal, and far below the price which the Government have compelled the Board to charge domestic consumers.
In those days where were the supporters of this free economy? This talk of a free economy, and the statement that coal must compete with other forms of power, is absolute nonsense, and can only mislead those who are persuaded to believe it. Where does this free economy exist? More than one previous speaker has asked whether British agriculture is left to its own devices in a free economy. Is that industry left to struggle for its existence in the teeth of world competition, or are we pouring tens of millions of pounds every year into 125 it? Where is the play of the forces and influences of a free economy in that big industry?
Has the British aircraft industry been left to struggle on its own—to live or die wholly unprotected from the consequences of this mythical free economy, or are the Government, in this instance again, pouring hundreds of millions of pounds into this privately owned and controlled industry? I repeat that this talk of a free economy will not stand up to examination.
It is interesting to compare the Government's attitude to the two industries I have just mentioned with their attitude to the coal industry. I do not wish to elaborate on that point, because my hon. Friend the Member for Newton (Mr. Lee) dealt very fully with that question, but I must remind the Government that they compelled the Coal Board to keep down coal prices even when costs were rising. Have the Government forgotten what I can only describe as the notorious "Macmillan price plateau"? Have they forgotten that in 1958 the Government deliberately engineered a recession by keeping down industrial production, with the result that the supplies of coal, which had for some years been acutely scarce, became overabundant.
As my hon. Friend the Member for Bosworth (Mr. Wyatt) said, our miners have the deeply-rooted conviction that the only explanation of the Government's attitude lies in the Tory Party's traditional hatred of the miners and the mining communities.
That is the only explanation? The hon. Member for Kidderminster, who has left the House, based much of his speech on the fantastic piece of stupidity that oil is cheaper than coal. That is said by everybody who wants to make a speech against the miners and the mining communities—that oil is cheaper for our people than is coal. I know of no statement which comes nearer to the absolute limit of prevarication than this. Does anyone deny that the extremely costly and mad Suez escapade was dictated by our oil interests in the Middle East? Who, other than the British people, have had to pay the hundreds of millions of pounds which this piece of crass folly has already cost us?
126 To this cost we must add the additional millions which are still being paid by the Government in their efforts to buy their way back into the good graces of the Egyptians.
§ Mr. Deputy-Speaker (Major Sir William Anstruther-Gray)
Order. I hope that the hon. Member will try to bring his remarks a little closer to the Bill.
§ Mr. Davies
We have to remember the costs which the people have to meet for the oil which comes to this country from the Middle East. I say with all respect that my reference to the Suez escapade has a direct bearing on what the people have to pay for oil. My statement had no other meaning and I think, with respect, that I was entitled to make it.
§ Mr. Deputy-Speaker
A reference to these matters is in order as long as the hon. Member does not dwell too much upon them to the exclusion of the Bill.
§ Mr. Davies
I fear that your anticipation was not justified, Mr. Deputy-Speaker. I did not intend to deal with the Suez escapade in all its detail. I have not even referred to the numbers of people who were killed, smashed to smithereens, by bombing. All this is part of the price which has to be paid.
I do not intend to dwell on these matters in detail, but I must say that our Cyprus policy and the whole of our strategy throughout the Mediterranean is determined by the oil interests in the Middle East. We have to pay for this as long as we risk so much for the oil which is there. It is no exaggeration to say that the cost of oil to the British people is simply fabulous. I will not deal with all the problems in the Middle East and North Africa, but oil determines all our policies there. Yet the Government still say that oil is cheaper than coal.
The attempt to compare oil with coal in other respects is ridiculous. The hon. Member for Kidderminster reminded us that as many as 30 derivatives were extracted from crude oil. I do not doubt that. Hundreds of derivatives could be extracted from coal. That has been proved over the years. Those of us who 127 are old enough remember the great contribution which coal made during the First World War. I remember clearly that the by-products of coal were exploited to an amazing degree. Surgeons, in the early days of that war, had to perform major operations without the aid of any kind of anaesthetic because we were at war with the country which had provided Britain with those anaesthetics and with other drugs of immense importance.
Coal gave the answer to that problem. We have not forgotten that. Coal gave us not merely anaesthetics, but also many kinds of drugs. It supplied scores of these necessary commodities. We had to use rivers of paint for camouflaging our great industries. That came from coal. A revolution in dyes and the dyeing industry was brought about during that war by the discovery of the tremendous potentialities of coal.
It is a pity that all this work has been ignored. The facts are certainly known to some members of the Government. Indeed, 168 years ago, the pioneer, William Murdoch, patented processes to extract a number of most useful and necessary derivatives from coal. Over the years, we miners have done all we can in our appeals to Government after Government to help us to treat this wonderful mineral as it should be treated. I shall never forget the appeal made by my own organisation, to which I was a party, thirty-four years ago. Today, the scientists agree with us.
During the sittings of the Royal Commission on Coal, headed by Lord Samuel nearly 34 years ago we asked that the coal industry should become an organisation for mining coal from which electrical power should be produced on an increasing scale and from which coke and smokeless fuels should be extracted, as well as the residue of those processes, such as gas, fuel oil, ammonium compounds and the chemical base materials from tar and other by-products.
We elaborated this plan in those days. We tried to get Tory Government after Tory Government interested, but it was no good. They never revealed the slightest sympathy for miners or mining communities. I am sorry that the same spirit exists to this day, whatever 128 evidence we provide about the vast potentialities of this extraordinary mineral. We quoted from the report of the Giant Power Survey of Pennsylvania. I will not go into that in detail, but I must ask the House to try to imagine what an immense source of wealth coal could be for us. There are many authorities in the country who have carried out much research into coal, upon which our electrical energy—light, heat and power—is founded. And upon it a vast and infinitely varied chemical industry could also be built.
How stupid has been the attitude of British Governments towards this vast reservoir of wealth. It hurts to think what appalling waste has characterised the past working and use of this wonderful mineral. Today, it could supply us with so much which we have to import from other countries. It is shocking not to exploit this and give our miners the square deal to which they are entitled.
§ 8.23 p.m.
§ Sir Peter Roberts (Sheffield, Heeley)
I should like, first, to wish my right hon. Friend the Minister well in his new position. I am sure that, despite what my hon. Friend the Member for Kidderminster (Mr. Nabarro) said, he has the wholehearted support of the back benchers on this side of the House. I should like, also, to wish my hon. Friend the Parliamentary Secretary well. He is not here now, but I imagine that he will be replying to the debate. I hope that, although he has not been in the House for some time, the Minister will be able to tell him some of the points that have been made in at least the last four speeches.
I was interested to hear the hon. Member for Newton (Mr. Lee) say how he was going to defend the old Socialist doctrine of nationalisation. The hon. Gentleman had a difficult task. Nationalisation is becoming more and more out of date.
§ Sir P. Roberts
This is what the electorate at the General Election seemed to think. Hon. Members opposite must learn the lesson the hard way.
