§ (1) Profits of a trade commenced after the passing of this Act and consisting of or including the working of a non-ferrous metal mine situated within the United Kingdom, being profits arising from the working of the mine and so arising during a period of thirty-six months, beginning with the day on which the mine is first brought into commercial operation, shall be exempt from the profits tax.
§ (2) For the purposes of this section a mine shall be deemed to be brought into commercial operation as soon as substantial quantities of ore are extracted from the mine for any treatment and for disposal; and such substantial quantities shall not be taken to include ore extracted in the course of searching for, discovering or testing mineral deposits or winning access thereto.—[Mr. H. Wilson.]
§ Brought up, and read the First time.
§ 5.0 p.m.
§ The Temporary Chairman
I think that it will be for the convenience of the Committee to discuss at the same time the other new Clause in the name of the right hon. Member for Huyton (Mr. H. Wilson)—(Non-ferrous metal mines in United Kingdom; relief from income tax).
§ Mr. Geoffrey Wilson (Truro)
On a point of order. When my hon. Friend the Member for Bodmin (Mr. Marshall) did not move his new Clause—(Income Tax: non-ferrous metal mines in United Kingdom)—last night I understood then that we should be free to debate it today on this new Clause.
Mr. H. Wilson
Further to that point of order. I was going to make the same point myself. The hon. Member for Bodmin (Mr. Marshall) did not move his new Clause last night. It was a very late hour, and I tried to safeguard the position by asking your predecessor in 1514 the Chair, Mr. Arbuthnot, whether he agreed that when this new Clause was called, we could debate that one at the same time, and he gave that assurance.
§ Mr. H. Wilson
I beg to move, That the Clause be read a Second time.
The question whether this debate takes place on the new Clause in the name of the hon. Member for Bodmin or on the new Clause which I am now moving is to some extent academic. We are all concerned with the same point, and I suspect that the hon. Member for Bodmin and I myself will be making the same speeches that we would have made had the new Clause been discussed last night.
The purpose of the new Clause is to provide special tax treatment for a single industry, and, therefore, I think it is incumbent upon whoever moves it to prove a special case for such treatment, as it is unusual to ask for special treatment for an industry. That case, however, is that in the national interest it ought to be done, since we are facing a world shortage of tin, and today's headlines underline the timeliness of this debate. It will mean serious economic problems for this country, and it is, therefore, vital that we should take all possible measures to develop the tin resources of this country.
The second reason is that, because of the peculiar difficulties and risks of tin mining, due to the disposition of the metal by nature, special tax concessions are required. These are the two main reasons for advocating what normally all of us would hesitate to do—special tax treatment for a single industry—and I 1515 should like to deal with each of those two points.
First, there is the world shortage of tin. The Committee will be aware that for some time the price of tin has been right up to the ceiling level of £880 fixed under the International Tin Agreement. There has been talk for some time that the ceiling price would have to be raised to £1,000. As hon. Members will know, while we were sitting yesterday the price burst through the ceiling and it is now officially admitted that there is no tin left in the buffer stocks of this very important International Tin Agreement. This is important, because it is not just the result of a short-term market factor. Speculation in tin in the old sense has been made impossible by the existence of the Agreement, and what is going on is a reflection of basic facts about a world tin shortage.
We are facing a world shortage of tin this year and, I should have thought, probably for many years to come. The only short-term hope that can be put forward lies in sales from the United States strategic stock pile. That could make an immediate difference but obviously it is not a solution to the long-term problem. This year the estimated world production, excluding Russia and China, for which the figures are rather difficult to obtain, is 140,000 to 150,000 tons. Estimated world consumption, excluding the same two countries, is 173,000 tons. This makes very little allowance for increased consumption in America this year as industrial recovery gathers momentum. The gap between production and consumption could easily be 30,000 tons or more.
The problem for us—this is what is relevant to the new Clause—is whether this is a temporary situation. It is proposed in our new Clause and in the hon. Gentleman's two new Clauses that there should be special tax treatment for the tin industry to encourage the expansion of production of this metal within this country. This is why I am spending a little more time than I otherwise would have done in deploying the case that this is not a temporary shortage.
Consumption is rising very, very sharply all over the world while production, on the whole, is declining. The consumption of West Germany in 1958 1516 was 9,800 tons, in 1959, 16,850 tons, and in 1960, 27,750 tons. This year it will probably be over 30,000 tons. These figures show a threefold increase in three years. It can be seen, therefore, that we will need all the tin that can be produced, including the perhaps rather small contribution which this country can make. How far the German figures which I have given include some leakage through the control to East Germany, I should not like to say. It is one of those endearing practices in which West Germany indulges at the moment when it is preaching to us against even legitimate trade with East Germany. As I have said, taking that one country, consumption of tin has more than trebled in three years.
Looking at the world picture, we must expect a big increase in consumption year by year by Russia and China. Russia's annual consumption per head is 0.18 lb. per annum, less than one-fifth of our consumption in this country. With Russia's steadily rising industrial production, we must expect its tin consumption this year to rise at least proportionately. In view of the growth of consumer industries, of which many of us saw evidence on visits to Russia, tin consumption is likely to rise more than proportionately with industrial consumption. If it grows at only half the present British level per head, the world will need another 24,000 tons of tin. That would be equivalent to increasing this year's supply by about one-sixth to meet the additional requirements of Russia alone. As soon as China, where consumption per bead is only 0.02 lb. per head per annum, one-forty-fifth of ours, begins to develop its industries seriously, its potential demand for tin will be enormous.
