Clause 1.—(FINANCE FOR REVENUE DEFICIT.)

HC Deb 04 December 1961 vol 650 cc937-1038

3.44 p.m.

The Chairman

It would be for the convenience of the Committee if the first two Amendments were considered together.

Mr. William Warbey (Ashfield)

On a point of order. I could not very well hear, Sir Gordon, whether you indicated which Amendments would be selected, because there was a disturbance in the House.

The Chairman

I suggested that it would be for the convenience of the Committee if the first two Amendments were considered together.

Mr. Warbey

Would that not prejudice the question of the selection of my Amendment, at the end to add subsection (3)?— (3) Notwithstanding any provision in any enactment, the rate of interest charged on any advance made under this section shall not exceed one half of one per cent., and no repayment of any such advance shall be made, except at the option of the Board, before the first day of January, two thousand and two.

The Chairman

The hon. Member's Amendment is not selected.

Mr. Warbey

On a point of order. I find it a little difficult to understand why it has not been selected, because I took some care—

The Chairman

Order. I cannot discuss with the hon. Member the selection of Amendments. If we embarked on such matters our proceedings would be prolonged.

Mr. Warbey

Further to that point of order. There are precedents for submissions being made on the selection of Amendments and for an hon. Member to be given an opportunity to discuss whether Amendments should be selected and whether they are in order. That has been done by Mr. Speaker on other occasions. I ask that you give me the opportunity to explain why I think that this Amendment is in order.

The Chairman

That would not he in accordance with the precedents of the House.

Mr. Gerald Nabarro (Kidderminster)

I beg to move, in page 1, line 11, to leave out "fifty" and to insert "twenty-five."

I am grateful to you, Sir Gordon, for saying that this Amendment should be taken with the Amendment in line 12, at the end to insert: Provided that from any such advances the Minister may recover from the Board any amount of wage or salary increases not directly related to increases in productive efficiency. These Amendments are in the names of a number of my hon. Friends and myself.

In bringing the Bill forward on Second Reading my right hon. Friend the Minister of Power said: This is a short Bill. It is also a temporary Bill."—[OFFICIAL REPORT, 29th November, 1961; Vol. 650, c. 449.] At the beginning of my speech on the same day I said: I find this an unwelcome and most unsatisfactory Bill."—[OFFICIAL REPORT, 29th November 1961; Vol. 650, c. 466.] That illustrates at once the gulf between my right hon. Friend and myself. These two Amendments, shortly expressed, are, first, to bring the National Coal Board back to the House for a further examination of its deficit financing approximately six months hence instead of approximately twelve months hence. The second Amendment is directly associated with the pay pause, which is the Government's declared objective and policy.

My right hon. Friend's reference to a temporary Bill recalls to my mind what was said on 20th November in the course of my Questions to my right hon. Friend and his Answers. I said on that occasion: Is it not a fact that the Coal Industry Bill at present before the House is a further palliative involving merely an extension of the Board's borrowing powers and dealing only with an immediate situation, and cannot my right hon. Friend assure the House that he proposes to proceed in the present Session of Parliament with a major reform of the disastrous consequences of the existing coal industry statutes, and proceed with such reform within twelve months? My right hon. Friend replied: My hon. Friend's judgment of the Bill as it stands is perfectly correct. In other words, that it is a palliative. It is to deal with an immediate situation. There is, as he knows only too well, a fundamental situation which I am now examining. I cannot promise when proposals will be made to take account of that, but I am very much aware of it and of the urgency to deal with it"—[OFFICIAL REPORT, 20th November, 1961; Vol. 649, c. 908–9.] My claim is that the deficit financing of the Coal Board is now running taxpayers very deeply and heavily into the red. On my right hon. Friend's own confession, the deficit or accumulated loss forward of the Board at 31st December next will be about £90 million. Although I do not see the direct relevance of it, my right hon. Friend continued by saying that the internal funds of the Board will probably be about £60 million. Those figures are given in column 450 of the OFFICIAL REPORT of 29th November.

What has aroused my deepest suspicion of my right hon. Friend's financial intentions and motives, honourable though I am sure they are—and I am delighted to have the Patronage Secretary's support on this occasion—are the words which my right hon. Friend has printed in his Financial Memorandum on the front of the Bill; The possibility that this deficit may increase during 1962 cannot be ruled out. As far as I am aware, no financial institution in the City of London would underwrite a debenture issue or similar short-term loan arrangement for a commercial concern which was operating currently at a heavy loss without requiring a detailed statement of the probable outcome of the profit-and-loss account in the ensuing twelve months. That would be inherent in the advancement of money. My right hon. Friends have always said to the House that it is their view that the Coal Board should be run as a commercial enterprise. I therefore say to my right hon. Friend that it is not unreasonable today that I should ask him for further information as to the losses which he expects the Coal Boad to make in the passage of the year 1962.

May I put my first formal question to my right hon. Friend? I want to avoid his having to write down these questions, so perhaps the Parliamentary Secretary will pass this information to the Minister on this piece of paper.

Hon. Members

Order.

Mr. James Griffiths (Llanelly)

On a point of order. I gather that papers are being laid on the Table, Sir Gordon. May I ask whether that is so, and, if it is, whether you will direct that a copy shall be made available to every hon. Member?

The Chairman

I am not quite sure what is being done, but I do not think that papers have been laid on the Table.

Mr. Griffiths

Further to that point of order. The hon. Member for Kidderminster (Mr. Nabarro) has passed a paper to the Minister. If that paper is in the possession of the Minister, it should be on the Table of the House. That is why I ask that it be circulated.

The Chairman

That is not the case.

Mr. Michael Foot (Ebbw Vale)

Further to that point of order. Since the hon. Member for Kidderminster (Mr. Nabarro) has handed the Minister a note of his speech, might not the rest of the Committee be spared the delivery of his speech?

Mr. Nabarro

I congratulate the hon. Member for Ebbw Vale (Mr. M. Foot) on his intervention. Of course, he is quite wrong. All I wish to do is to prevent my right hon. Friend having to take down verbatim 20 questions which I propose to ask him in connection with the Bill. Those questions will be taken seriatim. The first of the questions which I put to my right hon. Friend is—

Mr. Warbey

On a point of order. Is it in order for the hon. Member to read from a prepared speech?

The Chairman

It is in order for an hon. Member to use copious notes.

Mr. Sydney Silverman (Nelson and Colne)

On a point of order. I understood the hon. Member to say, Sir Gordon, that he proposed to ask the Minister 20 questions. I do not know whether he got the model from, but did not Question Time conclude 20 minutes ago?

The Chairman

The hon. Member may make a speech in an interrogatory manner.

Mr. Nabarro

My first question to my right hon. Friend is: how long will the £50 million provided in the Bill last the Coal Board before its funds again run out? The second question is a corollary of the first. If the Amendment which I am moving is accepted by my right hon. Friend and the sum in the Bill were reduced from £50 million to £25 million, which, in accord with my general calculation, would bring the Board back to the House of Commons for a renewal of funds in six months' time instead of twelve months' time, how long would the £25 million last the Board, because the anticipated loss on revenue account may not be at an even rate throughout the period forward which we are covering?

Sir James Duncan (South Angus)

Six months would land us into August, when the House would not be sitting.

Mr. Nabarro

If the rate of loss were exactly even over the next twelve months, the Board would come back to the House for replacement of funds in May, 1962. Nobody knows, however, whether the projected rate of loss is even or uneven. That is why I make the point. My right hon. Friend knows, but he has not yet told the House. I hope that today he will be a little more candid in these important matters.

My right hon. Friend said on 20th November that there was a fundamental situation which he was now examining in the context of the Coal Board. He later admitted the need to put the finances of the Coal Board on a permanently sound basis".—[OFFICIAL REPORT, 29th November, 1961; Vol. 650, c. 451.] My right hon. Friend will recall that in my Second Reading speech, I said to him that that should surely involve a drastic revision of the Coal Industry Nationalisation Act, 1946, which was framed in the first full flush of enthusiasm for nationalisation and State ownership. Circumstances have changed fundamentally during the last fifteen years. The 1st January next, or less than one month hence, will be the fifteenth anniversary of vesting day—1st January, 1947,—for the Coal Board. In those fifteen years, nationalisation has become an unwholesome and a dirty word.

Mr. David Griffiths (Rother Valley)

Not half as dirty as the hon. Member.

Mr. Nabarro

There is not much enthusiasm for Clause 4 of the Labour Party's constitution on the other side of the Committee—not by the Leader of the Opposition, at all events.

The Chairman

Order. The hon. Member is going rather further than the Amendment.

Mr. Nabarro

I would not in any way challenge your judgment, Sir Gordon, but it is impossible to deal with the amount of money under the Bill unless we examine the prospects for a fundamental revision of the head Statute, which is the Statute of 1946.

That brings me to the important question to my right hon. Friend, the third in this series of questions: when will the measure to reform the Act of 1946 be laid before us for drastic reconstruction of the Coal Board? My right hon. Friend has admitted the need for it. Until we know when that is forthcoming—

Mr. S. Silverman

On a point of order. While fully appreciating, Sir Gordon, that Members who make speeches in Committee stages of this kind and on other occasions may legitimately ask Ministers questions relating to the matter under discussion, is it not clear that a great many of these questions have nothing to do with the Bill and, certainly, nothing to do with the Amendment?

The Chairman

It is sometimes difficult to know exactly where to draw the line.

Mr. E. Shinwell (Easington)

Further to that point of order. Do I understand, Sir Gordon, that if some of us wish to follow the hon. Member, provided we catch your eye, and to indulge in what might be regarded as a Second Reading debate, no objection will be taken?

The Chairman

The right hon. Gentleman will have to wait until that situation arises.

Mr. Nabarro

I will pass from the point if it is embarrassing to the right hon. Member for Easington (Mr. Shinwell), who is the culprit of the 1946 Act, and who knows very well that this is effectively a one-Clause Bill and, therefore, the speeches now being made to reduce the amount provided in the single Clause must dwell only on the single consideration in the Bill, which is to increase the Board's borrowing powers.

In his winding-up speech on Second Reading, the Parliamentary Secretary had a good deal to say about the use of the price mechanism by his right hon. Friend in increasing substantially the prices for coal throughout the country. I had asked questions about the revenue expected from that increase in price and I had not received any satisfactory answers. Of course, this has a direct bearing on whether the £50 million called for under the Bill is an excessive sum for additional borrowing powers or is an inadequate sum, because, according to my right hon. Friend, the Board will derive additional revenue in the course of the coming year by putting up the price of coal.

It has been represented that the price of coal will be put up only in Scotland and in Lancashire. That is not so. The price of all coal other than domestic coal is substantially being increased in Scotland. It is substantially being increased in the North-Western Division—Lancashire and North Wales—on the premise that it will do something to diminish the losses of the Board. But prices of coal, notably large coal, throughout the country are also being raised throughout England and Wales, which is a notorious omission from Ministerial speeches on the occasion of Second Reading. In every instance, domestic coal is excluded.

My case this afternoon is that no more coal will be sold by putting up the price. In my judgment, less coal will be sold by putting up the price. The deficit of the Coal Board will be increased, not decreased, by putting up the price. The Minister has postulated that the total yield to the Board from these increased coal prices will be £14 million in a full year, of which £7 million will result from the increases in Scotland, £3 million from those in the North-West and £4 million from those in the rest of England and Wales.

My view—and I am strongly supported by what has occurred in the last two or three years—is that increasing the price of coal will simply lead to a hastening switch to fuel oil. It will sell less coal and it will yield less revenue to the Board. Instead of the £14 million additional revenue which my right hon. Friend says he hopes to obtain by the added coal prices, I believe that his revenue will be substantially diminished.

4.0 p.m.

There are thousands of people today who have been driven, sadly, to the same conclusion and course of action to which I have been driven in the last few weeks. I always used solid fuel in my home—always—as the strongest possible supporter of the Coal Board and through an instinctive love of British solid fuel. I have now switched to fuel oil. [HON. MEMBERS: "Shame."] I am not ashamed, because I cannot afford any longer—

Mr. M. Foot

To pay Surtax?

Mr. Nabarro

—to pay the exorbitant prices being asked for coal and coke as an ordinary domestic consumer. I have gone over to fuel oil because I consider that it will be cheaper.

My case to my right hon. Friend is simply this, that his postulated increase of revenue of £14 million from higher coal prices is a totally false premise, notably in Scotland, where he is doing grave injury to Scottish industry by these increased coal prices. The Parliamentary Secretary said in his speech last Wednesday, replying to the hon. Gentleman the Member for Hamilton (Mr. T. Fraser), that the increased coal prices represented only one-half of 1 per cent. increase in cost. The Parliamentary Secretary used to be an employee of the Coal Board.

Mr. Thomas Fraser (Hamilton)

No, he did not.

Mr. Nabarro

Latterly, he has been a private enterprise manufacturer.

Mr. Walter Monslow (Barrow-in-Furness)

That was a wrong postulation.

Mr. Nabarro

He seems to have for gotten that if we put up the price of coal then, inevitably, the price of gas, the price of electricity, the price of coke, the price of steel, the prices of all manufactures, increase, and that—

Mr. D. Griffiths

Same speech over again.

Mr. Nabarro

—will aggravate much more than help the situation. It is disastrous to put up the price of coal.

My fifth question is: how much extra revenue in 1962 does my right hon. Friend expect from increased coal prices? Is the figure of £14 million attributed to him indeed the correct figure?

My sixth question: does he really think that the Coal Board will sell more coal in 1962 at higher prices, and, if so, how much more coal? Certainly, that is very important in the context of the £50 million asked for in this Bill.

Is it not now clear that the Chancellor's fuel oil duty in his Budget for 1961 was inspired by the Minister of Power as a measure or protection for coal and was the precursor to the increased coal prices which form part of the anticipated revenue on which this £50 million is based?

The second Amendment, which, Sir Gordon, you have now said may be taken with this Amendment, deals, as I said earlier, with the pay pause. This, of course, appears to me to be exactly in consonance with the declared policy of the Government and of the Tory Central Office. The Tory Central Office sends me every week a magnificent document which helps me to make my weekend speeches in the country. It is called "Weekend Talking Point." It is a very good document and I commend it to hon. Gentlemen opposite.

This weekend's document is called, "Why the pay pause is vital." It starts off, in its first paragraph, "Why the pause?" I used this in my speech in Birmingham last Friday evening which, Sir Gordon, you no doubt saw amply reported in the provincial Press. It started off with these words: If pay rises more than productivity then costs and prices must rise. Examine the terms of the second Amendment: Provided that from any such advances the Minister may recover from the Board any amount of wage or salary increases not directly related to increases in productive efficiency.

Mr. Ray Gunter (Southwark)

On a point of order. In view of the fact that the bon. Member is talking on the general lines of the pay pause shall we, Sir Gordon, be allowed to discuss in full the general principles which lie behind it?

The Chairman

It may be discussed—not at length, I hope—as it applies to the Coal Board, but must be confined to that.

Mr. Nabarro

I did not hear, Sir Gordon.

Mr. Gunter

The hon. Gentleman did not confine himself to the Coal Board in his opening remarks. What I want to know is whether we shall be allowed to reply.

The Chairman

The Amendment applies to the Coal Board and the discussion must as far as possible be related to that.

Mr. Nabarro

When I was interrupted by the point of order I was, of course, coming straight to the Coal Board.

The two quotations I made were linked. My next quotation is from the front page of the Sunday Times. Does the hon. Member for Barnsley (Mr. Mason) wish to interrupt me?

Mr. Roy Mason (Barnsley)

Only to remind the hon. Member that he said he would inform the Committee of the contents of the Tory Central Office weekend pamphlet. We were waiting to hear those words.

Mr. Nabarro

I quoted from it. The hon. Member could not have been listening to me. I have already quoted from it.

Mr. S. Silverman

Quoted from it?

Mr. Nabarro

Yes, I quoted the first sentence. I will send the hon. Gentleman a copy for his own education and guidance.

The front page of the Sunday Times, in the context of the Coal Board and the pay pause, printed under the headings: Miners hit by pay pause. Robens delays talks. these words: Lord Robens, Chairman of the National Coal Board, will tell the National Union of Mineworkers this week that he cannot meet them till next year to discuss their claim for higher wages and shorter hours. By doing so he will give an enormous if unwitting boost to the Government's pay pause policy. His decision, the most important over pay since the Electricity industry capitulation. shocked miners' leaders when I told them. That seems to me to be very much in connection with this Amendment, and it leads me to put my eighth question to my right hon. Friend, and it is this. In view of the statement made by Lord Robens to the Sunday Times, what further clarification of the pay pause has my right hon. Friend now given to Lord Robens? I hope that he will inform the Committee closely today, because I, for one, am in a muddle about the pay pause. I believe in a real pay pause, as I demonstrated in my Second Reading speech when I pointed to the Motion on the Notice Paper of the House signed by more than thirty hon. Friends of mine and myself.

I want to ask my right hon. Friend, therefore, the ninth question: did he support Lord Robens in saying that he cannot meet the miners till next year to discuss higher wages and shorter hours? That has a direct bearing on the amount of money which the Board will want from my right hon. Friend to conduct its affairs.

Mr. Shinwell

On a point of order. Would you be good enough, Sir Gordon, to elucidate this point for me and, no doubt, other hon. Members who are concerned? What exactly in the Amendment is related to the pay pause?

The Chairman

The Amendment refers to any amount of wage or salary increases".

Mr. Shinwell

But does the Amendment relate to the pay pause?

The Chairman

It is up to the hon. Member to show whether it does or not.

Mr. Nabarro

I should have thought it axiomatic, if English words have any meaning at all, that this Amendment is related to the pay pause. That is certainly my intention. I did not think that "pay pause", as a term, would be correct to put on the Notice Paper. Therefore, I framed my Amendment in slightly different if more copious terms.

Mr. Warbey

On a point of order. The Amendment does not seem to be related to the pay pause, because it talks about wage or salary increases as related to increased productivity.

The Chairman

That is a matter of opinion rather than a point of order.

Mr. Warbey

I submit, Sir Gordon, that it does not relate to the pay pause, that is to say, to a complete stop of wages increases, which has nothing to do with the question of wage increases relating to increases in productivity.

The Chairman

That is a matter of debate and opinion.

Mr. Nabarro

I endeavoured to demonstrate to the hon. Member exactly what is the Government's interpretation of the pay pause in the quotation which I read shortly before I alluded for the first time to this Amendment.

Mr. S. Silverman

But that was the Conservative Central Office.

Mr. Nabarro

The Conservative Central Office is subject to the whim and dictate of Her Majesty's Government. [HON. MEMBERS: "Oh."] My right hon. Friend the Leader of the House is also chairman of the party. He is listening to me, grinning broadly. Of course he knows that the Conservative Office policy is closely in consonance with that of Her Majesty's Government. The definition given this weekend by the Conservative Central Office to the pay pause was in the words which I have related, and they are so directly concerned with the Amendment that I hope that I shall be allowed to repeat them: If pay rises more than productivity then costs and prices must rise. That is exactly what the Amendment says.

Mr. Shinwell

On a point of order. May I draw your attention, Sir Gordon, to the terms of the Amendment, which reads: Provided that from any such advances "— that is, from the £50 million or £25 million as the case may be— the Minister may recover from the Board any amount of wage or salary increases not directly related to increases in productive efficiency. It is related to the question of productive efficiency and has nothing to do with the pay pause.

The Chairman

That is the point that the hon. Member for Kidderminster (Mr. Nabarro) is on.

Mr. Nabarro

I now put my eleventh question to my right hon. Friend. Does the Minister accept the principle of increased pay for increased productivity, and, if so, on an individual basis, or on a collective basis for the whole industry? This is associated directly with my twelfth question, which is inspired by an intervention by the right hon. Member for Llanelly (Mr. J. Griffiths) on Second Reading, concerning miners' arbitration. It is very apposite to the matter of the sums advanced to the Board under the Bill. Does my right hon. Friend accept the sanctity of an arbitration award and, if granted, does he intend that moneys under the Bill shall be used for the extra pay?

I believe that the pay pause means that if productivity goes up then pay may go up, but if productivity does not go up pay must not go up. It is as simple as that, but I am not sure that this is the interpretation placed upon it by my right hon. Friend the Minister of Power. As in the mining industry arbitration on wages is compulsory arbitration and an award has always been binding, and if an award were made the moneys would have to be found from within the moneys voted under the Bill, it is not illogical that I should ask my right hon. Friend to give very careful attention to the twelfth question when he replies to me.