129 The hon. Member for Newton advanced the argument which I have heard in the House for many years. It was the definitely Socialist argument that there must be a plan worked out to the last detail, year by year. The hon. Gentleman even attacked my right hon. Friend and said that the plan which we have now is too wide. Plans for coal have come up year after year, are revised and then revised again. One of the great faults of Socialist thinking and nationalisation is that, in a competitive industry such as coal—they apparently thought the same about another competitive industry, namely, steel—where world Powers and world economics play a part, gentlemen in Whitehall, and Ministers, can make a plan which will be exact to the last detail in five years' time. I was glad to hear my right hon. Friend say that he was prepared to have a very much wider margin in which he hoped that the industry would be able to work. That is a realistic approach to the problem and does not match up to the rather doctrinaire attitude which we heard from the Opposition Front Bench this afternoon.
One thing which has become clear from the debate is that coal is too expensive. I will not discuss at the moment the morals or politics of the problem. I am merely saying that, economically, coal is too expensive in competition with methane, future nuclear power, or even oil. The hon. Member for Merthyr Tydfil (Mr. S. O. Davies) presented an impassioned argument that oil was not cheaper than coal. The hon. Gentleman cannot avoid facing the fact that, economically, in this country at present it is.
§ Sir P. Roberts
The fact is that it is.
The hon. Gentleman spent much time advancing the argument that this had something to do with foreign affairs in the Middle East. He completely ignores the fact that there is virtually a world price for oil and that much of our oil comes from North America and South America. This is one more example of how Socialists seem to think that this country in isolation can fix prices which are, in fact, fixed by world policies and world movements. We must recognise that in this country coal is too dear in 130 competition with other fuels. This is one of the dangers of nationalisation. One of our problems is the nationalised industry that tends to price itself out of the market. We might well have seen the same thing happen with the steel industry. Had that industry been nationalised I think that the same thing would have happened. Coal nationalisation is a problem with which we have been faced, and which this country had forced on it by the Labour Government when they were in power. We realise that, at this stage, this cannot be-undone. The Conservative Government have to work this policy to the best of their ability, but it is really members of the party opposite who are in the dock, so to speak, in debates of this kind, and who have to defend themselves. It is not a question of this Government having to do so. Hon. Members opposite may not like this argument, but that is the fact.
§ Mr. E. G. Willis (Edinburgh, East)
The hon. Gentleman is talking about coal pricing itself out of the market, but what about the cotton industry? That did not price itself out of the market.
§ Sir P. Roberts
We are talking about coal, and I prefer to continue to talk about coal at the moment.
How can we get these prices down? The hon. Member for Edinburgh, East (Mr. Willis) may wish to have prices go higher and higher so that we have more and more miners out of work—
§ Sir P. Roberts
And that question, I regret to say, was irrelevant. I will not be tempted by that red herring now.
I come now to the point made by my hon. Friend the Member for Kidderminster on the price of coal. It is essential to bring the price of coal down, and perhaps the only thing that worried me in the Minister's speech was that he seemed a little complacent about its price level. I believe that in the months ahead there are four ways that he might consider for reducing the price.
First, there is greater efficiency in the Coal Board itself. A lot has been done in the last fourteen or fifteen years. There has been an enormous amount of capital expenditure in this industry 131 which, in my view, has not yet produced the efficiency results that it could. There is still room for that expenditure to bring in further efficiencies, and thereby to bring down the price of coal.
Secondly, I suggest that the Minister should have a word with the Coal Board—and this is an old point, and one that we have discussed in the House on many occasions—about the overheads of the Board itself. I still believe that there is an opportunity there. This, again, is one of the dangers of nationalisation, but I believe that there is a possibility of reducing overheads even further.
We have had a reasonably lengthy discussion on my third point, which is that of getting the most economical coal. The point was being made by my hon. Friend the Member for Kidderminster when he was interrupted from the other side, that, of course, there are pits that are producing cheap coal at the moment; South Yorkshire, the Midlands—large areas where the coal is being produced very much more cheaply than the price at which it is being sold.
We are, therefore, faced with those areas where, quite frankly, the production of coal is now uneconomical. I may say that today's debate has ranged further than any I have heard in this Chamber in the last fifteen years on this problem of readjustment—because it is a problem of readjustment. Are we to continue running an uneconomical section of industry merely because it happens to be the coal mining industry?
I believe that those men who are at present employed in uneconomic pits are themselves not happy about it. I have had discussions on this. I do not believe that they are really happy, nor do I believe that any hon. Member would be happy if he knew that he was working in an uneconomic pit. As my hon. Friend the Member for Berwick-upon-Tweed (Viscount Lambton) has said, there must be rethinking, redeployment and re-employment for large sections of the industry that are now uneconomical.
As I understand, the Minister said that in the last two years we had been able to rephase about 30,000 miners a year—28,000 in one year, and 30,000 in the next. The Minister of Labour is not here at the moment, but I think that the 132 Ministry, in co-operation with the National Union of Mineworkers, has done extremely well in rephasing that number of men without producing too much hardship.
On the figures given by my right hon. Friend today, the run-down in future looks as though it will be about 10,000 a year—and I would appreciate it if that estimate could be checked. In other words, the run-down will be slower. Why? Is it because the areas or the pits are smaller? If we have been sucessful in redeploying at the rate of 30,000 cannot we go on redeploying and re-employing? If that can be done, I believe that the target which he sets himself, rather than the 1 million tons saving about which my hon. Friend the Member for Kidderminster spoke rather disparagingly, will be reached a good deal faster and thereby produce the cheaper coal which we require.
My last point on keeping prices down I find the most difficult to follow, namely, opencast mining. I am sorry that my hon. Friend the Member for Kidderminster is not in his place. This was the only point which he made which was quite illogical. He wants to bring prices down in the same way as I want to bring prices down. Opencast mining is the cheapest and most economical method of getting coal, but my hon. Friend wants to dispense with it and, at the same time, hopes to keep prices down. If he had been here I should have liked to take him up more strongly on this point, because to people looking for reductions in price opencast mining is an efficient method. It is the method in America and Germany which has increased production. It is one of the more up-to-date methods of winning coal.
I do not propose to go into the question of the state in which opencast mining leaves the land. In Scotland, one can see great areas of devastated land through deep mining. There is a good deal of exaggeration about the results of opencast mining and the present methods, but I cannot see how the Minister will get prices down if he goes on cutting down opencast mining where it can be carried out. He said that he was glad that prospecting was to stop. But to do away with opencast mining is to get rid of one of the cheaper forms of getting coal.
133 I view the question of stocks very seriously. I believe that the great volume of stocks in the country at the moment casts a blight on the industry itself. If one worked in an industry of this kind, with these enormous stocks, and if one knew that the coal which one won out of the ground merely went into a heap, it must be depressing in itself. I make a speech on stocks and the selling of them year after year. Each time I make it, it becomes more difficult for the Government or the Coal Board to follow up my advice, and I realise that. Four years ago, I advised the then Minister that we should enter into reasonably long-term contracts on the Continent for the sale of coal. The Americans were doing it. But the Government would not accept my advice. We therefore lost the contracts.