All the experts agree that there is a big prospective world shortage of tin, not just for this year, but for many years to come. On 8th June The Times stated:The only hope for the industry seems to be to encourage marginal producers to open their mines up again".That phrase is directly relevant to this new Clause, because we are talking about marginal producers in this country who are governed by our tax system.
If The Times is right in saying this—I think that it is—where are we to 1517 expect tin production to develop? I think that hon. Members will agree that increased production will not come from Malaya, where the first four months of this year produced less than 26,000 tons compared with 28,000 tons in the previous four months. Malaya is slowly getting worked out of tin. Bolivia is not even reaching its quota for tin production, the quota which was in operation during the restriction period. Hon. Members may have reservations about the likely output of tin from Congo mines. One would be very doubtful I think, certainly on economic grounds, about expecting a marked rise in production in Indonesia. Shipments from the Soviet Union to the West are falling. I speak subject to correction, but I cannot see a single source in any part of the world to which one can turn with any real hope of getting the increased production of tin which the world will need.
In its summing up of this issue of 24th May, The Times said:Under the impact of the prevailing high prices, production this year, in spite of the losses in the Congo, might still be brought nearer the potential output, but if requirements are to be met over the next few years a major expansion in the world's developed tin resources must be ensured.This is a question, not of a few months but of a few years ahead.Such development work will inevitably take time and the delay may assume dangerous proportions unless suitable legal, administrative, technical, and economic preconditions can be secured in the most promising producing regions.It goes on to say:…after three decades of stagnation there is no more time to be lost; today's meeting of the International Tin Council must open a new chapter in the collaboration to ensure adequate supplies of tin.Having given this evidence of a prospective world shortage, the consequences for Britain will be clear. First, there is a danger of an absolute shortage, of a real absence of the tin that we may need to ensure full employment and the maintenance of our export trade. There is a danger—I do not think that anyone would make light of this—that within a year or two we may be in a position where we cannot get enough tin to keep our tin-using industries going. I do not think that anyone would deny that. With a prospective world shortage and the 1518 kind of price movements that we have seen in the last twenty-four hours, it is clear that Britain may have to pay a good deal more for her tin imports. One can see the effect of this on the terms of trade and our balance of payments. I am sure that the Chancellor of the Exchequer would agree that our balance of payments is in no state to stand any further adverse factors which can be avoided by action which can be taken by this Committee.
There is a third and rather special problem which I think hon. Members will agree is a real problem. If a world shortage develops, we may not get the raw metal which will be needed for use in the British-owned smelters. If a world shortage develops countries like Nigeria and others which are building their own smelters may say, "Our own smelters must come first. We have not any raw material left over foe, shipment to Britain". Anxieties have been expressed about this by some of our principal tin smelting interests in this country. It is the sort of thing which has happened in past years in connection with hides. The leather industries ensured that they did not go short of hides and there were difficulties of shipments of hides on reasonable terms to this country. In a year or two we may find smelters in this country standing idle and we shall be forced to import, not the raw material, but the much more expensive refined metal. That will put an additional burden on our balance of payments.
Therefore, scanning the world horizon for some new or expanding source of supply and, for my part, finding none in prospect—it may be that hon. Members will put me right on this—the question is whether we should reverse the tide of economic history of the past hundred years concerning tin mining and, once again, develop mines in this country.
I do not need to take up the time of hon. Members by referring to the very long history of tin mining in this country, going back to pre-history. Trading in tin provided the first contact between the original inhabitants of these islands and the outside world. The Phoenicians, the Hebrews and the Romans came to trading posts on Scilly and in Cornwall and, in so far as that history is recorded, it provides an extremely fascinating story 1519 for all who are interested in those parts of the world.
There was great development with the Industrial Revolution, reaching its peak about the 1870s when this country produced an annual output of 9,650 tons a year. Then we got the tide moving in the opposite direction. Largely with Cornish money and certainly with a lot of Cornish skill, Malaya was developed as an alternative source of supply—it was cheaper. The Cornish industry began its long decline and we have now got back to nothing like the position of the 1870s. By the turn of the century, production was down to half of what it was in the mid-1870s and Cornwall almost ceased to have a tin mining industry. There are now two main companies, admittedly large, and the country's output is about 1,200 tons a year, less than 1 per cent. of world supply and only about one-eighth of what it was in the peak period some seventy or eighty years ago.
It is clear that we need international interest to develop home production. It is more than arguable that we are, or shall be, internationally committed to do everything in our power to increase home producton. The Financial Secretary will no doubt have studied the International Tin Agreement and will have seen Article 13, which deals with this problem. We are signatories and custodians of the International Tin Agreement, of which Article 13 says:If the Council considers that a serious shortage of tin is likely to develop, it may make recommendations to the participating countries:(i) with a view to ensuring the maximum development of production in the producing countries…We are a producing country. Have any such recommendations come from the Tin Council? Perhaps the Financial Secretary will tell us. I doubt whether they have come yet, but are Her Majesty's Government ready with their answer if there is a panic call, if there is a clarion call, from the Tin Council to all producing countries to do all that they can to increase production?