On Second Reading, there was a good deal of talk about coal stocks. Those who have studied the recent Statistical Digest of the Minister of Power will have seen that there were 22 million tons of undistributed coal in the hands of the Coal Board worth an indeterminate sum. No one has any idea what the inventory value of the stocks is supposed to be, what has been the degradation in the last three years since they were put down—and many of them have not been turned over in that time—or what they could be sold for today, if they could be sold at all. This leads to my thirteenth question. What is the planned reduction of coal stocks in 1962 and what cash will result from such sales to swell the Board's finances?

The fourteenth question, linked to it, is: what is the inventory value of these 22 million tons of coal and how much loss or otherwise will be made on coal stocking during 1962? I apologise to my right hon. Friend for the fact that there is a typographical error in his copy of this question. The date should be 1962, not 1961. I hope that he is now marking the right question. The fifteenth question is this: does any part of the additional borrowing of £50 million relate to the costs of stocking coal, or losses on sales of stocks of coal, and if so, how much?

4.15 p.m.

There is a good deal of uncertainty in considering the Bill and the £50 million in Clause 1—which I seek to reduce to £25 million in order to charge the Board with more frequent accountability to Parliament—in connection with the sums of capital investment by the Board. It has been announced that the capital investment programme of the Board for 1960–61 will be £94 million. In 1961–62, it will be £97 million and in 1962–63 it is said that it will be £95 million. The grave allegation is made by the hon. Member for Bothwell (Mr. Timmons) that there are heavy wastages associated with capital investment in Scotland, which have so aggravated the Scottish branches of the National Union of Mineworkers that they are today demanding a public inquiry into these losses before further pits are shut.

In view of the massive character of the capital investment sums, I want to ask question sixteen, which is: how much of the extra £50 million under the Bill is for capital development account, and what will be the rate of interest charged in relation to the Bank Rate? This is particularly important in view of the sad misfortune of the hon. Member for Ashfield (Mr. Warbey), who cannot get his Amendment called, because the interest rate of financing to the Board and its relation to the Bank Rate is of as much interest to him as it is to me, although I do not necessarily share his financial philosophy in this respect.

My seventeeth question also deals with capital account and asks what sums on capital account is the Coal Board finding out of its own resources in 1962, and how much is to be borrowed? The eighteenth question arises from allegations made by the hon. Member for Bothwell. He is a Socialist Member, but he could not have been more derogatory about the conduct of affairs by the Coal Board in Scotland, than he was on Second Reading.

The eighteenth question asks my right hon. Friend: does the Minister propose to yield to the very justifiable demand of Scottish mineworkers and Socialist Members in Scottish seats for an inquiry into the failures of the Coal Board in Scotland and if not, why not? I am not a Scottish Member—

Mr. Shinwell

Scotland would not have the hon. Member.

Mr. Nabarro

Judging by the number of requests from north of the Border to address weekend meetings, I should think that I have as much right to go to Scotland as the right hon. Gentleman.

Mr. M. Foot

Now that they know that the hon. Member has a brief from the Conservative Central Office they will not want him.

Mr. Nabarro

But it is not a brief.

The Chairman

Order.

Mr. Nabarro

I will deal with the hon. Member for Ebbw Vale (Mr. M. Foot) elsewhere.

I say, in conclusion, to my right hon. Friend the Minister of Power that the nineteenth and twentieth questions are the most important of all. The nineteenth is a reiteration of a question which I put to him on Second Reading and to which the Parliamentary Secretary artfully dodged the reply. Is the nationalised coal industry to be run as a social welfare service or as a commercial concern? This question is fundamentally associated with these two Amendments. The twentieth and last question I put to my right hon. Friend—and I ask him to give me a convincing and conclusive reply—is this: when will the Coal Board begin to earn a profit?

The Minister of Power (Mr. Richard Wood)

Before the 20 questions fade from my memory, I would like to give an opinion on them. I will be only too delighted to answer them seriatim, but not on this occasion.

As my hon. Friend the Member for Kidderminster (Mr. Nabarro) will know, I was first for Oral Questions last week, and I would have been delighted to answer all his questions if he could have persuaded nine other hon. Gentlemen to join him in putting them down. I will certainly give him answers, but I would not like to prolong the debate, in which other hon. Gentlemen want to take part, by answering seriatim at the present time.

The debate has been introduced in what I believe we all thought was a wide-ranging speech. You, Sir Gordon, have said that it was all in order. It is my defence for ranging rather less widely that I hope I can answer my hon. Friend's points by confining myself rather more narrowly than he did.

During the Second Reading debate, I did my best to explain the purpose and the justification of the figure of £50 million which occurs in the Bill. I explained that its purpose was to bridge the gap between the total accumulated deficit and the Board's internal funds available to cover it. I also explained that this gap could vary according to movements either in the internal fund or in the deficit. I then went on to try to justify the figure of £50 million by estimating the likely size of the gap at the end of this year and by foreshadowing the probability of its continuance into 1962.

I used the words to which my hon. Friend has already referred. I said: At the end of this year, the Board's internal funds will probably be about £60 million, and the accumulated deficit is likely to be rather over £90 million."—[OFFICIAL REPORT. 29th November, 1960; Vol. 650, c. 450.] My hon. Friend will appreciate that there is very little time left in this year for these prospects to change. I think that from today we have only 27 days, including Sundays, left in 1961. Therefore, the possibility that it is £25 million and not rather more than £30 million which is to be needed is, to put it mildly, exceedingly remote.

It may be suggested that the Board could borrow from the banks under the temporary borrowing powers of £20 million provided by Section 27 of the 1946 Act, but I have already explained that the Board is not a regular customer of the banks because it happens to borrow from me to meet day to day needs under Section 26. For these reasons, it was unable to borrow from the banks at the end of last year, and in the present conditions of increased credit stringency it is clear that the Board would not be able to do so this year.

I conclude this part of the argument against the suggestion that the figure should be £25 million instead of £50 million by saying that there is no way in which the Board could finance its likely gap in 27 days' time of rather more than £30 million other than by the provisions of this Bill. If £25 million were substituted for £50 million, I would not be able to continue to meet the day to day needs which are going to be evident in 1962, and it is an essential part of the Bill that it contains a provision for next year.

Therefore, the first Amendment would not only remove the marginal provision for 1962 but would also, for reasons which I have given, make the provision inadequate for the needs of 1961 as well. In this way, as I hope my hon. Friend will agree, the Amendment would frustrate the whole purpose of the Bill, which he himself supported on Second Reading. Therefore, I would like to ask him, in due time, whether he would be willing to withdraw the Amendment.

I now turn to the second Amendment which my hon. Friend embraced. I have already said that the Government seem likely, under the Bill, to advance something over £30 million to the Board at the end of this year. If the Board, sometime between now and the end of next year, granted a wage or salary increase, in the words of the Amendment, . not directly related to increases in productive efficiency the effect of this Amendment would compel me or my successor to recover from the Board the sum by which the increase was supposed to exceed the increase in productivity.

My hon. Friend specifically said that his second Amendment was aimed at the maintenance of the pay pause. I want to point out that, although I am sure the Amendment has that intention, I am bound to take the view that the Amendment as on the Notice Paper would, in itself, do nothing to preserve the pay pause.

I have already said before how important I regard the maintenance of the pay pause, and certainly, whatever follows the period of the pay pause, conformity of wages and salaries, on the one hand, with increases of productivity, on the other, will be an essential tenet and objective of British economic policy. Therefore, I can willingly give assent to the idea expressed by my hon. Friend in the Amendment—that wages and salaries should not rise out of proportion with the increase in productivity.

The Amendment, however, would not achieve this object. It would not preserve the pay pause, because it clearly carries the implication that the Board could grant increases at any time if based on improved productivity. If the Government accepted the Amendment it would not, I think, be unnatural to draw the inference that the Government would have no objection to increases in wages being granted at once if the necessary conditions of increased productivity were fulfilled.

That, of course, is not the Government's position. The Government attach the greatest importance to the maintenance of the pay pause, and they believe that there should, for the time being, be no increases at all. I would also emphasise the difficulties that would arise from an attempt to write a formula of this kind into the wage negotiations between the Board and the unions. The essential yardstick against which my hon. Friend suggests that wage claims should be judged is itself rather uncertain, because it is very difficult to be quite certain of what exactly is meant by increases in productive efficiency. For instance, if output per man shift went up from 30 to 32 cwt., would that be an increase in productive efficiency of one-fifteenth or 6.7 per cent., or are there other factors which should be considered?

During the Second Reading debate, I pointed out that output per man shift in the first three-quarters of 1961 had increased by 2½ per cent. That was before the larger increase I mentioned later. I pointed out that this was insufficient to offset increased costs, and, therefore, if increases in productive efficiency are equated with improvements in output per man shift, an Amendment like this one might do nothing to prevent the Board from offering increased rewards even out of declining revenue. This is an argument against the inclusion of this particular formula in wage negotiations.

Mr. Nabarro

My right hon. Friend has made a very important statement. He has given me exactly the form of clarification which I have been trying to obtain for a long time. What he is now saying is that in the context of the Coal Board it is not a pay pause, but a pay freeze; it is the Arctic: there must not be any increases in wages or salaries in any circumstances.

4.30 p.m.

Mr. Wood

I may be able to remove any doubts which linger in my hon. Friend's mind before the end of my speech, because I have argued so far against the inclusion of any particular formula of this kind in the wage negotiations, but I will try to explain—adding to my explanation of last week—the more general reasons why the inclusion of any formula would be undesirable.

In the debate last week, I told the House, my hon. Friend the Member for Kidderminster included, that I had taken steps to make the Government's present view perfectly clear to the Chairman of the National Coal Board. On that occasion, I took particular care to avoid confusing the responsibilities of the Government, on the one hand, with those of the Coal Board, on the other. From what he said in the debate last week, I think that my hon. Friend the Member for Kidderminster takes the view that it would be legal for me to issue directions to the nationalised fuel and power industries which would be general in form even though they would be clearly aimed, in the circumstances of today, at wage claims which have already been presented.

I will not argue this rather delicate legal question with him. My grounding in the law is rather less thorough than his seems to be, but my information is that the legality of any such direction would be very, very dubious, indeed. Perhaps that is not the main point because, whether or not I now have power to issue general directions of this kind, it would certainly be possible for me, in theory, to ask Parliament to give me those powers. But the essential point seems to be that whichever alternative I adopt—finding that I already possess the power and deciding to make a general direction, or asking for new powers and then doing so, or—and this is the point particularly related to this Amendment—by means of an Amendment such as this, attempting to place statutory restrictions on the amount of any wage increase which the Board could concede, I am convinced that the result in all three cases would be the same and that the ultimate responsibility for wage negotiation would then be transferred from the Board to the Minister.

In a statement which he made last week, Lord Robens used these words: If, in fact, I had been instructed as to my course of action, then I would have had to inform the Union accordingly and I have no doubt that they would then want to transfer their negotiations to the Government. I understand and wholly share my hon. Friend's anxiety that the pay pause should be maintained. I spoke to hon. Members frankly last week about the advice which I had already offered to Lord Robens, and I added that I was perfectly sure that he understands the Government's point of view.

Mr. J. Griffiths

This is vitally important. We must get it absolutely clear. As the right hon. Gentleman knows, in the coal mining industry there is an agreement governing negotiations and the settlement of wage claims. The National Union of Mineworkers is entitled to put forward claims for increases in wages. Those claims may be rejected by the Board for all kinds of reasons, and not just because of a pay pause. In that case, however, the men are not only able, but are obliged by their agreement, to submit their case to arbitration and to accept the arbitration. In giving directions to the Chairman of the Board, has the Minister said that applications for wage increases must be refused and that the Board must also refuse to have claims submitted to arbitration?

Mr. Wood

No, I am not saying that. The whole burden of what I have been trying to say is that negotiations must take place between the Board and the unions. I conceive it to be the Government's responsibility and my responsibility to make clear to Lord Robens and the Board exactly what the Government's views are and then, as I have been trying to make clear, it is up to them, not the Minister, to undertake negotiations in the light of the Government's advice.

Mr. Gunter

We ought to get this very clear. If the National Union of Mineworkers gets a "No" from the Coal Board and then voluntarily proceeds to arbitration—it is not bound to do so—and the arbitration court awards the union something, what will the Minister do?

Mr. Wood

The position is that the normal procedure for negotiation will take place. All I will continue to do is to make perfectly clear to Lord Robens exactly where the Government stand. If it should come—and that is a very long way in the future—to a question of arbitration, that is certainly hypothetical and it is a question which it is impossible for me to answer now.

Last week, I referred to the special circumstances of this industry, which is dependent on Exchequer support to meet current losses. I concluded, as I have tried to point out again today, that it would be wrong to attempt to transfer from the Board to the Government responsibility for wages and conditions in the coal industry. Just because an Amendment of this kind would have that effect, and because the transfer of re- sponsibility in this case would have far-reaching and undesirable consequences, both for the nationalised industries and probably over a wider range, I hope that in due course my hon. Friend the Member for Kidderminster will be willing to withdraw the Amendment.

Mr. Nabarro

This is the first time that we have had to discuss deficit financing of a State board. When a State board is heavily "in the red", as the Coal Board is, if there is an increase in wages it can be paid only out of moneys voted by Parliament. Therefore, how can my right hon. Friend piously say that it is wrong for Parliament to be involved in wage negotiation matters when it is the taxpayers—not the Coal Board—who are being expected to underwrite these losses and to provide additional moneys for any wage increases in the industry? It is that which my right hon. Friend has completely failed to answer.

Mr. Wood

I think that I have already made the position perfectly clear. The Amendment would place restrictions on the negotiations between the Board and the unions and would have the effect of transferring responsibility for negotiations from the Board to the Government. That is a situation in which we do not want to find ourselves.

Mr. Nabarro

I do not agree.

Mr. Shinwell

In his reply, the Minister has elevated this debate into one of considerable importance, which transcends the irresponsible ravings of the hon. Member for Kidderminster (Mr. Nabarro). Since the hon. Member came to the House, he has engaged in a malicious vendetta against the National Coal Board.

This is a democratic assembly and and every hon. Member, even a right hon. Member, has a right to express himself, but a vendetta is quite a different story. After listening to the hon. Member's speech in the Second Reading debate the other day, and again today, it seems to me that if that is how he feels about the Coal Board—and, of course, we know how he feels about nationalisation in general and the nationalisation of the coal industry in particular—why does he content himself with frivolous Amendments of this kind? Why does not he, with his hon. Friends who support him—there are not many of them, but there are some—

Mr. Nabarro

There are quite a lot.

Mr. Shinwell

—put a Motion on the Order Paper calling upon the Government to depart entirely from the nationalisation of the coal industry, to abandon the scheme altogether, and revert to private ownership? If he did that—

Mr. Nabarro

Does the right hon. Gentleman want an answer? I am privileged to be allowed to answer the architect of the Coal Board in the matter of coal nationalisation. The answer is very simple—because nobody would buy a coal mine after it had been through the right hon. Gentleman's nationalising hands.

Mr. Shinwell

I leave it to hon. Members to form their own view about the refinement of that intervention.

Mr. Nabarro

It was a very good one.

Mr. Shinwell

I would tell the Committee—I hope that this will not be regarded as a mere digression—that if the hon. Member wants to indulge in abuse, let him be assured that there are words in my vocabulary which I have never used yet; I am accustomed to dealing with merchants of his character. But that is not the purpose of this debate, and I will not allow myself to yield to temptation.

What we are concerned with at the moment, at any rate, apart from what the hon. Member for Kidderminster said in the course of his presentation of "Twenty Questions", is the very important declaration made by the Minister in relation to the wage issue which confronts the coal industry.

I do not know whether the right hon. Gentleman is aware of two factors in this situation. One is—and I was responsible for it when preparing the legislation for the nationalisation of the coal industry—that the whole purpose of appointing a corporate body, the Coal Board, instead of investing the Government with responsibility for administration, was to allow the Board, in conjunction with the representatives of the workers of the industry, through negotiation, through consultation and through arbitration, to decide the rate of pay for the men, and to ensure that there should be no Government interference whatever.

I admit that there was a time in the history of the industry when Ministers interfered; for example, when I was Parliamentary Secretary to the Department of Mines, away back in 1924, it was myself, and not the then Minister of Labour, who was responsible for conducting the negotiations with the coal owners, and a decision was reached for which the coal owners and I bore the responsibility. But we departed from that system entirely when we prepared the Coal Industry Nationalisation Act.

I want to tell the Minister this: he has no power of direction in respect of wages—none whatever. The legalistic experts, with all their forensic knowledge, may come along and argue the matter, but the prime factor of the situation is that a Minister associated with a nationalised industry has no right to interfere in wage matters.

The right hon. Gentleman seems to have departed from that principle. He dissents, but I must direct his attention to his declaration. What he has said in effect is this—I am speaking on behalf of the right hon. Gentleman, "I saw Lord Robens, the Chairman of the National Coal Board, and I told him what the Government's policy is. I directed his attention to the wage pause and the economic situation in the country, and I indicated that it would be unwise if there were a general increase in the rates of pay of the men in the industry." I do not think the Minister had any right to do anything of the sort. It is a matter for the Coal Board and those engaged in the industry through the ordinary process of arbitration.

Mr. Wood

On the last occasion on which we debated this subject, I used words very similar to the ones I have used today, that I had made Lord Robens perfectly clear about where the Government's wishes lay in this matter. In winding up the debate the right hon. Gentleman's hon. Friend the Member for Hamilton (Mr. T. Fraser) said that he felt that there was nothing exceptionable in anything that I had said.

Mr. Shinwell

I am not responsible for what my hon. Friend the Member for Hamilton (Mr. T. Fraser) said. I understand the Act of Parliament, and I place my own interpretation upon it, and I deny—I say this with very great respect to the right hon. Gentleman, for whom I have very much regard—the right hon. Gentleman's right to interfere in any matter pertaining to wages. It is no use denying the fact that if the right hon. Gentleman says to the Chairman of the National Coal Board, "You have got to be exceedingly careful. You must not do this, and you must not do that, or else something will happen", clearly he is intervening in a matter which is not his prerogative. In addition, it embarrasses the Chairman of the Coal Board and the unions concerned.

But what is likely to happen? Lord Robens has said—I read what he said as reported in the Press—that he is not taking his instructions from the Minister. That is what he has said, and we may believe it, but he will have to concern himself very shortly with a demand—indeed, I believe that it has already been presented—for an increase in the rates of pay for a very large number of men in the industry.

What is Lord Robens to do? He will have discussions, there will be consultations, there will be negotiations, and the matter will go to arbitration, and an award will be issued. Presumably, some increase will be suggested. What is Lord Robens to do—go back to the Minister and say, "Shall I pay this increase?"? Consider the dilemma which confronts the Minister. He is likely to be impaled on both horns. First, he has to consider the delicate position of the industry. Secondly, he has to consider the Government's declaration about the wage pause. It is a very embarrassing position all round. It would be far better to leave the Coal Board to mind its own business.

I want to depart from that, although I think it is very—

4.45 p.m.

The Temporary Chairman (Sir Herbert Butcher)

This may be a point where, perhaps, the right hon. Gentleman will approach more closely to the Amendment.

Mr. Shinwell

With great respect, Sir Herbert, this matter arose before you undertook your present responsibility in the Chair.

Mr. J. Griffiths

We have been allowed to go very wide.

Mr. Shinwell

Sir Gordon, who preceded you in the Chair, Sir Herbert, was questioned precisely on this point, because the hon. Member for Kidderminster raised the question of the wage pause, and the Minister has replied to that question. At any rate, I do not intend to proceed any further along those lines. I believe that it is a matter which has to be very carefully considered, particularly by hon. Members on this side of the Committee who represent the mineworkers of the country. I have not the least doubt that this will be taken note of by the National Union of Mineworkers.

I merely want to add this. Let it not be forgotten that there are a vast number of mine workers whose wages are at a very low level indeed. I represent on of the largest mining constituencies in the country, and there we have piece workers who earn reasonably good wages when they get good places in the pit. They have to ballot for them: sometimes they are good and sometimes they are bad. That is the custom in Durham—

The Temporary Chairman

I trust that the right hon. Gentleman will not widen the discussion.

Mr. Shinwell

I just want to add a point which bears on the matter under discussion and relates to the second Amendment in the name of the hon. Member for Kidderminster. There are at least 200,000 men in the industry whose wages are about £10 a week, and who, after the statutory deductions, and so on, have been made, are left with about £9 a week. It is not enough. We must not complain if these men make demands.