The hon. Member for Merthyr Tydvil, who is not here, said that the Coal Board did not exploit the scarcity period just after the war. With respect, it did, from the overseas point of view. Instead of keeping our long-term contracts overseas, the Coal Board put the price up to such a high figure—sometimes £2 a ton above the price in this country—that those contracts were lost. Four years ago, we could much more easily have made long-term contracts, particularly on the north coast of the Continent—France, Belgium and North Germany. The following year, the position was more difficult. The price kept going against us. Now, four years later, it is still more difficult, but a start can still be made.
The Minister said that a policy of selling off stocks of coal—I asked the Minister about it at the time—at a cheap price was unwise. Obviously, if one sells it inside this country one is taking away a future customer. But if one sells it abroad over a period none of the difficult points which he made in his speech about customers in this country arise. It would be possible, if we could make the long-term contracts, to get this extra coal out of the country to an overseas market. I realise that it would not be easy. I am only suggesting that if this had been done four years ago we would be much better off now.
Poland has been mentioned. As hon. Members know, Poland has behind it the State organisation of its Communist 134 Government. In a year's time things will be more difficult still, and in two years' time even more difficult. A start has to be made somewhere. When hon. Members opposite were in office they kept a number of overseas markets going, but recently, I regret to say, we have nearly got down to the minimum.
This whole question of the reduction in the price of coal and of the movement of employment from one area to another is overshadowed in this House by what one might call the "mineworkers' lobby" in this House—one of the strongest organisations politically since the Irish first came to the House in 1880. My hon. Friend the Member for Berwick-upon-Tweed suggested that there might have been an unmoral reason behind it. I know a great number of hon. Members opposite and I would not agree with what he said. I think that they are doing an extremely good job on behalf of the miners. My only fear is that if they do too good a job they will find that the industry and the costs are so highly priced that, instead of obtaining what they want, namely, stable employment, they will find redundancy and pit closures. They should consider that possibility very carefully.
What one wants to see is the mining industry based on a really efficient productive unit so that the wages and salaries of the men in that productive unit are firm, certain and expanding. I do not believe that in the long term it does any good to try to bolster up an uneconomic industry where the price of coal is too high to compete with other industries; where year after year Members come to the House and talk about subsidies or protection against oil. I do not believe that we can stand that sort of economy in fifteen years' time. We must get into a position now whereby we can face whatever may come.
This has been a political problem for the last thirty years.
§ Sir P. Roberts
Well, it has been a really fierce political problem in this House for thirty years. I believe that we should now look at it as an industrial problem which will need courage and foresight to solve.
135 I am glad to see the Parliamentary Secretary here now. I am sorry that he has missed most of the speech which I have had the honour to address to the House, a speech which has been heard with, I hope, interest by hon. Members opposite. I am sorry that he missed the speeches of my hon. Friend the Member for Kidderminster and the hon. Member for Merthyr Tydvil.
Let me conclude by saying this to him. This is an industrial problem and has to be faced as such. We have had comparisons with agriculture. I should like to make this point, because one or two hon. Members opposite have used agriculture as an example. In agriculture, if a farmer sells 1 cwt. of wheat on the market at, say, 20s. he is paid a subsidy. He does not sell it on the market at 30s. In other words, the consumer gets the benefit.
§ Sir P. Roberts
The consumer pays 20s. a cwt. for wheat for which the farmer gets 30s. The farmer gets 20s. and the subsidy brings it up to 30s.
It is not so with coal. For coal, the consumer has to pay the full price. When we use the analogy of agriculture and coal, we have to bear in mind this difference. The logical argument of hon. Members opposite is that coal should be sold at a price which is competitive with oil or methane, and the difference should be found by the Government. That is the logical conception, but it has never been put forward in this House by either side so far as I know.
§ Mr. William Baxter (West Stirlingshire)
Is the hon. Member in favour of that policy being pursued?
§ Sir P. Roberts
No, I do not think that I am. I am trying to deal with the argument of agriculture versus coal. It is not an equivalent argument. That is the only point I am trying to make. If anyone discusses the question of agriculture and coal together, and tries to draw a comparison, it is not an exact comparison.
As I have said, this is an industrial problem. To deal with it courage and foresight are needed and I believe that 136 both the Ministers sitting on the Front Bench have that courage and foresight. I wish them well in the four or five years which lie ahead in this Parliament. If there are difficult problems to be tackled let them be tackled now. Do not put off from one year to another the grasping of this problem. We must get coal as economically as possible. We must transfer and rehabilitate those men who will find themselves in uneconomic pits. It is a great encouragement to know that, so far, we have been successful. It encourages me to think that in the future we shall carry on that policy.
§ 8.49 p.m.
§ Mr. William Ainsley (Durham, North-West)
In the few minutes at my disposal, I want to deal with the main speeches that have come from hon. Members opposite and their Tory philosophy in stumbling upon the fact that nationalisation was a political issue. We knew that during the General Election campaign. It is rather strange that in the mining constituencies we were returned with an increased Labour majority in all cases. It was because of the campaign which had been going on over the past two years, sponsored by the Federation of British Industries, to blackguard nationalisation that the Tories succeeded in being returned to power. Now they are trying to make nationalisation an industrial issue.
I want to examine some of the statements which have been made by hon. Members opposite. We have heard the same old Tory philosophy—cheap coal. From the day when I entered coal mining, at the age of 14—I admit my great interest in it—the Tory philosophy has always been to want cheap coal so that our industry could survive. That was why I loaded hundreds and hundreds of tons of coal at 7½d. per ton. Many hon. Members opposite would not have cast it into their own cellars for 1s. or 2s. a ton, never mind about working underground. The colliery I started at when I was 14 was uneconomic. It has been going every day since. It is still uneconomic.
When nationalisation came in, the cry was for production and more production. I remember saying to one manager that the idea was that, as long as we got something black, regardless of what coal it was, that was all that mattered. That 137 was the attitude, because of the expanding industrial economy of the nation. Until 1955, the National Coal Board was concentrating entirely upon increased production.
The Minister said that we should withdraw from the export market. We on this side pleaded that we should not, saying that we were cutting off our nose to spite our face. It was the Government who made the Coal Board come out of the export market. Then we began importing coal, which added another burden to the shoulders of the Board.
The noble Lord the Member for Berwick-upon-Tweed (Viscount Lamb-ton) should go home and read the history of his ancestors in County Durham. Then he will have sympathy for the mining community. We still have some bitter memories of him and his like in County Durham.
§ Mr. Ainsley
The hon. Member for Kidderminster (Mr. Nabarro) referred to the huge sums of money invested in oil resources. Why is there this huge investment? It is because the people in it will gain some profit from it. But they will not get any profit from a nationalised industry. That is why this nationalised industry has been cribbed and cramped by this and other Tory Governments in their desire to blackguard nationalisation in the eyes of the nation.