Having proved the need for increased production by this country—I do not want to over-state the case, for even if it were doubled or trebled it would still be only a small proportion of total world consumption, although that is no argument 1520 for not doing it—there will be no argument but that tin does exist in substantial and winnable quantities beneath our soil. That is beyond doubt.
There will be no argument about the the fact that finance is prepared to come in. I understand that some of the big Malayan companies are now prepared to invest in production in this country because of the working out of deposits in Malaya. Here we see the possibility of an interesting reversal of the economic trend of the 1870s and 1880s which at that time had such a devastating effect on the Cornish tin industry.
There is no argument but that we have the skill and technique in this country to develop the industry and, on the facts I have given, there can be no argument but that we face a shortage, so that there should be no argument about this being one of the very few indigenous raw materials which we have, a raw material in conditions of a prospective world shortage.
We cannot afford to neglect our own resources. The problem lies in the taxation provisions, having regard to two problems. The first is the uniquely difficult problem of prospecting, despite the help given by the Finance Act, 1945. The second is the high cost of shaft sinking and development.
The prospecting problem relates to the way nature has disposed of the tin. If there are any hon. Members who are not aware of the peculiar problems of the tin industry, they may ask what is the special problem about it and why it is different from coal, gypsum or clay, or any of the other minerals found below our soil.
It is the fact that, despite the difficulties of faultings and so on, deposits of coal, gypsum, ironstone or salt on the whole are fairly easily provable. One puts down a borehole and can be fairly certain that over quite wide areas deposits will be found and in what thickness they will be found. I know that with coal there are grievous disappointments as the result of faultings, but, by and large, with minerals such as anhydrite, of which there has been a big development in Cumberland, one can be fairly certain about what one finds. With metal bearing lodes, the amount of metal found from place to place just cannot be 1521 predicted accurately, and one cannot do very much about it by sinking boreholes.
Therefore, as the equivalent in tin mining to what would be simple bore-holes in other industries, one has to go in for a very expensive amount of shaft sinking and tunnelling, both slaw and costly operations, with no question of any profit while they are going on. At the end of the day, one might find results which were extremely disappointing and the whole of the money might be lost and there might not be any tin. That happens quite frequently.
When the ore is found, there is further delay and further expenditure on machinery and equipment and treatment plant before one can begin to sell. Even when in production, there are still problems about maintaining supplies on a sufficient scale to provide what might be called really commercial operations. That is why all three Clauses stress the start of really commercial operations.
There are the two problems, first of finding the tin and then, having found it, of getting to the point of production. In both cases this industry can claim certain unique qualities, or disadvantages, which provide us with the case for unique tax treatment.
The Clause I have moved in effect suggests a tax holiday. In other countries, in Canada and Eire, for example, the position is that complete exemption is provided from Income Tax and Profits Tax on new mining undertakings for the first three years from the commencement of regular production. Canada also has generous allowances for the depletion of ore reserves, but since that raises a question which is taken up by another new Clause, which is not to be called, I cannot go into it now.
I am not suggesting, and I am sure that the hon. Member for Bodmin and his colleagues are not suggesting, that this is the only way in which to do it, or the perfect way. We know that the Government could produce powerful arguments about these Clauses. I am in no doubt about that. But if they cannot accept these proposals, I hope that they will tell us what they are prepared to accept.
There are several possibilities. One might he that the unrecouped losses of operators, both as regards prospecting 1522 and the first few years of production, should be carried forward against subsequent profits, making full allowance for exploration and sinking. If the Chancellor cannot accept these proposals, I hope that he will say that he is prepared to look at that as an alternative.
Hon. Members will remember that this proposal was put forward by the very important Committee set up by my right hon. Friend the Member for Easington (Mr. Shinwell) shortly after the war. That Committee produced one of the most important Reports produced in the immediate post-war days. This was the Committee on Mineral Development known as the Westwood Committee, Hon. Members will have read its Report—I am sure that the Chancellor is familiar with it—in Cmd. 7732. The right hon. Gentleman the Minister of Aviation was a member of that Committee, although he produced a memorandum of reservations. But paragraph 343, I think it is, of that Report, summarising Recommendation No. 4 (ii), provides proposals about taxation rather on the lines which I have been indicating.
Here we get this powerful Committee, representing geologists and industrialists, the then Director of the Royal School of Mines, economists, mining engineers and all the rest, coming forward and suggesting that the losses incurred during the early years of operation of a mining concern should be carried forward and charged against the first profits available with no limit on the period during which they can be carried forward.
That is one alternative to the method we are here putting forward. I hope that the Chancellor when announcing that he is accepting this Clause will also feel, having regard to the very grave situation which I have outlined, that it is now high time that the Government should accept the other recommendation of the Westwood Committee. We find it in paragraph 433 calling upon the Government to institute a complete mineral survey over the whole country. It is a scandal that in this highly-developed country we do not know what lies a few feet below our soil.
I remember during the war when the various Ministers Sir—Andrew Duncan in particular—were talking about opencast mining, some of the geological 1523 experts said that it would be no good, that at best we should not even get 5 million tons. During the period of working opencast mining we have had over 100 million tons. It is obvious that we may have great mineral wealth in other directions which we have not explored.