The hon. Member for Kidderminster said coal mining should be a commercial venture. I agree. That was the original purpose of setting up the Board. It was expected that the Board would pay its way, taking one year with another. However, no one was in a position to anticipate the difficulties which would be encountered by the Board, and nobody ought to impute any blame to any of its chairmen over the years—Lord Hyndley, Sir Hubert Houldsworth, Sir James Bowman and Lord Robens. They are all capable men, and they have been supported by the best mining engineers and experts in the industry.

Let us consider the difficulties the Board has been up against. It has had to import coal from other countries and pay for it, thus increasing its deficit. In addition—and this has a bearing on what the hon. Member for Kidderminster said—it has never been able to charge economic prices for coal. If it had, the industry would have paid its way. What does the hon. Gentleman mean by "economic" prices?

Mr. Nabarro

Exorbitant prices.

The Temporary Chairman

Order. I hope that the hon. Member for Kidderminster (Mr. Nabarro) will kindly either rise in his place if he wishes to speak, or keep quiet.

Mr. Nabarro

I rise at once, Sir Herbert. What I was saying was meant to be sotto voce. I was saying that the price of coal today is exorbitant, and that putting it up further will not sell any more. It will sell less.

Mr. Shinwell

Coal prices in this country are as low as those in any other part of Europe. Does any hon. Member wish to challenge that statement?

Mr. T. H. H. Skeet (Willesden, East)

That is not the case as regards coking coal. Since 1953, there has been a 59 per cent. increase in the United Kingdom compared with an increase of about 16 per cent. in the Saar and the Ruhr.

Mr. Shinwell

Everyone knows that the price of coking coal is high because it is scarce. If there is a scarcity, naturally the price goes up, or am I to teach the hon. Gentleman capitalist economics?

If the Coal Board decided that from the beginning of next year it would charge an economic price for coal, the price would not be very much in excess of the prices ruling in the coal producing countries in Europe, apart from the price of German, and perhaps some Belgian brown coal. That is because brown coal is easily got, to use a mining expression. The Coal Board does not raise its prices, partly for the reason stated by the hon. Member for Kidderminster—the fear of competition from other forms of fuel.

What is the Board to do? Let us by all means have a commercial venture, but one cannot run the industry on a commercial basis unless one raises the price of coal, or reduces the wages of the men working in the industry, or closes a number of pits and reorganise at great expense. But the last named is just what the Board has done over the years, and by means of loans—not gifts—from the Government which it has had to refund at high rates of interest.

Sir William Robson Brown (Esher)

The right hon. Gentleman suggested that the only thing to do was to raise the price of coal. Will he be specific and say which grades of coal he has in mind, and what effect this would have on the industry?

Mr. Shinwell

The hon. Gentleman did not listen to what I said. I said that we could raise the price of coal, or reduce the wages of the men, or continue closing pits which the Board regarded as uneconomic, thus throwing out of employment large numbers of men and creating a social problem.

Sir W. Robson Brown

Answer the question.

Mr. Shinwell

It does not become anybody associated with private enterprise to boast about these matters. Almost every day one reads about the financial deficiencies in privately-owned industries. If the price of coal were raised, it would have an effect on the steel industry. I believe that the hon. Member for Esher (Sir W. Robson Brown) is associated with this industry. He recently wrote a book about it. I did not think that it was a good book, but, fortunately, I did not buy it. I read it only because it was sent to me. If the steel industry had been compelled to pay an economic price for its coal, the Coal Board would not now be faced with this large deficit.

If we talk about an industry being a commercial venture, we must consider the consequences of what that means. The hon. Member for Kidderminster said that the industry was not a commercial venture; that it was not paying its way; that it came to the Government time and again for financial assistance; and that it could not get the money it required in the City of London. We all know the reason for that. The hon. Member also asked whether it was a social institution, based on the principle of social welfare.

There is not an industry in the country which does not cater for the social well-being of the people. To take one example, consider transport in the London area. Millions of people could not travel to London and carry on their vocations if it were not for the railway system which is not paying its way, and there are examples of social welfare all round us—family allowances, and so on. This is necessary because wages are not good enough.

I ask the Minister to disregard what was said by the hon. Member for Kidderminster. During the Second Reading debate the other day, at the end of his speech, in a peremptory fashion which is; characteristic of him, the hon. Member called on the Minister to resign. The Minister seems to have taken no notice of that, although I noticed that in his speech this afternoon he made some reference to his successor. I do not know whether that means that he is going to another place, but, at any rate, he paid no attention to the hon. Member for Kidderminster, and I ask him to pay no attention to him in the future. The hon. Member is just having fun and games. He is indulging in his customary mischief.

Mr. Nabarro

Order.

Mr. Shinwell

Some time ago I said that in private life the hon. Member is not a bad fellow, but in public he is a blatherskite. In private he is affable, genial, and, I believe, quite a generous person—although I have not had to avail myself of his generosity—but in public it is otherwise. I ask my hon. Friends, the mineworkers and the Board not to pay any attention to the hon. Member. But this is a free and democratic assembly. Let the hon. Gentleman talk. Let him rave. It does not matter in the least.

5.0 p.m.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)

I am satisfied with, and accept, my right hon. Friend's explanation on the first Amendment. However, there is doubt about the meaning of the words in the second Amendment. My hon. Friend the Member for Kidderminster (Mr. Nabarro), my right hon. Friend, and I, have all put different interpretations on them. I felt that it was entirely to do with the pay pause but, as the right hon. Member for Easington (Mr. Shinwell) has said, the field has been widened to cover the whole machinery of wage increases in the nationalised industries.

There is a very real problem here. As the right hon. Gentleman said, the Minister has absolutely no power in this matter. I am willing to accept his advice that it would have been illogical for him to have issued a general directive in the matter. The right hon. Member for Easington pointed to many of the flaws in his own nationalisation Statute, which started this all off. He has previously publicly stated his views in connection with the wage claim submitted by the National Union of Mine-workers. He has stated them again today, and I am grateful to him for going as far as possible to meet the purpose of the Amendment, which is to try to give this complicated issue a little public discussion. I am not against an increase for mineworkers, based on productivity or upon the needs of the commercial activities of the Coal Board, at any time as soon as the pay pause is finished, but in the meantime we must stick to it.

We cannot blame the Minister. He has no need to resign. The responsibility in this matter rests fairly and squarely on the shoulders of the Chairman of the Coal Board. That is where it has been placed by Statute. The Chairman's position is becoming extremely unenviable. He is between an immoveable object and an irresistible force. On the one hand, he is faced with my right hon. Friend's declared intention and with the Government's statement of policy, in the national interest. He must face a shortage of cash—a deficit approaching £90 million—and also the whole weight of public opinion in support of the pay pause. On the other hand, he is probably short of some classes of labour in some districts, he must keep his organisation going, and he is under very heavy pressure from the National Union of Mineworkers.

If my right hon. Friend gives in he will give a twist to the inflationary spiral, against the national interest and against Government policy. But it is very much in his interests to give in. The forces acting upon him to give in are very much stronger than those acting on him to resist. He can ask the House for more money, as the Minister is asking for more money in the Bill. He has no shareholders or bankers to prevent his paying out extra money and incurring a bigger deficit.

In fact, the Government are asking Lord Robens to become excessively mixed up in politics by placing him in this position. They arc asking him to stand firm and are putting every possible moral pressure on him to do so, but they are giving him absolutely no economic motive to do so. There is no reason why he should resist demands, in a business sense. It is economic pressure that makes the pay pause work.

I want to compare the Coal Board with various other sectors of the economy. The Government have complete and direct control over the public employees in their service. They can literally fix their wages at whatever level they like. They have the situation entirely under their control. In the private industry sector, by using economic regulators—increasing the credit squeeze or altering the Bank Rate—they can disastrously affect the future of private companies, lower the level of business activity and create a climate in which people cannot afford—

The Temporary Chairman

The hon. Member must not engage in an economic survey on this Amendment.

Mr. Ridley

I return to the Coal Board. There is no economic motive to make the Chairman resist this wage demand. The Board has no shareholders or bankers, with the possible exception of the House. That is why it is right that we should debate the matter and discuss whether we are prepared to go on financing the Board and persuading our constituents that the taxes levied on them are fair for this purpose.

This built-in interest towards inflation makes the position of the chairman of a nationalised industry such as this an extremely difficult one. At some stage the Government must try to solve this problem. I do not suggest that in this debate we could talk about long-term solutions; we are now concerned with the pay pause, which is a small and temporary matter, but one of vital importance to our economy. Hon. Members opposite are quite sincere in their opposition to it. That means, in effect, that they have a sincere desire for a return to inflation and devaluation. That is why I sought to put my name to the Amendment and help in its drafting. I believe that it will give the Minister a more direct responsibility to take Lord Robens out of his present difficult position, and give the Minister the gentlest power to take upon himself responsibility for the policy of the Chancellor.

I am glad to say that my right hon. Friend has gone a little further than he went previously. I am glad that we have had some publicity in the matter. I hope that my right hon. Friend will not only consider whether the Amendment is well meant—although extremely badly drafted—but will also realise that a long-term problem is involved, and that there is no economic motive for the Coal Board's heeding what the Government are trying to do economically. This is a problem worthy of a solution. I am sure that the right hon. Member for Easington agrees.

Mr. J. Griffiths

By rising now I do not wish it to be taken as a sign that the debate should end. Before you took the Chair, Sir Herbert, the hon. Member for Kidderminster (Mr. Nabarro) ranged far and wide in moving the Amendment. He raised the question whether the coal mining industry should be publicly or privately owned in future. At this stage, I do not intend to trespass upon your kindness to discuss that, except to say, since the hon. Member mentioned it, that I would be very happy if the House could debate this question on a Motion that was acceptable.

I have spent a good part of my life in the mining industry. At the end of two wars we have had to face the problem of its future organisation. At the end of the First World War we had the Coalition Government, composed of members of the party opposite and some liberals. In those days I was an officer of the National Union of Mineworkers, at local level, and the Government told us "We will submit this matter to a Royal Commission. You can give evidence, and everybody else concerned can give evidence, and the Commission can recommend what the future of the industry should be." The Royal Comcission recommended nationalisation, but this recommendation was rejected by the then Government. Looking back on my life, I believe that one of the greatest disasters in our industrial history was the rejection of the Sankey Report.

I now come to modern times. During the Second World War we were again confronted with the question of the future of the coalmining industry. The industry, under private enterprise, had then been in the doldrums for twenty-five years. Very few pits had been sunk. More than 500,000 men had left the industry. The country found itself confronted with the challenge of war and desperately short of coal. The then Government, again a Coalition Government which this time included members of my own party, set up a committee to look at the technical position of the mining industry after twenty-five years of depression.

I invite the right hon. Gentleman to re-read the Report. This is where we began. This is where my right hon. Friend the Member for Easington (Mr. Shinwell) began when he became Minister of Fuel and Power. The first thing which was put on his table was the Reid Report, showing that, technically, the coal industry was near bankruptcy; that under private ownership there was no hope of finding the necessary resources or the skill to rebuild the industry. I say, therefore, that had it not been for the action of the Labour Government, and of my right hon. Friend, in 1947, we should not now be discussing the industry in this quiet atmosphere. We should have had fifteen years of turmoil and strife which would have brought the industry to ruin.

I speak as one who, for many years, had the privilege of sharing responsibility with my colleagues. I say to the hon. Member for Kidderminster and to other hon. Members, that if they wish to debate whether the industry should remain nationalised or not, by all means let them do so. Let us have such a debate. But I am certain that the industry has no future, except as a publicly-owned industry.

Governments of the party opposite have been in power for ten years and have fought three elections. If hon. Members opposite are convinced that the answer to the problems of the mining industry is that it should return to private ownership, why do not they put that in their election programme? They put the denationalising of the steel industry in their programme, and they carried it out. Why do they not do the same with regard to the coal industry? The answer is, they know that, if they did, no one would "buy", because of the position in which the industry was left under private ownership during the twenty-five years in which I had experience of it.

The Minister has made an important statement. I believe that the right hon. Gentleman has carried the pay pause further than any other Minister—[HON. MEMBERS: "NO."] I am expressing my own view. I do not want to misrepresent the Minister. He said that he had conveyed the view of the Government to Lord Robens, Chairman of the National Coal Board. The chairman is to be asked by the National Union of Mineworkers, in accordance with its agreement, to discuss wages. As we understand it, the view of the Government is that it is undesirable, that it would be against their wishes, for the chairman of the Board to offer, or to give, any increase in wages and salaries to the mine workers, even though this were justified by an increase in productivity.

That is what the Minister said today. I do not recall the Chancellor of the Exchequer, the author of the pay pause, putting forward such a view. This is the first time that we have heard it. Let us get this thing right. What is the policy of the Government? Is it that when the Minister conveys the view of the Government regarding wages to Lord Robens, he will say, "the view of the Government is that it would be very undesirable and wrong for you to offer any increase in wages at all to the miners, even though output and productivity has increased." Is that the advice to be given to Lord Robens?

I declare my interest in this matter. I am a member of the National Union of Mineworkers. As Lord Robens has said to the Minister, if the right hon. Gentleman gives him directions, he will have to tell the N.U.M. But if the Minister gives advice to the Chairman, let us get clear what is to be the advice. I think that Lord Robens, also, is under a moral obligation to tell the National Union of Mineworkers what is the advice of the Government. Suppose that in putting forward their case the representatives of the union tell Lord Robens, "We ask for this increase in wages for the reason, first, that productivity has increased." They will call in evidence of that, as has been said both by the Minister and by the Parliamentary Secretary. In the last four or five weeks the output of the coal miners has been as high as it was—I believe that it has been higher—in the comparable period of last year; and that with 24,000 fewer men in the industry.

I ask the Minister: what other industry, private or public, can equal that record? Let us get the facts and figures. Here we have an industry, in which there are 24,000 fewer men than last year, which is producing more. If every industry in the country could say the same, the Chancellor would not have to bother about imposing a pay pause or about an economic crisis. If the mine-workers argue that they are entitled to an increase, and put forward a claim because of the increase in productivity, is the advice of the Minister to Lord Robens to be, "Do not give it"?

That is what I understood the Minister to say; that if the miners were entitled to a wage increase because of a productivity increase they should not be given an increase. As I understood Government policy—with which I do not agree—it is that earnings and wages should increase in proportion to productivity. But the Minister has said that even though productivity increase in this industry, there must not be an increase in wages—

Mr. Nabarro rose—

Mr. Griffiths

I will give way in a moment.

At present, I am commenting on what the Minister said and I have not noticed that the Minister wishes to interrupt me. But if the hon. Member wishes to do so, I will give way in a moment. I am anxious to get this matter cleared up. The hon. Member for Kidderminster has asked about 20 questions and I have not asked anything like that amount.

5.15 p.m.

Miners all over the country will read reports of this debate and they will ask those of us here who represent the miners whether this is what it all means; whether the Government are saying that even though their output has been increased the miners are still to be kept down. The Minister and the Parliamentary Secretary will be aware that I have recently called attention—I am now proposing to go on to the question of manpower and perhaps the hon. Member for Kidderminster would care to interrupt, if he has anything to say regarding my previous point.

Mr. Nabarro

The burden of everything which the right hon. Gentleman is saying—unless I am mistaken—is exactly in support of the second Amendment which appears in my name.

Mr. Griffiths

No.

Mr. Nabarro

It is exactly in support.

Mr. Griffiths

The Minister has made an important statement and I come now to my second question. I am sure that representatives of the N.U.M. will tell the Minister that they think it desirable—indeed, it may become necessary—to offer a wage increase—this is in addition to the other reasons I have given—because unless that is done, workers will not stay in the pits. Let us be frank about this. The situation is very serious. Sometimes I feel that the serious view which I have of this matter is not shared by the Minister and the Parliamentary Secretary. But I have spent a long time in the industry and I feel deeply concerned about it.

I have quoted figures before, and I will quote them again now. In the South Western Division, which includes South Wales and my own constituency, it was reported last week that for the last 17 weeks 771 men have left the industry voluntarily. In round figures, that is 50 a week, which would amount to between 2,500 and 3,000 a year. If that trend goes on, what will happen at the end of the year for which we are providing this £50 million, or, if the hon. Gentleman gets his way, at the end of the half year for which we are providing £25 million? Given all the oil, including that which the hon. Member proposes to buy to provide him with central heating—

Mr. Nabarro

I have bought it.

Mr. Griffiths

Very well, given all that, and the gas from the Sahara, we shall still have a position in which, for many years, coal will remain the lifeline of the economy and the industry of this country. There are various views about what proportion of energy it will supply. However, by far the largest proportion of the energy for industry for as far ahead as we can see must come from coal. That is not disputed by anyone. We cannot get coal without men. That is why I have raised this question. That is why the men will raise it.

I cannot blame the men for leaving the industry. Some of them are my constituents. The coal mining industry is unique among all industries. It is always dependent for its manpower upon mining families. No other industry is in this position. This has been true of coal mining throughout its whole history. If fathers and mothers become anxious about the future of their sons if they allow them to go into the industry, and if they advise and urge them not to go, and prevent them going, before long we shall not be discussing quietly the Committee stage of a Bill of this kind. We shall be discussing the most serious crisis the industry has ever faced. The industry is losing manpower at such a rate that it will not be able to provide the coal the nation requires. The Board has the obligation laid upon it to provide coal for the nation.

Mr. Ridley

If an increase is granted for this reason, will not the immediate action be that all the other industries in the neighbourhood will grant an increase? Then we shall be back exactly where we were before. We shall have gained nothing except inflation.

Mr. Griffiths

I am not arguing the merits or demerits of the pay pause. I am against it. It is a stupid policy. It is cowardly for the Government to use it against those least able to hit back, namely, those in the public service. I am discussing the coal industry, its future and its manpower position. I am relating this to the question of wages. What the industry needs now more than anything is a sense of security and stability. The Parliamentary Secretary, who was a colliery general manager, knows I speak the truth when I say that in every mining village in the country—it is no good looking elsewhere for coal miners—there must be confidence that the industry will receive fair play and will get a chance.

It is all right to talk about throwing the industry to the wolves of free competition now, but for thirty years my colleagues in the N.U.M. and I served a trade union in which all the weight was against us. All the power was on the other side. After the Second World War my old colleagues in the N.U.M. found themselves with power in their hands for the first time. The Board found itself producing a commodity which was in short supply for the first time in peacetime for about thirty years. If the doctrine of commercialistm and free competition had operated then and the Board had been allowed to use the advantage of the market in the 1940s, we should not today be bothering about £25 million. There would be much more than that in the "kitty".

But in those days all Governments—the Government of which I and my right hon. Friend the Member for Easington were members and Governments formed by the party opposite—prevented the Board reaping the advantages of commercialism. Hon. Members opposite cannot deny that. They said that prices must be controlled by the Government. The miners say, "This is what the Tory Party does. There must be no commercial advantage when it is for us, the miners, but there must be commercialism when it is against us." That is what the miners say and believe. They are right. In those days the Board answered the nation's call and was, indeed, subject to the nation's will in prices.

For thirty years my old colleagues on the N.U.M. had been the under-dogs, under the lash of coalowners, assisted by the party opposite, with no power in their hands, except to beg for an increase here and there. I took part in a great national campaign for a £2 a week minimum wage for miners when tens of thousands of miners were working six days a week and taking home less than £2 a week. After the war the N.U.M. found itself with power in its hands for the first time, but it did not use it to exploit the country. I am very proud of the union. It used its power far more responsibly than the coalowners used their between the wars. The union showed an example.

The Minister must realise that the industry will be required for many years. It will be absolutely essential to the life blood of the country. It will need men, and they must come from mining families. Now we must listen to all these attacks upon the Board, all the doubts which have been expressed, all the directives to Lord Robens, and all that we have heard today and heard on Second Reading. Parents in mining villages are saying to themselves, "What is the good of sending our boys to the pits? Have we any guarantee that they will not be thrown on the road in ten years' time as their fathers were thrown on the road at the age of 50 when they were too old to learn another trade and go to another job?" This question is already being asked and answered. It is being answered by men leaving the pits and by many youngsters refusing to go to the pits.

This is the real issue. It is not the Amendment and all this triviality about £50 million or £25 million. The Minister and the Parliamentary Secretary know that unless we give the industry security, dignity and fair play now, there will be no men in the years ahead. If a time arrives when there are no men, it may very well be the end of this country as a great industrial power. Coal is still its life blood. That is why I hope that the Minister will carefully consider my experiences of the past and my assessment of the present position. He must not be so definite in his instructions to Lord Robens, because if we are to get the coal we need Lord Robens will have to take account not only of productivity, but also of the industry's desperate need to retain its manpower. It will not be able to do this if it is subjected to such attacks as we heard last week and again today.