Nationalisation has succeeded, and it will succeed if it is allowed fair competition. But, as the House knows very well, it is not allowed fair competition. How can the Coal Board compete with the revenues from oil which come into this country through the oil refineries around the coasts of this country and the Continent?
Hon. Members speak of coal. In Durham, it is not coal; it is gold. Had it not been for the structure fixed by the Minister for the Coal Board in the grading of coals, we in Durham, as I can easily prove, could have received twice the amount of money fixed by the Ministry. Our market was the Scandinavian market. We were not allowed to sell it outside this country because of the demand being pressed here for coal and still more coal.
138 We face a problem in the West Durham coalfield. By-product plants are closing. Collieries are closing. Villages are being denuded, while opencast working comes into being on the other side of the road. Even during the election campaign, I received a telephone message to say, "They have come with their machines to take off the topsoil." I sent a complaint to the Minister only last week. Four farmers in my constituency are complaining of opencast working. When the topsoil is put on to the heap, it loses its binding power and when there is rain on the hillside, it makes ruts in the field and the soil is washed down, filling drains and gutters and overflowing on to the roads.
That is a responsibility of the Coal Board, the cost of which is not accepted in opencast working. We know, however, that it will continue. This is how the land is being impoverished at the expense of opencast working. I invite hon. Members to come to my constituency to see for themselves.
Another thing that happens is that the trees are uprooted. There are complaints from many farmers about fencing to protect their huge stocks. There is no shelter for the cattle with the result that they are left exposed on the north-east windswept areas. It will be years before some of the hawthorn hedges ever give shelter for cattle again. This is false economy and it is for this reason that opencast working should stop immediately.
§ Mr. Ainsley
It has never been properly tried. It takes at least seven or eight years for nature to take its course and for the land to be somewhat fertile again. That is the opinion of the experts.
I have facts, including the Cohen Report, to prove that it was when the Government's policy resulted in the stagnation of industry that the problem in the mining industry began. It was a political decision, taken by the Tory Government. I do not have time to give quotations from the Cohen Report, but these are the facts which the Government must face. We in the mining industry are proud of nationalisation and we want more of it. That is the solution for our national economic problems.
§ 8.58 p.m.
§ Mr. Harold Finch (Bedwellty)
This Bill, providing for additional borrowing powers for the National Coal Board, has given rise to a debate on the general position of the mining industry. That was only to be expected. Any borrowing powers must have regard to the working of the industry concerned and the problems which confront it. We are happy, therefore, to join hon. Members opposite in discussing some of the problems which affect this industry.
The debate has been noteworthy for two maiden speeches. I congratulate the hon. Member for Meriden (Mr. Matthews) upon his interesting and informative speech. It was well delivered and we thoroughly enjoyed it. I hope we shall have the privilege of hearing from him again in the near future. Then there was the speech of my hon. Friend the Member for Derbyshire, North-East (Mr. Swain). He comes here, as he reminded us, straight from the coal face. The House is always pleased to hear from a Member who has practical knowledge and experience of the subject which is under discussion. I enjoyed my hon. Friend's speech, as, I am sure, other hon. Members did. I enjoyed it from first to last and I am sure we shall look forward with great delight to hearing again from him on this important subject of mining.
As my hon. Friend the Member for Newton (Mr. Lee) said in opening the debate from this side of the House, there is no difference between us and the Government on the need for these additional powers. As has been said, they are essential, and I do not want to go into that any further at the moment; but there is a wider gap between ourselves and the Government on the position as we see it in the mining industry today and the measures which we think are essential to deal with it.
Therefore, it is necessary right at the outset to deal with at least some of the factors which have brought us to the present position in the industry. I say that because some hon. Members opposite have referred to the price of coal, the costs entailed and many other features of the industry, so that I felt that I ought to deal with some of the factors which have led to this situation.
We know very well that on vesting day, when these pits were taken over 140 by the Board, nearly one-half of them were outworn, antiquated and badly planned. The Board has had to pay a tremendous amount to try to get these pits into a productive state. Let us look at the facts of the situation, because in this debate I hope that we will keep to the facts. The Reid Report testified that the industry was suffering from age, from bad planning, resulting in too many small, uneconomic pits, lack of development to replace obsolete works, bad haulage and bad transport arrangements, too little mechanisation and little standardisation of equipment. What a reflection upon private enterprise in this industry.
What was the record of private industry? Let us look at it. Between 1913 and 1945, coal output was run down from 287 million tons to 174 million tons. That was the position then, and I venture to say that many of these pits could not have continued in production. They could not have produced the coal, because the cost would have been too high, and they would have had to close in the post-war period. With the closing of those pits, we should have been short of coal, but with the pooling arrangements which began under nationalisation, the Board, faced with the demand for more coal, worked these pits at considerable cost.
When we talk about cost, we should remember that this was the liability which was placed upon the Board, and which has bedevilled the Board right from the commencement. I could refer to some of these outworn pits as mere holes in the ground, as I knew them in West Wales. That was the position then. They could have been closed by the Board, which would have been responsible right from the start for lower output. We could have had a greater output of coal only if we had taken on a far healthier industry when nationalisation came about.
We wanted coal in the post-war years, because we had just come out of a war which had shattered the nation's economy. More undertakings and factories were going into production to rebuild the economy, and more and more coal was required. We know very well that between 1946 and 1956, coal consumption rose from 186 million tons to 218 million tons. The Board and the 141 miners were exhorted to secure as much coal as possible, virtually regardless of cost, so that the ever-increasing demand could be met and Britain's post-war recovery could take place. That was the position then, and this had two other effects upon the Board.
This demand for coal, the urgent necessity of producing coal almost at any price, retarded the Board's plans for the reorganisation of the industry. The Board was not able to reorganise the industry at the rate that was so necessary at that time. The Board could have closed some pits, which would have been a very desirable thing to do, and could have absorbed the men in other pits. If the Board had been able to reorganise the industry then, we would not be facing so many closures now; but the country wanted the coal.
There was another factor. The home demand was so great that we prejudiced our position in foreign markets. We lost the export trade, largely because there was such a heavy demand for coal at home. Indeed, the demand was so great that we had to import American coal at a high price, and had to sell it at home at the British price. In doing so the Board incurred a loss of £70 million.
At that time we on this side of the House contended that it was unfair to saddle the Board with such a liability, but there was no response from the Government. This kind of thing does not take place in other industries. It did not take place in the steel industry. When we were short of steel the customer paid the price, but the Coal Board was saddled with a loss of £70 million, although we asked the Government in common fairness to come to the assistance of the Board.
Now I come to the third significant feature which has been mentioned in this debate. With such an increased demand for coal the National Coal Board could have increased the price beyond that permitted by the Government at the time. I have figures here which show that the Board was selling coal to industry at 30s. a ton less than the price being charged in Western Europe.