While the purpose of the Clause is to make it possible for private enter-rise to do more than it is doing at present, this does not absolve the Government from one of their basic responsibilities, of instituting a real mineral resources survey. It is the first thing that we should suggest for an underdeveloped country. It is fantastic that we have not done it here. If it were done it would ease the task of some of the private operators in Cornwall. I am, therefore, making it clear—I hope that I carry with me hon. Members opposite who are responsible for these other Clauses—that we are not necessarily prejudiced in favour of any particular form of words. I should be only too delighted if the Financial Secretary, while accepting the basic argument which we are putting forward, would say that he is going to draft proposals in his own words or, perhaps, find a satisfactory alternative.
It is a fact that the Clause is not new. It has been tabled and moved a number of times in past years by the hon. Member for Bodmin. I think that the hon. Gentleman may claim without any challenge to be the father and author of the Clause. I am not going back to the very first time that he moved it. I think that the hon. Member for Worcestershire, South (Sir P. Agnew)—was he not the hon. Member for Camborne before 1945?—was active in moving a not dissimilar Clause even during the war. So there is nothing very new about it. But what is new, and I think that the whole Committee will agree, is the very desperate sense of urgency as far as the world tin shortage is concerned.
I am not going back to the debates of 1943, but just to two debates. On 19th June, 1956, the present Prime Minister was Chancellor of the Exchequer. He replied to a debate initiated by the hon. Member for Bodmin and this is what he said: 1524I will, of course, gladly give the assurance to all my hon. Friends, who I know are very interested, that we will consider whether further assistance of any kind can be given towards the exploitation of these mineral resources if it is right and wise to do so, but I honestly feel, and I think that those who study our taxation system would agree, that the method suggested is not one that would stand up to the pressure which might be put upon it."—[OFFICIAL REPORT, 19th June, 1956; Vol. 554, c. 1398.]Fair enough. The present Chancellor then said that this particular form of Clause was wrong in terms of our taxation system, but he gave an undertaking that the Government would consider alternative ways of helping the industry, and that was at a time when there was no imminent shortage of tin as there is today. The matter was debated again in 1959 and the then Economic Secretary, now Minister of State, Board of Trade, said this, referring to the debate in 1956:My right hon. Friend did, however, say that he would consider whether further assistance of any kind could be given towards the exploitation of mineral resources. That consideration has since been made and the whole question has been further examined. The Government, however, have decided that they could not agree to a discriminatory form of taxation relief such as that proposed, which is quite foreign to our United Kingdom tax system and quite unrelated to the capital expended. I am sorry to have to disappoint my hon. Friend, whom I would very much like to have been able to meet, but on this occasion I am sorry to say that we cannot accept his Clause."—[OFFICIAL REPORT, 7th July, 1959; Vol. 608, c. 1179.]What was said by both Ministers in those debates was that they could not accept the Clause. I should not be surprised if the Financial Secretary says the same about this Clause, but I hope that he will not and that he will tell us the results of the inquiry and consideration promised by the Prime Minister as long ago as 19th June, 1956. The right hon. Gentleman felt this urgency then, and that was when there was no shortage. At the present time there is this very serious shortage. I think we all agree that it would not be good enough for him to say that this is not the right way to do it, but that we shall consider what might have been done between now and the next time that we debate it in, say, 1964.
I hope that he will tell us that the Government have considered the matter since 1956 and have reached a conclusion and, more particularly, that the Government are deeply anxious about 1525 the tin position in the light of events of the last twenty-four hours. Even if the Government have not been moving in the matter since 1956, I hope that they have been stirred into activity by the events of the last twenty-four hours—by the breakdown of the tin agreement. This shows the clear obligation of all the participating countries to encourage alternative sources of production.
I do not care whether the hon. Gentleman accepts the Clause that we have put down or the Clause standing in the name of the hon. Member for Bodmin. They are not very dissimilar. I do not care whether he is going to accept neither so long as he tells us that he is going to redraft another which, no doubt, will be more elegantly expressed. We shall be delighted if he does that, and I am sure that the hon. Member for Bodmin will be as well. I do not really care if he says that he cannot accept anything in this form so long as he tells us that the Government are going to bring other proposals forward. I certainly hope that he is going to do one of these things.
I hope also that he is going to see the Chancellor, or whichever Minister is now responsible—the Minister of Housing, the President of the Board of Trade; I do not know who is going to implement the proposals which began with the proposals of my right hon. Friend the Member for Easington several years ago and the setting up of the Committee—and is going to say that we shall have a full-dress survey for the country. Although we all realise the fundamental importance of exports in our present position, we all recognise, I think, that the ability of this country to solve all its problems purely by exporting is getting more and more restricted. We are facing a very heavy import problem. It is not autarchic in the real sense of the word but it is in the highest national interest that we should do more to develop more of our internal resources as well as do all we can to export and pay for the goods which we import. There is a very great obligation on any Government, of whichever party, to see that that policy is followed.
This Clause does not relate only to tin. It could relate to copper or to a large number of unfamiliar metals which are becoming household words in many 1526 industries and which might be brought forward in increasing quantity as a result either of the survey which I have mentioned or the adoption of some Clause similar to this.
Therefore, I hope that the Government will answer that they do take the tin shortage seriously, that they are concerned with developing home production of other metals and minerals where the production can be made more economic, and that they do not propose, because of perhaps outdated ideas of where our materials might come from, to allow this essential development, essential for this country and, I believe, for the world, to be held back any longer by systems of taxation which may have been appropriate in their day but are certainly not appropriate to the world mineral shortage we are now facing. I hope, therefore, that the Financial Secretary will either accept this Clause or indicate pretty clearly what the Government otherwise intend to do.