5.30 p.m.

Mr. Geoffrey Hirst (Shipley)

The The right hon. Member for Llanelly (Mr. J. Griffiths) always addresses the House of Commons with great sincerity, which we all recognise, on this important industry, to which he has given a lifelong service. I certainly do not wish to detract from any honour which is due to him on that account. However, in relation to the increase in output per man shift—in other words—higher productivity—which he referred to, and which we are all delighted to see, I want to point out that we must, in all fairness, take into account the immense capital which since the war has been invested in the mines.

Without in any way denigrating what has been achieved and what the men have done, in my view it would be shameful if the industry had not made this achievement after all these years and after all the money which has been put into it. It is now beginning to pay off for the national good.

It is true that the nation cannot get coal without men. I accept that in the context in which the right hon. Member made the statement, but we must also remember that we cannot get trade for this country unless we are competitive. We must bear these factors in mind, because connected with them is a question which has already been asked by several hon. Members and which the Minister did not answer today. Of course, I appreciate the difficulty of answering the question—put by my hon. Friend the Member for Kidderminster (Mr. Nabarro)—whether the industry is to be run as a social or a commercial enterprise.

If the accent is on the latter, it must be remembered that competitiveness involves the use of all sorts of fuels, for certain industries which used solely coal at one time have switched to other fuels to make them more competitive in price. Thus the question must be asked: will the coal industry get the trade? Then, of course, if not, the coal industry dies, and it will not die as a result of the policies of this House in this sense, but of itself; in not being competitive and able to stand up to world competition.

When my right hon. Friend tried to justify the need for the additional £50 million—which is the purpose of the Bill and in which the Amendments seek a reduction—he referred hon. Members to the debate last Wednesday. My right hon. Friend said on that occasion: The position this year is quite different. I have already told the House of Commons, last month, that a further deficit this year is certain. I find it very difficult even at this late stage in the year to attempt a precise estimate, but what I said last month was that 'a relatively small further loss at the end of this year … will bring the Board's accumulated deficit beyond its probable internal resources and the £20 million borrowing limit taken together.'—[OFFICIAL REPORT, 24th October, 1961; Vol. 646, c. 759–60.] I pointed out that this was a serious situation and promised that if legislation were necessary I would bring proposals as soon as possible before the House of Commons."

Very germane to the whole question is how these figures come about, because later on in his speech my right hon. Friend said: I will now do my best to try to make the position plain about the £50 million. This is the second time that my right hon. Friend referred to this £50 million aspect. At the end of this year, the Board's internal funds will probably be about £60 million, and the accumulated deficit is likely to be rather over £90 million."—OFFICIAL REPORT, 29th November, 1961; Vol. 650, c. 449–50.] I would like some further information on this, for while it is a matter of accountancy to a great degree, I assume that it is a balancing deficit of £90 million. I equally assume that the £60 million, when my right hon. Friend referred to … the Board's internal funds will probably be about £60 million … is, in fact, cash—or something we can turn into cash. If so—and the statement is by no means plain if that is not the case—there is no substance whatever in the arguments we have heard today to show that £25 million will not see us through this period. Thus, we should be given more information on this point.

My hon. Friend the Member for Kidderminster mentioned several other points, and although I did not understand all of his 20 questions—because I do not follow everything in the same detail as does my hon. Friend—I believe that we should have more knowledge of what this £50 million really means. It has been said that the Amendment, or even the Bill, should not have been necessary because, after all, the Conservative Party has been in power for a long time and should know what it is doing with regard to the coal industry.

What we keep on doing is rather like a banker who does not know quite what to do about an investment—whether to put money in to save the money that was unwisely put in before, and give handouts of £50 million from time to time without any real or proper plan. Is the industry to be carried on in a commercial way, or is it to be a social service? The right hon. Gentleman the Member for Llanelly made clear his accent on the latter aspect. He is entitled to his view, but the question needs answering as a matter of Government administration.

We are getting rather tired of the perpetual hand-outs of sums with the perpetual explanations that are supposed to make things plain, but which make nothing clear. Because it is time that we got some understanding and were relieved of the embarrassing position in which the Government insist on putting their supporters, like myself, I believe that the first Amendment, as a matter of principle, should be pressed. I appreciate, concerning the second Amendment, that the words seem to be amiss. They were aimed, however, at dealing with the pay pause.

The right hon. Gentleman the Member for Easington (Mr. Shinwell), who, I regret, is now out of the Chamber, remarked that the Government had no right to interfere with anything to do with wages. I should like to get that point cleared up. That was a reason for the wording of the second Amendment; that we believe that the Government should have that right—in wages, dividends, rents, and so on—if the economic situation finally requires it. It is absurd that anything should go on record to suggest that the Government, when faced with possible violent inflation or anything of the like, should not have the right, in the last analysis, to interfere in any direction that may be necessary to secure the economy and employment of our people.

In the debate last Wednesday, the Parliamentary Secretary made a somewhat remarkable speech. I listened to a great deal of that debate and to all of my hon. Friend's speech, although I did not think a great deal of it. He seemed to put up Aunt Sallys so that he himself could knock them down. He said: I am speaking to those who care to accept it. I and the Government accept responsibility for making the industry successful. We have had it for ten years now, as my hon. Friend said, and it is our job to make it successful. All our efforts are directed to that end."—[OFFICIAL REPORT, 29th November, 1961; Vol. 650, c. 558.] The Bill, however, does not make the industry successful.

My right hon. Friend the Minister of Power, on the other hand, went so far as to say that it did not purport to make the industry successful and I hope that we shall be relieved of the necessity, year after year, of having to come forward with amendments to the Government's policy. This is embarrassing and it does not achieve anything because there is not the will and the power to get things achieved. As I say, it is about time that we were relieved of this responsibility and of this embarrassing business of trying to show to the Government just what is their duty in this matter.

Mr. Michael Foot (Ebbw Vale)

The hon. Gentleman the Member for Kidderminster (Mr. Nabarro), who moved the Amendment, seemed to be in a state of disarray because the hon. Gentleman the Member for Shipley (Mr. Hirst) has just said that he was still pressing the first Amendment, although he was doubtful about the second. The hon. Member for Kidderminster, however, was doubtful about the first Amendment, but still wished to press the second. They do not seem to have co-ordinated their plans. Whether the hon. Member for Kidderminster will press either of them we shall have to wait and see.

However, I prefer to start with the Minister himself, because I believe that he excelled himself this afternoon. I said on Second Reading that I thought the right hon. Gentleman was the most agreeable of Ministers, and I would not like to withdraw that compliment so soon. But the statement the right hon. Gentleman made today was remarkable. It is remarkable that during the Com- mittee stage of a Bill dealing with the coal industry we should have a new pronouncement about the pay pause generally. I will try to show why I believe the Minister has carried the argument of the pay pause somewhat further. First, let me say that I think the right hon. Gentleman is an adornment to the Front Bench—the best velvet glove in the Ministerial wardrobe. Today, however, he is being used to turn the screw of the pay pause, and this is a serious matter.

As I watch the antics of the hon. Member for Kidderminster, I cannot help sometimes feeling that he must be in the pay of either the Government or the Conservative Central Office. He must have had an increase in pay recently.

Mr. Nabarro

On a point of order, Dr. King. Is it not grossly out of order to impute that an hon. Member has a pecuniary gain from an office which he does not hold? Are you not aware that the hon. Member for Ebbw Vale (Mr. M. Foot) has just suggested that I am in the pay of the Government, which I am not, and nothing to do with it—[HON. MEMBERS: "Oh."]—or of the Central Office, and that I have even less to do with that? Could you not ask the hon. Member to withdraw at once the opprobrious allegation?

Mr. Foot

If it is an opprobrious allegation—

Mr. Nabarro

May I have an answer, Dr. King?

The Temporary Chairman (Dr. Horace King)

I understand that the hon. Member for Ebbw Vale (Mr. M. Foot) who is addressing the Committee is speaking on the same point of order.

Mr. Foot

If it is an opprobrious allegation against an hon. Member to say that he is a member of the Government or of the Central Office, I withdraw it. Maybe the hon. Member is performing the services unpaid.

Mr. Nabarro

Hear, hear.

Mr. Foot

The service that the hon. Member performs for the Government is this. Many of us have very deep quarrels with the Government. We think that they are making a mess of the coal industry and that there are complaints to be made against them, but when we listen to the hon. Member for Kidderminster we may think that we are better off with the Government. Therefore, the hon. Member does perform that service for the Government at least and we may be thankful that he is not in charge of the fuel affairs of this country.

It is rather peculiar that we should be taking these two Amendments together. I do not wish to criticise the Ruling which was given earlier, but it seems that there are two very distinct principles involved in the two Amendments.

Mr. Nabarro

That is what I said.

Mr. Foot

I am not complaining against the hon. Member for Kidderminster putting them down as two separate Amendments. They involve two separate questions. The first concerns the question of a total amount and, as the hon. Member has said, the second is directly concerned with the pay pause. I should have thought that those two matters were distinct.

On the first matter, hon. Members opposite have tried to pretend that their sole interest is to guard the nation's finances, to see that no money is wastefully spent, to ensure that a diligent scrutiny is maintained over every penny that the Government spend. If they were not so selective in their interests I would be prepared to give them more credit for what they claim in that respect, but they do not mind when £20 million extra is paid out in respect of unearned income to Surtax payers. That is what is to happen next year under the Budget which was introduced this year.

The £20 million paid out in respect of unearned income would have been quite sufficient to make a great contribution to putting the coal industry into a better position, but no complaint was made by hon. Members opposite in that respect. I also remember that when the House voted £20 million for the new Cunard liner, which is not to be built, hon. Members opposite did not vote against that.

Mr. Ridley

I do not know whether the hon. Member is referring to me, but I abstained on that occasion.

Mr. Foot

The hon. Member abstained and the Government got their Bill. The hon. Member must not say that he made a bold stand against the £20 million for the new Cunarder. The Government did not care a fig for the abstention. If the hon. Member had joined some of us who divided the House on the question he might have been able to intervene with more relevance.

The fact is—and I say it to hon. Members opposite, who are making their claim in respect of the first Amendment that they are diligent in watching that every penny should be spent properly—that hundreds of millions of pounds can be voted for private industry, but they never turn up to vote against that. Yet in cases where moneys of this nature are under attack, they turn up eagerly.

They are not watchdogs for the taxpayer, but much more often jackals for private interests. We have those representing oil interests and other interests arguing for those interests. They are not arguing them as straight matters of public finance, and I do not believe that in this case they are actuated by that principle. Time and again the same hon. Members, for the most part in coal debates, wish to throw as much mud as possible at nationalised industry. One of the questions which were put by the hon. Member for Kidderminster revealed that clearly.

The second Amendment raises much more serious issues than anything concerned with the antics of the hon. Member for Kidderminster.

Mr. Nabarro

Do not be rude.

5.45 p.m.

Mr. Foot

The second Amendment raises the whole question of the operation of the pay pause. What we had in the Second Reading debate, and what has been illustrated even more clearly in this debate—that the actual wage negotiations which are now supposed to he proceeding should be discussed in such detail with ministerial pronouncements during a Committee stage of a Bill—seems something of a novelty. I can understand questions about a pay pause being discussed when we are debating a Ministry of Labour Vote, or in a debate initiated by the Chancellor of the Exchequer, but to have a series of debates in which the Minister reveals, and underlines to the Committee, what he has been saying to the Coal Board on the subject of wages seems something of a novelty.

We should examine this much more closely than the eleventh question put by the hon. Member for Kidderminster. I hope that I have got his numbering right. He asked the Minister to say whether he accepted the principle that wage increases should be given only in respect of an increase in productivity and, if so, how that fitted in with the pay pause? I think that that, roughly, was the question the hon. Member asked.

Mr. Nabarro

Question No. 11, to be answered seriatim— to which my right hon. Friend neglected to reply—was, and I quote: Does the Minister accept the principle of increased pay, for increased productivity, and if so, on an individual basis, or on a collective basis for the whole industry?

Mr. Foot

That is roughly what I said, but in rather better English. I have abbreviated the question. The reply of the Minister was an extremely interesting one. I understood him to agree with the general view that wages should not rise out of proportion with productivity as a general economic principle, but I think that he went on to say—I do not say that I have his exact words—that if his hon. Friend the Member for Kidderminster said that the Government would have no objection to increases of wages if productivity were achieved, that might be an encouragement to wage increases. He said something like that. In other words, he was saying that even if there is productivity there should be no wage increase and that he did not wish, by any hint he might give to the Coal Board in this Committee, to suggest that miners should be entitled to wage increases even if there were increased productivity.

An hon. Member then said that in that case we ought to vote for the Amendment because it implied that if there were an increase in productivity there ought to be an increase in wages. The position of the hon. Member for Kidderminster in this case appears to be better than that of the Government, but his claim is not sufficient for us. As has been very powerfully argued by my right hon. Friend the Member for Llanelly (Mr. J. Griffiths), it may be that the paramount reason why the Coal Board should break the pay pause is not primarily because of an increase in productivity, but because of the lack of manpower. The proposition by the hon. Member for Kidderminster does not deal with that.

We all know the reason why the hon. Member for Kidderminster and his hon. Friends are interested in these things. The Minister made it all the worse by his answer. This is the "Not a Penny Extra for the Miners" Clause. I daresay that the hon. Member for Kidderminster might even have done this in concert with the Minister. They want to have a display in the House of Commons showing that there is strong opposition from many quarters here—by which they mean the hon. Member for Kidderminster and his hon. Friends—against any departure from the pay pause in the case of miners. The Minister is quite eager to encourage that. Indeed, he goes further and says that even if there is an increase in productivity he does not think the Coal Board ought to give the miners an increase in wages.

Mr. Wood

I did not say that at all.

Mr. Foot

He comes very near to it. This is a question of semantics. If we say to the Minister, "You have given instructions to the Coal Board," he denies it, but he came very near to it in this debate, as he did in the debate the other day. The Parliamentary Secretary, at the end of the debate last week, saw some of the troubles which the Government were running into, and he talked about the full and free negotiations in which the Coal Board was about to engage. He went on: As for my right hon. Friend binding himself to a certain course in the event of the wages issue going to arbitration, my right hon. Friend will not prejudge the issue to any extent. The question of what he would or would not do is not an issue today, and it may never arise." [OFFICIAL REPORT, 29th November, 1961; Vol. 650, c. 556–7.] What is it that the Minister himself said? He went as near as possible to saying, without actually giving an instruction, to the Coal Board and its Chairman, that he could not give an increase. How much nearer could he go than that? He said: … hon. Members ask how much influence in these circumstances the Government should try to exert on the Board. The Prime Minister has already made perfectly plain the importance which the Government attach to the pay pause, and the Government have made their view perfectly clear to the leaders of the nationalised industries. I am myself quite satisfied that Lord Robens fully understands the Government's view. More particularly, where an industry is dependent on Exchequer support to meet current losses, the Government would expect its Board to take this into account in wage negotiations. Where, in the words of the Prime Minister, the Government are acting both as adviser and as banker.' it is not unreasonable for the Government to expect the nationalised industries to pay particular attention to its views."—[OFFICIAL REPORT, 29th November, 1961; Vol. 650. c. 456–7.] I do not think that he could go much nearer to an instruction than that, particularly when we know the sanction which the Government are apparently prepared to apply.

Viscount Hinchingbrooke (Dorset, South)

Which sanction?

Mr. Foot

One sanction is that the Prime Minister comes to the House of Commons and abuses the Chairman of a Board which happens to be responsible for carrying out its duties under other parts of the Act.

Viscount Hinchingbrooke

It did not deter him.

Mr. Foot

I agree that it did not deter him in that case, and I hope that it will not deter the Chairman of the Coal Board in this case.

Viscount Hinchingbrooke

It is not a sanction.

Mr. Foot

It is a sanction in this case, and the noble Lord should not be so simple in this matter. Hon. Members know what would happen. If Lord Robens tells the Government to go where they ought to go, Lord Robens may find that he will have a lot of difficulties from the Government—a lot of difficulties from the Coal Board's bankers. They are saying it as clearly as they can.

Hon. Gentlemen opposite have had a lot of experience of banking, and they know that a banker does not have to say to his client, "If you behave like that, you will not get any more from me," but that he can make it very clear. So what the hon. Gentleman is saying is clearly an instruction to the Chairman of the Coal Board "If you do not abide by my advice and the influence which I try to exert"—and the other phrases which the right hon. Gentleman uses—"there will not be any cash forthcoming. if any further money is required to carry out wage increases, you will not get it."

Is not that an instruction to the Chairman of the Coal Board? It is the Government who are deciding what are to be the wages in the coal industry, and they certainly are not fit to decide that issue, because we have seen for months past, and it was proved on Second Reading, that the Government's forecasting about manpower has been completely mistaken.

That is one of the reasons why we have this Bill and for what it is proposed to do in the Bill. A few months ago there was a crisis which the Minister of Power said would not happen. It has happened, partly a financial and partly a manpower crisis, neither of which the Minister of Power foresaw. We have had the crisis, and the Government say that they will put a bit more money into the nationalised industries, but in the meantime they have put on the screw as much as they dare and have said to the Chairman of the Coal Board, "You can do what you like as long as you do not spend any more money on wages." Hon. Gentlemen opposite try to enforce this method of running the great nationalised industries.

Personally, and for other reasons as well, I think that it would be much better if direct responsibility for the conduct of the coal industry rested in this House; then we should not have all this double talk. We could make this House much more accountable for this industry. This case is proved, because in the pay pause, as it affects the mining industry, we are soaked in all this hypocritical language which we have had from the Minister, who says that he has given no instructions when, in fact, he has, through the threat to withdraw the bankers' order.

Mr. D. Griffiths

Will my hon. Friend ask the Minister whether he is not aware that hon. Members from mining constituencies on this side of the Committee pleaded with his predecessor for greater public accountability of this industry, but that hon. Members opposite poured cold water on the suggestion and would not have it?

Mr. Foot

I am grateful for that intervention from my hon. Friend. For some years many hon. Members on this side urged that point. The previous Member for Ebbw Vale was one of the chief advocates of the doctrine that the nationalised industries should be made much more accountable to this House. We should then be spared the situation which we have now, when the Minister is giving instructions to the Board, although he tries to pretend that he is not doing anything of the kind.

As long as the general structure remains and the Government are pretending that they are not intervening, they should refrain from making the kind of statement which the right hon. Gentleman made during his Second Reading speech and which he has reiterated in even more dangerous terms today. I wonder what he thinks will be the effect in the mines of his remarks about no wage increase even if there is an increase in productivity? Does he think that they will be of assistance? The right hon. Gentleman has only one cure for the problems of the coal industry. He phrases it very nicely, in different language in different debates, but it is the point that he wants more mechanisation. That is the whole of his policy for the coal industry.

More mechanisation may assist. Increased productivity may assist. But there are many other problems in the coal industry, such as the problem of which pits we are to keep open and how we are to finance the industry. If we look at this series of debates which we have had, at the last two in particular, but at many more previously, time and again the fact has been exposed from this side that one additional burden after another has been placed upon the Coal Board—quite a different form of burden from that placed on any other industry in this country.

We never get an answer from the Minister. He never says that he thinks that it is right in principle that the Coal Board should pay the £70 million for coal imports. He never says that he thinks that it is right in principle that the burden of carrying stocks should be placed on the Coal Board rather than on the nation, which it was helping to serve. These arguments of principle are brushed aside by the Minister.

What both the Front and back benchers opposite want to do is to keep a nationalised industry—and the most essential nationalised industry in the country—in a situation of permanent financial subordination. [HON. MEMBERS: "No."] They want to squeeze it persistently.

The last thing hon. Gentlemen opposite want is to see the Coal Board succeed. We can hardly blame them for that, in a sense, because the more successful it is the less they can talk about it. If we look at the facts, and if we weed out all the half-baked theories and cooked figures of the hon. Member for Kidderminster, we see that it is a great success story, despite all the difficulties.

6.0 p.m.