My hon. Friend the Member for Houghton-le-Spring (Mr. Blyton) has raised this matter in the House on several occasions. The hands of the Coal Board 142 were tied. The law of supply and demand did not operate in the case of the Board. The demand was so great that the Board could have made hay while the sun shone and could have charged such a price for at least its industrial coal that it could have made millions of pounds profit which could have been put to reserve. The right hon. Gentleman would not have needed to come to the House today for borrowing powers, for the Board would have been in a position to meet its responsibilities because of the millions of pounds it could have placed to reserve. But no, the Government tied the hands of the Board until the demand for coal began to fall. When that happened the Government said: "Now you can compete and charge what price you like".
§ Mr. Finch
Yes. In the beginning we could not enter the race, but later we could enter it and compete with a handicap. I am sorry the hon. Gentleman the Member for Kidderminster (Mr. Nabarro) is not present at the moment, because he referred to the price of coal. I say that if the Board had been allowed to run its undertaking by the usual commercial standards coal would now be able to compete with oil and the right hon. Gentleman would not have needed to come to this House today, because the Board would have been able to deal with the situation.
This kind of conduct violates all the laws of equity it is so grossly unfair. There is the suspicion that there was a deliberate policy on the part of the Government to discredit nationalisation. This industry has been crippled by not being able to apply the commercial standards common to every other industry. Now that it has been crippled it is told: "Look at the cost of coal. Look at the market. Why do you not compete with oil?" In fairness to the Board, I say that it has never been allowed to carry on its business as any hon. Members opposite are allowed to carry on their businesses.
That is the situation. What do we find? The position changed drastically and the demand for coal fell. The inland consumption of coal fell by over 15 million tons in the two years 1957–58, 143 and I should say that there will be a further fall of about 12 million tons by the end of this year. In addition, we know that exports have fallen by some 6 million tons. This makes a total fall in coal demands since 1956 of well over 30 million tons, which is a very serious situation.
As a result of this fall in demand, the Board has taken certain measures to reduce production. These measures have included the ending of the Saturday shift, restrictions on recruitment, the running down of manpower, the closure of pits and the cutting back of opencast output. In addition, there has been the accumulation of undistributed stocks. In the period 1929–32 the demand for coal fell by about 50 million tons, and we then had 305,000 unemployed in the mining district. I agreed with the right hon. Gentleman when he said that in this instance such a serious position was avoided by the stocking, of coal.
Recently the Board has produced its "Revised Plan for Coal", which will involve more than 200 pit closures between 1960 and 1965. This is based on a demand for coal of between 200 million and 215 million tons. The demand for next year is estimated at about 195 million tons. There is to be no further stocking of coal and production is to be cut to that figure. This means not only that forty-six pits will be closed but that certain districts underground will be closed and many pits will be put on single-shift working. What with the absence of recruitment and the closing of pits, the manpower will be affected to the extent of 50,000 men, which will represent a very serious position for the mining industry. It is a very serious position for the miners and their families living in the villages where the pits will close.
In these circumstances, the least the Government can do is to give some support to the Board's plan. The Government should let the miners and the mining industry know that they will stand behind the plan and help the Board wherever possible. That is an elementary step to be taken. It is a step which the miners are entitled to ask the Government to take. Miners feel that, in the light of the inroads that oil is making upon the coal market, the plan errs on 144 the side of optimism, and they have every justification for believing that.
We believe that it is an optimistic plan, because we know very well, for instance—it must be recognised—that the amount of fuel oil consumed in 1958 was 50 per cent. greater than in 1957 and that in the first half of 1959 the amount consumed was one-third greater than in the first half of 1958. Thus, there is a grave likelihood of fuel oil replacing coal at an increasing rate, and if the Board has to come forward with a further revised plan in two years' time, involving more pit closures, that will be disastrous to the mining industry and those employed in it. It would result in such a position that the men would lose confidence completely. We should find ourselves more and more relying on oil.
I believe that that position can be avoided if the Government assist the Board in these circumstances. Such assistance is justified if only on the ground that the Government have treated the coal industry as a public service. Price have been controlled and the Board has been prevented from accumulating reserves. In addition, the Government are responsible for the social well-being of the men employed in the industry.
There are two ways in which the Government can help. The first is in the transfer period through which the industry is now passing and during which time the Government can help with the immediate problems. Secondly, there are the long-term problems and the successful planning and co-ordination of production to meet them.
The Government should assist in meeting the cost of the present stocking of coal, which is a heavy burden on the Board. Can the Parliamentary Secretary give any information about how much the Government are paying for the stocking of oil? We are paying for the stocking of oil, so why not for the stocking of coal? The coal industry is our own industry. What is the extent of oil stocking? Is it a four months' supply, or a six months' supply? I hope that the Parliamentary Secretary can give some information about this matter. It is unfair that the Government should assist in the stocking of oil and not in the stocking of coal.
145 The Board has said that it can get men absorbed at other collieries. I have no doubt that the Board will do the best it can, but what will be the practical results? The men will have to be transferred to other collieries which in many cases will be a long way from the pits and villages where those men have worked and lived all their lives. The men will have to go by bus, and then questions of transport will arise. That will be a very big item for the Board which will be asked to assist the men. If the men are to be successfully re-absorbed smoothly and efficiently, the Board should be assisted to help the men concerned.
I need not remind the House that there are hundreds of disabled men in the mining industry, men suffering from pneumoconiosis, men who have lost a leg or an arm. What chance will they have of getting employment? Has the right hon. Gentleman consulted other Government Departments about those men? Has he made any representations to the Minister of Housing and Local Government about the housing problems which will undoubtedly arise during re-absorption? What are the prospects for disabled men? It would be very serious if disabled men were unable to get other employment. This is a matter which should immediately be taken up by the Minister of Labour.
§ Mr. William Yates (The Wrekin)
The hon. Member has made a very important point. Is he suggesting that when miners have to move from one pit to another in the same area, the Board will not help with transport to the new pit?
§ Mr. Finch
I did not say that. I said that the Board would do what it could, but it will be involved in the expenditure of a considerable sum of money which it is not in a position to pay, and for that reason it should be given some assistance. The Board is competing with oil. These are liabilities that they have to meet, and in the circumstances they are entitled to ask for some assistance.
The Government have a duty to assist in the transfer of men. For years men have been persuaded to enter this industry as a result of promises made to them. It was pointed out that there was a prosperous future ahead of them. Only nine months ago we saw placards saying: "Enter the mining industry. There is a 146 future in it for you." In the circumstances that have now arisen, are these men to be left in a state of insecurity? Are no reasonable steps to be taken to see that they are given other work if they are not re-absorbed in the industry?