§ Mr. Douglas Marshall (Bodmin)
The first thing I should like to do is to thank the Chair very much indeed for allowing the original Clause which I put down to be considered with this one moved by the right hon. Gentleman the Member for Huyton (Mr. H. Wilson). As he rightly said, the difference between the two Clauses is really of no importance at all. The difference between the two Clauses is purely whether their provisions should become operative in April, as I proposed, or when the Bill becomes an Act, as is proposed in this new Clause. As I have been trying for sixteen years to get this done, I do not really think that four months longer to wait for the Clause to become operative is of such very great importance.
I should like to thank also the right hon. Gentleman for two things, first of all, for so generously referring to myself and to the number of years in which I have tried to get Members of this Committee interested in such a Clause as this; and, secondly, for putting so expertly and reasonably the case which both he and I wish to make.
The difficulty about it, I think, is really this. When my hon. Friend the Member for Worcestershire, South (Sir P. Agnew), then Member for Camborne, in 1943 and 1944 raised this matter, and 1527 when I first raised it in this Chamber in 1946, although the right hon. Gentleman the Member for Easington (Mr. Shinwell), who was then Minister of Fuel and Power, was, as one could undoubtedly feel, sympathetic towards and interested in the proposition and the principle of the matter, yet it did not in any way excite or move hon. Members because there was still a certain degree of thinking that this was in some way a local matter. The right hon. Gentleman the Member for Huyton—and for this I am extremely thankful—stressed its national significance.
It is only by accident that it so happens that that mineral in particular which may be in abundance in this country happens to lie in the area which I and certain of my hon. Friends and the hon. Member for Falmouth and Cambourne (Mr. Hayman) opposite are privileged to represent. Tin, in particular, as is known to all hon. Members of this Committee, has played a very important part not only in the material welfare of this country in days gone by but in the building up of the material wealth and the civilisation of Europe as well.
It is fair to say that from the start a shortage of tin was foreseen. In particular, I refer to the speech made in 1956 by the late Lord Jowitt on this very point. He was then drawing the attention of the country to the coming shortage of tin in the world. That was in 1956. In order to refresh my memory I was rereading his speech in the last day or two. This is now becoming much more crystal clear. Indeed, attention is being focussed upon it more and more, and more specially, as the right hon. Gentleman the Member for Huyton has just said, in the last day or two have people now begun to realise that this is a fact.
What one has got to think about is this. I have no intention of quoting all the different speeches I have made here upon this subject, but the answers which have been given from the Treasury Bench have always formed more or less one simple pattern. They have either said, after the Royal Commission mentioned it, that this proposal has not met with approval by the Royal Commission, or they have said that, if they carried out this proposal, pressures would come upon them from other sources for 1528 similar assistance and those pressures would be too great to resist. Sometimes they have argued in this fashion. They said it in 1945.
I remember speaking to the then Sir John Anderson at that time about it—he had helped a little in the 1945 Finance Bill. They did that again in 1952. My right hon. Friend who is now the Home Secretary also helped. But what they have failed to understand is that, although they offered help, nothing of any sort came of it because that particular form of help is not, in my view, the right pattern, nor is it sufficient in order to promote the adventure of winning this metal from our hills.
It seems strange to me that, in spite of the abilities of this Chancellor and past Chancellors—abilities which I, at any rate, certainly admire—past Chancellors and, it may be, this one too, appear in some way or another to have felt greater fear of finding themselves unable to resist pressures than concern with making use of the wealth which lies in these hills.
To buttress my own opinion, and to give some comfort to the present Chancellor and support to any change of heart which may lie in him, I would suggest that he looks around the world to see how other finance ministers taking part in government in other countries are concerned with the operations of mining and with mineral wealth.
When one gazes at the great panorama of the world one finds that in every instance where success has resulted from the action of the Treasury Bench in the countries concerned a similar pattern to that which we are now suggesting has appeared in the legislation of that Dominion or country. This has happened in Australia, in Canada, and in the United States, where it is true the pattern is slightly different. I cannot help but think that somehow the Chancellor, who is doing the Committee the courtesy of listening to the debate, must have a thought for the point which I am making.
Up to the moment when Eire had no legislation of the kind that we are now suggesting, her mineral wealth was no more developed than it is now being developed in this country, but Canadian operators approached the Treasury in Eire and discussed the matter with those who knew what they were talking about. 1529 In a short while legislation was passed through the Eire Parliament of the kind that the right hon. Member for Huyton and I ask the Chancellor to take into account today. My right hon. and learned Friend knows that the mines in Eire have been opened and operated profitably and that exploitation of that country's mineral wealth is taking place.
I cannot conceive that fear of doing something because that might prevent one resisting doing something else is a factor that should weigh in consideration of this matter. It is difficult to think of a time when this country, with its vast population and its standards of living, will not be fairly precariously balanced in the economic sense, and we must not forget that the country's real wealth is not very great and that our main basic raw materials are china clay, coal, and tin.
I feel very strongly on this subject, and I ask the Chancellor to answer the debate in some way or other and to indicate not only that he realises the position but that he will accept either my Clause or that in the name of the right hon. Member for Huyton or, alternatively, will accept neither and will himself frame a Clause on somewhat similar lines in time for the Report stage. If my right hon. and learned Friend cannot do that, and if he thinks that the risk of resisting our request is greater than the consideration of the national wealth that is hidden in our hills, I have only one thing to do. It is to go into the Lobby against him.