Hon. Members opposite do not want the Board to succeed. They could not put that in the week-end notes which they give to the hon. Member for Kidderminster. They do not want him to go round the country saying that the industry has a success story. In these debates, therefore, hon. Members on the Government back benches are in a conspiracy with those on the Front Bench in trying to keep the Coal Board in a position in which it is never free to expand and develop as it should be allowed to expand and develop. The time has come when we must make it clear to the country that the responsibility for the conduct of this industry does not rest primarily with the Coal Board. In his Second Reading speech the other day, the Parliamentary Secretary said: I and the Government accept responsibility for making the industry successful."—[OFFICIAL REPORT, 29th November, 1961; Vol. 650, c. 558]. But the Government have not been very successful in that respect in the last three or four years. The coal industry is faced with an entirely new situation, which the Government pretended had come to an end a few months ago, but which has not come to an end.

First, we must reject the absurd Amendments put down by hon. Members opposite. I suppose that they do not even intend to press them to a Division, although the hon. Member for Kidderminster started by saying that his 20 questions would reveal the great gulf which existed between him and the Government. If there is such a gulf he might reveal it in the Division Lobby, but we shall have to wait to see whether he is prepared to go into the Lobby.

In fact, there is very little distinction between the hon. Member and the Government, and he will be satisfied with the Minister today because the Minister has clearly said what the hon. Member for Kidderminster desired him to say—that he is using all his influence, all his advice, all his bankers' instructions, to try to prevent a single penny from being given to the miners, when probably the only thing which can save this industry is for the miners to get a substantial wage increase at a very early date.

Mr. Skeet

We have listened to an exercise in sophistry which even the ancient Greeks could not have surpassed. I liken the hon. Member for Ebbw Vale (Mr. M. Foot) to a man chasing hares in all directions and running himself off the map. He imagines that he is the sole custodian of the public conscience, and he seems to think that simply by giving the miners a substantial increase in wages at this time when the National Coal Board cannot afford it the mines will remain open in the future. His policy would inevitably lead along the road to ruin. Earlier, my hon. Friend the Member for Kidderminster (Mr. Nabarro) mentioned the possibility that the increase in coal prices in Scotland would have an adverse effect and would let more fuel oil into the country. In that case, it would be less profitable for the National Coal Board and the industry would contract even further. We are trying to help my right hon. Friend to reconstruct the mining industry. I point out that in the United Kingdom 74 per cent. of the total energy is supplied by coal and only 24 per cent. by oil, and that is likely to continue for many years. It is therefore wrong to say that my hon. Friend and I are not interested in the success of the National Coal Board. In the debate only last week I said that I should like to see it very successful, and the way to make it successful is to contract the industry even further. There will be a decline in manpower until it becomes so competitive that it can stand up against its various competitors in the fuel market.

My right hon. Friend has indicated the Government's view about wages. A wage pause is not new. We had it under Cripps, and there is one in France today. We are trying to sustain the value of the £. But we have been given no encouragement by hon. Members opposite. They are the people who allowed the £ to be devalued in September, 1949, and we can expect no sound advice from them today.

I did not put my signature to the second Amendment because I did not consider it consonent with the Government's policy. We have declared our views about the wage increase in the electricity industry. This pause is a freeze until early next year. Whether it is to the advantage of the Coal Board to give wage increases and to drive the industry into a less profitable situation is for the Board to decide. The next point to decide is when the increases which is given as a result of arbitration should operate. While the wage pause continues or the freeze continues, there should be no increase on any side.

Mr. William Ainsley (Durham, North-West)

Will the hon. Member tell us who approved a policy whereby the National Coal Board planned for 240 million tons of coal a year? In this planning they must spend money with a view to developing the coal industry.

Mr. Skeet

There was a programme for 240 million tons of coal a year. It was made by the Government of the day. I was not a party to it, and at the time I considered it to be entirely wrong, although I had no opportunity of expressing my views in the House. I have also said that an annual production of 200 millions tons a year now is entirely wrong. Let me proceed with my argument.

If only the hon. Member for Ebbw Vale, reads the newspapers, he will find exactly what the Government's policy has been on the wages pause. If he refers to the Financial Times of 30th November, he will see it stated that three of the four major oil companies have made a breach in the Government's pay pause by granting wage increases for 6,500 of their workers on the basis of recognition of improved productivity . . in the implementation of improved work-planning and procedures for greater efficiency over the last year. They broke the freeze. The oil companies have thus been very unhelpful and most unwise, and while increases are given to other people it is extremely difficult to persuade the miners that they should have no increases at this stage.

I speak for my right hon. and hon. Friends when I say that when we speak on this subject we have the national interest in view and we do not hesitate to make a comment if we find that the wage pause is being pierced. In the past, when there were negotiations, the employers could put forward their arguments and the workers, through their representatives, could put forward their arguments; but where does the public interest come in? Of course, my right hon. Friend cannot give a general direction about a specific wage increase, but he can mention to Lord Robens, "This is the Government's view, and we hope that you will take it into account and will observe that the national interest has to be considered as much as the interest of the miners."

Mr. Monslow

Will the hon. Member kindly indicate what he regards as a minimum in the present circumstances before the wage pause should apply?

Mr. Skeet

I hope that the wage pause will be lifted early next year, prior to the Budget. My view is that until it is lifted it should be a freeze. It should apply generally in order to be effective. There may be one or two, but very very few, exceptional cases.

Mr. E. G. Willis (Edinburgh, East)

Which are they?

Mr. Skeet

The mining industry, the electricity industry and the others over which we have immediate jurisdiction should not be exceptions.

Mr. Ainsley

The nationalised industries.

Mr. Skeet

As reported in the Sunday Times of 3rd December, Lord Robens said that the decision to defer discussions in the mining industry has nothing to do with the pay pause. It is based on the economic position of the industry, combined with the time needed to assess such claims as that for shorter hours. In other words, having looked at the matter carefully, he says that the delay has nothing to do with the wage pause. He will meet the miners' representatives not this year but later, and he will then assess the position. These are the matters operating in his mind. That is Lord Robens' view, having looked at the industry—because he wants to make a success of it, and so do we. But we want to make a success not only of the National Coal Board but also the running of the British economy. Let us not be driven by unfortunate remarks from hon. Members opposite into devaluing the £ for the second or, perhaps, the third time.

It could be argued, and argued effectively, that an exception might be made for Divisions 4 and 6, where a substantial colliery profit has been made. In Division No. 4, it was something like 8s. 2d. per ton and in Division No. 6, 9s. 8d. per ton. If one tries to calculate the increase in productivity in those isolated areas on the basis of the overall costs, it might be suggested that the miners there would be entitled to an increase. I cannot accept that contention, because it would pierce the pay pause.

Mr. Harold Finch (Bedwellty)

Increased productivity does not matter.

Mr. Skeet

Yes, it does matter, and it is of vital concern, but let us get over the pay pause first. That will give time for the wage rates in Europe to catch up and for strengthening of the £. Believe me, the continental countries have learnt that there is one thing which kills the hopes of the workers, the pensioners and the others, and that is the advance of inflation. We have yet, perhaps, to learn that lesson. If this appeal is put over to the miners and to their representatives, I think they will be conscientious in following the course which I have indicated.

It would not be appropriate for me to speak much longer, except to mention that I favour the first Amendment. My right hon. Friend today gave figures to show that he is likely to spend beyond the internal resources of the Board to the extent of about £30 million by the end of the year. My right hon. Friend should lave £25 million for his industry. If he requires more, he should go to the banks for it and compete in the open market. He tells us that in the past, he has not been customary to the banks for a large sum of money—he probably would not get it—but if today we were to give him £25 million and he had to go to the banks for the remaining £5 million or £6 million, I do not think that he would have any difficulty. The obligation is upon my right hon. Friend to prove that he requires the money. To my satisfaction, he has specified a figure today of approximately £30 million.

We have to see that the industry is properly managed. The debates on this matter are all too infrequent. The last one was in October, but the one prior to that was many months ago. More frequent debates would have the advantage that we could review the operation of the development plans and of the progress of expenditure early in the New Year. That would be extremely advantageous, because many people are worried, not only on the industrial side, but also among the colliery workers in Scotland.

The other matter with which we are concerned—I mentioned it only last week—is the debt servicing which has risen from £21 million to over £40 million per annum. Are we to provide further moneys to be used in servicing the extremely heavy overheads which the Coal Board has to meet? We should have an answer on this.

I do not propose to vote for the Amendments; far from it—the Coal Board must have part of these advances. Nor do I concur with the sentiments originally expressed by my hon. Friend the Member for Kidderminster that my right hon. Friend the Minister should resign. On the contrary, I consider that he is doing an exceptionally good job in the most difficult circumstances. In some instances, he is not aided by certain representatives in the industry.

If only those people in the industry would face the situation which exists and look at Europe a little more carefully, they would see some of the storms which lie ahead. If they are not prepared to allow the steel industry to become a little more competitive by having the chance of resorting to cheaper fuels, we may find that we shall have even greater difficulties internationally.

Mr. Monslow

Cheap miners.

Mr. Skeet

It is not cheap miners. We want the miners to survive. The arguments of hon. Members opposite would ruin the pits and the miners. If the miners do not have the opportunity of producing the coal, they cannot be paid. My idea is to have a smaller but thoroughly efficient mining industry. That could be achieved, but not by the policy we are now pursuing.

6.15 p.m.

Mr. J. Hill (Midlothian)

I listened attentively to the speech of the hon. Member for Willesden, East (Mr. Skeet), who advised us to read the Press and see what is being said. What amazes me is that every time we speak in the House of Commons about the pay pause, hon. Members opposite seem to forget that there is another side to the pause to which no attention is being paid.

In the Press yesterday, I saw it forecast that A.T.V., which previously paid 24 per cent. dividend, now threatens to pay 90 per cent. If the Government say to the workers that they must accept the pay pause, surely it is only fair that they should tell the employers that they should accept a dividend pause. What I cannot understand about the pay pause is that if employees in an industry are awarded an increase but its application is delayed as long as the Government continue the pay pause, that increase is lost for that length of time, but when a dividend is frozen, it is only a matter of waiting until the pause is lifted, when it can be paid to the people who draw interest from it.

On the subject of dividends, I wish to say—

The Temporary Chairman

Order. It is in order to make references to the wage pause, but the hon. Member must apply his arguments on the wage pause to the miners and it is not in order for him to elaborate on the subject of dividends.

Mr. Hill

I apologise, Dr. King.

I am opposed to the Amendment. The hon. Member for Willesden, East may laugh, but I have as much reason to laugh at him when he speaks as he has to laugh at me now. In Scotland, the men who are leaving the coal industry are the young men. They leave because they have no security. If they do not get the increase of £1 a week for which they have asked, we will lose still more young men. The only person who would be satisfied with that situation would be the Secretary of State for War, because that would enable him to get the recruits he wants.

The men underground, for whom we are looking for an increase, take home less than £10 a week for five days' work underground. The surface worker takes home less than £9 a week. The hon. Member for Willesden, East told us that if the situation was put to the leaders of the National Union of Mineworkers, they would support the pay pause. There is nothing like being an optimist. As I read the signs, there is no possibility of the N.U.M. supporting the pay pause when its representatives go forward for their increase. I certainly hope that they do not support it.

Whenever we discuss the coal industry in the House of Commons, it seems that the budget must be balanced from the bottom. The miners, apparently, are not entitled to any increases, nor are they entitled to a shorter working day. It is remarkable how, when we discuss a nationalised industry, money is difficult to get, but that when we discuss money for private industry there is no trouble whatever. If the Government had put as much into the coal industry as into civil aviation, possibly the coal industry would be in a better state. They gave money to the cotton industry and were prepared to give it to shipbuilding.

When we talk about the industry being made to pay its way, I have yet to hear anyone from the benches opposite say that it is unfair that the former owners of the mines should still be drawing money from pits which they could not make pay when they owned them. They are getting more money now for sitting back and doing nothing than when they owned the pits. I cannot, in the face of that increase, follow the logic of refusing to pay £1 a week more to the men working underground.

We think that the industry should be co-ordinated with the other fuel industries. The hon. Member talked about the increase in the price of coal in Scotland and its effects. If hon. Members opposite were honest and sincere in what they say about their wanting the industry to be a success they would not say what they do about oil or follow their present policy for the oil industry. They would use indigenous fuel and keep the coal mining industry alive. It is said that in Scotland pits are being closed because they are uneconomic. In the debate last week some hon. Members on this side tried to prove that some of the pits are not uneconomic and that they are being closed only because there is no sale for their coal. If this continues in Scotland the way it is now I can foresee the time, in the very near future, when we shall need to bring in a Crofters Bill not for the Highlands only but to cater for the whole of Scotland right down to the Clyde Valley, because other industry is not going there to take the place of the coal industry.

The hon. Member for Kidderminster (Mr. Nabarro) made his usual nasty attack on a nationalised industry. We can understand why. It is because nationalisation is to him something which ought not to be allowed. Nationalisation is a dirty word, so he said. I would remind him that coal mining was a dirty word, but it is not a dirty word now. Nationalisation is and can be a success, and it would be better to help it to get on.

Mention has been made about what is happening on the Continent and how that will affect us here in this country. As I listened to the debate last week I felt convinced that hon. Members on the other side thought we were already in the Common Market. I watched a television programme about the Belgian coal industry. I can see some of the things happening there happening in this country, and some of the things happening elsewhere on the Continent happening in this country, if we are stupid enough to go into the Common Market.

Viscount Hinchingbrooke

Hear, hear. That is right.

Mr. Hill

I do not want to see that happen here. I am one of those who are convinced that we should not go into the Common Market, because, if we did, the industry I represent would go down farther than it is at the moment.

Mr. Alan Fitch (Wigan)

Not necessarily.

Mr. Hill

"Not necessarily" my hon. Friend says. He is entitled to his view. I am entitled to mine. I am expressing mine now. Nor is it necessarily true that those who live longest see the most.

I would suggest that one method of putting the industry back on its feet would he to get it reorganised by stopping paying interest to the former owners, because they have had plenty out of it—£300 million since vesting day. They have never had it so good. They have never had so much money in their lives. It is time to see that money ploughed back into the industry to meet some of its needs.

Mr. Julian Ridsdale (Harwich)

The reason why I put down my name to these Amendments and spoke in the Second Reading debate was due to my profound shock at the pay settlement in the electricity industry. I know that we had the most reasonable and sincere promise from the Minister during the Second Reading debate, and it has gone a long way to allay fears about the future action of the Government, and I am grateful, too, for the explanation we had from the Dispatch Box this afternoon. I certainly cannot go along with my hon. Friend the Member for Kidderminster (Mr. Nabarro) in asking for the Minister's resignation. Indeed, I hope that the Minister will be Minister of Power for a long time. I thought very carefully whether I should pursue this matter after the Minister had spoken the other day, but in the end I decided to put down my name to these Amendments because there were some furher points I wanted to make during this Committee stage, particularly on wages and productivity, and the second Amendment which we are discussing.

I want to bring home to the Committee the strength of feeling there is that wages should not go ahead of productivity. Surely it is in the national interest that we keep prices stable. How can this be done unless the national interest is taken into account when wage increases are being considered? The Amendment does take this into consideration. I must say that for my part, at the beginning of the pay pause, and looking back on what has happened, I would have advised the Government, if I had had the advantage of hindsight, to have given a general direction to the nationalised industries that it would be in the national interest that wages should not go ahead of increases in production and that the Government would hope that in future this policy would be pursued by the nationalised industries. Surely that is just the kind of example needed throughout all industry today, as, indeed, the Report of the O.E.E.C. on Rising Prices and Productivity brought out just recently. It hinted about our wage negotiating machinery that at the present moment it was antiquated. Indeed, it went so far as to say this: Given the antiquated nature of the institutional arrangements in a number of industries, the weakness of the central bodies on both sides, and a lack of and clearly defined norm for arbitrators to take as a guide when making awards, there can be no assurance that wage increases will be kept in line with the growth of the economy. That is what is hinted at in the Amendment, and it tries to get in the nationalised industries a defined norm which the Government can give to industry and which will keep awards in line with productivity. It is the longer term policies which we are trying to aim at after the pay pause is ended, because in the long term what surely is needed is that we should establish a realistic relationship between the behaviour of incomes and the growth of production.

What we want now is not so much a pay pause, necessary as it is at the moment, but a continuing wages policy, something which shows that that would be just as much in the interests of trade union members as in the interests of the rest of the community. Cannot the Government see that the wages arbitration machinery needs one important modification? The modification would be to take the form of securing adequate representation of the national interest whenever adjustments in wages which were likely to have a significant bearing or otherwise on the economic health of the country were being negotiated. That is the idea behind this Amendment. We want to try to find a norm to which to relate wage increases.

This was done in Australia a few years ago. On the Australian Government's insistence that it should be done, it has enabled wage settlements to be kept in relation to productivity. It is needed in this country, also, as the Report of the O.E.E.C., to which I have just referred shows.

6.30 p.m.

It is for this reason that I consider that we in this Committee should take account of the national interest. I do not want arguments bandied about from one side of the Committee to another on the subject of nationalisation. The situation is much too serious. The question is whether we should take into account the national interest instead of sectional interests and try to ensure increased productivity in the country as a whole rather than in one section of industry. We must take into consideration the needs particularly of those who have been hardest hit by inflation, and that means that we must place a great reliance on restraint at the moment. But that is only for the moment. We want a continuing wages policy based on a norm.

Mr. Willis

I am rather interested in the hon. Member's arguments. Would he allow consumers to be brought into consultation to decide what dividends should be paid?

Mr. Ridsdale

I think that my right hon. and learned Friend the Chancellor of the Exchequer has spoken about a national board to consider all these matters, and the door is open at any time for consumer, trade union and employers' interests to be taken into account as well as dividend restraint as a whole.

The Chairman

This is going far beyond the Amendment.

Mr. Ridsdale

I am grateful to you, Sir Gordon. I was led astray by the hon. Member for Edinburgh, East (Mr. Willis).

This, as I have said, was our purpose in tabling the second Amendment. As for the first, I have paid attention to what the Minister has said, and I see the force of his argument. I had hoped that it would be possible to provide that we should be able to discuss the position of the Board in six months' time. On the second Amendment, I am grateful for having the opportunity of putting forward my point of view, but I do not want to press it at this stage, having been perfectly satisfied with what the Minister said today.

Miss Jennie Lee (Cannock)

When I first saw the second Amendment I was surprised to find it on the Order Paper. If I had been asked I should have said that it was out of order, but obviously I am wrong. It has been scrutinised with the aid of the special skill at the Table. If it is in order, it means that the Minister has it in his power to accept as well as reject it and we as a Committee have it in our power to accept it. If we accept it, it means that the Minister will be directly intervening in the fixing of wages in the mining industry.

Acceptance of the Amendment would mean that the Committee was attaching a condition to the £50 million advanced to the industry. The condition attached is that if any of the £50 million is used for increases of wages or salaries it must be paid back. The Minister has made clear that he does not want to accept the Amendment, but he has not made clear whether he objects to it entirely or whether he objects merely to the modification, allowed for by the hon. Member for Kidderminster (Mr. Nabarro) and others, that wage and salary increases would be in order provided that they were related to higher productivity.

We on this side of the Committee do not accept that proposition in the Amendment. We want to go further. I am concerned, however, to have the Minister's position made clear. Is the Minister's attitude that he is willing to wound but he is not willing to strike? There was a famous occasion in the House of Commons when a former Conservative Prime Minister, the late Earl Baldwin, turned on some of our Press lords and said that they were claiming for themselves the privilege of the harlot throughout the ages—power without responsibility.

Charming things have been said from this side of the Committee about the Minister. I shall not quote names, and I am not concerned one way or the other about these peccadilloes, but I am concerned about a situation in which a Minister of the Crown seeks to exert power but refuses to accept responsibility.

It would be a much more wholesome situation if we said, when we want fuller accountability to Parliament, that we are directly involved in wages and working conditions as well as other aspects of mining. That can be altered, but I do not like this present furtive situation in which the Minister assures us that he cannot intervene directly in wage negotiations—and we know that he has not the power to do so and it would he improper and illegal for him to attempt it—yet, having made that position clear, he then exercises the maximum moral pressure on the Coal Board to sustain the pay pause.

The hon. Member for Harwich (Mr. Ridsdale) expressed sentiments with which I agree. I gathered that he meant that the national interest should take precedence over sectional interests. I agree, and I should like that principle applied to the whole of industry. I should like to see a wages policy applied to the whole of British industry.

It is interesting to find that many arguments once totally rejected from the Government benches are now being tentatively examined and some of them even timidly accepted. I would not for a moment say that all hon. Members opposite think it right that there should be rising dividends in some industries and an ignoring of national interests in some parts of the economy. Many hon. Members opposite are tentatively seeking a way through these problems and they have come part of the journey. They now say that the national interest should take precedence over sectional interests.