As my hon. Friend the Member for Newton said, the Government are subsidising private industry. Millions of pounds are being paid to agriculture, cotton, steel, and shipbuilding, and quite a number of other industries are knocking at the door. We are paying millions of pounds to private interests. I will not go into the merits or demerits of such a policy, but we are doing it. Millions of pounds are being paid out, yet our basic industry, the coal industry, is not to be assisted at all. It is to be left high and dry.
In introducing the Horticulture Bill last week, the Minister said something of great interest. Here again, I am not entering into the merits or demerits of the proposal, but the right hon. Gentleman said:The Government accept their special obligations to British producers, and we have always recognised that our own growers should have a reasonable measure of stability. We have adopted the tariff as the main instrument, and we shall continue this policy."—[OFFICIAL REPORT, 19th November, 1959; Vol. 613, c. 1354.]Growers and horticulturists are very desirable. I am not criticising that industry, but the mining industry, which throughout its long history has made such a valuable contribution to the British economy, and which in the dark days held up the economy of this country and has done its best through bad and good times, is not to get any assistance at all from the Government except the borrowing powers that have been put into the Bill. Such a policy could never be justified before a body of impartial men and women.
What is the position in Western Europe? In Western Europe as a whole national Governments and the High Authority are meeting a large part of the cost of stocking coal. They are meeting the cost of redundancy. For the first four months redundant miners receive their full wage. For the second four months they receive 80 per cent. of their wages, and for the third four months they receive 60 per cent. of their wages. In this country the National 147 Coal Board pays two-thirds of the basic minimum wage, which is £8 17s. 6d. or £9 17s. 6d., for a number of months. Surely, some assistance on the lines given in European countries should be given to miners here.
In the early stages of the debate my hon. Friend the Member for Newton drew attention to electric power stations. This is another means by which the Government could help the coal industry. There are eleven or twelve dual-firing electric power stations which will, or already do, use oil. Surely the Government could help the Board by getting these electric power stations to use coal. It would mean an additional 5 to 6 million tons of coal per year. I believe that the Electricity Board is prepared to help, but it is a question of compensation for the oil companies. I venture to say that if something could be done on the lines that I have suggested it would help the Coal Board to get over its present difficulties and meet the future with a greater degree of confidence.
Much has been said about opencast coal mining. My hon. Friend the Member for Bolsover (Mr. Neal) has raised the matter time and time again. We want to accelerate the stopping of opencast coal mining. The Board is reducing it, but we are still to produce 7 million tons next year. Here again, the Government should consult the Board to see if something can be done in the matter. We could save 7 million tons in opencast coal mining and 5 million or 6 million tons by causing those of our electric power stations to revert to coal. We could thereby reduce the size of the problem by about 12 million or 13 million tons. That is the way to help the Coal Board.
I do not pretend to be an authority on dumping. The mining industry must realise that it has to compete with United Kingdom refined fuel oil. But the problem of imported fuel oil is quite another matter. I am advised that imported fuel oil is sold at about £6 10s. a ton, and crude oil at £8 10s. a ton, while petrol is sold at £16 10s. a ton. This is an excessive price, and one is forced to the conclusion that it is allowing the oil companies to make good their losses on fuel oil.
148 It may be said that fuel oil is a waste product. I agree that it was originally, but I am advised that 40 per cent. of the refined oil that Britain produces comes from fuel oil, while in the case of motor spirit, or petrol, the figure is only 25 per cent. In those circumstances, how can fuel oil be regarded as a residual product? This is a matter for Government inquiry, in order that we may be satisfied on the question of dumping. I am not prepared to make up my mind one way or the other in the circumstances, but the situation demands an inquiry. At a time when the Board's costs are going down and productivity is rising it cannot afford to sell at competitive prices because there is not fair competition between coal and oil.
The right hon. Gentleman and his Parliamentary Secretary have come to office at a very crucial time in the history of the mining industry. I wish them well. They have an important task. The right hon. Gentleman could adopt measures which would create a healthy and virile industry. If he would do this he would give it confidence for the future. It is not only a question of unemployment; young men are beginning to leave the industry. They see no future in it. Only the other day a young man who was studying mining engineering told me that he was leaving the industry and was going in for civil engineering. I said, "That will mean that you will have to join the Forces". He said, "I will willingly go. There is no future in mining". If young men like him leave the industry and manpower declines we will not be able to run the pits, and once pits are closed they cannot be opened up as easily as a factory can. We shall then be in a very serious position, strategically. We shall have based all our economy on oil.
I believe that there is a future for coal if we can assist the Board. That is the task of the right hon. Gentleman, and I can assure him that if he is prepared to consider some of the suggestions that we have put forward the National Union of Mineworkers will be prepared to consult him, as will the Coal Board, in order to decide what are the best means to adopt to give the industry and the men employed in it that security and confidence which they deserve.
§ 9.30 p.m.
§ The Parliamentary Secretary to the Ministry of Power (Mr. J. C. George)
I have listened with great interest to the many points which have been made on both sides of the House during the debate. I listened with a great deal of attraction to the maiden Front Bench speech of the hon. Member for Bedwellty (Mr. Finch), which was made so persuasively and convincingly. Some of the more detailed points are the concern of the National Coal Board, and I am sure that the Board will study them with care. It is my task to reply to the observations which have been made on the action or lack of action of the Government, and I am fortified by the kind references which have been made to me personally during the debate.
For a large part of my life I have been concerned with the coal industry, but never have I felt the weight of my responsibilities as much as this evening. No one with my background could sit through the debate, as I have done nearly all day, without being impressed by the anxiety running through the speeches of hon. Members opposite and my hon. Friends and by the sincerity of their views about the need for remedial action. I will try to deal with most of the points and to allay some of the fears which have been expressed. At least, I hope that I can do something towards allaying them.
I know that during the debate today it has been recognised that we should neither exaggerate nor under-rate the gravity of the present position. One feature of today's debate has been a lack of extravagant language, which will undoubtedly help in the problem raised by the hon. Member for Bedwellty, who said that men are leaving the industry. The reason for this is that exaggerated language is being used about the present position. I am delighted that that was not a feature of the debate.
The coal industry is in trouble. It has been in trouble for three years. The number of men in the industry has fallen sharply, but because of the humane attitude of the Coal Board, supported by the Government, and with the blessing of the House, comparatively little hardship has been caused. For that, I am sure we are extremely thankful. Unemployment is 150 at a low level, full-time working has been maintained and a high level of earnings has persisted all through those three years.
One comment was made about boys, and this is a point which concerns me seriously, for I regret that there has been some cessation in the intake of boys into the mining industry. I realise that we must have juveniles coming into the industry to replace the wastage at the other end, and I hope that the Coal Board will be able to resume the normal level of recruitment of boys in the years that lie ahead.
Clear evidence has been given by the costly action of the Coal Board in the last two years that social considerations, as distinct from economic considerations, have been given a high place. I suggest that there is no reason to fear that this will change in the years ahead. The spirit is there, and the spirit will be maintained. The troubles of the Board have been attributed quite frequently today to a Government-inspired depression. That is an old hare which has been running for a long time. We all know that it was part of a world depression and, if we are honest, we shall admit that this country climbed out of that depression far more quickly and healthily than other countries in Europe. We climbed out of it to a base of sound money and stable prices, and the country is on the upward swing again.