§ Mr. F. H. Hayman (Falmouth and Camborne)
I rise to support my right hon. Friend the Member for Huyton (Mr. H. Wilson) and the hon. Member for Bodmin (Mr. Marshall) and to say particularly how much I have appreciated my right hon. Friend's powerful and comprehensive speech. It was a moving speech for me particularly, as a Cornishman whose family on his mother's side has lived in Cornwall for centuries and whose grandfather was a Cornish tin miner and, I expect, his people long before him.
It must be realised that tin is a precious commodity in the world today, but to find it nowadays it is necessary to go very deep below the surface of the earth. The hon. Member for 1530 Bodmin spoke of our Cornish hills, but the tin mines operated today will be working at depths twice the height of our highest hills, and, moreover, working in granite.
§ Mr. Hayman
Yes. And the vein of tin or lode may be very small, perhaps no more than the thickness of a man's thumb. Fancy searching for a lode of that kind from the surface down through granite to a depth of 2,000 or 2,500 ft. It is true that when the tin is found it is a very profitable enterprise, but the risk to capital involved in searching for tin in Cornwall is very high. Nevertheless, there are two mines working now, Geevor in the constituency of the hon. Member for St. Ives (Mr. G. R. Howard) and South Crofty in my constituency. They are working at great depth and at a profit, although in the case of South Crofty it has been a rather uncertain one in recent years.
The Report of the Westwood Committee set up by my right hon. Friend the Member for Easington (Mr. Shinwell) has already been mentioned. That Committee made one specific recommendation in its Report, that some help should be given to the South Crofty mine situated in what the Committee described as the most highly mineralised zone on earth.
Tin provided a considerable proportion of the revenue for Charles I during the Civil War, and, as my right hon. Friend the Member for Huyton pointed out, it produced considerable revenue for the country in the last century. Indeed, two centuries ago Cornwall was the copper belt of Europe. The copper mines have been exhausted for a century now. I suppose that there is no hope of finding more copper, but the experts are convinced that tin still lies below the earth's surface in the county and that probably it will be found below many of the exhausted copper mines. Some mines in the past which were producing copper were eventually found to contain tin below it, and they continued to be mined for tin with great profit for many years.
I think that with all these points in mind the Chancellor must realise that financiers and others who are prepared 1531 to risk capital to search for tin in Cornwall ought to have the benefit of some tax remission on the lines suggested in the Clause. This may be new to this country, but the country is now facing one of the greatest financial crises in its history and undoubtedly the reserves of tin in the world are limited. There is, therefore, an overwhelming case for granting some tax concession on the lines of this Clause.
My constituency is an area of local unemployment which is entitled to the benefits of the Local Employment Act, though it is true that we are not getting many of them. Consequently, there is all the more reason why the Chancellor should give sympathetic consideration to the Clause.
My right hon. Friend the Member for Huyton mentioned that the smelters in this country might go out of business if they were unable to be supplied with sufficient tin. It reminded me that forty years ago there were in my town of Redruth two tin smelters. The last of the two closed down in 1931. I know what the closing down of smelters means. In Redruth during the 'thirties our average unemployment rate was 33 per cent. We know what unemployment means in my area, and it was due in the main to the collapse of the tin industry after the First World War.
As I have said, the geologists, mining engineers and other experts seem to be convinced that tin is still present in considerable quantities below the surface in Cornwall. I feel that it is to the discredit of Britain that the recommendation of the Westwood Committee for the setting up of a mineral resources survey has never been carried out. It could be carried out in Cornwall, and I am sure that the money would not be wasted. We could point to a great deal of expenditure by the Government in recent years which has been wasted, but I will not go into that.
There is another point linked to this, and that is that at Camborne we have a School of Mines which has turned out many famous mining engineers since before the beginning of the century. Mining engineers trained at Camborne are to be found now in almost every mining camp in the world just as not long ago one 1532 would have found Cornish miners in mining camps in all parts of the world.
I beg the Chancellor to look at this matter in a broad way and to give it his sympathetic consideration. This is a great opportunity. The price of tin has risen today to a point where profitability comes soundly into the picture. As my right hon. Friend has said, the main sources of tin production in the world are lessening, and sources seem to be declining in Malaya. We have an opportunity to bring a larger tin mining industry back to Cornwall.
§ Mr. G. Wilson
I am very glad to be able to support my hon. Friend the Member for Bodmin (Mr. Marshall) in the Clause he mentioned, which is very similar to the one moved by the right hon. Member for Huyton (Mr. H. Wilson).
Although I have no working tin mines in my constituency now, part of the old Cornish mining division is included in it, which gives my constituency a special interest in tin. I have always been very glad to support proposals on these lines which my hon. Friend has been putting forward for a number of years, not only because the motto of Cornwall is "One and all", but because they seem to be common sense.
There are six points about Cornish tin mining which are beyond dispute. First, it is clear that Cornish tin mining did not decline because supplies of tin ran out. It declined because cheaper forms of production were devised elsewhere, as the right hon. Gentleman mentioned, such as the alluvial extraction in Malaya. Secondly, it is beyond dispute that, as the hon. Member for Falmouth and Cambourne (Mr. Hayman) pointed out, there are still considerable quantities of tin in Cornwall.