Some have advocated a wages policy. I agree, but we cannot have a wages policy for one industry without having it for other industries. We cannot single out the mining industry. The Minister has not dared to do it. He knows that he would not dare accept the second Amendment, which enables the Minister to recover from these advances any amount of wage or salary increases not directly related to increases in productive efficiency.

Why does not the Minister dare take such a step? It is because he knows that the men in the mining industry, angry as they are now, would be angrier still and that this would be the final explosion point. The essential sense of fair play in Britain is such that those employed in other industries would say, "You cannot apply one law to the mining industry which would not apply to cement, steel, and all the rest." Let us have a national wages policy by all means, but we cannot have a wages policy unless we have a profits policy. We cannot have a policy for wages and profits unless we are willing to decide about priorities. Where are our national resources to be spent?

You will recall, Sir Gordon, that a Labour Government, as well as a Conservative Government, appealed to the miners—successfully—to put the national interest above their sectional interest. Sir Stafford Cripps, in the distinguished work he did for Britain and for his party—although he was sometimes in his party and sometimes kicked out—had to say very grim things on occasion. He was fighting for our export trade in difficult circumstances, just as we have to fight for it now.

What the Government are saying to the miners now, however, is, "When you are in a seller's market you have to put the national interest before your sectional interest. Now, when the market is much stiffer, once again you have to put the national interest before your sectional interest." Is that not asking a bit too much? It is, however, at least something that we have reached the stage where we are even discussing such things.

When I vote for this £50 million at a later stage—I do not suppose that we are voting today—I shall vote with a sense of gratitude to the coal industry. I shall not vote believing that I have any right to nag the miners or read them a sermon. I shall feel that this money which is being paid back to help run the industry is only a small bit of what the miners gave to us in the years of the seller's market.

Perhaps the Government are bored with this point which has been made again and again from these benches—but however bored they may be they do not deny its truth or justice. We have been told again today by the hon. Member for Kidderminster (Mr. Nabarro) and others, as on Second Reading, that we must not forget, in the difficult situation in which the country finds herself, that any increase in the price of coal means an increase in the price of steel, timber and the rest. That is true. But it is equally true that any increase in the price of steel, iron, timber, bricks and cement, and of all the other raw materials needed by the mining industry, adds to the price of coal. Why is not the same sermon being read around the ring?

Mr. Ridley

None of the other industries mentioned by the hon. Lady has come to us for £50 million.

Miss Lee

Many other industries have come to Parliament for £50 million, but that is not the essence of this matter. The essence is that the present Government deliberately gave up an industry that can easily make profits—the steel industry—and that those profits are now going back into private hands. That is what I am talking about—the double economics of the Government in this matter.

I do not want to go back to my Second Reading speech, or to other speeches made on that occasion, but I think that the Minister is not so foolish or insensitive or tough not to be aware of the cruel fallacy running throughout his arguments. I do not think that his position is a very gentlemanly one.

If the right hon. Gentleman really believes that the miners have to put the national interest before the sectional interest—and I would agree with him there—he must also accept that that can be done only if the miners feel that they are marching as comrades, shoulder to shoulder with men and women of other industries, and are not being singled out again as the nation's scapegoats.

6.45 p.m.

Viscount Hinchingbrooke

As a jackal of private interests—n the genial phrase of the hon. Member for Ebbw Vale (Mr. M. Foot)—ho has campaigned from the start for a £4 million subsidy for the Cunarder, who rallied his party to support the Government in a £30 million scheme for cotton, who led deputations to Ministers in order that very large sums of public money could be poured into Colvilles, and who, finally, has never said a word—quite the reverse—gainst the Local Employment Act, I rise to support these two Amendments in favour of denying certain moneys to the National Coal Board.

The Amendments are quite simple. The first is as plain as a pikestaff, and my right hon. Friend the Minister of Power understood it. The second Amendment he seemed to cavil at. I presume that his speech today was his own, but I detected some phraseology in it which I have known to emanate from Ministries in the past when they have understood something too well but have not liked the political sense of it. They resorted then to casuistry. That was all too apparent in my right hon. Friend's speech.

It is a curious Amendment and immediately I saw it— had no hand in drafting it—judged that it was the only sort of Amendment on the subject that could possibly pass the Table.

Mr. Nabarro

Yes.

Viscount Hinchingbrooke

My hon. Friend the Member for Kidderminster (Mr. Nabarro) confirms that.

It is a curious Amendment because in effect it would penalise the National Coal Board twice over. The Board would have to pay the same amount back to the Minister as it paid out in increased wages to the miners. I should have thought that my right hon. Friend would have seen that it is not a watertight Amendment in the political sense but has a meaning in the direct sense—hat it is designed to stop the taxpayer's money going into wage increases. Why my right hon. Friend did not say as much and admit as much I do not know. Perhaps he will tell us if he replies to the debate.

My right hon. Friend said that he had not given general directions to the National Coal Board and was not going to give general directions to any Board under his administration. He certainly did not do so to the Electricity Council. I agree with that point of view and thoroughly approve it. If we start a process of ordering the nationalised industries to observe a particular aspect of Government policy, we are clawing back to the central Government industries and services which were never put in the midst of it by the Socialists when they passed the legislation. It is also something which we, as Conservatives, should never dream of doing.

It is much better to disseminate these nationalised industries, to drive them away from the central Government, to break them up as we are doing with the railways, to allow them to go to market for their capital requirements, as is recommended, I believe, in the Herbert Report on electricity and in which we have gone some distance.

The whole philosophy of our approach—which is, I am glad to see, borne out in the decisions the Cabinet have made about wages and prices—is that we should recognise that these industries, as several Members opposite have pointed out, are in a hopelessly insecure position in the public weal where they are neither one thing nor the other. While Members opposite would like, if they were in power, to embrace them in the central Government in order to correct the mistakes—I believe that they think now that they were mistakes—which Lord Morrison perpetrated in this legislation, we should look to the reverse. But, though we have power, we are not doing the reverse. It is not because we are carrying out our philosophy at the pace and in the direction required that we are in the trouble we are.

We are in trouble that, as my right hon. Friend has not the power—and does not wish to have it—to give orders to the nationalised boards, he has to rely on moral persuasion. In fact, we are back again to that old business of Government by exhortation. Everybody is enjoined to become a little Chancellor of the Exchequer. The Chairman of the Electricity Council is supposed to think on precisely the same lines as my right hon. and learned Friend the Chancellor of the Exchequer. Lord Robens is supposed to think in exactly the same terms, whether he has got the money to pay or not, as my right hon. Friend the Minister of Fuel and Power. With the railways, no doubt Dr. Beeching, of whom much is expected and who, of all the chairmen of the three nationalised boards, will repudiate the doctrine the most swiftly, believing as he does in private enterprise, is presumed to put himself in exactly the same framework of political philosophy as the Prime Minister himself. Those things are abso- lutely absurd and as long as the Government go on with government by exhortation, they will make a nonsense of our economy. The Government must depart from it.

The other day, the Electricity Council got away from it because it had the money to pay. Otherwise, it would have had to come before Parliament and the Minister might have denied it the money and might in that way have been able to make it observe the rules, although I do not see much sign of that with the coal industry which is to be given the money out of which it may pay wage increases. The Government have passed the point of no return with the Electricity Council. The Council has the money to pay and intends to pay the new wage rates, and now we are faced with the situation that the Government cannot by moral suasion prevent the railways and the coal industry from following.

I do not know whether what my right hon. Friend said that he said to Lord Robens will be observed. Lord Robens may take this £50 million and pay the wages increase out of it. There is nothing to prevent him from doing that, except the Amendment.

Mr. Willis rose—

Viscount Hinchingbrooke

The first Amendment would prevent it and the second would also prevent it.

Mr. Willis

Only if the increase were greater than any increase in productivity.

Viscount Hinchingbrooke

No. The Amendment says only if the increases were related to production could they be given without a sanction. That sanction would be that some of the money would have to pass back to the Treasury, so that the Board's coffers would be empty.

Mr. Warbey

Has there not been an increase in productivity, so that there would be no return?

Viscount Hinchingbrooke

I do not know where that increase in productivity has come from.

Mr. Warbey

The miners

Viscount Hinchingbrooke

There are all sorts of rules which should be applied.

Mr. J. T. Price (Westhoughton)

If the noble Lord says what he means, we shall understand.

Viscount Hinchingbrooke

I have already pointed out that the Amendment is a peg on which to hang a major political argument and that it is the only peg which would pass the Table. Do not let us waste time debating the meaning of individual words.

I heard with astonishment from the Minister that the Coal Board was unable to borrow from the banks. Is not this a revelation? If he is to speak later, perhaps my right hon. Friend will dwell on that. It is appalling that a great industry cannot go to the banks and get accommodation. Are we to suppose that the financial institutions of the City of London, the great banks, will not give accommodation to a vast organisation employing hundreds of thousands of persons? That seems to he fantastic. The Board must have power to go to the banks and borrow for its running day-to-day expenses, its cash requirements and other things. If it wants, say, £5 million, £10 million, or £15 million to tide it over its current difficulties, are we to understand that it cannot do that? I hope that my right hon. Friend will tell us. If it is true that the Board cannot go to the banks, the coal industry is in a more absurd suspense situation than can be imagined for a vast industry.

How else can the coal industry get out of its difficulties? My hon. Friend the Member for Kidderminster will not agree that prices should be allowed to rise. That is one of the ways by which Parliament could be saved this annual indignity of having to vote these vast sums. If coal could be sold at higher prices, there could be an internal recoupment of the money and we should not be faced with pouring out the taxpayers' money year by year to save the industry from bankruptcy. It is contended that if prices were higher, the industry would become uncompetitive and that oil would be used in increasing quantities and that greater demands would be made to my right hon. Friend to allow coal to be imported from the United States. So there is a stopper at the price end of this argument.

The only other valve to safety which seems to present itself is to lower costs, We have these annual wage increases and a policy of over-full employment which are calculated year by year to increase the costs of the industry and we have to pass these vast capital programmes. I was astonished to hear the speech of an hon. Member opposite, a miner, when the other day he said that he had been talking to his friends in the Scottish mining industry who had told him that Glen Ochil Rothes and Bowhill were projects which his friends had never thought likely to produce a profit or to redound to the credit of the Coal Board.

It is fantastic to think that after ten years of Conservative Government we have another groundnuts situation in the coal industry. What are my right hon. Friend and the Cabinet doing about that situation? That this grandiose "Plan for Coal" should have been accepted and that people connected with the mining industry, not only hon. Members opposite but others elsewhere, could begin to say that these fantastic projects were never likely to produce a dividend or profit or any basis for interest is a situation about which the Cabinet ought to do something.

If prices are fixed and if costs are relentlessly rising, there is no safety valve except the annual vote year by year of taxpayers' money. How long is the taxpayer to put up with it? There is a handful of hon. Members on this side of the Committee who year by year have been parading the indecent behaviour of the Government and occasionally have been able to go into the Lobby to show our detestation of this behaviour. Behind it all there is a desire that an efficient and well conducted coal industry should prevail, and that it should produce coal at steadily diminishing prices and that it should produce gradually increasing wages for those employed in it.

But we see nothing of the kind taking place. Is it because nationalisation is a failure in itself? Is it because of the lack of internal competition in the industry? My right hon. Friend says that he is thinking about these matters, but he and his predecessors have had ten years' experience. From 1946 to 1951 they had five years' experience of the work of the industry and since then the Conservative Party has been in office for another ten years. At least two Ministers of Fuel ago we should have had a plan for the reorganisation of the coal industry, not a plan for the recapitalisation of the industry on these grandiose lines, but something to render this vast industry competitive. Had that been done, my right hon. Friend would now be able to come to Parliament and say that the industry was ready.

I should like to use this occasion to force upon the Government a crash programme of reorganisation. I should like to oppose the Bill tonight by carrying both the Amendments into the Division Lobby, if my hon. Friend the Member for Kidderminster, who is responsible for them, wishes to do that. I should like the Government to be defeated on this issue and I should like the fact that they are not to get their £50 million to force them into an immediate crash programme for the reorganisation of the coal industry.

We cannot go on as we have been doing year after year stomaching this situation. It is a weak-kneed way in which the Treasury and the Ministry of Power come to us, knowing that Parliament on the whole is prepared to sacrifice the interests of the taxpayer in this absurd situation. I am very distressed to think that my right hon. Friend—for whom I have the very highest regard; he is a man of the utmost integrity—is allowing himself to be drawn along in this situation from day to day without showing the volition and purpose of which I know he is capable.

7.0 p.m.

Mr. Finch

It is evident from the debate on these Amendments, and, indeed, from the statement by the right hon. Gentleman, that the miners are faced not with a pay pause but a pay freeze, and that if they produce more it will have no effect from the Government's point of view on any wage claim that they make.

This is a very serious situation, not only for the mining industry but for industrial workers generally. What hon. Members opposite have said throughout the years has been, "If the industrial workers deliver more goods, they will receive a fair share of the results of that increased productivity." It has been the argument of the Chancellor of the Exchequer on Budget days—"Increase productivity and you will be able to increase wages." That has been the theme on every occasion when economic matters have been debated in the House.

But today we are told that if there is increased productivity no recompense is to be given to the miners suffering from pneumoconiosis who work in the bowels of the earth at seams 2 ft. 6 in. or 3 ft. high. Day by day the miners are exhorted to increase their production. But it will not result in any increase in wages.

What has been the position in the mining industry during the past four years? Average wages have risen by 6 per cent. and productivity has gone up by 16 per cent. Not many industries can show such an increase. Yet this is the industry which today is being attacked by hon. Members opposite. The men in this industry have delivered the goods through their hard work. They have responded to the call of the country in the present circumstances by increasing productivity by 16 per cent. in four years, while wages have gone up by only 6 per cent.

Can a miner be expected to do better than that? What more do hon. Members opposite want him to do? I am sorry that the hon. Member for Cardiff, North (Mr. Box) is not at the moment in the Chamber. I listened to his speech during the debate on coal last week. He said that near Christmas the miners were working harder, that there was a bigger output near Christmas, and that Christmas was an incentive. There was an inference that the miners are not doing their duty throughout the year. What does the hon. Member expect? Of course a miner may work a little harder to get a few extra shillings before Christmas. May the miner never relax for a few minutes? The attitude adopted by certain hon. Members opposite is that, in spite of all the difficulties, there must be no relaxation by the miners.

The miners have delivered the goods. It may be argued that production is better in one district than another. That is true. It may be that certain districts have older pits. There are other factors. In the anthracite area in West Wales the pits are mere holes in the ground. Conditions vary. It may be that the figures from the Midlands are better, but we should look at the coalfields generally. I can tell hon. Members opposite that the miners have done their duty by the nation.

As my right hon. Friend the Member for Llanelly (Mr. J. Griffiths) has said, and as I have previously said, when the demand for coal was high prices were kept stable. The mining industry was treated not as a commercial concern in that respect but as a social service and it could not increase the price of coal. Therefore, one could argue that the mining industry helps to stabilise prices.

One would have thought that if coal was such an important factor and in those years the industry stabilised the prices, there would have been no inflation and that other prices would not rise. But prices as a whole—although not coal prices—did rise as a result of the Government's policy. As my hon. Friend the Member for Cannock (Miss Lee) has said, costs went up in the mining industry, but that was not due to the miners or to miners' wages.

I would ask the right hon. Gentleman how he will measure the wage pause or wage freeze. He must have some yardstick. Is it simply a blind statement—"On no account is there to be an increase in wages, irrespective of increased productivity." I tell the right hon. Gentleman that I am amazed at that. It will cause consternation among our industrial workers. What is more, it will discourage increased production. It will discourage the men, for they will say "It does not matter what we do, because it will not result in any increase in wages." This will result in a very serious position in the industry. I hope that the right hon. Gentleman will explain to us exactly what he means.

Subsidies have been mentioned. The coal owners were subsidised years before nationalisation, and subsidised out of the Exchequer. But up to now the mining industry has not cost the tax-payers a penny. Private industry costs the taxpayer something—agriculture, shipping, steel and textiles; they are taking money out of the public purse. It may be said that that is necessary in the circumstances, and that may be so, but they are taking it and are a drag on the economy in that respect. The miners have never been a drag on the economy. They have battled on in their own way without the slightest assistance from the Government. Having regard to the importation of American coal and the cost of mining subsidies and so on, the right hon. Gentleman might very well have come to the House of Commons and said: "I will give some assistance to the industry in order to tide it over the grievous position in which it finds itself owing to rising costs."

All that I and my hon. Friends can do in this debate is to vote for the Bill and against the Amendments. I beg the right hon. Gentleman to tell us clearly what he means when he says that he is going to advise or talk to Lord Robens and that it will not be a "direction". All these are vague terms. We are told that it is not "direction" but "advice." Presumably, he will say to Lord Robens—"As a matter of advice—never mind what the miners do, never mind increased productivity—wages cannot go up." That is going against past arguments of right hon. and hon. Gentlemen opposite. As I have said, we are faced with, not a wage pause, but a wage freeze, and I hope that the right hon. Gentleman will retract to some extent from what he has already said in this respect.

Mr. Robert Cooke (Bristol, West)

I am not rising at this late hour to attack the miners. That has not been the purpose of my hon. Friend's this afternoon. What we have been criticising has been the policy of the Government and the National Coal Board.

I would not support everything that my hon. Friend the Member for Kidderminster (Mr. Nabarro) has said today, nor some of the ways in which he said it—I am not such a skilled Parliamentarian as he is. Nor am I going to submit twenty questions to my right hon. Friends. However, I have had to sit in the House for nearly five years voting more and more money for the nationalised concerns, and today we are being asked to give a further £50 million—

Mr. Willis

To "lend".

Mr. Cooke

—to provide—if hon. Members prefer that word—a further £50 million to be poured down the bottomless pit of nationalised coal.

My noble Friend the Member for Dorset, South (Viscount Hinching-brooke) said that government by exhortation was no good. We are not asking for that. We are merely suggesting that instead of £50 million, £25 million should be provided, and that that should be a fair discipline to the Board to mend its ways and reorganise itself as soon as possible to see whether it cannot stop this steady drain on our finances which has gone on for so long.

Mr. Willis

Apparently the hon. Member for Bristol, West (Mr. Robert Cooke) has not sat through agricultural debates and listened to the House voting each year £250 million to an industry, without any opposition from the hon. Member for Kidderminster (Mr. Nabarro), or the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke), even when it has been generally acknowledged by the Minister that money has been wasted in respect of certain of those grants. None of the hon. Gentlemen opposite has ever come along in anger to denounce what the noble Lord called the indecency of it.

As I understand it, the first Amendment is to reduce the amount to be granted to the Board to compel it to undertake what the noble Lord called a crash programme of reorganisation. What does he mean by that? Does he mean that mining villages in Scotland, in Durham, and in Wales, have to be made derelict? Is that what he wants? That is what he is asking for. Does he want to see the poverty which we saw in many of these villages before the war, where many a miner had no furniture in his home apart from a table, a chair, and a bed in which the family took turns to sleep? Is that what the noble Lord wants so that the Board can cut out uneconomic units and show a profit? That is what the noble Lord and the hon. Member for Kidderminster have been advocating.

Mr. Nabarro

Nothing of the sort.

Mr. Willis

I admit that the language is a bit more euphemistic. The noble Lord does not call it a rationalisation leading to unemployment, but a crash programme of reorganisation. It is a fine sounding phrase, which either means something or nothing. I do not know what it means, but I assume that it means that this is what must happen to the coal industry, and I for one would not stand for that for a moment.

The noble Lord referred to the indecency of the Board coming here year after year asking for money. My hon. Friends have pointed out ad nauseam that this industry has saved the country vast sums of money. It has served a valuable social function in recent years. It has had to undertake social tasks which it should never have undertaken if it was to be run as an efficient undertaking. It has also served economic purposes by subsidising other industries. It has had to bear the cost of imported coal. It has had to do a hundred and one things which ought to have been paid for by the Government. Yet, when it comes along and says, "We have done all this. We should now like to borrow money to get on with our programme", it is considered to be indecent.

Why should it be indecent for the Board to ask for money? I never hear hon. Gentlemen opposite using language of this sort about private industry when it asks for money. I have never heard hon. Gentlemen tell farmers that they are indecent. Rather the opposite. We are always told what a fine group of men they are, and what an excellent job they are doing for the nation by producing the food we need and easing our balance of payments position.

7.15 p.m.