It is this upward swing which will mean so much to the coal industry. It is not by doling out assistance to the Coal Board that we shall cure the troubles of the industry. The upward swing of industry, as the hon. Member for Newton (Mr. Lee) said in opening the debate from that side of the House, is the cure, not doles here and there to the Coal Board, which would be against the dignity of a great industry.
Coal is lagging because it is up against hard opposition. I should like the House to be clear about what has been done. I reject the proposition that this great industry should be handed out dole. The upward swing of industry will bring the coal industry back into a proper position and keep it on the right financial road.
It is vitally important that the House should appreciate what has been done. 151 The hon. Member for Bosworth (Mr. Wyatt), in most exaggerated language, said that the Government had the miners by the throat. [Laughter.] It is not a laughing matter. It is exaggerated language and can do nothing but damage. The hon. Gentleman said that we had the miners by the throat and wanted to keep them unemployed. That is not the spirit in the industry today. The present good spirit has come from the general anxiety to try to cushion the worst effects and gain time so that as little hardship as possible is caused. The hon. Gentleman does no service to the industry or to his party by using such language.
Breathing space has been given. We have had two years of breathing space. The hon. Member for Bedwellty asked what had been done. Miners were relieved of the Saturday shift which they had borne with such fortitude for so many years. That was the beginning. When demand was dropping, these steps were taken. Recruitment was restricted to consolidate the jobs of the men in the mines. Massive stocking has taken place. We should not under-represent the cost of the stocking.
I wish to answer one point that was raised by my hon. Friend the Member for Kidderminster (Mr. Nabarro). He asked for a breakdown of the borrowing requirement of £120 million. The figures are as follow: capital expenditure on collieries coke ovens and other fixed assets, £106 million; financing of undistributed stocks, £50 million; total capital requirements, £156 million; National Coal Board internal financing, £36 million; result, £120 million as required by the Order.
§ Mr. George
Stocking on a massive scale was undertaken with one purpose only in view, and it has reached a level which cannot be justified except to prevent excessive closures of mines. That is why the stocks are there and that is why the money has been laid out. That is why the Bill is necessary today, to finance these for one purpose only. They are not justified economically or on any business basis. They are there to prevent 152 hardship to miners and to run down collieries with the minimum of hardship.
Opencast mining has been cut. Opencast has been friendless in times of plenty and in times of scarcity. Agriculturists and amenity people were against it. Now the miners are against it. The hon. Gentleman must realise that when the Coal Board decided to cut opencast mining it was handicapping itself in its fight against oil. It was reducing the income to the industry to prevent hardship. No one is saying that it did the wrong thing at that time. Let us give credit where credit is due.
The Coal Board has also cut its capital programme by £175 million. The £1,000 million in "Investing in Coal" will be reduced by £175 million at 1955 prices not because there are not jobs to be done, but because if the money is spent now some collieries which have a reasonable life left will be closed too early. If we start to sink new shafts now these collieries will be put out of life in two or three years' time.
Therefore, the Coal Board decided to defer the expenditure of £175 million to do something more to prevent hardship for the mining villages. It has delayed closures. If the Board has to fight against oil, one would expect it to be free of all the trammels of emotions. That is not the view being taken either by the Board or by the Government. Nor, up to now, is it the view taken by the House.
Closures are being delayed. Pits which are losing very heavily are being kept in being so that a cushion can be inserted between today and when the time comes to close the collieries. Selected closures are taking place. It must have been especially evident in Scotland, because if one is concentrating industry to get it on to a better economic basis one generally turns to areas which are doing worst and where most money is being lost.
Personally, I was very thankful to see the revised plan for Coal being so easy on Scotland. Not only does it not inflict too many closures on those areas that have been losing so much money, but it does not penalise any one area very heavily. A feature of the selection of closures in the plan is that the closures are spread over the country, to do as little damage as possible. The Coal Board has not picked the collieries that it might have picked had it wished only 153 to make itself more economic or efficient. Everything has been done to cushion the effect of the closures upon the country as a whole.
We have reservoirs of pits. A reservoir is normally a container for holding water, but these reservoirs have been created to hold men in reserve—in collieries often losing much money, and in many places the men are still being paid full wages while awaiting absorption into new pits. All these things have been done to provide a breathing space and a cushion and, so far, they have been effective in preventing hardship.
Another action taken by the Coal Board, in conjunction with the National Union of Mineworkers, has been to assist the running down of the industrial manpower by compensation for the over-65s leaving the industry. I think that the House will generally welcome this scheme, which has been accepted in the country as a move in the right direction, to keep the age limit down, and to keep the active men in the pits.
It is not enough, however, to cushion the effect upon the miners in the pits. There is an obligation, stressed so often this afternoon, to go beyond that. I know, and hon. Members living in or representing mining villages know, that, while we may limit local unemployment, there will be villages where life will be seriously disrupted; where the young will fly away and where the old will wait to see what happens. If nothing happens they, too, will pull up their roots and go elsewhere, leaving that village derelict and decaying with only old buildings in it.
We are determined that whatever can be done by Governmental powers will be done to prevent hardship at that point. The Local Employment Bill, which recently had its Second Reading, is intended to serve that very purpose. It is no good people saying that this very important piece of legislation is futile. It is an important step forward to deal with unemployment that is imminent, and it can be extremely effective in mining areas such as those I have described. We had the assurance of the Parliamentary Secretary to the Board of Trade, when he wound up that Second Reading debate—and I know for myself that he spoke in full sincerity—that the full powers of that Measure will be used with 154 the utmost vigour; and I am sure that, in fact, they will be used with the utmost vigour.
We realise the problem. We have shown our good will to the industry by backing up the Coal Board, and the Government will use the powers contained in the Local Employment Bill, through the Minister of Labour and through the President of the Board of Trade, with whom my right hon. Friend is always in consultation—and my right hon. Friend is a man of deep human sympathies. We know these problems, and we will do everything we can to help where the shoe pinches most—
§ Mr. Arthur Holt (Bolton, West)
The hon. Gentleman has given us a long description of how the Coal Board has gone beyond what might be described as normal commercial policy in incurring costs to keep miners in employment, but would he not agree that the cost of this is properly borne by the Government and that it is quite wrong that the Coal Board should have to carry an extra cost that ought to be carried by the State?
§ Mr. George
The Coal Board laid down its own policy in the full knowledge that it would have to meet the cost. It did not ask for any assistance. It has carried out its own policy, designed by itself and paid for by itself.