Thirdly, we all know that the price of tin is high and that a shortage of the metal is beginning to appear in other places. Fourthly, Britain is importing large quantities of the metal, and it is obvious that if that volume of imports could be diminished even a little by the production of tin here it certainly would be no bad influence upon our balance of imports and exports.
Fifthly, since Cornwall tends to be an area of local unemployment, therefore to add another basic industry to a county which has too few basic industries would 1533 be a very good thing. It would be very useful from the employment point of view if we could have a revival of tin mining. We have china clay, mining machinery, ship repairing, agriculture, fishing and tourism, and that is about the lot, and it is rather a short list for a county with such a substantial population.
Sixthly, we should remember that for by far the greater part of the 2,000-year period, during which tin mining has gone on in Cornwall the tin miners were small groups of men who had to rely entirely upon their own physical strength to win and their intuition as to where they would find tin. It is abundantly clear that they have missed many places where there is tin, and there are also many places where there is tin which has not been worked out, which modern methods and machinery could extract. Very limited tin mining is going on in Cornwall at the present time largely because this is a speculative industry and our present system of taxation does not encourage it.
In the debate on the Budget in 1956, the present Minister of State, Board of Trade, replying to the debate, pulled me up because I said that I could never understand why the proposed Clause was not accepted, because it would cost the Chancellor nothing to accept it. There is no development going on at the present time, and if a tax holiday were given for any development that took place the Revenue would lose nothing because it is getting nothing now. I was pulled up for saying that, but I still contend that nothing minus nothing equals nothing. But we hope that with a Clause like this some result would follow, that by adding an inducement we might cause someone to start a speculative enterprise and that some development might follow which would be of benefit to the country for the reasons which have been given. I am very glad to support my hon. Friend.
§ Mr. G. R. Howard (St. Ives)
I have three points to put to the Government. First, I congratulate the right hon. Member for Huyton (Mr. H. Wilson) upon his very good speech in which he covered the ground very well, and also my hon. Friend the Member for Bodmin (Mr. Marshall). I support the plea that 1534 the Government should do something, but I have something rather different to say from what has already been said.
It seems to me that this country will never learn from past experience. One constituent of tin has not yet been mentioned, and that is wolfram, of which 70 per cent. is tungsten, something which is vitally important to us, both in peace and in war. I suggest to the Government that they should read an excellent little book that we have been given called "The Future of Metalliferous Mining in Great Britain" by Mr. Caunter. I shall give some quotations from it which I think are well worth studying. It is time we woke up and realised the importance of this commodity and did something about it, especially in such a time of shortage as the present. In the old days, I understand, it was difficult to separate wolfram from tin, but a constituent of the hon. Member for Falmouth and Camborne (Mr. Hayman) has perfected a pilot machine which enables it to be done easily by magnetic separation.
It is as well to remember what happened during the last war. The book to which I have referred states:We were caught short of tungsten in the middle of the last war and at the height of the German submarine campaign.The author reports a visit by a man from the Ministry of Supply and states:I was informed of the acute shortage of tungsten and of the very large tonnage needed by the Ministry for war purposes. The figures mentioned were staggering, and with no pre-war preparation or development of our deposits, it was quite impossible to meet the country's needs.That happened during the last war and in the previous war.
Before the last war, a committee was set up under the chairmanship of Sir Thomas Inskip, to whom the fears concerning the situation were reported by the author of this book. The reply was given that only three shiploads were needed. People forget, however, that in war ships get sunk by submarines. Yet we rely upon outside countries for this vitally important material, which we could be developing far more than we are doing in our own country.
The right hon. Member for Huyton asked, in view of all the difficulties in Asia today, how long we could rely upon supplies from countries abroad. Is 1535 it not worth while carrying out a comprehensive survey of our resources? If difficulties of this kind are likely to arise in a conventional war, just think what the situation would be if we were faced with nuclear war, when everything would be at a standstill for six months or more and the country which won in a ghastly holocaust of that nature would be the first to get under way afterwards.
That brings me to my next point. What is the country doing about stockpiling? We know that in the United States a great deal has been done but what are we doing about it? Have we any stockpile or reserve supplies? I do not think so.
My last point concerns uranium, and I make this further quotation from the book to which I have referred. It states:Madame Curie carried out her experiments on uranium ore obtained from a tin mine near St. Austell in Cornwall".Uranium is highly important, not only for wartime uses but for such purposes as the cure of cancer. Is any high-powered study being made of this matter to ascertain what deposits we hold in Cornwall, whether they can be worked economically and what is the stockpile situation?
For these and other reasons, I very much hope that the Government will listen to our pleas in this matter and will give this mining industry the support it needs. Even if the Government cannot accept the precise form of the new Clause, let them give us an assurance that they will study this matter and meet us in some way before the Bill is finally passed into law.
§ Mr. R. J. Maxwell-Hyslop (Tiverton)
I should like to intervene briefly in the debate, because we have had some interesting and convincing speeches which might lead my right hon. and learned Friend the Chancellor of the Exchequer to believe that there is no need to help the Cornish tin mining industry and that the requirement for its production is now so obvious that any form of assistance is unnecessary.
I should like, briefly, to stress a few points. Why is it difficult to restart Cornish tin mining? We have already been given some of the reasons, but I 1536 should like to give a few more. The first is that it is almost impossible to raise debenture capital on a mine. As distinct from a factory or an office block, if the enterprise fails the assets are practically worthless. In other words, all the capital has to be raised as risk capital. Secondly, the Cornish mineral deposits above sea level are to a large extent worked out. The rich deposits which are waiting to be won are below sea level.