Surely that argument applies to the miners. I do not think that there is anything indecent about an industry, which has been compelled to undertake burdens which it ought not to have undertaken, saying that it would like to borrow money. The trouble about the nationalised industries is that we still accept the Tory standards by which to judge them. We judge their usefulness to the nation and their efficiency in terms of profit. It was Sir Stafford Cripps who pointed out many years ago that profit is the test of private enterprise, and that it should never be the sole test of a public industry, because we expect from a nationalised industry a different code of conduct from that which we expect from private enterprise. The trouble is that we tend to forget this, and to judge this industry in purely private enterprise terms of profit. The hon. Member for Kidderminster puts forward this argument every time the subject is debated.

Mr. Nabarro

The hon. Gentleman has evidently neglected to observe that the Tory Party fought the General Elections of 1951, 1955 and 1959 on conducting the affairs of the nationalised industries on a commercial basis and not as a social welfare club. The reason for my quarrel today with my right hon. Friend is that he is not conforming to those election pledges which I gave to my constituents at each of those three General Elections.

Mr. Willis

The hon. Gentleman has confirmed what I was saying. The trouble is that we apply these tests, but when we judge like that we do not act like that. We make speeches about it in the House. The hon. Gentleman must remember that the Board has not been operating as a private firm would operate. As has been pointed out several times, it has had to undertake burdens which should never have been placed on it, but in carrying out its tasks it has served the national interest just as much as it does when it produces coal.

As has been pointed out, the second Amendment makes nonsense, and it has now been admitted that it was tabled merely for the purpose of a debate on the pay pause.

Mr. Nabarro

A vehicle.

Mr. Willis

A peg on which to hang a debate on the pay pause, and part of today's debate has been on that topic. Once again, I am rather entertained by the fact that the Tories have suddenly discovered the great truth that increases in incomes should not exceed the rate of productivity, but they apply this only to the workers. I do not mind an income freeze, but let us start with the landlords, the house owners, the company directors, the shareholders, and the gentlemen operating on the London Stock Exchange. I am sure that if the hon. Gentlemen started there he would find it much simpler to get agreement with the trade unions concerned in this matter. It is because the pay pause is not an endeavour to limit incomes nationally that the trade union movement objects to it.

This great truth that the Tory Party has suddenly discovered was enunciated a long time ago by Sir Stafford Cripps. But he did not say, "I am going to freeze wages, and even if you increase your productivity you will get no more wages." That is what the right hon. Gentleman has told the miners today.

Mr. Wood indicated dissent.

Mr. Willis

Oh, yes. When the hon. Member for Kidderminster interrupted the right hon. Gentleman's speech, and the Minister explained what he meant more clearly, the hon. Member for Kidderminster, with his customary acumen, observed, "This is a pay freeze," and rubbed his hands with delight.

Mr. Nabarro

The hon. Member's quotation from my intervention is correct. I interpreted my right hon. Friend's statement as a pay freeze. But I did not rub my hands; I hit them together and then I said, "The Arctic".

Mr. Willis

Whether or not the hon. Member rubbed his hands he was certainly delighted that it was a pay freeze. He certainly did not object to the policy. If we are honest with ourselves today we shall recognise that the Amendment was put down simply and solely for the purpose of allowing the Minister to stand up to the miners and to make a statement that would put the Government in a strong and determined light.

The hon. Member was displeased over the increase that was obtained in the electricity industry.

Mr. Nabarro

I was not displeased.

Mr. Willis

The purpose of the Amendment was to give the Minister an opportunity to state in public, in the House of Commons, emphatically what he wants to do and what he would like the coal industry to do—and what he wants it to do is to accept a pay freeze.

This is something new. I have heard hon. Members recently talking about Sir Stafford Cripps doing this, but he never did it. What he said was correct, namely, that incomes should be no greater than increases in productivity. That was not a very profound truth to have discovered, even though the Tory Party seems to be highly delighted at having had sufficient intelligence to discover it now. What we are getting today is quite different, and it is to apply not only to the coal industry, although that is what we are now discussing, but to other industries. That is why the situation is so serious. How does the Minister expect a miner to put his back into his work and get the best he can out of it if the Government tell him, "Even if you increase productivity you will not get increased wages"? I have many miners in my constituency.

Mr. Nabarro

So have I.

Mr. Willis

I can assure the right hon. Gentleman that they will not be very enthusiastic when they are told that there will be no reward for increased productivity. But they are just as fond of their country and as willing to work for it as anybody else—in fact, they are more willing to work for it than most hon. Members opposite.

Mr. Nabarro

Come, come.

Mr. Willis

The Minister has made a serious statement, and has confronted the miners with a serious situation. I cannot help thinking that it will cause untold difficulty in the industry. In putting down the Amendment, hon. Members opposite have made the job of Lord Robens and the Coal Board infinitely more difficult. That will be the outcome. Hundreds of thousands of men all over the country are involved—

Mr. Nabarro indicated dissent.

Mr. Willis

The hon. Member for Kidderminster shakes his head, but at one time he seemed to think that if the Surtax payers did not get more they could not be expected to work harder to increase exports, but apparently the miner is not to get any increase at all for working harder for exactly the same purpose. That is the philosophy of the hon. Member. But the miners are not so foolish as he seems to think. Many of them who have had a life full of bitter and tragic experiences are not so foolish as to accept one thing for themselves and something else for somebody else. It is quite wrong to ask them to do so. If the hon. Member and his hon. Friends really had the national interest at heart they would have refrained from putting their names to the Amendment.

Mr. T. Fraser

We have had a very wide-ranging debate on the two Amendments. Hon. Members opposite have frequently made clear the fact that they are very concerned about the position of the coal mining industry. I hope they appreciate that hon. Members who sit on this side of the Committee are also very concerned about the industry. They have told us how concerned they are about the deficit that has been accumulated by the Coal Board. I hope that they do not think that we are happy about it. We are also concerned.

The hon. Member for Dorset, South (Viscount Hinchingbrooke) became quite worked up and demanded to know whether the Coal Board would be administered as a commercial enterprise. I hope that the Minister will tell us whether the Board, over the years, has been encouraged to operate as a social or as a commercial enterprise. We have had too much double talk about the position of the industry. We have heard moans from hon. Members opposite this afternoon about this annual event, when we discuss "yet another hand-out to a nationalised industry," but virtually the only industries which are not invited to accept hand-outs are the nationalised industries. The hon. Member for Kidderminster (Mr. Nabarro) said that in their election propaganda over the last ten years the Tories have been saying that the Coal Board should operate as a commercial enterprise. They have been guilty of deliberately misleading the people.

Mr. Nabarro

I have not.

Mr. Fraser

Oh, yes—the hon. Member has.

Mr. Nabarro

Oh, no.

Mr. Fraser

Oh, yes. Hon. Members opposite have been very much in favour of the price of coal being controlled by the Government since 1951. The hon. Member for Dorset, South did not know why the Coal Board should not have gone to the money market and obtained its money in the ordinary way. It did not do so for obvious reasons. It did not know what income it would be able to get over the years, or what prices it would be able to get. For the first ten years of nationalisation the consumers, including all the industrial consumers, were getting coal from £1 to £2 per ton cheaper than the price being paid by their continental competitors—and it was the Government who kept down the price of coal. It is estimated that if the Government had allowed the Board to get the continental market price of coal it would have accumulated £2,000 million.

The other day the Parliamentary Secretary suggested that it would have been immoral for the Coal Board to have done this. Let us agree that the Board would not be expected—a nationalised undertaking would not be expected—to follow the practices of private enterprise—

7.30 p.m.

Mr. J. Griffiths

It would show more morality.

Mr. Fraser

Of course we think that it would show more morality. Is it not the fact that the Coal Board has this deficit because the earning capacity of the Board was restricted by the Government over the years? This is surely true. When hon. Gentlemen opposite say that they want to see the Board carrying on its business on the normal competitive commercial basis, how on earth can they at the same time justify the Board being asked to bear the loss of £70 million on imported coal, which it did not want but which the industrial consumers required, and the Government had to negotiate to get from abroad and for which it instructed the Board to be responsible?

Was not the Board required during this period to perform a social purpose? Was not it asked to render a service to the whole of society? Of course it was. Let us have no more double talk about this. I hope that the Minister will come clean with us and tell us whether he now expects, and has always expected, the National Coal Board to carry through its business on normal commercial lines. If this is so, I hope that the Minister will tell us when he proposes to put the finances of the Board in decent order by requiring the taxpayers now to pay the bill for all those social purposes which have been served by the Board over the years and which have caused it to accumulate what appears to be a very unhealthy deficit.

I do not think there is any getting away from this, at least not if hon. Members opposite are willing to face the facts of the situation. But they are not They seem quite unconcerned about the effect of their conduct not only on the Board but on the men of different political persuasions who play a part in this public enterprise. I should have thought that there was—

Mr. Nabarro

Two-thirds of them vote Tory now.

Mr. Fraser

Two-thirds is just two-thirds, it is not three-thirds. Presumably the other one-third do not vote Tory. It may be that some of them vote Labour. But in any case, I should have thought that when hon. Gentlemen opposite attack the Coal Board in the way in which they have done, pretending as they have done that the Board all the while has been free to conduct its business on normal commercial lines, they were making it a little more difficult to keep men of real quality in the service of the Board. In any case, much that has been said in this debate will be construed by the ordinary working miners as an attack on them.

Mr. Nabarro

Never.

Mr. Fraser

I am much closer to the miners and the miners' £10 a week than I am to the directors of the National Coal Board. I happen to know them. I happen to live among them. For a great many years of my life I have worked among them. Many of the speeches made this evening have been attacks on the wages of the miners. The only inference to be drawn from those speeches is the miners are getting too much for doing too little.

Mr. Skeet

The hon. Gentleman is talking about increases.

Mr. Fraser

The hon. Gentleman says we are dealing with increases in wages. Over the years hon. Gentlemen opposite have been dealing with increases in wages, but they have never thought that increases for the miners were justified.

Hon. Gentlemen opposite have been saying that the Board should pay. I think that the Government should face the responsibility for the cost of the social services performed by the Board. Were the Government to do that, it would not be necessary to raise the price of coal. I am not in favour of the price of coal going up. Hon. Members opposite do not want the price of coal to go up, but they are against the wages of miners going up. The Board has to put its house in order, but hon. Members opposite are not yet telling us how the Board is to do that or whether they are in favour of the Government asking the taxpayer to meet, say, the losses on imported coal—a simple thing like that. Does the hon. Member for Kidderminster tell me that he is in favour of the Board meeting the cost?

Mr. Nabarro

All I want to say to the hon. Member is that he has misquoted me. I did not say that the price of coal must not go up. I said that the economic consequences of the Government's policy of raising the price of coal would inevitably be to hasten further switching over to oil and thereby the Board would sell less coal and would go deeper into the red. I did not say that the price of coal must not go up. I merely observed what would happen if it did go up.

Mr. Fraser

The hon. Gentleman is splitting hairs—

Mr. Nabarro

I am not.

Mr. Fraser

The hon. Gentleman has not answered the most important question which I put to him. Does he think that the Board, out of its receipts from coal, should meet the cost of this social service which it has rendered to the whole community? Should this burden be carried by the Board, a burden which is not carried by the Board's competitor, the oil industry?

Mr. Nabarro

Having regard to the conditions of the Statute of 1946—which was framed by the party opposite and passed and lauded by the party opposite—yes, of course, the Coal Board should bear it. Because the party to which the hon. Gentleman belongs wrote into that Statute a statutory responsibility that the Coal Board should supply, on a monopoly basis, the whole of the demand for coal in Great Britain. On that, it should bear the loss on imported coal.

Mr. Fraser

The hon. Gentleman is now talking absolute nonsense. He says that because a Statute made a certain provision in 1947, at no time should we ask that that Statute should be altered. But he is asking that a Bill now before Parliament should be altered. All I am suggesting is that the Bill might have been altered in a different direction.

Mr. Nabarro

Ah, that is different.

Mr. Fraser

Of course it is different. The hon. Gentleman and his friends in the Institute of Directors must know that they have derived a very considerable—

Mr. Nabarro

Is my hon. Friend the Member for Willesden, East (Mr. Skeet) a member of the Institute of Directors?

Mr. Skeet

No.

Mr. Nabarro

There you are.

Mr. Fraser

The answer is in this book—

Mr. Nabarro

I am, but my hon. Friend is not.

Mr. Fraser

I was referring to the hon. Gentleman.

Mr. Nabarro

Let us vote.

Mr. Fraser

The hon. Member for Kidderminster has had his say and now he is saying, "Let us vote." He has heard his own voice and now he says. "Let us vote." All that he was concerned about in moving the Amendment was that he should hear his own voice and talk in this Committee with his 20 irrelevant questions on the topic of this Bill.

The coal industry has been asked to carry a burden which has never been asked of any private industry. Hon. Members on this side of the Committee think that the finances of the Board ought to be put in order. That can be done only by the taxpayer being asked to bear the burden imposed on the Board by this Government and by all Governments since 1946. I said that the other day, and I say it again.

I cannot understand hon. Members opposite who think that it was right to require the Board to incur losses by selling coal at less than the cost of production. I cannot understand hon. Members opposite who think that it was right to require the Board to incur losses by importing coal to supply industry's needs. I cannot understand hon. Members opposite who say that it is right to require the Board to pay compensation for subsidence caused by the extraction of coal by the private enterprise industry before nationalisation. It would be even more reasonable to ask the oil industry to bear the cost of Suez because the whole operation was aimed at protecting the oil interests. Hon. Members opposite have had their fun once again.

Mr. Nabarro

It is no fun.

Mr. Fraser

They have attacked the coal industry. They have attacked the miners. They have pretended that they want to see the House of Commons put in the position of negotiating miners' wages.

Mr. Nabarro

No.

Mr. Fraser

If the Minister were to be responsible and if the second Amendment were carried, as Lord Robens said recently, he would require to tell the National Union of Mineworkers what the instructions to him were and the union would then have to negotiate with Minister. If the Minister were to be in the position of negotiating, the negotiations would ultimately come on to the Floor of the House of Commons. There is a need for more accountability for public enterprise industries on the Floor of the House of Commons, but I do not think that Parliament is competent to negotiate the wages of workers in any one of these industries.

Mr. Willis

If it were, Heaven help the workers under a Tory Government.

Mr. Fraser

All wage negotiations must be left to people outside the House. They must be left to trade unions and employers, whoever they are for the time being. As my hon. Friend the Member for Bedwellty (Mr. Finch) said, in the last four years there has been an increase in wages of about 6 per cent. In the same period the increase in output per manshift has been 16 per cent. In seeking to placate his implacable hon. Friend the Member for Kidderminster the Minister went too far today. He went very much farther than he went on earlier occasions. What he said today seemed to come perilously near to giving a direction to the Board. In seeking to show how unworkable the Second Amendment was, the Minister said that the pay pause would require to be observed and that, even where there were productivity increases or, to quote the words of the second Amendment, "increases in productive efficiency", the sanctity of the pay pause would be observed and no wages increase would be granted.

I thought that the Minister went too far today. On Second Reading I thought that he was leaving the Coal Board to conduct the negotiations with the union appreciating that the Chairman of the Board was aware of the policy of pay pause, of which the Chancellor of the Exchequer is presumably the author. In winding up on Second Reading the Parliamentary Secretary referred to the full and free discussions which the union would have with the Board. I hope the discussions will be full, frank and free, as they have a right to be. I hope that the Minister will assure us that nothing he said this afternoon will impinge upon the freedom of negotiation which there must be in the mining industry, as in all other public industries, in the matter of wages.

7.45 p.m.

Mr. Wood

I think that all hon. Members will agree that a number of the points we have been discussing in the last few hours have been repetitions of many of the points covered on Second Reading, to which my hon. Friend the Parliamentary Secretary replied. I will do my best to reply to the important points which were not dealt with then. I will certainly try to deal with the matter which has occupied a great deal of attention today, namely the pay pause.

My hon. Friend the Member for Willesden, East (Mr. Skeet) asked whether any of this money would be used for servicing the debt, to add to the interest payments of the Board. It is clear that the total deficit at the end of this year will have an interest content, and to that extent therefore the money needed to bridge the gap, which I have described before, between the Board's internal funds and the total accumulated deficit, will naturally contain a portion representing the Board's interest payment.

My noble Friend the Member for Dorset, South (Viscount Hinchingbrooke) seemed surprised and very shocked by my statement that the Board was unable to borrow from the banks. The explanation is not very complicated. The fact is that the Board is a regular customer not of the banks but of me. It is the Minister who makes advances for the day-to-day needs of the Board. Therefore, I do not think that it is surprising, particularly in the stringent credit circumstances of the present day, that the Board cannot gain an accommodation from the banks. Therefore, an accommodation from the banks is no answer to the Board's present problems.

My hon. Friend the Member for Shipley (Mr. Hirst) had a point on what he called the non sequitur of my argument about the gap between the £60 million internal funds and the £90 million odd accumulated deficit at the end of the year. I do not yet understand what the non sequitur was. I explained that there would be that gap, towards which part of this £50 million at the end of 1961 would be directed.

My hon. Friend the Member for Shipley and the hon. Member for Hamilton (Mr. T. Fraser) asked whether the industry should be a social service or run on commercial lines. My answer to that is to point to the Statute, which plainly puts the industry in the position of being a commercial enterprise with social obligations. It has been apparent from this afternoon's speeches that many hon. Members will agree that the Board has certain social obligations.

I do not think that we shall achieve a very constructive move forward by arguing about the burdens of the past. I am sorry to say that many coal debates of the last year or two, and perhaps even earlier, have centred on the burdens of the past. I do not think that this will be very relevant to our attempts in the future, which I hope will be attempts together, to make the industry efficient. What we are determined to do is to make the industry viable in its present condition. My hon. Friend the Member for Shipley complained that the Bill did nothing towards it. This is exactly the position which I have explained on several occasions, both to my hon. Friend the Member for Kidderminster (Mr. Nabarro) and to the House of Commons. These are not fundamental proposals. These are proposals designed to hold the position until the Chairman of the Board and I can agree proposals which we can put before the House of Commons to make the industry permanently viable and profitable.

Mr. Hirst

I appreciate what my right hon. Friend has been saying. My point on the figures which he said he did not understand was this. The mere fact that the Board has a balance sheet deficit of £90 million but only £60 million of resources, which I assume are cash resources, does not necessarily mean that it needs so much money at so early a time.

Mr. Wood

It means, I can assure my hon. Friend, that the money which it must have if it is to continue in business is something more than £30 million at the end of the year. That is the proportion of the £50 million in the Bill which the Board will need at the end of 1961.

Mr. Hirst

What has happened to the £60 million?

Mr. Wood

They are the internal funds already in the possession of the Board. They are not affected by the Bill and that is why the Bill is drawn in this way.

The hon. Gentleman the Member for Midlothian (Mr. J. Hill) spoke about the co-ordination of the coal industry with other fuel industries. That has been a frequent topic in our debates and I have often explained that ample arrangements have been made for co-ordination, but I agree that this depends on the meaning one places on that word. I have often explained that if by coordination people mean dictation of the kind of fuel each consumer should use, then that is not the kind of co-ordination for which we should aim. Nor is it co-ordination if it is in the sense of fixing certain shares of the fuel market, which would be necessary, if we insisted on consumers using a certain type of fuel. Co-ordination should be broadly to bring industries along and try to satisfy the particular needs of consumers which have changed through the years.

Most of our discussion has centred on the second Amendment, which was designed to try to maintain the pay pause. My hon. Friend the Member for Dorset, South pointed out that he realised its possible inconsistencies and inadequacies but said that he was anxious to support its being placed on the Order Paper in order to serve as a peg on which the debate could take place.

I must make it clear, particularly in answer to the right hon. Gentleman the Member for Llanelly (Mr. J. Griffiths) that I have said nothing new whatever this afternoon. I have merely said that a pay pause should be a pause in pay. I should not have thought that that was any very new doctrine to suggest to the Committee. It has been perfectly evident since the Chancellor of the Exchequer made his statement last July that he was anxious that there should be for the present—and earlier this afternoon I emphasised the words "for the time being"—no increases in incomes. The Chancellor made it perfectly clear in July—and later in debates—that the Government intended to set an example of this pay pause in the sector in which they have responsibility. That is all we have done and that is all I have said we should do.

I merely suggested that the Amendments would not serve the purposes of the pay pause, because the Government were anxious that there should not be, for the time being, any increases in money incomes, whether or not they were directly related to productivity. The hon. Gentleman the Member for Edinburgh, East (Mr. Willis) put words into my mouth to suggest that I had stated that increased productivity would bring no reward. That is not what I said.