As a result of the steps that have been taken, little hardship has been caused. Now, we have the "Revised Plan for Coal," which envisages the industry being stabilised with sales of 200 million to 215 million tons a year. If one examines the details of the plan, which was not made up lightly, but after a great deal of thought and estimating, I think one can be sure that in the period allotted to the plan, until 1965, the unemployment position should never become serious. If handled in the way it has been handled up to now with the assistance of the Board of Trade and the Ministry of Labour, the number of people to be displaced, considering that it is a five-year period and the wastage taking place annually, is not unmanageable provided that the sales forecasts are realised.
By the very nature of man, we are apt to take an over-rosy view in times of prosperity and an over-pessimistic view in times of depression. Our estimates 155 have not been made on hunches. Some people have made estimates on hunches, but our, and the Board's, estimates have been made after taking into consideration statistical trends and market surveys and after full consultation with the consumers over a long period. The hon. Member for Newton said that the forecasts were over-optimistic, but they were made after full consultation with the people who consume the coal. They were made not only by the Coal Board's experts, but by the experts of the Ministry of Power as well. They are not light forecasts and we believe that there is a reasonable chance of the 200 million to 215 million ton mark being reached between now and 1965.
That is the basis of the plan, but to reach the 200 million tons we must, as so many hon. Members have said, have an industry which is efficient in the sense of productivity. As a technician, I want to be allowed a few minutes to say something about productivity and efficiency. In the past, I have been a critic of the Coal Board and its organisation, but it is right that we should give credit when it is due. One of the encouraging features of the industry today is the way in which the output per manshift is rising. The weight of capital investment is undoubtedly playing its part. The output per manshift in mid-1957 was 24 cwt. This year is has risen to 27 cwt., and it is still rising.
These are remarkable improvements, and from the progress made it seems quite reasonable to accept the Coal Board's estimate, which is as thoughtful an estimate as the sales estimate, of 31 cwt. per man shift by 1965, by far the highest attained in this country.
§ Mr. George
In looking into the whole position to discover the factors which have contributed to these results, we find that power loading has been driven ahead—14.6 per cent. of output was power loaded in 1956; whereas 31.2 per cent. is power loaded at present. Progress is being made in shaft sinking and tunnel driving. Definite progress is being made, and I suggest that it is not unconnected with the spur of competition which recently has come into the industry.
156 To get production at reasonable cost and to develop swiftly are very important, but the Coal Board recognises that it must sell its coal. The Board has been criticised during the debate. The hon. Member for Bosworth was hard on the Board. The fact is that coal no longer sells itself. It has to be sold, and a drive has been started. The emphasis is now upon consumer service, on quality and on coal which is properly prepared and delivered at a price which will prevent oil eating further into the Board's territory. It is building up a technical staff so that its relationship with the customer can be improved.
Men are being trained to contact local authorities, architects, consultants and distributors so that the case for coal can be put forcibly and the advance of oil can be checked. I hope (hat the new staff of the Coal Board will go forward as assault troops and not fighting a rearguard action.
§ Mr. George
I am sorry; I cannot give way. My time is very short.
I have been asked about the power stations which have been converted for using coal, and I was asked, if possible, to give their names. Two big power stations which were designed to burn oil will now burn coal. These are North-fleet and West Thurrock. One conversion from coal to oil will not take place; that is a part of Portishead B. Two conversions to oil have been postponed, at Littlebrook B and Brunswick Wharf. These are the stations which are involved in the references made by my right hon. Friend.
Perhaps while I am speaking of power stations, I may take this opportunity of mentioning gas as well. The Gas Council is still experimenting with liquid methane and my right hon. Friend still awaits plans. No plans have yet been made. Experiments are still going on and the gas industry is not committed to building ships of any kind. That is the position today.
§ Mr. George
I cannot give way.
Questions have been asked about oil stocks. Provision is made in this year's Special Services Vote for the supply, storage and distribution of oil stocks. 157 It is not Government policy to give details of such stocks, but one can find the cost in the Vote. The Government pay for stocks held for defence purposes. The Government are, in fact, paying for some of the stocks, but this is no reason for subsidising stocks held by commercial concerns in the course of their own business.
§ Mr. George
It is stretching things a long way to say that coal is held in stock for defence purposes. I did not say anything of the sort. I said that the Government paid for part of the stocks, but the oil industry is also paying for its part of the stocks. I am unable to give the figures. It is quite common for the Government to withhold this knowledge for defence purposes.
I want to turn to one point that has been raised about fuel oil. It has been painted as the enemy of the coal industry and as a source of unfair competition.
§ Mr. George
Certainly, fuel oil is imported. There has been talk about fuel oil being dumped in this country to the detriment of the coal industry. The fact is that we produce more fuel oil at home than we consume every year.
§ Mr. George
I will come to that.
We produce more at home than we use. We send out every year, in bunkers and exports, more than we import. It has been said that fuel oil is being dumped here from Europe. In fact, we are net exporters of fuel oil to Europe. I have been asked why we export and import. Great Britain is part of a vast international complex of oil distribution. It makes sense sometimes for us to export oil from the Mersey to Ireland and import it from the Continent to the Thames.
It has been said that fuel oil is imported at a cheaper price than crude oil. That is so; it has always been true. These are world prices. It has been said that it has been imported at £6 2s. For the first six months of this year Customs declared fuel oil was £6 19s. at the Port of London while crude oil was £8 2s. 158 But fuel oil has to be sold and transported, and the latest published selling price in London is £10 15s. wholesale. That is the wholesale selling price of imported fuel oil which is sold along with home-produced fuel oil. It is not sold at prices less than those of crude oil. The crude oil is not resold at all. It is refined into higher fractions and yields thereby a much higher price.
Concern has been expressed about oil in the balance of payments. I have not time now to analyse it, but oil in the balance of payments is by no means a serious factor. We get crude oil very cheaply because it forms the basis of our petroleum exports and is mainly produced by British companies operating abroad and shipped in British tankers. We get crude oil cheaply and the balance of payments here is not a serious problem at all.
As to the danger of dependence on oil, we have many sources of oil. We are not tied to one source of oil any longer. The Middle East will always be an important source of crude oil supplies, but since Suez many new sources have opened up in Venezuela, the Sahara and Libya. Sources have opened up all over the world. There is a world surplus of tankers. There are 6½ million tons of tankers lying about the world. There is "shut in" production capacity estimated at 100 million tons per annum, so there is little danger of us running short of oil. We are not by any means dependent on one source of supply.
My inexperience has led me to delay too much along the line, but I have tried to answer as many questions as possible. Many questions must remain unanswered now, but I shall, if possible, write to the hon. Members concerned. I have tried to show that the prospects for coal are not nearly as black as painted in some quarters. Diverse views have been expressed this evening, but I believe that there is unanimity on the main basis for the Bill, which is to give increased borrowing powers to the Coal Board to enable it to proceed diligently in its drive towards greater efficiency.
§ Question put and agreed to.
§ Bill accordingly read a Second time.
§ Bill committed to a Committee of the whole House.—[Colonel J. H. Harrison.]
§ Committee Tomorrow.