The concomitant is that if a mine has to be closed for any period, it fills with water and the cost of reopening is extravagant. I believe that part of South Crofty had to close after the 1947 fuel crisis. Because the pumps were stopped, flooding resulted and it was not economic to pump the water out.
§ Mr. Hayman
I am not so sure how serious that was, but certainly, when the mines surrounding South Crofty closed, they were in danger of being flooded out altogether.
§ Mr. Maxwell-Hyslop
That is another reason why Cornish tin mining does not attract capital, although It is obvious that a return could be expected on the money invested.
A third factor to which I should like to draw attention is that in so far as risk capital is available for investment in Cornwall, an alternative and very attractive industry is the china clay industry, which currently shows a pleasing return on the capital invested in it. China clay is a means of diverting capital which might otherwise be attracted into Cornish tin mining.
We have had a fairly broad coverage of the reasons why Cornish tin is likely to be in demand. There is an additional reason which has not yet been mentioned. Recently, I read that either the American or the Russian Government have agreed to supply an enormous tin smelting plant to Bolivia, so that that country can refine its own crude tin, which previously has been exported for refining.
I hope that we have covered sufficient reasons why Cornish mining needs initial assistance to get itself going again to convince my right hon. and learned Friend the Chancellor that he would lose nothing if he were to undertake the measures which every speaker in this 1537 debate without exception has pressed upon him and that both the national and the local gain would be valuable and extensive.
The Chancellor of the Exchequer (Mr. Selwyn Lloyd): I am not at all unsympathetic to the purposes behind the new Clauses. It is common sense that we should attempt to get all the mineral wealth we can from beneath the surface of our own country. I have considered the matter carefully. I saw a deputation which visited me, and I have been thinking of ways in which it would be possible to help the industry. My difficulty is that it already gets a substantial tax holiday.
The following are examples of the existing tax benefits. If the capital required for a new mine was, say, £500,000, of which £200,000 was put into mining works, it would carry investment allowance of 20 per cent. and an initial allowance of 20 per cent. If a further £200,000 were put into plant and machinery, it would carry an investment allowance of 20 per cent. and an initial allowance of 10 per cent. Before any tax would be paid, the total profit would have to reach a figure of £140,000. In addition, there would be a tax-free bonus of £80,000 arising from the investment allowance.
Thus, there is already a substantial tax holiday for people engaged in this kind of enterprise. My problem is one to which the right hon. Member for Huyton (Mr. H. Wilson) referred. If I give a special concession to this industry, will I not have to give similar concessions to every other extractive industry? I am impressed, however, by the arguments used in this debate. Strong opinions have been expressed on both sides. I can make no promise, but I undertake to look at this again between now and Report to see whether there is any way in which I can help by some further kind of tax concession.
My difficulty is that if I were to put forward any sort of concession which was held to be a precedent for all extractive industries, then I could not entertain the idea, but this is a special case. There are special circumstances in connection with this commodity at the present time. I do not want to be misunderstood. I cannot make any promise, but I will look at this again between now and Report.
§ Mr. H. Wilson
I am grateful to the Chancellor for what he has said. There is no doubt that the whole Committee has approached this matter with great sympathy and an awareness of the problems, not only in Cornwall and the industry itself, but also from the national point of view. As the right hon. and learned Gentleman said, this is a matter of plain commonsense for all of us.
We all recognise the problem which he has mentioned—I felt it incumbent upon me to deal with it at the start of my opening speech—that of creating precedents and setting up a whole succession of claims which might, rightly or wrongly, be based on any concession given in this case. I am in no illusions about the problems facing him now that he has undertaken to have a fresh look at the matter.
As my hon. Friend the Member for Falmouth and Camborne (Mr. Hayman) said earlier, I hope that the Chancellor will look at this quite broadly and not specifically and narrowly in terms of this new Clause. We know his difficulties, but I hope that he will look much more widely and may, perhaps, give some thought to something that follows from what my hon. Friend said—that this area is one of unemployment and perhaps some arrangements could be made in connection with financial assistance available for that.
I do not want to stress that aspect too far, for none of us believes that in the long run this would lead to a big expansion in employment, because for historical reasons there has been a shortage of skilled miners in the area. Nevertheless, that might be one line for him to pursue.
I hope that the right hon. and learned Gentleman will look at the proposal for a mineral resources service, which was supported on both sides of the Committee, and also at various possible tax proposals. In view of his assurance I do not intend to ask my right hon. and hon. Friends to press this matter to a Division. He gave no commitment, and we understand that, but naturally we shall want to return to this matter on Report. If the result of his investigations proves negative, we may then have to take the action which we would otherwise have taken today, and he understands that.
§ Mr. Hayman
We are grateful to the Chancellor for his promise to look at this again. He referred to other extractive industries, but there is none other in the country where the risk to capital is so great as in this one, because, as I pointed out, the veins of tin are so far below the surface and are so tiny.
§ Mr. Marshall
I want to thank my right hon. and learned Friend for his attitude to this and for the way in which he has answered the debate. I am grateful to him.
§ Mr. H. Wilson
In view of the Chancellor's statement, and the reasons which I have given, I beg to ask leave to withdraw the Motion.
§ Motion and Clause, by leave, withdrawn.