If, in fact, productivity in the coal mining industry increases, then quite clearly in the Government's view, and no doubt in the view of the National Coal Board, the case for an increase, when the period of the pay pause was over, would be very much stronger than it would without an increase in productivity.

Mr. Willis

Meanwhile, no matter how much the coal industry might increase its productivity the Minister has just said that there will be no increases in wages.

Mr. Wood

As I have said, the Government's policy since 25th July has been that during the period of the pay pause—

Mr. Willis

We do not know how long that is.

Mr. Wood

No, we do not; we shall have to wait and see—there should be no increases in money incomes, and the Government have tried to set an example in the sector in which they are wholly responsible.

There has been a difference of opinion this afternoon among hon. Members, and the hon. Lady the Member for Cannock (Miss Lee) about where the responsibility for these matters should lie. The right hon. Gentleman the Member for Easing-tong (Mr. Shinwell) seemed to make it clear that it should remain where it is at present; with the National Coal Board. The hon. Gentleman the Member for Ebbw Vale (Mr. M. Foot) suggested that direct responsibility should rest with the House of Commons. I ask the hon. Member for Ebbw Vale seriously to consider just where that would take us, because if, as he suggested, we are to assume direct responsibility for wages in the coal mining industry, we are automatically assuming responsibility for over a half of the Coal Board's expenditure.

Of course, we could not stop there. We could not stop at wages and we should continue by taking over the whole administration of the coal industry—the Minister and Parliament—and we could not stop even there; we should be making ourselves largely, if not entirely, responsible for the whole administration of the nationalised industries.

The hon. Lady the Member for Cannock suggested that I was guilty of being ungentlemanly, I think—

Miss Lee

Power without responsibility.

Mr. Wood

That seems to place before us the whole dilemma in which we are. It seems to ignore the rather delicate relationship that must exist between the Minister, on the one hand, and the chairmen of the nationalised industries, on the other. I do not believe that I have been in any way inconsistent in what I have said. I have not added to what I said the other day, except to define the pay pause, which every one knew anyway.

I would remind the Committee of what I said earlier in answer to the right hon. Gentleman the Member for Easington. The hon. Gentleman the Member for Hamilton made these remarks at the end of the Second Reading debate: The Minister"— That is myself— went on in the course of his speech to tell us that he appreciated that there was an application for a wages increase made by the National Union of Mineworkers to the National Coal Board and that he had communicated to Lord Robens the Government's pay pause policy. I think it was very proper that the Minister should do that, and I do not think that any of us would quarrel with anything that he said in this regard this afternoon."—[OFFICIAL REPORT, 29th November, 1961; Vol. 650, c. 546.] In my view I have not added or subtracted anything I said on that occasion, which the hon. Member for Hamilton said was "… very proper." I fully appreciate the motives which have compelled some of my hon. Friends to add their support to the second Amendment. The first Amendment, however, seems to be more questionable than the second. It would destroy the whole purpose of the Bill, which, I remind hon. Members, obtained an unopposed Second Reading last week. As I say, I appreciate the motive which led them to support the second Amendment. The hon. Member for Harwich (Mr. Ridsdale) made a proposition which would win a great deal of support among many hon. Members, when he suggested that he thought it would be a very dangerous thing if wages went ahead of productivity. He pointed out the need, of which we are all conscious, for a long-term policy after the pause ended. Those are matters which are in the minds of us all and about which most hon. Members would agree—privately if not publicly—that the need for some conformity between wages and productivity should continue to be kept in mind if we are to avoid the difficulties which we are now trying to put right.

The hon. Member for Dorset, South, apart from pointing out the shortcomings of the second Amendment, asked why I was unwilling to accept the spirit of it. In my opinion an attempt by myself, as the Minister, to place on the Chairman of the National Coal Board a statutory restriction of this kind, or any kind like it, would be bound to have the same effect in the conduct of the wage negotiations as if I had actually given him directions on what to do. It would be bound to transfer the responsibility for the wage negotiations from the Board to the Minister and that, I pointed out earlier, would have the most undesirable consequences.

The hon. Member for Ebbw Vale suggested, I think, that my right hon. and learned Friend and I do not care what happens to this industry. The hon. Member does a great disservice—as do all such suggestions—to the industry. I have hoped and waited in the last two years for hon. Members, in a constructive spirit, to make suggestions which will really redound to the future prosperity of the industry. I feel strongly about its prosperity and I want it to be on a sound and permanent footing so that we may remove most of these rather sterile arguments which at present divide us. I want us to move on to a time when the whole industry can go forward and earn profits and be not only a service to the nation but of great benefit and prosperity to all who work in it.

Question put, That "fifty" stand part of the Clause:—

The Committee divided: Ayes 206, Noes 6.

Division No. 16.]	AYES	[8.1 p.m.
Ainsley, William	Broughton, Dr. A. D. D.	Critchley, Julian
Aitken, W. T.	Brown, Alan (Tottenham)	Cronin, John
Allason, James	Brown, Rt. Hon. George (Belper)	Crosthwaite-Eyre, Col. Sir Oliver
Atkins, Humphrey	Bryan, Paul	Crowder, F. P.
Barlow, Sir John	Buck, Antony	Currie, G. B. H.
Bennett, J. (Glasgow, Bridgeton)	Bullus, Wing Commander Eric	Dance, James
Bevins, Rt. Hon. Reginald	Callaghan, James	Davies, S. O. (Merthyr)
Biffen, John	Carr, Compton (Barons Court)	Deer, George
Bingham, R. M.	Channon, H. P. G.	Donaldson, Cmdr. C. E. M.
Bishop, F. P.	Chataway, Christopher	Duncan, Sir James
Black, Sir Cyril	Chichester-Clark, R.	Ede, Rt. Hon. C.
Blackburn, F.	Clark, William (Nottingham, S.)	Elliot, Capt. Walter (Carshalton)
Bossom, Clive	Clarke, Brig. Terence (Portsmth, W.)	Elliott, R.W.(Nwestle-upon-Tyne, N.)
Bourne-Arton, A.	Cleaver, Leonard	Emery, Peter
Bowden, Herbert W. (Leics, S.W.)	Cliffe, Michael	Emmet, Hon. Mrs. Evelyn
Box, Donald	Cole, Norman	Finch, Harold
Boyle, Sir Edward	Cordeaux, Lt.-Col. J. K.	Finlay, Graeme
Brooke, Rt. Hon. Henry	Corfield, F. V.	Fitch, Alan
Brooman-White, R.	Coulson, J. M.	Foot, Michael (Ebbw Vale)
Fraser, Ian (Plymouth, Sutton)	Lindsay, Martin	Scott-Hopkins, James
Fraser, Thomas (Hamilton)	Linstead, Sir Hugh	Seymour, Leslie
George, J. C. (Pollok)	Litchfield, Capt. John	Sharples, Richard
George, Lady Megan Lloyd (Crmrthn)	Longbottom, Charles	Shaw, M.
Gilmour, Sir John	Loughlin, Charles	Shepherd, William
Goodhart, Philip	Loveys, Walter H.	Short, Edward
Goodhew, Victor	Lucas-Tooth, Sir Hugh	Silverman, Sydney (Nelson)
Gourlay, Harry	McAdden, Stephen	Skeet, T. H. H.
Gower, Raymond	McCann, John	Small, William
Grant-Ferris, Wg. Cdr. R.	McKay, John (Wallsend)	Smith, Dudley (Br'ntf'd & Chiswick)
Green, Alan	McLaren, Martin	Soskice, Rt. Hon. Sir Frank
Greenwood, Anthony	Macleod, Rt. Hn. Iain (Enfield, W.)	Spearman, Sir Alexander
Gresham Cooke, R.	MacPherson, Malcolm (Stirling)	Spriggs, Leslie
Griffiths, David (Rother Valley)	Macpherson, Niall (Dumfries)	Stewart, Michael (Fulham)
Griffiths, Rt. Hon. James (Llanelly)	Maddan, Martin	Stodart, J. A.
Gunter, Ray	Manningham-Buller, Rt. Hn. Sir R.	Studholme, Sir Henry
Hamilton, Michael (Wellingborough)	Manuel, A. c.	Summers, Sir Spencer (Aylesbury)
Hamilton, William (West Fife)	Markham, Major Sir Frank	Taylor, F. (M'ch'ter & Moss Side)
Hannan, William	Mathew, Robert (Honiton)	Teeling, William
Harrison, Col. Sir Harwood (Eye)	Mawby, Ray	Temple, John M.
Hart, Mrs. Judith	Maydon, Lt.-Cmdr. S. L. C.	Thatcher, Mrs. Margaret
Harvey, John (Walthamstow, E.)	Mills, Stratton	Thomas, Leslie (Canterbury)
Hastings, Stephen	Montgomery, Fergus	Thompson, Kenneth (Walton)
Hay, John	Moore, Sir Thomas (Ayr)	Thornton-Kemsley, Sir Colin
Hayman, F. H.	Noble, Michael	Turner, Colin
Herbison, Miss Margaret	Osborn, John (Hallam)	Turton, Rt. Hon. R. H.
Hicks Beach, Maj. W.	Oswald, Thomas	van Straubenzee, W. R.
Hill, J. (Midlothian)	Page, John (Harrow, West)	Vickers, Miss Joan
Hill, J. E. B. (S. Norfolk)	Page, Graham (Crosby)	Vosper, Rt. Hon. Dennis
Holland, Philip	Pearson, Frank (Clitheroe)	Walder, David
Hollingworth, John	Peel, John	Wall, Patrick
Hornsby-Smith, Rt. Hon. Dame P.	Pitman, Sir James	Warbey, William
Howell, Charles A. (Perry Barr)	Pitt, Miss Edith	Ward, Dame Irene
Hoy, James H.	Popplewell, Ernest	Webster, David
Hughes, Emrys (S. Ayrshire)	Pott, Percivall	Wells, John (Maidstone)
Hughes-Young, Michael	Powell, Rt. Hon. J. Enoch	Whitelaw, William
Hutchison, Michael Clark	Price, H. A. (Lewisham, W.)	Williams, Dudley (Exeter)
Hynd, John (Attercliffe)	Price, J. T. (Westhoughton)	Willis, E. G. (Edinburgh, E.)
Irvine, Bryant Godman (Rye)	Pym, Francis	Wills, Sir Gerald (Bridgwater)
James, David	Quennell, Miss J. M.	Wilson, Geoffrey (Truro)
Jenkins, Robert (Dulwich)	Ramsden, James	Winterbottom, R. E.
Johnson, Eric (Blackley)	Rawlinson, Peter	Wood, Rt. Hon. Richard
Johnson Smith, Geoffrey	Redhead, E. C.	Woodhouse, C. M.
Jones, Elwyn (West Ham, S.)	Redmayne, Rt. Hon. Martin	Woodnutt, Mark
Kerans, Cdr. J. S.	Rees, Hugh	Woollam, John
Kerr, Sir Hamilton	Renton, David	Yates, Victor (Ladywood)
Lawson, George	Robinson, Sir Roland (Blackpool, S.)	Yates, William (The Wrekin)
Lee, Frederick (Newton)	Roots, William
Lee, Miss Jennie (Cannock)	Ross, William	TELLERS FOR THE AYES
Lewis, Kenneth (Rutland)	Russell, Ronald	Mr. Edward Wakefield and
Lilley, F. J. P.	St. Clair, M.	Mr. Gordon Campbell.
NOES
Cooke, Robert	Hirst, Geoffrey	TELLERS for THE NOES
du Cann, Edward	Maxwell-Hyslop, R. J.	Mr. Nabarro and
Harris, Reader (Heston)	Pannell, Norman (Kirkdale)	Viscount Hinchingbrooke.

Motion made, and Question proposed, That the Clause stand part of the Bill.

Mr. Warbey

It would not be proper for us to part with the Clause without having a statement from the Minister about the terms of repayment of the advances which are being made under the Bill, and also of the rates of interest which will be charged on those advances.

The Government are curiously coy about the loans which they make to the National Coal Board and about the interest rates which they charge on them. For example, I have been endeavouring to find out what loans have been made to the Coal Board during the past eleven months and what rates of interest have been charged. I have been unable to obtain that information, and I hope that before we have finished this evening we shall at least have from the Parliamentary Secretary or the Minister a statement of the conditions under which loans will be made under this Bill.

In passing this Bill, we shall not only be giving financial assistance to the Coal Board but shall also be imposing upon it a burden of extremely high interest rates. On Second Reading, the Parliamentary Secretary said: It was the Act passed by the Government of hon. Gentlemen opposite which put the interest burden on this industry."—[OFFICIAL REPORT, 29th November, 1961; Vol. 650, c. 563.] It did not. It is true that the Act passed by the Labour Government made it possible to put an interest burden on the loans made to the National Coal Board, but it did not impose the burden which exists at the present time. The burden at present is the result of the policy of a Tory Government in successively imposing increased rates of interest on the loans which they made under successive coal industry Bills.

As I pointed out on Second Reading, the first loan made by the Labour Government under the National Coal Board's borrowing powers—a loan of £20 million—was made at a rate of interest of 2½ per cent. The latest loans made to the Coal Board in 1960 were made at 6⅛ per cent., nearly two and a half times as much, and that has had an enormous effect on the finances of the Board. I have calculated that if one takes the outstanding advances to the Coal Board since 1st January, 1947, that is to say, excluding the original advance made in respect of the assets vested in the Board on vesting day, the total amount of £621.4 million was outstanding on 31st December last. The interest payable on that amount totalled no less than £29 million. If the interest rate on that proportion of the Coal Board's indebtedness had been at only 2½ per cent. throughout, the interest would have been reduced by £14.9 million. In other words, it would have been reduced by approximately half the amount which the Coal Board has had to pay on these loans. If this had taken place, the Coal Board today would not have had a deficit on its current account, but would have a surplus.

8.15 p.m.

What the Government are doing under their present interest policy is to impose further burdens upon the Coal Board, and to make it more and more difficult in the future for it to make a surplus on its current account. In his Second Reading speech, the Parliamentary Secretary delighted us with one of those pungent statements of the classical economic doctrines of Adam Smith in which he delights. He said: … it would be wrong to make it too easy to obtain money on too easy terms. If money is to be of real value, and the advancing of that money is to be appreciated, it must bear its proper charge, and that is what has happened."—[OFFICIAL REPORT, 29th November, 1961; Vol. 650, c. 563.] It is rather comical in the twentieth century to hear the hon. Gentleman talking about money having a value over and above its exchange value and talking about it bearing the proper charge. It is time that we came up to date and stopped burdening our public investments with out of date charges which have no relation to the real cost of investment and production.

The right hon. Gentleman and his friends ought to take a leaf out of the book of the Soviet Union and other Communist countries in this respect. They have long ago given up this foolish idea that public investment in national industries ought to be burdened with the payment of interest rates to moneylenders. The calculations of the cost of capital investment should be related to the real cost in terms of the labour and materials involved in the making of that investment. If one does that, one not only has a truer picture of the amount of public investment which the country can afford but also a truer picture and a truer representation of the real division of the profits of industry between different classes of the community. What the Government are doing by their high interest rates is to impose a burden on public investment in order to give a handout to the moneylenders. It is as simple as that.

Surely, when the Government are interested in getting the co-operation of the workers in raising national productivity and in improving the country's economic position, they should have some regard to the natural reactions of the workers who are told, as the Minister told them this afternoon, that they cannot have even one penny of pay increase, even if they have earned it by increased productivity, but that, at the same time, the industry in which they work has to continue to pay a toll to the people who invest their capital or, rather, invest other people's capital which they have borrowed.

I find it shocking that the Minister says that to the miners and at the same time says that the moneylenders of the country can have their increased rates of interest, the land and property speculators can have their capital gains and the Surtax payers can have their £85 million. But the miners and the other productive workers cannot even have a penny increase. If, instead of ordering the miners not to make any demands for increases at present, the Minister ordered the moneylenders during the pay pause not to take a penny of interest on the money which they lend to the Government, and which the Government lend to the National Coal Board, he would get some co-operation from the miners in trying to get the country out of the economic slough into which the Government have pushed it. Unless they are prepared to do that, the Government will not get the response which they hope to get from the miners or from any other workers.

I think that my plea will fall on deaf ears. It would be a surprising contribution towards what the Minister sought this afternoon if the Parliamentary Secretary announced that loans under the Bill would be free or at a nominal rate of interest.

The Parliamentary Secretary to the Ministry of Power (Mr. J. C. George)

Indeed, it would be a very surprising development if I made any such statement as the hon. Member for Ashfield (Mr. Warbey) wishes to hear. I will not follow him along the charming road which he described, when he spoke of the conditions in Soviet Russia, nor will I add anything to the way in which my right hon. Friend dealt with all the issues raised on the pay pause and the treatment of the mining industry. I will confine myself to the simple issue which the hon. Member raised at the beginning of his speech.

It is true that in my closing speech I said that the 1946 Act passed by the Socialist Government gave power to levy an interest rate, and that this interest rate has always been the appropriate Exchequer rate at the time of the advance. It is true that the burdens have risen during the years and that because they have risen it is more difficult for the Coal Board to make ends meet, but these are normal methods of borrowing money, whether in a free enterprise or in a nationalised enterprise. The rate of interest prevailing at the time money is borrowed is the rate to be paid for it. As the hon. Member well knows, the rate paid by the N.C.B. is lower than that at which free enterprise can obtain its money on the open market.

Mr. Warbey

Is the hon. Member seriously suggesting that the Government of the day can do nothing about determining the prevailing rates of interest?

Mr. George

Indeed, the Government can do quite a lot and have done so from time to time. They have influenced the prevailing rates of interest. But to give this industry its capital at a rate less than that at which it could normally be obtained would be to give the industry a concealed subsidy, and that is not the Government's intention now, nor can I see it being the Government's intention in the future. This industry would wish, for its own dignity, to pay the proper rate for money which it borrows. If it is in difficulties they must be dealt with in some other way.

The Government will not let the industry down. A battle is being fought with the aid of the Government to raise productivity and to get this industry on to a basis of permanent viability. There is nothing but good will on the part of the Government towards the industry. I assure the hon. Member that if he hopes to see a viable industry standing on its own two feet, that also is exactly what we on this side of the Committee desire to attain.

Mr. William Hamilton (Fife, West)

I will not detain the Committee long, but I want to make one or two comments on the Parliamentary Secretary's speech. We fundamentally disagree on the basis on which our society is run. Given the kind of society which we have, of course we shall have to pay for the money we borrow. But we believe that there can be differential rates of interest which can be determined by the Government. For instance, we have maintained that local authorities should have a lower rate of interest for their house building and other social services than that which obtains in the other money market. Did not the Government, when they introduced the Bill giving a grant to the Cunard Company, fix the interest for that loan at a lower rate than the then prevailing market rate? Thus, there is no doubt that it can be done.

The Minister and the Parliamentary Secretary said that they want to make the industry viable. Let me give an example which makes me question that proposition. About £20 million has been sunk in the Rothes pit in my constituency; about £8 million has gone on the shaft-sinking, but the total expenditure is nearer £20 million. The future of this pit is in jeopardy, and after the reappraisal which the hon. Member talked about on Second Reading, the pit may be closed altogether. I hope that that does not happen, but it is possible that it will, in which case that capital must be repaid plus the interest. The interest will still be chargeable although the pit will be closed.

In the Bowhill Colliery the capital sunk in redevelopment is about £5 million. If that pit goes the way we fear Rothes may go, the interest and capital on that, too, will have to be repaid by the Scottish Division of the Coal Board. This is a weird and wonderful way of making an industry viable by insisting that this interest should be paid. The hon. Member should keep in touch with what other Departments in the Government are doing. Has he heard of the Transport Bill? In the financial situation in the Transport Bill, the Government are writing off many of the obligations of the Transport Commission. All that we are saying is that where the industry has undertaken financial commitments for social reasons, these ought to be accepted by the Government. Where, as in the case of Rothes, there are geological reasons which could not be known to the Board but which nevertheless impose burdens on the future of the industry and, therefore, make it less viable than the Minister seems to want, these liabilities should be taken over by the Government.

If the Government are serious about making the Scottish industry viable, I would even suggest having a differentiation between the treatment of the Scottish industry and the English industry, because the Scottish industry is in a much worse plight than the English industry. This would do a good deal to restore the confidence of the Scottish miners and people in the future of their industry.

Question put and agreed to.

Clause ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

Bill reported, without Amendment read the Third time and passed.